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31 May 2021

Policies and targets for decarbonisation of the railway

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Sophie Hutchinson and Suzanne Tarplee explore the decarbonisation of the railway, in the first of a four part series.

The UK government has, in recent years, made efforts to tackle what it has declared as a climate emergency. As part of its accession to the Paris Agreement in 2016, the UK committed to limiting global temperature rise this century to less than 2°C above pre-industrial levels, and to pursuing efforts to limit the increase to no more than 1.5°C. In 2019, the UK Government became the first major economy in the world to legislate to end its contribution to climate change. This was done by way of an amendment to the relevant UK legislation, the Climate Change Act 2008, which requires the UK’s net greenhouse gas emissions to be reduced by one hundred per cent relative to 1990 levels by 2050.

These are challenging targets. It is clear that everyone and every industry will have a role to play in achieving them. Decarbonisation is a fundamental issue facing all industries – the rail industry is no exception. While rail is one of the greenest forms of transport, there is still significantly more that can be done to decarbonise the railway. It is not a question of whether it should be done, but of how it should be done. The details of exactly how decarbonisation will be achieved are a work in progress. In this article we will consider what needs to be done to drive and support decarbonisation in the rail industry.

What does ‘net zero’ actually mean?

We are used to hearing the term ‘net zero’ in our daily lives in relation to the climate – but what does it actually mean in practice? The concept of ‘net zero’ is to achieve a balance between the volume of greenhouse gases emitted and the volume of greenhouse gases removed from the atmosphere. This balance can be achieved by both reducing new emissions and actively removing greenhouse gases from the atmosphere, mainly through absorption by vegetation. While rail industry parties could contribute to the journey to net zero by investing in carbon-offsetting schemes, such as planting trees, to remove greenhouse gases, the focus is almost certainly going to be on reducing new carbon emissions.

Carbon emissions can be attributed to both the CO2 that is emitted when something is manufactured or constructed (embodied carbon) and the CO2 that is emitted as it is used over the course of its lifetime (operational carbon). Often, the focus of innovation in decarbonisation is on operational carbon, because this is perceived as more long-term, but it is important to consider whole life emissions.

Rail industry-specific targets

Rail is among the lowest carbon modes of transport from an operational perspective, in particular when considering the emissions per person. Think, for example, of full to capacity commuter trains. In 2018, the rail industry contributed to just 1.4% of the UK’s total greenhouse gas emissions. Despite this, the industry is not being complacent; it is already working collaboratively across private and public sectors to develop innovative solutions to decarbonise further.

However, emissions from the transport industry more broadly have remained fairly stable since the 1990s, while emissions from other industries have decreased. As a result, the transport sector as a whole is now the largest contributor to UK greenhouse gas emissions, contributing 34 per cent of total emissions in 2019. Therefore, the entire transport industry needs to do more to decarbonise, and rail can play a big part in this. This can be done both by reducing carbon emissions and by encouraging people to use rail instead of other modes that have a higher carbon intensity.

In response to the net zero requirement, in February 2018, Jo Johnson MP, then UK Rail Minster, challenged the rail industry to remove all diesel-only trains from the network in England and Wales by 2040. Transport Scotland went a step further with a target to decarbonise domestic Scottish passenger rail services by 2035. But how does the government plan to meet these targets?

The Rail Industry Decarbonisation Taskforce

The Rail Industry Decarbonisation Taskforce (the Taskforce), supported by the Rail Safety and Standards Board (RSSB), was set up to answer the challenge to remove diesel-only trains by 2040. It published its ‘Final Report to the Minister for Rail' in July 2019, setting out a vision for how the rail industry can decarbonise. The report recommends that the industry and government should work together on a national strategy so that rail can play a major role in contributing to the journey to net zero by 2050.

The report is split into three areas: traction, property and infrastructure. Although rolling stock has often been the focus of discussions and innovations relating to decarbonisation, it is important to consider other elements of the industry. In order to make real progress, a holistic approach is required.

  1. Traction: There is continued innovation in the industry both to improve the primary existing modes of traction – diesel and electricity – and to develop new technological solutions. The Taskforce proposes a hierarchy of options for the decarbonisation of traction modes – starting with a focus on running on the existing electrified network whenever possible, then using the electrified network to charge batteries to bridge ‘electrification gaps’, and finally looking to other traction modes, such as hydrogen, bi-mode and hybrid trains, where extension of the electrified network is not feasible or will not be the most cost- and carbon-effective whole system and whole life solution. In many cases, conversion of existing diesel units into bi-modes is an effective way to reduce both embodied and operational carbon. This avoids the emissions that would be produced by manufacturing new trains and enables the use of low-carbon traction modes where possible. We will explore the conversion of existing units and the issues relating to this in more detail later in this series.
  2. Property: Rail industry parties own a significant amount of property, meaning a substantial amount of rail lifetime carbon is in property assets (as well as track). Embodied and operational carbon should be minimised for all new developments and refurbishments, while reductions in operational carbon in other properties could also be achieved by increasing the use of renewable energy sources and low-carbon solutions for lighting, ventilation and heating. However, under the current franchise system, operators are only responsible for franchise property assets for the relatively short franchise term. Decarbonisation solutions, however, usually require significant initial investment with economic efficiencies over their lifetime, which is likely to be longer than the franchise term. As such, the Taskforce suggests it is important to make better use of tools such as residual asset value mechanisms and franchise asset transfers and innovative financing structures. These mechanisms can be used to support and encourage private investment in decarbonisation projects that extend beyond the lifetime of a franchise.
  3. Infrastructure: The majority of railway assets are built to last a long time and are subject to strict safety controls. This limits opportunities for carbon reductions in the short-term. The Taskforce highlighted the opportunity for innovation in replacing lineside diesel generators and emergency generators with battery storage. Another key area for consideration is the materials used when maintaining and developing infrastructure – in particular in relation to embodied carbon. Because of its size, Network Rail has the power to influence the construction industry in the UK. By encouraging the use of low carbon steel, concrete and other materials in its works, it could set a precedent for the market and create demand for these materials, which would drive production and allow others to use them as well, both in the rail industry and beyond.

