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Despite investment by transport operators in electric vehicles (EVs), such as Modec (pictured), a report from European lobby group Transport & Environment says they currently have few environmental benefits.

The switch to electric vehicles could in fact speed up climate change because mass market adoption of EVs across the commercial and passenger sector will increase demand for electricity, which requires more coal  to be burnt and therefore more CO2 emissions, says the report conducted in conjunction with the Environmental Transport Association (ETA). It says the potential environmental benefits of electric vehicles are "wholly dependant on changes in the way electricity is generated, energy taxed and CO2 emissions regulated".

ETA director Andrew Davis says: "While the report is not intended to dampen enthusiasm for electric vehicles, their introduction should not be viewed as a panacea. Significant changes to the way we produce and tax power are needed before we [can] reap any benefits."

A key finding of the report stated that EVs powered by wind or solar energy are superior, but it continues by saying that hybrid vehicles are actually more environmentally friendly than EVs powered by electricity from coal-fired power stations.

Furthermore, the report suggests that price and performance improvements are only realistically  possible in the medium term, and that there is little evidence to suggest EVs will compete head-on with conventional vehicles in the next 20 years.

In September, UPS agreed to run the transport and logistics operations for the London 2012 Olymplics, saying it would use "electric zero-emission vehicles" as part of its fleet. UPS has, so far, been unavailable for comment.

Other leading operators investing in electric vans to boost their environmental credentials include TNT and FedEx.