Forecourt Trader - 30 years at the heart of the fuel retailing community

Moving the goalposts

The announcement that the government may bring forward the end of sales of new petrol and diesel cars and vans to 2035, or even earlier, has alarmed many stakeholders involved in the automotive industry. The sector has been working towards a target date of 2040 since it was first set in 2010.

The proposed change was outlined by the Prime Minister Boris Johnson in his speech to launch the UN climate conference COP26 on Tuesday February 4. He said the government plans to bring forward an end to the sale of new petrol and diesel cars and vans to 2035, or earlier if a faster transition is feasible, subject to consultation. The ban would also include hybrid vehicles, which had previously been excluded.

However, PRA chairman Brian Madderson warned the government did not have a basis for achieving such an ambitious target, and that focusing so much on EVs could mean better long-term solutions were overlooked.

He said achieving the new target would not be possible without significant investment into petrol forecourts to provide retrofitted charging infrastructure, which the government has yet to address. He added that the policy change was largely uncosted, and over- reliant on driveway charging points, which many drivers will not be able to access.

He warned the government was again ignoring the potential for hydrogen-powered vehicles, which can be refuelled quicker than battery electric vehicles (BEV), have assured longer mileage range and can be more easily catered for within existing infrastructure at petrol filling stations. He urged the government to be technology neutral to avoid leading consumers down the wrong track, as happened with diesel vehicles.

Madderson said: "Many of our members have already embraced low-carbon systems, re-engineering their businesses toward roadside retail with improved car valeting and larger convenience and food-to-go facilities that cater for the slower refilling of electric cars. However, there are significant financial and technical hurdles that will need to be overcome to integrate electric vehicle charging into many of their forecourts.

"Until the issue of credible charging infrastructure is addressed this will impede the mass take-up of electric vehicles."

Stephen Marcos Jones, director-general of UKPIA, agreed with the need for a technology-neutral approach to cutting CO2 emissions. He said: "The UK government risks the progress we have made in reducing our emissions by 'picking winners', instead of allowing for consumer choice and technological development including low-carbon liquid fuels in internal combustion engine (ICE) and hybrid vehicles to lead the way in decarbonising our society.  Electric vehicles will have an increasingly important role to play in the future of our transport system.

"However, if we are to meet the target of Net Zero emissions by 2050 we need to focus on the ends and not the means. That must include recognising that ICE and hybrid vehicles are part of the long-term solution to decarbonisation, playing a fundamental role in lowering emissions now, through enhanced vehicle efficiency and the use of low-carbon liquid fuels."

For the car industry, Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes accused the government of setting a date without a plan on how to achieve it. He said: "It's extremely concerning that government has seemingly moved the goalposts for consumers and industry on such a critical issue. Manufacturers are fully invested in a zero-emissions future, with some 60 plug-in models now on the market and 34 more coming in 2020.

"However, with current demand for this still expensive technology still just a fraction of sales, it's clear that accelerating an already very challenging ambition will take more than industry investment. This is about market transformation, yet we still don't have clarity on the future of the plug-in car grant the most significant driver of EV uptake which ends in just 60 days' time, while the UK's charging network is still woefully inadequate. A date without a plan will merely destroy value today."

However, for forecourt owners worried about how the change might affect their business, there was some qualified reassurance from Steve Rodell, Christie & Co managing director, retail. He said that if the take-up of EVs reached a point where demand for retail fuels dropped significantly there were two potential outcomes. Fuel prices could rise to counter the loss in revenue but this could drive more people to alternative fuel or travelling less; or more likely retailers could switch to retailing other products such as food to go, drive-thrus and bigger convenience stores.

In the latter case the outcome would depend on where the forecourt was, what it offered and what could it offer in the future so size and catchment would be crucial. This means that some sites could become redundant, but others could flourish and be even busier. So while the government may dither over its policy and how to achieve it, the decisive entrepreneurs in the forecourt sector will find a way to keep their businesses thriving.


A Smart solution

The Prime Minister's announcement came less than a month after a government-backed taskforce reported how a transition to mass usage of electric vehicles could be achieved, if smart charging was widely adopted.
The Electric Vehicle (EV) Energy Taskforce, which brings together key players in the energy, infrastructure and transport sectors, said that if the process was managed properly the integration of EVs could significantly improve electricity network efficiency, increase system resilience and limit the requirement to build new infrastructure.
Coordinating the introduction of a smart charging infrastructure will enable network operators to balance demand and supply through an electricity grid. This would mean EV drivers willing to charge their vehicles during periods of low electricity demand or when surplus renewable energy is being generated would benefit from lower fuel costs.
The report set out a range of proposals to enable the efficient integration of EVs during the electrification transition. These include:
providing financial incentives to EV drivers to ensure that the potential energy storage capacity of millions of EVs is used to reduce peak demand;  
prioritising greater standardisation across the charging network to ensure it works resiliently, efficiently and securely;
establishing an independent body to promote the benefits of smart charging through a major publicity campaign;
extending the principle of open data in the energy system to include EV charge points and EVs to allow more effective smart charging;
co-ordinating energy and transport planning to ensure we have the right infrastructure in the right place.
Philip New, chief executive of Energy Systems Catapult and the EV Energy Taskforce chair, said: "Ensuring that the mass roll-out of EVs delivers benefits for both drivers and the wider energy system requires actions from industry, government and the regulator, including creating the new markets and policies that can unlock EVs' huge potential."
Fintan Slye, director of National Grid ESO, commented: "Electric vehicles will play a key role in decarbonising the UK's transport and electricity sectors. Smart charging and vehicle-to-grid technology means we can use renewable energy more efficiently."

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Weekly retail fuel prices: 18 May 2020
RegionDieselLPGSuper ULUL
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East Midlands112.21122.26106.78
London113.5664.90124.71108.57
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