Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Memorandum by the Energy Saving Trust (IT 81)

WHITE PAPER ON TRANSPORT POLICY

  These are the comments of the Energy Saving Trust on the Government's White Paper on Transport, issued in July 1998. The comments should not be taken as representing the views of individual members of the Trust.

EXECUTIVE SUMMARY

  The Trust welcomes a White Paper on transport that has as its aim the creation of "a better, more integrated transport system to tackle the problems of congestion and pollution". We agree with a holistic approach, whereby the means of transport are improved on the one hand, while the need for transport is diminished on the other.

  The Trust does, however, feel strongly that the White Paper neglects a key feature of a better transport system, namely, the support and promotion of clean fuels and clean-fuelled vehicles. Clean fuels have multiple benefits relating to climate change, air quality, and noise; to ignore them is a waste of opportunity to improve the environment.

  Road vehicles as a means of transport—cars, buses, taxis, trucks—will always play an important role in the UK's transport system, and this is recognised by the White Paper. In this context, the Trust's DETR-funded transport programme, Powershift, has the aim of increasing the number of clean-fuelled vehicles on the road and, indeed, transforming the market for such vehicles. Already, there are 5,000 vehicles such as cars, trucks and buses on the roads of the UK, many of these are as a result of the Trust's programmes.

  The Trust's comments will therefore focus on areas in which we feel that cleaner vehicles could—and should—be supported and promoted as a matter of government policy. In particular, our comments relate to the following:

    —  insufficient price differentials between petrol/diesel and clean fuels;

    —  insufficient differentials in Vehicle Excise Duty (VED) between petrol/diesel and clean-fuelled vehicles;

    —  the need for customer awareness of, emissions produced by cars and CVs;

    —  the need for raising awareness of the availability of a wide range of credible clean-fuelled vehicles (a need evidenced by the lack of discussion in the White Paper);

    —  the requirement for effective mechanisms for local authorities to be able to improve air quality (and, by implication, promote clean-fuelled vehicles and the associated infrastructure) in their areas.

  These issues will be covered under the main headings as given in Part III Chapter 4 of the White Paper, after a preliminary description of the situation regarding clean fuels.

CLEAN FUELS AND CLEAN-FUELLED VEHICLES: A BACKGROUND

  By clean fuels is meant;

    —  reformulated petrol;

    —  reformulated diesel;

    —  gas;

    —  liquid petroleum gas (LPG);

    —  battery electric (BEV), hybrid electric (HEV), and fuel cell electric vehicles (FCEV).

  The Energy Saving Trust through its Powershift programme has already placed more than 800 CFVs on the road since 1996, and expects this number to double this year.

  There are vehicle already on the road, from each sector of road transport, that can use one or more of the above fuels, as shown in the table below:


Vehicle Subsidies by OperatorNumber

Bus and Coach25
Delivery and Courier236
Emergency Services57
Fuel Suppliers23
Local Authority368
Refuse Collection13
Road Haulage24
Miscellaneous61

Total number of vehicles807
Vehicle Subsidies by Fuel Type
Natural Gas230
Electric94
Liquefied Petroleum Gas483

Total number of vehicles807
Vehicle Subsidies by Vehicle Type
Car180
Vans457
Trucks 7500-17000kg0
Trucks—3 axle36
Articulated37
RVC13
Minibus 9-1722
Midibus 9m37
Single Deck Bus25
Double Deck Bus0

Total number of vehicles807


  The advantages, in terms of environmental benefits are threefold:

    —  reduced CO2 emissions (global climate change issue);

    —  reduced particulate, NOx, CO and hydro-carbons emissions (local air quality issue);

    —  reduced noise (local noise issue).

  Each clean fuel has at least one, but usually a combination of several, of the above environmental benefits, as compared with the use of standard petrol or diesel.

  Although several thousand clean-fuelled vehicles are already on the road, there are a number of barriers to widespread uptake, as follows:

    —  higher price of the vehicles themselves, owing to low volume;

    —  lack of awareness by vehicle purchases of the availability of a wide range of credible clean-fuelled vehicles;

    —  an incomplete refuelling infrastructure.

  It is these barriers that the Trust believes should be tackled by the Government's transport policy, and the following are intended as helpful suggestions:

SENDING THE RIGHT SIGNALS

  The Trust believes that fuel pricing and Vehicle Excise Duty are key financial instruments for sending the right signals to road users.

  We support Government policy of incremental increases to the price of petrol and diesel each year, as a means of finding the optimum price level for each vehicle. However, the demand for road transport is notoriously irresponsive to the price of fuel, and these incremental increases alone are unlikely to have sufficient impact in reducing demand.

  However, demand for each fuel is responsive to price differentials, as was evidenced when unleaded petrol was introduced at a lower price than leaded. The Trust feels strongly that the price differential between gaseous fuels and petrol/diesel should be increased further, and that a lower fuel duty for reformulated petrol should be introduced.

