In April 2019, London launched the world’s first ultra low emission zone (ULEZ). But low emissions have a significance that is stretching beyond the capital. More local authorities across the UK are introducing clean air zones (CAZ).
This will have implications for the logistics industry, and for HGVs in particular. As CAZs and LEZs become an established part of daily life, businesses that run HGVs will require long-term strategies that help them avoid paying high charges and potential fines.
These strategies will involve either converting or upgrading vehicles and finding the best means to finance these changes.
Why Improving Air Quality is Important
The aim of introducing CAZs and LEZs is to reduce pollution and encourage people and businesses to use vehicles that are less polluting.
Road transport is one of the UK’s biggest sources of pollution. It accounts for 22% of the country’s total carbon dioxide (CO2) emissions. This is contributing to climate change.
Air quality is a major issue for health reasons too. Transport produces various air pollutants, such as nitrogen oxides, particles, hydrocarbons and carbon monoxide.
These can damage people’s health, and damage vegetation and the health of animals as well.
There has been a slow but continual improvement of air quality in the UK, but many areas are still failing to meet national air quality targets.
New technology is helping to cut the number of harmful emissions, but at the same time, the volume of traffic on Britain’s roads is increasing. With the prediction that traffic levels will continue to rise, road transport will remain a big contributor to air pollution.
Low Emissions Controls
From 8 April 2019, cars and vans in central London have had to pay an increased T-charge of £12.50 a day. To avoid paying this, diesel vehicles must meet the latest Euro 6 emissions standards.
Any lorries driving in central London that fail to meet new standards will face a £100 a day fee.
There are several cities and local authorities that are either introducing or considering introducing, clean air zones, including
How local authorities enforce these new regulations, and what they will charge, will vary from region to region.
But the signs are clear: change is coming, and it will affect HGVs.
What Low Emissions will Cost HGVs
As we’ve highlighted, for vehicles over 3.5 tonnes, the charges for entering London’s ULEZ are high, at £100 a day.
But even the £12.50 daily charges for other vehicles can soon increase on a business's balance sheet.
Any business that will be transporting goods with CAZ or LEZ areas must build the potential costs of charges into their calculations. But longer-term, there needs to be a clear solution for reducing the financial impact of low emissions charges.
To avoid financial penalties, freight operators must find ways to improve their HGV fleets, to make them more sustainable, safer and, ultimately, more productive.
Convert or Upgrade?
Broadly, the two choices HGV operators face are:
· Convert vehicles to meet low emissions requirements, or
· Upgrade fleets to ensure vehicles will be compliant.
There are various aspects to converting vehicles, including using alternative fuel types and retrofitting them for energy efficiency.
Alternatively, upgrading involves choosing replacement fleet vehicles that will be compliant from the outset.
Individual businesses will need to weigh up the various pros and cons of each approach, but they will need to make a decision about the direction they take. Low emissions zones represent a changing business landscape for transport operators and they must adapt to survive.
Alternative financing solutions can take the pain out of vehicle conversions or upgrades. With asset finance, for example, you can make vital purchases without it affecting your working capital or the credit lines you’re already using.