House of Commons - Environmental Audit

Select Committee on Environmental Audit Ninth Report

Buses, trains, and water freight

Increasing the number of bus passengers and low carbon buses

91. Because of the high volumes of passengers which they can carry, buses are much more carbon efficient than cars. Buses can therefore make a significant contribution to carbon reductions, if they can attract passengers out of their cars—"modal shift" as it is known in the jargon. But CCP 2006 makes no mention of seeking to achieve modal shift from cars to buses. The danger with this is that to achieve substantial modal shift it may not be enough simply to improve bus services in their own right; it may also be necessary to implement measures—the London Congestion Charge being an example—which discriminate in favour of buses relative to cars. The Department should explicitly adopt modal shift from cars to buses as an environmental objective, and set itself a target of emissions savings to be gained as a result.

92. The Government's failure to explicitly endorse modal shift as a policy would not matter so much if bus services were performing well in their own right. But—with London as the major exception—this is not the case. In December 2005 the National Audit Office and the Audit Commission issued a joint report, which found that although bus use in London had risen by over 30% since 2000, it had fallen in every other region of the country (although some individual authorities had had success in raising passenger numbers, such as Brighton, York, and Cambridge).[137] Following up this report, the Public Accounts Committee (PAC) concluded that achieving the factors responsible for a successful bus service was "more complex outside London, where bus services are largely provided commercially and are unregulated".[138] While Transport for London is free to specify the routes to be served and the types of vehicles to run on them, to subsidise routes that would not otherwise be commercially attractive to private bus operators, and to ensure that bus and light rail operators run complementary rather than competitive services, local transport authorities outside London have much less freedom.[139]

93. The Department sought to address this problem in 2000, when it enabled local transport authorities to gain a greater degree of control over local services by entering Quality Partnerships with bus operators, and in limited circumstances to achieve London-like powers by entering into a Quality Contract. However, the legal requirements to be met before a local transport authority could issue a Quality Contract were set so high that none was issued. The Department sought to lessen the obstacles to arranging Quality Contracts somewhat in its 2004 White Paper. However, this has not been a success: to date, not a single local transport authority has established a Quality Contract. The Transport Committee recently reported that:

The Secretary of State has now acknowledged that the bus Quality Contract scheme has failed. It must be discontinued. We recommend that the Department grants the additional powers to local authorities to enable them to have more effective control over local public transport, and buses in particular.[140]

94. Given that the Climate Change Programme 2006 contains a mere 79 words on the role which buses can play in reducing carbon emissions, we are somewhat surprised that 31 of these words are devoted to the Department's policy on Quality Contracts. Such prominence would naturally lead the reader to think that these were a very major contribution to DfT's climate change policy. But not only has there never been a single Quality Contract established, the previous Secretary of State seemed to admit it was a failed policy. Something much more effective in enabling authorities throughout England to apply the kind of powers currently enjoyed only by Transport for London should be introduced as an urgent priority. The current deregulated system has been heavily criticised by both the Transport Committee and the Public Accounts Committee, in terms of leading to administrative muddle and poor value for money, a lack of local control and accountability, and an undermining of buses as providing a public service. The fact that the arrangements outside London are also undermining climate change policy should be the final straw for the deregulated system in its current form.

95. In this context we were extremely heartened to follow the recent comments of the Transport Minister, Gillian Merron MP, before the Transport Committee:

Gillian Merron: […] Over the coming months I would like to assure the Committee that we intend to take a long, hard look at the issues so that we can come to a decision about what needs to be done to reverse that trend [of declining bus use outside London]. No decisions have yet been made and it would be premature to do so without the evidence. […] First of all, we are gathering evidence. […] In parallel, we have also asked our officials to carry out more analysis of the legislative, funding and practical issues and, as I said, Chairman, we intend in the autumn to take decisions about the future of buses. This will allow us […] time, if we decide it is necessary, to introduce legislation next year.[141]

We warmly welcome the recent statement by Ms Merron to the Transport Committee, as to the Department's examination both of the evidence behind the differing success of different bus services, and of the legislative and funding options which could be employed in shaping the future of bus policy. This hopefully indicates a very positive move on the part of DfT, and we look forward to developments under the leadership of the new Secretary of State.