  In addition, the use of fuel duty differentials can be made tax revenue neutral by balancing fuel duty costs for clean fuels against rises for traditional fuels.

  For public service operators, there is no fiscal incentive to opt for clean-fuelled vehicles, owing to the fuel duty rebate. The Trust accepts that the Government will not change its policy on fuel duty rebates again. However, Vehicle Excise Duty could be an alternative mechanism, whereby clean-fuelled buses have a significantly lower VED than polluting vehicles, as suggested in 4.124. The Trust feels that a discount of £500 per year per bus, as suggested, will have little impact. We advocate a far higher VED differential, or the introduction of an alternative fiscal incentive.

SETTING STANDARDS

  The EU will be setting tighter emission standards for new cars and light vans as of 2001, and these will be 20-50 per cent more stringent than those currently in force. Unfortunately, the Trust feels that these standards will not be sufficient to meet local authority air quality targets—especially as the standards will only apply to new vehicles.

  Local authorities in the UK are working towards their air quality targets by introducing measures to reduce vehicle emissions further including the use of road-side emission testing and spot fines. The Trust fully supports this approach, tailored to local circumstances.

  In order for the approach to have maximum impact, however, road users must:

    —  be made aware of the existence of air quality standards;

    —  have access to information on the emissions levels of vehicles they wish to purchase;

    —  be able to ascertain when their vehicles fall below the required standards.

  To this end, the Trust makes the following recommendations:

    —  A public awareness campaign on air quality standards, and how these relate to road vehicles. The Powershift Register, published by the Trust, already provides information on the emissions of clean-fuelled vehicles. A similar register might be drawn up for all new road vehicles, and be made publicly available.

    —  The public awareness campaign would be complemented by a requirement for all new vehicles to be sold with a quantitative assessment of their emissions levels.

    —  All new vehicles should be fitted with a gauge that displays emissions levels. This goes further than the requirement for vehicles to warn of system failure, which is likely to be introduced in the year 2000. It allows the user to assess whether he is able to enter a particular local authority area with impunity.

    —  Emissions levels should still be checked during vehicle MoTs. However MoTs alone are not sufficient, as they do not provide the vehicle user with real-time feedback of their vehicle's emissions levels.

RESEARCH AND DEVELOPMENT

  The White Paper devotes a section to technological research and development. The Trust would like to make the point that clean-fuelled vehicles are already on the road, and there is a wide range of credible vehicles, of various categories, from which to choose.

  The public should be made aware that this is the case. Focus should be given to developing the refuelling infrastructure for clean fuels, and for reducing the price of clean-fuelled vehicles via innovative partnerships and procurement schemes.

PARTNERSHIPS FOR ACTION

  The Trust agrees that partnerships between a combination of government, local authorities, manufacturers, public service operators, and organisations such as the Trust, have a major role to play in furthering the cause of clean-fuelled vehicles.

  Local authorities have already developed some innovative mechanisms for shaping local transport, with the aim of reducing congestion or improving air quality. In the area of clean fuels, one might cite the Royal Borough of Kensington and Chelsea and the London Borough of Hammersmith and Fulham. The local authorities here agreed with two large supermarket chains that, if they used gas-fuelled trucks to make their deliveries, then allowable delivery times could be extended into late in to the night, and early in the morning. This was a win-win situation, as follows:

    —  The gas trucks are 7 decibels quieter than their diesel equivalents.

    —  The trucks spend less time on the road at peak rush-hour times, thereby alleviating congestion.

    —  Air quality is improved.

    —  The supermarket chains have extended allowable delivery times, and can therefore deploy resources more cost-effectively.

  The Trust believes that local authorities have the potential to do even more, and to this end, backs the recommendation made in the Local Government Association's Position Statement on Energy (July 1998), namely:

      "38Government should empower local authorities to experiment flexibly and creatively with new means to fund sustainable transport initiatives, such as road and congestion charging and extensions of parking charges, energy service companies, and public transport franchising."

      "39Government should require all public agencies (including health trusts and education authorities) to include the transport (including energy) consequences in performance measures, especially evaluations of locational decisions, and should prepare guidance on how this should be done. Funding formulae should enable public bodies to incur higher internal costs (for example, keeping small schools and hospitals open) where justified by the broader benefits of travel reduction."

      A competitive mechanism similar to the Trust's DETR-funded HECAction scheme may be appropriate for encouraging local authorities to develop innovative integrated transport policies—that incorporate the consideration of clean fuels and clean-fuelled vehicles.

      The Trust has extensive knowledge and access to information regarding policy options for integrated transport, through its role as co-ordinator of the European "Utopia" Project funded by DGVII Transport. This experience may be useful for both central government and local authorities when considering policy options.


 
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