By Will Nichols, Source: BusinessGreen

Oil prices that have stubbornly remained above $100 a barrel have prompted around a quarter of businesses to look at alternative fuel vehicles as a way of cutting costs, new research has revealed.

Asian and G7 countries are leading the charge, where respectively 31 per cent and 28 per cent of companies have examined the possibilities presented by greener fleets, such as cars powered by electricity, biofuels, or liquefied natural gas.

That is the conclusion of a major survey of 3,000 executives conducted by business advisers Grant Thornton and released last week, which also revealed that high oil prices are the primary driver behind growing corporate interest in green fleets.

Just under 70 per cent of respondents named a high oil price as the main reason for exploring alternative fuel options, while 62 per cent cited general cost management and 55 per cent highlighted tax breaks as also informing their decision.

However, businesses are also increasingly aware of the environmental impact of their fleets – 58 per cent listed saving the planet as a driver behind the adoption of alternative-fuel vehicles.

Those who had not considered green fleet options named high upfront costs as the main reason for not doing so, followed by the difficulty of charging or refuelling electric, hydrogen, or natural gas vehicles.

Electric and hybrid cars are widely considered to save money over the long term by reducing the cost of refuelling, but their uptake to date has been slow, partly due to the high upfront cost and the absence of recharging infrastucture.

Daniel Taylor, partner and head of automotive at Grant Thornton UK, said to capitalise on the shift towards greener fleets, car makers had to produce low carbon vehicles that can compete in terms of performance and most importantly price, while offering cost savings in terms of refuelling.

“Many dynamic businesses are… looking to determine whether switching their fleets to alternative fuels could offer cost savings, allowing them to free up resources which could be better employed in efforts to expand their operations,” he said. “And of course, switching to ‘greener’ fuels also boosts their environmental credentials.

“Given the high cost of alternative fuel vehicles at present, incentives will be a key driver of more widespread adoption. However, increased production of alternative fuel vehicles should lower costs, increase awareness, and spur businesses to consider them when opportunities arise to expand or replace their fleets.”