Office for Zero Emission Vehicles, Zero Emission Truck Grant and Zero Emission Van Grant Subsidy Scheme

The Zero Emission Truck Grant and Zero Emission Van Grant Subsidy Scheme operates as a grant applied as a direct discount on the purchase price of commercial ZEVs, with the grant being payable to the manufacture or third parties approved by the manufacture.

The scheme has a total budget of £877m and will provide the following level of grants:

• large vans will receive a grant of up to £5,000 and small vans of up to £2,500 in the whole UK;
• in Great Britain, new trucks will receive a grant of up to 40% of the cost, subject to caps; and
• in Northern Ireland, small and medium sized businesses will receive up to 40% of the price differential between zero emission trucks and diesel equivalents, and large organisations up to 30%.

Our key takeaways from the Subsidy Advice Unit (SAU) report are:

• Assessments should clearly identify who are the direct and indirect beneficiaries and assess compliance in relation to those.
• Any key statements need to be substantiated by relevant evidence.
• Detail should be included on whether tax-based measures were considered as a possible option.
• Evidence should be included on what would happen if the upfront costs without the subsidy and the impact to other policies in supporting the project that would continue in the counterfactual. This should include looking at how behavioural change will lead to a reduction of upfront costs where relevant.
• Assessments should explain how the grant amount, threshold levels and caps were set at the minimum necessary level to achieve the policy objective.
• Analysis should be included on the relevant market and the specific organisations which will benefit from the scheme. This should include their respective position in the market and whether any competitive advantage will arise (if so, detail should be included on how this will be mitigated).
• This assessment should have considered how the difference in the Zero Emission Truck Grant levels between Great Britain and Northern Ireland may impact competition or investment in the UK.
• Explanations should be included on how the weighted qualitative positive effects have been weighed against the negative impacts to determine that the benefits of the scheme outweigh the negatives when considered alongside the cost-benefit analysis.
• As part of the balancing exercise above, Assessments should consider the distributional impact of the scheme and its impact on international trade or investment.
• This assessment should have clearly identify the industrial activities that the scheme seeks to decarbonise. This includes provided further detail how it will achieve an overall reduction of greenhouse gas emissions, considering embodied emissions

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