The government’s decision to end the sale of petrol and diesel cars and vans by 2040 has caused a stir in most industries, but it is just the beginning of a series of plans to clean up the UK’s contribution to global pollution.

The plans will require billions of pounds in manufacturing and infrastructure investment and will likely lead to a higher demand for asset finance.

With the UK named as one of 17 EU countries that are missing targets for nitrogen oxide output, the Clean Air Quality Plan outlines how local councils must take action at hotspots around the country to reduce pollution and comply with EU limits in a short space of time.

The government will provide £255 million to implement the plan, and local authorities will be able to bid for money from the Clean Air Fund to support improvements that will reduce the need for restriction on offending vehicles.

This could include road layout changes and upgrading vehicle fleets.

Environment Secretary Michael Gove said: “[The] plan sets out how we will work with local authorities to tackle the effects of roadside pollution caused by dirty diesels, in particular nitrogen dioxide.

“This is one element of the government’s £3 billion programme to clean up the air and reduce vehicle emissions.”

Transport Secretary, Chris Grayling also announced a £100m fund for new low emission busses and the retrofitting of older buses with cleaner engines, and van drivers may have the right to use heavier vehicles without additional licenses, if they are electric or gas-powered.

How much will it cost?

It’s thought that living within a zero carbon transport system will require in excess of £200 billion of investment in manufacturing, infrastructure and, inevitably, new power stations to meet the increased demand for electricity.

The government’s plan:

  • £1bn – Ultra low emissions vehicles. This includes investing nearly £100m in the UK’s charging infrastructure and funding the plug-in car and plug-in van grant schemes.
  • £290m – National Productivity Investment Fund for reducing transport emissions, including £100 million for new buses and retrofitted technology, £50 million for a plug-in taxi programme and £80 million for ultra-low emission vehicle charging infrastructure.
  • £11m – Air Quality Grant. £11 million under Air Quality Grant scheme to help local authorities improve air quality.
  • £89m – Green Bus Fund. The UK government has invested a total of almost £89 million via the Green Bus Fund to help bus companies and local authorities in England to put more than 1200 new low carbon buses on the roads.
  • £27m – Clean Bus Technology Fund and Clean Vehicle Technology Fund. Since 2013, the government has awarded more than £27 million to retrofit emissions reduction technology to nearly 3,000 of the oldest vehicles (mainly buses) including through the Clean Bus Technology Fund & Clean Vehicle Technology Fund.
  • £1.2bn – Cycling and walking. The Cycling and Walking Investment Strategy identifies £1.2 billion which may be invested in cycling and walking from 2016-2021.
  • £100m – National road network. Through the Road Investment Strategy, the UK Government has allocated a ring-fenced £100 million for an Air Quality Fund available through to 2021 for Highways England to help improve air quality on its network.

To find out how you can prepare your business for the upcoming changes and increase in demand, contact one of our business development managers.

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