Net Zero Week: Where next?

On entering Downing Street, the new Prime Minister will face a myriad of competing choices and priorities. Decarbonising the commercial vehicle sector is no exception, with a long “to do” list to work through. Net Zero Week provides an opportunity to review “where next?” together with a list of priorities the RHA will urge the Prime Minister to take forward.

“Green shoots” to decarbonise our sector are now increasingly clear to see. According to the Society of Motor Manufacturers and Traders (SMMT), there are over 1,100 electric HGVs on our roads, with ZapMap reporting that there are over 114,000 electric vans as of the end of May. Much-needed electric HGV charging sites are starting to appear, with with over 360 charging bays across at least 70 sites pledged via the Government’s Zero Emission HGV Infrastructure Demonstrator (ZEHID) programme. Together with that coming on-stream by private providers such as Milence, this is all very promising.

And when we talk to operators who have committed and are now bringing electric lorries into their fleets, we hear a consistent message. It is about identifying the specific routes or operations that an electric HGV can fulfil. These routes may currently be limited but, once done, navigating the grants and guidance now available to install chargers at depot and source suitable electric HGVs becomes easier. Those opportunities will only increase as range and battery technologies improve on these vehicles.

What’s more, there is much that all operators can learn from these early pioneers. Excellent output is now emerging from the £200m ZEHID programme with pragmatic and insightful reports being produced to show how operators can decarbonise their operations. It is refreshing to hear about what can be done.

This said, we are also clear that decarbonising the commercial vehicle fleet comes against a challenging investment backdrop. Significant risks threaten to derail plans to decarbonise lorries, coaches and vans, unless there is substantial co-ordinated leadership by both industry and government. So, at the top of our list of priorities for the new Prime Minister and Cabinet is precisely that “ask” of coordinated leadership.

Once inside Downing Street, the Prime Minister could send an early signal of intent by ensuring a long-promised HGV/Coach Infrastructure Strategy is published. Knowing where infrastructure to power zero emission commercial vehicles should be sited remains a key stumbling block. Whilst much good work by individual agencies such as NESO and the distribution network operators (DNOs) to plan for this provision is underway, it lacks a central focus. An HGV/Coach Infrastructure Strategy governed by a re-constituted Freight Energy Forum, giving clarity on how, when and where investment in the energy infrastructure will occur, will give operator confidence to plan their investments.

Our second priority for the Prime Minister is for regulatory certainty. For vans, having a clear and viable trajectory set within the ZEV Mandate for cars and vans is essential to underpin investment decisions in these vehicles. For lorries and coaches, a judicious regulatory approach is needed whilst the enabling conditions such as plentiful charging infrastructure are put in place.

The RHA believes a comprehensive ZEV Mandate for HGVs and coaches encompassing all use-cases is still some way off for it to be workable. However, carefully-targetted regulation and investment focussed on those operations which can be easily decarbonised could be possible. This will require extensive consultation with the sector but, at this stage, operations that undertake shorter journeys and/or carrying light-weight volume could be in-scope.

We are equally clear that urgent regulatory reform is required for the heaviest vehicles that carrying bulk, such as aggregate. This is our third priority for the new Prime Minister – to update vehicle weight regulations to 46 tonnes and 12.5 tonnes on the drive axle to make electric HGVs in these operations viable. Earlier this year, we published our Payload Loss Survey Report which found that current vehicle weight regulations act as a barrier to up-take of the heaviest electric HGVs, and this needs to be redressed swiftly.

Our final priority for the Prime Minister is to extend full funding support to coach operators. Overall, the ability of HGV and coach operators to invest in decarbonisation is very challenging in light of the Iran crisis which has seen everyday operating costs escalate. In a recent RHA survey, only 39 percent of operators were confident that their business could continue to operate under current diesel fuel pressures before their business becomes unsustainable. The prospect of increased electricity costs is also unwelcome.

Clearly, the £1bn funding boost to the Depot Charging Scheme and Zero Emission Truck Grant announced by the Government in March will help HGV operators acquire zero emission vehicles and invest in charging at their depots. We will see how this drives the market to increase the vehicle volume production needed for costs to start falling naturally.

Coach operators however have no equivalent to the Zero Emission Truck Grant, and this must change. We also need to keep a watching brief on overall affordability. For a thin margin, tight cash-flow industry, further funding for HGV and coach operators may be necessary if the market can not drive the required vehicle volume production alone.

Despite these challenges, the high-tech innovation which is transforming the commercial vehicle sector is very exciting which, in turn, we hope will inspire the next generation of engineers and school leavers to enter our industry. We also look to see how hydrogen develops as a credible zero emission alternative for lorries and coaches, particularly for the very hard-to-decarbonise operations such as long-distance or very heavy “abnormal load” operations.

The RHA will continue to play its part to drive the transition. Following our first-of-its-kind Future of Fleets report last year on operator-readiness for Net Zero and our subsequent Payload Loss Survey Report in March, we are planning two additional reports looking at the “green skills” needed for the Net Zero transition and a deep-dive into energy infrastructure requirements. This underpins our commitment to the new Prime Minister to ensure informed and co-ordinated leadership is in place to meet the country’s transport decarbonisation goals.