Belgium to introduce nationwide light-vehicle vignette in 2027

Following on from the cancellation of the Brussels Smartmove programme - which would have implemented distance based congestion pricing, the three Belgian regions have agreed to establish a nationwide vignette (time-based charge) for light vehicles from 1 July 2027.  

It will cover travel on all motorways, highways and many major roads in all of Belgium, and cover all vehicles with a registered weight of < 3.5 tonnes excluding motorcycles. This includes all EVs, PHEVs and BEHVs, as well as diesel and petrol powered vehicles.

What is a vignette?

Vignettes are an unknown concept outside Europe, and are essentially access passes bought in advance of travel, for use of a road network within a jurisdiction.  Vignettes exist for light vehicles in the following countries in Europe:

• Switzerland
• Austria
• Czechia
• Slovakia
• Slovenia
• Hungary
• Romania
• Bulgaria
• Moldova

Of course you wouldn't know this from the EU's published map of light vehicle charging below which characteristically ignores non-EU Member States, such as Switzerland and Moldova.

Map of light vehicle road charging in the EU

Vignettes are legally what is called a “road user charge” under EU law. They are distinct from both tolls and distance-based charges (which are called tolls under EU law). Confusing? Yes. 

Tolls apply to specific facilities and are charged on actual use. Distance based road user charges are effectively metering for actual use travelled. Vignettes are time-based road user charges, which are sold on the basis of prepaying for access to a network for a set number of days.

Thinking of vignettes as prepaid access charges to a network of roads is perhaps the best explanation. It doesn't matter if you actually use the roads, you buy a "pass" to use them for a set period. It's a more flexible version of the annual vehicle registration or licence fee seen in virtually all jurisdictions.

What will they cost?

Belgium will be selling vignettes for 1 day, 10 days, 1 month, 2 months or 1 year.  This gives users flexibility to pay for a single transit of the country (common for driving from say France to the Netherlands) or for a longer visit. All light vehicles using the road network will be charged, including both Belgian registered and visiting foreign registered vehicles.

The rates for vignettes vary based on duration and the emissions class of the vehicle. A one year vignette will vary from €90 for EVs through to €125 for older higher emitting vehicles.  The charges for shorter periods for an average car (rated EURO IV) show there’s clearly much higher charges for very short periods.

1 day - €9 (EV €8.10)

10 days - €12

1 month - €19

2 months - €30

1 year - €100

Let’s be clear this is not a replacement for fuel tax. Vehicle owners in Flanders and Wallonia will see reform of registration fees, meaning the new vignette will partly be offset by such reductions. It is not clear if the same will happen in Brussels.

A major issue will be whether the European Commission approves of it. When Germany attempted to introduce a light vehicle vignette, it also proposed significant reductions in annual vehicle registration fees to largely offset the charge for German registered vehicle owners.  The European Union Court of Justice ruled that the proposal was discriminatory, because by reducing the fees for German vehicle owners, the burden of the vignette lay mostly on foreign registered vehicles.

It is expected to raise over €450m per annum gross, but around €300m of that would be offset by reduction in other fees. The net revenue will be used for road maintenance and upgrades.

How will it work?

Light vehicle owners will be expected to purchase vignettes through an online portal, linking their vehicle number plate to the vignette. Vignettes will be enforced by the use of automatic number plate recognition (ANPR) cameras on key strategic locations, with failure to pay enforced by a fine. The cameras will check if a vignette has been paid for a specific vehicle.

What about fuel tax?

No EU Member State has moved to replace fuel tax. Only Iceland has replaced part of its fuel tax with a distance-based road user charge, but it is not an EU Member State. A key issue in Europe is that the EU Energy Directive requires member states to maintain tax on petroleum at a minimum level of €0.359 per litre (US$1.59 per gallon). 

Any road user charge to replace fuel tax could currently only reduce it down to that level. Malta has its petrol tax at exactly the lowest limit, so it could not reduce it. The Netherlands has the highest petrol tax at  €0.845/l (US$3.74 per gallon), so could conceivably reduce fuel duty by a significant amount in exchange for a distance based road user charge. 

