The “Worldwide-harmonised Light-duty Test Procedures” (WLTP) are a suite of laboratory tests designed to establish how efficiently, and cleanly, road vehicles use fuel. Developed by the United Nations Economic Commission for Europe, they have been a legal requirement for new models since September 2017 and will apply to all current models from September 2019.
“Real Driving Emissions” tests (RDE) are part of the same framework but examine vehicles outside the laboratory in realistic motoring scenarios. To ensure there is a level playing field, an expert fuel supplier provides a standardised quality-controlled fuel.
The purpose of the tests is to improve fuel economy and lower emissions like carbon monoxide, carbon dioxide, nitrogen oxides and particulates.
Buyers are unlikely to complain if actual fuel consumption begins to resemble those promised by manufacturers, but there are concerns the tests could lead to higher taxes. For companies running fleets of company cars or vans, the consequences could be costly.
How Taxes Could Be Affected?
Higher carbon dioxide emission figures can affect businesses through a host of direct and indirect taxation routes. These include Company Car Tax (CCT), First-Year Vehicle Excise Duty (VED), Corporation Tax Relief, the Plug-in Car Grant and London Congestion Charges. There is also a plan to create “Clean Air Zones” around the country, and the promised exemptions could be withdrawn on some vehicle models.
Since April 2018 diesel vehicles have been subject to higher VED rates than petrol vehicles with the same CO2 emissions, and their permitted nitrogen oxide levels were reduced from 0.18g/km to 0.08g/km in 2015 under Euro 6d standards. The new tests could disqualify some models, and a few could even be barred from entering clean-air zones altogether.
Both petrol and diesel vans that were previously protected from some of the emission penalties that apply to cars could face stiffer charges under plans to re-classify them into high- and low-emission VED classes. Vehicles currently defined as “Ultra Low Emission Vehicles” (ULEV) could lose allowances and exemptions if the tests reveal they are over the critical 75g/km threshold.
So How Do We Benefit From These Changes?
There need be no unpleasant tax surprises if companies pay attention to the new test results when making their future buying plans. On the other hand, the improved tests are a better guide to a vehicles engine performance and fuel economy. Armed with better information, businesses should be able to predict their fleet fuel costs as well as their taxes with more accuracy than was possible before. Just be aware of emissions thresholds or other performance criteria that could lose you allowances, and avoid those models that struggle to meet them.
The new rules also encourage manufacturers to work closer with a professional fuel supplier to improve the efficiency of their engines. In the long run that means lower fuel costs and a healthier workforce.