Scottish Region Policy Group response to the Scottish Government Consultation On Low Carbon Vehicles

The attachment to this letter represents the response by those members of the Chartered Institute of Logistics and Transport (UK) Scottish Policy Group who have contributed to the questions posed in the Consultation.

We welcome the consultation and the excellent breadth of coverage and content. In addition to specific issues highlighted in response to the questions there are several fundamental points we think it is helpful to make. Full details of our comments on these additional points have been added to the consultation under the "General Comments" section. However, we feel it might be helpful to summarise these as follows:

1. Close liaison is essential with the UK and EU to ensure that Scottish government actions do not prejudice initiatives taken by the UK and vice versa and that there is consistency with the EU.

2. The proposed approach whereby public bodies would take a lead is generally strongly supported; consideration of life cycle analysis and the need to ensure energy already embodied in existing vehicles is not wasted by early or unnecessary replacement. Opportunities should be taken to influence change by others where there are contracts or other agreements already in place.

3. Greater use should be made of Planning Powers. The various business incentives and grant mechanisms should encourage use of LCVs whilst the built environment should enable their easy use.

4. Taxation policies should encourage more than at present both a transfer to LCVs and where petrol/diesel still applies, a movement to less energy intensive and / or less polluting vehicles, or the restriction of movement within city centres for GHG emitting vehicles.

5. Early direct action should not prejudice easy subsequent acceptance by the general public. In particular, significant investment will be required, to enable quick and early adoption of LCV's.

6. The emphasis for electrically driven vehicles should be on electrical charging at off peak demand times where possible, especially whilst fossil fuel power stations are still in operation.

7. A realistic action plan is required with development of consistent planning policies and allowing for the progressive loss of fuel tax revenue. We believe that Government can and should play a significant role in the conversion and adoption of Low Carbon Vehicles as part of an overall strategy of carbon reduction commitments. Government should note that more efficient vehicles and less polluting fuels will need to be used together to achieve continued GHG emission reduction.

Response to Consultation on Low Carbon Vehicles from CILT Scottish Region Policy Group

1. Which low carbon technologies and fuels do you envisage will be first to be influential in reducing GHG emissions from the transport sector? Why?

Reduced emission internal combustion engines, bio-fuel and vehicles with all or partial electrical power are likely to be the first to come on stream because the technologies are most advanced. Other technologies such as reducing vehicle weight and aerodynamic drag should also be pursued as the techniques are well developed.

There has to be a combination of increased energy efficiency (less fuel = less emissions) combined with alternative fuel sources (cleaner fuel = cleaner emissions) to impact GHG emissions. In the freight sector, research and prototypes of improved efficiency engines has continued over the last 20 years; as a result of increased fuel efficiency in conjunction with increased load capability, there has been a decrease in fuel consumption of over 50% since 1975, with Euro 5 engines having significantly less GHG emissions than Euro 0 (89% less CO2, 87% less HCs, 89% less NOx and 98% less particulates than Euro 0 engines (source: Volvo Trucks).

Moreover, improved aerodynamics in trailer technology is increasing, along with potential to increase payloads for the less emissions - for example the European Modular System for 25.25 m long vehicles, which would reduce HGV traffic by 1/3 compared to current EU standards and reduce fuel per 1000/tonne km by 10 - 15%. Truck manufacturers continue to invest in R&D to improve performance and these improvements will continue to impact on GHG over the coming years; improved automatic gearboxes and hybrid vehicles are 2 examples. Similar efficiencies and technologies need to be reflected across all modal forms of transport - cars, vans, trains and ships.

The industry needs to ensure that total GHG emissions are reduced (i.e. over the life cycle of the technology from "well to wheel"), not just at "tail pipe". Fuel research in road freight has focussed on a range of alternatives including biofuels, synthetic diesel, gas and dimethyl ether (DME). There needs to be a broad range of criteria considered in the true sustainability of alternative fuels which includes climate impact, land use, energy efficiency, availability of fuel production and distribution, cost, safety and adaptability of the existing vehicle fleets. There needs to be an emphasis on a balance between all these criteria to establish the true impact of alternative views, not just the climate impact, otherwise there is a danger of diverting the issue from the tailpipe to elsewhere in the supply-chain. The largest climate impact can be delivered by synthetic diesel, bio-DME and biogas but there would need to be significant investment in infrastructure for any fuels other than bio / synthetic diesel.

