Alison Bell's blog: The final countdown for diesel fleets
04 May 2017
Hot off the heels of the Government's confirmation in the Spring Budget of its commitment to improving air quality, follows news of its £1 million grant to develop "pay as you pollute" tracking technology - targeting diesel car drivers.
With Government plans to review the way diesel vehicles are taxed already underway, including changes to company car benefit-in-kind, now is the time for fleet decision-makers to prioritise a review of their current policies and plan for a future with fewer diesel vehicles
Diesel company cars incur an additional 3% benefit-in-kind tax supplement up to a maximum of 37%, which the government has previously said would remain in place until April 2021. However, national and international pressure for governments to take action to cut demand for diesel vehicles could see tax rises announced as soon as the Autumn Budget. Tax policy already drives fleets towards plug-in and ultra-low emission vehicles and currently Euro6 compliant diesel vehicles are the "cleanest" oil-burners available, so any new changes could see a big shift away from diesel.
Whilst the EU has set out CO2 targets for cars and vans to 2020/21, the Brexit decision means the UK's position could be quite different. Meanwhile, the way CO2 emissions are measured will change with the introduction of the Worldwide Harmonized Light Duty Vehicles Test Procedure, which will have a knock on impact in a number of areas including taxation.
According to the British Vehicle Rental and Leasing Association, diesel vehicles remain a vital part of the fleet mix, as diesel engines are the most energy-efficient internal combustion engines. However, the fleet training organisation, ICFM, believes the "writing is on the wall for fleet reliance on diesel vehicles - and diesel company cars specifically." And the RAC also sees the latest Budget as a warning for diesel owners, as changes to the tax on diesel vehicles could be announced before the end of the year.
The signal that the government is looking at introducing diesel vehicle tax changes that are likely to mean tax rises could prove to be the catalyst to further drive fleets towards plug-in vehicles.
The target is for almost 25% of all new car registrations to be plug-in by 2021 and by 2040 the Government's aim is that all new cars sold in the UK will have zero tailpipe emissions. If those ambitions are to be achieved then it is fleets - who are responsible for buying the majority of all new cars registered in the UK - and company car drivers who will be in the vanguard. Is now the time for fleet decision makers to seriously consider a shift towards electric and hybrid vehicles?