The London ULEZ is the first of many schemes. Here’s what you need to know.
The central London Ultra Low Emission Zone (ULEZ) came into force on April 8. Whether your business operates in the area or not, understanding how it works and how to manage a fleet that operates in it is essential, because it is the first of many such zones, providing the template for a roll-out of similar schemes throughout the country.
This article looks at the reasons for the zone’s implementation, its operation, the expansion to other cities around the UK, and how companies and fleets will work in these new low emission urban environments.
Situated in central London and covering the same area as the Congestion Charge zone, vehicles entering the ULEZ will need to meet stringent exhaust emission standards, or pay an additional fee, on top of the Congestion Charge.
Operated by Transport for London (TfL) 24 hours a day, seven days a week, the zone requires drivers of cars, motorcycles and vans up to 3.5 tonnes which do not meet emissions standards to pay a daily charge of £12.50.
A charge of £100 has been put in place for heavier and higher emission commercial vehicles that do not meet minimum standards, such as buses, coaches and lorries. These charges are in addition to the existing Congestion Charge.
What emissions standards avoid charges?
- Euro 3 and above for motorbikes.
- Euro 4 and above for petrol cars, minibuses and vans
- Euro 6 for diesel cars, minibuses and vans.
- Euro VI for heavy vehicles including lorries.
- Euro VI for specialist vehicles over 3.5T and buses and coaches over 5T.
The European emission standards are the benchmark by which vehicle emissions will be measured in the new ULEZ. They are outlined in a series of EU directives which set a progressive introduction of increasingly stringent standards.
It is important to check with TfL before entering the zone about every vehicle’s compliance, and you can do that here: https://tfl.gov.uk/modes/driving/check-your-vehicle-35896
Commercial vehicles that do not meet the standards are liable to a charge of as much as £111.50 (including the Congestion Charge) a day during peak hours to operate in the ULEZ.
Failure to pay will result in a £1,000 fine, reducing to £500 if paid within 14 days for larger commercial vehicles.
For cars, the penalty is £160 (reduced to £80 if you pay within 14 days).
Taking action on ULEZ
We have outlined a number of measures that you can take to ensure your fleet is compliant with the ULEZ standards, and how you can minimise costs.
Central London is home to many of the UK’s biggest businesses and to around 23,000 SME organisations too – many of which have to make vital trips in and around the zone. The impact the new ULEZ has on your business will depend on the types of vehicle you use and your operational requirements.
Ascertain vehicle standards and usage
Businesses will need to ascertain the emissions standards of every vehicle on their fleets, and create a plan for utilisation of those that are not compliant. If these vehicles are travelling into the zone every day, the expense of using them might be prohibitive, and the cost of de-fleet and sourcing new vehicles a more viable option, especially when you add in likely lower running costs from better the fuel economy of new vehicles.
If those non-compliant vehicles are making few trips into the ULEZ, then it might be better to accept the charge rather than make wholesale change. But to make these decisions, these journeys need modelling over a significant period of time, and then factored into the whole-life costs of those vehicles. In order to do this, you need to understand your fuel, SMR, tax, funding and depreciation costs.
To find out if your business qualifies, follow this link: https://tfl.gov.uk/modes/driving/ultra-low-emission-zone/scrappage-scheme
Paying and reconciling expenses
Your business will need to consider how best to pay for the ULEZ charges, whether incurred by employees and claimed back, or paid centrally by your business.
Payment is made through the TfL website, as already happens for charges such as T-charge (the precursor to the ULEZ), Congestion Charge and Dartford Crossing tolls.
There are two main ways to pay, depending on the size of your fleet:
- Businesses with up to five vehicles can register a payment card for Auto Pay as a quick and convenient method.
- Businesses with more than five vehicles need to register for Fleet Auto Pay. This only allows for Direct Debits as a payment method.
Both have a £10 per vehicle annual registration fee, but users benefit from the avoidance of penalty charges, and discounted Congestion Charge too. You can find more about the schemes here: https://tfl.gov.uk/modes/driving/fleet-auto-pay
Navigate cleverly around the ULEZ
Your business could consider better route planning in order to complete essential trips. One option may be for company fleets to be fitted with tracking technology which can provide information on the best routes to take for a given journey, and also potentially geofence areas to avoid entering the zone. A tracking system should also allow you to set up alerts when any vehicle enters the zone.
