SMEs in Scotland

Following the sustainable travel hierarchy encourages staff to choose the most sustainable travel option for every journey.

The first mode to consider is often forgotten – do you need to travel at all, or can you use facilities such as video conferencing? If you do decide that travelling is necessary, shorter journeys should be travelled actively where possible  – this includes walking, cycling and wheeling, along with electric bikes (ebikes) and electric cargo (ecargo) bikes.

Active travel provides a range of benefits to your organisation:

• significantly reduced travel costs
• healthier and more productive staff
• reduced need for office parking spaces
• reduced congestion
• improved air quality
• time saving, especially when travelling in congested cities
• can be combined with public transport

Walking and cycling should be promoted for shorter journeys, and ebikes provide extra assistance to make even more journeys achievable by bike.

To encourage staff to walk, cycle and wheel, we recommend you consider installing showers, lockers and cycle storage.

Way to Work is a new website designed to help businesses in Scotland promote active and sustainable travel. It includes information on funding, training, and advice.

Ebikes

An ebike is an electrically assisted pedal cycle. In other words, a regular bike with an electric motor and battery. The motor provides power assistance when pedalling and the battery can be charged up in your home or place of work using a normal plug socket. Most ebikes offer 40-100 miles of pedalling assistance on a single charge, and a 100 mile journey on an ebike costs around 10p in electricity. Ebikes offer similar health benefits to regular cycling or walking, but can enable riders to travel further and help to make cycling more accessible for all.

Ecargo bikes

Ecargo bikes are ebikes that are specially designed to carry a load. They come in many shapes and sizes and are ideal for first / final mile deliveries, or other short distance journeys in and around towns and cities.

Support available

Cycling Scotland offers funding to help businesses adopt pool bikes and assist with the cost of installing workplace cycling infrastructure. A suite of training programmes is also available to help build cycling confidence and improve safety for staff.

Poor air quality is estimated to contribute to 2,500 premature deaths in Scotland every year (Royal College of Physicians, 2016). To combat this, across the country local authorities are implementing low emission zones (LEZ) or clean air zones (CAZ). In Scotland, Glasgow was the first city to outline the minimum emission standards required to enter the LEZ:

• Euro 4 (Euro IV HCVs) petrol engine
• Euro 6 (Euro VI HCVs) diesel engine
• zero emission vehicle

The Aberdeen, Edinburgh and Dundee LEZs are currently in consultation but are expected to follow the same standards. More information on LEZs can be found on the Low Emission Zones Scotland website. If you travel within these regions, it is crucial you consider whether your vehicles will fit the requirements.

Euro emission standards

A vehicle’s Euro standard reflects the exhaust emissions that it produces. The two key vehicle pollutants affecting human health are nitrogen oxides (NOx) and particulate matter (PM). NOx is produced by both petrol and diesel engines, but levels from diesel engines are generally higher. Vehicles also produce particulates from exhausts, brakes, tyres and road surface abrasion.

Support for vehicles

In Scotland, the Low Emission Zone Support Fund and Low Emission Zone Retrofit Fund are available to help vehicles to become compliant with the new zones.

EV adoption

Electric vehicles (EVs) that are eligible for the Office for Zero Emission Vehicles (OZEV) Plug-in Car Grant should be the first choice when replacing internal combustion engine (ICE) vehicles in your fleet. There is now a wide (and growing) choice of these vehicles on the market, especially in the car and small / medium van segments. There are also many large electric vans due on the market in late 2020. This means that in most cases it should be possible to find a vehicle that fits your individual business needs.

The key considerations when adopting EVs are:

• maximum daily mileage you need the vehicle to cover
• how long you have available for the vehicle to charge
• whole life cost (WLC)
• the energy efficiency of the vehicle (Wh/km or kWh/100km).

