EUROPEAN COMMISSION Brussels, 9.12.2020 SWD(2020) 331 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL

COMMITTEE AND THE COMMITTEE OF THE REGIONS Sustainable and Smart Mobility Strategy – putting European transport on track for the future {COM(2020) 789 final}



Contents 1 Introduction 2 European mobility and transport – where are we heading? 2.1 Identifying the greenhouse gas emissions gap for transport 2.2 Developments under current policies 2.3 Overall economic, social and technological trends 2.3.1 Economic context 2.3.2 Demographic trends 2.3.3 New technologies, changing consumer behaviour and working conditions 2.4 Impact of the COVID-19 pandemic on the transport sector 2.4.1 Air transport 2.4.2 Waterborne transport 2.4.3 Road transport 2.4.4 Rail transport 2.4.5 Urban transport 3 Key policy developments over the last decade 3.1 Sustainability 3.2 Digitalisation

3.3 Single Market 3.4 Safety & security 3.5 Social issues 3.6 Enforcement of the EU transport acquis 4 Challenges to sustainable, smart and resilient mobility 4.1 The sustainability challenge 4.1.1 Zero- and low-emission vehicles and renewable and low carbon transport fuels 4.1.1.1 Fuel supply 4.1.1.2 Fuel infrastructure 4.1.1.3 Other incentives 4.1.1.4 Pollutant standards, batteries and roadworthiness 4.1.2 Clean ports and airports 4.1.2.1 Ports 4.1.2.2 Airports 4.1.3 Sustainable urban mobility 4.1.3.1 Urban vehicle access regulations 4.1.3.2 Walking, cycling and micromobility 4.1.3.3 Public transport, shared mobility and transport on demand 4.1.3.4 Urban logistics 4.1.4 Multimodality and modal shift

4.1.4.1 Improving multimodal freight operations 4.1.4.2 Rail freight 4.1.4.3 Inland waterways 4.1.4.4 Short sea shipping 4.1.5 Better incentives to users 4.1.5.1 Pricing and internalisation of external costs 4.1.5.2 Better information to users 4.2 The challenge of digitalisation and modernisation 4.2.1 Smart multimodal transport – challenges for seamless experience 4.2.1.1 Cross-border multimodal challenges 4.2.1.2 Multimodal & collaborative economy challenges in urban context 4.2.2 Intelligent Transport Systems and connected, automated mobility 4.2.2.1 ITS challenges in road transport 4.2.2.2 ITS challenges in other modes of transport 4.2.3 Innovation and mobility of the future 4.2.4 Digital enablers 4.2.4.1 Data for smart transport and mobility 4.2.4.2 Artificial Intelligence, 5G and other key enabling technologies 4.3 The challenge of making the transport sector more resilient 4.3.1 Crisis resilience and management

4.3.1.1 Governance 4.3.2 Infrastructure and investment 4.3.2.1 Capacity across modes 4.3.2.2 Future-proof infrastructure 4.3.2.3 Access to funding 4.3.3 Single Market 4.3.3.1 Single Market for road transport 4.3.3.2 Single European Railway Area 4.3.3.3 Aviation Single Market 4.3.3.4 Waterborne Single Market 4.3.4 Social aspects 4.3.4.1 Workers’ rights and transition to automation and sustainability 4.3.4.2 Skills and attractiveness of transport jobs 4.3.4.3 Access to transport: affordability, availability and accessibility 4.3.4.4 Protection of European passengers and consumers 4.3.5 Safety and security 4.3.5.1 Ever evolving challenges 4.3.5.2 Safe and secure infrastructure 4.3.5.3 Vehicle safety 4.3.5.4 The human factor

4.3.5.5 Ensuring a high and equal level of safety and security across modes 4.4 External dimension 4.4.1 EU leadership 4.4.2 EU global competitiveness 4.4.3 External connectivity 5 Description of the pathways/scenarios 5.1 Scenario design 5.2 Analysis of impacts of the pathways/scenarios 5.2.1 Impacts on transport activity 5.2.2 Technology development projections by transport mode 5.2.2.1 Road transport 5.2.2.2 Rail 5.2.2.3 Aviation 5.2.2.4 Inland waterways and national maritime 5.2.2.5 International maritime transport 5.2.3 Energy demand and fuel mix projections 5.2.4 GHG emissions from transport 5.2.5 Impacts on noise, NOx and particulate matter emissions 5.2.6 Impacts on external costs of transport 5.2.7 Investments

5.2.8 Social impacts 5.2.9 Sensitivity analysis on the COVID-19 pandemic 6 Annex I - Analytical methods 6.1.1 Description of the modelling tools used 6.1.1.1 Main modelling suite 6.1.2 Assumptions on technology, economics and energy prices 6.1.2.1 Economic assumptions 6.1.2.2 Energy prices assumptions 6.1.2.3 Technology assumptions 6.1.3 Policies in the existing policies scenario (Baseline scenario) 6.1.4 Policy scenarios List of figures Figure 1: The EU’s pathway to sustained economic prosperity and climate neutrality, 1990-2050 Figure 2: Passenger and freight transport activity in the Baseline scenario (average growth rate per year) Figure 3: Projected evolution of international maritime transport activity in the Baseline scenario Figure 4: Projected evolution of energy consumption per transport mode in 2030 and 2050 relative to 2015 (% change) in the Baseline scenario

Figure 5: Share of alternative fuels used in transport (including international aviation and maritime) in the Baseline scenario Figure 6: Fuels use in transport (including international aviation and maritime) in the Baseline scenario Figure 7: CO2 emissions from transport (including international aviation but excluding international maritime) in the Baseline scenario Figure 8: Passenger transport activity in the Baseline and the COVID-Baseline scenarios (cumulative growth rates for 2015-2030 and 2015-2050) Figure 9: Freight transport activity in the Baseline and COVID-Baseline scenarios (cumulative growth rates for 2015-2030 and 2015-2050) Figure 10: CO2 emissions from transport (including international aviation but excluding international maritime) in the Baseline and COVID-Baseline scenarios Figure 11: Workforce working at home several times per month in 2015 Figure 12: Market share of all but the principal railway undertakings in 2016 Figure 13: The use of EU Pilot concerning mobility and transport infringements between 2015-August 2020 Figure 14: Evolution of transport activity in tonne- and passenger-kilometres in the EU Figure 15: Share by mode in total transport GHG emissions, including international bunkers, in the EU-27 in 2018 Figure 16: Evolution of GHG emissions by transport mode in the EU-27 (1990 = 1) Figure 17: Evolution of final energy consumption by sector in the EU (million tonnes of oil equivalent) Figure 18: Transport sector consumption of petroleum products & biofuels, 2000-18 Figure 19: Number of BEV and PHEV passenger cars in 2020 Figure 20: Number of inland vessels per year of construction in the Belgian and German fleet Figure 21: Number of inland vessels per year of construction in the Danube countries Figure 22: Situation of the publicly accessible recharging points in 2018 across EU Figure 23 Cruise ships docking in Barcelona emit 5 times more sulphur than the city’s 560,000 cars every year Figure 24 CO2 emissions per flight phases

Figure 25 ATM inefficiencies Figure 26: Annual mean NO2 concentrations observed at traffic stations, 2017 Figure 27: Percentile 90.4 of daily mean PM10 concentrations observed at traffic stations, 2017 Figure 28: Annual mean PM2.5 concentrations observed at traffic stations, 2017 Figure 29: Main mode of transport on a typical day Figure 30: Percentage of road fatalities on urban roads in the EU by transport mode, 2018 Figure 31: Passenger land transport modal split by country (%, 2018) and change in percentage points for rail (2015-2018) Figure 32: Air routes between metropolitan regions where rail travel times are below 2.5 hours by train Figure 33: Air routes between metropolitan regions where rail travel times are below 4 hours by train Figure 34 Cost level and composition of intermodal transport compared to road-only transport Figure 35 Intermodal terminals with rail access occurrence in Europe Figure 36 Minimum rates of taxation laid down in the ETD (1 Jan 2010) Figure 37 Purchase taxes in the EU in 2016 Figure 38: Perceived quality of transport infrastructure in the EU countries Figure 39: Average peak-hour delay per representative driver (hours per year) in 2018 Figure 40: Share of different items in household consumption expenditure in the EU Figure 41: Conditions to switch to more environmentally friendly modes of transport Figure 42: Road fatalities in the EU and current target Figure 43: Trend in road deaths per million inhabitants 2010-2019 Figure 44: Overview of the policy scenarios

Figure 45: Passenger transport activity in the Baseline and the policy scenarios (cumulative growth rates for 2015-2030 and 2015-2050) Figure 46: Freight transport activity in the Baseline and the policy scenarios (cumulative growth rates for 2015-2030 and 2015-2050) Figure 47: Shares in the total cars stock by type of drivetrain technology in 2030 and 2050 Figure 48: Shares in the total vans stock by type of drivetrain technology in 2030 and 2050 Figure 49: Shares in the total heavy goods vehicle stock by type of drivetrain technology in 2030 and 2050 Figure 50: Shares in the buses vehicle stock by type of drivetrain technology in 2030 and 2050 Figure 51: Aviation fuels mix in the Baseline and policy scenarios in 2030 and 2050 Figure 52: Inland waterways and national maritime fuels mix in the Baseline and policy scenarios in 2030 and 2050 Figure 53: International maritime fuels mix in the Baseline and policy scenarios in 2030 and 2050 Figure 54: Change in total energy use in transport and in the final energy consumption in 2030 and 2050 compared to 2015 Figure 55: Share of alternative fuels in transport (including international aviation and maritime) in 2030 Figure 56: Share of renewable energy in transport in 2030 Figure 57: Transport fuel mix (including international aviation and maritime) Figure 58: Tank to wheel CO2 emissions from transport (excluding international maritime) in 2030 in the Baseline and policy scenarios Figure 59: Well to wheel CO2 emissions from transport (excluding international maritime) in 2030 and 2050 in the Baseline and policy scenarios Figure 60: Change in NOx emissions and PM2.5 emissions in 2030 and 2050 compared to 2015 Figure 61: Change in external costs of air pollution in 2030 and 2050 compared to 2015 Figure 62: Change in external costs of congestion and accidents in 2030 and 2050 compared to 2015 Figure 63: Average annual investments in vehicles, rolling stock, vessels, airplanes and alternative fuels infrastructure deployment in the Baseline and policy scenarios Figure 64: Additional annual average investments for 2021-2030 under existing policies and to achieve higher GHG emissions reductions - in billions euros (2015)

