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EU to start taxing road freight to contain pollution

EU member states have been given final approval to start applying the 'polluter-pays' principle when setting road tolls for heavy goods vehicles. But the freight sector is complaining of an additional burden as countries are not obliged to reinvest the tax revenues in greening road transport.

Last week the European Parliament endorsed a compromise deal on the revision of Eurovignette Directive, finalised at the end of May after trialogue discussions between the Parliament, the Council and the European Commission, reports EurActiv.

The final vote, which marks the end of three years of heated debate, will allow member states to charge all vehicles above 3.5 tonnes not only for infrastructure costs but also for noise and pollution. Member states are free to exempt vehicles below 12 tonnes if they wish, but must notify their reasons for doing so to the Commission.

The revised Eurovignette Directive is the first EU law to implement the bloc's wider strategy of internalising the external costs of transport.

The Parliament's rapporteur on the dossier, Belgian Socialist MEP Sa�d El Khadraoui, described the achievement as an important milestone that "can dictate the direction of our transport policy for the future".

But he also noted that the final deal, approved with 505 votes in favour, 141 against and 17 abstentions, is "a compromise" both between and within the institutions. In particular, the compromise was supported "by the smallest possible minority in Council."

Indeed, the European Parliament's first reading on the proposal took place in March 2009, but the bill was later blocked by member states in the Council for some 18 months. EU transport ministers finally rubber stamped, by a small margin, a compromise agreement in October 2010.

Peripheral countries like Spain, Portugal, Greece and the Baltic states criticised the review, expressing concerns over the competitiveness of their businesses. Major freight transit countries like France, Germany, Austria, Belgium, the Netherlands and Luxembourg have expressed strong support for the new green tolls.

Furthermore, as the Eurovignette concerns only electronic tolls, member states that do not have such systems in place will not be able to apply green road charges.

Today, 11 member states apply distance-based charging based on an electronic tolling system. Two others, Hungary and Poland, are planning to install similar schemes.

Congestion

One of the most controversial issues of the revision dossier has been whether to charge trucks for the congestion they cause, as most agreed that heavy goods vehicles are not the only source of congestion on European roads.

The Commission originally proposed to treat congestion as part of external costs, but it is now treated as part of existing infrastructure costs.

According to the revised directive, countries will have the right to vary toll tariffs during peak and off-peak hours "to ease congestion".

In congested areas higher tariffs of up to 175% above the average will be allowed - with the top tariffs collected during a maximum of five peak hours per day and lower tariffs applying for the rest of the time on the same road section.

Applying higher tolls has "the clear aim of discouraging or getting heavy lorries off the road, like the ring road around Brussels at peak times, allowing traffic to flow," said Helen Kearns, spokeswoman for EU Transport Commissioner Siim Kallas.

To enable hauliers to calculate their costs and plan routes, the Commission will make available a list of charges and the times when they apply throughout the EU.

No mandatory earmarking of revenues

The Commission's original proposal was to earmark the revenue generated by the new tolls "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".

But EU countries have insisted on getting the final say over how to spend the extra funds.

In its April vote on the dossier the European Parliament's transport committee insisted on the mandatory earmarking of revenue for reinvestment in transport infrastructure, but accepted the member states' stance in the final compromise trialogue talks on 23 May.

In the end, with the revised directive member states are merely encouraged to set aside 15% of the new charging revenues for investment in sustainable transport infrastructure (TEN-T) projects.

While Kearns insisted that there are "strong provisions on earmarking - strong incentives in place for member states to set aside tolling revenues," she added that the 15% figure "is not an obligation, it is an incentive with a monitoring system".

Indeed, on the Parliament's demand, member states will have to report back to the Commission on a regular basis on the various types of toll income, any variations applied and how they have invested the money.

All roads concerned

The current Eurovignette Directive, adopted in 2006, only covers roads in the trans-European transport network (TEN-T), which covers some 15,000 kilometres of tolled roads, but the revised law extends the chance to toll trucks to all motorways in Europe.

The charge will have to be collected by electronic systems that are expected to be fully interoperable at EU level by 2012. A receipt clearly stating the amount of the external cost charge will be given to hauliers so that they can pass on the cost to their clients, the Commission noted.

According to the EU executive, the external cost charges will represent 3-4 euro cents per kilometre depending on the Euro class of the vehicle, the location of the roads and the level of congestion.
Positions:

EU Transport Commissioner Siim Kallas said that: "The new EU rules will send the right price signals to operators so they will invest more in efficient logistics, less polluting vehicles and more sustainable transport at large.

