It will investigate vehicle and fuel technologies with a view to reducing the CO2 imprint of cars over the next 25 years.
The study, mentioned in the 2007 Budget, will be called the 'King Review', with Professor Julia King (former Director of Advanced Engineering at Rolls Royce plc) leading the study, and working with Sir Nicholas Stern, author of the recent Stern Review.
According to the HM Treasury website, the review will consider the existing evidence on technologies which reduce the carbon emissions from vehicles and examine how, over a 25 year time frame, the so-called 'decarbonisation' of cars may be most cost-effectively delivered.
The review will apparently take account of UK capabilities in research and development and design and pay particular attention to the competitiveness of UK manufacturing sector, whilst considering how best to influence the global adoption of lower carbon technologies.
The Government also says it will involve discussion with a range of stakeholders, including the car industry, fuel suppliers, public and private vehicle fleet operators and academic experts.
Although it seems unlikely this review will have any impact on cars driven in the short term - not least because none of the volume car manufacturing operations in the UK are British-owned anymore, which presumably must limit the influence that this review can have on foreign-owned marques - it may lead to a more effective framework of incentives encouraging UK driver into lower-carbon cars.
Indeed, the Government says that it anticipates using this review to 'refresh and refine' its transport strategy.