COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A European Strategy for Low-Emission Mobility
Date: 2016-07-20
Institutions: European Commission, Secretariat-General
Subjects: biofuel, greenhouse gas, innovation, motor vehicle, motor vehicle pollution, non-polluting vehicle, prevention of pollution, reduction of gas emissions, renewable energy, road transport

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 20.7.2016  SWD(2016) 244 final   COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS  A European Strategy for Low-Emission Mobility {COM(2016) 501 final}  
 
 
Table of Contents 

1. General context and policy framework ............................................................................................... 6 

2. Existing EU policies for sustainable transport .................................................................................... 8 

2.1. Low emission vehicles ................................................................................................................. 8 

2.2 Switching towards low emission alternative energy for transport .............................................. 10 

2.3 Efficiency of the transport system .............................................................................................. 13 

2.4 Cross-cutting initiatives .............................................................................................................. 16 

2.4.1 Transport research and innovation ....................................................................................... 16 

2.4.2 EU financing and co-operation instruments ......................................................................... 16 

2.4.3 Support to cities and local communities .............................................................................. 17 

2.5 Action in international aviation and maritime ............................................................................ 19 

2.5.1 International developments .................................................................................................. 19 

2.5.2 EU level action in international aviation and maritime ....................................................... 20 

2.6 Taxation ...................................................................................................................................... 21 

3. Developments under current trends and policies .............................................................................. 23 

3.1 Identifying the GHG emissions gap for transport ....................................................................... 23 

3.2 Key assumptions of the Reference Scenario ............................................................................... 24 

3.3 Reference Scenario main results ................................................................................................. 26 

4. Pathways towards low-emission mobility ......................................................................................... 32 

4.1 Policy measures .......................................................................................................................... 32 

4.1.1 Moving towards zero-emission vehicles .............................................................................. 33 

4.1.2 Switching towards low emission alternative energy for transport ....................................... 35 

4.1.3 Efficiency of the transport system ....................................................................................... 37 

4.1.4 Transport fuels in the EU ETS ............................................................................................. 38 

4.1.5 Cross-cutting initiatives ....................................................................................................... 38 

4.2 Description of the pathways/scenarios ........................................................................................ 40 

4.2.1 Central scenarios .................................................................................................................. 41 

4.2.2 More ambitious pathways/scenarios for low-emission mobility .......................................... 42 

4.3 Analysis of impacts of the pathways/scenarios ........................................................................... 44 

4.3.1 Moderation of energy demand ............................................................................................. 44 

4.3.2 Energy security .................................................................................................................... 51 

4.3.3 Decarbonisation ................................................................................................................... 53 

3 

 
 
 
4.3.4 Other environmental impacts ............................................................................................... 61 

4.3.5 Research, innovation and competitiveness .......................................................................... 63 

4.3.6 Impacts on transport as a business ....................................................................................... 66 

4.3.7 Economic impacts ................................................................................................................ 70 

4.3.8 Social impacts ...................................................................................................................... 78 

5. Conclusions ....................................................................................................................................... 82 

ANNEX I: Historical developments in transport activity, energy use and emissions .......................... 85 

ANNEX II: Analytical work on low-emission mobility ....................................................................... 94 

ANNEX III: Overview of policy measures ......................................................................................... 100 

ANNEX IV: Models and model-based scenarios used in preparing the analytical work ................... 136 

Table of Figures 
Figure 1: Passenger and freight transport projections (average growth rate per year) .......................... 26 
Figure 2: Evolution of total final energy consumption and GHG emissions between 1995 and 2050 . 27 
Figure 3: Evolution of final energy use in transport by type of fuel ..................................................... 28 
Figure 4: Decomposition of CO2 emissions in the Reference scenario (2005-2030) ........................... 30 
Figure 5: Energy savings relative to Reference scenario 2016, in Mtoe (left side) and change in energy 
intensity for 2010-2030 and 2010-2050, in % (right side) .................................................................... 46 
Figure 6: Final energy demand in transport by fuel in 2030 (in % of total) ......................................... 48 
Figure 7: Alternative fuels and energy carriers in transport in 2030 (in % of total energy demand).... 49 
Figure 8: Share of electricity in road transport energy demand (in %) and total electricity demand in 
transport (in Mtoe) ................................................................................................................................ 51 
Figure 9: Oil products used in transport (difference to REF2016, in Mtoe) and oil dependency (in %)
 .............................................................................................................................................................. 53 
Figure 10: Decomposition of CO2 emissions for passenger transport for 2005-2030 (% change) ....... 58 
Figure 11: Decomposition of CO2 emissions for passenger transport for 2005-2030 (in Mt of CO2) .. 58 
Figure 12: Decomposition of CO2 emissions for freight transport for 2005-2030 (% change) ............ 59 
Figure 13: Decomposition of CO2 emissions for freight transport for 2005-2030 (in Mt of CO2) ....... 59 
Figure 14: Evolution of well to wheel CO2 emissions for 2005-2030 and 2005-2050 (in %) .............. 61 
Figure 15: Evolution of NOx and PM2.5 emissions for 2010-2030 and 2010-2050 (growth rates, in %)
 .............................................................................................................................................................. 62 
Figure 16: External costs of air pollution and noise for 2010-2030 and 2010-2050 ............................ 63 
Figure 17: Light duty vehicles by type of powertrain in 2030 and 2050 (in %) ................................... 64 
Figure 18: Liquid and gaseous biofuels in 2030 and 2050 (in % of total liquid fuels and in Mtoe) ..... 65 
Figure 19: Gross average costs, average co-benefits and net average costs of emission reductions in 
the decarbonisation pathways/scenarios ............................................................................................... 76 
Figure 20: External costs of congestion and accidents for 2010-2030 and 2010-2050 ........................ 79 
Figure 21: Share of transport energy demand by mode in 2014 (%) .................................................... 86 
Figure 22: Specific consumption of passenger cars (EU fleet average) ............................................... 87 
Figure 23: Share of transport energy demand by energy carrier in 2014 (%) ....................................... 87 

4 

 
 
 
Figure 24: Share of transport energy demand by energy carrier in 2014, by mode (%) ....................... 88 
Figure 25: Evolution of greenhouse gas emissions by sector (1990=100), EU28 ................................ 90 
Figure 26: Greenhouse gas emissions from transport by mode in 2013 ............................................... 90 
Figure 27: Shares in EU transport CO2 emissions in 2015 (model estimates) ...................................... 91 
Figure 28: Domestic transport emissions and emissions from international aviation, EU28 ............... 91 
Figure 29: Cabotage in the EU in 2014 by host country ..................................................................... 118 
Figure 30: Inter-linkages between models .......................................................................................... 137 
Figure 31: EU28 Gross Inland Consumption (Mtoe, left; shares (%), right) ...................................... 146 
Figure 32: EU28 energy production (Mtoe) ....................................................................................... 146 
Figure 33: Gas - production, net imports and demand (volumes expressed in bcm) .......................... 147 
Figure 34: EU power generation (net) by fuel (Mtoe – left, shares – right) ....................................... 148 
Figure 35: Net power capacity investments by plant type (MWh – for five year period) .................. 148 
Figure 36: Decomposition of electricity generation costs and prices (€'2013 MWh) ......................... 149 
Figure 37: Investment expenditures (5-year period) - demand side, million €'2013 (left, excluding 
transport) and supply side, million €'2013 (right) ............................................................................... 150 
Figure 38: Decoupling of EU energy use and intensity from GDP (2005=100) ................................. 151 
Figure 39: Evolution of final energy demand by sector (Mtoe – left, shares – right) ......................... 151 
Figure 40: Evolution of final energy demand by fuel (Mtoe – left, shares – right) ............................ 152 
Figure 41: Industrial energy demand versus activity (value added) ................................................... 152 
Figure 42: Final energy demand in the residential sector ................................................................... 153 
Figure 43: Trends in transport activity and energy consumption ....................................................... 154 
Figure 44: Evolution of CO2 emissions (Mt) by sector ....................................................................... 155 
Figure 45: Non CO2 GHG emissions (Mt CO2 eq.) ........................................................................... 156 
Figure 46: Development of the EU28 emissions/removals in the LULUCF sector in Mt CO2 until 
2050 .................................................................................................................................................... 158 
Figure 47: Illustrative levelized cost of electricity (expressed in €'2013/MWh-net) .......................... 158 
Figure 48: Evolution of activity of light duty vehicles by type and fuel ............................................ 159 
Figure 49: Projected evolution of energy system costs ....................................................................... 160 
Figure 50: Changes in the excise duty rates for diesel by Member State from 2025 onwards ........... 171 
Figure 51: Final energy demand in transport by fuel in 2050 (in % of total) ..................................... 172 
Figure 52: Alternative fuels/energy sources in transport in 2050 (in % of total energy demand) ...... 172 

5 

 
 
 
 
1. General context and policy framework 

Transport is the backbone of the economy, an enabler of growth and jobs, essential for the functioning 
of  the  single  market  and  the  free  movement  of  goods  and  people.  Market  integration,  economic 
growth and transport activity are strongly related.  

The  global  transition  towards  a  low-carbon  economy  has  started,  supported  by  the  Paris  Climate 
Agreement. Transport will need to play an important role in this transition. The transition towards a 
low-carbon economy also represents a major opportunity for jobs and growth in the transport sector, 
as markets for low-emission mobility grow globally.  

This  transition  will  be  supported  by  a  number  of  disruptive  trends,  such  as  digitalisation  and  new 
technologies.  Transport  is  increasingly  becoming  an  on-demand  service  as  consumer  needs  and 
perceptions  of  mobility  solutions  evolve.  Taken  together,  these  trends  also  imply  important 
competitiveness  challenges  and  significant  effort  will  be  required  from  businesses  and  regulators  to 
turn  them  into  growth  and  employment  opportunities  for  Europe.  A  forward  looking  and  long-term 
policy approach with the aim of ensuring a regulatory and business environment that is conducive to 
meeting the competitiveness challenges that the transition to low-emission mobility implies is a vital 
precondition. The analysis carried out in this paper provides insights on the necessary tools to do this. 

It is estimated that the transport industry at large accounts for 7% of the European gross value added and for 
7.06% of total employment in the EU, corresponding to more than 15 million people in absolute terms (2014 
figures).1  

Greenhouse gas emissions in transport did not show the same decline as those in other sectors, increasing until 
20072 and only since reducing as a result of periods of higher oil prices, increased road vehicle efficiency and 
slower growth in activity due to the crisis. Transport emissions include both those in the EU Emissions Trading 
System (at present domestic and intra-EU aviation, and electricity consumed in the sector) and in sectors outside 
the EU ETS, where it accounts for around a third of emissions.  

EU  transport  is responsible for 33%  of  final energy  consumption  (353 Mtoe)  and 23%  of  total EU  emissions 
(excluding international maritime). Aviation and maritime  contribute an increasing share to the total transport 
emissions over time, going up from 19 to 23% during 1990-2014.3 

Today, transport still relies on oil for 94% of its energy needs.4 Europe imports around 87% of its crude oil and 
oil products from abroad, with a crude oil import bill estimated at around €187 billion in 20155, and additional 
costs to the environment.  

Progress  has  been  made  with  the  EU  share  of  renewable  energy  in  transport  reaching  5.9%  in  2014  and  the 
opening  of  first  production  facilities  for  advanced  biofuels.6  However,  the  development  of  large-scale 
production capacity for advanced biofuels in the EU is likely to be slow, hampered by technological challenges 
and feedstock availability. 

Transport  also  represents  an  environmental  concern  in  terms  of  air  pollution.  Whilst  significant  progress  has 
been made since 1990 in reducing the emissions of air pollutants from transport, it is still responsible for more 

1   5.07% of the gross value added corresponds to transport services (including postal and courier activities) and the rest to 
transport equipment manufacturing; about 11 million jobs correspond to transport services and more than 4 million to 
transport  equipment  manufacturing.  Gross  value  added  statistics  are  estimates  based  on  Eurostat  National  Accounts, 
calculated according to the new ESA2010 methodology. Employment values are based on Eurostat Labour Force Survey 
(15-64 years). 

2   Transport GHG emissions (excluding international maritime) increased by 32% during 1990-2007. 
3   An analysis of historical developments in transport activity, energy use and emissions is provided in Annex I. 
4  
5   For confidentiality reasons, the 2015 figures do not include the Czech Republic. Source: 

Including maritime bunker fuels. 

https://ec.europa.eu/energy/en/statistics/eu-crude-oil-imports 

6     Source: Eurostat 

6 

 
 
                                                            
than  half  of  nitrogen  oxide  (NOx) emissions,  and  contributes  significantly  (around  15%  or  more)  to  the  total 
emissions  of  other  pollutants.7  Road  transport  represented  the  largest  source  of  NOx  emissions  in  2013, 
accounting  for  39%  of  total  EU28  emissions,  and  an  important  source  of  particulate  matter  PM2.5  emissions 
(13%).8 

7   Namely, particulate matter PM10 and PM2.5 emissions, SOx and CO. 
8   EEA  (2015),  European  Union  emission  inventory  report  1990–2013  under  the  UNECE  Convention  on  Long-range 

Transboundary Air Pollution (LRTAP), EEA Technical Report No 8/2015. 

7 

 
 
                                                            
2. Existing EU policies for sustainable transport  

Since 2007 overall emissions from transport have continuously decreased. This section discusses the 
most  important9  EU  policies  for  reducing  greenhouse  gas  (GHG)  emissions  and  other  transport 
externalities,  covering  three  main  areas:  (1)  low  emission  vehicles;  (2)  switching  towards  low 
emission alternative energy for transport and (3) efficiency of the transport system.  

Many of these policy measures were adopted in the context of the 2020 Energy and Climate Policy 
Framework and the 2011 Transport White Paper.  

The  2020  Energy  and  Climate  Policy  Framework  was  agreed  by  the  European  Council  in  March 
2007. It set three targets to be attained by 2020: 20% GHG emissions reduction compared to 1990, 
20%  of  all  EU  primary  energy  to  be  provided  by  renewables,  and  a  20%  improvement  in  energy 
efficiency. The transport sector plays a role in the implementation of these headline targets, and four 
main pieces of legislation have relevance for the EU transport sector: 

(i)  The revised Directive on the European Emissions Trading System (EU ETS Directive); 
(ii)  The  Effort-Sharing  Decision  (ESD)  introducing  national  GHG  reduction  targets  for  non-ETS 

sectors (including transport) for all Member States; 

(iii)  The  Renewable  Energy  Directive  (RED)  laying  down  targets  for  the  overall  use  of  renewable 

energy and for its use in transport10; 

(iv)  The  Energy  Efficiency  Directive  (EED)  establishing  a  set  of  binding  measures  to  help  the  EU 
reach  its  indicative  20%  energy  efficiency  target  (for  the  whole  energy  system,  including 
transport).11 

New  specific  transport-related  measures  were  also  included  to  curb  GHG  emissions  from  road 
transport. The Fuel Quality Directive was revised to require a reduction in the GHG intensity of EU 
transport  fuels  and  CO2  emissions  performance  standards  for  cars  and  vans  were  adopted,  also 
contributing to energy efficiency improvements. 

The  2011  Transport  White  Paper  defined  a  long-term  vision  until  2050  for  a  transport  sector  that 
continues to serve the needs of the economy and of the citizens while meeting future constraints: oil 
scarcity, growing congestion and the need to cut CO2 and pollutant emissions in order to improve air 
quality particularly in cities. The White Paper covers four broad areas of intervention: internal market, 
innovation,  infrastructure,  international  aspects.  For  each  of  these  areas,  a  ten-year  programme  was 
defined with 40 specific action points, containing within each point a handful of specific initiatives of 
relevance.12  An 
different  nature,  different 
implementation report of the 2011 White Paper has been concluded in 2016.13 

time  horizon  and  different  economic/political 

2.1. Low emission vehicles 

European  Regulations  set  CO2  targets  for  new  passenger  cars  and  vans  (collectively  LDVs)  as 
follows:  

(i)  2015 car target: New cars registered in the EU must not on average emit more than 130 grams of 
CO2 per kilometre (gCO2/km) by 2015 in the official test, corresponding to a fuel consumption of 

9  A more comprehensive description can be found in Annex III. 
10   Directive 2009/28/EC 
11   Directive 2012/27/EU 
12   COM(2011) 144 final 
13   SWD(2016) 226 final 

8 

 
 
                                                            
around  5.6  litres  per  100  km  (l/100  km)  of  petrol  or  4.9  l/100  km  of  diesel.  The  average 
emissions of a new car sold in 2014 were 123.4 gCO2/km.14 Provisional data for 2015 indicate 
119.6 gCO2/km.15 

(ii)  2017 light commercial vehicle target: New vans registered must not emit more than an average 
of 175 gCO2/km by 2017, corresponding to a fuel consumption of about 6.6 l/100 km of diesel. 
In 2014, the average van sold in the EU emitted 169.1 gCO2/km.16  

(iii)  2020 light commercial vehicle target: by 2020, the fleet average to be achieved by all new vans 

is 147 gCO2/km, which corresponds to around 5.5 l/100 km of diesel. 

(iv)  2021 car target: by 2021 the fleet average to be achieved by all new cars is  95 gCO2/km. This 

means a fuel consumption of around 4.1 l/100 km of petrol or 3.6 l/100 km of diesel. 

An important complementary measure to help car manufacturers to meet their specific CO2 emission 
targets  is  the  Car  Labelling  Directive.17  It  requires  EU  Member  States  to  ensure  that  relevant 
information  is  provided  to  consumers,  including  a  label  showing  a  car's  fuel  efficiency  and  CO2 
emissions. It aims to raise consumer awareness on fuel use and CO2 emissions of new passenger cars 
which may influence consumers' choice in favour of cars that use less fuel and emit less CO2. 

An evaluation of the existing Regulations18 setting standards for light duty vehicles identified that the 
Regulations  have  been  largely  effective  and  have  delivered  CO2  reductions  at  lower  cost  than 
originally foreseen. However, there are a number of areas where they could be improved, including to 
better take into account the gap between CO2 emissions and fuel consumption values measured during 
laboratory tests at type approval and those encountered in real use. They are being addressed by the 
Worldwide harmonized Light vehicles Test Procedure (WLTP) that is in the process of being put in 
place  at  EU  level  (see  box:  "More  reliable  fuel  consumption  and  CO2  figures  for  consumers  and 
regulators" in section 4.1.1).  

In  addition,  there  are  significant  discrepancies  between  the  real-driving  emissions  of  certain  air 
pollutants and the values measured in the laboratory at test procedure. In particular the NOx emissions 
of diesel cars – which form a large share of the EU market – often drastically exceed the laboratory 
values in real driving. This has a significant negative impact on air quality, especially in urban areas.  

The evaluation of the Car Labelling Directive shows that the Directive was  successful in increasing 
consumer  awareness  of  the  fuel  economy  and  CO2  emissions  of  new  passenger  cars.  However,  the 
report  identified  a  number  of  issues  that  prevented  the  Directive  from  being  more  effective  in 
stimulating the uptake of vehicles with lower fuel consumption and CO2 emissions. 

For  Heavy  Duty  Vehicles  (HDVs),  the  first  initiative  to  tackle  GHG  emissions  in  the  EU  was  a 
strategy  adopted  in  2014.19  Despite  the  economic  importance  of  fuel  consumption,  CO2  emissions 
from HDVs are currently neither measured nor reported. The strategy focuses on short-term action to 
certify, monitor and report HDV emissions - an essential first step towards reducing them. To support 
this,  the  Commission  has  developed  a  computer  simulation  tool,  VECTO,  to  calculate  fuel 
consumption and CO2 emissions from new vehicles (trucks and buses).  

14   EEA (2015), Monitoring CO2 emissions from new passenger cars and vans in 2014, Technical report No 16/2015.   
15   Source: http://ec.europa.eu/clima/news/articles/news_2016041401_en.htm 
16   EEA (2015), Monitoring CO2 emissions from new passenger cars and vans in 2014, Technical report No 16/2015. 
17   Directive 1999/94/EC 
18   Ricardo-AEA and TEPR (2015), Evaluation of Regulation 443/2009 and 510/2011 on the reduction of CO2 emissions 

from light-duty vehicles, available at: 
http://ec.europa.eu/clima/policies/transport/vehicles/docs/evaluation_ldv_co2_regs_en.pdf 

19   COM(2014) 285 final 

9 

 
 
                                                            
In addition, the Clean Vehicles Directive20 mandates public procurers to consider fuel consumption, 
CO2, and pollutant emissions when purchasing road transport vehicles, giving them various options to 
do so. The conclusions of the evaluation of the Directive show that it is relevant, and that it resulted in 
a  benefit/cost  ratio  of  1.2.21  However  it  has  had  limited  effectiveness  and  efficiency  and  as  such 
reduced CO2 emissions much less than originally expected.  

Heavy goods vehicles, buses and coaches in the EU must comply with certain rules on weights and 
dimensions for road safety reasons and to avoid damaging roads, bridges and tunnels.22 The impact 
assessment  of  the  Directive23  estimated  that  these  measures  will  contribute  to  7  to  10%  of  GHG 
emissions reduction in 2030 compared to the baseline. 

Tyres  sold  in  the  EU  are  subject  to  energy  labelling  requirements  through  Regulation  (EC)  No 
1222/2009. Tyre labels help consumers choose vehicle tyres that are more fuel efficient, have better 
wet  braking  and  are  less  noisy.  As  tyres  account  for  20  to  30%  of  a  vehicle’s  fuel  consumption, 
choosing energy efficient tyres results in significant fuel cost savings. 

2.2 Switching towards low emission alternative energy for transport 

Europe is still heavily dependent on liquid fuels and therefore on imported oil for transport. While oil 
prices have recently reduced, long term prices are projected to remain high.24  Furthermore, the supply 
of  oil  is  to  a  large  degree  sourced  from  politically  unstable  regions  raising  concerns  relating  to 
security of supply, future price volatility and the potential results of price shocks.  

Policies have been adopted at EU level to reduce the GHG intensity of fuels, increase  the supply of 
low  emission  alternative  fuels25  including  renewables,  and  introduce  enabling  infrastructure.  In  the 
future,  as  market  penetration  of  electric  vehicles  is  expected  to  grow  the  challenges  that  this  may 
impose for the electricity network may need to be addressed.  

The use of renewable energy is promoted by the Renewable Energy Directive (RED)26 requiring that 
the share of renewable energy in the EU is 20% of gross final energy consumption by 2020, reflected 
through  national  targets.  It  also  contains  a  target  for  each  Member  State  to  have  a  10%  share  of 
renewable  energy  in  transport  by  2020.  This  provision  is  complemented  by  Article  7a  of  the  Fuel 
Quality Directive (FQD)27 obliging fuel suppliers to reduce the GHG intensity (gCO2/MJ) of fuels 
supplied by 6% in 2020 compared to 2010.   

The 2015 renewables energy progress report28 indicated that achieving the target for renewable energy 
in transport is challenging but feasible, with some Member States making good progress. At EU level, 

20   Directive 2009/33/EC 
21   Reductions of operating costs (€32 to 393 million), reductions of external costs related to CO2 (€10 to 124 million) and 
air  pollutants  (€1  to  4  million).  Source:  RICARDO-AEA  (2015),  Ex-Post  Evaluation  of  Directive  2009/33/EC  on  the 
promotion  of  clean  and  energy-efficient  road  transport  vehicles,  available  at:  http://ec.europa.eu/transport/facts-
fundings/evaluations/doc/2015-09-21-ex-post-evaluation-directive-2009-33-ec.pdf 

22   Directive 96/53/EC amended by Directive 2015/719/EU; to be transposed by Member States in national legislation  by 

May 2017. 

23   SWD(2013) 109 final 
24   IEA (2015), World Energy Outlook 2015. 
25   Directive 2014/94/EU defines ‘alternative fuels’ as fuels or power sources which serve, at least partly, as a substitute for 
fossil oil sources in the energy supply to transport and which have the potential to contribute to its decarbonisation and 
enhance the environmental performance of the transport sector. They include, inter alia: electricity; hydrogen; biofuels; 
synthetic and paraffinic fuels; natural gas, including biomethane, in gaseous form (compressed natural gas (CNG)) and 
liquefied form (liquefied natural gas (LNG)); liquefied petroleum gas (LPG). 

26   Directive 2009/28/EC 
27   Directive 2009/30/EC 
28   SWD(2015) 117 final 

10 

 
 
                                                            
the share of renewable energy in transport reached 5.9% in 2014. A mid-term evaluation of the RED 
indicated that in transport the mandatory target has been important for the deployment of renewable 
energy  in  the  sector,  mainly  through  implementation  of  national  blending  obligations.  However, 
progress  has  been  slow;  the  main  reason  has  been  policy  uncertainty  at  the  EU  level  regarding 
biofuels, low competitiveness of biofuels in terms of prices and the increasing awareness that certain 
biofuel production pathways may increase overall GHG emissions when emissions from indirect land 
use  change  (ILUC)  are  taken  into  account.  In  addition,  there  has  been  a  lack  of  commercially 
available alternative, advanced biofuels.29 

There  have  been  concerns  about  the  sustainability  of  biofuels  supplied  in  the  EU,  particularly  with 
regards to their indirect impacts and potential to cause ILUC. In order to mitigate these impacts, both 
the  RED  and  the  FQD  were  amended  by  Directive  2015/1513/EU  (the  "ILUC  Directive")  which 
introduced a cap on the amount of food or feed based biofuels (7%) that can be counted towards the 
2020  target  for  renewable  energy  in  transport.  Member  States  also  have  the  option  of  applying  this 
cap  towards  obligations  to  meet  the  FQD.  The  legislation  introduced  an  indicative  sub-target  for 
‘advanced’ biofuels that is to be set by Member States by April 2017, and increased the contribution 
that renewable electricity in transport makes to the RED targets. 

For  aviation,  biofuels  meeting  the  sustainability  criteria  of  the  RED  are  exempted  from  obligations 
under  the  EU  ETS  and  aviation  fuels  can  also  contribute  towards  the  FQD  target.  In  addition,  the 
European Advanced Biofuels Flightpath, launched in 2011 by the European Commission, aims to 
achieve 2 million tonnes of sustainable biofuels in aviation by 2020.30,31 However, due to the current 
price  gap  with  conventional  jet  fuel  demand  for  sustainable  alternative  fuels  in  aviation  has  so  far 
been limited and there has been no regular production of aviation alternative fuels in Europe.32 

In  January  2013,  the  European  Commission  adopted  the  European  Alternative  Fuels  Strategy  for 
all  modes  of  transport  indicating  action  was  required  on  alternative  fuels  infrastructure,  common 
technical  specifications,  consumer  acceptance  and  technological  development,  including  advanced 
biofuel production. The  Directive on the deployment of alternative fuels infrastructure33, part of 
the 2013 Strategy, requires Member States to submit to the Commission national policy frameworks 
for  the  market  development  of  alternative  fuels  and  their  infrastructure  by  November  2016.  It 
specifies the required coverage and the timing by which specific infrastructure in the different modes 
must  be  put  in  place,  the  development  of  harmonized  EU-wide  standards  for  recharging  points  for 
electric vehicles and refuelling points for natural gas (LNG, CNG) and hydrogen, and the provision of 
consistent  and  clear  consumer  information.  The  impact  assessment  showed  that  investing  in  a 
minimum  recharging/refuelling  network  is  the  most  efficient  way  to  promote  alternative  fuel 
vehicles.34,35 The implementation of the Directive will also be a driver for the market uptake of natural 
gas and biogas vehicles and vessels in the EU. The level of ambition in Member States will be crucial 
for the deployment of alternative fuels in the EU. 

29   COM(2015) 293 final 
30   Source: https://ec.europa.eu/energy/sites/ener/files/20130911_a_performing_biofuels_supply_chain.pdf 
31   European  Advanced  Biofuels  Flightpath  is  an  industry-wide  initiative  to  accelerate  the  market  uptake  of  aviation 

biofuels in Europe. 

32   EEA, EASA and Eurocontrol (2016), European Aviation Environmental Report 2016. 
33   Directive 2014/94/EU 
34   SWD(2013) 5 final 
35   While infrastructure alone has no major direct impact on CO2 emissions, it can have a very large and positive effect in 
combination  with  other  initiatives  targeted  at  the  introduction  of  cleaner  vehicles.  About  0.9  to  1.3%  CO2  emissions 
reduction (76 to 81 Mt of CO2) could be achieved by 2030, relative to the baseline, and 1.1 to 3.4% (138 to 158 Mt of 
CO2) by 2050. 

11 

 
 
                                                            
 What are the barriers to faster road transport electrification? 

Recharging infrastructure and its integration within the electricity grid: 

- Users need to be able to charge their vehicles anywhere in Europe. The three main challenges to solve are: (i) 
defining  clear  interoperability  rules;  (ii)  ensuring  pan-European  coherent  and  equivalent  service  levels;  (iii) 
ensuring harmonisation of data collection and accessibility to real time traffic information. 

-  Local  grid  connection  and  capacity.  Smart  charging  and  –  in  the  longer  term  –  vehicles  to  grid  electricity 
supply need to be enabled and encouraged within the electricity system. Electricity storage needs to be fully 
enabled. 

- Connection cost for high power capacity. Transparency with respect to distribution tariff design is needed in 

order to avoid discrimination against high power charging points. 

- Availability of recharging points in private buildings. About 90% of electric vehicles are charged at home or at 
work.  However,  Directive  2014/94/EU  does  not  mandate  private  recharging  points  although  Member  States 
should take measures to promote them.  

- Clarify the business case for high power charging points given the current low number of electric vehicles.36   

Users awareness and acceptance to support electric vehicles' commercialisation: 

- Lack of customer information and awareness of the benefits of electric vehicles.  

-  Lack  of  coordinated  effort.  It  is  crucial  that:  Member  States  are  ambitious  and  propose  supportive  National 
Policy Frameworks37, car manufacturer propose more vehicle models at affordable prices, car dealers actively 
propose electric propulsion powertrains to potential buyers. 

-  Electro-mobility  is  not  fully  considered  in  urban  mobility  policies.  Actions  are  needed  to:  fully  integrate 
electric  vehicles  in  urban  mobility  policies  (e.g.  promote  electric  car-sharing,  recharging  points  at  train 
stations),  to  support  the  market  uptake  of  electric  buses  and  other  electric  vehicles  through  e.g.  public 
procurement. 

Technical development of batteries to meet higher range and lower vehicles cost: 

- The improvement of the range of electric vehicles to 400–500 km will be a key success factor in the coming 
years. However, it is also important to develop short range (up to 150 km) low cost electric vehicles, including 
light  electric  vehicles  such  as  two  wheelers  (scooters  and  motors),  which  can  be  very  effective  in  city 
environments. To keep European competitiveness in this market, the deployment of European based battery 
"competence centres" (material, production and manufacturing) is critical. 

Missing common technical specifications at the EU or global level: 

-  Common  connector  interfaces  between  electric  vehicle  and  infrastructure  have  been  set  in  Directive 
2014/94/EU  but  the  development  of  a  common  protocol  for  charging  has  not  been  addressed.  Common 
interfaces for e-buses and for inductive charging are still to be developed.  

- The work on smart charging standardisation, communication protocols and related test procedures needs to be 
completed  and  harmonization  of  rules  for  type  approval  of  electric  vehicles  at  United  Nations  Economic 
Commission for Europe (UNECE) needs to continue, including upgrading of current batteries to more efficient 
ones. 

36   For example, actions like quantifying the investment necessary for the deployment of minimum recharging infrastructure 
along  the  Trans-European  Transport  Network  (TEN-T)  corridors,  facilitating  the  identification  of  project  pipelines, 
addressing risk assessment and designing financial products to support private investment, may support the built up of a 
business case. 

37   Directive  2014/94/EU  should  be  transposed  by  Member  States  into  national  legislation  and  Member  States  should 
submit their National Policy Frameworks by November 2016, foreseeing the deployment of electric recharging points in 
urban areas by 2020 and on the TEN-T network by 2025. 

12 

 
 
                                                            
Adding new loads – such as electric vehicles – brings additional challenges to the electricity network 
that  at  certain  times,  and  in  certain  segments,  already  operates  at  its  limits.  Efficiently  integrating 
those  new  loads  will  only  be  possible  if  full  use  of  flexibility  is  made,  with  charging  done  at  high 
production times and during those periods when there is no network congestion. For this to happen, 
consumers  need  to  have  access  to  the  technical  tools  to  manage  demand  (smart  meters)  and  have  a 
financial  incentive  to  shift  demand.  The  Electricity  Market  Directive38  contains  provisions  for 
Member  States  to  analyse  the  costs  and  benefits  of  the  roll  out  of  smart  meters,  and  roll  out  those 
meters to at least 80% of all consumers by 2020 if the cost-benefit analysis is positive. 

In  addition,  the  European  Commission  is  actively  pursuing  greater  international  cooperation  and 
the  global  harmonisation  of  the  technical  requirements  and  tests  for  alternative  propulsion 
vehicles, including electric vehicles. Global standards for motor vehicles are the responsibility of the 
World Forum for Harmonization of Vehicle Regulations, a permanent working party (WP.29) under 
the  United  Nations  Economic  Commission  for  Europe  (UNECE).  The  resulting  rules  are  not  only 
applicable  in  the  EU  but  also  in  some  60  other  countries.  This  reduces  development  costs,  avoids 
duplication  of  administrative  procedures,  improves  industry's  competitiveness  and  increases  the 
attractiveness  of  the  EU  market  as  an  investment  destination.  Work  on  a  new  Global  Technical 
Regulation on the safety of electric vehicles is under way and the European Commission is one of the 
key  sponsors  of  this  project.  In  addition,  work  in  the  UNECE  framework  is  also  ongoing  on  the 
environmental aspects of electrified light duty vehicles. This includes the development of a number of 
technical  elements  for  inclusion  in  the  Worldwide  harmonized  Light  vehicles  Test  Procedure 
(WLTP), such as the determination of the electric driving range.  

