PRESS RELEASE : Government invests £200 million to drive innovation and get more zero emission trucks on our roads [October 2023]

The press release issued by the Department for Transport on 19 October 2023.

New funding will create new jobs and provide crucial infrastructure to help the haulage sector decarbonise.

More zero emission trucks are set to drive on UK roads thanks to a £200 million boost to decarbonise freight vehicles, drive innovation and create new jobs as part of a week of government action to support the sector.

With heavy goods vehicles (HGVs) alone contributing 20% to all transport emissions across the UK, the £200 million in government funding announced today (19 October 2023) will be invested across 4 innovative green projects to roll out up to 370 zero emission HGVs and help set road freight on the path towards net zero, driving innovation and creating new jobs.

Delivered in partnership with Innovate UK, the £200 million government investment from the zero emission HGV and infrastructure demonstrator programme will also deliver around 57 refuelling and electric charging sites, providing the crucial infrastructure to help the haulage sector decarbonise.

Roads Minister, Richard Holden, visited Voltempo in Birmingham yesterday – one of the recipients of the £200 million – whose eFREIGHT 2030 project is set to create up to 200 new jobs by 2030 and provide Birmingham with one of the UK’s first electric vehicle charging hubs dedicated to HGVs.

The funding will help popular grocery companies such as Sainsbury’s and Marks & Spencer lower their transport emissions while protecting them from rising delivery costs associated with changing petrol and diesel prices. This could help prevent price hikes across supermarkets, allowing people to save money on food and groceries to help with the cost of living.

This funding comes as part of the government’s commitment to make the right long-term decisions for a brighter future. Decarbonising the freight sector is a key part of building a sustainable future for the industry and achieving our net zero commitments in a fair and pragmatic way that lowers costs, creates jobs and grows the economy.

Further to Voltempo, the other projects that will receive a share of the £200 million boost are Project Electric Freightway by GRIDSERVE, Project Zero Emission North (ZEN) Freight and Hydrogen Aggregated Logistics (HyHAUL) by Protium.

Roads Minister, Richard Holden, said:

Freight and logistics are the beating heart of our economy and it is only right that we celebrate the sector so that it gets the recognition and support it deserves.

From boosting zero emission tech across freight to attracting the future generation of talent to the industry, we are working hard to drive innovation, create jobs and grow the economy by building a brighter, more innovative future for one of our most crucial industries.

Decarbonisation Minister, Jesse Norman, said:

The UK is at the forefront of the global transition to net zero and today marks another important milestone to decarbonise freight, one of the economy’s most vital industries.

That’s why I’m pleased to reveal that we’re investing £200 million to roll out 370 zero emission trucks, and a further £2.4 million to pioneer green tech through the Freight Innovation Fund, as we work closely with the sector to create new jobs, grow the economy and reach net zero by 2050.

The measures come during a week of action from the government, including ministers visiting multiple freight stakeholders, to understand how the sector can continue to drive innovation and play a crucial role in creating new jobs, growing the economy and helping the UK get closer to net zero.

Richard Smith, Managing Director of the Road Haulage Association, said:

We strongly welcome today’s announcement from the government on the zero emission HGV and infrastructure demonstrator programme.

The £200 million commitment ministers are putting into this demonstrator significantly helps to de-risk the transition to net zero. The real-world demonstrators will answer many of the practical questions operators have and, in turn, give our members the confidence to invest in the zero emission lorries needed to drive down carbon emissions from our sector.

This week has also seen the publication of the zero-emission vehicle (ZEV) mandate. This sets out the percentage of new zero emission cars and vans that manufacturers will be required to produce each year up to 2030 as part of a new pragmatic and realistic pathway to 100% zero emission vehicle sales from 2035.

Indro Mukerjee, CEO of Innovate UK, said:

As the UK’s innovation agency, Innovate UK is committed to supporting innovative UK businesses working to decarbonise the UK’s road freight industry.

