RIA TFFF Progress Review

March 2022

RIA Progress Review: 'Trains fit for the future?' inquiry

Introduction

In March 2021, Parliament’s Transport Select Committee published a report on its ‘Trains fit for the Future?’ inquiry, exploring how technologies such as “electric, hydrogen and battery can be deployed to reduce the rail industry’s reliance on diesel only trains.” The report set out 12 recommendations covering the decarbonisation of the rail network. The

Government responded in May 2021.

This Progress Review looks back at the report’s recommendations and assesses the progress the Government has made, providing a red, amber or green rating for each recommendation. The intention of the Progress Review is to highlight where further action is needed.

Rail decarbonisation in the UK Rail is a low carbon mode of transport, contributing just 1.4% of transport emissions despite carrying 10% of all journeys. Rail accounts for only 0.5% of all UK emissions. The UK Government has a legal commitment to Net Zero by 2050, with a 2045 deadline set by the Scottish Government, as well as a target to take all diesel-only trains off the rail network by 2040 (2035 in Scotland).

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. The UK needs to start decarbonising now, as both Kings Buildings, 16 Smith Square, London, SW1P 3HQ +44 (0)20 7201 0777

infrastructure and rolling stock projects take time to deliver and trains have an average 30year life, meaning they maybe in use in 2050.

The interim Traction Decarbonisation Network Strategy (TDNS) published by Network Rail shows that to achieve Net Zero, the 15,400 kilometres of currently unelectrified railway lines in the UK will require decarbonising by: • 11,700 km to be electrified; • 900 km for hydrogen trains; • 400 km using battery trains; and • 2,300 km where multiple options are available.

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ria@riagb.org.uk www.riagb.org.uk

RIA Progress Review - Trains fit for the Future In November 2021, the Integrated Rail Plan was published, setting out rail investment plans for the Midlands and North of England. Further electrification on the Midland Mainline and Trans Pennine Route was confirmed in the Plan.

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a) Electrification 38% of the UK rail network is electrified - much less than comparable European countries which are typically 60% or more electrified. Electrified railways have been shown to benefit passengers and the wider travelling public as it is: • Better for the environment, with carbon emissions 60% lower than those from diesel trains today and 80% less with the estimated 2040 grid mix; they also produce no air pollutants at the point of use; • Quieter, reducing noise pollution for those living and working near the tracks and reduces noise and vibration for passengers; • Costs less in the long term when

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compared to the whole-life costs of diesel services; Improves journey times due to superior braking and acceleration; Lighter, meaning less wear to the track and therefore less maintenance; Reduces passenger delays, as electric trains are more reliable than diesel trains; and The only decarbonisation technology suitable for freight trains and faster passenger trains (above 100mph).

As shown by RIA’s Electrification Cost Challenge report, 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 led to higher costs as the sector is unable to retain the skills and expertise as shown by the cost increases on the Great Western Electrification Programme.

A rolling programme of electrification could reduce costs by up to 50% compared

Vivarail Battery Train

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RIA Progress Review - Trains fit for the Future to some past problem projects, as shown

by RIA's Electrification Cost Challenge report.

Climate Change Conference in Glasgow in November 2021.

A fleet order of new rolling stock would stimulate a new industrial sector, creating and retaining jobs and intellectual property in the UK whilst accelerating the decarbonisation of the network and supporting future exports. There is an opportunity for UK rail to become a global leader in battery and hydrogen technologies, with rail demand helping to create the UK market necessary to stimulate growth and kick start the zero carbon economy.

b) Hydrogen & Battery Trains There are parts of the network where electrification will not be a cost-effective solution and where technologies like hydrogen and battery will have a role.

The industry has demonstrated its ability to offer these new technologies, with a number of rail suppliers working on low carbon rolling stock solutions. A number of these were on display at the COP26

The Progress Review

This Progress Review is solely the work of the Railway Industry Association (RIA). In the following pages, each of the Transport Select Committee’s recommendations are listed, followed by the Government’s response and a RAG-rated analysis from RIA.

