Transport Just Transition Plan: Consultation Analysis

5. Businesses and Organisations

5.1 Priority Actions

Q13. Are there any gaps in our approach to setting out opportunities and priorities for businesses and other organisations in the transition of the transport sector?

Of those who answered the question, half (50%, n=36) said there were gaps in the approach for opportunities and priorities for businesses and other organisations in the transition of the transport sector.

In response to the open-ended component of this question, several organisations simply cross-referenced the views already given in response to earlier questions.

5.1.1 Opportunities

Decarbonisation of HDVs: While welcome, organisations encouraged support to better scope out this opportunity in terms of specific suppliers or manufacturers who should be supported. Barriers to commercial fleets switching to electric vehicles were flagged, including that the majority of heavy goods vehicle (HGV) fleets using EVs are generally limited to local or regional transport:

“The Plan mentions the development of a Fleet Decarbonisation Action Plan for the public sector but lacks specific details on how this will be implemented. More information on the steps and timelines for public sector fleet transition would help businesses understand the opportunities and challenges associated with this process.” (Private Sector Transport Organisation)

Several other organisations also stressed that more thought was needed around impacts on businesses operating fleets of light goods vehicles (LGVs). Views were expressed that vans/LGVs need greater regulation as the total emissions from vans and cars is greater than from HGVs when taken as a whole.

Charging and refuelling infrastructure: Several organisations stressed that they were already working hard to achieve better infrastructure. They welcomed opportunities to feed into strategic thinking on this aspect of the Plan. Opportunities to explore infrastructure sharing between public, private and third sector fleets in the future were encouraged. It was also noted that developing adequate and reliable charging infrastructure was crucial for supporting the widespread adoption of EVs (especially in rural areas where grid connection costs were viewed as prohibitively expensive). Similarly, it was stressed that HGV and bus fleet chargers require much larger grid capacity. Therefore, investment in the power supply network (including staffing) would be substantial.

Some commented that there was a lack of specific actions and timelines for the deployment of charging and refuelling infrastructure:

“More concrete steps and commitments are required to ensure that businesses can plan and invest with confidence. This includes detailed plans for grid connections and land access, as well as collaboration with Distribution Network Operators (DNOs) and the National Energy System Operator (NESO)… There have been initiatives put forward elsewhere in the UK looking at shared charging infrastructure and how to make this more accessible. This discussion was not in the Plan, and could be a relevant avenue to explore in Scotland to facilitate the transition, even where commercial operators do not yet have access to depot charging.” (Private Sector Transport Organisation)

Consideration of infrastructure beyond the UK border and into Europe was also encouraged in relation to long haul freight.

Sustainable aviation fuel: While seen as a definite area for future development, with opportunities to use surplus green energy being stressed, there was little specific feedback on this opportunity. One organisation noted that southern Scotland may have a key role to play here, given their proximity to both Scottish (and English) international airports and the regional green fuel demand for ferries in the south. One individual highlighted that potential side effects of using sustainable aviation fuel must not be overlooked.

Respondents stressed additional opportunities for:

• Future development of sustainable aviation fuel;
• Highlighting gains that have already been made in the public sector (including the higher rate of decarbonisation within the public sector fleet);
• Encouraging wider public sector fleet sharing and wider sharing of infrastructure costs between all sectors (public, private and third);
• More incentives for businesses and community groups to purchase second hand EV vehicles;
• Reinstatement of schemes such as the ‘plugged-in communities grant funding’ available to community transport operators to decarbonise the fleet through procurement of EVs and charge points; and
• Expansion of low carbon transport loan schemes for domestic drivers and businesses for the purchase of zero emission vehicles, to increase the pace of transition.

More generally, opportunities for even greater partnership working were also highlighted. This included encouraging cooperation between commercial organisations and those in different markets. Others stressed opportunities for more involvement of the Scottish Government in partnership working to ensure delivery of a just transition across sectors.

A small number of organisations mentioned innovation (such as the role of digital solutions in helping businesses reduce emissions through smarter mobility) and technological innovations (such as AI and VR). They noted that these could feature more in the Plan, both to support business operations to become greener and in considering the skills needed by the transport workforce.

5.1.2 Challenges

The main organisational concern focused on how funding and resources would be secured to support the required changes. For example, financial support would be necessary to decarbonise fleets, install charging infrastructure, and adapt practices to reduce emissions:

“…while noting and welcoming progress made to date to decarbonise public transport fleets, greater investment is required to accommodate the higher upfront costs of electric buses. This combined with need to address infrastructure challenges such as grid upgrades, make transition particularly challenging without enhanced government support.” (Public Sector Transport Organisation)

Sustained investment and delivery of charging infrastructure (especially in remote mainland areas) was encouraged.

