PARLIAMENTARY DEBATE
Zero Emission Vans - 29 October 2024 (Commons/Westminster Hall)
Debate Detail
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.
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.
I welcome the consultation over the summer on the first electric vehicle charging infrastructure strategy for Worcestershire. That will set out how my county council and its partners intend to support the transition to electric vehicles. I agree with my hon. Friend that we must do more to encourage small businesses to install charging points that are fit for the future.
We have heard from many colleagues about the vital role that vans play in businesses across the country, and the contribution that electrification would make to meeting net zero targets. I hope that the Minister will be able to give an assessment of the country’s current charging infrastructure and its ability to meet electric fleet and e-van business operations in the future.
Things are not improving, with worrying signs that the industry is stagnating. Since July, new electric van registrations have fallen every month. As the Climate Change Committee outlined last week, urgent action is needed for us to meet our national defined contributions under the Paris agreement. There is no time to delay. Transport is still the largest single emitter of greenhouse gases in the UK, responsible for 26% of the UK’s total emissions in 2021. Decarbonisation of the sector is consequently critical to meeting our targets.
There is no doubt that the Government have inherited a mess. Broken promises and mixed messages from the previous Government discouraged businesses from the investment needed to transition to electric vehicles. Not only did the Conservatives roll back on some of the commitments they made, but they failed to keep the commitments they retained. In March 2022, the Government of the day set out a target for 300,000 public charge points across the UK by 2030. By the end of their term, only 60,000 had been built, way behind the rate of growth needed to meet their target.
However, the new Government cannot simply blame their predecessors. If they are serious about meeting our international commitments, urgent steps must be taken now. Currently, the charging network—particularly rapid charging—is too poor for many businesses to feel confident in investing in electric vehicles. That is exacerbated by the current market, with very few vans—less than 20% of the models available—having a range in excess of 200 miles. Even basic models cost far more than their petrol or diesel equivalents.
Admittedly, the Government cannot dictate to the market, but surely they can take steps to help the situation. Increasing the charging capacity across the network, with an increase in both on-street points and ultrafast chargers at service stations, is vital to increasing business confidence in EVs. Rapid chargers, in particular, are vital for businesses, which cannot afford to waste hours waiting for vehicles to charge.
We also need clarity on what support will be given to businesses converting to electric vans in the future. The Government currently give a plug-in van grant of up to £2,500 for small vans and £5,000 for larger ones, but the subsidy is due to end next year. Will the Minister confirm that the scheme can be extended?
Vans are vital to our economy and employment, with one in 10 people relying on a van for their everyday work. In order to meet our climate commitments, the Government need to put their foot on the accelerator and work with businesses in transitioning to electric vehicles. Urgent steps are needed, and I hope the Minister will confirm that they are finally coming.
I know we can all agree that vans play an integral role in our economy, and if the UK is to decarbonise successfully, vans will need to play a central part. Any measures in service of this welcome transition must offer a pragmatic and reasonable way forward, which the hon. Lady outlined so well. It is key to remember that too speedy a transition to electric vehicles can present challenges that we may not yet be ready to address.
It is probably no surprise that I want to draw attention, first, to the measures taken by the last Conservative Government and the manner in which they did so. They spent over £2 billion to transition the UK to zero emission vehicle use, and as of November 2023, the plug-in van grant alone had supported over 40,000 electric vans and HGVs across the UK. The previous Government also acknowledged the challenges presented by battery warranty requirements and amended battery warranty capacities, which was a welcome move. In 2023, the Department for Transport took the welcome step of announcing that the additional five-hour training requirement for drivers would be removed, and that it would make changes to towing allowances for electric vans weighing up to 4.25 tonnes. Again, the hon. Lady touched on some of the very important issues facing the industry.
I urge today’s Government to continue this work and to listen to the sector. Specifically, I ask the Minister whether the Government intend to retain the changes that I mentioned and whether she will commit to the renewal of the plug-in van grant, which is set to expire at the end of March 2025. It is critical that this Government continue on the route established by the previous Government and that they do not get too tied-up in any longer-term reviews that may hold things up. I know that the Minister is widely experienced in transport from her previous role and that she will be across these important issues.
The industry and drivers would appreciate more certainty about what measures the Government intend to retain and what action they intend to undertake. I hope that the Minister will offer some specificity. I also hope that the Government will commit to engaging with the industry on a range of issues, including MOT testing and drivers’ hours to further understand how the Government can pragmatically remove barriers to aid decarbonisation for fleets.
As the hon. Member for Tamworth rightly mentioned, infrastructure is crucial. As of May 2024, the Government, in collaboration with the industry, supported the installation of over 61,000 publicly available charging devices. That included more than 10,000 rapid-charge points.
The hon. Lady spoke about being able to charge the vehicles, and the infrastructure involved. That is very important, but we also need to be able to generate the electricity if the infrastructure is in place. Does the Minister intend to have a wider conversation with the Energy Secretary about how quickly the building of new turbine-run power stations will be up and running so that we can try to meet the current demand, as well that of the infrastructure that needs to be put in place? To reach 300,000 chargers by 2030, the number of public charge points installed annually must continue to grow by around 30%. Will the Minister confirm whether the Government have plans to maintain that growth year on year?