Battery electric vehicles (BEVs) are powered solely by an onboard battery that is charged using an external power source, and offer the following benefits over ICE vehicles:

• the average electric car will cost around 3-5p/mile in electricity to run, compared to 16-18p/mile in fuel for the average ICE car. Vans will be slightly more in both circumstances
• an average reduction in CO2e emissions of 69 per cent, which compares the emissions from the average ICE car on the road and an average electric car
• reduced maintenance costs of up to 40 per cent
• zero vehicle excise duty (VED)
• a benefit in kind (BIK) rate of 0 per cent as of April 2020

Our Low Carbon Transport Business Loan, funded by Transport Scotland, is available to all Scottish businesses, and helps to cover the upfront cost of electric vehicles. Up to £120,000 is available for businesses wishing to purchase EVs, with a repayment term of six years.

Transport Scotland also offers the Used Electric Vehicle Loan for Business, which could help your business purchase a second hand low emission vehicle.

Use a whole life cost procurement method

EVs currently have higher capital costs than ICE vehicles, but they do have significantly lower running costs. Therefore, it is important to consider all aspects of vehicle ownership when procuring fleet vehicles. This is described as taking a whole life cost (WLC) approach to procurement. The key factors to include in a WLC procurement comparison are:

• depreciation (if purchased) or lease costs (if leased)
• service, maintenance and repair (SMR)
• value added tax (VAT)
• vehicle excise duty (VED)
• fuel and electricity costs
• class 1a national insurance contributions (NIC) (if applicable)
• vehicle insurance
• grants available for specific vehicles

Using a WLC procurement method often satisfies both financial and environmental objectives, as vehicles with lower WLC tend to use less fuel and emit fewer pollutants. Maximising annual mileage per vehicle is key to strengthening the financial case for EVs.

Install telematics in all fleet vehicles

Collecting accurate data including each vehicle’s daily mileage and the location and duration of stops during the day (ie recharging opportunities) is useful to have when identifying which of your existing vehicles can be replaced easily with an electric vehicle. Installing a telematics system provides you with this vital data. Telematics data also helps you to determine the best locations to install charge points, and calculate the energy needed to support those charge points.

Telematics can also be used to identify under-utilised vehicles and to help you shift up the sustainable transport hierarchy by identifying regular journeys that could be completed using active travel or public transport. Vehicles that are not used often might not need to be replaced at all, and you can reduce your overall fleet size.

Implement fuel-efficient driver training

Fuel efficient driver training can be an effective and immediate way to save money and carbon dioxide emissions by reducing fuel consumption. It can also reduce service, maintenance and repair costs and bring significant safety benefits.

Driver training should be implemented alongside robust fuel management systems to give drivers regular feedback on their performance and encourage them to continue to use their training. One idea is to make a competition between drivers by setting up a league table. Fuel-efficiency then becomes a target for both individual drivers and teams, reducing fuel spend, carbon emissions and driving fines.

On the day of training, drivers generally achieve a fuel saving of around 14%. Studies suggest that after 12 months, sustained fuel savings of between 3.7% and 6.2% can be achieved.

People are safer drivers after receiving fuel efficient driver training. Studies in Germany found that vehicle insurance claims fell by 22% after drivers had received training (ecoDrive, 2008). Vehicles that are driven using these techniques also have significantly lower maintenance costs. This was borne out by a two-year study of 2,000 AA vans in the UK (DriveTech, 2018).

Downsizing light commercial vehicles (LCVs)

Even if you can’t make the switch to electric just yet, there are other steps you can take. Downsizing your van fleet (ie replacing large vans with smaller models) provides significant cost and carbon dioxide savings. Carbon dioxide emissions and fuel use increase as van size increases. Fuel costs increase by 15-25% with each step up in van size, however fully loading a van only increases fuel use by 9-10 per cent (AEA Technology, 2010). It is therefore much more efficient to have a full small van than a half empty large one.

While the largest savings are possible within your van fleet, you should also consider downsizing all fleet vehicles, including cars. Downsizing from an SUV to a small family car (eg replacing a Nissan Qashqai (41.4MPG) with a Nissan Micra (50.4MPG)) will provide a 22% fuel saving.

Install speed limiters

Speed limiters can be implemented at a low cost, as modern engine management systems can be easily programmed. All vans should have a maximum speed limit set.

Fuel consumption and carbon dioxide emissions are significantly increased by speed. Speed limiter suppliers estimate fuel savings of up to 25% are possible, meaning installation costs could be recouped in around four months. (Everglade Services Ltd, 2020) (Safe and Sound Vehicle Systems Ltd, 2020).