2.3 Efficiency of the transport system 

Acknowledging  that  an  integrated  system  approach  is  required  to  put  the  transport  sector  on  a 
sustainable path, several initiatives have been designed to address the overall efficiency of the sector, 
support multimodal integration, and address negative externalities – including CO2 emissions.  

CO2 emissions are one of the main negative externalities caused by transport along with air pollution, 
congestion,  noise,  accidents,  etc.  The  2011  White  Paper  on  Transport  set  a  roadmap  for  gradually 
internalising external costs in the sector to move towards full internalisation in all modes by 2020. 
In  monetary  terms,  currently  the  most  important  measure  having  the  effect  of  internalising  external 
costs  in  transport  is  the  taxation  of  fuel39,  which  represented  around  1.4%  of  GDP  in  2012  (about 
€188 billion).40 Infrastructure charging, regulated through the "Eurovignette" Directive41, is another 
important  measure  in  internalising  transport  externalities.  According  to  the  2013  evaluation  of  EU 
road  charging  policies42,  reducing  air  pollution  has  been  achieved  by  Euro  class-differentiation  of 
network-wide  tolls,  more  than  through  the  use  of  vignette  systems.  However,  the  effect  on 
decarbonisation  has  been  limited  so  far,  as  tolls  remain  low  compared  to  the  overall  costs  of  road 
transport  and  concern  only  a  small  portion  of  road  traffic,  and  also  because  road  transport  is 
characterised  by  low  price  elasticity.  However,  according  to  a  2013  analysis  by  Ricardo-AEA 
improvement in the functioning of the Eurovignette and European Electronic Tolling System (EETS) 
system in the EU could lead to a decrease of 1.7% in CO2 emissions from the road sector in the EU. 

38   Directive 2009/72/EC 
39   Directive 2003/96/EC 
40   Source: http://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/data_on_taxation/index_en.htm 
41   Directive 2011/76/EU amending Directive 1999/62/EC (the "Eurovignette" Directive) 
42   Ricardo-AEA (2014), Evaluation of the implementation and effects of EU road charging policy since 1995, available at: 

http://ec.europa.eu/smart-regulation/evaluation/search/download.do?documentId=10296156 

13 

 
 
                                                            
Intelligent  Transport  Systems  (ITS)  can  significantly  contribute  to  a  cleaner,  safer  and  more 
efficient transport system. The ITS Action Plan43 suggested a number of targeted measures with the 
goal  to  create  the  momentum  necessary  to  speed  up  market  penetration  of  ITS  applications  and 
services  in  Europe.  A  legal  framework44  was  adopted  to  accelerate  the  deployment  of  ITS  across 
Europe. The impact assessment for the Action Plan estimated that it could decrease fuel consumption 
and CO2 emissions by up to 4.1%, road congestion by 2.5% and accident costs by 7.2% compared to 
the baseline by 2020.45 The 2013 mid-term evaluation showed that large scale deployment must still 
take  place,  and  without  it  these  impacts  will  remain  limited.46  Benefits  are  expected  to  be  mainly 
generated from further implementation of the ITS Directive that entered into force in 2010. A number 
of measures adopted in this context put in place mechanisms to share real time road traffic data and 
travel  data  to  reduce  congestion  and  increase  efficiency,  as  well  as  more  sustainable  behaviour 
through  more  accurate  multimodal  passengers  travel  information  services.  Better  travel  and  traffic 
information  would  also  result  in  modal  shift  from  taxis  to  local  public  transport  at  airports  and 
stations. 

The Combined Transport Directive47 establishes common rules for promoting combined transport48 
in  an  effort  to  curb  the  negative  externalities  of  road  transport,  and  thus  contributing  to  reduced 
congestion and environmental pollution, road traffic safety, as well as better management of transport 
resources. According to its evaluation, it continues to be an effective tool to support modal shift. The 
shift from road to rail/road combined transport has saved in 2011 (compared to road only transport) 
7.3  Mt  of  CO2,  while  the  shift  to  inland  waterways  has  saved  0.96  Mt  of  CO2.  However,  there  are 
shortcomings in its transposition and implementation caused by somewhat ambiguous language, the 
diverging transposition and implementation at Member State level and outdated provisions.49  

The  Energy  Efficiency  Directive50  contains  several  provisions  of  importance  to  energy  demand 
reduction  and  management,  as  well  as  increased  use  of  renewable  electricity,  including  in  the 
transport sector. A number of Member States have already envisaged actions in the transport sector 
(e.g.  measures  targeting  the  rail  transport,  promotion  of  modal  shift  and  encouragement  of  use  of 
public  transport  or  cycling  and  walking;  measures  supporting  the  use  of  electric,  hydrogen  or  more 
fuel-efficient cars, behaviour measures like driver training) in view of reaching their national energy 
efficiency targets by 2020.51 The majority of Member States have, however, excluded transport from 
the  application  of  Article  7  of  the  Directive  which  requires  that  energy  distributors  or  retail  energy 
sales  companies  achieve  1.5%  energy  savings  per  year  through  the  implementation  of  energy 
efficiency measures. 

Other  existing  EU  policies  and  measures  to  meet  a  range  of  different  objectives  for  the  transport 
sector have important co-benefits in terms of CO2 emissions reduction. They include: 

43   COM(2008) 886 final 
44   Directive 2010/40/EU 
45   SEC(2008) 3084 
46   Ramboll (2013), Mid-term evaluation of the implementation of the ITS action plan, available at: 

http://ec.europa.eu/transport/themes/its/studies/doc/2013-03-06-mid-term-evaluation-of-the-implementation-of-the-its-
action-plan.pdf 

47   Directive 92/106/EEC 
48   Combined transport is a multimodal transport with intermodal load units (such as containers), and in which the road leg 

is limited and the major part of the route is carried out by rail, inland waterways or maritime transport. 

49   SWD(2016) 140 final 
50   Directive 2012/27/EU 
51   COM(2015) 574 final 

14 

 
 
                                                            
  Regulations  providing  for  the  market  access  to  the  international  road  freight  and  passenger 
market52;  by  optimizing  transport  operations  they  can  lead  to  reduced  fuel  consumption  and 
carbon emissions. According to research by the Dutch Institute for Transport Policy53,54, increased 
market access could lead to a reduction of empty trips by up to 1.9% vehicle-km and a decrease in 
the EU CO2 emissions of up to 1.6% (as percent of total road transport CO2 emissions). 

  Regulation  for  the  establishment  and  organization  of  international  Rail  Freight  Corridors55, 
aiming  to  boost  rail  freight  in  terms  of  volume,  market  share,  quality  and  reliability;  by  shifting 
traffic from road to rail freight the Regulation was estimated to result in emissions  reductions of 
0.7 to 1.1 Mt CO2 by 2020 and contribute to reduction in air pollutants.56  

  The River Information Services (RIS) Directive57, establishing a framework for the deployment 
and  use  of  harmonized  RIS  in  the  EU  in  order  to  support  inland  waterway  transport  and  to 
facilitate interfaces with other transport modes. According to the evaluation of the RIS Directive58, 
implementation by 2011 has brought annual benefits in terms of fuel and CO2 emissions savings of 
1  to  2%;  due  to  differences  in  the  pace  of  RIS  implementation,  the  full  benefits  have  not  yet 
materialized. 

  Directive  establishing  the  initial  qualification  and  periodic  training  requirements  for  EU 
drivers  of  certain  road  vehicles  for  the  carriage  of  goods  or  passengers59;  its  environmental 
impacts  come  from  fuel  and  corresponding  emission  savings  as  a  result  of  eco-driving  courses, 
estimated at 2 to 4% reduction in fuel use and CO2 emissions.60  

  Directive  2002/85/EC,  requiring  all  heavy  commercial  vehicles  to  be  equipped  with  speed 
limiters; the analysis showed that for the EU as a whole the introduction of speed limiters resulted 
in a reduction of the total CO2, NOX and PM emissions of heavy commercial vehicles of about 1% 
(between 0 and 2% as function of posted speed limit).61 

International  cooperation  is  fundamental  in  the  area  of  connected  and  automated  driving. 
International  cooperation  with  US  and  Japan  on  aspects  related  to  security  and  harmonisation  of 
standards  is  already  taking  place  since  2009  and  2011,  respectively.  In  addition,  new  rules  for  the 
approval  of  automated  and  connected  vehicles  as  well  as  traffic  rules  are  being  developed  in  the 
framework of UNECE. Learning from collaboration with international partners represents a key asset 
for future progress; enhancing cooperation in the area of communications and spectrum, security and 
data  protection  is  a  must.  Therefore,  the  C-ITS  Platform  recommended  the  Commission  to  enlarge 
cooperation on deployment practices at government level with countries like Canada, Australia, South 
Korea and others.62 

52   Regulations (EC) No 1072/2009 and (EC) No 1073/2009 
53   Dutch Institute for Transport Policy (2010), Cabotage and CO2 reduction, available at: 

https://www.rijksoverheid.nl/documenten/rapporten/2010/06/08/cabotage-and-co2-reduction; 

54   European Parliament (2013), Development and implementation of EU road cabotage 
55   Regulation (EU) No 913/2010 
56   SEC(2008) 3028 
57   Directive 2005/44/EC 
58   Panteia (2014), Evaluation of RIS Implementation for the period 2006-2011, available at: 

http://ec.europa.eu/transport/modes/inland/studies/doc/2014-07-evaluation-of-ris-implementation-main-report.pdf 

59   Directive 2003/59/EC 
60   Panteia  and  TML  (2014),  Ex-post  evaluation  study  report  -  Study  on  the  effectiveness  and  improvement  of  the  EU 
training  of  professional  drivers,  available  at:  http://ec.europa.eu/transport/facts-

legislative 
fundings/evaluations/doc/2014_ex_post_evaluation_study_training_drivers_en.pdf 

framework  on 

61   TML et al. (2013), Evaluation of the application of speed limitation devices and intelligent speed adaptation systems 

(ISA) to commercial vehicles, available at: 
http://ec.europa.eu/transport/road_safety/pdf/vehicles/speed_limitation_evaluation_en.pdf  
62   Source: http://ec.europa.eu/transport/themes/its/doc/c-its-platform-final-report-january-2016.pdf 

15 

 
 
                                                            
2.4 Cross-cutting initiatives 

2.4.1 Transport research and innovation 

The  transition  needed  in  the  transport  sector  for  its  decarbonisation  can  only  be  achieved  through 
extensive  research  and  innovation.  A  major  emphasis  of  the  €6.4  billion  transport  research  and 
innovation programme under Horizon 202063 is aimed at projects addressing energy use issues, both 
directly  and  indirectly.64  In  2014,  for  example,  57%  of  budget  expenditures  from  the  Transport 
Challenge  calls  were  related  to  climate  action,  representing  a  clear  over-achievement  against  the 
overall target set for mainstreaming of climate action in Horizon 2020 by 35%. 

In  addition,  a  number  of  key  programmes  have  been  established  for  transport  decarbonisation, 
including  to  support  the  development  of  light  and  heavy  duty  electric  vehicles  (contractual  public-
private  partnership  on  European  Green  Vehicle  Initiative)  and  fuel  cells  (Fuel  Cells  and  Hydrogen 
Joint  Undertaking),  to  promote  low  carbon  and  non-polluting  transport  for  cities  (Horizon  2020 
funding  for  urban  mobility  and  smart  cities),  to  facilitate  the  market  uptake  of  liquefied  natural  gas 
(LNG)  for  heavy  duty  vehicles  (LNG  Blue  Corridors  project65  funded  under  the  7th  Framework 
Programme  ‘European  Green  car  initiative’),  to  facilitate  more  efficient  road  use,  rail  innovation 
(Shift2Rail  Joint  Undertaking)  and  more  efficient  air  transport  (SESAR  Joint  Undertaking)  and 
energy efficient aircrafts (Clean Sky 2 Joint Undertakings), with the JU's co-financed by the EU from 
Horizon 2020. These programmes are complemented by research and innovation activities related to 
key enabling technologies in the areas of new materials (e.g. lightweight materials, composites) and 
advanced manufacturing (e.g. additive manufacturing) contributing to development and production of 
new low-emission vehicles. 

The  SET-Plan  promotes  research  and  innovation  efforts  across  Europe  by  supporting  technologies 
with  the  greatest  impact  on  the  EU's  transformation  to  a  low-carbon  energy  system,  including  fuels 
and  electricity  supply  to  the  transport  sector,  and  a  number  of  SET-Plan  actions  for  research  and 
innovation  are  of  particular  importance  for  promotion  of  electro-mobility  and  the  use  of  renewable 
energy in transport. 

2.4.2 EU financing and co-operation instruments  

The  Connecting  Europe  Facility  (CEF)66  and  the  European  Structural  and  Investment  Funds 
(ESIF)  are  the  main  EU  funding  instruments  during  2014–2020  for  development  of  infrastructure, 
providing €24.04 billion and €70 billion respectively for the transport sector.  

The  Trans-European  Transport  Network  (TEN-T)  policy  implementation  and  CEF  mobilize 
investment in Europe to boost jobs and growth, contribute to the development of a connected digital 
single market and to a resilient Energy Union, while supporting the decarbonisation of the transport 
sector. The CEF call 2014 allocated 92% of the total envelope of €13 billion of grant co-financing, to 
environmentally friendly modes, innovative technologies and investment on multimodality  and ITS, 
and  about  82%  for  rail  and  inland  navigation  investment  alone.  Financing  is  also  key  for  the 

63   Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at 
securing Europe's global competitiveness. The goal is to ensure Europe produces world-class science, removes barriers 
to innovation and makes it easier for the public and private sectors to work together in delivering innovation. 

64   The  Horizon  2020  programme  has  been  fundamentally  changed  to  put  a  much  greater  emphasis  on  near  market 

innovation and cooperation with industry, to ensure a faster and broader take up of transport innovation. 

65   12  LNG  stations  (out  of  the  planned  14)  were  in  operation  by  the  end  of  March  2016,  which  represents  18%  of  the 
present  LNG  infrastructure  at  EU  level.  120  trucks  are  being  demonstrated  and  monitored.  The  development  of 
optimised engines with an efficiency close to the diesel powertrains is also part of the project. 

66   Regulation (EU) No 1316/2013 

16 

 
 
                                                            
development  of  alternative  fuels:  €225  million  in  EU  funding  was  allocated  to  projects  related  to 
alternative fuels under the CEF call 2014.  

Substantial funding for the TEN-T network comes from the European Structural and Investment 
Funds (ESIF) and from the European Investment Bank (EIB).67 Cohesion policy financial support 
is  concentrated  on  cohesion  countries  and  less-developed  regions  of  the  EU,  where  there  are  still 
significant needs for sizeable public investments into transport. It is expected that close to 20% of the 
overall  cohesion  policy  envelope  for  2014-2020  will  go  towards  supporting  transport  investments, 
amounting  to  almost  €70  billion.  This  includes  an  estimated  €39  billion  for  supporting 
environmentally  friendly  modes,  innovative  technologies  and  investment  on  multimodality  and  ITS 
by  Member  States,  of  which  €18.8  billion  for  rail.  Sustainable  urban  mobility  investments  are 
supported with €12 billion, based on integrated urban strategies, of which €1.8 billion for walking & 
cycling.  In  addition,  the  transport  sector  will  receive  support,  e.g.  for  research  and  innovation, 
technical development, and entrepreneurship, under the Smart Growth pillar of cohesion policy. 

2.4.3 Support to cities and local communities 

In December 2013, the European Commission adopted the Urban Mobility Package comprising of a 
Communication  and  Guidelines  on  Sustainable  Urban  Mobility  Plans  (SUMPs),  and  four  Staff 
Working Documents on City Logistics, Access Regulation, Urban Road Safety and Urban Intelligent 
Transport  Systems.68  The  actions/initiatives  announced  in  the  Urban  Mobility  Package  are  currently 
under implementation and cover various non-binding measures that would help and encourage cities 
in  designing  and  implementing  ambitious  measures  through  SUMPs,  in  particular  to  increase  the 
share  of  public  transport,  cycling  and  walking.  Improving  urban  mobility  has  a  high  potential  to 
reduce the CO2 emissions from transport, as cities account for 23% of transport CO2 emissions69, and 
especially  high  exceedances  of  air  pollutants  that  are  widespread  over  European  urban  areas.  A 
study70 estimated that the potential CO2 emissions reductions of 21 policy measures found in SUMPs 
ranges between 15 and 18 Mt of CO2 for 2030, equivalent to 7-8.8% emissions reduction compared to 
2010 if all measures were implemented in the whole of the EU. 

The Partnerships under the Urban Agenda for the EU will offer a framework for cities, Member States 
and other stakeholders to exchange experiences and best practices for the urban mobility dimension, 
will  involve  cities  in  the  design  of  policies  and  the  delivery  on  the  ground  by  establishing  a  new 
working method based on a multilevel and cross sectoral multilevel approach. 

Through initiatives such as the Covenant of Mayors, the European Innovation Partnership on Smart 
Cities  and  Communities,  CIVITAS  or  Urban  Innovative  Actions,  the  Commission  supports 
cooperation of public and private actors:  

  The European Innovation Partnership on Smart Cities and Communities, launched in 2012, is 
Europe's  main  initiative  to  foster  the  roll-out  of  innovative  integrated  smart  city  solutions  at  the 

67   A  cost  benefit  analysis  is  systematically  implemented,  including  the  carbon  externality.  In  2014,  the  EIBs  lending 
volume to strategic transport infrastructures, including TEN-T was €8.2 billion leveraging €33.8 billion of investment; in 
addition, lending to sustainable transport such as urban public transport was €5.1 billion leveraging a total investment of 
€23.8  billion.  About  57%  of  the  EIB  portfolio  is  invested  in  railways,  urban  and  sea  transport.  The  EIB  tracks  and 
reports systematically the amount of climate relevant lending in its portfolio, with a target set to at least 25% of the total, 
and relative and absolute carbon footprint of relevant projects. 

68   Source: http://ec.europa.eu/transport/themes/urban/urban_mobility/ump_en.htm 
69   According  to  the  EU  Reference  scenario  2016,  based  on  PRIMES-TREMOVE  model  developed  by  the  National 

Technical University of Athens (ICCS-E3MLab). 

70   JRC (2013), Quantifying the Effects of Sustainable Urban Mobility Plans, available at: 

http://ftp.jrc.es/EURdoc/JRC84116.pdf  

17 

 
 
                                                            
intersection  of  transport,  energy  and  ICT  at  large  scale.  So  far,  over  4,000  partners  from  public 
authorities, companies, research and other organisations have signed up to the joint market place. 

  The  Covenant  of  Mayors  was  launched  in  2008  by  the  European  Commission  as  a  bottom-up 
initiative to endorse and support the efforts deployed by local authorities in the implementation of 
sustainable  energy  policies;  over  55%  of  around  3,500  signatories'  Sustainable  Energy  Action 
Plans  analysed  in  2015  included  measures  on  transport71,72,  mainstreaming  sustainable  mobility 
into local authorities' strategic planning. 

  The  CIVITAS  Initiative,  launched  in  2002,  supports  cities  in  testing  new  technologies  and 
innovative  concepts  for  better  and  more  sustainable  urban  transport  and  for  incorporating  them 
into  integrated  and  sustainable  local  transport  strategies.  So  far  more  than  800  urban  mobility 
measures have been implemented in 60 cities. The CIVITAS Forum network has today more than 
250 cities. 

  The  Urban  Innovative  Actions  (UIA)  initiative  has  been  created  to  test  new  approaches  to 
address  the  challenges  faced  by  urban  authorities.  The  second  call  will  be  launched  in  autumn 
2016 and one of the topics supported is sustainable urban mobility.  

Action by cities 

The EU has an important role to play in supporting cities and local communities, but inevitably a lot of action 
will  depend  on  the  local  level.  Pioneering  cities  can  offer  not  only  inspiration  for  other  city  leaders,  but  also 
early lessons learnt about the initial introduction of the urban low-emission mobility measures. 

Local incentives, such as taxes, subsidies or preferential treatments (e.g. possibility to drive on bus lanes), play a 
major  role,  including  in  the  consumer's  choice  of  the  type  of  car  purchased.  For  example,  Amsterdam  and 
Utrecht offer financial incentives for electric vehicles on top of what is paid by central government or provinces. 
Electric vehicles in Paris have been entitled to free parking since 1993, which was also immediately followed by 
the creation of public charging points. In the same spirit, the Rotterdam Electric Programme has supported the 
first 1,000 electric vehicle owners with an electric charging point.73   

There are systems of congestion charges in a number of cities. London is proposing an extra charge on the most 
polluting cars.74 A good practice example is Gothenburg's system applying to vehicles registered in and outside 
Sweden.  It  is  designed  to  use  a  time-of  day  dependent  cordon  pricing,  in  combination  with  an  investment 
package, to strengthen public transport multimodality and make traffic smoother.75 

Public transport fleets can be shifted from fossil-based engines to electricity or fuel cell, depending on the latest 
technologies  available  on  the  market.  For  example,  Rome's  entire  bus  system,  which  carries  945  million 
passengers per year, has been running all-electric buses since 1989.76 With over 23,000 bicycles covering the 
city, Paris has pioneered the public bicycle system, which offers an alternative way to move around the city.77 

Local authorities can also make sure that low-emission mobility is always taken into account in all infrastructure 
plans. Many cities aspire to move away from car-oriented planning. For example, Barcelona's new strategy will 
restrict traffic to a number of big roads, expected to reduce pollution, with the co-benefit of turning secondary 

71   Bertoldi  Paolo  et  al.  (2015),  Do  we  have  Effective  Energy  Efficiency  Policies  for  the  Transport  Sector?  Results  and 

Recommendations from an analysis of the National and Sustainable Energy Action Plans, ACEEE.  

72   Kona  Albana  et  al.  (2015),  The  Covenant  of  Mayors  in  Figures  and  Performance  Indicators:  6-year  assessment  - 

Luxembourg: Publication Office of the European Union. 

73   van  der  Steen  et  al.  (2015),  EV  Policy  Compared:  An  International  Comparison  of  Governments'  Policy  Strategy 

Towards E-Mobility, Springer International Publishing Switzerland  

74   Source: https://www.london.gov.uk/press-releases/mayoral/mayor-unveils-action-plan-to-battle-toxic-air 
75   Polis (2016), Decarbonising Transport: The perspective of European regions and cities 
76   Urban Foresight, International Energy Agency et al. (2014), EV City Casebook: 50 big ideas shaping the future of 

electric mobility 

77   European Environment Agency (2016), EEA Signals: Towards clean and smart mobility 

18 

 
 
                                                            
streets into spaces for culture, leisure and the community.78 Greater Copenhagen's new network of cycle lanes 
offers  people  an  easier  time  cycling  to  work  or  study.79  Such  "cycle  super  highways"  are  continuous  high-
standard  paved  bicycle  routes  reserved  for  safe,  direct  and  fast  commuting  by  (electric)  bicycles  over  longer 
distances (more than 5 km).80     

Local intelligent transport systems can be designed to ensure smoother road traffic flow and thereby reduce stop 
and  start  (especially  for  lorries),  through  adaptive  traffic  management  and  real-time  traffic  information.  An 
intelligent transport system solution tested in Helmond included intersection control system with priority for a 
fleet of trucks, and speed advice for approaching the intersection. The City of Stuttgart partly finances the city's 
innovative  car-pooling  system,  which  is  to  a  great  extent  a  consequence  of  intensive  use  of  information  and 
communication technology. It has also implemented dynamic speed limits to reduce air pollution.81 

2.5 Action in international aviation and maritime 

2.5.1 International developments 

Aviation  is  one  of  the  fastest-growing  sources  of  GHG  emissions.  Direct  emissions  from  aviation 
account for about 3% of the EU’s total GHG emissions and more than 2% of global GHG emissions. 
If  the  non-CO2  climate  impacts  of  aviation  are  taken  into  account  (e.g.  contrails  and  cirrus  cloud 
formation), the total climate impact of aviation is even larger. The large majority of these emissions 
come  from  international  flights.  The  International  Civil  Aviation  Organization  (ICAO)  projects  that 
CO2 emissions could grow by 300-700% by 2050 in a business as usual scenario.  

The EU has addressed aviation CO2 emissions through the EU ETS since 2012, while it is, at the same 
time, committed to develop a global measure to address international aviation emissions at ICAO. In 
the 38th General Assembly in 2013, ICAO member states agreed to work towards the achievement of 
the  collective  goal  of  keeping  net  CO2  emissions  from  international  aviation  at  2020  levels,  and  to 
develop  a  global  market-based  measure  (GMBM)  to  be  part  of  the  ‘basket’  of  measures  to  achieve 
this goal. In February 2016, ICAO's Committee on Aviation Environmental Protection (CAEP) agreed 
on a CO2 standard for aircraft, which should guide their development towards greater fuel efficiency. 
For large new aircraft the standard will apply as of 2020. Existing aircraft will have to apply the new 
standards by 2028 at the latest. 

International maritime shipping is a large and growing source of GHG emissions and is not covered 
by  the  EU's  emissions  reduction  target.  International  maritime  transport  accounts  for  about  2.1%  of 
global GHG  emissions and a further increase in the  range of 50 to 250% by 2050 (1.1  to 3.4% per 
year) is projected in a business as usual scenario.82 Significant reduction (25–75%) of these emissions 
is  technically  feasible  even  with  today's  technologies,  and  is  to  a  large  extent  cost  effective  due  to 
reduced fuel bills.83 

Due to the nature of shipping, international shipping emissions are best addressed at the global level 
and the EU is supportive of the IMO’s work in this area. In 2011 IMO adopted the Energy Efficiency 
Design Index (EEDI), which sets compulsory energy efficiency standards for new ships, and the Ship 

78   Source: http://bcnecologia.net/en/conceptual-model/superblocks 
79   Source: http://denmark.dk/en/green-living/bicycle-culture/cycle-super-highway/ 
80   Polis (2016), Decarbonising Transport: The perspective of European regions and cities 
81   Ibid 
82   3rd IMO Greenhouse Gas Study 2014, available at: 

http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/Greenhouse-Gas-Studies-
2014.aspx 

83   TNO  (2015),  GHG  emission  reduction  potential  of  EU-related  maritime  transport  and  on  its  impacts;  Ricardo-AEA 
(2013),  Support  for  the  impact  assessment  of  a  proposal  to  address  maritime  transport  greenhouse  gas  emissions, 
available at: http://ec.europa.eu/clima/policies/transport/shipping/studies_en.htm  

19 

 
 
                                                            
Energy Efficiency Management Plan (SEEMP), a management tool for ship owners. These measures 
are expected to substantially dampen expected further emissions growth albeit not reducing emissions 
from today's levels.84 Therefore, further measures are needed to reduce emissions from international 
shipping.  It  is  expected  that  this  year  the  IMO  will  adopt  a  mandatory  international  data  collection 
system  allowing  access  to  fuel  consumption  and  GHG  emissions  from  ships.  Also,  the  IMO  will 
discuss  this  year  the  possible  revision  of  the  EEDI  requirements  and  a  work  plan  for  establishing  a 
GHG emissions reduction target for international shipping, to contribute towards the objective of the 
Paris Climate Agreement. 

2.5.2 EU level action in international aviation and maritime 

Aviation in the EU ETS. Since the start of 2012, emissions from all flights from, to and within the 
European Economic Area (EEA) - the 28 EU Member States, plus Iceland, Liechtenstein and Norway 
- have been included in the EU Emissions Trading System (EU ETS).85 These emissions form part of 
the EU's internal 20% and 40% greenhouse gas (GHG) emission reduction targets for 2020 and 2030 
respectively. In view of the implementation by 2020 of an international agreement applying a single 
global market-based measure to international aviation emissions, the EU ETS’s application has been 
restricted to intra-EEA flights until 2016.86,87  

The EU ETS is being implemented in its current intra-EEA scope in a satisfactory manner. Verified 
CO2 emissions from ETS aviation activities between airports amounted to 56.9 million tonnes of CO2 
in 2015. Taking into account an annual allocation close to 39 million allowances, it can be concluded 
that the EU ETS contributes to more than 17 million tonnes of emission reductions annually, partly 
within the sector (i.e. by airlines reducing their emissions to avoid paying for additional units) or in 
other sectors (by airlines purchasing units from other sectors, which would accordingly have to reduce 
their  emissions).  Compliance  rates  are  very  high.  Aircraft  operators,  including  from  third  countries, 
representing more than 99% of the emissions covered by the EU ETS adequately report emissions and 
surrender the corresponding allowances. 

Monitoring, reporting and verification (MRV) of shipping emissions. The European Commission 
adopted in 2013 a staged strategy for progressively including GHG emissions from maritime transport 
in  the  EU's  policy  for  reducing  its  overall  GHG  emissions.88  As  a  first  step,  the  European  Union 
adopted  in  2015  a  Regulation  establishing  an  EU-wide  system  for  the  monitoring,  reporting  and 
verification  of  CO2  emissions  and  other  relevant  information  from  EU-related  maritime  transport 
activities (MRV Regulation).89 Robust MRV is the basis for designing and implementing any measure 
reducing GHG emissions of ships and facilitates results-based monitoring of progress. It contributes 
to the removal of market barriers to cost-effective mitigation measures by providing comparable and 
reliable information on energy efficiency. 

This  MRV  system  will  be  applied  from  2018  covering  all  voyages  from  and  to  EU  ports  by  ships 
covered by the technical  scope of the  MRV Regulation  and regardless of their flag. Annual data of 
emissions and ships' efficiency will be verified by independent verifiers before they are submitted to 

84   EEDI and SEEMP, are expected to lead to about 13% CO2 emissions reduction (152 Mt of CO2) for the world fleet by 
2020 relative to the baseline, a 23% reduction in emissions by 2030 (330 Mt of CO2) and 39% by 2050 (1,013 Mt of 
CO2).  Source:  DNV  and  Lloyds  Register  (2011),  Assessment  of  IMO  mandated  energy  efficiency  measures  for 
international shipping, MEPC 63/INF.2 

85   Directive 2008/101/EC, amending Directive 2003/87/EC 
86   Regulation (EU) No 421/2014 amending Directive 2003/87/EC  
87   SWD(2013) 430 final 
88   COM(2013) 479 final 
89   Regulation (EU) No 2015/757  

20 

 
 
                                                            
the  Commission  and  subsequently  published.  MRV  alone  is  expected  to  reduce  emissions  by  2% 
compared  to  business  as  usual.90  As  highlighted  in  the  2013  strategy,  a  mandatory  international 
scheme  to  collect  data  regarding  the  fuel  consumption  and  energy  efficiency  of  the  shipping  sector 
would be preferable; the Commission will review the MRV Regulation after the expected adoption of 
the global scheme by IMO in 2016 for which technical rules still need to be developed and for which 
reporting is expected to start in 2019. 

2.6 Taxation  

The Energy Taxation Directive91 (ETD) stipulates minimum rates for excise duties for unleaded petrol 
of €359 per 1000 litres and €330 per 1000 litres for diesel (gasoil) used in transport. Excise duty rates 
differ between Member States. For petrol, they range from just over the minimum  to €766 per 1000 
litres in the Netherlands. For diesel actual rates are generally lower and closer to the minimum, the 
highest rate reaching €674 in the United Kingdom. 

In 2011, the European Commission proposed a revision of the Energy Taxation Directive92, which 
distinguished a CO2-related component and an energy-related component in the excise duty. Applying 
this  principle  would  have  implied  a  minimum  rate  on  diesel  of  €390  if  the  minimum  rate  on  petrol 
would have been €359 per 1000 litres. 

The  analysis  accompanying  the  Commission  proposal  showed  that  CO2-based  taxation  drives 
consumption away from fossil energy sources. As far as the motor fuel market is concerned, detailed 
modelling  confirmed  that  removing  the  price  advantage  for  diesel  both  in  the  EU  minima  and  in 
national rates would have a rebalancing effect on the supply and demand on the fuel market. 

Currently all EU Member States, except the UK, tax diesel at lower rates than petrol per litre. Taking 
into account that the energy and carbon content of a litre of diesel is higher than of a litre of petrol, all 
countries analysed tax petrol higher than diesel per unit of energy or carbon emissions.  

From decarbonisation of transport perspective, the lower tax rate on diesel fuel is not justified, given 
the  relative  environmental  costs  associated  with  the  use  of  diesel  and  petrol.  Diesel  has  higher 
emissions of carbon and of harmful air pollutants, notably particulate matter and NOx, per litre of fuel 
used. Hence, from a decarbonisation of transport perspective, the level of tax needed to reflect these 
environmental costs should be higher for a litre of diesel than for a litre of petrol. 

A  proposal  on  passenger  car  taxation  aimed  to  improve  the  functioning  of  the  internal  market  by 
removing existing tax obstacles to the transfer of passenger cars from one Member State to another. 93 
It  also  aimed  to  promote  sustainability  by  restructuring  the  tax  base  of  both  registration  taxes  and 
annual circulation taxes, as well as by including elements directly related to carbon dioxide emissions 
of passenger cars. It would not have harmonized tax rates or obliged Member States to introduce new 
taxes, but only included an EU structure on car taxes.  

The  negotiations  showed  that  the  proposed  abolition  of  the  registration  tax  was  too  ambitious,  as  it 
represents a non-negligible source of revenues for the Member States. However, the incorporation of 
an adequate environmental element (e.g. CO2, air pollutants) in the registration and circulation taxes 
could be a possible option for unanimous support, as 24 Member States have already introduced such 

90   SWD (2013) 237 final/2 
91   Directive 2003/96/EC 
92   COM(2011) 169 
93   COM(2005) 261 

21 

 
 
                                                            
element (i.e. CO2 emissions, exhaust emissions, Euro standards, fuel consumption) into their national 
tax systems. 

