Introduce requirement to monitor and report on toll revenues: All Member States monitor and report on toll revenues, expenditures on maintenance and on road quality indicators (2020).

Introduce CO2 differentiation of road charges for LDVs: Road charges are differentiated according to real-driving emissions (CO2 and pollutant) for LDVs, from 2020.

Increase the application of external cost charging for HDVs: At least half of the Member States apply external cost charging for HDVs (2020).

Introduce CO2 differentiation of road charges for HDVs: Road charges are differentiated according to CO2 emissions of HDVs (as soon as technically feasible, probably 2019-2020).

Based on the preferred option, the following operational objectives have been identified (if not indicated otherwise, the measures would be applicable with immediate effect):

The benchmarks for these indicators are the Baseline developments, i.e. the projected situation in 2025 without further action. For the levels of CO2 emissions and congestion, the values are readily available in the EU Reference scenario 2016 as indicated in section 2 of this report. Since estimating the future quality of roads or spending on maintenance is less straightforward, the current levels of indicators (satisfaction with road quality and expenditure data) can be used as benchmarks. The progress on applying the polluter pays and user pays principles can be made in a more qualitative way, based on different factors outlined above. The current levels of charges, the length of tolled network and covered vehicle categories as well as the practice in applying external cost charging will be a useful basis.

oThe Commission establishes and updates a register of congestion charging schemes deployed by Member States on the basis of the notifications in receives.

oMember States monitor and report annually the evolution of traffic levels in peak hours on the interurban road network with real life traffic observations performed on a representative number of congested road stretches belonging to the primary national network.

oThe Commission observes the evolution of the vehicle fleet using toll roads according to environmental performance (Euro class, in the future CO2 emissions) based on publically available industry and government data (annual).

oThe Commission continuously keeps track of the evolution of road charging systems in the EU, including charged vehicle categories, charge levels, differentiation of charges according to environmental performance or time, vignette prices (with special attention to cars).

oData on expenditure on the maintenance of road infrastructure will be reported by Member States through their annual infrastructure reports.

·The state of tolled road infrastructure as reported by Member States through specific quality indicators (e.g. surface quality, safety, level of service…). Key performance indicators to be developed by CEDR will also provide useful input.

oCO2 emissions from every single vehicle will be monitored using VECTO, making annual comparisons per vehicle category to the previous year;

In order to assess the impact of the legislation on overcoming main identified problems, it would be necessary to make a thorough evaluation once all the changes have been phased in. 5 years after the new framework becomes applicable in its entirety would seem to be right moment to do such an evaluation.

Much as it is difficult to quantify the impacts of these measures, they could also reduce the administrative burden and enforcement costs when applying distance-based charges. All these measures are applied from PO2 onwards and three out of five are already applied in PO1 and maintained in the other options. Thus, from the REFIT perspective all options perform better than the baseline. PO2, PO3 and PO4 introduce additional requirements that would increase administrative burden and compliance costs compared to the baseline, but these are necessary to meet the specific objectives of the initiative and should not be looked at from the REFIT perspective.

·The administrative burden Member States already face linked to reporting requirements under Regulation 1108/70 from 1970 introducing an accounting system for expenditure on infrastructure, which may be repealed – compared to that act, this initiative would only require the most relevant information, necessary for the monitoring of the progress towards the objectives, to be reported by Member States.

·The benefits generated by the initiative, in particular in terms of improved road quality and reduced negative impacts attached to poor quality;

While regular infrastructure reports by Member States may cause some administrative costs, these should be relatively insignificant compared to:

The simplifications concern mainly national authorities rather than businesses, with the exception of the last measure, which could decrease the burden on hauliers (SMEs) by 63% or over €2 billion in vehicle tax paid for the use of HGVs. Overall costs to road users, including citizens and business, are likely to increase, even if only to a small extent.

·allowing the reduction of circulation taxes for HGVs above 12 tonnes, which would facilitate Member States in replacing these taxes with more progressive distance-based charges.

·simplification and updating of the application of mark-ups and facilitation of application of congestion charges; and

·updating of the unit values for external cost charging to better reflect the environmental impact of different vehicle categories;

·simplification of the application of the additional charges for external costs of noise and air pollution (that is a more accurate and thus fairer instrument than modulation by Euro class) by allowing the use of reference values without the need to do any calculation;

·replacing an obsolete system of not well-defined modulation according to Euro classes for HDVs with more adequate and harmonised CO2 emission-based modulation of charges (to be based on a robust testing scheme);

The REFIT dimension of this proposal comes more from the simplification and updating of the requirements for distance-based charging so that they are fit for purpose, that is:

It is clear that the regulatory costs related to the initiative would increase with the change to distance-based tolling, as it would increase the compliance costs for many market players. However, these costs would be compensated by higher revenues (toll chargers, Member States) and better road quality and more reliable travel times (road users). Moreover, the shift from time-based to distance-based system should be more looked at from the perspective of social benefits, which would increase, rather than from the reduction of the regulatory costs. Benefits would include reduced negative environmental and health impacts (citizens), and related external costs borne by society (taxpayers), while regulatory costs should be reduced by the initiative on the EETS.

If an earlier or later date was selected, that would shift the increase in costs to that year but, in the absence of reliable estimates, it is not possible to indicate potentially higher or lower costs by then. Since at this stage there is no support from Member States for distance-based charging for cars, a longer perspective is necessary for them to consider if they would indeed want to implement it.

In the case PO4 is the selected option, the phasing out of time-based vignettes for passenger cars should be longer than for HDVs to allow for the effects of the revision of the EETS legislation to materialise (decrease in costs of implementation/operation), which is difficult to predict but could be after 2025 – this date is considered in PO4 as year of introduction of distance based systems for light vehicles in a number of Member States.

PO3b is therefore the preferred option. PO4 could be considered as an ambitious alternative, including the phasing out of time-based charges for passenger cars and light commercial vehicles and mandatory external cost charging for all heavy-goods vehicles and buses. If the additional revenues and other benefits under PO4 are appealing enough to face the expected opposition to generalised distance-based road charging for cars and the higher costs attached to this, then, subject to a phasing-in period, this could be the preferred option.

Based on the above assessment, it can be concluded that PO4 would be the most effective in reaching all four specific objectives, but at relatively higher cost than the other options. At the other end of the spectrum, PO1 can contribute to achieving the objectives only in a very limited way although at practically no cost. PO2, PO3a and PO3b are more balanced in their economic, social and environmental impacts and can achieve these results at a reasonable cost. While the differences compared to the baseline are limited between these three options, PO3b stands out somewhat in that it has more important positive environmental impacts, while also having significant impact on reducing congestion.

None of the options go beyond what is necessary to achieve the objectives. On the contrary, all of them can only contribute to a certain extent compared to the "ideal" scenario of full internalisation of external costs, with PO4 being the closest to the scenario, while PO1 can only achieve one objective satisfactorily. The scope of the options is limited in that where they address areas that are primarily national competence (infrastructure, congestion), they either do not interfere in how road quality is ensured or do not impose the application of congestion charging on Member States. Costs to Member States, businesses and citizens are limited compared to the potential benefits for each policy option. The choice of instrument (Directive) is adequate as it allows satisfactory achievement of the objectives, at least in PO2, PO3, and PO4. Soft law has not been able to achieve the objectives.

The differences are in the emphasis put on achieving one or the other specific objective and in the extent to which these can be achieved by the different options. In that sense, PO2 performs better than PO1 as it directly builds on the future certification, monitoring and reporting of CO2 emissions from HGVs and buses as outlined in the European Strategy for low-emission mobility. PO3b performs even better as in addition it links road pricing for passenger cars and vans to CO2 emissions. PO3a does not include this measure but is still ahead of PO2 by also allowing efficient marginal cost charging to deal with the issue of congestion, a major problem identified in the 2011 White Paper on Transport. Finally, PO4 performs best in terms of internal coherence as it is closest to the full application of the polluter pays and user pays principles, as set out in the White Paper.

Since the objectives are in line with those of relevant EU policies, including the Charter for fundamental rights (cf. section 4), in principle all options are also coherent with these as they point in roughly the same direction (the internalisation of external costs of transport through fair and efficient pricing). By promoting more proportionate pricing and stepwise harmonisation of road charging methods, all options contribute to achieving a Deeper and Fairer Internal Market, though because of its primary objective, the initiative is part of the actions aiming at creating a Resilient Energy Union with a Forward-Looking Climate Change Policy.

Even with the highest cost among the options, PO4 achieves the objectives most efficiently as it not only is the most effective but also generates largest revenues that outweigh any costs by far. PO3b comes second since it is more effective in achieving the objectives than PO2 and PO3a, albeit at the same cost.

·PO4 has the highest effectiveness, but also involves higher costs to authorities and users (due to the larger user base that would result from including passenger cars and vans in road tolls schemes).

·PO3b shows better cost-effectiveness than PO2 and PO3a, since it has similar costs but much higher effectiveness.

·PO2 and PO3a perform similarly in terms of cost-effectiveness, since they have similar costs and benefits – although PO3a has slightly better effectiveness and higher revenues.

As can be seen in Figure 7 4 , higher additional costs are generally associated with higher additional benefits and vice versa.

Efficiency can be defined as "the extent to which objectives can be achieved for a given level of resource/at least cost". The major costs of the policy options come in the form of higher direct transport costs, as well as the implementing and operational costs of the charging schemes. These additional costs can be balanced against the additional revenues generated by user charges, as well as the achievement of the objectives (outlined above).