96. After modal shift, the other aspect of climate change policy which relates to buses is that of reducing the average emissions of buses themselves. As part of the 2002 Powering Future Vehicles Strategy, the Department set a target of seeing 600 low carbon buses entering service each year by 2012. Much as with the target for low carbon cars, progress has so far been very slow: according to the Energy Saving Trust, only 23 were sold in 2005.[142] Even London, by far the best performing transport authority in terms of bus services, is only trialling three hydrogen fuel cell buses (as part of a major European pilot)[143] and six diesel-electric hybrids. This contrasts with New York City, for instance, which will shortly be running 800 hybrid buses,[144] and Stockholm, which will shortly have almost 400 bioethanol buses.[145]

97. In its memo, the Energy Saving Trust essentially attributed this slow progress to three things: (i) the higher capital cost of low carbon buses (especially hydrogen fuel cell buses); (ii) the Bus Service Operators Grant (BSOG), which by subsidising fuel costs effectively works to offset the advantage in running costs that low carbon buses would otherwise enjoy; and (iii) the closure of DfT's Low Carbon Bus Grant programme, pending State Aid approval. Since then the Transport Minister announced that the Low Carbon Bus Grant would not be reinstated.

98. We are surprised that the Department does not intend to reinstate the Low Carbon Bus Grant programme. While in the case of the low carbon car grants there may have been genuine grounds for concern that these would merely go to people who were likely to buy such vehicles anyway, the same cannot surely be said for buses. Firstly, buyers of low carbon cars enjoy other financial incentives, such as reduced fuel costs: this does not apply in the same way to bus operators, because their fuel costs are already heavily subsidised. Secondly, potential buyers of low carbon cars are likely to be motivated by the desire to make a high profile "ethical purchase", and may be prepared to pay a certain premium as a result: this is less likely to apply to bus operators, since these are private companies and must justify business decisions to their shareholders. We are left asking: just how is the Department going to incentivise bus operators to introduce low carbon vehicles on a large scale? This must be explicitly addressed as part of the review of the Powering Future Vehicles Strategy.

99. One aspect of low carbon bus policy the Department might prioritise is the introduction of high blend biofuels and biogas buses. We were very impressed on our visit to Sweden with the significant progress made by local and regional transport authorities, such as in Stockholm and Malmo, in converting their bus fleets from conventional diesel. These bus fleets lend themselves to conversion to new fuels, in advance of the general motoring market, both in that they are operated by a single authority (having the control to systematically convert their fleets, and the resources to fund the installation of new refuelling stations) and because they travel in circuits around a single area (meaning they only need a small number of refuelling stations to serve them all). This in turn means that progress can be made more swiftly than among private motorists or long distance hauliers, where growth in the take up of new fuels could be delayed pending the building of an extensive national or international refuelling infrastructure. A further advantage from these Swedish examples, from an energy security perspective, is that they are aiming to be as self-sufficient in the production of bus fleet fuel as possible. While Sweden enjoys a particular advantage in this respect due to its forestry resources, the Swedish bus manufacturers, Scania, discussed the significant potential for fuelling buses from biobutanol produced from a plant the size of that being built in Norfolk by British Sugar, while in Malmo we were told of the potential for large cities to become self-sufficient in biogas buses. The example of Sweden's local bus fleets demonstrates the progress that can be made today in using sustainably produced biofuels to meet a significant element of society's transport needs. By acting early, Sweden appears also to be handing its bus manufacturing industry a potential competitive advantage. The Department must accelerate progress in the use of biofuels and biogas buses in England, beginning by identifying and tackling the current barriers to take up.

The railways: high speed rail, local services, and low carbon power

100. The Director General of the Railway Forum told us that: "The railways have come through quite a dramatic period […] where the issues, of course, of performance, industry structure and safety have loomed very large indeed, and to be quite honest sustainable development issues have not received the priority which I think many of us would like to have seen." However, he believed that "the industry is significantly more stable than it was a few years ago and the sustainable development debate and activity is now beginning to emerge".[146] Indeed, in 2004 rail journeys exceeded one billion for the first time since the pre-Beeching era, reliability is now accepted as having returned to levels preceding the Hatfield crash of 2000, and in March this year DfT announced that it was working on a major strategy that will "set out the future shape of rail for the longer term—over the next 20 to 30 years".[147] With a new sense of stability, and with the Department's announcement of work on a long term strategy, the time is right for the rail industry to incorporate climate change policy into its major priorities. In particular, the advantages of rail over road and air travel in terms of carbon emissions must be fully taken into account in, and add weight towards, any consideration of investment to expand capacity the network. This must apply equally to consideration of whether to cut or retain existing local services.

101. We heard that capacity is, indeed, the main issue. Rail travel is very popular: since 1996-97, rail passenger kilometres have grown by 30%, and rail freight is up by 36%.[148] Demand for rail freight, in particular, outstrips the capacity of the network to supply it.[149] Furthermore, as the Railway Forum told us: "The network is tiny in relation to roads and it is a very simple calculation that every one per cent shift from road equals a ten per cent increase in demand on the railway network."[150] This speaks of the need for major projects to expand the network.

