Call for Evidence – Non-Road Mobile Machinery Decarbonisation Options Draft CEA Response to end of Questionnaire

Chapter 1 – The role of NRMM in the economy

1. Are you able to provide any additional information regarding the NRMM product lifecycle?

As noted in the CfE, the lifecycle of NRMM is extremely varied but CEA generally agrees with the summary of the various stages of the product lifecycle.

It is likely already understood but not explicitly stated in the CfE, but NRMM lifetimes are often measured in decades, with gradually decreasing operating hours. This means that some machines being sold today with standard powertrains will still be in service in the UK beyond 2050. Such machines are likely to fall into three categories:

• Specialist machines with very high capital cost and seasonal utilisation
• Specialist machines with very high capital cost and higher utilisation rates (which may attract interest for retrofit of certain decarbonisation solutions where this is technically and economically possible).
• Machines with extremely low utilisation rates, owned by small and medium enterprises (SMEs), voluntary organisations, hobbyists, home self-builders etc – the nature of the ownership, and utilisation rates, may not justify replacement or retrofit. HVO or other drop in fuels offer a solution for these cases.

It is common that machines, following a first life within the UK, will be sold internationally. Both TCO and lifetime CO₂ are heavily dependent on these subsequent lives and decarbonisation pathways that reduce machine viability in secondary markets may see high depreciation, low uptake or require additional incentivisation.

2. Are you able to provide any additional information regarding how NRMM is used in the sectors presented in Table 1?

In general, the table is an appropriate, if simplified description of machine deployment in industry. CEA agrees that determining suitable decarbonisation options for NRMM requires detailed consideration of user requirements, deployment scenarios and machinery type. However, the sector in which the machine operates is of less importance.

The column titled “Sites and Deployment Scenarios” gives a good illustration of the variety of sites in which machines could be required to work. However, it does not consider that the distance travelled by machines will be highly variable. CEA members will share more detail in individual responses, but from telematic data, several categories of machine are observed to travel upwards of 25 miles in a day.

A further distinction of whether the site is (or can be) connected to the national electricity grid would be important to consider.

Ultimately the end user will select machinery considering:

• Where a machine works and the type of work that it is undertaking.
• How many hours, and the pattern of working that is required of the machine.
• How much energy a machine will require to complete daily tasks.
• Up front and operating costs.

Collectively, CEA refers to the 3 first points as the “use-case” of the machine. This is a complex combination of factors that must be accounted for when specifying a machine or powertrain. Further detail factors that make up the use-case of a machine include:

• Proximity to infrastructure
• Site constraints
• Operator
• Duty factor
• Rate of loading
• Climatic conditions

No single decarbonised powertrain technology can best match all combinations or mission profiles, and the combinations required by any individual machine may change from job to job. The end-user is usually best placed to make a decision based on the factors above, and manufacturers are working to develop a range of powertrain technologies that will allow the end-user to select the option which best suits their specific requirements.

3. Are there any sectors not listed in Table 1 that constitute a significant source of NRMM use and/or are particularly dependent upon NRMM for their operations?

Additional sectors that should be considered include Emergency Services, Military, Municipality Maintenance and Repair, and Disaster prevention and Response (e.g. shoring-up river banks to resist impending floods, creating fire breaks to limit spread of wildfires, removal of debris following collapse of natural features or the built environment), Outdoor power, Amenity horticulture (professional and consumer), Aircraft Ground Support, Mobile Elevating Work Platforms, engine-driven water pumps and engine-driven welding sets.

Mobile generators can be used in a wide variety of settings, including providing temporary power during routine maintenance or power outages in industrial, telecommunications, water supply, retail or domestic settings, in addition to temporary exhibitions and outdoors events.  According to a recent BBC News article (see https://www.bbc.co.uk/news/business-67873127), the UK music festival community alone uses in excess of 12 million litres of diesel annually running generators to provide the significant amount of electricity required to run a festival. These events often take place in remote areas where there is no means to connect to the national grid. The article describes how some events are already experimenting with using temporary microgrids incorporating batteries, solar, and even wind, together with running the remaining generators on HVO.

The outdoor power sector typically includes both professional and consumer equipment such as grass cutting equipment (walk behind and ride on), cultivators, snow throwers and powered handheld equipment such as chainsaws, hedge cutters, strimmers etc. These are used in a wide range of settings, domestically at home, in a municipal setting such as verge cutting or parks management or in a commercial setting such as sports facilities, caravan parks or forests.

4. If you own, rent, or lease, and/or operate NRMM, what are the main considerations when deciding what machines to procure and whether to buy outright or rent/lease?

As representatives of manufacturers, we cannot answer this.

5. DESNZ commissioned research suggests that around 33% of construction machinery is owner operated versus 67% which is either hired or leased. How does this compare to the sector(s) in you are interested?

N/A since the CEA represents the construction machinery sector. However, we endorse the

statistic quoted above.

Chapter 2 – Decarbonisation options

6. Are there any additional efficiency measures that have not been included in this section relevant to the NRMM type(s) and/or sector(s) that you are interested in?

The examples are appropriate, but not exhaustive. We should expect that industry will continue to innovate, and should not be constrained from doing so due to policies that ‘pick winners’ or limit technological options.

7. What efficiency measures have been implemented in the machine type(s) and/or sector(s) that you are interested in? What were the impacts that you observed?

Machine efficiency is constantly improving through ongoing innovation from engine and machine manufacturers. Please refer to individual CEA member responses to this Call for Evidence for specific examples.

Previous studies have shown that fuel costs are a key part of TCO and very important to operators, increasingly so in more recent years, and so improving efficiency is a key objective for manufacturers (so long as the machine uptime can be maintained).

Start-stop systems have been implemented on some NRMM, resulting in efficiency savings due to reduced idling, though these are not suitable in all applications. Similar benefits are inherent with battery-electric and tethered-electric machinery, which do not idle. There are corresponding co-benefits to criteria pollutant emissions.

Hybridisation of diesel generators with battery packs has been an effective way of reducing CO2 emissions. Such systems allow generators to be run at higher, more efficient load points, for shorter periods of time.

8. Do you agree with the estimated emissions saving range of the different efficiency measures as set out above [on page 15]? Please explain your reasoning.

We agree with the estimates, however it is noted that equipment for the agricultural sector were specifically outside of the scope of the source “Industrial non-road mobile machinery: decarbonisation options – techno-economic feasibility study”.

9. To what extent do you think these efficiency savings will be realised through market forces?

TCO is highly important to operators, leading to a market pull for efficiency and productivity improvements (whilst ensuring machine uptime is maintained).

This can be affected or distorted positively or negatively by Government policy on subsidisation or taxation of the different energy sources. This relationship is not always predictable. For example, it was expected that the removal of red diesel would lead to an increased focus on procuring modern high efficiency machinery. This was not experienced, and instead higher fuel costs led to an overall delay in equipment purchases. This consequently reduced the effectiveness of newly introduced and tighter criteria pollutant emissions legislation.

10. Can you identify any process change(s) for the NRMM type(s) or sector(s) that you are interested in? What do you see as the abatement potential (possible emissions saving range) for these?

This should not be limited to phasing out of NRMM; Digital tools are increasingly available to optimise the best combination of NRMM to use (e.g. correctly matching the sizes and number of excavators, dumpers, etc to maximise load factors and minimise idle time), in addition to site design and coordination of machine movements to reduce unnecessary journeys.  Owners/operators may be better placed to provide additional examples and evidence of fuel and GHG reduction.

11. What process change(s), if any, has been attempted in the company or sector(s) that you are interested in with the intention of decarbonising NRMM? Did you observe any impacts?

As representatives of manufacturers, we are not best placed to answer this. Owners/operators may be better placed.

