Commission staff working document - Summary of the impact assessment - Accompanying document to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Action Plan on Global Navigation Satellite System (GNSS) Applications {COM(2010)308} {SEC(2010)717}
Date: 2010-06-14
Institutions: European Commission
Subjects: EU programme, action programme, impact study, intelligent transport system, new technology, satellite navigation, service industry, telecommunications industry

EUROPEAN COMMISSION 

Brussels, 14.6.2010 
SEC(2010) 716 final 

COMMISSION STAFF WORKING DOCUMENT 

SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying document to the 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Action Plan on Global Navigation Satellite System (GNSS) Applications 

{COM(2010)308} 
{SEC(2010)717} 

 
  
 
 
 
 
 
COMMISSION STAFF WORKING DOCUMENT 

SUMMARY OF THE IMPACT ASSESSMENT 

2

1. 

PROBLEM  DEFINITION:  WHAT  IS  PRECISELY  THE  PROBLEM,  WHO  IS  MOST 
AFFECTED AND WHY IS PUBLIC INTERVENTION NECESSARY? 

In  the  year  2000  a  new  technology  was  made  available  to  the  world,  after  having  been 
restricted  for  many  years  to  US  military  usage:  satellite-based  positioning  and  timing  for 
civilian  use,  through  the  provision  by  the  US  to  access  their  GPS  signal,  free  of  charge  but 
with no guarantee of service. This led to the creation of a new market of GNSS products and 
services, called downstream GNSS applications which, in 2008, were worth €124 Bn. 

The market is primarily building upon basic positioning and timing signals but is expected to 
benefit  from  the  planned  introduction  of  authentication  and  encryption  of  signals.  Experts 
envisage  that  75%  of  this  market  be  provided  by  products  and  services  linked  to  mobile 
telecommunications and personal handsets, 20% for intelligent transport systems for road and 
the remaining 5% for other domains of application. 

As  the  GPS  was  offering  no  guarantee  of  performance  or  reliability,  EU  Member  States 
decided  in  2001  to  launch  the  EU  GNSS  project  with  two  systems  providing  signals 
guaranteed  for  civilian  use:  EGNOS  and  GALILEO.  Other  countries  (Russia,  China,  India 
and Japan) have recognised the strategic value of GNSS and declared their intention to deploy 
GNSS capabilities for civilian use including the development by their industry of applications 
based on their own system. 

In spite of Europe's investments in its GNSS infrastructure and the availability of EGNOS, the 
share  of  the  European  industry  in  the  GNSS  applications  market  is  low  compared  with  the 
share that Europe is capable to achieve in other sectors of high-technology, which constitutes 
a problem since: 

–  Applications  based  on  GALILEO  and  EGNOS  would  contribute  decisively  to  the 
development of a knowledge-base society and to the creation of high-value jobs within the 
EU. Europe is therefore missing a huge opportunity if it does not take the appropriate share 
of  the  expected  economic  benefit  resulting  from  GNSS  applications.  Also,  if  GALILEO 
and  EGNOS  do  not  become  the  underlying  GNSS  standard  in  Europe,  many  application 
domains may  remain locked  with  technologies which prevent them  from  benefiting  from 
the added-value of new advanced services. 

–  The  limited  usage  of  applications  based  on  EGNOS  and  GALILEO  leads  to  critical 
dependencies  as  GNSS  are  very  pervasive,  and  provide  position,  navigation,  and  timing 
information upon which depend a whole range of daily-life activities and Europe's security 
and social and economic development. By relying only on GPS-based applications, the EU 
would be exposed to the effects of the un-availability of the GPS signal, which cannot be 
controlled  since  its  primary  objective  is  to  support  the  military  operations  of  a  third-
country. 

As a consequence, the problem affects the European society overall, and in many ways. 