Together with the Department for Transport (DfT), the £200 million in government funding will develop world-leading battery and hydrogen trucks and demonstrate, at a large scale, creating greener jobs and boosting our net zero economy.

To further drive innovation in freight and logistics, an additional £2.4 million has also been unlocked through the second round of the Freight Innovation Fund (FIF). As part of the fund, the FIF Accelerator – open for applications from today – will help up to 10 small and medium enterprises develop new ways to make freight greener, more efficient and more resilient.

The £7 million, 3-year FIF aims to scale up and roll out innovative technology across the industry to decarbonise freight. It is at the heart of the Future of Freight Plan, the first-ever cross-modal and cross-government vision to help the industry improve planning, boost innovation in data and technology and facilitate the transition to net zero.

The first round of the FIF supported a series of groundbreaking projects, from using drones to deliver mail and services to the Orkney Islands, implementing AI and data to reduce costs, to deploying zero-emission technology to track and move freight across London.

Nicola Yates OBE, Chief Executive Officer at Connected Places Catapult, said:

Freight is a crucial sector for the UK and contributes around £127 billion to the economy, but it is not without its challenges. Reducing the sector’s carbon footprint, cutting journey times and easing traffic congestion are key areas of focus, alongside the development of efficient and better-connected logistics hubs.

We are proud to be continuing our work with DfT as we open applications for the second cohort of the FIF accelerator programme. The companies chosen will benefit from access to funding and expert support to develop their technologies and innovations that promise to make the freight sector grow, become greener and work smarter.

Freight Week will also see the launch of 2 calls for evidence to continue exploring new ways for the freight industry to decarbonise and become more efficient.

The first is the call for evidence to inform and support the Development of the zero emission HGV and coach infrastructure strategy, which is due to be published in 2024. This will ensure the delivery of the infrastructure required to meet the 2035 and 2040 phase-out dates for non-zero emission HGVs.

The second is the call for evidence on Volumetric concrete mixers (VCMs), which will consider whether a temporary weight allowance should remain, be removed or amended for the vehicles beyond the current deadline of 2028. It will consider the best options to reduce waste, limit costs and ensure fair competition while taking into account how to continue ensuring road safety.

With DfT providing approximately £20 million per year in freight revenue grants, the government will also consider how to boost freight across a variety of modes.

The Mode Shift Revenue Support and Waterborne Freight Grant will be reviewed to explore how to continue helping the sector decarbonise by shifting freight from road to rail or water through the 2 schemes.

October also marks the start of Year 2 of Generation Logistics, backed by £645,000 in government funding across 2 years, which will be led by CILT and Logistics UK.

Following a successful first year, Generation Logistics will now focus on raising awareness of the logistics sector and its career opportunities, specifically among young people in schools and colleges, in an effort to boost recruitment and retention of a more skilled and diverse workforce.

Kate Jennings, Director of Policy at Logistics UK, said:

Logistics underpins every sector of the UK economy and it is positive to see its importance being championed during Freight Week.

As an industry committed to decarbonising, we welcome the investment through the FIF, as well as the outcome of the zero emission HGV and infrastructure demonstrator programme.

Freight Week follows the decision to extend the fuel duty cut to March 2024 and the 33 unprecedented actions from DfT to support the haulage sector. These include up to £100 million in joint government and industry funding to improve roadside facilities for lorry drivers, and £34 million to create up to 11,000 skill bootcamps and increase the capacity for HGV driver tests by 90% compared to pre-COVID-19 pandemic levels.

Michael Boxwell, Project Director of eFREIGHT 2030, said:

eFREIGHT 2030 sets us on a journey to net zero within the heavy road freight industry. DfT support kick-starts the transformation, enabling us to create the charging infrastructure and bring in electric HGVs simultaneously.

By early 2026, we will have 11 fleets deploying electric HGVs and a nationwide HGV charging network using British-built chargers. Each charge hub will provide at least 6 charge bays and 1,000kW charging. This demonstration programme combined with world-class infrastructure will give fleet operators confidence they can deploy electric HGVs at scale.