A proposal to encourage motorists to trade environmentally-inefficient older cars for cleaner, greener models by means of incentives has been supported by the European Commission.

The reasons behind the backing of the programme are not only to save a phenomenal amount of carbon emissions every year, but also to help carmakers who are experiencing a slump in sales and face making a potentially huge number of redundancies. 

Because of the present economic climate car sales in Western Europe are at a ten-year low. They are expected to fall further in the last quarter of 2008.

“The scrapping of older cars could produce carbon savings of 20 megatonnes a year or 4.5% of total car emissions,” said Christian Streiff, Peugeot Citroen chief and head of the car industry lobby group.

To help push the scheme forward the European Commission has even appealed to the European Investment Bank to offer loans of up to 40 billion euros to assist the car industry in the designing of green technologies.

In a recent meeting in Brussels between car industry chief executives, European commissioners and ministers, it was announced that the proposed scheme would have to be financed by national governments.

Although Gunter Verheugen, EU industry commissioner, gave the scheme his full backing, he said: “We can’t have cross-border tourism in this, with consumer’s crisscrossing Europe to find the highest premium to scrap their old car.”

The incentives the scheme would offer consumers would be representative of France’s “bonus/malus” programme, which cuts the costs of fuel-efficient cars and increases prices for less efficient gas-guzzlers. 

The EU programme is not unique and can be compared to the $U.S. 25 billion loan package administrated by the U.S. government to convert the plants of America’s three largest car manufacturers – Ford, GM and Chrysler – into using greener technologies.   

Gabrielle Pickard for RT