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Government outlines plans to decarbonise road freight

£200 million funding boost kickstarts week-long initiative championing the freight and logistics industry.

The funding takes forward the next stage of the Government’s Zero Emission Road Freight Demonstrator (ZERFD) programme.

Delivered through innovation agency Innovate UK, the £200 million will be invested across four projects which are expected to deliver up to 370 zero emission HGVs and around 57 refuelling and electric charging sites. The four projects set to benefit from the funding include:

• Gridserve, who will use their Project Electric Freightway to demonstrate up to 140 battery electric HGVs that will be provided by DAF and Volvo, alongside up to 220 chargers, 70% of which will be open-access.

• Project Zero Emission North (ZEN) Freight, which will demonstrate up to 70 battery electric and 30 hydrogen fuel HGVs. Eddie Stobart and Royal Mail are two of the operators participating in this scheme.

• Hydrogen Aggregated Logistics (HyHAUL), led by Protium, which will deploy around 30 hydrogen fuel cell HGVs onto the M4. The HGV fleet will be serviced by one fixed hydrogen refuelling station (HRS) and mobile refuelling in two other locations. The project has longer term ambitions to implement two additional permanent hydrogen refuelling stations in Magor and Bridgend, alongside additional hydrogen conversion projects along the M4.

• Voltempo’s eFREIGHT 2030 project in Birmingham, which is hoping to create up to 200 new jobs by 2030 and provide Birmingham with one of the UK’s first electric vehicle charging hubs dedicated to HGVs.

Michael Boxwell, Project Director of eFREIGHT 2030, said: “eFREIGHT 2030 sets us on a journey to net zero within the heavy road freight industry. DfT support kick-starts the transformation, enabling us to create the charging infrastructure and bring in electric HGVs simultaneously.

“By early 2026, we will have eleven fleets deploying electric HGVs, and a nationwide HGV charging network using British built chargers. Each charge hub will provide at least six charge bays and 1,000kW charging. This demonstration programme combined with world-class infrastructure will give fleet operators confidence they can deploy electric HGVs at scale.”

Richard Smith, Managing Director of the RHA, said: “We strongly welcome today’s announcement from the Government on the zero emission HGV and infrastructure demonstrator programme.

“The £200 million commitment Ministers are putting into this demonstrator significantly helps to de-risk the transition to Net Zero. The real-world demonstrators will answer many of the practical questions operators have and, in turn, give our members the confidence to invest in the zero emission lorries needed to drive down carbon emissions from our sector.”

The measures have been announced during ‘Freight Week’, a week-long initiative from the Government, including Ministers visiting multiple freight stakeholders, to understand how the sector can continue to drive innovation and play a crucial role in creating new jobs, growing the economy and helping the UK get closer to net zero.

Road Minister Richard Holden said: “Freight and logistics are the beating heart of our economy and it is only right that we celebrate the sector so that it gets the recognition and support it deserves.

“From boosting zero emission tech across freight to attracting the future generation of talent to the industry, we are working hard to drive innovation, create jobs and grow the economy by building a brighter, more innovative future for one of our most crucial industries.” 

An additional £2.4 million of government funding has been allocated to the Freight Innovation Fund (FIF). As part of the fund, the FIF Accelerator will help up to 10 SMEs develop new ways to make freight greener, more efficient, and more resilient.

The £7 million, three-year Freight Innovation Fund aims to scale up and roll out innovative technology across the industry to decarbonise freight. It is at the heart of the Future of Freight Plan, the cross-modal and cross-Government vision to help the industry improve planning, boost innovation in data and technology, and facilitate the transition to net zero.  

The first round of the Freight Innovation Fund supported a series of groundbreaking projects, from using drones to deliver mail and services to the Orkney Islands, implementing AI and data to reduce costs, to deploying zero-emission technology to track and move freight across London. 

Nicola Yates OBE, Chief Executive Officer at Connected Places Catapult said: “Freight is a crucial sector for the UK and contributes around £127 billion to the economy, but it is not without its challenges. Reducing the sector’s carbon footprint, cutting journey times and easing traffic congestion are key areas of focus, alongside the development of efficient and better-connected logistics hubs.

“We are proud to be continuing our work the Department for Transport as we open applications for the second cohort of the Freight Innovation Fund Accelerator programme. The companies chosen will benefit from access to funding and expert support to develop their technologies and innovations that promise to make the freight sector grow, become greener and work smarter.”

Freight Week will also see the launch of two Calls for Evidence to continue exploring new ways for the freight industry to decarbonise and become more efficient.

The first is the Call for Evidence to inform and support the development of the zero emission HGV and coach infrastructure strategy which is due to be published in 2024. This will ensure the delivery of the infrastructure required to meet the 2035 and 2040 phase out dates for non-zero emission HGVs.

The second is the Call for Evidence on volumetric concrete mixers (VCMs) which will consider whether a temporary weight allowance should remain, be removed or amended for the vehicles beyond the current deadline of 2028. The Call for Evidence will consider the best options to reduce waste, limit costs and ensure fair competition while taking into account how to continue ensuring road safety.

The Government said it is also considering how to boost freight across a variety of modes. The Mode Shift Revenue Support and Waterborne Freight Grant will be reviewed to explore how to continue helping the sector decarbonise by shifting freight from road to rail or water through the two schemes.

October also marks the start of Year 2 of Generation Logistics, backed by £645,000 in Government funding across two years, which is being led by CILT and Logistics UK.

Generation Logistics will now focus on raising awareness of the logistics sector and its career opportunities specifically among young people in schools and colleges, in an effort to boost recruitment and retention of a more skilled and diverse workforce. 

Kate Jennings, Director of Policy at Logistics UK: “Logistics underpins every sector of the UK economy and it is positive to see its importance being championed during Freight Week.

“We welcome government’s recognition of the how important freight is for creating new jobs, growing the economy and achieving net zero. It is encouraging to see government making long-awaited progress on its promises to help decarbonise our sector, including announcing the outcome of the Zero Emission HGV and Infrastructure competition (ZERFD). However ultimately, we need this progress to be faster, and support actioned promptly if we are to meet impending decarbonisation deadlines.

“We very much welcome the Call for Evidence to inform and support the development of the zero emission HGV and coach infrastructure strategy which is due to be published in 2024. We have continued to strongly advocate to government that this infrastructure strategy receives adequate input from industry to make sure, when it is eventually rolled out, it is in the right places to serve the sector in the most efficient manner possible.

“Similarly, Logistics UK has been calling for a review into the Mode Shift Revenue Support (MSRS) scheme which currently disproportionately benefits the rail sector; 2022 research indicated that 95% of the funding from this scheme had been allocated to rail freight. While rail provides strong opportunities for modal shift and must be supported, action must be taken to prevent disadvantaging water freight, which also brings many social and economic benefits. We therefore look forward to inputting into this review.”

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