Accelerating progress on the journey to sustainable rail networks

Britain’s bold ambition to decarbonise its rail network, set out in the Sustainable Rail Blueprint (SRB), has been lauded across the rail industry – and beyond. But it’s vital those aspirations are backed by action across five key areas if they are to deliver on the promise of a greener future.

That’s the key takeaway from a recent event hosted by Deloitte to explore how the UK can accelerate progress, with business leaders from across the industry speaking passionately about the opportunities and challenges presented by the journey to sustainable rail travel.

We recently published a blog welcoming the Sustainable Rail Blueprint and exploring its potential impact, and have hosted a number of engaging conversations with industry leaders to examine how industry-wide alignment and initiatives can deliver on its promise of a more sustainable future. 

Together, through those engaging conversations, we’ve identified need for action across what we’ve dubbed the five pillars of progress, those being investment, collaboration, proactive policy frameworks, regulatory oversight and innovative strategies.
 

Making the case for investing in change
 

The long-term benefits of the Sustainable Rail Blueprint are only achievable with significant investment across the network, but with many upgrades already required to maintain existing infrastructure and meet legal requirements now is the time to embed sustainability into those plans.

A fully costed set of scenarios against a realistic counterfactual will remove the perception that the recommendations made within the SRB are a net cost and demonstrate the increased return on investment potential in the long term. Building the case for investment to transform, rather than simply maintain the network, will also lay bare the risk to returns of failing to act on this critical issue.

The sector should also demonstrate the long-term benefits of an environmentally and socially sustainable railway for the UK’s economy, through contributing to the levelling up agenda and driving socio-economic benefits.
 

Collaboration is key to overcoming risks and realising opportunities
 

While investment is the spark which can ignite change across the rail network, collaboration and effective engagement with external stakeholders will be vital in ensuring joint plans are developed to manage interdependent risks and opportunities.

The Department for Business and Trade must advocate for the rail industry as being vital in linking communities and enabling the movement of workers and goods across the country. Local communities and local councils must continue to be strong advocates of rail connections.

The SRB encourages those within the rail sector to ensure that its progress in biodiversity and nature recovery involves local communities and stakeholders, and establishing clear lines of communication on the improvements being made will be critical in gaining further support. 
 

Government must back Britain’s rail
 

Our discussion was ahead of the election, with attendees noting the degree of uncertainty as to what long-term priorities would be pursued in the months and years ahead.

With a Labour government now in power, we can expect reform with a longer-term focus, which would provide Industry with certainty. We expect sustainability to be at the heart of that reform as Labour implement its manifesto pledges with Great British Railways bringing train operations back into public ownership. If achieved, the rail sector would be able to take a long-term view but would need to grapple with the challenge of maintaining the innovation and agility of the private sector under a nationalised railway.

The Rail sector has a limited window of opportunity with the new administration to position itself as a unified voice to demonstrate that it can help Government deliver their objectives, for example demonstrating that it can reduce consumption of potable water to help deliver the UK Government’s Environmental Improvement Plan, which includes the goal of ‘clean and plentiful water’, and the integrated Plan for Water.

But successful implementation of the SRB doesn’t rest solely with the UK Government – it needs support from both passenger and freight customers too. 

Government must set the outcomes it wants, with the supporting policy to enable infrastructure and rolling stock organisations, alongside tech companies and operators, to determine how to deliver those outcomes.

However, the current model does not encourage a long-term view. With the threat of changing contracts, operators inevitably take a short-term stance. Government needs to ensure that accountability and financial incentives are in the right place to enable industry to move away from the short-term mindset which has prevailed since the covid pandemic and recognise the need to invest long-term. 

Unpalatable policy decisions that could encourage increased use of the railway do exist but are unlikely to ever be implemented.  For example, rail fares could be reduced (through government subsidy) whilst fuel duty increased to encourage a modal shift, or planning guidance could be changed to encourage house builders to develop sustainable transport solutions when building developments. 
 

Regulators must be empowered to prioritise sustainability
 

As the fulcrum between the Department for Transport and Network Rail the Office of Rail and Road (ORR) must challenge the rail industry on its contribution to the sustainability agenda.

Through setting outcome-based incentives, regulation can be a vital mechanism to drive performance and investment. Take the Wind sector as an example; the Contracts for Difference scheme is the government’s main mechanism for supporting low-carbon electricity generation.

In the Aviation sector, the Government is investing £113m in businesses towards the development of hydroelectric powertrain development and eVTOL aircraft. The Department for Transport (DfT) has launched a £53 million Advanced Fuel Fund aimed at boosting the UK’s sustainable aviation fuel industry (SAF). 

The extent to which the UK’s new government empowers the ORR to support industry will be crucial.

Harness innovation to drive efficient change
 

While passenger numbers continue to improve in the wake of the covid pandemic, many commuter groups have dwindled, and leisure travel is not as lucrative as it used to be. The rail industry faces a significant funding gap, created by revenue shortfalls, and exacerbated by inflationary pressures.

With huge pressure on UK government finance, alternative funding opportunities must be explored to ensure continuous progress regarding the sustainability agenda.

In order to achieve the objectives in the Sustainable Rail Blueprint, innovation is much needed and therefore needs to be incentivised. It’s vital that our new government incentivises innovation and harnesses the efficiency that the private sector, academics and startups can bring to deliver efficient train operations.

The Sustainable Rail Blueprint sets out a clear vision for achieving a more efficient, resilient and sustainable rail network. Having been endorsed by the whole industry, and with governmental recognition, it is a fantastic opportunity to create a more sustainable railway. 

The time to start is now, else the sector risks ever-increasing costs and lagging behind as other sectors continue to innovate. 

The rail sector must come together to present a plan to the new government detailing the small steps that can be taken immediately and how these will help them deliver their policy objectives.