environment magazine

Sustainable Fleet Management

By Ian Featherstone, Fleet Advice Manager, Energy Saving Trust

It’s a tough remit for fleet managers these days. The day to day issues of vehicle breakdowns and accidents divert attention from the complexity of new tax regimes, health and safety measures and being green. A difficult balancing act between solving today’s urgent problems and having the vision to create new policies to meet the challenges of the future and persuade sceptical colleagues to accept them. Except recently it has become harder, with fuel price increases of 25% in the last 18 months and the spectre of higher fuel duty from January 2012, the daily pressure to save fuel and money intensifies, where does this leave the green transport agenda?

Arguably near the bottom of the to-do list, as many organisations struggle for survival, but what is green fleet management all about? In our view it’s selecting the most efficient vehicles for their intended role, driving them in a safe and fuel efficient manner and finding ways to reduce the mileage driven while still providing the goods and services the organisation is in existence to provide. Green fleet management pays, and here’s why.

It isn’t just about the vehicles, and in this regard organisations often fall short. Company car drivers, since personal taxation changed to reflect the g/km CO2 rating of their cars in 2002, have migrated towards more efficient cars, they may not understand the relationship between fuel burnt and CO2 emissions, they may not even care, but they know that a car with a low g/km figure saves them money.

Employers have often been slow to recognise the scale of the savings possible, if higher emission cars are available more cheaply surely they are the cost effective option, a quick calculation comparing the cost of increased fuel consumption versus reduced purchase or lease price should confirm it? Usually the answer is no, Company Car Tax and Fuel Benefit Tax (on private fuel) effect the driver but the company pays too. Employer’s class 1A National Insurance liability on the benefit in kind, capital allowances, leasing disallowances, VAT scale charges (for private fuel provision) and Vehicle Excise Duty (road tax). If these elements aren’t taken into consideration, it is unlikely that the cleanest, lowest cost cars will be selected.

If this doesn’t convince, Company Car Tax, Fuel Benefit Tax and the associated National Insurance liability increases by 38.5% in April 2012 for a 120g/km car, which for the last 2-3 years has been considered the low- emission benchmark. The lowest benefit in kind percentage rates (excluding plug-in hybrid and electric cars) will be reserved for cars with emissions of 99g/km or below and 94g/km the year after. The environmental screw is being turned year on year and transport professionals must look ahead, plan and perhaps most important of all, keep their colleagues in the loop. Keeping up with developments takes effort and the range of emissions and therefore fuel economy can be quite startling even when comparing different models from the same vehicle range from the same manufacturer as the following table illustrates.

The blue bars represent the CO2 range in each segment and the horizontal line within each bar the average CO2 for that segment. The area below the line gives an indication of the reduction that can be achieved through careful vehicle choice.

Commercial vehicles have made great improvements in efficiency too, but relying on improvements in technology isn’t enough, regularly reviewing the size of van and power requirement for a particular role is good practice.

Technology too provides benefits in efficiency and driver management. Telematics, as well as enabling the location of vehicles to be determined and routes optimised also allows analysis of speed, driving style etc. If the benefits of fitting a telematics system aren’t convincing, fitting speed limiters will reduce the risk of damage to the reputation of an organisation from speeding liveried vehicles, saving fuel and reducing emissions and risk in the process.

Driver behaviour is the single biggest influence on fuel economy, but also the toughest to manage. Data from a large sample of fuel card users indicates that the average company car driver uses 15% more fuel than calculated using the quoted combined mpg figure for a given vehicle. Driver training, for fuel economy or safety, teaching a smooth driving style and anticipation, can help save fuel, reduce accidents and wear and tear on vehicles. Our own short (around 50 minutes) Smarter Driving Programme taken by more than 30,000 company car and van drivers on average, results in a 15% improvement in fuel economy after training.

Grey fleet, vehicles owned by employees and driven on business journeys are often neglected. From an environmental perspective, grey fleet cars are on average older, less fuel efficient and higher polluting than the average company car, pool or rental vehicle and the employer still has a duty of care to ensure that the vehicles used for business journeys are fit for purpose, roadworthy and insured correctly. Cost can be an issue too, particularly when high mileages are travelled. Many grey fleet drivers, particularly in the public sector reclaim amounts above the HMRC recommended rates; the claims are therefore taxable and provide an incentive to drive more miles, increasing further the cost to the employer. Monitoring grey fleet or indeed any mileage claims, usually results in lower claims, sometimes up to 25%.

The challenges of today can seem overwhelming, but what of tomorrow? Should electric and alternative fuelled vehicles be considered? After all, the history of alternative fuels hasn’t always been a happy one for a variety of reasons, but things may well be changing and fleets need to keep abreast of developments.

Hybrids powered not entirely by petrol or diesel can make sense in the right place today. As fuel and drivetrain choices proliferate, the supply of fuel, vehicle performance (range, payload etc.) and driver training are some of the operational issues to consider, infrastructure and fuel costs, vehicle and driver taxation and incentives some of the financial complexities. In reality this is no different to the best practice in conventional vehicle selection. The decisions made by organisations running a fleet efficiently today will just become more complex. One thing’s for sure, the decisions won’t become easier but they will be important to get right.

A universal solution, a silver bullet when it comes to solving our future transport energy needs is unlikely; sustainable biofuels, hydrogen, electricity and yes, efficient petrol and diesel engines will all play their part as we strive to meet our emission reduction goals and reduce our dependence on ever more expensive non-renewable resources.

More information is available on our website www.energysavingtrust.org.uk/fleet as well as other resources such as copies of our free monthly newsletter, Fleet Briefing which each month analyses a topical fleet management issue. You can also phone us on 0845 602 1425 or email This email address is being protected from spambots. You need JavaScript enabled to view it.