Given the nature and scope of its members’ activities, PostEurop welcomes the opportunity to contribute to the European Commission’s call for evidence on the Clean Corporate Fleets initiative. PostEurop represents the European postal operators, all of whom are taking action to
reduce greenhouse gas emissions within their respective operations. Specifically, European postal operators are undertaking decarbonization efforts within their operations and support the EU’s climate ambition in two key action fields: currently we have one of the largest low-emission fleets which includes over 109,000 electric vehicles and 14,000 vehicles powered by alternative fuels. 77% of our electricity use comes from renewable sources and we have put in place various circular economy and waste reduction initiatives.
Nonetheless, whilst the decarbonization of postal operators’ fleets remains a priority, existing limitations to grid infrastructure currently prevent widescale deployment. Moreover, higher Total Cost of Ownerships (TCO) for zero-emission Vehicles provide challenges for operators to remain competitive within an extremely price sensitive sector. As such, PostEurop calls upon the European Commission to take urgent action to overcome hurdles associated with grid limitations such as increasing grid capacity and reduce permitting times to support grid connection upgrades, in addition to support demand-side measures which lower the TCO of zero-emission vehicles. These actions would unlock to possible for the widescale deployment of zero-emission HDVs, whilst similarly supporting the commercialization of such solutions, ensuring the competitiveness of the sector.
Supporting a Competitive Transport Sector
Whilst work simultaneously is undertaken to urgently address limitations associated with grid infrastructure, demand side measures to support competitive TCOs for zero- emission vehicles should be pursued. Fiscal measures to reduce the TCOs of zero-emission vehicles would then in turn support operators in the commercialization of the zero-emission transport services, and as a result support the decarbonization of corporate fleets.
Based on their users’ experience, postal operators note that certain conditions are still necessary for the TCO of electric LCVs to be aligned with that of combustion engine vehicles. These conditions include: a continued convergence of purchase prices between EVs and combustion vehicles, the maintenance of tax incentives for EVs purchases, electricity costs that do not destabilize the advantage of EVs, and support for the development of the zero-emission vehicles second-hand market. It is also important to stress that different types and sizes of electric LCVs are suited to different uses.
Professionals are faced with a lack of availability of electric LCVs between 6 and 11 m3 while the size of batteries available today is oversized for the needs of urban logistics (and therefore more expensive).
As regards, HDVs, the initial vehicle costs, public energy prices, and installation of HDV charging remain expensive in comparison to traditional combustion engines. Without fiscal support, zero-emission solutions will remain a challenge to implement and commercialize to due uncompetitive business cases. This is additionally important when considering that the road transport sector is predominantly made up of MSMEs who do not have the financial capabilities to invest in solutions with high initial costs.
To combat this challenge, consideration should be given to implement fiscal support across the whole TCO of the vehicle. For example, support can be provided through vehicle incentives, support for HDV charging installation, the reduction of energy costs through green VAT rates, green VAT procurement rates, reduced vehicle registrations etc. Through the introduction of modest reductions across a number of elements, there is potential to significantly reduce the end TCO of a zero-emission vehicle; thus, supporting the ability for operators to implement such solutions through competitive business cases.
Addressing Grid Infrastructure Limitations
As postal operators continue their journey to zero-emission solutions, the sector’s energy demand will increase significantly. Electric HDVs have a significantly higher energy demand than Light Commercial Vehicles (LCV) such as pick-up and delivery vans. As a result, as operators switch to zero- emission alternatives, a considerable increase in grid capacity will be required; capacity which currently does not exist. Without the necessary grid capacity to support the charging of electric HDVs, operators will simply not be able to charge the vehicles and consequently will not be able to effectively and efficiently use such solutions within their operations. The necessary increase in grid capacity is foundation to the transition of the transport sector to electric HDVs. It is for this reason that measures such as mandatory purchase or zero-emission shipping targets would be ineffective policy tools as operators would not be able to charge and use the vehicles in question; ultimately failing to achieve the overall goal of reducing emissions within the sector. It is therefore imperative that the European Commission take action to support the expediated increase in grid capacity across the European Union.
Moreover, further support is required to quickly, and safely, upgrade necessary grid connections to support the transportation of the additional energy into postal operator’s depots. Lengthy permitting times are currently preventing the quick installation of HDV charging at depots and other related facilities, further delaying the transition to zero-emission HDVs. PostEurop therefore calls upon the European Commission to support the expediated upgrade of necessary grid connections, in addition to harmonizing permitting requirements where possible. While some provisions to reduce permitting currently exist with the Net Zero Industry Act (NZIA) and within Renewable Energy Directive III (RED III) further measures are needed to expand action reducing permitting burdens, support implementation of existing measures in Member States, and harmonize requirements.
Action to increase grid capacity and upgrade grid connections, however, will take time. As a result, the European Commission should also support low emission solutions such as range extenders and biofuels to reduce emissions in the short term, whilst work on grid infrastructure continues in parallel.
Supporting the Electrification of Transport Depots
As mentioned above, depot charging will be crucial for operators when deploying zero-emission HDV solutions. This is primarily due to cheaper energy rates (taxes, levies, grid fees), and charging guarantees. However, the deployment of HDV charging remains expensive, further contributing to high TCOs. Support is therefore required to facilitate the installation of HDV charging facilities. Given the vital role depot charging will play in the decarbonisation of the transport sector and corporate fleets, prioritization (where possible) must also be provided to such projects, in addition to encouraging Member States to develop smart support schemes for their deployment.
Reducing Grid Demand Through Supporting All Technologies
Finally, the expected increase in peak grid demand additionally remains a concern for the decarbonisation of corporate fleets. Whilst efforts by operators are taken to reduce such peak demands, it is not always possible. Measures should therefore be taken to support all technologies and solutions that minimize energy demand during peak periods. This approach would also protect operators against higher energy costs and prevent undue strain on grid infrastructure. In order not to be blocked by the lack of economically accessible and technologically performant electric solutions, biofuels, biogas, and range extenders have been key to begin decarbonising a significant proportion of postal operators’ long-distance transport; they should be recognised as levers of environmental transition for a transitional period. Solutions such as battery storage is one example that should be promoted and supported as renewable energy could be created at postal facilities during the day, stored, and then used during evenings and
night periods when postal operators’ energy demands are higher. These assets usually require long term planning and therefore require reliable revenue streams. Finally, battery swapping technologies for HDVs could also support in preventing significant strain on the grids. Charging HDVs batteries over a longer period at lower wattages would reduce the peak demand needed to charge an HDV in short periods of time when compared to existing plug-in solutions. Through supporting a wide range of technologies and solutions, operators will have greater flexibility to deploy zero-emission solutions where possible.
Overall
PostEurop once again welcomes the opportunity to contribute to the call for evidence on the upcoming Clean Corporate Fleets initiative. As outlined above, addressing grid infrastructure limitations such as increasing grid capacity and expediating grid connection upgrades should be urgently tackled by the European Commission to support the decarbonization of corporate fleets.
Without such action, operators would not be able to charge, and therefore use, such vehicles in day-to-day operations. It is also for this reason that policy measures such as mandatory targets would fail to decarbonize corporate fleets, as operators would not be able to use them. Nonetheless, PostEurop advocates for the introduction of fiscal measures in parallel to reduce the TCO of EVs, in order to support their deployment. This is essential to further support the deployment of zero- emissions LDCs while the reduction of zero-emission HDV’s TCO will support the deployment of such vehicles in the selective scenarios where it is possible to deploy a small number of HDVs (in line with existing or small increases in grid capacity). PostEurop remains available and open for further constructive discussions on this topic.