Expert Blog

Seizing the opportunity of alternative fuels


Early 2018 is a time for looking ahead – and, for fleets, there is much looking ahead to be done. The Government will soon introduce the tax increases that were announced for diesel cars in the Autumn Budget. Local authorities will follow London by revealing their own plans for reducing the air pollution caused by road vehicles. And, all the time, manufacturers will be producing more cars, vans and trucks powered by electricity and other clean alternatives.

In fact, for these reasons and many more, 2018 is already shaping up to be a landmark year. It’s a year in which many fleets will ask: are the fuels that we have been using for decades – petrol and diesel – the fuels that we will use in the decades ahead? Or is now the time to switch to alternatively-fuelled vehicles (AFVs)?

Futureproofing your fleet

Hitachi Capital UK pre-empted these questions by publishing its Future of Fuel report towards the end of last year. This report contains answers; not just about the different types of AFV, their suitability for particular jobs, and the legislation that’s being introduced around them – but also, crucially, about how fleets are adapting to this new landscape.

We surveyed 149 fleet managers to discover what they are thinking and doing about AFVs. Turns out, they are already thinking and doing quite a lot. 62% of fleets now contain AFVs of some sort, and that proportion is only going to rise over time. After all, 82% of our respondents said that it is important that fleets move to alternative fuels. 42% intend to put that sentiment into practice by acquiring new AFVs within the next two years.

These fleet professionals understand that AFVs won’t just cut emissions – they could also cut costs. Our research finds that electricity is about 15 pence per mile cheaper than either petrol or diesel for vans, and about 38 pence per mile cheaper for HGVs. This means that, were every commercial vehicle in the country to turn electric, the total fuel savings could amount to £14 billion. And that’s before we consider the savings that would be made elsewhere, such as the avoidance of any charges within London’s forthcoming Ultra-Low Emission Zone.

The pros and cons of going green

Which prompts the question: why aren’t all fleets going all-AFV tomorrow? Our survey answers this too. Respondents identified various obstacles that are standing in the way of the way of them turning green. The most frequently-cited were upfront costs and infrastructure.

These problems are worse for some alternative fuels than for others. Take infrastructure. There are now over 14,000 public charge points for electric vehicles in the UK, but the combined number of public fuelling stations for biodiesel, Compressed Natural Gas (CNG) and Liquified Natural Gas (LNG) is much smaller. Until that difference is rectified – and, it should be said, private companies are currently working to rectify it – those vehicles will not be as popular as they could be.

This is a shame. As our report makes clear, different fuels are good for different situations. Electricity might be perfect for a van that needs to make numerous short journeys throughout the day, and can then be recharged overnight. But CNG or LNG could work better for a large HGV operator with the resources to either install their own filling station, or partner with other companies to have one built locally.

Electricity isn't the only alternative fuel

So that businesses can make these choices for themselves, policymakers need to demonstrate more pluralism when it comes to alternative fuels. The extra £400 million that was announced for electric charging infrastructure in the Autumn Budget was extremely satisfying, as was the extension of the Plug-In Car Grant. But, as we put it in the Future of Fuel report, ‘electricity isn’t the only alternative fuel’. Some state investment in natural gas and biodiesel would not go amiss.

We’re not the only ones who would like to see further action from politicians. According to our survey, 73% of fleet professionals believe that the Government should do more to encourage the adoption of AFVs, in order to meet its own emissions targets.

It’s clear from our findings that, in the case of AFVs, fleets are not scared of change. In fact, they welcome it – and who can blame them? This is a wonderful opportunity to help save the environment while also saving money. Bring on the rest of 2018!

Hitachi Capital UK's Future of Fuel Report (2Mb)


Note: This article first appeared in the January 2018 edition of UtilityFleet magazine, where Jon detailed Hitachi Capital Vehicle Solutions' findings on how fleets are using alternatively-fuelled vehicles.

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