House of Commons - Environmental Audit

Select Committee on Environmental Audit Minutes of Evidence

Memorandum submitted by ATOC, The Railway Forum and RSSB

RESPONDEES

1. This is a joint submission on behalf of the UK rail industry to the EAC Inquiry Reducing Carbon Emissions from Transport by:

1.2 The Association of Train Operating Companies. As the voice of the passenger railway, ATOC represents train companies to the government, regulatory bodies, the media and other opinion formers on transport policy issues. It also provides its members with a range of services that enable them to comply with conditions laid on them in their franchise agreements and operating licences.

1.3 The Railway Forum. The Railway Forum is the industry-wide body promoting the growth of a safe, efficient and affordable railway in the UK. It represents the majority of the industry including operating companies, rolling stock leasing companies (ROSCOs), equipment suppliers, Network Rail and Transport for London. Both ATOC and The Railway Industry Association (RIA) are members and play a full part in Railway Forum activities.

1.4 Rail Safety and Standards Board (RSSB). RSSB was set up following one of the primary recommendations from Lord Cullen's Inquiry into the Ladbroke Grove accident. Their primary objective is to lead and facilitate the railway industry's work to achieve continuous improvement in the health and safety performance of the railways in Great Britain, and thus to facilitate the reduction of risk to passengers, employees and the affected public. Laterly RSSB has been drawing together industry consensus on tackling the issue of sustainable development.

SUMMARY

2. Rail provides a key part of the solution to reducing carbon emissions from transport overall. Crucially rail performs particularly well against other modes on carbon emissions per passenger or freight tonne km.[1] As such modal shift from road and air to rail can deliver significant carbon reductions from transport overall. In addition there are several areas where, given the correct incentives, short-term improvements to the environmental efficiency of the existing railway can be made. Over the long term rail also has enormous potential to adopt emerging low carbon power sources such as low carbon electricity, hybrid engines and possibly fuel cell. However what is currently lacking is a clear Government strategy setting out rail's role in a low carbon transport system. Clearly this strategy must be overarching, covering all modes and addressing the linkages and dependencies between them. It is also important for Government to ensure that the regulation of emissions is clear and consistent, for example by addressing the current conflict between reducing local air pollution and improving engine efficiency.

2.1 We have tried to focus our response as closely as possible on the strategic issues identified by the Committee as being of particular interest. Our comments on these are set out in more detail below.

What progress is the DfT making against key carbon reduction targets or forecasts included in the 10 Year Plan (2000), the Climate Change Strategy (2000), the 2004 Transport White Paper, the 2004 PSA, Powering Future Vehicles (2004), and other documents?

3. The UK Government has a long-term goal to reduce carbon dioxide (CO₂) emissions by 60% by 2050 with real progress by 2020. This goal is underpinned by two UK targets:

— the Kyoto Protocol target to reduce UK greenhouse gas (GHG) emissions by 12.5% below base year levels over the period 2008-12, and

₂

Both of these are PSA targets for the DfT (joint with Defra and DTI).

3.1 Latest projections show that the UK is on course to meet its Kyoto GHG target, however, we are not on course to achieve the national 2010 goal for CO₂ emissions reduction. Very recent estimated projections, show that CO₂ emissions are expected to be about 10.6% below 1990 levels.[2]

3.2 The transport sector—excluding international aviation—is currently responsible for about a quarter of total UK CO₂ emissions, with the percentage of this figure attributable to road around 95%. In comparison railways account for less than 1% of CO₂ emissions from transport.[3]

3.3. CO₂ emissions from road transport grew by some 10% between 1990 and 2000, and are expected to grow further, by another 9% or so between 2000 and 2010. As emissions from most other sectors are forecast to fall in the same period, transport's share of total emissions is likely to increase. The key drivers of changes in CO₂ emissions from road transport through to 2010 are expected to be reductions in real fuel prices combined with income growth, which would more than offset the impact of policies to improve the fuel economy of vehicles.[4]

3.4 Given these recent trends and likely future projections it would therefore appear that, whilst achievement of the Kyoto target on GHG emissions is on course, little progress has been made towards meeting the domestic target on reducing CO₂ emissions by 20% below 1990 levels with transport having a key role in this.

Is the DfT's carbon reduction target underpinned by a coherent strategy stretching across the department's entire range of activities?

4. DfT have not yetarticulated a coherent view on the long term role of rail both in terms of carbon emissions and in relation to other modes more generally. The Future of Rail White Paper[5] did not set out a long term vision for rail including the role it might play in helping to deliver a more sustainable pattern of transport use, rather it focussed on short-term structural changes to the industry. Similarly The Future of Transport White Paper[6] published shortly afterward simply reiterated this position yet, interestingly, did set out a more coherent future for other modes such as road and air.

