Juan José Torres Muñoz, President of ASEAMAC & Managing Director of TST: “The rental market is not ready yet to pay more for electrical machinery’’

The European Green Deal is the hot topic of the moment in the machinery world, and rental industry makes no exception. ERA Convention 2022 in Riga that took place in June was the perfect opportunity for us to ask Juan José Torres Muñoz, President of ASEAMAC & Managing Director of TST to share his thoughts on the new EU regulations and on the challenges that he is already dealing with regarding the implementation.

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Florentina Chiriță: What is your opinion about the Green Deal, the main topic presented at ERA 2022?

Juan José Torres Muñoz: Going from diesel-powered machinery to electrical machinery is an idea that I agree with 100%, but unfortunately, we do not have the electric power to support this very ambitious sustainable change. In Spain, this is our number one problem, our possibilities are limited from this point of view. 

Before trying to implement the Green Deal regulations, Spanish Government must solve the problem with the electricity power. They must take care of this issue immediately. In other words, Spanish authorities have to help us, so that we can help them. The infrastructure is not prepared and looks like we need many years to improve that. Everyone agrees with the Green Deal, but batteries are very expensive, and machines cost almost double than the conventional ones. It is very hard to achieve sustainability when living in a world where money play the main part.

Florentina Chiriță: How prepared do you think the European rental industry is to implement the EU Green Deal regulations by 2030?

Juan José Torres Muñoz: We are more than prepared, especially in terms of maintenance. Compared with machinery powered by diesel engines, electrical machinery is easier to take care of, from a technical point of view. Moreover, electrical machines are more profitable for the rental industry, but until we will not unblock the situation with the power units, we will not be able to get to this next stage. To give you an example, in Barcelona, my hometown, electrical companies will provide customers power only two months after they open their doors or finish their construction.

The rental companies in Spain are ready for the Green Deal, but customers don’t have power to sustain this process, nor the infrastructure for it, that is our biggest challenge. The Spanish government must make a plan to solve this as soon as possible. The rental business is going well in our country, but if we want more companies to invest in our country, we have to offer them solutions, not more problems to deal with.

Florentina Chiriță: How are ASEAMAC members handling this difficult situation?

Juan José Torres Muñoz: Right now, energy and construction materials are becoming more and more expensive, so our overall cost increased because machinery, obviously, became more expensive, as well. The entire market is in the same situation, all the prices are going up and there is nothing we can do about it. All the players, all stakeholders are rising their prices and the market is accepting that because there is no other way. If you are a rental company and you are not increasing your prices now, then when are you going to do it?

This is really not a good moment for the Green Deal. The market is not ready to pay the difference between a diesel unit and an electrical unit. When 30-40% of the companies will start using electrical units, the prices of these units will be, in some cases, double, and customers are not willing to pay double. Also, we need batteries, but they are not developed at the moment. The big costs and the fact that we have less than 1% of the market using electric machinery is not very encouraging for the customers. They will see the value of the green equipment only when more and more players will offer it.

Florentina Chiriță: The implementation of the EU Green Deal might encourage contractors to buy less equipment and rent more, and this will be a great benefit for the rental industry. What is our opinion on this theory?

Juan José Torres Muñoz: The rental industry is the most sustainable use for the machinery, because companies are renting the same machinery to the contractors over and over again. In Spain we used to have a law that was not allowing contractors to get a government contract for building a highway, for example, without having their own fleet, so they invested millions of euros in machinery that after the projects ended, was not used anymore. Fortunately, things changed in the meantime and construction companies are now renting more and more equipment, which is great for the market.

Florentina Chiriță: How do you think the European rental industry will look like in 2 years from now?

Juan José Torres Muñoz: We love electrical machinery, we need it, and we want to use it because it will help us live, work and develop in a very well-deserved sustainable environment. On top of all the environmental advantages, electrically powered equipment requires less maintenance than combustion engines, so for rental companies it is a great option. However, the increase in cost (acquisition and batteries) compared to combustion is actually very significant. Electrical units are good business, but the customers do not see yet the benefits that they bring to the table, so at the moment our only option is to hope that the situation in the market will change for the better.