Driving lower greenhouse gas emissions

Before going on its extended summer break, the New Zealand Government declared a climate emergency; another crisis to add to the “to do list” for the year of delivery, when they return for 2021 from their long hiatus.

As the Covid-19 crisis drags on and New Zealand seems to move further down the line for any kind of vaccination action that will put us back into the world, it’s easy for all the focus to be on that and lack of performance in other areas to be hidden.

This Government has talked a big game on the climate change front, but on paper, its “accomplishments”, or lack thereof, put them in danger of being seen internationally as just blowing hot air. An article published this week by Stuff, noted: “New Zealand is one of the few countries in the OECD to have increased gross emissions since 1990, doing so at a rate higher than all nations except Turkey, Iceland, and Australia”.

When it comes to the climate change issue, the road freight transport industry has a lot of fingers pointed at it. But the hands connected to those fingers are ill-informed.

We are open to, and actively following, technology advances that will enable freight to be moved in volume, via the road, using affordable fossil fuel alternatives.

We are not interested in green-washing and run a watching brief on the progress on electricity, green hydrogen and biofuels to power heavy vehicles. To date, there have been issues in regards to electricity and green hydrogen and we want to be sure diesel isn’t being replaced, just for the sake of it, by another energy source that causes harm to planet or people. The issues in the Democratic Republic of the Congo with cobalt mining for lithium ion batteries have been well documented.

With the appointment of a new Transport Minister after the 2020 General Election, we sent his office briefing notes regarding road freight and the environment.

New Zealand does not manufacture heavy trucks and therefore, we are reliant on the global manufacturers to produce trucks that use alternative fuels that are affordable, can run in the New Zealand terrain, and would be supported by a re-fuelling infrastructure here.

This is actually a good thing, because most countries where trucks are manufactured are demanding high environmental standards. The international trucking industry has committed to reducing fuel consumption and thus CO2 emissions through technological innovation and energy-efficient driving.

We believe the Government should give serious consideration in this term to incentivising the purchase of lower emission or alternative energy trucks, as they have done with electric cars. This will assist in signalling to the market that change is expected and supported.

It will also allow for innovation. We won’t know what’s best until we try. There needs to be open minds and avoidance of rigid over-regulation to get change that meets the brief (zero net emissions by 2050). Technology development moves fast and solutions may be just around the corner.

In road freight transport we are sick of the illusional argument that a higher proportion of the freight task should be undertaken by coastal shipping and rail because of lower carbon footprints.

This is tired thinking, lacking in imagination, inspiration, or a fact-base.

Rail and coastal shipping cannot contest the current road freight task, that is, 93 percent of the goods moved around New Zealand. Road is faster, more efficient, more resilient, and door-to-door. There is a place for both, but investment should be in the future which is some form of road, not rail.

If we are to effectively transition to new fuels, significant capital investment will be required. The last thing we can afford to do is reduce productivity and add time and cost to transport via rail and ship, in the belief that will take us there. 

We have shown our commitment to the Government’s approach to reduce greenhouse gas emissions from road freight in New Zealand. We have put some suggestions on the table, and we look forward to the delivery beginning.

– Nick Leggett, CE, Road Transport Forum

Looking to a green freight future

One of the positive outcomes of the Covid-19 lockdown in New Zealand was it initiated a greater understanding by Government of both the necessity and the many inter-connected parts of moving freight.

Road freight transport presents a conundrum for this Government. They don’t like fossil-fuelled trucks on roads, but they need them. We have an economy based on exports and imports and 93% of the total tonnes of freight moved in New Zealand goes by road. This has possibly never been more important to the economy than it is now.

To the uninitiated, trucks don’t fit with the climate change narrative. But the Government can’t tax and regulate trucks off the road until there is some viable alternative to fuelling them and the infrastructure to support that.

The Ministry of Transport (MoT) has put its toe in the water to explore transitioning road freight to alternative green fuels in its recently released 2020 Green Freight Working Paper. The Road Transport Forum engaged with MoT as they gathered information for this project and it was an extremely worthwhile experience. It is always good to plan for the future and we can’t put our head in the sand and pretend we can run on diesel forever.

It’s not just the Government calling for greener solutions across all aspects of our lives. Many road freight transport operators will be finding customers wanting to deep dive into how they are running and measuring sustainable business practices.

