The UK fleet industry will insist that the Government allows sufficient time to adapt to any measures brought in to tackle air quality targets at the end of this year.
Following a ruling by the Supreme Court, the UK has until December 31 to submit detailed measures to the European Union on how it will meet air quality targets.
Rory Stewart, minister for the Department for Environment, Food and Rural Affairs (Defra), is drawing up the plans.
The Government was ordered to clean up the UK’s air quality by the Supreme Court following a case brought by activist lawyer group ClientEarth.
The group blames the UK’s tax policies for encouraging the uptake of diesel cars, which it says are a “principal source” of nitrogen oxide (NOx) emissions.
ClientEarth lawyer Alan Andrews said the Supreme Court ruling will “force the Government to finally take this issue seriously and come up with an urgent plan to rid our towns and cities of cancer-causing diesel fumes”.
A Defra spokeswoman said plans for measures to tackle air pollution from vehicles were under way, but it was too early to announce what form they will take. However, they would make the UK compliant “as soon as possible”.
Defra refused to comment when asked if those measures included incorporating NOx emissions into vehicle taxation, or if diesel congestion charge zones or ultra-low emission zones would be introduced across the UK.
The BVRLA has suggested the Government could introduce more ultra-low emission zones (ULEZ) and adapt the taxation system to incentivise the purchase of low-NOx Euro 6 diesel vehicles. The additional 3% charge to company car benefit-in-kind rates for diesel vehicles is already due to be dropped in April next year.
BVRLA chief executive Gerry Keaney has scheduled a meeting with Stewart to make sure the leasing and rental industry is represented before plans are submitted.
ACFO chairman John Pryor hopes any measures or potential changes to the company car taxation system would not introduce confusion or increase administration burdens, but said “whatever happens, the industry will adapt”.
He added: “If there are changes to the taxation system to reflect NO2 emissions, we would expect the Government to give fleets time based on operating cycles to prepare.”
Last July, the Government’s updated estimates on air pollution targets found just five of 43 cities, towns and zones in the UK would meet European targets for NOx levels by the end of this year as required. Under current projections, some areas of the UK – including Greater London, the West Midlands and West Yorkshire – will not meet targets by 2030.
As a result, these areas are most likely to be targeted for the most drastic action.
The European Commission limit for NO2 is 40 micrograms per cubic metre of air. In 2015, it is projected that the Greater London area will hit 107 micrograms, according to Defra. By 2020, this figure is expected to fall to 79.
A Defra spokeswoman said the organisation will meet the December 31 deadline to submit plans. If they are not delivered on time, the UK risks being fined by Brussels.
Defra said air quality has improved “significantly” in recent years and average roadside concentrations of NO2 levels have fallen by 15% since 2010. The department also said NO2 emissions have more than halved in the 20 years from 1992 to 2012.
Hitachi Capital Vehicle Solutions' head of operations Tim Bowden said: “Any change to company car taxation needs to be well sign-posted by the Government and planned in conjunction with the leasing industry.
“It would be totally unfair to drivers who have selected a vehicle based upon the existing CO2 emission-based regime, which has supported a significant reduction in CO2 emissions, to then be penalised for that decision with any car taxation change that is applied retrospectively.”
Bowden said Hitachi Capital would recommend an incentive to encourage earlier uptake of Euro 6 cars, alongside continued support for other ultra-low emission vehicles.
“While all new cars from September 2015 will need to comply with Euro 6 standards, some incentive for early adoption of a Euro 6 car, rather than a retrospective penalty to an existing Euro 5 car, will encourage fleets to renew rather than extend,” he said.
Bowden believes Government action could extend beyond car taxation: “Knowing the impact the leasing industry can have on positively supporting changes in behaviour (as we have in stimulating the reductions in CO2 through the tax regime), we would encourage a re-introduction of the 100% first year writing down of allowances on ultra-low emission vehicles, making it more financially attractive to lease such a vehicle.”
Is Euro 6 the answer?
All new cars sold in the UK must have a Euro 6-compliant engine from September 2015.
Euro 6 diesel technology requires an engine to reduce NOx emissions to 0.08g/km. This compares with a target of 0.5g/km on Euro 3 diesel engines 14 years ago.
Bowden said there has been little tangible benefit to a driver until now. “In fact, some drivers will see a disadvantage if they have chosen a vehicle that requires AdBlue to be added in order for the vehicle to comply with Euro 6,” he said. “In such instances, Euro 6 has added more operating and maintenance costs compared to a comparative Euro 5 vehicle that may even have the same levels of CO2 and economy levels.”
Bowden believes that until beneficial car tax breaks are introduced for Euro 6, the merits of a cleaner environment and improved air quality are the areas which need to be highlighted as merits of driving a Euro 6 car.
ALD Automotive AutoSolutions manager Helen Fisk is supportive of a taxation system change that includes NOx and particulates.
Fisk suggested manufacturers should be doing more to promote the benefits of the latest Euro 6 diesel technology, including its ability to reduce NO2 emissions.
She said: “There’s still much confusion about AdBlue and it’s important there’s a clear message to the industry about the need for it, the implications if the vehicle runs out of AdBlue and how often it might need to be topped up.”