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Life after diesel

Date: 31 October 2017   |   Author: Debbie Wood

To coincide with London's new T-Charge, which came into force on 23 October, the British Vehicle Rental and Leasing Association (BVRLA) has published a blueprint for delivering a cost-effective transition away from diesel vehicles in the UK.

Although most fleets will be unaffected by the new £10 daily charge placed on pre-Euro 4 diesel and petrol vehicles travelling in the London Clean Air Zone, it will, according to the BVRLA, provide another incentive for fleets to move away from grey fleet vehicles and start considering cars and vans with lower emissions more seriously. 

"With London's Clean Air Zone up and running, and others being planned, fleets should at least consider their ultra-low emission options. Waiting for another fleet cycle to come and go could leave them exposed to any emerging air quality measures, or left behind while new ultra-low emission technology leaps ahead," BVRLA chief executive Gerry Keaney tells BusinessCar. "Car fleet operators have a lot more choice than those running vans or trucks, but it is still worth talking to a rental, leasing or fleet management company to get some advice. Modern, fuel-efficient and low-emission diesel remains the obvious choice for many fleet applications, particularly those involving long motorway journeys or heavy loads."

Using the same methodology used by UK Government policymakers to assess the national air quality plan, the BVRLA produced its report in conjunction with Ecuity Consulting. It came to four main conclusions about what action needs to be taken to manage the transition away from diesel, and help to mitigate the impact this will have on businesses:

  • The Government should focus its efforts on reducing diesel car use in urban areas. Around a third of car use is on urban roads, and electric and hybrid cars represent an increasingly affordable alternative.
  • A steady transition away from using diesel vehicles will enable the supply chain and consumers to move to alternative technologies without incurring too many costs.
  • Government policy should focus on trying to reduce car ownership instead of choosing alternative vehicles. A scrappage scheme that provides mobility credits for public transport, car club and car rental journeys could stimulate this behaviour change.
  • The Government needs to provide a consistent clean air zone policy framework across the UK to avoid placing extra burdens or costs on people and businesses driving between urban areas.

According to the report, tackling NOx emissions by reducing diesel car market share is the most cost-effective way of tackling air pollution. However, the pace of the diesel phase-out should be considered. 

The report highlights the need for a measured and steady reduction in diesel vehicles. It estimates that a gradual 6-7% annual diesel market share decrease - the equivalent of taking five to six million diesel cars off the road between 2018-27 - is the optimal amount for the economy.

"We need a carefully blended set of incentives and restrictions that remove the oldest, most polluting diesel vehicles without crippling our economy, or punishing people for decisions they have already made. The vehicle rental and leasing industry has a huge stake in this transition, and we look forward to working with local and national Government to deliver a workable solution," said Keaney.

He believes fleets need a range of supporting measures in place from the Government, alongside a tax system that is fit for purpose, while EVs still need incentivising if fleets are going to adopt them en masse. 

"More communication is always useful, but it is not the main problem," he explains. "Fleets face a huge amount of uncertainty as they wait for local authorities to produce their own bespoke air quality plans, and for the Government to formulate a range of supporting national measures. At the same time, we have a company-car tax regimen that is not fit for purpose and is actually stifling the adoption of electric vehicles. Combine this with the uncertainty of Brexit, falling business confidence and the threat of rising interest rates, and you have a very challenging fleet decision-making environment.

"Leasing companies are totally committed to promoting and supporting electric vehicles, but they will remain a niche offering until we see more charging infrastructure and a second generation of longer-range pure electric vehicles. The Government could help by providing more in-life incentives for EV drivers in the form of free parking and road tax."