Scrappage program
A scrappage program is a government budget program to promote the replacement of old vehicles with modern vehicles. Scrappage programs generally have the dual aim of stimulating the automobile industry and removing inefficient, high emissions vehicles from the road. Many European countries have introduced large-scale scrappage programs as an economic stimulus to increase market request in the industrial sector during the global recession that began in 2008.
Scrappage programs were touted with different names, mostly referring to an environmental benefit. The Vehicle Efficiency Incentive in Canada was based on fuel-efficiency of cars. In Germany the economic stimulus program was called “Umweltprämie” (environmental premium) and in Austria “Ökoprämie” (eco-premium) while most of the public referred to it simply as “Abwrackprämie” (scrappage premium). Other countries have not attempted to connect the program title with an environment aspect – still the Italian “Incentivi alla rottamazione” (scrappage incentives) and French “Prime à la casse” (scrappage premium) require the fresh car to meet modern emission standards. The German scrappage incentive scheme and the British scrappage scheme do not have such requirements, and the UK scheme was openly sketched on the target to provide financial support to the motor industry. Similarly, the United States Congress devised a scrappage scheme, commonly referred to as “cash for clunkers,” as part of a general Automotive Stimulus package series; however, the voucher is only given when the newer car has a better fuel efficiency than the old car.
In the 1990s, many countries had introduced tax rebate programs for fresh cars that meet a modern emission standard, but, with the Kyoto Protocol, some countries made the public suggest dependent on the scrappage of old cars.
Other programs with the same objective of stimulating industry and enhancing efficiency include the Cash for Caulkers plan to promote substituting old refrigerators, air conditioners, etc. with newer, more efficient appliances.
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Austria Edit
The scrappage scheme in Austria was introduced on April 1, 2009, and it permits customers for €1,500 cash if the car was older than thirteen years and the fresh car would meet the Euro-4 emission criteria. There is a limit of 30,000 cars up to December 2009.
Canada Edit
The Retire Your Rail program, administered by the Government of Canada, permits residents of Canada to trade in a vehicle made in one thousand nine hundred ninety five or earlier for a broad range of prizes, such as a public transit pass or C$300. [1]
China Edit
In June two thousand nine a nationwide scrappage program was implemented suggesting rebates of $450 to $900 for trading in old strong polluting cars and trucks for fresh ones, the program runs until May 31, 2010. [Two] [Three] The program is expected to substitute Two.7 million high polluters from the national car fleet. [Two]
Eligible vehicles include used minivans, petite and mid-size trucks and other mid-size passenger cars that no longer meet the government emissions standards. In addition, the Shanghailocal government is suggesting similar incentives of $450 to $1,100 per vehicle to its residents who trade in older vehicles, permitting the total subsidy to be as much as $Two,000. [Trio]
After meeting with little success in the very first few months, the government raised the compensation to Five,000-18,000 Yuan, or about 732-2,632 US dollars, for each qualified vehicle at the end of 2009. In June 2010, it was announced that the program would be extended until the end of 2010. [Four]
France Edit
The scrappage scheme of France was introduced on January Nineteen, two thousand nine – the old car would need to be older than ten years and the fresh car would have needed to meet a particular CO2 emission standard – it began with €1000 for a car with less than one hundred sixty g/km. This was added up for even better emission standards (€5000 for cars with less than sixty g/km – effectively one electrical vehicles) and a “super-bonus” for the scrappage of the old car.
French car manufacturers are availing of this scheme for fresh car purchases in Ireland as well, so Irish customers that purchase fresh French cars can avail of a grant from both the French Government and the Irish Government.
