The Department for Transport (DfT) has denied it is looking to launch a diesel scrappage scheme in the UK to encourage customers to trade out of their older diesel vehicles.

Speculation on the launch of a new national scrappage scheme, the first since the transformative initiative in 2009, has been building after new mayor of London Sadiq Khan, said Transport for London has started work on the costs and challenges of implementing a diesel scrappage scheme “as part of plans for a wider national scheme delivered by Government”.

AM asked DfT is the Mayor of London’s office jumped the gun with his official statement about the scrappage scheme, pre-empting a potential new incentive programme in the backlash against diesel as a fuel and Volkswagen’s emissions scandal.

A DfT spokesperson told AM: “Our plans clearly set out how we will improve the UK’s air quality through a new programme of Clean Air Zones, which alongside national action and continued investment in clean technologies will create cleaner, healthier air for all.

“A national scrappage scheme cannot guarantee reductions emissions as effectively as other alternatives. This is because air quality issues are often localised and can be managed in other ways.”

The DfT said it has invested more than £2 billion in greener transport schemes since 2011, with £600 million over this parliament to support electric vehicle uptake.

The initial scrappage scheme, costing the Government £300m was introduced in 2009 to support the replacement of 300,000 vehicle sales.

The Government agreed to provide a £1,000 payment towards the purchase of a new car ordered from participating manufacturers after April 23, 2009. Manufacturers agreed to provide £1,000 off the list price for a total discount of £2,000.

Environmental groups were 'angered' at the time that the scrappage scheme was not limited to economical vehicles.

The Government currently supports the uptake of plug-in vehicles with its plug-in car grant and plug-in van grant. The grant covers 35% of the cost of a car, up to a maximum of either £2,500 or £4,500 depending on the model or 20% of the cost of a van, up to a maximum of £8,000.

A London-based diesel scrappage scheme could see dealers in the area gain access to additional funding to persuade customers to buy a new vehicle.

A spokesperson for the Mayor of London said: “We are very early into the administration and details are still being finalised. Over the coming weeks and months we will have more clarity.”