Fred Groves and George Mclellan provide their views on the recent DfT consultation into phasing out petrol & diesel vehicles by 2030.
On 24 December 2024, the UK government Department for Transport (“the DfT”) commenced a new “fast-track” consultation titled ‘Phasing out the sale of new petrol and diesel cars from 2030 and Support for the Zero Emission Transition’ (“the Consultation”).
The Consultation is “open”, meaning that any individual or organisation may respond to it by completing and submitting the Response Form available on the DfT website.
In publishing the Consultation paper, the DfT stated:
“This consultation seeks views on delivering the commitment to end the sale of new cars powered solely by internal combustion engines by 2030 and supporting the UK’s transition to zero emissions vehicles.
“The consultation is split into 2 parts… Part 1 is about phasing out sales of new petrol and diesel cars from 2030 and supporting zero emission transition… The second part of this consultation is about the the ZEV Mandate [sic], delivered through the vehicle emissions trading schemes (VETs).”
The Consultation paper confirms that:
“All new cars and vans will need to be 100% zero emission by 2035. And no new petrol or diesel cars will be sold after 2030.”
“We are seeking views on what types of cars could be sold from 2030 onwards, which are not fully zero-emission including hybrids. In 2035, all car sales will be pure-electric vehicles, in line with commitments made by the previous government and phase out dates set elsewhere in Europe.”
Deadline for responses
The Consultation closes at 23:59 on 18 February 2025. The DfT requires that all Response Forms be submitted before that time.
Respondents, therefore, have only six weeks left in which to submit Response Forms and/or to contact the DfT about the Consultation before it closes.
Background
Having initially planned for a phase-out date of 2030 for petrol and diesel cars, the previous (Conservative) UK government announced on 20 September 2023 that it would:
“Move back the ban on the sale of new petrol and diesel cars by five years, so all sales of new cars from 2035 will be zero emission.”
Following the conclusion of a previous Zero Emission Vehicle (“ZEV”) consultation process in late 2023, the previous UK government enacted the ZEV Mandate. As summarised in the Consultation Paper:
“The [ZEV] Mandate is implemented through the Vehicle Emissions Trading Schemes Order 2023 (VETS) and sets out the percentage of new cars and vans that must be zero emission each year.”
“[Following the] recent extension [of the ZEV Mandate] to cover the entirety of the United Kingdom from 2025, 80% of all new cars, and 70% of all new vans are already required to be zero emission from 2030.”
The 2024 ‘Change’ Manifesto of the Labour Party (at that time, the Official Opposition) signalled a significant shift in policy intentions, stating:
“…Labour will support the transition to electric vehicles by accelerating the roll out of charge points, giving certainty to manufacturers by restoring the phase-out date of 2030 for new cars with internal combustion engines…”
The Autumn Budget of 30 October 2024 confirmed that:
“The [Labour] government has committed to phasing out new cars that rely solely on internal combustion engines by 2030 and that from 2035 all new cars and vans sold in the UK will be zero emission.”
On 26 November 2024, the BBC reported that:
“The owner of Vauxhall has announced plans to close its van-making factory in Luton, putting about 1,100 jobs at risk… Rules imposed to speed up the transition to electric vehicles (EV) in the UK partly drove the decision, the firm said.”
“The Society of Motor Manufacturers and Traders (SMMT) said weak demand for EVs and the requirement to fulfill sales quotas would cost carmakers £6 billion in 2024 alone, “with the potential for devastating impacts on business viability and jobs”.”
“Nissan, which builds EVs at its plant in Sunderland, has said the EV sales rules are “undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment”.”
“Last week, its rival Ford announced it will cut 800 jobs in the UK over the next three years. It said this was partly because of weaker demand for EVs.”
The UK government announced on 28 November 2024 that it would:
“…shortly fast-track a consultation on our manifesto commitment to ending the sales of new pure petrol and diesel cars by 2030. We will use that consultation to engage with industry on the previous Government’s ZEV transition mandate, and the flexibilities in it, and we will welcome the industry’s feedback as we move forwards.”
