CPA Bulletin

28 CPA Bulletin > May 2024 www.cpa.uk.net In my last Bulletin article, I outlined my thoughts on what the government’s potential plans were for NRMM (Non-Road Mobile Machinery) policy across the course of this year, and how it would impact on CPAmembers. In the intervening two months, we have seen some of my predictions come true, and while I am not yet ready to buy a lottery ticket, there has been progress in terms of what we have been calling for from government. The March Budget saw the Treasury commit to extending the Full Expensing Allowance to the leasing and rental industries (this Treasury terminology includes hire industries) albeit with the caveat of ‘when fiscal conditions allow’. While the CPA welcomed this change in policy that would allow all CPA members to claim the allowance when investing in new equipment, however, we have called for clarity in what the Treasury means in this open-ended language. The economy is slowly improving, with construction itself returning to growth following several months of stagnation. Business investment helps drive economic growth – ultimately you cannot have one without the other. Waiting for a currently undefined future scenario that will eventually allow the plant-hire industry to take advantage of an allowance that the rest of the business community can claim, is not exactly going to build confidence. The CPA, as part of its work with the Treasury’s Leasing Working Group, will be pressing the case for further clarity on this key policy measure. Towards the end of last year, the government published its long-awaited consultation on NRMM decarbonisation. This was an opportunity for construction equipment users and manufacturers, to outline their thoughts on how the NRMM sector can reduce the use of diesel, and take the steps needed to reach the government’s 2050 net zero target. The CPA consulted extensively with members ahead of the March 2024 deadline, as well as taking part in several industry workshops with stakeholders such as the Supply Chain Sustainability School, and the Construction Leadership Council. The main parts of our submission call for the government to work with our members, recognising that they are already taking active steps to decarbonise, but that the process will take time. The industry must remain competitive; the government cannot force companies to invest in diesel free equipment, market forces and using public procurement as a driver of change must be at the heart of this. We also call for one single government department to take responsibility for NRMM decarbonisation. To date, three separate government departments have each taken responsibility for this work in some form or another. The second-hand market in electric kit is immature and this is, for many companies, a factor in whether they commit to investing in electric kit and making the switch from diesel. The government must learn from overseas (in particular Norway who offers up to 40% grants on electric equipment in exchange for diesel plant), reintroduce the HVO rebate on a limited basis, and explore the potential of a scrappage scheme for NRMM diesel kit. These are all separate measures members have called for in recent policy announcements – the consultation was an opportunity to reinforce these actions. The consultation was run by three government departments, with DESNZ, the Department of Business and Trade, and the Department for Transport, all involved. While it was encouraging to see such levels of cross governmental department interaction, the proof will be in what comes next and what the government’s proposals will be. Although the response and next steps aremeant to be published later this year, we have been waiting over two years for the LowCarbon Fuels Strategy to be released – which, incidentally, is nowmeant to be released in May. It is a cliché but like London buses and their frequency, the end of March saw yet another consultation on NRMM decarbonisation, this time a short Department of Transport consultation on the road use of hydrogen powered equipment. The consultation itself only runs for a month but the CPA will be responding accordingly. Hydrogen has been cited as a key fuel of the future - especially in construction equipment. Legislators need to improve their understanding around what this means and the ramifications from both a legislative, and regulatory perspective. The safe use and transportation and storage (whether on site or in hire depots) of hydrogen, is critical in its future widespread adoption. Amending existing roadworthiness legislation needs looking at in more detail, especially when other legislative mechanisms need to be clarified to the benefit of all parties concerned. Ahead of the general election, whether it is this year or early in 2025, it is encouraging that the government and policy makers are listening to the plant-hire community and taking forward our concerns and views. The challenge now is to keep up thismomentumand translate warmwords and sentiment, into actual tangible policies that have a genuine impact. The hire industry is watching. POLICY POLICY Deciphering NRMM Decarbonisation and Government Policy