London’s clean air zone extension could drive small firms out of business, say trade bodies

The Mayor of London’s decision to expand the capital’s ultra-low emission zone (ULEZ) will put small commercial fleet operators at risk, transport bodies claim.

London’s ULEZ, which will be enforced in central London from April 2019, will be expanded within the North and South Circulars from October 2021.

Estimates suggest that 35,000 vans, 3,000 lorries and 100,000 cars will be hit by the new zone, which will cover an area 18 times larger than the central London ULEZ.

Lorries not meeting the latest Euro VI emissions standard will also have to pay up to £300 to enter Greater London – using the same boundary as the existing low emission zone (LEZ).

London mayor Sadiq Khan argues that improving air quality in the capital requires bold action.

“An expanded ultra-low emission zone, in conjunction with the central London ULEZ, will really help transform the air millions of Londoners breathe,” he said.

However, transport trade bodies said they were dismayed by the move, which, they claim, risks putting some firms out of business.

The expanded ULEZ will be managed in the same way as the central London one and will operate in addition to the congestion charge, 24 hours a day, 365 days a year.

Drivers within the expanded zone using non-compliant vehicles will pay a daily ULEZ charge of £12.50, 24 hours a day, 365 days a year.

These include: motorbikes that do not meet Euro 3 standards; petrol cars and vans that do not meet Euro 4 standards (roughly the equivalent to not being more than 15 years old for cars in 2021); and diesel cars and vans that do not meet Euro 6 standards (roughly the equivalent to not being more than six years old for cars in 2021).

Any heavy vehicle that is either Euro IV or Euro V will face a £100 fee to enter the Greater London zone from October 2020. If it is below Euro IV it will be charged £300 each time it enters the zone.

The Greater London zone will apply to buses and coaches weighing more than five tonnes and lorries and specialist heavy vehicles in excess of 3.5 tonnes.

Specialist vehicles affected include breakdown and recovery vehicles, snow ploughs, gritters, refuse collection vehicles, road sweepers, concrete mixers, fire engines and tippers.

The Freight Transport Association (FTA) has calculated that, for a small firm with five lorries or five vans, the extra cost of compliance in 2020 or 2021 will amount to more than 40% of their annual turnover.

Foreign vehicles

Foreign vehicles, as they do with the current LEZ, will need to register for the Greater London zone. If a foreign registered heavy vehicle enters without registering, even if it meets the standards, it will be required to pay the daily charge, or may receive a Penalty Charge Notice of up to £2,000.

Christopher Snelling, head of UK policy at the FTA, said: “The ULEZ is not a transformative measure – it only brings forward the air quality gain that was coming anyway by a few years, at a cost to the livelihoods of many small businesses in London.”

He continued: “Small firms tend to buy secondhand so will have older vehicles that do not reach the latest emissions standards. They will really struggle to raise the loans they will need to buy compliant vehicles a few years earlier than they would have expected.”

The FTA will continue to argue for limited sunset clauses for operators based inside the expanded zone who need more time to meet the requirements, while not endangering positive overall progress on air quality.

Stuart Thomas, director of fleet and SME services at The AA, said: “Some businesses may struggle to budget for this radical step in terms of increased costs.

“Currently, there is too much stick and not enough carrot in the mayor’s plans to increase emissions standards for vehicles operating in the capital.”

Thomas argues that a targeted scrappage scheme would help soften the blow to smaller operators.

Khan conceded that some motorists will need help switching to greener transport options and is urging the Government to deliver a diesel scrappage scheme.

The Road Haulage Association (RHA) accused the mayor of treating the commercial fleet industry as a cash cow. It says that, with 43% of the UK’s heavy truck fleet subject to the Greater London zone charge at launch in 2020, and no commitment to reinvest revenues in helping the industry become even greener, Transport for London (TfL) is using the expansion to generate more income from hauliers.

“Our sector has done a huge amount to adopt cleaner air technologies over the past few years – in fact we’ve nearly halved our NOx emissions since 2013 and that trend is set to continue,” said RHA chief executive Richard Burnett.

“We expect the figure will be 70% in 2021, yet the mayor still pursues policies that ignore the progress we’re making in leading transport towards an emissions-free future.”

Sensible phasing needed

Burnett also believes that many operators will be priced out of driving into the capital and some may even be driven out of business, while others may turn to vans instead.

Burnett argued: “This will mean more congestion on London’s roads which means more pollution. So it’s not clear how the LEZ extension – and indeed the premature introduction of ULEZ next April – is going to make London’s air any cleaner in the short term.

“What we need is the sensible phasing in of these schemes that will allow hauliers to replace their fleets to more realistic timeframes – not punishing policies that will put many SMEs in jeopardy.”

However, Khan highlighted the overwhelming support he has received from Londoners for expanding the zone. The public consultation was the largest ever recorded by TfL, with 56% supporting or strongly supporting the expansion of the ULEZ boundary from central London and 74% backing the new London-wide emissions standards for heavy vehicles.

TfL estimates that expanding the ULEZ will reduce road transport nitrogen oxide (NOx) emissions by a further 28% across London.

Drew Kodjak, executive director of the International Council on Clean Transportation (ICCT), said: “Based on our assessment of real-world emissions, Euro 4 and 5 diesel cars are some of the highest polluting vehicles in London’s fleet, while Euro 6 vehicles have shown improvement.

“We expect mayor Khan’s new Ultra-Low Emission Zone to have a significant impact on reducing air pollution.”