National Assembly for Wales

Bore da. Good morning. I'd like to welcome Members to the Economy, Infrastructure and Skills Committee. Item 1. We have apologies this morning from Bethan Sayed. And if there are any declarations of interest please do say so now.

I move to item 2. We have a number of papers to note this morning: a letter from the Chair, from myself, to the Development Bank of Wales following their session. We have two letters from—well, three letters from Transport for Wales in total, but we have one regarding the Canton visit and one regarding the risk management plan. We have a letter from the Chair of the Public Accounts Committee regarding MyTravelPass and a further letter from Transport for Wales—or, sorry, to Transport for Wales—regarding redactions. Are Members happy to note those letters? Thank you.

In that case, I move to item 3. This is our next session in regard to the decarbonisation of transport and we have an expert panel in front of us this morning to help us with our work. We're very grateful for your advanced papers and for attending committee and for your time this morning—we really are. So, if you could just introduce yourselves for the public record and then we'll get into having a discussion.

I'm Christine Boston, the Wales director for the Community Transport Association. We represent in Wales nearly 100 small charitable organisations that deliver transport in the community for those who need it most, 365 days a year.

I'm Morgan Stevens, I'm the operations director at Newport Transport. I'm here representing the Confederation of Passenger Transport, who are the industry body for bus and coach operators in Wales.

My name is Abdul Hie. I'm branch chair of Cardiff Hackney Alliance, Unite union cab section. We represent about 400 drivers, mainly Hackney carriage drivers and private hire vehicles.

Lovely. Okay. Well, thank you. Members have different questions this morning. They probably have different questions related to different members of the panel, but mine are probably quite general to start with. Can I ask you what your views are on 'Prosperity for All: A Low Carbon Wales'? I'm specifically thinking about the target for zero emissions by 2028 in your specific responsibility areas that you're here to talk about today. Who would like to start?

I'll go first.

Thank you, Morgan.

The 2028 goal is very challenging to provide zero emissions for all bus operations in Wales for a number of reasons, cost being one of those reasons—the nature and the landscape of bus services in Wales. There are a lot of small bus operators that provide very specific services, especially in rural areas. The other thing is that a 2028 goal—a goal to be zero emissions probably needs to be a realistic goal, because what you don't want to have is people saying, 'Well, that's unrealistic; we won't bother with it'. We've got to try and get a realistic goal for operators and bring—

Is it a realistic goal?

To be fully zero emissions?

Yes.

I think it's achievable with a lot of funding to assist operators to do that. I think that the issue that you have is that we're only eight years away from 2028, and some bus operators have already got fleet replacement programmes in place. Operators are buying buses now with Euro 6 engines that are very clean at the moment. If there's an expectation for, then, operators to then go away from that sort of fleet replacement, that vehicle's only going to be in service for eight years, and there needs to be some sort of realisation that some of those vehicles will need to see their full lifecycle out.

Okay. Christine Boston.

Yes, I certainly support that. We recognise that there is a need to have a low-carbon strategy and support the overall aims that that is looking to achieve, but think it's important that there are targets in place that ensure progress, and they should be ambitious, but they also need to be smart. So, we support the point that Morgan has just made about them needing to be realistic and achievable, and the time period is not long to be able to replace vehicles at the rate that would be required to achieve that and the funding isn't there to be able to do it either. The Welsh Government haven't put forward a plan for how they'd be able to make that happen.

Also in the strategy it talks about public transport, it talks about services that are grant funded—it's not clear where community transport fits within that. So, does it apply to section 22 services, you know, those community bus routes? If it does, how are they going to support the sector to be able to transition their vehicles, which is partly about funding being made available, but also partly about making sure that there is infrastructure in place to be able to support those vehicles, and then, yes, I think it needs to be recognised that community transport operators face particular challenges in making those things happen by the nature of their permits, not allowing them to make a profit. So, they're not in a position to be able to generate profits to invest into updating their fleet.

Okay, thank you, Christine. Mohammed.

Yes, I think our industry's struggling to keep up with 'Prosperity for All', purely because the industry, the legislation surrounding the taxi industry, goes back to 1847, to horse and carriages, and then you've got the miscellaneous provisions Act, which is 1976—this is before the advent of smartphones. What's happening now is there's this confusion on what's going on. We have an issue with cross-border work, and the income of the drivers who are working in Cardiff has gone down by as much as 60 per cent, so some of them are on income support, relying on foodbanks. So, we are at a crisis point at the moment.

Obviously, we also participated in the White Paper consultation to reform the legislation, and it was pulled back, and one of the main reasons why was because it didn't go far enough to address the key issues facing our industry, and that is mainly cross-border work, enforcement issues. There is also the caps—they need to put a cap on private hire vehicles because there are too many on the road. There's an oversupply, which is also causing congestion. So yes, I think we need to focus on these issues before we can switch to zero-emission vehicles.

You said you were involved in the consultation for the White Paper. Do you feel that you've been consulted sufficiently in terms of the Government's approach and work?

Yes, I think the consultation worked really well, and it highlighted a lot of things. Obviously, there is very good support for the national minimum standards for the industry. We had about 99 per cent support for national standards. Also, there was 95 per cent for enforcement and then 99 per cent support for a database, which came out from the White Paper. Also, I think the joint local authorities didn't get much support. So, a lot of these things tie back to the task and finish group report by Professor Mohammed Abdel-Haq, and he addresses a lot of things in this report that we fully support, and we would like the Welsh Government to implement his recommendations. It addresses things like cross-border, it addresses the national minimum standards, and well as congestion and pollution.

And what specifically about—? What we're interested in is what your views are specifically on 'Prosperity for All: A Low Carbon Wales', and getting to the targets by 2028 that are in that.

What I'm trying to say, basically, is that unless our legislation is reformed, then it's going to be very difficult to keep up with these proposals. We're struggling at the moment to switch to Euro 6 compliant vehicles by 2021, and we've been campaigning and speaking to our local authorities, trying to push this back, and this is by 2021. The legislation that surrounds the industry just isn't enough to keep up with all these other demands. At the moment, we're struggling to make ends meet, and I think this is what the Government needs to understand. We're at breaking point at the moment with these things.

And, Morgan, how has the Government liaised and engaged with your sectors in developing their proposals?

Obviously, we've engaged with Welsh Government through CPT, through meetings and our responses to legislation and White Paper items as well. So, the Welsh Government and the industry have worked together on a number of different items before. As you can see from the response from CPT, it was quite direct for this—

Yes. Are you content? Do you feel that the Government listened and took on board your proposals or suggestions?

Yes. I think there is an acknowledgment that some of the proposals and suggestions from operators and CPT have been taken on board, and we have an understanding that, for the decarbonisation of Wales, we have to do something about reducing our reliance on carbon and diesel vehicles. And, yes, we feel that we're being consulted. 

And, Christine, are you happy with the level of engagement with your sector from Government?

I'd say there's been no engagement with the community transport sector by Welsh Government on the low-carbon strategy. We are working with the sector to see what organisations can do to move towards those aims, because the sector supports them and wants to be more low-carbon, but no formal engagement with Welsh Government on that. 

Have you approached them at all?

Not currently. Like I said, we are doing our own work with the sector, because we've seen the strategy, we believe that it's important and we're looking to help them reduce their carbon footprint as much as we can. 

Okay. Thank you. There's a lot there, but Members will come back during the course of the session. Oscar Asghar. 

Thank you very much, Chair. Good morning to everyone. Salaam alaikum, Hie. I just heard you, and as I said to committee here, 40 years ago I had a taxi badge myself. I know what taxi drivers do and I've got more information than probably many think about it. You mentioned, in responding to the Chair's question, you're at breaking point. Those are very serious words, because the taxi drivers are in public service, and you know your taxis are going for carbon testing twice a year—'plating', you call it. 

Yes, that's right. 

So, where is your thinking on this?

Okay. I will try to respond. Basically, this is a report on the number of taxi licence holders with Cardiff addresses who applied to Newport City Council. It has risen more than 500 per cent because it's a lot less rigorous and the fitness criteria are a lot lower to get a licence in Newport than in Cardiff. What they do, these drivers, they live in Cardiff but they get licences in Newport and work predominantly in Cardiff. 

So, there is no uniformity in the test.

No, there are no regulations to stop them from doing this. There's nothing to stop this from happening. 

So, you are telling us that there are different rules between the councils in Newport and Cardiff. 

Sorry?

The rules are different in Cardiff and Newport. 

Yes, they are. Not only Newport, but Rhondda Cynon Taf, Caerphilly—they're all working in Cardiff and there is congestion. And our income has just dropped. I'll give you an example of what's going on—

I don't want to go too far down this line, because we're probably straying off the subject for today. Not that it's not relevant, it's that we want to—

It's all linked together. 

Yes, I appreciate that. 

Thank you, Chair. I'm coming to the questions. My question is on the Welsh Government's decarbonisation proposal for the bus industry and more detail on that. Can the CPT elaborate on the main barriers to the decarbonisation of the Welsh bus industry, including the infrastructure and other upfront costs identified in this paper?

Christine, I think that's one for you. 

For me, or for CPT?

That's for Morgan, sorry. I'm getting our witnesses mixed up. Sorry. My apologies. 

I think, with the bus industry, the main barrier to the decarbonisation of vehicles is the cost of the vehicles. There's a significant differential between the cost of a Euro 6 engine diesel bus to that of an electric or biogas vehicle. In some instances, it's more than 100 per cent more just for the vehicle. What also then comes with that is the infrastructure required for those ultra low and zero-emission buses. For example, with electric vehicles, you are having to pay costs to the power operators to provide that connection to give you enough power to charge your vehicles overnight. With things like hydrogen and biogas, you're having to pay significant infrastructure costs for keeping that onsite and the delivery of those materials to your site as well. That's the main barrier.

In terms of electric vehicles, the barrier for going totally electric is, 'Can the grid cope if, all of a sudden, all the vehicles in Wales were electric?' One size doesn't fit all for the whole of Wales, so it's not likely that everybody will decide to go to electric vehicles, but can the power companies cope with that extra demand at night, when predominantly those electric vehicles will get charged? Will there be any issues on their side? But also, there are the issues with that technology—how long vehicles can operate on one tank of biogas or hydrogen, how the vehicles will fit in that operation. So, for example, for electric vehicles, are you having to bring vehicles back to depot to charge, or is there a way of having on-street infrastructure as well? They come with very significant costs.  

My question is mainly on the buses. What action is the bus industry taking to decarbonise, and what should the Government's role be in it? 

