The planned increase in the excise duty rate on diesel fuel will have a punitive effect on the ability of Ireland’s logistics industry to deliver, according to the Freight Transport Association of Ireland, the country’s most active membership organisation in the sector. FTAI believes that any rise in fuel duty would have a knock-on effect on prices as well as operating costs and, in such testing economic times, the government would be better placed to encourage better management of fuel and other efficiencies in the first instance.
Responding to the report from the Economic and Social Research Institute, which concluded that a price increase for diesel could be justified on both fiscal and environmental grounds, FTAI is adamant that the commercial vehicle sector should be treated separately from other diesel consumers: “Ireland’s freight industry has little or no choice but to use diesel as fuel, in order to transport the nation’s goods and services,” says Aidan Flynn, General Manager at FTAI, “yet the recommendations from the ESRI would categorise logistics in the same way as car drivers and other consumers. The freight sector has worked hard to reduce its emissions in recent years – in fact commercial vehicles emit less than half of the NOx particles as cars, as shown in a 2017 ICCT report.
“Commercial fleet operators continue to increase efficiencies when it comes to emissions and air quality, in order to operate in a sustainable and profitable manner, but times are tough. Even a proposed 0.02% per annum rise in the cost of a litre of fuel would be detrimental to an already stretched industry, at a time when alternative vehicles are not available or are prohibitively expensive. The sector needs to be given time to succession plan for its fleets, enabling it to operate on a level playing field with car drivers and other diesel users.”
According to Flynn, the pressure to improve efficiency and reduce carbon emissions, as voiced by legislators and other interested parties, fails to take into account potential improvements which can be made in fuel performance. These will require support from SEAI, Enprova and others but, as Flynn says, the benefits to the country could be enormous: “The big benefit of improved fuel performance is obviously to an operator’s bottom line, but government can send a clear message to operators that fuel performance matters with a CO2 tax discount based on improved performance. Implementing such a request by government would level the competitive landscape and help operators adjust to new technologies, as well as finding solutions in their business planning and when talking to customers.
“Gathering such performance data would also benefit the government in planning future environmental policy, providing hard data to influence the selection of vehicle choices and tax breaks for alternatively fuelled vehicles.”
According to Flynn, freight operators have already taken significant steps to introduce new fuel efficiency measures, as well as adapting vehicles to comply with the new Euro VI regulations which produce lower levels of emissions. Rewarding good performance in this area would be more beneficial to government than punitive measures: “In recent years, the freight industry has taken huge strides in reducing emissions and improving fuel efficiency. What is needed now is a clear pathway to further fuel management improvements, supported by government, to enable business to grow and flourish in an ever-changing economic climate.”