This Review does not cover Scottish rail decarbonisation, reflecting the scope of the original Committee inquiry.

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About the Railway Industry Association The Railway Industry Association (RIA) is the voice of the UK rail supply community. We help to grow a sustainable, high-performing, railway supply industry, and to export UK rail expertise and products. RIA has 300+ companies in membership in a sector that contributes £43 billion in economic growth and £14 billion in tax revenue each year, as well as employing 710,000 people. It is also a vital industry for the UK’s economic recovery, supporting green investment and jobs in towns and communities across the UK; for every £1 spent in rail, £2.50 is generated in the wider economy. RIA’s membership is active across the whole of railway supply, covering a diverse range of products and services and including both multi-national companies and SMEs (60% by number). www.riagb.org.uk March 2022 | For further information, please contact Public Affairs & PR Director Max Sugarman on max.sugarman@riagb.org.uk | 020 7201 0777 / 07399 042383

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RIA Progress Review - Trains fit for the Future

Recommendation 1 We recommend that the Department for Transport publishes a long-term strategy for decarbonising the rail network as a matter of priority. This should include a vision for what proportion of the future network will use electrification, battery and hydrogen. That strategy should be supported by appropriate costings, a credible delivery plan, and enabling targets and milestones. These targets and milestones should clarify how the 2040 and 2050 targets will fit together.

Government's Response The Government partially agrees with this recommendation. The Department is developing a Transport Decarbonisation Plan (TDP) and a Rail Environment Policy (REP) document. Taken together, these will set the Government’s longterm strategic direction for decarbonising the railway between now and 2050 and our intended carbon reduction pathway. A comprehensive environment plan for the rail network will be published by 2022 and will form a key part of the 30-year strategy for the railway.

Through the Network Rail-led Traction Decarbonisation Network Strategy (TDNS), Network Rail and industry have developed a vision for what the technological mix of trains operating on the railway could look like in 2050, based on today’s technology. While TDNS offers one such technological vision, further bottom-up analysis and discussion will be required for each part of the network as those technologies continue to evolve to ensure that we implement the most appropriate decarbonisation solution on each part of the network, including looking closely at affordability and value for money

RIA's RAG Rating The Government has published the Transport Decarbonisation Plan and the Rail Environment Policy, setting out a broad timeline for the decarbonisation of the railway network. The Williams-Shapps Plan for Rail proposes a statutory duty for Great British Railways on environmental sustainability and commits to the development of a 30-year strategy for rail that will incorporate a ‘comprehensive environment plan for the rail network’, to be published in 2022, which will ‘establish rail as the backbone of a cleaner future transport system’.

Further work is required to set out what actions will be taken each year to meet the Net Zero target in 2050, particularly around cost and delivery.

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RIA Progress Review - Trains fit for the Future

Recommendation 2 We call on the Department to work closely with other Government departments, including the Treasury, to secure agreement for the levels of funding necessary to begin implementing a long-term decarbonisation programme of the rail network. (Paragraph 31)

Government's Response The Government agrees with this recommendation. We will work closely with other departments, including the Treasury, to secure the necessary funding to deliver the policy that we will set out in TDP.

RIA's RAG Rating Whilst there has been funding for around 750 single track kilometres (STK) of rail electrification in the Integrated Rail Plan, there is no evidence of a longterm, funded decarbonisation programme for the rail network, with 450 STK of electrification being required each year to reach Net Zero by 2050.

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RIA Progress Review - Trains fit for the Future

Recommendation 3 We recommend that the Department implements an enhanced financial mechanism beyond that contained in the Rail Network Enhancement Pipeline process. That enhanced financial mechanism must be designed to ensure that strict transparency and adherence to cost discipline are maintained in any electrification programme. (Paragraph 57)

Government's Response The Government partially agrees with this recommendation. After the cost challenges that we experienced with previous electrification schemes in Network Rail’s Control Period 5, we introduced more robust financial mechanisms, including the Rail Network Enhancement Pipeline (RNEP) process, to ensure that, as far as is possible, future rail enhancement schemes are developed in a way that is affordable and represent value for money.