So, at the moment, the bus industry in Wales is in the latest round of the Department for Transport's ultra low emission bus fund. There have been three successful bids in Wales, including Newport Transport, Cardiff Bus and Stagecoach. So, the bus industry is tapping into that resource of funding to try and lower the capital cost for infrastructure and buses for that.

From an industry point of view, what Government should be doing is assisting operators with that differential in cost between a purchase of a diesel bus and an ultra low emission bus, and also some assistance with the infrastructure, because the infrastructure is a large proportion of the cost. There are items in England—there are Better Bus Areas, green bus funding that has been available for a few years that hasn't been available in Wales. And once the vehicles have been purchased, there needs to be some incentive to operators to buy those electric vehicles. For example, in Scotland, on their bus services support grant, or their equivalent of the bus services operators grant, they are given an extra 1p per kilometre on that grant for an electric vehicle or a low emission or ultra low emission vehicle. So, there needs to be that incentivisation from Government to operate this, to say, 'We can help you do this, we can help you deal with the capital costs, as an ongoing incentivisation of keeping those vehicles on the road'.  

Okay. Thank you. The CPT comments that the future of urban road transport lies with ultra low and zero-carbon emission vehicles. What particular challenges does a move to zero-emission rural bus services present, and how should these be addressed?

The difficulty with rural bus services is that Wales has a significant reliance on some very small operators in those rural areas to provide local bus services. The nature of the rural operation is that there is a lot of what we call in the industry 'positioning mileage', from depot to the start of the service, so predominantly rural operators do a lot more mileage. So, they do a lot more operation of mileage, which means, can some of those technologies cope with that requirement at the moment? But also, if you are a rural operator at a depot that is significantly rural, there will be some barriers in getting the infrastructure to those smaller operators that are in rural areas. Also, will operators that might only have five or six vehicles in their fleet be able to support and fund the infrastructure required to move their fleet onto ultra low emission or zero-emission vehicles? 

Okay. And, typically, buses have a life of at least 15 years, raising questions about the implications of a target of zero emissions by 2028. What challenges does this raise and how can those be managed? For example, the Green Alliance told the committee that retrofitting diesel vehicles may be an option in some cases.

Yes, a typical lifespan of a vehicle from purchase is somewhere between 12 and 15 years, from point of purchase to when an operator would think about replacing that vehicle. Yes, there are opportunities for retrofitting older vehicles with technology that makes their carbon footprint lower, so technology that will help with emissions that can bring a Euro 3 standard engine up to a Euro 5 or a Euro 6 standard. As I said before, a Euro 5 engine vehicle actually produces a lot fewer nitrogen oxides than a Euro 6 car. The retrofitting can be done.

There are some barriers to that regarding the age of the vehicle, the type of vehicle, the engine, but it is possible to do that. And if we talk about retrofitting and making older vehicles cleaner, that will help allow the diesel buses to utilise their full lifespan. Because we don't want to be in a position where, to hit that target of 2028, we are scrapping eight-year-old vehicles to try and maintain the zero emission or the ultra low emission standards. We want to see those vehicles see their whole lifespan through in the cleanest way possible. So, yes, it is possible to retrofit those. 

Thank you. My final question: what are the implications for decarbonisation of the Welsh Government's plans to legislate for bus services, including the introduction of franchise powers?

From an industry point of view, we believe that a partnership approach between national Government, local government and operators can achieve a lot more than maybe franchising can. Franchising comes at a significant cost to the Government, and also by franchising the bus industry in Wales you don't remove the problems that operators already have now, including congestion, including funding, including the on-street infrastructure in some areas and things like that. So, by franchising, yes, you franchise, but you still have to address the same problems as well.

We believe that operators, through their range of different experiences and different networks, can provide a far more achievable option for the Welsh Government to achieve their goals through partnership, rather than through franchising. CPT is actually producing a document called 'Moving Forward Together', which will outline some of the industry's abilities and, if working in a partnership approach with local and national Government, what can be achieved together. That will be ready around Christmas this year, so we're happy to share that document once it's been produced.

Yes, please do, thank you. Joyce wanted to come in. 

Yes, two short questions. We've had evidence saying that short franchises—because franchising already happens in the bus industry by another name—there's an issue about those franchises being very short and that they might not incentivise people to move along with us. And that's particularly common in the bus and the rail—you're buses, so I'll leave the rail to someone else.

The other question I wanted to ask, so I'll ask both, you talk about infrastructure and connection to the grid, and you're absolutely right. Would it be useful or have you considered bus depots having some assistance to put solar panels on their roofs, or wherever it might be appropriate, so that they could use that technology, which doesn't need grid connections, to charge their vehicles overnight?

It's possible for solar to assist at the moment with the charging of the vehicles. I can only speak on this point from a Newport Transport point of view. Part of our solution for our electric vehicles is to use solar panels and to use batteries on site to try and combat that grid connection. However, we'd require a vast number of solar panels. Basically, we'd need a solar farm if all our 100 vehicles were then to go to electric and utilise solar energy exclusively. That solar can help, but it needs to be fed both ways—there needs to be some from the grid and some from solar and some renewable energies.

Sorry, what was the—?

Franchising—short contracts in other words. Is that a problem in terms of all the things you've talked about and the delivery that we're hoping to achieve?

The thing with the franchising model is that if you have a franchising model that has a contract for five years and has a basket of routes that you've made electric, for example, what happens to that in five years' time when that contract is won by a different operator? What happens to those electric vehicles? It's not very easy to move infrastructure from one depot to another depot when somebody else has won that contract to provide that. So, there are some limitations if you go through a franchising model as to how that would work to ensure that all of Wales was fully decarbonised. 

So, could I ask a follow-up question? Is that a realistic barrier? If we've gone ahead with this, all the buses would be electric, as they are all mostly diesel now. So, I just want to understand the difference in what you're saying between, if you don't have the contract in five years' time but you've got the stock, so to speak, that's transferable.

So, from a franchising point of view, the industry believes that we can help you achieve the goals that you've already set out. With franchising, as I said before, you franchise the bus industry in Wales and you're still left with the issues that you have to address anyway—the things like congestion, the things like on-street infrastructure, bus stops, and things like that. All of these are barriers to passengers now. So, by franchising, you don't remove those issues.

Specifically on the electrical issues is that, say if we used Powys for an example at the moment, most if not all of Powys's services in Powys are tendered services and contracted. The issue you get is that, as an operator, I've tendered for a basket of routes and the requirement is that they need to be electric vehicles, so I need to have electric infrastructure at my depot. I've paid for that or contributed to that. But there is a chance after that five-year window that I will lose the contract. So, I'm left with infrastructure that now I can no longer use, and that becomes a significant barrier of, 'Why would you risk millions of pounds of infrastructure in your depot to tender for some services that might not be yours after five years?'

Okay. Fine. Thank you.

Vikki Howells.

Thank you, Chair. I've got some questions around community transport.

For you, definitely, Christine.

You did say earlier, Christine, that there are some particular challenges around how the sector will fund decarbonisation. I wanted to start with that, really, in looking at what the particular challenges are for the community transport sector vis-à-vis other sectors. So, if you could maybe expand on the points you raised at the start and anything else that you think that we should be aware of.

Okay, certainly. The cost is prohibitive. The cost of an electric minibus, you're looking at three or four times the amount that it costs for a diesel minibus right now. A diesel would be about £40,000, so you're looking at £120,000 to £140,000 for an electric minibus. There are also issues around the time it takes for the vehicle to be manufactured and the demand for electric minibuses. So, that is not happening quickly and there's a lot more development and innovation to be done by manufacturers before we get to a point where that's really a feasible option and those prices come down.

The lack of charging infrastructure, especially in rural communities, and no commercial market to be able to drive that in those communities. So, that's something that needs to be addressed. We see that it's particularly holding back organisations from developing community transport schemes focusing on electric vehicles, particularly those who want to set up new community transport schemes that don't have the infrastructure in place to be able to do that with electric. They would need to have quick access to technical knowledge and practical support to make sure they're installing the right charging points. 

We've also seen a link between the development of community energy schemes and community transport, which was alluded to then around solar energy and buses. We have seen some positive developments on that, either community energy schemes thinking about how they can provide transport or community transport thinking about how they can partner up with community energy to be able to deliver. There's also been funding accessed through windfarm trusts, for example, to be able to provide electric cars in the community for a range of different uses.

The batteries at the minute don't have a good enough range for rural routes. We also agree, as Morgan has said, that, actually, perhaps one of the solutions is around retrofitting rather than converting the fleet to electric, and we're supporting members to look at the wide range of different ways that they can reduce carbon, rather than switching completely to electric. And then, of course, there's the cost of maintaining electric vehicles and a lack of service centres. We would also argue that there is quite a significant carbon footprint around developing electric vehicles and ensuring—you know, what is the impact of developing those batteries? How are those batteries disposed of? There's quite a wide range of things to think about around electric vehicles.

Definitely. And you mentioned there the potential partnership between community energy and community transport, how do you think that that would work in practice and what kind of steps do we need to take to actually progress that?

We have some fantastic examples, I'm pleased to say, that have been developed through the Connecting Communities in Wales project, which has been funded for a five-year period by Welsh Government and the European Union. So, some of the things that have managed to be developed as a result of that are things like projects taken forward by Ynni Ogwen in Bethesda, working with community energy—well, that is a community energy company and they have secured funding to take forward a wheelchair-accessible community car scheme, an electric minibus and also, interestingly, a fleet of electric bikes to assist commuting to work along an established cycle track between Bethesda and Bangor.

There's another example with the Brechfa windfarm trust and Dolen Teifi, which operates in south-west Wales. They've had funding for an electric car, which they are using to develop a community car club, a community car initiative and a dial-a-ride pilot with that car as well. As we've mentioned in our paper, we are having more success bringing in electric cars, because it's quicker, easier, cheaper to do that right now, and that kind of partnership opportunity between community transport and community energy is providing a really useful solution. So, I think what needs to happen is greater exploration of what opportunities there could be and promotion of what's happening already and what more could be done around that.

And you mentioned the cars there as well. Is that a potential perverse incentive for community transport to be switching to multiple cars rather than minibuses, or is that something that you see that sits fairly comfortably within the strategy? What are your views on that?

That is something that we've noticed. As I said, it's quicker, cheaper, easier to bring in cars than it is to bring in minibuses right now. So, where there have been electric vehicle projects, it has been focused on cars rather than minibuses. We have been looking for ways to bring some minibuses into the community transport fleet in Wales and it's a lot more difficult to do that. Hopefully, we will see one at least, but more time is needed for that technology to be developed. And also, there needs to be support for the sector to make the transition.

