Meet our new leasing experts, who in this first discussion, examine how new challenges such as Brexit, air quality and policy changes are affecting fleet managers
GreenFleet examines recent developments in the diesel and air quality debate and asks if the negativity surrounding this fuel is affecting vehicle choice for fleets and consumers
Diesel vehicles had a surge of popularity in 2001 when Vehicle Excise Duty was cut to encourage the purchase of low-carbon vehicles. However, it has since emerged that diesel produces four times more nitrogen dioxide and 22 times more particulates than petrol, and is now viewed as a major public health risk. In fact, poor air quality is said to cause 40,000 early deaths a year in the UK.
The UK has struggled to keep within EU limits on air pollution and has been required to draft air quality plans to address the issue.
However, the draft plans, which were released on 5 May, have been criticised for failing to adequately tackle the issue. As such, environmental law firm Client Earth is taking the UK government back to court, arguing that the consultation does not include measures which the government’s own technical data shows are the best way to bring down air pollution as soon as possible.
James Thornton, CEO of ClientEarth said: “We have found some major flaws. The law requires the final plan to bring air pollution down to legal levels in the shortest time possible. These flaws seriously jeopardise that timetable.
“These are plans for more plans, what we need are plans for action.”
Meanwhile co-leader of the Green Party, Caroline Lucas, has criticised the plan stating that the government is “standing idly by while Britain chokes” and called the plan “feeble”.
Sadiq Khan, Mayor of London also commented that the proposals are “toothless and woefully inadequate”.
The understanding of the impact that old diesels have on air quality has been made worse by the discovery that some manufacturers cheated their emissions data, with the so-called Volkswagen ‘dieselgate’ scandal leading to other manufacturers being investigated. A study last year by campaign group Transport & Environment (T&E) found not one brand complies with the latest Euro 6 air pollution limits when driven on the road.
Last month there were several more diesel stories in the headlines. Swedish manufacturer Volvo said it is likely to stop making new diesel engines, citing the cost of making engines compliant with ever higher anti-pollution standards as a reason for making the investment not worth it.
A report from an economist from Stanford University predicts that in the next eight years, there will be no more petrol or diesel cars, buses or trucks sold in the world, only electric vehicles – which will lead to a collapse of oil prices and the petrol and diesel industry.
Firing up the argument that diesels are toxic to the environment, a recent report by the University of York and the International Council on Clean Transportation has concluded that diesels are emitting up to 50 per cent more toxins than they should, if complying with pollution laws. They say this is down to “engine calibration, equipment failure, inadequate maintenance, and tampering by vehicle owners.”
For the report, researchers analysed data from 30 studies of vehicle emissions under real-world driving conditions around the world, according to The Telegraph. It was found that vehicles emitted 13.2 million tonnes of nitrogen oxide – 4.6 million more tonnes than the 8.6 million which is expected under laboratory test conditions.
The headlines and hype around diesel appear to be making an impact on consumers’ next choice of vehicle. Recent research from BuyaCar.co.uk has revealed that three out of five diesel owners are planning to choose a different fuel type – such as petrol, hybrid and electric powered cars – when they next change their car.
Forty-eight per cent of the 1,000 survey participants said that they currently own a diesel car and 40 per cent of those plan to buy another diesel.
However, of those who say they will change their engine type, 35 per cent said they plan to opt for a petrol vehicle, and 20 per cent said they are looking to a buy a hybrid model.
Five per cent are interested in switching to an electric vehicle.
Drivers who plan to ditch diesel typically cited the prospect of future charges as the reason, and almost half of them said they were also concerned about the environmental effects of diesels on air quality.
For the moment, diesels are still the preferred choice for fleets. However, Venson Automotive Solutions has recently said that fleet managers should “plan for a future with fewer diesel vehicles,” as the government reviews the way diesel vehicles are taxed, including possible changes to company car benefit-in-kind.
Diesel company cars incur an additional three per cent benefit-in-kind tax supplement up to a maximum of 37 per cent, which the government has previously said would remain in place until April 2021.
However, Venson says that national and international pressure for governments to take action to cut demand for diesel vehicles could see tax rises announced as soon as the Autumn Budget.
In April, the ExpertEye Fleet Industry Review was released into the latest status and views of the UK fleet marketplace. It revealed that more companies are putting petrol-engined cars back onto their fleet lists, or drivers are opting for petrol, and that respondents expect to see a reduction in diesel in the next two years, with electric, electric range-extended and hybrid engines gaining in popularity.
According to Shaun Barritt, CEO of Grosvenor Leasing, the ‘hysteria” surrounding ‘dirty diesels’ is not healthy for the fleet sector. He says: “Reading the headlines, the focus isn’t on portraying the benefits of everyone driving greener cars. Instead, the language is of doom and gloom about dirty diesels, scrappage schemes and the pollution they’re causing. We need a sense of calm, because if the ‘dirty diesel’ phrase gets into people’s minds the likelihood is it will impact their resale values. This could then lead to the leasing sector suffering losses against forecasted residual values, and the contract hire companies who are pivotal to the UK automotive sector will subsequently have less to invest in green initiatives.”
To counteract the negativity on diesel at the moment, the SMMT gathered a display of Euro-6 commercial, utility, and emergency response vehicles at the opening of the Commercial Vehicle Show in April. This was to demonstrate that commercial vehicles – which are mainly dependent on diesel – play a huge role in the UK economy, our safety, and daily lives. They argue that new diesel vehicles are the cleanest in history and play a critical part in improving air quality.
Mike Hawes, SMMT chief executive, said: “Commercial vehicles play an essential but often overlooked role in keeping Britain functioning, performing jobs and transporting vital goods and services that we all rely on every day. This sector has never been so important to the UK economy – and to British jobs – and diesel’s role in powering these vital vehicles should not be downplayed.
Hawes continued: “Nearly all our commercial vehicles are driven by diesel, and thanks to heavy investment by industry to develop world-leading low emission technology, the latest Euro VI CVs on our roads today are the cleanest and safest ever.”
The government’s recent draft air quality strategy highlights that Euro 6 diesels will not face any penalty charges anywhere in the UK.
The government’s draft air quality plans include the proposal for a diesel car scrappage scheme, which could take 15,000 diesel and older petrol cars off the road.
The plan also mentions that “appropriate tax treatment for diesel vehicles” is considered, and that car fuel efficiency labels should make it apparent to buyers how polluting their vehicle is.
The strategy also suggests that the government will give local authorities the opportunity find alternatives to the Clean Air Zones that are ‘non-charging.’
The consultation closed on 8 June, and once the government reshuffle has completed, it should become clearer what the next steps will be.