Van operators expected to be ‘worst affected’ by new London ULEZ and future urban CAZs

Many businesses are expected to face an increase in van operating costs with the introduction of London’s Ultra Low Emission Zone (ULEZ) on Monday (April 8) and Clean Air Zone (CAZ) charging being introduced in towns and cities nationwide potentially from January 2020 in Birmingham and Leeds.

The claim comes as vehicle remarketing giant Manheim estimates that 80% of light commercial vehicles currently on UK roads pre-date the September 2016 introduction of Euro 6 – the free entry standard adopted for vans to the ULEZ and CAZs – and will therefore face penalty charges each time they enter a charging zone.

While there is widespread agreement that most company cars will be compliant with ULEZ emission standards that will operate 24/7, seven days a week and future CAZ standards – Euro 4 for petrol cars, vans, minibuses and other specialist vehicles and Euro 6 for diesel cars, vans and minibuses and other specialist vehicles – there is concern that many van fleets require upgrading.

The average first owner life cycle for a new van is five years. That means, with the Society of Motor Manufacturers and Traders estimating that there are 4.3 million vans on UK roads and around 360,000 new models registered annually, it will still take some years before the majority of vans will be Euro 6 compliant.

Manheim in a report, ‘Clean Air Zones and the UK Van Operator: What You Need to Know’, says fleet operating pre-Euro 6 emission vans should analyse their options and weigh up the costs:

  • Do nothing and pay the daily entry charge
  • Buy new or used Euro 6 vans – or consider adding electric vans to the fleet
  • If a van is used infrequently, consider selling it and hiring a van as needed

Furthermore, fleet managers’ trade organisation ACFO has suggested that where possible non-Euro 6 compliant vans were reassigned so they operated on routes outside the ULEZ and future CAZs if they did not meet the qualification criteria.

London’s ULEZ replaces the existing T-Charge, officially known as the Emissions Surcharge, which was introduced on October 23, 2017 and applies to pre-Euro 4 emission standard petrol and diesel vehicles. The area covered by the ULEZ mirrors that of the 16-year-old London Congestion Charge zone, which was introduced in February 2003.

The daily charge for cars, vans and motorcycles that do not meet the ULEZ standard is £12.50 and for commercial vehicles above 3.5 tonnes, buses and coaches it is £100.

Transport for London, which operates the ULEZ, has expanded its Fleet Auto Pay system that applies to the Congestion Charge to include ULEZ payments, which can also be made online or by phone. Further information is available at https://tfl.gov.uk/modes/driving/ultra-low-emission-zone.

The registered keeper of a vehicle that does not meet the ULEZ standard and its operator/driver will, if they fail to pay the daily charge, be issued with a Penalty Charge Notice (PCN). The penalty is in addition to any Congestion Charge or London Low Emission Zone non-payment penalties received. The penalty charge for cars, vans and motorcycles is £160 (reduced to £80 if paid within 14 days) and for commercial vehicles above 3.5 tonnes, buses and coaches it is £1,000 (reduced to £500 if paid within 14 days).

It is also important for fleets to understand that if vehicles that do not meet the ULEZ entry criteria and enter the Zone and fail to pay the applicable charge, that not only will they face a fine but an administration charge from their leasing provider or fleet management company.

The ULEZ will be expanded from October 25, 2021 to the Inner London area bounded by the North and South Circular roads, although vehicles using those roads and not entering the ULEZ will not be charged.

Additionally, ultra-low emission vehicle streets have already been introduced by Islington and Hackney Councils and the London Borough of Hammersmith and Fulham is also planning to introduce low emissions streets in Hammersmith town centre. Meanwhile the City of London Corporation is proposing to limit access to the south section of Moor Lane, near Moorgate, to ultra-low emission vehicles in a pilot scheme expected to be introduced in October 2019 with other boroughs expected to adopt similar schemes.

Meanwhile, more than 60 local authorities have proposals for improving air quality at various stages of development – and some, but not all, include CAZs that some non-compliant vehicles will be charged to enter.

Birmingham and Leeds will introduce chargeable schemes from January 2020, while Glasgow implemented a CAZ at the beginning of 2019 initially applying to buses but being extended to all vehicle types by the end of 2022. Other Zones in Scotland will follow in Edinburgh, Aberdeen and Dundee, although details have yet to be announced.

However, while local authorities are adopting the same vehicle emission compliant standards as London the rules do not apply to all types of vehicles. Therefore, fleet operators are advised to check with their local authority – and any authorities that vehicles travel into – if they are planning to introduce a CAZ and the applicable rules.

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