Low Carbon Vehicle Procurement Programme: Initial programme plans

In the May 2007 Energy White Paper the government announced that it would set up a new programme to procure innovative, low-carbon vehicles for use in public sector fleets, as part of a package of measures to support new technology development in this area. It committed an initial £20million to the programme, which will aim to use the public sector's purchasing power to accelerate market introduction of lower carbon vehicle technologies. The vehicles procured under the programme will offer a significant improvement in terms of average carbon emissions compared to models already widely available in the UK vehicle market.

The Department for Transport has now set out its plans for implementing this procurement programme, including:

• The vehicle types and technologies that the programme will focus on in its first phase
• Initial participant organisations in the public sector
• Appointment of an external partner organisation with specialist vehicle expertise to deliver the programme

These plans are based on extensive engagement with a wide range of stakeholders, including vehicle manufacturers, public sector organisations and industry experts.

Subject to successful initial implementation of the programme, we are also making provision to extend the programme funding by up to an additional £30million over the period 2008/09-2010/11.

Initial programme priorities

We will focusing the majority of programme funding in the initial phase on the procurement of a lower-carbon van, offering a significant improvement in carbon emissions over current best-in-class models. Currently there is no lower-carbon van model available on the mass UK market, despite the fact that technology options exist for improving the carbon performance of vans. Successful introduction of a lower-carbon model into the UK van fleet has the potential to achieve substantial carbon reductions over time. Our consultation and research suggests that development of such a model for use in the public sector fleets could have a significant wider market impact. We feel therefore that this is the most promising programme option. 

We will also conduct smaller procurement of all-electric vans, a lower-carbon minibus, and potentially a small demonstration fleet of plug-in hybrid passenger cars.

It is anticipated that successful initial demonstration of these options within the programme will lead us to support larger procurements in subsequent phases. Other vehicle and technology options for the programme may also be considered in future. 

Extension of programme funding

The May 2007 White Paper committed an initial £20million to the programme. Many stakeholders have highlighted the importance of providing greater certainty about the programme's long-term development and funding.

Our objective is for initial procurements of lower carbon vehicles under the programme to lead to larger orders in future, at reduced additional per vehicle cost - helping to stimulate full market introduction of lower carbon options. We have provisionally allocated up to an additional £30million for the programme funding over CSR07 period (2008/09 to 2010/11) – taking the potential total programme value to £50m. Expenditure will however remain subject to successful initial implementation of the programme. The aim will continue to be to provide support for emerging, near-market vehicle options - though the types of vehicles and technologies supported under the programme may change as new technologies develop and penetrate the market.

Programme participation

The programme is aimed at public sector organisations, as the intention is to make better use of their combined purchasing power to secure environmental outcomes, demonstrate leadership on greening vehicles fleets, and have a wider impact on the market. Organisations that have confirmed their willingness to participate include the Environment Agency, HM Revenue & Customs, the Metropolitan Police, Transport for London, the Royal Mail, the Government Car & Despatch Agency (GCDA). All these organisations have significant vehicle fleets that can accommodate demonstration fleets of lower-carbon models, as well as a strong long term commitment to reducing the carbon footprint of their fleet.

Subject to funding availability and meeting programme objectives, we will also seek to involve a wider set of public sector organisations in the programme. This could mean making vehicles available to other government bodies, local authorities, law enforcement agencies, emergency services, schools and NHS Trusts. Key factors in determining participation will include the suitability of organisations' fleets (size, vehicle type, and performance needs), and hence the feasibility of placing lower-carbon models within them.

Appointment of expert delivery partner

The DfT will shortly issue a competitive tender to appoint a partner organisation with specialist technical and commercial expertise on low carbon vehicles to deliver the programme on our behalf. The programme manager will be responsible for drawing up detailed technical specifications for the vehicle types and technologies identified as programme priorities, securing further involvement of public sector organisations, leading open and competitive procurements of vehicles from manufacturers and disbursing programme funds.

A notice will shortly be issued on OJEU to begin the tender process. We will also approach the European Comission regarding any state aid aspects of the programme.

Programme timescales

We expect to appoint a partner organisation to deliver the programme in early 2008, and will aim to issue the first tenders for vehicles early in the next financial year. The first vehicles supported by the programme could be on the road from late 2008 - although it is likely that the majority would be delivered at a later date over the 2009/10 - 2010/11 spending period.

For further information please contact Lucy Ahad on lucy.ahad@dft.gsi.gov.uk or +44 (0)20 7944 4493.

ENDS