In terms of effectiveness, PO1 and PO2 do not contribute significantly to the key objectives of reducing congestion costs and CO2 emissions from transport. Conversely, PO3a, PO3b and PO4 show average or good effectiveness against all of the objectives, with PO4 being slightly ahead of PO3 due to the wider scope of road tolls (after phase out of vignettes for vans and passenger cars) and mandatory inclusion of external cost charges. The key uncertainty with respect to all POs is that the introduction of tolls remains voluntary, which makes the ultimate outcomes uncertain.

Potentially most effective due to phase out of vignettes and phasing in of distance-based charges for passenger cars and vans, leading to infrastructure available for congestion charging in more countries (-2.5% to -6.1%)

Positive outcomes due to replacing vignettes by distance-based charging, but can be limited by the voluntary nature of external cost charging

Figure 7 3: Effectiveness of the policy options presents the effectiveness of each option in achieving the specific objectives using the key indicators.

The analysis of the overall effectiveness of the options must consider the extent to which the objectives are achieved. Figure 7 2 presents the key indicators which have been developed to monitor the level of achievement of the specific objectives.

Greater internalisation of external congestion costs & air pollution for bus/coach. Congestion charges are likely to be designed to be progressive / equitable to gain public acceptance

(0.5 to 0.6% reduction in external costs of pollution from road transport & 0.2 to 0.6% reduction in accident costs relative to the Baseline in 2030; €0.82 to 1.56 billion costs savings for air pollution and accidents by 2030, expressed as present value)

(0.5% reduction in external costs of pollution from road transport relative to the Baseline in 2030; €0.37 billion costs savings for air pollution and accidents by 2030, expressed as present value)

Small positive impact (0.4% reduction in external costs of pollution from road transport relative to the Baseline in 2030; €0.41 billion costs savings for air pollution and accidents by 2030, expressed as present value)

Small positive impact (0.3% reduction in external costs of pollution from road transport relative to the Baseline in 2030; €0.32 billion costs savings for air pollution and accidents by 2030, expressed as present value)

Highest uptake of tolls likely due to phase out of vignettes for vans and the phase in of distance-based charging for passenger cars. Mandatory external cost charging

As for PO2, plus allowing genuine congestion charging that would encourage more Member States to apply such charges on congested links

Minor positive impact on competitiveness due to differentiated CO2 charging for HGVs and buses, and also for passenger cars and vans, leading to slightly higher uptake of low- and zero-emission vehicles. Increased uptake of congestion charging would be beneficial to the competitiveness of businesses, especially those that make use of just-in-time manufacturing or in which goods are perishable, costly or difficult to warehouse.

In terms of social impacts, all policies can be expected to make some positive contribution, in particular through their job creation potential and by increasing the fairness of road user charges. PO3 and PO4 are expected to have more positive effects due to greater internalisation of external costs (contributing to fairness) and somewhat higher benefits for public health and safety.

In terms of environmental impacts, PO4 and PO4s would have the largest positive effect, while PO3a and PO3b would also have measurable impact. In any case, this initiative has to act in concert with other instruments aiming at reducing emissions from transport, such as emission standards (supply side) for air pollutants and CO2.

The analysis of economic impacts shows the most important differences. The main trade off is between the increased costs for transport users and to authorities, balanced against increased revenues and reductions in congestion costs and other externalities. There are also some potentially negative impacts in terms of distribution and impact on SMEs, as a result of increased costs, although these are minor in most options and small in PO4.

In addition, the expected generalisation of distance-based charging for HGVs and buses due to the phasing out of vignette systems (for PO2, PO3 and PO4), would make sure that hauliers are treated the same way when they use tolled roads in any Member States. This provision extends to the user of passenger cars and vans in PO4.

Estimating the magnitude of such impacts is challenging because data on the share of foreign road users that use short-term vignettes is limited. Available figures for selected Central and Eastern European Member States suggest that the estimated proportion of foreign car journeys on main routes is similar across the countries, with an average share around 30%. Hence, around 30% of road users in a typical country could benefit from more equal treatment under PO1-4.

Equal treatment of citizens refers mainly to the principle of non-discrimination. The main policy measure that is relevant is the proposed change to the rules on pricing of long-term versus short-term vignettes (included in all POs). The measure targets the problem of discrimination directly by ensuring that price ratios of short-term versus long-term vignettes are proportionate. Consequently, drivers using short-term vignettes in any Member State that introduces a new passenger car and/or van vignette will experience benefits in terms of more equal treatment under PO1-4.

Greater internalisation of external congestion costs & air pollution for bus/coach. Congestion charges are likely to be designed to be progressive / equitable to gain public acceptance.

Whilst not contesting the potentially negative impact of congestion charging on social inclusion, users tend to overestimate the costs road user charges represent for them. As an Australian transport expert put it, "in Brisbane people object to paying a AUS$4 toll to use a new tunnel beneath the city – but do not hesitate to purchase a cup of coffee for the same amount of money". Similarly, the increase in fuel prices between January 2009 and September 2012 increased the cost of the use of the vehicle on all roads and throughout the day by some 5 eurocents/km without considerably affecting accessibility and social inclusion.

Decisions regarding the design of such schemes would therefore have to be taken at the local level with the needs of lower income groups in mind. If new congestion charging scheme is perceived not to be equitable is likely to be rejected by the public in any case. Experience with urban road charging schemes show that where the system is well-designed and communicated to the public, after an initial period of reluctance, the public generally embraces the scheme when its positive impacts are becoming evident.

Congestion charging (PO3 and PO4) often raise equity concerns and has therefore been analysed in some depth. Different studies suggest that the social impacts of congestion charging depend on local conditions and that in the longer term winners and losers are difficult to identify as people change job or move house (Walker, 2011). Whether in our case it would have overall positive or negative social impacts would depend on the use of revenues, which would be earmarked to transport in both options, and could be used by Member States to invest in alternative solutions to the individual use of private car.

Road pricing could also benefit lower-income groups as higher-income individuals tend to drive the most. Furthermore, the negative effects of congestion, traffic safety problems and air pollution often affect lower income groups much more than the higher income groups (van Amelsfort et al, 2015). The overall impact of all POs on mobility and outcome equity is considered to be low.

While road pricing may disproportionately affect lower-income groups, the magnitude of impacts is expected to be negligible. For the case of PO1-2, no new tolls are introduced for passenger cars, so the policy measures would only result in very minor, if any, changes in their costs. The impacts would also be limited in PO3. For PO4, the impact depends on the phasing in of the distance-based charges for passenger cars, however, even in this case the impacts are small – annual toll charges typically amount to small share (i.e. around 2%) of the total annual ownership cost of a car.

The impact assessment support study has looked at different concepts of equity to consider the potential impacts. The findings suggest that greater implementation of the 'user-' and 'polluter-pays' principles have greater market equity compared to the current situation, as they place the primary responsibility for payment on those responsible for the use/pollution, and not on those too poor to afford vehicles or who choose to travel by other means (NTPP, 2010).

Distributional effects could potentially arise from any of the policy options, since they imply changes to the cost of transport. As seen in section 6.1.1 the potential for changes in freight costs to affect consumers via cost pass-through to increased product prices is rather limited; hence, the main element of relevance to distributional effects are changes to the costs of passenger transport.

(0.5 to 0.6% reduction in external costs of pollution from road transport & 0.2 to 0.6% reduction in accident costs relative to the Baseline in 2030; €0.82 to 1.56 billion costs savings for air pollution and accidents by 2030, expressed as present value)

(0.5% reduction in external costs of pollution from road transport relative to the Baseline in 2030; €0.37 billion costs savings for air pollution and accidents by 2030, expressed as present value)

Small positive impact (0.3 to 0.4% reduction in external costs of pollution from road transport relative to the Baseline in 2030; €0.32 to 0.41 billion costs savings for air pollution and accidents by 2030, expressed as present value)

In addition, congestion charges have been associated with the reduction of accidents. Better quality of roads thanks to the reinvestment of at least part of the additional toll revenues in road maintenance can have further positive impacts on road safety (cf. section 2.1.2), but no data exists which would allow quantifying these impacts. Overall, the impacts on public health would be small but positive in all scenarios.

The impacts on public health are directly linked to the foreseen reduction in emissions of air pollutants from road transport such as CO, NOx, volatile organic compounds (VOC) and particulate matter (PM); any possible change in noise levels, and in the risk of accidents. Given the limited impact on total road transport activity, on modal split and vehicle fleet composition at EU level compared to the Baseline in 2030, the model indicates small reductions in pollutant emissions from road transport for the policy options (see section 6.2.2). However, congestion charges (PO3 and PO4), leading to more important reductions in local traffic and pollution, can have a more significant positive impact on public health in the concerned areas. As noted in section 6.2.2, the road network model does not take into account possible traffic bans for certain type of vehicles on secondary roads. The diversion to these non-tolled roads is thus overestimated suggesting relatively higher levels of air pollution in more sensitive areas.

It needs to be underlined that the job creation potential has been estimated assuming that Member States reinvest 30% or 100% of revenues from new road charges (additional road charges to the Baseline in 2030) into transport infrastructure; in case some revenues are used for compensating measures, such as reduction of transport related taxes, the number of jobs created would be proportionately lower.

The Impact Assessment accompanying the proposal on TEN-T guidelines included the job creating potential of public spending on transport infrastructure. According to a conservative estimate, the investment of EUR 1 billion would generate 21,260 new direct, indirect and induced jobs. Using this figure, Figure 6 15 presents the estimated potential of the policy options to create new jobs in the EU economy.

The impact of the options on employment levels depends on the extent to which increases in transport costs affect the competitiveness of businesses, and on the extent to which increased revenues are reinvested. The impact of transport costs were simulated by the ASTRA model, showing no significant impact in all policy options. The second-order effects of investing revenues in road maintenance are estimated based on literature. The results are closely linked to the estimated benefits described in section 6.1.8. As such, PO1 would have virtually no impact on employment, while in the other options the reinvestment of revenues from road tolls can generate jobs.

