HGV operators will need incentives to cover the upfront costs of switching to battery electric HGVs, if they are to meet government targets to end the sale of diesel trucks by 2040, according to the latest report from the Climate Change Committee (CCC).
The CCC’s Seventh carbon Budget report, published today, sets out ambitious targets for the government to adopt to in order to achieve Net Zero by 2050.
These include measures to ensure surface transport emissions fall dramatically by 86% by 2040 – with the switch from ICE to electric HGVs contributing 12% and the transition to electric vans cutting emissions in the sector by 19%.
The report predicts that HGV operators will overwhelmingly choose to switch to battery electric HGVs, as these cover most use cases and offer lower lifetime costs.
It also rejects hydrogen-powered commercial vehicles as an option, stating “there will be no Hydrogen cars or vans, and very little or potentially even no role for hydrogen in heavier vehicles.”
The report says key incentives driving the switch to electric HGVs include the falling cost of ev battery prices, the increasing choice of e-HGV models, and progress on the roll-out of public Charging infrastructure, pointing to government support for 25 sites to be launched by 2026.
The CCC forecasts 63% of HGVs in the UK fleet will be electric by 2040, driven by the government’s commitment to a 2040 phase-out date for ending the sale of new ICE HGVs and a 2035 phase-out date for smaller ICE HGVs, which the report said “sends a strong signal to industry to research and invest in zero-emission HGVs.”
However, the report warns that “it is likely that incentives will be needed in the early years to support businesses with the higher upfront cost of zero-emission HGVs, if this level of uptake is to be achieved.”
The report identifies other barriers to battery-electric HGV uptake that will need to be addressed, if its recommended targets are to be met.
These include current weight restrictions, which would increase e-HGV journeys; the lack of a comprehensive charging infrastructure, including collaborative depot chargers; ongoing delays in securing connections to the electricity grid; and “uncertainty” around the technology needed for long-distance journeys and heavy cargoes.
The CCC also projects that 74% of vans on the road will be electric by 2040, cutting surface transport emissions by 19%.
Noting that the market share of electric vans increased from 6% to 34% in 2023, the report expects e-vans will reach around 95% of new sales by 2030 and 100% by 2035.
It adds: “While this ambitious trajectory outpaces the ZEV mandate, it is achievable – there has been strong early EV growth in the UK and consumer awareness is high.”
It argues that sales of new EVs will increase as cheaper batteries and lower running and maintenance costs drive down the price of e-vans.
However it acknowledges that “sales of electric vans have been slower to pick up than cars. This is partly due to there being fewer electric van than car models.
“The continued development of charging infrastructure will be key in increasing commercial confidence in electric vans, but further action to remove barriers to uptake is likely to be needed.”
RHA echoed the committee’s call for government support to help fleet operators cover the cost of transitioning to net zero fleets.
Chris Ashley, RHA senior policy lead said: “decarbonisation presents real opportunities for growth, but this will require significant investment and support for businesses to adapt to the changes.
“The cost of converting the UK’s HGV fleet to zero-emission vehicles is estimated at over £100bn, and the technology isn’t yet advanced enough for all businesses to make widespread purchases.
“We want government to prioritise measures that reduce the costs of decarbonisation and steps can be taken now to reduce costs in the long run, such as prioritising infrastructure investment and ensuring that HGV parking facilities are futureproofed with electric charging capabilities.”
He added: “With the number of registered electric HGVs on UK roads as low at 500, further support and direction will be needed to ensure the remaining 500,000 HGVs can be decarbonised to meet the government’s net zero goals.
He also called for a clear commitment that phase-out dates for the sale of new diesel HGVs will not change, and for financial support to help operators manage the costs of decarbonisation.
“This includes a government-backed loan scheme for zero-emission vehicle acquisition and investment in the charging infrastructure needed for HGVs,” he said.
He concluded: “To achieve the UK’s net zero goals while keeping the supply-chain fluid and maintaining the high service standards expected of our sector, we need to see continued and targeted government support.
“By reducing the costs of decarbonisation and ensuring the infrastructure is in place, our sector can help to play our part in paving the way for a more sustainable future.”
Logistics UK director of policy Kevin Green said the report rightly recognises the incentives and government policy that is needed to support the sector achieve net zero.
“The logistics sector is already embracing the decarbonisation agenda and is committed to playing its part to help the UK achieve net zero. Today’s report from the Climate Change Committee highlights a strategy is needed to deliver commercial vehicle charging infrastructure, speed up new grid connections, alongside incentives to tackle higher vehicle costs. Without this, the industry feels it is being set up to fail,” Green continued.
“It is critical that alternative fuels such as hydrotreated vegetable oil (HVO) that can be used in diesel engines without any modifications are incentivised by government. Its use effectively means the industry could reduce carbon emissions by 80% overnight. And while there are some challenges to address regarding HVO production, these are not insurmountable and significantly easier to achieve than installing electrification infrastructure and replacing every commercial vehicle on the road in the short to medium term. Our members have long been calling for a coherent strategy for the role low carbon fuels can play in the transition to net zero, but the government continues to overlook the opportunity that these present.
“The decarbonisation of the logistics sector must be underpinned by an agreed roadmap to net zero and the phase-out of fossil fuels, based on the availability of technology, infrastructure investment, regulatory reform and tax incentives. We believe this is the only way to ensure a fair transition to net zero which protects the UK’s supply chains, while helping drive the government’s growth agenda.”
Mike Hawes, SMMT chief executive, said the CCC report makes clear that decarbonising road transport is “fundamental”to the delivery of net zero.
He added: “Take-up of zero emission vehicles to the expected levels can only be stimulated if there are bold incentives to encourage demand, more affordable electricity, significant additional investment in infrastructure, and clear and consistent messaging that buying an electric vehicle is the right thing to do.
“Moreover, we want this transition to support industry, jobs and economic growth in the UK, so ambitious industrial and trade strategies must be implemented else the security and resilience the budget seeks to deliver would be put at risk.”