Figure 65: Households’ annual transport related expenditures in the Baseline and policy scenarios - in billions euros (2015) Figure 66: Impacts of at least 55% GHG emissions reduction on transport sector employment (% change relative to the Baseline scenario) Figure 67: Comparison of key indicators in the MIX scenario and COVID-MIX variant Figure 68: Interlinkages between models Figure 69: Schematic representation of the PRIMES model Figure 70: Schematic representation of the GEM-E3 model Figure 71: Projected EU GDP (2015 = 100) Figure 72: International fuel prices assumptions – non-COVID scenarios Figure 73: Oil price projections in 2030 according to various sources Figure 74: International fuel prices assumptions – COVID scenarios Figure 75: Scenario assumptions description (scenarios developed with the PRIMES-GAINS-GLOBIOM modelling suite) Figure 83: Key modelling variables reflecting underlying policy assumptions



1Introduction 1.This Staff Working Document accompanies the Communication from the Commission on the Sustainable and Smart Mobility Strategy, which sets out the actions needed to ensure that every transport mode plays a role in delivering the European Green Deal, that smart mobility enables seamless, safe and efficient connectivity, and that a more resilient Single European Transport Area provides connectivity for all EU citizens. 2.Sustainable, smart and resilient transport services and infrastructure are vital to make full use of the economic strengths of all regions of the European Union, to support the Single Market, recover from the current crisis and stimulate future growth, and to enable economic, social and territorial cohesion, while preserving our environment and our health. They also underpin our global competitiveness, and our international connectivity. The EU transport system provides safe and secure mobility for Europeans. The transport sector in the EU-27 employs more than 10 million workers and comprises around 1.1 million enterprises, providing services to people and businesses within the EU and globally. 3.Mobility is a critical aspect of social inclusion and an important determinant of human well-being, especially for disadvantaged groups. Transport, recognised as an essential service in the European Pillar of Social Rights fulfils a basic need in enabling citizens to integrate into society and the labour market, but also constitutes a significant part of household expenditure. Enhanced connectivity and market opening has contributed to linking transport networks, bringing the EU together and making it more tangible and accessible for travellers. More needs to be done however. 4.Addressing the climate and environmental crisis is the defining challenge of our time and it is an opportunity to relaunch our economies in a sustainable manner. It requires urgent and sustained action by all actors in our society to preserve the health, prosperity, and well-being of people in Europe and all over the world. Responding to this challenge, the European Green Deal has set a high level of ambition for climate neutrality by 2050. It is also Europe’s growth strategy, which aims to transform the EU into a fair and prosperous society with a resource-efficient and competitive economy. The economic response to the COVID-19 pandemic offers a unique opportunity to accelerate the green transition. 5.Transport is the only economic sector in which greenhouse gas emissions are higher than in 1990 and have started growing again since 2013 despite the mitigation efforts undertaken. This is why the European Green Deal has set the key objective to deliver a 90% reduction in transport-related greenhouse gas emissions by 2050. It also stresses that transport is a significant contributor to air pollution and noise, and has adverse effects on our lands, oceans, rivers and lakes, hence the need to accelerate the shift to sustainable and smart mobility, and delivering zero pollution and a toxic-free environment. 6.In the 2030 Climate Target Plan, on the basis of the analysis carried out in its Impact Assessment, the Commission concluded that achieving 55% greenhouse gas emissions reductions by 2030 is fully achievable, and would not only put the EU firmly on track to achieve climate neutrality, but would also make EU business and industry global trailblazers. Achieving at least 55% greenhouse gas emissions reductions by 2030 would also improve the wellbeing of EU citizens by delivering significant co-benefits for example in terms of health, improved air quality and reduced environmental degradation, and it would strongly support the recovery from the COVID-19 pandemic and the longer-term competitiveness and resilience of the European economy. The European Green Deal is Europe’s growth strategy and to ensure we use it to its full potential, it is essential that Next Generation EU drives our competitive sustainability.

7.The impact assessment accompanying the 2030 Climate Target Plan has also shown that if we only continue with existing policies, the transport sector would fall short in delivering the contribution needed to achieve the economy-wide target of at least 55% greenhouse gas emissions reduction by 2030 and climate neutrality by 2050. Additional policies will thus be needed to close the gap. To achieve this, a three-pronged set of actions must be taken to make each and every transport mode more sustainable, make sustainable alternatives widely available, and put in place the right incentives. Source: COM(2020) 562 final. Commission Communication “Stepping up Europe’s 2030 climate ambition Investing in a climate-neutral future for the benefit our people 8.Making our mobility and transport smarter and more efficient can greatly help in achieving our health and environmental objectives. Underpinned by the ubiquitous presence of smartphones, and other digital technologies and solutions, ranging from European space data and services to innovative business models, as well as by the emergence of a shared, collaborative economy, smart mobility concepts can help improve the use of infrastructure and resources. By integrating the different transport modes and delivering multimodality, they can transform our travelling and transport experience, making it safer, smoother, health supporting and, above all, more sustainable. There is a need to offer a seamless multimodal experience to all transport users to support sustainable choices, while taking advantage of Intelligent Transport Systems for safer and more sustainable mobility. Research and innovation are key to shape the mobility of the future, and the right enablers for successful digital transformation must also be put in place. 9.The COVID-19 pandemic has had a severe impact on European mobility and the sector. It has shown the importance of making our transport and mobility more resilient. Transport workers have been on the frontline, ensuring that essential services are maintained. They need quality jobs in order to be able to provide a safe, reliable and affordable service for customers. In addition, despite some progress, regulatory, administrative and technical barriers and burdens persist in transport in the majority of Member States, causing inefficiencies and additional costs to users and the fragmentation of the Single Market. There are still major gaps and missing links in our infrastructure. At the same time, it is necessary to modernise fleets in all modes to make them more sustainable. 10.Unless EU policy initiatives towards a Single European Transport Area are thoroughly implemented at national level, the fragmentation of the transport market will inevitably limit the future quality of transport services in the EU, as the sector will miss out on the economies of scale and leave growth opportunities untapped. Moreover, lack of enforcement of social rules, together with divergent national practices have led to social issues, which may in turn worsen the quality of transport services, create distortion in the market and lead to an uneven playing field. Market opening, fair social conditions and quality jobs are thus intrinsically linked. 11.While safety and security of transport in the EU has greatly progressed, and the EU remains the safest transport area in the world, in particular in the most frequently used mode, road transport, a substantial problem remains. In recent years the reduction of fatalities on EU roads has stagnated, and there was still 22,700 lives in 2019. 12.This Staff Working Document provides an overview of the Commission services’ assessment of the aforementioned challenges – sustainability, digitalisation, resilience – that the EU transport sector faces, underpinning the Strategy and the actions put forward within in it. It also briefly describes the expected evolution of European mobility if we were to rely on existing policies, and outlines some of the key elements of the economic, social and technological context, including the impact of the COVID-19 pandemic, and the substantial global dimension of transport. In addition, it gives an overview of the key policy developments in the transport sector since the adoption of the 2011 White Paper on transport. Finally, this Staff Working Document provides a description of the pathways/scenarios for reaching the sustainability objectives for the sector, common to those supporting the 2030 Climate Target Plan.