Costs in terms of habitat loss and fragmentation have been estimated to € 49-110 thousand per year for each kilometre of motorway (CE Delft, 2008). To the extent that policy options can shift transport activity to other modes and reduce congestion by spreading traffic more evenly and thus making more efficient use of the infrastructure, it can be expected that they would reduce the need for building new or expanding existing motorways and hence would have a positive impact compared to the Baseline. PO1 would not have a significant impact, while all other policy options would have some positive effects with respect to reducing road transport activity. PO3 and PO4 would have an additional benefit in terms of greater deployment of congestion-reducing schemes.

For PO3 and PO4, the inclusion of congestion charging on the congested part of the inter-urban network is projected to result in an increase of 0.8 to 4.1% in noise cost, due to diversion of traffic to non-tolled roads. However, since congestion charging would be voluntary, it is reasonable to assume that Member States would only implement such schemes after thoroughly assessing local conditions and accompanied them with adequate complementary measures mitigating any undesired traffic diversion (such as improving access to alternative transport modes, limiting transit traffic on secondary roads or charging during peak hours). The impacts on noise levels are therefore considered to be the upper bound in case complementary measures are not taken by the Member States. As noted in section 6.2.2, the transport network model does not take into account possible traffic bans for certain type of vehicles on secondary roads. The diversion to these non-tolled roads is thus overestimated, suggesting higher noise costs.

Linked to the extent of modal shift and possible traffic diversion, there may be some impacts on the external costs of noise generated by road transport. Under PO1, since there could be some diversion of traffic to secondary roads (where the cost of noise is higher), a marginal overall increase is projected relative to the Baseline in 2030 for some Member States (i.e. this is largely due to the inclusion of HGVs below 7.5 tonnes in the distance-based charging scheme in Germany). However, at EU level the impacts on the external costs of noise relative to the Baseline are not significant in 2030. In PO2, a slight increase in noise costs (0.4% relative to the Baseline in 2030) would take place due to the wider application of distance-based charges for HGVs and buses on the TEN-T network and on motorways. It is important to note that the transport network model does not take into account possible network-wide introduction of distance-based charges that would prevent any diversion of traffic to alternative routes.

It is important to note that the transport network model used to simulate the changes in traffic flows does not take into account existing and possibly extended traffic bans for certain type of vehicles on secondary roads. The diversion to these non-tolled roads may thus be overestimated and the real air quality improvements could be greater, especially in cases where Member States implemented network-wide distance-based charging, which would prevent traffic diversion.

Changes in air pollution generated by road transport would also depend on the extent to which the options can induce modal shift and fleet renewal. PO1 has no noticeable impact on NOx and PM emissions while PO2, PO2s and PO3a would reduce emissions of NOX from road transport by 1% at EU level compared to the Baseline in 2030 (i.e. 6,774 to 6,796 tonnes of NOx saved in PO2 and PO2s and 6,911 tonnes of NOx saved in PO3a); the impact on PM emissions would be lower (0.2% reduction relative to the Baseline, equivalent to 79 tonnes of PM saved in PO2 and PO2s and 82 tonnes of PM saved in PO3a). PO3b, with the introduction of modulation of charges according to pollutant emissions for vans and passenger cars, would have a slightly larger impact (1.2% reduction in NOX equivalent to 8,254 tonnes of NOx saved, and 1% reduction in PM equivalent to 352 tonnes of PM saved) relative to the Baseline in 2030. The reduction is even more pronounced in PO4 and PO4s (1 to 1.4% reduction for NOx equivalent to 8,461 to 9,345 tonnes of NOx saved and 1 to 1.2% reduction for PM equivalent to 360 to 423 tonnes of PM saved), thanks to the extension of distance-based charging to vans and passenger cars. The external costs of air pollution are discussed in section 6.3.2.

Overall, PO2, PO3 and PO4 would lead to around 17.4 to 17.9% CO2 emissions reductions from road transport by 2030 relative to 2005 compared to 17.2% in the Baseline scenario (i.e. a reduction higher by 0.2 to 0.7 percentage points).

As explained in section 2.1.1, the analytical work underpinning the European Strategy for Low-Emission Mobility showed cost-effective emissions reductions of 18-19% for transport by 2030 relative to 2005. For road transport, this translates into a cut of about 206-221 Mtonnes of CO2 by 2030 relative to 2005, 52 to 67 Mtonnes additional reduction relative to the Baseline. As explained above, PO2, PO3, and PO4 could save 2,490 to 7,100 ktonnes of CO2 emissions. This represents between 4 to 14% of the additional road transport emission reductions needed on top of the Baseline by 2030 relative to 2005. Monetising them, this translates into €0.3 to 0.7 billion of external costs savings by 2030 expressed as present value.

The differentiation of charges for vans and passenger cars under PO3b, PO4 and PO4s would drive changes in the composition of the fleet, resulting in a reduction of road diesel consumption of 1.3 to 1.8% and an increase in the use of electricity in road transport of 3.3 to 3.4% relative to the Baseline in 2030. In addition, in PO4 and PO4s, the phasing in of distance-based charging for vans and passenger cars further increases the CO2 reduction potential. These changes would result in a reduction of CO2 emissions from road transport of 0.5% in PO3b and 0.7 to 1.0% in PO4 and PO4s relative to the Baseline for 2030 (i.e. 3,812 ktonnes of CO2 emissions saved in PO3b and 4,765 to 7,100 ktonnes saved in PO4 and PO4s).

PO2, PO2s and PO3a introduce the differentiation of infrastructure changes according to CO2 emissions for HGVs and buses. In addition, the generalisation of distance-based charges for HGVs and buses has somewhat larger effect on modal shift (i.e. 0.1 to 0.2 percentage point decrease in road freight modal share in 2030 relative to the Baseline) but this remains limited. Most of the impacts are thus driven by changes in fleet composition due to the modulation of charges. As noted in section 6.1.8, a shift away from diesel can mainly be observed among vehicles below 12 tonnes (to hybrids and LNG trucks) and to a more limited extent for vehicles above 12 tonnes. This would result in a small reduction of 0.4% in road transport CO2 emissions (i.e. 2,490 to 2,505 ktonnes of CO2 emissions saved in PO2 and PO2s and 2,878 ktonnes of CO2 emissions saved in PO3a) relative to the Baseline in 2030.

The impact of policy options on CO2 emissions depend on changes in transport activity and in the share of low- and zero-emission vehicles in the fleet compared to the Baseline. PO1 has no impact on HGVs fleet composition (the rebates applied to zero-emission vehicles alone would not have noticeable effect) and induces a marginal shift of traffic from road to rail transport (i.e. 0.1 percentage point decrease in road freight modal share in 2030 relative to the Baseline). Consequently, it has no significant impact on fuel consumption and road transport CO2 emissions (157 ktonnes of CO2 emissions saved) relative to the Baseline in 2030.

Hauliers from Russia, Turkey, Ukraine and the Balkans, who are some of the EU’s main commercial partners, are most likely to be impacted by the small increases in transport costs under PO2, PO3 and PO4. However, they are not likely to be more affected than European operators established in peripheral regions, as described in section 6.1.7.

Third country residents would benefit from proportionate pricing of short term vignettes under each policy option as any occasional EU driver (see also section 6.3.4). By having access to proportionately priced vignettes for shorter time periods, users are more likely to consider single day leisure or business trips across borders encouraging cross border trading, commuting, commercial or social trips. Where a Member State would replace their vignette scheme by distance-based charging (in PO4), the increase in transport costs would be the same for third country residents as for EU nationals.

In addition, in PO2, PO3 and PO4 more consistent price signals would be achieved through the phasing out of Euro class differentiation allowing more extensive use of external cost charging. PO3 and PO4 would add further benefits by allowing freer traffic flows by internalising the cost of congestion.

Since road pricing across the EU becomes more consistent under each option (to an increasing extent from PO1 to PO4), the transport sector as well as other sectors relying on transport services will face similar or at least proportionate costs when making use of the European road network. In this sense, PO1 will ensure minimal progress by eliminating exemptions and making all HGVs and buses subject to charging, while in PO2 and PO3, the level playing field will be further ensured for HGVs and buses due to generalised distance-based charging. PO4 will have the most positive impact as distance-based charges would also apply to vans and passenger cars.

Tolls and user charges reflect a part of real costs that transport users generate in relation to infrastructure and other externalities. Unless these real costs of transport are paid by users, they will have to be borne by society through other instruments such as taxes. However, road user charges are more efficient – by sending the correct price signals: user charges can shape more sustainable transport behaviour, e.g. re-directing road users to acquiring and using cleaner vehicles or using the roads outside peak hours. Moreover, distance-based charges are paid by users independent of their country of establishment (unlike time-based vignettes or vehicle taxes).

The measures designed to promote low- and zero-emissions HGVs and buses (PO2, PO3 and PO4), and low- and zero-emission passenger cars and vans (PO3b and PO4) would have a positive impact on the automotive industry as they would speed up fleet renewal. According to the modelling results, in 2030 the share of hybrid HGVs below 12 tonnes at EU level would be about 3.6 percentage points higher in PO2, PO2s, PO3, PO4 and PO4s than in the Baseline scenario. For heavier HGVs the impact would be smaller (i.e. the share of hybrid HGVs above 12 tonnes would be 2.2 percentage point higher relative to the Baseline) but positive. These measures would also drive a slight increase in the share of LNG HGVs in PO2, PO2s, PO3, PO4 and PO4s (around 0.7 percentage points increase in 2030 relative to the Baseline). In PO3b, PO4 and PO4s the differentiation of charges according to CO2 emissions additionally targets the fleet of passenger cars and vans, resulting in a slightly higher uptake of conventional hybrid (0.2 percentage points) and electric vehicles (0.2 percentage points) in 2030 relative to the Baseline, to the detriment of conventional diesel vehicles. The structure of the vehicle fleet in PO1 would be similar to the Baseline.

