Zero Emission Vans

Jim Shannon Excerpts

Tuesday 29th October 2024 Westminster Hall

[Sarah Edwards (Tamworth) (Lab)]

I beg to move,

That this House has considered the transition to zero emission vans.

It is an honour to serve under your chairmanship, Mr Efford. Vans are the workhorses of the UK economy, with one in 10 workers, across a range of industries, relying on a van for their job. From engineering to construction, and from food delivery to emergency and rescue services, many of these industries are part of the backbone of our economy, and we must support them as we make the journey to net zero.

Currently, emissions from vans are increasing year on year, which contributes to the detrimental impacts of climate change across the UK and globally. In my constituency of Tamworth, residents have been hit by flooding for centuries, but it is in recent decades that extreme flooding events are becoming more common, and the flooding season is now lasting three months instead of one, putting a huge strain on our rural economy’s farmers and on our food security. Those floods, which have left people in our rural villages isolated and trapped, have been a key issue, blocking routes for vans and HGVs, with fleets forced to do 15-mile diversions to get back on track. The devastating effect of climate change is impacting both residents and businesses, and we must take every step we can to reduce emissions.

We must do that by using zero emission vehicles. Since 1990, emissions across the UK fleet have risen by 63% via the increased use of diesel vans. In our bid to reach net zero, we must explore the challenges within this sector and address the limitations on infrastructure, including the hurdles and higher costs. We must move some of our most polluting vehicles off our roads and move towards cleaner, more environmentally friendly vans. We cannot do that unless there is a step change in the approach to investment and infrastructure, and we must ensure that we do not leave small and medium-sized enterprises behind in the process. In this debate, I shall argue that the 4.25 tonne e-vans should face the same rules and regulations as the 3.5 tonne diesel vans, and that more should be done to deal with the ad hoc installation of the electric infrastructure needed to lay the foundations for our transition towards a net zero economy.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Member for Tamworth (Sarah Edwards) on introducing this issue. I spoke to her before the debate, and I understand that she is bringing forward something that we all need to endorse, right across this great United Kingdom of Great Britain and Northern Ireland. We should encourage local councils to deal with the vans that they have, and ensure that they move towards electric fleets. Does the hon. Lady agree that the Government and the Minister might need to be involved in some way to ensure that there are incentives to make that happen, whether through low finance deals or grants? If we can get the councils to do it, that makes it easier for the rest of us to follow.

[Sarah Edwards]

Absolutely. It is incredibly important that we involve councils, because they can help and go a long way in ensuring that that infrastructure is there, and they can actually fund some of the changes. I think that is a well-made point, so I thank the hon. Member for his contribution.

While the move to zero emission vans is vital, it does not come without challenges. Currently, the target for zero emission vans is about 70% by 2030, and operators need support with that. Small and medium-sized enterprises are already struggling with the weight of increasing energy costs. In order to support them through this transition, there must be targeted incentives and a roll-out of suitable infrastructure, but there is no protection for businesses from energy costs.

Businesses in my constituency and across the country have seen their bills increase fourfold, with many going under as a result. Their energy rates are linked to credit ratings, and new businesses often do not get the best rate until year three and onwards. Without those bills receiving the scrutiny that residential bills have had during the energy crisis, many business owners simply do not have the capital available to invest in greener solutions. If and when they do, they find that it is not just the cost but the time for the grid upgrade to take place, and in some cases businesses have been told that they cannot draw the power that is needed.

On my recent visit to Brakes in my constituency—the UK’s leading wholesaler, responsible for 70% of the food delivery to businesses and organisations, including hospitals and care homes, which operates 365 days a year on a just-in-time operation—it cited progress on installing chargers for its 7.5 tonne refrigerated vehicles, but it wanted to go far further in its bid to go green. Battery technology at present is not able to provide enough power for both refrigeration and long distance, limiting the types of vans and trucks that can be used by the industry. The company is unable to install additional green infrastructure due to the roof being unsuitable for solar installation, and would struggle at present to draw the power needed from the grid for its ambitions. The grid upgrade simply is not possible, so that business ambition is being stifled by the lack of infrastructure that it can tap into.

The challenges of infrastructure regulation, affordability and availability of suitable projects is holding back businesses in their move towards e-vans, which in turn slows down the laudable goal to reach net zero. A giant leap is therefore needed to move the market from the 5.9% of e-van sales that we saw last year for the UK to meet its emissions targets.

The average e-van costs around 50% more than a diesel option, which is a huge financial burden for a small or medium-sized enterprise that is keen to move towards greener ways of working, but is struggling to bear the upfront costs of the new vans and the uncertain energy costs. Diesel options are outperforming the e-vans currently on the market. From range to charging speed, operators are paying more for less. Although running costs can be lower, these are being undermined by the huge costs of charging at public charging stations.

My constituent, David Furnell from Evolution, explained that the installation of EV chargers often requires upgrades to power supplies, which can be costly and take months and in some cases years to complete, to bring a power supply up to the standard ready for installation for EV charging. There are limited incentives for small businesses to install this type of infrastructure, with larger private companies often bridging the gap and getting energy supplies up to the standard needed.

