Hi everyone. So about a month ago I bought a bike, primarily for commuting once we go back to the office, but also for just getting out there. It's a gravel bike built to be great on pavement, but if you see a trail off to the side, you'll be fine. I love it, I really do. But at the same time I also bought a car. Am I happy about it? No?
Not really. It's my first car in seven years since moving here to London from Washington, d C. When I sold my last car back and said, okay, the next one will definitely be fully electric, but it didn't happen. We went fully ice or internal combustion engine. The main reasons, and I'm talking as a consumer here, were charging and choice. With charging, well, there are places to charge, you see them around, but not in my flat. We only have
street parking and no charge points nearby. And choice. I'm not in the market for a Tesla, and when I was looking around, the fully electric car seemed a bit fewer and further between. Maybe both these were a matter of perception and I should have done more research. But also maybe I'm a good proxy for the public who needs it to be a bit easier okay, but despite the ice, it doesn't make me any less of a fan of e v's and doesn't make me want one
any less. Next car will absolutely be electric, and I told myself, by the time I'm in the market again, the charging infrastructure and range of models will have caught up. Well. If today's guest has anything to do with it, that will absolutely be the case. Today we're joined by a UK Member of Parliament and Parliamentary Under Secretary of State at the Department for Transport, Minister for the Future of
Transport and Decarbonization, Rachel McClain. You'll note that the very first thing Minister McClain says is that for the UK to hit the net zero emissions target they set, they need to expand the charging network and offer enough evs at the right price. But during the conversation, she and my co host and had of Europe, Middle Eastern Africa for BENF Dana Perkins, look at the future of transport
in the UK as a whole. They discuss hydrogen trains, planes, emission standards, bikes, scooters and how each can contribute to zero target. Dana's interview with Minister mcclin took place as part of the BENF London Summit on October being if users can see this interview and more, including all the benef analyst talks on BENF talk Com, the BENF Mumbile app and the Bloomberg terminal. As a reminder, BENF does not provide investment or strategy advice, and you can hear
the full disclaimer at the end of the show. I'm Mark Taylor and you're listening to switch on now over to Dana for her interview with Minister McClain. Minister McClain, thank you so much for joining us today and taking time out of your busy schedule. It's a pleasure to be with you, Dana, thank you for having me along. So let's dive right in. Let's talk about net zero
missions and the electric vehicle transition. So here we are, we're in the UK, We have a twenty fifty target and no doubt electric vehicles are going to play an important part in that. So if we're looking at the transition that needs to take place over the next ten to maybe fifteen years, I want to know what steps, what are the most significant steps you think need to
be taken in order to achieve that goal. In that timeline. Yeah, absolutely, and it is a very ambitious goal, but we already confident that we can meet to and what's more, we are committed as a government. We think it's vitally important, and we are the first major economy to actually legislate for that net zero target. So we do have a
lot of work to do. And I think is anyone who drives an e Vy knows whether you know you're doing it for commercial reasons or you're just a private driver, you will know that one of the key challenges is around the infrastructure side of things, getting that charging infrastructure in the right place, at the right cost, getting it there reliably for people, and that's vital that we get that right. And I think the second thing is making sure that we have enough electric vehicles available to buy
at the right price for people. So you will know that the government is already supporting the purchase price of electric vehicles cars for private individuals, private buyers and drivers, and also providing a lot of support for business customers as well through plugging car grants and so on, and helping people to get charge points installed at their homes or their workplaces. But that work clearly has to continue and it has to accelerate, and that is exactly what
we are committed to doing. What do you think will be the most important mechanism in order to get As you were discussing on prices, what do you think would be the most important thing to make them accessible to people at a wide range of incomes, given that they are currently, at least right now more expensive than internal combustion engines. Yeah, I mean, I think there's a couple of things to consider about the price of an electric vehicle.