Even under scenarios of 100% cost pass-through to customers, any reduction in the competitiveness of European manufacturing products on the global market would be minimal in all Policy Options. PO3 and PO4 would have more positive impact as congestion charging will improve the reliability of deliveries, which can allow keeping smaller stocks, and thus will be beneficial the competitiveness of businesses, especially those that make use of just-in-time manufacturing (where delays can cost much more than just the truck delay) or in which goods are perishable, costly or difficult to warehouse.

As shown in section 6.1.1, all policy options would affect transport operators in a limited way through a slight increase in transport costs but this would not have a significant impact on the EU economy. The reinvestment of revenues from road charging would bring economic benefits, as described in the previous section. Indirectly, operators who chose to adapt their behaviour to improve their efficiency would gain a competitive advantage, as well as contributing to the overall competitiveness of the EU economy.

In addition, there will be positive impacts stemming from the reduction of negative externalities in PO2, PO3 and PO4 (cf. section 6.3.2); as well as from reducing the dependence on oil as shown in Figure 6 14 , which is mostly imported.

At Member State level, the impacts may be larger depending on the size of the Member State and specific measures implemented. For example, in Slovenia the benefits could be higher due to the application of mark-ups; in this case the revenues must be reinvested to remove bottlenecks on the TEN-T network.

The direct impact of road charging at macro-economic level is small due to the relatively low share of road charges in transport operation costs and even lower share in product prices (cf. section 6.1.1). The evaluation performed with the ASTRA model does not take into account the possible reinvestment of at least part of the additional toll revenues (relative to the Baseline), which, if used for the maintenance of roads typically generates 2 to 3 euro for each invested euro. The results therefore do not reflect possible positive second order effects. The modelling results show very limited impacts (below 0.1% relative to the Baseline in 2030) on GDP at EU level in case of PO1, PO2 and PO3. PO4 and PO4s would result in 0.1% decrease of EU GDP in 2030 relative to the Baseline, in case no reinvestment of toll revenues is assumed. If 100% of the additional revenues relative to the Baseline were reinvested in road maintenance, the economic benefit generated at EU level would be in the range of €6.1 billion (PO1) to €190.2 billion (PO4s), equivalent to 0.04 to 1.2% of GDP in 2030. However, if only 30% of the additional revenues relative to the Baseline were reinvested in road maintenance, the economic benefits would be more limited, in the range of €1.8 billion (PO1) to €57.1 billion (PO4s), equivalent to 0.01 to 0.36% of GDP in 2030. Effects on employment are described in section 6.3.1.

Peripheral regions could face a marginal increase in the costs for their imports and exports that in the short run may not be compensated by the increase in welfare from the reduction of externalities in the region. Overall, any negative impacts are expected to be small.

Congestion charging would have additional impacts in PO3 and PO4. Since inter-urban congestion has not been studied as extensively as urban schemes, a parametric assessment of the relationship between accessibility and local/regional impacts quantified according to literature was performed as part of the impact assessment support study. The analysis found that congestion charging can have an effect of between -1.1% and +1.0% on regional GDP, depending on the case (but can be slightly negative or positive in each case). The impact would be largest and most likely positive in more congested areas such as around major economic centres. It seems plausible to assume that Member States would only implement congestion charging where local conditions justify it. Overall impacts would be small but increasing from PO1 to PO4 as shown in the table below.

Desk research of studies on existing tolls across Europe indicates that regional impacts are small, and not necessarily clearly negative. Specifically, studies on the German toll and those conducted in Sweden and Switzerland (mountain regions) found that the impacts of tolls on businesses were insignificant (thanks to the relatively small share of road charges in the total cost of operation). In any case, lower level roads giving access to remote regions with no alternative transport solution are generally not tolled, while in the case of long distance travel there are usually different options to choose from. It can therefore be concluded that greater uptake of road tolls/external cost charges will result in small or negligible negative impacts for peripheral economies in relation to central regions.

Road pricing affects central and peripheral regions differently. While centrally located Member States are most affected by the negative impacts of transit traffic, they have the possibility to collect the corresponding higher amounts of revenues to mitigate those impacts (e.g. through external cost charging following the phasing out of differentiation according to Euro class in PO2, PO3 and PO4). At the same time, businesses (and to a lesser extent citizens) located in peripheral Member States can face higher overall costs from road charges depending on their choice of route but they are also the ones who make most use of the infrastructure and thus cause more environmental damage (they would not pay more per km). Looking simply at who pays more between central and peripheral Member States would only show one side of the coin.

Annex 12 provides more information on the possible impact of specific measures designed to ensure better road quality and synergies with the main policy packages.

Based on the latest infrastructure maintenance plan of Germany, the yearly expenses necessary to keep main national roads in stable condition would amount to roughly €61 billion for the EU in 2030. This, compared to projected revenues gives an indication of the expected quality of roads. Figure 6 11 presents the difference compared to financing needs under each policy option. It appears that only in the case of PO4 would toll revenues cover all maintenance needs, thereby raising sufficient funds for developing alternatives to congested road transport.

Since Member States tend to allocate at least part of the toll revenues to the maintenance of roads, the level of the collected revenues can serve as a proxy indicator. Thus, it is assumed that if more revenues are collected from road charges, the quality of the corresponding network would improve. Under this assumption, PO1 would have very limited to no impact on road quality, while the subsequent options (PO2-3-4) would have increasingly positive impact thanks to the increasing amount of toll revenues. Since revenues from congestion charging would have to be allocated to investment in transport, the positive impact in PO3 and PO4 would in principle be greatest.

Overall compliance costs by 2030, expressed as present value, would be €889 to €1,027 million for PO2 and PO3 and €1,070 to €1,371 million in PO4 (€3,698 million if passenger cars were equipped with OBUs).

It is assumed that passenger cars are not required to equip with OBUs (but may do so voluntarily, as a matter of convenience, as is the case today in France and Italy etc.). The impact of PO4 and PO4s on costs to road users is evaluated at €8 million yearly from 2020 (the assumed year of introduction of the new Bulgarian system) to 2025 and at €320 million yearly from 2025 onward, when the other Member States would have to adapt their charging systems. If passenger cars were equipped with OBUs, the annual cost would be €850 million. Detailed calculations are provided in Annex G of the impact assessment support study.

·15€ yearly per OBU, for OBUs provided by EETS providers, which corresponds to the extension to a new MS of the fees paid by users contracting with EETS providers.

Apart from increased transport costs shown in section 6.1.1, the main costs to road users relate to the on-board unit (OBU) procurement costs and related compliance costs. These are calculated based on the findings of the Support study for the Impact Assessment for the Revision of EETS Legislation. The overall costs to users in PO4 is higher compared to PO2 and PO3 because of the large number of additional vehicles that are under the scope of the toll schemes (i.e. due to the relatively larger fleet of vans and passenger cars compared to HGVs and buses); however, the unit costs are the same, composed as follows:

Figure 6 9 provides the overall impact on Member States budges over time by considering the present value of revenues from road charges and of the total investment and operation costs to authorities. The balance is positive for all policy options.

The investment expenditures of €1.2 to 1.4 billion in PO2 and PO3 and €1.3 to 2.1 billion in PO4 are assumed to take place in 2025, in line with the assumed introduction of distance-based charges. Figure 6 8 shows the impact on Member States budgets in 2030, considering the additional revenues from road charges relative to the Baseline and the costs to authorities in 2030.

For Member States choosing to introduce new road tolls, this result in an initial investment cost of around €150 million (€82 million to €232 million, depending on the size of the country) and ongoing maintenance/enforcement costs of around €20 million per year (€9 million to €41 million). These costs would be largely counterbalanced by increased revenues from road user charges in all cases, which would be significantly greater than the ongoing costs.

The costs were estimated using reference countries for which the system costs are well-understood. It was assumed that countries with a larger tolled network would, in most cases, choose GNSS, whereas those with smaller ones would generally opt for DSRC:

Under PO1, additional costs would not be significant as no new system would be implemented. The costs of PO2 and PO3 would be similar, driven by the replacement of vignette systems with distance-based tolls within 5 years for HGVs and buses. PO4 has the highest cost because of the assumed extension of distance-based systems to passenger cars and vans in some Member States as a result of phasing out time-based charging.

The setup of new electronic distance-based road charging systems induces considerable costs. For DSRC systems, roadside infrastructure constitutes the heaviest cost element: a gantry must be installed on each stretch of road at a cost of around €150,000. For satellite based systems, on-board units (OBUs) are the most important setup cost element: an OBU for a satellite-based road charging scheme will cost between EUR 90 and EUR 150. While exact cost structure depends on the specific network covered, as a general rule satellite-based systems are more economic when a larger network is to be covered (over 1000 km) and building roadside infrastructure would be very expensive.

The modelled increases in revenues does not take into account any possible reduction in vehicle taxation, by which Member States might want to compensate for the higher costs attached to the introduction or extension of road charging.

The level of revenues from road charging in the Baseline and PO1 to PO4 by Member State is provided in Figure 6 6 .

PO4 and PO4s will generate most revenues (60 to 160%) with the phase in of distance-based schemes for vans and passenger cars in Member States applying road charges.

