While vehicle tax is mainly linked to carbon dioxide (CO2) emissions, air quality is of increasing concern.
Compared to similar-sized petrol engines, diesel engines have better fuel consumption and lower CO2 emissions but produce more particulate matter (soot, unburnt fuel droplets and other tiny particles) and harmful nitrogen oxides (NOx), affecting air quality.
However, the gap in fuel economy between petrol and diesel is narrowing, thanks to recent improvements in petrol engine technology and hybrid cars. Similarly, the gap between diesel and petrol vehicles’ real-world driving emissions of NOx and particulate matter has closed following the recent introduction of on-road testing, which became mandatory for vehicle manufacturers from September 2018 (Real Driving Emissions testing).
Drivers of diesel vehicles registered from April 2017 now pay a vehicle excise duty (VED) supplement for the first year of registration and a higher company car tax diesel supplement, unless they meet the Real Driving Emissions 2 (RDE2) standard. The RDE2 standard will be mandatory on all new cars from January 2021, however compliant models are already available.
Several major cities and towns are implementing clean air zones (CAZs), which will charge polluting vehicles more to enter certain areas. Some CAZs will only charge HGVs, taxis and buses, while others will include vans and cars.
Older diesel vehicles are more likely to be affected. For example, to comply with London’s ultra low emission zone (ULEZ), vehicles must emit less than 0.08g/km NOx. Euro 4 petrol engines (widely manufactured from 2005 onwards) meet this standard, whereas diesel engines must be Euro 6 to be compliant (for cars, these were widely manufactured after 2014).
As air quality plans are developed and released by local authorities, fleets should review how many existing vehicles are compliant (Euro 4 petrol or Euro 6 diesel) and factor in CAZ charges to running costs and vehicle replacement decisions. Non-compliant vehicles could also be reallocated to routes avoiding any CAZs.
Our air quality review helps fleets understand the implications of CAZs. All reviews are free of charge thanks to funding from the Department of Transport.