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Promoting Low Carbon Vehicles: Policy and Practical Action

On 7th November the Waterfront Conference Company, in association with the Low Carbon Vehicle Partnership, held a conference in London entitled ‘Promoting Low Carbon Vehicles: Policy and Practical Action’.

Michael Roberts, Director of Business Environment at the CBI, provided the keynote address at the conference on the subject of the Commission for Integrated Transport’s new report ‘Transport and Climate Change’.

The conference also featured an address by Prof Julia King following the publication of the interim King/Stern report on decarbonising the UK’s road transport sector.

Other speakers included:

• Robert Evans, Cenex

• Sujith Kollamthodi, AEA Energy and Environment

• Dr Ben Lane, Ecolane Transport Consultancy

• Jonathan Murray, LowCVP

• Paul Clarke, Green-Car-Guide.com

• Malcolm Fergusson, Institute for European Environmental Policy (MF)

• Michael Hurwitz, Department for Transport (DfT)

• Mark Evers, Transport for London (TfL)

• Am Pall, City Sprint

Here’s a summary of the latest low carbon vehicle issues that were discussed.

Chairman: Graham Smith, LowCVP and Toyota Europe

Graham chaired the start of the Conference and reminded us that the Low Carbon Vehicle Partnership was established in 2003 to help encourage the shift into low carbon vehicles. Policy developments are placing a greater focus on biofuels and ensuring they are sustainable and deliverable, in addition to the Renewable Transport Fuel Obligation (RTFO) due in April 2008. There are climate change challenges in all sectors of society, in particular transport, and especially road transport, which is currently accounting for around 25% of total carbon emissions.

Michael Roberts, Confederation of British Industry (CBI)

Michael described the key findings from the Commission for Integrated Transport’s (CfIT) study to deliver the most cost-effective carbon reductions in line with the Government’s 2050 aspirations. Overall the total emissions are down, but conversely figures for transport are up and road transport is the largest contributor. CfIT found mixed evidence of the cost-effective measures for ‘transport in the round’. Policy measures are needed to achieve behavioural and technological change. Behavioural change is the more attractive, cost-effective route; however, it is difficult to implement effectively to influence decisions. The cost-effectiveness of the Government’s current policies puts heavy emphasis on technological options and these can be relatively expensive; there are additional questions over the ability to deliver on time and in line with regulations, particularly the European Commission (EC). The study outlines five measures for the Government to improve in its approach: vehicle efficiency; adopt a mandatory new car CO2 target complemented by fiscal measures and market control. Behavioural changes; initially through reinforcing driver behaviour and then, the intensive application of smarter choices. Secure savings from the freight industry; through technological purchasing and operational changes. The fifth measure focuses on aviation.

Professor Julia King, Aston University

Julia spoke of change needed to fuels, technology and behaviour and warned deforestation contributes more CO2 emissions than transport, which contributes 14% to global emission figures and is growing. The Stern report suggested targets of 60-80% by 2020, but in order to achieve ‘decarbonisation’ Professor King advised we need to be striving for 90%. When choosing cleaner fuels the life cycle of CO2 needs to be considered. 85% of petrol and diesel emissions are generated in the tailpipe, 15% in manufacture. Alternative fuels’ (such as hydrogen and electricity) almost total CO2 emissions occur in their production, and with biofuels it is the harvesting and production. Biofuels are only part of the solution and have a future in road transport, but must not be allowed to develop too fast; robust sustainability safeguards need to be established first, especially in advancement of second generation biofuels. The other part of the solution could be electric vehicles (powered by connection to the grid); however transport must be integral to how power generation is viewed.

Robert Evans, Cenex

Robert detailed the UK motor industry’s competitiveness in terms of the current situation and future opportunities. There are opportunities in research and design (R&D) to achieve a greater shift to low carbon vehicles. There is capability in the UK’s R&D and potential in demonstration and deployment, but Robert warned this needs to be exploited effectively. Cost and finance are the major barriers to progressing further. Cenex was set up to integrate and progress beyond the R&D capabilities; taking them to end-user operation and market demonstration, and improve the knowledge transfer network. There is renewed interest in electric vehicles with a new showcase of technology to be on the road by the end of 2007. Vans and minibus vehicles are a focus for hybrid and fuel cell technologies with possible savings of up to 20% dependant upon application and size of the deployment. Cenex also assists in innovation orientated procurement (IOP); mixed public and private sector investment to articulate R&D technology and demonstrate and deploy it into the market. Successful examples in the US include Fedex and UPS wanting to reduce their emissions and employing hybrid, electric and low carbon solutions.

