4 Nov 22

Greening a fleet: "The cheapest energy will be at your home"

Europe is going through an evolution. Before the United Nations Climate Change Conference COP27 starts on Sunday, several European experts gathered at the "Greening your fleet" session at the Decarbonisation Week of the UK-based legal consultancy Osborne Clarke. European experts focused on the electrification process in the UK, Poland and Germany.

The transformation steps towards a green fleet 

Opening the last session of the Decarbonisation Week for Osborne Clarke, Edward Barratt listed the "legal building blocks" of greening a fleet, which represent a challenge on their own. Clarke mentions the many questions fleet managers face in these steps, such as: 

  • Shall bundling be used in maintenance and insurance? 
  • How will telematics, remote monitoring, and AI help fleets transform?
  • What alternative fuels could be an option for green fleets? 
  • How will employee terms and conditions change during the transition?

According to Barratt, these are just a few questions fleet managers have to consider. They also need to take a careful look at the market insights. 

Faster charging depends on higher prices

Jakub Jedlinski, Head of e-Mobility at E.ON Poland, underlines the importance of focusing on home and office charging solutions rather than public infrastructure. Why? 

Because e-Mobility is a revolution indeed, says Jedlinski, while mentioning the two myths in the industry: 

  • Limited charging infrastructure limits e-Mobility
  • Transitioning from internal combustion engines (ICEs) to electric vehicles (EVs) is not an evolution. 

Jedlinski says that the first myth is true, but electrification of fleets won't primarily depend on the number of chargers but on organisation and businesses. For the second, "more than the product, the use cases will change," says Jedlinski. 

While we expect a significant change in energy, the value chain will stay almost the same, while we expect the gas stations to be replaced with charging stations. But installing the charging infrastructure is not as flexible as connecting to the internet with your smartphone, says Jeedlinski. 

The charging model Jedlinski and his colleagues put forward depends on 60% home charging, 30% office charging and 10% public charging. In this model, demand from gas stations is squeezed by 10% and "this would be revolutionary" other than the traditional thinking, according to Jedlinski.  

The usage of the car will remain the same. Still, a massive energy shift will bring significant organisational challenges instead of just giving your employees and workers a fuel card. Eventually, home and office charging will thrive, according to Jedlinski. Because faster and more efficient charging requires more investment, businesses will find a better ROI in adapting charging in homes and offices. 

Which revenue streams favour electrification? 

Germany is undergoing massive development in all aspects of electrification, and as Karla Klasen, Associate at Osborne Clarke Germany, businesses must choose the best revenue stream in the transition process. 

One method is the sale of electricity, which is not very lucrative if you sell it through wall boxes in apartments. This approach may only work in installing high-voltage DC chargers in high-traffic areas. On the other hand, Germany's greenhouse gas (GHG) quota provides benefits for EV users, such as making up to €450 annually by assigning your rights to a fossil fuel-based company. Advertisement is another option, as selling advertising space in high-voltage charging points appears to be lucrative.

How do you install your charging infrastructure? 

This is complicated as Klasen puts out the contracting parties to install a charging point operator. Installing a charging point from the electricity supplier to the maintenance provider is a dynamic process. "If there are already a few charging points at the location you will operate, you must be sure to get enough electricity for the demand", says Klasen. Convincing the property owner and assigning backend operators are the additional steps of the organising process. 

The range of services offered in the business model is also critical, as businesses may face economic risks in case of poor planning. Klasen says choosing services on a modular basis is preferable in Germany to have more flexibility in the pricing from procurement to delivery of electricity. 

Germany is quite sensitive in taxing and regulating the electrification process; as Klasen says, metering and calibration law is a hot topic, as the state doesn't want to allow data to be manipulated. 

Allocating the cost of home charging 

The recent statistics provided by Sylwia Uziębło-Kowalska, Senior Associate at Osborne Clarke Poland, show that there are currently 54,795 EVs in Poland, 27.200 of them being all-electric. Poland is one of the leading countries in producing components for e-Mobility and rapidly growing in lithium-ion battery production. 

While Poland is speeding up, businesses are busy developing their green energy models. According to Uziębło-Kowalska, the best method would be building-up your renewable energy infrastructure, such as covering the roof of your business with solar panels. Challenges like building storage and getting connected to the grid will emerge, but having your electricity will pay off. 

From public funding for purchasing BEVs to upgrading grid connections, Poland is also undergoing immense development. Another significant issue is the allocation of home charging, which raises the question of; if there's an income for the employees and how the charging will reflect on the bill. At this point, Uziębło-Kowalska suggests securing the home charger owner's position by obtaining a binding tax interpretation and documenting the charging costs of employees. 

Germany and Poland are just a tiny fraction of the picture, as Uziębło-Kowalska says important obligations will be put forward through the European Data Protection Board (EPDB) from October 2022. Some major responsibilities include: 

  • Removing barriers to install recharging points in residential buildings, 
  • Ensuring the availability of technical assistance and the availability of infrastructure for sustainable mobility. 

The regulation also sets the number of charging points at buildings according to their parking spaces. 

The rise of hydrogen? 

"Nothing divides opinion quite like hydrogen", says Edward Barratt. While arguments on this another hot topic are likely to continue for many years, European countries are setting up their strategies. 

The UK aims to use hydrogen in road, rail, air and maritime transportation, while the Energy Security Strategy has a target of 10GW of hydrogen production by 2030. But the UK is yet to set up a framework for providers for their delivery models, says Barrett. 

Poland is facing similar challenges as Uziębło-Kowalska says the government is explicitly focusing on hydrogen due to geopolitical concerns, forcing Poland to distance itself from fossil fuel resources. The current developments in Poland may also set an example for other European countries:

  • 45  new Fuel Cell Electric Vehicles (FCEVs) were installed between January and September 2022, 
  • The Polish Hydrogen Strategy is setting goals to be accomplished by 2030 and 2040. 

Indeed, the publicly available hydrogen refuelling stations are limited, but under the Alternative Fuels Infrastructure Regulation (AFIR), Poland wants to reach a threshold by 2027. 

The lack of separate regulatory frameworks for hydrogen projects is another challenge, yet Uziębło-Kowalska believes that hydrogen may become essential to greening fleets. 

The in-article photos show Edward Barratt, Partner at Osborne Clarke, UK; Jakub Jedlinski, Head of e-Mobility at E.ON Poland; Karla Klasen, Associate at Osborne Clarke Germany and Sylwia Uziębło-Kowalska, Senior Associate at Osborne Clarke Poland, respectively.

Main image: Shutterstock.

Authored by: Mufit Yilmaz Gokmen