The impact of a 2030 ICE phase-out in the UK

This report assesses the impact of a more rapid phase out of the sale of internal combustion engine (ICE) cars and vans in the UK. It finds substantial potential economic benefits. It was prepared for Greenpeace by Cambridge Econometrics with support from Element Energy.



Read the executive summary below, or download the full report in PDF format.

In this analysis, the impact of a more rapid phase out of the sale of internal combustion engine (ICE) cars and vans in the UK has been assessed.

  • Two uptake scenarios have been modelled, a baseline consistent with a 2035 phase-out of ICEs (including hybrids and plug-in hybrids), and a central accelerated scenario, which phases out ICEs in 2030. Both have been modelled using ECCo, an EV uptake model which is also used by the UK Department for Transport for policy design. For both scenarios, representative policy environments have been developed to meet each the respective phase out dates. These include: a roll-out of charging infrastructure to provide blanket access by the phase out date; and average new car/van CO2 targets which gradually decrease to 0 gCO2/km by the phase out. In the case of a 2030 phase out, a gradual increase in first year Vehicle Excise Duty, banded by CO2 emissions, was also needed.
  • Growth in ultra-low emission vehicle sales is driven almost exclusively by battery electric vehicles, with sales far outstripping those of plug-in hybrids and H2 fuel cell vehicles during the 2020s. This is a result of a rapid fall in battery costs, making battery electric vehicles a highly cost-competitive proposition. Under a 2030 phase out of ICEs, 90% of the car and van stock is zero-emission by 2040.
  • A phase out of ICEs will require a rapid deployment of charging infrastructure. The vast majority of this will be at drivers’ homes. But work and public charging is needed for the quarter of drivers without access to off-street parking, as well as to enable BEV to drive long-distance. Under a 2030 phase out of ICEs, by 2030 the UK would require 1.2m work, 240k slow public (3-22kW) and 62k rapid public (>50kW) charge points, as well as 13m home charge points. Between 2020 and 2040, the earlier phase out date requires £7bn more in infrastructure investment versus a 2035 phase out.
  • The more rapid transition is expected to create additional economic activity and jobs in the UK; GDP could be up to 0.2% higher, and an additional 32,000 jobs created across the economy in 2030. This is primarily a result of lower demand for imported fossil fuels; the improved efficiency of electric vehicles (and lower tax rates) results in lower overall costs of mobility, and as a result higher consumer spending on electricity (for fuel) and other consumer goods and services.
  • The impacts do not play out evenly across the economy. Under the accelerated phase-out, the motor vehicle industry loses jobs more rapidly before 2035 as a result of the more rapid shift away from conventional ICE vehicles. The increase in employment is focussed in (consumer) services, but jobs are also created in the manufacture of both consumer goods and charging infrastructure, as well as the installation of the latter.
  • The more rapid transition to low carbon vehicles will lead to a decline in Government tax revenues from car and van owners, driven primarily by a fall in fuel duty revenues. However, the overall economic gains lead to increased revenues elsewhere in the economy, particularly from income tax, which could lead to government revenues £1.9bn higher in 2030 than in the baseline. Our modelling assumes that this money is channelled back into the economy through tax cuts, although the UK Government could elect to use this money to reduce borrowing, which would slightly reduce the positive economic impacts (to a GDP increase of 0.13% above baseline, and employment 27,000 higher, in 2030).
  • If the UK motor vehicle industry, with support from UK Government, can leverage the more rapid transition to improve their competitiveness, there could be substantial potential economic benefits. Securing a greater share of the UK domestic market for new vehicles could increase GDP by 0.6% in 2030 and create a further 63,000 jobs in the same year, as compared to a 2035 phase out. Notably, under such an assumption there would be sufficient additional demand for motor vehicles to almost completely balance out the jobs lost in the sector in 2030 as a result of the more rapid phase out.

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