Other more general comments were made that the pace and scale of changes required looked very difficult to achieve. This was perhaps not well captured in the Plan. Operators would also need confidence in the technology and the robustness of commercial viability of zero emission HGVs to enable the transition in the shortest time possible. There were also reflections that most major truck original equipment manufacturers (OEMs) were quoting 2030 or later as the date that hydrogen fuel cell trucks would be available to commercial operators. Without sufficient government support, this may slip further. Similarly, it was stressed that EV and low carbon alternatives of plant and other equipment was not yet widely available. As such the impacts of the Plan in this respect may be limited.

5.1.3 Gaps

Perhaps the biggest perceived gap identified was the need for greater consideration of how to decarbonise journeys to work, and a focus on behaviour-change schemes. For example, encouraging modal shift to active and sustainable transport, encouraging ‘local living’, and promoting car sharing and cycle to work schemes. Promoting the benefits of modal shift to business and their customers should also feature, it was suggested. Funding support and greater national consistency on staff travel plans and associated measures was also encouraged.

The other main gaps and/or areas for future activity suggested were:

• Freight decarbonisation, including maritime and ferry logistics, and the need for improved rail freight infrastructure/strategic freight hubs;
• Addressing the interests of the full range of ferry owners and operators/focus on workboat electrification for aquaculture and port services;
• The needs of businesses with larger fleet vehicles where EVs may not be an option;
• Opportunities to retrofit existing vehicles, and discussion of the environmental impact of disposing of or decommissioning combustion vehicles;
• More emphasis on low carbon last-mile delivery options e.g. by cargo bikes and EVs, and funding support for this from Transport Scotland;
• Discussion of the potential for greater use of battery electric vehicles (BEVs);
• Working low emission fuels into the draft plan and recognising their contribution; and
• Recognition that, while renewably generated electricity is much cheaper than fossil fuels, lower prices are not necessarily passed on to users.

Some comments were also made around the resilience of the energy grid. It was noted that extreme weather events due to climate change created risks. In addition, there are increasing and competing demands on power generation, given the pace of decarbonisation across all sectors (not only transport). Linked to this, the impact on the planning system could also be a barrier, it was suggested. In particular, where applications related to power generation raise significant local opposition, leading to delays:

“The increase in energy needed to support the transition to EVs should be modelled. The network should be resilient to likely climatic and other impacts. A community wealth building approach should be taken to develop the energy infrastructure to meet needs.” (Other Public Sector Organisation)

There were also calls for ensuring that performance indicators were regularly updated and accurately reflected the progress towards a just transition. This would allow businesses to plan and adapt effectively. A small number of organisations also commented that the regulation surrounding both the weight and length dimensions of zero emission vehicles must be reviewed.

5.1.4 Issues for Small and Micro Businesses

Several organisations noted that there was scope for greater focus on the costs and logistical challenges faced by small and micro businesses when transitioning to zero emission vehicles. This included the need to consider:

• What pathways would be available for small and independent operators in the HDV sector to engage with private finance models to support high upfront costs of zero emission vehicles and infrastructure;
• Clearer guidance on how businesses in general (but particularly small and medium-sized enterprises(SMEs)) can access funding and/or support for transitioning to zero emission vehicles and infrastructure;
• More detailed strategies and financial mechanisms to support SMEs in accessing affordable financing and overcoming technological uncertainties; and
• More robust support for early adopters:

“While the draft Plan provides useful guidance on decarbonisation, there is a lack of focus on smaller businesses and non-transport organisations, particularly those in the public and social enterprise sectors, that rely on transport for workforce mobility or delivering services. Many of these organisations may not have the resources to navigate the transition effectively.” (Other Third Sector Organisation)

Other more practical issues were also highlighted, including the need for more consideration of how smaller businesses could either share charging facilities with each other or with larger organisations. SMEs (and some larger businesses and organisations) could use cargo e-bikes for some or all of their transport needs, it was suggested, and this could be included in plans.

Comments were also made that the take up of incentive packages was likely to be limited. For example, by only those organisations with the buying power to negotiate good deals, or where affordability was less of a concern. Impacts on smaller businesses was again an area which could feature more in this regard.

