A significant barrier to investment in low-carbon buses will be removed after the government announced it would revise the way buses are subsidised.
Changes to the Bus Service Operators Grant (BSOG) were announced in the pre-budget report and further details were published in December.
The grant is essentially a rebate on fuel duty, so the more fuel a bus operator uses, the more grant it receives from government. Bus operators have therefore been reluctant to invest in new fuel saving vehicles, as this would increase capital costs while reducing their grants.
Transport secretary Geoff Hoon said that subsidies could be based on mileage travelled rather than fuel consumed. The government hopes to implement the change this year.
BSOG rates have traditionally altered along with changes to fuel duty. However, after April 2010, the grant will only be increased for operators who have achieved an improvement in fuel efficiency equivalent to three per cent a year for each of the two previous years. These efficiency requirements will be reviewed annually with a view to tightening them.
There would be a review by 2011 on using a fuel efficiency threshold or differential rates of BSOG to further incentivise a switch to lower emissions vehicles delivering at least Euro V emission standards.
The government also wants to fund a demonstration project on eco-driving for bus drivers to encourage fuel-efficient driving.
Pilot training under the Safe and Fuel-Efficient Driving project by the Department for Transport (DfT) in 2007 resulted in an average of 12% fuel saving per driver. Widespread take-up of better driving techniques could save many thousands of tonnes of carbon dioxide a year, the DfT believes.
Several trials of low-carbon buses have taken place in the UK. Transport for London (TfL) is working with various manufacturers to trial hybrid buses, which use both electric and diesel motors. These can reduce CO2 emissions by up to 40%. It plans to have 56 hybrid buses in operation by the end of February, and a further 300 by March 2011.
Eventually, TfL aims to replace its entire fleet of 8,000 buses with hybrid buses. Around 500 buses enter service each year - from 2012 these should all be hybrid.
Take-up of low carbon buses elsewhere in the country is patchy. Tyne and Wear Passenger Transport Executive Nexus has been operating ten hybrid buses between Newcastle and Gateshead since 2005. Merseytravel had been trialling six hybrid buses since 2005. It is no longer using them, but is keeping an eye on new technology from the manufacturers. Reading has been operating 14 bioethanol buses on its most popular route since April 2008.
The Low Carbon Vehicle Partnership (LowCVP), whose members include bus manufacturers, operators and passenger transport executives, has campaigned for changes to the BSOG for several years.
"Typically, these vehicles are trialled and found to be reliable, then bus operators would look at the economics and find they weren’t worth it," explained Jonathan Murray, LowCVP deputy director.
LowCVP believes the change reflects a renewed willingness by the DfT to tackle important barriers to the adoption of low-carbon vehicle technologies.