Greening the Economy

This Workshop ate EBS 2008 will deal with the challenges to the transport sector in the EU, which ranges from urban transport to road transport and includes the rail sector, aviation and maritime transport. The transport sector is responsible for 31% of Community energy consumption and 26% of EU CO2 emissions.

A. Transport in the EU at a glance

  • The transport sector is essential for Europe’s prosperity and competitiveness, generating an annual turnover of around €363 billion (or 4.5% of EU GDP) and employing more than 8.2 million people. If one takes into account related services, including the manufacture of cars, planes, trains and ships, as well as infrastructure construction, trade and tourism, the jobs and wealth stemming from transport are even greater.
  • Road transport currently accounts for around 44% of all goods transported in the EU and 84% of passenger transport. It is also responsible for 84% of transport CO2 emissions. Inland waterway and maritime transport carry roughly one third of all goods but less than 1% of passengers, while rail accounts for around 10% of goods and 6% of passenger transport. Air transport – currently the fastest growing sector, with growth rates of more than 5% per year – accounts for 8% of passenger transport and around 14% of overall transport CO2 emissions.

B. Sustainable Transport on the European political agenda

To reduce the environmental damage caused by the prevailing trend to use road and air transport and to address its increasing congestion problems, the EU wants to promote alternative modes of transport. The 2001 Transport White Paper set 2010 as the deadline by which it aimed to restore the balance between road and other modes of transport to the level of 1998, but in the face of the continued rise in transport demand, the Commission is looking at other tools to promote a more sustainable transport policy.
The following measures have been proposed:

  • Promoting alternative transport modes and “co-modality”, ie the integration of different transport modes into efficient logistics chains in order to optimise the use of all modes. An important task is enhancing technical harmonisation and interoperability across systems. This is the aim of a 2007 package on Freight Transport Logistics, which focuses on reinforcing the position of Europe’s declining rail sector, by establishing “freight-oriented corridors”, with reduced transport times and an increased punctuality, thus more apt to compete with road transport, especially for heavy loads and long distances. The Commission is also looking to boost maritime transport, by building on the success of short-sea-shipping within the EU and establishing veritable “motorways of the sea”. A 2006 known as “NAIADES” also aims to make inland navigation more attractive.
  • Developing infrastructure charging to improve the management of freight transport and reduce transport’s environmental impact while generating funds for investing in new infrastructure. In 2005, a new Eurovignette Directive was adopted, giving member states the right to introduce charges on all roads, rather than only on motorways, and, as of 2012, applicable to all lorries over 3.5 tonnes. However, the directive excludes the possibility of integrating any environmental and health costs into toll prices until a “common methodology for the calculation and internalisation of external costs that can be applied to all modes of transport” is agreed upon. The Commission is due to present such a model by June 2008.
  • Promoting the use of cleaner vehicles and fuels: Cars represent 10% of all EU CO2 emissions. The Commission’s strategy for reducing CO2 emissions was previously mainly based on voluntary commitments from the car industry, but due to the relatively slow progress towards the established target of limiting CO2 emissions from passenger cars to 120g/km by 2010, the Commission is now suggesting binding targets.
  • Limits on emissions of particulate matter, nitrogen oxides (NOX) and hydrocarbons from petrol and diesel cars as well as from trucks and busses have also been addressed through the introduction of ever tighter compulsory limits, known as the “Euro” standards.
  • To reduce the automotive sector’s dependency on oil, the Commission has set itself the target of increasing the share of alternative fuels in transport from 2% to 20% by 2020. A particular focus has been placed on promoting biofuels and increasing their share in transport to 10% by 2020, although questions continue to be raised concerning the environmental sustainability of existing agro-fuels.
  • Rethinking air transport: Air traffic exploded in the last 15 years, leading to a 73% increase in greenhouse gas emissions from international aviation between 1990 and 2003. The institutions are currently working on plans to include aviation in the EU’s carbon emissions trading scheme. Efforts to create a ‘Single European Sky‘, to replace the current fragmented system, are also underway. The project, launched in 1999, should allow for improved air traffic management, thereby reducing the number of traffic jams and unnecessary kilometres flown, and allowing for a reduction of fuel consumption and CO2 emissions, while increasing safety.
  • Promoting the use of public transport: About 80% of European citizens live in urban areas and 75% of all journeys undertaken in metropolitan areas are done by car, making mobility an everyday problem as congestion, accidents and pollution increases. In September 2007, the Commission presented a Green Paper on Urban Transport, to determine what role the EU can play in improving urban mobility. The document notably admonishes encouraging towns and cities to implement urban charging schemes and establishing harmonised rules for setting up urban green zones. It also revives a proposal on ‘green public procurement‘ of road vehicles, which requires local authorites to include life-cycle energy consumption, CO2 and other pollutant emissions into the award criteria, in addition to the vehicle’s price, when acquiring public transport fleets and other public-utility vehicles.
  • Transport research: To complement the above measures, research into cleaner and safer transport has been given priority at EU level. The 7th Framework Programme, launched in 2007, allocates €4.1 billion of the €50.5 billion research budget specifically to transport research activities, such as research on ‘greening’ transport and on decongesting transport corridors. A further €2.26 billion will be allocated to energy research, including research on hydrogen fuel cells and renewable fuel production, such as biofuels.