4.1 The current lack of a robust, overarching strategy stretching across all modes will, unless rectified, undermine the important contribution rail is currently making (and the very significant potential contribution it can make in future) to lower carbon emissions. Specific areas where a more robust, joined-up DfT strategy with regard to rail would be beneficial are set out below.

ENVIRONMENTAL REGULATION

4.1.1 There are currently two conflicting pressures in the regulation of emissions from the diesel fleet. On the one had there are specific environmental regulations controlling local air pollutant emissions such as Sulphur dioxide (SO2) and Nitrogen oxides (NOx) through the implementation of the Non-Road Mobile Machinery Directive (NRMMD)[7] and the move to Ultra Low Sulphur Diesel (ULSD). On other hand there are cost and fiscal incentives to reduce CO₂ emissions. The NRMMD sets limits for local air pollutant emissions for new engines. The limits currently in force can be achieved but this is at the expense of efficiency such that new engines emit more CO₂ per seat km than those currently in service. In addition EC legislation is pushing rail to switch to ULSD. ULSD has a different specification to the gas oil currently used and it is thought fuel consumption may rise by up to 5% depending on engine design, whilst fuel prices before tax will rise due to additional refining costs. It is not yet clear whether this will cause a rise in CO₂ emissions but it is nonetheless a risk. These pressures are exacerbated by the desire to make trains more crash resistant (generally adding weight) and improve customer comfort (eg air conditioning etc)—all of these increase energy demand per seat km. This is discussed further in section 5.2.3.

4.1.2 As a result of these pressures the baseline CO₂ emissions from rail are rising. This has to some extent been offset by rising passenger numbers but the fundamental issue is that current regulation of emissions is not holistic rather it sets demanding improvements in both CO₂ and local air pollutants without recognition that these essentially have to be traded off against each other. The existence of this conflict is supported by recent work by the Air Quality Expert Group for DEFRA where it was recognised that measures to improve local air pollutant emissions have caused a rise in CO₂ emissions.[8] It is very likely that technically we are getting to the limit of what can be achieved with the internal combustion engine.

4.1.3 It is therefore vital that the regulation of emissions at EC and UK level considers all emissions to ensure achievable aims and to identify priorities where the control of one emission occurs at the expense of another. The apparently limited ability of the internal combustion engine to achieve both low CO₂ and low SO2/NOx at the same time is also a further reason for DfT to focus on the potential of future power technologies which may be able to achieve a step change in the emissions of all pollutants.

CARBON TRADING

4.1.4 A review is currently being carried out of the European Union Greenhouse Gas Emissions Trading Scheme (EU ETS)[9] and in part this is examining whether to include the aviation sector in the scheme. At present companies are allocated an allowance of total CO₂ each year. Companies have to buy further allocations if they exceed this allowance and can sell allocations if they are unused. It is not clear how transport companies could enter into the market at present, however in order for Government to achieve CO₂ reductions beyond Kyoto agreed levels sectoral targets may be considered. It is therefore important to review how any inclusion of one mode in the EU ETS would work were it to be widened to include other modes.

4.1.5 Assuming transport policy in the UK aims to achieve a modal shift from more polluting modes such as air to less polluting modes such as rail, the successful implementation of this policy will result in more train miles in response to increased passenger demand with the inevitable effect of increasing energy consumption. If in the future rail is included in the scheme under the current rules any increase in CO₂ emissions arising from modal shift or adoption of cleaner, but less energy efficient vehicles, would result in rail having to buy CO₂ from another party. This could have a significant effect on the cost of rail. Should the aviation industry be included in the EU ETS it will be important to think through the basis of its allocation to ensure it does not create a perverse incentive if other modes are included in the scheme at a later date. We would therefore recommend that Government needs to ensure that, if transport is included in the EU ETS, it should be on the basis of CO₂ per passenger or tonne km rather than total emissions. This would encourage increased efficiency in all modes and avoid penalising less polluting modes for expansion (with consequent reductions in journeys made on more polluting modes).[10]

RELATIVE COSTS

4.1.6 Government policy towards public and private transport has had the effect of driving the real cost of public transport up whilst the real cost of motoring remains below 1980 levels.[11] This trend looks likely to continue. The upshot is a situation in which public transport users (particularly in the congested South East) are "taxed" for their behaviour whilst motorists are, in effect, rewarded.

TRANSPORT STRATEGY

4.2 Overall the key issue remains the need for a robust long-term strategy for transport and rail in particular. Looking out to 2020 one might postulate an scenario which sees the UK with Crossrail, a London-Midlands leg of a new high speed line, increases in London rail capacity, nationwide road pricing, designated freight routes and further improvements to intercity routes etc. All this would point to a significantly enlarged role for rail with correspondingly large carbon emissions wins. However this kind of vision (or something similar) has not yet been articulated by DfT; until it is, efforts to reduce carbon emissions from transport will ultimately be stymied.

