07 December 2021

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World leaders gathered in Glasgow for COP26 – the UN Climate Change Conference – as they sought consensus for action to limit global warming.

Here’s how their decisions will impact on businesses in the coming years…

Further details on COP26 can be found here

Cars and LCVs

Many countries have now committed to banning the sale of new cars and LCVs powered by traditional petrol or diesel engines, as well as hybrid and plug-in hybrid models.

The UK has pledged that by 2035 all new cars and LCVs sold must be either pure electric vehicles or fuel cell EVs – this involves a tapered system whereby traditional new ICE models will be banned from 2030 and new hybrids outlawed by 2035.

Other countries have set different timescales to outlaw new ICE sales – Sweden, Ireland, the Netherlands, Austria and Slovenia have set 2030 as the target, Norway has ambitions for 2025 while France and Spain have said it will happen by 2040.

However, exemptions will be in place for specialist vehicles used by the military, emergency services or small manufacturers who need more time to adapt.

Find out more here.

HGVs

The big news regarding vehicles from COP26 was the announcement of ambitious plans to phase out all diesel-powered HGVs.

The UK will become the first country in the world to commit to phasing out new, non-zero emission heavy goods vehicles weighing 26 tonnes and under by 2035, with all new HGVs sold in the UK to be zero emission by 2040.

Again, the same exemptions as above will apply.

Learn more here.

Automotive industry

COP26 also sought consensus from vehicle manufacturers across the world to commit to eliminate new vehicle emissions by 2040 by only building zero emission vehicles.

This ended up with a stalemate – the non-binding agreement was signed by 34 countries (including the UK) but key omissions were China, France, Germany and the US. Other signatories included 41 cities, states and regions, 28 fleet operators (including Sainsbury’s and DPD) and 13 investors.

And many of the world’s leading car companies have not signed the pledge – BMW Group, Renault Group, Hyundai/Kia, the multi-brand Stellantis operation (including Fiat Group, GM, Peugeot-Citroen), Toyota and the Volkswagen Group (Audi, Skoda, SEAT, Volkswagen, Lamborghini, Bentley and Porsche) all declined.

Learn more here.

Infrastructure

The Government has announced a further £620 million of funding for zero emission vehicle grants and electric charging infrastructure. It also revealed a new design of public charging station which will be installed in residential streets to boost EV uptake.

The problem for the Government is that it is promoting a strategy which will lose it a substantial amount of money as fuel duty receipts dwindle in the move to a fully EV new vehicle parc by 2035.

The Treasury has said it will consider changes to existing taxes and new sources of revenue throughout the transition to net zero – meaning issues such as road tolls potentially being introduced.

On a broader scale, the UK will also pledge to move to being entirely powered by clean electricity by 2035, meaning a focus on renewable energy such as wind and solar. It has also committed to building at least one nuclear reactor by 2024. It will also pledge to deliver 5 gigawatts of hydrogen production capacity by 2030 while simultaneously halving emissions from oil and gas.

Also at COP26, a new Zero Emission Vehicle Transition Council was formed, made up of representatives from California, Canada, Denmark, the European Commission, France, India, Italy, Japan, Mexico, the Netherlands, Norway, Spain, South Korea, Sweden and the UK. It aims to overcome strategic, political and technical barriers, accelerate the production of zero emission vehicles, and increase economies of scale.

The wider picture

COP26 saw the Government reveal its Net Zero Strategy setting out how the UK will secure 440,000 jobs and unlock £90 billion in investment in 2030 on its path to ending its contribution to climate change by 2050.

The plan includes:

  • £1 billion funding for EV grants and on-street residential charging
  • Increased adoption of sustainable aviation fuel to 10% by 2030
  • £500 million to investigate green technologies of the future
  • £3.9 billion for decarbonising heat and buildings, including £450 million for a domestic boiler upgrade scheme.
  • £124 million to restore about 280,000 hectares of peat in England by 2050 and treble woodland creation
  • £120 million to develop nuclear projects.
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