Regulation

ULEZ: How the leasing industry reacted

Chris Lemmon covers the introduction of the London Ultra Low Emission Zone in London, and how the leasing market has reacted.

Lorna Roberts / Shutterstock.com

Central London implemented the Ultra-Low Emission Zone (ULEZ) in April, in a bid to reduce the amount of pollution produced by vehicles in the capital.

The ULEZ zone will initially cover the same area as London’s existing congestion charge zone, before expanding to include the entire area between the North and South Circular roads in 2021. Travellers in non-compliant vehicles now must pay a daily charge of £12.50 to enter the area. Those who fail to pay the charge face a fine of up to £160.

Non-compliant vehicles include motorbikes that do not meet the Euro 3 standards (pre-2007 vehicles), petrol cars and vans that do not meet Euro 4 standards (vehicles pre-2006), diesel cars and vans that do not meet Euro 6 standards (vehicles pre-2015), and buses, coaches and lorries that do not meet Euro 6 standards.

Transport for London (TfL) hopes that the scheme will result in a 45% reduction in toxic emissions from road transport within two years. Mayor Sadiq Khan said the capital’s air pollution was a “public health emergency,” while the “poorest Londoners suffer the worst air quality”.

Gerry Keaney, chief executive at the BVRLA, has urged businesses to consider their transport options following the implementation. He said: “Businesses across London are upgrading their fleets to comply with the new ULEZ, but it is clear that many smaller firms are still unaware of the zone or are struggling to afford the switch to expensive new low emission vans and trucks.

“It is vital that these companies assess their potential ULEZ costs and work out if they are eligible for any of the discounts, exemptions or scrappage schemes that are available.”

Lack of awareness

Jon Lawes, managing director for Hitachi Capital Vehicle Solutions, noted the lack of awareness surrounding the new clean air zone. “While 77% of respondents in London consider vehicle emissions in the UK to be a significant problem, only 54% know what a clean air zone is, with awareness on a national level at an even more concerning average of 43%.

“Considering the average age of cars and vans on our roads is over eight years, vast numbers of diesel drivers in particular may be unaware they could be driving vehicles that will incur charges. For businesses and fleet managers, gaining a full understanding of the size and usage of private vehicles by their employees must be a priority to account for potential expenses.”

A survey from motorbike insurer Bikesure quizzed 1,000 commuters in London on how ULEZ will affect them. Three in 10 respondents said they would not be able to afford to drive in the new clean air zone, while 29% said they would not be affected.

Separate research from Nissan also highlighted consumer confusion around ULEZ. In a survey of 2,000 UK adults, three-quarters had no idea what the Euro emission standard is for the current vehicle – the criteria that dictates ULEZ eligibility.

Turning electric

The same survey revealed that 60% of consumers are willing to purchase an electric vehicle to benefit the environment, but only a quarter were aware of financial incentives to help them do so.

The Federation of Small Businesses (FSB) said that businesses were not given sufficient time by the government to make changes to their fleet without significant cost hardship.

Sue Terpilowski, London policy chair at the FSB, said the ULEZ implementation could cause harm to many micro and small businesses. She said: “Small businesses are suffering due to lethal cocktail of increasing business rates, higher employment charges [Pensions and Minimum wage], and the introduction of Making Tax Digital.

“In isolation, they can be worked through, however, mixed together within a two week time frame, alongside the Brexit uncertainty and the launch of the ULEZ, it spells disaster for many micro and small businesses.”