My colleague, the Minister for Finance has responsibility for the Accelerated Capital Allowance (ACA) Scheme for Gas Vehicles and Refuelling Equipment. I understand that the Minister for Finance will review the scheme in 2024.
The scheme, which was introduced in the Finance Act 2018, provides for a 100% up-front wear and tear allowance for qualifying expenditure incurred in a given year. The Finance Act 2021 extended the scheme to 31 December 2024 and amended it to provide that hydrogen powered vehicles and refuelling equipment qualify under the scheme.
The scheme incentivises the use of natural gas, biogas, or renewable gas of non-biological origin such as green hydrogen in large vehicles such as HGVs and buses, supporting low- and zero-carbon emission alternative technology to diesel or petrol, toward achievement of 50% reduction in carbon emissions in transport by 2030.
As Minister for Transport, I have responsibility for complementary grant support provision through the alternative fuel heavy goods vehicle (AFHDV) grant, including grants awarded for the purchase gas powered vehicles.
Hydrotreated Vegetable Oil (HVO) is a bioliquid, which when used in transport is referred to as a biofuel, therefore does not qualify under the ACA scheme. It is understood that HVO can be used with no issues in conventional diesel vehicles and fuel distribution infrastructure blended with diesel or at 100% HVO.