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3

Meanwhile,  uncertainty  around  the  European  GNSS  has  been  weakening  confidence  in 
potential  downstream  business.  Growing  "competition"  from  third  countries  (US,  Russia, 
China, India) has also changed the context for the development of GNSS applications to the 
detriment of European players as these systems could enter into operation at about the same 
time  as  GALILEO.  Furthermore,  GNSS  cannot  be  considered  as  a  traditional  market  as  the 
US, Russian and Chinese systems are placed under military control, and their specifications 
subject to military rather than commercial considerations: the home-grown industries of these 
countries can directly benefit from the military-funded programs to develop applications and 
services to a sufficient level of maturity before they are brought into the civilian markets.  

As a consequence, compensating for the absence of such resources is necessary to grasp, in 
Europe,  the  same  overall  indirect  benefits  resulting  from  EGNOS  and  GALILEO  as  those 
brought, for instance, by GPS in the US. 

Current plans in that respect are limited to raising awareness among the aviation community 
towards  adopting  EGNOS  and  GALILEO  for  safety  of  life  applications  (primarily  for  en-
route  navigation  and  landing  procedures);  conducting  market  studies  and  providing 
information to actors in other segments potentially interested in using the open signal or the 
commercial  service  of  EGNOS  and  GALILEO  (e.g.  agriculture  for  precision  farming,  road 
charging, asset tracking, scientific applications, oil and gas, surveying, mapping), or the future 
search  and  rescue  service  of  GALILEO  (primarily  for  fisheries  and  maritime  transport); 
granting  the  €38  million  left  for  the  funding  of  research  and  development  in  GNSS 
applications, and monitoring the about €50 million worth of ongoing projects in the area.  

This Impact Assessment demonstrates the need for a more extensive action plan, through the 
analysis  of  a  series  of  policy  options  envisaged  to  foster  the  development  of  EGNOS  and 
GALILEO  downstream  applications  and  to  enhance  the  quickest,  deepest,  broadest 
development of applications across all domains. 

2. 

ANALYSIS OF SUBSIDIARITY: IS EU ACTION NECESSARY, AND DOES IT ADD VALUE? 

The EU right to act is based particularly on article 172 of the Treaty on the functioning of the 
European Union, and the subsequent regulation on GALILEO and EGNOS1. 

The  use  of  EU  satellite  navigation  systems  can  have  wide/deep  economic,  social  and 
environmental  impact;  the  promotion  of  EU  GNSS  directly  supports  EU  strategic  priorities 
such as the Lisbon Agenda, it is transnational in nature and it does cut across several policy 
fields necessarily to be coordinated at EU level. 

The  adoption  of  EU  GNSS  signals  in  several  application  domains  requires  compliance  with 
international standards and certification, for instance in aviation or maritime transport. Action 
at EU level would then avoid duplication and waste of efforts at Member State level.  

The lack of EU action or the undertaking of fragmented or uncoordinated action by Member 
States  alone  would  limit  the  marketability  of  the  identified  applications  (e.g.  different 

1 

Council  Regulation  No  1321/2004  on  the  establishment  of  structures  for  the  management  of  the 
European  satellite  radio-navigation  programmes  and  Regulation  (EC)  No  683/2008  of  the  European 
Parliament and of the Council of 9 July 2008 on the further implementation of the European satellite 
navigation programmes (EGNOS and GALILEO) 

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standards in GNSS-based road charging systems) and create barriers to the free circulation of 
goods and services, or inequality of treatment of the European citizens. 

4

3. 

OBJECTIVES OF EU INITIATIVE: WHAT ARE THE MAIN POLICY OBJECTIVES?  

The  objectives  of  EU  actions  are  to  remove  barriers  and  obstacles  preventing  the 
maximisation  of  the  benefits  generated  by  EGNOS  and  GALILEO  for  the  citizens  and  the 
industry of the Member States of the European Union by: 

(1) 

(2) 

4. 

Ensuring  that  EGNOS  and  GALILEO  technologies  are  applied  and  adopted  early  in 
transport and non transport domains where they can bring benefits 

Ensuring that the European industry (particularly SMEs) captures an increasing market 
share of the GNSS downstream application markets (33% at least2) 

POLICY  OPTIONS:  WHICH  OPTIONS  HAVE  BEEN  CONSIDERED  AND  WHICH  HAVE 
BEEN ASSESSED IN DETAIL? 