2European mobility and transport – where are we heading? Identifying the greenhouse gas emissions gap for transport 13.The European Green Deal has set the key objective to deliver a 90% reduction in transport-related greenhouse gas (GHG) emissions by 2050 relative to 1990. This objective builds on the in-depth analysis accompanying “A Clean Planet for all - A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy”,. Transport excluding international maritime currently accounts for a quarter of all EU GHG emissions. Road transport alone represents around 20% of the total. 14.The Commission has undertaken an analysis exploring the impact of key EU level and Member States policies adopted by the end of 2019, in the so-called Baseline scenario. To ensure consistency, the same Baseline scenario is used as in the Impact assessment accompanying the Commission Communication “Stepping up Europe’s 2030 climate ambition - Investing in a climate-neutral future for the benefit of our people” . The Baseline projections show that EU-27 transport emissions would go down over time, thanks to policies in place driving the roll out of zero- and low-emission vehicles and the recharging/refuelling infrastructure, the uptake of renewable and low carbon fuels and improvements in transport system efficiency. Emissions from transport including intra-EU aviation and intra-EU maritime are projected to be 18% lower by 2030 compared to 2005, and 40% lower by 2050 relative to 2005. Compared to 1990 however, this translates into 3% higher emissions by 2030 and only 25% lower emissions by 2050, due to high increases in transport emissions during the 1990s. 15.Building on the Baseline projections, several scenarios have been developed for EU-27 in the context of the Impact Assessment accompanying the 2030 Climate Target Plan for increasing the EU’s GHG emission reductions target for 2030 to at least 55% compared with 1990 levels. By 2030, these scenarios achieve increased climate ambition by intensification of current energy, transport and climate policies or extension of carbon pricing to new sectors of the economy or combination of both (see section 5). They all achieve climate neutrality by 2050. In addition, the scenarios explore different scopes for the emissions reduction target that is particularly relevant for international aviation and maritime transport: intra-EU versus intra- and extra-EU scope. The scenarios achieving economy-wide emissions reductions of at least 55% by 2030, show that transport emissions (including intra-EU aviation and intra-EU maritime) would need to decrease by 21-23% by 2030 relative to 2005 and 96-97% by 2050. This is equivalent in terms of the 1990 comparison to reducing transport emissions by 1-3% by 2030 and by around 94-96% by 2050. 16.Comparing developments under existing policies (i.e. the Baseline scenario, achieving 18% emissions reduction in transport by 2030 and 40% by 2050) with scenarios achieving economy-wide emissions reductions of at least 55% by 2030 and climate neutrality by 2050 (21-23% emissions reduction in transport by 2030 and 96-97% by 2050), shows that additional policies are needed post-2020 in order to close the gap, and provide a cost-effective transport contribution to the European Green Deal. While reducing its environmental footprint, increasing the uptake of renewable and low-carbon fuels and decreasing its GHG emissions, transport also needs under the Green Deal to continue to meet society's needs, and deliver on its zero pollution ambition by reducing its other negative environmental and health impacts. The analysis in section 5 shows how to close this emission gap by 2030 and 2050. Curbing GHG emissions from transport also reduces the EU's dependence on fossil fuels and brings clear co-benefits leading to reductions of costs related to air, water, soil pollution, road crashes, congestion and noise pollution. Developments under current policies 17.The Baseline scenario is developed building on a set of assumptions, including GDP and population projections, fuel prices projections and technology costs, as well as policies adopted by the end of 2019. It reflects a wealth of policy measures that drive: (i) the uptake of zero- and low-emission vehicles and the roll-out of recharging/refuelling infrastructure; (ii) the uptake of renewable and low carbon fuels; (iii) improvements in transport system efficiency - by making the most of digital technologies and smart pricing and further encouraging multi-modal integration and shifts towards more sustainable transport modes. It also includes initiatives addressing road safety, and thus contributing to reducing the external costs of transport. 18.For aviation, it takes account of the implementation of the EU Emission Trading Scheme, the Single European Sky, the deployment of SESAR solutions, the research and development of cleaner aircraft technologies lead by Clean Sky public-private partnership and aircraft CO2 emissions standards, as part of the so-called “basket of measures” that aim to reduce emissions from the sector. 19.For maritime, the Baseline scenario reflects the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP) adopted by the International Maritime Organisation (IMO), as well as IMO MARPOL Annex VI rules as regards the reduction of nitrogen and sulphur oxides emissions, the latter being transposed into EU legislation by the Sulphur Directive. The baseline also accounts for other initiatives addressing air pollution from inland waterways vessels.

20.The Baseline scenario is a projection of what would happen in the absence of policy change and not a forecast of likely future developments. It builds on pre-COVID-19 assumptions, which can be interpreted as assuming full economic recovery to pre-COVID-19 pandemic levels by 2030. There are large uncertainties related to the lengths of the pandemic and its impacts on economy and transport activity. Alternative growth scenarios could also materialise. A discussion of the impacts of COVID-19 pandemic and an alternative Baseline scenario reflecting the COVID-19 pandemic is provided in the following section. A full description of assumptions, including GDP and population projections, fuel prices projections and technology costs, as well as policies underpinning the Baseline scenario is provided in Annex I. 21.Significantly, even though the Baseline scenario fails to meet the climate challenge, EU transport activity would also only continue to grow, albeit at a slower pace than in the past. Freight transport activity for inland modes (expressed in tonne-kilometres) would increase by just 33% between 2015 and 2030 (1.9% per year) and just 56% for 2015-2050 (1.3% per year). Passenger traffic (expressed in passenger-kilometres) growth would be even lower than for freight with a 19% increase by 2030 (1.2% per year) and 34% by 2050 (0.8% per year). The annual growth rates by mode, for passenger and freight transport, are provided in Figure 2 . Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) Note: For aviation, domestic and international intra-EU activity is reported, to maintain the comparability with reported statistics. For freight, inland navigation transport covers inland waterways and national maritime. International maritime is reported separately. 22.Road transport would maintain its dominant role within the EU. The share of road transport in inland freight would remain relatively stable by 2030 at 71% and slightly decrease to 69% by 2050. For passenger transport, road modal share is projected to decrease by 3 percentage points between 2015 and 2030 and by additional 3 percentage points by 2050. Passenger cars would still contribute 70% of passenger traffic by 2030 and about two thirds by 2050, despite growing at lower pace relative to other modes, due to slowdown in car ownership increase which is close to saturation levels in many Western European Member States. 23.Rail transport activity is projected to grow significantly faster than for road, driven in particular by the assumed completion of the TEN-T core network by 2030 and of the comprehensive network by 2050, supported by the CEF, Cohesion Fund and ERDF funding. Passenger rail activity would go up by 32% between 2015 and 2030 (66% for 2015-2050), increasing its modal share by 1 percentage point by 2030 and an additional percentage point by 2050. Rail freight activity would grow by 40% by 2030 and 81% during 2015-2050, resulting in similar increases in modal share as for passenger rail by 2030 and two additional percentage points by 2050. 24.Based on pre-COVID-19 pandemic assumptions, domestic and international intra-EU air transport would grow significantly (by 56% during 2015-2030 and 102% by 2050) and increase its share in overall transport demand (by 2 percentage points by 2030 and by additional 2 percentage points by 2050). Overall, aviation activity including intra-EU and extra-EU flights is projected to go up by 54% by 2030 and 101% by 2050, putting pressure on airports capacity and on air traffic management. 25.Transport activity of freight inland navigation also benefits from the completion of the TEN-T core and comprehensive network and the promotion of inland waterway transport and would grow by 19% during 2015-2030 and by 35% by 2050. The significant growth in freight inland navigation and rail freight activity is also supported by road pricing, the implementation of electronic documentation for freight transport and the European Maritime Single Window environment. 26.International maritime transport activity would grow strongly in the Baseline (by 23% between 2015 and 2030 and 54% by 2050), due to rising demand for primary resources and container shipping. Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 27.Total energy use in transport, including international aviation and international maritime, is projected to decrease by 3% between 2015 and 2030 and by 13% by 2050, which in the context of growing activity shows the projected progress in terms of energy efficiency. These developments are mainly driven by the implementation of the CO2 emission performance standards for new light duty and heavy duty vehicles post-2020, supported by the roll-out of recharging and refuelling infrastructure and also by the shift towards more energy efficient modes such as rail and waterborne transport. Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling)

28.Road transport is responsible for more than 70% of total energy use in transport but this share is projected to significantly decline over time, to 68% by 2030 and 59% by 2050 thanks to the progressive electrification of the sector and greater use of more sustainable transport modes. On the other hand, use of bunker fuels for air and maritime transport are projected to increase significantly by 2050. Their respective shares would go up from around 12% to 14% for international maritime and 15% for international air transport in 2030 (19% for international maritime and 18% for international air transport in 2050). Energy use in rail and inland navigation transport would increase during 2015-2050 due to the shift from road towards these modes, and despite their higher energy efficiency. Their respective shares in the total energy use in transport would remain limited to around 2% by 2050. 29.Alternative fuels, including renewable and low carbon fuels, are projected to represent 11.2% of transport energy demand (including international aviation and maritime transport) in the Baseline scenario by 2030 and 22.6% by 2050. Around 5% of all transport fuels in 2030 would be of biological origin, as shown in Figure 5 , driven by policy measures and notably the Renewable Energy Directive. 30.Electricity use in transport would steadily increase over time as a result of uptake of zero and low-emission powertrains in road transport and further electrification of rail. Its share in the total energy use in transport would go up from around 1.2% in 2015 to 3.4% in 2030 and 8.3% in 2050 (see Figure 5 ). The uptake of hydrogen would be facilitated by the increased availability of refuelling infrastructure, and is projected to represent 2.4% of energy use in transport by 2050. Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 31.Battery electric vehicles would see faster growth beyond 2020, in particular in the segment of light duty vehicles, driven by the CO2 emission performance standards, supported by the rolling-out of recharging infrastructure. The share of battery electric vehicles in the total stock of passenger cars would reach around 11% by 2030 and 30% by 2050. The share of low and zero-emissions cars (including battery electric, fuel cells and plug-in hybrids) is projected to go up to 16% by 2030 and 54% by 2050. For the light commercial vehicles segment, the share of battery electric powertrains is projected at 6% by 2030 and 26% by 2050. Electric buses are projected to represent around 8% of the vehicle stock by 2030, driven by the implementation of the Clean Vehicles Directive and air quality concerns in many cities banning combustion engine buses, while the uptake of electric and fuel cell heavy goods vehicles is projected to be more limited in the Baseline scenario (3% of vehicle stock by 2050). 32.Liquefied Natural Gas (LNG) is projected to represent around 2.7% of the energy use in transport by 2030 and 7.1% by 2050 in the Baseline scenario, driven by the implementation of the Directive on the deployment of alternative fuels infrastructure and of the Regulation on non-road mobile machinery, the TEN-T Regulation and also by the MARPOL Annex VI rules as regards the reduction of nitrogen and sulphur oxides emissions in the maritime transport. In the Baseline scenario, the share of LNG use in heavy goods vehicles energy demand is projected to go up to 6.8% by 2030 (12.9% by 2050) and for inland navigation to 3.7% by 2030 (8.3 by 2050). LNG would provide about 4.3% of maritime bunker fuels by 2030 and 17.1% by 2050 – especially in the segment of short sea shipping. 33.Oil products would still represent about 89% of the EU transport sector needs in 2030 and 77% in 2050, despite the current renewables policies, CO2 emission performance standards for new light duty and heavy goods vehicles, and the deployment of alternative fuels infrastructure which support some substitution effects towards alternative fuels such as biofuels and biomethane, electricity, hydrogen and natural gas. Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 34.CO2 emissions from transport including international aviation but excluding international maritime, in line with the 2030 climate and energy policy framework, are projected to be 14% lower by 2030 compared to 2005, and 36% lower by 2050. Compared to 1990 however, this translates into 9% higher emissions by 2030 and only 18% lower emissions by 2050, due to high increases in transport emissions during the 1990s. When accounting the intra-EU aviation and intra-EU maritime in the transport emissions, the Baseline projections show reductions of 18% by 2030 and 40% by 2050 relative to 2005. This illustrates the significant emissions reduction gap to be closed by 2030 and 2050, to contribute to the 2030 Climate Target Plan and the European Green Deal objectives. 35.The largest contribution to the projected decline in transport emissions between 2005 and 2050 is due to increased fuel efficiency of passenger cars and light commercial vehicles. Conversely, aviation has been one of the fastest growing sectors in terms of CO2 emissions over the past decades. Total CO2 emissions from flights departing from the EU-27 and domestic flights within the territory of a Member State of the EU-27 grew from around 112 million tonnes (Mt) in 2005 to 120 million tonnes in 2015, equal to a 7.6% increase. In the Baseline scenario, significant further growth is projected: 30% by 2050 relative to 2015, equivalent to 41% growth over the 2005-2050 period. Taken together however, the decline in passenger cars and light commercial vehicles emissions over the 2015-2050 horizon (of around 307 Mt) overcompensates the increase in emissions from the aviation sector (of around 36 Mt). Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 36.CO2 emissions from passenger transport decline by 39% in the Baseline by 2050 compared to 2005. The largest contribution comes from passenger cars, driven by vehicle efficiency standards, some uptake of renewable and low carbon fuels (mainly biofuels) and public procurement of clean vehicles supported by the recharging/refuelling infrastructure. CO2 emissions from freight transport go down by 27% between 2005 and 2050, driven by vehicle efficiency standards, some uptake of renewable and low carbon fuels and initiatives to improve the efficiency of the transport system - making the most of digital technologies and smart pricing and further encouraging multi-modal integration and shifts towards more sustainable transport modes. 37.CO2 emissions from international maritime have decreased by 17% between 2005 and 2015. In the Baseline scenario they are however projected to go up by 18% by 2030 relative to 2015 and by 39% by 2050. Relative to 2005, this is equivalent to a stabilisation of emissions by 2030 and 16% increase by 2050 which is not in line with the economy-wide climate neutrality objectives.

