Rupert Furness

Clean, low carbon transport: the
UK Government perspective
Rupert Furness
Department for Transport
Oil and Transport seminar, July 2005

Introduction
• Transport central to UK
economic success and
personal freedom, but a
major contributor to climate
change and air pollution.
• The challenge, as set out in
the July 2004 Transport
White Paper, is “to balance
the increasing demand for
travel against our goal of
protecting the environment”.

Why does it matter?
• Reducing impact on climate
change. Transport currently
accounts for 25% or so of total UK
CO2 emissions - road transport
alone about 20%. Emissions of
CO2 from transport sector rising –
by 10% from 1990-2000, and likely
to rise by another 10% or so
between 2000 and 2010.

Why does it matter?
• Reducing impact of transport
on air pollution. Road
transport responsible for
majority of air pollution
problems in UK city centres.
• And other environmental and
social impacts of road
transport

Clean, low carbon transport
• Government aims to promote a shift towards clean, low
carbon road transport:
> Clean - ie low emissions of harmful air pollutants
> Low carbon - ie using as little fuel as possible

How do we get there?
• Improving the environmental performance of vehicles –
and getting people to buy them!
• Promoting the use of clean, low carbon fuels
• Other policies also critically important – reducing need
to travel, encouraging people to use alternatives to the
car etc – but outside scope of today’s talk.

Key Government policies - 1
• Supportive vehicle tax regimes - eg, the UK’s CO 2 -
linked Vehicle Excise Duty…
Figure 1: Graduated Vehicle Excise Duty Classification for Petrol Cars*
18 0
170
16 0
150
14 0
13 0
12 0
110
10 0
90
80
70
60
50
40
30
20
10
0
A
Upto 100
B
10 1 to 120
C
121-150
D
151-165
E
166-185
F
Over 185
70
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
CO2 g/km
*For Diesel fuelled cars, add £10 t o t ax in Band A t o E, and £5 t o Band F.
For Alternat ively f uelled cars, minus £10 f rom t ax in Band B t o E, and £5 f rom Band F.

Figure 2: Company Car Tax by CO2 emissions for Petrol Cars*
40
35
% of Car price taxed
30
25
20
15
10
100
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
270
280
290
300
*Add 3% if car runs solely
on diesel to a maximum
of 35%
CO2 g/km
Company Car tax 2002/03 Company Car tax 2003/04
Company Car Tax 2004/05 Company Car Tax 2005/6
• … and Company Car Tax regimes

Key Government policies - 2
• Supportive fuel tax regimes - eg, the UK’s reduced
rates for alternative fuels including LPG, CNG,
biofuels. Rationale set out in Alternative Fuels
Framework, published in 2003 pre-Budget Report
• Research, development and demonstration
programmes
• Setting targets to guide long term policy direction…

• ..including the target in 2002
Powering Future Vehicles
Strategy that by 2012, 10% of
all new cars sold will have
CO2 emissions of less than
100 g/km

• …and our target that by the
end of 2005 0.3% of total
road transport fuel sales will
be from biofuels. Intending to
set a 2010 target shortly.

Key Government policies - 3
• Consumer information – new
car A-G labelling
• Grants to support take-up of
new low-carbon vehicles
• Government procurement of
clean, low carbon vehicles
and fuels

Environmental performance of
vehicles - 1
• Good progress made on emissions of air pollutants from
road transport.
• Total emissions of NOx and PM 10 from road transport have
fallen by more than 50% since 1990 despite traffic growth.
Likely to reduce by a further 20% or so by 2010.
• Further, tighter Euro standards will deliver further
reductions, especially for diesel vehicles.
• But still likely to be air pollution “hotspots”.

Environmental performance of
vehicles - 2
• Some progress made on average new car CO2
emissions - largely as a result of the Voluntary
Agreements between the EU and automotive industry.
• Average new car fuel efficiency has improved by about
10% since 1995, delivering significant carbon savings.
• Progress has slowed somewhat in recent years as a
result of people’s tendency to choose larger vehicles.

Average new car CO2 emissions, EU
and UK, 1995 - 2002
New Car Average CO 2
g/km
195
190
185
180
175
170
165
160
155
150
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
UK
EU

Promoting use of clean, low carbon
fuels
• Huge improvements to petrol
and diesel specifications –
low sulphur forms have been
mainstream fuels in UK for
several years, ahead of EU
deadline.
• Government has also
supported clean, “alternative”
fuels, as set out in
“alternative fuels framework”
in 2003 Pre-Budget Report

Biofuels
• UK positive about biofuels as
a way of delivering carbon
savings from road transport,
with other benefits too.
• Currently well on track to
meet biofuels sales target of
0.3% of total fuel sales by
end of 2005.

Today’s biofuels (cont)
• Main support to date through
fuel duty incentives (c.30
eurocents per litre).
• Currently investigating
feasibility of an Obligation to
require fuel suppliers to sell a
certain percentage of biofuels
and/or other renewable
transport fuels.

Challenges
• Further reducing emissions of air pollutants through:
› further fuel and vehicle standards
› targeted local measures - including congestion charging,
low emission zones, use of low or zero emission vehicles
• And, arguably the far greater challenge, reducing
emissions of carbon dioxide from road transport

Challenges (cont)
• Reviews of UK Climate Change Programme and UK Air
Quality Strategy underway.
• Both are considering the scope for further policy measures
to reduce emissions from all sectors, including the transport
sector.
• No easy solutions!

In the longer term
• To reduce total CO2
emissions from transport to
very low levels, will need to
move to low carbon fuels.
• Advanced biofuels and
renewably produced
hydrogen look the most
promising options.
• But real uncertainties over
cost and technologies.

Road pricing
• Alistair Darling has announced that the Government is
looking further at possibility of moving (in the longer term)
to a national road pricing system.
• The impact on carbon and other emissions would depend
fundamentally on what type of scheme were to be adopted.
In his speech, he made clear that:
“For any road pricing scheme developed, we would ensure
that incentives for cleaner vehicles are safeguarded in
order to contribute to meeting our environmental targets”.

Conclusions
• Have made progress in reducing impact of transport on the
environment, but lots more to do.
• Main challenge in future likely to be reducing transport’s
impact on climate change - both by improving vehicle
efficiency and by reducing the amount of carbon in the fuel.
• New measures may be included in revised Climate Change
Programme and Air Quality Strategy later this year.