Battery technology will make a significant impact on emissions if the efficiency and range can be improved. R&D continues in this area for a range of uses, including road freight transport. There are excellent commercial examples of companies, like TNT, converting their fleets of local delivery vehicles to electric ones; these companies should be engaged and encouraged by Government to share experiences and supported to extend their pioneering approach further. In a broader sense of the word technology, investment in driver training and knowledge through provision of programmes like Freight Best Practice and driver monitoring systems will also increase efficiency and reduce emissions.

Furthermore, increased interest in more efficient logistics through consolidation centres, portcentric logistics and increased inland water and rail freight capability could also contribute to a technologically-led emission reduction by reducing vehicle road miles. These programmes have a place in the overall target of emission reduction. Further, creative thinking in the field of fuel efficiency would include how to make inter-modal transportation easier to access and use, how can near-shore waterways be effectively used to reduce vehicle tonne/km and can dedicated freight lanes on motorways reduce congestion and increase vehicle efficiency through more uniform speed regulation.

2. Which low carbon technologies and fuels do you believe will ultimately have the greatest emissions abatement impact? Why?

Vehicles using full or partial electric propulsion are likely to have the greatest impact because they can use renewable sources of energy. Furthermore, Battery vehicles were relatively common 40 or more years ago on local delivery duties. Battery technology has moved on significantly in the intervening period so such vehicles today should have significantly greater performance that their predecessors.

For road freight transport, as noted above, the greatest climate impact can come from synthetic diesel, bio-DME and biogas. However, availability and cost will be key drivers in the development and dissemination of any new fuel technology, which will require investment, private and possibly public, to create and support the necessary infrastructure.

3. What timescales do you believe are feasible for the development of specific low carbon technologies and fuels? Are there any important intermediate milestones within these timescales?

Given that some of the technologies are already available such as improved efficiency engines, stop/start technologies in cars, bio-fuels, hybrid vehicles and battery development, there is no reason why there should not be increasing use within 5 years, assuming that is the timescale for vehicle development. There will need to continue to be developments which will reduce carbon emissions through the wide scope of opportunities presented by efficiency and nascent technologies.

Clearly, provision of the necessary infrastructure, whether for bio-fuels or their derivative, or battery charging, will encourage as to opposed to inhibit operator specific use of lower emission and electrically powered vehicles respectively, and this is particularly important and pertinent to private vehicle users that live in homes without individual or communal access to charging points (e.g. in a garage). Important milestones would also include the ability to "smart meter" electricity use and off-grid capability to re-charge vehicles.

4. What timescales do you believe are feasible for the uptake of specific low carbon technologies and fuels? Are there any important intermediate milestones within these timescales?

See 3 above. Given the possible financial penalty in first cost for low carbon vehicles, some incentives may be requires to persuade users to look at life time costs at least in the early years until a critical mass of operators/vehicles is reached. Whilst subsidies or lower taxation on more efficient and lower emitting fuels should be encouraged to allow faster conversion of new and existing fleets, care should be used in ascertaining true LCA costs (including environmental impact), which might vary across technologies and fuels. To emphasise the point, it would be meaningless and counter-productive if a zero-carbon/GHG emitting vehicle was very tax efficient and cheap to purchase and run for the user if the emissions created in producing and disposing of the product were greater than the whole life time emissions of a vehicle that still produced GHG at the tailpipe. However, complexity remains in identifying and quantifying other sustainable interfaces such as local air quality, which could detrimentally impact health and result in a greater need for resources throughout the healthcare system. Similar issues could include congestion and its impact on economic output or (alternatively) the positive contribution to GDP that job creation and operation of alternative technology products and infrastructure might deliver.

5. Are there other barriers to the development of such fuels and technologies that are not mentioned in this document? If so what are they?

The safety concerns that accompany the use, storage and distribution of some alternative fuels - for example hydrogen and DME are both highly flammable - may be a significant inhibiter in technology uptake.. The cost, both financially and in energy terms may also stop this line of development, especially in the need to provide a level of infrastructure that allows no barriers to use of those technologies / fuels identified to meet a balanced set of environmentally beneficial criteria. As an example already quoted, charging infrastructure for electrically powered vehicles is and needs to be recognised as a strategically important issue that incorporates government, local and national, as well as private investment: for the occupants of a tenement building or block of flats, charging infrastructure would have to be provided conveniently, locally and cost effectively.

Similarly, the use of alternative logistics infrastructure to reduce emissions and increase effectiveness, such as consolidation centres, needs local government support for such schemes in addition, where necessary, to barriers for existing technologies (e.g. congestion or road charging) to ensure uptake and acceptability of alternative ways of reducing GHG emissions.

6. Are there other barriers to the uptake of such fuels and technologies that are not mentioned in this document? If so what are they?

See 5 above.