38.NOx emissions are projected to go down by 53% between 2015 and 2030 (69% by 2050), mainly driven by the electrification of the road transport and in particular of the light duty vehicles segment. The decline in particulate matter (PM2.5) would be slightly lower by 2030 at 49% relative to 2015 (72% by 2050). Air quality issues represent a particular concern in urban areas. In the Baseline scenario NOx and PM2.5 emissions are projected to decrease at higher pace in urban relative to inter-urban areas (69% reduction in NOx emissions by 2030 and 60% for PM2.5 emissions), thanks to the use of more sustainable alternative modes, including active modes, and cleaner vehicles. Overall, external costs related to air pollutants would decrease by about 60% by 2030 (78% by 2050). 39.Congestion costs from transport are projected to increase by about 19% by 2030 and 33% by 2050, relative to 2015. Congestion on the inter-urban network would be the result of growing freight transport activity along specific corridors, in particular where these corridors cross urban areas with heavy local traffic. Thanks to policies in place, external costs of accidents are projected to go down by about 14% by 2030 (20% for 2015-2050). Overall economic, social and technological trends 2.1.1Economic context 40.Economic growth plays a central role in the development of transport demand, so the strong economic impact of the COVID-19 pandemic has had, and will continue to have, a major impact. It materialises through three main channels. First, the partial or full shut down of entire sectors, due to the measures enacted to contain contagion, has severely disrupted domestic production in most countries, as well as service sectors like transport and mobility. Second, the propagation of such disruptions along global value chains has impaired the functioning of the EU Single Market and of extra-EU supply chains. Third, the consequent loss of income is generating another sizeable shock, which feeds back through the demand side. If the situation is prolonged, financial strains will emerge and pose further barriers to recovery. 41.According to Eurostat data, compared with the same quarter of the previous year, in Q3 2020 the EU GDP decreased by 4.3 %, which represents a partial recovery after a decrease of 13.9 % in the previous quarter. EU employment increased by 0.9 % compared to the previous quarter, but decreased by 1.8% compared to Q3 2019. The Commission has published its Spring 2020 Economic Forecast for 2020-2021 for the EU-27 and at Member State level on 6 May. The forecast shows that the euro area economy will contract by a record 7.8% in 2020 and grow by 6.3% in 2021. The EU-27 economy is forecast to contract by 7.5% in 2020 and grow by around 6% in 2021. Growth projections for the EU and the euro area have been revised downwards by around nine percentage points compared to the Autumn 2019 Economic Forecast. 42.The Commission‘s Autumn 2020 Economic Forecast for 2020-2022 was published on 5 November. It shows that the EU-27 GDP is forecast to contract by about 7.5% this year before rebounding by 4% in 2021, which is less than previously forecast, and by 3% in 2022. This implies that the output in the European economy would barely return to pre-pandemic levels in 2022. 43.The economic slowdown estimated in the Autumn 2020 Economic Forecast leaves its traces on households too. Despite being protected by government measures, aggregate labour income is set to decrease in 2020 as many companies defer decisions about employing new staff, reduce working hours or staff numbers. Some segments of the workforce are likely to be affected more than others, with the incomes of lower-wage earners and younger cohorts showing larger vulnerability to downturns. All in all, both non-labour and labour incomes are expected to drag disposable incomes to a similar degree in 2020, while turning supportive again in both 2021 and 2022. The rise in unemployment in 2020 will likely be substantial, and the rate only contained to 7.7% thanks to the short-time work schemes that people across the EU have benefitted from, as well as by other support schemes to firms, workers and the self-employed. The International Labour Organization (ILO) estimates the loss of working hours compared to the pre-crisis level in Europe at 11.8%. Finally, a Eurofound survey finds that 38% of Europeans report their financial situation as worse than before the pandemic. Close to half of households indicate they cannot make ends meet, and over half report they cannot maintain their standard of living for more than three months without an income. Just from the narrow perspective of the impact on the sector, this loss in household income is likely to aggravate the drop in tourism and passenger transport demand beyond the pandemic. 44.As a large part of the world went into lockdown, fossil fuel prices collapsed with crude oil spot prices halved compared to last year levels. The oil price is projected to gradually recover over time, reaching USD 80/bbl in 2030 and USD 118/bbl in 2050. It is however projected to remain below the projected pre-COVID-19 pandemic levels. The situation is still evolving, and it is currently not possible to understand the full impact of the unfolding pandemic. These estimates do not include the possibility of more negative outcomes (e.g. due to a second epidemic outbreak). 45.Drawing on Commission’s Spring 2020 Economic Forecast, it is estimated that real GDP could be about 2.3% lower compared to pre-COVID-19 pandemic projections by 2030. Based on the estimates for GDP and the fossil fuel prices projections, an alternative Baseline scenario (so-called COVID-Baseline scenario) has been developed with the PRIMES-GAINS modelling suite, to account for the impacts of the COVID-19 pandemic on transport activity. This shows lasting changes in the mobility trends by 2030 and 2050. The COVID-19 pandemic is projected to lead to lower total passenger transport activity of about 4% by 2030 and 2050 relative to the pre-COVID-19 pandemic situation, despite strong recovery starting in 2021. Air transport would be most affected, driven by the reduced business travel and more domestic tourism relative to the pre-COVID-19 pandemic situation. Less commuting and preference given to individual transport modes would also have an impact on rail and public transport activity. Road transport activity would be the least affected in the medium to long term. A comparison between the growth in transport activity, by transport mode, in the Baseline and the COVID-Baseline scenarios is provided in Figure 8 . Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 46.The growth of freight transport volumes tends to follow the rhythm of GDP growth. As a result of the economic crisis 2008-2009, the volume of freight transport in tonnes-kilometres in the EU-27 has dropped close to the level of 2000. Since 2010 it’s been recovering slowly and only reached pre-crisis levels in 2017. The volume of passenger-kilometres travelled in the EU-27 has grown quite steadily over the last ten years and picked up notably since 2014. The recovery after the extreme drop of activity due to the COVID-19 pandemic is projected to take a longer period of time, until pre-pandemic transport volumes are reached again. 47.The COVID-Baseline scenario projects lower contraction in the freight transport activity relative to the passenger transport activity. In the medium to long term, it also shows higher convergence to the pre-COVID-19 pandemic pace of growth compared to the passenger transport activity. By 2030 and 2050, total freight transport activity would be less than 3% below its projected pre-COVID-19 pandemic levels. Furthermore, the projections show that the pandemic would not induce significant changes in the modal shares relative to the pre-COVID-19 pandemic. A comparison between the growth in transport activity, by transport mode, in the Baseline and the COVID-Baseline scenarios is provided in Figure 9 . Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 48.The COVID-Baseline projections show that emissions from transport including international aviation but excluding international maritime would be 16% lower by 2030 compared to 2005, and 38% lower by 2050. Compared to 1990 however, this translates into 7% higher emissions by 2030 and only 21% lower emissions by 2050, due to high increases in transport emissions during the 1990s. A comparison between the changes in the CO2 emissions from transport relative to 2005 and to 1990, in the Baseline and the COVID-Baseline scenarios is provided in Figure 10 . When accounting the intra-EU aviation and intra-EU maritime in the transport emissions, the COVID-Baseline projections show reductions of 19% by 2030 and 42% by 2050 relative to 2005. This shows that after the sharp decline in CO2 emissions during the COVID-19 pandemic, existing policies fall well short in delivering the transport contribution to CO2 reductions under the European Green Deal and the 2030 Climate Target Plan.

