Memorandum submitted by Modec
ABOUT MODEC
— Modec is an independent vehicle manufacturer.
The core team, led by Chairman Jamie Borwick, previously developed
the iconic TX1 London taxi.
— Modec has designed and developed
new 50 mph, 120 mile range zero-emission electric vehicles. The
first model is an electric van (The Modec Van), designed for use
specifically in congested urban areas. This will be launched for
sale at the Commercial Vehicle show in April 2006.
— An electric-powered bus is also being
developed for release later in the year. Similar in design to
the van, it will operate like a minibus with up to 16 seats, and
is intended for use as a shuttle van by councils, hotels, airports
etc.
— Modec's predecessor, the e-Mercury
project, received a grant of £693,000 from the Energy Saving
Trust for research and development. This grant enabled three prototype
vehicles to be produced in 2004. Since then, neither e-Mercury
nor Modec has received any financial assistance from the Government.
Executive Summary
— Modec is an independent vehicle manufacturer
of 50 mph, 120 mile range zero-emission electric battery powered
vehicles. The first to be launched will be the Modec Van, designed
as a light commercial vehicle specifically for sustained urban
use.
— Operating as a mains-rechargeable
vehicle, with the potential to be entirely powered from renewable
energy, the Modec Van would save 66 tonnes of CO2 being
emitted into the atmosphere per vehicle over a 12 year working
life.
— Lower emissions could be achieved
for CO2, and local pollutants such as NO2 and PM10,
if Government programmes clearly targeted different types of alternative
vehicles for different driving uses, most notably zero emission
vehicles for urban use.
— A stable and secure fiscal and regulatory
environment is essential to help increase the market penetration
of zero emission and low carbon vehicles.
— Measures that could help increase
the commercial take-up of electric vehicles include:
— Sustained financial incentives to allow
forward planning.
— 100% first year capital allowance for
low carbon vehicles from HMRC.
— Re-instatement of the PowerShift grant
programme, focused on emissions outcomes.
— Exemption for battery weight in applying
restrictions to the driving of light goods vehicles.
— The Government wants the UK to lead
the global shift to the low carbon economy, building competitive
advantage for Britain's our automotive industries. Modec is offering
a product for immediate market use that is capable of dramatically
reducing carbon emissions and eliminating local air pollutants.
— Modec hopes that the Government will
enable innovative companies like us to compete with established
market players in offering quality vehicles at a reasonable price,
thereby ensuring that zero emission and low carbon vehicles start
to reduce the environmental impact of road traffic sooner rather
than later.
INTRODUCTION
1.1 The Prime Minister said in his Foreword
to the Government's 2002 Powering Future Vehicles strategy that
". . . the UK should lead the global shift to the low carbon
economy, building competitive advantage for our automotive industries"
1.2 As a small, independent manufacturer
Modec is keen to play its part in helping the UK become a world
leader in zero emission commercial vehicles.
1.3 Recent Government-led programmes to
encourage low carbon emission vehicles have tended to neglect
electric vehicles. This may in part be due to misconceptions associated
with old fashioned milk floats; but is probably more indicative
of a desire to focus on new, blue-sky technologies, such as fuel
cells, that are as yet unproven in commercial use.
1.4 However, battery powered electric vehicles
offer an immediately available, viable solution for reducing emissions,
combining zero local pollution with ease of "refuelling"
from an existing infrastructure that can draw on sources of renewable
energy to also deliver zero CO2 emissions.
1.5 Modec's hope is that the Powering Future
Vehicles strategy can now be expedited for Light Goods Vehicles.
Slow progress with the strategy has been made to date, notably
in the car sector, but with limited assistance, existing electric
vehicle technology could deliver substantial reductions in CO2
emissions from the Light Goods Vehicles sector.
1.6 Modec's aim is to offer commercially
viable, innovative solutions to the problems of greenhouse gas
and other polluting emissions from commercial road vehicles. As
an entrepreneurial British company, keen to play an immediate
role in bringing zero emission vehicles to the marketplace, we
look to the Government to ensure that a stable and secure fiscal
and regulatory environment is in place. This will enable ourselves,
and companies like us, to compete with established market players
in offering quality vehicles at a reasonable price, thereby ensuring
that zero emission and low carbon vehicles start to reduce the
environmental impact of road traffic sooner rather than later.
THE MODEC
VAN
— The Modec Van will save 66 tonnes
of CO2 being emitted into the atmosphere per vehicle
over a 12 year working life.[43]
Operators are able to easily obtain their electricity from renewable
sources, including wind, wave, hydro and biomass options.