7. Are there any negative social impacts associated with either the development or uptake of such technologies/fuels? If so what are they?

Uptake has to be socially acceptable in economic, environment and personal terms. As mentioned, any incentives used to encourage development and uptake of LCV needs to ensure that a balance is reached between reduction of GHG, economic stimulus and an equality of availability for all users. For example, how are those that live in apartments not disadvantaged from ownership of vehicles that required charging from the electrical grid in some form. Distribution to remote areas may be a problem and resistance to renewable energy generating plants and distribution may also be seen by some as a negative. Use of arable land to produce bio fuel can be seen as impacting on food production.

8. What, if any, technical challenges would the grid reinforcement upgrades be likely to present? How might these be overcome?

Grid reinforcement should not present too many challenges, but phase control for a multitude of micro generators may be difficult.

9. Who would fund any grid upgrade? And how might these costs be recovered?

The electricity generators have an interest in selling their power and surely must have an interest in funding the means of delivering it to the consumer. They would be expected to fund it and recover the costs from the additional electricity sold.

10. Do any of the technologies present any specific challenges or opportunities to island communities and sparsely populated rural areas in Scotland? If so, how might these challenges be addressed, and by whom?

Remoter areas may well be those with the greatest potential for renewable generation by means of wind wave tide or micro hydro schemes. Suitable combinations of these may allow them to be self-sufficient in power and even generate a surplus. At the same time, there would need to be a commercial requirement for the providers of other alternative fuels to provide supplies in romote communities if these need to be sold alongside existing fuel stocks (and the vehicles that use them); it should also be recognised that many different fuel mixes supplied to remoter areas could actually result in additional vehicle km to provide them. This means that it could take a long time for remote communities to "catch up" assuming the use of fossil fuel powered vehicles is eventually completely phased out (perhaps through legislation or prohibition) in the long term when alternatives are readily and easily available. Government may have a need to facilitate early transition, but as before, LCA would need to be considered to establish the overall cost in environment, social and economic terms of providing full access to alternatives to remoter communities (and their corresponding uptake in those communities).

11. Do you think that having a twin approach for the public sector and other users is appropriate? If so, why? If not, why not?

Over the longer term, say, up to 2020, it would be reasonable to have the same approach to both the public and private sector. However, in the shorter term, it is appropriate for the public sector to take the lead in creating the demand which should lead to costs coming down. Additional costs to the public sector and the resulting tax implications have to be recognised but also the additional benefits and impacts in terms of safety, efficiency, health, economy etc need to be assessed to establish how uptake of new technologies will actually affect public finances.

12. If so, should targets relate to the uptake of low carbon vehicles (either as a percentage of the fleet or an absolute number), or a reduction of total emissions across the fleets or another formal target? Why?

A progressive target based on a percentage reduction in fleet emissions is probably the most appropriate target. This avoids the possibility of a significant number of relatively low emission vehicles being replaced without a commensurate percentage reduction in total emissions. EU legislation may move in this direction as a further incentive to industry to develop the necessary vehicles. In other words, a combination of increased fuel efficiency and increasingly cleaner fuel is required, which results in an overall reduction in the total emissions. Yet again, Life Cycle costs, including economic, social and environmental impacts, would need to be taken into account.

13. If we follow a target related to the public sector uptake of LCVs, what percentage of the fleet should be LCVs by 2020? Please give reasons for your answers.

It is likely that most (say 95%) of vehicles will have become life expired at least once in eleven years. Recognising that all vehicle types may not be available in LCV form in that timescale, it is probably reasonable to look to 90% of LCVs by 2020, with 100% of cars, LGVs and vehicle like pavement sweepers. Battery technology is likely to increase the range of such vehicles such that overnight charging should be sufficient in most cases, or alternative fuels available in a readily distributed form. However, appropriate appraisal of the replacement policies should be carried out.

14. If we follow a target relating to the uptake of LCVs across all road users, what percentage of all new vehicles should be LCVs by 2020? Please give reasons for your answer.

Using the same reasoning as in 13 above, similar targets would be appropriate for many fleet users. However, companies using mainly HGVs or long distance coaches may not have appropriate vehicles available or the ability to use off-peak charging due to night time use of vehicles. Consideration will have to be given to targets relating to these sectors of the transport market. Targets need to recognise the wide diversity of LCV's that may become available, but those that are commercial viable and "user friendly" may win over technologies that are not as accessible or cost too much in the short term for uptake to increase. In addition, targets have to be backed up by an appropriate (and funded) action plan to increase the availability of LCV and any necessary infrastructure.

