The expansion of London’s ultra-low emission zone (ULEZ) is estimated to net Transport for London (TfL) up to £300 million in its first year.
However, income from the pollution-cutting scheme is expected to be “negligible” by 2027.
TfL’s group finance director, Patrick Doig, told the London Assembly, its “central estimate” is for the ULEZ to generate an additional £200m in the 12 months after it is expanded to the Greater London boundary, from August 29 this year, with a “50% plus or minus” range from £100m to £300m.
TfL says that 95% of vehicles in the zone are expected to be compliant when the expanded ULEZ goes live, avoiding the £12.50-a-day charge, and compliance rates will increase incrementally each year thereafter.
Doig explained that for the first full year of operation, “our central estimate is that the net operating surplus will be £200m. But what we have experienced with these schemes is that it’s very hard to estimate accurately, given its volume levels, compliance levels, payment rates and penalty charge notices. There is a pretty broad range around that estimate, of plus or minus 50%".
He continued: “We have seen both for the North/South Circular and the original zone a significant step change once the scheme goes live. You see a step drop-off in (non-compliance) after six to 12 months and then a longer tail as the remaining vehicles then become compliant.”
The income the expanded zone will generate in its first few years come at a cost, however.
TfL says it will cost £160m to expand the zone from its current border just inside the North and South Circular Roads, which includes erecting 2,750 enforcement cameras.
There is also a £110m scrappage scheme. which is due to launch on January 30, that will offer about £2,000 to scrap a non-compliant vehicle.
The Mayor of London, Sadiq Khan, confirmed that the ULEZ would be expanded in November, last year.
Vehicles must meet strict emission standards to drive in the ULEZ area: Euro 4 for petrol cars and vans; Euro 6 for diesel cars and vans; and Euro 3 for motorcycles and mopeds.