Urgent action needed to decarbonise HGVs, claims new report

Urgent action is needed to electrify half a million heavy goods vehicles (HGVs) in the UK in order to meet net zero targets for transport, a new report from the Green Finance Institute (GFI) says.

As world leaders prepare to gather at COP28 in the UAE for a Global Stocktake on progress against net zero targets,  the GFI, with the support of transport and finance organisations, is calling on Government, industry and private investors to work together to unlock a £100 billion investment opportunity to decarbonise the sector.

The report, Delivering net zero: unlocking public and private capital for zero emission trucks, focuses on unlocking the barriers to financing decarbonisation of the HGV sector and highlights perceived technology risk, higher costs, and lack of charging infrastructure as some of the key barriers to decarbonising HGVs.

It outlines 10 financial mechanisms that will support the decarbonisation of the freight sector and help the UK meet its net zero targets. 

These mechanisms were developed with input from global finance, freight and logistics, and energy experts, along with leading thinkers from academia and non-profit organisations, as well as local and central government.

The UK’s HGV fleet accounts for just 1% of all vehicles on the road but almost 20% of total transport emissions – roughly equivalent to the carbon footprint of domestic and international air travel, buses and domestic shipping combined.  

By installing infrastructure across the UK, including charge points in depots and also across the strategic road network, the country’s entire HGV fleet could be decarbonised, the report says.

Lauren Pamma, programme director at the Green Finance Institute, said:  “There is a £100bn investment opportunity that we can unlock through innovative finance products, providing a massive opportunity to decarbonise the HGV sector before the government’s target of phasing out diesel trucks by 2040.

“Our report sets out some of the financing mechanisms that will help us roll out electric charging points and get more electric lorries on our roads to decarbonise the HGV sector.

“These include utilisation linked finance and shared charging infrastructure agreements that will particularly help SMEs, which own half the UK’s HGV fleet but struggle to secure green financing and need additional support.”

Chris Ashley, head of policy for environment and vehicles at the Road Haulage Association (RHA), welcomed the report. 

“With its clear illustration of the complexity and costs involved, ensuring the switch away from diesel is seamless whilst supporting our vital small businesses – the lifeblood of logistics - will be essential,” he said.

“The GFI has provided a framework that allows industry to navigate and debate the investment conditions needed to deliver a sustainable net zero.”

HGVs present one of the biggest challenges in fleet decarbonisation, but the carbon reduction prize is massive, according to Toby Poston, director of corporate affairs at the British Vehicle Rental and Leasing Association (BVRLA).

“As well as finding and funding suitable vehicles, operators are having to consider energy and infrastructure requirements for the first time,” he said.

“The financial risks and upfront costs are eye-watering and it is no surprise that businesses are crying out for tax incentives and regulatory certainty.

“Truck operators are being asked to make a huge leap of faith and it is great to see the GFI is encouraging industry and Government to come together to develop innovative solutions.

“The financial barriers are undoubtedly high, but they do not exist in isolation. For a successful HGV transition the Government needs to play its part.

“HGV operators desperately need a technology roadmap, the longstanding issues with grid connections to be resolved, and an accessible charging network that meets the specific needs of HGV fleets.”