— The top speed of the Modec Van is
limited to 50 mph, a safe and appropriate maximum speed for driving
in urban environments. It has a 70Kw motor that delivers 300Nm
of torque, and therefore has no difficulty accelerating from stationary.
— The Modec Van is able to deliver
a driving range of around 120 miles with a typical load.
— The battery has an average life span
of around four years of heavy duty use (1,000 full charging cycles).
Customers, however, will rent the battery and have it replaced
when necessary.
— Compared to a hybrid vehicle, like
the Toyota Prius, the Modec Van operates solely on electric power.
The Prius is only able to travel one mile in pure electric battery
mode, at a top speed of 34 mph. Its battery has a 1.78 Kwh capacity,
compared with 85 Kwh in the Modec van.
Response to strategic issues raised by the Committee
2. What progress the DfT is making against
key carbon reduction targets; whether the targets set out in the
"Powering Future Vehicles" strategy were adequate and
what progress has been made since 2002
2.1 The Powering Future Vehicles strategy
(2002) is the key document with specific targets to reduce carbon
emissions from road vehicles. The strategy brings a welcome focus
to the automotive industry's efforts to bring low carbon emission
vehicles to the commercial market.
2.2 The initial strategy set two specific
targets to reduce carbon emissions from cars and buses, and commits
to develop other targets, including ones for ultra low carbon
cars and for light goods vehicles.
2.3 Progress since 2002 has been disappointing.
2.4 For example, the Third Annual Report
on the strategy, published in December 2005, in under-stated terms
comments on the 2012 low carbon car target: "it was always
anticipated that progress towards this ambitious target would
be slow…. this has indeed turned out to be the case".
Indeed, in 2004 only 481 vehicles were sold that met the Government's
fuel efficiency target.[44]
This is only 0.02% of all new car sales in 2004; demonstrating
how much progress is needed if the Government's target of 10%
by 2012 is to be met.
2.5 Likewise, the setting of a target for
ultra-low carbon car sales has been abandoned. This is particularly
disappointing given the cited reason that there is: "great
uncertainty as to which technologies will prove successful over
such a long timescale."[45]
Modec recognises that the target is intended principally for technologies
like fuel cells, however electric vehicles like Modec's van are
already "ultra low carbon", particularly when electricity
is sourced from renewable suppliers.
2.6 Moreover, Modec is disappointed that
the Third Annual Report into the strategy can only offer the process
of another "working group" on low-carbon light goods
vehicles. Tangible measures to increase the take up of light goods
vehicles already capable of delivering zero emissions could be
promoted immediately, not least if electric vehicles were esteemed
as highly as other technologies which are not yet technologically,
let alone commercially, proven.
2.7 Modec also notes the scaling back in
reporting the Powering Future Vehicles strategy. Substantial annual
reports were published in 2003 and 2004, with a greatly reduced
report in 2005 coupled with the statement that future progress
on the targets will be reported in the DfT's annual report instead.
2.8 Whilst we recognise it is for the Government
to decide the best way to effectively manage the strategy, we
hope the scaled back reporting is not indicative of reduced commitment
to achieving its objectives. Integration of the strategy into
wider DfT will be welcome if this leads to more joined up thinking
of how to tackle carbon dioxide and other air pollutants emitted
from road vehicles (see section four below).
2.9 Any reduction in assistance for low-carbon
vehicles could seriously affect investment decisions in the industry.
A stable environment, particularly in the durability of financial
support measures is needed to encourage innovation.
Electric Vehicles and the Environment
"Battery vehicles produce no tailpipe (exhaust)
emissions. Furthermore, calculations show they have big CO2
benefits compared to conventional vehicles even when you consider
the emissions from the power stations used to produce electricity
to recharge their batteries."[46]
Battery vehicles can, literally, plug into the
existing electricity infrastructure to access renewable energy.
There are at least eight suppliers of electricity from renewable
sources:
— Scottish & Southern Energy
3. Whether the DfT's carbon reduction target
is underpinned by a coherent strategy stretching across the department's
entire range of activities
3.1 The Powering Future Vehicles strategy
is "founded on focusing on the bottom-line low-carbon objective".[47]
It also states that: "low carbon vehicles will have an important
role to play in delivering air quality improvements, especially
in urban areas."[48]
3.2 Indeed, the Prime Minister in his foreword
to the strategy sets out his vision for: "quiet and unpolluted
city centres, with new vehicles run on clean and sustainable fuels."[49]
3.3 This vision statement by the Prime Minister
raises two key issues that should be central to a coherent strategy
to reduce carbon emissions from transport:
(i) Reducing local air pollution should have
equal significance alongside carbon emission reduction
As the Deputy Prime Minister said, in his foreword
to the Government's Air Quality Strategy, "Air pollution
is a serious problem. Up to 24,000 people die prematurely every
year in Britain because of its effects".[50]
Road transport is the largest source of NOx, with 46% of total
UK emissions in 2001, and the second largest of particulates,
with 18% of total PM10 emissions.[51]
While climate change is undoubtedly the greatest
long term challenge, the increased take-up of vehicles with zero
or low tailpipe emissions will enable other, more immediate, environmental
and health benefits.
