Low carbon bus fund gets EU green light

The government's plans for a new £30m fund to help promote the adoption of low carbon buses was given a green light from Brussels yesterday after the European Commission concluded that it did not contravene rules governing state aid.

The Commission ruled that the scheme was entirely in line with EU state aid rules, particularly given the release of guidance last year that confirmed state aid should be allowed where "aid measures will result in a higher level of environmental protection than would occur without the aid".

The move was welcomed by the Department for Transport (DfT) which, having seen the bidding period for grants close yesterday, can now move to announce the awards before the end of the year.

Under the scheme, which was announced earlier this year, projects designed to cut bus emissions by 30 per cent would be eligible for grants to help fund their development.

Speaking at the time, transport secretary Lord Adonis said the grants would "support the purchase of several hundred low carbon buses and, just as importantly, help to stimulate the development of a new green technology industry and help to safeguard up to 900 jobs in bus manufacturing".

The DfT said that the grants were expected to support a range of projects, including plans for zero carbon electric and fuel cell buses as well initiatives to roll out fuel-efficient hybrid buses.