Mr. Joe Kenny:

On behalf of the Chartered Institute of Logistics and Transport, CILT, Ireland. I thank the committee for the opportunity to address it today. I am the chief executive officer of CILT Ireland. CILT is the globally recognised professional members body for all professionals involved in the mobility and supply chain industries. We are an independent membership body operating in more than 40 countries and representing more than 30,000 professionals globally. We promote and support professionalism and enhanced standards.

CILT Ireland recognises the difficulties for our sector arising from increasing fuel costs. These difficulties need to be set against an already incredibly challenging and fast-changing environment brought about by the global pandemic and Brexit. The supply chain industry is still adjusting to the enormous changes forced upon it by these events and now finds itself also affected by the volatility in part brought about by the tragic situation evolving in Ukraine. The combined effects of these highly-disruptive events are felt right across the sector in all modes, road, rail, air and maritime. All parts of the supply chain have needed to adapt and introduce new methods of operations to maintain supplies and services. Passenger as well as freight movements have been affected and the industry's ability to move people and goods economically has been challenged as never before.

CILT Ireland believes that the long-term solution to the issues facing the industry is in a sustainable approach to decarbonisation for the industry, aligned with clear transitional plans and combined with higher levels of professionalisation, education and training programmes, and the adoption of innovative technology. This strategic approach will require appropriate plans and supports to transition from a reliance on carbon-based fuels, as well as a whole-of-industry approach to professionalisation so that standards, capacity, and sustainability are prioritised. A sustainable approach may require the reassessment of lowest-cost solutions and a reduction in proprietary and exclusive distribution lines, for example.

Collaboration and shared resources are key to the long-term success of the industry with a recognition that much of the industry is made up of smaller independent operators who usually do not have significant economic or financial influence. These smaller operations may not have the same ability to adapt, often because of contractual obligations, and survive in adverse conditions. This must be recognised by industry as well as the customers it serves. There is potential to improve the shared understanding of costs, contracts and the business environment within the sector.

There is a need to develop practical and viable plans for all parts of the supply chain utilising industry professionals who can help industry adapt to the inevitable unforeseen circumstances. Strategic planning covering input security, sustainable supply chains, decarbonisation targets and economic sustainability are crucial to the success of the industry. Investment in training and education and the promotion of professionalisation and standards will be required. The knowledge, skills and analysis which professional bodies such as CILT can contribute can be leveraged in the short, medium and long term.

The current volatility in fuel prices highlights several key challenges that require addressing. Security and sustainability of supply chains and the impacts of rising input costs on the economy are two of the most important. CILT Ireland recognises that short-term measures will be required but believes that only a strategic response using appropriate policy instruments is now needed to effectively deal with the problem. The current crisis is a symptom of the much larger challenge to decarbonise our sector.

The latest environmental package, Fit for 55, in the European Green Deal published in 2021 has set out a vision to make Europe carbon neutral by 2050. For the road transport sector, the emphasis is on alternative and cleaner energy fuels for all vehicles, intending to phase out the sale of internal combustion engines vehicles for heavy goods vehicles, HGVs, no later than 2040. Based on the latest CILT Ireland policy research, we would like to bring to the attention to the committee two main findings. There is a divergence between the Government's incentivised decarbonisation direction and the industry's preferences, which might hinder the uptake of cleaner vehicles among heavy duty vehicle, HDV, and HGV operators. The current decarbonisation policies indicate a trend towards electrification for the transport sector in general. However, the study shows that operators consider hydrogen and biofuel as more feasible options. Given the limited market choice and technological support availability, electrification might not be a feasible option for HDV and HGV operators in the near term. In addition, the high upfront investment of cleaner vehicles and the availability of the infrastructure throughout the country are also significant barriers.

The current Government policies on transport decarbonisation are less reflected in terms of measures and support schemes for most SMEs in the market. Small and micro companies are significant elements of the transport industry in Ireland, similar to the European context. They are aware of green technologies but less interested in adopting these green practices in their operations or participating in the current decarbonisation schemes. During the engagement with the transport operators in this study, a sense of being overwhelmed has been felt. The operators are preoccupied with ongoing workloads and hardly have the capacity or resources to make a strategic plan for decarbonisation in their operations.