Vehicle Emissions Trading Schemes (Amendment) Order 2024

Lord Hendy of Richmond Hill Excerpts

Tuesday 29th October 2024 Lords Chamber

Moved by

[Lord Hendy of Richmond Hill]

That the draft Order laid before the House on 9 September be approved.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, this Order in Council amends the Vehicle Emissions Trading Schemes Order 2023, which implements the zero-emission vehicle mandate and carbon dioxide emissions targets for new cars and vans with the purpose of facilitating the Northern Ireland Assembly’s decision that Northern Ireland should join the scheme and also makes technical updates. In doing so, the amendment brings Northern Ireland into alignment with the rest of the United Kingdom and represents an important milestone on the pathway for the United Kingdom to achieve 100% zero-emission new cars and vans by 2035 and net zero by 2050.

Domestic transport is the largest contributor of greenhouse gas emissions, accounting for nearly 28% of all emissions in the UK. Analysis of the vehicle emissions trading schemes projects emissions reductions of approximately 411 million tonnes of carbon dioxide equivalents out to 2050, with a further 9 million should Northern Ireland join. This is the single largest carbon-saving measure in government and is of singular importance if we are to meet our climate commitments.

These measures are also critical for kick-starting economic growth not just in Northern Ireland but across the UK by giving businesses the certainty they need to invest in the transition to zero-emission vehicles. Some £6 billion of private investment has already been committed by the charging infrastructure industry, and the Government are working closely with the entire vehicle industry to deliver a green future for one of the UK’s most important manufacturing sectors.

As noble Lords may recall from the debate in your Lordships’ House on the original instrument last year, the ZEV mandate sets headline targets for the registration of zero-emission cars and vans. This includes battery electric or hydrogen-powered cars and vans. It also sets carbon dioxide emissions targets requiring that vehicle manufacturers’ emissions get no worse on average than they were in 2021.

A variety of flexibilities is included in the legislation to ensure that every vehicle manufacturer has a viable pathway to meeting the targets during the first few years. For example, overcompliance against the carbon dioxide targets may be used against the ZEV targets, meaning that manufacturers that deliver carbon dioxide efficiencies can deliver fewer zero-emission vehicles than the headline ZEV target.

When this policy was originally consulted on, a remarkable 96% of respondents preferred UK-wide implementation. However, at the time that this legislation was laid in autumn 2023, it was possible for it to apply in Wales, England and Scotland only. This is because of a specific requirement in the power used to create the original legislation—paragraph 11 of Schedule 3 to the Climate Change Act 2008—which means that the order cannot apply unless the statutory instrument creating the schemes has been laid before and approved by affirmative resolution of the relevant devolved legislatures.

As the Northern Ireland Assembly was not sitting at the time the original order was laid in autumn 2023, it was unable to approve the legislation. Therefore, Northern Ireland could not join the schemes alongside Wales, Scotland and England. As an interim measure, Northern Ireland remained subject to the emissions regulations for new cars and vans that the rest of the UK was leaving behind. These regulations were themselves assimilated from European Union law following the UK’s withdrawal and functioned as average carbon dioxide emissions targets that tighten every five years.

Following the restoration of the Assembly in February 2024, John O’Dowd, the Minister for Infrastructure in the Northern Ireland Executive, wrote to the UK Government, the Scottish Government and the Welsh Government expressing his intention, subject to the approval of the Northern Irish Assembly, that Northern Ireland should join the schemes. This amendment was therefore drafted in close consultation with the devolved Governments. I am pleased to confirm that the Assembly approved this amendment and therefore Northern Ireland joined the schemes on 14 October this year. Senedd Cymru approved the amendment on 22 October, and the Scottish Parliament will be taking a vote in the next few days following the amendment’s successful passage through committee.

This legislation is an excellent example of all the Governments in the United Kingdom coming together to tackle a common challenge. I take this opportunity to thank Ministers and officials in the Department for Infrastructure in Northern Ireland, the Scottish Government and the Welsh Government for the exemplary fashion in which this process has been conducted.

The amendment has two purposes: first, to effect the inclusion of Northern Ireland in the schemes and, secondly, to make technical updates to the legislation. Part 1 of this amendment contains preliminary provisions establishing the territorial scope and that the instrument amends the Vehicle Emissions Trading Schemes Order 2023.

Part 2 contains a series of technical updates to correct minor errors and clarify drafting. The most salient of these are the update in Article 3 that clarifies that hydrogen fuel cell vehicles should be treated as zero-emission vehicles for the purpose of the scheme, the correction in Articles 5 and 7 of an error in the formula for determining the cap on the maximum amount of compliance that may be converted from the carbon dioxide target schemes to the zero-emission vehicles target schemes and the addition in Article 11 of additional measures to address a gap in enforcement provisions.

