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By Sam Woolard, Management Consultant
Ahead of a potentially momentous COP26, the UK’s newly launched net-zero strategy carry’s a thinly veiled warning: the UK, consumers, and businesses alike must do much more to achieve net-zero by 2050.
The strategy sets its sight on turbocharging the adoption of electric vehicles, aiming for all vehicles to be “zero-emissions capable” by 2035. This bold plan comes in response to fears that road transport emissions could return to pre-pandemic levels when they accounted for 27% of the UK’s total greenhouse gas emissions unless significant action is taken.
Amongst huge investment pledges are mandates aimed at replacing Internal Combustion Engine (ICE) vehicles with low or zero-emission equivalents. This part of the strategy carries a much clearer message: the era of petroleum-powered road vehicles is coming to an end, and businesses should prepare for it to end quickly.
Embracing their role to realise more sustainable road travel, therefore, is not only an opportunity for the UK’s transport related businesses to enhance reputational value, but it is also a non-negotiable if revenue and market share are to be protected. This includes those with entrenched market positions, such as the UK’s largest fuel providers, who provide the focal point for this article.
The importance of smarter driving
The strategy to address the current emissions crisis can’t be purely one of replacing ICE vehicles for low emission equivalents. There are over 40 million vehicles in the UK, and it would require a staggering amount of electrical output to power the regular use of each of these vehicles.
Green energy facilities are not green ‘from the get-go’. They are in themselves energy-intensive to develop, so available capacity should be used sparingly. When it comes to the road transport emissions conundrum, the starting point should be to change drivers’ behaviour to drive less or drive ‘smarter.’
Examples of smarter driving could include travelling at less popular times or avoiding typically congested routes. After this, the fallback strategy is to accelerate a replacement of ICE vehicles with plug-in electric vehicles and continue introducing increases in the efficiency of charging facilities and the longevity of electric car batteries. Currently, only 1.3% of the UK’s vehicles are low-emission plug-in hybrid or battery electric vehicles, demonstrating the scale of the challenge to mobilise such a strategy.
Many of the initiatives required to make people drive less and smarter are well known, albeit challenging to implement. It requires enormous investment and is subject to the whims of politics or vested interests of trade bodies.
There is a clear need to extend the reach of the public transport network, connecting rural areas, while replacing existing public transport fleets with low emission units.
Continuing investment in the cycling and walking networks will also be essential. This is in addition to the careful expansion of congestion and low emissions zones in cities to promote the efficiency and appeal of alternative modes of inner-city travel.
The effectiveness of incentivisation schemes aimed at both consumers and manufacturers will also be critical. Subsidising the increased costs of building and purchasing electric vehicles and setting up the UK’s charging network will help establish electric vehicles as viable alternatives for the mass-market consumer.
Having established that success in lowering road travel emissions will require a combination of changing driving behaviours and realising rapid reductions in ICE vehicle usage, let us consider the role of UK fuel providers in more depth.
These powerhouses are already investing millions in electrical charging solutions and modifications to traditional petroleum supply business models as they look to preserve market share while delivering towards their net-zero commitments. Therefore, the remainder of this article is not a call to arms; instead, it highlights recommended focus areas and opportunities to be grasped to deliver success.
the 'need for speed' in persuading those worried by charging times
Many prospective electric car owners are likely to be attracted by the convenience and low-cost nature of home, on-street or workplace charging as a means of powering road use.
UK fuel providers will play a crucial role in persuading the needs of two other types of non-commercial drivers that sit outside the conventional neighbourhood road user.
Firstly the ‘long journey maker’, that is, those looking to ‘refuel (or recharge) midway through a journey, and secondly, the ‘impatient refueller, referring to those looking to ‘refuel’ at a much quicker speed than domestic charging permits.
Shifting these customer groups away from petroleum-powered vehicles will require significant investment in rapid charge capability to match the speed and convenience of ICE refuelling. This could be achieved via hiring and developing top electrical engineering talent or, as Shell did by purchasing on-street charging giant Ubitricity, through acquiring specialist capability.
For fuel providers who form part of large energy groups, replicating some of the structures powering innovation in green energy and biofuels within their operating models should accelerate technological advancements towards ever faster charging. This could include product-aligned innovation squads, rapid prototyping and simulation exercises that model required power outputs.
maintain the efficiency of e-commerce
It is fair to say that the acceleration towards e-commerce and the massive increase in e-tailer capacity brought about by the Covid 19 pandemic is not universally accepted as a positive thing.
However, it has helped reduce one area of emissions: the number of short, inefficient vehicular journeys for the purposes of shopping.
Therefore, a focus for the UK’s fuel suppliers should be on maintaining this trend; by ensuring that the move to electricity does not materially slow down the UK’s distribution network.
Having preferential ultra-fast charging regimes, or dedicated facilities for couriers and hauliers, would be a good starting point alongside the ability to publish real-time data on commercial vehicle charging wait times.
rewarding more sustainable driving behaviours
The ‘no brainer' for rewarding more sustainable driving behaviour is for road fuel providers to incentivise using electric over petroleum power through in-store discounts, partner offerings and more lucrative returns from loyalty schemes.
In developing charging structures and algorithms, companies also have an opportunity to contribute towards reducing high emission-generating congestion by incentivising travel outside of peak times through lower pricing.
In the case of long journeys, road users may be encouraged to travel during the middle of the day or at night if this will significantly lower journey costs. Service stations and roadside food and drink providers could also help in this regard by offering reduced prices.
innovate to deliver efficient charging
The buzzword in the growing and already well-populated electrical charging market, and amongst the more sustainably minded, is set to be “efficiency.”
In an increasingly crowded marketplace, those best demonstrating they are meeting the efficiency agenda will be those that win the battle to lead the way to a more sustainable future and will profit from significant market share as a result.
Delivering and marketing the impacts of sustainability initiatives will therefore be vital in building brand value. The following could be considered:
where the uk goes next
As the UK accelerates efforts towards realising its net-zero commitments, the agenda will be increasingly about reducing journeys, increasing the efficient use of road networks and matching the level of convenience previously offered by ICE vehicles.
Understanding the needs of particular customer groups, innovating, and delivering flexibility and transparency to the increasingly data-hungry and savvy modern consumer will all be key to driving more sustainable travel behaviour.
The UK’s leading fuel suppliers have developed many of the necessary capabilities as part of their green energy initiatives. Still, they should also look at production techniques and analytical tools being used in the retail and manufacturing industry to identify what is needed to change consumer behaviours for the benefit of our planet.
Falling short in their efforts to pivot business models and operations towards the non-negotiables of efficiency and sustainability will see the existing market positions of UK fuel suppliers come under threat.
BJSS is proud to be a certified carbon neutral company with ambitions to be net-zero by 2025. We embed sustainability into the core of what we do, and we can help you do the same.
We are already helping commodities and utilities organisations with strategy consulting, people and change, technology advisory services, along with much more. If you feel we could be of assistance in any way, please don’t hesitate to reach out.
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