15. Are there any vehicle categories that should be excluded from the public sector target? If so, what are they and why should they be excluded? If not, why not?

It is recognised above that HGVs and long distance coaches may have such a high energy requirement that technology will not give them sufficient range in true LCV form. However, in hybrid form, with further refinements to engine technology and other developments such as regenerative breaking, their emissions should reduce. It would, therefore, be sensible to keep them within the target.

16. As LCVs may have higher upfront costs than traditional vehicles (albeit with a smaller discrepancy between lifecycle costs) do you consider it to be efficient use of public resources to devote a greater short term budget towards the purchase of LCVs? If so, why? If not, why not?

Given the urgency to deal with the potential effects of climate change and the depletion of fossil fuels, it is probably a necessary use of public resources since it may help to oil the wheels of the development and production processes. As stated in 11 above, the taxation implications need to be considered.

17. Are there any opportunities or barriers to public sector procurement of LCVs that are not mentioned in this document? If so, what are they?

The loss of tax revenue as use of conventional petrol and diesel vehicles reduces, and the potential need to tax incentivise other fuel types to encourage fast uptake. However, the long term view of real cost associated with climate change and the continued use of fossil fuels also needs to be off set against any recognised and immediate reduction in revenues.

18. What are the individual roles of different groups and organisations in ensuring the provision of any infrastructure required for low carbon vehicles?

It is to be expected that the energy producers will have an interest in increasing the quantity of renewable energy produced since there is profit to be made from it. Planning regulations must not erect impossible barriers to this development. The same organisations will also have an interest in a suitable distribution network. They may also wish to make charging facilities available for general use. It is also to be expected that multiple uses such as public bodies and companies carrying out local distribution will provide their own charging facilities but it should be recognised that local and national government support for infrastructure provision will be key for the commercialisation of alternative fuel vehicles in any form. This support may not necessarily be financial but could be in terms of planning applications or land availability (e.g. local overnight charging parking areas for tenement dwellers). Clearly tariffs for use, particularly off-peak will be an important factor in take up.

19. Are there other supply side/capacity constraints impacting on LCV development and uptake? If so, what are they?

Standardisation of charging connections is important and the EU has an important role in this respect. Bespoke equipment of this type from each manufacturer could be a disincentive to uptake of the technology. This is particularly true of public facilities where different users may wish to avail themselves of the equipment. There will also be location issues for such equipment in the built environment.

An effective distribution network for other alternative views would need to be created where these are not readily replacing existing fuels (e.g. can an alternative fuel for HGV's be provided through existing diesel pumps at filling stations?). Any requirement for biomass needs to be facilitated without detrimentally affecting the food supply chain; creation of fuel through waste biomass would require segregation and sortation of waste into a useable format.

20. Are there barriers to the development of an indigenous low carbon vehicle industry in Scotland? If so, what are they and how might they be overcome?

The UK has not had a good record in recent decades in converting new ideas into new products due to low research and development spend. Pump priming may be required to overcome this problem. Major barriers would include workforce technological experience and capability, and the provision of the right skills to mass produce low carbon vehicles. In addition, any Scottish industry would rely on the ability to export many more vehicles than it would sell on the local market, so excellent access to world class infrastructure in roads and ports would be critical for both inbound component parts and outbound finish product.

21. Should Scotland's industry focus on particular vehicle types? If so, what are they and why? If not, why not?

Building on what is being produced in Scotland currently with R&D getting these products to be best in class would seem to be the best starting point. Should any niche markets be identified where product supply is weak would be a further area for development.

22. Are there gaps in the supply chain? If so, what are they and how might these be overcome?

A mismatch between battery and vehicle supply and the availability of adequate power supply/charging facilities is seen as a risk to rapid uptake within the private car market. In addition, research into alternative fuels and the required infrastructure is required to establish local capability in the supply-chain.

23. Do we have the required skills base for the development of this market? If not, where are the gaps?

There seems to be a lack of people willing to take up engineering as a discipline both at the graduate and artisan level. Appropriate training at all levels may have to be stepped up to ensure that adequate resources are available to service a new technology.

24. How could the various stakeholders collaborate to stimulate the development and uptake of LCVs?

There are many potential groups which could usefully collaborate in getting the new technology accepted and taken up. Education and training has to be taken on board by most of the stakeholders who should be collaborating with the appropriate institutions to ensure that course material and trainers are available. Co-operation between local authorities and energy suppliers to ensure that charging facilities can be built in suitable locations.