12. Has fuel switching been attempted in the NRMM type(s) or sector(s) that you are interested in? If so, please list the alternative fuels that have been switched to.

CEA members have experience in all of the alternative fuels mentioned in this CfE.

Most existing diesel products can be, and already are, operated on FAME biofuels up to B20. Similarly, HVO (being a drop in fuel) is already used in some existing products.

Hydrogen combustion engines have been successfully demonstrated in NRMM and are nearing commercial availability, with over 100 engine programmes globally (See U.S. DOE H2 Briefing, at the following link: https://www.energy.gov/sites/default/files/2023-03/h2iqhour-02222023.pdf)

Biomethane is being used already in agriculture, with over 150 tractors (mainly in dairy farms) running on renewable natural gas produced on-site. Ethanol powered engines have also been announced, though are not yet in production (https://www.news-jd.com/john-deere-spearheads-renewable-fuel-integration-with-concept-ethanol-engine-at-agritechnica/).

Material handling machines (forklifts/industrial trucks) are utilising battery electric extensively, whereas smaller construction machines and some low power tractors are starting to utilise battery electric.

Hybrid electric-diesel NRMM is progressing but with limited commercial offerings, although as technology progresses this is likely to expand and permit a broad product portfolio of NRMM to use smaller ICE, and electric-hybrid power trains may further enhance NRMM that already incorporate energy capture technologies.

Smaller wheeled and portable NRMM such as domestic mowers and consumer chainsaws have been migrating to battery power over recent years. Note, however, that professional chainsaws and mowers still rely upon internal combustion engines due to their use case.

The take up of these alternatives may be better commented upon by owners/operators.

13. Where fuel switching has been attempted, what have been the outcomes?

Please refer to individual member responses for additional information on fuel switching outcomes.

There are no reliability or performance concerns from the product perspective in terms of use of HVO and B20, and no impact to machine uptimes, since they are drop-in fuels for which the products have already been developed; although, there are increased operating costs due to fuel pricing and availability.

A biomethane ICE, that is available in a type-approved tractor, has confirmed its ability to provide the required performance characteristics, and also provide a substantial benefit in terms of Well-to-Wheel (WtW) CO₂e emissions reduction. When the gas is sourced from liquid manure, the vehicle acts as a convertor, capturing methane (with higher global warming potential than CO₂) and emitting CO₂ from its combustion.

Impacts of battery electric on machine uptime leads to uptake being restricted to end users that are able to work within the limitations.

Demonstrations of H2 ICE in real world use, and witnessed by independent emissions testing experts, have shown that performance and thermal efficiency attributes, depending on the technology used, can be equivalent to those of incumbent diesel powertrains. Due to the lack of carbon in the fuel, its combustion contributes no CO₂ to the atmosphere. Criteria pollutant emissions can be significantly below even the most stringent existing regulatory limits. Results from a development hydrogen engine, matched with a non-optimised aftertreatment system are available at the link below. More detail can be found in the response to Q30.

https://www.jcb.com/dfsmedia/261086efe15a46f5afb95d093ef038ea/62937-source/

14. Are there any promising fuel switching options that have not been included in this section relevant to the NRMM type(s) and/or sector(s) that you are interested in?

No future fuel switching options should be ruled out at this point due to ongoing research and development. We disagree with the approach in the feasibility report to rule out many fuel types at the outset (described in the feasibility study in Section 3.1.1). For example, many of our members are actively researching ICE operated on other low and net zero carbon fuels, such as methanol, ethanol, biomethane (not an exhaustive list), for certain applications. Policy should allow space for innovation.

15. What do you see as the necessary fuel switching options for the NRMM type(s) and/or sector(s) that you are interested in?

Fundamentally, we see that ICE operated on low or net-zero carbon liquid or gaseous fuels will be necessary as a core part of this sector’s long-term solution beyond 2050, alongside electric solutions, including batteries, tethering, and fuel cells.

For NRMM in the sectors subject to this call for evidence, there is currently no line of sight to completely replace ICE with other technologies in the long term, due to the wide range of applications and use cases.

No fuel switching options should be ruled out at this point due to ongoing research and development (as noted in question 27).

16. If you own, rent/lease, and/or operate NRMM, have you at any point decided to reduce emissions from these machines? If so, what were your main considerations when doing so? If not, why have you not sought to do so?

As representatives of manufacturers, we are not best placed to answer this.

Chapter 3 – Deployment considerations

17. Do you agree that these are the main opportunities and potential co-benefits to the deployment of NRMM decarbonisation options?

Regarding noise, in many cases the powertrain is not the source of most of the noise from a modern piece of NRMM. Rather, the implements/worktools and the task the machine is completing are usually the dominant source of noise, which would remain unchanged with a different powertrain. Therefore, we would urge caution in overstating the significance of potential noise reduction.

We agree with the potential air quality and health co-benefits, but would note that it is not only electric solutions which have these benefits. In the short-term, fleet renewal with machinery that meets the current emissions regulation will itself bring substantial benefits to air quality.

Any criteria emissions from ICE running on low and net-zero carbon fuels can be well mitigated by advanced engine design and emissions control systems. CEA member companies continue to build a strong body of evidence in support of this statement. Notably, independently witnessed real world testing of a hydrogen combustion engine powered backhoe loader has recently been conducted. The hydrogen engine in question is a development engine, that was paired with an off the shelf diesel optimised SCR system. Despite this lack of optimisation, a result of 0.02g/kWh tailpipe NOx was recorded – 20 times lower than the most stringent existing emission standard, indicating the potential of this technology for ultra-low emissions. Certain manufacturers have conducted or are conducting studies demonstrating the low criteria pollutant emissions levels that can be achieved.

For example, Ricardo Energy and Environment (formerly Ricardo AEA) was subsequently commissioned to use the methodology established for the generation of the London Air Emissions Inventory, and found a negligible impact of these levels of NOx emissions on real world air quality, irrespective of the technology used to achieve those levels. Please see the following link for more information:

https://www.jcb.com/dfsmedia/261086efe15a46f5afb95d093ef038ea/63370-source

18. Are there any other opportunities and/or potential co-benefits?

An opportunity that could emerge would be synergy with other sectors as certain fuels and related refuelling infrastructure materialise. For example, if a supply infrastructure were to develop to provide methanol for use in the marine sector, this could potentially be leveraged for a proportion of the NRMM fleet. Historically there has been synergy between the supply chains for marine gas oil and nonroad red diesel, and new synergies may emerge for alternative fuels.

Similarly, the emergence of a supply infrastructure for green hydrogen or biomethane for use in NRMM can provide opportunity for use in other sectors, although the production of biomethane from liquid manure will be limited by the quantity and location of cattle herds.

Such synergies as exampled above could also lead to cost savings in deployment across larger scales.

In the UK, we have an established ICE and NRMM manufacturing base, and strong R&D capability that is evaluating all technology options for decarbonising NRMM, including ongoing development of ICE operated on low and net-zero carbon fuels. Serial production of engines designed for hydrogen or other low and net-zero carbon fuels could leverage supply chains that have been built up around the production of diesel powertrains with minimal disruption. Intellectual property related to such engines could provide competitive advantage, and the reduced reliance on imported materials and technology would increase UK self-sufficiency.

Lastly, hydrogen can be produced on fixed sites from renewable energy sources, albeit only in modest volumes. This can reduce grid demand and also provides a viable storage for overgeneration of electricity during periods of low demand (supply smoothing through storage).

19. Do you agree that these are the main technical barriers to the deployment of NRMM decarbonisation options? If not, which barriers listed do not apply and/or what additional significant technical barriers exist?