Source: Baseline scenario, PRIMES-TREMOVE transport model (E3Modelling) 49.Trade is a main determinant for freight demand. The WTO estimates world trade volumes to fall by 13-32% in 2020. Almost all world regions are projected to suffer double-digit declines, but exports from Asia and North America may be hit the hardest. The WTO also considers that trade in services may be most directly impacted. A recovery in 2021 is expected, depending on the duration of the COVID-19 pandemic. Globally, road fuel use was down 11% for the year, jet fuel down 33% and all other fuels down 7% in April compared to the previous year, according to Rystad Energy. 50.Before the COVID-19 pandemic, the OECD projected international trade to grow by 3.4% annually through 2030 and 3.2% annually through 2050. After the previous economic crisis, though, international trade has grown modestly compared to growth rates prior to the 2008 economic downturn. This trend can be partly explained by cyclical factors in the wake of the downturn, but structural factors also play a role. Trade in services, for instance, increased from 23% to 30% between 2005 and 2017, the elasticity of trade to GDP has declined and the expansion of global value chains has begun to slow. Therefore, it is difficult to compare the effects of the previous economic crisis on international trade to the likely effects of the crisis following the COVID-19 pandemic. The structural economic consequences of the latter are yet to be seen, also because international supply chains may be shortened in order to render them more robust against disruptions. 51.Politically, the environment for international trade development has become more uncertain with the rise of political movements in several countries that question trade liberalisation and advocate more protectionist trade policy measures. The widespread call for shorter supply chains and re-patriating value chains in the context of the COVID-19 pandemic might constitute another significant challenge for international trade flows in the near future. 52.The WTO estimates that the direct economic effects of more protectionist trade policies have been modest to date but the uncertainty they generate may already be having an impact through reduced investment spending. 53.Other risks identified by the WTO include developing and emerging economies experiencing capital outflows and financial contagion as interest rates may start to rise in developed countries, with negative consequences for trade. Geopolitical tensions could threaten resource supplies and upset production networks in certain regions. Finally, structural factors such as the rebalancing of the Chinese economy away from investment and toward consumption are still present and could weigh on import demand due to the high import content of investment. 54.Commercial shipping could intensify in in light of the decrease of the extent of ice cover in the Artic Sea, which would shorten distances considerably from Asia to both Europe and North America. Large transcontinental infrastructure projects may establish alternative routes between major trade partners in East Asia and Europe, while also increasing access to markets in Central Asia and other regions including Africa. This can have an impact on port activity and the way surface transport infrastructure is used. Some parts of current road, rail and river networks could experience major reductions in traffic while others would see sharp increases. 55.E-commerce has been steadily growing and is predicted to increase further, in particular now that under the lockdown a larger share of consumers got acquainted with buying online, and households re-assign some of their budgets away from holidays and towards home goods (e.g. home entertainment and home exercise). Greater ease of purchase and returns can increase demand and foster a trend towards more individualised, small-scale deliveries, leading to more freight transport. To seize these the opportunities created by increase in demand for home deliveries, e-commerce and carriers have to adapt delivery scheduling systems, optimizing routing and managing in real time delivery volumes. 56.As regards long distance travel, the tourism sector is one of the hardest-hit by the COVID-19 pandemic, with impacts on both travel supply and demand. Travel restrictions, flight cancellations and frequency reduction have significantly diminished the supply of travel services (both domestic and international), while demand continues to retract due to fears of contagion. 57.OECD data shows that the EU-27 recorded USD 430,481 million in travel receipts (exports) in 2018, representing almost 30% of worldwide figures. Passenger transport was estimated at 17% of tourism exports in Europe in 2018, international tourism receipts (hotels, restaurants etc.) making up the other 83% according to UNWTO data. According to the same source, 53% of international tourism trips in Europe were made by air transport, 40% by road, 4% by water and 3% by rail. It is expected that, depending on de-confinement strategies of each Member State, the share of each mode in tourism may substantively change in 2020 and possibly also in the near future. 58.The OECD estimates a 60% decline in international tourism in 2020, possibly up to 80% if the recovery is delayed until December. The organisation expects domestic tourism – which represents over 75% of the sector in OECD countries, as well as EU tourism to be the first to register a rebound. 59.In May 2020, the UNWTO estimated that international tourism could decline by 60% to 80% in 2020 globally, depending on the speed of containment and the duration of travel restrictions as well as borders shutdown. The first quarter of 2020 experienced a decrease of 22% and USD 80 billion at global level, while Europe experienced a -19% of international tourist arrivals. Globally, this would translate into an estimated loss of USD 910 to 1,200 billion in international tourism receipts (exports) and 100 to 120 million jobs directly at risk. Recovery estimates remain mixed. 60.Finally, economic activity is also closely interrelated with the dynamics of energy demand and the price of crude oil. The world oil price is not only an important cost factor for the transport sector, but it can also have an effect on the choice of transport mode (depending on the oil dependency of different modes) and innovation, for example by affecting the economic attractiveness of alternative fuels or energy efficiency measures. 61.Oil markets are going through a period of extraordinary change, in the short term because demand has vanished in the context of the COVID-19 pandemic. In the longer term, demand is shifting from developed economies and transport fuels to Asia and petrochemicals. 62.The International Energy Agency (IEA) projects that, taking into account adopted and planned policies, world-wide oil use in passenger cars will peak in the late 2020s and during the 2030s demand will increase by only 0.1 million barrels/day on average each year. However there will be no definitive peak in oil use overall, as there are continued increases in petrochemicals, lorries and the shipping and aviation sectors. For Europe, IEA expects the total demand for crude oil to be 4 million barrel/day lower in 2040 than in 2018. 63.However, the evolution of both oil demand and oil price will to a great extent depend on the economic growth cycles of the world economy and on the level of ambition with which more sustainable energy, climate and transport policies will be pursued. 2.1.2Demographic trends

Urbanisation 64.Freight and passenger mobility demand also grows as global population expands, particularly in cities. Today in Europe, 74.9% of the population live in urban areas, compared to just over 50% in 1950, making Europe one of the most urbanised regions in the world. The growth of the urbanisation rate in Europe is expected to continue, with the proportion of the population residing in urban areas projected to reach 83.7% in 2050. It remains to be seen, whether the economic and social impacts of the COVID-19 pandemic on our societies will slow down this dominant long trend. 65.Single person households without children increased by 18.7 % between 2010 and 2019 in the EU, so if this trend continues, the pattern of transport demand, particularly in urban areas, will change. During the last decade i.e. 2010-2019, the total number of households in the EU increased by 7.0 %. In 2019, the EU-27 recorded 195 million households with on average 2.3 members per household. 66.Steady urbanisation means that the problems affecting many urban areas, such as congestion, air pollution, road crashes, noise and saturation of transport hubs are likely to get worse. Transport represents an important source of air pollution and is responsible for growing road congestion in cities. A growing number of cities implement vehicle access restriction in the urban areas (most often in the centres) to tackle increased noise, congestion and pollution, and improve safety (vulnerable road users such as pedestrians, cyclists and users of powered two-wheelers now account for 70% of road deaths in cities). 67.At the same time, passenger and freight transport volumes on the comprehensive and core TEN-T network are growing. However, missing links and poor connections, including between public transport and active modes of transport, remain the main challenges for integrating the urban nodes on the TEN-T network. They can also lead to bottlenecks and congestion at peak hour due to a lack of connectivity, and to a high degree of dependence on personal motorised transportation. 68.Indeed, the capacity, availability, accessibility and affordability of public transport is an important overall issue for urban development, especially if the coverage and frequency of public transport network are insufficient, or if there are barriers to multi-modal solutions, such as the combination of private bike or car and public transport. 69.Walking and cycling, often referred to as active modes of transport, are certainly not new phenomena, but their importance in urban mobility has gained prominence in recent years as stand-alone transport mode and as part of a multi-modal transport solution. Given that almost half of all car trips in cities are of less than five kilometres, there is high potential for further expansion of active mobility, including in new fields, e.g. for freight transport via cargo-bikes and to connect cities with their surrounding areas via e-bikes. The importance of walking and cycling is gaining wider recognition, even more so since the COVID-19 pandemic. Pedestrian zones are being created or extended in various cities across Europe. Likewise, bike lanes are being rapidly developed and made permanent. Alternative low and zero solutions for freight and parcel delivery in urban areas are coming on stream. In addition, we observe a growing interest by employers to (financially) support and motivate their staff to walk or cycle to work. Ageing 70.Besides the relative growth of the share of the population living in urban areas, ageing societies in Europe represent another demographic trend that is likely to shape mobility patterns in the future. The demographic old-age dependency ratio (people aged 65 or above relative to those aged 15-64) is projected to increase significantly in the EU as a whole in the coming decades. From about 25% in 2010, it has risen to 29.6% in 2016 and it is projected to rise further, eventually reaching 51.2% in 2070. This implies that the EU would move from four working-age people for every person aged over 65 years in 2010 to around two working-age persons over the projection horizon. 71.The ageing of the population has a strong correlation with the number of persons with disabilities and reduced mobility. It is estimated that in the EU there are around 100 million persons with disabilities. Many of them have reduced mobility. 72.The ageing society will require more emphasis on accessibility, the provision of safe, secure, reliable and adaptable transport services featuring appropriate solutions for users with disabilities and reduced mobility. For instance, one can expect higher demand for door-to-door mobility and driver assistance solutions. Public transport providers will have to adapt to an increasing amount of passengers with disabilities and reduced mobility, requiring investments in barrier-free infrastructure and rolling stock. At the same time, for public expenditure a higher ratio of older people will imply that more public resources will have to be devoted to pension payments, health care and long-term care, which may lead to pressure on the amount of funding available to public transport and maintenance of transport infrastructure. This structural pressure on transport infrastructure investments can be aggravated by cyclical factors. In the wake of the financial crisis of 2008/09, the European Investment Bank (EIB) noted that infrastructure investment had been disproportionally hit as fiscal consolidation had been biased against capital expenditure, with prioritisation given to current expenditure such as social transfers to mitigate the immediate effects of the crisis. This does not mean that social transfers would not have been concerned by fiscal consolidation measures, but fiscal consolidation after the crisis of 2008/09 has significantly reduced room for public investments. 73.The picture of the demographic development in the EU can vary considerably from one region to another. Over the past 25 years, some of the Eastern European Member States have lost a large share of their population through a combination of low fertility and, most notably, sizeable emigration. Pre-existing economic disparities between Member States have encouraged many citizens to search for work in places other than their country of origin. These developments have likely been to the economic benefit of the EU as a whole, but not necessarily for all sending Member States. This contributes to slowing the convergence between Member States, and impacts areas such as transport infrastructure, education and even population ageing. Intra-EU mobility has the biggest impact on the past and projected population change in the eastern Member States, where it exacerbates their population decline. 74.Our ageing society has not only an effect on the ‘demand’ side of transport, but also on the ‘supply’ side. For instance, in inland waterway transport, where – especially on the Rhine – most enterprises are family owned and family operated SMEs, the aging of the entrepreneur/crew is a major challenge, as young people seem to be less interested to pursue this profession, which requires living on the barge. 75.New forms of electric mobility, such as electric bicycles are already contributing to satisfying older people’s mobility needs in a flexible manner, allowing them to use an active and healthy mode for ways where they would otherwise rely on private cars or public transport. However, the new forms of e-mobility also bring about a specific safety challenge and older people tend to be more vulnerable than younger population groups. 2.1.3New technologies, changing consumer behaviour and working conditions 76.There are several socio-economic and technological developments that have emerged or become more prominent in the last ten years. Collaborative economy 77.Firstly, the collaborative economy increasingly affects the way transport services are organised with various bike and car sharing schemes, but also ride-sharing and ride-hailing being deployed across the EU. Some of these schemes generate new forms of work characterised by more flexible arrangements. These flexible work arrangements should be implemented in accordance with EU labour law and social protection. 78.Continuous digitalisation has made it possible to develop the concept of mobility as a service (MaaS) – a mobility distribution model in which a customer’s major transport needs are met by services integrating transport infrastructure, transport services, information and payment services, and more. This approach is also possible due to the removal of barriers between different transport modes and their users, as well as the emergence of new collaborative economy solutions. The focus in this approach is not on personal ownership of transport modes, but on mobility per se, which is seen as service.