So, what funds are available at the minute generally require—I haven't seen any yet that would 100 per cent fund an electric vehicle for community transport. They require some sort of financial contribution from the operator, and community transport operators are not in a position to do that, because the requirements of the permits mean that they cannot make a profit, they cannot be seen to be commercial and, therefore, they're not able to build up the funds to invest. So, even when some of the funds require funding—you know, they're underwritten, but they have to put up some upfront costs—community transport are not in a position to be able to do that, so the funding needs to be 100 per cent to be able to allow them to purchase things like electric minibuses.

Thank you. I think I know your answer to this question, but I can't put words into your mouth, so I need to ask you anyway: does Welsh Government policy and that of local authorities sufficiently reflect the specific needs of the community transport sector in terms of decarbonisation? How do you think the approach could be improved?

I would say 'not at all' right now. I think the approach could be improved by looking at what has happened elsewhere and learning from those mistakes, and talking to the sector as well, of course, and recognising that there aren't funds in the sector to be able to make contributions in the way that they might think is reasonable for a private bus company, for example. There have been other things—there's been a minibus fund for England and Scotland; there hasn't been such an opportunity in Wales. In Scotland there was a retrofit fund for vehicles, but because of a lack of engagement with the community transport sector, it was developed in a way that community transport couldn't bid into it. It was tied into the low-emission zones for Scotland. So, yes—good idea, good policy, but the Government really needs to be speaking to the sector to make sure the initiatives they take forward are going to be inclusive and will work for community transport operators.

And would you say, then, the Welsh Government shouldn't just dismiss a project like that that hasn't worked elsewhere in the UK? They need to dig deep to find out why it didn't work, and how it could then be adapted.

Yes, I think they're good projects, they're good schemes, and certainly the minibus scheme from England and Scotland has been worth while, and a retrofit scheme for Wales would be worth while, but making sure—speaking to us to ensure that it will work for community transport and they can have those opportunities for those contracts.

I think I also want to make the point that the low-carbon strategy for transport is focusing on changing those public transport vehicles. Actually, I think there's something in the focus on modal shift—getting people out of those single-occupancy cars onto a different mode of transport first, and reducing carbon in that way, and then investing in the fleet, more targeted, more quickly, to be able to change those vehicles, because, of course, by facilitating group travel and reducing the number of cars on the road, that has a significant impact on carbon emissions as well.

Okay, thank you.

Thank you. Mohammed, in the move to ultra low or zero-emission vehicles, there will be opportunities and there will be challenges, so what are those opportunities and challenges?

I think the main challenge is cost, and also the legislation is not up to date, and we can't keep up with the competition. The professor from the report highlighted a few things. If I could just quickly read this out, it says:

'Central government and local regulators must acknowledge that new technology has fundamentally changed the market, and act if the two-tier system is to remain viable. The competition between taxis and private hire vehicles has increased'.

So, what he's trying to say is that these things need to be acknowledged by the regulators in order to bring us up to date with the current situation. What's happening now is, because of all these things that are going on, we're going backwards. Our income has dropped. Drivers who invested £17,000 to £20,000 three years ago are selling their business now for £7,000 to £10,000, so they're making a loss, and that is the current market value. Until those reforms are done, which we desperately need, we can't keep up with this decarbonisation. Obviously we support decarbonising and zero emissions, because it's obviously better for our health and the environment, but in order to do that, those reforms need to take place.

And what are those reforms that you want to see?

Well, we need to see the Government tackle cross-border working as well as national minimum—

I suppose I was thinking specifically—as you've mentioned, you support that decarbonisation. That's what you want to see as an industry as well. So, what can the Government do to support you specifically to help you achieve that?

Well, they need to protect the local business. The problem we are having at the moment is there are too many loopholes in the legislation, and these big corporations are exploiting those weaknesses in the law. Like I said, there is an oversupply of vehicles on the road now, of taxis, and the competition between taxis and private hires from other local authorities has just gone crazy.

So, are you suggesting that, because of that and because of the greater competition, it makes it more difficult for you to achieve and take your own steps towards decarbonisation?

That's right, yes.

To decarbonise your own industry. 

That's correct.

Right. So, what can the Government specifically do to address that?

Well, No. 1, they should implement this recommendation by Professor Abdel-Haq of the task and finish group. We support this recommendation and it deals with all the issues that we are facing. And I think the White Paper took some parts of it and it was very successful in that good results came out of it, but it didn't go far enough to address the whole issue, especially around crossing borders, and then you've got national minimum standards—

So, is one way to address this, I'm just wondering, through the licensing requirements? Because if there's, as you say, too much competition or there's concern, can this be addressed through licensing requirements, to help to get to that point?

I think it's more to do with the legislation, the law itself, which needs to be reformed. The whole industry needs reforming. I think this is something on the table. The transport Minister came out with the White Paper, which didn't go far enough to address these issues, and he had to pull it back. We just have to wait and see what comes out in the next White Paper. And I think it's something that needs urgent attention.

Is there anything that you think the industry can do, yourself, outside Government intervention or support? Is there anything the industry can do themselves to better support getting to that target of zero emissions? What can you do yourselves as an industry?

Well, we can't do anything at the moment, apart from just wait for these reforms to happen. The biggest issue we have is cross-border—where vehicles from other local authorities are working here in Cardiff with lower standards than us. So, that is the biggest issue. That's the key reason why the income has dropped so much.

Okay. Is there anything else that you want to say? I'm just thinking, going back to the central question I asked you about the opportunities and challenges, you've talked a lot about the challenges, but what are the opportunities, do you think, in getting to that zero-emissions target?

At the moment, it looks very unlikely that we'll reach those targets. Obviously, we would like to move on to those targets and be compliant by 2028, but, unfortunately, the way the industry is going, it's going to be very difficult for us to keep up. So, I don't see anything beyond that point, really. Until those things are dealt with, I don't think the taxi industry is going to be viable in the future.

Okay. I understand. Hefin David.

I think an awful lot of what you've said—I've been writing down comments—kind of addresses a lot of the things I wanted to raise, and therefore it's quite difficult to unpick all of that again. But with this concept that is prevalent in a lot of the transport literature of modal shift, is it realistic to think, given all the many constraints you've talked about, that modal shift can be achieved—because it's a demand-side shift as well, isn't it—by Government? Can I put that to you, Christine, first of all?

Yes. I think a lot more can be done to encourage modal shift. Moving slightly off my topic, perhaps, one thing might be segregated cycle lanes. Make it safe for people to cycle and then maybe they would leave the car and would take that option. Bus: rapid transit routes; make the bus quicker than the car. There are lots of things that the Government could do. And so, it is investing in the services, ensuring that there's capacity on the line. The Valleys line is so overcrowded at peak times. There are lots of things the Government could do to create more opportunities.

One of the things I'd say—. I don't know about those other things, which sound like simple solutions, but I know that there isn't a simple solution with immediate capacity on the Valleys lines; it's something that is incredibly difficult to do, and it is being done over a period of time. Are the other things that you suggest as simple as you say? 

I was going to go on to say that a campaign around behaviour change perhaps is needed, because what I notice when speaking to people—individuals at home, they seem to think that if they switch their car to an electric car, they've done their bit, but that doesn't get cars off the road, that doesn't reduce congestion, and it doesn't particularly improve air quality; there are still plenty of issues around that that need to be addressed. So, I think we need a different sort of campaign that encourages individuals to travel by public transport.

We also say that the future is demand-responsive. What we hear about transport innovation for the future we say community transport is doing today—offering flexible, door-to-door, demand-responsive group travel. I think we need to think about transport differently. We need to think about what people want, where they want to go, how they need to get there, and really do something to encourage modal shift, because we talk about it a lot, but I'm not sure the actions have really been taken to make it happen.

Okay. I'll move on to the other two. We've been talking about changing people's behaviours; we've been talking about cultural change as well. And one of the things that I think it was, Morgan, you said—we need to have realistic goals, and if the goals aren't realistic, it won't be achieved. On that point, is it really realistic to expect people to engage in such a massive cultural change in a short period of time?

I think it goes back to this modal shift: we have to make public transport more attractive to have any chance for people to make that choice. From a bus point of view, we could decarbonise the entire fleet in Wales and make them all electronic or zero emission, however we'd still have the same issue that that bus is stuck in the same traffic as it would be if it was a diesel bus. So, we need to focus on journey times. We need to focus other areas of other industries—for example, urban planning. When there's an urban plan being undertaken, public transport needs to be at the heart of that, of how to incentivise it, not de-incentivise public transport, but how to incentivise it. If there's a residential development, the bus service for that residential development needs to be there when the first person moves into that residential area, so that they can see the bus is already there and not be added on after. And the same with areas of employment. If an employment park is built, get the bus service there immediately—

If the bus service wants to go there—if there's any profit in them being there. 

The issue becomes that if you've got an area of employment and it opens up piecemeal, what happens is that if the bus isn't at the heart of how you can operate around that area, people will find alternative ways of travelling because the bus service is not there at the beginning. If you're moving into a housing estate where the nearest bus stop is a mile's walk away, people will automatically think, 'Well, actually, I'll use the car', whereas if the bus stop is directly on the street corner of that new development, people are more aware about their carbon footprint, and if people think, 'I can make a zero-emission journey to work', they will make that journey.

Do you think Welsh Government policy has moved on since the 'Taming the traffic' report in 2017? Do you think they're taking this challenge on, and other levels of government?

I think there could be a lot more done on that aspect from a national and a local point of view, whether that be priority for bus services in the city centre, looking at car usage in the city centre, how that affects bus services and public transport around the city centre. So, I wouldn't say if it's changed or not, I just think there is a lot more that was identified in that plan that can be done.

Okay, and I think you've outlined those in your answers. Christine, can I come back to you? I just want to ask Mohammed Abdul Hie if he can just give us his view, and then we'll come back to you after that.

Sorry, what was the question?

Specifically about modal shift. Do you see public policy enabling—? Can Government policy change the way people behave?

What the Government has tried to do for our industry, they were providing some grants to make that switch, so some sort of incentive. So, I think the grant that was proposed was £7,500 to switch to the electric vehicles. If you compare that with the price of a brand-new electric vehicle, which is about £60,000, the £7,000 doesn't make much of a difference. So, I think those incentives have got to be realistic, especially when our income has dropped by so much. I don't think that switch makes practical sense. 

Two of the things that jumped out for me was the fact that Morgan said that there is a lot of funding needed to assist this, but you also mentioned the issues of poverty amongst the people you represent, which is a huge barrier to the industry developing. Okay, because I've got limited time, I'll move back to Christine—you wanted to say something—then I've got one more question.

