Memorandum submitted by the Freight Transport
Freight Transport Association represents the
freight transport interests of businesses throughout the UK. Its
members range from small and medium size enterprises to multi-national
public companies and are involved in all modes of transport. FTA
members operate over 200,000 heavy goods vehicles, about half
the UK fleet, are responsible for 90% of freight moved by rail
and 70% of goods shipped by sea and air. This unique multi modal
mandate enables FTA to speak authoritatively on all aspects of
freight based on the broader transport needs of industry in the
Latest figures produced by the Department of
Agriculture, Environment and Rural Affairs (DEFRA)
suggest that the UK is on course for meeting its Kyoto target
of reducing total greenhouse gas emissions by 12.5% relative to
the 1990 base year over the period 2008-12. Greenhouse gas emissions
fell steadily throughout the 1990s and by 2000 were 12.9% below
1990 levels. Since then emissions have stabilised.
The UK has been less successful in meeting its
domestic carbon dioxide reduction goal of a 20% fall in emissions
relative to the 1990 base year. Carbon dioxide emissions fell
by 7.3% between 1990 and 2000. Since then they have risen and
in 2004 were just 4.2% below 1990 levels.
1. What progress is the DfT making against
carbon reduction targets or forecasts included in the Ten Year
Plan (2000), the Climate Change Strategy (2000) and the 2004 Transport
The contribution of the main sectors of the
economy towards meeting these two targets shows marked differences.
In particular, road transport has seen its levels of carbon dioxide
emissions (the main source of greenhouse gases from the sector)
stay stubbornly high. The effect has been that road transport's
contribution to total man-made carbon dioxide emissions has risen
from 18.6% in 1990 to 21.3% in 2004.
EMISSIONS OF CARBON DIOXIDE 1990-2004 (MILLION
||% of total man-made
emissions in 2004
|Total man-made sources||160.7
Source: Defra, DfT
The main reasons behind the "stickiness" in carbon
dioxide emissions from road transport over the period have been
Traffic growth: between 1990 and 2004 road traffic on UK
roads rose by 21.4% to 498.6 billion kilometres. Growth in car
traffic accounted for 66% of this increase, light vans 25%, hgvs
6% and other traffic 3%.
Change in composition of traffic: maximum weight articulated
trucks are undertaking a growing proportion of total kilometres
on UK roads. In 1990 goods vehicles with five or more axles accounted
for 19% of total hgv traffic. By 2004, these vehicles accounted
for 40% of hgv traffic.
Change in composition in vehicle stock: The proportion of
vehicles with large, less fuel efficient engines within the total
vehicle stock has risen. In 1990 vehicles with an engine capacity
below 2,000 cc represented 8% of the private car and light goods
vehicle parc. By 2004 this had risen to over 12%.
Improvements in fuel efficiency have failed to counter these
upward pressures on carbon dioxide emissions from the sector.
Average fuel consumption of petrol and diesel
cars has remained static at 30 mpg and 40 mpg respectively. The
limited improvement in overall fuel efficiency (from 31 mpg to
32 mpg) that has been achieved has resulted from the switch from
petrol to diesel cars.
In-use fuel efficiency for rigid hgvs and articulated
hgvs has improved over the period from 8.0 mpg to 8.3 mpg for
rigids and from 6.8 mpg to 7.9 mpg for artics. However, the change
in mix of hgv road traffic has partially offset this improvement
at an aggregated level.
2. Is the DfT's carbon reduction target underpinned by
a coherent strategy stretching across the department's entire
range of activities?
Fuel duty escalator
The Government's principal strategy for tackling carbon dioxide
emissions from road transport during the 1990s was the fuel duty
escalator. The rationale behind the escalator was that by increasing
the price of fuel through fuel duty, consumption of fuel by road
transport would be checked. Between 1993 and 1997, road fuel duty
increased by 5% in real terms each year. From 1997 it increased
by 6% per year, until public and political pressure led to the
mechanism being switched off in 1999. Evidence of any beneficial
effect of the fuel duty escalator on emissions from private motorists
is inconclusive. Between 1993 and 1999, emissions from passenger
cars grew by 2%, to 21.1 million tonnes of carbon equivalent,
whilst car traffic rose by 11%. Following a cut in fuel duty of
three pence per litre in Budget 2001, duty remained unchanged
in 2002 and 2003the overall effect being to reduce fuel
duty by 2.9% in real terms. However, carbon dioxide emissions
from passenger cars have fallen back to 1993 levels (19.8 million
tonnes of carbon equivalent), despite car traffic volumes rising
by a further 5%.
