Opinion of the Committee of the Regions on the 'White Paper - Fair payment for infrastructure use - A phased approach to a common transport infrastructure charging framework in the EU'
Date: 1999-03-11
Institutions: European Committee of the Regions
Subjects: charges for use of infrastructure, harmonisation of prices, transport infrastructure

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Opinion of the Committee of the Regions on the ‘White Paper — Fair payment for infrastructure
use — A phased approach to a common transport infrastructure charging framework in the EU’

THE COMMITTEE OF THE REGIONS,

(1999/C 198/04)

having regard to the Commission White Paper — Fair payment for infrastructure use — A phased
approach to a common transport infrastructure charging framework in the EU (COM(1998) 466 final);

having regard to the decision of its bureau of 15 July 1998 in accordance with the fourth paragraph of
Article 198c of the Treaty establishing the European Community, to draw up an opinion on the subject
and to instruct Commission 3 for Trans-European Networks, Transport, and Information Society to carry
out the preparatory work;

having regard to the draft opinion (CdR 408/98 rev. 1) adopted by Commission 3 on 22 January 1999
(rapporteurs: Mr Weingartner and Mrs Bennett);

on the basis of the Green Paper — Towards fair and efficient pricing in transport — Policy options for
internalizing the external costs of transport in the European Union (COM(95) 691 final);

on the basis of the Resolution of the Committee of the Regions on the European Charter of regional and
local authorities for a progressive and sustainable transport policy (CdR 347/97 fin) (1); and bearing in
mind the Commission’s proposals for directives for the further development of the railways:

— amendment of Directive 91/440/EEC on the development of the Community’s railways;

— amendment of Directive 95/18/EC on the licensing of railway undertakings;

— proposal for a Council Directive relating to the allocation of railway infrastructure capacity and the
levying of charges for the use of railway infrastructure and safety certification and the development
of combined transport;

— amendment of Directive 92/106/EEC on the establishment of common rules for certain types of

combined transport of goods between Member States;

on the basis of the Opinion of the Committee of the Regions of 16 January 1997 on the Green Paper —
Towards fair and efficient pricing in transport — Policy options for internalizing the external costs of
transport in the European Union and the Proposal for a Council Directive on the charging of heavy goods
vehicles for the use of certain infrastructures (CdR 364/96 fin) (2);

on the basis of the Opinion of the Committee of the Regions of 12 March 1998 on a sustainable transport
strategy for local and regional authorities and the European Union (CdR 255/97 fin) (3),

at its 28th plenary session of 10 and 11 March 1999 (meeting of 11 March) unanimously adopted the
following opinion.

1.

Introduction

1.1.
The European Commission’s White Paper entitled Fair
payment for infrastructure use is the logical continuation of
the proposals first mentioned in the Green Paper entitled
Towards fair and efficient pricing in transport (4). This white

paper is therefore, like the green paper before it, an important
part of the European Commission’s strategy for the promotion
of more efficient transport systems by the creation of a market
in which fair prices are to help underpin transport systems
and flows in a way which is sustainable in the long term.

(1) OJ C 251, 10.8.1998, p. 7.
(2) OJ C 116, 14.4.1997, p. 58.
(3) OJ C 180, 11.6.1998, p. 1.
(4) COM(95) 691 final.

1.2.
In addition to other work initiated by the Commission,
e.g. the report of the high-level groups on public-private
partnerships (1997) and transport infrastructure — charges
(1998), the joint Transport-Environment Council has also met
and discussed the optimum use of existing infrastructure and

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the move to more environmentally benign forms of transport,
as well as calling for reduction of fuel consumption and of
noise and toxic substance emissions.

The effect of new charging structures should be to promote
both the efficient use of existing infrastructure and the efficient
provision of new infrastructure.

1.3.
The white paper reiterates the high importance of
Europe’s transport infrastructure for economic growth, worker
mobility, competitiveness and the quality of life. At the same
time, it notes that providing this infrastructure and making the
most efficient use of it is becoming increasingly difficult. The
Committee notes that current trends in transport use and
volume, in conjunction with growing over-use of infrastructure
and environmental pollution, give rise to doubts as to the
sustainability of
transport. The Commission’s acknowl-
edgement of this in the white paper is welcomed by the
Committee.

2.

Important themes and guidelines

The Committee endorses the following guidelines set out in
the white paper.