The following policy options have been assessed: 

Option 1: No policy change (i.e. the baseline scenario). 

No further activities would be performed by the Commission beyond what it is already in its 
work-plan and no additional budget or resources would be required. 

Option 2: Discontinue existing EU actions (e.g. cut R&D funds). 

The  EC  could  decide  to  discontinue  any  activity  aimed  at  promoting  the  development  of 
downstream applications. 

Option  3:  Regulate  across  application  domains,  making  mandatory  use  of  EGNOS  or 
GALILEO. 

The  EC  proposes  to  the  Council  and  the  Parliament  extensive  regulations  with  the  aim  to 
make mandatory the use of GNSS in as many key domains of applications as possible. 

Option  4a:  Improve  the  framework  conditions  for  the  market  to  work  through  a 
comprehensive Action Plan. 

The  EC  would  undertake  the  over  70  actions  that  address  all  the  issues  (across  a  dozen  of 
transport and non transport domains) highlighted during the stakeholder consultation process 
that started with the Green Paper of 2006. 

2 

The share that Europe is capable to achieve in other sectors of high-technology is in the order of one 
third of the global market. In telecommunication for instance, it reaches 38% (Source: ISTAG Report to 
the  EC:  "Shaping  Europe's  Future  through  ICT",  2006).  Such  a  target  is  indeed  coherent  with  the 
Lisbon  objective  for  the  EU  to  become  the  most  competitive  and  dynamic  knowledge-based  economy  in  the 
world. 

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5

Option  4b:  Improve  the  framework  conditions  for  the  market  to  work  through  a  targeted 
Action Plan  

The EC would select a subset of the actions envisaged in option 4a. The first step leading to 
option  4b  would  be  to  limit  domain-specific  actions  within  a  small  number  of  the  most 
promising  domains,  whilst  providing  sufficient  ground  favourable  to  innovation  across 
domains and to the "bottom-up" uptake of GNSS services. EC would pursue 24 actions. 

Option 5: Adopt a consultative approach (i.e. coordinate and invite all players to deliver the 
necessary actions) 

The  EC  would  involve  all  relevant  public  and  private  stakeholders  in  an  ad  hoc  permanent 
consultative  body  that  should  follow  closely  the  roll  out  of  EGNOS  and  GALILEO 
downstream  applications,  and  tackle  the  underlying  causes  of  the  key  problem  to  ease  the 
functioning of the market forces. 

5. 

ASSESSMENT OF IMPACTS: WHAT ARE THE MAIN ECONOMIC, ENVIRONMENTAL AND 
SOCIAL IMPACTS ASSOCIATED WITH IN TERMS OF BENEFITS AND COSTS? 

Pursuing the objectives will result in significant Economic, Social and Environmental impacts 
across EU-27 and beyond. EU GNSS can also become a reliable tool to enforce internal and 
external policies. 

As demonstrated by several trials, tests and R&D projects, using EGNOS or GALILEO can 
generate increase in the efficiency and safety of aviation, rail and maritime transports. It can 
also allow new pricing schemes on road, fully in line with CO2 emission reduction plans, and 
it  is  the  key  enabler  to  new  strategies  and  services  to  improve  road  transport.  Disabled  and 
elderly  people  will  see  their  mobility  improved,  and  all  citizens  will  benefit  from  accurate 
location based services like real time information on public transport, available services in the 
vicinity, or emergency rescue. 

Satellite navigation downstream applications are knowledge-intensive businesses that enable 
creation of high value added job occupations all along the value chain (i.e. from hardware and 
software  manufacturing  to  the  service  provision).  The  market  size  of  GNSS  downstream 
applications is expected to grow at an annual average 22 % over the next 11 years3. 

Some  applications  are  infrastructure-enhancing  and  generate  several  economic  spill-overs. 
Increasing  capacity  of  existing  infrastructure  and  making  a  more  efficient  use  of  them  will 
also contribute to the reduction of congestion, pollution and other environmental damages4. 

