EU body gives thumbs up to ‘green’ road charging

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The overall benefit of charging trucks for the pollution they cause outweighs the limited negative price impact on consumers, shows a new report from the European Commission's in-house Joint Research Centre (JRC).

The study was requested by EU ministers, who are currently seeking ways to break the deadlock over the Commission's proposal to recast the EU Eurovignette Directive.

Peripheral countries like Portugal, Malta, the Baltic countries and Ireland oppose the plans, as they fear that additional road charging would impose higher costs on their trade, while the EU's central transit countries would get most of the financial benefit. 

Member states like Italy, the Netherlands, Finland and Bulgaria are willing to accept congestion charges, provided that they are applied to passenger cars as well. 

Impact on final product prices 'negligeable' 

The aim of the JRC analysis was to calculate the cost for international transport operations of the proposed Eurovignette Directive.

The EU executive's in-house research facility concluded that while the range of external cost charges for each corridor depends on the length of the corridor and the specific characteristics of the zones it crosses, the impact of the planned green charges on final product prices is "negligeable".

The report argues that 20% to 30% of the total external cost charges can be absorbed by operators themselves "in the form of improved efficiency and/or technology". Even if the total cost were passed on to the user of the transport services, "they would still have a very limited repercussion on final prices," the report continues.

Meanwhile, the JRC's calculations show that the introduction of Eurovignette would reduce CO2 emissions from road freight transport and fuel consumption by 8%, and that "if an average increase in transport costs of 3% is assumed, a decrease of 13.5 billion tonne kms in road transport volumes would be expected".

JRC estimates suggest that the internalisation of road freight transport costs at EU level on Europe's main roads would result in a total net welfare gain of €1.8 billion per year. Extending congestion charging to passenger cars would increase the net welfare gain to a yearly €2.3 billion. 

Agriculture hardest hit

Areas producing or consuming agricultural products or raw materials that are transported in bulk are expected to bear the brunt of Eurovignette's impact on their operational costs. As fresh products need delivering quickly, their producers are less likely to change their shipment strategy and opt for other transport modes than producers of non-perishable goods of low value or high volume, the report notes.  

'Eurovignette' for all transport modes

The authors conclude that "the overall benefits of charging for external costs outweigh the limited negative price impacts on individual transport operators" and argue that external cost charges can change transport system users' behaviour without increasing transport and product costs significantly.

Therefore, the principle of internalising external costs could be applied to other transport modes to provide "a level-playing field" and produce sustainable solutions for the whole transport system, stresses the EU research facility. 

Connie Hedegaard, the EU's incoming climate policy chief, pledged to tackle transport emissions during a confirmation hearing in the European Parliament on 15 January, saying she would table an integrated legislative package on climate and transport during her mandate (EURACTIV 18/01/10).

Positions

The EU rail sector welcomed the study, as it shows that internalising the external costs of road transport would not harm the EU economy or the purchasing power of Europeans. 

"We have long been calling for this policy to be put in place, so that rail – which is accountable for its external costs – is able to compete fairly with other transport modes," said Michael Robson, secretary-general of the European Rail Infrastructure Managers  (EIM).

Johannes Ludewig, executive director of the Community of European Railway and Infrastructure Companies  (CER) argued that allowing member states to charge for the external costs of lorries would "provide a revenue stream to help fund infrastructure improvements that can create a more sustainable transport system". 

The International Road Transport Union  (IRU), which represents trucks, buses and taxis, stresses that the sector has already done a lot to tackle externalities, paying for them through petrol and road taxes or the current Eurovignette, for example. 

"All our costs are already internalised," argues the IRU's Michael Nielsen. "If congestion is not taken into account - and you hardly ever see trucks on congested roads, but rather private cars of individuals getting their goods in and out of cities - 99% of our external costs are covered," he added. 

Background

In July 2008, the European Commission proposed a revision of the current Eurovignette Directive on tolls for trucks to allow national governments to offset pollution costs (EURACTIV 07/07/08). 

The Commission's strategy for the internalisation of transport external costs is part of a package of initiatives intended to make transport more sustainable. The aim of the initiative is to develop a transport pricing system to cover the negative environmental impacts of road freight, such as noise and pollution.

While the proposal has been hailed by environmental NGOs, member states remain divided over the issue (EURACTIV 10/12/08), and industry stakeholders have joined forces to denounce the "incorrect" assumption that merely increasing costs will lead to more sustainable transport (EURACTIV 07/01/09).

A compromise on proposed environmental charges for trucks tabled by the Czech EU Presidency a year ago failed to convince the Union's member states, many of which also argue that a recession is not the right time to impose extra costs on the transport sector (EURACTIV 01/04/09).

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