The way your car’s tax is calculated could soon change, as the Treasury has announced it is considering alternatives to Vehicle Excise Duty. VED in its current form was introduced in 2005, replacing road tax and banding cars based on their CO2 emissions, the idea being to incentivise the purchase of ‘greener’ cars.However, cars are becoming so fuel efficient (CO2 emissions are linked to fuel consumption) that the Government has started to panic about its VED revenue tanking.