Yes, I just wanted to support Morgan's point around planning access from the beginning. I think we need to have access from the outset so that, when new developments are planned, there's been consideration given in the early stages about how people get there. We're seeing the development of well-being hubs, GP surgeries, hospitals, schools, all being planned without any thought for how people can get there. They're not on a bus route, and then what happens is they turn to the community transport sector to find a transport solution for that, and actually it needs to be considered in the beginning. 

One of the things you've also said is that there is nothing in the 'Prosperity for All' document about innovative models of transport delivery. 

Yes, it talks about what we have already—bus. It does talk about car clubs, and I think more work needs to be done on that. What is transport for the future? What does it look like? As I've said, we believe that, what transport will look like tomorrow, community transport is doing today. So, what can be learnt from the community transport sector? How can we empower communities to have some of their own things? So, with car clubs, instead of looking to the private sector, how can we support communities to set up their own car clubs? How can we have community cars that people can access if they need a private individual car journey because at that point in time the bus won't help? Also, I just wanted to again agree with Morgan about the incentivisation of public transport. I think there are lots of opportunities around that so that people don't need to rely on their own private vehicles. 

My last question, Chair. The massive problem here is that, whatever Government does and whatever you do, people love their cars, and you can throw as much money at them for public transport as you want, but car ownership in the UK is almost like gun ownership in America. It just is a massive cultural shift to make happen. And whatever Government does, it can often just be marginal. I'm playing devil's advocate with that, by the way; it's not necessarily my belief.

I think we need to disincentivise car use. If it was easier, quicker, cheaper to travel a different way, then people would do it. At the minute, we don't have the investment that is needed in public transport and therefore we don't have the quality and we don't have the service that we need. 

Disincentivising in order to achieve modal shift—you're talking about punishing people for using their cars in some ways—

No, we're talking about making it more attractive to use other forms of transport. 

So, when you say 'disincentivise', you wouldn't actually be saying that we should be introducing measures that make it—

No, some people need to use their car, but perhaps we could have, let's say, 30 per cent of people not travelling because actually they don't need to on that day—thinking about how people are working, and maybe they could work differently. We could perhaps have 30 per cent of people who are encouraged and incentivised to use public transport, because we've got a really good system and service that's affordable, accessible and efficient and makes sense for people to use, and then those people who need to drive—there's space on the roads for them to do that. 

Okay, and I think I should add the caveat that that wasn't necessarily my view, but I was testing the limits of the ideas that you presented to us today. Thank you.

Joyce Watson.

I want to talk about money, because we've mentioned money this morning. We've skated around it but, ultimately, the question is: who should fund? If we've got a target of 2028, it's short. You've all said that. It's costly. You've all said that. So, who should fund the decarbonisation of transport, and have you got any examples of best practice where some of that might have already been taking place?

From a bus industry point of view, for example, the ultra low emission bus funding from the DfT was that operators had to match some funding. It was a joint partnership approach, where operators would put some investment in to receive funding to bridge that gap. With the decarbonisation of transport, if you're talking about physically buying vehicles and the infrastructure, that has to be done in partnership, because, for a lot of operators in Wales, that extra cost for the infrastructure and the additional cost of the vehicle is just out of reach without some funding to start that ball rolling. Once the infrastructure is there, which is the largest cost, operators would be more inclined then to fully utilise that infrastructure by keeping that ongoing replacement of vehicles to ultra low or zero-emission vehicles, moving forward.

But, again, the issue of decarbonisation is not just those zero-emission buses; it's trying to create that modal shift. So, it's the reassignment of road space, using motorway hard shoulders, identifying pinch points on bus networks for out-of-town and cities of where a small bit of priority might make a great deal of difference to the bus journey time for end to end to make it more attractive to those customers. That's where partnership comes in. If Government are providing along this corridor, for example, a bus rapid transport between two urban centres, then it's only right for bus operators to ensure a certain quality of service goes on that, with this type of vehicle, with this frequency, with these standards. That's where the partnership comes in.

As CPT, we're not advocating that Government should carte blanche come in and pay for all the infrastructure and pay for the vehicles—there has to be a partnership and a joined-up approach, and that will depend on the different natures of people's networks across Wales. We've got a very rural aspect to our bus network, and one size doesn't fit all. So, electrified bus rapid transport might work in one area, but a biogas station in a rural area might work as a different alternative. So, there has to be that partnership approach.

Okay, so we've talked about partnerships and funding, and all the rest of it. Currently, are any of you—because it's a question to all of you—accessing any funding whatsoever from Government or other sources to help make this transition?

Who would like to answer that? Do you want to come in as well, Mohammed? Christine first and then Mohammed.

CTA is in receipt at the minute of funds from the Welsh Government and European Union rural communities rural development programme funding. So, that allows us to work with community transport operators to develop bids for new projects and, obviously, low carbon is quite a big piece of that work. We are able to support them to bid in for further funding through the same stream, but also we're working with them to access other grants that can help them make the same change. So, windfarm trusts, the Big Lottery, other charitable trusts—a wide range of different opportunities, and that's been very successful.

There are some issues around there being certain organisations who can't bid into that sort of funding and who might be interested to do something of their own. So, I think there's an opportunity for a public funding stream to be able to support community innovation around transport, if you like—so, organisations like a community council, perhaps. It might be in their interest to have a community car based locally, and they may not be eligible for charitable grants. So, I think there needs to be public funding available to support some of these things.

So, as I said earlier, I think there is funding available, but, at this current moment, because of how expensive the technology is to make that switch, it's not a viable option. So, no taxi drivers, at the moment, have gone for this funding at all. So, they haven't made use of it because it's not a viable option for them at the moment.

So, from a bus industry point of view, three operators in Wales were successful in bidding for funding from the DfT as part of that ultra low emission bus fund: Newport Transport, Cardiff Bus and Stagecoach, where I think it will probably be around 80 vehicles that will be ultra low or zero-emission by the time that project's finished.

From a Newport Transport point of view, we've got 14 electric vehicles coming at the end of March, where seven of those were funded by the DfT funding.

We've heard about innovative sources of private sector funding as well as—. We have focused on Government, and our note to the private sector, and there was an example of pay-as-you-save for clean transport. Are you aware of any of that funding available in Wales, any of you? No. Okay. So, if that is the case, do you think there's a role for Government, perhaps, to help make people more aware of perhaps what is out there? Or is it down to—? We're probably talking—. Bus companies will have better means, so I'm talking principally to the other two of you. Do you think we could help, or do you even need any help, in helping to see what is available out there?

I suppose are you aware of the funding that is available—are your sectors aware—of all the funding that is available, perhaps, is the question.

I think that, at the CTA, we have a pretty good grasp on what funding is available and what community transport can bid into and what they can't, and we're doing a good job of supporting our members to be able to access those funds. I think the Welsh Government needs to be clearer in how its strategy applies to community transport and to what extent, and work with us to be able to take our members on that journey, making sure that, where there are no other funds available, funding is provided to help those operators make the change they need.

If I further talk about pay-as-you-save, we were told that electric companies invest in batteries and charging infrastructure, and particularly for the needs of buses, upfront, and then they allow that bus company to spread the cost more evenly rather than—. Because you have all mentioned, and we understand it fully, that the need for huge outlay initially is going to be too big an ask in some cases.

So, from a Newport Transport point of view, for the electric buses that are coming in, we've entered into a service level agreement with an energy company called Zenobe, which basically puts those bus batteries on a leasing arrangement. So, it reduces the capital cost, to a certain extent, to try and make it more affordable for us to continue with that. From an electric bus point of view, that also helps to secure the degradation of batteries. You know, batteries will degrade over time, buses will be able to do less mileage, so a leasing agreement helps us put that risk over a 15-year period that will include one change of battery. So, there are companies out there offering those incentives, but you've still got to remember that the cost of the infrastructure is still there. So, that's one part of it; there are other costs on top as well.

Okay. And it's not available—? Would it be of any use at all, that sort of system, to community transport?

I don't think that that is the most obvious approach that we might look at.

Okay. And, again, I know what you're going to say—until you sort out the issues that you already have.

Yes. So, once the refunds are made and we're ready to make that switch to electric vehicles, I think having a grant in place—also 0 per cent interest finance available for drivers, because a lot of drivers are from the Muslim background, and they don't deal with interest-based loans, so that could be a hindrance to making that switch—. So, if you're talking about £60,000, I don't think drivers have that kind of money lying around, so the only option is to get a loan. But the hindrance is the interest-based loans. So, yes.

Okay. And is there a role here for the Development Bank of Wales, do you think? Because, ultimately, it supports businesses. We're trying to build a foundational economy, so we're trying to keep money in Wales, particularly if it's delivering for Wales and providing jobs. So, do you think that that would help?

Yes, as far as the bus industry are concerned, anything that will help assist operators to make that jump easier, and that capital cost for infrastructure and vehicles more achievable for operators large and small, then—yes, there is a role to be played by the Development Bank of Wales. It would be up to them to decide in what terms they could help, but any assistance would be greatly appreciated by, I think, all the industries.

Yes. Okay. That's fine.

Mohammed, I'm just picking up on your point about the taxi drivers will largely be private, individual business owners. How do most fund their businesses? Is it through the banks, is it through private funding?

So, there are two ways of doing it: you could either own the licence, the business, or you could rent from other companies. So, you could do it on a rental basis—so you pay weekly to operate your vehicle—or you could own your vehicle. So, making that switch, there are a lot of factors in place, like I mentioned. If they've got to make that switch, they need to get a loan or something like this, but then the loans need to be interest free in order to encourage them to take out that loan.

I'm just thinking about what the view is of the banks, those who make investment into businesses, in terms of, if they see a business that's moving towards a model of zero emissions, and a move in that direction, are they more sympathetic or less sympathetic, or—? Do we need to make recommendations to—?

If they've got to show their accounts to the bank and they're on income support, the banks will be reluctant to give them money, because they can't afford—. So, they'll have to provide good accounts in order to get this kind of good result.

This is a challenge. Because what you're saying is that the grant funding isn't sufficient to be able to make that difference. But also, if there's not the income there from the banks—

Yes, it's not a viable option. The banks won't—

—then it's not viable at all. Yes. Sorry, Oscar had a question on this point as well, did you?

Yes. Thank you very much, Chair. The taxi business is a very special example. In Newport currently, Chair, there are more than 1,000 taxi drivers. I don't know what's the number in Cardiff. Basically, it may be double there, I suppose.

Well, the Hackney carriages in Cardiff—

Altogether—taxis.

Altogether, yes, about 2,000—just over 2,000 together.

What it is, Chair—in London, taxis and London buses are iconic things in the world, you know. People recognise London with this, like London Bridge or Nelson tower, taxis and London buses, and they're trying to do it. The power's in the hand of the Mayor of London to reduce the emissions, carbon emissions, and they're giving great incentives in various areas. And the taxi, when you hire from these companies, they give you, on a very lower level—instalments.

