Jonathan Nash, managing director of Saab GB, has criticized the Government’s lack of support for the emerging bioethanol industry.

Nash said: "So far, the UK Government has done little to encourage the public into driving cars that can run on eco-friendly fuel sources such as bioethanol E85."

There is currently a £10 reduction in vehicle excise duty and a 20 pence per litre tax rebate on biofuels. However, Nash believes this is not enough to stimulate biofuels as a new market.

"Upon publication of the Stern Review last week, the British Government claimed to be leading the global debate on climate change. Well I don’t see much evidence of that. What I see is the Swedish Government taking progressive measures, such as major tax relief at the pump and for company car drivers, and free parking in Swedish cities to encourage drivers into environmentally-friendly cars.

“I see the French Government making positive steps towards encouraging the use of flex-fuel cars by considering proposals to tax bioethanol E85 at the lowest rate permitted by EU legislation and the introduction of incentives to encourage large companies to buy flex-fuel cars. I see the Irish government offering a 50% refund on vehicle registration tax for flex-fuel cars, equating to savings equivalent to £3,000.

"I see many other governments, both inside and out of Europe, taking far more radical steps than the UK to combat climate change. Those are the nations who are really leading this debate," said Nash.

His comments come as Saab launch the new 9-5 2.3t BioPower. The new model joins the 9-5 2.0t BioPower which was launched in March.

Last week, Nash was a co-signatory of a letter to the Chancellor of the Exchequer from a cross-industry group, consisting of the National Farmers’ Union (NFU), Saab GB (under parent company General Motors), Ford Motor Company and Morrisons supermarket. In this letter, the Chancellor was urged to introduce financial incentives to develop the UK biofuel industry in his 2007 budget.

These include:

Increase and prolong the fuel duty rebate applied to bioethanol E85

Discount company car tax for high blend biofuel cars

Revise vehicle excise duty to reflect more accurately substantial benefits of these cars

“The Swedish government has been extremely progressive and proactive in its policies, giving both private and company car drivers a reason to get in to alternative-fuelled cars, and incentivising fuel suppliers to provide the environmentally-friendly fuel.

"All of these policies form part of Sweden’s recently-stated aim of being completely fossil fuel free by 2020 – now that’s what I call leading the debate on climate change," adds Nash.

Jonathan Nash, Saab GB MD with a 9-5 BioPower