There are new models coming into the market all the time, and what we know about the automot motive industries, it's fantastic at innovating. So certainly as we start to see the direction of travel through legislation and also through consumer demand, we know that the car industry will respond to that. We absolutely accept it's a hard time for the car industry at the moment, But even just recently we saw
electric vehicle registrations accelerate and really quite significantly. So there are a number of people that are choosing to buy an electric vehicle now as a percentage of all car buyers is bigger than it has ever been since we started keeping these records. So we have to consider the overall cost of an electric vehicle, and of course, if you are not filling up at the pump, you're saving
a huge amount of money. You're you're keeping cash in your pocket that you would have been, you know, putting into your petrol or diesel tank. So we are providing a lot of support for people with that initial purchase price, and that is in place at the moment for the foreseeable future, but we will have to keep that under review as we consider, you know, where do we invest government cash in this infrastructure transition and this revolution towards
electric driving. So you're saying the record number of electric vehicles are being purchased. Do you think it is that cost savings at the pump that's driving it or what do you think is the primary reason people are buying them? Well, I genuinely think that is a real mindset shift with people, and we saw it before COVID, but I think COVID has brought it to the fall and we've seen people really think about the fact that they did really like the fact that their air was clean, that their streets
were clean during the lockdown period. It made them appreciate if you like the health of our planet, how everything is connected, and it made them consider the choices that they're making in all areas of their lives. And so we as a government, we really welcome that and we are committed to a green recovery across all of the
work that we're doing. So it now is a real moment I think for people who are coming into the market looking at what's available, um and thinking about doing that for I think for the sort of the right reasons, if you like, thinking about the environmental reasons as well of course of that cost factor, So taking into account the overall cost of ownership of an electric vehicle, it
can work out significantly cheaper over the long term. So let's talk a little bit about the emission standards and kind of the role the government has to play in looking at some of this. In the EU, you know they have some pretty aggressive emission standards coming out with the UK. Do you think they're the policies here are going to make the electric vehicle transition faster, slower? You know, they're going to be stricter, they're going to be more relaxed.
And how will that come into play as we leave the European Union? So obviously as we're leaving the European Union, all the regulations that were part of the EU law but will be brought into our law, so we will have those standards that domestically as the EU did. But we are currently consulting on what will our standards look like after the end of the transition period, and we will see the consult that the results of that consultation
very soon. But we've been very clear that we're going to be at least as ambitious as the EU in our emission standards because we want to be leading in this area, and we see the opportunity of leaving the EU as a chance for us to set our own standards as right for our own market, right for our own environment. So that's great. And you actually actually also pointed out a little bit earlier that the automakers have a tremendous amount of innovation when they put their my
into it. So what, well, you think it will be the best way in order to incentiviz that I don't maker is to be a part of the emissions reduction strategy. Well, I have regular conversations with all the automakers and I can tell you that they are absolutely up for the challenge and they definitely have already got very advanced plans almost all of them to go to a sort of zero carbon or a very low carbon product range. But it is important that we as government support them in this.
It's a vital industry employing thousands of people up and down the UK with highly skilled jobs, you know, lots of different areas of the country. So we have made available one and a half billion pounds already to help them make that transition to new forms of technology, and we know we need to continue to work hand in hand with the industry on issues like batteries, supplier batteries, how our batteries recycled, to help them develop that technology
that they will need to grasp this new opportunity. There's a very constructive relationship that we have with them. So in terms of technology advancements, one that is looking very promising at the moment act switching tracks a little bit is onto hydrogen in particular for the heart to abate sectors.
So what are some of the more promising things that you think are happening over at the Department of Transportation when it comes to hydrogen, And then additionally, like what are some of the benchmarks that you're looking for in areas, let's say aviation, that show us that we're succeeding. You know what, what things are you looking for, and I think therefore we should be looking for So we we
definitely see a future in hydrogen across the department. We we maintain a technology neutral approach, so we don't necessarily pick or choose one particular technology, but we definitely think hydrogen has got a very significant role to play, as you mentioned in some of those harder to de carbonized sectors, specifically the harder, the heavier sectors such as maritime such
as the freight sector, and potentially aviation as well. We've already seen a hydrogen fueled plane take off this last week, and there's also potentially in trains as well, and I think it's really exciting to to see the development of
the hydrogen policy. Now. Last week I was lucky enough to go to Middlesborough to actually open the first Hydrogen for Transport hub, and what we're doing with that is we are looking to see how transport can actually work on the ground in a specific location, so we can
consider all the different parts of the hydrogen ecosystem. For example, the fueling, Where does the power come from, how do we get the hydrogen, how do we actually make it work at scale in a location with buses and lorries and and ships and all the different modes of transport.