2.1.
The exposition of the cost components of transport
infrastructure is helpful and useful, because it reveals —
independently of the mode of transport in question — the
composition of infrastructure costs. An important point is that
both fixed costs, which are independent of traffic volume, and
variable costs, which depend on volume, have internal and
external cost components. A full social cost-benefit analysis
for the provision of infrastructure should be carried out by
including all these cost components.

Furthermore, as the High Level Group on Transport Infrastruc-
ture Charging pointed out in their final report, all potential
elements of cost should first be identified and then the
elements which should form the basis for user charges should
be decided.

2.2.
Current taxes and levies on transport are in general not
based on a true calculation of costs. This is part of the reason
for the present transport problems:

— distortions of competition between Member States;

— distortions of competition between modes of transport;

— neglect of social and ecological aspects;

— difficulties with the financing of infrastructure investment.

2.3.
In developing a Community approach to the allocation
the
infrastructure costs, account should be taken of
of
subsidiarity principle. Although the same basic charging
the major modes of
principles should be applied to all
transport in each Member State,
it is inevitable that the
resulting structures and levels of charges will differ by mode
and location for different economic and social reasons in
different regions. Here, local and regional authorities should
be involved in the decision-making process regarding the
application of charges, balancing the need to avoid distortions
of competition in the EU and local/regional economic, environ-
mental and social interests.

2.4.
Similarly, a future Community approach to the allo-
cation of infrastructure costs must be implemented in all the
Member States on the basis of the same principles and under
comparable conditions, with due regard to the polluter pays
and territorial principles (payment of costs where they arise).
Although account must be taken of local circumstances and
so a degree of flexibility must also be an element of the
Community approach.

2.5.
The proposed approach to costs is based on the
assumption that a charging structure geared to marginal costs
is a good solution. Marginal costs are defined as the variable
costs incurred as a result of one additional vehicle or transport
unit using the infrastructure. Without analysing this approach
to cost allocation in detail here, the Committee notes with
approval that it lays the foundation for the financing of
infrastructure by user charges, and even for revenue from
one mode of transport being used to finance infrastructure
measures for another mode. Cross-financing will enable the
construction of transport infrastructure to provide both con-
ditions for intermodality and intra-modal competition. How-
ever the Committee also recognize the validity of considering
other forms of pricing to marginal social cost pricing, i.e.
scarcity pricing.

2.6.
It is correctly intended that the decision on the use of
revenue from the proposed charging system should lie with
the Member States. This is particularly necessary from the
point of view of inclusion of external social costs, as only in
this way can the available revenue be used to tackle problems
where they occur; for reasons of subsidiarity the regions
should also be involved however.

Moreover, all other things being equal, the different charging
systems currently used in the Member States further distort
(For example: different levels of
the cost-benefit situation.
consumer taxes on fuel mean that consumers try to buy their
fuel where it is cheapest rather than where it is to be used.).

2.7.
The Commission’s proposal of using a charging
approach based on marginal costs for the entire transport
infrastructure, all modes of transport, terminals, information
and communications systems is in line with the call made in

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the COR’s Opinion on the Green Paper entitled Towards fair
and efficient pricing in transport
(CdR 364/96 fin). The
Commission’s Green Paper (COM(95) 691) focused mainly on
the issue of road pricing and traffic problems. The Committee
welcomes the broadening of the discussion to the entire
transport infrastructure.

2.8.
The step-by-step implementation of the new Com-
munity approach to charging also corresponds with the views
of the regions — see the call made in the Opinion on the
Green Paper entitled Towards fair and efficient pricing in
transport. A particularly important issue is obtaining agree-
ment on the method to be used to calculate marginal costs.
This too was referred to in the above opinion. The proposed
preparatory Phase I
(three years, 1998-2000) should be
sufficient for this.

2.9.
The restructuring of existing taxes and levies proposed
in Phase II will also be necessary for the implementation of the
approach. But as this restructuring is directly linked with the
development of general tax policy, the implementation of the
charging approach But as this restructuring is directly lined
with the development of general tax policy, the timing of the
implementation of the charging approach is secondary to
governments developing a general tax policy. This might mean
Phase II not being implemented at all, for example if not all
the preconditions relating to general taxation had been met.

2.10. Without commenting in detail on the implementation
measures provided for individual modes of transport, the
Committee would nonetheless like to point out that the white
paper concentrates on the priority measures for Phases I and
II.

2.11. Where no data or analyses exist for estimating costs,
these must be obtained as a matter of priority. It is appropriate
for this work to be monitored by a committee of government
experts and the Committee of the Regions would expect to be
suitably represented on this body.

