Over the past two decades we have witnessed the introduction of many ‘Clean-technology’ alternatives to the Internal Combustion Engine for the sub-18t commercial vehicle sector. Many have been superbly engineered and evidenced, in small volumes, to provide a genuine proof of concept for urban and suburban applications.

We can look back at the pure EV’s from Smith Electric Vehicles and Modec as prime examples. We have also seen highly credible hybrid solutions using technologies such as fuel-cells, mini-turbines and supercapacitors.

Unfortunately a number of factors conspired against mass-adoption. These included:

  • A lack of infrastructure, from a recharging and/or refuelling perspective
  • An inability to mobilise an immature and specialist supply-chain to produce components in high volumes
  • A nervousness to provide finance from Contract Hire and Asset Finance providers

Lack of volume means higher build/supply costs, and regardless of how ‘Green’ medium and large corporates want to be, the product has to stack up from up from a total cost of ownership (TCO) standpoint. The suppliers have to have a profitable and sustainable business model to ensure they will be around to support the product for the next 10 years. Niche manufacturers didn’t have pockets deep enough to support sale prices at a level that created volume, resulted in critical mass and ultimately a positive TCO to the user. The large OEM’s have the pocket size to develop and support the introduction of low-emission vehicles, but many have hedged until they had visibility of what was to be introduced in terms of regulation and legislation.

HGVs account for 4.2% of UK carbon emissions, so decarbonising the sector is essential to meet the UK’s goal of achieving Net Zero by 2050. An increasing number of UK and European cities are (or are planning to) introduce high tariffs or complete bans on vehicles which do not meet stringent emission levels. Commercial vehicle OEM’s are now realising that a large market is going to open up for load movements and deliveries into cities and are accelerating the deployment of vehicles to fulfil the requirement.

So what is available now and does it fulfil the CSR agenda for large fleet operators?

One such technology that is certainly worth serious consideration is Biomethane-Compressed Natural Gas. The gas is currently sourced from waste feedstocks, such as food waste, and is the most environmentally friendly and cost-effective alternative to diesel for HGVs.

The Vehicles

Iveco, Volvo and Scania are established manufacturers of CNG powered trucks. Iveco are 20-year veterans of LPG and CNG technologies. They have produced over 32,000 gas powered vehicles, and have supplied to major operators such as Hermes, UPS, Waitrose and Sainsbury’s.

Iveco has an available range covering

  • 3.5t – 7.2t with a runge up to 300 miles
  • 16t Rigid with a range with a range up to 300 miles
  • 26t Rigid with a range up to 500 miles
  • Tractor 4×2 with a range up to 350 miles
  • Tractor 6×2 with a range up to 300 miles

Infrastructure

CNG Fuels Ltd is a leading operator of bio CNG refuelling infrastructure and is embarking on a major roll-out of new facilities across the UK with current sites in Leyland, Crewe, Northampton (M1) and Warrington (M62). New sites will be opening throughout 2020 in Liverpool and Birmingham and during 2021 in Avonmouth, Bellshill, Wakefield, Newark and Milton Keynes. The Fuel supplied by CNG Fuels is 100% renewable and sustainable Biomethane approved under the UK Department of Transport’s Renewable Transport Fuel Obligation (RTFO) scheme. It cuts vehicle greenhouse gas (GHG) emissions by up to 85% and is 35%-40% cheaper than diesel.

BNP Paribas Rental Solutions has experienced a rise in interest for CNG products. We have calculated a TCO benefit for certain age and mileage profiles. We support the deployment of this technology and would be delighted to provide contract hire quotations. If you are interested, contact us.

Media Contact

Lauren Goodfellow
Head of Marketing and Communications
BNP Paribas Leasing Solutions UK

T: 01179 100 895
Email here

The London Mayor, Sadiq Khan has recently announced the extension of London’s proposed ‘Ultra Low Emission Zone’ to include Haringey, Greenwich and Brent; the extension will apply from 25 October 2021.

This represents a major adjustment to arrangements currently in place and changes already announced for 8 April 2019. The changes previously announced will see the replacement of London’s ‘Low Emission Zone’ where vehicles not meeting Euro 4 emission standards pay a ‘T (Toxicity) Charge’ of £10.00 per day when entering the Congestion Zone being replaced with an ‘Ultra Low Emission Zone’ where restrictions will be imposed on all but the most modern vehicles (Euro 6 emission standards). The new announcement represents a significant expansion of the area currently covered.

The inclusion of many more London boroughs within the ‘clean air’ initiative is simply a further acceleration towards the total elimination of vehicles deemed to be most responsible for air pollution. The speed of change is being influenced by the courts who are being charged with ensuring that the UK Government meets its international obligations. In these circumstances the usual political practice of ‘kicking into the long grass’ controversial decisions is not freely available.