Could vignettes have wider application?

Clearly "yes" if it can be implemented in a way that avoid being overthrown by the European Court of Justice. So Belgium will be a test case.  It is entirely possible that if Belgium succeeds, other European countries will introduce light vehicle vignettes, especially the ones with few toll roads (think the Netherlands, Denmark, Sweden), and Germany may try again.  It might be seen as a step on the path towards distance-based charges for light vehicles. Why? Because Austria does this right now.

In 2004, Austria's Federal highway company - ASFINAG - introduced a distance-based toll, using DSRC technology, for heavy vehicles using its highway network, but also introduced a vignette for light vehicles. These two charges essentially fully fund ASFINAG (alongside other revenue it generates from facilities such as roadside EV charging stations), and balances charging by weight/distance and emissions for heavy vehicles, and pre-paid duration of travel for light vehicles. 

There may be a case in future for a nationwide distance based charge for all vehicles, on all roads, not just the ASFINAG network, but pressure for that appears modest at present, and would likely only come as a response to declining fuel tax revenue.

A vignette, as a prepaid pass for travel, is a particularly elegant solution for visiting vehicles, as it is easy to understand, sell and enforce. That compares to paying by distance, which would require some independent measurement of distance at the point of entry and exit. Without access to data from OEM telematics, mandating third-party devices with suitable applications, or requiring imaging of odometers at borders (which are almost entirely open), distance based charges by country for light vehicles become challenging to implement for visitors.

While Europe looks at this challenge, the implications for federal jurisdictions are considerable. It is entirely possible to see the United States being a patchwork of vignette systems for visitors and local vehicles, with locals paying at registration and visitors buying passes to travel in each others' states, maybe as an alternative to distance based fees.  

What's wrong about vignettes?

Vignettes are blunt, and they don't reflect actual road use. A one-day pass may be for a short distance of travel once, or it might be for a very long trip. A year pass covers both regular use a few times a month and daily.  So its reflection of use is poor.  Those who pay the most are actually those using it the least, as charges are relatively high for short period passes (visitors), but lowest for locals who pay annually, but regularly use the network throughout the year.  This may be politically popular (and questionable in terms of EU law*), but is not a "usage" based charge.

All of the European distance-based truck toll/ heavy vehicle road user charging systems replaced vignettes for heavy vehicles. The effect of this change was to generate much more revenue, because actual usage grew compared to estimated average usage based on time-based passes.

So I don't think vignettes are an ideal option to replace fuel tax, as a way of charging electric vehicles for road use, but they are not the worst option to do so. They might provide an alternative for just those vehicles, as a step towards distance based charging.

*I was part of the Booz & Co team that wrote this report for the European Commission ("Study on Impacts of Application of the Vignette Systems to Private Vehicles") in 2012. This is a comprehensive review of vignette systems for light vehicles in EU Member States at the time, including issues around rate setting and enforcement practices.

Romania to be the next country to implement heavy vehicle road user charging

Following on from the Netherlands on 1 July, Romania will become the 15th European country to launch a distance based road user charging system (truck toll in European parlance), using GNSS technology. It becomes the 16th full country worldwide to have heavy vehicle RUC and the 20th jurisdiction globally to introduce such a system (bearing in mind I am counting the nationwide DSRC based toll systems in Austria and Slovenia in this count, as they are priced by distance across the national highway networks).

TollRo as it is branded is expected to be launched on 1 October (this is a second delay from 1 July and 1 January) and will effectively mean heavy vehicle RUC systems will apply from the Low Countries at the English Channel (Belgium/Netherlands) all the way through central and eastern Europe to the Greek border, and the borders of the former USSR (Belarus, Ukraine, Moldova).  TollRo will be the responsibility of CNAIR.

CNAIR is the National Company for Road Infrastructure Administration.

It applies to travel on all motorways (“A” roads), expressways (“DE” roads) and national roads (“DN” roads). This covers over 18,100km of roads (around 29,000 miles).

