Cold Chain News Readers Questions April 2021

Published in Cold Chain News 15 April 2021

1) Is it realistic for cold chain businesses to achieve net zero by 2050?

A commitment for 30 years’ time can only be achieved if we are also clear about the changes that should be made today, next year and in five years’ time. As an industry we need to set out an ambitious but realistic roadmap that details actions, timeframes, support needed from Government, and how to ensure decarbonisation contributes to, rather than obstructs, businesses’ commercial aspirations.

The good news is there are plenty of ‘quick win’ opportunities to cut carbon such as more accurate measurement of energy use and fuel use, changing to LED lighting, and improving housekeeping. Importantly these types of actions also create opportunities to save money, benefit from tax cuts through the cold storage Climate Change Agreement, and secure competitive advantage by aligning with customers’ sustainability targets.

The other major motivation is Government regulation. The UK Government’s commitment to Net Zero emissions by 2050 is already reflected in policy decisions affecting the cold chain, such as the ending of the red diesel rebate. I have no doubt that before 2050, cold chain businesses will have little choice but to operate within net zero parameters.

The Cold Chain Federation’s Net Zero Cold Chain project is helping businesses to navigate these changes, find out more on our website www.coldchainfederation.org.uk.

2) What is the current situation regarding Brexit delays for temperature-controlled transport and when are we likely to see an improvement?

While we have now mostly navigated the early teething troubles, more permanent challenges such as the shortage of Official Veterinarians and issues with groupage will test cold chain operators and their customers for some time.

We can also expect significant disruption with controls on imports from the EU, thankfully now delayed to start in October rather than April 2021. Again, after teething troubles are managed out, businesses will be faced with longer term challenges.

It remains to be seen whether the same level of orders that we previously fulfilled between the UK and the EU ever fully returns. As Global Britain’s new trading relationships with the rest of the world become clear over the coming months and years, so too will the extent of new opportunities for temperature-controlled transport.

3) Is ending the red diesel rebate a certainty or a suggestion? What support is available for operators to transition away from red diesel?

It is a certainty. The Government is making changes through the Finance Bill 2021 which mean that the entitlement for temperature-controlled transport will be removed from April 2022.

In terms of support, we are discussing with Government about how its recently announced Net Zero Innovation Fund could be used to support the research, trial and adoption of alternative technologies. I would also advise operators to speak with their accountants to understand how their transition away from red diesel benefit from the super-deduction announced by the Chancellor in his March Budget to provide extra tax relief for investment in equipment.

4) Should I be investing in expanding my cold store?

With high occupancy over the past three years and significant cold storage development currently underway, years of underinvested are now starting to be corrected in the market.

The outlook is certainly one of opportunity for growth, particularly in the expansion of an existing storage facility. But, of course, the strength of the opportunity is dependent on each business’ individual circumstances.

We are running the Cold Chain Space Race webinar on 21 April, gathering a panel of experts to discuss the current situation and the outlook for cold storage capacity, opportunities in terms of location and facility types, and what we can expect in the longer term. You can register for free, or listen again after 21 April, at www.coldchainfederation.org.uk.