Minimising costs and cutting carbon emissions will be a key priority for businesses in 2010. For those looking to ramp up their knowledge about sustainability methods and techniques, The Energy Saving Trust highlights how businesses can take action across their fleets to cut costs, tax and emissions.
Politicking aside, businesses desperately need a place they can go for advice on issues like minimising the costs and carbon emissions from their fleets and processes.
The cost savings available to businesses by taking action across their fleets are impressive. Operating cleaner vehicles returning better fuel economy will save cash on fuel and class 1A National Insurance payments and road tax.
Training drivers in smarter driving techniques can save 15% on the fuel bill. Making even modest savings in mileage by reviewing the need for every journey really adds up; saving fuel, employee time (and therefore money) and vehicle maintenance costs.
Read on for more information on how the Energy Saving Trust can help businesses to be more economical and ecological.
Q. What is the Energy Saving Trust (EST) and how can it help us position carbon reduction as an initiative about being economical rather than ecological - eco-efficiency?
We support and advise organisations on cutting CO2 emissions and saving money. Our services are is entirely free to businesses, supported by the Department of Transport.
We offer a Carbon Footprinting service to provide an indication of a business’ CO2 emissions from travel in cars and vans, a reflection of the costs, potential savings and guidance on management data.
For example, each tonne of CO2 saved relates to 400 litres of fuel saved. At today’s prices, that’s around £428. We are funded to leverage the benefits – financial and otherwise – of reducing CO2 from cars and vans used in business.
Our figures are based on: Vehicle mix = 70% diesel 30% petrol, 2.051kg CO2/l, £1.075 average cost of 1litre of fuel.
Q.Can the Energy Saving Trust provide solid evidence of savings and efficiencies from this approach to fleet management that would persuade the CFO to take this to the board?
We have case studies, mostly on the website, which demonstrate savings made as a result of working with us.
For example, North Star Housing created a new grey fleet policy in consultation with Energy SavingTrust. Before the new policy was introduced they calculated that their staff travel was responsible for 50 tonnes of CO2 a year.
One year later this was 37 tonnes, a reduction of 26%.
Maintenance service provider, Integral, adopted an innovative approach to fuel management which reduced their fuel bill by more than £5,000 per month.
Carlson Wagonlit travel removed free fuel for employees which saved in excess of £60,000 a year. By encouraging lower emitting cars, petrol and diesel use will be cut by £46,000 or 25% per year.
Q. De we get corporate taxbreaks from lowering the footprint and other carbon reducing initiatives?
There are two key points on the car CO2 scale that provide corporation tax incentives on vehicles emitting 110g/km or less and 160 g/km or less. Cars emitting 110g/km or less have a year one 100% writing down allowance against corporation tax. Those emitting 160g/km or less can be depreciated at 20% per annum on a reducing basis, those above this figure at 10% per annum. There is now no balancing allowance on disposal.
There are now many vehicles to choose from in the sub 160 class across almost all vehicle types and increasing choice in the sub 110 category.
Class 1A National Insurance, VED rates, and employees BIK tax are all now based on vehicle emissions.
Q. How else can footprinting our fleet’s costs? Where are the detailed calculations behind the claimed per annum savings?
C
arbon footprinting per se will not provide cost savings but knowing where the business stands is a key ingredient in identifying savings. Vehicle and fuel use data provided by the business provides our consultant with an insight into the operation of the fleet and enables further advice to be provided which should lead to additional savings.
The figure quoted is a general estimate of typical savings that can be achieved relatively easily. It is made up of a number of things including reducing mileage by 5%. This reduction frees up more productive time for work and saves fuel, depreciation and maintenance costs on the vehicles.
Other savings included in this figure are the fuel saved by smarter driving, replacing the fleet vehicles with best in class lower emitting cars (not necessarily smaller) and the resulting saving in Class1A National Insurance.
Q. Can it ease our cashflow situation, liquidity and working cap?
Significant financial savings will help the cashflow, which eases pressures on working cap and liquidity.
Q. Can we make real, impactful savings by lowering the carbon footprint?
The savings available by taking action across the fleet are impressive.
Operating cleaner vehicles returning better fuel economy will save cash on fuel and class 1A National Insurance payments and road tax, training your drivers in smarter driving techniques can save 15% on your fuel bill too.
Making even modest savings in mileage by reviewing the need for every journey really adds up; saving fuel, employee time (and therefore money) and vehicle maintenance costs.
Q. Can the Trust help me with a cost benefit analysis of compliance?
Our carbon footprinting service provides pointers to the best areas to tackle first. Many of the most effective actions in cutting CO2 emissions have no direct cost associated with implementation. Some do require some internal resources but we provide free consultancy support.
Q. How can we trade carbon cost-effectively?
Road fuels are not yet included in any carbon trading scheme.
Q. Do we get credit from reducing the carbon footprints of our supply chains and partners?
A good track record in CSR and environmental initiatives can provide competitive advantage. Many organisations, big and small, are now going a step further and looking up and down their supply chain to share best practice and demonstrate their achievements to customers.