TollRo will apply to all heavy vehicles with a registered gross vehicle weight of more than 3.5 tonnes.  It will replace Romania’s vignette system for those vehicles (although the vignette will remain for light vehicles). The rates for the vignette (essentially a time based pass for those unfamiliar) are below

Category	Vehicle type	Validity	RON	US$
C	Goods vehicle 3.5 t–7.5 t	1 day	20.39	$4.00
C	Goods vehicle 3.5 t–7.5 t	7 days	81.54	$16.00
C	Goods vehicle 3.5 t–7.5 t	30 days	163.08	$32.00
C	Goods vehicle 3.5 t–7.5 t	12 months	1,630.82	$320.00
D	Goods vehicle 7.5 t–12 t	1 day	35.67	$7.00
D	Goods vehicle 7.5 t–12 t	7 days	142.70	$28.00
D	Goods vehicle 7.5 t–12 t	30 days	285.39	$56.00
D	Goods vehicle 7.5 t–12 t	12 months	2,853.93	$560.00
E	Goods vehicle ≥12 t, up to 3 axles	1 day	45.87	$9.00
E	Goods vehicle ≥12 t, up to 3 axles	7 days	183.47	$36.00
E	Goods vehicle ≥12 t, up to 3 axles	30 days	366.93	$72.00
E	Goods vehicle ≥12 t, up to 3 axles	12 months	3,669.34	$720.00
F	Goods vehicle ≥12 t, 4 or more axles	1 day	56.06	$11.00
F	Goods vehicle ≥12 t, 4 or more axles	7 days	280.30	$55.00
F	Goods vehicle ≥12 t, 4 or more axles	30 days	616.65	$121.00
F	Goods vehicle ≥12 t, 4 or more axles	12 months	6,166.52	$1,210.00

Charges will be based on:

• Distance travelled;

• Vehicle weight category;

• Road type (different rates for motorways compared to national highways); and

• Emissions class.

Vehicle owners will have two initial choices to comply with the system:

• Account with a telematics provider (typically supplying a GNSS enabled on-board unit)

• Pre-declared single trip route ticket

To enable interoperability between account managers for toll and RUC systems across Europe into Romania, it has set up an organisation called Serviciul European de Taxare Rutieră Electronică (RoSETRE). It is essentially the European Electronic Tolling System platform for Romania. This will enable existing providers in neighbouring countries to sign up to be certified to operate in Romania, so that, for example, a Hungarian registered truck using a service provider for the Hungarian HuGO system, could use that very system and the account for that system to pay Romania’s charges.  

The rates for motorways and expressways are as follows (per kilometre in Romanian Leu):

 

Vehicle Mass	Euro 6	Euro 5	Euro 4	Euro 3	Euro ≤2
3.5 t - 12 t	0.31	0.38	0.43	0.52	0.61
Over 12 t	0.42	0.49	0.56	0.69	0.81

 

Lower rates apply for “main national roads” presumably reflecting the lower level of service

 

Vehicle Mass	Euro 6	Euro 5	Euro 4	Euro 3	Euro ≤2
3.5 t - 12 t	0.25	0.30	0.35	0.43	0.49
Over 12 t	0.32	0.39	0.45	0.56	0.62

 

For US readers, the rates in US$ per mile are below

 

Motorways and expressways — approximate charges in US$ per mile

Vehicle Mass	Euro 6	Euro 5	Euro 4	Euro 3	Euro ≤2
3.5 t - 12 t	$0.111	$0.136	$0.154	$0.186	$0.218
Over 12 t	$0.150	$0.175	$0.200	$0.247	$0.290

 

Main national roads — approximate charges in US$ per mile

Vehicle Mass	Euro 6	Euro 5	Euro 4	Euro 3	Euro ≤2
3.5 t - 12 t	$0.089	$0.107	$0.125	$0.154	$0.175
Over 12 t	$0.114	$0.140	$0.161	$0.200	$0.222

Seven providers are apparently registered to be account managers for the Romanian system. I'll provide more details once it is up and running (and hopefully it won't be delayed for a third time)!