(ii) Carbon and other air pollutant emissions
could be reduced more quickly if Government strategy promoted
different types of low emission vehicles tailored for different
journey types.
Vehicle programmes to meet the Government's key
carbon reduction targets tend to focus exclusively on the development
of hybrids. Whilst hybrid vehicles have a role to play they are
not a panacea. Instead, there should be a re-orientation of programmes
to recognise that different vehicles are better suited for different
journey conditions.[52]
Some vehicles are almost exclusively used for
urban use, eg light goods vehicles and buses. Battery electric
vehicles are ideally suited for such exclusively urban use. They
offer zero local emissions of air pollutants and CO2
and give the driver the high and variable power required for driving
in traffic. For urban use they offer clear advantages over hybrids.
There are no obvious near-term technologies available
to reduce CO2 emissions on inter-city journeys, other
than biofuels. Pure electric vehicles are unsuited for long range
motorway journeys. The battery in a hybrid is almost inoperative
in this application and instead confers a disadvantage due to
additional weight and drivetrain inefficiencies compared to a
conventional diesel engine.
Hybrids offer flexibility, which users undoubtedly
value, but which compromise their overall contribution to reducing
CO2 emissions. They are better for the environment
compared to conventional internal combustion engines in terms
of CO2 in urban use, but are not as clean as pure electric
vehicles. As explained above, Hybrids have the advantage of being
able to undertake long-distance journeys in addition to urban
duties, despite offering no benefits over conventional internal
combustion engines on these longer journeys.
Greater CO2 emission reductions would
be achieved by encouraging zero emission electric vehicles for
urban use and biofuel in conventional internal combustion engines
for inter-city transport (or indeed a different mode of transport,
such as a lorry or train) than by promoting Hybrids as a universal
solution for all duties.
Comment from the British Lung Foundation
One in five people is particularly at risk from
air pollution. We are not all equally sensitive to air pollutants,
people who already have a lung disease, the elderly and children
are likely to be especially affected by high levels of pollution.
The majority of city smoke comes from diesel
motor vehicle exhausts, but in some areas emissions from coal
burning or electrical generating power stations make up a significant
proportion of total smoke. Large smoke particles are trapped in
the upper air passages and causes straining of the nasal secretions,
but smaller particles (PM10s) may travel deeper into the lungs.
High levels of PM10s cause increased breathing
difficulties in people with asthma, chronic bronchitis, emphysema
and other lung conditions. They may also cause premature death
in older people with heart and lung disease. For this reason,
PM10s are now thought to be the most important of the commonly
occurring air pollutants.
3.4 The DfT's Annual Report for 2005 summarises
Government-led measures to improve air quality and tackle climate
change, eg through low carbon vehicles, but fails to deliver a
truly joined-up strategy. For example, the Report states that:
"there will be some areas (mostly urban and busy roadside
locations) where, with present policies and technologies, it is
likely that we will not achieve the objectives for NO2 and PM10
by the relevant dates (2005 and 2010 respectively)."[53]
3.5 This failure to meet urban local air
pollution objectives demonstrates a potential lack of coherence
in the DfT's strategy. Lower emissions could be achieved for NO2
and PM10, as well as CO2, if Government programmes
clearly targeted different types of alternative vehicles for different
driving uses, most notably zero emission vehicles for urban use.
Fuel cells or batteries?
Conventional wisdom is that hydrogen fuel cells
will offer a cleaner and more efficient method of powering vehicles
than other low-carbon power sources. However, scientific studies
have shown that "power plant-to-wheel" efficiencies
of battery electric vehicles are around 66%, while the comparable
figure for hydrogen fuel cells is just 22%.[54]
As a means to reducing CO2 emissions, electric battery
vehicles offer an immediate solution to an immediate problem.
4. 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
4.1 Immediate advances could be made to
reduce transport related carbon emissions by 2010, and further
by 2020, if the DfT introduced measures to help increase the take-up
of light goods vehicles already capable of delivering zero emissions
(see section 5 for suggested measures).
