Six things fleets should know about the new 2030 ICE ban consultation

The Government published a new consultation on Christmas Eve to finalise its plans to end the sale of new petrol and diesel cars by 2030, with the outcome set to have a significant impact on fleets.

Here we look at six things they should know about the new consultation and what it may mean for them:

1 The 2030 and 2035 dates are not up for debate

2 Clarity will be provided on what new cars will be sold after 2030

3 Vans are being given specific consideration

4 The possibility of introducing new grants is raised

5 Changes to the ZEV mandate could be made

6 Fleet views wanted

1 The 2030 and 2035 dates are not up for debate

The 2030 ICE ban and 2035 ban on the sale of all new non-zero emission cars was first announced by the Conservative Government in November 2020, but in September 2023 it delayed both deadlines by five years.

However, one of Labour’s manifesto commitments before it won last year’s General Election was to restore the original dates and this consultation seeks views from the automotive industry – including fleets - on how to do this.

This consultation is clear that it seeks views only on the treatment of different technologies under the phase out, rather than how and when the phase out will be implemented.

2 Clarity will be provided on what new cars will be sold after 2030

One of the crucial details missing from the original ICE ban plans was what non-zero emission cars will be able to be sold in the new vehicle market between 2030 and 2035.

The original policy said new cars and vans could be sold if they “have the capability to drive a significant distance with zero emissions (for example, plug-in hybrids or full hybrids) and this will be defined through consultation”.

However, up until now this consultation had not taken place, giving no clarity on the issue.

In the new consultation document, the Government considers there are three broad approaches that could be used to enact the phase-out of ICE-only cars from 2030 and these could be used alone or combined.

“These are technological definition, vehicle level CO2 cap and non-ZEV fleet average CO2 cap,” it says.

A technological definition would define which cars are committed by how the vehicle is powered. The three technologies which can be sold from 2030 are full hybrid EVs (HEVs), plug-in hybrid EVs (PHEVs) and range-extended EVs (REVs).

The consultation says while some models of mild hybrid electric vehicle are capable of sustained zero emission propulsion at low speeds, they are not capable of sustained zero emission propulsion and instead rely on their internal combustion engine. As such, this type of technology is proposed to be phased out from 2030.

The picture concerning the other hybrid technologies is less clear. If a PHEV definition was adopted, then it may be necessary to apply a minimum WLTP zero-emission range, such as 50 miles, for the purpose of the 2030 technical definition. PHEVs that fall below that standard would be phased out.

The consultation points out that requiring vehicles to be electrified in some way does not, on its own, guarantee that CO2 emissions reductions would be realised as there are a number of petrol and diesel cars that emit lower levels of CO2, in absolute terms, than many HEVs and PHEVs.

As a result, establishing a technical definition on its own could permit less efficient hybrids to be sold but prevent efficient petrol and diesel cars from being sold, contrary to the aim of cutting emissions from the new car fleet.

The Government says one way to complement the technical definition and guarantee CO2 reductions could be to introduce a vehicle level CO2 cap to define the maximum acceptable CO2 emissions of an individual vehicle.

Under this approach, if a vehicle had emissions beneath this threshold and also met the technical definition, it could be sold alongside ZEVs until 2035.

However, a potential issue here is that recent data has demonstrated that PHEVs can have higher emissions in the real world than had previously been assumed, as assumptions made under the WLTP CO2 test may overestimate the amount of time that the vehicle is in zero emission mode.

This research has led to the European Union introducing changes to the WLTP methodology to ensure the PHEV CO2 values are increased to reflect real-world performance.

Establishing a vehicle-level cap could also rule out many HEV cars, as well as a number of PHEVs. If the cap was set at the level of the lowest-emitting ICE vehicles then, based on the most recent data, a cap of 105g/km would be required.

This would rule out most HEVs and a significant proportion of PHEVs.

The final option included in the consultation document is a non-ZEV fleet average CO2 emissions cap, which would establish a maximum CO2 emissions of new cars sold in a calendar year.

Manufacturers already have their non-ZEV fleet average CO2 emissions regulated through the Vehicle Emissions Trading Schemes Order 2023.

