News | Sunday, 18 January 2009

Engine capacity and circulation tax

Marco Cremona appears to have reached some startling conclusions in his piece “New car registration is no eco-tax” (MaltaToday, 11 January).
The Ministry website has two sets of tables in connection with the new rules: one deals with the Registration Tax for new vehicles; the other one outlines what is now called Annual Circulation Tax—the old annual car license. Cremona uses “registration” in the title and “circulation tax” in the first sentence; but thereafter the writing seems to concentrate on circulation tax.
That confusing start apart, there is no mention of “smoke” or “toxic” emissions in the ministry tables. There is only mention of levels of particulate (PM) emissions, which are given weight in both registration and circulation tax tables. It does make sense to penalise diesels, as most have very damaging particulate emissions and there is as yet no effective filter in widespread use. In fact, the “clean” Euro V diesels are exempted from the particulate penalties.
For new (post January 1 2009) cars, circulation tax calculations present no problems as one can take the makers’ value for CO2 and PM emissions. For used cars, Cremona asserts that the method used to calculate emissions has a fundamental flaw; and goes on to “prove” this by plotting two graphs. The first shows – not “interestingly” but absolutely inevitably – that CO2 emissions are directly proportional to fuel consumption. But the second – CO2 emissions against engine capacity –is said to go “haywire”. In fact it does nothing of the sort; it simply demonstrates that in this case the two parameters – CO2 emissions and engine capacity – are not as strictly tied together as the first pair; one would expect this as engines with the same capacity do differ in efficiency and so in fuel consumption. Yet it is surely the case that the larger the engine the more fuel it is likely to use per km. So as can be seen from Cremona’s second graph, in default of better information, engine capacity can be used as an indicator of CO2 emissions.
No government I’ve heard of has a circulation tax based on the actual running time of a car. That is no surprise given the difficulty of working such a system. So talk of “unfairness” in this respect is meaningless. Two persons with the same type of car but a different intensity of use simply use different amounts of heavily taxed fuel.
One valid point that Cremona makes is that the engine capacity limit for lowering car registration costs is too high at 2499cc. That owes more to existing popular SUV and 4 x 4 models than to any ecological considerations.

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