For road freight operators the imposition of the fuel duty
escalator since 1993 has simply added to the cost base of the
sector and served to undermine the competitiveness of the UK economy.
Moreover, there appears to be no link between the imposition of
the escalator and fuel efficiency improvements in the sector.
Carbon emissions from hgvs failed to respond to the fuel duty
escalator between 1993 and 1999. Over the period, carbon emissions
from hgvs rose by 21%, reflecting, for the most part, an increase
in freight activity of 17%, broadly in line with economic growth.
Between 1999 and 2003 (when fuel duty fell in real terms), emissions
from hgvs rose by just 3%, despite hgv traffic rising by 5%.
TRENDS IN TRAFFIC AND CARBON DIOXIDE EMISSIONS: 1993-2003
|Source: Transport Statistics Great Britain, DfT
|NB: mtC = Million tonnes of carbon, bvkm = Billion vehicle kilometres
FTA believes that the level of fuel duty currently faced
by UK hgv operators compared to competitors based elsewhere in
the EU contributes little, if anything, to the UK's carbon dioxide
reduction goals. The deregulated nature of the UK domestic haulage
industry means that the market has always been an intensely competitive
one. Operators will therefore focus on minimising fuel costs (which
typically account for 35% of the cost of running an hgv) to ensure
they can offer an attractively priced service. The intense competitive
pressure that foreign operators are placing on UK carriers, by
virtue of the cheaply taxed diesel that they use whilst in the
UK, adds no extra impetus for UK carriers to reduce fuel use.
Arguably it is proving counter productive. To compete with cheap
foreign haulage, UK carriers must shave costs off other areas
of the businesssuch as delaying vehicle replacement and
running older, more polluting vehicles for longer.
The duty escalator and its legacy of high diesel prices in
the UK relative to our EU competitors, has not encouraged vehicle
manufacturers to produce more fuel efficient vehicles. Motor manufactures
supply to a European market, and will make decisions about the
relative priority of investment in fuel efficiency in the light
of prevailing fuel costs across Europe, rather than unilateral
tax decisions taken by one country. Furthermore, efforts to improve
fuel efficiency have had to taken a back seat to mandatory air
quality (Euro standards) for cars, light commercials and hgvs.
The concerted attempt to improve exhaust emissions since 1993
has focused on particulates, oxides of nitrogen and carbon monoxide.
In the case of an hgv, one vehicle in 1990 emits the same level
of tailpipe pollution as 20 vehicles registered from October 2006,
when Euro 4 became mandatory. it is only since 2001 that the global
warming implications of methane have been reflected in the Euro
standards. It will not be until Euro 6 at the earliest (possibly
in 2012) that carbon dioxide emission criterion will be set.
EURO EMISSION STANDARDS FOR TRUCKS 1990-2009
|Emissions by Euro class g/kWh
|Euro 0 (1990)||11.2
|Euro 1 (1993)||4.5
|Euro 2 (1997)||4.0
|Euro 3 (2001)||2.1
|Euro 4 (2006)||1.5
|Euro 5 (2009)||1.5
FTA does not believe that a "one size fits all"
approach of using price in the form of fuel duty to lever carbon
dioxide efficiency savings from the road transport sector is effective.
In the case of the road freight sector, the policy has resulted
in no clear carbon dioxide saving. Rather it has undermined the
competitiveness of UK businessesalready under intense pressure
from Sterling's strength against the Euro and from developing
countries in Eastern Europe and the Far Eastby increasing
transport costs of the UK road leg. Duty on diesel used by hgvs
in the UK should be brought down to the average level elsewhere
in the EU.
The Department for Transport is the sponsoring department
for a comprehensive suite of free guidance and advice for road
freight operators under the banner "Transport Energy".
