Opinion of the Economic and Social Committee on the 'Proposal for a Council Directive on the charging of heavy goods vehicles for the use of certain infrastructures` () (97/C 206/05)

On 27 January 1997 the Council decided to consult the Economic and Social Committee under Article 75 (1) of the Treaty establishing the European Community on the above-mentioned proposal.

The Section for Transport and Communications was asked to prepare the work and adopted its opinion on 9 April 1997. The rapporteur was Mr Decaillon.

At its 345th plenary session of 23 and 24 April 1997 (meeting of 23 April 1997), the Economic and Social Committee adopted the following opinion by 118 votes to three, with eight abstentions.

1. Introduction

1.1. The Commission proposal:

1.1.1. Its remit:

- annual vehicle taxes

- user charges and tolls

- sensitive routes.

1.1.2. Its scope:

- goods vehicles of 12 tonnes or more gross vehicle weight, except vehicles carrying out transport operations exclusively in the non-European territories of the Member States, and vehicles registered in the Canary Islands, Ceuta and Melilla, the Azores or Madeira and carrying out transport operations exclusively in those territories or between those territories and Spain or Portugal.

1.1.3. Its aim:

- to reduce distortions of competition as a means of furthering the development of the single market. To achieve this, the Commission proposes:

to ensure the costs associated with road infrastructure are better covered, including external costs;

to ensure greater differentiation which allows costs to be recovered closer to the area where they arise;

to apply the principle of territoriality more extensively in recovering costs incurred by infrastructure use.

1.2. The Commission proposal meets a twofold legal obligation:

1.2.1. A Council review, in accordance with Article 7f) of Directive 93/89/EEC (), of the maximum rate of user charges.

1.2.2. The Council's approval, within a reasonable time-limit, of a replacement for Directive 93/89/EEC, which was annulled by the European Court of Justice in July 1995 () for the following reasons:

- The Council had adopted a text substantially different from that proposed by the Commission and approved by the European Parliament on 18 December 1992, subject to two minor amendments, and thus did not comply with the procedures for re-consulting the European Parliament as laid down in Articles 75 and 99 of the Treaty.

- Due consultation of the Parliament in the cases provided for by the Treaty constitutes an essential formal requirement, breach of which renders the measure concerned void. The effective participation of the Parliament in the legislative process of the Community represents an essential factor in the institutional balance and reflects a fundamental democratic principle.

- The Council's line of argument was rejected.

1.3. The draft directive proposed by the Commission is set against a specific legal backdrop:

1.3.1. For legal security (to avoid a legal vacuum), the Court of Justice deemed it necessary to retain, on a provisional basis, all the arrangements made under the annulled directive until the Council had adopted a new one.

1.3.2. In its review of the legality of acts, provided for in Article 173 of the Treaty, the Court of Justice did not feel it was entitled to set the Council a deadline for adopting a new directive.

1.3.3. However, the Council has a duty to remedy this irregular situation within a reasonable period of time.

1.4. The draft directive is part of (a) the process to complete the single market by removing distortions to competition, and (b) the common transport policy.

1.4.1. Apart from the legal acts dealing explicitly with removing distortions to competition, the proposal makes direct reference to:

- The White Paper on the future development of the common transport policy (), which urged a more comprehensive strategy aimed at making transport more sustainable and more balanced.

- The Green Paper: Towards fair and efficient pricing in transport () which seeks in particular to reverse unsustainable transport trends and looks at how external costs can be internalized.

- Instruments of a regulatory, technical or organizational nature aimed at increasing the attractiveness, profitability and quality of service of other land-based transport modes, such as the opening-up the rail market, the Pilot Actions in relation to Combined Transport (PACT) and the market restructuring of the inland waterway market.

2. Background

2.1. To the draft directive

2.1.1. In 1968 the Commission proposed introducing a taxation system for commercial vehicles ().

2.1.2. In 1978 the Council agreed in principle.

2.1.3. In 1988 the Commission submitted a proposal on the charging of road infrastructure costs to heavy goods vehicles [COM(87) 716 final () amending COM(86) 750 final ()].

2.1.4. In 1992 the Commission proposed a new draft directive [COM(92) 405 final ()] amending the proposals it had made initially and those submitted in COM(90) 540 final in 1991 ().

