Introduction - Fleet’s vital role
Thank you Quentin.
And thank you ladies and gentlemen.
It’s a very great pleasure to be here today - and to be part of a conference that reflects the crucial role that the fleet industry plays in reducing carbon emissions from road transport.
By some considerable distance, you represent the largest market for green vehicles in this country.
Without the purchasing power of fleets, how could diesel car sales have grown so dramatically since the 1980s? How could hybrids have become a common sight on our roads today? And without fleets, how could we hope to establish sustained commercial demand for low carbon vehicles in the future?
So fleets matter. But it’s not just the size of your collective chequebook that gives you such enormous influence.
It is also your pioneering reputation for adopting new green practices to reduce fuel consumption; for trialling cutting edge vehicle technologies on the road; and for helping to jump-start a wide range of green fleet management schemes.
While much of the debate on tackling climate change focuses on long-term solutions, fleets are helping to make an active, practical and deliverable contribution today.
So I am particularly grateful to Fleet News and the Energy Saving Trust for asking me to speak about the coalition government’s plans for a greener road transport sector.
Greener economy - greener cars
In fact, the 2 biggest priorities of the coalition government are sorting out Britain’s financial problems, and developing a greener, low carbon economy.
We believe these priorities are complementary, not contradictory
Cutting our spending doesn’t have to be incompatible with a low carbon agenda. Some low carbon choices already offer outstanding value for money - as the fleet industry knows - so our future goal is a market for green vehicles that makes economic as well as environmental sense.
Just as cars and vans are key today, so they will be key in the low carbon economy tomorrow.
Fleets understand that no other form of transport offers the flexibility, the cost-effectiveness, and the ability to carry people and goods between 2 specific locations.
The enemy is not the car, but the carbon.
That’s why a key part of any strategy to reduce transport’s emissions is making sure that the cars we drive are as clean and fuel-efficient as possible.
In the short term, the majority of CO₂ savings from road transport will come from improvements to conventional technologies, driven mostly by EU regulations on fuel efficiency.
So we will continue to work with manufacturers - and with the European Union - to squeeze more fuel efficiency out of petrol and diesel cars and vans today.
Alongside more efficient vehicles, we also need to keep developing greener fuels - and there is no doubt that biofuels have an important part to play in the overall mix of measures to decarbonise transport.
They remain a complex and controversial area though. And it is clear to me that, while there are many good biofuels, such as used cooking oil, there are also many biofuels which deliver no environmental benefits whatsoever, particularly when indirect impacts are taken into account.
I have discussed these issues with stakeholders who have impressed on me their strong views - both about the benefits and also about other wider implications of biofuels use, such as concerns over indirect land use change.
Given this, I believe that it is right that the government should take some additional time to review this subject carefully, to ensure that policy decisions going forward are robust and stable, and so we can provide a clear long-term direction for biofuels.
Low carbon vehicles
Biofuels represent an important but limited evolution in the greening of the passenger car and the van.
But we are also preparing for a much more revolutionary change…
After more than a century in which the internal combustion engine dominated, the ultra-low carbon vehicle era is beginning…
Order books for the first new generation, all-electric vehicle - the Nissan Leaf - have opened in the UK and the first vehicles will be on our roads early next year, imported from Japan. But with government support, it will not be long before they will be rolling off production lines in Sunderland. And others will follow.
Of course the take-up of ultra-low carbon cars will be slow at first. But we hope that fleets will play an integral role in establishing a market for these pioneering technologies, supported by measures such as enhanced capital allowances, low benefit in kind taxation, and vehicle excise duty.
Indeed, some fleets are already helping to do exactly that. The Royal Mail, for example, is trialing electric vans, and Sky is seeing what the Plug-in Toyota Prius is like to live with. Within my own department, the Government Car and Dispatch Agency is also testing 5 plug-in Toyotas and a Smith electric van.
But to further support the development of the market for low carbon vehicles, we need to ensure that the right infrastructure, specialist supplier base, and customer incentives are in place.
And that’s exactly what we are doing.
We have confirmed our support for a range of R&D programmes across the green vehicle sector.
Through the Technology Strategy Board’s Low Carbon Vehicles Innovation Platform, we are working with key partners to deliver a strategic vision for automotive R&D.
We recently announced that a further £24 million is being awarded to 6 winning consortia of the competition - making a total of £52 million with contributions from business - all of which will make a significant contribution to greener vehicle development in this country.
They include hybrid technologies; composite materials; and engines that recover waste heat energy; and the vehicles that will benefit include plug in hybrids for Nissan, Lotus and Jaguar/Land Rover, extended range electric cars, and a lightweight hybrid refuse collection vehicle.