What realistically can the DfT achieve by 2010 and 2020 in terms of reducing transport-related carbon emissions, and what role should demand management play in doing so?

5. Rail can help to achieve significant reductions in carbon emissions from transport, both in the short and long term. There are three broad mechanisms available to DfT in this regard:

1. Transferring passengers and freight from other more polluting modes.

2. Improving the efficiency of the current rail system.

3. Developing future low carbon power technology for the rail sector.

In order for these mechanisms to deliver maximum carbon benefit underpinning all of this must be a proper DfT-led transport strategy setting out the long-term role for rail within a sustainable transport system. Without this, efforts to shift passengers and freight onto rail or to develop more environmentally beneficial rail traction systems will ultimately fail.

TRANSFER OF PASSENGERS/FREIGHT FROM OTHER MODES

5.1.1 Rail's superior CO₂ performance over other modes on a per passenger/tonne km basis means that transfers from road and air to rail can deliver significant reductions in CO₂ from transport overall. Over the last 10 years there has been growth of more than 40% in passengers and 50% in freight on the rail network with, in broad terms, only 20% additional services. Looking to the future, forecasts by TfL show that some 1,500 extra carriages will be capable of absorbing the demand from a projected population increase of 1 million in London over the next decade or so. Thus rail's ability to carry significant loads, particularly in urban areas, means that no other mode can feasibly sustain this level of growth without significant environmental impact.

5.1.2 Key to achieving long-term and large-scale modal shift to rail (and concurrent reductions in CO₂) is investment in expanding rail capacity. A key issue in this context is the potential to transfer short haul air traffic to rail by investing in a high speed rail network in the UK. High speed rail has both a far greater carrying capacity than short haul air and is demonstrably cleaner in terms of carbon emissions: one Eurostar train carries the equivalent of five short haul aircraft and emits some 10% of the CO₂ from short haul planes per passenger carried. The removal of significant amounts of short haul domestic air traffic would therefore help to achieve large reductions in carbon dioxide emissions from these trips (with increased gains when considering aviation emissions are up to three times more harmful at high level than ground-based emissions).[12] Experience from both the continent and CTRL in the UK shows that this type of step-change can be achieved: many airlines have withdrawn or severely reduced services on routes served by high-speed rail.[13]

5.1.3 The Eddington Transport Study recommendations will be a key driver in deciding whether to take high speed rail forward in the UK. However of real concern is the narrow remit of the Eddington Study and in particular the seeming reluctance to examine the environmental and social benefits (in addition to the purely financial benefits) of transport infrastructure investment. DfT should therefore ensure that any future decision on high speed rail is based on the widest range of sustainable development benefits incorporating the significant contribution high speed rail can make to reducing carbon emissions, particularly from aviation.

5.1.4 There is also a clear need for both land use and transport planning to be closely linked in order to ensure the most sustainable transport solutions are adopted. A key example here is the ODPM's Sustainable Communities Plan:[14] significant new housing developments eg in the Thames Gateway need to be supported by adequate transport infrastructure. As already noted in many cases rail, with its very high carrying capacity, provides the only sustainable means for linking new housing developments with jobs in the major urban centres (particularly London).

5.1.5 Modal shift will only be achieved by genuine transport integration both in terms of physical assets and services and also virtual integration through improved information provision. More could be done by DfT to integrate modes at both a strategic and local level. In this context the recent Foresight Intelligent Infrastructure Futures project[15] is of particular interest. The work has identified how science and technology might be applied to transport infrastructure in order to meet a range of objectives including environmental sustainability. It is important that DfT engages with this work moving forward in order to fully harness the technology developments identified in future Govt. transport strategy.

5.1.6 Recent Government policy has shifted towards the promotion of localised road pricing as part of a package of measures to manage demand.[16] Similarly, over the longer-term, the feasibility of a nationwide road pricing scheme has been actively considered.[17] Clearly this would have a significant effect in terms of modal shift from road to rail, particularly in urban areas. As a consequence rail must be in a position to meet this increased demand. In light of this DfT must link current strategies for road and rail to ensure that rail is well placed in terms of capacity to respond to this potentially very large shift from road.

IMPROVING THE EFFICIENCY OF THE CURRENT SYSTEM

5.2 Accepting that rail is currently an efficient mode we also recognise that improvements can still be made in order to further reduce our carbon emissions per passenger and freight tonne km. Below are some key areas in which rail could, with Government support, further improve efficiency in the short to medium term.