The  European  Commission  has  decided  to  withdraw94  the  proposal  to  revise  the  Energy  Taxation 
Directive  as  well  as  the  proposal  for  a  Directive  on  passenger  car  related  taxes.  In  the  case  of  the 
Energy Taxation Directive, the draft compromise text was de facto void of all constituting elements of 
the  original  Commission  proposal.  There  was  no  agreement  in  the  Council  even  on  the  draft 
compromise text. For the directive on passenger car related taxes, no agreement was reached in the 
Council. 

Favourable tax treatment of company cars creates significant losses of revenues but also significant 
social and environmental costs such as increased contributions to climate change, local air pollution, 
traffic congestion and road accidents. Advantageous company car taxation schemes tend to affect the 
choice of mode and driving habits. They also risk counteracting the incentives provided by energy and 
vehicle  taxes  (registration  and  circulation  taxes)  to  reduce  fuel  consumption.95  A  recent  OECD 
Study96 and OECD Brief97 show that under-taxing company cars encourages company car owners to 
drive up to three times as much as people with private cars, with all consequences this may have for 
environment. A number of Member States subsidise the private use of company cars, in most cases by 
not differentiating between the use of a company car for business and private purposes. Concretely, 
eleven  Member  States  have  been  identified  as  having  poor  performance  in  the  design  of  their 
company cars taxation.98 Moreover, a small number of Member States99 allow partial deduction of the 
VAT charged on the purchase of company cars intended for private use by employees. 

94   COM(2014) 910 final 
95   European Commission, Tax Reforms in EU Member States 2015, available at: 

http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_papers/taxation_pa
per_58.pdf 

96   OECD  (2014),  Personal  Tax  Treatment  of  Company  Cars  and  Commuting  Expenses  -  Estimating  the  Fiscal  and 

Environmental Costs; OECD Taxation Working Papers  

97   OECD (2014), Under-taxing the benefits of company cars: Policy highlights – A driver of social costs.  
98   European Commission, Tax Reforms in EU Member States 2015.  
99   Belgium, Estonia, Ireland and Latvia.  

22 

 
 
                                                            
3. Developments under current trends and policies  

3.1 Identifying the GHG emissions gap for transport 

Building  on  the  2008  Climate  and  Energy  package  and  in  line  with  the  cost-effective  pathway 
described in the 2050 roadmaps100, in 2014 the European Council endorsed a binding EU target of an 
at  least  40%  domestic  reduction  in  GHG  emissions  by  2030  compared  to  1990.  This  target  will  be 
delivered collectively by the EU in the most cost-effective manner possible, with the reductions in the 
ETS and non-ETS sectors amounting  to  43% and 30% by 2030 respectively compared to 2005. An 
EU target of at least 27% was agreed for the share of renewable energy consumed in the EU in 2030; 
this target is binding at EU level. An indicative target at the EU level of at least 27% was agreed for 
improving energy efficiency in 2030 compared to projections of future energy consumption based on 
a 2007 baseline. This will be reviewed by 2020, having in mind an EU level of 30%. 

The reduction effort for the non-ETS sectors (transport, buildings, agriculture and waste management) 
is  distributed  between  Member  States  through  the  Effort  Sharing  Regulation  for  the  period  2021  to 
2030.  Transport  needs  to  contribute  to  the  2030  targets  and,  in  particular,  to  the  30%  emissions 
reduction effort set for the non-ETS sectors. 

The  Commission  has  undertaken  analysis  exploring  the  impact  of  current  trends,  including  the 
implementation of policies that were adopted at EU and Member State level by December 2014, in the 
so-called ‘EU Reference scenario 2016’.101 The projection shows that the declining trend in transport 
emissions is expected to continue, leading to 12% lower emissions in 2030 than in 2005.  

Building on the EU Reference scenario 2016, two additional central scenarios (so-called ‘EUCO27’ 
and  ‘EUCO30’)  have  been  developed  to  reach  all  the  2030  targets  agreed  by  the  October  2014 
European  Council  (see  section  4)  and  the  2050  decarbonisation  objectives,  continuing  and 
intensifying  the  current  policy  mix.  The  difference  between  the  two  scenarios  lies  in  the  level  of 
ambition to be achieved for the energy efficiency goal (27% or 30% primary energy savings in 2030 
compared to the 2007 baseline). These polices have been modelled in a stylised manner (see section 
4).102  The  central  scenarios  show  emissions  reductions  of:  18-19%  for  transport,  38-43%  for 
residential  and  tertiary  (mainly  buildings),  35-37%  for  industry  and  29%-35%  for  non-CO2  sectors 
(mainly agriculture and waste) by 2030 relative to 2005. For transport, the emissions reductions are in 
line  with  the  2011  White  Paper  which  established  a  goal  of  20%  by  2030  relative  to  2008  levels 
(equivalent to 19% emissions reduction compared to 2005). 

No  sectoral  target  has  been  established  for  the  transport  sector.  However,  comparing  developments 
under  current  trends  and  adopted  policies  (i.e.  the  EU  Reference  scenario  2016,  achieving  12% 
emissions reduction in transport) with the central scenarios (18-19%), shows that additional policies 
could be needed, especially post-2020, in order to close the gap of 6-7 percentage points and provide a 
cost-effective  transport  contribution  to  the  2030  Climate  and  Energy  policy  framework  (taking  into 
account  all  targets  agreed  for  2030  and  existing  policy  mix).  Action  would  be  needed  on  three  key 

100  COM(2011) 885 final, COM(2011) 112 final, COM(2011) 144 final. 
101  ICCS-E3MLab et al. (2016), EU Reference Scenario 2016: Energy, transport and GHG emissions - Trends to 2050 
102  While  some  policies,  notably  CO2  standards  for  LDVs  are  represented  in  greater  detail,  others  are  represented  in  an 
aggregated and stylised manner and the impacts of such policies are subject to higher uncertainty. Subject to dedicated 
impact  assessment  for  each  policy  initiative,  it  is  possible  that  different  policy  mixes  and  specific  policy  instruments, 
different parameters of these policies (e.g. in case of CO2 standards for cars and vans) and nature of instruments (e.g. 
regulation,  voluntary  agreement,  financing,  information  campaign)  than  the  ones  assumed  in  this  modelling  exercise 
might be necessary or desired.  

23 

 
 
                                                            
levers: low- and zero-emission vehicles, low emission alternative energy for transport, and efficiency 
of  the  transport  system.  However,  if  lower  emissions  reductions  than  currently  set  out  in  the  two 
scenarios reflecting the EU’s 2030 targets (EUCO27 and EUCO30) were to take place in other non-
ETS sectors (e.g. buildings, agriculture, small industry and waste), even higher emissions cuts will be 
required  in  the  transport  sector  to  reach  the  30%  emissions  reduction  effort  set  for  the  non-ETS 
sectors.  

The  expected  gap  shows  that  current  transport  policies  need  to  be  reinforced  to  ensure  the 
achievement  of  the  EU’s  2030  targets.  The  European  Council  recognised  the  need  to  reduce  GHG 
emissions  from  transport  and  risks  related  to  fossil  fuel  dependency,  and  therefore  invited  the 
Commission  to  further  examine  instruments  and  measures  for  a  comprehensive  and  technology 
neutral  approach  for  the  promotion  of  emissions  reduction  and  energy  efficiency  in  transport,  for 
electric transportation and for renewable energy sources in transport also after 2020. The European 
Council  also  recalled  that  a  Member  State  can  opt  to  include  the  transport  sector  within  the 
framework of the ETS. 

While reducing its energy use and GHG emissions, transport also needs to continue to meet society's 
needs,  and  reduce  its  other  negative  impacts.  The  analysis  in  section  4  shows  that  curbing  GHG 
emissions  from  transport  reduces  the  EU's  dependence  on  fossil  fuels  and  brings  clear  co-benefits 
leading to reductions of costs related to air pollution, accidents, congestion and noise pollution. While 
not  demonstrated  by  modelling,  it  is  clear  that  such  developments  result  in  more  liveable  cities, 
improve quality of life and contribute to maintaining the competiveness of EU industry. 

The remaining part of section 3 provides more detail on the key assumptions and main results of the 
Reference  scenario  2016.  The  two  scenarios  additionally  developed  to  reach  all  the  2030  targets 
agreed  by  the  October  2014  European  Council  (EUCO27  and  EUCO30)  are  described  further  in 
section 4. 

3.2 Key assumptions of the Reference Scenario 

The Reference scenario is a projection, not a forecast; it has been developed building on a modelling 
framework including PRIMES (i.e. PRIMES-TREMOVE model for transport), GEM-E3, GAINS and 
other related models, and benefited from the comments of Member States experts.103 The projections 
build  on  a  set  of  assumptions  related  to  population  growth,  macroeconomic  and  oil  price 
developments, technology improvements, and policies described below.104 

Demographic change is transforming the EU with inevitable consequences for the transport sector. 
In  the  Reference  scenario,  the  population  projections  draw  on  the  EUROPOP2013  (EUROpean 
POPulation  Projections 2013) from Eurostat, which is also the basis for the 2015 Ageing Report.105 
The key drivers for demographic change are: higher life expectancy, convergence in the fertility rates 
across  Member  States  in  the  long  term,  and  inward  migration.  The  EU28  population  is  expected  to 
grow by around 0.2% per year during 2010-2030 (0.1% for 2010-2050), to 516 million in 2030 (522 
million by 2050). Elderly people, aged 65 or more, would account for 24% of the total population by 
2030 (28% by 2050) as opposed to 18% today.  

103  ICCS-E3MLab et al. (2016), EU Reference Scenario 2016: Energy, transport and GHG emissions - Trends to 2050 
104  A  more  detailed  presentation  of  models  and  model-based  scenarios  underpinning  the  analytical  work  is  provided  in 

Annex IV. 

105  European  Commission/DG  ECFIN  (2014),  The  2015  Ageing  Report:  Underlying  Assumptions  and  Projection 

Methodologies, European Economy 8/2014. 

24 

 
 
                                                            
GDP projections mirror the joint work of DG ECFIN and the Economic Policy Committee, presented 
in the 2015 Ageing Report. The average EU GDP growth rate is projected to remain relatively low in 
the  short  to  medium  term  at  1.2%  per  year  for  2010-2020,  down  from  1.9%  per  year  during  1995-
2010. In the medium to long term the higher expected growth rates (1.4% per year for 2020-2030 and 
1.5%  per  year  for  2030-2050)  are  taking  account  of  the  catching  up  potential  of  countries  with 
relatively low GDP per capita, assuming convergence to a total factor productivity growth rate of 1%. 

Oil prices have fallen by more than 60 percent since mid-2014, to an average of around 40 $/barrel 
for Brent crude oil in the first four months of 2016.106 The collapse of oil price has been driven by low 
demand  and  sustained  oversupply,  due  in  particular  to  tight  oil  from  North  America  and  to  the 
decision  of  the  Organization  of  Petroleum  Exporting  Countries  (OPEC)  countries  not  to  cut  their 
output  to  rebalance  the  market.  The  Reference  scenario  assumes  a  gradual  adjustment  process  with 
reduced  investments  in  upstream  productive  capacities  by  non-OPEC  countries.  Quota  discipline  is 
assumed to gradually improve among OPEC members. Thus, oil price is projected to reach 87 $/barrel 
in 2020 (in year 2013-prices). Beyond 2020, as a result of persistent  demand  growth in non-OECD 
countries driven by economic activity and the increased ownership of passenger cars, oil price would 
rise to 113 $/barrel by 2030 and 130 $/barrel by 2050.107,108 

In  terms  of  technological  developments,  battery  costs  for  electric  vehicles  and  plug-in  hybrids  are 
assumed  to  go  down  to  320-360  $/kWh  by  2030  and  270-295  $/kWh  by  2050109;  further 
improvements  in  the  efficiency  of  both  spark  ignition  gasoline  and  compression  ignition  diesel  are 
assumed  to  take  place.  In  addition,  the  market  share  of  internal  combustion  engine  (ICE)  electric 
hybrids  is  expected  to  increase  due  to  their  lower  fuel  consumption  compared  to  conventional  ICE 
vehicles. 

The  key  policies  included  in  the  Reference  scenario  2016  that  are  relevant  for  transport 
decarbonisation are: 

–  The  Renewable  Energy  Directive  (Directive  2009/28/EC)  and  Fuel  Quality  Directive  (Directive 
2009/30/EC)  including  ILUC  amendment  (Directive  2015/1513/EU):  achievement  of  the 
renewables legally binding transport target for 2020, taking into account the cap on the amount of 
food or feed based biofuels (7%). 

–  The EU Emissions Trading System (Directive 2003/87/EC and its amendments) is fully reflected 
in the modelling, including the linear reduction factor of 1.74% for stationary installations and the 
recently adopted Market Stability Reserve. 

–  The  Effort  Sharing  Decision  (Decision  No  406/2009/EC)  including  achievement  of  the  legally 

binding 2020 targets for non-ETS emissions at aggregated EU level. 

–  Implementation of the Energy Efficiency Directive (Directive 2001/27/EU). 
–  CO2  standards  for  cars  and  vans  regulations  (Regulation  (EC)  No  443/2009,  amended  by 
Regulation  (EU)  No  333/2014  and  Regulation  (EU)  No  510/2011,  amended  by  Regulation  (EU) 

106  Source: International Energy Agency, Oil Market Report  
107  The oil price projections are the result of world energy modelling with PROMETHEUS stochastic world energy model, 

developed by the National Technical University of Athens (ICCS-E3MLab). 

108  This would translate into an oil price of 94 €/barrel in 2030 and 108 €/barrel in 2050 (in year 2013-prices). 
109  The  Reference  scenario,  by  design,  assumes  the  continuation  of  the  current  trends  and  policies  without  the 
implementation of additional measures. Hence, due to the absence of further policies, car manufacturers and industry are 
not  expected  to devote additional  effort  in  marketing advanced vehicle  technologies.  The  relatively  low  production  of 
advanced vehicles, in the Reference scenario, is not expected to yield economies of scale which could potentially imply 
high  reduction  in  battery  costs  as  suggested  by  other  sources.  Such  assumptions  change  in  a  decarbonisation  context 
which assumes more optimistic trajectory of reduction of battery costs driven by the implementation of specific policies, 
recharging infrastructure development and effects of economies of scale. 

25 

 
 
                                                            
No  253/2014);  CO2  standards  for  cars  are  assumed  to  be  95gCO2/km  as  of  2021  and  for  vans 
147gCO2/km  as  of  2020  in  line  with  current  legislation.  Standards  are  assumed  constant  after 
2020/2021. 

–  The Directive on the deployment of alternative fuels infrastructure (Directive 2009/30/EC). 
–  The  Energy  Efficiency  Design  Index  (EEDI)  and  the  Ship  Energy  Efficiency  Management  Plan 

(SEEMP) for maritime transport.110 

–  Relevant national policies for instance on fuel and vehicle taxation. 

3.3 Reference Scenario main results 

EU transport activity is expected to continue growing under current  trends and adopted policies, 
albeit  at  a  slower  pace  than  in  the  past.  Freight  transport  activity  for  inland  modes  is  projected  to 
increase by 35% between  2010 and 2030 (1.5% per year) and 58% for 2010-2050 (1.2% per year). 
Passenger traffic growth would be slightly lower than for freight at 22% by 2030 (1% per year) and 
40% by 2050 (0.9% per year). The annual growth rates by mode, for passenger and freight transport, 
are provided in Figure 1.111 

Road transport would maintain its dominant role within the EU. The share of road transport in inland 
freight is expected to remain relatively stable by 2030 at 71% and only slightly decrease to 70% by 
2050.  For  passenger  transport,  road  modal  share  is  projected  to  decrease  by  4  percentage  points  by 
2030  and  by  additional  3  percentage  points  by  2050.  Passenger  cars  would  still  contribute  70%  of 
passenger  traffic  by  2030  and  about  two  thirds  by  2050,  despite  growing  at  lower  pace  relative  to 
other modes due to slowdown in car ownership increase which is close to saturation levels in many 
EU15 Member States. 

Figure 1: Passenger and freight transport projections (average growth rate per year) 

Source: EU Reference scenario 2016, PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: For aviation, domestic and international intra-EU activity is reported, to maintain the comparability with reported statistics. 

Rail transport activity is projected to grow significantly faster than for road, driven in particular by the 
effective  implementation  of  the  TEN-T  guidelines,  supported  by  the  CEF  funding,  leading  to  the 
completion  of  the  TEN-T  core  network  by  2030  and  of  the  comprehensive  network  by  2050. 
Passenger rail activity goes up by 39% between 2010 and 2030 (76% for 2010-2050), increasing its 
modal share by 1 percentage point by 2030 and an additional percentage point by 2050. Rail freight 

110  IMO Resolution MEPC.203(62) 
111  Projections for international maritime and international extra-EU aviation are presented separately and not included in 

the total passenger and freight transport activity to preserve comparability with statistics for the historical period. 

26 

-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%RoadRailAviationInlandnavigationPassenger transport '95-'10'10-'30'30-'50-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%RoadRailInland navigationFreight transport'95-'10'10-'30'30-'50 
 
 
                                                            
activity  grows  by 47%  by  2030  and  84%  during  2010-2050,  resulting  in  similar  increases  in  modal 
share as for passenger rail. 

Domestic  and  international  intra-EU  air  transport  would  grow  significantly  (by  59%  by  2030  and 
118% by 2050) and increase its share in overall transport demand (by 3 percentage points by 2030 and 
by additional 2 percentage points by 2050). Overall, aviation activity including international extra-EU 
flights  is  projected  to  go  up  by  61%  by  2030  and  125%  by  2050,  saturating  European  skies  and 
airports.  

Transport activity of freight inland navigation112 also benefits from the completion of the TEN-T core 
and  comprehensive  network  and  the  recovery  in  the  economic  activity  and  would  grow  by  22%  by 
2030 (1% per year) and by 39% during 2010-2050 (0.8% per year).  

International maritime transport activity is projected to continue growing strongly with rising demand 
for oil, coal, steel and other primary resources – which would be more distantly sourced – increasing 
by 37% by 2030 and by 71% during 2010-2050.  

Transport accounts today for about one third of final energy consumption. In the context of growing 
activity, energy use in transport is projected to decrease by 5% between 2010 and 2030 and to slightly 
increase post-2030, resulting in levels of energy demand by 2050 similar to those observed  in 2010 
(see  Figure  2).  These  developments  are  mainly  driven  by  the  implementation  of  the  Regulations 
setting  emission  performance  standards  for  new  passenger  cars  and  vans.  LDVs  are  currently 
responsible  for  around  60%  of  total  energy  demand  in  transport  but  this  share  is  projected  to 
significantly decline over time, to 53% by 2030 and 51% by 2050. Heavy goods vehicles and aviation 
are  projected  to  increase  their  share  in  final  energy  demand  from  2010  onwards,  continuing  the 
historic trend from 1995. Energy demand by heavy goods vehicles would grow by 15% between 2010 
and 2030 (24% for 2010-2050).   

Bunker fuels for air and maritime transport are projected to increase significantly: by 17% by 2030 
(33% for 2010-2050) and 24% by 2030 (42% for 2010-2050), respectively. 

Figure 2: Evolution of total final energy consumption and GHG emissions between 1995 and 2050  

Source: EU Reference scenario 2016, PRIMES model (ICCS-E3MLab) 

Electricity use in transport is expected to increase steadily as a result of further rail electrification and 
the uptake of alternative powertrains in road transport; its share increases from 1% currently to 2% in 

112  Inland navigation covers inland waterways and national maritime.  

27 

02004006008001,0001,200199520002005201020152020202520302035204020452050Final energy demand (Mtoe)IndustryResidentialTertiaryTransport09001,8002,7003,6004,5005,400199520002005201020152020202520302035204020452050Total GHG emissions (Mt of CO2-eq)Energy industriesIndustryResidential & tertiaryTransportNon-CO2 emissions 
 
 
                                                            
2030 and 4% in 2050. Battery electric and plug-in hybrid electric vehicles are expected to see faster 
growth  beyond  2020,  in  particular  in  the  segment  of  LDVs,  driven  by  EU  and  national  policies 
offering  various  incentives.  The  share  of  battery  electric  and  plug-in  hybrid  electric  vehicles  in  the 
total stock of LDVs would reach about 5% by 2030 and 12% by 2050.  The uptake of hydrogen would 
be facilitated by the increased availability of refuelling infrastructure, but its use would remain limited 
in lack of policies adopted beyond the end of 2014. Fuel cells would represent about 2% of the light 
duty vehicle stock by 2050. 

LNG becomes a candidate energy carrier for road freight and waterborne transport, especially in the 
medium to long term, driven by the implementation of the Directive on the deployment of alternative 
fuels infrastructure and the revised TEN-T guidelines which represent important drivers for the higher 
penetration of alternative  fuels in the transport mix. In the Reference scenario, the share of LNG is 
projected to go up to 3% by 2030 (8% by 2050) for road freight and 4% by 2030 (7% by 2050) for 
inland navigation. LNG would provide about 4% of maritime bunker fuels by 2030 and 10% by 2050 
– especially in the segment of short sea shipping. 

Biofuels  uptake  is  driven  by  the  legally  binding  target  of  10%  renewable  energy  in  transport 
(Renewables Directive), as amended by the ILUC Directive, and by the requirement for fuel suppliers 
to  reduce  the  GHG  intensity  of  road  transport  fuel  by  6%  (Fuel  Quality  Directive).  Beyond  2020, 
biofuel levels in EU28 remain relatively stable at around 6%. Renewable energy in transport would 
represent about 11% in 2020, increasing to 14% by 2030 (21% by 2050).113 

In  the  Reference  scenario,  oil  products  would  still  represent  about  90%  of  the  EU  transport 
sector  needs  in  2030  and  86%  in  2050,  despite  the  renewables  policies  and  the  deployment  of 
alternative  fuels  infrastructure  which  support  some  substitution  effects  towards  biofuels,  electricity, 
hydrogen and natural gas (see Figure 3). 

Figure 3: Evolution of final energy use in transport by type of fuel 

Source: EU Reference scenario 2016, PRIMES-TREMOVE transport model (ICCS-E3MLab) 

The  declining  trend  in  transport  emissions  is  expected  to  continue,  leading  to  12%  lower 
emissions  by  2030  compared  to  2005,  and  11%  by  2050.114  However,  relative  to  1990  levels, 
emissions would still be 13% higher by 2030 and 15% by 2050, owing to the fast rise in the transport 

113  The share of renewables in transport is based on the definition as amended by the ILUC Directive. 
114  Including international aviation but excluding international maritime and other transportation.  

28 

050100150200250300350400201020152020202520302035204020452050MtoeElectricity & hydrogenGas & biomethaneBiofuelsLPGFuel oilJet fuelDieselGasoline 
 
 
                                                            
emissions during the 1990s. The share of transport in total GHG emissions would continue increasing, 
going  up  from  23%  currently  (excluding  international  maritime)  to  25%  in  2030  and  32%  in  2050, 
following  a  relatively  lower  decline  of  emissions  from  transport  compared  to  power  generation  and 
other sectors (see Figure 2). Aviation would contribute an increasing share of transport emissions over 
time,  increasing  from  14%  today  to  about  18%  in  2030  and  20%  in  2050.  Maritime  bunker  fuel 
emissions are also projected to grow strongly, increasing by 22% during 2010-2030 (38% for 2010-
2050). 

The overall trend in transport emissions is determined by three broad components: transport activity 
levels  (expressed  in  passenger  or  tonne-kilometres),  the  energy  intensity  of  transport  (defined  as 
energy  consumption  per  passenger  or  tonne-kilometre)  and  the  carbon  intensity  of  the  energy  used 
(given by the CO2 emissions divided by energy consumption). Following this approach, it has been 
evaluated how much the projected transport emissions will increase/decrease (in percentage terms or 
Mt  of  CO2)  between  2005  and  2030  due  to  transport  activity  growth,  improvements  in  energy 
intensity and carbon intensity (see Figure 4).115,116 

Overall, CO2 emissions from passenger transport decrease by 16% (127 Mt of CO2) between 2005 and 
2030 in the Reference scenario. The 16% decrease in CO2 emissions from passenger transport is due 
to transport activity growth (+24%, equivalent to 198 Mt of CO2), improvements in energy intensity  
(-35%, equivalent to 281 Mt of CO2) and in carbon intensity (-5%, equivalent to 44 Mt of CO2). The 
trend  for  the  three  components  and  their  contribution  to  emissions  is  different  by  transport  mode. 
Efficiency gains play a decisive role in reducing emissions in road transport, while in aviation  they 
would  not  offset  the  activity  growth  leading  to  higher  fuel  use  and  emissions.  The  use  of  less  CO2 
intensive fuels contributes to a reduction of emissions for road and rail passenger transport with no 
effect on aviation by 2030. 

For freight transport, the 2% (5 Mt of CO2) decrease in CO2 emissions between 2005 and 2030 is the 
result  of  transport  activity  growth  (+27%,  equivalent  to  73  Mt  of  CO2),  improvements  in  energy 
intensity  (-21%,  equivalent  to  56  Mt  of  CO2)  and  in  carbon  intensity  (-8%,  equivalent  to  22  Mt  of 
CO2).  The  efficiency  gains  and  the  uptake  of  alternative  fuels  for  road  freight  transport  are  just 
sufficient  to  offset  the  effects  of  activity  growth.  The  electrification  in  rail  has  positive  effects  on 
emissions, despite the growth in traffic volumes. For inland navigation, efficiency gains and to some 
lower extent the uptake of LNG has significant positive effects on emissions reduction.  

115  The proposed method is the Montgomery decomposition. For a recent application of the method see: De Boer, P.M.C. 
(2008)  Additive  Structural  Decomposition  Analysis  and  Index  Number  Theory:  An  Empirical  Application  of  the 
Montgomery Decomposition, Economic Systems Research, 20(1), pp. 97-109. 

116  The decomposition analysis only takes into account the tank to wheel emissions, under the assumption that biofuels are 

carbon neutral. 

29 

 
 
 
                                                            
Figure 4: Decomposition of CO2 emissions in the Reference scenario (2005-2030) 

Source: EC elaboration based on the EU Reference scenario 2016, PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Note:  The  figures  report  the  changes  in  CO2  emissions  due  to  the  three  broad  components  (transport  activity  levels,  energy  intensity  of 
transport and carbon intensity of the energy used) in two ways: in levels and in relative terms compared to 2005. The size of each column 
bar,  read  on  the  left  axis,  represents  the  change  in  terms  of  CO2  emissions  compared  to  2005,  expressed  in  Mt  of  CO2.  The  percentage 
changes reported above the column bars represent relative changes in these emissions compared to their respective 2005 levels. Provided 
that CO2 levels for 2005 corresponding to each transport mode are not comparable in size, the percentage changes reported in the figures are 
not directly comparable. The figures above include only tank to wheel emissions. 

NOx emissions would drop by about 56% by 2030 (63% by 2050). The decline in particulate matter 
(PM2.5) would be less pronounced by 2030 at 51% (64% by 2050). Overall, external costs related to 
air pollutants would decrease by about 56% by 2030 (65% by 2050).117  

Congestion  costs  are  projected  to  increase  by  about  24%  by  2030  and  42%  by  2050,  relative  to 
2010. 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. 

117  External costs are expressed in 2013 prices. They cover NOx, PM2.5 and SOx emissions. 

30 

 
 
 
 
                                                            
Noise related external costs of transport would continue to increase, by about 18% during 2010-2030 
(26%  for  2010-2050),  driven  by  the  rise  in  traffic.  Thanks  to  policies  in  place,  external  costs  of 
accidents are projected to go down by about 47% by 2030 (-44% for 2010-2050) – but still remain 
high at €100 billion in 2050. Overall, external costs118 are projected to decrease by about 10% by 2030 
and to increase post-2030; by 2050 they stabilise around levels observed in 2010.  

118  External costs cover here air pollution, congestion, noise and accidents. 

31 

 
 
  
                                                            
4. Pathways towards low-emission mobility 

In line with scientific findings reported  by the International  Panel  on Climate  Change (IPCC) in its 
fourth Assessment Report, the European Council stated in 2009 that the EU's objective, in the context 
of necessary reductions by developed countries as a group, is to reduce GHG emissions by 80-95% in 
2050  compared  to  1990.  Such  a  reduction  would  be  in  line  with  the  international  objective  to  limit 
climate change to below two degrees.  

The 2011 Transport White Paper119 concluded that, while deeper cuts can be achieved in other sectors 
of the economy, a reduction of at least 60% of GHGs by 2050 with respect to 1990 is required from 
the transport sector, including aviation. For maritime transport, the 2011 White Paper established the 
objective  to  reduce  CO2  emission  from  maritime  bunker  fuels  by  40%  (50%  if  feasible)  by  2050 
compared  to  2005  levels.120  In  the  White  Paper,  electrification  was  considered  a  strong  driver  for 
reductions  of  GHG  emissions  in  the  road  transport  sector  to  2050.  In  the  scenarios  modelled, 
electrification  was  shown  to  significantly  replace  fossil  fuels  in  new  passenger  cars  and  vans 
(collectively  light  duty  vehicles  (LDVs)).  However,  low  emission  alternative  fuels  (including 
advanced renewable fuels and sustainable biofuels) would remain necessary for aviation, heavy duty 
vehicles and shipping. Thus, the White Paper set the goal of halving the use of conventionally-fuelled 
cars in urban transport by 2030, phasing them out in cities by 2050 and achieving essentially CO2-free 
city logistics in major urban centres by 2030. For aviation, the objective is for the share of low-carbon 
sustainable fuels to reach 40% by 2050. 

Section 3 showed that under current trends and adopted policies, the declining trend in emissions from 
transport is expected to continue until 2030 (12% reduction for 2005-2030) but greater efforts may be 
needed  after  2020  to  deliver  the  2030  Climate  and  Energy  policy  framework,  and  reach  the  White 
Paper's 60% GHG goal for 2050. This section first identifies measures that could contribute to low-
emission mobility and then sets out several stylised pathways/scenarios.  

The modelling framework used for assessing these pathways/scenarios is described in Annex IV. The 
central  model  used  for  the  analysis  of  the  transport  system  is  the  PRIMES-TREMOVE  Transport 
Model,  developed  and  maintained  by  E3MLab/ICCS  of  National  Technical  University  of  Athens, 
complemented where relevant by other models (e.g. PRIMES energy system model, PRIMES biomass 
model). 

4.1 Policy measures  

The  most  important  transport  policies  for  low-emission  mobility  are  briefly  discussed  below, 
according  to  three  main  pillars:  moving  towards  zero-emission  vehicles;  low  emission  alternative 
energy for transport; efficiency of the transport system.121 They are supported by other cross-cutting 
initiatives in the area of research and innovation, financing, and also by initiatives covering the urban 
dimension.  

119  COM(2011) 144 final 
120  More details on the previous analytical work on transport decarbonisation in the context of 2050 Roadmaps is provided 

in Annex II. 

121  Many of the measures aimed at managing transport demand also lead to improvements in energy efficiency. 

32 

 
 
                                                            
4.1.1 Moving towards zero-emission vehicles 

Strong  action  on  vehicle  efficiency,  accompanied  by  appropriate  policies  to  support  innovation,  the 
deployment  of  recharging/refuelling  infrastructure  and  alternative  fuels  and  powertrains,  are  a 
prerequisite  for  the  decarbonisation  of  the  transport  system.  As  acknowledged  by  the  2011  White 
Paper,  this  provides  a  very  effective  way  of  reducing  costs  and  advancing  the  introduction  of  new 
technologies.  Consequently,  the  stylised  scenarios  explore  the  impacts  of  potential  future  policies 
acting on this driver. 

Tightening  CO2  emission  standards  for  passenger  cars  and  light  commercial  vehicles  beyond 
2020  would be  needed  so  that  road  transport  contributes  to  the agreed  2030 climate  targets  and  the 
longer  term  decarbonisation  objectives.  The  effectiveness  of  the  legislation  is  dependent  on  the 
establishment of CO2 values during type approval tests. As stated in section 2, it has become clear that 
there are weaknesses in the type-approval procedures underpinning the CO2 emission standards. They 
are being addressed by the Worldwide harmonized Light vehicles Test Procedure (WLTP) that is in 
the process of being put in place at EU level, as explained in the box below. 

More reliable fuel consumption and CO2 figures for consumers and regulators 

The official figures underpinning the CO2 emission limit values for the new passenger car and van fleets in the 
EU are produced from a laboratory test. In order to ensure the effectiveness of these limits, reductions achieved 
in  the  laboratory  test  must  lead  to  commensurate  reductions  in  real  life.  However,  it  is  now  generally 
acknowledged that there has been a large and growing divergence between the two.  

The most important factor contributing to this divergence is the currently still applicable New European Driving 
Cycle (NEDC) test cycle. The NEDC driving pattern is outdated and unrealistic and the test procedure includes 
parameters  (e.g.  tyre  conditioning,  ambient  temperature,  wind  speed  at  road  load  test),  flexibilities  and 
tolerances that are not sufficiently tightly defined. 

Recognising these shortcomings, the European Commission has played a leading role in the development of the 
new Worldwide harmonized Light-vehicles Test Procedure (WLTP) within the framework of the United Nations 
Economic Commission for Europe (UNECE). This procedure brings significant improvements over the NEDC 
and will provide more realistic values. On 14 June 2016, the technical regulatory committee gathering Member 
States  representatives  (Technical  Committee  of  Motor  Vehicles)  voted  in  favour  of  the  Commission's  draft 
Regulation to introduce the WLTP in the EU. If the European Parliament and the Council do not object to the 
current text, the new WLTP test will be mandatory for all new vehicle types from September 2017 and for all 
new vehicles from September 2018.  

