Memorandum submitted by the Energy Saving
Trust
The Energy Saving Trust was established by the
UK Government after the Earth Summit in Rio in 1992, to help tackle
climate change. We promote mass-market sustainable energy across
the UK,: including domestic energy efficiency; mass-market Microgeneration
technologies; and cleaner road transport. This response does not
necessarily represent the view of Energy Saving Trust members.
SUMMARY
— The Department for Transport (DfT)
is currently doing nothing to promote low-carbon transport to
the broad consumer/household sector. Consumer information and
advice on low-carbon vehicle choice, "eco-driving" and
low-carbon transport modes should become a priority for the DfT
across all its activities.
— DfT is already doing some good work
to help businesses reduce carbon emissions from road transport.
However, the Department should implement a more strategic approach,
targeting larger companies at Board level.
— Delays in obtaining State Aid approval
for clean vehicle grant programmes have hindered our work to promote
cleaner, lower carbon vehicles.
— Fiscal reforms are needed—Vehicle
Excise Duty should be reformed to better incentivise low-carbon
cars, and Bus Service Operators Grant should be reformed to incentivise
low-carbon buses
— More integrated delivery is important.
Funding for vehicle technology demonstrations should be integrated
to one body, and the delivery of strategic business transport
advice should be delivered in partnership with the Carbon Trust's
work on energy efficiency.
What Progress the DfT is Making Against Key Carbon
Reduction Targets or Forecasts Included in the Ten Year Plan (2000),
the Climate Change Strategy (2000), the 2004 Transport White Paper,
the 2004 PSA, Powering Future Vehicles (2004), and Other Documents
Total carbon emissions from road transport has
stabilised in recent years (figure 1). Within the road transport
sector, emissions from cars have remained relatively stable, as
improvements in fuel economy have balanced increased mileage (figures
2 & 3). The UK has one of the highest average new-car CO2
figures in Europe, and recent improvements in new-car CO2
have slowed down (figures 4 & 5). This, combined with further
increased car travel, may result in road transport CO2
emissions increasing. With these trends in mind, the Energy Saving
Trust believes that the DfT should do more to actively reduce
carbon emissions from road transport, in order to contribute to
the shared Public Service Agreement targets. Our suggestions on
reducing CO2 from transport are summarised below—for
a longer discussion the Committee is invited to see our response
to the Climate Change Programme Review.[13]
One issue specific to the Energy Saving Trust
is State Aid. Of the six grant programmes agreed with DfT in 2004,
only two have so far been approved by the European Commission
and subsequently launched.[14]
Because of State Aid delays, our agreed budget of over £20
million is now likely to be around £10 million for FY 2006-07.
We firmly support the need to go through the State Aid process
as we have no wish to distort the market, and we applaud the efforts
of the UK Government to achieve approval. However, if in the final
analysis clean vehicle grant programmes are deemed unworkable
due to State Aid concerns, then Government should introduce other
mechanisms, such as information, advice and taxation policies.
We summarise our views on these measures later in this response.
Figure 1
UK CO2
Figure 2
ROAD TRANSPORT CARBON EMISSIONS
Figure 3
CAR TRAVEL HAS GONE UP 60% IN 25 YEARS
Figure 4
EU AVERAGE NEW CAR SALES-WEIGHTED CO2,
2002 (ALL FUEL TYPES)
Figure 5
PROGRESS ON NEW CAR AVERAGE CO2
EMISSIONS HAS SLOWED: PRIVATE CAR AVERAGE CO2 IS INCREASING
Whether the DfT's Carbon Reduction Target is Underpinned
by a Coherent Strategy Stretching Across the Department's Entire
Range of Activities
DfT currently offers no consumer advice on low-carbon
transport. Our proposals on consumer advice are summarized further
below. In terms of business advice on transport, the problem is
slightly different: The DfT is doing a lot of good work. However,
we believe their work should be more strategic, and focused at
Board level as well as the operational level.
Currently, the DfT manages four separate business
advice programmes:
1. The Fleet Health Check programme, managed
by the Energy Saving Trust, that promotes more efficient car fleet
management.
