A UK city is seeking asset finance partners to help in its multi-million pound drive to reduce roadside emissions.
Bath and North East Somerset Council is launching a financial support scheme to help businesses upgrade their vehicles as it prepares to launch a charging Clean Air Zone in the centre of Bath next year.
From late 2020, the local authority will charge all higher emission vehicles - except cars - to drive in the city centre as part of its plan to reduce high levels of nitrogen dioxide (NO2) by 2021 at the latest.
Daily charges would apply to pre-euro 6/VI diesel vehicles (typically more than four years old) and pre-euro 4/IV petrol vehicles (typically more than 13 years old).
It is proposing a £24.2 million interest-free loan service to help businesses upgrade their non-compliant commercial vehicles, which are typically diesel and operate on long replacement cycles, including vans, buses, coaches, lorries, taxis and private hire vehicles.
The council will cover the interest on the loan scheme via funds being requested from the government’s Clean Air Fund and is looking for asset finance partners to administer the programme.
The successful bidder will be required to provide all staff, technology, processes and procedures needed to process loan claims and determine eligibility. Suppliers will also be responsible for collecting instalment payments and debt recovery.
As part of the partnership, the council will market and promote the scheme and there will be no procuration fee payable by the successful bidder.
Ashley Beighton, Bath Clean Air Zone project manager, said: “We are introducing packages to mitigate the impact of the zone by helping people and companies to upgrade their vehicles so they are compliant.
“This is a significant opportunity for asset finance providers, which will also benefit the environment and the community.”
The council has issued a Prior Information Notice through the Official Journal of the EU (OJEU).
Beighton said: “We would like asset finance companies to discuss the proposals with us and how we might work together in future.”
Bath is one of several UK cities looking to introduce Clean Air Zones (CAZ) to meet emissions targets to improve air quality in urban areas.
Recently Birmingham, the UK’s second largest city with nearly 1 million inhabitants, received approval for a CAZ to start from next year, which will impose a charge of £8 for cars or vans and £50 for HGVs, coaches and buses if they exceed emission restrictions.
The government has allocated £38 million to support businesses and individuals in Birmingham with the transition to the new scheme.
London’s Ultra-Low Emission Zone now imposes a charge of £12.50 a day on vans that don’t meet its new emissions standard. For lorries, coaches and other large vehicles, the charge is £100 a day if they don’t meet the emissions requirements.
On average, 17,400 drivers a day paid to enter the zone in non-compliant vehicles in its first month of operation.
As the charges don’t apply to the newest, cleanest vehicles, there is an incentive for operators in all cities to renew their fleet vehicles or upgrade them by investing in aftermarket emissions reduction technology.
This creates two opportunities for asset finance providers; firstly, through the potential to engage more closely with current and potential customers by sharing advice and insight on the zones; and secondly by providing support and finance to enable companies to renew their vehicles in the most cost-effective way.
The future shape of the fleet market and opportunities for asset finance providers will be discussed at the annual International Asset Finance Network conference on June 13, in London.
For information, visit the event website or alternatively complete the form below to reserve a place.