CEA disagrees with the general statement that low and zero carbon NRMM is at low technology readiness level (TRL). Engines validated for use with HVO and other liquid or gaseous biofuels are widely available on the market, as are several models of battery powered compact machinery. Several UK manufacturers have already invested heavily into hydrogen combustion engine technology, and the first examples are expected to be commercially available towards the end of 2024. None of the above, however, detracts from the previously stated challenges that must be considered when selecting suitable powertrains for certain use cases.

In addition to the barriers identified in the CfE, please refer to the following:

Hydrogen fuel cells:

PEM fuel cells are very sensitive to supplied fuel and air quality and it is more challenging to maintain these in an off-road environment. Fuel cells are more susceptible to high levels of vibration and shock-loading than ICE, which can be introduced due to the activity of certain NRMM and their use cases. Additionally, there is concern around degradation and lifetime of fuel cells, as well as batteries, with major refurbishment (or battery replacement) likely to be required during the life of the machine.

An additional challenge for large fuel cells (for example, greater than ~50kW) in NRMM is achieving sufficient cooling, due to the lower operating temperature and limited heat rejection to exhaust of PEM fuel cells compared to ICE.  This is further exacerbated in NRMM by the lack of ram air that is available in on-highway applications from the movement of the vehicle.  A high-power fan with corresponding parasitic load can be required for NRMM with fuel cells.

As with batteries, development and innovation continues but it is not yet clear whether or how the additional challenges of parts of the NRMM sector will be overcome for widespread adoption.

Battery electric:

The weight and mass of batteries to be installed on a machine, as a result of the lower energy density, is an additional barrier and may limit which machines this technology is suitable for. As an example, a 20-tonne excavator today has an approx. 500 litre fuel tank, weighing (when filled) ~ half a tonne, and taking up approx. half a cubic metre of volume. The equivalent energy storage would require approx. 10 tonnes of batteries, i.e. adding 50% on the weight of the machine.

Conversely, in applications where a counterbalance is required (for example, cranes, forklifts), this additional weight may not be a concern.

Although many NRMM and automotive components are similar, it should be noted that battery developments in the automotive sector are not always transferrable to NRMM. Examples include the need for robustness to shock and vibrations in NRMM.

ICE:

The technical barriers listed above are less applicable to ICE operated on low or net-zero carbon fuels, especially drop-in fuels with similar energy density to the incumbent fossil fuels.

This does not mean that the industry is dismissing battery electric or fuel cell powertrains. Development is ongoing and these technologies are expected to be deployed in machine types and use cases where they are suitable.

Indeed, although the barriers described above are applicable to most NRMM types, industrial trucks (e.g. forklifts) used in material handling have proven to be quite suitable for deployment of electric solutions. Industrial truck sales are already greater than 50% battery/electric, and hydrogen fuel cells for industrial trucks are deployment ready as a drop-in replacement for battery/electric with uptake hindered only by the lack of affordable supply of hydrogen. The UK Material Handling Association (UKMHA) will be responding separately to this CfE with more information.

20. Do you agree that these are the main financial and economic barriers to the deployment of NRMM decarbonisation options? If not, which barriers listed do not apply and/or what additional significant financial and economic barriers exist?

CEA agrees with the stated financial and economic barriers, but would like to add:

For use cases where deploying battery electric would mean using two machines instead of one, the CAPEX impact could make this unrealistic, given the high capital cost of many larger NRMM, in addition to significantly reducing the CO2 benefit if assessed on a life-cycle analysis basis. An alternative could be battery swapping, which may be feasible on large, fixed sites (and has been a common practice for industrial trucks e.g. forklifts for some time), although this would still involve additional costs and associated infrastructure where this approach is not already used.

The cost of providing a grid connection to all manner of different sites where NRMM are used is likely to be prohibitive in many cases.

We agree that the higher cost currently of low and net-zero carbon fuels and machines is a barrier to their deployment. The use of these fuels could be encouraged by consistent and predictable taxation policy, with financial benefits being seen by the end users, not just fuel producers. Further, given access to the scales made available by global policy alignment and stability, manufacturers will invest in order to bring down the cost of machinery, although it should be remembered that the NRMM sector does not enjoy the same economies of scale that are available in the automotive sector, meaning that development costs are typically high on a per unit scale.

Global policy alignment, and stability thereof, is considered to be essential, as the UK market is not large enough to sustain a unique decarbonisation pathway. To that end, we would encourage more global outreach before setting any UK policy. It is notable that up to now the EU is looking at industrial decarbonisation on the basis of ecosystems, including, where appropriate, NRMM use within these ecosystems, instead of attempting to assess NRMM in isolation from the ecosystem in which they are used (see question 48).

21. Do you agree that these are the main infrastructure and fuel supply barriers to the deployment of NRMM decarbonisation options? If not, which barriers listed do not apply and/or what additional significant infrastructure and fuel supply barriers exist?

We agree strongly with the identified barriers relating to high cost and limited supply of sustainable biofuels and other low and net-zero carbon fuels, due to limited feedstocks and competing demand from other sectors. As is illustrated in Figure 21 in the feasibility study, HVO for example performs on a par with hydrogen and electric solutions in terms of WTW CO2e abatement potential, with the added benefit of being usable in most of the existing NRMM fleet now (as opposed to the very long timeframe associated with the development and penetration into the market of new technology and machine designs). There is high interest in the market to use this fuel now, but it is being severely limited by supply (and cost). For NRMM, availability of the fuel/energy infrastructure, on-board energy storage capacity, and fuel cost, are key enabling factors for achieving significant decarbonisation.

For electric solutions, the CfE notes that grid connections and grid capacity can be particularly challenging and costly for remote sites to install. We would go a little further to say that certain use cases of NRMM would make grid connections impossible (e.g. excavators deployed in emergency response to river banks to shore up against flooding, or continuously moving worksite to install a cycle lane along an urban road). Additionally, different voltage levels are required depending on NRMM size, and interoperability between voltages and connectors is not guaranteed.  This does not mean that electric solutions are never suitable, but is instead intended to illustrate the danger of mandating specific technologies without considering applications and use cases. More than one solution will be needed, even for a given machine type or archetype, due to the variety of situations in which NRMM are employed. Given sufficient choice, the end-user (with suitable support from the manufacturer) is best placed to select which powertrain technology most closely matches their requirements.

22. Do you agree that these are the main operational barriers to the deployment of NRMM decarbonisation options? If not, which barriers listed do not apply and/or what additional significant operational barriers exist?

For use cases where deploying battery electric would mean using two machines instead of one, the space and charging requirements could make this unfeasible for many sites. Additionally, when assessed on a lifecycle analysis basis, this may not result in the expected carbon benefit, whilst it will have considerably increased the burden on the end user and cost to society.

We agree with the stated barrier regarding increased weight of NRMM using battery electric powertrains, although the impact is not limited to transporting the machine to site. NRMM are often used on soft or uneven ground, where increased machine weight can introduce safety concerns or render the machine unusable.

The ambient operating conditions of a site need to be considered when choosing a suitable decarbonisation technology to deploy. Some technologies such as batteries or fuel cells are sensitive to certain ambient conditions, such as cold climate, impacting operational effectiveness.

On-site safety of tethered electric machines is a concern. Care should be taken to ensure that on sites where tethered electric machines have been deemed suitable, that the large, high voltage cables can be safely managed. NRMM can operate in arduous conditions, with low light and visibility, where the risk of digging through or driving over cables may be difficult to mitigate.

23. Do you agree that these are the main regulatory barriers to the deployment of NRMM decarbonisation options? If not, which barriers listed do not apply and/or what additional significant regulatory barriers exist?