79.Data sharing and collaborative decision-making enabled by digital technologies propose new solutions to old challenges. Businesses are interacting in ways previously unimagined, new business models and services appear, based on collaboration and sharing economy principles and enabled by data and advanced IT technologies. For instance, in freight transport and logistics there is generally a shift towards collaborative solutions, where partnerships are formed for the purpose of optimization of operations by sharing equipment, vehicles and information. Digital solutions should lead to synchro-mobility, a step change in multimodal transport which will synchronise intermodal services between modes as well as with shippers for optimal resource use and delivery times. Teleworking 80.Telework has become much more widespread since the COVID-19 pandemic and newly introduced arrangements could, at least partially, remain in place in the longer term. Learning effects of remote working and improvements in technology are likely to produce various ranges of effects on mobility and transport behaviours. 81.The pandemic has revealed large differences in the prevalence of telework across EU Member States, sectors and occupations. The preparedness for telework at a large scale is higher in ICT- and knowledge-intensive sectors, and generally for high-skilled workers, although with big differences across EU countries. In many EU countries, more than half of the workers who have started working from home since the pandemic had no prior experience with teleworking. If past trends are a guide, the uneven ability to scale up telework could result in widening inequalities across countries, firms, genders and workers, e.g. if there is uneven access to broadband, barriers for persons with disabilities or IT illiteracy to telework or use other ICT based applications. White-collar workers tend to have jobs that can be better adapted to telework requirements than blue-collar workers. 82.Telework can have an impact particularly on urban passenger transport demand, mainly during peak hours and hence also alleviate congestion as well as other environmental externalities. Another sector expected to be affected is business travel with the rise of web based meeting arrangements during the pandemic. With more developed ICT equipment in modern office workplaces and more widespread availability of fast internet, at least in urban areas, the technical preconditions for telework arrangements have become easier to meet. 83.To date, large variations in the prevalence of telework exist. In the EU, before the COVID-19 pandemic, the share of employees performing regular or occasional telework (in urban and non-urban areas) was highest in Denmark (37%), Finland (33%) and the Netherlands (30%). Relatively low shares of teleworking employees were found in Central and Eastern Europe and in the Mediterranean countries. Source: OECD calculations based on Eurofound-ILO research 2017. 84.At the same time, asked how much time they spend every day travelling to and from work, 47% of the employees in the EU indicate a commuting time of more than 30 minutes one way and 11% travel more than 60 minutes. The highest shares of employees travelling more than 60 minutes from or to work are found in Sweden (24%), Denmark (22%) and Belgium (22%). Digitalisation and automation 85.The increasing automation and digitalisation of transport offers a huge potential in terms of safety, efficiency and sustainability and thus also new opportunities for women in transport jobs, since new job profiles imply less heavy physical labour and more digital skills. We are already seeing how new digital automotive technologies can help reduce the number of deaths and serious injuries, enable better organising and executing of travel and transport operations, lower energy consumption and pollution, and optimise the use of resources and existing infrastructure. It is also a powerful tool to overcome the disadvantages - complexity, higher costs and risks of multimodal transport, and to facilitate the better integration of the different modes of transport. 86.Based on existing policies for urban passenger transport and assuming an increased uptake of teleworking, the OECD estimates that the share of urban passenger-kilometres travelled in privately owned vehicles could decline from around 70% in 2015 to 40% by 2050 in the world. Shared modes that include shared vehicles systems (e.g. free-floating or non-free-floating shared cars, bikes or scooters) and optimised shared mobility services (e.g. a shared taxi, van or minibus with a driver) represented only 1.5% of the urban passenger-kilometres travelled world-wide in 2015. However, they are expected to grow to over 20% of the total passenger transport demand in cities by 2050 globally. The share of more traditional public transport (bus, rail, metro) should grow modestly from 30% in 2015 to over 35% of all urban passenger-kilometres travelled worldwide by 2050. 87.Though opportunities are huge, at the same time there is still a lack of solid framework conditions (e.g. legal and social aspects, required interoperable infrastructure and interfaces). Alongside, technological challenges remain in this fast-evolving field. 88.All transport modes are taking advantage of digital technologies, Internet of Things, and automation. Furthermore, digital technologies also enable or accelerate the emergence of new transportation solutions, ranging from progress towards automated road vehicles, connected and automated lorries (platooning), driverless goods delivery vehicles, or self-driving trains to unmanned aircraft and ships that can offer taxi services over short distances, and other potential innovations. Moreover, mobility intertwines with other sectors such as automotive, environmental or digital, where new players take a more relevant, or even dominant, position through the provision of new transport services based on digitalisation. 89.Concerning drones, they can make a significant contribution to the development of greener and cheaper local transport solutions in urban, peri-urban and inter-urban contexts. The technology is already there, fully functional and offering a multitude of applications, such as precision agriculture, infrastructure inspection, transport of medical supplies, environmental compliance, atmospheric research, media and entertainment, sport photos, filming, wildlife protection and research, disaster relief, etc. The global drones market is forecast to increase from USD 4.9 billion in 2019 to USD 14.3 billion in 2028. Out of total, Europe’s drone start-up investments is expected to represent only 9%, indicating a clear lag behind US and Chinese firms’ investments in this technology. Commercial use will surpass the consumer drone market in 2023, becoming the largest segment. It might grow more than eightfold to reach USD 9.5 billion in 2028. In terms of jobs, for Europe, employment is estimated to increase to about 150,000 jobs by 2050 in manufacturing with additional jobs created in drone operator services. 90.Air traffic management (ATM) is also a sector with increased use of digital technologies, notably solutions brought by the SESAR project. Innovative infrastructure projects can lead to substantial efficiency gains in the aviation sector and a reduction of emissions resulting from aviation activities. It is the aim that ATM system infrastructure progressively evolves with the adoption of advanced digital technologies, allowing civil and military air navigation service providers (ANSPs), airports and the network manager to provide their services in a cost-efficient and effective way irrespective of national borders, supported by secure information services. Moreover, ATM progressively needs to evolve into a data ecosystem supported by a service-oriented architecture to enable the virtual defragmentation of European skies. 91.With respect to automated road vehicles, similar developments can be observed. Automated driving will, in the future, play a key role on the transformation of mobility, and also on the automotive sector. Ultimately, safety is one of the crucial underlying justifications for automated and connected vehicles. However, in the forthcoming transitional phase, where we will see mixed traffic of highly automated and “traditional” vehicles as well as other road users like pedestrians and cyclists, new safety risks require proper consideration. The driverless freight delivery vehicles and connected and automated lorries hold a promise of significant reductions in operational costs to make the freight delivery services cheaper. The deployment of self-driving technologies should be well prepared to prevent undesired social effects. 92.Besides, the large amount of generated data will significantly impact the complete value chain, mainly on the digital and automotive sectors. The whole industrial sector will need to evolve and adapt in a fast pace to stay ahead in global competitiveness, while including all stakeholders and addressing societal needs.