Finally—but of central importance—given that the Government have confirmed it that they are moving the date for new petrol and diesel vehicles back to 2030, can the Minister provide clarity on the timeline for vans? Changes must be pragmatic. I think the hon. Member for Tamworth will not be aware that I sat on the Bill Committee for the Energy Act 2023 in the last Parliament, and that I made the point then that we need a pragmatic approach that takes the public with us. In that spirit, I ask the Minister to reflect on how that can be achieved, communicated and properly undertaken. I ask her to consider how the concerns about the potential costs that might be put on businesses will be addressed through new employment laws, and whether that is one of the unseen consequentials after the Budget that may stop some of the investment. I am requesting that she looks holistically at all the different aspects relating to where small businesses, in particular, may look to invest in this area.
I hope that the Minister will be able to provide some clarity on the questions I posed, and I again congratulate the hon. Member for Tamworth on a very well thought-out speech.
I will summarise the actions that this Government are taking to address some of the issues that have been raised. The transition to electric vehicles is crucial to achieving the UK’s net zero target by 2050. As well as the environmental benefits, including lower carbon emissions, better air quality and reduced noise, the transition will help us to kick-start the economy and make Britain a clean energy superpower. Transport remains the largest source of greenhouse gas emissions in the UK. The domestic transport sector produced a staggering 28% of the UK’s total emissions in 2022. Road transport is responsible for 89% of those emissions, and vans are responsible for 19% of road transport emissions.
The challenge of eliminating that carbon and shifting to clean, green vehicles is immense, but it is also a huge opportunity for British manufacturers. Zero emission vans will be at the heart of the global economy, and making them in Britain will deliver well-paid green jobs for generations to come. To achieve that, we must ensure that there is certainty for industry and consumers, so that manufacturers have the confidence to invest and build vehicles here in the UK and consumers have the confidence to switch. When I talk about consumers, I mean not just individual drivers, but fleets and operators.
To provide certainty, we have stated our intention to phase out the sale of new cars solely powered by internal combustion engines by 2030, and we will set out further details on reducing emissions from vans in due course. All new cars and vans will need to be zero emission by 2035 and, of course, that is no change from the plan under the previous Government. There is a clear plan to get us from where we are today to where we need to be in a decade’s time.
The zero emission vehicle mandate sets annual targets for vehicle manufacturers for the registration of new zero emission cars and vans. Those targets provide a clear investment signal to vehicle manufacturers and the charge point industry. The hon. Member for Strangford (Jim Shannon), who is no longer in his place, will be aware that the mandate is being extended to also cover Northern Ireland.
The targets for vans rise annually from 10% this year to 70% in 2030, and were determined in close consultation with vehicle manufacturers. The Government recognise that the ZEV mandate targets are particularly challenging for vans. Industry figures for the year to September suggest that zero emission vans account for 6.2% of sales, and I agree with my hon. Friend the Member for Tamworth that they have remained steady at around 5% across 2023 and 2024. Clearly, we have further to go. That is why vans receive additional flexibilities under the ZEV mandate compared with cars.
Van manufacturers in 2024 can defer 90% of the target for this year to later years, meaning they can choose to sell fewer zero emission vans this year in exchange for selling more in future years as demand reaches critical mass, more models are available and prices potentially—hopefully—come down. Manufacturers can also use the carbon dioxide conversion flexibility, which allows them to sell fewer zero emission vans in exchange for reducing average emissions across their new non-zero emission vans, producing ICE vans that are less polluting. Vehicle manufacturers can therefore meet the requirements of the mandate without incurring fines, even if they do not achieve 10% of new van sales this year. However, we want to help industry to reach those targets, which is why the Government provide incentives to support the uptake of zero emission vans and trucks.
The plug-in vehicle grants, which help to reduce the up-front purchase cost of vans and trucks, have supported more than 110,000 vans and heavy goods vehicles across the UK since 2012. Although the plug-in grants are kept under review, and the Government have been clear that they will eventually end, I am constantly looking at the matter to ensure we can achieve our aspirations.
My hon. Friend the Member for Tamworth also mentioned HGVs. The phase-out date for new non-zero emission trucks is 2035 for vehicles up to 26 tonnes and 2040 for those above. The Government remain technology neutral, investing in both hydrogen and battery electrification, which is why we are providing up to £200 million as part of the zero emission HGV and infrastructure demonstrator programme. The programme will build sector confidence in the capabilities of the heaviest HGVs—40 to 44 tonnes—by supporting hundreds of battery electric and hydrogen fuel cell HGVs and kickstarting the deployment of the charging and fuelling sites. I got to ride in a battery electric HGV on a recent visit to Scania—these vehicles are here. They are not in a test phase; they are very real and available for deployment. My driver was very enthusiastic about the experience of driving an electric HGV, which, as anyone who has driven an electric vehicle will know, can accelerate really well, which is important for safety when pulling on and off roads.