Part 3 amends the schemes to allow Northern Ireland to join. The changes themselves are relatively minimal as the original legislation was drafted to allow for the possibility of Northern Ireland joining, should the Assembly choose to do so.

Finally, Part 4 makes consequential amendments to assimilated EU law to sunset—“sunset” is a verb, apparently—the emissions regulations that currently apply in Northern Ireland and make consequential amendments to revoke now redundant law, preserve certain parts for legacy administration and amend certain regulations that still have utility. I am sorry about that verb.

I am pleased to say that the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments reported no concerns in respect of this instrument, and I thank members of both committees for their hard work.

It is important to note that the zero-emission vehicle targets and the carbon dioxide targets will be applied as a UK-wide average when Northern Ireland joins from January 2025. This means that Northern Ireland alone will not be required to meet the headline zero-emission vehicle target in 2025, which is 28%. The Northern Irish new car and van market is approximately 50,000 vehicles per year, compared with the UK car and van market of around 2.3 million, so it is approximately 2%. As such, while manufacturers will want to maximise their zero-emission vehicle sales in Northern Ireland, joining the schemes will not force vehicles into the market beyond the naturally growing demand.

While this is a technical amendment in nature, it represents a significant step forward in the journey to net zero for Northern Ireland and the whole of the United Kingdom. I beg to move.

[Baroness Scott of Needham Market (LD)]

My Lords, my noble friend Lady Randerson cannot be in her place this evening, so it has fallen to me to comment on this order. It is, as we have heard, an uncontroversial statutory instrument that very sensibly brings Northern Irish regulation into line. Therefore, from these Benches, we entirely support it.

As a former member of the Joint Committee on Statutory Instruments, it troubles me that a significant part of the instrument is the correction of errors. Although I shall in future refer to all my errors as technical adjustments, there is a serious point about quality control. I will say no more to spare somebody’s blushes, but it is concerning.

I have a couple of questions on the wider point. Sales of electric vehicles are much slower than was anticipated. The industry is saying that this is because of deferring the end of sales of new internal combustion engine vehicles to 2035. Have the current Government given any thought to reverting back to 2030? When can we expect the Government to complete the review of EV charging infrastructure? As the report from the environment committee pointed out, it is a major hindrance to people having confidence to buy EVs.

--- Later in debate ---

[Lord Moylan (Con)]

If I were to take that question, this could be a very long intervention, so perhaps the noble Lord will forgive me if I move more directly to the instrument itself. As the Minister has explained, it essentially does two things: first, it corrects some errors and technical problems that exist in the legislation—the statutory instrument—that was passed last year; it is good to see errors corrected. Secondly, it extends the vehicle emissions trading scheme to Northern Ireland, which, as I understand it, is being done with the support, and at the wish, of the Northern Ireland Assembly. As such, these Benches have no objection to raise to the approval of this instrument.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank all noble Lords for their consideration of this draft Order in Council.

I will respond to the specific points raised. The points about technical adjustments are noted. I beg the forgiveness of the House that some of this stuff about zero-emission vehicles and alternative technologies is very technically complex, and I would forgive technical people for not getting all of it right.

On the general point about 2030 and 2035, the Government are committed to phasing out new cars that rely solely on internal combustion engines by 2030. That means that pure petrol/diesel cars will be phased out and, by 2035, all new cars and vans sold will need to be 100% zero emission. We will be setting out further detail on the requirements for cars and vans sold between 2030 and 2035 in due course. I hope that continued progress on zero-emission vehicles will give people confidence to purchase these vehicles. It is very important that we deal with carbon and achieve consequential good effects on air quality.

My noble friend Lord Berkeley asked: does it matter? He gave his own answer by saying that the sooner the UK was consistent across its nations, the better. This statutory instrument is the means of doing so—so that is really the answer to that. Apart from debating the doubtful use of verbs on the London Underground— I could find several others worse than “non-stopping”; “to platform” is quite bad as well—it is nice to hear that there is no objection. It is nice that there is a considerable degree of agreement, because this rights something that clearly could not be righted at the time.

There is now consensus across the UK that the zero-emission vehicle mandate is the right tool to move our car and van market towards being fully zero-emission in 2035. The UK Government, Scottish Government, Welsh Government and Northern Ireland Executive are in agreement that net zero is a priority for our economies and for our future. This consistency of approach is to the benefit of business, with barriers removed to accessing the Northern Ireland market, and to Northern Irish consumers, who will reap the rewards of zero-emission vehicles, including lower costs of ownership, cleaner air and reduced noise pollution, as the UK continues on its path to being a clean energy superpower.

Motion agreed.