2. The Site Specific Advice programme, managed
by the Energy Saving Trust, providing free green travel plan consultancy
services to companies and public sector organizations.
3. The SAFED programme, managed by AEA Technology,
promoting efficient driving to "White Van Man" drivers.
4. The Freight BestPractice programme, managed
by Faber Maunsell, promoting more efficient freight logistics.
All of these programmes provide useful, cost-effective
services. However, none of them target Board level decision makers.
Our research clearly shows that making major changes in environmental
practices in companies requires Board level engagement, and that
transport is frequently given low-priority in company-wide environmental
processes such as ISO 140001.
These arguments are, we believe, accepted by
the DfT, who commissioned us over the past year to scope out a
new strategic approach to promoting low-carbon transport to big
businesses. This project, with the working title of "Transport
Charter", would develop standards for business transport,
which could then be independently audited. We have worked in partnership
with four major UK companies to develop the standards, and have
conducted market research with relevant target audiences. We have
presented our findings to DfT, and strongly urge the Department
to tender and launch such a scheme as soon as possible
We believe that "Transport Charter"
should be brought in as the overall umbrella brand for the various
small programmes currently being run. There are too currently
too many programme brands and websites- each of the four programmes
mentioned above has its own branding and outreach materials. Companies
are constantly bombarded with advertising, and there should be
rationalization of websites and printed materials in order to
increase effectiveness. The Charter approach would get Board buy-in,
and then expert advice and support would be provided at the operational
level.
Finally, we believe that this new strategic
transport programme should be run in partnership with the Carbon
Trust. The Carbon Trust promotes Energy Efficiency solutions to
major UK businesses, approaching at the Board level—exactly
the same audience to be targeted with the Transport Charter. Combining
energy efficiency and transport advice and support in an overall
"carbon management" approach would be more cost-effective
to run, would provide one simple brand for companies to understand,
and would generate bigger carbon savings than looking at one sector
in isolation.
Whether the current balance of expenditure between
the DfT's objectives (as revealed in its 2005 departmental report,
Annex A) adequately reflects the environmental challenges it faces
(see note 3);
As a body funded to do transport work by DfT
we do not feel it is appropriate for Energy Saving Trust to comment
on DfT funding priorities.
What realistically the DfT could achieve by 2010
and 2020 in terms of reducing transport-related carbon emissions
and the role that demand management should play in doing so; and
What specific steps the department should now
take to reduce road transport carbon emissions and congestion
over the next decade.
We answer these two questions together. For
clarity, we find it helpful to approach the question of how to
reduce carbon emissions from transport into three areas:
1. Low-carbon vehicles and fuels
2. Efficient driving style (eco-driving)
3. Modal shift (lower-carbon modes of transport)
1. Low-carbon vehicles and fuels
1.1 Proposals to promote low-carbon vehicles
are addressed in the section on Powering Future Vehicles, below.
1.2 On low-carbon fuels we would simply note
that we welcome the Government's commitment to the Renewable Transport
Fuel Obligation, and the associated sustainability and carbon
assurance scheme. We support the inclusion of all types of sustainable
biofuels, including Biogas and Bioethanol, in the obligation.
In addition we would note that we currently run an Infrastructure
programme promoting alternative fuels in the UK.[15]
2. Eco-Driving
The Energy Saving Trust believes that all drivers
should be trained in efficient driving (eco-driving) techniques,
through the driving test curriculum and promotion to current license
holders. Efficient driving saves money, fuel, and carbon.
There is a large gap for training and advice
for existing drivers. There are two ways the DfT could approach
this. The first option would be to deliver eco-driving information
through the Energy Saving Trust. We have shown over our 10 years
of work promoting energy efficiency, that a combination of national
campaigns and local advice is highly effective. The Energy Efficiency
Advice Centre (EEAC) network is already connected with a receptive
target audience and can reinforce national messaging with face
to face advice, plus signposting to local providers of driver
training. In terms of eco-driving, we have experience in driver
training work through the Fleet Health Check programme, and the
eco-driving message is a good fit with our existing energy saving
work. We have recently secured EC funding as a partner in the
"ECODRIVEN" project, which provides a small budget to
develop marketing materials and public information campaigns on
eco-driving.
