Since 1990, the United Kingdom’s emissions of greenhouse gases have fallen by 43%. This is a real achievement, one accomplished by a long, hard process of establishing policies to bring down the cost of new technologies so that cleaner solutions can be taken up at scale. Up until now, these policy solutions have focused on electricity generation; as a result, 75% of the UK’s emissions reductions since 2012 have come from the power sector...
In stark contrast, Department for Business, Energy and Industrial Strategy (BEIS) emissions data shows that in 2016 transport was the most emitting sector in the UK, responsible for 27% of the UK’s greenhouse gas emissions. The Committee on Climate Change (CCC) has noted that emissions from the transport sector have been at a standstill since 1990, as well as being a significant source of air pollution in cities. Despite these startling statistics, there has been an unfortunate passivity in attempts to reduce emissions from transport, which was continued with the publication of the UK Department of Transport Road to Zero strategy. In other words, our Government is still asleep at the wheel when it comes to driving mass uptake of cleaner vehicles.
Vague in the long-term, inactive in the short-term
Market share of electric vehicles in the UK, Norway, the Netherlands and California between 2013 and 2017 (Source: Car retailer data: SMMT, OFVAS, RVO, CNCDA)
When the UK Government released its ‘Road to Zero’ Strategy, back in July 2018, something was immediately and abundantly clear – while the Strategy contained a desire to reduce emissions from vehicles to meet long-term greenhouse gas reduction goals, and ensure that the UK is “at the forefront of the design and manufacturing of zero emission vehicles”, it does little in the way of presenting a focused and effective set of policies to achieve those goals.
The Road to Zero’s chief failing is that it is a document full of aims and ambitions, but little concrete action to achieve those goals. For example, the Department for Transport declares “we want to see at least 50%, and as many as 70%, of new car sales” being so-called Ultra Low Emission Vehicles (ULEVs) in 2030, while their 2040 and 2050 goals to transition completely to zero-emission vehicles are full of qualifiers like “effectively” and “almost” zero-emission. Even the intended 2040 phase-out of conventional vehicles is watered down, as it now retains sales of conventional hybrid vehicles, which still rely on burning fossil fuels for power.
Financial policies around EVs seem to be going backwards, too. The plug-in grant is currently being slashed by £1000 for new battery electric vehicles (from £4500 to £3500), and entirely removed for most plug-in hybrids, and company car tax is due to rise to 16% on electric vehicles in 2019/20 (despite protests from industry and MPs). If we want to see how this may impact the still-young electric vehicle (EV) market, a recent analogue is the trajectory of sales of electric vehicles in the Netherlands from 2015, following the reduction of a tax break for company car drivers of EVs. Sales of plug-in hybrids dropped dramatically, and the percentage of new vehicles sold that were EVs fell from 10% in 2015 to 2.6% in 2017.
Now, the same critique of the Government’s strategy is coming from a committee of MPs.
Government policies under fire
In October, the Business, Energy and Industrial Strategy (BEIS) Committee published a report calling the Road to Zero ‘vague and unambitious’, and accusing the Department for Transport of ‘willing the ends’ without providing the means.
Instead, the BEIS Committee report calls for the phase-out of sales of new petrol and diesel cars to be brought forward to 2032, eight years before the government’s planned 2040 phase-out. This would bring the UK in line with Scottish targets, though it remains later than the phase-outs of France, the Netherlands, Israel, Ireland and India (2030), as well as Norway’s proposed 2025 sales ban. The report also asks that the government maintain the plug-in grant at its current levels, and change company car tax and vehicle excise duty to properly incentivise purchases of EVs.
This declaration from Parliamentarians follows an earlier October letter from the Committee on Climate Change, the independent body set up to assess the Government’s progress and trajectory against our climate goals, asking for stronger policies on EVs from the Government.
The chief recommendations from the CCC were that the phase-out of conventional petrol and diesel vehicles be brought forward to 2035, with minimum electric ranges to make hybrids truly sustainable, and stronger action be taken to address supply issues to ensure that manufacturers are sufficiently investing in EV production. Like the BEIS Committee report, the CCC recommended ensuring financial viability of EVs by maintaining the plug-in grant and tweaking the vehicle excise duty and the company car tax.
The Government’s policies for reducing emissions from road transport are being critiqued from many angles. There are concerns that the Government is not using all the levers available to ensure uptake of EVs, and a sense that the market trajectory in the near or mid-term is absent, with only the shadow of a phase-out in the distant 2040, 22 years from now.
In our next blog post, we will explain what we see as the most pressing policy challenges for the government, and explain a key policy approach we think is missing from the mix.