Green groups demand red light for car scrappage scheme

The government's £300m car scrappage scheme is officially launched today, with 38 manufacturers signing up to offer consumers a £2,000 discount on a new car.

But despite being branded a green initiative by ministers, environmental groups today reiterated their opposition to the scheme, criticising it for failing to provide drivers with an incentive to switch to low-emission vehicles.

Under the scheme, drivers with cars that are more than 10 years old can trade them in for a new model in a move designed to kickstart the faltering industry and take older, less fuel-efficient models off the road.

Business secretary Lord Mandelson said the scheme meant more choice for consumers and a boost for British brands. "The scheme has been met with a flood of enquiries from customers," he said. "It will provide a boost to the industry and kickstart sales."

Half of the £2,000 grant will be paid for by government with the other half coming from industry.

But green groups have criticised the scheme – which will run until March 2010 – arguing that its failure to include safeguards that ensure only the most fuel-efficient cars are purchased means that it will deliver negligible reductions in carbon emissions.

Friends of the Earth executive director Andy Atkins said the scrappage scheme was a lost opportunity for the government to really incentivise people to purchase greener vehicles.

"A well-designed scheme could have played a limited role in cutting emissions from our roads," he said. "But, unlike some other countries, the UK scheme doesn't prevent motorists part-exchanging an old, small model for a brand-new gas guzzler."

His comments were echoed by Dax Lovegrove, head of business and industry relations at WWF, who said the scheme should have been used as a tool to nudge manufacturers towards cleaner models. "Money off hybrids would be more useful than general scrappage scheme," he said.

However, industry body the Society of Motor Manufacturers and Traders defended the new scheme, arguing that since the introduction of mandatory air quality standards, new cars have faced ever-tighter limits on air quality emissions and as a result any incentive that encourages people to switch to new models will deliver environmental benefits.

"Pre-1999 vehicles will have a Euro 2 engine as standard compared with Euro 4 in new vehicles," it said in a statement. "These engines deliver more than a 50 per cent improvement for harmful emissions."