Fleet decarbonisation: How to decarbonise and reduce costs

Fleet decarbonisation is challenging yet increasingly important for modern businesses to undertake. Decarbonising your organisation’s vehicles demonstrates your commitment to tackling the climate crisis and enhances your ESG credentials. At the same time, reducing carbon emissions from your fleet can bring long-term cost savings when done right.?

The growing need to reduce carbon emissions from fleets

There are a number of pressures both regulatory, financially and morally on businesses to decarbonise their fleet. One of the most pressing comes from the British government who have set ambitious targets for organisations in order to meet the legally binding requirement to reduce emissions by 68% by 2030, and achieve net zero emissions by 2050.?

Another pressure comes from customers. Many consumers are now choosing to purchase products and services from businesses that are committed to sustainability. A 2023 survey by the Better Business Act found that 77% of respondents agreed that businesses should have a legal responsibility to the planet and people alongside profits.?

Finally, employees are increasingly demanding that their employers take action on climate change with 25% of respondents in an ongoing YouGov survey stating that environmental sustainability affects their choices around their career.?

The challenges of fleet decarbonisation

The cost of replacing traditional fleet vehicles with electric or hybrid ones may be prohibitive for some organisations. More economically-friendly vehicles are typically more expensive than petrol or diesel ones due to the still developing nature of the technology. It would take a significant amount of time and financial investment to change an entire fleet, so many businesses are choosing to do it gradually as vehicles approach retirement. Even if a company can afford to update their entire fleet, charging infrastructure may cause an issue.?

Despite the challenges, there are a number of things that organisations can do to decarbonise their fleets. Firstly, assessing your current fleet emissions and then setting a target to reduce these. Once you understand the size of the project, organisations can develop a plan to achieve this which may not necessarily be a full overhaul of your existing fleet.

Achieving competitive advantage by reducing fleet emissions

Decarbonising a fleet not only has environmental benefits, but it can also give a business a competitive advantage in the market. By undertaking the decarbonisation process, you can reduce your operating costs, improve your brand value, open access to new markets, and even reduce employee attrition rates.?

As electric and hybrid vehicles are more fuel-efficient than traditional gasoline-driven cars and vans your operating, fuel and maintenance costs are likely to decrease, improving profit margins. We have already discussed the emphasis placed by consumers on climate-positive businesses; committing to a decarbonisation programme showcases the organisations desire to have positive impact on the planet which can attract new customers, and confirm brand loyalists. In addition to this, some governments are incentivising businesses that decarbonise their fleets.? These incentives can include tax breaks, grants, and access to government contracts. These incentives can range from tax breaks to grants; in the UK the Workplace Charging Scheme covers 75% of the upfront purchase and installation costs, up to ￡350 per socket for charge points.

The reason so much support is available for businesses is due to the government committing to switching over 700,000 vehicles to zero emissions by 2030. Considering that over 75% of fleet owners have already implemented at least one fleet decarbonisation solution, if you’re yet to start planning for the future, the time to act is now so you don’t get left behind!

Effective routes to fleet decarbonisation

A crucial first step in any decarbonisation plan is to first understand and assess your current situation and future needs. Upgrading your fleet to include low-carbon vehicles requires you to make well-informed decisions that will successfully drive the transformation of your fleet. The typical roadmap from evaluation often then flows through reviewing and implementing new infrastructure, refining your operational processes, ensuring your management team and stakeholders have the right information and finally continually testing, monitoring and adapting using fleet decarbonisation technology. There are a handful of key milestones during the process.?

Evaluating low-carbon vehicle options

In order to make your transition to low or zero-carbon vehicles a success, you’ll need to conduct comprehensive research on the range of low carbon options that are available. Not every alternative fuel or vehicle type will be suitable for your organisation - if you have a delivery team who are covering 500+ miles per day, then a fully electric vehicle with a range of 100 miles and a charging time of 45 minutes will dramatically impact productivity.?

In this instance, you might want to explore electric vehicles (EVs), plug-in hybrids, hydrogen fuel cell vehicles, bio-fuel powered vehicles or other opportunities. Each option should be assessed on its suitability for your specific fleet requirement, both now and in the future. Make sure to assess factors such as range, payload capacity, infrastructure requirements and the availability of fuelling stations.?

You should also consider the total cost of ownership from upfront purchase costs, on-going maintenance and fuel and charging expenses.

Evaluating low-carbon vehicle options for the decarbonisation of your fleet requires a systematic approach including an assessment of your current fleet, establishing objectives, thorough research, and piloting before implementation. By following these steps, you will be equipped to make informed decisions, reduce your carbon emissions, and lead your organisation towards a greener and more sustainable future. Regularly reviewing and updating your fleet decarbonisation strategy will ensure alignment with emerging technologies, market trends, and environmental regulations.

Levelling up your infrastructure

Switching to EVs or hybrid vehicles doesn't just happen overnight. There are a number of infrastructure improvements that would need to happen for any organisation looking to explore low and zero carbon options for their fleets. Key considerations include charging stations, optimising routes, and potentially investing in telematics.?

Electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs) require charging stations, and the availability of these stations is often a barrier to their adoption. You should assess the cost and disruption required to install a suitable number of charging points for your new fleet and plan carefully for growth if this is part of your strategy.?