Moreover, a major overhaul of the so-called EU type approval framework for motor vehicles was proposed by 
the  Commission  in  January  2016  and  is  currently  being  discussed  by  Member  States  and  the  European 
Parliament.  The  proposal  for  a  new  framework  Regulation  aims  at  strengthening  the  independence  of  vehicle 
testing and at introducing a more effective market surveillance system.122 

To  complement  these  measures,  further  options  could  be  explored  to  ensure  that  any  remaining  gap  between 
laboratory  and  real  world  emissions  is  minimised  and  to  avoid  that  it  is  growing  over  time.  These  options, 
whose feasibility will have to carefully assessed, could range from establishing specific rules for independent 
conformity of production and in-service testing to developing a complementary real-driving test procedure for 
CO2 emissions. In addition, monitoring systematically a sufficiently large set of real-world data (i.e. the actual 
on-road  fuel  consumption  of  the  vehicle  fleet)  would  allow  a  robust  verification  of  the  CO2  emissions 

122  Under current rules, national authorities are solely responsible for certifying that a vehicle meets all requirements to be 
placed  on  the  market  and  for  policing  manufacturers'  compliance  with  EU  law.  The  proposal  for  a  new  Regulation, 
adopted by the Commission on 27 January 2016, will make vehicle testing more independent, increase surveillance of 
vehicles already in circulation and introduce greater European oversight. Once the draft Regulation has been adopted by 
the European Parliament and Council, it will be directly applicable and will repeal and replace Directive 2007/46/EC. 

33 

 
 
                                                            
determined  at  type  approval.  The  technical  basis  for  this  could  be  so-called  fuel  consumption  meters  (FCM) 
which are already present in many car models.  

To obtain further qualified views on potential methods to address this divergence, the Commission also asked 
for a timely opinion of the so-called Scientific Advice Mechanism. It is an instrument recently put in place to 
support  European  policy  making  with  independent  scientific  evidence  under  the  lead  of  several  eminent 
scientists from across Europe. 

Further work is being carried out to ensure the continued relevance and accuracy of the EU's vehicle 
emissions  testing  regime.  This  includes  further  work  on  the  WLTP  (Phases  2  and  3),  which  should 
cover the remainder of emission-related light duty vehicle testing, such as evaporative emissions. In 
addition, the Commission introduced a Real Driving Emissions (RDE) procedure to measure the NOx 
emissions of light duty diesel vehicles in real driving conditions. This new procedure utilises portable 
emissions  measurement  systems  (PEMS)  and  may  be  further  developed  and  refined.  In  parallel,  in 
order to accelerate the positive effects on urban air pollution hotspots of the introduction of RDE tests, 
a  voluntary  mechanism  to  identify  vehicles  with  significantly  lower  air  quality  related  pollutant 
emissions,  including  NOx,  may  also  be  explored.  In  addition  to  providing  consumers  with  more 
accurate  information  on  cars'  NOx  emissions,  such  a  mechanism  would  also  support  manufacturers 
who already supply cleaner vehicles. 

With  a  view  to  accelerating  the  technological  shift  needed  to  achieve  an  ambitious  long-term 
reduction in road transport emissions, zero- and low-emission vehicles may need to be deployed and 
gain significant market share by 2030. Options to incentivise them may also need to be considered, so 
to  give  a  clear  policy  signal  to  industry  to  make  the  next  step  and  to  reinforce  investment  in 
alternative powertrain technology.123  

As  a  complementary  demand-side  measure,  it  needs  to  be  considered  how  car  labelling  can  be 
improved to better support consumers in their choice of more fuel-efficient and low emitting cars. 

Regarding  powertrain  technology,  accelerating  the  development  and  deployment  of  more  efficient 
hybrid  powertrains  to  reduce  the  fuel  consumption  of  light  duty  vehicles  without  creating  negative 
effects in terms of air pollutant emissions, also needs to be considered. 

With  respect  to  heavy  duty  vehicles,  the  development  of  the  VECTO  simulation  tool  and  the 
implementation of the certification procedure using the VECTO output, briefly described in section 2, 
will  support  the  envisaged  Commission  legislative  proposal  which  would  require  fuel  consumption 
and  CO2  emissions  from  new  HDVs  to  be  reported  and  monitored.  This  is  expected  to  close  the 
existing  "knowledge  gap"  on  HDV  emissions  that  prevents  more  ambitious  actions  to  reduce  them. 
This  could  contribute  to  a  more  transparent  and  competitive  market  and  the  adoption  of  the  most 
energy-efficient  technologies.  Setting  up  an  accurate  and  reliable  monitoring  and  reporting  system 
could  provide  fuel  consumption  and  CO2  emissions  data  from  new  vehicles  to  underpin  possible 
future legislation. In the meantime, preparatory work towards possible EU CO2 standards for HDVs 
has already started.  

123  Work performed by the JRC using the DIONE Fleet Impact Model (Thiel et al. (2016), Harrison et al. (2016)) confirms 
that  meeting  new  CO2  targets  for  new  passenger  cars  will  require  a  significant  share  of  low-emission  vehicles  in  the 
market  for  new  vehicles.  While manufacturers  can  follow various strategies  to  meet  vehicle  efficiency  standards,  it  is 
very  likely  that  low-emission  vehicles  will  be  a  necessity.  Source:  Thiel,  C.,  Drossinos,  Y.,  Krause,  J.,  Harrison,  G., 
Gkatzoflias,  D.  and  A.V.  Donati  (2016),  Modelling  electro-mobility:  an  integrated  modelling  platform  for  assessing 
European  policies.  Proceedings  of  the  6th  Transport  Research  Arena,  Warsaw,  Poland,  18-21  April  2016.  Transport 
Research Procedia, DOI: http://10.1016/j.trpro.2016.05.341; Harrison, G., J. Krause, & C. Thiel (2016), Transitions and 
impacts of passenger car powertrain technologies in European member states. Proceedings of the 6th Transport Research 
Arena, Warsaw, Poland, 18-21 April 2016. Transport Research Procedia, DOI: http://10.1016/j.trpro.2016.05.418 

34 

 
 
                                                            
Public procurement has the potential to act as a catalyst for industrial and business innovation, and 
green  growth.  Adjusting  the  scope  and  methodology  of  vehicle  procurement  rules  and  guidance  to 
emphasise  CO2  and  pollutant  emissions  could  provide  effective  incentives  for  the  procurement  of 
cleaner vehicles. It would lead to increased demand i.e. a bigger domestic market that would result in 
falling  prices  for  consumers  due  to  economies  of  scale  and  would  contribute  to  the  worldwide 
competitiveness  of  the  European  industry.  Cohesion  policy  could  also  support  replacement  and 
renewal of rolling  stock and vehicles, primarily for collective transport modes (e.g. urban bus fleet, 
trams). 

4.1.2 Switching towards low emission alternative energy for transport  

Stronger integration of transport with the energy system and progressive change of the transport fuel 
mix is essential for low-transport mobility; consequently, the stylised scenarios explore the impacts of 
potential future policies  acting  on this driver. The Energy Union  strategy124 acknowledged the  need 
for: fostering the market uptake of alternatively fuelled vehicles/vessels and the deployment of related 
recharging/refuelling  infrastructure;  promoting  electrification,  especially  of  road  and  rail  transport  - 
making  the  EU  a  leader  in  electro-mobility  technologies,  as  well  as  the  importance  of  integration 
within urban mobility policies and the electricity grid.  

ICT is also needed to support integration of transport with the energy system. To reap the potentials of 
digitalisation, setting the right standards, ensure interoperability and enable data exchange while at the 
same time addressing privacy and cyber-security issues, would be necessary. 

Modelling  shows  that  transport  will  need  to  contribute  appropriately  to  achieving  the  targets  within 
the 2030 Climate and Energy policy framework (see section 3). In addition to the requirement for an 
at least 40% domestic reduction in GHG emissions by 2030 compared to 1990, transport will need to 
contribute  to the  mandatory  EU  wide  target  of  at  least  27%  renewable  energy  in  2030.  Taking  into 
account the constraints linked to food-based biofuels, innovation and support for the introduction of 
advanced renewable fuels into the EU market may be necessary.  

The development of European Standards is an important element in the creation and expansion of the 
European  market  for  biofuels.  Standardisation  work  is  ongoing  within  the  European  Committee  of 
Standardisation (CEN) on E10+ petrol blend, high ethanol blend (E85), biomethane and recently work 
started on algal biofuels. CEN recently approved a standard for paraffinic diesel fuel and blends and 
B20-30 for use in captive fleets. Research work is ongoing on E20-25 and on using gasoline in diesel 
engines under the auspices of CEN. 

Action  to  implement  existing  policies  would  also  need  to  be  taken.  This  includes  the  European 
Alternative Fuels Strategy, which adresses not only decarbonisation and air quality objectives but also 
security of energy supply and the competiveness of EU industry; it covers all modes of transport and 
aims  at  establishing  a  long-term  policy  framework  to  guide  technological  development  and 
investments  in  the  deployment  of  alternative  fuels,  and  give  confidence  to  consumers.  Specific 
measures  to  implement  the  four  priority  fields  of  EU  action  of  the  strategy:  1)  addressing  the 
technological  development,  including  advanced  biofuels  production;  2)  addressing  alternative  fuels 
infrastructure  and  its  integration  to  the  energy  system;  3)  developing  common  technical 
specifications;  4)  addressing  consumer  awareness,  acceptance  and  market  uptake,  are  presented  in 
more detail in Annex III.125 For example, a methodology of price comparison of electricity and other 

124  COM(2015) 80 final 
125  Priorities for further action need to be set according to the stage of technological maturity and market development as 
well  as  future  perspective  of  the  different  fuels,  focussing  on  infrastructure  and  its  integration  to  the  energy  system, 

35 

 
 
                                                            
 
conventional  and  alternative  fuels  may  be  developed  by  the  European  Commission,  and  a  platform 
could  promote  the  use  of  this  methodology  in  Members  States.126  The  Commission  set  up  an 
Alternative  Fuels  Observatory  (EAFO)  as  the  reference  website  for  user  information.  In  2015,  the 
Commission  gave  a  mandate  (M533)  to  CEN  and  European  Committee  for  Electrotechnical 
Standardisation (CENELEC) to adopt European standards for alternative fuels infrastructure as set out 
in  the  Directive  on  the  deployment  of  alternative  fuels  infrastructure.127  In  addition,  the  Project 
Committee on fuel labelling  CEN/TC 441  has started its work on fuel labelling  for all fuels and its 
final adoption is expected by the end of this year. Work on the well to wheel analysis is undertaken by 
JRC in cooperation with EUCAR and CONCAWE.128 

The  promotion  of  alternative  fuels  could  also  be  pursued  in  urban  areas,  inter  alia  by  integrating 
alternative  fuels  in  Sustainable  Urban  Mobility  Plans,  using:  access  regulations  (including  planned 
and future air quality low emission zones) - as a mean of promoting alternatively fuelled vehicles in 
urban centres, developing a CO2 emissions and air pollutants methodology  and targets to assess the 
deployment  of  alternative  fuels  in  public  transport  within  urban  areas,  support  to  cities  through 
Horizon 2020 and Connecting Europe Facility. 

The efficient integration of electric vehicles into the electricity system is a major challenge for grid 
stability and can only be managed successfully if charging can be shifted to times of low electricity 
demand  and/or  high  supply.  The  electricity  market  design  initiative  (MDI)  aims  at  enabling  and 
rewarding  consumers to  manage their consumption  (demand response) and hence  – among  others  – 
allow  for  smart  charging.  This  requires  access  to  relevant  technologies  (smart  meters)  as  well  as 
competitive  retail  markets.  The  initiative  may  also  reduce  barriers  to  the  self-generation  and 
consumption  of  renewable  electricity.  This  would  facilitate  consumers'  ability  to  use  electricity 
generated from their own solar panels for charging vehicles. Within the MDI also new provisions for 
storage  may  be  envisaged,  that  aim  at  incentivising  the  use  of  batteries  (including  electric  vehicles 
batteries) in the electricity system.   

In the longer term, refuelling infrastructure for hydrogen and renewable fuels of non-biological origin 
(e.g. methane, methanol and ethanol) could provide an additional source of flexibility to the electricity 
grid.  The  refuelling  stations  would be able  to  store  the  energy  in  form  of  gas  or  liquids  and  absorb 
excess variable renewables generation, while providing refuelling capacity without adding load to the 
electricity  grid  during  periods  of  low  renewables  generation.  These  fuels  could  also  be  used  to 
generate electricity at times of peak pricing. 

Measures for further rollout of recharging infrastructure, to support the electrification of transport 
would also be needed. Consideration may need to be given to facilitating the installation of additional 
vehicle charging infrastructure when constructing new buildings, as part of the review of the Energy 
Performance of Building Directive. In addition, facilitating access to existing sockets in private and 
public buildings is an extremely effective action at zero additional cost that could also be encouraged. 
Furthermore, it is crucial that these recharging points are interoperable, i.e. that users are able to find, 
charge and pay without barriers wherever in the EU.  

technical  specifications,  consumer 
expenditures to reduce costs and improve impacts, and R&D. 

information,  including  vehicles  commercialisation,  coordination  of  public 

126   The  Commission  has  commissioned  a    study  to  define  a  common  methodology  for  alternative  fuels  unit  price 

comparison to the German Energy Agency (DENA). The study will be concluded by the end of the year. 

127   These standards shall be compatible and aligned as much as possible with relevant international standards and as far as 

possible with existing refuelling infrastructure already in place. 

128  JEC - Joint Research Centre-EUCAR-CONCAWE collaboration (2014), WELL-TO-WHEELS Report Version 4.a - JEC 

WELL-TO-WHEELS ANALYSIS, available at: http://iet.jrc.ec.europa.eu/about-jec/downloads 

36 

 
 
                                                                                                                                                                                         
4.1.3 Efficiency of the transport system 

An  integration  of  all  transport  modes  is  needed  within  the  vision  of  a  more  efficient,  sustainable, 
competitive, accessible, user- and citizen-friendly transport system.129 A proper and acceptable policy 
mix to create an optimal and sustainable multimodal transport system is a prerequisite. Integration of 
ICT systems across different transport modes would foster seamless door-to-door mobility, integrated 
logistics  and  value  added  services  using  data  from  transport.  Consequently,  the  stylised  scenarios 
explore the impacts of potential future policies acting on this driver. 

Providing  correct  price  signals  and  reducing  disparities  in  road  charging  policies  across  the  EU  is 
needed,  and  would  contribute  to  the  further  internalisation  of  local  externalities  and  elimination  of 
discriminatory practices in the internal market. Differentiation of infrastructure charges for heavy 
goods vehicles according to CO2 emissions could additionally contribute to a faster uptake of more 
energy-efficient  vehicles.  The  improvement  in  the  functioning  of  the  Eurovignette  and  Electronic 
Tolling  System  (EETS)  system  in  the  EU  would  have  positive  impacts  on  CO2  and  air  pollutant 
emissions  from  the  road  transport  sector,  achieved  through  better  organisation  of  transport  and 
reduced congestion.  

Intelligent Transport Systems (ITS) make transport more efficient and safe and have important co-
benefits  such  as  reducing  energy  use  and  environmental  impacts,  reducing  congestion,  enhancing 
mobility, increasing service reliability, and supporting economic development. A Master plan for the 
deployment  of  cooperative  ITS  (involving  communication  between  vehicles,  between  vehicles  and 
infrastructure  and/or  infrastructure-to-infrastructure)  is  necessary  to  ensure  coordinated  investments, 
create  the  necessary  economies  of  scale  and  ensure  EU-wide  interoperability  and  continuity  of 
services.  A  recent  cost-benefit  analysis130  shows  that  this  can  have  significant  impact  on  fuel 
consumption (and associated CO2 and pollutant emissions), time saved in transport and safety. Setting 
technical  and  functional  specifications  on  multimodal  travel  information  services  would  provide 
enabling conditions for developing such services across the EU. These services could help travellers 
reduce  their  carbon  footprint  through  optimised  travel  (choices)  and  support  a  shift  to  sustainable 
modes of transport. 

Considering the expected increase in freight transport volumes in the years to come and the relatively 
low modal share of non-road modes at present, there is a need to handle any increase in road freight 
transport  volumes  by  using  energy  efficient  means  of  transport  and  by  optimising  their  operation. 
Internal market reforms for road haulage, buses and coaches, and hired vehicles would increase 
efficiency of road transport and reduce fuel consumption. In addition, the  adopted internal market 
reforms  for  other  modes  have  significant  potential  for  reducing  greenhouse  gas  emissions,  in 
particular by promoting the efficiency and competitiveness of greenhouse gas efficient modes, such as 
rail,  inland  waterways  and  maritime  transport  (4th  railway  package131,  Ports  Service  Regulation132, 
NAIADES II programme133), or by improvement in flight efficiency (Single European Sky 2+134). 

The  EU’s  Trans-European  Transport  Network  (TEN-T)  policy  aims  at  the  development  of 
multimodal  core-network  corridors,  promoting  modal  shift  and  sustainable  infrastructure  and 
equipment.  The  second  generation  of  corridor  work  plans,  currently  in  preparation  under  the 

129   A more comprehensive description of these measures is provided in Annex III. 
130  Carried out by Ricardo-AEA, available at: http://ec.europa.eu/transport/themes/its/c-its_en.htm 
131  Source: http://ec.europa.eu/transport/modes/rail/packages/2013_en.htm 
132  COM (2013) 295 final 
133  COM(2013) 623 final 
134  COM(2013) 409 final; COM(2013) 410 final 

37 

 
 
                                                            
supervision of each European Coordinator, would include the most complex elements of the corridor 
activity  such  as  measuring  the  impact  on  climate  change  and  the  promotion  of  sustainability  for 
instance in urban areas and nodes (e.g. ports). Shifting to sustainable modes like rail transport could 
also be supported by improving the attractiveness of rail freight corridors. Further simplification 
of  administrative  procedures  through  the  use  of  digital  technologies,  in  particular  through  the 
development  of  an  EU  maritime  single  window,  the  Digital  Single  Railway  Area  and  the  Digital 
Inland  Waterway  Area,  could  also  increase  the  demand  for  short  sea  shipping  and  other 
sustainable  transport  modes.  In  addition,  revising  the  rules  for  combined  transport  and 
improving  implementation  and  enforcement  would  support  shifting  long  distance  road  transport  to 
rail,  inland  waterways  or  short  sea  shipping,  thus  reducing  road  congestion  and  greenhouse  gas 
emissions. 

Cohesion  policy  is  uniquely  suited  to  catalyse  relevant  activities  in  EU  regions,  while  making  sure 
that  such  action  is  embedded  into  the  broader  context  of  an  integrated  development  strategy  and  in 
line  with  EU  policy  objectives.  To  ensure  that  transport  investments  are  part  of  an  overarching 
strategy for the balanced development  of a multimodal, seamless door-to-door transport system, the 
existence  of  a  comprehensive  national  and  regional  transport  plan  is  a  formal  prerequisite  for 
receiving cohesion policy support in the 2014-2020. These transport plans complement and reinforce 
the strategic framework provided by the TEN-T guidelines and the core network corridor work plans. 

4.1.4 Transport fuels in the EU ETS 

In  its  conclusions  on  the  2030  Climate  and  Energy  Framework,  the  European  Council  recalled  the 
possibility for a Member State to include its transport sector in the EU ETS, under current legislation, 
and  on  a  voluntary  basis.  The  Impact  Assessment  for  the  2030 Climate  and  Energy  Framework135 
discusses ETS scope expansion in section 7.8. Annex II summarises how road fuel inclusion would 
work technically, as well as the likely impacts of such inclusion. It would contribute towards reducing 
emissions in the road transport sector, but to a limited  degree, and only  once carbon  prices were to 
rise significantly above the current level. Furthermore, impact on environmental integrity in the short 
term,  and  the  potential  implications  for  carbon  price  in  the  longer  term,  need  to  be  carefully 
considered. The existing option of voluntary inclusion by individual Member States provides Member 
States (Article 24 of ETS Directive) who so wish with the flexibility they need to achieve ambitious 
non ETS targets. 

4.1.5 Cross-cutting initiatives 

Research,  innovation  (R&I)  and  competitiveness  are  paramount  to  accelerate  the  EU  energy 
transition, to address the climate challenge and to reap its benefits in terms of jobs and growth that the 
Energy union can bring. There is now a need to determine how the transport system could adapt to the 
decarbonisation challenge while ensuring that increasing mobility needs are met.  

Without a comprehensive strategy for research, innovation and competitiveness which brings together 
supply, demand and regulatory aspects, the EU risks losing its comparative advantage in low carbon 
solutions  as  early  mover  towards  decarbonisation,  both  in  terms  of  supply  and  innovation  and 
deployment taking place in Europe. 

A  Communication  on  the  Energy  Union's  research,  innovation  and  competitiveness  strategy, 
envisaged  for  November  2016,  would  provide  further  details,  including  on  a  strategic  transport 
research  and  innovation  agenda  (STRIA)  and  its  links  with  the  SET-Plan,  especially  regarding 

135  SWD(2014) 15 final 

38 

 
 
                                                            
electro-mobility  and  alternative  fuels.  STRIA  foresees  an  integrated  approach  to  Energy  Union 
research,  innovation  and  competitiveness  that  would  focus  on  the  following  core  priority  areas:  1) 
connectivity  and  automation  of  transport;  2)  electrification  in  all  modes  (e.g.  hybrid  lorries,  hybrid 
planes,  electrical  ferries);  3)  alternative  fuels;  4)  vehicle  design  and  manufacturing;  5)  transport 
infrastructure; 6) networks and traffic management systems; 7) smart transport and mobility services. 

An  important  contribution  to  the  reduction  of  aviation's  environmental  impacts  may  come  from 
current  research  and  development  actions  for  innovative  “green”  technologies,  including  the 
development  and  market  deployment  of  advanced  biofuels  and  hybridisation. EU  programmes  have 
mainly covered the  modernisation of air traffic  management  and the reduction of the impact on the 
environment  (Clean  Sky).  The  Single  European  Sky  ATM  Research  project  will  contribute  to  fuel 
savings and a potential reduction of 50 million tonnes of CO2 emissions.136 

The  wider  application  of  grant  funding  from  CEF,  the  European  Structural  and  Investment 
Funds  (ESIF)  and  other  EU  mechanisms  pursuing  decarbonisation  objectives  to  privately 
financed projects ("blending") would help bolster the transport pipeline in more challenging and more 
sustainable modes of transport and is an effective way to maximise the impact of public resources. 

Cross-funding schemes (e.g. the use of road charges, for instance, for the funding of rail projects), the 
setting  of user  funds  (e.g. future  revenues  from  infrastructure,  like  ports,  airports  and  toll  highways 
could contribute to such a fund) and revenues from the Eurovignette or the Emission Trading Scheme 
(e.g.  under  the  so  called  Innovation  and  Modernisation  Funds)  deploying  the  user/polluter  pays 
principle,  may  be  considered  as  financing  models  that  complement,  in  some  cases,  the  available 
funding  for  infrastructure.  Financial  instruments  that  mitigate  risk  for  private  investors,  such  as 
demand  risks  related  with  the  uncertainty  on  clean  vehicles  market  penetration  and  risk  associated 
with underlying green assets, are also essential to speed up the transition to low carbon technologies 
and  are  being  developed  in  particular  under  the  CEF  and  the  ESIF.  The  inclusion  of  sustainable 
transport within the scope of the green bonds (e.g. the Climate Awareness Bonds, currently issued by 
the  EIB),  could  be  also  considered,  ensuring  that  investments  supported  under  this  new  category 
respect stringent criteria on environment integrity. 

At the TEN-T Days in Rotterdam (20-22 June 2016), an investor's conference has been organised that 
enabled  to  gather  private  investors,  project  promoters,  the  EIB  and  the  Commission  to  stimulate 
private  investments  in  transport.  Dedicated  meetings  have  been  organised  to  liaise  promoters  of 
projects in the field of transport and investors  – including the EIB. This exercise is part of an effort 
from  the  European  Institutions  to  boost  investments  in  transport  through  more  efficient  sources  of 
financial support than grants. Projects which could be financed by private investors and/or the EIB – 
also  thanks  to  the  opportunities  offered  by  the  EFSI  –  are  researched,  identified  and  preliminarily 
discussed. An investment platform may be setup later this year, with a focus on sustainable transport, 
which would offer EFSI instruments for support to investments in, for instance, alternative fuels for 
buses. 

Improving urban mobility has a high potential to reduce the CO2 emissions from transport and high 
exceedances  of  air  pollutants  that  are  widespread  over  European  urban  areas.  Sustainable  Urban 
Mobility Plans (SUMPs) help dealing with the complexity of urban mobility which could stimulate a 
shift  towards  cleaner  and  more  sustainable  transport  modes  such  as  public  transport,  cycling  and 
walking. Effectiveness of such action also depends on specificities of the urban context and requires 
partnerships  between  EU  institutions,  national,  regional  and  municipal  authorities  (for  instance 

136  COM(2015) 598 final 

39 

 
 
                                                            
initiatives such as CIVITAS, the Covenant of Mayors, and the Smart Cities & Communities European 
Innovation Partnership). Synergies may be found e.g. by making SUMPs a pre-condition for receiving 
EU funding/increasing the co-financing rate and/or combining guidelines on urban access regulation 
schemes  with  a  common  definition  of  ultra-low  emission  vehicles,  covering  both  conventional 
pollutants and CO2 emissions. 

New societal developments and behaviour changes have large potential for improving mobility and 
contributing to decarbonisation, but also represent important question marks for the transport system 
and  existing  policy.  Integrating  the  sharing  economy  and  automated  and  connected  vehicles  in 
the  existing  transport  institutional  and  technical  set-up,  and  making  full  use  of  digitalisation, 
mobility  as  a  service  and  the  potential  of  active  modes,  would  need  to  be  part  of  the  transport 
agenda. 

4.2 Description of the pathways/scenarios 

As indicated in the Impact Assessment accompanying the 2011 White Paper, the  policy instruments 
identified  according to the three main pillars: moving towards zero-emission vehicles, low emission 
alternative energy for transport and efficiency of the transport system are not mutually exclusive; the 
existence  of  multiple  market  failures  and  strong  synergies  among  policies  require  the  adoption  of  a 
combination of individual instruments that complement each other and create a comprehensive policy 
mix.  None  of  these  instruments  alone  would  be  capable  of  tackling  in  a  satisfactory  way  the 
decarbonisation objective and only a well-designed policy mix can also maximise the co-benefits of 
decarbonisation  (e.g.  reduced  congestion  which  improves  productivity  and  creates  more  liveable 
cities). A holistic approach that comprises all elements considered so far is therefore needed.137 

The  modelling  exercise  undertaken  broadly  covers  the  initiatives  identified  according  to  the  three 
main  pillars  (sections  4.1.1-4.1.3),  supported  by  cross-cutting  initiatives  (section  4.1.5).  It  provides 
stylised  quantitative  assessment  of  the  effectiveness  and  efficiency  of  possible  initiatives  in  the 
policy  areas  described  above,  giving  illustrative  evidence  on  their  relative  importance  in  terms  of 
decarbonisation  goal  and  other  co-benefits,  on  the  way  they  interact  and  on  the  intensity  of  the 
intervention  that  is  necessary.  The  Commission  has  modelled  the  impact  of  the  possible  policy 
measures  assuming  a  stylised  specification  –  indicated  in  Annex  IV  –  that  does  not  necessarily 
correspond  to  what  would  actually  be  proposed  at  a  later  stage.  As  already  explained,  the  precise 
specification of each policy measure will be done following a more specific analysis and an individual 
Impact Assessment. In addition, section 4.1.4 and Annex II summarises how road fuel inclusion into 
EU ETS would work technically, as well as the likely impacts of such inclusion. 

The  pathways/scenarios  for  the  decarbonisation  of  transport  were  identified  using  a  two-step 
approach.  First,  two  central  scenarios  have  been  developed  for  the  overall  economy  to  reach,  in 
addition to the 2020 targets, all the 2030 targets agreed by the October 2014 European Council and 
the 2050 decarbonisation objectives. The difference between the two central scenarios lies in the level 
of  ambition  to  be  achieved  for  the  energy  efficiency  goal  (27%  or  30%  primary  energy  savings  in 
2030  compared  to  the  2007  baseline).  In  order  to  ensure  the  consistency  of  the  Commission's 
initiatives  and  accompanying  analyses,  the  same  central  scenarios  have  been  used  in  impact 
assessments  accompanying proposals for the Effort Sharing Regulation for the period  2021 to 2030 
and the revision of the Energy Efficiency Directive. 

137  SEC(2011) 358 final 

40 

 
 
                                                            
For  transport,  they  include  a  cost-effective  policy  mix  that  would  be  needed  under  the  three  pillars 
discussed  in  sections  4.1.1-4.1.3  (i.e.  low-  and  zero-emission  vehicles;  low  emission  alternative 
energy  for  transport;  efficiency  of  the  transport  system)  for  achieving  the  40%  reduction  in  GHG 
emissions for the overall economy by 2030 and the 30% reduction of non-ETS emissions relative to 
2005, while respecting the current policy mix. 

In  the  second  step,  several  more  ambitious  pathways/scenarios  have  been  considered  building  on 
the central scenario reaching 30% energy efficiency. Consequently, all pathways/scenarios envisage 
action  under  the  three  pillars  of  sections  4.1.1-4.1.3  and  have  in  common  a  certain  number  of 
initiatives.  What  differentiates  them  is  the  intensity  of  intervention  that,  depending  on  the 
pathway/scenario,  is  higher  in  one  of  the  three  fields  (e.g.  low-  and  zero-emission  vehicles;  low 
emission alternative energy for transport; efficiency of the transport system). The pathways/scenarios 
are  also  supported  by  cross-cutting  initiatives.  A  short  description  of  the  pathways/scenarios  is 
provided  below,  complemented  by  a  more  detailed  description  -  including  their  underlining 
assumptions - in Annex IV. 

4.2.1 Central scenarios 

The  central  scenarios  (so-called  “EUCO27”  and  “EUCO30”)  start  from  the  EU  Reference  scenario 
2016, the difference between them being the level of ambition assumed for the 2030 energy efficiency 
target  (27%  or  30%138),  and  the  corresponding  measures  to  achieve  it.139  Coordination  policies  are 
assumed which enable long term decarbonisation of the economy.  

For  transport,  the  European  Council  scenario  with  a  27%  energy  efficiency  target  for  2030 
(EUCO27) considers in the area of low- and zero-emission vehicles: more stringent CO2 standards for 
cars  and light commercial vehicles post-2020 (i.e.  reaching 75 gCO2/km for  cars and 120  gCO2/km 
for light commercial vehicles in 2030) and measures leading to improvements in the fuel efficiency of 
new  conventional  and  hybrid  heavy  goods  vehicles  (i.e.  1.5%  per  year  by  2030).  The  levels  of  the 
CO2  standards  for  light  duty  vehicles  in  this  scenario  and  all  other  scenarios  discussed  below  are 
defined  in  terms  of  current  test-cycle.140  Additionally,  under  the  second  pillar  identified  in  section 
4.1.2  it  assumes  the  development  of  infrastructure  for  alternative  powertrains  and  promotion  of 
alternative fuels for all relevant transport modes, notably renewable fuels that are needed to meet the 
overall  27%  renewables  target.  In  the  area  of  efficiency  of  the  transport  system,  it  covers  adopted 
internal  market  reforms  that  have  significant  potential  for  reducing  greenhouse  gas  emissions,  in 
particular by promoting the efficiency and competitiveness of greenhouse gas efficient modes, such as 
rail  and  waterborne  transport  (4th  railway  package,  NAIADES  II  package,  ports  package),  and 
measures providing correct price signals and gradually reducing disparities in road charging policies 
on the inter-urban network across the EU (see Table 1 and Annex IV for a more detailed description).  

The 30% energy efficiency central scenario (EUCO30) features all transport measures included in 
the  EUCO27  scenario  but  considers  more  stringent  CO2  standards  for  cars  and  light  commercial 
vehicles post-2020 (i.e. reaching 70 gCO2/km for cars and 110 gCO2/km for light commercial vehicles 
in  2030).  For  improving  the  efficiency  of  the  transport  system,  it  additionally  includes  a 

138  Energy  efficiency  targets  are  expressed  in  the  currently  applicable  metric,  i.e.  the  %  reduction  in  primary  energy 
consumption in the year 2030, as compared to the projected 2030 primary energy consumption of the Baseline projection 
made in 2007. 

139   Scenarios EUCO27 and EUCO30 are the central scenarios in the Commission's analysis underpinning the proposals for 
the Energy Efficiency Directive review, Effort Sharing for the period 2021 to 2030 as well as the Communication on the 
decarbonisation of transport. 

140  The  CO2  fleet  average  values  in  all  scenarios  relate  to  the  currently  applicable  NEDC  test  cycle  and  procedure.  An 

equivalent level of ambition in terms of the new WLTP procedure will result in different absolute values.  

41 

 
 
                                                            
differentiation  of  infrastructure  charges  for  heavy  goods  vehicles  according  to  CO2  emissions  that 
could  contribute  to  a  faster  uptake  of  more  energy-efficient  vehicles,  plus  the  deployment  of 
Collaborative Intelligent Transport Systems and eco-driving. 

The central scenarios provide the required contribution from transport to achieve the 40% reduction in 
GHG  emissions  for  the  overall  economy  by  2030  and  the  30%  reduction  of  non-ETS  emissions 
relative to 2005. Action would be needed on all three key areas: low- and zero-emission vehicles, low 
emission  alternative  energy  for  transport,  and  efficiency  of  the  transport  system  to  deliver  these 
emission reductions. 

4.2.2 More ambitious pathways/scenarios for low-emission mobility 

Five more ambitious pathways in terms of emissions reduction have been established. They all have 
as a starting point the 30% energy efficiency central scenario (EUCO30), meaning that they include a 
common  set  of  policy  measures  acting  on  the  three  pillars  identified  in  sections  4.1.1-4.1.3.  In 
addition, each of these pathways assumes additional action in a specific field (see Table 1 and Annex 
IV for a more detailed description).  

