Real Driving Emissions Step 2 (RDE2) Standards
The one new measure that will be perhaps of most concern for fleet operators who run mainly diesel cars is the extra taxation that the Chancellor has announced from next April.
From April 6, 2018, the first year rate for Vehicle Excise Duty for all new diesel cars that do not meet the latest emissions standards will go up by one tax band, while the diesel Benefit-in-Kind surcharge of 3% will be increased to 4%.
These two new initiatives will apply to cars only, and not to vans, lorries or heavy goods vehicles.
Approximately 800,000 employees who drive a diesel company car will pay £70m more benefit-in-kind tax as a result of the increase in the diesel surcharge, according to the government.
This will not apply to next-generation clean diesels – those which are certified as meeting Euro 6 emissions limits in real driving conditions, known as Real Driving Emissions Step 2 (RDE2) standards, under the new EU testing regime.
The supplement will apply to diesel cars (not hybrid diesels) registered on or after January 1, 1998, which do not have a registered nitrogen oxide (NOx) emissions value. It will also apply to models registered on or after January 1, 1998, which have a registered NOx emissions value, which exceeds the RDE2 standard.
What is the RDE2 test?
There has been considerable controversy around the inaccuracy of claimed emission levels for many current generation cars, to the extent that there is a widespread belief that the previous testing regime, called the New European Driving Cycle (NEDC), had become devalued.
This is now being replaced by a new test called the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) under which testing conditions will become much more realistic.
The WLTP cycle has been developed using real-driving data, gathered from around the world to better represent every-day, more realistic driving profiles.
New on-the-road testing
The new WLTP test will be complemented by another test called the ‘Real Driving Emissions’ (RDE) test, which will ensure that vehicles deliver low emissions of pollutants such as nitrogen oxides (NOx), not just in the laboratory but also out on the road.
RDE testing of cars on real roads under realistic driving conditions will be a new addition to the existing testing requirements, making Europe the only region in the world to implement such an in-depth testing regime.
The RDE test is a measure of how close a vehicle gets during real-world emissions testing to the emissions measured during the NEDC and WLTP test. It sets a maximum permitted level of car NOx emissions and is in two distinct steps.
Step One (RDE1) applied to all new models of cars from this September and to all new registrations from September 2019.
Step Two (RDE2) applies will apply from January 2020 for all new models and types of car and from January 2021 for all new registrations.
The EU timetable for the introduction of RDE2 therefore means that it is almost certain that no diesel cars currently on the UK roads will be exempt from the increased charge.
Indeed, the government has already said: “It is likely that few, if any, cars will meet RDE2 standards in 2018 to 2019.”
How will RDE testing work?
Under RDE, a car will be driven on public roads and over a wide range of different conditions. Specific equipment installed on the vehicle will collect data to verify that legislative caps for pollutants such as nitrogen oxides (NOx) are not exceeded.
The new diesel tax changes are based on how a car performs in the Real Driving Emissions Step 2 (RDE2) test, which clearly indicates that a vehicle is able to meet Euro 6 emissions standard in real-world driving conditions, as well as in the laboratory.
Cars found not to meet the Euro 6 standard in the RDE2 test will be subject to a one-band increase in Vehicle Excise Duty – but only for the first payment, which is usually rolled in to the ‘on-the-road’ price. Annual road tax payments, meanwhile, remain unchanged, and commercial vehicles are unaffected.
An important note is that ‘real-world’ RDE2 emissions test doesn’t become mandatory until January 2021 for all new registrations, although it applied to all new car models from the previous January.
However, as Euro 6 emissions requirements stipulate NOx emissions of below 80mg/km, the new ruling could encourage car manufacturers to introduce RDE2 testing before that deadline, in order to prove their cars’ compliance with the Euro 6 standard and qualify for a lower initial Vehicle Excise Duty payment in the UK.
If you would like to discuss this or any aspect of your fleet policy, please get in touch and one of our fleet management experts will be happy to help.