Comment
The indications provided by the Consultation paper will be welcomed by many. Nevertheless, the Consultation paper raises a number of issues that may be of interest to the automotive industry and to the public alike.
These issues touch on matters of commercial importance, as well as on matters of public law.
- Responses deadline: Respondents are afforded a total of only 56 days (including public holidays), and now have only six weeks left, in which to submit Response Forms and/or to contact the DfT about the Consultation before it closes. Given the scope of the 17 Questions posed by the Consultation, potential respondents may be facing significant time pressure in which to consider the issues and to formulate their substantive responses before the deadline elapses.
- Small and micro volume manufacturers face particular challenges: The Consultation paper states:
“For all manufacturers of all sizes, new cars and vans must be 100% zero emission by 2035. However, in considering the requirements for small and micro volume manufacturers in this transition, we are seeking views on whether small and micro volume manufacturers should be subject to the 2030 requirements for cars and for vans.”
“Smaller volume manufacturers account for a very small proportion of overall UK vehicle sales, and limited amounts of CO₂. They play a vital role in supporting jobs, investment, skills and expertise within the UK automotive industry, and will play an important role in the transition to ZEVs.”
“While large volume, mass market vehicle manufacturers generally have the infrastructure and financial capability to invest in new technologies, by virtue of their size, small volume manufacturers may not, with few developing any form of hybrid product.”
Small volume manufacturers (between 1,000 and 2,499 annual registrations) and micro volume manufacturers (fewer than 1,000 annual registrations) may argue that, without sufficient support and allowances made by government – for example, through exemptions and/or derogations – their profitability and ability to commercially exploit their intellectual property may be imperiled.
Without such concessions, the future of this segment of the industry may face an existential risk.
- Various Consultation Questions are open-ended. By way of example, Question 13 (‘Are the time limits on the current flexibilities in the ZEV Mandate for cars and for vans still appropriate? Please explain your answer.’) allows respondents the opportunity to provide candid representations about the current ZEV Mandate and its impacts.
- The Consultation paper states that: “Vehicle manufacturers representing 67% of the UK’s new car market have already committed to being fully zero emission by 2030”, yet it does not explore the intentions and preparedness of the remaining 33% of vehicle manufacturers, nor does it provide a detailed exploration of the commercial limitations faced by that 33%.
- The Consultation paper states (emphasis added): “Whilst many vehicle manufacturers have committed to being fully ZEV from 2030 these options will present a significant change for manufacturers selling non-ZEV vehicles from 2030, imposing new costs of compliance to meet both the technology definition and to increase average vehicle efficiencies to meet any CO2 component.”
- The Consultation paper states that: “A form of technological definition to rule out [internal combustion engines] is required, and this definition could either allow both HEVs [i.e. hybrids] and PHEVs [i.e. plug-in hybrids] or PHEVs only”, yet it does not explore the feasibility of other combustion fuel sources (such as hydrogen, biofuels and synthetic fuels) as an alternative to conventional petrol and diesel fuels.
- The Consultation paper states that “…it is right that we push to fully decarbonise and clean up our vehicle fleet as quickly as possible…”, yet it does not provide a detailed justification for this expedited approach, nor does it present a thorough assessment of what “decarbonising… as quickly as possible” might mean for the automotive industry or its constituents.
Conclusion
Respondents have the opportunity to make meaningful contributions to the shaping of the government’s policy on the future of the automotive industry. However, as set out above, they will need to act quickly in order to make their voices heard.
The Consultation paper states:
“All are having to invest huge sums in developing new vehicles and new technologies at pace, at great cost, and in the face of new competitive and international headwinds. We should not pretend that this is easy or that it will happen without a government willing to listen and respond to global trends.”
Fred Groves is an Associate and George Mclellan is a Partner at Sharpe Pritchard LLP.
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