Model clause

Greener and More Efficient HGVs in Road and Multimodal Transport Agreements

Caesar's Clause

A clause requiring contracting carriers to use energy efficient vehicles for any road carriage under a transport agreement, or otherwise specify that a percentage of road journeys will use green HGVs.

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Why use this?

This clause can be incorporated into facility agreements and supply chain contracts to help companies meet their emissions/carbon footprint targets.

It will allow companies to require contracting carriers to reduce their emissions by continuously improving operations and through the appropriate renewal and development of their HGV fleets.

It is intended to help companies get ahead of the policy curve, assuming there will be increasing EU and UK regulation in this sphere in the future.

How it promotes a net zero future

This clause is intended to bring forward the transition to net zero in the road haulage sector and also help companies keep ahead of EU/UK Regulations in the sector.

It will help reduce CO2 emissions from road haulage, increase companies’ awareness of CO2 emissions throughout their supply chains, and enable companies to consider and compare the environmental impact and carbon efficiencies of carriers when choosing between them.

This clause further incentivises the uptake of zero- and low-emissions vehicles (ZLEVs) by obliging companies to use a certain percentage of ZLEVs in their fleet, or to reach a target percentage of journeys using ZLEVs, or otherwise reduce the average specific CO2 emissions associated with their HGV fleet.

This clause could also foster competition in the “green transport” market.

Disclaimer - please read

The clauses on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.

The clauses on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the clauses will achieve the relevant climate goal or any other outcome.

This website (and the Climate Contract Playbook) does not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and does not contain legal or financial advice. The clauses are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.

While care has been taken in the drafting of these clauses, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

Additional Definitions

Alternative Fuel means fuel or power sources which serve, at least partly, as a substitute for fossil fuel sources in the energy supply to transport and which have the potential to contribute to its decarbonisation and reduce the Carbon Footprint and includes but is not limited to: (i) electricity; (ii) renewable fuels listed in the Renewable Transport Fuels Obligation Process Guidance available on the Department for Transport website at the date of this agreement [as amended from time to time]*; (iii) natural gas in gaseous form (compressed natural gas) and liquefied form (liquefied natural gas (LNG)); and (iv) liquefied petroleum gas.

* [Drafting note: Excluding the bracketed text would give carriers certainty over the fuels they can use. Including the bracketed text would cover fuels that were subsequently added in future editions of the Renewable Transport Fuels Obligation Process Guidance, giving carriers a potentially wider list to work from. However it could potentially also mean that fuels came off the list if it was subsequently decided by the Department for Transport that certain fuels were less environmentally beneficial.]

Carbon Dioxide Equivalent (CO2e) means the standard metric measure used by the United Nation (UN)’s Intergovernmental Panel on Climate Change (IPCC) to compare GHG Emissions on the basis of their global warming potential over a specified timescale in order to express a Carbon Footprint that consists of different GHGs as a single number.

Carbon Footprint means the amount in tonnes of carbon dioxide and Carbon Dioxide Equivalent of GHG Emissions that will be released into the atmosphere as a result of [the Service Journeys performed under] this Agreement determined in accordance with [the Carrier’s carbon footprint methodology and carbon footprint tool OR [STANDARD] OR an internationally recognised environmental standard].

Carrier means [name of the road freight transport provider]. [Note: If not defined elsewhere. If the Carrier is not a party to the agreement, then the relevant party must be required to ensure that the specified carrier complies with this clause.]

Commencement Date means [date]. [Note: If not defined elsewhere]

GHGs means the greenhouse gases listed at Annex A of the 1998 Kyoto Protocol to The United Nations Framework Convention on Climate Change, as may be amended from time to time including: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3), each expressed as a total in units of carbon dioxide equivalent (CO2e).

GHG Emissions means emissions of GHGs. 

Green HGV means an HGV that is powered (wholly or partly) by an Alternative Fuel for so long as that HGV uses only an Alternative Fuel [and] [or] which is classed by the UK Vehicle Certification Agency as an ULEV or ZEV.

