Bus Services (No. 2) Bill [ Lords ] (Seventh sitting)

Rebecca Smith Excerpts

Committee stage
Thursday 3rd July 2025 Public Bill Committees

[Jerome Mayhew]

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.

[Rebecca Smith (South West Devon) (Con)]

I want to expand a little on what my hon. Friend was saying about sustainable fuels that are, literally, drop-in fuel alternatives. Anyone watching the British Grand Prix this weekend knows that motor racing is beginning to use such fuel. There is real appetite for manufacturing it in the UK, but regulations get in the way of that happening at the moment. I have secured a meeting to share that with the Minister’s colleague, the Secretary of State for Energy, because it feels like a significant opportunity that would impact not only public transport but, in due course—I appreciate that this is not within the scope of the Bill—general users of vehicles. Ultimately, I think we all agree that we want to get to net zero from the perspective of emissions from vehicles; potentially, however, we need an alternative third way to ensure that the transition can take place.

[Jerome Mayhew]

I agree entirely with my hon. Friend.

I accept that currently synthetic fuels are expensive, because they are at the development stage, but I do not believe that the Government’s intention is for the clause to write them out. I recognise that the Minister is unlikely to tear up his clause on my say-so, but I would be grateful if he discussed the issue further with his Department.

I will leave it to the Minister to consider amendments 32 and 33, and the same can be said for amendments 78 and 58, tabled by the Liberal Democrats. Finally, therefore, amendment 63 would require the Secretary of State, within six months, to produce a report assessing the adequacy of funding for the replacement of emitting buses with zero emission versions.

The amendment is right to focus once again on the central issue of funding, because that is totally absent from the existing drafting of the clause, but—a fatal “but” from my perspective—the amendment focuses on the LTAs. In fact, however, in the vast majority of cases, the cost lies with private operators and not with the local transport authority. The amendment makes no mention of what should be done for them, and that lets the Government off the hook, frankly, of addressing the real problem, which is the bus companies and the impact on them, as opposed to the local transport authorities. That is probably an inadvertent oversight, but I just point it out.