Italy supports electric, gas, vehicle sales

By 2003, half of cars, light vans, purchased by state bodies to run on natural gas or electricity

A growing percentage of the new cars and light vans bought by Italy's public institutions will be fuelled by gas or electricity, after a new decree establishing quotas and earmarking funds for the phasing in of "low-environmental-impact" cars was passed by the Italian cabinet on Tuesday.

Italy's fleet of "service" vehicles is larger by European standards. About 500,000 cars are used by officers of public utilities, ministries, regional councils and municipalities all over the country, with an annual turnover of 7-10%, or up to 50,000 new cars purchased each year.

Under the decree, five out of every hundred new cars bought in 1998 will have to be fuelled by either natural gas or electricity. This percentage rises to 10% for 1999, 20% for 2000, 30% for 2001, 40% for 2002, and 50% for 2003. This means that the new law will bring as many as 60,000 electric cars into circulation in Italy over the next five years.

The government has earmarked IL200bn (Ecu0.1bn) to finance the project for the first three years. This is the estimated extra cost to public institutions of buying electric or gas rather than petrol-fuelled cars. The purchase of an electric car will attract a bonus payment of approximately IL4m; the subsidy for gas-fuelled cars is to be about half that.

Italy's environment minister Edo Ronchi described the new law as an important step forward to "encourage a niche of the market that is very promising for the future but still unable to make its own way," national newspaper La Repubblica reported.

In a parallel initiative, IL70bn has been earmarked for the purchase of electric buses, to be used especially in the city centres where pollution is particularly high. "We want to free cities from the stranglehold of pollution," Mr Ronchi said. Other measures aimed at easing traffic in city centres, like the establishment of car pools and the increase of collective taxis, are to be issued soon, as a part of Italy's commitment to cut greenhouse gas emissions under the Kyoto agreement.

Italy's move reflects growing official interest in non-petrol or diesel fuelled vehicles. According to observers in Italy, the new law is a clear step towards helping the home car industry face a growing threat from Japanese manufacturers, already very active in this still marginal but very promising market.

Follow Up:
Italian prime minister's office, tel: +39 6 67791; Italian environment ministry, tel: +39 6 70361.

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