Sources say incentives could include slashing taxation on hydrogen fuel to lower levels than the current rate for liquefied petroleum gas and compressed natural gas. A spokesman for the Department of the Environment, Transport and the Regions confirmed that hydrogen would be the cornerstone of future fuel policy and added: 'The Government's commitment to delivering both air quality and climate change benefits through increased use of more environmentally-friendly alternative fuels in the UK supports early steps towards a hydrogen-based economy.'
The Government is planning a consultation exercise in the summer on how best to develop alternative fuels, although a date for its launch has yet to be set, with the DETR spokeswoman adding: 'The Government will be supporting research and development and new technologies with tax incentives.' The Department of Trade and Industry has already announced it is making £55.5 million available for research and development into alternative fuels, including bio-fuels and fuel cells.
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