2.12.
The methods used for calculating the costs of the
various modes of transport should be as uniform as possible.
The proposed introduction of
transparency of accounts,
‘transport accounts’ and improved transport statistics suggest
however that it will not be possible to complete the work
quickly and that these methods are therefore unlikely to be
available in time.

2.13.
In relation to the necessary changes to transport tax
policy, reference is made once again to the related timing
problem (see point 2.9).

in the State Aid rules will clearly be necessary to allow for the
provision of infrastructure in peripheral regions and regions
with low population density.

3. Proposals and Requests

3.1. With reference to the Opinion of the Committee of the
Regions on the Green Paper entitled Towards fair and efficient
pricing in transport (CdR 364/96 fin) of 16 January 1997,
doubts are once more expressed as to whether changes in the
use of the various modes of transport can be achieved via costs
and prices alone. Behaviour is determined by numerous other
factors (e.g. psychological, historical, sociological, geographi-
cal), so that the demand for forms of transport can be guided
by prices only to a limited extent, and the desired changes in
behaviour brought about only to an insufficient degree. The
Committee suggests other means of changing user behaviour
such as ending corporate perks (bonuses) which encourage car
use, i.e. tax incentives and free parking. Local and Regional
authorities, according to the subsidiarity principle, should be
given greater powers to implement measures which may
change user patterns as conditions dictate in their area or
region.

3.2.
It should also be pointed out once again that costs and
prices can bring about changes in behaviour vis à vis transport
choices only if useable and equally efficient and competitive
alternatives are available. New, alternative transport infrastruc-
ture must therefore be created, where needed (e.g. TEN). The
white paper at least foreshadows this, in that the approach to
the allocation of costs makes provision for the financing of
infrastructure from user charges via exceptional charges in
excess of marginal costs.

3.3.
The Committee is particularly critical of the failure to
achieve almost any progress at all on improving the accuracy
of costing. The Commission has issued a multitude of pro-
posals for directives and regulations, and green and white
papers in an attempt to establish a transport policy geared to
present-day needs, naturally including measures relating to
transport costs and prices. Implementation of these proposals
has however failed miserably, partly because the modes of
transport affected have developed counter-strategies and, so
far at least, with success, and partly because relevant Council
decisions have been blocked by national interests.

The Committee of

3.4.
the Regions now expects the
decision-makers finally to conduct a complete rethink. The
Committee of the Regions would therefore make the following
comments and proposals:

2.14.
The rules on state aid are highly relevant to any
Community cost system which sets out to establish fair prices
for the use of infrastructure, as competition is directly affected.
It will therefore be necessary to revise the existing regulations
when developing the new system of costs. However flexibility

The Committee welcomes the presentation of the
3.4.1.
white paper as an important basis for continuing the substan-
tive discussion on infrastructure costs and expects the issues

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discussed and the measures/proposals put forward in it to
contribute to the implementation of a transport policy based
on sustainability.

3.4.9.
In relation to rail transport, the Committee calls for
consideration to be given to the special needs of local and
regional transport, particularly with regard to the allocation of
capacity and routes.

3.4.2.
individual
The white paper’s measures aimed at
modes of transport require a greatly changed structure of
transport taxes and levies. The European Union’s regions and
local authorities expect to be appropriately consulted on
the framing of
these tax measures and involved in the
decision-making process.

3.4.10.
Similarly, with regard to regional air transport,
which is of particular importance for the local authorities and
regions, the Committee calls for close consideration to be
given to the allocation of slots and airport charges.

3.4.3.
The Committee shares the Commission’s view that a
new system for the allocation of transport costs can only be
introduced step-by-step (especially as it must make allowance
for the legal position of the various modes at the start and for
the complicated issues raised by the introduction of new
changes). The Committee considers however that it should be
possible to take the first steps towards the allocation of external
costs during the first phase, particularly where environmental
pollution and transport volumes make this a matter of urgency.

The Committee urges that the new cost allocation
3.4.4.
system be so designed that payment for transport infrastructure
is made at point of use. This means applying the territorial
principle; only if this principle is applied can the inclusion of
external costs be made transparent. It should be made possible
for the directly affected regions to be involved in shaping the
new system.

The Committee calls for the new system of costs to
3.4.5.
provide financial
incentives for clean technologies in the
interests of greater concern for nature and the environment, as
such technologies can reduce the negative external cost
components.

