This report estimates the total external costs of LGV and HGV operations in London to be around £1.75 – £1.8 billion in 2006. About 27 % of these costs were internalised by duties and taxes paid by LGV operators, and 26% in the case of HGVs. If congestion costs are excluded, taxes and duties paid by LGV operators were estimated to be 155% of LGVs’ allocated infrastructural and environmental costs, compared with 85% in the case of HGVs.

When using the medium emission cost values, LGVs accounted for 56% of these external costs in London and HGVs for 44%. However, at a national level approximately 70% of LGV vehicle kilometres do not involve the commercial delivery and collection of goods. Much of it relates to commuting and performing services at customers’ establishments. The total external cost of LGV commercial freight distribution was estimated to be approximately £0.3 billion in 2006.

The duties and taxes paid by London-registered LGV and HGV operators covered on average 27 per cent and 26 per cent respectively of the total external costs (i.e. environmental, noise, accidents, congestion and infrastructure costs) they impose in London. In total (i.e. LGVs and HGVs combined) operators cover 26% of their total external costs. If congestion costs are excluded, LGV operators paid 55% more in duties and taxes than their allocated infrastructural and environmental costs in London, while HGV operators paid 85% of their allocated infrastructural and environmental costs in taxes and duties in London in 2006.

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