Yes. So, your question is: is there a model elsewhere in the UK or in London that's being brought forward that can be adopted here to help to achieve what we want to achieve in Wales?

Yes.

So, you're saying get grants from outside, is it? Is that what you mean?

Or is there a model—? Are you aware of any other models across the country or elsewhere that could be brought forward in Wales to help you achieve that ambition of getting to zero emissions?

No. I think this is still early stages to look at other models, because they're only starting to adopt this. And I know the only vehicles with wheelchair access in London are the London Electric Vehicle Company vehicles, and they are going on a lease basis. But bringing that to Cardiff, where our income is completely different from their income in London—. So, they're the only city we could compare with at the moment. 

I understand, yes. Oscar, you had a real quick question.

It's a very quick one, Chair. Welsh Government is putting this timeline to 2028. Is it achievable?

I think we started off on that question. [Laughter.]

The thing is—

We started with that question, so I'll ask you to incorporate that in any final comments, if you want to add to what you said at the beginning. Are there any final comments that you want to make that perhaps you've not been able to say through the questions? Any final comments you want to make? Mohammed.

Yes. So, it would be achievable if we could put this recommendation through by Professor Mohammed Abdel-Haq, because it deals with all the issues we have and it gives the Government guidelines on how to achieve those things. So, once this reform is done, it would be achievable for us.

Okay. Morgan.

The 2028 deadline could be part achieved through partnership with operators. However, it is now nearly 2020, it is in eight years' time. Something really has to start moving now if we are to have any way of reaching that target in 2028. I think that maybe a whole zero emission for the bus network by 2028 may not be achievable in that time. A large proportion will be, and it's about making the bits that we can't make zero emission by 2028 as clean as possible.

Okay. Final comment, Christine.

I think the Welsh Government need to work with partners across the sector to develop a plan for achieving by 2028, if that is, indeed, realistic and achievable.

Thank you. Listen, thank you all for your time today. You will be sent the transcript of the proceedings, so have a look through that, and, if there's anything you want to add to what you said, then you'd be very welcome to do so in order to help our work. So, thank you very much for your time this morning.

We'll take a 10-minute break, back just before 11 o'clock.

Welcome back to committee, and this is our third evidence session in our inquiry into decarbonisation of transport. This particular session is on the theme of freight transport, so I would like to welcome our witnesses this morning, who are helping us with our piece of work. I'd be very grateful if you could just introduce yourselves for the public record in the first instance, starting from my left.

Okay. I'm Professor Andrew Potter. I'm a professor in logistics and transport at Cardiff Business School. 

I'm Robert Mason. I'm professor in logistics, also at Cardiff Business School, and the head of our logistics and operations management section there. 

I'm Sally Gilson. I'm head of skills and Welsh policy at the Freight Transport Association. 

Thank you for being with us and introducing yourselves. Is the freight sector a significant carbon emitter compared to other forms of transport in Wales?

I'll take that one. Yes. If you look at the statistics in the 'Decarbonising Wales' report, freight transport seems to come up between 30 per cent and 40 per cent. It's difficult to put an exact number on it because the stats group together passenger and freight transport in a number of the categories. So, for instance, you've got heavy goods vehicles and buses as a category, and you can't disaggregate the two. But if you look at the data and make some educated assumptions around where you might see passenger transport and freight transport, I'd say it comes in somewhere between 30 per cent and 40 per cent—probably not at the 30 per cent, more towards the 40 per cent, of carbon emissions, just for the transport sector. That's comparable, to some extent, in terms of split, to other parts of the UK and other countries in the world, so it's not like we're massively out of line with anywhere in either a positive or a negative way; we're just average. 

I have a couple of points: one is transport, as a percentage of emissions in Wales, is a smaller proportion than you'd see in the UK. That's slightly to do with the transport and the fact that Wales is a more peripheral area of the UK and hence hasn't got, particularly in logistics, as many centralised hubs, but it's more a factor that other areas of the economy are bigger in terms of emitters. So, when you say, 'Is freight transport a significant area?' it gets underplayed a bit, because of the proportion. It looks less, if you like, in that sense. Within all that, the road transport, and particularly HGVs, is one of the key areas. For the UK as a whole, 17 per cent, roughly, of road transport greenhouse gases come from HGVs, and then, on top of that, vans as well have to be added to it. Vans and HGVs combined are about a third, just over a third, of greenhouse gases emissions from transport. So, I think it is a significant area, and it's something that I think, in the reports that have been looked at for decarbonising the Welsh economy, we shouldn't ignore. It is a significant area that needs managing. 

And what are the main challenges in decarbonising freight transport? 

It's famously a very, very difficult area to decarbonise. If you look at the UK, going back to 1990 to now, the UK has reduced its carbon emissions by, I think, 43 per cent—the last figure. Within that though, transport has only reduced by 3 per cent. So, you can see just on those stats, how reluctant to change transport is. And within that, probably freight transport is even harder to do, and it's largely because you either have to reduce the demand for it or you have to be smarter in how you actually conduct it. Reducing demand is very difficult. It's a derived demand from our economy, and also the way things have changed in our economy today with faster supply chains, more compressed just-in-time supply chains, whether that be business customers or individual customers demanding that, we've seen that as a trend for the last 20, 30 years across the economy.

And on top of that, you then say, 'Well, how do you be smarter in terms of doing freight transport?' Well, with HGVs particularly at the moment, there isn't the ability in terms of innovation to move them to be not dependent on fossil fuel. So, that might be in the future, but, at the moment, that isn't changing. So, we can be slightly smarter in fill rates, we can be smarter in driver behaviour, but they're small, if you like, changes, really, compared with what we need to get to in terms of getting that percentage of emissions down. 

Sally, in terms of decarbonising freight transport challenges. 

I broadly agree with what Robert just said. I think it's important just to add the caveat that the number of freight movements has increased. So, it's not that the vehicles are getting more polluting, as they're actually not—they're getting much less polluting—but the numbers have increased, and, as Robert's just touched on, it's the fact that we've all seen the growth of online retail. That's increased the number of vans substantially certainly, but, in general, the number of freight movements has increased over time. 

I think there are a lot of savings that can be made, in terms of cost savings, as well as environmental savings. So, looking at areas where you can do the driver training to try and get more fuel efficiency. But one of the real areas, obviously, that's holding us back is that cost. When you're looking at changing a vehicle to try and choose a less polluting vehicle, there is a significant cost behind that. We're talking about predominantly private companies, and mainly smaller businesses as well. We all think of these huge businesses out there, your likes of Stobarts and your Wincantons, but actually we're made up of many small hauliers who might only have about 10 vehicles. So, investment is a big issue for them. 

Do you think as well that the Welsh Government has got much ability to influence the decarbonisation of freight transport, because they—

I personally think that there is and it does have an influence. I think, though, it needs to be done in partnership with the UK approach, and, at the moment, the European approach as well, so that, if you like, we understand what's at our level of jurisdiction and what's at the UK level and what's at, as I said, the European level. Also, within that, beyond, let's say, the local authority level, whether it be the city councils or regional authorities, they can also play a part, and I think everybody can play a part in that sense. 

So—. Sorry, I interrupted you.

What's important is to understand freight transport and what the demands are from a supply chain perspective—to understand the behaviours and then break them down. It's a very complex area. I've got some figures here. We've got long-haul transport, we've got regional deliveries, construction, urban deliveries, municipal utility usage of freight transport. Those are five main areas. Within that, I think long haul is the area where the biggest emissions are occurring. It's about 44 per cent. So, although it's not the biggest, in terms of vehicles, that's where the biggest emissions are, and it's understanding what could be done with that area. It's also possibly splitting up, given that we could move to more electric or fuel-cell powered vehicles at the lighter end—the van end—what can be done there and possibly to decouple the supply chain, so that when you get to an urban centre, for example, you move from a hub-to-hub HGV vehicle to a more localised vehicle, and that could be more environmentally friendly in terms of carbon emissions and other emissions. So, I think there's a lot that can be done, but I think it needs real engagement and understanding with the users' perspective and the customers' perspective of freight transport to get change happening. 

I have a quick point—

Well, Andrew, I was going to widen my point as well, but if you could address the other question—. Also, is there a barrier for the Welsh Government, in terms of the devolution settlement, about how much influence they can have?  

Okay, in terms of just extending Robert's point briefly, obviously with the light goods vehicles, some of the movements within that will be under the control of local authorities. So, for instance, a lot of the service vans that go around would come under that light goods vehicle category. Again, maybe there are approaches the Welsh Government could take in encouraging the purchase of electric vehicles by local government as a way of starting to bring that through and maybe help them get the infrastructure in place to support other operators too.

In terms of barriers, I think probably I'd say one of the biggest barriers is the fact that a lot of freight does go cross-border. So, whilst part of the movement is in Wales, a significant chunk of it maybe in England or, if it's, say, coming through Holyhead, it's potentially the European land bridge, so it's coming from Ireland through to mainland continental Europe. So, finding where the decision maker is is a real key to this. Often the decisions that are taken about transport in Wales are not by stakeholders who are based in Wales, but are positioned outside. So, the Welsh Government's got to find the right stakeholder within an organisation, and, by that, the one that actually makes the decisions, who then can obviously influence what goes on in Wales, and that's really the challenge—identifying who those decision makers are, because it's often not the logistics provider; it'll be someone else in the supply chain that's doing it. 

Vikki Howells. 

Thank you, Chair. I've got some questions around Welsh Government policy and how effective it is in considering the decarbonisation of freight transport. So, if we start with 'Prosperity for All: A Low Carbon Wales', what would be your views on whether the decarbonisation of freight and logistics is given sufficient priority within that document? 

Obviously, we saw the draft of that in the summer, and I think one of the responses that we wanted to really headline back is that we felt that freight transport wasn't given enough, if you like, space or depth of analysis. And certainly that was at odds with what you would normally see in a government's introspection, in terms of what they thought was possible, in terms of the low-carbon agenda. So, we felt that there was a lot of room for extra analysis and extra thought to go in. Also, though, there's a lot of work that the UK Government, particularly, have done on this area,  and rather than repeat it, to perhaps learn or take from what they've done, and then to mould it to what we need in Wales might also mean that we don't have to reinvent the wheel, if you like. There's a lot that's already been developed and thought about here that we just need to adapt and look at in that report. But I feel that report as a whole underplays what we need to do, first, because of the significance of freight transport, but, secondly, how difficult a nut it is to crack in order to meet the sort of targets we're trying to get to in the next few years. So, yes, I do think it's underplaying it, personally.