Under PO3a and PO3b, revenues would further increase by 25 to 28% compared to the Baseline in 2030 thanks to the application of congestion charges in eight Member States. Overall increases are largest in Greece, Italy and Poland (over 20%), with significant increases (over 10%) in Portugal, Spain and France.

In PO2 and PO2s, revenues would be larger thanks to the generalised application of distance-based tolls to HGVs and buses. In this case, overall revenues increase by 15% at EU level, with the entire burden borne by HGVs and buses. The impact on specific Member States would be different depending on whether they already have distance-based charging in place or not. For example, larger increases would take place in Member States that have treated buses differently so far (e.g. 58% increase in total toll revenues in Germany in 2030 relative to the Baseline, 23% increase in Belgium and 13% in Hungary). For Member States which do not currently have distance-based charging in place, increases in revenues vary between 32% in Romania and can reach up to a 19-fold increase in Luxembourg.

The measures to promote low and zero-emission vehicles (all POs) may benefit SMEs less in the short-term compared to larger firms, since SMEs may face more difficulties in making the upfront investment for more expensive low CO2 vehicles. If SMEs are less able to purchase or lease low CO2 vehicles, they would initially benefit less from the measure compared to a larger firm. However, in the longer term it can be expected that the price of electric vehicles will reduce (Wolfram & Lutsey, 2016), making the upfront investment less of a barrier. Furthermore, SMEs typically buy their vehicles on the second-hand market (BCA, 2012). If the measure stimulates additional first-hand purchases of zero-emission vehicles, these would eventually reach the second-hand market and SMEs will also benefit from having access to zero-emission vehicles.

Introducing congestion charging would also likely impact the small firms, which may have no choice but to drive in peak hours because they have to maximise utilisation of their vehicles (Mahendra, 2010). At the same time, the same firms would benefit from lower congestion, which would result in time savings and an effective increase in the catchment area for the business. Given limited experience with inter-urban congestion charging, it is difficult to say what the net impacts would be – however, evaluations of the London congestion charge found no discernible impact on businesses (TfL, 2008), suggesting that more limited, targeted interurban congestion charging foreseen in PO3 and PO4 would not have significant impacts on SMEs (positive or negative).

Close to 100% of firms in the road freight sector are companies with fewer than 250 employees, while 90% are micro-enterprises (Eurostat, 2017). The proposed policy measures are likely to involve small increases in the costs of transport (see Section 6.1.1) due to the introduction of new road tolls in certain Member States and the greater use of external cost charges (under PO2, PO3 and PO4). However, because of very small profit margins in the road haulage sector, most of those increases (see Figure 6 1 ) would be passed through to shippers as indicated above (on average max. 1.5 to 2% increase in road freight costs in PO4 and PO4s in 2030 relative to the Baseline). As such, it is expected that increased transport costs in all policy options could only have minor negative impacts on SMEs; they may be less able to absorb additional costs, but no substantial distortions are expected.

Benefits resulting from congestion costs savings relative to the Baseline over time, represented as present value in 2015, are projected to be significant in PO3 and PO4 (i.e. €8.8 billion in PO3a, €8.9 billion in PO3b, €9.1 billion in PO4 and €22.2 billion in PO4s) while they are more limited in PO1 and PO2 (i.e. €0.1 billion and 0.8 billion).

Under PO2 and PO2s road congestion cost at EU level would only be marginally affected (0.2% reduction in 2030 relative to the Baseline) with a slightly more important decrease for HGVs (1.5% decrease) thanks to the generalised application for them of distance-based charging. HGVs delay costs from congestion would decrease by 3 to 7.1% in Belgium, Denmark, the Netherlands, Slovakia and the United Kingdom in 2030 relative to the Baseline (0.7 to 1.7% decrease for overall road transport). Substantial decreases in road congestion costs (i.e. for passenger cars and HGVs) at EU level are only projected under PO3 (2.4% reduction in PO3a and 2.5% reduction in PO3b in 2030 relative to the Baseline) with the positive effects felt in those Member States in which congestion charging can be applied as all vehicles are charged per km (such as Greece, France, Italy, Poland and Portugal), and in PO4 and PO4s (2.5 to 6.1% reduction), under which vans and passenger cars are charged by distance and Member States can apply congestion charging on congested sections of the network.

In PO1, the level of charges would only change for the use of HGVs between 3.5 and 12 tonnes as explained above, which would result in a reduction of the HGVs delay costs from congestion of about 0.1% at EU level in 2030 relative to the Baseline (0.4% decrease in Germany). In areas with acute congestion, where significant environmental damage is caused by heavy traffic and mark-ups are applied for HGVs to finance the construction of alternative transport infrastructure (e.g. in France and Slovenia), there would be some limited redistribution of HGVs traffic on the adjacent network (1% reduction in Slovenia for HGVs delay costs in 2030 relative to the Baseline and 0.2% decrease in France). However, the overall road congestion costs at EU level (i.e. delay costs from congestion for passenger cars and HGVs) in PO1 are similar to those in the Baseline.

The level of road charges has an impact on the behaviour of road users, which can be affected in different ways: route shift, modal shift and travel frequency reduction. Time-differentiated charges also result in travel time shift.

The extent to which the above cost increases for road freight would result in increased consumer prices depends on the extent to which road charges make up a significant proportion of the final costs (0.01 to 1.43% for typical consumer goods), and the extent to which cost increases faced by hauliers are passed through. Even if 100% of cost increases are passed through to shippers, an assumption which is consistent with studies in Germany, Austria and Switzerland, the impact on consumer prices would be negligible. According to the impact assessment support study, the average increase in product prices would be in the range of up to 0.02% for PO1 and up to 0.25% for PO4.

For passenger transport, the modelled increase in transport costs does not take into account any possible reduction in vehicle taxation, by which Member States might want to compensate for the higher costs attached to the introduction or extension of road charging to passenger cars and buses. The results of the modelling show therefore potentially larger increase in costs than what motorists might face in reality.

Source: ASTRA model; Note: Road passenger transport costs cover fuel costs and road charges applied for cars, buses and coaches. For the Baseline, the levels of road transport costs are provided for 2030, expressed in euro per passenger-kilometre (euro/pkm).

Source: ASTRA model; Note: Road freight transport costs cover fuel costs and road charges applied for HGVs and vans. For the Baseline, the levels of road transport costs are provided for 2030, expressed in euro per tonne-kilometre (euro/tkm).

In PO3, the possible application of congestion charging on the inter-urban network in those Member States where this is allowed (i.e. Greece, Spain, France, Croatia, Ireland, Italy, Poland and Portugal) would be expected to lead to a slight increase in road transport costs for both freight and passenger transport (0.1 to 0.6%) relative to the Baseline in 2030, except for those Member States where the assumed congestion charge is similar to the current (relatively low) level of infrastructure charge. The effects would be felt in areas where congestion charging is deployed (if a Member State decides so), i.e. around major agglomerations where local traffic meets long distance (mainly freight) transport. Overall, at EU level, road freight transport costs would increase by 1.0 to 1.1% in 2030 relative to the Baseline in PO3 and road passenger costs by up to 0.1%.

In PO2 and PO2s, increases in road freight transport costs would be more significant (i.e. 0.9 to 1.0% in 2030 relative to the Baseline at EU level leading to around 0.2% decrease in road freight activity) since all Member States that already have a charging system in place for HGVs would have to apply distance-based tolls to all HGVs. The increases in road freight transport costs are projected to range between 1.1 and 3% in Denmark, Estonia, Finland, Latvia, Luxembourg, Lithuania, the Netherlands, Romania, Sweden and the United Kingdom to over 3% in Bulgaria, where current vignette prices are very low (see Figure 6 1 ). The phasing out of vignettes for buses and their replacement with distance-based tolls would results in 0.1 to 0.2% increase in road passenger transport costs in Bulgaria, Denmark, Finland, Hungary, Romania, Sweden and the United Kingdom, with no significant impact on road passenger transport costs and activity at EU level (see Figure 6 3 and Figure 6 4 ).

The most significant increase in road freight costs (2.3% in 2030 relative to the Baseline) would take place in Germany, where the distance based charging system is extended to HGVs below 7.5 tonnes and the external costs charges for air and noise pollution would apply to all HGVs (see Figure 6 1 ). In other Member States where road charging would be extended to all HGVs (i.e. Denmark, Luxembourg, the Netherlands, Sweden), smaller increases in road freight costs are projected (between 0.2 to 0.5% in 2030 relative to the Baseline); impacts are negligible in the UK given the possibility to deduct the vignette price from taxes. In Austria the application of higher external cost charges (i.e. for air and noise pollution) for HGVs would increase road freight transport cost by 0.8% in 2030 relative to the Baseline. The application of mark-ups would lead to a 0.5% increase in road freight transport costs in Slovenia in 2030 relative to the Baseline, while the impact would be more limited in France (0.1% increase). Overall, at EU level PO1 would result in 0.2% increase in road freight transport costs in 2030 relative to the Baseline and 0.1% reduction in road freight transport activity (see Figure 6 2 ). The extension of road charging to buses would not have a significant impact on road passenger transport costs and activity in PO1 (see Figure 6 3 and Figure 6 4 ).

The deployment of new tolling schemes and higher toll levels would increase the direct costs of both passenger and freight road transport (not taking account of the indirect savings accruing from better roads and less congested traffic).

·The main economic, social and environmental impacts of these policy choices are summarised in the following section. A full description of quantifiable effects at national level for each policy option is provided in the impact assessment support study (see Annex A). Unless indicated otherwise, quantifiable impacts are expressed in percentage changes for each policy option in 2030 compared to the Baseline.

