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26/08/2016

Railways: ban on green tolls ‘absurd’ and ‘interventionist’

Transport

Railways: ban on green tolls ‘absurd’ and ‘interventionist’

Johannes_Ludewig_big.jpg

EU rules must be revised to enable governments to make truck drivers pay for the full costs they impose on society and the environment, insisted Johannes Ludewig, the executive director of the railway association CER, in an interview with EurActiv. But he fears strong opposition from member states and extreme time pressure will lead to an unambitious outcome.

Johannes Ludewig is executive director of the railway association CER.

To read a news article based on this interview, please click here.

What are your initial reactions to the latest draft of Commission plans to revise the Eurovignette Directive? We see that CO2 and accident costs have been left out…

First, I think the most important part is that we welcome very much the fact that the whole principle of internalisation of external costs is really now well understood and accepted as the key point of this proposal. This is really the most important – and a very positive – part of this proposal. 

Of course, we are seeing that not all the elements are integrated. As you mentioned, CO2 and also accident costs – as far as not covered by insurance – are not there, and of course we regret this.

We are seeing the argument from the Commission that, from a scientific point of view, CO2 should be better internalised by taxes on gasoline or diesel. And, in our view, theoretically we can follow that. But in reality, seeing the price levels of gasoline and diesel today, it is unrealistic that, in the forseeable future, any taxes on these two will be increased. 

And therefore we advise leaving these costs in the whole Eurovignette Directive as an option. I mean, it does not oblige member states to do anything, but it at least opens the door for them to do something if they want to. 

We really don’t understand why the Commission is making this differentiation – saying some elements of externalities can be internalised, some can’t. On these two you just mentioned, it means it remains forbidden for national governments to do it in the context of toll systems for trucks in their countries. We simply don’t really understand why this has been done. I repeat, it would have been and would be still only an option, not an obligation. 

So, we think that, if this is an optional approach, why not leave it to member states to decide whether they share the Commission’s reasoning or whether they want to use tolls to fight CO2? 

But do you agree that this directive should establish an enabling framework rather than a mandatory one?

Yes, we agree with that. Of course, we would prefer to have an obligation, but I think that is simply unrealistic. If you see the current state of the Eurovignette Directive and remember that we really had to convince the majority of member states to support that, it would be totally unrealistic to jump from a situation today where external costs are 100% forbidden to a situation where it’s all of a sudden 100% obligatory. 

So we think it is important now to take the next reasonable step by saying that the internalisation of external costs is allowed, is an option for member states and is not forbidden any more by European legislation. I think this is a realistic next step so we are supporting it. Although, of course, it could be a better world with an obligation, we are not asking for this at this moment. 

The trucking inudstry is pointing the finger at railways, saying that all the measures are targeting road and that rail should also play its part.

But that is ridiculous! They always say that, simply relying on the fact that other people are not reading the text. What they don’t say is that road is the only mode for which we have a legal situation explicitly forbidding the internalisation of external costs. For all the other modes, if national governments want to do that, they can do that – for rail, for inland waterways and so on. 

So it is a totally different situation for road, on the one hand, and rail on the other. If this text is now adopted, we would have, for the first time, an equal situation between the different modes, allowing internalisation of external costs for both road and rail.

This is also what the Commission is saying. So the road lobby’s argument of saying ‘OK, this is creating an unequal situation’ is simply not covered by the facts. 

If there was agreement on a mandatory approach for road transport, would you agree to one for rail too?

Well again I think it is unrealistic in the Council. It will not work. We need both institutions. 

By the way, the current version of Eurovignette, exclusively forbidding the internalisation of external costs, is unique in the whole European legislation in my view. 

There is no other piece of legislation in any other sector forbidding the prices in the sector from reflecting costs. This is a unique intervention into a market system. Legislation here is telling national governments that the prices they may charge, for example for the use of infrastructure such as motorways, are not allowed to reflect costs. In a market economy this is absurd, and I think unique. 

So what we are now doing – or what the Commission is proposing – is nothing more than returning, after a long time, to a normal situation. And that is long overdue, I think. 

However, in the last revision of the Eurovignette in the autmumn of 2005, we had already asked for this. But is worthwhile recalling the dramatic debate, when a majority of Parliament’s Transport Committee gave their support, for the first time, to the internalisation of external costs, and this nevertheless failed to materialise because the oppostion in the Council was just too strong. 

So, even if you have a majority in the Parliament supporting a mandatory system for internalisation of external costs, it is unrealistic to foresee that we will get that in the Council. And we must not forget that we are under extreme time pressure because the Commission has only have one year left and one year to go now before the European elections. 

So, more or less the only chance of getting anything adopted is in first reading. This means that we need to find a common basis between Parliament and Council very early on. And, against this background, I think we should not be too ambitious – although, in principle, of course we would support that. But I think it is more important now to get agreement on the principle of internalisation of external costs than on far-reaching details. 

If member states actually establish tolls to internalise the external costs related to truck transportation, do you foresee a raise in the share of transport via rail and could the rail industry actually cope with this?

Yes. Well of course, as in every business, you need investments if the situation is changing. There is no business in the economy that can be successful without investments. 

But we have seen over the last years, in quite a number of countries, a strong increase in rail freight already. At least, over the past three years, it has gone up more than 10%. So this shows that, even with short notice, the existing railway systems and infrastructure are able to absorb substantial rates of increase. 

In Eastern Europe especially, it’s no problem at all because the networks are anyway bigger than the traffic you have for the moment. And in Western Europe, I think that with improved traffic management, increasing the length of the trains and establishing more dedicated priority lines for freight, you can use the existing network in a much more efficient way. So I’m quite confident that, at least in the short-term perspective, the existing network can absorb more traffic and in the medium term, of course, investment plans for the infrastructure will need to be adjusted in favour of rail. 

And lastly, I just want to say that people are already reacting to prices substantially – you just need to look at what is happening in cities like London or Copenhagen, or in Switzerland, where two thirds of the freight transit traffic is on rail because the toll system is, I think, also reflecting the internalised external costs. We are confident that what we have seen in Switzerland or in other countries is also going to work in the European Union.