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Diesel Car Scrappage Scheme

The Ultra-Low Emission Zone (ULEZ) currently operates within Central London but, from October 2021 it will expand to an area bounded by the A406 North Circular Road and the A205 South Circular Road.

Over 275,000 diesel van drivers are already affected by ULEZ charges according to one estimate.

Diesel scrappage

Diesel vans that fail to comply with the latest set of European emission standards, known as ‘Euro 6’, receive a £12.50 daily charge for vehicles up to and including 3.5 tonnes.

However, Mayor of London Sadiq Khan has provided a useful fillip for the motor trade by incentivising owners of older higher emission diesel vehicles, to buy new greener alternatives.

The diesel van scrappage scheme was originally introduced by Transport for London back in February 2019, but has subsequently been modified to allow small businesses with up to 50 employees to scrap up to three vans apiece, offering up to £9,500 towards the cost of each replacement vehicle.

Any non-compliant diesel van entering the ULEZ area at least twice a week for six months prior to the introduction of the scrappage scheme is eligible for a grant of £7,000, regardless of where the vehicle is based.

Alternatively, a similar van operated by a company in Greater London and owned by the same company for at least twelve months is also eligible for a grant of £7,000 against the cost of a Euro 6-compliant replacement vehicle, regardless of the number of times the original van entered the ULEZ.

Last, and by no means least, eligible diesel vans meeting the criteria already described in this article are eligible for an additional grant of £2,500 towards the running costs, including the cost of an appropriate insurance policy if replaced with a zero-emission electric van.

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Unsurprisingly, the Transport for London scheme, which is worth £23 million, requires a lengthy application and approval process, plus upfront payment by companies for the new vehicles.

This may account, at least in part, for the fact that just 10% (£2.3 million) of the fund was spent in its first year. Nevertheless, Transport for London is expected to announce a similar scheme for drivers of new and used cars in the near future, with the scheme to be further extended to include heavy good vehicles and coaches later this year.

The efforts to rid the capital city of its most polluting vehicles show no signs of letting up.

Formerly a Labour member of Parliament for Tooting, Sadiq Khan has called on the Government ‘to match our levels of ambition and fund a national scrappage scheme, adding that such as scheme ‘is the cost-effective way to deliver significant emission reductions while reducing the economic impact on those most affected’.

Prime Minister Boris Johnson did call for a scrappage scheme whilst he was Mayor of London, but he has yet to make any spending commitment on a national scale.