2.1.5. In 1993 the Council adopted Directive 93/89/EEC on the application by Member States of taxes on vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures; the proposal, however, differed substantially from the Commission proposal and the opinion of the European Parliament, particularly in that the Council was no longer obliged to establish a harmonized road taxation system by 31 December 1998 and no longer had to seek Commission proposals on how to introduce a charging system based on the principle of territoriality.

2.2. To the main points made by the Economic and Social Committee

2.2.1. The Economic and Social Committee has issued a number of positive opinions on the various Commission's proposals:

- opinion of 2 July 1987 on COM(86) 750 final, rapporteur: Mr Moreland ();

- opinion of 2 June 1988 on COM(87) 716 final, rapporteur: Mr Rouzier ();

- opinion of 24 April 1991 on COM(90) 540 final, rapporteur: Mr Moreland ();

- opinion of 25 November 1992 on COM(92) 405 final, rapporteur: Mr Moreland ().

2.2.2. The ESC's opinions take a broadly consistent line on a number of essential issues:

a) to continue to eliminate distortions to competition;

b) to develop a step-by-step, simplified approach;

c) to establish as tax criteria:

- maximum authorized weight and number of axles;

- a system which does not penalize small vehicles;

d) to pursue the objective of common charging arrangements for both infrastructure costs and external costs using a graduated system;

e) to work towards the ultimate removal of tolls, except for certain specific infrastructures;

f) to apply, in the meantime, the principle of territoriality to both general and specific infrastructure;

g) to take account of all the economic, social and environmental costs and benefits of each transport mode.

3. Comments by the Economic and Social Committee

3.1. Legal basis of the draft directive

3.1.1. The Committee believes that,

- while the draft directive may cite various general Treaty articles, in particular Articles 2 and 3, to enhance the validity of its objectives,

- fundamentally, it must be based on Title IV of the Treaty, and more specifically on the provisions of Article 75.

3.1.2. In fact the Committee, while acknowledging that the draft directive establishes links with other Treaty provisions, takes the view that:

- these links stem from the fact that transport, by its very nature, cuts across other sectors;

- the aspects specific to transport must, however, be fully recognized;

- charges for the use of infrastructure must therefore be based on considerations specifically related to the common transport policy;

- it would not be desirable for these charges to be incorporated into the Treaty's tax provisions (Articles 95 ff.);

- Article 75 is not only a suitable vehicle for realizing the objectives and implementing the provisions of the draft directive, but also, by stipulating the adoption procedure referred to in Article 189c, meets the need for efficiency and the desire for rapid decision-making which the Committee has called for on a number of occasions.

3.2. General comments

3.2.1. The Committee would reiterate its previous opinions on the need for the Council to reach agreement forthwith on charging for the use of infrastructure in order to:

- consolidate the single market by eliminating distortions to competition;

- develop healthy intra- and intermodal competition in the transport sector;

- take account of the need to promote an efficient, balanced and sustainable transport system;

- consolidate the European transport system, particularly with the prospect of enlargement;

- clarify the user-pays principle;

- integrate both the positive and negative external effects of transport into transport costs.

3.2.2. The Committee would reiterate its previous comments that, while tolls are one way of applying the principle of territoriality, combining them with vehicle taxes and excise duties constitutes double taxation. This why the Committee backs ultimately abolishing tolls. Technological innovations, particularly electronic toll collection, should help avoid double taxation of this kind, while still maintaining a steady flow of traffic.

3.2.3. The Committee welcomes the Commission's progressive, measured and gradualist approach which, given the differing conditions and views in the Member States, should pave the way for agreement in the Council. The Committee stresses that, as things stand, it is necessary to proceed, as the Commission is doing, on a step-by-step basis towards more complete harmonization and to leave certain Member States the option of making their own vehicle taxation arrangements, without thereby introducing new competition distortions.

3.2.3.1. The Committee would point out that, in the European Union at the moment, fuel tax is charged more for tax policy reasons than for transport policy considerations, since fuel excise duties are, and will remain, an important source of revenue.

