Low Carbon Vehichles

8/2/2019 Low Carbon Vehichles

1/51

Consultation on

Low Carbon Vehicles


2/51

The Scottish Government, Edinburgh 2009

Consultation on

Low Carbon Vehicles


3/51

Crown copyright 2009

ISBN: 978-0-7559-8076-5

The Scottish Government

St Andrews HouseEdinburgh

EH1 3DG

Produced for the Scottish Government by RR Donnelley B60856 06/09

Published by the Scottish Government, June 2009

Further copies are available from

Sustainable Transport Team

Transport Directorate

The Scottish Government

Victoria Quay

Edinburgh EH6 6QQ

The text pages of this document are printed on recycled paper and are 100% recyclable


4/51

A Consultation on Low Carbon Vehicles

Contents

Ministerial Foreword ...................................................................................... 11. Introduction....................................................................................................32. Current policy and targets.............................................................................. 5

2.1 EU Directives ...................................................................................... 52.2 Reserved UK Policies ......................................................................... 62.3 Scottish Government Policies ............................................................. 7

3. Transport and climate change ..................................................................... 113.1 Trends and levels.............................................................................. 113.2 The public sector fleet....................................................................... 13

4. Technology options ..................................................................................... 164.1 Efficiency improvements to internal combustion engines.................. 164.2 Alternative fuels, including biofuels ................................................... 174.3 Hybrids.............................................................................................. 194.4 Electric Vehicles................................................................................204.5 Hydrogen .......................................................................................... 224.6 Uptake of low carbon technologies and fuels.................................... 234.7 Projections ........................................................................................ 23

5. Economic and business opportunities ......................................................... 286. Setting targets ............................................................................................. 30

6.1 Potential areas for intervention ......................................................... 306.2 Role of the public sector.................................................................... 326.3 Potential targets for the public sector fleet ........................................ 346.4 The Scottish fleet .............................................................................. 356.5 Role of Industry................................................................................. 37

7. Annex A: Responding to this Consultation Paper........................................ 408. Annex B: Questions..................................................................................... 429. Annex C: Respondent Information Form: Low Carbon Vehicles.................. 4410. Annex D: The Scottish Government Consultation Process.......................... 4511. Annex E: Acronyms..................................................................................... 46


5/51

1

Ministerial Foreword

Sustainable Economic growth is the first priority for this Government. Efficienttransport is an essential support to the countrys economic activity. Transport is

responsible for around 25% of Scottish emissions and, of these, more than 70% arefrom road transport. We recognise that delivering low carbon transportwill have itschallenges. However, I and my Ministerial colleagues are committed to reducingtransport emissions.

The Climate Change (Scotland) Bill sets an ambitious but realistic framework toreduce Scotlands emissions by at least 80% by 2050. The Bill aims to drive newthinking and solutions to building a sustainable low carbon economy. We alsorecognise the opportunities inherent in transforming to a low carbon society.

We believe that while the market is likely to deliver low carbon vehicles over time,

this may be too slow in the absence of some level of intervention. This consultationseeks your views on setting ambitious targets for the development and uptake of lowcarbon vehicles in Scotland. Our starting point for discussion is one of ambition.However, we recognise that there will be a number of barriers as well asopportunities in implementing ambitious targets, including costs, the ability oftechnologies to deliver, and consumer behaviour. In addition, there may be classesof vehicles where it simply isnt practical to aspire to significant emission reductions.Consequently, whilst we are adopting an aspirational starting point, we areconscious that there remains a significant amount of work in front of us before thecompletion of a strategy and supporting targets.

Your input into this work will help us to set objectives and develop a realistic actionplan to help speed the process in Scotland, to significantly reduce transportemissions, and to provide job and wealth creating opportunities for our industry andresearch institutions. We recognise that there are already pockets of excellence inScotland; this document is sprinkled with short case studies illustrative of our existingcapabilities. It will be important to draw on existing expertise, and exploit businessopportunities.

The significant uptake of low carbon vehicles will be part of a wider package ofmeasures to mitigate against climate change, including those aimed at increasing

walking and cycling, smarter travel choices and making better use of publictransport.


6/51

2

The Scottish Government is seeking views from all interested parties and, inparticular, invites leaders in the public and private sector as well as academia toengage with this consultation process. In so doing you will contribute to the buildingof a greener, healthier, low carbon Scotland.

Stewart Stevenson MSPMinister for Transport, Infrastructure and Climate Change


7/51

3

1. Introduction

The Scottish Governments Economic Strategy1 sets out the single overarchingPurpose of the current Scottish Government:

to focus the Government and public services on creating a more successfulcountry, with opportunities for all of Scotland to flourish, through increasingsustainable economic growth.

The following climate change targets have been established to help meet thischallenge of higher sustainable growth.

x To reduce emissions over the period to 2011

x To reduce emissions by 80% by 20502.

The 2050 emissions reduction target is included in the Climate Change (Scotland)Bill3 introduced to the Scottish Parliament at the end of 2008. In addition, the Bill willcreate a framework of annual targets, and an interim target for 2020, to drive therequired actions forward. The legislation will provide business, the public andsociety with the certainty required to make the right choices now.

This consultation will help to determine the most effective use of targets for thedevelopment and uptake of Low Carbon Vehicles (LCVs) and alternative fuels by2020. Because of their wide range and various functions, there is not currently asimple definition of what constitutes a LCV. It is increasingly recognised that

tailpipe emissions

4

do not necessarily provide an accurate comparison ofperformance, and full life-cycle emissions are more appropriate to comparealternatively powered vehicles, such as those using biofuels, electricity andhydrogen. However car emissions are still generally compared on a tailpipe basisusing a standard test-cycle. This means that there is guidance available to help uswith definitions.

x Cars emitting less than 100g/km are exempt from Vehicle Excise Duty butrepresent just 0.2% of new car sales.

x 11% of new car sales are below 120g/km5 and provide a benchmark for

good performance.

x The European Commission defines ultra-low carbon vehicles as thoseemitting less than 50g/km.

6

1http://www.scotland.gov.uk/Publications/2007/11/12115041/0

2Compared to a 1990/95 baseline

3http://www.scottish.parliament.uk/s3/committees/ticc/inquiries/ClimateChangeBill.htm

4Tailpipe emissions are emissions at the point of use of a vehicle

5The Society of Motor Manufacturers and Traders Limited (SMMT) 2009

6

Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 settingemission performance standards for new passenger cars as part of the Community's integratedapproach to reduce CO2 emissions from light-duty vehicles.


8/51

4

x The European Commissions long-term target is average new car tailpipeCO2 emissions of 95g/km by 2020

7.

In this consultation, we are looking at stimulating the development of low carbonoptions for all vehicle types. Consequently, given the differences in purpose and

performance between, for example, a car and a Heavy Goods Vehicle (HGV), oneuniversal figure of gCO2/vkm would not be an appropriate definition for thisdocument. Instead, this consultation defines a low carbon vehicle as being poweredby alternative fuels or technologies, including: electric vehicles (EVs), plug-inhybrids, hybrids, stop-start/micro hybrids, hydrogen vehicles or equivalent. Withinthis, we expect such vehicles should run from renewable sources, which havesignificantly less emissions per kilometre.

The consultation paper reflects the wealth of reports and new information aboutcurrently known technologies that have been published.

A consultation response form is at Annex A. The consultation period will begin on29 June and end on Friday 2 October 2009.

7Idem


9/51

5

2. Current policy and targets

Current policy governing vehicle emissions and alternative fuels is located at threedifferent levels European Union (EU), reserved to the United Kingdom (UK) andScottish Government. This chapter provides an overview of policies relevant to both

target setting and uptake of LCVs in Scotland.

2.1 EU Directives

At a European level, the Directive on Energy End-use Efficiency and EnergyServices

8 recognises that the motor fuel and transport sectors have an important

role to play regarding energy efficiency and energy savings and aims to improveenergy end-use efficiency. It applies to all forms of energy, including transport fuels.

Article 5 and Annex VI of the Directive include a requirement for Member States to

purchase vehicles based on lists of energy-efficient product specifications using,where applicable, minimised life-cycle cost analysis or comparable methods toensure cost effectiveness. It also sets a voluntary standard for the inclusion ofenvironmental priorities in the procurement of public sector vehicles and will comeinto force later this year.

The Directive on the Promotion of Clean and Energy Efficient Road TransportVehicles

9includes a statutory obligation on Member States to take into account

environmental impacts of vehicles during public sector procurement. Three optionsfor complying are presented:

x setting technical specifications for purchase;

x using impacts as awards criteria during procurement; or

x monetising the impacts using a defined methodology.

