Excluding the obvious of more electrification what would be the best way for the government to encourage electric freight?
Probably going to have to be positives, as anything such as slowing down, restricting diesel routes etc would probably just drive the business away from Rail.
Cheap electricity charges?
Cheap loans or grants for ROSCOs to buy new locos?
Upgrades to the power supply? The ECML is a case in point with this; barely any electric freight runs on the line as a result of there being very little in the way of spare power north of Newcastle to support additional electric services. TPE are still having to use diesel between Morpeth & Longniddry.
Easing timetable restrictions might tip the scales in favour of electrical haulage where possible, allowing traction changes to take place in more yards etc. Currently, electric/diesel changeovers only occur at (IIRC) Mossend, Crewe BH, Ripple Lane, Wembley EFOC, and Ipswich. But then again, to increase the number of yards where this could occur would need more electrification anyway.
For example, to turn the Mendip aggregate traffic over to electric haulage, you would need to wire up Acton Yard to the North London Line, and electrify west of Newbury to Westbury at the very least. Electric traction could give way to diesel at Westbury Yard.
To allow more changeovers to occur at Doncaster, you'd need to wire the route up between Shaftholme & Colton Junctions via Knottingley and Sherburn-in-Elmet as a diversionary route from the ECML (the only electric link between Doncaster & York).
I'm sure this could probably warrant its own thread though...