·For each policy option, assumptions on the changes in Member States responses to specific policy measures were made; they are described in Annex 4, section 4.3 (see Tables 4-1 to 4-13), and have been used as input for modelling. The proposed changes are assumed to be applied in full to the schemes that are already in place. That is, in case a Member State currently applies time-based charging and this possibility is phased out, it is assumed that it will apply distance-based charging in order to cover infrastructure costs. The alternative solution for such a Member State would be to cover the loss of revenue by increasing taxes (a plausible example is provided in Annex 3), but this decision is not possible to predict.

·A model suite has been used for the analytical work, combining the strengths of three different models: ASTRA, PRIMES-TREMOVE and TRUST. The model suite covers the entire transport system and the macroeconomic impacts. A description of each model and its use is provided in Annex 4, section 4.3.

·Quantifying the impacts of such optional rules requires making assumptions on the uptake of road charging by Member States. These assumptions carry important uncertainties; the decision of France to abandon the deployment of its network-wide distance-based tolling for HGVs (the so called Ecotaxe) just before its launch is an example of how national policy orientations can change unexpectedly. Denmark and the Netherlands had similar plans to introduce distance-based tolling for HGVs but they have also shelved them. For this reason, quantification, including modelling results, will only be used to indicate the scale of foreseeable impacts rather than their exact estimation. Two additional sensitivity cases (PO2s and PO4s) have been quantified for illustration purposes.

·Directive 1999/62/EC does not oblige Member States to introduce road charging on their TEN-T or motorway network. All policy options would maintain the same approach.

Sensitivity cases (PO2s and PO4s) are not shown in the table above because they include the same measures as the main policy options (PO2 and PO4, respectively), while only extending the implementation of the measures to few additional Member States. Details are available in Annex 4 (section 4.3).

Make external cost charging (for air pollution and noise) mandatory for HDVs on the tolled TEN-T (charges are applied on top of infrastructure costs)

Since other possibilities than revising the existing legislation have been ruled out (business as usual or soft law), the measures have been packaged in a way to put more or less emphasis on the different objectives while addressing passenger and freight transport. At the same time, truly alternative options (e.g. addressing only freight or only passenger transport) are not viable if all the objectives are to be addressed. The options show therefore a cumulative pattern, which allows assessing the effects of key measures, which differentiate them, and gauging the desired level of ambition.

A general comment from the consultation was that the more restrictions were imposed on charging by the Directive, the less likely it was that a Member State would voluntarily implement a charging scheme, in spite of its potential benefits. This option, if selected, should be implemented with special care. The fact that it would bring HGVs and LDVs on a more level playing field was applauded by some stakeholders, including road transport associations and environmental organisations, while Member States are divided regarding the inclusion of vehicles lighter than 3.5t.

A sensitivity case (PO4s) is provided for PO4 where the measures explained above are additionally extended to Belgium, Germany, Luxembourg and the Netherlands, to illustrate possible effects when distance-based charging is applied to all vehicles in all centrally located Member States (i.e. those with highest levels of transit traffic).

SO2, SO3 and SO4: Contribute to adequate quality of roads, ensure fair road pricing and make use of road charging as an effective tool in reducing air pollution, noise and congestion:

While not obliging Member States to apply road charging, this is the most ambitious option as it extends the requirement to use distance-based tolling only to all vehicles, including passenger cars, while making external cost charging mandatory for heavy duty vehicles (HGVs above 3.5 tonnes and buses/coaches). The concrete measures would include measures of PO3b plus:

The stakeholder survey suggested that any legislation introduced should not be focused solely on HGVs, but on all road vehicles including both freight and passenger transport based on the polluter pays and user pays principles. While different options on congestion charging were met with scepticism, stakeholders agreed that if congestion charging was applied, it should cover all vehicles, not just HGVs. The proposed optional measure is in line with this view.

-Introducing a mandatory differentiation of tolls and user charges (i.e. both distance- and time-based) for LDVs (vans and passenger cars) from 2020 when Member States apply road charging. Distinction would be made between different emission classes based on WLTP for CO2 and based on real driving emissions (RDE) testing for pollutant emissions (NOX). In order to provide a coherent price signal and have an effective impact, Member States would be required to differentiate tolls accordingly.

SO1 and SO4: Contribute to the reduction of CO2 emissions in transport and make use of road charging as an effective tool in reducing air pollution (only in PO3b):

The Directive would require the revenues generated by congestion charging to be invested in the maintenance/development of the road in question or alternative transport/mobility solutions. This could raise the level of acceptability of an extra charge by users.

-Allowing (optional) genuine congestion charging on top of the infrastructure charge in distance-based environment, on congested parts of the network, for all vehicles (LDVs + HDVs) – such a congestion charge, should Member States decide to implement it, would apply to all vehicles (LDVs and HDVs) according to their size.

SO4: Make use of road charging as an effective tool in reducing pollution and congestion (in both PO3a and PO3b):

With a view to tackle the issues, which are related to primarily to light vehicles, this option includes additional measures for cars and vans, addressing interurban congestion as well as CO2 and pollutant emissions from all vehicles. The measures included in this option are described below, in addition to the measures of PO2.

The phasing out of vignette schemes for HGVs is supported by many, including environmental NGOs, and representatives of the railway sector but also a number of Member States and operators, even though some Member States still operating such schemes would oppose this.

The promotion of low-CO2 vehicles has not met any notable opposition by stakeholders. While some Member States would prefer to keep the flexibility of opting in or out, others indicate that such a measure can only be effective if applied coherently. In practice, once CO2 emission certification data is available, the new scheme could replace the current differentiation based on Euro class, which will become obsolete by then.

A sensitivity case (PO2s) is provided for PO2 where the measures explained above are additionally implemented in Estonia and Finland. These two Member States plan to introduce road charges in the future but they do not qualify for being included in the Baseline because, at the time of preparing the impact assessment, the plans have not yet been adopted.

Since external cost charging would be made simpler (as in PO1), Member States would still have the opportunity to take account of the environmental performance of vehicles under this option. The measure would also be extended to buses/coaches.

-As a complementary measure to incentivise the introduction of distance-based charging: Removing minimum levels of vehicle circulation taxes for HGVs above 12 tonnes would allow Member States the reduction or complete abolishing of the tax in case of the application of distance-based charging. The measure would also contribute to the REFIT objective of reducing the burden on businesses.

-Phasing out vignettes for HDVs (HGVs + buses/coaches) after 5 years (by 2023) – only distance based charging would be allowed for these vehicles. Distance-based charging would remain the only option facilitated by the possibility to decrease vehicle taxes (see measure below) but Member States would remain free to decide whether or not to introduce road charging on their territory and on which roads. Distance-based charging is also necessary to achieve SO1 and SO4.

-Where HGVs are subject to road charging, buses and coaches would also have to be charged.

-Introducing a mandatory differentiation of infrastructure charges according to CO2 emissions for HDVs once vehicle certification data on CO2 emissions becomes available for new vehicles. Distinction would be made between i) Euro 0-VI vehicles, ii) low-CO2 (new or retrofitted) vehicles. Since the certification data would only be available in 2019/2020, the precise method for differentiating charges would be defined by the Commission in an implementing/delegated act. Taking into account existing fuel taxes, the differentiation would be revenue-neutral based on a bonus-malus principle in order to avoid "double taxation". The cleanest and most efficient vehicles would pay less than the average.

The concrete measures included in PO2, in addition to the measures of PO1, are described below.

This option would address CO2 emissions in a more direct way by including a CO2 element in the road charge for HDVs, while encouraging the introduction of distance-based charging by removing an obstacle created by Directive 1999/62/EC, i.e. the application of a minimum vehicle tax for HGVs. It goes a step further than PO1 in making the legislative framework more coherent by phasing out the less effective forms of charging for the use of roads and for external costs. Gradual phasing out of existing vignette schemes would give Member States sufficient time to adapt their charging systems. Moving towards distance-based charging is necessary to achieve the overall objective of implementing the 'polluter pays' and 'user pays' principles, i.e. contributing to all four specific objectives.

The measures set out in this option are generally supported by stakeholders. The promotion of zero-emission vehicles and the revision of rules on external cost charging are not contested by stakeholders. At the same time, some Member States oppose obligations regarding infrastructure maintenance (in particular the mandatory earmarking of revenues) voicing subsidiarity concerns, while SMEs, especially transport operators as well as private road users demand that any toll revenues be reinvested in roads. There is wide support for the application of the polluter pays and user pays principles, including proportionate pricing of vignettes. The exemption of HGVs below 12t is not considered justified by stakeholders, except for some Member States that still apply it. Regarding mark-ups, there is some interest in Member States to use the possibility outside mountain regions.

-Extending the possibility to use mark-ups (of 15-25%) beyond mountain regions to contribute to the financing of removing bottlenecks on the TEN-T network, while keeping the condition of acute congestion or significant environment damage generated by vehicles. The measure would apply to all HDVs (HGVs + buses/coaches).

oRemoving the requirement for Member States to notify the Commission where these provisions are respected (i.e. the values set in the Directive are applied).

-Introducing non-discrimination and proportionality requirements for LDVs: defining the maximum ratio of average daily price (or price proportions) between short-term and long-term vignettes, and clarify rules concerning possible compensation of national users.

-Removing the possibility to exempt HGVs below 12 tonnes from being subject to road charging (after a period of 5 years);

-Introducing common quality indicators. A harmonised definition based on current national practices in monitoring road characteristics could be adopted by the Commission through an implementing/delegated act.

-Monitoring and reporting by Member States through regular infrastructure reports, providing information on toll revenues, on their use, including expenditures on maintenance/operation of roads, as well as on the quality of roads based on key performance indicators.

