The tax reliefs in Sweden provide valuable tips on ways to reduce pollution on a national level, Doug McCoy, general manager of Saab Ireland, told the conference.

Sweden has introduced a range of eco transport initiatives which include a guaranteed zero duty rate on biofuels until 2013 and free parking policies on eco-friendly cars. In Stockholm alone there are a total of 92 biofuel pumps operating and "clean fuel" taxis operate throughout the city, he said.

"If Ireland is to contribute to the EU-wide goal of a 20% cut in EU CO2 emissions by 2020 we need to start taking green motoring seriously. The 50% VRT relief here should be extended to 100% relief.

"At the same time government should look at ways to remove motor tax on cars which contribute to lowering CO2 emissions and at significantly reducing car-insurance costs for their drivers."

He suggested that other incentives could include free city-centre parking for these car owners.

In November Saab Ireland launched its 9-5 BioPower car. It runs on renewable bio-ethanol which can reduce CO2 emissions by up to 80% compared with petrol.

The Saab Biopower gets a 50% VRT reduction of 6,232 and it can produce up to 20% more power than its petrol equivalent.