Fleet News

News analysis: Looking ahead to a greener future

AS winter approaches, it seems an odd time to talk about global warming, but international experts agree that climate change is about much more than the world getting a bit hotter.

Greenhouse gases are indeed to blame for global warming, acting like efficient double-glazing and reflecting heat trying to escape the earth. But the fractional rise in temperature has led to changes that are blamed for everything from increasing storms and record freezing winters, to record highs in summer.

The Government believes that climate change is one of the most important issues facing the world today and it needs to be dealt with by cutting emissions of greenhouse gases.

Top of its list is carbon dioxide, which is being tackled head-on as part of a commitment to cut greenhouse gas emissions by 60% by 2050.

As road transport is a major contributor to UK CO2 emissions, accounting for about one quarter, cutting pollution from vehicles and fuels is seen as a high-priority job. Powering Future Vehicles, published in 2002, set out a policy framework to shift the UK vehicle market to low-carbon vehicles and fuels.

To show its commitment, the Government has published a second annual update, showing how it has performed against its promises and outlining future plans. Fleet NewsNet looks at some of the key areas identified in the update that will have an impact on emissions, but also change the way fleets operate in the future.

Setting targets

THE Government has said that by 2012, 10% of new cars sold in the UK should have CO2 emissions of 100g/km or less at the tailpipe, equivalent to achieving an average of 75mpg.

The package of measures introduced so far include duty incentives, such as the reformed, CO2-linked vehicle excise duty and company car tax systems.

There are also Transport Energy grants to encourage take-up of cleaner, more efficient vehicle technologies and support for industrial and academic research, development and demonstration.

The Government is claiming ‘steady progress’. In 2002, new car fleet average CO2 emissions in the UK were 175g/km, which dropped to 172.9g/km in 2003.

Figures from the Society of Motor Manufacturers and Traders show 3% of new cars are now in the key 101-120g/km CO2 bracket, compared to 2% in 2002.

Voluntary agreements are at the heart of this move, with manufacturers aiming to get average CO2 emissions down to 140g/km.

Early estimates suggest the UK will miss this target, although the EU average should reach the low benchmark.

However, even average reductions across the EU may not be sufficient in itself to ensure that the 2012 100g/km target is met.

Supporting research

THE Government spends £100 million every year on grants to support research and development.

Among the vehicles produced using this money are a hybrid black taxi, a new electric shuttle bus and a range of electric delivery vehicles for inner city operation. In September, the Connaught hybrid sports car was unveiled.

Grants are also offered to manufacturers as part of the Ultra Low Carbon Car Challenge (ULCCC), so they can build, demonstrate and test cars that could be mass produced at an affordable price, with well-to-wheel carbon emissions of less than 100g/km (75mpg).

There is also a HyTrans Ford Transit project, which includes a ‘stop-start’ system that turns off the engine when the vehicle is stationary or at other times when it isn’t needed, cutting fuel use by 25%.

Encouraging take-up

CREATING cleaner vehicles is one thing, but getting drivers to use them is another. The Government has committed to using financial incentives to encourage people to drive cleaner cars.

A number of grant programmes help offset the additional costs of new vehicle technologies.

There are three operated by TransportEnergy – PowerShift, for new cars and vans, CleanUp for older vehicles, and the New Vehicle Technology Fund, which supports research and development.

For the first time, the grants have been running out due to demand, positive in one sense, but unsettling for fleet buyers who want certainty that they can access grants.

The European Commission is reviewing the success of its existing car labelling directive, with a view to improving its effectiveness in providing environmental information to consumers.

The Commission is working to a timetable that should see a revised labelling directive in force by 2008.

New fuel production

ALTHOUGH there is little take-up of liquefied petroleum gas among many fleets, there are more than 1,100 filling stations to choose from.

Even now, the complaint is that there just aren’t enough to make it a viable fuel for everyday use. So the Government is committed to the ‘quick and smooth’ development of infrastructures for new fuels.

