UK: Driving Down Road Emissions

Last Updated: 23 November 2009
Article by Paul Sheridan and Valentina Keys

Decarbonisation of road transport featured prominently in a report to Parliament entitled "Meeting carbon budgets - the need for a step change" published on 12 October 2009 by the UK Climate Change Committee (the "Committee"). Recommendations on transport are summarised in this article together with synergies drawn between wider UK Government proposals as well as those of the EU Commission. The findings of the report will be of particular interest to the automotive, cleantech, energy, infrastructure and real estate sectors.

EU position

It is reported that between 1995 and 2005, goods and passenger road transport in the EU grew by 31.3% and 17.7% respectively. This growth is predicted to continue. CO2 emissions from the road transport sector are 30% higher than in 1990. "Sustainable mobility" (that is decoupling mobility from its harmful effects) has been at the heart of the EU's Transport Policy for several years. In its 2006 review of a 2001 White Paper, the EU Commission pointed to the need to use a broad range of policy tools, ranging from economic instruments and regulatory measures to infrastructure investment and new technologies in order to achieve sustainable mobility. Electric and hybrid road vehicles in particular were identified as the most viable alternatives to conventional road vehicles. The fleet average (that is average CO2 emissions to be achieved by a car manufacturer over its various models) to be achieved by cars registered in the EU, starting in 2015, is 130 grams CO2 per kilometre (g/km). These views are picked up in the Committee report and are also widely supported by other European governments which have introduced various national measures.

UK position and the Committee Report

Decarbonising road transport is seen as instrumental in helping the UK meet its targets of reducing CO2 emissions by 26% by 2020 and 80% by 2050. It is estimated that around 35% of overall UK carbon emissions are derived from domestic transport and, out of that, 58% of the emissions derive from cars.

The Committee calls for a reduction of 25% in road transport emissions by 2020 (based in 2007 levels) with the following step changes taking place:

  • A long-term target of 95 g/km by 2020 from the current 158 g/km for UK cars
  • 240,000 electric vehicles and plug-in hybrids deployed by 2015, and 1.7 million by 2020, supported by appropriate battery recharging infrastructure
  • 3.9 million drivers trained and practicing eco-driving by 2020.

To achieve these targets, the Committee recommends strengthening the following key areas of policy (which will no doubt be supported by related new legislation): (1) Greater support for electric cars and plug-in hybrids; (2) Improvements in, and decrease in costs of, batteries; (3) Development of appropriate battery recharging infrastructure; (4) Rapid deployment of pilot projects; (5) Integrated land use and transport planning.

(1) Support for electric vehicles and plug-in hybrids

The Committee's ambition is that by 2020 electric cars and plug-in hybrids would account for around 16% of new cars purchased in the UK. The Government is expected to produce a comprehensive strategy for rolling out electric cars and plug-in hybrids, including targets for market penetration, a funded plan for electricity re-charging infrastructure, and large-scale pilots. The recommended Committee target of (fleet) emissions of 95 gCO2/km by 2020 is in line with the recently adopted EU target of 130 gCO2/km for new car (fleet) emissions in 2015, and 95 gCO2/km by 2020.

(2) Batteries

Early model battery costs are estimated, currently, at around £7,800 per vehicle rendering the cost of electric cars as generally expensive compared to conventional alternatives. Nonetheless, the Committee's analysis suggests that there is scope for a 70% reduction in battery costs as more and more electric cars are deployed. Taking into account operating costs of conventional cars, gradually, the cost-effectiveness of electric cars is expected to become more competitive.

From 2011, the Government plans to offer a cash incentive to consumers of £5,000 per new electric vehicle to offset the higher upfront costs of electric cars. Other forms of innovative financing are being explored to help consumers spread, over time, the upfront costs. One such other business model is based on battery leasing rather than outright purchase.
Furthermore, the Committee argues that the macro contribution from Government towards achieving a high level of market penetration for these vehicles should be as high as £800 million. To date the Government has been looking at a contribution in the region of £250 million commitment.

(3) Pilot projects

The Committee recommends the roll-out of pilot projects in several cities across the UK. The necessary funding for pilots is estimated at £230 million (as part of the £250 million pot). Consultation with potential pilot partners is likely to begin shortly.

(4) Battery Recharging infrastructure

Government and industry alike recognise that investment in battery recharging infrastructure is vital if the ambitious targets are to be achieved. The cost of such infrastructure is estimated at around £1.5 billion in the UK depending on the level of sophistication of charging meters. Charging options include: off-street home charging, which would be an option for up to 75% of car-owning households; on-street home charging which would be required in urban areas; workplace charging; charging in public places (e.g. car parks, supermarkets, airports etc.); and battery exchanges. Notably, European electricity companies and power distribution operators have recently pledged to develop harmonised charging standards for electric and electric hybrid cars (until international standards are agreed).

(5) Integrated land use and transport planning

The Committee stresses the importance of linking land use planning decisions with transport availability and emissions (such as the provision of good transport links in new out of town settlements, investment in road infrastructure, investment in public transport infrastructure, and planning reform to support electric car roll-out, etc).

Conclusion

The Committee's report sets out ambitious carbon reduction targets for road transport. We understand that the report's recommendations have been welcomed by the UK Society of Motor Manufacturers and Traders and that discussions are taking place between Government and related industry. There is a long way to go before there can be confidence that the targets will be met. There are many and varied barriers and obstacles in the way. Not least of these will be technological developments in batteries, recharge and associated technology. These technical developments and the general issue of costs will be key issues. However what differentiates the debate now from, say, even 3 years ago, is the presence of substantial societal, business and political support to make change happen.

The Committee's next annual report to Parliament will be published in June 2010.

Please click here for the link to the Committee report

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 20/11/2009.

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