The NIC's challenge for green warehousing and logistics

We assess the scale of green ambition in the National Infrastructure Commission’s report on cleaner logistics and warehousing

17 May 2019

Introduction

In April 2019, the National Infrastructure Commission ('NIC') published its report 'Better Delivery: The Challenge for Freight'. Several areas of industry have reacted with scepticism towards the NIC’s conclusions, citing issues with the pace of technology or associated infrastructure development. We summarise the key themes in relation to the central environmental issues, the evolving requirements for transport and growing need for last-mile industrial real estate below.

The trends are not just relevant to logistics operators: real estate industrial & logistics asset owners and developers also need to plan ahead to ensure their assets meet these future demands.

The environmental challenges

  • A ban on the sale of new diesel HGVs by 2040 with the further recommendation of the absolute 'decarbonisation of road and rail freight by 2050': the NIC’s report identifies this as critical to the target of increasing air quality in cities and reducing overall emissions, with HGVs and vans contributing to a combined '32 per cent of the UK’s greenhouse gas emissions from transport in 2016'.
  • A focus on new systems such as hydrogen or battery-powered HGVs and requisite supporting infrastructure: in order to achieve its decarbonisation target, investment into battery storage, hydrogen or dual fuel projects will need to be accelerated to enable the sector to meet this goal. Large-scale infrastructure projects, such as an increased need for electric wire coverage across the UK’s roads and highways will be required as part of a widespread change, as well as the establishment of a refuelling network capable of supporting the new green freight system.
  • A greater need for distribution space so that depots are closer to final delivery destinations: Last-mile logistics and better land use planning will be crucial in meeting the sustained demand that e-commerce will continue to place upon supply chains, combatting congestion that costs freight operators an estimated £3 billion and reducing noise pollution in urban spaces. Industrial warehousing space is soaring in demand and mixed-use developments are one avenue to unlocking potential development sites; however, areas that are currently untapped for development can generate concerns in relation to land quality and prior high hazard uses. For further information in relation to the NIC’s recommendations, our February article analyses routes to overcoming these challenges in detail.

The NIC’s conclusions are unsurprising, as the government’s strategy towards tightening energy policy control is well known. Moreover, the recommendations echo Defra’s Clean Air Strategy for the UK, published in early 2019; both are part of a broader trend across the UK and EU that focus on the environmental challenges posed by conventional transport systems. Government and industry alike will have to cooperate and re-assess the way supply chains are constructed in order to maintain convenience, cost and delivery standards in-line with Britain’s environmental commitments.

You can read the NIC’s full final report here.

How can Burges Salmon help?

Burges Salmon combines sector knowledge of industrial and logistics real estate, market-leading expertise in transport and one of the UK's foremost environmental law practices. We ensure that your projects and assets benefit from a comprehensive understanding of environmental risks, allowing you to exploit the opportunities that can arise from managing those risks in the most commercially advantageous manner. To discuss these issues further, please contact Simon Tilling or your usual Burges Salmon contact.

This legal update was written by Simon Tilling, Partner, and Christopher Walker, trainee solicitor.

Key contact

Simon-Tilling--250px x 250px 72dpi - web

Simon Tilling Partner

  • Head of Environment
  • REACH, Chemicals and Product Stewardship
  • Energy, Power and Utilities

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