So far as light commercial vehicles are concerned only the Euro 6 engine will be exempt from restrictions in ultra-low emission zones and larger vehicles will require the Euro V1 levels of emission. Furthermore, the cost of a non-compliant vehicle entering an ultra-low emission zone is set to rise significantly to £100 per day for light commercial vehicles and to £200 per day for large vehicles.

It is often said that where London leads other parts of the Country follow and certainly this is true in respect of clean air initiatives. In England, Brighton, Nottingham, Oxford and Norwich have already identified low emission zones within their boundaries and are currently investigating the degree to which they might replicate the arrangements applying to London. A number of other local authorities have been allocated Government funding to implement low emission zones. These include Aylesbury, Bath, Birmingham, Bradford, Horsham, Leeds, Lewes, Maidstone, Newcastle-Upon-Tyne, Reading, Sheffield, Southampton, Warwick, Waverley and York.

The message is therefore clear; to avoid a prohibitively high financial charge for vehicles entering a large, diverse and growing range of towns and cities, fleet operators need to move quickly to ensure that their vehicles meet the highest possible emission standards. Many vehicles will need replacing and a contract hire agreement provides the means by which the immediate investment necessary can be achieved whilst spreading the cost of acquisition and maintenance throughout the period the vehicle will be operational.

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The move towards low emission vehicles is both rapid and irreversible. Led by London, a number of towns and cities within the UK are at the point of either introducing or announcing very high charges for any but the most modern low emission vehicles entering their centres. It is entirely reasonable to conclude that the pace of change is now so fast that within a relatively short period of time even the most modern low emission petrol and diesel engines will also be subject to some form of discrimination. Car manufacturers recognise this reality and to varying degrees have well developed plans for the widespread introduction of zero-emission vehicles.

Whilst there are greater challenges involved in replicating the speed with which alternative fuels are being introduced to passenger cars by commercial vehicles manufacturers, progress is now being made.

Given that low emission zones are initially springing up within town and city centres, it is operators of vehicles that serve the retail market that need to address the issue as something of a priority. One trend has been an increase in the use of light commercial vehicles in urban areas at the expense of larger trucks, given that there are currently a greater range of low emission options for smaller vehicles.

That is not to say that manufacturers of heavy goods vehicles are ignoring the issue and both battery and compressed natural gas (CNG) powered engines are being developed.

CNG is a fuel that powers an internal combustion engine but can reduce emissions by about 80%. At the end of 2017 Waitrose, the UK supermarket chain, announced the introduction of ten Scania built trucks with a gas storage capacity sufficient to offer a range of 500 miles. Furthermore, although the vehicles cost around 50% more than their diesel equivalent to purchase, fuel savings are estimated to be as much as £20,000 per year. Therefore a return on the extra investment will be achieved within two to three years, with an associated significant reduction in the comparable total cost of ownership over the lifetime of the vehicle.

Electric vehicles are also increasingly available for all types of commercial vehicles but their use is limited by having a maximum range of around 180 miles. Renault Trucks will shortly be launching their second generation of electric trucks. Using Lithium-ion batteries that can be fully DC charged in about two hours, the Renault Trucks Z.E. models range from 3.5 to 26 tonnes. These vehicles are designed for a variety of urban applications such as distribution, delivery and refuse collection.

So far as light commercial vehicles are concerned changes are more advanced and as a short term solution there has been a small increase in the proportion of cleaner petrol powered vans at the expense of diesel. However, replacement of older vehicles with Euro 6 diesel engines will be sufficient to avoid the planned low emission charges in London and other cities and therefore offers the most popular short-term solution to meeting clean air targets.

Zero emissions remain the ultimate goal and electric the probable solution. Nissan, Renault and Mercedes are amongst those leading the way in the UK market for electric vans. Whilst new technology is increasing vehicle ranges, battery power remains unviable for longer-distance commercial drivers such as couriers and for these applications hybrid in certain situations might produce an interim low emission solution.

Hydrogen, which powers a select number of fuel cell cars is also being considered for light commercial vehicles. Refuelling is very quick (minutes) and range can be greater than battery powered alternatives but there are currently very few hydrogen sites within the UK.

Compressed natural gas (CNG), as explained above, has been the conserve of HGVs, but manufacturers including Iveco are amongst those introducing this fuel source to some of their new models.

There is an increasingly urgent requirement to reduce commercial vehicle emissions and this is a factor which fleet operators need to consider when deciding the timing and nature of vehicle replacement. Given the rapid changes underway in terms of both legislation and technology vehicle operators might consider short term leasing and contract hire agreements as alternatives to outright purchase or long term finance agreements when replacing their equipment. The key requirement is to avoid a situation where changes to the law or the introduction of new technology renders older vehicles expensive to run and where such vehicles cannot be easily removed from the fleet.

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