The Just Transition Commission suggested that different business ownership models needed to be considered, and more detail provided on how SMEs would be supported. They noted that some sectors of the transport system were more consolidated, while others were highly fragmented and complex. There was concern that SMEs may struggle to deliver change, and that specific interventions may be required.

Other non-transport organisations also suggested that the Plan overlooked many businesses that were not in the transport sector. They noted that some businesses rely heavily upon transport for their operation, or where business related travel was a feature. It was suggested this needed greater consideration. Similarly, it was felt that greater recognition was needed of community groups who provide or support travel and transport.

5.1.5 Rural and Island Communities

Specifically in relation to businesses in rural and island communities, it was noted that the Plan could benefit from more tailored solutions for these areas. This might include:

• Greater focus on rural and island-specific business needs, particularly in sectors like tourism, aquaculture, agriculture, and logistics that are heavily reliant on transport;
• Specific support for vehicles that are crucial for supplying these communities;
• Consideration of the fact that electric bus fleets operate primarily in cities, where higher patronage leads to healthier profit margins and LEZ is a driver (with discussion of decarbonisation of buses in more rural areas not fully considered within the Plan);
• Discussion of the challenges of accessing charging infrastructure in rural areas and their suitability for charging larger commercial vehicles;
• More emphasis on regional variations in skills demand and infrastructure needs; and
• ‘Range anxiety’ as a contributor to how EV drivers use their vehicles and the type of journeys they make, especially in rural areas:

“It will be easier for urban areas to transition smoothly, not so much for rural areas and so continued reliance on vehicles that still use fossil fuels needs to be considered. As stated, EV infrastructure needs to be enhanced across the rural regions so that businesses can recharge their electric vehicle fleet confidently.” (Other Third Sector Organisation)

There was also some concern that one potential downside of the just transition plans was that operators may sell or reassign older more polluting vehicles to suburban and rural areas. They would, therefore, not benefit from cleaner technologies in the same way as urban communities.

Respondents representing rural areas also stressed that the challenges may be felt most acutely by those businesses that had a heavy reliance on transport for goods and services. The impacts on the rural economy needed to be well-considered and accompanied by investment and resources to ensure a just transition for rural economies. Others commented more generally that initiatives and interventions should be tailored to meet the needs of different types of areas and different communities of interest.

Several respondents ultimately encouraged more guidance on how plans should be implemented to help businesses to realise just transition ambitions.

5.1.6 Impacts on Employees

A small number of organisations focussed on the impacts of the Plan on employees within businesses, including that:

• Businesses with employees without off-street parking may face higher costs, due to it being more expensive to run an electric vehicle on the public charging network than on a domestic tariff;
• Such businesses may have to contend with resistance to using these vehicles from staff finding public charging less convenient than using conventional fuelling infrastructure; and
• Businesses should look to ensure there is long term job security for young people entering work, with a suggestion that the Plan lacks reflection in relation to listening to young people’s needs.

5.1.7 Feedback from Individuals

Feedback from individuals focused broadly on the financial implications of the approach set out in the Plan. This included:

• The cost of the proposals to the taxpayer and potential for wasted money; and
• How to ensure growth of the economy as a result of the proposals.

A small number of comments also focussed on timescales for implementation (which were seen as ambitious). Other individuals also commented on the limited applicability of the Plan to niche or smaller businesses.

5.2 Just Transition Planning

Note: additional respondents answered ‘don’t know’ so percentages may not add up to 100 %

Two thirds of respondents who answered this question agreed that a just transition for the transport sector was important (66%, n=45). However, declining proportions agreed that it was important for their own organisation (53%, n=35), that it was happening in their organisation (46%, n=30) , and that their organisation needed more support for transition planning (38%, n=24).

The chart also illustrates the low numbers who disagreed with each statement or who indicated they neither agreed nor disagreed. A total of 15% disagreed that a just transition sector for the transport sector was important (n=10), 18% disagreed that just transition planning was important for their own organisation (n=12); 18% that it was happening in their organisations (n=12) and 14% disagreed their organisation needed more support for transition planning (n=9). The figures neither agreeing nor disagreeing with these statements were 9% (n=6); 14% (n=9); 18% (n=12) and 24% (n=15) respectively.

At this question, respondents were also asked to outline just transition planning in their own organisation, and to highlight whether their sector or organisation was doing something others could learn from.

Very few substantive comments were received from individuals. Among those who did respond, the main sentiments were that just transition planning was either not necessary, was not a priority for businesses, was not viable or was not likely to be realised unless accompanied by regulations to enforce change. A very small number of organisational respondents echoed these views.

