Micro-businesses and charities in London will be offered £6,000 to buy an electric van or £3,500 towards funding cleaner alternatives such as rental.

The van scrappage scheme, which opens today (Friday, February 22), aims to help micro-businesses and charities prepare for the 24-hour, seven-days-a week ultra-low emission zone (ULEZ) in central London from April 8.

The Government already offer grants to cover the capital cost of electric vans. These grants reduce the cost of an electric van by up to 20% or a maximum of £8,000.

Before any discounts are taken into account an electric Renault Kangoo 33kWh Business Van would cost £24,730, a Nissan e-NV200 Visia £27,400, a Renault Master ZE SWB Business Van £54,930, and a LDV EV80 Van £62,500.

The Mayor’s £23 million van scrappage scheme has been designed to complement the plug-in van grant and aims to help microbusinesses – defined as those with 10 or fewer employees – and registered charities who have vans and minibuses that do not comply with the new ULEZ standards.

Operators running vehicles that don’t meet the Euro 4 standard for petrol cars, vans, minibuses and other specialist vehicles and Euro 6 for diesel versions of these vehicles, will have to pay £12.50 a day to drive in central London from April 8.

To qualify for the van scrappage scheme, businesses and charities will have to be registered in London or have entered the existing Congestion Charging Zone (CCZ) 52 times in the past six months and provide a certificate of destruction for a non-compliant vehicle.

Options include:

• A payment of £6,000 to scrap a non-compliant van or minibus and help with running costs of a new electric vehicle.
• A payment of £3,500 to scrap a non-compliant van or minibus which can be used to: purchase a newer ULEZ compliant Euro 6 vehicle; access third-party offers from rental and sharing services across London, including Zipcar, Northgate Hire, Enterprise and Europcar; and support ongoing business operations.

The Mayor recently announced a further £25m to support low-income Londoners scrapping older cars, with further details to be announced later this year. This brings the total funding the Mayor has made available for his scrappage fund to £48m.

The Mayor of London, Sadiq Khan, said: “I am proud to today open this £23m scrappage scheme today to help enable micro-businesses and charities to scrap polluting vans and minibuses, and switch to cleaner vehicles. 

“The van scrappage scheme will be followed later this year with a £25 million fund to help lower-income households scrap polluting cars. 

“We need government ministers to help fund a national scrappage scheme targeted at cities across the UK that will support all motorists to ditch their polluting cars, and help clean our filthy air once and for all.” 

Zipcar UK says it will match fund businesses planning to scrap non-compliant vans in favour of an alternative to vehicle ownership. Worth up to £7,000, including £3,500 from the Mayor, the deal equates to more than 1,400 hours of driving with Zipcar UK in a car Monday to Friday, or 700 hours in a van. The offer also includes a ‘free for life’ Zipcar UK business account worth £99 a year.

Zipcar UK’s package will be available to eligible businesses who have been approved by TfL’s scrappage scheme.

Jonathan Hampson, general manager for Zipcar UK, said: “At Zipcar UK we support the roll-out of ULEZ, but we believe it needs to be delivered in a way that doesn’t disadvantage those who can least afford it, like small businesses for example.

“That’s why we’re delighted to announce that we’re supporting the Mayor’s diesel van scrappage scheme with a financial support package for businesses in partnership with the GLA/TfL. That way Zipcar UK can help enable this transition to ULEZ by giving businesses access to fully compliant vehicles that meet their van needs without needing to purchase or lease new vans.

“Hopefully it will also help tip the balance in favour of vehicle sharing rather than vehicle owning, which we believe is the way forward for London. We already work with 14,000 businesses in the UK and hope to partner with and support many more over the coming months.”

Northgate, meanwhile, will be offering a discount on van hires of 12 months or more. Kathleen Whittam, head of strategic accounts at Northgate Vehicle Hire, said: “We’re delighted to be supporting the ground-breaking scrappage scheme designed to help businesses run compliant vehicles, through offering an exclusive ‘scrappage scheme discount’ on our van hire solutions, alongside offers on our Euro 6 vans available for purchase. This will enable eligible businesses to keep moving forwards without downtime.”

Stuart Russell, specialist vehicle director at Europcar Mobility Group UK, which has also teamed up with the Mayor's scrappage scheme, told Fleet News that the scrappage scheme is a "great initiative" to help firms ensure the ULEZ does not have a negative impact on their business.

He explained: "Whilst the cash sum could be useful to go towards new vehicle acquisition, some businesses may decide to use those funds for other purposes. If they don’t want to face the financial outlay for a new vehicle or commit to a lengthy lease, van rental provides a genuine alternative."

Europcar is offering businesses participating in the scrappage scheme with a special discount to access vehicles that are fully compliant with the new ULEZ, available from locations in and around the perimeter of the capital.

Gerry Keaney, Chief Executive of British Vehicle Rental & Leasing Association (BVRLA), believes that vehicle rental, leasing and car club industry will play a vital role in delivering the transition to cleaner urban transport.

He said: “We are delighted to see some of our members stepping-up to pledge their own support for the Mayor’s scrappage scheme.

“This initiative will provide vital and timely assistance for SME’s that need to upgrade their vans ahead of the London ULEZ being introduced on 8th April.

“London has set an ambitious timeline for its clean air zone and the Mayor has recognised the fact that some businesses will need financial support in upgrading their vehicles.

“We welcome the leadership he has shown in calling for a national scrappage fund that can be used to help urban businesses and residents switch to cleaner vehicles or other modes of transport.”

With road transport responsible for around half of air pollutants, the Central London ULEZ aims to reduce toxic emissions in central London by around 45% by 2020, together with measures to clean up taxis and buses.

Operators can apply for the scheme online at www.tfl.gov.uk/scrappage-scheme.