A key new fuel will be biodiesel. The 2003 EU Biofuels Directive requires member states to set indicative targets for biofuels sales for 2005 and 2010, and to introduce a specific labelling requirement at sales points for biofuel blends in excess of 5%.

In the UK, there has been a 20p per litre duty incentive for biodiesel since July 2002, and the same incentive for bioethanol will take effect from January 2005.

Sales of biodiesel have increased rapidly since the introduction of the incentive from 150,000 litres a month in August 2002 to over two million litres a month in July this year.

Based on current and planned biodiesel production, monthly sales figures could reach some 12 million litres by the end of 2005.

Biodiesel is now available at some 150 sites in the UK, including supermarket forecourts.

No bioethanol is sold in the UK, though this could change when the fuel duty incentive comes into effect next year.

The Government is looking at rules that would order key outlets to show that a specified proportion of their aggregate fuel sales were ‘renewable transport fuels’.

The Energy White Paper has also committed the Government to undertaking an assessment of the overall and long-term energy implications of the large-scale use of hydrogen and biofuels in road transport, with a time-horizon of 2050.

But there is a question mark. The report says ‘it is not certain that a hydrogen economy will ever be realised’.

And there are other fuels on the horizon. Shell is developing a new gas to liquids (GTL) fuel technology in which natural gas is converted into very pure diesel oil. The Government is also interested in the potential of water diesel emulsion (WDE) fuels.

Taxation measures


THE Government says it will support the move to a low carbon transport system by ensuring the appropriate taxation of vehicles, fuels and infrastructure. Put simply, to justify Government support, a fuel must prove that it can offer genuine environmental benefits and be economically sustainable.

Because certainty is vital, particularly to fleets, it has promised a rolling three-year period of certainty on duty differentials for all alternative fuels. The Inland Revenue has been carrying out an evaluation of the reforms to the CO2-based company car tax system.

Graduated Vehicle Excise Duty (VED) was introduced in 2001. The Department for Transport (DfT) has commissioned MORI to conduct an independent study to assess its impact on new car purchasing decisions by private motorists in the UK.

The study showed that environmental factors were not the most significant in influencing new car purchasers and VED has not been the main driver behind car purchasing decisions.

But the Government believes graduated CO2-linked VED is an important tool for providing signals to consumers about the environmental impact of their vehicles.

Emissions trading

The Department for Transport is to work with business transport users to develop projects through which carbon savings made in the transport sector can be brought within the Government’s Emissions Trading Scheme.

The EU Emissions Trading Scheme (ETS) is due to start on January 1, 2005 and is expected to cover up to 10,000 installations across Europe.

The EU scheme will work on a ‘cap and trade’ basis. Each member state is required to set a cap on the total level of CO2 emissions for all installations covered by the ETS within that country. Each installation is then allocated allowances equal to their proportion of the total cap; one allowance is equal to one tonne of CO2.

Operators have the option to either keep emissions at their current level and purchase allowances from the European market to cover the shortfall in allowances or reduce emissions to the level of their cap.

The European Commission is in the process of assessing National Allocation Plans and member states were due to make their final allocation decision last month. At present, transport is not included within the EU ETS, but the UK is in principle in favour of it being included in future phases.

Government fleet

THE Government is slashing emissions levels among its own fleets. It promises to make maximum use of new vehicles and fuels in its own vehicle fleets and encourage other public authorities to do so.

Agreed travel targets against a baseline year of 2002/3 are that all departments will reduce road transport vehicle carbon dioxide emissions by at least 10% by March 31, 2006.

At least 10% of all departments’ fleet cars are to be alternatively-fuelled and all departments are to reduce single occupancy commuting by 5%.

The performance of individual departments can be checked via the sustainable development in Government website.

From this month all new central Government department contracts must apply minimum environmental standards when purchasing certain types of product, which cover aspects such as energy efficiency and biodegradability. Cars are viewed as ‘quick wins’.

The defined minimum environmental standard is that new cars purchased for official use must emit less than 150g/km of carbon dioxide. This level will be kept under review.

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