Green Fleet Management
There is a significant focus from governments and businesses on reducing organisations' environmental impact. Corporate social responsibility is high on executives' agendas not just from a corporate public relations perspective but also in terms of bidding for new business. For governments, legislation is being passed both at a national and European level to ensure countries reduce the impact of their activities on the environment.
The most logical place to start developing an environmental policy is around the vehicles which are used for travel. This can relate to any company operated vehicles but also those which employees use for business travel, commonly known as the “grey fleet”.
A typical vehicle emits 10% of its lifetime CO2 emissions during the production process and 5% during the recycling of parts at the end of its life. This leaves the remaining 85% of CO2 emissions which take place as the vehicle is “in-life”. Therefore the selection of vehicles with a highly efficient operating cycle is key to managing emissions down.
Practical actions organisations can take to ensure the correct vehicles are utilised include:
Ensuring vehicles are appropriate for the intended use, not over specifying or overloading (especially for LCV’s).
Limiting the vehicle selection list according to appropriate CO2 levels
Alternatively Fuelled Vehicles
Generally alternatively fuelled vehicles are currently most applicable to niche applications, usually in all urban environments. However, the introduction of other vehicle types such as the E-REV Ampera broadens the outlook for use in other scenarios.
Ensuring the vehicle selected considers the operating conditions it will be used in. Hybrid technology for example, is most effective in urban environments where as diesel fuelled vehicles become the more efficient choice if use is predominantly on motorways and a-roads.
It is important that vehicle checks and routine maintenance should be carried out regularly to ensure the vehicle operates to its optimum capability. Under inflated tyres for example can significantly increase fuel consumption as well as inflicting damage on the tyres.
A key element to the effective environmental management of fleet is successfully engaging drivers into the culture and concept of environmental efficiency. Drivers can have the highly efficient vehicles but still drive and maintain them poorly, which has an adverse impact on their environmental impact.
Practical steps organisations can use may include:
Highlight to employees the cost of high emission vehicles both in terms of tax, fuel and depreciation. Fuel re-imbursement methods and rates should also be set at a level which doesn’t encourage unnecessary journeys.
Ensure employees are suitably trained to use their vehicles. This is especially important for commercial vehicles or where new technologies are used. Eco-driving is also commonly available and in many cases has been proven to reduce driver’s fuel consumption, more than covering the cost of being trained.
Where there are specific environmental targets in place then these should be effectively communicated to drivers. On-going communications both in terms of driver advisory notices and league tables for fuel economy performance can help to embed the culture of environmental awareness within the organisation.
The main impact on the environment is when the vehicle is actually driven. Measures to reduce mileage can make a big impact.
Alternatives to Travel
Could any meeting be covered using a conference call or video conference instead of the need to travel? New technologies such as net meetings also help avoid additional journeys.
The use of public transport such as trains, trams and busses can help to reduce carbon emissions.
Where meetings are necessary, planning meetings outside of rush hour traffic can help increase fuel economy on journeys. Similarly if multiple meetings can be planned in a similar geographical location this can reduce the overall business mileage travelled.
In addition to the purely environmental benefits of selecting lower CO2 emission vehicles there is also a financial argument. All the vehicle related taxes now encourage the uptake of low emission vehicles.
Fuel – One of the largest costs after a vehicle is delivered is the fuel to power the vehicle. Lower CO2 vehicles are comparatively more fuel efficient which will therefore save additional cost.
Vehicle Excise Duty (VED) – VED is based on a sliding scale according to the CO2 emissions of the vehicle - another beneficial cost factor of low emission vehicles.
Company Car Tax – is based on a combination of the list price of the vehicle, fuel type and CO2 emissions. Again, the lower the CO2 emissions the lower the relative amount of tax paid by the employee in receipt of the company car.
Class 1A National Insurance Contributions (NIC) – 13.8% of the employee's P11D value (company car tax) is payable by employers for each employee in receipt of a company vehicle.
Private Fuel – Private fuel incurs four separate charges in direct relation to the efficiency of a vehicle. Firstly, an employee pays tax on a fixed rate multiplied by the benefit in kind % on the company car. The employer incurs Class 1A NIC on this P11D value. The employer pays a flat rate VAT scale charge depending on the CO2 of the vehicle. Finally, the employer pays for the fuel used by the employee.
In addition to the positive environmental impact of selecting low emission vehicles there are also significant financial benefits. However, there is not a one-size-fits-all solution. This environmental strategy needs to be updated to adapt to the changing new technologies and fiscal structures in place.
If you would like some impartial advice on the efficient operation of your fleet please email us on firstname.lastname@example.org.
The Energy Saving Trust
The Carbon Trust
The Low Carbon Vehicle Partnership
The Society of Motor Manufacturers and Traders
HM Revenue and Customs
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