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Artic circleMay 2008

Controls on vehicle emissions are biting hard in London, with dirty diesels the new villains in the fight against climate change. So what will higher emission charges on lorries mean for the construction industry? James Parker investigates.

Transport and the construction industry are linked inseparably. One can't function without the other. Whether it be for building offices, homes or supermarkets, transporting materials is a necessary activity.

However, road transport emits significant amounts of carbon dioxide, so it's no surprise that it's coming under the government's eco-gaze. London has been at the forefront of such schemes with the introduction of the congestion charging zone in 2003 - the first in a capital city.

Since 4 February 2008, diesel-engined vehicles in London have faced another charging scheme - the Low Emission Zone (LEZ). The LEZ operates 24 hours a day on every day of the year in an area that covers virtually everywhere within Greater London.

The zone does not apply to cars, motorbikes or small vans (at least those under 1.2 tonnes). Those diesel-engined vehicles that are not exempt have to pay a daily charge for the privilege of driving in the Greater London Authority area. This has started with lorries over 12 tonnes, followed from July 2008 by lorries over 3.5 tonnes, and buses and coaches.

Finally, from October 2010, large vans and minibuses will also be included.

The initial charges are £200 per day for lorries, buses, coaches and other vehicles over 3.5 tonnes, with minibuses, large vans and all other vehicles under 3.5 tonnes being charged £100. However, vehicles that meet the required emissions standards (initially Euro III of the engine emissions standard) will be exempt from the charge if they are registered.

While the LEZ may improve air quality in London, which is the worst in the UK, these charges could obviously have significant financial effects on the construction industry, particularly as there are going to be major works in the next five years for the Olympic games.

Which begs the question: have the LEZ charges been included in contractors' budgets?

Operators of non-exempt vehicles have two choices - either pay the charge or update their fleet. Let's take an example construction site that BSRIA's productivity experts have studied.

A building in central London of 26,000 m2 had an average of 5.8 lorry movements a day from delivery and specialist contractors' lorries of over 3.5 tonnes. Under the new LEZ this level of movement with vehicles outside the emissions limits would cost on average an extra £1,160 a day. This could easily add up to an extra £23,000 a month and at least £250,000 to that project.

It was recently reported that there is a potential shortage of new vehicles that meet the required standards. Even those firms that have gone for the retrofit option have had problems finding people to undertake the retrofits due to the number of vehicles up for adaption. In January 2008 the Freight Transport Association (FTA) predicted that about 10,000 vehicles were still not compliant.

In any case the FTA feels that the LEZ is not needed. Its Head of Policy for London, Gordon Telling, said: "Londoners are entitled to cleaner air and all of us operating vehicles, whether they are cars, buses, taxis, or commercial vehicles, should do all we can to reduce emissions. However, this scheme achieves very little that would not have been achieved anyway as the result of enhanced EU engine standards.

"This means that Londoners, and lorry operators, are having to pay an enormous price - around a quarter of a billion pounds, £100 million of operator costs and £130 million of London taxpayers' money - for a trivial improvement in air quality," added Telling. "The biggest pollution from traffic in London comes from cars, but the scheme does not apply to them."

So is this sort of scheme the future of things to come across the UK or maybe even Europe? Well, low emission zones are springing up across Europe with 70 schemes already in place in countries such as the Netherlands, Germany, Italy and Sweden. Each works slightly differently, some building on existing schemes.

Restricting goods vehicle movements and road charging is nothing new on the continent. Restrictions on the use of trucks on Sundays and public holidays have existed in Germany since 1956. Similar restrictions also operate in Austria and Switzerland.

These three countries have all recently introduced tolls for trucks and buses on their autobahns, on top of the existing restrictions. The charges are based on the number of axles and the kilometres driven on the autobahn by the vehicle.

Each vehicle has a box that can be read by infrared or microwave sensors (depending on the country) on over-road gantries. The prepayment added to the card is then taken away at the correct rate, based on sensors in the road that count the number of axles. The technology is compatible between Germany, Austria and Switzerland. Engines with lower emissions get discounted rates.

The UK government has proposed road charging by the number of miles driven, with varying charges based on the type of road and the time of day. Would this benefit the construction industry, which relies so heavily on road transport? Or would it simply change the standard operating procedures? Would deliveries switch to the early hours of the morning to get a cheaper rate?

One thing that is guaranteed is that the cost of transporting goods can only rise.

For more information contact BSRIA:

Tel: +44 (0) 1344 465600