Wednesday, July 26, 2017

DEFRA Air Quality Plans Will Have Massive Impact on Road Haulage Freight and Logistics

...................but are we clear on how that will happen?
Shipping News Feature
UK – The long awaited results of the government's consultation regarding the reduction of pollution in the atmosphere caused by road vehicles, the DEFRA Air Quality Plan, has now been published following the draft version which came out in May, and amongst road haulage and freight interests there is likely to be some scratching of heads and a considerable amount of invective aimed at the authorities. The full report ignores all mention of the horrendous logistical problems which will beset urban areas unless a clear path of how the supply chain is maintained is set out.

It is to be hoped by the industry that the mention of considerable improvements in emission quality from the latest Euro VI power units means that trucks will be largely exempt from further penalties, certainly if the government envisages retrofitting as a viable option for the sector, as with buses, many will say it is living in cloud cuckoo land, what type of power train does it see hauliers installing if diesels are outlawed? The government's hand was forced after a legal campaign by environmental law group ClientEarth which saw the High Court demand this month's publication in a case which had already been delayed because of its possible effect on the recent General Election. Both the Freight Transport Association (FTA) and the Road Haulage Association (RHA) were among the respondents to a consultation which potentially will have a huge impact on the logistics sector.

Readers can check out the DEFRA publication either in overview (HERE) or in full (HERE) but all the talk at the moment surrounds private car owners after the government line largely follows the precedent set by the French to ban diesel and petrol sales completely by 2040 as decreed by Emmanuel Macron’s administration. A scrappage scheme is also envisaged and with BMW announcing the all-electric Mini will be produced in Cowley and manufacturers such as Volvo and even Aston Martin moving all or part production the same way, however what is the situation for truck owners? The study has very little of substance regarding this as illustrated below, and what there is divides LGV and HGV vehicles.

For any and all vehicles, but particularly private cars, rather than country wide legislation the government has side stepped the issues by promising a £255 million ‘implementation fund’ for authorities, whilst £40 million will be made available ‘immediately’ to support local authorities to take action ‘in the shortest time possible’ plus £100 million offered for retrofitting rolling out new low emission buses.

In London of course the mayor has already decided that punishment is the best form of persuasion, with a revenue stream from penalties as healthy for the authorities about as dangerous as the NOx production from vehicles is for citizens, and this may well set the course for other areas where emissions are dangerously high to follow. The London vision has been described as a ‘Stalinist agenda’ by some in the road freight industry with Sadiq Khan decreeing that all transport in the capital should be zero emission by 2050.

The mayor however it seems was not delighted at the policy announcement with a City Hall source quoted as saying that what was required was a full blown scrappage scheme to remove diesel powered vehicles from the city’s roads with immediate effect.

Industry analysts have opined that the drive toward zero emissions, whilst having enormous social benefits, is likely to have huge costs for the man in the street. As we point out endlessly, the supply chain is what keeps food in the shops and, now more than ever before with the rise of online shopping, the people supplied with every type of commodity.

Motorist lobby organisation FairFuel UK says banning new diesel and petrol car and van sales by 2040 will cost consumers ‘trillions’. Whilst accepting ‘like the curate’s egg’ there is good and bad in the new plan, with no direct government taxes on drivers but the banning of traditional organically fuelled internal combustion engines described as ‘naïve and ill thought out’, FairFuel says it would be better to phase in new fuel technologies to work effectively and be supported, without a target date to terminate diesel and petrol.

The lobby group’s view is that with proven solutions to lowering emissions available now, such as retrofitting systems, bulk additives and for the petrol mix of bioethanol to move from e5 to e10, the Minister has missed an opportunity to solve the emissions issue now, fairly and at little cost, prompting Quentin Willson, lead spokesman to comment:

“So by 2040 no fuel stations no garage repairs no car parts suppliers and 15 million diesels scrapped. The cost will be trillions.”

Founder of FairFuel, Howard Cox takes the same line saying that Michael Gove has adopted a draconian policy which will cause ‘the National Grid to disintegrate in a breakneck move to nascent electric technology which will guarantee to cripple the economy’.

Most organisations accept however that evolving technologies, many driven by the environmental imperatives, mean that fuel types will have largely changed anyway by the government’s target dates. Dale Vince, founder of Ecotricity, which already runs a network of electric vehicle charging points, commented:

"The market will beat both governments (the French and British) to this, there won't be any new petrol or diesel cars available to buy anyway by 2040. The speed that car manufacturers are moving at, I'd guess by 2030 you'll have to work hard to find one of these old fashioned things. Volvo will be there in 18 months, who's next?"