4.2 Creating a regulatory environment where
good consumer behaviour is rewarded is essential. The DfT could
help with "demand management" and accelerate the reduction
in carbon emissions from road vehicles, if it extended initiatives
that acknowledged that consumers are making an environmentally-friendly
choice. For example, the fuel economy label scheme launched by
the Government in February 2005 could include an additional category
for zero emission vehicles, to distinguish them from vehicles
that only just meet the 100g/km of CO2.
4.3 For the Modec van to be a success, first
and foremost the vehicle must meet the customer's expectations
for its utility as a light goods vehicle. For example, the van
is capable of carrying typical payloads (eg up to two tonnes),
has a storage capacity that can be configured for different customer
needs, and offers excellent driving performance for urban use,
eg top speed of 50 mph.
The effects of air pollution
In January 2006, Ken Livingstone launched a
consultation on the creation of a "Low Emission Zone"
for London, aimed at improving air quality in the capital.[55]
Improving the standards of diesel-driven lorries and buses will
help, but this is not a radical course of action to combat pollution-induced
respiratory diseases. Zero emission vehicles in town and city
centres are the most effective method of stopping local air pollution
and reducing carbon emissions.
Transport Minister Stephen Ladyman said "The
Government is committed to improving air quality. We support the
Mayor's proposal for a Low Emission Zone for London, which could
make a significant contribution towards achieving our air quality
objectives, as well as bringing health benefits for Londoners."
5. What specific steps the Government can
take to reduce road transport carbon emissions over the next decade
5.1 The Government has already introduced
some measures to encourage the commercial take-up of zero, or
low-carbon, emission vehicles. Measures include:
(i) Exemption from the London congestion
charge, worth up to £2,000 a year, for vehicles on the PowerShift
register.
(ii) Exemption from Vehicle Excise Duty
for electrically powered vehicles.
5.2 But more could be done. Welcome measures
include:
(i) Sustained financial incentives to allow
for planning
The widespread take-up of alternative vehicles
is undermined if financial incentives are withdrawn prematurely.
There has been a significant loss of confidence among fleet managers
in purchasing liquefied petroleum gas (LPG) vehicles after the
40% reduction in fuel duty began to be phased out after only two
years. Similarly, the PowerShift scheme has been abruptly suspended
after nine years.
If innovate zero emission or low carbon vehicles
are to penetrate the market, any incentives that are offered should
be clearly defined. We believe stability is preferable to any
short-lived incentives.
(ii) 100% first year capital allowance for
low carbon emission vehicles from HMRC
100% first-year allowances (FYAs) may be claimed
from H.M. Revenue and Customs by businesses using "cars with
low carbon dioxide emissions".[56]
This exemption does not apply, however, to vans and other vehicles.
Equally, FYAs are available for assets appearing on the Enhanced
Capital Allowance (ECA) list. Whilst we believe Modec's vehicles
would pass the various criteria needed to qualify for the ECA
list, the application process is lengthy and the earliest Modec's
technology could be registered would be 2008. A two year wait
to be considered for such an important allowance is a severe disincentive
for companies attempting to bring innovative vehicles to the market.
Accordingly, Modec would like to see 100% first-year
allowances extended to vans, as well as cars. Given the nature
of the vehicle's need to return to a base to re-charge, this should
not cause any of the concerns over the giving of state aid, which
have, in the past, been raised as barriers to providing tax incentives
to light commercial vehicles which are able to operate cross-borders.
(iii) Re-instatement of the PowerShift grant
programme—focused on emissions outcomes
This previously offered a 75% rebate on the difference
in purchase cost between a diesel and zero emission vehicle. The
scheme could be re-introduced, subject to European Commission
approval, for zero emission vehicles only to drive the take-up
of vehicles with the least environmental impact.
Modec hopes that the funds saved whilst EU approval
is sought, should be set aside, and either re-applied to the programme
if and when it can be re-instigated or re-directed to other programmes
that could help the take-up of low carbon vehicles.
(iv) Exemption for additional battery weight
in applying restrictions to the driving of light goods vehicles
Currently, drivers who acquired a category B
licence before 1 January 1997 are permitted to drive vehicles
between 3.5 and 7.5 tonnes. But drivers who acquired their licence
after 1 January 1997 are required to hold a category C1 licence
to drive vehicles between 3.5 and 7.5 tonnes.
Modec's van has a Gross Vehicle Weight (GVW)
of 5.5 tonnes compared to a class maximum of 3.5 tonnes for Light
Goods Vehicles with a payload of up to 2 tonnes. The difference
in GVW is largely accounted for by the weight of batteries (which
can be in excess of one tonne) and their supporting structure.
