London Mayor Sadiq Khan has today officially launched a £23m diesel scrappage scheme designed to help small businesses and charities prepare for the introduction of the capital's Ultra Low Emission Zone (ULEZ) and switch to cleaner vehicles.

The ULEZ comes into effect in central London in six weeks' time and in a bid to tackle dangerous levels of air pollution in the city will see older, polluting diesel and petrol vehicles face a daily charge for entering the zone.

The new scrappage scheme, which opens today, will allow charities and microbusinesses with fewer than 10 employees secure cash payments in return for scrapping vans and minibuses that do not meet the ULEZ standards. The fund is open to all microbusinesses and charities that are registered in London or have been frequently observed driving into the Congestion Charge Zone.

The 'scrap for cash' sceme will provide participants with a range of options based on how they choose to replace their old van or minibus.

Organisations that switch to electric vehicles will receive £6,000 to help with the running costs of a new zero emission vehicle, in addition to grants of up to £8,000 available through the government's Plug-in Grant Scheme.

Those that choose to replace the old vehicle with a new ULEZ compliant Euro 6 vehicle or alternatively join a rental or car-sharing scheme, such as Zipcar, Northgate Hire, Enterprise and Europcar, will receive a payment of £3,500. The same sum is also available for organisations that choose not to replace their old vehicles.

The scheme will run in parallel with the Mayor's recently announced £48m scrappage scheme for low-income households, which is due to be launched in the coming months.

"To get a grip on London's lethal air and protect public health we need to rid our streets of the most polluting vehicles," said Khan. "With six weeks to go until the Ultra Low Emission Zone starts in central London many Londoners are looking at ways to change to cleaner transport options.

"Motorists need our help and support to take positive action, and I am proud to today open this £23m scrappage scheme today to help enable microbusinesses and charities to scrap polluting vans and minibuses, and switch to cleaner vehicles."

He also reiterated his call for the government to emulate London's new scrappage scheme and introduce a similar programme at a national level. "Air pollution is now widely recognised as a national health crisis that is stunting the lung development of our children and leading to thousands of premature deaths," he said. "We need government ministers to help fund a national scrappage scheme targeted at cities across the UK that will support all motorists to ditch their polluting cars, and help clean our filthy air once and for all."

In addition to providing a boost to sales of electric vans, the car club and rental sector is also hoping the new scheme will help drive demand for its vehicles.

Leading car club provide Zipcar today announced it would provide match funding for the scheme, allowing qualifying businesses that scrap their diesel vans to access a membership plan worth £7,000.

Organisations that choose to take advantage of the offer will be provided with a 'free for life' business Zipcar account. Zipcar will then match fund up to a total of £3,500 of any credit the business chooses to add to their new account using the scrappage allowance.

"At Zipcar UK we support the roll-out of ULEZ, but we believe it needs to be delivered in a way that doesn't disadvantage those who can least afford it, like small businesses for example," said Jonathan Hampson, General Manager for Zipcar UK. "That's why we're delighted to announce that we're supporting the Mayor's diesel van scrappage scheme with a financial support package for businesses in partnership with the GLA/TfL. That way Zipcar UK can help enable this transition to ULEZ by giving businesses access to fully compliant vehicles that meet their van needs without needing to purchase or lease new vans."

Bridget Long, general manager at Enterprise Rent-A-Car London and South East, similarly welcomed the new scheme. "We are delighted to play our part in supporting the London Mayor's strategy for cleaner air in the city," she said. "Enterprise operates one of the newest and cleanest fleets available in the rental sector and will provide Euro 6-compliant vehicles to all businesses participating in the London van scrappage scheme. Whether it's a van for a few hours or a refrigerated articulated lorry for two years, we will create the right solution to meet the needs of businesses operating within the Ultra Low Emission Zone."

The move was also welcomed by Sue Terpilowski, London Policy Chair for the Federation of Small Businesses. "FSB London have long argued of the need to help businesses struggling with the cost of doing business," she said. "The scheme will support many businesses and we hope the Mayor can work with government to call for extra matched-funding, and, for an all-encompassing retrofit scheme to help those with essential business vehicles that will not be eligible for this scheme."