-Allowing reduced toll rates (for both HDVs and LDVs) in order to promote zero-emission vehicles; in this respect, the measure would also contribute to the Commission's objective of reducing regulatory burden.

In line with REFIT objectives, the option includes simplifications to current rules and proposes their more coherent application, while keeping the obligations on light vehicles to the minimum.

This option proposes the necessary legislative changes to make the Directive more fit for purpose and, in order to make it possible to address all four objectives at least to some extent, extends the scope to buses and coaches and, for some provisions, to vans and passenger cars. The application of coherent rules to all HDVs (HGVs and buses/coaches) not only ensures fairer treatment of the users of these vehicles but also contributes to achieving the other three objectives. In the absence of the strongest possible instrument of mandatory reinvestment of toll revenues in transport, enhanced reporting including specific information on the quality of roads could incentivise Member States to allocate the necessary resources to road maintenance (cf. Annex 12).

For all these measures, less restrictive alternatives have been retained that are easier to implement and/or at lower costs.

·Introduction of rules on the liability of the keeper of a toll road to maintain the given road section in sufficiently good/safe condition

·Making it possible to apply genuine congestion charging (i.e. on top of infrastructure charges) on congested parts of the network in peak hours for HGVs only

A number of measures considered at an initial stage have been discarded following the stakeholder consultation and a pre-screening with regard to effectiveness, administrative/implementation costs, legal feasibility, subsidiarity and proportionality. These measures are listed here with a description on the reasons for discarding them available in Annex 11:

The most ambitious policy option introducing a full internalisation of external costs as suggested by the 2011 White Paper has also been discarded. This option is supported by some environmental NGOs in particular and remains a long-term goal of the European transport policy, but it does not currently appear to be achievable due to excessive implementation costs and for reasons of subsidiarity. Indeed, regarding certain aspects, it appears that Member States are best placed to act. For example, whether or not to apply road charging or congestion charging on a given part of the network can best be assessed at local/regional level.

Soft law (e.g. a Communication with recommendations) was used in the past to address the issue of disproportionately priced short-term vignettes for passenger cars but was found not to have significant impact. For addressing the shortcomings of existing legislation, it is not a viable option.

Member States would thus continue their current practice of road charging and proceed with plans according to their own national objectives as illustrated in section 2.4 without necessarily being in line with EU objectives sometimes in contradiction with the principles of non-discrimination and proportionality (cf. section 2.1.3). This option has no real support among stakeholders and some Member States argue that at least the limits on vignette prices (for HGVs) should be increased (cf. sections 2.2.3.1 and 2.4.2).

In the baseline scenario, Directive 1999/62/EC would continue to apply in its current form to HGVs only. Road charges for HGVs would not be differentiated according to the CO2 emissions since the differentiation based on Euro class would remain mandatory for HGVs (with continued exceptions). The heavy methodological requirement for the application of external cost charging would continue to apply and the Directive would not offer effective provisions to address the issues of degrading road infrastructure and congestion.

The concrete measures in each policy option are described below, while the rationale for the selection of these measures is provided in Annex 11, along with indications on which Member States would be affected. The way in which each member States would need to adapt its road charging practice is presented in Annex 4 (section 4.3).

Apart from the baseline scenario (no additional EU action), four policy packages are considered. Each of them addresses each policy objective but they differ in their focus and level of ambition. As some of the problems are linked to the current text of the Directive, the considered options all include regulatory elements, in line with the Commission Strategy on Low-emission Mobility, and simplification measures, in line with the objectives of ensuring regulatory fitness. This approach enjoys a wide stakeholder support as evidenced by the feedback received through the various consultation activities (cf. report on the stakeholder consultation in Annex 2).

The objectives are in line with the Charter of Fundamental Rights, in particular by ensuring the non-discriminatory application of road charges that reflect the environmental performance of vehicles thereby contributing to sustainable development and the free movement of citizens. More specifically, the first objective is in line with EU goals of reducing CO2 emissions and builds on the certification of CO2 emissions from HDVs under type approval legislation to be adopted in 2017, on the initiative on the monitoring and reporting of heavy duty vehicle fuel consumption and carbon dioxide emissions to be proposed at the same time with this initiative, and with upcoming initiatives on emissions from cars and vans. The second one, linked to the problem of degrading road quality, is coherent with the aims of the legislation on road infrastructure safety. Finally, the current revision of the legislation on electronic tolling (EETS) will be instrumental in achieving the third and fourth objectives by making proportionate distance-based charging more affordable.

These objectives are directly linked to the problems identified in section 2, as shown in Figure 2 1 , with clear synergies with the goal of ensuring adequate infrastructure financing through the application of proportionate pricing. There could be a trade-off between addressing CO2 vs pollutant emissions, in that the most fuel-efficient vehicles might not be the cleanest and price signals could work against each other. This however can be overcome by removing unnecessary duplication of charge differentiation from the Directive and introducing CO2 differentiation, with only the least polluting HDVs benefitting from lower rates. For cars and vans, incentivising fuel-efficiency only could lead to further 'dieselisation' with negative impacts on air pollution and fuel balance. If differentiation of charges is applied, it should thus take account of both CO2 and pollutant emissions.

1.Contribute to the reduction of CO2 emissions in transport via pricing (demand side) supported by supply side measure to come (standards).

The specific objectives (SO) for the revision of Directive 1999/62/EC are the following:

The general objective of the initiative is to promote financially and environmentally sustainable and socially equitable road transport through wider application of the 'user pays' and 'polluter pays' principles (fair and efficient pricing).

Also the recent technological developments call for changes in the existing rules. With the Euro classification becoming obsolete and new emission testing schemes becoming available it appears justified to reflect these developments in the Eurovignette Directive. The progress and increasing uptake of electronic tolling also enables the use of more refined charging schemes and these new possibilities should be considered to facilitate better internalisation of external transport costs via tolling.

The timing for the initiative is well justified by the recent developments in Member States in the area of road charging. The existing schemes are becoming more mature so it has become clear what the main deficiencies of the existing rules are and where new elements need to be added. At the same time, an increasing number of Member States introduces or considers the introduction/extension of road charging schemes. Given that these plans do not always correspond to the most optimal approach from an EU perspective, it seems necessary to act now to give the right incentives and eliminate barriers to the deployment of efficient and effective road charging systems.

After 20 years and following two major amendments, the Eurovignette Directive has become a complex piece of legislation. A number of policy measures considered under various policy options below could contribute to simplifying the application of the instruments provided for in the current Directive. For example, the removal of one of the two competing measures (the obsolete differentiation based on Euro class) to promote more environmentally friendly vehicles, and making the application of the other (external cost charging) easier for Member States.

Without specific new provisions in the Directive on the problems identified in section 2.1, Member States are unlikely to use road charging to address new challenges. Besides, if rules at EU level are insufficiently developed, there is a risk is that road charging schemes could become an element of economic competition between Member States.

As new challenges (global warming, road congestion, road financing gap) emerge, it is necessary that actions to tackle them are implemented in a harmonised and non-discriminatory way. There is a need for a EU response to these challenges and the Eurovignette Directive must evolve to accompany changes in the objectives of road charging schemes.

The action at EU level helps ensuring a more coordinated and effective application of road charging in Europe. The Eurovignette Directive brings coherence to national road charging policies by defining available tools and harmonising their deployment. This is necessary to preserve the coherence of the Internal Market and to avoid that road charging is used as a non-tariff barrier to trade, or that it becomes an obstacle to the free movement of people and goods.

Taking the above considerations, none of the proposed options goes beyond what is necessary as the proposed measures are focused on the areas where EU is best positioned to act. In addition, since the problems linked to current text of the Directive cannot be overcome by Member States alone and can only be addressed by amending the existing legislation, there is a clear need for EU action.

The extension of the analysis to passenger cars deserves special focus in the subsidiarity check. The private use of cars is predominantly limited to within the national borders of each Member States. Cross border travels are relatively sporadic, limited to holidays or commuting in border regions. Yet the impact of cars on problems on EU- and global levels must not be underestimated. The contribution of cars to overall transport CO2 emissions has already pushed the EU to legislate on mandatory CO2 emission targets. Similarly, cars account for 2/3 of the total costs of road congestion and a large share of air pollution costs. It is therefore unlikely to be effective in terms of finding solutions to many of the problems identified, if passenger cars remain outside of the scope of EU action.

Finally, air pollution is equally a local externality, and must primarily be addressed at the local level. However, as the existing legislation established minimum standards of air quality throughout the Community, the EU is also well positioned to offer the right tools to tackle the air pollution problem. In addition, particulate matter in air consists of a substantial trans-boundary component and so all Member States must take measures in order that the risks to the population in each Member States can be reduced. Moreover, the huge scale of the problem (500,000 premature deaths per year, i.e. 20 times more than fatalities in road accidents) calls for action at all governance levels. In any case, solutions specifically addressing air pollution ("external-cost charges") have already been included in the Eurovignette Directive but their use should be made simpler.

EU intervention to address interurban congestion is justified by the effect that it has on long-distance cross-border passenger and freight transport. This effect – disturbance to scheduled international bus services and to international road freight transport – has been described in section 2.3 above. However, since – with the exception to the abovementioned cases – congestion is a local externality, EU intervention is better placed for harmonising the tools used by Member States, rather than mandating any action.

The problem of discrimination of non-resident users by disproportionately priced vignettes is by definition of a cross-border nature, and can only be solved by co-ordinated action at a supra-national level. Such action is notably necessary to avoid chain reactions of other Member States to what could in some cases be seen as schemes designed to "charge the foreigners".

