Agriculture

In the agricultural industry, alternatives to petrol or diesel vehicles have existed (at least in theory) for years. Indeed, John Deere unveiled their first electric tractor at a conference in 2017. However, together with technical limitations, the political and economic will to make these alternatives widely available has been missing.

Excitingly, we’re now at a turning point – as both the technology and appetite for change is fast developing.

Momentum is undoubtedly being driven by Government targets: while the ban on the sale of new Internal Combustion engine (ICE) road vehicles by 2030 has garnered many headlines, less widely reported is that other vehicles look set to follow by 2040 - ahead of wider net zero targets by 2050. Government spend is also providing impetus for change, such as UK Research and Innovation’s £80 million fund into electrification technologies.

A report from a taskforce within the Sustainable Markets Initiative (SMI), released days before the start of the United Nation’s Cop27 climate summit in Egypt urged the agriculture industry to take immediate action to mitigate its environmental impact. So, let’s look at the current state of play when it comes to electric vehicles and alternative fuels in the UK’s rural businesses – and consider what’s to come in the short and long- term.

A market that’s ready for progress

Although diesel power is still dominant for now, the market for electric vehicles in the construction, agriculture and mining industries could grow to $100 billion, according to analysts Peter Harrop and Michael Dent at IDTechEx.

What’s more, hydrogen technologies are fast becoming viable for use in farm machinery to replace combustion engines and cut emissions. Indeed, a new body made up of organisations like SAOS, NFUS, is currently looking closely at how green hydrogen can play a part in the farming and rural economy.

The benefits of switching to electric vehicles or using alternative fuels like hydrogen to power machinery are clear – with the promise of tax grants and incentives, cost savings, easier maintenance, less air pollution and less noise. But although the future is bright for these new technologies, there a number of obstacles to overcome.

The benefits and challenges of electrification

The move to electrification started in smaller vehicles - where price parity was quickly achieved – such as in garden centres, safari parks, forestry and equine applications. Progress has been slower to take off with heavier machinery (more on that later), but technology is moving forward a-pace and there is plenty of evidence that bigger vehicles - for instance EV tractors - can support the sector's sustainable shift.

It’s worth beginning with some of the misconceptions around the rollout and uptake of EVs. For example, Richard Billyeald, Chief Technical Officer for Thatcham Research affirms that despite the headlines which suggests a lack of lithium availability, there are, in truth, more than enough resources to meet global and UK demands until at least 2050.

But, looking beyond misconceptions, greater adoption of EVs in farm settings will rely on improvements to infrastructure, followed closely by addressing durability and reliability issues. To succeed, increasing the availability of electricity in rural areas will be imperative, as well as exploring the potential for vehicle-to-grid technology to provide a continuous power supply.

And then there’s the battery issue. Sceptics claim that the largest problem with electrifying heavy vehicles is that battery-powered options don’t have the energy density of a diesel model required to do long, demanding work in the field. Bigger batteries can be used to provide better stability, traction and performance, but more work is undoubtedly needed here.

Adding to the challenges, during 2022, there has been global slow-down in EV production resulting from the impact of war in Ukraine on product availability and supply chain processes.

The benefits and challenges of using alternative fuels

So, while significant progress is being made in EV adoption, there are undoubtedly obstacles. And, just like other markets, the farming industry is looking at the viability of alternative fuel sources too.

One such fuel source hitting the headlines is biofuel. Also known as agrofuel, these fuels are mainly derived from biomass or bio waste. One of the most important advantages of using this liquid fuel is that it can be easily pumped and handled, but there are complications too. One of the greatest problems that is being faced by the researchers in the field is how to covert the biomass energy into the liquid fuel in the first place – and more research is required.

For many experts, the most promising news is that hydrogen is fast getting closer to being a viable option for fuel in industrial settings. For some, this would be preferable over heavy electric vehicle batteries which bring their own complications.

However, there are still challenges with hydrogen in terms of sourcing and storing it safely. Hydrogen can leak out of ordinary metal storage containers – causing a logistical nightmare when it comes to infrastructure. Promisingly though, while the infrastructure in the UK is still lacking, the system has been proven in countries such as South Korea and Japan, where sales of hydrogen-powered vehicles have reached the tens of thousands.

Another consideration is that producing hydrogen carries its own carbon footprint - and is costly too – particularly challenging as farmers, like the rest of the world, find themselves in the midst of a cost-of-living crisis.

Meeting the needs of an evolving industry

In 2019, agriculture was the source of 10% of total greenhouse gas emissions in the UK, and with the climate crisis top of the global agenda, it’s no surprise that farmers are committed to powering a more sustainable future.

And, while there’s no silver bullet in terms of ‘greening’ the industry – it’s heartening that progress is being made.

With increased pressure to reduce carbon emissions, the widespread adoption of electric powered vehicles for farming and agricultural practices looks most imminent. And while there are challenges to be overcome, the momentum and desire is certainly there.

Find out more information about our agricultural motor insurance here

For any Agriculture enquiries, contact our team on 0345 600 2284 or agriculturequotes@ers.com

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