Policy options will cost between €3 and €50 M 
per year from 2010 onwards, including R&D 
budget.  Neither  substantial  incremental  administrative  burden  nor  compliance  costs  are 
envisaged  at  this  stage,  as  the  suggested  policy  option  aims  at  creating  better  framework 
conditions  for  the  market  forces  to  operate.  Overall  the  effort  to  be  spent  in  delivering  the 
policy is tiny proportion of the expected benefits. 

3 
4 

Len Jacobson, based on several sources (2007) 
Some  examples:  Navteq  2009  research  proved  that  car  navigators  increase  fuel  efficiency  by  12%; 
EGNOS enabled landings reduces fuel burning and noises over inhabited areas, rail track network can 
be optimised 

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6

6. 

COMPARISON  OF  OPTIONS:  WHAT  IS  THE  PREFERRED  OPTION  ON  THE  BASIS  OF 
WHICH CRITERIA OR JUSTIFICATION?  

Policy option 1 entails no change of what is currently being performed. Its main benefit lies in 
the  fact  of  adding  neither  new  tasks  and  activities  nor  new  resources  to  the  EC.  Existing 
actions will be carried out (except R&D that will have no funds beyond 2011) but this will not 
be  enough  to  tackle  the  problem  of  slow  development  of  downstream  applications.  It  will 
eventually leave the EU GNSS industry timid and in the current state of uncertainty. 

The  only  benefit  of  Policy  option  2  is  to  marginally  cut  down  on  the  very  few  resources 
currently  devoted  to  GNSS  downstream  application  development  but  it  entails,  even  more 
than policy option 1, a very negative impact on the EU GNSS industry, MS and EU citizen. 

Policy option 3 sends an immediate positive signal to the EU GNSS industry and may even 
rally  enough  attention  to  get  applications  kicked  off  in  certain  domains,  but  with  strong 
opposition  from  some  Member  States  and  of  some  stakeholders  who  consider  regulations 
invasive  and  inappropriate.  The  cost  of  regulating  and  enforcing  from  EC  side  is  also  be 
significant. 

Policy option 4a outreaches extensively across many segments and constitutes a balanced mix 
of  regulation  and  supportive  actions  for  the  downstream  applications  market.  Nevertheless, 
the human resources required for its implementation may simply make it too expensive, with 
a benefit/cost ratio much lower in respect to the next option. This policy could allow to reach 
all  our  objectives,  but  would  however  require  a  level  of  resources  far  beyond  what  can  be 
granted to the European Commission. 

Policy  option  4b  focuses  the  limited  resources  available  on  priority  application  segments, 
creating  a  positive  momentum  in  the  downstream  industry  involved  in  the  most  promising 
markets, thus potentially breeding further efforts beyond the scope of the action plan itself. Its 
cost  will  be  largely  compensated  by  the  achievements  expected  from  the  action  plan.  This 
policy will require fewer resources that option 4a and concentrate them so as to fulfil most of 
our objectives. It fits quite well with what was expressed during the consultations. 

Policy  option  5  may  attract  some  stakeholders  in  the  EU  GNSS  programs  and  therefore 
generate  a  positive  attitude  towards  EGNOS  and  GALILEO.  However,  the  actual  results  of 
this policy option are likely to be poor in the absence of further incentives, and given that the 
lengthy  interactions  needed  to  coordinate  so  many  players  would  not  allow  addressing  the 
urgency  of  the  problem.  It  could  however  achieve  results  in  the  long  term,  providing 
improved user requirements for GNSS. 

This  Impact  Analysis  leads  the  European  Commission  to  propose  to  the  Council  and  to  the 
European  Parliament  to  address  the  problem  cause  by  the  limited,  slow  development  and 
adoption of downstream applications based on EGNOS or GALILEO through the adoption of 
the targeted action plan described in Policy option 4b. 

