A view on the 2030 ban on petrol and diesel car sales...in bullet points

January 19, 2021

Written by: Mark Truman

3 min

A view on the 2030 ban on petrol and diesel car sales...in bullet points

“How is the move to a 2030 ban on new petrol and diesel car sales going to impact the fuel industry?” answered in bullet points.

Why am I well positioned to comment?

  • I used to work in renewable energy, carbon trading and upstream oil
  • I now work in the fuel retail industry
  • I am a know it all (a humble one)
  • My old man owns a Tesla 3 and it’s pretty amazing

How will this move impact fuel duty?

  • The Institute for Fiscal Studies warns £40bn in road taxes is at risk from the 2030 petrol and diesel car ban.
  • A 2030 ban would lead to a slow decline in revenue from fuel duty (already declining)
  • £40bn sounds like a lot, but it’s easily borrowed/stealth taxed
  • Effectively, by announcing this target, this government is borrowing this money from future governments for a political win anyway
  • But, it also gives them a potential reason to raise fuel duties / road taxes in the near future at a time when purses are significantly stretched

Are there comparables?

  • Yes, the solar industry where increased tax on fossil fuel paid in part for FIT (feed-in-tariffs) to support the transition until solar became profitable on it’s own.
  • This is a likely cycle for the transition to EV of which we will have to move into the increased tax phase.
  • In other words, don’t expect EV drivers to pay for the luxury of more charging grids or the conversions needed.
  • It may be those who will not be able to afford to buy electric vehicles who have to ship the cost.

Will we have enough electricity?

  • Yes...well...sort of.
  • Daily electricity has two really important factors; baseload and peakload.
  • Baseload is the minimum amount of power that a grid needs at any one time.
  • There will be an increase on the baseload, but nothing dramatic.
  • Renewable energy is not really used for baseload because it needs to be guaranteed (and if the wind doesn’t blow…)
  • Peakload is as it sounds, the peak point that electricity is used in a day. Usually renewable energy is used to cover these rises.
  • This really ugly image I found from nuclear-power.net below shows what I mean:
a chart showing electricity generation by source - overall. It shows base load and peak load. Solar seems to be strongest
  • However, there could be a reasonable impact on when that peakload happens if everyone is coming home and charging their EVs at night.
  • As we know, the sun does not shine at night, meaning this new peakload will need some tweaks to the grid.
  • And here is the big problem; EV will be taken up mainly in suburban areas. These particular areas will need large and potentially expensive changes to their infrastructure. So expect your council tax to go up if you live in the ‘burbs.

How realistic is a 2030 target anyway?

  • It’s not really. Global pandemics, Brexit, the rise of populism - we’ve got enough to keep us occupied until 2080 as it stands.
  • At the moment there is no concrete plan and governments seem to just update their targets and commit a few billion here and there.
  • Also, to achieve “net zero emissions by 2050”, surely you have to consider the source of vehicle batteries. China, the leading producer of batteries, is the world’s largest CO2 polluter, producing 10.06 billion metric tons in 2018.

So if I am a fuel retailer, or in the industry, should I worry?

  • No, you shouldn’t worry, but you should care.
  • EV will continue to grow and be part of the mix of vehicles on the road.
  • Stations can benefit from accommodating EV drivers, but it’s still many years away from being essential.

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