Road to Zero – What can we expect from the Government Transport Strategy?

May 3, 2018

 By Faisal Haroon, Energy Policy Economist

Transport became the largest greenhouse gas (GHG) emitting sector of the UK economy[1] in 2016 (latest year data). While economies are striving to meet fast-approaching regulatory deadlines, this is a backward step. The transport sector’s performance since 1990 has been relatively poor – 2% reduction in emissions between 1990 and 2016. As a comparison, emissions from the second-largest emitting sector, energy supply, have fallen 57%. If the UK wants to meet its emission target by 2050 (80% reduction on 1990 levels) it must have a robust strategy to decarbonise the transport sector which accounts for 26% of all UK GHG emissions.

The government is committed to reducing transport emissions and has announced a ‘Road to Zero’[2] strategy. We expect this to be published in the coming weeks, and to provide some transport policy detail and direction.

What to expect from the Government Transport Strategy:

2040 phase-out of ICEs

In July 2017 the UK government announced that from 2040 the sale of new petrol and diesel cars will be banned. Not much clarity has been provided since and as a result, diesel cars have been disproportionately affected.

Figure 1: % change in new car registrations[4]: Aug-17 to Mar-18 compared with Aug-16 to Mar-17

Figure 1 shows that since the July announcement new diesel car registrations have plummeted by 29%. This fall has not entirely been offset by an increase in demand for petrol and alternatively-fuelled vehicles (AFVs) – overall market has contacted 11%.

Role for hybrid vehicles

The Committee on Climate Change estimate the market share of AFVs (electric and hybrid) needs to rise (from 5% today) to 60% in 2030[5] (with a split of 30% electric and 70% hybrid). By 2040 the market share increases to 100% such that the UK fleet is fully decarbonised by 2050.

Because of this split we expect the government to emphasise the role hybrid engines can play in decarbonising the transport sector. While this may be possible in the short term, a fully decarbonised UK fleet is an ambitious target and represents a speed of technological adoption which is unprecedented in the UK automotive sector. As a comparison, diesel cars (representing a less radical technological shift) took 40 years to reach 50% market share[6].

For the Government to meet these ambitious targets it must clearly communicate the ways in which it will encourage uptake from developing the infrastructure, financial support, changing consumer perception and employing supportive regulation.

Government’s aim

To facilitate adoption of alternative powertrains and creation of supportive policy frameworks, the government must communicate clearly what it’s aims are. Meeting regulatory deadlines is one, tackling air pollution is another. Underlying all of this is clarity – stakeholders in the transport sector need clarity on the government’s position to facilitate their decision making. Clear policy direction with an accepted roadmap would enable key stakeholders to adjust to a new reality.

Ecuity recently produced a report setting out a costed and realistic phase out trajectory for diesel vehicles. The report was commissioned by the British Vehicle Rental and Leasing Association (BVRLA).

Ecuity works across decentralised generation, energy efficiency and other low carbon energy sectors – providing clients with up-to-date policy analysis, strategic insights and advocacy capability.

If you would like to discuss the upcoming Road to Zero strategy, please contact the author:

Faisal Haroon, Energy Policy Economist – Faisal.haroon@ecuity.com


[1] BEIS – 2016 UK Greenhouse Gas Emissions, Final Figures (Feb 2018) https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/680473/2016_Final_Emissions_statistics.pdf

[2] Committee on Climate Change (CCC) – https://www.theccc.org.uk/publication/lord-deben-writes-chris-grayling-road-zero-strategy/

[3] Department for Transport – Beyond the horizon: the future of UK aviation (Apr 2018) https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/698247/next-steps-towards-an-aviation-strategy.pdf

[4] Ecuity analysis of SMMT new car registration data – https://www.smmt.co.uk/vehicle-data/car-registrations/

[5] SMMT New Car CO2 Report 2018 – https://www.smmt.co.uk/wp-content/uploads/sites/2/SMMT-New-Car-Co2-Report-2018-artwork.pdf

[6] Pathways To High Penetration of Electric Vehicles 2013 – https://www.theccc.org.uk/wp-content/uploads/2013/12/CCC-EV-pathways_FINAL-REPORT_17-12-13-Final.pdf