Green transition: The impact on rental

Oct 18, 2022 | ERA news

Ever since the EU set out its plans to become the world’s first climate neutral continent by 2050 in the European Green Deal, made legally binding in the Climate Law and supplemented by the Fit for 55 package, the need for business and industry to transition to more green and sustainable activities has been inevitable.

For rental companies, this presents a number of challenges and opportunities, especially in the context of the disruption of the Covid-19 pandemic, energy security, rising inflation and geopolitical instability putting pressure on businesses. However, as an inherently sustainable and circular business model, rental has a great deal to contribute to the green transition.

Despite the short-term costs, the longer-term prospects for rental companies as enablers of decarbonisation for their customers point to the opportunities that the transition will bring about.

Putting the green transition under the spotlight

In June, the Sustainability Workshop at the ERA Convention in Riga in June explored the barriers and solutions to undertaking this green transition to try to get a better understanding of the impact on the rental industry.

This discussion brought out the complexity of the green transition for rental companies, encompassing the mindset, skills and attitudes of people, policy frameworks, infrastructure, financial costs, a lack of incentives or support from governments and technological uncertainty.

For the transition to be successful for rental companies, it will be essential to change customer habits, moving away from a model of ownership to one of use, as well as to invest in people with the right skillset. On top of that, the cost of investing in green equipment compared to standard equipment needs to be overcome and incentivised by governments, who will also need to set a clear regulatory framework and invest in the necessary supportive infrastructure for green equipment, such as for charging electric machines.

Cost is the biggest barrier for rental companies

In addition to this, ERA (with Lectura) surveyed rental companies from across Europe on their awareness of environmental legislation and preparedness for the change. According to the survey, almost 70% of rental companies are aware of upcoming environmental legislation, whilst 58% have already started the transition to greener equipment. Over 46% said they would need information or support to prepare for the implementation of new regulations.

Cost, however, was clearly identified as the main obstacle to this transition (51.6% of rental companies), whilst others identified no customer demand (16.1%), no benefit to their business (15.5%) and insufficient infrastructure (14.8%). To address the issue of cost, respondents highlighted financial incentives (44.3%) and tax relief (19.1%) for transitioning to greener equipment, as well as training (24.3%) and information about the benefits (11.3%) as additional supports.

A more comprehensive ERA Equipment CO2 Calculator

To support rental companies and equipment users with the green transition, ERA is in the process of releasing a series of updates to the ERA Equipment CO2 Calculator, encompassing an expanded scope, enhanced functionality and improved navigation to provide a more comprehensive, easier to use and more practical tool for equipment stakeholders.

This will provide three calculators in one, with calculators for handheld tools and modular space added to the current version. The new version of the Calculator will also enable users to group calculations for a specific project, task or jobsite, or calculate the carbon footprint of an entire equipment fleet. The new version will be rolled out in three stages before the end of the year, with the project calculator coming first, followed by the calculators for modular space and handheld tools.

The current version of the ERA Equipment CO2 Calculator is available here:

This article was first published in the International Rental News (October 2022).

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