Article from The Financial Times with commentary from the CEO of the UK HFCA, Celia Greaves. You can find the full article here.
The UK has set out one of the world’s most ambitious roadmaps to achieve carbon neutrality in its transportation sector, but the journey is not without challenges
Go to any airport, port, bus station or logistics depot in the UK, and the chances are that they will be filled predominantly with planes, ships and vehicles that all run on fossil fuels.
Yet if things go to plan, over the coming years, Britain’s transport sector will go from being a contributor of 27 per cent of national carbon emissions today to net zero by 2050 – a journey that would turn it into one of the world’s clearest examples of sustainable transformation.
The goal, which is a key part of the government’s plan to achieve a net-zero economy within 30 years, is arguably the most ambitious transport policy in the country’s history.
Grant Shapps, the government transport secretary, said as much in July when he announced the government’s first “greenprint” on transport’s future, stating that “Britain is on the verge of a transformational, irreversible green transport revolution”.
“Britain is on the verge of a transformational, irreversible green transport revolution”.
But with such ambitious goals, what technologies and infrastructure will help bring about the profound change required? And what are the challenges for the country’s biggest companies, many of whose core businesses rely on extensive fleets of internal-combustion-engine (ICE) vehicles?
To date, electric vehicles (EVs) and their supporting charging infrastructure are accepted as the main way to transition to a carbon-neutral domestic transport sector — a view supported by the government’s decision to ban the sale of new ICE vehicles after 2030.
And for many of Britain’s biggest companies the transition towards a net-zero fleet is already under way. Oliver Wanklyn, Senior Fleet Operations Manager at the broadcaster Sky, says the company has already replaced 25 per cent of its 630-strong fleet of cars with electric-powered vehicles and aims to reach 100 per cent by the end of 2026.
Yet Wanklyn says that, like many companies, Sky’s biggest challenge in transitioning its 4,500 commercial vehicles is the infrastructure needs of vehicles that travel long distances every day and return at night to employees’ homes that may lack charging facilities.
“Our vans carry heavy loads, and we have jobs that will take us 200 miles in a day,” he explains.
“If you have to take time out of the day to go and charge because you can’t do it at night, it means you are not productive.”
According to a recent report by the UK think tank Policy Exchange, the UK has around 35,000 public EV charge points, with charge-point operators installing roughly 7,000 new points a year. But the report also states that this is woefully insufficient to meet the 400,000 public charge points required by 2030.
“We need to be investing in charging infrastructure five times faster than we are currently to get the physical UK landscape ready for a 2030 phase-out of new petrol and diesel cars,” says Victoria Whitehead, Managing Director, Head of Infrastructure and Transport at Lloyds Bank.
Zenobe, a British company established in 2017, is addressing some of those challenges by offering local authorities — as well as bus and fleet operators — turnkey solutions to help them electrify their fleets.
“We are there to hold the hand of the operator from electrification being a twinkle in their eye all the way through implementation and the eventual end-of-life,” explains Steven Meersman, Zenobe’s co-founder. “We help design, install and operate the charging infrastructure, dealing with grid operators on their behalf and supplying green power. We also lower risk and cost by funding the vehicle and any battery replacements.”
Working with financing solutions such as those offered by Lloyds Bank alongside its own equity, Zenobe offers a fully funded service, which means that clients can pay a per-kilometre or per-monthly charge instead of having to contend with upfront fees.
The electrification of fleets will be vital in enabling the EV revolution in the UK because fleets account for the majority of new car and van sales. The Transport Decarbonisation Plan recognised that the vehicles bought by fleets will play an important role in facilitating the second hand EV market, creating greater and affordable options for consumers. Lloyds Bank has first-hand knowledge of the importance of fleets given that Lex Autolease is part of Lloyds Banking Group and is the largest leasing company in the UK.
Given the required scale and speed of the transition to net zero in the transport sector, however, many experts conclude that electric vehicles and batteries will not, on their own, be enough to meet the stated goals.
“Electrifying all transport is likely to be an insurmountable challenge, with vehicle range, payload and developing the necessary infrastructure being key concerns,” argues Celia Greaves, CEO and founder at the UK Hydrogen and Fuel Cell Association (UK HFCA).
“Hydrogen provides a solution, and gives us a much bigger toolbox to work with”.
The odourless, non-toxic and highly combustible gas has drawn huge amounts of interest in recent years, says Jonas Persson, Head of Sustainability and ESG Finance at Lloyds Bank. “For many people, it is rapidly becoming the new offshore wind,” he says. “It’s an absolute given that it will play an important part in the transport transition because it can already do today what electric batteries haven’t yet managed.”
One possible application for hydrogen technology is in the heavy-goods vehicle sector, where long distances and weight conspire against current electric-battery technology.
Even so, the high costs and complexities of achieving economies of scale in hydrogen production remain a challenge. Moreover, and in spite of the pace of innovation, many experts believe that it will take several years before the supporting technology and infrastructure reach the maturity needed for large-scale commercialisation.
One likely addition to the transport sector’s net-zero toolkit is methanol, a green version of which can be derived from sustainable sources such as biomass, waste or CO2 and hydrogen. A liquid at ambient temperatures, methanol is easy to transport and store. It is also versatile, and can be used in traditional engines.
Like hydrogen, methanol is in the early stages of development. But with the right government policies and financial support, these technologies are likely to become an important addition to tomorrow’s carbon-neutral transport sector — and this will give companies greater choice as they plan their journey towards decarbonisation.
“No one knows the exact mix of technologies that will help us achieve net zero by 2050 within the transport sector,” says Whitehead of Lloyds Bank. “But it will be more than one — both hydrogen and electric will play their part.”