Theresa May's £100m pledge: Will the UK lead the world on zero-emission transport?
The world's first zero-emission vehicle summit will be headlined by a £106m investment from the UK Government into low-emission vehicle development. But, how will the UK's transport ambitions fare in light of new EU legislation and continued uncertainty over post-Brexit trade deals?
Theresa May will attend the world's first zero-emission vehicle summit to champion the UK’s leadership role in the development of zero-emission vehicles – including the announcement of a new £106m research fund. However, Brexit concerns and proposed EU legislation continue to cast serious doubt over the legitimacy of the Prime Minister’s claims.
May will deliver a speech at the world-first summit in Birmingham later today (11 September). May is expected to announce a £106m investment into zero-emission vehicle research and development, with a focus on battery, charging and hydrogen refuelling technology.
The announcement forms part of an overarching “ambition” for the UK to become a global leader in low-emission transport technology. More than £500m in projects from the UK’s automotive sector will also be announced over the coming months.
“I want to see Britain, once again, leading from the front and working with industries and countries around the world to spearhead change,” May is expected to say.
“That is why I have set this country an ambitious mission. To put the UK at the forefront of the design and manufacturing of zero-emission vehicles, and for all new cars and vans to be, effectively, zero-emission by 2040.”
The £106m research fund aligns itself to various Government policies, namely the overarching Industrial Strategy and the Road to Zero strategy, a £1.5bn investment plan into electric vehicle (EV) research, development and infrastructure that will help phase out petrol and diesel sales by 2040.
The Government believes the Road to Zero strategy is “one of the most comprehensive packages of support in the world”, and major players in the UK’s automotive sector seem to be on board; on the surface at least.
Aston Martin, for example, will announce a £50m investment into its new St Athan facility in Wales. The site will become a centre for electrification and the Lagonda EV brand. The investment is expected to create an additional 200 jobs at the site.
UK-based charging station developer The EV Network will invest around £200m in fast-charging stations across the UK, and will partner with battery specialists Leclanché to unveil an EV Charging Centre of Excellence in Warwick. In 2019, the UK’s largest, independent, vehicle battery manufacturing plant will open in Coventry, creating at least 90 new high-value jobs.
Elsewhere, the MINTH Group will create a new UK facility to service new automotive component orders from OEMs. Lloyds Banking Group will create a £1m incentive fund for EV leases and Zhuzhou CRRC Times Electric - a subsidiary of locomotive manufacturer CRRC - has named Birmingham as the site of a new R&D facility focusing on EVs and rail transport. The centre will employ more than 150 engineers by 2020 through a £50m investment.
The UK Government expects that the relevant transport sectors will facilitate projects totalling £500m into low-emission technology, creating 1,000 jobs across the country. It builds on the Automotive Sector Deal announced earlier this year, which has been backed by automotive heavyweights including Ford and Jaguar Land Rover (JLR).
What about Brexit?
However, the looming threat of a no-deal departure from the EU has left some automakers scrambling for reassurances that post-Brexit Britain will become a thriving hub for future product lines.
JLR, which sells 45% of its UK production in Europe, cited Brexit as part of a decision to reduce production output for its Discovery Sport and Range Rover Evoque models, which are produced at JLR’s Halewood plant in Merseyside.
For a sector that employs 186,000 people in the UK, these scale-backs can prove costly. Even when the intricacies of Brexit are finalised, they could prove problematic. Honda, for example, had claimed that potential trade tariffs could damage the competitiveness of vehicles manufactured in the UK.
The Government’s current vision for trade options post-Brexit has been expressed through the controversial Chequers proposals. They hinge on a “common rulebook” that would prevent non-tariff trade barriers from emerging. However, the EU’s chief Brexit negotiator, Michel Barnier, is “strongly opposed” to these proposals.
Barnier went as far as to warn carmakers that fewer UK-based companies and parts could be used in the manufacturing of vehicles, which is likely to impact new investment and sales opportunities for UK OEMs.
