The need to reduce vehicle emissions is clear. Increases in carbon dioxide (CO2), nitrogen oxides (NOx) and other pollutants is making the air we breathe toxic and contributing to climate change.
Councils have been ordered to take urgent action to combat air pollution in their towns and cities, while the Government is aiming to make almost every car and van on Britain’s roads zero emission by 2050.
Policies to incentivise cleaner motoring
The Government is using the tax system to encourage fleets and motorists to go green. Both Company Car Tax (CCT) and first-year Vehicle Excise Duty (VED) rates are linked to a car’s CO2 emissions. Both were also recently increased specifically for diesel cars, due to their high NOx emissions. And the Chancellor has announced a forthcoming consultation on lower VED rates for the cleanest vans.
Meanwhile, central London will become the world’s first Ultra Low Emission Zone (ULEZ) in April 2019, with fees imposed on vehicles that don’t meet the latest emissions standards. Clean Air Zones are also on the way in six UK cities, along with Scotland’s first Low Emission Zone in Glasgow. There are even plans for zero emission zones in Oxford and parts of Greater London.
For individual drivers thinking of choosing a more environmentally friendly option for their next car or van, more affordable vehicles with increasing range are becoming available.
The many benefits of going green
All of these policies mean that there are now many benefits available to businesses and drivers who switch to cleaner vehicles.
Choosing a vehicle with lower CO2 emissions will mean paying less in VED and CCT. In addition, new vehicles that meet the latest Euro 6/VI emissions standards will be exempt from any ULEZ or Clean Air Zone fees. The cleanest diesels – those that meet the tougher Real Driving Emissions Step 2 standard – are also exempt from both the recent VED increase for diesels and the diesel supplement for CCT.
And, of course, the improved fuel consumption of newer, cleaner vehicles means lower fuel costs.
Choosing a ULEV
The greenest option, of course, is an ultra-low emission vehicle (ULEV). These are mostly electric or hybrid, and come with a number of extra advantages.
Most plug-in cars and vans come with a government grant that reduces the upfront cost. Pure electric cars are also exempt from paying VED and face the lowest rate of CCT (which will fall to just 2% in 2020-21). All ULEVs are exempt not only from ULEZ and Clean Air Zone fees, but also London’s Congestion Charge. And, if you get your ULEV through a salary sacrifice scheme, you won’t have to pay Income Tax or National Insurance, but a lower amount of CCT instead.
The Government also offers grants to enable both individuals and businesses to install charge points. And, since electricity is exempt from Fuel Duty, electricity costs much less per mile than petrol or diesel.
EVs are not the only option
Electric and hybrid vehicles have come to dominate the market. In our Future of Fuel report, we found 22% of fleets now contain electric vehicles and 46% contain hybrids. But other alternative fuels are available. Fuels such as CNG or biodiesel may indeed be better options for HGVs and specialist vehicles.
Fleet operators must look closely at their fleet, how it is used (e.g. company car drivers, perk fleet, operation van and truck fleet, specialist mission critical fleets), the distances the vehicles travel daily and how they are refueled (are they depot or home based).
Operating more than 50 vehicles?
We are one of the UK's leading fleet funding and fleet management providers. We manage corporate fleets for some of the UK's biggest brands, such as Asda, British Gas and Amey. Get in touch with us now to discuss how we can help you optimise your corporate fleet.Find out more
Need HGVs or specialist vehicles?
Our dedicated industry experts can help you source and manage vehicles of any size or complexity. We can even manage your design and build process from end-to-end.Find out more
Run a fleet under 50 vehicles?
We also provide tailored funding and fleet management solutions for smaller fleets.Find out more