DfT funded fuel efficiency work with the industry started in the
1980s when work concentrated on fuel efficiency devicessuch
as vehicle aerodynamics.
Since then the work has extended to embrace initiatives designed
to reduce the energy intensity of road transport activities (for
example, using computerised vehicle routeing and scheduling to
improve resource deployment and minimise vehicle mileage) as well
as measures to improve fuel consumption. The work is generally
project-based, with external consultants engaged to commission
the work and deliver each initiative.
The library of energy efficiency publications is now extensive
and covers best practice case studies, in-service trials, driver
training in fuel efficiency techniques, benchmarking and basic
commercial advice about pricing haulage work. Industry has been
supportive of the initiative and has often actively engaged with
the Department's work in this area.
Freight Transport Association has collaborated with DfT and
its consultants to raise the profile of the "Transport Energy"
work. However, it is clear that the footprint of the work is limited
to the most progressive parts of the industry. Transport Energy
has approximately 1,000 operators which it is in regular contact
with, out of an industry of some 65,000 companies.
The success and value of "Transport Energy" and
previous programmes is difficult to gauge. FTA is unaware of any
overall carbon emission related targets for this work, nor any
specific saving targets for individual publications and initiatives.
Whilst it undoubtedly makes an important contribution to the understanding
of energy efficiency within the sector, its contribution to UK
competitiveness is unclear. There is a strong case for the scheme
to migrate away from a reference resource for the well initiated
and provide hands-on practical help to operators in controlling
costs and ensuring business sustainability. However, even then
it falls a long way short of offsetting the commercial pressure
created by the legacy of the fuel duty escalator.
Use of gas as a road fuel
During the 1990s industry invested heavily in the development
of gas powered commercial vehicles as an environmentally attractive
alternative to diesel engines vehicles. The uptake of gas powered
vehicles was influenced, in part, by the Government's duty treatment
of road fuel gas. Duty of cng and lng road fuel gases was frozen
in the 1997 and 1998 Budgets and reduced by 29% (7.2p per kg)
in the 1999 Budget.
The 2004 Budget announcement that the Government had reassessed
the environmental attractiveness of gas and that the duty differential
for liquefied petroleum gas (lpg) would narrow against conventional
fuels over the period 2004-05 to 2007-08 has left operators who
invested in this technology high and dry. Operators make fleet
specification decisions on whole life costs of the asset. The
change in tax treatment for gas leaves such operators with a ratchet
increase in gas duty each year and a much lower residual value
for the vehicle than originally anticipated.
The net result is that operators are now wary of alternative
technology where Government support has been pledged; for fear
that support could be removed as quickly as it is given.
Future long-term decisions about relative duty levels on
road fuels must be signalled sufficiently far in advance to allow
industry to adjust its vehicle acquisition and replacement policies
to achieve the lowest whole life cost for its vehicles.
3. What realistically could the DfT achieve by 2010 and
2020 in terms of reducing transport-related carbon emissions,
and what is the role that demand management should play in doing
Carbon dioxide emissions from transport to 2020
Carbon dioxide emissions trends from transport since 1990
suggest that overall levels of emissions have been largely unresponsive
to policy initiatives targeting at this sector. On this evidence,
and with no other policy instruments and initiatives in place,
carbon dioxide emissions from transport are likely to remain stable
at best, assuming current DfT projections of 2.2 to 2.9% annual
road traffic growth continue. Recently commentators have suggested
that provisional traffic figures for 2005 showing a stabilisation
in activity is linked to the higher world oil prices. It is too
early to say whether such a link does exist and whether the traffic
levels will remain broadly static if high oil prices persist.
Arguably the most effective way of delivering carbon dioxide
cuts, without undermining competitiveness, is through tackling
emissions from fixed sources, principally the energy industry.
It is in this sector where most of the carbon dioxide emissions
savings since 1990 have been made. Although a significant carbon
dioxide emissions reduction has also been recorded by "other
industries", part of this fall reflects the decline in UK
manufacturing over the period.