UK announces further details of its electric vehicle road user charging proposal (eVED)

I wrote in December 2025 about the proposals from the UK Government for what it is called eVED or Electric Vehicle Excise Duty.  Elsewhere, this would be known as a distance-based road user (or road usage) charge, and is intended to apply to EVs, PHEVs and hydrogen fuel-cell vehicles that are light passenger vehicles.

The UK is following Iceland and New Zealand, which are the first two countries to mandate distance-based road user charging for EVs and PHEVs. It is also following in the US, Oregon, Utah, Virginia, Hawaii and Vermont all of which have or are introducing opt-in distance based charges (with the option of an annual fixed fee) for similar vehicles. 

The significance of the UK is it will, when implemented, be the largest light vehicle road user charging system in the world (based on numbers of vehicles it applies to). 

There are around 2.8 million vehicles today in the UK that it will apply to, which is larger than the number light vehicles that are subject to RUC in New Zealand (currently the largest - which is around 1.2 million light vehicles). That number will be exceeded when New Zealand shifts all remaining petrol powered light vehicles to RUC (which will mean around 4.3m light vehicles on RUC).  

What is VED?

In order to avoid confusion in terminology, what is meant by Vehicle Excise Duty in the UK is broadly equivalent to annual vehicle registration or licensing fees in most other jurisdictions. This are broadly fixed fees for a duration (one year or smaller increments), based on a vehicle classification which may be by size, type of vehicle, gross maximum weight, engine size, fuel type or emissions class, or some combination of those.

The eVED proposal is for a fee based on distance travelled to apply to BEVs and PHEVs.

What's happened now?

The UK Government has now published its response (PDF) to consultation on the proposal.

The details of the proposal have been updated on the UK Government website here.

In short:

• On 1 April 2028, light BEVs, PHEVs and hydrogen-fuel cell cars will be subject to eVED. It only applies to "light passenger vehicles" so not light commercial vehicles.
• The charge will be £0.03/mile (US$0.025/km) for BEVs and hydrogen-fuel cell vehicles and £0.015/mile (US$0.0126) for PHEVs. 
• Charges will be increased in 2029 and 2030 in line with the Consumer Price Index.
• Drivers will be required to provide an odometer reading when they re-register their car for VED from that date, and to estimate mileage for the YEAR ahead.
• Drivers can choose to pay for the entire estimate upfront in advance, or in instalments spread through the year.  Reconciliation of the correct amount will happen at annual VED time.
• It is expected to generate £1.1b (US$1.48b) in revenue in the first full year, increasing to $1.435b the subsequent year and £1.865b in the year after that.
• The effect on EV sales is expected to be a 2% reduction over a five year period.

So the fee will not apply to any other BEVs or PHEVs (i.e. light commercial or heavy vehicles)

Several other important elements include:

• Net revenues will be treated as general tax revenue. It will not be hypothecated for road spending or transport spending.  This reflects fuel duty, but does not reflect practice in any other jurisdiction, which generally sees it hypothecated for road spending or to support further vehicle electrification.
• No provision has been made to require that there be a location-specific option for measuring distance available for vehicle owners who want it. This means that such vehicles located in Northern Ireland which cross the Irish border, will be subject to the fee for any distance driven in the Republic of Ireland. Likewise, driving such a vehicle outside the UK will see the fee charged at the same rate. Officials may say it is the same case with fuel duty, except that fuel duty isn't paid infinitely on travel outside the UK. At some point the vehicle will need refueled, and would be subject to fuel duty in the country of purchase.  If the Republic of Ireland or say France introduced a similar fee, imposed on visiting vehicles, then it would mean UK registered vehicles are double taxed.
• The fee only applies to UK registered vehicles, so visiting BEVs. PHEVs and hydrogen fuel cell cars will pay nothing.
• Verification of odometer readings only occurs when safety inspections are undertaken ("MoTs") , which only needs to happen after a vehicle is three years old. This raises the real risk of vehicle owners facing a very high initial EVED bill if their estimate of miles for the previous three years has been low. This is particularly the case if it has changed ownership, as the incentive will be for the owner for the first two and a half or so years to estimate a very low mileage and pay (and lie about mileage when renewing VED), and to sell the car, with the subsequent owner receiving the first MoT and the verified odometer reading being much higher.  This might be resolved if change of ownership includes records of reported mileage to be compared to actual mileage on sale.