In principle, we agree with the need for financial transparency as much as possible, but this must also be balanced with any commercial sensitivity implications.

A review of financial governance mechanisms for rail enhancements is already underway within Network Rail. Where necessary, we will continue to enhance our financial governance processes to provide reassurance that lessons from previous electrification schemes have been learned.

RIA's RAG Rating No financial mechanism has been put in place and the Government is yet to publish the Rail Network Enhancements Pipeline, almost 900 days after the last update.

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RIA Progress Review - Trains fit for the Future

Recommendation 4 We recommend that the Department commits to a 30-year rolling programme of electrification projects and sets this out in its long-term rail decarbonisation strategy. (Paragraph 59)

Government's Response The Government partially agrees with this recommendation. We agree that a visible pipeline and smooth delivery profile of electrification schemes will help to enable Network Rail (and subsequently Great British Railways) and the supply chain to deliver electrification more efficiently, and so we will endeavour to deliver that pipeline of schemes over the next 30 years. However, having learned the lessons from Network Rail’s Control Period 5 where we overcommitted to a number of electrification schemes before they had been sufficiently developed, we now have the RNEP process in place to ensure that future schemes can be properly developed before we commit to them. It is right that we both continue to develop schemes through the RNEP process, to ensure that future schemes are affordable and provide value for money, but also that we balance this with the need to give the rail industry the sufficient pipeline of projects, and the certainty, that it needs. We will seek to balance both of these needs in our future approach towards decarbonising the railway between now and 2050.

RIA's RAG Rating Further electrification schemes have been announced, with the extension of the Midland Mainline and Trans Pennine Route Upgrade. However these commitments are not sufficient to meet the 450 STK of electrification required to meet Net Zero by 2050.

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RIA Progress Review - Trains fit for the Future

Recommendation 5 We recommend that Network Rail and the ORR continue to explore the potential for an extension in third-rail electrification capability and that the Department, as the overall sponsor of rail decarbonisation, proactively monitors this development in the event that Network Rail and the Office of Rail and Road are unable to reach an agreement on whether to proceed with further third-rail electrification projects. (Paragraph 61)

Government's Response The Government agrees with this recommendation where it is appropriate.

The Department is proactively and carefully monitoring the work that Network Rail and ORR are currently undertaking to look at the potential for third rail electrification extension. We are also funding a project, led by the Rail Safety and Standards Board, to look at further technical mitigations that could be implemented to improve the safety of third rail electrification.

RIA's RAG Rating We are unaware any work has been conducted on extending third-rail electrification. A decision is needed to inform the list of "no regrets" electrification schemes.

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RIA Progress Review - Trains fit for the Future

Recommendation 6 In responding to this Report, if not earlier, the Department should publish the list of “no regret” electrification schemes identified by Network Rail and confirm which schemes they intend to deliver as a priority, the costs of doing so, and the timeframes. (Paragraph 62)

Government's Response The Government partially agrees with this recommendation.

Having learned the lessons from Network Rail’s Control Period 5, where we overcommitted to a number of electrification schemes before they had been sufficiently developed, we now have the RNEP process in place to ensure that future schemes can be properly developed before we commit to them. The Department works closely with Network Rail’s regions to develop enhancement schemes, including electrification schemes. The status of each scheme can be seen in RNEP updates as they are published. The RNEP will be republished with updates as soon as is possible. Different projects are at different stages in the RNEP process, with some projects at a very early stage of pre-RNEP development.

When referring to a list of “no regret” electrification schemes to this Committee, Andrew Haines was referring to interim TDNS analysis that was requested by the Department in the first part of 2020, to give some early insight into some of the most likely TDNS recommendations on electrification, to support policy development in this area. That interim analysis, which is attached as an annex, included a list of unelectrified lines where, based on Network Rail’s own view, and the current state of available rail decarbonisation technologies, electrification would likely be the most appropriate decarbonisation option. This interim TDNS analysis, which has helped to inform the schemes in RNEP, has since been superseded by the TDNS Interim Programme Business Case, which was published by Network Rail in September 2020.

