Ultra Low Emission Zones (ULEZ) – what is the impact for your SME business?
In April, London launched its Ultra Low Emission Zone (ULEZ), meaning vehicles entering the zone will need to adhere to tighter exhaust emission standards (ULEZ standards) or pay an additional charge to drive within the central London zone.
The aim of the ULEZ is to minimise air pollution caused by exhaust fumes which contain harmful oxides of nitrogen (NOx) and particulates. The zone will see drivers of cars, vans and motorcycles that do not meet the required exhaust emissions standard having to pay a daily charge of £12.50 as they drive through central London. A higher charge of £100 is set to be put in place for heavier vehicles, including buses, coaches and lorries.
It can only be a positive for the communities of London to have cleaner air. However, if your business is operating in and around the ULEZ, it is essential that you take the necessary steps to assess what impact the legislation will have on your operations.
Measuring the business impact of ULEZ
Central London is home to around 23,000 SME organisations, many of which must make vital trips in and around the proposed ULEZ, which covers the same area as, although will not replace, the congestion charge. The impact the ULEZ has on your business will depend on the types of vehicle it uses to make the necessary trips.
The European emission standards are the benchmark by which vehicle emissions will be measured in the new ULEZ. These standards are outlined in a series of EU directives, setting out a progressive introduction of increasingly stringent standards.
For SME businesses, where stringent cost management is a daily business necessity, getting to grips with the rules and fees of the ULEZ is imperative if travelling into central London on a regular basis is unavoidable. We have outlined the following steps to ensure your fleet is compliant with the ULEZ standards, or if not, how you can minimise the fees:
1. ULEZ payments and reconciling expenses
You will need to decide the best way for your business to pay for entering the ULEZ. For example, whether the cost is incurred by employees and claimed back later or paid centrally by your business, particularly if most of the fleet is non-compliant.
There are two main ways to pay the ULEZ charge depending on the size of your fleet:
- For businesses with up to 5 vehicles, they can register a payment card (such as an Allstar Plus VISA Card) for AutoPay as a quick and convenient method. An employee can also pay as they go with any acceptable credit or debit card and claim the costs back.
- Similarly, for businesses with more than 5 vehicles, they need to register for FleetPay. This method only allows for Direct Debits to be set up.
- Alternatively, you could use an Allstar Plus Visa Card (whether PAYG or via AutoPay) to enable drivers to manage their own ULEZ payment in a quick and efficient way, providing businesses with better reconciliation of expenses.
2. Do your reading and use the right tools
If your business relies on the ULEZ for its operations, you will need to find out how compliant your current fleet of vehicles is.
3. What is the fuel mix of your fleet
When operating in the ULEZ, you should think about the fuel mix of your fleet, just as much as the vehicle type. Nearly all petrol cars registered since 2006 will be exempt from the ULEZ fee– including those that meet the Euro 5 and 6 emissions standards.
It might be feasible for businesses to find cheap petrol cars that are ULEZ compliant, although this may not be an option for those businesses that operate larger fleets. However, redeployment of petrol vehicles could be an option for operations in the central London area.
Alternatively, businesses could consider using Electric Vehicles for regular trips into central London given their exemption from the ULEZ charge. Most hybrids are also exempt from the charge too as they meet Euro 4,5 and 6 regulations.
4. Navigating around the ULEZ
It is important your business also plans its routes in order to complete essential trips. One option may be for company fleets to be fitted with tracking technology which can provide information on the best routes to take for a given journey, as well as routes to be avoided, that incur charges like the ULEZ fee.
If you’re regularly entering the ULEZ, re-deployment of vehicles for certain journeys could be an option. However, you should also consider putting a company-wide travel policy in place to ensure that employees are aware of the ULEZ rules and regulations and what is deemed as an acceptable business expense when it comes to paying the central London fee.
Now is the time to act
Eventually, ULEZ will have a far-reaching impact across Greater London and the rest of the UK. Although some may feel it won’t affect them given its geographical location or the low frequency of the visits they make to the capital, all businesses need to monitor the ULEZ in London. Similar schemes are planned for other major UK cities by 2020 – including Manchester and Birmingham .
As a business owner, you should see ULEZ, and the other schemes due to follow, as a real opportunity to future proof your organisation by assessing your environmental impact. In the shorter term at least, all businesses can make some small changes to their operations and play a part in shaping local infrastructure for the better.
To find out more about Allstar Business Solutions and how it can help your business in navigating the ULEZ, we’ve produced a fantastic guide to manage the low emission change here.
By Thore Vestergaard, SVP and MD of Allstar Business Solutions