The first pathway/scenario (so-called “VEH”) depicts ambitious vehicle efficiency standards, acting 
in the low- and zero-emission vehicles area. It assumes very stringent CO2 standards for cars and light 
commercial  vehicles  (i.e.  reaching  64  gCO2/km  for  cars  and  106  gCO2/km  for  light  commercial 
vehicles in 2030) as set out by the Commission in its statements during the trialogue discussions for 
the 2020 targets.141 It further assumes measures supporting faster improvements in the fuel efficiency 
of new conventional and hybrid heavy goods vehicles (i.e. 1.6% per year by 2030). These measures 
are complemented by promotion of public procurement that provides effective incentives to purchase 
cleaner vehicles. Because of strong focus on vehicle efficiency standards, this pathway also requires 
large scale deployment of recharging/refuelling infrastructure to support the development of electro-
mobility. 

The  second  pathway/scenario  is  further  broken  down  into  two  variants,  'A'  and  'B',  both  of  which 
illustrate action on advanced renewable fuels142 (so-called “BIO-A” and “BIO-B”) and focus on the 
second  pillar  (i.e.  switching  towards  low  emission  alternative  energy  for  transport),  supported  by 
cross-cutting  initiatives  in  the  area  of  R&I.  The  BIO-A  scenario  includes  specific  measures  (e.g. 
incorporation/blending  obligations  on  fuel  suppliers)  for  a  broader  uptake  of  advanced  renewable 
fuels (including biomethane and biokerosene as well as renewable fuels of non-organic origin), while 
no additional support applies to food-based biofuels. The share of food-based biofuels in liquid and 
gaseous fuels is very gradually reduced during 2020-2030 and phased out by 2050. In scenario BIO-B 
the  total  level  of  biofuels  is  kept  equal  to  that  in  the  30%  energy  efficiency  central  scenario 
(EUCO30),  while  reducing  the  contribution  that  food-based  biofuels  make  to  the  overall  share  in 
liquid  and  gaseous  fuels  to  0%  in  2030  and  beyond.  The  BIO-B  scenario,  also  includes  specific 
measures  (e.g.  incorporation/blending  obligations  on  the  fuel  suppliers)  for  the  uptake  of  advanced 
renewable  fuels  (including  biomethane  and  biokerosene  as  well  as  renewable  fuels  of  non-organic 
origin).  

141  These figures referred to the emission values established as part of the type approval process for new vehicles using the 

New European Driving Cycle (NEDC). 

142  For  modelling  purposes,  specific  incentives  were  included  for  ‘advanced’  biofuels  and  renewable  liquid  and  gaseous 
transport fuels of non-biological origin made from feedstocks listed in Annex IX Part A of the ILUC Directive and for 
biofuels  made  from  waste  oils  and  fats  produced  from  feedstocks  listed  in  Annex  IX  Part  B  of  the  ILUC  Directive 
(Directive 2015/1513/EU). For the presentation of the modelling results the term 'advanced renewable fuels' is used to 
cover fuels produced from feedstocks listed in Annex IX Part A and Annex IX Part B of the ILUC Directive. 

42 

 
 
                                                            
The  third  pathway/scenario  assume  advanced  research  and  innovation  in  electro-mobility  (so-
called “TECH”), focusing on the second pillar (i.e. switching towards low emission alternative energy 
for transport). The TECH scenario is designed to show the effect of policies that emphasise the rapid 
deployment of new powertrains, mainly supported by cross-cutting initiatives in the area of advanced 
research and innovation in electro-mobility.  

The fourth and fifth pathways/scenarios focus on improving the efficiency of the transport system 
supported  by  cross-cutting  initiatives  to  be  undertaken  by  Member  States  for  improving  urban 
mobility,  and  measures  in  the  field  of  taxation.  The  so-called  “MOBI”  scenario  includes  a  more 
ambitious pathway than EUCO30 scenario for providing correct price signals and internalising local 
externalities  on  the  inter-urban  network,  plus  ambitious  deployment  of  Collaborative  Intelligent 
Transport Systems and measures promoting efficiency improvements and multimodality (e.g. review 
of  the  Combined  Transport  Directive,  review  of  the  Rail  Freight  Corridors  Regulation,  review  of 
market  access  rules  for  road  transport).  In  addition,  is  assumes  soft  measures  supporting  urban 
policies that curb pollutant emissions. The MOBI-TAX scenario covers all measures included in the 
MOBI scenario, plus an alignment of the EU minimum tax rates of petrol and gas oil used as motor 
fuels for removing the price advantage for diesel.  

Table 1: Summary of pathways/scenarios for low-emission mobility 

Scenarios 

Main features 

Central scenarios 

European Council 
scenario with a 27% 
energy efficiency target 
for 2030 (EUCO27) 

Reaching all the 2030 targets agreed by the October 2014 European Council with 
27%  primary  energy  consumption  reduction  by  2030.  For  transport,  the  main 
assumptions relate to:   
•  More stringent CO2 standards for cars and light commercial vehicles post-2020; 
measures  leading  to  improvements  in  the  fuel  efficiency  of  new  conventional 
and hybrid heavy goods vehicles. 

•  Development of infrastructure for alternative powertrains (including electricity, 
hydrogen  and  LNG)  for  all  relevant  transport  modes;  promotion  of  alternative 
fuels for all relevant modes driven by incentives for biofuels and CO2 standards 
for electrification; food-based biofuels respect the 7% cap of ILUC Directive in 
2020 and their growth post-2020 is not going beyond the cap. 

•  Measures  improving  efficiency/reducing  emissions  of  all  transport  modes: 
measures  adopted  after  the  cut-off  date  of  Reference  scenario  2016  and  a 
gradual  approach  towards  the  internalisation of  local  externalities  on  the  inter-
urban network.  

30% energy efficiency 
central scenario 
(EUCO30) 

As  EUCO27  but  with  30%  primary  energy  consumption  reduction  by  2030.  For 
transport, the main differences relative to EUCO27 relate to:  
• More stringent CO2 standards for cars and light commercial vehicles relative to 

EUCO27. 

• Modulation  of  infrastructure  charges  according  to  CO2  emissions  for  heavy 

goods vehicles. 

• Deployment of Collaborative Intelligent Transport Systems and eco-driving. 

More ambitious pathways/scenarios 

Ambitious vehicle 
efficiency standards - 
(VEH scenario)  

As EUCO30 scenario but additionally driven by: 
•  Very stringent CO2 standards for light duty vehicles (cars and light commercial 
vehicles), leading to faster deployment of more fuel efficient ICE vehicles and 
deployment of alternative powertrains;  

•  Measures  leading  to  faster  improvements  in  the  fuel  efficiency  of  new 

conventional and hybrid heavy goods vehicles;  

43 

 
 
Scenarios 

Main features 

•  Promotion  of  public  procurement  that  provides  effective  incentives  for 

purchasing cleaner vehicles. 

BIO-A scenario: as EUCO30 scenario but assuming action for a broader uptake of 
advanced renewable fuels and specific incentives for biokerosene and biomethane. 
No  additional  support  applies  to  food-based  biofuels;  their  share  in  liquid  and 
gaseous  fuels  is  very  gradually  reduced  during  2020-2030  and  is  phased  out  by 
2050.  

BIO-B scenario: as EUCO30 scenario but assuming action for a broader uptake of 
advanced  renewable  fuels,  and  specific 
incentives  for  biokerosene  and 
biomethane;  the  contribution  food-based  biofuels  make  to  the  overall  share  of 
biofuels in liquid and gaseous fuels is phased out from 2020 levels to 0% in 2030 
and beyond. 
As  EUCO30  scenario  but  assuming  lower  technology  costs  (e.g.  for  electric 
vehicle component costs and fuel cells) due to higher R&D investments. 

As  EUCO30  scenario  but  additionally  driven  by  a  range  of  measures  acting  on 
transport demand and leading to improvements in energy efficiency and transport 
system efficiency, supported by other cross-cutting initiatives. Covering:  
•  Full  internalisation  of  local  externalities  on  the  inter-urban  network  and 

modulation of infrastructure charges according to CO2 emissions;  

•  Ambitious deployment of Collaborative Intelligent Transport Systems;  
•  Measures promoting efficiency improvements and multimodality;  
•  Measures promoting urban policies that curb pollutant emissions. 
As  MOBI  scenario  but  assuming  measures  in  the  field  of  fuel  taxation  (i.e. 
alignment of the EU minimum tax rates of petrol and gas oil used as motor fuels). 

Action on advanced 
renewable fuels (BIO-A 
and BIO-B scenarios)  

Advanced research and 
innovation in electro-
mobility (TECH 
scenario)  
Focus on efficiency of the 
transport system  
(MOBI scenario)  

Focus on efficiency of the 
transport system and 
fuel taxation (MOBI-
TAX scenario)  

4.3 Analysis of impacts of the pathways/scenarios  

4.3.1 Moderation of energy demand  

The impacts of the decarbonisation pathways/scenarios are analysed in terms of energy efficiency (i.e. 
achievements  in  energy  savings  and  improvements  in  energy  intensity)  and  effects  on  the  fuel  mix. 
The  effects  of  higher  penetration  of  electric  vehicles  on  power  generation  system  are  also  briefly 
discussed.   

Increasing energy efficiency  

Energy  demand  in  transport  declines  in  all  decarbonisation  pathway/scenarios  relative  to  the 
Reference scenario (REF2016), resulting in total savings of 16 to 29 Mtoe in 2030 (82 to 86 Mtoe in 
2050). It has to be stressed that these savings are achieved despite the growth in transport activity in 
all  scenarios  and  throughout  the  projection  period.  More  than  80%  of  these  savings  originate  from 
passenger transport, due to higher potential for improvements in energy efficiency and electrification 
in  this  segment,  and  policies  promoting  multimodality  and  the  competitiveness  of  more  sustainable 
transport modes (see Table 2).  

EUCO27  and  EUCO30  scenarios  show  energy  savings  in  passenger  transport  of  14  to  17  Mtoe  in 
2030 relative to REF2016. Higher savings in EUCO30 are driven by more stringent CO2 standards for 
light duty vehicles (LDVs) post-2020, complemented by the deployment of Collaborative Intelligent 

44 

 
 
Transport Systems (C-ITS) and enforcement of eco-driving. The highest savings are projected in VEH 
scenario (about 25 Mtoe) due to the most stringent vehicle efficiency standards (i.e. 64gCO2/km for 
cars  and  97gCO2/km  for  vans  in  2030)  among  scenarios,  supported  by  public  procurement  that 
provides incentives to purchase cleaner and more fuel efficient vehicles. A large part of the benefit is 
attained after 2030 as the renewal of the fleet takes place only gradually over time. 

Table 2: Energy savings of passenger and freight transport relative to Reference scenario 2016 (in Mtoe) 

Energy savings (difference to REF2016 in 
Mtoe) 

REF2016 * 

EUCO27  

EUCO30  

2030 

2050 

2030 

2050 

2030 

2050 

Transport - total 

Passenger transport  

Freight transport  

Energy savings (difference to REF2016 in 
Mtoe) 

Transport - total 

Passenger transport  

Freight transport  

Energy savings (difference to REF2016 in 
Mtoe) 

Transport - total 

Passenger transport  

Freight transport  

341 

246 

96 

355 

252 

103 

-16 

-14 

-2 

-82 

-72 

-10 

-20 

-17 

-3 

-83 

-72 

-11 

VEH 

BIO-A 

BIO-B 

2030 

2050 

2030 

2050 

2030 

2050 

-29 

-25 

-4 

-86 

-72 

-13 

-21 

-18 

-3 

-84 

-72 

-11 

-22 

-19 

-3 

-84 

-72 

-11 

TECH 

MOBI 

MOBI-TAX 

2030 

2050 

2030 

2050 

2030 

2050 

-22 

-19 

-3 

-86 

-74 

-12 

-22 

-19 

-4 

-84 

-72 

-11 

-25 

-20 

-5 

-85 

-73 

-12 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For REF2016 energy demand for 2030 and 2050 is provided in Mtoe.   

For freight transport, EUCO27 and EUCO30 would lead to about 2 to 3 Mtoe energy savings in 2030. 
Slightly higher savings in EUCO30 are driven by the modulation of infrastructure charges for heavy 
goods vehicles according to CO2 emissions, deployment of C-ITS and eco-driving. MOBI, VEH and 
MOBI-TAX  scenarios  result  in  higher  savings  (4  to  5  Mtoe),  achieved  however  through  different 
policy  instruments.  In  VEH,  measures  leading  to  faster  improvements  in  fuel  efficiency  of  new 
conventional and hybrid heavy goods vehicles result in additional savings of almost 2 Mtoe in 2030 
relative to EUCO30.  

For both passenger and freight transport, MOBI scenario achieves additional savings to EUCO30 of 
about 2 Mtoe thanks to full internalisation of local externalities, more intensive measures promoting 
transport system efficiency improvements and multimodality143, ambitious deployment of C-ITS and 
support for multimodal travel information. The alignment of the EU minimum tax rates of petrol and 
gas oil in MOBI-TAX, in addition to all measures assumed in MOBI, yields further energy savings in 
freight and passenger transport of about 2 Mtoe relative to MOBI scenario in 2030; for freight this is 
particularly  effective  because  fuel  costs  including  taxation  represent  almost  30%  of  the  total  road 
freight  costs  and  their  minimisation  is  among  the  main  objectives  of  heavy  goods  vehicles 
manufacturers and fleet operators.  

EUCO27  and  EUCO30  scenarios  are  projected  to  result  in  significant  improvements  in  energy 
intensity  of  passenger  transport  by  2030,  of  34-35%  compared  to  2010,  while  VEH  would  deliver 
almost  37%  reduction  (see  Table  3).  The  rather  limited  difference  between  VEH  and  EUCO30  by 

143  As  explained  in  Annex  IV,  this  covers  the  review  of  the  Combined  Transport  Directive,  review  of  the  Rail  Freight 

Corridors Regulation, review of market access rules for road transport. 

45 

 
 
                                                            
2030 (2 percentage points), despite very stringent vehicle efficiency standards assumed in VEH, can 
be  explained  by  the  fact  that  standards  apply  only  to  new  vehicles  and  by  the  renewal  of  the  fleet 
which takes place only gradually over time. A large part of the benefit is attained after 2030. 

Table 3: Change in energy intensity of passenger and freight transport for 2010-2030 and 2010-2050 (in %) 

Energy intensity (% change to 2010) 

Passenger (toe/Mpkm) 

Freight (toe/Mtkm) 

Energy intensity (% change to 2010) 

Passenger (toe/Mpkm) 

Freight (toe/Mtkm) 

Energy intensity (% change to 2010) 

Passenger (toe/Mpkm) 

Freight (toe/Mtkm) 

REF2016  

EUCO27  

EUCO30  

'10-'30 

'10-'50 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

-30.2% 

-40.3% 

-33.9% 

-56.3% 

-34.9% 

-56.5% 

-17.2% 

-24.2% 

-18.9% 

-31.2% 

-19.5% 

-32.0% 

VEH 

BIO-A 

BIO-B 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

-36.9% 

-56.5% 

-35.0% 

-56.6% 

-35.1% 

-56.5% 

-21.1% 

-33.6% 

-19.6% 

-32.0% 

-19.7% 

-32.0% 

TECH 

MOBI 

MOBI-TAX 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

-35.5% 

-57.3% 

-34.9% 

-56.6% 

-34.9% 

-56.6% 

-19.6% 

-32.3% 

-19.9% 

-32.2% 

-20.3% 

-32.6% 

 Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

For freight transport, the highest improvements in energy intensity by 2030 are also expected in VEH 
scenario  (about  21%)  but  large  improvements  relative  to  the  REF2016  are  already  achieved  in 
EUCO27 and EUCO30 (around 19-20%). A graphical illustration of energy savings of passenger and 
freight  transport  relative  to  REF2016  and  of  changes  in  energy  intensity  of  passenger  and  freight 
transport is provided in Figure 5. 

Figure 5: Energy savings relative to Reference scenario 2016, in Mtoe (left side) and change in energy intensity 
for 2010-2030 and 2010-2050, in % (right side) 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Impact on the fuel mix 

46 

-80.0-60.0-40.0-20.00.0EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXEnergy savings in transport -difference to REF2016 (in Mtoe)2050 - Passenger2030 - Passenger2050 - Freight2030 - Freight-80%-60%-40%-20%0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXEnergy intensity -passenger and freight transport (growth rates, in %)Passenger (2010-2050)Passenger (2010-2030)Freight (2010-2050)Freight (2010-2030) 
 
 
Alternative fuels and energy carriers are projected to gain an increasing share in the energy used in 
transport  in  all  decarbonisation  pathways/scenarios,  providing  about  15-17%  of  energy  demand  by 
2030  (see  Figure  6).  Alternative  fuels  are  defined  in  line  with  the  Directive  2014/94/EU.144  BIO-A 
shows  the  highest  share  of  alternative  fuels  by  2030,  due  to  strong  incentives  for  the  uptake  of 
advanced  renewable  fuels,  followed  by  VEH  where  very  stringent  CO2  standards  for  light  duty 
vehicles supported by large scale deployment of recharging/refuelling infrastructure and incentives for 
public  procurement  that  lead  to  faster  development  of  electro-mobility  play  an  important  role.  The 
TECH scenario shows a rather similar share to VEH, thanks to advanced research and innovation in 
electro-mobility  (battery  electric  and  fuel  cell  electric  vehicles)  that  reduce  the  costs  of  these 
alternative  powertrains  and  enable  faster  deployment.  BIO-B  results  in  a  somewhat  lower  share  of 
alternative fuels than BIO-A (around 16%), because of the complete phase out of food-based biofuels 
by 2030 assumed in this scenario. However, due to very strong incentives, it results in a higher share 
of  advanced renewable  fuels  than  BIO-A.  Overall,  the  penetration  of  alternative  fuels  in  the  energy 
mix  by  2030  is  moderate  due  to  the  fact  that  additional  measures  relative  to  REF2016  are  only 
assumed post-2020 and also because the renewal of the vehicle stock takes time. 

The  share  of  diesel  use  in  transport  goes  down  by  1  to  3  percentage  points  by  2030  relative  to 
REF2016,  while  the  share  of  gasoline  by  around  2  percentage  points.  The  lowest  share  of  diesel  is 
visible in VEH scenario, due to very stringent vehicle efficiency standards, and also in MOBI-TAX 
which assumes higher taxation of diesel compared to the current levels. Jet fuels slightly increase their 
share (by about one percentage point), as air transport activity continues to grow strongly by 2030. In 
addition, no alternative fuel options are available in the short to medium term except for the BIO-A 
and BIO-B scenarios where strong incentives lead to uptake of biokerosene; thus these scenarios show 
the lowest increase in fossil jet fuels (0.3 percentage points) relative to REF2016.  

By  2050,  similar  levels  of  alternative  fuels  (around  59-61%  by  2050)  are  achieved  in  all 
pathways/scenarios due to the large  scale electrification  of the light duty vehicle fleet and the large 
scale deployment of advanced renewables fuels necessary for decarbonisation; this is accompanied by 
significant decline in the use of diesel, gasoline and jet fuels (see Figure 51, in Annex IV). The scale 
of electrification of the fleet is similar in all pathways/scenarios because the same CO2 standards for 
LDVs are assumed in the long term (i.e. 25gCO2/km for cars and 60gCO2/km for vans in 2050). 

144  Directive 2014/94/EU defines ‘alternative fuels’ as fuels or power sources which serve, at least partly, as a substitute for 
fossil oil sources in the energy supply to transport and which have the potential to contribute to its decarbonisation and 
enhance the environmental performance of the transport sector. They include, inter alia: electricity; hydrogen; biofuels; 
synthetic and paraffinic fuels; natural gas, including biomethane, in gaseous form (compressed natural gas (CNG)) and 
liquefied form (liquefied natural gas (LNG)); liquefied petroleum gas (LPG). 

47 

 
 
                                                            
Figure 6: Final energy demand in transport by fuel in 2030 (in % of total)  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Focusing on alternative fuels and energy carriers, electricity demand is projected to show the highest 
increase  in  2030  relative  to  REF2016,  gaining  0.9-2  percentage  points  in  terms  of  energy  use  in 
transport (see Figure 7). VEH shows the largest uptake of electricity in 2030 (4.5% of energy demand 
in  transport),  followed  by  TECH  (about  4%).  However,  significant  increase  relative  to  REF2016  is 
already  achieved  in  EUCO27  and  EUCO30  (0.9-1.2  percentage  points  increase  in  its  share)  due  to 
stringent  vehicle  efficiency  standards  supported  by  the  deployment  of  recharging  infrastructure. 
Electricity would provide 3.2% of energy use in road transport in VEH and 2.6% in TECH scenario, 
and  about  70%  of  energy  use  in  rail  in  all  decarbonisation  pathways/scenarios  by  2030.  Hydrogen 
also  shows  an  increasing  share  by  2030  relative  to  REF2016,  gaining  0.2-0.5  percentage  points  in 
energy  use  in  transport.  The  highest  uptake  takes  place  in  TECH  scenario  where  it  provides  about 
0.5% of energy demand by 2030. 

48 

2010REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXAlternative fuels6.7%12.5%14.9%15.3%16.3%16.5%15.5%15.8%15.4%15.8%Fuel oil0.4%0.2%0.3%0.3%0.3%0.3%0.3%0.3%0.3%0.3%Jet fuel13.7%16.9%17.5%17.8%18.3%17.2%17.2%17.9%17.9%18.0%Diesel53.6%54.2%53.1%52.6%51.2%52.1%53.0%52.3%52.3%51.3%Gasoline25.6%16.2%14.2%14.0%13.9%13.9%14.1%13.8%14.1%14.6%0%10%20%30%40%50%60%70%80%90%100% 
 
 
 
Figure 7: Alternative fuels and energy carriers in transport in 2030 (in % of total energy demand)  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Natural  gas,  in  particular  liquefied  natural  gas  (LNG),  would  gain  0.8-1.3  additional  percentage 
points in terms of share in energy demand by 2030, relative to REF2016. LNG is projected to provide 
about 6-8% of fuels used in heavy goods vehicles and about 4% of fuels used in inland navigation. 
This is due to the internalisation of local externalities that push for the use of less polluting fuels and 
to  the  NAIADES  II  package  for  inland  navigation,  supported  by  the  availability  of  refuelling 
infrastructure,  present  in  all  pathways/scenarios.  Measures  promoting  urban  policies  that  curb 
pollutant emissions provide an additional incentive in MOBI and MOBI-TAX scenarios. Natural gas 
shows  the  highest  increase  in  MOBI-TAX  due  to  the  rise  in  the  diesel  tax  rates  relative  to  current 
levels and the lowest increase in the BIO-A and BIO-B scenarios where the more prominent share of 
liquid  and  gaseous  biofuels  (including  biomethane)  leaves  smaller  space  for  other  alternative  fuels. 
Uptake of LNG would also take place in international shipping, especially in the short sea shipping 
segment, providing about 9% of overall bunker fuels by 2030. Compressed natural gas in public road 
transport  slightly  increases  its  share  and  would  represent  about  2-3%  of  energy  use  by  2030. 
Liquefied petroleum gas is projected to maintain a rather stable share (2.2-2.3% of energy demand), 
only 0.1-0.2 percentage points higher than in REF2016 across all scenarios by 2030. 

Overall,  the  highest  share  of  alternative  fuels  in  transport  energy  demand  by  2030  originates  from 
liquid biofuels. Their share increases only slightly from about 6% in REF2016 to 6.2% in EUCO27 
and EUCO30 scenarios in which the 27% renewables target is met in 2030. In the BIO-A scenario this 
share  increases  to  7.2%  due  to  strong  support  for  advanced  renewable  fuels  while  no  additional 
support  is  provided  for  food-based  biofuels.  In  the  BIO-B  scenario  the  share  of  liquid  biofuels  is 
similar to REF2016 because of the complete phase out of food-based biofuels by 2030. However, due 
to strong incentives for advanced renewable fuels, the share of these fuels is higher than in BIO-A. 
Other decarbonisation scenarios/pathways show similar share as EUCO30.  

49 

2010REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXLiquefied Petroleum Gas1.5%2.1%2.2%2.2%2.2%2.2%2.2%2.2%2.2%2.3%Gas (CNG and LNG)0.3%1.8%2.8%2.9%2.9%2.6%2.7%2.9%2.9%3.2%Gaseous biofuels0.0%0.1%0.2%0.2%0.2%0.6%0.6%0.2%0.2%0.2%Liquid biofuels3.6%6.0%6.2%6.2%6.2%7.2%6.0%6.1%6.2%6.1%Hydrogen0.0%0.1%0.2%0.3%0.4%0.3%0.3%0.5%0.3%0.3%Electricity1.2%2.4%3.4%3.7%4.5%3.7%3.7%4.0%3.7%3.8%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0% 
 
 
Gaseous  biofuels  (i.e.  biomethane  used  in  road  freight,  shipping)  show  somewhat  higher  share  in 
energy  demand  by  2030  (about  0.2%)  in  all  decarbonisation  pathways/scenarios,  except  for  BIO-A 
and BIO-B scenarios where they achieve a 0.6% share due to strong support for their uptake. Gaseous 
biofuels start from a very low base in the Reference scenario.  

In terms of share in liquid and gaseous transport fuels, liquid and gaseous biofuels combined represent 
about  6.2%  in  REF2016  and  6.6%  in  EUCO27  and  EUCO30  scenarios.  However,  the  absolute 
amounts remain stable at around 21 Mtoe, the increased share in the EUCO scenarios reflecting the 
energy  efficiency  developments  in  transport.  In  the  BIO-A  scenario  liquid  and  gaseous  biofuels 
provide around 8% (25 Mtoe) of total liquid and gaseous transport fuels in 2030, while in BIO-B they 
remain  close  to  their  level  in  the  EUCO  scenarios  at  21  Mtoe  (6.9%  of  total  liquid  and  gaseous 
transport fuels). Other decarbonisation scenarios/pathways show similar shares as EUCO30 also when 
expressed in terms of total liquid and gaseous transport fuels. 

In  the  long  term,  to  meet  the  very  ambitious  decarbonisation  objectives  by  2050,  electricity  and 
advanced renewable fuels (mostly advanced biofuels) gain significant market shares while the use of 
natural gas and liquefied petroleum gas goes down; hydrogen also grows significantly beyond post-
2030 albeit maintaining a limited share (see Figure 52, in Annex IV). The share of biofuels in liquid 
and gaseous transport fuels reaches around 46% in all scenarios by 2050  (36-37% of total transport 
energy  demand)  -  reflecting  the  crucial  role  of  biofuels  in  transport  decarbonisation  –  especially  in 
modes that cannot be electrified. 

Impact on the power generation system 

The  share  of  electricity  in  road  transport  energy  demand  increases  in  all  decarbonisation  pathways/ 
scenarios,  to  2-3%  by  2030  and  18-19%  by  2050  (see  Figure  8).  Overall,  developments  in  electro-
mobility and further electrification of rail transport result in additional electricity demand of 3-6 Mtoe 
in 2030 and 29-30 Mtoe in 2050 relative to REF2016.  

The  additional  electricity  demand  from  transport  in  the  decarbonisation  pathways/scenarios  is 
counterbalanced by a reduction of demand in sectors where energy efficiency has untapped potential 
(e.g.  electricity  consumption  of  appliances).145  In  EUCO27  and  EUCO30  scenarios,  for  which  the 
entire  energy  system  has  been  modelled,  the  total  electricity  demand  is  decreasing  in  2030 
perspective,  compared  to  REF2016.  Consequently,  the  possible  negative  impacts  from  a  strong 
increase of electricity demand do not manifest themselves. For example, in EUCO30, where higher 
energy  efficiency  improvements  take  place  in  other  demand  sectors  and  policies  affect  the  power 
generation  sector  (i.e.  renewables  policies  and  the  EU  ETS),  electricity  price  would  be  roughly  the 
same as in the Reference scenario by 2030, despite somewhat higher electricity demand in transport.  

Smart  charging  of  car  batteries  helps  smoothing  the  load  curve  which  in  turn  lowers  prices  of 
electricity. A study by Eurelectric confirms that the current power generation system could cope with 
the  resulting  increase  in  electricity  demand  of  large-scale  electrification  of  transport  provided  that 
smart charging systems are widely applied. On the other hand, uncoordinated recharging concentrated 

145  A  model  with  hourly  simulation  of  electricity  dispatching  and  consumption  would  be  better  suited  for  analysing  the 
impact of increasing electricity demand from electric vehicles, which tends to be concentrated in certain periods of the 
day and in certain areas. 

50 

 
 
                                                            
in  evening  hours  and  in  certain  residential  areas  could  cause  considerable  demand  hikes,  cost 
problems and even a strain for the power system.146 

Figure 8: Share of electricity in road transport energy demand (in %) and total electricity demand in transport (in 
Mtoe) 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

In  order  to  accommodate  high  penetration  of  electric  vehicles,  the  power  sector  needs  to  undergo 
considerable transformation and look into new business models.147 Transport electrification is the first 
challenge  but  transformation  toward  smart  systems  will  also  be  required  to  accommodate  more 
broadly conceived demand side response.  

4.3.2 Energy security 

By 2030, total oil products used in transport148 are projected to decrease by 26 to 41 Mtoe in 2030 (7-
11%)  relative  to  REF2016,  thanks  to  policies  supporting  the  energy  efficiency  improvements,  the 
uptake of alternative fuels and the efficiency of the transport system. This is equivalent to a reduction 
of 51 to 67 Mtoe (13-17%) compared to 2010 levels (see Table 4). 

EUCO27  and  EUCO30  show  about  26  to  31  Mtoe  decrease  in  the  use  of  oil  products  relative  to 
REF2016 (51 to 56 Mtoe of 2010 levels), while the highest reduction would be achieved in the VEH, 
MOBI-TAX and BIO-A scenarios by 2030 (see Figure 9). In VEH and MOBI-TAX energy savings 
and electro-mobility play a significant role in reducing the oil dependency in transport; in BIO-A the 
uptake of advanced renewable fuels is also an important contributing factor.   

Oil  dependency149  in  the  decarbonisation  pathways/scenarios  is  expected  to  decrease  by  3-4 
percentage points relative to REF2016 or 8-9 percentage points compared to 2010 levels. However, 

146  Eurelectric (2015), Smart charging: steering the charge, driving the change, available at: 

http://www.eurelectric.org/media/169888/20032015_paper_on_smart_charging_of_electric_vehicles_finalpsf-2015-
2301-0001-01-e.pdf. 

147  The electricity market design initiative aims at enabling and rewarding consumers to manage their consumption (demand 
response)  and  hence  –  among  others  -  allow  for  smart  charging.  This  requires  access  to  relevant  technologies  (smart 
meters) as well as competitive retail markets. 

148  Including maritime bunker fuels. 
149  Oil dependency in transport, as defined in the analysis, also covers bunker fuels. 

51 

0%5%10%15%20%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXShare of electricity in road transport (%)2050203001020304050REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXTotal electricity demand in transport (Mtoe)20502030 
 
 
                                                            
transport sector will remain heavily dependent on oil by 2030: oil products would still represent 86-
87% of the EU transport sector needs (see Table 4) – compared to 94% today – despite the significant 
reductions  achieved  in  absolute  levels.  This  shows  that  the  uptake  of  alternative  fuels  and  energy 
carriers takes time, in particular due to the gradual replacement of the vehicle stock. Nevertheless, to 
certain  extent  this  also  shows  the  limits  of  this  indicator  in  reflecting  properly  the  energy  savings 
achieved thanks to energy efficiency improvements.  

Table 4: Oil products used in transport 

Oil products used in transport 

Total oil products (incl. bunker fuels) 

REF2016 * 

EUCO27  

EUCO30  

2030 

2050 

2030 

2050 

2030 

2050 

- difference to REF2016 (in Mtoe) 

365 

368 

- % change to REF2016 

- difference to 2010 (in Mtoe) 

- % change to 2010 

Oil dependency in transport 

- p.p. difference to REF2016 

90% 

86% 

-26 

-7% 

-51 

-13% 

-3 

-8 

-196 

-53% 

-218 

-56% 

-36 

-45 

-31 

-8% 

-56 

-14% 

-3 

-8 

-196 

-53% 

-218 

-56% 

-36 

-45 

- p.p. difference to 2010 

Oil products used in transport 

Total oil products (incl. bunker fuels) 

- difference to REF2016 (in Mtoe) 

- % change to REF2016 

- difference to 2010 (in Mtoe) 

- % change to 2010 

Oil dependency in transport  

- p.p. difference to REF2016 

- p.p. difference to 2010 

Oil products used in transport 

Total oil products (incl. bunker fuels) 

- difference to REF2016 (in Mtoe) 

- % change to REF2016 

- difference to 2010 (in Mtoe) 

- % change to 2010 

Oil dependency in transport  

- p.p. difference to REF2016 

- p.p. difference to 2010 

VEH 

BIO-A 

BIO-B 

2030 

2050 

2030 

2050 

2030 

2050 

-41 

-11% 

-67 

-17% 

-4 

-9 

-197 

-54% 

-219 

-56% 

-36 

-45 

-35 

-10% 

-61 

-16% 

-4 

-9 

-195 

-53% 

-217 

-56% 

-35 

-44 

-32 

-9% 

-58 

-15% 

-3 

-8 

-194 

-53% 

-216 

-55% 

-35 

-44 

TECH 

MOBI 

MOBI-TAX 

2030 

2050 

2030 

2050 

2030 

2050 

-34 

-9% 

-59 

-15% 

-3 

-8 

-200 

-54% 

-222 

-57% 

-37 

-46 

-33 

-9% 

-58 

-15% 

-3 

-8 

-196 

-53% 

-218 

-56% 

-36 

-45 

-36 

-10% 

-61 

-16% 

-3 

-8 

-198 

-54% 

-220 

-56% 

-36 

-45 

Source:  PRIMES-TREMOVE  transport  model  (ICCS-E3MLab).  Note:  *  For  REF2016  the  total  oil  products  (including  bunker  fuels)  in 
Mtoe and the oil dependency in transport are reported for 2030 and 2050. In 2010, around 390 Mtoe oil products were used in transport 
(including bunker fuels) which represented about 95% of transport sector energy needs. 

