The UK based Green Finance Institute has launched the Coalition for the Decarbonisation of Road Transport, bringing together global experts and leading figures from the finance, automotive, energy and infrastructure sectors to accelerate the transition to zero emission vehicles.
The Coalition’s mandate is to unlock the level of private finance necessary for transport decarbonisation to happen at pace and at scale, co-creating financing solutions required to support the transition to zero emission vehicles.
Analysis undertaken by the Green Finance Institute, with support from KPMG’s Future Mobility Team, estimates that more than £150 billion of gross capital investment may be required to decarbonise the UK road transport sector between 2021 and 2030, requiring a significant acceleration in the rate of investment into zero-carbon transport solutions.
The Coalition for the Decarbonisation of Road Transport will focus on developing finance solutions initially in three core areas:
- Consumer finance and leasing. Financial innovation is needed to help consumers overcome the barriers to choosing electric over fossil-fuel vehicles. Key to the approach will be mechanisms to mitigate the upfront costs of EVs and accelerate the maturity of the used EV market. The private sector has an instrumental role to play, including in providing affordable finance solutions to consumers and small businesses.
- EV charging infrastructure. The Green Finance Institute estimates that to meet growing demand more than 6.7 million chargers are required, at a total cost of over £20 billion. Public and private sector collaboration will be needed to unlock the finance for a national charging infrastructure roll-out.
- The commercialisation of battery technology. The UK urgently needs to scale up current levels of investment into battery manufacturing to build a globally competitive battery sector. A capacity of up to 60 GWh per annum may be needed by 2030, requiring at least three UK gigafactories and more than £5 billion in investment. Other issues to be addressed include safe and sustainable battery disposal, as well as the creation of a sustainable supply chain.
Dr Rhian-Mari Thomas OBE, Chief Executive of the Green Finance Institute, said, “The Green Finance Institute has already demonstrated the impact of bringing together experts to co-design innovative financial solutions and promote the enabling conditions needed to channel capital towards net zero goals.
“Identifying the most effective interventions and public investments in order to catalyse private sector finance requires thorough, detailed analysis as well as creativity and ingenuity. We’re excited to be working with our founding coalition members to tackle the challenge of financing the decarbonisation of road transport.”
UK Transport Minister, Rachel Maclean, added, “As we accelerate towards a net zero future, I’m delighted that government and industry are coming together to encourage more people to make the switch to zero-emission vehicles.”
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