The proposal continues to upset the EV retail lobby which sees it as risking EV sales overall, but it is a fairly simple plan, and it does only partially recover revenue that would otherwise have been collected from fuel duty if the cars were petrol or diesel powered.

Nevertheless, assuming it proceeds it means the UK will be introducing a road user charge from July 2028 which is distance based, largely as a partial revenue replacement for fuel duty.  This will follow Vermont in January 2027 and New South Wales in July 2027.

We will await to see if the new British Prime Minister, and Chancellor of the Exchequer will see these plans change, once again. However, given the experience of multiple other jurisdictions, it appears the UK has gone for an excessively simplistic approach, when it should have been more bold. 

What could the UK do instead?

1. Allow odometer self-reporting via app, to spread out payments:  The average car in the UK is driven around 7,200 miles per annum.  That means £216 a year if charged 3p a mile. It should be possible for those who want to spread that out up to four times a year to do so, if they submit odometer readings (either through an app or to an independent third party).  Iceland bills motorists (in fact all vehicle owners for all vehicles) monthly, with an estimate which can be corrected through submission of an actual reading.  This added flexibility will better suit some users, and avoid the pressure of a higher annual fee.
2. Allow the market to enable third parties to provide distance measurement and account management services, including the option to exclude distance off public roads including outside the UK: Complaints about driving to Ireland or France are valid, so the option to avoid paying for distance in other countries should be available, although not government led. Likewise, some people in rural areas may want to avoid paying for distance travelled on private properties. Some Treasury officials will insist this is fair because fuel duty is consumed for such trips, but if the UK is not interested in moving more towards user pays in road charging then it is missing out on an opportunity for more efficient and fairer pricing
3. Hypothecate the revenue and subject increases to regulatory review: Treating it like just another tax prevents there being more flexible charges and pricing in future, and also undermines its potential acceptability. If net revenues were used to help pay for road maintenance, then the rates they are set at can be based on the cost of providing that infrastructure allocated proportionately to those vehicles. This becomes the embryo of a national road user charging system for all vehicles that recovers infrastructure costs much more fairly and efficiently than the status quo. Not doing this leave it as just another tax, and provides no link between what is paid and what service is delivered.

It is easy to see why this proposal might be scrapped, except that the government will urgently want over £1b in revenue per annum, and will also want to start sending the message that driving is not "free" if you have an EV.  Surely it would not be difficult to enable the private sector to provide solutions to make it easier both for fleet operators, and for vehicle keepers whose vehicles leave the UK regularly to not have to be subject to paying for distance travelled outside its jurisdiction? (even if such solutions are not necessarily available to all vehicles on day one).

When IS the right time for Australia to introduce road user charging?

RUC is a current issue in Australia

I was fortunate enough to be moderating a panel at this year's ITS Australia Roads, Tolling and Technology conference in Sydney on 25 March 2026.  I also presented on the topic separately.

It was a panel discussions about road user charging and I was honoured to be moderating such a stellar panel of expertise, namely:

• Professor David Hensher AM, Founding Member of University of Sydney's Institute of Transport and Logistics Studies;
• Bianca Slack-Smith, Director Legislative Reform and National Policy at Transport for New South Wales;
• Adrian Dwyer, CEO of Infrastructure Partnerships Australia;
• Hon Paul Fletcher, Advisor at Compass IOT and former Minister of Urban Infrastructure and Cities (2016-2018), and Minister of Communications, Urban Infrastructure, Cities and the Arts (2019-2022);
• Daniel Antonello, CEO of Here Technologies. 

