The REA has recently launched REview 24, our authoritative annual assessment of the UK’s renewable energy and clean technology sector. This flagship report captures the state of play across the industry and outlines the progress needed to meet critical net zero goals.
To highlight the report’s key findings, we’ll be sharing weekly insights until Christmas, covering our strategic focus areas: Power, Heat, Circular Bioresources, Transport, and Finance.
Each piece will explore the challenges and opportunities within these sectors. With zero emissions vehicles being in the news recently, and the appointment of a new Transport Secretary, this week’s focus is on the decarbonisation of transport.
Charging ahead with electric vehicle infrastructure
Chargepoint installations are rising, up by around 20% in 2023 from the previous year. And the annual share of new car sales that are electric vehicles has risen from around 15% last year and must rise to 24% for cars in 2024 due to the Zero Emissions Vehicle (ZEV) Mandate legislated for in January 2024.
However, we are moving away from early adopters towards a more representative set of the population. What this means is that consumers, fleet operators, and others in the ecosystem will look to solutions that are easy to use, understand, be competitively priced and save money over a petrol or diesel equivalent.
In our recent publication Electrifying the Fleet we detail the significant number of actors involved in the fleet electrification process. These range from software providers whose fleet analysis proves vital to understanding which routes and vehicles can be electrified, to fleet managers choosing an operator to install a chargepoint, and service providers to run the chargepoints efficiently. Data provided by the Energy Saving Trust, who contributed to the resource, highlights that fuel savings can be as much as £3,500 a year and that’s before considering factors like demand-side response programmes utilising smart EV charging.
There are still significant challenges ahead, looking at how we prioritise grid connections, ensure long-term planning to assist Distribution Network Operators in meeting the growing number of connection requests, build in renewable energy generation and storage into our EV infrastructure, as well as resolving the policy and regulatory barriers to installation.
An integrated approach to electrification and fuels policy
In 2023, renewable transport fuels (RTFs) made up 8% of total road fuels supplied, saving on average 82% on greenhouse gas emissions compared to the use of fossil fuels. The deployment of RTFs is driven by the Renewable Transport Fuel Obligation (RTFO), which sets targets on fossil fuel suppliers to convert their supplies to renewables.
RTFO targets are set to continue increasing steadily until 2032 but the future beyond that is unclear. Last month the government published a call for evidence on the RTFO. This is the first step in revising the policy, but final decisions are unlikely to be taken before Autumn 2026. Since 2032 is fast approaching, the government urgently needs to develop a much more ambitious strategy.
There is a danger that the Government’s approach to electrification and fuels policy will be siloed into an either/or approach. With the REA’s strong membership in both areas, we are well-placed to push for the importance of addressing the challenge of decarbonising transport using all the tools available to us.
Overall, the biggest new area of activity in renewable transport fuels has been the development of a mandate for Sustainable Aviation Fuels (SAF). The final policy decisions are significantly improved on the original proposals as a result of extensive engagement from the REA on behalf of industry. The mandate will come into effect on 1 January 2025.
What needs to be done
Across the piece, transport decarbonisation will require an increasing uptake in EVs, the infrastructure that supports them, as well as the increasing deployment of RTFs. Some immediate steps that can be taken include:
- Ban on combustion engine cars: The reintroduction of the 2030 phase-out deadline for the sale of new petrol and diesel cars is important and welcome.
- VAT rate for charging: Reducing the VAT rate for public EV charging points to 5%, aligning it with the domestic rate.
- RTF deployment: Committing to more ambitious RTFO targets, with a trajectory set out to 2050.
There is a still long road ahead to achieving net zero in the transport sector. Taking these steps will accelerate our progress. Further information, analysis and steps can be seen in the full report.
Matt Adams, Transport Policy Manager & Paul Thompson, Head of Renewable Transport Fuels
Access the full REview 24 report here: https://www.r-e-a.net/rea-launches-flagship-review-24-report/