A briefing paper from the House of Commons notes that 44% of components found in UK-manufactured vehicles come from UK suppliers. This is well below free trade agreements for automotive products from third countries, as highlighted in the deal signed between the EU and South Korea. Carmakers operating within EU countries would instead have to source components across the bloc, rather than from the UK, which would be classed as a third country.
New EU targets
It’s important to note that the UK is attempting to position itself as a global leader of low-emission transport - rather than traditional fuels - and recent EU legislation could help galvanise that effort.
The European Parliament's environment committee has confirmed support for more ambitious carbon reduction standards for new car and vans by 2030. Amendments are set to be made to increase emission reduction targets from new vehicles from 15% to 20% by 2025 and from 30% to 45% by 2030. Sales targets for zero-emission cars and vans have also been strengthened to 40% by 2030, with penalties in place for failing to meet them.
Under the amendments, which are expected to be finalised next month, carmakers would be subjected to a credit system that incentivises the rollout of EVs. Car makers would be able to lower overall targets for sales and carbon reductions by selling more low-emission vehicles. Real-world tests to detect emissions manipulation have also been supported, alongside fines for carmakers that exceed carbon emission limits.
Transport & Environment’s clean vehicles manager, Julia Poliscanova, commented: “The Environment Committee has done what the Commission failed to do: propose ambitious car and van CO2 reductions and close testing loopholes so emissions cuts happen on the road too, and not only in labs.
“The vote shows that MEPs recognise the benefits to drivers, jobs, the climate and the air we breathe of a faster shift to electric cars. The targets are, however, less than the 60% needed to reduce transport emissions in line with the EU’s Paris climate commitments.”
The auto industry lobbied for a 20% carbon target, citing concerns over job losses. Provided the UK Government can agree on an enabling trade agreement with its EU counterparts, a focus on EVs and low-emission vehicles could actually spur growth in the sector as more automakers turn to the UK for expertise and infrastructure to meet new climate targets.
The UK Government intends to phase-out the sale of new petrol and diesel cars by 2040, with an interim target of ensuring more than half of new car sales and 40% of new van sales are ultra-low emission by 2030.
A new report from the Aldersgate Group has called for mandatory zero-emission vehicles sales targets to be introduced in the UK post-Brexit. If this recommendation were put in place, the UK would have a similar EV trajectory to the EU, regardless of what environmental legislation was transposed beyond 2020. In fact, the Group predicts will low-emission vehicles market will be worth £1-2trn a year by 2030 and as much as £7.6trn a year by 2050.
The Government could still be swayed to increase this ambition, which would put it ahead of other EU nations, and Friends of the Earth has continuously called for the phase-out date to move forward.
“We can’t afford to wait until 2040 for most new vehicles to be zero-emission,” Friends of the Earth’s chief executive Craig Bennett said. “Pollution from road traffic is a major cause of air pollution and climate change – industry must be challenged to clean up its act far sooner.
“Norway is aiming for all new cars to have zero emissions by 2025, and India has a 2030 target – so why can’t the UK act quicker?”
In the short-term, the Government has put measures in place to spur uptake amongst consumers, a decision that is likely to entice automakers. Consumer incentives “in some form” will continue for electric cars and vans post-2020. The Government will this year launch a “Go Ultra Low” campaign, which will run until 2020 and see ministers advising carmakers on how they can market EVs through communications.
What else is new?
At the Birmingham event, the Government will unveil a new international declaration to accelerate the global deployment of low-emission vehicles and smart charging and refuelling infrastructure.
The “Birmingham Declaration” will be signed by Italy, France, Denmark, the United Arab Emirates, Portugal, Belarus and Indonesia, with more nations currently in talks to sign up.
A consultation has also been launched on whether green number plates should be used by low-emission vehicles to raise awareness and promote use amongst consumers. Similar plates are already used in nations such as Norway, Canada and China.
It was also announced that The LowCVP will oversee the Government’s new Electric Vehicle Energy Taskforce, which was announced as a part of the Road to Zero strategy. The Taskforce will explore ways to increase the market share of EVs for new car sales, which represented 4% for August 2018.