I was just coming to that. The hon. Lady is quite right, but I am talking about the up-front capital cost. The lifetime running cost may well be cheaper for an electric bus, but the creator has to finance their capital cost on day one, whereas the lifetime operating costs are spread over the effective lifetime of the asset, which, for an electric bus, is an interesting question, actually. The lifetime of the structure of the bus may be 15 or 20 years, but we are not yet sure what the effective lifetime of the battery component of the bus is, and whether or not it needs to be replaced after about 10 years. The data is not particularly robust on that. If it means that we have to change out enormous battery banks during the operating process, that would be a significant additional secondary capex cost.
The Department for Transport figures for March 2024 say that there are 29,400 buses used by local bus companies. If we are going to replace all of those, that would be an £8 billion investment. That is very significant, and it is not considered in the impact assessment. There are some long-term savings, as the hon. Member for Brighton Pavilion quite rightly pointed out. It is not just the differential in costs between electric and diesel; there are reduced maintenance costs as well. There are many fewer moving parts with an electric vehicle as well as the lower fuel cost, but the capex costs are front-loaded, and we cannot ignore that. Have the Government considered the financing consequences of imposing large, increased, front-loaded capex costs on bus companies? I would be interested to hear the Minister’s response.
The second issue here is that through the current drafting, the Government are inevitably picking a winner in terms of technology for low-carbon vehicles, because it focuses on tailpipe emissions and ignores whole-life carbon assessments. That is important; again, we must have a balance of approach here. There is a significant benefit in zero tailpipe emissions, which is primarily about air quality as opposed to carbon and greenhouse gas emissions.
There are very significant emissions during the construction of large-scale battery-operated buses, and there are alternatives under development. In the life cycle of the vehicle, if we take into account its construction, operation and disassembly, it is likely that new technologies, particularly ones using synthetic fuels, could be lower in carbon terms, albeit emitting Euro VI equivalent particulates at the tailpipe. The Bill denies an opportunity for that market to develop.
There are currently artificially-produced fuels made using renewable energy that have no net CO2 emissions over their life cycle. If they are interested, I can explain the basic process to Members: it uses carbon capture plus hydrogen from renewable electricity, synthesised via processes such as the Fischer-Tropsch or methanol synthesis, to create e-diesel, e-kerosene, e-methanol or e-gasoline. The key benefit is that it works with existing engines and fuel infrastructure, and avoids the enormous carbon emissions from wasting existing built infrastructure and machinery.
We need to understand that we have “spent” an enormous amount of carbon and greenhouse gases in constructing the 29,400 vehicles—buses—already out there, many of which have a natural life that could be extended significantly. We do not even need to convert them: we could just pour a synthetic fuel into the same bus, saving all the carbon associated with the manufacturing of new, large-scale hydrogen or electricity buses. At the very least, that would be a significant transitional material to extend the use of existing, or pre-manufactured, vehicles.
We try to reduce, reuse and recycle, and that would be an absolutely classic case of a good thing, and yet the clause, I am afraid to say, prohibits the development of that market. I suspect that that is not the intention of the Department or the Minister, but that is what will happen.