RIA's RAG Rating No list of 'no regret schemes' has been published. It had been hoped that these would include the 'freight infills' of c.320 miles which could move twothirds of rail freight to electric haulage.

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RIA Progress Review - Trains fit for the Future

Recommendation 7 The Department must make the case within Government to ensure that hydrogen trains are fully incorporated within the forthcoming national Hydrogen Strategy. This will help ensure the roll out of this new technology is properly co-ordinated and supported by appropriate infrastructure.

(Paragraph 79)

Government's Response The Government agrees with this recommendation. We are making the case across Government for hydrogen trains to be included to an appropriate level in the forthcoming national Hydrogen Strategy.

RIA's RAG Rating This recommendation has been acted on, given the role of hydrogen trains was included in the Hydrogen Strategy. In addition, several low carbon trains were on display at COP26. The next step is to commit to a fleet order of hydrogen trains, which is required to stimulate this new market and understand the operational practicalities at scale.

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RIA Progress Review - Trains fit for the Future

Recommendation 8 In its response to this Report, the Department should provide more information on how it intends, working with other Government departments, to support the growth of a domestic battery industry to ensure this form of technology can be utilised on the railway. (Paragraph 80)

Government's Response The Department will work with the Department of Business Energy and Industrial Strategy in supporting the growth of a domestic battery industry.

The Government is investing £318 million from the Industrial Strategy Challenge Fund in the Faraday Battery Challenge, to put the UK at the global forefront of the design, development, manufacturing, and recycling of electric batteries.

The Faraday Battery Challenge is creating the research, innovation and commercialisation pathways, and ecosystem that is establishing the UK as a battery science superpower, growing innovative companies and attracting large scale battery manufacturing to the UK. The challenge is split into three elements: • Support for the Faraday Institution, which is bringing together expertise from universities and industry as it endeavours to make the UK the go-to place for the research and development of new electrical storage technologies for both the automotive and wider relevant sectors; • Funding for feasibility studies and collaborative research and development projects;and • Investment in the UK Battery Industrialisation Centre, a unique open access facility to accelerate the development of cost-effective, high-performance, durable, safe, low-weight and recyclable batteries.

RIA's RAG Rating The Government has supported battery development. Hybrid trains are now on trial on the Chiltern lines and battery trains are being introduced in Wales. The private sector is already investing in battery technology, such as Porterbroook's HybridFLEX, Vivarail's battery and hybird trains and Hitachi and GWR work on the Intercity trains. However, further orders will be required and procurement decisions under GBR must not be put on hold.

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RIA Progress Review - Trains fit for the Future

Recommendation 9 The long-term rail decarbonisation strategy must explain the process by which the development of alternative technologies will be reviewed and how such technologies can be incorporated into the network strategy, if they reach the necessary level of development. (Paragraph 88)

Government's Response The Government agrees with this recommendation. The Network Rail-led Traction Decarbonisation Network Strategy (TDNS) recommends that Network Rail regional teams translate the national picture developed as part of TDNS into regional “bottom-up” assessments that support the implementation of TDNS’ recommended pathways. This work should include a review of alternative technologies where appropriate. By bringing track and train closer together into a single entity, Great British Railways will be ideally placed to consider electrification, hydrogen and battery concurrently, determine the best option, and commission both the necessary infrastructure and the right rolling stock to deliver decarbonisation outcomes. The analysis that informs TDNS will be updated periodically to take into account the development of rail decarbonisation technologies.

RIA's RAG Rating The Government's response is positive but there is no evidence openly available to the supply chain that this is happening.

