2022
Net Zero Review: Call for evidence
1. INTRODUCTION
1.1. This submission constitutes the response from the Railway Industry Association (RIA) to the Net Zero Review call for evidence, commissioned by the BEIS Secretary of State.
2. BACKGROUND TO RIA
2.1. RIA is the trade association for UK based suppliers to the UK and world wide railways. It has over 300 companies in membership covering all aspects of rolling stock and infrastructure supply and a diverse range of products and services. As well as most of the Tier 1 contractors and large, multi national companies, over 60% of RIA’s membership base is comprised of Small and Medium Sized Enterprises (SMEs).
2.2. RIA’s supplier members represent the full range of UK rail disciplines, working on renewals, enhancements, rolling stock, signalling, electrification, and retail.
2.3. RIA provides its members with extensive services, including:
• Representation of the supply industry’s interests to Government, regional and national transport bodies, rail clients eg Network Rail (NR), HS2, TfL and other key stakeholders;
• Providing opportunities for dialogue and networking between members;
• Supply chain improvement initiatives;
• Supporting innovation through the Unlocking Innovation programme and UKRRIN (UK Rail Research and Innovation Network);
• Provision of technical, commercial and political information every week; and
• Export promotion, including organising and creating Great branded UK Pavilions at key rail exhibitions overseas.
2.4. RIA recognises that equality, diversity and inclusion drive innovation, financial performance and success. Together with Women in Rail, RIA is promoting an ‘Equality, Diversity & Inclusion Charter’ for rail, which has the potential to support social mobility, grow UK STEM skills, create local opportunities, and increase the talent pool from which the future leadership of the rail sector will be drawn.
3. RIA’S KEY RECOMMENDATIONS
• The first step towards decarbonising rail is commissioning fleet orders of low carbon rolling stock. This includes self powered battery and hydrogen trains, as well as hybrid models, for both passengers and freight. This is not an alternative to electrification, but rather a first step to gain immediate benefits in those places where electrification is not currently feasible. This can be supported by private investment.
• Electrification is the main solution for decarbonising rail, and can be delivered in the most efficient way through a rolling programme – retaining key skills and making significant cost savings. This rolling programme should proceed at pace to achieve net zero by 2050
• Commit to major rail projects and provide certainty over future plans in order to expand capacity for passengers and freight.
• Recognise the value of rail in delivering connectivity, economic growth, export opportunities, and green jobs across all of the UK, rather than a strain on the public purse.
4. Domestic transport has the largest share of UK greenhouse gas emissions of any sector across the economy According to figures published by BEIS in 2022, transport continues to be the largest emitting sector in the UK, accounting for 24% of greenhouse gas emissions in 2020.1 Therefore, decarbonising transport is critical to reaching net zero.
4.1. All transport sectors also include large supply chains which build and maintain transport assets In order to achieve net zero in a pro business way, supply chains should be consulted and considered. As we will set out below, the private sector can not only deliver innovative low carbon solutions, but also creates green jobs across all of the UK.
5. Rail is a small part of the problem but a big part of the solution. In 2019, rail made up 9.5% of all passenger kilometers (across all transport modes), but only 1.4% of the UK transport’s CO2 emissions, and only 0.5% of all UK emissions.2 This means that a modal shift towards rail, both in terms of expanding the rail network and making the most out of the existing network, creates enormous potential for reducing emissions. As we will set out below, rail electrification, as well as hydrogen and battery rolling stock, are low carbon transport solutions.
5.1. What does rail decarbonisation look like? Decarbonisation of the rail network will involve both further electrification and the introduction of low carbon, self powered rolling stock, such as battery and hydrogen. There is clear best practice for decarbonising rail, which we will set out below. The key message is that the UK needs to start decarbonising its rail network now, as both infrastructure and rolling stock projects take time to deliver. Decarbonising the UK rail network requires a clear strategy underpinned by policy certainty. If the industry is to meet the net zero target, making the right decisions now and remaining committed to them is essential.
6. The first step towards decarbonising rail is commissioning fleet orders of low carbon rolling stock. This includes innovative self powered battery and hydrogen trains, as well as hybrid models, for both passengers and freight and can be done quickly as these solutions already exist. Trains being ordered now and in the next few years will still be operating in 2050, so it is important we roll out low carbon solutions now.
6.1. It is important to note that these solutions are mostly relevant for parts of the network where electrification will not be cost effective. More specifically, this will be for less intensively, more regionally, used parts of the network.
6.2. There is also a strong appetite to deliver these low carbon solutions through private investment models RIA recommends that government further explores options for bringing private funding into this space, and partners with the private sector to find the optimal business models for this.
6.3. As other countries look to decarbonise, with transport continuing to contribute to a significant proportion of emissions globally, rail has the potential to be a huge UK green export and investment success story. The UK already has the capability to be a world leader in developing innovative battery and hydrogen trains, with a number being on display at the
COP26 UN Climate Change Conference in Glasgow in November 2021. The technology is already being shipped across the world, with the potential for more exports.
7. Electrification is the main solution for decarbonising rail, as it is the only mode suitable for intensive, long distance, and high speed services. A rolling programme of electrification is the most efficient way to deliver this. RIA’s ‘Why Rail Electrification?’ report sets out how to electrify the UK rail network in the most efficient way, and makes the case for electrification as both a future proof technology and a good investment.3 This work needs to begin now, in order to maximise the benefits and meet net zero targets.