We agree with the list of identified regulatory and policy barriers. We would expand the point on policy certainty to include global policy certainty, and hence emphasise the need for global alignment to reduce investment risk. To obtain successful decarbonisation of the sector, we would urge suitable global outreach to bring other markets along with the UK. The key markets for NRMM, which largely govern development direction and uptake, are the USA, Europe, India, and China. The UK is not a large enough market on its own to support a unique pathway.

Whilst not a current barrier, we would continue to advocate for a technology neutral approach to policy making to ensure new barriers are not introduced by mandating certain technology. Maintaining a technology neutral approach increases the potential for innovation, a great strength of UK industry, and the speed and likely success of decarbonising NRMM.

To allow for use of hydrogen and methane powered NRMM on the road, the DfT are investigating the possible amendment to the Road Vehicles (‘Construction and Use’) Regulations. However, a similar issue requires a different approach for vehicles type approved under Regulation (EU) 167/2013; it has been suggested that this could be resolved by the application of UNECE Regulation 110 in the case of a methane and Regulation 134 in the case of hydrogen.

The Government is a significant influencer in the purchase of NRMM, with large infrastructure projects coordinated by public bodies such as Network Rail, and National Highways. As such, the government can provide strong policy, procurement strategies and financial incentive if required, to mobilise the use of decarbonised NRMM.

Finally, an additional existing barrier relates to current hydrogen safety guidance, mostly published by the BCGA (https://bcga.co.uk/), where there is ambiguity and much of the guidance is focused on applications that are not comparable to construction. An example of where existing guidance fails in a construction setting is the requirement of separation distances of hydrogen storage and equipment from site boundaries, which makes it near impossible to operate hydrogen drive train technology on motorway works without closing multiple lanes. The same applies to remedial roadworks on A and B roads.

24. Do you agree that these are the main knowledge and information barriers to the deployment of NRMM decarbonisation options? If not, which barriers listed do not apply and/or what additional significant knowledge and information barriers exist?

We agree with the barriers listed, in particular a lack of familiarity with new powertrain technologies and how they might impact on the quality, pace, and efficiency of completing the work in which the machines are employed. Manufacturers are still researching and developing many options, with early trials ongoing, so it is too early to be ruling out any decarbonisation options at this stage.

Given that the UK is leading in attempting to determine a decarbonisation strategy for NRMM, there is a significant gap in knowledge in terms of similar international efforts to reference.

Fuel producers have an understanding of the benefit of alternative fuels such as HVO due to how the RTFO works. However, end users may not be able to quantify the benefit, which may limit take up. Awareness could be positively influenced through taxation policy, and in the longer term, a means or standard to define the carbon performance of a fuel that is communicated to consumers.

Long term visibility and stability of the availability and cost of alternative fuels, and Government policy thereof, is essential.

Stakeholder engagement will be essential to ensure the necessary skills are developed to produce, operate, and/or service alternative powered NRMM, and for the distribution and the safe handling of alternative fuels.

25. Are there any barriers to the adoption of decarbonisation options for the NRMM type(s) and/or sector(s) that you are interested in which have not been included in this section?

In order to achieve effective decarbonisation of NRMM, it will be essential to consider the full lifecycle analysis, and supply the tools and assumptions necessary to achieve this (in cooperation with international partners). Focussing only on the use phase of the machines could lead to unintended consequences.

26. For the NRMM type(s) or sector(s) that you are interested in, please score each barrier category (e.g. financial and economic) in terms of its impact on the deployment of decarbonisation options using the scale below. Please provide a rationale for any scores of 4 and 5, noting where applicable any variation by NRMM type, sector, or decarbonisation option.

0 = Don’t know / not applicable

1 = Not at all important

2 = Slightly important

3 = Moderately important

4 = Important

5 = Extremely important

Financial and Economic – 5

NRMM purchases are business to business, where purchasing choices decide commercial success, and are critical for existing business models to continue.

Infrastructure and Fuel Supply – 4

To give investors confidence in investing in the fuel/energy supply chain, clear policy decisions need to be made with a long-term strategy, predictability, and stability.

Operational – 4

The ability to deliver a project on time, to budget, safely with minimum resources is critical for progress within the industry.

Regulatory – 4

It is imperative that there is an internationally harmonised, technology neutral, goal-based approach to ensure a sufficient market.

Policy and regulation need to be joined up across all aspects of manufacture, usage (including energy system), deployment, and end of life.

Technical Readiness – 3

Knowledge and Information – 4

Manufacturers generally possess all the necessary knowledge and information on the alternatives which are available. However, education about the alternative technologies is key to raise awareness amongst end-users and inform the public: clear and fact-based communication on lifecycle CO₂e of different technologies in various use cases is key, as well as on servicing, trade-offs between technologies, necessary adaptation of work practices, etc.

27. How does the current usage and ownership structure of NRMM in the UK present opportunities and/or challenges for decarbonising NRMM?

Total cost of ownership is generally very important.

However, for some sectors where a high proportion of equipment is hired instead of owner operated (such as construction equipment, gensets and materials handling), the entity purchasing many of the machines has little direct interest in the operating costs of the machine, since someone else will be paying for the fuel. Therefore, many purchase decisions may not be swayed by total cost of ownership, which is at odds with the fundamental basis of the ‘least-cost pathways’ modelling approach used in the feasibility study. This is therefore a challenge for decarbonising NRMM for those options which represent lowest TCO, because the natural market incentive isn’t necessarily there in those cases, compared with entities that both purchase and operate NRMM.

The current high rental market poses challenges in that the rental company faces two choices – either purchase multiples of the same machine but with different powertrains, to cater to all potential use cases, or purchase one machine that satisfies their perceived majority of the market that may then be unusable in certain circumstances. The latter may be more likely given the high cost-competitiveness of the rental market.

Conversely, purchasing incentives for rental companies could be an enabler for decarbonising.

Lastly, there needs to be a strong second and subsequent user market for machines to ensure sufficient resale value and continue to support investment.

Chapter 4 – Policy considerations

28. Do the policies contained in Tables 2 and 3 provide sufficient support for NRMM decarbonisation? If not, what are the gaps in the current policy landscape?

As mentioned in our answer to question 36, amendments to the Road Vehicles (‘Construction & Use’) Regulations to allow gaseous fuelled NRMM on the road are under consideration but a solution for gaseous powered agricultural type-approved tractors is still required.

Relative fuel taxation should be investigated to provide adequate incentive for take up of drop-in fuels such as HVO, especially since the entitlement to use rebated ‘red’ diesel was removed from most non-agricultural users of NRMM.

The ‘Action Plan on Accelerating Grid Connections’ will no doubt help, but the extent to which it supports NRMM decarbonisation may be limited if only focussing on improving speed of connections. Many distribution networks, especially in urban areas, are already working near full capacity. Adding for example several hundred or thousand kVA to a substation in order to recharge NRMM at a construction site may not be possible, especially when coupled with ambitions to electrify transport and domestic heating in the same areas. Jobsites may have a short term need for MVA capability but revert to kVA capacity upon completion, with no current feasible solutions to this issue.  Furthermore, the alternative of moving large batteries not installed in a machine between sites may conflict with provisions laid out in ADR (Dangerous Goods) regulations. Therefore, policies to increase electricity distribution network capacity will also be necessary to support deployment of electric NRMM for long-term and fixed sites.

To encourage and de-risk investment, the development, manufacture, and use of decarbonised NRMM, including those fuelled on low and net-zero carbon fuel, should be classified as environmentally sustainable activities.

