Friday, March 14, 2014

Government Needs to Extend Gas Fuel Support for Freight and Road Haulage Groups

Low Emission HGV Task Force Publishes Recommendations and Gets Industry Support
Shipping News Feature

UK – The recommendations of the Low Emission HGV Task Force on the use of methane and biomethane in HGVs has been published and immediately has put pressure on the government to act and encourage the utilisation of gas in the road haulage industry from small scale to mainstream use. The Low Emission HGV Task Force is led by the Department for Transport (DfT) and includes industry groups such as the Freight Transport Association (FTA) Road Haulage Association (RHA), the Chartered Institute of Logistics and Transport in the UK (CILT), the Low Carbon Vehicle Partnership and the Society of Motor Manufacturers and Traders (SMMT).

The FTA, which has published its own manifesto on the subject, points out that the move towards gas powered HGVs with either liquefied natural gas or compressed natural gas and ultimately biomethane will ensure that the freight sector can contribute to national Government carbon reduction targets whilst delivering essential goods and services. An increase in the utilisation of gas HGVs will also help improve air quality in towns and cities.

The case for gas was supported at the last Autumn Statement where the fuel duty differential between the main rate of fuel duty and the rate for road fuel gases was maintained until March 2024 however the industry lobby believes more needs to be done to breakdown further barriers to take up. The cost of a refuelling infrastructure can be prohibitively expensive and prevents many companies, particularly small operators, from investing in gas. The current system for incentivising the use of biomethane means that it tends to be diverted to heating and electricity sectors rather than transport.

The recommendations from the Task Force are available here and include reviewing the range of fiscal incentives for gas and biomethane, supporting the establishment of a strategic infrastructure network for gas refuelling, and ensuring biomethane supplies are secured for the transport sector. It continues to request that the government considers the use of further incentives that could improve the business case for gas HGVs and the recognition of biomethane as a transport fuel in carbon reporting 3. The recommendations are supported by an Annex providing further information on the current status of gas HGVs in the UK and the challenges to further take up. Rachael Dillon, FTA Climate Change Policy Manager, commented:

“The recent commitment by Government on the duty differential for gas provides much needed confidence for the freight industry to invest in dual fuel and dedicated gas vehicles. However, there is a lack of public refuelling infrastructure for gas vehicles which limits progress. Additionally, biomethane supplies need to be secured for the transport sector. The Task Force recommendations show that Government, key stakeholders and industry can work together to significantly increase the take up of gas HGVs. It is vital that we now build momentum and ensure that the recommendations transfer into actions”.

In the US major truck interests such as Ryder, the rental and leasing operation, began with a single pilot operation in Southern California and is now an industry leader in the technology with a fleet containing hundreds of CNG and LNG vehicles. Rueben M. Stokes, Ryder Director of Business Development for Advanced Fuels, who heads up the group’s natural gas strategy, will be speaking at the third annual Natural Gas Vehicle Expo in Nashville on 19 March.

Ryder’s strategy has been to rent trucks and give customers the chance to see the advantages of gas before persuading the client to convert the hire to a lease. The main concern the company has found is that the low energy content of gas means more frequent fuel stops and that will require major infrastructure investment to enable a roll out of the technology in the UK.

Photo: Ryder’s gas powered HGV fleet includes mainly Freightliners and Peterbilts.