We are already acting to make it as easy as possible for operators to make the switch to zero emission vans, and flexibilities are already in place on driver and operator licensing to align regulations for heavier electric vans with their petrol and diesel equivalents; as my hon. Friend the Member for Tamworth said, they look exactly the same. Standard licence holders can already drive alternatively fuelled goods vehicles up to 4.25 tonnes, rather than the usual 3.5 tonnes, provided the driver has completed five hours of additional training.
Alternatively fuelled vehicles up to 4.25 tonnes are also exempt from the need for operator licences, which place additional operational requirements on organisations operating vehicles above 3.5 tonnes. As the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke) said, a previous consultation sought views on the removal of the additional requirements for alternatively fuelled vehicles to access the driving licence flexibility, which included the additional five hours of training, the types of vehicles eligible for the flexibility and the towing allowance. The consultation also sought views on limiting the flexibility to zero emission vehicles only. Responses were mostly in favour of the changes, and the Government are now considering options to make it easier for both drivers and operators to move to zero emission vans. We are continuing the work of the previous Government in that respect, and reviewing options for amending roadworthiness or MOT testing, as well as drivers’ hours, tachograph and speed limiter rules for those heavier zero emission vans. The Government take road safety very seriously, and reducing the number of those killed or seriously injured on our roads is a key priority. Road safety is therefore a primary consideration in assessing any changes to regulatory weight thresholds.
Let me turn to the issues about charging infrastructure. We recognise that van and fleet drivers are likely to rely on public charging infrastructure. Their needs can differ from those of private drivers because of several factors, including shift work, long journeys and the need for flexibility—and, as my hon. Friend the Member for Tamworth said, some of the vans require refrigeration units too. There are already 70,000 publicly available charging devices in the UK, which is a 42% year-on-year increase. The challenge is to continue to deliver at that rate.
For drivers who park near their home, the local electric vehicle infrastructure fund is delivering over £380 million in capital and resource funding to support local authorities to deliver the roll-out of tens of thousands of local charge points. They will support van and fleet drivers without off-street parking, helping them to charge close to home. The local authority of my hon. Friend the Member for Tamworth has been allocated more than £5 million of local electric vehicle infrastructure funding. That will help Staffordshire to work with industry to transform the availability of charging infrastructure for their residents without off-street parking, including those who need to charge a van outside their home.
Cross-pavement solutions also provide a permanent option to safely charge an EV on the street outside a driver’s home. We are looking at how we can support local authorities to help people access these solutions. Eligible van and fleet drivers who wish to install a cross-pavement solution can benefit from the Government’s electric vehicle charge point grant. To pick up on the question from my hon. Friend the Member for Redditch (Chris Bloore) about charging spaces not being appropriately set out for vans, we are continuing to communicate with charging providers about the importance of their being accessible for van drivers. Our work with the British Standards Institute on accessible charging infrastructure will also support larger bays.
Charge point provision along the strategic road network—our motorways and A roads—has significantly improved in recent years. Those charge points are essential to support drivers making long-distance journeys. There are now more than 960 open-access rapid and ultra-rapid charge points at motorway service areas across England and many more on or close to our key A roads.
The quality of charge points is also improving. The Public Charge Point Regulations 2023 were introduced in November last year, and already require all charge points to provide clear and consistent information to enable customers to compare prices easily. Additional requirements from the end of November of this year will enable van drivers and all consumers to get free up-to-date information about charge point availability, access a 24/7 free helpline and expect 99% reliability across each rapid charging network. The contactless payment requirement will simplify payments at many public charge points, including all rapid charge points, eliminating the need for drivers to use multiple apps. The regulations will improve the charging experience for all drivers, particularly commercial drivers, who spend the most time out on the roads.
My hon. Friend the Member for Tamworth asked about the workplace charging scheme grant. That continues to provide support for businesses, charities and public sector organisations to install charge points. Since 2016 it has supported over 55,000 workplaces and offers up to £350—capped at 75%, as she said—towards the purchase and installation of charge point sockets. However, the Government know that in order to give the public confidence in making the switch to electric vans, they need to feel confident in their ability to charge those vehicles, whether at home or depot or on the road. We recognise that more needs to be done and that is why we have committed to accelerating the roll-out of charging infrastructure. We are currently considering the most effective way to do this, and we will have more to say in due course.
We recognise that grid connections continue to be a major obstacle for those wishing to make the switch to electric vehicles. My hon. Friend the Member for Tamworth illustrated the challenge by giving the example of a business in her constituency. We know there is a need for significant reform to the grid connections process, which is why we are working with Ofgem and the network companies to make it easier. Of course, there is also a need to increase electricity generation more broadly.
The Government have a plan to deliver the UK’s transition to zero emission vans by maintaining our ambitious but achievable ZEV mandate targets, reviewing measures to make zero emission vans as accessible as possible, and accelerating the roll-out of charging infrastructure. We will continue to work closely with fleet operators, individual organisations and their trade associations to understand the barriers to their uptake of zero emission vans and identify solutions to help overcome them.
I once again thank my hon. Friend for leading this important debate and I also thank the other hon. Members who contributed.
Question put and agreed to.
Resolved,
That this House has considered transition to zero emission vans.
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