Green Fleet Review. The Environment Agency

Transcription

1 Green Fleet Review for The Environment Agency Ref: GFR/0708/091 February 2008 Carried out on behalf of The Energy Saving Trust by Guy Hitchcock Quantock Energy & Environment Crossways, Hilltop Lane Kilve, Somerset, TA5 1SR Tel:

2 Document Control Details Consultant/Company: Guy Hitchcock Quantock Energy & Environment Date of Issue: Job Number: GFR/0708/091 Authorised by EST: (signature, name and position) Consultant/Company Address: EST Address: Quantock Energy & Environment Energy Saving Trust Ltd Crossways, Hilltop Lane 21 Dartmouth Street Kilve, Bridgwater London Somerset SW1H 9BP TA5 1SR Tel: Tel:

3 Environment Agency Green Fleet Review Report CONTENTS PAGE Executive Summary 1 1 Introduction Background Organisation overview Profile of transport activities Vehicle and fuel choice Fuel management Mileage management Opt-out and Grey Fleet Policy documents CO 2 Footprint Conclusions Action plan Annex 1 Top tips for fuel efficient driving Annex 2 EST methodology for calculating CO 2 emissions

4 Executive summary The Environment Agency (EA) is a large public sector organisation with a high environmental profile. It has been developing environmental management of the vehicle fleet and transport activities over a number of years and transport is now a major element of the Agency s Internal Environmental Strategy The Green Fleet Review was requested to review their progress with the fleet, the measures being introduced and identify any possible further improvements. The review was requested by Dale Eynon, Head of Fleet Operations, and Simon Pearce head of Internal Environmental Management. The Agency has a fleet of over 6,500 badged and lease vehicles. In addition, there are private vehicles being driven on business use under mileage allowances and in hire cars. In total, this fleet travels some 54 million miles a year. There is also an increasing element of rail travel and a small amount of air travel. Overall this transport activity emitted 18,479 tonnes of CO 2 on 2006/07. The Agency has a target to reduce these emissions by 30% by Over the last 4-5 years, the Agency has taken major strides to manage the environmental impact of its transport activities more proactively. They are now performing extremely well in measures to monitor and reduce business mileage and reduce the CO 2 intensity of the lease fleet. They are also now trying to work hard on the commercial fleet which is more problematic as it is dominated by 4X4 s and vans. An area where they still need further development is in reducing the amount of grey fleet travel. Our key recommendations on areas for development are: Taking forward the Agency s work on commercial vehicles to develop a commercial fleet policy, complementary to the lease policy, which sets out vehicle standards, technology choices and generic specifications for the main badged vehicles in the fleet. As a high profile transport user in the country, the Agency should continue to work with manufacturers and government to push the boundaries of what low carbon vehicles are available, in particular: o Sub 100g/km CO 2 cars o Lower CO 2 and hybrid vans o Lower CO 2 and hybrid 4x4 vehicles o Increasing the range of vehicles able to operate satisfactorily on E85 (85% bioethanol) and B30 (30% biodiesel) Evaluate implementing fuel cards across the lease fleet to more accurately manage and understand fuel use. Implement a more stringent set of mileage rates and incentives to reduce casual mileage. These actions should help the Agency in meeting its target of a 30% reduction in CO 2 emissions by Page 1

5 1 Introduction The Energy Saving Trust (EST) seeks to increase awareness of environmentally sensitive transport. In particular it aims to reduce the fuel use and carbon emissions from transport activity through supplying hands on assistance to fleet operators in the form of advice and information. The Green Fleet Review (GFR) is one of the services offered by EST and provides up to 5 days of free consultancy support to analyse an organisation s fleet operation and assess its environmental credentials. The aim is to provide non-biased, practical advice on reducing the fleet s environmental impact and in the process reduce the fleet s operational costs. It has to be appreciated that several days is a short period of time in which to audit an entire fleet function, but the GFR allows an external expert to gain an insight into the fleet operations and provide an action plan to assist the organisation to realise its environmental goals. All this obviously has to take into consideration the wider needs of the organisation s core business activities and objectives, and hence has to be context sensitive. The Environment Agency is a major public sector organisation tasked with a range of national environmental management functions including flood defence, water resources and fisheries, waste management and pollution control. As custodians of the Environment, their own environmental performance is extremely important. They have a large vehicle fleet for the operations staff and managing this fleet to best environmental performance is a key objective of their internal environmental strategy. The fleet function at the Agency was largely centralised in 2002 and a major review conducted in Building on this review they have taken large strides to improve the environmental performance of their fleet and transport activities, especially in reducing carbon emissions. The Green Fleet Review was request to review progress and recommend further improvements that they may be able to make. The review was initiated by Dale Eynon, Head of Fleet Operations, and carried out with Dale and Simon Pearce from the Internal Environmental Management Team. 2 Background 2.1 Organisation overview The Agency is a very large organisation based on a regional structure. They have a significant transport need associated with their work and have a major commercial and lease vehicle fleet. There is also other business travel done by private cars on mileage allowances (grey fleet), hire cars, trains and planes. In 2002 the fleet function was largely centralised from the regions in terms of procurement and strategy for vehicles. Currently the organisational structure for managing transport is as follows: National fleet operations service headed by Dale Eynon covering procurement, leasing contracts and fleet strategy; Eight fleet operations teams, part of the national services but based in the regions, managing local operational issues for mainly commercial vehicles; Internal Environmental Management looking at the environmental performance of transport activities; Human Resources responsible lease car policy and mileage rates; Finance procurement and payment of mileage/travel claims; Health and Safety on H&S issues to do with the fleet; Page 2