So there's a lot more work to do as we develop that technology even further because at the moment it does need to sort of overcome some hurdles in terms of that mass commercialization, particularly with the green hydrogen, and that's where where we want to go with it. So it's an exciting time for it and we are investing heavily in the R and D for hydrogen. There are
some physical limitations to hydrogen. Do you think that there is a specific part of the UK that's going to benefit more from this incubation or is it too early to tell? Well, we it is a bit early to tell. We picked Middlesbrough tea Side for our first transport hub out of a number of places actually because it does
have all the right capacity for our initial work. It's got apport, it's got access to renewable energy, it's got a it's got a very highly developed skills base and also it's got a fantastic university there with the cutting edge R and D research, so it had all the factors there, but there's no reason why other areas of the UK couldn't also benefit. There's some great work going on in Scotland, for example, and any facts across the UK, So we want to see it spread out across all
areas that can benefit in the future. Well, so let's talk about COVID. It's definitely on the top of everyone's minds and I think it's I can say that it's changed everybody's lives in a lot of different ways. And one of those that I think we're just at the beginning of seeing is maybe a move of people out of cities and maybe having eventually longer commutes but less frequently. And we know right now those communites actually need to
be much less densely packed. So that changes everything for the rail network in terms of how they make their money. And my question is really around do you think that there will need to be ongoing government intervention in the rail networks in order to keep these you know, commuter trains running. Well. I think you're right to point to a huge shift in society and in the way that we work, and I don't think that's fully played out yet.
But but certainly the governments recognized that we do need to underwrite the rail network, certainly at the moment, and that's why you know, you've seen that process take place. We've kept the trains running even though there's very little
revenue coming in from them. I have noticed myself because I've had to carry on commuting basically through through most of the lockdown because we will call back to Westminster, as you probably know, so I've had to trouvel by train from my constituency and it was very very quiet at the beginning, but the numbers are started to pick up now and so the message that we are sort of putting out there's a Department of Transport is it is so to travel the the train of freights Income
has It's done a fantastic job actually cleaning those trains, making them safe, making sure everybody can feel comfortable to travel and wearing face masks. So it's a bit too early to see how it's it's going to play out, but at the top of the time, big it is safe to travel and it's a much greener way of
traveling down getting in a car. Okay, so let's say you're not taking the train and you live close enough to do those short trips, and I am seeing bike lanes open up all over London actually at the moment, and I am now a pride proud bike owner and I'm going to be doing my commute by a bike. So in this micro mobility space, you know, Actually, another thing that has become popular have been these electric scooters, which are currently not yet legal. What do you foresee
happening with those? Is there a path to legalization? And also how big of an impact do you think micro mobility can have so bikes and electric little scooters on the overall emissions reduction strategy. Well, well don't you getting on your bloke actually b already because well at the weekend, and it is fantastics, it's very hearly where I live.
So it's been a bit of a revelation. But yeah, ea, scooters are are really quite a very very new and potentially very exciting policy area actually, and I think what we we took the view that well, look, you know these are available in pretty much every other European country that you go to, and we know that there is a demand for them. We know that people are using them illegally. As you say, you know it very clear it is illegal to ride them at the moment unless
you're in a trial area. But in recognition of the fact that we are in a global pandemic, we're in an extraordinary situation where there were issues with getting on public transport, but at the same time we wanted to
maintain our commitment to greener forms of transport. That's why we brought forward the trials of East scooters, which are now taking place in a few areas, not in London yet, but they're taking place in about half a dozen areas of the UK, and we'll have a few more coming on stream as well, and I think there is a huge potential in EAST scooters. They don't replace cycles or walking.
They are an alternative for people who may choose to use them on a certain day for a certain journey where it may not be appropriate or may not be their preference to use a bike. But it's certainly a very good alternative if you are make if you were going to make a very short journey by a car, to use an e scooter instead. And that's how we
see it playing into the mix. Because we know that we know that vast numbers of car journeys are very short there, three or four and maybe even five miles, and it's entirely foreseeable that someone would use an e scooter that that type of journey, and you imagine the potential reduction in carbon and greenhouse gas that's going to be achieved if we can shift even a few of those car journeys onto the scooters or indeed on other
forms of micro mobility vehicles. We are looking across the board actually where we could potentially introduce other forms of slightly new vehicles that are out there. I mean, I'm all in favor of innovation, and some of these scenes can help people get around people with mobility issues that you know, may we can't cycle or walk. So I think it's right that we free up this sort of innovation as long as we're doing it safely, which we are. What are some other examples of things that you guys
are looking at? So got the electric scooters and bikes and electric bikes. What are some other things on the kind of cutting edge tech wise? There's a lot of sort of work in progress going on. We we obviously are a leader in this country in sort of automated automation, self driving vehicles as well, so that that's work is coming on stream. There's quite a lot of vehicles in the sort of what we call the novel vehicle category. So as well as the scooters that you see there
are seeded scooters very beneficial for some people. There's a smaller vehicles that don't really it's a broad class of vehicles called L class vehicles, and there's some things in there that are really quite cool and look quite futuristic. So we're examining how we can enable some of these new vehicles to come to the market and be safely adopted onto our roads across the UK Okay, so hopefully they make a different and send those shorthaul last miles traveled. Well.