The strategic recommendations

The Taskforce identified five strategic recommendations to achieve the net zero target. These recommendations are summarised below, together with our analysis.

  1. Targets: The rail industry, including government, should support the target of net zero by 2050. In fact, it should do more than just support the target – it should commit to playing a major role in achieving it. This will require significant changes in the industry. As well as the ultimate aim of net zero by 2050, interim targets should be set along the way, focussing on reducing both embodied and operational carbon. A named technical body should be responsible for setting these interim targets. Until we know how the Williams Review will change the structure of the industry, this should be the RSSB. The targets set should be achievable and, importantly, measurable, so that progress can be monitored effectively. To do this, more will need to be invested into carbon performance data.
  2. Policy: The government should set out clear, consistent and enabling policies for decarbonisation of the whole rail industry. In the Taskforce’s industry consultation, this was one of the most given responses. The government and the industry should work together to develop this policy, considering both embodied and operational carbon. Importantly, policy should be accompanied by appropriate incentives, such as funding contributions to innovation projects. The policy should also outline how targets will be met, such as by way of environmental requirements in public procurements and detailed specifications. Another possibility is enhancing environmental sustainability requirements in TOCs’ operating agreements. Existing franchise agreements include requirements such as recording environmental data, meeting environmental ratings for construction projects or complying with an agreed sustainability strategy, amongst others. Going forward, these requirements could be increased and further incentivised in the new form of operating agreement. However, the potential knock-on effects on charges to passengers should also be kept in mind.
  3. Industry structure: It is imperative to have an industry structure that effectively supports, enables, incentivises, monitors and regulates the route to net zero. The industry is in a transitional phase, pending the long-awaited results of the Williams Review and reactions to changes caused by the COVID-19 pandemic. The structure needs to align incentives, risk and reward to maximise opportunities for ambitious, successful, cost-effective decarbonisation. There is also a need for clarity in relation to what each industry party is responsible for on the route to net zero. Another crucial part of the changes that the Williams Review hopes to bring is to make the railway attractive to passengers – as this will encourage modal shift. Because rail emits less carbon per passenger than other modes of transport, we need to encourage people to use rail. This will have the dual benefit of contributing to decarbonisation of the transport industry as a whole and to growth of the rail industry. Again, we will focus in more detail on the importance of modal shift later in this article series.
  4. Delivery plan: As well as the industry-wide policies and plans for decarbonisation, each of the key industry parties, including Network Rail, TOCs, FOCs and ROSCOs, should publish their own long-term plan for how they will contribute to meeting the interim and long-term targets for net zero. In July 2020, Network Rail published its Traction Decarbonisation Network Strategy, leading by example. This is key to making all industry parties accountable for their actions – the whole sector needs to work together. The Taskforce also recommends that named executives in each of the key industry parties should be responsible for these delivery plans, further contributing to accountability.
  5. Research and development: The industry should set out clear five-year periodic research plans to reduce uncertainties in developing new technologies. The Taskforce recommends that this should be led by RSSB, Network Rail, RDG and RIA. Key areas for development include low-carbon traction technologies, low-carbon infrastructure solutions and measuring and modelling carbon emissions, both embodied and operational. Although innovation is clearly already taking place in these areas, the important thing is to have more reassurance that project will have long-term support from the necessary parties.

The government response

In March 2020, the Department for Transport published a paper titled ‘Decarbonising Transport: Setting the Challenge’, setting out its intention to develop a Transport Decarbonisation Plan to achieve net zero transport emissions by 2050. The paper covers a number of different modes of transport and focuses on a cross-modal approach, including encouraging modal shift to rail. There is also a recognition of the need for further investment in low carbon technologies, including rolling stock, infrastructure and, specifically, electrification. This paper is a good start, but more detailed, rail-specific policy remains essential. The Transport Decarbonisation Plan is yet to be published.

Are the targets achievable?

The Taskforce concluded that the target of removing diesel only passenger trains from the national rail network by 2040 was achievable, meaning that the industry can make a major contribution to the government’s target of net zero by 2050. It was encouraged by the steps already taken by the whole industry towards decarbonisation, but found that more needed to be done to accelerate the route to net zero to meet the timescales. With the clock ticking, we all need to play our part and do what we can to fight this climate emergency.

This article was first published in the May 2021 issue of Rail Professional; the piece can be found here.

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Suzanne Tarplee

Suzanne Tarplee
Partner and co head of rail

T:  +44 20 7809 2389 M:  +44 7718 247 220 Email Suzanne | Vcard Office:  London