6 All of these departments are represented on a fleet management board, chaired by Dale Eynon, which determines the overall strategy for transport activities across the Agency. 2.2 Profile of transport activities There are three main elements to the Agency vehicle fleet and transport activities: The commercial or badged fleet comprising a wide range of light and heavy duty vehicles used for site work etc; The lease fleet which are all cars used by Agency officers to carry out inspection, licensing and enforcement work; The grey fleet in this we will cover all travel done for other business purposes in private cars under mileage allowances, hire cars and public transport. Commercial Fleet The commercial fleet comprises 1878 vehicles as of Oct The breakdown of vehicle types in this fleet is shown in Table 1 below, and a breakdown of vehicle makes is shown in Table 2. As can be seen in the table, the largest elements of the commercial fleet are the 4X4 s and vans, with the main manufacturers being Land Rover, Mitsubishi, Ford and Vauxhall. In 2006/07 this commercial vehicle fleet did approximately 23 million miles. All the fuel for this fleet is either from bunkered supplies or by fuel cards. The total amount of fuel consumed for the period 2006/07 was 3.7 million litres, as shown in Table 3, and was mostly diesel. Table 1 Breakdown of the commercial fleet Vehicle Type Number Cars Cars & Estates 89 Vans Car Derived Vans 173 Medium Vans 278 Large Vans 189 Total 640 4X4 Light 4 x Medium 4 x Heavy 4 x Total 1074 HGV HGV 3.51 to 7.5 tonne 20 HGV 7.51 to 18 tonne 12 HGV over 18 tonne 12 HGV awd 3.51 to 7.5 tonne 9 HGV awd 7.51 to 18 tonne 12 HGV awd over 18 tonne 10 Total 75 All 1878 Page 3

7 Table 2 Distribution of vehicle makes in the commercial fleet Make No % Citroen % Daihatsu 1 0.1% Fiat 6 0.3% Ford % Honda 9 0.5% Isuzu 1 0.1% Iveco % Land Rover % LDV % MAN % Mercedes % Mitsubishi % Nissan % Other % Peugeot 1 0.1% Renault 4 0.2% Seat 1 0.1% Seddon/Atkinson 2 0.1% Toyota % Vauxhall % Volkswagen 4 0.2% Volvo % Total % Table 3 Fuel use for the commercial fleet Fuel type Litres fuel Diesel 3,389, Petrol 261, LPG 99, Total 3,750, Lease fleet The lease fleet comprises some 4700 cars from a range of makes as shown in table 4. The main manufactures present in the lease fleet are Ford, Honda, Toyota, Vauxhall and Volkswagen. The average manufacturers CO 2 emissions for the lease fleet is 145g/km, which is substantially lower than the national average for new car sales at 167g/km. The lease list is reviewed annual to select the manufacturers with lowest CO 2 emissions in each lease class. The lease fleet claim fuel cost through a pay and reclaim mileage rate system, which is operated alongside the mileage claim system for casual users in the grey fleet. The combined lease car and grey fleet mileage data is reported together and in 2006/07 these cars, both lease and private, covered 30 million miles. Page 4

8 Table 4 Distribution of makes within the lease fleet Make Number % Alfa Romeo 1 0.0% Audi % BMW % Citroen % Daihatsu 1 0.0% Fiat 8 0.2% Ford % Honda % Hyundai 2 0.0% Isuzu 2 0.0% Jaguar % Land Rover 4 0.1% Mazda % MG 4 0.1% Mini % Mitsubishi 4 0.1% Nissan 3 0.1% Peugeot % Renault % Saab % Seat % Skoda % Toyota % Vauxhall % Volkswagen % Volvo % Total % Grey Fleet There is no specific data on the number of casual users and the mileage data has been combined with the lease mileage data as shown above. There are also hire cars which should be used for casual journeys over 100 miles. In 2006/07 there were 8,212 days of hire rental covering 798,685 miles. There is also rail travel and some air travel. No specific mileage or trip data has been provided for this, but a CO 2 calculation result for this travel have been provided and are shown in section 9 below. This shows rail travel to be a small element of the overall carbon footprint, but it is promoted within the EA s travel hierarchy and its use continues to grow. Total transport activities In total, the Environment agency has a fleet of some 6,600 badged and lease vehicles, which along with private vehicles on mileage allowances and hire cars operate a total of just over 54 million miles in 2006/07. Page 5