Sujith Kollamthodi, AEA Energy and Environment

Sujith talked about options to stimulate the shift to low carbon vehicles within three timescales; short-term (now-2015), medium-term (2015-2030) and long-term (2030-2050). In terms of development of technology in the short-term there needs to be an evaluation of gasoline and diesel technology, there is the Renewable Transport Fuel Obligation in 2008 and the introduction of mild-hybrid technology into the mainstream market with the new models from BMW. In the medium-term, Sujith foresees hybrid and plug-in technologies and second generation biofuels, and longer-term the objectives need to be completed for full decarbonisation of road transport. However, there must be maturation of the fuels and the supportive infrastructure first. To stimulate the behaviour change in the short-term; the EC is planning passenger CO2 emission regulations and the manufacturers are responding. Possible medium-term measures see R&D funding for demonstration technology, with international collaboration and longer-term clear strategies for participation technologies and clear policy signals and a framework are crucial to ensure a permanent attitude shift.

Dr Ben Lane, Ecolane Transport Consultancy

Ben spoke of the extensive research carried out into consumer behaviour and though environmental factors come low on the list of influencing factors, at least they are there. The top three factors; price, fuel consumption and running costs must be the ones addressed to effectively influence attitudinal change. There has to be an understanding of the non-rational reasons behind consumer decisions, and this must be reflected when formulating policy. The ‘cost experience’ of the consumer must be considered and research into this so far has shown that consumers would want approximately £1500 compensation for taking the risk of changing to a low carbon vehicle. Ben explained the mpg paradox; concerns about the mpg of a vehicle are present pre- and post-purchase but not at the actual purchase of a car. The lesson to learn from this is to make the cost and the link between mpg and CO2 transparent. Company car taxation, congestion charging and registration incentives (as seen in The Netherlands) are all measures that have been proven to work, to articulate behaviour change.

Jonathan Murray, LowCVP

Jonathan cited a recent Friends of the Earth survey which looked at car advertising in the newsprint media, and addressed whether advertising is helping or hindering the campaign for low carbon vehicles. However, Jonathan explained that to develop government policy on these issues there will need to be a more detailed survey. The Toyota Prius demonstrated how car adverts have progressed over the last decade; initially the marketing for the mark one, focused on the car’s green credentials and relationship with the environment, this was found to hinder the sales of the model. For the launch of the mark two model a ‘normal’ marketing strategy was employed and was more successful in terms of volume sales. An example of best practice (at present) is the Volkswagen Polo Bluemotion. It has well documented, specific claims and complies with the EC stricter regulations regarding detailing CO2 emissions on the adverts themselves.

Paul Clarke, Green-Car-Guide.com

As the founder of the pioneering website www.Green-Car-Guide.com, Paul was asked to present on the subject of providing environmental information to car buyers. Paul therefore gave his top ten low carbon vehicle communication recommendations. These ideas included being passionate about cars and not excluding certain vehicles, making it easy for people to go green, being green-focused with the information provided, educating people, making it fun, making green cars cool, good design and imagery, understanding what motivates people, appealing to people’s emotions, and mainstreaming green car communication. Paul also suggested an added idea to keep environmental issues in the mind of drivers – to make it compulsory for all manufacturers to fit a large, accurate and real-time mpg and CO2 emissions read-out in front of the driver so they are constantly aware of their fuel consumption, and they can see the amount of CO2 being emitted all the time while driving, thereby aiming to make CO2 more visible. Paul concluded by saying that we need more green leadership in the UK and www.Green-Car-Guide.com would be pleased to work with other organisations to help spread messages more effectively.

Malcolm Fergusson, Institute for European Environmental Policy

Malcolm outlined the history of steps taken to control emissions from cars. In 1995 the controversial target of 120g/km of CO2 was set for 2005 (or 2010 at the latest). In 1998-9 agreements were drawn up to meet 140g/km and in the year 2000 monitoring was established. This year (2007) legislation is being announced for the first time, this had always been threatened if the voluntary agreements failed to work. There has been progress since 1995 but in the last few years it has tailed off. The goal of 120g/km is set for 2012 but the goal is for cars themselves to reach 130g/km and the extra 10g/km to come from other measures such as more efficient air conditioning, low resistant tyres etc. There will be a review in 2010 with tougher targets set for 2020. All legislation has got to be equitable and not distort competition. There are various ways in which it could be implemented: 1) there could be a trading scheme between manufacturers with the most polluting buying carbon credits from the less polluting, 2) manufacturers as a whole could have to meet a target based on average emissions across their vehicle range, 3) there could be targets for individual vehicles. There is an argument for a classification system as bigger cars will emit more yet some people need bigger cars. Enforcement works most naturally at the car manufacturers’ association level; this is a very different approach as most other EU legislation is on the Member States. A proposal should be out in December 2007 or mid 2008 at the latest.

Panel Debate:

Motoring ahead or blind alley? Is vehicle regulation heading in the right direction?

Kai Lücke, European Automobile Manufacturers’ Association (ACEA) (KL)

Kai outlined that the ACEA accepts the 120g/km target. Today most cars are around 160g/km so it is a significant reduction. Most of this will be done through technology, although they regret this being the focus as it is the most expensive way. Measures such as eco-driving, tackling congestion and improving road surfaces are cheaper. With technology the focus is only on new cars and if the legislation makes new cars more expensive then people won’t buy them and the overall environmental effect will be worse. ACEA support measurement of CO2 on a weight based system as this is based on physics. Timescales are short, there will only be legal certainty in 2009 and 2012 is not far off.

