A cool change is coming and business needs to get ready

The Government announced in it's Spring Budget this month that it would publish a call for evidence on the use of red diesel, especially in urban areas, suggesting the refrigerated logistics industry needs to brace for change.

The case for decisive action on diesel pollution gets stronger by the day. The main reason is, of course, the toll on public health. Every year, emissions of nitrogen oxides (NOx) and particulate matter (PM) kill around 40,000 Britons, cause the loss of 6 million working days, and cost the economy up to £20 billion per year – equal to more than 16 per cent of the NHS budget.

But pollution also threatens the health of companies.

While many companies are successfully adopting a variety of new technologies, others still have work to do – particularly operators of refrigerated vehicles. The logistics industry continues to rely on decades-old diesel cooling technology that remains essentially unregulated and highly polluting.

Chancellor Philip Hammond announced in last week’s Budget that the government will publish a call for evidence on the use of red diesel in order to ‘improve understanding of eligible industries and current use’. The statement goes on to say ‘evidence is particularly sought on the use of red diesel in urban areas’. So now, unlike the air in our major cities, the regulatory direction travel is clear: the days of urban transport refrigeration powered by red diesel – or indeed any kind of diesel – are numbered.

That’s because the consultation will show that the most polluting engines on the road are not car or truck propulsion engines, but the secondary diesel engines used to provide cooling on refrigerated trucks and trailers. Analysis has shown that these independent transport refrigeration units (TRUs) can emit six times as much NOx and 29 times as much PM as the Euro VI propulsion engine dragging them around. Compared to the official emissions limits of a modern Euro 6 diesel car, the TRU emits up to 93 times more NOx and 165 times more PM.  

These disproportionately high emissions evaded the radar for many years, but have recently begun to be recognised by policymakers. TRUs were mentioned in both Defra’s Clean Air Zone Framework published last autumn, and the Clean Air Bill, which reaches second reading imminently. Both make clear that TRUs will be covered by the new national network of clean air zones. Defra talks of ‘encouraging the upgrade of refrigeration units on cold chain vehicles to the least polluting options’, while the Clean Air Bill calls for TRU use to be restricted in ‘specified urban areas’. 

TRUs are vulnerable to regulation not only because they are highly polluting, but because they are few in number. If the 84,000-strong UK TRU fleet were replaced with zero-emission alternatives, allowing for the total fleet mix it would equate to taking approximately 4 million Euro 6 diesel cars off the road. Come election time, businesses don’t have a vote, private motorists generally do.

TRUs may be relatively scarce, but they are hardly low profile. Each year in Britain they transport food worth £52 billion, often operating in residential areas or busy high streets. It can only be a matter of time before people realise that, while they are about to be penalised for driving a car, TRUs are operating on our streets unhindered by regulation or penalty.

Imagine the public fury when people realise that independent TRUs are also entitled to run on half-price ‘red’ diesel. So not only do they spew much more pollution than cars – even old cars –  but taxpayers subsidise them to do so!

TRUs are allowed to run on red diesel because they are classed – bizarrely – as ‘Non-Road Mobile Machinery’, even though they operate on a truck or trailer. But there is no conceivable economic justification for continuing to subsidise such a mature and highly polluting technology against new zero-emission competitors. Britain is one of only a handful of countries in the EU that still permits it. This loophole is unlikely to survive the intensified scrutiny the introduction of Clean Air Zones is likely to bring.

The TRU red diesel subsidy must also be addressed because it prevents new clean cold technologies from taking off in the UK. The government has invested tens of millions of pounds into supporting clean cold technologies through Innovate UK and the Research Councils and is unlikely to want to squander it by maintaining perverse fossil fuel subsidies that stop these innovations being taken up in their home market.

Air pollution regulations will soon be toughened to meet the scale of the challenge, and refrigerated transport will not escape. At some point operators will be forced to act by the combination of rising public awareness and regulatory pressure. Companies that want to demonstrate they are responsible corporate citizens would do well to embrace this opportunity early, not as the laggard who did the right thing only when compelled by regulation.

Happily, cold logistics operators might also find that doing the right thing is also good for business. Some of the newly designed zero-emission TRUs materially outperform conventional diesel systems delivering additional benefits. A win for business, customers, the environment and public health – now wouldn’t that be cool!

Professor Toby Peters, Visiting Professor in Power and Cold Economy

Professor Peters is part of our Birmingham Heroes campaign on dealing with the Energy Crisis