September 23, 2019

September 20, 2019

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Clean Air: Is Your Business Ready?

There in an increasing focus on emissions and pollution through various regulations and initiatives.

You may have seen coverage of, or taken part in activities for “Clean Air Day” on 20 June 2019, a campaign to grow awareness about air pollution. Clean Air legislation has of course been around for a number of decades, with statutory provision initially aimed at issues like smog, burning of fossil fuels, and dark smoke.

The Government set out its Clean Air Strategy earlier in the year and further legislation is likely to follow. The plans referred to in the 2019 strategy include reducing emissions from vehicles and introducing clean air zones (some of which are already in operation), reducing deposits of reactive forms on nitrogen, reducing ammonia emissions (impacting the farming industry), tighter emissions standards in industry and reducing emissions in the home.

As restructuring and insolvency lawyers, we are only too aware of the impact of a business not planning ahead and focusing on the immediate issues and challenges they face daily.

But as those who are involved in imports and exports have had to plan for Brexit, those businesses who stand to be affected by these changes must plan appropriately too. Many businesses will be affected in some way, if not already, and we touch on some the implications below:

Vehicle Emissions

London already has an Ultra Low Emissions Zone (“ULEZ”) and charges vehicles to drive within it. Leeds and Birmingham are just months away from introducing their own clean air zones, with a handful of other large cities expected to follow suit including Manchester. Most cities adopting these zones charge an amount per vehicle to use the road within the area covered by the zone.

This is most likely to impact on HGV, private freight, transport and delivery companies and taxis who need to move in and out of clean air zones with multiple vehicles on a daily basis and who would be required to pay, in some cases, significant amounts to be on the road in these areas.

Whilst the Government and many local authorities are committed to assisting those affected to move to cleaner vehicles (in Manchester for example, an application has been made for over £100M of funding to help these kinds of businesses upgrade) we expect there will be a potentially sizable cost to many businesses. Those affected and their advisors should be encouraged to get conversant with the changes, what assistance is available, and consider how the cost of compliance might impact on their business.

Some clean air zones and ULEZ do, or will, apply to cars as well. This is likely to have an impact on many more businesses as they / their employees could be levied with charges of circa £10 per day to use a vehicle in these zones.

Businesses that operate a fleet of cars may wish to consider whether there are greener options. Some businesses might consider reducing their footprint in the city to lower overheads and allow for more working from home, hot-desking, or even moving location if an appropriate alternative was available.

Drivers of new diesel cars over £40,000 already face hefty additional road tax and the Government is trying to ensure that sales of any petrol or diesel vehicle are heavily curbed over the next few years encouraging the use ofelectric vehicles.

Choices in the electric car market are becoming wider and more attractive but even with Government assistance, the initial price of the electric vehicle is still much higher than any petrol of diesel counterpart.

However as Clean Air Zones continue to be implemented, drivers may need to weigh up whether the considerably better running costs of electric offset the higher initial price.

Emissions in the home

The Government plans to tackle harmful emissions from burning wood and coal in open fires and stoves, by introducing legislation to prohibit the sale of the most polluting fuels, ensuring that only the cleanest stoves are available for sale in the next 3 years.

The Government also say that a wide variety of chemicals found in carpets, upholstery, paint, cleaning, fragrance, and personal care products contain the pollutants By working with consumer groups, health organisations retailers and industry the Government hopes to improve awareness, , to better inform consumers about the content of everyday products, and promote development of environmentally friendly products.

Clearly these measures will have more than a personal impact on the buyers of these products. Industry will need to review their products and take appropriate steps to mitigate the cost impact of any changes required, but it may also be an opportunity for some already at the forefront selling environmentally friendly products to flourish.

Impacts on farming

Government statistics claim that 88% of ammonia comes from farming and they have introduced plans to reduce that by 8% in 2020.

There is a Code of Good Agricultural Practice (“COGAP”) which details how to reduce ammonia.

At this stage the code represents guidance but it’s perhaps only a matter of time until statutory measures are taken, particularly if there is a poor voluntary take up on this issue.

In an industry where the impacts of Brexit will be keenly felt and where changes in consumer habits (as consumers are asked to consider the impact of their lifestyle on the environment, reducing for example, their consumption of beef) may also prove challenging. Change to mitigate the impact of farming on the environment will add further challenges to the agricultural sector which should be considered now.

Grants may be available to implement changes and farmers and their advisors should check what their options are.

Further comment

The Government Clean Air Strategy 2019 contains more information on the above and other measures being taken to improve air quality.

Affected businesses should, if not already, be discussing how to best plan for their future ensuring compliance with the clean air landscape.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Mark Prior, Squire Patton Boggs, Manchester, Restructuring, Insolvency
Senior Associate

Mark is a senior associate in our Restructuring & Insolvency practice based in our Manchester office. 

His particular expertise covers commercial and legal issues involved in corporate recovery, turnaround and reconstruction, and insolvency law. Mark advises on all formal insolvency processes and has considerable experience in preparing and negotiating legal documentation for the sale or purchase of businesses and assets, and distressed property portfolios. Mark has also advised directors on trading and prepared several cases for court...

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