The cost of decarbonisation has become the most significant financial pressure on the freight industry, despite fuel price fluctuations and wage inflation, an industry body has warned.
The Freight Transport Authority Ireland said the Government’s ambitions to decarbonise the industry and achieve net zero emissions by 2050 “will be missed” without targeted incentives.
"The biggest pressure on the bottom line of many transport and logistics businesses at present is the demand to decarbonise and innovate," said Aidan Flynn, FTAI chief executive.
Mr Flynn added that the industry is supportive of the climate targets but "to make all the changes necessary to achieve them requires significant resources and funding".
“New vehicles, newly-trained staff to operate and service them, and a new refuelling network all will take funds which our industry simply does not have,” he said.
Mr Flynn made his comments in the organisation’s pre-budget submission, as industry representative bodies ramp up lobbying activity in the final weeks before Budget 2025 is finalised.
He called for grants and subsidies to be included in the upcoming October budget “to keep transport moving across the country".
Other costs have weighed on the freight transport industry, such as fuel and wage inflation, the FTAI said.
In its submission, it said these high costs have “squeezed” revenue streams and customers may be hit with higher prices for goods, despite overall cooling inflation.
“These increased costs will need to be met somewhere,” said Mr Flynn.
Mr Flynn added that the freight industry is “crucial to all economic activity across the country, as well as the nation’s trading relationships".
The transport sector, including truckers, have had to adapt to fluctuations at the forecourts over the last year.
Brent crude futures were up $1.51, or 1.89%, at $81.27 a barrel following previous gains.
Growing conflict in the Middle East and supply risks could lead to further volatility in prices, which will eventually trickle down to the pumps at Irish forecourts.
Meanwhile, the restoration of excise duty on fuel earlier this year may lead to further price increases.
The restoration of excise duty on fuel was implemented earlier this year after it was cut in 2022 amid the energy crisis sparked by Russia’s invasion of Ukraine.
However, figures released earlier this year showed an increase in activity in the freight sector compared to the main covid years of 2020 and 2021.
Figures from the Central Statistics Office (CSO) showed of 165m tonnes of goods were transported by road last year compared 141m and 153m in 2020 and 2021 respectively.
However, the organisation covers all aspects of private and public freight transport, passenger transport, and logistics supply chain, including not only road but also rail, sea, and air.
The FTAI is a membership trade association for the Irish freight, passenger, and logistics industries and is owned and governed by its members.
It represents some of the largest freight and passenger operators in Ireland, with more than 25,000 employees and 10,000 vehicles operating between them.