A UK government drive to end the sale of conventional petrol and diesel cars and vans by 2040 will require billions of pounds in manufacturing and infrastructure investment that could lead to greater demand for asset finance.
The UK Plan for Tackling Roadside Nitrogen Dioxide Concentrations produced by the government also outlines how local councils with the worst levels of air pollution at busy road junctions and hotspots must take robust action. This will also require substantial infrastructure investment.
The government's announcement focuses on delivering nitrogen dioxide (NO2) reductions to comply with EU limits at the roadside in the shortest amount of time.
The UK is one of 17 EU countries breaching annual targets for nitrogen dioxide. Analysis of more 1,800 of Britain’s major roads show that 81 are due to breach legal pollution limits for NO2, with 33 of these outside of London.
To accelerate action, local areas will be asked to produce initial plans within eight months and final plans by the end of next year.
The Government will help towns and cities by providing £255 million to implement their plans, in addition to the £2.7 billion it is already investing.
Local authorities will be able to bid for money from a new Clean Air Fund to support improvements which will reduce the need for restrictions on polluting vehicles.
This could include changing road layouts, removing traffic lights and speed humps, or upgrading bus fleets.
The government will also issue a consultation in the autumn to gather views on measures to support motorists, residents and businesses affected by local plans - such as retrofitting emission control technologies, subsidised car club memberships, exemptions from any vehicle restrictions for zero-emission capable vehicles, or a targeted scrappage scheme for car and van drivers.
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.”
Next year, the government will publish its comprehensive Clean Air Strategy, setting out how it will address all forms of pollution in the country.
Transport Secretary Chris Grayling said: “We are determined to deliver a green revolution in transport and reduce pollution in our towns and cities.
“We are taking bold action and want nearly every car and van on UK roads to be zero emission by 2050, which is why we’ve committed to investing more than £600m in the development, manufacture and use of ultra-low emission vehicles by 2020.”
He announced a £100m fund for new low emission buses and retrofitting older buses with cleaner engines.
Proposals have also been put forward for van drivers to have the right to use heavier vehicles if they are electric or gas-powered, without requiring additional licences, making it easier for businesses to opt for cleaner commercial vehicles.
The Government said local authorities should exhaust other options before opting to impose charging schemes, such as congestion or low emission zones.
Any restrictions or charging on polluting vehicles should be time-limited and lifted as soon as air pollution is within legal limits and the risk of future breaches has passed.
Experts have suggested that delivering a truly zero carbon transport system would require more than £200 billion of investment in manufacturing, infrastructure and new power stations to meet increased demand for electricity to power zero-emission cars.
Environmental campaigners have welcomed the focus on reducing emissions, but say the pace of change is too slow, as the impact of any initiatives will not be felt for decades, particularly as tens of millions of older diesel and petrol vehicles will remain in use after new vehicle bans come into force.
Green investment – government's £2.7bn drive for clean air
- £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 which includes £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.