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Following is a question by the Hon Miriam Lau and a reply by the Secretary for the Environment, Mr Edward Yau, in the Legislative Council today (October 21):
Question:
Since April 2007, the Government has launched a grant scheme costing about $3.2 billion to encourage owners of pre-Euro and Euro I diesel commercial vehicles to replace their old vehicles with Euro IV vehicles, which are more environment-friendly. The scheme will expire by the end of March next year. In this connection, will the Government inform this Council:
(a) of the number and percentage of diesel commercial vehicles which have been replaced under such scheme so far, as well as the total amount of grants involved;
(b) whether it has studied the causes for the consistently low number of applications under the grant scheme; apart from the technical problems with Euro IV vehicles as reflected by the trade, whether there are other causes; how the Government will solve these problems so as to assist the trade in making applications before the expiry of the grant scheme as far as possible; and
(c) whether it will consider the following measures, which include extending the deadline for applications of the grant scheme and raising the amount of grant, providing other support, relaxing the requirements of the grant scheme to cover younger vehicles, as well as converting the remaining funds after the expiry of the grant scheme to interest-free or low-interest loans to continue to assist the trade in replacing their vehicles with more environment-friendly ones, so as to maximize the effectiveness of the grant scheme?
Reply:
President,
(a) Since the launch of the incentive scheme for encouraging the replacement of Pre-Euro and Euro I diesel commercial vehicles by Euro IV vehicles (the Scheme) on April 1, 2007, the Government has approved 12,590 applications for grant (involving 8,697 pre-Euro and 3,893 Euro I diesel commercial vehicles) as at end-September this year. These represent about 21% of vehicles eligible for the grant on the launch of the Scheme, involving a sum of approximately $542 million.
(b) The Government earnestly hopes that owners of Pre-Euro and Euro I diesel commercial vehicles will make the best use of the Scheme to replace their vehicles and improve the roadside air quality the earliest. Participation in the Scheme, however, is entirely voluntary. Whether vehicle owners will use the grant to replace their old diesel commercial vehicles depends on their financial status and outlook on business prospects. We hope these owners will make use of the Scheme to replace their vehicles with Euro IV ones before it expires (that is, by March 31, 2010) so that the roadside air quality will improve as early as possible. Although there were different views from members when our proposal to increase the licence fees of aged commercial vehicles was submitted to the Council last year, we will continue to explore different options to expedite the retirement of these vehicles.
As for the technical problems with Euro IV vehicles, we understand that the trade's major concerns are the substantial seepage of diesel into lubricating oil and the frequent regeneration of the diesel particulate filters (DPFs) on manual mode in some Euro IV diesel light buses or small buses. The light buses in question involve two vehicle manufacturers. When the above problems were brought to the notice of the Environmental Protection Department (EPD) in April 2008, it immediately followed up on the issue with relevant transport organisations and local sales agents of the vehicles. The relevant manufacturers have also sent their engineers to Hong Kong to understand the problems encountered by the trade and make improvements.
One of the major manufacturers has improved the engine control units (ECUs) in its light buses or small buses. According to its agent, so far no further complaint has been received from the trade. The newly ordered light buses or small buses are also supplied with the modified ECUs. We will closely contact with the trade to see if there is any room for improvement. Another manufacturer retrofitted in early April this year three light buses with new ECUs to minimise the seepage of diesel into lubricating oil and the frequent regeneration of the DPFs on manual mode due to the trapped particulates. The EPD will continue to keep close contact with the relevant transport organizations and vehicle manufacturers/agents to monitor the actual performance of retrofitted light buses and take follow-up actions as required. Should the modified engine control units be proved to be effective, vehicle manufacturers will install the ECUs in other in-use light buses free of charge.
(c) As for the proposal to extend the deadline for applications under the Scheme, when the Scheme expires in end-March 2010, the Government will have given owners of pre-Euro and Euro I diesel commercial vehicles 36 months to participate in the Scheme. As you know that the scheme for pre-Euro vehicles has already been extended for one and half years. We consider that owners have been given sufficient time to decide if they will join the Scheme. As such, we do not intend to extend the deadline for the Scheme. As stated above, apart from the current incentive scheme, we will continue to explore different options to expedite the retirement of old diesel commercial vehicles.
Since the launch of the Scheme, 12,600 owners of aged diesel commercial vehicles have participated in the Scheme to replace their vehicles. Currently, the grant level ranges from 12% to 18% of the new vehicle taxable values. We believe that the amount of grant is appropriate. If the remainder of the funds is converted into interest-free and low-interest loans after the expiry of the Scheme, we consider that the loans could be less attractive than the current direct grants. In fact, the transport trade can, through the Small and Medium Enterprises Loan Guarantee Scheme and the Special Loan Guarantee Scheme, obtain loans from the participating lending institutions for the procurement of different business equipment, including commercial vehicles. We are therefore of the view that there is no need to set up another loan scheme.
In addition, we have proposed a series of measures in the consultation document of the Air Quality Objectives Review including the early retirement of aged or highly polluting vehicles, which include Euro II diesel commercial vehicles. We will take into account the views collected during the public consultation in deciding how to take forward the relevant proposed improvement measures.
Ends/Wednesday, October 21, 2009
Issued at HKT 16:57
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