If an exemption was applied for the battery weight
and concurrent supporting structure, Modec's van would be treated
the same as vans of a similar class, saving drivers under the
age of 29 from the need to secure an additional licence.
(v) Allow zero emission vehicles to use bus
lanes
The purpose of bus lanes is to improve air quality
and lower carbon emissions by encouraging the public to use public
transport. Modec would suggest that zero emission vehicles should
be allowed to use bus lanes as they are in some Scandinavian countries.
We understand that this would be a powerful but essentially temporary
concession as hopefully the number of zero emission vehicles would
grow and might use up bus lane capacity. However, at least for
the short term, this would be an immensely powerful signal.
5.3 Overall, Modec hopes that the Environment
Audit Committee will urge the Government to focus on immediate
measures that will help increase the take-up of low or zero carbon
emission vehicles. These measures should be technologically neutral,
based on outcomes, consistent with the DfT's commitment that "grants
will be revised to incentivise the cleanest cars regardless of
the technology or fuel type."[57]
Whether the funding and organisations involved
in the Powering Future Vehicles strategy is adequate
6.1 Modec welcomes the funding and grants
available though the TransportEnergy programme of the Energy Savings
Trust. Modec's predecessor, the e-Mercury project, received a
grant of £693,000 from the Energy Saving Trust to help with
the research and development of the van.
6.2 For example, we are pleased that grants
of 40% of eligible costs are currently available for electric
recharging points under the Refuelling and Recharging Infrastructure
Programme. However, these grants are only available if the recharging
points are available for public use. This might make sense for
the gas and hydrogen refueling points it appears to be directed
at. However for health and safety reasons it would not be appropriate
to mandate public access to electric recharging points that are
necessarily (due to the nature of the process and the time it
takes) located within the facilities of electric vehicle operators.
6.3 However, as noted above, Modec is disappointed
at the complete closure of the PowerShift programme. If as the
DfT pledges in its Annual Report it wishes to incentivise the
cleanest cars regardless of the technology or fuel type, a grant
programme for truly zero emission vehicles should be a fundamental
element of the Powering Future Vehicles strategy.
6.4 Modec is also concerned that the Low Carbon
Vehicle Partnership (LowCVP) may miss opportunities to ensure
that all technologies to deliver zero or low carbon emissions
are properly promoted. For example, the commercial vehicles working
group only addresses carbon emissions from heavy goods vehicles.
Innovation could be stifled and environmental benefits missed,
if the LowCVP follows too narrow a remit and is dominated by the
views of existing major manufacturers.
43 Based on an average van covering 15,000 miles each
year; compared to a diesel 3.5 tonne Gross Vehicle Weight van
emitting around 220g of CO2 per Km. Back
44
The Fuel Efficiency Target is 100g/km CO2 Powering
Future Vehicles Strategy: Third Annual Report, p 3 paragraph 2.1. Back
45
Powering Future Vehicles Strategy: Second Annual Report, p 12,
paragraph 2.12. Back
46
Energy Saving Trust (2006) Frequently Asked Questions http://est.custhelp.com/cgi-bin/est.cfg/php/enduser/std_adp.php?p_faqid=104&p_created=1127728614&p_sid=hpRBmY*h&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2
J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9OCZwX3Byb2RzPTAmcF9jYXRzPTAmcF9wdj0mcF9jdj0mcF9wYWdlPTE
mcF9zZWFyY2hfdGV4dD1iYXR0ZXJ5&p-li=&p-topview=1 Back
47
"Powering future vehicles strategy" (2002) p 4, paragraph
1.6. Back
48
"Powering future vehicles strategy" (2002) p 4, paragraph
1.9. Back
49
"Powering future vehicles strategy" (2002) p 2. Back
50
"The Air Quality Strategy" (2000) p 3. Back
51
"Future Vehicle Emission Standards-2010 and beyond"
(February 2004) p3 http://www.defra.gov.uk/environment/airquality/forum/meetings/130204/pdf/aqf4-04.pdf
Back
52
Please see Annex for fuller comment on the differing benefits
of battery, hybrid and fuel cell vehicles.
Department for Transport Annual Report (2005) p 102, paragraph
9.8. Back
53
"Efficiency of Hydrogen Fuel Cell, diesel-SOFC-hybrid and
battery electric vehicles," Dr Ulf Bossel, 20 October 2003. Back
54
http://www.tfl.gov.uk/tfl/press-centre/press-releases/press-releases-content.asp?prID=679 Back
55
http://www.hmrc.gov.uk/capital_allowances/eca-guidance.htm Back
56
Department for Transport Annual Report (2005) p 106, paragraph
9.26. Back
57
?????????????. Back
| 