Hydrogen fuelled mobile machinery falls under the Pressure System Safety Regulations and therefore, every time a piece of hydrogen powered NRMM is relocated to a different site, a new Written Scheme of Examination (WSE) is mandated. This examination must be conducted by a ‘competent person’ who has the necessary skills and knowledge to assess the machinery. This requirement would be particularly burdensome to hire companies operating hydrogen machinery. As more hydrogen powered NRMM enters the market, it is likely that the number of available competent persons will become a significant limiting factor. CEA suggests that removing mobile machinery that use H₂ as a fuel type from the requirements of PSSR would alleviate this issue. Hydrogen machinery all go through a third-party approval process as required by the Pressure Equipment (Safety) Regulations 2016, which requires annual safety inspections.

Of those policies that are based on hydrogen, they are heavily skewed towards the production, storage, and distribution of hydrogen in large volumes. Whilst fuel availability is an important aspect of encouraging hydrogen adoption, there is little support for smaller volume hydrogen supply (e.g. exchangeable cylinders for use on NRMM, in a similar model to LPG for forklift trucks) or for the adoption of decarbonisation technologies for the USE of hydrogen (e.g. funding to help redress the increased cost of hydrogen powered NRMM, either at the point of development by the OEM, or at the point of use / purchase by their customers).

A policy regarding engagement with international partners would be beneficial, in ensuring that there is an aligned market for decarbonised NRMM.

Importantly, we believe that any new policies aimed at decarbonisation of NRMM must be technology neutral, facilitate innovation, and avoid ‘picking winners’.

29. Are you aware of any other policies (either current or in development) that could positively or negatively impact NRMM decarbonisation?

The Government’s ‘Construction Playbook’ (https://www.gov.uk/government/publications/the-construction-playbook), and related guidance on promoting net zero carbon and sustainability in construction published in September 2022, require contracts above a certain threshold to submit a whole life carbon projection, covering construction / in-use / decommissioning phases. BSI PAS2080 supports this, and is being adopted across Tier 1 contractors especially in highways construction. This approach is technology neutral, focusses resources on where most overall impact can be achieved, and incentivises the use of NRMM decarbonisation solutions that are most appropriate to the project. This is already driving much of the demand for HVO mentioned in our response to question 34. This is a good example where the approach being taken is for the ecosystem as a whole (in this case construction), rather than focussing solely on the NRMM. The key issue of importance is that the activity achieves net zero, rather than the NRMM.

30. Are the IDS policy principles appropriate in relation to NRMM decarbonisation?

Yes, especially the point about ‘intervention should be technology neutral, and fairly share the cost and risk between industry, consumers, and taxpayers’.

31. What additional policy principles should government consider with regards to NRMM decarbonisation?

The mandating of single technology solutions for any given use case should be avoided at all cost. Due to the huge variety of types of NRMM, and in how and where they are used, there is no one solution that will work in all cases. As an extension of this principle, CEA believes that a multi-technology approach should be actively promoted, through open fuel taxation, proper definition and incentivisation of decarbonised NRMM, and technology leadership through Government-backed projects.

Where policy sets any targets, it should set performance-based targets, not solutions. These targets should not favour particular solutions, but instead allow the best solutions to emerge for each sector of the economy utilising NRMM. The targets should not focus on tailpipe emissions, but use a lifecycle analysis, on a global basis.

We would also apply the IDS policy principle – regarding addressing market failures or barriers to decarbonisation – to ensure policies address the supply of alternative low and net-zero carbon fuels to NRMM in sufficient quantity and at suitable cost.

As mentioned previously, policy alignment with major international markets should be a key objective.

32. How could government best contribute to establishing optimum market conditions to increase the rate of NRMM decarbonisation?

Quickly act to increase supply of drop-in fuels such as HVO and ensure availability to and use in NRMM in sufficient quantity and at suitable cost. This could be via investment in production, or incentivising use via favourable taxation, or even requiring use of such fuels in the tendering process for Government projects.

In the longer term, continue the above but expand to all other liquid and gaseous low and net zero carbon fuels.

We also recommend Government announces its low carbon fuel strategy as soon as practicable, so all stakeholders have visibility and stability to plan investment.

33. How might the role of government change over time in aid of NRMM decarbonisation?

Given that the UK is the first nation in the world to attempt setting a strategy for NRMM decarbonisation, initial policies will have to be set with little in the way of international benchmarks to be guided by. Progress will have to be closely monitored, and incentives will be needed to stimulate investment in and uptake of NRMM decarbonisation solutions.

As explained in other questions, however, manufacturers will not be able to support the UK with a unique decarbonisation pathway, so as the international NRMM decarbonisation landscape develops, the UK will need to promote their approach internationally; otherwise, it will likely be necessary for the UK to adapt and adjust its approach to maintain sufficient alignment.

Lifecycle analysis methodologies (covering jobsites and processes, not machines in isolation) should be developed and adopted into reporting and monitoring of progress towards net zero, adjusting policies as needed.

Monitoring should also focus not just on progress towards net zero, but the impact to industry and other stakeholders. Decarbonisation will have impacts across the economy.

34. What factors should we consider when assessing the suitability of different policy options?

Cost Impact and Burden Distribution: Understanding the cost impact throughout the supply chain is crucial. This includes assessing how costs are distributed among various stakeholders such as the project owner, Tier 1 suppliers, contractors, Original Equipment Manufacturers (OEMs), and fuel suppliers. Identifying who carries the burden of these costs can help in formulating fair and effective policies.

Sector-Specific Policies: The policy approach may need to differ between sectors. For instance, the requirements and challenges in the construction sector might be different from those in the agriculture sector. Tailoring policies to the specific needs and characteristics of each sector can enhance their effectiveness. This is similar to the approach the EU is taking, as mentioned in Question 48.

Flexibility for Future Technologies: Policies should be flexible enough to accommodate future technologies. This ensures that the industry is not boxed into one solution and can adapt to technological advancements. A technology-neutral approach can encourage innovation and allow for the adoption of the most effective decarbonisation solutions as they emerge.

Full Lifecycle Analysis: Focusing solely on tailpipe emissions can limit the real-world CO₂ benefit. A full lifecycle analysis should be conducted to determine the true environmental impact of different decarbonisation options (focussed on site, not just machine operation). This includes considering the emissions produced during the manufacturing, distribution, operation, and end-of-life disposal of machinery.

35. Are there any existing models or international examples of policy that government could implement to incentivise NRMM decarbonisation?

European Commission is developing strategies for GHG reduction organised around various industrial ‘ecosystems’. Rather than there being a specific ecosystem for NRMM or dealing with NRMM as a separate topic, NRMM are separately covered in each of the ‘ecosystems’ within which they are employed. Each industrial ecosystem then determines the appropriate decarbonisation pathway for its unique activities (including its uses of NRMM) in order to achieve GHG reduction targets. Further information can be found here: https://single-market-economy.ec.europa.eu/industry/transition-pathways_en

UK Government Subsidisation of Heavy Duty Trucks: The UK government provides Plug in Truck grants of up to £16k for vehicles up to 12t and £25k for vehicles over 12t. Likewise, a technology neutral scheme could be implemented for NRMM decarbonisation technologies, including for those powered by low or zero-net carbon fuels, to stimulate demand.

California’s Clean Off-Road Equipment program (CORE) incentivised various machine segments (CORE). https://californiacore.org.

Similar to the UK government grants above, grants are provided to end-users to offset incremental costs of decarbonised technology.  In this case vouchers redeemable at approved dealers are provided. As noted in the previous paragraph, CEA believes any such scheme should be technology neutral, including in scope NRMM powered by low or zero net-carbon fuels.