9 3 Vehicle and fuel choice Commercial vehicles The commercial vehicle fleet is dominated by 4X4 vehicles and vans. The 4X4 fleet is mainly Land Rover and Mitsubishi, with the van fleet being largely Ford and Vauxhall. With the commercial fleet there is a reasonable degree of regional autonomy on what vehicles are used, but with the general principle of using the smallest appropriate vehicle with the lowest environmental impact. However, there is a move to try and provide a more centralised approach to commercial vehicles with defined vehicles for each job category. Currently there is general guidance to the base 4x4 vehicle to be standardised on the Mitsubishi single cab as it has lower CO 2 emissions than the Land Rover, with the Land Rover only being used where there are specific heavy towing requirements. To help review vehicles in terms of environmental impact the Agency has been using an environmental model accounting for CO 2, NOx, and PM emissions, but this has proved over complicated and they now focus purely on CO 2 emissions. An estimated CO 2 emission factor is allocated to all vehicles in the commercial fleet. The distribution of this CO 2 data is shown in Figure 1 below. Figure 1 CO 2 distribution for the commercial fleet Lease cars The lease car scheme now works on two categories of car user: Category A for employees who need a car for their work every day; Category B to help with recruitment and retention and for those who regularly depend on cars for their job. Page 6

10 Category A users will be given a vehicle currently limited to the Ford Fiesta/Ford Focus at no cost to the user, or they can upgrade to a Ford Focus estate or Ford S- max for a small contribution. Category B users will have to make a contribution and have a choice of vehicles currently set at the models shown in Table 5. There are target CO 2 levels for each vehicle category: Small cars 120g/km Medium cars: 140g/km Large cars: 155gkm 7 Seater: 160g/km These limits and the manufacturers on the lease list are reviewed annually to ensure the vehicles with the lowest CO 2 emissions are offered in each category. In specific situations and with management approval category B users may be allowed to optout of the scheme for a fixed monthly salary enhancement and then no mileage allowance claims can be made. Currently there are only about 15 opt-out users. The lease scheme is currently operated through Hitachi Capital. Table 5 Current Category B choice vehicles Grade Mode; Grade Model Small Car Ford Fiesta Toyota Aygo Toyota Auris Toyota Yaris Honda Jazz Vauxhall Corsa Large Car Medium Car Ford Focus Ford C-Max Honda Civic Vauxhall Astra Vauxhall Meriva Ford Mondeo Honda Accord Vauxhall Vectra Vauxhall Signum Saab seater Ford S max Vauxhall Zafira Hybrid Toyota Prius Honda IMA The impact of the current lease scheme has been to drive the average CO 2 emissions of the fleet down to 145g/km well below the national average for new cars. The current distribution of manufacturers CO 2 data for the lease fleet is shown in Figure 2 below. Figure 2 CO 2 distribution for the lease fleet Page 7

11 Biodiesel trial Alongside their work on the fleet vehicle strategy the Agency is trialling biodiesel for their bunker diesel supply. The trial is for a 22% blend, which is being operated from 3 specific sites and being monitored over a 3 year period. As part of the trial the Agency has done a carbon lifecycle analysis of the biodiesel fuel being used, and is carrying out emissions testing of the vehicles at the beginning and end of the trials at Millbrook proving ground. Recommendations The Agency already has a strong environmental approach to its fleet policy, especially for the lease cars. This has given rise to an fleet average CO 2 emission for the lease fleet of 145g/km which is significantly lower than the national average and approaching the EU target for 2008 new cars of 140g/km. Commercial vehicles With the commercial fleet, over half of which are 4X4 s for operational reasons, it will be harder to drive down CO 2 emissions. The Agency should continue to develop a base commercial vehicle list, like the lease list, for each of the main vehicle types and operational roles in the commercial fleet. Operational teams should then select vehicles from this list, unless a specific specialist vehicle is required. The definition of the base vehicle specifications should account for: Appropriateness of the vehicle for the role, aiming to get the smallest, lightest vehicle appropriate with minimal additional equipment; Health and safety issues relating to operation; Environmental impact; Full life costing accounting for capital/finance and running costs over the defined vehicle life. The main environmental aspects to be considered will be CO 2, NOx and PM emissions. This information is readily available for passenger cars but more difficult for commercial vehicles such as vans and HGV s. Testing all vans below 3.5 tonnes for this information is now mandatory by law from January 1, However, publishing the results is not so some manufacturers like Ford and Vauxhall are reluctant to publish the information. Other van manufacturers do publish this information so the Environment Agency would need to approach Ford and Vauxhall directly to get the figures on the vans they currently run or are considering adding to the fleet. Information from HGV s will need to be gained directly from the manufacturers. The Agency has developed an environmental impact model for use with vehicles, but it is quite complex and will needs keeping up to date. However, its use for defining base vehicle specifications may be useful. In terms of CO 2 emissions upper limits for the main vehicles types that should be achievable are: Small cars <120g/km Estates and car-derived vans <150g/km Medium vans and small 4X4 <185g/km Large vans <200g/km Large 4X4 <250g/km Page 8