If you’re making regular trips into the ULEZ, redeployment of vehicles for certain journeys could be an option. Or perhaps it might be time to look at some form of hub-and-spoke operation. For some businesses bringing goods into London from outside in heavy commercial vehicles, it may be worth unloading nearby and then delivering to final destinations in lighter, compliant vehicles.
Put a policy in place
You should also consider putting in place a company-wide travel policy to ensure that employees are aware of the ULEZ rules and regulations, and what is deemed as an acceptable business expense when it comes to paying the charge.
Analyse your fleet fuel mix
As well as vehicle types, you should think about the fuel mix of your fleet – particularly when it comes to the vehicles you are operating in the ULEZ.
Virtually all petrol cars registered since 2006 will be exempt from the ULEZ fee – including those that meet the Euro 5 and 6 emissions standards. In fact, around 12.7 million of the 18.3 million petrol cars on the road are already ULEZ compliant, according to the Department for Transport. Redeployment of petrol vehicles could be an option for operations in the central London area.
While much of the wider discussion about vehicle emissions has centred around diesel engines, for the purposes of ULEZ compliance, the vast majority of diesel-powered fleet cars will actually be compliant.
All diesel cars that are Euro 6-compliant will not incur a charge, and generally, this means those registered with the DVLA after September 2015. With replacement cycles of fleet cars rarely more than four years, and more often three, most should be able to enter the ULEZ without incurring a charge.
However, for vans, which often have longer fleet lifecycles, it will be important to check they are Euro 6 compliant, or you could face penalties.
Alternatively, businesses could consider using electric vehicles for trips into central London given their exemption from the ULEZ charge. Most hybrids are also exempt too as they meet Euro 5 and 6 regulations.
Again though, the cost of change and operational need will be the determining factor. While there is a strong case for electric cars being used in the ULEZ, thanks to wide availability, easy charging and the shorter nature of urban journeys, the case is more complex for commercial vehicles.
There are some electric vans on the market, but currently they tend to be more expensive to buy and run.
The future of low emission zones
London is just the beginning: there are planned low emission and clean air zones in cities throughout the country. What is likely to happen next?
The wider view
The launch of the London Ultra Low Emission Zone will inevitably have a far-reaching impact across the UK. Some businesses may not feel the need to prepare for the ULEZ given its location or the low frequency of the visits they might make to the capital.
However, all businesses need to monitor the success and operation of the ULEZ in London as similar schemes are planned for five other major UK cities by 2020, including Manchester and Birmingham, with more than 20 other clean air zones in development at UK urban centres.
For companies, crucial to the roll-out of these will be consistency. With each local authority able to create its own scheme, there could be a situation where each city has different costs, exemptions and compliance levels. Keeping track of these, and ensuring you have the right vehicles in the right place will be essential if you are not to incur unwanted cost.
As a business owner, you can make some small tweaks to your operation and play a part in shaping local infrastructure for the better, by understanding the part cleaner vehicles can play in your fleet and having a clear idea of running costs and operational fitness for purpose.
The case for cleaner air
Around half of emissions from road transport are nitrogen oxides (NOx), which contribute to the high levels of airborne nitrogen dioxide (NO2), and particulate matter (PM) found in London and other urban centres.
ULEZ and clean air zone measures are intended to reduce air pollution caused by exhaust emissions which contain harmful NOx and particulates. According to the Mayor of London’s office, NOx emissions from HGVs are expected to reduce by nearly 50 per cent, coach and non-TfL bus emissions will drop by more than a third, and emissions from cars and vans are expected to be cut by eight and 12 per cent respectively.
The London ULEZ will help reduce these emissions to protect children from lung damage, reduce the risk of breathing illnesses and heart disease in adults, and improve the health of people exposed to the highest levels of pollution. If targets are met, more than 30,000 people in central London (a 40 per cent reduction), and 100,000 people across London, will no longer live in areas exceeding the NO2 limits.