3.4.6.
The Committee agrees with the Commission that the
decision on the use of revenue from transport taxes and
charges should remain the preserve of the Member States. The
Committee also considers that wherever possible, revenue
should be used at the level of the regions and local authorities.

3.4.7.
The Committee also assumes that the new cost
system will be based on the polluter pays principle. The system
chosen should be as simple and transparent as possible and it
should be properly publicized to ensure that it is understood
by the public.

3.4.8.
The Committee shares the Commission’s view that,
in allocating the costs of road transport, the accent should be
on usage-related charges for heavy goods vehicles. It should
also be ensured that regional charges are compatible with the
charging systems used for conurbations. Charging systems
should be established ensuring that disadvantages to HGVs in
peripheral areas are not exacerbated.

3.4.11.
Due to the energy efficiency of shipping relative to
other modes of transport such as air and road, both the
charging framework and tax policy should aim to encourage a
modal shift
to short sea shipping and inland waterway
transport. This would allow for a significant reduction in CO2
emissions from transport according to the Communication
from the Commission on transport and CO2 (COM(1998) 204
final).

Furthermore, a careful charging framework and tax policy in
the maritime transport sector is necessary to minimise the
negative effects of peripherality on regions dependant on
shipping.

3.4.12.
The Committee asks to be appropriately represent-
ed on the proposed Committee of government experts on
charging for the use of infrastructure in order to be able to
represent the interests of the EU’s regions and local authorities
there.

3.4.13.
The Committee agrees with the Commission that
the impact of a changed allocation of transport costs on
remote areas or areas whose development is lagging behind
requires special study. It should be made possible to keep
charges lower in areas with underdeveloped infrastructure
and low traffic loads and allow flexibility in any measures
implemented as local and regional needs dictate. The partici-
pation of local and regional authorities under the subsidiarity
principle is essential where decisions regarding local conditions
are being made.

3.4.14.
The Committee suggests that, in addition to the
studies and research already referred to, basic research should
be initiated to establish whether, or to what extent, user
behaviour can be influenced by costs and prices and also
what are the other major influences on user behaviour. The
Committee fears that it would be necessary to set individual
costs or costs for each use of the infrastructure so high that it
would be economically and/or socially unacceptable and
therefore impossible to implement.

3.4.15.
The Committee of the Regions also suggests that
marginal social costs be continuously monitored, as a variety
of measures (such as changes in staff and management
structures on the railways) can be expected to bring lower
costs and thus changed marginal social costs.

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4. Conclusion

4.1.
The Committee of the Regions welcomes the Com-
mission’s White Paper and the inclusion of the principles of
sustainability, efficiency, and the aims to reduce greenhouse
gas emissions from transport such as CO2. Good transport
infrastructure is essential for the economic and social develop-
ment of Europe if guided by these key principles.

The proposed action in the Commission’s document
4.2.
aim to bring about a modal shift from less environmentally
efficient modes of transport such as road and air and encour-
ages intermodality with more environmentally efficient trans-
port modes such as rail, sea and inland waterways which will
reduce congestion on roads and greenhouse gas emissions.
However in order to make rail transport more efficient and a
real alternative to road transport, a liberalisation in the market
is necessary. A single market in rail transport would open
access between networks and the Committee encourages the
development of the TENS and the Trans-European Rail Freight
Freeways which will greatly increase efficiency.

Brussels, 11 March 1999.

It is clear that

4.3.
taxation and charging
the current
systems in Europe are significant factors in the distortions
in the transport sector and the consequent inefficiencies,
congestion and pollution. The Committee welcomes the
proposals of a charging system based on the principles of
marginal social cost, polluter pays,
territoriality and the
principle of internalisation of external costs. The Committee
emphasis the importance of a full social cost-benefit analysis
for the provision of infrastructure as well as data and studies
in order to calculate the marginal costing framework.

4.4.
The measures which will be put in place after the
establishment of a charging framework will mean significant
changes for transport users. Local and regional authorities
have a large role to play in promoting more efficient use of
transport. A simple and fair charging system which promotes
the polluter pays principle and is well communicated to the
public will help ensure the support of public opinion and
change in attitudes and behaviour.

4.5.
The intended result of the action proposed by the
Commission is greater use of transport infrastructure which
will be more efficient and will provide patterns of use that are
socially and environmentally desirable. The Committee of the
Regions endorses this view.

The President

of the Committee of the Regions

Manfred DAMMEYER