12 The biggest savings in CO 2 emissions will always be made by moving down a class of vehicle. The Agency already only specifies 4X4 vehicles where a role involves significant off-road use. Similar don t use a large van when a medium or small van is sufficient for the role. The Agency should continue to be proactive in working with manufacturers and Government research and demonstration programmes to drive forward lower CO 2 versions of their operational vehicles. Examples would be: Stop-start/hybrid technology for vans Mercedes already use the stop-start technology which they call ECO-START in some Vito and Sprinter options and Ford have worked on a hybrid Transit van. The Department for Transport are currently developing a low carbon van procurement programme that will explore these options with manufacturers and aim to bring them to market through public sector fleets; Hybrid technology for 4X4 vehicles there is already a hybrid 4X4 from Lexus, but designed for the luxury market. The development of a diesel hybrid suitable for larger 4X4 s such as the Land Rovers could be a major benefit to the Agency. Lease cars The Government has provided a range of incentives to reduce the CO 2 emissions from company cars, as these drive the main car market. The incentives have strengthened over time and include: Company car tax, or benefit in kind (BIK) o BIK is currently based on car CO 2 emissions o From April 2008 VED band A/B cars will have BIK reduced to 10-13% of P11D value, down from 15-18% now o Reductions in BIK effect both employee with their own personal tax and the employer in NIC contributions payable on this Enhanced capital allowances o o Cars 120g/km or less are permitted a 1 year write down allowance; It is also proposed to remove the 12k limit for depreciation and move to a CO 2 based depreciation as follows: g/km at 20% p.a. 166g/km + at 10% p.a. Rental disallowance it is proposed to move to the following system: o < 165g/km no disallowance o >165g/km fixed disallowance The current Agency lease scheme takes advantage of all these incentives with the base category A vehicle a sub 120g/km CO 2 Ford Fiesta or Focus and the largest choice vehicle available under category B falling under the 165g/km CO 2 level. However, it is important that staff are clear of all the financial incentives that apply to the different vehicle choices to ensure that they make a fully informed decision and to maximise the impact of these incentives. To take this already good lease scheme forward we would suggest the following possible developments that may help get further uptake of the lower CO 2 vehicles: Category A vehicles - work with manufactures to try and get a sub 100g/km CO 2 vehicle for this category; Category B vehicles potentially have the following 3 choice groups: o Group 1 environmental vehicles below 120g/km CO 2 (tax bands A/B) with slightly lower employees contribution Page 9

13 o o Vehicle fuels Group 2 standard vehicles with CO 2 emissions below 150g/km (tax band C) with current contribution level; Group 3 premium vehicles, such as 7-seaters or larger estates, with CO 2 emissions above 150g/km (tax band D or more) with increased staff contribution Have a single mileage rate for Category A cars set for a 120g/km vehicle, and a single mileage rate for Category B vehicles set for a 150g/km vehicle. This puts the increased fuel costs for choosing larger vehicles with the user not the Agency. Ensure that all diesel vehicles on the lease list have the diesel particulate filter (DPF) if this is available or a Euro5 emissions standard model when these become available. About 90% of the vehicle fuel used by the Agency is diesel. To help reduce the carbon emissions from this fuel they have started a trial of biodiesel in several of their bunkered sites. We support the biodiesel trial that is taking place and suggest that a blend of 20-30% for bunker fuel could give significant carbon benefits. However, consideration needs to be taken of the wider environmental aspects of the fuel and this can be explored through the sustainability reporting information being established under the Renewable Transport Fuel Obligation (RTFO) becoming a legal requirement from April this year. The Agency has also tried a single bioethanol vehicle. We would recommend that the Agency continues to explore this route, especially since Ford, one of the Agency s main vehicle suppliers, is a major player in this area. Ford currently has the Flexi-Fuel Focus, which can use up to a blend of 85% bioethanol (E85). They may also introduce a flexi-fuel version of the Transit Connect. Morrison s supermarkets currently have some outlets which sell E85, one of which is in Bridgwater near an Agency regional office. It may be worth trialling a number of bioethanol pool cars in areas where Morrison s does or can be persuaded to supply E85 fuel. 4 Fuel management The Agency operates three systems for fuel payment and management: Bunkered fuel for some commercial vehicles; Fuel cards for commercial vehicles; Pay and reclaim system for the lease and casual users. The amount of bunkered fuel used across the agency is reducing, with the larger proportion of commercial vehicles operating through fuel cards. The bunkered sites are operated by the regions, and tend to be linked to the more specialist vehicles. Also, they do not always have per vehicle fuel monitoring and integration with the fuel card data. The biodiesel trial sites do have full monitoring to ensure that a full picture of vehicle fuel performance is obtained. A majority of the commercial fleet are on centralised fuel cards and this provides robust fuel, mileage and MPG data. The total bunkered and fuel card data is reported monthly. Page 10