5.2.1 Existing Positive Actions

The majority of organisations highlighted the positive steps they were already taking, including:

• Electrification and decarbonising of fleets, and modal shift (e.g. greater use of rail freight);
• Exploring low-carbon fuels and the potential for synthetic fuels (produced from renewable sources which can be used in existing ICE vehicles), and advocating for a technology-neutral approach to decarbonisation;
• Ensuring that just transitions are at the heart of business practices. This included procurement and supply chain decisions, as well as local actions plans, strategic documents, and target setting exercises (including local authority Climate Action Plans, Net Zero Carbon Route Maps, Regional Transport Strategies, Local Outcome Improvement Plans, Local Development Plans, Adaptation Actions Plans, Sustainable Development and Climate Change Strategies, Mobility Strategy Objectives, Actions, and local Equalities Impact Assessments);
• Growing the public EV charging network by installing charging infrastructure, and creating shared charging opportunities by making charging available to other businesses;
• Implementing measures to reduce emissions from manufacturing processes, including using 100% carbon-free energy;
• Incentivising staff/volunteers to use public transport for work related and leisure travel, and working to provide affordable and accessible EVs to service users, customers and employees; and
• Increasing the level of renewable electricity being provided.

Others again mentioned the need for culture change away from private vehicle dependency, which was something they were pursuing, but remained a challenge without a reliable public transport infrastructure to support change.

5.2.2 Future Planning

Respondents highlighted examples of positive or innovative practice which they felt could be used to inform future planning, including:

• Learning from the experience of the Scottish Offshore Wind Energy Council (SOWEC) and their work on the Strategic Investment Assessment (SIA) and Strategic Investment Model (SIM) process, which helped to develop the strategic investment prospectus for Offshore Wind in Scotland, promoting collaboration across public and private sector investors, whilst encouraging and guiding private investment to where it was required;
• Learning from recent hydrogen related transport projects over a number of years across road vehicles, ferries and aviation;
• Commissioning of a feasibility study relating to the transition of segments of the HGV fleet in the North East of Scotland to BEV HGVs and the associated infrastructure requirements;
• Engagement of PhD students undertaking research into how a just transition can be ensured, with learning to influence the development of future strategies and plans taken forward;
• Greater support and strategic guidance to local authorities from the Scottish Government on developing tenders for public charging infrastructure;
• Initiatives to boost access to home charging for employees (i.e. not all employees have suitable charging infrastructure or live close to any charging points and consideration must be given to, where possible, the fitment of home charging infrastructure);
• Investment in education and knowledge based programmes, assisting HGV users to better understand the reasons for the transition, as well as how to start to make the transition;
• Funding of initiatives (such as Culture for Climate Scotland) and associated projects (such as the Transforming Audience Travel Through Art project and networking events such as Green Tease that have focused on the place based just transition); and
• Production of employee, service user and customer guides and resources in relation to sustainable travel.

As with previous questions, organisations again encouraged cross-sector working to help businesses reach their goals. This included setting up forums to share learning and insights across local areas.

Several organisations again argued for ongoing financial support to help them implement required changes (e.g. grant funding agreements, creation of centrally based investment vehicles to assist all local authorities, and financial support for new vehicle and infrastructure purchase). Assistance with identifying the areas where organisations would struggle and collaborative work to find solutions to ‘gaps’ (in capacity and resource) was encouraged:

“[It] is unlikely that a number of national targets will be achieved in the region within the existing resources and powers available to the partners. Where such gaps are identified, we ask that ongoing engagement with the Scottish Government and its officials be established to work together to help each other achieve these critical national aspirations.” (Public Sector Transport Organisation)

Additional support was also encouraged. In particular, it was suggested that locally tailored strategic guidance would be helpful. More specifically, the insurance industry was identified as a sector where workforce training would be required to ensure understanding and appropriate underwriting of risks associated with the move to new vehicle types. It was also suggested that community-led planning should be adopted to find local solutions. Further, it was felt that the Scottish Government and Transport Scotland should take a greater role in influencing, inspiring and incentivising greater public and private sector collaboration and investment to develop the infrastructure and supply chains needed to deliver a just transition in the Scottish transport sector.

