THE Government has been accused of obstructing fuel cell innovation and allowing other countries to take the lead in developing the technology, according to a damning report published by the Institute for Public Policy Research (ippr).

The report, entitled 'Tomorrow's Low Carbon Cars' believes the Government is fighting shy of 'picking winners' in the alternative fuel market.

It says: 'One of the major reasons why the UK is lagging behind is that the Government does not want to appear to be choosing hydrogen and fuel cell technologies over other vehicle technologies. Despite the rhetoric about the benefits of hydrogen, no specific long- term policies or initiatives were introduced for supporting the development of hydrogen or fuel cell vehicles.'

The IPPR is also critical of the Government's fuel duty policy, suggesting it is set on an irrational basis, and calls for a 'clear long-term strategy linked to environmental benefits'. It said: 'There is too much secrecy in the way fuel duty incentives are set by the Treasury, leaving companies uncertain of the Government's long-term intentions regarding low carbon fuels.

'The Government should avoid creating another dead- end market that is dependent on public subsidy by developing longer term price signals that reflect climate change objectives.'

The report calls on the Government to make the UK an attractive market for hydrogen and fuel cell investments and to pool resources and share results with other countries. It also recommends grants should be made available for such development, although it recognises that they will not take priority over such areas as schools and hospitals.

Despite the discrepancies with the Government's handling of levies on low carbon cars, there has been a distinct improvement in CO2 emissions produced by vehicles in recent years. According to the report, the average car today produces 178g/km of CO2, a 7% reduction over average emissions in 1997 and the European car industry has pledged to reduce levels even further. It wants CO2 emissions from the new car parc to fall to an average of 140g/km by 2008.

However, to achieve emissions of 100g/km, which the Government's 'Powering Future Vehicles Strategy' aims to introduce for one in every 10 new cars sold by 2012, more energy-efficient technologies will have to be introduced.

'This could include hybrid-electric cars or conventional diesel cars with lightweight, fuel-saving design features. The Government will have an important role to play in helping to create a market for more energy-efficient cars through the provision of tax incentives and purchase grants,' the report states.

As for the future of liquefied petroleum gas (LPG), the outlook is far from certain. An increase in low sulphur fuels and petrol and diesel cars which are more environmentally-friendly could jeopardise LPG's popularity.

'A combination of advances in pollution abatement technologies, the availability of lower sulphur fuels and improvements in the environmental performance of conventional petrol and diesel cars suggest that the case for LPG will grow increasingly weak,' the report says. The ippr is calling for the tax break benefits on LPG to be reduced to reflect CO2 benefits, as the current system does not distinguish fuels by their well-to-wheel emissions, according to the body.

The report states: 'Well-to-wheel emissions not only account for exhaust emissions created from driving the car but also the emissions created in the production and distribution of the fuel.'

  • For a full copy of the report visit www.ippr.org.