In an attempt to improve air quality in the Capital, an Ultra Low Emission Zone (ULEZ) will be introduced in central London from 8 April 2019. To avoid paying an additional daily charge for travel within the current Congestion Charging Zone (CCZ), most vehicles including cars and vans will have to meet tighter exhaust emission standards.
Operating 24 hours a day, 7 days a week, the ULEZ will replace the current T-Charge where older cars and light commercial vehicles need to meet as a minimum, Euro 4/IV compliancy for petrol and Euro 6 for diesel. Any motorised tricycles and quadricycles need to meet a minimum of Euro 3 or pay an extra daily charge in addition to the Congestion Charge. The T-Charge, officially known as the Emissions Surcharge, operates in the CCZ.
From 25 October 2021 the ULEZ will expand to cover the inner London area bounded by the North and South Circular roads.
Managed via Automated Number Plate Recognition (ANPR), in the same way as the CCZ, the ULEZ will target non-compliant cars, light commercial vehicles and motorbikes at a cost of £12.50 per day and non-compliant buses, coaches and HGVs at £100 per day. Minimum requirements for vehicles include:
- Euro 3 for motorcycles, mopeds, motorised tricycles and quadricycles (L category)
- Euro 4 for petrol cars, vans, minibuses and other specialist vehicles
- Euro 6 for diesel cars, vans and minibuses and other specialist vehicles
- Euro VI for trucks, buses and coaches and other specialist heavy vehicles
The Business Challenge
Covering an area 18 times larger than the CCZ, an estimated 100,000 cars, 35,000 vans and 3,000 trucks will be affected by the expanded ULEZ. Here we look at some of the likely implications for businesses operating in the Capital.
For a business operating within the CCZ there is just eight months to become ULEZ compliant and for the expanded area, just three years. To avoid a daily combined ULEZ/CCZ charge of £24 for cars and light commercials, many businesses will need to invest in compliant vehicles.
The real losers look likely to be small businesses operating used diesel vans who may have invested in Euro 5 diesel vehicles recently. In order to comply with the ULEZ scheme, Euro 5 vehicles require de-fleeting in preference for Euro 6 technology and all at a time when the complexities and uncertainty of Brexit are putting great strain on the UK economy.
An estimated 1 million vans operating on UK roads are Euro 3 or older. These vans would benefit greatly from a government sponsored diesel scrappage scheme. However, currently there is no help or dispensation being offered.
Dispensations and Transport for London (TfL)
To avoid paying the ULEZ charge, dispensations are available for owners of the following vehicles.
- October 2023: charities to replace existing minibuses
- October 2025: disabled tax class vehicles
- October 2025: specially adapted private hire vehicles
TfL is no longer procuring pure-diesel powered buses, instead purchasing hybrid, electric or hydrogen powered buses to meet the new London standards by 2020. Likewise, from 2020, only zero-emission capable taxis and newly manufactured private hire vehicles will be allowed to operate in London.
Clean Air Zones (CAZ)
In addition to London, the Phase 1 roll out of additional CAZ due in 2020 includes 8 further cities and regional transport authorities. Phase two includes an additional 23 towns, cities and local authorities, with another 31 authorities around the UK required to take action in the future.
It is an interesting time to be involved in the automotive market. New technology such as Petrol Particulate Filters (PPF), NOx Traps and Selective Catalytic Reduction (SCR) continue to reduce emissions from vehicles, whilst batteries continue to improve the ranges of Electric Vehicles (EV). Today, it is not just about understanding the new technology, it is also about understanding where there is a home for the old technology. This is where Glass’s Information Services can help. Glass’s granular data can help identify and specify vehicles, price or trade used vehicles and estimate and manage repairs and process claims.
Andy Picton, Chief Commercial Vehicle Editor at Glass’s Information Services said, “To ensure Glass’s data remains accurate we are closely monitoring the ULEZ and CAZ situation in terms of residual values and monthly valuations. As more CAZ are created, we know that there will be fewer areas where significant demand for non-Euro 6 compliant diesel vehicles remains. Therefore, an impact on values is possible.” There are two choices for businesses, some will swallow the charge, whilst others will choose to buy a compliant vehicle. Either way, it is likely the increased costs will be passed on to customers in higher bills for the services they receive.