Generally speaking, across reports, freight is normally the area that tends to get ignored and, obviously, it's one of the most crucial areas. The one point I would just pick up on is that, at the moment, what we're seeing is many, many different schemes across the UK, which makes it very confusing for businesses to make those buying decisions. So, we need to see some joined-up thinking with Wales, with England, because they're not making a buying decision purely for Wales, and we've just seen in this past week the announcement in Bristol about potentially banning diesel vehicles. We need to ensure that the same is true throughout the whole of the cities, otherwise, you'll end up with lots of different schemes, and you cannot just purchase a vehicle for one city—

I've got some questions around the town centres to link—

Okay, I will hold back.

—in case everybody wants to jump in on that. I will talk about that in a minute. Andrew, anything else to add to that?

I think Robert summed up our main view. Obviously, logistics and freight transport aren't just about movement; they're also about warehouses and stuff as well. So, it does, to some extent, fall into that crack between the economy and the transport side of things. So, we didn't just look at the transport part when looking at the Government document, but we also looked at seeing if it was in the economy side as well, and it is nowhere. So, I think, echoing what Robert said, it's something that has been overlooked, either in terms of warehouse development and the transport that brings, or transport in its own right.

Thank you. So, looking at three other transports policies, then—the Wales transport strategy 2008, the national transport finance plan 2015 and the Wales freight strategy of 2008—how effective do you think those three policies are in supporting decarbonisation of the sector?

I think, if you take the Wales freight strategy, which is probably the most relevant of those to what we're talking about today, it was written in 2008, or it was published, and so it's now 10 years old, and I think it's probably time that we need to look at updating it. As I say, the world has moved on a lot in 10 years, freight transport technology has moved on, and shopping behaviours have changed quite significantly with the growth of things like online shopping. The amount of, say, van traffic back then was a lot less than it is today. So, I think it's really a time to look at going back to that strategy and updating it to reflect the current priorities in Wales, and, obviously, now we've got Transport for Wales, it would seem to be, again, perhaps more of a joined-up body to perhaps give some oversight to that.

Any other comments on that?

Well, I looked back at the 2008 plan for sustainability, and there were three areas: minimising demand for transport; secondly, more sustainable, healthy forms of transport; and thirdly, making maximum use of infrastructure. Whilst they are great goals, they're not quite covering all the potential options that could be looked at today. So, I think it does need refreshing and looking at. Given it was 2008, and we're now in 2019, things have moved on. So, to a large extent, this still does play, but it does need updating and refreshing, if you like, to give us more guidance in this area.

I agree.

Thank you. So, obviously, Bristol has been in the news, but Cardiff Business School has suggested that setting up low-emission zones in town centres could reduce shopping trips, but a perverse outcome of that could be an increase in home deliveries, and that's something, Andrew, that you've alluded to—the increase in that due to online shopping. Obviously, this time of year, leading up to Christmas, is when we see that at its absolute maximum. So, what are your views around the potential for any management of perverse outcomes like that if low-emission zones are to be introduced in some of our town and city centres?

I think, sometimes, you land up—by implementing some of these clean emission zones, you land up, actually, potentially creating further congestion, because you could land up in a situation where, if you are charging vehicles that aren't Euro 6 at £100 a day, then they're just not going to be able to deliver to those cities. So, instead of let's just say a medium-sized lorry that can carry about 10,000 kg, the equivalent of that would be 10 vans. Well, that's not the impact that you want to have. It's actually much better if you've got that one vehicle entering the city centre rather than 10 vans, especially when you look at—. So, at the moment, you've got 36 per cent of the van fleet is Euro 6, and 39 per cent of the HGV fleet is Euro 6. So, clearly, there's going to be a substantial number of vehicles that won't be able to, potentially, deliver in future.

And I think the Bristol proposal is particularly hard because of the proposal of the actual ban. So, at the moment, diesel is the way that we are delivering goods, and it's not going to be able to change that quickly, and the infrastructure alone isn't there to be able to make that change that quickly. But, yes, you could land up with one hand, yes, you might get rid of your larger HGV vans where it's just not viable to deliver, but then you land up with a congestion problem because you've got 10 to 20 extra vans on the road just for that one vehicle.

Chair, to add, I think that, obviously, we're looking at how to decarbonise the economy now, but the reality is, we've got to think in 10, 20 years' time how to decarbonise what the economy will look like at that point. And I think the growth of e-commerce is only just beginning, and we'll be much more mature as an e-commerce-driven society in terms of both business and consumers demanding goods in very short lead times in rapid delivery.

And then there's an issue about where suppliers locate stock in distribution centres. How close to markets they're located, how they can get reliable shipments, becomes very, very important to them—in a cheap way, because it's important that they can compete efficiently. Otherwise, someone will go elsewhere. It's easy for people to shop in one channel rather than another channel if it doesn't meet what they look for. So, we've got to understand it's a very competitive supply chain scenario suppliers are in, but it's changing very fast. We're at the forefront in the world of where things are going in e-commerce, and we need to be able to come up with solutions that meet, if you like, the competitive demands that are there and going to appear in the next 10, 20 years.

I think we've got to be very, very mindful of not creating the wrong behaviour, if you like, from creating emission zones, both in terms of individuals shopping in urban areas, and in terms of goods being delivered to those areas. So, they need to be really thought through before we embark on these things. But, obviously, we've got to be mindful that we want to steer the right behaviour, if you like, for our emissions in terms of carbon, and other emissions for the future as well.

I don't think I've got anything more, particularly, to add to those points.

That's fine. That's fine. Okay. Thank you.

Thank you. Logistics and supply chain factors impact on carbon emissions from freight transport, and, Andrew and Robert, in your paper, you point to the importance of reducing demand for freight transport. What action do you think can be taken in Wales, and by whom, to influence that demand?

I think there are various ways you can try and reduce the demand for transport. So, there are, as I say, the incremental things around trying to get your vehicles as full as you can. There are things around trying to encourage firms to work together. And, again, we've talked a lot about parcels. Well, we all know that different delivery firms will often be following each other up and down the street doing their deliveries, which, for each individually, might look efficient, but, actually, if you could consolidate them you might get even better efficiencies. So, there's also a change in consumer behaviour—so, making customers more aware of what their delivery requirements are. I think we're starting to see a shift in consumers being more environmentally aware, but I still think the lure of free delivery from any online retailer is too much for many people and they're more than happy to take that short delivery. We hear a lot about people, for instance, ordering, say, clothing in lots of different sizes because you never quite know. I think if we can start to change consumer behaviour and consumer requirements, that will have an impact, particularly on the light goods vehicle end. When you get to the more industrial end, as I say, it's about trying to find the decision makers and potentially work with the UK and Government as a whole to try and influence decision making there. It's something that you can do bits of within Wales, and the Welsh Government has done stuff in the past to reduce the carbon that comes out from freight transport, but it does need almost that interface with the UK Government perhaps more effectively than we can sometimes manage.

Given the significance of logistics, how important is an integrated policy approach involving, for example, economic policy and land use spatial planning? Is this integrated approach currently being done effectively, do you think?

I think the integrated approach struggles at the minute, both in passenger and freight transport. We tend to take land use planning separately from transport planning. So, an example that one of my colleagues often throws at me is the new hospital in Cwmbran that's a fantastic facility but has got no public transport links by it at this stage and has had to put new links in to get that there, so it's going to encourage people to use cars from the start. And the same applies to freight. For instance, we've got lots of new housing developments coming, say around Cardiff. They're configured to what people who want to live in the houses want, but, if you've got a shopping centre, you've got that conflict between how you get the freight in efficiently versus what the community might want in terms of an accessible facility. So, we lack that joined-up thinking sometimes between planning and transport, like I say, for both passenger and freight, and you then add in economic strategy as well in terms of which industries to encourage and where to encourage them to, which further adds to that sort of three-way complexity for logistics that you probably get a little bit less of when it comes to passengers.

So, how can that be overcome?

How can it be overcome? Well, I suppose, to some extent, the fact that economy and transport are together within one Government department helps. Obviously, at UK level, they are separate departments and whether they talk to each other is probably one for someone else to particularly comment on. So, having that integrated department is obviously a starting point. I think it's then about trying to lead up this thinking about how you develop these better developments. How do we think about, 'Well, if we're going to, for instance, encourage manufacturing in one location, what's the impact of that going to be on freight? Does the facility have rail connections or is it just going to put more traffic, say, on the M4 corridor?' and try to take a broader perspective when appraising where we might want to encourage development and so on. It's a challenge and it's something I know that, not just in Wales, you'd wrestle with, but you'd wrestle with it in many places, both in the UK and internationally.

And, Sally, I don't know if you want to comment on those two questions, but also in terms of what support you think that the freight industry and logistic businesses need to decarbonise.

Okay. I'll start off with the previous question first. One thing that we've been discussing within our Welsh freight council is actually the possibility of a consolidation centre for Wales. It's not worked particularly well across the rest of the UK, but we've really been looking at the different ways that this could be done to make it more successful. And clearly, obviously, we are just talking about mainly a retail sector environment here, rather than consolidating all of the rest of the freight movements. But, certainly, if you looked across to how the Netherlands, perhaps, set up their consolidation centres, they're quite different, and I think perhaps we've got to start viewing town centres and shopping areas as more of a shop window, so the goods actually aren't delivered there, the goods are actually picked up from the consolidation centre, but that consolidation centre also then provides driver facilities for trucks that are arriving there. That's where the goods are picked up from. Also, it's a fantastic opportunity within the economy as well, in terms of employing people within the centre—

How does that—? Just explain there how that works, so we understand that practically. It sounds interesting, I'm just trying to understand—

So, practically, let's take the example of a telescope shop in the centre of Cardiff—

A telescope—

A telescope shop. [Laughter.]

Always wanted one of them.

I know there's not—. But, practically, that's a very heavy thing that you don't want to go and pick up from the shop anyway. It would suit a central place for you to go and collect that, but you want to go and touch it, feel it, see what it's like. That's how, perhaps, we need to view shopping. If we want to think about things radically, within Wales, you actually see that as a shop window, you go and see one example and then you can go and pick it up from the consolidation centre.

And then you drive to the consolidation centre—

No, no, because that's where the public transport bit can come in to join those two up, but, yes, you're going to have to potentially drive to the consolidation centre if you are, obviously, purchasing a heavy vehicle. But that could be for the whole of the south Wales corridor—

I can hear Joyce muttering it's too heavy to get a telescope on a bus. I think that's what Joyce was saying.

Yes, I am. It's too heavy to—[Inaudible.]—but it's light enough to carry it home on a bus. I'm a bit confused.