The Committee hopes that real coherence will be established between indirect taxes based on tax policy per se, and direct charges levied to cover the use of infrastructure and external costs, which come under transport policy.

3.2.4. The Committee appreciates the effort made by the Commission to submit a draft which:

- respects the principle of differentiating between vehicle classes but is still simple enough for rapid application without additional administrative costs;

- complies with the principle whereby taxation is calculated as closely as possible in line with the actual use of the infrastructures;

- advocates, simply and straightforwardly, the integration of external costs into the various ways in which charges are levied, while at the same time guaranteeing the principle of non-discrimination and compatibility among these different forms;

- respects the specific character of certain circumstances and infrastructures.

3.2.5. The Committee appreciates the efforts made by the Commission to accompany its proposal with an analysis - which while open to debate is relatively complete and reliable - of what the practical implications of that proposal would be.

3.2.6. While reiterating its backing for Commission research into the more general application of the principle of territoriality, the Committee would nonetheless draw the Commission's attention to some practical problems.

3.2.7. The Committee recognizes the need to guarantee the Member States adequate tax revenues, but would note that:

- this income must be a true reflection of actual infrastructure use and must not be a general extension of tax revenue;

- the arrangements should be implemented in a balanced, measured and fair way so as (a) not to place an undue burden on the different user classes who already face major difficulties, (b) not to undermine the principle of free circulation, and (c) to avoid introducing new intramodal and/or intermodal distortions.

3.2.8. The Committee reiterates the importance it attaches to evaluating and taking account of infrastructure costs and external effects. It believes that internalizing these costs should apply to all transport modes, but, in the light of present conditions and the need to adopt a step-by-step approach, it also feels it is right to focus first on that sector which is at the top of the agenda, i.e. road transport. Moreover, the Committee would again make clear that taking full account of external effects means analysing and internalizing the cost-benefit relationship [cf. ESC opinion on the Green Paper on the impact of transport on the environment () and the ESC own-initiative opinion on infrastructure costs in the road freight transport sector ()].

3.2.9. Whilst the Committee recognizes the specific objective of the proposed directive, it believes that this document is indelibly bound up with the need for rapid Council decisions in other transport sectors and for these decisions to form part of a coherent, integrated strategy [cf. in particular the ESC opinion on the Green Paper: Towards fair and efficient pricing in transport - Policy options for internalizing the external cost of transport in the European Union ()].

3.2.10. While the Committee accepts the concept of 'sensitive routes`, it nonetheless queries the procedures used to select such routes, and trusts that routes of this kind do not hinder the free movement of traffic or introduce new distortions in competition.

4. Specific comments

4.1. Fleet composition

4.1.1. The Committee welcomes the fact that the fleet will increasingly be composed of environmentally-friendly vehicles.

4.1.2. Nonetheless, the Committee wonders whether the Commission has not been too 'mechanical` in its findings, which appear to have been reached under the premise of 'all things being equal`. Yet, all things are rarely, if ever, equal.

4.1.3. Some operators and a number of Member States are pressing to increase technical standards for road vehicles. The Committee feels that the Commission would do well to 'simulate` such changes in technical standards and their impact on infrastructure wear and tear and external costs.

4.1.4. In addition, the Committee feels that applying the directive may well have adverse repercussions and accentuate the split in the vehicle fleet and the road transport sector, with a relatively small number of firms in a financial position to meet the most effective standards and to profit from lower taxes, tolls and user charges, while an ever growing number of companies would be unable to reach the required standards; this would not only lead to these companies being excessively taxed, but would also cause infrastructures to decline and external costs to rise inexorably.

4.2. Transport costs

4.2.1. The Committee welcomes the fact that the impact on transport costs will be slight.

4.2.2. The Committee nonetheless fears the emergence of certain undesired effects, since, even though the impact of direct taxes on infrastructures is slight, it varies depending on how the different operators are placed.

4.2.3. For some operators the impact may well be relatively slight and could even be passed on in prices; for others it could place an even greater strain on their financial circumstances.

4.3. Road transport demand and modal shift

4.3.1. The Committee recognizes that the directive will have little or no impact on the development of road transport demand.

