An international legal bid to force governments to take drastic action to reduce pollution could affect diesel residual values across Europe.
The warning comes after the UK High Court ruled that government plans to tackle air pollution are so poor they break the law.
EU law requires the government to cut pollution in the ‘shortest possible time’ but ClientEarth has brought legal action against several national governments, arguing their plans are too weak to make a short-term difference.
The High Court ruling means the UK government will be forced to introduce tougher measures to cut pollution in cities, which could see the nationwide roll out of congestion charges and low emission zones which ban polluting vehicles.
Ministers were proposing to introduce clean air zones in Birmingham, Leeds, Nottingham, Derby and Southampton. The ruling will force the roll out of zones to any city deemed to have high pollution levels, similar to one that has already been introduced in London.
ClientEarth has launched legal battles throughout Europe to force change in countries including the Czech Republic and Germany.
Its lawyer Alan Andrews said: ‘It is clear we need a national network of clean air zones. The government must consider including the most polluting cars in this scheme, something which it has refused to do until now.
‘[Prime Minister] Theresa May needs to talk to her European counterparts and make sure that EU regulations introduce strict new emission standards on diesel vehicles as soon as possible.’
Andrews also told the car industry to ‘step up’, adding: ‘They helped get us in this mess, so they should help get us out. They need to produce vehicles that actually meet emissions standards on the road, so the public aren't conned into buying dirty diesel cars.’
The introduction of Europe-wide restrictions on the use of diesel cars could lead to a reduction in demand for vehicles and a sharp fall in their residual values.
ClientEarth wants scrappage schemes and compensation arrangements to help affected owners.
Rupert Pontin, director of valuations for Glass's, a sister company of Autovista Intelligence, said the introduction of low emission zones could have an impact.
He added: ‘This is likely to affect older diesel values and it will change the usage of diesel cars. If vehicles are not allowed to enter cities, then they are not as usable and that will affect their values on the used car market. The extent of any impact is difficult to estimate. It depends on the type of measures that are taken, but the government may need a scrappage scheme and any policies to ban certain vehicles will aggravate a lot of people.’
Access restrictions based on emission compliance will mean that retaining an old car will be increasingly impractical, as it may be banned from circulating on city streets, according to Mobility Intelligence, a new report from Autovista Intelligence.
This would result in demand for used cars dropping more significantly than for new cars. Outside of the metropolitan centres, consumers are still expected to need cars, with the result that if there is a sudden excess of used cars in urban markets, these could be cascaded to rural areas where there is still potential for demand.
The reputation of diesel has been harmed by more than a year of negative publicity following the Dieselgate scandal, when Volkswagen Group was found to be concealing the real-world emissions of some diesel cars when they were subjected to official tests.
Manufacturers say they ‘share the desire’ to improve air quality, but insist that any policies should not focus on a single view.
A spokesman for the European Automobile Manufacturers Association (ACEA), said: ‘Non-discriminatory compliance with existing emission standards should be the only criteria for low-emission zones. This way, investments made by consumers and operators are safeguarded.
‘They should be technology neutral to ensure the uptake of the latest low-emission vehicles. There is no reason to discriminate against the latest generation of EURO-6 diesel vehicles, they are the cleanest ever produced.'
The UK government is not planning to appeal against the high court decision and agreed to discuss new steps with ClientEarth to bring pollution levels down to legal levels.
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