New drive for greener cars

For every new car financed through its
Green Vehicle Finance initiative, Absa
Bank will plant a tree.
(Image: MediaClubSouthAfrica.com. For
more free pictures, visit the image library)

MEDIA CONTACTS
• Chris Nthite
Absa Group Communications
+27 11 846 8448 or +27 82 377 7480
• Joanne Lee Rolt
Trees for Africa
+27 11 656 9802/2

RELATED ARTICLES

• Nedbank goes carbon neutral
• Adopt a tree in Africa
• New wine label protects trees
• SA banks overtake global giants
• SA’s auto industry to turn green

Emily van Rijswijck

South African retail bank Absa has come up with an innovative way for buyers of new vehicles to save money while contributing toward a greener planet.

Through the new Green Vehicle Finance initiative, Absa clients buying a car with a carbon dioxide (CO²) output of 120 grams per kilometre or less can save on their monthly instalments, and Absa will plant a tree on behalf of the customer at the same time.

The benchmark of 120g/km of CO² is used universally by car manufacturers. Carbon dioxide is the greenhouse gas primarily responsible for global warming.

Ajith Bridgraj, head of Absa Group Media, said Absa clients buying cars with a CO² output of less than 100g/km will qualify for a 0.75% rebate and cars with 120g/km will get a 0.25% rebate on their new vehicle instalments.

“Customers who opt for more eco-friendly cars will realise monthly and annual savings on their instalments, compared to those without the benefit if the car is paid over the same term.”

In the South African market, vehicles available in the 120g/km range include the Audi A1 and A3 series, some cars in the Citroen C1 and C3 series, some in the Honda range, the Volvo S40 and the Toyota Aygo, to name a few.

Vehicles in the 100 g/km category are limited to the Toyota Prius, the Lexus CT, VW Polo 1.2 and VW Golf 6.

Sydney Soundy, of Absa Vehicle and Asset Finance, said the Green Vehicle Finance solution forms part of the bank’s commitment towards a greener society and, more specifically, to the national agenda of reducing carbon emissions.

“We believe that through this offering, we can enable our customers to make a more environment-conscious choice of vehicle.”

One car, one tree

Adding more impetus to the initiative, Absa will work hand in hand with Food & Trees for Africa and plant a tree on behalf of the customer for each vehicle sold, confirmed Travis Spencer-Coye, portfolio manager at Absa.

The bank kicked off the new green initiative with the planting of 150 trees at the Glen Ridge community in Soweto on 24 August.

Founded in 1990, Food and Trees for Africa is a non-profit organisation that works to green unhealthy and degraded landscapes through the planting of trees and food gardens. An important part of the initiative is to encourage the community to become more aware of environment-related issues, and to use their natural resources sustainably.

The organisation has planted over 4-million trees since it started more than 20 years ago.

Cutting down on carbon emissions

The amount of carbon dioxide emitted by a car is directly proportional to the amount of fuel it consumes. A car with good fuel economy, therefore, is a car with a good green footprint.

The most direct method of calculating a vehicle’s CO² emissions is to multiply litres of petrol used by 2.30 to give the amount of CO² in kilograms. For diesel vehicles the multiplication factor is 2.63.

Since 1 September 2010, South African consumers have been paying emissions tax on new vehicles purchased – this is when the CO² Vehicle Emissions Tax came into effect. New passenger cars are taxed in accordance with their certified CO² emissions. Any new passenger vehicle with a CO² rating of more than 120 g/km will pay a tax of R75 (US$10) for every g/km over that value.

This means that buyers of new vehicles above the approved CO² threshold can pay from R750 ($102) to as much as R10 000 ($1 356) extra, depending on the emissions rating.

In March 2011 the National Treasury introduced a similar tax on light commercial vehicles, which includes gas-guzzlers such as double cabs. The CO² threshold for these vehicles has been set at 175g/km at a tax rate of R100 ($13) for every g/km above this target.

In so doing the Treasury hopes to encourage South Africans to switch to more fuel efficient vehicles.

Addressing climate change a priority

The automotive sector is responsible for approximately 15% of the total CO² emissions emitted in South Africa. Power plants around the world, which generate electricity by burning coal, are the biggest culprits of greenhouse gas emissions.

According to the International Energy Agency the power sector is responsible for 37% of all man-made CO² emissions globally. This creates about 23-billion tons of CO² emissions per year – in excess of 700 tons a second.

The South African government regards climate change as one of the greatest threats to sustainable development. The country is a signatory to the Kyoto Protocol, by which industrialised countries have committed themselves to reduce greenhouse gases by 5.2% by 2012.

South Africa’s National Energy Efficiency Strategy has set its own target of 12% for improved energy efficiency by 2015.

In November and December this year, South Africa will host the 17th session of the United Nations Framework Convention on Climate Change (COP17) in Durban.

List of qualifying models: