House of Commons Transport Committee

Cars of the Future

Seventeenth Report of Session 2003–04

Volume II

Oral and written evidence

Ordered by The House of Commons to be printed 13 October 2004

HC 319-II Published on 15 July 2005 by authority of the House of Commons London: The Stationery Office Limited £22.50

The Transport Committee

The Transport Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Transport and its associated public bodies.

Current membership Mrs Gwyneth Dunwoody MP (Labour, Crewe) (Chairman) Mr Jeffrey M Donaldson MP (Democratic Unionist, Lagan Valley) Mr Brian H. Donohoe MP (Labour, Cunninghame South) Clive Efford MP (Labour, Eltham) Mrs Louise Ellman MP (Labour/Co-operative, Liverpool Riverside) Ian Lucas MP (Labour, Wrexham) Miss Anne McIntosh MP (Conservative, Vale of York) Mr Paul Marsden MP (Liberal Democrat, Shrewsbury and Atcham) Mr John Randall MP (Conservative, Uxbridge) Mr George Stevenson MP (Labour, Stoke-on-Trent South) Mr Graham Stringer MP (Labour, Manchester Blackley)

Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.

Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/parliamentary_committees/transport.cfm.

Committee staff The current staff of the Committee are Eve Samson (Clerk), David Bates (Second Clerk), Clare Maltby (Committee Specialist), Philippa Carling (Inquiry Manager), Miss Frances Allingham (Committee Assistant), Sarah Verrinder (Secretary) and Henry Ayi-Hyde (Senior Office Clerk).

All correspondence should be addressed to the Clerk of the Transport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6263; the Committee’s email address is [email protected]

Cover picture reproduced with the permission of General Motors Corporation.

Witnesses

Wednesday 11 February 2004 Page

Mr Paul Everitt, Head of Communications, Economics and Policy, Society of Motoring a Manufacturers and Traders, Mr James Rosenstein, Vice President, Toyota Motor Europe Robert Browett, Head of Government & Public Affairs (London Office) PSA Peugeot Cit Mr Nick J Owen, Senior Manager, Technology, Ricardo Consulting Engineers. Ev 1

Ms Julie Foley, Senior Research Fellow, ippr, and Mr Malcolm Fergusson, Institute for European Environmental Policy. Ev 11

Mr John Mumford, Vice President UK Region, BP Oil UK BP Plc and Mr Malcolm Watson, Technical Director, UK Petroleum Industry Association. Ev 17

Wednesday 25 February 2004

Mr Gerard Gornall, Associate Director, Acumen Team, and Mr Nick Addison, Product Manager, Lex Vehicle Leasing. Ev 24

Mr Robert Ledger, Head of Telelmatics and Mr Douglas Vallgren, Telematics Marketing Manager, Norwich Union; Mr John Parker, Head of General Insurance, Mr Barry Smith, Fortis - Chief Executive and Chairman of ABI Motor Committee and Mr Andrew Miller, Motor Insurance Repair and Research Centre, Thatcham, Director of Research, Association of British Insurers. Ev 29

Mr Matthew Carrington, Chief Executive, and Mr Stephen Ramsay, Managing Director of ReMIT, Retail Motor Industry Federation. Ev 36

Mr Rob Gifford, Executive Director and Mr Julian Hill, Member, Vehicle Design Working Party, Parliamentary Advisory Council for Transport Safety; Professor Oliver Carsten, Leeds University, Professor Mike McDonald, Southampton University, and Superintendent Jim Hammond, Deputy Chair, ACPO ITS Working Group. Ev 40

Wednesday 3 March 2004

Rt Hon Jacqui Smith, Minister for Industry and the Regions and Deputy Minister for Women and Equality, Mr Ashley Roberts, Deputy Director of Automotive Unit, Mr Robert Saunders, Head of Downstream Oil, Mrs Bronwen Northmore, Director of Coal and Hydrogen Energy Economy, and Mr Duncan Corrie, Policy Co-ordinator and Regulation Team, Department of Trade and Industry Ev 49

Wednesday 10 March 2004

Mr Phillip Sellwood, Chief Executive and Mr Richard Tarboton, Head of Business Unit Transport Energy, Energy Saving Trust; Mr Graham Smith, Chairman, Mr John Wood, Vice Chairman, Mr Robert Evans, Chairman, Steering Group, Low Carbon Vehicle Partnership. Ev 62

Mr David Jamieson MP, Parliamentary Under-Secretary of State, Malcolm Fendick, Head, Transport Environment and Taxation Division and Eric Sampson, Head, Vehicle Technology and Standards Division, Department for Transport. Mr John Healy MP, Economic Secretary and Mr Dan Edwards, Policy Advisor Transport Taxes, HM Treasury Ev 71

List of written evidence

FOR Page 01 Zeta Controls Limited Ev 86 02 Campaign to Protect Rural England Ev 86 03 Johnson Matthey Fuel Cells Ev 87 04 Retail Motor Industry Federation Ev 91 05 Stephen Plowden Ev 92 06 Toyota Environment and Cars Ev 96 07 Professor Chris Wright and Professor Barry Curtis Ev 100 08 Professor P S Hall and I R Harris Ev 103 09 Menard Engineering Limited Ev 105 10 TNO Inro Ev 106 11 PACTS Ev 110 12 LP Gas Association Ev 114 13 The IEE Ev 117 14 Freight Transport Association Ev 120 15 AA Motoring Trust Ev 122 16 Zero-m Ev 126 17 Sustrans Ev 130 18 EADS Astrium Ev 133 19 3M Ev 135 20 Engineering and Physical Sciences Research Council Ev 137 21 Institution of Civil Engineers Ev 140 22 Department for Transport Ev 144 22A Supplementary memorandum by DfT Ev 255 22B Supplementary memorandum by DTI Ev 257 23 Royal Academy of Engineering Ev 150 24 RAC Foundation for Motoring Ev 153 25 The Slower Speeds Initiative Ev 157 26 Colin Treleven Ev 163 27 Pentagon Glass-Tech Ev 168 28 Councillor Niall Walker Ev 168 29 C S Brindley Ev 169 30 Smart Moves Limited Ev 171 31 Carplus Ev 174 32 Energy Saving Trust Ev 178 32A Supplementary memorandum Ev 270 33 Norwich Union Ev 183 33A Supplementary memorandum Ev 261 34 RoadPeace Ev 185 35 Cyclists’ Public Affairs Group Ev 188 36 Ricardo UK Ev 189 37 Environmental Transport Association Ev 195

38 Royal Society for the Prevention of Accidents Ev 200 39 QinetiQs Ev 202 40 Low Carbon Vehicle Partnership Ev 204 41 Cargill Ev 206 42 Intelligent Transport Society for the United Kingdom Ev 208 43 The Society of Motor Manufacturers and Traders Limited Ev 212 43A Supplementary memorandum Ev 262 44 UK Petroleum Industry Ev 216 44A Supplementary memorandum by BP Oil Uk Ev 263 45 Professor Oliver Carsten, University of Leeds Ev 219 46 ippr Ev 223 47 Lex Vehicle Licensing Ev 228 48 IEEP Ev 232 49 PSA Peugeot Citroën Ev 236 50 Association of British Insurers Ev 238 50A Supplementary memorandum Ev 264 51 Calor Gas Ev 243 52 Professor Mike McDonald Ev 246 53 Transport for London Ev 248 54 ACPO Ev 249 54A Supplementary memorandum Ev 269 55 HM Treasury Ev 252

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Transport Committee: Evidence Ev 1 Oral evidence

Taken before the Transport Committee

on Wednesday 11 February 2004

Members present:

Mrs Gwyneth Dunwoody, in the Chair

Mr Brian H Donohoe Ian Lucas Clive EVord Miss Anne McIntosh Mrs Louise Ellman Mr George Stevenson

Witnesses: Mr Paul Everitt, Head of Communications, Economics and Policy, The Society of Motoring Manufacturers and Traders; Mr James Rosenstein, Vice President, Toyota Motor Europe; Mr Robert Browett, Head of Government & Public AVairs, (London OYce), PSA Peugeot Citroen and Mr Nick J Owen, Senior Manager, Technology, Ricardo Consulting Engineers, examined.

Chairman: Good afternoon, gentlemen, you are Q3 Chairman: Do you think people understand that most warmly welcome. Members havingan interest Vehicle Excise Duty is calculated in a particular to declare are: way? Mr Everitt: I would say that there is a growing Mr Stevenson: Member of the Transport & General recognition that it is related to CO2. Since its Workers’ Union. introduction I think there is more awareness of it but it is a gradual and slow process. Clive EVord: I am a Member of the Transport & General Workers’ Union. Q4Chairman: How do you want to see it changed? Mr Everitt: I think we are quite happy with the way Ian Lucas: Member of Amicus. that the structure of VED now is.

Chairman: Member of Aslef. Q5 Chairman: Would you like drivers of large, high CO2 cars to pay proportionately higher duty? Miss McIntosh: I have interests in the RAC and Mr Everitt: I do not think we think that there is a perhaps with BP and Shell. great deal of additional benefit from changing the basic structure that it is now, given that it provides a Mrs Ellman: Member of the Transport & General useful signal, it is structured in a way that Workers’ Union. encourages people to think about the CO2 emissions that they have and the vehicle choice that they make. Q1 Chairman: Gentlemen, we are takinga record. I am not sure that it is going to do a great deal more. Would you be kind enough to identify yourselves, So from our point of view what we are interested in, startingon my left, your right. really, is greater stability because the system has Mr Owen: Nick Owen, I am Senior Manager, undergone a significant review and has been changed Technology, from Ricardo Consulting Engineers at virtually every year since the change to the CO2 base. Shoreham-by-Sea, West Sussex. So from our point of view we are much more Mr Browett: Robert Browett, PSA Peugeot Citroen, interested in seeinga stable set of taxes that people V responsible for public a airs. can, hopefully, get a better understanding of. Mr Rosenstein: James Rosenstein, Vice President for External AVairs at Toyota Motor Europe. V Mr Everitt: Paul Everitt, Head of Communications, Q6 Clive E ord: Can I just talk about alternative Economics and Policy at The Society of Motor fuels? Is the fuel cell vehicle powered by a renewable Manufacturers and Traders. recharged fuel cell, powered by hydrogen, the way of the future? Q2 Chairman: Do any or all of you have anything Mr Owen: It is one possible future solution, and you want to say before we go to questions? Thank quite a promisingone from some perspectives. you. Can I ask you, firstly, what role Vehicle Excise However, one should not underestimate the number Duty plays in encouraging the purchase of clean of challenges presented in bringing this type of vehicles. power plant into vehicles in the mass market, namely Mr Everitt: Clearly, the way in which the Vehicle the cost of manufacturingthe technologyand the Excise Duty now has been restructured relatingto need to provide it with a suitable fuel. CO2 emissions provides a valuable signal about longer-term intentions. I think, inevitably, Vehicle Q7 Clive EVord: Can I just ask about the Excise Duty has never been a determiningfactor, infrastructure for the supply of the fuel? What ultimately, in purchase choice. problems do you see in rollingout the infr astructure 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 2 Transport Committee: Evidence

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen that could support a network that would allow that is radically diVerent to what we currently have. people to consider buyinga car that was fuelled by Again, the infrastructure problems are significantly alternative fuels? diVerent. Mr Owen: I think that question is, at least, in part one that should be asked of the fuel industry rather Q11 Clive EVord: Would you say that fuel cells UK than myself. However, there are issues relatingto and the Low Carbon Vehicle Partnership are taking vehicle technology where I can answer. For example, the necessary steps to facilitate as early as possible V some fuels like hydrogen have very di erent storage access to new technology? and health and safety considerations to the fuel that Mr Browett: I think there is a massive amount of we are used to, and that impacts the way that development going on, but none of us can really vehicles are designed, and it is not possible just to appreciate just how much has got to be done before convert an existingvehicle platform without serious they have got a chance of being commercially viable. impacting things like its crash safety and its luggage The PSA Peugeot Citroen view is that 2015 would be space. These things need to be engineered, and that absolutely the earliest we would be likely to see does not happen overnight. somethingon a viable basis, and probably 2020 before we would see any significant numbers on Q8 Clive EVord: Does anybody else have any the road. comment? Mr Rosenstein: From Toyota’s point of view we Q12 Clive EVord: Goingback to hydrogencell have done considerable research in fuel-cell vehicles technology, what are the problems faced with, say, and we actually are leasingsome. They are very an early introduction of that technology rather than expensive, and I would agree that we will not see that a step-by-step approach? as a mainstream technology at least until around Mr Browett: As far as hydrogen is concerned, it is 2020 at the earliest, because there are cost problems, basically the development work that has got to be vehicle problems, fuel problems and we should not done and the cost of bringing the technology down forget that to have a positive benefit on the to an aVordable level—and, of course, needless to environment the production of hydrogen has to be say, the infrastructure to support it, which is a low CO2 level usingrenewable energyin order to massively important. do so. Q13 Clive EVord: Is it true to say that from your Q9 Clive EVord: If I were askingyou these questions perspective (and certainly you are not the suppliers in relation to the technology for, say, catalytic of fuel) that the process to produce hydrogen from converters ten years ago, would you have given a water is a relatively simple process, it just requires similar answer, in the sense that did legislation not energy? come in that made it imperative that you found Mr Browett: It is relatively simple but the fact is what answers to those problems? is the process used, and does that in itself produce V Mr Browett: If you go back to catalytic converters, CO2 or any other harmful e ect? when they were first introduced it was introduced on an optional basis, where you paid extra for them. Q14Clive E Vord: In order for it to be a viable option The number of customers that took up that option in terms of the environment, the energy required during the first year was negligible. It was not until it would need to be generated by— became mandatory that, of course, they then became Mr Browett: Renewable sources, yes. accepted and the cost of the converter got built into the cost of the car. So you cannot really draw a Q15 Clive EVord: What role do you think that the parallel. public and private sectors have in rollingout the infrastructure of that? Q10 Clive EVord: In terms of the technological Mr Rosenstein: Just to give you an idea of the cost, advancement of that particular piece of equipment, we are leasingsome fuel cell vehicles in the United was that not driven by the necessity of legislation, or States and in Japan and the monthly lease cost is in order to comply with legislation? somethinglike $10,000. That givesyou an idea of the Mr Rosenstein: Legislation is indeed necessary and cost factor involved in this today. That would have welcome when it is linked to technology that has a to come down vastly before it could become a viable chance of makingits way into the market. I think option for the average consumer. Why? Because the catalytic converters were a good case of that and fuel cell technology itself needs to be greatly there are others, but fuel cell technology is just too perfected as well as the way to store and transport far out. Nevertheless, everythingshould be done to the hydrogen. So public private partnerships will stimulate the development of fuel cell technology so certainly be welcome in order to further this, and for that it can become a reality in the future. Many example the new hydrogen technology platform that parties need to get together to make it work. has been established by the European Commission is Mr Everitt: The only point I would make is simply a good step forward, as is the LCVP here in the UK. that with things like catalytic converters they were based on conventional fuels and technologies, so Q16 Clive EVord: What progress has been made in they were the development of existingtechnologies, setting health and safety guidelines and regulations whereas with fuel cells you are lookingat something to ensure that the new t echnologies are secure? 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 3

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

Mr Rosenstein: Perhaps it is too early to answer this. underestimate the diYculties and the costs, which is It has to do with the chemistry of hydrogen. This is why we are sayingbetween 2015 and 2020 before we perhaps somethingmore for the fuel industry to start seeingsomethingserious. answer. I am not familiar enough with that. Q19 Mrs Ellman: Mr Everitt, what convinces your Q17 Clive EVord: Presumably the design of vehicles Association that the Government should support and the development of vehicles are an issue when Liquefied Petroleum Gas? you consider design. Mr Owen: I think that it would be fair to say that Mr Everitt: I think we do not take the view compatibility with operatingon hydrogenfuel is not that Government should pick out individual somethingthat would be considered as a high technologies or fuels and say “This is the one we priority in designing the basic structural architecture should use and everyone should use it” and gear, if of a current vehicle, simply because the current you like, incentive programmes to those. The view generation of vehicles will have reached the end of we are takingis that, as we have already had a bit of their lives before hydrogen fuelling becomes a viable a taste of, at the moment we are tryingto move option for mass-produced vehicles. The engineering beyond where we are now, we are tryingto meet community, through the process of technology road society’s broader environmental goals in terms of mappingand such planningactivities have, I think, reducingemissions and improvingfuel e Yciency, a good consensus view and we have heard from two and so reducingCO 2, in that we will be exploringa V people sayingwe are 15 to 20 years away. One would whole range of di erent opportunities and saying not wish to compromise the design of a current car that what we need to see in terms of fiscal to prepare for a technology that it is never going to framework, incentives and the like, is somethingthat have in its production lifetime. sets challenging standards and criteria but allows all available technological options to have a chance of beingtested in the marketplace rather than being Q18 Clive EVord: I am sure it is me and not you, but chosen by particular governments. I did not understand much of that, so I am just going to press you a bit. Are you sayingthat if you are Q20 Mrs Ellman: There has been a lot of criticism going to go for, say, hydrogen cell technology we about it, so why is your Association still so would not start with the sort of car we have got; we supportive? V would have a completely di erently designed car? Mr Everitt: A number of our member companies Mr Owen: That is a very complex question that I am produce vehicles that are usingthat technologyand sure we do not have time to answer in full depth, but the best of those have some significant air quality some concept vehicles that have been shown with and, indeed, CO2 benefits. The reason why there has hydrogen fuel cells have been very diVerent from been greater controversy, if you like, of late is today’s basic car designs. because those environmental benefits have clearly Mr Everitt: I think the key point is that all fuel cell narrowed as existingtechnologiesfor petrol and vehicles that are currently beingtested or used are at diesel have improved. So it demonstrates one of the such an early stage, they are prototypes albeit in diYculties that the Government faces when it tries to limited numbers but they are still prototypes. All of identify particular fuels and technologies, in that the regulatory framework within which those things move on, things get better and the gaps close. vehicles would have to operate has not yet even been So rather than havinga specific approach it is better addressed. So, if you like, many of the issues that we to have a framework that encompasses all will be facingin commercialisingfuel cells are not yet possibilities. beingaddressed, nor are they totally clear because how the vehicle is going to be fuelled or refuelled, Q21 Mrs Ellman: So you are not so sure about that? where they are going to be refuelled and under what Mr Everitt: No, I think we are very sure for certain conditions we simply do not know yet because, at the vehicles. If you look at a brand new LPG vehicle that moment, hydrogen is available from a limited meets the latest and, indeed, in some cases advanced number of sources and it is, if you like, not quite in emissions standards, there are significant laboratory conditions but they are akin to test and environmental benefits. However, the scale of those prototype vehicles rather than commercially benefits compared with a competingpetrol or diesel available vehicles. engine are not as great as they once were. Mr Rosenstein: As an example, the fuel cell vehicles that we are sellingtoday are based on an existing Q22 Mrs Ellman: What about our other witnesses? vehicle, and in the future one of the bigbenefits of Toyota has expressed quite diVerent views. fuel cell will be that you remove elements of the Mr Rosenstein: No, I would support what was just traditional power train, which creates a lot of space said because it is better to establish standards—fuel inside the car, which means that you can consider consumption standards, CO2 standards, pollutant configurations and sizes and shapes that you could emission standards—which any technology should not before, and create much more room inside the be allowed to reach. That is the basic approach. If car in a smaller overall length. So we are very you single out a given technology then it can distort positive about fuel cell for the future and we are the market and it restricts the technological options. actually sellingsome, but we should not So we do have advanced technologies that are in the 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 4 Transport Committee: Evidence

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen market and that are benefitingfrom support, but to investment and discredi ts the Government’s focus on one technology alone we do not think is the environmental credentials”. Do any of you agree correct way. with that? Mr Everitt: I do not think we would quite take that approach, no. Q23 Mrs Ellman: So you are not quite agreeing. In fact, your evidence has said that support for this is Q27 Mrs Ellman: You think they have got it wrong? inhibitingthe development of hybrids. Mr Everitt: I have not seen what they have actually Mr Rosenstein: No, hybrid has benefited as well produced. I think it is clear that the Government is from support in this country, for which we are tryingto correct a situation, in that a largenumber grateful. However, we would say even in the case of of organisations have put before Government the hybrid, or LPG or anything, that it is better to set fact that we should have a more technologically any kind of incentive on the basis of, for example, its neutral approach, and that is what they are tryingto CO2 emissions or its pollutant emissions, or the level move towards. However, clearly, any significant of particulate matter—NOx or what-have-you—and change people are not going to like because they then allow whatever technology that can meet that have purchased vehicles with a certain whole-life to benefit from it. cost in mind and when that changes suddenly, clearly, there are going to be people who are Q24Mrs Ellman: What about the increase in duty on disadvantaged, and for those people it is not a Liquefied Petroleum Gas? Do you support that? Do happy sight. any other witnesses want to comment? Mr Browett: We do not produce LPG vehicles in this Q28 Mrs Ellman: Your Association as well says that country, so I would rather not comment. the Government should introduce new incentives based on air quality standards and CO2 emissions. Do you think that is practicable? Q25 Chairman: That is not what you were being Mr Everitt: Yes, we do. asked, actually; you were beingasked whether you support it. Q29 Mrs Ellman: How do you see that applyingin Mr Browett: I follow exactly the view of my the situation now? colleagues that any incentive should be geared to Mr Everitt: Currently we have a situation where reducingpollutants down to specific levels, and it through the Transport Energy Programmes run by does not matter how you get there as long as the the Energy Saving Trust, funded by the Department incentive is geared to allowing a range of products. of Transport, grants are made available, at the With LPG it is wrongto singleout one particular moment, for LPG, hybrid and electric vehicles— method. purchase incentives of up to £1,000. At the moment Mr Everitt: The Treasury has published its that is based primarily on the air quality benefits, alternative fuels framework in the Pre-Budget and it seems to us, clearly, that we are movinginto Report and indicated that it was movingto a system an era where carbon dioxide and carbon dioxide where it would implement diVerential rates over a emissions have a much greater, perhaps, priority three-year period, and in principle we support that than previously. It makes sense to ensure that any because it does give the market certainty. They have incentive programmes that they make available also indicated that they will be reducingthe incentive encompass both the air quality and the CO2 benefits. for LPG, and I think the point that has been made Indeed, we think it is perfectly practicable for to the Treasury is that for those companies—and programmes like those run by the Energy Saving there are many, both vehicle manufacturers and fuel Trust to be amended to incorporate those elements. providers—who make significant investment in Mr Rosenstein: Some other countries in Europe do those particular technologies, and, perhaps more use incentives based on European Directives, such as importantly, consumers who have purchased those Euro 4 or, in the future Euro 5. So there are ways to products on the basis of the incentive packages that do this eVectively. have been made available, it is important that, if you like, the process now moves in a gradual way so that people who have purchased a vehicle last year on the Q30 Mrs Ellman: Do you think it is possible to basis that they were going to pay a certain amount measure accurately well-to-wheel emissions? Do you of fuel duty do not find themselves wildly think that is a practical proposition? disadvantaged, or their expectations wildly Mr Rosenstein: Yes, it is. Speakingfor Toyota, that is what we do, actually. We have a life-cycle disadvantaged. So it is a diYcult situation because, assessment of all our vehicles, startingfrom the clearly, I think the Government has recognised, as actual emissions from producingthe components, we have suggested, that a more technology-neutral producingthe car, the actual fuel consumption and approach is the right one, but it has to move from the recyclingof the car. It is easy enoughto include where it is today to the situation where that is fair the actual CO2 emission from the production of across the board. the fuel.

Q26 Mrs Ellman: The Freight Transport Q31 Mrs Ellman: Do you think it is possible for the Association has condemned the changes to the fuel Government to build in tax incentives based on that? tax framework, sayingit “reduces confidence, wastes Has that been done elsewhere? 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 5

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

Mr Everitt: I am not aware that tax incentives have Q35 Miss McIntosh: Do you anticipate the been based on a parallel approach. I think it is a introduction of models to meet the pedestrian crash developingarea. Inevitably, in principle, when performance tests ahead of the deadline? lookingat incentives and the tax regimeit makes Mr Everitt: At this stage it is diYcult to say. The first sense to not just look at the emissions in use but, phase is new types from 2005, and I think we are on also, in producingthe fuels. I think there is a growing track to do that. body of information that gives that information, and that rationale is helpful in guiding policy on how Q36 Miss McIntosh: Would you support the incentives should be set. I am not sure that at the merging of pedestrian protection ratings with the moment we are in a position to say that you could current Euro New Car Assessment safety star create an incentive for tax that was encompassing ratings? well-to-wheel analysis. Mr Rosenstein: The pedestrian protection is rated in Mr Browett: I think the problem with well-to-wheel NCAP and we certainly support the improvements is that we all understand that technically it is the best that have been agreed, and I think you will see way to look at it, but from the consumer point of vehicles comingto the market soon enough. view it is very diYcult to get their heads round that particular aspect. It is much easier for them to think Q37 Miss McIntosh: As you know, our overall in terms of tank-to-wheel emissions rather than well- pedestrian safety level in this country is quite good, to-wheel. but we do have an appallingrecord on child Chairman: Thank you. Miss McIntosh? pedestrian casualties. Do you think these new tests will improve child pedestrian casualty figures, or reduce them? Q32 Miss McIntosh: Could I ask Toyota first of all Mr Rosenstein: Yes; but I think, as I am sure you what future role you see for biofuels, and in have heard before, that this is not the only factor particular how much fuel do you think could be that will help. For example, there is a programme replaced by biofuels? called EuroRAP, which is the Euro Road Mr Rosenstein: There is a European directive on it, Assessment Programme. going up to 5.75% by 2010. We certainly believe that there is potential for biofuels, and automotive Q38 Chairman: Euro Rabbit? technology has adapted to the need to prevent Mr Rosenstein: I believe there may be such a thing, corrosion, and things like that; so up to that limit I but this is EuroRAP—R-A-P—not to be confused think there is no real issue. Beyond that we would with a type of music. have to work—and we are actually working—with the oil industry to see what the interaction is between fuel technology and vehicle technology. There Q39 Chairman: Anythingis possible with European certainly is potential there, includingin the area of institutions. gas to liquid. There are a number of alternatives that Mr Rosenstein: This is actually a private initiative, can be pursued. As to how far that can go, I do not launched by the AA here in this country—the Euro yet know whether it can go much beyond the limit Road Assessment Programme—which actually that has been set. investigates the state of European road infrastructure, includingin this country, to try to Mr Browett: Let me just say, as far as PSA Peugeot pick out the black spots, the blind corners, the really Citroen are concerned, we not only accept the 5% dangerous badly-marked roads where often children level, but we as a company are quite happy to go up are involved, because neither the children nor the to 30%. We have had cars runningaround since 2000 drivers are aware of it. So infrastructure is very on 30% bio-mix, but the quality standards are important and awareness campaigns are very absolutely paramount, and they have got to be used important as well. in fleet operatingconditions. Miss McIntosh: I have to declare that I have been sent the video, and I am sure you all have, and I shall Q33 Miss McIntosh: Would you both confirm that watch it this weekend. the initial target is realistic and achievable by 2010? Chairman: You have a sad life! Mr Browett: I would say so, yes. Q40 Miss McIntosh: What safety benefits do Advanced Driver Assistance Systems present? Q34Miss McIntosh: Could I ask why as an Mr Rosenstein: I can say somethingabout that. We industry—whoever wants to answer—was a are getting into the realm of telematics, and we see negotiated agreement on safe car fronts sought, great potential in this area. We are already seeing rather than the adoption of the tests developed by technologies coming to the market now. We are the European Enhanced Vehicle Safety Committee? about to launch a car that has somethingthat we Mr Everitt: I think the reason the industry phased have not had before, and I do not think it has been the negotiated agreement is because we could do it seen on the market, where you have a navigation more quickly, and the tests as proposed are the ones screen in the car, and there is a camera in front that that are going to be implemented in the directive. We sees around blind corners, so if you are comingto a just thought it would be quicker to do it in a T-junction, for example, and you cannot see what is voluntary way rather than go through the comingfrom another direction, this camera in the legislative process. front actually picks up on the camera what is there. 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 6 Transport Committee: Evidence

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

This we think is a tremendous benefit. There will be Mr Rosenstein: Human being/machine interface. more of that, where sensors are put into the infrastructure, for example, where pedestrians are involved, and there is interaction between the Q46 Miss McIntosh: In your Toyota memorandum infrastructure and the car. There are also other you discuss intelligent car systems such as vehicle technologies, such as pre-crash technology, which is dynamics management, which recognises drivers’ beginning to come into the market now, where you intentions and electronically activates the throttle, have, for example in our case, a radar system which brakes or steering. Do you believe this is an detects obstacles which you cannot see in front. If it acceptable transfer of control from driver to vehicle? detects that somethingis imminent, then thingsare Mr Rosenstein: Not a transfer of control. It should set oV in the car, the pre-tensioner is tightened, the always be seen as an aid to the driver, because we car slows down, and if need be the air-bags will know that most accidents are caused by driver deploy. We see a lot of potential in this area. failure or human error, and we should do everything we can to assist the driver in avoidingthese mistakes.

Q41 Miss McIntosh: That is fine when it is working, but how will drivers respond when confronted with Q47 Miss McIntosh: I am a very simple person, and failures in Advanced Driver Assistance Systems? I obviously drive an enormous amount each year in Mr Rosenstein: You are askingabout product a rural area. Why should I be persuaded that this liability? system is going to work and be beneficial to me? Mr Rosenstein: I think there comes a time when you have to trust the reliability of the manufacturer who Q42 Miss McIntosh: I am getting to that, yes. is sellingthe car. Of course there is an issue of Mr Rosenstein: Product liability is an issue that has product liability. Before we put anythingon the not been sorted out, and has to be sorted out. market we have to ensure that we are confident that Basically we believe that you cannot take it is going to work. responsibility away from the driver. We have our Chairman: I would like to ask Mr Lucas to come in responsibility to make these things work, but it on this. should never mean that the driver simply can forget his own responsibility. It is a sort of hidden danger of these things. Even when ABS came along, drivers Q48 Ian Lucas: You said that you were just about to put a vehicle on the market. It seems to me that these thought, “Well, I can go fast, and not worry about Y it, because it will work”. It should not be that way. issues are very, very di cult issues that have not been explored with, for example, the legislature, whose responsibility it is. What discussions have you Q43 Miss McIntosh: My colleagues are saying I am had with government about the issues involved in speakingas a woman driver, so can I ask next: who telematics? is liable in cases where a collision occurs because the Mr Rosenstein: A lot of this activity is going driver did not understand how the automated on in an organisation in Brussels—the European drivingsupport works? There are two elements to Road Telematics Organisation—which involves this question. One is mechanical failure and the car manufacturers, component manufacturers, other is human error. The mechanical one is associations and governments. I have to admit that obviously product liability. not enough progress has been made. This is Mr Rosenstein: Standards need to be set. As I said, somethingthat we have been discussingfor many product liability is a very vague area right now in this years, which is the establishment of standards. respect, and I cannot give you a straight answer on Unless these things are standardised, progress will that, because it needs to be thought out and prepared be limited. very carefully. One of the elements should certainly be that drivers who are going to get in front of the wheel of a car with this technology in it should Q49 Chairman: Are you talkingabout setting presumably understand it. standards at European level but not at national government level? Mr Rosenstein: Presumably the two would go Q44 Miss McIntosh: How concerned are you that together. there might be potential for such failures? Mr Rosenstein: It is our job to make sure that the cars do not fail. Once again, where do you draw the Q50 Chairman: You did not say that, Mr line between the manufacturer’s product liability Rosenstein. You said that a lot of work was going and the driver’s responsibility? Certainly one of the on in Brussels, and presumably some form of factors in makingmodern cars with these electronic standardisation. I am askingyou: is this work being systems is the ergonomics, the man/machine done in parallel with the national governments, over interface, and that has to be made as protective as the heads of national governments, with the national possible. governments represented? Who is doing this? Who is settingthe standards? How will they be set? When will they be set? Q45 Miss McIntosh: And the woman/machine Mr Rosenstein: National governments are members interface, presumably, as well? of these organisations, so they are directly involved. 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 7

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

Q51 Chairman: So it is beingdone at European level Q55 Ian Lucas: I am just lookingat some research with representatives of the national governments that we have been given information on. An there? experiment was carried out by Southampton Mr Rosenstein: This is just an advisory body. It is not University—I think this was about automatic cruise a rulingbody. control—and when automatic cruise control failure was induced, one-third of the drivers collided with the lead vehicle, indicatingthat monitoringthe Q52 Chairman: So it has no power; it is an functioningof the system is di Ycult for drivers, and advisory body? recovery from failure was problematic. Mr Rosenstein: Yes, that is true. Mr Browett: As far as automatic cruise control is Mr Everitt: There is a great amount of work being concerned we have had it for a number of years, and addressed on telematics within the UK as well. not everybody likes it, though there are a lot of There are a number of advisory bodies; also under people who swear by it. the reorganisation in the Department of Transport this whole area has been given a greater focus. However, the standards and regulations that control Q56 Ian Lucas: I hope they are not drivingbehind vehicles, the standards that the vehicle me. manufacturers have to meet in order to put vehicles Mr Browett: We can set it so that the vehicle cannot on the road, are set at a European level. Many of the exceed a certain limit unless the driver wants to; but technical discussions are beyond that, at it does not take away the responsibility to international level, and where member states and concentrate on the road and apply the brakes if various vehicle manufacturers and their necessary. representatives try to tackle these issues, I think Mr Rosenstein: There should be a fail-safe from the manufacturers’ perspective it can be a very mechanism in cruise control so that a collision could longand tiresome process, but they are being not occur. What you are sayingis very important. addressed. The driver is not going to become a mechanical engineer to the extent of knowing how everything Q53 Ian Lucas: Is it not crucial that the driver works, but in every aspect where he or she interacts understands all this? All this seems extremely remote with the vehicle, the driver has to be competent from someone who is drivinga vehicle. enough to understand what is going on. I will give Mr Everitt: I think the challenge that the vehicle you a simple example. Navigations systems are industry faces, and quite rightly, we are talking becomingvery popular, but we also know that if you about pedestrian protection and the need for spend too much time lookingat your navigation V regulations to do these sorts of things, which is right. system you are takingyour eyes o the road; However, if we cannot move without regulation, if therefore voice activation is becomingmore we cannot introduce things that we believe are going common. So there has to be a very well-thought- to be beneficial to drivers, then we will then be through ergonomic system within the car so that the accused, if you like, of dragging our feet. So I think driver is not distracted and that his understandingis if you purchase a vehicle, then you have a not unduly taxed, otherwise it is not a good responsibility to understand how that vehicle technology. operates, and the systems that it has. Q57 Ian Lucas: Is trainingsupplied to drivers? I took Q54Chairman: That is a new concept, is it not, that my drivingtest not too longago,but I have to drivers understand how their vehicles work? It is a confess that none of these concepts are at all familiar nice thought. to me. Perhaps I need a flasher car; I do not know. Mr Browett: I would like to make a general point, Mr Rosenstein: There are two aspects to that. Yes, because most of us around here will perhaps drivers should be trained. They should be fully remember when brake servos were first introduced, informed, and sometimes we are not good enough at which assisted the driver in applyingthe brakes. All that. Secondly, the thought has often cropped up of of us will remember when the first ABS systems were giving further driver training to people who have introduced, which again help in the process. This their drivinglicence. development has been going on for decades, and Ian Lucas: I should declare an interest; I drive a with new technologies introduced all the way Toyota, as it happens. through. In all my experience, a lot of it spent on the service side, I have heard umpteen people tell me that brakes failed, but all the tests that have ever Q58 Mr Donohue: Another development as far as been carried out on those vehicles afterwards, they the introduction of equipment is concerned is a have never found any problem with the brakes as safety device that is beingdeveloped in the States at such; it has nearly been down to the driver. So this is present, to stop you drivinga car under the influence not a new issue; this is somethingwhich has been of alcohol; indeed, the car will not turn itself on going on for decades and will continue to go on. unless you pass the test of blowinginto a bagor Chairman: You are talkingabout complete step somethingin the car. What stageare you at as far as change, are you not? developing that for cars in this country? 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 8 Transport Committee: Evidence

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

Mr Rosenstein: Alcohol detection? Q65 Mr Stevenson: I promise you I am comingto that also, but I think the answer to my question is that you do not believe General Motors? Q59 Mr Donohue: Yes. Mr Rosenstein: No, I would not say that. As a matter Mr Rosenstein: I am not aware of that in Toyota. of fact Toyota and General Motors are working Mr Browett: No. together on the development of fuel cell technologies, so we know pretty much what they are Q60 Mr Stevenson: Could I go back to hydrogen fuel doing. I am sure that if they said it, they said it for cell technology, which we seem to have left some legitimate reasons. time ago. In your answers to previous questions you gave the impression that you were rather sceptical Q66 Mr Stevenson: My next question is a general about the introduction of a popular vehicle, a mass- question. One of the companies who are very heavily produced vehicle, and 2015 to 2020 was the sort of involved in hydrogen fuel cell technology in this time you were talkingabout. Some of the members country is Johnson Matthey. They are very clear of this Committee have had discussions with that they thought legislation, regulation, was a great General Motors, who are quite convinced that they stimulus to advancement. What is your collective will be introducinghydrogenfuel vehicles by 2010. view on that? In other words, which comes first, What is your reaction to that? advancement or legislation? Mr Rosenstein: As I have said, we have already Mr Owen: Legislation forces advancement. introduced— Q67 Mr Stevenson: So it comes first? Mr Owen: That is a slightly diVerent question, Q61 Mr Stevenson: I am comingto you particularly because if there is legislation in place you have to afterwards, Mr Rosenstein. I want your reaction comply with it. Legislation is not always the most about General Motors, please. appropriate way of bringing about advancement, I Mr Everitt: From me? would think.

Q62 Mr Stevenson: Whoever, but I am comingto Q68 Mr Stevenson: Let me put my question in a you particularly, Mr Rosenstein. diVerent way. If governments, the European Union, Mr Everitt: Amongvehicle manufacturers I do not were to take a view that hydrogen fuel technology think anyone is tryingto be sceptical about the was the future, and legislated accordingly, is it your potential of hydrogen fuel cells. I think the issue for collective view that industry would react as it has many companies is at what point they will become reacted in the past, positively? commercially viable, and each company will have Mr Rosenstein: The question is how would they potentially a diVerent view of that. I am sure the legislate appropriately at this point in time? What circumstance in the States may be somewhat would they do? Goingback to the beginningofthis diVerent from those in the UK. I think the key discussion, it is perfectly legitimate to legislate or to element that everyone has tried to focus on is that give incentives or stimulus of some kind on the basis environmental benefits going down the hydrogen of a certain level of CO2 or on a certain level of fuel cell route are dependent upon the widespread pollutant emissions, and then allow manufacturers availability of renewable hydrogen, and I think that to find technologies to meet them. If you were to as much as the fuel cell is an issue to overcome, consider legislation directly to incentivise the actually havingsu Ycient renewable hydrogen development and marketingof hydrogenvehicles or available will also be a significant constraint. fuel cell vehicles, I do not know how you would do it. Mr Browett: If we go back to the catalytic converter which we were talkingabout earlier on, legislation Q63 Mr Stevenson: I am comingto that, but my was appropriate then because that particular device question was the comparison between your had been developed, tried and tested, then at that assessment of 2015/2020, and General Motors’ point, after it had been on the road, legislation came determination, they told us, that 2010 is their target. into force. Mr Rosenstein: I do not know in what context they said that. Did they say mass production of fuel cell vehicles, or introduction of fuel cell vehicles? Q69 Mr Stevenson: I also remember, Mr Browett, as a Member of the European Parliament at that time, the Ford Motor Company saying, “If you introduce Q64Mr Stevenson: They were talkingabout this, the Germans will take us to the cleaners, producingthem. because they will corner the market, and we are not Mr Rosenstein: Producingthem? As I say, there are ready for this yet”. After it was introduced within two manufacturers today that actually produce and three months they introduced their clean-burn sell fuel cell vehicles, and we are one of them, today. energy. I think have to put it in context. My next We started last year, at the end of 2002. We believe question is particularly to Toyota. Some of us have that they will become a huge technology in the seen your hybrid vehicle, which was impressive; I am future, and I would say that it will focus everybody’s not going to mention it, because it would be mind when we begin to realise that one day oil is advertising. It was impressive. Do you see this as an going to run out. That is when things will start to end in itself, or as a step towards clean-burn happen seriously. technology, perhaps hydrogen technology? 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 9

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

Mr Rosenstein: We see clearly hybrid technology as Q73 Chairman: I think we could ask about the a major mainstream technology as of now. A new PowerShift grant at this point. Is it getting people to generation of this vehicle has been recently buy alternative fuel vehicles? Mr Everitt? launched, and the reception in the market has been Mr Everitt: I think one of the issues they faced very positive. Hybrid technology is something that towards the end of last year was in their case too we see not only for use with petrol engines, but also many people were buyinglow-emission vehicles, as diesel engines; and the fuel cell vehicles that we are they had run out of their grant; so it is clearly having makingvery heavily depend on hybrid technology, some impact. that is why we call them fuel cell hybrid vehicles. We sincerely believe that, for us at least, the success of fuel cell technology will very much depend on hybrid Q74Chairman: You do say that beneficial technology. technologies are excluded from the PowerShift criteria. How would you want to see the qualifying criteria changed? Q70 Mr Stevenson: Would you mind clarifyingthat Mr Everitt: At the moment—and it goes back to slightly, because I am not quite sure that it was a what we said slightly earlier on—what we would like response to my question, as I am sure you have to see is some clear environmental criteria grasped. Does Toyota—and do the other established that would allow all qualifying companies—see your hybrid technology as an end in technologies to gain access to this. itself, or as a step towards, for example, hydrogen technology? Mr Rosenstein: Hybrid technology is not an end in Q75 Chairman: Is there under the current funding itself. We believe that the ultimate eco-car, if you can structure a coherent research strategy? Mr Owen, is call it that, will be fuelled by hydrogen, but we think it coherent? that hybrid technology will be an important Mr Owen: I believe that initiatives such as the Low component of that technology. Carbon Vehicle Partnership are settingstrategies which will make research in the UK a lot more coherent and better integrated with European and Q71 Mr Stevenson: Last question, if I may. Getting international research than it has in the past. back to practicalities, some of us were struck, if I may use that term, by the apparent determination of California in the United States to have what they call Q76 Chairman: So the answer is “No”, the current a hydrogen highway—their term—and they are fundingstructure does not lead to a better research apparently quite determined to go forward with strategy? Is that what you are saying? that. Do you think somethingof that nature might Mr Owen: It is in a transition phase between “No” be required here in Europe, particularly in the UK? and “Yes”. (Laughter) Do you think, allied to that question, that the infrastructure for such things as hydrogen Q77 Chairman: How often in your life, Mr Owen, do technology is required before companies will take it you get away with an answer like that? What more seriously in terms of investment, or do you think that can we do to help small and medium enterprises to companies ought to be pressing for the develop the new technology? infrastructure to be there as a result of their Mr Everitt: Certainly from the SMMT’s perspective, investment? as an industry we are very keen to support the Mr Rosenstein: California, if you talk about component supply industry in the UK. It is a major hydrogen hybrids, that is precisely the kind of part of our industry, and one of the areas that I think vehicle we are sellingthere now. They have set is broadly acknowledged within Government and SULEV, ULEV, very low emission standards, which within the industry itself is that those sorts of require very low emission technology. companies need to be focused much more on innovation, R&D, and clearly an awareness of and an ability to participate in Government Q72 Mr Stevenson: The rest of the United States is programmes, and indeed European programmes, of following? fundingon key areas of future technologies.This Mr Rosenstein: The rest of the United States is from our point of view is one of the key ways following. They have stepped back a bit on pure forward. electrics, because they have realised that it is not entirely practicable, but they are certainly pushing for very low emission standards, not only for CO2 Q78 Chairman: Do you think the Government’s but for NOx and other things. One of the target of 10% sales of cars which emit less than 100 technologies to address that will certainly by hybrid g/km of carbon dioxide is achievable? That is per hydrogens. However, when you talk about kilometre. infrastructure, which should come first, I think it has Mr Everitt: We think these days that is a significant to be a concomitant movement in that direction, challenge. I think the key issue for us—and we had because one will not happen without the other, and a discussion about this issue within the Low there has to be a market mechanism that is working Carbon Vehicle Partnership—is that there are there before this is going to be a reality. I have to already vehicles available at or around 100g/km. repeat, it will not be ready within this decade. The issue is that not many people want to buy them. 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 10 Transport Committee: Evidence

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

One has to ask the question whether the best been tryingjust about everythi ngyou can think of, environmental benefit is actually going to be gained from makingit di Ycult to break into the car, to the by havinga very small slice of the market focusing use of immobilisers—alt hough if you break into the in one area while everybody else does anythingelse, ECU you can probably crack that as well—to or whether the issue is better addressed by getting satellite tracking, to all sorts of things. I think the market as a whole to move towards more energy security levels have improved vastly with this new eYciency. technology, and we can only continue; however, the car-jackers are also very clever, so we have to keep ahead of them. Q79 Chairman: So is it a good idea to have a grant, for people to have to apply for that, or not? Mr Everitt: We think the grant is a useful incentive. Q85 Mr Donohue: What are you doingto keep ahead It does help break new technologies and new types of of them? vehicles into the marketplace. Traditional car buyers Mr Rosenstein: More sophisticated electronics. I are quite conservative. It has been very diYcult, as think we rate quite well in this country on vehicle the LPG issue has shown, to get people to security, and we are usingvarious electronic acknowledge that these newer fuels and newer mechanisms—I cannot describe them to you technologies are just as good as their conventional because I am not an engineer—as well as satellite ones which they are used to. So any additional trackingand other mechanisms that just prevent the incentive that is available that perhaps would make car from moving. Of course you can always pick it people consider this— up and put it on a lorry, you can take it away.

Q80 Chairman: What are you talkingabout, some Q86 Mr Donohue: You can put it in a steel container, kind of mainstream incentive scheme? and all your systems go for a Burton, do they not? If Mr Everitt: No, I am sayingmainstream you put them into a steel container it loses all of that; technologies. the technology is lost. Mr Rosenstein: Indeed, no matter what happens, Q81 Chairman: No. If you want to move to this 10% you can physically remove the car. Certain things are Y of sales for the low carbon, how are you going to more di cult and take more time. get there? Mr Everitt: Essentially the industry is focused on Q87 Chairman: Very briefly on this, because I want Y movingto ever more fuel-e cient vehicles. We had to break now. a European agreement on CO2, which would see a Mr Everitt: I think one of the issues on security, as 25% decrease in average fuel consumption, of CO2 James said, is that we have improved, but the issue emissions, by 2008, so that in itself means that the now is that in improvingthe security of the vehicle industry is headingin the rightdirection. Clearly, are we actually openingup more dangerto the user from the commercial point of view, to meet this of the vehicle, because people who want to steal a particular target we have to find a coherent package, vehicle will target the person and not the car, so there if you like, which delivers the environmental goals is that. but also are attractive vehicles that people want to Chairman: Mr EVord, finally. buy; and a willingpopulation who are prepared to buy them. Q88 Clive EVord: On the end of the use of the vehicle, you mentioned earlier on that you measure Q82 Chairman: That is not a very clear answer. I ask the environmental impact of the vehicle right from you again: are we talking about some mainstream manufacturingto where it appears on the road. Do incentive scheme? Are we talkingabout a grant? you take into consideration the materials you use, What are we talkingabout? bearingin mind that the vehicle is goingto come to Mr Everitt: Again, as I think was mentioned earlier an end of its life and is going to have to be disposed on, we believe that a refocusingof the PowerShift of, and is there more that the car industry can do to grant to encompass CO2 as well as emission plan for that? standards could be a useful route for deliveringthis. Mr Browett: The industry has been takinga lot of note of that for many, many years, and you will see Q83 Mr Donohue: Can I turn your attention to the a gradual introduction of more and more materials engine management systems that are within cars like aluminium, for example, and plastics. Our nowadays. In terms of usingthat as a security tool, current range of models is something like 90% you have your immobilisers, but what else do you recyclable already, and there are targets to move think could be done to make it almost impossible for even further. I think it is a real success story, quite cars to move? honestly, as far as the industry is concerned, and within the next five to ten years you will see cars beingvery e Vectively recycled. Q84Chairman: It is a new concept, the non-moving car, Mr Rosenstein. Mr Rosenstein: When the car falls into the wrong Q89 Clive EVord: As manufacturers of vehicles, hands, I think the non-movingcar is a very attractive would you prepared to take them back to dismantle concept. I think all manufacturers have them and re-use the recyclable materials? 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 11

11 February 2004 Mr Paul Everitt, Mr James Rosenstein, Mr Robert Browett and Mr Nick J Owen

Mr Everitt: Under the terms of the End-of-Life Mr Everitt: Absolutely, once the legislation is set. Vehicle Directive we are beingasked and have Chairman: Gentlemen, you have been very helpful accepted responsibility to take back from the last indeed. Thank you very much. The Committee owners, which will be eVective in 2007. stands suspended for 15 minutes. The Committee suspended from 3.50 pm to 4.00 pm Q90 Clive EVord: You are planningfor that? for a division in the House.

Witnesses: Ms Julie Foley, Senior Research Fellow, Sustainability Team, ippr, and Mr Malcolm Fergusson, Institute for European Environmental Policy, examined.

Q91 Chairman: Thank you very much for coming, bulky to compress hydrogen, and it is only really Ms Foley and Mr Fergusson. It is very nice to have suitable for larger vehicles like buses or heavy goods one of our previous advisors with us. May I ask you vehicles; so that means more work if it is going to be if you would be kind enough to identify yourselves. a passenger car option. There is the obvious point Ms Foley: I am Julie Foley. I am a Senior Research that we do not actually have a hydrogen refuelling Fellow at ippr, which is a public policy think-tank, infrastructure, so it is the infrastructure part which and for ippr I cover environment and transport needs a lot more consideration as well. research. Mr Fergusson: I am Malcolm Fergusson, Senior Fellow at the Institute for European Environmental Q95 Mr Stevenson: So it is not the technology as Policy, which does what it says it does, and I focus such; it is the infrastructure? The argument about on transport and environment policy. heavier vehicles is well taken, but some of us saw prototype passenger vehicles equipped with a Q92 Chairman: Did either of you want to say a few hydrogen fuel cell. Would you say that it is the words before you began? No. Could I just remind infrastructure, the source, and how you actually you that this room does rather require voice; it does convert the hydrogen to power that is the problem, absorb sound. The American Department of Energy rather than the technology of the vehicle? is aimingto advance the commercialisation of fuel Ms Foley: I think that is probably the primary issue, cell cars to 2015, with market entry at 2020. Do you and the technology will come after that; but they are think that is realistic or desirable? inextricably linked. At the moment, from a fuel Ms Foley: I think from a climate change perspective supply perspective, why would they invest quite it is definitely desirable to think about future fuels. I significantly in starting to develop hydrogen was listeningto the evidence before and I noticed infrastructure in any serious way in the UK, if there that there was a lot of scepticism about how quickly is no demand for that fuel? The two have to go we could get hydrogen. I think that is justified to a together. I think it is important to recognise where degree, and we have to recognise that it is an option the hydrogen is coming from; and hydrogen is that is some way oV—we are talkingabout decades attractive because it is such a flexible fuel, it can away—and there is a lot we can do in the interim in come from many diVerent sources. Yes, the ideal terms of energy-eYcient vehicles. At the same time, point is hydrogen from renewable energy; but, as however, it is important to recognise that climate you know, we do not have enough renewable energy change and road transport’s contribution to that at the moment, and we will not for quite some could well grow, particularly if we have the traYc considerable time yet, and the renewable electricity forecast demands the UK is likely to see, and that targets we have are pretty ambitious already. That means this is an area that will require new fuels like does not mean hydrogen could not be made from hydrogen. So mapping out the future to 2020 sounds other sources like natural gas in the interim. It does very sensible, and somethingwe should be doing. not necessarily provide us with an excuse for doing nothing, for example. It is not necessarily a problem, Q93 Chairman: Mr Fergusson, did you want to say it is just an issue that needs to be thought through. somethingbefore I bringin my colleagues? Mr Fergusson: Just one thingto add, perhaps, and I agree with what Julie says. Of course with the US Q96 Mr Stevenson: What role should Government programme, they are more concerned with oil play in that development? security than about climate change, and there is Ms Foley: I think it is important to be realistic about potentially a bit of a danger for Europe in that, in this. At a time when there are very high constraints that it will not necessarily be going in quite the on public resources it would be unrealistic to say that direction that we want to go. We cannot entirely rely the Government should be investingin replacingthe on America to do it for us. whole of the infrastructure throughout the UK. At the same time, though, if we are going to start Q94Mr Stevenson: Why do you think it is decades mapping out ways of getting there, there is a good away, Ms Foley? case for identifyingfirst mover markets—niche Ms Foley: I think there are some technological markets such as buses, for example, which would barriers still to be overcome. Hydrogen storage fuel at depots and have fixed routes—and they could technology still needs a lot more work. It is very provide demonstration markets for actually testing 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 12 Transport Committee: Evidence

11 February 2004 Ms Julie Foley and Mr Malcolm Fergusson out these technologies and all the other issues that significant fuel-eYciency improvements. Hybrids you mentioned to do with standards, which we have are just an acceleration of those improvements, and, not really had much thought about. yes, they could deliver quite significant savings, just in terms of more eYciency of energy use. Q97 Mr Stevenson: California has some of the most stringent emission standards in the US, probably in Q101 Ian Lucas: The reason I asked that is because the world, and yet the rest of the US seems to be we heard some evidence from a car company that followingthem. Is there not a lesson for us to learn was not in the hybrid car market, suggesting that in in the UK, in terms of Europe? fact it was only in buses and larger vehicles that Mr Fergusson: I think that is possibly so, absolutely. hybrid technology would make a substantial impact. The rest of the US does follow California, and in a Mr Fergusson: I do not think that needs to be the sense Europe follows California as well, with its case at all. There are hybrid cars on the market emission standards, so there are advantages in being already. at the front of the field, as longas you are not too far ahead. Q102 Ian Lucas: Do they make a real impact in terms of CO2 emissions? Q98 Mr Stevenson: Last question. Do both or either Mr Fergusson: It seems to me they do, and there is a of you feel that hydrogen cell technology is the great deal of potential benefit that we have only seen future, as some have told us, or part of that future? the beginning of, plus a lot of the technology is Mr Fergusson: It could be a major element. We have common to hydrogen fuel cells, so they contribute in to recognise the uncertainty still at this stage, which two ways. They contribute in more than two ways: could yet derail it or postpone it for some time; but it they contribute their own direct benefits, they help— seems quite likely that it is a major technology stage. as we heard from previous speakers—a lot with fuel Ms Foley: I think it is important to look at shorter- cell technology. There is a further issue around term and longer-term options, and to recognise the hybrids, which is that they provide a potential safety various pathways alongthat. So hydrogenis your net, if you will, that if we do not get fuel cells, we will longer-term possible option, and it is a very exciting have developed a good hybrid technology which option, but in the interim there are other things we might be able to work with liquid biofuels, for could be getting on with, such as hybrids and more example, and then we have another renewable energy-eYcient vehicles. Just because we have that option as well. future ideal should not provide an excuse— Q103 Mr Donohue: In terms of that very point, the Q99 Mr Stevenson: Is there a danger that the hybrid use of, say, cruise control to actually put an upper manufacturers will see this as an end in itself rather limit on speed could easily be made available. What than a step alongthe road to di Verent technologies? do you do in terms of tryingto force that into the Ms Foley: I think there is an argument for both. I system as far as manufacturers are concerned? know there are certain technical arguments to say Mr Fergusson: Personally I do think that speed is an that hybrids could help to provide a route towards important issue, and it is important from the fuel cell vehicles, not least because, as we heard in the environmental perspective as well as the safety previous evidence session, a lot of fuel cell vehicles perspective. There is quite a bit of potential, because are hybrid fuel cell cars. I do not think there is basically fuel economy deteriorates quite quickly at anythingwrongwith sayingthat hybrids are an end high speeds, because of drag, because of in themselves, though, because they do oVer very aerodynamic resistance. What means one would valuable carbon savings in the coming years. Our best use is not really in my department, I would say, climate change targets are set out to 2010, and but I do think there is more scope for imposing, or beyond that, and 2010 is not that far away now. If re-imposing, if you will, sensible speed controls as a we are going to meet that target, hydrogen is really way of improvingsafety and fuel e Yciency. not going to be part of that, so you need to look at more energy-eYcient vehicles like hybrids. I think Q104Mr Donohue: Have you heard of the smart car hybrids will be very important to meetingour low that is beingdeveloped, particularly in the States, to carbon car targets—set out in the ‘Powering Future stop drunk drivers beingable to gettheir car to Vehicles’ strategy is 100g/km CO2 tailpipe target— move? Have either of you heard of that? that is going to require hybrids and much more fuel- Mr Fergusson: I have not. eYcient diesel cars, not hydrogen, because it will just Ms Foley: No. not be around. Q105 Mrs Ellman: The UK Petroleum Industries Q100 Ian Lucas: On hybrids, do you believe that the Association say that biomass would be better development and the introduction of hybrid cars will directed to heat and power production rather than to have a real impact on CO2 emissions in the period road transport. Would either of you like to comment between now and 2010? on that? Ms Foley: I think it could do, because valuable Mr Fergusson: That is probably correct. In the carbon savings could be achieved with innovations present state of things that probably is correct, in car designs and technologies that help to make because we do not have nearly enough renewable them even more fuel-eYcient than they are already. sources available to generate all our electricity, and It is important to recognise that we have seen quite so on. Certainly if you are developingbiomass crops 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 13

11 February 2004 Ms Julie Foley and Mr Malcolm Fergusson that can be burned for heat and power, that is in low carbon vehicles. At the same time they do not probably a more eYcient process than making necessarily have a great deal of money between liquid biofuels. them, so that is a good point to make, and it is not Ms Foley: Just to add to that, you could also make clear to me as an external observer whether or not the same argument for renewable hydrogen; you they are makingthe best use of coordinatingtheir could say that renewable electricity is better oV being eVorts. So with the limited resources they have, to used for heat and power sources than it is for what degree are they avoiding duplication, are they convertingit into a fuel for vehicles. I think, whilst workingtogether,I am not sure they necessarily do that is true, the only danger it presents from a policy- that. makingpoint of view is that, if we do not have biofuels, if we do not have hydrogen, you are eVectively sayingthat maybe we should not be doing Q109 Chairman: Mr Fergusson rather implied that it any of these fuel options, we should let the transport was not just a research question. What was the other sector carry on in terms of its emissions and not phrase you used, “industrial policy”? worry about any fuels, but just focus on the heat and Mr Fergusson: Industrial policy. I think the high- power sector. That may be all very well, but given level objectives are quite well stated in our Powering what we have already said about transport emissions Future Vehicle strategy and we have a number of rising, that is a concern. I think that is an issue that bodies involved in doingthings,as Julie said; but needs to be considered, but it can sometimes be used whether we have all the instruments in place to as a means for not doingvery much in the short term. encourage research, development, demonstration, and then to move to getting these on to the market, Q106 Mrs Ellman: What targets would you think the I frankly do not think we are there yet. We have Government should set for the biofuels directive some of those elements, but not by any means all between 2005 and 2010? of them. Mr Fergusson: I do not really know, personally. The ones set out in the directive are probably achievable, Q110 Mrs Ellman: Where do you think the gaps lie? and the industry could live with them, as we have Would a new venture capital fund focus on this area? heard. Whether targets are the best way at this stage Mr Fergusson: I think that is the sort of thingthat of stimulatingthingsis partly an open question. I might be very important, yes. Y think there are a lot of unresolved di culties we can Ms Foley: That is definitely where the gap is. We touch on there. There are a lot of unresolved issues have research and development money and we have about how we get from here to there, if ‘there’ is PowerShift-like grants for providing purchase hydrogen, or whatever it is. These are really grants to the consumer. What we have is a gap where industrial policy questions, probably, more than we have a good idea, and bringing that to the they are environmental questions. marketplace. So the commercialisation phase is Ms Foley: The only thingI would add to that is I do where there is a huge gaping hole in the transport not have any particular view on the targets, similarly sector. The Carbon Trust does, through its low- I do not know what they should be either, although carbon innovation programme, already provide somethingthat I do find quite concerningabout the venture capital funds for other low carbon biofuels directive is that it refers to biofuels, as far as technologies. It does not however have anywhere I understand it, as a blanket term for all biofuels, and near enough funds to provide the same for transport. there are many diVerent types of biofuels, and their Mr Fergusson: Nor is transport its priority. environmental benefits vary a great deal between the Chairman: Miss McIntosh and Mr Lucas want to various types. It is unfortunate, that it does not come back on that. distinguish between diVerent types of biofuels, because not only do their environmental benefits vary, but they are all at diVerent stages of their Q111 Miss McIntosh: I think it is the ippr who have development. Some are more mature, such as advocated taxingfuels on a well-to-wheel basis. Can biodiesel from rape seed sources, and others need a you explain what particular benefits this will oVer? lot more commercial support and development. Ms Foley: This comes from a much wider question- mark over the way in which fuel duty diVerentials Q107 Mrs Ellman: Would you say that we have a are set, and a consciousness that the way in which clear strategy for cleaner vehicles in all the diVerent fuel duty diVerentials are set is not really well organisations involved? equipped to deal with future fuels like biofuels and Ms Foley: I think it is getting better. There are a lot hydrogen, because whilst it accounts for the of Government programmes and bodies that have emissions from the exhaust—that is how they are some kind of remit for low carbon vehicles. There is looked at—it does not account for the emissions that the Energy Saving Trust, the Carbon Trust, the DTI are created in the production and distribution of fuel cell programme— fuels. So well-to-wheels is a life-cycle approach. We would like to see fuel duty diVerentials that better Q108 Chairman: Have mercy, we are takinga record reflect the well-to-wheel CO2 emission benefits, of this. We got to the Carbon Trust. Yes? which for fuels like biofuels is very important. Those Ms Foley: The Energy Saving Trust, and there are environmental benefits vary a great deal, so it does many others; I will not go into them. There are many not really make sense just to look at exhaust diVerent types of organisations that have some remit emissions. 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

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11 February 2004 Ms Julie Foley and Mr Malcolm Fergusson

Mr Fergusson: Could I add that it will not be easy for and things like that more cheaply, probably, than the Treasury to deal with that. They are used to you can grow things in this country. So I think that taxinga product, which is litre of fuel. Actually alone will not necessari ly get the eVect that people havingto look back down the chain to the process want. and to the feedstock, there are methodological issues about how you estimate what the well-to-wheel Q117 Miss McIntosh: Is it feasible for the emissions are as well. Even if you know that, going Government to try to distinguish diVerent types of back down the process to work out what the level of biofuels accordingto the CO 2 emissions created in tax should be does not fit with the way the Treasury their production? does things. Mr Fergusson: Yes. Like Julie, I think it is necessary to do so. There are some serious methodological Q112 Miss McIntosh: The Energy White Paper issues that you have to tackle in terms of how you stated that 25% of UK agricultural land planted with calculate that, and arguably there is no one right indigenous wood crops converted to methanol, answer; but we will have to come to some sort of ethanol and hydrogen could in the long term satisfy view of what is a sensible assumption. most or even all UK road transport fuel demand. Ms Foley: Could I just add there, it is going to be Are you satisfied that the relative costs and the large very diYcult to do, because it is very diYcult to number of technical factors will be overcome to figure out a well-to-wheel measure that will fit into make that project viable? the Treasury fuel duty system. At the same time, Mr Fergusson: I am guilty of producing that statistic, though, I think with the biofuels industry there is a and it may be accurate and it may not. At this stage risk that you could make the same mistakes, in my there are issues of cost. The technology I think will view, that we have made with LPG, which is picking become available; the technology is not that options or developing duty incentives to support a complicated, to do these things. Cost always is an particular fuel technology. issue, and what we have now is cheaper, and these other alternative processes will probably be more Q118 Chairman: Let us be quite clear what it is you expensive. It is a question of how much you want to are proposing, then. pay and where you put your money. Ms Foley: We welcome the statement on alternative fuels framework, and what we would like to see is a Q113 Miss McIntosh: If you say that oil is a finite fuels framework that is based on environmental resource, then they will come into their own outcomes, so the well-to-wheelCO2 emissions, not probably more at that time? “Shall we set this duty incentive on LPG at X? Shall Mr Fergusson: Yes; I would think that is right. I we set the duty incentive for biodiesel as X?”, or think in the longer term biomass oVers a second whatever, but that they are all treated as part of the route to renewables, basically, over and above wind same framework, and that this reflects the CO2 energy, of which there is not nearly enough to power emission outcomes. the transport sector. It is an open question whether Mr Fergusson: I would add that I do not think that actually biomass is enough on its own to power the would necessarily be adequate to generate a decent transport sector, but it certainly oVers you a much level for the UK industry. For example, if LPG had better chance if you can move into another fuel. been given a duty discount that reflected the CO2 benefits, we would not have any LPG. We could Q114Miss McIntosh: Biomass would be more bird- argue whether that is a good thing or a bad thing. It friendly, whereas wind turbines are not greatly bird- does need probably a range of incentives. It needs friendly, is that fair? the right carbon signals, but it probably needs Mr Fergusson: Possibly. There is a range of issues industrial measures as well. around that. Q119 Chairman: Do we know what range of prices Q115 Miss McIntosh: Could I just ask you this: the we are talkingabout, the kilometre-driven, or pre-budget report about the duty issue, to encourage miles-driven? more eYcient types of biofuels, how do you both Mr Fergusson: I am not sure I understood the expect the announcement will aVect the production question. and use of these biofuels? Mr Fergusson: Are you thinkingabout the 20 pence Q120 Miss McIntosh: May I help? I think what the per litre? Chairman is sayingis that we would need to be able to convert it to a figure that is understandable for the Q116 Miss McIntosh: Yes, for example. consumer. Mr Fergusson: My feelingis that it is not goingto Mr Fergusson: Yes. have a lot of impact on UK production, because certainly both the biodiesel and the bioethanol Q121 Miss McIntosh: Are you just sayingit is well- industries claim that they need rather more than the to-wheel, or are you sayingit is well-to-wheel and Treasury is oVeringthem, in which case it probably from the exhaust point as well? will not happen. There is a bit of a trap here anyway, Mr Fergusson: I think you probably have to gloss because even at that level, or certainly the higher over that fact. It probably is going to be diYcult to level of discount, it is not at all clear that the UK explain to consumers that, “Yes, there is carbon industry is competitive. You can import palm oil dioxide comingout of the e xhaust pipe, but that is 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

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11 February 2004 Ms Julie Foley and Mr Malcolm Fergusson all right because we can soak it up somewhere else”. I Mr Fergusson: Absolutely. There are plans to do think you just have to work on the basis of an overall that, and you could after all express that in terms of carbon reduction term. typical fuel cost savings over a typical average mileage per year, and then you could really tell people what they were saving. Q122 Chairman: Are you talkingabout a di Verential tax on the car, rather than the ongoing fuel costs? Mr Fergusson: Both may be relevant, dependingon Q126 Chairman: That is what we were tryingto get what it is you are tryingto encourageat what point. at. You could demonstrate that there was some A biofuel oVers a clear—or fairly clear, although it recognisable sum that could be sold to the consumer; varies—reduction in carbon per litre of fuel or per that is what we were saying. Mr Fergusson: Hopefully so, yes. It is not the first or unit of energy output. On top of that, and almost only thingthey would consider, of course. independent of that, you can have vehicles which are more eYcient, so actually you might well want to incent both in diVerent ways. Q127 Mr Donohue: There is a fuel that is heavily advertised in BP petrol stations, Premier, in terms of savings, in terms of the number of miles per gallon Q123 Chairman: Yes, but what you are seekingto and what it is doingto the environment. Is that do, surely, is to persuade people who are going out somethingthat you support? Is it somethingthat has to buy a vehicle that they would benefit in two ways: great impact? It does demonstrate itself as being they would benefit in what they were doing quite popular. environmentally, and therefore they could feel good Mr Fergusson: Personally I think we have had too about themselves, but basically they would be doing many green fuels over the years, and I think it has left somethingthat was actually of use to them. In order everyone terminally confused, unfortunately. to do that, since we have already taken evidence that Ms Foley: I think it is an unfortunate area, the people do not really understand vehicle excise alternative fuels area. There are so many diVerent duty—they are not really clear about that—and types of alternative fuels now, and it has become presumably you would not think that the amount even more complicated with all the diVerent types of was so stunningthat it would encouragepeople to biofuels, not just from the perspective of the take a radically diVerent decision from the one they motorist turningup at a petrol pump, on the originally intended. How do you get over that? You forecourt, but also for fleet managers, local are sayingthat you could possibly look at estimating authority managers trying to think about what kind some benefit from the car and from the fuel, but how of vehicles, to green their fleet, they should invest in would you translate that into terms that would for their fleet, because everythingis apparently encourage people to go into a showroom and say “I green. I think in terms of having some kind of label don’t want that filthy car with its filthy engine; I that reflects energy eYciency benefits, that would be want somethingthat is clean and beautiful”? really helpful. Mr Fergusson: I think it can be done. One thingthat has not come up yet is the issue of labelling. The Q128 Chairman: Who would set the standards for experience is there, as you know—we have that with that? The diYculty, frankly, that I have, is that on electrical appliances. In fact the ratingthat that is the one hand you are sayingthat the Government based on is very complicated, but nobody worries should draw incentives in taxation and set the about that. They trust the label, and they know that parameters for encouraging us to move towards A is better than B, and B is better than C. these changes so flexibly that they are not choosing one particular kind of technology over another. You must know that the Government draws legislation Q124Chairman: Has anybody ever done an accurate very precisely when it comes to money, and no assessment of how many people actually choose legislation is drawn in a flexible, easily interpreted diVerent electrical goods on the basis of what it says way, with two or three diVerent ideas in the same on the label? clause, because the Inland Revenue would be down Mr Fergusson: Yes, that is beginning to emerge, and on you like a ton of bricks. On the other hand, you although it was a shaky start, it took a while to are saying: “Do not worry about it; we could give understand it, there is evidence beginning to develop people a series of simple things that they can now that if you have good labelling and you have the understand.” What do you see as beingthe firm right pricing as well, preferably, you can actually steps? I am sorry to be pedantic about it, but I am change the market over time. your consumer; I am going to buy some kind of vehicle and will look at the fuel it uses. How are you going to encourage me to come up with the sort of Q125 Chairman: So what you are sayingis that you solution that you are suggesting, with the aid of the would not go into a detailed explanation of the Government? The Government is sittingon my rights and wrongs of either a particular type of shoulder: how do we get these decisions? Why vehicle or a particular type of fuel, but you would should the taxpayer pay? Are you assumingthat the give them some recognisable symbol that would general environmental benefit to the taxpayer is convince them that they were on the side of the gods? enough to mean that the Government would give A bighand, saying“Good person to buy this”? encouragement? Is that what you are saying? 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

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11 February 2004 Ms Julie Foley and Mr Malcolm Fergusson

Mr Fergusson: In the longrun it would obviously Q133 Miss McIntosh: Perhaps I did not express have to pay for itself, but if you are talkingabout the myself very well. All I am concerned about is that the incentives for getting the new technologies into the process of producingthe fuel will be more market, then I think there has to be a place for environmentally damaging than the production of government intervention, and ideally it should all be oil, for example. joined up. We have already got this banded vehicle Mr Fergusson: I do not think it should be. They are excise duty; and ideally that should link up with the fairly benign processes. The carbon balance of the car labellingsystems to work at the point of various stages in processes is fairly well understood. purchase. That could be determined by the UK Government. Further down the line we will have an Q134Ian Lucas: What has driven the increase in the EU one, although that is probably some years away weight of vehicles? yet. On top of that, you can establish incentives for Mr Fergusson: A general increase in size is one thing. those in the grade A and do something similar to I think I said in our paper that a Mk 4 Volkswagen PowerShift perhaps. Polo is bigger than a Mk 1 Volkswagen Golf; so within individual size categories they are just getting Q129 Miss McIntosh: Can you convince the bigger. The Mk 5 Golf is bigger than the Mk 4 Golf. They are getting bigger and people are trading up Committee that the new ways of production, the new classes of car, and there are lots of extra accessories bio-products, are going to be more environmentally and gadgets and so on. The rest are safety factors, friendly than oil and gas? but those are not the only things. It is sometimes Mr Fergusson: Can I convince you? I do not know. cited that safety is the only issue, but it is not. There I am convinced that they oVer some benefits. They V is not a perfect correlation between weight and definitely do o er some benefits in terms of carbon safety by any means. It is just an expansion of dioxide, at a price. expectation.

Q130 Miss McIntosh: What I am concerned about is Q135 Ian Lucas: Do you think there is any realistic that the Government is subsidisingproduction of a way to persuade consumers to go for lighter, more new fuel when the production of it will be more environmentally friendly vehicles rather than environmentally damaging than what we are using flasher, more hi-tech vehicles? Is that a realistic at the moment. You think that is not the case. possibility? Mr Fergusson: I think that is not the case, and, like Ms Foley: I think that is a good point to make and everything, it depends how you do it. There are more I notice that Paul Everitt of the SMMT made that or less good ways of growing any crop, for example, point because you cannot take away the fact that and it is clear that there has to be some focus on best people want to choose the car they want to buy. practice there. They very rarely make a decision based on the fact that it happens to be environmental. We have seen the very popular small cars like the Smart Cars Q131 Miss McIntosh: It is not the growing of the become very popular with certain types of groups of crop; it is what you do with the crop to produce the people. At the same time, however, this is where oil that concerns me. perhaps hybrids have their advantage because they Ms Foley: That is why we were arguing for a well-to- tend to be larger, more luxurious vehicles, but they wheel measure. You are talkingabout biofuels, but do give eYciency benefits. I think smaller what about diVerent types of hydrogen and natural lightweight diesels may well be challenging to sell to gas? They are all the other things that would have consumers, but perhaps hybrids could fill that gap. to be— Q136 Ian Lucas: Do you think there has ever been a Q132 Miss McIntosh: I am interested in biofuels real attempt to sell cars on the basis of their because we produce mountains of— environmental friendliness? Most of the Ms Foley: They would all have to be treated equally, advertisements that we have seen look at the hi-tech though, would they not? They are all part of aspects and enhancements rather than whether or providingfuel duty di Verentials. I understand the not it is environmentally friendly. point you are making, but what we currently have is Ms Foley: They tend to go hand-in-hand because a very unclear duty support. Although the Treasury hybrid vehicle is an incredibly hi-tech vehicle. Many has already signalled that it recognises this is a of these future vehicles are not, to put it very crudely, problem and is movingaway from it for certain types milk float type vehicles that are very unattractive to of green fuels, particularly the road gas fuels, which consumers; they are very interestingvehicles. really are just not oVeringthose environmental Chairman: I would love to drive a milk float, but benefits. There is literally millions of pounds of nobody has ever given me the chance! subsidy going into that area already. I think we fully appreciate that developingthe well-to-wheel Q137 Ian Lucas: Speakingabout milk floats is not measure is quite diYcult, but if you ask why should particularly relevant to the next question. If vehicles we do it, the current system is not working, so we on UK roads were to abide by the speed limit at all need to think of somethingnew in terms of providing times, would that have a significant impact on CO2 support to alternative fuels. emissions? 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

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11 February 2004 Ms Julie Foley and Mr Malcolm Fergusson

Mr Fergusson: Yes. I calculated that some years ago. interests for the development of alternatives. There I believe it would. As I said earlier, the fuel demand was evidence some time ago of an engineer who goes up quite steeply once you get up to speeds of developed a bearing and drove cars for 150 miles or 70–80 miles an hour. The optimum for most cars is somethingwithout oil in the sump. All of that would typically around 50 miles an hour. You could save a be against the oil industry, which is a fairly lot by maintainingthe speed limits on higherspeed significant lobbyer of opinion in this country, and it roads. would be opposed to that. Do you have any evidence of that? Q138 Ian Lucas: So increasingthe speed limit from Mr Fergusson: Not particularly, I would say. 70 to 80 miles an hour would mean— Certainly the downstream oil industries are Mr Fergusson: A very bad idea, yes. suppliers of energy currently in liquid form, and they Ian Lucas: Very interesting: I wish you had told me are not stupid; I am sure they will work out how to that yesterday! make a profit of whatever we put in our cars. Chairman: On that very realistic note, I thank you Q139 Mr Donohoe: Do you have any evidence of the very much for coming. When you have got your fact that the oil companies would deflect away any system for labellingwork ed out, perhaps you would invention or alternatives? Indeed, it is against their come back and tell us.

Witnesses: Mr Malcolm Watson, Technical Director, UK Petroleum Industry Association and Mr John Mumford, Vice President UK region, BP Oil UK, BP plc, examined.

Q140 Chairman: Gentlemen, would you introduce Q143 Chairman: Are we happy that those sites yourselves? are secure? Mr Watson: I am Malcolm Watson, Technical Mr Mumford: The strength of the oil supply system Director of the UK Petroleum Industry comes from its diversity; it comes from the fact that Association. there are a number of suppliers. One of the great Mr Mumford: I am John Mumford. I head up BP things about oil is that you can move it around Oil UK, which is the downstream operation of BP relatively easily; so providingwe have a number of in the UK, and I am also on the Council of UK suppliers—and I think there will be a significant Petroleum Industry Association. number for many years to come—then that security question is fine. Q141 Chairman: Thank you very much. Do either of you have anythingyou want to say? Q144 Chairman: You are quite happy about the Mr Watson: I think we would like to emphasise fact that a major supplier like Russia or Africa is three basic points. First of all, we believe in the not, in the next fifty years, going to encounter any importance of improvingvehicle e Yciency. political upheaval that could in any way endanger Secondly, we believe firmly in the importance of your supply. You expect goodwill to reign customers acceptingnew technology;and the throughout the world. customer’s viewpoint must be taken into account. Mr Mumford: I am sayingthat individually each We also look at the ease of introducingnew fuels. source could well suVer problems, but so longas In that respect we see liquid fuels as been easier to there are a number of sources and you have introduce than gaseous fuels. There are three basic flexibility, then that flexibility will provide you reasons for that. They are easier for the customer. with support. The customer is used to puttingliquid into vehicles. We see liquid fuels as beingoften inter-convertible, Q145 Chairman: That is an excellent theory, but we ie, you can add biodiesel to standard diesel and the asked you first whether you expect to import, and customer can use their existingvehicle, and there is whether you are convi nced that you will have that no need to change the vehicle. Many of the new degree of flexibility, because the sites you have technologies being looked at are looking at mentioned are not always noticeable for their producingliquid fuels, so there is an easy path to stability. get the new technology into the market. Mr Mumford: No. At present, we are comfortable that in totality there will be enough stability. Q142 Chairman: That is helpful. Figures suggest that owingto dwindlingsupplies the UK is going Q146 Ian Lucas: Why is the United States much to become a net importer of oil by about 2010. less comfortable about securingits supply than Where is most of that oil and gas imported from? you are? Mr Watson: It would be imported from a number Mr Mumford: I have no idea. of sources. Currently we import very little oil into the UK. In the future we will import from oilfields Q147 Chairman: You must talk to them. They are in Africa that are beingdeveloped now; there is the not only very powerful in your own industry but Middle East; my colleague’s company is investing largely capable of dictatingmany of the terms and heavily in Russia: all of these are potential sources conditions under which you operate by their of oil. control of world markets. 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 18 Transport Committee: Evidence

11 February 2004 Mr Malcolm Watson and Mr John Mumford

Mr Mumford: You are askingme to speculate. amount of oil around and I think the industry is happy that there will be enough reserves for many Q148 Ian Lucas: You have operations in the decades to come. United States. Mr Mumford: Yes. Q153 Mr Donohoe: Is there any other alternative use of fuel that you have bought up the patents for Q149 Ian Lucas: Do your operations in the United over the years? States have the same view on the security of supply Mr Watson: If you are referringto the earlier of oil as you do? question about the bearing, I am not aware in any Mr Mumford: Personally I do not know because I shape or form of that beingdone. I am aware of only personally deal with the UK, so I cannot companies investingmoney in fly wheels, which is answer that question from personal knowledge. I one way of usingenergymore e Yciently. For can provide you with a view later from the main example, by puttinga fly wheel on a bus you can US operations. recover the energy when you brake. A lot of money was put in. It was not successful. We are, for Y Q150 Chairman: Have you, for example, example, supportingenergye ciency. That will cut considered whether it might be sensible or perhaps the use of our products and we accept that. safer to develop indigenous biomass and hydrogen resources as a protection? Q154Mr Donohoe: You would concede, would you Mr Watson: The industry is lookingat alternative not, that it would not be in the interests of your sources, includingbiomass, but first of all industry were alternatives to be found that were conventional oil is not the only source of transport more environmentally friendly and even cheaper fuels. There is unconventional oil, as it is called. We than oil? have the Athabasca tar sands in Canada, where the Mr Watson: It is not in the interests of our industry oil industry has already invested in developingthe to block progress, and I do not believe our technology to exploit an additional unconventional companies would do that. source. We are also lookingat convertingnatural gas in what are called stranded fields. These are gas Q155 Mr Donohoe: So there is no evidence to fields around the world where there is not a ready that eVect? market for the gas, which we convert to liquid fuels. Mr Watson: There is no evidence to that eVect that These would also extend supply and diversity. We I am aware of, and I do not believe there is are also lookingat biofuels. The industry markets evidence. biofuels in a number of countries. It is not against biofuels. We are developingnew processes to Q156 Mr Donohoe: You then would not accept, if extend the supply of biofuels, for example there were to be a sudden intervention, as there has convertingstraw into ethanol. Companies have been in other sectors, where somethingchanges invested money in developingthat technology,and dramatically, and you were to be put out of will bringit to the market if it is economic. We are business, that you would be concerned about that. looking at converting wood, through gasification, Mr Mumford: This is a hypothetical question. to liquids. Companies have put money into a pilot Mr Watson: If we were put out of business, the oil plan for that. So we are developinga wide number business, the large companies would obviously be of resources, includinghydrogen.We are looking concerned. They would also be lookingto exploit at our side of the business. Experimental filling the new energy source. The oil companies are stations are beingbuilt as a learningexercise. We sellingenergyto consumers. If an invention came are lookingat how we distribute hydrogenand the along and, for example, gave Exxon an advantage best way to do it. We are lookingat a wide range over BP, Exxon would want to use that. They are of potential futures. competitors. It is not a cartel; they are very strong competitive companies. If you look at fuel prices in Q151 Chairman: Does the industry have an the UK, you will see that we supply the cheapest estimate of what point the supply of oil will be low pre-tax petrol and diesel in Europe. enough to make it sensible to introduce an alternative fuel into the market? Q157 Mr Donohoe: The environment is becoming Mr Watson: I can answer that question in two more and more important, and the younger ways. First of all, you can look at conventional generation is even more concentrated on it. Is that supplies of oil. Conventional oil supply is estimated one of the reasons why you have introduced this to be about three trillion barrels. To put that in supposedly very environmentally friendly fuel? The context, we have used one trillion barrels of oil to petrol at the top end that costs 6-7 pence more has date. Beyond that, there are unconventional oil been argued to be more environmentally friendly, reserves of somethinglike four trillion barrels. giving more miles per gallon. Is that likely to be developed more than it has been to date? Q152 Chairman: How do you define Mr Mumford: I think there is a lot of opportunity “unconventional” in that sense? to improve fuel technology. I think we have been Mr Watson: That is the tar sands and heavy oils. rather lulled into an assumption that conventional Not all of that can be exploited at current prices. fuels are at the end of their technological evolution. Then there is gas to liquids. So there is a fair What BP has done with its ultimate fuel is to put 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 19

11 February 2004 Mr Malcolm Watson and Mr John Mumford several years of development into changing fuel compression, using the equivalent of 25% of the technology; and this particular fuel has three pieces energy stored in the fuel. Is this energy eVective or of technology in it: to keep the engine very clean environmentally friendly? so that the engine does not age the way it would Mr Watson: This is the debate you were having normally; there is a lubricant in there which means some time ago on wells-to-wheel analysis. I am that the lubricant in the sump does not deteriorate sorry to come back to this. We have been looking as it would normally; and finally there is a at a wide range of pathways to see what option or combustion enhancer, which means that more of combination of options produces the least the energy in the fuel is usefully extracted by the greenhouse gases—which are not just carbon engine. Putting that fuel into an existing vehicle dioxide, because there are other gases such as makes it behave like a much younger vehicle. That methane and nitrous oxide which are important is an example of technology improving the way that greenhouse gases and should be included in the the vehicle operates. Our experience is that sums. We have looked at that, and we have customers are very interested in this. evaluated umpteen pathways; and I am sure there are more options. That is the way we are tryingto establish the best approach. Liquefaction does Q158 Mr Donohoe: Is it a sector that is growing? V require more energy; but on the other hand it I used it and I did not find any di erence in the produces a fuel that is easier to transport. One of car, I have to say. Is there any real acceleration in the problems we have is movinghydrogenaround. that process and is it likely to dominate the marketplace more? Mr Mumford: Firstly, it has been very successful. Q163 Miss McIntosh: What impact do you imagine There has been a very significant take-up. Will it the European Biofuels Directive will have on the dominate the market? I do not think so. I think fuel market? there will still be a very large part of the market Mr Watson: It depends on the Government targets that will want a cheap, basic commodity. that are set, obviously—if the Government chose to meet the 2010 target, which is 5.75% by energy content. Biofuels have a slightly lower energy Q159 Mr Donohoe: Is there anythingcoming content, so by volume would be sellinga bit more. behind that from your company and the industry We would be required to sell 7.5% of our road fuels in general that will take it to the next stage? as biofuels. If the Government target were met, we Mr Mumford: Yes, we see it as a step alonga path would replace some of our diesel with biodiesel. As and our scientists are workingon the next we are short of diesel, that is not a problem to us; generation. and we would replace some of our petrol by ethanol or perhaps ETBE. There are problems with ethanol Q160 Mr Donohoe: What timescale are you talking in the marketplace. Its vapour pressure increases about for the next generation coming in? emissions and there is a water pick-up problem that Mr Mumford: I think we are talkinga few years. is of concern to the industry as we do not want Chairman: And they have both got to be cheaper. water to end up in jet fuel when we distribute it through a common system. Technically it can be done, and we are marketingthese products in other Q161 Miss McIntosh: Mr Watson, at the outset you countries. It is a question of bringing the lessons listed three tests, one of which was consumer from other countries to the UK and applyingthem. acceptance. In your view, will biofuels meet this test of consumer acceptability? Mr Watson: To ensure that biofuels do, we work Q164Miss McIntosh: If hydrogen or biofuels are with the motor industry and with suppliers to to be the fuels of the future, how would you see produce European standards. These are standards the fuellinginfrastructure best beingdeveloped? Do of quality that will ensure that the biofuels put in you think there is scope for private investment and your vehicle do not aVect the performance in any investment by government? way, ie, will not damage the engine. There is a Mr Mumford: First, on the question of biofuels, we possibility, if you use raw vegetable oil unprocessed see a great advantage in putting those fuels through that you can get problems over time. We have the existingsupply infrastructure, because they are agreed standards for biodiesel that are published, materials that can readily go through—particularly and we are doingthe same for bio-ethanol diesel alternatives—and there are potential currently. Once they are complete they will be developments there that will make those fuels much incorporated into the appropriate British more miscible with existingfuels. From that point Standards, and as such we are sure we can do it. of view to the manufacturingplant it becomes We have also got product quality inspections in indistinguishable in the eyes of the motorist from conventional fuel. If we are talkingabout place, as part of our business to ensure the fuel we V supply to you is of adequate quality. hydrogen, then that is a di erent situation. There is quite clearly a step change there, and there will need to be substantial investment particularly in Q162 Miss McIntosh: If my understandingis new infrastructure. BP is already investingin a correct, you can produce hydrogen either by number of hydrogen stations around the world. At compressed hydrogen or liquefaction of hydrogen. the moment, we are experimentingwith di Verent Liquefaction requires more energy than types of technology in each station. There are a 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 20 Transport Committee: Evidence

11 February 2004 Mr Malcolm Watson and Mr John Mumford number of options: there is the option where you Q169 Mrs Ellman: In your written evidence you say eVectively create the hydrogen at the site, which that the Government has created unnecessary requires miniaturisation of the existingsteam- complexity and increase d the opportunity for reformingoption. There is an option where you fraud. Were there any specific things you had in distribute the hydrogen in liquid form, which is mind? relatively viable because of the transport Mr Watson: There are two points we were trying economics; and there is one where you distribute to make in that. In terms of fraud, we were talking the hydrogen in compressed form, which is about schemes like blue diesel for lorries where we horrendously expensive because you move an awful would have diesel quality fuel with a dye in it, lot of vehicle for very little hydrogen. We are doing widely available throughout the UK at a reduced a “do/learn/do” approach with quite a variety of duty rate. However, there is already a serious pilot schemes. problem of launderinggasoil, and extendingthat to lorries would, in our view, increase the Q165 Miss McIntosh: Are any of the hydrogen opportunity for fraud. That is the second point. plants in the UK? The first one is that if you look at the future we Mr Mumford: We are attemptingto build a retail believe you should be settingstandards, targetsif you like, and leavingindustry to find the most site in Hornchurch at the moment. We are having Y some diYculties. e cient way to meet those targets, rather than pickinga fuel and backinga particular fuel.

Q166 Mrs Ellman: You criticise the Government Q170 Mrs Ellman: Are there any examples? for pickingwinningfuels too early. What have they Mr Watson: We are concerned with a large number done wrong? of fuels potentially which could come towards the Mr Watson: We have not criticised the marketplace: methanol, hydrogen, ethanol—all of Government; we have said we do not believe the them have got merits and demerits, but we would Government should pick winners too early. like the Government to set targets and let the motor industry and the oil industry find the solution that Q167 Mrs Ellman: What do you think they should meets the targets. be doing? Mr Watson: This is a question primarily for the Q171 Mrs Ellman: You are sayingthat you do not Government to decide where they want to go. We think the Government should do anything. will supply the Government with information on Mr Watson: No. If you look further on, you will what we believe are the best routes. The European see we believe the Government should help oil industry, the European motor manufacturers demonstrate the technology. We believe that we and the European Commission’s Joint Research should be encouraging industry to develop Centre got together and carried out a wells-to- competitive new technology; in other words, you wheel study on the way forward. They identified set a framework and set a target, and you leave routes. The European Commission is lookingat industry to come up with the best solution to meet that and has published its own views about the way that target. forward. As an industry, we are supplyingthe Government with the information, but ultimately it Q172 Mrs Ellman: Can you give me any examples is the government’s choice on how it implements of where the Government has failed, or steps it biofuels or hydrogen from the information we should have taken? Are there any specific areas? supply. Mr Watson: I cannot think of any. Mr Mumford: I think the examples I quoted just Q168 Mrs Ellman: You must have some views on now—I would not describe them as failures; I what you would like the Government to do. I would describe them as—the Government has accept the Government has to be the body to decide come in and has incentivised one option, but but what would you like them to do? actually that was only one of a whole family of Mr Mumford: Could I give a couple of examples? options. It is somehow getting these incentives in a If we take biofuels, the current system of way that they encourage all of the viable routes, not incentivisation encourages the esterification of just one viable route. vegetable oil, and that is a viable route but it is not the only route; you can also hydrogenate vegetable Q173 Mrs Ellman: What would you like the oils, which we believe is a more eYcient route; but Government to stop doing? that one is not incentivised. If you look at getting Mr Mumford: One of the things worth reflecting on gas into road transport, then you have an option is the nature of fuel duty. You start with energy of taking the gas directly into your vehicle or you and take it through various processingplants and have the option of convertingthe gasinto a liquid then take it into the market. Once you take it into and takinga liquid into the vehicle. One of those the market, you chargedut y. Then it is distributed routes is incentivised and the other is not. All we in the market and it is then used for some end use. are sayingis that there are more options out there Dependingon that end use , you can have a variety and that the incentives should be cast in a way that of diVerent duties for exactly the same product. encourages all routes which meet the fundamental Depending on what the product is, you can have a objectives. variety of duties. When we talk about renewables 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 21

11 February 2004 Mr Malcolm Watson and Mr John Mumford comingin, we are sayingthat dependingon the Mr Mumford: No. I would say firstly we do see history of that fuel and how it was made, there may biomass as playinga significantrole. It is another be diVerent duties. At one point where a fuel leaves hydrocarbon, a non-fossil hydrocarbon that can be a refinery or leaves bond, you have to somehow used in much the same way as fossil hydrocarbons know what has happened to it in the past, what it can be used. Secondly, we are puttinga lot of is and what will happen to it in the future. That investment into supportingfuel cell technology, seems an awful lot of complexity to heap on one and the infrastructure. We are tryingto be realistic small point, which is the fuel leavinga refinery. about the timescale that that will come in.

Q174Mrs Ellman: There is an implication in your Q178 Mr Stevenson: Do you subscribe the view we written evidence that the UK may be duplicating heard earlier that that timescale could be 2020? international research that has already been done, Mr Mumford: The BP view would be that the first rather than concentratingon what is best for this commercial available fuel cell vehicles will probably country. Is that right? start to go on the market in about 10 years’ time, Mr Mumford: I do not feel that. I feel that a and that it will be 20–30 years before they are at number of the technologies we are talking about, what one would call a reasonable scale of particularly fuel cells—the amount of money that penetration, say 10%. is required there is so huge that that research seems to be done globally, and so there are global centres. Q179 Mr Stevenson: Is it the requirement of the car That does not mean to say that the UK cannot be manufacturers or is it the infrastructure that you part of that, and the UK has got a very good are able to provide in terms, for example, of contribution to make. The UK has led in a number hydrogen cell technology? of areas in the implementation of new technologies Mr Mumford: I think the way to look at this is that in the past. There is plenty that we can do. vehicles are not homogeneous. Some vehicles are naturally return-to-base vehicles, delivery fleets and Q175 Mrs Ellman: Is there any specific thingyou so on; and with those types of applications it is would like the UK to do? I know you have spoken relatively easy to change the fuel and change the in general terms about approaches, but is there vehicle together; so you can get quite early somethingyou can put forward that you would like introductions there. Als o, some of the alternatives the Government to do? we are talking about have great advantages in an Mr Mumford: The thingI would most like is to see urban environment—for example things l ike this flexibility of the way energy sources get to the exempting vehicles from congestion charge. You end customer. In other words, we encourage can see areas where you can bring a new technology diversity of energy source but then we allow those in early, and because it is a very focused area it is diverse energy sources to be brought in to the possible to bring in the re-fuellinginfrastructure market in a homogeneous way. What I do not want simultaneously with the vehicle. This was the to see is each energy source having its own supply learning we had from bringingin AutoGas. Over infrastructure and its own vehicles, so that each one time, that gets extended out and coverage increases; is like a silo. In that way, I think you will get so it is a bit like a wave front comingthrough ineYciencies and you will not get security of supply rather than throwinga switch and everything and all the other things we want. That flexibility, changing. that inter-changeability of fuels, is very possible. The fuel industry can deliver it; and that is Q180 Mr Stevenson: Do you think there is a need somethingI would like to see. for a catalyst to focus on this ground-breaking technology which really gets rid of the internal Q176 Chairman: Is that not the kind of competition combustion engine, does it not? It takes us quite a that brings forward new ideas? It must happen in leap forward. We saw in California, for example, many technologies, so why should fuel be any the California fuel cell partnership. I ought to know diVerent? but do not: is there anythinglike that in the UK Mr Mumford: It is happening, and the flexibility I or Europe? am talkingabout facilitates that competition. You Mr Mumford: There is the CUTE project, which is do not have to create an entire supply chain in the partnership that BP is part of. There have been order to bringin a piece of technologyin one part. a number of projects like that. The hydrogen You can bringit in in that part. operation that we are doingin this country is supported by the Greenfield Challenge. Q177 Mr Stevenson: Do you feel there is any real future for hydrogen cell technology? Listening to Q181 Mr Stevenson: But not comparable to the your comments and answers to my colleagues, you California fuel cell technology. appear to believe there is suYcient oil for decades Mr Mumford: Not on that scale. to come and that we should concentrate technology Mr Watson: The European Commission is on makingoil more e Ycient and more currently lookingat what it considers as lighthouse environmentally friendly, and develop alternative projects, which would be a limited number of liquid fuels rather than bother with hydrogen cell projects in Europe which would try and achieve the technology. Is that fair? same thingas the California project. 9479981001 Page Type [E] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Ev 22 Transport Committee: Evidence

11 February 2004 Mr Malcolm Watson and Mr John Mumford

Q182 Mr Stevenson: Your companies would be quite a bit. We have got the introduction of part of it. biomass into fuel, so there are a number of Mr Mumford: Yes, very happy to be. incremental elements which will all add together.

Q183 Miss McIntosh: I understand that 22% of UK Q187 Chairman: What is also true is that at least greenhouse gas emissions are created by road three major countries in the world are following transport, and yet in the UK-PIA memorandum it diVerent paths; they may be takingsome part— states that emissions of carbon dioxide from road some of them are assuminghybrid technologyis transport will not rise in this decade. I could be going to be the way forward and some are naughty and say, “you would say that, would you assumingthat they will gofairly quickly towards not?” If the Government estimates of the amount hydrogen; and some are assuming there are interim of road traYc growth will be 20–25% by 2010, then states. When the Committee was in America we by definition there will be more emissions because saw very clearly that there are completely diVerent there will be more cars on the road. policy views in at least three major manufacturing Mr Mumford: This is where the improvements in industries throughout the world. What degree of engine vehicle technology are cutting in. What we flexibility would it require of suppliers like are seeingat the moment is that the improvement yourselves, in terms of the diVerent ways of in vehicle technology is improving fuel eYciency deliveringfuel? What degreeof standardisation faster than the traYc is growing; but it is a very would you expect, and how longwould you expect finely balanced equation. You are right: it is a that standardisation to take to achieve? How many personal sense of what is going to happen in ten years are we talkingabout? years’ time. Mr Mumford: The motor manufacturers tend to Mr Watson: In the last five or six years we have work to global standards or nearly global seen an increase of 1.5% a year in the number of standards in terms of engine technology, so that vehicle kilometres driven. At the same time, we in itself— have seen no increase in carbon dioxide emissions from fuels; so we have seen a 7.5% decrease in Q188 Chairman: That, in itself, would alter if they vehicle emissions over that period. That is reflected were facingthe demise of the combustion engine in the ACEA voluntary agreement; they have said and the creation of a completely new engine. it would reduce emissions by 2003 by a certain Mr Mumford: Yes, but as a fuel industry, we have amount, and by 2008 by another target—25% was the flexibility to develop almost any hydrocarbon referred to earlier. Then they are talkingcurrently into any other hydrocarbon or into hydrogen, so of a target post 2008. So the pressure on vehicle we would have huge flexibility in what we can do eYciency from the European Commission in our manufacturing— continues and comes from the Member States—

Q184Chairman: Are you assumingit will all get Q189 Chairman: So as we sit here today, you are better after the end of the voluntary agreement? confident that even though there is a decline in the Are you sayingthat there will be a continuing amount of oil available, you are quite convinced improvement? that your supplies, or the UK supplies, would be Mr Watson: There was a report by Ricardo which secure in our existingand far distant future. You Y states that if you take a 2002 vehicle like the Golf, are quite convinced you have su cient flexibility to they can improve its vehicle eYciency by 50%; ie, respond to any one of the challenges of at least V it will consume half of the energy by 2017. These three di erent major systems of fuels that are being are vehicle consulting engineers who have given developed; and you are also very confident that their own estimate of the potential. It is still the motor manufacturingindustry adheres to quite large. standardisation at the global level, and therefore will not persuade you that there will be any problems? Am I paraphrasingthat correctly? Q185 Chairman: Do you think we are going fast Mr Mumford: A number of options are being enough towards our target of reducing carbon explored at demonstration level. Those options, as dioxide as a nation? they come into production, and the speed at which Mr Mumford: I would like to observe, in answer to they come in—we will certainly be able to invest to that, that the large discrepancy between the carbon accommodate that. dioxide generation according to how you drive and the size of vehicle—all of these eYciency gains can achieve a lot. We know we will have vehicles that Q190 Chairman: As longas we are talking2010, will run at less than 100 grams per kilometre. 2015, 2020. Mr Mumford: If you look at the example of what Q186 Chairman: Yes, but you have already said we did with AutoGas when we were asked to create that so far there has not been this change. What do a national network for that, we did it in a few years. you think will be so dramatically diVerent that will The industry can respond fairly rapidly once there produce this change? is a very clear direction. Mr Mumford: I think that hybrid technology has a large part to play. I believe there are improvements Q191 Chairman: On infrastructure, what would in things to do with driving, which could also add you personally guess would be the way forward? 9479981001 Page Type [O] 11-07-05 21:58:15 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 23

11 February 2004 Mr Malcolm Watson and Mr John Mumford

Would it be the introduction of buses and bus fleets Q193 Chairman: That is not what I am askingyou. which would control the provision and fuellingof What forward planningis there? You are quite sure a particular kind of vehicle; or would you assume you have the flexibility to deal with all these that at some point your industry would look to challenges, and yet it is very clear that the motor a major step-change in the provision of manufacturingindustry itself is not at all infrastructure? determined on which of these many routes it is Mr Mumford: We would certainly want to be part going to take to develop use of new fuels. I ask you of the introduction of the next change of again: are you confident that you would be able to infrastructure. provide, for example, a completely diVerent infrastructure, were you required to do so within the timescale we are talkingabout? Mr Mumford: In the timescale we are talking Q192 Chairman: You would almost automatically, about, yes. Mr Mumford, be part of it; otherwise you would Chairman: Thank you very much, gentlemen; you not have an industry. have been very informative. The Committee stands Mr Mumford: Yes. adjourned. 966584PAG1 Page Type [SE] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 24 Transport Committee: Evidence

Wednesday 25 February 2004

Members present:

Mrs Gwyneth Dunwoody, in the Chair

Clive EVord Miss Anne McIntosh Mrs Louise Ellman Mr George Stevenson

Witnesses: Mr Gerard Gornall, Associate Director, Acumen Team and Mr Nick Addison, Product Manager, Lex Vehicle Leasing, examined.

Chairman: Good afternoon gentlemen. We have a Q199 Chairman: Why has there only been a small little bit of housekeepingfirst. Do any members have uptake of alternative fuel vehicles in the company interests to declare? car market? Miss McIntosh: I think the relevant interest is my Mr Addison: Primarily because they are not actually interest in RAC, BP and Shell. the cheapest option. Once you take into account the Mr Stevenson: Member of the Transport and purchase price of the vehicle, the resale value at the General Workers’ Union. end of its life and the fuel cost in between it is not Chairman: Member of ASLEF. necessarily always the cheapest option. There is also Mrs Ellman: Member of the Transport and General limited driver incentive to make that choice. The Workers’ Union. refuellingnetwork itself from the convenience point Clive EVord: Member of the Transport and General of the view for the driver also has an impact. I think Workers’ Union. the most important is probably the uncertainty lookingforward as to the grantlevels and the levels Q194Chairman: Mr Gornall, would you like to of fuel duty which make it very diYcult to predict introduce yourself for the record and also introduce how expensive that car is going to cost you as a your colleague? driver in the future. Mr Gornall: I am Gerard Gornall of Lex Vehicle Leasing. I am Associate Director of our Acumen Q200 Chairman: How important is your grant Team. Nick Addison is our Product Manager. fundingin the sense that the EnergySavingTrust is makingalternative vehicles a competitive choice for Q195 Chairman: Thank you very much indeed for company car drivers? coming. Did you have something that you wanted to Mr Addison: The grant is very important. The whole say to us before we began? life cost, takinginto account the fuel, purchase price Mr Gornall: No. and the residual value, there is a break even point very much driven by the mileage the vehicle covers Q196 Chairman: So you would be quite happy if we as to whether alternative fuels are economical or not. go straight to questions. What impact has the change in tax regime had on company car purchasing Q201 Chairman: They would normally have all that decisions? information anyway before there was a decision Mr Gornall: It has had a significant impact from a taken on a fleet because they would know the CO2 angle. Habits were largely driven by personal average mileage that each individual was expected preference of what car people wanted to drive and to do. that really solely, other than the fact that they had to Mr Addison: Yes, and the level of grant that is be suitable for the job they had to do. Now there is currently available makes it a borderline decision at very much a focus on CO2 to bringthe personal tax about 20,000 miles a year which is the company car down it has had a huge impact, with the cars now average. If that grant were reduced or removed then beingmore fuel e Ycient in the company car market it reduces the attractiveness of the alternative fuel than they were in the retail market. option compared to diesel.

Q197 Chairman: Would that be the purchasing Q202 Clive EVord: How important is the grant managers looking at the economics and saying that fundingfrom the EnergySavingTrust in making this is what they are going for? alternative vehicles a competitive choice for Mr Gornall: Generally speaking, but it has very company car drivers? much been driven by employee demands as well. Mr Addison: For the reasons I have just stated. It is They want their purchasingmanagersto put CO 2 very, very important because the current cost-wise it friendly cars on their choice lists. They want to make is quite a close call between LPG, for example, and sure they have a good choice of vehicles. diesel. If that grant were removed or reduced that benefit would probably swingthe other way. Q198 Chairman: You think that that is becomingas important as the type of vehicle or the tax breaks and Q203 Clive EVord: What measures could help the grants, do you? improve the situation? What could be introduced Mr Gornall: From an employee perspective yes, very that would improve the uptake of alternative fuel much so. vehicles? 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 25

25 February 2004 Mr Gerard Gornall and Mr Nick Addison

Mr Gornall: It is diYcult really because whilst a Q210 Clive EVord: In spite of the fact that I, as an grant does make cost benefits, they are not really individual, if I were doinga lot of mileageI could suYcient for people to make that decision due to the buy a fuel eYcient diesel vehicle which would, over uncertainty in the market of the current alternative its life time probably benefit me quite significantly, fuel—which is really LPG—that even if the cost because it is a leasingand re ntal arrangement benefits are there the uncertainty around it and, as through you and you consider those vehicles to be of Nick said, the refuelling problems and also the a higher risk, you charge them more for those problems with the vehicles themselves in that the fuel vehicles if they ask for alternative fuels. tank tends to take up quite a lot of room, just mean Mr Gornall: Basically yes. that people do not have confidence in it as an alternative, despite the fact that there might be Q211 Mrs Ellman: financial benefits to be gained. Why are the write down costs of new cars so high? Mr Gornall: That is linked to the previous question. Q204Clive E Vord: When you say “people” who do Because of the uncertainty of the market in the you mean? future for these vehicles we will typically put an Mr Gornall: Company fleets and probably private allowance in the residual value of that vehicle to individuals as well. return it back to its native fuel type, so, for example, it would be put back to petrol. We would not Q205 Clive EVord: You lease and rent vehicles to necessarily do that but we would price in a cost so if fleet operators. we cannot sell a LPG vehicle at the end of its life then Mr Gornall: Yes. we would return it back to petrol and sell it like that. There is an approximately £300 penalty built in. Q206 Clive EVord: Presumably the risk is yours, not theirs, in the sense that you own the vehicle. Q212 Chairman: So in fact your fleet buyers are Mr Gornall: That is right. underwritingall your risks, are they not? I am not sayingthis in a pejorative sense, but they are leasing Q207 Clive EVord: If, for instance, an alternative from you because they need some economic fuel vehicle did not prove to be economical for them arrangement which will save them a great deal of to run—say the fuel duty excise changed—they extra investment, but what you are doingat every could just dump it back on you. level is that you are not only writingin the expected Mr Gornall: Not necessarily. They would generally costs and the expected risks, you are also writingin be tied into a contract for three to four years. Any a political decision that in three years’ time, at the uncertainty in the market over the alternative fuel end of this lease the fiscal situation may have would be built into our pricingas well so if we think changed, the attitude of local authorities may have that in three years’ time we are going to get an LPG changed, so you are actually writing in each time an car back and we cannot move that into the market increased premium—in fact a number of premia— then we would have to take a very negative view on for what are really your commercial risks. I am the second hand value. beginning to wonder why I did not enter this business; obviously, as usual, I got it wrong. Q208 Clive EVord: In answer to the Chair’s first Mr Gornall: We do feel that it is a real commercial question you said that the value of the vehicle at the risk that that is going to be the case in four years’ end of its use is a factor that you have to take into time. There is so much uncertainty over the future of account. Is it less attractive to you because this is a LPG that commercially businesses like ours are not volatile market or is it less attractive to your prepared to take that risk. We believe we are pricing customers? in accordance with what the real market situation is Mr Gornall: It is not less attractive to us; it does not in that in four years’ time there is real uncertainty really matter to us whether we lease a LPG, diesel or over whether LPG is a sustainable alternative fuel. petrol vehicle; it makes no diVerence. Q213 Mrs Ellman: Are these real risks that you are Q209 Clive EVord: There is somethingI am not taking? Have you lost out on any of these risks? understandinghere. Can we goback over that first Mr Gornall: We are in the business to take risk on answer, about the value of the vehicle? At the end of residual values on vehicles of whatever shape or size the day, it is yours. A leaseholder can take up an or make or alternative fuel that they use. We lose on option to purchase or can return it to you, so you can some; we win on some. end up with the asset at the end of the period for contract which the vehicle has been loaned out for. Q214Mrs Ellman: How longdo company drivers Mr Gornall: For example, a LPG, in three or four keep the vehicles? years’ time when it comes to the end of its contract Mr Gornall: Between three and four years. and it comes back to us, fuel cells or some other technology might have superseded it and the technology in that particular vehicle becomes Q215 Mrs Ellman: What influences that decision? Is obsolete, so we would reduce the price of the resale it diVerent for diVerent types of vehicles? value of that vehicle which, in turn, makes it more Mr Gornall: It is generally most economical to run a expensive to the driver or to the company. car for three to four years. 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 26 Transport Committee: Evidence

25 February 2004 Mr Gerard Gornall and Mr Nick Addison

Q216 Chairman: The economics are influenced by Q224Miss McIntosh: Would you expect diesel cars the terms of the lease that you are giving them, are to be less attractive to the private retail market for they not? I understand that. If I am a fleet buyer and the reason you have given? Are you takingany I want to take on 300 vehicles, I am going to be action to tackle that now if it is going to take place influenced by the size of the deal that you give me. in three or four years’ time? Do you make it clear that if a buyer takes on Mr Gornall: It is diYcult to see what the perception somethingwhich has an alternative fuel which you in the private market is f rom where we are. We just regard as being a bit more of a risk, that would be an have to price accordingly as to what we think we will extra premium? Or do you just quote to them a figure get for a diesel vehicle. It still does carry a premium of so many vehicles at so much. over a petrol car, but how longa diesel car will have Mr Gornall: It is on a per vehicle basis, yes a premium over a petrol car it is diYcult to say.

Q217 Mrs Ellman: What about private cars? How Q225 Miss McIntosh: I think you say in your longdo people hold on to those? submission to us that automatic cars tend to have Mr Gornall: We are not really experts in that market. higher CO2 emissions than equivalent manual We do do personal leasing and again and that again versions. Is that well known to the customer? is generally three to four years. Mr Gornall: Yes. Within company fleets anyway.

Q218 Mrs Ellman: Do you think that customers do Q226 Miss McIntosh: Do you think an eco-labelling look at whole life costs or are they lookingat things system would be helpful to customers in in a diVerent way? encouraging them to lease or buy greener vehicles? Mr Gornall: Companies, without doubt, look at Mr Addison: I think if there was a stronglink to a whole life costs. significant element of the cost where you could actually see there beinga benefit in there beinga Q219 Mrs Ellman: Private customers? labellingsystem—a bit like washingmachines where Mr Gornall: It tends to be less so but it is not really it ties very much to the electricity used, which is our market. obviously significant in the cost of running that piece of equipment—and with a car then the obvious link is to the amount of fuel used which is more around Q220 Miss McIntosh: Am I right that the take up of the miles per gallon figure. That is linking much new diesel cars is high but the take up of alternative more to fuel economy rather than the actual fuel vehicles is quite low? emissions. Mr Gornall: That is right. Q227 Chairman: That is partly because nobody Q221 Miss McIntosh: I have to declare an interest, I makes that clear to them. If you read even do drive a diesel vehicle. Do you think that the elementary briefings on consumer interests on increase in diesel vehicles is a welcome development? washingmachines, most people now know the Mr Gornall: From our perspective as Lex Vehicle diVerence that the A and the AA and the AAA mean V Leasing, it does not really make any di erence. We to them when they are buyinga washingmachine. It would lease a car whether it were any fuel, really. limits one’s choice. You go into a room full of 200 Commercially, from point of view, it does not make machines and by the time you have said that you V much di erence. What it has done, though, is drive only want a British machine and you only want one down our view on residual values of diesel vehicles. which is energy eYcient, you are down to one, if you Currently we think the private market takes about are lucky. There is nothingto stop you doingthat for 25% of vehicles beingdiesel. About 65% of our new the consumer, is there? cars going on fleet our diesel. In three or four years’ Mr Addison: The information is there, I suppose, in time we have to be able to move those into the the miles per gallon figures that are published for private market. On the face of it that looks to be a every vehicle, but it would make it more visible. challenge because that means that a lot of private car drivers are going to have to move into diesel cars to absorb what we are puttinginto the second hand Q228 Miss McIntosh: Could I ask you about the market. impact that tax has on alternative fuels. Do you think it is always a positive eVect? When the Government changed the fuel duty diVerential on Q222 Miss McIntosh: Do you get a lower price? V LPG, do you think has created the problem that you Mr Gornall: Our prices on diesel have e ectively referred to earlier? increased because of that. Mr Addison: It is the uncertainty as to how longany subsidy or reduced level of fuel duty will be in place Q223 Miss McIntosh: Am I right that on the that is, I think, the fundamental problem. LPG itself continent new car registration of diesels is 50% and already suVers an eYciency problem against petrol; we are 30% new car registration diesel? it is about 80% as eYcient so you will not get quite Mr Gornall: I am not sure about the continent, but as many miles to the same volume of fuel. If the price I think you are right about the UK. About 30% of was half as much, your fuel bill will not be half as the total fleet is diesel, but within company fleet it is much because you need a bit more LPG to travel the probably a lot higher than that. same distance. As you start to increase that level of 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 27

25 February 2004 Mr Gerard Gornall and Mr Nick Addison duty—going back to the points we made earlier—it Q238 Mr Stevenson: Now you see why I asked the erodes that potential cost saving. It is very question. There are those that might argue—the important, just as the level of grants are. Government may argue, I do not know—that we have all got a responsibility here. What you are Q229 Miss McIntosh: Did you say just now that you sayingvery clearly is profound substantial e Vect— would need more LPG to drive the same distance deleterious eVect presumably—grants are reduced, than an alternative fuel? companies such as yours do not see any Mr Addison: More LPG than you would petrol. responsibility whatsoever in attemptingto develop financial mechanisms in terms of your business that Q230 Miss McIntosh: Am I right in thinking that if would perhaps encourage the use of I was to convert my car to LPG I would lose most environmentally friendlier fuels that would be under of my luggage space because I would have to lug a threat if the grant is cut. You do not have that tank around? responsibility. Mr Addison: Yes. Mr Gornall: There are external forces that make LPG such an uncertain fuel going forward. There is Q231 Miss McIntosh: What would persuade me to no reason for us to price that any diVerently. convert to LPG given the uncertainties that you have just given us? Q239 Mr Stevenson: Is your profit margin Mr Addison: I think from an individual’s point of commercially confidential? view it is the fuel cost saving. As the price of that fuel Mr Gornall: The company accounts are filed at goes up that saving disappears. Companies House so to that extent they are not.

Q232 Miss McIntosh: Surely if the tax diVerential was higher then I would be more persuaded. Q240 Mr Stevenson: Would you care to give some Mr Addison: Yes. indication of what you expect in terms of your profit margin? Mr Gornall: I do not know whether we are allowed Q233 Miss McIntosh: Do you make representations to. on that behalf to the Government? Mr Addison: We have not done that. Q241 Chairman: Roughly. A percentage. Q234Chairman: As a company would you do that Mr Gornall: In the terms of profit levels something for your trade association? in the region of £40 million per annum. Mr Gornall: Our trade association would, yes. Q242 Mr Stevenson: Rate of return? Q235 Mr Stevenson: Your company has made it Mr Gornall: I am not sure what rate it is. It is round clear that alternative fuel vehicles are not cost about 18%. eVective without grants. Are you therefore Chairman: He is not sure so we cannot ruin his career concerned that the Energy Saving Trust is not on that basis. acceptingany grantapplications in this financial year and is proposing significant reductions in grants in the future? Q243 Mr Stevenson: This is a very important point. Mr Addison: I think that would have a very I think the Government do make an important fundamental eVect, yes. I am personally aware of assertion when they say that if we are going to make customers of ours who are holdingo V from making any real impact in the environmental concerns we decisions because they are awaitingfor the next have it has to be a partnership. However, what you budget or another announcement to be made before are sayingto us—and I want to be clear on this—is they commit to another three or four years. that you do not see Lex, as one of the largest companies in this field, if grants are cut—and you Q236 Mr Stevenson: Could you elaborate somewhat already do a relatively small amount of business on what you mean by substantial eVect. now—you do not see any responsibility whatsoever to look at your financial structures to see if you can Mr Addison: We are doingvery little LPG business V at the moment because it has such a bige Vect on the step in to see if you can make up the di erence. purchase price of the vehicle. Mr Gornall: If external forces show that LPG was a sustainable fuel for the future then we would obviously promote LPG a lot more than we do, but Q237 Mr Stevenson: Do you not see any there is a feelingout there in the market that LPG is responsibility in companies such as yours—Lex is not here to stay. It has probably got a short life cycle probably the leadingcompany in the country in and before we know it fuel cell technology will be terms of volume of business—in fillingthe gapthat round the corner and that is what most people are reduction in grant might result in in terms of your waitingfor. responsibility towards a better environment? Mr Gornall: We have a very clear environment policy. Commercially I think it would be wrongto Q244 Mr Stevenson: The Energy Saving Trust argue expect a business whose responsibility is to its that the grants that they have been providing since shareholders to reduce profits simply to help the 1996 have stimulated the market and the market is environment. maturingnow; there is a momentum in the market 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 28 Transport Committee: Evidence

25 February 2004 Mr Gerard Gornall and Mr Nick Addison that will continue to progress even if they cut their Mr Gornall: Yes, that is right. grants by between 20% and 40%. Do you accept that assertion? Q251 Mr Stevenson: Is that successful or are you Mr Gornall: There are certainly more vehicles on the havingcustomers takingmore advantageof cash road but I would argue whether there is a firm base instead of a company car? to go forward. Mr Gornall: We have certainly seen a huge increase in the personal market, yes. Q245 Mr Stevenson: The Energy Saving Trust are sayingthat their PowerShift programmehas now Q252 Mr Stevenson: Which, because choice tends matured to such an extent that even if they cut their not to be the cleaner fuel technologies when cash is suit to fit their cloth to allow them to fund a greater provided, it begins to defeat the object of the number of vehicles, but nevertheless the market has exercise. Is that a fair statement? a momentum now that will continue to grow even if Mr Gornall: Yes. grants are cut. Do you accept that assertion? That is the cleaner vehicle market. Q253 Mr Stevenson: Why are you doingit then? Mr Gornall: I am surprised at that assertion. There Mr Gornall: It is companies’ policies that allow have only been two manufactures who have actually people to take cash. With that option and the made production model alternative fuel vehicles and increase in taxation on company cars it becomes there are question marks over whether they are more cost eVective for an individual to save his going to continue making them. company car tax, take the cash and purchase his own vehicle. People are going to purchase vehicles so we Q246 Mr Stevenson: Would it be fair, Mr Gornall, have a product to satisfy that market. to interpret your answer as sayingyou do not believe the EST’s assertion is credible? Q254Chairman: Thank you very much. I think you Mr Gornall: Not to sustain the growth at the same have been very helpful. Just as an aside on that last rate as was seen early on. question, are you quite confident that those vehicles will be maintained at the same level that they would Q247 Mr Stevenson: The grant system that we have have been if they had still been managed by fleet talked about, is this the right mechanism really to managers? continue to promote cleaner fuel vehicles and Mr Gornall: On our personal leasingproducts yes cleaner fuel technology in our vehicles, or would you because most of our cars are sold with a full say there is some other way—fiscal ways, of course— maintenance package. of achievingthe same objectives? Mr Gornall: It really depends on what the ultimate Q255 Chairman: You are sellinga full maintenance objective is. We understand the ultimate objective is package so you would say that they would normally to reduce carbon emissions. Diesel vehicles have less be maintained at the same standard and insured for carbon emissions than an LPG vehicle so I suppose business use. Do you check on that? I am a little unsure of what the ultimate objective is. Mr Gornall: We always recommend that company fleets, the fleet manager or whoever is in charge of Q248 Mr Stevenson: Sixty per cent by 2050. the fleet, checks on insurance levels, but it is an issue. Mr Gornall: If that relates to carbon emissions then we do no necessarily need LPG vehicles to achieve Q256 Chairman: An issue for them rather than for that because they are generally less carbon eYcient you. If you are promotingthese packagesyou are than a diesel vehicle. still in the same position of a lease. Mr Gornall: It is the company’s ultimate Q249 Mr Stevenson: Finally, employees are often responsibility to ensure that their employees have given the option of taking cash rather than a insurance for business use. We always promote, as company car. What diVerence is this system likely to advisor to that company, that that is what their make—or does make, in your opinion—in terms of policy should stipulate. cleaner fuel usage? Mr Gornall: It is proven with our figures that if Q257 Chairman: Even though they are, in eVect, people take a personal vehicle the CO2 emissions takinga private deal with you. from that vehicle are somewhat higher than the Mr Gornall: We do not necessarily know whether average company car user. As the band into the CO2 that car is going to be used for business use or not. emissions on company cars go up the more people take cash. Therefore more people move into Q258 Chairman: Your advice to the fleet managers potentially less CO2 friendly vehicles. would be to make sure that this is the case. Mr Gornall: Yes. Q250 Mr Stevenson: You are operatinga Chairman: Gentlemen, you have been very helpful. FreeChoice scheme I understand. Thank you very much indeed. 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 29

Witnesses: Mr Robert Ledger, Head of Telematics and Mr Douglas Vallgren, Telematics Marketing Manager, Norwich Union, Mr John Parker, Head of General Insurance, Mr Barry Smith, Fortis—Chief Executive and Chairman of ABI Motor Committee and Mr Andrew Miller, Motor Insurance Repair and Research Centre, Thatcham—Director of Research, Association of British Insurers, examined.

Q259 Good afternoon, gentlemen. You are all most commitment to provide medical care and welcome here. I am going to ask you to identify compensate them for loss of earnings. If safer cars yourselves. When you agree with one another, please result in fewer fatalities but more serious injuries it do not repeat in diVerent words the same things, but could mean that the personal injury claims cost goes if you want to catch my eye if you just wave I shall up significantly, but I think you also have to look at try to respond. Shall we start from my left and two bits of this: one is the person outside the car, your right? what is technology doing to improve the protection Mr Miller: Andrew Miller, Director of Research for delivered to people who are crashed into outside the Thatcham. car; also, the occupants of the car. It is quite a Mr Smith: Barry Smith, Chair of the Motor complex issue but generally, in terms of the amount Committee for the ABI and Chief Executive of that insurers have to pay out, people who are Fortis Insurance Limited. severely injured rather than dead are more Mr Parker: John Parker, Head of General Insurance expensive. at the ABI. Mr Ledger: Robert Ledger, Head of Telematics for Q262 Mrs Ellman: How do you work out what the Norwich Union. costs are? How to you come to this great disparity Mr Vallgren: Douglas Vallgren, Marketing where it appears that lives are not valued so much. Manager for Telematics at Norwich Union. Mr Parker: The courts do that. Insurers pay damages to third parties which are determined by Q260 Chairman: Do any of you wish to say anything the courts. individually before you start? Mr Vallgren: We would like to make a statement. Q263 Mrs Ellman: The Department of Transport Thank you very much for invitingus today to estimate that the cost of preventinga road fatality is provide evidence of our “Pay As You Drive”TM over a million pounds and the cost of preventinga insurance research and development programme. serious injury is £140,000. How do the insurance This is a major investment by Norwich Union to claims work out? How do they then relate to these develop a new motor insurance product which we figures? believe will deliver new customer benefits. It will Mr Parker: It is important to bear in mind that we enable us to price motor insurance more accurately are talkingabout two slightlydi Verent things. A and in giving those fairer premiums we also provide fatality is likely to result from a more serious the customer with the opportunity to control their accident than an injury, so the kind of event you premiums monthly. For the first time we are need to prevent is a more extreme one so it is likely educatingand informingcustomers about the to cost more to prevent it. As to how people are benefits of safer driving. In addition to that benefit valued, I do not know how the Department of there are other benefits because we will be able to Transport come up with their valuation. On the locate the cars in case of an accident or a breakdown valuation on either a death or a personal injury, or if the vehicle is stolen, which will enable us to insurers do use systems which have been developed maintain a reduced claims cost which will further by the courts over many years. One of the key enhance the benefit to customers. We have sought elements where someone is seriously injured is what customer views through research and also through is the on-going cost of future medical care for their contactingThe Consumer Association and Liberty expected life time which could be twenty or thirty to make sure that we keep their views in mind when years. I do not know how the Department of we develop this new programme. Also, we have gone Transport come up with their figures. The costs to across the industries and collaborated with insurers are determined by the courts. government departments to make sure that what we are doingis sensible and correct. We also feel that Q264Mrs Ellman: Could all of this lead to a there is the potential with the information that we disincentive in increasingsafety in cars? gather to help provide data to look at road safety Mr Parker: No. Perhaps Andrew might like to talk and road planningprogrammesand believe we about what Thatcham do, which is the Insurance could be of benefit to future development of road Research Centre. The insurance industry is working safety. quite hard to evaluate the extent to which cars can prevent injuries or reduce the level of injury to Q261 Mrs Ellman: In the memorandum from the occupants of cars. Thatcham were doingquite a lot Association of British Insurers you say that of work lookingat how one can r educe the injury to technologies which result in a reduction in deaths people who are occupants of cars. They have a but increase serious injury lead to higher premiums. specific programme lookingat whiplash. There are some pretty horrendous implications Mr Miller: Perhaps if I start at the beginning of there, are there not? where your question originally came from, at the Mr Parker: It is not a completely straightforward other end of the scale people are probably not issue. Putting it at its bluntest, the award of damages injured through safety improvements where they when someone dies is significantly less than if would have been, so whilst there is a specific issue someone is seriously injured. There is an on-going that you are discussing here regarding the potential 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 30 Transport Committee: Evidence

25 February 2004 Mr Robert Ledger, Mr Douglas Vallgren, Mr John Parker, Mr Barry Smith and Mr Andrew Miller conflict between a serious injury and a fatality, at the perhaps a few thousand pounds—in aggregate they other end of the scale there are probably a large are probably the largest single element of personal proportion of people who may not be injured at all injury claims paid by the insurance industry, hence so those costs are not actually read by the state or the the interest through Thatcham in trying to prevent insurance industry. I think the overall benefit of those. safety is well proven and I do not think in any way the insurance industry works against that. Just to Q270 Miss McIntosh: I do not know how you can pick up a little bit about Thatcham’s work, we have have an accident without havinga collision, and is it been doinga lot of work on whiplash—reducing not the case in every collision that someone will file whiplash injury—and promotingthat. That is a very for a whiplash claim? active programme the insurers are funding through Mr Smith: If we review the question of the moment, the Thatcham work. If you go onto the Thatcham the claim itself will be made up of two elements, one website you can see the work described in great is damage to the vehicle and the other is damage to detail. Although the costs have been significant for an individual or individuals in a car. What has been insurers and they are significant for the said before I support in the sense that the injury manufacturers and we are prosecutingthis work (if element of the claim has certainly risen quite I may use that word), it is havinga real benefit and considerably. That is through two particular factors, we see that this sort of work can only be of benefit. one is the consumer is more likely to register a claim It is very diYcult to quantify. Once you get into so there is a higher incidence of individual drivers medical research and those types of areas, it is very lodging a claim; the second is the severity which is diYcult to make these quantifiable statements but that there is an increase in the average settlement the general trend and the reduction—especially at which, in the main, is driven by court awards. The the less serious end—is significant. reason why, as an insurer and representingthe ABI as well, we are investingin technologyand in Q265 Mrs Ellman: How well known is the work you whiplash is to see how we can prevent those injuries. are doingon preventingwhiplash injuries? There is a very, very good piece of analysis that Mr Miller: We have done a number of media supports that if we can help educate the driver on, launches. We did one at the end of last year and the for example, the placement of their heard rest, then year before and we will be doingsome more this in the event of an accident they are less likely to year. suVer from whiplash. The collective cost of whiplash—I do not know the figure but we can Q266 Chairman: Are you concentratingon this certainly provide it—is enormous. because the industry asked you to do so? Mr Miller: Yes. Q271 Chairman: It would be interestingto know over a ten year period the increase in claims not only Q267 Chairman: Was that because this is a more in percentage terms but also in terms of finance, common problem for them than some others? If you given that you have already given us the caveat that kill people neatly and eYciently it saves a lot of that is aVected by the court’s decision. money, but given that you are not that eYcient, is Mr Smith: If you then look at the other element of whiplash going to be the most common one they the damage which is damage to the car, the opening have to deal with otherwise? How did you isolate question referred to, “Does this mean that premiums whiplash, that is what I want to know. will increase of decrease” or words to that eVect, if Mr Parker: First of all, in terms of personal injury there is a greater level of technology and claims, I think there are two things. The cost of sophistication in a car it could well be seen that the personal injury claims has grown markedly over the cost of repairingthat damageelement to the car is last ten years or so as an element of total insurance going to increase. That may, in itself, not lead to a costs. reduction in premium. The investment in the analysis of what we can do in car design to help Q268 Chairman: From what to what? prevent injury is fundamental to where we see we can Mr Parker: I do not know, but we can supply you reduce price or get the best price to the customer. with the figures. Inflation is running about 15%. Technology per se in the way the car is built may actually add to cost in that element of the claim. Q269 Miss McIntosh: Is this because there are more claims or the damages are higher? Q272 Chairman: Those are the sorts of questions we Mr Parker: It is partly the value of the claims. The were askingyour predecessor witnesses. That is an courts are awardingmore. There have been a estimate of whether or not econo mies of scale kick number of technical changes to the way damages are in. You are guessing in a sense, are you not? You are calculated over the last few years which have pushed writingin an element w hich may or may not be up personal injury claims quite markedly so they are correct because normally the assumption with runningat about 15% inflation. Of personal injury machines is that the more you have the cheaper they claims by far the largest proportion numerically are become and that is also true of technology. whiplash claims where there is some collision. The Mr Parker: I think you may be talkingabout two total aggregate spend by the industry, even though diVerent things. One is the cost of producing the car the whiplash claims are not individually very large— which is not really somethingthat insurer have much 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 31

25 February 2004 Mr Robert Ledger, Mr Douglas Vallgren, Mr John Parker, Mr Barry Smith and Mr Andrew Miller control of, but the other is what is the cost of probably market practice for there to be a significant repairability? If you have more complex technology review at least once a year and for there to be literally like airbags, does that increase the cost of monthly supporting analysis to bringabout some repairability? I suppose the other thingis if you get changes on a very frequent basis. Fundamental some new technology which, for instance, keeps cars reviews at a macro level on group rating are less further apart then actually that may mean you have frequent; they may be on an annual basis or fewer accidents but it may be when the accidents thereabouts. In terms of the market practice and the occur the costs of repairingthe car could be higher. experience of individual risks and therefore how we There are number of factors involved here. view that risk and what is the right price, that is carried on on an on-going basis. Q273 Mrs Ellman: How do you weight all these Mr Parker: Just to add to that, we are carryingout diVerent factors? What combination of factors a thorough review of the Group Rating System would lead to cheaper insurance and what to more which is somethingwhich happens every decade or expensive insurance? so and one of the key elements for us to decide in this Mr Parker: There are two main elements. The review of the Group RatingSystem is whether we insurers try to carry out a sort of empirical want to give much more weight to personal injury assessment through Thatcham which is researching matters and the safety of occupants than has the cost of repair and perhaps the safety of the historically been the case because this is a much occupants. That is one of the main elements, the more important element in the claims cost. Group RatingSystem. I think you have probably all heard of the Group RatingSystem which grades Q276 Clive EVord: Just to follow up on that, what cars. The other is insurers’ own assessment through proportion of the insurance industry’s payouts is to their historical experience of what other rating people injured by vehicles, not other vehicle drivers factors they need to take into account in assessing but pedestrians? the car and the driver. So you get these two elements, Mr Parker: I do not have that figure to hand. one is a kind of objective assessment of the technology and the cost of repairing, but the other is V what is the claims instance and claims cost from Q277 Clive E ord: I wonder what the incentive is in people who drive those kind of cars? order to ensure that the design of a vehicle minimises the cost to you. In a sense you are concerned about cost rather than individuals and that is really what Q274Mrs Ellman: What matters most to you, the your industry is about. safety of the occupant or the safety of a pedestrian Mr Parker: There are three categories of people who or occupant in another vehicle? can be injured: the occupant of the car, the occupant Mr Parker: It is a mixture. First of all, not all car of another car and bystanders. insurance includes insurance of the vehicle. If it is just third party insurance then the cost of repairing the car is not a factor. It depends on what kind of Q278 Clive EVord: It just occurred to me when you coverage people buy: is it third party or is it were answeringa question earlier on, the issue about comprehensive cover? Within that it depends on the ball bars on vehicles which are, particularly in size of the engine, the cost of the car and so on. One towns, purely cosmetic but to a child hit by one of of the things I would say is that proportionately the those vehicles they could be fatal. In terms of your personal injury costs have become a much, much balance sheets if the child dies it is cheaper for you. more important factor in assessingthe ratingof a car Mr Parker: I do not think the industry would be over the last ten years or so. quite that callous. Mr Miller: The work that Thatcham does is to do an assessment on the vehicle, we do a damage test and Q279 Clive EVord: It might not be, but it is true, is it we do a security test. We then do some analysis not? There is no incentive for you to say that you are based on the performance of the vehicle. It is all put going to charge more of a premium on a vehicle if into a bigequation and passed to the graderating there are those ridiculous things on the front of it. panel for comment and then eventual rating. Mr Smith: That is an extreme example. There is every incentive to invest in technology in order to Q275 Mrs Ellman: How often do you reassess the improve safety and to improve the way in which we criteria? can prevent injury takingplace. Illustrations of that Mr Smith: If we try to help understand the answer have been given already from the work that has been to the question about how we get to the price for the undertaken through Thatcham. It is, at a macro product for each individual consumer then, as has level, very important to us to understand how we can been said before, there is great deal of statistical help support the elimination of that risk. When you analysis which is multi-dimensional. It is obviously relate that back to your specific question about the to do with the age of the driver, the location, the type child being killed and therefore your hypothesis that of car and what has been said before in terms of what that is a cheaper way out for the insurance company, makes up the car is a key ingredient in terms of the plainly there is a whole range of ailments and injuries group rating which is another guide to what the price that could have happened to that child, so from an for that single product should be for that customer. insurance company perspective we would include In terms of how often the rates are revised I think it is that as an indicator of what the right price was for 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 32 Transport Committee: Evidence

25 February 2004 Mr Robert Ledger, Mr Douglas Vallgren, Mr John Parker, Mr Barry Smith and Mr Andrew Miller that insurance risk. Plainly what we have to try to do providingindividual information to a central is to see how we can help support initiatives to database of all the insured risks and if that could be prevent that injury takingplace. linked, as an example, to the DVLA that ma y well help equip the police to be able to detect more easily Q280 Clive EVord: I am not suggesting that you and more speedily those people who are driving would encourage people to have these things round uninsured. attached to make it cheaper for you, but the point is there is no financial incentive for you to address that Q284Clive E Vord: How soon do you think we might issue. Beingan industry that is driven by financial have technology like personal identification in incentives, those issues about pedestrian safety are widespread use? not ones that you may take on board. Mr Smith: I think the linkage with other databases Mr Parker: I think that is directly contrary to what is a more complex question than I can answer here Barry said, really. today. All I know is that we are investingin the Mr Smith: Can I comment on a macro level first insurance industry in order to help improve the which is that if you are comingfrom the anglethat fundamental record keepingof those people who are we are only interested in the returns financially for insured or uninsured as the case may be. the industry over all that would be very sub- standard so it is not exactly the highest margin Q285 Clive EVord: What about the new technologies business that you will ever have witnessed at this end in vehicles? Are they causingconcern for insurance of the table. The issue for all of us is to understand companies in terms of repair costs? how you can eliminate some of the costs. In this case Mr Miller: Yes, there are some technologies coming it is not cost of processing, it is cost of the claim and through which are causing some issues. The first has how we can help the customer. We do that by asking been active restraint systems which have increased how we invest to help prevent those injuries. The the level at which cars are written oV because of the question earlier was raised about whiplash and I am uneconomic position to repair. However, I think the not going to repeat what was said there, but it is a bigmanufacturers are workingto reduce the cost of very good illustration of where insurance companies these components actively because they realise that are investingto help with techniques to help the implications from a commercial aspect of getting customers so that they hopefully do not suVer an good insurance. I think there will be some redress injury as a consequence of an accident. there. Secondly, there are some new materials comingthroughinto the vehicle park, aluminium Q281 Clive EVord: Why are there so many vehicles, et cetera. Those are causingsome issues but uninsured drivers? they will be overcome. I think the broad situation is Mr Smith: First of all, it is obviously not specific to that bigger manufacturers try to make sure that they the UK but our views are that there are two or three can contain the repair costs because if they made a things that we have to do. One is that at the moment vehicle which was almost impossible to repair it there is a very low perceived chance of people beingwould be quite expensiv e to insure because the detected so the perception of the habitual uninsured insurance industry would have to manage the risk is that there is a very low likelihood of them beingassociated with that veh icle and they do not want to caught. Secondly, if caught, then the punishments make themselves uncompetitive. are very limited and narrow and therefore they do not seem to act as a deterrent. The third thingis that Q286 Clive EVord: Is it the case that the industry is we think there is a common agenda to say how do we actually keepingup with new technologyor is the help build the customer’s understandingof what the fear of the repair costs introducinga disincentive to benefits of motor insurance are. We have certainly adopt new technology to increase safety? put in a very significant contribution to the current Mr Miller: Could you clarify which industry you Greenaway report, a study paper from the ABI. The meant? findings I have just given to you are the highlights in terms of why we think there is an element of Q287 Clive EVord: The vehicle industry and also the uninsured within the UK. insurance industry because you are, in a sense, workingwith the insurance companies and you are Q282 Clive EVord: Is it your experience that the feedinginto the manufacturers in order to bring vehicles that are uninsured are also poorly about mutual benefits, a triangular benefit in fact: maintained and unroadworthy? the car driver, the industry and the insurance Mr Smith: There is certainly a correlation of that, companies. Is new technology being kept pace with? yes. Mr Miller: Yes, it is. We work pro-actively with the vehicle manufacturers to promote best practice. For Q283 Clive EVord: Will technology prevent the instance, if we see that one vehicle is cheaper to problem of uninsured drivers? repair because of the construction and methodology Mr Smith: We think technology will help. If, as an used we would promote that across to the other example, we can align more information on diVerent manufacturers, for instance. Manufacturers a databases to help detect uninsured then we think number of years ago introduced bolt on technology that, in itself, will act as a deterrent. As an for the bumper systems which made it easier to illustration, insurers are currently investingand repair; we then promoted that across the rest. Most 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 33

25 February 2004 Mr Robert Ledger, Mr Douglas Vallgren, Mr John Parker, Mr Barry Smith and Mr Andrew Miller of these companies, however, do have very good Mr Miller: I would suggest it is a very positive information gathering sources of their own so they impact. are aware of these developments, but we do work with them. Q294Mr Stevenson: What happens when drivers have this automated drivingtechnology,whatever it Q288 Clive EVord: If I bump into a vehicle on my may be, at their command so to speak, and they then way home tonight and it happens to be a state-of- transfer oV a road which has the necessary the-art vehicle with all the technology on it and I infrastructure to allow that to happen onto roads damage all that technology, am I going to get a where there is not that infrastructure? Are you not shock in terms of the liability in order to repair all concerned about the problems that would ensue as a that technology? Is that an issue that is becoming result of that? apparent in the insurance industry? For instance, if Mr Parker: One would presume these kinds of I hit a vehicle that has a radar system on the front of things are going to be in the thinking of the it that could be very expensive to repair. manufacturers as they develop these technologies. Mr Smith: I do not see there is any exposure there at Mr Miller: Some of the best systems are completely all. I think that the issue is that the customer—on the passive systems so that they are not dependent on the assumption they have bought insurance—has driver to make those decisions about how to control bought insurance and that protects them for the the vehicle. damage to their vehicle and other vehicles if they are injured at that time. There is not a worryingsignal Q295 Mr Stevenson: How will drivers respond when on the consumer behalf there. They have paid their they are confronted with failures or are you insurance premiums for a twelve month contract confident that the manufacturers will, at longlast, normally and insurance companies will settle the produce a computer system—or whatever they may claims accordingly. be—that will not fail? Mr Miller: I would be very foolish to say yes. I Q289 Clive EVord: It just occurs to me that you suggest that these types of liabilities would have to might be worried that if I go and bump into the most be evaluated by the insurance industry from the expensive piece of technology on the road that you underwritingperspective. find yourselves liable for payingout for my accident. Mr Parker: The insurer would pay out but really, Q296 Mr Stevenson: As a general proposition you even if you bump into a very expensive car, those have little or not concerns about it. claims do not cost as much as the worst kind of Mr Miller: I would suggest that as an industry we are personal injury claim. broadly very much in favour of promotingthese types of systems which reduce incidents of accident Q290 Clive EVord: So I could find myself, whether I and also promote safety. have the technology or not, paying for it through my premiums. Q297 Mr Stevenson: The Society of Motor Mr Parker: Yes, that is what insurance is. All these Manufacturers and Traders in evidence to us made claims in aggregate have to be funded by insurance it very clear that in their view it was the driver’s premiums. responsibility to understand how the vehicle works. Do you accept that proposition? Q291 Mr Stevenson: The Association of British Mr Parker: I think issues of liability are always Insurers seems to support automated driving ultimately decided by the courts. technologies. Does that type of intelligent vehicle Mr Stevenson: I think I had better repeat the comingonto the market cause any concerns to the question; I do not know whether I understand the insurance industry? answer. It is the view of the SMMT that it is the Mr Miller: No. driver’s responsibility to understand the vehicle that Mr Parker: Is this the question of where the liability that driver is operating. Do you accept that? rests, with the driver or the manufacturer? Q298 Miss McIntosh: Could I just ask something? I Q292 Miss McIntosh: Basically we were told by a put the question myself to the SMMT. The witness two weeks ago that product liability is an insurance implications are, if there is a collision, is it issue that has not been sorted out and needs to be the product to blame or the driver to blame? Surely sorted out and presumably will have implications for you will have an interest to decide because if the the insurance business. driver is held to blame it will impact on your Mr Parker: I would have thought that the primary insurance. liability would rest with the driver. Mr Parker: You are right. The issue of liability and who is to blame—is it the driver or is it the product— Q293 Mr Stevenson: It appears in your evidence that will determine which insurance pot the claim is paid the ABI recognises that such technology that seeks out of. I think probably insurers would only seek to to restrict the autonomy of the driver in the way in look at whether the product is at fault if there is a which the vehicle obviously is driven could have a pattern of failure for particular kinds of cars. If you large impact on the level of collisions. Would that be get isolated instances then probably no pattern will a positive impact or a negative impact? emerge. 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Robert Ledger, Mr Douglas Vallgren, Mr John Parker, Mr Barry Smith and Mr Andrew Miller

Q299 Chairman: It is more precise than that. It is a Mr Parker: Yes. very targeted question. You are moving into an area that you have not been in before—intelligent cars— Q303 Miss McIntosh: Are you concerned about and it is quite possible that the industry will have to that? take a view on it before it is decided in the courts. Mr Parker: Has the liberalisation of the legal market Mr Parker: Not entirely because the insurance led to more claims? There is a very strongview that industry does not determine issues of liability; the it has. One gets into some really quite emotive issues courts do that. I think, in the cases where you have about is there a compensation culture and things like an accident, probably the insurance of the vehicle of that. I think it is fair to say that insurers see their role the driver will continue to pay the claim. Whether as payinglegitimateliability claims. Has there been that insurer might seek to subrogate against the an increase in claims? Yes. There are some concerns product manufacturer I think is an issue which will that some of those claims may not be completely become clearer as we look at how the technology legitimate; there may be an element of fraud. actually works. However, the instances of claim have markedly gone up, yes. Q300 Miss McIntosh: Is there going to be an element of trainingof the driver because the point is that I am Q304Chairman: I want to ask you about drivers. a very simple woman driver and if I do not know How do you think they should modify their driving how to drive this vehicle and I am not trained how behaviour in response to the data beingcollected in to use it and I am then involved in a collision, would the Pay As You Drive pilot? it not be best if I were given training before I take the Mr Ledger: As part of Pay As You Drive customers product away rather than just beingleft to read the will receive a monthly bill which is quite diVerent manual? from existinginsurance products. This will break Mr Parker: I would have thought it was a good idea down their insurance costs accordingto the usageof that people do understand how to drive the cars that their car in the precedingperiod. That is also an they are driving, yes. opportunity for us to communicate some safety Mr Smith: A comparison I can see beingdrawn is messages to those customers as well. An example of going to a gym. If you go to the gym then the club that would be havingunderstood the sort of routes itself will make sure that so far as they are concerned the customer drives we could highlight accident they have satisfied the knowledge and education that blackspots on those regular routes for them. That you, as a user of that equipment, need to have. I would be very individual to that particular should imagine that should be the position of the customer. In addition to that we can highlight some vehicle manufacturer and the retailer. generic safety messages as well, for example, the relevance of tiredness to drivingbehaviour and so on. Through a monthly mechanism, a monthly Q301 Chairman: What are we going to suggest to communication, we can do that for customers. people? You do not sell a car until you are absolutely satisfied that this person is capable of drivingit? As Q305 Chairman: You do say that there is a the electronic contents of a car become even greater possibility of linkingthis system to emergency you are going to have a thousand pounds worth of services. We checked with Greater Manchester equipment on the dashboard which, dare I suggest it, Ambulance Trust who do a lot of this work and are the average male cannot understand. If you are now well ahead than some other ambulance trusts. They sayingthat the manufacturer should not sell his car have never been approached; they know nothing until he is satisfied that that person has got a about it. Are there any other emergency services working understanding of all the gadgets on their car aware of the developments that you are introducing then we are going to have great fun in car with this type of system? showrooms from now on. Mr Ledger: If you look at emergency services in its Mr Parker: Yes, but surely there is a diVerence broadest contest we, as an insurer, are responsible between understandingall the nuances of can he use for the customer at the time of an accident and we the GPS system or can he drive the car safely? One take that responsibility very seriously. would be surprised if the vehicle manufacturers did not make sure that where there is technology which Q306 Chairman: I am not askingyou to define your would have an impact on the safety of the car that responsibilities; I am sayingthat you have said very they do not demonstrate that to people buyingthe explicitly that you expect this to be linked up at some cars. point with emergency services. Which emergency services? What are you doingabout talkingto them Q302 Miss McIntosh: You mentioned whiplash and and who are they? the number of claims and the amount of damages Mr Ledger: The emergency services it can be linked to are all the traditional ones. going up. Am I correct that prior to 1997 solicitors and others who were oVeringservices like this could not advertise; you can now advertise? Has that Q307 Chairman: Can be, yes, but have you done any contributed? work of that sort? 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Robert Ledger, Mr Douglas Vallgren, Mr John Parker, Mr Barry Smith and Mr Andrew Miller

Mr Ledger: The infrastructure is not in place yet. Q313 Chairman: It is an enormous amount of That requires some investment by both the public administration, is it not? Even usingthe best sector and the private sector to enable that to computer system in the world you are tailoring happen. There are some short term benefits that can makingan insurance to an individual driver on the be delivered by the likes of insurance to reduce, for basis of their previous month’s driving. example, times to get to the scene of an accident. Mr Vallgren: We will spend two years to understand the normal patterns of drivingthroughthis sample of 5000 people. When we get the key factors we will Q308 Chairman: So you are not actually talkingto be able to tailor that to groups of people and any emergency services at the moment. possibly even to individuals. Yes, it is a significant Mr Ledger: Yes, we are talkingto emergency investment of our company to do this piece of work. services. That is a piece of work that we are doingin the UK. We have not spoken to Greater Manchester Q314Chairman: So if some 83 year old picks up an Ambulance Service. 18 year old girl and goes completely potty that will not aVect anythingbecause his premium will be Q309 Chairman: Are you talkingto ambulance based on the drivingpattern in a particular group,is trusts? that what you are saying? Mr Ledger: We are talkingto ACPO and we are Mr Vallgren: We will be able to say that certain talkingthroughthe EU to the safety committees attributes of drivingwill create a certain premium which is a broader EU approach as to how we can and if they change that pattern of driving from integrate emergency services as part of a telematics month to month then the premium will change to implementation. reflect that. Q315 Chairman: What potential is there for schemes Q310 Chairman: So we cannot expect any such as AXA Insurance’s ‘Tracksure’ to promote developments very soon then. safe drivingand a Vordable insurance for younger Mr Ledger: I do not know. Certainly we can deliver drivers? some benefits to customers by them havingthis sort Mr Ledger: We believe that is a useful contribution of telematics technology in their vehicles. to the issue of youngdrivers and youngdriver insurance. We are lookingat the youngdriver’s Q311 Chairman: Will a flexible approach to drivingbehaviour as part of the work we are doing. insurance be understandable and acceptable to the We believe it is only part of a broader initiative that public? needs to address the safety and drivingbehaviour of Mr Ledger: Yes it will. We have done customer youngdrivers. Thingslike Pass Plus and other driver research as part of the work that we are doing. traininginitiatives help to contribute to prevent People understand a “pay as you go” approach to accidents as well as penalisingindividuals. motor insurance because there is a very strong analogy there to the mobile phone market. They Q316 Chairman: One of the real problems is not now understand a tariV aspect to payingfor services whether they go for Pass Plus, it is really whether at diVerent stages. As a result of the work we are they go for insurance at all, is it not? doingwe have had 15,000 motorists contact us Mr Ledger: That is part of the issue as well, yes. sayingthey want to participate in the research work Mr Vallgren: We also believe that Pay As You Drive that we are doing, which is highly unusual for us. insurance with a monthly budgeting and controlling the premium through safer driving may make it more aVordable for youngdrivers. Q312 Chairman: Is it practicable and desirable for insurance to be related to vehicle mileage? Q317 Chairman: Would that be very widely Mr Vallgren: Mileage is one of the elements that we available because it is no use havingan exclusive will look at and we believe that will present a much system that is not available to all youngdrivers, is it? more accurate method of calculatingpremiums, but Mr Ledger: Yes, our intention is that it would be in addition to mileage we will be looking at time of widely available and that is why we are having day, day of week and a whole range of factors. What discussions as part of this work with motor we will do over this period of research and manufacturers because obviously it is in their development will be assess all of those and interest as well to make drivingmore a Vordable for understand which ones are the key drivers to this segment of customers. highlight the safer driving that we could then Chairman: Gentlemen, you have been very tolerant. communicate to customers. Thank you very much. I am sorry to have kept you. 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 36 Transport Committee: Evidence

Witnesses: Mr Matthew Carrington, Retail Motor Industry Federation (RMI) Chief Executive and Mr Stephen Ramsay, Managing Director of ReMIT, Retail Motor Industry Federation, examined.

Q318 Chairman: Good afternoon, gentlemen. Could Q323 Mr Stevenson: There are studies that the you please identify yourselves for the record? Department for Transport has embarked upon Mr Carrington: I am Matthew Carrington. I am the when they were lookingat Vehicle Excise Duty being Chief Executive of the Retail Motor Industry graduated and what eVect that may have had, and Federation. tryingto link it to CO2 car emissions. They found Mr Ramsay: Stephen Ramsay, Managing Director that the present graduated scheme to make it of ReMIT, a large training organisation belonging attractive to buy cars which were more to the Retail Motor Industry Federation. environmentally friendly has really not worked. Is that your experience? Mr Carrington: I think we would expect other Q319 Chairman: Do either of you have anythingyou factors to have a bigger influence on it than the want to say? Vehicle Excise Duty; I think that is right. Mr Carrington: Very briefly, it is worth emphasising to the Committee that we represent, as a trade association, the retail side of the motor industry with Q324Mr Stevenson: The study also indicated that a membership of some 10,000 companies who cover people—private car buyers—really do not everything from very large franchise dealers right the understand what the graduated Vehicle Excise Duty way through to independent garages, motor scheme is all about. Is that your experience as well? auctions, motor cycle sellers, truck sellers and so on. Mr Carrington: I think it probably is. I think there is Mr Ramsay: On the trainingside we are looking not a clear understandingof the financial impacts of V after 7,500 apprentices trainingto be technicians for buyingdi erent types of vehicles when it comes to the future of the trade and they are employed by the taxation treatment of them. 4,000 diVerent businesses who we have found placements for. Q325 Clive EVord: To what extent do customers think about the potential repair costs when they purchase a vehicle? Q320 Mr Stevenson: Do you think that Vehicle Mr Carrington: Directly I would guess that the Excise Duty influences consumer choice when repair cost is less of an important factor than it used purchasinga vehicle? to be purely because cars are much more reliable, Mr Carrington: I think as a duty it is suYciently their service intervals are much greater. However, small as a decidingfactor as it does not have that big havingsaid that, repair costs have an impact when it a part in the decision of whether somebody buys a comes to the second hand market because as a car particular car or not compared with some of the gets older it inevitably requires more frequent other factors which are obviously things like running servicingand more repairs. What we find costs and the tax treatment and, particularly, the consequently is when you are buyinga new car the residual value—the value at which they would sell repair costs, once the car gets to a certain age, the car on—which is often the principal deciding impacts the residual value and so when you are factor. buyinga car—and it does not matter whether you are a private purchaser or a fleet purchaser—what Q321 Mr Stevenson: Do you think, therefore, that you are actually lookingat is what your cost of Vehicle Excise Duty needs to be changed to have a motoringis goingto be for the expected period of greater impact on consumer choice in terms of time you will own the car. That is critically vehicles? dependent on the residual value when you propose Mr Carrington: I think it is one option of several to sell it on. options. Clearly raisingthe Vehicle Excise Duty—if that would be the intention—would have other Q326 Clive EVord: Is new technology increasing the consequences in terms of who would have to pay it cost of repair? Is there any evidence to suggest that and the nature of the tax it would be. Whether it that is influencingthe choice of vehicle? would be somethingwhich would be better achieved Mr Carrington: No, I think rather the opposite in by raisingother forms of duty I think is a decision terms of increasingthe cost. The new technologies for you to take, not us. we have seen so far in terms of computerisation and the increased sophistication of engine design and so Q322 Mr Stevenson: Clearly, but of late Vehicle on are one of the reasons why cars do not need as Excise Duty has attracted diVerent variations to try much repair now as they used to and why they are to influence consumer choice, for example, lower more reliable and why the service intervals have gone further forward. I think, if anything, it is emission vehicles. Do you think that is a good thing V or is it benign or is it negative? havinga beneficial e ect. Mr Carrington: I think anythingthat encourages people to use cleaner vehicles and to use vehicles Q327 Clive EVord: What about the future, the which are less environmentally damaging in all sorts additional technologies that we have just been of diVerent ways is a good thing. Whether the discussingwith the insurance industry; the new Vehicle Excise Duty is the right way of doing it is, of technologies to make cars safer, accident prevention course, one which has to be modelled and decided in et cetera, which could lead to increased repair costs? balance with other factors. Do you think that that may have some influence? 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Matthew Carrington and Mr Stephen Ramsay

Mr Carrington: I suppose it could. My own guess is Mr Carrington: No, it is a consequence—in our that what we are seeingin terms of the perception at any rate—of two things. One is that it manufacturers’ proposals—and I have to say a lot of is attempts by manufacturers to diVerentiate their pressure from the European Union—is pressure to brand; secondly it is a consequence of manufacturers increase the safety of cars and to make them less attemptingto ensure that they keep control over likely to have accidents because they have accident their franchise network by makingit financially avoidance built into the car (the cars of the future diYcult for other people to exploit the Block will have, not the current cars) and so what we are Exemption, to come in and repair their cars. expectingto see is far fewer accidents. There is, indeed, some evidence that in terms of accident Q331 Clive EVord: Do all manufacturers publish repair centres—what are called bodyshops—the their technical criteria? volume of work has been decliningfairly Mr Carrington: Yes, they make it available, but they significantly over the last few years as a result of the make it available in ways which are still very diYcult fact that cars do not have the sort of accidents they for independent garages to access and frequently it used to. looks like it is going to be at a high cost. Again it is a developingmarket; it is one we have been lobbying V on very aggressively with both the OFT (because Q328 Clive E ord: How successful has the Block they get the power over the Block Exemption in Exemption scheme been in openingup the after sales May) and with the European Commission. So the repair service? manufacturers are giving the information out but Mr Carrington: I think it is starting, hopefully, to they are still giving it out in such a way as to make it have some impact. I have to say it is very hard to be very diYcult and expensive for an independent precise as to what that impact has been. In other garage to use. words, the jury is out on it at the moment. Because we represent both independent garages and Q332 Clive EVord: Mr Ramsey, in terms of that franchise dealers we are very keen to ensure that it information and advances in technology and the does have that eVect, that it does produce a more equipment that is required, that must lead on into eYcient and open and transparent and—I hate to terms of trainingfor people to be able to carry out use the word—a level playingfield in the repair the maintenance. market between all types of garages. I have to say Mr Ramsay: The industry is structured with that there is not as yet for a lot of reasons. extremes. There are 70,000 businesses in this industry and 60% of them have four or fewer Q329 Clive EVord: What are the barriers? employees consequently the trainingneeds and the Mr Carrington: There are a number of barriers. way they respond to those demands varies. Probably the biggest barrier inevitably is a Historically the trainingagendain our industry has motorist’s perception that you need to go to the been driven by the manufacturers. They have the V franchise dealer you bought your car from to get it larger businesses; they can a ord to invest in repaired and serviced because that is where you can training. Small businesses that have one to four trust to have your Ford car serviced by the Fort people have, historically, not invested in training; dealer. There is a tendency always to go back to the they prefer to pinch somebody else’s. They perceive Y dealer you bought the car from whereas that perhaps this, at the micro level, e cient to them but, of Y is not always necessary. You could perfectly well course, at the macro level it is ine cient for the take your Ford car to a Vauxhall dealer and get the industry. The issue is more than just availability of repair done or to an independent garage, provided technical information. they were up to the standard to be able to do the work you needed. The other factor is that one of the Q333 Chairman: But if Mr Carrington is right they consequences of the Block Exemption is the law of are going to have to face this problem anyway unintended consequences, I am afraid. because they will not stay in the business. Manufacturers have pushed up the cost to the Mr Ramsay: Absolutely right and a large part of franchise side dramatically as a result of Block what we try to educate our members is around that Exemption; they have imposed higher and higher point exactly. If you do not have the technology you investment requirements which they are also cannot actually do your work; you cannot service imposingon so-called authorised repairers which, the car. Some of them will embrace this reality; under the Block Exemption regulations, if an others will probably just see out their time and we independent garage wishes to become an authorised shall see a decline of the smaller end of the market— repairer for a particular manufacturer they have to independent garages—and perhaps the emergence of a stronger independent sector diVerent from the meet the same investment standards—quite franchise sector but groups, if you like, in the normal rightly—as a franchise dealer. If those investment sense, but not havinga franchise. standards go up dramatically, of course, it means that the cost to an independent garage to get into V that business have gone up. Q334Clive E ord: Goingback to this issue about new technology, where is the money going to come from to keep pace? You can pinch people who have Q330 Clive EVord: Is that a consequence of been trained by a manufacturer but in six months or technology as well? eighteen months technology has moved on and they 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Matthew Carrington and Mr Stephen Ramsay are going to need a whole new set of skills. When Q336 Mrs Ellman: Has the Federation had any they are out there in the industry where are the contact with the Learningand Skills Councils on the resources and the capacity going to come from to trainingissue? provide the training? Mr Carrington: We support the Automotive Skills Mr Ramsay: The financingfor it, post Limited, as it calls itself—it is a skills council for the apprenticeship, the trainingis done by automotive industry—both financially and in manufacturers. If you have a franchise you are resources, but we tend to do it through them rather forced to do trainingfor your technicians between than directly. two and five days a year. The independent sector has not done that and that is part of the problem. They are not used to havingto spend and invest in their Q337 Mrs Ellman: What are they doing? business. I think one of the issues that comingout of Mr Carrington: They are just starting, they have just the Block Exemption and freeingup access does not got their contract with the Sector Skills address is the size of the investment you have to Development Agency. They are developing, I make, whether it is in a piece of technological kit to believe, policies on this and developingtrainingon diagnose the machine or investment in getting your this, but they are very much in the early stages and staV skills up to a basic level to be able to use this you would have to ask them what their future equipment. That is a bigissue for the independent plans are. sector and that, in my mind, will be the cut oV point between those who will invest in their future through trainingin the independent sector and exploit these Q338 Mrs Ellman: Do you think that retailers would opportunities of Block Exemption, and those who be capable of takingon responsibility for ensuring will frankly just wind themselves down. customers are capable of usingnew technologies? Mr Carrington: Yes. I think there is absolutely no question that what we would expect to see is that Q335 Clive EVord: Who is going to be responsible? Is retailers would be expected to be trained as to how it going to be left to the individual business to either they should encourage their customers to use the invest or sink and swim, the sort of laissez fair technology properly, so I do not think there is any approach or is it going to be that somebody like question that they would get to that level. yourselves is going to take responsibility for ensuringthat there is a proper infrastructure for trainingand improvingthe skills of people in the Q339 Mrs Ellman: It is not just about encouraging industry? them; suppose they had a legal responsibility to Mr Ramsay: We can provide infrastructure both for ensure that the customers were able to use the new the RMI and its guidance to members and through technologies, would you accept that? ReMIT we have built a new technical trainingcentre Mr Carrington: I think it depends on what the legal just to provide education and resources not only for responsibility was going to be and what was our workplace learningbut for the independent resources they were expected to put behind it to do sector. Our experience so far is that take-up on that and, indeed, what sort of responsibility they are courses we run is low because of this historical “they expected to take if the customer actually did not have not done it” attitude. I think lookingfurther carry on and use the trainingor whatever it was that forward the manufacturer is always going to be the they were provided with. I think there are issues one to drive the trainingfor the technology.It will be around that, but cer tainly if you are a dealer who is the new cars that have the new technology on first. sellinga car you would expect to—and you would be The manufacturer will want to sell that car without required to as things stand at the moment, although beingable to service it, therefore the manufacturer not perhaps legally—support that vehicle in terms of and his franchise dealer network will take the lead. how people use it, trainingand the skills base that Lookingfurther forward and lookingat the customer needs to have to be able to use it safely. technologies that may be fifteen years out, there may well be a change in that emphasis and the drivers of the trainingmay become the originalequipment Q340 Chairman: At the end of that would you then manufacturers who supply the vehicle support a scheme whereby you had a certification manufacturers. The manufacturers are always system of some sort, for example if there were lookingat ways to shift costs to other people, changes to the vehicle or changes to training? particularly head count. I know of at least one case Mr Carrington: Yes, I think there have been issues where a group of global suppliers have got together around conversion of vehicles to diVerent types of with a view, lookingdown the road, to beingforced fuel, for instance LPG vehicles (which we have been by manufacturers to supply the training, as it were, very unhappy about because they have not been with their products. So if you do the suspension on done properly) and I think some form of a car, if you provide that, then you, the OEM, may certification on that or certainly some sort of control be asked to provide the training, the network for the on that would be somethingthat the responsible side people who are going to use it. Whatever way you of the industry—which are our members—would look at it, it is the people who are at the front end of welcome. We would certainly welcome it as a trade the car distribution chain, those handlingthe new association and if it were going to be put out into the vehicles or buildingthem are goingto be driving private sector we might well tender for the contract forward the technological train. to do it. 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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Q341 Miss McIntosh: On that point I gather that Q346 Miss McIntosh: Would you support a there are currently 100,000 LPG fuelled vehicles regulatory requirement for every aftermarket kitted with the stuV from the word go and now there conversion to be certified on completion by a is going to a 500% increase. Is that right? More are registered inspector? going to be kitted out from go for bi-fuels, LPG and Mr Carrington: Yes, we would. Obviously we would another. Is it called bi-fuel? Vehicles are now being need to look at the details of it, but in principal we produced which are bi-fuelled, LPG and one other think that is absolutely right. We think this is a fuel. dangerous conversion to do, one that, if it is not Mr Carrington: Are they? I have come across that done correctly, can cause very serious problems and with bio fuels in diesel where they mix up to 5% of it is one that should be done in the right way and we bio sourced fuel in with the diesel. I have not come believe, therefore, that it should be regulated in across it with the LPG. What we are seeingwith some way. LPG is that the demand fro LPG is decliningfairly significantly now after the change of the tax regime. We have petrol stations in membership as well and Q347 Miss McIntosh: I was under the impression some of our members invested heavily in providing that if I took my Renault car to be serviced at a the equipment you need and the storage you need on Vauxhall or a Ford garage when I came to sell my the petrol stations for LPG and they are seriously vehicle I would not get the same price as if I had the worried about the return they are going to make on badge on it that it had been looked after by the same their investment because they think the demand is dealer. Are you sayingthat after Block Exemption not materialising. that perception is wrong? Mr Carrington: I am sayingthat even before Block Exemption that perception should have been wrong. Q342 Miss McIntosh: Presumably you have made The reality may be right, I have to say, because you representations on their behalf to government. are dealingwith a willingpurchaser and if a willing Mr Carrington: Absolutely. purchaser looks at your service record and says that this car was not serviced in the garage he would like to see it serviced by, then it is up to him whether he Q343 Miss McIntosh: How have the retail and buys it. The reality is that servicingduringthe maintenance sectors of your business dealt with the warranty period particularly is a requirement and introduction of LPG vehicles and the hybrid has been a requirement for some time, but that vehicles? should be able to be done by any garage that is Mr Carrington: I think very well. I think the problem competent to do the work and the OFT have just with all these things is that we tend to be demand-led recently done a study on that and come out with very and so where customers want to have their vehicles much that statement and I believe all the converted and then obviously maintained we have manufacturers are now fallinginto line. It is the capability of doingit, but we tend not to put the certainly somethingwe would support, that if a capability in until the demand is there, beingan garage has the training, the equipment and the industry composed very largely of small businesses. capability of doingthe work, that should be the deciding factor, not whether the garage has a Q344 Miss McIntosh: Are you in a position to judge particular badge outside its front door. why there has been mixed environmental performance from aftermarket LPG conversions Q348 Miss McIntosh: So any dealer can do the work and what can be done to raise that performance? even in the warranty period. Mr Carrington: I do not think we are in a position to Mr Carrington: Even an independent garage should judge that. I think we are suspicious about some of be able to do it, but you are right, there is a problem the conversions that have been done. Some of them of perception which we have not, as an industry, have been done extremely well and we would expect overcome yet with the motorist who is maybe going those to operate as well as a vehicle which was built to buy a car in the second hand market and therefore for LPG right from the start. However, I have to say the perception of the people who are owningthe car there seem to be, certainly anecdotally, a lot of duringthe first three years—duringthe warranty problems with some of the conversions that have period—is that they feel they need to have their car been done and those, we suspect, would not burn serviced by a franchise dealer and possibly even the properly. franchise dealer they bought it from. That is not actually a requirement; it is not a requirement of the manufacturers and it is not a requirement for the Q345 Miss McIntosh: Would you support the safety of the car. Government’s proposal for the MOT test to be extended to gas powered cars with a catalyst test as beingable to test its environmental performance? Q349 Chairman: On the question of the sale of Mr Carrington: We would be very keen to see the second hand cars, as they become more complex and MOT test improved dramatically in any case the equipment becomes more complex, who is going because we think it is a major safety factor. We to have the responsibility of ensuringthat the next would like to see it extended; we would like to see it buyer knows how all this equipment works? Have made more rigourous and, frankly, we would like to you confronted that problem with your own make it more frequent as well. association and thought about the implications? 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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Mr Carrington: We have thought about it and it is a position in that representing garages people say, problem that we cannot really resolve until the “Well, you would say that, wouldn’t you”. It is actual situation arises. In the past what has tended sometimes better if that message comes from other to happen is that as the complexity of cars has people and it is very encouraging that the OFT is increased the aftermarket has been able to cope with startingto givethat m essage loud and clear. that complexity as it has gone through. If we have a quantum shift in complexity of course that may raise Q351 Chairman: If you are relyingon the OFT, Mr diVerent problems. One of the things the RMI is Carrington, you are in much greater trouble than I doingis introducingwhat we call CarWise which is realised. a system based with the OFT to ensure that garages Mr Carrington: We do, sadly, because of the meet defined standards and are expected to deliver regulations and the Competition Act, have to rely on those standards on a consistent basis. That, of the OFT and I have to say that I sometimes share course, gives us the ability to put into those your view. However, it really has to come from standards what is needed to be able to achieve safety motoringjournalists. The reality of it is that it has to of future performance. The industry, as a trade come from certain motoring journalists, those who association—and obviously we represent a very are dealingwith the mass circulation tabloid significant proportion of the industry—is making newspapers and in the popular television very great eVorts to ensure that motorists can have programmes. Once we get them saying it and once confidence in our members. we get them spelling out the reality of it, then I think motorists will believe it. If the industry says it, Q350 Chairman: What are you doingto reverse the motorists say, “Well, that’s very interesting, but do perception of the average car owner that there will I really believe the industry talkingits own book?” be diYculties if they have their vehicles repaired and maintained by independent garages rather than Q352 Chairman: Thank you very much. I hope you those which are comfortingly labelled with the name have enjoyed your trip back, Mr Carrington. of the manufacturer? Mr Carrington: I have indeed. It is a strange feeling Mr Carrington: We take every opportunity to state beingon the other side of the table. the facts to motorists and to explain to them that Chairman: It is nice to see you here. Thank you very they have that choice. We are in a slightly diYcult much for coming. Thank you Mr Ramsey.

Witnesses: Mr Rob GiVord, Executive Director, and Mr Julian Hill, Member of PACTS Vehicle Design WorkingParty, Parliamentary Advisory Council for Transport Safety (PAC TS); Professor Oliver Carsten, Leeds University; Professor Mike McDonald, Southampton University; and Superintendent Jim Hammond, Sussex Police, Deputy Chair, ACPO ITS WorkingGroup, examined.

Q353 Chairman: Good afternoon, gentleman. May we cited, for example, intelligent speed adaptation I ask you first of all to identify yourselves? which Professor Carsten can speak far more on. Superintendent Hammond: I am Superintendent Jim There are also issues of what more we can do to Hammond of Sussex Police and I am here as Deputy improve the vehicle to make it less hostile when it Chair of the ACPO ITS WorkingGroup. We hits a pedestrian or a cyclist. However, there is a represent ACPO on these issues. whole load of other technology such as electronic Professor McDonald: Mike McDonald, I am brake assist and the various devices that are being Director of the Transportation Research Group at implemented to help drivers—lane collision Southampton. avoidance systems, for example—where there is Professor Carsten: I am Oliver Carsten. I am little research as yet but they are beingimplemented Professor of Transport Safety at the Institute for slowly but surely into the market fleet. I think what Transport Studies, University of Leeds. we need to know is which of those is going to be more Mr GiVord: Robert GiVord, Executive Director of eVective before we start sayingthat this is one PACTS which is the Parliamentary Advisory answer and that one is not. I feel that there is a whole Council for Transport Safety. load where we need considerably more information. Mr Hill: Julian Hill from the Vehicle Safety Research Centre, Loughborough University, where Q355 Chairman: What influence do you think I am a research fellow. governments have on safety legislation in relation to car manufacture? Q354Chairman: Do any of you gentlemen have Mr GiVord: I think what governments can do is set anythingyou particularly want to say before we go tone and set priorities. I do not think we can ignore to questions? No. Fine. Can I ask about safety and the fact that the car industry is both European and technology? What potential does vehicle technology global, but what governments can do is say, “We hold for improvingroad safety? think this matters; we think these features are Mr GiVord: I think the diYculty is that that is a huge important to help save lives in our countries”. Our question to answer. I think we can identify that there own Government did a very good job on that with are some short term technologies that could be seat belt legislation, for example. There is no doubt extremely beneficial. In our written memorandum that in Japan the Japanese government has made a 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Rob Gifford, Mr Julian Hill, Professor Oliver Carsten, Professor Mike McDonald and Superintendent Jim Hammond great stress of pedestrian protection which is why the Q358 Chairman: How are we actually going to Honda Civic is a much less hostile vehicle when it ensure that they are not seen to be selecting runs over a pedestrian. I do not think we will ever particular types of manufacturingover others if they have a pedestrian friendly vehicle, but I think they produce such a road map? If they produce a road could be made less hostile. What governments can map which says, “We want to see telematics used”, do is to set the tone and say that this matters to us fine; we believe in motherhood and apple pie. How and we are expectingyou, the manufacturers, to do do you define your road map in those circumstances? somethingabout it. Professor Carsten: I think on sound scientific Professor Carsten: Could I just add somethingthere? evidence, cost benefit analysis and so on. There are I think the other thingthat a governmentcan do is systems that have been clearly shown to deliver a lot identify, for its own policies, which systems can and very high value for money. Those are the kind deliver them best and then set things in place to help of criteria you should be using. deliver them. One area we have mentioned before in Professor McDonald: I have two points to add. The our previous submission on road traYc speed was first one is that the types of accidents we will have in the issue of the map. Clearly if a government can five, ten, fifteen or twenty years’ time will be quite deliver a map then the private market can start to diVerent in character because of the diVerences in deliver the vehicles with the system. There are also technologies. In order to understand that evolution issues of communication between the vehicle and the of accidents and therefore put remedial measures in road side. Many of these systems are not going to we need to start to collect and identify new databases work very well or are not going to realise their full today.1 That will provide some of the evidence that potential benefit if they are purely autonomous Professor Carsten is talkingabout. The second point systems operatingon just one vehicle. Some of them is that in the European context it can be seen that the will only work if you have dedicated infrastructure technology is very strongly driven by the market; the for them (for example dedicated lanes) some will money sits with the individuals who are buyingthe only work with communication from one vehicle to vehicles and therefore manufacturers will develop another. That clearly demands some sort of action products which they can sell for a profit. These may by government or by Europe or by other standards not always support the longer term government settingbodies. policies and the full engagement of government in this process is essential to develop the added benefit for government policy has not taken place. There are Q356 Chairman: Is your impression that the present some initiatives in Europe; some understandingis Government has a clear view of how not only its own beingdeveloped in the Department for Transport in legislation but European legislation will integrate the UK, but there is a large gap in common towards a better level of safety? Are those the understanding. parameters you think they are workingwith or are we talkingsimply in terms of more e Ycient Q359 Mr Stevenson: Takingthat point, Professor manufacturingwith safety as an add-on? Mc Donald, you say that in five or ten years’ time the Professor Carsten: I think there is a diYcult problem type of accidents will be very diVerent from they are here because the way we set out national transport today, but given growth in traYc and all the other strategy and the way we set our road safety targets is factors do you consider that there is a danger that on a sort of ten year cycle. Many of these systems do new technologies—as you have described them in not deliver in a ten year cycle so you end up with a terms of government involvement—will lead to situation that they never really appear on the more accidents? horizon because they are not going to deliver until Professor McDonald: There is a possibility that in 2020 or 2030 or somethinglike that. It is very some circumstances some new technologies will diYcult for a government at the moment, given the cause some new type of accidents. If there is a full way things are. and proper engagement between industry and governments with clear understanding and agreed approaches then it is likely that the new technologies Q357 Chairman: This Government has made a will reduce accidents. conscious eVort—particularly in terms of transport—to reverse previous governments’ neglect Q360 Mr Stevenson: You did some work on V of longterm targets.It has made a conscious e ort automatic cruise control at Southampton, is that to produce five-year, 10-year, 15- and 20-year plans. right? Are you really sayingthat the Government is not Professor McDonald: We have done some, yes. going to be able successfully to do that simply because of the speed of change in the industry and Q361 Mr Stevenson: Your findings were quite the involvement in manufacturers? startling, were they not? Professor Carsten: No, I am not sayingthat at all. I Professor McDonald: Yes, there are a series of issues am sayingthat you do need to keep that long with automatic cruise control. This room is about horizon in mind and you actually need, I think, to 15 metres long, and if, say, you are driving on a create a technology road map and say that these are motorway at 30 metres per second (which is about the systems that we want to be out there, this is when we want vehicles to have certain capabilities and put 1 Note by witness: “Blackspots” in the future may be these in place. technology based rather than location based. 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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65 miles an hour) then you should leave about four that information becomes critical. We have times the length of this room between yourself and situations at the moment where we know there is the vehicle in front to maintain a two second information in a car and the only person who can headway separation. This is clearly not practical on actually access that information is the manufacturer many motorways. With cruise control you would or the maker of that car. If we are startingto need to be able to set headways with time investigate their liability we get to a situation where separations which are significantly less than two we cannot actually extract that information by seconds to maintain or gain capacity over present independent means. operation. Again, this is a market driven activity, because people will normally choose to drive at Q364Chairman: Are you tellingus you do not have about one or one point two seconds’ separation the right to go in and get that information? between them and the vehicle in front. If the Superintendent Hammond: We have the right to get technology does not allow drivers/purchasers the it; it is physically doingso. Some of the components, necessary flexibility of headway it will not be the only people who actually have the technology to attractive to buy it; and it will not come into interpret the information and extract it are the operation.2 manufacturers.

Q362 Mr Stevenson: I can tell you that when we were Q365 Chairman: Do you then ask for that assistance in the United States in Berkeley we saw an amazing and get a “no”? Is that what you are telling us? demonstration where they wanted to pile more cars Superintendent Hammond: As we have gone round onto their roads and they have this technology where doingthese presentations we have spoken to road the cars were in convoy. It was quite something. death investigators around the country, they have Professor Carsten, would you care to be a little bit described instances of vehicle manufacturers outside more specific as to how you assess the safety benefits of this country who have turned round and said and risks associated with Advance Driver Assistance there is no information in this system. We do not Systems? believe them, particularly when you are lookingat Professor Carsten: In some cases there is research whether or not the liability could be theirs. There are currently going on. At the University of Leeds we now one or two companies who are startingto getto are, funded by the Department for Transport, we are a system where they will oVer to extract that conductingresearch lookingat the longterm information for us at extreme cost. I suppose the best behaviour with intelligent speed adaptation. There is way to do it is an analogy, we do not care whether a fleet of 20 cars that are currently in use and those you have a video recorder, a DVD player or any cars are going to be used over two years of driving. other type of technology, we want to look at it The best way to find out is to do trials; small trials in through one television set; we want a system that the which you test the systems and you look at how emergency services or the investigating authorities people behave with those systems in the longterm. can pluginto any in-car system—be it black box, be At the moment there is not a lot of research in the it the information hidden behind the air bag—and public domain on a wide variety of systems and that extract it in a way that you can use it for evidence is one of the knowledge gaps in the area. and secure it. We tried to put through some research work with the European Union and that work was Q363 Mr Stevenson: Are the police satisfied that the going well and was looking to be funded and legal situation has been worked out in terms of suddenly had influence from certain quarters put on driver responsibility for crashes involvingcars it and it was put on hold for a year. We are in a equipped with systems that automatically do part of position where, to answer your question, we are not the driving? satisfied because we cannot even secure the evidence Superintendent Hammond: I think the simple answer which is our primary role, so that we can put it is no. We recognised this problem from our own before ourselves, the CPS or courts—be they civil or small group about a year ago and that has involved criminal—to make a decision on responsibility. a lot of work which is now in the latest revisions in the road death manual. What we do not look at is Q366 Mr Stevenson: Are drivers responsible for responsibility. When we investigate a crash it is a understandingthe systems in their vehicle and how search for the truth, to try to find out what has they operate? happened. What we have done since then is raise Superintendent Hammond: I would say from a awareness with out senior investigating oYcers of personal perspective and the police perspective, yes, the potential of these systems and the contribution but our role is actually to amass the information and they could have to a collision or a crash particularly present it to a court to make that decision. with road death. We are lookingat the involvement and the reaction and the relationship between the Q367 Mr Stevenson: I accept that; that is almost driver and the technology. Some of the issues we post-event is it not? have particularly come across is that there is a lot of Superintendent Hammond: Yes. information stored within a car and how you access

2 Note by witness: It is an example of where clear Q368 Mr Stevenson: I am thinkingin terms of a understandings between manufacturers and government is general approach and I wonder whether your needed. colleagues have a view on that. 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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Professor Carsten: I do not think they need to know about downstream sales indicates a real issue, but how somethingworks. I do not think that most one which I do not think immediately worries people in this room understand how a car works or manufacturers once the first sale has made. how a television works, what they have to understand is what behaviours they can predict from Q372 Mrs Ellman: Do you not see a problem there the system and that is part of what the previous in the manufacturer beinglegallyliable? group of speakers were talking about in terms of the Professor McDonald: No. trainingthat needs to be provided. Q373 Mrs Ellman: It has also been suggested that to Q369 Mr Stevenson: Who should be responsible for get most advantage from this there could be that training? platoons of cars going down motorways and Professor Carsten: Initially the car dealer who sells dedicated lanes. Do you think that is essential, you the car needs to train you in how to use it. ABS desirable, possible? is a good example of that. We know from research Professor Carsten: Fully automated drivingis that some of the problems with ABS are that people entirely feasible. That is what the people at Berkeley get frightened when it first comes on because it does and other people have shown. There is no reason somethingthey do not expect it to do—it makes a why you cannot do it on a dedicated road. There are loud noise, bangs around or whatever—and they quite a lot of problems associated with how we get take their foot oV the brake pedal in response to that to fully automated driving. I have a lot of concerns loud noise which is the worst thingthey can do in about what happens when a car is doing80% and the that situation because that defeats the purpose of the driver only has to do 20% because the driver is ABS. People do need training. simply not going to be paying attention to the road situation in those circumstances. V Q370 Mr Stevenson: Given the quite dramatic Mr Gi ord: If I could just add to that, I think the market-led developments that have taken place in work of Professor McKenna at ReadingUniversity terms of technology (we have seen some of it and it identified that what humans are very good at is is quite mind boggling) what about the driving test? takingdecisions; they are not very goodat watching It has been amended over recent years but in your dials. The danger is in the platoon syndrome (if I can view does this need to be examined by government put it that way) is that you end up with humans just in the light of the new technologies and, if so, how? monitoringand then they have to make a decision Mr GiVord: Perhaps I could start that one. I think and that is the point when they do not know what your question is absolutely right. The vehicle has to do. changed enormously in the last hundred years; the Professor McDonald: What you saw in California roads have changed quite significantly; but the was a platoon of about five vehicles running human has remained exactly the same so far as I can together. If the platoon gets much larger than that, work out. The drivingtest, althoughit has been you may have to have a larger gap because of amended slightly with the inclusion of the theory test instability in the followingprocess. Whenever a and the hazard perception test, has not changed vehicle has to leave the platoon a gap has to be significantly since the 1930’s when it was first created before lane change can occur. If you implemented. I think it is time not just to look at consider the UK road network, there are so many what is the technology in a vehicle that a driver is interchanges and there are so many short distance going to encounter because one has to avoid merely movements that the potential for substantial trainingskills; you have to train and educate capacity gain with these sorts of systems is very attitudes as well to give drivers the skills. Therefore limited. it is probably time that we need to revisit the whole question—and it would be a brave government who Q374Mrs Ellman: If we were to have platoons that would do it—of a graduated licensing system: would mean new road buildingand a lot more undertakinga certain amount of trainingand then a investment in road building, especially to deal with test, then doinga bit more trainingand then a second these cars. test enablingyou to be fitter for the road than you Professor McDonald: Yes, new roads or additional are at the moment. lanes depending on how access is managed. Again, the issue is related to distance travelled and on many of the motorways in the UK, duringhighflow Q371 Mrs Ellman: Should trainingin these new periods, the distances travelled are quite short with technologies be an absolute requirement before drivers joiningor leavingfrequently. This is not the anyone can purchase a car with the new technologies situation to get the main benefit from that sort of in it? platoon.3 Professor McDonald: In America if you buy a Mercedes with adaptive cruise control (ACC)— Q375 Mrs Ellman: You said earlier, Professor which is a radar controlled headway device—you are McDonald, that there would be diVerent kinds of given a short training course and you have to sign to accidents in the future. What sorts of accidents are say that you have been adequately trained and the use of ACC is your responsibility, before the car can 3 Note by witness: The balance of traYc between lanes, and be sold. Clearly trainingwill become more and more lane allocation for use by platooned vehicles may result in of an issue. The question that was asked earlier limited or negative benefits. 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Rob Gifford, Mr Julian Hill, Professor Oliver Carsten, Professor Mike McDonald and Superintendent Jim Hammond likely to happen with these new technologies? subsequently sell, which is understandable. I do not Professor Carsten, were you involved in some have a problem with that and I do not have a experiments? problem that that is aimed to improve UK Professor Carsten: There have been experiments and productivity. However, as a result we are not getting one of them is people not understandingthe full independent government fu nded research into scope of the system. For example, there has been technology. work done in Sweden on their drivingsimulator at the National Transport Lab where they looked at Q378 Chairman: Presumably it would have to go to what happens when you create a queue of traYcon a university. Somethinglike the poor old Transport the motorway and people approach that queue with Research Laboratory no longer operates under the an ACC System (Adaptive Cruise Control System) same terms, does it, so it would be in the same where the drivers simply did not understand that position; it would have to have some kind of their system could not handle it and they did not take commercial involvement, would it not? over manual brakingsoon enoughto deal with the Mr GiVord: I am not sure. If the Department for situation so in the ACC condition there were five or Transport were able, under its Vehicle Safety six crashes—I cannot remember the exact number— Research funding, to fund forward looking as opposed to virtually none in the non-ACC projects—similar to the ISA one, great credit to the condition. This does illustrate the potential problem. Department for doingthat—then clearly the People have to understand the limits. Not only do Transport Research Laboratory could bid for it in they have to understand what the system will do, the same way that any other institution could. I do they have to understand the limitations of the system not think the commercial side enters in there. I think as well. the crucial thingis that we need some more funding, basically. Q376 Mrs Ellman: What do the police believe are the advantages that these new systems could deliver to Q379 Mrs Ellman: Have you attempted to get the police? fundingfor this research and been turned down or Superintendent Hammond: In advantages they can has nobody tried? actually have some impact in terms of the collisions Professor McDonald: There is significant funding we go to. We should see a reduced number of within Europe. The fundingwithin the Research collisions, we hope, but there will also be Councils is more limited, although there are some disadvantages because some of these technologies new initiatives that are coming, that we have at the will end up distracting. One of my colleagues, a moment. One of the diYculties is that the devil is in Dutch police oYcer, was drivinground Delft trying the detail (of the operation of new technologies), so to programme his satellite system whilst I was trying if you take, say, adaptive cruise control—because to get out of the back of the car at the time. We are that is one which is out—the radar detectors operate going to see a lot more distractions. Humans will get at a hundred metres plus, whereas the algorithms are overloaded. As you have already heard, they will be only eVective at much shorter distances, because distracted doingother things;we will see di Verent they cannot diVerentiate lane positions of vehicles sorts of crashes. If you are lookingout for police ahead beyond about 50 metres in some situations. vehicles some of these technologies will enhance our They are, in a sense, sellingsomethingwhich in a ability to do our job better, but they will also sense is slightly false—they are promoting encourage some of the normal drivers to drive technology beyond its true operation.4 beyond their capabilities, not within the cars but beyond their physical capabilities (be that through age, driving skill or many other factors). We will see Q380 Clive EVord: Can I just follow that up to make people usingcars more quickly and we could end up sure that I understand it. We have seen other areas of with an almost neutral situation where we have vehicle technology (for example catalytic converter) resolved some issues but brought in a whole load where legislation led and the development followed. more. Technology very quickly adapted to meet the demands. What you are sayingis that the Q377 Mrs Ellman: Is this new world that we seem to Government is not doingthe research that will give be envisaging here something we should look it the understandingof these new developing forward to or is it somethingvery frighteningwhere technologies that would allow it to legislate. the driver does not, in fact, have control any more. Professor McDonald: The Department for Mr GiVord: I think the answer to your question is Transport has one project at the moment on fundamentally that is why we need some hard cooperative vehicle highway systems which should research into what is or is not going to bring benefit. form a social background to this process and it is Our concern is that there is research going on in the then a question of whether this will result in a good UK through something known as the Foresight targeted and properly funded research programme Programme which is looking at new technology, which involves industry. I think that it is critical for looking at commercial usage of technology, but if a 4 Note by witness: Proper dialogue should enable the university department wants to get involved it has to development of products which produce financial advantage get a commercial partner. Commercial partners are for the manufacturers and broader economic benefits for only interested in a product which they can society. This has not really happened. 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Rob Gifford, Mr Julian Hill, Professor Oliver Carsten, Professor Mike McDonald and Superintendent Jim Hammond governments to become fully involved in this process if it goes wrong? At that point you ask the question is to ensure the potential benefits oVered by new it safe? Havingsaid that, clearly some manufacturers technology are fully taken up . are viewing safety as important because they are usingtheir Euro New Car Assessment Programme Q381 Clive EVord: To get involved at that stage they star ratings as part of their advertising. I know that need to have their own independent source of advice was not initially popular with other manufacturers and information. but everybody seems to have fallen in line on that. I Professor McDonald: Absolutely. think it is not a high feature in consumer choice, but I think it is a feature which is becomingmore Q382 Clive EVord: We have been to Berkeley important or becomingexpected in that you see the University and we have been in the cars that merged, adverts and they have not just driver airbags but a set of three cars. You are sayingthat that sort of passenger airbags and so you say that it must be in technology is not suitable for our road network there and there is no need to ask about it. because the way our road infrastructure is used on the whole is for much shorter journeys and therefore Q386 Clive EVord: Should pedestrian safety form it makes that sort of technology impractical. Is that part of the New Car Assessment Ratings? your view? Mr GiVord: It does at the moment but it is reported Professor McDonald: Yes. There may be some separately. At the moment, when the Euro NCAP locations and some conditions where there may be results are published, they publish a star ratingfor benefits, and there may also be situations where the vehicle—the car occupant—and they publish a goods vehicles use a separate segregated lane.5 separate one for pedestrians. It is certainly the case that as longas these tests have been carried out Q383 Clive EVord: Does everyone agree with that? pedestrian star ratings have been much worse. They Professor Carsten: As Professor McDonald said, the are slowly improving, but it is a very slow process. In Dutch, for example, are lookingvery strenuously at our written submission we did argue that there might the idea of dedicated longdistance freight be a case for merging those two into one star rating motorways or freight lanes, and there is some for both occupant and person outside. That is quite potential there because obviously there are some controversial. It would mean that many cars longdistance freightmovements and you could currently receivingfive stars would suddenly find increase road capacity in that way. It is not only the they were only getting two. We think it is a way of issue of how you separate vehicles, it is also what you showingto the motor industry that pedestrian do with the traYc when it comes oV the motorway. protection actually matters. I am happy to say that If you double the capacity of a motorway then urban I am a car driver but I am also a pedestrian after I areas and the other parts of the road network also park the car to cross the road to buy a newspaper. have to double up on their capacity and that is There is no homogeonous group who are only car almost impossible. TraYc does not just travel on the drivers; all car drivers and car occupants are also motorway and journeys do not stop as soon as you pedestrians. get oV the motorway; you have to use other parts of the network as well. Q387 Chairman: That is not the impression you get V V from the tabloid press, Mr Gi ord. Q384Clive E ord: In order to make the best use of Mr GiVord: I bow to your greater reading of the this sort of technology we are looking at a separate tabloid press, Mrs Dunwoody. and probably new strategic road network over longer distances that could take things like freight. Q388 Chairman: Does one read the tabloid press? Professor McDonald: New lanes, not necessarily a V new network. It would be diYcult to remove a lane Mr Gi ord: On the train, over people’s shoulders. for a whole range of reasons to do with the However, as I say, it would not necessarily be a distribution of traYc across lanes, but you would be popular move with the car industry to merge them lookingat new construction. into one rating, but it would be a way of putting some pressure. Q385 Clive EVord: It could be a mixture of both in terms of that. Could I just move onto another Q389 Clive EVord: In addition to you making subject which is consumer choice? I just wondered submissions, what else could be done in order to give how much safety influences consumer choice about these things more priority? vehicles. Mr GiVord: I think there is an awful lot that can be Mr GiVord: The evidence that I have heard from, for done in this buildingactually and I do not say that example, the AA MotoringTrust is that safety is just because we are sittinghere. I think political featuringin position four or five. I think anecdotally pressure on our Government to ensure that the I guess that matches one’s own experience in that changes to vehicle design that are coming in from what you first look at is how much is it going to cost 2005 through the agreement and subsequent me? Can I aVord it? How longis it goingto be before European directive have to be monitored eVectively. I can get hold of this vehicle? How near is the garage In the Government’s Road Safety Strategy there was an anticipation that changes to vehicle design could 5 Note by witness: This would require radical changes in use of lead to a reduction in pedestrian fatalities and roadspace and perhaps some new construction serious injuries of around 19%. That was based on 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 46 Transport Committee: Evidence

25 February 2004 Mr Rob Gifford, Mr Julian Hill, Professor Oliver Carsten, Professor Mike McDonald and Superintendent Jim Hammond the industry meetingvery stringenttests, much more within vehicles of th at category. A five star mini diYcult than they face at the moment, and meeting vehicle is not providingyou with the same level of them much more quickly than they are. We have safety as a five star full size family saloon. We need to gone for a slightly softer approach through the make sure that people understand that star system. negotiations in Europe. Our Government needs to make sure that they monitor that those are bringing Q393 Chairman: Where do they get that the benefits that were anticipated. information? It is all very well, but we have had evidence from the work that is beingdone by the Q390 Clive EVord: Should Active Safety systems be insurance industry that they have access to a whole covered by the Euro NCAP ratings? lot of completely diVerent parameters. They are Mr Hill: I think in answeringthat question we have doingit for their own profit and motives so they are to make sure we are clear what we mean by Active very targeted. They know what they want and they Safety systems because we have the systems make sure they get the information. They are using currently very much available in the market such as research which, in eVect, if it were available to the brakingsystems and in terms of Active Safety we average consumer, would give them not only a very need to be able to have good sight of the road, we clear idea of what the vehicle was going to cost need to have good handling of the vehicle and so on. initially but also what it was going to cost to run and There is work underway at the moment—as I am what all the other implications were. That seems, in sure you are aware—to look at ways of developing some ways, information that we ought to have access schemes for ratingthat sort of current Active Safety to. What would I getfr om this? Where would I find system within the Euro NCAP procedure. That a clear statement of what all this represents because seems to me to be a thoroughly good idea to be able I am quite sure nobody knows that the five star to know for your vehicle if you have a good rating recommendation is only within that class of motor on, say, brakingperformance and so on. I think that car. should be clearly rated separately from the other Mr GiVord: You get some of it from the Euro NCAP safety issues that the scheme will raise. On the other website, for example. hand, we then have the whole raft of Active Safety technologies which are talked about for new cars for Q394Chairman: It may seem strange to you, Mr the future. It is perhaps a little too early to say GiVord, but it is not somethingon which I expend a whether it would be possible or appropriate to great deal of time. incorporate that into such a scheme. Mr GiVord: You would get some of it from journals like What Car who publish the ratings. I think you Q391 Clive EVord: Is there further work needed? are right in that there are a number of diVerent Mr Hill: I would certainly agree with the discussion sources of information, some of which is confusing earlier that generally in developing these more to the consumer. What Euro NCAP does is to advanced active systems for cars of the future we predict what a vehicle will do if it is in that kind of need to do a whole lot more research, I think, before crash. There are other data—which Julian was we understand which are the appropriate systems, involved in—known as the Cooperative Crash what their potential eVectiveness could be and so on. Injury Study which looks at historic data, at vehicles I think we have to go in parallel with that process that have actually crashed and what happened as a before we can decide on consumer rating. result. The diYculty therefore is matchingup the prediction with the history. Q392 Clive EVord: Has labellingbeen e Vective in Chairman: The diYculty is simpler than that. If I am informingthe consumer and encouragingthe going to buy a car and I want to assess its cost, its purchases of safer vehicles? eYciency, how much it is going to cost to run, what Mr GiVord: I think it has. I think it has been very the insurance costs are going to be and whether or interestingthe way the media—the tabloid and the not it is going to kill me on the first outing, I need to broadsheet media in this sense—have actually know whether this information means anything, let picked up the Euro NCAP process and reported alone whether I can find out whether it means quite extensively. I suppose that is because anything. I need to know whether it means anything; photographs of crunched up cars are newsworthy you are convincingme it does not really mean a and they do make good photographs. As a result, great deal. they tend to get full page spreads. I think in the same way that people like to look at miles per gallon, Q395 Clive EVord: If you are drivinga Mini you are although it is sometimes quite diYcult to not just going to meet other Minis on the road so you understand—what is the urban cycle, the mixed need some sort of standard comparison, do you not? urban cycle and the distance cycle and how many Mr GiVord: I think if you are askingwhere are you miles am I going to get from a tank—nevertheless going to get it, you are goingto getit from a very people do think about that as a way of makinga car large number of diVerent sources and it is going to be choice. I think increasingly through extensive media confusing. That would be a case for an independent coverage the star ratings are getting into the public consumer organisation actually taking it all on one mind as a way of understandingwhether or not the side and putting it all toge ther in one source and vehicle I am buyingis safer than another vehicle. The sayingthat this is what the di Verent sets of data only diYculty is that the star ratingcompare crashes mean. 9665841001 Page Type [O] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

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25 February 2004 Mr Rob Gifford, Mr Julian Hill, Professor Oliver Carsten, Professor Mike McDonald and Superintendent Jim Hammond

Q396 Chairman: This is supposed to be a European he was too tired to carry on driving. Clearly the assessment. This is not somethingthat is beingdone driver is liable; the system may operate fine. If the by the Outer Hebrides Parish Council dealingwith system had not given any w arningat all and was the furthest island; this is a European assessment. faulty, then the system might be liable. This is a grey What is the point of information which firstly is area. I do not think you can say across the board that diYcult to understand, secondly it does not mean it is a case of system liability, product liability being anythingwhen you understand it and thirdly is just all on the manufacturer or product liability beingall costingus a very greatdeal of money? Or am I being on the driver. prejudiced? Mr Hill: I agree there is a need to coordinate the Q400 Miss McIntosh: I think it does link to some of diVerent information sources. the earlier questions that we have asked of yourselves and other witnesses that there is another Q397 Chairman: It is not happeningand it certainly grey area about a customer buying one of these is not happeningat European level. Is that what you products and not unders tandingproperly how to use are saying, Mr Hill? it. Is the customer then held liable because he is too Mr Hill: In terms of coordination of a range of stupid to understand how to drive the vehicle or diVerent sources from diVerent governments, I think misunderstand the signals or is the seller of the the Euro NCAP organisation does provide quite a vehicle liable because he has not explained it to the good technical breakdown, but if I may say I think customer? perhaps the true measure of the success of Euro Superintendent Hammond: There is a European NCAP is how much safer have vehicles become funded project called Response Two which is duringthe lifetime of the project. Recent studies we actually looking int o those very details. I do not have done lookingat the accident data do indicate know a lot about it other than they are putting that the protection provided to occupants has together a group of lawyers and comingup with increased quite considerably in all classes of vehicles scenarios and testingthose kinds of relationships over recent years. and liabilities.

Q398 Chairman: But I do not know that and I have Q401 Miss McIntosh: It will fall under the European no means of knowingit and if I getaccess to the Product Liability Directive presumably. information it will probably confuse me. Apart from Superintendent Hammond: I do not know. It is not that it is an ideal scheme. an area I am workingin but I am aware that has just Professor Carsten: I think the scheme operates also been funded and set up again in its second phase. on the fact that the manufacturers do not want to Professor McDonald: It was a bottom up type score badly so they are all shooting—at least in terms process from the vehicle manufacturers because they of occupant protection—for the highest scores. In want to get a clear understandingof what they can that sense it has operated extremely well and I think bringinto the market and how this can be done. that is why the European Commission is thinkingof There are still some unce rtainties in terms of the extendingit to other parts. Euro NCAP is a outcome, but it is an evolvingprocess. voluntary arrangement; it is not imposed on anybody. People make contributions. The testing Q402 Miss McIntosh: The drivingtest testing scheme is a voluntary scheme, consumer labellingif competence, do you think it will go far enough for you like. Clearly what happens is that manufacturers present purposes and future purposes, includingthe do not want to do worse than their peers. Some new technologies? How are the police using manufacturers have set themselves a target of advances in vehicle technology and what vehicle scoringfive stars on every model across their range. technologies would the police like to see in their Renault is a very good example. In that case it own fleet? works. Superintendent Hammond: The first one I think is one of these moveable feasts. As we introduce new Q399 Miss McIntosh: Professor Carsten, you technologies the driving test will need to keep pace mentioned that more accidents were likely to with them because some of them will need specific happen. We have taken evidence from the SMMT testing; others will need awareness testing. Certainly who are concerned about product liability. Should responsibility and liability for usingsome of these this be somethingwhere the universities can perhaps technologies would be useful to have in a driving test help as to who should be liable in the event of an in the future. My colleagues at the DSA are already accident usingintelligentcars? Should it be the startingto consider those considerations. Certainly product that is held liable or the driver? Why is the in our police vehicles we use mobile data terminals Government not doingsome work on it? so we can access command and control and a lot of Professor Carsten: I am not a liability lawyer but other features. That is a good starting point for us there is obviously not one single answer to that. It but we are really lookingfor many of the kind of may be the driver is misusingthe system. Let us say technologies that are av ailable: electronic vehicle you have a fatigue warning system and the driver identification both in our own vehicles but also to uses that to drive longer at night and then says he fell enable us to communicate in the future to other asleep and eventually after the thinghad givena few vehicles. We want to get to a stage where the blue buzzes he did not hear the last buzz tellinghim that lightand siren is not th e only way of tellinga car that 9665841001 Page Type [E] 11-07-05 22:00:20 Pag Table: COENEW PPSysB Unit: PAG1

Ev 48 Transport Committee: Evidence

25 February 2004 Mr Rob Gifford, Mr Julian Hill, Professor Oliver Carsten, Professor Mike McDonald and Superintendent Jim Hammond we are comingthrough.Particularly in places like the location so the driv er does not have to fiddle traYc light control junctions we are just about to around and it just comes up. We have actually tested start a project where we are thinkingabout that. Over about a four mile jour ney I was driving developinga product that will actually enable us to the car without this system; my colleague was communicate to other cars to give them more driving one with. It took me ten minutes longer by warningthat there is an emergencyservice vehicle the time I had stopped and looked at the map to find coming through. There are a lot of technologies that a rural location. There are real technologies that we we are lookingat, but we are facingsome of the are startingto put in our cars. They do not come issues that I talked about earlier about overloadingcheap and with the car s of the future it is thinking our drivers, particularly when they are in response about where do we fit them, how do we use them and situations. In our submission I talked about Project how are they going to impact on police driving? e-Merge. One of things we have done on that is Chairman: That has been very helpful. Gentlemen, actually to develop a satellite navigation system. It is you have all been very patient. Thank you very a very, very basic form, but the control room input much. 968939PAG1 Page Type [SO] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 49

Wednesday 3 March 2004

Members present:

Mrs Gwyneth Dunwoody, in the Chair

Mr Brian H Donohoe Miss Anne McIntosh Mrs Louise Ellman Mr John Randall Clive EVord Mr George Stevenson Ian Lucas Mr Graham Stringer

Witnesses: Rt Hon Jacqui Smith, a Member of the House, Minister for Industry and the Regions and Deputy Minister for Women and Equality, Mr Ashley Roberts, Deputy Director of Automotive Unit, Mr Robert Saunders, Head of Downstream Oil, Ms Bronwen Northmore, Director of Coal and Hydrogen Energy Economy, and Mr Duncan Corrie, Policy Co-ordination and Regulation Team, Department of Trade and Industry, examined.

Q403 Chairman: Minister, may I ask you, firstly, to Vehicle Partnership, there are a range of activities identify yourself and those that you have brought that we should be engaged in now in order to get with you. us to that position. Jacqui Smith: My name is Jacqui Smith and I am Minister for Industry and the Regions and Deputy Q407 Mr Stevenson: Do you think that the advent Minister for Women and Equality in the of such developments as the dual use vehicle that Department of Trade and Industry. If it is okay, is now in the market is a steppingstone towards Chairman, I would like to ask my oYcials to say fuel cell technology or do you think it should be who they are. seen as an alternative? Mr Saunders: Robert Saunders. Jacqui Smith: I think, and industry certainly seems Mr Roberts: Ashley Roberts, Deputy Director at to agree, that hybrid technology could be quite an Automotive Unit, DTI. important steppingstone, because one of the Mr Corrie: Duncan Corrie, DTI Automotive Unit, important challenges in terms of the sort of Policy and Regulation Team. manufacture and design of the motor vehicle itself Ms Northmore: Bronwen Northmore, Director of is the shift from the traditional powertrain that you Coal and New Energy Technologies in the Energy have in an internal combustion engine to the Group in the DTI. electric drive train that is necessary in order to produce a fuel cell powered car. One of the Q404 Chairman: Thank you very much. Minister, advantages of hybrid technology is that it enables did you have somethingthat you wanted to say to you to begin to develop that electric drive train. I us before we begin? am certainly very concerned that we use that Jacqui Smith: No, I do not, Chairman, thank you. potential to make sure that we are getting some of Chairman: In which case we will go directly to that development in the UK. questions. Q408 Mr Stevenson: Do you think there is enough Q405 Mr Stevenson: Minister, fuel cell technology focus in the UK on the development of fuel cell for motor vehicles, are you a convert? technology or have we got too many organisations? Jacqui Smith: In terms of the long-term solution for What role should Government play if we are how we are going to achieve both the technological makingsure that the focus is rather more e Vective improvements that we want to see in cars and the than it appears to be at the moment? environmental improvements that we want to see Jacqui Smith: In terms of fuel cell technology and the fuel cells are the way forward, but I think that the developments of that technology, I think we are is some way into the future and there are a variety focused in Government. Since 1992 we have been of steps that we are going to need to take in the supportingthe Advanced Fuel Cell Programmein interim and that will involve both energy the DTI. That is not all about fuel cell use in developments and technology developments in transport because in many ways the development automotive manufacture as well. of the use of fuel cells in transport is likely to be towards the end of the line in terms of the Q406 Mr Stevenson: Some time in the future, five technology development, but there is certainly years, 10 years, what would you say? some element going in through that route. We have Jacqui Smith: I hear what the industry is saying. supported the development of Fuel Cells UK which Our interest is at what point manufacturers are is eVectively a trade association that is raisingthe likely to be able to produce vehicles that are fuelled profile of the fuel cell industry in the UK. We are by fuel cells on a commercial basis and everythingsupporting,obviously t hrough the Engineering and the industry seems to be sayingis that that will be Physical Sciences Research Council, quite round about 2020. That is not an argument for not significant and growing investment in the doinganythingin the interim. I think, as we have development of fuel cell research and that research shown through the activities of the Low Carbon has tended to shift from the support advice to 9689391001 Page Type [E] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

Ev 50 Transport Committee: Evidence

3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie

Government about what the potential future for Q411 Chairman: With respect, I remember what fuel cells would be to more practical research happened when we sent DTI oYcials when I was a around the applications of fuel cell technology. junior minister, it was a very nice way of keeping There is also quite considerable research going on them out of our hair. Where is the urgency? Where in terms of the sort of fuels that would be necessary is the Government’s focus? What is very clear both for fuel cell technology because part of the from the American experience where it is British environmental benefit is around what fuel source engineering largely fuellinga lot of the innovative you are usingin your fuel cell technology. changes that you now see in American cars and the Japanese experience where you see very clear Q409 Mr Stevenson: That is heavily linked in with government commitment to put real money and real energy into pushing forward for a completely the Government’s renewable energy source because V the economics of this are dependent, are they not, di erent form of vehicle technology is that that on this? Do you see a link there between they not only have a timetable in mind but they Government policy and fuel cell technology? have a very clear view of where they want to go. Jacqui Smith: I see two links. Firstly, it is quite Where is that urgency in Government? clear that in order to meet the targets we have set Jacqui Smith: I think the urgency is represented ourselves in the Energy White Paper in the longer through the Powering Future Vehicles strategy and I think it is represented in terms of ministerial and term in terms of CO2 reductions transport will have a role to play. There is that link into Government political coherence in the ministerial group. policy but there is also the link in terms of what Government can do to support that development Q412 Chairman: So you could point out to me very alongthe route to 2020 when we mightrealistically specific projects and you could name particular expect to see the commercial use and production of places where there is work going on and tell me vehicles that were usingfuel cell technologyto what the timetable is? power them at that point. Jacqui Smith: I could point you to the specific—as could the report we made to Parliament—outputs that have come from the PoweringFuture Vehicles Q410 Chairman: On our trips to America and project. I could point you to the specific projects Japan we have seen very clear evidence that both that are beingfunded under the £100 million-worth these nations are takingthis programmenot only of projects in the Foresight Vehicle Programme. I very seriously but they are certainly not talking could point you, in terms of the energy work, to about 2020. There are 12 diVerent agencies and the £55 million that is beingdevoted precisely to funds to assist the development of cleaner vehicle the new and renewables energy elements of the technology. Where is this focus that you are Government’s work. I was going to come on to say talkingabout? that I think it is probably a reasonable criticism to Jacqui Smith: Firstly, I think the development of say that there is a need to develop more coherence the Low Carbon Vehicle Partnership is an and that, of course, is one of the reasons why, important way and an internationally recognised takingup one of the recommendations from the way in which we are focusing and bringing together Automotive Innovation and Growth Team, we will some of the areas of research and development and be bringing forward a Centre of Excellence for low industrial input in both the public and the private carbon and alternative fuel vehicles. sectors to look at what some of those key issues are. I think it would have been a fair criticism before the development of that partnership to say that there Q413 Chairman: What sort of timetable are we was a limited amount of synergy between the sort talkingabout there? What have we gotin mind? of developments that were happeningin terms of What work has been going on in conjunction with the fuels technology on the energy side and the the education? developments in relation to the sort of technology Jacqui Smith: The planningof the business case has and mechanics that were happeningin relation to been carried out by the R&D Group of the Low the car manufacturingindustry. I think now there Carbon Vehicle Partnership thereby ensuringthat is better co-ordination and more coherence we are getting a coherent input from all the between those. The Foresight Vehicle Programme diVerent partners there. We are expectinga for example, in terms of havingdeveloped a road business case for that by the end of March and a map of technology and in terms of having two of launch of the first year’s priorities by the end of its five objectives which are focused on the sort of May. developments that we need to fund and see in relation to getting some of this technology from the Q414 Chairman: It would seem to me more logical theoretical stage eVectively into the practical stage, to pull together many of these things. The are important ways in which I think there is more administrative cost of havingall these di Verent coherence. It is certainly right that there are a projects and individual initiatives must be quite variety of initiatives both in the energy area and the high, must it not? Can you put a figure on what car development area, but there has been quite these 12 agencies are costing? considerable eVort put in with DTI oYcials sitting Jacqui Smith: In terms of the 12 agencies or the 12 on the programme bodies and some of the Energy programmes that you are referring to, if you Saving Trust programmes like PowerShift— wanted to give me a list I am sure I could get back 9689391001 Page Type [O] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie to you with it. In relation to the Foresight Vehicle Jacqui Smith: Firstly, we need to be clear in the UK Programme, the administrative costs are about about where the capacity is in the supply chain, two% of the overall programme and that includes where the expertise is. the payment made to the Society of Motor Manufacturers and Traders for their Q418 Chairman: Would you mind explainingwhat administrators of the project. In relation to the you mean by that, Minister? Are you sayingwe renewables and new energies research and really need to know where there is extra room for development programme, it is also about two to people to make things? What is your definition of two and a half% of the total administration costs. where the capacity is? Jacqui Smith: Who is it that is currently makingthe bits that go into the drive train, the bits that go into Q415 Mrs Ellman: What else are you going to do to the technology, the bits that go into electronics in help SMEs become involved in new technologies? the UK, which sort of companies are currently Jacqui Smith: Firstly, ensuringthat in the UK the doingit, do they know what sort of opportunities very considerable expertise which the Chairman might be available, do they know who they might referred to that we have in the supply chain is be able to sell to, quite often not, that is part of the supported, that is a very crucial one and that is why work of the supply chain group of the Low Carbon one of the priorities for the Low Carbon Vehicle Vehicle Partnership. Partnership will be a supply chain group which has now met twice but, more importantly, is beginning Q419 Chairman: So if people have not enough to develop its work around mappingwhere in the initiative to find out from Government what is UK at the moment we currently have capacity in available to support their commercial the supply chain that we will be able to develop as developments you feel it is important that you go the work goes forward on developing these cars and out and find them? vehicles into the future. Secondly, it is the case in Jacqui Smith: No. Going back to your suggestion the UK that we have an advantage in powertrain earlier on, Chairman, that it may be an accusation development. There is some expertise which I think to make of Government that there are a whole it is important that we look at about how we range of areas of support, one of the things that we develop and support the challenges that that will might want to do is to make it easier for those face in going forward into the new sorts of small- and medium-sized companies, who quite production and development that is going to be often do have a lot of get up and go, to go out and necessary. find information.

Q416 Mrs Ellman: Could you give us any examples Q420 Chairman: You do not find that a fairly of where there have been successes and where you peripheral response to the question Mrs Ellman is think you might have to intervene to create new askingyou? developments? Jacqui Smith: That is one response alongwith what Jacqui Smith: I could because I went on a tour of I was talkingabout in relation to the investment in supply chain companies with the Society of Motor research and development, all of which are pretty V Manufacturers and Traders, many of whom have significant and likely to make a di erence. precisely the sort of expertise that I was talking about earlier. In relation to another area of your Q421 Mrs Ellman: Are you satisfied with the work in this particular inquiry in terms of the sort progress that has been made up to now? of telematics and the safer development of driving, Jacqui Smith: As I suggested in an earlier response, I visited TRW Conekt, for example, which is one I think there has been some encouraging progress of the companies that is benefitingfrom some of made in what was the first year of the Low Carbon the investment that is beingmade into research and Vehicle Partnership. There is clearly a lot more to development and demonstration projects with be done, which is why we set the targets that we respect to better ways of guiding vehicles and that did in the PoweringFuture Vehicles strategyand is a company which is receivingsome support why there is a lot more work that needs to happen. through that particular programme. There will be Have we arrived yet? No, I do not think we have. other companies who will be receivingsupport Have we made a good start? Yes, I think we have. through some of the projects that are being funded under the Foresight Vehicle Programme and I Q422 Mrs Ellman: What about new fuel could certainly forward to the Committee infrastructure, are you satisfied with what has been information about the sort of partnerships, done on that? includingthe small- and medium-sized companies Jacqui Smith: If you look at the development of the which are benefitingfrom that investment. LPG infrastructure for example, what was important there in terms of Government action was how we produced the demand for LPG which has Q417 Mrs Ellman: What sort of changes do you now led to over 1,000 sites where you can get LPG think need to be made? Are you lookingat capital across the country. There what was important was grants or loans? What kinds of changes should be the fiscal changes that we made, the duty made or are you satisfied at the pace of progress? diVerentials that were introduced by the 9689391001 Page Type [E] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie

Government and also the incentives to individual things need to move together and I think there is consumers, largely through the PowerShift a virtuous circle as those things move forward, but programme, to buy those vehicles in the first place. I do not think one or other of them is limitingthe When that demand was put in place the fuel development. companies responded to that by developingthe infrastructure. If part of what you are askingme is Q425 Mrs Ellman: What is the incentive for fuel whether Government should now be taking companies to do this when they are satisfied with responsibility and ownership for developinga the current situation? hydrogen infrastructure, I think my response would Jacqui Smith: The incentive would be where you see be that that is not likely to be the most eVective the development of the vehicles. If we take the LPG way in which we develop the infrastructure. What example and this is not necessarily what we are we learnt from LPG is that you need to put in place proposingpolicy wise— the incentives to create the demand and then that will make it commercially viable for the fuel Q426 Chairman: You keep quotingthe LPG companies to develop that infrastructure. I would example. That is the very obverse of your argument have thought that was the most appropriate way to because it is very clear the Government gave fiscal develop that. encouragement, people moved towards creating the infrastructure, they looked at other means and they Q423 Mrs Ellman: How would you see a hydrogen encouraged people to use other forms of vehicle. As fuelled infrastructure developing? Are you soon as the Government changes its fiscal rules suggesting the Government does not have a role then it is very clear that is going to go quietly down in that? the tubes. I hope we are not going to go too long Jacqui Smith: I do not think the Government’s role into the LPG example because many of us would is to go round funding large numbers of hydrogen feel that is a very bad example. filling stations. As I suggested in my earliest Jacqui Smith: I would not because that is precisely answer, in terms of commercial exploitation I think my argument. it is some way oV. To begin with the infrastructure is likely to develop because fleets of vehicles will Q427 Chairman: I am not clear precisely what your need hydrogen fuelling and those fleets are likely to argument is. get their fuelling from depots. There may well be Jacqui Smith: My argument is should Government some questions about where Government does play a role in buildingand providingthe have a role, for example around planningissues, infrastructure? No. That should be the where I think the role of Government may well be responsibility of fuel companies. Should to make sure that there is clear information about Government play a role in developingthe demand what the implications of a hydrogen fuelling station for the vehicles which use that particular fuel? are so that perhaps both local authorities and local Potentially, yes, as they did in relation to LPG. people can be reassured about the safety or the That is my link to LPG. standards that will be associated with that infrastructure. That is a role for Government in Q428 Miss McIntosh: That is completely the terms of developingthe infrastructure. reverse of what is happening. We have taken evidence from people who have invested in the Q424 Mrs Ellman: Do you not think the pace of infrastructure which the Government has development is going to be very slow unless the encouraged them to do because there was the Government gets more involved? reduction on LPG. The Government is now going Jacqui Smith: No, I do not necessarily and that is to reduce that and we have seen that while the take why I referred to the LPG example. My view is that up on diesel fuelled new cars has gone up hugely it is not likely to be the case that if Government there has been a reduction in alternative fuels like either were able to or were minded to say, “Right, LPG. So it is quite the reverse of what you are okay, now we’re going to build a whole series of saying, Minister. hydrogen filling stations,” that would be either the Jacqui Smith: That might be an argument about most eVective and most eYcient or even the whether or not LPG is the most appropriate quickest way of doingit. I do not think that is an technology at this particular point. That is not appropriate role for Government to be playing. necessarily an argument about the infrastructure. The emphasis needs to be on, as it has been in the past, fuel companies for actually seeingthe Q429 Miss McIntosh: With respect, Minister, you commercial viability of developingthat particular have encouraged, through the use of this infrastructure. Some have argued that they would diVerential fuel duty rate, as the Chairman has put be able to develop fuel cell cars more quickly if it, quite small investors sometimes to commit. I somehow or other there was the infrastructure in have a garage supplying Calor Gas in my place. I do not think that the infrastructure is the constituency who has made the investment in this limiting factor because, as I have already suggested, because of the encouragement by the Government there are some quite considerable technological to do so. Now you are removingthat di Verential challenges in terms of the development or the and they feel they have been hungout to dry. Who actual manufacture of the vehicle. Both of those is going to use that infrastructure? 9689391001 Page Type [O] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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Jacqui Smith: It is right that the Government Jacqui Smith: That is not necessarily just cars, no, should take decisions about—and I am sure you that is the development of fuel cell technology. will talk to John Healey about this—the fiscal There is also, as I suggested, the £55 million going incentives on the basis, as the Chancellor set out in in to new and renewables. I was not quite sure the Pre Budget Report, of the environmental and about the middle figure that you were talking the economic and the social implications there. In about. terms of the arguments about certainty, the Chancellor has already made clear that he believes Q435 Mr Donohoe: The middle one is to do with that there should be a three-year certainty in terms supportingthe Carbon Trust who put in something of diVerentials which will enable there to be a like £5 million a year and the DTI are puttingin longer time-frame work for planning. £19 million a year. Why I am askingthese questions is, regardless of the area we are talking about, we Q430 Chairman: It is very kind of you to repeat are talkingabout minuscule sums by comparison this, but I do think we know the arguments and we to what the oil companies continue to invest to have taken a lot of evidence on it. You have been have their hold on the marketplace. There has been quotingthis particular example as a clear statement very stronglobbying—indeedthere always has of the Government’s commitment. been because I have seen it both inside here and Jacqui Smith: With respect, what I have been outside here—by the oil companies to maintain quotingis that as an example of where I think the their position. I would argue with you whether or V Government has a role in developingthe not there is enough e ort going in from the infrastructure. Department on the basis of lookingat the alternatives to the idea of continuingto have gas guzzlers and oil burners being the mainstay of our Q431 Chairman: Yes, but you draw from that the transport system in this country. That is where I conclusion that all is now well and we can then am lookingfor to you giveus some indication and move onto somethingelse. to have some clear direction shown by Government Jacqui Smith: I did not draw that conclusion. What to overcome this position. I am sure the oil I said was, in terms of the overall development of companies have a massive interest in maintaining infrastructure, that was where I thought the policy the status quo. decisions need to be made in the future in relation Jacqui Smith: Heaven forbid that I should be here to hydrogen. as an apologist for the oil companies, but fuel Chairman: I see. companies have been willing to engage in the Low Carbon Vehicle Partnership precisely lookingat V Q432 Mr Donohoe: How much money is it that the how we develop the future of di erent ways of Government has put in to lookingat alternatives fuellingour vehicles. They would also see to the present situation in terms of oil beingthe themselves not so much solely as oil companies but main user as far as vehicle movements are also as fuel companies. Where Government has a concerned? How much are they puttingin in the role is in creatinga demand for alternative forms current fiscal year? of fuel which fuel companies will then have an Jacqui Smith: I do not know the figures in relation incentive to meet. What I would include in terms of to alternatives with respect to transport fuels, but the Government’s commitment is the considerable in terms of the overall investment in research and investment that is going into developing the development for new and alternative fuels, that is vehicles that will be usingthe alternative forms of £55 million over a three-year period. fuel. That brings us to projects that are being funded through the Foresight Vehicle Programme, which covers £100 million-worth of projects, not all Q433 Mr Donohoe: It has been £12.4 million since of them to do with low carbon vehicles but two out 1992 based on what information we have to look of five of the objectives to do with that. It also at the Advanced Fuel Cell Programme. The total brings us to the other support that is being put in project value is somethinglike £92.4 million over by the Energy Saving Trust to increase the demand that period. We have got something like £19 million for alternative sorts of fuels to prompt the sort of per year comingin on the basis of the di Verent developments that you are talkingabout. carbon aspects and £5 million from the Carbon Trust themselves. That is minuscule in real terms Q436 Mr Donohoe: What work, if any, has been compared to what is required, is it not? As I undertaken? Your Government has got understand it that is the direction that the responsibility for patents, is that right? Government is going to take us. Would you Jacqui Smith: Yes. concede that? Jacqui Smith: The £12.4 million relates to the specific investment so far into the development of Q437 Mr Donohoe: What work has been fuel cells. undertaken in terms of lookingat the patents that perhaps have been filed maybe 20 years ago or lookingat the potential for oil companies to Q434 Mr Donohoe: That is not just cars, is it, in purchase patents and to stop any further itself or is it? development of these patents to the point where 9689391001 Page Type [E] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie they become practical alternatives to the use of the Q441 Clive EVord: Just to recap on that then, your amount of oil and the amount of fuel that is being Department recognises that there is some urgency used? Is there any research beingundertaken by to deal with CO 2 emissions in vehicles if we are your Department to look at that because I am sure going to meet that target, because emissions at the there are examples, indeed I have heard of them, moment do potentially pose a real threat to in the industry and in the newspapers to suggest in achievingthe 2010 targetwe have set ourselves. actual fact that there has been that happening? Jacqui Smith: I think there is a clear need for the Jacqui Smith: I do not know of any, but I am action we have put in place, like the Powering certainly willingto ask the Department to check Future Vehicles strategy . and get back to me. Chairman: I think you will find the Patents Unit Q442 Clive EVord: Are you confident that we will will not have any way to do that. meet the five million tonnes of carbon reduction anticipated in the 10 Year Plan from the voluntary Q438 Clive EVord: Is the UK on track to meet both agreement with car manufacturers? the Kyoto target on greenhouse gases and our own Jacqui Smith: As far as progress so far is domestic target to reduce carbon dioxide emissions concerned, in terms of what would be a 25% by 2010? reduction from 1995 to 2008 to an average of 140g Jacqui Smith: Yes, we think we are. In fact, the per kilometre travelled, the progress certainly looks Kyoto target has already been met, and we are now as if it is on track to get us to the target by 2008 making progress, as you said, to the domestic target across the whole of Europe. that we set for 2010 of a 20% reduction in carbon dioxide emissions below the 1990 levels. We think Q443 Clive EVord: What is the transport sector we are making progress on that through a variety doingto keep itself on track? of means: the implementation of the general Jacqui Smith: A variety of things. There has been Climate Change programme; the Emissions a contribution from greater eYciency, there has TradingScheme, for example; and the been a contribution to the average, if you like, from contributions that have been made by the sort of an increase in the amount of diesel vehicles, and transport developments that we are talkingabout there have been contributions from improved in this inquiry. technology, which is contributing to energy eYciency. It is not actually an easy task in terms of the industry because, of course, those things are Q439 Clive EVord: Do you expect CO2 emissions happeningat the same time as both consumers and for road transport to be reduced by 2010 and regulators, understandably in both cases, are further on in accordance with the White Paper puttingpressure on the CO 2 emissions, through, for by 2050? example, consumer demands around air Jacqui Smith: Transport makes up about 25% of conditioning, through regulations—correct in my the CO2 emissions, and of that, about 85% comes view—around safety, around pedestrian from road transport. What we have seen over the protection, which are likely to aVect the last five years is that, although the distance in miles aerodynamics of vehicles, which are likely to driven has increased, the increase in energy increase weight through side bar protection and eYciency has meant that the carbon dioxide issues like that. emissions have remained pretty level. But my understandingof the forecastingfor the future is Q444 Mr Stevenson: You did say that the forecasts that models are forecastinga slightincrease in CO 2 are for a slight increase in carbon emissions from from transport by 2010 based on an assumption of the transport sector. Accordingto the figureswe business as usual, in other words, not takinginto have been supplied with, the latest national consideration the impact of the 10 Year Plan for forecasts project that carbon emissions from Transport or the current Future Vehicles strategy terrestrial transport in 2010 will be in the range of or the European voluntary agreement. 0.6 million tonnes below and 0.3 million tonnes above the levels of 2003. The 10 Year Plan Q440 Clive EVord: Your forecasters are sayingthat predicted a reduction of 5.6 million tonnes—that is we are on target? There are not any problems in road and rail combined—by 2010 compared with terms of meetingour targetsto reduce CO 2 2002, 4 million tonnes of which was to be from emissions in surface transport? voluntary agreements with car manufacturers. If Jacqui Smith: That was not quite what I said. What those figures are even generally correct, they are I said was the work that had been done on the quite startling, are they not, in terms of missing the projections would suggest that, unless we took the targets that we set in the 10 Year Plan for sort of action that we are puttingin place, there Transport? would be an increase in CO2 emissions by 2010. Jacqui Smith: I have to confess to not followingall That is, of course, why we are doingthe Powering of the detail of that. Future Vehicles strategy, why we are supporting the EU voluntary agreement, and why we are, in Q445 Mr Stevenson: These figures, if I may help the widest sense, implementingthe 10 Year Plan for you, are contained in the Government’s response to Transport. our Committee’s report headed “Jam Tomorrow”, 9689391001 Page Type [O] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie which was published in June 2003, so they are of pushingand developingthe i ndustry in the UK actual government figures. If they are anywhere and our ability to contribute and to get UK benefit near correct, that is not a slight increase; that is a out of it. massive miss of the target is it not? Jacqui Smith: I do not know, is the answer to that Q449 Clive EVord: In order to attain the question. environmental benefits, do you feel that the Government should be more robust and should be pressingmore? One of the examples that we have Q446 Mr Stevenson: Let us go further on then, been given in the past about improving emissions because national forecasts at June 2003 predict that from vehicles has been catalytic converters, where carbon emissions from terrestrial transport in 2010 legislation has led and therefore the market has will be in the range of 0.6 million tonnes below, followed. Do you think the Government could do 0.3 million tonnes above, which I have already more in that field in order to create a bigger quoted. But again, you see, if we take the scenario marketplace for alternatively fuelled vehicles? overall, it indicates that the best case revised Jacqui Smith: You might expect me to say this but forecast will produce an additional 1 million tonnes I think we have the balance right between by 2010 and the worst case forecast will produce regulation, the impact that the voluntary agreement an extra 1.2 million tonnes of carbon by 2010. The is having, the fiscal framework that has been put worst case forecast is therefore 7.3 million tonnes in place, and the contribution that better consumer of carbon dioxide more in 2010 than was projected information can make. I think it is probably about in the 10 Year Plan—government figures. I am makingsure that all of those are in place, together simply tryingto press you, Minister, on just how with the investment in the development of the new correct your assertion is that we are on track to technology, the investment in the development of meet our targets. These figures suggest we are new forms of fuels. I do not think there is one V wildly o . simple magic bullet that is going to solve the Jacqui Smith: To go back, what I said was that we problem. were on track to meet our overall targets. I said that the current forecasts suggested that, actually, Q450 Clive EVord: Investment from where? Where without the action beingtaken throughboth the 10 is this investment comingfrom? Year Plan for Transport and the voluntary Jacqui Smith: Some of the investment I was talking agreement and the Powering Future Vehicles about earlier in terms of new and renewable fuels, strategy, there would potentially be an increase in in terms of the Foresight Vehicle programme. CO2 emissions between now and 2010, which reinforces the need for the action beingtaken. Q451 Clive EVord: Is this private sector innovation or is this money that is provided by Government Q447 Mr Stevenson: Finally, for clarification for or both? my benefit, and I hope for the benefit of the Jacqui Smith: It is both, because, for example, I Committee, you do not disagree with the figures at think I am right in saying that half of the R&D of this stage, but you are asserting that actions now European car manufacturers, for example, is beingtaken and to be taken between now and 2010 focused on CO2 reduction, and I would suggest that will put the Government back on track? probably a significant reason for that is because Jacqui Smith: That is my assertion, yes. they recognise the necessity to fulfil the requirements in the voluntary agreement. V Q448 Clive E ord: You have mentioned the Q452 Clive EVord: The reason I ask that is I PoweringFuture Vehicles strategy.Do you think wonder how much you are listeningto people who Y that the targets in that strategy are su cient to are in that field as to whether they are satisfied that drive the alternative vehicle market, if I can put it the targets that are in the Powering Future Vehicles that way? plan are actually drivinginnovation and Jacqui Smith: The specific target in the Powering encouraging people to innovate and introduce new Future Vehicles strategy in relation to the 10% of technologies into the market. new cars beingintroduced with emissions below Jacqui Smith: The whole point of the Low Carbon 120gor 100gper kilometre I think is an important Vehicle Partnership is to ensure that we are complementary target to the action that is being listeningto the advice that is put forward, for taken through the voluntary agreement. Whereas example, in relation to the future development of what the voluntary agreement should achieve by targets, that we are listening to the concerns of 2008 is a general progress across the whole range industry and the fuel producers and of academia, to reduce emissions, what the PoweringFuture and not just listeningto them, but actually Vehicles target adds to that from a domestic point engaging them in the activity that is going to be of view is a push at UK level to really begin to necessary, because government cannot deliver this develop that cutting-edge technology that is going on their own; unless there is also action from to take us even further than where the voluntary industry, from fuel manufacturers, in terms of agreement would take us. That is important academic research, we will not be able to achieve environmentally, but it is also important in terms the targets or to get where we want to get to, and 9689391001 Page Type [E] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie in the longer term, unless there is also international the eYciency gains and cost reductions might be for cooperation, we will not be able to get to where we them through taking those particular decisions want to get to. now.

Q453 Ian Lucas: In the United States both Q458 Mr Stevenson: Could I ask an additional President Bush and Governor Schwarzenegger in question? It may be an obvious one. Does the California have talked a great deal about hydrogen Government monitor in any detail what is actually highways and have promoted fuel cell technology happeningin countries like the United States and as a major contributor to dealingwith greenhouse Japan with fuel cell technology development? gas emissions. Do you think the Government here Jacqui Smith: We do more than monitor; we are in has given this issue suYcient political priority? international partnerships that involve the US. We Jacqui Smith: Yes, I believe that we have. One of are workingwith Japan on developingwork the things that we have done is to focus on the around fuel cell and alternative fuel developments. whole range of areas where we need to make The DTI and DfT between us, for example, hosted progress, not just in terms of fuel infrastructure. I a conference with the Japanese last December suspect that in the United States there may well be precisely to look at the sort of activity that was not just environmental but other drivers driving happeningboth in Japan and in the UK and, more that particular debate. importantly, to look at how we can make sure that we are going to be at the forefront of being able to benefit from expansion of Japanese companies’ Q454 Ian Lucas: Have we, for example, promoted development of hybrid production, for example, in the idea of hydrogen highways within the UK? the UK, all of that type of thing. Jacqui Smith: I am not aware of whether or not we have promoted that, but clearly, what we have Q459 Mr Stevenson: The reason I ask is because done is to promote a range of research into what some of the statements you have made do not the implications will be both for the production and necessarily square with the information we the distribution of hydrogen, not least, for example, received, for example, from General Motors. We through the hydrogen and biofuels assessment spoke to one of their vice presidents in charge of which is currently beingcarried out, which we are fuel cell technology, and she was quite adamant due to publish later this year, which looks at that they intend to be producingvehicles by 2010; precisely some of the implications of both the they certainly are not lookingat 2020, and they are production and the distribution of hydrogen in quite determined to do this. We have companies the future. that you will be aware of in the UK—Johnson Matthey, for example—who are workingvery hard Q455 Ian Lucas: Is it not the case that, in order to on this modern fuel cell technology, and there is a have a viable hydrogen highway in the future, we real danger that we could be left behind in terms need to be promotingthat idea now to getthe of the advantages both for manufacturing and consumer to understand that it is likely that, economic and environmental point of view if we are certainly within the next decade, these cars are not up to speed in terms of a country with this going to be brought to the market? Do we not need development in this technology. to be planningfor that now? Jacqui Smith: I quite agree with you. I have met Jacqui Smith: That is precisely what we are doing that vice president myself. That is why, for through the Powering Future Vehicles strategy. example, I was talkingabout the reasons for us supportinghybrid technology.I think there are some quite strongargumentsthat hybrid Q456 Ian Lucas: But the consumer in the UK is not technology helps you along the way to get into fuel aware of the onset of hydrogen fuel cell cars. cell technology. Jacqui Smith: No, they probably are not. Q460 Chairman: Was that a view that was given to Q457 Ian Lucas: They are in the United States you in America? because the President is talkingabout it. Jacqui Smith: I have not been to America, Jacqui Smith: Yes, but they could not go out and Chairman. buy a hydrogen fuel cell car today. They probably cannot go out and buy one for at least another 10 Q461 Chairman: But you have been talkingto years. I think consumer information is important, General Motors. Is that their view? That is not but where we should probably be focusingour what they have said to us. eVorts in relation to consumer information is on Jacqui Smith: As I have seen from lookingat the what is likely to make an impact in the short and evidence that you have received, there is a medium term with respect to consumers, and that diVerence of view in various diVerent parts of the is alternative fuels that are available now, the industry, and one of the important things about the availability of hybrids, for example, and what the way in which we develop our support is that we do benefits of those may well be, both in terms of not actually put all our eggs in one basket, but that encouraging consumers to be environmentally we look at developingthe sort of structures that aware and also pointingout to them what some of will get us to the outcomes th at we want without 9689391001 Page Type [O] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie necessarily sayingthere is only one route to get we overcome the di Yculties caused by stoppingthe there. Some would argue that hybrid technology is grants at the point at which they have been the best way to get there; some would argue that stopped. investment in more highly developed diesel engines is the way to get there. What I think is important Q464 Mr Stringer: Did I understand you to say is that there is support available for all of that that what was drivinggovernmentpolicy in this innovation that is going on but focused on what area was eVectively what was comingout of the we want the outcomes to be, which is eVective and exhaust pipes of cars? eYcient low carbon vehicles in the future. Jacqui Smith: I do not think that is what I said.

Q462 Mr Stevenson: No, not at all. You see, the Q465 Mr Stringer: You did not use those words but vice president we spoke to—a very impressive you talked about targets in terms of pollution, person, I thought—was in no doubt that General carbon dioxide and so on. I think what I am saying Motors see fuel cell technology for motor vehicles is another way of puttingthat. as the revolution of the 21st century. It is not just Jacqui Smith: Yes. Yes, we have a target in the a peripheral development that will help the PoweringFuture Vehicles strategy,a domestic environment; they see this as a sea change, and the target, that is about getting to 10% of cars with potential both in terms of jobs and the economy lower CO2 emissions than the voluntary agreement and the environment is enormous. Clearly, we want would get us to, but I think what is driving to be satisfied, as far as we can be, that UK plc, government policy, from my point of view, is a with the Government at the heart of this, is up to range of concerns: firstly, clearly the environmental speed in makingsure that we benefit from these commitments that we have made in terms of the technologies. It is not entirely clear from what you CO2 reduction, but we also have a concern about have said at the moment that we are doingthat. how we make sure that we are supportingUK Jacqui Smith: I do not disagree with you that fuel industry and the UK automotive industry and the cell technology in terms of the future is a very supply chain into that to take advantage of important place to get to. My argument was, developments in technology, and also how we are should we now be focusingall our attention on supportingthose developments in car something which the majority of industry suggests, manufacturingtechnologyin the first place. notwithstandingwhat GM’s view is, will need both significant development of the sources of energy for Q466 Mr Stringer: I was hopingyou would say the fuel cells and will need significant technical that, because in some ways that is a more development of the vehicles, or should we also, important aspect of government policy than alongside making sure we are moving towards that, pollution, although that is clearly important. What also be supportingother ways of reducingcarbon I am not clear on from what you have been saying in the short to medium term as well? is how you are makingyour choices between those diVerent areas of technology for the best interests Q463 Mr Stevenson: On the other technologies, we of British industry. took evidence recently from a large vehicle leasing Jacqui Smith: Most of the fundingfor the company that the decision of the Energy Saving development of vehicle technology up until now Trust to stop any further grants this year for has come through the Foresight Vehicle conversions, because they had run out of money, programme, and the way in which the objectives of and to reduce by between 20 and 40% their that, the priorities of that, have been determined is availability of grants for future years, is eVectively through the Foresight Vehicle network, which going to decimate the progress that has been made brings together government, academics, industry, on conversion of vehicles to alternative fuels. The to actually determine where the most favourable other thingthat the EnergySavingTrust have said areas for research are. T hree out of five of the is that their view is that the progress that has been objectives that they have set down for the £100 made since 1995 now has a momentum that will see million worth of projects that they are funding that progress continue. First, do you have any relate to the general areas of concern to this concern about the reductions that the Energy inquiry. We are now developingon from that, as SavingTrust is implementing,and secondly, do you far as the DTI support is concerned, into the accept that the momentum since 1995 will carry us Technology Strategy, which has come out of the through? Innovation Review, which is a way of drawing Jacqui Smith: There has certainly been momentum, together the support that we oVer for collaborative because 8,000 grants given this year compared to R&D in particular, for transferringknowledge 5,000 grants last year, as I understand it, is a sign from its pure state to beingable to commercialise of momentum. I am sure that David Jameson will it. Although we have not made final decisions be very keen to engage with this particular about what the priorities for the first calls on question. My understandingof the current question support from that Technology Strategy will be, I is that there is a consultation going on with think it is highly likely that a significant number of stakeholders about what is the best way of making those will relate to some of the technologies here, sure that we keep the benefits that have come from like how we develop low carbon fuels, what we the power shift programme in the future and how need to do with the materials that we are producing 9689391001 Page Type [E] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie cars with, and some of the other technical and Q470 Mr Stringer: If you as a Government do not technological issues. That is the way forward for know how to judge how far ahead other countries supportingthe car industry side of the equation. are in this, how can you th en make a decision to invest in or support research which may or may not be productive? If the objective—which you have Q467 Mr Stringer: That is process that you are not actually said—is to ensure that we have describing. That it is useful for the Committee. advanced technology and are the centre of Jacqui Smith: It is quite a lot of money as well. whatever new industry may support cars in the future, if you do not have a view of where our Q468 Mr Stringer: It is process and money. What competitors are, how can you be sure you are not I am tryingto getat is, when you are havingthose wastingmoney? If they have already done the work discussions, how does the Government decide, not and they are ahead of us, we have perhaps lost to put all its eggs in one basket, to quote from that race. before, but how does it decide to go this way or Jacqui Smith: It seems to me that there are two that way? What are its objectives beyond pollution arguments there. I do not think taking a UK-only control? Let me help you. Have you made any approach is going to be the answer here. There will estimates of how many jobs would be created if the need to be international collaboration. For UK became a world centre of excellence for the example, it is clear that Japan is well advanced in manufacturingof fuel cells? relation to hybrid production and other areas, Jacqui Smith: No, I do not believe we have made which is why we have chosen to concentrate on estimates of jobs. We could argue that the 250,000 relationships with Japan in the way I was jobs that are currently in the vehicle manufacturing describingearlier. It is also why we are working and supply chain area in the UK may well be with the US in relation to particular hydrogen importantly safeguarded by us becoming a centre developments. I do not think we are going to of excellence in those areas, and it is partly because succeed if we look at ourselves in isolation. We of that, of course—and I did touch on this earlier— need to make international links, and we are doing that one of the recommendations out of the that, and we also need to look, as I suggested Innovation Growth team that we brought together earlier, at where our particular strengths are in the to look at the automotive industry was that we UK and how we can invest in the research that is should develop in the UK a centre of excellence for going to support that capacity. low carbon and alternative fuels. That is less about money and more about how we make sure in the Q471 Mr Stringer: I accept that this is a big, UK that we are bringing together the expertise worldwide industry and we have to act as necessary to make sure that our industry benefits cooperatively as we can, but we are still competing from those improvements in technology. to keep the jobs and investment in this country, and if we do not know the state of our competitors, we may well make the wrongdecision. I am quite Q469 Mr Stringer: So you do not know the jobs worried about the answers in terms of the we are after and the potential for the economy. Do information about where we are with respect to our you know—this question has been asked in a competitive industries. slightly diVerent way—how far behind the United Jacqui Smith: I think we do know. States or Japan or anywhere else in the world we are? Jacqui Smith: To be frank, it depends on the areas Q472 Chairman: Could we perhaps ask Mr of the industry you are lookingat, and di Verent Roberts. Did you say you were policy, Mr Roberts? countries, it seems to me, have diVerent expertise. Mr Roberts: Automotive technology and We have a particular expertise in the UK in innovation. Mr Corrie is on our policy team. powertrain development, which we may well need to develop to take on some of the concerns of the Q473 Chairman: While we have you here, could new technologies. Our automotive industry has a you tell us your view of how far ahead Japan is, larger number of vehicle manufacturers than most taking the line of going straight for hydrogen? of our competitors. We also have a particular Mr Roberts: The conversations we have had with expertise in design engineering and that is why that the Japanese are that they have a domestic target has been the focus of some of the spendingthat has of somethinglike 50,000 fuel cell vehicles in the gone into research. Would I like to put us in a market by the end of the decade, and privately they league table alongside other economies? No, largely say they do not think they can do it. While they because I do not think it is possible to do, because can produce one fuel cell car, at vast expense and diVerent economies have diVerent strengths, and many mechanics runningafter it to keep it on the what is important from the UK Government point road, there are real problems with volume of view is that we identify those strengths and, as manufacture. There have been many false dawns I said earlier, that we identify the sort of businesses and the views that we get are that there is a whole that may well be able to benefit from the spectrum of dates when introduction of hydrogen opportunities and make sure that they are getting fuel cell vehicles may occur, but there are still the information necessary to enable them to benefit considerable technological challenges to be met, from those opportunities. both on board the vehicle in terms of the 9689391001 Page Type [O] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie technology to make the fuel cell work, to integrate planning time frame over which the industry will it into the vehicle, the wiringand plumbingthat be developing. If you look at the energy side, we surrounds that, as well as the infrastructure issues obviously have longer term objectives in terms of of the supply of hydrogen. It is a considerable task, our energy policy which enable there to be longer which is beingaddressed internationally because it term planning. If we a re going back to the is a global industry and we must compete globally, renewables work, the Renewables Obligation over and the national response to that is about a 10-year period gives a planning framework for establishingUK critical mass throughall the the energy sector, and in terms of the voluntary diVerent activities we have. But there is no doubt, agreement, the fact that that was a 10-year I think, that we have some world-class elements voluntary agreement gave a period of time over within the UK which will be takingpart. You have which the vehicle manufact urers could plan the sort mentioned Johnson Matthey already as a UK of innovations and improvements in technology company. There are others as well. In some areas that were necessary to meet that. we are behind. One of our roles at the centre of excellence in this area is lookingat a benchmark Q477 Clive EVord: Acceptingthat we are goingto and also lookingat where we have scientific have fuel cell technology either through hybrids or excellence so that we can wrap that knowledge up hydrogen fuel cells, when will there be a surplus in into new product, but only in areas where it is V our energy production in order to serve the e ective to do so, because again, there is very little transport sector? point in tryingto catch up in an area where we will Jacqui Smith: I do not know, is the answer to that. not be able to do it, but we need to keep technology That is one of the reasons why we are carryingout options open as best we can, and we need to the hydrogen and biofuels assessment, precisely to develop the nascent supply chains in this area to look at the type of energy scenarios depending on make sure that we can compete when the products diVerent assumptions about the growth et cetera. do turn up in volume. Manufacturingvolume is That is work that is currently under way and that another key part. It is not just about havingthe will be published. You are right to focus on the R&D capability but the manufacturingcapability surplus, because if you are lookingat the as well, and there are many interactions taking environmental arguments in terms of your energy place in a global forum, and we are privy to those production, usingyour renewables for transport discussions and part of those discussions and it is may not be the best environmental or energy use important that we continue to be so. of those; it may be better to use those in electricity generation first of all, as being the most eVective Q474 Mr Stringer: Johnson Matthey, of course, and eYcient way of usingthem. told this Committee that government support for what they are doingis a longway behind V Germany’s, Japan’s, the United States’ and Q478 Clive E ord: Is there anyone who might have Canada’s. I just point that out. I will finish on two an idea of when we will be in that position? questions. You say you are not puttingall your Jacqui Smith: I do not think there is, no eggs in one basket. Do you think there will come Ms Northmore: We have two renewable energy a time when the Government sees the advantages electricity generation targets. One is for 10% by of putting all their eggs in one basket and trying to 2010 and 20% by 2020. The emphasis at the steal a lead, either by settingup a plant or a moment is very much on buildingthe capacity to hydrogen network, or are we going to follow in meet the 2010 target, which is what all the wind this area? generation is geared towards. I think it is not Jacqui Smith: I do not think it is either. I think that possible at the moment to say when there will be is a false choice. The reason why you do not put a surplus though, because of the nature of wind all your eggs in one basket is because if you do that, energy, which is intermittent. The wind sometimes you will limit the innovation that is going to be blows harder than you need to generate and so happeningboth in your economy and the global there is perhaps a need to store energy, and it is economy as well. That is the way that you lead, possible to use hydrogen as a storage mechanism. not follow. But this is a longway down the road, and there is all sorts of research that needs to be done. Q475 Mr Stringer: Finally, why is three years the right length of time to give fiscal incentives to Q479 Clive EVord: Is it possible to use surplus alternative fuels? Is it longenough? capacity at a time when there is low demand and Jacqui Smith: I suspect that is somethingyou store it in the form of hydrogen, for instance? would need to put to the Treasury. Ms Northmore: These are all things that will need to be looked at, yes. Q476 Mr Stringer: They will not answer the question. You might be able to give us an answer Q480 Clive EVord: Will it create problems for in terms of the impact on the industry. greening our transport system if we do not have Jacqui Smith: I think three years is an important renewable sources of energy to power it? If we are improvement and length of time to enable there to going down the road of fuel cell technology, that be a bit more certainty, but it is not the only is going to require energy. If we are not going to 9689391001 Page Type [E] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie be able to provide a renewable energy source for Q484 Chairman: Are there any incentives at all for that, that causes enormous problems for our the energy industry? The fuel companies told us targets. that they were confident there will be enough oil Jacqui Smith: Which is why we have set ourselves reserve for many decades to come. the targets which Ms Northmore was talking about Jacqui Smith: It does not necessarily follow that in terms of increasingthe contribution of there will only be a shift of fuels when oil runs out. renewables. The point I was makingbefore was that if you have to make a decision about an extra unit of renewable energy and whether or not, for Q485 Chairman: Are you giving them any environmental reasons, that would be most incentives to provide renewable hydrogen rather eVectively allocated to electricity generation or than hydrogen from non-renewable sources? You whether it would be most eVectively allocated to have mentioned that. transport, there are environmental arguments as to Jacqui Smith: The incentive is that when the why you would be better to allocate that to vehicles exist, there will be an incentive to produce electricity generation. The way in which you the hydrogen, and one of the reasons, to come back phrased your question in terms of when we would partly to the previous question, why it makes sense be in surplus is important, because there are to develop hybrids and fuel cells even that do not arguments that you should focus first on electricity use renewable hydrogen is that provides the generation rather than transport. incentive to develop. As there are more cars produced that need hydrogen and more people begin to buy them, that gives the incentive to Q481 Clive EVord: I am not beingunfair—my develop the hydrogen industry. colleagues might disagree—but I am slightly shocked at the Government’s relaxed approach. We seem to be on the brink of new technology Q486 Chairman: I see. We are going round in a cominginto the motor industry in particular, and circle but we do not see a way out. Have you certainly in road transport fleets, where there is thought of a particular centre of excellence in the going to be a demand for energy, either in fuel cells field of vehicle technology, and where would it be? or hydrogen cells. That is fast approaching, and if You have talked about the idea several times. we are not in a position to address that, the Where would it be? In the West Midlands? environmental benefits certainly will not be Jacqui Smith: Much as I would like it to be in the enjoyed. West Midlands, Chairman, that is one of the Jacqui Smith: I am sorry if I have looked relaxed. decisions that is currently beingmade i n the I can assure you I am not. That is precisely why business planningprocess that I referred to earlier, the targets that we set down in the Energy White and we would expect to see those decisions by the Paper for increasingthe proportion of renewables end of March and the implementation of the first in our energy are so important, and we are year’s programme by the end of May. investingsignificantamounts of money—record amounts of money, for example, into wind farm development—in order to ensure that we are Q487 Mr Stringer: What criteria will you use? precisely developingthe energyto enable us to have Jacqui Smith: We have asked the Low Carbon that surplus that it makes sense to focus on Vehicle Partnership R&D group, which brings transport. together car manufacturers, fuel manufacturers and academics, to determine the business case and what sort of criteria should determine that. Q482 Chairman: Minister, we have stretched you a great deal this afternoon, so perhaps some of the other witnesses would like to give me some Q488 Chairman: The business case is very simple. answers. Has anybody in the Department been You do not need a business case written down. At approached at any point about platinum, about the the moment, our industry here, with many eVect of the cost of platinum? Has this been hundreds of thousands of jobs, is entirely discussed with you at any point? dependent on foreign manufacturers, and although Mr Roberts: No. you talk glibly—forgive me; you talk with some Ms Northmore: No. facility—about the fact that we are operatingin a global market, it is very clear that that very question means that, if we are not capable of Q483 Chairman: Can you tell me whether you are keeping up with either hydrogen technology or with makingprogressin overcomingthe problems of mixed fuels technology, those jobs will go storage and distribution of hydrogen? elsewhere. Jacqui Smith: That is one of the areas that is being Jacqui Smith: Which is precisely why we will be considered in the biofuel and hydrogen assessment, investing£7.5 million in developingthis. and I think there will be a range of diVerent options—central distribution and storage or regional production, storage and use. Have we Q489 Chairman: You are hardly likely to have a solved all the problems? No. Are we workingon problem in makinga business case for a centre of it? Yes. excellence when you have just spelt out in the last 9689391001 Page Type [O] 11-07-05 22:01:59 Pag Table: COENEW PPSysB Unit: PAG1

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3 March 2004 Rt Hon Jacqui Smith MP, Mr Ashley Roberts, Mr Robert Saunders, Ms Bronwen Northmore and Mr Duncan Corrie two hours why we need to do this. I ask you the Q490 Chairman: You do not know the criteria question that was beingput again.What criteria? upon which you will be takingthis decision in May? Where would it be? What eVort is beingmade to Jacqui Smith: No. Actually, I do not think the most move towards that? What sums of money are being important decision is where it is going to be. I think committed by your Department to research the most important decision is what it is going to projects of this kind? When can we hope for some do, and that is what the work is currently kind of clear lead from the Department about focusingon. where you expect this technology to go? Chairman: Thank you very much indeed. I think Jacqui Smith: The amount of money is £7.5 million. that is probably enough for this afternoon. Thank When you can expect to know about it is in May. you very much for coming. 969945PAG1 Page Type [SE] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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Wednesday 10 March 2004

Members present:

Mrs Gwyneth Dunwoody, in the Chair

Mr Brian H Donohoe Mr Paul Marsden Clive EVord Mr John Randall Mrs Louise Ellman Mr George Stevenson Ian Lucas Mr Graham Stringer Miss Anne McIntosh

Witnesses: Mr Phillip Sellwood, Chief Executive, and Mr Richard Tarboton, Head of Business Unit TransportEnergy, Energy Saving Trust; Mr Graham Smith, Chairman, Mr John Wood, Vice Chairman, and Mr Robert Evans, Chairman, SteeringGroup, Low Carbon Vehicle Partnership, examined.

Chairman: Good afternoon, gentlemen. You are Mr Smith: No, thank you. most formally welcome. We have one little bit of housekeepingto perform before we start to talk to you; Members havingan interest to declare. Mr Q493 No? That is very brave of you. Tell us; how do Lucas? we get consumers to put greater emphasis on the Ian Lucas: Member, Amicus. environment when they are buyingcars? V Miss McIntosh: I have interests in RAC, Shell and Mr Smith: I will lead o with a comment on that Y BP. subject. The answer is with some di culty. Mr Marsden: None. Consumers are driven by considerations that are Clive EVord: Member of the Transport and General many and various. The environment is certainly one Workers Union. of them but other considerations, the equipment of Chairman: Gwyneth Dunwoody, as left. Mr the vehicle, its performance, its stylingand a number Donohoe? of other considerations, obviously play heavy in Mr Donohoe: Member of the Transport and General their minds. However, economy considerations Workers Union. generally are extremely important, as are fuel costs Mr Stringer: Director of the Centre of Local and the economy of vehicles. Clearly that is one of Economy Strategies and a member of Amicus. the areas that we are addressing. However, it is the Mrs Ellman: Transport and General Workers role of the Low Carbon Vehicle Partnership, Union. amongst others, to find ways to influence consumer Mr Stevenson: Transport and General Workers. choice and, without doubt, information is going to be important in that area. We need to consider which Q491 Chairman: Thank you very much, gentlemen. sectors of the market we could mostly easily impact There are a few game rules in these particular rooms. and influence. We are particularly focused in The rooms are diYcult and I am afraid I am going relation to the fleet market where we think economy to have to ask you to speak up. If you agree with one considerations can weigh particularly heavily on another, I would be inordinately grateful if you consumer choice and where outcomes can be would not repeat what somebody else has said. If changed as a consequence of both education and, you wish to catch my eye, I shall be very happy to call inevitably, some fiscal stimulus as well, as we have you. May I begin by asking you to identify seen through the company car tax regime. yourselves, startingon my left, which is your right? Mr Evans: I am Robert Evans. I am the Chair of the Q494 Chairman: Do you want to tell us about the SteeringGroup of the Low Carbon Vehicle Green LabellingScheme? V Partnership and I am also the Public A airs Mr Smith: We have a labellingscheme in place Manager at Johnson Matthey. currently. All vehicles on sale in the UK come Mr Wood: John Wood. I am Vice-Chairman of the equipped in the showroom with a label. The label, Low Carbon Vehicle Partnership and I am however, provides limited information, fuel Managing Director of MIRA Ltd, formerly the economy information. Motor Industry Research Association. Mr Smith: I am Graham Smith, the Chairman of the Low Carbon Vehicle Partnership and Managing Q495 Chairman: Where is it displayed on the Director of Toyota GB. vehicle? Is it displayed prominently? Mr Tarboton: Richard Tarboton. I am Head of Mr Smith: It is supposed to be displayed both TransportEnergy, part of the Energy Saving Trust. prominently and uniformly in relation to the Mr Sellwood: I am Phillip Sellwood, the Chief windscreen. It is an A4 sized label. It is laid out with Executive of the Energy Saving Trust. fuel economy information and also the CO2 reading. The problem is that the CO2 figure outside of the Q492 Chairman: Thank you very much indeed. Did company car market is not somethingwhich is either of the groups want to say something to us widely understood or appreciated and certainly is before we begin? not yet guiding consumer behaviour. 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr Phillip Sellwood, Mr Richard Tarboton, Mr Graham Smith, Mr John Wood and Mr Robert Evans

Q496 Chairman: Have you ever done any research Q500 Clive EVord: Hybrid vehicles, I do not think on whether or not people actually leave the notices you made any mention of those. there? Mr Sellwood: Could I mention those on the basis Mr Smith: Research has been undertaken. The that Mr Smith might feel there is a bit of a conflict Department for Transport undertook some research of interest? Certainly from the Trust’s perspective we through MORI to better understand the impact of see that hybrids really perform the bridge between labels and to look at alternatives. The outcome of where we are today and where we may be beyond that research was that a label that moved more 2020 in terms of hydrogen. We certainly see the towards visual representation rather than numeric petrol electric vehicles that are startingto emergeon representation, somethinga lot closer to the colour the market as fundamentally important in the next coded system that we have on white goods, for decade or 15 years. instance, without doubt would be more eVective and it is somethingthat the Low Carbon Vehicle V Partnership would like to see brought forward. Q501 Clive E ord: What fuels do you envisage However, this falls within initiatives that are replacingthe traditional petrol and diesel? currently beingprogressedat the European level and Mr Sellwood: Just to give it some sort of perspective, we would prefer that the outcome in the UK be I do not think anythingis goingto replace petrol in V within that framework in order that we address this the short term. LPG, despite our best e orts and issue once and once only. many others, still only represents less than a °%of the vehicle fleet. It is going to be a menu of options that looks to assist in replacingpetrol, but I do not Q497 Chairman: Whatever that framework is, how think anythingis goingtoreplace petrol in the very longwill it take to— near term. Mr Smith: I cannot answer for the European Commission, but I understand— Q502 Clive EVord: This is to both of you; how are your research and fundingagendasmakingthe Q498 Chairman: No, I would never suggest anybody changes happen? answers for the European Commission. Mr Smith: Startingfrom the Low Carbon Vehicle Mr Smith: I understand that within the next two Partnership point of view, one of the areas of our years or less a determination on this matter will have activity is research and development and the extent been reached. to which we can further harness the available resource in the UK to create a centre for low carbon V technology and fuel cell technology. We see this as Q499 Clive E ord: What fuels do you think will an important aspect of the work we are undertaking. emerge as strong competitors instead of traditional We are at an early stage with that. We are at the petrol and diesel for the short to medium term? feasibility study stage at this point, but it is intended Mr Smith: Given the established vehicles running that a centre be established in the UK that would around in the country today that are equipped to run both physically and in terms of drawingtogetherthe Y largely on petrol or diesel, it is di cult to see that resources in the country leverage the technologies that reality is going to change fundamentally going that we have available, the research excellence that forward. However, there are opportunities for a exists in the UK, to ensure that the UK plays its full number of other fuels which are attractive from an part in the development of the new technologies for environmental point of view. Gas, LPG clearly has the future, particularly fuel cell. made in-roads and that has been facilitated, in the Mr Sellwood: In terms of things that are actually past at least, through advantageous duty treatment. happeningtoday, the Trust supports two schemes CNG for certain commercial vehicles as well has primarily. One called the New Vehicle Technology made progress and we are beginning to see the Fund, which invests in future technologies. That is a emergence, again at the European level, of initiatives £4 million annual fund. Secondly, since 1996 we to further promote the inclusion of biomass based have run a series of programmes collectively under fuels within the fuellinginfrastructure in the UK. the title PowerShift which this year will be about a That would be very much as a blend. The fuel quality £7 million programme which are direct grant giving regulations permit percentages up to 5% and those programmes to assist both individual motorists and regulations are important from the durability of fleets to convert to new engine/fuel technology. engines and the warranty side of things, but it is certainly possible to see, again with appropriate stimulus, biomass makinga further contribution in Q503 Clive EVord: What about the infrastructure? the longer term. There is a lot of debate about what What is beingdone to move the infrastructure that quite means. Hydrogen fuelling, hopefully from forward so that people can even consider takingon renewable sources, will undoubtedly emerge. There these new types of— are many prototype vehicles in operation around the Mr Sellwood: The main two that are going forward world from many manufacturers. It is clearly part of at the moment; LPG currently has 1,300 stations up the transport future but there is debate about the and down the country and they basically have been commercialisation. Hydrogen will emerge probably put in by business, not by Government or indeed by beyond 2020. Government assistance. However, on CNG, which 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr Phillip Sellwood, Mr Richard Tarboton, Mr Graham Smith, Mr John Wood and Mr Robert Evans is a very, very significant investment, the Trust does produce hydrogen locally for supply to local fuel provide grants up to £100,000 to invest in stations, perhaps even by reformingnatural gasfor infrastructure for bunkeringof CNG. 1 generation on demand, or whether they would Mr Smith: If I could just add, without a further distribute hydrogen through a dedicated hydrogen discourse on the structure of the Low Carbon infrastructure. These are all open questions that are Vehicle Partnership, its workinggroupstructure beinglooked at. For example, the Fuels Group Low includes a fuels workinggroup.We have experts Carbon Vehicle Partnershi p will be lookingat these from across the fuel industry, from the academic issues in greater detail to see what are the best world and from the environmental NGO solutions for the UK. community lookingat precisely these issues. The first paper from that group addresses the Q508 Ian Lucas: Have we any plans to introduce a opportunities for biomass going forward and that prototype hydrogen highway in the UK? paper has recently been submitted. This is an area of Mr Evans: I believe that there are some interested in specific focus for the Partnership. doingthis. There are a number of regional development agencies that are looking particularly Q504Clive E Vord: Is it worth introducingfuel cell at settingup local hydrogensupply. London, vehicles without hydrogen generated from Teesside, Birmingham and Scotland have all renewable energy? expressed an interest. There is also then an interest Mr Evans: The answer is yes, it is. We want to get the to join those local nodes of hydrogen production, as benefits of fuel cell technology above zero emissions it were, to create the basis of a network, but at least at the tailpipe and then also fuel economy benefits. a corridor to begin with, which would allow vehicles We would like to have a hydrogen infrastructure to to be able to make practical use of that fuel. fuel those vehicles and indeed we need that hydrogen infrastructure. We have to take hydrogen where Q509 Chairman: It is rather interestingthat you hydrogen is available from, which ideally would be draw a line of divergence between what the industry from renewable means but in the first practical is prepared to do and what the RDAs are prepared application it may be from the formingof natural to do. In other words, Government and local gas. One has to be pragmatic. The market will government are interested in preparing some work dictate where these fuels become available from and for a network, but the industry itself is thinking Government can obviously have an influential role about it. in influencingthose beingfrom renewable forms. Mr Evans: No, they are very much workingtogether on this. The RDAs are supportingtheir local Q505 Clive EVord: Are you sayingthat you think industry. For example, in the Teesside area there is initially that it will not be from renewable sources large expertise in the processing of gas through to but as the industry grows that perhaps even the hydrogen and that industry that is then working demand for that will grow as well and eventually we with the RDA to see how it can make use of that will get to a point where it will be produced from expertise in this new and emerging area. renewables? Mr Evans: Yes, it will be from the mix dependingon Q510 Mrs Ellman: Mr Smith, you said at the location and other factors related to the ability of beginning that you thought that economic incentives suppliers to supply that fuel cost-eVectively for were the most powerful tools. Does vehicle excise those vehicles. duty, as it is presently constructed, act as an economic incentive for cleaner vehicles? Q506 Ian Lucas: Who is going to be providing the Mr Smith: Vehicle excise duty sends some very hydrogen infrastructure? important signals to consumers already. It has been Mr Evans: The energy companies; the fuel modified twice, I believe, and now encompasses a companies and oil companies are particularly number of bands with reduced rates for the most interested in this area and gas companies as well. environmentally eYcient vehicles. However, in Also companies involved in renewable energy terms of influencingfirst purchase, in other words supply can all see this as a potential outlet for their initial purchase from new, the scale of VED relative businesses. to the cost of acquiringa new vehicle remains relatively modest. Therefore, the extent of the Q507 Ian Lucas: So the oil companies are lookingat stimulus is more psychological than it is truly the creation of energy stations and selling hydrogen economic. Whether you could widen or increase at the same places as they sell petrol? bands, increase the fiscal burden, to the point that it Mr Evans: Yes. There is a situation where they are would further modify consumer behaviour is open lookingat usingthe existinginfrastructure or to question. You would very quickly reach the point whether there is a need to develop a new where you would have other unintended infrastructure. For example, whether they would consequences in terms of the financial burden on motorists. Inevitably those that were buyingvehicles 1 Note by witness: The Trust has in the past oVered grants of that were not new, in other words second hand cars, £100,000 to invest in CNG refuelling. In FY 04-05 EST will oVer grants for Natural Gas Refuelling Stations up to a cars whose potential environmental impact, being maximum of £70k per station, and up to a total limit of older, is somewhat higher, you are in danger of £350k. This represents a 30% reduction from 2003–04 levels. penalisingthat particular groupas well. This is 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr Phillip Sellwood, Mr Richard Tarboton, Mr Graham Smith, Mr John Wood and Mr Robert Evans somethingthat we very clearly need to keep under Q516 Chairman: That is a tactful answer, but it does review. There are probably opportunities in the not mean much, does it? future to further modify VED, but the extent to Mr Tarboton: It is very low. In terms of the general which VED alone can modify and change consumer public it is low and in terms of fleet operators, which behaviour I would question. is the market where we operate, the awareness isa lot higher. Q511 Mrs Ellman: The Energy Saving Trust has put forward some other suggestions about a higher Q517 Chairman: Is it somethingthat people would band? mention to you? Do you get a response from fleet Mr Sellwood: There are two things; one is the managers that say “We went for this particular research that has been done by MORI would suggest vehicle because of the impact it is havingon NO x and that a diVerential in the band of £150 would actually particulates”? persuade quite a number of consumers to switch to Mr Tarboton: Certainly, yes, that has increased. lower carbon vehicles, notwithstandingthe unintended consequences that may have and Q518 Chairman: It is an unusual gambit to a certainly we would have to think about the impact conversation, but is it . . . on the second hand car market. We certainly think Mr Tarboton: On the CleanUp programme that it is an instrument that we should be usingand particularly, which is a programme where we fit at the moment it is not very eVective.2 equipment for the reduction of particulate matter and we are fittingspecialist exhaust systems on to Q512 Mrs Ellman: Have you got any other large trucks, buses and public vehicles, those suggestions? equipment fittingprogrammeshave increased Mr Sellwood: Widen the band by £150. dramatically over the last few years. In fact, we have doubled them. Q513 Mrs Ellman: You think there is a problem about people understandingwhat is actually Q519 Chairman: From what to what? available and what the benefits are? Because the Mr Tarboton: In the past we have been funding—I MORI poll suggests that people do not understand. have got exact figures I can give you. Mr Sellwood: I think it would suggest that they are quite confused and the reason that they are Q520 Chairman: 17,000 was the overall figure. confused, it would seem, is that because there is no Mr Tarboton: That was for PowerShift. Last real diVerential it is very, very diYcult to understand financial year’s 2003–04 figure for CleanUp, for what point is tryingto be made from an example, was 3,200 vehicles. Those are mainly large environmental point of view with VED. heavy goods vehicles. Of that about a third of those Consequently, as has been said, people do not see it were buses and the bus companies and the large as a bigbuyingsignalin the same way, for instance, heavy goods vehicle companies are recognising the as the impact of company car tax has had on need to fit these new pieces of equipment to their changing people’s behaviour. vehicles to reduce what could be termed just soot, black particulate matter is a soot which is creating Q514Mrs Ellman: What about the operation of around 24,000 deaths a year, which has been a PowerShift and CleanUp grants? Is that eVective? figure that3— Mr Tarboton: Those two programmes are run under Chairman: Mr Tarboton, you do not have to TransportEnergy. The PowerShift programme has persuade those of us who have had the misfortune to been operatingsince 1996. It has funded, in total, be asked to lecture about somethingabout which we 17,000 vehicles since that date and these are vehicles know nothingand had to read it all up, but there are which produce low levels of emissions. It started oV a lot of people who are not in that position. as a programme mainly targeting air quality emission reductions and, while it does produce CO2 Q521 Mrs Ellman: Are you runningout of money on benefits, its benefits have been mainly aimed around both those programmes, both the grant schemes? particulates and around NOx pollution. Mr Tarboton: On both those programmes, yes, we are. We have seen duringthis year a tremendous Q515 Chairman: How wide is the understandingof increase in demand for these grants. Over the the general public of NOx and particulates? I had a 2003–04 year, which finishes at the end of March, grandchild who once said that the “Erms” were those programmes have both been fully subscribed, everywhere, you could not see them but they were so all grants have run out on those programmes for everywhere. What does the general public know the financial year. about NOx and particulates? Mr Tarboton: I think the general public awareness is 3 Note by witness: A 1998 report from the Committee on the Medical EVects of Air Pollutants concluded that in 1996 the much lower than we would hope it would be. deaths of between 12,000 and 24,000 vulnerable people may have been brought forward by short-term exposure to air 2 Note by witness: MORI research indicates that with a pollution, and that a further 14,000–24,000 hospital diVerential between bands of £150, 55% would change to a admissions may have been associated with short-term lower emission car to benefit from the saving(Assessingthe exposure to air pollution (Quantification of the eVects of air Impact of Graduated Vehicle Excise Duty—Quantitative pollution on health in the UK, Committee on the Medical Research, MORI, March 2004). EVects of Air Pollutants, January 1998 (COMEAP)). 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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Q522 Mrs Ellman: How much money have you used will find that broadly stakeholders, including in grants? How much is available? Government as one of those, are very happy with the Mr Tarboton: In total, the budget between the two way in which that has been managed. programmes has been £14 million for grants. Those have both been used— Q528 Mrs Ellman: Yes, but where does the money come from? Government might be happy if they Q523 Mrs Ellman: £14 million for both? have not had to give you any more money, but is this Mr Tarboton: Yes. The split between them is the right programme to do the job? predominantly more on the CleanUp programme, Mr Sellwood: No, I think the Government are happy which is around a £9 million budget, and the balance because we have taken the view that the way that we has been on the PowerShift programme. are usingthe money will actually enable us to deliver 30% more vehicles on the road. That is where I think they would be quite happy. Q524Mrs Ellman: Have you asked for more money? Mr Tarboton: We had a number of discussions duringthis year about that and there has been some Q529 Mrs Ellman: Do you think that is a reasonable increase in the fundingavailable. Next year the target and that you can be eVective? budgets will remain the same, but what we will be Mr Sellwood: I think if we are able to deliver 30% doingis reducingthe grantallocation per piece of more vehicles on the road this year we will be very equipment, or per vehicle, as these vehicles are now happy indeed, yes. becominghighervolume products, the costs per product are reducingand the need to reduce the barriers in the market are also reducing. So we are Q530 Mr Marsden: You say there is going to be an looking to reduce the grant you get for an average expansion but, for instance, the numbers of hybrid vehicle. You get about £1,000 per vehicle to buy a electric cars sold in 2001 were 568 and last year fell cleaner fuel vehicle and next year you will get £700 to 373. How do you think cuttingthe PowerShift per vehicle. So we will be able to increase the number grant will actually help increase the market? of vehicles by 33%. Mr Sellwood: Interestingly enough we have not actually cut all of the grants right across the piece. We have actually looked very closely at those Q525 Mrs Ellman: Are you going to oVer less grants technologies that are either very, very diYcult or because you do not have enough to deal with things not, as we would see it, near market. What we have as you did before, or is it because you are sayingit tried to do is to oVer a diVerential grant in that can do the same thing? regard. I think I am right in saying that the reduction Mr Sellwood: We are attemptingto use the same in the electric vehicle grant is less as a percentage. amount of money to fund 30% more vehicles. Mr Tarboton: Just to expand on that point, on hybrid sales we are lookingnext year for there to be at least 2,000 vehicles sold. We are in discussions Q526 Mrs Ellman: Will that have the same eVect? V with the key manufacturers of the hybrid vehicles in Mr Sellwood: It will have a greater e ect on the the UK, at a grant level of £700 per vehicle. market because those vehicles that we are funding are obviously now nearer the market. If you are asking“Is this enoughmoney?” in finite terms, I Q531 Mr Marsden: What has changed then? think probably what we would say is it is very, very Mr Tarboton: The vehicle has changed. There have diYcult to actually estimate just how much money been some new vehicle models which have come out you would need in order to stimulate and transform which Mr Smith will know more about than me. the whole market, but what we are lookingto do is From Toyota and from Honda t here have been two to give best value for money by reducing the grants new model vehicles which are a lot more attractive to because hitherto these grants have never been taken the average consumer. They have high performance, up in such numbers. That would suggest to us that meetingtheir requirements in terms of styling.So if the public are becomingsomewhat more educated those factors are really wh at are drivingthose towards low emission technology. technologies forward, the awareness of the hybrid technology is something which is not so new. It seemed to be reliable and just as easy to use as any Q527 Mrs Ellman: You say that you have had other car. So that is helpingto drive the volume. discussions. Have those discussions been with the Department? Have you been askingfor more money and been turned down? Q532 Miss McIntosh: Just a very short point; it Mr Sellwood: We have actually talked not just to the strikes me that you are paying£14 million for Department, but we have talked to the entire alternative fuel cars which are increasingvery stakeholder base, ie industry, fleet managers, fuel slowly. Diesel cars, of which I drive one, attract no companies, and we have taken an entire soundingof subsidy whatsoever and t heir sales are proceeding the market. We were given probably four or five apace, both in fleet cars and every other. Would it major options as to how we might move forward in not be better to spend less on subsidisingalternative terms of the grant regime. We issued our own fuels but educate the public more that the benefits of consultation. This is what we went with. 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Mr Sellwood: Firstly, I would contest that diesel has behind exactly these technologies for the future. It is not been subsidised over the years. It may not have a fundamentally important aspect of the competitive been subsidised by grant but I think most people situation within the automotive industry and, recognise that the incentives, as a result of company frankly, there is almost a scramble for establishinga car tax, plus a very favourable duty rate, actually platform for the future; engines, transmissions, etc assisted diesel growing in the marketplace and that are more able to deliver against the targets that certainly encouraged manufacturers to put models we will have to meet, whether they be imposed into the marketplace. So I would not necessarily through regulation or whether they are the accept that there has been no subsidy. It has been a consequence of exactly the move in consumer diVerent sort of subsidy. However, I would agree buyingpreferences that we are also hopingto bring with you that this is not an either or. This is not about. So I do not think there is any doubt and the about pickingone particular fuel or one particular fact that we have the programmes that have just technology because, as I think was said at the outset, been described to try to stimulate and facilitate the petrol still remains very, very dominant and I think early movement towards these technologies that is at this stage it would probably be a bit risky, to say supported by Government would indicate that there the least, to be backingone sort of technologyor one is an appreciation on the part of Government and sort of fuel over another. this is important.

Q533 Mr Donohoe: Can I ask just how serious we are Q535 Mr Donohoe: Are you getting the support at lookingat alternatives? Thirty years agoI did a from the oil industry that you would expect in these study and at that point we were talkingabout the circumstances or are they perhaps dragging their idea of utilisingwhat we had in terms of electric cars. feet? They indicated to us just last week that there are Then there were going to be steam cars. That was some 2 trillion barrels of conventional oil and some about 25 years ago. We have moved through a 4 trillion barrels of unconventional oil still unused. period and we are now talkingabout hydrogencars. Are they actually assistingyou? Is any of this anythingelse other than pie-in-the-sky Mr Smith: The fuel companies are fully committed and we really have to look at it realistically and look to the work of the partnership. Until recently we had at the strength that there is within the marketplace a senior colleague from BP on the board. He has both from the manufacturer and from that of the oil recently retired and been replaced by a senior manufacturer? colleague from Shell, on rotation. So the fuel Mr Smith: I think you have to look at this as a companies are engaged at the highest level within the continuum. The technologies that we deploy today Partnership. There is a fuel— in terms of gasoline, petrol and diesel are hugely improved compared with the time scales going into Q536 Chairman: There is a slight diVerence between the past that you have mentioned. So technology, turningup at a meetingand talkingabout it and even within the existingvehicle fleet, has moved on actually puttingsome m uscle behind it, is there not? enormously. There clearly is a role for alternative Mr Smith: There is, but the whole purpose of the technologies and fuels in the future. To the extent Partnership is to engage all the stakeholders and that you accept that oil resources are finite, there will actually get some momentum behind— come a point at which we will need to move into a diVerent fuellinginfrastructure. The issue is; what Q537 Mr Donohoe: Are you getting that? are the likely winners going to be? We have already Mr Smith: We are getting very, very good support heard some of the steps that are beingtaken to from across the stakeholder group. encourage take up, but also we need to be mindful of the rate at which we can encourage consumer Q538 Mr Donohoe: Can you give us an example of behaviour and purchasingdecisions to also move that? What is it you are getting from the oil industry? forward. That is precisely the role of the Low Tell us what you see that the oil industry is doingto Carbon Vehicle Partnership; to work to find ways to assist the situation of transferringover from petrol, stimulate that move forward in order that we can from diesel to the alternatives? Where is that maintain what is a reduction in the environmental evidence? impact from road transport over time. Mr Smith: I have mentioned their engagement in the work of the Partnership. Secondly, they Q534Mr Donohoe: So you think that oil companies continue to undertake extensive research and the car manufacturers are assistingyou in being themselves and there a re new fuel products. You able to seriously invest in these alternatives and have seen BP introduce a new range of fuels Government, equally, is serious in its investment of on to the marketplace which have reduced lookingat the alternatives and tryingto bringthem environmental impact. So the oil companies not just from the drawingboard but into production themselves are making i nvestments and bringing for use in 20–30 years time? Do you think that is a those investments forward to the market. There is serious proposition beingmade by these three areas? also research goingo n in other areas. Things like Mr Smith: Yes, I do because I have some gas to liquid, as an example, where the oil understandingof the scale of the investment. companies are very, very eng aged in that process, Certainly from my own company’s point of view which again can reduce the environmental impact (with my Toyota hat on) that is beingdeployed of road transport in the futur e by convertinggas 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr Phillip Sellwood, Mr Richard Tarboton, Mr Graham Smith, Mr John Wood and Mr Robert Evans into a liquidised road fuel. These are the kind of Q545 Mr Stevenson: Why not? initiatives that we do see. I am not an oil company Mr Sellwood: Because what we are lookingto do either executive or expert, but I do not personally now, we were tryingto sell e Vectively a product with perceive the oil companies, in the work that I am limited market appeal prior to this year. There was exposed to through the Low Carbon Vehicle not much take up. We had to set the grant level at the Partnership, to be dragging their feet. They are highest possible level in order to get take up. That willingly at the table and are making their take up has now happened, albeit it some of it as a contribution. One of our six workinggroups is a result of externalities. What we have now done is fuels working group largely made up of reduced the grant level, cognisant of the new representatives from the fuel companies. demand in the marketplace, hopingto serve another 30% of customers. Q539 Mr Stevenson: The Energy Saving Trust: you Q546 Mr Stevenson: I personally put this question to have asserted, in terms of your decision to cut grants Mr Gornall and Mr Addison of Lex Vehicle between 20 and 40% across the board this year, that Licensingand their response to the assertion I have since 1996 the market has matured and there is a just put to you that “I am surprised at that certain momentum there that will mitigate the eVect assertion”. I think it would have a very fundamental of your cuts. When did you reach that conclusion? eVect. I am personally aware of customers who are Mr Sellwood: Probably what has happened in the holdingo V makingdecisions because they are last year is a combination of increased marketing awaiting the next budget. So one of the largest fleet and an increased awareness particularly flowing managers in the country is saying your decision is from both fleet manufacturers and from individual going to have a profound deleterious eVect. consumers. I think probably by the middle of this Mr Sellwood: With respect, we do not agree with year—also I have to say driven by an unknown him. externality called the congestion charge, which also has driven quite a lot of people into takingup low emission technology— Q547 Mr Stevenson: Okay. Could I then come to what would be required in terms of Government policy? I am lookingat the list and even with the 40% Q540 Chairman: Have you got any kind of figures? reduction there are some vehicles, LPG for example, Mr Sellwood: We were sayingthat when the who may qualify for a £450 grant after the Chancellor announced that he would be reviewing reductions. If we take that low figure, the powered duty, we expected, pre the congestion charge, future vehicles goal is to achieve 10% of vehicle fleet significant fall back and in fact we went from an as low carbon by 2012. That is the goal set down by estimate of about 2,000 vehicles to 4,000 vehicles. Government. Ten per cent of the current vehicles is In fact, what we saw was a very significant about 2.4 million vehicles. £450 a go, I hope this increase. arithmetic is correct, £1,104,000. How do you equate the two, Mr Sellwood? Mr Sellwood: I do not equate the two because I Q541 Mr Stevenson: So in fact you reached that think our role in the marketplace is to stimulate conclusion some time duringthe course of the latter and transform the market, not to subsidise every part of last year? vehicle that comes on to the market. There will Mr Sellwood: Correct. have to be a time, and that is going to be a matter of timingand judgment, when the market is suYciently mature and, I have to say, rather more Q542 Mr Stevenson: You were aware at that stage mature even than it is now, when those grants will that your budget simply would not accommodate firstly come down. There will have to be a decision the grant applications? made at some stage that that market, for these Mr Sellwood: We were aware that if we did not take particular vehicles or for that particular action we would be over-spend, yes. technology or fuel, is indeed mature. We then need to re-invest that valuable public money in new Q543 Mr Stevenson: Your budget would not technology to recommence the cycle. accommodate the applications? Mr Sellwood: Yes. Q548 Mr Stevenson: Are the grants you oVer cost- eVective in terms of emissions, say, per pound of subsidy? Q544 Mr Stevenson: So you concluded you can do Mr Sellwood: I think they are. Like lots of things, it this because there is momentum in the market. I see. depends what you compare these with. If you But at a time, Mr Sellwood, when you say that one of compare them with, for instance, some of the the reasons for this is “the public are probably more programmes that we also run on household educated”, does it not seem rather strange that at eYciency, they look quite expensive; about £600 a that critical time you then decide to cut your grant carbon ton compared to anythingfrom £50 to £130 levels by between 20 and 40% across the board? on household energy eYciency in terms of reduced Mr Sellwood: Not at all. I think it is entirely carbon. So I would not be pretendingto you that consistent. they are cheap because they are not. Which is why we 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr Phillip Sellwood, Mr Richard Tarboton, Mr Graham Smith, Mr John Wood and Mr Robert Evans have to make some very strongdecisions at the answer the question; why is it that you are providing appropriate time not to continue usingpublic funds considerable levels of grant to vehicles that produce 4 supportingsomethingthat does not need it. considerably more CO2 emissions at the tailpipe and you provide no grant to vehicles that are producing Q549 Mr Stevenson: Comparingas best you can like- significantly less CO2 emissions at the tailpipe? It with-like instead of homes and vehicles, I repeat the does not seem to make a lot of sense to me. question; do you believe that the grant schemes are Mr Tarboton: It is because of the air quality benefits cost-eVective in terms of the emission per pound? that those vehicles provide. So you will have some Mr Sellwood: I think they are in terms of the job that vehicles which are very good on air quality, for they seek to do, yes. example natural gas and LPG vehicles. Those vehicles receive a grant currently as a result of their Q550 Mr Stevenson: You are goading me to ask the air quality benefits. You have other vehicles like same question. Why cut them then if they are hybrids and electric vehicles which have very good eVective? CO2 benefits and therefore get a grant. Mr Sellwood: Because what we are lookingto do is to re-invest that same money in more vehicles. More Q554Mr Stevenson: The impellinglogic,it seems to vehicles is more carbon reduced, more carbon me, of your response to my question is that you put eVective. greater emphasis on particulates than you do on CO2 emissions. Q551 Mr Stevenson: Will cuttingthe grantnot make Mr Tarboton: On some vehicles, yes. On some you less cost-eVective? vehicles it has greater— Mr Sellwood: I do not see why it should. Mr Tarboton: If I could add to that. The cost per Q555 Mr Stevenson: The last question is; why do you grant will actually go down. If we give out more apparently base PowerShift grants on the type of grants, the cost per grant goes down if our fixed costs technology rather than the level of emissions remain the same. produced? Chairman: I do not think that was the point actually Mr Tarboton: We would like to move towards an that Mr Stevenson was making. emission-based system and this is what—

Q552 Mr Stevenson: Could I ask one last question to Q556 Mr Stevenson: Forgive me, Mr Tarboton, it is Mr Tarboton because I wrote down earlier that you important because I understand that you are the were arguing that the grants are primarily disposed expert. So are you sayingat the moment you do not to produce benefits from CO2 emissions and you also do that but you would like to move to it? It is very talked about particulates. I want to ask a question important, this. about that because if we have a look at the grants Mr Tarboton: Yes. available to diVerent types of vehicles, we find that vehicles that get considerable grants in terms of CO2 Q557 Mr Stevenson: Why do you not do it now? emissions are very high comparatively and vehicles Mr Tarboton: It is emissions-based to a degree. It has that get no grant in terms of CO2 emissions are very grown up traditionally from a basis of looking at low comparatively. How do you square that with those technologies where there is a need to install an your objective of achievingCO 2 benefits? infrastructure where the markets have been very Mr Tarboton: The objective of these programmes small initially. Like LPG, there was a need to install was initially around air quality. They do also have a the infrastructure and support those vehicles early CO2 benefit. What we will be doingin May this year on, so grant levels were set for LPG vehicles. We with the DfT is going through a long term then had natural gas vehicles and grant levels were consultation with the whole industry to answer this set for those. We have had hybrid vehicles come on exact question; how can we realign the grants... to the market since then and we have had grant levels set for those. We now have a range of diVerent Q553 Mr Stevenson: With respect, I do not want to technologies and we need to actually now level the wait until you have done your consultation. We may playingfield and actually assess them againsttheir never meet again, which I am sorry about. I just emission benefits equally and we would agree that wonder, given your expertise, whether you could that is somethingwe would like to do in the future. The history of the programme has been growing as 4 Note by witness: This CO2 cost/tonne figure may appear these new technologies have evolved and we are at comparatively high, however the CO2 cost-eVectiveness of the PowerShift programme is improving. In the early years the point now of those technologies all being at the of the programme the majority of vehicles funded were LPG stage of equal footing and being able to rated equally cars, which have good air pollution emission benefits but against each other with regard to CO2 and air marginal CO2 improvements over diesel. In recent years quality. PowerShift has provided grants to more Natural Gas Heavy Goods Vehicles and Hybrid vehicles, which have significant CO2 and air pollution benefits. EST is currently reviewing Q558 Mr Stevenson: You intend to do that when? CO2 (and other pollution) abatement cost figures, which will Mr Tarboton: In May this year, we have been be available in due course. The PowerShift programme will be reviewed as part of the forthcomingGovernment workingwith the Department for Transport for that consultation on TransportEnergy programmes, and is longterm consultation to come out. In January this anticipated it to become more focused on CO2 reductions. year we discussed this with the stakeholders across 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr Phillip Sellwood, Mr Richard Tarboton, Mr Graham Smith, Mr John Wood and Mr Robert Evans the industry. What we have done this year is an obviously, on the availability of refuelling interim move towards that and all LPG vehicles and infrastructure as well. DiVerent companies take hybrid vehicles now get a fixed grant which is diVerent views and I entirely respect the view of identical, £700 per vehicle, as they all fit into Band 4 General Motors. I sincerely hope that their view of our PowerShift register. Band 4 is an emissions comes to pass and we do see commercialised band for all vehicles on PowerShift, so you have to vehicles, aVordable vehicles propelled by hydrogen fit into that emissions band to get a grant. All as early as 2010, but the consensus across the vehicles in Band 4 are getting a £700 grant. industry probably would suggest a date somewhat later than that. The date that I indicated, 2020, is Q559 Miss McIntosh: What is the relationship probably closer to that consensus than the General between the three funds; the PowerShift grant, the Motors view. CleanUp and the New Technology Fund? Because it Mr Wood: I would agree entirely. I think that 2020 strikes me that you are investinga whole lot of is a reasonable date. It is a question of what you money without beingclear whether it is technology mean by the introduction of hydrogen fuelled based, air quality based or emission based and, at the vehicles and in numbers I think 2010 is totally out of end of the day, it is taxpayers’ money. the court. The questions around the infrastructure, Mr Sellwood: It is a perfectly fair question, both those there is an enormous amount of uncertainty yet as to two previous questions, in terms of where programmes how the hydrogen fuel will be stored and carried. It have come from. The concept that we are tryingto is one thingto do a demonstration vehicle, or indeed pursue is that the New Vehicle Technology Fund invests to have a small number of demonstration vehicles, it money in technology obviously of the future that are is quite another to have a mass fleet or vehicles near market. We then use our grant aided programmes available for mass purchase. I believe that 2020 is a currently, as was just described, as a mixed bag much more realistic figure. eVectively between emissions and air quality and it would be our desire to move towards a fully based Q561 Mr Stringer: The other part of the question about where we are in the international pecking technology neutral CO2 emissions based policy. The third element, which we have not talked anythingabout order and how the Centre of Automotive Excellence this afternoon, is once those technologies are in the and Development will change or help our position? marketplace and companies take them up and develop Mr Wood: I think the point here is that there is no models, once those fuels become more available up and doubt that the low carbon technology arena is a down the country, what we are then doingis investing huge opportunity and that if we wait other people the remainder of our money in other programmes will take the initiative. There is a lot of work going which are much more around education, driver on amongthe mainland European based automotive behaviour, fleet management, travel plans. This is a manufacturers. I think in this country we have an circular process, so we do not keep on in five years time opportunity to develop particularly niche models helpinggrant aid the same technologiesor the same and niche applications. The aim of the Centre is very fuels unless we see that they have got a longer term much to support the development of UK produced future. If they come nearer to market or they start to technology. The other countries have their own mature, at the right time we will withdraw that fund and approach to this and in Germany, as I say, it is partly then start to reinvest that in the front end programmes centred around the German— and new technology. Chairman: Where is our niche, Mr Wood? Higher or lower or in the middle? Where is this niche?

Q560 Mr Stringer: The Low Carbon Vehicle Q562 Mr Stevenson: Are we behind Germany, the Partnership said earlier that you envisaged hydrogen United States, Canada, Japan? vehicles comingin in 2020. Why does your Mr Wood: Yes. projection diVer so much from General Motors, who told us they expected to have commercial hydrogen Q563 Mr Stringer: All four of them? fuel cell vehicles on the market by 2010? Can I ask Mr Wood: In some aspects only. There are other the Low Carbon Vehicle Partnership how the UK’s areas where we have particular expertise, where we capability, in terms of low carbon vehicle and fuel are probably ahead. technology, compares to our international competitors and whether or not the Centre for Q564Mr Stringer: Which are? Automotive Excellence will help change our position Mr Wood: Certain aspects of the vehicle control in the international peckingorder? system. Certain aspects of some types of fuel cell. In Mr Smith: If I could just lead oV and then I would general terms, the European and American appreciate handingover to John for the second part manufacturers have developed their own fuel cell of that question. It was me that indicated 2020. I am capability, particularly in Canada with Ballard, of aware of the General Motors position. There are a course, that is industry leading. range of positions. This is still, from a Chairman: Gentlemen, you have been very helpful. commercialisation of new technology, some way oV We will have some more questions to send to you, I for all vehicle manufacturers. There are statements think. Thank you very much for your evidence this beingmade that clearly are optimistic. It depends, afternoon. 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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Witnesses: Mr David Jamieson, a Member of the House, Parliamentary Under-Secretary of State, Mr Malcolm Fendick, Head of Transport Environment and Taxation Division, and Mr Eric Sampson, Head of Vehicle Technology and Standards Division, Department for Transport; John Healey, a Member of the House, Economic Secretary, and Mr Dan Edwards, Policy Adviser on Transport Taxes, HM Treasury, examined.

Q565 Chairman: Good afternoon, gentlemen. It is These crucial reductions are due to a rangeof always a very great pleasure to see you both here and measures, includingsafe, modern vehicles. I am glad to see you have got an equal opportunity Encouraging and enabling greater adoption of delegation with you. Can I ask you if you would be technology generally and an intelligent transport kind enough to identify yourselves? system lies at the heart of the United Kingdom’s ten Mr Jamieson: Yes, good afternoon, Mrs year investment plan. New technologies can help Dunwoody. It is always a pleasure to be here. I am provide the tools and services to underpin a modern David Jamieson— integrated transport system that balances economic, social and environmental objectives. The car Q566 Chairman: May heaven forgive you for the lies industry is global and an increasing amount of the you tell, dear friend. standards and other technology driving measures Mr Jamieson: Thank you, Mrs Dunwoody. David are agreed at European and international level. The Jamieson, Parliamentary Under-Secretary of State, European Union Vehicle Emissions Standards and Department for Transport. Voluntary Agreements on carbon dioxide are V John Healey: John Healey, Economic Secretary to examples where highly e ective European action is the Treasury. drivingforward innovation in close alignmentwith Mr Edwards: Dan Edwards from the Treasury. I United Kingdom policies, the Voluntary Agreements deal with transport tax policy. havinga wider impact. Both the Japanese and the Mr Fendick: Malcolm Fendick. I am the Korean manufacturers are committed to reducing Department for Transport’s Chief Mechanical the impact of their fleets. While the challenges are Engineer. significant through domestic, European and wider Mr Sampson: I am Eric Sampson, the Manager of international action, the Government is takingsteps the Vehicle Technology and Standards Division in to address them. I hope as openingremarks those are the Department for Transport. helpful, Mrs Dunwoody, and we look forward to your questions. Q567 Chairman: Thank you very much, Mr Sampson. Now, gentlemen, did either of you have Q569 Chairman: Yes, that is a very useful set of anythingyou wanted to kick o V with, or are you parameters for us, Minister, and I have no doubt we quite happy to go to questions? will want to ask you about various aspects of it, but Mr Jamieson: Mrs Dunwoody, could I just indulge can I bringyou back to direct involvement of the patience of the Committee with just a short Government; how you influence consumer choice. statement, if I may? What is the purpose of vehicle excise duty? Mr Healey? John Healey: Shall I start, Mrs Dunwoody? Thank Q568 Chairman: Minister, every word you say is you. always treasured, recorded and kept in our memories forever. Mr Jamieson: Thank you. You are very kind. The Q570 Chairman: As we have cross-cutting first thingI say, Mrs Dunwoody, as always we Government, Minister, we are expectingyou to box welcome the decision of the Committee to hold this and cox on this. Mr Healey? inquiry into cars of the future and I am very grateful John Healey: Let me box first and leave the rest to and glad that we have been invited here this David to cox. Clearly vehicle excise duty makes a afternoon. The United Kingdom faces some major contribution to general Government revenues, challenges in road transport; to reduce carbon raisingabout £4.5 billion a year. Since we have dioxide emissions, to improve air quality, to ensure reformed and restructured it in March 2001 it also continuity and security of transport, to reduce road provides an encouragement, a signal, if you like, to casualties, to reduce congestion and to maximise the encourage people to purchase more environmentally benefit of all these changes for United Kingdom friendly cars. I would not overstate that, particularly industry. The vehicle of the future will have a central as at the moment that new reformed VED regime role to play in all of these. The Government’s Energy only covers about one in four cars on the road White Paper set out the framework for energy policy because the bulk of the vehicles pre-date March and outlined the challenges of shifting to a low 2001. Thirdly, it also has a value in reinforcingand carbon economy. Our Powering Future Vehicles helpingthe DVLA maintain their Central Vehicle strategy sits within that framework, putting us on Register. So those, I would suggest, are probably the the path to a cleaner, low carbon transport future three principal purposes of vehicle excise duty in through a co-ordinated cross-Government package the UK. of measures. My Department’s road safety strategy set stretching and challenging targets for us and I am Q571 Chairman: Do you really think the general pleased to report to the Committee that we are firmly public understand it? on track to meet these. For example, we are already John Healey: The short answer is no, not fully, not more than two thirds of the way to meetingour 2010 yet. You may be aware, Mrs Dunwoody, that the target for deaths and serious injuries for children. Department for Transport published recently a 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards piece of opinion research conducted by MORI. It is of interest to the consumer, probably not in a relatively new tax. That research was valuable in environmental terms but certainly in terms of the parts, but it did suggest that levels of knowledge and cost of running the vehicle. awareness of particularly the reformed part of VED are still relatively low. Q577 Miss McIntosh: Could I turn to the Treasury Minister for the question of grants? The budget is Q572 Chairman: So would you therefore assume £30 million, providing£8,000 grants,yet we hear that if you increased VED for more polluting that the take up of alternative fuel vehicles is still vehicles that would have an eVect? very slow, whereas the increase in diesel vehicles has John Healey: It is plausible to argue that, although not increased in technological performance but also when one looks at the rate of VED, at the top whack in take up of car fleet sales. Is that not a rather at the moment it is £165 per year, it is pretty small perverse result of the use of subsidies? and any even substantial increase will still leave John Healey: If I may, Miss McIntosh, just to be vehicle excise duty on its own as a factor as a clear, the £30 million grant, are you talking about relatively minor, modest part of the overall cost of a the PowerShift programme specifically to encourage new car purchase. LPG vehicles?

Q573 Chairman: Yes, but you did say it would send Q578 Miss McIntosh: Yes, if I could be specific, a signal, I think was the phrase you used. What kind Chairman, could I refer to three grants; the of signal are you trying to send? A strong one or a PowerShift, the CleanUp and the New Technology V weak one? Fund all seem to be havingrather one e ect. I am not John Healey: It is a signal. It is an encouragement, sure whether the £30 million covers all three but, at as part of a package of measures that we have put in the end of the day, we are not seeingalternative fuel place that, if you like, are designed to draw attention cars go up and it links to the Chairman’s point. I to the benefits and to encourage at the margins think the Transport Minister did say that the public people to consider purchasinggreenervehicles. are not aware. Now, I am aware that a diesel car is better than petrol, so I elected to go for diesel for one reason. Why is this not getting into the public Q574Chairman: Although MORI would seem to domain when they are either purchasingcar fleet show that you are not doingthat terribly well. cars or individual motorists’ cars? Mr Jamieson: I think, Mrs Dunwoody, one of the Mr Jamieson: Shall I take the PowerShift because it signals it gives, although the diVerence between an is actually through my Department and John may electric vehicle, which would actually be zero, but want— there are so few of those it is almost irrelevant, but John Healey: Before you do, just so that Miss probably the lowest average would be about £100 up McIntosh has a fuller picture. In addition to the to £165. That in itself is not a large incentive, it is— specific grant schemes that you have highlighted that obviously the Department for Transport run, we do Q575 Chairman: Given the price of a vehicle, no. encourage and support, through essentially the Mr Jamieson: Yes, the diVerence is probably less revenue going to the Treasury and through fiscal than the price of two fills of the vehicle’s tank. So it measures, the development of alternative fuels. So is not a large incentive, but it does give an indication alongside, for instance, the PowerShift programme to people of which are more fuel eYcient vehicles and the figure that you cited of £30 million a year, and, of course, it is really the fuel eYciency. A vehicle our duty discount for LPG vehicles is costingus that is doingmore miles per gallon,of course, is about £70 million and it has been in large part advantageous not just to the environment, it is very responsible for the development of the production advantageous to the consumer. We do know that the capacity, the refuellinginfrastructure and the take consumer is interested in lookingat fuel e Yciency. up that we have had so far of LPG vehicles. It has been that degree of discount and Government support that I think has been responsible for the fact Q576 Chairman: Are you satisfied that the industry that we now have somethinglike 1,400 refuelling would therefore draw that to the attention of a stations, gas stations, petrol stations that supply customer? In a showroom, is it one of the elements LPG across the country now. So it is the they would choose to highlight? development of the infrastructure, I think, that it is Mr Jamieson: At the moment, new manufacturers important not to lose of sight of, alongside the have to highlight the carbon output of a vehicle, but number of vehicles that actually convert to the use in all honesty I do not think that makes a lot of of these fuels because clearly if you have not got the diVerence. I do not think most people actually supply infrastructure in place you are unlikely to get understand it. What we have trialled, as John was people usingthose cars. saying, is a system of marking cars rather like Mr Jamieson: If I could just explain that PowerShift refrigerators and washing machines, showing them and CleanUp are there to encourage new on an A to G scale of the eYciency of those. technologies. They are not there to make the major Although that indicates the vehicle excise duty level, changes. I think initially we were giving the grants but most importantly for the consumer, it then particularly to convert to gas, to LPG and to natural indicates also the fuel eYciency which, of course, is gas. More recently we have been giving grant help 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards towards hybrid vehicles. These are to pump prime, Mr Jamieson: You are quite right, we cannot sustain to kick start. The real heavy lifting, as John has this over the longterm. What we are givingisan indicated, is then done by the Treasury through encouragement for the market to take up the hybrid other fiscal incentives. So I think we are encouraging vehicles because at the outset people thought these through those grants, limited though they may be, were a rather quaint and unusual technology and the change to take place. I think LPG is an example people are very resistant to change. I think now there where that has happened. It has been less is a much wider acceptability that hybrid vehicles are encouraging in the natural gas area. That has not very normal. They are very driveable vehicles and, in developed as I would have liked. However hybrid fact, the driver generally does not notice a lot of vehicles now are becomingmuch more common, but diVerence between that and an ordinary small in the longterm it is not Government’s role to be automatic vehicle. I am told by the producers, which subsidisingthose vehicles. It is a matter of gettingthe are Honda and Toyota, that their order books are pump primed and getting those vehicles into the very full. Most of it is stimulated by the fact that showrooms, but ultimately they must stand on the people realise they can get very, very good fuel market. consumption out of the vehicles. I am also told that the London congestion charge exemption has caused quite a frisson in the showrooms in London. Q579 Miss McIntosh: On the question of smart There is a point at which the Government does not vehicles and the not-so-smart driver, we have taken need to intervene. What we need to encourage some evidence that, as far as the industry is people to understand is that it makes good concerned, even the people producingthese vehicles, environmental sense, but it actually makes good there is great concern on the issue of product economic sense for the buyer to buy a vehicle that is liability. It would appear that Government is seriously fuel eYcient. holdingback and not takinga stand on this. I do not know where the European Product Liability Q581 Chairman: We have taken evidence, of course, Directive fits in, but can the Minister confirm that that people are not always aware of every aspect of you will not be leavingit for the courts to decide, that their car. In fact, Professor Carsten told us that it will be very clear for drivers purchasingthese people did not even understand ABS. Would you vehicles where the liability will lie? agree with that? Mr Jamieson: Yes. I can see the lawyer comingout Mr Jamieson: I think that that is right. A lot of in you now and you are absolutely right to ask that people do not understand the intricacies of the question. Most of the technology we have seen vehicle and I do not think they necessarily have to. developed so far is enhancingthe capability of the driver to be able to drive safely. For example, ABS Q582 Chairman: Yes, but some of the things that brakingand intelligentbrakingsystems, better you are aimed at are presumably education? information systems in the vehicle, they are actually Mr Jamieson: Yes. I do not think that people have adjuncts to the driver. I think where you come to the to know precisely what is going on under the bonnet point (and we are not at this point yet in terms of of the vehicle. I certainly do not know what is going mass delivery of this) where some of the functions of on under the bonnet of my vehicle these days. I used the driver could be taken over by technology, we do to understand it 20 years ago, but I do not now, but move into some new and interestinglegalareas. I do not think I need to because what I need to know Certainly we, as Government, have got to explore as a driver is how I can use that piece of equipment. those within the framework of our own national law Just like usinga computer, I do not know what goes to see how those fit in because clearly if we went on inside the computer but I do know how to use it. I down the road of some of the technologies, where think there is a slight diVerence here in terms of when the driver no longer appears to have some of the people purchase a car. I think we need to get better responsibility for the vehicle, then we are in a very information to people as to why or how they are diVerent legal world. At the moment, what we are purchasinga particular vehicle and to encourage seeing developing, and we are encouraging to people to buy them on the grounds of safety, of Y develop, is systems that actually assist the driver economy, of fuel e ciency, rather than just rather than take over the role of the driver. performance and all the glamour that goes with some vehicles.

Q580 Mr Marsden: Minister, on Monday you kindly Q583 Mr Stevenson: The Energy Saving Trust, gave me a Parliamentary Reply that confirmed that Ministers, decided towards the end of last year, we the number hybrid electric cars fell in 2001 from 568 have taken evidence today, that they could cut their to 373 for last year in terms of new vehicle grants between 20 and 40% for PowerShift and clean registrations. At the same time, we have the vehicles because they “believe the market has PowerShift grant being cut. Surely it would be better matured since 1996 and has a momentum that will to help establish that market? I agree with you, you carry it forward”. Do you accept that? want to be able to have a diversity of the Mr Jamieson: In the last two years, in 2001–02 and marketplace and clearly you cannot sustain it for 2002–03, the grant was under-subscribed, as you longterm, but in the short term surely it would be probably know. I have to say it was to some sheer folly to start cuttingback now? irritation of mine that it was not taken up to the 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards extent that it should have been. We have kept the Q588 Mr Stevenson: That is very interestingbecause grant level approximately the same and this financial when I compare that answer with your year, of course, it has been over-subscribed and next memorandum which you submitted to the year it appears that we are going to be well- Committee, I become confused. I do not wish to subscribed as well, although it will depend on blame you for my confusion, but I want to go out of applications. I think what we have to do is we have the room less confused than I came in. I think that to look at how we use those grants to the best is fair. advantage and focus them on where the benefits are Mr Jamieson: I think the order sessions are there to the greatest. They ran out of funds this year and lift the confusion sometimes. there were no more funds available, unless of course we had taken it from some other part of the Q589 Mr Stevenson: You say on this very issue Department’s budget, which we were unwilling to about air quality, which of course is what we are do. What they had to do was to freeze the grants for talkingabout due to particulates and the answer you a period of time and then revisit those, which they have given, that eVectively the issue of cleaner cars, will be on 1 April. If you like, they have had to the remainingproblem is a localised one. In other spread the jam a little bit more thinly and slightly words, you are sayingthat this whole issue about the refocus them for where the benefits are best. air quality, the relationship between CO2 and particulates, accordingto your memorandum, is Q584Mr Stevenson: I do not know whether that has now a local issue and best tackled by local measures. quite answered my question. Do you believe when How does that square with your concern about the they say the market has suYcient momentum to question I asked previously? carry it forward without the level of grants that have Mr Jamieson: No, I think what we are sayingis that been available heretofore? the emissions tend to be a localised problem, Mr Jamieson: Yes, I think it has. The reason I think particularly in city areas. The emissions are a that is, for example, we were—I know you had a lot problem in cities and there is probably a slightly of discussions about LPG last week and I will not go diVerent approach to, say, carbon dioxide because into too much detail this week—but just as an wherever carbon dioxide is admitted it is addingto example, many of the LPG conversions are not the carbon dioxide in the whole of the global happeningwith the grant.In fact, 80% of LPG atmosphere, but emissions tend to be more conversions happen outside of the grant system, localised issues. which actually does create extra problems in itself, but I will not go into those today. I think the Q590 Mr Stringer: That is not true of ozone, is it, stimulus was the fuel duty. Minister? Mr Jamieson: No, indeed. As I say, the CO2 and Q585 Mr Stevenson: Thank you, Minister. I wanted those issues are globalised issues, but issues such as to get that answer from you and you were good particulates, they are issues mainly in built up areas. enough to answer it. Yes, you do agree? Mr Jamieson: Yes, I do. Q591 Mr Stevenson: The grant levels themselves, with the cost that EST is proposingfor next year, the Q586 Mr Stevenson: Are you concerned, therefore, lowest grant will be, I think, about £450 per vehicle as part of that, that the Energy Saving Trust seem to and clearly, over the course of the next five or ten be or are giving significant grants to vehicles that years, there will be movements in the market, there have significantly higher CO2 emissions than others will be diVerent demands and so on. Takingthat but lower particulates emissions? Does that £450 as a yardstick figure, the information we have concern you? is that the Government wants to see 10% of our Mr Jamieson: Yes, it does because what has vehicles usingenvironmental friendly fuels over the happened since the grant regime started, changes are ten year period. That is about 2.5 million vehicles. If takingplace and they are takingplace more rapidly I take the £450 as a yardstick, we are talkingabout than we first thought. For example, when we first £1.1 billion. I can see the Economy Secretary’s eyes started giving the fuel duty incentive for liquid watering. Do you accept those figures or anything petroleum gas, the diVerence between the emissions like them as beingwhat may be necessary over t he between petrol and LPG were very great. The gap ten year period? has now closed. So therefore we have to then change Mr Jamieson: The arithmetic you have just done is our grant regime obviously to respond to the probably correct. changing market. Q592 Mr Stevenson: So you do accept that? Q587 Mr Stevenson: So you are concerned about Mr Jamieson: We accept your arithmetic, but I that? would not accept that that is what we need to do. I Mr Jamieson: I am, but that is why, firstly, this year do not know if the Select Committee will we did a very rapid consultation for the comingyear recommend that we spend a billion pounds as to how we would use the grants more eVectively subsidisingvehicles and not spendingit on railways and then we are having consultation for the longer and other things. I am not sure that that is where the term as to how we can focus the grants more on Committee would be going. What we are doing with reduction of CO2 than we have in the past. those grants is incentivising the take up of the new 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards technologies, but there is absolutely no intention in market will take over. I get the impression, without the longer term that there would be a permanent puttingwords into your mouth, you think we have subsidy for the private motorist on their vehicles. reached that point. There may be longer term fiscal incentives to buy the John Healey: I think we need to continue cleaner fuels, either low sulphur or— encouraging new technologies. I think we have not reached that point yet. Q593 Mr Stevenson: So takinginto account some figure that may be required over the next few years, Q596 Mr Stevenson: That is fine. One last question plus the fiscal incentives that are here from the before Mrs Dunwoody drops on me. I would like to Economy Secretary, what sort of ball park are we ask you about the 2010 objectives. Are we on track talkingabout? Is it somewhere in between the through the Voluntary Agreement to reduce carbon current £100 million (£30 million plus £70 million emissions by 4 million tons by 2010? that was talked about earlier) and the £1.1 billion Mr Jamieson: We had an ambition of a reduction of that my simple arithmetic has come out with? Is it between 2.6 and 5.9 million tons and a figure in the somewhere in between them? White Paper was given as 4 million. The simple Mr Jamieson: I think we will have to look at the level answer to your question is no, currently we are not of grants that we are using through PowerShift and on target to meet that. We are probably at the lower CleanUp as to how they incentivise the new end of our ambition of probably about the 2.6 and I technology. That is a decision that we have to make. think that there are probably a number of reasons The decision that the Treasury have to make, of for that. I think initially, I will be quite frank with course, is this heavy liftingthat I was talkingabout you, it was somewhat over-optimistic to expect a moment ago, is to how get that into the long transport to make that contribution at that time and term frame. I think we have under-estimated the fact that in this John Healey: The comparative figures on your country traditionally we have had somewhat larger model, Mr Stevenson, would put the annual cost private vehicles than they have had, for example, in over a ten year period at about £100 to £125 million. France, Italy and certainly in Germany and thereby The judgment that we all have to make, interested in there is still a somewhat higher CO2 emission level in policy development in this area, really is a complex this country. I think some of the other technologies one and it has several components. The first is if we we expected to come in as well, such as direct start from the principle that here we need to injection engines, have taken longer to prove, but the encourage an industry that is not long term actual agreement itself, the Voluntary Agreement is dependant on subsidy, what is the appropriate level working, but there are other features as well. of subsidy? The Alternative Fuels Framework that we published in the Pre-Budget Report is an attempt to Q597 Mr Stevenson: The 4 million tons was from the set out systematically how we should tackle those Voluntary Agreement. You have indicated that (a) questions. At the heart of it is in these terms; what we are not on target and (b) it could be 40% less than is the environmental gain from use of any particular anticipated, 2.6 instead of 4 million . . . fuel? Second; are there other economic costs and Mr Jamieson: It could be the low end of our considerations that we should take into account? projection. You cited the judgment that the Energy Saving Trust is making, the one that we are all making, in Q598 Mr Stevenson: . . . and the figures could even fact, is at what point is the market, the infrastructure get worse over the next few years. So the 4 million and the demand mature enough to withdraw a level tons is not bankable or safe at this stage. What about of subsidy that at the moment is not justified by the the 1.6 million tons from the 10 year plan? Where are environmental benefits. we with that? Mr Jamieson: I think we expect to meet the target somewhere in the region of 1.2 million. I think the Q594Mr Stevenson: You judge we have reached that diYculty here, Mrs Dunwoody, these are all point now? projections that were made and done in good faith, John Healey: As we set out in the Pre-Budget but a number of things are working against the CO2 Report, the environmental benefit from LPG fuel targets. For example, we are also meeting some of does not justify on its own the level of duty our emission standards as well and meetingsome of diVerential that we have. The duty benefit of LPG is the emission standards works against the CO2 41.7p per litre above a normal ultra-low sulphur fuel targets. For example, catalytic converters actually and the environmental benefit just does not justify push up the fuel consumption to a certain extent. So that sort of cost to the public purse and the judgment we are trying to meet emission targets. We have got is; what level would justify that and how quickly can other things like safety measures in vehicles, making we move towards that without jeopardisingan them heavier. Those are workingagainstthe CO 2 industry that we want to see stand on its own two targets. feet and be successful in the future? Q599 Mr Stevenson: Minister, finally, very finally, Q595 Mr Stevenson: The purpose of my question last week I was able to put the same question to our was to seek your opinion about whether we have colleague Jacqui Smith and, without going through reached the level where grants can be cut because the whole question again, I did ask what action is 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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Government takingto ensure that the targetsare We do not have our own indep endent data for that. met. I think I paraphrased, but only slightly, that the It is a very diYcult sort of study to do, to actually Minister then said that she was confident that with look before and after and come to a conclusion the measures Government was takingthese targets about whether people are avoidingaccidents would be met. Do you share that confidence? because of vehicle technology. Mr Jamieson: I share the ambition to meet the targets. Q604Clive E Vord: So when you say you test your own vehicles, what do you test? Q600 Mr Stevenson: This is very important because I Mr Fendick: We test for emissions. That is what I asked a specific question and the specific answer was was talkingabout initially. On the safety side, of that “Yes, with the measures we are puttingin place, course, we are very deeply into doingconsumer we are confident that we shall reach the targets”. Do testings through EuroNCAP. The UK’s primary you share that confidence? role in getting that whole idea oV the ground and Mr Jamieson: I will say again, Mrs Dunwoody, I continuing to finance it, that gives us some very good cannot comment on what someone else says, but ideas of which vehicles are performingwell and what I am sayingis that I share the ambition to meet which are not. the 20% reduction and— Q605 Clive EVord: But am I not right in saying that Q601 Chairman: I think we can take that as a no. the sources of information, even through NCAP, are Thank you very much. mainly from the manufacturers? Mr Jamieson: I do not think you can take it as a no, Mr Fendick: No, we do our own testing.6 Mrs Dunwoody, but nevertheless we have a shared ambition to meet those 2010 targets. Q606 Clive EVord: We have had evidence from Chairman: We have the greatest admiration for you, Professor MacDonald where, in his assessment, he is but even we know the diVerence between confidence sayingthat all these new technologiesare being and hopeful arrivingat a point beyond the horizon. advanced towards the Government, the Government is beingsold them. Advanced braking Q602 Clive EVord: Does the Government rely on test systems, vehicle awareness in the proximity of other data from manufacturers when assessingthe vehicles, all of these technologies are being advanced eVectiveness of new vehicle technology? towards the Government, but the only information Mr Jamieson: Shall I ask one of our engineering that you have is beingprovided from the experts to respond to that? manufacturers. You have no independent source of Mr Fendick: There are a variety of sources and of information to assess the eVectiveness of these new course the data we derive that makes up our technologies. You would disagree with that? assessment of meetingthe Voluntary Targets is all Mr Fendick: You are talkingabout the active safety, Government testingand Government data that is the primary safety like braking, advanced braking now assembled to come to that figure. So we are not system and suchlike. It is very diYcult to gather leavingthe industry to do that. In terms of assessing evidence that gives us a real level of confidence and new technology, we do spend a certain amount of much of this is still— research each year in takingvehicles and testing them independently to see what their emissions are Q607 Chairman: So are you therefore suggesting to give us some sort of measure about the things that that the German evidence that you are workingon we are also hearingfrom the industry and that allows is not gathered by the industry but that it is gathered us to take some sort of independent view of that. by the German Government independently? Or are you sayingthat the German figuresrelate directly to Q603 Clive EVord: What estimates does the the research done by the German industry? Government have on the reduction in injury crashes Mr Fendick: I think the particular ones that you are from in-vehicle driver assistance systems becoming talkingabout are Germany industry figures. available? Mr Fendick: The main source of data is German Q608 Chairman: So it is correct to say that what you manufacturing data in Germany which is suggesting 5 work on are industry figures? things like ABS are delivering considerable benefits. Mr Fendick: In that particular point, yes.

5 Note by witness: The data described refer to electronic V stability control rather than ABS. A Communication from Q609 Clive E ord: Can we be clear? The German the EU Commission to the Council and the European figures, enlighten us, what do they relate to? Parliament: “Information and Communication Mr Fendick: My understandingis that it reflects Technologies for Safe and Intelligent Vehicles”, COM(2003) change in accident statistics in Germany that the 542 final, September 2003, estimates a 4% reduction in accidents compared to the year before, which could be German industry has been able to identify. directly attributed to electronic stability control. The estimate is understood to come from research by a German 6 Note by witness: The Department supports the work of Euro manufacturer. The Department of Transport has conducted NCAP and funds tests. A minority of Euro NCAP tests are research into the eVectiveness of ABS. “A Survey of the sponsored by manufacturers, for example where a EVectiveness of ABS in ReducingAccidents” was carried manufacturer wishes to have a car tested near to its launch out for the Department by the Transport Research date. Such tests are undertaken by Euro NCAP in the same Laboratory. The results indicated a 3% overall reduction. independent way as other tests. 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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Q610 Clive EVord: Relating to which particular are going to put a kind of thesaurus alongside Iam pieces of technology? not sure that the average consumer will go into a Mr Fendick: They are talkingabout electronic showroom and know this testingonly rela tes to brakingsystems, stability control systems. other cars of the same type in this group. Or do you put a kind of disclaimer? Do you put a kind of caveat Q611 Clive EVord: And you have no independent emptor on all of your consumer schemes? Because if knowledge of those systems yourselves? You do not so, I missed it somewhere. Or perhaps it is in another test that? language. Mr Fendick: We are testingat the moment for Mr Fendick: I hope that we do. I cannot tell you for consumer, but we do not have the data that would a fact, but when we present the results we present allow us to make some conclusions about accidents them in groups and the intention is to allow the at the moment. consumer who wants to buy a vehicle in that group to lead him to the most crashworthy vehicle. Q612 Clive EVord: There is somethinghere that I am not understanding. The entire rest of the room is Q617 Clive EVord: Can I perhaps attempt to put the probably understandingit and I am not, but I do not question round the other way? Do you think that care, I am going to pursue it a bit further. You are that information is satisfactory from the customer’s sayingyou are testingit with customers. What does point of view if it is only giving them an indication of that mean? the crashworthiness of this vehicle, if it crashes into Mr Fendick: Our intention is to extend the idea we another vehicle of a similar type? have for crashworthiness testinginto the primary Mr Fendick: I think it is very useful information for safety area. So we are testingdi Verent vehicle types the consumer and if he takes notice of it and buys a on test tracks and assessinghow well the technology safer vehicle I believe that does improve road safety. performs with particular extreme manoeuvres. We are attemptingto develop a scheme which allows Q618 Clive EVord: You do not think there should be vehicle types to be ranked accordingto how well a standard against which all vehicles are measured so they perform in those tests, which can then inform you can understand? consumers. Mr Fendick: We actually have a regulation which requires vehicles to pass before they are even type Q613 Clive EVord: When you rank them in those approved, which is a similar test only to a lower tests, what do you crash them into? impact speed. So we do set the basic minimum Mr Fendick: No, sorry, these are handlingtests. We standard for crashworthiness. separately have a well developed crashworthiness test. Q619 Ian Lucas: Does anyone make an assessment of actual performance of vehicles in actual crashes? Q614Clive E Vord: I thought you just said you do a Mr Fendick: Yes. crash test. Mr Fendick: We do crash tests as well and that is the Q620 Ian Lucas: Who does that? EuroNCAP Scheme, which is published, is Mr Fendick: We have separate research programmes supported right across Europe and those tests we which go and look at on-the-spot vehicle accidents crash into concrete barriers with a deformable face, and do an in-depth survey of why people are being 40% overlap. injured and what has happened to the vehicle during the crash.7 That informs us as to what are useful Q615 Clive EVord: You see, we had evidence that safety features and what are not. suggested that when you rank these vehicles in these crash tests that if it is a Mini you will crash test it and Q621 Mr Marsden: Followingon from that then, rank it against crashing into other Minis. If it is a would it not be more useful for customers if the bigger vehicle, you will rank it in a similar way. Government then provided that analysis of real Unfortunately, Minis will not only crash into other world crash data so that people could actually see Minis, so I would just ask you about the relevance of what happens in the real world? Mr Fendick: We do publish that; the Make and that sort of ranking. 8 Mr Fendick: We test within those batches because Model Survey. usually somebody who is going to buy a Mini is not 7 in the market for buyingMPV and so to inform their Note by witness: DfT sponsors separate in-depth accident investigation research projects looking at a selection of choice, they want to know what the safest Mini accidents in detail. The Co-operative Crash Injury study category of vehicle is. (CCIS) is post accident and gathers data on how injuries occurred to car occupants. A further On the Spot accident investigation project is looking at accident causation factors Q616 Chairman: I think our problem is not that in three main areas: driver, highway and vehicle. actually. Our problem is that if you are going to 8 Note by witness: The full title of the document is “Cars: inform consumers and you are going to have green Make and Model: The Risk of Driver Injury in Great labels, you are going to have a system of grading, Britain: 1996–2000” (available at http://www.dft.gov.uk/ stellent/groups/dft—transstats/documents/page/dft— you are going to say to consumers “We want you to transstats—508326.hcsp). The analysis is based on personal know before you get involved in buying this injury road accident data reported to the Department for vehicle”, all these things will apply, then unless you Transport by Police Forces. 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards

Mr Jamieson: The NCAP data is available. I think and of course we have got the roadside test now and the diYculty is getting it in a form that people are people have to lift the bonnet and say some going to be able to understand when they go to rudimentary things that they understand, for purchase a car because we appreciate there are a lot example, what tyre pressure and that it is important of a diVerent features of buyinga car, from the to fill the car with water and oil, etc. So those things colour to the engine size, etc, but it is actually putting are now part of the test. I think as time goes on we it in a form that people understand. Already, as I are going to have to look at more sophisticated ways have said, we are havingsome di Yculty when you of getting people to understand the vehicle. Some of see a figure of 150 or 200 grams per kilometre. It the things, of course, do not need a lot of actually does not mean a lot to most people and that sophisticated understanding, like ABS is there and is why we are lookingat ways of gettingthis people have to develop the knowledge that in a skid information in a way that people can actually access they can still continue to steer. It is that type of it and use it. information that they need, but generally ABS is just eVective in a vehicle and so are many other modern Q622 Mr Marsden: What are you lookingat in terms safety features. of deadlines as to when you are going to produce this sort of new guidance, if that is the way you are V going? Q626 Clive E ord: With all these new advances Mr Fendick: We already have a publication which comingin, as the person who at the end of the day has got to make the decisions and advance policy, analyses the relative safety and crashworthiness of V vehicles out in service. The diYculty there is that to how do you make an assessment of the e ectiveness get a decent statistical base to make those of all these new technologies? What sources do you comparisons we have to have a large number of draw on? Are you satisfied that you have that vehicles. So we are runningfour years behind the information? introduction of new models. We can tell you about Mr Jamieson: I think we would look at them, if they V the relative safety of diVerent types of vehicles in real are e ective. The most important thingis safety, world accidents— safety to the person outside the car and safety to the person inside the car and to other road users. I think lookingat fuel economy is very important and Q623 Chairman: So by the time the average punter looking at technology that is generally going to give comes to change their car you will be able to tell benefits to the car driver and other road users, such them what they should have bought three years as modern information systems. before? Mr Fendick: Yes, that is the problem and we can never get over that because if you are looking at Q627 Clive EVord: Yes, but the question I am asking accident data you have to have a lot of those vehicles is how do you assess that they are doingthat? Are out there havingaccidents before you can draw you satisfied that you have got your finger on the conclusions. pulse of these new technologies that are actually doingwhat the manufacturers and everybody else Q624Clive E Vord: Who should provide trainingfor who wants to flogthem to you is actually tellingyou drivers on this new advanced technology and who that they do? should be responsible for makingsure that that Mr Jamieson: As I say, we do some of the testing, but information makes its way into the second hand some of this comes back through the market as well. car market? It is not just us doingthis. There are people Mr Jamieson: That is a very good question. I think independently advising. A lot of the motor we can look at new drivers, is one thing, but of magazines do testing and the consumer course not everybody will be a new driver. That is organisations do testing. I think the consumer has a actually quite a challenge and an area that we are sort of variety of things to which they can turn to going to need to examine. I do not think we have make decisions. done a great deal of work on that at the moment, but that is an area we are going to have to examine very carefully. I think people are informed by a variety of Q628 Mrs Ellman: It has been put to us that the means, not least the person who sells them the Government has a policy of stealth tax cuts and that vehicle. I think they need to give better help and you will be losingincome of about 1.5 billion a year instruction to people as to how to use the vehicle within the next two years because of reduced income eVectively and eYciently, but at the moment I think from fuel taxes because of greater eYciency in that is less developed than we would like it to be. vehicles. Is that right and would it be a case for rejoicingor concern? Q625 Clive EVord: Do you think that it is necessary John Healey: In principle, with the gains in fuel to include of some of these new technologies in the eYciency of engines, if all other variables remain the drivingtest? For instance, understandingthe same, you are going to get a drop oV in the amount advanced brakingsystem. of fuel used and therefore a revenue hit. The sort of Mr Jamieson: For new drivers that is relatively easy. figures that you are talking about are not ones that We could put these things in the theory test, which are recognised, but in principle that may be a factor we have done. As you know, there is the theory test in the longterm revenue pr ojections. 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards

Q629 Mrs Ellman: Have you made any estimates of Mr Jamieson: There would be two aspects; the main how much income you would lose over the next aspect to road charging would be to get better use of decade? Income loss for this reason, through success the road and to reduce congestion. Of course, if in getting greater fuel eYciency? every single vehicle was zero emission, let us say, and Mr Edwards: We do take into account very low carbon and there were loads of them on the improvements in average fuel eYciency when we road, we could all sit in the traYc jams and breathe calculate what we think is going to be the revenue freely, but I do not think that is really what the from fuel duty into the future and obviously part of intention of the policy is. The road charging that we that is there is some uncertainty because of the are lookingat is gettingbe tter use of the road and progress towards the Voluntary Agreement Targets spreadingthe use of the roads over a longerperiod which we discussed earlier. We can certainly provide of the day. So the busy times, we spread them over you with information if that would be helpful on larger periods and we actually look at—as has precisely— happened here in London—getting people to use alternative means of transport, as they clearly are Q630 Mrs Ellman: Have you actually made an now. They are either usingthe bus, the Tube, or in estimate, an assessment of what the reduced income some cases they are walkingor cycling. would be? John Healey: Although it is at an early stage, Mr Edwards: Those are factored into our obviously with the feasibility study on any potential calculations, yes. road charging system for the future, the direct answer to your question is that in principle such a system would have the flexibility to allow variable Q631 Mrs Ellman: I think we would interested to charges for time of day, place of use or even types of see that. vehicle. It would depend, I think, on the priority that John Healey: They are factored in. They are you gave in policy terms for encouraging certain published in our budget documents and I will make activity or types of vehicle, the judgments that sure the Committee has the relevant— eventually you might take within that potential framework of a road charge. Q632 Mrs Ellman: So they are identified separately? John Healey: Yes. Q636 Chairman: The Mayor of London did not commit himself, did he, to continue exemptions for Q633 Mrs Ellman: Is it a case for rejoicingor LPG and hybrid vehicles in the longterm? concern if the Department is losingsubstantial John Healey: I do have a problem, Mrs Dunwoody, income because vehicles are more eYcient? Would I am not really able to speak for the Mayor of you be pleased? London and perhaps I should follow everythinghe John Healey: I do not think it is a clear cut or a black says very closely. and white issue. Clearly, more fuel eYcient vehicles are a good thing and something that we would want to encourage and see as a Government. In revenue Q637 Chairman: No, but it does actually fit in with V terms then it is a factor that we would take into what you have just said. He, in e ect, was sayingthat account when you look at the overall picture of he was quite likely to remove concessions which V Government revenues. would presumably have a direct e ect on consumer confidence and produce an immediate response, would it not? Have you not had talks with him about Q634Mrs Ellman: It has been suggested too that low this aspect of flexibility? carbon cars should be exempt from road charging Mr Jamieson: I too, Mrs Dunwoody, cannot speak schemes again as an incentive. Again, would you for the Mayor of London, but it is essentially a think that was a good thing? congestion charge, not a pollution charge, and he John Healey: I have heard the arguments about made the rules as he thought was appropriate. I exemptinglow carbon cars. I think it is important to think to help kick-start some of the cleaner vehicles bear in mind that even with low carbon cars there is (again this is a pump priming exercise), into Central still actually a cost in them usingthe road. There is London, hybrid vehicles or LPG vehicles that are a cost in terms of congestion, there is a cost in terms less pollutingthan the old petrol vehicles, I think was V of the sort of issues that Mr E ord has been a good thing. I think what we are doing is as there concerned about, which is safety in accidents and is a potential for congestion charging to fan out into consequences there. So I think the principal case for other parts of the country, although I do not think it exemptingthem completely is not a strongone Y will happen in the next year or so, we are lookingin because, however fuel e cient and however green Government as to what would be sensible guidance the fuels they use, they nevertheless impose for authorities to use when bringing in a congestion somethingof a degreeof social environmental cost charging scheme so that there was some similarity on us all whenever they are used on the roads. between one another because I think we can all see the diYculties of someone travellingthrough,for Q635 Mrs Ellman: If road charging became very example, a large conurbation, maybe going through widespread that could be a bigincentive, could it one congestion charge area to another and not not, to improve environmental eYciency? understandingthe di Verent rules that apply. So 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

Ev 80 Transport Committee: Evidence

10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards havingconsistent rules, I think, has some advantage to identify those veh icles at the side of the road and to people who travel through wider areas of the be able to stop them. So it is an incremental way of country. actually tacklingthese people.

Q638 Mrs Ellman: So would you see that as a Q640 Mrs Ellman: Do you think all of these things decision that should be taken nationally or perhaps would be accepted by the public or would they be regionally rather than locally? seen as civil liberties issues when you get to Mr Jamieson: I think ultimately that decision would personalised tracking, following individuals, probably have to be taken nationally. We would stoppingthem and questioningthem and the whole have to have some sort of national guidelines. range of things? Because even regionally you can drive within a Mr Jamieson: I think in all these things we do we matter of hours and be in several regions in this have to be very careful of civil liberty issues. The country. So I think we would probably have to have ANPR used by the DVLA do not keep a record of some national view on that. There is no great where people are on the road. If a car is taxed, then pressure on us to do so at the moment because there it is instantly wiped out of the memory of the are not a large number of other schemes being put computer. If the car is not taxed, then we have got forward. the record of that person, where they were, where they were drivingand we have gotthat record. So I think in that instance the only people that need to Q639 Mrs Ellman: Could I turn now to the question worry are the people who are breakingthe law or of uninsured drivers and ask you what you are going people not taxingtheir vehicles. I think there is a to do to improve the situation? At the moment, the wider issue here, but from the correspondence we get average fine for uninsured driving is about £150 and in the Department the vast majority of people are the average cost of the insurance is £450. What plans just very angry about people who do not pay their do you have to change things? tax and they are even angrier about people who drive Mr Jamieson: This is a matter of very considerable uninsured because not only are they a risk to concern to us because we know the uninsured driver everybody on the road, they are also puttingup is very considerably more likely to have a collision premiums by somewhere in the region of £30 to £60 and cause either death or injury to themselves or to a year to cover the fund that covers uninsured somebody else. We are takinga number of measures. driving. So I think the vast majority of the public One thingwe did do last year is we have had would welcome these measures, with the caveat that Professor Greenaway from Nottingham University we are mindful of civil liberties. On the other hand, I who is currently doinga complete review of think the vast majority of people would accept these insurance of vehicles and, in particular, we have things because it drives out the bad drivers and asked him to look at the problem of uninsured rewards the good. driving. I know he has been working very hard in the last few weeks talkingto all those involved and he will be reportingback to us in the next few weeks on Q641 Mr Donohoe: Mr Healey, when hydrogen his findings. We want to look to see how we can take becomes the successful alternative will the Treasury as urgent action as we can to stamp this out. There tax it? are other things that are happening as well; you are John Healey: I think the short answer to that is that probably aware of the initiatives we have taken on it is at such an experimental stage that being able to getting people to pay their road tax. People who do give definitive answers like that is impossible at this not pay their road tax very often are uninsured and point. What we have declared is a determination to if their car is over three years old a lot of them do not support, where appropriate, the development of the have MOT certificates either. On 1 January we hydrogen supply and use for road fuel vehicles. Those are judgments that we will be able to make brought in a penalty system for those people who about the nature and the degree of support that is were identified, not on the road but on the computer, going to be required to help support the birth and as not havingtheir car taxed. I am informed, Mrs growth of such an industry, but not at this stage. It Dunwoody, that 200,000 people have now taxed will need to be closer to the time when we can look their vehicles who probably would not have taxed forward to that sort of innovation. In some ways we their vehicles and that we are probably sendingout are preparingthe groundand learningsome of the somewhere in the region of 90,000 plus notices to lessons in a small way with the small number of people who have either not said their car is oV the hydrogen buses that are in London. Also, I think we road or have not taxed their vehicle since 31 will learn some of the lessons from the experience of December. Of course we pick up uninsured driving tryingto support and seeingthe development of the as well. The other thingthat we are lookingat is LPG as a road fuel gas industry as well. getting the ability—and this will need some primary legislation, we are looking at a potential Road Safety Bill—whereby the police will be able to, at the side Q642 Mr Donohoe: Do you think the oil companies of the road usingANPR technology,be able to themselves are assistingin that as far as movingin scrutinise not just the tax record but also the that direction or do you think that they have got an insurance database of vehicles and they will be able alternative agenda? 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards

John Healey: The oil industry does not have a direct What is the Department doingto safeg uard that interest in seeinga strongdevelopment of the situation? Do you think that there is more that could hydrogen market. be done in terms of bringing in the technology that we are talkingabout? Q643 Chairman: In fact, it has a positive disinterest. Mr Jamieson: Perhaps I could relate the answer John Healey: So I think they would not necessarily more directly to the vehicles rather than to the drink be the industrial sector that you would look to see driving. I think overall the vast and overwhelming that sort of technology developed and introduced majority of youngpeople are very responsible about from. drink driving. We know that because they do not get caught and we know from discussions that they are Q644 Mr Donohoe: Do you have any concerns about an extremely responsible group. What we have is a that fact? minority who are irresponsible and continuingto John Healey: No, I think it is a fact of economic life. drive whilst they have been drinking. One of the things that we are looking at currently and we have Q645 Mr Donohoe: Mr Jamieson, in terms of this got a research project on is having a type of alco-lock inquiry we are talkingof cars of the future, what on a vehicle that you have to blow into and give a kind of car do you see yourself drivingin 15 years? sample of your breath before it will actually start the Mr Jamieson: I hope the car that I drive in 15 years vehicle. We are mainly focusingthis, as the time will be a safe car. It will be fuel eYcient and it Canadians have, on people who have a drink driving will have in it the sort of technology that I would record as a sort of re-education process. I do not need to find a good route. I would also have think it is appropriate for all cars at all times. The available, either in my car or at some place in my Canadians have shown that, used for a period of home or work, should I be workingat that time, Mrs time and the person havingto givefeedback on a Dunwoody, that I had there some device for regular basis to a central point of how often they knowingwhat alternative ways I could travel other have blown into it, how often they have failed, it is a than by car. useful device for re-educatinga person who has got a drink problem. But I think in terms of general technology in a vehicle, because the vast majority of Q646 Mr Donohoe: Do you think you will be driving people are very responsible anyway, I am not sure it a car that is driven by petrol? would be appropriate. Mr Jamieson: I think that the fuels that we see today of petrol and diesel will be still around at that time. If we project a little bit further forward, it is Q649 Mr Donohoe: When are you likely to introduce possible—it is possible, but I do not know the this into the UK, if at all? answer to this—it is possible that we may be seeing Mr Jamieson: We are firstly doinga project to see more and more cars driven by hydrogen on our how it operates in this country, to see if in fact it has roads. got some merits in it and quite clearly there are one or two things that need to be ironed out with it. We Q647 Mr Donohoe: One of the elements that there want to see how it works. We want to look again in are developments around smart cars and the idea more detail at the Canadian experience. If we find that you will get into them and they will take your and we think that this has a road safety benefit for breath, will decree that you are not fit to drive and those people who do have a problem and need re- they will not let you turn the key in the ignition. educating, then we will introduce it, but I think it will What do you see as that as a development in terms be a few years before we actually get round to that of the safety of cars, the passengers and other drivers and we get the full information. It certainly is on the road? somethingthat I want to pursue. Mr Jamieson: I think a number of these things have been developed and I think there will be further Q650 Mr Stringer: I have a worry about the future. safety features built in to vehicles. Each vehicle that I am convinced from the evidence that we have taken I get has more and more safety features and some of that the only question is time, some time in 15, 20, 30 the information features for the driver. I think those years time we will be drivingabout in vehicles that will continue to grow. They will make the driving take the air and they blow out cleaner air. I do not experience safer and they will make it more pleasant think there is any doubt about that and my worry is and it will probably make it more fuel eYcient as not that that will give Mr Healey the opportunity to well. tax fresh air. It is that with that new technology none of it will be owned in this country. I would be Q648 Mr Donohoe: You must be concerned just now interested if that is a worry you have? about the risingtrend in terms of drink driving, Mr Jamieson: That certainly would be a concern of particularly amongst the young? What do you see as mine and as you probably know in the Powering alternatives to the idea of the smart cars to try to Future Vehicles Strategy we set out a number of drive that figure down? Because there was a stage, ambitions and one of those ambitions was that we maybe five, six, seven years ago, where there was no encouraged the industry in the United Kingdom to doubt that youngpeople were not drink driving,but grow and flourish because the thing that we are they are now back in greater numbers, women in really good at in this country, and we probably rank particular, it has to be said, drinkingand driving. with the best in the world, is science and engineering. 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards

We want to make sure that those sort of high skilled Why should a relatively small country in economy jobs and that high skilled technology is actually terms like Canada be ahead of us? Have we missed located in this country. So if it was outside the the boat on this, Minister? country, then I would be very concerned. Mr Jamieson: No, I do not think we have, but I am strongly of the view, because we are quite a large Q651 Mr Stringer: Johnson Matthey, in a memo market, even as an individual country let alone as that they sent to the Committee, said that they did Europe, we are quite a large market for vehicles and not believe that they were getting enough what we have to encourage is the take up of the Government support. The country was behind cleaner technology in this country. Now, because in Germany, Canada, the United States, Japan. We Europe and in this country we have high standards have just heard evidence before you came in from the in terms of reducingemissions and so on, much of Low Carbon Vehicle Partnership sayingthat they the new technology is actually coming in here and it thought we were a long way behind our competitors. is actually spreadingout globallybecause of the What would you comment on that? We seem to be standards set by the European Union. I think the getting further behind. other thingas well is that what we should be doingas Mr Jamieson: A longway behind in what sense? Government is actually settingdown the regulation, the standards and what we expect. I think a lot of the investment has to come from the industry itself Q652 Mr Stringer: In alternative technologies, low because I just do not think the Government is best carbon fuels, but in particular fuel cell technology. placed to second guess the technology of the future. Mr Jamieson: All of the technology we have through the Low Carbon Vehicle Partnership we are working together to make sure that we get all the industry Q655 Chairman: With respect, it was very clear to us, working together to get some of these developments both as we crossed America and as we talked to in this country. I have been very encouraged with the people in the industry, that we are entirely work that is going on. Remember, of course, that dependent in this country on multi-nationals who motor manufacturingis absolutely globaland we take their basic decisions about the automotive have very little control over that. What I want to industry elsewhere. At the moment it is our ability to make sure of is that the new technology is developed come up with new industrial systems, new economic in this country but very important as well, of course, and new engineering systems that is keeping us is that we benefit from that new technology in this ahead of it. That will not continue unless the country. Government puts the same degree of commitment to it. Certainly we will never get to the level that the Japanese put in, but we ought to be at least able to Q653 Mr Stringer: That is avoidingthe question, is compete with some of the other nations. it not? Patentingis national or European. It is done Mr Jamieson: But the Japanese, Mrs Dunwoody, on a national basis. All that is beingput into the that money is comingfrom the private sector and Centre of Automotive Excellence and Development the— is £7.5 million. That is a trivial amount compared to any one of the global motor car manufacturers. So how are we going to keep the level of science and Q656 Chairman: With respect, the Japanese have a technology in this country with those relatively research programme which is one third based by the trivial amounts of money? industry, one third based by the Government and Mr Fendick: You are absolutely right that we cannot one third determined by the scientific and compete with the research and development engineering involvement. We are way behind, but it resource that the motor industry itself brings to bear is very clear, from talkingto our competitors, that at on these issues on a global scale. I think one of the the moment we are hanging on to large numbers of most positive things we can do nationally is to create jobs in this country in the automotive industry the right consumer environment for these because we have expertise and ability and because technologies because we do see, even though the we are capable of producingnew ideas. Unless the industry is global, that they tend to focus their Government gives both the legislative and the activity in those areas where the markets are most economic boost to those services, that will not be the demandingbecause local knowledgeis able to case in ten years time. deliver better performance in that particular market. Mr Jamieson: I think you have identified there, Mrs So the more we can actually create the market for Dunwoody, a challenge to us, not just in this area these vehicles, the more we stand a chance of keeping but across a whole raft of our industry and I think some of the technology and the engineering here to that is a point well made. address it. Q657 Chairman: But this industry employs many Q654Mr Stringer: How are we going to make that hundreds of people today. It is not a new industry. intervention? What are we going to do? Are we going It is an industry that is a worldwide industry which to set up, as was suggested to us on one of the visits we have been astonishingly lucky for a small to the United States, a hydrogen infrastructure? £7.5 population. I am sorry, I did not mean to interrupt, million, with respect, is trivial. It can be swallowed but Mr Stringer is making a point that was made to in any science department of our major universities. us over and over again in the research units and in 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 83

10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards the universities and in the automotive trade in Q659 Mr Stringer: The last question, which relates America. I think we need some indication of the to the first one, is you reject then the Johnson Government’s attitude. Matthey contention that we are fallingbehind our John Healey: Mr Stringer is right and, Mrs competitors and that is because there is lack of Dunwoody, you are right. This is driven largely by Government support? multinationals. The whole process of invention, Mr Jamieson: Yes, I would, but I think there will patenting, manufacturing is international, but there always be scope for more Government support and is relevant support from Government, I think, going every group will ask for that, but I think certainly in beyond the narrow confines of the automotive there is more that we can do and that is why we have industry schemes. We are in the middle now of a set up the structure we have with the Powering record increase in investment from Government in Future Vehicles strategy is to make sure that we bring our university and science base. We are in the middle all the partners together in this country. I think we of a programme that we have not seen in this country are the only country to have done this in the way that before to encourage universities to strengthen their we have and it is impressively workingtogether, links with business in Britain. We have recently both in Government and at the industry level and the introduced a research and development tax credit environment level, people workingtogetherto make that at the moment is worth around half a billion sure we get all the environmental benefits and we get pounds and it is there to support greater commercial the technological benefits as well. R&D and 80% of our commercial R&D in this country goes on in the manufacturing industry of Q660 Ian Lucas: Do you think fuel cell vehicles are which you quite rightly say the automotive industry worth introducing without hydrogen generated is a vital part. So there are broader measures from a renewable source? concerned with, I think, the traditional British Mr Jamieson: In as much as we need the technology strengths of science, innovation and new in the future, we need to get the technology started, development that you are concerned to see the answer to that is yes. The widespread supported that perhaps are not taken into account in introduction of fuel cells will come when we have got a narrow calculation of what can be earmarked the hydrogen produced from renewable means. specifically for the automotive industry and technologies within it. Q661 Ian Lucas: Will we have suYcient capacity to fuel hydrogen vehicles from renewable sources? Q658 Mr Stringer: I accept that Lord Sainsbury has Mr Jamieson: That is a very good question and I helped get more money into certain universities and think we would be lookingfirst, because of the costs into science generally, but I am as worried now as I that there are in actually getting more eYciency into was at the start because, tell me if you think I am transport fuellingand the costs that would be beingunfair, Minister, what you are sayingis “We involved, that probably transport will be near the will let the market look after this. There is more end of the line for that type of eYciency. There will money going into science and we will all be able to be many other areas, for example, in industry and enjoy the benefits of a cleaner atmosphere when the domestic use where the fundingfor the e Yciencies technology and the manufacture has been done will be better used, but I think there will come a point elsewhere”. I would like to know how specifically in the future when we develop more renewable you, as a Government, we as a Government, are means of producingelectricity because hydrogen going to intervene so that that technology is will probably be produced from electricity, although developed in this country and we remain at the it can be produced from biomass as well, but I think cuttingedgeas opposed to just beinga consumer that day will have to come before it is worthwhile. In which is what a market solution means? the meantime, we could be usingand developingthe Mr Jamieson: Firstly, in my travels around the technology for emission purposes in cities, for country visitingsome of the manufacturers, I am getting cleaner air in the cities, but for the CO2 very pleased to see that much of what we are doing benefits we would have to have the hydrogen in this country is at the cuttingedgestill and I think produced without the CO2 disbenefit. will remain so. Some of the engine manufacturers that I visited, some of the work that they are doing Q662 Ian Lucas: Just going back to one of the points would rank with the very, very best in the world and raised by Mr Stringer, can you really envisage a I do not see any reason for that to move out of this situation where we could create a hydrogen country. We are also implementingthe infrastructure within the UK without legislative recommendations of the Automotive Innovation action by the Government? and Growth Team and this will be backed by a £45 Mr Jamieson: No, I think so and again in the million grant and that will improve workforce skills Powering Future Vehicles strategy one of the things through the creation of an automotive academy. So we say is that one of the Government’s I think that there are things that we can do as responsibilities is makingsure that we develop Government, but I think the main thingwe need to infrastructures. What we are not sure of yet is just do is through regulation and setting standards to what form or type that infrastructure would take. It make sure that the things that we want are delivered may be that if we are producingthe hydrogenmainly and where possible we want to make sure that those from electricity, the infrastructure is the electricity things happen in this country as well. cables, the pylons, that will be the main 9699451001 Page Type [E] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards infrastructure for deliveringit out into the country. Q667 Chairman: So you do regard it as a policy- If it is beingproduced centrally we would have to makingvehicle? That is what I am tryingto look at ways of actually transportingit, just as we do establish. with fuels today. The technology has not got to that John Healey: It certainly has a policy makingand stage yet in any country. Once that starts to develop delivery role, but it is— and we see how the infrastructure needs to develop I think at that point, just as we did with LPG, we Q668 Chairman: So is your basic aim to make things would have to look at what Government’s role was more fuel eYcient or are you tryingto reduce toxic in assistingthat infrastructure to be developed. emissions? John Healey: It is a blunt instrument. Q663 Ian Lucas: Will Government’s role be a financial one? Q669 Chairman: I think most of us would agree that Mr Jamieson: It may be, just as we have done with taxes are a fairly blunt instrument. other things, a fiscal incentive. Yes, it could possibly John Healey: But it has the capacity in part to reflect be. It could be in helpingus develop the technology. concerns about— I think we need to go quite a long way down the road first before we see a number of other things Q670 Chairman: It is not a trick question. I am just happening, before we are actually crossing that tryingto work out which particular aspect the bridge, but certainly in our strategy the Government Treasury is tryingto develop. must have a role in terms of developingthe Mr Jamieson: If it is any help, Mrs Dunwoody, I infrastructure. think—

Q664Ian Lucas: Would you see it as beingthe role Q671 Chairman: No, let him stagger on on his own of the Treasury to try to bringabout the day when for the moment. I know your more instinctive ability we provide the hydrogen from renewable sources to teach is fine, so just let us find out what our earlier? Is it somethingthat you want to encourage Treasury colleague has to say about Treasury policy. through incentives in the Treasury? John Healey: We have used it to encourage the John Healey: The Treasury, as part of Government universal switch to ultra-low sulphur fuels with the as a whole, is already puttinga greatdeal of support specific environmental gains that come from that. behind the drive to support greater renewable We are usingit to try and encouragea similar electricity production. We have clearly got a role to universal switch this year to sulphur-free fuels with play in that and we will have a role to play in the the environmental gains that come from that. So it future in the way that you are envisaging. has clearly a policy purpose alongside a revenue raisingpurpose as well, which is significanttoo. Mr Jamieson: We have an interest in revenue being Q665 Chairman: What is the purpose of fuel duty? raised because we like to spend it on things like rail John Healey: The purpose of fuel duty, first of all and buses and so on, but we see— and principally, is to make a contribution to the public purse, to Government revenues, and it did so Q672 Chairman: Yes, we notice you are not putting last year at about £22 billion. the same amount into researchingtrains. Mr Jamieson: We see the fuel duty as beingused to Q666 Chairman: So you could not tell us how you actually encourage certain activity and to encourage decide what particular aspects of encouragement, of the take up of cleaner fuels. It has actually been a fiscal incentives, you would seek to encourage by the very useful mechanism for that. So perhaps the use of fuel duty? To you it is just a means of making emphasis is stronger on that in my Department than money, it is not somethingthat is necessarily it would be in the Treasury, although I have to say thought of in relation—I am sure none of us think it the Treasury have been very good and the work we is wrongif Treasuries want to make money, nor is it have done together has been most positive. The entirely new. other area that is less of a blunt instrument, of John Healey: No, it is not simply that. It is a very course, is the company car tax, which is quite a well- important source of revenue for us all, but beyond refined instrument. 25% of cars that are purchased in that it is a form of duty, a form of taxation, that is this country are under the company car tax scheme, targeted or directed, if you like, more to usage than which has been very eVective in getting people to ownership in the case of fuel vehicles. So it in part focus their minds on cleaner vehicles. therefore reflects a degree of the congestion or pollution consequences and costs that vehicle use Q673 Miss McIntosh: We heard from Mr Stringer has on the roads in the UK. Within that we have and Mr EVord about the use of in-vehicle satellite been able to use quite modest diVerentials in duty to instruments and intelligent instruments in cars. Are trigger the industry to lead very significant shifts in you aware, Minister, that one of the largest supply. I am thinking, for instance, here of the insurance firms in the country refused to apply switch to ultra-low sulphur fuels a couple of years insurance cover for the use of those vehicles, the ago and the 0.5p diVerential that we aim to introduce implication beingthat if you are usingthat vehicle and see a shift to sulphur free fuels this year as well. and it leads to a crash you are not covered by 9699451001 Page Type [O] 11-07-05 22:03:50 Pag Table: COENEW PPSysB Unit: PAG1

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10 March 2004 Mr David Jamieson MP, Mr Malcolm Fendick, Mr Eric Sampson, John Healey MP and Mr Dan Edwards insurance? Does this not disturb you in all we have Mr Jamieson: I am reliably informed it is not heard taken evidence this afternoon on the future of allowed. cars and intelligent vehicles? Mr Stevenson: My question, Mrs Dunwoody, was; Mr Jamieson: I had not heard that and I am glad you in terms of basic approach to this whole issue of have told me that because that would disturb me vehicles of the future, vehicle usage, vehicle because obviously in-car information must not purchasingand so on, and the fiscal influence one distract the driver, it must actually help the driver way or the other that can be brought to bear there, and provide a safer journey for them. I will certainly is there any consideration beinggivento possibly a look at that and I daresay that might be something pretty radical change of approach to one of taxing that Professor Greenaway may be tellingus about in the use of vehicles rather than the purchase of them? the next few weeks. I certainly would not want any of these new systems to create a less safe vehicle and Q676 Chairman: Do we see an unexpected touch of of course the insurance companies do work these radicalism in the present Government, Ministers? things out. They are clever people and they work Mr Jamieson: As you know, Mrs Dunwoody, last them out on the level of risk, but I would hope that year we initiated the Road User Charging Study, and any telematic system did not actually increase risk. as yet we do not know what is going to come out of The idea is it reduces risk. that, but in the medium to very longterm we could Mr Marsden: What proportion of ministerial cars is look at systems that actually charge people for what actually run on alternative fuels? Secondly, what they use, how much use they make, where they use proportion of all vehicles across Government is run and at certain times of the day when they are using on alternative clean fuels? vehicles, so yes.

Q674Chairman: You may give us a note on that, Q677 Mr Stevenson: Possible shift of the burden? unless you have that in your . . . Mr Jamieson: That is certainly a bigchange. Mr Jamieson: The annual report we did on this reported that 9% of Government vehicles are alternatively fuelled. We set ourselves a target of Q678 Chairman: Mr Healey, do you foresee this having10% by 2006, so we are nearly there. I have interestingdevelopment? to say, we have met on this and we do constantly put John Healey: Mrs Dunwoody, there has indeed been pressure on our colleagues. There are some areas a small shift in the relative tax burden between where it is quite diYcult to find the alternative vehicle usage and ownership from ownership to vehicles for certain uses, but clearly for cars and usage since 1997. I have explained that fuel duty is in other vehicles then we should be encouraging the use fact principally a tax on usage but any road charging of bio-fuels and of alternatively fuelled vehicles. system, were we to bringthat in more generally, John Healey: In the Department I am responsible for would have the capacity to be a quite sophisticated directly as Customs Minister, it is around 8% for and much more sensitive instrument for levyingand ours, but we are confident of hittingMr Jamieson’s reflectingthe costs of usagemuch more directly than target. we are able to within the charging fiscal system that Mr Jamieson: Can I say as well, my own ministerial we have at present. car, Limousine as it is often referred to by the Press, is a small Toyota Prius which is seriously fuel Q679 Chairman: Gentlemen, you have all been very eYcient. helpful and we are very grateful to you. Doubtless, we shall wish to talk to you again and I am sure that Q675 Mr Stevenson: I am tempted to ask, with all your future doings will be deeply informed by our permission, whether the Government received a report when it comes out. grant from the Energy Saving Trust, but I will not Mr Jamieson: It certainly will be, Mrs Dunwoody. ask that. Perhaps it is somethingthat . . . Thank you very much. 909819PAG1 Page Type [SE] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by Zeta Controls Ltd (CAR 01)

CARS OF THE FUTURE I am writingin response to your request for written evidence for “cars for t he future”.

What fuels will be used to drive the vehicles of the future? It is our belief that cars will become much more hybrid in nature. ie that future power sources will combine to provide the necessary “power requirements” For example: — Battery power — Fuel Cells — Solar — More eYcient diesel or petrol for instant power or when other power has been drained.

To what extent will they solve environmental problems? Most processed fuels create pollution. It will be important to address the issue of cleaningthis pollution and processingit. It is easier to treat and solve pollution if it is created centrally, rather than attemptingto clean each individual pollutant. This is more easily achievable with fuel cell technology.

How successful have Government grant and tax break initiatives been to date? We can only comment in terms of the grants achieved by our company. This has been through the SMART scheme, which has been excellent. R&D tax breaks are also a very positive step to assist with Innovative development. The problem with small company innovation is the length of time it takes to recover R&D, most projects need to be “in the market” within 18 months to two years to start generating a return. Highly innovative projects such as developing a “car for the future” would require a high degree of development, hence a longperiod between investment and return.

What does the Government need to do to make it happen? The SMART scheme is a good way to assist with innovative ideas. With highly innovative developments such as the ones required here, progress would be faster and better achieved with project groups working together, combining expertise and resources. But would need to be centrally funded. For example, we would like to see work combiningbetween Universities, sup pliers and consultants with a common aim and a well defined project brief. I have personally attempted to set up such a scheme to develop a “power-train for the future car” with Oxford Brookes, Reading University and some suppliers of high technology products such as high eYciency electric motors and solar solutions. All discussion starts oV with great enthusiasm, as all parties can see enjoyment and challenges from the concept, however at the end of the day all parties want funding, a small company such as Zeta cannot provide the level required to support such a programme. A SMART award may be relevant, but as the project may not actually develop an end product which is commercially realisable, we have been reluctant to apply. We at Zeta have experience and expertise with electronic engine control, solar power, motor control and would welcome the opportunity to combine our expertise with other groups to develop control systems combiningthe above fuel technologieso Veringa highlye Ycient power train of the future. Philip Shadbolt Zeta Controls Ltd October 2003

Memorandum by the Campaign to Protect Rural England (CAR 02)

CARS OF THE FUTURE I am writingto submit CPRE’s comments in relation to your inquiry into Cars of the Future. We do not have a particular expertise on clean vehicle technology or safety design and are not in a position, therefore, to comment in detail on the issues set out in the Terms of the Reference. We have an interest, however, in ensuringthat a wide rangeof adverse e Vects from traYc are eVectively addressed by appropriate policy measures. These eVects can be summarised as: 9098191002 Page Type [O] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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— community severance as a result of high volumes of traYc; — land take from road infrastructure and parkingwhich in turn bringspress ure for additional development; — reduced transport choices (in particular walkingand cycling)as a conse quence of intimidation by speedingtra Yc; — noise intrusion (see for example CPRE’s Tranquil Area maps, enclosed); and — damage to the character of the countryside caused by the dominance of vehicles, the accompanying clutter, and inappropriate lighting. These are in addition to the obvious negative eVects of traYc on strategies to tackle climate change, air pollution, and casualty reduction. Some of the above eVects are caused due to the physical presence of vehicles and therefore technology will only be able to improve the situation to a limited extent in some areas. In other areas, changes in fuel eYciencies may have diVerent (and potentially conflicting) eVects on policy objectives.

For example, improved fuel eYciency may help reduce CO2 emissions from individual vehicles per km, but actually distort price signals to the extent that emissions savings areoVset by overall increases in average distances travelled and volumes of traYc. The Department for Transport’s document, Ten Year Transport Plan 2000: Background Analysis highlights that a 30% reduction in the cost of motoringover the next 10 years has been assumed, with 20% of that beingachieved throughfuel e Yciency. This is an important contributory factor to the underlyingincreases in tra Yc levels envisaged by the plan. CPRE believes that these factors highlight the need to examine the potential to improve vehicle eYciency (ie average occupancy rates and promotingcar clubs) rather than just fuel e Yciency. Above all, policy also needs to seek to reduce the overall need to travel in the first place through eVective land use planningand transport policies and proposals. While CPRE believes that the cars of the future should utilise better technology to reduce environmental impacts and improve safety, we hope the Committee will recognise the limitations of this approach and the need for Government policy to embrace wider impacts, includingthe need fo r traYc reduction. Paul Hamblin Head of Policy (Transport and Natural Resources) September 2003

Memorandum by Johnson Matthey Fuel Cells (CAR 03)

CARS OF THE FUTURE

Overview 1.1 Johnson Matthey welcomes the Transport Committee’s Inquiry into “Cars of the Future” and the opportunity to submit this memorandum of evidence. 1.2 The Johnson Matthey Catalysts division is a world leader in the development and manufacture of autocatalysts and pollution control systems, as well as catalysts and components for fuel cells. The Johnson Matthey group has three other global divisions devoted to Precious Metals, Colours & Coatings and Pharmaceutical Materials (see: www.matthey.com for further corporate information) but fuel cells provide the main focus for this memorandum. Fuel cell technology provides an attractive option for vehicle power that could bringsignificantenvironmental and social benefits and is a key c omponent in the development of the hydrogen economy. 1.3 Dr Jonathan Frost, Director of Johnson Matthey Fuel Cells is Chairman of the newly formed, industry led Environmental Innovation Advisory Group advisingDTI and De fra; is a board member of the Low Carbon Vehicle Partnership and is a board member of Fuel Cells UK. Johnson Matthey is also represented on the steering group of the London Hydrogen Partnership and the shadow steeringgroupof the London Energy Partnership. Ian Stephenson, Johnson Matthey Director, Environment, Health and Safety, is Deputy Director of the Carbon Trust and Robert Evans is Chairman of the Low Carbon Vehicle Partnership SteeringGroup. 1.4 Governments are increasingly recognising the importance of fuel cell technology and aggressive investment programmes have been launched elsewhere, notably in Japan and the United States. It is Johnson Matthey’s view that if the UK Government fully recognises and grasps the present opportunity to facilitate a more rapid uptake of fuel cell technology, it will bring forward the associated environmental benefits and catalyse similar environmental improvements globally while ensuringthat the UK economy profits from the growth of a new industry. 1.5 The memorandum particularly addresses the Committee’s questions on Clean Vehicle Technology, with some observations on safety issues raised by this technology and the influence the UK Government can bringto bear on the globalcar market. 9098191003 Page Type [E] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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Progress Made on Low Emission Technology 2.1 The Committee notes in the call for evidence to the Inquiry that zero emission vehicles have been slow to materialise. This is true, but the Committee should note the progress already made through catalytic emissions control (in which Johnson Matthey has played a significant part). We recognise that this has been partly oVset by the continued growth in vehicle miles travelled and that there is a particular need for the lowest possible emission vehicles in urban areas. 2.2 The Committee will be aware that in the UK the Government sponsored body Fuel Cells UK has been tasked with representingfuel cell interests and with actingas a focu s for Government and Industry action. British industry has made considerable investment in fuel cell technologies. (Johnson Matthey Fuel Cells has opened a manufacturingfacility in Swindon to produce membrane e lectrode assemblies—a key component of the fuel cell.) 2.3 Progress has been made in the development of the necessary technology, in undertaking demonstrations and trials and in the development of lower cost manufacturingand production processes. There have already been a number of fuel cell demonstration projects—these will include the launch of two fuel cell buses on routes in London in late 2003. The Low Carbon Vehicle Partnership is tacklingthe eponymous issue at national level and the Mayor of London’s initiative, the London Hydrogen Partnership, brings stakeholders, manufacturers and government together at a significant regional level. 2.4 The first generation of fuel cell vehicles are with customers now and it is estimated that more than 300 are in use around the world. Fuel Cells UK predicts that by the end of 2023 it is possible that there will be significant fuel cell penetration of the passenger car market. 2.5 Johnson Matthey predictions for the growth of all types of fuel cell markets are shown below:

2002 2005 2011 Units kW Units kW Units kW Portable '1,000 10-25 5k-10k 2.5k-50k 100k-500k 50k-250k Premium '1,000 1k-6k 500-7k 100k-1.4m 10k-100k 2m-20m Residential '1,000 250-500 5k-25k 25k-1.3m 800k-1m 4m-5m Cars '1,000 750-3.7k 1k-5k 75k-375k 200k-500k 15m-37.5m

What fuels will be used to drive the vehicles of the future?

3.1 A number of diVerent fuels are used in current fuel cell technologies including natural gas, methanol and hydrogen. Each fuel option brings with it diVerent considerations for distribution, generation, environmental impact, economic feasibility, fuel security, fuel cell performance characteristics and safety. 3.2 Current research suggests that hydrogen as a fuel may give the best combination of results to these multiple considerations, particularly since in the longer term it may be generated in significant quantities from renewable sources. The characteristics of a hydrogen fuel cell are well suited to applications in vehicles. The introduction of such vehicles will signal a fundamental move away from a carbon-based and towards a hydrogen-based economy, which will have a profoundly beneficial eVect on local and national environmental quality.

Environmental impact of fuel cell vehicle solutions

4.2 The fuel cell vehicle has a number of significant environmental benefits. In particular, fuel cell vehicles—typically powered by hydrogen and generating water as the only waste product—will allow vast improvements in local air quality and huge reductions in carbon dioxide emissions with the associated benefits to climate change. 4.3 By takingaction to stimulate the uptake of fuel cells now these benefits can be brought forward. The cost of early adoption of such initiatives is likely to be more than recouped by the extra environmental benefits and associated savings achieved.

Reducing carbon dioxide emissions

4.4 Climate change is one of the most significant global environmental challenges. As part of the global response the UK government has made commitments to cut carbon dioxide emissions. There is clear consensus that the widespread introduction of fuel cells for transport has huge potential for reducing CO2 emissions. 9098191003 Page Type [O] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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4.5 Even substantial reductions in UK CO2 emissions will have only a minor impact on global emissions. But it is an observable fact that initiatives in one country often cause competitive responses in others. By bringing forward the use of fuel cells in the UK and improving and demonstratingthe technologyand its benefits, UK technology and experience would be leveraged to reduce CO2 emissions worldwide. 4.6 UK leadership in fuel cell technology and services enables us to export these to other countries, exportingin a real sense the CO 2 savings as well.

Improving urban air quality 4.7 The UK is facing significant challenges to improve urban air quality. The combination of high population density and a high concentration of pollution sources causes a disproportionate impact on health and results in a huge cost of healthcare for those aVected. 4.8 In the UK, as in other industrialised nations, motor vehicle exhaust emissions cause more air pollution than any other form of human activity. Vehicles account for nearly half of all emissions of oxides of nitrogen, two-thirds of carbon monoxide, as much as half of all hydrocarbon emissions and most of the particulate emissions in cities. The UK government has set air quality targets for local authorities; however, continuingproblems with congestionin urban areas have meant that these a re diYcult to meet. The uptake of fuel cells in vehicles will provide relief from this problem since fuel cells can be emission free at point of use. By takinga leadingrole in the uptake of fuel cell technologyin vehicl es, particularly in urban areas, the UK can bringforward these expected benefits, improvingurban air quality a nd relievingthe burden on the health service.

How successful have Government grant and tax break initiatives been to date? 5.1 Johnson Matthey can point to incentives to introduce unleaded petrol, ULSD and Transport Energy fundingfor diesel particulate filters as successful Government grantand tax break initiatives to date. 5.2 There are a number of potential pathways for the commercialization of fuel cells in vehicles. One of the most widely accepted is the commercialization of fuel cells through other niche applications which are less cost sensitive and will allow a gradual reduction in cost through the economies of scale of increased volumes. 5.3 One of the key applications identified has been the use of fuel cells in micro combined heat and power (CHP) units for distributed power generation. The government has invested in initiatives to improve the uptake of CHP however the implementation of the new energy trading arrangements (NETA) has lead to a reduction in the uptake of CHP. The UK government needs to take steps to address this issue. 5.4 The likely pathway for Fuel Cell commercialization is demonstrated in the graphic below:

Prototypes

Premium Cost Commercial

Houses Cars

Volume (and time)

5.5 Current levels of government funding and investment in fuel cells in the UK is significantly behind other countries, notably Canada, Germany, the United States and Japan. For example, German industry and government operate several hundred more fuel cells and support three times as many jobs as the UK. Similarly, the Canadian fuel cell industry supports twice the number of jobs compared to the UK. Without increased levels of UK government investment in research and development, demonstration projects and incentives for component manufactures the UK runs the risk of fallingsign ificantly behind in the development of a fuel cell industry and missingout on the associated econo mic benefits. 9098191003 Page Type [E] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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5.6 Experience in Canada has clearly shown that with strongsupport from go vernment it is possible to encourage the growth of a fuel cell industry over a relatively short space of time. It is not too late for the UK to catch up and take a leadingrole in the world fuel cell industry or, at th e very least, as a European centre for fuel cells. 5.7 The UK Government has also taken initiatives to develop the market for other vehicle fuels. For example, the UK currently subsidises the use of LPG for cars at a cost of £50 million per annum.; this buys virtually no benefits for CO2 or other emissions, now or in the future. If an equivalent £50 million were spent intelligently today (eg through fast-track fuel cell technology development and deployment) it could stimulate UK participation and understanding, and bring forward the large-scale introduction of fuel cells. This, in turn, could accelerate eVorts to reduce CO2 emissions.

What does the Government need to do to make it happen? 6.1 As discussed above, the likely pathway for fuel cell commercialisation is though the application of fuel cells in smaller niche markets leadingto the widespread use of fuel ce lls in vehicles. It is important for the UK Government to take action to stimulate these markets. 6.2 Takingthe example of microCHP, a number of key policy measures and econ omic instruments would greatly assist the introduction of fuel cells: — Continued financial support for demonstrations. We suggest that further demonstrations are required to develop the technology, infrastructure, and supply base. — A technology “kick-start” in the form of uptake grants for fuel cell systems. This will accelerate market transformation and get volumes to suYcient levels for manufacturingcosts to fall. An alternative (or additional instrument) could be in the shape of enhancements to the energy eYciency commitment (EEC) as emphasised in the Energy White paper. — Reducingthe level of VAT applied to the purchase of energye Ycient technology. Domestic customers currently pay 5% VAT on the energy used but 17.5% VAT on energy savingdevices, thereby discouraging energy eYciency. We suggest 5% should be applied to all. — Enhanced capital allowances in the social housingsector. This would ope n up the leasingmarket in social housingconsiderably. The introduction of this measure would crea te demand for additional installations and not displace an existingrevenue source. — Targets for the implementation of micro CHP. At present there is no long-term policy framework to encourage the implementation of microCHP. Targets may not have much credibility in themselves, but they would be a first step guiding longer-term policy. 6.3 The PoweringFuture Vehicles strategypublished in 2002 contained a nu mber of targets for Low Carbon Vehicles. Johnson Matthey’s view at the time was that these targets were insuYciently challenging to promote real innovation in the sector and, lackingany supportingpolic y framework, they would not serve to promote the UK as the leadinglocation to demonstrate, develop and imple ment low carbon vehicle technologies. The slow progress towards low carbon vehicles in the UK noted by the Committee, in our view, supports our position. We believe that the targets should have referred to targets for ultra low or zero carbon vehicles and that there should be a credible set of measures to ensure that the targets would be met.

Safety implications for fuel cell vehicles 7.1 The development of a hydrogen fuelled transport network creates important safety considerations. It will be necessary to examine the fuel distribution system and onboard fuel storage to ensure that appropriate safety standards are met. 7.2 The UK should encourage early agreement of international standards on safety to ensure that consumer confidence in fuel cell safety is established and that the safety standards can be demonstrated and tested.

Government influence in the global car market 8.1 The opportunity exists for the UK to build a sizeable industry centred on fuel cells and the hydrogen economy and coveringall stagesof the value and supply chain. Past experie nce has clearly demonstrated that industry participants tend to “cluster”, preferringto be located ne ar customers/suppliers, and have an experienced labour pool and infrastructure to draw upon. 8.2 However, they need to be encouraged to do so through financial and fiscal incentives. The benefits of establishing such a regional hub would be to encourage inward investment from large system integrators and car manufacturers with the resultingsignificantbenefits to employmen t. 8.3 Johnson Matthey believe that by takinga strongposition on the introdu ction of fuel cells, the UK is well placed to provide genuine leadership in a way that complements and serves its own best interests. 9098191003 Page Type [O] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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In conclusion 9.1 Johnson Matthey would be pleased to expand on this memorandum in oral evidence. 9.2 The Committee may also find it useful to examine aspects of fuel technology development and manufacture on site at the Technology Centre at Sonning Common, near Reading. Johnson Matthey will be extendinga formal invitation to the Committee to visit in due course. October 2003

Memorandum by the Retail Motor Industry Federation (RMI) (CAR 04)

CARS OF THE FUTURE The Retail Motor Industry Federation (RMI) represents the interests of retail businesses within the automotive industry, one of the largest industrial sectors in the UK, employing600,000 individuals. With 10,000 member companies spanning petrol retailers, small garages, medium-sized businesses and large groups, the RMI is one of the UK’s biggest trade bodies. As the RMI represents motor retailers, we would like the points we raise to bringa necessary focus on the future workforce responsible for maintainingthe aftercare of the UK’ s proposed “Cars of the Future”. Consumers need value for money As a general retailing point, “cleaner”, “greener” and “high tech” cars will only sell when the customer sees value for money. Also, it is highly important for consumers to be reassured that independent service and repair facilities will be able to cope adequately with any problems that they may encounter with their vehicles. Independents need up-to-date technical information Bearingin mind the g reat strides taken and still to be taken regarding car design/technology, and in the light of the new Block Exemption regulation which came into eVect on 1 October (which now opens up the after-sales and service market), those independent repairers wantingto gain“approved repairer” status from manufacturers —and therefore investingin the correct diagnostic equipment, software and training—need to have access to the sort of technical information from them that is routinely supplied to franchised dealers. To date, the information has been thin on the ground and only a few manufacturers have published their criteria. The many independents keen to begin taking advantage of possible new business opportunities still have no clear route to the information they need. In the long-term, this could well have an eVect on consumers—they may avoid buyingnewer, higher specification models if they anticipate that their local garages may not be “up to scratch” when dealingwith particular problems. The industry needs a solid recruitment and trainingbase for the future The RMI believes that no proper examination of “Cars of the Future” can take place without an appreciation of the problems that the service sector faces. Put simply, any investigation into future vehicle requirements and trends must necessarily entail a hard look at recruitment and trainingwithin the industry. “Up to the minu te” vehicles require skilled and informed staV. Last year, the RMI’s “Pay Guide” survey discovered that technician recruitment is in crisis. Across the industry, 69% of franchised dealerships and 49% of independents are reportingproblems, with the majority of reports concerningproductive service and bodyshop sta V. Youngpeople are simply not beingdrawn towards the industry—its outdated imageof being“low tech” an d “dirty” needs to be reversed. There are tremendous opportunities for the right people, and the RMI, through its training division, ReMIT, is trailblazingthe way towards increasingawareness that many car eer paths exist within the retail motor industry sector. If the motor industry does not put its house in order with regard to recruitment and training, then it will be faced with the serious problem of a dwindling and severely underdeveloped workforce.

Clean Vehicle Technology

What fuels will be used to drive the vehicles of the future? For the next 15–20 years, petrol and diesel—as we know them today—will continue to be used, except that they will become much more environmentally friendly as they become “cleaner.” Within five to seven years, both petrol and diesel will become as clean to burn as LPG. Meanwhile biofuel technology will advance, savingvaluable hydrocarbon reserves for future generations. Gradually, perhaps as we approach the tenth year, hybrid fuel cell vehicles will emerge, using hydrogen as the power provider, although many hurdles have yet to be overcome before it will be used as the solus source to drive our vehicles—we are at least 15–20 years away from its availability on UK forecourts.

To what extent will they solve environmental problems? As pure water will emerge from exhaust tail pipes when hydrogen is the fuel beingused to drive our vehicles, a considerable step will have been taken to address the environmental issue. However, the energy source used to create stocks of hydrogen is critical, as only nuclear-generated supplies will be free of pollutants. 9098191004 Page Type [E] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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How successful have Government grant and tax break initiatives been to date? Government policy has generated long overdue enthusiasm to develop and introduce more environmentally friendly fuels faster. They have therefore been eVective, yet not perfect, in meetingthe diVeringdemands of the energysector.

What does the Government need to do to make it happen? In the years ahead, it must aim to provide a consistent package of tax-based incentives to drive the Research and Development programmes, while similarly setting ambitious targets for compliance with government environmental programmes. The RMI would be happy to provide further information if necessary. Mr Matthew Carrington RMI Chief Executive October 2003

Memorandum by Stephen Plowden (CAR 05)

CARS OF THE FUTURE 1. Cars should be designed to reduce the costs they impose on society to the minimum consistent with the performance of their function. At present, these costs are quite unnecessarily heavy. This is not because of inadequate technology. Technological advances would help further, but it has been possible for years to make cars that would cause only a fraction of their present costs. But it is pointless to blame manufacturers for not doingso. They have to please their customers, not society at large. A manufacturer who sacrificed customer appeal for the sake of wider social gains would soon be out of business. It is the job of national governments and the EU to set a regulatory and fiscal framework to ensure that manufacturers can compete for custom only in ways that respect the environment and the interests of third parties. 2. All-distance cars should be redesigned and there is also a need for a new, legally distinct, category of car designed for local travel. This note deals briefly with both these subjects.

All-distance cars 3. All-distance cars should provide similar standards of comfort as at present. They should be able to cruise comfortably at or near the national speed limit. The restrictions on their weight (see below) should be flexible enough to allow for some choice of styles and some luxury features. Subject to these constraints, cars should be designed so as to minimise fuel consumption, air pollution and the consumption of non- renewable materials in their construction, use, servicingand ultimate d isposal, and also to minimise danger and noise when driven, especially danger to vulnerable road users. They should be fitted with variable speed limiters to ensure compliance with the speed limit on roads where it was lower than the national limit. In these notes, the term “ecological cars” is used to refer to all-distance cars designed in accordance with these principles. 4. The features of a car that it is most important to control in order to minimise social costs are top speed, acceleration and weight. Ironically, although there have been Construction and Use regulations since the early days of motoring, these three features have never been regulated. The top speed that ecological cars would be permitted is governed by the requirement that they must be able to cruise comfortably at or near the national speed limit. This limit should certainly be lower than at present, probably no higher than 55mph, the former limit in the United States. Cars designed to cruise comfortably at no more than 55mph would consume less fuel and produce fewer emissions than cars designed to cruise comfortably at 70mph. This would be true not only when they were beingdriven on motorways and othe r high-speed roads, but in towns or on low-speed rural roads as well. 5. Except perhaps for some concept cars, no cars now beingbuilt fully quali fy as ecological cars. Nevertheless, some existingproduction cars provide some guideto what co uld be achieved. The VW Lupo 3L TDI is now on sale on the Continent though not in Britain. In the summer of 2001, it achieved an average fuel consumption of 114.8 mpgon a 3,500-mile tour of Britain. Impressive t hough this figure is, it could certainly be improved. The Lupo’s top speed is 103 mph; it can accelerate from 0 to 62 mph in 14.5 seconds and it weighs 854 kilograms. These parameters are all much higher than they would be for an ecological car of the same carryingcapacity. Even if the national speed limit were to rema in at 70 mph, the top speed could be reduced by some 30 mph, there is no need for such fast acceleration and the car could be made much lighter. The Renault Vesta, a car produced in the 1980s with some financial aid from the French government, weighed less than 500kg and had a top speed of 75 mph. It achieved 145 mpg in a test run from Bordeaux to Paris. 6. There are various reasons why ecological cars are unlikely to attract many customers in the present car market. On an empty road, the time savings that can be achieved by being able to accelerate from 0 to 60 mph in eight or 10 seconds rather than twenty are trivial, but in traYc the car with fast acceleration has 9098191005 Page Type [O] 11-07-05 23:33:35 Pag Table: COENEW PPSysB Unit: PAG1

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a competitive advantage over others. If two light cars moving at a given speed are involved in a crash, the risk of injury is less than with two heavy cars movingat that speed. However , if a heavy car is involved in a crash with a light car, the risk of injury is much higher for the occupants of the light car. The situation is not unlike an arms race. So longas manufacturers are allowed to make heavy c ars and cars with a high acceleration, it makes sense for individual motorists to buy them, even though by doing so they make the overall situation worse. Nor do people choose what car to buy only by functional criteria. Many people are more influenced by status and display, a likingof speed for its own sake and a ll sorts of other psychological urges. Perhaps such feelings have to find an outlet somewhere, but it should not be on the public highway.

7. In principle, ensuringthat all-distance cars are built as ecologicalc ars is a matter for regulation rather than taxation. To allow people to buy a car more dangerous, polluting or noisy than its function requires by payingextra for it would be equivalent to sellinga licence to endangera nd pollute. Manufacturers are obliged to make cars with proper exhausts and silencers and owners are obliged to maintain them in a satisfactory state. No one is permitted to buy their way out of these obligations. The ecological car is a natural and longoverdue development of such rules. 8. In the longer term, the only role for taxation with respect to vehicle design should be as a supplement to regulation. Where the rules permitted some flexibility, taxation could be used to encourage people to choose in ways that minimised the permitted nuisance. For example, the weight limits of ecological cars would vary by categories defined by the car’s carrying capacity. The limit would be expressed as a range, rather than as a single figure, so as to allow people who wanted some luxury feature to have it, even though the extra weight would mean that the car consumed more fuel and was responsible for more emissions and risk than was strictly necessary. But heavier cars would be taxed more highly than lighter ones so as to discourage that choice. In the short term, taxation can be a very useful interim measure, pavingthe way for future regulation.

9. In Europe, the responsibility for vehicle regulation has now passed almost entirely from national governments to the European Commission. Unfortunately, the Commission is not tacklingthis task with the necessary boldness. Its timidity is especially disappointingsince t he need to change road vehicles was recognised at the highest European level a decade and more ago. In 1991, the European Conference of Ministers of Transport (ECMT) passed a resolution in favour of reducingth e power and performance ratings of all categories of motor vehicles in the interests of road safety, environmental protection and energy conservation. In 1993, the ECMT said that the task of addressingthe issues of reducingthe specific power, performance and speed of vehicles should begin immediately. The Commission’s eVorts at redirecting transport policy to incorporate environmental objectives were considered to be very feeble1.

10. The European Commission can be influenced by national governments. Unfortunately, the British government has been one of those holding up progress on vehicle regulation rather than one of those pressing for it. The British government should change its stance and join the progressive governments, led by the Dutch, that are campaigning in Brussels for more eVective regulations on vehicle design. Meanwhile, since vehicle taxation still is the responsibility of national governments, the British government should exploit that instrument as fully as possible. VAT and VED should be reduced for ecological cars, or for those cars now on the market that come closest to ecological status. Tax concessions on company cars should be given only to ecological or quasi-ecological cars.

The local car

11. One of the attractive features of the car is its ability to perform journeys of diVerent lengths. But not everyone needs this versatility. Some actual and would-be car owners need a car only for local travel. A car specifically designed for local use should serve them better than an all-distance car. Some other people, most of whose car travel is local, but who also use the car for a certain amount of longer journeys, would also, in the right circumstances, prefer to own a local rather than an all-distance car. (For some foreign experience, see paragraph 20 below and footnote 3.)

12. The substitution of local for all-distance cars would be in the general community interest. A well- designed local car should cause fewer costs per mile driven than even the most ecological of all-distance cars. Swappingan all-distance car for a local car would also changetravel behav iour. On some occasions, people would choose to hire an all-distance car for the journey that they would have made in their own car, with no eVect on the volume of traYc. But they could also choose to go by public transport, substitute a shorter for a longer car journey or forgo some journeys altogether. The consequent reduction in car miles driven would reduce congestion as well as all the other nuisances of traYc, which would be to the advantage of those people who really do need to travel longdistances by car. Because con gestion and the other nuisances of traYc would be reduced, the case for roadbuilding, not very strong even now, would also be weakened.

1 DfT. 2003. Road Casualties Great Britain 2002: Annual Report. DfT: London. 9098191005 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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13. The local car would have a low top speed2 and would be built to the most stringent “green” standards. It would not necessarily be small, since some people who needed a car only for local purposes would nevertheless need one with a large carrying capacity. In practice, however, most local cars probably would be small. The local car would have its own driver-licensingand vehicle-li censingregime.It would not be allowed on motorways. 14. The local car should be cheaper both to buy and run than an all-distance car with the same carrying capacity. This natural advantage could be increased by fiscal policy. VAT and VED could be lower for local cars than for all-distance cars, and if road pricingis introduced, local c ars could be exempt from it. 15. It would be easier to obtain a drivinglicence for a local car than for an a ll-distance car. Some parts of the drivingtest for an all-distance car mightbe waived or relaxed for a l ocal car, but probably more could be gained by tightening up the requirements for a licence to drive an all-distance car. The test itself could be made harder, in particular by the inclusion of some motorway driving. The conditions even to apply for a licence for an all-distance car or for a motorcycle might be made more stringent, perhaps by raising the age limit, perhaps by introducing a condition that candidates would have to have held a licence for a local car or a moped for a certain length of time, with a clean record, before they could take the test for an all- distance car or a motorcycle. It could also be made much easier to lose a licence to drive an all-distance car. For example, doctors and magistrates are often reluctant to take away someone’s drivinglicence on grounds of age and infirmity because that would deprive them of their independence. But many people who are not fit enough to drive an all-distance car could safely handle a local car. 16. Many people would be uneasy about drivinga local car in a tra Yc stream dominated by larger, heavier and faster vehicles. Lower and better enforced speed limits on all classes of road would go a long way toward removingthat deterrent. So would the introduction of town- or a rea-based systems of goods distribution in towns. Area-based distribution minimises the lorry mileage required to perform any given task of goods distribution, while at the same time making it possible to use lorries specially designed for urban work. It can therefore be the best option for shippers as well as for other road users and the environment. Area-based distribution is becomingincreasinglycommon o n the Continent, and somewhat similar arrangements exist in some British towns too. The introduction of distance-based road charging for lorries, to which the government is now committed, will encourage the development of such services, which could be further encouraged by the judicious use of lorry routeing and entry restrictions. 17. One problem about usingpublic transport for longjourneys at the momen t is the diYculty of making the last legof the journey from the station to the final destination. Someti mes, too, people who are away from home for a few days want a car for local travel where they are staying. Local cars available for hire at cheap rates at railway and coach stations would often solve such problems. As well as makinglong-distance travel easier for people without all-distance cars, lower speeds on motorways and other main roads would reduce the attraction of travellingby car on longjourneys. These would be extra inducements, on top of the financial advantages for people to give up their all-distance cars. 18. Local cars would often be suitable for car clubs. There are some people who could easily commute by public transport but who drive instead because they need a car for work purposes duringthe day. Local cars kept at the place of work would often solve that problem. Some firms, especially firms not in town centres, keep a car pool so as to be able to take visitors to and from the station. Local cars would be very well suited for that purpose. Country hotels might like to keep some for their guests to use. 19. It is possible to imagine a future in which the car population consisted mostly of local cars and only people with unusual travel requirements owned all-distance cars. But even if the local car had a very much smaller impact than that, it would still be well worth pursuing. The administrative cost of creatinga new legal category of car is minute. The changes in general transport policy required to create favourable market conditions for local cars are all reforms that should be undertaken anyway. The regulations defining the ecological car could be regarded as restrictions, since, even though the case for them is overwhelmingly strong, they would mean that people would no longer be allowed to do things that they can do now. But with the possible exception of the tightening up of some driver licensing rules, there is nothingrestrictive about the local car. Its introduction would create new opportunities, from which everyone, not only owners and users of local cars, would stand to gain. 20. Another diVerence from the ecological car is that it would be possible to introduce the local car in any country in the EU without the involvement of the Commission. The powers still available to national governments of driver licensing, taxation and traYc regulation are suYcient3. If Britain were to take the initiative, it would change us from laggard to leader among European nations in enlightened transport policy. There are also huge possibilities for the local car outside Europe. It has immense potential for reducingthe appallingtoll of road deaths and casualties in the developin gworld. Developingcountries would also be able to cut their import bills for imported cars and fuel. For some of them, the local car would open up the prospect of manufacturingtheir own cars rather than importing them.

2 “Step by step vision of Accident-free Driving”. 2002. RoadSafe Winter 2002–03. p 79. 3 DfT. 2003. op cit. 9098191005 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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21. Obviously no country could introduce the local car without some research. The vehicle itself has to be specified and costed. This operation would have to take account of the various forms that the local car could take. As has been mentioned, the definition of the local car allows for large variations in carrying capacity, and a van version should also be considered for use of people such as plumbers and electricians who need to carry the tools of their trade. The fiscal and driver-licensingr egime has to be established, and in conjunction with that it would be desirable to look at the opportunities that the introduction of the local runabout would create for reformingthe driver-licensingrules for all-d istance cars and motorcycles. It would also be desirable to undertake some market research amongthe di Verent sectors of the potential market for the local car to identify both what people would find attractive about it and where they would be doubtful. The question of how and to what extent doubts could be overcome by changes in the driving environment, such as lower and better-enforced speed limits for other vehicles, should be explored in the same interviews. Since the new facility of beingable to hire a car cheaply a t rail and coach stations might be crucial for some people as an inducement to dispense with an all-distance car, the feasibility and cost of such arrangements should also be investigated as a prelude to the market research.

Next steps

22. In 1976, I gave a presentation on slow cars and lorries to the Transport Directorate of the European Commission, but this initiative came to nothing. In March 1981, I gave a presentation on the local car, which was then called either the slow car or the local runabout, to the R&D Committee of the Department of Transport. After the Permanent Secretary had to leave early, the Chair was taken by Sir (as he now is) Martin Holdgate, then Chief Scientist at the Department of the Environment. He said that this was a very important idea which should be pursued. I tried to pursue it with the Department of Transport then and on several occasions since, but with no result. In July, my colleague Simon Lister and I produced a research proposal on the ecological car and we are working on a similar proposal for the local car. We sent a copy of the first proposal to the Department for Transport and will send them a copy of the second one when it is ready. We also plan to get in touch with the appropriate people in the European Commission about both these proposals. Since the DfT and the Commission are the regulatory authorities concerned, they would be the most suitable sponsors for this research, but experience suggests that we will have to find others. If the Transport Committee would like to be amongthem, we would be happy to sen d you the proposals and to discuss them with you.

Notes

1. References are given in Chapter 11 of Stephen Plowden and Mayer Hillman Speed Control and Transport Policy, PSI, 1996. 2. An important part of the market for local cars is likely to be in the country and outer suburban areas. Drivers of local cars should be able to drive on single-carriageway rural roads at the same speed as other traYc. A good case can be made that the maximum speed limit on such roads should be 40 mph, lower on country lanes and many or all minor roads. If so, then the top speed of local cars would be 40 mph. Local cars would have to be fitted with variable speed limiters, though possibly of a much simpler kind than for all-distance cars. 3. In France, the driver-licensingand fiscal regimefor mopeds also applie s to four-wheeled vehicles with the same engine size (up to 50 cc) and the regime for light motorcycles also applies to four-wheeled vehicles of the same engine size (up to 125 cc). This has created a market for such cars, which are known respectively as voiturettes and quadricycles. The small engine size means that the cars themselves are small, whereas as was mentioned in the text some people would require a local car or van with a large carrying capacity. One can imagine that someone driving a voiturette or a quadricycle in a traYc stream dominated by other vehicles would feel quite unsafe, and accordingto some small-scale infor mal market research carried out for me in France many years ago, such feelings do seem to be a deterrent to the use of these cars. Nor do these cars satisfy all the “green” criteria which the new legal category of local car would have to meet. Even though annual sales are very small, the fact that this market exists at all shows the power of driver- and vehicle-licensingrules to influence consumer behaviour. In Japan, microcars enjoy favourable tax and insurance rates. In addition, in most cities, the rule applying to conventional cars that their owners have to prove that they have an oV-street parkingspace is waived for microcars. I do not have up-to-date figures, but in 1990 microcars accounted for about a quarter of the new cars registered in Japan. Some more detail about the French and Japanese experience is given in Appendix M of Speed Control and Transport Policy. October 2003 9098191006 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by Toyota (CAR 06)

CARS OF THE FUTURE

Background 1.1 Toyota is the world’s third-largest automobile manufacturer, producingover six million vehicles each year—equivalent to one every six seconds. Toyota vehicles are manufactured in 58 plants in 27 countries and marketed in over 160 countries. Toyota’s financial strength, however, is unmatched by any other automobile manufacturer. A market capitalisation of over £50 billion and cash reserves of around £16 billion give the company unrivalled resources for R&D. 1.2 Within the UK, Toyota has invested over £1.7 billion, with a car manufacturingplant at Burnaston and an engine production plant in Deeside, North Wales. Production levels for 2003 are anticipated to be approximately 220,000 vehicles and 400,000 engines. 80% of vehicles produced in the UK are exported, predominantly to the rest of Europe. 1.3 Toyota (GB) PLC is the importer and distributor for Toyota and Lexus vehicles in the UK and is responsible for sales, marketing, after-sales and customer satisfaction. Sales are managed by a network of over 200 Toyota sales centres and 50 dedicated Lexus centres. We oVer the UK’s widest product range comprising14 di Verent Toyota vehicles as well as six Lexus models. Around 130,000 of our vehicles are sold in the UK each year giving a market share of 4.3%.

Cars of the Future—Clean Vehicle Technology 2.1 Toyota regards the protection of the global environment as one of its main priorities. We are committed to developingtechnologieswhich minimise the impact of vehicl es on the environment which means both reducingemissions and minimisingthe resources used in produc tion and operation. We are strivingfor “zero emissions” at every stageof the vehicle’s life cycle—r esearch and development, design, production, use and disposal. 2.2 Toyota’s philosophy has always been to produce the right car at the right place at the right time. This applies equally to manufacturingand marketingstrategiesas it does for e nvironmental development. The introduction of new technology will not be simultaneous in all markets given variable resources, infrastructure, regulatory frameworks and consumer demand. Developing the “car of the future” therefore, means developing a range of technologies. 2.3 Our current range of engines reflects this philosophy. Our VVT-i direct injection petrol engines and common rail D4-D diesel engines are “intelligent”, delivering power as well as outstandingfuel economy. These will remain the mainstay of the product line up for a number of years. However, advances in adjacent technology—most notably hybridisation and catalytic technology—will ensure these engines use less fuel and emit fewer pollutants. 2.4 Diesels are often portrayed as an “environmentally friendly” solution to motor vehicle transport. Certainly they tend to emit less CO2 than petrol engines. However, emissions of NOx (which results in ground level ozone) and harmful particulate matter (PM) are much higher in diesels. To combat this, Toyota has developed D-CAT—the first diesel after-treatment catalyst to combat both NOx and PM. D-CAT halves NOx emissions and reduces PM by over 90% (from 0.21 to 0.005g/km). For the first time, diesels will have the potential for regulated emissions close to those of petrol without sacrificingthe CO 2 benefit. To bring this technology to market in any numbers, however, the next round of European diesel emission standards (Euro V) must be much more stringent. Without this, there will be no commercial impetus to develop systems any more sophisticated than those already available. 2.5 The eYciency of conventional direct injection engines is improved by the application of hybrid technology. Hybrids combine advanced petrol engines with an electric powertrain to deliver outstanding fuel consumption and much-reduced emission levels without sacrificingpe rformance or comfort. Fuel consumption (and thus CO2) is below equivalent diesel-powered vehicles whilst emissions are 50% below Euro 4 standards. Hybrid does not require a dedicated refuellinginfrastr ucture nor does it reduce power or usable space within the vehicle. In addition, as it is “self-charging”, there is no need to “plugthem in” at the end of the day. 2.6 Toyota launched the Prius—the world’s first mass-produced hybrid vehicle—onto the market in 1997. Since launch over 130,000 have been sold worldwide. However, sales in Europe have been disappointingas consumers hesitated over a perceived highprice, a drivi ngperformance that was felt to be uncompetitive and stylingthat was seen as beingmore appropriate to Japan ese markets. We have now addressed these weaknesses and will launch a new model utilisingour Hybri d Synergy Drive, which will be available in the UK in January 2004. It is now bigger (D segment), has been dramatically restyled as a hatchback, is more powerful (allowing greater use of the electric engines rather than the petrol) and is more technologically advanced. Although final emission data is to be confirmed, as Figure 3 below demonstrates, 9098191006 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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it has significantly lower CO2 emissions than just about any rival of any size. This is testament to the potential of hybrids to deliver significantly better emissions than conventional alternatives. Hybrids will gradually be introduced in many of the larger Toyota and Lexus models.

CO2 Data of Latest Models

260 240 Diesel 220 Gasoline 200 180 160 g/km 2 140 CO 140 g/km 2008/9 120 2000 Prius 100 104g/km New Prius target 80 60 600 800 1000 1200 1400 1600 1800 2000 2200 2400 IW class kg

2.7 Since launch, Prius has benefited from a £1,000 Powershift grant and, more recently, beneficial VED and Company Car tax by virtue of its low CO2 figures, and an exemption from the London congestion charge. These incentives are critical to the car’s marketability, helpingconsumers overcome the price premium of such new technology. Despite these incentives, sales have been inhibited by competition from (environmentally inferior) LPG and the additional fiscal benefit it receives at the pump. If the LPG subsidy continues, it will make it that much harder for any vehicle manufacturer to bringnew technologyto market. 2.8 Lookingfurther to the future and recognisingthedi Veringenergydemands of various markets, Toyota has initiated research on a wide range of fuel sources; CNG, LPG, clean hydrocarbon fuel, pure electric vehicles as well as hydrogen technologies such as fuels cells. Whilst all of these technologies oVer some potential, their eYciency can invariably be improved by the application of hybrid technology. Indeed, Toyota views hybridisation as a stage through which all future powertrains should pass. Hence hybrids are very much a technology for both the present and the future—the bridge technology rather than a niche product. 2.9 Toyota has been evaluatingboth LPG and CNG and has extensive market exp erience of both fuels in Japan and the Tokyo taxi fleet. LPG oVers only marginal benefit in environmental terms over conventional petrol and diesel engines and is inferior to hybrids. Given additional concerns about its long- term eVect on engine durability added to consumer wariness means that Toyota does not support this fuel and has no plans to develop it further in the UK. 2.10 CNG meanwhile does oVer the potential for further environmental improvements. Savings of 20–30% in CO2 emissions, 50% of NOX and nil hydrocarbon emissions compared with a normal car are readily achievable. However, gas engines are less eYcient and methane catalysts will need to be developed to reduce the additional greenhouse gases. As a result, Toyota believes that the limitations of CNG in cost (of vehicle and infrastructure requirements), weight and performance combined with the superior environmental performance of alternatives will dissuade consumers from choosingCNG. 2.11 There has also been much attention on biofuels. These oVer the prospect of a readily available non- fossil-based fuel source available from renewable sources. At present, however, concerns about standards and durability mean that biofuels can be accepted only at a mix of up to 5%. Until such fuels can be produced in large quantities and to a recognised standard, their take-up oVers too many risks for consumers and manufacturers. 2.12 Although these technologies open up several possibilities for fuel selection, we believe that, in terms of cleanliness and eYciency, fuel-cell vehicles that directly employ hydrogen will be the mainstay of the future and hybrid vehicles a major steppingstone to achievingthis goal. 2.13 Most major motor manufacturers are devotingsignificantresources to fuel cell vehicles. In 2002 Toyota began limited marketing of its Fuel Cell Hybrid Vehicle (FCHV) with trials by academic and governmental agencies in Japan and USA. The FCHV stores H2 on-board and can achieve an emission free performance of over 160km/hour and a range of over 300km. Toyota is also exploringalternative energy storage systems such as methanol converters and gasoline reformers in the pursuit of the most eYcient fuel cell vehicle. Industry commentators agree that this competitive environment will ultimately deliver fuel cells but not before 2020. 9098191006 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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2.14 The reasons behind this timescale are manifold. There are the technical limitations of hydrogen; it is currently very expensive to produce, on-board storage is limited and there are huge infrastructure issues to be overcome. Can the energy sector develop a cost-eVective, environmentally friendly method of producing hydrogen in suYcient volumes? How will consumers react to the prospect of puttingan invis ible yet highly combustible fuel into their vehicle? How will the country’s taxation system, which produces significant sums for the Treasury, be adjusted to this new fuel? All these questions will eventually be resolved but only through extensive joint working between the automobile manufacturers, fuel companies and government. Such questions are amongthe many beingconsidered by the Low Carbon Vehicl e Partnership, a Government initiative Toyota is pleased to support whole-heartedly.

Cars of the Future—Safety Technology 3.1 Toyota believes it should play a prominent role in all aspects of the car’s impact on society. Vehicle safety is therefore a major priority. Although, diVerent countries and regions have their own regulations and standards and it is our policy to comply with these regulations, we have our own stringent safety requirements. These are based around three principles: 3.2 A Comprehensive Approach—If traYc deaths are to be reduced each of the three factors of automotive safety—people, vehicles and the drivingenvironment—must perform its pr oper role. Safety cannot be achieved by improvingthe vehicle alone. It requires people to drive more s afely and for there to be safer roads. Simple measures like seat belts, drivingsafely, e Vective enforcement and improvinginfrastructure will all help improve safety for all. 3.3 Toyota is fully aware of its responsibility to produce vehicles with the best overall safety possible— vehicles that are not only friendly to those inside, but to those outside as well. However, traYc accidents can happen in every way imaginable and in every road condition. This is one of the reasons why reliable and objective accident causation and multiple analyses are so essential. To this end, Toyota collects accident data from various sources, analyses it thoroughly and applies the results to the design of new safety feature. 3.4 Developing Leading Edge Technology—Toyota continues development work in new materials, electronics, and other leading edge technologies which will result in improved vehicle safety. Our goal is to make ever more intelligent cars that people can drive more safely. 3.5 Social Contribution Programmes—We also believe it is important to contribute to safety in more indirect ways. Toyota sponsors numerous initiatives aimed at reducingro ad fatalities. We are supporting EuroRAP, the European Road Assessment Programme, an organisation seekingto devise and apply a methodology for measuring the safety of roads to encourage better design. This should lead to a greater sharing of best practice on safer road design, increased public knowledge and awareness of road safety and more responsible driving. 3.6 Supportingroad safety initiatives in no way absolves the vehicle manu facturer from direct action and Toyota is therefore developingpassive, active and Preventive Safety mea sures. 3.7 Passive Safety—the initial focus of the industry was on passive safety—protectingdrive rs and passengers from injury. Front, side and curtain airbags have now been introduced across car ranges along with pre-tensioners and force limiters. Passive safety is now developing enhanced collision protection, involvingcompatibility issues, Pedestrian Protection and more advance d airbagsystems. At the same time, we have seen the optimisation of car body structures to absorb impact energy, lessen whiplash injury and cushion head impact. 3.8 Active Safety—Toyota is also lookingat the impact that more “active safety” measures ca n have on road safety. Dynamic body control technologies such as ABS, Traction Control, Vehicle Stability Control and Brake Assist have made it possible to use electronic systems to assist drivers in manoeuvringthrough many diVerent kinds of road conditions and situations. 3.9 As we move forward, we are likely to see developments in a number of other directions. One of these is accident perception and collision mitigation. Toyota has developed a system that uses a millimetre-wave radar to detect obstacles in front of the vehicle. When the system’s electronic control unit detects that a collision is imminent it can activate several active and passive safety systems to minimise the eVects of a crash. Known as pre-crash technology, it could have a significant eVect on passenger safety. 3.10 Preventive Safety—Another trend is preventive safety. This takes active safety upstream into accident prevention where eVorts are made to avoid situations that cause accidents. This includes Driver Assistance Systems such as Night View, which uses short-wave infrared beams to detect objects on the road ahead, and Lane MonitoringSystem, that uses a back monitor camera to detec t deviations from lane markers to warn drivers of lane departure. 3.11 Another significant area in this field is comprehensive body control. Vehicle Dynamics Management integrates all the electronic safety systems within a single ECU. Sensors communicate numerous parameters to the ECU like wheel velocity, yaw rate and deceleration, giving a clear picture of the vehicle dynamics. Other sensors provide information about the driver’s inputs, like throttle angle, brake pedal actuation and 9098191006 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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steeringangle.By comparingthese two sources of information, VDM can rec ognise the driver’s intentions and electronically activate throttle, brakes or steeringto make the car f aithfully respond to the driver. The result is unmatched manoeuvrability with a sharp response to every driver input. 3.12 Future developments include Autonomous Safety Support Systems. An example of such a infrastructure-supported system would be an advisory system to prevent collision with crossingpedestrians. This system uses existinginfrastructure to inform the driver throughon- screen and voice prompts when pedestrians or bicycles are crossingthe road, minimisingthe risk of acci dents on crosswalks. Indeed, new electronic and telematics technologies hold out the promise of major safety benefits through intelligent interaction between vehicle and road. 3.13 There is one further interestingarea we are lookingin Toyota and that is the complex field of interaction between man and car. Toyota vehicles are beginning to evolve with the development of sensing and control technologies that enable the realisation of “cars that support their drivers”, cars that not only improve the ergonomics of driving with new technologies but that also react to behaviour and mood patterns and changes. 3.14 There is no doubt that the development of new technologies holds out the prospect of savingmany lives, and that reason alone makes the investment worthwhile. But of course, customer understandingand acceptance is essential, which implies aVordability, amongst other characteristics, and the contributions of many stakeholders. This must include close co-operation and partnership amonggovernments,public institutions, manufacturers and suppliers, to agree on standards, protocols and methods of implementation, amongothers.

Cars of the Future—Telematics 4.1 The other area of automotive technology likely to have a significant eVect on the motor car and society is telematics. The application of information and communication technology oVers tremendous possibilities for traYc management. Having become commonplace in the luxury end of the market, satellite navigation is gradually being introduced in other sectors so that by 2010, it will be reasonable to assume all new cars will have some satellite navigation. 4.2 Whilst the majority of the systems currently on the market are “passive”—helpingdrivers negotiate their way around unfamiliar roads—the real benefits will come with the development of “active” navigation”. Toyota vehicles are already available with “turn-by-turn” navigation, alerting drivers to less congested routes. However, even this is hindered by the fact that vehicles are likely to follow similar advisory instructions, soon blockingup alternate routes. More “intelligent”sys tems are needed which can assess traYc conditions and the likely impact of divertingsome vehicles to one route a nd a separate number to another alternative. In this way road capacity would be maximised and serious congestion largely avoided. 4.3 Of course, for such a system to work eVectively, all vehicles must have the necessary equipment. Hence, although the technology may not be that far oV, implementingit into the existingcar park is an altogether larger and more long-term problem. 4.4 Telematics will, however, do more than oVer congestion avoidance guidance. It will also help maximise the capacity on our roads. Already top-of-the-range models can contain devices which calculate the distance to the car in front and adjust the speed via cruise control to maintain a safe distance. The logical extension to this system will become evident once it is in all cars. When that situation arises, traYc can move safely, close together in “platoons” at a regulated speed. Thus the capacity of roads should be further increased. 4.5 Again there is still much research to be done especially in the eVectiveness of brakingvia cruise control. However, in the future GPS could oVer safer drivingin urban areas, limitingspeeds of vehicles as they enter a corner or in congested urban areas. 4.6 There has also been suggestions of “in road” systems which control vehicle movements by way of ICT built into the road. This could, in theory, allow for “trains of cars” to proceed alongfixed routes but would involve huge infrastructural investment and is not a technology Toyota has been developing. Indeed it is the issue of cost that will determine the introduction of much of this technology. Whilst the cost of technology is reducing, people’s demand for it is increasing.

Conclusion 5.1 Vehicle manufacturers will continue to strive for innovation as it provides a competitive edge. Governments can play a key role in facilitatingthat development, helping oVset the inevitable price premium and creatingconditions for the introduction and take-up of that technolo gy. Although the car industry operates in a global marketplace, individual governments can act to ensure the introduction of the technology happens as speedily as possible. Michael Hawes Head of UK External AVairs October 2003 9098191007 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 100 Transport Committee: Evidence

Memorandum by Professor Chris Wright and Professor Barry Curtis, University of Middlesex (CAR 07)

CARS OF THE FUTURE

Abstract

The aggressive design of the modern automobile promises freedom, speed and power. But the promise cannot be fulfilled during a period of growing congestion, urban traYc blight, climate change and diminishingfuel resources. The role and function of the automobile must c hange, and this in turn implies a change in “car culture”. Certain processes are already at work, which will assist change in the proposed direction independently of what people actually want. Car drivingwill lo se much of its attraction during the comingdecade, and the way will become open for (a) more ‘convivial’ des igns, and (b) institutionalised lift-giving.

Introduction

In the competition for customers, modern car manufacturers oVer performance capabilities that are inappropriate for modern road conditions—an example of runaway evolution reminiscent of the peacock’s tail. A more rational approach would be to reshape the motor car by adapting it to what the world really needs. From time to time, the automobile industry itself produces “concept cars” as a way of tryingout new ideas and gauging public reaction. Recently, these have shown signs that manufacturers are respondingto public concerns, for example, about depleted oil reserves and global climate change. Some fuel-eYcient designs have been carried into production. The Smart car has achieved considerable success as a city runabout, while Honda and Toyota have both marketed hybrid vehicles that are considerably more fuel- eYcient than conventional family saloons. The problem is that the motor car is a cultural symbol. It can evoke a powerful emotional resonance in terms of power, speed, status, and personal gratification. Unless this bond can be broken or modified, it will be diYcult to persuade owners that they would be better oV with smaller, cleaner engines, and by using their cars less. Furthermore, an enormous investment has already been committed to adaptingthe urban environment and infrastructure to automobile use: homes, workplaces, and services have become dispersed, with little prospect of returningto a more compact and sustainable patter n within the foreseeable future. Consequently, any attempt to “reshape” the motor car involves a range of issues on several diVerent levels—cultural inertia in the form of stylingconventions and public tas te, car dependence, technological constraints, and infrastructure. Of these, cultural aspects have received very little attention so far. Here, we suggest a way in which car design might better reflect the wider needs of the community without sacrificing the aspirations of the individual car owner.

The Cultural Status of the Car

Drivingis a means of self-expression, with the vehicle an extension of the human body. However satisfying it might be for the individual, this close identification of driver with machine has less welcome implications. Any threat to the car represents a personal threat to the driver, who would consider it presumptuous, even provocative, for a passingstrangerto touch the bodywork. Moreover, the s pace around the perimeter of the car is an extension of the driver’s personal space, upon which others trespass at their own risk. To cut in front of his or her vehicle is, metaphorically speaking, to tread on the driver’s toes. Styling is the manufacturer’s strategy for conveying meaning, and it is tailored to the purchaser’s deepest and most heartfelt desires: unlimited fuel, an open road, no speed restrictions, and the freedom to come and go as one pleases. It is not surprising, therefore, that a driver’s emotions can easily be aroused by minor incidents on the road in which things do not go according to plan. Any obstruction can evoke hostility. TraYc jams are infuriatingpresumably because the promise held out by the vehic le—freedom and speed— is broken, leavingthe driver helpless. At the individual level, the increasingradius of activity that character ises modern livingmakes it di Ycult to contemplate abandoningthe automobile as an everyday item of use. Perso nal relationships, work and social patterns are now so bound up with cars that losingone’s drivinglice nce represents a terrible blow. It does not follow, however, that a car with the speed, power and technological sophistication of the kind that is currently promoted by the automobile industry is the best way of deliveringpersonal mobility. The modern motor car is a cultural dead-end, an imagined future in some imaginary motorway utopia. The time is ripe for exploringalternative proposals, and in the next few paragraph s we set out one possibility in which we focus on engineering technology as a means of changing the way cars are used, not how they work. 9098191007 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Reshaping the Automobile In principle, cars could be stripped of their mystique and become functional transportation machines— obeyingthe rules of what advertisers call “product truth” (it does what it says on the can). Users then might be less inclined to use them as a means of expression, and consequently, use them less. This is not as far- fetched as it sounds. As part of the continuingevolution of the road transp ort system towards greater eYciency and safety, control is gradually being wrested away from the driver, in several distinct ways: — Control functions are beingsubsumed by intelligentsystems. Until abou t 1990, apart from anti- lock braking, these systems were restricted to advisory functions that could be overridden, such as cruise control, traction control and collision warningsystems. Howev er, there is now a real prospect of intelligent speed adaptation, in which the vehicle speed is governed automatically to comply with speed limits, and functions such as anti-collision radar could be upgraded to control spacingas opposed simply to monitoringit. — The performance envelope will shrink. Cars will become slower, smaller and more expensive to run. Traction control will be tuned to prevent fuel-wastingthroughunnec essarily aggressive acceleration (this will also help to “calm” urban traYc). Fuel cell-powered battery motors for urban vehicles will have reduced acceleration, and prevent the driver from “revving” the engine. — Finally, the road network will be rationed as well as priced, with externally imposed journey schedulingto optimise collective use of road space. This will a Vect the freedom that people currently have to choose when and where they drive. In a sense, this freedom has already been eroded through growing congestion, and through traYc management measures that restrict access to certain areas at certain times. A logical development will be to schedule journeys centrally so that trips can only be made when pre-booked, via approved routes. The car will operate like a virtual railway. All these measures will make the drivingexperience more “mechanical”, le ss rewarding, and so constrained that drivingwill no longerprovide a means of self-expressio n. In such a climate, the rationale for aggressive designs will no longer make sense. With current designs, reflections from the steeply raked, convex windscreen make it diYcult for pedestrians to achieve eye contact with drivers. Side windows have become less expansive, reduced almost to narrow slits in some cases—the automobile equivalent of wearingsungla sses. Of course, this may be what some drivers want: escape from the public gaze, from the particular social responsibilities that go with public perambulation, includingthe need to acknowledge,at least, the presence of others. The convivial car of the future should be designed to reward its occupants with the pleasures of private car travel, but in contrast with what happens today, it would not express its rationale in terms inimical to the outside world. On the contrary, it would be outgoing, reducing intimidation by loweringvisual barriers, facilitatingcommunication between its occupants and passers-by. We wou ld suggest: (a) An engine management system that prevents over-revving while the car is stationary. (b) Vehicle-to-vehicle radio communication (to discourage misuse, this would be recorded by a tamper-proof “black box” whose contents could be interrogated by enforcement agencies in the event of a collision). (c) Active suppression to reduce noise—especially tyre noise—emitted outside the car. (d) Ride height that locates the occupants’ eye-level on a par with adult pedestrians. (e) Stylingfeatures that are aesthetically pleasingboth for the owner an d for passers-by. This implies less emphasis on speed motifs and more on the relationship between the car and the urban townscape.

The Car as a Community Resource One of the most intractable problems associated with mass car ownership and use is the fact that automobiles are very demandingof road space and there is not enoughroom in cities for more than a certain proportion of vehicles to be in circulation at any one time. On the other hand, for much of the time, each vehicle will be occupied by only one person—the driver. It can be argued that the urban car-user is a privileged person, and should “buy” this privilege by taking on a community welfare role as lift-giver. This is not a new idea, echoingas it does the jitney concept, which was successfu l for a short while in California duringa time of economic depression duringin 1914. Ford model T owners sto pped for passengers who hailed them from the kerb, and gave lifts for five cents. A revival of the jitney has recently been advocated by planningtheorists. In fact, giving lifts to strangers has always taken place on a limited scale in specific circumstances. Some are oYcially sanctioned and licensed, such as the schemes run by charitable organisations that cater for journeys that would be too expensive, or impractical, via public transport. For example, the State of Georgia brokers “Non-Emergency Transportation” (NET) on behalf of the elderly and disabled. The operation is contracted out to a private company, which screens request and allocates lifts amongvolunteer organisations together with regular transit services. A less formal kind of lift-giving in the USA is known 9098191007 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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as “slugging”: lift-seekers wait near the entrance to a high occupancy vehicle lane in the hope of catchinga ride. No money changes hands. Drivers who give lifts can fill their cars with passengers and qualify for a speedier journey via the HOV lane. The concept of the car as a public resource is a separate issue from that of design, but it can be interpreted in design terms, as in the case of the Citroe¨n Osmose concept. The aim of the Osmose was “to address the broader issue of a more responsible mode of usage, open to the outside world”. — Osmose sets up a two-way exchange between pedestrians and motorists. A form of contact that was hitherto non-existent. In this way, mobility is shared by people who in theory have nothingin common apart from the fact that they happen to be going in the same direction. A natural and fair exchange that respects individual privacy. — Osmose can carry three people with luggage in the front part, while the rear part can be transformed to accommodate a further two. The driver can use the right-hand side panel of the vehicle to inform passers-by that he is willingto take passengersand stat e his destination. If pedestrians see a stationary Osmose, they can attract the attention of the driver or— alternatively—they can use a WAP phone to contact the nearest Osmose travellingto their destination. The vehicle locates the call, and the driver can send back a message of confirmation giving his registration number. No car resemblingthe Osmose is likely to gointo production unless people c an somehow be motivated to buy a vehicle that sacrifices personal benefits in the interests of public welfare. However, the concept is an intelligent and forward-looking one. It suggests a way out for the private car. Motorists can keep using them, while non-motorists benefit from increased mobility, without a massive public investment in transport infrastructure. However, the Osmose vision can probably be realised with conventional vehicles. The key is communication, and choice. For lift-giving to be successful as a mode of transport, both the lift-giver and the lift-receiver must have absolute confidence in the system, with transactions that are formalised and placed on record. Each pick-up represents a contract voluntarily entered into by the driver and passenger. Before the pick-up takes place, they would need to exchange personal profiles, either or both beingfree to reject the contract if their requirements were not met. Before settingout on a journe y, the prospective passenger could arrange the pick-up to take place either at the trip origin or at a convenient point on the driver’s route. Alternatively, the lift does not have to be planned in advance. Usinga mobi le phone, a pedestrian could register a demand while out walking, on the spur of the moment. Participants would need user-friendly interface devices to handle the transfer of significant amounts of information, together with a central brokerage to co-ordinate information exchange and carry out support functions, which might include: — maintaininga database of prospective passengersand prospective drive rs; — checkingthe identities and goodcharacter of participants; — recruitingnew applicants to join the system; — developingand maintainingsecurity procedures in order to prevent frau dulent impersonation of an accredited participant; and — monitoringrequests and allocatingprospective passengersto prospect ive drivers. Systems could be developed startingon a local scale usingthe mobile phone and internet technology, and expanded to a more sophisticated level gradually over time. A practicable scheme would need to overcome several obstacles. Some of the obstacles are related to the scale of the operation. For example, in a small community where everyone knows everyone else, all of the above functions can be performed adequately on an informal basis. Neighbours in a small village will give each other lifts without a second thought. Parents whose children attend the same school will often form a kind of car club, rotatingthe responsibility for transportingeach other ’s children on diVerent days of the week. However, extending the concept to larger groups introduces some quite diYcult issues, including (a) the legal responsibilities of the participants, and (b) vehicle insurance and driver indemnity. However, if the diYculties can be overcome, the benefits to passengers are clear. The benefits to drivers are less clear, although there are several ways of making the process more attractive than might otherwise be the case. Participatingdrivers could be rewarded with exemptions from congestion charges, for example. Lift receivers might pay a fare—preferably this would be an agreed tariV, with the payment processed electronically by the co-ordinating agency, so that passengers would know in advance how much the journey would cost.

Conclusion In this note we have put forward an alternative concept for the private car. It is not so much a design concept as a way of using cars. Managing the car as a community resource might help to sustain its status as a desirable possession while at the same time contributingmore positiv ely to community needs and hence to a sustainable transport future. It would not necessarily require a major cultural shift in attitudes to car 9098191007 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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ownership, if the financial and other incentives are suYciently rewardingfor drivers to sacrifice privacy during some of their journeys, given the support of a central agency that could guarantee personal security and allow flexibility of choice. At the same time we advocate a design concept that recognises the wider needs of the community, while still recognising the owner’s aspirations. A “convivial” design would express openness and communication at the expense of speed and power. Potential buyers would need to be persuaded that for them, the gains outweigh the losses, and while this would not be easy, we suspect that speed and power will gradually lose their attraction over the next few years in any case, whether drivers like it or not. Professor Chris Wright, Transport Management Research Centre, Middlesex University Business School and Professor Barry Curtis, Visual Culture, Middlesex University School of Arts. October 2003

Memorandum by Professor P S Hall and Professor I R Harris, University of Birmingham (CAR 08)

CARS OF THE FUTURE

Clean Vehicle Technology

In the UK, road transport contributes around 25% of the carbon-dioxide (CO2) into the atmosphere.

What fuels will be used to drive the vehicles of the future?

To reduce and eventually eliminate this CO2 output, an alternative fuellingsystem for road transport has to be developed. This can be brought about in a number of stages, namely: — Improvement in the fuel economy of current vehicles. — Introduction of hybrid vehicles usinga combination of internal combust ion engines (ICE) and electric drives as in some models today.

— Eventual replacement by CO2-neutral diesels (usingbiofuels) and fuel cell/hydrogendrives. The work at Birmingham is focused on the development of on-board reformers for the production of hydrogen from exhaust gases of ICEs, the development of high temperature fuel cells and the separation and storage of hydrogen. This work has a direct bearing on all three of the steps outlined above: — The injection of reformed hydrogen into a diesel or petrol engine leads to improved combustion eYciency and significantly reduced particulate formation. It is also possible for the hydrogen to be supplied from a stored source on board the vehicle. — The hybrid system could consist of an ICE and a fuel cell supplied by hydrogen. This would require an eVective means of storing the hydrogen on board the vehicle to give a useful range independent of the ICE. — The fuel cell would require an even more eVective hydrogen store when the vehicle is now totally dependent on the fuel cell for propulsion. The storage of hydrogen is a critical technology and represents a major steppingstone in the path to hydrogen fuelled vehicles. The gas can be stored in (1) high-pressure cylinders, (2) as liquid in an insulated tank or (3) as a solid state medium. All three of these options are currently beingexplored but in the long term, storage in the solid state is the most attractive—and also the most challenging—and would be similar in form to energy being stored in a battery. There is also work at Birmingham on the static storage of hydrogen for fuellingstations and ideas concerningpossible forms of a hydrogeninfrastructure are beingdevelop ed by interdisciplinary teams within groups such as the Sustainable Hydrogen Energy Consortium (SHEC) which is part of the EPSRC SuperGen initiative. Looking at the wider picture for long-term sustainability, hydrogen has to be produced from clean energy or from sustainable resources such as biomass. This aspect is also under investigation by the Birmingham team where the production of hydrogen from sugar waste is being investigated.

What does the government need to do to make it happen? There is a plethora of fundingschemes in place at the present time. Althoug h initiatives such as Supergen are welcomed, substantially higher funding is necessary for the UK to compete internationally in the development of clean vehicle technology. It would be preferable for this to be co-ordinated by one focused central body with a balanced representation from academe and industry. Such a body must be geared to introducingradical changerather than short-term initiatives aimed pre dominantly at minor changes to the status quo of today’s industry. 9098191008 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Vehicle Design and Control It is now widely recognised that cars that drive themselves are technically extremely demandingand probably not feasible. However driver assistance systems are now appearingon the market.

How much safer can cars be made for drivers and pedestrians? Vehicle radars operatingat 77GHz are currently fitted to some vehicles to i mprove vehicle safety. They are currently used for autonomous intelligent cruise control, and will automatically keep a safe headway between vehicles. Manufacturers call these systems driver comfort aids, but they also improve safety. For example, in the event of the vehicle in front braking, the system will apply the brakes considerably faster than an average driver. Current research, in which the University is involved, is investigating whether such radars, when combined with other sensors such as TV cameras, can be extended to perform other useful functions, such as — pretensioningof seat belts prior to side impact; — detection of pedestrians in front of the vehicle for deployment of safety aids such as front air bag; — stop and go for automatic crawling in traYc jams; and — reversingaids. There is a good chance that such functions will be available on higher priced vehicles in the next 10 years. Much work has also been done on use of these sensors for collision warningan d collision avoidance. There seems no doubt that such sensor systems can improve safety for drivers and pedestrians. Technical challenges remain, such as cost reduction to enable such systems to be fitted to volume priced cars and sensor and processingimprovements to enable reliable threat assessment in clut tered road environments. The threat of litigation following accidents is an issue that seems to prevent manufacturers sellingsuch systems in the US market. There is a danger that this might happen in Europe in the future.

Is the human driver better than the computer? Expandingon the points made above, there is no simple answer and context is all important. In the case of automatic cruise control, the reaction time of the radar and its associated processor and control system is of the order of a half to one second faster than a driver. At high speed, such improvement in reaction time should ultimately contribute to a reduced numbers of rear end collisions. On the other hand, when faced with the task of interpretinga complex road sc ene that includes a potential hazard such a motorway lane blockage, the alert human is still superior to current optimised mixed sensor systems in all conditions. One might conclude therefore that use of technology to supplement or support the driver, will result in safer roads. There are also issues of consumer acceptance here. There may be resistance to systems that appear to remove control from the driver, even though improved safety results. However the example of ABS suggests that appropriate marketingshould overcome this.

Can e-safely initiatives prevent accidents or lessen their impact? Yes. For example it is now technically possible, usingsatellite navigati on systems or roadside beacon-to- vehicle communications, to fit speed limiters that automatically vary with local limits or road conditions. Such automatic enforcement would reduce accidents.

Vehicle Use

If drivers paid for road use through a national satellite location system, what else could the technology be used for, and what are the implications? It is assumed that the question refers to a system in which the vehicle derives its location from a satellite positioning system such as GPS, and then charging takes place. Charging could be done in a number of ways. The vehicle relays its position back to a central location for charging, either through a satellite or via a built in mobile phone. The satellite or phone link could then be used for: — Location-specific information, such as speed limit warnings, congestion information, advertising. — Emergency service summons in the case of an accident. — Navigation information for old people who have diYculty in findingtheir way through information overloaded signs. 9098191008 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Charging could also be performed using a smart card system. The prepaid cards would be inserted into a low cost reader in the vehicle. If no card was present or it had insuYcient credit, a penalty message would be sent via satellite or phone. This technology could also be used for: — Automatic monitoringof insurance or license violation (see below). — Security against theft. The smart card could contain owner’s details and vehicle would only start with card in place, or send warningmessageif driven without card. This wou ld be a system complementary to the keyless entry methods, such as voice, facial features or touch, currently beinginvestigated. — Electronic registration document. The smart card could become the vehicle registration document and this would enable change of ownership to be an Internet transaction, thus streamliningDVLC operation.

Can technology prevent uninsured driving? Smart card technology can be used to prevent or to help combat the problem. The “smart” insurance card could be sent by the insurance company to the driver. Alternatively, the card could be updated by the company sendingthe data direct to the vehicle over a built in mobile phone o r satellite link. If this method is used then it may not be necessary to put the data on the card; the card would be used merely to validate the driver’s identity. If the driver is uninsured, the followingcould happen: — The car would be immobilised. — The car could be driven, but a warningmessagewould be sent to the police. — Vehicle tracking, which is essentially just a GPS receiver and a mobile phone or satellite link, could be initiated. If road charging using smart cards and a windscreen unit communicating with roadside or gantry mounted beacons is in operation, then warningmessagesand trackingcould be implemented fairly simply. October 2003

Memorandum by Menard Engineering Ltd (CAR 09)

CARS OF THE FUTURE

With reference to your invitation to provide contributions and in particular:

“How successful have Government grant and tax break initiatives been to date?

What does the Government need to do to make it happen?” Duringthe second half of 2002, I was leadinga very strongconsortium of UK c ompanies, actively pursuinggrantfundingassistance for a proposal to develop and demonstra te a mid-sized fuel cell bus. After many months combined eVort, I was rewarded on 23 December 2002 with a letter from Barbara Hammond who was then Deputy Director, Renewable Energy Programmes which stated that “the DTI is minded to support the TWR fuel cell bus project, subject to ministerial approval”. At that time, TWR (which has since become MEL) had proposed a Fuel Cell Bus, which was to commence development, together with other key UK collaborators in March 2003. The bus would have been operational by late 2005 and was to have been exhibited at the Grove Fuel Cell Symposium in London this September. The project proposal was favourably received, which resulted in the letter I received last December. Unfortunately, TWR went into receivership in March 2003 and therefore full approval for the project was never forthcomingfrom the DTI. Through the acquisition of TWR by Menard Inc. and the subsequent establishment of MEL, all of the consortium partners remained fully supportive of the new business and I maintained communication with the N&RE Department in order to keep the relevant people informed of developments. As soon as the new company became operational, I attempted to re-energize support for the project. At a meetingwith the DTI on 3 July 2003, we were advised to make a new and signi ficantly diVerent outline proposal through the Fuel Cell Advisory Panel. This was unsuccessful and with the publication of the “Fuel Cell Vision for the UK” published last month by Fuel Cell UK, there appears little chance of timely success by pursuingthat route. The original Consortium of TWR, QinetiQ, MIRA and Intelligent Energy was established in order to “kick start” the development of fuel cell vehicle technology in the UK Automotive Industry and lead to the development of business in a key growth technology for UK based companies. It was established in direct response to the Government’s white paper “PoweringFuture Vehicles”. The capabilities and appetite for the project amongthe partners is undiminished. 9098191009 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Since the letter of the 23 December 2002, almost ten months has passed. While the technology has continued to advance overseas, there is still no significant UK fuel cell vehicle development activity in the UK. The route to fundingis extremely longand tortuous in the UK and the pote ntial funds and relative support make the case for industrial investment extremely marginal. Unfortunately this is not the case overseas and as the technology develops apace elsewhere, the window of opportunity to catch up and overtake other countries is beginning to close. It is not yet too late. Dan Parry-Williams Head of Research and Development October 2003

Memorandum by TNO Inro (CAR 10)

CARS OF THE FUTURE

Company Profile TNO Inro, operatingfrom its o Yce in Delft, conducts research and gives advice on traYc and transport, logistics and transport and spatial planning matters. TNO Inro has a multidisciplinary structure and draws on the experience of transport consultants, economists, mathematicians, urban planners and information scientists. We undertake contract research for national and regional government bodies, the European Union and the commercial and industrial sectors. Moreover we have conducted research projects for national government bodies of several EU member states. In example we have contributed to research projects for Belgian government bodies via our sister organisation Transport and Mobility Leuven and moreover we have participated in research projects, studyingthe (econom ic) eVects of the German road pricingscheme for German and Danish governmentbodies. The TraYc and Transport Department is involved in innovative policy research and consultancy for government bodies and the commercial and industrial sector. The work is aimed at improvingthe quality and eYciency of traYc and transport systems. The department achieves this for its clients by following, analysingand predictingtrends in mobility, designingand analysingtra Yc and transport systems, developingand evaluatingpolicy options and strategiesand describinga nd analysingmeasures that will have a real-time influence on traYc. In addition to traYc flows, safety, environmental and organisational aspects can also be examined. The Logistics and Freight Transport Department provides research and consultancy services in the area of supply chain logistics and freight transport. The primary point of view taken in our approach is the logistics behaviour of shippers, carriers and logistics service providers. The monitoringand development of technological innovations in transport, storage, transhipment and production processes are significant elements of our work. In addition to our work at the individual company level, we deliver scenario-based futures studies and forecasts of freight transport. The services oVered by Inro Logistics and Transport primarily concern longterm policy advice for public decision makers and i nnovative supply chain designs for the logistics industry. The Spatial Development Department is active at the intersection of spatial planningand policy formation. This takes place from a number of perspectives: spatial planningand regionaleconomy (includingspecific attention to the employment market and housingdevelo pment). The field of activity is made up of three sections: strategic planning, location development and spatial and economic analysis. The scale position of the region is a central focus. This is where a large number of policy lines intersect and are evaluated, also in terms of town/city, national and international issues. This department is characterised by a heavily process-oriented approach, analysingand evaluatingspatial/ economic data, regional development processes and infrastructure developments. The department is currently developinga rangeof instruments to facilitate all of these activities.

Clean Vehicle Technology

What fuels will be used to drive the vehicles of the future?

In the future more and more vehicles will use alternative propulsion systems and/or alternative fuel types. Most promisinguntil recently has been the development of electric vehicl es. However, at the moment industry is puttinga lot of e Vort in hydrogen systems. TNO Inro has participated among other things in two major EC research projects which are aimingto promote the market introduc tion of clean vehicles (Cleaner Drive and UTOPIA). Moreover, we have conducted studies presentingthe mos t likely transport systems of the future (egFANTASIE). 9098191010 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Cleaner Drive TNO Inro participates in the EC project Cleaner Drive. The overall goal of this project is to specify test actions that remove barriers to market entry of cleaner vehicles. The scope of the project includes passenger cars, light commercial vehicles, trucks and buses, particularly to inter-urban use, although the scope of the environmental rating methodology is being limited to passenger cars. The main fuels and propulsion systems to be addressed are advanced diesel and gasoline systems, CNG, LNG, LPG, electricity, hybrid electric drives, fuel cells, hydrogen and renewable fuels. More information is available at http://www.cleaner- drive.com.

UTOPIA The European research project UTOPIA (Urban Transport Options for Propulsion systems and Instrument for Analysis), to which TNO Inro contributed, provides a significant contribution to the accumulation of knowledge on the market introduction of new environmentally friendly transport and drive concepts. The latter is intended for road vehicles that will contribute to an improvement in the quality of life, initially in urban areas. The website http://www.utopia-eu.com presents additional information.

FANTASIE Technology is an important factor in the performance of transport systems. Speed, comfort, safety and environmental impacts, are all determined by the technology applied. The European project FANTASIE (Forecastingand Assessment of New Technologiesand Transport Systems an d their Impacts on the Environment) tried to identify those technologies. A second objective was the development of policy options to stimulate the “most desirable” technologies. Technology is not a goal in itself, it functions within and is dependant upon organisational frameworks, demand, etcetera. This is also true of the traYc and transport system. Therefore explicit attention is given to demand side developments. The demand assessment and the description of the most likely transport systems of the future have been done by TNO. More information is available at http://www.etsu.com/fantasie/fantasie.htm.

Vehicle Control and Design Roads and vehicles are both getting smarter. At the road side traYc management systems are applied to obtain a safe, eYcient and reliable traYc flow on the road network. Vehicles are beingequipped with systems and services that support a driver to travel from A to B in an eYcient, safe and comfortable way. Drivers are well-informed about current and expected traYc conditions and are able to respond to changing conditions. The SUstainable Mobility Methodology for Intelligent Transport Systems (SUMMITS) project, which is conducted by seven diVerent TNO institutes, is based on the assumption that a traYc system in which roads and vehicles can cooperate oVers substantial additional benefits in traYc flow safety, eYciency, reliability and quality of the environment, compared with more traditional approaches from the road or vehicle side. In its first years, SUMMITS will focus on the development of concepts and tools. In followingyears, SUMMITS intends to apply these concepts and tools in a number of pilot experiments. In order to focus the development of concepts and tools, the first activity in SUMMITS was to develop a vision of a future cooperative vehicle-road system in 2015, to define the main issues to be addressed and to direct the parallel developments in the intelligent road and the intelligent vehicle and to ensure coherence in the program.

Is the human driver better than the computer—where do we draw the line? At the moment the computer can assist the human driver in performingdrivin gtasks and can therefore be very helpful. An example of this is the detection of fatigue. The computer is able to intervene in such circumstances and will prevent accidents. Moreover, many advanced driver assistance systems, like advance cruise control, navigation and lane departure warning assistance systems, are beingdeveloped rapidly. However, computers are not able to deal with complex traYc and drivingsituations. A lot of research is needed to improve detection systems in such a way that they are as smart as human beings. TNO Inro, but also other TNO institutes like TNO Automotive and TNO Human Factors, have an excellent impression of the state of the art. In this section we are presentingthree EC projects i n which innovative radar, lidar and vision systems are beingdeveloped to accelerate the development of cy bernetic transport systems.

CyberCars The TNO Inro and Automotive institutes currently participate in the CyberCars project in the Information Society Technology (IST) Programme of the fifth framework. The aim of CyberCars is to accelerate the deployment of fleets of fully automated vehicles, called cybernetic transport systems (CTS). CyberCars has several major research tracks: user-needs analysis, certification and technical improvements to vehicle and infrastructure technologies. TNO Inro played a major role in the user needs analysis, carrying 9098191010 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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out focus groups and structured interviews in the Netherlands with end-users, stakeholders, decision-makers and operators, as well as an overall statistical analysis of the results of all the European partners of the project. Additional information is available at http://www.cybercars.org.

CyberMove CyberMove is the 5FP EU-research project that studies the idea of passenger transport with automated vehicles by: field trials and feasibility studies, user needs analysis, evaluations and simulations, safety assessments and certification, pilots and demonstrations. CyberMove is a three year project, launched on 1 December 2001. The goal of the CyberMove project is to improve the attractiveness and quality of life in tomorrow’s city by reducingthe use and the parkingneeds of traditional ca rs. This can be achieved with a cybernetic transport system that oVers a cleaner and safer passenger transport to everyone (including people who cannot or should not drive). CyberMove aims to create a new transportation alternative for city authorities to move towards sustainability. The expected results will show whether or not the “invention” of a cybernetic transport system has been evolved yet to be an “innovation”. The website http:// www.cybermove.orgpresents more backgroundinformation.

Netmobil NETMOBIL is a project, which will bringtogethera cluster of four EC projec ts in this area (ie STARDUST, CyberCars, CyberMove and EDICT) and non-EC projects and research from Europe and overseas, particularly North America and Japan. The project will interpret results, identify opportunities, develop policy guidance, raise the profile of the project activities through wide ranging dissemination measures, and determine further research and application needs and opportunities.

Can e-safety initiatives prevent accidents or lessen their impacts? In Europe, a considerable part of lives lost in traYc accidents is due to inappropriate vehicle speed (egin curves) or headway. It is therefore of major importance to accelerate the deployment of intelligent vehicle systems that aid the driver in keepingsafe speed and distance. Such system s are already available in today’s and tomorrow’s passenger cars (like ACC, lane departure warning and navigation systems). However, only a small part of the potential of those systems is exploited because of their limited use with respect to the vehicle mission. TNO Inro has conducted many projects in the sensor and safety applications development and has therefore an excellent overview of the state of the art in this area. Besides, TNO Inro has a good overview of currently developed ADAS applications. These applications assist the drivers, especially in the most critical drivingsituations. Below we have enumerated projects which have recentl y been carried out by TNO Inro.

CoDrive Five TNO institutes started the CoDrive (Cooperative Drivingin an Intell igent Vehicle Environment) research project in 2001, which specifically addresses the key aspects of safety and intelligence when ICT applications are provided in a vehicle. In terms of safety it is vital that the driver is able to use the systems and services at his disposal without his drivingcapacity su Veringany adverse e Vect. Intelligence means that the systems and services must be capable of understandingthe needs of the d river. The prime objective of CoDrive is to assist clients by oVeringa highlyflexible development and evaluation platform, and to make available knowledge of intelligent services and their implementation. The CoDrive objective will be reached by: — Realisinga development, simulation, visualisation, test and evaluati on platform (TOAP), specially suited for in-car ICT and automation and easily convertible to embedded dedicated systems; — The development and implementation of an intelligent prioritisation Human Machine Interaction Framework (called BiBi) channellingthe di Verent flows of information, with specific account taken of the workload and attention level of the driver; and — The development of prototype services that aim to be truly intelligent.

ADASE Advanced Driver Assistance Systems in Europe (ADASE) is a thematic network on Active Safety and Driver Assistance Systems sponsored by the IST-programme. The project aims at coordinating, enhancing and further disseminatingthe research activities at national and intern ational level in these fields, through organising five workshops on key areas of importance and dissemination on the State of the Art, roadmaps 9098191010 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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and requirements. TNO is involved in the deployment of the State of the Art, the State of Practice, the State of Policy and the roadmap of ADASE and organises an expert workshop on safety, throughput and comfort.

PROSPER TNO Inro currently participates in PROSPER (Project for Research On Speed adaptation Policies on European Roads), which is part of the Competitive And Sustainable Growth (Growth) Programme. The project will assess the cost eVectiveness of ISA road speed management methods in relation to traditional methods, usingdemonstrations and tools such as simulation models. Possi ble implementation strategies for diVerent road speed management methods will also be analysed.

DECA The Dutch Evaluation of the ChauVeur Assistant focuses on an evaluation in terms of safety and traYc flow of the ChauVeur Assistant, a combined Lane Keepingand ACC system for trucks. With the a id of experiments in TNO’s Driver Simulator and the MIXIC microscopic traYc simulation model, the eVects of the ChauVeur Assistant on safety and traYc flow are investigated. DECA should help the Dutch government to define their policy with respect such systems, eg to decide if the government should stimulate or regulate such developments.

CarTALK 2000 TNO Inro has conducted traYc simulations for the CarTALK 2000 project in the Information Society Technology (IST) Programme of the fifth framework. The aim of CarTALK is both to build prototypes of next-generation inter-vehicle communication applications and to identify the most promisingaspects of these new applications. TNO Inro contributes to the scenario design and cost-benefit analysis through providingtra Yc flow and safety statistics, based on modellingof the new applications in t he MIXIC traYc simulation model.

PRIME The general aim of the EC research project PRIME (Prediction of congestion and incidents in Real time, for intelligent Incident Management and Emergency TraYc Management) was to develop innovative methods to increase the eVectiveness of incident management policies and increase road safety. TNO Inro was specifically involved in the development and calibration of models for the real-time estimation of incident probabilities on motorways, usingincident and tra Yc data from the Barcelona ringroad. More information is available at the Internet: http://www.trg.soton.ac.uk/ prime/index.htm

Vehicle Use

If drivers paid for road use through a national satellite location system, what else could the technology be used for and what are the implications? The introduction of systems which are usinga (satellite) location system can also be an opportunity for other additional services. TNO Inro is a member of a project team that investigates the feasibility of an electronic vehicle identification system. This research project also investigates additional services which could be implemented and the implications it has. Electronic Vehicle Identification (EVI) can be defined as an electronic device that allows the unique, remote and reliable communication of a vehicle’s identifying parameters. It would typically comprise an in-vehicle data storage element, suitable and secure interfaces and a vehicle-to-infrastructure data communication element. EVI is an enabler for public applications meeting stringent requirements regarding security, privacy and fraud resistance. Implemented in the most basic, rudimentary way it could have some benefits in terms of eYciency when identifyingvehicles. Implemented in a more sophisticated fashion it could support a range of applications and the benefits could become considerable in terms of safety, security and eYciency. Amongthe potentially supported applications are enforcement, emergency and transit vehicle priority, crime prevention and detection, vehicle administration and registration, environmental issues, and applications such as demand management, traYc monitoring and road charging. EVI is an enabler and not an application in itself. It does not preclude the implementation of any specific type of public service. Until now there has been no comprehensive study of the requirements for and feasibility of an EU-wide implementation of EVI. Despite the fact that technologies are available for some specific implementations of EVI, policymakingin this field cannot advance without a careful study of the full range of aspects ranging from technical issues to complex non-technical issues. Technical aspects include in-vehicle integration, data security and communications requirements, and non-technical issues include legal, institutional, operational and socio-political aspects such as general acceptance. October 2003 9098191011 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by PACTS (CAR 11)

Cars of the Future

1. PACTS welcomes the opportunity to respond to this inquiry on “Cars of the Future”. PACTS is an associate parliamentary group and registered charity advising and informingMembers of Parliament on road, rail and air safety issues. It brings together technical expertise from the public, private, academic and professional sectors to promote research-based solutions to transport safety problems. Its charitable objective is to promote transport safety legislation to protect human life. 2. PACTS’ vision for cars of the future is one in which cars are safer and more sustainable, and form one element of a safer, sustainable and integrated transport system. Improved vehicle design, incorporating advanced designs for the prevention of accidents or the reduction of the severity of accidents, will be key to this. PACTS believes that cars of the future must also incorporate existingsafety technologiesas well as future possibilities. It is also necessary to take a strategic approach to road safety, in which advanced vehicle design is complemented by an improved road environment and driver education. 3. This response to the Transport Committee’s Inquiry into “Cars of the Future” aims to address some of the questions identified by the Inquiry from a safety perspective, evaluate the potential of new safety technologies and outline PACTS’ recommendations for ensuring that cars of the future are safer for all road users.

How Much Safer Can Cars be Made for Drivers and Pedestrians?

4. PACTS believes that there is considerable scope for makingcars safer fo r not only drivers and pedestrians but also cyclists and other road users. In 2002, there were 3,124 deaths and 33,645 serious injuries caused by road accidents4; the vast majority of these involved collisions with vehicles. Safer vehicle design and new “eSafety” technologies could have a major impact on reducing these casualties, especially for vulnerable road users. For example, the government has estimated a 20% reduction in serious pedestrian casualties if safer vehicle fronts are introduced; Intelligent Speed Adaptation could lead to a 59% cut in road accident fatalities; and the European Commission estimates that in-car “e-Call” emergency call systems could cut fatalities by 10%. Other technologies also have significant scope for makingvehicles safer and for preventingroad accidents. DaimlerChysler predicts that every second ac cident will be able to be prevented in future5. While it is unclear how this was calculated, it is nevertheless a laudable aim to work towards. 5. Initiatives for improving safety through vehicle design can be classified into short-term measures, where the appropriate technology is already available and has been fitted on some vehicles, medium-term initiatives where the technology is in development and should be in operation within the next five years, and longer-term measures where speculative ideas for improving vehicle safety are still in early stages of development. 6. Short-term measures, includingexistingtechnologies,have a major po tential for makingcars safer for drivers and pedestrians, with immediate eVect. These technologies include safer car fronts, ABS, brake assist, electronic skid protection and adaptive cruise control. 7. Safer vehicle fronts could have a major and immediate impact on reducing casualties amongvulnerable road users. In 2001, 8,631 pedestrians and 2,450 pedal cyclists were killed or seriously injured in road accidents; the vast majority of these accidents involved collisions with cars6. The European Enhanced Vehicle-safety Committee (EEVC) has developed four car crash performance tests for the protection of vulnerable road users. If all of these tests were met, 20% of pedestrian deaths and serious injuries could be prevented each year7. Prototype cars meetingthese tests were developed as longagoas the 1980s ; some existingcars already meet 75% of the requirements 8. Followingrecent European legislation,it will soon be mandatory for new vehicles to meet two of these tests by 2010. PACTS believes that car manufacturers should be encouraged to meet all four of the tests on all new vehicles as soon as possible. The UK Government should assist in monitoringprogresson pedestrian protectio n tests and assessingtheir impact on road safety. PACTS further suggests that pedestrian protection ratings could be merged with current Euro-NCAP car safety star ratings. The Government should consider oVeringreductions in vehicle excise duty (similar to that oVered for more eYcient vehicles) for vehicles with better safety ratings for both pedestrians and occupants.

4 DfT. 2003. Road Casualties Great Britain 2002: Annual Report. DfT: London. 5 “Step by step vision of Accident-free Driving”. 2002. RoadSafe Winter 2002–03. p 79. 6 DfT. 2003. op cit. 7 DETR. 2000. Tomorrow’s Roads: Safer for Everyone. DETR: London. p 57. 8 PACTS. 2001. “Safer Car Fronts For Vulnerable Car Users: A PACTS Briefing”. http://www.pacts.org.uk/ 9098191011 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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8. Advanced BrakingSystem (ABS) was first introduced over 30 years agoyet e ven now is fitted on only 66% of the vehicle parc and 91% of new vehicles9. It prevents brakes lockingin the event of rapid application, and in test situations considerably reduces stoppingdistances. However , several studies have found no significant impact of ABS in reducing road casualties10. Drivers in vehicles equipped with ABS may modify their behaviour (egby increasingspeed and reducingsafety margins),as A BS has often been perceived as a performance benefit rather than as a safety measure by many motorists. ABS fitment throughout the car fleet will need to be accompanied by trainingfor car sales sta V to ensure that the circumstances in which ABS is eVective (and, more importantly, those where it is not) are properly understood by purchasers11. However, ABS may become more eVective in synergy with technologies such as Intelligent Speed Adaptation (see below), which would limit negative behaviour modification. 9. “Emergency Brake Assist” detests rapid application of the brake pedal in emergency situation and assists in providingmaximum brakingpower. As even in emergencysituatio ns drivers do not tend to apply maximum brakingpressure, this can considerably reduce stoppingdistanc es12. This technology is already available on many new luxury cars. Similar technologies would allow gentler stoppingin city tra Yc or better responses in bumper-to-bumper traYc. PACTS would welcome increased application of this technology and further research into its eVectiveness for preventingaccidents. 10. Electronic Skid Protection (ESP—also known as Electronic Stability Programme) uses sensor impulses to prevent hazardous lateral skiddingwhen cars travel around co rners. It is already available in 38% of new vehicles13, and has considerable potential to improve road safety. Vehicle manufacturers’ statistics show that in 2001 a 4% reduction in accidents and a 12% reduction in roll-over accidents could be directly attributable to ESP14. ESP would also be cost-eVective to introduce: The Observer estimates that it could be introduced for only £70 per vehicle15. PACTS recommends that the Government support ESP beingintroduced to all new vehicles. A future European directive or recom mendation coveringESP and other existingtechnologiessuch as brake assist may in future be advisabl e should such technologies fail to be widely incorporated into new vehicle design. 11. Adaptive Cruise Control (ACC) is similar to Cruise Control, but can detect slower vehicles ahead and adjusts the speed appropriately. This technology is already fitted to a number of luxury vehicles. While there is clear potential for safety benefits from ACC, recent European research into ACC predicted few significant impacts until technology penetration rates reach above 20%16. This technology may also be prohibitively expensive at up to ƒ2,000 per vehicle17. PACTS would welcome further research into the safety potential of ACC, includingits impact on driver behaviour. 12. There are a number of safety initiatives under development that could be introduced in comingyears and may significantly shape cars of the future. These medium-term measures include Intelligent Speed Adaptation, lane support mechanisms, “crumple zones” to reduce the impact of crashes involvingtrucks and in-car emergency call systems. 13. Intelligent Speed Adaptation (ISA) has a major potential to enable a dramatic reduction in road casualties. ISA would use in-vehicle digital road maps combined with GPS systems to enable cars to “know” the permitted or maximum speed for a road. Such systems could potentially also warn of upcominghazards and instruct vehicles to reduce speed accordingly. Trials involving 20 vehicles fitted with ISA are currently underway in the UK, and trials involving6,000 vehicles in Sweden and 20 veh icles in the Netherlands are beingconducted. Research from the Institute for Transport Studies has pr edicted that a dynamic (ie adapts accordingto conditions), mandatory ISA system fitted in 60% of vehicles co uld reduce fatal accidents by 59% and all injury accidents by 36%18. The impact on overall journey time would be minimal: trials showed that journey time may rise between zero and four per cent. By 2010, cost per vehicle of ISA systems could be as low as £37219. ISA would also have the additional benefit of reducingfuel consumption by over 5%20. ISA attracts considerable public support: a September 2002 poll by MORI showed 70% support for in-car warnings when the speed limit is exceeded and 58% support for physical speed limiters should road humps

9 Commission of the European Communities. 2003. Communication from the Commission to the Council and the European Parliament: Information and Communication Technologies for Safe and Intelligent Vehicles. (SEC(2003) 963). Commission of the European Communities: Brussels. p 12. 10 Summarised by Ericssons, J. 2003. “Comments on the European Commission’s Communication on Intelligent and Communications Technologies for Safe and Intelligent Vehicles”. Lund University: Lund, Sweden. 11 PACTS. 2001. “Pedestrian Protection—PACTS Response”. PACTS website: http://www.pacts.org.uk 12 “Step by step vision of Accident-free Driving”. 2002. RoadSafe Winter 2002–03. p 85. 13 Commission of the European Communities. 2003. op cit, p 12. 14 Commission of the European Communities. 2003. op cit. p 10. 15 Jowit, J. 2003. “For only £70 any motorist could walk away from a smash”. The Observer 20 July 2003. 16 Transport Research Knowledge Centre. 2003. “DIATS: Deployment of Inter-urban Advanced Transport Telematics Test Scenarios: Project Results”. European Commission Transport website: http://europa.eu.int/comm/transport/extra/ diatsia.html 17 Commission of the European Communities. 2003. op cit. p 12. 18 Carsten, O, and Fowkes, M. 2000. External Vehicle Speed Control: Executive Summary of Project Results. Institute for Transport Studies: Leeds. p 22. 19 Cost per vehicle in 1998£. ibid, p 23. 20 ibid, p 22. 9098191011 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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be removed as a result21. PACTS recommends that ISA should be further funded and researched. A national digital road map with speed limits should be provided, to enable voluntary fitment. The UK Government should lead by example by fittingISA to the vehicles in its fleet and by encour aging Local Authorities to do the same. The Government should cooperate with other European countries to exchange knowledge and experience on ISA. 14. Lane Departure Warnings and other Lane Support mechanisms would detect and warn drivers of unintentional change of lane. Such technologies already exist in some vehicles, and continuingresearch and linkages with technology such as GPS may make them more eVective in future. International evidence indicates that this type of technology has considerable potential to prevent accidents: in the US, the National Highway TraYc Safety Agency estimates that lane change and merge collisions could be cut in half; a Dutch study expects a reduction of 37% in all side impact collisions and a reduction of 24% of single vehicle accidents22. In Germany, approximately 12% of all road accidents are attributable to overtakingerrors or mistakes while turningo V23. PACTS would welcome more research into the eVectiveness of Lane Support mechanisms and would support Lane Departure Warnings being fitted in more new vehicles. 15. Cars and trucks can be made safer for all road users through use of “crumple zones”. These are designed to absorb energy in frontal collisions with cars. Scania estimate that a 600mm deformation zone or crumple zone fitted to the front of trucks could save 900 lives per year in Europe24. PACTS supports this initiative and would welcome research into the transfer of this technology to other vehicles. 16. When cars are involved in accidents, swift emergency response times are key. However, the location of accidents cannot be accurately determined in 40% of emergency calls25. E-call systems would equip cars with emergency alarms that could automatically alert emergency services of accurate positioning information in the event of an accident. The European Commission estimates that “a 10% reduction in fatalities can be achieved by improvements in the response time, due to better location information”26. PACTS supports the development of in-car e-Call systems as a means of cuttingroad accident fatalities. 17. Longer-term measures to improve safety of cars may in future include external air bags to reduce the impact on pedestrians hit by cars and electronic sensors to predict and avoid collisions with other vehicles, pedestrians or cyclists. Research into these areas is currently beingcon ducted by the auto industry. While PACTS welcomes this research, these futuristic technologies should not be given priority over existing technology that could have a real and immediate impact on reducing road casualties. 18. With all of the new technologies, it is important to be aware of how they are introduced and what accompanies them. Not all technologies with safety potential will succeed in promotingsafer driving. Currently-available telematic systems for alertingdrivers of upcoming hazards are marketed on the basis that they will be able to warn of speed cameras; this may encourage speeding where cameras are not present. There is also evidence (discussed above) that drivers may display negative behaviour modification in response to safety technologies including ABS. PACTS believes that the safety potential for many of these new technologies would be maximised if used in conjunction with Intelligent Speed Adaptation, in order to prevent negative behaviour modification. 19. All of the technologies discussed above will need cooperation between key stakeholders includingcar manufacturers, consumers, researchers and government in order to be successfully introduced across the vehicle parc. In Tomorrow’s Roads: Safer for Everyone, the government notes that “The motor industry is highly competitive. Unless there is a consumer or other demand for a safety feature is it unlikely to be oVered”27. A recent European Commission report on ICT for vehicle safety similarly noted that “if the pace of market introduction [of safety technologies] is dictated solely by the market economies and competition, it can take a very longtime” 28. PACTS believes that for many important safety features to be included in the design of all new vehicles, legislation or government guidance may be needed at national or European level. A strategic approach is necessary, incorporating the contributions of all relevant actors.

Is the Human Driver Better Than the Computer—Where do we Draw the Line? 20. Human error is thought to be to blame for up to 95% of all road accidents29, suggesting that appropriate computer-based mechanisms could improve road safety. While it seems unlikely that driverless cars will be introduced in the near future, increasingnumbers of safety de vices incorporate computerised technology (eg ISA, Lane Support and Adaptive Cruise Control, discussed above). The aim of these devices is to correct driver error or alert drivers to hazards. Rather than eliminatingthe human driver, these and

21 Mori. 2002. “Backingfor In-car Speed Alarm”. Mori website: http://www.m ori.com/polls/2002/fia.shtml 22 Commission of the European Communities. 2003. op cit. p 11. 23 European Commission. 2002. eSafety: Final Report of the eSafety WorkingG roup on Road Safety. EC Information Society DG: Brussels. p 24. 24 Scania. 2003. “A Nose for SavingLives”. Scania World 4: 8-9. 25 European Commission. 2002. op cit. p 28. 26 ibid, p 29. 27 DETR. 2000. op cit. p 57. 28 Commission of the European Communities. 2003. op cit. p 12. 29 European Commission. 2002. op cit. p 14. 9098191011 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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other technologies instead change the human’s role. In developing new technologies, it should be remembered that humans are relatively good at exercising judgement, but considerably less good at simply monitoringcomputerised systems, as significantevidence from automatio n of aeroplanes suggests30. Any new technology needs to assist, not hinder, drivers’ ability to take decisions. 21. In as far as in-car computerised technology helps to prevent accidents, it is to be welcomed, but there are risks presented by the blurringof distinction between human driver an d computer. The first is that the human driver overcompensates for the safety intervention, for example by increasingvehicle speed or reducing safety margins. This negative behaviour modification has been shown to limit the eVectiveness of ABS31. The second concern is sensory overload from various warningsystems and n ew car features will confuse drivers. To counter this risk, the European Commission has published a Recommendation on Safe and EYcient In-vehicle Information and Communication Systems, which provides guidance to manufacturers on human-machine interaction32. Third, drivers may become less careful with technology that they assume will prevent accidents; alternatively they may not know how to drive successfully should systems fail. The Guild of Experienced Motorists has expressed worry that drivers are losingsensitivity to drivingconditions, and this may have negativesafety implications 33. Appropriate driver education about new technologies will continue to be important. The final concern is that the technology may fail and may cause accidents, thus leadingto a loss of trust and confidence in these meas ures34. Failure of airbags, for example, led to public mistrust of airbags, even though the risks presented by airbags were much less than the lives that they saved. New computerised safety mechanisms should be properly tested and considered before they are introduced, with a view to avoidingsimilar situations.

Can E-safety Initiatives Prevent Accidents or Lessen Their Impacts? 22. As the above description of new technologies demonstrates, research indicates major potential for e- safety initiatives to prevent accidents and reduce rates of casualties and fatalities. Intelligent Speed Adaptation has perhaps the greatest potential for this, with an expected reduction of fatalities of up to 59%. Other “e-Safety” technologies also show significant scope for reducing the number of people killed or seriously injured in road accidents, or avoidingthese accidents altoget her. PACTS welcomes the work on eSafety beingconducted by the European Commission, and would support fur ther research into how new technologies can save lives on the road.

Is There a Trend to Bigger and Heavier Cars? 23. While there has, in recent years, been a small shift towards larger and heaver vehicles, particularly SUVs, from a safety as well as an environmental perspective this is not a welcome development. While larger and heavier cars may in many cases be safer for the occupants, they are significantly more dangerous for pedestrians, cyclists and drivers and passengers in other vehicles. The use of “bull bars” on SUVs, in particular, presents a major hazard for pedestrians, and PACTS welcomes the commitment by the European automotive industry to cease to equip them on new vehicles. 24. The trend to bigger and heavier cars is not reversible, however: after the oil crisis in the USA in the 1970s, there was a significant trend towards smaller and lighter cars. Fuel eYciency considerations may limit the extent of popularity of larger vehicles. PACTS believes that the Government should continue to look at ways of encouraging trends towards smaller and safer vehicles.

What Influence Does the UK Government Have in a Global Car Market? 25. While markets in the auto industry as in other sectors have become increasingly globalised, this does not mean that national governments lose all ability to shape the industry. The UK Government continues to have significant influence globally, due to the size of the UK car market, the UK’s position as a global leader in road safety and the role of Britain’s advanced design industry. PACTS believes there is considerable scope for the UK Government to work together with manufacturers, researchers and other stakeholders to continue to promote safer vehicle design and road transport. 26. In 1998, there were over 23 million cars in the UK35. While this pales in comparison to the United States (with nearly 130 million), it nonetheless represents a very significant market and suggests that the importance of this market continues to provide the UK government with some degree of influence. More importantly, however, as the UK has one of the best road safety records in Europe, the UK is often be seen as

30 Mckenna, F. 1997. “The 8th Westminster Lecture on Transport Safety”. Parliamentary Advisory Council on Transport Safety: London. p 2–3. 31 Ericssons, J. 2003. “Comments on the European Commission’s Communication on Intelligent and Communications Technologies for Safe and Intelligent Vehicles”. Lund University: Lund, Sweden. 32 European Commission. 2002. op cit. p 19. 33 Guild of Experienced Motorists. 2003. “Cars are getting too clever for our own good”. Guild of Experienced Motorists Road Safety Website: http://www.roadsafety.org.uk 34 See Mckenna, F. 1997. op cit. 35 DETR. 2000. Transport Statistics Great Britain. DETR: London. p 165. 9098191011 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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a leader and trend setter in safety legislation by other European countries and by the European Commission. Several road safety initiatives (such as mandatory wearingof seatbelts o r road safety auditing) that have been first enacted in the UK have since been extended throughout the EU. This gives the UK Government a degree of influence and authority in a global car market that it may not otherwise possess. Finally, the international importance of the UK’s advanced design industry may continue to allow the UK significant influence in shapinghow vehicles are designed.

Conclusions and Recommendation for Action 27. Technologies exist and are being developed to make cars of the future safer for drivers, passengers, pedestrians, cyclists and other road users. Such technologies may not be introduced automatically, however, but may require government and consumer support and political will. PACTS suggests that the Government consider strategies to encourage take-up of new vehicle safety technologies. Incentives could include reductions in Vehicle Excise Duty (followingthe current model of reducti ons for more eYcient vehicles); encouraging the insurance industry to oVer lower premiums for safer vehicles and eVectively trained drivers; and fittingall Government vehicles with new safety technologiesand encou raging Local Authorities to do the same. 28. PACTS believe that a strategic approach will be necessary to ensure that these technologies are introduced and distributed quickly and appropriately. Government should co-operate with vehicle manufacturers, road users, academic specialists, road safety professionals and other key actors to ensure that safety remains a key priority in vehicle design and that new safety technologies are used eVectively. PACTS suggests the development of a high-level forum comprising of government departments, researchers, car industry representatives and consumer groups to review and monitor the implementation and eVectiveness of new vehicle technologies and to discuss how future vehicle design can contribute to road safety. 29. Developments in vehicle design safety should be promoted in conjunction with other road safety initiatives, includingimproved road environment and appropriate drive r education. In particular, in-car telematics systems may be able to operate most eVectively in conjunction with intelligent systems of traYc management. PACTS recommends that the potential for improved vehicle design in conjunction with better road management should be considered in developing strategies for meetingroad casualty reduction targets. 30. Intelligent Speed Adaptation and safer vehicle fronts have shown the most potential for casualty reduction, and should be singled out for particular support.

Memorandum by the LP Gas Association (CAR 12)

CARS OF THE FUTURE

Introduction The Liquified Petroleum Gas Association (LPGA) represents all the major LP Gas supply companies, the autogas converters/vehicle manufacturers and the equipment suppliers in the UK. The sales from member companies cover over 95% of the total LP gas sales in the UK. Around 60% of the LPG used in the UK is a naturally occurringby-product of th e natural gas extraction process in the North Sea. This source of product is not only very clean but also provides a unique security of supply for consumers as the UK is a net exporter of LPG. This submission is limited to the Clean Vehicle Technology section of your enquiry.

Fuels—Autogas, the Bridge to the Future of Hydrogen In order to provide the very latest environmental performance data on currently available for autogas, diesel and petrol vehicles, a ƒ400,000 independent pan-European emission testingprogrammehas been completed. This submission incorporates summary information, the full document is expected to be available by the end of this month and if a copy is required please contact the LP Gas Association by telephone on 01425 461612 or via email mailwlpga.co.uk. The vehicles were tested at four independent laboratories as follows: Millbrook ProvingGround, UK TNO, The Netherlands IFP, France TUV, Germany Twenty-six vehicle fuel systems were tested (20 cars and six vans). The vehicles were selected on the basis of beingthe best available technologyin early 2003 (minimum of Euro III on all fuels) and available in equivalent diesel, petrol and LP gas versions. Diesel vehicles were selected as havingthe nearest equivalent 9098191012 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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power to the LP gas vehicle and where more than one diesel option was available, the lowest power vehicle was selected. For the total of all vehicles tested the average power for the diesel vehicles was lower than for the LP gas vehicles. Vehicles were tested on the European Drive Cycle (EDC) and also the Artemis Cycle (CADC). The latter test better reflects “real world” drivingoperations as it is a longertest c ycle, with a wider range of speeds and performance parameters. The results quoted are based on the Artemis drive cycle and a well-to wheel basis to reflect as accurately as possible the true environmental impact, and are the average for all the vehicles tested. Climate Change:

Reduction of CO2, the main greenhouse gas, is a key target for the UK Government.

Petrol CO2 is 20.3% more than autogas

Diesel CO2 is 1.8% more than autogas The results conclusively demonstrate the carbon benefits of autogas vehicles. It also completely dispels the myth that there is a carbon price to pay, against diesel vehicles, for the proven air quality benefits of autogas. Air Quality:

The quality of air in our towns and cities is still a major concern for society with NOx and fine particles beingthe main cause for concern.

Petrol NOx is 120% to 180% more than autogas, depending on the drive cycle

Diesel NOx is over 2,000% more than autogas for any drive cycle

In other words, one diesel vehicle emits the same NOx as over 20 autogas vehicles. The tests on fine particles on the urban emission cycle demonstrates that diesel vehicles emit up to 120 times more fine particles than autogas. The nature of Autogas, an intrinsically clean technology, is such that there is no requirement for “after burn” filter equipment, that can vary in quality and success, and require very careful maintenance.

When Oxides of Nitrogen (NOx) and Volatile Organic Compounds (VOCs) mix in the presence of heat and sunlight, ozone is formed. The detrimental eVects on health have been well documented. On 12 August 2003 saw the Daily Telegraph report that summer time smog, a mixture of ozone and other noxious gases, broke health limits at 76 out of 80 monitoringsites in the UK.

Whilst diesel technologies are being developed to reduce NOx, there is at present none which are fully proven and there is a question over the eVectiveness of traps in certain workingconditions. Furthermore, the top four autogas vehicle manufacturers (Ford, MG Rover, Vauxhall and Volvo) have all confirmed their ability to develop improved autogas vehicles given the right incentives package. Monofuel autogas vehicles could improve existing CO2 emissions by an additional 10% and incremental costs of production compared to bi fuel could be reduced by as much as 60%. Autogas is indeed an excellent bridge to future technologies providing real environmental benefits right now.

Success of Government Grant and Tax Break Initiatives to Date Fuel Duty: In March 2001 the Government reduced duty on autogas by 40% and, at the same time, froze the duty in real terms until at least 2004. Followingthis action all sectors of the i ndustry seized this opportunity to accelerate their investment and activity plans to create a longterm, sust ainable autogas market. This resulted in an unprecedented period of growth that has resulted in 100,000 autogas vehicles now on the road and around 1,300 public refuellingpoints nationwide—the most per 1,000 v ehicles in Europe. The total cost of this investment to date by vehicle suppliers, fuel companies and consumers is in excess of £250 million. Fuel duty needs to be set at a level which enables vehicle owners to convert their vehicles and purchase autogas at an economic level compared diesel. The diVerential needs to be assured. Since the Government consultation was announced in the April budget this year, the after-market (conversion post registration) has been in serious trouble. A survey has shown that in the months May to July inclusive, business has declined by around 50% compared to the same period last year. Two high quality medium sized conversion companies went out of business at the beginning of July and several other smaller companies have also gone out of business in recent weeks. OEM vehicles have not been aVected in the same way as the after-market this year as the positive impact of the London congestion charging has balanced, to some extent, the negative impact of the consultation document. However, OEM vehicles only represented around 20% of vehicles comingon the road in 2002 and only 10% in 2001. 9098191012 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Powershift Funding: The grants towards the cost of conversion depend on the level of emissions improvement and encourage the quality side of the conversion industry to rise to the highest levels of emission performance. In recent years Powershift has achieved considerable success in raisingthe standa rd of vehicle conversions and the Powershift emission standards for gas powered vehicles are now the highest in Europe. However the costs of demonstratinglow emissions are now so highthat most a ftermarket converters are no longer trying to achieve Powershift funding, which is unfortunate. Company Car Tax:

The introduction of a CO2 based BIK system for company cars in April 2002 has resulted in a substantial increase in diesel sales to the fleet market. With the introduction to the market of Euro IV diesels in 2003–04, the removal of the three per cent surcharge on these vehicles will further boost their sales uptake, but the NOx emission from these vehicles will still be substantially higher than for LPG with no climate change benefit.

What does the Government need to do? The partnership between Government, Industry and Consumers that has achieved so much success in the development of the autogas industry needs now to enter a new phase of commitment and co-operation. We know from recent experience that consumers will adopt alternatively fuelled vehicles if they can be assured of quality products, extensive infrastructure support and fiscal incentives. If one of these elements is missing the market will stall, as has happened recently pendingthe outcome of the c onsultation. Fuel Duty: To remove the uncertainty in the marketplace the LPG industry has requested the Government to provide an on-going assured fiscal strategy of at least five years ie until 2009. Duringthe initial period it is proposed that the duty on autogas is set at 10% of the duty on ULS petrol. In 2004, key environmental and other key performance indicators to be achieved by the industry would be agreed with the DfT. Progress against these targets would be reviewed by the Government after three years ie in 2007. At this time a further rollingfive-year strategycould be a nnounced ie for between 2009 and 2014. The conversion and runningcost for an LPG car compared to petrol and diesel is marginal. Typically, compared to petrol no savingis made in the first three years unless Powershi ft fundinghas been obtained (see below), and against diesel it will cost around £250 more per annum unless Powershift fundinghas been obtained. Clearly with such marginal economics any increase in fuel duty at this stage could have a serious negative eVect on the market. Powershift Funding: Fundingneeds to remain in operation until economies of scale enable cost o f conversions to reduce and the market to be self sustaining. Government has been requested to continue the existingfundingsystem for a period of four years up until 2008 and then a progressively reducing grant system applied until 2011. We also believe that there is a short term opportunity to significantly improve the emissions from older vehicles. Because of the wider range of vehicles and likely small volumes per model, it is not economic to go through a full emission testing regime for each kit. However, we believe eVective multipoint and sequential kits fitted to Euro III and particularly Euro II vehicles gain a significant advantage over petrol on hydrocarbons and NOx as well as providingthe usual CO 2 saving. We would therefore propose a second tier Powershift register operated on a similar basis to the proven Autogas! Scheme in Scotland. Company Car Tax: To encourage clean, high quality company cars it is proposed that the extra cost for the gas system for a purpose built autogas vehicle is removed from the BIK calculation. It is also proposed that the 1% discount for autogas vehicles is increased to 3%. Legislation/Regulation of Conversions: Traditionally all conversions were undertaken by “Aftermarket” installers but with the market growth since 1998, OEM’s were encouraged to develop their own conversions with their market share risingto 10% in 2001 and 20% in 2002. In consultation with the DfT in 1998 the LP Gas Association initiated the LPGA Approved Installer Scheme. This is a voluntary scheme with assessment, inspection and ongoingpolicingwhere individuals demonstrate that they have the necessary skills and knowledge in order to carry out this work in a safe and satisfactory manner. Currently there are around 200 participatingbusin esses in the Scheme compared with an estimated 900 plus installers in the UK.

LPGA Approved Installers are required to only fit equipment which will result in a 10% reduction in CO2 and HC as measured at the tailpipe. 9098191012 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Whilst we believe that the majority of LPG installations are undertaken by OEM’s or LPGA Approved Installers, nevertheless this situation means that a significant number of conversions are not subject to any form of control in terms of safety or emissions performance. Within this segment are installers who use inferior equipment and standards—a matter of concern well known to the DfT and TradingStandards. Such installers not only produce potentially unsafe vehicles but thrive by undercuttingon price the responsible elements of the industry and bringing into question the viability of the good installers. Also within this segment are members of the public operating on a DIY basis. In the UK we can take advantage of the experience gained over many years of regulating the conversion of vehicles to run on LPG in other European countries, in particular Holland and France who already have controls in place over their LPG Industry, both in terms of safe installations and approved equipment. Improvement in the unsatisfactory areas of the aftermarket can only be achieved by means of Government legislation/regulation as used in other countries. This wouldoVer full control over both the safety and quality of conversions and ensure the use of systems that provide emission reductions. The need is for Legislation or a regulatory requirement for every aftermarket conversion to be certified on completion by a registered inspector (this could be a V.O.S.A. examiner at an existingV.O.S.A Vehicle Test Station or an LPGA Approved Installer) with the environmental performance controlled by only permittingthe installation of LPG systems, which have demonstrated envi ronmental advantages. Such proposals are currently with the DfT.

Conclusion The recent history of the autogas market is a model example of public/private co-operation. A policy initiative from the Government resulted in reciprocal industry investment and the resultingassurance of economic return meant that consumers had the confidence to invest in autogas technology. The eyes of the whole automotive industry and drivingpopulation will view the outcome of the current consultation as a barometer to the government’s commitment to alternative fuels and, therefore, base their decisions on investingin future technologieson it. The fundamentals for a sustainable UK autogas industry are now in place with an extensive infrastructure and it is proud to have developed some of the best autogas vehicles in the world. However, individuals and companies have not yet obtained a payback on their £250 million investment in this market. Given continued, assured Government support, the industry looks forward to the future with confidence in its ability to deliver further environmental and economic benefits for the UK for the next 10 to 15 years until hydrogen becomes a viable alternative. October 2003

Memorandum by the Institution of Electrical Engineers (IEE) (CAR 13)

CARS OF THE FUTURE

1. Clean Vehicle Technology

What fuels will be used to drive the vehicles of the future? 1.1 Petrol and diesel are likely to remain important fuels in the medium term and should not be overlooked in future plans. The opportunities for emissions to be reduced after 2010 will be limited as new regulations come into force. Hybrid electric/petrol vehicles are likely to be needed to plugthe (up to 35 year) gap until the technology for the renewable generation of hydrogen is suYciently developed (hydrogen is technically a transfer medium and not a fuel as it does not occur as a natural resource). It is expected that hydrogen will be used for electricity generation before being used within fuel cells as a vehicle “fuel”. Whether powered by battery or fuel cell, in the end all vehicles will be propelled by electrical drives, which will enable additional vehicle benefits to be realised. The use of diesel may continue longer, particularly heavy commercial vehicles because of the (increasing) eYciency of the engines, catalytic converters and particulate traps. Liquid Petroleum Gas (LPG) is unlikely to have a substantial separate future as petrol engine design improves. LPS has been useful in raisingawareness of alternative fuels.

To what extent will they solve environmental problems? 1.2 It is impossible to devise a transportation method for movingfrom A to B without incurringsome environmental cost. It is easy just to consider the direct environmental issues relatingto globalwarmingand carbon dioxide reduction. The reduction in the contribution to these issues may be great as long as consideration is given to the whole energy cycle, eg the generation and distribution of electricity or hydrogen. 9098191013 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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1.3 New fuel technologies open up new areas of environmental and safety concerns, includingthe disposal/recyclingof new materials (egbatteries) and the use of highvol tages. The access and cost of the new fuels will also have a great eVect upon how people use transportation, which in turn will aVect the impact upon the environment.

How successful have Government grant and tax break initiatives been to date? 1.4 Government incentives have encouraged the development of many local vehicle experiments, particularly bus and van fleets run by utility and transport companies. Merseytravel, for example have been operating12 electric/compressed natural gasbuses on local routes for ov er five years. However, the Government has failed to attract any major vehicle user to change over to an alternative fuel, even within the Government’s area of direct influence. The number of private hybrid or electric cars purchased has been small despite the current tax advantages and exclusions (eg Road User Charges in London).

What does the Government need to do to make it happen? 1.5 The requirements for mobility will continue to increase with growth in personal wealth. Whilst mobility may be supported by a range of evolving “bespoke” services to satisfy individual requirements more eYciently, cars will still be owned and used. Government should adopt a coherent multifaceted approach with a variety of financial and other incentives egaccess benefits , a clear programme of increasingly stringent regulations which manufacturers can practically work towards and programmes to influence behaviour ( egawareness raising).There is a lack of a clear integ rated approach by Government. 1.6 An integrated approach requires the support of research findings. Each alternative fuel needs to be investigated with full account of manufacture, storage, distribution and the safety and environmental eVects of both provision to point of use and operation. Each of these areas need to be researched generically so that a development in one area is not then delayed while the work in the wider issues are looked at. 1.7 The Government needs to provide a clear vision of the future, which engages all stakeholders and harmonises policies. The legislative and tax regime are valuable tools to set the forward direction of private sector R&D to meet, for example lower emission fuel or to develop safe delivery and storage systems. The technology will lead. However Government needs to encourage the development and adoption of technical specifications.

2. Vehicle Design and Control

How much safer can cars be made for drivers and pedestrians? 2.1 Car safety is historically regarded in terms of collisions, where recent advances have resulted in significant improvements for drivers and more recently their passengers. However, there still remain issues relatingto passengersafety for side impacts and also for rear seat passen gers. Increases in safety have been and will be continuous and driven by legislative requirements and demands from consumers made aware of issues by programmes like the New Car assessment Programme (NCAP). Pedestrian safety has tended to be a secondary consideration, but significant improvements could and are beingachieved. 2.2 The other major area where cars can be made safer is in relation to crime and criminality. As cars become harder to steal, there is an increasingtrend to targetthe more vuln erable part, the occupants. Recent trends show a small but increasingtrend in car jackingand theft from cars w hilst the occupants are inside. These events can be particularly traumatic for those victims. Technology could play a significant role in improvingcar safety in this area and in other areas where occupants return ingto a vehicle are vulnerable, dark car parks etc. The other area where technology can play a significant role is in dealingwith vehicles that refuse to stop for police. These vehicles which are often stolen or otherwise used in crime, pose a significant risk to other car users and pedestrians. EVective technological solutions need to be developed to safely bringvehicles to a stop, without the need for the police to pursue or make physical contact with the vehicle to stop it.

Is the human driver better than the computer—where do we draw the line? 2.3 The aircraft industry has shown that the complementary human and automatic responses can result in safety and eYciency benefits. There is no absolute answer at present to the balance between human and automation, but research will provide new technologies that will continue the existingimprovements. The Government’s role will be to encourage the private sector and carry out its own research into the wider issues raised that industry may not initially consider their responsibility. 2.4 The issue of liability is not insignificant and should be considered alongside other issues related to law and order. The wider issues relatingto the use of technologymust be con sidered and acted upon as the technology is being introduced. The growth in the use of mobile phones oVers a reminder that the use of technology can introduce new problems very quickly. 9098191013 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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2.5 Issues of liability are beingaddressed extensively within the Europe an RESPONSE2 project, which seeks to develop a “Code of Practice” for the development and testingof act ive safety systems. 2.6 Three aspects of drivingare perception/judgement/action.The human is very good at interpreting a situation, but perception is often limited. Driver support systems can increase perception and also support decisions. An example of support is employed on the Crash Mitigation BrakingSystem recently introduced by Honda into the Japanese market. The system provides hard brakingwhen th e human does not respond to an impendingcrash. In action, computer controlled systems can always a ctuate faster and more precisely than a human.

Can e-safety initiatives prevent accidents or lessen their impacts?

2.7 The e-safety measures will have positive benefits in both accident prevention and reduced impacts of accidents. Within a single vehicle, advanced collision warning and collision avoidance systems are being developed. Within the road environment, the inter vehicle and roadside to vehicle information exchange systems will provide warningsystems to both for motorists to participate in and ultimately to pre-empt driver action where necessary. Driver support and control systems such as Adaptive Cruise Control can reduce the risk of collisions that, even in damage only situations, can cause congestion and secondary accidents. As yet, little is known about behavioural changes in a supported and controlled environment and the true benefits have yet to be determined. 2.8 Collision mitigation is an area that has seen significant work with NCAP, and other bodies including the car manufacturers. One such development is where live video is transmitted from the car showingwhat happened to the occupants duringthe collision. This can be vital in determ iningthe early treatment and priorities of injuries prior to the ambulance arrival at scene and their subsequent treatment. 2.9 Questions of liability, legal recognition and driver acceptance need to be dealt with but are not insuperable within a time frame consistent with technical and financial developments.

Is there a trend to bigger and heavier cars?

2.10 There is certainly a trend towards bigger, heavier cars in particular markets (eg4x4). The general trend for additional safety features (airbags, pretensioners, ROPS, etc) also adds cost and weight. The converse fight for weight reduction to give performance and emissions benefits seems to be just about beating the trend—certainly on premium vehicles where new, more expensive materials can be introduced.

What influence does the UK Government have in a global car market?

2.11 The dominant vehicle standards in the developed world are the FMVSS (North American) and ECE (European) standards. The UK Government has more influence upon these standards than it perhaps realises. Fiscal policy can have a large influence over company car purchase within the UK. The industry will react to local market requirements only as justified by the financial importance of that market to their business. The manufacturers have traditionally viewed the UK as beinga lu crative market. 2.12 The UK has a lead in traYc information and management technology. The Government can increase its global influence by having clarity of vision, supporting research, and the outward promotion in these areas.

Will technology be brought in through commercial vehicles first?

2.13 The logistics industry is very competitive. The need to find an edge makes the commercial vehicle market fertile ground for developments that clearly provide a short-term reduction in operatingcosts. In the US, 50,000 forward collision warningunits are operatingon heavy trucks a nd have been eVective in reducing collisions for both long-haulage and delivery applications (Eaton VORAD system). Since the return-on- investment is very evident for truckers in buyingsuch systems, it is likel y that in some areas, the trucking industry will lead the adoption of active safety systems. In Europe, the same collision warningsystem is due to come to market soon. Lane departure warningsystems are already on the ma rket and driver drowsiness warningdevices are nearingmarket introduction. In the US, the formulati on of government incentives programs to encourage trucking fleets to equip their units with active safety systems is beingresearched. 2.14 Other developments that seem desirable but not proven in costs terms may come in through the luxury car market. Information and navigation systems for private motorists come into this category. 9098191013 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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3. Vehicle use

If drivers paid for road use through a national satellite location system, what else could the technology be used for and what are the implications? 3.1 A satellite location system oVers positional and time information, and hence traYc flow can be measured. Other applications include Fleet management, surveillance against hi-jacking, etc. The Government needs to encourage and push for standards in the following key enablingtechnologies: — Electronic Vehicle Identification. — Vehicle location. — Road user charging. — Roadside to vehicle two-way communication. 3.2 These technologies allow the Government to influence car usage, enforcement, cleaner vehicles, safer vehicles and the distribution of congestion and traYc in urban and rural areas. The use of a common electronics platform for vehicles may hasten acceptance by the vehicle industry by reducingcosts and ensuringcompatibility across Europe. 3.3 There are substantial implications regarding the trust of the public, particularly dependingupon how the system is contracted/franchised and the coverage. It is imperative that a regulatory balance is built into the system to protect privacy. Aside from possible use by insurance companies and data gathering organisations there is the sense of Big Brother watching. Public acceptance of a satellite location system may be mitigated by the provision of additional location-based services, such as information on the nearest service station, restaurant or bank.

To what extent will car-share clubs and leasing replace buying a car? 3.4 There have been many car share initiatives across the country. The biggest take-up has been from those who experience the highest relative cost barriers to car ownership (the youngand the old) in urban areas. Such schemes seem to have had little impact on car purchasing.

Can technology prevent uninsured driving? 3.5 Satellite technology has the potential to greatly reduce the problem of uninsured driving. However it is unlikely to deter the hardened criminal. The costs of such a system could be justified only by integrating it with the other systems (navigation, road pricing etc) into a single electronic platform within the vehicle. This requires a clear vision and long-term commitment from Government. October 2003

Memorandum by Freight Transport Association (CAR 14)

THE CAR OF THE FUTURE

Freight Transport Association Freight Transport Association represents the transport interests of over 11,000 British businesses. Its members range from small- and medium-sized enterprises to multi-national public companies who are involved with the movement of goods on all modes of transport, both within the UK and internationally. FTA members operate over half of Britain’s heavy goods vehicles, consign over 90% of freight moved by rail and 75% of the freight shipped overseas by sea and air. This unique multi-modal mandate enables FTA to speak authoritatively on all aspects of the supply chain and represent the freight interests of all industry sectors.

Introduction FTA welcomes the Committee’s inquiry into cars of the future. Any investigation into the cars of the future is of major interest to the freight industry. Developments in truck technology and design by truck manufacturers have a knock on eVect for cars. The technology currently employed by many freight operators in both monitoringvehicle position and communicatingwith the ir vehicles in real time, also presents many potential opportunities for transfer to cars of the future. FTA welcomes clean vehicle technology. The development work carried out by vehicle manufacturers in not only achievingthe new Euro emission standards, but, in many cases, pro ducingvehicles with emissions well below the standards has resulted in a dramatic reduction in the emissions from all vehicles. As cars and light vans represent over 95% of the vehicles on Britain’s roads, mechanisms for controlling car use can have a significant eVect on road infrastructure reliability. 9098191014 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Clean Vehicle Technology Whilst manufacturers have produced, in very limited quantities, vehicles designed to run on hydrogen both in internal combustion engines and by using fuel cells, it is most unlikely that a hydrogen powered heavy goods vehicle will be available for at least 20 years. The dramatic reduction in emissions from heavy goods vehicles, paralleled by an equal reduction in emissions from cars and light vans when using conventional fuels, has raised major questions over current Government policy in fundingalternative fuel vehicles. A written question by Cristiana Muscardini to the European Commission on fuel and pollution resulted in the response by Mrs Wallstro¨m on behalf of the Commission that “it is therefore doubtful if vehicles using liquid petrol gas, or natural gas oVer any advantages from an air pollution point of view, compared with vehicles usingconventional fuels. In this respect neither natural gasno r liquid petroleum gas represent a solution. In the intermediate term, the use of natural gas or liquid petroleum gas might oVer some advantages with respect to greenhouse gases compared with petrol fuel vehicles, but not compared with diesel fuel vehicles and only providingthat there is no significantemissi on of methane in the distribution chain of natural gas”. FTA is concerned that Government fundingfor alternative fuelled vehicle s, whilst started with good intentions, has led to the situation whereby the after-fitment of a device which injects liquid petroleum gas into a diesel engine attracts TransportEnergy funding, but operators wishingto purchase a Euro 4 compliant vehicle ahead of legislative requirement receive no help whatsoever! FTA’s view is that incentives should be linked to reducingtail pipe emission levels, especially the early purcha se of vehicles to higher Euro standards and not to the introduction of uncertified “bolt on” conversions to existingvehicles. The Government has already very successfully demonstrated that the use of tax incentives can lead to the early introduction of cleaner fuels. The introduction of ultra low sulphur diesel was an excellent case in point. The Government has indicated that it wishes to reduce the level of carbon dioxide emissions and has introduced a tax scheme for cars which is already havinga major e Vect on the choice of cars purchased for business use. At the Kyoto Summit, methane was identified as being20 times m ore harmful than carbon dioxide for global warming and yet the Government continues to incentivise through “TransportEnergy”, natural gas vehicles, many of which emit high levels of methane into the atmosphere. The Committee should call for incentives, including TransportEnergy grants, to be based on tail pipe emissions and the early introduction of vehicles meetinghigherEuro stan dards, and not to be based on the fuel beingused to power the vehicle.

Vehicle Design and Control

Commercial in-cab telematics functions Freight transport operators are already using the latest technology for vehicle location and communication with vehicles on the move. Research amongst lorry operators undertaken by Marketing Sciences on behalf of HM Customs and Excise found that 17% of operators surveyed made use of vehicle journey tracker devices, 16% use base to vehicle messaging and 8% had installed route planner/navigation systems. The availability of national and EU real-time traYc information systems in the future will oVer an important new role for commercial in-cab telematics in trucks. FTA’s principal concern is that fleet management, on-board vehicle management and highway performance telematics functions should be able to form part of a single integrated system. These commercial telematics functions must also integrate with road user charging, congestion charging and network tolling and, in the case of trucks, with the vehicle’s tachograph. An extension of the use of commercial vehicle telematics functions to cars can assist emergency services and recovery operators in locatingbroken down vehicles, help maximise th e use of available road space by giving advanced warning of traYc congestion and give better information on the likely duration of a journey. Commercial vehicle manufacturers have already applied today’s technology to permit the use of road trains whereby a series of vehicles, connected only electronically, could be driven by a driver in the first vehicle. The extension of this technology to controlling the speed and spacingof vehicles on the motorway could contribute to accident reduction. The Committee should encourage the development of commercial telematics applications in cars.

Vehicle Use

Road charging The Government intends to introduce road user charging on all lorries both domestic and visitingfrom 2006. The main scheme, which will apply to most domestic operators, will be based on an on-board unit usingsatellite positioningto determine the chargerate and amount of cha rge incurred. The extra costs will be balanced out by a reduction in diesel duty for lorries, possibly by a rebate. FTA has welcomed this 9098191014 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 122 Transport Committee: Evidence

initiative subject to a series of success factors beingmet coveringthe in tegration and interoperability issues, clarity of charge criteria, fairness and that industry should not face a higher cost burden as a result of the charge. However, it is important to make clear the diVerence between road pricing( in other words managing demand for road use by price ) and road charging, collecting a tax or payment for road use. The lorry road user charge is just a diVerent way of raisingtax. FTA hope that the di Verentiated charge rates will encourage lorries to use motorways in preference to other roads and particularly use motorways at night, but it cannot deliver demand management. This is because it will apply initially only to lorries which form a small percentage of the traYc stream (on average less than 10%)—the vast majority being cars. When all the supply initiatives that the Secretary of State has to increase road network capacity are exhausted, the Government must be ready to manage demand across the whole traYc stream, includingcars. That is why FTA welcomes the settingup of a feasibility study by the Secreta ry of State, Alistair Darling, to start the process. The use of road user charging if applied to all vehicles (including cars) can provide a pricingmechanism to encourage use of the road network at less congested periods. If charging includes incentives for vehicles to be used outside peak hours, it could have an appreciable eVect on traYc flows and journey time reliability and therefore commercial vehicle operations. The Committee should recognise the benefits of road user charging for all vehicles as a demand management tool. Road charging OBUs should be capable of delivering a single charging solution for road user charging, congestion charging and network tolling. They should also provide an open platform for commercial telematics applications to ensure interoperability between functions such as position, time, distance. October 2003

Memorandum by The AA Motoring Trust (CAR 15)

CARS OF THE FUTURE

1. Introduction In terms of technical content, cars are already largely defined for the next five years. And with the present rates of change, twenty-five years is a horizon beyond which events could be so diVerent as to be unplannable from here. Within that twenty years however, there will have to be some quite significant changes in cars and how they’re used. The main influences are market driven, even those that are safety related, and reflect the complex demands of the car-user on the car and the transport system. Most technical changes will be incremental, and largely out of sight: there will still be four wheels and recognisable bodywork. But underneath there’ll be some very new systems. The sooner a sound and coherent set of policies are in place to deal with them, the better.

2. Fuels and Emissions

2.1 Toxic Vs Climate Change Emissions The present EU and US regulations on toxic emissions are stringent and very eVective. Once the parc broadly complies with the current best practice, egthe US PZEV or Euro V, to xic emissions problems will be confined to a relatively few special situations of peculiar meteorological and traYc-related conditions. These will best be tackled by means other than makingall vehicles comply wi th further regulations, with diminishingreturns.

2.2 Near Term Fuelling In the medium term, for say fifteen years or more from now, we have no alternative to usingfossil oil for most road transport. Taxation policy must be designed to make optimum use of this resource, strongly encouraging the development and adoption of the best technology possible. Bio-fuels for road use should be encouraged as a useful supplement, but the most eYcient application of biomass lies in displacingthe use of oil or coal in grid electricity generation. There’s really no logic in producingtechnically critical liquid fuels by means of complex and energy intensive esterification and fermentation processes, while at the same time burningmore coal and oil in old-technologypower plants. 9098191015 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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2.3 Longer Term Fuelling

For the longer term, much has been made of hydrogen (H2) as “the ideal fuel”. True, burningit or feeding it to a fuel cell produces no CO2 at that point—but where does the hydrogen come from? In fact, H2 isn’t a fuel, in the sense of an energy source. It’s more like a battery, an energy store. There’s no reason to tax it, any more than there is to tax battery acid. If hydrogen is produced by electrolysis of water, usingUK grid electricity, the net climate change eVect will be perhaps twice that of drivingon diesel fuel. But hydrogen from natural gas, with the resulting CO2 returned underground for permanent geologic storage, could be both sustainable and eYcient. There are many possible sources of hydrogen, that’s one of its good points. So will the fuels used to produce the hydrogen be taxed as road fuels? Not when made from landfill gases, presumably. However, the route to low or zero-carbon transport should not assume H2 as the ultimate pathway. There could be easier, more adaptable means—hence the need to define goals not strategies.

2.4 How to get there The taxation of fuels for road transport can’t be totally separated from overall energy supply and taxation issues (see figure 1)—though it’s still essential to use every reasonable means of reducingemissions from road transport sources. The eVects of climate change emissions are global and independent of the source, so the aim should be to converge taxes and incentives applying to diVerent industries. The shift to a hydrogen infrastructure is an ambitious and fairly distant possibility, and will need a lot more impetus than just “zero-rating” hydrogen—the cost of the stuV is the least of the problems at the moment, and will be for a longtime yet. It does chime well with increasingwi nd power generation though— as such supply is inevitably intermittent, generation of H2 can provide an energy reserve independent of grid demand. LPG has been available as a road fuel for the past twenty-five years, and despite substantial (and justifiable) government incentives oVered, its market penetration is insignificant. Why? Mainly because it lacks perceived benefits to oVset the hassle. The experts may disagree over forecasts, but “they/we” condemned as unnecessary both PCs and text messaging. The point is that the right technology will out. If H2 can solve the problems it will grow, and the infrastructure will appear. This is no chicken and egg conundrum: petrol wasn’t widely on sale before there were a lot of cars, but soon found its way—starting in the UK from an AA fillingstation, as it happens. Tax incentives must be used with long-term aims, and on a total “well-to-wheels” basis. The role of government must be to set sound and coherent goals, and avoid getting in the way of the action.

3. Vehicle Design and Control

3.1 The Potential to Increase Safety New designs, materials and control systems still have very significant improvements to bring. The limits are yet far from stretched—look at the survivability built into current generation F1 racingcars. Legislation, however, in terms of continually revisingand upgradingtestprocedures a nd performance requirements, is inevitably slow and based on past technology. Most of the present spate of new safety technologies have been brought to production cars by market pull, based for instance on the EuroNCAP test programme. At first shunned by car manufacturers, now used openly as a sales medium, such competitive tests have brought rapid and eVective progress. The test process must be continually reviewed, but this can be done quickly and relatively easily. A great deal has yet to be done, in particular on primary safety, pedestrian protection and inter-vehicle compatibility: the potential is certainly still there for real progress.

3.2 Humans Vs Computers Drivingincludes a wide spectrum of tasks—and there’s no doubt that some of these are better done for the driver rather than by the driver. After all, you used to have to retard the ignition timing when you came to a hill. It won’t be possible to define these tasks and separate them absolutely, so that they can be fixed as one or the other. As systems become more intelligent, new applications will be found. This brings the problems of definingresponsibility for actions, and how such systems can b e adequately tested and approved. And as drivers become increasingly reliant on all sorts of aids—what happens when an individual comes to drive an old-tech car? The aims must be to reduce the driver’s physical and mental burden, without takingover the essential control functions. Legislation can’t control all system design parameters by specification. With regard to responsibility, the driver of any vehicle will still have to act as a careful and experienced driver should at all times. If they drive a vehicle with an automatic control system, and it malfunctions without warningcausingan accident, the 9098191015 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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driver will have the defence of latent defect, as before. It’s essential that the presence of such functions is clear, that all its actions and influences are intuitively foreseeable, and that manufacturers can prove operation is totally reliable and fail-safe. All systems must show and record diagnostic routines.

3.3 e-safety in cars This is one bigarea of potential safety improvement. There’s no doubt that very significant gains can be made, particularly in areas such as warningdrivers of hazards—and in extr emis, takingappropriate control action. Dozingand attention-loss are prime causes of accidents, and the a pplication of eVective remedies could avoid as many as one in five accidents. A number of current systems are usinga rangeof in-vehicle data to control s tability—yaw, roll and turn rate are input to compute the optimum steeringand brakingrequired, and th is adds to primary safety. As systems become able to use information from outside the vehicle, the scope for injury mitigation is further enhanced. For instance, pedestrian and side impact air bags can be made much more eVective with earlier deployment, and vehicle position monitoringcan be used for alertingthe d river, and control if necessary. Automatic callingof the emergencyservices to an accident site is relativ ely simple, but requires large-scale adoption and co-operation between all parties to be viable. The encouraging aspect of e-devices is that they are getting much more intelligent, better integrated, and very much cheaper. There’s every reason to expect this trend to continue. The aim must be to direct applications towards safety and environmental benefits, rather than just for convenience and entertainment.

3.4 Car size and weight The trend across the EU has been for increased car weight, despite better use of steel alloys and more light alloys in engines. The main cause has been the increased component count, as both legislation and market forces call for greater functionality, and as body strength becomes more critical with impact requirements. There will be some conflict here with the fuel consumption reductions called for by the EC/ACEA carbon dioxide agreement, as car CO2 output is closely linked to vehicle mass. Another conflict arises with the End of Life Vehicles Directive, as the requirements to increase the proportion (by mass) of material recycled must inevitably favour ferrous content over polymers and composites. The US example of SUVs and like vehicles, growing in numbers to equal the “car” market despite legislation aimed at cutting fuel consumption, should be a warning to all legislators.

3.5 Technology and Commercial Vehicles Some technologies are particularly favoured by the structure of the commercial vehicle (CV) market. Examples are vehicle identification, trackingand routing,“black box” re cordingof speed, fuel use and drivingstyle, and the use of some “niche” fuels that can be depot bunkered. The impetus comes from the way they are operated, rather than the construction of the vehicles themselves—CVs will (or at least should) have a fleet manager with day-to-day responsibility for operating eYciency. The problems are that environmental concerns are subordinated to economic constraints. If there’s a subsidy on diesel, what operator will want to borrow capital for a natural gas compressor plant? The lesson here is that yes, the CV market is quick to adopt technology that can oVer to help with this year’s bottom line—to look further ahead needs careful structuringof any planned incentives.

4. Vehicle Use—Tolling by Satellite

4.1 Introduction of Tolling by Satellite or Other Vehicle Identification technologies Technologies for tolling need to follow policies—not the other way round. Satellite technology is acceptable to Britain’s road haulage industry, in principle. There could be direct and tangible advantages to the operator as drivers are currently regulated via tachographs and a host of other means. The technology might also help security, cost control, dispatch and deployment. There are many detailed issues to resolve, however, includingthe ownership of on-vehicle and network data. The issues surrounding payment for roads by half a million high mileage trucks in an international commercial market are however minor and of a completely diVerent nature to those relatingto chargingthe population at large for their road use in this way. Currently, the motoringpublic is no mood to accept invasive technologyof this type. Research by the AA MotoringTrust shows that the public believes that the current system of fu el taxation is sound as distinct from the rates of fuel tax, which they believe are beyond reasonableness. Fuel tax in principle enables payment for road use closely linked to road use. It’s simple and convenient to pay, very diYcult to cheat, and non-invasive. It tends to be a “green” and progressive tax. Motorists believe the system could be developed to be fairer to rural motorists. 9098191015 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Motorists don’t see pricingin congestedareas and at certain times as a par ticularly practical or desirable development. The research done in the UK also suggests that the areas where a serious technical case for charging might be made are geographically limited, and the practical case for universal road user charging technology is weak however appealing to theoreticians.

4.2 Car Share and Leasing

A NOP survey carried out for the AA MotoringTrust early in 2003 showed that 8 3% of respondents were unlikely or very unlikely to lease instead of buyingtheir next car. Only 1% were don’t knows—this is a very definite indicator of the UK motorists’ preference for ownership. Only those already havinga company car were more in favour: 41% felt likely or very likely to lease. The lease market depends largely on prevailing taxation regulations. The eVects of personal leases, business mileage taxation and new car prices can make very significant changes to the market structure, as shown, in figure 2, by the sudden movement away from company-owned cars from 2000. As with car ownership, the perceived benefits of independence, flexibility and control aVorded by the private car make the essential compromises of car-sharingmuch less attra ctive. There are always going to be some locations, like university campuses or isolated villages, that make it a very eVective strategy. So far however, the signs are that even with a well-run website, good matches are relatively infrequent and the traYc appears unlikely to achieve a share reachingany thinglike a percent of th e total.

5. Conclusions — By far the most important aspect of transport policy is the need to reduce greenhouse gas emissions. Early and eVective action can lead to a sustainable transport infrastructure—and the development of an industry with the sort of growth potential never before seen. — Setting the right incentives is essential. Voluntary negotiated agreements are provingthe best way to rapid results. Partnerships and collaboration are eYcient, given the necessary guidance and legislative backing if required. — The constraints of Type Approval legislation need to be reviewed, where they conflict with the introduction of new technology. A more flexible and function-based process is preferable to defined specifications. — e-systems will be seen in ever-increasingareas. If vehicle identificati on and trackingtechnologyis to be neutral, and is to be seen as neutral, it is essential that its applications are exclusively benign. Any suspicion of possible covert use (or misuse) of data would generate the sort of opprobrium now aZictingGM crops.

APPENDIX I

Tax - £ per tonne CO2

200

150

100

50

0 Jet Fuel Coal Natural Grid Petrol Diesel Biodiesel Gas Electricty 9098191015 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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UK New Car Registrations - Company Cars Vs Private Purchase

60 Private 58 % Split 56 Company 54 52 50 48 46 44 42 40

1995 1996 1997 1998 1999 2000 2001 2002 2003p

Memorandum by Zero-m (CAR 16)

CARS OF THE FUTURE

Zero-m is reviewingmethanol-based fuel for introduction into the UK. As a winner of the Government Green Fuel Challenge, Zero-m are investigating local emissions benefits of convertingold pollutingvehicles to methanol. Like other fuels, methanol must be handled carefully but it has been widely studied and shown to be safe and have significant emissions benefits. Its use for Indianapolis racingcars is largelydue to its beneficial safety aspects. Methanol is ideally suited to be a major fuel of the future without needing significant long-term fiscal incentives.

Methanol can be made now from a wide variety of sources. It is readily made from natural gas, and new large manufacturing plants using remote gas make methanol with carbon eYciencies approaching100%. Zero-m have obtained DTI grant funding to develop a small-scale methanol manufacturingoption to provide a flexible route to providinga low-cost alternative fuel. Methano l can easily be made renewably, and several serious commentators have recognised that biomass gasification, coupled with methanol synthesis, may be the most viable route to widespread use of biomass. In the future, renewable hydrogen can easily, safely and economically be stored and transported as methanol.

Methanol works in easily retrofitted old vehicles with immediate improvement in local emissions. The conversion of older diesel engines enables them to meet future emissions requirements. Methanol’s unique chemical nature provides the opportunity to use several moderately well-developed technologies, as retrofit and OEM opportunities, that can lead to better tank to wheels eYciencies than are obtained from the pre- conversion engine. Once refuelling infrastructure exists, OEMs will introduce methanol-capable vehicles. Many already have suitable vehicles requiringalmost no additional devel opment.

Methanol may be the most eVective route to the hydrogen economy. It contains more hydrogen in a given volume than liquid hydrogen. That hydrogen is easily released—the Necar 5 fuel-cell car travelled across the USA last year usingmethanol available from existinginfrastructure. Establishinga methanol infrastructure now solves an urgent local emissions problem and provides the basis of a hydrogen infrastructure for the future—methanol is a safe and convenient source of hydrogen. As a clean liquid, it is easy to store and transport with over 80 years of experience of safe handling.

In the long-term methanol may be the only potentially renewable alternative fuel that can compete with conventional fossil fuels without favourable duty treatment. Its currently unfavourable excise-duty treatment requires correction—it is currently taxed at around twice the level of petrol and diesel when calculated on an energy basis.

In the short-term, inclusion in EST programmes and a beneficial duty status is essential to allow development of critical-mass market and fuellinginfrastructure. This d uty status must be guaranteed for a suYciently longperiod to attract the necessary capital investment.

The followingpagesprovide a summary of methanol-related facts. Zero-m i s happy to make a presentation about how methanol can be the fuel for the cars of the future. 9098191016 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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1. Methanol is a Renewable Fuel

1.1 Any new transport fuel must be potentially renewable

The burningof fossil fuels (petrol, diesel, LPG, CNG) releases CO 2 into the atmosphere. Consequently transport fuel alternatives are eagerly sought which are potentially renewable and therefore carbon neutral.

1.2 Methanol can be made from biomass It is not widely appreciated that methanol can be made from plant crops, particularly through gasification. Zero-m is currently engaged in a pilot project which will produce prototype plants to manufacture methanol from biomass through two diVerent routes.

1.3 Methanol can also be made from renewable electricity in the longer run Renewable power (solar, wind, wave etc) can be transmitted immediately as electricity or it can be stored as hydrogen. Unfortunately hydrogen is very diYcult to store eYciently and safely. Much energy is required to liquefy it or to compress the gas to the high pressures needed, and the pressurized vessels then represent a safety hazard. The most practical, safe and economic method of storingrenewable hydroge n is as stable liquid methanol. This is achieved through the combination of hydrogen and carbon dioxide over a catalyst. If the carbon dioxide is recycled from vehicle engines, or fossil fueled power stations, then the methanol production is carbon neutral. Zero-m has a patent pendingfor such carbon d ioxide recycling.

2. Methanol is an Excellent Fuel for Both Internal Combustion Engines and Fuel Cells

2.1 Methanol is already used in spark ignition internal combustion engines For many years methanol has been used as a safe, stable liquid transport fuel in spark ignition internal combustion engines. In the USA some major car manufacturers oVered flexible fuel vehicles which can run on M85 fuel (85% methanol; 15% petrol) duringthe 80s and early 90s. Indy racingcars in the USA are run on methanol to take advantageof methanol ’s power and safety, because methanol is less explosive than petrol. In a crash the lower intensity of a methanol fire is much more easily controlled, and it can be put out with water rather than needingfoam as petrol does.

2.2 Methanol can be used as fuel in diesel compression ignition engines Recent work in the USA has demonstrated that the addition of a spark ignition system to a diesel engine enables the use of methanol as a fuel at high compression ratios. Research indicates that methanol in these conditions is even more eYcient than diesel. The potential therefore exists to increase the eYciency of diesel engines while still dramatically reducing the very harmful particulate and NOx pollution they normally emit.

2.3 Methanol is also an excellent fuel for fuel cells It is generally accepted that the ideal transport fuel system of the future will consist of fuel cell powered vehicles using renewably generated hydrogen as fuel. It is also acknowledged that it will take 20–30 years for fuel cells to be widely available at a reasonable price, and for the astronomically expensive hydrogen-refueling infrastructure to be put in place. Methanol can greatly contribute to the transition to this system as it is an excellent fuel for a hydrogen fuel cell vehicle. An on-board reformer splits the liquid methanol fuel into hydrogen and carbon dioxide gases. The hydrogen gas is then fed to the fuel cell. Many examples of this technology already exist including the Daimler Chrysler Necar 5, which crossed the US usingonly methanol in late 2002. 9098191016 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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3. Methanol can be Easily Distributed Through the Existing Distribution System

3.1 Existing fuel pumps and tanks can be converted to hold methanol It is a relatively simple matter to convert existingpetrol or diesel pumps and tanks to methanol. Disruption and cost would be minor.

3.2 Methanol can be safely delivered to forecourts by tanker Methanol manufacturers like Methanex Corporation, ICI and Statoil have great knowledge and experience of transportingand deliveringmethanol, includingall relev ant support on health and safety matters.

3.3 No extra infrastructure changes need be made to accommodate fuel cell vehicles A methanol-capable infrastructure is all that is needed to accommodate fuel cell vehicles if they generate hydrogen through on-board reforming of methanol. Adopting methanol immediately removes the huge task, and astronomic costs, of creatinga separate special hydrogen-refu elinginfrastructure, and therefore can greatly speed up the introduction of clean and eYcient fuel cell vehicles and the low carbon economy.

4. Methanol Tailpipe Emissions will be Much Cleaner than those from Existing Engines

4.1 Emissions from the combustion of methanol Research sponsored by the California Air Resources Board concluded that “substitution of methanolfor the currently used gasoline and diesel fuel is probably the most significant step which can be taken to achieve improved air quality ...intheSouth Coast Air Basin of California” The report also stated that the use of methanol in light and heavy duty vehicles would produce significant reductions in ambient ozone, particulate matter, nitrogen dioxide, nitric acid and peroxyacetyl nitrate.

4.2 CO2 emissions will be less than petrol and diesel

Well to wheel emissions of CO2 from methanol made in a modern natural gas steam reforming plant are marginally better than petrol or diesel fuels in the same engines. Where the feed natural gas would otherwise have been flared or vented, there is a significant gain compared to conventional fossil fuels.

4.3 NOx emissions will be significantly reduced compared to diesel Diesel engines emit more toxic Nitrogen Oxides than other engines and this pollutant is very hard to control in that type of engine. Just by its chemical nature methanol produces far less NOx, but even more importantly, because a three way catalyst can be used with methanol in a converted diesel engine, NOx can be almost completely eliminated from diesels by Zero-m.

4.4 Particulates will be greatly reduced compared to diesel Whilst diesel particulates emissions have been improved in recent years, diesel engines still emit high levels of particulates. It is particulates that are now causingthe greatestheal th concerns, about cancer and asthma, particularly in children and particularly in built-up areas. A diesel engine, with spark ignition and methanol fuel, would emit virtually zero particulates. It is also likely that it would be runningeven more e Yciently than a normal diesel, thereby reducingCO 2 emissions as well.

4.5 Retrofit conversions of diesels to methanol oVer significant emissions reductions The availability of methanol as a fuel for diesels creates an excellent opportunity to tackle particulate emissions from older vehicles. Zero-m’s retrofit programme for older vehicles will serve to greatly reduce these emissions. 9098191016 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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5. In Common with all Transport Fuels,Methanol is Toxic

5.1 Existing transport fuels are toxic In the design of petrol stations and cars the oil companies and the motor manufacturers have tried to minimise human exposure to both liquids and vapours to protect their customers from the inherently toxic nature of petrol and diesel fuels. Nevertheless, everyone will be familiar with the strongsmell of petrol an d diesel to which we are all repeatedly exposed when we fill our cars up. The level of toxic and fire risk that this exposes us to is generally considered reasonable and is just part of the price we have all become used to payingfor the convenience of havingo ur own private transport. It would, in any event, be very hard to separate out the relatively small number of cancer deaths caused by inhalingpetrol fumes at petrol stations week by week, or by regularskin co ntact with diesel fuel, from those caused by other things such as smoking.

5.2 Toxicity Petrol, diesel and methanol have similar levels of toxicity. When ingested by mouth, although virtually undrinkable in undiluted form, methanol can cause blindness and death, although strong ethanol eg vodka can be used as an antidote. Liquid petrol inhalation can cause death by irreversible pneumonia or heart attack with no antidote available. Methanol is less toxic than petrol and diesel in terms of topical application or fume inhalation. The solution is not to drink, or to have significant physical contact, with any transport fuel.

5.3 Additional safety measures Zero-m methanol pumps will be fitted with a device that prevents the escape of any fumes when refueling. Petrol and diesel pumps in the UK do not have this device fitted, despite havingmore toxic fumes than methanol. Additives will ensure that methanol is undrinkable and burns with a visible flame.

5.4 Environmental issues Methanol is a naturally occurringsimple alcohol, which is totally miscib le in water and is highly biodegradable. Spills will therefore degrade quickly and harmlessly in the soil, unlike petrol and diesel spills.

6. Methanol has a Much Lower Fire and Explosion Risk than Existing Fuels

6.1 Methanol is safer than conventional transport fuels Compared to petrol, methanol has a much lower volatility, requires a higher concentration in air to ignite, has a lighter vapour so does not collect at ground level so easily, and has a lower heat release rate when on fire. This results in a distinct fire safety advantage for methanol. Although methanol has a lower flash point than diesel, the resultant fire is far less intense and therefore likely to be less damaging to life and property.

6.2 Methanol burns with a non-luminous flame A methanol fire is blue and can be hard to see in strongsunlight.The US EPA rec ognise this but believe that usually there will be other materials egtyres, paint seats, in any aut omotive fire which will add suYcient colour to the flame, so that, combined with the lower heat release from methanol fires, the risk this characteristic brings is generally low.

6.3 Hydrogen is dangerous Much work is currently underway to address the serious risks that must be accepted if hydrogen is to be used as a transport fuel. Currently the gas is either highly compressed into large strong cylinders, or reduced to minus 253 centigrade to liquefy it for storage in sophisticated thermos flasks. Either way these cylinders will be at risk in serious collisions. Rupture of a high-pressure cylinder could result in a massive explosion as with CNG. Rupture of a liquid hydrogen cylinder in an accident, and exposure of the occupants to the liquid, would result in instant death. 9098191016 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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7. Methanol is the Best Route to Hydrogen

7.1 Diesel vehicle retrofit conversion will create methanol demand Zero-m retrofit conversions combined with a low fuel duty rate will create a demand for methanol. These conversions will also result in significant emissions improvements. Zero-m will initially concentrate on commercial depot based diesel fleets.

7.2 Methanol pumps will eventually become established on station forecourts Increasingdemand from conversions will lead to the appearance of increas ingnumbers of forecourt methanol pumps. The emergence of LPG pumps is a convincing precedent. As the number of pumps increases, demand for new vehicles from motor manufacturers will increase. As the technology is well known and well tested manufacturers will quickly be able to make methanol-capable vehicles available.

7.3 Zero-m methanol fuel availability will encourage the production and purchase of fuel cell vehicles Fuel cell vehicles with on-board methanol reformers will have fuel readily available on forecourts. This will enable a much earlier, and lower cost, introduction of these vehicles than can be expected using hydrogen gas.

7.4 Greater demand for methanol will be met by synthesis units Truck depot and retail station forecourt Zero-m methanol synthesis units will be introduced to manufacture methanol from natural gas on site, meeting the growing demand for methanol.

7.5 Zero-m synthesis units will be capable of generating liquid or pressurised hydrogen as well as methanol if, or when, required by the market If hydrogen gas is required for fuel cell vehicles as well as methanol, then Zero-m synthesis units can be easily modified to generate hydrogen as well as methanol from the natural gas. However, it is very unlikely that it will make sense for hydrogen to fully displace methanol for many years.

7.6 In due course Zero-m’s synthesis units will be made capable of using renewable energy to make methanol and hydrogen Longer term, and once economic, Zero-m synthesis units can be modified to be capable of usingrenewable electrical energy to generate hydrogen and combine it with recycled vehicle carbon dioxide to generate methanol. In short, launchingmethanol-based fuel now is the quickest and best way to make sure a source of hydrogen is put on the forecourt to start the fuel cell revolution. Dr Ian Duckels Director October 2003

Memorandum by Sustrans (CAR 17)

CARS OF THE FUTURE

Introduction Sustrans is a charity workingon practical projects to reduce motor tra Yc and its adverse eVects. This includes encouraging people to walk, cycle and use public transport more. Amongour main projects are: — Leadingin delivery of the National Cycle Network. — Safe Routes: to Schools and to Stations. — Community consultation on travel issues. — Active Travel: workingwith the health service. 9098191017 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Policy Background The successful implementation of these projects depends to a considerable extent on safe road travel for all. In this context the volume, speed and safe passage of cars is a crucial issue. It should be stressed at this point that however “clean and green” a vehicle is, if it is badly driven, at speed, and in excessive numbers it is makinglittle contribution to sustainable t ransport. In this context it is worth reflectingon the current Government policy framework within which this In quiry is takingplace. We rehearsed this in our evidence to the Committee’s Inquiry into “Road TraYc Law and its Enforcement”. In brief, some of the main elements are: — National Road Safety Strategy: to cut road deaths 40% by 2010. — Social Inclusion and Transport. — Liveable Communities. — National CyclingStrategy. — Campaigns to reduce heart disease, strokes and obesity, and to promote physical activity. — New initiatives to promote walking. Also in this evidence we made reference to emerging technologies as key means of improvingdriver behaviour, and we return to these in answer to the questions below. Sustrans is a member of the Slower Speeds Initiative, and we strongly commend their evidence to the Committee, notably in regard to the speed and safe control of drivers and vehicles.

Clean Vehicle Technology We urge the Committee to cast a critical eye here. The production and distribution infrastructure for fossil fuels is so enormous that it is diYcult to foresee any real changes in the fuel supply within the next 20 years. Also the full implications of most alternative fuels are still far from clear. The energy inputs and distribution costs of many bio-fuels appear to mean little overall net benefit is derived. There is a serious danger of “tokenism” here, that a few hundred hybrid and low emission vehicles will mask the real impact of the 28 million already on our roads. It is worth notingthat:

(1) The Transport sector accounts for nearly 30% of CO2 emissions (associated with climate change) and these continue to grow. (2) UK journey lengths continue to increase, by 16% during the 1990s. (3) Land use planningand reducingthe need to travel in this country remain s relatively weak. (4) Alternative modes have suVered fragmentation and under-investment, thereby limiting travel choice. Failures in transport and land use planning have given the car an exaggerated importance it may not warrant. It is by now well-known that although UK car ownership is relatively low by West European standards, actual use is the highest. Some consideration is needed of what the “Car of the Future” is to be used for. It may well be that a simple low-taxed low-powered vehicle should be promoted for local journeys.

Vehicle Design and Control

How much safer can cars be made for drivers and pedestrians? The full range of road users encompasses car passengers, cyclists equestrians, children and the seven million with some kind of movingdisability. From this it is clear that car u se needs to be incorporated more closely into other policy areas, such as social inclusion, health and liveable communities. The Committee will be aware of the Dutch Sustainable Road Safety programme in this respect. There is also the example of Sweden’s “Vision Zero”, which entails takinga fundamental look at tra Yc safety with the aim of reducing fatalities to an absolute minimum.

Is the human driver better than the computer? Given the scale of death and injury on our roads, the answer is clearly “No”. Also 95% of road crashes are caused by human error, so there is clear potential for technological improvement. To date much of this has come from the use of Intelligent Speed Adaptation. The ongoing trials at the Institute of Transport Studies in Leeds suggest a reduction in road deaths of 35%. However, the computer can also be used to assist drivers. In-car black box recorders are a clear case in point, as they can be analysed for driver error. A further development of this system would give active warning to drivers who were speeding, driving carelessly or dangerously, or makingerrors due to fatigue, drink or drugs. 9098191017 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Can e-safety initiatives prevent accidents or lessen their impacts?

Evidence in general suggests a strong role for ISA, black box recorders and satellite control. We suggest many of these can be implemented now. Since 2001 AXA Insurance has been using “Traksure”, an ISA system which warns drivers with an alarm when they exceed a speed limit. It also records speed and location. Meanwhile the insurance industry as a whole could move towards “Pay As You Drive”. This involves telematics which can be installed now, without any changes to Construction and Use Regulations.

Will technology be brought in through commercial vehicles first?

This is already happening, on grounds of business eYciency and cost savings.

Vehicle Use

If drivers paid for road use through a national satellite location system, what else could the technology be used for and what are the implications?

Commercial vehicles are already tracked in such a manner, providingdata o n location and speed. This technology could easily be adapted to distance-based charging. It could also be used for congestion- charging. Most worries about “individualised liberties” seem to us unimportant for the law-abiding motorist. The collective good of fairer taxation and safer mobility is what should emerge from such proposals.

To what extent will car-share clubs and leasing replace buying a car?

The most recent discussion of car clubs is by Lynn Sloman in “Less TraYc Where People Live” (University of Westminster, Transport 2000 Trust. April 2003). In section 8.2 she concludes that “It is reasonable to expect that somewhere between a quarter and a half of members will give up their cars as a direct result of joininga car club, and as a consequence of this will reduce their car mileage by a substantial margin of around two-thirds”. The chapter contains valuable information on such clubs, their potential, a profile of members, and lessons to be learned from existingevidence in Switzerland, Germany and t he USA. A partnership with Swiss Railways has been an important growth factor. Sloman suggests that clubs could be given a form of competitive edge over individual ownership, and floats the idea of some form of fuel duty rebate (in line with that for public transport).

Can technology prevent uninsured driving?

There is clearly a role for “smart card technology” here and we urge the Committee to investigate this fully. Such systems, via a telematic link, could check on: — Driver identity — Vehicle ownership — Driver Insurance In the immediate term the much greater use of Automatic Number Plate Recognition will enable the police to check on driver and vehicle identity and background, including insurance details.

Conclusion

For some reason public discussion of advances in car management and technology appear “controversial”, even “anti-car”. Nothingcould be further from the trut h: such progress secures an appropriate role for the private car in our transport system. Sustrans urges the Committee to present a robust case for the real “Car of the Future”. October 2003 9098191018 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by EADS Astrium Ltd (CAR 18)

CARS OF THE FUTURE

1. Introduction 1.1 EADS Astrium is the UK’s largest manufacturer of satellites. It also uses space technology to develop practical solutions to everyday problems and is already involved with navigation and other services that will be important components of the car of the future. 1.2 Widespread adoption of satellite services, particularly if manufacturers can be persuaded (or required) to integrate navigation and communication technologies as standard features, could have a significant impact on key issues the Committee is concerned with. These include the environmental impact of car use, driver safety and other security issues (such as car theft, speedingetc). 1.3 The key to our analysis is that the car of the future will be a less discrete vehicle than it is today. It will become, like other key consumer and industrial goods, a “networked” product. That is to say that it will use modern technology to both receive information about its environment (in particular its location) and to some limited extent provide similar information about its own status to other parts of the network. If the car of the future is networked in this way it could have significant implications for both the car user and the wider public interest.

2. Impact of Networking Technology on the Car of the Future 2.1 Increasingthe Environmental E Yciency of Car Use: Car use is the largest source of greenhouse gasses in the UK, and currently accounts for about 22% of total UK emissions of CO2. Even with engine improvements currently in the pipeline, car use will still be a significant source of emissions in the future. 2.2 Satellite and other networkingtechnologiescould have a role in direc tly improvingthe fuel e Yciency of engines. Under this model sensors in the engine could be used to transmit eYciency and other maintenance data to the driver (or in the case of fleet cars, to the fleet manager). This could then be used to remotely schedule routine maintenance to ensure cars operate at optimum eYciency as and when problems occur. 2.3 Perhaps more ambitiously, it could also be an important influence on the way in which vehicles are used. The most simple means of increasinge Yciency will be to direct drivers more directly to their destinations. This is already possible with the currently available Global PositioningSystem (GPS) satellite navigation technology. However, a more sophisticated solution might involve usingsatellite navigationto route drivers around areas where there is heavy congestion. Cars standing in traYc queues create serious, but theoretically avoidable, pollution. Eliminatingthis pollution e Vect could provide real dividends. 2.4 IncreasingEconomic E Yciency: Congestion is a serious problem, which has an economic as well as an environmental impact. The CBI has estimated that traYc congestion costs British business up to £20 billion per year. Suitably networked, the car of the future could be a key means of increasingthe UK’s overall economic eYciency, simply by reducingthe impact of congestionon commercial road tra Yc for example through dynamic navigation systems, that are able to receive and process real-time traYc information. 2.5 Discouraging Inessential Car Use: The Committee has previously considered road tolling. Building the infrastructure (includingin-car sensors and equipment) is an import ant component of makingsuch systems work. Again, satellite services, in conjunction with other networkingtechnology,could play a central role in deliveringe Vective road tollingsystems and ensuringthat the care of the future is equi pped to aid Government eVorts to more eVectively manage road use. Ultimately this would benefit the road-user, UK business, environmental lobbies and the broader public interest. 2.6 EnhancingVehicle Safety: Car safety is an increasingconcern to moder n drivers and wider society. In 2002 there were 221,751 road accidents involvingpersonal injury—33,645 involved death or serious injury. Although accident rates have fallen in the last few years it is clear that more should be done to enhance vehicle safety in the car of the future. 2.7 Satellite and networkingsystems could play an important role in reduc ingaccidents. At one level satellite navigation, using voice operated guidance systems, can help avoid driver distraction. Struggling to read maps or find junctions, particularly in poor weather or at night, can be a serious impediment to safe driving. In the event that there is an accident integrated navigation and communications systems could also be used to alert emergency services about a car’s location to support a quick—and possibly life saving— response. Of course, accident prevention would be an even more desirable situation. Satellite based infrastructure could be developed to support intelligent transport technologies. This might involve adaptive cruise control or collision avoidance systems. Space services could also be integrated into systems warning drivers of problems ahead (such as large motorway crashes that can continue to cause accidents after an initial event has occurred). They might also have a role in monitoring and limitingor deterringspeeding. 9098191018 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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2.8 CuttingCar Crime: Car theft is a significantconcern to owners, insuran ce companies and the law enforcement community. Only 14% of the 328,000 car thefts in England and Wales in 2001–02 were solved. The potential for satellite tracking(involvingintegratedcommunicati ons and navigation systems) to help recover stolen vehicles or catch thieves is substantial. Integrating trackingdevices in the fabric of vehicles could prove a significant disincentive, particularly for the growing market in stealingcars to order. 2.9 Enhancingthe PassengerExperience: Networked satellite services co uld also be used to deliver new services to car passengers. Business and recreational passengers could both benefit from wireless broadband services. Technology allowing them to access business resources, location-based services or download films on longjourneys could be an enticingadded extra for some car purchasers. 2.10 This is an ambitious networkingagendafor the car of the future. Achie vingall these outcomes will depend upon developingappropriate infrastructure that has the potentia l to provide the underlyingdata and the communications mechanisms needed to deliver on the ground services.

3. Developing Satellite Infrastructure to Support the Car of the Future 3.1 Satellite Navigation: The backbone of providing networked satellite based services for the car of the future will be satellite navigation. As mentioned above, GPS services are already used for pinpointing location and navigation. However, a significant step forward in performance, and as a consequence increasingthe number of potential applications, will be possible when th e planned European system Galileo becomes available from 2008. 3.2 GPS and Galileo will be interoperable and workingtogetherwill be able to pinpoint location to an accuracy of four metres in dual frequency mode. This contrasts with GPS that, for civilian purposes, can only give reliability of 15 metres. The increased accuracy oVered by Galileo and GPS is essential for satellite based safety related systems. The increased eVectiveness of the combined service will also be invaluable in built up areas (where buildings currently obscure GPS reception and hinder service delivery), which of course represents a major location for car use. While investment in ground based systems could be carried our across the country the Galileo system will remove the need to duplicate terrestrial technology across the UK and internationally. Galileo is also expected to significantly enhance satellite navigation accuracy in northern latitudes. 3.3 In the future we envisage that car location would be calculated entirely by receivingsignalsfrom space. This means that once the space-based infrastructure is operational, the capacity of the system is not restricted and the number of users that can be serviced is infinite. The infrastructure cost of addingnew users is nil. Receiver prices are already fallingat a rate of 25%–30% per year mak ingsatellite navigation potentially available at very aVordable prices. As with GPS, the Galileo signal for the mass market will be free of direct user charges. This creates a real potential to encourage the mass-market penetration of satellite navigation systems. 3.4 Satellite Communications: The car of the future will gain most benefit from satellite navigation where it is integrated with communications systems. (The term for linking communications and navigation data is known as telematics.) Satellite based communications services provide high bandwidth coverage over huge areas. While satellite radio services are not currently available in Europe, they have been introduced already into the USA, where they have seen swift growth. 3.5 Two providers, XM Radio and Sirius Satellite Radio, introduced satellite radio services in the US in the third quarter of 2002. Both companies provide up to 100 radio channels in CD quality for a monthly subscription fee of around $10. These two companies had secured nearly 1.5 million subscribers by the end of 2003. This was a much faster take-up rate than had previously been estimated. 3.6 The range of applications utilising satellite navigation and networked communications systems is only just beginning to be explored, but is likely to include the dissemination of internet content, email and other messaging services for leisure and vehicle-related purposes. 3.7 Terrestrial Integration: Satellite navigation and communications may be deployed as networking technologies in their own right. They may also be supported by terrestrial systems. The advantages of combined systems are clear. The satellite component can help limit the amount of intrusive ground based infrastructure (masts etc). It can also provide very high quality services over large geographical areas. High levels of bandwidth, for example, oVer the potential for fast and reliable data transmission.

4. Delivering the Vision for the Car of the Future—Conclusions and Recommendations 4.1 The advantage of linking cars of the future into sophisticated navigation and communication networks is significant. They range from environmental to security to safety benefits. Satellite systems have the potential to provide the data and communications infrastructure that will be needed to deliver those benefits. 4.2 To make the mass delivery of these services credible it will be important that the Government recognises its role in supporting the essential infrastructure that these services will be built upon. 9098191018 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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4.3 EADS Astrium has welcomed, for example, the Government’s ongoing commitment to the Galileo satellite navigation project. We strongly recommend that the Government continue to support this initiative to both ensure its delivery and the ability of UK companies to gain the understandingof these systems that they will require to play a leadingrole in developingdownstream services . 4.4 The development of communications networks is also important if the cars of the future are to help deliver the significant public policy benefits outlined at the start of this paper. The Government should work to ensure the UK’s vigorous participation in relevant infrastructure provision. We recommend that satellite communications should be considered as a vital backbone solution alongside other terrestrial communication means. Satellites provide significant benefits of coverage and quality, as well as avoiding some of the problems created by the erection of terrestrial transmitters, which may create public resistance to progress in this area. 4.5 Developing“network enabled” cars of the future will provide maximum e conomic and environmental benefits to wider society (minimisingpollution and econom ic disruption) if there are proper incentives to use them eYciently. We recommend that current consideration of road charging systemsbe maintained and strengthened. A bold commitment in this area would be essential to simulatingcommercial partners to develop cost eVective systems for integration in to cars of the future. 4.6 Car manufacture is a global activity. The benefits and applications of networked satellite navigation and communication services will be maximised if it is underpinned by open standards. We recommend that the UK government should take a leading role in arguing for appropriate standards with relevant international authorities. In particular on road charging Europe faces the threat of the development of uncoordinated schemes and systems for diVerent regions or countries across Europe. 4.7 We recommend that the Government should take a proactive stance to ensure that all cars of the future are equipped to deliver driver and wider public benefits that will come with a mass network. The innovations discussed in this paper are significant and should be available to all at a reasonable cost—not just those able to purchase luxury cars. October 2003

Memorandum by 3M (CAR 19)

CARS OF THE FUTURE

1. Introduction 1.1 3M welcomes the opportunity to contribute to this enquiry and is particularly interested in ways of improvingthe safety of vehicles in the future. 1.2 The Committee has asked for information relatingto how much safer cars can be made for drivers and pedestrians, and how this could be achieved. 1.3 Introducingnew technologyon cars in the future would only be one part o f a solution. Cars are often involved in accidents that could be prevented if other vehicles were also made safer by the introduction of new technology. 1.4 As the Committee may be aware, 3M manufactures retro-reflective traYc control materials which have a variety of uses for improvingthe safety of drivers and pedestrians. 1.5 We would like to make the Committee aware of a specific measure that could be implemented that would significantly improve the safety of cars and their drivers, with no cost to the Government and only a very minimal cost to industry.

2. The Problem of Accidents between Cars and Heavy Goods Vehicles (HGVs) 2.1 Accordingto recently released Government statistics, there were mor e than 6,000 accidents involving cars and HGVs in 2002, resultingin a total of 816 car users beingkilled or se riously injured.1 2.2 A disproportionate number of casualties occur at night. In 2002, 42% of all fatalities from road accidents occurred duringhours of darkness 2, although the DfT admits that traYc is at its lightest during this time3. 2.3 HGVs are also far more likely to be involved in those accidents that result in fatalities. In 2002 Goods Vehicles represented just 1.4% of all licensed Road Motor Vehicles (RMVs) in the UK4, yet 15.5% of all fatal casualties in road accidents were theresult of an accident involvingan HGV. 5 2.4 Furthermore, other drivers are more likely to be the casualties in a collision with commercial vehicles than the drivers of these vehicles. In 2001, occupants of commercial goods vehicles, includingHGVs, accounted for only 8% of all casualties on trunk roads, yet accidents involvingthese vehicles account for 26% of all casualties.6 2.5 The combination of these facts leads to the conclusion that preventing accidents involvingHGVs, particularly at night, should be a priority in order to improve safety for cars and their drivers in the future. 9098191019 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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3. A Potential Solution with New Technology 3.1 One simple way to reduce accidents between HGVs and cars at night is to ensure that HGVs are as visible as possible at all times. 3.2 Current lighting on the side of HGVs consists of electric lamps and small reflectors placed at three metre intervals. However, these measures fail to clearly identify the dimensions of the vehicle, particularly at night or in poor weather. The lamps can also fail without being noticed and do not operate without power, for example when the ignition is switched oV or the trailer is disconnected from the truck and parked at the roadside. 3.3 New technology in the form of retro-reflective tape is now available that is able to clearly identify the dimensions of an HGV at night and in poor weather conditions. This tape operates by reflectingthe light from the headlights of oncoming vehicles and therefore does not require power. 3.4 The current lamps should continue to be used. However greater use of new technology retro-reflective tape would greatly improve the visibility of HGVs and help reduce the disproportionately high number of accidents in which they are involved, includingthose with cars. 3.5 The UK is a signatory to a UN Regulation, ECE 104, which permits the sale of this new technology tape, so the Government recognises the potential safety benefits. However, it is not mandatory to have it fitted on HGVs. 3.6 The emergency services already use this material to improve the conspicuity and safety of their vehicles, as do a number of responsible UK companies such as Boots, Sainsburys and Marks & Spencer. 3.7 The price of fittingan HGV with ECE 104 compliant side yellow stripes and rear red box would be around £100 on a truck costingaround £100,000. This represents an insigni ficant increase of 0.1%. 3.8 Italy has recently informed the European Commission that it is makingE CE 104 mandatory for all new domestically registered HGVs and that all existing vehicles should comply within a year. Spain and Greece are also consideringimplementingsimilar measures in the near fut ure.

4. The Results of Fitting Retro-reflective Tape 4.1 In 2001, the European Transport Safety Council (ETSC) concluded that implementingECE 104 would have a significant impact on reducing the number of people killed and seriously injured on roads.7 4.2 Research by The University of Darmstadt found that 37% of all side collisions with trucks at night occurred because they were seen too late. The same study also found that addingretro-reflective contour markings reduce accidents involving trucks and passenger cars, under poor visibility conditions by 95%.8 4.3 Studies in the US, where retro-reflective tape has been mandatory on HGVs since the mid-1990s, have shown that it has reduced side and rear collisions involvingHGVs in “dark- lighted” conditions by 41%.9 4.4 In 2002 the Dutch Transport Safety Board found that implementingECE 10 4 could reduce hospitalisations by 30 and save three lives in the Netherlands every year.10 4.5 There is therefore a significant body of evidence, based on both real accident reports and other research, that the use of retro-reflective tape would have a significant impact on reducingaccidents and casualties on roads in the UK.

5. Conclusion 5.1 A disproportionate number of casualties and severe accidents involve HGVs and cars. Measures to reduce such accidents would be an eVective way of improvingsafety for car drivers. 5.2 This could be achieved in a simple and cost-eVective way, by requiringthat all new HGVs be fitted with ECE 104 compliant yellow side stripes and red rear box. 5.3 Studies from both the US and Europe have clearly shown that fittingHGVs w ith retro-reflective tape would reduce the number of people killed and seriously due to road accidents. 5.4 The cost of this would be an insignificant increase of 0.1% on the price of a new HGV and there would also be no capital outlay for haulage companies. 5.5 A number of groups also support mandating ECE 104 in the UK. These include the road safety charity BRAKE and the RAC Foundation. 5.6 We therefore suggest that the committee recommend the UK Government take the action suggested above as a simple and cost-eVective way of improvingthe safety of car drivers in the future. 9098191019 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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References 1. DfT: Table 23 : “Road Casualties in Great Britain 2002: Annual Report”. Published October 2003. 2. DfT: Table 14b: “Road Casualties in Great Britain 2002: Annual Report”. Published October 2003. 3. DfT: “A measure of Road Congestion in England : 2000”. Published July 2003. 4. DfT: Table 1: “Road Casualties in Great Britain 2002: Annual Report”. Published October 2003. 5. DfT: Table 25: “Road Casualties in Great Britain 2002: Annual Report”. Published October 2003. 6. The Highways Agency—“Making the Network Safer”: 200.1 7. ETSC: “Priorities for EU Motor Vehicle Safety Design”. Published 2001. 8. University of Darmstadt: “Retroreflective Markingof Vehicles”: 2001. 9. US Department of Transportation: National Highway TraYc Safety Administration, “The eVectiveness of retro-reflective tape on Heavy Trailers”: 2001. 10. Dutch Transport Safety Board: “Accidents involvingLorries manoeuvr ingin Darkness”: 2002. October 2003

Memorandum by the Engineering and Physical Sciences Research Council (EPSRC) CAR 20)

CARS OF THE FUTURE 1. The Engineering and Physical Sciences Research Council (EPSRC) is responsible for promotingand supportingbasic, strategicand applied research within its remit for the benefit of the UK. The EPSRC mission is: — to promote and support, by any means, high quality basic, strategic and applied research and related postgraduate training in engineering and the physical sciences; — to advance knowledge and technology, and provide trained engineers and scientists, to meet the needs of users and beneficiaries thereby contributingto the economic comp etitiveness of the United Kingdom and the quality of life of its citizens; and — to provide advice, disseminate knowledge, and promote public understandingin the fields of engineering and the physical sciences. 2. The EPSRC currently invests approaching£450 million a year in the scien ce base for research and trainingin engineeringand physical sciences with a view to ensuringthat the UK will be prepared for the next generation of technological change. 3. The Research Councils welcome the opportunity to respond to this Inquiry to demonstrate its commitment to fundinglong-termresearch in the transport sector where so me £40 million a year is specifically invested on direct or underpinningresearch. This comprises of research related to the manufacture of motor vehicles, components and related products, manufacture of transport equipment and transport operations and supportingservices. Further details are avail able at www.epsrc.ac.uk.

Summary of Support 4. EPSRC and formally SERC, has been strategically involved with various focused activities and investments within automotive and transport research sector since 1990.

Years Title of Activity Partners Description 1990–95 Transport Infrastructure EPSRC, Department The Programme was aimed at Operations LINK Programme of Transport (DOT) funding research to generate the scientific and technological advances needed to solve the problems of the ever growing pressure on the national transport networks. Priority topics covered: Road Safety Road TraYc Congestion Environmental Impact Construction & Maintenance EPSRC value of grants £2 million 1995–2000 Innovative ManufacturingEPSRC The objective was to improve Initiative Land Transport the international Programme (LINK and non- competitiveness of UK LINK) manufacturers by: Reducingthe 9098191020 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Years Title of Activity Partners Description cost and capital of the product introduction process Increasing product quality through design and manufacture Increasingthe flexibility and responsiveness of the supply chain Reducingthe impact of manufacturingon the environment Identifyingnew ways to satisfy consumer demands EPSRC value of grants £11.6 million 1996–99 Inland Surface Transport Department for The aims of this Programme LINK Programme Transport (DfT), the responded to the EPSRC, the Economic recommendations of the and Social Research Technology Foresight Council (ESRC) and Transport Panel. Its scope is to the Department of identify solutions which Trade and Industry contribute to the development (DTI) of a transport system that is eYcient, safe and both environmentally and socially acceptable. EPSRC value of grants £3.3 million 1997"present Foresight Vehicle Programme DTI, EPSRC, DfT, This is the UK’s national Highways Agency, automotive R&D programme Department of Health, aimingto promote technology Home OYce and MoD and to stimulate suppliers to develop and demonstrate market driven enabling technologies for future motor vehicles (cars, taxis, HGVs, buses, light commercial vans, etc) that must satisfy increasingly stringent environmental requirements as well as meetingexpectations for safety, cost, performance and desirability. EPSRC value of grants £5 million 1999–2002 Future Integrated Transport EPSRC This initiative oVered a (FIT) Programme (LINK and challenge to the research Non-LINK) community to help achieve integration by identifying and developingthe elements of a modern transport system which will deliver improvements contributingdirectly to the quality of life of the UK population whilst enhancingthe performance of the UK economy. EPSRC value of grants £3.1 million 2001–present Establishment Innovative EPSRC The aims of Innovative ManufacturingResearch ManufacturingResearch Centres Centres are to: Create, deliver, disseminate and exploit a coherent and unified programme of novel and innovative research in innovative manufacturingFocus on the integration of engineering and management 9098191020 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Years Title of Activity Partners Description science to deliver novel, competitive and relevant research outputs. Generate significant world-class new knowledge and provide strong support to the UK manufacturingsector, in its broadest sense. Automotive specialisms exist within Universities of Bath, Loughborough, Cranfield, Warwick and Nottingham. 2002–-present Sustainable Urban EPSRC The key drivers for this Environment (SUE) Programme are to improve the Programme) quality of life of the UK’s citizens, support the sustainable development of the UK economy and society, and to meet the needs of users of EPSRC-funded research in industry, commerce and the service sector. One cluster addresses urban transport and urban design. Four transport and urban design scoping studies have been funded and these will be submittingfull consortium bids in October 2003 targeting the implementation of integrated public and commercial transport systems, including multi-modal interfaces related to the optimisation of the urban built form and land use for industrial, retail, domestic and social purposes. EPSRC potential value of grants £5 milliion Ongoing Engineering Responsive EPSRC This Programme is responsible Mode for investingin UK engineering research and trainingof the highest calibre. Whilst other Programmes focus on highly user led applied research, Engineering has the responsibility to ensure that blue sky adventurous engineering research is encouraged across the entire spectrum that basic science and technology are translated into applications and that emerging areas are captured and nurtured.

5. EPSRC also funds automotive related research grants from across its wider portfolio with significant investment from the Materials Programme and to a lesser extent the Information Communications Technologies Programme.

Dissemination and Policy development 6. 2000 EPSRC theme day in land transport The objective of the theme day was to evaluate the eVectiveness of EPSRC’s support for research in the land transport sector on the basis of research quality, people funded, impact of research, and exploitability 9098191020 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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of research. This event also identified priority areas for future investment which included rail, public transport research, freight and inter-modal integration. 2003 Keep us moving: a transport showcase of EPSRC and ESRC funded research to transport policy makers, industry, stakeholders and practitioners. This showcase was an opportunity to see and discuss publicly funded research that has already made a genuine, beneficial impact on society. It was also able to provide a platform for debate to some of the key outstandingproblems facingtransport policy. The showcase was designed to be of interest to local and national Government, consultants, research establishments, industry, trade associations, regulatory bodies and other stakeholders and practitioners. A full report of the workshop is available from the EPSRC website.

Conclusions 7. In conclusion, EPSRC has funded significant research in the automotive sector some of which addresses the focus if the inquiry into Clean Vehicle Technology and Vehicle Design and Control. Figure 136 summarises EPSRC’s fundingsince 1994 on automotive related research and Figure 237 gives an overview of those companies currently collaboratingon EPSRC research in the wider tr ansport sector for all current grants as at 1 April 2003. October 2003

Memorandum by the Institution of Civil Engineers (CAR 21)

CARS OF THE FUTURE

Institution of Civil Engineers The Institution of Civil Engineers (ICE) is a UK-based international organisation with over 75,000 members ranging from professional civil engineers to students. It is an educational and qualifyingbody and has charitable status under UK law. Founded in 1818, the ICE has become recognised worldwide for its excellence as a centre of learning, as a qualifying body and as a public voice for the profession. The members are particularly suited to give a sound impartial professional view on this topic as their expertise covers all types of transport systems worldwide. Our response draws on recent ICE publications as well as a substantial contribution from the Transportation Research Group of the University of Southampton. ICE urges the appointment of an independent Chief Engineering Adviser to ensure a co-ordinated, long- term, sustainable approach to infrastructure planningsuch as transport , rather than decision-makingbeing dominated by political short-termism. ICE believes that the position should be similar in remit to the Government’s Chief Medical OYcer or Chief Scientific Adviser.

Clean Vehicle Technology:Future Fuels and the Extent to Which they Solve Environmental Problems Petrol engine vehicles have been subject to increasingly stringent regulations on the levels of tailpipe out emissions. The Society of Motor Manufacturers and Traders (SMMT, 2001) predict that by 2010 the regulations on emissions will be so tight that it will be practically impossible to reduce them further. Increasingly sophisticated computerised engine control and more eVective catalytic converters have led to vast improvements levels of tailpipe emissions, with the SMMT suggesting that it requires 50 modern cars to produce the equivalent emissions of a 1970’s car38. The use of catalytic converters can lead to environmental problems of their own as the heavy metals used in the reactions have been found to persist in the environment, with the potential to accumulate in the food chain (Ananthaswamy, 2001). Future developments will then have to be directed at increasingthe energye Yciency of such engines. New developments such as lean burn and direct injection engines promise to oVer significant improvements in energy eYciency—Toyota estimate 20% and 25% improvements in fuel economy for the respective technologies. Reformulation of fuels such as Ultra Low Sulphur Petrol can lead to immediate reduction in emissions (FoE, 2000) although there are concerns that such processes simply move the emissions from the roads to the power stations where the extra energy for required for reformulation is provided.

36 not printed. 37 not printed. 38 It is likely that this assertion is based upon the emissions output over the ECE Urban and ExtraUrban drive cycles. Studies have shown these drive cycles to require only a very small portion the available engine power output and that beyond the ranges tested in the drive cycles emissions may be no better than a pre EURO standard vehicle (AVERT, 2003; Kaegeson, 1998). It is thought that this is a combination of statisfying vehicle performance requirements of consumers (ie emissions for power outputs beyond what is tested duringthe legislativecycles are of secondary impor tance) or the catalytic converters are sized to be able to cope with exhaust emissions over the required engine power ranges, whilst anythinggreaterleads to instability in the catalytic converters control of emmissions. 9098191021 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Similarly to petrol engines, diesel engine vehicles are also improving in terms of energy eYciency and tailpipe emissions. Improvements in control of the fuel delivery process and exhaust gas recycling (EGR) leadingto more e Ycient burn of the diesel. An increased burn eYciency not only helps improve fuel consumption but decreases the major drawbacks of diesel engines, namely particulate matter and NOx. Recent changes to the quality of diesel fuel have allowed the development of novel technologies for exhaust after treatment such as NOx reducingcatalytic converters and particulate traps. These technologie s are widely available for larger vehicles such as buses and HGVs, and will increasingly appear on diesel cars. Since diesel is the most eYcient of current internal combustion engines it is likely that it will be a significant form of vehicle power in the twenty first century especially for heavy duty vehicles and possibly diesel hybrid electric vehicles (Morita, 2003; SMMT, 2003). Liquid Petroleum Gas (LPG) has been a relative success story in the UK with increasingnumbers of vehicles using the fuel. The UK Energy Savings Trust has recently reported that 100,000 UK road vehicles are usingLPG. When compared to petrol, LPG o Vers a slightly lower CO2 emissions but is thought to produce higher NOx emissions. When LPG is compared to diesel CO2 emissions are slightly higher as are emissions of CO and HC but have lower emissions of particulates and NOx. It is suggested that LPG is more suited to heavy duty vehicles rather than cars and vans because of the significant weight of the onboard tank (FOE, 2000), it therefore seems strange that LPG has been promoted so heavily. One possible reason for such promotion is the relative ease with which it is possible to convert current petrol vehicles, that it can relatively easily be added to the existingfuel infrastructure. As both petrol and diesel vehicles become cleaner and more eYcient, any advantage held by LPG in terms of eYciency and toxic emissions will be negated. LPG has proved to be a useful introduction for the public to the idea of alternative fuels. Natural gas can be used in vehicles either as Compressed Natural Gas (CNG) or Liquified Natural Gas (LNG). Natural gas is very clean burning compared to diesel and petrol due to low temperatures required to store LNG, CNG seems to be the easiest form in which vehicles will utilise natural gas (FOE, 2000). CNG will become a significant fuel for HGVs in the future, especially in urban areas, due to its quiet combustion (approximately six time quieter than diesel) and low emissions. Similarly to LPG, CNG requires a large tank and so is not thought to be suitable for use in smaller vans and passenger cars. It has been reported that, compared to diesel, CNG oVers CO, HC, NOx and particulate reductions of 97%, 81%, 86% and 94% respectively. The CO2 emissions per unit heat value are 20% lower than petrol or diesel (Morita, 2003). CNG is currently used in spark ignition engines but an engine which self ignites (ie similar to diesel) has been developed in Japan. Use of CNG in the UK would be fairly easy due to the existence of the national gas grid (FOE, 2000). Fuel cells are widely championed as the future means of vehicle propulsion. Put simply, fuel cells use the chemical reaction between hydrogen and oxygen to produce electricity which then powers the vehicle in a similar manner to an electric battery vehicle. Provided that the hydrogen is produced usingrecycled electricity then the only emissions duringthe whole of the fuel life cycle is water vapour. On board storage of pure hydrogen is an obstacle to vehicle development due to its lower energy density compared to diesel or petrol (ie it requires a large amount of space for the energy produced) although developments in pressurised tanks are negating this problem. Other fuel sources can also be used for fuel cells though, because they are hydrogen carriers, these include methanol, ethanol, natural gas, various hydrides and even petrol or diesel. Use of some of these hydrogen carries will emit CO2. Within the next few years fuel cell vehicles are predicted to be enteringthe commercial market. Because of the number o f fuellingoptions available, perhaps the biggest obstacle to the use of hydrogen is the development of a refuellinginfrastructure. To allow simple public understandingregardingfuel cell vehicles is it wort hwhile creatinginternational standards on how fuel cell vehicles will be fuelled? Public introduction to automotive fuel cells may best be achieved through their use in buses or taxis. Progress with the use of hydrogen as a direct fuel for use in spark ignition engines has also been made. Hydrogen fuelled spark ignition engines do produce small amounts of NOx. The safety aspect of hydrogen storage is often questioned but according to safety tests by Ford and the US dept of Energy current methods mean hydrogen storage is safer than petrol. BMW has developed a 7 series model which, when run solely on hydrogen, has a limited range of only 180 miles (although the petrol tank can take it a further 400 miles) (Times online, 2002). An adequate fuellinginfrastructure will therefor e be required if the vehicle is to run on hydrogen alone and since when run on petrol the fuel eYciency is poor (only 26 mpg) this seems at this stage to be an incomplete solution but could be a positive starting point. Synthetic fuels are currently beingdeveloped (and in use) which act as sub stitutes for diesel (Morita, 2003; SMMT, 2001 and FOE, 2000). One such substitute is biodiesel. The use of 100% biodiesel requires special adaptation of the engine and most manufacturers only support the use of a 5% blend. There are question marks as to the real advantage of biodiesel as it currently oVers no real emissions advantage over conventional diesel. The argument for biodiesel is the plants used to produce it (egrapeseed) take up CO 2 when they are grown and that this oVsets the CO2 when it is burnt. Whilst this sounds a simple solution energy intensive production, the required area of land and ecological consequences of such plant growth are negative arguments for such a fuel. Use of biodiesel in Europe and the USA is relatively common compared 9098191021 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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to the UK. Other synthetic fuels can be created from coal, natural gas and even waste plastics. The energy use in such a process may result in even greater lifecycle emissions for such a fuel and so may not be the most appropriate solution. Ethanol/methanol are alcohol biofuels used in conventional, or similar, engines. Proponents put forward the same CO2 argument as for biodiesel for their greater use, although the same counter arguments are also applicable. Alcohol fuels are known to corrode metal parts, removes lubricatingoils and can be expensive to produce. There are emission savings to be made through use of these fuels with VOCs and NOx being reduced plus elimination of particulates. Current EC legislation allows only a 5% blend. Whilst battery electric vehicles are very eYcient it seems that there will be a limited market for their use in the future. A number of manufacturers are scalingdown their electric ve hicle research (egFord has recently ceased research on its electric vehicle project in Europe). Whilst electric vehicles can oVer emissions benefits in terms of tailpipe emissions, cricitcs argue that the pollution problem is simply beingshifted elsewhere—this however is not such a problem if the electricity is generated from renewable sources. The major drawbacks for battery electric vehicles are the slow recharge time and short cruisingdistance. These vehicles are best suited to use in urban taxi systems (vehicles can be recharged in between fares). An “Air car” has been developed by a company called Motor Developers International (MDI) (BBC, 2001). The manufacturers have developed an engine which runs on compressed air. At its current stage of development the vehicle is best suited to urban/city centre drivingcondi tions due to its limited range and performance. The manufacturers state that the vehicle can run for 10 hours in urban traYc conditions. Recharge time for the compressed air tanks is reported to be three minutes when at a special refill station or three and a half hours when done at home. There are no tailpipe emissions and the only oil used is engine lubricant which is filtered out before the used air is released from the car. Critics of the concept have pointed to the fact that the compression of air requires electricity and that the use of such vehicles merely shifts the pollution problem elsewhere. Such a problem is already experienced with a number of the fuel options described above (egreformulated fuels to electrolysis for hydrogenprod uction). However, through use of renewable energy such a vehicle can be truly zero emission. MDI even report that they have patents for compression of air usingpower generatedfrom rivers. Hybrid vehicles, which at present combine a combustion engine with an electric battery, are considered to have the greatest potential in the short to medium term. This doesn’t have to be a combustion engine however (egthe air based enginemaybe used). Current models have vastly su perior fuel eYciency compared to an equivalent conventional diesel or petrol car makes. The purchase costs of current hybrid models are relatively high but these should fall as demand increases due to economies of scale. The Toyota Prius was approximately £4,000 more expensive than a comparable conventional car (at current fuel prices the vehicle would start makinga monetary savingafter 26,000 miles, approximately tw o-three years for a typical driver). However, the second generation Prius, which has recently been launched in Japan has 11,000 vehicles in the first two weeks of launch—eight times its expected demand. . The eYciency of hybrid vehicles comes from features such as regenerative braking, engine shutdown instead of idling, and allowing engine use under higher load conditions (when engine eYciency is greatest)—all this makes hybrid vehicles especially eYcient in urban conditions (Morita, 2003). Hybrid is a broad term and similarly to combustion engine, there are diVerent types of hybrid options, each suited to diVerent drivingconditions (ie series, parallel or series/parallel). All the fuels described above have the potential to significantly reduce the emissions of both local (egCO, HC, NOx) and international concern (ie CO2). To maximise this benefit it is important that the vehicle fuels are used for the purposes to which they are best suited. For example CNG is particularly suited to use in HGVs which operate in urban areas, electric vehicles are suited to city centre/urban use, diesel maybe suited to HGV use for longer distance journeys. Comparisons of the fuels above are problematic in such a short review since the technologies being compared are at varying degrees of development. A full study would be preferable which considers future eYciencies, emissions and costs of the respective fuel and vehicle types from UK perspective. With all the fuels described above, those which oVer zero emissions (egbattery electric, fuel cell or air) at the tailpipe are the most attractive from the environmental perspective. Whilst there maybe some substance to the argument of the pollution problem being moved elsewhere, the responsibility and control of the stationary source emissions is simpler than for mobile sources thus enabling better application of “polluter pays” principles plus stimulates the development for renewable energy sources. The requirement for energy diversification and level consumption is not only an issue related to environmental concerns but also to security ie a nations dependence on energy imports from overseas (Johnson, 2003).

Future Actions by the Government In addition to current Government measures to increase use of alternative fuels the application of a nationwide, stratified road user charging scheme could ensure the polluter pays if the charge were to be based on emissions of the vehicle as well as the time of day and road used. A strategy at national level which considers both CO2 and toxic emissions (egCO, HC etc) is required. Under the current Governme nt policy toxic emissions are dealt with at a local level which puts local authorities with busier or more congested roads 9098191021 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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at a disadvantage. By declaring Air Quality Management Areas (AQMAs), local authorities are forced to develop strategies which in many circumstances place it at an economic disadvantage since a neighbouring authority will not have restrictions on travel choice. The greatest impact on emissions are initiatives which are implemented at a national or EC level rather than seekingsmall gainsat the local level.

Vehicle Design and Control:Safety: Human error is a cause of 95% of road accidents, and speed is a major factor in the severity of injuries. Electronic traYc calmingon all UK roads could ensure that vehicles travel at a speed which m inimises risk of injury and eliminates risk of fatality. Electronic collision avoidance systems could prevent the majority of collisions—but not all: pedestrians and cyclists will make mistakes which cannot be prevented by any electronic system. Measures to reduce the severity of impact, such as compressible vehicle fronts and pedestrian air bags on all vehicles could, combined with the electronic measures detailed above, achieve the prevention of the majority of road deaths (ICE 1997).

Vehicle Use:Can Technology Prevent Uninsured Driving? We refer the Committee to our response to their Inquiry into TraYc Law and its enforcement, para 10: However, automatic number plate readers can be linked to a database (egthe licensingauthority) to sound an alarm when an unlicensed or uninsured vehicle is detected. Police action is then required to stop the vehicle. This is one example of how camera technology can be used to focus police eVort. The system is installed in patrol vehicles by some police forces. ICE advocates widespread use of ANPR by all police forces to apprehend such vehicles and so improve compliance for vehicle registration so that both police (speed and red light) and highway authority cameras (includingfor road tolls) will be more e Vective.

Vehicle Design for Recyclability Standards should be set to ensure that vehicles can be easily broken down into recyclable parts in order to promote sustainability. ICE would be pleased to supply further information on the above points.

References Ananthaswamy, A. (2001), New Scientist Daily News, http://www.newscientist.com/news/news.jsp?id%ns9999399 BBC (2000), The car that runs on air, http://news.bbc.co.uk/1/hi/world/africa/988265.stm or http://www.theaircar.com DETR (1999) Are you doingyour bit? campaign,Update issue 2. FOE (2000) Cleaner cars and fuels, http://www.foe.co.uk/resource/briefings/cleaner—cars—fuels.pdf ICE (1997) A vision for Transport 2020, ISBN 0 7277 2657 9 Johnson, E (2003) “LPG: a secure, cleaner transport fuel? A policy recommendation for Europe” Energy policy, 31, p 1573–1577. Kageson, P (1998). Cycle-beating and the EU test cycle for cars. Brussels, European Federation for Transport and Environment: pp9. http://www.t-e.nu/docs/Publications/1998 per cent20pubs/T&E per cent2098-3.pdf Latham, S, McDonald, M and Samuel, S (2003), AVERT—Final project report, TRL, University of Southampton and Oxford Brookes University. Morita, K (2003) “Automotive power source in 21st Century” JSAE review 24, p 3–7. SMMT (2001) “Towards a shared vision—future fuels and sustainable mobility”, London, http://www.smmt.co.uk/publications/ publications.cfm?CFID%599602&CFTOKEN%98273260&sid%212&tsid%146&catid%3040 Times Online (2002) Minister is set for collision on move to hydrogen cars. October 2003 9098191022 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by the Department for Transport (CAR 22)

CARS OF THE FUTURE

Overview 1. The motor car has evolved gradually over the past 100 years. The basic concepts have changed little, although the motor industry has become increasingly skilled at applying advanced engineering solutions to deliver real safety and environmental improvements. The advent of microelectronics and an awareness of the impact of climate change are now accelerating change. Cars are startingto incorporate computing technology that enables designers to challenge the accepted rules for dynamic behaviour, deliver very low emissions and take advantage of advanced fuels. Cars are also becoming simpler to control. This is just as well, as the complexity of the drivingtask is increasingas roads become mo re crowded and cars provide more information to the driver. 2. The challenge is to harness the technologies of the future to ensure that society as a whole benefits, as well as the motorist. Cars can now be engineered to behave in a far more “fail-safe” manner, with sophisticated on-board diagnostic systems and devices to discourage them from beingdriven in an unsafe manner. There is also scope for improvingtheir environmental performanc e. Much of this will not necessarily happen of its own accord. Government will have to research what regulatory, proprietary, institutional and other enablingfactors need to be in place to enable key n ew technologies to flourish. Issues such as IPR (intellectual property rights), open access and open standards are critical to the fosteringof innovation. The role of Government is not, however, to devise a technology masterplan, or to second-guess which technologies will deliver the greatest benefits. Rather, it is to facilitate the development and introduction of promisingnew technologies,and to ensure the full involv ement of the UK automotive and supplier industries.

Improving Safety 3. There is much more that can be done to improve the safety of cars to the benefit of all road users. The Government’s Road Safety Strategy, which established our national casualty reduction targets for 2010, anticipated a major contribution from improved vehicle design. We believe that there is still scope for improved vehicle design and control that will reduce casualties even further beyond the timeframe of the current strategy. 4. In the past the emphasis has been on regulation. Over the past decade this has been supplemented by consumer information initiatives such as the EuroNCAP programme. This programme is now a real force for change, with manufacturers striving with each other to produce safer vehicles. We intend usinga similar approach to encourage improvements in areas other than crashworthiness. 5. The Government-sponsored trial of in-vehicle speed management is an example of where government research can stimulate work in areas that might not otherwise be pursued by the car industry. The trial is currently underway with approximately 80 subjects over a two year period that will assess a speed management system using satellite-based positioning equipment. Initial results from the trial will be available in about a year but evidence compiled duringearlier work indica te that injuries and accidents could be reduced by up to 20% if this technology were in common use.

Protecting the Environment 6. Cars can have an impact both on the local environment (largely through emissions of harmful air pollutants and noise) and on the global environment (through emissions of greenhouse gases). Cars of the future, as well as beingclean, will emit progressivelyless carbon dioxid e—the main climate change gas. 7. Emissions of air pollutants from cars (the key ones beingthe “regulated ” emissions of carbon monoxide, hydrocarbons, oxides of nitrogen and particulate matter) have been reduced by 95% over the last two decades, through eVective EU-wide regulation. This represents a remarkable achievement, and has meant that total emissions of key air pollutants from cars have reduced dramatically despite unprecedented levels of traYc growth. The latest “Euro IV” standards become mandatory from 2005 and a further round of Euro standards is beingconsidered—likely to be implemented by around 2 010. The emphasis of this next round may focus on diesel cars, whose emissions of oxides of nitrogen and particulate matter are still significantly higher. 8. As a result, air quality will continue to improve, even with increased traYc, as newer and cleaner cars replace older ones. The remainingproblem is a localised one—some highday time concentrations in specific congested built-up areas, mainly in London. New vehicle technology will assist, particularly buses and cars, with “hybrid” (combined electric—internal combustion) engine systems which will increasingly be able to switch onto battery-only operation, with zero emissions, when drivingth rough localised air quality hotspots. 9098191022 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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9. But the major ongoing challenge for cars of the future is to reduce carbon dioxide emissions—an essential component in achievingthe Government commitment in the Energy White Paper Our energy 39 future—creatinga low carbon economy , to put the UK on a path to a 60% reduction in CO2 emissions by 2050. The Government had already issued its “PoweringFuture Vehicles” st rategy40 settingout how it is promotingthe UK’s shift to clean, low-carbon vehicle technologiesand fu els, together with ensuring the full involvement of the UK automotive industries in the new technologies. A Ministerial Low Carbon Group is overseeingthe implementation of the Strategy,and its first annual repo rt was published on 15 October41. 10. The Energy White Paper identified significant early opportunities for further improvements in vehicle eYciency, cuttingfuel consumption and therefore carbon dioxide emissions ; and it identified long-term need for a progressive shift to low-carbon forms of fuels. 11. Improvements in car eYciency are already being pushed forward through the Voluntary Agreements between the EU Commission and the European, Japanese and Korean car makers. The present agreements are to improve new cars’ average fuel eYciency and reduce average CO2 emissions, from 190 grammes per kilometre(g/km) in 1995 to 140g/km by 2008–09. Significant further improvements look capable of halving today’s average fuel consumption and CO2 emissions, for example through light-weight materials, advanced transmission systems, and combustion engine—battery “hybrid” systems. From the technological standpoint, the development path to improved eYciency is compatible with longer-term low-carbon fuelling options and these vehicle technologies will remain relevant. 12. The Government regards the EU Voluntary Agreements as an eVective mechanism, giving car makers a stable long-term framework, and it announced in the Energy White Paper that it would work with the Commission (which is currently reviewing progress on the 2008–09 target and further possibilities) in developingfurther Voluntary Agreementsor equivalent measures, based u pon cost eVective solutions.

Clean Vehicle Technology

Q1 What fuels will be used to drive the vehicles of the future?

13. Long-term deep CO2 reductions will call for change in the nature of the fuels used in cars, shifting progressively from today’s fossil fuels (petrol, diesel, LPG and Natural Gas), to lower-carbon forms of energy. The two main possibilities look to be biomass-based liquid fuels (biofuels such as biodiesel and bioethanol—alcohol that can be blended with petrol), or renewable hydrogen. 14. Today’s biofuel is mainly made with expensive virgin crop material, such as rapeseed, wheat, corn, and sugar. But it can potentially be made also with the more basic forms of biomass—coppice, energy crops, farm, forestry and food industry waste, and domestic refuse—more cheaply, with higher CO2 savings per litre, and available on a very large scale. Liquid biofuels would use the existingfuel distribution network, and go into conventional vehicles. These have the eVect of loweringtotal carbon emissions because the feedstock material breaks down CO2 and absorbs the carbon as it grows. Biodiesel is already starting to be used in the UK and is sold in the form of 5% biodiesel blend, which can be used in existing vehicles without adaptation and under warranty. 15. Most of the major carmakers are developingexperimental hydrogenvehi cles (with either fuel cells— which combine the hydrogen with oxygen directly to produce electrical energy, or with internal combustion engines), though it appears unlikely that they will enter into mass production before 2020. Hydrogen powered vehicles will be very clean, as they will emit almost no pollution. But whether or not they oVer any carbon savings will depend critically on how the hydrogen is produced, stored and distributed. Hydrogen produced from fossil fuels such as natural gas, for example, oVers few carbon savings, but hydrogen produced from renewable electricity could be eVectively carbon-free.

Q2 To what extent will they solve environmental problems? 16. In terms of local air quality, the last two decades have already seen a dramatic reduction in emissions of harmful air pollutants from cars. The challenge now is to build on this achievement. Biofuels have a more- or-less neutral eVect on emissions of the key “regulated” pollutants, especially when they are used in the form of a blend with conventional petrol or diesel. Fuel-cell cars running on hydrogen would emit virtually no local air pollutants, and are sometimes described as “zero emission vehicles”, although their overall environmental performance will depend on how and where the hydrogen is produced.

17. Both biofuels and hydrogen have a direct impact on CO2 emissions related to the amount of fossil fuel that they displace. For biofuels this displacement is more-or-less one to one in mass terms. Hydrogen can only displace fossil fuel use if it is generated from renewable electricity, biomass or, potentially, direct nuclear hydrogen production, rather than from the natural gas used today.

39 Energy White Paper: Our energy future—creating a low carbon economy. February 2003. DTI. 40 PoweringFuture Vehicles—The Government Strategy.July 2002. DfT, DTI, D efra, HM Treasury. 41 Implementingthe PoweringFuture Vehicles strategy—Reportby the Minist erial Low Carbon Group. October 2003. 9098191022 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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18. As announced in the Energy White Paper, the Government is currently carryingout an assessment of the implications of both hydrogen transport and biomass fuels, for completion early next year. The specification of the assessment is available from the DTI’s website42.

Q3 How successful have Government grant and tax break initiatives been to date? 19. Financial incentives have been successful in encouraging the transition to unleaded petrol, road fuel gases and, more recently, to ultra low sulphur fuels. There will be a further duty diVerential from September 2004 to support the shift to the newest “zero sulphur” fuels. Hydrogen is to be exempt from duty for a limited period to encourage further development and early take-up. Since July 2002, biodiesel has benefited from a fuel duty incentive of 20 pence per litre compared to ultra-low sulphur diesel, and this has already resulted in biodiesel sales of some two million litres a month. UK sales of biodiesel are forecast to increase further next year as a number of large new plants come into operation. Bioethanol will enjoy a similar duty incentive from January 2005.

20. Since 2001, Vehicle Excise Duty—previously flat rate for all cars—has been linked to new cars’ CO2 emissions. Company Car Tax, which aVects around 20% of car sales also moved to a CO2-related basis from April 2003. Early evidence suggests that Company Car Tax significantly influenced buyers’ choice of cars, includinga 38% increase in sales of diesels (which are lower—CO 2) between 2001 and 2002. Market research carried out for Government by MORI suggests that graduated VED has not yet had a similar impact. 21. The Government has also supported the take-up of clean, low-carbon, vehicles by means of Powershift grants which can help to oVset the additional purchase cost of cleaner vehicles. These support the purchase of alternatively fuelled vehicles (such as LPG-fuelled cars and CNG-fuelled buses) which oVer air quality benefits, although grants are now available to help oVset the additional purchase costs of fuel- eYcient hybrid vehicles. The Government is currently reviewingthe focus of the Powershift programme with a view to extendingit to other vehicles with exceptionally low CO 2 emissions.

Q4 What does the Government need to do to make it happen? 22. The PoweringFuture Vehicles Strategysets out the steps beingtaken by the key Government Departments—DfT, DTI, Defra and the Treasury—to “make it happen”. These include: (a) supportingconsumer take-up of new, low carbon vehicles; (b) setting challenging targets for low-carbon vehicles; (c) purchasingclean, low-carbon, vehicles in its own fleets; (d) using its grant programmes to fund research development and demonstration projects; (e) workingwith stakeholders to maximise the potential for UK business to gain competitive advantage from new vehicle technologies; (f) facilitatingthe quick and smooth development of new fuel distributio n infrastructures; and (g) working proactively within the EU and other international fora to secure the development, introduction and take-up of new vehicles and fuels. 23. The first Ministerial report gives an account of progress since the Strategy was issued. But the Strategy underlined that a successful shift to the cars of the future depended on all the stakeholders—the auto and fuel industries, the research and technology sectors, environmental interests and, of course, consumers. And the Government has welcomed and is supportingthe creation of a “Low Carbon Vehicle Partnership”, to generate action by partners to speed the UK’s move to clean low-carbon transport. 24. As regards Research, Design & Development, the DTI Foresight Vehicle Programme funds pre- competitive research into new automotive technologies. Current funding is now fully committed and the DTI’s review of Innovation Policy is consideringhow future fundingfor th ese technologies will be made available. The DfT New Vehicle Technology Fund helps turn research into demonstration trial vehicles. Current NVTF projects include “HyTrans”, a hybrid delivery van which—if the demonstrator confirms the projected 30% fuel saving—Ford plan to take into production at Southampton. Alistair Darlinglaunched a major project under the NVTF—an “Ultra Low Carbon Car Challenge”, oVeringindustry financial help to produce full-sized mainstream cars with very low fuel consumption and CO2 emissions, over 80 mpg performance, and capable of beingmass-produced at an a Vordable price within four to eight years. Five projects have been selected for funding—details are set out in the attached annex. 25. The Automotive Innovation and Growth Team report made a number of recommendations to Government to safeguard the future competitiveness of the UK automotive industry. Amongst these was a recommendation to establish a Centre of Excellence on low-carbon and fuel cell technologies. The Low Carbon Vehicle Partnership is presently advisingon the configurationof t he Centre.

42 http://www.dti.gov.uk/energy/sepn/futuretransport.shtm 9098191023 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Vehicle Design and Control

Q5 How much safer can cars be made for drivers and pedestrians? 26. Despite improvements in recent years, there is still considerable scope for progress. While the fundamental safe control of the vehicle rests with the driver, it is feasible that a large proportion of accidents could be avoided by developments in car technology already under development, such as lane keepingand collision avoidance. Other improvements will come from improvingdesign of the fundamentals of the car, by using computer aided design and a range of new materials to improve structures and dynamic performance. Improvements might also be achieved by using innovative sensingtechnologyto adapt seat belt tension and airbagdeployment to the particular stature and ageof the occupant. The recent European agreement to introduce staged requirements for pedestrian protection is very welcome and owes much to research commissioned by our Government over the last two decades. 27. Much work is directed at improvingthe crash compatibility of cars, par ticularly for front-to-front and front-to-side impacts: the UK plays a leadingrole in this area, pursui ngresearch and chairingan international workinggroup. 28. The use of electronics to help the driver control the car also looks set to increase. Advanced systems that automatically adjust brake eVort accordingto the available tyre to road gripare already beingo Vered on some vehicles. Other systems that automatically apply maximum brake eVort in emergency-stop conditions are also beingo Vered on some passenger cars. Separately, one car manufacturer’s data suggests that in 2001 there was a 4% reduction in accidents, compared to the year before, which could be directly attributed to electronic stability control.43

Q6 Is the human driver better than the computer—where do we draw the line? 29. In the current state of development computers should be viewed as an aid to the human driver. Having said that, it is certain that computers will soon be able to out-perform humans in all those areas where we currently rely on a combination of training, instinct and practice to translate high-level driver decisions into actual control of the vehicle. Anti-lock brakes and stability control systems are commonplace examples of this trend. Lane keeping, safe-distance keeping, speed limit observance and emergency braking are all activities where computers will be able to intervene and deliver performances that are superior to even the most gifted driver. The deployment of airbags, although not directly related to the drivingtask, is outside human control and completely dependant on computer activation. 30. The line has to be drawn at the limit of what can be judged as safe. This boundary will inevitably shift as technology improves. Of the systems mentioned above, lane keeping has yet to emerge from its development phase. All production cars are subject to European type approval and new systems would need to have their safety assessed individually44 if there were no appropriate standard to apply.

Q7 Can e-safety initiatives prevent accidents or lessen their impact? 31. There is no doubt that the use of e-safety technologies will continue to grow and to be of benefit, and many are mentioned specifically in this memorandum. There is also a European Commission eSafety workinggroupreport 45 that identifies areas where real progress is possible. Some of the initiatives might eventually need legislation to bring them to fruition, whilst others might be consumer-driven. In either case their success depends on sound cost-benefit arguments emerging.

Q8 Is there a trend towards bigger and heavier cars? 32. Although we have no detailed statistics on this, there is evidence that the size of vehicles is increasing. For example, a 1974 Mk1 VW Golf was 3,721 mm long and weighed 820 kg, whereas the current Mk4 Golf is 4, 149 mm longand weighs1,124 kg 46. The increases are mainly due to improved occupant comfort and the safety improvements incorporated into cars in recent years (egairbag s, side impact protection, stronger structures, etc). To a lesser extent, tougher environmental controls have also had an eVect. It is a testament to how technology has advanced that modern cars in any “class” are still considerably more fuel-eYcient than their predecessors. 33. The car market is also changing, with consumers buying “lifestyle”, but heavier, vehicles such as Sports Utility Vehicles and Multi Purpose Vehicles. A new generation of very small cars, some of which may be second or third cars in a household, may oVset this trend.

43 Information and Communication Technologies for Safe and Intelligent Vehicles, Communication from the Commission to the Council and the European Parliament, COM(2003) 542 final, September 2003. 44 Article 8(2)(c) of EU Directive 70/156/EEC, as amended by 92/53/EEC, sets out the procedures for granting European type approval of novel technologies. 45 Final Report of the eSafety WorkingGroup on Road Safety, European Commiss ion, November 2002. 46 Autocar, 26 August 2003. 9098191023 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Q9 What influence does the Government have in a global car market? 34. The UK’s involvement in the auto industry is often underestimated. Seven of the ten largest global companies produce cars in the UK. Overall, the industry employs 800,000 people and accounts for 9.5% of UK’s exports. 35. Settingappropriate construction requirements for new cars is a key ar ea for the Government and for industry, and this field is now subject to exclusive EU competence. The EU represents more than a quarter of the world economy and as such can exert considerable influence in the global car market through engineering and legislative standards, both in the safety and environmental fields. The Government continues to ensure that UK interests are well represented on the international stage. The cornerstone to this work is the basic research that we commission to look at improvingsafe ty and environmental standards. Our consistent and active participation in international standards-settingwork also means that the UK chairs some of the key international standards committees at the United Nations in Geneva (where much of the technical development of EU directives takes place). 36. UK Government research formed the basis for the New Car Assessment Programme that has since developed into the internationally recognised EuroNCAP programme that involves the FIA and other governments. This provides information to consumers on the safety of new cars and helps inform their purchasingdecisions. The Government is leadingthe development of this a pproach into new areas of vehicle safety. 37. The UK is acknowledged as a world leader in vehicle design and boasts a number of world class institutions. British-trained engineers are employed in almost all design and development centres around the world. Government works across Whitehall to further promote skills, commercial best practice and knowledge transfer from the science-base in the sector. DTI is currently takingforward recommendations from the Automotive Innovation and Growth Team to enhance further the capability and performance of the sector in these areas—includingthe establishment of the Automotive A cademy to promote best practice in training and development. Taken together with our progressive policies, for example, for the introduction of clean and eYcient vehicles, leadingto sustainable mobility, this provides a platfor m to promote partnerships and linkages between UK business and research institutions and the global automotive industry.

Q10 Will technology be brought in through commercial vehicles first? 38. Large trucks are expensive pieces of equipment that need to be used intensively throughout their workinglife in order to provide a decent return on investment. This often l eads to advanced technology emerging first on these vehicles. Past examples include anti-lock brakes, fixed speed limiters and electronic engine management. Currently the larger trucks are being fitted with electronic braking/stability control systems and GPS/mobile data communication systems that deliver sophisticated logistics control for the vehicle operator.

Q11 If drivers paid for road use through a national satellite location system, what else would the technology be used for and what are the implications? 39. The Government has embarked upon a feasibility study of road pricingbu t has no developed model for a system based on a national satellite location system. However some of the facilities and services currently beingdeveloped that could utilise a satellite location system are: (a) Point-to-point real-time route guidance. (b) Intelligent Speed Adaptation. (c) “May Day” emergency calling with location reference if an accident occurred or if the airbagwas triggered. (d) Location-specific information about: (i) traYc conditions and traYc accidents; (ii) parkingfacilities; (iii) bus lane status; (iv) approaching bridge heights; (v) approachingschools (in term time); (vi) planned road maintenance; (vii) tourism, fuel, food, shoppingetc; (e) New types of vehicle insurance (egpay be distance, by regionor road typ e); (f) Vehicles operatinganonymously as probes, transmittingdata to the ro adside on speed, flow density, origin/destination information, and local weather conditions; (g) Remote, real-time roadworthiness information (emissions, braking eYciency, etc). 9098191023 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Some of these developments require additional facilities such as incomingand outgoing communications systems. 40. There are two major implications arisingfrom this. Firstly, it is vita lly important that the core system is accessible to add-on systems in a cost eYcient and ergonomic way. Secondly, such systems have the potential to provide detailed information about a vehicle’s use and consequently a driver’s activity. These may raise civil liberties issues that society and Parliament will need to consider.

Q12 To what extent will car-share clubs and leasing replace buying a car? 41. In response to a Government request “to advise on how to promote car sharingand car clubs in rural areas” the Motorists’ Forum reported last year that, whilst car clubs are likely to continue to grow in number and size, they are unlikely to be a major mode of transport in the near future and conventional car ownership will remain the dominant mode of travel. This is further complicated as it is now possible to rent cars by the hour. As a result individuals may find rentingo Vers flexible car use without the commitment and relatively complex agreements associated with car club membership. The eVect of the innovative rental schemes on the wider market is impossible to predict at this stage. The Automotive Innovation and Growth Team raised the issue of car clubs, and recommended the Government set up a pilot urban mobility project to study this in more depth. DTI is workingwith the London City Car Club to assess how such a project may be taken forward.

Q13 Can technology prevent uninsured driving? 42. We are not aware of any near-market technology that could prevent uninsured driving. Current initiatives to improve the DVLA’s vehicle register and the Motor Insurance Bureau register are intended indirectly to tackle such oVences as uninsured drivingby providing,in conjunction with police Autom atic Number Plate Recognition, a reliable means of detecting vehicles which are unregistered, untaxed or uninsured. Department for Transport October 2003

Annex

LIST OF PROJECTS SELECTED FOR FUNDING UNDER THE ULTRA LOW CARBON CAR CHALLENGE Ultra Low Carbon Car Challenge—Projects selected for New Vehicle Technology Fund Support Subject to finalisation of Fund contracts

Lead partner Other project partners Main technology developments involved MG Rover Group Ltd, MIRA, Nuneaton; Hybrid powertrain, reduced LongbridgePowertrain Ltd, Birmingham; body and chassis weight, advanced aerodynamics and Pi Technology, Cambrudge thermal systems. Ricardo UK Ltd, Peugeot Citroen Downsized parallel hybrid Shoreham, Automobiles, Coventry; powertrain; automatic-manual SussexQuinetQ, Malvern transmission; advanced NiMH batteries supplemented by a supercapacitor.

Zytec Automotive Electronics Ltd, Motorola Series hybrid powertrain; high Y Sutton ColdfieldDaimler Chrysler e ciency starter-alternator

Bertrandt UK Ltd, Echo Developments, Hybrid powertrain; Leamington Spa Leamington Spa Contra-rotatingflywheel energy CTG Ltd, Reading; storage Xtrac Ltd, Thatcham; SKF UK Ltd, Luton 9098191023 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Lead partner Other project partners Main technology developments involved Artemis Intelligent Power Ltd, Dana Corporation, Infinitely variable hydraulic Edinburgh Northampton; transmission system, hydraulic Multimatic Technical Centre energy storage Europe, Thetford

Memorandum by the Royal Academy of Engineering (CAR 23)

CARS OF THE FUTURE

1. Clean Vehicle Technology:

(a) What fuels will be used to drive the vehicles of the future? 1.1 A great deal of research continues both on improvements to conventional power units (common and diesel engines, HCCI—Homogenous Charge Compression Units etc) and on alternative power systems which might serve the vehicles of the future. 1.2 Presently, many competingfuels are beingtested, and there appears to be an increase in research for hydrogen, electric drive and diesel vehicles. However, gasoline operated vehicles will not disappear overnight having had a competitive advantage over other competitors. The growth of other modes will therefore be progressive rather than sudden. For example, at present other forms of drive such as the Wankel engine have not made a distinctive impact despite their economic and environmental advantages. 1.3 Clear distinctions need to be made between what is technically feasible and what is practicable. For example, the California Air Resources Board, arguably the most influential body for vehicle emissions, have a demonstrator fleet of 12 fuel cell vehicles. Each has cost the manufacturer approximately two million dollars and requires substantial maintenance as well as liquid hydrogen refuellingfacilities. As a competitor fuel, hydrogen is often heralded as the ultimate fuel for the future as its manufacture is not diYcult and it has the potential for zero emissions, however, the key problems are storage and power conversion limitations. If storage of reasonable quantities can be attained, conversion to power by fuel cells or constant combustion engines, such as gas turbines or Stirling engines, will eVectively take the motorcar out of the ecology equation. 1.4 Currently the potential for electric vehicles continues to disappoint. Despite intense research eVorts, progress in developing high capacity, high storage density batteries is slow. It is diYcult to envisage anything except low range city cars or hybrid vehicles having a significant impact on the marketplace. 1.5 Other alternatives are bio-derived fuels such as ethanol which can be made from biomass fuel or fermented from sugar. Total life-cycle emissions show ethanol to exhibit lower CO and Non-Methane Hydro Carbon (NMHC) levels. Greenhouse gas emissions would be reduced significantly if ethanol could be produced economically from biomass fuels. 1.6 LPG is superior to gasoline with respect to legislated gas emissions, air toxins, ozone forcingpotential and global warming.

(b) To what extent will they solve environmental problems? 1.7 Many observers believe that changes in fuels would have minimal impact on the environment. Most of the small but progressive changes to emissions legislation would be swamped by unregulated emissions— aircraft, fossil fuel power stations etc. An example is the unregulated use of a small internal combustion engine—a typical ride on motor mower. In a year’s average use it would emit more pollutants than a Jaguar saloon run for 12,000 miles (the current annual average UK mileage). 1.8 Today’s cars are low emission vehicles; compared with 15 years ago, hydrocarbon emissions have been reduced by about 90%. In a city environment with an average mix of old level emission cars and trucks, emissions from a modern car will contain fewer hydrocarbons than would be present in the air ingested into the engine.

(c) How successful have Government grant and tax break initiatives been to date? 1.9 Government grant and tax break initiatives to date have had a somewhat marginal impact on both the national and global market. The changes in company car tax rates linked to CO2 emissions have seen a rise in the uptake of diesel cars and LPG uptakes have been helped by incentives for conversion costs (eg the Powershift initiative). 9098191024 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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1.10 Both factors illustrate that consumers are willingto accept changet o reduce their costs of motoring. The London congestion tax for low emissions vehicles may have a similar eVect. There have, however, been unintentional consequences in that UK domestic car producers were less prepared to launch diesel cars than European producers with a more diesel-focused regime. 1.11 The existingmechanisms of workingin partnership with the European A utomobile Manufacturers Association (ACEA) in Europe have delivered improved environmental and safety performance from the vehicle and oil industries.

(d) What does the Government need to do to make it happen? 1.12 In the first place, the Government could help by supportingresearch in to means of hydrogen storage and fundingresearch with major oil companies and British motor manufactu rers. 1.13 The UK Government will have to work with other countries as, alone, its impact is much too small in a global market. If it produces an idiosyncratic UK market it will simply damage the interests of UK consumers and producers.

2. Vehicle Design and Control

(a) How much safer can cars be made for drivers and pedestrians? 2.1 Substantial improvements to safety can be made by improvements in both road infrastructure and in the design of cars. The UK’s response to the development of the car of the future is the Foresight Vehicle Initiative which brings together manufacturers, suppliers, academia and the government in the development of new technologies, many of which focus on collision safety as well as accident avoidance. 2.2 Technologies such as airbags and seat belt tensioners are already very prolific and will become increasingly intelligent. Their deployment in an accident will be optimised to a particular person in a particular situation thus maximisingtheir benefit. 2.3 Systems are beingintroduced to increase driver awareness in order to p revent accidents from taking place, such as pedestrian sensing, collision detection, adaptive brake lights, adaptive cruise control, lane departure warningsystems etc. 2.4 Crash and anti-intrusion measures are not equal, and improvements will help. However, nothingcan oVset bad driving, including impatience and speed. Therefore, increased penalties are desirable. 2.5 Ultimately safety for the driver and passengers involves taking the driver out of the equation with the introduction of fully autonomous vehicle control. 2.6 Though cars have become safer for drivers, pedestrians to date have not been the focus of vehicle designers. However their safety could be significantly improved by providingbonnet air bags,improving visibility for drivers by fitting anti-glare glass and designing cars so that the danger from visually obstructive windscreen pillars is limited.

(b) Is the human driver better than the computer—where do we draw the line? 2.7 At present the human is better. Over time this may change as machine intelligence improves. There is currently a gradual entry of driver support services such as collision warningand collision avoidance. Improved driver and car interfaces, for example, GPS navigation system and displays already allow the driver to focus more exclusively on drivingawareness. Usingcomputers fo r navigation aids, skid control, speed warnings and control in ordinary and hazardous conditions could help enormously in maintaining safe distances and brakingin unison (as with a train of coupled carriages) . 2.8 Currently, computer recognition of road furniture is poor. If this could be resolved then computers could be better as their attention to the task is constant. Distraction such as passengers or telephone calls would then have no eVect.

(c) Can e-safety initiatives prevent accidents or lessen their impacts? 2.9 Real time information delivered to drivers, through the development of sensingtechnologies,could provide warnings of bad weather, poor road conditions, and accidents ensuringthat the driver is best equipped to deal with developingsituations ahead. 9098191024 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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(d) Is there a trend to bigger and heavier cars?

2.10 Bigger and heavier cars arise as a result of either market needs or legislation. Examples would include energy absorbing bumpers, side impact protection and airbags, as well as demographic changes, perhaps oVsettingthe e Vects of more eYcient and environmentally friendly power units. 2.11 Furthermore, the global car market is far from homogenous because of local market requirements and the relative cost of fuel. For example, the state of Texas produces more emissions with large vehicles and cheap gasoline than the whole of France with its tightly regulated and largely small diesel car populations.

(e) What influence does the UK Government have in the global car market?

2.12 The UK government has very little influence in the global car market. However, the UK Government can aVect European thinking, and through that, the global car market. Car manufacturers have the ability to bring about change through design, fuel choice and marketingwhereas Governments do not, other than via investments in road systems. However, manufacturers need influences to create change, otherwise they will see no need for it. They can take the longer view of the technologies, customer perceptions and trends available. Government should set the longer-term conditions which the vehicle manufacturers can follow to their, and everyone’s benefit. What Government cannot do is attempt to drive the agenda itself. This will inevitably result in short-term, circumventable, inadequate and incoherent change, leading to a spiral of wasted eVort without real progress for anyone.

(f) Will technology be brought in through commercial vehicles first?

2.13 Intervention systems are more diYcult to implement in trucks, but features like collision warning have been introduced first on commercial vehicles. This is also true of navigation aids and driver convenience features. 2.14 However, commercial vehicles are in general assemblies of other companies” parts and are the product of payload considerations and for the foreseeable future commercial vehicles will be diesels.

3. Vehicle Use

(a) If drivers paid for road use through a national satellite location system, what else could the technology be used for and what are the implications?

3.1 The technology could be used for tracking speed and locating vehicles. It could also be used to identify traYcoVences, replacingthe tachographfor commercial vehicles (as in Germany); for the authorities to track specific vehicles for security reasons; and to signal vehicles in case of accidents or poor weather conditions. 3.2 However, this leads on to whether such use would be seen as an extension of the power of the State and an infringement of civil and personal liberty. 3.3 Route planning, congestion awareness and avoidance, fuel eYciency gains where possible and mixed transportation opportunities, as appropriate, could have a valuable impact on journey costs and improve the eVective road capacity.

(b) To what extent will car-share clubs and leasing replace buying a car?

3.4 It is not clear how successful car share clubs will be in the UK. However, they do make a lot of sense and should grow in popularity here. 3.5 Car poolingcould have a major impact on city centre and travel to work jo urneys. However, there would need to be an incentive such as bus lanes becominghighoccupancy vehi cle (HOV) lanes, as they have in the USA. Doublingthe number of occupants in a car with constant journey d emands halves the number of vehicles on the road, but will not halve the number of vehicles owned. 3.6 Car-share organisations are likely to be limited to specific and limited geographical locations such as inner cities and possibly holiday islands. 3.7 Leasingis just another form of financinga car, havingfor a longtime bee n favoured in the USA. Take up of leasingis purely an issue of finance. 9098191024 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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(c) Can technology prevent uninsured driving? 3.8 Where technology is used it could prevent uninsured driving by couplinga signalinto the vehicle immobiliser that requires a swipe card or coded input from the driver. This could be envisaged with a combination of trackingtechnology(to identify a vehicle) and some perso nal ID card (to confirm an individual’s clearance to operate a vehicle—both with a licence and insurance certificate). Alternatively, computer monitoringthroughdrivinglicence identification could play a r ole preventinguninsured technology. 3.9 Technology could prevent uninsured driving but it is unlikely to be costeVective. A redesign of the number plate to require display of an MoT certificate and insurance validation in the form of brightly coloured tamper proof stickers, as in the case of Florida licence renewals, would probably be simpler and more eVective. October 2003

Memorandum by the RAC Foundation for Motoring (CAR 24)

CARS OF THE FUTURE

Introduction The RAC Foundation for Motoringis wholly separate from and independent of RAC Motoringand other companies within RAC plc. The Foundation was set up in 1999 to lobby and campaign on matters of general interest to responsible motorists, including roads, traYc, road user safety, vehicle safety and security and motoringtaxation. The views and policies of the RAC Foundation for Motoringare our own and sho uld not be confused with those of RAC Motoringwith which they may, or may not concur. Much of the thinkingwhich underpins our response is derived from “Motorin gtowards 2050”, a report prepared by a group of independent transport and motoring professionals for the RAC Foundation for Motoring, on the longer term future for transport and motoring.

Clean Vehicle Technology 1. What fuels will be used to drive vehicles of the future? 1.1 It is likely that for the foreseeable future a variety of fuels will power vehicles. 1.2 The current generation of fossil fuels, petrol and diesel will continue to power vehicles, albeit refined to the point where they become virtually sulphur free and almost certainly be supplemented with bio-fuels, refined from crops grown and harvested for the specific purpose, making them much cleaner and less environmentally destructive. 1.3 Road gases such as LPG and compressed natural gas [CNG] which are currently available albeit with a relatively small, but growing, share of the market, will continue to power vehicles. LPG does have the advantage of producing less exhaust pollutants, but is less fuel eYcient than petrol and significantly less eYcient than diesel. The growth of road gases as a power source is currently hampered by a lack of certainty about the tax advantages they enjoy compared to liquid fossil fuels and to a lesser extent by doubts about their residual [resale] values. 1.4 However a number of manufacturers are now producingdual fuel vehicles capable of usingboth petrol and LPG and these do seem to combine the advantages of both liquid and gaseous fuels. 1.5 Electric vehicles, powered by batteries have been developed egthe Thi nk Electric City car and are presently undergoing long term evaluation by a variety of business users, includingthe RAC Foundation for Motoringfor an 18 month period from September 2001. As well as producin gno harmful emissions in use, they are inexpensive to run and their performance is at least adequate for urban and even local rural use. However a combination of a relatively short range and fairly long re-charge times, may adversely aVect their viability and limit their attraction to prospective purchasers. 1.6 However electric propulsion technology has been adapted by Honda and Toyota to produce hybrid petrol/electric vehicle utilisinginternal combustion enginesand elec tric motors, powered by kinetic energy produced duringnormal drivingto deliver many of the benefits of both syste ms. 1.7 It is likely that liquid and gaseous fossil fuels, bio-fuels, and electric energy will be used to power vehicles alone, or in combination for many years to come, bearingin mind th at modern vehicles enjoy a significantly longer useful life than their counterparts of even a decade ago and many millions of cars currently on the road can, with regular maintenance, reasonably be expected to be in regular use in 2010 and beyond. 1.8 Motor manufacturers’ interest seems to be focussed on hydrogen as a long-term power source either poweringfuel cell electric motors or even an adapted internal combustion engine. A great deal of research and development has already taken place. A number of manufacturers, includingFord, have hydrogenfuel 9098191025 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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cell powered vehicles undergoing extensive trials and BMW advertising suggests that they may be about to launch hydrogen powered versions of their current model range in the not too distant future. However the future viability of both hydrogen and electric powered vehicles is likely to be determined by the development of manufacturingprocesses which are as environmentally sustainable as t he end use in cars.

2. To what extent will they solve environmental problems? 2.1 A combination of developments in both fossil fuel and engine technology, alternative fuels, hybrid vehicles and—in due course—hydrogen power, will significantly reduce and could ultimately eliminate exhaust pollution, includingCO 2, as well as significantly reducing engine noise. 2.2 Although cleaner vehicles will produce less exhaust pollutants, they will not make fewer demands on road space, or cause less congestion, which many regard as an environmental problem in its own right. In fact a combination of greater vehicle reliability and longevity, coupled with reduced prices of both new and used vehicles will bringused cars within the reach of people who are curren tly unable to aVord a car and is likely to increase demand on road space and thus levels of congestion. 2.3 Furthermore, the potential benefits of reduced noise levels from modern engines will not necessarily be fully exploited. It must be remembered that much of the noise associated with cars and light vans does not come from the power train, but from contact between the tyres and the relatively inexpensive, hard wearing, road surfaces commonly provided in urban areas by local highway authorities. The solution to this type of noise pollution does not rest with vehicle manufacturers but largely with those responsible for fundingand maintainingthe UK road network.

3. How successful have Government grants and tax-initiatives been to date? 3.1 Government grants and fiscal incentives have previously proved themselves eVective in influencing public and corporate choice and thereby manufacturingdecisions. Recent examples include: (i) The rapid phasingin of low sulphur petrol and diesel in response to slig htly lower levels of fuel duty thereon.

(ii) The rapid introduction of cars with engines producing lower levels of CO2 per Km, primarily in response to changes in company car taxation now linked to levels of CO2. (iii) The willingness of fleet operators to at least consider and manufacturers to oVer road gas powered vehicles, or conversions, in response to “Powershift” conversion grants, plus extremely attractive tax diVerentials in favour of road gases. NB There is genuine concern that any significant reduction in either the “Powershift” grant, or the substantially lower rates of duty on road gases could limit the growth potential of this small, but rapidly growing, section of the car parc.

4. What does the Government need to do to make it happen? 4.1 Perhaps the most eVective and helpful approach would be for Government to develop a considered and consistent view of the fuels or systems showingthe clearest potential to deliver “clean vehicles”, based on thorough research of the various options, their advantages and obstacles to their development. The preferred option, or options should then be supported, as and if necessary, by a combination of grants or tax-breaks to encourage their development, so far as possible by UK companies or within the UK. For example, if Government takes the view that hydrogen presents the greatest potential to deliver a “clean vehicle” parc, it may wish to facilitate the development of manufacturing, distribution and storage network. 4.2 Present Government policy on the environmental impact of diVerent fuelscan appear confused and confusing. Whilst Government policy is to encourage a switch to more fuel eYcient, low CO2 producing engines, tax levels on diesel engines, which are significantly more fuel eYcient and produce much lower levels of CO2 are arbitrarily increased presumably to make them a less attractive prospect. UK policy in this respect seems to conflict with that of our EU neighbours.

Vehicle Design and Control

5. How much safer can cars be made for drivers and pedestrians? 5.1 There has been a dramatic improvement in vehicle safety in the past decade. Modern cars, vans and increasingly large goods vehicles incorporate aReassuring array of active safety systems, designed to assist the driver to retain control of the vehicle at all times and passive systems designed to provide protection to the occupants in a collision. active and passive safety systems have been developed and incorporated into car design for the past 50 years. 9098191025 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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5.2 The improvement is perhaps best demonstrated by the European New Car Assessment Programme tests. The first of which were conducted in February 1997 when, of the seven cars tested, only one scored three stars and one managed only one star for occupant protection. The most recent test results announced in June 2003 resulted in seven, five star scores; eight four stars and only one two star for occupant protection. 5.3 Active [driver aid] safety systems, currently widely available, include anti-lock brakingsystems [ABS] which allow the car to be steered away from a hazard under emergency braking, electronic [or dynamic] stability control [ESC/DSC], which operate to reduce the potential to skid on slippery surfaces, or on bends by detectinga loss of traction at each wheel and reducingpower to that whee l or transferringpower to other wheels with suYcient grip. Cruise control is widely available, which limits and holds the vehicle to a maximum speed pre-set by the driver without further input from the driver, other than brakingfor hazards of as determined by the speed of surroundingvehicles. 5.4 Passive safety systems include provision of a passenger safety cell protected by progressive deformation of the surroundingbodywork in the event of a collision, suppl emented by pre-tensioned seat belts, anti-submarine seats and a variety of front and side air bags. 5.5 However the potential exists for further improvements in both “active” and “passive” safety systems. 5.5.1 The present range of driver aid “active” safety systems will be augmented by “brake assist”, a system activated by sensors which detect emergency breaking and which automatically applies optimum braking eVort, in eVect over-ridingdriver input. 5.5.2 “Lane following” systems are being developed which will detect lane markings and ensure that vehicles follow the marked lane and do not drift oV line. 5.5.3 Autonomous Intelligent Cruise Control has been developed incorporatingthe widely available cruise control, but is capable of maintain an even distance from the vehicle in front and adjustingthe car’s speed accordingly without any driver input. 5.5.4 At least one global motor manufacturer has developed an infra-red night Vision system which allows the driver a much greater and clearer field of view than even the present “bi-xenon gas discharge lamps” provide, but without the associated problem of dazzlingoncomingd rivers. 5.6 Developments in “passive” safety systems include: 5.6.1 Multi-stage “intelligent” air bags which detect the presence, size and proximity of Vehicle occupants and deploy the airbagin such a manner as to maximise the protective potenti al whilst minimisingthe potential to cause injury. 5.6.2 Four and even five point safety harnesses, drawingon the motor racing harness to provide significantly increase levels of restraint and crash protection to those provided by the current three point seat belt. 5.6.3 Intelligent Speed Adaptation [ISA], a GPS satellite based system which monitors the progress of vehicles against a data-base of posted, temporary and even advisory speed limits and usingthe vehicle’s engine management system, automatically limits the maximum speed of the vehicle to the speed limit. 5.7 However the range of passive systems designed to maximise crash protection for the vehicle’s occupants provides a stark contrast to the absence of similar protection for pedestrians and cyclists who collide with, or are hit by the vehicle and the clear lack of priority given by manufacturers, with a small number of honourable exceptions, to improvingpedestrian crash protecti on. 5.8 In fact the Euro NCAP results show that since the first test in 1997 a number of new models appear to have provided less pedestrian protection than the cars they replaced. Furthermore of the 13 cars to score the maximum five EuroNCAP points for pedestrian protection, only six score more than one point for pedestrian protection and whilst seven cars have scored three points for pedestrian protection, no car has yet achieved the maximum four points. 5.9 It is no surprise that the clear lack of priority given to pedestrian protection by motor manufacturers is frequently mentioned, not least by Mr Max Moseley, the FIA President and Chairman of EuroNCAP in his foreword to the published results. Whilst an EC pedestrian safety directive is probably the logical option to remedy this problem, the RAC Foundation feels and has suggested to EuroNCAP, that a simpler and quicker means to encourage manufacturers would be to include the pedestrian protection results in an overall grading, rather than the present system of having separate gradingfor occupant and pedestrian protection performance.

6. Human Driver v Computer 6.1 In driving, as in all other activities, computer technology provides distinct advantages in managing both simple and complex pre-determined operations with greater accuracy, reliability and speed than the human brain. However humans, for all our imperfections, are better suited to decision makinginvolvingthe exercise of discretion about a number of options. 9098191025 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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6.2 In the context of driving, computer technologies are ideally suited to “passive” safety systems includingISA, as well as “active” safety systems such as ABS, ESC, Brake As sist and crash sensors, providingperformance beyond human capacity. However it is most unlikely and probably undesirable that computer technology should progress beyond the point of providing passive protection, or providingactive assistance to the driver.

7. Bigger and Heavier Cars 7.1 Car design, irrespective of type, involves a conflict between pressures to minimise weight and thus maximise performance and fuel eYciency and pressures to include safety systems as well as occupant comforts, which necessarily increase weight. 7.2 Whilst all manufacturers are introducingnew and smaller cars, this is often because existingmodels have grown in size. The small cars made by Ford [Fiesta], Renault [5], Vauxhall [Corsa] and VW [Polo] duringthe 1980’s have all increased in size or capacity to the extent that m anufacturers have introduced a new small model.

Vehicle Use

8. Satellite location technology; uses and implications 8.1 Global PositioningSystem [GPS] satellite location technologyis inc reasingly used in a variety of commercial applications. These include: (i) Anti-theft applications, trackingetc thus assistingthe rapid recov ery of vehicles which have been stolen. (ii) Route planningand guidancesystems. (iii) Warning[legally]of the presence of fixed site speed cameras. (iv) Enablingmotor insurers to provide insurance contracts specifically tailored to individual circumstances relatingto the type and amount of vehicle use. [v] Intelligent Speed Adaptation [ISA] which is currently undergoing longterm trials [See paragraph 5.6.3]. 8.2 If a GPS based road pricingsystem were to be introduced, all of the foreg oingcould be included within the package. Anti-theft applications and ISA are in the public interest and might be included as a matter of course, or at least as no cost options, whereas a charge might reasonably be made to include the other options. NB Smartnav, a company which provides GPS based route planning, guidance and congestion warning service, allows optional upgrades to include “tracking” and warning of speed cameras and excess speed. 8.3 GPS based systems could also be used to monitor average speeds and to track specific vehicles at the request of police or the security services. However these applications would undoubtedly raise questions of intrusion into personal freedoms protected by the Human Rights Act and might adversely aVect the social and political acceptability of a national GPS based system.

9. Car Leasing and Car-share Clubs 9.1 Car leasingand car share clubs both have considerable potential advan tages over car purchase. Car leasing, with a variety of leasing plans, is widely used by fleet operators, companies and individuals as an alternative to car purchase. Car clubs are beingset up in various parts of t he country, usually in cities or urban areas, although it is probably too soon to comment on their long term viability.

10. Can technology prevent uninsured driving? 10.1 Technology can and will provide an increasing deterrent to uninsured driving. The police now have access to the computerised insurance database and can rapidly check the insurance status of either the vehicle or the driver. 10.2 However changes in Government or the insurance industry policy could do at least as much, or more, to reduce the opportunity for uninsured driving: (i) Current regulations and industry practice focus on the driver being insured, rather than the vehicle. A change linking third party insurance to the vehicle and allowing drivers to purchase more comprehensive cover, includingfire and theft, would reduce the incidence of uninsured drivingby family members etc. (ii) The Government could institute a national third party motor insurance scheme, funded by a levy on the price of fuel. Such a policy change would prevent uninsured driving, since third party 9098191025 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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insurance would be provided by the state—funded by a fuel levy—as opposed to individual provision. As with the previous option, it would be open to individuals to provide their own cover for fire, theft, or more comprehensive cover. The RAC Foundation is disappointed that the terms of reference of Professor Greenaway’s review of the UK motor insurance system, announced in August, expressly exclude this option from consideration. October 2003

Memorandum by the Slower Speeds Initiative (CAR 25)

CARS OF THE FUTURE, OR TODAY?

Introduction The Slower Speeds Initiative was founded in March 1998 by the Children’s Play Council, CTC, the Environmental Transport Association, the Pedestrians Association, the Pedestrian Policy Group, the Road Danger Reduction Forum, RoadPeace, Sustrans and Transport 2000. We believe that lower speeds are essential to encourage sustainable transport modes and to reduce the impacts of our transport system. Appropriate speed management would reduce congestion and excessively dispersed development, fuel consumption, pollution, noise and community severance as well as the overall number and severity of road casualties. Our emphasis in this submission is on design and use rather than fuels. Cars of present design impose unnecessary costs and pose unnecessary obstacles to demand management. Rather than adaptingthe car to the environments in which people live and on which they depend, for too long transport policy has adapted those environments to the car, through highway safety engineering, road buildingand low density development to accommodate traYc growth. The consequences have been far-reaching: exclusion of sustainable transport modes from the public highway, loss of local economic viability, serious impacts on child development with critical longterm physiologicaland social e Vects. And, of course, yet more traYc growth, as it becomes increasingly necessary, but also safe and comfortable, to travel further faster by car. In the bigpicture are road crashes as a leadingcause of mortality world-wi de, inappropriate development models and technologies, and climate change. Vehicle speed and acceleration, with their immediate eVects of danger, conspicuous consumption and gratuitous waste, are the design and marketing features that have driven these developments, underpinned by cheap fuel and the absence of mechanisms to internalise costs. Danger is the aspect of vehicle design about which current transport policy has the least to say. It is wholly ignored in taxation and energy policy. This failure leads to unnecessary deaths and injuries, ineVectual policy to encourage healthy travel and an unbridgeable gap between the primary aim of road traYc laws and the ability to enforce them. None of these problems will be corrected by a change in energy source. The urgent discussions about the future cars and fuels appear to overlook them completely. However, a speed policy based on appropriate and eVectively enforced speed limits would make road transport “cleaner, greener and safer” even with today’s fuels and technology. We believe the correct sequences of steps to designing future cars are first to manage demand, then increase energy eYciency, and finally substitute energy sources. Speed management is an important aspect of the first two and will have implications for future fuel options when car performance is better adapted to the wider goals of a sustainable transport system and a sustainable society. We urge the Committee to consider not only what could be done in the future, but what could easily be done today if an appropriate framework were set by government.

Cars of Today “. . . cars will continue to be more environmentally damaging than need be the case so longas they are predominantly designed for long-distance travel at speeds above the legal speed limit in the UK and used to a large extent for relatively short journeys in urban areas for which their fuel eYciency is low . . .” (Royal Commission on Environmental Pollution, 1995, para 8.89)

Speed management can reduce crashes, congestion, CO2 emissions and traYc growth. Crash frequency is related to vehicle speed, the spread of speeds and the percentage of drivers exceedingthe speed limit (Taylor et al 2000). Crash severity is also related to speed. Speed reduction is therefore an obvious way to mitigate the annual £17 billion cost (Department for Transport 2001) to society of road crashes. Lower speeds would reduce congestion by cutting the variability of speeds in any traYc stream, reducing the frequent obstructions caused by crashes, discouraging longer journeys and encouraging travel by sustainable modes (Plowden and Hillman 1996). Lower and variable speed limits ensure best use is made of existing highway capacity (Highways Agency 2002).

CO2 emissions are proportional to fuel consumption. The optimum cruisingspe ed for petrol cars from the point of view of CO2 emissions is between 40 and 50 mph (NETCEN 2003). The top national speed limit encourages excessive emissions and wasteful use of fossil fuels. It is also ignored by nearly half of all drivers, 9098191026 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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with almost a fifth drivingover 80 mph (Department for Transport 2003c). Th e 1994 Royal Commission report on Transport and the Environment estimated that CO2 emissions could be reduced by 3% by enforcingthe 70 mph limit on motorways and a further 3% by introducinga top speed limit of 55 mph for non built up roads. They were told by the SMMT that if all drivers adopted economical drivingstyles CO 2 emissions could be reduced by 10–15%. Road danger contributes to further CO2 emissions by discouraging walkingand cycling(Hutton and Klahr 2001) and by encouragingthe use of th e car for increasingly short journeys. Cold start journeys also generate disproportionate amounts of CO2. There is widespread concern that traYc growth will outstrip gains in fuel eYciency and that additional restraint through pricing signals is required (Royal Commission on Environmental Pollution 2000; Foley and Fergusson 2003). The National Travel Survey is clear about the trends which underpin this growth in traYc: the average distance travelled per person per year has increased steadily while the amount of time spent travellinghas changedvery little. Increased car use means that peo ple can now travel further faster (Department for Transport 2002a). The traYc generating eVect of high speed travel erodes not only fuel eYciency gains but also the projected benefits of road building (SACTRA 1994). The other worryingtrend revealed by the National Travel Survey is the incr easinguse of the car for short journeys. Cars are used for 60% of trips between one and two miles and for 80% of trips between two and five miles. Overall, however, the number of short trips, especially those under one mile, is falling. The growth in traYc due to increased journey lengths and the increasing use of the car for short journeys are key trends which must be addressed. A default urban limit of 20mph would dramatically reduce the risk of walking and cycling. Speed management can be used to restrain traYc—time penalties over longer journeys are after all a form of pricing. Speed management can also be used to reduce the impacts of the traYc that remains after demand management. It must be taken into account in the development of road user charging and vehicle technology.

Limiting Maximum Speed Directive 92/6/EEC mandated limiters of maximum speeds on all heavy commercial vehicles. Directive 2002/85/EC extends these to medium-sized commercial vehicles from 2005. After implementation of 92/6/ EC, the EU’s evaluation found that the benefits of these limiters included fewer and less severe crashes, improved fuel economy and lower CO2 emissions (European Commission 2001; see also Dings et al 1998). The UK was the last EU member state holdingout againstdirective 2002/85/E C, a position both deplorable and irrational. At the beginning of 2003, there were 246 diVerent models of car on sale in the UK capable of 140 mph. 200 were imports. There is no argument—moral, economic or legal—for allowing the sale of vehicles which can exceed the top speed limit by such a large margin and there is little hope of reducing the impacts of the car while they can, as the Royal Commission noted. Top speed limiters are already available in a very small number of passenger cars. The MCC “Smart” city car is electronically limited to 85 mph. Many high performance cars are limited to 155 mph (250 km/ h). Requiringtop speed limiters to be fitted on all cars and motorcycles wou ld benefit the economy, society and the environment. It would discourage the sale of excessively powerful, heavy and pollutingcars. It would reduce the pressure to speed. It would make speed limit compliance at speeds lower than 70 mph easier and help to reduce diVerentials in risk for all road users. It would improve fuel eYciency and reduce CO2 emissions. It would help to discourage traYc growth by increasing the marginal costs of longer journeys. It would help provide a level playingfield for business and discouragelaw-br eakingin the pursuit of profit. It would reduce casualties. The Transport Research Laboratory has calculated that a mere two mph reduction in average speeds across the entire road network would save around 280 lives a year and prevent about 10% of the annual toll of casualties (Barker 2002). Limitingthe speeds of the f astest drivers is an important way to achieve this reduction.

Variable Speed Adaptation at Lower Speeds The technology is available now to limit the maximum speed of vehicles accordingto the prevailinglimit. If 60% of the UK fleet were fitted with the most “powerful and versatile form” of Intelligent Speed Adaptation (ISA), all injury crashes would be reduced by 36%, fatal and serious crashes by 48% and fatal crashes by 59%. Takinginto account casualties, fuel consumption and jour ney time only, the benefit to cost ratio of introducingthis form of ISA is calculated to be between 13 and 17 de pendingon assumptions of economic growth (Carsten and Fowkes 2000). Reduced costs of congestion and its wider benefits do not appear to have been included in the analysis. A very protracted timescale for achievingthe enormous benefits of ISA is cu rrently assumed. The 60% fleet penetration is not considered possible before 2019, with no requirement for new vehicles to be fitted with ISA cominginto e Vect until 2013. This technological and institutional timetable translates as 30,000 deaths and around 300,000 serious injuries in the UK. Procrastination on this issue will incur great suVering and huge costs. 9098191026 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Intelligent speed adaptation will bring about the single biggest reduction in accident and congestion costs in the history of UK road transport. Despite intense media controversy over speed limit enforcement and the relative novelty of the concept of speed limiters, levels of driver support are already surprisingly high (MORI 2002). Non-drivers, the very old and the very young—who so far haven’t been asked—are likely to have even more positive attitudes. Large scale trials of ISA in Sweden have confirmed its contribution to reducingtra Yc impacts as well as casualties. Alongwith improved speed limit compliance, ISA increased driver attention and improved behaviour towards pedestrians. Fuel consumption and emissions decreased significantly while travel times were unaVected (Varhelyi et al 2002). The majority of drivers who experience ISA approve of it and many in the Swedish experiment asked to keep the devices in their cars after the trials. As with top speed limiters, forms of variable speed limiter are already beingused on vehicles in the UK because they save fuel, reduce wear and tear and contribute to safer driving. One limits top speed and allows up to four pre-set intermediate speeds. Its design anticipates future downloadingof new limits from GPS or beacon signal sources (Fleet News 2003a).

Steps to Introducing Fully Speed Limited Vehicles The UK ISA research does not discuss the impact of a changing road environment on vehicle technology and speed limit compliance capability. It assumes that developinga digit al map would take three years and that the process would not even begin until 2010. However, the complex logistics of just-in-time delivery, increasingcongestionand the increase in speed cameras have interacted w ith the growth in mobile communications technology to considerably change the picture. The technologies and practices commonly seen as characterising “cars of the future” are already present in small but increasingnumbers of vehicles on our roads today. The amount o f data beinghandled by UK fleets is said to have multiplied 30 times over the last decade and will repeat this increase over the next (Fleet News 2003b). It is not the technology that is lacking but rather the policies and pricingincentives to build on the existingpotential of in-vehicle monitoringand telematics system s. The widespread use of these technologies in the national fleet would enable voluntary take-up of intelligent speed adaptation in advance of legislation. In the interim period, they provide ways to increase driver accountability and compliance with road traYc laws, reduce vehicle crime, and enhance the economic and environmental eYciency of the national fleet. “Black Boxes”. Many cars are already fitted with an array of electronic devices to improve crash survivability for occupants, assist maintenance, allow trackingin the c ase of theft and even call emergency services. One quarter of passenger car manufacturers world-wide used some form of black box technology in 2002 (Murray 2002). Data on location and speed can already be routinely stored by devices costinga few pounds. Black box information could be used for crash investigation and to monitor speed limit compliance of vehicles driven in the course of work. This type of monitoringhas been as sociated with a 30% reduction in crashes. (PACTS 1999) One way to introduce this has been demonstrated by the AXA insurance company in Ireland. Drivers aged 18–24, the most at risk of crash involvement, pay around £500 to fit a black box system with the main elements of intelligent speed adaptation. An alarm warns them when they exceed a speed limit. The device records location and speed, for later analysis by the insurer. Drivers who stick to the speed limit get lower premiums. In addition to payingfor itself, the system is reducingcrashes and claims (Byrne 2003). Telematics. Digital maps of the UK trunk road network are already available to assist navigation and, usinglinks to globalpositioningsystems (GPS), to warn drivers of the pre sence of speed cameras (TraYcmaster 2003). This is in eVect a voluntary ISA system. Drivers are alerted on approach to fixed and mobile safety cameras (thanks to the Government guidance which requires Safety Camera Partnerships to publish their locations) and told the prevailingspeed limit. The device s tores information on “90,000 points and places of interest” includingpetrol stations and cash points. Tra Ycmaster also oVers navigation coverage for the complete trunk road network. This system demonstrates how just close a functional ISA system is. Instead of aidingand abettingspeedingand the avoidance of det ection, such systems, which claim to promote safety, should be used to ensure driver awareness of and compliance with all speed limits. It is routine for data about the location and speed of vehicles to be transmitted to a remote location. Commercial vehicle fleets can be tracked by satellite or via the mobile phone network to enhance vehicle productivity and eYciency. Telematics are used to save on fuel and insurance, reduce crashes and vehicle downtime and provide a more reliable service for customers. One company has recently installed a “driver coaching” system in its 500 vehicle fleet which monitors behaviour that aVects fuel consumption, warns drivers of excessive speed and reminds them when to take a break (Fleet News 2003c). Driver validation. Cars have a very low level of security. Vehicles do not perform a check of a driver’s insurance or licence prior to beingdriven. By contrast, another ubiquito us but very much less dangerous piece of equipment, the mobile phone, requires a “SIM” card in order to function. The phone checks that a user has a paid-up account with a phone service provider before a call can be placed. 9098191027 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Smart card systems are already beingused to prevent vehicle thefts. In add ition to identifyingthe driver, such systems could check that a driver has a valid licence, and insurance. Smart card ignition systems could increase driver accountability and help to prevent speedingand dangerou s drivingby disqualified drivers and car thieves. Fleets and company cars. It is clear that private companies are already leadingthe way in usingnew technology to reduce their own costs and the wider impacts of their operations. There are powerful arguments for targeting fleets—in the private and especially in the public sector—and company cars to prepare for the wider introduction of speed control technology. Nearly half of new motor vehicle registrations each year are company cars. Overall company cars account for 7% of the national fleet but 17% of all mileage (Department for Transport 2003b). After allowingfor mileage diVerences, company car drivers still have about 50% more crashes than ordinary drivers (Lynn & Lockwood 1999) and they are more likely to speed, as are people drivingin th e course of work (Stradling 2002). Between a quarter and a third of all serious and fatal road traYc incidents involve someone driving in the course of work (Work-related Road Safety Task Group 2001). Together, these facts argue that special attention to the design and use of company cars would bring disproportionate benefits. It would reduce business costs and the externalities of economically important traYc, increase corporate accountability and encourage the rapid diVusion of appropriate vehicle design through the national fleet via the second hand market, making eventual compliance with mandatory requirements easier and more eYcient. All of the technologies we have described above could be readily introduced into the commercial car fleet where they are not already present. Car-share clubs would also play a role in makingthese newer, safer vehicle s available to drivers who cannot aVord to own such vehicles outright.

The Framework for Change

The Prime Minister says in his introduction to the Government’s PoweringF uture Vehicles Strategy: “New technologies starting to come on stream oVer us the chance of a diVerent future vision for road transport quiet and unpolluted city centres, with new vehicles run on clean and sustainable fuels.” (Department for Transport 2002b) In many ways “PoweringFuture Vehicles” appears to be a model strategy.But it has at least three fundamental, and related, flaws: 1. It does nothingto counteract the underlyingtrends of increasingmilea ge and increasing use of the car for short journeys. It may actually exacerbate them if fuel eYciency gains encourage traYc growth. It will worsen congestion in the absence of demand management technologies. 2. It fails to take into account alternative or additional means to the same end. In terms of motor vehicle technology, we have seen that speed control increases fuel eYciency and reduces emissions. But neither is there any consideration of the interaction between motorised and non-motorised transport and the relative importance of their roles in achievingthe Prim e Minister’s vision. The question arises whether anyone involved with the strategy has yet noticed that one version of the “car of the future” is already here—it’s a bicycle. 3. The programme nowhere acknowledges the problem of road danger and the role of technology and design in reducing it. There is no consideration of the problem of speed. The Government rejected a recommendation from the Select Committee inquiry into road traYc speed that it should encourage voluntary adoption of ISA by fleet managers and underpin this with tax incentives. It considered that “it should be left to industry to take this forward in response to public demand” (Department for Transport 2002c). Underlyingthis “laissez-faire” post ure on speed limiters was rigid opposition to Directive 2002/85/EC. The contrast with Government enthusiasm for incentives, interventions and partnerships that characterises PoweringFuture Vehicles could not b e stronger. It is particularly perverse in view of the immediate and enormous social benefits of speed control technology and the current eVorts by industry to improve eYciency and reduce costs by usingspeed control. It ignoresan underlying preparedness. The future growth projected for data handling capabilities of the UK fleet “will partially come from a desire for greater control through telematics systems and partly through Government policy changes such as congestion charging and even the satellite tracking of road use that has been recently mooted” (Fleet News 2003b). The Department is spending£2 million pounds on the research into ISA. Mean while the New Vehicle Technology Fund (wholly unrelated) has a budget five times larger. Some of this may be money for old rope. In April the Government launched its “green family car challenge” under the New Vehicle Technology Fund (Department for Transport 2003a). A de-tuned version of the Toyota Prius could probably already do better than the 90gCO2/km target set for 2007–11. 9098191027 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Imagine the Powering Future Vehicles strategy redrafted in the following way (our changes are in italics): 1.1 Intelligent speed adaptation and its component technologies oVer opportunities for radically reducingthe impact of road transport on the environment both globallyin t erms of climate change, and locally in terms of quality of life. 1.2 The Governments objective for the UK is clear that this country should lead the global shift to clean, low-danger transport. The framework for decision-makingput in place by this Appropriate Vehicle Technology strategy, and the targets and decisions announced in this document, will support the UKs shift. 1.3 Speed limited vehicles will benefit the consumer and society, through safer road transport, a better quality of life and more fuel eYcient motoring. Setting out the right framework for the future will build competitive advantage for UK industry in the global shift to a low danger transport economy. The financial incentives, delivery mechanisms and agencies which make up the PoweringFuture Vehicles strategy should be extended to combat speeding, crashes and congestion.

Recommendations The Government should bringspeed limiters and their component technolog ies into the framework of the Powering Future Vehicles strategy and each of its individual programmes and change its name to the Appropriate Vehicle Technology (AVT) strategy. The strategy should commit the Government to immediately enact legislation outlawingthe sale and use in the UK of any vehicle capable of exceedingthe top national speed limit (c urrently 70 mph) by more than a few miles per hour. The Government should immediately notify our EU partners of UK support for a directive makingelectronic limiters of maximum speed compulsory on all c ars in the EU, further to Directive 2002/85/EC. The same legislation should make it a legal requirement for all vehicles driven in the course of business to be fitted with smart card ignition systems and black boxes recordingspeed, with the data made available, subject to standard protections, to employers, insurers and the police in the event of a crash. The AVT strategy should aim for the mandatory fitment of intelligent speed adaptation in all vehicles by the end of the decade. It should: — ensure that a digital map with all speed limits is available by 2005; — set a target ensuring that by 2010 all speed limits in the UK meet the criteria set out in a national speed assessment framework; — provide tax incentives and grants for individuals and capital allowances to businesses for the purchase of new cars fitted with variable speed limiters; — provide advice and assistance for retrofittingexistingvehicles with va riable speed limiters; — develop a specific programme to ensure all public sector vehicles are fitted with ISA, beginning with the Government’s own fleet; — bringthe Department for Transport’s Road Safety Division, the Departme nt of Health and the Health and Safety Executive into the AVT partnership. In addition, the Government should take complementary steps to promote the rapid development of speed control and demand management technology in the UK fleet. It should: — assist the UK insurance industry to move towards “Pay as you drive” (PAYD) insurance; — immediately oVer drivers the option of payinga low “distance based” charge,as a replacem ent for VED; — adopt recommendations made in the Twenty Second report by Royal Commission on Environmental Pollution (para 6.122) for (a) “a wide diVerential in VED between the highest and lowest bands and an increase in the number of bands or a slidingscale” and (b ) “a revenue-neutral graduated purchase tax on new cars, with subsidy for low emission vehicles financed by tax on high emission vehicles” with this tax incentive extended to cover the subsidy of vehicles fitted with ISA in advance of 2010 through higher taxes on vehicles without ISA. The UK’s overseas development aid should include a concerted eVort to spread the technologies and policies outlined above, as quickly as possible. The social, environmental and economic advantages would substantially augment those oVered by current debt-relief initiatives. Finally, poor drivingskills result in needless pollution and congestion as well as crashes. Drivers should receive better education about their impacts and appropriate vehicle use. Periodic re-testingof drivers every five years at least should be introduced to keep drivingskills and knowledg e up to date and to root out bad drivinghabits and bad drivers. 9098191027 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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References Barker, J (2002) “The impact of speed on road safety”, paper given at Aston University Conference, The Societal Aspects of Speeding, October 2002. Judith Barker is a road safety expert at the Transport Research Laboratory. Byrne, B (2003) AXA extends Traksure premium reductions scheme, accessed at irishcar.com Carsten, O and Fowkes, M (2000) External Vehicle Speed Control: Executive Summary of Project Results, Leeds: Institute of Transport Studies. Department for Transport (2001) Highways Economics Note No 1: 2001. Department for Transport (2002a) National Travel Survey: 1999–2001 Update. Department for Transport (2002b) PoweringFuture Vehicles. Department for Transport (2002c) The Government’s Response to the Transport, Local Government and the Regions Committee’s Report: Road TraYc Speed, Cm 5621. Department for Transport (2002d) Transport Statistics Great Britain 2002. Department for Transport (2003a) Government challenges car makers to design a green family car, News Release 2003/0049:29 April 2003. Department for Transport (2003b) National Travel Survey. Department for Transport (2003c) Vehicle Speeds Great Britain 2002. Department of the Environment, Transport and the Regions (2000) New Directions in Speed Management—A review of policy. Dings, JMW, Dijkstra, WJ, Metz, D (1998) Speed limiters on vans and light trucks; environmental and economic eVects, accessed at http://www.cedelft.nl/eng/publicaties/98—4127—006e.html European Commission COM (2001) 318 final, Volume I, 14 June 2001. Fleet News (2003a) Company fits its own speed limiters. Fleet News (2003b) Explosion of information for UK Fleets. Fleet News (2003c) Telematics slashes company’s fuel bill. Foley, J and Fergusson, M (2003) Putting the Brakes on Climate Change, London: ippr Highways Agency (2002) M25 Controlled Motorways. House of Commons Transport Local Government and Regions Committee (2002) Road TraYc Speed, Ninth Report of Session 2001–02 Vol II: Minutes of Evidence and Appendices. Hutton, P, and Klahr, R (2001) The CfIT Report 2001: Public Attitudes to Transport in England, London: Commission for Integrated Transport. Lynn P, and Lockwood, CR (1999) The accident liability of company car drivers, TRL Report 317, Crowthorne, Berks: Transport Research Laboratory. MORI (2002) Drivers’ Undecided Over Speed Limiters In Cars, 30 January 2002, accessed at http:// www.mori.com/polls/2001/dl-010720c.shtml Murray, CJ (2002) Engineers join push for automotive black boxes, EE Times 29 April 2002, accessed at http://www.eetimes.com/sys/news/OEG20020419S0100 on 14 October 2003. NETCEN (2003) Vehicle Emission Factor Database v02.8.xls, accessed on the National Atmospheric Emissions Inventory website. PACTS (1999) Road traYc law and enforcement: a drivingforce for casualty reduction, London: Parliamentary Advisory Council for Transport Safety. Plowden, S and Hillman, M (1996) Speed Control and Transport Policy, London: Policy Studies Institute. Royal Commission on Environmental Pollution (1994, 1995 edition) Eighteenth Report: Transport and the Environment, Oxford: Oxford University Press. Royal Commission on Environmental Pollution (2000) Twenty Second Report: Energy The Changing Climate. SACTRA (StandingAdvisory Committee on Trunk Road Assessment) (1994) Tru nk Roads and the Generation of TraYc. Stradling, S (2002) Road TraYc Speed, in House of Commons (2002). TraYcmaster website (2003) Smartnav, accessed at http://www.traYcmaster.co.uk/ Taylor, M, Lynam, D, and Baruya, A (2000) The eVects of drivers’ speed on the frequency of road accidents, TRL Report 421, Crowthorne, Berks: Transport Research Laboratory. Work-related Road Safety Task Group (2001) Preventingat-work road tra Yc incidents Discussion Document, Health and Safety Executive. 9098191027 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Va´rhelyi, A, Hyde´n, C, Hja¨lmdahl, M, Risser, R, Drasko´czy, M (2002) The eVects of large scale use of active accelerator pedal in urban areas, Paper for the 15th ICTCT workshop on Speed management strategies and implementation, Brno, Czech Republic, October 24—25 2002. October 2003

Memorandum by Colin Treleven (CAR 26)

CARS OF THE FUTURE This submission is an abridgement, with amendments, of an MSc dissertation on “sustainable car use and design in the period 2004–08”, completed in September 2003, by C Treleven.

Introduction Car design and use present great challenges to sustainability. The Government’s third annual report on UK sustainable development reflects this. The mark for “Total Road TraYc”, part of indicator H11, indicated “significant change, in the direction away from meeting the objective” (SUS2003:H11; key to Fig 3.1). This arises because cars are optimised for users, and there is little protection for those in society who suVer the “externalities” of car use. In this document, “telematics equipment” means any equipment that can: (i) Transmit information wirelessly to a car about drivingconditions, eg congestion, road closures, weather conditions, speed restrictions; and (ii) Transmit information wirelessly from the car, the information givingthe car’s location, speed and the time, for example to facilitate real-time congestion mapping and billingthe road user.

1. Existing Work Published work by Rietveld and Shefer (1998:figure 1), and Dodgson, Young and van der Veer (2002:Table 2.1), summarise the sustainability of cars. Notably “economists have been almost unanimous in supportingthe principles of road pricing”(Thomson, 1998, p105), and t he benefits of road pricinghave been clear since the 1964 Smeed report. EU legislation covers detailed aspects of car construction. Euro IV and V engine emissions standards and new fuels will virtually eliminate noxious emissions by 2009. The UK has slidingscales of “Vehicle Excise Duty” (VED) and company car taxation that address only CO2 emissions, and are not yet adequate to do this (Montague (2003); Foley and Ferguson (2003)). “Free fuel” supplied by employers actually encourages car use, by reducing the marginal fuel cost per journey. However, the greatest eVects on society of car use result from aspects that have never been regulated: total annual mileage; maximum design speed; weight. Unlimited car use is legal, and there are no limits on either car drivers‘ hours, or maximum mileage in any time period. The car of the future must curb three challenges: congestion, accidents, and CO2 emissions.

2. The Relative Sizes of the Three Challenges Table 1 shows the relative size of the problems caused by car design and use, for the UK.

EVect of car use Annual cost (£bn) Trend in cost Congestion 20 Rising steeply Accidents (DfT2001:Sects 18-19) 18 Constant

CO2 emissions 2–5 Rising

Table1: The costs of car use Dodgson et al., 2002, p36, the second of the three tables labelled 6.1, lays out a congestion charging system optimised for the UK. Financial losses to the UK due to congestion and accidents account for 3.5% of GDP. As a benchmark, this is a rate of expenditure suYcient to build and equip one new hospital per day. The World Health Organisation oVers confirmation: “TraYc accidents cause about 120,000 deaths and 2.5 million injuries a year in Europe . . . Accidents remain the most important category of external cost of transport in Europe (ƒ158 billion a year or 2.5–3.0% of GDP in 17 Member States)” [WHO2003]. 9098191028 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 164 Transport Committee: Evidence

Car design needs to be optimised so as to reduce the occurrence of congestion and accidents, not just CO2 emissions. Telematics equipment in vehicles is the design step that will facilitate this most quickly. Taxation policies and economic incentives that influence car design are the policy lever to bringthis about, although light regulation will be needed. Eliasson and Mattsson (2001, p 441) found in a simulation for a city that “car traYc in terms of total distance travelled is reduced by about 24% at full congestion pricing”.

3. Distance Based and Congestion Charging The select committee has asked about technology designed to implement payment for road use, and asked for other uses of this technology. The key eVect of payment for road use is that the marginal cost of each car journey that a driver contemplates will be higher. Table 2 shows the economic advantages of distance- based and congestion charging. The figures relate to a new VW Golf MkIV, 1.4 petrol engine. “Option 1” in the table is a distance-based charge. Option 2 enhances option 1 with a further time-based congestion charge.

Total cost (3) for Item 10,000 miles/annum Cost per mile (p) Fuel, assuming40mpgand 75p/litre 852 8.5 Insurance 300 3 VED (band B) 120 1.2 Option 1: Road pricingof 2p/mile 200 2 Option 2: Road pricingof 2p/mile o V-peak; 5p/mile peak. (5,000 peak time miles/annum) 350 3.4

Table 2: Costs for distance-based charging Charging insurance and VED on a distance-basis, together with option 1, imposes costs of 14.7 p/mile, 73% above the fuel only cost of 8.5 p/mile. Option 2 increases this to 16.2 p/mile, 91% higher than fuel only. These provide incentives for alternatives to each car journey, including takingpublic transport, car sharing, or replacinga journey by a video conference. Clearly, charging insurance on a “Pay As You Drive” basis (PAYD), would produce a far greater incremental journey cost than levyingcurrent VED on a distance basis. Thi s is a key finding, because at least one UK insurance company is now trialling“pay as you drive” insurance. The UK should introduce a financial incentive for both insurers and motorists to adopt Pay As You Drive insurance schemes as quickly as possible. Ironically, this would lead to the installation of telematics equipment in cars far more quickly than any change to the construction and use regulations, providing a dynamic incentive to UK telematics equipment makers, ie the free market, to find the least cost ways of bringing this equipment into widespread use. There a chasm between the highly developed telematics equipment already used on a small proportion of vehicles on the UK’s roads, and the lack of any policy instruments to encourage the wider adoption of this technology. Many commercial vehicle operators track the position and speed of entire fleets of vehicles in real-time, simply to ensure maximum economic eYciency in their deployment and operation. This is exactly the technology needed to implement distance based and congestion charging, and it does not requiringany further technical development. Information derived by tel ematic links to around 30,000 of these vehicles is even purchased by the Highways Agency for the provision of real-time congestion maps, using“FVD” technology. Little persuasion is needed: “Nearly half of respondents (48% say they would support beingtaxed for the precise number of miles they drive if the average bill worked out about the same as current road user charges.” (MORI2002b).

4. Congestion,Accidents and Car Design Congestion is the delay imposed by a vehicle on other vehicles, and is an economic, social and environmental “bad”. CFIT2003a, p 2, lists eleven environmental, economic and social problems that are caused by congestion. It is essential to understand the causes of congestion, and figure J1 on p 222 of Plowden and Hillman (1996) is the key. Congestion is associated with unstable traYc flow, and the point at which unstable flow sets in is linked to the variability of speeds in a traYc stream, see the text on p 222. The Highways Agency is publicising its observations of braking waves in traYc, and how these contribute to congestion. Dodgson et al, 2002, p 9, also point out that accidents are a cause of congestion. 9098191028 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 165

The variability of speeds in traYc and the rate of occurrence of accidents are both heavily dependent on vehicle design, particularly vehicle design speeds. So designing cars diVerently is the key to reducingboth congestion and accidents. DfT statistics show today’s situation. Notably, table 2 shows the situation with speed checks and traYc calmingto reduce speeding,both of these beinglocalised approaches, an d traYc calminginvolvinggreatexpenditure.

Type of road Speed limit/Road Percentage of cars description exceeding speed limit in 2002 Built-up 30 mph 59 Built-up 40 mph 27 Non built-up Motorway 54

Table 3: Observed car speeds on UK roads [DfT2003a:Tables 4,8]

Technology can prevent all illegal speeding, using speed limiters fitted to cars. Limiters of fixed maximum speed are already fitted to commercial vehicles, see directives 92/6/EEC and 2002/85/EC. These limiters would eliminate the 54% figure in column 3 above. The retrospective evaluation of Directive 92/6/EEC cited:

“—reduced CO2 and NOx emissions . . . —benefits from fewer and less severe accidents” (EU2001, p8).

Second generation speed limiters are now available. Carsten and Tate (2000) studied systems that limit a vehicle’s speed electronically to the limit at the vehicle’s location, termed “Intelligent Speed Adaptation”, ISA, or “External Vehicle Speed Control”, EVSC. These can employ telematics, but simple location technology will suYce. The Netherlands and Sweden have completed trials of over 5000 ISA-equipped vehicles, but a small UK trial will not report until 2005–06. See also MORI2003a,b.

Carsten and Tate (2000:figure 3) foresaw mandatory use of ISA only in 2019, after fitment to a large proportion of vehicles. However, since 2001, a basic system has been in commercial use for youngdrivers in Ireland [Byrne2003]. An in-car monitor records vehicle speed, and uses GPS location detection. The system sounds an alarm when a speed limit is exceeded. Recordings of speed are available to the insurance company, and, under very strict conditions, to the police for investigations of specific incidents. The select committee could invite the manufacturers of such systems to explain their potential.

Both regulation and financial incentives should be used to introduce speed limiters for cars in the UK. The benefits would encompass reduced CO2 emissions and accidents. The least recognised and most valuable consequence however would be the reduction in congestion, both through fewer accidents and through much lower variability of speeds in traYc streams.

The potential for gain through speed limiters is clear from a simple analysis of current car design speeds. The mean maximum speeds of new cars on oVer in the UK from the Ford group of companies in July was 125 mph. That of Toyota models was 120 mph and that of BMW 140 mph. [“New Car Tables”, WHA2003].

5. The CO2 Plateau and the Congestion Spiral

VED and company car tax policies are bringing cars with significantly lower CO2 emissions onto the roads. However, these cars do many more miles per year for the same expenditure on fuel, so total UK traYc levels will increase faster than the rate of increase of real incomes. This eVect works against CO2 reduction, and causes a plateau the rate of development of CO2 emissions. Section 3 of CFIT2003b states that “the real cost of motoringhas fallen by 5.4% in the three years from January 2000 to Ja nuary 2003”.

Above a certain traYc level, congestion increases at a far greater rate than the rise in traYc levels. So vehicles with lower CO2 emissions, doing higher mileages, are leading to rapidly spiralling congestion. See the emissions situation described in DTI2002 and Watterson(2003). A policy that reduces CO2 emissions/ km causes changes to car design, but will only reduce total CO2 emissions if it is accompanied by a policy to counter the consequential rise in car use. Telematics technology to charge for the road use will do this. The reason why we lack road pricingis that there is “an educational gapto be bridged: the gap between economic truth and public comprehension” (Thomson, 2000:109). Spirallingcongestionis teachingus this lesson. 9098191028 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 166 Transport Committee: Evidence

6. Technology and Uninsured Driving An “ignition key” can either be mechanical, or be a smartcard detected wirelessly by the vehicle. Keys can be passed between drivers or stolen, often resultingin uninsured driv ing, wilful or otherwise. At least one vehicle telematics company supplies a system with a separate smartcard to provide verification of the driver’s identity at a remote location. [NAV2002, the paragraph on “Automatic Driver Recognition”]. Clearly this remote check could verify insurance, usingthe existingnati onal database of insured vehicles, and that the driver held a valid licence. Technology of similar complexity to credit cards and the SIM cards in mobile phones is adequate to achieve this, and has been available for twenty years. Compared to the user access security that is normal on workplace PCs and all mobile telephones, the checks on a driver starting a vehicle are very outdated. The consequent deterrent eVects on drivers are also absent.

7. Car Weight Were we to plan cars from scratch today, we would draw heavily on what we now know of the “externalities” of vehicle use, whilst still maximisingutility for the c ar user. A balanced regulatory regime would set the followingpermitted maxima:

(i) If six seats or more, a maximum car weight of 1,000kg and emissions of 80gCO2/km;

(ii) If three-five seats, a maximum of 800kgand 70gCO 2/km;

(iii) If one-two seats, a maximum of 600kgand 60gCO 2/km. These weight limits, together with ISA, would set a ceiling for maximum possible vehicle momentum in a crash. These CO2 emissions limits would be reduced stepwise with each passingyear, as hybr id engines can already meet these limits with ease. The extent to which new cars on our roads exceed these limits is an indicator of the magnitude of policy change now required.

A paper by Dobes (1999) explains the economically ideal distribution of CO2 emissions, involvingthe allocation of tradeable permits in CO2 to either individual drivers, or fuel producers. The administrative burden might be reduced by approximating this with a limit on the annual mileage of each type of vehicle, the maximum permissible mileage varying in inverse proportion to the CO2 emissions/km.

8. Imports/Exports and ODA The UK’s balance of payments deficit in cars amounted to £8.8 billion in 2002. Clearly any pricingsignals that reduce the attractions of fast and powerful cars, mainly imports, would reduce this. UK adoption of ISA and distance based charging would develop telematics technology, billing systems and consultancy skills for export around the world. This is the “early adopter” dividend. These policies and technologies would help the developing world to avoid huge human and financial costs, a benefit dwarfing the UK’s current ODA budget.

9. Driver Versus Computer Concerningthe committee’s question 6: We can still train, motivate and mo nitor/deter drivers far better than we do today. Only when this has been done will it be appropriate to ask whether the computer is better. Too many drivers will perform far below their potential until periodic re-testingprovides a motivation to keep drivingskills and knowledgeup to date. Drivingsimulators and the “t heory test” provide cheap ways to do this.

10. Conclusions The technology of the “car of the future” is already clear, encompassing three main changes: (i) Telematics technology. This will rebalance costs, by raising the incremental cost of car use, but loweringownership costs. This extends car ownership to lower income grou ps, and provides incentives for all drivers to reconsider the journeys that are of least value to them. This is transport economics at its most powerful. The specific mechanism will be the use of “Pay As You Drive” insurance, distance based taxation and congestion charging. (ii) Intelligent Speed Adaptation technology will cut accidents directly, and will cut congestion by reducingboth accidents and the variability of speeds in tra Yc streams. Simple fixed limiters of maximum speed can immediately bringmost of these benefits. (iii) Smartcard drivinglicences. These will enable each vehicle to check that a driver has a licence, is insured, and is not disqualified from driving. 9098191028 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 167

The quickest route to achievingthese benefits is to introduce financial inc entives to encourage their voluntary adoption. This will lead to rapid implementation, without requiringstandardisation for some years. However, there is a need for some regulation in the longer term, in order to achieve equity across society. Regulation should make standard the advances in car design that financial incentives have pioneered. UK policy in 2004–08 will succeed if it encourages the adoption of telematics equipment in vehicles. Each car will receive real-time information about conditions on the road network. Cars will provide information about their speed and location, both to enable them to be charged for use, and to provide the real-time information about the state of the network. Distance based charging, ISA technology and telematics will define the equipment in the car of the future, just as engineering and engine technology dominated in the past.

October 2003

References Byrne (2003) “AXA extends Traksure premium reduction scheme”. Byrne, Brian, Irish car com news, 10 June 2003. http://irishcar.com/axa100603.htm Carsten, O and Tate, F (2000), “External Vehicle Speed Control” http://www.its.leeds.ac.uk/projects/ evsc/del17.pdf CFIT2003a: “Congestion charging: The need to tackle congestion” (2003) http://www.cfit.gov.uk/congestioncharging/factsheets/need/ CFIT2003b: “10 Year Transport Plan: Second assessment report” (2003) http://www.cfit.gov.uk/research/10year/second/index.htm DFT2001: “Highways Economics Note No 1: 2001” (2001) http://www.dft.gov.uk/stellent/groups/dft—rdsafety/documents/page/dft—rdsafety—507642- 04.hcsp£TopOfPage Dobes, L (1999) “Kyoto: tradeable greenhouse emissions permits in the transport sector”, Transport Reviews, 19, 81-87. Dodgson, J, Young, J and van der Veer, J P (2002). “Paying for road use: Technical Report”. http:// www.cfit.gov.uk/research/pfru/pdf/pfru-tech.pdf DTI2002: “Long-Term reductions in Greenhouse Gas Emissions in the UK”. (2002). http://www.dti.gov.uk/energy/greenhousegas/greenhouse.pdf Eliasson, J and Mattson, L-G (2001) “Transport and Location EVects of Road Pricing: A Simulation Approach”, Journal of Transport Economics and Policy, 35: 417-456. EU2001: “Report from the Commission to the European Parliament and the Council: On the implementation of Council Directive 92/6/EEC of 10 February 1992 on the Installation and Use of Speed Limitation Devices For Certain Categories of Motor Vehicles in the Community” (2001) http:// 130.104.105.148/Bede/EBED452001/com2001—0318en01—1.pdf Foley and Ferguson (2003), “Putting the Brakes on Climate Change”, IPPR http://www.ippr.org/home/index.php?table%press&id%258 Montague, Simon (2003). “Fuel price hike could cut pollution”. BBC news, April 30. http://news.bbc.co.uk/1/hi/uk/2989555.stm MORI2002a: “Drivers’ Undecided Over Speed Limiters In Cars” (2002) http://www.mori.com/polls/ 2001/dl-010720c.shtml MORI2002b: “BackingFor In-car Speed Alarm” (2002) http://www.mori.com /polls/2002/fia.shtml NAV2002: “What is NAVTRAK?” (2002) http://62.189.88.148/navtrak/ Plowden, S and Hillman, M (1996) Speed Control and Transport Policy, Policy Studies Institute, London Rietveld, P and Shefer, D (1998) “Speed Choice, Speed Variance and Speed Limits”, Journal of Transport Economics and Policy, 32, 187-202. Sansom, T, Nash, CA, Mackie, PJ, Shires, J and Watkiss, P (2001). “Surface Transport Costs and Charges: Great Britain 1998” http://www.its.leeds.ac.uk/downloads/SurfaceTransportCostsReport.pdf SUS2003: “Achievinga better quality of life: Review of progresstowards s ustainable development- Government annual report 2002.” (2003) http://www.sustainable-development.gov.uk/ar2002/index.htm Thompson, J M (1998) “Reflections on the Economics of TraYc Congestion”, Journal of Transport Economics and Policy, 32, 93-109. 9098191028 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Watterson, J D (2003) “UK Greenhouse Gas Inventory, 1990 to 2001: Annual Report for submission under the framework convention on climate change” http://www.naei.org.uk/report—link.php?report— id%191 WHA2003: “New Car Tables”, July 2003, Whatcar, Haymarket Magazines Ltd., Haywards Heath, UK. WHO2003 “TraYc accidents” (2003) http://www.euro.who.int/transport/HIA/20030129—5

Memorandum by Pentagon Glass-Tech (CAR 27)

CARS OF THE FUTURE

Vehicle Design and Control:How Much Safer can Cars be Made for Drivers and Pedestrians

Who Pentagon are: Pentagon was originally founded in 1992, developing and supplying innovative glass-related products to the automotive sector and other industries. By pursuinga strategyof prov idingsuperior quality products and services, Pentagon has established itself as one of the leading businesses of its kind world-wide. Pentagon is a member of the Glass and Glazing Federation and is a British Standards registered company. Pentagon supply and fit, high-performance glass enhancement products for vehicles, buildings, film sets and specialist applications through company-owned and franchised operations.

How our product SupaGlass works for vehicle safety and security In 1998, SupaGlass, the Group’s branded and proprietary vehicle window glazingre-inforcement system, was introduced to the market. SupaGlass is an optically-clear, high-technology laminate. When retrofitted to the inner surface of a glass pane, the glass becomes highly resistant to common forms of smash and grab, bomb blasts and projectiles. SupaGlass also creates an invisible protective layer between passengers and the risk of broken glass. In short: — occupants of a car are safer in the event of accidents — SupaGlass makes it very diYcult for thieves to steal anythingfrom a car, includingthe car

Pentagon’s position Pentagon Glass-Tech believes that the SupaGlass window glazing re-enforcement system and similar technologies should play a significant role in improving vehicle safety and security, this could be achieved through the development of government policy by: — Firstly, distinguishing between conventional toughened and laminated glazing and thinner laminates which may be inadequate and potentially dangerous, and SupaGlass-equivalent glazing re-enforcement systems; — recognising the real impact such technology would have on the key concern for driver and passenger safety and vehicle crime reduction rates; — producinga specification of required vehicle glazingthat meets the stan dard of Pentagon SupaGlass and other such technologies. October 2003

Memorandum by Councillor Niall Walker (CAR 28)

Cars of the Future I know that some tax breaks are given to small engined cars, however it seems to be havinglittle e Vect. Cars are getting bigger and there are huge numbers of enormous 4x4 vehicles. I feel the Department for Transport ought to be penalising owners of large “gas guzzlers”. It is also obvious that there has been little progress in electric battery powered vehicles or Hydrogen Fuel Cell Vehicles. Part of the responsibility must rest with the transport committee for a lack of encouragement. Global Warmingis a serious problem and needs addressingquickly. Councillor Niall Walker Glasgow City Council October 2003 9098191030 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 169

Memorandum by C S Brindley (CAR 29)

CARS OF THE FUTURE 1. I believe that payingfor road use througha national satellite location system is not the best way to deal most eVectively with our major nationwide problem of traYc congestion. I believe it would prove needlessly complicated, time consumingand expensive in havingto keep track of all ve hicles all of the time, in continuously havingto prepare invoices, billingvehicle owners for thei r monthly, or quarterly, road use, dealingwith owner queries regardingthoseinvoices, and finally, summoni ngand finingthose owners who did not pay for whatever reason. It seems to have been overlooked that vehicles are driven for much of the time by persons other than their legal owners. How is road user cost to be redistributed amongst these? I can foresee rifts between family and friends, not to mention a constant battle between law enforcers and recalcitrant citizens. 2. In a supposedly egalitarian society, the proposed method of paying for road use would seem to be inherently unjust. The rich can always aVord to pay for road use, whether that use is essential, or not, whereas the poor are not so fortunate. I believe that a fairer, more generally acceptable method, which would also be less costly to administer and less confrontational, is feasible, as outlined in the followingparagraphs. 3. The present system of road taxation should be modified by separation into two complementary parts. It is drivers who use roads, and not only vehicle owners, either. Before any individual may drive, it is necessary to ensure that they are competent to do so, hence, drivinglicenc es. In practice, once on the road competence to drive safely and responsibly is not always manifest. It is suggested, therefore, that annual basic, driver road tax should be charged directly to drivers for the right to drive an annual allocation of road miles, the same for all, granted only upon presentation of a currently valid drivinglicence. An allocation of 12,000 miles at a charge of £120 is suggested here. This single change would virtually eradicate the problem of unlicensed drivers loose upon our roads. If, further, the Law required all licensed drivers, personally, to carry basic third-party insurance, and to present evidence to this eVect before allocation of annual mileage, the problem of uninsured drivers would likewise be eliminated. (Banned drivers would be unable to obtain a smart card.) 4. The other, variable part of road tax would continue to be levied upon individual vehicles at a progressively increasing rate depending upon their relative contributions to the initial capital cost of roads, repair and maintenance costs—aVected buildings and other structures, as well as roads and bridges— accident costs, fuel eYciency, noise, air pollution and other undesirable environmental impacts, beinglowest for the smallest, most fuel eYcient, least oVensive vehicles, highest for the heaviest and largest, most dangerous and damaging, least fuel eYcient, environmentally most intrusive and obnoxious. As now, this annual vehicle road tax would be paid by vehicle owners, private and company, with the right to operate for a further twelve month period dependent upon possession of a valid MoT certificate as proof of continuing serviceability. 5. Allocated annual mileage would take the form of a personal smart card, analogous to a debit/switch card, or phonecard. For the system to function, this would require all vehicles to be fitted with a card reader, the card beingretained throughoutthe period in operation, and returned o nly when the journey was completed, and the ignition switched oV. As the card would enable any holder to drive any vehicle of a class for which his, or her licence was valid, a conventional ignition key would still be needed as a safeguard for the rightful owner against unauthorised use. Without the key, the vehicle would simply remain immobilized; inserted in the lock and turned, it would serve only to remove this constraint. Mobility would only be initiated by means of a currently valid smart card. 6. The unit to be fitted to all vehicles would have four basic functions, firstly communication with the smart card by way of the reader and optional key pad, secondly to activate the ignition system once a valid card had been inserted, enablingthe key to turn this on when required, thir dly to enable radio communication between vehicles and roadside transmitter/receivers, to be outlined hereinafter, and fourthly, to display to the driver the current mileage remaining available to him, or her, together with the rate at which this was currently beingconsumed. As further security measu res, the smart card could also be programmed to enable operation of the steering and braking systems. If the advantages of such a system were made apparent to the general public, and to vehicle owners in particular, it ought to gain majority acceptance, as has been the case with tyre tread limits, the MoT and catalytic converters. With advances in electronics, computer and communications technology, the cost of such a device ought to be aVordable, of the order of £100–200, perhaps. 7. Rationing, just as prohibition of liquor or drugs, raises the prospect of a criminal black market. In this instance, the coveted items would be valid smart cards. Each would have its unique number, with an optional associated pin number encoded from it, known only to the rightful owner, if deemed worthwhile. The vehicle devices could then be programmed only to respond to a smart card when supplied, also, with the correct pin number. This would make stolen cards virtually useless, and counterfeiting—without knowing the code— very diYcult. Only if both card and pin number were stolen, would any remainingmila ge be of value. As for rightful owners attempting to double their allotted mileages, the cards could be manufactured as “read only”, so, non-reusable. 9098191030 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 170 Transport Committee: Evidence

8. The system should also prove eVective against the crimes of card theft and, more importantly, vehicle theft. It could even indulge counterfeit cards, and surprise the counterfeiter—especially if the counterfeiter were to be usingthe card, himself! This is one of the two important ways in wh ich radio communication enters into the scheme of things. Each device fitted to a vehicle would have programmed in that vehicle’s registration. Radio communication with any vehicle would be by way of either its registration or the smart card operatingit, or both. If either vehicle or card were stolen, the owner need simply notify the police, roadside radio transmitter/receivers in the vicinity of the crime would locate and identify the vehicle— substitution of false registration plates would not aid the criminal—then trace its route. There would be no need for dangerous high-speed chases, which would serve only to alert the criminal. Once visual contact had been established, it need only be maintained until the vehicle was parked and the ignition switched oV.In cases of theft, radio communication would remain open, so that a signal could temporarily immobilise the vehicle. The criminal could then be quietly apprehended as he alighted, and unsuspectingly walked away. Name and address of a thief usinghis own card, would already be known to the a rrestingo Ycers; one using a stolen card would be unlikely to know the correct details of its owner, who, in any case, could refute his assertions. As to counterfeit cards, card readers programmed to identify these would alert the police, who would proceed in the same way. If the card had been sold on, the purchaser would first be arrested, following this, hopefully, the vendor. Instead of continuously trackingall vehicl es by satellite, the police would have only to trace “wanted” vehicles where and when necessary, a far less onerous task. 9. The primary objective of this submission is the eVective management of traYc congestion with minimum demand upon law enforcement, by a self-regulating system established by road users, who would, themselves, decide not only how available annual road mileage would be distributed amongst them, but also how, where, to what extent, and in what circumstances they would prefer alternative forms of travel. Based upon the application of free and fair market principles, the system should, therefore, contribute to saner, more rational, less costly future development of our rural road and urban street networks, and furnish a sounder basis for better provision and integration of rail, bus, taxi motorbike, scooter, cycle and pedestrian alternatives for a pleasanter, more civilized environment, and a contented travellingpublic. 10. The introduction of smart cards would limit the total number of road miles that could be driven in any one year, but on its own would not regulate where or when those miles were consumed. There are many areas where, by common consensus, traYc volumes are unacceptably, if not dangerously excessive at certain times on many days, or else the presence of certain classes of vehicle is undesirable, commonly regarded as unwanted congestion. At the entrances and exits to these defined areas, roadside radio transmitter/receivers displayinga multiplier, or set of di Verential multipliers, would convey the one appropriate to the class of vehicle and time of day to each vehicle’s “control” unit. Whilst driven within the restricted zone, all mileage would be deducted at an enhanced rate determined by multiplyingthe actual road mileage traveled, as recorded by the vehicle instrumentation, by the allotted factor. On departinga “congestion”zone, the multiplier would automatically be removed, or, if the contiguous zone entered was also one of congestion, but subject to a diVerent set of multipliers, modified accordingly. Times of entry and exit would also be conveyed to vehicles simultaneously with application and removal of multipliers. This would eliminate the possibility of drivers enteringa congestionzone prior to a restriction c ominginto force, and leavingafter the restriction was lifted. As the probable intent was to evade the congestion mileage charge, all mileage driven within this extended period could automatically be deducted at the applicable rate as a penalty. This same provision would also allow of an automatic parkingchargebeinglevie d upon drivers addingto congestion by kerbside parking for some of the time. Ignition oV and on times could be logged, and drivers electronically invoiced, via the radio link, against their smart cards, not the owners! OV-street parkingwould be ignored, but could be incorporated where parking fees applied, if so wished. Smart cards could also markedly reduce traYcoVences. Drivers attemptingto circumvent the regulationswould be detecte dbythe roadside radio transmitter/receivers, which could be programmed to issue penalties, even annul their remainingmileages.Knowingthis, drivers would be less likely to o Vend. 11. Such a system would allow of congestion zones being monitored individually, and multipliers readily adjusted in line with evolvingtra Yc patterns, public demand, or protest. With radio identification of both smart cards, ie, drivers, and vehicles, special exemptions, or concessions could readily be incorporated. Buses, taxis, possibly coaches, would qualify for exemption, as would ambulances, police, and emergency service and public utility vehicles. The smart cards for these, interchangeable within “fleet” vehicles and authorized drivers, would be the responsibility of the appropriate authority, and could in certain circumstances incorporate mileage concessions also. Second, “practice” cards would probably be most appropriate for doctors in private medical practice, as also, perhaps, for certain other categories of dual function—private and “oYcial’—drivers, with penalties for misuse. Those livingand workingalong dangerously narrow country lanes would be exempt. Only through traYc need be discouraged by invoking the multiplier. Incidentally, where speed limits applied on these, drivers persistently exceedingthem could automatically be sent a cautionary note, or fined if transit times were unacceptably less than those determined by strict adherence. The system has, I believe, great flexibility to adapt to a wide range of traYc situations, fairly and equitably to all parties aVected. 12. The great beauty of the suggested system, I believe, is the opportunity it presents for society, itself, to determine the “travel modal split”, with rewards to those adoptingsoci ally and environmentally friendlier ways, a price, determined by themselves, for those choosingnot to do so. Du ringthe first year of operation, the main concern of all private motorists would be to make their allotted ration of miles last through the 9098191030 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 171

year. This would compel them to think at the start of every journey about the alternatives open to them, rail, coach, bus, taxi, park and ride, motor scooter if they owned one, bicycle, or walk. It would be for them to decide, and the consequences would be theirs. At the end of the first year, some would have longsince used up their ration and had to make do for the remainingweeks or months, som e would just eke out their allotted miles, while some would have miles remaining—gold dust! The system would provide for the situation of drivers embarkingupon a final journey without su Ycient remainingmileageto complete it, with limited mileage—20, 50 or 100 miles—emergency smart cards, obtainable once, and once only, through traYc police, AA and RAC patrolmen and fillingstations at a premium price. 13. At the start of the second, and all subsequent years, those with left-over miles from the previous year would return their cards to the DVLC. These would be recorded, ordered in ascendingmagnitude(so that there would be somethingfor everyone) totalled, but the total not disclos ed. Those who simply could not be prised from their cars could submit their sealed bids, number of extra miles they would like to have, price they were prepared to pay for them and payment in advance. DVLC would record and order these, first in descendingorder of price, then descendingnumber of miles. At the end of Ja nuary a first reconciliation would be attempted. If all miles had not been taken up, further bids would be invited, again at the beginning of March if needs be. In April, all supplementary smart cards would be sent to successful bidders, and all payments made to mileage sellers, based upon the average price obtained and miles returned. For all those involved, cost would be proportional to desire and car addiction, reward, to sacrifice, social and environmental responsibility. If there were not suYcient miles to go round, those who would miss out would be those who desired them least, havingo Vered too low a price. The money earned—tax free, I would hope— could then be used towards rail season tickets, bus passes, purchase and runningof a motorbike, scooter, or bicycle, the cost of protective clothing, walking shoes, umbrellas, rainwear, holidays or whatever individuals most had need of, or wanted at the time. 14. A similar scheme could run in parallel for the corporate sector, eYcient operators, whether haulage contractors, supermarket chains, bus companies, Councils and other Governmental agencies, or whatever, beingfinancially rewarded, their employees also, perhaps, for some less s ocial hours worked, while the less eYcient would pay for miles squandered, and be penalised for badly scheduled journeys. 15. Monitoringover time the changingpatternof road travel, and of travel modes, should enable more appropriate, more eYcient and less costly future provision for these. 16. The forgoing concepts were originally conceived some time ago, and first set out in an unpublished article intended for the general reader. A copy is enclosed with the hard copy of this memorandum. October 2003

Memorandum by Smart Moves Ltd (CAR 30)

CARS OF THE FUTURE Evidence from Smart Moves Ltd, leadingoperator of city car clubs (car shar ing) on “the extent to which car share clubs and leasingreplace buyinga car”.

Background and Terminology 1. Smart Moves Ltd, a company set up in 1999 that specialises in car sharinga nd is the largest operator of “City Car Clubs” in Britain, has prepared this evidence. We have not used the term car sharingor car share club in this paper. In Britain we use the term “city car club” to distinguish it from lift sharing and have named each scheme accordingly (eg as Edinburgh City Car Club or Bristol City Car Club). 2. Smart Moves operates city car clubs in Edinburgh (2001), Bristol (2000) and London (2003) and is also involved in the operation of two small rural car clubs. Two new schemes—in Brighton & Hove and Leeds— are close to going live. National membership is currently around 500 with access to over 40 cars. Our target is 5,000 members/drivers on our system by the end of 2004.

Introduction 3. The experience of large scale car share clubs in mainland European countries such as Switzerland, Austria and Germany demonstrates that in larger towns and cities, membership of car clubs has the potential to become a genuine alternative to owning a car for many people. This particularly applies to people livingor workingin city centres and in the adjacent neighbourhood s where car stations are located. In these cities car clubs are a commonplace alternative to second or third car ownership. In addition, people holdinga complementary subscription to a public transport season ticket , which is available with one transaction, have a simple way to access the scheme. 4. Given the acknowledged diYculty of encouraging and enabling people to give up car ownership and reduce car use in favour of public transport, car sharingthroughcar clubs has the unique potential to help stabilise levels of car use and increase mobility options by complementingpublic transport provision in urban areas. 9098191031 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 172 Transport Committee: Evidence

5. At this point in the growth of car clubs in Europe, North America and the Far East there is little indication of commentators anticipatinggrowthbeyond about 5% of the dri ver population of a particular country. In these circumstances we cannot see car sharingreplacingcar ow nership. However, we are conscious of the benefits that a significant take up of car clubs would bring to the life of major cities. We have explored these benefits in the evidence that follows.

Contribution of Car Clubs to Reducing Car Ownership and Car Use 6. We envisage car sharing (city car clubs) to be a significant contributor to reducingthe levels of car ownership and car parkingdemand. By complementingthe public transport s ystem, car clubs contribute to choice (not to own a car) and mobility. 7. There are a number of “drivers” which we believe will act together to build the attractiveness of car club membership. Some of these “drivers” are already in place or are currently under consideration as policy developments (eg road charging). We have also included in the list below a number of policy developments sought by the promoters of car clubs to enable the potential contribution of car clubs to be realised. 8. The drivers which we believe will facilitate a growth of car clubs include: (a) The introduction of one-stop public transport payments through the wider application of smart cards like the “oyster card” now in use in London. We envisage that the ability to add annual car club membership at discounted rate to a public transport season ticket oVers a major advance. This makes for easy access to car clubs for certain journeys and introduces the concept of “seamless mobility” that is under development in cities like Hanover, Germany. (b) The extension of road charging to more cities and the eventual inclusion of trunk roads, which contributes to greater transparency in the cost of motoring. (c) The extension of parkingcontrols with more e Vective provision for car club reserved parkingbays. In part these will take space from residents’ parking. (d) More community focused housingdevelopments and more take up of “home z ones”. The design and operation of low car and zero car communities is dependent on accommodatingthe desire of residents for access to the car. The car club oVers a solution that is expected to suit a significant proportion of such residents. The car club is already part of the planningp rocess in some local authorities and will increasingly play a part in the developing urban fabric of successful cities. (e) An increasingnumber of property developers “buyinginto” the car club concept through design and in some case actingas a reseller. (f) Incentives to parkingoperators (includingat railway stations) to en courage provision of car club bays. (g) Support from employers in using city car clubs to enhance mobility of employees with reduced requirement for parkingand more use of pool cars.

Projected Level of Growth—Social Economic and Environmental Impacts 9. Growth of car club members will increase when the network of car stations is more comprehensive and at least a 1,000 members are actively participatingin a particular city. R eaching“critical mass” means that non-members begin to view the experience of those already participating as normal or even “cool”. There will always be a diYculty in recruitingpeople who regularlycommute to work by car. 10. Car club members will transfer journeys to public transport, cyclinga nd walking. More “eyes on the street” enhances community safety and reduced traYc movements will improve road safety. 11. In Britain as a whole we envisage a membership of a million people by early in the next decade, with access to 40,000 vehicles, largely located in major town and cities, which have strongpublic transport and medium to high population densities. 12. Smart Moves has provided estimates for Transport for London on what it anticipates will be achieved by car clubs in 15 years (ie by 2018). To meet the needs of 150,000 members/users (representingabout 5% of the driver population of the capital). In London we have identified an infrastructure requirement for parking spaces for an estimated 7,500–8,000 car club vehicles. This would be met through a mixture of on street parkingby permit, dedicated o V-street parkingprovided by property managersand leased from parking operators. Some employers will be prepared to add bays on their property to add to the car club parking network, allowingall users access to these cars (some of which may require block bookings for the employer duringworkinghours). 13. One car club vehicle typically replaces around five privately owned vehicles. 7,500 to 8,000 car club vehicles will displace 32,000 privately owned vehicles and win back 170km of London’s street space from the car. 9098191031 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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14. Car club members typically halve their private car mileage, transferringjourneys to public transport, walkingand cycling.If every car club member reduced their annual car mile age by, on average 4,000 miles, with one million members nationally (5% of the driver population) nearly 1,500,000 tonnes of carbon dioxide emissions would be avoided over a year. This figure will reduce as car emission standards improve. 15. Reduced car use will make a significant contribution to improved traYc movement. The movement of buses, taxis and goods vehicles will have positive economic development benefits as has already been established through Congestion Charging in London.

Second-Generation Car Clubs 16. Technological developments will allow car clubs to oVer a wide range of options with greater reliability, and improved integration with other modes. Second generation car clubs will allow members to request a bookingand be giventhe locations of the nearest available cars t hat meet their needs. London for example will be sectored into several zones with members able to return vehicles to any car club parkingbay within their zone. Smaller cities can operate a single zone. This option could be particularly useful for members makingone-way trips to transport nodes such as train stations. In addition, reciprocal membership arrangements will allow access to car club vehicles throughout Britain and Europe. Open ended bookings and close working with rental companies for longer bookings; will provide members with substantial flexibility. 17. The main technology for booking and receiving instructions will be mobile telephony which, interactingwith in-car telematics, will givecar club members details an d costs of other options for makinga specific journey. We anticipate this would complement work by Transport for London and other Passenger Transport Authorities on journey planningand reinforce the potential be nefits of interoperability or for the individual who becomes a “travelblender”. 18. Recognised car club operators will meet high standards working in partnership with local authorities. They will provide low emission city cars for members’ use and work to integrate with public transport and planningpolicies. 19. Established partnerships with vehicle manufacturers will enable car club operators and their members access to the latest developments in clean fuel technology and urban car design. Operators will benefit from improved vehicle design, with manufacturers recognising the needs of car clubs by fittingcommunications technology to cars. Many journeys will be made in small city cars, complemented by small people carriers or estates, which will be available for leisure trips out of the city.

Conclusion 20. Car clubs have received little attention from government to date. Key factors like the cost of motoring relative to public transport have not worked in our favour. The work we have undertaken has been under resourced and none of the existingschemes has yet had the opportunity to pr ove its potential contribution to sustainable transport. We now recognise how we can overcome many of the barriers to becomingfully established, and we have been greatly encouraged by the lessons learnt from our colleagues in Europe and North America. Our work will continue to depend on support from local authority partners. Their role in assistingwith the creation of the infrastructure, support for the raisin gof public awareness and identifying opportunities for integration with public transport. 21. The key areas we believe merit the future attention of government if car clubs are to be encouraged are included in paragraph 8 of the evidence (“drivers”). 22. In addition, to ensure that car clubs are fostered eVectively in those towns and cities where the conditions are suitable would require the followingto be addressed: (a) Support for bids for pump primingfundingof the establishment phase of car clubs through the second round of Local Transport Plans. (b) Locatingcar club policy development within the framework of public tr ansport and encouraging closer integration with public transport operators through challenge funding. (c) Encouraging the planning of car clubs in new developments through PlanningGuidance (PPG3 and PPG13). (d) Improving the design and signing of on-street car stations; recognisingthat throughappropriate design, better ways can be identified to deter illegal parking than fines and tow-away. (e) Providingparkingoperators and property managerswith incentives to support car sharingin both its forms (ride sharingand car clubs). October 2003 9098191032 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 174 Transport Committee: Evidence

Memorandum by Carplus (CAR 31)

CARS OF THE FUTURE

Executive Summary 1. Introduction Carplus is the representative body of car clubs across the UK. Founded in 1998 as Community Car Share Network. Carplus now has almost 550 members, ranging from individuals to car club operators. We also have corporate members includinghousingdevelopers, local authorities and the DTI. Car clubs are a form of locally based, community integrated, short term, low cost car hire. They provide access to a car without the hassle and expense of owningone. 2. Key Benefits Car clubs bringa rangeof benefits across a spectrum of policy areas includi ng: — reducingcongestionand resultant pollution from exhaust emissions; — facilitatingdesignand build of low car housingdevelopments; — providinga solution to consequences of social exclusion and transport p overty; and — encouraging greater use of public transport, walking and cycling. 3. Car Club Growth and Current Status Carplus are aware of at least 22 car clubs in the UK with getting on for 1,000 members usingnearly 100 cars. In addition to these formal groups there is an unknown number of informal car clubs, whereby a number of people within a locality agree to share a vehicle between them. Car clubs have largely mirrored the growth patterns of longer established clubs in Europe. The early years reflect the slow growth in the acceptance and adoption of a new innovative concept. To enable the growth in the UK to continue to follow that of Europe, with significant growth in the second phase of operation, we would need the continued support of national, regional and local Government and to develop more eVective partnerships with other public transport operators. 4. Policy Objectives The Government support referred to above could take many forms including: — a stronglead on the consideration of car clubs in the LTP guidance; — fundingfor pilot studies in the areas of social exclusion, work place tra vel plans, public transport integration; — inclusion of the concept within planningguidelinesfor low car housings chemes; — financial support for a not for profit operator to establish an eVective national network of clubs, integrated with public transport, across the country; — encouragement for Insurance Companies to support both formal operators and informal groups who wish to form car clubs; — fiscal incentives to support car clubs, (egsignificantreductions in leve ls of Road Fund Licence fees for car club vehicles). Carplus Trust receives fundingfrom the Department for Transport, and the Countryside Agency and, in the past year the organisation has been supported by both the former Minister of Transport John Spellar and the current Transport Under-Secretary David Jamieson. We are pleased to provide this memorandum to the Transport Select Committee, and are encouraged that the committee has asked for submissions on car sharingand car clubs as part of its inquiry into cars of the future.

2. What is a Car Club They are part of the solution to the problems of congestion, parking limitations and vehicle emissions, as well as providinga useful tool to help combat social exclusion by reducing the impacts of transport poverty. Car clubs oVer access to a choice of vehicles without the hassle and expense of ownership. Cars are parked in reserved parkingbays close to where members live and work. They can be bo oked by internet or telephone for as little as an hour. Drivers pay a monthly membership fee plus the cost of each trip. Car clubs come in several diVerent formats. There are now a small number of operators who are looking to establish clubs in diVerent locations across the country. There are also several independent clubs, many set up under a project partly funded by Countryside Agency. These are being run by a range of organisations (egtransport co-operatives, community transport groupsetc). 9098191032 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 175

3. Current Scale of Car Clubs in the UK The basic idea of a car club—giving people access to a car in their neighbourhood without them having to own it—was imported from mainland Europe in the late 1990s. Carplus are aware of at least 22 car clubs in the UK with getting on for 1,000 members using nearly 100 cars. In addition to these formal groups there is an unknown number of informal car clubs, whereby a number of people within a locality agree to share a vehicle between them. Its application to the variety of UK contexts has demonstrated that the idea is flexible and is readily tailored to a wide variety of specific forms which are appropriate to the needs of local conditions. The UK experience has challenged some dogmas regarding the conditions necessary for car clubs to flourish. It is time to critically evaluate some of these assumptions in the light of the lessons learnt from the UK experience.

4. Growth of Car Clubs The charts below show that the growth in number of UK car club members is comparable to the early years of the Mobility club in Switzerland. After 16 years, Mobility has attracted 60,000 members. The club is now a country-wide scheme and is integrated with other elements of public transport provision1. Around the world, Communauto in Que´bec (Canada) has grown to over 3,000 members in seven years, and Zipcar in Boston has attracted an impressive 4,000 members in its first three years.

clients Growth of Car Sharing in Switzerland

Number of Clients 2000 50000 Number of Cars 1800 1600 40000 1400 1200 30000 1000 800 20000 600 10000 400 200 0 0 1987 1992 1997 2002

Informed business plans for the London and Bristol city car clubs (both operated by Smart Moves) predict sustained snow-balling growth. The Bristol club is predicted to grow from c. 100 members today towards 1,000 by 2006. The September 2001 blip in the UK growth chart below is entirely due to the members “lost” between the collapse and re-launch of the Edinburgh city car club. This club has now recovered to a position significantly beyond that before the earlier collapse. 9098191032 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 176 Transport Committee: Evidence

Car club growth in the UK

100 1000 90 cars 900 80 members 800 70 700 60 600 50 500

cars 40 400

30 300 members 20 200 10 100 0 0 Sep- Mar- Sep- Mar- Sep- Mar- Sep- Mar- Sep- Mar- Sep- 98 99 99 00 00 01 01 02 02 03 03

Future prospects of car clubs are dependent on a range of policy and wider transport issues. Independent estimates are summarised below under “Future Scenarios”. Data from the first five years in the UK suggest that there is no reason why car clubs cannot become an important element in the future transport mix.

5. Who Joins Car Clubs? Analysis of members of UK car clubs suggest they attract a wide variety of type of people. The data is skewed by members of the larger city clubs (Edinburgh, Bristol and Bath), which appear to attract members from multi-occupied residential areas, with some tendency to more aZuent areas. As these people tend also to be fairly car-dependent, it suggests that clubs really do provide a realistic alternative to car ownership in such areas. In rural areas, the range of types of members (in terms of income, location relative to settlement centres, occupation, housingtype) make it di Ycult to characterise typical member profiles. Given the opportunity, individuals from a broad sector of society find the benefits of car clubs an appealingoption. The “bottom-up” development of many clubs to date means , to an extent, that clubs have tended to recruit in areas which are pre-disposed to the idea. As these clubs mature, and increasingly look to integrate with public transport operators, they are starting to expand into areas where such interest would not have been suYcient to set up a club, but where people may join one that is already established. This is essentially how the Swiss Mobility club spread from individual clubs to a country-wide scheme.

6. Impacts of Car Clubs There are now many reports of the impacts that car clubs have on car use and ownership, use of public transport by members, the well-beingof members and other e Vects on local communities. The key reports may be sourced via the Carplus website. (www.carplus.org.uk) As yet, there are still no systematic before-after results from the comprehensive monitoringwhich is being carried out on the travel behaviour of UK car club members. However, similarities of other indicators with clubs overseas suggest that car travel reduction figures of over 30%3 will not be surprisingfor members joiningthe better established clubs. Additionally information from the Bristol City Car Club has shown that six cars have been removed from the road for each car club vehicle deployed—a ratio better than that quoted from mainland European clubs, where it has been shown that one car club vehicle replaces five privately owned cars. Carplus is keen to undertake research lookingat congestionreduction and emission reduction, as well as energy savings created from reduction in total numbers of vehicles produced. We have recently met with members of the Energy Savings Trust Transport Energy Team to discuss fundingpotential for such research. Monitoringof the clubs beingdeveloped under the Countryside Agency/Car plus rural programme has revealed that the novel and practical benefits of car clubs are beingwarmly welcomed by communities. The new focus of a car as a missinglink between public and private transport mea ns that the projects attract and include a very broad interest amongvaried members of communities, and pro vide a new form of community glue to provide a positive coherence to community based transport planning. Comprehensive data regarding travel behaviour changes for members joiningUK clubs will emergein late 2003–04. 9098191032 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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7. Car Clubs and Technology Car clubs increasingly employ technological developments for their operation. On-line bookingsystems, smart card access to vehicles, on board telematics and GST technology combine to make the operation of car clubs more eYcient and accessible, as well as makingthe cars less vulnerable to misuse a nd theft.

8. Future Scenarios Three significant independent reports have been published since the 2002 Motorist’s Forum report which make explicit reference to the potential future role and/or scale of car clubs in the UK. The relevant parts of these are appended to this report as a convenient quick reference. 1. In a critique of the Multi Modal Studies: Soft Factors Likely To AVect Travel Demand report done for the DfT by the Halcrow Group, the South West Transport Activists Roundtable (SWTAR2 uses the data in the original report to indicate that “soft” measures could result in a minimum reduction in vehicle kilometres of 11% by 2015. Car clubs would contribute 1%—equatingto 3.8 bi llion vehicle kilometres—to this total. 2. These predictions of the eVects on travel demand are largely in line with Lynn Sloman’s Less TraYc where People Live: How local transport schemes can help cut traYc3. She suggests that car clubs may cut travel demand by up to 1.6% “in the longer term”, and discusses factors which may influence this value. 3. The Rural Transport Futures1 report put together by Transport 2000 and funded by the Countryside Agency has been considering how best practice in rural transport from other countries could be applied to the UK. One of its recommendations is that the Government should support a national car club programme in the form of a start-up grant coupled with tax breaks. These reports show an increasingconsensus by external commentators on th e benefits car clubs can bring. They suggest that car clubs will play an important role in the mix of transport measures which will have a significant eVect in changing travel demand. A key recommendation which emerges is that a pro-active policy from both central government and through Local Transport Plans would significantly increase the impact of car clubs. One of the main criticisms by the SWTAR of the Halcrow report is that it confuses speculation and surmise with evidence and fact, hence compromisingthe validity of some of its recommendations. A similar criticism could be levelled at the Motorist’s Forum report, although this may at least be partly due to a lack of hard evidence from the UK at the time of its writing. Carplus have produced an updated assessment on the main recommendations of the Motorist’s forum report which provides commentary and evidence from UK clubs which relate to the points and reservations that it raises. We would be pleased to provide a copy of this document on request. It shows that the report was un-necessarily negative about the role and potential of car clubs in the UK, and together with the other three reports, point the way forward to the significant benefits that car clubs can make, alongwith other transport initiatives, in providingreal, long-termsolutions in tackli ngtravel demand in the UK.

9. Conclusion Car clubs are movingfrom a niche idea to become an accepted mainstream alte rnative to privately owned vehicles. For this to happen more eYciently car clubs would benefit from greater support from national, regional and local government. This could take many forms: — a stronglead on the consideration of car clubs in the LTP guidance; — fundingfor pilot studies in the areas of social exclusion, work place tra vel plans, public transport integration; — inclusion of the concept within planningguidelinesfor low car housings chemes; — financial support for a not for profit operator to establish an eVective national network of clubs, integrated with public transport, across the country; — encouragement for Insurance Companies to support both formal operators and informal groups who wish to form car clubs; and — fiscal incentives to support car clubs could take the form of significant reductions in levels of Road Fund Licence fees for car club vehicles. Carplus would be pleased to have the opportunity to give verbal evidence to the committee. We would also be pleased to arrange for the committee to visit one of our clubs to see how they work in practice and to speak with some car club members. October 2003 9098191032 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 178 Transport Committee: Evidence

References 1. Transport 2000, 2003 Rural Transport Futures: Transport Solutions for a ThrivingCountryside (Extract in Appendix 4). 2. SWTAR, 2002 Soft Factors Likely To AVect Travel Demand Report (To DTLR by Halcrow Group Ltd): Review and Implications For Multi-Modal Studies, SWTAR, March 2002 (Extracts in Appendix 2). 3. Sloman, L. 2003 Less TraYc where People Live: How Local Transport Schemes Can Help Cut TraYc, Transport for Quality of Life. (Extracts in Appendix 3).

Memorandum by the Energy Saving Trust (CAR 32)

CARS OF THE FUTURE This is the response of the Energy Saving Trust to the Transport Select Committee Inquiry: “Cars of the Future”. The Energy Saving Trust (EST) is a non-profit company, funded largely by the UK Government to deliver sustainable energy solutions to households, small firms and the road transport sector. EST is one of the UK’s leading organisations working to combat climate change. This response should not be taken as representingthe views of individual Trust members.

Background:Role of EST in Promoting Cleaner,Lower-Carbon Cars The Committee inquiry is timely, given the recent publication of “PoweringFuture Vehicles: The Government Strategy First Annual Report”47. EST is the key delivery agency for this Government strategy, through its TransportEnergy programmes and other activities, summarised below: TransportEnergy Programmes: — New Vehicle Technology Fund (NVTF) — Ultra Low Carbon Car Challenge — Low Carbon Bus Programme — Powershift — CleanUp Consumer information: — Information on cleaner, lower-carbon vehicles, technologies, fuels and grants is available at http://www.transportenergy.org.uk. — The most recent update is our “Cleaner Fuels Map”; indicatingpetrol stat ions that also sell cleaner, alternative fuels Summary of EST TransportEnergy Grants Currently Available: — Up to 75% towards LPG and natural gas conversions. — Fixed rate grant of £1,000 towards the purchase of petrol/electric hybrid vehicles. — Up to 75% towards premium costs for electric vehicles. — 50%–75% for particulate traps, oxidation catalysts and other technologies. — Up to 50% for demonstration projects.

Answers to Selected Committee Questions

How successful have Government grant and tax break initiatives been to date? 1.1 Despite recent growth in the number of alternative fuel vehicles (AFVs) available in the UK, the passenger car fuel market continues to be dominated by conventional fuels (see table).

Total motor vehicle by fuel, 2002 Petrol/ Gas/ Hybrid Gas Petrol Heavy Oil Electricity Steam Gas gas* Bi-fuel Electric Diesel 23,405,680 7,098,451 13,586 1.694 3,167 25,345 7,760 883 108

1.2 The alternative fuel with by far the largest market share in the UK is Liquefied Petroleum Gas (LPG), which has seen massive growth in recent years, particularly in 2003. The actual number of LPG vehicles currently on the road is probably around 100,000 (there is some delay in these vehicles beingreflected in DVLA figures). The majority of LPG vehicles are after-market conversions from petrol to bi-fuel. However an increasingnumber of manufacturers are now o Veringbi-fuel LPG vehicles, and, if current trends

47 Available on Department for Transport website: http://www.dft.gov.uk/stellent/groups/dft—roads/documents/page/dft— roads—024731.pdf 9098191033 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 179

continue, sales of new LPG bi-fuel vehicles could match new after-market conversions by the end of this year. Industry sources predict that the number of LPG vehicles will grow to around 300,000 vehicles in five years. This would represent 500% growth, but to keep this figure in perspective would only represent around 1–2% of the total number of cars on the road at that time. 1.3 The phrase “chicken and egg” is often quoted with reference to alternative transport fuels, and, of course, without fuel to run them on, AFVs are not much use. In the case of LPG, fuel supply has matched vehicle technology innovation, with 1,350 LPG refueling stations now built in the UK. This represents high levels of investment by the oil industry, and is excellent progress, as around 2,500 stations could be enough to provide nationwide LPG coverage48. It is also worth notingthat there is enoughdomestic LPG to theoretically be able to power 8–10% of the UK fleet49. 1.4 The other major alternative for passenger cars are Biofuels- a catch-all term for alcohols, ethers, esters and other organic compounds made from biomass such as herbaceous and woody plants, agricultural and forestry residues or municipal waste. Biodiesel, largely derived from rapeseed oil, can be used as a direct substitute for diesel fuel, but this presents some technical problems and requires engine modifications. Therefore the best short to medium term option is to use biodiesel as a blend of up to 5% of conventional diesel, as this presents no significant technical problems. 1.5 There are various policy mechanisms in place to promote biofuels. In the April 2002 Budget, duty on biodiesel was cut by 20p compared to the standard diesel rate. The European Union Biofuels Directive requires member states to set indicative targets for sales of biofuels to be met by 2005 and 2010. The Government is currently consideringthe level of targetsthat should be se t for the UK, and will be consulting on possible targets in early 2004. This website will be expanded to include other alternative fuels as these become commercially available50. As mentioned above, EST provides a website with a “Clean Fuels Map”, indicatingwhere biofuels (and also LPG and CNG) can be bought. 1.6 Another alternative gaseous fuel being promoted in the UK is Compressed Natural Gas (CNG). In the UK, CNG is used for heavy-duty vehicles, and as such falls outside the scope of this inquiry. However it is worth briefly notingthat CNG-powered HGVs o Ver good potential to cut CO2 emissions, air pollution, noise and congestion—for instance, CNG trucks could, if supplementary noise issues were resolved, deliver goods at night, thus significantly reducing congestion. TransportEnergy grants are available for up to 75% of the additional cost of a CNG vehicle; for conversions listed on EST Registers of approved technologies, and for refuellingstations, provided the site givesthird party access. C NG is at an early stage of commercial development in the UK: currently there are only a few hundred CNG vehicles on the road, and about 30 refuellingstations 51. 1.7 Hydrogen is a versatile fuel—it can be used in adapted internal combustion engines or fuel cell vehicles. Hydrogen is not like traditional fuels, which can be mined or drilled out of the ground. It is not a primary energy source. Rather, like electricity, hydrogen is an energy carrier that has to be manufactured, by splittingit out of the compounds in which it occurs naturally such as wat er and natural gas. Hydrogen’s advantage is that it can be produced from a range of sources to suit what is most accessible or available locally. As with electricity, if the hydrogen is made from fossil fuels then significant amounts of pollution will still be released into the atmosphere. Only hydrogen from renewable energy sources oVers a truly sustainable and carbon free option (see paragraphs 2.6–2.8). Hydrogen must be either liquefied or compressed to reach the energy densities needed by road vehicles. Liquefaction uses the equivalent of 25% of the energy stored. More eYcient ways of storinghydrogen,such as metal hydrides, are beingdevelope d but they still store less energy per unit volume than petrol or diesel. 1.8 Methanol is an alcohol fuel mainly derived from natural gas in production plants. Methanol can be used as a primary fuel (usually blended with up to 15% petrol) in vehicles designed or modified for its usage. Vehicle manufacturers withdrew vehicles that could accommodate both petrol and methanol from the market about five years ago following corrosion problems. There is some commercial interest in developing a fuel cell directly run on methanol. There are, however, serious safety issues associated with methanol—it is toxic to humans if ingested or absorbed through the skin (SMMT, 2002)—which is likely to limit its usage as a road fuel. 1.9 Electric vehicles are extremely quiet with no tailpipe pollution. If the electricity were generated from renewable energy sources then electric cars would create zero well-to-wheel carbon emissions, however, currently electricity is predominantly generated by fossil fuels, leadingto significantwell-to-wheel CO 2 emissions from electric vehicles. In an electric vehicle, batteries and electric motors replace the conventional internal combustion engine. It costs as little as 1p a mile to run a car on electricity compared with around 10p on petrol. Electricity is most suited for use in city-based cars and vans with set journey patterns requiring

48 The total number of conventional petrol stations has been decreasingat an average rate of two closures per day, and is expected to stabilise at around 5,000. If half of these sold LPG, this could be adequate for the entire UK LPG fleet. 49 EST calculation: 2,750,000 vehicles at 20,000 km/year, using0.05 litres of LPG/km would use around 2 million tonnes of LPG. Currently the UK exports 3 million tonnes LPG pa and uses 80k tonnes pa for road transport. 50 See http://www.cleaner-drive.co.uk/transportenergy. 51 Other policies to promoted CNG include Enhanced Capital Allowances for CNG refuellingsites and Reduced Pollution Certificates for HGVs over 3.5 tonnes, which entitle owners to road tax reductions. 9098191033 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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a limited range of up to 50 miles. Electric vehicles currently cost significantly more than conventional petrol or diesel vehicles, however TransportEnergy grants are available. In addition the batteries are expensive and tend to be leased rather than purchased outright. 1.10 Alternative Technologies. Realistically, then, petrol and diesel will continue to power the majority of the UK passenger car fleet in the short run to medium term. Therefore it is also important to consider what alternative vehicle technologies can reduce pollution in the road transport sector, and what levels of commercial development these technologies have obtained. Two important contenders are hybrid vehicles and fuel cell vehicles—these technologies are briefly outlined below. EST plays a key role in promotingUK innovation in these technologies52. 1.11 Hybrid vehicles currently use a combination of a small conventional engine and an electric motor. Battery power is used at lower speeds and for stop-start drivingin urban ar eas. The engine is used to drive the vehicle outside urban areas, to travel at high speeds or to recharge the batteries. Unlike dedicated electric vehicles, hybrid vehicles do not require electric recharging facilities. They are essentially more energy eYcient, liquid fuel vehicles due to the higher eYciencies achievable with electric traction especially at slow speeds. Petrol hybrid cars have only recently entered the UK market—the Toyota Prius and Honda Insight and Civic IMA, for example. Other auto manufacturers are developinghybri ds—for example Ford, in the United States, are developinga hybrid version of their Escape S.U.V, to be launched in the US market in 2005. EST strongly supports hybrid technology, and is the leading agency in the UK promotingit. Future grants, marketing strategies and technology programmes will promote the development and market adoption of hybrids as well as alternatively fuel vehicles. Currently, both the Prius and IMA attract PowerShift grants of £1,000 per vehicle. 1.12 Fuel cells are devices that convert the energy stored in a fuel directly into electricity. Fuel cells function in a similar way to batteries in that they have no movingparts and c onvert chemical energy into electricity very eYciently. Like a battery cell, multiple fuel cells are stacked together to increase the voltage. Unlike batteries, fuel cells never need to be recharged and will produce electricity for as longas the fuel— usually hydrogen—is provided. Fuels cells can be used in both vehicles and buildings for providing energy. The most commonly used fuel cell technology for vehicles is the Proton Exchange Membrane (PEM) fuel cell. There are currently no hydrogen fuel cell vehicles that are commercially available but there are many hydrogen fuel cell buses and cars that are already in demonstration. 1.13 EST support for new fuels and technologies EST runs two programmes devoted to research, development and deployment of cutting-edge cleaner, low-carbon technologies. These are the New Vehicle Technology Fund, and the Ultra Low Carbon Car Challenge53. EST will continue to ensure its programmes keep pace with the development of new fuels and technologies (see paragraph 3.9).

2. What fuels will be used to drive the vehicles of the future, and to what extent will these solve environmental problems?

2.1 CO2 emissions from new vehicles: CO2 Emissions from new vehicles are falling. In 2001, ACEA reduced the average CO2 emissions of its new car fleet to 164 g/km; this represents about a 2.5% cut from 2000, and 1.9% per year since 199554. However, increases in car ownership and miles travelled mean that total carbon emissions from car transport have been roughly flat for the last decade52. In 2001 road transport 56 contributed 21% of total UK CO2 emissions . 2.2 Diesel: The main driver behind the fall in new vehicle emissions is the growingproportion of diesel vehicles: From 1992 to 2002, Diesels grew more than four-fold compared to an 8% growth rate for petrol 57 vehicles . Car manufacturers are usingadvanced diesel technologiesto meet their v oluntary CO2 agreements with the European Commission58. In the UK, increased supply is matched by increased demand due to fiscal measures such as the Company Car Tax, which has had the eVect of promotingdiesel vehicles in the fleet market, which accounts for around 40% of new car sales in the UK. 2.3 Hybrids

52 See Summary, paragraph 2.14, TransportEnergy web site. 53 See recent announcement of ULCCC winners at http://www.dft.gov.uk/pns/DisplayPN.cgi?pn—id%2003—0124. 54 EC/ACEA Joint MonitoringReport for MonitoringYear 2001 (published 2002 ). 55 DTI, Energy White Paper, 2003. 56 Digest of Environmental Statistics http://www.defra.gov.uk/environment/statistics/des/globatmos/gafg07.htm. 57 DTI Energy Statistics 2003: See Appendix for table. 58 The EC/ACEA Joint MonitoringReport for MonitoringYear 2001 (published 2 002) notes: “Technologies (such as high- pressure injection diesel engines) have been commercialised on a very large scale. and [have] driven the recent exceptional CO2 performance”. 9098191033 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Hybrid vehicles have the potential to halve CO2 emissions from new vehicles the short term, and can provide significant air quality and noise benefits as well. In the longer term, the development of hybrid technology may help bring about the technological development and market introduction of hydrogen- powered fuel cell vehicles59. Hybrids have advantage of not needing additional fuel infrastructure, and save consumers money at the petrol pump due to their excellent fuel economy. 2.4 Biofuels In theory biofuels can be carbon neutral but in practice carbon savings from biofuels made from primary crops are often limited because of energy use in growing and processing the crops, and other inputs such as fertilisers. Nevertheless, a 5% blended biodiesel may reduce CO2 emissions by up to five% if “well to wheels” factors are accounted for. However, there are concerns over air quality, as while blended biodiesel may 60 produce less particulate matter than ultra-low-sulphur diesel, they may also emit more NOx . The DfT is currently undergoing a comprehensive review of biofuels, which should provide definitive data on its environmental performance includingwider issues such as land-take and f armland biodiversity, and is due to be completed in early 2004. 2.5 LPG: Takinginto account fuel carbon content and upstream energyuse, w ell to wheel carbon emissions from LPG vehicles are approx 18% lower than from petrol vehicles and similar to those from diesel. If total propane export were to be used as automotive LPG as a substitute for petrol, the UK carbon emissions reduction achieved would be approx 0.3 MtC/year (risingto 0.5 M tC/year if the LPG were used in dedicated engines)—broadly similar to the EST target for carbon reductions for household lighting by 2010. LPG also oVers air quality benefits over diesel vehicles61, which is particularly important in urban areas. LPG conversions can also continue to improve air pollution, by reducingpollution from older vehicles; however the quality of LPG conversions must be assured, and currently the environmental performance of unregulated or unapproved conversions is a major concern—see paragraph 3.8. 2.6 LongTerm Vision: Ultra-low carbon transport fuels. It is critically important that the UK and other nations to lay the groundwork for the development of ultra low-carbon transport fuels. If hydrogen were produced from renewable energy it would be a zero- emissions fuel; if bio-fuels were used at 100% concentrations rather than as blends with petrol or diesel they would be “carbon-neutral”—the CO2 expelled in combustion would be the exact equivalent of carbon absorbed as crops are grown. However, as renewables account for only around 2.5% of electricity supply, it is unlikely to beu used in the near term for developinghydrogenfor trans port. EST has made a detailed contribution to the discussion over the development of these fuels, in the report “FuellingRoad Transport— Implications for Energy Policy”62, prepared at the request of the Department for Transport in collaboration with the Institute for European Environmental Policy and the National Society for Clean Air (NSCA)— copy attached. 2.7 The report concluded that in overall carbon reduction terms, it would be better for renewable energy to be used in the electricity system rather than used to produce hydrogen as a transport fuel. Producing hydrogen from natural gas to power vehicles is cheaper and oVers some environmental benefits if used in high eYciency fuel cell vehicles. However in the short term, road fuel gases and biofuels can also play a role in reducingemissions. 2.8 The report also argues that the most interesting use of biofuels may well be in producinghydrogen or methanol from high yield crops, such as wood, which would be a better option than usingrenewable electricity for this purpose in the medium term. The study concludes that there is no case for accelerating the introduction of a large-scale hydrogen-powered vehicle fleet, fuelled by hydrogen from renewable energy. From the perspective of both the environment and security of energy supply, the most promising way ahead is to aggressively promote more energy eYcient vehicles such as hybrids, while gradually developing hydrogen fuel cell technology using hydrogen produced from natural gas and biofuels.

3. What does the Government need to do to make it happen?

As stated at the start of this document, EST is the key delivery agency for the PoweringFuture Vehicles strategy, which is the key Government strategy for the market introduction of cleaner, lower-carbon vehicles. This section briefly outlines some additional options available to national and local authorities to promote cleaner fuels and vehicles.

59 See for example “Carbon to hydrogen: roadmaps for passenger cars”, Report for DfT by Ricardo ConsultingEngineers,http:// www.dft.gov.uk/stellent/groups/dft—roads/documents/page/dft—roads—507528.pdf. 60 See for instance data provided by Greenergy in their Budget Submission, October 2002 for a Vauxhall Astra runningon blended biodiesel- http://www.greenergy.com/company/downloads/budget—2002.pdf. 61 Recent testingdata indicates that new bi-fuel LPG vehicles have CO 2 benefits over diesel as well as air pollution benefits— contact LPGA for testingresults: mail wlpga.co.uk. 62 Full report available on EST web site http://www.est.org.uk/est/documents/Fueling—Road—Transport—Jan—03.pdf. 9098191033 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Policies to Promote Alternative Fuels

3.1 The Government has recently consulted on the future strategy for road fuel gases—what contribution they can make to lower-carbon transport, and how fiscal instruments such as excise duty should be used to promote the alternative fuel market. 3.2 In response, EST has proposed a 10-year fiscal framework for LPG, oVeringconditional support for this fuel provided environmental benefits can be assured63. To summarise, fuel duty would be maintained at its current level for the next three years (from 2004) in order to create the market conditions for cleaner, dedicated LPG vehicles to be introduced to the market. If industry delivers within this timeframe, LPG duty would be set to make runningcosts of new LPG vehicles roughlyequivalent to comparable diesel vehicles64. The duty rate would be gradually raised to this level by 2010. In 2010 the fuel duty rate would be re- calculated based on the environmental benefits of the fuel. The duty rate should gradually rise to this level over a further three years (creatinga 10-year framework), then remaining constant. 3.3 EST believes that this framework can provide a solid foundation for the development of other alternative fuels such as CNG and, in the longer term, hydrogen. As briefly pointed out above, CNG is at an early stage in its commercial development in the UK, and as such EST believes that CNG excise duty should remain at its current level for the next three years, and re-evaluated after this time.

Additional Policies to Promote Cleaner, Lower-carbon cars

3.4 VED on passenger cars: As currently structured this potentially important policy tool does not incentivise the choice of lower-carbon vehicles. This is because the highest band is set a too low a level of CO2 to allow comparisons between model variants, while charges on more-pollutingvehicles are too low. EST supports reforming VED with a new, higher band, and a higher cost for higher bands. 3.5 Consumer Labelling: EST supports a labelling system oVeringconsumers clear information about the environmental performance of their vehicle, similar to a white goods energy eYciency label on white goods. In the absence of action at the EU level, EST supports a UK label, possibly similar to the label produced already in Holland65. 3.6 Congestion/Road User Charging: The London Congestion Charge has provided an excellent boost to the sales of alternative fuel and hybrid vehicles. EST facilitates the exemption programme for EST funded LPG conversions, hybrids and other alternatively fuelled vehicles. EST is keen to work with other local authorities to develop such systems. More generally, road user charging could be designed so as to incentivise lower-carbon vehicles across the UK, and potentially to help manage the growth in demand for passenger car transportation. EST believes Government should carefully consider road charging and as such supports the recent appointment of an expert panel to look at this issue. 3.7 Low-Emission Zones (LEZs): A low emission zone is defined as an area that applies an additional pollution charge, or excludes altogether, more polluting vehicles from defined urban areas. LEZs are potentially useful tools to combat air pollution, and EST supports their adoption in polluted urban areas across the UK. A feasibility study for a London Low Emission Zone has recently been completed66; the study is currently under consideration by relevant decision-makers (EST was on the steeringgroupfor this study). Other councils around the country are developingproposals for LE Zs, and the NSCA has recently held a consultation on options for national criteria for these zones67. 3.8 ImprovingLPG conversions EST supports recent Government proposals to extend the “catalyst” test, already part of the MoT test for petrol cars, to the MoT test for gas-powered cars68. EST urges the DfT to do all it can to bring about this improvement as soon as practically possible. Indeed, this would be the simplest, cheapest ways to help ensure that vehicles converted to run on LPG have good environmental performance. The measure should also be accompanied by an awareness campaign to inform converters, customers and media of the benefits of high quality conversions—eg using equipment on the PowerShift register—and to point out the problems of unapproved conversions, such as the increased risk of high catalyst replacement bills.

63 For details see full response on EST web site: http://www.est.org.uk/est/documents/EST—response—RFG—Consultation— FINAL.pdf. 64 A runningcost methodologycan be used for this calculation- see EST Road Fu el Gas consultation response. Dedicated LPG vehicles would probably oVer similar, or better, environmental performance to comparable diesel models. 65 See Dutch environment ministry http://www2.minvrom.nl/pagina.html?id%5055. 66 See http://www.london-lez.org. 67 See http://www.nsca.org.uk/lez.htm. 68 Consultation published on-line at http://www.dft.gov.uk/stellent/groups/dft—roads/documents/page/dft—roads—024501- 01.hcsp£P13—262. 9098191033 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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3.9 Development of TransportEnergy Programmes: EST is currently planningTransportEnergy activities for the next year, to ensure that they are structured in the best way to constantly drive innovations in cleaner, lower-carbon vehicles. EST will be workingclosely with partn ers in the Low Carbon Vehicle Partnership on future plans for incentives and consumer information campaigns. Alex Veitch Senior Transport Policy Analyst October 2003

Memorandum by Norwich Union (CAR 33)

CARS OF THE FUTURE

About Norwich Union

Norwich Union is the UK’s largest general Insurer and part of the Aviva Group the world’s seventh largest insurance group. It operates in over 40 locations in the UK and has a market share of around 16%. Norwich Union operates through a number of channels of distribution, includingDirect, Intermediaries, corporate partnerships includinglenders and is the UK’s largestpersona l lines insurer insuringone in five households. Norwich Union has an exclusive European licence to develop and launch “Pay As You Drive”TM insurance and are committed to exploitingthis customer innovation.

Vehicle Design and Control

How much safer can cars be made for drivers and pedestrians? Is the human driver better than the computer— where do we draw the line?

The issue really beingtackled by all these questions is whether more could be done to deal with dangerous drivers before they cause harm. This is a diYcult area to provide any conclusive solutions. In order for answers to be reached, it would need to be known (a) if someone is a dangerous driver or likely to drive dangerously prior to an accident and (b) what makes them dangerous. Methods to address this may include: — Includingan assessment of likely behaviour in the drivingtest. For exam ple, acceleration within the speed limit is legal but can prove more dangerous than speeding itself. — Increase ability to identify behaviour whilst drivingthroughpolicing , CCTV technology, and on- board technology systems (which may also be able to used to rectify dangerous behaviour through limiting, or taking, control of the car). — Reviewingthe technologybeinginstalled in new cars. This tends to focus on the safety of the driver and passengers. Can more be done to focus on the pedestrian? — Increasingdriver trainingand education. — Usingtelematics (as is beingdeployed by Norwich Union in our “Pay As You D rive”TM insurance pilot). This would act as supplemental analysis of the driver beyond the test situation and provide a continuous stream of data about where the vehicle goes, the speeds its driven as well as the overall drivingbehaviour. Norwich Union believe that the best longterm method would be to have a great er understandingof the attributes and behaviours of each driver, with technology being used to monitor, encourage, and ultimately reward behavioural change. Duringour 18 month “Pay As You Drive” TM pilot we will gather significant amounts of data from 5,000 of its customers to better understand how they use/drive their vehicles and relate this to their likelihood of havingan accident with another vehicle or indeed a pedestrian. This pilot information will be shared with each customer as part of the pilot research to gauge their reaction to it and see if it influences their vehicle usage. This information may then be able to be used in educating drivers on their journey types, egthe school run, to improve safety in those pedestrian high-risk circumstances. Norwich Union believes by linkingthis technologyto an insurance product particularly duringthe early part of a drivingcareer, we can heavily influence motorists drivingstyles and approach to risk over the longer term. 9098191034 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Can e-safety initiatives prevent accidents or lessen their impacts? Norwich Union believes that a fundamental part of e-safety is telematics technology. This technology allows two-way communication with a vehicle but specifically the recordingand downloadingof vehicle usage data eg mileage, speeds, direction etc. Norwich Union are usingthis technologyas part of our innovative “Pay As Yo u Drive”TM insurance pilot. This aims to better understand how motorists use their vehicles and relate this to the likelihood of them havingan accident. This technologywill enable: — The development and launch of a usage based insurance product. — Faster, more eVective responses at the time of an accident. — Enable Norwich Union to know immediately accurately the location of the vehicle and potentially be able to acquire data as the circumstances and severity of the accident. — Assist the emergency services by passing them information enabling them to respond appropriately, thereby speedingup treatment times and potentially redu cingthe severity of some injuries.

What influence does the UK Government have in a global car market? The UK Government does, and should, have an influence in the global car market. The UK is part of the European Union and is a growth market for new cars. Exercising this influence is particularly important given that UK traYc management requirements diVer from other countries. However, the level of this influence does have its limitations: — Car manufacturers operate on a European-wide and, often, global stage, this influence does have its limitations; — and are constantly seekingto reduce their costs throughuniformity. The UK Government has a valuable role to play, however, in ensuringthat mea sures are introduced to make cars safer and more secure. This would have an important impact on the insurance market as such variables play a part in determiningcost. In addition, UK legislationcan also play a part in influencingthe global car market. Making it illegal to drive without a seat belt has made a dramatic impact on safety. More could be done regarding other safety measures such as air bags and car security.

Vehicle Use

If drivers paid for road use through a national satellite location system, what else could the technology be used for and what are the implications? The possibilities for greater use of satellite location systems are numerous: — “Pay As You Drive”TM insurance. Norwich Union’s innovative method of calculatinginsurance premiums currently beingtested. This would enable insurance to be calcul ated on a more individual basis takinginto account where you drive and how often. This in turn could bringabout beneficial changes in driving behaviour and vehicle usage. — More eYcient accident/breakdown services. This would benefit consumers and reduce road congestion through faster clearance of broken down vehicles. — Enhanced vehicle security, enablingmore e Ycient trackinglocatingand disablingof stolen vehicles. — Collectingroad data to help in transport planning,road safety and road m anagement. — Usage-based road tax. Similar to “Pay as you Drive”TM, this technology would enable those who use the road less, pay less. — Improved environmental tax. Again, this could be calculated not just be usingemission data but also where vehicles are used and how often, thereby targeting those causingthe most environmental damage.

To what extent will car-share clubs and leasing replace buying a car? Whilst Norwich Union does not form part of the market, such a move raises questions relatingto how insurance is calculated and administered. For example: — How should you insure co-operative ownership/use? — Does the risk change? Even though there may be fewer vehicles, use per vehicle may increase. 9098191034 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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“Pay As You Drive”TM insurance will be able to recognise these changing patterns of driving and therefore be able to price more accurately and provide the flexible approach to suit each customer. We will be able to apportion precise premiums for each journey hence allocatingthe appropr iate charge for each driver/user rather than applyinga broad average.This will ensure each driver takes ca re and is responsible for how the care is used, therefore encouraging better driving.

Can technology prevent uninsured driving? Norwich Union believe that nothingwill stop unlawful use of vehicles, alt hough there are solutions which may create a better barrier than exists at present and reduce the likelihood of such activity. For example, car technology could help detract thieves, and could stop family members usingthe car without approval via driver sensor enablement. Norwich Union’s “Pay As You Drive”TM insurance technology may go some way to alleviating this as it will give consumers the opportunity to receive an insurance premium which is far more reflective of their actual vehicle usage. They will be able to control their premium and will see direct impact in their pocket if they were to allow uninsured drivers to use their car.

Social Exclusion Norwich Union’s “Pay As You Drive”TM insurance may also provide an alternative, more aVordable policy for those who infrequently use their car or are lookingto control th eir premium down through more appropriate drivingegyoungdrivers usingtheir cars less at night.Quite simply it will change motor insurance from beinga fixed cost to a variable one This may help reduce unins ured drivingand provide a route for those who may otherwise be socially excluded because of price, for example due to change in circumstance, those who retire, or become unemployed—our premiums may reduce to reflect reduction in commutingetc. Other ways technology could help prevent uninsured driving include: — Greater use of ANPR (Automatic Number Plate Recognition) equipment by the police in checking the Motor Insurance Database for potential uninsured drivers. This technology is in place to photograph for registration numbers for speeding fines. This link to the MID would enable the police to also fine for non-insurance. — Vehicle ID card. Containinga chip, this would be needed in order for the ve hicle to start. October 2003

Memorandum by RoadPeace (CAR 34)

CARS OF THE FUTURE RoadPeace is UK’s national charity for road traYc victims. Its membership brings together primary and secondary victims as well as a number of transport, legal and medical specialists and members of the public who are concerned about the high levels of danger and violence on public roads. We seek to address all levels of responsibilities in respect of the daily road carnage and actively support all measures to reduce road danger at source. RoadPeace’s main objectives are to: — Provide emotional and practical support to bereaved and injured road traYc victims. — Raise awareness of road danger and campaign for its reduction. — Conduct research into road danger and the wider impact of road death and injury. RoadPeace is an active member of PACTS, and is a founder member of the Slower Speeds Initiative, the Children and TraYc Coalition and Safer Streets Coalition. At international level, RoadPeace is a key member of the European Federation of Road TraYc Victims (FEVR), and represents FEVR on UN WorkingParties, includingon Road Safety, and other relevant internatio nal meetings. It is necessary to bear in mind that within Europe, “the socio-economic cost of road death and injury, accordingto a European Study 69 amounts to 200 billion ECU (now Euros) per year. This amount is of the same order as that of the total yearly car production in Europe.” Thus, the damage caused by cars is equivalent to their production cost—an economic monstrosity! It is also now recognised that road death and injury represent a major health epidemic,70 therefore any reduction in danger inherent to vehicle design, control and use should be tackled very urgently as the social and human benefits would be immense.

69 See FEVR website www.fevr.org 70 BMJ May 2002. 9098191035 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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For too longhave road victims and their families paid a heavy price and have seen their loved ones sacrificed in the name of a car culture and commercial propaganda built around speed, style, thrill, inflated ego, risk-taking etc, rather than responsibility. Labelling these sacrifices “accidents” is highly convenient. Cars can be lethal weapons and yet modern technology, which has ALREADY a huge capability to reduce road risk, as well as personal injury, is beingdelayed for the sake o f commercial and other vested interests. “The responsibility of car manufacturers who have designed, produced and traded products which are inherently and needlessly dangerous is in question. Furthermore, they have encouraged a demand for such high powered and fast vehicles through massive advertising and a continuous flow of misinformation on the risks inherent in their products.”71 Long-term failure of most European governments to enforce road traYc laws, improve the situation of road traYc victims within the criminal justice system and to provide the necessary assistance to victims has resulted in the formation of victim advocacy organisations. The European Federation of Road TraYc Victims (FEVR) is an umbrella organisation of 35 road victim associations and is the largest international organisation of road traYc victims in the world. It has consultative status with the Economic and Social Council of the United Nations (NGO) and is also consultant to the European Parliament and the European Commission. The importance of road victim advocacy NGOs is increasingly valued and acknowledged. Recently (18 and 19 September 2003) the World Health Organisation (WHO) invited six member organisations of FEVR, includingRoadPeace for the UK, to a consultation meetingwith the aim to “d evelop areas of collaboration with road traYc injury advocacy organisations, and build eVective partnerships”. If the UK Government is serious about tacklingroad death and injury in orde r to reduce the scale, then it should also work with advocacy NGOs, includingRoadPeace, the only UK ch arity workingon behalf of all road traYc victims. So far RoadPeace has been refused membership on the Department for Transport’s Road Safety Advisory Panel, on which the MMT and many other bodies representingthe mot or industry and its interests have a place as a matter of course. Road traYc victims have been throughout excluded from the provisions of the Victims’ Charter (1990 to date) and continue to be excluded from the provisions of the Home ...OYce’s new Code for Victims. Consultation after consultation about the law in respect of road death and injury has furnished no improvements so far. RoadPeace’s applications for fundingfor their vital work for road tra Yc victims over 12 years have been systematically refused by all relevant government departments, includingthe Department of Health (Section 64). Road traYc victims are an inalienable part of traYc and the transport industry and must therefore be included in relevant discussions and decisions, not excluded.

How Much Safer can Cars be Made for Drivers and Pedestrians? In-car passive safety measures (seat belts, air bags, ABS ...)have been developed, alongwith an increase in acceleration power and maximum speed limits of up to 250 km/h, an approach largely contradictory and ignoring the eVects of risk compensation. Car manufacturers know the relationship between speed and crash frequency and yet they keep producing—and are allowed to produce—vehicles, which can reach speeds well above the maximum national legal speed limits. Pedestrians account for a third of fatalities and a significant proportion of seriously injured, yet in a recent article Professor Hobbs72 (TRL), who helped to devise the crash tests, said that “car companies were well aware of possible design changes that would protect the heads and legs of pedestrians in a collision—the bumper could be lowered and made of a softer material, more capable of absorbingimpact; the bonnet could be raised at least three inches above the engine to provide some “give”, thus protectinga pedestrian’s head from strikingan immovable lump of solid metal; the joint between the bonne t and wind could also be weakened.” He also added “the manufacturers don’t want any constraints that may aVect their styling.” In the same article a spokesman for BMW said: “the most pedestrian-friendly car would probably turn out to be a pretty horrible lookingthing ...”Inthesame vein, a Toyota spokesman said that poor road design was to blame for many pedestrian casualties, adding: “Pedestrian protection is very important to us, but we also need to educate pedestrians not to be in the road in the first place.” This kind of simplistic, materialistic and “passingthe buck” attitude is unacceptable. The government should bear in mind that the death rate from road traYc injuries for children in the UK is twice the European average and that most of these occur in urban areas. Also, a major deterioration in children’s quality of life has been the increasingloss of their independe nt mobility with many harmful consequences on their health and development. Furthermore, improvingtr aYc safety for children and youngpeople is in keepingwith the UN Convention on the Rightsof the Child.

71 see Professor Got www.securite-routiere.org 72 “Cars makers have blind spot for pedestrians by B Webster, Times 27/06/03. 9098191035 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The introduction of Intelligent Speed Adaptation (ISA) could limit the maximum speed of vehicles to the correct limit for the location. This technology is available now and could bringa variety of benefits. In a recent PACTS Westminster lecture, Professor Allsop argued that if risk on the road was the same as oV the road, road deaths would be as low as 500. And the Transport Select Committee had stated that if the Government got serious about speed management, then road deaths could be reduced to 1,000 annually.

Recommendations The UK Government should — make bull bars illegal and make their removal mandatory retrospectively; — provide incentives for the purchase of cars with speed electronically limited to 70 mph; — make the fittingof darkened windows illegal; — inform the public about the benefits of ISA in terms of crash reduction and congestion; — inform the public of the real road casualty figures (ie under-reporting) and real economic and social costs; — introduce ISA and provide incentives for individuals to fit ISA on all existingvehicles, and make it a requirement for all driver trainingschools and vehicles used for busi ness purposes, including by all Government departments; and — fit cars with black boxes, which could provide information for crash investigations and monitor speed limit compliance of vehicles driven in the course of work. All government and local authorities’ vehicles should be fitted with such devices which have the potential to influence driver behaviour and cut down on insurance premiums (PACTS 1999).

What Influence Does the UK Government have in a Global Market? Foreign governments had no hesitation in banning British products in the wake of the BSE scandal. They acted on the principle of “precaution” (care) in order to protect their own population from some unforeseen mass health epidemic. Yet we have currently a health epidemic in the UK with about 3,600 people killed and between 110,000—500,000 (police/hospital data) injured every year and the responsibility of car manufacturers who have designed, produced and traded high speed vehicles and therefore dangerous products is not called into question. As highlighted previously, reducingroad dangerdoes not make business sense for the motor industry. The UK government could announce to its partners its decision to require that within a year all newly registered motor vehicles on its territory comply with the top national speed limit (currently 70 mph) and be fitted with black boxes. Such a decision, even taken unilaterally, is unlikely to be condemned given the benefits in terms of road safety. In fact, it would be highly regarded by many road safety organisations and NGOs across Europe and would oblige other governments to face their responsibilities. The UK Government is therefore urged to resist the pressure of vested interests and seriously take into account the human, social and health costs on the UK population and to consider the implications of the Human Rights Act. Article 2 states that “Everyone’s right to life shall be protected by law.” This means that crashes involvingloss of life or quality of life must be fully investigate d—to find how they occurred and to prevent future tragedies and that laws are in place to prevent needless and preventable deaths and life changing injuries.

Recommendations The government should — provide support for a directive makingelectronic limiters of maximum sp eeds compulsory on all cars in the EU, further to Directive 2002/85/EC; — ban the sale and use of cars exceedingthe maximum national legalspeed; — ensure compliance of road safety measures with the Human Rights Act; — work with Sweden to bringin an EU directive makingISA mandatory by 2010; a nd — ensure that the UK has a law which treats road death and injury caused through law breaking and negligence as the central issue of any charge, instead of, as at present, as merely the unfortunate by-product of a piece of driving(Section 3—Drivingwithout due care and at tention is brought in the majority of culpable road deaths and only a few injuries—most are not followed by any criminal prosecution despite merit—the deaths and injuries caused are not part of the charge, procedures or sentence, and the fact of death or injury is not even recorded on Magistrates Court records). 9098191035 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Can Technology Prevent Uninsured Driving? Possibly through the use of smart card ignition systems? October 2003

Memorandum by Cyclists’ Public AVairs Group (CAR 35)

CARS OF THE FUTURE

Introduction 1. CPAG, the Cyclists’ Public AVairs Group is pleased to have the opportunity to respond to this inquiry on behalf of the seven cyclingorganisationswhich comprise its membershi p: — The Association of Cycle Traders (ACT); — The Bicycle Association (BA, the association of UK cycle manufacturers); — British Cycling(the UK’s sports cyclinggoverningbody); — The Cycle Campaign Network (CCN, the network of local cycle campaigning groups); — CTC, the national cyclists’ organization; — The London CyclingCampaign(LCC); — Sustrans (the charity behind the National Cycle Network and other sustainable transport projects). 2. Cyclingis a mode of transport which could play a substantial role in addr essingthe problems associated with risingcar use and car dependency. At the same time, cyclis ts are in many ways the victims of those problems, notably danger, pollution and the sheer physical space cars occupy when movingor when parked. 3. Hence there are several reasons why cyclists would benefit from measures to make cars: — Smaller and lighter; — Greener; — Communally owned; — Speed limited; and — Designed to protect vulnerable road users in collisions.

Smaller,Lighter Cars 4. Large cars can be dangerous and intimidating to cyclists. The greater the lane width they occupy, the more likely they are to overtake leavingonly a small amount of passingspac e. At the same time, they are also heavier, and injuries suVered by cyclists (or other vulnerable road users) in collision with heavy cars are far more likely to be serious or fatal. Large cars when parked force cyclists further out into the road in order to pass them; this too can be intimidatingand can place cyclists at risk.

Greener Cars A “green” car would: — Be fuelled by sustainably sourced energy (eg hydrogen derived from hydro-electric or other renewable electricity—by comparison, hydrogen derived from oil extraction is only marginally more sustainable than petrol); — Be energy eYcient (this in part relates to the weight of the car—see above); — Be quiet; — Emit minimal pollutant and greenhouse gas emissions. 5. The most direct benefit to cyclists from greener cars would be the reduction in pollutant emissions. Nevertheless, as citizens, we all stand to gain from the health and quality of life benefits of cleaner air and quieter streets. We also have a responsibility to contribute to minimisingour society’s use of non-renewable energy, and the emission of greenhouse gases. Most cyclists are proud to be playingtheir part in helpingto achieve these objectives. Greener cars are a valuable contribution to the same objective. 6. Stronger tax and regulatory incentives should be adopted to encourage a shift towards smaller, sustainably fuelled, fuel-eYcient and clean emitting cars, and to put in place safeguards against the spread of very large military-style cars now increasingly prevalent in the USA. 9098191036 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Communally Owned Cars 7. A shift towards usingCar Clubs (ie local fleets of communally owned cars) rather than private car ownership would enable many people to save themselves the large fixed costs of car ownership, whilst at the same time creatingincentives to travel more often by sustainable modes. C ar Clubs recoup the (shared, and thus reduced) costs of purchasing their car fleets by charging higher mileage rates than would be paid by someone who had already paid the fixed costs of owninga car. This shift from “ fixed” to “variable” costs means that those who sometimes need access to a car but who could make many of their journeys by other means are able to save on the fixed costs, but the higher variable costs also makes it more likely that, for a given trip, it will be preferable to travel by walking, cycling or public transport. 8. In short, it is a structure which helps people meet their need for access to cars, whilst savingthem money, and at the same time achievingthe all the social, economic and envir onmental benefits of reduced car use. Moreover, the Swiss and German experience suggests that each car in a Car Club removes five or six privately owned cars from the roads. Hence there is potential for large savings in the space occupied by parked (as well as moving) cars, thereby reducing congestion and freeing up space in residential areas for uses of street-space which contribute more to the quality of life in residential and town centre areas.

Speed-limited Cars 9. Speedingis prominent amongthe ways in which drivers kill, and endanger the lives of, other road users. Police records suggest that speed is a factor in at least one-third of all road deaths73, ie more than three a day on average. As of May 2003, there were 410 makes of vehicle available on the UK market which have top speeds in excess of 140 mph. Vehicles capable of this degree of speed limit exceedence should not be permitted on Britain’s roads. 10. The Government should also support a programme to equip the UK vehicle fleet with Intelligent Speed Adaptation technology (ISA—ie computerised speed limiters which track the vehicle’s position on the road network and enforce the relevant speed limit). The issue is more fully addressed in evidence from the Slower Speeds Initiative (of which CTC and Sustrans are both members).

“Vulnerable Road User Friendly”Cars 11. In their eVorts to protect vehicle occupants, vehicle manufacturers have largely overlooked the safety of other road users. We are pleased at the Government’s recent announcement that all new models of car or van under 2.5 tonnes will be subject to technical tests to indicate how they would interact with a pedestrian in an accident. The design of vehicles should be required to take greater account of their impact on VRUs when collisions occur. In particular, bullbars should be made illegal. October 2003

Memorandum by Ricardo UK Ltd (CAR 36)

CARS OF THE FUTURE Clean Vehicle Technology

What fuels will be used to drive the vehicles of the future? The choice of future transport fuel is driven by the wider issue of energy policy, both for the UK and in the wider European and Global arena. Key drivers for change are:

— Reduction of emissions, in particular greenhouse gases such as CO2 (there is a view that the regulation of other emissions, such as Hydrocarbons, Carbon Monoxide, NOx and Particulates, while important, will reach a point of diminishingreturn within the next d ecade—it appears unlikely that a major change of transport fuel would be justified to reduce emission of these substances). — Reduction of the use of the earth’s resources (crude oil) and any linked environmental damage. — Security of energy supply, ie reduced dependence on resources from politically unstable regions. The Ricardo view is that liquid fuels with properties similar to today’s Petrol and Diesel fuels will continue to be favored for the majority of road transport for at least 20-30 years, although these fuels will contain an increasingproportion of renewably or more sustainably sourced content ( includingbio-fuels and gas-to- liquid fuels). Primary reasons for continuingto use liquid fuels are: — Technology to store alternatives, particularly gaseous fuels or electricity, on the vehicle remain inadequate to make the transition to mainstream products.

73 DETR. Tomorrow’s roads: safer for everyone. The Stationary OYce, 2000 (see www.dft.gov.uk/stellent/groups/dft—rdsafety/ documents/page/dft—rdsafety—504644.hcsp). 9098191037 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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— Infrastructure for alternatives is immature and would require major investment to become adequate. — Many alternatives are not suYciently attractive on a “well to wheel” basis to justify a costly change-over, at least until the renewable energy sources from which they are derived become widely available. — The cost of many alternatives remains unacceptable unless they are oVered to the user at much lower levels of taxation than today’s fuels. The Ricardo view is that: — New technology will be introduced on a step-wise, evolutionary basis which allows existingliquid fuels to be used more eYciently, oVeringa more immediate benefit in terms of the key drivers for change above. This approach will be the main-stay of technical innovation until 2020–30. — This evolution will start to embrace new fuels once they are available on a genuinely beneficial basis, perhaps from 2020–30. — These new fuels will not be abundantly available without cost or environmental penalty, so the eYciency-improving technologies previously developed will be highly applicable to the new fuels. The “final” choice of long-term transport fuel is not clear. It is often postulated as Hydrogen, although other solutions have been proposed, including: — Crude-derived fuels, combined with “sequestering” of atmospheric carbon (removal of carbon emitted by combustion—as CO2—and its indefinite storage underground). — Liquid fuels synthesized from renewable sources or natural gas, with similar properties to today’s fuels. — Natural Gas used in its raw form, stored compressed or as a liquid. — Methanol made from Natural Gas. — Hydrogen, made from Natural Gas, Renewable or Nuclear energy. — Electricity, stored in batteries (with greater eVectiveness than today’s technology). In all of these cases it is important to distinguish between the transport fuel (which is an “energy carrier”), and the original energy source. It goes without saying that the choice of transport fuel is critically dependent on the choice of original energy source. For example, if Hydrogen is favored as a transport fuel (energy carrier) then it is only viable if suitable original energy sources exist (such as nuclear or hydro electricity). Hydrogen is often linked to the Fuel Cell as a prime mover. However: — Internal combustion engines can operate on Hydrogen (including as hybrid powertrains which challenge the Fuel Cell for eYciency), and — Fuel Cells can operate on liquid fuels, Natural Gas etc either directly or usinga reformingdevice. The supply of renewable energy in the UK is currently limited. Analysis indicates that it may not be desirable to use this renewable energy for transport (which requires it to be converted to an energy carrier that can be carried by the vehicle), when better CO2 benefit can be obtained by usingit to replace other energy supplies such as coal-fired grid electricity. There is currently an excess of some fuel types, principally LPG, from refinery processes and mineral deposit extraction. The encouragement of LPG as a niche fuel is an eYcient way to balance supply and demand, even though LPG is not seen as a universal future fuel. Likewise surplus flare-gas (natural gas present with crude oil in the ground) can be used either directly or by convertingit to liquid fuel. Further information on many of these issues are discussed in “Carbon to Hydrogen Roadmaps for Passenger Cars: A Study for the Department for Transport and the Department of Trade and Industry”, and the European Framework 5 project FURORE “R&D Technology Roadmap”, ISBN 3-200-00017-1; www.furore-network.com

To what extent will they solve environmental problems? This is a complex issue which requires detailed analysis. Some key issues include: — “Well to wheels” assessment, ie the total environmental impact of extracting, storing, distributing and usingthe fuel. For example Hydrogenbecomes much less attractive if ma de from fossil- derived fuels. — “Cradle to grave” assessment of the vehicles and fuel production processes. For example an energy eYcient vehicle is less attractive if more energy is used to make or dispose of it, and a greenhouse- free energy source is unattractive if its production harms the environment in other ways.

— Greenhouse gases—while CO2 is considered the main greenhouse gas, other substances have far greater impact per weight emitted. Thus it is possible that a new fuel or technology which produces less CO2 could actually cause greater global warming if quantities of these other substances are emitted. 9098191037 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 191

— Spin-oV impacts, includingCO 2 produced in the manufacture of a new fuel, harm to rural environments by production of bio-fuels (includingland erosion, reduct ion in forests and hedgerows, over-use of fertilizers and pesticides, impact on food chain & wildlife) or creation of new hydro-electric plants etc.

How successful have Government grant and tax break incentives been to date?

The UK Government’s pioneeringapproach to CO 2 based taxation of company cars has had a significant eVect on company car purchasingpatterns. The most noticeable e Vect has been an increase in diesel vehicle sales in this sector. If continued in a similar form, this taxation regime will also be expected to promote the use of other low CO2 technologies such as hybrid vehicles in the company car sector. Since company cars and fleet purchases account for a very large proportion of overall new car sales, and these vehicles later go on to form a large part of the second hand car market, it is expected that this tax regime will result in an improvement in average CO2 for the UK vehicle parc. Care must be taken however to ensure that the levels of taxation for vehicles with poor CO2 performance do not result in company car buyers “optingout” of company car schemes, and usingthe cash alternative to purc hase the same vehicle privately, where the incentives are diVerent.

For private buyers, variation in vehicle excise duty (VED) accordingto CO 2 emissions provides a relatively smaller incentive to select low CO2 vehicles, and hence the financial drivers for change in purchasingpattern in this sector are mostly associated with cost savings as a result of improved fuel economy. Purchase grants through schemes such as Powershift have had greatest impact in the take-up of LPG vehicles, however this technology accounts for only a very small number of vehicles (1% of the passenger car fleet), and only one third of conversions are grant funded—indicating perhaps that it is fuel price rather than the purchase grant which is the true driver in this market. Ricardo have commented further on this in our response to the Government Consultation on Road Fuel Gases.

What does the Government need to do to make it happen? The current company car tax system is provinge Vective in changing purchasing patterns in that market sector. A greater diVerential in VED for low CO2 vehicles would encourage a similar trend for private buyers.

Fuel pricing and tax regimes should be structured to equitably encourage low well-to-wheels CO2 emissions, with the combined eVects of fuel duty, VED, and taxation resultingin a constant price per kgof CO2 emitted by the vehicle. Where promisingnew technologiesare introduced for safety or environmen tal benefit, it may be that in order to achieve economies of scale, these products require some additional purchase incentive or tax break in order to build market share to the point where they become self sustaining. In these cases however, these incentives should be short term, and the products must demonstrate that they are self sustainingat the target levels of market penetration. Vehicle manufacturingis a globalindustry, and products must have appeal across a broad market in order to be commercially feasible—hence it is essential that the UK government acts in harmony with Europe in putting in place fiscal regimes which encourage the same trends across the whole European market. New products and technologies will only be brought to market so long as these technologies are commercially acceptable to manufacturers and consumers. Legislation can usefully be used to encourage progress, but must be in line with what is commercially and technically feasible. To allow manufacturers and investors the opportunity to invest in new technologies, and then to recover that investment cost, it is essential that Government policy has clearly stated goals, and remains stable over a period of at least 7–10 years. The impact of policy reversal in this area goes beyond the direct financial losses on the manufacturers involved, and erodes confidence in manufacturers and investors in investingin technologies for the future. To maintain progress in safety and environmental performance, it is essential that the technologies required by the products of tomorrow are available for adoption when they become commercially feasible. To do this, investment must be made in both longterm and medium term technol ogy research and development. Decisions on which technologies should be funded should be made based on a consolidated roadmap of the requirements of consumers and the industry—the Foresight Vehicle Technology Roadmap is a good example of this, however this roadmap must be regularly updated in line with changing market drivers. This type of roadmap approach can allow a joined up method of R!D, fundingdevelopment throughacademic research, collaborative research, and industrial development to deliver products close to the marketplace— where they can begin delivering benefits towards policy goals. 9098191037 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The overall level of R!D investment in the automotive industry should be brought in line with that of other competitor countries. The process for tenderingfor governmentfun ded R!D should be streamlined in order to reduce the cost of application, and to reduce significantly the time from call to grant award. Government should consider the fundingof fewer, largerR !D programs, which develop “winning” technologies, and extending the scope of these projects closer to the marketplace, and with the involvement of those organizations in a position to deliver product to the market.

Vehicle Design and Control

How much safer can cars be made for drivers and pedestrians? Market data shows that a significant customer requirement in new cars is increased safety and protection. Despite safety beinga largefeature of European research based on society needs, the customer preference relates to occupant safety and there is no current evidence that drivers are selectingvehicles because they are safe for pedestrians and other road users. Thus the focus to introduce safety features into vehicles is being led by market and customer demand and separately by legislation. The European Commission is reviewinglegislationrequirements and under takingresearch to introduce industry standards to support their vision to reduce accidents by 50% from 2000 to 2010. Some legislation is in the process of beingintroduced followingtest and measurement targe ts defined from European research programmes. An example is the introduction of impact performance criteria from 2004 for the front structural design of vehicles. The primary legislative focus has been on defining liability responsibility accordingto who (or what) is in control of the vehicle. The vehicle manufacturers are currently avoidingany approach where electronics takes control away from the driver due to the question of liability in the event of an accident. As such, vehicle manufacturers are respondingto customer safety preferences primarily u singpassive safety technology(eg airbags) although some active safety devices (tyre pressure monitoring, adaptive cruise control, reverse parkingaids) are becomingmore common. The introduction of new features s uch as telematics and navigation aids are being promoted as driver assistance systems, although these features also have a role for integrated safety, the term applied to the convergence of passive and active safety systems to prevent and avoid collisions and minimise damage in the event of a collision. Technology development for active safety in the area of sensors to monitor the external environment around the vehicle is demonstratinghow electronic systems could detect v arious classes of road user in order to take preventative action. The technology focus is targeted at the largest cause of road injuries in Europe: 12% of the 1.2 million accidents are between vehicles and pedestrians and 25% of the 1.6 million injuries are to pedestrians, cyclists and motorcyclists [ref: European “Protector” programme]. The current development status is that these sensor technologies (microwave radar, laser, computer vision) need further performance improvement to be fully user acceptable. The critical aspect currently is that the range of false detection of pedestrians is too high—vehicle manufacturers need a very high level of confidence to introduce this capability if they are not to be subject to liability claims due to missed detection or excessive driver distraction. Optimum performance is likely to be achieved by a fusion of the sensor technologies, however this has not yet been realised. There are significant barriers to introduction beyond the base sensor technology, such as cost, detection coverage under all circumstances of road infrastructure as well as the electronic architecture and performance on the base vehicle to support the range of sensors and driver interface needs.

Is the human driver better than the computer—where do we draw the line? This is a very subjective question to which the immediate response is a conditional yes—for now. Technology is advancing such that it is possible to predict that a computer may, in the next 20 years provide a more socially acceptable level of vehicle control than a human driver. However a computer will provide a standardized approach to vehicle control that would lack the skill of the very advanced human driver. The question will then become one of “can the computer cope with every eventuality and operate in all areas of road infrastructure and vehicle external environment?” If the answer is that computers are able to provide more predictable control performance then the legal situation on liability in the event of an accident will need to be resolved and clarified. This will become a very complex issue of law. Computer driven systems are certainly capable of followingalgorithmsre liably and repeatably, however these algorithms remain valid only for the specific circumstances for which they are defined, and whilst suYcient information is available to the vehicle on which to base decisions. Once outside of these parameters, a human is better at assimilatingunusual conditions and maki ngan informed decision. Even within defined operatingparameters, it is possible for a highlytrain ed driver to outperform a computer system by takingaccount of information not available to the comp uter—an example of this is that a highly trained driver can achieve shorter stopping distances than an ABS brakingsystem, althoughfor poor or average drivers, ABS results in significantly shorter stopping distances and greater control under brakingThe net e Vect of this should be an overall reduction in accidents. 9098191037 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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As the UK population demographic changes, the number of older drivers is likely to increase. Some of these drivers may have reduced perception and motor skills which may contribute to accidents. If computer systems can reduce or eliminate these eVects, safety and accessibility to personal transport will improve.

Can e-safety initiatives prevent accidents or lessen their impacts? The current number of e-safety initiatives are promisingmany benefits tha t in the shorter term will lessen the impact of accidents and in the longer term could prevent them. Existing passive safety measures that help to reduce the impact of accidents are beingsupported by sensors that p rovide a collision warningand pre-arm the airbag and seat-belt trigger mechanisms to optimise deployment timingrelative to impact. Advanced Driver Assistance Systems in Europe (ADASE) is an EC IST funded thematic network that will help to introduce and implement a number of active e-safety systems by harmonisingand communicatingactive safety functions, identifyingtechnologicalneed s and focussingon essentials and preparingarchitectures, roadmaps and standards. There are about 30 projects organised in the ADASE cluster, doing research for driver assistance systems and related activities. They represent a project value in excess of about ƒ100 million. More information can be found at www.adase2.net. Examples of some of the advanced driver assistance measures to provide warningof potential impact duringvehicle manoeuvres are: — Pre-crash warning — Lane keepingand lane changemanoeuvres — Blind spot monitoring — Automatic distance control — Collision avoidance At present the significant majority of e-safety initiatives are supportingdriver assistance and only providingwarningalerts. Drive-by-wire (DbW) vehicle control technolo gy is a pre-requisite in order to achieve autonomous vehicle control and implement automatic collision avoidance. The extent to which DbW systems will be introduced is heavily dependent on driver acceptance, system safety and cost (for OEM and thus for the driver) and on the platform size (is it viable?). Yet development and introduction of systems is continuingat a significantrate. Brake-by-wire and Throttle-by-wire a re both in production and the first Steer-by-wire platforms (with mechanical back-up aids) are anticipated as early as 2004–05. Integration between sub-systems for full dynamic vehicle control remains limited and a robust safety case for a fully autonomous production vehicle control system needs to be developed. There is currently no legislation enabling DbW technology—in fact legislation is preventing the introduction of true steer-by-wire— therefore DbW introduction will be governed by cost benefits (and styling in the case of SbW) to the OEM and by feature content for the driver.

Is there a trend to bigger and heavier cars? Detailed data on sales trends for the UK and Europe are available from many sources, includingthe Society of Motor Manufacturers and Traders (SMMT) and the European car manufacturers association ACEA. The overall trends from these data are as follows: — Individual car models are tending to get bigger at each model upgrade. — Manufacturers are introducing smaller models in range to fill the gap as their smaller cars get larger. — Increasingly, vehicle feature content is improving, resulting in additional hardware (and weight), counteractingweightreduction in existingsystems. — User requirements of vehicles remain similar—hence the trend for cars to increase in size has resulted in a counter-trend towards the purchase of smaller models. — The net eVect of this has been a gradual increase in average vehicle weight. — The negative impact on fuel consumption associated with the use of heavier cars can be significantly mitigated by the use of hybrid technologies to regenerate brakingenergywithin the vehicle—this is why many US manufacturers are lookingto commercialise hy brid SUVs. — The other drivers towards heavier cars are comfort and safety—although whether the safety benefit of heavier cars (to the occupant) are real or perceived is yet to be conclusively established.

What influence does the UK Government have in a global car market? Of the 60 million vehicles sold globally in 2002, 17.4 million were sold in Western Europe whilst the UK market accounted for 1.8 million units. The top 10 vehicle manufacturers produce about 75% of global sales. Economies of scale have driven the automotive industry to consolidate manufacturingcapability and to increase production volumes of a smaller number of vehicle “platforms” and powertrains that can be customised to specific brand identities. To maximise economies of scale, the automotive manufacturers will 9098191037 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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continue to push for regional and even global harmonisation of regulation and incentives. It is likely that aggressive UK regulation in isolation from the rest of Europe would severely restrict consumer choice as an increasingnumber of vehicles would become uneconomic for manufacture gi ven the volume of sales in the UK market. Incentives to encourage specific environmental or safety attributes would also need to be significant to justify investment by the vehicle manufacturers for the limited number of vehicles that would be sold in the UK market alone. The most eVective policy for UK Government would be to incentivise incremental (not revolutionary) improvements in environmental or safety features whilst simultaneously encouraging other European countries to adopt similar measures.

Will technology be brought in through commercial vehicles first? In some instances the commercial vehicle oVers a better business-case for new technology introduction. In general, commercial vehicle operators are highly driven by cost—purchase cost (use of capital), maintenance costs (includingcost of down-time), fuel costs etc. This is i n contrast to the very fashion-driven private car market, which is increasingly driven by brand image, style and other emotive factors. Private buyers are however conscious of some operatingcosts includingfuel and ta xation (Refer to DfT study conducted to support the CO2 labellingproposal—Leslie Packer, TET, DfT). Private buyers are highly interested in their own safety (four Euro NCAP stars beingregardedby some as a minimum) but much less so in that of others (Pedestrian safety is mentioned far less in the specialist press). Commercial vehicles are more likely to be early adopters of: — Technology which assists with logistics, such as GPS/map and telematics (already commonplace in many fleets). — Technology which oVers cost savings (fuel, maintenance). — Technology which addresses workplace safety issues (sensors for HGV reversingetc). — For operators who deal with the public, technology which presents an environmental image. — Technology mandated by law because of the greater danger presented by a large commercial vehicle, for example speed limiting, collision warning and smart lane following. Some of these technologies, for example telematics and active safety, may read across to passenger cars. Others may not—for example devices which check for compliance with the law (smart tachographs) may be considered acceptable for a truck or bus driver who is paid to do the job. But may be considered an infringement of liberties by a private motorist who is paying for their car.

Vehicle Use

If drivers paid for road use through a national satellite location system, what else could the technology be used for, and what are the implications? Takingas a pre-condition that at some time in the future all drivers on UK ro ads includingvisitors from overseas, had access to the appropriate satellite location system to act as a road toll scheme (a not inconsiderable challenge in itself), a number of additional uses could be envisaged of the available data. The accuracy of these systems enables a number of possibilities. One seemingly simple extension would be to use the information to identify traYc violations on motorways and urban roads. This could include speeding, illegal parking, drivingwhere prohibited (egbus lanes, wrongway up one-way street). The technology could also monitor, and potentially report on, behaviours which are not necessarily illegal but certain parties may find relevant. For example a history of corneringat high speeds could be used by the police and courts when investigating an accident, or by an insurance company in re-assessingan individual driver’s premium. Such “bigbrother” capability is already attractingthe attention of the p ress. Key Issues here would be: — The very strongpublic reaction to such systems beinginstalled in every c ar. — Incompatibility between current systems of law enforcement (which detect some more serious violations only) and this system (which can detect every breach or mistake); requiringan acceptance in law that “nobody is perfect” and perhaps definition of an acceptable level of occasional breach — The question of who owns the data transmitted and what agencies have legitimate use of the data may require changes to the law and clash with other fundamental rights of freedom or privacy. For example, access to details of where the car has been could be considered a gross invasion of privacy. Such systems could indeed cause resentment amongst “fairly law abiding” users whilst encouraging the worst and most dangerous oVenders to avoid detection via other means such as tamperingwith the equipment and identity theft. This could ultimately result in no discernable benefits to the road going public but a definite resentment at the additional intrusion they felt. In order to promote such a system to drivers, it could be helpful to: 9098191037 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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— Clearly address the “bigbrother” concerns in a way which recognisesthe r ight to privacy and the need to punish the worst traYcoVenders; and continues to make vehicle ownership attractive (thus protectingthe interests of the industry in the UK, which is a very major con tributor to the economy). — Consider ways in which the technology gives users positively perceived benefits. Such benefits could include: — Networkingof the information used for road tolling(essentially GPS pos ition plus map data) into other vehicle systems, where it can be used to improve active safety and powertrain eYciency. — Targeted dynamic navigation and traYc information—essentially, usinga smart infrastructure to calculate the optimum route for each car to mutual benefit. This is heavily dependent on the scheme implemented for toll charging, since this would rely on a continuous rather than a periodic update which increases network traYc and system cost. There are also the issue of priority in the system—if individuals perceive that they are beingrouted into heavier tr aYc in order to clear routes for high priority vehicles, they will stop using it and possibly complain of infringement of rights (it has been suggested that a legal issue exists in this respect). — Increased speed limits, where driver experience, road/weather conditions and alertness allowed for higher speed travel above the current limits for dual carriageways or motorways. — Allowingdata to be used for improvements to planningof road multi-modal transport systems. — Allowingusers to logand access the data and allow calculation of busines s/personal miles and general cost of ownership issues. However, in all cases the cost/benefit justification of usingtechnologyto improve current systems will be hard to show in a positive manner, particularly when consideringthe civil liberties issues raised.

To what extent will car-share clubs and leasing replace buying a car? This area is outside the core expertise of Ricardo, and we therefore oVer no comment in this matter.

Can technology prevent uninsured driving? At best technology can only help reduce the levels of uninsured driving rather than prevent it, but the issues to consider in implementingsuch a scheme are considerable. Key iss ues are: — Should insurance apply to the car or the driver? It is likely that the road tollingdevice will be fitted permanently to the vehicle, regardless of driver. Individual identity devices (“keys”) can include insurance details of the driver, but these can be passed from person to person, stolen, and possibly copied. — How can technology be added that makes it suitable to all makes and models, past present and future? — If the cost of insurance now is a deterrent to some people obtainingcover, how could premiums be kept to even similar levels when a new level of technology infrastructure, administration and enforcement would need to be paid for? Addingburden on to the existinglaw a bidingmajority will be unpopular. Data from the current camera based systems in London show that persistent oVenders whose data with the DVLA is out of date or from a cloned car will continue to avoid penalty unless stopped directly by the police. At best, even this will only result in a fine (which may still go unpaid) without necessarily addressing the issue of uninsured driving. For the infrastructure and development costs needed for a suitable system plus the loss of public confidence that would emanate from the introduction, some may argue that the money would be better spent on intelligent and targeted enforcement of the current laws. October 2003

Memorandum by Environmental Transport Association (CAR 37)

Cars of the Future

Introduction 1. The ETA welcomes the opportunity to contribute to this debate. We await with interest the views of others and to the final report from your committee. The ETA has considered these matters throughout its history and we believe that the changes in automotive design cannot be separated from the social and technological context. The average size of vehicle, its weight, its shape, the fuel it uses are fashioned by the market as adjusted by regulation and taxation. One only has to compare the vehicle parc of Japan to that of America to realise the impact government legislation has on the size and fuel consumption of vehicles. 9098191038 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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2. The nature of a vehicle has to be related to the network in which it operates. If we change the nature of the road network the nature of the vehicle within it will change too. 3. In our response we will address the questions the committee raises. We have chosen to concentrate on developments that might occur in the next 10 years rather than postulate a scenario for 2050.

Our Main Recommendations 4. The ETA believes that the followingis not only technologicallyfeasibl e, it is sound policy and the politics can be made to work. Within 10 years’ time the government should have: — introduced intelligent speed adaptation (ISA) using mobile telephone type technology. The system, should allow drivers to “kick through” the limiter. This will be more acceptable than total speed control and therefore much easier to introduce. The government should oVer discounts on vehicle excise duty (VED) for vehicles with ISA. — introduced “black box” event recordingfor crash diagnosis.This would e nable crash investigators to apportion blame more clearly and help develop new ways to reduce crashes. — separated the “traYc domain” from the “public domain”. With most roads part of the “public domain” walkers, cyclists and motorists would share the streets far more safely. Those roads in the “traYc domain” would provide an eYcient inter-urban network. — introduced nationwide road user charging(RUC)usingmobile telephone t ype technology. Charging users of the system the truest costs directly as and when they are incurred would be seen to be fairer and politically easier to manage. — abolished fuel tax and VED. This would have been phased out as the RUC and carbon tax were introduced. Taxes on less environmentally damaging vehicles and fuels would have been phased out earlier. These changes, even the concept of “traYc domain” and “public domain”, are relatively simple, and easily introduced into Britain. The changes required do not need approval from the European government. They mainly relate to in-vehicle telematics systems, pricingincentives and p olicies on car use, and are developed below. 5. Consumer Choice. The ETA believes that encouraging an informed consumer choice is a manifestly good policy. The ETA makes the assumption that individuals endeavour to make the best decision they can for themselves based on the information they have to hand. The purchase of a private car and its use is based on such a decision process. However, people do not necessarily have all the information to hand to make an informed decision. Even if they did nearly everyone would put their own interests above those of others. Sometimes a person will make a choice which is not in the interest of society as a whole. It is the task of government to take the societal view. Most individual consumers ignore the externalities—government must not. 6. There are essentially five areas relatingto road vehicles which governm ent cannot leave to the market alone: — The provision of public highways; — The eYcient use of the highway; — The safety of those using the highway—especially for danger caused to third parties; — Local pollution; and — Global climate change. At present, governments from the European level through to local government use a variety of regulation, grants and taxes to influence individual decisions when buying or using a vehicle. It is the view of the ETA that the overall policy is incoherent, ineYcient and ineVective. The task for government is to clarify its aspirations and use policy tools which will directly ensure we meet those aspirations. 7. Future design. In our view, the biggest change in automotive design over the next 10 years will be the spread of digital technology throughout the vehicle for the purposes of general management, entertainment and communication. Like “fly by wire” “drive by wire” is already possible. There would be no direct link between the pedals, levers and switches and the devices they operate. This not only reduces costs but allows a right hand drive vehicle to be converted into a left-hand drive vehicle with ease. 8. More Safety. Vehicles will have much more intelligence to aid the driver in manoeuveringtheir vehicles. How far this will develop depends on who is perceived to be responsible for crashes—the driver or the intelligent vehicle and therefore the manufacturer (fear of litigation). 9. Size and Weight. Vehicles are getting heavier, not only are new larger models oVered but over the last decade each model is increasingin weight.The fuel duty escalator, until S eptember 2000, had begun to change this trend but since then the upward trend has returned. 10. More eYcient engines. Engines will convert fuel into power more eYciently with fewer pollutants but without government intervention it is likely that vehicles will continue to increase in size and power use (greater acceleration and gizmos). The petrol fueled internal combustion engine will be the power source of 9098191038 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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choice in 2010 and beyond. Other fuels (like diesel) and power sources (like the fuel cell) will gradually become more prevalent as technology and costs change or more rapidly if externalities are taken into account. Governments, at all levels, have leverage on the velocity of change.

Government Action Over the Next 10 Years

Improving vehicle safety 11. The ETA recommends that, by use of incentives, government encourages the introduction of vehicle functionality which examines the driver’s fitness to drive in terms of alcohol consumption. The incentive (via VED or RUC) should be no more than the estimated cost of danger caused by drivingwhilst under the influence of drink. Such functionality already exists. 12. The ETA recommends that, by use of incentives, government encourages the introduction of vehicle functionality which examines the driver’s fitness to drive in terms of tiredness. If the vehicle believes the driver to be tired then a warningis given.If the driver persists then the ve hicle will bringitself to a standstill. It is estimated that road danger caused by tiredness has overtaken that of danger caused by drinking. The incentive (via VED or RUC) should be no more than the estimated cost of danger caused by drivingwhilst tired. Such functionality already exists. Trials on the use of such devices should begin at once. 13. Despite more passive safety beingbuilt into vehicles, they will be inv olved in crashes. We need to improve our knowledge of what happens in the moments before a crash occurs. Already a number of vehicles contain management systems that record events up to a crash—a “black box”. This would enable crash investigators to apportion blame more clearly and help develop new ways to reduce crashes. The ETA recommends that, by use of incentives, government encourages the introduction of “black boxes” to all vehicles. The incentive (via VED or RUC) should be no more than the estimated cost of all accidents, crashes and road danger. Construction and use regulations could be changed in due course. 14. Size, weight, acceleration and top speed are known factors for causing road danger—even though no accident has occurred. Walkers and cyclists perceive larger/faster vehicles to be of greater threat than smaller/slower vehicles and so their travel is impacted by the likelihood of their believingthat they would meet a large vehicle on their journey. The ETA recommends that, by use of incentives, government encourages slower and lighter vehicles. The incentive should be no more than the estimated cost of stifling the potential of walkers and cyclists. Although this can be achieved via the use of VED it would be cumbersome. A 44 ton truck travellingalonga motorway has insignificantim pact on a cyclist whereas a 44 ton truck travellingdown a highstreet would do so. The RUC could take such s ubtleties into account easily. 15. As with any machine, vehicles must be operated within health and safety limits. Drivinga vehicle too fast is a known contributor to road danger. Any machine tool would be limited to acceptable safety limits, indeed limitingcoaches and lorries has already begun.The ETA recommends that, by use of incentives, government encourages the introduction of vehicle functionality which limits the vehicle speed to that of the speed limit. The incentive (via VED or RUC) should be no more than the estimated cost of danger caused by speeding. However, as most road danger is caused in urban areas where the speed limit is lower than 70 mph the ETA recommends the use of intelligent speed adaptation functionality. Much of the technology required is parallel with that required for RUC and with the introduction of “drive by wire” the costs would be minimal. The ETA recommends that ISA is introduced on a “kick through” basis at first. Trials of ISA have been ongoing in Sweden for over 10 years and have been deemed a success. 16. The cost of introducingISA is split into two parts: the incorporation o f the ISA functionality in the vehicle; and, the digitising of the road network speed limit data. The cost of ISA functionality in a new car ranges from the insignificant in executive cars to the still very inexpensive in basic cars. Retrofitted ISA functionally is a diVerent matter but if government signalled future tax changes to encourage such fitment, the cost would dramatically reduce. The units used in the first British trials cost over £2,000 each but then there were only two of them in the country. A production run of two million units a year will reduce the cost to that of a mobile telephone. 17. The digitising of the speed limit data has three parts: the collection and entry of the speed data, the construction of a database and the dissemination of the information. The major cost of these three is the collection and enteringof data. The British governmentwould be responsi ble for the data on trunk roads so that that cost would be relatively trivial. The vast majority of roads come under the purview of local highway authorities. They could choose to introduce ISA in their areas when they wish. However, it would be politically untenable for them not to introduce ISA near speed cameras. We have little doubt that public pressure would extend the area covered. 18. Although the ETA suggests that VED be phased out as the RUC is phased in, there remains potential for it be used to encourage the introduction of more benign vehicles. In recent years, the Chancellor has introduced lower bands for certain vehicles the ETA recommends that the Treasury adds higher bands to VED too. The vehicle excise duty currently raises £4.5 billion. As it is phased out, the VED for a low CO2 producingvehicle with ISA, RUC and a “black box” could quickly be reduced t o, say, five pounds and a high CO2 producingvehicle without ISA, RUC nor a “black box” could have its VED incr eased beyond £600 (the rate the Danes have for executive cars). Retrofittingof these dev ices would thereby be encouraged. 9098191038 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Improving Road Network Safety 19. There are many who say, correctly, that the highway is not just a means for conveyinglargevolumes of high speed traYc and that other uses often have, or should have, higher priority. This is especially true in our town centre and residential streets. On the other hand walkers are banned from motorways. 20. The future development of cars is, in part, determined by the nature of the road network. If there was an extensive network of special hi-tech roads then vehicles would be designed specially for them. If all streets had an enforced speed limit of five mph then vehicles would be smaller and lighter. Current and future road policy will aVect car design. We can divide our highways into three categories: motorways and expressways—where only defined motorized vehicles are allowed, main roads and streets. Cars built specially for use on motorways could take advantage of intelligent vehicle control. In such an environment shorter breaking distances and higher speeds could be maintained at greater safety levels than today. Each vehicle would not only know the intention of the vehicle ahead but of all the vehicles in the vicinity. In the highly regulated “traYc domain” of motorways vehicles would take into account all nearby vehicles. These vehicles could travel automatically. They would be heavier and have longer wheel bases for a smoother ride. This would allow a far greater throughput of vehicles in a given road space. 21. Conversely, vehicles built for the streets, or the “public domain” where signage would be minimal and the speed limit 20mph, would be much lighter, have smaller zero emission engines and concentrate on such aspects as self-parkingand doors that would not open into cyclists. In the unregulated “public domain” there would be too many non-vehicular activities takingplace for even the most sophisticated vehicle to make progress automatically. The driver would have to interact with other users of the street to proceed.

Reducing local pollution 22. Despite the introduction of more stringent controls on exhaust emissions and whilst the ETA acknowledges the progress that has been made, people are buying cars at the more pollutingend of the market. People are also not usingthe fuels which damagethe environment le ast. The ETA recommends that government encourages people, by increased use of incentives, to purchase less pollutingvehicles. The incentive (via fuel duty, carbon tax or RUC) should be no more than the estimated cost of all health hazards caused. Construction and use regulations could be changed in due course in the usual way. 23. The ETA encourages the British government to invigorate the voluntary agreements between the European government and the motoring industry on vehicle CO2 production.

Paying for the Road Network 24. The concept that that VED and fuel duty pays for road buildinghas longsi nce been broken. The use by the Treasury of these taxes as part of general taxation has undermined the aspiration of an eYcient, eVective and environmentally benign road transport system. Naturally, motorists should pay for the construction and maintenance of roads along with at least mitigating against damage to the environment but they should pay no more than that. Until recently we did not have an eYcient means of ensuringthat motorists pay the true costs for each journey they make but now we can by usingarea wide road user changing. By area wide we mean the entire country. The ETA recommends that government begins the introduction of RUC at the earliest possible date. 25. A little discussed aspect of road user charging is that as it is introduced some roads would be seen as not payingtheir way. The issue of cross subsidisation would become more pr ominent—especially in rural areas.

Climate Change 26. Changes in the vehicle car parc and the use to which they are put will aVect climate change. At present, the Treasury collects two taxes directly relatingto climate change—thec limate change levy itself and, in part, fuel duty. To deal with climate change eYciently and eVectively the ETA recommends that fuel duty be subsumed into the climate change levy. 27. At present, the climate change levy is not comprehensively applied so that it does not objectively reflect the damage we cause to the environment. For instance, although transport is a growing contributor of climate change, transport still only produces a quarter of climate change gases. The remaining three- quarters come from other sources. These three-quarters pay £0.8 billion in tax (gross) whereas the transport quarter pays £20 billion (net). That means transport pays 75 times that of other industries—per ton of climate change gas it produces. The national government has failed to address this issue—it is no wonder that motorists, who pay nearly all transport taxes, cry foul. 28. With the climate change levy extended across the board there would be no need for a separate fuel duty. On current trends transport is a growing contributor to climate change. If fuel duty was replaced by an extended climate change levy this trend might continue. However, the over-ridingaspiration is for Britain 9098191038 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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to reduce its contribution to climate change. The pressures of climate change would be felt equally across all industries. Once it is the consensus that the application of a tax is fair there is a far greater chance that it may be increased. The Treasury would therefore benefit too.

Reducing Congestion

29. Congestion is simple a manifestation of the ineYcient allocation of resources—in this case road space. Current taxes may influence our vehicle purchase or the type of fuel we use but they have an insignificant eVect on where we choose to drive. Many regulations have been introduced to reallocate road space—most notably bus lanes—but they have not been as eVective as one might hope. We now have a robust technology by which motorists can pay for the congestion they cause—an area wide RUC. Usingthe RUC, congestion may be completely eradicated, except followingcrashes, but is more likel y that a political decision is taken simply to reduce it. Most of our 370,000 km of roads would not attract congestion charge. In fact a well designed system would involve a maximum of 80,000 km. Over half of all congestion charging would be levied around London with another quarter on principal roads.

More details on Road User Charging

30. Since our inception the ETA has been Britain’s foremost organisation in favour of area wide road user charging. In the past, we recognized that road user charging would be expensive to introduce and manage but over the last decade the technology has moved so rapidly that road user charging is cheap. The ETA does not recommend the introduction of a satellite based trackingsyst em for cars (such a system is fine for commercial vehicles) instead the ETA recommends a modular system based on mobile telephone technology. In our conversations with the Secretary of State it is our impression that he believes that car- based road user charging has to follow the same methodology as the lorry based scheme. This is the only reason given to us of the delay in implementation. A satellite tracking based system is far more diYcult to introduce and maintain than a modular based system. 31. The ETA recommends that road user charging should be run by an independent authority and that its decision makingprocesses should be transparent. The authority would be responsible, inter alia, for the collection of funds from the vehicle users and for the disbursement of those funds to those institutions which build and maintain the highway and to those who are eVected (pollution or noise etc) by the vehicles using the network. 32. The road user charge should be based on three components: type of vehicle, location and time (speed of travel could be introduced later dependingon public acceptance). As a v ehicle entered a new section of the road network the motorist would usually be charged a very small fee relatingto the type of vehicle and the time. 33. Each vehicle type would have a define profile kept on record at DVLC. This profile would have attributes for: size of vehicle, unladen weight, width, length, axle damage factor, maximum speed, acceleration from zero, acceleration at 50 mph, tyre noise, and tailpipe pollutants. The technology would allow for hundreds more as the need arises. Each attribute would attract a defined charge. These attributes split into two groups—those which aVect the provision of the highway—weight and size and those which aVect locals—noise and pollutants. A vehicle which causes more road damage would pay more than those which do not. Equally vehicles which require roads and bridges of a certain strength and height would pay for such construction. If vehicles over 40 tons (or over 25 tons) had to share between them the costs of road and bridge strengthening then it is possible that only a few roads would be constructed for them, if any were at all. 34. The congestion charge would be collected as the vehicle enters each section of the highway and would be paid to the highway authority. The highway specific data required for the road user charge would be entered by the highway authority responsible for each road. Highway authorities would use the same process of data entry as that used for ISA. Indeed ISA data could be seen as a subset of road user charging data. 35. The ETA recommends that the monies raised by the road user charge would be given directly to the Highways Agency for the construction and maintenance of European and national roads, to the provinces, counties and unitaries for non-national inter-urban roads. Local governments will receive monies for the pollution caused by vehicles. Local governments will set the rates for pollution within the guidance laid down by the road user charging authority. 36. As road user charging would pay for the roads and compensate localities for the damage caused by motorists in their areas, it would be in their interest to introduce road user charging but they need not be obliged to do so. However, as funding from the national government diminished over time the need for local governments to raise funding from transport via road user charging would increase. 9098191038 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Car Clubs 37. The ETA supports the principles behind car clubs and provides services to many of them. Car clubs will come into their own once there is suYcient density of vehicle stations in a neighbourhood. October 2003

Memorandum by Royal Society for the Prevention of Accidents (CAR 38)

CARS OF THE FUTURE

1. Introduction Almost all (89% road accidents involve at least one car driver.74 Although it is not always the driver who is at fault, they are, nevertheless, the largest single common denominator in road accidents. There are many factors that aVect the way drivers use their cars, includingthe designof the vehicle itse lf. Vehicle technology is developing so quickly that the nature of driving will change dramatically over the next decade or so. It is crucial that the implications for driver education, trainingand testingare assessed, so that they keep pace with the changes in vehicle technology. A wide variety of technologies have or are being developed to enhance driver and vehicle safety. Some are beingbuilt into new vehicles while others are o Vered as aftermarket products. Broadly speaking, they fall into categories such as: — Technologies which can be used to assist safer driving, such as navigation systems which guide drivers to their destination, GPS based systems which warn of camera and crash sites, simple driver controlled over-speed indicators and other technologies which monitor safety critical aspects of driver physiology (such as whether a driver is exhibiting symptoms of tiredness). — Vehicle control technologies such as ABS, traction/yaw control, proximity sensingand various forms of cruise control as well as technologies linked to engine management systems and dual power systems. — “Black Box” technologies are now available to be fitted to vehicles (either selectively or to whole fleets) that can monitor a range of functions, log on-board data logging trackingissues such as driver hours and crash parameters and provide data about the external drivingenvironment. These developments oVer opportunities to influence driver behaviour in ways that will reduce crashes. But it is not always clear whether a particular development will prove helpful or harmful to road safety. For example, devices to warn drivers they are approachinga safety camera coul d help maintain their awareness of speed, encourage them to stay within speed limits, and warn that they are approachinga stretch of road with a speed-related accident history (this is where cameras are placed). Or they could help drivers to exceed speed limits without beingdetected by warningthem when to slow down for ca meras. Those that also incorporate an over-speed warningto alert the driver if they are exceedin ga pre-set speed seem more likely to be helpful. Satellite navigations systems are another example. Arguably they improve safety by providingadvance directions to help drivers make decision about lane changes and turns in good time. However, they could increase crash risk if the directions are provided on a small screen or in complex maps which require frequent and longglancesaway from the road. There is also a potential problem of risk compensation with drivers usingu p safety margins created by new safety technologies.

Intelligent Speed Adaptation One of the most significant developments is Intelligent Speed Adaptation. This would involve satellites communicatingwith vehicles to reduce their speed by either advisingthe d river to do so or by physically preventingthe vehicle from exceedingthe posted speed limit on the road in question. The technology can be designed to simply alert the driver to the prevailing speed limit and warn him or her to reduce their speed, or to actively control the vehicle’s speed but allowingthe driver to switch the system on or oV, or to automatically limit the vehicle’s maximum speed, whether the driver likes it or not. As well as enforcingspeed limits, a dynamic System could set lower speed li mits at dangerous spots, such as sharp bends, or in response to the prevailingconditions, such as fogor i ce.

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Trials by Leeds University and the Motor Industry Research Association (MIRA)75 have shown that the technology can successfully reduce excessive speed, particularly in areas where drivers were renowned for beingpoor at adaptingtheir speed, for example in rural villages.The pred icted levels of crash reduction are substantial.76

Predicted Accident reductions from ISA in Great Britain

Intervention Level Speed Limit System Fixed Variable Dynamic %%% Advisory 10 10 13 Driver Select 10 11 18 Mandatory 20 22 36 (59 reduction in fatal accidents)

The implementation of this technology is predicted to take almost 20 years, allowingtime for further research and development, the development of standards, for the motor industry to produce ISA vehicles and then for the number of vehicles fitted with ISA technology to become a high enough proportion of the overall vehicle parc for mandatory use to be feasible. An essential step is the production of a digital road map which would contain all of the roads in the UK and their respective speed limits. The Transport, Local Government and the Regions report of their Inquiry into Road TraYc Speed (June 2002)77 recommended that the government fund the development of a digital road map.

Employers Vehicle technology oVers excellent opportunities for employers to monitor the drivingof their staV who drive for work, identify high risk drivers or journeys and take appropriate action to reduce these risks. The HSE, with DfT, have published a Guide, “Drivingat work” 78, that states “health and safety law applies to on-the-road work activities and the risks should be eVectively managed within a health and safety system”. There are a number of products which can be used to help drivers, and fleet operators, evaluate their performance and reduce risks.

Journey Data Recorders (JDRs) These can record information about how the car is driven, from the tachograph (if fitted), speedometer, rev counter, fuel flow meter and brakes. The information can be downloaded for analysis to highlight drivers who are not drivingsafely or economically. Some systems include dashboar d warninglightsto alert the driver if they are drivingdangerouslyor uneconomically. Case studies ha ve shown that they can help to reduce both costs and incidents and improve fuel consumption.79

Accident Data Recorders (ADRs) The “black box” well known in the investigation of aircraft incidents, is now beingfitted to cars and other vehicles to find out why and how an incident happened. They record incident information such as acceleration, brakingand movement of a vehicle before and duringan accid ent. Research in the Netherlands80, which assessed whether drivers who know they are beingmonitored and who r eceive feedback from the information collected, change their driving behaviour, found a reduction in accident risk of about 20% on average, although the eVect varied considerably between the diVerent vehicle fleets. Research in Great Britain found that the use of ADR’s in nine diVerent fleets with a total of 341 vehicles81 over a 12 month period reduced incidents by 28% and costs by 40%.

75 User trials with intelligent speed limiters; Behavioural Research in Road Safety: Tenth Seminar: DTLR. 76 O Carsten, “Intelligent Speed Adaptation”, University of Leeds, Proceedings of RoSPA 67th Road Safety Congress, “Safer Driving: the Road to Success”, March 2002. 77 The Transport, Local Government and the Regions Report, “Road TraYc Speed”, June 2002. 78 HSE, “Drivingat Work”, September 2003, INDG382. 79 Driver Safety: Monitoring; Fleet Safety Forum, Brake. 80 Wouters & Bos: TraYc accident reduction by monitoringdriver behaviour with in-car data reco rders: Accident Analysis & Prevention: Vol 32, No 5. 81 Driver Safety: Monitoring; Fleet Safety Forum, Brake. 9098191039 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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More work is needed to establish consensus about what managers and drivers need to know to be able to assess/monitor drivingbehaviour. However, giventhat 20 deaths and 25 0 serious injuries occur every week in road accidents in accidents in which someone was at work at the time82, action by employers to reduce these crashes could substantially reduce death and injury on the road.

Vulnerable Road Users The crash tests developed by the European Enhanced Vehicle Safety Committee WorkingGroup 17 and the EURONCAP programme have helped to substantially improve the design of cars so they cause less severe injury to pedestrians and others. It was extremely disappointingt hat the EC decided against a Directive which would have required new cars to meet these tests. This would have saved an estimated 2,000 lives and 18,000 serious injuries annually on EU roads. Instead, the EC has approved a directive that will require by 2005 new cars to pass less stringent tests developed by the motor industry.

In-Car Child Safety An area has progressed very slowly is the introduction of the ISOfix system for child car restraints. ISOFIX is intended to make fittingchild seats into cars quick and simple. IS OFIX points are be built into cars at the point of manufacture and child seats will have ISOFIX fittingpoi nts so that they can be simply plugged into the points in the car. This is an essential development because many people find it diYcult to fit chid seats correctly, and surveys consistently find that a high proportion of child seats are not fitted securely. ISOFIX is designed to solve all these problems. At least one ISOFIX seats is already available in the UK, but it has to be tested and approved for specific models of car. The ultimate aim is that any child car seat will fit any car.

Conclusion Vehicle technology is, and always will, rapidly develop and change. It oVers many opportunities for influencingthe way we drive. Over the next two decades it seems certain that the nature of cars, and hence the nature of driving, will change fundamentally. In particular, the long term development of Intelligent Speed Adaptation oVers very significant opportunities for influencing drivers” choice and use of speed, and thereby significantly reducing deaths and injuries. However, it is crucial that the implications for driver education, driver trainingand driver testingare assessed and understood, so that trainingand testingregimescan be adapt ed to the changes, and so that drivers understand the benefits and limitations of new car technology. There is a strongcase for a comprehensive review of the potential e Vects on driver behaviour and crash risk of individual technological developments and of the change in cars overall, perhaps undertaken by a suitable centre of excellence such as Qinetiq, TRL, MIRA or a major university department. It seems that the vehicles themselves will do more and more of the drivingan d decision-making. The science fiction of the driver beinglittle more than a passengerin a fully au tomated car is on its way to becomingscience fact. October 2003

Memorandum by QinetiQ (CAR 39)

CARS OF THE FUTURE

Introduction QinetiQ is Europe’s largest R&D organisation. QinetiQ’s stake in transport technologies derived from 50 years of pioneeringmilitary science is substantial and diverse—encom passingaviation, automotive, rail, highways and marine. QinetiQ regards the Committee’s inquiry as timely and its questions as addressingimportant issues of lifestyle, environment and safety. A number of the challenges the Committee has identified can be met by available UK technologies, and these are outlined below.

82 HSE, “Drivingat Work”, September 2003, INDG 382. 9098191040 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Clean Vehicle Technology

What fuels will be used to drive the vehicles of the future? Numerous vehicle manufacturers are currently demonstratingvehicles th at illustrate the potential of fuel cell technology to be packaged within a vehicle and to provide an enjoyable drivingexperience. Many of these vehicles are part of demonstration projects such as the California fuel cell partnership, and a few manufacturers plan to lease a limited number of vehicles over the next few years to local projects and fleet operators. Both GM and Ford are on record as sayingthat fuel cells are the on ly technology today with the potential of replacingthe internal combustion engineproducinga Vordable vehicles that are comparable to today’s luxury vehicles. There are significant challenges to be overcome before fuel cell vehicles are viable for the consumer although they can find a near term application as depot based vehicles such as buses and vans. These vehicles often operate set routes within congested cities and towns where the impact of zero emissions will be felt most. Their operation will not be aVected by the limitations of a restricted fuel infrastructure, as they will regularly return to the same point for refuelling. This would help establish and maintain the automotive supply chain and develop a basic infrastructure, which would start to serve an increasingnumber of vehicles over time. QinetiQ has been workingwith a broad UK industry consortium on a fuel cell- powered 25-seat midi-bus that would be used to evaluate zero emission operations on both city and rural routes. The bus programme is aimed at producinga prototype design,not a demonstrator, based on an es tablished van chassis, that can be reproduced in the UK at considerably less cost than the Daimler Chrysler CUTE buses.

To what extent will they solve environmental problems? The leadingfuel cell candidate for vehicle applications is the proton exc hange membrane (PEM) fuel cell, which generates electricity through a chemical reaction between oxygen and hydrogen gas and produces only one by-product water with zero carbon emissions. PEM fuel cells are also suitable for man-portable applications like tools, laptops and mobile phones which will reduce the environmental impact of battery disposal. To gain the maximum benefit of the zero emissions of the fuel cell the hydrogen has to be initially produced using energy from renewable sources such as solar, wind or wave generatingsystems. These renewable sources of energy are intermittent in their production of energy and have to rely on storage mediums to meet the peeks in demand placed upon them. The most common storage method for hydrogen is gaseous compression, but this carries certain safety hazards and can add significant weight, a particular issue for portable applications. QinetiQ’s scientists are usingtheir key expertise in this area to develop improved storage methods. Part of this research is focused on the use of metal hydrides—where hydrogen is chemically bonded in the metal, a storage method that helps eliminate the safety problems associated with compressing gaseous hydrogen. In addition to research into mass hydrogen storage methods, QinetiQ is developinga novel hydrogen generator system that decomposes a hydrogen containing material by heatingit as required by the fuel cell. The unit will provide much better storage than gas cylinders or metal hydrides, though it would probably be limited to fuel cells that are used to power portable equipment like power tools and lap tops.

How successful have Government grant and tax break initiatives been to date? The introduction of zero emission fuel cell vehicles into the UK and the development of a viable and sustainable vehicle supply chain will only happen with the engagement and support of national and regional government. Support is required to develop, produce and operate depot based fuel cell vehicles like buses and vans within the UK. The Government organisations currently tasked with enablingfuel cell vehicle technology, such as the DTI, DfT, Carbon Trust and Energy Saving Trust, lack a coordinated approach to UK fuel cell vehicle development makingviable vehicle programmessuch as the fuel cell midi bus diYcult to progress.

What does the Government need to do to make it happen? Proposed bodies such as the Low Carbon Vehicle Partnership should be used to co-ordinate both national and local government support for fuel cell vehicle programmes. A strategy that supports the embryonic industry within the UK, and builds on our strongscientific base, will estab lish the UK as a niche supplier of specialist vehicles within this fast growing field. For example, schemes such as the Department for Transport’s “Ultra Low Carbon Vehicle Challenge”—but directed towards zero emission vehicles and used to develop a family of zero emission vehicles which can be produced in economic numbers within five to eight years. QinetiQ is a partner in one of five consortia selected by the DfT as winners in the Challenge. Workingwith Ricardo UK and PeugeotCitroen, QinetiQ—which supplied the b attery and supercapacitor technology—plans shortly to have a Peugeot C3 demonstrator on the road. 9098191040 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Vehicle Design and Control

How much safer can cars be made for drivers and pedestrians? Active and passive safety systems within current cars, brought about by the NCAP rankingsystem, has improved the safety of drivers and passengers at the detriment of pedestrians. Pedestrian friendly vehicles, with comparable driver and passenger safety levels, can be produced with the diligent use of structural design and advanced materials. QinetiQ is working, as part of a consortium, on low cost energy absorbing composite technologies that can be used to manufacture large areas of the front of vehicles like bonnets. These structures, based on military helmet technology, will have the appropriate strength to satisfy the structural requirements, whilst its inherent design and construction will protect a pedestrian who comes into contact with it. The deployment of passive safety systems such as air bags can cause injury to certain classes of passengers and drivers, such as infants, children small adults and those that sit too close to the restraint system. QinetiQ’s infra red based occupant position sensor is used to classify and measure the size of an occupant and track the position of their head to enable the air bagto inflate in a contr olled manner without injuring the occupant. The system can also be used to monitor the area round the vehicle to warn the driver of the proximity of vulnerable road users, especially at night.

Is the human driver better than the computer—where do we draw the line? New and emerging features within vehicles such as automatic cruise control, overtakingaids, lane departure warnings, obstacle detection, traYc information systems and collision avoidance systems will improve the safety of vehicles, but may also aVect the ability of the driver to interact with his vehicle and process the information in a timely, safe eVective manner. QinetiQ has been developingsystems, based on military fast jet technology, that will aid the driver by prioritising the information beingpresented to him by the most appropriate means (visual, haptic, auditory, speech). This will allow the driver to be an integral part of the system without beingunduly distracted by nugatorycues (unnec essary information that can be handled automatically by the car ie: battery state of charge, spurious outputs from proximity and collision avoidance systems) and unnecessary information. This technology will allow the fine line between the computer and driver to be drawn in real-time dependingon the conditions, d river abilities and levels of cognitive load being experienced. Drive-by-wire systems that operate the steeringand breakingsystems wit hout a hard link have been developed by vehicle manufacturers and suppliers and are awaitingthe app ropriate legislation to be put in place before beingadopted in Europe and the USA. A common standard has been agreed between the vehicle manufacturers to enable the diVerent systems to communicate within the drive-by-wire system. QinetiQ’s experience in developingfly-by-wire systems for aircraft has i dentified potential problems in the implementation of drive-by-wire systems when it comes to provingthe robu stness (inability to crash) of the software involved. QinetiQ has developed a number of tools and techniques that will both verify the software against real world solutions and speed up that verification by using proven automated techniques. Such tools and techniques will need to be adopted if users are to have full confidence in the software intensive systems and vehicle manufacturers are to exonerate themselves from blame if systems appear to fail in the future.

Vehicle Use

Can technology prevent uninsured driving? To a large extent uninsured driving is a driver specific matter and although the car may be insured by the principal driver it may be uninsured for others. This may depend upon the particular driver’s age, driving license status and permission to use the car. Linkinginsurance with elect ronic vehicle identification systems incorporating tagging technology would not provide a check on the legitimacy of the driver. Therefore it is not a complete solution to uninsured driving. What is required is a system that links the driver with the National Insurance Database or an onboard security unit. This system would rely on biometric identification of the individual to deter fraudulent use by uninsured drivers. QinetiQ has been developinga smart card incorporating high integrity GPS technology to combat fuel fraud. We are currently investigating linkingthis technologywith biometrics identification systems that have been developed for aviation and financial security systems. October 2003

Memorandum by the Low Carbon Vehicle Partnership (CAR 40)

CARS OF THE FUTURE 1. The Low Carbon Vehicle Partnership welcomes the House of Commons Transport Select Committee inquiry into the “Cars of the Future”. 9098191041 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Powering Future Vehicles 2. In July 2002, HM Government published its “PoweringFuture Vehicles” st rategy, the primary purpose of which was to establish a framework for action to take advantage of the opportunities that new vehicle technologies and fuels could oVer for radically reducingthe impact of road transport on the environment, both globally in terms of climate change and locally in terms of quality of life. 3. Government was equally committed to the UK leadingthe globalshift to cl ean, low carbon transport and, by settingthe rightframework for the future, build a competitive adv antage for UK industry. The Strategy’s objectives were to promote the development, introduction and take-up of new vehicle technologies and fuels and to ensure the full involvement of the UK automotive industry in the new technologies.

4. The Strategy set targets for reducing CO2 emissions which were intended not only to send strongsignals to the market about the Government’s priorities but to indicate the objectives on which incentives such as fiscal measures and Government programmes would be focused, and help to drive forward the change to a low carbon transport economy. 5. Those targets were:

— Passenger Cars—by 2012, 10% of all new cars sales to be cars emitting 100gm/km CO2 or less at the tailpipe. — Buses—by 2012, 600 or more buses cominginto operation per year to be low ca rbon, defined as 30% below current average carbon emissions. — The Government also aimed to develop targets for Light Goods Vehicles as better data on carbon performance becomes available for this class of vehicle, and to continue to press for carbon savings from heavy goods vehicles. — To maintain the momentum of innovation and roll-out of new technologies the Government envisaged developing a longer-term target for passenger cars. This target predicated that by 2020 the proportion of ultra low carbon cars would be of the same magnitude as the 10% for new car sales in 2012 with the expectation that a significant proportion of those cars would have zero tailpipe emissions. 6. Whilst it believed that these targets would encourage the development and take-up of new technologies and fuels, Government recognised that their achievement would require the full and active involvement of the UK automotive and energy industries to take advantage of these developments and maximise the potential to gain a competitive advantage from the strategy. 7. A key recommendation in the “PoweringFuture Vehicles” strategy,there fore, was to create the Low Carbon Vehicle Partnership (LowCVP) who would bringtogetherand involve all the constituencies with a stake in the shift to low carbon vehicles and fuels.

Low Carbon Vehicle Partnership 8. LowCVP’s mission is to promote the UK’s shift to clean, low carbon vehicles and fuels while maximisingthe economic, social and environmental benefits and the potent ial to create competitive advantage for the UK from the shift. 9. It will provide a neutral space in which all the stakeholders can engage proactively in the move to low carbon vehicles and fuels and a forum in which stakeholders can work together in overcomingmarket barriers aVectingthe shift. Of equal importance is LowCVP’s ability to provide a foru m in which Government and industry can liase on upcomingregulationand policy issue s and provide Government with input and feedback on the eVectiveness of Government low carbon RD&R programmes. 10. LowCVP was launched in January 2003 and is already makingsignificanthe adway. The Partnership is steered by a Board whose function is to provide overall strategic direction for the Partnership, agree a rollingwork plan and initiate Partnership activities. R Graham Smith , Ch airman Toyota (GB) plc c chairs the Board. Deputy chairmen are Bernard Bulpin (BP) and John Wood (MIRA). Board members are drawn from a wide cross-section of interests includingthe automotive and energ y industries, Government, academic and research institutions and consumer and environmental organisations. 11. From the start it was recognised that the road transport industry in the UK has many facets, dominated by passenger cars for both private and fleet use, but with significant other sectors includingbuses, long-distance coaches, light commercial vehicles, heavy commercial vehicles, taxis, etc. All the sectors had similar barriers and concerns to overcome but also many diVerences that needed to be addressed. 12. Five WorkingGroups have been established to focus on specific areas—Pa ssenger Cars, Buses, Fuels, R & D, Commercial Vehicles—and Supply Chain will be in place by the end of the calendar year. Each Group comprises representatives of the major players in the specific sector plus representatives of the fuel companies, environmental NGOs, Energy Savings Trust, local government, academia and Government. Their briefs are to identify both the barriers and opportunities that makingthe shift to low carbon transport oVers and to develop plans to deliver them. 9098191041 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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13. The first success has been the recommendations from the Bus Group. The WorkingGroup’s Report No 1 (see www.lowcvp.org.uk/news.html), approved by Ministers at the recent Low Carbon Ministerial Meetingin July, proposed a test cycle and set of standards for identifying low carbon buses which would meet the 2012 target and recommendations for funding support to develop the demonstrators to test market reaction and encourage early take-up and use. Those recommendations were accepted and the Low Carbon Bus Programme was launched at the Coach & Bus Show in September 2003. 14. The recommendations for a Centre of Automotive Excellence for Low Carbon and Fuel Cell Technologies, being developed by the R&D Working Group, are at an advanced stage. Significant progress is also beingmade in both the PassengerCars and Fuels WorkingGroups to defi ne the key barriers and problems associated with achievingthe 2012 targets.This includes analy singthe current scope of development in both engine and fuel technologies, the issues, costs, infrastructure practicalities and timing associated with a shift to hydrogen fuel cells from renewable energy and the scope for progressive reductions in CO2 emissions from existing engines and alternative fuels to bridge the gap to the availability of hydrogen. 15. A key concern is the need to understand and address the evidence of a lack of interest in environmental issues and fuel eYciency by passenger car purchasers judged by recent surveys of customer purchase criteria by MORI for the DfT. Passenger car manufacturers are inevitably reluctant to invest significant R&D expenditures to develop products which the majority of customers do seem to want.

Conclusion 16. The LowCVP was created to act as the catalyst for the change to low carbon road transport, acting as a neutral forum in which the key players in each of the major transport sectors in the UK could come together to debate and discuss the actions necessary to overcome the barriers standingin the way of achieving the “Powering Future Vehicles” strategy targets. From those conclusions to take the next step of developingproposals to Government for regulatoryor fiscal support to fac ilitate the transition to sales of commercially viable vehicles in the marketplace. The Bus Group recommendations were a clear demonstration that it can be done. 17. Each market sector shares common barriers and opportunities and in particular the need to enhance awareness of, and overcome customer resistance to, new technologies. Equally the individual sectors have unique aspects which need to be understood to ensure they are actively and successfully engaged in the shift to low carbon. 18. The LowCVP provides the opportunity for the major stakeholders in the road transport sector to meet in open forum to discuss their respective roles in deliveringthe Powe ringFuture Strategyobjectives and to develop action plans to achieve. But it also creates the opportunity for cross-WorkingGroup dialogue to learn from each other and seek common ground with Government. 19. To date there has been considerable success in definingproblems, engag ingall stakeholders, including representatives from Environmental Groups, in seekingsolutions which c an be acceptable to all interests. 20. LowCVP facilitates rather than dictates but is actively and positively encouraging its members to progress the new technologies, design and develop appropriate vehicles and encourage more eVective use of vehicles. David Wallis Executive Director, LowCVP October 2003

Memorandum by Cargill PLC (CAR 41)

CARS OF THE FUTURE

Introduction 1. Cargill is an international marketer, processor and distributor of agricultural, food, financial and industrial products and services, with 98,000 employees in 61 countries. Cargill has been active in the UK since 1955, and is a significant employer with around 4,000 people in 16 plants and oYces in the UK and Ireland. We believe that the UK agricultural industry could easily producesuYcient oilseed rape to supply a substantial proportion of the UK’s diesel requirement through biodiesel usingsuitable set-aside land and land currently used to grow wheat not needed by the domestic market. 2. Cargill has been producing biodiesel commercially in Germany since 1999 and has the experience and the expertise to produce a significant quantity of the fuel in the UK for the domestic market. If a suYcient duty derogation was forthcoming, we would consider investing the capital necessary to produce between 171.5 million and 228.5 million litres of biodiesel per year, equivalent to 1% of the UK’s total diesel consumption. 9098191042 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Tackling climate change: the contribution of road transport

3. Government policy on cars of the future and alternative road transport fuels has been driven by the need to respond to the environmental impact of road transport, particularly in terms of local air quality and climate change. The ministerial foreword to the cross-departmental PoweringFuture Vehicles Strategy accepted that “improvements need to go much further, as we understand more about how vehicles aVect the environment—including the global problem of climate change.” These sentiments were echoed in the Energy White Paper, published at the beginning of this year. 4. The Government’s response to date has focused on measures to increase theeYciency of existing engines and on policies designed to increase the production and consumption of alternative fuels. Indeed, engine improvements in recent years have already removed many of the more pernicious eVects of motoring on local air quality. Reducingcarbon dioxide emissions remains the large st challenge as the country heads towards the ultimate objective of a hydrogen fuelled economy. Road transport accounts for an ever increasingproportion of carbon dioxide emissions. Research cited in the PoweringFuture Vehicles Strategy shows that road transport already accounts for just under a quarter of total UK carbon dioxide emissions. 5. However, much work still needs to be done on hydrogen fuels; the European Commission’s recent action plan on hydrogen and fuel cell technology stated that “the transition to a hydrogen oriented economy should take 20 to 30 years.” Governments across Europe must look to other alternative fuels to fill the gap in the short to medium term. Most eVorts to date have focused on liquid petroleum gas (LPG), compressed natural gas (CNG), bioethanol and biodiesel. 6. LPG has mainly been encouraged in the UK because of the contribution it can make to improving local air quality. However, there are ongoing technical issues with the creation of a gas infrastructure in the UK which will take some time to resolve. In addition, a report issued earlier this year by the IPPR commented that the local air quality benefits of LPG have been negated by advances in pollution abatement technologies and improvements in the performance of conventional petrol and diesel cars. LPG and other road gas fuels attract a duty rate which equates to a derogation of approximately 41 pence per litre, currently under review by HM Treasury and the Department for Transport. 7. Biofuels present a readily available alternative to gas fuels. Biodiesel can be used as a straight substitute for conventional diesel, and can be used in blended form in existingengine s. Moreover, it could make an invaluable contribution to the reduction of UK carbon dioxide emissions: DEFRA has already accepted that carbon dioxide emission reductions from biodiesel are “in the order of 55%.” The independent report produced for DEFRA by SheYeld Hallam University stated that these reductions could potentially be as high as 86%. Biodiesel is also secure in supply, especially if produced from domestically grown oilseed rape. 8. Government policy to date has been limited to a derogation of 20 pence per litre below the ULSD rate, which came into eVect in July 2002. Whilst this was welcome, it has proved insuYcient and has not stimulated the UK biodiesel industry. A small scale industry has developed, mainly producingbiodiesel from recycled vegetable oil. Current availability of recovered vegetable oil in the UK is 80,000 tonnes, but only 50,000 tonnes of this can reliably be used for biodiesel production. This would only yield the equivalent of 0.03% of the total UK diesel consumption. 9. The European Biofuels Directive, finalised earlier this year, includes indicative targets for biofuel use across Europe. These are set at 2% biofuel consumption by 2005, risingto 5. 75% by 2010. The UK is already highly unlikely to meet these targets, and there seems to be some disagreement within Government on the approach that should be taken to achieve this. In oral evidence to the Environment, Food and Rural AVairs Committee’s inquiry into biofuels earlier this year, Lord Whitty, Parliamentary Under-Secretary of State for Environment, Food and Rural AVairs, told the committee that the UK would reach the target. However, John Healey MP, the Economic Secretary to the Treasury, argued that the targets were unsuitable for the UK. 10. Cargill, along with other potential UK producers of biofuels, is concerned by the fact that the Department for Transport does not intend to publish its consultation on implementation of the directive until February 2004. Under this timetable, a final decision on the directive would not be made until after the 2004 Budget, which would be too late for the UK agricultural industry to grow the required quantities of crops to produce the fuel. 11. There has also been some discussion in Government circles about the possibility of introducing mandatory blendingrequirements for biofuels, requiring,for example, t hat all diesel sold in the UK contain at least 5% biodiesel. This would operate in much the same way as the Renewables Obligation for electricity generation. Whilst Cargill would welcome such a proposal, we note the significant amount of time it would take to implement in the UK. Current Government thinkingis clearly in its i nfancy on such a proposal. 12. In the short term, the only policy instrument that will make any significant diVerence to UK production and consumption of biodiesel is the duty derogation. Cargill recommends that the Treasury increase the derogation by 8.20 pence per litre to 28.20p per litre below the rate levied on ULSD. This rate would compensate for the diVerence in the production cost of ULSD and biodiesel. At this rate, Cargill would anticipate producingbetween 150,000 and 200,000 tonnes of biodies el annually, equivalent to 9098191042 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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between 171.5 million and 228.5 million litres. This would represent about 1% of total UK diesel consumption. Indications are that a number of other companies would also start production were this duty rate to be implemented. 13. The Treasury has mounted a number of objections to a further increase in the derogation awarded to biodiesel. In particular, John Healey has raised concerns about a “flood of imports” into the UK and about value for money to the UK taxpayer. Cargill is not convinced that a further derogation would result in a flood of imports. Companies will only choose to import biodiesel if the UK supply chain is less competitive than supply chains abroad. An examination of the cost of growingoil seed rape and of getting biodiesel to the market in the UK demonstrates that it would clearly be more eYcient to produce biodiesel domestically in the short to medium term than to import it. 14. In terms of value for money, an increase in the duty derogation for biodiesel to 28 pence per litre would cost the Treasury an additional £108 million. When the environmental benefits that would result are taken into consideration, this in fact represents very good value for money, especially when compared to the significantly higher cost of the measures announced by the Chancellor in the wake of the September 2000 fuel crisis.

Conclusion 15. The Energy White Paper stated, “Alongside renewably-produced hydrogen, fuels made from biomass represent an important potential route for achievingthe goalof zero-car bon transport, creatingnew opportunities for agriculture in the UK as well as globally.” Cargill is fully supportive of this vision for the future of alternative road transport fuels in the UK. However, we are currently a longway from achieving this goal. October 2003

Memorandum by the Intelligent Transport Society for the UK (CAR 42)

CARS OF THE FUTURE

1. Introduction

The Intelligent Transport Society for the United Kingdom, known as ITS United Kingdom, is a not-for- profit organisation dedicated to promoting the use of ITS technology in the UK and promotingUK technical expertise and systems overseas. Our membership consists of over 130 organisations working in the transport field to promote the use of intelligent transport systems (ITS), which employs modern developments of mobile information technology and communications technology to assist all modes of surface transport. We are fortunate in havingmembership from both public and private sectors and from academia. We are funded entirely from the subscriptions of our members and therefore can independently represent the interests of the whole membership spectrum in this rapidly developingfield. This document has been prepared by ITS United Kingdom in response to the call for memoranda for the enquiry into cars for the future. Our response is directed at the use of intelligent transport systems (ITS), (information and communications technology applied to all transport modes), to address the relevant issues and does not address those issues where ITS has no application. For ease of reference, our response is set out using the same headings as the note regarding the issue that the committee wishes to examine.

2. General Comments

There have been huge advances in vehicle technology in recent years. Increasingly we have seen communications and information technologies (IT) playing an increasingly important role in vehicle design and usage. This can be seen in the moves towards advanced control systems, such as automatic braking systems (ABS) and adaptive cruise control (ACC), which are enhancingthe s afety of vehicles and also improvingtheir fuel e Yciency. In addition, information to and from vehicles is beginning to appear with systems such as navigation becoming more widely available. ITS is an important part of this revolution and we anticipate considerable increases in the use of ITS both within the infrastructure and on-board vehicles in the very near future. Our comments will focus on the possible ways in which ITS may address the issues of the future transport fleet and in particular cars of the future. We are pleased to confirm that we are content that this memorandum should be published as seen fit by the Committee. 9098191043 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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3. Response to Issues

Clean vehicle technology It is important that the emissions at the vehicle itself and the total emissions caused by the total energy process are always considered. For example, electrical drive vehicles cause almost nil emissions at the vehicle itself, but there are emissions caused by the generation and transmission of electricity and the battery charging processes for battery driven vehicles. In comparison, clean burn technology cannot reduce the emission at the vehicle to these negligible levels, but nevertheless, may produce overall less emissions. We would also comment that the application of ITS to traYc management is able to produce significantly improved flows through the road network and by providing smoother flows will reduce fuel generated emissions significantly, and also reduce noise pollution. TraYc management, including guidance into vehicles, can also reduce wasted travel, such as vehicles searchingfor th eir destination, and unsuitable travel, such as vehicle travellingthroughunsuitable streets. We welcome the tax breaks for users of low emission fuels and vehicles, but believe that similar advantages should be available to those drivers usingthe most modern information and guidance technologies, where this can be shown to be used to minimise the impact of their vehicles on the community.

Vehicle design and safety We believe that there are very considerable benefits to be obtained by the application of ITS to this area. It is clear that this technology is still in its infancy, but many applications have been demonstrated to be technically feasible and could have the potential to save many lives. It must be remembered that nearly all crashes are caused, in part by failure of the human beingto recognisea pote ntially dangerous situation and take action to avoid an incident. Computer technology is now highly reliable and can already take over some drivingtasks and perform these much more reliably than human beings.For e xample, modern cruise control systems can be set to the prevailingspeed limit and prevent unintentional speeding. We would submit that a driver, no matter how alert, cannot perform this task easily. We would suggest that the following ITS systems are likely to play an increasingrole in the car of the future.

1. Adaptive cruise control Cruise control that detects the vehicle in front and adjusts the vehicle speed to ensure the vehicle always stays a safe distance behind the leadingvehicle (commercially available ).

2. Lane following Systems designed to assist the driver stay in lane (demonstrated).

3. Reversing aids Systems designed to warn drivers of hazards behind a reversing vehicle (demonstrated).

4. Intelligent speed adaptation A system designed to ensure that drivers are aware of the current speed limit and (optionally) to apply control to the vehicle to prevent inadvertent speedingover the prevailin gspeed limit (demonstration currently in progress in UK).

5. Collision avoidance Systems which detect potential hazards in front of the vehicle, including pedestrians, and alert the driver. Potentially these systems could commence the brakingprocess some 500-75 0 msec earlier (8-10 meters at 30mph) (systems shown to be technically feasible).

6. Navigation Advanced navigation systems, incorporating road congestion information, designed to guide users to the most eVective route for their purpose, egfastest route, avoidingparticular haz ards etc (some systems becomingavailable). 9098191043 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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7. Stop/start driving Systems that, in congested conditions, automatically stop the vehicle a short distance behind the vehicle in front and then, up to a preset (low) speed move the vehicle forward when the queue moves. Can be combined with automatic switch oV to reduce emissions in stationary traYc (demonstrated overseas).

8. Car dynamic Information Information collected by the intelligence held within a car can provide status and operational information to assist road operators. For example, the use of car lights and windscreen wipers in daylight indicates poor weather. Reduced speeds by cars at specific locations could indicate an incident or congestion (demonstration systems tested). The driver could be given information indicating that the car needs urgent attention to avoid breaking down (demonstrated).

9. Car Security and Emergency Assistance Cars can be tracked when stolen. The trackingcan be used to locate a vehicle if the car breaks down and needs a ttention or the occupant feels in danger and needs help (commercially available). We would suggest that studies into the use of these systems suggest that, in combination, these, and other systems currently at the design stage, have the potential to reduce the numbers of killed and seriously injured on the roads by up to 50%.

Vehicle use The use of ITS within the vehicle implies that there are a number of technologies potentially available to the vehicle. Not all applications require all technologies. These include an inward communications channel such as broadcast radio or mobile telephone, some form of location device, such as global navigation satellite systems (GNSS) or mobile (telephony) location services and, for many applications, an outward communications channel, usually mobile telephony. The ITS systems currently available include:

1. Route navigation Linkingthe location of the vehicle to a digitalmap and providingroutinga lgorithms to enable navigational guidance to be given to the driver inside the vehicle. These systems are also beginning to make use of the real-time road network information so that routes can be amended en-route when abnormal incidents occur to provide an alternative route avoidingthe incident. Th ey may in the future also include road warnings and guidance currently made available through roadside variable message signs.

2. Information Information about the status of all modes of transport can be made available into the vehicle to enable drivers to make their own decisions about routing. This may include car park information and alternative journey opportunities, such as park and ride. TraYcMaster was the first widely available such commercial system, but many newer systems are becomingavailable. Broadcast in-car radio systems have been used to announce traYc and travel information changes or incidents and congestion for national and local use for many years. The advent of digital audio broadcasting (DAB) may permit more personalised information to be provided by the broadcast services.

3. Road Charging Electronic tolls are already in use at toll plazas, includingthe Severn an d Dartford crossings. They use microwave beacons to automatically debit an account or a stored value card held within the vehicle. It should always be remembered that this is a well proven technology and could be used to extend road charging to wider areas. It is more likely that a GNSS location system will be used, but this requires much more complex on-board units and enforcement technologies to be used to ensure that payment is beingmade correctly by the on-board unit. Road charging may also be undertaken using other non-electronic techniques such as those employed in the London Congestion Charging scheme. Enforcement is likely to remain based upon CCTV number plate recognition systems unless electronic identification is introduced for vehicles. 9098191043 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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4. Smart Cards There are many potential applications of smart cards. They could be used to store details of a drivers qualifications and, if suitable receptors were placed in a vehicle, only allow authorised drivers to drive the vehicle. Again enforcement of the technology may be found to be the most critical factor in their widespread usage. Similarly cards could be used to replace insurance and tax documentation, again ensuring that equipped vehicles can only be used with the appropriate documentation (smart card) in place on the vehicle.

5. Technology It is likely that technology will soon be available to assist the driver in routine tasks. This should enable drivers to keep driving safely as they get older. This has significant implications for the quality of life of an ageing population. It is also likely that technology will enable on-board systems to be able to undertake automatically certain functions, such as bookingcar park places, onward travel tickets and guidance to service stations. Such systems have been shown to be technically feasible, but it is unclear what, if any, commercial justification there may be for such applications. Many believe that there is a significant demand for such services, but this is not yet proven.

6. Car clubs It would seem unlikely that car share clubs will replace purchase of a car for most users. Indeed, it should be remembered that car hire, or indeed the hire of any large frequently used object, is very unusual in our society. Although such systems will undoubtedly have a market, it is diYcult to see this beinga significant influence in the UK in the near future.

The Journey of the Future We would suggest that the journey of the future (say in 10 years’ time) may be rather diVerent to today. We would stress that the technologies employed to achieve the ideas expressed in this possible route are already available. Thus the ideas can be said to be technically feasible. Many would require very significant investment and some would require legislative changes. It should also be recognised that the business case for such systems has not been tested. Nevertheless, the systems envisaged could be set up without major diYculty if society wished to take this route.

A scenario: Driver and vehicle details would be held on smart cards. These would be personalised for each user so that a check could be made if necessary that the authorised person is usingt he card. The cards would be inserted into the vehicle so that automatic checks would be made to ensure valid user and that insurance is in place. This can be made secure and personal, thus maintainingthe privac y of users. The driver may use internet, mobile phone and information points for information to plan a journey and this could be downloaded into the vehicle’s navigation system at the start of the journey. Bookingfor car parks and guidance into car parks could be undertaken automatically as the vehicle approaches the car park. Similarly where the driver intends to use rail or bus for the onward journey from an interchange, tickets could be booked and downloaded onto the personal smart card for immediate use. Information about possible public transport services and road congestion information would be sent to the in-car information systems, and possibly to the drivers mobile information unit (an enhanced mobile telephone) for use once the vehicle has been parked. Automatic changes to the guidance would be made if abnormal conditions were detected. If the journey is to be completed by road, guidance and information would continue to be provided throughout the journey. For much of the journey, driver assistance systems would undertake some routine tasks, such as lane keeping, and also monitor the driver’s behaviour to ensure that he/she was still in full control of the vehicle, providingalerts to wake up the driver, or possibly in some circumstances slow the vehicle to a safer speed. Although a number of automatic assistance systems, such as automatic cruise control, will be widely used, it is unlikely that the driver would have the vehicle under fully automatic control at any time. Although such systems have been demonstrated to be feasible, the systems would require specially equipped infrastructure and vehicles and these are not likely in the near future. We would suggest that they are unlikely to appear within a twenty-year time frame. However, we would expect the vehicle to be equipped with hazard warningdevices which would alert the driver and be gin to take avoiding action in some instances, such as a pedestrian steppingo V the pavement into the path of the vehicle. Automatic notification of the estimated time of arrival at destinations could be provided under the control of the driver. Guidance to a parkingplace and then pedestrian guidanceto a final destination would be provided via the personal mobile information unit. 9098191043 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Geographic related guidance on speed limits, and changing road and weather conditions can be relayed to cars from radio beacons. The information can be enhanced to provide local information on facilities and amenities.

Conclusion We believe that here are very significant benefits to be obtained from the greater use of ITS within and for a vehicle. This includes significantly greater safety for the vehicle occupants and also those around the vehicle. We believe that studies show that up to 50% of serious casualties could be avoided with such systems. We also believe that the use of ITS for better management of traYc, includingin-vehicle guidance,and engine management systems linked to these systems would significantly reduce pollution from vehicles. For ITS United Kingdom, the Intelligent Transport Society for the United Kingdom. David J Clowes Director General & CEO October 2003

Memorandum by the Society of Motor Manufacturers and Traders Ltd (CAR 43)

Cars of the Future The Society of Motor Manufacturers and Traders (SMMT) welcomes the House of Commons Transport Select Committee inquiry into the “Cars of the Future”. SMMT is the leadingtrade association for the UK motor industry. It represe nts some 600 member companies ranging from vehicle manufacturers, component and material suppliers to power train providers and design engineers. The motor industry is an important sector of the UK economy. It generates a manufacturingturnover approaching£45 billion and supports around 850, 000 jobs. The UK motor industry is focussed on addressingthe present and future chal lenges of improving road safety and minimisingthe impact of its products and manufacturingon clim ate change, air quality, noise and resource usage. In doing so, vehicle manufacturers in the UK are workingwith the automotive supply chain, fuel producers and Government to ensure that vehicles in the UK will continue to oVer consumers choice and benefits while contributingto improvements in their present an d future quality of life. However, SMMT would like to highlight that the automotive industry is under increasingpressures arising from ever tighter regulations aVectingthe industry. SMMT is anxious to ensure that future changes to legislation are developed with industry and not imposed upon it.

Fuels 1. The automotive industry is committed to contribute to the improvement of air quality and fully recognises the importance of its contribution in the fight against global climate change. The ultimate goal of the industry is to achieve a carbon free or carbon neutral economy, where hydrogen will be produced from renewable energy sources. In the short and medium term vehicle manufacturers are makingavailable cleaner vehicles that utilise improved conventional fuels and a variety of cleaner, non-conventional fuels. 2. The industry supports the Low Carbon Vehicle Partnership and in particular its eVorts to launch a Centre of Excellence for low carbon and fuel cell technologies. SMMT welcomes that the LowCVP is encouraging industries and other stakeholders to engage proactively in the move to low-carbon vehicles and fuels and provides a forum in which stakeholders can work together in overcomingmarket barriers a Vecting the shift to new and cleaner vehicles and fuels. 3. Vehicle manufacturers believe that in the next ten years conventional petrol and diesel vehicles will continue to dominate the market and to reduce CO2 emissions. The average CO2 emissions of new cars in the UK have fallen consistently since SMMT began monitoring data and new car average CO2 emissions have been reduced by 8.2% on the 1997 baseline. The European motor industry’s voluntary commitment is to deliver a 25% reduction in CO2 emissions from new cars by 2008 from 1995 levels. This is despite the fact that a range of factors, such as car safety improvements, other automotive regulations, and customer driven utility enhancement, have resulted in average car mass and engine power increasing. 4. The introduction of sulphur-free petrol and diesel is seen as the next step towards reducingtailpipe and CO2 emissions as it will enable the implementation of both new engine and aftermarket technologies. Fuels with zero sulphur content will improve fuel eYciency and will help to achieve the maximum environmental potential of direct injection systems. 9098191044 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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5. Recently agreed European Union Directives based on the need to improve air quality, mandate very low emission standards by the year 2005 and many petrol cars on sale already meet these standards years before the law requires it. Cars meetingEuro IV standards produce over 90% lower NOx (oxides of nitrogen) emissions than pre-catalyst equipped vehicles from the late 1980s. 6. The European Commission has indicated that it wishes to assess the need for future emissions requirements for passenger cars and heavy duty vehicles by 2005, for potential implementation from 2010. SMMT hopes that, when settingnew emission targets,the Commission will re cognise the diYcult balance that exists between achievingimproved air quality, reducingCO 2 emissions and deliveringcost e Vective solutions. This situation is further complicated by the additional issue of car mass and engine power increasingas a result of car safety improvements and customer driven util ity enhancements. 7. As well as improvingconventional fuels, vehicle manufacturers have in vested significantly in research to provide customers with a choice of non-conventional fuels. Synthetic fuels are seen as an important and viable alternative to conventional fuels and bio-fuels in blend strengths up to 5% when added to conventional fuels also merit attention in the short to medium term because they can be applied to existing vehicles and do not require expensive infrastructure investment. 8. SMMT supports the use of OEMs approved LPG and CNG vehicles and believes that it is vitally important that road fuel gases and all the other available non-conventional fuels are seen by government as a viable bridging technology to a hydrogen economy. LPG and CNG still oVer environmental benefits and should continue to be supported by government. This would provide a clear message to manufactures, investors and users that government has a long term commitment to support cleaner fuels and technologies.

Hydrogen: Fuel of the Future 9. As stated in the Future Fuel Report, SMMT believes that alternative fuels and hybrid technologies will continue to supplement and extend conventional fuels performance until hydrogen begins being mass produced and commercialised. 10. The presence of a wide spread infrastructure system will be essential to ensure that hydrogen is adopted as a road fuel by the wider public. Fuellinginfrastructure should be aVordable and easily available, as customers will expect to enjoy the same level of convenience that they currently have with diesel and petrol. 11. However, without a very significant change in public policy and significant fiscal intervention conventional technologies are likely to continue to be dominant in the medium term and the transition period from fossil fuels to carbon-free fuels may be longer than initially expected.

Government Incentives 12. Vehicle manufacturers need the necessary fiscal stability to focus on short to medium term technologies, whilst developing longer term plans. SMMT is of the opinion that it is necessary for government to focus on established cleaner and alternative fuels and technologies, whilst looking at the future and what can be done to move forward. 13. The fuel duty diVerentials oVered on a number of cleaner fuels and the Powershift Grants have had some impact on the sales of cleaner vehicles. However, the fact that these vehicles still remain marginal products, where commercial viability is hard to achieve, reflects the diYculties which are associated when introducingnew technologieson the market.

14. The Powershift programme, whilst supporting some vehicles with significantly improved CO2 performance, has qualifyingcriteria that excludes many potentially ben eficial technologies and fuels. In order to encourage vehicle manufacturers to speed up the introduction of lower carbon vehicles to the UK and to create a viable market for them, SMMT believes that Government should introduce new incentives based on air quality standards and CO2 emissions to allow a variety of technologies to compete on equal terms and to allow consumer demand to determine the most successful low carbon approach. 15. Customer acceptance of non-conventional fuels needs the involvement and commitment of government as well as vehicle manufacturers, so that cars which conform to the highest environmental standards are aVordable to ordinary motorists.

Vehicle Safety 16. The safety of drivers, passenger and pedestrians is a priority for the motor industry. The automotive industry has made tremendous progress in the past 20 years in improving the safety of its products and industry investment is deliveringmuch safer cars. Modern motor vehicles are the result of long-term safety related investment and leading edge technology. Safety devices that aim at minimizingwhere possible the consequences of a car crash have successfully contributed to improvingro ad safety. Many present 9098191044 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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improvements in road safety are due to safety measures such as airbags and improved seat belt wearing. These safety features will continue to be developed, in particular structural crash worthiness and the restraint of vehicle occupants. 17. In July 2001, in a groundbreaking agreement with the European Commission, vehicle manufacturers committed themselves to implement challenging design changes for new models to improve the protection of vulnerable road users. The agreement oVered a feasible and eVective way to bringforward pedestrian protection and the Council of Ministers backed it. However, the European Parliament asked for important aspects of the commitment to be confirmed in a Pedestrian Protection Directive which will come into force very soon. The Agreement and subsequent Directive will have the eVect to change the design of new cars, as vehicle front ends will have to be developed to meet the requirements. Materials used in the production of front ends will also have to evolve. 18. So manufacturers are already makingsubstantial changesto the front e nds, architecture and packaging of new type passenger cars. These changes will be necessary to meet the Phase 1 requirements of the Pedestrian Protection Directive from October 2005 onwards. The Directive prescribes that from 1 October 2005, all new types of vehicles will have to satisfy two tests concerningprotection againsthead injuries and leginjuries. A second, more stringent,set of tests will appl y to all new types of vehicles from 1 September 2010 and to all new vehicles by 2015. 19. In addition to the requirements of the Pedestrian Protection Directive, in the Negotiated Agreement, industry also committed to equip all new motor vehicles with anti-lock breakingsystems (ABS) from 1 July 2004, not to install rigid bull bars as original equipment on new motor vehicles, nor to sell them as spare parts and to gradually introduce information and communication technology (ICT) elements to improve active safety. 20. The automotive industry is developing a wide range of new technologies. Electronics, computers and software applications, applied to cars, aVect the vehicle in three basic functional areas: the basic vehicle, safety and security and telematics. Intelligent Vehicles systems will help combat traYc congestion, improve safety, driver comfort and convenience and foster a cleaner environment. Some of the new technologies that are currently beingdeveloped will ensure better steeringand better brak es. Head up technology, tyre pressure monitoringintegratedwith independent traction for wheels, au tomatic pre-crash intervention and adaptive cruise control stop and go will reduce pedestrian fatalities and societal costs. 21. However, one of the eVects of fittingsuch equipment has been the increase of the basic weightof vehicles. To oVset such a trend and to meet new emission targets, manufacturers are increasingly using lighter materials such as aluminium and magnesium. In addition to technical improvements in cars, the market structure, in terms of size and body style, has also shifted in recent years. Smaller cars have become increasingly popular, with demand in the supermini segment rising. In addition, more compact MPVs and 4x4s have also entered the market, loweringthe basic weightof vehicles.

E-Safety 22. E-Safety is a joint industry—public sector initiative and aims to accelerate the development, deployment and use of Intelligent Integrated Safety Systems. The overall objective is to join forces and to build up a European strategy to accelerate the research, development, deployment and use of Intelligent Integrated Safety Systems for increasing road safety in Europe. The new technologies that are becoming available oVer the prospect of, and are already contributingto, a significantreductio n in the number of accidents and road death. 23. Active safety features have the potential to provide significant improvements in road safety and significantly contribute to reducing road deaths. Active safety measures help the driver avoid an accident in the first place, and extend to and beyond advances in brake technology. With advances in electronics, innovations like acceleration skid control, brake assistance and stability control measures are also being developed. 24. Collision warningdevices usingultra-wide band short rangeradar are expected to be a key enabling technology for this new approach. These sensor-based systems, which continuously evaluate the surroundings of the vehicle, are able to cover blind spots and to detect any pedestrian and cyclist surroundingthe car. 24GHz radar technologyis the most cost e Vective way to introduce these devices, which would otherwise have to wait many years before beingdeployed in a di Verent frequency. However, the UK regulatory structure does not allow this technology to be implemented in cars usingthe only cost e Vective frequency available. It is essential for government and all government agencies to be committed to working in partnership with manufacturers, by realizingthat manufacturers take their commitment to improve road safety very seriously and their eVorts should not be discouraged. 25. E-Call will also be an important feature of future cars. E-Call is a vehicle feature that combines in- vehicle hardware and oV-board infrastructure to immediately locate a car in the event of an accident occurring. Studies have shown a 10% improvement in the survival rate of serious accidents when E-Call was fitted in the car involved. A pan-European E-Call is currently beingdevelo ped, but it will take time and more fundingbefore it becomes a reality. 9098191044 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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26. There is an increased interest across Europe in the use of advanced electronics to help reduce vehicle speed. These systems have become known as Intelligent Speed Adaptation (ISA).They can be either totally vehicle based or involve communications between the road infrastructure and the vehicle. Many of these systems are at a relatively early stage of development and it could take up to 20 years before such equipment becomes widely available in all volume classes of cars. The motor industry recognises the potential that ISA systems may have for improvingroad safety; however, the industry has conc erns about the legal consequences of interveningin drivers’ decision-makingprocess. This i ssue, alongwith the scale of investment and the likely timescale for the full availability of appropriate infrastructure and vehicles, will have to be resolved before ISA becomes commonly available.

The UK in the Global Car Market 27. The Foresight Vehicle Initiative has proved that the UK oVers quality research development capabilities, but to reach their maximum potential these capabilities need to be encouraged, as innovation plays a core role in automotive businesses. SMMT believes that government can play an important role through tax and regulations in improving the UK automotive industry performance in the global market, as future decisions to allocate new models production to the UK will be based on broad considerations, such as a stable economy, low levels of corporate taxation, a flexible and skilled labour market and competitive exchange rates. 28. Government should play a key role in promotingthe UK as a major manufact uringsite where vehicle and engine production facilities and know-how is in place and global manufacturers find it an attractive location for product development. There is certainly the need for more research into alternative fuels and technologies and component suppliers have also a role to play in their development process. The components sector recognises it must build a capability to exploit future technological development, which means greater investment in R&D and developing products that meet future environmental and safety challenges.

Vehicle Use

29. The UK government plans to introduce a road toll system for all commercial vehicles from 2006 and there is a possibility that thus may be extended to passenger cars in the longterm. The UK should ensure that the technology chosen to operate the scheme can be easily applied to passenger cars and vans when/if the scheme is extended to these vehicles. However, the extension of lorry-user charges to all vehicles would present major political, social and technological challenges that require very careful consideration. 30. It is also essential that the technology chosen to operate road tolling systems is developed on a pan- European scale and interoperability is in place across the EU. The use of a satellite positioningsystem for road tolling, as proposed by the European Commission, could be used to add services to motor vehicles, as some of the new technologies being developed by motor manufacturers already use GPS. A satellite location system could also allow the improvement of fleets management and security by monitoringvehicles eVectively.

Electronic Vehicle Identification

31. Amongst the new technologies being developed is Electronic Vehicle Identification (EVI), which will lead to an electronic, unique identifier for motor vehicles. Currently a feasibility study commissioned by the EU is beingundertaken to assess all the possible application of this techn ology. If the decision was made to store as much information as possible about the vehicle and possibly the vehicle’s owner, the technology would allow public authorities and potentially other organizations, to use such information for a number of purposes. However, wider issues regarding personal data sharing and human rights would need to be seriously taken into account.

Car Share Schemes

32. SMMT believes that car-clubs have a role to play, particularly in improvingthe mobility of some disadvantaged groups (ie low-income non-car owners living in areas with poor public transport) and in highly populated cities where traYc and pollution problems could be decreased by a more balanced car use. Manufacturers are providingcar share schemes and these voluntary scheme s are beingshown to be very eVective. However, as car-ownership has constantly increased in Western Europe, car share-clubs and leasingwill not replace car-ownership in the foreseeable future, but hav e certainly a role to play in reducing traYc pollution and improvingaccessibility in urban and rural areas. 9098191044 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Conclusion

33. The automotive industry has evolved significantly over the last 100 years, and continues to face many challenges. Increasing demands for more eYcient product development systems require new levels of innovation and high levels of investment. The new mobility landscape presents many new challenges including emerging markets, economic globalization, an increasingly competitive market place and environmental demands. The automotive industry will continue to meet these challenges. October 2003

Memorandum by the Petroleum Industry Association Ltd (CAR 44)

Cars of the Future

Thank you for the opportunity to submit evidence to your Inquiry. The UK Petroleum Industry Association (UKPIA) represents the oil refining and marketingactivities of the main oil companies in the UK. Our member companies supply almost 90% of the transport fuels and oil related products used in the UK. As such we have a major interest in the Cars of the Future and the fuels that will power them and welcome the Committee’s inquiry on this important issue. We will leave other experts to comment on “Vehicle Design, Control and Use” and will restrict our comments to your questions regarding “Clean Vehicle Technology”. Before turningto the specific questions we would like to make the following general points concerning today’s “conventional” road transport fuels.

Despite an increase in the quantity of kilometres driven, road transport emissions of carbon dioxide have been static for five years and will fall in the future

The fuel eYciency of vehicles has significantly improved over the last decade due to improvements in technology and a switch from petrol to diesel cars and vans. DfT figures show that since 1996 emissions of carbon dioxide from all vehicles have been constant despite a rise in the number of miles driven.

40 480 Vehicle Kilometres

30 440 CO2

20 400 Emissions mte C/annum

2 10 360 Billion Vehicle Km/a CO

0 320 1996 1997 1998 1999 2000 2001* YEAR Source: DFT *estimated by UKPIA

UKPIA predicts that carbon dioxide emissions from road transport will fall over the next two decades as the ACEA voluntary agreement on carbon dioxide emissions from new cars and other measures, which hit vehicle use not ownership, take eVect. The DTI’s latest interim forecasts published in July 2003 show a similar profile to UKPIA’s estimates with emissions of carbon dioxide from road transport not risingin this decade. This is significantly diVerent to the DTI forecasts published three years ago in Energy Paper 68. Government policy needs to reflect that carbon dioxide emissions from road transport will fall in the future. 9098191045 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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150%

140% DTI EP 68

130% EMISSIONS 2 120% DTI July 2003 110%

% of 1990 CO 100% UKPIA 90% 1990 1995 2000 2005 2010 2015 2020 YEAR

For the UK Air Quality issues will cease to be the driver for new fuel technologies

Emissions of the main pollutants from petrol and diesel (lead, particulates, NOx, benzene, carbon monoxide, 1,3-butadiene, VOCs and SO2) were at the very least halved in the 1990s and are subject to further substantial reductions both now and in the future due to further rounds of Euro Standards. Emissions of most of the pollutants are now meeting the stringent targets set by the Government’s medical advisors and the emissions of NOx, particulates and VOCs are beingactively worked upon. However, road transport is not the only source of these pollutants.

Oil supply will be suYcient to satisfy demand for transport fuels for decades to come

Oil Supply Outlook

at 2010 at 2020 40 ProducedYE 1996Cum. at DemandCum. Demand 35 30 25 Gas -to-Liquids Products 20 Heavy $/bbl 15 Oil 10

Production Cost, $/bbl Conventional 5 Crude 0 400 1400 2400 3400 4400 Billions bbl

• Source of “oil” supply will evolve with time • Current projections are that liquid hydrocarbons will be available and cost effective for extended period beyond 2020

The industry’s current estimates suggest that there are suYcient proven reserves of oil to last well into this century. The figure above illustrates that, despite the predicted decline in crude oil from the North Sea, there will not be a physical shortage of economic oil for a large number of years ie oil is not runningout. There is therefore no need, from a supply perspective, to rush to substitute conventional petroleum products. Even when conventional crude oil declines there are vast reserves of heavy oil and natural gas which can be used to provide transport fuels. Improvements in the technology used to exploit these resources, such as Gas-to-Liquids and Heavy Oil Conversion technology, will reduce the cost of these sources over time. 9098191045 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The oil industry is actively involved in the development of future energy sources UKPIA and its member companies are active members of the Low Carbon Vehicle Partnership and the oil industry is workinghard on many projects associated with the possible future use of hydrogen and biomass as fuels. Our industry is also active in extendingfuture supplies of petrol and diesel by developing processes to convert natural gas, heavy oil and tar sands into transport fuels.

Specific Questions Turningnow to the specific questions you have raised:

What fuels will be used to drive the vehicles of the future?

Short Term to 2010 UKPIA believes that in the short term petrol and diesel will dominate the market for road fuels and can produce significant reductions in CO2 emissions through the use of improved conventional technology. Increasingthe fuel economy of conventional engineswill therefore take a high priority. The trend of growth in diesel vehicles will also continue, accompanied by a correspondingdec line in petrol cars and hence in petrol sales. Other road transport fuels such as LPG, CNG and biofuels will continue to contribute if they are supported by lower fuel duty. In the near future sulphur free petrol and diesel will be introduced. These are cleaner than today’s fuels and will enable the motor manufacturers to introduce new technologies which will further improve the fuel economy of vehicles. These technologies include gasoline direct injection, common rail diesel and hybrid vehicles, which use a combination of on-board generated electricity and either a petrol or diesel engine.

Medium Term to 2030 In the medium term we believe petrol and diesel will continue to supply the bulk of the road transport fuel market, utilised within more eYcient conventionally powered vehicles. High priority will continue to be placed upon improvingfuel economy still further. Ricardo (a leadingau tomotive technical consultancy) and other groups have estimated that in the medium term car fuel economies can be improved to the point where they are twice as eYcient as today’s models. To achieve this we may expect to see significant market penetration from hybrid vehicles. Fuel distribution will continue to utilise conventional infrastructure, although this may involve greater use of alternative components in the conventional fuel pool. These alternatives, such as bio-fuels, will be developed to meet stringent fuel quality standards for use in conventional engines. Other transport fuels such as CNG, hydrogen, methanol, LPG and electricity will penetrate the market to a degree limited by their relative costs and by consumer acceptance. Duringthis period advances are expected in some alternative technologie s such as fuel cells, batteries and biofuels, however it is impossible to predict when, if and where breakthroughs will occur to enable these options to challenge petrol and diesel.

Long term post 2050 In the longer term diesel and petrol distilled from crude oil, gas to liquids and heavy oil will still be in use. To accompany these fuels a range of alternatives could emerge which oVer a transition to very low or potentially zero carbon emissions from road transport but it is too earlier for it to be appropriate to say when and how they will emerge and what the fuels will be. At the present time hydrogen and biofuels are seen as the most likely options to provide low carbon transport fuels, but in reality it is simply not yet possible to predict a clear winner.

To what extent will they solve environmental problems? Air Quality—It is our view that in the future Air Quality will be much improved and that road transport’s contribution to air pollution will continue to diminish. The impact of tighter exhaust emission standards introduced by the EU has roughly halved the emissions of most pollutants in the last decade and they will roughly halve again in this decade. Around 2010 the exhaust emission standards for diesel cars and lorries will once more be tightened to further reduce emissions of NOx and fine particulates. This means that by 2020 the impact of exhaust emissions on air quality will be dramatically reduced as new, clean vehicles replace older more pollutingvehicles. Greenhouse Gas Emissions—Emissions of carbon dioxide from road transport have been virtually static over the last five years and UKPIA believes that they will decline over the next two decades. Reducing emissions of greenhouses gases is likely to be the major driver for road transport over the comingdecades. It is also important to recognize that road transport today accounts for around 21% of the UK’s carbon 9098191045 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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dioxide emissions. It is therefore very important that emissions reductions are made in conjunction with other sectors in order to achieve the goals set by the Government. Put bluntly road transport can only produce a proportion of the total amount of reductions in carbon dioxide emissions which the Government is seekingto achieve.

How successful have the Government’s grant and tax brake initiatives been to date? Our experience over the last decade has shown that the UK fuels market is sensitive to duty diVerentials. For example relatively small duty diVerentials have been successfully used as an incentive to encourage the early introduction of unleaded petrol, ultra low sulphur petrol and ultra low sulphur diesel. Government incentives have also successfully promoted the use of gaseous road fuels with 100,000 LPG cars and 500 natural gas powered lorries, buses and other heavy duty vehicles now on UK roads. These vehicles are fuelled from a network of around 1,300 fillingstations. The Go vernment’s commitment to maintainingthe duty di Verential until at least 2004 has been important in buildinginvestor confid ence in the developingmarket for gaseousfuels. However we also believe that ther e is a danger of the Government usingincentives too readily and creatingboth unnecessary complexity in the fuels industry and an increased opportunity for fraud.

What does the Government need to do to make it happen? Approach—UKPIA believes that the Government’s approach to future transport fuels and technology should: — Emphasise the key importance of improvingenergye Yciency, where economic, in all sectors includingthe road transport sector. — Focus primarily on what the UK needs to do in the next twenty-thirty years ie improve conventional petrol and diesel technology and facilitate the exploration of potential low carbon options such as hydrogen and biofuels. — Recognise that for at least the next two or three decades conventional hydrocarbon fuels will supply the bulk of the UK’s energy needs, particularly in the transport sector. — Encourage industry to develop competitive, new technology and adopt an evolutionary not revolutionary approach to achievingobjectives. The Government should n ot try to pick the potential winners in advance. — Establish the benefits of new technology by demonstration projects whilst focussingR&D where UK industry has a realistic chance of achievinga competitive advantagera ther than duplicating other countries well established programmes. — Reflect that possible new low carbon approaches such as carbon sequestration and fuel cell powered vehicles need advances in technology, lower costs and long lead times. — Recognise that consumers will only voluntarily adopt new technology that gives them sustainable benefits with at least the current level of performance, comfort, etc. The aim should be to provide new technology at aVordable cost to both the user and taxpayer. Malcolm Webb October 2003

Memorandum by Professor Oliver Carsten, University of Leeds (CAR 45)

CARS OF THE FUTURE 1. Introduction This memorandum, written in response to the invitation by the Committee to submit material for the inquiry on Cars of the Future. It focuses on the safety issues that can arise with what are commonly known as Advanced Driver Assistance Systems (ADAS). These are the system beingp romoted by the Information Society Technologies (IST) Directorate-General of the European Commission under the “eSafety” banner (European Commission, 2002).

2. eSafety and Adas The automotive and supplier industries are the major stakeholders in the eSafety initiative, as can be seen from the membership of the eSafety WorkingGroup which prepared the 2002 re port. The report rightly claims that intelligent vehicles, featuring a number of ADAS, have very great potential for reducing accidents and reducingthe impacts of vehicle tra Yc on the environment. In terms of predictingthe safety impacts of the systems, the report states: “[I]t is not possible to determine today what might be the most eVective safety function and which function would save most lives. Therefore, the industry is engaged in the 9098191046 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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development and deployment of a relatively large number of Intelligent Integrated Road Safety Systems, like safe speed and speed warning, vehicle collision alert system, lane support, safe following, pedestrian protection, intersection safety, vehicle dynamics, driver monitoringa nd improved vision and perception systems” (page 16). Later the report advocates a review of the benefits of the various systems, because previous review are incomplete or out of date: “Therefore, the societal benefits because of reduction in fatalities and serious injuries should be estimated, followed by a cost analysis regarding reduction of medical and other expenses in Member States” (page 41). However, it can reasonably be argued that: — There are substantial reasons for having misgivings about the deployment path or “road map” proposed by industry; — There have been quite a few reviews of the potential impacts of various ADAS on accident numbers.

3. The Industry Road Map The deployment of ADAS has already begun. The first of the new systems, Adaptive Cruise Control (ACC) has been on the market as an option for some high-end vehicles for about three years. Traditional Cruise Control maintains a driver-set speed, but is not really viable on the crowded roads of Europe, since it is only operable in relatively free-flow traYc conditions. ACC extends traditional cruise control by adding a headway function, so that the vehicle accelerates to and keeps its set speed unless time headway will go below a preset minimum in which case the minimum headway is maintained by automatically reducing speed. Acceleration of the lead car is mimicked up to the maximum set speed. The function of ACC is thus to replace the driver in the task of car followingparticularly on motorway s and other high speed roads. But ACC is, for the car manufacturers, just the first step in a planned path towards fully automated driving, at least on some roads and in some situations (Zwaneveld et al., 1999). This path or road map is shown in Figure 1, which is taken from an industry-led research project on ADAS. The next stage is for ACC to be extended to drivingdown to 0 km/h (so-called Stop&Go) and then to b e supplemented by forward collision avoidance. At this point the car will be able to handle all car followingsituations and essentially we will have automated longitudinal control. The next stage is to add assistance systems for lateral control, includinglane changes.Once a vehicle is capable of maki ngautonomous decisions for both longitudinal and lateral control, most driving is automated. Full “autonomous” (ie automated) drivingis achieved with the addition of a “CrossingAssistant” to aid drivers at inte rsections and predictive trajectory calculation.

Advanced Driver Assistance Systems in Europe

Longitudinal Control + Lateral Control UDA RDA S&G++ Autonomous ACC S&G Driving TrajCal CrossA RDWS LCA LDWS BSM PAss FCW IV Com Infos on Congestion City Info (Parking, Museum) Traffic Management VV Com Position, Speed Sensor Info Assumptions

Com. Map Stat. Map dvn. Map Intelligent Map Precise Map OR Vel, dist. Wider Range Trajectory Object Classification Intention RC Lane Recogn. Road Recogn. Curve. Prediction TSR Speed Limit Curve, Crossing Signs Complex Traffic Signs

Sensors DM Physiological Charact. Driver Reaction Interpretation Actuators Smart Actuators X-by-Wire

4. Human Factors Issues These systems have profound implications for the human factors aspects of the drivingtask and great potential to modify driver behaviour, includingin unexpected ways. Ther e are a number of specific areas of concern: — Will drivers understand the functionality and technical limitations of these systems? — How will drivers respond when confronted with failures? — How will drivers they maintain their alertness and awareness when load from the drivingtasks is very low? — How will drivers handle the transition from virtually automated or fully automated drivingon equipped roads to manual drivingon non-equipped roads? — How will driver attitudes and preconceptions influence their use or non-use of these systems? 9098191046 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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On some of these issues there has been some indicative research, which is discussed below. Much of this research has focussed on the system that has been introduced first, namely Adaptive Cruise Control. 4.1 Understanding of the functionality and limitations of the systems In an experiment on the VTI drivingsimulator, drivers approached a statio nary queue on a motorway (Nilsson, 1995). The ACC in the experiment, like the ACCs currently on the market, was set to ignore stationary objects. Thus the drivers had to detect the queue and slow down the vehicle appropriately. Ten drivers drove with the ACC group and ten drove without. In the ACC group, five drivers crashed into the queue; in the non-ACC group, one driver crashed. A similar experiment was conducted on the HUSAT simulator at Loughborough University. Drivers were exposed to a stationary queue at the end of a one hour drivingsession on a two-lane highway. Fifty- six drivers participated with half assigned with ACC and half driving without. The result of the experiment was that minimum time-to-collision into the stationary queue was significantly shorter with ACC, ie the ACC drivers came closer to crashing(Richardson, Ward, Faircloughand Gra ham, 1996). 4.2 Response to failures An experiment was carried out on the Southampton University drivingsimul ator to investigate the eVects of ACC failure on driver performance (Youngand Stanton, 1997). When ACC fa ilure was induced, one- third of the drivers collided with the lead vehicle, indicatingthat monit oringthe functioningof the system is diYcult and recovery from failure problematic. A Dutch study, also on a drivingsimulator looked at driver response to fail ure of an automated highway system (de Waard, van der Hulst, Hoedemaeker and Brookhuis, 1999). In the emergency situation, which consisted of the car’s front sensor failingto detect a mergingcar, only ha lf the drivers took over control of the vehicle and applied the brakes in the expected manner. 4.3 Maintenance of alertness The same Dutch study found lower levels of alertness in the automated drivingsituation as compared to normal driving—in other words the drivers were relying on the proper operation of the system. This phenomenon is often termed “automation-induced complacency”. It can be argued that this eVect id hardly surprising: drivers on an automated highway, like passengers on a train, will want to use their relief from driving to engage in other tasks—dealing with emails, phone conversations, watchingTV or whatever. That is fine, provided the automated systems work properly. But if there are any safety-critical system failures, then the drivers will have to respond to alarms and resume control very quickly. That may be problematic. 4.4 Transition from automated to non-automated driving This issue has not been explored in the research, but is likely to be a major problem once a significant part of the network is equipped for automated driving. After perhaps several hours of automated driving, drivers will have to readjust to a manual situation when they leave the automated highway for “normal” roads, including urban streets. But will they forget that they longer have the various automated rash prevention systems available and thus fail to react when another vehicle cuts in or a pedestrian steps out? This scenario is perhaps even more probable than the system failure one—engineers can no doubt build a very reliable automate highway system with all kinds system redundancy built in, but they cannot engineer a totally reliant and aware human driver. 4.5 Influence of attitudes and preconceptions In an experiment conducted on the University of Groningen driving simulator in the Netherlands, drivers drove without ACC and with a variety of ACC systems with varyingcriteria an d functionality. (Hoedemaeker, 1999). Substantial diVerences were found by drivingstyle. Fast drivers identified by the DrivingStyle Questionnaire of West, Elander and French (1992) increased their standard deviation of lateral position, ie their tendency to wander, with ACC while drivingin li ght traYc, whereas slow drivers decreased their standard deviation of lateral position in the same situation. Driving style was also investigated in the Michigan Field Operational Test of ACC, which is the only large-scale field trial of this system to date (Fancher et al. 1998). Here drivingstyle was classified on the basis of actual speed and headway choice. From most aggressive to least aggressive, the categories identified by the researchers were hunter/tailgaters, extremists, planners, flow conformists and ultraconservatives. It was found that the first group used the ACC relatively less often, in all probability because the system’s minimum time headway of 1.1 seconds was larger than the drivers’ preferred time headway of 0.6 to 0.8 seconds. Thus more aggressive drivers may be unwilling to use ADAS systems if these impose safe behaviour. 4.6 Conclusions from research evidence The body of research carried out so far indicates that there are grounds for concern about the safety impacts of the systems, but it also has to be conceded that many of the issues have not been explored in depth. This stems in part from the fact these systems tend not to exist yet in real life, even in prototype form. Therefore it is not possible for the most part to study driver behaviour with such systems on real roads, still less to study long-term behaviour. The major alternative is to study behaviour with the systems in driving simulators, but of necessity this is limited to the examination of driving behaviour after very little exposure to the systems. 9098191046 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 222 Transport Committee: Evidence

5. Predicting the Safety Impacts of ADAS The predicted accident savings for longitudinal collision avoidance are that up to 20% of motorway and trunk road accidents would be avoided, ie about 2.4% of all injury accidents. For lateral collision avoidance, the estimated savings is that motorway accidents could be reduced by 2%, ie a savings of 0.08% overall (Perrett and Stevens, 1996). The Netherlands has recently carried out a trial with a number of trucks fitted with a lane departure warningassistant system that warns drivers when the y are strayingout of lane. The prediction from this study is that a maximum of 10% of accidents involvingt rucks occurringoutside built- up areas could be aVected by such a system. Such accidents involve less than 1% of the traYc casualties in the Netherlands (Schermers and Korse, 2003). Thus the accident savings potential of these systems is not very large. And these estimates come with a bigproviso. They assume that drivers will use the extra safety margina Vorded by the systems to increase their safety (rather than for example to follow the vehicle in front much more closely, to drive faster in the hope that they systems will be able to handle imminent collisions, or to continue to drive when fatigued). And they assume that there will be no negative knock-on eVects of system use onto roads or situations where the systems cannot operate. But will drivers who have had longitudinal and lateral assistance for several hours on a motorway always be aware that, once they exit from the motorway, the support systems are no longer available. These rather modest and perhaps over-optimistic safety predictions compare very unfavourably with the predicted accident savings from Intelligent Speed Adaptation (ISA), which is the system that brings speed limit information electronically into the car. That information on speed limits can then be used to encourage or enforce compliance with the speed limits. This system was discussed in detail in my memorandum to the Committee’s inquiry on Road TraYc Speed. The injury accident savings for ISA would be greatest with a mandatory (not overridable) system, which can sensibly be adopted once 60% of the car fleet is fitted with ISA capability. Simple mandatory ISA would save 20% of injury accidents at 100% penetration. Addinga capability to slow vehicles at dangerous locations in the network would increase the savings to 22% and addinga dynamic capability would raise the accident reduction to 36%. Tha t same most capable version of ISA would reduce fatal and serious accidents by 48% and fatal accidents by 59%. Because there is a particularly strongrelationship between collision speed and the probab ility of injury of serious injury or death in accidents involvingpedestrians and cyclists, vulnerable road u sers would be amongthe major beneficiaries from ISA. The reason that ISA is so much more eVective in safety terms than many of the ADAS systems beingpromoted by the car manufacturers is that those systems rely on beingable to intervene just as a near-crash situation is detected, whereas ISA prevent a near-crash situation from developingin the first place by preventing the driver from engaging in extreme behaviour.

6. The Way Forward Human behaviour is very diYcult to predict, particularly for situations and experiences with which we are currently not acquainted. It would be sensible, therefore to adopt the precautionary principle with ADAS and to require that these system are proven to be safe before they are deployed, in other words to have a formal process of certification or approval. This is exactly what we have done with ISA, where research has been continuous over the last 10 years, and where there have been extensive field trials in Sweden and the Netherlands and Belgium, with trials currently underway in the UK and soon to start in France and Austria. But ISA is not a system promoted by the vehicle manufacturers. ACC came on to the market without any formal safety certification, and unless the authorities act other ADAS systems will be fitted without any empirical evidence that they do not harm safety. The need for a structured process of evaluation of ADAS has recently been advocated by the European RESPONSE project (Cieler et al., 2000). The RESPONSE approach is a three-step procedure. The first step is full functional system safety evaluation. The second major step is one or more controlled, short-term and accompanied drives, which should involve specific risk groups such as inexperienced, elderly, cognitively-impaired and risk-prone drivers. At this stage, specific potential problem scenarios, identified by earlier “risk identification” are investigated. And the third step is an unaccompanied long-term experiment, ie a field trial in which the system is used for several weeks. What RESPONSE did not advocate, but which seems entirely sensible and logical, is that there should be a formal certification process for the approval of new ADAS. We also need to examine carefully whether a path of creeping automation of driving, in which the driver is progressively required to do less and less is a sensible one. A driver who is required to do almost nothingto keep his or her vehicle o n the road is not likely to be an alert and safe driver.

7. References Cieler, S, Becker, S, Johanning, T and Schatz, A (2000). Experimental assessment of driver assistance systems, part 1: description of a methodology. Deliverable D5.1.1. of RESPONSE project. Cologne: T. Kraftfahrt GmbH. de Waard, D, van der Hulst, M, Hoedemaeker, M and Brookhuis, K A (1999). Transportation Human Factors, 1(1) 67-82. 9098191046 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 223

European Commission (2002). Final report of the esafety workinggroup.Br ussels: Information Society Directorate-General. Fancher, P, Ervin, R, Sayer, J, Hagan, M, Bogard, S, Bareket, Z, MeVord, M & Haugen, J (1998). Intelligent cruise control field operational test. Final report. Volume I: Technical Report. Ann Arbor, Michigan, USA: University of Michigan Transportation Research Institute. Hoedemaeker, M (1999). Drivingwith intelligentvehicles: drivingbehav iour with adaptive cruise control and the acceptance by individual drivers. PhD thesis, Delft Technical University. TRAIL Thesis Series 99/ 6, Delft University Press. Nilsson, L (1995). Safety eVects of adaptive cruise controls in critical traYc situations. Proceedings of the Second World Congress on Intelligent Transport Systems, Yokohama. Volume 3, 1254-1259. Perrett, K E and Stevens, A (1996). Review of the potential benefits of road transport telematics. TRL Report 220. Crowthorne: Transport Research Laboratory. Richardson, J H, Ward, N J, Fairclough, S H and Graham, R (1996). PROMETHEUS/DRIVE AICC safety assessment: basic simulator. Confidential report. Loughborough, UK: HUSAT Research Institute, Loughborough University. [Cited in: N J Ward, Driver response to automated vehicle control. Proceedings of the 13th triennial congress of the International Ergonomics Association, June 29–July 4 1997, Tampere, Finland (Vol 1, pp 280-282). Helsinki: Finnish Institute of Occupational Health.] Schermers, G and Korse, M J (2003). Lane departure wantingassistant (LDWA ) field operational test. Presented at 16th ICTCT Workshop, 29 October to 1 November, Soesterberg, The Netherlands. West, R, Elander, J and French, D (1992). Decision making, personality and drivingstyle as correlates of individual risk. Contractor Report 309, Transport Research Laboratory, Crowthorne. Young, M S and Stanton, N A (1997). Automotive automation: eVects, problems and implications for driver mental workload. In: D Harris (Ed), Engineering psychology and cognitive ergonomics, Volume One: Transportation systems. Aldershot: Ashgate. Zwaneveld, P J, van Arem, B, Bastiaensen, EGHJ, Soeteman, J J, Fr„mont, G, B„larbi, F, Ulmer, B, Bonnet, C and Glliger, H (1999). Deployment scenarios for advanced driver assistance systems. Report Inro/VK 1999-07. Delft, The Netherlands: TNO Inro. October 2003

Memorandum by ippr (CAR 46)

CARS OF THE FUTURE

What Fuels Will be Used to Drive the Vehicles of the Future? In the comingyears, advancements in pollution abatement technologies an d even lower sulphur fuels, driven by European regulations, are likely to continue to reduce theexhaustemissionsfrom new cars. In the decades to come, the two alternative fuels that show the most promise of becoming mass market alternatives to conventional fuels are biofuels and hydrogen. Biofuels can be derived from two main sources—annual food crops and woody crops. Some annual food crops can be used for makingliquid fuels. For example, oil seed rape ca n be esterified as a diesel substitute called Rape Seed Methyl Ester (RME). RME can be used as a direct substitute for diesel, but this presents some technical problems and requires minor engine modifications. BlendingRME (normally a 5% blend) into conventional diesel however requires no engine modification. Ethanol can also be derived from cereal and sugar crops, such as sugar beet and blended with petrol for use in vehicles. There is also the potential for derivingethano l from woody or lignocellulosic sources such as straw or fast growing trees, like willow, from which wood can be harvested. Ethanol could also be cost eVectively produced from farm wastes, forestry residues, domestic or commercial waste. Waste materials are unlikely to supply vast amounts of ethanol for road transport, but in some local areas usingwaste products to produce ethanol could help to minimise waste and improve resource eYciency. Hydrogen can be used in adapted internal combustion engines or fuel cell vehicles. A hydrogen powered vehicle produces no local air pollutants or greenhouse gases from its exhaust. The only emission is small amounts of water vapour. The emergence of fuel cell technology has increased interest in the use of hydrogen as a fuel for road vehicles. Fuel cells function in a similar way to batteries in that they have no movingparts and convert chemical energyint o electricity very eYciently and silently. Unlike batteries, fuel cells never need to be recharged and will produce electricity for as long as the hydrogen fuel is provided. An internal combustion engine vehiclecanlosemorethan 80% of the energy it generates, either as waste, heat or friction. A hydrogenfuelcellmayloseonly 40% and is therefore very fuel eYcient. 9098191047 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Whilst hydrogen vehicles are zero emission, this does not account for any emissions that might be created in the process of producing the hydrogen in the first place. Hydrogen is not like traditional fuels, such as coal, oil or gas, which have to be mined or drilled out of the ground. Its strength lies in its flexibility and the fact that it can be produced from a wide range of energy sources. It is therefore more like electricity. As with electricity if the hydrogen is made from fossil fuels then significant amounts of pollution will still be released into the atmosphere. But hydrogen made from renewable energy sources, such as wind and solar power or biomass, would be pollution free. ippr has argued that renewable hydrogen should therefore be the ultimate end point (Foley, 2001). One of the technological hurdles is that hydrogen must be either compressed or liquefied to reach the energy densities needed to power a road vehicle. Compressed hydrogen gas currently requires bulky storage tanks that take up a lot of room. Liquefaction requires more energy than compression, using the equivalent of 25% of the energy stored in the fuel (EST, 2002). Hydrogen storage technologies still need further development but they continue to develop at a rapid rate. Most major fuel suppliers have made significant investments in researchingthe next generation of hydrogen storage technologies. There is a growing consensus amongst fuel suppliers and vehicle manufacturers that hydrogen will be the fuel of the future. Leadingvehicle manufacturers have devoted a significa nt proportion of their research and development budgets to developing tomorrow’s hydrogen and fuel cell cars. The last few years has seen several high profile launches of hydrogen fuel cell car demonstration models.

To What Extent Will They Solve Environmental Problems?

The greatest long term environmental challenge facing governments, business and wider society is to stabilise climate change emissions. Road transport is responsible for nearly a quarter of the UK’s carbon dioxide emissions. To date, the carbon dioxide (CO2) emissions from increases in road traYc have been largely oVset by improvements in vehicle eYciency. The average car today produces 178 grams per kilometre (g/km) of CO2, a 7% reduction on average emissions in 1997 (SMMT, 2002). The European car industry has made a voluntary agreement to reduce CO2 emissions from the new car fleet to an average of 140 g/km by 2008. Despite this progress, future fuel eYciency improvements are unlikely to keep pace with traYc growth. The Government projects that road traYc in England could increase by 20–25% by 2010 (DfT, 2003). ippr’s research suggests that rising road transport emissions could, if not addressed, endanger the prospects of meetingthe Government’s 2010 targetto cut carbon dioxide emissions by 20 %, from 1990 levels, and by 60% in the longterm (Foley and Fergusson,2003). July 2002 saw the launch of the Government’s PoweringFuture Vehicles Stra tegy which introduced a new target for “low carbon cars” which requires one in 10 new cars sold in the UK to be low carbon with exhaust emissions of 100 g/km of CO2 or less by 2012. In the comingyears, valuable carbon savingscould be achie ved through developments in technologies and designs that make existing conventional cars more energy eYcient. Achievingthe low carbon car targetwill require the introduction o f energy eYcient car technologies such as hybrid-electric cars or conventional diesel cars with lightweight, fuel savingdesignfeatures. The Government will need to help to create a market for more energy eYcient cars through the provision of tax incentives and purchase grants (for reducing the price premium of hybrid-electric cars which can cost £3,000 more than a petrol equivalent). The concern, however, is that even the most energy eYcient cars will not deliver carbon emission reductions on the scale likely to be needed to reduce the climate change impacts of road transport over the longer term (PIU, 2002). In the Energy White Paper, published in February 2003, the Government made an ambitious commitment to move towards a 60% cut in carbon emissions by 2050. If deep cuts in carbon emissions—of around the 60% mark—are to be achieved in the longterm, then t he development of the hydrogen option will be critical (ICCEPT, 2002). Low carbon car technologies and fuels are only part of the solution to sustainable mobility. Whilst they can help to cut pollution they cannot reduce traYc congestion or the number of deaths caused by road accidents. ippr has also advocated the role that road user charging schemes could play in helpingto reduce the demand for road travel and congestion (Foley and Fergusson, 2003).

How Successful Have Government Grant and Tax Break Initiatives Been to Date?

Since 1997 this Government has proactively used the tax system to encourage environmentally friendly cars. Recent reforms to Vehicle Excise Duty (VED) and Company Car Tax (the personal tax on private use of company cars) mean that motorists with cars that produce lower CO2 emissions now pay less tax. 9098191047 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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For the last few years, VED for new cars has been graduated according to a car’s CO2 emissions. The 2003 Budget introduced a new lower rate of VED for cars with very low levels of CO2 emissions not exceeding100 g/km. The new VED rate and the trial of a new environmental label for cars based on VED emissions bands will strengthen the incentive for motorists to choose cars that are more fuel eYcient or run on alternative fuels. Since April 2002, Company Car Tax has been paid on a proportion of the car list price ranging from 15% to 35% for higher CO2 emission cars. The new tax system has had a fairly immediate eVect on the purchasing decisions of large companies. A recent study found that 92% of 180 companies surveyed said that their employees had been influenced by the tax change increasing the popularity of cars with lower CO2 emissions (Monks Partnership, 2003).

There is already evidence that the Government’s CO2 related taxation measures are havingan impact on the profile of the UK car fleet. In the comingyears, diesel—which is more fuel eYcient and hence lower carbon—is expected to compete with petrol for at least an equal share of the car fuels market. Diesel took a record 23.5% market share of new car registrations in 2002 compared with 5% in 1990 (SMMT, 2002). Recent budgets have already supported a shift in focus towards new and emerging fuels that have the potential to produce lower CO2 emissions. The current structure of fuel duty incentives is however not well equipped to deal with tomorrow’s low carbon fuels. It does not distinguish fuels accordingto their “well- to-wheel” emissions—it only accounts for the exhaust emissions from the vehicle and does not account for the emissions created in the upstream production and distribution of the fuel. The graph below, taken from ippr’s Tomorrow’s Low Carbon Cars report (Foley, 2003), shows the well- to-wheel emissions for various fuels, measured in grams of CO2 equivalent per kilometre, compared to their duty breaks. The well-to-wheel emissions were extracted from the 2002 GM study of advanced fuel and vehicle systems in Europe conducted in partnership with various fuel suppliers. The graph shows that both the biodiesel and bioethanol options produce less well-to-wheel emissions than Liquefied Petroleum Gas (LPG) or Compressed Natural Gas (CNG). Yet biofuels currently receive a higher rate of duty than road gas fuels.

Relationship between fuel duty and well-to-wheel greenhouse gas emissions

1.60 Petrol 1.40 Ethanol from woody biomass Diesel

1.20 Ethanol from sugar beet 1.00

0.80 Rape methyl ester 0.60

0.40

Duty in pence per megajoule per in pence Duty CNG LPG 0.20

0.00 0 20 40 60 80 100 120 140 160 180 200 220 240 Greenhouse gas well-to-wheel emissions (in grams of CO2 equivalent per kilometre)

Are biofuels missing out?

The CO2 benefits of diVerent types of biofuels will vary accordingto the crop source and the energ y used in the process of growing and cultivation. There are fairly wide variations in the well-to-wheel CO2 emissions oVered by diVerent types of biofuels, although it is generally the case that ethanol produced from woody or lignocellulosic crops oVer the lowest CO2 emissions. The 2003 Budget states that the Government is particularly keen to support the development of bioethanol from woody biomass. But, at present the technologies for convertingwoody biomass and wastes into liquid transport fuels is in its early stages of development. They are currently more expensive than established technologies for converting food crops like oil seed rape and sugar beet into liquid fuels (Eyre, Fergusson and Mills, 2001). 9098191047 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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What Does the Government Need to do to Make it Happen?

Encouraging the shift towards low carbon fuel taxation Feedback from ippr policy seminars suggests that both vehicle manufacturers and fuel suppliers would welcome longer term price signals based on climate change objectives. Uncertainty about the Government’s longterm intentions regardingfuelduty often means that companies are ca utious of makinglongerterm investments in alternative fuels. In the 2003 Pre-Budget Report, HM Treasury acknowledged the need for certainty on fuel duty diVerentials and committed to establishingan “Alternative Fuels Framework ” to guide the duty regime for alternative fuels. This is a welcome first step in the right direction. ippr has recommended that HM Treasury should develop diVerential rates of fuel duty for alternative fuels based on well-to-wheel CO2 emissions. This would have the advantage of helping the Treasury to develop a clear, long term strategy for fuel duty based on supportingthe transition to low carbon vehicles. It would help to: — Distinguish and reward lower carbon forms of fuels—this would help to diVerentiate fuels not only by their exhaust emissions but also the emissions created in the production and distribution of the fuel. — Send a longer term price signal of the Government’s commitment to lower carbon transport fuels—this would help to give fuel suppliers and car manufacturers greater certainty to make longer term investments in lower carbon fuels and car technologies. — Provide a benchmark for comparingthe environmental performance of curr ent and emerging fuels—this would help to provide greater transparency in how duty incentives for alternative fuels are developed.

Supporting the Demonstration,Development and Commercialisation of Future Hydrogen and Fuel Cell Vehicles The Government should financially support demonstrations that: (i) Promote regional hydrogen and fuel cell vehicle partnerships. There are currently hydrogen demonstration partnerships (with the regional authorities, fuel suppliers and vehicle manufacturers) beingdeveloped in London and Tees Valley. These hydrogen partnerships will provide an opportunity to test hydrogen and fuel cell vehicle and refuellingtechnologiesin real world conditions and raise public awareness of their environmental benefits. The Tees Valley Hydrogen Partnership has helped to put the North East on the map as a leading region in the development of low carbon energy technologies. A number of major fuel suppliers and vehicle manufacturers have signed up to these partnerships and will be helping to finance demonstrations. (ii) Identify first mover markets for introducinghydrogenrefuellinginf rastructure. The Government and the newly created Low Carbon Vehicle Partnership (a joint government-industry partnership) should identify vehicle markets where the introduction of hydrogen refuellinginfrastructure could be first developed and tested. Bus or delivery vehicle fleets would be good startingpoints. Buses are particularly good candidates for hydrogen because they refuel at depots and have fixed routes. Many lessons could be gained regarding the most practical way of storing hydrogen and the development of safety standards.

Collaborate with other member states to pool resources and share results The European Commission has fundingfor R&D as well as demonstration proje cts which is channelled through its Research Framework Programmes. The Fifth Research Framework Programme (1998–2002) earmarked ƒ120 million (£90 million) to hydrogen and fuel cell research. In the Sixth Research Framework Programme (2003–06), research on sustainable energy and transport has a budget of ƒ2.1 billion (£1.5 billion) from which fundingfor hydrogenand fuel cell projects will be drawn. The EC recently formed a High Level Group on Hydrogen and Fuel Cells involvingbusiness leaders from major fuel suppliers and vehicle manufacturers. The UK is currently participatingin a European wide hydrogen fuel cell bus research project—the Clean Urban Transport for Europe (CUTE) project. A priority for further collaborative research projects should be to find ways of producingand storinghydrogen, developinghydrogenrefuellinginfrastructure and settingsafety stand ards.

Provide venture capital funding The area where Government support for technological innovation has been weakest is in relation to product development and commercialisation. Turninga prototype idea int o a commercially viable product requires considerable capital investment. Developinginnovative ideas for hydrogen and fuel cell vehicle technologies is particularly costly and risky to business. The Government should help to shoulder some of this risk through the provision of venture capital grants. The Low Carbon Innovation Programme (LCIP), run by the Carbon Trust, already provides venture capital funds for helping to get new and emerging low 9098191048 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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carbon technologies to the market place but it only has small pots of money to allocate to hydrogen and fuel cell projects. The Government should provide additional fundingfor venture capital grants specifically targeted at the development and commercialisation of hydrogen and fuel cell vehicle technologies. This additional fundingcould also be channelled throughthe LCIP.

Broader Measures A wider set of measures will play a vital role in facilitatingthe adoption o f alternative fuels and vehicles. These include: — Promotingthe adoption of common standards for novel fuellingand infras tructure systems. — Setting suitable health and safety guidelines and regulations to ensure that new technologies are secure and deserve to gain public confidence. — Usingplanningguidelinesto facilitate the production of alternative f uels (for example bio-fuels) and the development of fuel infrastructure (eghydrogentransport and fue lling). — Information for consumers about the reliability, environmental impacts and costs of alternative fuels and vehicles. However, information will not work by itself and needs to be linked to suitable economic incentives. — Information/education and the stimulation of public debate about novel technologies with the aim of enhancingpublic understandingand enablingtechnologicaldevelopme nt to take place within the boundaries of public acceptability. — A key, and unresolved issue, is the degree to which public sector engagement in the financingof new fuellinginfrastructure is required. History demonstrates that many major infrastructure developments have been financed entirely from private sources, within the context of a supportive planning/regulatory framework. But some argue that the major investments required for alternative transport fuel systems will not take place without significant public sector support.

Note The Institute for Public Policy Research (ippr) is the UK’s leadingprogre ssive think tank and was established in 1988. Its role is to bridge the political divide between the social democratic and liberal traditions, the intellectual divide between academia and the policy makingestablishment and the cultural divide between government and civil society. It is first and foremost a research institute, aimingto provide innovative and credible policy solutions. Its work, the questions its research poses and the methods it uses are driven by the belief that the journey to a good society is one that places social justice, democratic participation and economic and environmental sustainability at its core. ippr has no commercial interests or investments in any fuel or vehicle technology.

References DfT (2003) Managing Our Roads. Department for Transport. EST (2002) Pathways to Future Vehicles. A 2020 Strategy by the Energy SavingTrust. Eyre N, Fergusson M and Mills R (2002) Fuelling Road Transport. Implications for Energy Policy. Energy Saving Trust (EST), Institute for European Environmental Policy (IEEP) and National Society for Clean Air (NSCA). Foley J (2003) Tomorrow’s Low Carbon Cars. Institute for Public Policy Research. Foley J and Fergusson M (2003) Putting the Brakes on Climate Change. Institute for Public Policy Research. Foley J (2001) H2: Drivingthe Future. Institute for Public Policy Researc h. GM (2002) General Motors Well-To-Wheel Analysis of Energy Use and Greenhouse Gas Emissions of Advanced Fuel/Vehicle Systems—A European Study. Conducted by L-B Systemtechnik GmbH in collaboration with BP, ExxonMobil, Shell and TotalFinaElf. ICCEPT (2002) Assessment of the Technology Options for Addressing Climate Change. Report for the Prime Minister’s Strategy Unit by Imperial College Centre for Energy Policy and Technology. Monks Partnership (2003) Company Car UK 2003 Report. SMMT (2002) Towards Sustainability. The Automotive Sector. Third Annual Report by the Society of Motor Manufacturers and Traders. Julie Foley Senior Research Fellow Sustainability Team, ippr 9 January 2004 9098191049 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 228 Transport Committee: Evidence

Memorandum by Lex Vehicle Leasing (CAR 47)

CARS OF THE FUTURE

1. Lex Vehicle Leasing (LVL)

1.1 We welcome the opportunity to submit evidence to this inquiry. LVL is a joint venture between HBOS Plc and RAC Plc and we have specialised in the fundingand managementof vehi cle fleets since 1955. We currently operate a fleet in excess of 100,000 vehicles, the fifth largest in the UK. We have enjoyed the highest rate of organic growth of any company in our industry. 1.2 We place a high value on the customer service experience, this includes influencingand advising customers on vehicle procurement to meet cost, health and safety and environmental objectives. As requested, we have focused our evidence on the role of taxation on vehicle choice within company car fleets. 1.3 The data used in this memorandum is predominantly based on our car contract hire fleet, which currently stands at approximately 73,000 vehicles.

2. Introduction to Company Car Choices

2.1 Most customer fleets can be broken down into two distinct categories:

Job need users

These drivers tend to have little choice of car and are allocated a vehicle as a “tool of the trade”. The policy influencers will choose cars based on cost and suitability of the vehicle for the employee to carry out their duties. Generally, consideration will also be given to CO2 levels to ensure employee taxation is mitigated as far as possible. True job need users are rarely oVered any cash alternative to the company car. These drivers typically drive very high mileages in order to practice their employment.

User chooser

These drivers are entitled to a company car by virtue of their position within the organisation and the need for their employer to provide competitive employment terms. They are likely to have a wider choice of vehicle and often have complete open choice. The level of car entitlement is frequently dictated by a “lease allowance” with which the driver may choose a vehicle to suit their own requirements. User choosers can often trade up or down from their grade and in most circumstances can trade out to a cash alternative and fund their own vehicle. CO2 emission levels are a key influencer on car choice within this population.

CO2 emission levels therefore tend to be influenced by the policy decision makers in the job need category but more by driver personal choice in the user chooser category.

Drivers who opt out of their company car and take a cash allowance do not generally focus on CO2 emission levels when choosingtheir car, other than by virtue of the fact th at CO2 is broadly linked to fuel eYciency.

3. Review of the Current Company Car Tax System

3.1 The introduction of the CO2 based company car tax system in April 2002 has had a considerable impact on car choice within our customer’s fleets. Previously, the environmental performance of a vehicle had little influence on car choice but today many company car drivers are mitigating potentially high tax liabilities by choosingmore CO 2 eYcient vehicles.

It is worth notingthat whilst CO 2 levels have reduced to mitigate tax, drivers are generally not downsizing their cars. The average list price of cars delivered has broadly remained stable since 1999 and the average engine size has only fallen marginally, from 1,916 cc in 1999 to 1,869 cc in 2003. 9098191049 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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3.2 The following graph illustrates the average CO2 levels since January 1999 on vehicles delivered to our customers: Lex Vehicle Leasing Average Co2 emissions of delivered vehicles since January 1999

200 195 190 185

g/km 180 2 175 Awareness of new tax regime 170 Average Co Average 165

160 Commencement of new tax regime 155 150 January 99 January 00 January 01 January 02 January 03

3.3 The following table highlights the reduction in average CO2 level per vehicle within our customers’ fleets as compared to the average CO2 emissions for all new car registrations in the UK.

Year LVL average Average CO2 all DiVerence (g/km) CO2 (g/km) new cars (g/km)* 1999 192.8 185.0 !7.8 2000 187.7 181.0 !6.7 2001 178.6 177.6 !1.0 2002 169.8 174.2 "4.4 2003 165.6 N/A N/A * Source—Society of Motor Manufacturers and Traders. 3.4 The results above clearly show that the company car tax changes introduced in April 2002 have influenced vehicle choice and CO2 levels have fallen at a higher rate than they would otherwise have done. Company cars beingdelivered to our customers now have averageCO 2 levels below the average across all new car registrations, indicating that the retail car market is now less CO2 eYcient than the company car market.

4. Alternative Fuel Vehicles 4.1 The company car tax regime introduced in April 2002 appears to have had minimal impact on influencingthe use of alternative fuel vehicles. The followingtable show s the number of alternative fuel vehicles delivered to our customers:

Fuel type 1999 2000 2001 2002 2003 LPG/CNG 1 33 26 66 93 % of total deliveries 0.01% 0.16% 0.11% 0.26% 0.39% Hybrid electric 0 0 1 0 9 % of total deliveries 0.00% 0.00% 0.00% 0.00% 0.04%

4.2 The potential reasons behind the low uptake of alternative fuel vehicles are: (a) Cost—the whole-life runningcosts tend to be higherthan equivalent tr aditional fuel vehicles due to higher purchase costs from manufacturers and lower residual values due to uncertainty over the longevity of the alternative. (b) Fuel availability—fuel companies have been slow in providingsu Ycient coverage for LPG refuelling. (c) Model availability—there are few manufacturers oVeringproduction models of alternative fuel vehicles. Conversion of traditional fuel vehicles to LPG is generally considered costly and unreliable. 9098191049 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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All of the above appear to be connected to uncertainty regarding the longevity of current alternatives, perhaps in the light of ongoing fuel cell technology development which is generally viewed in the fleet industry as beingthe next sustainable fuel. 4.3 The followingtable compares the leasingand fuel costs of a Vauxhall Ve ctra Elegance from LVL over three years based on 20,000 miles per annum assumingthe organisation provides 60% of the fuel for the vehicle.

Fuel type 3 year lease costs< 3 year fuel costs* Total lease and fuel Petrol 12,823 3,268 16,091 Diesel 13,276 2,529 15,805 LPG 14,403 2,059 16,462 < LVL costs assuming20% purchase discount and excludingany Powershift gra nt available. * based on current average unleaded fuel costs of 76.4ppl, diesel 78.0ppl, lpg 38.3ppl—source Allstar fuels. The above results show that alternative fuel vehicles are not cost eVective for company fleets without grants being available. The higher cost of LPG is driven by the following price and fuel information:

Fuel type List price 3 year residual value MPG* CO2 emissions g/km Petrol 15,850 4,700 38.2 175 Diesel 16,760 4,900 50.4 151 LPG 17,800 4,550 30.4 157 * source—combined mpgfigureas per www.vauxhall.co.uk As illustrated above, the higher purchase cost, lower residual value and inferior fuel performance contribute to the cost ineYciencies of LPG.

4.4 LVL customer experience Through a sister company, Lex Whitefleet, we provide and maintain vehicles for the Ministry of Defence. Approximately four years ago we supplied pilot fleet of 17 LPG cars to an MOD base. A LPG refuelling tank was also installed at the base. A number of problems arose with these vehicles: — Refuellingo V-site was diYcult initially due to the lack of coverage of refuelling sites. This has improved over the years but could still be better. — Many of the vehicles have had consistent problems relatingto the use of ga s. The manufacturer’s technicians have also been inexperienced in repairingthe technology.Ag ain, this has improved over the years. — Drivers have complained over lack of boot space and reliability. Due to the problems highlighted above our customer has decided not to lease any further LPG vehicles.

5. Increase in Diesel Use 5.1 One of the side-eVects of the new company car tax regime is the increased popularity of diesel cars. Diesel technology is such that CO2 emissions are lower than equivalent petrol vehicles however emissions of local pollutants such as sulphur are higher. 5.2 Despite an additional tax penalty for diesel cars not meetingEuro IV em ission standards, diesel cars are still generally more tax-eYcient than petrol cars therefore their popularity has increased substantially. Many of our customers now operate diesel only policies, for example one of our largest customers, a well known food distributor, operates a diesel only policy with a ceilingof 200 g/km CO2 for its 900 company cars. This policy was introduced three years ago in direct response to the forthcomingtax changes. The increase in popularity of diesel cars within our customers is highlighted below:

1999 2000 2001 2002 2003 Diesel cars delivered 4,231 5,495 10,967 12,744 13,579 % of total deliveries 22.72% 25.92% 44.78% 49.97% 57.65%

5.3 The percentage of all new registrations in the UK in November 2003 that were diesel was 31.1%.* The percentage of diesel cars delivered to our customers in November 2003 was 61.8%. The concern for fleet providers is the ability of the retail market to absorb such a high percentage of diesel cars at the end of their 9098191050 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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company contracts. This has resulted in lease providers such as ourselves reducingpredicted residual values on diesel cars. In 1999, a three year, 20,000 miles residual value of a Vauxhall Vectra diesel car would be approximately 9% higher than the petrol model. Today, that value is approximately 4.2% higher. This issue is further compounded by the fact that diesels are likely to become even more popular now that many manufacturers now oVer Euro IV compliant vehicles that escape the diesel tax penalty. * Source—Society of Motor Manufacturers and Traders.

6. Decrease in Use of Cars with Automatic Gearboxes

6.1 A further but lesser side-eVect of the introduction of the CO2 based company car tax regime is the number of drivers movingout of cars with automatic gearboxesinto those wi th manual gearboxes. Automatic cars tend to have higher CO2 emissions than equivalent manual versions. Drivers are therefore potentially choosingvehicles that do not suit their drivingpreferences in order to save tax. 6.2 The number of automatic cars delivered in 1999 was 2,712 or 14.5% of the total. In 2003 this was 2,201, or 9.3% of the total. This equates to a 35.8% reduction in the use of automatic cars over the period.

7. Cash for Car Arrangements 7.1 Most organisations now oVer a cash alternative to the company car to some or all of their employees. Cash alternatives have increased in popularity partly due to increases in company car taxation since the mid- 1990s and partly due to employers seekingto provide more flexible and attra ctive packages to employees. 7.2 Taxation has also been the catalyst for the creation of “structured” cash for car schemes which enable organisations to save money by utilising employee tax savings and tax-free business mileage allowances. Under these schemes the employee funds a car via a Credit Sale Agreement arranged by the employer on their behalf. The employer pays a cash allowance plus tax-free business mileage allowances and the employee contributes part of their tax savings. The schemes are structured in a manner to ensure that the employees see little diVerence from a traditional company car scheme.

7.3 Cash for cars schemes whether “structured” or not usually remove focus on CO2 emission levels. Lex FreeChoice, the personal leasingdivision of LVL, provides vehicles unde r Credit Sale Agreements to cash for car takers as well as general retail business. The average CO2 emission level of the 2,160 vehicles delivered by Lex FreeChoice in 2003 was 185.7 g/km, 11% higher than those delivered to customers with traditional company car policies. 7.4 Increases in cash for car popularity have resulted in increased use of personal cars for work. This presents further challenges to organisations in exercising their duty of care to ensure that these vehicles are insured for business use and that they comply with health and safety regulations.

8. Other Taxation Measures

8.1 VED Changes

The change to CO2 based VED has had little focus from a fleet user perspective, other than through a general focus on CO2 largely driven by driver tax liabilities. It is therefore unlikely that the VED changes have significantly contributed to the lowering of CO2 emission levels in company fleets. This reason for this is likely to be due to the fact that diVerence in VED has minimal cost impact for fleets compared to other motivators such as Class 1A National Insurance and employee taxes.

8.2 100% Capital Allowances

The 100% capital allowance for vehicles emittingless than 120 g/kmof CO 2 is likely to influence fleets that outright purchase their vehicles as opposed to leasing therefore we are unable to accurately reflect on the success of this measure. We can advise that we delivered 359 such vehicles in 2003 (1.5%), compared to none whatsoever in 1999.

9. Future Concerns

9.1 The Inland Revenue have provided CO2 taxation rates until 2005–06. In order to maintain 2003–04 taxation levels for the next two years, new car CO2 emission levels must fall an average of 9.1%. The average reduction in new car CO2 emission levels within our customer base over the last two years is 7.2%. However, this reduction this was from a high starting level and on the back of significant advances in new vehicle technology to reduce CO2 levels. It is questionable as to whether we will see a continuingadvancement in veh icle technology to enable fleet drivers to avoid increases in taxation. Within LVL we have seen CO2 emission levels on new vehicles delivered level out. The rate of reduction in CO2 levels has steadily slowed over the last year and since July 2003 CO2 levels have not reduced at all, as can be seen in the graph in 3.2 above. 9098191050 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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If the Government choose to increase taxation levels from 2006–07 without full evaluation of potential technology advances, more drivers could be forced out of their company cars into older, less eYcient vehicles. 9.2 The average company car contract is approximately three years—many companies operate cars for four or more years. CO2 taxation rates are known until 2005–06 whereas a four year contract will run into 2007–08. Uncertainty over future taxation rates makes it diYcult for organisations to make confident fleet policy decisions. 9.3 As noted above, the percentage of diesel cars within company fleets now outweighs petrol cars and this percentage is likely to continue to rise. There is growing concern over the capacity of the retail market to absorb such a high percentage of diesel cars at end of contract. This could ultimately lead to a rise in the whole life cost of diesel cars with a consequent fall in their popularity.

9.4 Cash alternatives continue to increase in popularity. As the focus on CO2 is not as significant in the private car market, drivers takingcash will on averagechoose a car with hi gher CO2 emissions thereby potentially underminingthe progressmade within the company car market. Gerard Gornall Associate Director—Acumen Team Lex Vehicle Leasing 19 January 2004

Memorandum by IEEP (CAR 48)

CARS OF THE FUTURE

Introduction 1. IEEP is an independent institute, specialisingin European environmen tal policy, and the environmental and sustainability dimensions of sectoral policies includingtransport. IEEP’s transport team has a longtrack record of workingon policy analyses in the transport secto r, includingtechnology assessments and fiscal and economic instruments, in particular. We undertake work on our own account, alongwith commissioned work for clients includingthe DfT and DEFRA and th eir previous incarnations; the European Commission; the Royal Commission on Environmental Pollution; UNEP; and various NGOs on a wide range of transport policy questions. 2. One particular strand of our work involves alternative transport fuels and energy use, recently involvingwork for the Performance and Innovation Unit; a collaborative r eport with the National Society for Clean Air and the Energy Saving Trust; a stakeholder consultation on biofuels for road transport; and a major contribution to a recent ippr report on transport CO2 emissions. 3. We also address broader trends in transport policy, for example through contributions to the New Horizons Programme and the Tyndall Centre in the UK; participation in the EU Foresight Programme; and ongoing work on car sharing in developed countries. Malcolm Fergusson, IEEP’s Senior Fellow on transport policy, is also a member of the SteeringGroup of the Low Carbon Ve hicle Partnership, and of DfT’s External Research Advisory Group.

Clean Vehicle Technology

What fuels will be used to drive the vehicles of the future? 4. Some of the alternative fuel options currently available are unlikely tooVer significant long-term benefit. LPG oVers some environmental benefits over petrol and diesel cars, but these are not large and will be eroded as conventional petrol and diesel cars become cleaner and more eYcient in the comingyears. CNG oVers advantages in terms of emissions and noise in particular for heavy diesels, but users must install their own refuellinginfrastructure at depots, and the compressors needed to pu mp the gas into a pressurised tank on the vehicle are expensive. Battery electric vehicles have some obvious environmental benefits (zero emissions at the point of use, and very low noise levels), but they continue to suVer major limitations in terms of performance, range, recharging times, and availability of recharging infrastructure. 5. In the longer term, hydrogen used in fuel cell engines now oVers real prospects of zero-emissions, at least at the point of use. Such vehicles would also be virtually silent and possibly very reliable, and would oVer a range of other benefits to users. However, it is likely to be several decades before such vehicles become commercially available. Perhaps more important, the full environmental benefit can only be realised if the hydrogen used comes from renewable sources, which is not an imminent prospect. Our research illustrates that a surplus of renewable electricity to manufacture hydrogen will not be available in the UK for a very longtime to come, and arguesthat biomass should be considered as an additi onal source of renewable power, which might be used for heat, electricity or road fuels. 9098191051 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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6. In addition, liquid biofuels oVer the possibility of producingliquid fuels for conventional motor vehicles from non-fossil sources. In principle they can oVer diversification away from oil-dependence and a substantial reduction in carbon dioxide emissions, although in practice, the scope may be rather more limited. This is a complex and controversial area. 7. In the short to medium term, we can expect to see sustained improvements in the fuel eYciency of conventional engines, in part through increased use of hybrids in many classes of vehicles. The latter are already on the market for a small number of car models. These allow much cleaner, quieter and more eYcient runningbecause they smooth out the “stop-start” profile of urban tra Yc. In a hybrid, a small internal combustion engine generates power much more eYciently than in a conventional vehicle. This is not only because the engine is smaller, but also because it can be operated at near maximum eYciency during most of its operatingtime, because it does not need to provide all the power required duringperiods of high engine load. In a parallel hybrid, auxiliary power is supplied by an electric motor duringstart up and acceleration, usingelectricity generatedby the internal combustion en gine and stored in a battery, thus providinggreatere Yciency overall. 8. It should be stressed that hybridisation is not a “dead end” or a direct alternative to the fuel cell; on the contrary, many aspects of hybrid technology would also be essential for the development of a fuel cell car. Recent research for DfT also emphasises that there is considerable scope for fuel eYciency improvements through this route; and a further advantage is that hybrids could be used with liquid biofuels, which could be important if the hydrogen/fuel cell option fails to materialise.

9. Environmental concerns—especially over CO2—will be one factor in the development of future vehicle types, but only one of many. All future vehicle types will still need to fulfil a wide range of other expectations as well.

To what extent will they solve environmental problems? 10. There are now real prospects that alternative transport fuels might, if deployed widely, solve or help to solve some of the most important environmental impacts of transport—most notably CO2 emissions, but also noise and other pollutants. However, they will clearly do little or nothingto mitigatesome of the other impacts of road transport, notably the demand for large areas of land for roads, car parks, and service stations; severance of communities and habitats; impacts on landscapes and recreational areas; congestion; deaths and injuries; etc. 11. No source of energy supply, including renewable ones, oVers a “free lunch” in financial or environmental terms. It should therefore be stressed that demand management and eYciency of energy use will remain vital for the transport sector in the future. Also, if alternative fuels are deployed in the transport sector, any reduction in energy demand through transport demand management or energy eYciency will have a disproportionately large benefit in terms of reducing greenhouse gas emissions, because a given quantity of renewable fuel will displace a larger proportion of the conventional fossil fuels currently in use.

How successful have Government grant and tax break initiatives been to date? 12. Contrary to some claims, the Fuel Duty Escalator was successful in limitinggrowthin transport fuel consumption, but it was discontinued in the face of risingoil prices. As th e Committee is well aware, the evidence of commercial disadvantage to UK road hauliers from the duty rates was not entirely well founded, but was still important in focussingopposition to fuel duty policy. There still appears to be considerable nervousness in government at the idea of returning to real increases in road fuel duties. A switch of some of the tax burden to road charging should help to address this, but might reduce the impetus for greater fuel eYciency, especially if imposed in a revenue-neutral way. 13. Within the context of individual road fuels, duty diVerentiation has been particularly eVective in drivingcertain aspects of fuel quality—most notably unleaded petrol, an d ultra-low sulphur petrol and diesel. In the near future, the same approach appears set to help bring“sul phur free” fuels into the market. 14. For LPG, the fuel duty payable is much lower than for petrol and diesel; grants are also available from the Energy Saving Trust to convert cars to LPG; and they are exempt from the London congestion charge. These arrangements have thus far been successful in helping to put over 100,000 LPG cars on the roads, and to develop a fairly wide national network of around 1,350 LPG pumps at fillingstations. Although this has been a substantial achievement in itself, it has been achieved at high cost, and with only a very limited environmental benefit. It should however be stressed that a relatively high level of subsidy was necessary to bringsignificantnumbers of these vehicles onto the roads.

What does the Government need to do to make it happen? 15. PoweringFuture Vehicles is to be commended as a helpful strategicfram ework in this context, but more concrete steps are likely to be needed to drive advanced vehicle and fuel technologies. To be most eVective, it is likely that all the available policy levers will need to be used. Recent changes to company car taxation and VED have been helpful steps forward in terms of encouraging low-carbon vehicles. 9098191051 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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16. The Treasury’s commitment in the 2003 pre-Budget Report to develop a new framework for the taxation of biofuels is important and very welcome. Some important observations can be made, however. Even for a single product such as bioethanol, the full life cycle greenhouse gas emissions can vary enormously accordingto the feedstock and conversion processes used. Als o, in the nature of a biofuel, its carbon content is no guide to its net carbon impact. For these reasons, it is essential that the tax basis should reflect well-to-wheels assessment rather than simply the carbon content of the end product, but this requirement will be a substantial challenge to current practice. A further important point is that the LPG experience illustrates that a duty reduction based only on the net carbon benefit of an alternative fuel in unlikely on its own to stimulate a major shift in demand. 17. More generally, a wider and more active system of inducements for research, development, demonstration and early deployment of novel vehicle technologies is likely to be needed if the UK is to play a leadingrole in developingthe car of the future.

Vehicle Design and Control

Is there a trend to bigger and heavier cars? 18. Average passenger car fuel economy improved very little in the years prior to the EU voluntary agreement with car manufacturers, which was agreed in 1998–99. However, the eYciency of internal combustion engines has improved continuously. There are four main groups of reasons why this improvement has not translated into downsized engines and reduced fuel demands: — There has been a degree of “size inflation” in cars over the years—that is, people are on average buying larger cars—and the additional weight has required additional motive power. This trend results not only from people “tradingup” to a largerclass of car, but also t o a gradual “size inflation”, ie an increase in the size and weight of specific car types. A classic illustration of the latter point is the fact that the current (Mk IV) Volkswagen Polo is larger than the earliest (Mk I) VW Golf. — Consumer expectations of the “driveability” of cars have resulted in increases in average power to give better acceleration, a smoother ride, etc, and this adversely aVects fuel eYciency. — Ancillary demands for power in vehicles are increasing, for a range of reasons. One is the trend towards additional accessories and “luxury” features fitted as standard, some of which bringtheir own environmental problems. Perhaps the most important example of this for the near future is that air conditioningis expected to become virtually universal in new car s in the comingyears, even in cool temperate markets such as the UK. Beyond this, a growing range of servo control systems are expected to move from hydraulic to electrical (as they have in aircraft, for example) as the latter are more eYcient, responsive, reliable and cheap to manufacture. — Ever-tougher safety standards (eg for side impact protection) have in the past added significantly to the weight of some car models. With good design this eVect can be kept to a minimum, but it is a further constraint which can work against the requirements of light weight and eYciency. 19. A number of these trends are exemplified by the increased uptake of large and luxurious sport utility vehicles. As against this, however, the voluntary agreement does appear to be drivingdown CO 2 emissions on average, and the adverse trends noted above are not monolithic or necessarily irreversible.

What influence does the UK Government have in a global car market? 20. As the question implies, the UK alone has limited influence on the global car market. The EU, in contrast, represents a large and rapidly growing market, and will do so all the more after its enlargement in May 2004. In relation to vehicle emissions standards, safety requirements, the voluntary agreement with car manufacturers on CO2 and elsewhere, the EU has already demonstrated a positive influence, and will continue to do so. These are also areas in which the UK has a relatively good story to tell, and can play a leadership role.

Vehicle Use

If drivers paid for road use through a national satellite location system, what else could the technology be used for and what are the implications?

21. Numerous reports indicate a link between excessive vehicle speed and both the rate and severity of road accidents. It is, however, less well appreciated that, in most circumstances, excessive speeds also contribute to excess fuel consumption, noise and exhaust pollution. Any system which closely identifies the 9098191051 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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type of road upon which a vehicle is travellingalso o Vers the possibility of introducinga system of intelligent speed adaptation, whereby the vehicle’s speed was automatically monitored or limited to the speed limit of the road in question. Such a development could make a major contribution to both safety and the environment.

To what extent will car-share clubs and leasing replace buying a car?

22. The traditional pattern of car ownership is expensive for individuals, and the level of utilisation of most private cars is very low. This, coupled with pressures on residential parking, etc, suggests that car sharingshould become increasinglyattractive. In the UK, however, the la rgest scheme to date is in Edinburgh which has nearly 200 members. However, the majority of other schemes have fewer than 70 members. In comparison with numbers in the USA on the continent, where national membership levels reach as high as 43,000. The UK clubs seem thus far to be failing to attract suYcient numbers to make car share clubs a viable option for reducingcar use and its associated problem s. 23. The failure of car clubs to take oV in a similar manner to those abroad can be attributed to a number of reasons. In Switzerland, the role of the federal government is widely seen as havingplayed a very important part in the success of car sharingboth in terms of financial backi ng, marketing and administration of the scheme. Some degree of government support is also a characteristic of successful schemes elsewhere. Germany is perhaps the exception to this, with profit-makingorganisation s runningthe schemes. In comparison, in the UK car share clubs have tended to be small-scale schemes and applied on an ad hoc basis without the necessary support of the government. A more unified approach which provides suitable financial backingand marketingof car club schemes could presumably result in compa rable levels of membership to those seen abroad and accordingly accrue the associated benefits that these car clubs have achieved. Studies in countries where car clubs are successful have suggested that the potential for their use is even higher, although barriers remain to this potential being realised. 24. Whilst it is unlikely that car share clubs will result in car drivers abandoningtheir cars en masse, research shows that they do help to reduce car use and journeys, in particular they allow two-car families to get rid of their second car. They may also be attractive to marginal motorists who do not currently own a car, but might otherwise be tempted to acquire one. Therefore, car share clubs should be seen as a useful tool to reduce car use, particularly in conjunction with other mobility services such as car pooling.

Will technology be brought in through commercial vehicles first?

25. For some novel engine technologies, it can be more attractive to bring them in first in larger commercial vehicles, as the space and weight demands of new equipment (eg additional engine components, larger fuel tanks) are less of a constraint. Novel fuels (eg gases) are also easier to introduce in fleet vehicles where these can be refuelled at depots overnight, and under expert supervision. The introduction of fuel cell buses in London and elsewhere illustrates both of these features. This is not universally the case, however; hybrid technology may well find its first and best applications in cars or light vans. 26. In relation to “intelligent” technologies to be used for road user charging, it also seems clear that commercial vehicles will be the leadingapplication. Three EU Member Stat es—Germany, Austria and the UK—are in the process of developingcomprehensive infrastructure chargi ngschemes for commercial vehicles, which would all be introduced over the next three years or so. The UK intends to introduce a charging scheme that would apply to all commercial vehicles over 3.5 tonnes usingthe entire national road network. A similar system has already been in operation in non-EU Member State Switzerland for a number of years. Hence, technology that enables commercial vehicles to be charged accordingto their road use is already in use. 27. Note that, at the moment, there are two competingtechnologies:microw ave technology and a GPS- based system. It is understood that a proposed EU Directive will ensure that these two technologies are interoperable, although it will probably not choose between the two leavingit up to Member States to decide. The implementation of the German system, which is based on a GPS system, is currently on hold as a result of problems with the technology. The Swiss and proposed Austrian systems, however, use microwave technology, which has been proven to work. The latter also appears to be the favoured technology for the UK system. 28. In either case, clearly lessons from the introduction of these systems would be applied to the future introduction of any road user charging system for passenger cars. Trucks are clearly the logical place to start in terms or road charging, however, in that they are far fewer in number than cars; many are in large fleets with a single operator; and trucks present particular issues for road charging at the Continental scale. January 2004 9098191052 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by PSA Peugeot Citroe¨n (CAR 49)

CARS OF THE FUTURE

Introduction PSA Peugeot Citroen is the 6th largest motor manufacturer in the world and the 2nd largest in Europe. The Group sells in excess of three million vehicles worldwide and employs over 200,000 people. In the UK it employs 10,000 people, 4,000 of whom work at the Ryton car plant near Coventry which in 2003 produced 210,000 Peugeot 206s making PSA the 3rd largest vehicle manufacturer. The Group sold over 302,000 Peugeots and Citroens in the UK in 2003 again making it the 3rd largest car sales organisation. PSA Peugeot Citroen UK welcomes the opportunity to submit it’s view of “Cars of the future” to the Transport Select Committee.

PSA Group Viewpoint The Group supports the Low Carbon Vehicle Partnership and the Society of Motor Manufacturers and Traders has incorporated many of the Group’s views in the submission to the Select Committee. By making an independent submission the Group is able to be more specific than the industry submission, which by definition would have to be more generalist.

AVordable Technology As a fundamental principle in all of its work on developingcars of the futur e, the Group believes that it must provide aVordable technology that the mass-market can access. It is of limited value to develop expensive and over sophisticated solutions that are not taken up and can never therefore present a viable solution to the mass-market.

(a) Hybrid Developments The PSA Group has and continues to experiment with hybrid vehicles (witness current Department of Transport challenge being undertaken with our partners Ricardo and QinetiQ). However, the hybrid will always suVer a cost penalty because of the need for two separate powertrains and will therefore not meet the test of aVordable technology. In the short to medium term super eYcient diesel engines will oVer a more aVordable alternative for the average motorist without the need for grant support (egPowershift Programme)

(b) New Developments

Examples of aVordable solutions include the latest Euro IV compliant diesel engine with CO2 emissions of only 106 gms/km, a new award winning stop/start system for small petrol and diesel engines that will reduce fuel consumption in city use by up to 8%, and “Sensodrive”, a semi automatic electrically controlled gearbox that can reduce fuel consumption in town by up to 5%.

(c) Alternative energies/fuels The Group is the world leader in electric vehicles with the Citroen Berlingo Electric van beingthe clean answer to inner city deliveries. As a result of over three years testingall current PSA diesel enginesare no w warranted in fleet operating conditions to run on up to a 30% mix of bio-diesel. This compares with a maximum of 5% for other manufacturers. The Group sees few environmental advantages in LPG but CNG (compressed natural gas) is beneficial in countries were this is in free supply and a specific engine is being developed accordingly. In the long-term hydrogen powered fuel cell vehicles oVer the best prospect for low/zero emissions (dependingon whether the hydrogenhas been produced from renewable sourc es). PSA has developed, and is experimentingwith, such vehicles where the fuel cell acts as a “rangeex tender” by recharging the battery of what is eVectively an electric vehicle. Such vehicles now have an acceptable range of around 250 kms before refuelling. However, there is a great deal of development work required before they are feasible and it is unlikely they will be cost eVective much before 2020. 9098191052 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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(d) Vehicle design, control and use The SMMT submission covers the PSA view adequately in all respects. It is worth notingthat the latest Group vehicles are already 90% recyclable and utilise aluminium and plastic body panels where practical.

(e) What Government can do to help UK Government “encouragement” is vital to move forward the process of more eYcient and environmentally friendly transport solutions and thus keep Britain at the forefront of these new technologies. The following are examples of initiatives that should be considered:

Diesel The UK lags well behind the rest of Europe with 30% of new car registrations beingdiesel compared to 50% on the continent where the benefits of diesel fuel are recognised more widely by fiscal measures. All manufacturers now have low CO2 emittingdiesels and therefore the introduction of a positive di Verential in fuel taxation (even if quite small) will send a positive signal to the public and encourage more private diesel car purchasers.

Business Company car purchases account for 40!% of new car registrations. The new BIK company car tax structure has worked well by encouraging the take up of lower CO2 cars and should not be changed for the next few years to encourage even greater movement. It should be remembered that these cars today are tomorrow’s private buyers used car.

Low Carbon grants Programmes such as “Powershift” have been partially successful in making new technology “Low C” cars aVordable. In future, however, care must be taken to ensure that only vehicles that Government wishes to encourage as long-term solutions to environmental concerns, are included.

Vehicle Excise Duty

The current diVerentials are insuYcient to influence a buyer to choose a low carbon car. Large high CO2 cars should pay a proportionally higher duty.

Congestion charging Almost certainly other major cities will follow London where the charge has been seen to have reduced congestion. It is vital that a level of commonality is maintained in terms of qualifyingcriteria for exemption of the charge. eg vehicles under x gms/km CO2.

Conclusion PSA Peugeot Citroen is dedicated to making cars with increasingly lower emission levels through a programme of “aVordable technology”. In the short to medium term this will largely involve continued refinement of conventional powerplants (especially diesel) and the use of bio fuel additives. In the long-term hydrogen powered fuel cell vehicles are likely to become the best solution. The British Government has a bigpart to play in encouragingthis transitio n both by direct incentives and havingan influential voice in Europe. It is critical that positions are tak en that are in harmony with general European initiatives, so that vehicle makers can justify the huge investments necessary to eVect change significantly. PSA Peugeot Citroe¨n London OYce January 2004 9098191053 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by the Association of British Insurers (CAR 50)

CARS OF THE FUTURE

1. Introduction 1.1 The Association of British Insurers (ABI) is the trade body for UK insurers, and represents around 400 companies. Between them, ABI members provide over 94% of the business of UK insurance companies. The Association represents companies to the Government and to regulatory and other agencies, and provides a wide range of services to its members. (On many matters, the ABI works jointly with Lloyd’s Motor Underwriters’ Association as “Motor Conference”.) 1.2 The ABI welcomes this current review of the Transport Committee on the impact of future developments in vehicles. This submission (a) outlines the role of motor insurance today and the various levers inherent in the way insurers do business which act to incentivise new vehicle developments, (b) highlights a particular area of new technology development being piloted by one UK insurer (related to a pay as you go insurance model), and (c) draws attention to ways in which developments in the future design of vehicles (and associated infrastructure) may impact on motor insurance. Key points are: — Via its key role in the vehicle purchasingdecisions of individuals and fir ms, the cost of motor insurance has an important influence over design and construction choices made by manufacturers. — The cost of motor insurance claims is driven primarily by the number and severity of road traYc accidents, and in particular the personal injury costs of and the cost of repairingor replacingcars involved in such accidents. Thus any initiatives that deliver changes in the types of accidents seen on the roads will have an impact on the level and make-up of insurance claims costs. Assuming that the policy framework isn’t intended to deliver a nil-accident regime, this could be positive or negative in terms of outcomes for motor insurance premiums. — Aside from road traYc accidents, motor insurance premiums also cover the cost of certain vehicle crimes, in particular vehicle theft and uninsured driving. Improved vehicle identification techniques and the greater use of vehicle tracking technology should assist in reducingthe cost of such crimes, and thus the cost of these crimes that is borne by the honest motorist. It should be noted, however, that improved methods of driver identification are key to reducingthese crimes to a minimum.

2. The Role of Motor Insurance 2.1 Without Government intervention, the cost of drivinga car would be the costs of buyingthe car, fuel to run the car, and any costs of repairingthe car. But cars impose costs more widely than those borne by their owners directly. Pollution from exhaust fumes damages the environment, roads are damaged through beingused needingrepair, and third parties (and their property) may be in jured in incidents involvingthe car. These can be thought of as costs or externalities imposed by car drivers on society. 2.2 Given that there are costs imposed by car drivers on society but not borne by the car driver, the cost of drivingis likely to be lower than society may want. Without the driver be aringthese costs, they will choose to drive too often ie more than the socially optimal level, thus leadingto s ociety makingsub-optimal use of overall resources. The Government can intervene in an attempt to ensure that car drivers bear all of the costs egby raisingtaxes on fuel, thus leadingto a better overall use of resource s. 2.3 In the case of the damage caused to third parties in the event of a car accident, the courts can seek to ensure that individuals injured in accidents have the right seek compensation from the liable party. But the losses imposed by accidents are often significantly above the level that canbeaVorded by the liable driver at a given point in time. This results in any promise of compensation through the courts beingsignificantly weakened. The current system of compulsory motor insurance in the UK thus seeks to provide a mechanism for ensuringthat the third party accident compensation costs are able to b e paid, funded by all drivers, who together give rise to the accidents involving third parties and thus create the need for such compensation. (As the insurance covers the costs of injuries to other peoples’ property or person, many individuals— believingthat the courts would not enforce recovery—will choose not to ta ke out the insurance and thus drive uninsured. This is why it is important for the insurance obligation to be enforced, to minimise the extent of evasion.) 2.4 Thus in the UK—in common with many other jurisdictions—an eYcient way of ensuringthat car drivers can aVord to pay compensation for individuals or property damaged by their drivinghas been achieved by subjectingdrivers to a compulsory motor insurance obligatio n, to insure themselves against the risk of causing damage to a third party whilst driving. This is known as risk poolingie givena similar but small risk of any individual causingan accident in any one time period the r isk of an accident is pooled across a large number of drivers with the costs of the accident spread across a number of years. Risk-ratingis the process by which insurers seek to allocate a commercially fair price to individual drivers, takinginto account 9098191053 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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primarily the personal characteristics of the driver(s) and their previous accident involvement. This ensures that drivers statistically more likely (based on the previous claims experience of individual insurers) to cause an accident pay proportionately more into the pool. 2.5 In addition to this compulsory element of motor insurance, motor insurers also oVer “top-up cover” to cover the risk of other perils, whether theft and fire (via the traditional third party fire and theft policy) or own-damage (often known as a fully comprehensive policy). Here, the risk-ratingprocess also takes into account features which will aVect the level of additional claims costs associated with such policies, for example the security of the vehicle and the vehicle’s possible repair and replacement cost.

3. Motor Insurance and Vehicle Design 3.1 Via its key role in the vehicle purchasingdecisions of individuals and firms, the cost of motor insurance has an important influence over design and construction choices made by manufacturers. When purchasinga vehicle, individuals and company representatives increasi ngly take account of the total lifetime costs of owninga particular vehicle and not just the day one purchase price . An important component of these lifetime vehicle ownership costs is the cost of insurance. Thus the indicative ratingof a car for insurance purposes can be a key influencer of the saleability of a particular make and model of vehicle, and thus also of manufacturers’ design choices for new vehicles. Most manufacturers are keenly interested in the cost of car ownership and will invest extensively to ensure the most competitive group ratings (and, thereby, the lowest possible premiums) for their vehicles. Such indicative ratings are prepared for the UK motor insurance industry by the Motor Insurance Repair Research Centre (also known as “Thatcham”). 3.2 The Group Rating System is designed to give motor insurers an indicative relative ratingof each new car model produced for the UK market, to reflect the likely theft or own-damage claims costs that might be incurred in the event of the vehicle beingstolen or damaged.The key compon ent of this ratingis the damageability of the vehicle—and the associated cost of repairs—provided by an assessment of how the vehicle performs under certain crash test scenarios and the costs of repair (takinginto account both the cost of new parts as well as the work involved in repairingthe vehicle to accepta ble standards). The level of security is also tested by Thatcham, and Thatcham’s work in this area with manufacturers has driven key changes in terms of theft-reduction strategies in new vehicle design (see annex A). 3.3 Similarly, Thatcham undertakes work on behalf of UK motor insurers to analyse how vehicle design might be improved to reduce or minimise personal injuries associated with road traYc accidents. A key strand of Thatcham’s work in this area over recent years has been focused on whiplash injuries, which currently feature in 80% of all third party motor personal injury claims. Here, Thatcham’s research—using the latest available crash-test and dummy technology—has shown that the use and design of head restraints and car seats is highly correlated with the severity of whiplash injuries experienced. Via its work with global manufacturers to increase the understandingof whiplash injury, its lead in global discussions about how to design head-restraints and seats to minimise whiplash injury and its publicity work surroundingthis issue (egmakingavailable to the public the results of its research on which cars are safest in terms of their protection against whiplash injury), Thatcham has promoted a step-change in the attitude of manufacturers, who are now increasingly taking account of the need to “design out whiplash” at new-vehicle design stage.

4. New Vehicle Technology—Reducing the Scope for Human Error 4.1 UK motor insurers deal with an estimated 3.52 million vehicle collisions a year (over 9,500 a day) at a cost of £5.1 billion per year (£13.86 million per day). With 6% of such collisions involvingpersonal injury, insurers are all too aware of the human consequences of such accidents. Most of these accidents are caused by human error, rather than vehicle defects. New vehicle technology, that seeks to limit the scope for such human error, could therefore have a huge and welcome implication for reducingthe number of road tra Yc collisions in the UK and loweringcasualty rates. UK motor insurers would w elcome such initiatives, in particular if they were directed at high-risk groups who tend to cause a disproportionate number of accidents (egnewly qualified youngmale drivers). 4.2 Technology that sought to restrict the autonomy of the driver about the way in which the vehicle is driven—whether related to the individual vehicle (egspeed and lane restr ictors) or combinations of vehicles (egminimum permitted distances between vehicles)—could have a largeimp act on the level of collisions. Such road safety goals could also be consistent with other areas of Government interest. TraYc management systems that reduce traYc congestion, for example, might reduce the headline rate of rear-end collisions, reducingthe prevalence of whiplash injuries. 4.3 Insurers accept, however, that a balance needs to be struck between the benefits of such collision- limitingdevices and the costs that would be incurred in introducingthem ( whether infrastructure or vehicle related costs). It would also be important in this context to ensure that drivers received proper education and trainingin the use of new technologicaldevices aimed at reducingroad collisions. 4.4 As part of that cost-benefit assessment, it would be important to assess the impact of the introduction of such devices on motor insurance premiums. With the reduced collision rates—and less severe collisions— it might be assumed, for example, that this would lead to a significant reduction in motor insurance premiums. Whilst this would certainly be the case if these devices were wholly successful in preventingthe 9098191054 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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vast majority of collisions, there are certain issues that need to be borne in mind. These are not arguments against the introduction of safer vehicle technology, but are simply set out here to indicate some of the financial implications of such technology on UK motorists: (a) the cost of settlinga claim involvingthe death of an accident victim ca n be less than had the same victim suVered serious personal injury. This is because the additional cost of providinglong-term care, for example, needs to be taken into account in courts’ decisions about the levels of damages to be awarded. So, if the result of “safer” cars is to lead to a reduction in fatalities, but an increase in the number of serious injuries, the total compensation bill could rise, leadingto higherpremiums for the motoringpublic. (b) if cars become more expensive to repair as a result of makingthem safer f or occupants (for example, by allowingmore of the energyin a collision to be dissipated in th e part of the vehicle in front of the passenger cell), costs to be passed on via motorists’ insurance premiums, will also rise. Makingcars more “pedestrian friendly” could have similar e Vects. (c) more generally, it is also clear that these changes and innovations will come at a monetary cost to the motorist. While there are obvious benefits from the widespread take-up of such technology, the desire for high standards must be balanced against the needs of aVordability and access to transport for those on lower incomes.

5. Motor Insurance and Vehicle Use 5.1 Currently, in settingthe price to be paid for a motor insurance policy, UK motor insurers pay more attention to the characteristics of the vehicle and drivers insured than the actual usage pattern of the vehicle. Only a limited amount of information is typically collected relatingto th e frequency and type of usage of the vehicle ie information about the type of cover required (egpersonal, c ommutingand/or commercial use), the number of drivers and vehicles in the household and the (self-reported) annual mileage that the driver expects to drive over the course of the insurance policy. 5.2 Given the externalities imposed by driving(as referred to above), the question has often been posed as to whether it would be possible to link the payment of insurance to the mileage driven, so that low-mileage users pay less than high-mileage users. At present, once a motorist has agreed a price for an annual insurance premium, there is no direct insurance-related financial incentive on the driver to minimise the use of the vehicle. 5.3 In a competitive market-based system of motor insurance, a key way in which insurers gain competitive advantage is to ensure that the price that they charge individual motorists is as accurate as possible. For a given product, if insurers seek to charge above the actuarially correct rate then they are unlikely to win the business. On the other hand, if insurers under price the risk, then the business is unlikely to turn out to be profitable. Thus having—and being able to make eYcient use of—the best possible information about the risk beingpresented is key to an insurer’s profitabi lity. As such, competition will drive insurers over time to be on the constant look out for additional risk indicators that can help in definingthe most accurate risk-based premium. 5.4 This is indeed the case in motor insurance, where motor insurers typically use over 20 ratingfactors to develop their pricing models. In the area of usage-based pricing, consideration has also been given to the benefits of the extra information available, with insurers supportingthe case for mandatory mileage recordingat the annual MOT to help provide a fraud-proof basis for annual m ileage information. Most recently, a leadingUK insurer (Norwich Union) has started to research in d etail the correlation between the usage of a vehicle and claims outcomes. This research is based on a large-scale pilot, trackingusageand claims experience, with the aid of new vehicle trackingtechnology.For th e purposes of the pilot, the necessary trackingtechnologyhas been added to the vehicles involved in t he pilot. It is expected, however, that such technology will be increasingly available as standard in new vehicles. 5.5 If this research suggests that the type of usage information collected is a good additional predictor of claims costs (and that the benefits of collectingsuch usagebased informat ion outweigh the costs of collecting it) then the UK insurance industry may, over time, shift to collectingand u singsuch information. As a side- eVect, this would mean that this new way of pricingmotor insurance will have a positive spin-oV in terms of providinga further usagebased disincentive for people to use their car s, where information about the extra cost of insurance for a given journey could trigger a further decision about whether an alternative mode of transport (egwalking,cyclingor public transport) should be consider ed if the journey is deemed to be essential.

6. New Technology and Uninsured Driving 6.1 Changes may make cars increasingly injury and theft proof (much like mobile phones are now), but the cost of damaging such high tech machinery will be high. This combined with the increasingpotential for expensive personal injury claims (as fatalities are reduced) could translate into risinginsurance premiums. Insurance companies through the competitive market will continue to develop insurance products tailored 9098191055 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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to meet individuals’ needs at the lowest possible cost for the desired level of cover. But the implications of increasingly advanced vehicles being widely available—or perhaps mandated through regulations—could increase the upward pressure on insurance premiums. 6.2 As both economic theory and our own recent research reveals, higher insurance premiums are likely to lead, without increased eVorts from the insurance companies in partnership with the police and the Government, to greater numbers of uninsured drivers. The Department for Transport is already concerned about the perceived high level of uninsured driving in the UK and has asked Prof. David Greenaway to look at ways to reduce the level of uninsured driving. 6.3 Can technology prevent vehicle crime generally and uninsured driving in particular? Almost certainly it can play an important part, and, indeed, has already done so. Makingcars harder to steal as indicated above, for example, reduces the opportunity for incidents of uninsured drivingon the part of the existing criminal fraternity. This can be achieved through vehicle-based identification and trackingsystems, as it is the status of the vehicle (in this case, stolen) that provides suYcient information for the use of that car to be blocked. 6.4 Uninsured drivingpredominates, however, amongstcar owners who deli berately or accidentally drive uninsured. The technology probably already exists to ensure that only properly authorised, insured individuals are able to drive a vehicle on the road, although it would be a major investment to roll this out to all individuals and vehicles. For example, finger print/iris recognition linked through telemetry to “vehicle and user status” information could prevent an unauthorised person drivinga vehicle. The key here, however, is the need for person-based identification systems to be well-developed: without such a person-based approach, it will be impossible to deny certain criminals the use of the road (egthose without a valid driving licence or insurance). 6.5 While this technology is developed, our research has found that uninsured drivingcan be significantly reduced by the use of matched vehicle and insurance databases to enforce the insurance requirement from the record. This new automatic, rather than manual, tier of enforcement can be introduced in the UK by matchingMotor Insurance Database (MID) records againstDVLA vehicle tax records, directly highlighting the vehicles in use on the road without any valid insurance. Movingto a system of enforcement from the record would allow continuous enforcement of vehicles listed in the DVLA database as having valid road-tax but without valid insurance (as recorded in the MID), remotely targeting their owners with warning letters and potentially fines if a warning does not trigger compliance. 6.6 In our response to the Greenaway review of compulsory motor insurance we highlighted the need for concerted action from all stakeholders, includinginsurers and the Gover nment, as essential if we are to reduce the level of uninsured driving. The key conclusions from our submission are included as Annex B, and together they highlight the need to improve the detection of uninsured drivers, enforcement when detected, and education of drivers about the benefits and limits of their insurance policies if the level of uninsured drivingis to be reduced.

7. Conclusion 7.1 This paper has sought to explain the role of motor insurance and its influence over some areas of vehicle design, the possible use of new technology by insurers under a usage-based insurance pricingmodel and the potential for the increased use of technology to help in the fight against uninsured driving. 7.2 Whilst this paper has sought to flag up the potential benefits of using new technology to improve road safety and to reduce vehicle crime, it has also sought to highlight the potential of such new technology for increasingthe cost of vehicles and motor insurance. If there are to be new r egulations to impose higher standards on new vehicles to be compatible with new technology solutions to these problems, then inevitably a larger proportion of the population will not be able to aVord to drive. For many, then, the car of the future will be a bus, a train or a bicycle. Association of British Insurers February 2004

Annex A

THE ROLE OF MOTOR INSURERS IN IMPROVING NEW VEHICLE SECURITY 1. After peakingin 1992 at 578,000, the number of theft claims received and settled by motor insurers fell steadily each year, to 378,000 in 2001. The total cost of these claims decreased duringthis time from £733 million to £502 million. However, in 2002 there was a worryingincreas e in the cost, to £563 million and in the number of such claims, to 421,000. It is too soon to say why there has been such an increase— although reports from the police suggest that fraud may be on the increase, since most modem cars are not easy to steal by conventional means and thieves are perhaps turningto new m ethods of operation. 9098191056 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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2. Nevertheless, the welcome reduction in car theft can be attributed largely to the incentives put in place by the insurance industry to make vehicles more secure and to encourage the public to take extra security precautions. The car group rating system has undoubtedly been a major success here, encouraging vehicle manufacturers to improve security. Motor premiums can vary by up to 20% between an otherwise identical vehicle with good and poor security. 3. As thieves have developed new methods of overcomingcar security, it has been necessary to increase insurers’ minimum security requirements within the car group rating system. Vehicle manufacturers are currently workingto the fourth revision in a little over 10 years. 4. Clearly, there is no reason for complacency, as the thieves are turningt o other methods of stealingcars. Increasingly, thieves are taking the “easiest” route ie using the ignition key.83 Insurers have reacted to this, where permissible under the terms of their contracts with policyholders, by refusingto meet claims where the keys have not been properly looked after. Nevertheless, stealingkeys from homes or makingo V with cars “warmingup” on the drive are now amongstthe favourite methods, and “c ar-jacking” is not unknown. 5. So how can this be prevented in cars of the future? “Key-less” vehicles—usingother methods of starting/gaining access to the vehicle unique to the driver are clearly one way eg finger print recognition, though these will clearly need to be considered carefully to ensure no danger to human life. Greater penetration of sophisticated tracking/immobilisation systems (eg those that detect and prevent unauthorised drivingaway and can bringstolen cars to a safe stop) should not only help to reduce the incidence of theft but also act as a powerful deterrent. Such systems, if fitted to cars as standard, could be reflected in the car group rating system to encourage the vehicle manufacturers to fit them to more and more vehicles. Wider use of vehicle glazing resistant to attack will help to reduce the incidence of theft from the vehicle—although concerns about individuals beingtrapped followingan accident will need to be addressed. 6. The challenge is to think ahead of the thieves ie once these systems are in place, how else will they try to steal cars? There is probably a limit to what can be done to prevent the physical removal of the vehicle or the theft of its contents. Makingit illegalto remove parts identifying marks and tightening still further vehicle documentation may help to deter theft. But perhaps the solution lies in makingthe car worthless in the hands of the thief—at least those that want to make use of its resale value.

Annex B

KEY CONCLUSIONS FROM ABI SUBMISSION TO GREENAWAY REVIEW Co-ordinated action by all stakeholders is required to help create an environment where the level of uninsured drivingcan be reduced. Insurance companies togetherwith the L loyd’s market and Motor Insurers’ Bureau are committed to makingthe changesnecessary to combat t his problem. Yet, any single stakeholder actingalone cannot be successful. Action needs to be coordin ated and taken by all stakeholders if we are to see the desired reduction in the level of uninsured driving. To reduce uninsured driving, we believe that there needs to be a step change in: — detection—through the use of technology in an automatic system of enforcement from databases; — enforcement—through the use of a wider range of penalties tailored to the individual circumstances of uninsured motorists; and — education—ensuringdrivers understand the benefits of compulsory insur ance and are fully aware of their duty of care to ensure that their insurance is valid. We believe that changes in these three broad areas would impact directly on the level of uninsured driving, but would need to be accompanied by a move to a single Government department takingresponsibility for their success. To ensure that action to reduce uninsured drivingis e Vective and remains targeted, insurers and the Government will need to improve their data collection. To achieve these step changes our submission outlined a number of actions for Insurers, the Government and other stakeholders. Of these we believe that the followingsix if intro duced together would be key in reducingthe level of uninsured driving: Action 1: Insurers should work with the Government and other stakeholders to look at the viability and plan for matchingthe records between the Motor Insurance Database and DVL A database. Action 2: Insurers together with brokers must continue to improve Motor Insurance Database data quality. Action 3: The Government should extend the range of criminal sanctions most importantly to include the impoundingof vehicles, but also community service and the collection of contributions towards back- insurance costs. Action 4: Insurers and brokers should consider how individual company processes and policy wordings can be improved to reduce the risk of “accidental uninsurance”.

83 Accordingto Thatcham (the Motor Insurance Repair Research Centre) over 5 0% of new car thefts (those less than three years old) involve the thief havinggainedaccess to the vehicle’s keys. 9098191056 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Action 5: Ministers should assign lead responsibility to a single point in Government for deliveringon the recommendations of this Review. Action 6: Insurers should routinely collect statistics on the claims they deal with involvinguninsured motorists.

Memorandum by Calor Gas Ltd (CAR 51)

CARS OF THE FUTURE Calor Gas Ltd. is the UK’s leadingsupplier of liquefied petroleum gas(LPG) . We have played an active role and invested around £20 millions in growing the LPG vehicle parc to 100,000 in the UK and in raising the number of LPG fillingstations to over 1,300. It has not been easy: fleet ma nagers and the trade press remember only too well a previous Government which made progress in growingthe LPG vehicle parc only to pull the rugout from under it by removingthe tax incentive. In the Pre-Budget Report 2003, the Government announced that it would gradually increase the duty rate for LPG over the next three years on the basis that the environmental benefitsoVered by LPG no longer justified the level of duty diVerential it currently receives while “the longperiod of highduty support has allowed the necessary infrastructure to be developed”. However, the Government broke its previous policy of not diVerentiatingbetween road fuel gasesby maintainingthe fuel duty di Verentials for compressed natural gas (CNG) vehicles. The cost to date of the fuel concession has been £161 million. In response consumers, manufacturers and fuel suppliers have invested some £250 million in a cleaner vehicle parc, new cleaner models and in establishinga fuel infrastructure nationwide. The health and environme ntal benefits are significant, but are not yet beingdelivered at their full potential. This submission question s the rationale behind the Government’s decision to increase taxation on LPG.

LPG—Yet to Reach its Potential The story of LPG as a green road fuel is a success but it could be a bigger success to the significant advantage of the environment and human health. In 1998 MarketLine International, an independent, unsponsored research organisation, reckoned the potential market with the right policy framework to be 524,000 vehicles in the UK. It was also the opinion of the Alternative Fuels Contact Group of the European Commission (“Market Development of Alternative Fuels”—December 2003) that LPG vehicles should total around 5% of the vehicle parcs in member countries makingan even larg er potential of 1,000,000; the Group stressed the benefit of “existing incentives”. The biggest impediment to movingfrom 100,000 towards the market potential is the threat to the fuel duty diVerential. This point was underlined by research reported on TransportAction’s own website: “The research also considered the importance of a number of market factors in influencingdecisions to switch to clean fuels . . . The strongest concern was a lack of confidence in the Government maintainingthe fuel duty di Verential”.

What Message Does Reducing Support for a Green Fuel Give? What message will removing support from LPG when it is yet to reach its potential give to alternative fuels and automotive technologies of the future? Will incentives for biofuels and hydrogen prove as transitory? It would call into question the Government commitment to maintain a shift in taxation from environmental goods to environmental bads, and make fleet owners more conservative about investment, and more distrustful of Government intent. If buyers sense that fuel diVerentials for green fuels are temporary they may play safe by clinging to older technologies. The refuellinginfrastructure and vehicles for LPG are here now and o Ver a bridge to the future for potential technologies. Vehicle manufacturers and major oil/gas supply companies have invested over £100 million in developingthe infrastructure and vehicle technology;in addi tion, vehicle owners have invested around £150 million in purchasinggas-poweredvehicles or convertingveh icles to LPG. Similar corporate and personal investment in potential future technologies would be less likely to materialise if HMG removes the incentives through which they hope, and should expect, to recoup their outlay.

The Environmental Benefits of LPG Remain A new and comprehensive emission testingprogrammehas recently been comp leted, comparingthe emissions from petrol, diesel and LPG vehicles. 26 vehicles/fuel systems were tested and if the average of all 26 vehicle tests is taken the results are as follows:

CO2 On a well to wheel basis:

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— Diesel CO2 is 1.8% more than LPG If confidence is restored for the LPG market, the vehicle manufacturers could develop their engines to give further CO2 benefits of approximately 8–10%. The development of ultra clean LPG vehicles in the UK is ahead of anywhere else in Europe, and could lead to substantial export potential.

Particulates The urban emission cycle tests demonstrate that diesel emits substantially more fine particles than LPG. The ratio varied between 39 times more with the IFP tests and 120 times more with the Millbrook tests. “An Economic Analysis to Inform the Review of the Air Quality Strategy Objectives for Particles” (DEFRA, 2001) considered a range of measures (eg particulate traps) to reduce particulate emissions from road transport as part of a wider package of measures designed to reduce particulate emissions by a third from the then projected levels for 2010. The cost of the measures ranged between £95,203 and £1,047,314 per tonne of particulates abated. On the benefit side, if the full package were implemented it was estimated that 278,000 to 508,000 life years would be gained in the UK population. The cost of added life years is said to be in a range “consistent with the valuation of risks to health or prevention of a fatality in other policy/ regulatory contexts”. The cost of the morbidity and mortality caused by particulates in the UK has been estimated in 1995 prices as between £10.53 and £26.11 billion (The UK National Air Quality Strategy, March 1997). Evidence increasingly points to greater toxicity and greater danger to health lyingin a finer fraction of particles (PM2.5) or smaller. Roy Harrison of the University of Birmingham estimates that 45% of PM2.5s arise from road traYc. Alistair Hunt of the University of Bath calculates the damage costs per tonne of PM2.5s released in urban areas at £414,768 in urban areas. Recent tests have shown that LPG emits 99% to 99.8% fewer ultra fine particles than ULS diesel. Given that a typical LPG car emits 0.04g/km less in weight of particulates than a diesel car, and given the size of the LPG vehicle parc, the value of the savings in particulate emissions alone needs to be balanced against the cost of the concession in revenue forgone.

NOx

— Petrol NOx is 120% to 180% more than LPG dependingon the drive cycle.

— Diesel NOx is over 2,000% more than LPG for any drive cycle.

In other words, one diesel vehicle emits the same NOx as over 20 LPG vehicles. No proven technologies are beingintroduced in the medium term to reduce the NO x from these diesel vehicles. N0x advances and increases hospital admissions by 8,700/yr. 48% of NOx emissions come from road transport—in London this figure rises to 75%. LPG has benefits over conventional fuels in a number of other ways:

Ozone

When NOx and VOCs mix in the presence of heat and sunlight, ozone is formed which has a very detrimental eVect on health. Ozone causes irritation to the airways. For every g/m3 reduction on ozone there would be 170 fewer deaths advanced, and 145 fewer respiratory hospital admissions in Great Britain every Summer. Last Summer smogbroke health limits at 76 out of 80 UK monitor ingsites ( Daily Telegraph, 12.8.03). LPG engines emit 70% less ozone precursors than diesel and 80% less than petrol.

Benzene and 1,3 Butadiene These dangerous human carcinogens carry risk at the smallest dose. The main source of benzene is petrol. LPG emissions of benzene are about one thirteenth of those from petrol and half of those from diesel. 9,000t of benzene is expected to be emitted to air by petrol driven cars in 2000. 1n 1996, three-fifths of 1,3 butadiene emissions (6,310t/yr.) came from petrol vehicles. LPG emits less than half the amount of 1,3 butadiene to the atmosphere. Alistair Hunt of the University of Bath calculates the damage costs per tonne of 1,3 butadiene released in urban areas at £94,287.

Why Switch Policy on Road Fuel Gases? Since the 1990s Governments have treated road fuel gases equally given their similar emission profiles, and given a policy of not wishing to pick winners. However, the market has spoken. There are some 100,000 LPG vehicles in the UK compared with 500 CNG vehicles So, the Government has deviated from its previous policy of not pickingwinners, and is now backingthe losingtechn ology. 9098191057 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The Government’s change of policy is harder to understand given that its own analysis on the cost benefit of movingto CNG to reduce particulate emissions was unfavourable. “An Eco nomic Analysis to Inform the Review of the Air Quality Strategy Objectives for Particles” considered but rejected the promotion of CNG for new HDVs. The cost comes out at between £4 million and £8 million per tonne abated. The reason given for the high cost is: “. . . Because the additional fuel costs, in terms of the resource cost of CNG relative to diesel, are included. The resource cost of CNG is currently around double that of diesel, largely due to additional storage and distribution costs”. The report concludes that CNG is a “very cost ineVective transport measure compared with the fittingof particulate traps”.

Is the Hydrogen Economy Round the Corner? LPG is a practical alternative fuel available now deliveringbenefits to he alth and the environment, not at some shiftingvaguefuture date. However, the Government seems minded t o shift some of its support to hydrogen, the practicality of which is still uncertain. There is much hype about hydrogen—there has been for decades. There is no commercially available production of hydrogen vehicles in the UK. Last year, Ford’s £1.7 million Focus Fuel Cell vehicle “came to a sudden halt while beingdriven . . . in the Cornish rain, and the world’s t op fuel cell engineers failed to fix it”. General Motors invented the phrase “hydrogen economy” 40 years ago. “FuellingRoad Transport” produced by the Energy Savings Trust, NSCA and IEEP in November 2002, concluded on hydrogen: “The combined penetration of renewables and gas fired CHP into the UK electricity grid system could more easily allow the production of hydrogen with some carbon reduction benefits in the short and medium term, but only for niche markets. Supply of low carbon electricity for mass market hydrogen is unlikely until at least 2030”. The New York Times reported on 6 February 2004 that the hydrogen economy was “decades away from commercial reality accordingto a report by the National Academy of Sc ience”. “Real revolutions have to occur before this is going to become a large-scale reality,” said one of the report’s authors, Dr Antonia V Herzog, a staV scientist at the Natural Resources Defense Council. “It very possibly could happen, but it’s not a sure thing.”

Summary HMG is committed to gradually removing support from a green fuel well before it has reached its fullest potential: consumer and commercial investment in the fuel has been greater than the Government’s but it is yet to receive a fair return. Removing support from a green technology that is succeedinggivesthe wrong message to alternative fuels in the pipeline. Over a wide range of pollutants, LPG maintains its lead over petrol and diesel, deliveringsignificanthealth and environmental benefi ts for all. It is unwise to switch support to a niche technology (CNG) or to one whose future remains remote and uncertain (hydrogen).

Memorandum by Professor Mike McDonald (CAR 52)

THE FUTURE OF THE CAR—COMMENTS ON TECHNOLOGY

1. Introduction The future of the car will be determined by the character of future markets, the technical opportunities available and transport policies and their application. Markets will evolve with changes in social and economic conditions, such as the ageing population, household characteristics, wealth distribution and the cost of car travel relative to other expenditure choices, includingother modes. Changesin attitudes will be particularly importa nt in areas addressingthe environment, safety, security, congestion and the use of public transport. In the longer term, land use changes may come into play. In this note, I have concentrated on issues relatingto the development and application of new technology for the control and operation of vehicles. To do this I have firstly made a series of statements about future contexts for the use of cars and then focused on a small number of issues which I consider to be key.

2. Context Elements of future context are: — Privately owned and driven cars will remain the main mode of transport in most situations into the foreseeable future. — Cars will gradually become safer for occupants and pedestrians using both passive and active systems. — Cars will become increasingly more fuel eYcient, and less pollutingwith new power systems to take over from increasingly expensive fossil fuels. 9098191058 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 246 Transport Committee: Evidence

— Cars will have systems which support appropriate drivingfunctions such as lateral and longitudinal control and navigation. — On-line traveller information will be available for all modes, both before and duringa trip, partly funded in the context of a wide range of other location related information egcinemas, restaurants, etc. — Cars will drive on a road network which is actively managed to meet clear policy requirements and optimise the use of roadspace against such policies. This will include on-line access controls (applied on priority bases which vary with location) and on-line speed controls. Variable road user charging is also likely to be in place. — A wide variety of alternatives to the private car will be available on individual and collective bases. This will range from taxis, through liftsharing and flexible shared systems to conventional transport. These systems will be eVective because of the ready availability of location, information, and communication technologies supported by radical traYc control measures to support new policy objectives. The update of systems will be likely to be location specific, and drivingforces for change will include an aging population, more controls on driving and parkingand their enforcement, and lifestyles. — In some urban situations, low speed automated and autonomous vehicles will operate to provide short distance collective services. — In some motorway, or central urban, situations there may be automated vehicle running.

3. Issues

(i) Vehicle/Highway Systems Cooperation (See Figures 1 and 2) Technology can be adopted in the vehicle, using roadside infrastructure or involvingsome combination of both. Vehicle based technologies will be largely market driven with financial returns for the manufacturers or service providers. Roadside infrastructure technologies such as traYc and speed control are usually justified on the basis of the economic returns to society through savings in congestion, accidents, etc. The increase in public private partnerships has made this distinction a little less clear and, for example, in-vehicle services such as TRAFFICMASTER collect journey time data from their own infrastructure. The key issue is the extent to which vehicle based systems will impact on infrastructure operation and the extent to which governments can work with manufacturers to achieve good economic and financial outcomes. Two potential examples are stop-and-go systems (S&G) and Adaptive Cruise Control (ACC). Some evidence is available to suggest that the use of appropriate stop-and-go systems can substantially increase the capacity for straight ahead movements at traYc signals. The design, specification, and system operation of S&G should therefore be influenced by the traYc control managers who will need radical new approaches. Drivers usingACC may well make mergingat or near intersectio ns better or worse. This will depend on headways set by the driver, interchange geometry and control (eg ramp metering/access control). Government should consider the options and opportunities for coordinatingactivities more closely with vehicle manufacturers to ensure the best economic outcome against policy objectives.

Figure 1: Vehicle Highway Systems

Vehicle systems

• Stop & Go Integrated Systems • Electronic tow bar • Intelligent merging

Function • Lane departure warning • Intelligent • Collision platooning Infrastructure warning • systems • Probe ADAS vehicles • Adaptive • Lane Control • Priority operations cruise • control • ISA Access control • • Variable May day speed limit • DSRC • Lane markers • Ramp meter • VMS

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(ii) Location Referencing (See Appendix A)84 A reliable knowledge of the up-to-date location of a vehicle is needed for navigation systems and for many driver support and vehicle control systems. Satellite location, usingGl obal Positioningsystem (GPS) technology, combined with map matching, is the basis of the current approach to route guidance. However, this approach will not provide suYcient accuracy for all potential applications, and will need to be supplemented by infrastructure based systems in some situations. A range of approaches to delivery location information to target system accuracies of 3 to 30 cm have been identified. Such systems require significant infrastructure commitments but are likely to deliver economic benefits to government and financial returns to others if implemented in an agreed and coordinated way. The work presented in this document has identified a series of approaches to providingtimely, accurate and robust location information for a range of vehicle based applications. These may be neither complete nor mutually exclusive, and further work is needed with stakeholders and others to more specifically identify needs and opportunities. A support activity is urgently needed to: — Review the options and opportunities for accurate location referencing to support and supplement a range of vehicle based driver support and vehicle control systems. — To recommend activities in FP6 and FP7 to trial, evaluate and specify applications. — To broker an approach, supported by all stakeholder groups, to deliver European Transport Policy targets with appropriate economic and financial benefits. — To specify a roadmap for deployment. The above activity must be independent, but involve stakeholder groups. It would not necessarily be continuous, but would provide support and co-ordination in the most timely way. Such an activity would not only positively support a coherent European approach to the enhancement of application specific location referencing, but also reduce the likelihood of implementation of technologies which could not have a longterm future.

(iii) System Specifications In-vehicle systems will be diVerent in character between manufacturers. There will be diVerences in range and performance of sensors, control algorithms, applications, environment and vehicle performance. The same functionalities of, say, S&G and ACC will not necessarily work well together in a traYc stream with impacts on capacity and perhaps safety. There will also be issues as drivers move between vehicles. More fundamental understandings are needed to guide legislation and ensure that market driven products do not negatively impact on long term policy goals. Figure 2 Complementary Functions within the Subprojects

Lane Support Lane Change - Blind Spot SAFELANE LATERAL SAFE WLDW Collision Safe Speed + Pre-Crash Rear Detection Wireless Local Mitigation Safe Distance APALACI & Lane Change Assistance Danger Warning APALACI SASPENCE COMPOSE LATERAL SAFE COMPOSE Up to 7m Lane Safeport SAFELANE

Up to 100m (3s)

10s 1s 100ms 10ms Foresighted Safe Speed Lane Collision Pre- driving distance support Mitigation Crash

Professor Mike McDonald Director, Transportation Research Group, University of Southampton February 2004

84 Not printed. Contact http://www.trg.soton.ac.uk/rosetta for information. 9098191059 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by Transport for London (CAR 53)

CARS OF THE FUTURE Central London Congestion Charging Scheme and the 100% discount available to drivers of alternative fuel vehicles.

Background

The primary objective of the Central London congestion charging scheme is to reduce congestion. The rationale for the alternative fuel discount is to support as far as is practicable a related Mayoral policy objective to encourage the take-up of the very cleanest alternative fuels and thus help to improve air quality, without compromisingthe decongestionbenefits of the scheme. Therefore, Transport for London (TfL) has developed a 100% discount from congestion charging for electrically propelled vehicles and certain alternative fuel vehicles meetingstrict emission standards, eggas, electric and fuel cell vehicles (includingbi/dual fuel). The drivers of t hese vehicles do not have to pay the congestion charge and do not have to make a registration payment provided that they register with TfL. The vehicles that are eligible for the discount are those listed on the Energy Saving’s Trust TransportEnergy PowerShift register. The TransportEnergy PowerShift Register is considered at the current time to be the most comprehensive, quality controlled and impartial source of information on low emission vehicles available. The Government also supports it as a means to encourage the purchase of alternatively fuelled vehicles.

Responses to the Specific Questions Asked (in italics) are Given Below

1. Provide the numbers of Alternative Fuel Vehicles which have registered for the exemption, each month since the scheme commenced

There are currently 6,022 alternatively fuelled vehicles registered for the 100% discount from the congestion charge. The numbers of alternative fuel vehicles, which have registered for the exemption each month since the scheme commenced, is provided in the table below:

Month Alternative fuel Month Alternative fuel vehicle registrations vehicle registrations

October 2002 0 July 2003 391 November 2002 14 August 2003 233 December 2002 62 September 2003 304 January 2003 260 October 2003 230 February 2003 1,445 November 2003 215 March 2003 583 December 2003 141 April 2003 413 January 2004 430 May 2003 268 Febrary 2004 526 June 2003 312 March 2004 195

Total to 14 March 2004 6,022

2. Whether the exemption for Alternative Fuel Vehicles is a long-term commitment? And if not, how regularly is the decision reviewed?

In developing a 100% discount from the congestion charge, it was necessary for TfL to consider a means of assessment that is robust, well-established and recognised by industry, government and other key players. With improved innovation and technology the emission standards expected by the PowerShift register and therefore the requirements to receive the congestion charge discount will become stricter. The Powershift register is updated on an ongoing basis to maintain up to date high-required standards. TfL is continuing to monitor the impacts of the congestion-charging scheme and will be reviewingexemptions and discounts in light of any changing circumstances. March 2004 9098191060 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Memorandum by ACPO ITS Working Group (CAR 54)

CARS OF THE FUTURE

Current Areas of Work

Emergency Call, ECall systems Project e-Merge—a European Commission part funded research project seekingto provide a harmonised E Call facility free of charge across the EU. We are Field Trial Leaders for the UK. This project is due for completion in April 2004.

Brief Overview A two year project seekinga pan European solution to the provision of emerg ency call (E Call) systems in vehicles. Currently there are several countries operatingan E Call servi ce. This allows its members to access emergency services(via 999, 112) or in some cases breakdown services by pushinga singlebutton in the car. In addition to makinga voice call (999 or to a service centre), a data call is also sent with the vehicles location and other information. It is also possible for the device to activated automatically if a crash sensor is activated egan airbag.However, when the vehicle is driven outside of the h ome country, it does not have a roamingfacility and therefore will not work. The aim of this project is to provide: (1) the roamingsolution, (2) the provision of this facility with a minimum set of data free of charge to all vehicles fitted with the device across the EU. (3) Improve response for emergency vehicles.

Electronic Vehicle Identification This is a European Commission part funded feasibility study and research project, to consider the issues surroundinga potential pan European deployment of EVI. We led the work pac kage on user requirements. This project is due for completion in June 2004.

Brief Overview So what is EVI? To put it simply, Electronic Vehicle Identification does what its name suggests it electronically identifies a vehicle by means of data held by electronic means within that vehicle. The technology ranges in complexity from a simple tag that can only be read at short range whilst the vehicle is stationary, through to one that is accessed by the equivalent of a mobile phone link to the vehicle, with all levels in between. Levels of security of that data, range from not much better than a car number plate now, the simple tags fixed to a windscreen or dashboard, through to highly complex devices built within the car’s electronic systems. There is much confusion, particularly in the press about what EVI will do and what it means. EVI electronically identifies a vehicle and that is it. It does not measure speed, it does not track and trace vehicles etc etc. This needs other applications such as speed cameras or trackingap plications. However, what EVI does do, is allow a vehicles identity to be held and read securely and remotely with very high levels of accuracy. It also allows the storage of other vehicle and potentially owner and other data to be held on and read from the device. This will make other applications more eVective, egANPR is about 70–90% accurate dependingon the device and weather. EVI will be close to 100% accurate in al l weathers. It operates through a series of readers, which if fixed at the roadside, will (if other applications are developed to use this data) enable the trackingand tracingof vehicles or speed enforcement. It will a lso enable the automatic detection of other oVences, followingtoo closely etc. The key benefits to policingof EVI surround this ability to securely and acc urately identify a moving vehicle. If the applications are developed to make use of this technology, (ANPR!, new trackingand tracingapplications etc) this could impact on both vehicle crime and crim inals who use vehicles and in addition homeland security (City of London). It could also enable the automation of many more road safety applications such as weigh in motion, close follow etc.

VERA 2 Cross Border Enforcement VERA 2 is a two-year European Commission funded project seekingto tackle a road safety issue across Europe. Currently if foreign drivers come to the UK, they can and often do drive with impunity, driving through red lights and speed cameras and flouting our road traYc laws. This has several consequences. 1. It is a road safety issue. 2. UK drivers see this as unfair. 3. It goes against the principles of EU Law and Human Rights. 9098191060 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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This project is buildingon the findingsof an earlier research project, and is lookingto provide a practical way to tackle this issue. The project is workingfrom the principle that onc e the legal process in the issuing state (where the oVence was committed) is complete and all appeals etc are exhausted, the penalty could be transferred to the executingstate (where the o Vender lives or work) to be collected. The intended route was to provide a framework within which Member States could exchange and act on this penalty data, by means of signing up to a common memorandum of understanding. The project would also devise a structure and electronic means to exchange the data to make this process eYcient and cost eVective. The final part is lookingat agreeingcommonalityin the type approv al process for enforcement equipment. Whilst undertakingthis project, some parallel work was beingundertaken by the EC Justice Directorate (DGJAI), and a draft framework decision is in the final stages of being agreed to allow the mutual recognition of penalties, for crime and including road traYcoVences across the EU. This framework decision sets out the same process as described above. This work provides the legal basis on which the work of the project can provide the practical means to deliver. The project is currently workingon the development of an electronic means to exchange the enforcement penalty data and the organisational structure required to support this. This work makes use of the framework directive and the project team are workingwith the Justice Directorate to ensure that the two strands of work support each other. This project is due for completion in July 2004.

Project Remove—Automatic Weigh in Motion Project Remove is a two year European Commission part funded project seekingto tackle the issues surroundingautomatic weighingofvehicles from a public authority persp ective. The issue of overloaded vehicles represents a significant problem on the roads of Europe. The consequences of such overloadingare: — Road Safety:—Overloaded vehicles cannot stop or manoeuvre as safely which can result in collisions. — Damage to Roads:—Unnecessary wear on roads causes. Resources to be wasted in their repair. Road works—which have high collision rates. TraYc avoidingroad works, which results in overloaded vehicles takingeven le ss suitable routes through urban areas. — Crime:—Deliberate overloading gives the illegal haulier a competitive advantage over those who operate within the law. Experience tends to indicate, that the haulier who runs illegally in one area will also break the law in other areas. — Security:—the detection of vehicles that are abnormal beingoverweight or under in proportion to the size of the vehicle. The current practice of stoppingand weighingvehiclesis not e Vective or eYcient for either the authorities (as only a small percentage of vehicles are tested) or the haulier (who may be unnecessarily delayed whilst beingweighedwhilst no o Vence has been committed). The process has been improved by use of screening devices, which weigh vehicles whilst in motion so that they can either is stopped for accurate weighing, or if it is a simple oVence, eg max gross weight on a bridge can enforce. However, to provide an eVective and fair deterrent to this problem a new approach is required to deliver full automatic weighing of vehicles, which together with full identification can either be used for enforcement or intelligence purposes. This approach requires a full understanding of the public authority requirement both now and in the future.

UK Project the Remote Immobilisation of Stationary Vehicles This ACPO ITS led project is an example of the police and industry workingto gether to solve a growing problem. As new cars become increasingly harder to steal, through developments such as engine immobilisers and better security, criminals have become more inventive to get round this. This has lead to increasingincidents of burglaryto steal the keys to then steal cars, or ta cklingwhat is fast becomingthe weak point, the driver, through incidents of car jacking. To provide a deterrent this UK project has developed a Thatcham Criteria in consultation with ACPO, Police Scientific Development Branch, DfT. This criteria provides the basis by which the remote immobilisation of stationary vehicles can be achieved. Should a vehicle be stolen, it will be tracked by a secure operatingcentre, and subject to the same procedures as for trackin gdevices, once the vehicle is stationary and in a suitable location and the keys removed, the device will be activated so the vehicle cannot be re started. This will allow the vehicle to be recovered; ideally the criminals captured and prevent the continued use of the vehicle to commit crime. 9098191060 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Issues of Concern to the Police Cars of the Future

Driver Behaviour The causes of poor driver behaviour have and are beingextensively researc hed, the results of this work on causes and more importantly solutions need to follow through in to the design of cars to reduce or resolve issues of: — Road Rage — Close Following — Speeding — Dangerous driving The cars of the future should be designed to reduce or prevent such behaviour.

Substance Abuse Drink/drugdriving—needmore e Vective deterrents, and technical solutions in vehicles to prevent drivers usingthem whilst intoxicated.

Remote Detection of Offences This is currently an emotive issue with speed cameras, and will increasingly be used for other oVences. The cars of the future should be equipped with electronic systems that at least assist drivers to comply with the law, and not just where the speed cameras are, but all the time. Areas such as Intelligent Speed adaptation, both voluntary and compulsory should be actively pursued.

Identification 1. Of the vehicle. Securely and remotely identifyinga vehicle will be fund amental to the eVective safe use of vehicles in the future and will be the cornerstone around which other systems both public and commercial be built. Ensuringan e Vective system that meets the public authority requirements will be key to deliveringpublic and driver safety in the future. 2. Identification of the owner/keeper. Correctly and quickly identifying the owner/keeper of a vehicle be it UK or foreign registered will be fundamental to eVective compliance work in both crime and road safety. Currently the EUCARIS system does not allow exchange of keeper details on foreign Nationals, this needs resolvingas a matter of urgency. 3. Identification of the driver. With the increasingmoves to remote detect ion of oVences, both crime and road traYc, the ability to identify the driver remotely will be key. Issues such as biometric recognition systems and electronic drivinglicences will need to be part of the cars of t he future.

Safe Stopping of Vehicles that Refuse to Stop The remote immobilisation of vehicles is a sensitive issue. Last Year 31 people were killed in some way involved in police pursuits. In addition a number were killed by criminal misuse of vehicles, drunk/drugged drivers etc. Dealingsafely and e Vectively with vehicles that refuse to stop is a diYcult and complex operation. The recent introduction of run flat tyres, will remove one of the polices most eVective stopping devices, the Hollow Spike Tyre Deflation systems such as Stinger/Stop stick. Providingan e Vective technological option to safely and remotely stop vehicles without the need to pursue is fast becominga priority. The risks of not providingsuch an option are fa st becominggreaterthan the risks of doingso. What is needed: Cars of the future to be fitted with a safe and secure means to remotely stop a vehicle when in a controlled situation by the police. This solution needs to work across borders and throughout the EU. What is preventingthis, whilst the remote immobilisation technologyexi sts, none exists that will allow the safe and secure stoppingof movingvehicles, in a controlled fashion th at will meet the user needs and the safety and privacy concerns. Many of the issues raised are organisational, legal and operational, whilst some are technical. There is a requirement from the police service to develop such technologies and research bids have been attempted to start this process. However, the current blockages appear to require political will to remove them. 9098191060 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 252 Transport Committee: Evidence

To fit cars of the near future with this technology and provide a solution for existingcars will require active research on the legal, organisational and operational issues in parallel with the technology developments. Findingfundingfor such research is a challenge.

Investigation Information Current cars and increasingly cars of the future will be packed full of electronics storingdata. Following a collision or an incident, accessingthat data in a safe a secure way so that it can be used as evidence is increasingly problematic, yet may hold the key to the investigation of both road traYc issues but also serious crime. Providinga common standard by which such data can be extracted from incide nt data recorders, CAN Buses E call systems etc across all cars both current and future is a key issue for policing. James Hammond Superintendent Sussex Police February 2004

Supplementary memorandum by HM Treasury (CAR 55)

CARS OF THE FUTURE At the Transport Committee Hearingon the Cars of the Future in March, I prom ised to provide you with further information on what factors the Government takes into account when modellingthe projected revenue from fuel duties. My oYce subsequently received a letter on 19 March askingfor information on a number of further issues. On future projections of receipts from fuel duties, the Committee was particularly interested in the impact of improvements in fuel eYciency on projected revenues. Although the Government does not publish separate figures on this or any of the other variables used in the model, the positive trend for more eYcient cars is accounted for by the use of an eYciency improvement factor for new cars. As I said in oral evidence, if all other factors were kept static, this would lead to a gradual reduction in revenue. Clearly, however, other factors, such as the total vehicle stock and the general rate of growth in the economy, need to be taken into account as they also have a significant impact on fuel consumed. May I take this opportunity to apologise for the delay in supplying the detail on the revenue forecast, and in replyingto your letter of 19 March, but I hope you find that the attached re sponse answers your questions. John Healey MP Economic Secretary 21 May 2004

APPENDIX

Factors to be Considered in Projected Revenue Modelling

HM Customs and Excise Hydrocarbon Oils Forecast Model The Customs and Excise hydrocarbon oils forecast model is used to forecast hydrocarbon oil duty revenue receipts for the Budget and Pre-Budget Reports. The model forecasts duty revenue receipts by forecasting road fuel consumption and duty rates for the forecast horizon. Factors assumed to determine road fuel consumption include: average distance travelled; real road fuel prices, which are assumed to be determined by the duty rate and crude oil price; the composition of the vehicle stock and vehicle fuel eYciencies. The main determinants used in the forecast model include: — GDP (this acts as a proxy of distance travelled); — Duty rates; — Crude Oil price; — RPI; — Fuel eYciencies; — Stock of vehicles; — Past fuel quantities; and — Current pump prices. 9098191061 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The assumptions underpinningthe current forecast are: — GDP is assumed to grow as forecast by the Treasury macroeconomic model. — Duty rates are assumed to be revalorised at every Budget in line with inflation. — A given percentage change in duty feeds through to the pump price on a one-for-one, penny-for- penny basis. — The Brent Crude oil price is based on the average of independent forecasts and projected forward. The assumptions underpinningthe crude oil forecast are NAO audited. — A given percentage change in the oil price feeds through to a percentage change in the pump factor price (ie the pump price exclusive of VAT and duty) by half as much. — RPI is assumed to grow as forecast by the Treasury macroeconomic model. — Fuel eYciency for both petrol and diesel vehicle is assumed to increase every year. — The composition of the stock of vehicles is assumed to change in line with current trends. Consequently, the share of diesel vehicle in the vehicle stock is assumed to increase over time while that of petrol vehicles is assumed to fall. — Hydrocarbon oil measures past and present that are in place, includingth e oil strategy, are incorporated into the forecast. — Future Budgets occur in March of each year.

1. Has the Treasury evaluated how cost-eVective the overall incentives are for diVerent vehicle fuels: LPG, diesel, petrol, CNG, biofuels, and so on, in terms of carbon dioxide and emissions “saved”?

Biodiesel

1. The environmental justification for incentivisingthe use of biodiesel stems from the reduction in CO2 emissions (and small air quality benefits) that occur as a result of biodiesel displacingconventional diesel as a vehicle fuel. These are said to be around 50% lower on a well-to-wheel comparison than from ULSD. A similar assessment is made for bioethanol. 2. To date (March 2004) 26 million litres of biodiesel have been duty paid (consumed) since August 2002 when the 20ppl duty incentive for biodiesel was introduced. The cost of providingthe incentive is estimated to be approximately £5 million. 3. The total carbon savingmade as a result of biodiesel displacing26 milli on litres of ultra-low sulphur diesel is approximately 11,383 tonnes.

Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG) 4. Liquefied Petroleum Gas (LPG) has had a duty incentive over conventional petrol and diesel since 1994 when it was given a separate duty rate. Prior to this date, road fuel gases were dutied at the same rate as aviation gasoline. However, sales of road fuel gases, and particularly LPG, did not materialise in substantial quantities until 1996 when one million litres were duty paid (consumed). From this date to 2003–04 a total of 772 million litres of LPG are estimated to have been duty paid. The duty incentive for LPG has not been constant over time but increased from 24ppl in 1996–97 to 41ppl 2003–04. 5. Based on the above HMCE clearance (duty paid) figures, the cost to the Exchequer of providinga duty incentive for LPG since 1996–97 to 2003–04 is estimated to be approximately £185 million. 6. The environmental benefits of usingLPG over conventional fuels stems fr om lower PM10, NOx and CO2 emissions. However, the level of savingvaries by vehicle type and consequ ently so does the monetary value of these emission savings. Using an estimated average monetary savingof 0.4 pence per km travelled and 772 million litres consumed, the total monetary benefit, in terms of environmental benefits, of incentivisingLPG is estimated to be £30 million. 7. The CNG duty rate is set at the same rate as the LPG rate in kg. However, due to its properties the litre equivalent duty rate is higher than that for LPG. Total consumption (duty paid) of CNG, or NG as it is sometimes referred, from 1996–97 to 2003–04 is only around 40 million litres. Consequently, the cost to the Exchequer of incentivising CNG is negligible and so are the estimates of the monetary benefits. 8. The Energy Saving Trust (EST) administer the grants that are available for convertingvehicle to use road fuel gases, both LPG and CNG. Although these are not direct costs of incentivisingenvironmentally friendly fuels, they may nonetheless need to be included in the overall cost to the Government of encouraging the widespread use of road fuel gases. The breakdown of costs is attached at Annex A. 9098191061 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 254 Transport Committee: Evidence

Ultra-low Sulphur Fuels 9. The incentivisation of ultra-low sulphur fuels incurred costs to the Exchequer and provided benefits to the environment. To date 123 billion litres of ULSD and 116 billion litres of ULSP have been consumed. The cost to the Exchequer of incentivisingthese fuels is estimated to have be £4.8 billion (ULSD) and £2.5 billion (ULSP), and £7.3 billion in total.

2. The Committee would be grateful for copies of the Treasury’s forecasts of income from (a) Vehicle Excise Duty and (b) fuel duty to 2010 The Government does not normally publish forecast income from fuel duty or Vehicle Excise Duty, other than those contained in the Budget. The answer below is therefore confined to the publicly available figures for both. Budget 2004 forecasts for fuel duties and VED are contained in table C:8. They are as follows:

Fuel duty receipts VED receipts 2002–03 (outturn) £22.1 billion £4.6 billion 2003–04 (estimate) £22.8 billion £4.7 billion 2004–05 (projection) £24.4 billion £4.9 billion

3. The Committee would be grateful for your estimates of changes in Treasury income resulting from (a) the new VED regime, and (b) the company car tax regime, since the changes were introduced, and forecasts as far forward as they are available

(a) the new VED regime Budget 1999 announced that for new cars, a system of graduated VED would be introduced based primarily on their carbon dioxide emissions. Budget 2000 announced details of the new system, introduced from 1 March 2001. For cars registered after March 2001, tax bands are based upon levels of CO2 emissions, with lower rates for cleaner cars. The intention was that reforms to car VED would be on a revenue- neutral basis. The followingestimates have been made for the changein Treasury income re sultingfrom the new VED regime since the changed were introduced in 2001–02, up to and including 2003–04. This compares the VED revenue under the graduated system for new cars with estimated VED revenue for new cars registered after March 2001 if the old system still applied (ie rates dependingon whether en gine size were above or below 1549cc). This shows in the initial years of introduction a small net increase in Treasury income as a result of the introduction of the graduated VED scheme. In 2003–04 it is estimated to be revenue neutral.

ESTIMATED CHANGE IN TREASURY INCOME FROM NEW VED REGIME

2001–02 £18.3m 2002–03 £2.6m 2003–04 £0.1m

Source: DfT estimates

(b) Company Car Tax Company car tax accounts for significant revenue receipts. In 2000–01 the total income tax and National Insurance receipts were £2,660 million. Additionally, in 2000–01 income tax and National Insurance receipts for company car fuel benefit stood at £830 million. We estimate the cost of the company car tax reform since its introduction in 2002 to have been around £10 million in 2002–03, around £120 million in 2003–04 and around £140 million in 2004–05. Although these costs are significant they are modest in the context of overall revenue receipts from company cars.

4. What financial incentives are provided to encourage the purchase of safer vehicles? The safety of all pedestrians and road users is a key concern of the Government. There are therefore legal minimum safety requirements for cars. The Government does not further incentivise manufacturers or purchasers, as these safety requirements are mandatory. Car manufacturers are, of course, entitled to exceed safety standards if they so wish, but the Government does not provide financial incentives for this. 9098191063 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 255

Annex A

BREAKDOWN OF POWERSHIFT GRANT for 2002–03

Sum of Grant Amount Paid (£) Region Fuel Type Vehicle Type England Northern Ireland Scotland Wales Grand Total ELE Car Derived Vans £49,721 £49,721 Passenger Cars £51,096 £51,096 Vans £15,000 £15,000 ELE Total £115,817 £115,817 HYBRID Passenger Cars £8,000 £8,000 HYBRID Total £8,000 £8,000 LPG Car Derived Vans £628,675 £1,992 £2,988 £38,097 £671,752 Minibuses £28,944 £10,710 £39,654 Passenger Cars £630,054 £1,796 £35,908 £12,445 £680,203 Vans £705,117 £48,610 £54,823 £808,550 LPG Total £1,992,790 £3,788 £98,216 £105,365 £2,200,159 NGV Large Commercials £12,750 £12,750 Light Trucks £30,000 £30,000 NGV Total £42,750 £42,750 Grand Total £2,159,357 £3,788 £98,216 £105,365 £2,366,726

Supplementary memorandum by the Department for Transport (CAR 22A)

CARS OF THE FUTURE

Transport Committee,10March 2004 Set out below are the answers to the six additional questions that you posed in the letter of 18 March.

1. What financial incentives are provided to encourage the purchase of safer vehicles? No financial incentives are provided for safer vehicles as many motorists are purchasingsafer cars. Direct intervention in the retail market is not needed as the Government has taken steps to ensure that independent information is available through our continuing involvement in EuroNCAP who publish crash test data for new cars tested twice yearly. Since its introduction, EuroNCAP has seen typical occupant safety ratings rise from 1–3 stars in 1997 to 4–5 stars in the most recent phase. The Department for Transport has invested approximately £6.5 million since the first UK testingcommenced.

2. Q627—How is the Government monitoring the combined safety eVect of the introduction of diVerent “advanced vehicle technologies” and “driver assistance systems”? The Government carries out limited direct monitoringof advanced vehicle technologies entering the market. The work that is undertaken is currently aimed at driver information systems such as route navigation devices where the Department of Transport has a licensing function for certain types. The Department’s research programme includes work on the safety benefits of advanced technologies such as driver assistance systems. Specific evaluations have been mostly aimed at the benefits of single systems (egair bags,anti-lock brakes, ISA) rather than the combined e Vect of multiple systems and their interaction. The EuroNCAP programme, however, provides a useful opportunity to evaluate the overall eVect of multiple design features in crash tests. Work is underway to extend the EuroNCAP assessment to “primary” safety areas such as electronic stability controls, safer brakingconcepts and speed management devices. The Government is a key sponsor of this initiative.

3. Please could you list the priorities and objectives of the Foresight Vehicle Programme and the funding allocated to each objective? The Foresight Vehicle Programme is a major Government initiative, established in 1997 to bringtogether UK resources and expertise to create components and systems for the vehicles of the future. The Foresight Vehicle initiative shares the overall Foresight objectives of Improvingthe Quality of Life and Creation of Wealth in the UK. A technology roadmap has been developed to identify technology and research themes for road transport and this was published in early 2003. Performance measures and targets have been themed in a way that matches the perceived trends and drivers in the automotive sector, these are: 9098191064 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 256 Transport Committee: Evidence

— Social performance which relates to mobility and congestion, lifestyle and attitudes, together with health, safety and security. — Economic performance which relates to both business and consumer perspectives. — Environmental performance which relates to the overall environmental burden of road transport, global warming, pollution, energy and material waste. — Technological performance which relates to energy and power, electronics and control, materials and structures, together with the processes and systems that support development of these technologies. — Political performance which relates directly to Governmental policy, regulation, legislation and action in the areas of energy and CO2, health and safety, and waste management. — System performance which relates to the road transport system as a whole and includes consideration of the infrastructure and level of system integration. As can be seen from the above, the Foresight Vehicle objectives align with the Departmental objectives of reducingthe environmental impact of transport, reducingcongestion, improvingaccessibility, improving safety and making vehicles more secure, although the Foresight Vehicle themes do cut across these objectives. Since 1999 the DfT has primarily allocated fundingto the objectives shown below, although it should be noted that some projects cut across other objective areas: — Reducingthe impact of transport on the Environment—£3,239k. — ImprovingSafety—£1,181k.

4. How is compliance with the Pedestrian Protection Directive being monitored? The pedestrian protection proposal is now a full Directive, which means that it will be subject to the same Type Approval and Conformity of Production regime as other Directives, such as those applyingto front and side impact. In addition, EuroNCAP will continue to assess cars for pedestrian protection to standards usingthe EEVC test methods which are also reflected in phase 2 of the Directi ve. This will give an indication of whether cars are meetingor exceedingrequirements in advance of the Dir ective.

5. What is the Government’s approach to facilitating the introduction of telematics systems such as “E-Call”? We are encouraging and enabling best value adoption of greater technology generally and intelligent transport systems—or telematics—specifically, as an integral part of deliveringour transport objectives. New technologies can help provide the tools and services to underpin a modern, integrated, transport system that balances economic, social and environmental objectives. Our approach is one of partnership—we are workingclosely with business an d consumers, local government, transport operators and technology providers in developing technological solutions. Partnership extends beyond our national boundaries, and as such we are playingan active part in the European Commission’s E-Safety programme where many of the vehicle-oriented ITS developments are beingled. E-Call is an example of the initiatives flowingfrom the E-Safety work, and o ne that we support in principle. E-Call can bring road safety benefits through improved emergency service response times when properly implemented as an optional support mechanism for drivers.

6. Has the Government undertaken, or commissioned, any research to assess the level of change in vehicle emissions and carbon dioxide, if vehicles complied fully with the existing speed limits?

This specific research has not been undertaken. However, general trends can be assumed from emission data gathered routinely for input to air quality modelling predictions. If vehicles routinely conformed to motorway speed limits then, for example, their individual NOx emissions would be expected to reduce. Under urban conditions, the converse is true, ie NOx would increase. The overall eVect on air quality of enforced speed limits would, however, expected to be small. Other pollutants generally follow similar trends, but the eVect does depend to some extent on the age and type of vehicle. Emission factors developed for the National Atmospheric Emissions Inventory may be used to estimate changes in CO2 emissions with vehicle speed. Usingthis data, the followingpercentagec hanges in CO2 emissions have been estimated for a typical vehicle travellingat 10 mph ov er the speed limit. 9098191064 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 257

Speed limit (mph) 30 40 50 60 70 Vehicle speed (mph) 40 50 60 70 80

Change in vehicle CO2 "3% 3% 7% 11% 14% emissions relative to complying with the speed limit

Further information about the emission factors may be found at www.naei.org.uk. DFT April 2004

Supplementary memorandum by the Department of Trade and Industry (CAR 22B)

CARS OF THE FUTURE

Responses to the Written Questions from the Transport Select Committee

1. Q416 (Jacqui Smith): “I could certainly forward to the Committee information about the sort of partnerships, including the small- and medium-sized companies which are benefiting from that investment.” We would be grateful if you could provide further information on the involvement of small and medium sized companies. The Forsight Vehicle (FV) Programme has always encouraged SME participation. It is a requirement that where possible project consortia include at least one SME. The approximate breakdown of size of organisation in FV is SME 37%; LE 42%; Academia/Research and Technology Organisation/Public Organisations 27%.

2. Q437 (Brian Donohoe): Is the Department aware of any patents in the field of clean vehicle and fuel technology, and renewable energy technology? In particular, are there any low carbon patented technologies which have not been developed or made available, which could be blocking progress? There are many patents in the field of clean vehicle and fuel technology, and renewable energy technology. Many of these, as in all areas of technology, relate to inventions that turned out not to be commercially viable. I am not aware of any examples of low carbon technologies which have not been developed simply because of the existence of a patent. There are safeguards in the patent system, such as the availability of compulsory licences, which exist to deal with such a situation. Also, a patent only has eVect in its own country, which means that a UK patent would not stop use of the invention in, for example the US, and a US patent would not stop use of the invention in the UK.

3. Q438—Please could you provide a copy of the forecasts which show the UK’s progress towards the domestic carbon dioxide reduction target of 20% by 2010, and whether we are on track to meet the target? The Government will be takingforward a comprehensive review of the 2000 Cl imate Change Programme (CCP) later this year, which will include forecasts on UK’s progress towards the 2010 domestic target. This will examine in detail the latest emissions projections and expected progress on the carbon reduction measures set out in the CCP, includingfor transport. Where shortfalls are identified we will need to look carefully at how and where we could best make up those shortfalls, takingin to account cost and practical issues such as timing.

4. Q439 (Jacqui Smith): “But my understanding of the forecasting for the future is that models are forecasting a slight increase in CO2 from transport by 2010 based on an assumption of business as usual, in other words, not taking into consideration the impact of the 10 Year Plan for Transport or the current Future Vehicles strategy or the European voluntary agreement.”

What are the revised forecasts for carbon dioxide emissions from transport in 2010 taking into account proposals in the 10 Year Plan, the Energy White Paper, and the Powering Future Vehicles Strategy?

The latest forecasts of CO2 emissions from transport, published in the progress report on the 10 Year Plan in 2002, estimate that carbon emissions will be between 30.4MtC and 31.3MtC in 2010. This, however, does not take account of proposals in the Energy White Paper or the Powering Future Vehicles Strategy. The Government will review the UK Climate Change Programme later this year; as part of the process, projections will be made, giving estimates of carbon savings from the 10 Year Plan for Transport and measures described in the Energy White Paper and Powering Future Vehicles Strategy. 9098191065 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 258 Transport Committee: Evidence

5. Q442—Are you confident we will meet the four million tonnes of carbon reduction anticipated in the 10 Year Plan for Transport, from the Voluntary Agreement with car manufacturers? What evidence is there?

It was anticipated that a package of transport measures which included: — the voluntary agreement between the European Commission and motor manufacturers for improvingthe fuel e Yciency of new cars by 2008–09; — fuel price rises from the fuel duty escalator in the 1990s;

— the new CO2 emission-based company car tax regime; and

— the new CO2 emission-based graduated VED; would deliver increases in the fuel eYciency of new cars sold in the UK, resultingin estimated carbon savings of between 2.4MtC and 5.3MtC by 2010, with an arbitrary central figure of 4MtC. Trends in UK new car eYciency from 1995 to 2003 suggest that carbon savings from the above package of measures is likely to be at the lower end of this range. This is largely because fuel prices are currently lower than was originally anticipated, and consumers have continued to demand more fuel consumingc ars than originally expected. This was the information that my colleague David Jamieson provided to you in his evidence of 10 March. It should be noted that estimated carbon savings, including those projected for the 10 Year Plan, are quite distinct from national targets and goals for carbon reductions. As I said in my evidence on 3 March, the UK has already achieved its Kyoto target to reduce UK CO2 emissions by 12.5% by 2008–12. Whilst individual estimated savings contribute to the overall savings projected to meet national targets and goals, the composition of those overall savings is fluid. There are no sectoral targets for CO2 reductions; transport will continue to contribute to the UK Climate Change Programme along with all other sectors.

6. What targets and timescales would you like to see for a further round of Voluntary Agreements with car manufacturers to reduce new car carbon emissions?

The European Voluntary Agreement is currently on target to deliver the 25% savings in CO2 emissions (based upon 1995 levels) by 2008. Discussions between the European Commission and the European car industry on both the progress to date of the current agreement, and the scope for further reductions beyond the 140g/km by 2008, commence this year. In consideringwhat further targetsand timescales are appropriate, not j ust environmental and social factors must be evaluated, but also the economic ones—such as the eVects upon the competitiveness of the European automotive sector. We have written to the European Commission in December last year, settingo ut some key principles on this very question. The letter focused on timescales and general structural aspects of developingfurther Voluntary Agreements. It did not seek to go into the specific levels of possible future targets because this will need detailed and extended discussion between the Commission, the industry, other stakeholders, and Member States. The key principles are: — that the Commission and the industry set a firm and early timetable for adoptingambitious further Voluntary Agreements; — with targets based on robust and independent evidence on available technology improvements; and — havingregardalso to the resource and consumer costs, product choice ava ilable to the consumer, and the implications for the automotive sector. And on the timescale, a key element in the success of the Voluntary Agreements has been the stable long- term horizon they have provided, within which the industry has been able to research, develop and introduce fuel-savinginnovations in the most cost-e Vective way. The current 2008–09 Voluntary Agreements were agreed in 1998, establishinga firm 10 year horizon, reflectingthe timescale for technologydevelopment in the industry. Five years on, it seems sensible to suggest that the Commission and the industry should start discussions on rollingforward and re-establishing the horizon. Given that the negotiation of the updated target will itself take some time, 2015 might be an appropriate date for a new firm target, which could include intermediate target ranges, for example in relation to 2012 and the Community’s present car CO2 strategy. 9098191065 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 259

7. Are we on track to achieve the further 1.6 million tonnes carbon reduction anticipated from the implementation of the 10 Year Plan proposals? What evidence is there? The latest modelling, from the 2002 progress report on the 10 Year Plan, estimates that implementation of the plan will produce carbon savings of between 1.1 and 1.4MtC. The Government has put in place a framework of policies which should deliver these savings. We expect the majority of these savings to come from improvements in freight fuel consumption (through increasing fuel eYciency and driver training) and soft factor interventions which reduce car driver trips for commuting, business and education purposes. The environmental implications of the rolled forward strategy for transport, which we expect to publish in the summer after the conclusion of the spendingreview, will of course be assessed and considered in full.

8. Q446—If the revised forecasts leave a gap in expected carbon reductions from transport—how is this gap going to be closed (either by the transport sector or other sectors)? The Government will be takingforward a comprehensive review of the 2000 Cl imate Change Programme (CCP) later this year. This will examine in detail the latest emissions projections and expected progress on the carbon reduction measures set out in the CCP, includingfor transport. If a shortfall from transport measures is identified, we will have to consider the extent to which we strengthen existing policy measures or consider further measures from all sectors to reduce emissions, includingtransport, takinginto account cost-eVectiveness and practical issues such as timing.

9. Q451 (Jacqui Smith): “I think I am right in saying that half of the R&D of European car manufacturers, for example, is focused on CO2 reduction . . .” Please would you confirm the level of investment focused on carbon dioxide reduction by manufacturers. A report in “Supplier Business” claims that in response to the ACEA agreement European manufacturers are spending50% of their R&D on CO 2 reduction. (see Annex A).

10. In addition, please could you provide an estimate of expenditure (per capita) on R&D in the area of low carbon transport technologies, in the UK and competing countries (Canada, Japan, USA, Germany)? It is not possible to provide a truly global figure for R&D in low carbon transport technologies. However, as an indicator, the US have agreed a budget of $1.7 billion over five years for the Freedom Car programme and Hydrogen Fuel Initiative. Canada manages a much smaller general programme, more on the scale of the Foresight Vehicle Programme (budget of Can $43 million over four years) coveringwider aspects of automotive issues (pedestrian protection etc). We were unable to obtain oYcial figures from Japan and Germany for R&D specifically on low carbon transport technologies.

11. Q454—Has the idea of “Hydrogen Highways”, or an equivalent, been developed in the UK? There has been some interest in the potential for linkingup potential hydr ogen economy demonstrations in diVerent regions of the UK to provide one or more “hydrogen highways”. This is also a high level aspiration of the European Commission. There are, however, no specific plans for such an initiative at this stage, and consideration of the issue needs to take place in parallel with the plans of the automotive manufacturers to demonstrate hydrogen powered vehicles (whether fuel cell or ICE based). Such an initiative would need to be led by the private sector.

12. Q466—We would be grateful if you could provide a copy of the Department’s Innovation Report and the Technology Strategy. Hard copy supplied. (See http://www.dti.gov.uk/innovationreport/innovation-report-full.pdf?pubpdfdload%03%2F1607.)

13. Q482—What research has the Government undertaken to look into long-term platinum resources, including supply and price? DFT commissioned a report from AEA technology, which can be found at: http://www.dft.gov.uk/stellent/groups/dft–roads/documents/page/dft–roads024056.hcsp–. This report looks in detail at platinum resources, supply and price and the feasibility of recycling. 9098191065 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 260 Transport Committee: Evidence

14. What level of funding has the DTI put towards developing a research, development and demonstration programme dedicated to fuel cells? The DTI Advanced Fuel Cell Programme is part of the DTI New and Renewable Energy Programme. Since 1992, the programme has supported more than 156 projects with DTI expenditure of £12.4 million. Currently expenditure is runningat about £2 million per annum. Future spe ndingplans will be dependent on the outcome of SR2004.

15. What level of priority do transport projects receive in the Carbon Trust’s Low Carbon Innovation Programme? What was the total budget, and what level of funding went to transport projects in the last year? The Carbon Trust is a private company limited by guarantee, funded by Defra. The fundingof projects under the Carbon Trust’s programmes is decided by the Carbon Trust Board, on which both Defra and DTI are represented. The Carbon Trust carried out an assessment of the technologies needed to deliver a low carbon economy to inform the development of its programmes. Projects involvingbiomass and hydrogen infrastructure, both of which have transport applications, are in the priority category. The total amount allocated for projects in this category last year was £2.5 million. DTI April 2004

Annex A

EVIDENCE ON EUROPEAN R&D SPEND

Industry Struggles with Demands for CO2 and Noxious Emissions Reductions

New technologies strain resources of OEMs and suppliers—yet the targets may never be met

Monday, 8 December 2003

Demands for lower CO2 emissions are swallowingan astonishing50% of R&D spendingat European carmakers. A threat to put tailpipe emissions targets even lower may break the industry’s back. European automakers are resistingpressure from the EU to toughenthe indu stry’s self-imposed goal of 140 grams CO2 emissions per kilometre by 2008. A second round of talks may lead to the industry tryingto reduce emissions t o 120 grams per kilometre by 2012. “It is an unreasonable target,” Renault CEO Louis Schweitzer, told Automotive News Europe. Schweitzer is head of ACEA, the European car manufacturers’ association. European carmakers and suppliers are investingheavily to meet their self -imposed limits. Carmakers are investingup to 50% of their research and development budgetsto improve fu el eYciency, say engineers. And carmakers and suppliers are developing a wide range of new technologies and systems to improve fuel economy to meet the industry’s goal. The 2008 targets require consumption to drop to 5.3 litres per 100 kilometres for a diesel, and 5.8 litres per 100 kilometres for gasoline engines. The industry is attackingthe problem with near desperation—applyingnew generations of turbochargers, gasoline and diesel high pressure direct injection systems, new transmissions systems such as dual clutch transmissions, starter-alternators, electric steeringand new air-con ditioningsystems.

Imperfect Tool Suppliers say carmakers are lookingfor systems that o Ver several percentage points of fuel eYciency gains. They are not interested in advances that oVer a mere one or two percentage points. But if the economic incentives are wrongfor consumers, the industry’s tec hnical virtuosity could come to nothing.

Average fleet economy targets are an imperfect tool for delivering CO2 reduction. So far, consumers appear to be choosing higher output powertrains with greater eYciency. ACEA says 2002 emissions were 165g/km—a slight rise from the 2001 figure of 164g/km.

It’s Economics 101—issues like CO2 reduction are a classic case for the “free-rider” problem. 9098191066 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 261

While it makes sense for everyone else to improve their fuel economy, the calculus can be quite diVerent for an individual consumer, Many consumers opt to take the benefits of better fuel economy in higher performance engines rather than maintaining the same power output and savingmoney. Without further large hikes in fuel taxes in Europe, consumers will likely continue to go for the fun option rather than the environmentally friendly one. But rather than confront this reality, regulators are considering further regulations—a reduction in particulate emissions, for example, or a shift to CO2 air-conditioningsystems that will make it even more diYcult to achieve the CO2 reduction targets. “Today’s cars are clean, but the people in Brussels want more,” said one development executive, Oars have also become heavier and less fuel-eYcient as more equipment is added to meet safety regulations. The industry feels that it is runningup againstthe limit of what it can do. If re gulators recognize this (a big if at present) this will mean that we are reachingthe apogeeof the pay-o V for environmentally friendly technologies. http://www.supplierbusiness.com/news/full.php£newsitemEPZEkZuVpAghmvXMwI

Supplementary memorandum by Norwich Union (CAR 33A)

CARS OF THE FUTURE

Thank you for the letter of 18 March and the opportunity to expand upon our statement given at the Transport Select Committee on 25 February 2004. We anticipate that our “Pay As You Drive”= insurance will provide Norwich Union with a richness of journey data which will not only provide fairer insurance premiums but also information that could assist with road safety and road planningprogrammes. Of course we have to ensure that we abide by the Data Protection Act and not disclose personal data of our customers to anyone outside of that which our contract with our customers allows. We will provide journey information to each “Pay As You Drive”= customer on a regular basis. This will provide them with a breakdown of insurance costs by journey, help them identify ways of drivingmore safely and potentially reducingtheir insurance premiums. Additionally we believe that Norwich Union can share our pilot findings (depersonalised) with interested stakeholders, specifically to: 1. Customers, to promote “Pay As You Drive”= insurance and the benefits of safer drivingwhether they purchase “Pay As You Drive”= or not. We anticipate that we will promote this directly to motorists and via our insurance intermediaries. 2. Consumer Groups, to share and communicate the wider benefits of safer driving, not just to manage insurance premiums but the benefit of safer roads. 3. Government Departments and Agencies. To consider the opportunity of analysingdata to understand road usage not just from prescribed surveys but all year round analysis on all road types. This could highlight trends and features that may be useful for road route planningegcongestio n, road densities. The benefit of telematics sourced data is that it tracks total journeys (from start point to destination) rather than taking “snapshots” of traYc flows at particular locations. Our thoughts are at a very early stage but we have commenced the process of engagement We have met government departments and agencies as well as consumer groups to share our plans and ensure all interested parties understand our direction. We have invited a number of groups within the Department for Transport to a seminar with the sole focus of consideringthe opportunity of sharingour findingswith them This Seminar is planned for late April. We are also engaged with Director General Transport and Energy and Information Societe with reference to road safety objectives and technology developments. 4. Potential partners across Europe. To promote the benefits of Pay As You Drive= insurance and its technology across the EU. 5. Commercial partners across other industries, such as technology, automotive and telecommunications to ensure that we develop this emerging technology across interested industries rather than in isolation. Sharingdata findingswill be central to the collaboration. In sharingour findingswe aim to: (a) Freely communicate to consumers in order to improve road safety awareness and help reduce insurance accident costs. (b) Share information for wider use and new opportunities (across industries, across EU, across Government Departments/agencies) at appropriate commercial value which in turn will help fund/ reduce the cost of oVering“Pay As You Drive” = to consumers. 9098191067 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Ev 262 Transport Committee: Evidence

We trust that this provides you with an insight into the current activity under consideration. Should you have any further questions or wish to be directly engaged or linked with our work with Department for Transport we will be happy to discuss. Douglas Vallgren MarketingManagerTelematics 29 March 2004

Supplementary memorandum by the Society of Motor Manufacturers and Traders Ltd (CAR 43A)

CARS OF THE FUTURE Thank you for the recent letter. SMMT welcomes the opportunity to assist the Transport Committee in its inquiry into cars of the future. I hope that the information below satisfactorily addresses the further questions that you have raised.

1. What progress has been made with regard to standardising telematics technologies in vehicles? In the heavy commercial vehicle sector, there are existingstandards in pl ace for regulating telematics data. The standard—FMS (Fleet Management System) Standard based upon SAE J 1939—has allowed a common set of telematics information on a range of agreed data items to be used by commercial vehicle manufacturers. The standard provides for monitoringinformation on item s such as braking, acceleration, vehicle speed, axle weight, engine hours, fuel consumption, coolant temperature, power take-oV operation and tachograph information. It lays down measurement parameters and degree of accuracy required, and specifies the output format for the resultant data. It is suggested that this standard could be transferable to mass market vehicles which would allow similar protocols to be used, all based on the same agreed standard.

2. Is the Powering Future Vehicles Strategy target for 10% of vehicles below 100g/km, the best sort of target to reduce carbon dioxide emissions from the transport sector? The European motor industry has an existingvoluntary agreementwith the E uropean Commission to reduce average new car CO2 emissions to 140g/km by 2008–09. This requires vehicle manufacturers to address emissions across the full range of vehicle they produce. It allows them to plan the introduction of new technologies and products in a manner that best suits their commercial objectives. The target proposed in the PFV strategy should be seen as complementary to the EU agreement. There is some concern that it could result in the forced development of a very narrow range of niche vehicles that may divert resources from more productive technologies. It is unlikely that global manufacturers would develop vehicles for a single national market. It is hoped that the PFV target, alongside the CO2 based taxation regimes and the purchase incentives that operate in the UK will encourage more vehicle manufacturers to launch their lowest emittingvehicles in the UK. This would help establish the UK market as a leader in the take up of low carbon cars and provide increased opportunities for testingand development work to be undertaken here.

3. Only 0.2% of the fleet is currently made up of vehicles that were eligible for grant funding. Are we going to need to move from grant funding to a more mainstream incentive scheme if we are to achieve 10% of sales as “low carbon”? To what extent will grant funding be needed to support a 10% target of low carbon cars? There will continue to be a need to provide a specific purchase incentive for vehicles that introduce new and innovative technologies. Grant funding is limited and cannot be expected to support the 250,000 or more vehicle sales implied by the PFV target. The VED system already signals the benefits of purchasing lower carbon vehicles. The company car tax regime, however, could be amended to give a stronger and simpler incentive for purchasers to consider vehicles with CO2 emissions below 120g/km.

4. Are schemes such as the Government’s “Ultra Low Carbon Car Challenge” the optimum way to fund development and demonstration work? The Ultra Low Carbon car Challenge is one of a number of initiatives designed to stimulate interest in the development of low carbon technologies. These are important in engagingthe automotive sector in the global opportunities that exist in the development and supply of new or improved technologies. As well as raisingthe profile of new technologieswith potential business and privat e purchasers. It is important that Government co-ordinates the programmes and funding streams that support work on low carbon technologies to maximise their impact. Awareness and participation by smaller companies in these programmes needs to be improved. 9098191068 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

Transport Committee: Evidence Ev 263

5. Would you agree that the area where Government support for technological innovation has been weakest is in relation to product development and commercialisation? Yes.

6. Would you support the introduction of venture capital grants to help get hydrogen, biomass and fuel cell technologies to the market place? Yes.

7. What standards would you like to see set for making information from black box recorder type equipment in vehicles available to the police? To what extent do vehicle manufacturers co-operate with the police in this regard? The use of “black box” recordingequipment has grownin the heavy commercia l vehicle market where there is a valid business case for their production, installation and use. At present, vehicle manufacturers usingsuch equipment co-operate with t he authorities (Vehicle and Operator Services Agency and the police) on request. Assistance is given on a case-by-case basis. There is concern over havingall data openly accessible to the authorities because of the cost and resource implications that would be required. There may also be legal implications of askingthird parties (ie manufacturers) to download information that is held in the property of the consumer. Members point out that in the event of a collision, 45 seconds of data would be necessary to the authorities—30 seconds prior to stoppingand 15 seconds after. This would provide speed, brakingand gear deceleration data needed to assist accident investigation. Any standards should be discussed in advance with industry to determine the most eVective use of data and the processes for data retrieval.

8. Following the Block Exemption, what progress have manufacturers made in ensuring that independent repairers have access to the necessary technical information for new vehicles? The new block exemption regime provides greater opportunities for the independent repair and service sector. The regime requires vehicle manufacturers to provide technical information on a non-discriminatory basis and SMMT is confident that vehicle manufacturers are complyingwith t hese obligations. Paul Everitt Head of Communications, Economics and Policy 1 April 2004

Supplementary memorandum by BP Oil UK Limited (CAR 44A)

CARS OF THE FUTURE Thank you for the letter of 11 March with supplementary questions from the Transport Select Committee. In response to the question concerningan apparent di Verence between USA and UK in viewpoints over future oil supplies, our view, so far as these things can be judged, is that mainstream opinion about future oil supplies is the same in both countries. However, there may be greater concern in certain American quarters, accounted for by the fact that the USA is more import dependent for its energy supplies than UK and also has a much greater energy intense economy. And this concern is not restricted to energy. The USA public are more concerned about international dependence on a whole range of general issues. Moreover, on fuel specifically, the USA public is more accustomed to cheaper fuel than in the UK where it is heavily taxed, and is therefore possibly more concerned about the possibility of oil price increases. For these reasons public opinion about issues such as USA dependence of middle east oil achieve a higher profile than they would in UK. In addition, there are parts of the United States, especially in California, where there is particular concern over oil as a finite resource, and a desire to be at the vanguard of alternative energy developments. But this is not the preponderant American view, and it appears that USA takes as a whole a very similar view to UK in terms of the projected availability of oil. In response to the question about the environmental benefits from the BP Ultimate fuels, I can provide data from the extensive tests on a large range of vehicles undertaken by BP and independent bodies over a period of more than a year. These tests demonstrated that typical reductions in pollutants for petrol vehicles were 14.5% less carbon monoxide, 5.3% less nitrogen oxide and 5.6 % less unburnt hydrocarbons. For diesel vehicles the typical reductions in pollutants were 7.6% less carbon monoxide, 4.5% less nitrogen oxide and 36% less unburnt hydrocarbons. 9098191069 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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These are typical figures but for some vehicles much greater improvements were noted. In addition to reductions in pollutants both fuels also gave noise reductions of typically 15% and up to 50% dependingon the vehicle. I hope the above covers the questions raised by the Select Committee but would be happy to provide further details if requested. John Mumford OBE Vice President UK Region 23 March 2004

Supplementary memorandum by the Association of British Insurers (CAR 50A)

CARS OF THE FUTURE Thank you for the letter of 18 March. Our comments on the various questions are as follows:

1. Changes in Motor Accident Personal Injury Claims 1.1 The most up-to-date source of information on trends in personal injury claims is contained in the Third UK Bodily Injury Awards Study (March 2003) sponsored by the International Underwriting Association and the ABI. The enclosed extracts from the study provide the information requested. (See Annex A)

2. Cost of Whiplash Claims 2.1 We estimate the annual cost of whiplash related claims to motor insurers to be in the region of £700 million to £800 million a year. These claims are extremely common—there are over 200,000 each year. And at least 80% of all motor insurance related personal injury claims include an element for a whiplash associated disorder.

3. EuroNCAP and Insurance Premiums 3.1 We are not aware of any individual insurers that specifically take account of EuroNCAP pedestrian safety ratings in setting insurance premiums. We believe that a direct relationship between the pedestrian safety performance of cars, as measured by EuroNCAP, and insurers’ actual claims payments, has yet to be established. It is conceivable that a car with safety features that can minimise injury to a pedestrian in a collision may—and I emphasise may—prove costly to repair in a car to car collision. This could have implications for the total cost of claims and, therefore, the cost of insurance since the majority of accidents do not involve personal injury to pedestrians. 3.2 In overall terms, however, if the eVect of EuroNCAP is to encourage manufacturers to improve the pedestrian safety performance of cars, and the eVect is a reduction in insurers’ claims cost, then the result will be reflected in insurance premiums, to the benefit of insurance customers. This is because motor insurance is highly competitive and insurers, through their pricing strategy, will be able to oVer lower premiums for those cars that “perform” better from a third party personal injury perspective. 3.3 We mentioned on 25 February the insurance group rating system—the process that assigns a rating of between 1 and 20 to measure the relative risk characteristic of one car model against another. All other things being equal, a group 1 car is less costly to insure because the relative risks are lower than for those in higher groups. 3.4 We are currently reviewingthe groupratingsystem, primarily because the pattern of insurers’ claims costs has changed in recent years. In particular, the proportion of claims attributable to theft has reduced (primarily because of the incentive the group rating system provides to manufacturers to make their cars more secure) whereas that relatingto third party personal injury costs ha s materially increased. The review will, therefore, examine the injury-causingpotential of cars, and wheth er this can be reflected in group rating. It is not a straightforward issue, however, given that “safety” can come at a price, as indicated in paragraph 3.1 above. Nevertheless, we shall consider the possibility, as we do wish to do what we can to encourage the manufacturers to build safe, economically repairable, cars in the same way that group rating has successfully encouraged them to build cars that are much harder to steal. If it does not prove feasible to build a safety factor into the group rating system itself, we may consider publicisingthose cars with “good” and “poor” safety features to achieve similar outcomes. 9098191070 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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4. Pricing Insurance for Vehicles Fitted with Advanced Accident Avoidance Systems 4.1 This is primarily an issue for individual insurers rather than the ABI, since they are responsible for pricing. The less likelihood that the driver of a particular vehicle is found to be liable for an accident, or even becomes involved in one, because of accident avoidance systems, the greater will be the benefit in terms of the cost of insurance. If accidents are reduced, all motorists should benefit overall and individual motorists with accident-free records should benefit in particular as their no claims discount is built up and preserved. 4.2 We shall also be consideringthe part that accident avoidance systems c an play in the review of group ratingreferred to above. Again,there is the prospect of lower insurance g roups, and hence lower insurance premiums, for cars fitted with such systems if they prove to be eVective. 4.3 We are not aware of any source of data on accident reduction associated with these systems. As indicated above, however, if they are successful in reducingaccidents, t his will feed through into a lower overall claims costs for insurers and, potentially, in a revised insurance group rating system.

5. Motor Insurance Exclusion—Question Raised by Anne McIntosh MP 5.1 The motor insurance exclusion clause provided by Anne McIntosh MP is similar to one adopted by several insurers in the light of the “Year 2000” issue of a few years ago ie the prospect of computers etc failing to cater for the date changeover or causing them to malfunction, with unforeseen consequences. However, the wordingmerely seeks to amplify that historically found in motor insur ance policies whereby mechanical or electrical breakdown of the vehicle or a component is not covered. Motor insurance policies are not intended to cover such breakdowns (for example, a gearbox failure) and the additional wordingmerely clarifies the position. 5.2 The wordingalso makes it clear that policyholders will continue to be p rotected against the consequences of any such failure. Thus, if a computer malfunction causes the car to catch fire, the insurer will meet the cost under the accidental damage section of the policy (assumingthe policyholder has such cover). Liability for injury or damage to third parties would similarly be covered—as indeed motor insurance policies are required to do by law. 5.3 Without further details, we cannot comment on the stance attributed to a large motor insurer by Anne McIntosh. It is possible that the above explanation meets her concerns. If you feel that Anne McIntosh has other concerns, perhaps you would let me know. 5.4 I hope that this explanation also addresses any concerns about insurers providingless cover for customers in future. Today’s cars are already far more sophisticated than their predecessors. This has not given rise to problems of availability of cover and I have no reason to believe that this will change as technology develops. John Parker Head of General Insurance 25 March 2004

Annex A

Executive Summary

Overview The Third UK Bodily Injury Awards Study was commissioned by the International Underwriting Association of London (IUA) and Association of British Insurers (ABI). It investigates injury claims trends in the UK and the forces driving them, and is the biggest exercise of its kind ever undertaken. The first two UK bodily injury studies, published in 1997 and 1999, have become recognised as authoritative information sources. The second study concluded that: — Bodily injury claims had been risingat an averageof 11.7% pa from 1989 to 1 999, reflectingboth greater severity (cost per claim) and frequency (number of claims). — The rate had been highest (13.8% pa) for the period 1994–97. — The House of Lords decision in Wells-v-Wells had contributed substantially to claims escalation. — Conditional fees and the rise of after-the-event insurance had helped to make litigation risk-free for claimants. Legal factors were likely to continue to push up claims costs. — There were no serious technological or commercial barriers to the development of an industry- wide database of bodily injury claims, whose wide-ranging benefits would include swifter, more consistent claims settlement and improved reserving. — The second study also investigated the use of rehabilitation by the insurance industry. It included a voluntary Rehabilitation Code and an accompanying Guide to encourage greater take-up by insurers and personal injury lawyers. 9098191071 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The third study takes up many of these themes. Its findings stem from research carried out by four workingparties. — The Actuarial WorkingParty has analysed more than a million claims and up dated its findings. It has been able to provide more detailed analysis than ever before, partly as a result of improved data quality. — The Legal Working Party has provided a thorough account of the wide-rangingchangesthat have taken place since the last report was published and has assessed possible future trends. — The Medical WorkingParty has investigatedthe increased use of prosthet ics, such as artificial limbs, and their impact upon the claims process. — The Rehabilitation WorkingParty has considered the growinguse of rehab ilitation by the insurance industry. It also publishes an updated Code and Guide, and draws attention to research into the psychological aspects of injury.

The Main Findings of the Third Study are Summarised Below:

Claims trends The cost of bodily injury claims to UK motor insurers has risen by nearly 10% pa over the past decade. The rapidly changing legal environment and cost of medical treatment have played a bigpart in this increase. The influence of the claims culture can be seen by the fact that the cost of bodily injury claims rose by 117% between 1992 and 2000. At the same time national average earnings rose by 37%. Payments by reinsurers on bodily injury claims above £250,000 have gone up by more than 20% pa This is over twice as fast as in the primary market and reflects the growing number of claims that reach reinsurance layers. Some of the largest percentage increases relate to higher cost cases. There are two components to claims escalation—severity (ie cost per claim) and frequency (ie number of claims). Average claims severity has increased at an annual rate of 6.7%, average claims frequency by 3.0% pa. The surge in small claims noted in the previous study has not continued. There was a significant drop in the number of claims under £1,000 between 1998 and 2000. Claims frequency at other levels continues to rise, especially between £5,000 and £15,000. Claims escalation dropped to 8.4% in the last two years analysed (1998–2000), but we expect it to return quickly to levels above 10%. Increased pressure from legal developments and higher medical costs will have an impact on claims severity, whilst the recent drop in frequency amongsma ller claims is likely to level out. Personal injury claims accounted for more than 33% of motor premiums in the 1998 accident year. The 1999 accident year looks like beingsimilar, whilst there was some improve ment in 2000 due to rising premium rates. Although the latest figures fall below the 36% recorded in 1997, loss ratios (claim costs to premiums) still doubled duringthe period 1994–99. Legal costs, as a percentage of motor personal injury payments, have remained remarkably constant at around 30%. This means that they continue to increase by more than double the rate of national average earnings, costing around £1 billion pa (equivalent to approximately 9% of premium income). Insurers and reinsurers have had to strengthen reserves for claims over £100,000 in response to legal changes over recent years, many of which have had a retrospective eVect (such as charges to discount rates). The quality and consistency of claims data has improved, as recommended in the first two studies. However, more work needs to be done in this area to increase the industry’s ability to understand claims trends.

Legal trends Hardly any aspect of bodily injury law has been left untouched in the past three years, and there were still many potential changes in the pipeline when this report went to print (January 2003). As predicted in the second study, the net eVect of these changes has been to increase the cost of bodily injury claims to insurers at well above the rate of retail price inflation. Factors aVectingclaims severity include further reductions in the discount rate, t he Court of Appeal’s decision to increase general damages for claims above £10,000 and increases in recoverable hospital charges. Factors aVectingfrequency include increased awareness amongclaimants of their ri ghts and the public’s relatively risk-free access to litigation. Insurers are adoptinga more proactive approach to claims, increasinglys eekingto identify claims and manage them to a satisfactory conclusion. 9098191072 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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After an initial period of adjustment, the Woolf reforms appear to have achieved an improvement in the speed of settlement. The introduction of pre-action protocols and Civil Procedure Rules has led to fewer claims proceeding to trial.

Medical trends Medical costs continue to rise at a rate significantly higher than retail price inflation. The use of prosthetics, such as artificial limbs, has grown in both frequency and scope, contributingto the improved well-beingof accident victims. However, it has also added to potential claims costs, and can be expected to continue doingso for the foreseeable future. A high proportion of amputees in the UK (over two-thirds) return to some form of employment, but this rate is lower than in many other European countries. Targeted vocational rehabilitation and a more proactive approach from the insurance industry towards prosthetic rehabilitation could increase the rate of return to work.

Rehabilitation trends The use of rehabilitation by insurers and personal injury lawyers has increased substantially since the publication of the Rehabilitation Code in the previous study, with many practitioners talkingof a “sea change”. Reinsurers have played a significant part in encouraging this change. However, much remains to be done to promote the concept of rehabilitation within the claims process. Many bodily injury claims still proceed without any consideration of rehabilitation. There is a wide range of attitudes towards rehabilitation among both insurers and personal injury lawyers. Companies that are most likely to practise rehabilitation eVectively are those where it is driven from the top of the organisation. Some insurers are reluctant to make a major commitment to rehabilitation because, despite substantial anecdotal evidence, there is no conclusive proof as to its cost-eVectiveness. The Code is used relatively infrequently, but has made a major contribution by highlighting the availability and use of rehabilitation. People who have used the Code are mostly positive about its eVects. Since the publication of the second study there has been a surge in the number of private sector medical and vocational case managers and other care providers. Some insurers and personal injury lawyers complain, nonetheless, about a continuingskill shortageand inconsiste ncy of service quality. The recent establishment of the Case Management Society of the UK is intended to create a professional framework for case managers. The psychological aspects of injury are often overlooked and under-estimated.

Overall Conclusions This study demonstrates conclusively that claims for UK motor bodily injury continue to escalate much more quickly than general inflation. Although there has been a temporary reduction in the rate of claims escalation, the cost to insurers continues to increase at over twice the rate of the National Average Earnings Index. Furthermore, there is every prospect that legal changes and the rising cost of care will add to these inflationary pressures. Insurers would, therefore, be well advised to plan on the assumption that claims costs will continue upwards for the foreseeable future. Faced with increased costs, insurers are adoptinga more proactive approa ch with a view to earlier involvement in claims management. Rehabilitation can be expected to play an increased role in the claims process, even though its adoption is hampered by a number of factors. The fact that, with one exception, every large and medium-sized UK motor insurer contributed data to the study (as well as several smaller insurers) shows that the industry sees value in poolingclaims information to gain a better understanding of market trends.

Conclusions 7.1 Personal injury claims costs are still risingwell in excess of the incr ease in national average earnings. The average annual rate of claims escalation over the period 1991 to 2000 was 9.9% per annum, in comparison to an average increase in NAE of only 4.2% per annum over the same period. Personal injury claim costs to the motor insurance industry are, therefore, 133% higher than they were in 1991 in comparison to NAE, which is only 45% higher. 9098191073 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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7.2 There is evidence, however, that inflationary pressures on overall personal injury claims reduced duringthe period 1999 to 2000, followinga period of strongsustained rise s in personal injury costs. The overall average increase in escalation rate for the period 1998 to 2000 was 8.4% per annum, in comparison to the period 1994 to 1998, where it was 16.3% per annum. 7.3 The reduced increase in escalation rate is mainly due to reduced claim frequency levels, which stem from a reduced frequency of the very small claims. Claim frequency levels in the claim size range £5,000 to £15,000 are still rising. Overall, claim frequency levels in 2000 are 29% higher than the levels experienced in 1992. 7.4 The immediate outlook, however, is not clear. In our opinion, current levels of annual increase in severity are likely to be maintained for the foreseeable future, given the number of legal changes that are potentially on the horizon. We also expect a levellingin claim frequency a s the market levels adjust to higher longterm rates under the new ATE (After The Event) legalexpense insurance and CFA (Conditional Fee Arrangement) regimes. Therefore, a quick return to double-digit escalation rates in burningcost can be expected. 7.5 There is strongevidence that the inflationary pressures on the very lar ge claims are much higher than for the smaller and medium-sized claims. Typical claim severity inflation levels for claims of an average size of around £750,000 are 9% per annum. There have also been increased frequency levels at these claim size ranges. We have shown that reinsurers will be particularly impacted by these trends, with burningcosts to a reinsurer of claims in excess of £250,000 increasingby more than 20% per a nnum over the period 1994 to 2000. 7.6 The Woolf reforms took some time to have a beneficial eVect on claim settlement rates. In fact, for claims occurringin 1998 and 1999, there appears to have been a slowdown in s ettlement rates. However, settlement rates increased strongly during 2000 and it appears that it took some time to adjust to the new protocol procedures and for the beneficial eVects to bed down. 7.7 We have found that the personal injury incurred development patterns vary considerably between insurers, reflectingthe attitudes and philosophies that di Verent claims managers apply to their case reserving policy. Their attitude to large claim case reserving is likely to be the biggest diVerentiator. 7.8 On balance, the insurance industry tends to underestimate case reserves. In general, case reserve estimates are 50% too low on their initial setting. This varies significantly by size of claim. Whereas the smallest claims are often over-estimated, the largest claims are continuously under-estimated. In practice, this can be compensated for by the global IBNR reserves carried by insurers and reinsurers. Clearly, claims managers are faced with a diYcult task where full information on claimant details is not normally known when a claim is reported. The retrospective eVect on claims of the many legal changes that occur throughout their lifetime means that the goal posts are constantly moving. 7.9 Where there are changes in cost of personal injury claims during the life of a claim, there can be serious implications for the financial health and controls within insurance and reinsurance companies. The need for statistical and actuarial IBNR estimation of claim reserves in tandem with individual case estimation of personal injury claims is critical. 7.10 The very largest claims show the greatest case reserve deterioration. The largest 50 incurred claims as at the end of 2001, for each of the accident years 1998 and prior, have increased by more than £270 million over the last three years. These mainly arise from the accident years 1992 to 1998. This represents a deterioration of over £770,000 per claim. 7.11 Personal injury claims continue to be a significant proportion of the premium collected, accounting for more than 33% of premiums in the 1998 accident year. The 1999 accident year looks like beingsimilar, whilst there was some improvement in 2000 due to the risingpremium rates th at prevailed at the time. The loss ratios (claim costs to premiums) doubled duringthe period 1994–99. 7.12 Legal costs as a percentage of the personal injury payments in motor claims have remained remarkably constant, at around 30% across all past accident years. These costs have increased at the same rate as the increase in claims costs, which we have seen in this report to be significantly in excess of national average earnings. As a percentage of premiums, legal costs account for approximately 9% on current premium rates. This represents a £1 billion industry for the legal profession. 7.13 Clearly, the industry must continue to do more work in all these areas. An improved understanding of the personal injury trends will lead to better reservingand better pric ing. It will also assist understanding of the insurance process through improved management information and better internal and external communication channels, particularly with Government departments and the media. This would benefit all insurers, large and small alike. 7.14 Insurers should continue to collect better data, particularly on claimant details, heads of damages and expenses. These are often held on paper files or systems not linked to the main claims administration systems and are therefore not freely accessible for statistical analysis. 9098191074 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Supplementary memorandum by ACPO ITS Working Group (CAR 54A)

CARS OF THE FUTURE

Questions Raised in Other Sessions that were Not Answered

1. The issue was raised regarding the cost of a fatality v serious injury crash. From DfT figures the cost of a fatality was w£1 million, the cost of a serious injury crash is w£150,000. Yet the insurance industry claim that serious injury crashes cost them significantly more in the long-term than a fatality. The answer to this question is that diVerent definitions for serious injury are used. The £150,000 figure is derived from the DfT definition of serious injury. In simple terms this is defined as a broken finger upwards. Hence the greater number of relatively minor injuries significantly reduces the average cost of this type of crash. The insurance industry definition of serious injury in this context is long-term or permanent disability, which for them has significant ongoing costs, hence the disparity.

2. Project Emerge and E Call why was Greater Manchester Ambulance Service not involved? E Call has been runningoperationally in the UK since 1998. The initial take up was low, but recently a number of car manufacturers are enteringthe UK market and the E Call provis ion is set to grow. The combined emergency service interests for E Call, were represented by the National 999 Liaison Committee, which has representatives from each service at a national level. In terms of E Call, Greater Manchester Ambulance Service would have been represented by the national ambulance service representative at the 999 Liaison Committee. It would be the responsibility of their representative to pass that information to ambulance services across the country and to provide and receive feedback. Project Emerge is a European Commission part funded research project, which in simple terms is seeking to provide a roamingsolution for E Call. E Call currently only works in the h ome country. Project E Merge has developed a potential solution to resolve this, however, it will be for the European Commission and Member states to decide whether to implement the proposed solution. The UK Participants in E-Merge are: — Martin Hill ODPM and also Chair of the 999 Liaison Committee; and — ACPO ITS Inspector Rooke and myself on behalf of the police service. Martin Hill is there to represent the 999 Liaison Committee for the UK, which represents all emergency services at strategic and policy level. We are there to represent the needs of the emergency services at strategic and user level. To ensure we reflect the emergency service needs, we have consulted the 999 Liaison Committee, Fire Brigades at a National Level and a joint National Fire and Ambulance workinggroup. Due to the time constraints of the project, we have restricted our consultation to national bodies, which represent the service rather than individual brigades or services.

3. Uninsured Drivers—What can be done? The ABI insurance database is providingan e Vective facility to assist police detect uninsured drivers. When combined with ANPR technology it can provide an eVective screeningtool. We are now also able to access the database directly from the patrol car via mobile data terminals, which again provides front line oYcers the means to detect oVences.

What is beingdone. — The ABI database is currently updated weekly; there are plans to move this to daily. When this is achieved, it will greatly improve the accuracy and eVectiveness of the information. This is critical when linked to ANPR or enforcement activity. — The roll out of ANPR with strike teams is startingto deliver results in bot h crime but also no insurance detection. As this is expanded, detections and more importantly the deterrent will increase. — The roll out of mobile data terminals to operational police cars is increasingand will lead to increased enforcement in this area. — Work is commencingto consider expansion of the fixed penalty scheme, whic h will reduce the bureaucracy involved in reportingsuch o Vences. 9098191074 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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4. Driver Liability and training The current situation is that the presumption in law is that the driver is responsible for his/her actions. This would include the use or misuse of devices fitted to a vehicle and any trainingrequirements to use them. However this is not always as clear cut, for example it can be a defence for defective brakes, to show that the car has been recently serviced and the driver had no reason to believe that they were defective. As ITS devices are introduced that act without the knowledge or control of the driver and/or require specific trainingwhich was not provided or taken, this presumption will be tested and challenged by way of stated cases in both criminal and civil courts. New responsibilities or probably more accurately shared responsibilities and liabilities will emerge. The role of the police investigation will and is already changing to identify the role both the driver and the ITS device plays in any crash. The issues raised regarding retrieving the evidence from the ITS device is critical if this responsibility/liability is to be determined. The extraction of such evidence may require an EU Directive to ensure that manufactures provide this facility to emergency service investigators.

5. Pay as you drive and ECall Currently all voice emergency calls made by E call devices in the UK, dial a derivative of 999 or 112 and go straight to the emergency service control room via BT. This issue was debated in Project Emerge, where a number of countries and companies wanted the calls to be routed via their commercial operatingcentre. As emergency services and public authorities (not just UK) we resisted this for a number of reasons, the followingare a summary: (1) The time delays in the commercial centre takingand handlingthe call an d re-routingthis information could cost lives, result in confusion or result in crime going undetected, as evidence is lost. (2) The services centres were unable to meet the current call handlingtime s for E Call services in the UK, which were set as the benchmark for this service. (3) The 999 call ceases to be a 999 call when received by the commercial call centre, therefore the data protection exemptions and priorities supplied through the phone networks no longer apply. (4) If this is scaled up to a European level, how would the service centre in, for example, Germany know where in the UK to route the call. (5) The European Commission have stated quite clearly the 999/112 call should be free at the point of delivery, as public authorities we have also included and receipt. A number of commercial companies were seeking the opportunity to charge Emergency services for receivingthe call and only providingthe service to member who have a contract with them. When consideringPay as you Drive, it has been proposed to o Ver this E Call service as part of the solution, with calls routed via the service centre. Initial discussions with the insurance industry have highlighted the current UK position and the proposed Emerge solution. The insurance industry are and will consider their position. James Hammond Superintendent Sussex Police April 2004

Supplementary memorandum by the Energy Saving Trust (CAR 32A)

CARS OF THE FUTURE—RESPONSE TO ADDITIONAL COMMITTEE QUESTIONS

1. Could you provide details of the cost per tonne of carbon “saved” for the diVerent schemes and areas you operate in? Q548 referred to the price of household energy eYciency

Cost of Current PowerShift Carbon Savings Energy Saving Trust estimates that the full year policy cost eVectiveness of the UK PowerShift programme in 2003–04 will be approximately £550/tC lifetime savings. This is less (ie better than) than the previously quoted figure of £700/tC, which was provided before the full year vehicle numbers and programme costs were known. This figure may still be revised once annual accounts are finalised. This figure is the full policy cost—ie it includes not only grant spend but also marketing, administration, accreditation and other costs. If grant spend only is used, the cost for 2003–04 will be approximately £330/tC. 9098191075 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The CO2 cost-eVectiveness of the PowerShift programme has been improving, due to the wider variety of lower-carbon vehicles now eligible for funding. In PowerShift’s early years the majority of vehicles funded were LPG cars, which have had good air pollution emission benefits but marginal CO2 improvements over diesel. In recent years PowerShift has provided grants to more Natural Gas Heavy Goods Vehicles and Petrol Hybrid Passenger Cars, which have significant CO2 and air pollution benefits. Fundingfor these groups is forecast to increase further in 2004–05, and hence EST estimates that carbon reduction full policy costs for 2004–05 will be less than £250/tC. The PowerShift programme will be reviewed as part of the forthcoming Government consultation on TransportEnergy programmes, and it is anticipated to become more focused on CO2 reductions (see Question 10). It should also be noted that the PowerShift programme aims to transform markets ie increasingthe long-termshare of less pollutingvehicles—so the full env ironmental benefits need to be assessed over a much longer time frame. As the volume of less polluting cars grows, so the policy cost of achievingemission savingsreduces over time (see Question 10).

Comparison with Other Programmes EST manages a range of programmes for domestic energy eYciency and renewables includingproject level grants, household marketing and advice, and advice, information and infrastructure building programmes targeted at the wider energy eYciency industry. The only other measure specific grant programmes being operated at present are in the domestic renewables sector. The policy cost eVectiveness of these programmes range from £695/tC to £1,440/tC (this is grant spend plus administrative and other costs, and can therefore be compared with the overall policy cost for PowerShift in 2003–04 of £550/tC). At the upper end is the Photovoltaic (PV) programme, which is funded by the Department of Trade and Industry. The PV programme was launched in 2002 to help local authorities, industry, homeowners, and homebuilders co-finance photovoltaic systems. Similar to PowerShift, the PV Programme aims to build a market for new technology, and as the volume grows, so the policy cost of achievingemission savingsreduces over time. At present th e PV is at an earlier stage in the market transformation curve and therefore the grant programme would be expected to be more costly than PowerShift which supports some more established technologies. The policy cost eVectiveness of domestic energy eYciency programmes ranges from £4–£55/tC. It should be noted that this reflects the range of mechanisms applied and audiences targeted. These programmes are focused largely on encouraging the adoption of existing technologies and do not seek to build markets for new technologies through grants, and should not be used as a direct comparison with the PV Programme or with PowerShift.

2. Q552 What will the consultation due to be undertaken in May seek to identify? DfT is the appropriate body to advise the Committee on the forthcomingCons ultation on TransportEnergy Programmes. However, EST has been working closely with DfT and understands that the Government Consultation will invite comments on the focus and structure of each of the EST TransportEnergy Programmes: PowerShift, CleanUp, New Vehicle Technology Fund and TransportEnergy Best Practice. Specifically, the consultation is likely to seek views on how to ensure the programmes operate in a way that reinforces the fundamental regulatory, fiscal and other mechanisms for deliveringthe objectives of the Powering Future Vehicles Strategy, the Air Quality Strategy and the Energy White Paper. Comment may also be invited on the structure and focus of each programme, and the fundingbalance between the various programmes within TransportEnergy.

3. Q564 What are the areas of expertise in the UK for low carbon vehicle and fuel technologies? A comprehensive report compiled by consultingengineersRicardo for DfT, 85 concluded “there appears to be significant world-class strength in the UK engineering base, especially in the fields of Hybrid systems, Control and Electronics, and advanced Internal Combustion engines and Transmissions.” An Appendix from the Ricardo report summarisingthe UK expertise in low-carbon and fue l technologies is included in Attachment 1 to this document. There are a number of initiatives to promote lower-carbon technologies in the UK. The Foresight Vehicle Programme, funded by DTI and administered by SMMT, is the UK’s national automotive R&D programme.86 One of the Foresight Thematic groups is Hybrid, Electric and Alternatively Fuelled Vehicles.

85 “Carbon to Hydrogen”: Roadmaps for Passenger Cars: A Study for the Department for Transport and the Department of Trade and Industry”, November 2002. 86 See www.foresightvehicle.org.uk 9098191075 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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The Group aims to encourage the development of all the elements needed to produce a complete working demonstrator vehicle in the form of an urban delivery vehicle or small PSV (including, if necessary, elements of technology that have been developed.87

The UK Government also promotes demonstration projects through the New Vehicle Technology Fund (NVTF), which is administered by EST (see Question 5 for overall summary of NVTF and its eVectiveness). Within NVTF are a number of sub-programmes, such as: — The Low Carbon Bus Programme, launched at Coach and Bus 2003, which oVers operators and manufacturers the opportunity to be awarded grants to help fund new fleets of low carbon buses. The deadline for submission of Expressions of Interest is open until August 2004. — The Ultra Low Carbon Car Challenge funded by DfT and administered by EST. The Challenge is for an aVordable family car, capable of beingmass-produced and travel 1,000 miles between refills (eVectively 80 mpg) and emit 100g/km of CO2 or less (well to wheel). The winners have been announced and projects are underway (see Table A1, Appendix). These include a number of UK engineering consultancies. — A major new initiative is the Centre of Excellence for Low Carbon Technology, which is currently under development by the R&D WorkingGroup of the Low Carbon Vehicle Partne rship.

4. Does the New Vehicle Technology Fund provide capital support in the commercialisation phase of new vehicle technologies? Does the NVTF have a suYcient level of funding to be eVective?

Launched in April 2003, NVTF aims to encourage the transport industry to develop new, technically innovative, lower emissions vehicles for successful near-term market adoption through grant funding to the UK transport industry. NVTF provides focused fundingfor the development and demonstration of a wide range of new, emissions reducing vehicles. It aims to develop the partnerships of stakeholders that are so critical for the successful development of and adoption of new lower emissions vehicles. These partnerships include vehicle manufacturers, small and medium engineering businesses, operators, local authorities and other local regional agencies.

NVTF currently supports 17 new vehicle projects and in 2003–04 issued grants to the value of £2.9 million. These development projects range from new, cleaner buses and all-electric commercial vehicles to natural gas heavy-duty vehicles and low emissions, high performance cars.

A few examples of NVTF projects: — Wrightbus Group and Eneco Ltd Lower emissions hybrid buses are finally reachingthe roads of the UK. Eneco has successfully completed a demonstration of a diesel series hybrid bus and is lookingto in troduce fleets of buses in at least three major UK cities in 2004. Similarly, Wrightbus has recently completed the successful demonstration of a hybrid diesel-electric bus and is also lookingat a number of opportunities with bus operators and local authorities to introduce fleets of buses in the UK. — Leyland Product Developments (LPD) & Lincoln City Council With NVTF grant funding, LPD has this year successfully completed the development and launch of a zero emissions, all-electric shuttle bus. In 2004, it enters service in the heart of the historic city of Lincoln. This successful project also has the potential for wider application and adoption. — London Taxi International (LTI) LTI is, with the support of NVTF, aimingto demonstrate in the second half of 2004 a fully electric light commercial vehicle. This demonstration has the potential for major application in the UK’s cities and will provide real opportunities for business growth and regional development alongside attractive, low emissions vehicle use.

NVTF has been so successful in invitinggoodquality applications that bud get allocations have already been achieved (total budget allocation for FY 2004–05 is £4.6 million) While this shows the vitality of the UK advanced engineering base, the volume of applications exceeds the available budget. Consequently, budget constraints are acting as a bottleneck, slowing down the UK in its ability to demonstrate new future vehicle technology, and also the development of SMEs/OEMs and a UK supply chain for future vehicle developments.

87 See http://www.foresightvehicle.org.uk/dispthematic1.asp 9098191075 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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5. Are you taking steps to streamline the route to funding research activity?

EST would note that DTI funds research activity while DfT funds the demonstration programmes operated by EST (See answers to questions 1 and 4).

6. You have proposed a 10-year fiscal framework for LPG, oVering conditional support for this fuel provided environmental benefits could be assured. Why are you proposing a 10-year period to phase out some support? Do you disagree with those who have told us that LPG oVers a little long-term environmental benefit?

In a response to the Government Consultation on Road Fuel Gases,88 EST proposed a Cleaner Low Carbon Fuel Framework. This framework proposes that a 10-year fiscal framework be applied to all alternative fuels, such as LPG, Biofuels, Natural Gas, and, in the future, Hydrogen.

The actual level of fiscal support would diVer for the various alternative fuels, since they are at diVerent stages of market development and oVer diVerent environmental benefits. The key point is that all alternative fuels require a long-term framework of support to provide the marketplace with suYcient confidence to generate investment infrastructure and vehicle technology investment. (The EST proposal is summarised in Figure A1 (Appendix).)

In the case of LPG, EST proposed that Government oVer conditional support through reduced duty diVerentials provided air quality and carbon benefits can be assured over time through the introduction of dedicated mono-fuel LPG vehicles.

Under the EST proposal these vehicle technology developments would be incentivised by maintainingfuel duty at its current level for the next three years (from 2004). Then, in 2007, the break-even rate for LPG would be calculated against diesel based on the fuel economy of mono-fuel LPG vehicles. The duty rate would be gradually raised to this level by 2010. In 2010 the fuel duty rate would be re-calculated based on the environmental benefits of the fuel. The duty rate should gradually rise to this level over a further three years (creatinga 10-year framework), after which time the duty would rema in constant at this level. The EST proposal is summarised in Figure A1 (Appendix).

The current and potential future environmental benefits of LPG are summarised below:

— LPG Current and Future Potential Carbon Benefits Takinginto account fuel carbon content and upstream energyuse, well to wh eel carbon emissions from LPG vehicles are approx 18% lower than from petrol vehicles and similar to those from diesel. With dedicated engines, well to wheel emissions could be 25–30% better than petrol and 10% better than diesel. To achieve these carbon benefits, dedicated LPG engines must be produced. Mono-fuel vehicles oVer significant carbon emissions reduction benefits compared to both conventional petrol and diesel engines.

— LPG Current and Future Potential Air Pollution Benefits Long-term benefits of new LPG OEMs will be limited because tougher regulated emissions standards are drivingimprovements to petrol and diesel vehicles. Howeve r, high quality LPG conversions will continue to oVer air quality benefits because they are replacingexistingpolluting vehicles. This will particularly benefit polluted urban areas. To achieve air quality benefits, conversions of LPG vehicles must be subject to more stringent quality controls (see summary of recommendations).

To summarise, the EST position on LPG is that support for LPG should be conditional upon continued environmental benefit. To achieve this, industry and Government must work together: industry must improve fuel availability and vehicle technology; Government must provide fiscal stability. If both sides do not make these commitments, the environmental benefits of LPG will not be realised. EST believes that all alternative fuels need to be given as much long-term certainty as possible, and the 10-year Cleaner Low Carbon Fuel Framework could provide this certainty.

88 Printed copies available on request from Alex Veitch—email alexvwest.co.uk. Full report available on-line here: http:// www.est.org.uk/pdf/EST%20response%20RFG%20Consultation%20FINAL.pdf 9098191076 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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7. Will the three-year period of certainty for duty diVerentials, proposed in the Alternative Fuels Framework, provide the stability required in the fuels market?

EST welcomes the structure and stability the three-year framework oVers the marketplace. However we believe our proposed 10-year framework (see Question 7) would have oVered greater industry investment and confidence. The Fleet sector illustrates this point: A fleet manager building a business case for the purchase of alternative fuel vehicles must be able to plan ahead and develop a vehicle runningcost analysis, of which fuel duties (as well as other factors such as residual values) are a key component. Uncertainty over alternative fuel duty rates creates uncertainty in the marketplace, which may drive fleet decision makers toward the purchase of diesel or petrol vehicles. In addition, the fuel supply industry requires a long-term period of stability if it is to recoup its investment in an alternative fuel infrastructure.

8. Do you think that road transport emissions represent a threat to the prospect of meeting the domestic target to cut carbon dioxide emissions by 20%, from 1990 levels by 2010?

CO2 emissions from road transport have kept at a fairly constant level in recent years—between 2002 and 89 2003; transport CO2 emissions decreased by half of 1%. The recent DTI Energy Trends report from March 90 2004 stated that the transport sector accounted for just over one fifth of UK CO2 emissions in 2003, of which 95% was road transport. Worryingly, according to the DTI, report transport CO2 emissions are 4°% higher than during 1990.91

Success of Policy Measures

The UK Climate Change Programme of 2000 suggested road transport would make a comparatively large 92 contribution to the reduction of CO2 emissions from the UK (4 MtC—around 13%—on 1990 levels). EU- level Voluntary Agreements between the EC would achieve this and the trade associations of the major automotive manufacturers to reduce CO2 from cars, backed up by UK measures such as changes to Company Car Taxation and Vehicle Excise Duty (VED) to incentivise the ownership of lower-carbon vehicles. The eVectiveness of these measures is summarised below:

— Voluntary Agreements on CO2 These agreements have brought about very impressive vehicle eYciency gains of around 2% year on year over between 1999–2002, with a 1.2% gain in the last year (see Table A2 and Figure A2, Appendix). — Company Car Taxation CCT is havingan impact on the business car market in terms of incentivising lower-carbon vehicles. However, greater benefits could be achieved if larger fleets became more aware of the benefits of new lower carbon vehicles and fuels within the current tax regime.93 — Vehicle Excise Duty VED does not seem to be pullingits weight.The maximum VED amount currently payable is currently £160 per annum for a Band D diesel car (ie which has a CO2 emission figure over 185 g/ km). This is only £95 more than the rate payable for a Band AAA Petrol vehicle such as the Honda Insight—a rather low diVerential.94 Indeed, recent research by MORI for DfT95 concluded that VED is not currently providinga substantial incentive for the purchase of lower-carbon cars. The MORI work indicated that a diVerential between bands of £150 would persuade 55% of consumers to change to a lower emission car to benefit from the saving. EST will produce more detailed analysis this year on options for further reform of VED. The key point in this context is that VED is not fulfillingits stated aim of incentivisinglower-carbon vehicles.

89 Ibid. 90 Energy Trends, DTI, March 2004 http://www.dti.gov.uk/energy/inform/energy trends/mar 04.pdf 91 Ibid. 92 The following http://www.defra.gov.uk/environment/climatechange/cm4913/summary/03.htm 93 Low Carbon Vehicle Partnership Passenger Car Working Group: 2012 Low Carbon Car Target—Barriers and opportunities Submission to the Pre-Budget Report 2003 October 2003. PCWG-P-03-014. 94 For further information on current VED rates see http://www.dvla.gov.uk/vehicles/taxation.htm 95 Assessingthe Impact of Graduated Vehicle Excise Duty—Quantitative Rese arch, MORI, March 2004 http://www.dft.gov.uk/ stellent/groups/dft roads/documents/page/dft roads 027589.hcsp 9098191076 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Future CO2 Emissions from Road Transport

Numerous studies have attempted to forecast future CO2 road transport emissions. Some of these are summarised below: — Government Forecasts: As mentioned above, the UK Climate Change Programme ascribes a 4 million tonne carbon reduction (around 13%) on 1990 levels. However, projections from the DTI96 have predicted that without such measures, road transport emissions may actually increase by around 27%. — Independent Research

Other studies have attempted to quantify the future CO2 reductions from this sector. These include: Automobile Association: In a paper presented to the Passenger Car Working Group of the Low Carbon Vehicle Partnership, 97 the AA estimated that CO2 from road transport is will rise by only 1% by 2010. IPPR98 and IEEP99:

Modellingundertaken by IEEP for an IPPR report indicated that UK CO 2 emissions from road transport could rise by around 8% to 29% by 2020, overtakingthe domestic, i ndustry and service sectors. The increase would be due to traYc growth.100

Conclusion There is some disagreement about the future of traYc growth and the likely contribution of road traYc to the UK CO2 targets. It is possible that without further action, CO2 from road transport may endanger the UK’s ability to reach its overall CO2 reduction targets, and certainly more action is needed to reduce CO2 from this sector. While vehicle eYciency has greatly increased in recent years, there is the need for the Government to provide greater incentives for lower-carbon vehicles. EST market transformation and technology demonstration programmes such as PowerShift and NVTF have important roles to play in this regard; Government should also look at the eVectiveness of VED and CCT. In addition, it is vital to promote more sustainable travel—for instance, work and school travel plans can reduce emissions substantially, as can the promotion of cyclingand walki ng. EST believes that DfT should continue to emphasise modal shift through its ongoing review of the 10-Year Transport Plan. It is worth notingin this context that in addition to cleaner vehicle and fu el technology programmes, EST also operates the TransportEnergy BestPractice programme that oVers practical advice and solutions to help improve the environmental performance and cost eVectiveness of transport operations. We oVer information on three key fields: — Fleet Management: improvingfuel e Yciency and minimisingvehicle use; — Freight: fuel management and improved logistics eYciency; and — Travel plans: a package of measures to reduce dependency on single-occupancy car travel for business and commuter travel.

9. Only 0.2% of the fleet is currently made up of vehicles that are eligible for grant funding. Are we going to need to move from grant funding to a more mainstream incentive scheme if we are to achieve 10% of sales as “low carbon”? Does the EST have a long-term plan of how the role of grant funding will develop?

Market Transformation EST technology demonstration and grant funding programmes aim to provide the link between R&D and the market. However, many other incentives are needed to transform the UK vehicle market. These include: — Demonstration projects supported by NVTF, to indicate the real-world performance of the vehicle/technology. — Early market adoption, supported by PowerShift and CleanUp grants. — Consumer advice and information, provided by EST, AA, DfT and others, can support the purchase decision.

96 Energy Paper 68: Energy projections for the UK, DTI, March 2000. http://www.dti.gov.uk/energy/inform/energy projections/ ep68 final.pdf 97 “Memorandum by the AA” (http://www.parliament.the-stationery-oYce.co.uk/pa/cm199899/cmselect/cmenvtra/171/ 9072108.htm) 98 Institute of Public Policy Research. 99 Institute of European Environmental Policy. 100Foley, J, “Puttingthe Brakes on Climate Change”,IPPR 2003 http://www.ip pr.org/publications/files/PuttingtheBrakeson.pdf 9098191076 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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— Policy measures and fiscal support provide purchase incentives and promote long-term market sustainability (eg CCT, VED, London Congestion Charge and potentially in the future, Low Emission Zones). — TransportEnergy BestPractice programme advises on vehicle use eg freight vehicle usage, workplace travel plans. — As awareness increases, volumes increase and costs decrease, until eventually the market is sustainable. The Market Transformation Diagram shown below (Figure 1) illustrates how new technology markets may develop, and where the various incentives outlined above fit in. DiVerent technologies would be at diVerent points on this diagram, requiring diVerent periods of time and diVerent kinds of incentive to reach market sustainability. Also, some cleaner, lower-carbon technologies may never go beyond R&D or Demonstration phase. Figure 1: Market transformation diagram

PowerShift and CleanUp Grants TransportEnergy BestPractice programme available to provides advice on vehicle usage incentivise early adoption

NVTF Advice on cleanest Demonstration vehicles helps inform Funding purchase decision Available Policy measures Market is sustainable incentivise early adoption Number of vehicles (indicative only)

Time (indicative only)

EST does not consider that it will ever be possible, or even desirable, to grant-fund every one of the 10% lower-carbon cars sold under the PoweringFuture Vehicles strategy.Inst ead, EST grant programmes should concentrate on reducingcosts for the market introduction of the ve ry cleanest, lowest-carbon vehicle technologies.

Long-Term Future of Grant Programmes EST is currently workingwith the Department for Transport and members of t he Low Carbon Vehicle Partnership to develop a new Low Carbon Vehicle Incentive Programme in the UK. This programme would provide Government grants to UK individuals and companies for the purchase of cleaner, lower-carbon passenger cars and other light-duty vehicles, and would replace the existing“PowerShift” programme.The attached paper explores possible methodologies to find the cleanest cars in the marketplace, and outlines initial thoughts on market transformation issues, as well as a discussion of State Aid implications (see Attachment 2).

10. Have you undertake any research to identify the impact that the exemption of AFVs from the London Congestion Charge has had on the uptake of PowerShift grants and AFV? If so what was concluded? There are currently around 5,000 Alternative Fuel Vehicles currently registered for the 100% discount from the London congestion charge.101 Transport for London does not keep a breakdown of the diVerent fuel and technology types that receive the discount.102 Vehicle manufacturers such as Vauxhall, Toyota and Honda, who manufacture products that are eligible for a 100% discount, all believe that the Congestion Charge provides a strong incentive to purchase cleaner, lower-carbon vehicles.

101Congestion Charging: Update on scheme impacts and operations, Transport For London, February 2004. 102Personal Communication, 5 April 2004. 9098191077 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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EST is keen to work with Local Authorities and Government to promote the use of such discounts in any future local or national charging regimes or Low Emission Zones. EST is concerned that the current proposal for an Edinburgh congestion charge does not exempt any alternative fuel vehicles;103 EST has written to Edinburgh Council on this issue (see Attachment 3).

11. Does having to apply for a grant put some consumers oV buying a low emissions vehicle? Have you undertaken any research to look at this issue? EST accepts that it is perhaps plausible that consumers may be put oV the purchase of a low-emission vehicle due to the paperwork required in applyingfor a grant.EST is taking steps to minimise the paperwork, and intends to introduce an Online Application system in August 2004. This will allow consumers to apply for a grant directly and receive an instant response. This initiative follows discussion with key industry stakeholders who have expressed their clear desire for EST to operate an online grant application system. More detail on the specifics of this system and project development is available from EST.

12. Has EST undertaken any consumer research into the attitudes towards LPG, and the eVect of fuel duty levels? EST has undertaken substantive market research on the alternative fuel vehicle market, focusingon the Fleet Manager audience, as this is our main focus for marketing activity. Please see Attachment 4: Market Research Reports (hard copies only). April 2004

APPENDIX

Figure A1: EST 10-Year Fiscal Framework for LPG (Indicative duty rate only)

From 2013, duty remains at Range: Duty to be environmental duty rate gradually increased to environmental duty level

2010: Duty reaches break-even point with diesel. Duty rate re- calculated to reflect environmental benefits

2007-2010: Duty rate gradually increased to diesel break-even point

LPG market reaches sustainable level 2007: Duty rate re- Mono-fuel LPG calculated using break- vehicles reach

Excise duty (indicative rate only) Current even methodology. critical mass Duty: 6.5p/l

Mono-fuel LPG introduced to market Development of mono- fuel LPG vehicles

20042005 2006 2007 2008 2009 2010 2011 2012 2013 20142015

103The Final Draft Charging Order can be viewed here: http://iti.tiedinburgh.co.uk/downloads/Final draft charging order.pdf 9098191077 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Table A1

Winners of Ultra Low Carbon Car Challenge

Company Technology Partners/Suppliers MG Rover Hybrid Vehicle MG Rover—OEM Mira—test and vehicle systems development Powertrain for the engine Zytek Hybrid Vehicle Zytek—system supplier Zebra batteries Ricardo Hybrid Vehicle PSA—OEM vehicle provider Ricardo Systems design QinteQ for the electrical system drive

Table A2

Average new car CO2 emissions in the UK (1997–2003)

Year Average CO2g/km y/y % change % change on 1997 1997 189.8 – – 1998 188.4 "0.70% "0.70% 1999 185 "1.80% "2.50% 2000 181 "2.20% "4.60% 2001 177.6 "1.90% "6.40% 2002 174.2 "1.90% "8.20% 2003 172.1 "1.20% "9.30%

SMMT UK New Car Registrations by CO2 Performance, 2004 http:// lib.smmt.co.uk/articles/sharedfolder/Publications/CO2%20Report.pdf

Figure A2: Average new car CO2 emissions in the UK 1997- 2003

195

190

185

180

175

170 Average CO2g/km 165

160 1997 1998 1999 2000 2001 2002 2003 Year

Attachment 1

RICARDO REPORT104

APPENDIX D: UK TECHNOLOGY BASE Information on UK companies, organisations and institutions, or multinational companies, organisations or institutions with a significant UK technology base, has been collated based upon: — ExistingRicardo contact, research partnerships etc.

104“Carbon to Hydrogen”: Roadmaps for Passenger Cars: A Study for the Department for Transport and the Department of Trade and Industry”, November 2002. 9098191078 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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— Internet and Literature searches. Due to the time-scale of this study it is unlikely that this list is completely exhaustive. Information has been grouped into technology blocks, with comments on areas of particular strength or weakness.

1. Passenger Car Manufacturers Ford has a significant manufacturing base in the UK, for Diesel engines, components, passenger cars and vans. They also have engineering bases at Dunton, Essex (mostly of Diesel engines) and Gaydon, Warwickshire (for the Premier Automotive group including Jaguar, Land Rover and Aston-Martin). Ford have shown a number of Hybrid and Fuel Cell concept vehicles, although the engineering of these appears to have been on a global basis. Ford have been reported in the press to be readyinga Hybrid SUV (4x4) for production in the US. Rover manufacture and engineer passenger vehicles in the UK, based at Longbridge, Birmingham. Rover is one of the smallest independent volume manufacturers of cars, and therefore have not been able to invest in costly, speculative advanced prototype vehicles. Ricardo are not aware of any Hybrid or Fuel Cell vehicles demonstrated recently in the public domain. Other Passenger Car manufacturers with a significant UK base include: General Motors (usingthe Vauxhall brand), BMW (usingthe Mini brand), Peu geot, Nissan, Honda and Toyota. For these brands the majority of the manufacturers’ own engineeringcapability is located outside the UK. Most have demonstrated significant advanced technology, for example Fuel Cells (GM), Hydrogen IC engines (BMW), production Hybrids (Honda, Toyota), but these technologies were mostly developed outside the UK. From this it appears that the UK has a reasonable manufacturingbase for the implementation of new technologies into a diverse range of passenger cars (and also vans, which may benefit from similar technology). One particular strength is the manufacture of engines, with both Ford (Dagenham—Diesels) and BMW (Hams Hall—4cyl Valvetronic) manufacturing advanced products here. However, tendency for the main engineering function to be located overseas is a weakness in UK capability and may disadvantage suppliers with their engineering base in the UK.

2. Advanced Conventional Powertrain and Vehicle Components There are numerous suppliers to the automotive industry with a UK presence. Significant ones include: — Visteon, supplier of vehicle systems includingmotors, alternators and power electronics, has a technology base at Dunton, Essex. — Delphi, supplier of vehicle systems includingmotors, alternators and p ower electronics, have a technology base at Gillingham, Kent focused on Diesel fuel injection equipment (formerly Lucas). — Federal Mogul, supplier of various vehicle systems and engine components, recently re-located their technology base (formerly T&N) out of the UK. — Calsonic, supplier of Thermal System and Exhaust System components, have a technology base in Llanelli, Wales. — Holset, supplier of turbochargers, have a technology base in the NE of England. In terms of major components and systems suppliers, the UK appears to have a reasonable portfolio although the loss of engineering centres from the UK is of concern.

3. Advanced Powertrain and Vehicle Engineering The UK oVers a surprisingnumber of world-class suppliers of engineeringexpertis e. Some principal organisations are: — Ricardo—Expertise in Petrol and Diesel engines, Transmission & Driveline, Vehicle Engineering, Control and Electronics, specialist Software for automotive engineering. Ricardo have recently demonstrated the i-MoGen Diesel Mild Hybrid vehicle together with supplier Valeo, and are involved in four customer Hybrid programmes. Other advanced technology projects include the “lean boost” Petrol engine, a high eYciency concept to be demonstrated in 2003, and advanced “dual clutch” transmission concepts. — Lotus—Well known for their sports cars, also a major provider of engineeringservices. Lotus have recently demonstrated electric and CNG versions of their Elise car (itself noted for low weight technology), and have promoted hydraulic valve actuation as an enabler for advanced, eYcient combustion. — Cosworth—Best known for high performance engineering, major provider of engineering services and low volume cast component manufacture. — Zytec—Supplier of low volume engine-management systems and engineeringservices for electronic systems. Zytek are reported to be workingon Hybrid and Electri c vehicle programs for DaimlerChrysler and General Motors. 9098191078 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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— MIRA—Supplier of engineering services and vehicle test facilities, MIRA have demonstrated a Hybrid vehicle. — TWR—Supplier of engineering services including motorsport and high performance vehicles. — Qinetiq—Formerly DERA, expertise in Hybrid systems includingcontrol, battery management. Reported to be developingHybrid technologyfor military applications. — Prodrive—best known for Motorsport, especially World Rally Championship, also engineering of vehicles, transmissions, engines (at subsidiary Tickford). — PI Technology—control systems for Hybrids, Fuel Cell vehicles and Alternative Fuels, reported to be workingon Hybrid and Fuel Cell control system programmesfor Ford. — Universities—Many, including Imperial College, Loughborough, Brighton, Leeds, Cambridge, Bath, CardiV (Engines/Combustion), SheYeld, Sussex (Electrical machines), Imperial College, Loughborough (Fuel Cells). The UK’s engineering base is a recognised strength. A number of organisations are actively involved in Hybrid vehicles, at a level which is globally competitive.

4. Batteries — Atraverda (developingnew Ceramic plates for lead acid batteries). — Hawker (Lead acid). — Chloride (Lead acid). — Zebra (www.betard.co.uk) (Sodium Sulphur for vehicle application) Advanced Lead Acid Battery Consortium (Based in UK, developingdemonstrator vehicle with various UK /European partners). Focus here appears to be mainly on Lead Acid technology. Low cost, durable, high performance Lead Acid batteries are an important technology for the early introduction of hybrid technology (Low Carbon steps 1-3), but may not develop suYciently to be used in further steps. Nickel Metal Hydride (NiMH) and Lithium-Ion (Li-Ion) technologies do not appear to have a strong UK base; key global players include Panasonic (Japan) and Saft (France). This could prove a key weakness for UK industry if, as expected, the technology moves in this direction.

5. Electric Motors — Visteon, Tier One supplier to the automotive industry, manufacture a wide range of vehicle electrical equipment and may supply integrated starter-generators in the near future. Technology base at Dunton, Essex. — Dana Corporation (Echlin Automotive), US based Tier One supplier, own a number of formerly small, independent UK suppliers includingAutomotive Motion Technology who have developed permanent-magnet motor technologies. — SheYeld University have world-class expertise in motor/generator development, via a 40-strong research team. — Magnetics System Technologies, SheYeld, custom high performance motors Aisin Seiki, technology centre at Sussex University (design motors for mild hybrid vehicles). — Elektomagnetix Ltd. Sussex (Electric motor engineering consultancy). This appears to be an area of reasonable strength, encompassing both mass production supply and academic research. Technology appears generally comparable to other global players, includingTier One suppliers Bosch, Siemens, Valeo and Delphi.

6. Fuel Cell Technologies — Johnson Matthey—suppliers of precious metals and catalysis products, are a major global stakeholder in this emerging future technology (and also in IC engine emission control). — ZeTek Power—Specialise in Alkali Fuel Cell technology, supplied a prototype Fuel Cell van to Westminster city council. — Loughborough University/Advanced Power Systems—have very significant intellectual property in Fuel Cells, includingtheir own prototype PEM units. 9098191079 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Attachment 2

SUMMARY OF DRAFT PROPOSALS FOR A LOW CARBON VEHICLE INCENTIVE PROGRAMME

DEVELOPING A LOW-CARBON PASSENGER VEHICLE INCENTIVE PROGRAMME IN THE UK105

Abstract This paper provides initial plans for the development a new Low Carbon Vehicle Incentive Programme in the UK. It is beingdeveloped by the EnergySavingTrust and the UK Departm ent of Transport (EST is the Government Agency that runs Government programmes to promote cleaner vehicles).106 This programme would provide Government grants to UK individuals and companies for the purchase of cleaner, lower-carbon passenger cars and other light-duty vehicles, and would replace the existing “PowerShift” programme. The paper explores possible methodologies to find the cleanest cars in the marketplace, and outlines initial thoughts on market transformation issues, as well as a discussion of State Aid implications.

Extended Abstract

Principles for the new programme There is a clear environmental need for Government to lead on market transformation in the vehicle market. A new grant incentive programme should fit into existing strategies to promote market transformation—the EC Voluntary Agreements on CO2 and the UK PoweringFuture Vehicles strategy. The new programme should be designed such that it opens up additional options for consumer education, such as “clean car league tables” and customer labelling.

Next steps: programme development The programme will be fully consulted on with key stakeholders, and must also receive State Aid approval. It is hoped that the new programme will be ready to launch in 2005. DISCLAIMER: This paper is under review and does not reflect the final programme structure.

Summary of proposed structure

Figure 1

Summary diagram showing possible structure of new vehicle incentive

Stage 1: Use a selected methodology to determine the “cleanest” vehicles n Stage 2: Determine funding band: n Stage 3: Establish market transformation benefit: n Stage 4: Allocate grant (if appropriate)

Stage 1: Use a Selected Methodology to Determine the “Cleanest”Vehicles

Option (a) “CO2 ! AQ Threshold”

Under this option, the vehicle’s CO2 emissions would be used to determine which vehicles are eligible for a grant. To avoid the risk that vehicles with good CO2 performance but poor air quality performance could be funded, an “air quality threshold” would be adopted.

105This extended abstract was presented at European Ele-Drive Transportation Conference, March 2003. 106See www.est.org.uk 9098191079 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Option (b) “Combined Score”: Air pollution and CO2 emissions

Under this option, a weighting system would be used to combine air quality emissions and CO2, to give an overall environmental score for each vehicle. There are many available methodologies to produce such a score, including: — Cleaner Drive: http://www.cleaner-drive.co.uk/ — AA 5-Star Rating: http://www.theaa.com/allaboutcars/emissions/emissions home.jsp — Environment Agency “Top 20”. — VCS/VCD Auto-Umweltliste (Car Environmental List): http://www.autoumweltliste.ch — ACEEE “Green Book” Online: http://www.greenercars.com/howbuy.html

Stage 2: Determine Funding Band

Option (a) “Entire Fleet” Approach This approach would simply take the entire fleet and allocate a rankingbase d on either of the methodologies discussed in Stage 1. However, this approach is not a good basis for a grant programme because if one takes the entire vehicle parc, then the “cleanest” vehicles will always tend to be the smallest and lightest.107

Option (b) Market segment approach A more eVective way to rank vehicles is the “Market Segment” approach. This is simply a rankingsystem that is based upon vehicles divided into diVerent categories based on size and/or function. This approach is already used to good eVect for NCAP safety standards; many car companies choose to promote their products as the “safest car in its class”. Data for this rankingsystem woul d be purchased quarterly from the SMMT. Note: An important question is whether “Tank to Wheel” or “Well-to-Wheel” emissions should be used to calculate vehicle rankings.

Examples An initial example of a rankingsystem based on the “small family car” vehic le class, usingdata from Cleaner Drive, is provided below.108

Top 20 “Small Family Car” Class: CO2 Emissions from vehicles meeting Euro IV emissions standard

Rank Make Type Engine Segment Fuel Euro CO2 Std g/km 1 Toyota Prius 1.5 VVT-i Hybrid S12 Petrol 4 120 2 Seat New Ibiza 2.4 Bi-Fuel (CNG) S12 Petrol 4 144 3 Vauxhall Astra Hatch/Saloon S12 LPG 4 151 4 Vauxhall Astra Estate 2.4 Bi-Fuel S12 LPG 4 151 5 Vauxhall Astra Hatch/Saloon 1.3 Classic S12 LPG 4 152 6 Vauxhall Astra Estate 1.3 Mirage S12 LPG 4 152 7 Fiat Stilo Classic 1.4 MPI 16V S12 Petrol 4 149 (75 bhp) 8 Vauxhall Vectra Hatch/Saloon 2.4 Bi-Fuel S12 LPG 4 157 9 Vauxhall Vectra Estate 2.4 Bi-Fuel (CNG) S12 LPG 4 157 10 MG Rover 25 1.6 (105 bhp) S12 LPG 4 160 11 MG Rover 50 1.6 Equippe S12 LPG 4 160 12 MG Rover ZR 1.6 Mirage S12 LPG 4 160 13 MG Rover ZS 1.6i 16v Hatch/Saloon S12 LPG 4 160 14 Vauxhall Vectra Hatch/Saloon 2.4 Bi-Fuel S12 LPG 4 160 15 Vauxhall Vectra Hatch/Saloon 2.4 Bi-Fuel (CNG) S12 LPG 4 160 16 Fiat Stilo Classic 1.6 MPI (102 S12 Petrol 4 155 bhp)

107In the UK 14 of the 20 lowest-carbon cars that also meet the Euro 4 emissions standard are “Smart” brand vehicles (very small 2-seat cars suited only to urban drivingconditions). 108These rankings are based on 2001 data: up-to-date rankings would look diVerent, as they would include new models. 9098191079 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Rank Make Type Engine Segment Fuel Euro CO2 Std g/km 17 Seat New Ibiza Ambiente 1.6 MPI (102 S12 Petrol 4 156 bhp) 18 Toyota Corolla Classic 1.6 MPI (102 S12 Petrol 4 159 bhp) 19 Toyota Corolla Ambiente 1.6 MPI (102 S12 Petrol 4 159 bhp) 20 Vauxhall Astra Hatch/Saloon Classic S12 LPG 4 167 Source: Cleaner Drive database, 2001 data.

Market-Segment Funding Bands Once the market has been sub-divided by category, and a pollution ranking methodology has been adopted (Stage 1), then it is a simple step to calculate which vehicles are eligible for funding. There are a number of options to calculate fundingbands. Options include a “Top 20” ap proach: Fundingbands are simply based on CO2 rankings, an “Average CO2” approach: Fundingbands are based on a percentage improvement over the CO2 emissions average for the class, or over a “baseline” model. There are many other options to be considered.

Environmental Implications of Market Segment Approach: The “SUV Problem” The market segment approach would provide incentives for carmakers to improve environmental performance in each market segment—including high-polluting vehicles such as SUVs. It would also be easy for consumers to understand, as vehicles are usually purchased by category (ega family chooses a “family car”). However, comparisons between vehicle categories could be problematic: ega “clean” SUV could appear less environmentally damaging than a “dirty” family car, despite havinghigheroverall emissions. Could incentivise the purchase of high-polluting vehicles such as SUVs and performance cars over smaller, less-pollutingmodels.

Stage 3: Market Transformation A key goal of this programme is market transformation. The diagram below illustrates how EST views its role in market transformation: the “market transformation curve” indicates where, for each type of cleaner vehicle/technology, grants, and other sources of support, should be applied. This stage would attempt to ensure that market transformation is built into the methodology. A great deal more work is required to develop methodology to develop market transformation criteria for vehicle funding. Market Transformation: Diagram

Grants available to incentivise early adoption R & D Funding Policy Available measures Market is sustainable adopted Number of vehicles (indicative only)

20042005 2006 2007 2008 2009 2010 2011 2012 2013 20142015 9098191079 Page Type [E] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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Stage 4: Determine Grant Amount Once Stages 1-3 have established grant eligibility, the grant amount is set. Previously, the TransportEnergy PowerShift programme used diVerent methodologies to calculate grant levels for eligible vehicles, dependingon the technologyand/or fuel type. 109 Instead, the new low-carbon programme would use emissions as the sole criteria for grant levels. The programme would specifically avoid attempts to calculate the additional technology cost, as given modern Hybrid technologies, lower weight vehicles and advanced injection systems it is no longer possible to accurately obtain this cost information. Further, usingthe emissions criteria will avoid “pickingwinners” and in stead allow the market to determine which technologies and/or fuels produce the lowest emissions, which are then rewarded accordingly. One option is to have fixed grant rates for the diVerent Bands in each vehicle segment that is eligible for funding (this may potentially exclude higher-polluting vehicle classes). The actual grant amounts would, in reality, likely be based on the total budget for the programme—and actual market information, such as forecast sales.

Attachment 3

LETTER TO EDINBURGH COUNCIL ON PROPOSED CONGESTION CHARGE

Submission by the Energy Saving Trust The Energy Saving Trust (EST) was set up by the Government after the 1992 Earth Summit in Rio de Janeiro and is one of the UK’s leading organisations addressing the damaginge Vects of climate change. It aims to cut carbon dioxide emissions by promotingthe sustainable and e Ycient use of energy by households and by the transport sector. EST is a not for profit organisation funded largely by Government. This consultation response should not be taken as representingthe views of ind ividual Trust members. For more information, please contact Alex Veitch, Senior Transport Policy Analyst at alexvwest.co.uk

Summary and Recommendation EST applauds CEC for proposing a Congestion Charge, and supports the measure in principle. However EST is concerned that the scheme as currently structured oVers no exemptions for cleaner, less polluting vehicles such as LPG vehicles in PowerShift Band 4, petrol-electric Hybrids and Electric Vehicles (EVs). Currently, the London Congestion Charge has a discount system for certain alternative fuel, and cleaner vehicles, which has increased the proportion of cleaner vehicles on the road in the London area, helping reduce emissions from road transport and also helpingbuild a market for cl eaner vehicles. Because of these environmental and business benefits, EST proposes that CEC consider applying similar exemptions in their Congestion Charge proposals.

Vehicles Currently Exempted from the London Congestion Charge (a) goods vehicles (over 3,500 kgs revenue weight), listed as an approved vehicle type in band 2, 3 or 4 of the TransportEnergy PowerShift Register, and supplied or converted by an approved supplier (or listed as meetingan equivalent emissions standard in the TransportEn ergy CleanUp Register). (b) Light vehicles (under 3,500 kgs revenue weight) that meet the band 4 criteria on the TransportEnergy PowerShift Register. These standards, as determined by the Energy Saving Trust, could become stricter in the future as the technology for low emission vehicles improves.

How the London Congestion Charge Discount System Works Transport for London currently list 4,900 “Alternatively Fuelled Vehicles” (AFVs) as eligible for a 100% discount.110 EST currently works closely with Capita to administer the system by which certain cleaner vehicles are given a 100% discount from the London Congestion Charge. — For LPG vehicles, EST provides Capita with regularly updated copies of the Register, which is a dynamic database and is regularly updated to include only the best-performingLPG conversion kit suppliers and converters. StaV at the Capita administration centre uses the register as an Access database. When enquiries about the discount are received, the call handler is able to simply look up the cars that are exempt and tell the caller whether they are eligible for the discount.

109For instance, new LPG bi-fuel cars used a combination of additional cost and emissions; Hybrids received a flat £1,000 grant, and Electric Vehicles received a grant based on the cost of the battery. 110Transport for London: “Congestion Charging: Update on scheme impacts and operations”, February 2004. 9098191080 Page Type [O] 11-07-05 23:33:36 Pag Table: COENEW PPSysB Unit: PAG1

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— For Electric Vehicles, Capita takes note of the V5 certificate, which displays that the vehicle is Electric and therefore eligible for zero road tax. Capita then applies the discount for these vehicles. — Hybrids are included in PowerShift Band 4.

Potential Benefits of Cleaner Vehicle Exemption

Environmental Benefits: Reducing Air Pollution from Road TraYc Air pollution from road transport is a major environmental problem. The City of Edinburgh Council (CEC) has listed air pollution concerns as one of the key drivers behind the introduction of congestion charging. According to the CEC, traYc accounts for 88% of oxides of nitrogen (NOx), and the Council is unlikely to meet national air quality targets in 2010 without the direct and indirect benefits of the ITI and congestion charging.111 Increasingthe number of cleaner-fuel vehicles can help significantlyred uce air pollution from road transport: — Heavy Duty Vehicles in Emissions Band 3: HGVs must meet Euro III standards or cleaner for emissions of carbon monoxide, oxides of nitrogen, particulate matter, methane and non-methane hydrocarbons. — Light-duty vehicles in Emission Band 4: Light duty vehicles must have oxides of nitrogen and hydrocarbon emissions at least 40% lower than the Euro IV standard. Vehicles in this band are Hybrids, Electric Vehicles or LPG vehicles.

Business Benefits: Building a Sustainable Market for Fuel Cleaner Vehicles and Technologies The London Congestion Charge has given a significant boost to the vehicles that receive a discount. Vauxhall reported that sales of their Dual Fuel LPG cars and vans “have been boosted by the London congestion charge”,112 while manufacturers of Hybrid and Electric Vehicles regularly use Congestion Charge exemptions in their marketing campaigns. Congestion Charge exemptions are arguably one of the most eVective policy tools available to build markets for cleaner, alternative fuel vehicles and technologies, and oVer a positive incentive on businesses to develop and market these technologies.

111 Proposed Congestion Charging Scheme: Preliminary Statement of Case, Edinburgh City Council http://iti.tiedinburgh.co.uk/ downloads/prelimstatementofcase.pdf 112 Vauxhall statement on website, 16 April 2005.

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