The second option would be to integrate eco-driving
into current campaigns. The DfT currently (and rightly in our
view) promotes safe driving through the "Think!" campaign.[16]
One option would be for DfT to incorporate eco-driving into this
campaign—since for the most part safe driving requires similar
techniques to eco-driving. The Dutch have had success with this
approach, with a national campaign around "new" driving,
incorporating efficiency and safety. However, national information
campaigns alone are not enough- a recent Society of Motor Manufacturers
and Traders poll showed that nearly a third of drivers have not
worn a seatbelt while in a moving car at some time in the last
year.[17]
2.2 New Drivers—Implement Eco-driving
module as part of testing
The Driving Standards Agency (DSA) has the key
role in setting the curriculum for new drivers, and training driving
instructors. The DSA has made excellent progress in incorporating
eco-driving into instructor training, and should now build eco-driving
into the new driver curriculum and test. Around 700,000 people
passed their test in 2004-05 but the number of license holders
has stayed fairly static at around 30 million for the last few
years as older people relinquish their licenses and young people
pass their tests.
2.3 Business Vehicle Users
It is crucial to reduce emissions from employee
vehicles- be it fleet cars or "grey fleet" (using own
vehicles for business use). We run a successful Fleet Health Check
programme that covers these issues, and aim to expand this work
going forward.[18]
As noted above, our ideal solution would be for DfT to launch
a more strategic business transport advice programme to secure
Board-level commitments to reduce transport carbon emissions.
Our Fleet Management work would then play a role in delivering
that overall strategy.
3. Modal Shift: Increase use of lower-carbon
modes of transport
3.1 Improve public transport provision and
information to consumers
Our consumer research reinforces the point that
if people are to be convinced to leave the car at home, then they
need to know that they can rely on safe, reliable and affordable
public transport. Often, people are simply not aware of the public
transport options available, or have an unduly negative perception
of public transport, particularly buses. We applaud the steps
the Government and private sector operators are taking to invest
in and improve public transport.
We see our role as "signposting" consumers
to sources of public transport information through our advice
centres, and integrating effective transport messages into our
energy saving campaigns directed at households. Finally, the DfT
has a great opportunity to build on the successful Transport Direct
website to promote low-carbon transport modes. Currently, carbon
emissions of different modes are not displayed: these should be
included, and there should be more promotion of the need to choose
low-carbon transport.
3.2 Implement discount schemes for road
pricing/congestion charging
We support the use of road pricing to cut congestion,
and to encourage cleaner, lower carbon vehicles. Currently EST
has a key role in delivering accreditation for discount schemes
for cleaner, lower-carbon vehicles in London.[19]
This role could easily be expanded to other towns and regions
implementing charging regimes. We recognise that these discount
schemes will be a limited incentive for cleaner vehicles, since
local areas will rightly need to limit the number of discounted
vehicles in order to achieve the primary aim of congestion reduction.
However, they could still provide a useful incentive.
3.3 Business/Public Sector employee travel
The DfT should require local transport authorities
to prioritise workplace travel plans (and other "smarter
choices") policies through second-round LTPs. Work to promote
green travel plans should be included as a key component of the
broader, more strategic approach to reducing business transport
carbon emissions summarised above.
Whether the targets set out in the Powering Future
Vehicles strategy were adequate and what progress has been made
against them since 2002;
PASSENGER CARS
Performance to-date
The targets set for passenger cars were ambitious,
aiming as they did for 10% of new cars to be sub-100gCO2/km
by 2010 (label Band A). Given that roughly 2.5 million cars are
sold per year (although this is falling) this means roughly 25,000
low-carbon car sales would be required to meet the target. Currently
sales of Band A cars are almost too low to register in the figures—SMMT
estimate that only 481 were sold in 2004—around 0.02% of
total sales.[20]
Structure of the target
The PFV target is a helpful complement to the
fleet average targets set by the Voluntary Agreements between
the car industry and the European Commission. In hindsight, perhaps
the 10% Band A target was unrealistic—however the UK should
do all it can to make progress toward this target, regardless
of whether in the final analysis the full target is met. The target
is due to be revised this year. We would support an ambitious,
achievable target, set either as a percentage of low-carbon vehicles
sold, or as a fleet-average target.