The panel discussed a wide range of issues. The broad conclusion was that distance based road user charges (RUC) should be introduced, starting with EVs, and be focused on replacement of fuel duty revenue. The rates should be set to be broadly equivalent to fuel duty, and it should be a simple, easy to implement system, with the potential to allow for more sophisticated solutions for those who want it.

Although RUC for EVs is an opportunity, especially for State and Territory Governments in Australia to access a new source of revenue, it should be focused on equity.  Equity being the point as to why people who can't afford to buy a new vehicle, let alone an EV, should pay to use the roads, but EV owners should not.

Starting now with EVs was seen as making little difference to EV sales, but making it much easier to implement than a time when there might be substantially higher numbers of EV owners - who would be opposed.

There should be a nationally consistent system, with a basic product (manual distance measurement and reporting) available for all, and digital/location based options available for those who want them (e.g. to avoid charging distance travelled off public roads). 

Previous efforts to advance heavy vehicle RUC were seen as not the priority for now, as it is too politically difficult, although heavy EVs should be part of any RUC system.  

Any net revenues were proposed to be used, for the first few years, to support expansion of the public EV charging network, to help address range anxiety, although longer term such revenue might be used to support funding of road maintenance (noting fuel duty has not been hypothecated in Australia for over 30 years). 

So following that event, it is worth noting where Australia is right now:

• Federally, the Commonwealth Department of Infrastructure has set up a RUC Task Force to investigate policy options.
• Legislated is in force in New South Wales to implement RUC for EVs and PHEVs from 1 July 2027, and the NSW Government has indicated it would proceed to implement RUC whether or not the Commonwealth Government proceeds with a nationally consistent approach;
• A High Court of Australia decision (Vanderstock vs. the State of Victoria) ruled Victoria's RUC system for EVs and PHEVs was unconstitutional.

Many State and Territory Governments are supportive of RUC for EVs, not just for revenue, but also because it means EV owners pay to use the roads (whereas at present arguably bus passengers pay more to use the roads than EV owners), which will moderate driving particularly in cities. 

However, the big stumbling block is whether there will be a single national RUC charge, similar to fuel duty, which the Commonwealth will need States and Territories to collect, or if the Commonwealth might at least enable States and Territories to collect RUC.

The prospects for this have varied over recent years. Whilst Treasurer Jim Chalmers is reportedly in favour of it, Transport Minister Catherine King has been reported as being sceptical that any legislation could get through Parliament. She noted concern that any RUC would hinder EV sales.

This last point is argued by EV importers who, of course, support every single measure to subsidise or discount EVs and their use of the roads, and treat any measures to equalise their treatment with other vehicles as harming Australian progress towards reducing emissions.  Besides obviously being self-serving, there is not good evidence that RUC hinders EV sales.

Iceland introduced RUC for EVs in 2024, when EV sales were high. However today 33% of light vehicle sales are EVs in Iceland. In 2026 Iceland abolished fuel duty and put ALL vehicles on RUC, but it has had little apparent impact on vehicle sales, largely because EVs still cost 55% less to operate than petrol vehicles (see below from Iceland. 1 ISK = US$0.0082).

Hawaii introduced a choice of RUC or a fixed annual fee for EVs from 2025, and 7% of light vehicles sold in Hawaii are EVs (5% are PHEVs). New Zealand introduced RUC on EVs from 2024 (following abolition of a subsidy scheme that was signalled to be removed at the end of 2023), and EV sales were 6% of new vehicle sales (before the Iran-US conflict) with PHEVs at 5% of the market.  Since the beginning of the Iran-US conflict, EVs have reached 16% of new light vehicle sales in New Zealand, with a RUC of around A$0.06 per km.  It was just under 15% across Australia, with no RUC.

Essentially, paying a relatively small amount to use the roads has little real impact on the benefits that EVs provide in reducing running costs.

But there is a bigger issue.

