Purchasing policy and whole-life costing

The best way to reduce your fleet's costs and its environmental impact is to purchase more fuel-efficient vehicles and to take into account the whole-life cost, not just the initial capital cost, of a vehicle. Fuel consumption can contribute up to a quarter of a fleet's total costs, so even though some vehicles may cost more initially, once fuel use and maintenance are taken into account they can be cheaper to run in the long term.

You should try and adopt whole-life costing as a means of selecting vehicles and bare in mind that certain features such as aerodynamics, air conditioning and four-wheel drive etc., can affect fuel consumption dramatically.

Encourage staff to use more fuel-efficient cars in return for a cash payment. The savings your company will make on fuel costs should cover this payment easily. Employees are often just as interested in helping to protect the environment, so provide staff with information on the relative environmental impact and fuel efficiency of the vehicle you offer them, and of the car they currently use.

Petrol engines produce smaller quantities of particulates than diesel engines, and a modern petrol engine with a catalytic converter also emit fewer oxides of nitrogen and hydrocarbons, but only once the engine is warm, which can take up to 5 miles of driving from cold.

Diesel engines are more fuel-efficient and so produce less carbon dioxide. They also produce low amounts of carbon monoxide and hydrocarbons but have higher emissions of oxides of nitrogen and are a primary source of particulate pollution. Health risks from particulates are of increasing concern, particularly in urban areas. Ultra low sulphur diesel (ULSD) typically gives a 30% reduction in particulate emissions. City Diesel produces even less pollution and is virtually odourless.

Vehicles running on Liquid Petroleum Gas (LPG) or Compressed Natural Gas (CNG) produce significantly less nitrogen oxides than diesel and virtual eliminate sulphur and particulate emissions. CNG and LPG fuels enjoy a significant duty advantage over petrol and diesel and vehicle performance is similar to conventional fuels. The cost of conversion can be high, but again, the whole-life cost should be considered.

Electric vehicles eliminate all emissions at the point of use (clearly there are emissions associated with the production of electricity, but these are localised and can be controlled more effectively). The cost of electric vehicles is still very high.

Monitoring of fuel consumption could bring considerable cost savings for your company. It allows poorly performing vehicles and bad driving techniques to be identified. It is also essential if you are going to raise employees' awareness of the environmental impacts associated with poor fuel efficiency and provides a benchmark from which to assess improvements. You may want to consider introducing a monitoring system based on fuel cards or mileage recorders. This will provide comprehensive reporting on mpg at little extra cost.

The way in which a vehicle is driven has a significant influence on its environmental impact. Apart from the accident implications of aggressive driving, research suggests that road technique can also influence fuel efficiency by as much as 30%. Many organisations now offer training in defensive driving techniques and environmental awareness to company car users. The use of econometers that provide instant feedback on fuel consumption can reinforce good driver behaviour, and can produce long-term fuel consumption savings of up to 15%.

Good route planning can be another significant step in reducing journey times and stress, and saving fuel. Good vehicle maintenance is also very important.

Consider setting targets for improving mpg and keep your staff informed of their progress. You may want to introduce a training programme on defensive driving techniques or establish fuel efficiency league tables, giving bonuses to the best drivers.