No. So, for your heavy vehicle—sorry, for your heavy goods, then you are probably going to be driving to the consolidation centre. But, if you are putting on good enough public transport, then you are still going to be stopping some of those movements, but, more importantly, all of the goods that would normally be delivered to your high street wouldn't be delivered there; they all come into the consolidation centre.

Did you say that this works somewhere else, in another European country?

Certainly the Netherlands have set up consolidation centres like this.

So, does it—? Talk about that, if you know anything about that, so I understand—

I can certainly forward on some studies, because this is something that we are looking at as a group. It's come out of the ideas around trying to cut down on congestion along the M4 corridor, and, clearly, a consolidation centre for south Wales would almost have to serve your Newport, Cardiff and Swansea to make it viable. So, one of the areas we've looked at is exactly how you can then try and stop those movements into your main retail areas.

It sounds really interesting. I just can't see how it works at the moment, but, yes.

Well, that's something that we are currently working on, and I am in discussion at the moment about—

To some extent, though, we've already got that happening. If you look at, say, DPD logistics, they've got a depot in Wentloog. It's tracked hub to hub in terms of big artic vehicles, it's then shipped to vans and then it's going round local areas, and in some ways the—. Those vans potentially could be electric vans. So, they potentially could be very low carbon emissions.

One of the keys, I think, to it is that the more people do engage in e-commerce, the more concentrated deliveries will be in terms of any one location per day. So, you end up—the more it's used, the more, actually, it becomes viable from a carbon emissions perspective and in terms of efficiency and profitability for the companies operating it. So, it doesn't require the individual going to the consolidation centre, I don't think. It, actually, can be delivered to the home and can be done fairly well through a van operation, and, as more and more people use it, it'll become more and more environmentally friendly.

I think the idea that we had behind this was that it would also be your destination for the trucks as well, and set up vital driver facilities as well, which are non-existent across the south Wales corridor.

And things like, say, flowers today. You've got HGVs, they're coming across from Holland to deliver in often village locations with the same HGV. It would make a lot more sense to decouple that at a consolidation centre so that the artic dropped all that off for south Wales in one point and then had local delivery vehicles going to the local areas. You would end up with a much more environmentally friendly—. It would be an extra cost that would have to be borne by the distribution, but, actually, you'd get a better solution, I think, for lots of parties and stakeholders.

Okay, thank you.

There was a second part to your question, wasn't there?

The second part is the support available to you? For example, is financial support going to help the sector?

What you normally see is government announcements for private hire vehicles and for buses. You very rarely see the same thing for freight vehicles.

Is it not available at all?

No. The cost is normally borne by the freight operators, and as I was explaining, certainly with the set-up in Wales—you have much more small to medium-size businesses, and they just can't afford that cost. At the moment, making that switch from Euro 5 to Euro 6 is great enough; to be able to start investing in electric vehicles, especially vans, where they're significantly more expensive—

So, at the moment, there's no financial support, and you think there should be.

Yes, some kind of scrappage incentive.

And what kind of package would you suggest?

I think it really does depend on what kind of vehicle you're looking at. At the moment, there isn't really the infrastructure within Wales to do a mass change-over to a gas-powered vehicle, so you are still predominantly looking at diesel when it comes to your bigger trucks. For vans, as Robert just said, obviously it's a much easier thing to switch to electric, but there is a significant cost there. You've also got to make sure that there is the infrastructure in place to be able to do those recharges. It's fine for the urban environment around Cardiff, but the moment you're heading up into the Valleys, you've got to make sure that there is some kind of fast charge en route.

Okay, thank you. We're running a bit behind time, so I'll ask the other contributors to curtail their questions, if they can. Oscar Asghar.

Thank you very much, Chair. Good morning to you all. My couple of questions are just regarding technological development. How far are electric engines, alternative fuels and improved engine technology likely to offer opportunities to significantly decarbonise each freight mode—air, rail and train, and maritime technology—in Wales, please?

So, if I can ask one of you to address that point.

Okay, I'll have a stab at that. If you take road transport, obviously, electric vans are readily available now on the market, so at the lower end there's a good opportunity to take radical steps, but you need the infrastructure, as Sally said, to support that. With trucks, we are still some way away from having a viable, say, electric truck. The weight of batteries that you'd need to carry around to be able to move freight is such that effectively you could carry a load of batteries, but you wouldn't then be able to carry a load of freight as well, so it defeats the object of having the truck to start with. So, we are some way away from that.

There are other ways in which you can electrify trucks. There have been trials in Germany, using overhead wires. I'm not convinced that's the way to go. It raises all sorts of questions about: if you move out of a lane and pull the wires down, what happens if the wires come down and hit cars? I think it's a nice idea in a self-contained space, but not out on the general highway. So, we are some way away from electric trucks at this stage, even though Tesla have got something going. The technology will get there, but that's in the long term.

If you then look at rail freight, currently all rail in Wales is diesel hauled. There's no obvious quick change to that. We've now obviously got electrification to London, but very few trains from south Wales go up to London, and the problem with any of them is that they don't run just under the electric wires. So, you would need diesel at one or both ends, and the time taken to change a locomotive is such that it's easier just to run diesel all the way. So, again, you need a rolling programme of electrification if you're going to be able to put electric locomotives onto freight. Again, battery isn't a viable technology at this stage because of the weight of batteries required. Obviously, some of the heaviest freight trains in Wales have trailing loads of 3,000 plus tonnes and you haven't got battery-powered locomotives that are able to move that kind of freight, never mind things like leaves on the line, wet rails, and all the other conditions that you get.

Then you come to shipping. Again, sails and solar-powered ships are concepts. Again, they're probably even further away than electric trucks. But the International Maritime Organization is bringing in regulations from 2020 around emissions from vessels—stricter regulations. Shipping companies are struggling to meet those at this stage, but that should hopefully help to reduce the emissions from shipping in the longer term. So, much like in the way the road haulage industry, over the last 20 years, has radically reduced its emissions, similar types of steps are being taken in the shipping industry that, over time, will reduce those emissions as well. Is that enough transport modes?

Yes, thank you.

How far do wider technical developments such as telematics, routing software and the introduction of autonomous vehicles offer opportunities to decarbonise Wales's freight transport and logistics?

Shall I pick this up a little bit? I think there's a great opportunity, in some ways, for improved information and communication technology systems to help the supply chain. To some extent, we've already seen a lot of that happening, though. We have a slogan saying, 'Information for inventory', and in essence, if you think of a supply chain, and if you had to operate one, you'd have inventory in the supply chain to cover just in case things don't go right. What information has enabled—so fast, immediate, reliable information—is being able to substitute, if you like, inventory for information. So, supply chains today have suppressed the amount of inventory they have in them and rely, if you like, on real time, just in time, what are called 'batch size 1 information'. And that has removed a lot of inventory in the supply chain, but it's meant supply chains today are much more compressed and much more, if you like, fast.

Conversely, it's actually meant that shipments required in supply chains are lower volume and more frequent. And that goes against, if you like, trying to fill vehicles up with full amounts and having infrequent deliveries. Having said that, because of the need to retain cost pressures on supply chains, logistics companies come up with solutions. So, things like consolidation centres, the modern way logistics centres are run, where they amalgamate different flows together in order to consolidate those flows so that they can get fuller vehicles.

Telematics also help in terms of potentially highlighting where there are less-than-full vehicles and where there's empty running in vehicles. And I think we're seeing the beginning now of being able to realise, if you like, how to get fuller vehicles from it, but we're still a long way from actually having every vehicle voluming and weighting out in terms of running on the roads. So, there's a lot of potential, still, for that to be realised.

I think, on the other one, in terms of autonomous vehicles: yes, I think it's a little way off and there's a whole spectrum of automation. You could have somebody operating who's got no responsibility for the controls, to somebody who's got some degree, if you like. In terms of whether that realises the decarbonisation agenda, it's debatable to what extent that will fit with that. I think things like platooning, though, is a possibility, where trucks link together so that the vehicle driver in truck 2 or truck 3 is driving autonomously. It slipstreams behind the vehicle in front and, potentially, can lead to more efficient and less carbonised—. But there are big issues around safety and around acceptance of it before it actually gets realised. But I can see in the next 15 or 20 the platooning of vehicles, like road trains, becoming more and more possible.

Okay, thank you. And is Wales currently well placed to benefit from such technologies? What are the main barriers and how should the Welsh Government seek to support the uptake?

That's quite a big question. We're limited for time, but if anybody wants to try to answer that in bullet-point form, I'd be grateful.

Yes. With regard to uptake, which I think you just asked, I think we explained a little bit earlier that, obviously, there's a cost to all of this. I just want to very, very quickly come back on the telematics question. This will actually help businesses. I would say pretty much the majority have some form of software now checking their vehicles and checking with regard to fuel consumption. And, of course, any savings that a business can make—and they are all looking to make fuel consumption savings—would help enable the money to be put into other vehicles for improvements. But I think we're a long way off some of the things that we've just talked about—the platooning, I just can't really see it working on the M4 at the moment. Maybe up past Carlisle, up towards Scotland, it works really well, but in terms of the cost, there's a cost-benefit to things like putting software in all of your vehicles because, actually, you can see straight away the savings that you then make, because drivers immediately do drive differently because they're being monitored.

Thank you, Chair. 

Thank you. Hefin David. 

To what extent do some of the discussions we've had up to now suggest that modal shift is, actually, a bit of a redundant concept when it comes to freight transport?

I think it's a very interesting question. For some time, there's been a view that we should shift freight from less sustainable-friendly modes like road to rail or waterway. I think there's a big question at the moment around rail, because for us in Wales, to electrify freight transport is going to be a big cost, and there's a debate around how feasible that will be. Hence, you're moving potentially freight from a mode that could be eventually electrified to a mode that is going to be very, very difficult to electrify. So, perhaps there are some debates for us here in terms of being different in the way we look at things than with them being, say, in Europe.

In Europe, 80 per cent of freight that's moved by rail is undertaken by rail that's electrified, and we'd have to look at the feasibilities here to say whether it's right to extend electrification from the Cardiff Central area to other areas where we pick up freight. Also, there are some other freight links in terms of going to the seaports like Felixstowe or Southampton, or the main freight arteries through to the midlands and beyond that to South Yorkshire, at Scunthorpe, where steel shipments would go. Is it possible to electrify those areas, and hence you could get through journeys completely undertaken by electrification on rail, which would mean it right to switch to those modes? So, I think there is quite a grey area at the moment because of this sort of debate.

