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A combination of government policy and manufacturer developments has led to great progress in reducing the environmental impact of drivers.
Over the past few years the full range of vehicle taxes have become linked to the environment, and with more efficient cars available, people are selecting lower emitting vehicles with better economy.
However, now the Government has a problem - greener driving is also cheaper driving, which is leaving a shortfall in revenues.
According to the Institute for Fiscal Studies (IFS), more efficient driving could create a £13 billion shortfall in motoring taxes by the end of next decade.
So what does this mean? While the government supports the principle of a reduction in our environmental impact, it cannot afford to take such a financial hit, so it will need to make this deficit back somehow.
Motoring taxes make up around 7% of all Treasury income so it is likely that we will see the tax system evolve. The Government has already said that it wants to "ensure all motorists continue to make a fair contribution to the sustainability of the public finances".
One approach would be to tweak the existing tax system and an option currently on the table is to replace Vehicle Excise Duty with a one-off up-front charge on new vehicles when they are sold.
However, potentially more likely is a complete overhaul of the structure of motoring taxes. This could come in the form of road charging through measures such as tolls and congestion zones.
The challenge for the Government is that drivers have responded very positively to a fiscal regime aimed at improving environmental performance.
Any change to the overall regime needs to be handled very carefully, as a poorly thought through policy may send out a difficult message for the future, and potentially weaken the credibility of the environmental message.
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