The ICCT has published a briefing paper on incentivizing zero-emission off-road machinery:

https://theicct.org/publication/incentivizing-zero-emission-off-road-machinery-dec23/

This document outlines various existing policies and regulations, whilst concluding with five suggestions to policy makers.  CEA notes that the ICCT document does not go into detail either on use cases nor on the merits and trade-offs of various low and net zero carbon technology solutions. The general approach of building a database/inventory, clear and stable policy direction, providing fiscal incentives and ensuring the engagement of all stakeholders are all strongly supported. However, CEA believes that, as outlined in this response to the CfE, simply targeting ‘NRMM’ rather than the industries and use-cases in which those NRMM operate is too simplistic; CEA does not believe that developing NRMM focused regulations is an effective way forward.  Rather, the target should be creation of an environment where there is a clear end-user benefit of procuring low and net zero carbon NRMM.  Finally, consistent with prior comments in this CfE response, CEA would add the need for policymakers to work together at a global level thus creating a larger market for decarbonised NRMM.

Note, however, that we have found some incorrect and/or misleading statements in the ICCT paper linked above, as follows:

“The state of New York adopted a 100% zero-emission sales goal for new off-road equipment for 2025, but it is not binding at present” – This should be “by 2035, where feasible.” In contrast to the paragraphs covering light, medium and heavy-duty vehicles, the off-road paragraph of the bill also directs the department to act consistently with “safety, technological feasibility and cost-effectiveness”.

“In Europe, Finland has set the goal of 100% “fossil-free” construction sites by 2025” Actually, the goal is to operate some 100% fossil free sites, not have 100% of sites fossil free.

“California is considering proposing Tier 5, which has more stringent limits, but this is also not a filter-forcing standard.” – It is expected to be DPF forcing > 19kW.

“Is considering GHG emission standards in the more stringent Tier 5 rulemaking process, which might include limits on CO2, methane (CH4), and nitrous oxide (N2O).” The proposal is to set “capping” standards on these pollutants, to makes sure that emissions do not get worse as a result of the significantly lower NOx standards. They are not intended to drive down CH4 and N2O emissions from current levels, and CO₂ is only reduced for some power categories, and only by a few percentage points vs. current baseline.

“VOLVO ZERO-EMISSION PILOTS section” The site did not maintain the production rate of the reference conventional operation. The crusher and loader in this pilot still had diesel engines (albeit hybridised). The site required a 1MVA grid connection.

Also, refer to our answer to Question 45 regarding fuel taxation policies.

36. Is there any further relevant information that has not been asked about which you would like to submit?

Part II – Industrial NRMM detailed modelling assumptions

Please only respond to this part of the call for evidence if you have experience relevant to the content of this section.

1. Can you provide evidence as to the typical hours and pattern of usage of any of the machine types listed in Annex A across an average monthly period? Please specify the sector and situation of use.

As CEA, we don’t hold aggregate data for the NRMM types we cover collectively.

Individual member companies and associations will be submitting data for their respective scope.

However, note that ‘typical NRMM usage’ is a difficult concept to define and can be misleading. ‘Typical usage’ or an ‘average monthly period’, even for a given machine type, are both highly dependent on the use case, and as such highly variable. Whilst ‘average’ use may be appealing for modelling, it fails to capture the extremes, which can be very important when assessing feasibility of decarbonisation options.

2. We are interested in the impact that the duration of a site has on the ability of the NRMM used on it to decarbonise. We assume that the construction sector is the only industrial sector to have temporary sites (and that seaports, waste, manufacturing, and mining/quarrying sectors are all located on sites intended for long-term or permanent use). Can you provide any evidence or data covering the duration and location of sites or projects within the construction sector?

As CEA, representing manufacturers, we do not hold data on construction site duration and location.

However, we would challenge the assumption that construction is the only sector to have temporary sites. Other examples would include:

• Disaster response or emergency machinery
• Forestry
• Festivals/shows/exhibitions
• Mobile backup and emergency generators and pumpsets for utility companies, which are brought onsite for a limited period as needed
• Short term agricultural contracting for e.g. harvesting, foraging, spraying etc.
• Short term temperature management solutions

Even for a long-term site, certain machinery may only need to be used for a short period, making justification of the necessary infrastructure unfeasible. Site duration should not be conflated with machine duration on-site.

3. ERM’s research suggests that short-term sites will have fewer fuel switching options due to infrastructure availability, particularly outside urban areas. Are there other barriers related to site duration?

CEA agrees that short-term sites will have fewer fuel switching options. However, this isn’t limited to sites outside urban areas. Short term sites in urban settings will still have limitations on fuel switching options.

As previously mentioned, site duration is not the same as machinery duration on site. An example of machinery used for short period on permanent sites would be that of a contractor operating a combine harvester from field to field.

Even for long-term sites that will have infrastructure installed, there will be a need to operate machines on that site to set up the infrastructure in the first place.

On sites where infrastructure installation is possible, the costs of installation may still be prohibitive, depending on the nature of the project.

4. It is assumed that the machines within an archetype share similar characteristics, and are used in a broadly similar manner, such that the decarbonisation options available are the same for all machines within the archetype. This assumption is important to ensure modelling feasibility. Do you think that the industrial NRMM archetypes set out in Table 4 form an appropriate grouping for this purpose? If not, why not?

CEA has a fundamental concern over the suitability of representing NRMM via these archetypes, as well as the statement that ‘the decarbonisation options available are the same for all machines within the archetype’.

Although the feasibility study goes into some detail on ‘hard to abate’ cases, this very important factor is not included directly in the archetype mapping. As the question states, the current archetype structure assumes that within an archetype, the decarbonisation options available are the same for all machines within the archetype. Unfortunately, that could lead to a conclusion such as ‘archetype A should all go to decarbonisation option 1’, whereas that may render many of the machines in that archetype unusable in certain use cases. The machine use cases are so important, that they dominate over the defined machine archetypes in terms of suitability and feasibility of decarbonisation options.

Put simply, there cannot be a mandate or expectation for one solution (even per archetype), as even a single machine model type can be used in a multitude of different ways and locations that will necessitate the availability of more than one powertrain option to end users. Thus, we re-iterate our position that any policy intervention should be technology neutral.

For any given machine on any given day, the optimal solution would be dependent on multiple factors including:

• The hours of use (and therefore available downtime, if any)
• Proximity to infrastructure
• Specific site
• Operator
• Duty factor
• Rate of loading
• Climatic conditions

5. Do you agree or disagree with the assessed suitability of the alternative powertrains for the archetypes set out in Table 5? If you disagree, please provide explanation and provide evidence where possible.

CEA disagrees with the general statement that low and zero carbon NRMM is at low TRL. Please see our detailed response to Question 32.

As mentioned in our answer to Part II Question 4, we disagree with representing NRMM via the archetypes.

6. Do you agree with the years of availability assumed for each archetype? If not, please provide evidence to the contrary.

As stated previously, CEA does not agree with the use of archetypes to define NRMM. The following comments relate only to the technology availability:

• HVO and B20 – we generally agree.
• Hybrid – the technology is generally available so we do not agree with the orange scoring for archetypes 4 and 6 – they should be green as per the others.
• H2 ICE – we disagree with the assessments. H2 ICE between 37kW and 560kW (archetypes 4-7 and 9-13) are expected to be widely commercially available by 2030 (light green).
• H2 fuel cell – we generally agree.
• Tether electric – we generally agree.
• Battery electric – we generally agree.

Biomethane – this was ruled out early on in the analysis but is already at TRL 8+ and used in tractors in the medium power ratings band.  As noted in the response to prior questions, other low and net zero carbon fuel solutions are also anticipated, including methanol and ethanol and these should not be ruled out.

CEA also notes that the TRL levels used in the report are not aligned with conventional definitions. Definitions such as those published by UK Research and Innovation (UKRI) would be more appropriate.

7. Do you agree with the assessment of the efficiency of the powertrains listed? If not, please provide evidence to the contrary.