Refining operational processes

Decarbonisation doesn’t solely rely on the vehicles to do the heavy lifting. A comprehensive strategy will also consider the operational opportunities to be more environmentally conscious. By proactively refining key operational processes, businesses can reduce the impact of their fleets and help combat climate change. The first processes to examine include your fleet management systems.

Fleet management systems can help businesses track fuel usage and driver behaviour, with the information used to identify areas where significant fuel savings could be made. Where applicable, route optimisation may be the first and most impactful port of call, alongside driver training. This can help drivers to improve their fuel efficiency, ensuring that everyone in your fleet has the same base level of knowledge when it comes to best practice on the roads.?

Operations managers could also review their vehicle maintenance schedules. Regularly maintained vehicles can help to improve fuel efficiency, reduce emissions and also reduce the risk of accidents. Oil changes, tire rotations and brake repairs should be logged and carried out regularly.?

Some organisations may also wish to offer incentives to employees who use more sustainable transport operations such as walking, cycling, or public transport. These could include discounts or subsidised travel costs, or even cash rewards.

Equipping fleet managers with the right data?

In order to make the best decision for the business, and for the planet, fleet managers need to collect and analyse a huge range of data points before they can set out the decarbonisation strategy.?

Key data points that organisations should be looking to assist their fleet managers with include:?

• Fleet size and composition data; how many vehicles are in the fleet and what type

• Vehicle usage; how are the vehicles being used
• Fuel consumption and emissions; how much fuel is each vehicle using and what are the associated emissions??
• What routes are your drivers taking; could they be more efficient to reduce fuel consumption and make deliveries more efficient?
• Driver behaviour; how are your fleet drivers behaving behind the wheel. Are there any dangerous or excessive journeys happening??
• Cost of ownership; how much does it cost to own and operate each vehicle, including maintenance costs.?

By collecting and analysing this data, your fleet managers can make informed decisions about the next steps for fleet decarbonisation; identifying the biggest opportunities with the highest impact.?

Not sure that you have all of this data? Why not explore our Fleet management software??

Fleet decarbonisation technology: route optimisation

Another way that organisations can level up their infrastructure is by optimising routes. Reviewing your drivers routes to reduce the amount of fuel used per day is one of the quickest ways to make improvements. This does require route optimisation software, or onboarding a logistics company, to understand where improvements could be made and wasted miles could be reduced.?

Start developing you strategy

In order to transition successfully to green transport, forward-thinking companies are placing huge importance on the strategy behind their decarbonisation. These companies understand the significance of laying out their plans for the vehicles, infrastructure and fleet management before they take the leap and invest. The most successful implementations of eco-friendlier fleets are built on four fundamental pillars; diagnostics and evaluation, strategy development, testing and piloting, and execution.?

Diagnostics and evaluation

The process starts with a comprehensive diagnostic assessment of the current operational state, taking into consideration factors such as fleet size, vehicle requirements, route lengths and mileage, and business priorities.

Strategy development?

Business leaders and key decision makers undertake the development of a holistic strategy that aims to achieve not only the decarbonisation goals, but also the wider sustainability goals of the business.?

This involves determining the priority vehicles and use cases, the environmental factors of your choices as well as their financial viability, operational requirements and identifying the technology worth investing in. Trade-offs between the economic gains and emissions reductions will need to be carefully managed and any goals or objectives set should follow the SMART framework.?

Ensuring that your goals meet each of these expectations will ensure that you take into consideration external factors such as regulatory deadlines and incentives which may have a time limit attached to them. Finally, tying your decarbonisation efforts to your wider sustainability goals will help to ensure that every stakeholder sees the value in what you are doing.?

Testing and piloting

The safest way to ensure a successful integration is by piloting a small number of proposed solutions before making a full-scale transition. This allows you to fully understand and experience the practicalities, challenges and benefits of adopting low-carbon vehicles within your organisation while also leaving room for flexibility and potential disruptions.?

Use the pilot to gather feedback and evaluate the impact of your test and make any necessary adjustments before implementing the change across your fleet. During this time you should also look to create clear documentation on vehicle usage including charging and fuelling, driver training and ongoing monitoring and maintenance.?

Execution

Following the evaluation of the pilot projects, decision-makers should define the criteria that the tests need to meet in order to be rolled out fully. This includes what the sourcing strategy looks like, construction plan and the establishment of partnerships, training, and maintenance.?

By following these four pillars, companies can navigate the risks associated with the shift to green transport and establish a solid foundation for a successful decarbonisation journey. This proactive approach enables businesses to make informed decisions, optimise operations, and effectively capture the value that comes with embracing sustainable transport solutions.

Next steps

At The Barcode Warehouse, we recognize the importance of developing a comprehensive decarbonisation plan tailored to your business needs. Our team of experts is ready to provide guidance, solutions, and cutting-edge technologies to support your journey towards a greener future. Together, we can drive positive change and create a sustainable and efficient transport ecosystem.?

For more information on how to assess your current situation and how to evaluate, plan and invest in the right technology to achieve a low or zero-carbon fleet, download our comprehensive guide.?