Fifty new low-carbon vehicles will join the Scottish bus fleet following the award of a £4.4 million grant to six bus operators.
Stagecoach, Lothian Buses, MacEwans Coach Services, First Glasgow and Colchri will benefit from the Scottish Green Bus Fund which will help meet the higher costs of building low carbon buses.
Falkirk-based Alexander Dennis will build 46 of the vehicles for all but one of the operators in an order worth 12m and will receive 4m of the subsidy. Optare Group will build four vehicles for MacEwans.
Some of the operators will provide dedicated routes for the new green buses which are expected to deliver an average reduction in CO2 of around 21 tonnes per year and 300 tonnes over their life-cycle.
Transport minister Stewart Stevenson said: "This investment will offer a greater opportunity for the purchase of low-carbon vehicles and stimulate demand for green technology, moves we must make to meet Scotland's tough targets to tackle climate change, and decarbonise almost all road transport by 2050.
"The Scottish Green Bus Fund will play an important role in achieving our ambitious target of reducing emissions by 42 per cent by 2020 whilst also supporting jobs in the bus manufacturing industry."
Applications for the fund, which opened in July and closed in October, were so high that the scheme was oversubscribed. The initial 3.4m fund, launched on 5 July, was boosted by an additional 1m. It helps in the purchase of low-carbon vehicles by funding up to 100 per cent of the price difference between a LCV and its diesel equivalent.
Colin Robertson, chief executive of Alexander Dennis, expressed his delight at receiving support from the fund. "The 100th Alexander Dennis hybrid-electric will go into service this week and we have a further 200 in our production programme for 2011," he said. "It is terrific news to see east, west, central Scotland and our capital city join the drive towards greener, cleaner transport solutions."
He confirmed that the company already had its sights set on low-carbon markets overseas, having been in Madrid last week to launch a vehicle specifically designed for mainland Europe. Another purpose-built hybrid will be introduced in Sydney, Australia in March.
"Funds such as the Scottish green bus initiative play an important part in enabling countries to achieve their ambitious carbon reduction programmes.
"In Scotland's case, they also play a critical role in supporting vital research and development projects - and jobs in the manufacturing sector.
"It is seldom that UK manufacturing concerns steal a march on the automotive giants of the world.That is exactly what we have done and working with our technology partners at BAE Systems it is now important that we stay ahead of the pack. To do that we need all the support we can muster from government and transport authorities."