CEA believes it needs to be ensured that the entire system, up to a common reference (e.g. the flywheel of an internal combustion engine or the output shaft on an electric motor), must be considered when evaluating the efficiency of a driveline. For internal combustion engines, this would include the alternator, fuel pumps, coolant pump and oil pump. For a hydrogen fuel cell, this might include the air compressor, water pump, hydrogen pump, power electronics and motor. It is not clear whether this approach has been taken in the feasibility study.

In general the efficiency of powertrains will vary considerably depending on how and where the machine is being used. Different technologies will also have a different efficiency profile across the load range, with some showing better efficiency characteristics at lower load, and others better at high load. Ambient conditions will also influence this.

Individual manufacturers will be submitting their own data, but some general observations are as follows:

• The efficiency of hydrogen fuel cells and hydrogen ICE are likely much closer than that indicated.
• As load increases, efficiency of internal combustion engines increases, however the inverse is true of hydrogen fuel cells, which achieve peak efficiency at low load. The figure below published by McKinsey and Co. illustrates this. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-hydrogen-combustion-engines-can-contribute-to-zero-emissions
• Hydrogen fuel cells are highly sensitive to changes in ambient conditions. Published data has shown efficiency reduced to ~20% at low ambient temperatures (see https://www.osti.gov/servlets/purl/1606353#:~:text=The%20measured%20FC%20stack%20peak,of%20maximum%20power%20is%2058%25)
• Diesel/HVO/B20 thermal efficiency should be approx. 40%
• Hybrid systems could be applied to any ICE, not just fossil diesel (and at least the lower end of the stated range should be higher, as per diesel)

8. Do you agree with this definition of ‘hard to deploy’? If not, what other characteristics should we take into account?

In general, we do not agree with the need for two of the stated conditions to be met to determine ‘hard to deploy’. Instead, an unfavourable aspect of any of the stated conditions would be sufficient.  The criteria listed are all valid aspects of the use case, which CEA believes to be of primary importance when determining the suitability and feasibility of decarbonisation options. The fundamental question that links the listed criteria is: How easily can sufficient fuel be supplied to the machine?

The definition also implies equal difficulty for all fuel switching options, however in most cases this will not be true. The evaluation of each of the conditions will differ from technology to technology. An aspect of a use case that would make one technology solution hard to deploy would not pose a challenge for another. It is anticipated that the electrification options will be the most challenging (based on the factors included in the ‘hard to deploy’ definition), whereas alternative low or net zero carbon fuels should be able to be supplied to site in much the same way as fossil fuels are today (assuming, of course, that they are available in the market in sufficient quantity and at suitable cost).

We disagree with the example quoted on page 38 of the CfE, as follows: “For example, a construction excavator working in urban areas will not be hard to deploy, as there is easy access to electrical infrastructure to recharge a battery powered alternative”. There will be cases where the electrical infrastructure is not available, even in an urban environment, particularly for equipment which is used on a constantly moving site.

9. Do you agree with these estimates of the percentage of hard to deploy machinery across different industrial sectors? Please clearly specify the sector(s) that your answer relates to and provide any specific evidence that can validate your view.

In general, the estimations do not seem appropriate, but we do not have aggregate data to validate them. Individual members may submit data appropriate to their scope.

As mentioned in the answer to Part II Q8, the technology being evaluated will impact whether a use case is hard to deploy. The following is based on the assumption that the Call for Evidence is considering battery electric or tethered machinery: An estimate of 15% for construction seems extremely low; on the other hand, 76% for mining seems high, given existing use of tethered electric in mining, and the fact that mines tend to be long term sites with the ability to install infrastructure.

If considering liquid low or net-zero carbon drop-in fuels, these estimates would all seem high.

It is notable that the question has not considered all sectors.

10. Do you agree with the assumption that fuel switching options within the ‘hard to deploy’ category will face a delay to becoming commercially available and that 10 years is a reasonable assumed time period for this delay? If not, what alternative would you suggest?

In the case where the reason for ‘hard to deploy’ is one that can be solved through eventual infrastructure build out (e.g. hydrogen), then a delay like this makes sense. However, if the reason is e.g. a remote and/or temporary site where you simply cannot get a grid connection, then such a delay is meaningless – rather, electrification options would be simply unsuitable.

Challenges in decarbonising NRMM cannot all be solved by time.

11. Do you have any comments to make about the calculation used to determine the CAPEX of a machine and about the costs set out in Table 7? Where possible, please provide evidence to support your view.

It is unclear if the costs set out in Table 7 include all components and systems required by the individual powertrain options. For example, in addition to the costs of a hydrogen fuel cell, the additional costs of a battery or supercapacitor, motor, power electronics, coolant pump, compressor, and filter will have a substantial impact to the total powertrain cost.

Generally, the costs quoted for electrified powertrains seems low. Individual members will comment separately on specific costs.

While CAPEX and OPEX are addressed separately, there can be interactions that should be accounted for. The scenario quoted in section 35 of the CfE, in which more than one machine is required to replace the incumbent, due to limitations in onboard energy storage and corresponding uptime, will have the effect of doubling or tripling CAPEX.

12. Latest research suggests that tethered-electric machines would require a cable estimated to cost £1,200 (cable is assumed to be around 20 metres long). It is assumed that this cost would remain constant up to 2050. Do you consider these assumptions to be fit for purpose in assessing the relative costs of different options? If not, please provide evidence to the contrary.

We do not have expertise in such cabling in our membership so cannot comment, but would note that this cost is inconsequential when compared to machine CAPEX and operating costs. Also, 20m would likely be far too short for many sites.

Further, the cable is not the only cost associated with tethered machinery. An electrical connection that can supply the power used by each tethered machine will also be required. Using an example of mining equipment, which is typically lower mobility, this would require connections capable of providing 600 to over 2000kW per machine.

The cost of safe cable management should also be included in CAPEX costs of tethered machinery.

13. Latest research suggests that on-site hydrogen infrastructure costs will start at £7/kg of hydrogen (delivered to the machine) in 2020 and decline linearly to £2/kg in 2050. Do you consider this assumption to be fit for purpose in assessing the relative costs of different options? If not, please provide evidence to support your view.

We do not have sufficient data to endorse nor contradict the cost of £2/kg in 2050, but would note that it may be optimistic, and there are always challenges with predicting the future – especially costs.

The current cost of hydrogen delivered to NRMM on site ranges from £15 to £200/kg depending on the quantity ordered and the storage type. Even for bulk users on fixed sites, the current cost of hydrogen is far higher than that shown in table 8. Therefore, the projections appear optimistic, although we agree that costs will fall as production capacity increases, technology develops and further UK Government Hydrogen Allocation Rounds contracts continue to be awarded.

Some further reasons for concern would be, fundamentally, the necessary ‘green’ hydrogen being made via renewably produced electricity is unlikely to be cheaper than the electricity used, unless there are excess electric grid capacity economics coming into play. However, the latter would lead to large inefficiencies of the electrolysers – they need to run at a continuously high load to ensure the efficiencies and economics are satisfactory. Further, the analysis in the feasibility study to generate the £2/kg figure assumes (and is heavily skewed by) a utilisation rate of the hydrogen refuelling station (HRS) of 80%, but this is unlikely to be realised over the entirety of a project. Capital infrastructure inherently needs to be sized for the peak demands during a project, but actual utilisation over the course of a project will fluctuate significantly.

Lastly, the analysis also assumes a fixed cost for operation and maintenance of the HRS, for both the 2020 and 2050 assessments. This does not make sense because the 2050 estimate assumes 4x hydrogen dispensed vs the 2020 estimate, which surely would lead to higher operating and maintenance costs of the HRS.