The Directive is due to come into force in around 18 months time and, as it fallswithin devolved responsibilities, will require transposition into domestic legislation bythe Scottish Parliament.

In addition, two EU directives are likely to involve increased use of biofuels and

alternative technologies. Under the Renewable Energy Directive10 (RED) 10% oftransport fuels must comprise renewable energy by 2020 (transport fuels includepetrol, diesel, biofuels used in land transport, and electricity). This is part of a widertarget of 15% of energy in the UK, and 20% across the EU, to be renewable by2020. The Fuel Quality Directive

11(FQD) on the other hand requires fuel suppliers to

8Directive 2006/32/EC of the European Parliament and Council of 5 April 2006 on energy end-use

efficiency and energy services and repealing Council Directive 93/76/EEC9

Directive 2009/33/EC of the European Parliament and of the Council of 23 April 2009 on thepromotion of clean and energy-efficient road transport vehicles10

Draft Directive of the European Parliament and Council on the promotion of the use of energy from

renewable sources amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC11Draft Directive of the European Parliament and Council amending Directive 98/70/EC as regards

the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor the introduction


10/51

6

reduce emissions by 6% by 2020. The RED and the FQD have almost completedtheir EU legislative process.

A regulation on new car CO2, adopted on 23 April 200912, requires manufacturers to

reduce their new car fleet average emissions. An initial target of 130gm CO2/km has

been set and is to be phased in from 2012 with full compliance by 2015. A longerterm target of95gCO2/km has been set for 2020. The EU is also progressing anumber of complementary measures to support the new car CO2 regulation,including mandating tyre pressure monitoring systems and gear shift indicators. Inaddition, the European Commission is expected to bring forward a proposal on CO2from vans later in 2009.

The Car Labelling Directive13 requires dealers selling new passenger cars to displayinformation on vehicles fuel consumption and CO2 emissions.

2.2 Reserved UK Policies

The Scottish Government liaises closely with the UK Government on reservedpolicies which have an impact on Scotland. These include reserved transportpolicies.

The Renewable Transport Fuel Obligation (RFTO) was introduced in April 2008. Ittransposes the EU Directive on the promotion of biofuels

14. It places an obligation

on suppliers of fossil fuels to ensure that a proportion of the road fuels they supply inthe UK comprise biofuels. The effect of this was to require 5% of all UK fuel sold onUK forecourts to come from a renewable source by 2010. This target has been

amended in light of the Gallagher Review

15

on the sustainability of biofuels and the5% target will not be reached until 2013/14. The DfT, with input from the ScottishGovernment and the Scotland Office, will consult on the implementation of the REDthis summer, and the accompanying Impact Assessment will look at implications ofthe RTFO for Scotland.

In January 2009, the Secretary of State for Transport announced a 250 millionpackage to help build the market for ultra-low emission vehicles. The bulk of thefunds will be used from 2011 onwards to help offset the premium on the expectedhigher purchase prices of electric and plug-in hybrid cars. This funding package willbe open to people in Scotland. The amount of subsidy to be offered to the public is

expected to be between 2,000 and 5,000 per vehicle. In addition, up to

of a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealingDirective 91/12/EEC12

Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009setting emission performance standards for new passenger cars as part of the Community'sintegrated approach to reduce CO2 emissions from light-duty vehicles.13

Directive 1999/94/EC of the European Parliament and of the Council of 13 December 1999 relatingto the availability of consumer information on fuel economy and CO2 emissions in respect of themarketing of new passenger cars14

Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the

promotion of the use of biofuels or other renewable fuels for transport15The Gallagher Review of the indirect effects of biofuels production, July 2008

http://www.dft.gov.uk/rfa/_db/_documents/Report_of_the_Gallagher_review.pdf


11/51

7

20 million will be available to develop an electric vehicle charging infrastructureframework to help consortia of cities, regions, private businesses and utilitycompanies create a UK network of electric car cities. The DfT will be setting outdetailed eligibility criteria for both schemes later this year.

The DfT announced a 20m public procurement programme in May 2007, to helpstimulate the market for LCVs. The programme is initially focussed on vans. Theprogramme will also be supporting demonstrations of ultra-low carbon cars in anumber of locations around the UK. Glasgow City Council is participating in theprogramme, and the Scottish Government is exploring and monitoring issues inrelation to this scheme.

Reserved fiscal policies include reform to Vehicle Excise Duty (VED) which meansthat from 1 May 2009, cars emitting less than 100g/km are exempt from VED.

National Conversation

While many transport functions are already devolved to the Scottish Parliament,many of the issues raised in this consultation relate to policies and programmeswhich are reserved to the UK Government. The Scottish Government is promoting aNational Conversation to give individuals, communities, and organisations acrossScotland the opportunity to examine and debate their views about how Scotlandshould be governed in the future and make an informed choice about constitutionalreform or independence.

For example, if Scotland were to be an independent country, it would have full fiscalautonomy. The Scottish Government would therefore have powers to set and levyfuel taxes and vehicle excise duties at levels that would encourage the uptake ofLCVs.

2.3 Scottish Government Policies

This chapter provides the Scottish Government policy context for LCVs.

2.3.1 Climate change policy

The Scottish Governments overarching Purpose is to increase sustainableeconomic growth. The sustainability element is reflected in the statutory mitigationtargets contained within the Climate Change (Scotland) Bill.


12/51

8

2.3.2 Transport policy

As part of the transport contribution to reduced emissions, the Scottish Governmentintends to set ambitious commitments and targets for LCVs. The basis for this stems

from its 2007 manifesto commitments:

x set an ambitious target for the use of alternative road fuels

x begin early consultations on the most effective target for the use of biofuelsand hydrogen powered vehicles, and put forward as a starting point fordiscussion a twin target of a 100% use of alternative powered vehicles bypublic sector vehicles by 2020 combined with a national target of 30% forother road users; and

x as part of this commitment examine incentives for industry to develop biofuels

in Scotland and for road users to make greater use of these lower emissionfuels.

Since 2007, a number of reports and studies have been published which havebroadened our evidence base for considering targets. In particular, recent concernsabout some of the negative impacts of first generation biofuels indicate that we mustcontinue to take full account of all the impacts of the production and use of biofuels.The Scottish Government therefore supports the recommendations of the GallagherReview referenced above.

However, the principles of these commitments remain the same: ambitious targetsfor LCV uptake led by the public sector to reduce emissions and stimulate theScottish economy.

2.3.3 The National Transport Strategy

Scotlands National Transport Strategy16

(NTS) introduced the three strategicoutcomes of improved journey times and connections; reduce emissions; andimprove quality, accessibility and affordability. The NTS Delivery Plan

17sets out the

actions we are taking, within the context of the national performance framework, tosupport the purpose of this Government.

The Energy Saving Trust runs a number of relevant programmes for theGovernment, to engage individuals and organisations to reduce emissions andcosts. Free Green Fleet Reviews, through the Trust, are available in Scotland toorganisations with over 20 vehicles. The reviews provide advice to enable fleetmanages to achieve carbon and cost savings. Advice on developing, implementingand monitoring Travel Plans is provided through on-line resource atwww.chooseanotherway.com, free bespoke consultancy from the Energy SavingTrust as well as travel plan officers in each Regional Transport Partnerships.

16December 2006

17http://www.scotland.gov.uk/Topics/Transport/NTS/deliveryplan


13/51

9

Energy Saving Trust and the Energy Saving Scotland Advice Network promote eco-driving, to raise the carbon and cost saving benefits by more efficiently driving styles.An element of campaign is the development of the websitewww.ecodrivescotland.com. The site is being developed to provide links and adviceon emissions from cars. Data on emissions from vans can be accessed from the

Business Gateway website.

The Scottish Government is committed to facilitating the upgrading of the publicsector bus fleet by 2020. The public sector bus fleet is predominantly minibuses.We believe it is possible for this fleet to entirely consist of LCVs by 2020. We arealso developing proposals to change the Bus Service Operators Grant Scheme toencourage increased investment in lower emission and higher quality vehicles in thecommercial sector.

The Scottish Government is also committed to reducing freight emissions, which arebeing tackled as part of wider package of measures through the Freight Best

Practice Scotland18. This programme, and the elements contained within it, includethe development and publication of case studies demonstrating the advantages ofEVs over diesel equivalents for city centres, as well as the use of technology inreducing the unladen weight and improving efficiency in rural areas.