"They also give member states new tools to fight congestion with possibilities to vary charges at different times of the day to get heavy lorries off the roads at peak periods. This is a very important step in the right direction - towards creating a fair financial environment where prices across different transport modes reflect the real costs to society and the taxpayer."

He also noted that: "In a time of scarce public funding, the charging for external costs provided by the new directive will generate revenues and make new financial resources available for transport infrastructure."

The European Parliament's rapporteur on the dossier, Belgian Socialist MEP Sa�d El Khadraoui, said that allowing member states to apply the polluter-pays principle to road transport is "a step in the right direction," but the European Commission still has a lot of work to do.

"We expect new proposals that make these new measures binding by including the cost of all damage to the environment and extending the principle of polluter pays principle to all modes of transport," he added.

Green members of the European Parliament voted for the revision "reluctantly" and called the legislative review "a missed opportunity for failing to truly include environmental and climate change costs in road charging for trucks".

Greens transport spokesperson MEP Michael Cramer (Germany) regretted that while the costs of noise and air pollution would be included in the Eurovignette charging, "other crucial 'external costs' of road transport" such the costs of road accidents, the costs of landscape and biodiversity damage, climate change and oil dependence costs had been left out.

Belgian MEP Dirk Sterckx (Alliance of Liberals and Democrats for Europe) said his group "would have liked more commitment from member states but the principle of earmarking has been agreed".

"These charges indeed should not be a new tax but revenues to invest for reducing the external negative effects in the long term and to further develop a sustainable transport sector. 15% earmarking is less than we would have liked but nonetheless a first small step that could lead to further revisions of the directive and extension to other transport modes," he added.

The Confederal Group of the European United Left-Nordic Green Left (GUE/NGL) regrets "the lack of ambition" in the new system that takes only partial account of pollution and congestion costs and is completely voluntary.

The International Road Transport Union (IRU) said that the final outcome de facto failed to 'green' road transport by not making mandatory the earmarking of Eurovignette revenues. Therefore it urged governments - if implementing the directive - to earmark such revenues at national level to effectively meet the objectives of the EU Transport Policy White Paper.

For the IRU, the non-mandatory earmarking of revenues means that the revised directive merely creates a new tax on already heavily taxed road transport services. Instead of greening road transport, the directive will allows member states to further penalise the EU economy and employment by applying yet another new tax on road transport on top of existing tolls, fiscal charges and excessive excise duties.

The president of the IRU's EU goods transport liaison committee, Alexander Sakkers, argued that the new tax "will actually impede operators from investing in and implementing the best technologies and techniques crucial to further green road transport and meet the CO2 reduction target".

IRU general delegate Michael Nielsen added that IRU members would "check and ensure - as indicated by the European Commission - that all other transport modes also fully pay for their infrastructure use and externalities in order to create a level playing field for all modes".

Francesco Del Boca, president of the European Road Haulers Association (UETR), said that "we are facing the introduction of a new additional tax on companies to make cash, beyond the declared environmental reasons. The directive gives no guarantee that external costs caused by freight transport by road will be reduced: member states can do as they wish with revenues".

UETR also noted that that "it is discriminatory the fact that only road transport companies are included in the directive's scope, with the exclusion of other road users. This means that EU legislation as of today esteems goods moved by inland waterways, trains or ships do not emit any harmful emissions nor make any noise at all".

The Community of European Railway and Infrastructure Companies (CER) welcomed in particular "the acceptance of the principle of earmarking, with the recommendation in the directive that revenues should be used to benefit the transport sector, and those generated from external cost charges in particular invested in projects to make transport more sustainable. However, it regrets that while this advice is clear, any final decision on the spending revenues ultimately lies with member states still".

CER Executive Director Johannes Ludewig added that his group was already looking forward to "the next revision of the directive allowing for the charging of other external costs caused by lorries, including climate change, congestion and accidents, as well as for the full amount of noise and air pollution costs. This way, the road freight sector will start to pay its full costs".

French European People's Party MEP Dominique Riquet welcomed the measures, saying "[t]he definitive adoption of the new 'Eurovignette' system will allow us to introduce the polluter-pays principle at the European level in the area of road transport".

"It would be incoherent to introduce such measures for rail transport if we do not do it for road transport," he added.

Next steps:

September 2011 (tbc): After the text has been formally adopted by the Council it will be published in the Official Journal.

After publication in the Official Journal member states will have two years to transpose the new rules into national law. But the new rules may be applied from the day after their publication in the Journal, when the directive enters into force.

www.euractiv.com

16th June 2011




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