So yeah, let's go back to emissions and some of the other ways that the Department of Transportation may be thinking of incubating new ideas. I think we know where we need to get to, but it's not entirely clear how we're going to get there, and we're going to need to run some experiments and take some chances. What are some areas where you think we maybe aren't even yet but could be collecting data and taking a few
more experiments to really push innovation. We recognize that we do have, you know, a lot to work through in order to reach this target. What we've been doing is working across the whole department Transport, introducing what we've called the Transport Decarbonization Plan. That's been a very significant piece
of work over the summer months. We will be publishing that plan actually before the end of the year, and that's where you will see a lot more specifics around how we intend to get there, what is the pathway, Where where are we going to change our policy in or to decarbonize various sectors. But I think to your question, and I think for me, one of the key focuses is obviously touching on the infrastructure feed that we've already mentioned.
I think the whole error of freight is huge, and that's not just heavy freight, but it's also you mentioned the last mile, it's the last mile deliveries, it's the smaller freight deliveries that are taking place now while people are working from home. I think we can actually really accelerate the work around this sort of zero emission automated logistics side of things. Data will be key for that.
It's how do we gather the data, how do we use it really in a really smart way to figure out where are people actually, where the demand is, where the where the supply is, how we can bring that together and cut down on a lot of sort of unnecessary driving around and also free up space on the streets for some of the you know, the micromeability vehicles
that we've essentially talked about. I mean, there are the things that kind of happen behind the curtain, so to speak, and then the things that really are part of everybody's lives and and really behavior change. So what do you think the main things that are going to meet to be done in order to encourag behavior change? And I think the Transport Decorganization Plan is meant to be a
part of get behavior change is absolutely vital. And we know that government's got a really big job there in terms of giving people that confidence that there is going to be an electric big charge points at their destination for example. So you know, we work hand in hand
with with the providers. But I think it also comes down to really simple things like, for example, if if you know that it's going to be easy for you to put your bike on a train, or if you you know if it's really easy for you to actually charge your electric vehicle at home. So there's issues around for people who don't happen to live you know, someone where the drive. So we have to tackle those sorts of problems as well. We have to remove those barriers
of people. But but we do know that we're we're a social race, you know not, So we're we're are social beings, aren't we. So we are very much influenced by what people around us are doing. So we believe that and behavioral science that we've done actually bears this out that the more that we see other people like us adopting zero zero emission falls of transport and enjoying it and seeing the benefits, the more that we will
see that mass adoption. So it is very much about normalizing it, removing the barriers, providing nose and centers where they are appropriate and necessary, but just sending out the message that this is not a sort of hard thing to do. It's not an out there thing to do. It's a normal part of life that you need to drive an electric vehicle now or a hydrogen self vehicle
or whatever it will be in the future. People are going to see us on their bikes and they're going to want to help on a bake themselves, the bakes so on. On the Transport Decarbonization Plan, you know, there were already several strategies in place, and you've gone through a bit on what the decarbonization plan and looks to address. Are there any other things that it does that is, you know, really additional on why it was so essentially needed in order to take it the next step? Yeah.
I mean, look, the Department is already a leader in R and D in investments and working with the transport into street but we had not specifically addressed the net zero by twenty fifty challenge because the target was I forget what it was, sorry, but it was lower than zero before we actually started this piece of work and before this this particular government and Parliament came into office, so we needed to look again at those challenges and see where there were still gaps that we needed to
address in policy. I think the other point about it is that this is the first time that we've looked across the whole system. So we haven't just looked at buses and individual murdered transport. We haven't just looked at shipping and maritime, in aviation. We've looked all of it together because there are obviously interconnectivities with how you decarbonize a particular area, for example, so we will not have
the same solution for every part of the UK. It's really important that we think about local geographies, local issues. You know what, what works in London is not working my constituency and read it for example, for all sorts of reasons. So it's very much about thinking about how do we make these things work on the ground in reality. Well, here's to making things work on the ground in reality, Mr McClain, Thank you very much for joining us today
and sharing us your insights and your strategies. Thank you very much for having me. Today's episode of Switched On was edited by Rex Warner of Gray Stoak Media. Bloomberginia is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute, nor should it be construed as investment advice, investment recommendations, or a recommendation as to
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