Introduce a business mileage claims system

Your ‘grey fleet’ or ‘grey fleet mileage’ are business journeys that are made by an individual using their own personal vehicle. The individual then claims back a mileage rate from your organisation.

Traditionally, organisations rely on individuals to confirm mileage, however distances are often rounded up which, across a large workforce, can have a large impact on mileage claims. Energy Saving Trust recommends that organisations implement a mileage claim system that records start and end postcodes for journeys, along with key information such as vehicle registration, proof of business insurance and renewal date, and proof of MOT and renewal date. If you are not currently collecting this data, you may not be fulfilling your duty of care responsibilities to ensure that your vehicles are fit for purpose, adequately maintained, insured and roadworthy.

There are also apps available that can detect car journeys and allow drivers to categorise them as either business or private.

Organisations that introduce a mileage claims system usually see a 10–20% drop in mileage claims.

Adopt pool cars, hire cars and car clubs

Using pool, hire and car club cars provides the following benefits:

• lower administration costs due to reduced expense claims
• increased levels of active travel used for work commutes, as employees no longer need to have their vehicle onsite for work trips
• reduced carbon footprint and improved air quality
• lower risk of unroadworthy and uninsured cars being used for work and the associated liability

Substantial savings can be achieved by replacing grey fleet with pool cars.

EV pool cars

The modern pool fleet, if well managed, can be a simple, cost-effective, zero emission and safe method of meeting the transport needs of staff.

It is important that the vehicles are:

• affordable – whole life costs (WLC) the same or lower than grey fleet
• fit for purpose – equipped to carry equipment or clients
• zero emission (or low emission) and LEZ / CAZ compliant
• safe – meeting the Euro NCAP 5 Star safety standard
• attractive – modern and comfortable, staff should want to drive them
• easily booked – ideally with 24/7 access

A high level of utilisation is the single most important factor in achieving a cost-effective electric pool fleet. If staff must drive, the pool cars should be the first option for everyone before considering other vehicles such as their own car, a hire car or a car club car.

Encouraging your staff to follow this hierarchy is very important. Training on driving an electric vehicle, how to charge the vehicle and a simple booking system are all effective ways to encourage staff to follow the process. Some organisations go a step further and implement a ‘stick’ approach whereby staff cannot claim mileage on grey fleet unless pre-authorised.

Hire cars

Most large organisations can hire cars, self-insured, on daily rental for a relatively low cost. A small car can cost as little as £20 a day.

The formula for working out the breakeven mileage for a hire car is simple. Deduct the hire car’s fuel cost per mile from your grey fleet mileage rate and divide the daily hire cost by the residual mileage cost.

Hire car contracts can specify that vehicles are either low emission (ie under 100g/km CO2) or ultra-low emission, and that they meet the Euro NCAP 5 Star safety standard.

Car clubs

Local car clubs can be cost-effective for short duration trips or where parking for pool vehicles is limited or non-existent. Car club vehicles are generally new, and either low emission or electric, which means they can help to reduce fleet carbon dioxide emissions.

The process for using car club vehicles is simple:

• book for as little as half an hour at a time, using phone, smartphone app or internet. The booking can be made ahead of time or at a few minutes’ notice
• unlock cars located at designated parking bays, which can be accessed using an RFID card
• the driver then enters a pin and drives away, returning the car at the end of the journey
• charges include fuel and maintenance costs. A subscription charge is paid monthly or annually. Payment is usually by the hour and by the mile, although some clubs include some mileage in the hourly charge

Because the vehicle is charged by the hour and by the mile, this type of hire is suited to short-duration, high-mileage trips.

Car club operators also offer a ‘pool car’ service. The car club owns the vehicle and manages the booking system, maintenance and cleaning of the vehicle for a fixed fee per month. In 2018, Highland Council adopted car club vehicles and encouraged staff to use them. This reduced their annual business mileage by 825,000 miles and produced savings of £400,000 and 371 tonnes of CO2e (The Highland Council, 2019).

Further information on car clubs can be found on the CoMoUK website.