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Energy independence for the transport industry – Element 2 reacts to the Autumn Statement

Energy independence was a key theme in today’s Autumn Statement.

CEO Tim Harper shares his thoughts on the important role hydrogen is playing in facilitating energy independence, with road transport as the driving force.

Energy independence was a key theme in today’s Autumn Statement. Investing in the economic infrastructure that connects the country and secures the UK’s energy independence is a top priority for the Chancellor. And rightly so.

The UK’s road transport industry is one of the biggest contributors to national CO2 emissions. But the solution is already being provided by the private sector: a combination of hydrogen fuel cell and battery electric vehicles flooding onto our roads.

The adoption of electric vehicles in the UK has increased dramatically over the last two years, driven by increasing consumer demand for vehicles with lower emissions, greater availability of electric cars on the market, and government support packages for buying electric. The latest figures from the SMMT show that electrified vehicles account for one in three new car registrations, and more than a fifth came with a plug.

Long wait times for delivery of new EVs isn’t yet dampening demand for new electric vehicles, and the recent news of the UK’s first lithium refinery plant being built in Teesside will be a boon for the UK’s electric vehicles supply chain. The plant aims to generate enough lithium hydroxide for one million electric vehicles each year, boosting domestic production of this critical component for battery-electric vehicles at a time of uncertainty in global supply chains due to geopolitical tensions.

However, the financial advantages of switching to an electric car are about to be squeezed as the Chancellor has just announced plans for vehicle excise duty will be introduced for the first time. And there are other headwinds on the horizon which could further slow the EV sector’s recent strong growth.

The introduction of domestic supplies of lithium hydroxide are still some years away, and there is currently a strain on global lithium supplies to meet the growing demand for EV batteries. The International Energy Agency (IEA) predicts we’ll see lithium shortages by 2025, yet we’ll need to see around two billion EVs on the road by 2050 to meet net zero targets. Currently, there are approximately just six million EVs on the roads worldwide, according to IEA figures.

Battery electric vehicles have been the frontrunners in the race to net zero on our roads over the last few years, but now is the time to acknowledge that hydrogen fuelled vehicles will play an increasingly important role in our transition to petrol and diesel-free transport in the coming years.

Light vehicles have been well suited to electric battery powertrains due to their smaller size and lower technology development costs. But now that supply chain issues are beginning to affect production and financial incentives for motorists are being reduced, more manufacturers are looking at hydrogen as an alternative powertrain option.

Hyundai and Toyota have already launched hydrogen fuel cell-powered cars into the market, and more major car manufacturers are now investing in research and development for hydrogen-powered cars, including BMW and Renault in Europe*. And Volkswagen is developing a hydrogen car that has an unparalleled range of 2,000km.

When it comes to heavy goods vehicles, hydrogen presents a much more efficient solution for decarbonising the road haulage and transport sector. Hydrogen fuel cell vehicles offer a longer range than battery electric vehicles, as well as superior energy efficiency and consistency of range in all weathers and temperatures for long distance journeys.

The hydrogen fuel infrastructure, that has been cited by some manufacturers as a key barrier to developing hydrogen powered vehicles, is now being rolled out at pace. At Element 2, we’re building a national network of safe, high-quality hydrogen refuelling stations and partnering with local and national producers to secure a sustainable, UK-wide supply of green hydrogen. We have a number of hydrogen refuelling stations already established in the North West and North East, and are putting in about 50 further filling stations in the next year to 18 months

We’re also working strategically with manufacturers of hydrogen fuel HGVs, Electra and Tevva, to provide the refuelling infrastructure their customers need to support the rollout of their hydrogen-powered trucks in 2023 and beyond.

While subsidies for electric vehicles will be curtailed in 2025, now is the time for the UK Government to consider investing in financial support for the green hydrogen sector to further stimulate its growth. This is particularly critical to boost the purchase of hydrogen-powered heavy goods vehicles, as the heavy goods sector is currently responsible for a significant 19 per cent of greenhouse gas emissions on the UK’s roads.

When combined with greater green hydrogen production from offshore wind, UK road transport can become a global decarbonisation success story – with hydrogen at its core.

The future of the UK’s roads futures will contain a mix of vehicles powered by a range of cleaner fuel sources, including electricity, hydrogen, and perhaps even e-fuels, to ensure we collectively meet the UK’s net-zero targets.

Now is the time for stakeholders across the transport and automotive sectors, from OEMs to policymakers, to work together to progress decarbonising the UK’s roads and build a transport network that is fit for a sustainable future.