In  the  long  term,  significant  reductions  in  oil  products  used  in  transport  (194  to  200  Mtoe  in  2050 
relative to REF2016) and oil dependency are projected in all decarbonisation pathways/scenarios. By 
2050, oil products would represent about 49-51% of the EU transport sector needs. 

Decrease of oil use in transport is of key importance for the reduction of the fossil fuel import bill and 
reinforcing security of supply. 

52 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Figure 9: Oil products used in transport (difference to REF2016, in Mtoe) and oil dependency (in %)  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

4.3.3 Decarbonisation 

The  contribution  of  pathways/scenarios  to  achieving  low-emission  mobility  is  assessed  in  terms  of 
tank to wheel CO2 emissions. Additionally, the impacts on well to wheel CO2 emissions are provided. 
The role of transport activity, energy intensity and CO2 intensity in the tank to wheel CO2 emissions 
reductions is shown through a decomposition analysis.  

CO2 emissions (tank to wheel) 

As explained in section 4.2.1, the central scenarios (EUCO27 and EUCO30) have been developed to 
reach all the 2030 targets agreed by the October 2014 European Council, while also achieving 2020 
GHG  and  renewables  targets.  These  scenarios  show  cost-effective  emissions  reductions  of:  18-19% 
for transport, 38-43% for residential and tertiary (mainly buildings), 35-37% for industry and 29-35% 
for  non-CO2  sectors  (mainly  agriculture  and  waste)  by  2030  relative  to  2005.150  For  transport,  this 
outcome  is  in  line  with  the  2011  White  Paper  which  established  a  milestone  of  20%  emissions 
reduction by 2030 relative to 2008 levels, equivalent to 19% emissions reduction on 2005 levels, and 
with the 2050 decarbonisation objectives. 

In EUCO27 and EUCO30 the highest emissions reductions are projected in passenger road transport 
(about  10-12%  in  2030  and  74%  in  2050  compared  to  the  Reference  scenario),  driven  by  more 
stringent CO2 standards for light duty vehicles (see Table 5). This is equivalent to emissions cuts of 
about  30-32%  by  2030  (around  81%  by  2050)  relative  to  2005  (see  Table  25,  in  Annex  IV).  CO2 
emissions from road freight are also expected to go down (about 3-4% in 2030 relative to REF2016; 
3-4% for 2005-2030), thanks to measures improving fuel efficiency of new conventional and hybrid 
heavy  goods  vehicles,  higher  uptake  of  LNG,  plus  road  pricing  and  modulation  of  infrastructure 
charges according to CO2 emissions that lead to faster renewal of the fleet. Extensive hybridisation of 
the vehicle fleet and uptake of advanced renewable fuels, complemented by deployment of C-ITS and 

150  The year 2005 has been used for providing the impacts on emissions reductions because this is the base year for setting 

the overall target for the non-ETS sectors.  

53 

-200-150-100-500EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXOil products including bunker fuels (difference to REF2016 in Mtoe)20502030-40.00-30.00-20.00-10.000.00EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXOil dependency (p.p. change to REF2016)20502030 
 
 
 
                                                            
eco-driving, result in 51-52% emissions cuts in road freight by 2050 relative to 2005, despite growing 
transport activity (47-48% for 2005-2050). 

Table 5: CO2 emissions reduction by mode relative to the EU Reference scenario 2016 in 2030 and 2050 (in %) 

CO2 emissions (% change to REF2016) 

REF2016 * 

EUCO27  

EUCO30  

2030 

2050 

2030 

2050 

2030 

2050 

Transport - total 

Passenger transport  

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

943 

682 

504 

1 

173 

4 

261 

242 

6 

13 

953 

679 

481 

1 

193 

4 

274 

257 

3 

14 

-6.3% 

-62.6% 

-7.8% 

-62.6% 

-7.5% 

-66.5% 

-9.3% 

-66.4% 

-9.8% 

-73.6% 

-12.4% 

-73.9% 

3.5% 

-42.8% 

3.4% 

-42.9% 

-1.0% 

-49.5% 

-0.5% 

-48.3% 

3.0% 

-38.3% 

2.8% 

-38.4% 

-3.0% 

-52.9% 

-3.8% 

-53.5% 

-3.4% 

-53.7% 

-4.3% 

-54.4% 

0.5% 

2.9% 

-43.1% 

-38.8% 

0.5% 

2.9% 

-43.1% 

-38.8% 

CO2 emissions (% change to REF2016) 

VEH 

BIO-A 

BIO-B 

2030 

2050 

2030 

2050 

2030 

2050 

Transport - total 

-11.2% 

-63.0% 

-9.5% 

-62.4% 

-8.5% 

-62.3% 

Passenger transport  

-13.3% 

-66.3% 

-10.8% 

-65.8% 

-10.0% 

-65.7% 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

CO2 emissions (% change to REF2016) 

-17.9% 

-73.8% 

-13.1% 

-73.4% 

-12.0% 

-73.3% 

3.4% 

-42.9% 

2.3% 

-41.9% 

4.4% 

-41.7% 

-0.5% 

-48.3% 

-4.3% 

-47.5% 

-4.5% 

-47.4% 

3.0% 

-38.4% 

1.9% 

-36.9% 

3.4% 

-36.7% 

-5.9% 

-54.8% 

-6.1% 

-53.9% 

-4.8% 

-53.8% 

-6.5% 

-55.8% 

-6.7% 

-55.0% 

-5.4% 

-54.8% 

0.4% 

2.8% 

-43.1% 

-0.4% 

-42.6% 

-38.8% 

2.1% 

-37.5% 

1.1% 

3.8% 

-42.4% 

-37.4% 

TECH 

MOBI 

MOBI-TAX 

2030 

2050 

2030 

2050 

2030 

2050 

Transport - total 

-8.8% 

-63.8% 

-8.5% 

-62.7% 

-9.3% 

-63.0% 

Passenger transport  

-10.6% 

-67.8% 

-9.8% 

-66.4% 

-10.3% 

-66.5% 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

-14.2% 

-75.9% 

-13.0% 

-73.9% 

-13.6% 

-74.1% 

3.3% 

-43.0% 

4.0% 

-42.6% 

3.8% 

-43.4% 

-0.5% 

-48.2% 

-0.8% 

-48.4% 

-1.0% 

-48.4% 

2.8% 

-38.6% 

3.6% 

-38.2% 

1.7% 

-38.7% 

-4.0% 

-53.9% 

-5.3% 

-53.6% 

-6.7% 

-54.2% 

-4.5% 

-54.8% 

-5.9% 

-54.5% 

-7.4% 

-55.1% 

0.5% 

2.9% 

-43.1% 

-38.9% 

1.1% 

4.3% 

-42.9% 

-38.9% 

0.3% 

4.2% 

-44.4% 

-38.9% 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * CO2 emissions levels in REF2016 for 2030 and 2050 are reported in million tonnes.  

Air transport emissions would decrease by about 1% relative to REF2016 in 2030, thanks to higher 
ETS prices in EUCO27 (42 €/tCO2) and shifts towards rail in both EUCO27 and EUCO30, supported 

54 

 
 
by  specific  measures  (i.e.  4th  railway  package).151  However,  relative  to  2005,  emissions  are  still 
expected  to  go  up  (14-15%  by  2030)  due  to  high  growth  (79-80%)  in  total  air  traffic  (domestic, 
international  intra-EU  and  extra-EU).  By  2050,  emissions  are  projected  to  decrease  by  34-35% 
relative  to  2005  driven  by  strong  efficiency  improvements  and  the  uptake  of  advanced  renewable 
fuels  triggered  by  higher  ETS  prices.  Yet,  emissions  reductions  achieved  in  aviation  would  be  the 
lowest among the inland modes due to strong increase in activity. 

Rail  and  inland  navigation  show  some  low  rise  in  emissions  by  2030  compared  to  the  Reference 
scenario because adopted internal market reforms increase their competitiveness and shift traffic away 
from  road  (i.e.  transport  activity  of  rail  and  inland  navigation  increases  relative  to  REF2016). 
However, they are still expected to display the highest emissions reductions among modes over time 
(about 33% decrease for 2005-2030 for passenger rail, 18% for freight rail and 23% for freight inland 
navigation).  In  addition,  they  contribute  a  low  share  of  transport  emissions  (below  3%  of  total 
emissions  excluding  maritime  bunkers  in  2030).  Strong  emissions  reductions  in  these  modes  are 
expected  to take place by 2050 compared  to 2005 (80% for passenger rail, 76% for freight rail and 
50%  for  inland  navigation),  facilitated  by  further  electrification  of  rail  and  the  uptake  of  LNG  and 
advanced renewable fuels in inland navigation. 

The more ambitious pathways/scenarios are expected to deliver some 9-11% emissions reductions in 
2030 relative to REF2016 (see Table 5); this is equivalent to 20-22% cuts compared to 2005 level (see 
Table 6, and Table 25 in Annex IV). The highest reduction would be achieved in VEH (about 11% 
relative  to  REF2016),  driven  by  the  most  stringent  CO2  emissions  standards  for  light  duty  vehicles 
among scenarios and measures improving the fuel efficiency of new conventional and hybrid heavy 
goods vehicles, supported  by incentives for public procurement. The BIO-A  scenario shows around 
10% decrease relative to REF2016 (about 21% for 2005-2030) due to strong incentives for the uptake 
of advanced renewable fuels while no additional  support is provided to food-based biofuels.  BIO-B 
results  in  somewhat  lower  emissions  reductions  (about  9%  decrease  relative  to  REF2016;  20%  for 
2005-2030) because the overall share of biofuels is lower in this scenario relative to BIO-A (i.e. due 
to  the  complete  phase  out  of  food-based  biofuels  by  2030).  It  should  be  noted,  however,  that  the 
modelling assigns tank to wheel emissions of zero to all biofuels. Well to wheel CO2 emissions are 
discussed  in  a  following  section.  MOBI  and  MOBI-TAX  scenarios  also  show  higher  emissions 
reductions  (about  9%  relative  to  REF2016)  than  EUCO30,  thanks  to  full  internalisation  of  local 
externalities on the inter-urban network, more intensive policies promoting efficiency improvements 
in the transport system and multimodality (e.g. review of the Combined Transport Directive, review 
of  the  Rail  Freight  Corridors  Regulation,  review  of  market  access  rules  for  road  transport)  and 
alignment  of  the  EU  minimum  tax  rates  of  petrol  and  gas  oil  (in  MOBI-TAX).  TECH  scenario 
achieves rather similar emissions reductions to MOBI, mostly as an effect of faster electrification of 
light  duty  vehicles  fleet  supported  by  advanced  research  and  innovation  in  electro-mobility,  which 
lowers the costs of alternative powertrains. Emissions from passenger and freight road transport in the 
more  ambitious  pathways/scenarios  go  down  by  32-37%  and  4-7%  by  2030  relative  to  2005, 
respectively  (80-82%  emission  reductions  for  passenger  road  transport  and  52-53%  for  road  freight 
for 2005-2050).  

151  ETS prices are expressed in 2013 prices. The ETS price in REF2016 is projected at 34 €/tCO2 for 2030. In EUCO30 the 

ETS price is projected at 27 €/tCO2 for 2030. 

55 

 
 
  
                                                            
Table  6:  CO2  emissions  reduction  by  mode  for  2005-2030  and  2005-2050  relative  to  the  Reference  scenario 
2016 (percentage points difference in growth rates) 

CO2 emissions (p.p. difference to growth 
rates in REF2016) 

REF2016 * 

EUCO27  

EUCO30  

'05-'30 

'05-'50 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

Transport - total 

Passenger transport  

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

-12.3% 

-11.4% 

-15.7% 

-16.0% 

-22.7% 

-26.2% 

-35.0% 

-65.2% 

15.3% 

28.6% 

-14.7% 

-10.5% 

-1.9% 

0.2% 

2.9% 

6.3% 

-18.3% 

-57.8% 

-25.0% 

-18.8% 

-5.5 

-6.3 

-7.6 

2.2 

-1.1 

2.5 

-3.0 

-3.5 

0.4 

2.2 

-55.5 

-55.8 

-54.3 

-14.9 

-63.7 

-34.2 

-54.4 

-57.1 

-18.2 

-31.5 

-6.8 

-7.8 

-9.6 

2.2 

-0.6 

2.4 

-3.8 

-4.3 

0.4 

2.1 

-55.5 

-55.7 

-54.5 

-14.9 

-62.1 

-34.3 

-55.0 

-57.8 

-18.2 

-31.6 

CO2 emissions (p.p. difference to growth 
rates in REF2016) 

VEH 

BIO-A 

BIO-B 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

Transport - total 

Passenger transport  

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

-9.9 

-11.2 

-13.8 

2.2 

-0.6 

2.6 

-5.7 

-6.5 

0.3 

2.1 

-55.9 

-55.7 

-54.5 

-14.9 

-62.1 

-34.3 

-56.4 

-59.3 

-18.2 

-31.5 

-8.3 

-9.1 

-10.1 

1.5 

-5.0 

1.6 

-6.0 

-6.7 

-0.3 

1.6 

-55.3 

-55.2 

-54.2 

-14.6 

-61.1 

-33.0 

-55.5 

-58.4 

-18.0 

-30.5 

-7.5 

-8.4 

-9.3 

2.9 

-5.1 

2.9 

-4.7 

-5.4 

0.9 

2.9 

-55.2 

-55.1 

-54.1 

-14.5 

-60.9 

-32.8 

-55.3 

-58.3 

-17.9 

-30.3 

CO2 emissions (p.p. difference to growth 
rates in REF2016) 

TECH 

MOBI 

MOBI-TAX 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

Transport - total 

Passenger transport  

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

-7.7 

-8.9 

-11.0 

2.1 

-0.5 

2.4 

-4.0 

-4.5 

0.4 

2.1 

-56.5 

-56.9 

-56.0 

-15.0 

-61.9 

-34.5 

-55.4 

-58.2 

-18.2 

-31.6 

-7.5 

-8.3 

-10.0 

2.6 

-1.0 

3.1 

-5.2 

-5.9 

0.9 

3.2 

-55.6 

-55.8 

-54.6 

-14.8 

-62.2 

-34.2 

-55.1 

-57.9 

-18.1 

-31.6 

-8.2 

-8.7 

-10.5 

2.4 

-1.2 

1.5 

-6.5 

-7.4 

0.2 

3.2 

-55.8 

-55.9 

-54.7 

-15.1 

-62.2 

-34.6 

-55.7 

-58.6 

-18.7 

-31.6 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For REF2016 emissions growth rates for 2005-2030 and 2005-2050 are reported. 

56 

 
 
Decomposition analysis of CO2 emissions 

As  explained  in  section  3.3,  the  overall  trend  in  transport  emissions  is  determined  by  three  broad 
components: transport activity levels, the energy intensity of transport and the carbon intensity of the 
energy used. Following a decomposition analysis, it can be shown how much the projected transport 
emissions  are  expected  to  decrease  in  each  pathway/scenario  (in  percentage  terms  or  Mt  of  CO2) 
between 2005 and 2030 due to each component (see Figure 10 to Figure 13).152 

Overall, CO2 emissions from passenger transport decrease by 22-27% (178-217 Mt of CO2) between 
2005 and 2030 in the decarbonisation pathways/scenarios. The decrease in CO2 emissions is to a large 
extent  due  to  improvements  in  energy  intensity  (-38%  to  -41%,  equivalent  to  308-331  Mt  of  CO2), 
while carbon intensity (-7% to -9%, equivalent to 55-68 Mt of CO2) play a more limited role by 2030 
when  compared  to  REF2016  (see  Figure  10  and  Figure  11).  Transport  activity  works  in  opposite 
direction,  i.e.  towards  increasing  emissions,  but  its  impact  is  more  limited  in  size  in  all 
decarbonisation  pathways/scenarios  (+22%  to  +23%  for  2005-2030,  equivalent  to  176-186  Mt  of 
CO2) compared to the REF2016 (+25%, equivalent to 198 Mt of CO2). Decreases in energy intensity 
originate both from the uptake of more fuel efficient powertrains and improvements in the transport 
system  efficiency  brought  about  the  higher  operational  efficiency  of  transport  modes  and 
multimodality.  Among  scenarios,  VEH  and  TECH  show  the  highest  contribution  to  emissions 
reductions  coming  from  improvements  in  the  energy  intensity,  thanks  to  the  penetration  of  more 
efficient  powertrains  and  electrification  of  the  passenger  cars  fleet.  In  VEH  and  BIO-A,  the  higher 
electrification  of  the  passenger  car  fleet  and  the  strong  uptake  of  advanced  renewable  fuels, 
respectively, result in the largest contribution to emissions reductions from improvements in the CO2 
intensity  among  scenarios.  BIO-B  results  in  somewhat  lower  contribution  to  emissions  reductions 
from improvements in the CO2 intensity, despite the very strong uptake of advanced renewable fuels, 
due  to  the  lower  overall  share  of  biofuels  in  the  fuel  mix  compared  to  BIO-A  triggered  by  the 
complete  phase  out  of  food-based  biofuels  by  2030.153  In  MOBI  and  MOBI-TAX,  internalisation 
measures  and  intensive  policies  promoting  efficiency  improvements  in  the  transport  system  and 
multimodality  have  an  impact  on  emissions  reductions  both  through  lower  transport  activity  and 
energy intensity improvements relative to REF2016. 

Higher  reductions  in  CO2  emissions  from  freight  transport  are  achieved  in  all  decarbonisation 
pathways/scenarios relative to REF2016 (see Figure 12 and Figure 13). However, their contribution to 
the overall emissions reductions is more limited than that of passenger transport, both in relative terms 
and  in  levels  (about  5-8%  reduction  in  emissions  for  2005-2030,  equivalent  to  13-22  Mt  of  CO2). 
Improvements in energy intensity provide the highest contribution to emissions reductions (-22% to     
-24% for 2005-2030, equivalent to 58-65 Mt of CO2) while carbon intensity improvements are more 
limited  by  2030  (-9%  to  -11%  for  2005-2030,  equivalent  to  24-30  Mt  of  CO2).  Transport  activity 
works in opposite direction, i.e. towards increasing emissions, but its impact is more limited in size in 
all  decarbonisation  pathways/scenarios  (+23%  to  +26%  for  2005-2030,  equivalent  to  62-69  Mt  of 
CO2) compared to the Reference scenario (+27%, equivalent to 73 Mt of CO2).   

152  The proposed method is the Montgomery decomposition. For an application of the method see: De Boer, P.M.C. (2008) 
Additive Structural Decomposition Analysis and Index Number Theory: An Empirical Application of the Montgomery 
Decomposition, Economic Systems Research, 20(1), pp. 97-109. The decomposition analysis only takes into account the 
tank to wheel emissions. 

153  It should be noted, however, that the modelling assigns tank to wheel emissions of zero to all biofuels. Well to wheel 

CO2 emissions are discussed in one of the following sections. 

57 

 
 
                                                            
Figure 10: Decomposition of CO2 emissions for passenger transport for 2005-2030 (% change) 

Source: EC calculations based on PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  The  figures  report  the  changes  in  CO2  emissions  due  to  the  three  broad  components  (transport  activity  levels,  energy  intensity  of 
transport and carbon intensity of the energy used) in relative terms compared to 2005.  

Figure 11: Decomposition of CO2 emissions for passenger transport for 2005-2030 (in Mt of CO2) 

Source: EC calculations based on PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: The figures report the changes in CO2 emissions, in Mt of CO2, due to the three broad components (transport activity levels, energy 
intensity of transport and carbon intensity of the energy used) in relative terms compared to 2005.  

58 

REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXChange in emissions-15.7%-22.0%-23.5%-26.9%-24.7%-24.1%-24.6%-23.9%-24.4%Transport activity24.5%23.0%22.9%22.6%22.5%22.5%22.9%22.3%21.8%Energy intensity-34.7%-38.1%-39.1%-41.0%-39.0%-39.3%-39.6%-38.8%-38.7%CO2 intensity-5.4%-6.9%-7.3%-8.5%-8.3%-7.3%-7.9%-7.3%-7.4%-50.0%-40.0%-30.0%-20.0%-10.0%0.0%10.0%20.0%30.0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXChange in emissions-127-178-190-217-200-195-199-193-197Transport activity198186186182182182185180176Energy intensity-281-308-316-331-315-317-320-314-313CO2 intensity-44-55-59-68-67-59-64-59-60-400-300-200-1000100200300Mt of CO2 
 
 
 
Figure 12: Decomposition of CO2 emissions for freight transport for 2005-2030 (% change) 

Source: EC calculations based on PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  The  figures  report  the  changes  in  CO2  emissions  due  to  the  three  broad  components  (transport  activity  levels,  energy  intensity  of 
transport and carbon intensity of the energy used) in relative terms compared to 2005.  

Figure 13: Decomposition of CO2 emissions for freight transport for 2005-2030 (in Mt of CO2) 

Source: EC calculations based on PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: The figures report the changes in CO2 emissions, in Mt of CO2, due to the three broad components (transport activity levels, energy 
intensity of transport and carbon intensity of the energy used) in relative terms compared to 2005.  

59 

REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXChange in emissions-1.9%-4.9%-5.7%-7.6%-7.9%-6.6%-5.9%-7.1%-8.4%Transport activity27.3%26.0%26.0%25.8%25.4%25.5%26.0%24.2%23.2%Energy intensity-20.9%-21.8%-22.5%-24.2%-22.3%-22.4%-22.6%-22.1%-22.3%CO2 intensity-8.4%-9.1%-9.2%-9.3%-11.1%-9.7%-9.2%-9.1%-9.3%-30.0%-20.0%-10.0%0.0%10.0%20.0%30.0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXChange in emissions-5-13-15-20-21-18-16-19-22Transport activity736969696868696462Energy intensity-56-58-60-65-59-60-60-59-59CO2 intensity-22-24-24-25-30-26-25-24-25-80-60-40-20020406080Mt of CO2 
 
 
 
 
VEH, BIO-A, MOBI and MOBI-TAX scenarios result in rather similar emissions reductions by 2030 
but  the  drivers  are  different.  While  VEH  scenario  achieves  the  highest  contribution  to  emissions 
reduction  through  improvements  in  energy  intensity,  in  BIO-A  the  strong  uptake  of  advanced 
renewable fuels has a larger impact on CO2 intensity, and in MOBI and MOBI-TAX internalisation 
measures,  efficiency improvements in  the transport system and higher taxation  of diesel (in  MOBI-
TAX) have a dampening role on the transport activity. Nevertheless, energy intensity improvements 
also  contribute  additional  emissions  reductions  in  BIO-A,  MOBI  and  MOBI-TAX  (-22%  for  2005-
2030, equivalent to 59 Mt of CO2) relative to REF2016 (-21%, equivalent to 56 Mt of CO2). Similar 
to passenger transport, BIO-B results in somewhat lower contribution to emissions reductions, despite 
the very strong uptake of advanced renewable fuels, due to the lower overall share of biofuels in the 
fuel mix compared to BIO-A.154  

Overall, efficiency gains play a decisive role in further reducing emissions in road transport relative to 
REF2016. As expected, the highest reduction in emissions due to improvements in energy intensity is 
achieved  in  VEH  for  both  passenger  and  road  transport.  However,  the  differences  to  the  energy 
intensity contribution to emissions cuts in MOBI and MOBI-TAX is not very large. This is because 
measures  intelligently  managing  transport  demand  and  improving  the  efficiency  of  the  system  also 
result  in  energy  intensity  improvements.  The  use  of  less  CO2  intensive  fuels  contributes  to  further 
reduction of emissions for road and rail passenger transport relative to REF2016 and only in the BIO-
A and BIO-B scenarios to emissions reduction in aviation by 2030. The detailed results by transport 
mode are provided in Annex IV (see Table 27-Table 28). 

Well to wheel CO2 emissions 

Only  EU  emissions  for  the  domestic  production  are  covered  by  the  quantified  well  to  wheel 
emissions. Worldwide upstream emissions related to the sourcing of fossil fuels are not reflected in 
this modelling exercise. For biofuels, well to wheel CO2 emission factors reflect the energy use in the 
production process. Indirect land-use change (ILUC) emissions are not quantified. 

On  well  to  wheel  basis,  CO2  emissions  go  down  by  17-20%  during  2005-2030  (63-64%  for  2005-
2050)  as  the  power  generation  sector  continues  its  gradual  decarbonisation  pathway  by  2050  (see 
Figure 14). Higher emissions reductions are achieved in road transport (21-25% by 2030 and 68-70% 
by 2050). The well to wheel emissions go down slightly less than tank to wheel emissions, which is 
attributed to a lower reduction rate of the carbon footprint of upstream technologies producing fuels 
for  transport  (e.g.  biofuels,  electricity,  hydrogen,  oil  products).  The  power  generation  mix  plays  an 
important  role  here  as  the  large  scale  electrification  of  transport  needs  to  be  accompanied  by  the 
decarbonisation of power generation. VEH scenario shows the highest reduction in the well to wheel 
emissions both in road transport and overall transport sector (about 25% and 20% respectively), but 
already  21-22%  reductions  in  road  transport  emissions  (17-18%  in  total  transport  emissions)  are 
achieved in EUCO27 and EUCO30.  

As explained, ILUC emissions are not quantified. Taking into account the effects of indirect land-use 
change over the life-cycle of biofuels may show that worldwide CO2 emissions are, in fact, lower if a 
higher share of advanced biofuels is used. 

154  It should be noted, however, that the modelling assigns tank to wheel emissions of zero to all biofuels. Well to wheel 

CO2 emissions are discussed in one of the following sections. 

60 

 
 
                                                            
Figure 14: Evolution of well to wheel CO2 emissions for 2005-2030 and 2005-2050 (in %) 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

4.3.4 Other environmental impacts 

Transport related activities have significant impacts on air pollution and noise levels. The co-benefits 
of  decarbonisation  pathways/scenarios  on  the  environment  are  illustrated  below  in  terms  of  air 
pollution and external costs of air and noise pollution. 

Impact on air pollution 

NOx  emissions  would  drop  in  the  decarbonisation  pathways/scenarios  by  similar  percentages:  57-
58% by 2030 (76% by 2050) relative to 2010, although through different channels. While in VEH the 
58% reduction in NOx is mainly driven by the higher substitution of internal combustion engines for 
electric  vehicles,  in  MOBI-TAX  the  higher  taxation  of  diesel  than  current  levels  and  policies 
intelligently managing transport demand, supported by cross-cutting initiatives in the urban area that 
aim  to  curb  pollutant  emissions,  have  similar  impact  on  NOx  emissions;  this  is  despite  lower  CO2 
emissions  cuts  achieved  in  MOBI-TAX  relative  to  VEH  scenario  (see  Figure  15).  Regarding  cross-
cutting  initiatives  in  the  urban  area,  the  intensity  of  measures  is  assumed  to  be  low  in  the 
decarbonisation  pathways/scenarios  due  to  the  limited  EU  competences  in  this  field.  However, 
Member States could consider ambitious reforms that lead to higher reductions in NOx emissions.    

The higher use of LNG in lorries and shipping in all decarbonisation pathways/scenarios relative to 
REF2016  also  contribute  to  lower  NOx  emissions.  This  is  due  to  the  internalisation  of  local 
externalities that push for the use of less polluting fuels and to the NAIADES II package for inland 
navigation, supported by the availability of refuelling infrastructure, present in all pathways/scenarios. 
Measures  promoting  urban  policies  that  curb  pollutant  emissions  and  the  higher  diesel  taxation 
provide an additional incentive for the uptake of LNG in MOBI and MOBI-TAX scenarios. 

61 

-70%-60%-50%-40%-30%-20%-10%0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXWell to Wheel CO2 emissions -total (growth rates)2005-20302005-2050-70%-60%-50%-40%-30%-20%-10%0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXWell to Wheel CO2 emissions -road (growth rates)2005-20302005-2050 
 
 
Figure 15: Evolution of NOx and PM2.5 emissions for 2010-2030 and 2010-2050 (growth rates, in %) 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

The decline in particulate matter (PM2.5) would be less pronounced by 2030 at 53-56% but PM2.5 
emissions would go down by around 81-82% by 2050 (see Figure 15). Highest emissions reductions 
are  achieved  in VEH  scenario  by 2030 (about 56%), due to the  higher electrification of the vehicle 
fleet,  while  BIO-A,  BIO-B,  TECH,  MOBI  and  MOBI-TAX  show  somewhat  more  limited  impact 
(around  53-54%  decrease  by  2030).  EUCO27  and  EUCO30  scenarios  are  projected  to  achieve 
significant impacts by 2030 in terms of both NOx emissions (57% reduction) and PM2.5 emissions 
(53% decrease).  

External costs of air and noise pollution 

Overall,  external  costs  related  to  air  pollutants  would  by  2030  decrease  in  the  decarbonisation 
pathways/scenarios  by  about  57-59%  compared  to  2010  due  to  reduced  fuel  consumption  and 
increased  use  of  alternative  fuels  and  energy  carriers  in  transport.  The  Reference  scenario  achieves 
already significant reduction (about 56%). However, they would still represent an important cost for 
the  society  (roughly  €25-27  billion).155  By  2030,  highest  reductions  in  air  pollutants  costs  are 
projected  in  the  MOBI-TAX  and  VEH  scenarios  (see  Figure  16).  Similar  reductions  would  be 
achieved in all decarbonisation pathways/scenarios (around 79%) by 2050. Reductions in air pollution 
are driven by policy measures limiting fossil fuels consumption but there are also second-order effects 
from  the  decrease  in  the  transport  activity  relative  to  REF2016,  due  to  higher  costs  of  transport 
equipment  (in  VEH),  fuels  (in  BIO-A  and  BIO-B)  and  measures  managing  transport  demand  (in 
MOBI and MOBI-TAX). 

As  highlighted  in  section  3.3,  the  increase  in  traffic  would  lead  to  further  increase  of  noise  related 
external  costs  by  2030  and  2050  in  the  Reference  scenario  (18%  and  25%  respectively).  Transport 
measures  for  decarbonising  the  sector  are  expected  to  result  in  5-11  percentage  points  decrease  in 
2030  (around  45  percentage  points  decrease  in  2050)  in  noise-related  external  costs  relative  to 
REF2016. This is mainly thanks to the gradual substitution of internal combustion engines for electric 

155  External costs are expressed in 2013 prices. They cover NOx, PM2.5 and SOx emissions. 

62 

-80%-60%-40%-20%0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXNOx emissions (growth rates, in %)2010-20502010-2030-100%-80%-60%-40%-20%0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXPM2.5 emissions (growth rates, in %)2010-20502010-2030 
 
 
                                                            
vehicles in the VEH and TECH scenarios and due to a more limited increase in traffic in the MOBI 
and  MOBI-TAX  scenarios  relative  to  REF2016.  However,  external  costs  of  noise  would  still  be  7-
13% higher by 2030 relative to 2010 and would only significantly decline in the long term (about 20% 
reduction for 2010-2050).  

Figure 16: External costs of air pollution and noise for 2010-2030 and 2010-2050 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

4.3.5 Research, innovation and competitiveness  

All decarbonisation pathways/scenarios support the penetration of new technologies related to internal 
combustion engines (ICE) and alternative powertrains through specific incentives, leading to further 
technology  learning  as  technologies  are  deployed.  The  intensity  of  incentives  is  however  different 
between pathways/scenarios. 

Car manufacturers are assumed to comply with more stringent CO2 standards for light duty vehicles 
(LDVs)  post-2020  in  all  decarbonisation  pathways/scenarios,  by  marketing  vehicles  equipped  with 
hybrid  systems  (that  complement  ICE)  and  electrically  chargeable  systems  (i.e.  battery  electric, 
plug-in  hybrid  and  fuel  cell  vehicles),  which  are  becoming  more  appealing  to  consumers  thanks  to 
lower  costs.  The  CO2  standards  improve  the  predictability  by  the  market  actors  and  provide  legal 
certainty about  the technologies that comply with the policy objectives. This legal certainty enables 
strong  effort  by  the  manufacturers  to  improve  the  cost  performance  of  advanced  powertrains.  In 
addition,  the availability of  recharging/refuelling  infrastructure,  facilitated  by  the  implementation  of 
the Directive 2014/94/EU, provides certainty to consumers towards new technologies.  

As explained in sections 4.2.1 and 4.2.2, the least stringent CO2 standards for LDVs are assumed in 
EUCO27  and  the  most  stringent  ones  in  VEH  scenario  by  2030,  with  other  decarbonisation 
pathways/scenarios having identical standards to EUCO30 and falling within this range. In addition, 
promotion  of  public  procurement  provides  additional  incentives  for  purchasing  cleaner  vehicles  in 
VEH  scenario.  By  2030,  electrically  chargeable  vehicles  would  represent  18%  of  the  LDV  vehicle 
stock in VEH scenario (i.e. about 17% battery electric and plug-in hybrid and 1% fuel cell vehicles), 
while  EUCO27  and  EUCO30  scenarios  would  be  leading  to  shares  in  the  range  of  11-13%  (i.e. 
around 10-12% battery electric and plug-in hybrid and 1% fuel cell vehicles).  

63 

-100%-80%-60%-40%-20%0%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXExternal costs -air pollution (growth rates)2010-20502010-2030-30%-20%-10%0%10%20%30%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXExternal costs of noise (growth rates)2010-20502010-2030 
 
 
In the TECH scenario, more intensive R&D investments along stringent CO2 standards (as stringent 
as  in  EUCO30)  result  in  lower  prices  of  alternative  powertrains  and  consequently  stronger  market 
uptake (i.e. 15% share of electrically chargeable vehicles in the LDV vehicle stock) by 2030. Hybrid 
(petrol and diesel) non-rechargeable vehicles would provide a considerable share of the vehicle stock 
in all scenarios (around 21%).  

Figure 17: Light duty vehicles by type of powertrain in 2030 and 2050 (in %)  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  The  category  “Hybrid”  covers  both  diesel  and  gasoline  hybrids;  similarly,  plug-in  hybrids  cover  both  diesel  and  gasoline  plug-in 
hybrids. 

