Sustainability boosts investment in the bus and coach sector…

The bus and coach sector is seeking sustainable finance solutions to encourage pre-pandemic passenger levels and meet net-zero emission targets.

The bus and coach sector was severely impacted by the COVID-19 pandemic. During that period, most public transport journeys became unexpectedly empty and operated at a reduced capacity, and shuttle services and long-distance journeys were mostly suspended.

Despite these difficulties, the industry is now recovering. In the UK, passenger demand is rising rapidly with journeys increasing by 86% between January and March 2022, compared to the previous year.

In addition to the rising demand for travel, attitudes towards how consumers travel have changed. With the emphasis now set on sustainability (the UK’s net-zero ambitions for 2050, consumer appetite, and rising inflation costs), attention is shifting to bus and coach journeys, which provide a dependable and affordable green alternative.

Consumer demand and net-zero emissions

Consumers understand that coach travel is not only convenient, but also greener than other modes of transportation, with lower average CO2 emissions per passenger than cars, aeroplanes and rail. However, this demand may put additional pressure on operators to provide the most modern and environmentally friendly fleets possible.

To meet demand and emissions targets, bus and coach operators are investing in cleaner and greener vehicles, typically powered by a combination of electric and hydrogen sources.

In support of the UK’s net-zero ambitions, the government has pledged to fund a total of 4,000 zero-emission buses across the country. However, annual bus data for England showed that only 2% of the current bus fleet meets the net-zero emission standard. This indicates that additional investments are necessary for fleets to reach net-zero emissions.

Sustainable finance

In the current market, bus and coach operators face a number of challenges which include initial capital expense and dealing with supply chain problems. As a result, operators are increasingly turning to private sector financing to allow investment.

The financing arranged may contribute to the acquisition of vehicles and technologies, and the development of charging or fuelling infrastructures, all without requiring operators to use their own cash resources. The finance can also help operators meet their sustainability and environmental targets.

The bus and coach sector is accelerating towards pre-pandemic passenger levels and net-zero emission targets. More operators are seeking to finance their investments in this growth and fleet modernisation. These financing arrangements provide the flexibility required to invest in adapting for future changes in technology.

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