2.3.4 Energy policy

In February this year, the Cabinet Secretary for Finance and Sustainable Growthannounced a set of energy pledges. These pledges form a coherent approach toenergy issues in Scotland, and will shape the policy agenda for the remainder of thecurrent term of this Government. Pledges 8 and 9 specifically relate to transport:

x We will develop and deliver more sustainable transport to improve efficiencyand reduce transport emissions in the longer term; and

x We will promote the development, uptake and use of electric and other lowcarbon vehicles, in addition to using improvements in vehicle engineeringwhich are already available.

The Scottish Governments Economic Strategy also highlights the importance ofrenewable energy to our commitments to reducing carbon emissions and promotinggrowth. Our natural resources, research base and wider energy strengths provideus opportunities to:

x provide reliable, locally produced sustainable sources of energy;

x generate greater and more widely shared employment;

x create more highly skilled and better paid jobs;

x foster a self-sustaining and ambitious climate of entrepreneurial advance;

18http://www.freightbestpractice.org.uk/scotland


14/51


15/51

11

3. Transport and climate change

This chapter provides high level data on transport emissions and the current make-up of the Local Authority (LA) fleet in Scotland. It demonstrates the importance ofreducing emissions from the transport sector, and of stimulating the use of LCVs. It

also highlights which transport modes are the greatest contributors to Scottishemissions.

3.1 Trends and levels

In 2006, total greenhouse gas (GHG) emissions from all forms of transport inScotland, including international aviation and shipping, measured 15,001 kilo-tonnesof carbon dioxide equivalent (ktCO2e). This was equivalent to almost a quarter oftotal Scottish emissions for 2006.

Disaggregating this total transport figure, road transport accounted for 10,506ktCO2ein 2006, 70.0% of all Scottish transport emissions during the year. The long-run(1990-2006) average growth in emissions from road transport is 0.9% p.a.

Within road transport, cars are the source with the greatest emissions, accounting for6,055ktCO2e in 2006. Whilst emissions from cars have fallen since their peak in2002, this figure is still equivalent to over a half of Scottish road transport emissions.Although emissions from cars fell slightly between 2005 and 2006, the averagegrowth rate in emissions from cars between 1990-2006 has been 0.3% p.a.

The next biggest contributors to Scottish road transport emissions are HGVs and

Light Goods Vehicles (LGVs), responsible for 2,221ktCO2e and 1,716ktCO2erespectively in 2006. Furthermore, emissions from LGVs continue to growsignificantly (an average of 4.2% p.a. from 1990-2006).

Table 1 below gives the full set of figures for road transport emissions by source

Table 1: Emission levels and trends in road transport by sources (ktCO2e)

SourceEmissions

2006 (ktCO2e)

% of roadtransportemissions

(2006)

Averagegrowth

p.a. (1990-2006)

Growth(2005 2006)

Cars 6,055 57.6% 0.3% -0.1%HGVs 2,221 21.1% 0.5% 2.7%LGVs 1,716 16.3% 4.2% 5.2%Buses & coaches 421 4.0% 0.5% 6.9%Other 53 0.5% 5.9% 2.5%Motorpeds & Motorcycles 39 0.4% -1.8% -5.8%

Total 10,506 100.0% 0.9% 1.6%


16/51

12

3.1.1 Emissions per kilometre

Travel by different modes has differing impacts in terms of emissions of CO2 pervehicle kilometre (vkm). Defras Company Reporting Guidelines

19, updated in April

2008, allow the CO2 per vkm of these different modes to be compared. Table 2below demonstrates these figures for road transport vehicles.

Table 2: CO2 emissions per vehicle kilometre20

Passenger transport gCO2/vkm

Average petrol car 207 (174)

Average diesel car 198 (154)

Average car (all) 204 (170)

Average petrol motorbike 106

Freight transport gCO2/vkm

Average petrol LGV 224Average diesel LGV

21272

Average LGV (all) 266

Average rigid HGV 895

Average artic HGV 917

Average HGV (all) 906

Vehicle efficiencies may be expected to increase over time as new technology isdeveloped. As such, we might expect that the average CO2/vkm will be lower fornewer vehicles. Figure 1 below shows the average age of vehicles, by vehicle type,

in Scotland. For comparison, results for Great Britain are also presented.

19http://www.defra.gov.uk/environment/business/reporting/pdf/ghg-cf-guidelines-annexes2008.pdf

20All figures are estimated using data for GB/UK as a whole so do not specifically relate to Scotland.

The car figures in brackets are derived from the 2008 DfT publication Carbon Pathways Analysis:Informing Development of a Carbon Reduction Strategy for the Transport Sector. This calculatesefficiency figures using a traffic weighted average car emission factor to take account of the fact that

lower CO2 emitting cars, such as newer cars and diesel cars, are on average driven more than higherCO2 emitting cars such as older cars or sports cars.21

Diesel LGVs tend, on average, to be heavier than petrol LGVs.


17/51


18/51

14

Figure 2: Breakdown of vehicle type within Scottish Local Authorities, 2008

6899

61%

2871

25%

1011

9%

611

5%

LGVs

HGVs

Cars

Buses

We can also see the total level of emissions associated with each vehicle type.Figure 3 below demonstrates that HGVs account for the greatest amount, at over45ktCO2 p.a. in 2007/08. Furthermore, 90% of emissions from LA vehicle fleetscome from HGVs and LGVs combined.

Figure 3: Total carbon footprint by vehicle type 2007/08 (tonnes)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

tCO2

3,039 45,415 28,317 5,238

Car HGV LGV Bus

The analysis also demonstrated that 98% of LAs fleet vehicles use diesel, whichmay be reflective of the large proportion of larger vehicles within the fleets. Inaddition, analysis showed a direct correlation between average fleet ages and their

carbon footprints, with newer fleets, on average, being more carbon efficient.Finally, Figure 4 highlights the average age of the LA vehicle fleet by vehicle type. As


19/51


20/51

16

4. Technology options

This chapter provides background information on the key vehicle and fueltechnologies that have the potential, if applied in parallel with an appropriateframework to lock-in benefits, to reduce carbon emissions in the road transport

sector. It includes details of the types of technologies that exist, and the stage theyare at in the development cycle.

We also explore some of the opportunities to stimulate the uptake of suchtechnologies, as well some barriers to development that may exist. We considerefficiency improvements to internal combustion engines, alternative fuels (includingbiofuels), hybrid vehicles, EVs and hydrogen vehicles in turn. These technologiesare all potentially applicable to all types of road vehicles cars, LGVs, HGVs andbuses. They are, however, generally regarded as being easier to implement in carsand LGVs, than HGVs and buses given the much higher power requirement of thoselarger, heavier vehicles. This is an emerging and developing market, and wherepossible we have included the indicative cost differential between the newtechnology and existing petrol or diesel equivalents. These costs are, however, veryuncertain and are provided as guidance only.

Comparative information on emissions on tailpipe emissions of LGVs are publishedon the Vehicle Certification Agency website (www.vca.gov.uk). The DfT has researchunderway to understand emissions from this sector and later this year the EuropeanCommission is planning to introduce legislation to reduce emissions from LGVs(essentially vans). For HGVs there is no test-cycle information and comparative

information is difficult to obtain.

4.1 Efficiency improvements to internal combustion engines

Currently, nearly all road vehicles are powered by internal combustion engines,fuelled by either petrol or diesel. In a DfT review of the innovation system for lowcarbon technologies

23, it was suggested that over the next 10 to 15 years, continued

incremental improvements in fuel efficiency could be achieved in the road vehicleindustry through additional refinements to the standard petrol and diesel internalcombustion engines. These technologies relate to both improving the efficiency of

the powertrain directly and also to non-propulsion elements. Examples of potentialenhancements to the powertrain include variable valve actuation, direct injection andturbo charging, whilst non-propulsion developments include friction reduction,regenerative braking, low rolling resistance tyres and lightweight materials.

The King Review24

suggested that adopting a selection of the most cost-effectivetechnologies could achieve a 30% fuel efficiency saving for the average new vehiclewithin the next 5-10 years. The cost of these measures depends very much on thescale on which they can be rolled out, but if rolled out on a sufficiently large scale,

23

http://www.dft.gov.uk/pgr/scienceresearch/technology/lctis/24The King Review of low-carbon cars, October 2007

http://www.hm-treasury.gov.uk/d/pbr_csr07_king840.pdf


21/51

17

King estimates that the additional production cost could be around 1,000 to 1,500per vehicle.

The immediate challenge is getting cars with these enhancements into production,as manufacturers will only produce such vehicles if they can be confident it will be

profitable to do so. The King Review identifies the main barriers to these changes asbeing the high fixed costs of introducing the new technologies, coupled with the riskof small economies of scale, if the demand for these new vehicles is weak. The EURegulation on new car CO2 (see page 6) will help provide an incentive formanufacturers to improve their vehicles to comply with targets set.

