ERA: Rental and the climate conundrum

Equipment rental can help the construction sector decarbonise and meet Europe’s climate goals.

In December 2019, the EU set out its plans to become the world’s first climate neutral continent by 2050 in the European Green Deal. This will also serve as a new growth strategy to enable a sustainable green transition for business and industry.

Starting with the ‘Climate Law’, which will make net-zero carbon emissions by 2050 a legally binding target and will be directly transposed into national law in every EU Member State, the Green Deal will provide an ambitious policy framework for the next five years.

As the Intergovernmental Panel on Climate Change (IPCC) has said, the construction sector will need to decarbonise by 2050 in order to help meet these ambitious goals, and a number of policy initiatives within the Green Deal will affect the construction industry. These include a new Circular Economy Action Plan, further guidance on Green Public Procurement and a Decarbonisation Package.

In this context, the use of construction equipment is one of the areas in which the climate impact of the construction sector can be reduced.

Rental is part of the solution

A recent study commissioned by the European Rental Association (ERA) and produced by three independent research companies – Climate Neutral Group, CE Delft and SGS Search – shows that renting construction equipment, as a circular business model, can provide significant benefits and help reduce the carbon footprint of construction equipment.

This is primarily due to optimisation in four key areas and, depending on how equipment is used, can bring significant reductions in emissions, in the range of 30-50%.

First, with large fleets and a wide range of equipment, rental companies can provide the optimal piece of equipment for a given job.

Second, because of large and dense networks of rental depots, rental companies can minimise transport distances and, consequently, emissions by dropping off and picking up machinery, as well as optimising load factors.

Third, rented equipment has a high utilisation rate, which increases the fuel consumption efficiency per hour of use over the whole lifecycle.

Finally, rented equipment is usually well maintained, increasing the efficiency and extending the lifetime of equipment.

Campaign

With pressure on the construction sector to decarbonise set to intensify, ERA has launched a campaign to raise awareness of the rental model and the benefits it can bring in terms of efficiency, optimisation and sustainability among policymakers and equipment stakeholders.

These benefits can help the construction industry meet the targets set out in the Paris Agreement and the EU’s climate law, as well as adapt to the demands of the green transition. Circular business models that emphasise access to goods over ownership are a growing trend as businesses seek to become more sustainable and rental, as an inherently circular model, goes hand in hand with the transition to climate neutrality.

The rental industry is also well placed to further support the sustainability of construction equipment, including making responsible fuel and alternative energy choices, optimising logistics and transport and ensuring proper recycling to maximise the recovery of materials used in construction equipment.

Calculating carbon

Looking to the future and the need to make more sustainable choices, ERA has started work on a ‘CO2 Calculator’ for general use by equipment stakeholders, based on the calculator the researchers developed for the study.

Combined with the ERA Total Cost of Ownership calculator, the ‘CO2 Calculator’ will enable companies to make efficient and environmentally friendly choices when using construction equipment, as well as being a useful tool for understanding and demonstrating the carbon impact of construction equipment.

The right objective at the right time

Climate neutrality by 2050 is the right objective at the right time. The EU has made decarbonisation the central pillar of its strategy for the green transition and industrial growth, and all industries will be required to play their part.

The need for decarbonisation in the construction sector is clear and the rental industry stands ready to help.

The Carbon Footprint of Construction Equipment study can be downloaded here