How road vehicles are charged and taxed has little coherent basis in Australia. Australia has some of the highest vehicle registration fees in the world, primarily because these are fees collected by States and Territories (which don't collect fuel duty).  It's fuel duty, collected nationally, in usual conditions (it is half price because of current petroleum prices), it is neither hypothecated, and heavy vehicle owners pay a significantly reduced rate compared to light vehicle owners, because... heavy vehicles are subject to a fuel and registration based "road user charge" (which is just fuel tax and registration set at rates that are meant to try to reflect costs attributable to such vehicles). 

There is little political appetite let alone mandate for wholesale reform, as badly as it is needed, but a start would come from enabling States and Territories to charge the largest portion of the vehicle fleet that pay literally nothing to use the roads.

No one can rationally doubt the relative environmental benefits of EVs, but driving an EV in inner Sydney is not more environmentally friendly than taking the train or bus. It uses roadspace, it contributes to congestion, and relies on the maintenance and renewal of roads, which are enormous capital intensive assets.

There's little evidence that RUC on EVs affects sales. 

There is evidence that delaying RUC on EVs makes it harder.  In the UK it is highly controversial, in California it is approaching 10 years since it was first studied and piloted, and it seems as far away as ever.

The Commonwealth should set a date for a national EV RUC that is expects all States and Territories to collect. It should also allow them to collect their own, and might develop a framework within which that should operate. This should include rules about off-road use, about open standards for digital means of measuring, reporting and collecting RUC, rules around what account such revenue goes to, and around rate setting.  The NTC could have a role in this, as it does with the fuel/rego based "heavy vehicle road user charge".

Meanwhile, it should let States and Territories proceed themselves within such a framework, starting 1 July 2027 (to match NSW).  It should start with EVs and PHEVs, including heavy EVs, and the signal should be that it will be extended to other vehicles in due course, such as battery-electric hybrids and other new vehicles.

The easiest time to do this is now.

UK likely to introduce road user charging for EVs and hybrids, and it doesn't resemble National Road Pricing

The Daily Telegraph, Financial Times and multiple other UK newspapers are reporting that the UK's Chancellor of the Exchequer, Rachel Reeves, will announce on 26 November 2025 that she is implementing a distance based road user charge (RUC) to apply to light electric vehicles (EVs), plug in hybrid vehicles (PHEVs) and battery electric hybrid vehicles (BEHVs) from 2028.

EVs will be charged £0.03 per mile (US$0.024 per kilometre), with "lower rates" for PHEVs and BEHVs, reflecting their use of taxed fuel.  It is noted that current estimates are that the average petrol car pays around £0.06 per mile (US$0.048 per kilometre) based on fuel consumption. So the proposed EV rate aims to charge half the price of petrol cars, to help reflect the lower environmental impact and retain an advantage for such vehicles.

Fuel duty (officially called hydrocarbon oil duty) is at £0.5295 per litre (US$0.69 per litre). This is well in excess of fuel taxation in North America and Australasia, but not out of step with some countries in Europe.

Why?

25.4% of new light vehicle sales in the UK in October 2025 were EVs, 13.3% are BEHVs and 12.1% are PHEVs.  So there is clearly an issue emerging of declining fuel duty revenue. 

Estimated revenue from the new charge will be £1.8b (US$2.35b) per annum by 2031. This compares to around £24.8 billion in 2024 from hydrocarbon oil duty.  In 2025/2026 alone it is estimated that around £300m (US$392m) is lost in hydrocarbon oil duty revenue from the growth in use of EV and hybrid vehicles. One estimate is that by 2029 that annual loss of revenue will be at £3.5b (US$4.6b) per annum, although later estimates are predicated on bans on sales of petrol and diesel light vehicles.

Note that hydrocarbon oil duty is not hypothecated for road or any form of spending. It is simply general tax revenue for Treasury. 

Secondary to revenue is fairness. Without some form of road user charge, those who cannot afford EVs or hybrid vehicles are paying more to use the roads and contribute to government spending than those who do not. 

How?

