Alphabet head of sales development Clive Buhagiar says that the imperative of cleaner air and more efficient fuels is a sustainability issue for fleet lessors

While the UK’s air quality has improved significantly in recent years, with nitrogen oxide (NOx) emissions falling by 38% between 2005 and 2013, there’s no escaping the fact that EU emission limits are still being breached in some urban areas.

To help tackle the issue of air pollution levels and to bring the UK into legal compliance with EU legislation, the Chancellor of the Exchequer’s recent Autumn Statement highlighted the government’s clear focus on building a more sustainable, environmentally conscious Britain.

With air quality near the top of the political agenda for 2016, what changes should organisations and business expect and prepare for this year and beyond?

Cleaning up its emissions act

The government recently announced plans to defer until 2021 the removal of the 3% diesel penalty for benefit-in-kind tax – due to be abolished this April. This news was a blow for fleets and company car drivers after the Chancellor had originally pledged in 2012 to remove the levy, marking a departure from the welcome practice of giving businesses sufficient forewarning to manage taxation changes within the vehicle life cycle. In the Autumn Statement, delays on changes to the EU emissions tests were blamed for the delay of the removal of the diesel supplement from company cars until 2021.

But already from September last year significant change has taken place with the most stringent vehicle emissions limits yet to be introduced in the UK market. From 1 September 2015 all new petrol and diesel cars have had to comply with new Euro 6 standards which mandated a 56% cut in diesel NOx emissions compared with the previous Euro 5 version introduced in 2011. Comparing Euro 6 with Euro 1 standards introduced in 1993, diesel emissions over that time have been cut by 92% for NOx and 96% for particulate matter.

According to the European Environment Agency’s Emissions Inventory Report in 2014, the UK’s overall NOx emissions reduced by 63% between 1990 and 2012 – more than any other EU member state except the Czech Republic – but clearly there’s still more to do in the UK and the other 21 member states currently exceeding the EU annual average limit for NO2.

Transition to new fleets

Working towards an effectively zero-emissions policy by 2050, the introduction of clean air zones in five UK cities by 2020 – Birmingham, Leeds, Nottingham, Derby and Southampton – as well as the ultra low emission zone in London, presents a great opportunity for rental and leasing companies to accelerate the uptake of ultra low emission vehicles (ULEVs) with those operating older, more polluting models.

Particularly, with the new plug-in grant qualification formula coming into effect this month and £600m committed in the budget to enhance air quality over the next five years, the desire for the corporate sector to drive demand shows a progressive outlook on the future of mobility with ULEVs at the centre. The new plug-in grant formula adds an additional level of complexity for fleet decision-makers and their systems, but its focus on both range and CO2 is welcome in that it differentiates those vehicles which can practicably be used in low or zero-emission driving mode.

While the primary purpose is to improve air pollution levels, a secondary but significant benefit of incorporating electric and hybrid vehicles into a business fleet is, of course, the reduction in both carbon output and cost expenditure on fuel.
Considering the growth in EV popularity, the transition to cleaner fleets also helps frame businesses as forward-thinking and innovative, an attractive proposition for both potential customers and employees alike.

Supporter of greener mobility solutions, urban delivery specialist, Gnewt Cargo, is a real example of how successful EV adoption can be.

By adding 55 all-electric vehicles to its fleet, the company’s deliveries in London have now increased from 500 to 5,000 a day, on behalf of customer myHermes, the second-largest home delivery service in the UK. Increasing its number of electric-powered deliveries will save myHermes an estimated 122 tonnes of carbon each year in direct emissions, not including the additional carbon emissions produced from extracting, refining and transporting the fuel, which could add another 20% to the overall figure.

What’s next?

If the UK wants to accelerate the uptake of cleaner transport technologies for public and commercial fleets with electric, hybrid and hydrogen solutions, more needs to be done to de-mystify and support perceptions around the suitability of alternative fuels for businesses.

While it’s promising that over 60% of fleets over 500 vehicles include some EVs, uncertainties currently remain among fleet decision-makers about its suitability for long distances and the lack of charging points.

To gain full support from the corporate sector, more needs to be done by the government, automotive industry and local authorities to generate greater awareness of the financial and environmental benefits of electric vehicles.

Continuing to improve the charging infrastructure nationwide – at the workplace, at home and on the move – is also crucial to successful adoption. While educating employers is important, appealing to the employees and wider driving community is also essential.

As we work towards building an even cleaner and greener future, along with expectations for the corporate sector to focus more on efficient driving, sustainable mobility solutions are firmly on the agenda for 2016 and beyond.

Clive Buhagiar is head of sales development at Alphabet