4.3.2. The Committee feels that the directive can only be extended and fleshed out if it is accompanied - simultaneously, or at least as quickly as possible - by supply-side measures in respect of infrastructure, services provided by other transport modes and new telematics services [cf. ESC opinion on the application of telematics systems to intermodal transport in a pan-European context ()].

4.3.3. The Committee would therefore ask the Council and the Commission to take firm action to promote more effective multi-modal transport which does less damage to infrastructure and the environment. (cf. ESC opinion on the Green Paper: Towards fair and efficient pricing in transport - Policy options for internalizing the external cost of transport in the European Union).

4.4. The price of goods

4.4.1. The Committee welcomes the fact that the measures proposed will have little effect on the price of goods.

4.4.2. Given that over time the price of transport and the price of goods rise at different rates, to the obvious detriment of the former, the Committee believes that hauliers or producers could eventually absorb these costs without becoming uncompetitive.

4.5. Infrastructure costs and external costs

4.5.1. The Committee hopes account will be taken of both the general and particular points it has made (cf. ESC opinion on the Green Paper: Towards fair and efficient pricing in transport - Policy options for internalizing the external cost of transport in the European Union).

4.6. Revenues from charges

The Committee recognizes that such revenues are expected to rise, but would stress that:

- this is not the objective of the directive,

- it would be desirable to differentiate more between users, so as to ensure that both real costs and charges are allocated fairly.

4.7. Competitiveness

4.7.1. The Committee recognizes that the small rise in transport prices should be more than offset by increased efficiency in road transport and in the transport system as a whole.

4.7.2. The Committee would reiterate, however, that the efficiency of the road transport system, and the transport system as a whole, hinges on measures to improve transport supply.

4.8. The system of production, trade and the European area

4.8.1. The Committee notes that the impact of the proposal are not judged to be deleterious to Community cohesion.

4.8.2. The ESC would, however, urge the Commission, when preparing the report assessing the application of the directive, not to be content merely to correct where correction is needed, but to include in its new proposals constructive suggestions and procedures for enhancing the industrial, commercial and geopolitical cohesion of the Community.

4.9. The social system

4.9.1. The Committee regrets that the Commission impact study omitted to consider the social aspect. It would therefore ask the Commission to remedy this shortcoming by examining inter alia the directive's potential impact in the following areas: increase in the tax burden, possible deterioration in working conditions and in observance of rules, increased use of sub-contracting in road transport, etc.; this examination should be broken down by country and category of undertaking.

4.9.2. Depending on the results of the analysis, the Committee would ask the Commission to make every effort:

- to mitigate, if need be, the adverse effects of this directive;

- to promote, by improving the social conditions of transport, enhanced efficiency and a better quality of supply.

5. Specific comments

5.1. Recital 2

5.1.1. The Committee welcomes charging for external costs, but wonders why the words 'where appropriate` have been included; this would seem to contradict both recital 4, which speaks of ensuring 'sustainable transport in the Community` and encouraging 'the use of more environmentally friendly means for the transportation of goods`, and recital 10 which calls, to this end, for 'greater differentiation of taxes and charges`.

5.1.2. The Committee proposes that recital 2 should be reworded.

5.2. Article 2

5.2.1. Given present-day developments in some forms of transport, such as parcel post, express freight, etc., the Committee wonders why the scope of the directive is limited to vehicles having a maximum load of not less than 12 tonnes.

The least the Commission could do is justify this in terms of avoiding distortions to competition, of ensuring that the charges cover the real costs of infrastructure use and external costs or in terms of progress, simplicity or a gradual approach.

5.2.2. The Committee is uneasy about the definition of 'external costs` being reduced to the 'costs of congestion, air pollution and noise`. Ought not other elements be taken into account, such as safety, land-use density, vibration etc.?

5.3. Article 6

5.3.1. The Committee, whilst agreeing with the Commission that simplification is needed, queries the way vehicles are differentiated:

- Would not a more detailed differentiation have brought us closer to the goal of linking the charges more effectively to the real costs of infrastructure use and external costs?

- Is there any justification other than that of simplicity for the linear 10 % differentiation between non-Euro vehicles, Euro I vehicles and Euro II vehicles?

Brussels, 23 April 1997.

The President of the Economic and Social Committee

Tom JENKINS

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