The drive to Zero Emission HGVs

On 6 January 2026 the Department for Transport (DFT) launched a consultation to bring forward the transition of Heavy Goods Vehicles (HGV) to Zero Emissions Heavy Goods Vehicles (ZE-HGV). The aim of the proposed regulatory framework is to phase out the sale of all new non-zero emission HGVs weighing up to 26 tonnes by 2035 and all others by 2040. 

Why now?

The pathway to decarbonisation has been accelerated by the use of technological innovation, which has amongst other things allowed ZE-HGVs to cover greater distances, the improved supply of a range of cost-effective vehicles and the expansion of vital charging infrastructure. In addition, many neighbouring European countries appear to be evolving into the Zero- emission transition at a far more rapid pace and the UK risks being left behind in a competitive logistics market.

How will this be achieved?

Three options are under review:

1. An increase to stricter measures for manufacturers’ compliance to CO2 reduction targets 
   
   A legislative framework which is familiar to manufacturers already exists, so this option will allow a cost effective market transition.
   
   
2. An expansion (or introduction) of a Zero-Emission Vehicle (ZEV) mandate
   
   A focus on ZEVs will create more certainty and reduce exhaust pollutant levels. The clarity created by the mandate will encourage infrastructure investment.
   
   
3. Fleet adoption requirements
   
   Two options for integration are being considered:

1. A particular share of the haulier’s entire fleet to be ZE by a certain period;
2. A proportion of vehicles added to a haulier’s operators licence to by ZE

It is thought that hauliers’ with fleets are in a better position to absorb the initial higher ZE HGV purchasing costs. In due time, a trickle down effect will allow smaller fleets access to purchase used ZE HGVs. However, such a requirement may place additional financial pressures on fleets and the supply chain may struggle to cope with demand.

The consultation period will draw to an end on 17 March 2026

There is a window of opportunity to shape the regulations by putting forward proposals and suggestions for phase out dates, to take into consideration the challenges to the proposed changes and ensure necessary adjustments are imbedded.

As a result of the ZE HGVs, freight operators and their respective insurers will need to consider the framework’s impact on their insurance cover and policy terms.

Higher premiums may be seen in the short term as:

• ZE HGVs are currently more expensive to purchase
• Specialist repair costs will be required
• Lithium-ion battery risks are likely with the new technology and should be mitigated - the high value of the batteries and the associated risks due to their fragility and vulnerability (charging faults, damage etc.

Initially, the lack of historic claims data due to the fairly new liability risk may impact pricing cover.

In the long term, however, it is hopeful that:

• ZE HGVs should have lower maintenance costs due to their construction.
• Given the ZE HGVs will have built in telematic systems, the focused data retrieved will prove beneficial to good haulier operators, when reviewed for policy cover and pricing premiums.

Comment

Ultimately, freight operators and their insurers need to embrace and be prepared to transition towards ZE HGVs by way of adequate planning and assessment of associated risks which the new technology may bring. In return, it is likely that ZE HGVs will enhance sustainability scores and may influence insurance underwriters when assessing the policy coverage and premium. The framework is a clear indication of the government’s ambition and likely new regulations in the not too distant future. Insurance policies must keep up with the changes to ensure their relevance.

Related item: Logistics: Bite-Size Insights - September 2022