Car buyers in the city who plug into the concept of alternative fuels will hear a little more money jingling in their pockets, in addition to the warm glow of being environmentally friendly.

From the beginning of next year until the end of 2011, people in Shanghai will be eligible for subsidies of up to 20 percent of the purchase price of a new-fuel vehicle if it saves at least 15 percent energy.

They may also be exempt from paying tolls.

The proposal, still in draft form, is part of the local government's efforts to promote green-energy vehicles in the run-up to the World Expo.

Wang Zhe, project manager from Shanghai Alternative-fuel Vehicles Promotion Office, said the policy, if approved, would undoubtedly boost the popularization of alternative-energy cars.

"China's central government has been actively promoting alternative-fuel vehicles to cut emissions, but that has been restricted to the public transportation sectors like buses, taxis and postal services," said Wang. "So local governments need to further extend the incentives to individual consumers."

China's Ministry of Finance and Ministry of Science and Technology jointly launched a nationwide program early this year to give public transportation companies and government agencies cash incentives for alternative-energy buses.

The fund covers 13 cities, including Beijing, Shanghai, Chongqing and Shenzhen. Fuel-cell buses will get the highest subsidies of 600,000 yuan under the plan.

Lan Zhibo, deputy director of New Energy Technology Center of Shanghai Automotive Industry Corporation, said the proposed subsidies in Shanghai would largely compensate for the price difference between a conventional car and a new one that runs on alternative fuel whose higher sticker price might otherwise scare off potential buyers.

But Lan remained skeptical about widespread public acceptance of new-energy vehicles before facilities like hydrogen-filling and electricity-charging stations are built.

"I think it may take another three or more years for the construction of such facilities to meet the needs of commercial operation," he said.

Shanghai has pledged to introduce 1,000 alternative-fuel vehicles for the upcoming World Expo.

Wang said the city will have built one electricity-charging station and a hydrogen-filling station by next February in preparation for the event.

Authorities also said earlier that it would offer consumers a cash incentive to scrap their old cars and buy new ones with higher emission standards.

Source: China Daily