House of Commons - Environment, Transport and Regional Affairs

Select Committee on Environment, Transport and Regional Affairs Fifteenth Report

THE ROAD HAULAGE INDUSTRY

ENVIRONMENTAL POLICIES

80. As we have already noted, the road haulage industry has become subject to a number of European and domestic regulations which are intended to improve its environmental standards. To an extent, such measures have been successful: it has been claimed that "the road freight industry in Britain has made rapid strides in controlling vehicle emissions in the past 10 years, halving the amount of nitrogen oxide and emissions of particulates".[272] The Government has said that as a result of the introduction of new engine standards under regulations which have already been announced particulate emissions are forecast to be one third of their 1995 levels by 2010, whilst nitrous oxide emissions will fall by 75 per cent.[273] Nevertheless, the industry will continue to be a significant source of pollutants and particularly of climate change gases.

81. Our witnesses generally welcomed the range of measures put forward by the Government and the European Union to reduce pollution. However, they identified in addition a number of problems which might lessen the effectiveness of the Government's and the Union's regulations and other proposals, and suggested solutions to such difficulties. They also proposed measures themselves which would help to build on the achievements already made, or which are forecast. We considered the most significant of their suggestions in turn.

Cleaner lorries

82. In 1991, the Government put in place limits on the emission of carbon monoxide, hydrogen and nitrous oxides. Their levels were limited to 20 per cent below the then current level for carbon monoxide and nitrous oxides, and 30 per cent lower for hydrocarbons. The limits, however, applied only to new diesel-powered heavy goods vehicles.[274] Similarly the limits imposed by the European Union from 1993 onwards, and which are already agreed for the future, also apply only to new lorries. However, although it is clear that "progressive tightening of emission standards ... is leading to a significant reduction in pollution from heavy diesels as the existing heavy goods vehicle fleet is renewed",[275] there is concern that the rate of improvement might be slowed by the fact that a pool of older, dirtier vehicles will continue to be operated for some in the future.

83. Such concerns are particularly focussed on smaller operators, with limited fleets, who cannot afford to commit significant sums of money to the capital cost of new vehicles.[276] As the Institute of Logistics and Transport pointed out, although "new heavy vehicles entering service are equipped to produce the minimum possible amounts of harmful air pollution ... it should be recognised that vehicles so equipped are expensive and provide smaller operators with significant additional costs".[277] The Institute argued that "the Government should consider further measures by which operators can be encouraged to dispose of old 'polluting' vehicles in favour of new-type cleaner-emission, 'environmentally friendly' vehicles".[278] The Institution of Mechanical Engineers argues that the Government should provide incentives to operators to "update their power plants to meet modern requirements say every eight years; this would have a beneficial effect on the environment and [make] the most economical use of resources".[279] It pointed out that "vehicles ... are frequently retained in service well beyond the obsolescence point simply because they have no apparent value and are too costly to replace".[280] To respond to the problem, it said, the Government should "promote the scrapping of old vehicles and the upgrading of engines in medium-aged vehicles".[281]

84. Two strands of current Government policy provide incentives to hauliers to upgrade their vehicles. The first is that high fuel costs encourage greater fuel efficiency, which in turn is likely to mean that some hauliers will buy more modern, efficient lorries,[282] although the Shadow Road Haulage Forum told us that in fact the cost of fuel means that "companies cannot afford to spend money on upgrading their fleet to new, less-polluting vehicles".[283] The second is that the Government offers a concession on VED of £500 for heavy goods vehicles which meet "very stringent emission standards".[284] However, Exel told us that, for example, "the rebates offered by the Government do not encourage retro-fitting [of particulate traps] on vehicles that have only two or three years remaining on the lease".[285] Before the 2000 Budget the Freight Transport Association and the Road Haulage Association called for a rebate of £1,400 on VED for fitting a particulate trap to a vehicle.[286]

85. It is clear that existing incentives to hauliers are not likely to ensure that all older, more-polluting vehicles are removed from our roads or are up-graded to meet higher environmental standards. Instead, we believe, significant financial payments or rebates are required. We recommend that, in order to achieve that objective of removing all older, more-polluting vehicles from our roads, the Government significantly increase the incentives to hauliers, particularly smaller companies, and owner-drivers, to buy new lorries, and upgrade and improve existing vehicles. In particular, we recommend that the Government draw up, in consultation with the road haulage industry, a scheme to scrap older lorries in return for a payment from the Government.

Fuel quality

86. In recent years the Government has pursued a policy of encouraging hauliers to switch to Ultra Low Sulphur Diesel by maintaining a two or three pence difference in its price compared to standard diesel. The use of this 'cleaner' form of diesel results in significant reductions in particulate emissions, and is needed to permit the introduction of other technologies to reduce emissions, such as particulate traps and oxidisation catalysts.[287] The Government's policy has been extremely successful: according to the Freight Transport Association and the Road Haulage Association, "by the end of 1999, virtually all diesel sold in the UK met the Government's specification for Ultra Low Sulphur Diesel".[288]

87. However, a number of our witnesses raised a specific concern about the quality of the new Ultra Low Sulphur Diesel. The Road Haulage Association told us that "there are five different grades of ultra low sulphur diesel and many people do not know what they are getting. If the density is high then fuel consumption can be very similar to the other diesel, but many of the fuel companies, because of the cost of production, are producing the lower [densities]".[289] The Association had claimed that fuel consumption had risen by two per cent.[290] The Shadow Road Haulage Forum agreed that Ultra Low Sulphur Diesel had led to falling fuel efficiency, which it claimed had fallen by 3.5 per cent.[291] As the Forum pointed out, a fall in fuel efficiency means that the haulage industry is "burning 3.5 per cent more fuel",[292] which not only imposes an additional cost on hauliers, but also suggests that the emission of greenhouse gases will increase, and that finite fossil fuel stocks will be used unnecessarily.