By 2050, electrically chargeable vehicles are expected to represent about 68-72% of the LDV vehicle 
stock (i.e. around 63-64% battery electric and plug-in hybrid and 5-8% fuel cell vehicles). Their much 
higher share relative to 2030 can be explained by more stringent CO2 standards for light duty vehicles 
assumed  over  time  in  all  decarbonisation  pathways/scenarios,  declining  technology  costs  and  the 
gradual renewal of the vehicle stock. 

The share of ICE diesel vehicles goes down by 2-8 percentage points relative to REF2016 in 2030 and 
that of ICE gasoline vehicles by up to 5-6 percentage points, while the share of ICE gaseous vehicles 
(i.e.  LPG  and  CNG)  remains  relatively  stable  compared  to  REF2016  levels.  The  most  significant 
decreases in the shares of ICE diesel vehicles are driven by the uptake of alternative powertrains in 
the VEH scenario and by cross-cutting incentives that curb pollutant emissions in the urban area in the 
MOBI and MOBI-TAX scenarios (see Figure 17). By 2050, ICE diesel, gasoline and gaseous vehicles 
loose significant market shares in all decarbonisation pathways/scenarios. 

Transport activity of ICE diesel and gasoline cars in urban transport activity156 is projected to go down 
significantly, from about 76% in 2005 to 33-40% by 2030 and around 6-7% by 2050, in line with the 
2011 White Paper goal of halving the use of ‘conventionally-fuelled’ cars in urban transport by 2030 
and phase them out in cities by 2050. 

Advanced  renewable  fuels  as  a  share  of  liquid  and  gaseous  transport  fuels  would  provide  around 
1.9% in REF2016 and all other decarbonisation pathways/scenarios in 2030 except for the BIO-A and 

156  Urban transport activity is defined here in terms of passenger-kilometres and covers the activity of light duty vehicles, 

public road transport (i.e. buses), light rail and metro/tram. 

64 

0%10%20%30%40%50%60%70%80%90%100%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXLDVs by type of powertrain (% of total stock in 2030)ICE gasolineICE dieselICE gaseousHybridPlug-in hybridPure electricFuel cell0%10%20%30%40%50%60%70%80%90%100%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXLDVs by type of powertrain (% of total stock in 2050)ICE gasolineICE dieselICE gaseousHybridPlug-in hybridPure electricFuel cell 
 
 
 
                                                            
BIO-B scenarios, where by design, they would achieve about 4% and 6.9% share respectively due to 
dedicated support measures.157 In absolute terms, advanced renewable fuels would provide around 12 
Mtoe  in  BIO-A  scenario,  21  Mtoe  in  BIO-B  scenario  and  6  Mtoe  in  all  other  scenarios/pathways. 
Their share in liquid and gaseous fuels would increase significantly by 2050 when they are projected 
to  represent  about  45-46%  in  the  BIO-A  and  BIO-B  scenarios,  and  39-40%  in  all  other 
decarbonisation pathways/scenarios. By comparison, the Reference scenario, which does not achieve 
the long-term decarbonisation objectives, shows only around a 2% share for advanced renewable fuels 
by 2050. 

Seen  from  a  different  angle,  the  share  of  advanced  renewable  biofuels  in  total  consumption  of 
biofuels  moderately  increases  by  2030  to  around  30%  in  all  pathways/scenarios,  except  for  BIO-A 
and  BIO-B  scenarios.  In  BIO-A,  the  strong  support  for  their  uptake  results  in  about  half  of  total 
consumption  of biofuels being  provided  by advanced renewable  fuels. In BIO-B all  consumption  is 
from  advanced  renewable  fuels.  In  all  pathways/scenarios,  advanced  renewable  fuels  penetrate  the 
transport fuels market in significant quantities after 2030. By 2050, advanced renewable fuels would 
represent over 85% of total consumption of biofuels in all decarbonisation pathways/scenarios, except 
for the BIO-A scenario where their share would go up to 99% and BIO-B where they represent 100%.  

By  design,  through  the  implementation  of  specific  incentives,  both  BIO-A  and  BIO-B  scenarios 
achieve 0.6% share of biomethane (about 1.8-1.9 Mtoe) and 0.7% share of biokerosene (around 2.1 
Mtoe)  in  all  liquid  and  gaseous  transport  fuels  by  2030.  It  is  clear  that  without  such  a  design,  the 
overall demand of advanced renewable fuels would be fulfilled by fuels with lower cost (i.e.  lingo-
cellulosic ethanol and fungible biodiesel). 

Figure 18: Liquid and gaseous biofuels in 2030 and 2050 (in % of total liquid fuels and in Mtoe) 

Source: PRIMES-TREMOVE and PRIMES Biomass supply model (ICCS-E3MLab) 
Note: 'Advanced renewable fuels' is used to cover fuels produced from feedstocks listed in Annex IX Part A and Annex IX Part B of the 
ILUC Directive. 

157  For  modelling  purposes,  specific  incentives  were  included  for  ‘advanced’  biofuels  and  renewable  liquid  and  gaseous 
transport fuels of non-biological origin made from feedstocks listed in Annex IX Part A of the ILUC Directive and for 
biofuels  made  from  waste  oils  and  fats  produced  from  feedstocks  listed  in  Annex  IX  Part  B  of  the  ILUC  Directive 
(Directive 2015/1513/EU). For the presentation of the modelling results the term 'advanced renewable fuels' is used to 
cover fuels produced from feedstocks listed in Annex IX Part A and Annex IX Part B of the ILUC Directive. 

65 

 
 
 
                                                            
The  additional  demand  of  advanced  renewable  fuels  in  the  BIO-A  and  BIO-B  scenarios  is  mainly 
covered by domestic production. The need to meet the additional demand for Annex IX (of the ILUC 
Directive)  sourced  feedstock  implies  higher  investments  in  bio-refineries  producing  these  types  of 
biofuels  and  thus  an  increase  in  the  investment  expenditures  as  additional  capacities  have  to  be 
established in Europe.  

The  unit  capital  cost  of  such  bio-refineries  is  higher  than  that  of  conventional  ones.  However, 
increased production of advanced renewable fuels drives a reduction in the unit capital costs of these 
installations over time, as a result of learning effects. In BIO-A scenario, additional yearly capacity of 
advanced  production  processes  of  4  Mtoe  for  2021-2030  and  44.8  Mtoe  for  2021-2050  is  required 
compared  to  REF2016,  while  in  BIO-B  7.3  Mtoe  for  2021-2030  and  49.5  Mtoe  for  2021-2050.  In 
EUCO30  and  all  other  decarbonisation  pathways/scenarios,  no  significant  capacity  increase  takes 
place  for  2021-2030  relative  to  REF2016  but  additional  yearly  capacity  of  advanced  production 
processes of 31.6 Mtoe would be needed for 2021-2050 relative to the Reference scenario. 

The additional capacities to be established would lead to an average annual increase in capital costs of 
€0.8 billion for 2021-2030 (€8.2 billion for 2021-2050) compared to the Reference scenario in BIO-A 
scenario and €1.4 billion for 2021-2030 (€9.1 billion for 2021-2050) in BIO-B scenario. EUCO30 and 
all other decarbonisation pathways/scenarios result in lower average annual increases in capital costs 
of €0.1 billion for 2021-2030 (€6 billion for 2021-2050) relative to REF2016, due to the lower uptake 
of advanced renewable fuels in these scenarios.  

4.3.6 Impacts on transport as a business 

The impacts  of the decarbonisation pathways/scenarios on the transport sector itself are  analysed in 
terms of level of activity, modal shift and unit costs per user.  

Transport activity 

Passenger transport activity is expected to continue growing in all decarbonisation pathways/scenarios 
relative to 2010 (about 20-22% by 2030 and 38-39% by 2050). However, active policies in place for 
stimulating change in the transport system would put a brake on the expansion of passenger transport 
activity  in  the  decarbonisation  pathways/scenarios  relative  to  the  Reference  scenario,  activity  going 
down by 0.2-1.4% in 2030 (see Table 7). MOBI and MOBI-TAX scenarios show the highest decrease 
in the passenger transport activity (0.9% and 1.4% by 2030, respectively) compared to REF2016, due 
to their strong focus on policies intelligently managing transport demand and taxation, supported by 
cross-cutting  initiatives  in  the  urban  area.  Advanced  research  and  innovation  in  electro-mobility 
enables  the  decarbonisation  of  passenger  transport  with  lower  impact  on  transport  activity  in  the 
TECH scenario (0.2% reduction in 2030 relative to REF2016), due to the uptake of electric propulsion 
vehicles at lower costs and limited impact on the unit cost of passenger transport. 

Similarly,  freight  transport  activity  shows  significant  growth  over  time  in  all  decarbonisation 
pathways/scenarios (around 33-35% for 2010-2030 and 56-57% for 2010-2050), driven by sustained 
economic activity growth. MOBI and MOBI-TAX scenarios display the highest decrease relative to 
REF2016 (0.9% and 1.6% in 2030, respectively) due to intensive measures optimising the efficiency 
of  the  transport  system  and  leading  to  reductions  in  road  freight  activity.  The  impact  is  highest  in 
MOBI-TAX,  because  fuel  costs  including  taxation  represent  almost  30%  of  the  total  road  freight 
costs. 

66 

 
 
Table 7: Change in passenger and freight transport activity relative to EU Reference scenario 2016 

Transport activity (% change to REF2016) 

Passenger transport  

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

Transport activity (% change to REF2016) 

Passenger transport  

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

Transport activity (% change to REF2016) 

Passenger transport  

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

REF2016 ** 

EUCO27  

EUCO30  

2030 

7,880 

6,280 

693 

860 

46 

3,457 

2,446 

580 

432 

2050 

9,053 

6,946 

878 

2030 

2050 

2030 

2050 

-0.4% 

-1.1% 

6.2% 

-1.6% 

-2.4% 

8.2% 

-0.3% 

-1.1% 

6.1% 

-1.5% 

-2.3% 

8.1% 

1,177 

-0.7% 

-5.1% 

-0.3% 

-4.8% 

52 

4,051 

2,835 

724 

492 

4.2% 

-0.1% 

-1.3% 

2.5% 

3.8% 

8.6% 

-0.9% 

-3.7% 

4.8% 

6.5% 

4.1% 

0.0% 

-1.2% 

2.6% 

3.7% 

8.4% 

-0.9% 

-3.6% 

4.7% 

6.4% 

VEH 

BIO-A 

BIO-B 

2030 

2050 

2030 

2050 

2030 

2050 

-0.4% 

-1.1% 

6.1% 

-1.5% 

-2.3% 

8.1% 

-0.4% 

-1.2% 

6.2% 

-1.5% 

-2.3% 

8.1% 

-0.5% 

-1.3% 

6.3% 

-1.5% 

-2.3% 

8.1% 

-0.3% 

-4.8% 

-0.5% 

-4.8% 

-0.6% 

-4.9% 

4.3% 

0.1% 

-1.1% 

2.5% 

3.5% 

8.4% 

-0.8% 

-3.4% 

4.8% 

6.3% 

4.2% 

-0.1% 

-1.5% 

2.7% 

3.7% 

8.6% 

-0.8% 

-3.5% 

4.8% 

6.5% 

4.2% 

-0.2% 

-1.6% 

2.7% 

3.8% 

8.6% 

-0.8% 

-3.5% 

4.8% 

6.5% 

TECH 

MOBI 

MOBI-TAX 

2030 

2050 

2030 

2050 

2030 

2050 

-0.2% 

-0.9% 

6.0% 

-0.9% 

-1.4% 

7.6% 

-0.9% 

-1.9% 

7.0% 

-1.5% 

-2.3% 

8.7% 

-1.4% 

-2.5% 

7.3% 

-1.7% 

-2.6% 

8.8% 

-0.2% 

-4.6% 

-0.5% 

-4.9% 

-0.6% 

-4.9% 

4.1% 

0.0% 

-1.2% 

2.6% 

3.6% 

8.0% 

-0.8% 

-3.4% 

4.7% 

6.3% 

5.0% 

-0.9% 

-3.1% 

3.6% 

5.4% 

8.7% 

-0.8% 

-3.4% 

4.8% 

6.3% 

4.0% 

-1.6% 

-4.1% 

3.9% 

5.6% 

8.1% 

-1.3% 

-4.2% 

5.1% 

6.4% 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  *  For  aviation,  domestic  and  international  intra-EU  activity  is  reported  to  maintain  the  comparison  with  reported  statistics;                     
**  Transport  activity  levels  in  REF2016  are  reported  in  billion  passenger-kilometres  for  passenger  transport  and  tonne-kilometres  for 
freight transport.  

Modal shift 

The  market  shares  of  passenger  and  freight  road  transport  decrease  in  all  decarbonisation 
pathways/scenarios  relative  to  REF2016  (0.6-0.9  percentage  points  in  2030  for  passenger  road 
transport  and  0.9-1.8  percentage  points  for  road  freight),  driven  by  measures  internalising  external 
costs but also by policies improving the competitiveness of rail and inland navigation (see Table 8).  

67 

 
 
Table 8: Change in the modal shares relative to the EU Reference scenario 2016 (in percentage points) 

Modal share (p.p. difference to REF2016) 

REF2016 ** 

EUCO27  

EUCO30  

2030 

2050 

2030 

2050 

2030 

2050 

Passenger transport  

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

Modal share (p.p. difference to REF2016) 

Passenger transport  

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

Modal share (p.p. difference to REF2016) 

Passenger transport  

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

Inland navigation 

79.7% 

76.7% 

-0.6 

8.8% 

9.7% 

10.9% 

13.0% 

0.6% 

0.6% 

70.7% 

70.0% 

16.8% 

17.9% 

12.5% 

12.2% 

0.6 

0.0 

0.0 

-0.9 

0.4 

0.5 

-0.6 

1.0 

-0.5 

0.1 

-1.9 

1.0 

0.9 

-0.6 

0.6 

0.0 

0.0 

-0.9 

0.4 

0.5 

-0.6 

0.9 

-0.4 

0.1 

-1.9 

1.0 

0.9 

VEH 

BIO-A 

BIO-B 

2030 

2050 

2030 

2050 

2030 

2050 

-0.6 

0.6 

0.0 

0.0 

-0.8 

0.4 

0.4 

-0.6 

0.9 

-0.4 

0.1 

-1.9 

1.0 

0.9 

-0.6 

0.6 

0.0 

0.0 

-1.0 

0.5 

0.5 

-0.6 

1.0 

-0.4 

0.1 

-1.9 

1.0 

0.9 

-0.6 

0.6 

0.0 

0.0 

-1.0 

0.5 

0.5 

-0.6 

1.0 

-0.4 

0.1 

-1.9 

1.0 

0.9 

TECH 

MOBI 

MOBI-TAX 

2030 

2050 

2030 

2050 

2030 

2050 

-0.6 

0.5 

0.0 

0.0 

-0.9 

0.4 

0.5 

-0.4 

0.8 

-0.5 

0.1 

-1.9 

1.0 

0.9 

-0.8 

0.7 

0.0 

0.0 

-1.6 

0.8 

0.8 

-0.6 

1.0 

-0.4 

0.1 

-1.9 

1.0 

0.9 

-0.9 

0.8 

0.1 

0.0 

-1.8 

0.9 

0.9 

-0.7 

1.0 

-0.4 

0.1 

-2.1 

1.1 

0.9 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For aviation, domestic and international intra-EU activity is reported to maintain the comparison with reported statistics; ** Modal 
shares in REF2016 for 2030 and 2050.  

Passenger rail increases its modal share by 0.6-0.8 percentage points in 2030 relative to REF2016, and 
freight  rail  by  0.4-0.9  percentage  points;  freight  inland  navigation  modal  share  goes  up  by  0.5-0.9 
percentage points in 2030. The highest modal shift towards rail and inland navigation takes place in 
MOBI  and  MOBI-TAX.  High-speed  rail  gains  further  shares,  reaching  2.7-2.8%  of  passenger 
transport activity by 2030 and 3.6% by 2050 in MOBI and MOBI-TAX; it is projected to undertake 
108 billion more passenger kilometres in 2030 and 218 billion more in 2050 relative to 2010.  

68 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Air transport modal share in the decarbonisation pathways/scenarios remains similar to REF2016 by 
2030;  post-2030  its  modal  share  slightly  decreases  relative  to  REF2016,  due  to  higher  ETS  prices 
which lead to lower growth in air transport activity.  

Unit costs per user  

The unit costs per passenger transported would increase in all decarbonisation pathway/scenarios (see 
Table 9), despite the decline in the fuel costs per km travelled driven by improvements in vehicle and 
transport system efficiency.158,159 EUCO27 and EUCO30 show moderate costs increases by 2030, of 
about 1.1-1.2% relative to the Reference scenario. MOBI and MOBI-TAX show the highest increases 
by  2030  (2.1%  and  2.8%,  respectively)  due  to  a  more  ambitious  pathway  for  internalising  local 
externalities than in EUCO30, capital costs (i.e. transport equipment costs) related to public transport 
and  the  alignment  of  the  EU  minimum  tax  rates  of  petrol  and  gas  oil  (in  MOBI-TAX).  The  cost 
increase  in  VEH  scenario  by  2030  (1.6%)  is  driven  to  large  extent  by  the  equipment  costs  for  the 
electric propulsion vehicles while in BIO-A (1.3%) and BIO-B (1.5%) by the fuel costs related to the 
higher uptake of advanced biofuels.  The increase in unit cost per passenger transported  is higher in 
BIO-B relative to BIO-A due to the higher share of advanced renewable fuels in this scenario (6.9% 
in  BIO-B  versus  4%  in  BIO-A  in  total  liquid  and  gaseous  transport  fuels  in  2030).  TECH  scenario 
shows the lowest increase in unit costs per passenger transported, similar to EUCO27, due to lower 
increases in capital costs (i.e. transport equipment costs) as an effect of policies that enable the rapid 
deployment  of new powertrains supported by advanced research  and innovation  in electro-mobility. 
By  2050,  all  decarbonisation  pathways/  scenarios  show  relatively  similar  impacts  on  unit  costs  per 
passenger  transported  (3.7  to  4%  increase  relative  to  REF2016),  except  for  TECH  scenario  which 
results in lower costs increases (around 2.6%). 

Table 9: Unit cost of transport relative to Reference scenario 2016 

Unit cost of transport relative to REF2016 
(% change) 

REF2016 (in €/pkm or €/tkm)* 

% change to REF2016 

EUCO27 

EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

MOBI-TAX 

Unit cost for passenger transport 

Unit cost for freight transport 

2030 

0.32 

1.1% 

1.2% 

1.6% 

1.3% 

1.5% 

1.1% 

2.1% 

2.8% 

2050 

0.33 

3.8% 

3.7% 

3.7% 

3.7% 

3.7% 

2.6% 

3.7% 

4.0% 

2030 

0.17 

0.2% 

0.0% 

0.0% 

0.3% 

0.5% 

0.0% 

1.8% 

3.1% 

2050 

0.17 

2.2% 

2.0% 

1.6% 

1.8% 

1.9% 

1.9% 

1.8% 

2.8% 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  *  Unit  costs  for  passenger  transport  are  expressed  in  euro  per  passenger-kilometres  and  for  freight  in  euro  per  tonne-kilometres. 
Costs are expressed in 2013 prices. For REF2016 the levels of unit costs are provided for 2030 and 2050 for passenger and freight. 

For  freight  transport,  the  drop  in  unit  fuel  costs  outweighs  the  increase  in  unit  capital  costs  and 
variable non-fuel costs (i.e. road charges) in most pathways/scenarios by 2030. As already explained, 
fuel  costs  play  a  more  important  role  in  total  costs  for  freight,  relative  to  passenger  transport.  The 

158  Passenger  transport  costs  include  capital  costs  (i.e.  transport  equipment  costs),  fixed  operation  costs  and  variable  fuel 

and non-fuel costs (including maintenance costs, taxes and charges). 

159  Annualised capital costs include the return necessary on private sector investments in the transport sector.  

69 

 
 
  
  
  
  
                                                            
highest  increases  in  unit  cost  for  freight  transport160  take  place  in  the  MOBI  and  MOBI-TAX 
scenarios (1.8% and 3.1% by 2030, respectively), similar to passenger transport. In BIO-A scenario 
the  strong  uptake  of  advanced  renewable  fuels  results  in  about  0.3%  increase  relative  to  REF2016, 
while in BIO-B, where the share of advanced renewable fuels is even higher, in about 0.5% increase. 
By  2050,  unit  cost  for  freight  goes  up  by  about  1.6-2.2%  relative  to  REF2016,  only  MOBI-TAX 
scenario showing higher increases (2.8% relative to REF2016). 

4.3.7 Economic impacts  

The  economic  impacts  of  the  decarbonisation  pathways/scenarios  are  assessed  in  terms  of  transport 
system costs, investments and transfer payments to the public budget. The scenarios are not directly 
comparable  since  they  achieve  different  cumulative  GHG  emissions  reductions  in  2050.  The  net 
average costs per tonne of CO2 are hence shown, to provide a comparison between  decarbonisation 
pathways/scenarios from this perspective. In addition, a qualitative assessment is provided for impacts 
on competitiveness. 

Transport system costs  

When  assessing  transport  system  costs  for  the  decarbonisation  pathways/scenarios,  it  needs  to  be 
taken into account that costs of already adopted policies as well as developments largely unrelated to 
policy  (e.g.  renewal  of  ageing  vehicle  stock,  growing  international  fossil  fuel  prices,  growing 
transport activity) are already covered in the Reference scenario 2016.  

System  costs  are  presented  from  the  perspective  of  the  transport  sector,  i.e.  the  costs  for  providing 
mobility services.161 They include:  

  capital costs related to transport equipment; 
  fuel costs (including fuel-related taxes like excise duties and value added taxes); 
  fixed operation costs (e.g. maintenance costs); 
  variable non-fuel operation costs (e.g. charges, registration taxes and other ownership taxes); 
  external costs (of congestion, air pollution, noise and accidents); 
  infrastructure  costs  for  alternative  fuels  (i.e.  for  the  recharging/refuelling  of  electric  propulsion 
vehicles  including  fuel  cell  vehicles,  for  the  refuelling  of  LNG  lorries  and  bunkering  of  LNG 
vessels).  

Transport system costs include transfer payments to the budget (i.e. excise duties, value added taxes, 
registration taxes and other ownership taxes, charges, payments for CO2 allowances in aviation under 
the EU Emission Trading Scheme, etc.), which are additional costs for the user although considered as 
a transfer from the point of view of society. 

Transport  system  costs  include  the  fuel  costs  paid  by  the  transport  users.  In  particular,  prices  of 
biofuels are calculated as to recover all costs incurred by the relevant industry (including capital costs, 
biomass  feedstocks,  etc.).  Biofuel  prices  are  influenced  by  strong  learning  effects  in  bio-refinery 
technologies in the model. In the case of electricity prices, they reflect the transformation of the power 
system to near zero carbon emissions; however they also reflect the benefits from the smoothing of 
the  load  curve  enabled  by  recharging  of  batteries  of  the  electric  vehicles  during  the hours with  low 
demand for electricity.  

160  Similarly  to  passenger  transport,  freight  transport  costs  include  capital  costs  (i.e.  transport  equipment  costs),  fixed 

operation costs and variable fuel and non-fuel costs. 

161  Other Impact Assessments report energy system costs, which represent the costs for providing energy services, and cover 

the entire energy sector (transport, industry, tertiary, households as well as power generation). 

70 

 
 
                                                            
However, transport system costs do not include research and development costs. This is because there 
is a weak link between investment in research and development and technology outcomes, which does 
not allow for an easy quantification of total costs associated with the different pathways/scenarios. It 
can be assumed that these costs are passed through to consumers and reflected in the final prices of 
transport equipment. The transport system costs are calculated using private discount rates. 

Transport system costs are calculated ex post, after the model is solved. As in the Reference scenario, 
for  the  calculation  of  the  capital  costs,  the  investment  costs  have  been  annualised  following  the 
equivalent annuity cost method with a discount rate of 10%. 

In  the  period  2021-2030,  the  decarbonisation  pathways/scenarios  would  lead  to  an  average  annual 
increase in transport system costs of €4 to 16 billion compared to the Reference scenario (see  Table 
10). Expressed as share of GDP, this is equivalent to an average annual increase in system costs of 
0.03 to 0.10 percentage points relative to REF2016 (see Table 11). Taking a longer term perspective 
(2021-2050),  the  average  annual  system  costs  would  be  €22  to  31  billion  higher  than  in  REF2016, 
equivalent to an average annual increase in system costs of 0.12 to 0.17 percentage points of GDP.  

Table 10: Additional transport system costs for 2021-2030/2021-2050 compared to REF2016 (in billion €'2013) 

Annual averages for 2021-2030 
compared to REF2016 (bil. €'2013) 

EUCO27  EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

Total costs  

Capital costs 

Fuel costs (incl. taxation) 

Fixed operation costs 

Variable non-fuel operation costs 

External costs 

Recharging/refuelling 
infrastructure 

Annual averages for 2021-2050 
compared to REF2016 (bil. €'2013) 

Total costs  

Capital costs 

Fuel costs (incl. taxation) 

Fixed operation costs 

Variable non-fuel operation costs 

External costs 

Recharging/refuelling 
infrastructure 

4 

19 

-19 

2 

6 

-6 

2 

4 

23 

-24 

3 

6 

-6 

2 

8 

35 

-33 

7 

5 

-9 

3 

5 

22 

-21 

3 

5 

-7 

2 

6 

22 

-19 

3 

5 

-7 

2 

4 

22 

-25 

5 

6 

-6 

2 

10 

18 

-26 

0 

29 

-12 

2 

EUCO27  EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

23 

60 

-62 

22 

14 

-19 

9 

24 

63 

-67 

23 

14 

-19 

10 

28 

72 

-75 

26 

14 

-20 

10 

27 

61 

-59 

22 

13 

-20 

10 

26 

61 

-58 

22 

12 

-20 

10 

22 

55 

-70 

29 

16 

-18 

11 

26 

60 

-69 

21 

31 

-26 

10 

MOBI-
TAX 

16 

15 

-11 

-1 

25 

-15 

2 

MOBI-
TAX 

31 

57 

-55 

20 

27 

-28 

10 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

The lowest costs in the 2021-2030 and 2021-2050 perspective are projected in the EUCO27, EUCO30 
and TECH scenarios, showing an average annual increase in transport system costs of about €4 billion 
for 2021-2030 (€22 to 24 billion for 2021-2050) compared to the Reference scenario. The differences 
in  transport  system  costs  between  scenarios  are  more  pronounced  in  the  2021-2030  perspective, 
whereas  in  a  longer  term  perspective  the  savings  on  fuel  expenditures  level  out  to  larger  extent  the 
differences between higher capital costs, road charges and fuel taxes in VEH and MOBI, MOBI-TAX 
scenarios  respectively.  However,  it  should  be  stressed  that  total  transport  system  costs  between 
pathways/scenarios  are  not  directly  comparable  because  of  the  different  cumulative  emissions 

71 

 
 
reductions achieved by 2050. In addition, as explained above, the TECH scenario shows the lowest 
costs because research and development is not covered by the transport system costs.  

Looking  at  the  costs  structure,  the  highest  average  annual  increase  in  capital  costs  compared  to 
REF2016 would take place in VEH scenario (€35 billion for 2021-2030), driven by the most stringent 
CO2  standards  for  light  duty  vehicles  among  scenarios.  BIO-A,  BIO-B  and  TECH  show  moderate 
capital costs increases (€22 billion for 2021-2030), similar to EUCO30 scenario. MOBI and MOBI-
TAX show significant increases in variable non-fuel operation costs, mainly due to road charges, but 
also result in the highest decreases in external costs among scenarios. The largest drop in fuel costs 
expenditures relative to the Reference scenario would take place in VEH scenario, due to higher fuel 
savings.  MOBI-TAX  shows  the  lowest  overall  decrease  in  fuel  costs  because  of  increases  in  excise 
duties which are also included under this heading. Also BIO-A and BIO-B scenarios show somewhat 
smaller  decrease  in  fuels  costs  relative  to  REF2016  because  of  higher  costs  of  advanced  biofuels 
which are more widely used.  

Table 11: Additional transport system costs for 2021-2030 and 2021-2050 compared to REF2016 (percentage 
points of GDP) 

Annual averages for 2021-2030 
compared to REF2016 (p.p. of 
GDP) 

EUCO27  EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

MOBI-
TAX 

Total costs  

Capital costs 

0.03 

0.12 

0.03 

0.15 

0.05 

0.23 

0.03 

0.14 

0.04 

0.14 

0.03 

0.14 

0.07 

0.11 

0.10 

0.10 

Fuel costs (incl. taxation) 

-0.12 

-0.15 

-0.21 

-0.13 

-0.12 

-0.16 

-0.17 

-0.07 

Fixed operation costs 

Variable non-fuel operation costs 

0.01 

0.04 

0.02 

0.04 

0.05 

0.03 

0.02 

0.03 

0.02 

0.03 

0.03 

0.04 

0.00 

0.18 

-0.01 

0.16 

External costs 

Recharging/refuelling 
infrastructure 

Annual averages for 2021-2050 
compared to REF2016 (p.p. of 
GDP) 

-0.04 

-0.04 

-0.05 

-0.04 

-0.04 

-0.04 

-0.08 

-0.09 

0.01 

0.01 

0.02 

0.01 

0.01 

0.01 

0.01 

0.01 

EUCO27  EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

MOBI-
TAX 

Total costs  

Capital costs 

0.13 

0.33 

0.13 

0.35 

0.15 

0.39 

0.14 

0.34 

0.14 

0.33 

0.12 

0.30 

0.14 

0.33 

0.17 

0.31 

Fuel costs (incl. taxation) 

-0.34 

-0.37 

-0.41 

-0.32 

-0.32 

-0.38 

-0.38 

-0.30 

Fixed operation costs 

Variable non-fuel operation costs 

0.12 

0.07 

0.13 

0.08 

0.14 

0.08 

0.12 

0.07 

0.12 

0.07 

0.16 

0.09 

0.11 

0.17 

0.11 

0.15 

External costs 

Recharging/refuelling 
infrastructure 

-0.10 

-0.10 

-0.11 

-0.11 

-0.11 

-0.10 

-0.14 

-0.15 

0.05 

0.05 

0.06 

0.05 

0.05 

0.06 

0.05 

0.05 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Transport system  costs shown above do not include the welfare losses due to  limitation in mobility 
(users’ disutility), which can be reflected through the compensating variation.162 This could provide an 
average  annual  increase  in  costs  of  €14  to  35  billion  for  2021-2030  compared  to  the  Reference 
scenario,  with  the  lowest  welfare  losses  due  to  the  limitation  in  mobility  taking  place  in  TECH 
scenario and the highest in the MOBI-TAX scenario. 

162   Compensating variation refers to the amount of additional money an agent would need to reach its initial utility after a 

change in prices, or a change in product quality. 

72 

 
 
                                                            
Investments 

The  transport  investment  costs  cover  capital  expenditures  on  transport  equipment  and  on 
recharging/refuelling  infrastructure  (i.e.  for  the  recharging/refuelling  of  electric  propulsion  vehicles 
including  fuel  cell  vehicles,  for  the  refuelling  of  LNG  lorries  and  bunkering  of  LNG  vessels). 
Investment costs are not annualised. 

In  the  period  2021-2030,  the  decarbonisation  pathways/scenarios  would  lead  to  an  average  annual 
increase in investment expenditures of €24 to 49 billion (€55 to 69 billion for 2021-2050) compared 
to the Reference scenario (see Table 12). About €21 to 44 billion for 2021-2030 would take place in 
transport equipment and €3 to 5 billion in recharging/refuelling infrastructure. While the scale of the 
investment  challenge  requires  significant  efforts  for  their  financing,  such  investment  can  also  be 
expected to serve as stimulus for the European economy in terms of growth and job creation.  

Table  12:  Annual  average  investments  by  mode  for  2021-2030/2021-2050  relative  to  REF2016  (in  billion 
€'2013) 

Annual averages - compared to REF2016 
(bil. €'2013) 

Total investments 

Investments in transport equipment  

Road 

Rail 

Aviation 

Inland navigation 

Investments in recharging/refuelling 
infrastructure 

Annual averages - compared to REF2016 
(bil. €'2013) 

Total investments 

Investments in transport equipment  

Road 

Rail 

Aviation 

Inland navigation 

Investments in recharging/refuelling 
infrastructure 

Annual averages - compared to REF2016 
(bil. €'2013) 

Total investments 

Investments in transport equipment  

Road 

Rail 

Aviation 

Inland navigation 

Investments in recharging/refuelling 
infrastructure 

REF2016 * 

EUCO27  

EUCO30  

'21-'30 

'21-'50 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

708 

705 

597 

28 

71 

10 

3 

778 

774 

640 

40 

84 

10 

4 

27 

25 

21 

3 

0 

1 

3 

61 

53 

51 

3 

-2 

1 

8 

33 

30 

26 

3 

0 

1 

3 

63 

55 

53 

3 

-1 

1 

8 

VEH 

BIO-A 

BIO-B 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

49 

44 

40 

3 

0 

1 

5 

69 

61 

59 

3 

-1 

1 

8 

32 

29 

25 

3 

0 

1 

3 

63 

54 

52 

3 

-1 

1 

8 

31 

28 

24 

3 

0 

1 

4 

62 

54 

52 

3 

-2 

1 

8 

TECH 

MOBI 

MOBI-TAX 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

32 

29 

25 

3 

0 

1 

4 

55 

46 

44 

3 

-1 

1 

9 

27 

24 

19 

4 

0 

2 

3 

61 

53 

50 

3 

-1 

1 

8 

24 

21 

16 

4 

-1 

2 

3 

59 

51 

48 

3 

-2 

1 

8 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For REF2016 average annual investments are provided in billion €'2013.  

