Stagecoach continues to make significant investment in modern vehicles with improved environmental performance. We have invested around £61m in the year to 30 April 2008 in the continuing modernisation of our fleet, which meet and often exceed the latest environmental standards.

The Group has committed to invest a further £71m in more than 580 new vehicles for the UK during the financial year ending 30 April 2009. It includes investment in greener bus technology to meet new European emissions standards more than a year ahead of schedule. More than 220 new buses and coaches will meet new Euro 5 emissions standards, which are not due to come into force until 1 September 2009. These vehicles will use selective catalytic reduction (“SCR”) technology to reduce nitrogen oxides in the exhaust gas.

We are testing the UK’s first Bio-buses, which run on 100% biodiesel manufactured by Motherwell-based Argent Energy Ltd. The bio-fuel is manufactured from used cooking oil and other food industry by-products, which are from sustainable sources that do not involve the destruction of natural habitats or compete with the human food chain. The environmental project also allows customers to exchange used cooking oil for discounted bus travel. The initiative, which was launched in October 2007, cut CO2 emissions from the buses by around 80% in the first six months of the project, saved approximately 550 tonnes of carbon, and more than 21 tonnes of used cooking oil has been recycled.

Stagecoach’s UK bus fleet of around 7,000 vehicles currently runs on a blend of 95% diesel and 5% bio-matter, which can be derived from sources such as soy, palm, rape, sunflower and used cooking oil. For the past three years, we have been using a fuel additive Envirox™ across the UK fleet, achieving a reduction in fuel consumption of 4% to 5% and a similar decrease in associated emissions. Stagecoach vehicles have now clocked up more than 700 million miles using the additive, developed by the leading international nanomaterials group Oxonica plc, delivering a significant saving in carbon emissions. We also have a dedicated training programme for our bus drivers that emphasises fuel-efficient driving techniques.

Stagecoach is to source most of its electricity requirement for its UK bus operations from renewables as part of its strategy to make its operations more environmentally sustainable. The two-year contract with Opus Energy, a leading independent supplier of electricity to UK businesses, covers electricity supply to around 240 UK sites operated by Stagecoach. Electricity generated from mostly small-scale hydro, as well as on-shore wind and biomass, will provide more than 70% of the required supply, with the remainder coming from cleaner, low-carbon sources. The use of renewable sources to generate electricity will decrease emissions of CO2. Stagecoach is also installing smart meters to help cut energy use as part of the contract.

In addition, we have cut emissions from around 90 of our largest UK bus locations by more than a third after the introduction of a hi-tech energy management system. Gas consumption has been slashed by an average of 36%, while CO2 emissions have been cut by more than 6,200 tonnes a year. Developed by Manchester-based Vickers Electronics Ltd, the technology uses self-learning predictive programming, coupled with high accuracy temperature sensing. It takes over the control of the existing heating and delivers improved control, staff comfort and dramatic reductions in energy consumption, saving hundreds of thousands of pounds a year.

In April 2008, Stagecoach launched Scotland’s first carbon neutral bus network. The ground-breaking environmental initiative, in partnership with Scottish charity, Global Trees, will see all of Stagecoach's Fife to Edinburgh bus network become carbon neutral for the next five years. Around 140,000 trees will be planted in the south of Scotland this year, saving 21,500 tonnes in CO2 emissions.