C. Issues and challenges

  • Reducing the sector’s oil dependency; Making sustainable alternative fuels available to car owners with the same kind of ease-of-use, safety and reliability as petrol or diesel, at reasonable prices;
  • Combining mobility for citizens and economic operators with reductions in transport growth or a shift towards greener modes of transport (rail, maritime, public transport);
  • Achieving ambitious environmental and safety standards without undermining the sector’s competitiveness.

D. Possible questions for the thematic session

Dealing with the “capacity crunch“: Given the expected traffic evolution, Europe will face an ever growing gap between transport capacity and demand, especially as regards road and air. How can Europe deal with this limitation without harming its competitiveness? Should the focus be on limiting transport growth, on optimising existing infrastructure or on building further capacity?

Can infrastructure charging provide solutions in terms of limiting transport demand? What of the impact on the competitiveness of freight operators? If such a scheme is imposed, which vehicles would be covered? Which costs should be considered as transport-related externalities? Just CO2 emissions, or also factors like the hospital costs of people involved in traffic accidents? What to do with the money raised from internalising these costs: subsidisation of new infrastructure for the taxed transport mode or cross-subsidisation of cleaner transport alternatives?

How can we maintain Europe’s competitiveness in important sectors such as car manufacturing or aviation while enhancing environmental performance? Are Europe’s environmental targets too stringent?

Alternative fuels: Are first generation biofuels capable of delivering CO2 reductions in a sustainable manner? Can second generation biofuels become commercially viable? What future for other alternatives, including hydrogen or electricity powered vehicles?

How can we act on consumer behaviour?

Urban mobility and subsidiarity: Should the EU intervene or should local authorities maintain their freedom?

Financing: Are EU funds being directed by member states into the right projects (eg. large investments in roads and motorways in new member states)? Should the EU set financial targets for investment in alternative transport?

International issues: Is the EU taking excessive risks by going it alone (for example on airline emissions, and in the future on shipping emissions)?

E. Further readings

Commission Communication: “Keep Europe moving – Sustainable mobility for our continent” [FR] [DE]

Commission: DG Environment website on “Transport and Environment: Some key topics

World Energy Council: Transport Technologies and Policy Scenarios to 2050

Commission Green Paper: Towards a new culture for urban mobility

Commission Handbook on estimation of external cost in the transport sector

Commission: Questions & Answers on Aviation & Climate Change

Commission: Questions and answers on the proposed regulation to reduce CO2 emissions from cars

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