Articles so far indicate that the Driver and Vehicle Licensing Agency (DVLA), a branch of the Department for Transport (DfT) will be tasked with collecting the revenue, as it already collects the UK's annual vehicle registration fee (known as Vehicle Excise Duty - VED).  DVLA checks compliance through Automatic Number Plate Recognition (ANPR) cameras matching vehicles to its database as to who has paid VED. The same could be done with RUC. 

However, the details around implementation leave many unanswered questions. It is suggested vehicle owners will estimate future mileage driven and prepay for that distance, with credit given if overpaid. This suggests some form of independent recording of odometers, likely at annual vehicle safety ("MOT") checks, although these are not required for vehicles in the first three years of registration.  Options include sending photos of odometer readings or the use of telematics technology to report distance, but none of this is clear as of yet.

Reaction?

The Conservative opposition is opposing it, even though it is likely that it would have to do something similar, but given the Labour Government has been doing badly in opinion polls for many months, it is clear this policy is likely to generate plenty of heat from political parties keen to weaken the Government. However, the next UK election is not due until August 2029 at the latest, so theoretically this should not be such a major consideration for now. 

Hasn't the UK been here before?

Arguably yes. From the ill-fated Lorry Road User Charging project (which aimed to charge trucks by distance and vehicle class) replaced by the National Road Pricing project in 2005 which was shut down in 2007 due to public opposition. The differences between that project and this proposed charge are fairly stark though.

National Road Pricing aimed to reduce congestion by requiring all vehicles in the UK, regardless of fuel type, to be equipped with GNSS enabled on-board units, to measure distance varying by time of day and location, so that full network road pricing could be implemented. Although there were indications that some existing motoring taxes would be reduced, such as VED and hydrocarbon oil duty, there was vigorous public opposition. That opposition focused on how much people might pay, disbelief that existing taxes would be reduced by a reasonable amount, lack of belief that it would improve conditions for drivers and belief that money collected would be "wasted".  Around 2 million signatures were added to an online petition to 10 Downing Street to stop the project (and it was subsequently shelved).

A more simple distance and vehicle class based RUC would resemble that which already exists in Iceland, New Zealand and four US states.  Politically the question is how it might be sold to the public, as it is unlikely to matter too much that it is about raising revenue, but it may be to present it as ensuring drivers of EVs, PHEVs and BHEVs pay their "fair share" of the costs of maintaining the road network. 

Issues?

There are plenty. From how distance measurement will be verified and reported, especially in the first three years of a vehicle's life, to whether payments will be annual or can be spread throughout the year.  

Some other obvious questions:

• How will distance travelled outside the UK be treated (Northern Ireland may present particular challenges)?
• How will distance travelled by vehicles visiting the UK be treated?
• Will this only apply to light EVs and hybrids, and if so, what about heavy vehicles?
• Will motorists be able to pay in increments rather than annually?
• Will there be options for fleet operators to report distance more efficiently than is needed for private individuals?

Another question will be whether the revenue will be hypothecated to contribute to spending on road maintenance and renewal, which would give a long-term funding stream to support long-term commitments to the renewal of roads throughout the UK.  The UK Treasury is likely to oppose this, as it is philosophically opposed to any measures that reduce the flexibility of use of tax revenue, but the Department for Transport may take a different view, seeing the RUC as a user charge closer to a utility fee, so that it reflects a payment for the use of infrastructure (whereas hydrocarbon oil duty is simply a tax on fuel). 

What's next?

Details are to come. Key to this will be how these and other design and policy questions are answered, and how it is sold to the public. Is it just a new charge to cover off those types of vehicles, or is there an expectation that it may be expanded to other vehicles over time? (the latter would seem to be very risky politically, given the ineptness of politicians and the civil service in getting public acceptance for anything like this in the past). 

Maybe the big question is whether it is a first stage towards national road pricing? (it could be) Or is that going to be ruled out for now? Noting that this is going to apply across the UK, so what happens to the revenue in Wales, Scotland and Northern Ireland will be of interest to EV and hybrid vehicle owners in those countries.