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Understanding WLTP and RDE

The Worldwide Harmonised Light Vehicle Test Procedure (WLTP), which measures both fuel consumption and dioxide emissions, has applied to all newly registered cars since 1 September 2018.

The test has been designed to provide more accurate measurements than its predecessor and provide results which, at least in theory, are much closer to ‘real world’ scenarios. However, because the tests still take place in a laboratory, they are also being supplemented by a Real Driving Emissions (RDE) test which takes place on public roads.

The RDE test, which can take up to two hours, covers a range of different driving environments such as up and down hill, towns and motorways etc. Currently, RDE centres on measuring pollutants such as NOx, meaning that MPG and CO2 figures are still based on how the vehicle performs in a laboratory setting.

RDE is being introduced in two stages. Step 1 applies to all newly registered cars since 1 September 2019 and, under the new rules, cars can emit up to 168mg NOx/km (excuse the km reference but it is a European test). From 2021, the introduction of RDE Step 2 sees this limit being reduced to just 120mg NOx/km.

More emissions mean more tax

In reality, emissions are no higher than they were before the new tests came into force, it’s just that they are being more accurately reported. And, given the ‘dieselgate’ scandal of a few years ago, it comes as no surprise that figures are generally going up rather than down.

With both VED (otherwise known as road tax) and company car tax all heavily linked to emissions, this can mean a sizeable increase in the amount of tax due. There’s also Class 1 National Insurance contributions and first-year Corporation Tax relief to consider. Although the good news is that tax due will only be based on the new figures from 6th April 2020, so there is still some time to prepare.

This delay in implementation does mean that some cars will have been WLTP certified before the new calculations come into play. Under these circumstances, the government has said that it will correlate the results with the existing NEDC system. However, analysts report that this process can result in an average increase in official CO2 figures of around 10%. Independent research shows that petrol plugin hybrids are most affected, with a rise of 27.3% being reported.

What about electric vehicles?

Of course, drivers who have made the switch to a pure electric vehicle, such as the BMW i3, won’t be worried about CO2. However, it’s worth pointing out that, from April 2020, new Benefit in Kind (BIK) bands will come into force which take into consideration electric only mileage ranges. This means that plug-in hybrids with an electric range of less than 30 miles will be rated at 14%, whereas a range in excess of 130 miles will see this tumble to just 2%.

WLTP and ULEV grants

ULEV grants currently relate to vehicles with emissions of 75g CO2/km or less. Given that WLTP tests seem to be resulting in a significant increase in the official figures, this could mean that some hybrids lose their ULEV status altogether. Unfortunately, this wouldn’t just remove any possibility of a grant, it could also mean losing exemptions for emissions-controlled areas such as the London Congestion Charge zone and the growing number of Clean Air Zones.

Is there anything else to worry about?

Given that the new regime means that each vehicle variant must be tested separately, it is quite likely that manufacturers will choose to streamline their line-up and some higher polluting cars may disappear from the market altogether.

Although, given the complexity of some model line-ups, maybe this isn’t such a bad thing after all. Although WLTP and RDE seems like quite a shake up, it’s really just a bump in the road. Manufacturers are gradually introducing vehicles with lower emissions and greater fuel efficiency. Pure electric models are also benefiting from significant improvements in range and, as a result, are now a viable option for many more drivers. Put it all together and, in a few years time, the impact of the new tests will seem somewhat negligible.

Having said this, with cars continuing to get greener, there will come at a time when the government needs to replace all the emissions-based taxation revenue with something else. In fact, several possibilities are already under discussion, including road charging and increased electricity taxes. One thing’s for sure, vehicle and mobility taxes aren’t going away anytime soon.

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Posted on 14th August 2019 at 8:48 AM

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