14 All the lease cars are on a pay and reclaim system, with mileage rates dependent on fuel and engine size. The lease car mileage data is reported with the casual mileage data, again on a monthly basis. Recommendations Essentially the Agency already has a good level of fuel management for the commercial vehicles with monthly fuel reporting. The only adjustments we d suggest would be: Ensure that where bunkered sites are being kept that the data is fully integrated with fuel card data to ensure full per vehicle fuel use is available. Fuel use targets are set alongside the mileage targets that have been set (see section 5 below), and consider both total fuel use targets and bench mark MPG s be vehicle class. With the lease cars we would suggest exploring moving over to the use of fuel cards, rather than a pay and reclaim system. The benefit of putting all drivers through a fuel card system is that actual fuel use data is captured for use in monitoring the fleet. This gives a more thorough understanding of the fuel use of the lease fleet. Also if the company is to invest in fuel reduction measures it will get the benefits directly in terms of reduced fuel bills. Where fuel cards are used with company cars the claim system is reversed. The same mileage recording system is used, but instead of the user being paid for business miles, they are charged pro-rata for private miles. This also encourages business mileage claim returns, as if no business miles are claimed they are charged for all the fuel used! This system is commonly used in the private sector and helps reduce company fuel costs, and more accurately reflects what fuel is being used. If the fuel card system does not seem appropriate for implementation across the Agency lease fleet, then we would recommend changing the current mileage rates relating to fuel and engine size. As suggested in section 3 above we would recommend a single mileage rate for Category A cars set for a 120g/km vehicle, and a single mileage rate for Category B vehicles set at the 150g/km vehicle. This puts the increased fuel costs for choosing larger vehicles with the user not the Agency In terms of vehicle performance the single biggest factor affecting the fuel consumption will be driver behaviour. There can be some 20-30% difference in the fuel consumption for a given vehicle driven by different people, and most people can reduce their fuel use by some 8-10% given driver training. Improved driving skills are also important in reducing accident rates as part of the company s health and safety policies. The key actions we would recommend regarding this are: Provide basic information to all drivers on efficient driving behaviour, see for example our top ten tips in annex 1. These should be included in: o the company s document Driving on EA Business, o the section of the intranet site dealing with company vehicles; o as part of the staff induction dealing with fleet vehicles; o and as occasional awareness raising through the staff newsletter or team briefings. Take forward a programme of driver risk assessments, building on the Agency s investigations of available assessment programmes such as those from ROPSA; Provide driver training for the worst performing drivers based on results of risk assessment, accident rates and fuel consumption performance; Page 11

15 Specifically look to roll out the Government sponsored Safe and Fuel Efficient Driving (SAFED) programme for van drivers building, on the results of the trail in the Anglian region; Consider driver incentives for better performance, such as driver of the month or year based on fuel efficiency and accident rates, or a monthly bonus scheme based on MPG performance and accident rates. The next biggest factor in vehicle fuel use after the driver is the level of maintenance care of the vehicle. It is also extremely important from a vehicle safety point of view. It is often assumed that for lease vehicles this is all dealt with through the lease contract, however, the driver still has responsibility for ensuring servicing is done and maintenance problems dealt with. In this regard we would recommend a system of weekly checks for the vans, potentially alongside tool and equipment checks, and monthly checks for the other company vehicles potentially as part of the monthly mileage sheet. Good maintenance practice like this can help reduce fleet fuel use by 6-7% per year. Other measures that should be investigated are: The use of a tracker system on car and vans to provide speed alerts for vehicles doing over 70mph, and penalties for drivers consistently speeding. A vehicle doing 85mph rather than 70mph will use some 25% more fuel. Fitting speed limiters to vehicles, especially vans, who are doing a lot of motorway driving. Continue to review other fuel reduction technologies on the market such as rev limiters, which the EA is currently reviewing, and low energy tyres that are currently specified for all lease vehicles. Use the fuel monitoring system to assess their benefits. 5 Mileage management In 2006/07 the Agency did a total of 53 million miles in its commercial, lease and grey fleet, a 5% reduction on the previous year. This is a major cost and environmental impact for the Agency and as part of the internal environmental strategy they have set a target to reduce the mileage between 2007 and 2012 by 30%. Mileage data is collected rigorously for commercial vehicles through the fuel cards and for lease and grey fleet through mileage returns. This data is reported to regional management on a monthly basis, with the top 100 mileage drivers being identified and examined. The overall mileage target has been disaggregated down to a regional target, based on staff numbers. The regions are monitored against the target using a traffic light system green is on or below target, amber is up to 10% above target, and red is more than 10% over target. These mileage targets now form part of the regional director s performance related pay system. To help reduce mileage the Agency has a travel awareness campaign Minimising our footprint in Transport. This comprises: A travel hierarchy, trip substitution, public transport, car share (pool, lease, hire), casual car; A travel information page on the intranet site; BT teleconferencing systems; E-learning initiatives for training; And the monitoring and targeting described above. Page 12

