In 2021, cars and vans accounted for 18% of the UK economy’s greenhouse gas emissions, making decarbonizing road transport a key focus as we transform the economy and end the impact of climate change. Zero emission vehicles (ZEVs) are the only route to tackling car and van emissions, as ZEVs emit no greenhouse gases at the exhaust and produce 81% less emissions than combustion engine counterparts over their lifetime, including manufacture. They are cheaper to own, require less maintenance, and will significantly benefit air quality by reducing harmful pollutant emissions.
The final consultation on a zero-emission vehicle (ZEV) mandate and carbon dioxide (CO2) emissions regulation for new cars and vans in the UK ran from March to May 2023. This response outlines the joint approach that the UK government, Welsh Government, Scottish Government, and the Department for Infrastructure (Northern Ireland) are taking to regulate the minimum pace of this transition, ensure sufficient supply of vehicles for consumers, and provide investment certainty for the deployment of supporting infrastructure.
The main reasons given by respondents for agreeing with a UK-wide regulatory framework included:
- Administrative efficiency – many noted that there are significant benefits of greater simplicity for both industry and consumers compared to a devolved scheme.
- Market stability – vehicle manufacturers expressed concern that separate devolved markets with different regulations would result in market distortions and add significant burdens to manufacturers and retailers, potentially increasing costs and reducing vehicle choice.
- It avoids uncertainty in EV infrastructure delivery, and the complexities of having a devolved scheme would disrupt business planning for EV charging infrastructure.
Most of those who responded, including mainly vehicle manufacturers, favored transferring over-compliance in the non-ZEV CO2 emissions standard to meeting ZEV mandate targets. Supporters cited the provision of additional flexibility in complying with targets and the reward of reducing fleet average CO2 emissions.
A sub-group of supporters caveated their view with proposed alterations to the flexibility. A common view was to change the offered conversion rate from a fixed rate based on the difference between the real-world CO2 emissions of an average non-ZEV car or van compared to a ZEV to something else. Suggested alternatives include:
- a metric based on WLTP/standard type-approval CO2 emissions
- a manufacturer-specific rate based on the average 2021 CO2 emission performance
- the UK’s fleet-wide CO2 emissions target
- Industry-wide fleet average CO2 emissions in 2021
Another widespread change proposed by respondents was to increase the cap on the number of allowances that could be transferred between non-ZEV CO2 regulation and the ZEV mandate, as manufacturers would still have to exceed their CO2 target, increasing the cap would still deliver CO2 savings. Respondents also cited the short lead-in time to the regulation and claimed that a higher cap would provide additional support to manufacturers struggling to comply.
In opposition, a small group of respondents from various sectors felt that it would be counterproductive to allow the transfer of allowances between non-ZEV CO2 emission regulation and the ZEV mandate as it would delay ZEV uptake.
The government will implement the proposed mechanism to transfer non-ZEV CO2 allowances to the ZEV mandate scheme. They recognize the need for manufacturers to transition to ZEVs flexibly and have, therefore, decided to increase the cap from 25% in 2024, 2025, and 2026 to 65% in 2024, 45% in 2025, and 25% in 2026. Many respondents, including several vehicle manufacturers, supported this change. All other components of this proposed mechanism will remain the same as in the consultation.