Greece is to introduce car replacement scheme for the first time since the 1990s in a bid to take off the road vehicles that heavily pollute the environment but also to boost public coffers by almost 2 billion euros.

The scheme includes incentives for car owners to replace their old cars and lower road taxes for cars which produce lower emissions, according to Public Works and Environment Minister Giorgos Souflias.

Souflias also pledged to change the current restricted zone in central Athens so that it would exclude cars based on the amount of carbon dioxide they emit.

Car owners will be paid between 500 and 2,200 euros to turn in their vehicle so it can be scrapped.

The amount they will receive will depend on the size of the car’s engine, ranging from under 900 cubic centimeters to 2,400 cc or more.

Any of these drivers wishing to buy a more environmentally friendly car (deemed as one that has been registered from 2005 onward) will also be given an extra incentive of 1,000 euros.

Souflias said that if all the paperwork is ready in time, the measure could start as early as next month.

The minister also said that, as of next year, road tax for low-emission vehicles would be reduced but also would be increased for cars that pollute more.

Cars will be divided into four categories.

  • A for cars registered in 2005 or later;
  • B for those registered between 2000 and 2004;
  • C for those registered between 1996 and 1999; and,
  • D for those registered before 1995.

Owners of vehicles in category A will pay 18 euros less per year in road tax, while category B will pay 50 euros more. Categories C and D will pay 100 and 150 euros more respectively.

The combination of the car replacement scheme and the new road tax charges is expected to earn the government 1.7 billion euros.

Souflias said that he hopes to introduce the “green inner ring” in Athens in September 2011 to keep any cars that emit more than 140 grams of carbon per kilometre out of the city center during peak hours.