Germany Edit
The scrappage scheme of Germany has been the largest so far. Every proprietor of a car being older than nine years was entitled for a scrappage premium of €2,500 ($Three,320) when buying a fresh car. When introduced on thirteen January 2009, the program was limited to at most 600,000 cars and a budget of €1.5b. However the car market boomed with an unexpected increase of 40% (March two thousand nine compared to March 2008) [Five] in sales making the program too brief running to suggest more than a brief termed stimulus – estimates displayed that the program fund would be used up by May. On March 25, 2009, the government determined to proceed the scrappage scheme at least until the end of year. A German think tank estimated that the net influence of the program on the German budget will be €2.5b ($Three.5b). [6]
The influence on automakers has been varied. Ford has benefited from high sales of the Ka, Fiesta, and Fusion—together up 56% in April two thousand nine from a year before. However, luxury automakers like BMW, Mercedes-Benz, and Porsche have had little benefit from the program and may have customers who have opted for cheaper, smaller cars. [7]
German authorities discovered an illegal scheme through which an estimated 50,000 scrapped vehicles have been exported to Africa and Eastern Europe. [8] In contrast with the U.S. Cash for Clunkers Program which requires dealers to ruin old engines by draining the motor oil and injecting instead sodium silicate, the German program only required the scrapped vehicles to be sent to junkyards, thus permitting the illegal exports. [8]
Italy Edit
In Italy there was scrappage scheme from January 1, 2007, to December 31, 2008, that permitted for €700 plus a tax rebate. A fresh scrappage scheme is in place in 2009. Fresh cars must conform at minimum with Euro four + emit a maximum of one hundred thirty g/km (diesel) or one hundred forty g/km (other fuels) of CO2. Scrapping incentive for cars is €1,500 but can be combined with purchase incentive of €1,500 for a fresh car running on CNG, electric current or hydrogen (enhanced to €3,000 if it emits exactly one hundred twenty g/km and to €3,500 if it emits less than one hundred twenty g/km) The purchase incentive for fresh car running on LPG is €1,500, enhanced to €2,000 if the car emits less than one hundred twenty g/km. This can also be combined with the scrapping incentive. Scrappage program ended in December two thousand nine with delivery of vehicle by March 2010. [9]
Ireland Edit
Ireland have introduced the scrappage scheme for a 2nd time on December Ten, two thousand nine which offers €1,500 for cars ten years or older. The discount is on the Vehicle Registration Tax and can only be used on cars that have emissions that do not exceed 140g/km. In two thousand ten the scheme value was diminished to €1,250 per scrapped car and the end date for the scheme was set for thirty June 2011. [Ten] The very first scheme ran in the early 1990s.
Japan Edit
Japan introduced a program from April 1, two thousand nine until March 31, two thousand ten (or until the budget is weakened), suggesting up to 250,000 yen (
US$Two,500) to trade in vehicles thirteen years old or more for fresh environmentally friendly fuel-efficient cars, according to environmental spectacle criteria established by the government. [11] The purchasing rebate is 125,000 yen (
US$1,250) if trading for a mini or kei car, which already get preferential tax treatment, built to specifications defined by law in Japan that place thresholds on size engine displacement and power. [11] [12] [13] The Japanese government also included a tax break on gasoline-electric hybrid vehicles and other low emission cars and trucks, allocating $Three.7 billion for the program. [11] [13]
Luxembourg Edit
In Luxembourg a scrappage scheme was introduced in January two thousand nine that permits for a premium if the old car was older than ten years and the fresh car to meet CO2 < one hundred fifty g/km (1,500 euros) or CO2 < one hundred twenty g/km (Two,500 euros).
The Netherlands Edit
The Dutch government provides a premium of €750 or €1,000 in association with the car industry. The city of Amsterdam provides an extra premium of inbetween €250 and €1,000. [14]
Norway Edit
In Norway a “Vehicle Scrap Deposit Tax” for all motor vehicles was introduced in 1978. When purchasing or registering a fresh vehicle, a standard €190 tax (as per 2010) is paid to the Norwegian Customs and Excise Authorities. This tax is refunded when scrapping the vehicle. [15]
Portugal Edit
Portugal has enlargened a scrappage scheme permitting €1,000 for a car being older than ten years and €1,500 for a car being older fifteen years if the car is being recycled and the fresh car has an emission standard of CO2 < one hundred forty g/km. In January 2010, Portuguese Government made law proposal to limit CO2 emissions of the fresh car to one hundred thirty g/km. This proposal will be voted in the beginning of March.
Romania Edit
In Romania a scrappage scheme was introduced in two thousand five and it permits customers a Three,800 lei (1 euro = Four.Two lei) discount if the car was older than ten years. There is no emission confinement of the fresh car to be bought. Since 2010, one person can scrap up to three cars and/or use the same amount of vouchers in exchange for a fresh one. In 2014, the value of the voucher was raised to 6,500 lei and the age of the car diminished to eight years.