We are all aware of the current limitations, but we also need to look at the opportunities. Another thing Covid-19 has taught us is you simply don’t know what’s ahead and global shocks have a way of changing things.

The MoT working paper looks at the three existing options as alternative fuels – electricity, green hydrogen and biofuels – but acknowledges a lot more work needs to be done for any of these to be viable at scale. It also notes that there is no one-size-fits-all solution and other options could emerge.

Alternative green fuels are a growing area of interest and investment globally but the passenger vehicle market has developed more than truck manufacturing. So, choices that can be made in New Zealand will be constrained by what is available. There also has to be the appropriate infrastructure to support any alternative fuel options. Freight companies are unlikely to invest in vehicles that cannot be easily recharged/refuelled throughout the country.

The working paper is a signal, if you like, to Government that there is a lot more work to do before finding viable green freight solutions. It takes a first look at the fuels, vehicles and infrastructure challenges and opportunities. We are pleased to see it notes there are sustainability concerns with batteries for electric vehicles, in particular their production and disposal. We feel in the rush to endorse electric vehicles, this has been somewhat overlooked.

Backing one horse will not be the way to go. Transitioning road freight in New Zealand to alternative green fuels has to happen, but it isn’t going to be overnight. That means there is time to thoroughly analyse the options.

The working paper says: “The Government should consider options that provide the freight industry with flexibility to transition to the alternative green fuels that are best suited to their organisations.”

We think that is sound advice.

If the Government really wants to go big on green freight, the opportunity is there to back ourselves as a smart, clean, green country and come up with the solutions ourselves.

We are known for our problem-solving and innovation, so let’s lead the way here if we can.

I recommend reading the MoT’s 2020 Green Freight Working Paper which you can find here.

– Nick Leggett, CEO, Road Transport Forum

Sustainability makes good business sense

Regardless of your views on climate change, having sustainable practices and goals is pretty much essential to a successful customer-facing business.

Customers are demanding good environmental measures through their supply chains and if you are in the business of trying to attract younger workers, they want to work for companies that take protecting the planet seriously.

Transport is responsible for about 18% of New Zealand’s total greenhouse gas emissions each year, and the race is on to reduce that. While plenty of car brands are developing light vehicles to run on “clean and renewable” alternatives to fossil fuels, there has not been the same progress in truck manufacturing, because the fuel alternatives available present some challenges when upping the size scale.

So, it was exciting to attend the launch of New Zealand’s first long-haul, electric-vehicle road freighter this week. Auckland-based laundry business Alsco put the Hino truck on display at Eden Park, with Energy and Resources Minister Dr Megan Woods and Climate Change Minister James Shaw speaking at the event.

Alsco’s Group General Manager Mark Roberts had a great story to tell about the company’s sustainability journey and he spoke about taking the gamble to pioneer intercity electric vehicle freight movement. He said it wasn’t about waiting for the production to be perfect, but on starting today, to focus on three important business aspects – people, planet and prosperity. He outlined Alsco’s “big, bold, meaningful goals” for 2030, including reducing water use by one-third (remembering they are a laundry business); generating zero waste; reducing CO2, including by eliminating coal as an energy source; and converting one-third of the vehicle fleet to electric energy.

It’s important to take a sustainability view across the business and to get staff buy-in. Those companies running heavy vehicles that haven’t thought about sustainability should start, right now. There is quite a bit that can be done, including adopting the current best technology to manage environmental considerations with fuel efficiency and reduced emissions. This will have an immediate positive impact on the environment.

The Energy Efficiency and Conservation Authority (EECA) runs a low emission vehicles contestable fund. This supports projects that encourage innovation and investment in electric and other low emissions vehicles in New Zealand. It offers up to $7 million a year to co-fund projects with private and public sector partners and Alsco sourced some of this funding to start electrifying its fleet.

Alsco’s EV truck will do the Rotorua/Tauranga and Rotorua/Taupo routes, travelling about 286km/day. Fully laden, it will be up to 22.5 tonnes in weight.

It is estimated to save at least 25,000 litres of diesel and 67,610 kilograms of CO2e per year. Roberts said there was in fact, a compelling argument that supported the higher investment for a heavy EV compared to a diesel equivalent, due to a swift payback on operational expense. He said operational savings would justify the higher capital expense by recouping the additional investment in less and six months, thereafter providing a consistent financial advantage over a similarly tasked diesel truck.

