MP urges lower tax for ‘diesel substitute’ aqua methanol

A Conservative MP has called on the Chancellor to lower the fuel duty on “diesel substitute fuel” aqua methanol in the forthcoming Budget, adding that funding should also be redirected from “higher cost” initiatives such as hydrogen vehicles to support uptake of the fuel.

Cheryl Gillan MP is a supporter of aqua methanol as a road transport fuel

According to Chesham and Amersham MP Cheryl Gillan, greater use of aqua methanol fuel in road transport can play a “potentially vital role in reducing diesel exhaust pollution”, but current tax rates and EU rules meant that the fuel is currently only available at the “commercially impossible” price of £1.90 per litre.

After securing a Parliamentary debate on the issue last week (June 17), Mrs Gillan explained that commercial diesel vehicles can be converted to use aqua methanol instead, a fuel which emits “virtually no poisonous particulates or nitrogen oxides”.

And, she said, aqua methanol can be introduced at a fraction of the cost of other fuels, adding that the government should “redirect funds from some longer-term, higher-cost initiatives, such as hydrogen, just as the Department (for Transport) is already doing for compressed and liquid natural gas.”

The Chancellor is set to unveil his Budget on July 8 having now frozen fuel duty for five years running. Currently, the fuel duty rate for the likes of aqua methanol, petrol and diesel sits is £0.5795 per litre, compared to £0.3161 per kg for liquefied petroleum gas and £0.2470 per kg for road fuel natural gas.

But Mrs Gillan said that aqua methanol fuel had been proven and extensively researched, and therefore “deserves to be put on the same taxation footing as other natural gas-based transport fuels”.

And, while a new tax measure for aqua methanol has reportedly been drafted and approved by the Treasury, Mrs Gillan said that if it is enacted next month, the measure will need to be supported by work from the Department for Transport to promote the fuel.

She said:

“Given the severity of the pollution problem, continuing with the status quo is not an acceptable or justifiable option.”

Further explaining perceived benefits of the aqua methanol, Mrs Gillan said it could reduce carbon dioxide, UK exposure to oil prices and “most importantly in these continuing times of austerity and unlike nearly all other alternative fuels, would require only modest government financial support during its introductory phase even if oil prices stayed low”.

Aqua methanol

According to Mrs Gillan, a clean fuels company in her Chesham and Amersham constituency — Zero-M — calculated that in terms of particulate matter and nitrogen oxide reduction, converting one diesel van to aqua methanol would cost £5,000.

The firm estimated that this would be the equivalent to converting five cars to electricity, which costs the government ‘at least’ £25,000 in subsidies.

In addition, converting one heavy goods vehicle (HGV), at an estimated cost of £15,000, would deliver the same diesel emission reductions as converting 30 cars to electricity at a cost of more than £150,000.

Mrs Gillan commented during the debate: “When it comes to cutting street-level diesel pollution, aqua methanol has the ability to give us a significantly bigger bang for our tax pound than relying mainly on the introduction of electric vehicles–or indeed of hydrogen vehicles, which are likely to be even more expensive, with commercial viability even further into the future.”

Department for Transport

Responding to Mrs Gillan during the debate, however, Transport under-secretary Andrew Jones said that the “actual air quality benefits of aqua methanol are dependent on vehicle technology” and he refused to redirect funds from hydrogen initiatives. He also would not be drawn on whether the tax measure would be included in the Chancellor’s Budget.

Mr Jones said: “The fuel industry is complex, diverse and rapidly developing. Fuel production and supporting infrastructure are also at different levels of maturity. As policy makers, we must therefore give careful consideration to a range of possible solutions for tackling air quality, such as potential improvements in vehicle technology and fuels, and other sustainable travel policies and options.”

He added that “the issue of air quality is rising up the agenda and is certainly a priority for me” and that he recognised that aqua methanol “can play a role in tackling that problem”.