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RIA Progress Review - Trains fit for the Future

Recommendation 10 As part of its upcoming cross modal freight strategy, the Department should ensure there is a single cross-modal freight decarbonisation target including both rail and road freight. (Paragraph 98)

Government's Response The Government notes this recommendation and recognises the importance of taking a holistic, cross-modal view of freight decarbonisation. We will therefore be setting out further details on freight decarbonisation in our forthcoming TDP. As the Committee will know, the Government has legislated that the UK will reach net zero greenhouse gas emissions by 2050 and, to achieve this, is developing an ambitious plan to accelerate the decarbonisation of transport. The TDP will set out in detail what government, business and society will need to do to deliver the significant emissions reduction needed across all modes of transport, including across rail and road freight. The TDP will put us on a pathway to achieving carbon budgets and net zero emissions across every single mode of transport by 2050. Our cross-modal freight strategy will also set out the Government’s objectives for the freight sector, including building on the TDP in relation to decarbonisation.

RIA's RAG Rating No such target established. A cross-modal Freight strategy has not yet been published. The Williams Shapps Plan for Rail and Transport Decarbonisation Plan mention freight infill, but there is no commitment to projects.

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RIA Progress Review - Trains fit for the Future

Recommendation 11 We recommend that the Department’s long-term rail decarbonisation strategy sets out how research and development will be supported and properly funded in order to deliver the scale of change required to decarbonise the rail network. (Paragraph 103)

Government's Response The Government partially agrees with this recommendation. Significant government support and funding for the research and development of new and emerging rail decarbonisation technologies has been taking place over a number of years, with the Department working closely with a range of partners in the private and education sectors to do this. While it is important that the government continues to support cross-industry research and development, it is also important that the private sector continues to work with us and invest appropriately in new and emerging technologies.

Currently, the Department majority-funds a Research & Development programme, delivered by the Rail Safety and Standards Board (RSSB) since 2003, to remedy cross-industry challenges that that cannot or would not be resolved by individual or small groups of organisations.

Decarbonisation is one of the major workstreams of this programme. The Department also funds the Rail Innovation Programme, delivered through “First of a Kind” competitions run by Innovate UK since 2017/18, to help overcome practical barriers to innovation that make it difficult for new entrants to bring novel technologies to the rail market. The Rail Innovation Programme’s two most recent First of a Kind competitions have included themes specific to, or encouraging of, innovative decarbonisation projects.

The Williams-Shapps White Paper sets out that research, development and innovation funding will be simplified to make it more outcome-focused and to improve collaboration. Great British Railways will become the primary public funder of research, development and innovation initiatives across the railway, delivering priorities set by ministers. Closer alignment between public sector research and development funding and the railway’s long-term investment strategies will better support long-term plans for rail decarbonisation. Stronger links with private sector innovators will be a core part of the new research, development and innovation system, seeking to align GBR’s research and development schemes and funding pipelines with the supply chain. Change will be planned in close consultation with existing bodies, such as RSSB and Innovate UK.

RIA's RAG Rating

A number of First of a Kind projects are now being rolled out, showing how R&D and innovation can support the decarbonisation challenge. R&D funding for rail now needs to be confirmed for Control Period 7, co-funded by industry.

The current R&D programme is focussed on Infrastructure whereas the CP7 programme should be for the whole rail system.

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RIA Progress Review - Trains fit for the Future

Recommendation 12 The Department must set out how it will ensure that train operators meet the legal requirement to make their trains fully accessible and what sanctions will be used if some train operators once again fail to meet the deadline. We will monitor this situation closely. (Paragraph 110)

Government's Response The Department is committed to making sure that trains on the mainline network comply with modern accessibility standards. Around 97 per cent are compliant, which corresponds to nearly 16,000 vehicles. The remaining 3 per cent (525 vehicles over four operators) will be removed from service as soon as possible. Approximately 133 of these vehicles will only be used when coupled to compliant vehicles. The four operators in question are prioritising the use of compliant trains in the timetable and continue to take operational mitigations – such as ensuring that the last train of the day is operated by compliant vehicles and information on accessibility features by class of train is readily available.

RIA's RAG Rating We welcome the Government commitment to a national accessability strategy linked to the long-term investment programme including proposals for a statutory duty for GBR to improve accessibility. The Government has also commissioned an audit of accessibility at every UK station.

Further work is required to roll out accessibility improvements across UK trains and stations.

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