This requires their non-ZEV emissions remain at least the same level as the manufacturer’s average in 2021, alongside implementing the ZEV mandate.

As a result, any target established under this option could be set in two ways – either as a fixed target based on a given level of CO2 emissions, or as a percentage reduction against each manufacturer’s performance in prior years.

It is considered that an approach that requires a percentage reduction against existing performance, rather than a fixed target, would be the most appropriate.

A fixed target for all manufacturers would not consider the vehicle types being sold – meaning that manufacturers that focus predominantly on smaller models would be able to meet targets easily, while those focusing on larger vehicles would find it far more challenging to meet requirements.

3 Vans are being given specific consideration

The Government is committed to the ZEV Mandate trajectory for new vans and ensuring the sales of all new light commercial vehicles are fully zero-emission by 2035 – as with cars.

However, the consultation document considers whether non-ZE vans should be subject to different requirements to cars after 2030.

This is because the ZE and hybrid van market is very different to the car sector as it says few vans are currently offered with hybrid powertrains, so any decision to apply a requirement to new LCVs from 2030 need to take this starting point into account.

Also, few van manufacturers are planning to launch hybrid versions, with the vast majority preferring to switch directly from ICE to ZE models, so establishing a technological definition in the same manner being proposed for cars risks trying to create a hybrid van market for the 2030-2035 period, potentially diverting investment away from ZE technologies.

Therefore, the Government is not proposing to set a technological definition for non-ZE vans sold after 2030, but is instead seeking views on whether a vehicle-level CO2 cap or a more ambitious non-ZEV fleet average CO2 requirement should apply.

The Government believes a fleet average CO2 requirement would be the most appropriate form of target to apply, providing indicative options for a 10% and 20% CO2 reduction.

4 The possibility of introducing new grants is raised

The Government already provides a range of measures to support the uptake of zero emission vehicles.

These include tax incentives, investment in charging infrastructure, £2bn support for zero emission vehicle manufacturing and supply chain, and targeted grant support for consumers such as the plug in van grant.

The consultation seeks views on the current measures to support demand for ZEVs and what additional measures could further support the transition.

5 Changes to the ZEV Mandate could be made

Under the ZEV Mandate, ZEVs must last year have made up 22% of an OEM’s new car registrations and 10% of their new van sales, or they would face fines of £15,000 for each vehicle sold outside the target.

This demand sometimes led to significant discounts for fleets as manufacturers pushed volume to meet targets to avoid the fines. The effects of the ZEV Mandate also led to other challenges for fleet operators.

These proportions will increase annually until 2030, when they will be 80% and 70% respectively. But the reality of the targets is not as clear-cut as this, as there are several alternative ways for manufacturers to comply in a way that makes sense for them and the wider market, including selling fewer ZEVs than the headline target if they make up for it in other ways.

The consultation notes that over the first year of the ZEV Mandate “pressures have emerged that present additional challenges compared with when the original ZEV Mandate design was consulted on”.

It adds: “As a result it is appropriate to seek views on whether the current flexibilities are still fit for purpose in meeting the existing ZEV trajectory, the phase-out date for new cars that rely solely on internal combustion engines in 2030, and the phase out of new non-zero emission cars and vans from 2035.”

The Government has been considering whether there should be greater flexibility in using vans allowances.

Previously, car and van emissions have been kept separate, but there is flexibility to allow the transfer of excess van allowances to the car scheme which will not compromise the overall trajectory, certainty or carbon savings of the regulation.

6 Fleet views wanted

The Government has invited views from industry stakeholders – specifically including fleets – on the measures included in the document.

It is particularly interested in hearing from fleets of any impact that any new or additional non-ZEV CO2 emissions requirement from 2030 would have on the van industry and on van users.

The consultation document contains 16 specific questions it is seeking opinions on, and interested parties have until February 18 to respond, which they can do through sending written answers through the post or via email.

After the closing date, the DfT says it will undertake extensive engagement with stakeholders, including hosting a series of workshops, roundtables and engaging in bilateral discussions.