The Green Miles’ nine question decarbonisation challenge – Ian Dennis FCILT

Zenobe designs, finances, builds and operates battery solutions. The batteries capture renewable energy, balance its supply on the grid and transport it to electric vehicles. At the end of their lifecycle the batteries are repurposed, creating a circular economy for batteries.

Ian Dennis has over 20 years experience providing asset finance and contract hire solutions to clients in the corporate and public sectors. He has previously worked at Lombard, Barclays, Rothschild & Co, and Ryder and is a Fellow of the Chartered Institute of Logistics and Transport.

Here we go…

9. What are the biggest common sustainability challenges facing the whole logistics sector in your opinion?  

There is a perception in the logistics industry that we can wait on decarbonisation or that moving to HVO is the long-term solution. The sector is starting to move and those companies who don’t start the process of adopting eHGVs on to their fleet will now find themselves left behind. Already we are seeing shippers looking to reduce their supply chain emissions and encouraging the use of eHGVs. HVO is a short-term solution with a premium attached to its use.

With the additional costs of HVO, there is a strong case for moving to eHGV instead. There are barriers to adoption, such as the capital costs of the vehicles, however these can be overcome through a combination of longer financing terms, sensible residual values  and cheaper electricity, all driving down total cost of ownership.

Only by driving down the cost of the adoption of electric vehicles will eHGVs be the viable, long-term option for operators.

The key to electrification is access to clean, cheap power. Getting power to depots is often stated as the biggest problem, however this can be negated by using independent contractors and innovative solutions. If we can speed up the process, we can start to move at scale with eHGV adoption, especially of medium sized trucks 7.5t to 19t where cost parity is easier to achieve.

8. What are the hottest topics in decarbonisation for the HGV sector?  

Residual values, depot power and government support.

Residual values on trucks are a new and unproven area, which presents difficulties for a market so pressurised by margins and where funding is critical. Until values become stable, there is the potential to take residual values on the most expensive component of an electric truck – the battery. This provides the potential, when combined with longer operating cycles, to redress the balance and provide more attractive financing solutions.

Depot power, we talked about, but there is also a lot of interest in micro-grids and the use of solar and batteries. There are opportunities for micro-grids, but a cost-effective grid supply is usually a better solution.

The government is supporting the market via The Zero Emission HGV and Infrastructure Demonstrator (ZEHID), and its plug-in grant and the depot grant. However, there needs to be a realisation that some of the depot charging solutions are going to take longer to embed than the limited timescale that has been suggested.

7. Do you think the UK’s net zero goals are realistic?  

We must decarbonise, there isn’t really any doubt about that, and we must have achievable goals. 2035 and 2040 are ambitious milestones but they are achievable if industry has an open mind to electrification.

In addition to ZEHID focusing on tractor units, there is also a need to focus on what we can electrify now. Smaller trucks, RCVs (Refuse Collection Vehicles) and vans are sectors which could adopt electric solutions. We estimate that between 70% and 80% of use cases in these sectors would be suitable for electrification. There seems to be a disconnect, with the focus on tractor units, when there are different vehicle types which are equally important.

6. What are the specific challenges faced by the different modal sectors?  

The strategic alignment within intermodal transport is a challenge and we need to develop solutions which work to the strengths of each sector. With suitable investment, more freight could move between sea and rail, reducing the reliance on road transportation and enabling transport to focus on final journey delivery.

All the sectors need to decarbonise, but long-distance air transportation has considerable challenges to overcome, potentially using synthetic or alternative fuels rather than battery. Rail can decarbonise and use electric solutions. Road transport is now seeing battery electric vehicles (BEV) become the dominant technology as the economics of hydrogen limit its use case.

The road industry needs to accept change and begin to scale BEV solutions across those duty cycles which present the best immediate use case.

5. What are the best examples of positive breakthroughs you have seen in the last decade?  

The development of battery technology and increased range capabilities.

We have seen the use case of vans, 7.5t, 19t and RCV steadily strengthen for BEV, especially where there is cost effective sourcing of electricity. Being able to harness wind and solar technology, combined with battery storage, will drive the costs down and enable customers to obtain clean, cheap energy.

By reducing the costs of fuelling via electricity, there is a beneficial impact on TCO, enhancing the use of eHGV solutions.

4. Who is an inspirational figure in logistics?  

There are many inspirational figures within the logistics sector, especially those that are getting on with the job of decarbonising and ensuring that their fleets take advantage of emerging and innovative technology.

Examples include Geoff Tomlinson at FSEW, proving that fleets can decarbonise outside of ZEHID, Olly Craughan at DPD showing how van duty cycles can be completed by BEV, and Lorna McAtear, who continues to champion BEV and push companies to decarbonise.

3. With the growing emphasis on sustainability, do you see rail freight competing with road and air transport?  

Rail is underutilised for freight transport, and shifting more goods onto the rail network could reduce the amount of freight transported by road and reduce the level of carbon emissions. However, this would require further investment and a desire to move to intermodal transport. It’s difficult to see this happening with the way the current focus on road transportation is positioned.

2. How do logistics companies deal with ‘first mover hesitancy’?  

Logistics companies can overcome ‘first mover hesitancy’ by working with companies with a proven track record of delivering decarbonised solutions and effective financing. The logistics sector can learn a lot from the bus sector, which is further along in the process and has overcome many of the challenges.

The technology exists today to meet medium truck duty cycles and, in some cases, where there is access to fast charging, some heavy duty truck operations. If the vehicle can do the job and be swapped out on a cost neutral basis, at parity with diesel, there must be the question as to why operators are not embracing these solutions today.

1. What does the rest of 2025 look like for logistics decarbonisation?  

2025 could be a pivotal year for logistics decarbonisation, if we can see wider adoption amongst operators. We know that medium duty trucks can achieve parity in costs compared against diesel and that the majority return to base at night. These present an opportunity to decarbonise what we can now and then turn our thoughts to the challenges of heavier duty trucks.

2035 and 2040 are not that far away and the learning curve can be steep, but it’s a challenge I know the logistics sector has the willingness and dedication to take on.