EU deal on green road tolls leaves few happy

truck.jpg

An EU compromise agreement on green road tolls for trucks was denounced by the freight sector as a mere additional tax that will increase the final price of goods. Meanwhile, the Greens criticised the deal for making too many concessions to business interests.

The European Union's 27 transport ministers adopted a compromise proposal by the Belgian EU Presidency on the Eurovignette Directive on Friday (15 October).

Friday's political agreement contains no obligation to earmark revenue generated by the new tolls for projects in the transport sector, but a mere recommendation to do so.

The Commission's original proposal was to earmark the revenue generated by the charge "for measures aimed at facilitating efficient pricing, reducing road transport pollution at source, mitigating its effects, improving the CO2 and energy performance of vehicles, and developing alternative infrastructure for transport users".

Following the Belgian proposal, there will be no specific levy on congestion, but it would be treated as part of existing infrastructure costs: member states would be allowed to charge significantly higher rates during rush hour but would accordingly have to charge lower rates in the middle of the night, when the roads are empty.

Ministers set the maximum rate of variation for congestion at 175% and the peak periods concerned will be limited to five hours per day.

Slight amendments to the Belgian proposal introduce a derogation exempting less polluting trucks that meet Euro V and VI emissions standards from the air pollution charge – Euro VI until 2018 and Euro V until 2014.

Member states could also decide on whether they wish to apply charges to vehicles between 3.5 and 12 tonnes in weight.

Positions

EU Transport Commissioner Siim Kallas welcomed the political agreement as an important step "to incentivise a shift in behaviour so companies invest in more efficient logistics, less polluting vehicles and more sustainable transport at large".

"It is part of a much broader drive to create a fair financial framework for transport where prices for the different transport modes reflect the real costs to society and the taxpayer," he added.

Green members of the European Parliament welcomed the introduction of environmental charging for the first time under EU legislation but expressed disappointment that "the agreement fails to take account of the true environmental impact of heavy goods vehicles".

UK MEP Keith Taylor (Greens/EFA) suggested that "the maximum cap on road charges remains too low" and that "no attempt has been made to factor in climate change or accident-related costs".

Alexander Sakkers from the International Road Transport Union (IRU) said that "it is unacceptable that EU transport ministers increase the fiscal burden on road freight transport without tabling any solution to reduce externalities as a compensation for removing the mandatory earmarking".

The IRU stressed that when revenues from charging are not earmarked for reinvestment into the mode they are drawn from, then its externalities cannot be efficiently reduced. Singling out one mode of transport will not green the entire EU transport system, either, it added. 

"Ministers have also failed to tackle the congestion problem at source, since they foresee charges for road freight transport only although it represents a mere 10% of all road users! The Council has completely ignored all the taxes, charges and duties already paid by the road freight industry, as well as the enormous additional burden that these new charges will impose on the economies of individual member states," Sakkers added.

The European Road Haulers Association (UETR) said it is unacceptable that member states have individual freedom to increase infrastructure charges during peak hours. "Businesses already bear the costs for congestion in terms of fuel consumption, time and road safety," it noted. 

The association also argued that higher tariff only for trucks during congestion hours will have a negligible effect on congestion as freight transport cannot avoid rush hours due to working hours and delivery times.

Business organisations remained sceptical after the political agreement found on 15 October by member states in the EU Transport Council. "The agreement contains elements which could be very damaging to European road transport businesses," say Eurochambres, EuroCommerce and the UEAPME Transport Forum.

"While congestion is no longer mentioned explicitly as an externality, the proposed variation of up to 175% will still hit their members hard. Not only are companies that rely on transport not directly responsible for congestion, which is caused by the lack of alternatives and insufficient road infrastructure, but they still have to bear the extra fuel and time costs caused by traffic jams," read the joint statement by the three organisations.

"Furthermore, the proposal does not offer a solution for the externalities of other modes and road users," they said. Business organisations regret that the issue is not part of a global policy to green the entire transport sector and reject the notion that the road transport sector should effectively foot the bill for all road users and even other modes.

The secretary-general of the European Association with tolled motorways, bridges and tunnels (ASECAP), Kallistratos Dionelis, regretted that earmarking is not considered so far. "Member states and the EU institutions must safeguard that external cost revenues are re-directed to the affected regions and are earmarked for measures to upgrade the networks of the same area (either road -existing or new - or possible other alternative infrastructures), thus allowing the affected society to take compensating measures for minimising the burden it bears," he said.

The European Construction Industry Federation (FIEC) welcomed the compromise, which it said would allow member states to levy an additional charge to cover the external costs of air and noise, but argued "without the mandatory earmarking of the revenues from these additional charges for the development of sustainable transport infrastructure, the Directive will miss its target!"

FIEC Vice-President Jacques Huillard stressed that "indeed, the internalisation of external costs should not be an end in itself, but aimed at supporting the development of efficient and sustainable infrastructure".

Nina Renshaw, deputy director of Transport & Environment (T&E), an NGO, welcomed the agreement as a step towards "finally" allowing governments to include charges for air and noise pollution into their road tolls, but stressed that the agreement does not go far enough to charge "the full costs of the damage that road freight transport causes".

She also regretted that ministers "took the bizarre decision to exempt current generation (EURO V) lorries from air pollution charges; that's rather like exempting smokers of low tar cigarettes from smoking bans". Renshaw hopes that the European Parliament will reject such derogation when it reviews the legislation at second reading.

The European rail sector also welcomed the political agreement reached today, but regretted that separate charges for congestion were removed and that ministers failed to agree on mandatory earmarking of revenues sustainable transport.

The rail industry also regrets that member states are allowed to decide whether they wish to apply charges to vehicles between 3.5 and 12 tonnes in weight.

Background

In July 2008, the European Commission proposed a revision of the Eurovignette Directive, which allows EU member states to charge trucks to offset pollution costs.

The proposal is part of the Commission's strategy for internalising the external costs of transport, a train of initiatives intended to make transport more environmentally friendly by extending the "user pays" principle to the "polluter pays" principle.

The current directive states that toll rates should not exceed the cost of maintaining and building the infrastructure, and prohibits the recovery of other "external costs" such as air pollution and noise.

The aim of the revision is to develop a transport pricing system to cover these "negative environmental impacts" of road freight.

While the proposal has been hailed by environmental NGOs, member states remain divided over the issue and industry stakeholders have joined forces to denounce the "incorrect" assumption that merely increasing costs will lead to more sustainable transport.

The last compromise proposal for the revised directive, tabled by the Czech EU Presidency in 2009, failed to convince member states. Many of them argue that a recession is not the right time to impose extra costs on the transport sector.

Timeline

  • 2010: Text of political agreement now being sent to Council's legal service for scrutiny.
  • Dec. 2010: Council expected to adopt first-reading position on draft directive.
  • 2011: Second reading in European Parliament.

Further Reading

Subscribe to our newsletters

Subscribe