5.2.1 Regenerative braking. One key area affecting carbon emissions identified by the industry is the use of regenerative braking. 50% of the current electric fleet is capable of using regenerative braking but few operate it. This is largely due to the fact that the majority of the cost of enabling the system falls to Network Rail and power companies whilst the savings would accrue to Train Operating Companies. If regenerative braking were enabled across the majority of the network it could achieve up to a 20% reduction in electricity purchased. The rail industry is currently actively pursuing this issue however given the nature of the problem of deployment, whereby costs and benefits accrue to different parties, support from DfT and/or the ORR to address contractual issues could help to release these CO₂ savings in the short term.

5.2.2 Train efficiency is at its peak when services operate at constant speeds with minimal stopping and starting.[18] Thus improvements in network and traffic management, for example through better signalling and the freeing up of bottlenecks could deliver real benefit in terms of total carbon emissions per passenger/freight tonne km. When reviewing investment decisions these types of consideration can and should be built in to DfT's processes.

5.2.3 In the UK the environmental efficiency of new trains has been declining in terms of CO₂ per passenger km as a result of measures to reduce local air pollution (see section 4.1.1) and in terms of weight per seat etc as a result of trains becoming heavier by improving crashworthiness and on-board services (air conditioning, information displays etc). At present there is a trade off to be made between passenger facilities, crash resilience and energy consumption. This is an area where new technology could alleviate some of the trade offs by adopting new lightweight and efficient technology. The specification of the new generation of High Speed Train (HST2) would be an excellent opportunity to ensure that these environmental concerns are incorporated in the design phase.[19]

DEVELOPING FUTURE POWER TECHNOLOGIES

5.3 Looking to the longer term (out to 2020 and beyond) there is a very significant opportunity to improve the carbon performance of rail (indeed perhaps even to make rail travel in the UK zero carbon in the long term) through the adoption of new power technology such as hybrid engines and hydrogen fuel cells.

5.3.1 30% of current passenger traffic in the UK and 95% of current freight traffic is diesel powered. A number of important studies have been carried out recently looking at energy futures and possible future traction options for rail,[20],[21] suggesting a possible development path via hybrid engines to hydrogen. An initial step to hybrid technology would significantly reduce CO₂ emissions and, once a fuel cell hybrid was viable, potentially enable a zero carbon railway (provided hydrogen and electricity could be produced from renewable sources).

5.3.2 70% of current passenger services and 5% of freight services are electric. Carbon emissions from this power source are totally dependent on UK electricity generation mix. Under current contractual arrangements it is not possible for the industry to buy green electricity but with the approval of DfT and ORR this could be adopted as a policy (although with cost implications).

5.3.3 The issue of what type of strategy to pursue in deciding whether the future for power on the railway is through increased electrification with low carbon electricity generation, the conversion of the diesel fleet to new low carbon technologies or some middle ground has as yet to be fully addressed by DfT. The Technical Strategy currently being developed by DfT Rail must consider these issues.

5.3.4 Allied to this debate is a need to ensure the resilience of the network to extreme weather in preparation for climate change. This is to some extent being addressed by the industry in its focus on improved performance. However there remain significant issues in relation to decisions over future electrification which again must be addressed by DfT through their overall strategies and particularly the Technical Strategy for rail as highlighted above.

Does the current balance of expenditure between the DfT's objectives (as revealed in its 2005 departmental report, Annex A) adequately reflect the environmental challenges it faces (see note 3)?

6. We believe much of this issue has been addressed in our answers above, particularly those relating to the current lack of a coherent overall transport strategy. In addition we would stress that the wider environmental benefits of rail are often not fully incorporated in current Government funding and investment appraisal. The result is an imbalance as reflected in the DfT's current expenditure.

What specific steps should the Department now take to reduce road transport carbon emissions and congestion over the next decade?

7. See above comments at paras 5.1.1-5.1.6.

8. It is also noticeable that the Department has adopted a mode-specific approach in their strategies to reduce carbon emissions. Thus the Powering Future Vehicles strategy is solely aimed at road and the related funding available from this project is only available for road vehicles. As already suggested above there is the potential both to make the existing railway more carbon efficient and adopt new lower carbon technologies but presently there is no Government funding to progress these ideas. Indeed the DfT's recently released draft Evidence and Research Strategy[22] does not consider any real technological advances for rail: this needs to be rectified if the industry is to be incentivised to develop new, cleaner power solutions.

In relation to the Department's low carbon vehicle strategy, Powering Future Vehicles, the Committee is also specifically interested in:

— whether the targets set out in the Powering Future Vehicles strategy were adequate and what progress has been made against them since 2002;

— 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.

9. See comments at para 8 above.

February 2006