4.2 Alternative fuels, including biofuels

Notwithstanding the benefits of reducing emissions from petrol and diesel engines,alternative fuels are likely to become increasingly important due to the finiteavailability, and security issues, of fossil fuels.

Biofuels - liquid fuels that are derived from biomass such as plants and organicwaste - offer potential for reducing CO2 emissions relative to fossil fuels becausetheir carbon is absorbed from the atmosphere as the source plants grow, rather thanbeing released from underground storage as is the case with fossil fuels.25

Currently the biofuels most commonly available as transport fuels are bio-diesel andbio-ethanol (first generation biofuels) which can be blended with petrol or diesel andused in a conventional combustion engine, with modifications only required forblends with a high proportion of biofuel (greater than 10%).

The King Review highlights that, in the longer term, biofuels have the potential tomake a significant contribution towards reducing emissions in the transport sector.As referenced earlier, the Gallagher Review reported that biofuels could contribute toa sustainable transport system, but that there is a risk of current policies leading to anet increase in emissions, loss of biodiversity, and contributing to rising prices forsome commodities, notably oilseeds. As a consequence, it recommended that therate at which biofuels are incentivised through the Renewable Transport FuelObligation (RTFO) should be slowed. The recommendation has been accepted bythe UK Government, which is negotiating in Europe to ensuring a sustainable biofuelagenda across the EU.

The Scottish Government also supports the Gallagher recommendation. Thedistribution and storage of bio-gasoline in remoter areas of Scotland may haveparticular implications for compliance with the RTFO that need to be properlyassessed. Work is already underway by the UK Government, in consultation withthe Scottish Government on these issues.

25Source: Smokers et al, (2006); Review and Analysis of the Reduction Potential and Costs of

Technological and other Measures to Reduce CO2 Emissions from Passenger Cars.


22/51

18

Argent Energy (UK) Ltd

Based near Motherwell, Argent Energy is the only major plant in the UK producing

bio-diesel to European standards from animal by-products either tallow from therendering process or used cooking oil from catering establishments. The companycommenced selling bio-diesel in early 2005. In 2008, its production had reached40,000 tonnes. Its customers include Shell, other independent fuel suppliers andStagecoach West, which has converted eight vehicles to operate on bio-fuel. Thecompany was voted Sustainable Bio-diesel Producer 2009 at the World BiofuelMarkets Expo and Conference in Brussels.

The technology behind biofuels is currently being enhanced towards developingsecond generation biofuels which should be able to produce a range of syntheticfuels from a wider range of biomass sources (particularly non-foodstock). Theprocesses involved are more complex and expensive and are, as yet, notcommercially viable.

Anaerobic Digestion (AD) involves the break down of biodegradable material in theabsence of oxygen by microorganisms.26 It is widely used to treat wastewater in theUK. It can be used to treat other organic wastes including biofuel crops. Theprocess of AD provides a source of renewable energy. Waste is broken down toproduce biogas. Biogas can, of course, be used as a vehicle fuel, having beenrefined into biomethane.

A six month study of a street cleaning vehicle fuelled by compressed biomethane(CBM) in Camden has given an indication of its potential. The key findings includedfuel savings per kilometre of 6% and emission savings per kilometre of 56% (takingaccount of CO2 released into the atmosphere during fuel production and distribution)without any adverse reliability issues arising. Implementing CBM in the streetcleansing operations has enabled a continuous cycle to take place: from wastecollection to waste decomposition to biogas production to vehicle fuel and back towaste collection again as the fuel is being used to collect more waste

27.

Clean Air Power Ltd

Clean Air Power Ltd, an active technology developer, has developed a dual fuelsystem which allows heavy trucks to operate on both diesel and natural gas withreported significant cost savings and low carbon emissions. Developments have ledto a project involving a small fleet of trucks using this dual fuel system with bio-methane gas produced from a landfill site.

26http://www.wrap.org.uk/composting/production/anaerobic_digestion.html

27http://www.realwire.com/release_detail.asp?ReleaseID=12585


23/51

19

4.3 Hybrids

Hybrid vehicles combine an internal combustion engine that burns petrol, diesel orbiofuels with an electric battery powertrain.

There are several types of hybrid vehicle currently available, with graduating abilitiesto use the battery to power the vehicle. The most basic type is the stop-start or minihybrid. This has the ability to shut down the engine when the vehicle is stationaryand use the energy in the battery to start the vehicle. A slight advancement on thisis the mild hybrid. This model saves energy and reduces carbon emissions by notonly shutting the engine down when the vehicle is stationary, but uses the energycreated from braking to charge the battery. Collectively, these models aresometimes referred to as micro hybrids. In contrast, a full hybrid vehicle has thecapacity to run purely on the electric battery power for limited distances withoutburning any fossil or biofuels, thereby increasing efficiency and reducing emissions.

In addition to these models, plug-in hybrid electric vehicles (PHEVs) not only use themain engine to recharge, but can also be plugged into a charging station to augmenttheir range. To do this, they have greater battery capacity than other hybrids. Suchvehicles may be an attractive option for consumers due to the extended range andthe fact that the costs of running a vehicle on electricity alone are likely to beconsiderably lower than refuelling with liquid fuels

28.

It has been suggested that mini hybrid vehicles have approximately 6% loweremissions than comparable conventional vehicles, mild hybrids 20% and full hybrids30%29. Although currently only produced on a very small scale, PHEVs mayultimately have the potential to offer even greater CO2 savings.

All of the above types of hybrid vehicles are currently available on the market,though they are still constrained in their commercial viability against standardvehicles. The key constraint is battery capacity, particularly in the full hybridvehicles. In many of these vehicles, the capacity of the pure electric range istypically less than 2km

30.

A further constraint is the additional cost of full hybrid vehicles, which have beenreported to be in the order of 2,0004,000 greater than the equivalentconventional vehicle type31. Similarly, although PHEVs offer a partial solution to thebattery capacity constraint, the additional batteries required for these vehicles(compared with other hybrids) currently add a cost increment of approximately6,500 for a 45km range32.

28N.B.: PHEVs are not limited to burning liquid hydrocarbons, as they may theoretically use hydrogen

in fuel cells.29

Source: E4 Tech report for the DfT, (2007); A Review of the UK Innovation System for Low CarbonRoad Transport Technologies.30

Ibid31Ibid

32Ibid


24/51

20

Alexander Dennis Ltd. (ADL)

Alexander Dennis Ltd. (ADL) produces a wide range of low floor single and doubledeck buses, plus a full portfolio of coaches, welfare and mini vehicles.

Enviro400H is a hybrid drive double deck derived from the Enviro400 diesel version,with significant reductions in fuel consumption and greenhouse gases. Enviro400H'shybrid technology derives from a partnership with BAE Systems. The Enviro400H isa hybrid solution designed specifically for buses; its batteries do not need mainsrecharging during their life cycles.

4.4 Electric Vehicles

Full electric vehicles are a further advancement on the hybrid concept. They onlyincorporate a battery and do not have internal combustion engines. These batteriestend to have larger capacities than the hybrid vehicles and are, therefore, able toundertake longer journeys in purely electric mode.

EVs are currently not available in significant numbers, although the advantage ofthem is that they have zero emissions at point of use. Moreover, if electricity as atransport fuel is produced from low carbon sources such as renewables, it can havelow or even negligible emissions over its life cycle. As electricity is distributed via a

grid in most areas, the underlying components required for a charginginfrastructure for such vehicles are predominantly in place. Partly because of theseadvantages, a number of other countries including Germany, Sweden and Israel, aresetting ambitious targets for the uptake of EVs.

Allied Vehicles Ltd

Allied Vehicles, based in Glasgow, is part of the Allied Vehicles Group. Working inpartnership with Axeon, Allied has developed a range of EVs based on the PeugeotBoxer, Boxer Monarch, Expert and Expert Eurobus models for the light commercial

and passenger vehicle markets.

However, as with the plug in hybrid vehicles, there are barriers to the development offull electric vehicles. Currently, initial purchasing costs are relatively high incomparison to traditional vehicles (although lower fuel costs may help reduce thesedifferences over the vehicle lifetime). They may also require further development ofa comprehensive infrastructure necessary to charge them, whilst the key barrier isthe battery capacity that they are currently able to offer. There is currently a limitedrange of distances that electric vehicles can travel before needing re-charged;present electric vehicles are estimated to have a range of approximately 100-150km.Additionally, the charging process is relatively slow, and recharging a battery may


25/51

21

require an overnight charge. Fast charging technology has the potential to reducecharging times significantly and these are currently being trialled in a number oflocations, such as Japan.

