London’s Congestion Charge, introduced in 2003 to manage traffic in the city centre, is facing significant updates. Transport for London (TfL) has proposed increasing the daily charge from £15 to £18, effective from 2 January 2026, and replacing the current 100% exemption for electric vehicles (EVs) with a tiered Cleaner Vehicle Discount (CVD). Additionally, changes to the Residents’ Discount for new applicants aim to extend the environmental incentives of the CVD. These proposals, part of a public consultation running until 4 August 2025, have sparked varied reactions from stakeholders, ranging from support for environmental benefits to concerns about increased costs.
The Congestion Charge applies to vehicles entering central London’s Congestion Charge Zone, covering areas like Vauxhall Bridge, Euston Road, Commercial Street, Tower Bridge Road, and New Kent Road, during peak hours (7:00-18:00 Monday to Friday, 12:00-18:00 weekends and bank holidays, except between Christmas Day and New Year’s Day).
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Since its inception, the charge has aimed to reduce traffic congestion, improve air quality, and encourage sustainable transport. TfL reports that without such measures, an additional three million car journeys would have occurred in 2019, exacerbating congestion costing London £3.85 billion in 2024 alone, averaging £942 per driver.
Details of the Proposed Changes
TfL’s proposals, announced on 27 May 2025, include three key changes:
- Charge Increase: The daily Congestion Charge will rise from £15 to £18, the first increase since 2020. The increase aims to maintain the charge’s deterrent effect, with TfL estimating 2,200 additional vehicles daily without it.
- New Cleaner Vehicle Discount (CVD): The current 100% EV exemption, set to end on 25 December 2025, will be replaced with a tiered discount from 2 January 2026. Electric cars will receive a 25% discount (£13.50 daily charge), while electric vans, heavy goods vehicles, light quadricycles, and heavy vehicles will benefit from a 50% discount (£9 daily charge. This aims to incentivize cleaner vehicles while ensuring all drivers contribute to congestion management.
- Residents’ Discount Changes: From March 2027, the Residents’ Discount for new applicants will be limited to EVs, aligning with the CVD to encourage sustainable transport among residents.
TfL also proposes annual charge increases aligned with inflation plus 1%, similar to Tube fare adjustments, to ensure long-term effectiveness.
Supporters, including TfL and environmental groups, argue that the changes are essential for managing traffic and promoting sustainability. Seb Dance, Deputy Mayor for Transport, emphasized, “Keeping London moving by reducing congestion is vital for our city and for our economy.”
Christina Calderato, TfL’s Director of Strategy, highlighted the scheme’s success since 2003 and urged public participation in the consultation. “Since it was introduced in 2003, the Congestion Charge has been hugely successful in supporting the move to more walking, cycling and public transport and encouraging the uptake of the cleanest vehicles. With these proposed changes we want to make sure it continues to be effective in managing traffic and congestion in central London while providing ongoing support to those who need to drive in the zone to make the switch to an electric vehicle. I would encourage people to respond to the consultation to help shape our plans.”
Environmental advocates see the changes as a step toward cleaner air. Oliver Lord, UK Head of Clean Cities Campaign, stated, “We’ve record numbers of polluting diesel vans in the UK so I’m thrilled the Mayor is helping to reward businesses that invest in greener fleets.” Izzy Romilly from Possible noted, “To tackle the climate crisis, health inequalities, and air pollution, we have to tackle London’s high levels of traffic.” Sophie O’Connell from Green Alliance praised London’s leadership, saying, “It’s great to see London continuing its leadership in encouraging the switch to cleaner vehicles through the proposed changes to the Clean Vehicle Discount.”
TfL cites data showing the Ultra Low Emission Zone (ULEZ) expansion in 2023 improved air quality, hoping these changes will yield similar results.
Critics, particularly drivers and businesses, argue that the changes impose unfair financial burdens.
Transport for London’s (TfL) consultation on the Congestion Charge recognises the importance of commercial vehicles to the economy by creating a clear distinction between commercial vehicles and domestic road users, however, Logistics UK’s Senior Policy Manager – Road Freight Regulation, Chris Yarsley says, the new proposals will still present a significant increase in costs for electric vehicle operators, which currently operate in the capital without facing a charge: “It is vital TfL incentivise operators to decarbonise fleets and we continue to press for the continued exemption from the charge for electric vans and HGVs. Any increase in charges is a disincentive for operators to serve the capital and congestion charges should be used to encourage road users to use alternative modes of transport – an option that is not available to logistics operators.
“Operators have made significant investments moving to electric vehicles and they simply cannot afford to soak up additional costs so it is likely that any increase in charges will have to be passed on which will ultimately lead to increased prices for the end user.
“London depends on logistics businesses to keep the capital stocked with everything its businesses and consumers rely on every day, and the transition to alternatively fuelled vehicles should be incentivised, not penalised in this way.”
Historical data from 2003, when the charge was introduced, noted business impacts, with the John Lewis Partnership reporting a 7.3% sales drop at their Oxford Street store due to reduced traffic. Similar concerns persist today.
Londoners and stakeholders can share their views through TfL’s Have Your Say webpage until 4 August 2025. The consultation offers detailed information under the ‘Our Proposals’ tab, allowing users to provide feedback, ask questions, and engage with the process. TfL encourages participation to shape the final decision, which will be reviewed by the Mayor of London.
The proposed changes aim to balance traffic reduction with environmental goals, building on the Congestion Charge’s history of reducing car journeys and supporting sustainable growth. TfL notes that without such measures, congestion would worsen, impacting businesses, bus services, and air quality. However, the financial burden on drivers, particularly those unable to switch to EVs, and businesses reliant on vehicle access, remains a point of contention.
The consultation’s outcome will determine whether these changes are implemented as proposed or adjusted based on public feedback. With London’s congestion costing billions annually, the stakes are high for both economic and environmental outcomes.
Summary Table of Proposed Changes
The proposed changes to London’s Congestion Charge reflect TfL’s efforts to manage traffic and promote cleaner transport in a growing city. While supported by environmental groups and TfL for their potential to reduce congestion and emissions, the proposals face criticism from drivers and businesses concerned about rising costs. The ongoing consultation until 4 August 2025 provides an opportunity for Londoners to influence the outcome, ensuring the final decision reflects a broad range of perspectives.
