1. 17 th July 2007 Brendan Connor, Cenex Pollution Control - Meeting the Emissions Challenge: Towards a New Partnership between Local Authorities, Transport Operators and the Commercial Vehicle Industry

2. Introduction Cenex role –Change agent role aiding market transformation and UK supply chain development through projects driving innovation and through Knowledge Transfer Network –Projects aid technology advancement through demonstration and public technology procurement –Pathways to CO 2 reduction being studied and then showcased (helping overcome barriers to future uptake) Benefits of Cenex approach –Evidence based analysis –Pragmatic solutions for individual sectors –Parallel experiences and evidence –Maintain technology options –Learning through UK-based capabilities development

3. Background Low Carbon Transport Innovation Strategy / E4Tech reports CO 2 road transport sector contributions Vehicle parc and historic rate of change Ownership pattern Existing regulatory framework But, we must remember that there are no specific targets set for road transport CO 2 reduction.

4. Road Transport CO 2 Reduction Objectives Different approaches can be adopted –Fast-track for CO2 reduction approach Fastest rate and quantitative reduction in CO 2 Lowest expenditure of public funds Minimal invention new fiscal / regulatory framework within UK Lowest technology risk Minimum supply chain dislocation Maximum market imperative to switch to low CO 2 –Market intervention focused on long-term targets Aim at best potential technologies (hydrogen fuel cells, second generation bio-fuels and hybrids, etc) and seek to deliver against final target Greater technology risk-reward Supply chain support and market assistance needed to establish new markets Downside that two-tier end market of new low emitters + old high emitters

5. UK Vehicle Parc Profile Total UK Parc* Turnover cycle (yrs)* MtC Avg.** CO2 vehicle (t/v)** CO2 emission range Ownership Fragmentation Cars30.8 M 13.419.10.62HIGH LGV3.4M12.84.61.35MED HGV593K13.27.813.1MEDLOW Buses102K16.61.09.8LOWV.LOW Motorcycles etc. 1.5M15.2MEDHIGH SPV429K17.8MED *Source SMMT **Source LCTIS / DTI

6. Priorities In Road Transport CO 2 Reduction HGV #1 LCV #2 Buses #3 …Cars distant #4

7. Heavy Goods Vehicles Priority development of CNG / methane infrastructure CNG / methane infrastructure exists – its just not connected to the road network Contribution of bio-methane grid injection should be recognised European experience (Italy, Germany, Sweden, Switzerland) Replacement cycle – 25% reduction in total road transport CO 2 by 2025 in two steps –Diesel to CNG yields up to 3.4 tonnes per vehicle reduction –CNG to bio-methane yields up to 9.7 tonnes* per vehicle reduction * Blend and process dependent

8. Light Goods Vehicle Fastest growth sector in vehicles/mileage 20% growth in 5 years, and higher individual average mileages Low CO2 technology options –Use CNG from HGV infrastructure –Diesel electric hybrids (technology share with car sector) –Bio-diesel from certified non-food / non environmental impact sources –Electric for urban use Potential to reduce CO2 from 4.6 MtC to 3.0 MtC* (5% of total parc CO 2 ) * Joint Research Council, May 2006.

9. Buses Bus growth within public transport strategy BSOG Range of technology options –CNG –Diesel-electric hybrid –Fuel cell –Electric (inc. trolley bus) Public procurement technology pull-through CO2 reduction potential of 1% of total vehicle parc CO 2

10. Cars EU wide end of voluntarism EU / UK regulatory framework and consistency UK car parc near saturation point Existing UK fiscal framework based on VED and fuel duty Technology options –Improved petrol and diesel engine efficiencies –Weight reduction and reduced rolling resistance –Petrol / Diesel electric hybrid –Biofuels –Electric If average new car CO 2 achieved 113g/km by 2025, cars would deliver a 9% reduction in road transport CO 2.

11. Road Transport CO 2 Reduction Summary Road transport CO2 at 2007 = 32.5 MtC By 2025 each road transport segment potential reduction in 2007 levels is –HGVs 25% –LCVs 5% –Buses 1% –Cars 9% 40% reduction in road transport CO 2 at 2007 levels

12. UK Supply Chain CNG fuel switch has minimal impact on UK powertrain industry Electric vehicles are a growing area of UK capability –risk and opportunity exists in energy storage technology Diesel electric hybrid for cars/vans remains an unexploited opportunity Hydrogen and fuel cells remain a longer-term option for vehicle propulsion, but other road transport opportunities exist e.g. refrigerated trailers

13. Summary Differing routes to CO2 reduction –Low risk route to 40% road transport CO 2 reduction by 2025 outlined –Higher risk approaches exist using hydrogen\fuel cells, etc No silver bullets, sector specific approaches should be favoured –Significant opportunity for HGV CO2 reduction –Cars left to EU in short-term, need for full range of low carbon technologies (and infrastructure support) in the long- term Critical role for technology demonstration and public technology procurement to establish validity of pathways and encourage industry and end user investment

14. Thank you for your attention www.cenex.co.uk