CEO Update

Automotive is decarbonising to keep 1.5 alive

12 November 2021 #CEO Update

The long anticipated COP26 has finally been taking place in Glasgow this past fortnight, and through the many presentations, speeches, media events and even protests, there has been a palpable sense of urgency; that something must be done – and now to mitigate the rising global temperatures and the adverse climatic effects climate change is wreaking across the globe.

With Covid-19 restrictions still in place, this was a somewhat subdued event in comparison with previous COP meetings and access to most areas was greatly restricted. Nevertheless, there were still a range of events around the city that hosted debates and discussions, giving SMMT and other organisations and sectors the opportunity to engage with decision makers on the necessary action to reduce emissions and, in the case of the automotive sector, to support a transition to zero emission vehicles.

Transport Day took place on Wednesday 10 November and included a number of announcements including the “COP26 declaration on accelerating the transition to 100% zero emission cars and vans”. The UK automotive industry is committed to zero emission transport for all, and any activity to support this shared ambition should be embraced. Our direction of travel is clear – all new car and van sales in this country will be zero emission by 2035 – and, with more than a quarter of the new car market electrified so far this year, good progress is being made. Whilst it was for individual automotive manufacturers to decide whether to sign this declaration, there is no doubt that the entire industry is decarbonising, investing billions to bring new, cleaner technologies to market to deliver net zero.

Transport Day was also used to announce the preliminary outcome of the UK government’s consultation on the phase out of the sale of new non-zero emission heavy goods vehicles by 2040, an issue that will be a major challenge to truck manufacturers and to all those involved in this transition. Manufacturers are already investing billions in new technologies including battery electric, fuel cell, hydrogen and other alternative fuels to ensure road transport plays its part in delivering net zero, Currently, however, there is no single technological solution for every service that HGVs perform. As such, there may still be some instances – specific and limited – for which electrified technologies are not yet feasible. However, the key enabler to this transition is a dedicated HGV infrastructure, for which we still await a detailed plan.

Elsewhere, this week SMMT released the latest used car market statistics for the past quarter and, despite transactions declining by -6.2% on the same period last year, the number of used BEVs changing hands during Q3 increased by 56.4%. Whilst this is a positive step towards decarbonising the UK’s roads – with newer vehicles reducing significantly the CO2 emissions of the models they replace – there is no escaping the fact the pandemic is affecting the used car market as well as the new. With the shortage of semiconductors needed to produce new vehicles decimating the new car market, there is restricted supply – and higher costs – flowing through to the used car market. This is particularly worrying as fleet renewal – of both new and used – is essential if we are to address air quality and carbon emissions concerns.

So as we wait to see the final outcome of COP26, we know that road transport, and the automotive sector in general, will have to shoulder a significant burden in delivering net zero but if we are to be successful in doing so, we need a strong and healthy market for all types of vehicles.

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