The role of national road charging
The Government's plan for national road pricing by 2020 has
the potential to reduce carbon dioxide emission from transport
through influencing travel behaviour. However, the likely effects
are not clear-cut.
The experience of London congestion charging on congestion
levels suggests that whilst private car traffic in the congestion
charging zone has fallen since the introduction of the charge
in 2003, traffic by vans and hgvs has remained unchanged. These
vehicles are entering the charging zone to service customers and
consumers in central London and journeys are not discretionary.
The effect of a national road pricing scheme on passenger
transport is dependent on availability and choice of alternative
modes. In London, where choice exists, public transport patronage
has risen. However, where no alternative modal choices exist,
the main effect of demand management will be to displace traffic
into quieter periods of the day/night when charges are lower,
or onto different roads that attract a lower charge at the same
time of the day. The spatial distribution of families, work and
leisure means demand management is unlikely to prevent journeys
taking place all together.
As far as FTA can see, existing policy measures alone are
unlikely to yield a marked reduction in carbon dioxide from transport.
The experience of London congestion charging suggests that demand
management through road pricing can have a marked impact on certain
road users. However, to be effective road users need credible
alternatives to private cars.
4. What specific steps should the Department now take to
reduce road transport carbon emissions and congestion over the
FTA believes that much more can and should be done to ensure
that transport plays a fuller role in reducing carbon dioxide
emissions. Specific initiatives identified by FTA which would
reduce emissions from freight transport include:
To establish a methodology framework to rank carbon dioxide
emissions from alternative power trains and in different driving
conditions. This would enable a consistent approach to be developed
in assessing the impact of carbon dioxide emissions on different
policy and technology scenarios.
Introduction of 100% enhanced capital allowances for energy
saving investments for road freight vehicles and systems.
This would incentivise:
fitment of aftermarket equipment such as vehicle
investment in the latest, most fuel efficient
and cleanest Euro 5 hgvs. The development of Euro 4 technology
means that next generation Euro 5 emission standard vehicles are
now also available on the market. There is evidence from Germany
and the Netherlands that where the fiscal incentives are appropriate,
operators will "leapfrog" Euro 4 standards and move
straight to Euro 5. In Germany the fiscal incentive has been in
the form of a lower level of MAUT road user charge. In the Netherlands
operators have been encouraged to adopt the cleanest technology
through enhanced capital allowances.
Reduction in stop-start driving by hgvs. Stop-start driving
by hgvs is considerably less energy efficient than steady driving.
Measures that can be deployed on the existing road network include
no-car lanes, encouragement to use freer flowing toll roads and
smart toll plazas to minimise queuing vehicles. However, investment
in additional capacity, through accelerated delivery of the Department's
Targeted Programme of Improvements as well as large scale infrastructure
projects of national importance such as the widening of the M6
North of Birmingham also form a crucial part of the overall policy
Promotion of Freight Quality Partnerships (FQP) best practice
at local level. Existing FQP best practice in terms of measures
to reduce carbon dioxide emissions from hgv traffic includes:
encouraging deliveries outside peak hours;
relaxation of night-time delivery curfews;
freight priority routes; and
clearer direction and warning signage on routes
used by hgvs.
Examination of the potential role of longer, heavier vehicles.
A full evaluation is needed on the role in the UK of the European
Modular System of hgv design which enables 25.25 million vehicles
at, up to, 60 tonnes. These vehicles are being evaluated in a
number of European countries including the Netherlands. DfT has
signalled its interest in the system, but has yet to give the
go-ahead for an in-service trial over designated routes.
Driver training and simulators. Driver training has been
shown to deliver fuel efficiency benefits of up to 10%. However,
maintaining changed styles to driving is time consuming and costly.
Wider use of driver simulators could provide operators with a
training resource which does not take drivers and vehicles off
the road for prolonged periods of time.
Creating the right commercial environment for rail freight.
Rail freight offers important carbon dioxide savings over road
freight for certain movements and can offer a commercially attractive
congestion bypass for the shipper. DfT must ensure that freight
operators are able to secure the train paths they require and
provide a grant regime that reduces investment risks for new and
existing rail customers.
UK climate change sustainable development indicator-2004 Final. Back