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Table: Pros and cons of the five options, and how they lead to the proposed choice of option: 

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Option 1 

Option 2  

Option 3 

Option 4a 

Option 4b 

Option 5 

Effectiveness 
reaching 
objectives 

in 
the 

Efficiency  in  using 
resources 

Consistency 
EU 
strategies 
priorities 

with 
objectives, 
and 

High 
risk 
ineffective: 
limited efforts 

to  be 
too 

Only  uses 
resources 

limited 

Consistent 

ineffective: 
send  wrong 
to  GNSS 
and 

Highly 
will 
message 
industry 
stakeholders 

Ineffective,  mainly 
because  of 
strong 
opposition  from  MS 
and 
to 
industry 
invasive regulation 

risk 

to  be 
High 
is 
it 
ineffective  as 
spread 
too 
across 
many  domains,  and 
requires 
resources 
that  cannot  be  made 
available 

Not consistent 

Saving 
of  R&D 
of 
money, 
focus 
management on other 
issues 

Limited  effort,  high 
admin 
on 
MS/Private sector 

burden 

Not fully consistent 

Consistent 

in 
of 

Extensive  effort 
terms 
administration, 
management, 
finances 

and 

Effective: focusing a 
reasonable  amount 
of  resources  on  a 
of 
limited 
priorities 

set 

in 
Focused  effort 
terms 
of 
admin/management 
and  proportionate 
financial 

Consistent 

Time 
saving 
money 

consuming, 
of  R&D 

Consistent 

ineffective: 
Highly 
dispersive,  can  be 
easily derailed, at the 
best  timing  will  not 
fit the need to act fast 
in 
the  window  of 
opportunity 

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8

7. 

MONITORING AND EVALUATION: WHAT ARE THE ARRANGEMENTS TO  ESTABLISH 
THE  ACTUAL  COSTS  AND  BENEFITS  AND  THE  ACHIEVEMENT  OF  THE  DESIRED 
EFFECTS? 

The time span of the proposed policy goes beyond 2020, but focuses initially on 2010-2013. 
The  Action  Plan  may  be  revised  substantially  in  the  light  of  the  exploitation  plans  of  the 
EGNOS  and  GALILEO  systems,  to  be  proposed  by  2010.  Actions  will  be  handled  by  the 
European  Commission  and  related  Agencies,  with  the  involvement  of  national  and  regional 
authorities in the Members States as appropriate. 

The  Commission  will  monitor  the  trends  on  the  markets  and  will  continuously  measure  the 
impact of the actions undertaken, which may lead to update some aspects of the Action Plan 
regularly, maybe every year as in a “rolling programme”. 

As the preferred policy focuses largely on market development, the main indicator of progress 
to be considered is the share of the market that GALILEO and EGNOS will be able to win, in 
each  domain  targeted  by  the  Action  Plan,  as  well  as  the  acceleration  of  GNSS  downstream 
markets resulting from GALILEO/EGNOS launch. 

Other indicators will vary according to the domains: For instance, in road transport, indicators 
of  success  will  include  the  measure  of  the  reduction  of  casualties  or  of  people  injured  in 
accidents relevant in the context of the actions undertaken. In aviation, indicators will include 
the  number  of  EGNOS-equipped  aircraft,  and  the  number  of  airports  having  adopted  and 
certified EGNOS procedures. As for applications dedicated to disabled or elderly people, an 
indicator could be the proportion of European citizens using such services. 

Sales,  employment,  investment  and  innovative  activity  created  by  EU  GNSS  industry  in 
absolute and relative terms will be monitored all along the implementation of the Action Plan, 
possibly  with  the  assistance  of  EUROSTAT,  and  the  development  of  GNSS  downstream 
applications  in  Europe  will  be  benchmarked  against  that  in  other  countries  through  the 
working groups already established in the context of specific GNSS international agreements, 
the monitoring of international competitions such as the Galileo Masters, and the support to 
several information centres in Asia, Latin America, and the Mediterranean countries. 

A macro-econometric model will be available by the end of 2010, to measure several aspects 
of the impact resulting from the adoption of GNSS applications. It will be used to track the 
effect of this EC policy. A scoreboard will allow for assessing progress in implementation the 
Action Plan, which will be broadly shared with stakeholders, and reporting will be provided 
to the Council of the European Union and to the European Parliament. 

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