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Vehicle emissions: why should my business care?

With climate change sitting firmly at the top of the global political agenda, it’s never been more important for businesses to take a close look at their own carbon footprint, particularly when it comes to the company vehicle fleet.

What can my business do about vehicle emissions?

Air pollution and poor air quality are considered by the Government to be among the largest environmental risks to public health in the UK. Vulnerable groups, such as children and the elderly, are particularly at risk and air pollutants can cause significant health problems.

And whilst there are many things that contribute to air pollution such as power stations and industry, it’s estimated that around 80% of nitrous oxide emissions at the roadside come from cars, vans and other vehicles.

So, thinking about the different emissions produced by your company’s vehicles and how you can reduce them has to be the right thing to do. But it’s not just about being seen to do the right thing. It’s a question of corporate responsibility, company reputation and trust. After all, most people want to work for ethical companies and your customers want to do business with companies that they can believe in.

But we also know that, at the end of the day, running a business is about the bottom line. After all, without a profit, there won’t be a business to run. The good news is that reducing the environmental impact of your company fleet doesn’t have to break the bank and it could, in fact, help you to save money in the long run.

We know that every business is different and that means that every business has to consider different things when deciding on a company car policy, so this guide is designed to highlight some of the main points to think about.

Diesel vs Petrol

It’s fair to say that diesel hasn’t had a great press over the last few years and although it’s still the dominant fuel type in the fleet industry it now only accounts for approximately 32% of the overall UK new car market.

  • Diesel engines undoubtedly have worse real-life air quality emissions than petrol cars which, when combined with the car market shift towards diesel over the last 20 years and the overall growth in vehicle numbers in the UK, has been a primary reason for the air pollution problems being experienced today.
  • However, it is important to note that new diesel engines are significantly cleaner than they have ever been.
  • Diesel vehicles are still generally more fuel-efficient which results in a lower running cost, although this is to some extent mitigated by the higher pump price of diesel.

From a company car tax perspective, the improvement in CO2 emissions of petrol engines and their lower P11d values, coupled with the 4% diesel tax supplement (for diesel cars that do not meet the RDE2 criteria) means that in many cases the petrol model currently has a cheaper BiK and Class 1A National Insurance than the equivalent diesel.

The potential introduction of Clean Air Zones (CAZs) in towns and cities across the UK over the next few years is causing fleets to question the future viability of diesel. However, from a new vehicle perspective, there is in reality very little to worry about as all new cars and LCVs are Euro 6 and therefore comply with current CAZ criteria. 

There is no right or wrong answer as to whether petrol or diesel is right for your business and it is very much dependent on the individual driver and the chosen vehicle. That being said, it is important to remember that the use of Whole Life Costs (WLC) within a company car choice list structure (that incorporates a fuel cost element) by default ensures that the most cost-effective car is chosen irrespective of whether it is petrol or diesel.

To find out more about the implications of CAZ, download Arval’s Clean Air Zone Guide below. 

Car exhaust

What’s the best fuel option for my business?

Choosing an electric or hybrid vehicle for your business is a much more viable option these days. Use Arval's interactive calculator to work out the right vehicle technology for you. 

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Car refuelling

Electric and hybrid vehicles

Electric vehicle technology has moved ahead rapidly in recent years, with increases in car and van range, reduced charging times and lower prices. This means, for the first time, that whilst many fleets now have a viable alternative to petrol and diesel the different electrified options can be confusing.

The number of electrified cars has been steadily growing over recent years; however, things are changing very fast. Most car manufacturers will be increasingly offering a variety of technologies across their model range over the next few years.

For those looking for a van the choice has been limited to a few small electric vans until relatively recently; larger electric vans are just starting to come to market and it is likely that PHEVs will also feature in the near future so whilst there is less choice the situation is improving.

Speak to an Arval advisor to discuss your options

It’s fair to say that when it comes to company cars, there is no “one size fits all” solution. What works for one business won’t work for others. For further information, or if you have questions that haven’t been addressed here, then why not speak to one of the Arval team who’ll be more than happy to help.

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Arval

Arval UK is a leading provider of vehicle leasing and fleet management solutions for businesses of all sizes. We’re here to help make sourcing and running business vehicles easy.

Based in Swindon for over 40 years, we lease cars and vans. Any make or model, we can help you find the vehicle that’s right for you. But that’s not where our works ends, we support millions of journeys each year through products like servicing and maintenance, breakdown assistance and insured vehicles.

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