Applications to the second round of the Scottish Zero Emission Bus (ScotZEB2) challenge fund have opened. Bidders will compete for a share of the up to £58 million allocated by the Scottish Government towards new or repowered zero-emission vehicles and associated infrastructure, with both coaches and buses in scope of that support.
As previously noted by then-Minister for Transport Jenny Gilruth, ScotZEB2 targets SME businesses. Up to £135,000 per vehicle will be available from the fund, dependent on passenger capacity.
In an indication that a number of coach and minicoach operators in Scotland are interested, in ScotZEB2, around 10 have been awarded money from that associated Market Transition Scheme (MTS). When ScotZEB2 was first announced in 2022, it was said that MTS would support the development of “collaborative, innovative, ambitious and competitive” bids.
Consortium-based approach to ScotZEB2 bids required
Guidance for ScotZEB2 states that only submissions from consortia are eligible. Transport Scotland says that approach should “minimise the… subsidy required.” Each consortium must include at least two SME coach or bus operators and/or two community transport operator, and at least one supplier of private finance. Other bodies – such as vehicle suppliers, energy companies and local authorities – may also be represented.
Transport Scotland defines an SME as an operator with fewer than 250 employees, and either a turnover of below €50 million or a balance sheet value of less than €43 million. The Energy Saving Trust will administer ScotZEB2 on behalf of Transport Scotland.
Notably, the guidance states that ScotZEB2 funding for new vehicles will, where appropriate, be conditional on space for bike transport along with room for a wheelchair user and buggy. Where operators wish to procure models without that provision, “a credible, robust case” outlining why it is inappropriate should be presented.
Up to £135,000 per vehicle in ScotZEB2 funding available
Drawdown of funding allocated to the winners will be available over FY2023/24, FY2024/25 and FY2025/26. Per-vehicle thresholds are:
- £50,000 for a bus that is repowered from diesel to zero-emission
- £60,000 for a zero-emission coach or bus with at least nine passenger seats and at least one wheelchair user space.
- £105,000 for an accessible zero-emission coach or bus with a capacity for 32 or more passengers
- £135,000 for an accessible battery-electric coach or bus with at least 45 seats
- £135,000 for a zero-emission coach or bus with a total capacity for at least 60 passengers.
For infrastructure captured by ScotZEB2, the subsidy will be for no more than 70% of the capital costs for electric charging or hydrogen refuelling installations.
Market Transition Scheme sees several SMEs awarded funding
On MTS, 12 organisations have been awarded up to £10,000 each from the first stream. Each of those has formed a contractual arrangement with a consultancy or agency to explore options for fleet decarbonisation or carried out that task in-house. Both new zero-emission vehicles and repowered examples feature in these projects.
In stream two, six bids have been awarded up to £25,000 each. Stream two is similar to stream one, although it has seen development of propositions to offer multiple operators “a simple route to shift to zero-emission.”
That focuses on the development of propositions such as leasing or mobility-as-a-service or fuel-as-a-service, and the attraction of enough operators to participate “so that a game-changing bid to ScotZEB2 can be made.” Potential purchase of a large number of zero-emission vehicles that are then leased of contracted to operators falls under stream two.
In stream three, Houston’s Coaches has been awarded £100,000. This stream is for applicants that repower at least one vehicle to zero-emission and requires involvement of a university or other research organisation.
The earlier ScotZEB1 supported 276 zero-emission buses and associated infrastructure via a total award of around £62 million. Applications to ScotZEB2 close on 15 September.