14. Latest research suggests that battery infrastructure costs will start at £500/kW of charger power output in 2020 and decline linearly to £350/kW in 2050. Do you consider this assumption to be fit for purpose in assessing the relative costs of different options? If not, please provide evidence to the contrary.

We do not have expertise in battery chargers in our CEA membership so cannot comment. However, we would expect the grid connection cost to far outweigh the charger cost.

Larger high capacity chargers may need additional cooling and maintenance keeping costs high, but it is expected that scale, coming mainly from the commercial vehicle on-highway segment could allow a linear cost reduction as stated.

15. It is assumed that machines will have at least 8 hours to charge overnight and that a suitable battery size will be selected such that a full day’s work can be performed without needing to recharge during the day. Do you consider these assumptions to be fit for purpose in assessing the feasibility of different options? If not, please provide evidence to support your view.

That might be representative for many use cases, so we understand the use of this assumption in the context of modelling the whole UK fleet. However, the use of NRMM is so varied that this average is extremely unrepresentative for many use cases, where it would not be realistic to do a full shift on one charge or charge overnight. For instance, for hauling applications you have to offset payload capacity to weight of batteries, therefore you may need to shorten the shift or increase the number of journeys. Time sensitive operations may require 24/7 operation such as harvesting, infra-structure projects requiring road/rail closures, or emergency response due to weather events or other natural disasters. These events typically require coordinated, simultaneous, uninterrupted use of many machine types.

16. What do you see as the plausible pathways for the decarbonisation of industrial NRMM within the sector(s) that you are interested in? (Where multiple sectors are relevant to you, please clarify if your response varies by sector).

Fundamentally, we see that ICE operated on low or net-zero carbon fuels will be necessary as a core part of the decarbonisation of NRMM beyond 2050, alongside electric solutions, including batteries, tethering, and fuel cells.

Each technology has strengths and weaknesses, as well as specific enablers, and the availability of multiple decarbonisation options that can be matched to the use case is key to the deep decarbonisation of the use of NRMM across the economy.

Where a suitable grid connection exists, and the machine is stationary or low mobility, tethering could provide a low-cost solution, if site safety can be adequately managed. As previously stated, many machine categories are highly mobile, with telematic data showing that even relatively large-tracked excavators may move up to 5km in a single day. Estimates for power delivery to site range from a minimum of 2MVA, up to around 6MVA for high power sites. Tethered machinery has been available for many years. The fact that the technology has not achieved significant market penetration speaks to the challenges of deploying tethered machinery, despite its apparent advantages.

If the machinery is higher mobility, then battery electric may be more suitable than tethered solutions. The work schedule must be able to accommodate for downtime due to charging, and the grid connection must be capable of delivering the energy required by a site. The cost of a suitable sized battery pack is a major obstacle, especially for machines with high energy demands. One extreme, but real-world example observed through telematic data is of an excavator, working a 23 hour day, which consumed 310 litres of fuel. An equivalently sized battery pack, accounting for the increased efficiency of a battery electric powertrain would require 1,550kWh of capacity, would weigh 11-tonnes and cost approximately £440,000. Battery electric would therefore be most suitable for smaller, low-energy and low utilisation machines.

Where limited or no grid connection is available, or when the work program is too intensive to allow for charging, then liquid or gaseous low or net zero carbon fuelled machines will be necessary.

When low or net zero carbon fuel is used in an internal combustion engine, all the inherent advantages of ICE technology is retained, namely cost-effectiveness, robustness, serviceability, product lifespan, simplicity, and fast re-fuelling.

For work where high power is required, the quality of hydrogen cannot be guaranteed, or where cooling, dust or vibration may be a concern, then hydrogen combustion engine powered machinery can work as a 1:1 replacement of a diesel-powered machine, whilst CO2 will be reduced to trace levels, and gaseous emissions can be reduced to trace levels. Hydrogen supply and infrastructure must be developed to enable widespread adoption.

Where very high energy payloads are required, the high energy density of drop in fuels such as HVO, liquid biofuels or e-fuels may be attractive to the end user. Proper scrutiny of the production process will ensure that the environmental benefits are realised, but if correctly controlled, substantial WTW CO2e reductions could be realised even in the existing fleet, many of which may still be in operation beyond 2050 due to the very long lifetimes of NRMM.

If high purity hydrogen is readily available, the site is clean and ambient conditions are moderate, or when work takes place in confined environments, then hydrogen fuel cells may be considered. Challenges of high powertrain cost and low sustained power delivery must still be overcome. Durability of the technology when subjected to the shocks and vibration encountered on many sites is still a significant concern.

As can be seen above, for NRMM there is currently no line of sight to completely replace ICE with other technologies in the long term, due to the wide range of applications and use cases.

17. Do you have any comments to make on the pathways presented in Chapter 5 of the ERM study?

The pathways and associated modelling represent a large and complicated piece of work, and we commend the project team for attempting to produce such a model. However, there are some significant limitations, as highlighted by the project team in Section 5.1.2 of the feasibility study. We agree with those limitations, and would add the following:

Use of lowest TCO to determine sales:

As noted in Part I Question 40, the ownership structure of NRMM in the UK means that many of the machines are purchased by a different entity to that which will use them. Therefore, TCO isn’t always the deciding factor, since the purchasing entity is somewhat removed from the operating costs of the machine. Additionally, as noted by the project team, whilst the modelling assumes 100% of sales will go to the modelled lowest TCO option in each IND-database row, in reality a mix of technologies is expected.

Use of archetype mapping in various inputs to the modelling:

As noted in Part II Question 4, we have a fundamental concern over the suitability of representing NRMM via these archetypes, and therefore the representativeness of the model inputs that are structured around those archetypes. The use case of the machine is not captured in that structure but is extremely important when it comes to suitability and feasibility of the different decarbonisation options. The study attempts to handle this via modelling ‘hard to deploy’ machines, and assuming they will be available to market in a later timeframe. However, some decarbonisation solutions are simply not suitable for these ‘hard to deploy’ machines. For example, battery electric will not benefit from an additional 10 years of development time for use cases where there is no access to electricity – it is simply not a viable solution. This is somewhat approximated in the modelled scenario 3, where battery electric is prevented from being chosen for archetypes 6-8, and 11-14. But again, this is done against the archetype structure, without fully considering machine use case, so is not ideal.

Modelling the use of HVO and B20 (and other drop in fuels):

The project team acknowledge that due to how the model is constructed, the use of HVO and B20 (and other drop in fuels) can only be modelled by new machine sales. Therefore, the immediate take up of these fuels is artificially constrained, since the model can’t account for the existing fleet starting to use these fuels now. Despite this, however, modelled scenario 1 still predicts a large uptake of HVO, and the potential for a corresponding significant abatement of CO₂e emissions where availability of HVO is unconstrained. Of course, the actual availability of HVO may not be able to meet this level of demand, but it demonstrates the abatement potential of that option, if given sufficient policy support. Coupled with the WTW CO₂e performance of HVO being shown to be on a par with hydrogen and electric solutions in Figure 21 in the feasibility study, there is further support to HVO (and other low or net-zero carbon drop in fuels in represents) being a valid long-term solution where others are not suitable.

Lastly, other fuel options not considered in the modelling may yet have a valuable contribution to make to NRMM decarbonisation.

18. Are there any other comments or evidence that you would like to provide in response to the content and findings of the ERM study published alongside this call for evidence?

    CEA and its members are committed to a decarbonised future for NRMM. The ERM study is a valuable first step in evaluating the pathways available to achieve this, but as noted in the prior answers, CEA has significant reservations regarding the use of archetypes to evaluate NRMM decarbonisation options, and the scenarios evaluated in the report. We would welcome the opportunity to further input to its development.