I think what I'd add to that is you've almost got to take a long-term view as to when trucks are going to be electric. Is it going to be by 2030? Is it going to be 2040? Is it going to be, say, 2050? If it's 2030 or sooner, then you could say that investing in rail modal shift—you lower the justification for that because you just say, 'Well, we'll take the hit now on emissions and keep on truck, because in 10 years' time they'll be electric and they'll be zero emissions, whereas the truck rail wouldn't be.' If you think trucks are going to be 20, 30 years out, you've got time to make that return on investment, and therefore encourage that modal shift across.

Sally Gilson, a more feasible way to achieve modal shift would be the consolidation centre example you gave—perhaps more innovative, creative ways of encouraging different approaches to reaching destinations.

Yes. We are seeing modal shifts across other areas of the UK. For the reasons that Andrew just said, it's more difficult in Wales. I think you'll see that modal shift more for goods that are your non-perishables that are not time-reliant. But I think when you're looking at modal shift within Wales, you are probably looking more at your private transport movements and trying to shift modes with regard to making people make those choices out of a car and onto a bus. I would be told off for not mentioning the M4, but if you're going try and clear some of that, you've really got to look at congestion if you're really looking at trying to decarbonise; congestion has a massive impact. So, if you're stopping three times per mile then accelerating back up to 30 mph, each time, you're tripling those emissions. So, the modal shift—. Yes, I think there is something that we can look at around consolidation centres, but the modal shift does really have to come from those other movements in trying to get people out of the car and on to public transport. 

Okay. And what about using capacity on public transport to carry freight?

I think there is an opportunity there. 

They can barely fit people on at the moment at peak time, mind, so it would have to be off-peak.

It would have to be off-peak, undoubtedly. I'm sure many Valleys lines commuters would be with you on that. It is something that historically we've done in the UK. British Rail had a Red Star parcels division, and, if you go back in the mists of time, things like buses would have carried freight as well. And it does happen in other countries. In the USA, Canada and South Africa, you can book your parcel on with a, say, Greyhound, and they will take it across the US for you. Closer to home, you can do that in Finland. 

But we're not doing that. 

We don't do that in the UK at the minute at all, I don't think. I did have a look through, and I think, somewhere, there was reference I found in the depths of the internet to someone in 2015 doing parcels on buses in Lincolnshire, I think it was, but no particular reference since then. But I think that could be a good opportunity, particularly perhaps for the more rural parts of Wales where you would end up having to send, say, a half-full vehicle or particular parcels—put them on a bus, get them off at the other end. It would need infrastructure around it and resources, but, to access those slightly more inaccessible areas, it would work, and it may potentially help improve, say, the viability of the bus service as well because you're sharing the cost of operating the vehicle. So, there's kind of a benefit, a win-win potentially. As I say, I'm—

It would need quite a bit of thinking about before—

You'd need drop-off points, wouldn't you?

You'd need drop-off points, or you'd need, for instance, people at those drop-off points to collect parcels off the back of the bus to do it, or, again, if you take the TrawsCymru network, if that was to move to a, say, more coach-based approach rather than the current buses, you'd also have the storage space under the coach that would be, perhaps, more practical to use, where you could open the side door and you'd have a series of baskets for each town that you go to and you take out one of those and put an empty one in, and shuffle stuff around that way.

And there are no discussions around this at the moment in the bus industry that you're aware of. 

No, not that I'm aware of at all. But I think it's something that we should be open to, and I think it is a kind of innovative solution that wouldn't necessarily work around Cardiff or any urban area because the delays in putting stuff on and off would offset the journey time benefits, but, for longer distance movements within Wales where the journeys have got a bit more buffer time and there is that opportunity to spend, instead of 30 seconds at a bus stop in Aberystwyth, a minute, because you're handling the parcels, it's not going to make that much of a difference overall. 

I know that they have made use of the train network off-peak, haven't they? So, it wasn't that long ago I saw a presentation about transporting parcels on off-peak trains to make better utilisation. So, it would have the same kind of movements as that. That's quite an interesting one to look at. 

GWR bring fresh food products from Cornwall up to London to restaurants in London on a daily basis. So, even now, there are operators that do do it, but, obviously, more on the rail-based side than the bus.

Okay. That's an interesting one for us to explore with the Welsh Government in more detail, I think, and Transport for Wales. 

Joyce Watson.

I want to look at decarbonisation in ports and air freight, if that's at all possible. We've already touched on some of those things. But, however, Cardiff Business School does say that emissions from ports should be considered in our thinking, and that we have to note that the Wales Act 2017 devolved responsibility for port development, with the exception of Milford Haven, but shipping is largely a reserved matter. So, whilst we've got limited scope to do some things, what are your comments about what we can do within that?

Robert, I think, is going to do the ports, and I can pick up on aviation.

We're not experts in ports; we've got a couple of colleagues who are. We've debated about this. First of all, I think the ports—like the point about warehouses or distribution centres—we should not disregard when we look at transport. So, we should look at logistics in total, not just the transport part, and ports, obviously, are a key part of that. How ports are run and operated and powered is a key decision within it. And I think there are opportunities, potentially, to improve those, like there are for distribution centres and warehouses, from a carbon emissions perspective. We've debated whether there is a possibility to shift, by mode, to have more product delivered by ship to Wales, rather than going through Southampton or Felixstowe or other ports. I think our view is that it's very, very limited—the centre of gravity means that Southampton, Felixstowe, London gateway are the places where we will access goods into the UK, and then it's a question of how we best get them from those areas to Welsh things. We talked a little bit about electrifying the container routes, where a large amount of goods are going to move to those ports, and from those ports to Wales, but it's currently run by a diesel train, so we think that could be improved. Obviously, the roll-on, roll-off operation at Holyhead is something that is attracting larger and larger volumes—it's now become the second biggest ro-ro port. So, there are opportunities there as well.

In terms of air freight, we feel it's very small, very marginal. If you look at the percentage in terms of the amount of tonne-kilometres hauled, it is very, very small. Similar to what we were talking about in terms of piggy-backing passenger flights that we can put some freight on, without any extra cost, in terms of carbon emission, it might be the way to look at exploiting that further. But we feel it is a very small area.

I want to put a spanner in the works here, because I think it's all gone too smooth. So, I want to mention the word 'Brexit', because nobody has, so I'm going to. Because it would be a nonsense not to think about the effects, particularly at ports, that that could have. And if we're talking about decarbonisation, we're already talking about lorries being queued up along motorways, so we're talking about congestion, and we're talking about perhaps goods having to travel further than they currently are. I don't expect you to have all the answers, because nobody seems to have any answers at all, but are you doing some work—I would expect that you are doing some work, research—into the effects of Brexit and the area that we are talking about? Because we've got control over what we've got control over at the moment, but we could fall off the edge of a cliff a year December, and everything could change. So, I'm expecting that you have at least looked at those possibilities and how that will truly affect what we're trying to do here.

Do you want me to take that one?

Sally's got some points.

I've got a couple of quick points on that. I was giving evidence on Tuesday on this exact topic. So, point No. 1 is, 'no deal' is still not off the table; we've still got two opportunities, potentially, for that. So, we are not discontinuing our planning for it and are making sure that our members know what requirements they have in that scenario. So, the more we can do, the less chance there will be of congestion around the ports. I know a lot of work has been done by Welsh Government to try and mitigate those issues around Holyhead. And the easiest way of mitigating that is to ensure there is some kind of a deal and there is a transition period that allows businesses to be able to prepare and make those changes. So, that's the first point on it, because then we won't get that congestion within the ports. I think, if you were to look at the current proposal in place, then the changes we will see in future will be quite similar to those 'no deal' scenarios. So, you'll still need those kinds of requirements going forward with regard to paperwork, so that transition period will become crucial to make sure that everybody knows what they're going to be doing.

The second point of this that could really affect future freight is the tariffs. Certainly, with the 'no deal' scenario, the tariffs on new HGVs was around 22 per cent. So, clearly, if you've got an extra 22 per cent on a vehicle, you're not going to be making—. It really does stop those new vehicle purchases. So, things like that, going forward, could really put a coach and horses through it. It would affect all of our plans, because all of a sudden, if you've got an extra 22 per cent on the vehicle, you're not going to be able to see that take-up then of Euro 6 vehicles going forward.

And that would be any vehicle, whether that's a HGV, van, car or anything?

That's HGV. So, vans—I'm desperately trying to remember—I think we were looking at about 16 per cent on vans. Obviously, this is all to be negotiated, but this is one of our key asks in any future negotiation, that the tariffs on those kinds of vehicles do not go up, because that will have an implication then on what we're able to do.

I just thought it would be worth airing it. 

We talked earlier about perverse outcomes. One of the perverse outcomes is, if Holyhead or Dover becomes too congested, you'll see more traffic going direct from Ireland to the EU. Perversely, that would mean that we'd actually have fewer—. That would help decarbonise the Welsh economy because you'd no longer have the trucks going across north Wales. I think in that case the economic impact far outweighs the decarbonisation issue there, because obviously there's a broader economic benefit from having the port.

But in terms of things like congestion at the ports, it may make an opportunity for us to look at running a rail service from Holyhead more viable, because you could potentially load products at, say, rail terminals in the west midlands that have got the appropriate security clearance. The infrastructure runs into the port area already in Holyhead, so, effectively, you could send unaccompanied loads up to Holyhead, unload them within the port area and then on to the vessels. There might be an opportunity there to overcome some of the challenges of Brexit by using rail. The other one would be to obviously run a train from Holyhead through the channel tunnel and on into Europe itself. 

And create what are called land bridge passes, so, basically, if freight is coming from Ireland, or actually Northern Ireland in the way it's been set up in the current proposal, through to Europe, they don't have to stop for customs clearance; they just go past and go straight through. So, it's possible.

Yes, and it wouldn't need a significant market switch from road to rail to make a train viable. I think 5 per cent of the vehicles would potentially do it. The challenge is either finding one customer that accounts for 5 per cent of the market, or finding flows where you could get customers working together to justify a train. I think they are some of the real challenges in trying to build that business case at this stage. But, yes, you're right—the potential for disruption, and if there is congestion and so on, could potentially have a quite negative impact on the ability to decarbonise.

And the affordability of trying to move towards vehicles for the whole decarbonisation agenda, not to mention all the manufacturing of them as well. But, thank you.

Thank you, Joyce. Can I thank the members of the panel for their time this morning? If there's anything pressing that you want to add that's not been drawn out through questions, but I'm hoping that it's been a good session and all views have been expressed with the questions today—. Can I thank you for your time? There'll be a transcript of proceedings provided to you all, and, by all means, if you think you want to add to anything that's been said, then please also let us know. But thank you very much for your papers in advance and for your time today. Thank you. Diolch yn fawr. 

That brings an end to the public part of our meeting today.