Grant programme delayed by State Aid
One key problem with the market for low-carbon
cars is low demand. We have sought to increase demand, and have
been attempting to launch grant-incentive and consumer information
programmes for the last two years. Specifically, we have proposed
a new low-carbon car grant programme, designed explicitly to help
meet the PFV target by providing grants and consumer information
on low-carbon vehicles. Our proposal, which had support from the
Low Carbon Vehicle Partnership, was broadly accepted by DfT. However,
at time of writing the grant funding part of the programme has
not received State Aid approval.
Consumer information urgently required
We strongly believe that more consumer information
on low-carbon vehicles is urgently needed, building on the success
of the recently-introduced CO2 label for new passenger
cars. We have proposed to DfT that we should launch a Cleaner
Vehicle League Table, again with widespread Industry and other
Stakeholder support, which would provide consumer advice and information
on the lowest-carbon cars in each vehicle class. It is vital that
an initiative like this receive Government backing, to reassure
consumers that it is independent and impartial. We hope that DfT
will approve our proposals for consumer information on car buying
shortly. There is strong vehicle industry support for better consumer
information on low-carbon cars—see for instance the recent
CARS-21 high-level report on competitiveness in the European car
industry.[21]
Fiscal Reform
We strongly support reformed fiscal measures
to provide greater incentives for low carbon cars and disincentives
for high-carbon cars. Our priority would be to introduce greater
differentials between Vehicle Excise Duty (VED) bands and an additional
band for cars above 210g/km.[22]
Recently the RAC Foundation became the first major motorist's
organisation to call for similar reforms.[23]
Certificate Trading
In the longer term other measures to incentivise
low-carbon cars should be considered. We believe the ideal scheme
would be long-term and not reliant on Government funding (either
through tax concessions or grant subsidies). A scheme that could
deliver this is "certificate trading"—where manufacturers
would gain certificates by selling low-carbon cars or purchase
certificates to enable them to sell high-carbon cars. The certificates
could then be traded, creating a new revenue stream for manufacturers
producing and selling low-carbon cars.
Key market trends[24]
The single most important trend, in our view,
was discovered in our 2004 research paper "Passenger Cars
and CO2"[25]—namely,
that average CO2 emissions of new cars sold to the
private consumer sector are increasing, while the average CO2
of cars sold to the business sector is continuing to fall (see
figure 4 above). This trend has subsequently been reaffirmed by
the SMMT. The UK has one of the highest average CO2
figures in the EU (figure 5 above).
Other key trends are fall in sales of Superminis
over the last year (figure 6), symptomatic of lower sales to private
customers, a lack of new models in this segment and lower consumer
spending and confidence. Sales in each VED band were down in 2005
compared to 2004, apart from Band D, one of the higher-CO2
bands (figure 7).
Figure 6
SALES BY MARKET SEGMENT 2004 & 2005
Figure 7
CAR SALES BY VED BAND 2004 & 2005
BUSES
Sales are not on track to hit the target
EST fully supports the PFV target for buses
(10% low-carbon buses[26]
sold by 2012—around 600 a year). It is vitally important
to get low-carbon buses into the UK passenger transport market.
However, as with passenger cars, on current trends this target
is unlikely to be met. To our knowledge, only three demonstrator
vehicles (all series diesel hybrid) have met the low-carbon buses
test standard, and some of these are entering the market—we
estimate about 23 were sold in the last year.
Can public procurement help?