Innovation will be required to overcome some of the barriers associated with high

battery prices and the range of some electric vehicles, for example, to amortise thecost of the battery from the cost of the vehicle. Israel, Denmark and Hawaii havesigned up with Better Place

33, whose business model is based on a network of slow

charge points supported by a number of battery swap stations to help overcomeconsumer anxiety over the range of vehicles. However, it is unclear whether thismodel would be suitable across the UK, especially given concerns over the costs,processes and safety of battery swap technology, and that Better Place is tied to asmall number of specific vehicle manufacturers.

Glasgow Electric Car Pilot

Glasgow is poised to be at the forefront of the UK's electric car revolution. A Scottishconsortium has been offered more than 1.8m under the UK Technology StrategyBoards Ultra Low Carbon Vehicle Demonstrator Programme (ULCVDP) to run apilot electric car scheme in Glasgow over the next three years. The ULCVDP wasfunded by the Department for Transport through the Low Carbon VehicleProcurement Programme.

The trial will involve 40 electric vehicles produced by Allied Vehicles, Glasgow.Dundee-based Axeon Ltd will supply the batteries for the cars. Other consortium

partners are ScottishPower, which will provide charging points and StrathclydeUniversity, which will provide technical assistance. The bid was supported byGlasgow City Council, which is taking several vehicles into their fleet and supportingScottishPower with the charging infrastructure rollout. The total project has a value of3.8m.

Glasgow City Council is also involved in the Department for Transports Low CarbonVehicle Procurement Programme and will be acquiring a number of low-carbon vansfor use in its fleet.

In the longer term, widespread adoption of electric vehicles could significantlyincrease demand for electricity. To illustrate the implications, it is estimated that, if100% of Scottish cars were full electric vehicles, it would require an additional 5TWhof electrical energy per annum (equivalent to approximately 15% of projectedScottish demand by 2020). Furthermore, to deliver the emissions reductions pervehicle kilometre that might be hoped for, this electricity would need to come fromrenewables such as wind and wave.

However, in the case of both EVs and PHEVs, this extra electricity usage may notrequire the construction of additional capacity if vehicles are predominantly chargedduring off-peak hours. This could be facilitated via the implementation of an electric

33http://www.betterplace.com/


26/51

22

pricing system that is linked to levels of demand, for example, a two-tier tariff whereelectricity is cheaper at night than during the day, or flexible smart metering toencourage use of generating capacity at peak production periods, such as fromrenewable sources. Furthermore, vehicles charged during periods of low demandmay also provide a market for surplus electricity that is produced from renewable

sources where production can be intermittent. Despite the factors, it is still likely that,where significant local clustering occurs, some local grid reinforcement may berequired.

4.5 Hydrogen

Like electricity, hydrogen also has potentially attractive properties as a fuel forvehicles. Hydrogen offers reductions in CO2 emissions relative to conventionalpetrol and diesel engines because the only significant emission is water vapour. Ifhydrogen is made from low carbon energy sources, very low lifecycle emissions area possibility, although some ways of producing hydrogen (e.g. using coal-firedelectricity) have significantly higher lifecycle CO2 emissions than petrol or diesel.

Hydrogen powered vehicles are not currently available on the mass market. The keyprototypes are models in which hydrogen is either burnt in an internal combustionengine or by generating electricity in a fuel cell.

There are many challenges to the development of hydrogen vehicles and theprospect of them becoming viable products commercially. Firstly, there continue tobe difficulties in storing hydrogen in an energy dense form, which is required if it is tobe used in road vehicles. Secondly, there are no natural sources of hydrogen,

meaning it has to be specifically produced. At present, the process for doing this isrelatively energy intensive and expensive34. Thirdly, hydrogen cars would require amajor new supply infrastructure to be developed. However, the drivers forintroducing this infrastructure may be subtly different for hydrogen, which is likely tobe first deployed in larger commercial vehicles. Consequently, there may be anexpectation that the freight logistics industry will lead the development of thisinfrastructure, which is very different than the consumer-led growth expected inelectric cars.

Royal Mail

Royal Mail, the UKs postal delivery service, has taken delivery of three hydrogenfuelled postal vehicles, believed to be the only hydrogen fuelled postal vehicles in theworld, outside of North America.

The two Ford transits (internal combustion engine conversions) will soon be on theirway to Stornoway, where they will be fuelled by green hydrogen (see above). Thefuel cell powered microcab vehicle will be used on Birmingham Universitys campusas the mail delivery vehicle and will also be fuelled by a green hydrogen source.

34The King Review, 2007


27/51

23

Royal Mail, CENEX, PostEurop and FuelCellEurope have announced that they areworking together on developing a universal design specification for hydrogen fuel cellpostal vans.

4.6 Uptake of low carbon technologies and fuels

As has been demonstrated, a range of low vehicle technologies could potentiallyassist in reducing CO2 emissions from road transport, assuming these benefits arelocked in. Each option has its own strengths and weaknesses.

Due to major uncertainties around rates of technological development and energyprices, forecasting the future of fuels with any confidence is extremely difficult. Thishighlights the importance of adopting an approach that ensures flexibility remains forthe market to respond to changing circumstances. However, it may be likely that, in

the medium-to long-term, a range of different fuels will be in operationsimultaneously. This is because:

x fully electric, plug-in hybrids, or hydrogen powered cars are still a long way fromachieving significant market penetration;

x biofuels may be unlikely to represent the dominant part of a fuel mix as a result ofland and other constraints;

x different fuels may suit different purposes. For example, the current range andrecharging times of EVs may make them better suited to short city trips, whilst

larger vehicles may be able to accommodate the larger tanks required forgaseous fuels such as hydrogen; and

x the niche availability of energy sources may make some fuels better suited tocertain geographic areas. For example, areas where there is a surplus ofrenewable energy, including wind and hydro, might find that it is more cost-effective to convert this into hydrogen for road transport uses.

4.7 Projections

We do not have specific projections for the uptake rates of different vehicletechnologies in Scotland, but the UK Committee on Climate Change (CCC) hasmodelled potential UK uptake rates

35across a number of scenarios, including:

x A Current Ambition scenario includes identified measures that would cost lessper tonne than the forecast carbon price, and/or which are covered by policiesalready in place. It also includes cautious estimates of emissions reductions fromthese measures.

35N.B.: the CCC consideration of UK uptake rates focuses exclusively on what might be

technologically possible, as opposed to what is actually feasible, particularly under its extended and

stretch ambitions. Also, the CCC scenarios do not fully consider the potential benefits that canaccrue from improvements in conventional vehicle technology, for example, light weigh andhybridisation.


28/51

24

x An Extended Ambition scenario incorporates more ambitious yet reasonable,assumptions on the penetration of energy efficiency improvements and a numberof measures that would cost appreciably more per tonne of carbon abated thanthe predicted carbon price. These are seen as being important stepping stones

on the path to 2050. It is broadly in line with policies that are committed to inprinciple, but a precise definition and implementation of policy is still required.

x A Stretch Ambition scenario adds further feasible abatement opportunities forwhich at the moment no policy commitment is in place, including more radicalnew technology deployment and more significant lifestyle adjustments.

Although there are likely to be differences between uptake rates in Scotland andacross the UK, these potential uptake rates are demonstrated for illustrativepurposes in Table 3 below, whilst Figure 5 over the page demonstrates a potentialhigh level road map for the UKs decarbonisation of road transport.

Table 3: UK uptake rates for different technologies in CCC scenarios in 2020

Referenceprojection

Currentambition

Extendedambition

Stretchambition

Car technology

Petrol or diesel (conventional oradvanced)

99.4% 12.9% 2.9% 2.9%

Stop-start & micro hybrid 0.5% 64.5% 38.1% 38.1%

Hybrids 0.3% 22.6% 38.3% 38.3%

Plug-in hybrids 0.0% 0.0% 8.7% 8.7%

Electric vehicles 0.0% 0.0% 12.1% 12.1%Van technology

Conventional petrol or diesel 100.0% 54.0% 21.4% 14.2%


Hybrids 0.0% 0.0% 0.0% 16.8%

Plug-in hybrids 0.0% 0.0% 0.0% 5.6%

Electric vehicles 0.0% 0.0% 0.0% 16.0%

HGV technology

Conventional petrol or diesel 100.0% 100.0% 34.4% 33.0%


Hybrids 0.0% 0.0% 7.8% 7.8%

Plug-in hybrids 0.0% 0.0% 4.1% 4.1%

Electric vehicles 0.0% 0.0% 0.0% 6.9%Source: CCC, 2008


29/51

25

Figure 5: High level technology roadmap for the UKs decarbonisation of roadtransport

36

Encouraging such market demand and successfully integrating LCVs and alternativefuels into Scotlands transport system will be dependent upon comprehensivecharging and supply infrastructures being in place. Indeed, the development of

charging infrastructure will need to keep pace with the developing market to ensureconsumer confidence in the ability to recharge vehicles with minimal inconvenience.Within this, there will need to be standardisation of recharging systems to maximisecommonality and minimise development of manufacturer specific systems. While thisdocument does not discuss infrastructure requirements in detail, possible roles ofdifferent groups in the provision of this infrastructure are referred to later in thispaper.