102. The Eddington Review was tasked with considering the economic case for high speed rail, among other issues, but we would argue that the environmental case is two-fold. Firstly, new high speed links between London and Scotland would free up capacity on existing lines, and help to increase modal shift from road to rail. Secondly, high speed rail would itself increase modal shift from air to rail: the experience of other such services, such as the Eurostar between London and Paris/Brussels, the Paris-Lyon TGV, or the Paris-Brussels Thalys, shows that high speed rail wins market share from short-haul air services. According to the Commission for Integrated Transport: "Domestic aircraft have emissions of 200-300 gCO₂/passenger km compared to around 40gCO₂/passenger km for high-speed rail." Moreover: "The CO₂ emissions from aircraft landing and take-off are the same irrespective of journey distance and this increases the emissions per passenger km for shorter aircraft trips, i.e. from London to Leeds and Manchester."[151] Sustrans expressed some scepticism towards these figures, and cautioned that high speed rail was likely to consume much more power and hence be less carbon efficient than conventional rail. The Secretary of State went some way to acknowledging that this was a concern: "One of the features that one needs to be aware of is that these high speed trains, if they travel at the kinds of speeds that are often discussed, use a lot of energy."[152] In the light of these discussions, we would support proposals for the construction of new high speed rail links, both for the role they would play in directly achieving modal shift from air to rail, and for leading to a freeing up of capacity on the existing network. At the same time, it is important that in taking forward any proposals for new high speed services, the Department looks to choose a design which is as energy efficient as possible.

103. High speed links are not the only form in which rail can play a major role in achieving reduced emissions through modal shift. In many ways, indeed, it is local services which do most to meet the need for journeys which would otherwise be made by car. As the TUC's memo stated:

Rail links can help to discourage medium distance car journeys thereby reducing harmful emissions. The presence of a dedicated rail service encourages business to invest in the local economy in a way, which is not the case if a town is served only by buses. Such investment can help to create employment opportunities, retail outlets and other leisure facilities thereby encouraging social development and economic regeneration. The creation of a vibrant local economy encourages people to work and shop locally thereby reducing the need to commute to work or travel to shops and other leisure facilities outside of the local area.[153]

The TUC warned that unless capacity was expanded, "the likelihood remains that the private train operators will resort to pricing passengers off the network thorough [sic] increased fares. This will inevitably lead to an increased use of the private car [… and] to a further increase in the emission of harmful greenhouse gases." The TUC further argued that provisions in the Railways Act 2005 had made it easier to close railway lines, and cautioned: "A cuts agenda on rail will be extremely detrimental to the Government securing and delivering their environmental objectives."[154] Transport 2000 also touched on this point in discussing the Department's recent

draft guidance on the consideration of rail closures. You might think that the idea of having a railway line is so that if oil prices suddenly doubled or doubled over a period of five to ten years the case for having a railway line might be rather stronger than it is at the moment. That is nowhere in that draft guidance and it is an example of what I would describe as the Department for Transport being environment blind, or at least blind to these kinds of issues.[155]

104. Local rail services are vital for creating sustainable communities. They help to boost long term economic prosperity while managing demand for car journeys, and hence carbon emissions. While we have not examined in detail the Department's legislation or consultations on possible line closures (or any train operating companies' proposals for service reductions), we cannot see the logic, at a time when we need to be accelerating the UK's carbon reduction efforts, in proposals to reduce local train services. All decisions on the future of individual local services must be subject to thorough and transparent assessment, which views them extremely negatively if they are estimated to lead to an individual rise in carbon emissions.

105. Another way in which modal shift from air to rail can be assisted is by ensuring the fare structure and booking process is as simple and transparent when buying a train ticket as when buying an air ticket. As things stand this is far from the case. The Transport Committee recently heavily criticised current practice within the rail industry:

The current system has had more than a decade to prove its worth, but in terms of value for money and user-friendliness it has proven to be an abject failure. Fares structures are chaotic and pricing absurd because they are determined by commercial considerations rather than considerations for the public good and the value for money of passengers and tax payers. This is not acceptable, and the current system is not fit for purpose.[156]

We also received evidence on the difficulties of booking through-tickets to Continental destinations, compared to the ease with which flights can be booked to the same cities.

^106.The Association of Train Operating Companies (ATOC) defended the industry by telling us: "I could go to the GNER website this afternoon and book you a fare between London and Edinburgh for £25 return by doing the same as going onto the British Airways website and booking in advance."[157] However, when we asked the House of Commons Library to research comparative rail and air fares, they told us: "There is very little that we can meaningfully conclude about the actual cost of air v rail even on specific routes. The large number of different [train] fares, availability of tickets, alternative routes, various ticket limitations, discounts, special offers and the large number of operators means that any comparison that is made—say the cost of travelling from London to Edinburgh - has extremely limited applicability".[158]

107. We second the Transport Committee's conclusion that the current ticketing structure of train operating companies is "not fit for purpose". In order to assist modal shift, the Department should take responsibility for ensuring rail fares and booking are simplified and made more transparent, and should also encourage the creation of user-friendly means of booking rail tickets to European destinations.

108. On the issue of reducing carbon emissions from trains themselves, it is clear that there is a keen debate within the industry as to the best way to move beyond the remaining fleet of diesel trains, centring around whether to complete the electrification of the network or to introduce diesel-electric hybrids, with a view towards developing hydrogen fuel cell engines. We have not looked at the merits of these different arguments. However, we would make the following points. We were told that a large part of the cost of electrifying lines was the need to contribute to upgrading of the National Grid, since trains—especially newer, heavier trains, with power-hungry features such as air conditioning—consume significant amounts of power. At the same time we heard that contractual arrangements prevent train operating companies from being able to specify that their electricity comes from renewable sources. Given that the railways are such important customers of power companies, the industry could make a significant contribution to expanding renewable energy generation in the UK. The Department should act to enable it to do so. At the same time, the current network could become more energy efficient. There are a number of trains fitted with regenerative braking, enabling them to generate some of their own power, but which are not currently using it; while a number of diesel trains continue to run beneath electrified wires. Now that service levels of the network have regained stability, the Department should look to addressing barriers to improved energy efficiency.

Water freight: missing the boat

109. More than 95% of freight by volume (around 75% by value) is moved into and out of Great Britain by shipping, while within the UK a quarter of all freight by volume is moved by water.[159] The industry group Sea and Water told us of the significant environmental benefits to be gained by increasing this proportion at the expense of road freight: according to their estimates, water transport emits up to 80% less carbon and 35% less nitrogen oxides (NOx) than road freight. In addition, while UK roads account for around 90 million tonnes of aggregates each year, the water "network" is naturally occurring.

110. Despite this, CCP 2006 did not make any mention of the potential contribution of modal shift from road to water. Sea and Water argued that the benefits and needs of water freight were often overlooked, and drew attention to what already appeared to be the lost opportunity of using waterways to carry waste from and deliver supplies to sites for the 2012 London Olympics.[160] Aside from arguing for extra financial support for water freight, and a road pricing system to ensure that road hauliers pay more of their external costs, Sea and Water called for simplified planning processes for the development of UK ports, and an identification of sites for interchanges between road, rail and water. We agree with Sea and Water that there are clear advantages in terms of carbon emissions of shifting freight from road to water, and the Department for Transport needs to do more to actively encourage this shift.

111. The remaining water transport issue we looked at was emissions from international shipping. There is no international agreement on how these emissions should be allocated to individual states. Thus they do not form part of any country's national inventories of emissions, and no Kyoto targets exist for them. This means that sometimes very significant sources of carbon emissions are being effectively ignored; to take an extreme example (by virtue of the fact that Rotterdam is the biggest port in Europe), when we visited the Netherlands we learned that emissions from ships leaving Dutch ports (in 2003) stood at 43MtC, 6MtC more than the entirety of emissions from land-based transport, and yet not subject to its national targets. Indeed, this issue received very little coverage across the 70 memos we received, and our impression is that there may be insufficient attention, from both governments and NGOs, on this issue to generate the kind of pressure on the negotiating process overseen by the International Maritime Organization required to generate a timely solution. The Tyndall Centre for Climate Change Research, for instance, wrote to us: "This, almost wholly, neglected sector is growing rapidly yet remains essentially outside the DfT's emissions brief".[161] While the Secretary of State told us of the efforts of the Government within this process,[162] we urge the Government to lead the international community in drawing attention to carbon emissions from international shipping, and to make sure they are brought under an effective reduction regime in the post-Kyoto phase. Given that a significant proportion of the international shipping which visits UK ports will refuel at other ports within Europe, the Government should work to achieve earlier progress by pressing for an effective EU strategy on reducing emissions from shipping at European ports, and for bilateral agreements on taxation of shipping fuel with other Member States. As a first step, the Government should press the European Commission to give greater prominence to publishing annual figures on emissions from international shipping, both aggregated for the EU as a whole and by individual countries.