Transport: emissions charging for London's roads

It has been recognised that London is in breach of air quality law and is expected to remain non-compliant until 2030 (see our previous article here). In order to reduce NO2, carbon dioxide, particulate matter and other emissions in London, a Variation Order (see footnote 1) to the existing order (see footnote 2) on London’s low emissions zone came into effect on 23 March 2015.

Impact

The Variation Order will create an Ultra Low Emission Zone (“ULEZ”) in central London in 2020. The ULEZ will cover the same area as the current Congestion Charging Zone. Charges will apply to vehicles within the ULEZ which do not meet certain ULEZ emission standards. These charges will differ according to the age, type of vehicle and whether if it is petrol/diesel powered (see table below). Save for the comments below on buses, taxis and PHVs, in essence the Variation Order provides that by 2020 a charge will apply to vehicles entering the zone which do not meet at least the standards applicable today (apart from large diesel vans, which must meet the standards to be applied on 1 September 2016). Consequently it will be older vehicles operating to lower standards which will be charged.

Penalties will apply in the case of failure to pay the charges. These will be up to £130 for vans, cars and motorcycles, and up to £1000 for HGVs, coaches and buses. Certain time-limited exemptions will apply for residents in the ULEZ and disabled vehicle owners.

There are no express exemptions for the fleets of public sector vehicles (e.g. local authorities, police, fire, health etc.)

Public buses

It is planned that by 2020, in the ULEZ, all Transport for London’s (“TfL”) single deck buses (currently numbering about 300) will be zero emission (“ZE”), and all of its double deck buses (currently numbering about 3,000) will be hybrid.

Taxis

Due to concerns raised in respect of taxis during the consultation phase prior to the Variation Order, a further consultation took place and ended on 25 August 2015. Proposals following this consultation are subject to the Mayor of London’s confirmation. Current proposals include:

• by January 2018, all newly licensed taxis are to be zero emission capable (“ZEC”);
• there be a voluntary decommissioning scheme for taxis more than 10 years old;
• there be an age limit for all non-ZEC taxis (options include 10, 12 or 15 years).

Private Hire Vehicles (PHVs)

As with taxis, PHVs were subject to the same consultation and current proposals include:

• by January 2018, PHVs less than 18 months old from date of registration with the DVLA and licensed for the first time must be ZEC;
• by January 2018, PHVs more than 18 months old from date of registration with the DVLA and which are obtaining a new licence, to be at least Euro 4 (petrol) or Euro 6 (diesel);
• the current requirement that PHVs that are new to licensing must be no older than 5 years old is to be discontinued entirely.

Key dates

• Late 2015 – The Mayor of London to decide on the taxi and PHV consultation.
• January 2018 – proposed restrictions for taxis and PHVs to come into force.
• 7 September 2020 – ULEZ to come into force.
• September 2020 – TfL’s double deck buses to be hybrid, and its single deck buses to be ZE in the ULEZ.
• 7 September 2023 – resident’s discount and disabled exemptions to expire.

Before 2020

Between 2015 and 2020, TfL will carry out an information campaign so that drivers and operators are aware of the ULEZ standards and understand their options. The numbers of hybrid and ZE buses will increase. TfL is to expand the electric charging system from 1,400 charging points to 6,000 by 2018.

Potential future developments

There appears to be support amongst some London councils and boroughs for expansion of the ULEZ into inner London boroughs, and to extend the operation of hybrid and ZE buses London wide.

Ripple effects

Of course the ULEZ is a zone where vehicles will operate both in and outside it. As a result the ULEZ is likely to have a significant influence. Add to this the fact that the draw of central London is so high, there will be potentially significant effects, direct and indirect, on cost and choice of vehicles by persons who operate or own vehicles outside of central London. In particular organisations which operate significant commercial vehicle fleets that service or pass thorough central London (if only as part of their operations) will no doubt consider very carefully the potential impact of the ULEZ on their current and future vehicle needs. Depending upon their travel patterns and needs, private vehicle owners may also wish to take into account whether the ULEZ will impact on the type of vehicle they may acquire in the future.

Of course, taxis and PHVs operate both inside and outside the ULEZ. It will be interesting to see how infrastructure outside of the ULEZ will develop to service ZEC taxis/PHVs.

Comment

London is not the only UK city that is failing to meet EU air quality standards. Birmingham and Leeds are also non-compliant and will likely remain so until 2030. Of course it is not only UK cities that are failing EU air quality standards. Other cities in the EU are also failing. Undeniably there are many cities outside the EU which suffer from poor air quality. It is widely reported that Beijing closed its roads for its recent 70th anniversary victory celebrations over Japan to ensure clear skies for the celebrations.

The point is that there are many cities across the world which are struggling to implement measures to tackle poor air quality, about which road transport emissions are a major contributor. By dint of the fact that these are major cities, they are major markets for the purchase and operation of road vehicles. This is not to say that other cities will follow what London is doing but it is likely that various significant measures will be taken in other major cities. If this is the case then of course this will be of material interest to auto manufacturers and their supply chains, logistics and commercial fleet operators and retailers.

This article was co-authored by Helena Thompson, Trainee Solicitor, London.

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1 Greater London Low Emission Zone Charging (Variation and Transitional Provisions) Order 2014

2 Greater London Low Emission Zone Charging Order 2006