16 Recommendations The Agency is clearly very pro-active at managing its vehicle mileage and has a strong set of management activities. Basically there is little we could suggest to improve what the Agency is already doing. One minor observation might be ensuring that travel information and the targets that the Agency is signed up to are presented to all new staff through induction training. One area that the Agency may explore further if they are not already doing so, is the area of routeing, scheduling and trip planning. Specifically they could explore: Ensuring that the intranet travel site has links to trip planning information services such as that available through the government site or the AA website at The use of satellite navigation to help staff take the most efficient routes to sites. This was adopted by Corgi service engineers and they estimated that they saved 8-10 minutes travel time per day, plus time spent planning trips by maps. 6 Opt-out and Grey Fleet Currently there is very little opt-out of the lease car scheme, but there are a significant number of casual users not eligible for the lease scheme and doing significant mileage. The grey fleet is the most uncontrolled part of the Agency fleet and also where they have least information. The current grey fleet management practice is as follows: All drivers need a permit to drive to allow them to claim mileage. This permit confirms the driver has a valid licence and insurance; The mileage claim rates are the standard Inland Revenue rates (40p/mile or 25p/mile above 10,000 annual miles); Private cars are only to be used for trips up to 100 miles, above this a hire car should be used; Casual drivers are not expected to be driving more than 4,000 miles per year on business. Recommendations The grey fleet is an area where the Agency would like to take further action to reduce the number of casual drivers and especially those doing high mileage there have been cases of drivers doing over 16,000 per year on causal rates. Our first recommendation would be to improve the amount of information collected on casual drivers both from an environmental point of view and duty of care. The permit to drive should be renewed annually and should include in addition to drivers licence and insurance: Vehicle registration document (V5) giving engine size, fuel type and CO 2 emissions; Valid MOT certificate. Our second recommendation would be to strengthen the incentives NOT to do casual mileage. Some possible ideas in this area would be: Reduce the casual mileage trip limit, above which hire cars should be used, to 80 miles round trip Page 13

17 For trips over 80 miles just pay basic hire rate (say 25/day) plus fuel rate. When a casual user hits 4,000 annual business miles, their claim rate is reduced to just the fuel rate Have a lower mileage rate for fuel inefficient vehicles say for Band E and above vehicles (CO 2 greater than 166g/km) a mileage rate of only 20p/mile. Lastly a review should be carried out of casual users and if there are those users who are legitimately doing high mileage consideration should be given to moving them over to a Category A lease car. 7 Policy documents The Agency has a range of policies and procedures that apply to transport activities. From an environmental point of view the top level strategy document is the Internal Environmental Strategy that sets the mileage and carbon reduction targets for transport activities. Directly related to the lease fleet and driving on Agency business are: The lease car policy as described in section 3 above; Guidance notes on driving on Agency business covering basic health and safety and operational issues; Hitachi lease car handbook covering operational issues regarding use and management of the lease cars; Travel hierarchy for mileage reduction purposes. In addition there are specific health and safety documents on towing, transport of dangerous goods (chemicals and samples) and use of mobile phones. Recommendations Overall the Agency has a good set of guiding policies and procedures, as would be expected of an organisation of this nature. A few areas that are not necessarily clear or may need improving are: A commercial vehicle policy setting out vehicle choice approach and generic vehicle specifications, which would complement the lease car policy, as discussed in section 3; Information on fuel efficient driving in the material for lease and casual drivers, as discussed in section 4; Procedures for driver risk assessment on a regular basis with potential for driver training as discussed in section 4. 8 CO 2 Footprint An important metric for understanding a fleet s environmental performance is its carbon footprint. This is also a measure frequently used in environmental management systems and CR reporting. Basically the CO 2 footprint for the transport activities of a vehicle fleet can be calculated from its total fuel use, or from mileage data and an estimate of the CO 2 emissions per km for each of the vehicles. The basic methods that can be used are set out in Annex 2. Page 14

