Plan Insurance Blog

A Green Future For Freight

Freight Decarbonisation Is Coming… Transport is the biggest single source of carbon dioxide emissions in the UK. It accounts for 27% of all emissions.

Last year it was announced that there will be a ban on petrol and diesel cars and vans from 2030. Transport secretary Grant Shapps said that the commitment was ‘one of the most profound changes to transport policy’ ever. However, Shapps added that eliminating emissions from HGVs was much more challenging because of their weight and mileage needs.

The government is going to invest £20 million in schemes that will bring about a full transition to zero-emission lorries. These will include overhead wires and hydrogen HGVs.

Like California has implemented, the UK will have a ‘zero-emission mandate’ for manufacturers’, which will require them to sell increasing numbers of electric vehicles over the next decade.

In 2035 the sale of new non-zero emission HGVs under 26ft will stop, 2040 will see a full ban of the sale of new non-zero emission HGVs.

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Decarbonising Transport: A Better, Greener Britain

Earlier this year the Department For Transport released a plan for decarbonising transport in Britain. Here’s what it said about freight decarbonisation.

Zero-emission freight vehicles are already being sold and used, mainly medium-sized vehicles undertaking urban and regional deliveries. These are suitable for a range of operations but currently have higher upfront costs than the equivalent diesel vehicles in circulation.

The government has invested £582 million to continue plug-in grants for trucks and HGVs until 2022 or 2023. The plug-in truck grant reduces the purchase price of zero emission commercial vehicles. The grants give you a 20% discount off the price of a zero-emission vehicle, with up to £25,000 of funding for larger HGV vehicles.

The government is also considering whether to increase maximum vehicle weights for alternatively fuelled and zero-emission trucks. This would offset the additional weight from batteries and hydrogen storage tanks for hybrid vehicles. In addition, a larger maximum vehicle weight would make them more attractive to companies and operators.

Can Innovation Work To A Deadline Of Regulation?

In 2018, The National Infrastructure Commission published a report called ‘The Future Of Freight’. The report highlighted that regulation will drive the change.

The government should create incentives to encourage freight companies to innovate for a greener freight system. In addition, regulatory changes will give clarity and show long-term commitment to the freight industry.

However, regulators may not fully consider the extent of the transformation needed to be made in the freight industry whilst firms manage to stay afloat. Combustion-engine lorries, for example, are much more difficult to transition to zero-emission because of the size of batteries needed to power electric HGVs.

That isn’t to say that innovation can’t keep up with regulation. The impending deadlines might encourage it. Volta Trucks, a new manufacturer on the block, is developing a 16-tonne electric lorry for inner-city roads. It will have the same carrying capacity as four traditional diesel vans.

Tesla is also developing their own electric heavy-duty lorry, which is due to start production this year. The likelihood is that many other lorry and HGV manufacturers will begin to follow suit, creating zero-emission models.

Catenary portals on so called emotorways, where by trucks receive electricity via electrified cables are also being developed. The Government is set to invest £20 million in a scheme to explore the practicalities of such a solution. They are already being used in Northern Europe.

The highly impressive and forward thinking Tyseley Energy Park in Birmingham is currently an exception that will need to become common place in the next decade for freight decarbonisation targets to be hit. The park’s 25 megawatt power station delivers low and zero carbon power to transport providers and commercial fleets as well as offering other heat, waste and recycling solutions. Its estimated that 66 similar locations would be required across the west midlands alone at a cost of £800 million to facilitate achieving net zero in the future. Details regarding infrastructure investment and how to bring about the integrated thinking required on this scale nationwide doesn’t appear to feature in the Government’s decarbonisation vision thus far.

In a recent report by The Infrastructure Commission, they said that the government must put ambitious targets to ban new diesel lorries into place to spur manufacturers into action. Otherwise, the UK is unlikely to reach its ambitious goal of net-zero greenhouse gas emission 2050.

Lower emission fuels such as gas to liquified natural gas (LNG), biomass to liquid (BTL), hydrotreated vegetable oil (HVO), gas to liquid (LTG) are also demonstrating great potential as clean, efficient alternatives to diesel. They could play a significant role in the future fuel mix for transport to reduce oil dependency, greenhouse gas emissions and air pollution. Might they serve as a sensible interim between lowering carbon outputs and hitting 0 emissions? Yet they themselves will require greater infrastructure investment than is currently taking place to attract more wide spread take up.

How Realistic Is Net-Zero Greenhouse Gas Emissions By 2050?

Because of the rise in online shopping, road and rail freight could end up accounting for 20% of the UK’s residual greenhouse gas emission unless drastic action is taken.

However, the freight industry has called on the government to reconsider setting a concrete date to ban fossil-fueled lorries. Until zero-emission HGVs are readily available, affordable and practical, the entire freight network needs traditional trucks to keep running. Otherwise, the UK could find itself in serious trouble. And so, the conflict between green ideas and the polluting reality continues.

In the current post Covid world with inflationary pressures on freight firms as well as driver shortages it feels like environmental concerns and the required investment by both the public and private sector may take a back seat. That’s despite the issue ticking both the critical and urgent boxes. We’ll do our best to keep our logistics and distribution insurance clients up to date on any new regulatory updates that are published.

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