Following the pattern of current literature, the discussion above has focusedpredominantly upon tailpipe emissions i.e. emissions at the point of use of avehicle. However, as we move towards alternative fuels in general, with lower CO2emissions over their life cycle, the dominant fuel-related emissions will move frombeing tailpipe emissions to upstream emissions i.e. emissions associated with theoriginal production of energy. For information, Figure 6 below demonstrates someestimates of CO2 efficiency from a range of car technologies under different grid mixscenarios.

36http://www.berr.gov.uk/files/file51017.pdf


30/51

26

Figure 6: Car CO2 emissions per kilometre under different grid mix scenarios

0

20

40

60

80

100

120

140

160

180

Electric

vehicles

Plug-in hybrids Hydrogen

(natural gas)

Hydrogen (from

electricity)

Petrol diesel

mix (50:50)

gCO2/km

Grid mix scenario A Grid mix scenario B Grid mix scenario C

Source: E4 tech, 2007

x Grid mix scenario A: 450gCO2/kWh equivalent to current grid mix

x Grid mix scenario B: 351gCO2/kWh equivalent to a new combined cycle gas

turbine plant

x Grid mix scenario C: 176gCO2/kWh increased renewables and use of CCs

with coal


31/51

27

Questions

1. Which low carbon technologies and fuels do you envisage will be first to beinfluential in reducing GHG emissions from the transport sector? Why?

2. Which low carbon technologies and fuels do you believe will ultimately have thegreatest emissions abatement impact? Why?

3. What timescales do you believe are feasible for the development of specific lowcarbon technologies and fuels? Are there any important intermediate milestoneswithin these timescales?

4. What timescales do you believe are feasible for the uptake of specific low carbon

technologies and fuels? Are there any important intermediate milestones withinthese timescales?

5. Are there other barriers to the development of such fuels and technologies thatare not mentioned in this document? If so, what are they?

6. Are there other barriers to the uptake of such fuels and technologies that are notmentioned in this document? If so, what are they?

7. Are there any negative social impacts associated with either the development oruptake of such technologies/fuels? If so, what are they?

8. What, if any, technical challenges would the grid reinforcement upgrades be likelyto present? How might these be overcome?

9. Who would fund any grid upgrades? And, how might these costs be recovered?

10. Do any of the technologies present any specific challenges or opportunities toisland communities and sparsely populated rural areas in Scotland? If so, howmight these challenges by addressed, and by whom?


32/51

28

5. Economic and business opportunities

Scotlands businesses are the primary driver of sustainable economic growth.However, as part of the Scottish Governments purpose to increase sustainableeconomic growth, it is important for us to work closely with industry to ensure there

exists the best possible environment for competitive businesses, entrepreneurshipand innovation to flourish.

In addition to their environmental benefits, the development of low carbontechnologies and the LCV market in Scotland can stimulate a range of economic andbusiness opportunities both within the transport industry and across related sectorsthrough its potential for innovative activity and job creation.

Innovation and Research & Development (R&D) are key drivers for increasingproductivity and sustainable economic growth, both of which lie at the heart of thedevelopment and uptake of LCVs in Scotland. R&D of low carbon technologies isundertaken across a range of sectors, by organisations including vehiclemanufacturers, battery manufacturers, commercial developers of biofuels andresearch institutes such as universities. There is scope for each of these sectors toexpand from encouraging the development of low carbon technologies and themarket for LCVs. Opportunities may specifically exist in the development of:advance battery technologies; internal combustion engines for hybrid vehicles; lowcost electric motors; control systems; energy storage and recovery systems; andbattery recycling to meet the needs of this developing market.

For the full potential of economic and business opportunities to be realised from such

activity, knowledge transfer between the research community, industry, the publicsector and consumers will be vital for low carbon technologies to become bothpractically and commercially viable. Within this, the R&D at universities will need tobe focused, coordinated and linked to development mechanisms that ensure thatsuch advances are exploited and progressed within the Scottish supply base. Thedevelopment of skills and expertise in low carbon technologies across sectors inScotland could provide the roots for sustainable growth in this area and carry forwardthe long run potential of LCV technology.

Encouraging both demand and supply sides of the LCV market could also generateemployment across the range of sectors involved. This could occur through the

expansion of existing businesses, the creation of new business start-ups and newaffiliations created between industry, research institutions and the public sector.

Taking the potential for innovation, increase of skills and creation of jobs together,these factors have the potential to contribute to Scotlands short and long-termeconomic growth. They could be key factors in creating a comparative advantagefor Scotland in the development of the LCV market, increasing productivity and thuscontributing to sustainable economic growth in Scotland.


33/51

29

Axeon

Axeon is a manufacturer of complete Lithium-ion battery systems for EVs and HybridElectric vehicles (HEVs). To date there are over 100 production Electric Vehicles on

the roads of Europe powered by Axeon Lithium-ion battery systems.

Axeon currently produces batteries in production volume for two of the UK's leadingEV suppliers, Modec and Allied Vehicles.

In addition, they have designed, produced and delivered several prototype Lithium-ion batteries for a very diverse range of EVs and HEVs, including:

x High performance sports car for Ruf GmbH, Germany

x Highway-capable electric scooter, USA

x Materials handling truck, Germany

x City buses, Italy

x HEV heavy plant vehicle, Scandinavia

Its HQ, as well as its engineering and EV battery manufacturing activity, is inDundee.


34/51

30

6. Setting targets

To achieve the economic growth potential of the green transport industry and meetour challenging aim to decarbonise transport by 2050, we need to plan ahead andagree a forward strategy.

In line with the Scottish Governments climate change and energy commitments, webelieve we should identify ambitious targets and milestones to help stimulate andencourage investment in LCVs and alternative fuels, whilst helping to provide thestability required to make the right choices now.

This chapter discusses both the appropriate use of targets and a range of potentialtarget types. The development and significant uptake of LCVs and alternative fuelswill need strong drivers and a number of relevant elements to come together. Apartnership approach by industry and public sector stakeholders is likely to berequired.

When setting targets for LCVs we need to consider a range of factors. Theseinclude:

x levels of ambition;

x timescales and milestones;

x the practicalities and costs of achievement;

x associated legislation and/or infrastructure requirements;

x external threats and opportunities;

x unintended impacts; and

x indicators of success.

We do not want to set arbitrary targets that cannot be met. Nor can we set targetsover which we have no significant influence. This means that ambitious targets forpublic sector vehicles should be our first consideration. In addition, as part of this

consultation we seek your views on whether we should extend targets beyond thepublic sector and what these targets might be. We must also consider the innovationchain, and where interventions might be necessary to overcome barriers to uptake.

6.1 Potential areas for intervention

Most innovations pass along a chain from R&D to commercialisation. For lowcarbon technologies in this chain, there may be less market pull than for othertechnologies because demand for such products is limited (especially if the positiveexternality of reduced emissions is not properly reflected in the price to consumers).

As a result, innovation systems for low carbon technologies have often included ahigher degree of intervention from governments than in other technologies, either in


35/51

31

technology push, or in market pull, or both. This is illustrated in Figure 7 below,which shows the stages of the innovation chain for such technologies.

Figure 7: Stages of the innovation chain for low carbon technologies

A report by E4tech for the DfT37

identified a number of generic barriers to innovationthat currently apply to the low carbon transport technologies. These may be keyareas for intervention, and include the following:

x

Uncertainty as to the likely strength of long-term policy for CO2 reduction in thetransport sector means automotive and fuel companies are uncertain as to thepriority to attach to carbon reduction/fuel efficiency goals relative to otherobjectives.

x Lack of a firm and long-term regulatory requirement for carbon emissionsreductions from all vehicles.

x Lack of an inherent consumer demand for lower carbon vehicles and fuels.

x Increased costs of lower carbon options compared with existing technologies in

most cases.

x Creation of early markets is important for vehicles delivering appropriate levels ofbenefit.

x Uncertainty over environmental and resource-based benefits or leads to policy,consumer and investor uncertainty and the risk of negative public perceptions.

x There is insufficient coordination for R&D in all technology areas considered. TheR&D spending on and direction from vehicle manufacturers, energy companies

37Source: E4 Tech report for the DfT, (2007); A Review of the UK Innovation System for Low Carbon

Road Transport Technologies.

