Introduction
Low Emission Zone's or LEZ's were first introduced to the UK in 20081 and have generally been the source of much distaste from the public ever since. It is probably common knowledge by now, but for those who are unaware: LEZ's are designated inner-city zones where efforts focus on improving air quality and creating clean air zones. This is achieved by reducing vehicle emissions, leading to less air pollution, a cleaner environment, and healthier citizens.1 Unsurprisingly, much of the public dislikes these measures as the incentives used to clean the air are financial. Therefore, these LEZ's tend to damage many pockets of people and businesses nationwide.
Many cities up and down the country enforce these zones, probably the most infamous being ULEZ in London, which was initially introduced in 2019 but was recently expanded to cover all London boroughs in 2023, which was met with much backlash.2Â Another example is Manchester which was one of the significant cities intended for a LEZ. However, many Mancunians, including Mayor Andy Burnham, rejected the idea, meaning it was instead placed 'under review'.3
Sadly, for your pocket, this was a standout case. Many major cities now have these zones as commonplace, and people are having to live with the consequences and damage to their expenses.
Financial Implications for Haulage Firms
Using London's ULEZ as an example the costs quickly add up, for cars, motorcycles, vans, and specialist vehicles (up to and including 3.5 tonnes) and minibuses (up to and including 5 tonnes) it is just the small fee of £12.50 per day, this on top of the congestion charge.4 However, specialist heavy vehicles (over 3.5 tonnes), as well as buses, minibuses, and coaches (over 5 tonnes), don't pay the ULEZ charge. Instead, they pay the LEZ charge if they're not under specific regulations. The details for this LEZ charge are as follows:
£100 per day for vans or specialist diesel vehicles and minibuses that do not meet Euro 3 emissions standards. 
£100 per day for HGVs, lorries, vans, buses, minibuses, and coaches over 5 tonnes which do not meet Euro 6 standards but meet Euro 4 standards.
£300 per day for HGVs, lorries, vans, and specialist heavy vehicles over 3.5 tonnes; buses, minibuses, and coaches over 5 tonnes, which do not meet Euro 4 standards.5
It is clear from these figures businesses with non-compliant vehicles will seriously suffer at the hands of these measures, which is why they must adapt their operations to become compliant or avoid these zones altogether.
When trying to comply with these standards, there are two options for businesses: they can retrofit or replace. It may be possible to retrofit emission reduction technologies to reduce your pollution; this ranges from fitting certain catalytic conductors to changing the engine altogether; neither option is cheap. Retrofitting fleet vehicles can cost from £15k-£25k, which is no small sum. Still, compared to the cost of a new vehicle, it is an attractive option for some businesses.6 However, despite the larger outlay, replacing vehicles with newer, more compliant models is the more favourable option in the long term as the replacement will be needed eventually.
It is also relevant to note that there are government grants, tax breaks and schemes which help people and businesses navigate these upgrades; for the purchase of new low-emission vehicles, the government subsidises these, covering up to 35% of the cost for vans and up to 20%Â for trucks.7Â However, retrofitting schemes, like the zones, vary from city to city; therefore, individuals must consider the best option based on their locality.
The other option for firms facing these costly zones is simply avoiding them. Unfortunately, this may not be as easy as it sounds, and the detour may cost a business more when considering the extra fuel and time needed to reroute.
Conclusion
Whether you like it or not, the penalties for polluting the planet are increasing and impacting everyone's lives; therefore, the incentive to go green is growing. Positioning yourself to avoid these penalties earlier will place you at an advantage over competitors by putting this money into your business rather than going to waste on these daily fees. It is also worth considering that, as the world pressures us to become environmentally conscious, society and businesses are constantly looking to associate themselves with 'green' practices. Consequently, becoming a green business will give you a competitive advantage.
Understandably, upgrading vehicles is not easy, as it often comes with large cash outlays, which is why alternatives have been discussed. However, purchasing new compliant vehicles without a huge upfront cost is possible, and there are many different flexible finance options for your business to consider.
Contact us today to discuss the potential paths for your business to navigate your way to healthy growth.
Phone: 0161 724 2424
Email: enquiries@ebsfinance.co.uk
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Reference List
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1.     Crystal Ball. (2023) . Guide to LEZ & ULEZ Zones in the UK.
Available at: https://crystalball.tv/blog/lez-ulez-zones-uk-guide/ (Accessed: 12 December 2024).
2.     Coggins, M. (2023) ULEZ and its expansion, Institute for Government.
Available at: https://www.instituteforgovernment.org.uk/explainer/ulez.
3.     ‌Brown, M. and correspondent, M.B.N. of E. (2023) ‘Andy Burnham rejects clean air zone that would charge drivers in Greater Manchester’, The Guardian, 13 December.
4.     Matters, T. for L. | E.J. (no date) Paying the ULEZ charge, Transport for London. Available at: https://tfl.gov.uk/modes/driving/ultra-low-emission-zone/ulez-payments.
5.     ‌Low Emissions Zones Guide (2023 Update) (no date) Motorway.
6.     Trust, E.S. (2019) Why you might be better off retrofitting fleet vehicles, Energy Saving Trust.
Available at: https://energysavingtrust.org.uk/why-you-might-be-better-off-retrofitting-rather-than-replacing-fleet-vehicles/ (Accessed: 12 December 2024).
7.     ‌GOV.UK (2022) Low-emission vehicles eligible for a plug-in grant, GOV.UK. GOV.UK. Available at: https://www.gov.uk/plug-in-vehicle-grants.
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