Help needed to hit zero

The government needs to give far more support to the logistics industry if it is to meet the 2050 deadline to achieve net-zero carbon emissions, according to the Electric Vehicle Report 2023, produced by Logistics UK.

Inadequate fiscal support to offset the higher purchase price of zero-carbon trucks and vans and a failure to provide a public charging network for commercial vehicles are just two of the factors having a significant impact on the confidence of operators to invest in electric vehicles (EVs).

In 2022, EVs represented just 0.9% of the UK’s 4.2m-strong van fleet, up from 0.3% in 2019. And while most of the 32 businesses surveyed for the report – 62% –plan to have decarbonised their van fleets by 2030, significant barriers remain that prevent the uptake needed to achieve the current deadlines.

In 2030, sales of non-zeroemission vans will end. In 2035, all new trucks under 26 tonnes GVW must be zero emission –and in 2040 that will extend to all new trucks. On top of these deadlines, the government is proposing a zero-emission vehicle mandate that will require vehicle makers to ensure at least 10% of new vans are zero emission in 2024, rising incrementally each year to 70% in 2030 and 100% by 2035.

David Wells, chief executive of Logistics UK, said: “The logistics sector is fully aware of its responsibilities to decarbonise and is keen to do so. However, with respondents reporting wideranging costs to upgrade their energy supplies to depots –between £100,000 and more than £1m – a lack of meaningful scrappage schemes, acquisition costs on the rise and volatile energy prices, it is an uphill battle that cannot continue without increased support from government.

“Our industry operates on very narrow margins of about 1% and with significant inflationary pressures, increased wage bills and

LOGISTICS UK’S KEY DEMANDS

Power supply

A fair and equitable approach for funding electricity connections, with an electricity generation roadmap to enable the expansion of depot charging for EVs, transparency on available grid capacity, sufficient supply margin and common service agreements among distribution network operators, plus regularly reviewed energy support to manage shocks and industry engagement to unlock energy generation investment.

EV public chargepoint network

An EV charging network that is fully accessible to large electric vans now and electric trucks in the future, supported by an EV charging infrastructure roadmap with clear milestones to drive an accelerated uplift in suitable public charging infrastructure with high reliability standards.

Fiscal support

Embed certainty for fiscal support aimed at encouraging logistics operators to decarbonise their operations, including grants, and amend the the rise in total road vehicle operating costs, logistics businesses need supportive fiscal measures to be able to upgrade their fleets and energy supplies without having to pass on increased costs to customers.”

The cost and availability of new EVs is a major concern for the logistics sector, with the current maximum plug-in EV grant of £5,000 for vans and £25,000 for trucks covering only a fraction of the extra cost of these vehicles. The current grants end in March 2025.

Michelle Gardner, deputy director of policy at Logistics UK, said: “The total cost of ownership of these vehicles is increasing and we would like to see more support from government just to get things qualifying criteria for the 100% annual investment allowance for vehicles acquired via leasing or hiring and clarify the usage of the allowance to include investments in increasing electricity supply to commercial vehicle premises.

Regulations

Fundamental reform of regulatory vehicle weight thresholds, driver training and vehicle inspection regimes to avoid regulatory conflict to include redefining the current derogation for category B drivers to tow a trailer on an alternatively fuelled vehicle, aligning it with the 2030/2035 phase-out dates while maintaining the existing definition of eligible low-carbon fuels.

Low carbon fuels (LCFs) moving. The grant has been decreased in value and that is problematic for long-term business planning.

LCFs incentivised in the tax system to be cost-competitive with diesel and a clear, long-term plan for utilising LCFs across transport modes, based on industry evidence, backed by investment in infrastructure and R&D, and supported by a clear regulatory framework.

“There are also other things the government can do in terms of capital tax allowances for investment that could help businesses.”

Quite apart from a lack of public chargers for commercial vehicles, the report also found that fleet operators wanting to charge EVs at depots often faced uneconomic costs to reinforce electricity connections.

“There are challenges with vehicle supply but lack of charging infrastructure is still the major barrier to EV adoption,” Gardner said. “The cost and time involved to upgrade power supplies at depots came through really strongly from our members.

“Unless these blockages are cleared, fleets are not going to be able to transition to EVs as quickly as they need to.”

 Logistics UK’s Electric Vehicle Report 2023 is available at: www.logistics.org.uk/ research-hub/reports/ev-report