The problem of degrading quality of roads, in particular of roads of international importance, such as TEN-T corridors, affects road users independently of their country of registration. Furthermore, as established in section 2.3, it negatively affects the functioning of the whole Internal Market, with a particularly heavy impact on peripheral regions. Impacts on efficient transport on trans-European corridors are not likely to be sufficiently taken into account by the Member States individual decisions on maintenance priorities, making some level of EU intervention justified. This EU intervention is limited, though, essentially to co-ordination and monitoring, as Member States retain a large level of control on the management of their own road networks.

The problems of emissions (in particular CO2 being a global externality) have a clear cross-border dimension. While Member States have the means to promote more fuel efficient vehicles e.g. through subsidies, if such measures are not coordinated and applied consistently, their effectiveness will be subject to the willingness of other countries applying similar measures. In the case of a global problem, such as the issue of climate change, concerted action is much more effective.

As far as vehicle taxes may be affected by the amendment of certain provisions of Chapter II of the Directive, these would fall under Article 113 TFEU and would thus be subject to a separate legal proposal.

Directive 1999/62/EC has a double legal base, notably Article 91 TFEU and Article 113 TFEU (Article 71(1) and Article 93 of the Treaty establishing the European Community). It is to be noted that most of the amendments to the Directive as discussed here pertain to tolls and user charges (Chapter III of the Directive), an area to which Article 91 TFEU applies.

While the Connecting Europe Facility and the application of mark-ups (in mountainous areas) can contribute to the financing of alternative infrastructure, not all problems of congestion can be solved through additional infrastructure capacity, as this may in itself generate additional traffic.

According to the contribution of the UK to the public consultation, if no action is taken by 2040 congestion will become a serious problem for many important routes in the UK – up to 16 hours stuck in traffic for every household each year, 28 million working days lost per year and a £3.7 billion annual cost to the freight industry, risking higher consumer prices.

As regards congestion, the situation is projected to worsen if its costs are ignored. It is generally expected that congestion and its associated costs will increase, linked to the growth of economies, concentration of activities in urban areas and the rise in population. Under current trends and adopted policies, total congestion costs are projected to increase by about 24% by 2030 and 43% by 2050, relative to 2010. For heavy goods vehicles the delay cost from congestion is projected to increase by 76% by 2030. The growth of 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 (see also Figure 4-6 in Annex 4).

The increase in traffic would lead to further increase of noise related external costs of transport, by about 17% during 2010-2030 (24% for 2010-2050). Thanks to policies in place, external costs of accidents are projected to go down by about 46% by 2030 (-42% for 2010-2050) – but still remain high at over €100 billion in 2050.

Under the baseline scenario, NOx emissions would drop by about 56% by 2030 (64% by 2050) with respect to 2010 levels. The decline in particulate matter (PM2.5) would be less pronounced by 2030 at 51% (65% by 2050). By 2030, over 75% of the heavy goods vehicle stock is projected to be Euro VI in the Baseline scenario and more than 80% of the passenger cars stock. Overall, external costs related to air pollutants would decrease by about 56% by 2030 (65% by 2050). However, they would still represent an important cost for society (roughly €27 billion in 2030).

Member States that have not had any road charging system in place so far seem likely to go down the same path of introducing a time-based (vignette). Recently Latvia and the UK introduced time-based schemes for HDVs, and Estonia and Finland are reported to have similar plans. The Commission has launched an infringement case against the UK on grounds of discrimination against foreign hauliers.

It is also uncertain that Member States would shift to non-discriminatory distance-based charging systems. Over time, there has been an evolution from vignette systems towards network-wide distance-based electronic tolling in the case of HGVs, and the trend is expected to continue, for example with Bulgaria planning to introduce its new network-wide distance-based tolling system in 2018. However, in some cases advanced plans to adopt electronic tolling had to be abandoned or postponed for various reasons. This was the case for example in Denmark, France and the Netherlands (see Figure 2 7 ).

Based on the above, it can be concluded that guidance documents on how to set up fair national vignette systems for light duty vehicles are not sufficient to ensure that vignettes are priced proportionately. There is no reason to assume that the issue would cease to exist without additional action.

Table 2 6 shows the evolution of price ratios over the last 5 years, providing an indication on how the issue might develop in the future, including the forthcoming German scheme. While in half of the countries price ratios have decreased, in the other half, they have increased. However, it is clear that countries that priced short-term vignettes above a proportionate ratio of 3-4 in 2012 still have ratios above this level in 2017 (i.e., pricing remained disproportionate). In addition, the majority of Member States applying time-based charging schemes have significant differences (over a ratio of 5) between short-term and long-term vignette prices.

In the Baseline scenario, CO2 emissions from road freight transport (HGVs and freight vans) are projected to increase by 6% between 2010 and 2030 (11% for 2010-2050). For heavy goods vehicles, the increase would be somewhat higher (10% for 2010-2030 and 17% for 2010-2050). At the same time, emissions from passenger cars and minibuses are projected to decrease by 22% between 2010 and 2030 (32% for 2010-2050) thanks to the CO2 standards in place and the uptake of electromobility. CO2 emissions from buses and coaches are projected to remain virtually unchanged by 2030, compared to their 2010 levels, and to slightly increase post-2030 (3% increase for 2010-2050).

Air pollution generated by road traffic and road congestion are primarily local externalities, affecting mainly communities living where the pollution occurs, though air pollutants can travel long distances. Congestion on the interurban and suburban networks, in particular on road axes of international importance belonging to the TEN-T network, also negatively affects international traffic, and in particular the functioning of the coach transport and logistics sectors - just-in-time deliveries as well as scheduled bus services are disturbed by the increased unpredictability of the time of arrival due to congestion along the route.

Disproportionately expensive short-term vignettes essentially affect non-resident drivers. However, since such vignettes are in place in several Member States, all EU citizens who use their car for cross-border travel are potentially affected. Beyond the effect of discrimination per se, disproportionately priced vignettes can cause political division and damage to the coherence of the EU, as they are perceived as designed to "make foreigners pay".

The problem of degrading road infrastructure also affects large segments of society. Road users (hauliers and private motorists) are most directly affected by the negative impacts including damage to their vehicles and increased congestion. All road users, including vulnerable road users, are affected by the higher risk of accidents on badly maintained roads. Beyond these direct effects, poor road quality affects the real economy, as transport becomes slower and more costly; peripheral regions and Member States suffer most in this regard. Finally, when carried out too late, maintenance works have a higher cost, and the additional budgetary burden is eventually placed on taxpayers.

CO2 emissions from transport contribute to climate change, which is a global issue as greenhouse gases emitted anywhere contribute to global warming, rising sea levels, extreme weather conditions or desertification, with poorer world regions being most vulnerable. Mitigation measures have to be taken at all levels of governance and budgetary implications affect the entire population. The European automotive industry has an important role to play in exploiting the potential offered by technological progress.

2.3.Who is affected by the problem? What is the EU dimension of the problem?

Another instrument whose potential is not fully exploited is the application of mark-ups on roads suffering from acute congestion or the use of which leads to significant environmental damage, provided that revenues are invested in priority projects on the same corridor, contributing directly to the alleviation of the problem (a mark-up of up to 15-25% can be applied depending on whether the project is cross-border or not). Since it is not possible to apply mark-ups outside mountainous areas, this possibility has only been used for the financing of the Brenner Base Tunnel between Austria and Italy.

There are also some regulatory obstacles to fully exploit road charging for optimisation of the infrastructure capacity. The current legislation allows differentiating tolls according to time of the day or season, but it requires that any differentiation be revenue-neutral. This requirement makes it burdensome for Member States to implement such schemes on specific parts of the network. At the same time, the Directive does not permit the application of genuine congestion charging, i.e. on top of the infrastructure charge, which could be financially interesting for Member States.

Since the modalities of the variation are not precisely defined, it is less cumbersome to apply this differentiation than following the strict and complex requirements set out to charge for external costs. It is thus not surprising that the latter has hardly been used by Member States.

The Directive requires Member States to vary tolls (infrastructure charges) according to the Euro emission class (polluting emissions) of HGVs. However, the exact method of modulation is not harmonised, which results in a large variety of approaches across the EU (see Annex 10), while exemptions are allowed.

A fundamental problem with the Directive is that it provides for two competing instruments to reflect the environmental performance of HGVs:

With regard to congestion, marginal cost pricing is the most efficient tool for reducing congestion. It provides economic incentives to users to opt for alternatives to single occupancy peak-hour car transport such as car sharing, collective (public) transport or off-peak travel. Despite the consensus on its positive impact on social welfare, congestion pricing is not widely applied on the interurban network. Of the 17 Member States that apply road charging to all vehicles, only a few have put in place some sort of time-of-day charge differentiation to control congestion (see Figure 10-2 in Annex 10). The existing real-world examples have proved to be effective. In the Czech Republic, increasing the charge by 25-50% during peak periods has resulted in a 15% decrease in traffic during peak times. In France, increasing toll rates during weekend rush hours resulted in a 10% transfer to off-peak times.

For passenger cars and vans, which contribute to a significant amount of air pollution, Member States generally provide no incentives. This can partly be explained by the fact that these vehicles are outside the scope of the current legislation.

Tolls currently in place do not make full use of the options provided by the Eurovignette Directive to account for the external costs of air pollution and noise. While about two thirds of the Member States apply a differentiation for HGVs by Euro standard, a differentiation by time of day to protect sensitive areas from noise is only applied in Austria and Slovenia. Similarly, the possibility to charge for the external cost of air pollution has only been used by Germany and Austria. This may be due to the Directive providing for two overlapping instruments to reflect the environmental performance of HGVs (see below).

Road user charges in the form of time-base