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28/09/2016

Direct subsidies can spur green transport innovation, regions told

Transport

Direct subsidies can spur green transport innovation, regions told

The biogas bus arrives in Bergen.

[Baltic Biogas Bus/Flickr]

Handing subsidies, including EU funding, directly to local governments – rather than to industry – can spur green innovation in public transport, regional leaders were told today (13 October).

EU and national public procurement rules could also be exploited so that tendering processes incentivised investment in newer technologies, they heard.

The transport sector is responsible for a quarter of EU carbon emissions, which contribute to global warming, and consumes more than 30% of the EU’s total energy intake.

“Through sound public procurement we can enable the introduction of new technologies, especially in public transportation,” Nelson Rojas said. But it was vital to give regions the subsidies which usually went directly to industry, he told EurActiv.

Rojas is the manager of the Baltic Biogas Bus project in Bergen, Norway. He was speaking at an event held at the Committee of the Regions.

Usually subsidies from EU and national sources are given to industries which apply for them. But giving the cash to regional leaders meant they could drive investment in newer technologies, which industry might discount because it is unproven, Rojas said.

Local government can then run a competitive tendering process, using the subsidy as a negotiating tool and part of the final contract.

The Baltic Biogas Bus Project secured funding for a year and employed an innovative approach to public procurement, which stayed legal but bypassed aspects that discouraged risk.

Bergen’s local government wanted to improve energy efficiency and lower emissions in its public transport.It wanted to back biogas, using new technology and at a price that was competitive in contrast with diesel.

But public procurement rules are very strict, Rojas told delegates at the event. They require detailed specifications, proven technologies, and fixed evaluation procedures.

They also don’t allow changes and were bound to awards, which is problematic with a more experimental technology.

“The contracts that produces don’t leave rooms to test new things,” Rojas said.

Bergen introduced a two-step procurement process, which still respected Norwegian and EU threshold values.

The first step was the selection of industry partners, which focused on the qualification and evaluation of competing bids.

The second step consisted of evaluating each tender, negotiating, awarding and delivery.

This method introduced more flexibility and dialogue, as well as ensuring targeted evaluation procedures.  It remained transparent and fair, Rojas said.

The winning bid from Belgian company Van Hool delivered a 24 metre biogas electric hybrid bus that gave a 20% fuel and CO2 reduction compared to the previous, traditional vehicles.

It emitted less harmful NOx than a compact gas car and gave off no nitrogen dioxide.

Christian Byrith, of the North Sea Region programme, said he had no idea that public procurement could be used so inventively.

“We always thought it was something we had to do to make the EU happy,” he joked.

The Baltic Biogas Bus project is supported by the EU, is part of the Baltic Sea Region programme and includes cities, counties and companies in the entire Baltic region.

Alternative approach

The use of alternative fuels like biodiesel, electricity, or liquefied natural gas, could increase the transport sector’s energy efficiency and reduce carbon emissions, the European Commission believes.

According to its plans for Energy Union, the Commission will take steps to encourage “a gradual transformation of the entire transport system”. 

It intends to promote the development of better infrastructures, such as refuelling and recharging stations, to help different modes of transport switch to using alternative fuels.

Legislation on “decarbonising the transport sector, including an action plan on alternative fuels” will be put forward by the Commission in 2017. 

Background

The use of alternative fuels like biodiesel, electricity, or liquefied natural gas, could increase the transport sector’s energy efficiency and reduce carbon emissions, the European Commission believes.

The transport sector is responsible for a quarter of EU carbon emissions and consumes more than 30% of the EU’s total energy intake.

World leaders will meet in Paris on 30 November to try and secure an agreement to cap global warming.

Further Reading

Baltic Biogas Bus Project