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The new car fuel economy label, which helps car buyers easily assess the impact on climate change of different cars, was launched by the then Secretary of State for Transport, Alistair Darling at the Low Carbon Vehicle Partnership annual conference on 10 February 2005 at the Heritage Motor Centre at Gaydon in Warwickshire. The conference was held alongside the Centre's launch of the 'Green by Design' exhibition of environmental road transport. The label was introduced years ahead of likely EU legislation following an industry-wide agreement brokered by the LowCVP and clearly shows that lower emissions equates to lower road tax and lower running costs. The roll-out of the label to UK-wide dealerships began in July of 2005.
In the March 2005 Budget, the Chancellor announced that the annual road tax (VED) bandings were to be realigned in order that they are consistent with the new car environment label launched by LowCVP in February. The VED bandings were renamed A to F, rather than the previous AAA to D, while retaining the current carbon dioxide emissions levels. In the 2006 Budget an additional VED band "G" was added and the label amended accordingly.
In the 2008 Budget the Chancellor announced the introduction of 6 new VED bands: the A-to-G banding will be replaced by A-to-M. The highest new CO2 band - M -is for vehicles exceeding 255g/km CO2. The previous highest band - G - was for cars over 226 g/km. Discussion are currently underway between government, LowCVP, the SMMT, the RMIF and the VCA on how to suitable adapt the label to fit the new revised bands.
A used car label was rolled out to dealerships in early August 2009. The label provides consumers with clear ‘at a glance’ information on the running costs, fuel consumption and environmental performance of used cars available from participating dealers. The used car label is a voluntary initiative for dealers, developed by the Low Carbon Vehicle Partnership with support from the Retail Motor Industry Federation, the Society of Motor Manufacturers and Traders and the Government. As at early November 2009, over 2,000 dealers have signed-up to participate in the scheme.