93.As new technologies have allowed for driver assistance and ever more advanced active safety systems for vehicles, in the future they could lead to the emergence of new mobility services based on highly or fully automated vehicles. Cooperative intelligent transport services now being deployed in vehicles and on road infrastructure will support the transition to automation. Highly automated road vehicles function in certain areas (i.e. highways, ports and shuttles) and could already be operational in the near future. Several large-scale EU demonstration projects are already ongoing for both passenger cars, freight vehicles and public transport in anticipation of this substantial change. 94.On the other hand, automation and digitalisation offers new mobility opportunities and more comfort, which could lead to an increase in road transport demand, which might increase for instance congestion. 95.Automation is also important for rail transport. It is already in widespread use on metro systems and is now being extended to heavy rail too. It will bring very significant energy savings due to more efficient driving, and (combined with the latest versions of ERTMS) can allow capacity increases of more than 30% even on the most congested infrastructure provided rail operations are adequately adapted to benefit from digital innovation. Technologically it is far simpler than equivalent road technologies, so with strong coordination between the rail infrastructure and the operations on the rail network, it can and should be rapidly deployed. Combined with increased automation of rail traffic management and timetabling, it should lead to much greater flexibility in service provision. Changes in industry and logistics in the EU 96.Further changes in the way the world economy and industry operates (e.g. increasingly complex business structures and supply chains, growing importance of software, 3D printing or shift to circular economy) will require further optimisation of transport services, mainly in freight transport, and changes in design of transport vehicles and infrastructure. The aforementioned elements have also an impact on the employment in the transport sector, in terms of opportunities, required skills and working conditions. 97.Great uncertainty surrounds the extent to which re-shoring and 3D printing will dampen future growth of freight transport. If adopted extensively, both can affect the type of goods moved, decrease the distances between production and consumption centres and thus fundamentally alter today’s long and complex supply chains. A significant decrease in the total value of internationally traded goods can greatly reduce sea and air transport volumes. 98.Nonetheless, freight volumes are expected to continue to grow strongly. Before the outbreak of the COVID-19 pandemic, global freight demand was projected to triple between 2015 and 2050. Currently, the outlook for international trade is more fragile although volumes are recovering. At the same time, freight transport and logistics are undergoing major transformations, and these will likely be even more disruptive in the future. Technology, business models, consumer behaviour, shifts in trade patterns, and other factors all contribute to a changing transport landscape, and how they play out can have a substantial impact on the projected growth. New technologies and smart digital solutions supported by effective modernised regulation are needed to accommodate this major increase in transport demand sustainably – i.e. with only limited increase in assets and energy consumption. Increased productivity and efficiency of the logistics and supply chains remains in this context a key challenge. In container shipping, ship sizes and total capacity have increased by a factor of 2.5 between 2004 and 2018 while the number of companies has almost halved over the same period. E-commerce and last-mile logistics are equally increasing significantly, a trend further accelerated as a consequence of COVID-19 pandemic. 99.Digitalisation and automation of transport services also raise new challenges for service providers, especially in terms of personal data protection, data sovereignty, interoperability, cyber security and user acceptance. Cyber-attacks may lead to delays of services, damage to physical systems, data theft, or even passenger injuries. There are also concerns that remotely controlled aircraft and automated rail and road vehicles may be subject to hacking or hi-jacking from distance. Similar concerns arise in the maritime area, because of the growing digitalisation of sea navigation. Impact of the COVID-19 pandemic on the transport sector 100.Although not reflecting a long-term trend, the COVID-19 pandemic is having significant effects on the transport sector, which have the potential to shape the sector for years to come. 101.Transport is one of the most severely affected sectors by the COVID-19 pandemic, along with sectors such as tourism and hospitality. The impact was driven in the short term by lockdown measures (including travel restrictions, tele-working and home-schooling), other restrictions and voluntary avoidance efforts. This has led to steep reductions in manufacturing and transport activity, as well as reduced activity in service sectors such as retail stores, hotels and restaurants, etc. In addition it had a huge impact on reduced levels of physical activity and general fitness among children. The crisis has also highlighted the strategic importance of transport for the supply of essential goods such as food, medicines and supply of essential materials, particularly pronounced in certain remote regions such as the outermost regions. The resilience of the transport and logistics system in Europe has been a key contributing factor to managing the crisis effectively. 102.The pandemic’s short-term impact on the transport sector, in particular on passenger transport, as well as on global supply chains is dramatic and unprecedented on this scale in the post-war period. Lockdown measures led to a prolonged standstill in production across many sectors creating supply chain disruptions across the EU. This has led to a general fall in freight transport demand. On the other hand, increased on-line shopping, including of essential goods such as groceries and pantry items, have almost doubled the usual home delivery rates. This increase of demand revealed limitations in last-mile delivery capacity, also due to the lack of drivers, at least in the short run. 103.The long-term effects on transport activity will only become clear after the pandemic has come to an end and will largely depend on the pace of the economic recovery. Preliminary transport activity projections, reflecting the impacts of the COVID-19 pandemic at EU-27 level, have been presented in section 2.3. 104.Behavioural changes already seen before the COVID-19 pandemic (e.g. urban mobility) may affect certain transport modes as economies re-open, with long term effects for some. Web-based meeting arrangements which have grown in use during the pandemic are likely to become more frequent even beyond the pandemic, thus adversely affecting business travel. Global supply chains may be reorganised with a view of rendering them more robust against the fall-out due to interruptions in freight distribution, affecting transport volume and patterns. The growth in e-commerce may become a long term trend with a new level of customers’ expectations for faster, contactless (safer in terms of contagion risk) home deliveries, requiring the modernisation of corresponding delivery and transport channels. 105.However this is clearly an ongoing and developing situation, and more time will be needed to gather and analyse data in order to grasp the full impact of the current crisis on the behaviour of passengers and transport users. 2.1.4Air transport 106.Aviation is one of the EU transport sectors whose activity has been the hardest hit by the COVID-19 pandemic, due to supressed demand following containment measures taken by governments – including travel restrictions, lockdowns and quarantine zones, as well as customers’ fear of contagion. Widespread flight cancellations for consecutive months have caused major disruptions for passengers, the aviation industry, the tourism sector and the EU economy as a whole. 107.After a positive evolution of the traffic situation following the removal of border and travel restrictions in June, recovery dramatically slowed down following the reintroduction of travel restrictions across Europe. Traffic in November 2020 was 59% below 2019 levels in terms of flights. In 2020, until mid-November there was a loss of 1.5 billion passengers at European airports across the network compared to 2019 levels. International passenger transport is likely to continue to be severely reduced due to lower demand and government restrictions in the next years following the COVID-19 pandemic. Experiences from earlier network disruptions, such as the 9/11 terrorist attack in 2001 and the Icelandic volcanic ash incident in 2010, indicate that rebuilding may take a long time. 108.It must be underlined that there is a strong link between temporary border and travel restrictions and the resumption of traffic. In particular quarantine requirements led to a sharp drop in passenger bookings, although some other factors such as squeezed household budgets, uncertainty over ticket refunds, and fears of infection while travelling also contributed. Travel demand does therefore in general tend to reflect the existence or the severity of travel restrictions in place at national level, in particular if they are not co-ordinated between Member States. Ensuring a co-ordinated approach at European level of national measures to contain the COVID-19 pandemic is therefore likely to substantially improve growth. The same applies for intercontinental travel where closed borders or travel restrictions hamper travel. 109.This has affected every branch of the wide aviation value network, also resulting e.g. in numerous delays and cancellations of aircraft orders, leading to a severe decrease in the aeronautics industry’s order books.

