Road Charging (Eurovignette)

By laying down common rules on how EU states may charge heavy goods vehicles for using the road network, the ‘Eurovignette’ directive aims to ensure road usage better reflects its true impact on society and the environment by introducing a “user pays” and a “polluter pays” principle. The aim is also to shift freight away from roads onto other less-polluting modes of transport such as rail and waterways.

Background

The EU first presented a directive enabling countries to introduce tolls on motorways in order to finance the cost of infrastructure deterioration caused by heavy road vehicles in 1993. It entered into force in 1999.

However, road charges and tolls on heavy commercial vehicles varied widely across EU member states, regarding both the amounts charged and the systems used to calculate the levy. 

The so-called 'Eurovignette directive' was tabled in July 2003 to make up partly for this regulatory mosaic by proposing a harmonised EU framework for charging heavy goods vehicles on European motorways. 

It also aimed to extend the previous directive's scope to more roads, more vehicles and more costs, with a view to meeting some of the objectives laid down in the 2001 Transport White Paper: "European Transport Policy for 2010: Time to decide" (see EURACTIV related LinksDossier), namely: 

  • to ensure national toll systems reflect the 'external costs' of transport, including environmental damage, congestion, and accidents
  • to finance alternative modes of transport (cross-financing) to operate a 'modal shift' of freight away from roads (rail, inland waterways)

Issues

The so-called 'Eurovignette' Directive was adopted in May 2006 after informal talks held in December 2005 between the European Parliament, the EU Council of Ministers and the European Commission succeded in securing a compromise package (EURACTIV, 16 Dec. 2005). 

Under the final deal, the Eurovignette allows EU member states to levy charges on heavy goods transportation vehicles of more than 3.5 tonnes. This represents a significantly lower threshold compared to the previous version of the directive (dated 1999), which only applied to vehicles of more than 12 tonnes. However, the new threshold will only apply as of 2012 and the compromise also allows room for derogations under strict conditions. 

The directive's main novelty was to introduce the possibility for individual states to integrate the 'external costs' of road transport into toll prices. After heated discussions, it was finally agreed that these 'external costs' can include congestion costs, environmental pollution, noise, landscape damage, social costs such as health and indirect accident costs which are not covered by insurance. To be integrated in the charges ('internalised'), the costs have to be proved "undeniable", EU legislators agreed. 

However, due to strong disagreements between member states and Parliament, the final text of the Eurovignette de facto excludes this very possibility until a "common methodology for the calculation and internalisation of external costs that can be applied to all modes of transport" is agreed. The Commission thus promised to come forward with a calculation method two years after the directive comes into force. This proposal will again need approval from the two EU legislative bodies (EURACTIV 07/07/08). 

The Eurovignette also gives member states extra flexibility on how to levy tolls or charges. In particular, these can now be raised on the entire road network, not just motorways: 

  • toll revenue should be used for the maintenance of the road infrastructure concerned or to cross-finance the transport sector as a whole
  • as of 2010, countries which already apply tolls or user charges will be obliged to vary their prices according to vehicle pollution standards (Euro standards series) in order to favour the cleanest ones
  • authorities may decide to exempt isolated areas or economically weak regions from applying tolls or user charges
  • an extra 15% 'mark-up' charge can be levied to finance new alternative transport infrastructure projects such as rail or inland waterways (the mark-up can be raised to 25% for cross-frontier projects in mountainous regions) 
  • urban areas are finally not included in these extra mark-up charges. However, local authorities can still be raise them under a provision taken from article 9 of the current Eurovignette directive (which for instance allowed the city of London to apply such charges) 
  • rebates will be possible for frequent users

Positions

The Eurovignette proposal has stirred controversy since the beginning, opposing member states at the periphery of main freight routes (Portugal, Estonia, Malta) and those who suffer most from the high transit and infrastructure costs, and the congestion and pollution that come with it (Austria, France, Germany). 

The Commission reacted positively to the vote, saying the adopted Eurovignette directive will allow "fairer pricing of transport infrastructure". The possibility for member states to introduce pricing variations, said transport Commissioner Jacques Barrot, "is a first step towards taking better account of external costs [of road transport]". 

The International Road Transport Union (IRU) lashed out at the agreement, saying Eurovignette will effectively bleed road hauliers dry. The IRU's central criticism is that the money raised is not fully reserved for the road sector. "Every year, road users pay €330 bn to governments through taxes, yet public spending on roads amounts to only €100 bn," the IRU points out. The other criticism is that member sates cannot compensate road haulers for the extra financial burden with reductions on other levies such as vehicle tax or fuel duties. "Unprecedented high fuel prices have stretched the sector's resources to the limit," the IRU claims. 

The International Tourism Alliance (AIT) and the International Automobile Federation (FIA) also say that "motoring already pays for itself". Their argument is that existing taxes, including fuel taxes and vehicle taxes, easily cover the external costs of road usage. 

The Community of European Railways (CER) was not satisfied with the agreement, saying the Parliament "has chosen a quick compromise rather than a good one". CER says the decision is in contradiction with the 'user pays' principle as "it will not be possible for tolls to reflect all costs, in particular external costs such as congestion, air pollution and accidents". CER's Executive Director Johannes Ludewig points to a recent study by McKinsey which predicts that rail freight volumes in Western Europe will fall by 30 to 40% in the medium term under existing policies. "The prospects for a development of rail freight across Europe are alarming," said Ludewig. 

Gilles Savary MEP (PES, France), the vice-president of Parliament's transport committee, welcomed the agreement on cost internalisation as "a significant parliamentary conquest against resistance from the powerful road lobby and countries at the [EU's] periphery". The compromise, he added, also represents "welcome legal certainty" for freight businesses

However, Savary regretted that the bill's implementation is left to "the good will of member states governments". The French socialist MEP called for further measures to provide the EU with its own budgetary means to finance transport policies, suggesting that part of the truck levies be allocated to trans-European networks. 

The Green Group said the Parliament has "missed a big chance" to make Europe's transport policy "really sustainable". "The price for health damage, environmental damages or accidents will still have to be carried out by the public and this also means the further unacceptable promotion of the ever growing truck avalanche," said Eva Lichtenberger (Austria) und Michael Cramer (Germany). 

T&E, the European Federation for Transport and the Environment, said the deal only delays action to include the health and environmental costs in freight pricing. T&E's Markus Liechti points to OECD and other studies to assert: "EU citizens will continue to pick up a €170 billion bill every year that we wait for a new Commission proposal and yet another agreement." 

For the EU Committee of the International Association of Public Transport (UITP), it is essential to include private cars and urban areas in infrastructure charging policy to alleviate congestion and reduce environmental degradation. It cites the London congestion charging scheme as a particularly good example by saying that a £5 congestion charge is reported to have resulted in a reduction of 38 percent in private cars in central London. 

Timeline

  • 17 May 2006: Council adopted Directive 2006/38/EC - the so-called 'Eurovignette Directive' - amending Directive 1999/62/EC on the charging of heavy goods vehicles for the use of certain infrastructure.
  • 10 June 2006: Entry into force of the Eurovignette Directive.
  • 10 June 2008: Deadline for member states to transpose it into their national legislation.
  • 8 July 2008: Commission unveiled proposals to revise the Eurovignette Directive, which offer a common calculation method to internalise the external costs of road freight.
  • 9 Dec. 2008: EU transport ministers failed to agree on the revision.
  • 11 Feb. 2009: European Parliament's transport committee to adopt a report on the European Commission's proposal.
  • 10 March 2009: First reading plenary vote scheduled.

Further Reading