25. Care will be required when taking action to ensure proper regard to responsibilities which are devolved and those reserved to the UK government. In particular action by the Scottish government should not prejudice initiatives taken by the UK government and vice versa. There is also a need to ensure consistency with the EU, particularly regarding standards and implementation timescales. Consequently while Scottish devolution often means more action can be taken faster careful consideration is required to ensure a consistent end product. Close continuing liaison is clearly essential with the UK and EU to ensure this; for example with vehicle standards, supply and availability of the different energy sources, including electrical charging mechanisms and the various fiscal measures such as grants and subsidies.

26. The proposed approach whereby public bodies would take a lead is strongly supported. In addition to directly operated vehicles this should extend to general administration and public sector employers. For example car allowances for employees should be more generous for those using LCVs and car loans could be restricted to such vehicles. There should also be emphasis on use of smaller, less powerful vehicles with these provisions also applying to MSPs to give a lead. In addition, consideration of life cycle analysis and the need to ensure energy already embodied in existing vehicles is not wasted by early or unnecessary replacement. In addition, heavy goods vehicles - and the development of alternative power sources and / or fuels - will need the involvement of private firms and investors who run fleets; these are generally outwith the direct influence of the public sector but have a major role to play in the reduction of GHG emissions from transportation modes. However, there are excellent examples of commercial firms taking the initiative in conversion to electric fleets - for example TNT now run a UK-wide electric delivery fleet. Government should actively engage with these stakeholders and seek opportunities to establish how their initiatives can be encouraged and extended, with, where appropriate, Government support.

27. The approach put forward in the consultation paper, with the public sector taking a lead regarding vehicles under its control is likely to be the most productive. Care is required regarding progressive introduction of the various measures with a mechanism to ensure effective dissemination of results to the general public highlighting potential benefits to each individual. A command and control approach is unlikely to gain public support and should be avoided.

28. Opportunities should also be taken to influence change by others where there are contracts or other agreements. For example with bus quality partnerships, operator grants and tendered services where use of LCVs could be given preferential treatment, if not insisted upon. Similarly where infrastructure provision or maintenance contracts are awarded similar provisions might apply. Further, other mechanisms to encourage the conversion of fleets and private vehicles - at a local and national level - should be considered, and could include congestion charging, provision of consolidation centres to enable non-polluting vehicles to supply retailers and services within city centre boundaries, workplace parking charging etc. A system of tiered charges would encourage less polluting vehicles.

29. More generally greater use should be made of Planning Powers. The various business incentives and grant mechanisms should encourage use of LCVs whilst the built environment should enable their easy use. For example provision of green spaces and pedestrianisation should avoid conflict and provide opportunities for LCV use,with more off-road residential parking spaces to facilitate electrical charging and readily available commercial points for such charging and battery change.

30. In the financial arena taxation policies should encourage more than at present both a transfer to LCVs and where petrol/diesel still applies a movement to less energy using vehicles. This should apply to heavy and light goods vehicles and PCVs as well as cars and consideration should be given to extending the UK government's car scrappage scheme to this end. Fiscal measures could also be used with vehicle renting and leasing to encourage greater use of smaller vehicles and LCVs.

31. With all of the action suggested above care is required to ensure that the emphasis on early direct action does not prejudice easy subsequent acceptance by the general public. For example widespread availability of electrical charging points and other LCV energy sources will be essential if drivers are to be persuaded to change from petrol/diesel power. Significant investment will be required, perhaps utilising parts of existing filling stations and the financing and timing of this could be problematic. The rate of movement towards use of LCVs will require careful consideration in the context of the 2020 and 2050 targets.

32. Even with the most optimistic assumptions it is clear that by 2020 and for many years thereafter there will be continued use of fossil fuelled power stations for part of the electricity supply. Any increased use of electricity at periods of peak demand will require additional use of such power stations. The emphasis for electrically driven vehicles should therefore be on electrical charging at off peak demand times. A pricing structure to encourage this is essential with provision for charging at peak demand times, whilst necessary to permit flexibility subject to a significant surcharge.

33. A common and consistent charging mechanism is necessary throughout Scotland, the UK and EU. Initially off peak trickle, charging through the household 240v supply should be facilitated but as soon as a sufficient base load of demand is established a higher voltage direct charging system is required. Common attributes should permit direct use by all vehicles as well as easy interchange of run down and newly charged batteries. As referred to above interchange points could be located similarly to existing filling stations. During the transition period parts of filling stations might be converted for such use.

34. Implementing the necessary changes will be difficult bearing in mind the various public and private sector interests. A realistic action plan is required with development of consistent planning policies and allowing for the progressive loss of fuel tax revenue. Sensible fiscal policies to embrace the necessary grant, subsidy and taxation regimes will also need to be developed.