Long and winding road to net zero

Various discussions over the past few weeks have got us pondering whether we should be concerned with the rate of progress the industry is making on its transition to the net zero nirvana. There is a huge amount of investment going into developing new trucks and infrastructure and the first mover fleets are making the most of their industry trailblazer status, but for the vast majority of UK commercial vehicle fleet operators, shifting to a carbon zero fleet of vehicles is still a pipe dream. We have to admit, it is easy to get a bit dismayed with the pace of change.

That’s not to decry the excellent work being done by the early adopters, nor is it a signal that the non-movers don’t care, but without a Total Cost of Ownership operating cost model to attract them or an imminent legislative stick to “persuade” them, it all gets a bit too difficult and, for now, unnecessary.

While it might feel like we are getting stuck in limbo with a big hump to get over in order to accelerate the shift to net zero, maybe this is what transition looks like when you try to reverse over 100 years of fossil fuel development.

A slow market transition, while seemingly inevitable, won’t do much to help Volta and there will undoubtedly be others, who’s market entry misses the bullseye. But the transition is happening, the conversations have started and while it’s easy to get a bit gloomy that things aren’t happening fast enough, change is a-coming.

The recent £200m zero emission HGV and infrastructure demonstration (ZEHID) programme, is one example and should be a big opportunity to show the market what’s possible. While we’ve been focused on the number of trucks the programme will fund, of even great significance will be the infrastructure demonstrations – this should help to boost market confidence.

Elsewhere, we’ve spent a bit of time recently trying to get a bit closer to the nuances of Scope Three emissions reporting – it is related to the general point here, bear with us…

The UK Department for Energy Security and Net Zero (DESNZ), launched a “call for evidence” on the topic a couple of weeks ago. As we’ve said before any talk about Scope Three emissions should create a blip on the radar of any fleet, as transport and distribution will be a major source of the Scope Three emissions for many organisations.

Disclosure of most Scope 3 emissions remains voluntary under current reporting requirements. However, there is a general move, off the back of the development of international standards, to tighten up the reporting and there is a Government directive expected to make its way into legislation. This call for evidence should be a signal that the government in the UK will adopt the standards, rather than whether it will do so. The EU has already announced its intentions to align itsel with the emerging international standards, so brace yourselves, this is coming down the line. Indeed, for many bigger organisations it is already driving decision making.

In the call for evidence announcement the government acknowledges “calculating Scope 3 emissions can be difficult and complex; they are both the most significant and most challenging source of emissions for businesses to identify, quantify and address”. We shouldn’t put too much store by that, decarbonising the UK’s road freight supply chain is “difficult and complex”, and that hasn’t stopped them laying out a “one size fits all” legislative approach.

So why is this important? It takes us back to the accelerators of change.

Scope Three emissions reporting, while not as brutal a stick as an end of sale date for diesel trucks, is nevertheless a “persuader”. As fleets get swept into scope of the carbon emission reporting requirements, there will be an implicit expectation you’ll need to show how those emissions are being reduced. And when, as seems likely, it becomes a mandatory requirement similar to your annual accounts, then carbon reporting will be as significant an indicator to the health of your business as your balance sheet. Quite what this carbon balance sheet will look like when everyone is running zero emission vehicles, is anybody’s guess, but for the next 25 years of transition, this is likely to be the biggest driver of change.