110.According to Eurocontrol projections, air traffic growth volume in 2020 and 2021 will depend on the ability of European countries to coordinate their health and sanitary measures. Overall, the Current Status Scenario by Eurocontrol envisaged a loss of 55% of flights (6 million) in 2020. According to IATA recovery to 2019 level will not take place until 2024. 111.Taking all of the above into account, there will be a total industry loss in revenues of approximately EUR 140 billion during 2020 for airlines, airports and air navigation service providers. As a result, more than 7 million jobs supported by aviation (including tourism) in Europe are now at risk, as estimated by IATA. The pressure on the sector has also resulted in raising the precariousness of work in the aviation sector. 112.In response to this unprecedented decline in passenger air travel, the European associations collectively representing the entire European aviation sector called for measures to restore the public’s confidence in air travel. To this end, they stressed the need for an effective coordination of national travel restrictions measures, based on a common set of criteria, data and guidelines provided by the European Centre for Disease Prevention and Control (ECDC) and the European Union Aviation Safety Agency (EASA), and further improvements to the effective enforcement of passenger rights to ensure legal certainty in travel. 2.1.5Waterborne transport 113.International freight transport is affected by both demand and supply of goods effects related to the pandemic. Continued and uninterrupted maritime services are of key strategic importance for the whole EU, with 75% of goods arriving to the EU by sea. About 30% of all goods internally in the EU are transported by ships. The COVID-19 pandemic has had a major impact on global shipping, affecting all its segments from passenger ships to container ships and oil tankers. While some ports have restricted passenger services, EU ports have remained open for cargo transport. After an early effect of Chinese lockdown measures on global supply chains, factory output has been picking-up after the relaxation of containment measures. 114.EMSA reported that the number of ship calls at EU ports declined by 12.5% in the first 39 weeks of 2020 compared to the same period in the previous year. The most significantly affected sectors have been the cruises, passenger ships, roll-on-roll-off-passenger and vehicle carriers. Meanwhile, the number of chemical tankers ship calls increased in comparison with 2019 and the numbers for bulk carriers, containerships, general cargo and oil tankers saw a limited decrease (up to 10%). 115.The impact of the inland navigation sector is estimated to a total loss of turnover between EUR 2.2 and 4.4 billion considering a 90% reduction in passenger transport and 25-30% reduction in freight transport during the crisis. Inland ports have observed a decline in traffic due to the decrease of activity in seaports (e.g. container trade with China). 116.Travel restrictions have also significantly reduced the number of passengers carried by ferries, leading to financial difficulties for companies that provide essential connections, in particular to islands and other remote regions. In order to ensure basic connectivity across the territories of the EU and ensure continuity of services, Member States have, apart from other support measures, also put in place temporary public services obligations (“PSO”) and/or public service contracts (“PSC”) to replace or support services that become commercially unviable due to a sudden drop in passenger numbers. 117.Severe decrease in the sea transport of passengers impacted also the flows of goods transported on ro-ro-passenger ships and on ferries, whose traffic is heavily dependent on the revenues derived from passenger services. If demand for passenger and personal vehicles’ transport remains low in a longer term, freight transport business by these ships may not be possible without public support. 118.The cruise ship sector has also experienced severe operational losses. The capital value of the cruise ship industry reportedly dropped by more than 70%. The majority of cruise companies stopped operations, at the same time looking for means to increase their credit capacity to manage the economic impact. The re-uptake of activities has been limited, both as regards passengers and vessels, as well as in geographical scope. The negative image of tourists and crew quarantined on cruise ships during the pandemic will likely have a longer-lasting impact on demand for this service, as well as for demand for new cruise ships, of which around 90% are built in Europe. 119.In the maritime sector, the impact of the COVID-19 pandemic has reduced not only the demand for transport and cargo services, but also the ability to supply such services. It highlighted in particular the substantial consequences for seafarers, whose working conditions severely deteriorated. Due to travel restrictions and fewer connections, many ship-owners were unable to conduct sufficient crew changes and repatriate maritime workers. 120.For all shipping segments with crew and passengers or persons on board, the issue of crew changes, repatriation, medical care and other preventive and protective measures are key to allow as uninterrupted operations as possible. Notable COVID-19 outbreaks associated with shipping crews and passengers have focussed attention on this issue. The social partners, ECSA and ETF issued separate public statements urging authorities to facilitate swift and safe crew changes, safe berthing places, exemptions from levies during prolonged lay-off period, guarantee safe passage, as well as, of course, the provision of personal protective equipment (PPE) to all working in the sector. 121.The majority of seafarers employed on ships, regardless of the flag of the ships, are nationals from a limited number of labour-supplying countries; and certain traffic routes and coastal States globally receive a disproportionately large volume of incoming and outgoing vessels. In this context, the measures adopted by some third countries have had an impact on European operations. At IMO and ILO level, efforts are ongoing to provide a baseline of information sharing and respect for the basic needs of crew changing and repatriation. 122.There have been cases of social unrest on board ships where maritime workers have been stranded or had their contracts extended beyond the limit set by the Maritime Labour Convention, 2006, with no possibility to repatriate. The European Commission and the High Representative have undertaken extensive efforts to ensure maritime workers are recognised, globally, as essential or “key” workers, can travel for work and repatriate after their contracts end. With COVID-19 cases rebounding, variations in the pandemic situation locally and globally is proving difficult to reach a stable arrangement on this front. 2.1.6Road transport 123.The most affected segment of road passenger transport has been international traffic, particularly coach tourism. After a period of partial reopening between July and November, some international coach operators have been recently scaling back again their services in some EU countries due to the second wave. 124.Road freight transport gradually picked-up starting in the second half of May, according to real time indicators, such as German truck toll activity and pollution levels. By mid-July, German truck toll activity was already tracking closely its level over the same period of 2019, but has since failed to gain further momentum. Road traffic in France, Italy and Spain broadly flattened over July and September, stopping short of a full recovery. More recently, however, road traffic in both France and Italy has increased somewhat and now stands around 10% below its values for the same period of last year. 125.After major disruptions in road freight transport within the EU in the beginning of March, the Commission’s Green Lanes initiative has improved the situation at most internal borders. In November, the vast majority of borders continued to comply with the 15 minutes waiting time mandated by the Green Lanes. Border crossing points with Romania and Bulgaria continue to be impacted by long queues. Others show occasional peaks in waiting time (Romania-Hungary, Croatia). On the external borders of the EU, there continue to be long queues at borders with Switzerland (which seem to be not COVID-related but due to customs checks). There is a continued long waiting time at the Bulgaria-Serbia, Hungary-Serbia, Greece-Albania borders. In particular, Röszke-Horgoš (Hungary-Serbia) has experienced the highest waiting times since commencing monitoring of waiting times. 126.Compared to pre-crisis levels, most Member States are still seeing important decreases in demand for road freight transport. The IRU estimates the goods transport losses to exceed EUR 800 billion globally. 127.Based on preliminary data from Member States, the Commission estimates that the number of road fatalities during lockdown measures decreased across the EU in March (-29%), April (-41%), May (-27%), June (-27%), July (-16%), August (-16%) and September (-14%) compared to the average of the same month in the previous three years. This means that around 3 000 lives fewer have been lost. This is an unprecedented and of course welcome development, although the number of deaths did not fall significantly in all Member States and not by the same degree as the drop in traffic volumes.

128.As a result of lower traffic volumes compared to previous expectations, ratings agencies have re-assessed negatively the outlook of a number of Europe’s privately-owned toll road concessionaires. 2.1.7Rail transport 129.Railways have experienced significant and unexpected disruption due to the COVID-19 pandemic, with a huge drop in passenger mobility. During the peak of the crisis ridership went down by more than 90% in several countries and many international connections were stopped. After the drop of turnover by 35% observed during the first semester, there has been a significant improvement of the situation in July and August but pre-crisis levels are still far from having been reached (July: -28% compared to same month of previous year; August: -27%). However, the trend is not maintained as demonstrated by the figures of turnover losses in September with -29%, due to the second wave of the pandemic hitting countries across the EU and the expected impact on rail passenger travel. Smaller independent operators are particularly badly hit and, according to their association ALLRAIL, have so far not benefited from State aid to the same extent as incumbent operators. 130.Rail freight continued to run reliably throughout the pandemic, ensuring supply chains and suffering from much less disruption than other modes. Nonetheless, the impact of the COVID-19 pandemic caused an approximate average decline in rail freight revenues of 15% across the EU-27 during the first half of 2020 and lost revenues of about EUR 48 million per week with a total estimated loss of EUR 1.25 billion accumulated over the first semester 2020. Rail infrastructure managers are impacted by the COVID-19 pandemic due to the reduction in traffic and the revenues it generates. 131.Intermodal transport suffered from lower demand from its traditional markets. At the same time, it gained some new clients by demonstrating its potential for long distance, Europe-wide transport of goods, with the local (usually around 50 km) distribution organised by lorries or vans from the terminals to distribution centres or factories, with a limited human interaction. Adequate network of multimodal terminals, reliable rail (in particular the Rail Freight Corridors), but also inland navigation and short sea shipping services are in this context essential. 2.1.8Urban transport 132.Public transport operators have been severely hit by the COVID-19 pandemic: they were required to maintain essential services in operation during the lockdown period and to restore services as movement restrictions eased. 133.Public transport is likely to continue to be affected, especially in regions where quarantine measures have reappeared. As of 15 November, the mobility trends for public transport hubs (subway, bus and train stations) are -46 % in Netherlands, -45% in Italy, -28% in Spain, Germany and -46% in France compared to the pre-pandemic baseline. 134.Nevertheless, most public transport companies – whether public or private – maintained a high level of service where possible (between 70 and 100 percent of the normal offer). Many of those who must continue commuting rely on public transport systems, which are uniquely positioned to carry large volumes of passengers through busy urban areas. Even during the pandemic, public transport has remained the backbone of sustainable mobility and essential to economic recovery. Although there is new and growing evidence that public transport riders do not face higher infection risk than non-riders , public transport authorities have had to take supplementary measures for disinfection and mask provision to reduce risk for workers and passengers alike, incurring extra costs. 135.In addition, the need to ensure physical distancing severely reduced capacity, which led the public authorities in several countries to appeal to citizens not to use public transport (for instance to keep it free for essential workers and those without alternatives). This appears to have contributed to a general public concern about the safety of using public transport during the pandemic, and continued stagnation in its use in many cities. 136.At the same time, the COVID-19 pandemic has led to a shift to individual modes of transport, with walking and cycling often being the preferred mode in many cities, combining the ‘active’ element (physical exercise) with the travel objective. This has resulted in additional health benefits thanks to increased physical activity, reducing a key risk factor of non-communicable diseases, such as cancer and cardiovascular diseases. Cities have also been struggling to accommodate the necessary distancing rules due to insufficient space for pedestrians and cyclists and many of them have therefore taken action to implement temporary measures, such as the widening of pavements and the roll-out of temporary cycle lanes. Many cities are also now making these temporary lanes permanent to try to maintain or further improve active mobility flows, also to help improve public health and reduce mortality caused by non-communicable diseases. However, new individual solutions accessible for those with disabilities and reduced mobility have not yet materialised and existing ones are expensive and limited in offer. 137.A drop in air pollution in cities during the first period of lockdown measures is confirmed by data published by the European Environment Agency. As first round of lockdown measures eased, there were increasing indications that more people are using private cars, partly because of continued concerns about the safety of public transport. This led to a return to congestion, poorer air quality and increased road safety risks. Therefore some cities in Europe, e.g. Milan or Brussels, are re-thinking their sustainable urban mobility plans in order to discourage the use of private cars. In addition, the EU High Level Group on Road Safety has agreed on common principles to address road safety concerns, including strengthened enforcement, measures to restore confidence in public transport, and continued investment in road safety, including in order to make temporary safety measures (adopted during lockdown) permanent, such as “pop-up bike lanes”. 138.New shared mobility services, such as e-bikes, e-scooters, shared cars, experienced drastic reductions of service in quarantine areas and in several cities have been slow to re-emerge even as movement restrictions were raised. The business models of many companies offering shared mobility services already involved long periods of loss-making and some of them may be driven (close) to bankruptcy or to change their business model.

3Key policy developments over the last decade 139.The 2011 White Paper for transport defined a vision for a competitive and sustainable transport system, the implementation of which required an efficient framework for transport users and operators, an early deployment of new technologies and the development of adequate infrastructure. It set the paramount goal of European transport policy as helping establish a system that underpins European economic progress, enhances competitiveness and offers high quality mobility services while using resources more efficiently. 140.This section highlights some of the additional measures that have been put in place in the key policy areas over the last decade. Nevertheless, it needs to be recognised that significant challenges remain, as described in the subsequent sections, particularly in relation to meeting the need for sharper CO2 reductions from transport in order to reach economy-wide climate neutrality by 2050 and the increa