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Network Rail carbon reduction targets to impact supply chain

Collins said: “It’s great to see this decarbonisation commitment from Network Rail. It’s also a common theme among many businesses that the majority of carbon issues come from its supply chain. This is not just about the fuel used for vehicles, but wider issues like what carbon is created in the supply chains’ products and processes.”

“We are seeing many different approaches by businesses seeking to incentivise their supply-chain partners to decarbonise. There is no ‘one size fits all’. On one hand you may have collaborative approaches that encourage innovation in finding alternatives to carbon intensive products or processes. On the other, you may have contractual obligations that place financial risk on suppliers that fail to decarbonise adequately. Although there are benefits to collaborative approaches, the longer-term outlook is likely to be that supply chain businesses that fail to decarbonise swiftly will increasingly be penalised, and lose work to those with better carbon credentials.”

Blundell said that Network Rail’s carbon reduction targets will straddle two so-called ‘control periods’, which are five yearly cycles that Network Rail works to for budget and planning purposes. The current control period (CP), CP6, began in 2019 and runs until 2024. CP7 will run from 2024 to 2029.

“The timing of the announcement is interesting, particularly as it is a couple of years before the end of CP6 and the retendering of work in CP7,” Blundell said. “Bearing in mind the focus of work in the current control period is around maintenance and renewal rather than large scale capital works, it will give Network Rail the opportunity to test how best to engage and incentivise the supply chain before the tendering of CP7.”

“There are mechanisms within the CP6 frameworks which allow for peer review and for framework members to work collaboratively to achieve results. This announcement may indicate that Network Rail will be looking to collaborate closely with the supply chain. Having been one of the first organisations to embrace alliancing, commitments to zero carbon will lend itself to working closely in the delivery of projects with the supply chain,” he said.

Blundell said that CP7 is considered an important period in which Network Rail is expected to push forward with the digitisation of the railway in Britain in an effort to realise the efficiencies that are anticipated to follow on. He said the carbon reduction targets set by Network Rail are likely to shape that work programme.

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