Tony Bosworth, Friends of the Earth (TB)

The DfT say a 60% cut on 1990 levels of CO2 by 2030 is achievable. Technology is not enough, demand management is needed. A target for vehicle emissions in 2020 should be set now as the industry need certainty. The industry have known about the 120g/km target since 1995, they have had long enough. FoE don’t support a weight based system.

Michael Hurwitz, Department for Transport (DfT) (MH)

The DfT wants longer term consensus from the EU on targets. A utility based approach seems the most equitable. There are a diverse range of automobile manufacturers in the UK and we need to protect this and to ensure that costs are manageable.

The main points from the discussion were:

KL – The ACEA looked at lots of different ways of comparing vehicles e.g. power, volume, footprint (area between the wheels). Weight was found to be the best parameter for describing CO2 and this is the method used in Japan and China. If vehicle manufacturers did make their vehicles heavier they would have a harder time meeting the targets.

MH – Niche manufacturers can’t be let off. They could be allowed to choose between a utility classification or a percentage reduction for them.

MF – With vans, a CO2 limit for each size class could be set.

KL – More data on vans and lorries is needed, this is being collected from 2008.

KL – They want to see a tax on use, not sale, with a move away from registration tax. Tax should be even for vehicles across the EU.

TB – They fully support CO2 based taxation as the cost of motoring is falling in real terms. They want to see more work on the vehicle excise duty and want longer commitment on a fuel duty escalator.

MF – 27 different tax systems is ridiculous. They want to influence people at the point of sale through graded prices. This could be revenue neutral so that smaller cars are cheaper.

Michael Hurwitz, Department for Transport (DfT)

Michael outlined plans for the DfT’s low carbon vehicle procurement programme. He described the current ‘valley of death’ situation when bringing new technologies to market; it is very expensive and so no one buys the products. The public sector has strong procurement potential and the aim of the programme is to develop the market for low carbon vehicles. Between 2008-11 up to £50 million will be available to support public sector organisations buying fleets. They are focusing on vans in the first instance and have to focus on pure public service institutions so as not to go against the State Aids legislation. They are talking to the Environment Agency, the Metropolitan Police and HM Revenue and Customs currently.

Mark Evers, Transport for London (TfL)

Mark said that 44 million tonnes of CO2 is London’s annual carbon footprint. Road transport accounts for 80% of transport emissions. Year on year reductions in CO2 emissions of 4% are needed, the target is a 60% reduction from 1990 levels by 2025 for London. TfL have established a Climate Change Fund with £25 million over 3 years to help meet Climate Change Action Plan targets. They have a low carbon vehicles project with £2.6 million over 3 years for vehicles and supporting infrastructure. The congestion charge has reduced CO2 emissions by 16% within the zone and the next step is emissions related charging. Cars emitting under 120g/km will get a full discount, those between 120-225g/km will pay £8 and those emitting over 225g/km will pay £25 and the residents’ discount will be removed. The charges will be brought in next year and reviewed in 2010. It is important that TfL demonstrates real action and leadership. They are currently trialling hybrid buses which reduce CO2 emissions by 30-40%. By the end of 2008 they will have 50-60 of these buses in service and they are getting the different operators used to them.

Am Pall, City Sprint

Am described City Sprint as a courier service with 1500 vehicles of all different types and offering a full range of services. Within each of their 30 service centres they have a dedicated environmental guardian. New starters are all trained in the environmental offering and there are internal environmental awards for staff. As part of the service they review a client’s carbon footprint and look to see if they could use a smaller vehicle, or a bike, or even a walker. They can promote these tailored solutions but it is up to clients to take it up. They also offer carbon offsetting to clients. 15% of their fleet is environmentally friendly (a 50% increase on last year) and they charge no additional premium for these vehicles. They are trialling an electric motorbike in Docklands and they now have a Canary Wharf depot to reduce the number of trips. Packages are brought from there by electric bike 5 times a day and then delivered from EC2 by pushbike, meaning a 100% CO2 free tailpipe solution. Their aim is to increase the environmental vehicles in their fleet by a 1/3 in the next 12 months. They are working with the Environment Agency on a biodiesel trial and with Momenta on promoting cycle freight in London. They have won 3 environmental awards in the past year.

Closing remarks

Greg Archer, LowCVP

Greg commented on the difference in the discussion from two years ago. There is now much greater consensus and a focus on practical actions. The theme is one of needing integrated packages of measures, not single ones. A complete decarbonisation of the transport sector in the next 40-50 years is achievable and much can be done now. The European Regulations are not an answer in isolation. The message is positive, it is a can-do problem and solutions are increasingly cost effective.