18 The Agency has already carried out this exercise for themselves and the CO 2 data reported here is that provided by the Agency and consistent with their wider CO 2 reporting mechanisms. Our understanding is that the CO 2 has been calculated using the following basic principles: Commercial vehicles based on fuel data, equivalent to our method 1; Lease vehicles based on vehicle CO 2 factor and mileage, equivalent to our method 2. However, note that we use a 15% uplift of the manufacturers provided factors to allow for real world driving; Grey fleet based on mileage and generic CO 2 factors; Hire cars based on hire car CO 2 data provided by the supplier; Train and air travel based on data provided by the travel supplier. The total emissions for the Agency for 2006/07 are shown in pie chart below. Figure 3 CO 2 emissions in tonnes from total transport activity 2006/07 9 Conclusions The Environment Agency is a large organisation that requires a lot of transport activity to carry out is functions. The total carbon footprint of this activity is 18,479 tonnes per year. The Agency are committed to reducing their carbon emissions with a target of a 30% reduction between 2007 and Over the last 4-5 years the agency has taken major strides to manage the environmental impact of its transport activity more proactively. They are now performing extremely well in measures to monitor and reduce business mileage and reduce the CO 2 intensity of the lease fleet. They are also now trying to work hard on the commercial fleet which is problematic as it is dominated by 4X4 s. An area where they still need further work is in reducing the amount of grey fleet travel. Our key recommendations on areas for development are: Taking forward the Agency s work on commercial vehicles to develop a commercial fleet policy, complementary to the lease car policy, which sets out Page 15

19 vehicle standards, technology choices and generic specifications for the main badged vehicles in the fleet; As a high profile transport user in the country the Agency should work with manufacturers and Government to push the boundaries of what low carbon vehicles are available, in particular: o Sub 100g/km CO 2 cars; o Lower CO 2 and hybrid vans; o Lower CO 2 and hybrid 4X4 vehicles; o Increase the range of vehicles able to operate satisfactorily on E85 and B30 (30% biodiesel); Consider implementing fuel cards across the lease fleet to more accurately manage and understand fuel use; Implement a more stringent set of mileage rates and incentives to reduce casual mileage. A more detailed set of proposed actions, pulling together the recommendations in sections 3 8 are set out below. These actions should help the Agency in meeting its target of a 30% reduction in CO 2 emissions by Action plan Action Time scale Priority Vehicle and fuel choice 1 Develop a full commercial vehicle strategy with whole-life 6-12 months High costing, environmental criteria and generic specifications for base vehicles. 2 Work with manufacturers to implement leading edge 12 months Medium vehicle technologies appropriate to role: Sub 100g/km cars; Lower CO 2 and hybrid vans and 4X4 s. 3 Refine Category B vehicle groups to incentivise the low 12 months High CO 2 vehicles (under 120g/km) and discourage the higher CO 2 vehicles (over 150g/km). 4 Set a single mileage rate for lease cars one based on a 6-12 months High 120g/km car for Category A vehicles and one based on a 150g/km for category B cars. 5 Ensure diesel options with Euro V emissions or a DPF are 6-12 months Medium selected where available. 6 Continue biodiesel trial and roll out to all bunkered fuel if 12 month Medium successful. Consider similar trial with bioethanol. plus Fuel management 7 Ensure all remaining bunkered fuel sites are integrated into the fleet management system with the fuel card data to give per vehicle fuel data. 12 months High 8 Set fuel targets alongside mileage targets for both total fuel use and benchmark MPG indicators months High 9 Explore moving the lease fleet over to fuel cards to 12 months High provide a more accurate understanding of fuel use. 10 Include information on fuel efficient driving techniques in 6-12 months High policy and guidance documents to all drivers. 11 Establish system of driver risk assessments and SAFED 12 months High based training where appropriate. 12 Establish a more proactive approach to monitoring of 6 12 months Medium Page 16

20 vehicle maintenance with weekly checks for vans and monthly checks for company cars. 13 Assess other fuel reduction measures such as speed limiters, tracker devices and low energy tyres Mileage reduction 14 Ensure business travel page has links to trip and journey planner sites. 15 Explore the benefits of issuing satellite navigation to offices to reduce mileage and travel time. Grey fleet 16 Collect vehicle V5, CO 2 and MOT certificate as part of permit to drive. 17 Reduce casual mileage trip limit to 80 miles, and only pay hire car rates for trips over this mileage. 18 Set a limit on casual mileage for 4,000 miles above which only a fuel rate will be paid. 19 Pay a lower mileage rate for the high CO 2 emitting vehicles, possibly band E and above. 12 months plus Medium 6 12 months High 12 months Medium 12 months High 6-12 months High plus 12 months Medium 12 month Medium Page 17

