The UK government has set aside £20m to support research into new environmentally friendly vehicles as part of the Low Carbon Transport Innovation Strategy (LCTIS).
The investment is aimed at companies researching low carbon vehicle development and demonstration projects, and is being made available by the Technology Strategy Board and the Department for Transport.
LCTIS was launched in May and sets out measures that the government is taking to transform the market for lower carbon vehicles.
"Through our investment in UK-based research and development we want to
accelerate the introduction of low carbon vehicles, ahead of what would be
achieved by market forces alone," said Science and Innovation Minister Ian
"This funding will help companies in the UK to benefit from the growing domestic and international demand for lower carbon vehicles."
Carbon emissions from road transport account for around 20 per cent of domestic emissions in the UK, and meeting EU carbon emission standards for new cars is one of the biggest challenges facing the UK automotive industry.
Significant innovation and new technology development by industry will be required to deliver the lower carbon vehicles needed to meet these challenges and to respond to the demands of public and private sector use.
"Getting new low carbon vehicle technology from lab to road is vital if we are to reduce the environmental impact of everyday travel," said Transport Minister Jim Fitzpatrick.
"This fund represents an excellent opportunity for UK expertise to help shape a low carbon future for transport, and I urge companies to grasp it with both hands.
"Business involvement and innovative research will bring us closer to a greener future when lower carbon buses, cars, lorries and taxis are commonplace on our roads."
The funding will be available to support vehicle technologies with the clear potential to be commercially viable within five to seven years.
Projects relevant to passenger cars, light commercial vehicles, heavy goods vehicles, buses and taxis are all eligible for support.
The funding will bankroll collaborative research and development carried out in the UK only.
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