Government

Investors

Business

Academia

ConsumersR&D Pre commercial Supported

commercial

CommercialDemonstration

Product/technology push

Market pull

Investments

Policy interventions


36/51

32

and other industrial players alone, is not sufficient to maintain internationalcompetitiveness of technology developers.

x The low profitability of many automotive sector companies discourages boldinnovation and encourages defensiveness against regulations.

x The large number of diverse and inter-related technologies in the low carbontransport innovation system makes it difficult to coordinate policy support anddrive innovation in this sector.

x Some commercial vehicle buyers may not attach strong enough importance tofuel efficiency to encourage low carbon innovation in all sectors of commercialvehicle industry. However, commercial vehicle CO2 regulation is complex toachieve and the sector has varying capacity to innovate.

The scale of this challenge may be further exacerbated given the impact of thecurrent economic climate on the car manufacturing industry. Such uncertainty in themarket means it is likely to affect all elements of the supply chain, includingsuppressing both the demand and supply side of the car manufacturing market.

Overcoming these barriers requires a measured approach based on stakeholderpartnership, clear targets and financial instruments. The following sections examinethe roles and responsibilities of both the public sector and industry in developing andfacilitating the uptake of LCVs and alternative fuels.

6.2 Role of the public sector

The actions of the public sector have a major impact on society, the economy andthe environment, and in no area is this more obvious than in how we choose tospend public money.

The public sector has two major roles in moving to a LCV fleet. The first is at anational level, the strategic role of Government. The second is the public sector as afleet owner and operator.

6.2.1 Policy role of Scottish Government

The Scottish Government is responsible for setting out the policy on LCV inScotland, in the wider context of reserved and EU policy and legislation. Thisdocument is our first consultation on what targets might be appropriate for Scotland.We recognise that this is just the start of a long process as there are many factorsthat will need to be taken into account.

Future interventions could include, for example, grants and funding packages,development of financial instruments and business models, pilot and demonstrationprojects, consideration of common standards, development of guidance and othertools, information campaigns, supporting skill development, and working withWhitehall and the EU. In undertaking these roles we need to ensure that we achieve

value for money in our investments, and identify and address any unintendedconsequences of our policies.


37/51

33

The Concordat with Local Government

In November 2007 the Scottish Government signed a Concordat with local

government, which committed both to delivering Sustainable Economic Growth forScotland. As part of this all 32 of Scotland's councils, with their Community PlanningPartners, have developed Single Outcome Agreements (SOAs), setting out how theywill help to deliver on the Governments National Outcomes, in a way that reflectslocal circumstances and priorities.

The first round of Council SOAs were signed off by Scottish Ministers on 30 June2008, and Councils will produce the first annual report on progress against these bySeptember 2009. In the meantime, the Partnerships (CPPs) have developed revisedAgreements for 2009-10 and 2010-11, which were agreed by Ministers on 1 June2009.

National Outcome 14 commits all partners to reducing the local and globalenvironmental impact of our consumption and production, and national indicatorsand targets are being developed to support this aim. All 32 CPPs are encouraged toconsider the impacts of transport as part of the development of their SOA.

The Concordat, and associated SOAs, thus define the relationship between theScottish Government and LAs. Any targets for LA fleets need to be set inaccordance with this framework.

6.2.2 Public sector as fleet manager

The public sector has large vehicle fleets. In addition to local government (includingRegional Transport Partnerships), the Scottish public sector fleet managers includeNHS Scotland, SEPA, SNH, Historic Scotland and Scottish Water

As transport is a major contributor to climate change, there is a strong case, botheconomically and environmentally, for the public sector to encourage positive marketpull through decisive intervention in favour of LCV procurement. The public sectorcan take the lead by specifying sustainable products and services which recognise

best lifetime value.

Public sector demand for cleaner vehicles could establish a virtuous circle bystimulating a viable market for such vehicles. The certainty of a minimum level ofdemand for LCVs, and resulting economies of scale in production, should lead overtime to lower production costs. These may push down the price to consumers and,consequently, lead to further increases in demand.

We recognise that most LCVs will initially carry a premium over the cost oftraditional, fossil-fuelled vehicles, as new technologies are developed. However, thiscost threshold could be used through the use of creative business models. Battery

leasing, for example, would reduce the up front cost of the vehicle. LCVs shouldincur lower fuel costs, thereby reducing the differential in lifetime costs between the


38/51

34

LCVs and more traditional vehicles. As discussed in the Chapter 4, costs vary bytype of technology and vehicle type.

6.2.3 Public sector and infrastructure

As discussed earlier, encouraging market demand and successfully integrating LCVsand alternative fuels into Scotlands transport system is dependent upon acomprehensive charging and supply infrastructures being in place. There will be animportant role for the public sector in ensuring that the development of thisinfrastructure is coordinated, and that appropriate safety and technology standardsare met. Additionally, there may be a case for a modest direct intervention in orderto:

x provide additional incentives for LCV use in areas of greatest earlypotential;

x trial a range of different infrastructure provision options, includingunderstanding behavioural impacts when there is a concentration ofcharging points;

x help to broaden the base of potential LCV owners beyond those withexisting re-charging options; and

x provide a signal of government commitment to decarbonisation of roadtransport.

It is likely that the private sector will also have a key role in infrastructure provision asit currently does in the provision of fossil fuels. Indeed, it is possible that earlyadopters of LCVs will incentivise wider private sector roll-out of infrastructure throughtheir behavioural and purchasing decisions i.e. they shop, visit and stay at placeswhich offer LCV re-charging points preferentially. This will create incentives forsupermarkets, shopping centres, car parks, leisure destinations and hotels, amongstothers, to offer them.

6.3 Potential targets for the public sector fleet

There are a number of ways in which we could set objectives and targets for public

sector fleets over different time scales. These could include, for example:

x public sector bodies to purchase best in class vehicles through existingprocurement timetables from 2010;

x public sector bodies to take the lead in trialling new LCVs pre generalproduction;

x public sector fleets to meet their emissions share of the Climate Change(Scotland) Bill interim target by 2020;

x public sector fleets to meet, on average, one of the CCC uptake scenarios(see Table 3); and


39/51

35

x public sector to have X vehicles or Y percentage of fleet in LCV by Z date.

There are costs and benefits associated with these types of commitments andtargets. Costs to the public sector, and thus the tax payer, would initially be higher

with more stringent targets, although lifetime costs could be lower as annual runningcosts of fleets decrease. Again, however, this is dependent on business models andfinancial instruments.

Ambitious targets should result in faster reductions in emissions and may helpstimulate further research and development. Less ambitious targets will result inslower emission reductions, and also the likelihood of less market stimulation andlower upfront public costs. The scale of these upfront costs, whilst still extremelyuncertain, may be significant. For example, for vans, which make up the majority ofthe LA fleet, the cost difference could be as high as 35k per vehicle depending onthe certainty of the technology, the level of demand, the business model used, and

the timeframe vehicles are purchased in.

The difference for a car is around 1-10k, depending on the technology. For HGVsand buses, the costs could be as high as 100k (for hybrid) and several hundredthousand per (hydrogen) vehicle. We will, of course, need to explore the scope forbusiness models with industry to reduce these upfront costs, including both batteryleasing and other financial instruments.

Similarly, we appreciate that there may be classes of vehicles where, due to specificperformance requirements or vehicle lifecycles, it is not practical to aspire tosignificant emission reductions.

Our purpose here is to open discussions and to gather evidence as to the mostappropriate level of ambition for Scotland. This document is not setting the targets.

As a starting point we seek your views on whether it would be appropriate forthe Scottish public sector fleet being comprised of LCVs by 2020.

Detailed questions on this starting point are over the page.

6.4 The Scottish fleet

The above discussion focuses on targets for the public sector fleet. However, thepublic sector, and particularly the Scottish Government, can influence the take up ofLCVs in the general Scottish fleet. Availability and uptake at this scale will, of course,be heavily influenced by UK and EU policy and legislation.

Given this, we are considering setting targets for LCVs for the general Scottish fleet.This fleet includes vehicles owned by businesses and private individuals. Uptakecould be encouraged, for example, through the provision and/or funding ofcharging/fuelling infrastructure, grants for purchase, information campaigns, parkingcost incentives, etc.


40/51

36

As a starting point, we are seeking your views on targets for the uptake of newvehicles based upon the Committee on Climate Changes Stretch Ambitionscenario (see Table 3). This implies a target of 95%38 of all new vehiclespurchased in 2020 to be LCV.