88. In their submission to the Chancellor before the 2000 Budget, the Road Haulage Association and the Freight Transport Association suggested a number of changes to the criteria set by the Government to control the standard of Ultra Low Sulphur Diesel. We cannot comment upon their proposals in detail, but we support their objectives, which were to "retain the PM₁₀ [particulate] reduction benefits of Ultra Low Sulphur Diesel, improve fuel consumption, decrease carbon dioxide emissions from diesel-engined vehicles and continue the benefits from fitting particulate traps".[293] We recommend that the Government tighten the standards which govern the quality of Ultra Low Sulphur Diesel sold in the United Kingdom, to ensure that fuel consumption is not affected by the use of poor quality, low density, fuel.

Empty-running

89. In an industry as competitive as the road haulage industry, companies face "strong incentives to improve fuel efficiency".[294] In particular, there is every reason to avoid wasteful use of a vehicle through, for example, running it back to a depot empty after it has made a delivery. Considerable efforts have been made by the industry to alter logistics systems to ensure that lorries are able to minimise 'empty-running'. The Road Haulage Association told us that "companies are ... frequently cooperating with other companies so as to reduce fuel consumption and empty running".[295] The Lex Transfleet Report on Freight Transport 2000 agreed that "co-operation between different users of freight could achieve substantial increases in utilisation".[296] An example of such cooperation is Tesco, which has developed a system which uses its own vehicles to collect goods from suppliers, as well as using suppliers' vehicles to meet its own secondary distribution needs: as a result, 'empty-running' both by its vehicles and by those of its suppliers has been considerably reduced.[297]

90. Nevertheless, there is further scope for improvement. The Lex Transfleet Report on Freight Transport 2000 says that 62 per cent of lorries use less than half of their capacity on return journeys, and 26 per cent of vehicles return from making deliveries with no load at all.[298] We are concerned that, as the Government told us, "large firms are most able to restructure their logistics systems to minimise empty running and to pay for the fixed costs of fleet and fuel-management systems",[299] and that smaller hauliers do not have the resources, the size of fleet or the variety of vehicle easily to find return loads, or to transport them. To address the problem, the Road Haulage Association operates a service on the Internet to help companies to find loads to carry on return journeys.[300] Nevertheless, we believe that there is a role for the Government to play in this regard. We recommend that the Government establish or support facilities which enable haulage companies to cooperate with each other, and with their customers, to reduce empty running on return journeys by lorries.

Nighttime deliveries

91. In many towns and cities, restrictions are placed on the activities of vans and lorries at night. Although such measures are intended to reduce the nuisance and disturbance caused by delivery vehicles to local residents, they often oblige hauliers and others to make deliveries during the daytime: as a result, lorries and vans add to congestion and, because their delivery times are much slower, their operations are much less efficient and they contribute to a greater extent to pollution. In short, the local environmental benefit of reduced nighttime noise must be weighed against increased congestion, the inefficient use of resources, and a rise in pollution. Such concerns led us, in a previous report, to recommend that "consideration, taking into account different local circumstances, be given to the relaxation of delivery curfews in order to improve the efficiency of distribution networks".[301]

92. In its evidence to this inquiry, the Freight Transport Association welcomed our previous recommendation. Nevertheless, it told us, "this issue more than any other continues to be raised by many goods vehicle operators as being critical to reducing the environmental impact caused by freight deliveries".[302] The Federation of Small Businesses agreed, and called for "positive planning policies to facilitate more effective use of the 24-hour day for deliveries".[303] Therefore, we again recommend that consideration be given to the relaxation of restrictions on nighttime deliveries, and that the Government take the lead in formulating policies to facilitate nighttime deliveries. We reiterate, however, that such changes should be matched by the introduction by the freight industry of quieter and less polluting vehicles.

272 See Lorries on the right road for the environment, a press notice released to accompany the Lex Transfleet Report on Freight Transport 2000, which can be seen at http://www.lex.co.uk/transfleet/environment.html. Back

273 See Sustainable Distribution: A strategy, para.6.66. Back

274 See Sustainable Distribution: A strategy, p.83. Back

275 Sustainable Distribution: A strategy, para.6.63. Back

276 Even a cursory review of the used lorry market shows that four-year-old five-axle articulated lorries cost up to £32,000, whereas eight-year-old five-axle articulated lorries cost half that figure. Back

277 RH30, p.2. Back

278 RH30, p.3. Back

279 RH21, para.3.2.1. Back

280 RH21, para.3.3. Back

281 RH21B. Back

282 The implication of Sustainable Distribution: A strategy, para.4.20. Back

283 RH38, p.7. Back