Managing Director of Saab Great Britain Limited, Jonathan Nash, has responded to Wednesdays Budget announcement by again urging the government to do more to encourage the development of the UK biofuels industry through customer incentives.

Mr Nash welcomed the Chancellor’s announcement of a two per cent discount from company car tax from April 2008 as an important new incentive for flex-fuel cars, equipped to run on eco-friendly bioethanol E85.

However, he noted that changes to vehicle excise duty (VED) would give no encouragement to private buyers of a flex-fuel car.

“Vehicles that run on bioethanol E85 such as the Saab BioPower range typically reduce CO2 emissions by 50-70 per cent. Unfortunately, Mr Brown’s headline-grabbing increase in VED which is designed to hit the most polluting cars on the road won’t help green-minded drivers to opt for a flex-fuel car,” commented Nash.

“I am deeply disappointed that vehicle excise duty (VED) rates take no account of the positive contribution that biofuels can make. That makes no sense if the Chancellor's objective is to reduce CO2 from road transport,” Nash pointed out.

“Although I welcome the extension of the current 20 pence per litre duty rebate on biofuels until 2010, the fact that the rebate has not been increased will do nothing to reduce the cost of eco-friendly bioethanol E85 at the pump.”

“My fear is that the UK continues to fall behind other European countries where a more generous package of incentives is encouraging consumers to embrace this exciting new technology right now, and reduce the environmental impact of their new car purchase.”

Saab is currently the only car company in the UK to offer an alternative fuel engine choice in every single model in its line-up and has been at the forefront of the UK’s emerging bioethanol industry. Saab’s innovative BioPower flex-fuel technology allows its cars to run on either bioethanol E85 (produced from agricultural crops such as wheat, sugar beet and woody sources), standard unleaded petrol or any mix of the two, without any adjustment required by the driver. When running on bioethanol E85, these cars typically emit 50 – 70 per cent less fossil CO2 than their petrol equivalents.