21 Annex 1 Top Tips for fuel-efficient driving Page 18

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23 Annex 2 EST Methodology for Calculating Fleet CO 2 Emissions Summary The aim is to establish a common approach that EST s fleet consultants will use to estimate fleets CO 2 emissions. This will allow for comparisons of fleets emissions over time and for comparisons between fleets. The appropriate methodology to use for a specific fleet will of course depend on what data is available, so 5 different options are described below. These are presented in order of accuracy and the presumption should be to use the most accurate methodology possible i.e. use methodology 1 whenever fuel purchase/consumption data is available, methodology 2 as second choice etc. In many cases it will be appropriate to use a combination of methodologies. For example if fuel usage data is available for vans but not for cars then methodology 1 (based on fuel consumed) should be used for the former and a mileage based methodology for the latter. 1. Fuel Purchase Data If comprehensive fuel use data is available either through fuel cards &/or consumption of bunkered fuel - then CO 2 should be calculated by applying the following factors to the quantity of fuel consumed. Diesel 1 : 2.63 kg CO 2 / litre Petrol: 2.30 kg CO 2 / litre LPG: 1.49 kg CO 2 / litre Natural gas: 2.65 kg CO 2 / kg 100% biodiesel (B100) 2 : 1.07 kg CO 2 / litre NB: Values for all other blends of biodiesel can be calculated by a pro-rata calculation based on the values for Diesel and Biodiesel (100%). E.g. CO 2 emissions from 5% biodiesel = (0.05 x 1.07) + (0.95 x 2.63) = 2.55 kg CO 2 / litre 2. Mileage Data plus Car Make & Model If data is available for each individual vehicle s mileage as well as its make, model and variant and for company cars organisations are obliged to hold this vehicle type information for P11D reporting - then car CO 2 emissions can be calculated from cars official CO 2 emissions. For current models, this data is available from the VCA website and for older models it is available from the SMMT website: When employees use their own cars for company business (grey fleet vehicles) it might be that some but not all vehicle type information is available. For example Ford Focus might be recorded without information about the specific variant and perhaps without even engine size data. In such cases the consultant should use the above sources of CO 2 data and his own judgement to decide upon the appropriate g/km figures to use perhaps an average of several variants or perhaps one variant that he believes to be representative. 1 DEFRA Guidelines for Company Reporting of Greenhouse Gas Annexes, updated July 05 for mineral diesel, petrol, LPG & natural gas CO 2 emissions. 2 DEFRA (written response to PQ to Elliot Morley, Jan06) for overall biodiesel CO 2 saving; for relative energy densities of diesel & biodiesel Page 20

24 In-use fuel consumption and CO 2 emissions are almost always higher than the official data for various reasons: the New European Drive Cycle is less demanding than most real-life driving conditions; the vehicles performing the tests are presented in perfect condition; and drivers carrying out the tests are selected for their ecodriving expertise. To account for this an additional 15.0% 3 should be added to CO 2 emissions calculated by this second methodology. However, if a consultant considers this 15.0% adjustment to be inappropriate for a specific fleet, then the case could be made for using a different figure. For example, if a fleet of cars operates solely within the M25 during office hours then the consultant may consider that the fleet s fuel consumption would be unusually high and that the adjustment factor needs to be higher. If a figure other than 15.0% is to be used for a specific fleet, please agree this with the client and indicate the rationale in the report. 3. Mileage Data plus Car Engine Size & Fuel Type For grey fleet cars, employers will sometimes know mileage data and engine sizes and fuel types (information that may be captured as the basis for paying differential mileage rates) but not make and model. In such cases the following table should be used to estimate per km CO 2. Petrol Cars 4 Medium Engine ( litres) Small engine (<1.4 litres) Large Engine (>2.0 litres) Diesel Cars Medium Engine ( litres) Small engine (<1.7 litres) Large Engine (>2.0 litres) LPG Cars 5 Medium Engine ( litres) Small engine (<1.4 litres) Large Engine (>2.0 litres) Petrol Hybrid Cars Medium Large These data already include a 15% uplift to translate from test-cycle to real-life. 3 ARVAL, pers comm with EST, June 06 4 New figures from DEFRA (supplied directly to EST in March 07, yet to be published) 5 LPG data assumes 10% tailpipe CO 2 saving compared to petrol Page 21

25 4. Mileage Data plus Fuel Type 6 If fuel type alone (but not engine size) is known, then the following figures should be used for cars to estimate per km CO 2. Petrol Car Diesel Car LPG Car Petrol Hybrid (Average) (Average) (Average) (Average) These data already include a 15% uplift to translate from test-cycle to real-life. 5. Global Averages - Cars & Vans Cars 7 Where only mileage data are available, with no engine size or fuel type information, then the following global average figure should be used to estimate per km CO 2. Average Car These data already include a 15% uplift to translate from test-cycle to real-life. Vans For vans it will normally be possible to use methodology 1 since vans are usually refuelled from bunkered fuel or from fuel purchased by fuel cards. However, if this is not possible then the following average figures should be used to estimate per km CO 2. Car-derived van e.g. VW Caddy or Vauxhall Combo Medium van e.g. Ford Transit Connect or Peugeot Partner: Large van e.g. Ford Transit or Mercedes Sprinter: These data already include a 15% uplift to translate from test-cycle to real-life. Some models of van will not fit clearly onto one of these three categories. In these instances the consultant should use his judgment to decide which represents the best fit. Other Information 1. For most fully expensed drivers (those that receive from their company free fuel for private use) it will be impossible to distinguish between company and private mileage. In such cases the entire mileage and CO 2 emissions should be counted towards the fleet total. 66 New figures from DEFRA (supplied directly to EST in March 07, yet to be published) 7 7 New figures from DEFRA (supplied directly to EST in March 07, yet to be published) Page 22