Note, this discussion target differs from the type used as a starting point for thepublic sector, as it concerns new vehicle uptake in 2020, as opposed to allvehiclesin the 2020 fleet. The discussion targets must also be viewed in parallel to thetransport target in the RED (see page 5), which states that 10% of transport fuelmust comprise renewable energy by 2020. It has previously been estimated that,assuming biofuels contribute to half of that 10% target (i.e. a 5% saving in line withthe latest RTFO recommendation for 2013/14), the equivalent of 27% of total cartravel would need to be electric powered in order to meet this directive

39. Clearly, if a

higher percentage was achieved through biofuels, then the electricity componentwould be less.

To give an idea of scale, the achievement of a 95% LCV target for all new vehiclespurchased in 2020 (in combination with complementary assumptions regardingsavings from biofuels and non-powertrain improvements, but excluding any savingsfrom non-technology measures) could lead to a 1.75MtCO2e decrease in Scotland in2020 against projected business as usual road transport emissions. This isequivalent to a 17% emissions reduction in road transport for that year. However, itis equally important to consider a 2020 purchase target as a milestone necessary todrive more significant emission reductions in the medium-to long-term as theturnover in the fleet increases the proportion of such vehicles in the total vehiclestock.

Questions

11. Do you think that having a twin approach for the public sector and other usersis appropriate? If so, why? If not, why not?

12. If so, should targets relate to the uptake of LCVs (either as a percentage of thefleet or an absolute number), or a reduction in total emissions across the fleetsor another format of target? Why?

13. If we follow a target relating to the public sector uptake of LCVs, whatpercentage of the fleet should be LCVs by 2020? Please give reasons for youranswer.

14. If we follow a target relating to the uptake of LCVs across all road users, whatpercentage of all new vehicles should be LCVs by 2020? Please give reasonsfor your answer.

38Assuming the same distribution in the number of new registrations by vehicle type as occurred

between 2005 and 2007 in Scotland39Renewable Energy Framework consultation, October 2008

http://www.scotland.gov.uk/Topics/Business-Industry/Energy/19185/REFCons


41/51

37

15. Are there any vehicle categories that should be excluded from the public sectortarget? If so, what are they and why should they be excluded? If not, why not?

16. As LCVs may have higher upfront costs than traditional vehicles (albeit with asmaller discrepancy between lifecycle costs) do you consider it to be an

efficient use of public resources to devote a greater short-term budget towardsthe purchase of LCVs? If so, why? If not, why not?

17. Are there any opportunities or barriers to public sector procurement of LCVsthat are not mentioned in this document? If so, what are they?

18. What are the individual roles of different groups and organisations in ensuringthe provision of any infrastructure required for LCVs?

6.5 Role of Industry

Industry has vital roles to play in R&D and supplying the market with LCVs. Industrysuccess also creates increased jobs and wealth.

Our understanding from our discussions with stakeholders to date, and from studiesinvestigating transport technology capabilities in Scotland, is that there are twoprimary areas of opportunity:

x LCVs and their associated supply chains; and

x Intelligent transport systems (ITS)

This consultation seeks to explore the potential of a sustainable transport industry40in Scotland, the barriers to its achievement and how these might be overcome.

The automotive production industry, like other sectors, has been affected by theglobal economic downturn. While Scotland does not have a traditional carmanufacturing industry, it does have a relatively strong industrial and academic basein the underpinning technologies to produce LCVs. It follows that our need to reduceemissions should present significant opportunities to build on our known strengths,and to exploit the global markets that are expected to develop over the next few

years. There are expected to be significant growth opportunities over the next fewyears for Scottish companies in, for example, battery and electric motor productionfor electric and hybrid vehicles.

There are already over 100 companies in Scotland developing new technologies andproducts for the sustainable transport market. Companies like Alexander Dennis Ltd,Allied Vehicles, and Allied Sweepers are producing LCVs for applications includingpassenger transport, light goods transport and municipal street cleaning. Scotland isalso home to a growing number of companies that are key to the supply chain of

40Sustainable transport industry in this context means LCVs, their components and associated

infrastructure.


42/51


43/51

39

Questions

19. Are there other supply side/capacity constraints impacting on LCV developmentand uptake? If so, what are they?

20. Are there barriers to the development of an indigenous LCV industry in Scotland?If so, what are they and how might they be overcome?

21. Should Scotlands industry focus on particular vehicle types? If so, what are theyand why? If not, why not?

22. Are there gaps in the supply chain? If so, what are they and how might these beovercome?

23. Do we have the required skills base for the development of this market? If not,where are the gaps?

24. How could the various stakeholders collaborate to stimulate the development anduptake of LCVs?


44/51

40

7. Annex A: Responding to this Consultation Paper

We are inviting written responses to this consultation paper by Friday 2October 2009. Please send your response with the completed RespondentInformation Form in Annex C (see also "Handling your Response" below) to:

[email protected]

or LCV ConsultationSustainable Transport TeamArea 2-D (North)Victoria QuayEdinburghEH6 6QQ

orvisit the on-line form at www.scotland.gov.uk/lcvconsultation

If you have any queries contact Ian Malcolm on 0131 244 4929.

We should be grateful if you would use the consultation questionnaire provided orclearly indicate in your response which questions or parts of the consultation paperyou are responding to as this will aid our analysis of the responses received.

This consultation, and all other Scottish Government consultation exercises, can beviewed online on the consultation web pages of the Scottish Government website at

http://www.scotland.gov.uk/consultations.

The Scottish Government now has an email alert system for consultations(SEconsult: http://www.scotland.gov.uk/consultations/seconsult.aspx ). This systemallows stakeholder individuals and organisations to register and receive a weeklyemail containing details of all new consultations (including web links). SEconsultcomplements, but in no way replaces, SG distribution lists, and is designed to allowstakeholders to keep up to date with all SG consultation activity, and, therefore, bealerted at the earliest opportunity to those of most interest. We would encourageyou to register.

Handling your response

We need to know how you wish your response to be handled and, in particular,whether you are happy for your response to be made public. Please complete andreturn the Respondent Information Form at Annex C as this will ensure that wetreat your response appropriately. If you ask for your response not to be publishedwe will regard it as confidential, and we will treat it accordingly.

All respondents should be aware that the Scottish Government is subject to theprovisions of the Freedom of Information (Scotland) Act 2002 and would, therefore,

have to consider any request made to it under the Act for information relating toresponses made to this consultation exercise.


45/51

41

Next steps in the process

Where respondents have given permission for their response to be made public and,after we have checked that they contain no potentially defamatory material,responses will be made available to the public in the Scottish Government Library by

30 October 2009. You can make arrangements to view responses by contacting theSG Library on 0131 244 4552. Responses can be copied and sent to you, but acharge may be made for this service.

What happens next?

Following the closing date, all responses will be analysed and considered along withany other available evidence to help us reach a decision on Low Carbon Vehicles.

Comments and complaints

If you have any comments about how this consultation exercise has been conducted,please send them to:

Name: Ian Malcolm

Address: Sustainable Transport TeamArea 2-D (North)Victoria QuayEdinburghEH6 6QQ

E-mail: [email protected]


46/51

42

8. Annex B: Questions

Technology Options

1. Which low carbon technologies and fuels do you envisage will be first to be

influential in reducing GHG emissions from the transport sector? Why?

2. Which low carbon technologies and fuels do you believe will ultimately havethe greatest emissions abatement impact? Why?

3. What timescales do you believe are feasible for the development of specificlow carbon technologies and fuels? Are there any important intermediatemilestones within these timescales?

4. What timescales do you believe are the feasible for the uptake of specific lowcarbon technologies and fuels? Are there any important intermediatemilestones within these timescales?

5. Are there other barriers to the development of such fuels and technologiesthat are not mentioned in this document? If so, what are they?

6. Are there other barriers to the uptake of such fuels and technologies that arenot mentioned in this document? If so, what are they?

7. Are there any negative social impacts associated with either the developmentor uptake of such technologies/fuels? If so, what are they?

8. What, if any, technical challenges would the grid reinforcement upgrades belikely to present? How might these be overcome?

9. Who would fund any grid upgrades? And, how might these costs berecovered?

10. Do any of the technologies present any specific challenges or opportunities toisland communities and sparsely populated rural areas in Scotland? If so, howmight these challenges by addressed, and by whom?

Setting Targets

11. Do you think that having a twin approach for the public sector and other usersis appropriate? If so, why? If not, why not?

12. If so, should targets relate to the

Low Carbon Vehichles

Documents

Transcript of Low Carbon Vehichles