Outside London the bus market is de-regulated,
ruling out public procurement as a means to meet the target. In
theory TfL could include a requirement for low-carbon buses as
part of a tender requirement for London bus routes; it is unlikely
that London could meet the target on its own.[27]
The Scottish Executive is currently considering whether to introduce
emissions standards as part of bus licensing arrangements—this
could be another potential way to require low-carbon buses, however
the first important step is to set cost-effective and achievable
air pollution standards.[28]
Fuel savings will not pay back the cost premium
for a low-carbon bus
In the current industry structure, private sector
bus companies are highly unlikely to spend a premium on a low-carbon
bus. The premium varies, but as a guide, the premium cost could
be up to 70% higher than conventional buses- although these costs
could reduce with much greater production and sales volume. Operators
will not see a payback on this investment because Bus Service
Operators (BSOG) rebates 80% of the cost of fuel duty each year,
which means that fuel economy is not a significant issue for bus
companies. EST has commented on BSOG extensively in the past,
and recommended its reform to a mileage based subsidy.[29]
Reform is unlikely in the foreseeable future—indeed the
2004 Transport White Paper ruled out BSOG reform.
The DfT accept that these market barriers exist,
have tried to overcome the BSOG barrier by providing purchasing
grant incentives through a proposed Low Carbon Bus programme.
Sadly however the scheme has not yet received State Aid approval.
To conclude, if BSOG remains as it is, and assuming no major change
in bus regulation outside London, then without grant incentives
it is hard to imagine the PFV Bus target being met.
What organisations and funding sources are involved,
whether there is adequate coordination between them, and whether
the overall funding available and spent in support of the strategy
is adequate in view of the environmental challenges DfT is facing
One important issue is funding for vehicle technology
and demonstration programmes. We would support the consolidation
of Energy Saving Trust Technology Programme[30]
with the new Centre of Excellence,[31]
to deliver the most effective approach and ensure the best possible
value for money for these schemes. The "virtual network"
and intelligence sharing approach of CENEX could compliment the
practical demonstration project experience of the Energy Saving
Trust, to deliver more "bang for the buck" in terms
of demonstration projects.
As noted above, we would support a more strategic
approach to delivering transport carbon reduction advice and support
to big business. Ideally this would be delivered in partnership
with the Carbon Trust's work on energy efficiency.
February 2006
13 Available at http://www.est.org.uk/aboutest/publications/consultations/ Back
14
For a full update on where we stand on State Aid approval, please
see http://www.est.org.uk/fleet/funding/ Back
15
See http://www.est.org.uk/fleet/funding/infrastructurep/ Back
16
See http://www.thinkroadsafety.gov.uk/ Back
17
Available at: http://lib.smmt.co.uk/articles/news/News/SMMT%20Final%20Tickbox%20Report.pdf Back
18
See http://www.est.org.uk/fleet/healthcheck/ for more information Back
19
See http://www.est.org.uk/fleet/funding/lcc/ for more information Back
20
SMMT, "UK new car registrations by CO2 performance-2005
edition" http://lib.smmt.co.uk/articles/sharedfolder/Publications/CO2Report%20New.pdf Back
21
http://europa.eu.int/comm/enterprise/automotive/pagesbackground/competitiveness/cars21finalreport.pdf Back
22
Our detailed VED reform proposals are available here: http://www.est.org.uk/uploads/documents/aboutest/VED%20Reform%20-%20Options%20and%20opportunities.pdf Back
23
See press release http://www.racfoundation.org/index.php?option=com-content&task=view&id=342&Itemid=35 Back
24
EST holds detailed data on new-car sales and CO2 emissions,
and would be happy to provide further analysis to the EAC. Back
25
Available on line at http://www.est.org.uk/uploads/documents/aboutest/EST-IEEP-VED-Report.doc Back
26
Defined as 30% lower-greenhouse-gas than an equivalent conventional
diesel bus over an established test cycle Back
27
TfL already require buses to meet Euro III standards Back
28
There is a consultation currently ongoing-see http://www.scotland.gov.uk/Publications/2006/02/09152104/0 Back
29
Our response to the 2002 review of bus subsidies is available. Back
30
See http://www.est.org.uk/fleet/funding/lowcarbonresearch Back
31
http://www.cenex.co.uk/ Back
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