Climate Change Minister James Shaw said in his speech that “innovation is a function of constraints”. There is no doubt that the constraints on fossil fuel vehicles are tightening and for the wider heavy vehicle industry, Alsco’s journey will be one to watch.

You can find out more about Alsco’s EVs and sustainability plans here.

– Nick Leggett, CEO, Road Transport Forum

Water policy will hurt us all

A strong New Zealand economy relies on a healthy primary sector. If the farmers and growers who produce our food and related primary products are doing well, that positively impacts the whole economy. That includes those in the road freight business of moving those goods around New Zealand and to ports and airports for export, as well as all the goods down the track made from all those primary products.

Conversely, if farmers are feeling pain, that ripples far beyond the farm gate and will hurt us all – prices go up and jobs get scarce.

This Government’s ideologically driven environmental policies are costing and hurting farmers and growers who are not solely responsible for all New Zealand’s environmental ills. So last week, the Road Transport Forum joined about 17,500 others and submitted on the Action for healthy waterways – A discussion document on national direction for our essential freshwater.

Unlike the Government, we have been listening to farmers and growers, who are the customers of transport operators. And transport operators are concerned that if business dries up in rural and provincial communities, we are all going to be in trouble. This is why business and farmer confidence is so low – no business owner likes uncertainty and New Zealand’s competitors in export markets are clapping their hands as they watch our businesses get priced off the global market with expensive rules that don’t apply anywhere else.

This is not to say we are against changes to improve our environment. And while we are not experts in water, we very generally support the Government’s intent to improve water quality on the grounds of benefits to all New Zealanders.

However, we have an issue with the process this water reform is taking, the rapid timeframe, and the lack of robust economic analysis that has been applied to a policy direction that will have long-standing and detrimental impacts on our whole economy. It is on that basis we have submitted.

We contend that the Government has not considered how its proposals will affect whole communities and we believe that the trade-offs that will be needed will have to be well understood by all New Zealanders before proposed changes in land use practices are implemented.

We believe the Government has taken a very narrow focus and has not applied its own economic measure of the Treasury’s Living Standards Framework, to fully explore the four capitals – natural, social, human, and financial and physical – collectively to this policy.

There’s a lot of environmental science, and a lot of talk of returning New Zealand waterways to a state that existed when there were hardly any people here, but not a lot of consideration of how the way of life for all New Zealanders will change when our food producers take such a massive hit – to the point they are saying they will no longer be able to produce food and they won’t be able to sell their land, losing all their equity.

In the documentation supporting this policy is it concerning to see this objective in the Draft National Policy Statement for Freshwater Management:

The objective of this National Policy Statement is to ensure that resources are managed in a way that prioritises:

first, the health and wellbeing of waterbodies and freshwater ecosystems; and

second, the essential health needs of people; and

third, the ability of people and communities to provide for their social, economic, and cultural wellbeing, now and in the future.

This can only be interpreted as suggesting that the essential health needs of people are secondary to the health and wellbeing of waterbodies and freshwater ecosystems, and that the wellbeing of communities is a distant third.

If this is the Government’s view, in order of priority, we suggest it is likely that the economic activity that keeps New Zealand operating will be seriously compromised, with untenable flow-on impacts in terms of employment, productivity, and community health and wellbeing across the rural, provincial and urban communities. This is pure “planet over people” ideology.

Regarding the process, we are not confident all 17,500-odd submissions will be read and considered. There is now no opportunity to have any further input. A small group selected by the Government will summarise the submissions and then it is straight to Cabinet for decision making.

We would like to see more breadth in the process that gives consideration to the social, human and financial impacts beyond the farm gate, region-by-region, with an over-arching analysis of economic impact to New Zealand as a whole.

A report released yesterday (Thursday 7 November) further illustrates our concerns about an ideological approach. Environment Commissioner Simon Upton said in his report, ‘huge’ gaps in data and knowledge leave an unclear picture of the state of our environment and whether it’s getting better or worse. He said this could be costing us in the form of poorly designed policies or irreversible damage.

“Further, the costs are not just environmental – they have real consequences for the economy, society and our wellbeing,” Upton says.

“We can’t make economically efficient or socially fair environmental rules if we can’t measure authoritatively what’s happening to the physical resource base on which our wellbeing ultimately depends.”

You can find our submission here.

– Nick Leggett, CEO, Road Transport Forum