And through the Plug in Car Grant, we have announced consumer incentives for every ultra low emission car sold. From January next year buyers will receive a grant of 25% of the price of a green car, up to £5,000. And this will of course also apply to fleet buyers.
Through these initiatives, we want to encourage motorists and fleets to embrace cleaner and greener vehicles. By encouraging demand, we will stimulate investment in mass production which, in turn, will bring down costs and further boost demand.
And we are also committed to rolling out an effective infrastructure for electric vehicles - hence the inclusion in the coalition agreement of a commitment to mandate a national recharging network.
Our Plugged in Places programme is helping us do just that. The scheme will provide valuable data about how and where people recharge their cars, so that we can get the design of the national network right.
To date, £8.8 million has been awarded to London, Milton Keynes and the North East through the programme. We plan to hold a second round of bidding in the autumn, and will announce the funding available for this second round following this month’s spending review.
Finally, all this investment would be of limited environmental value if our power sources were unsustainable.
That’s why our recharging network will draw fuel from an electricity grid that Chris Huhne is determined to make one of the greenest in Europe.
Reducing fuel consumption
Technology and cleaner fuels are important in reducing emissions, but they are not enough on their own. We also need to think about the choices we make, as individuals and businesses, about when, where and how we travel, and how we carry goods around the country.
These choices don’t need to involve big changes to our lifestyle, or to the way businesses operate. Simple adjustments to driving technique can have a big impact on fuel efficiency - and hence profitability.
I know many fleets are already making significant reductions in their fuel bills by training drivers to drive more efficiently. This training can be delivered quickly and conveniently - as I found recently when I took a smarter driving course with the Energy Saving Trust.
In less than an hour, the Energy Saving Trust can teach even the most experienced drivers how to make simple improvements to their driving style, and I am convinced it can help reduce most drivers’ fuel consumption by around 15%.
We want fleets of every type and size to consider eco-driving courses to keep fuel bills and carbon emissions down. In fact later today my ministerial colleague Mike Penning will be announcing how we are going to work with the road freight industry to promote more eco-driving.
I am also grateful to those fleets that are helping to support car clubs, and car sharing schemes that can not only reduce commuting bills, but also prevent the office car park filling up every day.
And for short trips, nothing is more carbon efficient than a bicycle.
I want more companies to offer bikes for local journeys - to help reduce fuel bills, cut carbon, and improve the health of employees.
This is a great example of coalition government in action…both me and Norman Tebbit saying “get on your bike”.
Alternatives to travel
In the current economic climate, it is more important than ever to minimise driving costs - and if possible consider whether journeys are necessary in the first place.
It is for this last reason that I have become the first ever Transport Minister to have official responsibilities for alternatives to travel.
When this new brief was announced in the summer, I was rather pleased when it was welcomed by the Campaign for Better Transport as a “huge step forward”, and by the CBI.
But to be perfectly honest, it is something that should have been done long before now.
Just like the fleet manager’s job, the job of a transport minister has changed.
Today, you and I are not only responsible for getting people and goods from A to B.
We are also responsible for the impact of transport. On budgets. On the effectiveness of business. On the environment. And on people.
Within your organisations, you are absolutely pivotal.
You keep your businesses mobile. But increasingly, you can also help identify alternatives to travel that can significantly reduce the costs of transport.
That’s why in the months and years ahead I want to work with the fleet sector to support initiatives that can reduce employee travel.
And why I am working today with colleagues at the Department for Culture Media and Sport, Department for Business Innovation and Skills and in other departments to look at reducing the demand for travel, particularly for business.
That might mean encouraging home working; staggering people’s working days so roads and trains are less congested at peak times; promoting the use of high-speed broadband for both business and leisure purposes; and encouraging the uptake of video conferencing as an alternative to long-distance travel.
Of course it is not the mission of the Department for Transport to stop people travelling, but unnecessary travel is expensive in environmental and financial terms and, if we can help businesses to operate more efficiently with a need for less travel, we will be advancing both their agenda and our own.
I’d like to thank Fleet News and the Energy Saving Trust for inviting me to speak at this important event.
And I’d like to thank this industry for everything you have accomplished in recent years to help cut carbon emissions from road transport.
The fleet sector has always been important, innovative and influential. But I believe you have an even bigger role to play in the future…
Helping your businesses become more efficient, and better placed to compete as we recover from the economic downturn…
Procuring greener, cleaner vehicles, and supporting the growth of ultra-low carbon technologies…
Reducing fuel consumption, and improving driver training…
And getting involved in broader schemes to cut carbon - like car clubs, or cycling to work.
I look forward to working with you in the months and years ahead. So what we do as a government helps you do your job more effectively. And so what you do as fleet managers helps me to do my job more effectively.
Thank-you for listening.