A variety of other interests were quick to give their views on the announcement. Opinions ranged from ‘This plan is still miles away from bringing down toxic air pollution in the UK in the shortest possible time’ (Greenpeace), ‘Councils now need to see more details to make sure these plans are as effective as possible’ (Local Government Association) to ‘Outright bans risk undermining the current market for new cars and our sector which supports over 800,000 jobs across the UK so the industry instead wants a positive approach’ (Society of Motor Manufacturers and Traders).

Tackling poor air quality in all its forms is certainly a priority for government, particularly after the French announcement to comply with the Paris accord. The UK currently meets its international commitments for overall emissions of all air pollutants and the only statutory air quality limit that the UK is currently failing to meet generally is on NO2. The government has however been tarnished by the fact that it had to be forced by the High Court to reconsider its policies not once, but twice, as the previous incarnations were considered too weak to be fit for purpose.

The fact that there were delays in releasing the report also makes a mockery of the statement by the government’s QC James Eadie, that the policy was ready months ago, but had to be delayed so as not to influence June’s election. It was the Court decision that led to the publication of the draft plan in May, something forced by the ClientEarth prosecution.

One high point for those who believe that the answer lays in the development of hydrogen technology is the announcement of a competition launch in September 2017 inviting proposals from public organisations, businesses and the like to boost the creation of hydrogen fuel infrastructure and the uptake of hydrogen-powered vehicles. Additionally hydrogen fuel providers will be able to bid for funding in partnership with organisations that utilise hydrogen vehicles to help build high-tech infrastructure, including fuel stations.

So what exactly are the policies regarding the commercial vehicle fleet? Whilst clear on smaller vans with the plug-in vehicle grant extended last year to provide £8,000 or 20% of the value of electric/plug-in hybrid vans and £20 million to fund low carbon waste and residue fuel development, there is only mention of the twenty projects awarded £20 million through the Low Emission Freight and Logistics Trial in January this year. The study merely says ‘ the UK government will continue its close working with the logistics industry on improving the efficiency of operations, drivers and vehicles to maximise the emissions savings that can be achieved in the short term.’

The rest of the document goes on to threaten the actions that will be taken against haulage firms found attempting to cheat the incoming regular emission checks which are to be added to roadside examinations by the DVSA from next month. Operators get 10 days to adjust the vehicles emissions or face losing the truck if it is not taken off the road. Hardly an inspiring set of statements for an industry so essential to the county’s wellbeing.

There will be a consultation this year regarding the implementation of regulatory changes to support the take up of alternatively-fuelled light commercial vehicles (vans). Proposals include (i) increasing the weight limit of alternatively-fuelled vans that can be driven on a category B driving licence in the UK; (ii) exempting certain alternatively-fuelled vans from goods vehicle operator licensing requirements in Great Britain; and (iii) roadworthiness testing for electric vans in Great Britain. This last is a concerted effort to change from the traditional diesel powered ‘white van man’ image (96% of smaller delivery vehicles are diesel powered) to alternative fuels.

Prior to the release of the study many in the industry will think the Road Haulage Association (RHA) got it about right with a statement which predicted that ‘the devil will be in the detail’. The RHA believes that clean air zone restrictions, and any associated punishment taxes or tolls, need to be carefully phased and focused on areas of real problems. RHA chief executive Richard Burnett said:

“We need to understand the detail before we can make a comprehensive comment. However, we are concerned that once again, the devil will be in the detail. The industry is already taking action through the rapid up take of ultra-low emission Euro VI lorries. However, we have concerns over DEFRA’s original clean air zone proposals as they failed to consider the negative impact of a premature introduction of restrictions on pre-2014 lorries.”

The Freight Transport Association (FTA) pointed out the uncertainty which surrounds the plans saying clarity is urgently needed to identify which vehicles will be affected in each of the Clean Air Zones. In addition to the Ultra Low Emission Zone in London, there are five other cities (Birmingham, Derby, Leeds, Nottingham and Southampton) which will have to introduce Clean Air Zones (CAZs) by 2019. There may be other locations which, as part of their air quality plans, also decide to introduce CAZs.

The FTA points out that with such short lead times for businesses to ensure their fleets are compliant, many will need additional support, in particular small businesses, those based within zone boundaries, specialist fleets, and van operators if included. If vans are affected by CAZs, there will be little more than two and a half years’ worth of compliant vehicles in the fleet and no established second hand market. Many businesses will now be locked into lease agreements which extend beyond the 2019 deadline and will be costly to get out of. Elizabeth de Jong, FTA’s Director of UK Policy, observed:

“Uncertainty will hurt industry, the FTA understands we won’t know where lorries and vans will be restricted until next year, giving only a year for businesses to plan their fleets, leaving many with potentially large bills on top of rising operating costs in a difficult trading environment. For those whose businesses operate inside a zone, a period of grace, giving them extra time to comply, would provide much-needed breathing space. Our worst fear is that some may be forced out of business altogether if the plans are not properly thought through.”