HGV means a heavy goods vehicle as defined in Article 2 of the Regulation (EU) 2018/956 as it is part of the domestic law of the United Kingdom from time to time.

Rejection Notice has the meaning given to it in Clause [2.3] below.

Remedial Plan means a plan [substantially in the format set out in Schedule [  ]] prepared by the Carrier for (i) reducing the annual aggregate GHG Emissions attributable to the Service Journeys; [and] (ii) carbon offsetting [  ]% of the annual GHG Emissions attributable to the Service Journeys. 

Service Journeys means the [total distance covered by] road freight journeys performed by or on behalf of the Carrier pursuant to this Agreement.

Shipper means [name of the employer of the Carrier]. [Note: If not defined elsewhere.]

Ultra Low Emissions Vehicle (ULEV) means a vehicle that emits less than [75g] of CO2 per km travelled as measured by the World-Harmonised Light-Vehicle Test Procedure (WLTP).

Zero Emissions Vehicle (ZEV) means a vehicle powered by an engine, motor, process or other energy source that, while in operation, produces no GHGs. 

 

Additional Clauses

1. Green HGV Obligation

1.1 The Carrier shall use Green HGVs for at least [20]% of the Service Journeys.

1.2 The Carrier shall [use all commercially reasonable efforts to] reduce its GHG Emissions attributable to Service Journeys by continuously improving operations and through the appropriate renewal of its HGV fleet. 

1.3 Within [10] days after the end of every [six (6) month period], beginning with the date falling [six (6) months] after the Commencement Date, the Carrier shall evidence to the reasonable satisfaction of the Shipper that:

(a) the Carrier’s aggregate GHG Emissions attributable to the Service Journeys remains below [level] per [   ] [kilometres / miles]; and      

(b) the Carrier has or has irrevocably committed to effectively offset [   ]% of the GHG Emissions attributable to the Service Journeys through a project that has been verified in accordance with [insert name of voluntary standard] or from a United Nations Framework Convention on Climate Change (UNFCCC) clean development mechanism (CDM) [or [successor/ equivalent] UNFCCC mechanism] project.                          

2. The Remedial Plan

2.1 No later than [two (2) months] after  the Commencement Date, the Carrier shall produce and send the Remedial Plan to the Shipper for approval. 

2.2 Within [twenty-eight (28)] days of receipt of the Remedial Plan, the Shipper shall notify the Carrier in writing of its approval or rejection of the Remedial Plan, such approval not to be unreasonably withheld. 

2.3 If the Shipper gives a notice of rejection in response to the Remedial Plan (“Rejection Notice”):

(a) the Shipper must outline reasonable requirements and specifications in that notice for the modification of the Carrier’s proposed Remedial Plan;

(b) upon receipt of the Rejection Notice, the Carrier shall amend the Remedial Plan to comply with the Rejection Notice, and within [fifteen (15) days] of receipt of the Rejection Notice, send the revised Remedial Plan to the Shipper for review; and

(c) upon receipt of a  revised Remedial Plan, the Shipper shall comply with Clause 2.2 [for a maximum of [2] times, after which the Shipper will provide a notice of approval in relation to the revised Remedial Plan provided the Carrier has used commercially reasonable efforts to meet the Shipper’s requirements and specifications. If the Shipper is required to approve a Remedial Plan under clause 2.3(c), the parties will meet within [30] days to discuss further improvements to the Remedial Plan]. 

2.4 On receipt of the Shipper’s notice of approval of the Remedial Plan, the Carrier will implement promptly and maintain the Remedial Plan[, using commercially reasonable efforts to meet or exceed the agreed target reductions and offsets].

2.5 Within [10] days after the end of each [quarter] after the first [quarter] after the Commencement Date (allowing for implementation of the Remedial Plan), the Carrier shall provide a written report of its performance against the Remedial Plan to the Shipper. 

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