Many organisations (especially public sector organisations) had already embedded or were starting to embed just transition into their forward programmes. Organisations also acknowledged that in pursuing a just transition, they would: help to maximise accessibility to business, development, cultural, and tourist opportunities among communities; empower people to make sustainable choices; create clear structures and timeframes around which businesses could plan their investment and delivery; support local workforces; contribute to wider environmental targets; and achieve greater partnership working across different sectors. Others stressed the role of a just transition in supporting wider population health:

“We believe that a just transition within the transport sector should eradicate transport poverty and ensure equitable access to the transport system... This will contribute to improvements in population health, wellbeing, and a reduction in health inequalities… The just transition can address existing and avoid creating new inequalities, build a stronger democracy, empower people and communities to act and enable community ownership, enabling everyone in Scotland to thrive.” (Other Public Sector Organisation)

Overall, responses to this question evidenced a shared commitment to embracing the environmental, economic and social benefits of a just transition with several examples given of work already undertaken to embed the Plan.

5.3 Supporting Transition of Vehicles to Zero Emissions Alternatives

Overall, 54 (44%) respondents provided a response at this question and ranked all, most or some of the options provided. A further two respondents (who submitted their response via email/post) selected the options they supported but did not rank these, while one respondent (who again responded via email/post) ranked some of the responses and selected others without ranking them.

Based on the inverted mean average ranking score, preferences were ordered as shown in the chart below, where the option with the highest score represents the most important (excluding ‘other’ as this represented a range of feedback). The scores for each answer options were ‘Reliable infrastructure for vehicles (such as fuel or charging networks)’ – 5.48; ‘Cost of replacement vehicles needs to come down’ – 5.24; ‘Access to low-cost finance’ – 4.37; ‘Technology for replacing vehicles needs to be proven’ – 3.79; ‘Certainty about availability of parts and maintenance services’ – 3.58 and ‘Mechanisms to work with other businesses on fleet transition’ – 2.98.

5.3.1 Feedback from Individuals

The main substantive feedback among the few individuals who answered this question was that:

• Emissions involved in the manufacture of alternative forms of transport must be taken into account, as well as the cost and emissions involved in the decommissioning of existing vehicles;
• Society must move away from the expectation that everybody should be able to own a private vehicle, to maximise use of active travel and public transport options; and
• The Plan should prioritise how to improve businesses’ use of no transport, active transport and public transport options.

5.3.2 Feedback from Organisations

Organisational respondents again stressed that their priorities were mainly cost related, including the need for:

• Additional resource to install EV infrastructure, expand grid capacity and replace fossil fuel powered vehicles in existing fleets;
• Reducing costs of replacement vehicles;
• Passing on the lower costs of renewably generated electricity to users, to bolster the financial case for accelerating fleet decarbonisation;
• Access to ongoing funding to cover the range of local service vehicles, community transport, DRT and school transport;
• Consistent and long-term government policy around zero emission vehicle finance and incentives;
• Access to low-cost finance;
• Support for organisations with fewer resources (such as small businesses, local authorities, and social enterprises) in implementing fleet transitions, through grants, subsidies, and simplified processes; and
• Clarifying ‘end-of-life value’ for electric HGVs and addressing ‘investment risk’ (i.e. greater clarity is needed on battery reuse, recycling, and vehicle resale value to support long-term investment decisions):

“Undoubtably, the cost of electric vehicles is one of, if not the largest concern for the transition to electric vehicles. Whist we are seeing some reductions from manufacturers, prices are not lowering quickly enough, lower pricing will allow more vehicles to be brought into the fleet at a quicker pace. Continued support from government for business is critical to the success of any transition.” (Local Government Organisation)

Other priorities, which were disparate, and mentioned by just one respondent each, included:

• Increased access to and availability of zero emissions rentals across Scotland;
• Delivering on the Zero Emission Truck Taskforce (ZETT) HGV Decarbonisation Pathway for Scotland;
• Proving/evidencing the technology needed for replacing vehicles;
• Introduction of mechanisms to work with other businesses on fleet transition;
• Informing infrastructure planning through research and emissions insights;
• Real-world testing/trails and operational experience of electric vehicles and sharing of insights across the sector;
• Information, demonstrations and support for cargo bike options;
• Addressing structural barriers to decarbonisation;
• Building business confidence in the transition to net zero;
• Establishing a publicly-owned ROSCO (a rolling stock leasing company);
• Creating certainty about availability of parts and maintenance services;
• A review of weights and dimensions for zero emission heavy trucks; and
• Education and growth of technically capable workforce through enhanced STEM streaming (including training of the young workforce).

A few organisations again highlighted the importance of reliable infrastructure for charging vehicles. Meanwhile, some simply noted that all of the options presented in the consultation paper were a priority and all were interlinked.