7.1. The industry currently uses two principal traction modes, electricity and diesel. Around 38% of the UK rail network is electrified much less than comparable European countries, which are typically 60% or more electrified. For freight, electricity provides only 4% of UK rail freight’s energy requirement, compared with 56% in continental Europe. And the UK is currently electrifying at half the rate needed to meet Net Zero. If the UK wants to catch up, we need to act now.
7.2. A rolling programme of electrification is a steady volume of activity over the long term. This allows for the most cost effective delivery of electrification and retains the specialist skills needed for overhead line work. An efficient delivery team sits at the core of the rolling programme. The team is fed with work and stays continuously active continuously learning, improving productivity, and delivering efficiencies.
7.3. Retention of skills will be crucial for future delivery, and is supported by rolling programmes and certainty which allow the private sector to invest and bring on apprentices. Data from NSAR4 shows that by 2035, over 25% of the electrification workforce will reach retirement age.
7.4. A rolling programme could reduce costs by up to 50% compared to some past problem projects, as shown by RIA’s ‘Electrification Cost Challenge’ report.5 In practice, RIA recommends a rolling programme of electrification enough to keep two or three delivery teams consistently in action, each delivering 75 100 single track kilometres per annum, for at least 10 years, across the UK.
7.5. As also shown by RIA’s ‘Electrification Cost Challenge’ report6, electrification in the past has been delivered in peaks and troughs of work, providing the industry with a significant amount of work over a few years, followed by a cliff edge in activity. This has the opposite effect of a rolling programme leading to higher costs as the sector is unable to retain the skills and expertise needed. This was the case with the cost increases on the Great Western Electrification Programme.
7.6. As we have already highlighted above, there is an urgent need to take action now and initiate both rolling programmes of electrification and fleet orders of low carbon rolling stock Operational carbon savings are cumulative, meaning that a tonne saved in 2022 will be 28 tonnes saved by 2050. If we wait until the 2040s, carbon savings will be significantly smaller, as well as additional benefits including economic growth and green jobs.
8. Commitment to major rail schemes is needed to create further capacity on the rail network, enabling continued decarbonisation of the UK transport sector In order to carry increased numbers of passengers and tonnes of freight, commitments to major rail schemes including HS2, East West Rail and Northern Powerhouse Rail are needed.
8.1. Clear commitments from government helps suppliers deliver major rail projects in the most efficient way possible, supporting skills and investment all around the UK. RIA has welcomed the significant investments announced in the Integrated Rail Plan (IRP), which was published in November 2021 after a long period of uncertainty. However, the IRP was also a piecemeal approach to national strategic railway infrastructure investment, given the removal of HS2’s Eastern Leg. The IRP also included a scaling back of Northern Powerhouse Rail (NPR) but recent announcements made about NPR have created further uncertainty about plans.
8.2. To meet the net zero target, Government must work together with supply chains and aim to unleash the potential of the private sector enabling efficient delivery of key rail programmes across the UK. This can be supported by improved certainty over what rail projects are going ahead. When there is a clear pipeline of work, suppliers can plan for efficiency and invest in skills and resources. Uncertainty around government plans means multi national companies move to other non rail sectors or overseas, and SMEs struggle to find work or go out of business. A pro business and pro growth net zero transition sets a clear ambition, and leaves the private sector to deliver
8.3. RIA welcomes ambitions to grow rail freight as a key step towards net zero. Rail freight provides a wide range of benefits, showcasing its potential to support environmental, social, and economic objectives. A 2021 report produced by Deloitte, and commissioned by the Rail Delivery Group,7 finds that rail freight delivers £2.45bn in benefits to the UK economy each year. Out of this, £31.65m are benefits to customers including cost savings, time savings, and reliability benefits. The remaining benefits of £800m are social benefits, including congestion relief, environmental benefits, and improved safety. Indeed, each freight train removes up to 76 lorries from the roads, resulting in 1.6 billion fewer HGV kilometres every year.8 To unlock additional benefits, further capacity is needed.
8.4. Expanding rail networks also creates capacity for other transport modes and enables congestion relief for users of other modes.
9. Investment in rail is an investment in economic growth and green jobs. Rail supports economic growth and jobs all across the UK in two important ways. First, rail links connect people and places, enabling businesses to grow and employment and leisure opportunities to expand. Investing in high speed lines and increased capacity means unlocking economic growth through connectivity and levelling up. Second, the rail industry is a strong and vibrant sector, and the return on investment from rail projects is significant. The evidence for this is set out below.
9.1. A 2021 Oxford Economics report sets out that in a year, the rail industry contributes with £43 billion Gross Value Added, or economic growth. It also contributes with £14 billion in tax revenue.9 This economic growth is in addition to all of the other economic and agglomeration benefits associated with increased connectivity.
9.2. The report also shows that rail supports 710,000 jobs across the UK. Not only is this a significant number, but these jobs were also found to contribute with 38% more GVA compared to the economy wide average, in every one of the UK’s 12 regions and nations This means that jobs in the rail industry are highly productive, creating both local and national economic growth.
9.3. Finally, the report found that for every £1 spent in rail, £2.50 of income was generated in the wider economy This multiplier is significant, and will serve to contribute to the economic growth target of 2.5% a year. Investment in major rail projects create a clear return on investment, not only in terms of economic growth, but also in terms of progress towards net zero.
We hope this is a useful submission. RIA is happy to provide further information on any of the above issues, or to meet to discuss any matter associated with the consultation
Please do not hesitate to get in touch with Clara Wikforss, RIA Senior Policy Executive, if you have any further questions or would like us to arrange a meeting please contact clara.wikforss@riagb.org.uk and 020 7201 0777 / 07399 042446.