At present, schools are receiving a higher incentive for the installation of charging infrastructure, whereas commercial premises are receiving a much smaller incentive through the workplace charging scheme. Schools can get 75% off the cost of a buy-and-install charge point up to a maximum of £2,500 per socket. In contrast, the EV infrastructure grant for small and medium-sized enterprises gives them money off the cost of wider building and installation work, which is needed to install multiple charge points. The grant covers 75% of the cost of the work, up to £15,000, and they can get £350 per charge point socket installed and up to £500 per parking space enabled with supporting infrastructure. Although that grant is a good step, it is not considered large enough to incentivise SMEs to accept the risk and financial burden of installation and transition to net zero.

If we are to move towards the widespread use of zero emission vans, we must ensure that infrastructure such as charging facilities is available and affordable and, crucially, in the right places. The burden of cost for both the installation of EV chargers and the upgrade to power for e-vans falls at the feet of small and medium-sized enterprises, which is no way to drive our journey to net zero and grow our economy. We need a spatial strategy to assist with this, and one which does not rely upon solely the private sector and those who may have the capital to invest.

In the 2023 Logistics UK van report, a third of respondents cited power supply infrastructure as one of the biggest challenges for fleet electrification. A large percentage of van users do not have access to a home driveway to charge, and often public charging bays are not physically designed for vans. There are also nitty-gritty challenges, such as a lack of standardisation of payment methods and the inability to pre-book specialised bays. As a result, there is uncertainty for businesses regarding their ability to keep their vans on the road and moving. Many businesses, particularly our SMEs, need the highest levels of confidence that their vans will be on the road and earning throughout the day.

Many businesses, particularly our SMEs, need the highest levels of confidence that their vans will be on the road and earning throughout the day. For those fortunate enough to access private charging options, the cost of grid connection upgrades, the complexities of landlord sign-off and planning approval processes can cause issues. Both access to power and its cost are key challenges in this debate and can be difficult obstacles to overcome.

Those challenges are not limited to the transition for zero emission vans. The logistics industry is essential to our economy, and many companies operate fleets with vehicles of varying sizes, providing different coverage for different parts of the business operation. The heavy goods sector currently accounts for just under 20% of UK transport CO₂ emissions, yet only 0.8% of heavy goods vehicle fleets are zero emission. For HGV fleets, there are limited options for the heaviest vehicles, and those that are available are expensive. The Road Haulage Association anticipates that the overall cost of decarbonisation for HGVs will likely exceed £100 billion. Electric trucks are at least three times the price of an equivalent diesel. The RHA also estimates that up to £2 billion of investment in energy infrastructure is needed to power zero emission vehicles. Since 2014, the logistics sector has invested an additional £2.2 billion in new HGV fleets to reduce their nitrogen oxide pollution. It seeks to replicate that for CO₂ emissions, but there is a lot of work to do when the target for phasing out new diesel HGVs below six tonnes is 2035 and the target for all HGVs is 2040.

Regulation is also a big challenge in this transition, particularly regarding the weight of vehicles. A battery is heavier than fuel, and for e-vans to be able to perform like diesel vans they will be heavier. E-vans, weighing 4.25 tonnes, also face HGV MOTs, because their weight tips them into the next category of commercial vehicle, and this regulation places significant burden and additional expense on operators, impacting their downtime. It also means that there is less choice and flexibility, as fewer testers are qualified to do an MOT on an HGV. Logistics companies argue that 4.25 tonne e-vans should face the same rules and regulations as 3.5 tonne diesel vans. They are delivering the same amount of goods, but their battery puts them outside current legislative parameters. The vehicles are now classed as HGVs, meaning that they must be driven in a fleet with an operator licence and those driving them must have HGV qualifications, which cost money and time in training and must be kept up to date. No one wishes these safety requirements to be removed for HGVs, but the technical point of the weight difference between the e-van and the standard diesel van should be reconsidered as a large financial barrier to what looks externally to be an identical vehicle. It is important that these issues are considered by hon. Members and noted as a policy that has limited the transition to zero emission vans.

Various countries are successfully leading the way in the transition to electric vehicles. The Netherlands’ e-van share is more than double that of the UK. Its clear policy framework for urban logistics has introduced a number of zero emission logistic zones, starting from January 2025, and as a result the wider policies supporting its transition are leading the way among European countries for electric van uptake. We see a similar use of policy in the US, which is supporting the transition to electric vehicles under the EV acceleration challenge. Since 2021, electric vehicle sales have tripled in the US, and the number of publicly available charging ports has grown by more than 40%. The US’s Inflation Reduction Act 2022 has added and expanded tax credits for purchases of new and electric vehicles by taxpayers, and provides a $7,500 tax credit for every new green vehicle weighing up to 14,000 lbs, which equates to approximately 6.3 metric tonnes. Above that weight, it is $40,000 per vehicle. The UK could consider whether, in order to get growth, we need additional support for businesses that assist the Government in their ambition for a greener economy that promotes growth throughout the UK. If we are to transition successfully to zero emission vans, we must consider the blueprints in other countries and their successes and failures as the UK plans for growth.

Although we can incentivise businesses to move towards the use of zero emission vans, we must ensure that sufficient infrastructure, legislation and policy are in place to support that. The challenges around charging facilities, cost and infrastructure are large but not insurmountable, especially when the earlier we invest, the earlier the payback begins. The new partnership between this Government and businesses could help to transform the van sector, tackling a huge environmental impact and growing our economy. I thank hon. Members for their contributions to this debate and the Chamber for its consideration of this important topic.