Concern over economic impact of Aberdeen’s new Low Emission Zone  

30/05/2024
Mark Brown, Partner at MHA

A top accountancy expert has expressed concerns over the economic impact of Aberdeen’s Low Emission Zone. 

Mark Brown, Partner at MHA in the city’s Carden Place, believes that while improving air quality is crucial to the environment and public health, business owners have valid concerns ahead of the scheme’s introduction on Saturday, June 1. 

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He said: “It’s undoubtedly a scheme that divides opinion. While few would argue with the need to improve air quality in our city centres, great consideration must be given to the potential economic impact the changes may bring. 

“That could be for firms who service the city centre with heavy goods vehicles, taxis or vans, or for a feared drop in customer footfall for those whose cars do not meet the eligibility criteria. 

“Some businesses simply can’t afford in the current economic climate to replace non-compliant vehicles. Some have paid out hundreds of thousands of pounds for new trucks, but many cannot do this. Smaller non-compliant vans used for city centre work will have to follow a diverted route, adding extra miles – isn’t this counter-productive? 

“There is also a valid concern over the impact on city centre footfall and a belief that the scheme unfairly impacts low-income and disabled people, students and those who drive for their job. 

“There could be displacement of non-compliant vehicles into outlying areas. As well as increasing higher polluting vehicles in these areas, it could also encourage more shoppers to travel to out-of-town retail parks.” 

Mark, who has more than 30 years’ industry expertise, provides audit, accountancy and related advisory services to clients in the north-east of Scotland. His portfolio of clients is primarily limited companies, with most of these involved in the energy sector in or around Aberdeen. MHA is ranked the 13th largest accountancy group in the UK. 

He added: “There is a disproportionate impact on businesses that cannot afford less-polluting vehicles or alternative forms of transport. Government help is there but there are limitations to this in terms of business size and the type of vehicles.” 

A LEZ is only accessible to vehicles that meet minimum emission standards. Typically, the zone will have an impact on diesel vehicles registered before September 2015 and petrol vehicles registered before 2006. Any vehicles breaching the emission standards will be issued a fine for entering the zone. 

The Energy Savings Trust’s LEZ Retrofit Fund grants cover up to 70% of the cost of a vehicle retrofit for micro businesses or sole traders within a 20km radius of the LEZ, with limits applying. 

These limits are: 

  • Up to £5,000 per light commercial vehicle or wheelchair accessible taxi installing retrofit exhaust after-treatment systems 
  • Up to £10,000 per wheelchair accessible taxi installing re-powering technology 
  • Up to £16,000 per heavy goods vehicle or refuse collection vehicle 

The businesses must: 

  • Employ fewer than nine full-time equivalent employees 
  • Have had a turnover of £632,000 or less, or a balance sheet of up to £316,000 in the preceding and current financial year 
  • not be VAT-registered 

Mark added that the potential health advantages of the scheme were clear. He said: “Restricting access for the most polluting vehicles to improve air quality helps protect public health within cities, making them more attractive places in which to live, work and to visit. It leads to increased use of public transport and active travel where people walk or cycle while also encouraging people to use more environmentally friendly vehicles. 

“Improving the air quality in Aberdeen is a valid key aim, however, the economic concerns of businesses based in or servicing the city centre are understandable. 

“There is an argument that local authorities should be incentivising city centre use in the current economic climate, not adding more hurdles. The continued improvement of public transport and making city centre rates more affordable for businesses would contribute to this. 

“The true picture of the economic impact of Scotland’s LEZ will become apparent in time but it’s clear businesses will need to be supported through the transition.” 

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