WITH the new National Greenhouse and Energy Reporting (NGER) Act in its first reporting stage, Australian businesses could expect to see dramatic changes in fleet management, and in particular, fuel management.
In recent years, Governments across Australia have been taking a leadership role in trialing biofuels and more fuel efficient motor vehicles in their fleets. Now this trend is set to filter out into the wider business community, according to managing director of Interleasing and chairman of the Australian Fleet Managers Association, Michael Mitrovits.
“One key area under the microscope will be company car fleets. The Act will hold businesses accountable for their green claims, and will create opportunities for companies to rally to the ‘green’ cause, allowing them to move forward into new environmentally friendly products and solutions.”
He said that his company has seen an increase in demand from customers to understand how they can better report on the performance of their vehicle fleets and improve their efficiencies.
The NGER Act is the first step in bringing together a nationally consistent reporting system. The system aims to provide robust and transparent emissions and energy reporting for an Australian emissions trading scheme; and a streamlined national reporting point for greenhouse gas (ghg) emissions and energy data to assist Commonwealth, State and Territory Government programs.
This kind of reporting will also provide information to the Australian public about the performance of different aspects of a company’s activities.
The first reporting period, 2008-09, will include companies whose energy consumption or production equals or exceeds 500 terajoules per annum and who emit 125 kilotonnes of CO2, or more, per annum. These thresholds then increase in the following years to; 350 terajoules and 87.5 kilotonnes of CO2 (2009-10); and 200 terajoules and 50 kilotonnes (2010-11).
According to the Greenhouse and Energy Reporting Taskforce, the reporting system will improve data coverage to more than 70 per cent of GHG emissions in the covered sectors. Non energy greenhouse gas emissions from agriculture, land use, land use change and forestry activities will not be included until methodologies for reporting at the facility and corporation level are sufficiently developed.
Manufacturing industries are covered under the Act but it’s hard to estimate how many companies are required to report. More will be known around September next year when companies start releasing their reports.
By the 2010-11 reporting period the legislation is expected to cover around 700 medium and large corporations.
For a company that doesn’t already have reporting systems in place, knowing whether it meets the thresholds under the Act has presented a challenge, says Mitrovits.
“This is quite a common issue for fleet managers in various industries.”
He suggests using the Calculator on the Department of Climate Change website to conduct a self-assessment.
“The business can enter information on their facilities’ or corporations’ fuel or electricity use and receive an estimate of emissions and energy use.”
While the Act does not require companies to set targets or reduce its emissions or energy use, Mitrovits believes this will be a natural next step.
“The reporting will no doubt see an increase in demand from companies for fuel efficient fleet vehicles, as a way to meet their targets. In turn, this will drive car manufacturers to produce these vehicles, and for fleets, that means lower operating costs.
“This will have a significant impact on the fleet industry as there will be a larger demand for fuel efficient fleets, transforming how we and our clients have operated in the past.”
Interleasing specialises in the financing and management of fleets of cars and other vehicles for Australian companies. But it also offers assistance in the efficient use of these vehicles, and has developed a reporting solution for clients where it manages fuel consumption.
“The customer can determine which vehicles in their fleet fall under what NGER reporting requirement applicable to their business. For example, stationary transport (on site vehicles) are treated separately in terms of the NGER reporting requirement and the calculation method used compared to general offsite transport which is the transport of goods and services,” said Mitrovits.
Interleasing is a Carbon Neutral accredited organisation — it measures, reduces and offsets its carbon emissions, working with Carbon Planet. It is one of the first fleet management companies to become carbon neutral, and within three years is aiming to reduce its emissions by 35 per cent.
Mitrovits said they had noticed a trend in recent years from large six cylinder vehicles to four cylinders and, “…a trend in the fleet industry toward reviewing alternative fuel sources such as LPG and diesel over the conventional unleaded petrol.”
“If we look at new car sales by fuel type, that is, sales of diesel fuelled vehicles in the non-private segment across passenger, SUV and light commercials, they climbed by 30 per cent to 84,102 compared with the corresponding period in 2007,” said Mitrovits, quoting figures from the Federal Chamber of Automotive Industries.
In the same period and segments, sales of unleaded petrol cars across passenger, SUV and light commercials increased by only 1.6 per cent to 220,788. And non-private diesel cars made up 13 per cent of all Australian vehicle sales in the opening seven months of this year compared to 10.5 per cent in the corresponding period in 2007.
“Diesel fuelled vehicles continue to perform strongly in the commercial vehicles segment and we see the current trend continuing for the next five years.
“Moving forward we see a growing need to assist our customers not only in reporting emissions but also in providing advice in vehicle selection and operation to ensure that their fleets are reducing emissions and costs,” said Mitrovits. However, he also warned, “The Act may create casualties if companies are slow and resistant to these new changes.”
Interleasing’s tips for reducing carbon footprint
Fuel prices are acting as a strong incentive for reviewing overall costs associated with fleets. Looking for ways to reduce fleet costs, specifically around the issue of fuel, doesn’t need to be as significant as a full conversion of a fleet from one manufacturer to another. A simple and often overlooked initiative comes down to driver education. It has been conservatively estimated that fleets can save hundreds of dollars for each driver that drives defensively and economically.
At Interleasing we urge our customers to look creatively at the issue of fuel efficiency and consider the use of driver training to cut fleet costs.
Five steps that businesses can follow to reduce the carbon footprint and fuel expenditure from their vehicle fleets:
1. What is measurable is manageable – using your fleet’s data, measure your fleets emissions when deciding which vehicles best meet your fleet needs. For companies that use a fuel card for fleet fuel purchases, data gathering is simple and establishes a fleet baseline, which can then be used to set goals to reduce the environmental impact of the fleet.
2. Reduce driver mileage by making sure alternatives are available and understood by all employees including; car pooling for business travel; more video and tele-conferencing; better journey planning.
3. Review your Motor Vehicle Policy to consider ‘fit for purpose’ options. Consider different makes, models and engine options as petrol, diesel engines and hybrid options have different effects on the environment. Most new cars have a fuel efficiency rating which assists in fleet selection.
4. Vehicles perform to their best when properly serviced. Ensure all vehicles are maintained according to the manufacturer’s recommended schedule.
5. Encourage drivers to check tyre pressures regularly. Under/over inflated tyres can impact on fuel economy and safety.
For more information visit www.climatechange.gov.au/reporting/calculator.
Interleasing, 02 8899 4899, www.interleasing.com.au.