Lowering carbon emissions for vehicles has been on the agenda for some time now. In some markets like the UK, it is becoming an ever more pressing issue as the market draw nearer to the government’s cut-off points for the sale of gasoline, diesel and hybrid cars and vans. However, there is uncertainty as to when heavy goods vehicles (HGVs) will be able to make the transition to fully electric. It may take decades for traditional internal combustion engine (ICE) vehicles to be fully phased out, but the introduction of clean air zones (CAZs) could hasten the transition to an all-electric future.
CAZs will require both individuals and businesses to pay a charge for a vehicle before they enter a specified area. There are currently seven clean air zones across the UK alone, with an additional ‘Category C’ zone that launched in Manchester on 30th May 2022 that places charges on buses, coaches, taxis, private hire vehicles, heavy goods vehicles, vans, and minibuses. Meanwhile, light goods vehicles will be exempt until 2023 but at the time of writing this is currently subject to review. These charges add to the steadily increasing prices of fuel, as well as congestion zones and toll roads, meaning that many companies could well be feeling the squeeze, as well as a dent to their profit margins.
How do CAZs work?
Unfortunately, there is no set system, even within the UK, and CAZs having varying rules across different countries and cities. For example, driving a van from London to Birmingham would mean having to interact with both London’s Ultra Low Emission Zone and Congestion Charge as well as Birmingham’s own CAZ. If a driver forgets to pay even one of these, businesses risk a potential three-figure fine. Another pain point for fleets to consider is that each payment lasts until 12pm that day, so if a driver enters a CAZ at 11.59pm and leaves at 12.01am then their organisation will be liable for two days.
Usually, drivers and fleets have a 12 day window—six days before and six days after—to pay a fee, via the UK government’s Clean Air Zone website. The zones themselves will be clearly marked, eliminating the danger of entering them by mistake, however, sat nav systems might not notify a driver, meaning that it is often too late, and the route becomes unavoidable. There are, however, apps (including Waze) that help drivers avoid CAZs.
Businesses can create accounts with the government and submit the registration of their vehicles to check whether they are subject to CAZ charges and pay charges online. They can also add ten users to manage an account. This is currently the most convenient way for small to mid-size fleets to manage CAZ charges, though it remains to be seen whether they will be adequate for much larger fleets.
Minimising or avoiding charges
It goes without saying that businesses should never avoid charges through dishonest means, but it is important to remember that even if a fleet includes ICE vehicles, an operator may not be charged if they can meet emissions standards. Currently, HGVs must meet the Euro VI emissions standard, based on how much carbon monoxide, hydrocarbon, nitrogen oxide and other chemicals they emit. This standard is Euro 6 for diesel and Euro 4 for gasoline cars and vans. Many fleet vehicles may already pass this standard, and therefore for the time a logistics provider may not be affected.
Electric vehicles are exempt, meaning that the initial costs involved in switching to them may pay off sooner than originally planned. To avoid charges for HGVs, using hydrogen, hybrid fuel or an ultra-efficient modern diesel engine will also allow an operator to skip CAZ charges.
There is little to worry about if a company operates within a relatively small area that doesn’t have a clean air zone in place, but if it works nationally then fleet managers could find their vehicles frequently enter CAZs and incur charges. In order to avoid entering CAZs and incurring charges, fleet operators will have to plan routes carefully, use alternative methods, such as LGVs and stay up to date with rules.
Counterbalancing costs
Certain charges due to CAZ routes will be unavoidable, but by using a fuel card, fleets will be able to make savings by purchasing fuel more efficiently and reducing the administrative burden of processing expense claims. This could ultimately free up enough capital to offset the cost of CAZ charges today, as well as future zones that could be added in the future.
About the author: Paul Holland is Managing Director for UK Fuel at FLEETCOR.
