In this article Saeefar Rehman, Associate Director, Public Services Advisory, Grant Thornton UK LLP looks at what the future of road transport will look like.
Over the last few years, there have been plenty of headlines and discussion around what the future of transport, particularly by road, will look like. COVID-19 restrictions resulted in a dramatic reduction in car emissions and accelerating the ban on the sale of petrol and diesel cars will only speed up the purchase of electric/hybrid vehicles (which continued to rise despite the pandemic and an overall decrease in new car sales).
However, it is obvious that for the foreseeable future road transport will continue to be comprised of a mix of methods and, whilst there will be a ban on new non-electric car sales, older vehicles will continue to operate and larger vehicles will continue to utilise ‘conventional’ fuels, particularly for longer distance haulage.
But, as the economy continues to transition to be more sustainable and carbon neutral, what will be powering our vehicles in the future?
No surprises here – electric vehicles (EV) are likely to become the main player in the industry. Whilst hydrogen is also cited as an alternative, battery technology is significantly more developed and likely maintain its advantage for some time. Pure EV sales nearly tripled from 2019 to 2020, and hybrid sales almost doubled.
The key inhibitor to further adoption will likely be how quickly infrastructure develops to provide charging points. Grid capacity is also cited as an issue; however it is likely to be less of a problem than perceived, partly due to technologies that enable flexible utilisation and partly due to the relatively small demand expected from EVs (electric heating, for example, would make greater demands of the network than EVs).
While slow chargers (under 10kw) have low installation costs and would be suitable for homes and other places where time is not a major factor, for people who do not have space for their own device, higher speed chargers will be key. Although ultra-rapid chargers (100kw plus) have seen the fastest growth recently, rapid chargers are forecast to have the greatest share by 2030. Ofgem’s funding of £450 million over the next five years, announced recently, is, unsurprisingly, helping to accelerate the deployment of charge points.
The government’s renewable transport fuel incentives will continue to ‘encourage’ fuel suppliers to use sustainable sources. Developers have been working on utilising various wastes, including municipal and refuse derived fuels, to produce biofuels, and activity is increasing in the market – with the likes of Essar making a deal with Fulcrum Bioenergy.
With the technology also capable of producing aviation fuel, it is not surprising that airlines have a stake in this space as well. The recent confirmation that E10 (fuel with 10% bioethanol) will become the new standard re-affirms just how important the renewable component of fuel is considered by government.
Hydrogen has long been recognised as a key factor in building a sustainable future. Airbus’s plans for a zero-emission plane are centered on hydrogen propulsion technology. However, whilst hydrogen may be suitable for larger vehicles and fleets, it is unlikely to be a key player in the car sector in the immediate term.
There are only about a dozen fueling stations in the UK at the moment, and it costs more than charging an electric vehicle. Nonetheless, hydrogen certainly is an area to watch as major developers start to produce hydrogen powered vehicles and fuel station development gathers pace.
So, while there is no magic bullet or single simple step the transport sector can take towards carbon neutrality, there are numerous alternatives coming to the fore and gathering pace as focus on this agenda continues to grow. There are also numerous incentives that could be considered by government, such as those to encourage car sharing, to further accelerate carbon reduction.