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60 second guide to London’s Ultra Low Emissions Zone charges

60 second guide to London’s Ultra Low Emissions Zone charges

Dealing with haulage and logistics firms on a day to day basis, our Vehicle finance team is well aware of how worried many of them are about being ready for the world’s first Ultra Low Emissions Zone (ULEZ) that is about to come into force in London.

As part of efforts to clean up the environment, the ULEZ is being created in Central London on April 8 and means that most vehicles will need to meet the new tighter exhaust emission “ULEZ” standards - or face a daily charge for driving in that area.

We’ve put together a 60 second guide to help companies navigate their way through the changes and advice on what they can do to avoid it.

London low emissions

Where is the ULEZ zone and what is the charge for larger vehicles not meeting the standard?

It will be in the same area as the Congestion Charge Zone in London.

The daily charge is in force 24 hours a day and is £100 for larger vehicles including lorries over 3.5 tonnes, buses and coaches over 5 tonnes, motorised horse boxes, refuse collection vehicles and breakdown and recovery vehicles.

If you don’t pay the charge, there’s a penalty charge of £1,000, which is reduced to £500 if paid within 14 days.

The ULEZ charge is on top of any Congestion Charge or Low Emission Zone (LEZ) charges that already apply to those roads.

What is the standard that needs to be met in ULEZ for large vehicles?

The ULEZ standards are Euro 6 for diesel cars, vans and minibuses and other specialist vehicles and Euro VI for lorries, buses and coaches and other specialist heavy vehicles.

The government has said newest lorries meeting Euro VI standards generate 80% less nitrogen oxide (NOx) emissions than older ones.

Lorries that meet the latest Euro VI emissions standards are eligible for a 10% reduction in the cost of the Heavy Goods Vehicle (HGV) levy as well from February this year, paying £900, while Euro V and older vehicles, which do not meet these emissions standards, will pay 20% more with a bill of £1,200.

The levy and details can be found at the gov.uk website here.

How do businesses feel about the ULEZ charges?

Many hauliers have voiced concerns that the charges are hitting businesses that are already hurting - with high fuel costs, a competitive industry and assets that cost a lot of money to buy and maintain. Some fear that these charges could put them out of business if they don’t have a strong plan on how to adapt to the changes, especially if other UK cities follow suit.

How can I avoid the extra charges?

Companies that need to deliver within central London have been looking at various options from outsourcing those deliveries to drivers whose vehicles meet the standards to delivering to the edge of the ULEZ area and then getting another company to do the final leg.

Another long-term option is for companies to invest now in upgrading their fleets to the required standards, which will make them huge savings in the long term against the ULEZ charges and levy fee.

Our team has been helping firms to spread out the costs to finance new “cleaner” lorries and commercial vans to help them prepare better for the future.

Will more cities be following London’s lead?

Clean Air Zone plans for Birmingham city centre have been approved by the government and will come into force in January 2020. The proposals are to bring in fees for older, high-polluting vehicles of £8 for cars and £50 for buses and HGVs driving in central Birmingham – or face a £150 fine for non-payment.

Exemptions have been agreed for some commercial vehicles with no charges for one year for commercial vehicles registered within the zone and for one year for commercial vehicles registered in Birmingham travelling into the zone with "an existing finance agreement beyond 2020". Grants to help hauliers are also being made available. For more details visit the Birmingham City Council website.

Leeds has a new Clean Air Zone that comes into effect from 6 January 2020, which will target non-compliant HGVs, buses, coaches, taxis and private hire.

Other cities also currently putting forward Clean Air Zone plans include Oxford and Derby for 2020 and Southampton, which includes introducing requirements for a minimum Euro 6 standard on all bus routes.

If you want to discuss how your business can upgrade its vehicles to meet new clean air standards, visit our fleet and logistics or commercial vehicles pages.

Paragon Banking Group PLC.  Registered in England number 2336032.  Registered office 51 Homer Road, Solihull, West Midlands  B91 3QJ.


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