The highest increases in investments in transport equipment are expected in the VEH scenario, driven 
by  very  stringent  CO2  standards,  while  the  lowest  investments  would  take  place  in  the  EUCO27, 

73 

 
 
MOBI  and  MOBI-TAX  scenarios  where  emissions  reductions  would  be  mainly  achieved  through 
internalisation measures and policies promoting efficiency improvements in the transport system and 
multimodality. Significant investments in all scenarios are expected to take place in road transport for 
the renewal of the vehicle fleet and the uptake of advanced powertrains. MOBI and MOBI-TAX show 
higher  investments  in  rail  and  inland  navigation  relative  to  other  scenarios,  due  to  more  intensive 
policies promoting multimodality and shifts towards more sustainable modes.  

Similarly to transport equipment, VEH shows the highest rise in investments for recharging/refuelling 
infrastructure  for  2021-2030.  This  is  because  of  the  higher  share  of  electric  propulsion  vehicles 
projected in this scenario. In a longer term perspective, similar increase in investment expenditures for 
recharging/refuelling  infrastructure  take  place  in  all  pathways  scenarios  (€8  to  9  billion  for  2021-
2050).   

Transfer payments to the budget 

Part  of  the  transport  system  costs  which  represent  revenues  for  the  public  budget  can  be  separated 
from  the  system  costs  (see  Table  13).  These  transfers  can  be  in  principle  recycled  back  to  the 
economy.  

Table  13:  Annual  average  transfer  payments  to  the  budget  relative  to  EU  Reference  scenario  2016  for  2021-
2030 and 2021-2050 (in billion €'2013) 

Additional transfer payments to 
the budget relative to REF2016 - 
annual averages for 2021-2030 (in 
bil. €’2013) 

EUCO27  EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

Total 

Fuel taxes 

Charges 

Other taxes 

-1 

-11 

10 

0 

-4 

-14 

10 

0 

-10 

-20 

10 

0 

-4 

-14 

10 

0 

-4 

-14 

10 

0 

-5 

-15 

10 

0 

21 

-15 

36 

0 

Additional transfer payments to 
the budget relative to REF2016 - 
annual averages for 2021-2050 (in 
bil. €’2013) 

EUCO27  EUCO30 

VEH 

BIO-A 

BIO-B 

TECH 

MOBI 

MOBI-
TAX 

38 

2 

36 

0 

MOBI-
TAX 

Total 

Fuel taxes 

Charges 

-10 

-40 

29 

-13 

-43 

29 

-17 

-47 

29 

-13 

-43 

29 

-13 

-42 

29 

-16 

-46 

29 

5 

-44 

48 

21 

-27 

47 

Other taxes 

1 
Source: PRIMES-TREMOVE transport model (ICCS-E3MLab). Note: Other taxes include registration taxes and other ownership taxes. 

1 

1 

2 

1 

1 

1 

1 

MOBI and MOBI-TAX scenarios would generate substantial transfer payments to the public budget 
by  2030,  on  average  €21  to  38  billion  annually  for  2021-2030  compared  to  the  Reference  scenario 
(see Table 13). In MOBI, toll revenues would outweigh the decrease in fuel tax revenues, triggered by 
fuel  savings  and  the  electrification  of  the  vehicle  fleet.  The  increase  in  diesel  excise  duties  rates 
relative  to  current  levels  reinforces  this  effect  in  MOBI-TAX.  While  all  other  scenarios  bring  a 
decrease  in  fuel  tax  revenues  (due  to  lower  fuel  consumption)  compared  to  REF2016,  MOBI-TAX 
scenario shows an increase in these revenues. 

In  EUCO27,  EUCO30,  BIO-A,  BIO-B  and  TECH  scenarios  toll  revenues  (although  moderate 
compared to MOBI and MOBI-TAX scenarios) also compensate to large extent the reduction in fuel 
tax  revenues,  while  VEH  scenario  shows  the  highest  drop  in  public  budget  revenues  by  2030  (on 
average  €10  billion  annually  for  2021-2030  compared  to  the  Reference  scenario).  The  picture  is 

74 

 
 
somewhat  similar  in  the  long  term  perspective,  where  full  internalisation  of  external  costs  in  the 
MOBI  and  MOBI-TAX  scenarios  and  higher  excise  duties  for  diesel  in  MOBI-TAX  would  still 
generate  positive  impacts  on  the  public  budget.  However,  in  other  scenarios  the  impact  would  be 
negative due to large decreases in fuel tax revenues (on average €40 to 47 billion annually for 2021-
2050 compared to the Reference scenario) driven by energy savings and large scale electrification of 
transport. In the long term, therefore, as fossil fuel use reduces, a budgetary neutral approach could 
lead  Member  States  to  either  raise  fuel  taxes,  broaden  their  scope,  or  gradually  shift  towards  other 
forms of taxes and charges such as road pricing, including the internalisation of externalities. 

Net average cost per tonne of CO2 

As previously explained, total transport system costs between pathways/scenarios are not directly 
comparable because of the different cumulative emissions reductions achieved by 2050. One way of 
comparing the scenarios is by looking at the net average costs of emission reductions (costs per tonne 
of CO2 abated) of decarbonisation pathways/scenarios relative to the Reference scenario over the long 
term horizon (2015-2050). 

In  order  to  do  so,  the  gains  from  the  reduction  in  external  costs  in  terms  of  improved  air  quality, 
reduced noise, increased safety and lower congestion levels (i.e. co-benefits of decarbonisation) have 
to be singled out from the total transport system costs and the two elements thus obtained have to be 
expressed  in  terms  of  €/tonne  of  CO2.  The  two  components  would  therefore  represent  the  “gross 
average costs” of achieving emissions reductions (i.e. the average cost of each scenario per tonne of 
CO2 avoided)163 and the “average co-benefits” (i.e. the average benefits of each scenario per tonne of 
CO2 avoided)164. Subtracting “average co-benefits” from “gross average costs” enables to identify the 
net  average  costs  of  emissions  reductions.  They  are  summarised  in  Figure  19.165  The  gross  average 
costs, average co-benefits and net average costs in this figure are indexed to the gross average costs of 
emission  reductions  in  the  EUCO27  scenario.  For  example,  in  the  EUCO27  scenario  average  co-
benefits  are  found  to  be  45%  of  the  gross  average  costs,  which  implies  that  net  average  costs  of 
emission reductions are only 55% of the gross average costs. 

The transport system costs are end-user costs, calculated using private discount rates, of all policies in 
the transport sector, including  on renewables, energy  efficiency and transport demand  management. 
These policies are not only related to transport decarbonisation but have multiple objectives like e.g. 
improving  security  of  energy  supply,  improving  the  efficiency  of  the  transport  sector,  reducing  air 
pollution, etc. This is why the comparison presented in this section should be read together with the 
analysis  of  other  benefits  such  as  lower  oil  dependency,  improved  energy  efficiency  or  lower  air 
pollution presented in other sections. The transport system costs include taxation (e.g. in the price of 
fuels),  as  this  is  experienced  by  end-users.  When  dividing  by  avoided  CO2  emissions,  post-2050 
reductions  are  not  taken  into  account,  nor  are  side  benefits  such  as  the  decrease  in  the  energy 
dependency quantified in any manner.    

163  Average gross costs are defined as the difference between the cumulative transport costs excluding external costs in each 
decarbonisation pathway/scenario for 2015-2050 and those of the Reference scenario, divided by the difference between 
the cumulative well to wheel emissions in each decarbonisation pathway/scenario and those in the Reference scenario. 
Transport  costs  are  those  presented  in  the  previous  section  and  thus  also  cover  the  costs  of  alternative  fuels 
infrastructure. 

164  Average  co-benefits  are  defined  as  the  difference  between  the  cumulative  external  costs  in  each  decarbonisation 
pathway/scenario for 2015-2050 and those in the Reference scenario, divided by the difference in the cumulative well to 
wheel emissions in each decarbonisation pathway/scenario relative to the Reference scenario.  
165  The average gross costs, average co-benefits and average net costs are expressed in 2013 prices. 

75 

 
 
                                                            
Figure  19:  Gross  average  costs,  average  co-benefits  and  net  average  costs  of  emission  reductions  in  the 
decarbonisation pathways/scenarios  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

The lowest net average cost of emission reductions relative to EUCO27 would be achieved in TECH 
scenario;  this  outcome  is  due  to  the  research  and  development  costs  which  are  not  factored  in  the 
transport system costs. As already explained, there is a weak link between investment in research and 
development and technology outcomes, which does not allow for an easy quantification of total costs 
associated  with  the  different  pathways/scenarios.  This  pathway/scenario  also  incorporates  higher 
degree of uncertainty associated with assumptions on technological development. In case the assumed 
technological breakthrough would not materialise, the outcome of this pathway/scenario would be the 
same  as  that  of  EUCO30.  MOBI-TAX  is  projected  to  result  in  the  highest  net  average  costs  of 
emission  reductions  relative  to  EUCO27,  driven  by  the  high  gross  average  cost  due  to  increases  in 
diesel  taxation  relative  to  current  levels.  VEH  scenario  shows  10%  higher  net  average  costs  of 
emission reductions than EUCO27, driven by the transport equipment costs which play an important 
role  due  to  the  very  stringent  CO2  standards  for  light  duty  vehicles  and  measures  leading  to  fuel 
efficiency improvements for new conventional and hybrid heavy goods vehicles. The BIO-A scenario 
shows similar gross average costs for emissions reductions to VEH. While BIO-A has lower capital 
costs  than  VEH,  it  also  achieves  lower  savings  in  fuel  costs  driven  by  price  increases  caused  by 
blending  of  advanced  biofuels.  BIO-A  leads  to  higher  average  co-benefits  per  tonne  of  CO2  abated 
that  result  in  the  net  average  cost  of  emission  reductions  being  6%  higher  than  in  the  EUCO27 
scenario (versus 10% for VEH). BIO-B scenario results in higher net average costs than BIO-A (8% 
higher  compared  to  EUCO27)  due  to  lower  savings  in  fuel  costs  (i.e.  as  a  result  of  price  increases 
caused  by  higher  blending  rates  for  advanced  biofuels  than  in  BIO-A)  but  with  higher  average  co-
benefits.  Both  BIO-A  and  BIO-B  scenarios  assume  phase  out  of  food  based  biofuels  by  2050  and 

76 

EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXGross average costs10010010410410690116131Average co-benefits4544444547415962Net average costs5556605859495869020406080100120140Net average costs of emission reductions per tonne (index EUCO27=100) 
 
 
2030, respectively. Further analysis would be required for quantification of ILUC effects, beyond the 
scope of the current exercise.  

MOBI  scenario  shows  higher  gross  average  costs  for  emission  reductions  than  VEH,  BIO-A  and  
BIO-B  but  also  higher  average  co-benefits  which  are  partly  compensating  the  gross  average  costs 
resulting in net average costs being 5% higher than those observed in the EUCO27 scenario. In fact, 
the  highest  average  co-benefits  among  the  decarbonisation  pathways/scenarios  relative  to  EUCO27 
are achieved in MOBI and MOBI-TAX scenarios. 

Competitiveness 

The automotive value chain is one of the most advanced and specialised in Europe and a key pillar of 
the European economy. Transport decarbonisation will open up new business opportunities, but  also 
has significant disruptive potential and is likely to reshape the existing value chain. In particular, the 
technological shift towards non-fossil fuels and alternative powertrains will have profound effects.  

In 2015, 8% of the global vehicle fleet of around 1.2 billion vehicles used high blends of alternative 
fuels or electricity.166 Electric vehicles represented about 0.1% of the global vehicle fleet (1 million) at 
the end of 2015. In terms of sales, the USA, Japan and China were leading markets in 2012-2014 for 
electric  vehicles.  Many  countries  outside  the  EU  set  targets  for  alternatively  fuelled  vehicles, 
including  electric  vehicles,  and  put  in  place  a  range  of  policies  with  the  aim  of  reducing 
environmental impacts and improving energy security.167 

Table 14: Summary of alternative transport fuel developments in seven countries and the EU 

Source: Ecofys and PwC (2016) 

Currently, the market uptake of zero emission vehicles in the EU still suffers from limited alternative 
fuels  infrastructure,  relatively  high  sales  prices  and  consumer  scepticism  as  to  their  suitability  for 
daily  use.  The  highly  uneven  share  of  alternative  fuel  vehicles  across  EU  Member  States  shows  a 
clear  link  to  national  financial  incentive  schemes.  As  technology  improves  and  prices  come  down, 
zero  emission  vehicles  will  be  able  to  compete  with  conventional  powertrains  on  a  more  equal 
footing, as shown  in section 4.3.5,  and  the importance of such schemes can be expected  to decline. 
However, in the short to medium term, financial and non-financial incentives may continue to play an 
important role for their market uptake and the Commission's focus could be on providing guidance to 

166  About 4% were ethanol flex fuel and dedicated ethanol vehicles, 2% were natural gas vehicles and 2% were running on 

liquefied petroleum gas. 

167  Ecofys  and  PwC 

(2016),  Alternative 

fuels  and 

infrastructure 

in  seven  non-EU  markets,  available  at: 

http://ec.europa.eu/transport/themes/urban/studies/doc/2016-01-21-alternative-fuels-and-infrastructure-in-seven-non-eu-
markets.pdf 

77 

 
 
                                                            
Member  States  to  ensure  coordination  (e.g.  via  the  Sustainable  Transport  Forum),  competition 
neutrality and an efficient use of funds. 

It is now increasingly clear that a shift from the internal combustion engine to alternative propulsion 
technologies  is  under  way.  In  particular,  electric  propulsion  technologies  (plug-in  hybrid,  battery 
electric and fuel cell electric vehicles) have attracted very significant investment and a growing range 
of models is now available. Especially battery and fuel cell electric vehicles, the main two  types of 
zero  (tailpipe)  emission  vehicles,  have  important  conceptual  advantages  over  internal  combustion 
ones. They are more energy efficient, they can result in lower or no CO2 emissions depending on the 
energy source and they cause no local pollution. As illustrated in sections 4.3.3 and 4.3.4, an increase 
in the market share of these vehicles would contribute towards low-emission mobility and would help 
solving air quality problems, especially relevant in urban areas.  

From  the  perspective  of  global  competitiveness,  the  shift  to  alternative  propulsion  technologies  and 
zero  emission  vehicles  is  both  a  challenge  and  an  opportunity.  The  EU  is  currently  running  an 
important trade surplus in road vehicles and EU manufacturers enjoy a strong position in important 
foreign markets such as China's. This contributes significantly to growth and employment in Europe, 
even though final assembly is increasingly done close to market. Significant effort would be required 
from the EU automotive industry in order to maintain a strong global position in a rapidly changing 
environment.  

Alternative  propulsion  vehicles  differ  significantly  from  their  internal  combustion  counterparts  and 
this has profound implications for the automotive value chain. The traction battery is, for example, the 
single most important item in terms of the production value of a battery electric vehicle and the cost 
per kilowatt-hour is seen as a key competitiveness factor. At present, there is hardly any battery cell 
manufacturing  capacity for electric vehicles in Europe and the necessary production  know  how and 
intellectual property is largely in foreign hands. Closing this capability gap looks like a precondition 
for  maintaining  a  strong  global  market  position  from  the  current  perspective.  Motorised  individual 
transport is an important and potentially growing market, but the focus is shifting to energy efficiency 
and  pollution  avoidance.  This  opens  up  considerable  market  potential  for  European  companies. 
However, this potential can only be exploited and turned into growth and employment in Europe if the 
EU automotive industry adapts to a rapidly changing technology environment.  

Against  this  backdrop,  The  work  of  the  GEAR  2030  process  in  this  area  is  therefore  aimed  at 
understanding better the ongoing changes and developing a holistic approach for the automotive value 
chain. Particular focus could be placed on zero emission vehicles and their value chain effects. The 
objective would be to devise measures that help develop the zero emission vehicle market in the EU 
so  that  larger  production  volumes  drive  down  unit  costs  and  the  investment  in  zero  emission 
technologies starts to pay off for EU manufacturers. The full range of relevant policy instruments to 
stimulate  their  development  and  market  uptake,  such  as  California's  Zero-Emission  Vehicle  (ZEV) 
mandate, which requires that a certain percentage of new vehicle sales must be zero emission, could 
be assessed. 

4.3.8 Social impacts 

Social impacts are assessed by looking at the impact on congestion and safety and also by assessing 
the impacts of the decarbonisation pathways/scenarios on the households’ transport costs. 

78 

 
 
Impacts on congestion and safety 

Two  clear  social  benefits  stemming  from  all  scenarios  are  lower  congestion  levels  and  improved 
safety. The improvements in air quality and the reduction in noise levels have been discussed above. 
All four aspects constitute co-benefits discussed in the section on net average costs per tonne of CO2. 

All  decarbonisation  pathways/scenarios  are  expected  to  result  in  somewhat  lower  congestion  costs. 
This  is  thanks  to  internalisation  measures  and  adopted  internal  market  reforms  (i.e.  4th  railway 
package,  NAIADES  II  package,  ports  package),  included  in  EUCO27,  EUCO30  and  hence  in  all 
decarbonisation  pathways/scenarios,  that  promote  the  efficiency  and  competitiveness  of  more 
sustainable  modes  and  shift  traffic  away  from  road.  Congestion  costs  would  decrease  by  1-3 
percentage points during 2010-2030 (about 3-5 percentage points for 2010-2050) relative to growth 
rates in REF2016. The highest reductions would be achieved in MOBI and MOBI-TAX, thanks to full 
internalisation  of  local  externalities  on  the  inter-urban  network,  and  intensive  policies  promoting 
efficiency improvements and multimodality. However, congestion costs are still projected to increase 
by about 21-23% by 2030 and 37-39% by 2050 relative to 2010 (see Figure 20). 

Figure 20: External costs of congestion and accidents for 2010-2030 and 2010-2050 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Policies promoting more sustainable modes and multimodality are projected to reduce road transport 
activity levels and result in significant co-benefits in terms of improved road safety and reduction of 
fatalities  and  injuries.  For  2010-2030,  MOBI  and  MOBI-TAX  scenarios  would  result  in  about  5 
percentage points lower external costs of accidents relative to growth rates in REF2016 while other 
decarbonisation  pathways/scenarios  would  show  more  moderate  impacts  (about  2  percentage  points 
decrease for 2010-2030). The deployment of C-ITS is also projected to have positive effects on safety 
in  EUCO30  relative  to  EUCO27,  and  especially  in  MOBI  and  MOBI-TAX  scenarios  where  more 
ambitious deployment is assumed. Overall, by 2030 external costs of accidents would go down by 47-
50% relative to 2010 (see Figure 20). 

Additional welfare effects in the transport sector result particularly from modal shifts from motorised 
to  non-motorised  or  collective  forms  of  transport  such  as  walking,  cycling,  public  transport  or  a 
combination of these options. The most significant co-benefits of a modal shift towards active modes 
of  transport  arise  from  increased  physical  activity  and  may  lead  to  lower  levels  of  obesity,  various 

79 

0%10%20%30%40%50%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXExternal costs of congestion (growth rates)2010-20502010-2030-54%-52%-50%-48%-46%-44%-42%-40%REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXExternal costs of accidents (growth rates)2010-20502010-2030 
 
 
physical and mental diseases and pre-mature mortality. Associated co-benefits would include reduced 
congestion  and  noise  and  air  pollution  to  the  general  population.  Secondary  co-benefits  may  be 
located in employment and improvements in social cohesion.168  

Household transport costs  

With respect to transport costs per household, Table 15 shows that the share of private transport costs 
in  the  expenditures  of  an  average  EU  household  would  slightly  increase  in  all  decarbonisation 
pathways/scenarios relative to REF2016.  

Table  15:  Private  and  public  transport  costs  for  2021-2030/2021-2050  in  REF2016  and  alternative 
pathways/scenarios (in p.p. difference of households’ expenditures relative to REF2016) 

Annual averages (p.p. of households' 
expenditures compared to REF2016) 

Total transport costs 

Private transport 

Purchase of transport equipment 

Fuel costs (excl. taxes) 

Fixed costs, taxes & charges 

Public transport 

Annual averages (p.p. of households' 
expenditures compared to REF2016) 

Total transport costs 

Private transport 

Purchase of transport equipment 

Fuel costs (excl. taxes) 

Fixed costs, taxes & charges 

Public transport 

Annual averages (p.p. of households' 
expenditures compared to REF2016) 

Total transport costs 

Private transport 

Purchase of transport equipment 

Fuel costs (excl. taxes) 

Fixed costs, taxes & charges 

Public transport 

REF2016 * 

EUCO27 

EUCO30 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

13.4% 

12.1% 

11.8% 

10.6% 

4.7% 

1.5% 

5.6% 

1.6% 

4.2% 

1.4% 

5.0% 

1.6% 

0.1 

0.1 

0.2 

-0.1 

0.0 

0.0 

0.3 

0.3 

0.4 

-0.2 

0.0 

0.0 

0.1 

0.1 

0.2 

-0.1 

0.0 

0.0 

0.3 

0.3 

0.4 

-0.2 

0.0 

0.0 

VEH 

BIO-A 

BIO-B 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

0.2 

0.2 

0.4 

-0.1 

0.0 

0.0 

0.3 

0.3 

0.4 

-0.2 

0.0 

0.0 

0.2 

0.1 

0.2 

-0.1 

0.0 

0.0 

0.3 

0.3 

0.4 

-0.2 

0.0 

0.0 

0.2 

0.1 

0.2 

-0.1 

0.0 

0.0 

0.3 

0.3 

0.4 

-0.1 

0.0 

0.0 

TECH 

MOBI 

MOBI-TAX 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

'21-'30 

'21-'50 

0.1 

0.1 

0.2 

-0.1 

0.0 

0.0 

0.2 

0.2 

0.3 

-0.2 

0.0 

0.0 

0.2 

0.2 

0.2 

-0.1 

0.1 

0.0 

0.3 

0.3 

0.4 

-0.2 

0.1 

0.0 

0.3 

0.3 

0.2 

-0.1 

0.2 

0.0 

0.4 

0.4 

0.4 

-0.2 

0.2 

0.0 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For REF2016 the shares of private and public transport costs in households’ expenditures are provided for 2021-2030 and 2021-
2050 (annual averages). 

In  EUCO27,  EUCO30,  BIO-A,  BIO-B  and  TECH  scenarios  the  average  annual  increase  for  2021-
2030 would be limited (about 0.1 percentage point), due to the reduction in fuel costs which largely 
compensates  the  increase  in  expenditures  related  to  the  purchase  of  transport  equipment.  Also,  the 
decrease in fuel taxation costs would fully compensate the additional toll costs which are marginal in 

168  COMBI-Project  (2015).  Literature  review  on  social  welfare  impacts  of  energy  efficiency  improvement  actions, 
Deliverable  5.1,  available  at:  http://combi-project.eu.  The  project  receives  funding  from  the  EU's  Horizon  2020 
programme (No 649724). 

80 

 
 
                                                            
these scenarios. The additional costs are higher in VEH and MOBI scenarios (0.2 percentage points 
for  2021-2030),  due  to  transport  equipment  and  toll  costs,  respectively.  Highest  rise  in  the  share  of 
private  transport  costs  in  the  household  expenditures  would  take  place  in  the  MOBI-TAX  scenario 
(0.3 percentage points average annual increase for 2021-2030) due to fuel taxation and toll costs. In a 
long term perspective, for 2021-2050, the decarbonisation pathways/scenarios would result in 0.2-0.4 
percentage  points  average  annual  increase  of  the  private  transport  costs  in  household  expenditures 
relative to REF2016.  

The  share  of  costs  related  to  public  transport  services  would  remain  almost  unchanged  in  the 
decarbonisation pathways/scenarios relative to REF2016. 

81 

 
 
 
5. Conclusions 

An  efficient  transport  system  is  essential  for  the  functioning  of  the  single  market  and  the  free 
movement of goods and people. It is key for creating  jobs and stimulating growth and investments. 
Low-emission mobility will be needed to support the shift to a low-carbon economy. This will also 
contribute  towards  reducing  the  dependency  of  transport  on  oil,  diversifying  its  energy  sources  and 
increasing energy efficiency in line with the Energy Union strategy. The present document seeks to 
lay the analytical ground for relevant policy decisions to achieve these objectives. 

Transport will need to contribute towards the 40% GHG emissions reduction target for 2030 and in 
particular to the 30% emissions reduction effort set for the non-Emission Trading Scheme sectors (i.e. 
transport, buildings, agriculture, small industry and waste).  

The  analysis  first  explores  measures  to  provide  a  cost-effective  transport  contribution  to  the  2030 
Climate and Energy policy framework in two central (so-called “EUCO”) scenarios. These scenarios 
have been developed to reach, in addition to the binding 2020 targets (on GHG and renewables), all 
the 2030 targets agreed by the October  2014 European Council, while respecting  the current policy 
mix. The difference between the two central scenarios lies in the level of ambition to be achieved for 
the  energy  efficiency  goal  (27%  or  30%  primary  energy  savings  in  2030  compared  to  the  2007 
baseline).  In  order  to  ensure  the  consistency  of  the  Commission's  initiatives  and  accompanying 
analyses, the same central scenarios have been used in impact assessments accompanying proposals 
for  the  Effort  Sharing  Regulation  for  the  period  2021  to  2030  and  for  the  revision  of  the  Energy 
Efficiency Directive. The analysis shows cost-effective emissions reductions of: 18-19% for transport, 
38-43% for residential and tertiary (mainly buildings), 35-37% for industry and 29-35% for non-CO2 
sectors (mainly agriculture and waste) by 2030 relative to 2005. For transport, this outcome is in line 
with  the  2011  White  Paper  which  established  a  milestone  of  20%  emissions  reduction  by  2030 
relative to 2008 levels, equivalent to 19% emissions reduction compared to 2005 levels, and with the 
2050 decarbonisation objectives. 

No  sectoral  target  has  been  established  for  the  transport  sector.  However,  comparing  developments 
under  current  trends  and  adopted  policies  (i.e.  the  EU  Reference  scenario  2016,  achieving  12% 
emissions reduction in transport) with the central scenarios (18-19%), shows that additional policies 
could be needed, especially post-2020, in order to close the gap of 6-7 percentage points and provide a 
cost-effective  transport  contribution  to  the  2030  Climate  and  Energy  policy  framework  (taking  into 
account all targets agreed for 2030 and respecting the current policy mix). 

If lower emissions reductions than set out in the two scenarios reflecting the EU’s 2030 targets were 
to  take  place  in  other  non-ETS  sectors  (e.g.  buildings,  agriculture,  small  industry  and  waste),  even 
higher  emissions  reductions  than  18-19%  will  be  required  in  the  transport  sector  to  reach  the  30% 
emissions reduction effort set for the non-ETS sectors. To demonstrate the impact of various options, 
the  analysis  shows  the  effects  of  a  broad  range  of  measures  in  some  additional  more  ambitious 
pathways/scenarios,  intensifying  already  existing  EU  policies.  These  scenarios  provide  stylised 
quantitative  assessment  on  the  relative  importance  and  ambition  of  policies  envisaged  in  terms  of 
decarbonisation  goals.  These  measures  are  not  mutually  exclusive  and  -  as  in  the  case  of  current 
policies  -  actions  on  all  dimensions  of  low-  and  zero-emission  vehicles,  low  emission  alternative 
energy for transport, and efficiency of the transport system, as well as cross-cutting action on research 
and innovation, financing, and partnerships, are mutually reinforcing.  

The  central  and  more  ambitious  pathways/scenarios  for  decarbonising  the  transport  sector  would 
result  in  transport  emissions  reductions  in  the  range  of  18  to  22%  by  2030  compared  to  2005.  The 

82 

 
 
average annual net costs for the transport system associated with this change are projected to be €4 to 
16  billion  (0.03  to  0.10  percentage  points  of  EU's  GDP)  for  2021-2030,  on  top  of  the  Reference 
scenario. 

As  part  of  these  costs,  capital  costs  for  transport  equipment  are  estimated  at  €15  to  35  billion  for 
2021-2030 and costs for recharging and refuelling infrastructure at €2 to 3 billion annually in addition 
to  those  in  the  Reference  scenario.  Fuel  costs  savings  would  represent  about  €11  to  33  billion 
annually. Significant “co-benefits” in terms of air pollution, noise, congestion and safety are projected 
in all pathways/scenarios. They are quantified at €6 to 15 billion of benefits annually for 2021-2030 
compared to the Reference scenario. While the scale of the investment challenge requires significant 
efforts for their financing, such investment can also be expected to serve as stimulus for the European 
economy in terms of growth and job creation. 

The  share  of  transport  in  the  expenditures  of  an  average  EU  household  would  only  marginally 
increase  in  all  pathways/scenarios  relative  to  the  Reference  scenario  (0.1-0.3  percentage  points 
average annual increase for 2021-2030). 

Impacts  on  transport  activity  are  projected  to  be  limited,  while  more  sustainable  transport  modes 
would  increase  their  shares  in  both  passenger  and  freight  transport  (i.e.  passenger  rail  increases  its 
modal  share  by  0.6-0.8  percentage  points  in  2030  relative  to  the  Reference  scenario,  freight  rail  by 
0.4-0.9 percentage points and freight inland navigation by 0.5-0.9 percentage points).  

The contribution of freight to the overall emissions reductions is more limited than that of passenger 
transport. The bulk of contribution in passenger transport would come from efficiency improvements 
by  2030,  notably  vehicle  efficiency  supported  by  the  deployment  of  recharging/refuelling 
infrastructure  and  measures  providing  incentives  for  public  procurement  and  multimodality.  For 
freight,  improvements in the efficiency  of the transport system, pricing, and faster improvements  in 
fuel efficiency of new heavy goods vehicles would all play an important role. 

Oil products used in transport are projected to decrease by 51 to 67 Mtoe (13-17%) by 2030 compared 
to 2010 levels, thanks to policies supporting the move towards zero-emission vehicles, the uptake of 
low  emission  alternative  energy  for  transport  and  higher  efficiency  of  the  transport  system.  Oil 
dependency  would  decrease  by  8-9  percentage  points  compared 
in  all 
pathways/scenarios.  Low  emission  alternative  energy  for  transport  increases  its  share  in  the  energy 
demand under all decarbonisation pathways/scenarios, providing about 15-17% of energy demand in 
2030  and  around  59-61%  by  2050  (i.e.  due  to  large  scale  electrification  of  the  light  duty  fleet  and 
large scale deployment of advanced renewable fuels).  

to  2010 

levels 

Liquid and gaseous biofuels would represent around 6.2 to 8% of liquid and gaseous transport fuels in 
2030. Advanced renewable fuels would provide about a third of total biofuels by 2030, i.e. 1.9% of all 
transport  fuels  (liquid  and  gaseous)  in  pathways/scenarios  that  do  not  have  specific  incentives  for 
advanced  renewable  fuels.  Where  there  are  specific  incentives,  the  share  of  these  fuels  is  higher.  If 
moderate  incentives  for  advanced  renewable  fuels  are  accompanied  by  a  gradual  decrease  of  food-
based  biofuels  during  2020-2030  and  their  phase-out  by  2050,  advanced  renewable  fuels  would 
achieve almost 50% share in total biofuels and 4% in all liquid and gaseous transport fuels in 2030. A 
scenario which assumes full phase out of food based biofuels by 2030 was also modelled, leading, by 
construction, to 100% share of advanced renewable fuels in total biofuels. In this case the projected 
advanced renewable fuels share in all liquid and gaseous transport fuels is 6.9%, this also being the 
scenario  with  stronger  incentives  for  advanced  biofuels.  By  2050,  advanced  renewable  fuels  would 
represent over 85% of total consumption of biofuels in all decarbonisation pathways/scenarios, with 
scenarios including specific incentives for them showing 99-100% shares.  

83 

 
 
Electrically chargeable vehicles would provide some 11-18% of the light duty vehicle stock by 2030 
(i.e.  about  10-17%  battery  electric  and  plug-in  hybrid  and  1%  fuel  cell  vehicles),  with  their  share 
depending  on  the  stringency  of  the  CO2  standards  and/or  the  intensity  of  R&D  investment  by  the 
industry.  Hybrid  vehicles  would  provide  a  considerable  share  of  the  vehicle  stock  in  all  scenarios 
(around  21%).  By 2050,  electrically  chargeable  vehicles  are  expected  to  represent  about  68-72%  of 
the light duty vehicle stock (i.e. about 63-64% battery electric and plug-in hybrid and 5-8% fuel cell 
vehicles).  This  substantial  increase  is  due  to  gradual  strengthening  of  CO2  standards  for  light  duty 
vehicles,  declining  technology  costs,  increasing  technology  performance  and  the  time  lag  due  to 
gradual renewal of the vehicle stock. Their large scale deployment is made possible by the availability 
of recharging/refuelling infrastructure, providing certainty to consumers towards new technologies. 

The  additional  electricity  demand  from  transport  in  the  decarbonisation  pathways/scenarios  is 
counterbalanced  by  a  reduction  of  demand  in  sectors  where  energy  efficiency  has  still  considerable 
potential  (e.g.  electricity  consumption  of  appliances)  in  the  2030  perspective.  Thus,  in  the  central 
scenarios, total electricity demand is decreasing by 2030, compared to the Reference scenario.  

All scenarios show substantial less air pollution (57-58% for NOx and 53-56% for particulate matter 
by 2030, relative to 2010) driven by gradual replacement of internal combustion engine vehicles with 
electrically  chargeable  vehicles  and,  in  some  pathways/scenarios,  by  support  for  multimodality, 
measures promoting urban policies that curb pollutant emissions and/or higher diesel taxation relative 
to current rates. 

Stakeholders  have  repeatedly  indicated  the  need  for  a  balanced,  stable  and  integrated  approach  to 
decarbonisation. The main messages of the high-level stakeholder conference on 18 June 2015 were 
that further and integrated action is needed in all modes, keeping technology neutrality and ensuring a 
clear signal for investments. In addition, the consultation and stock-taking on the 2011 White Paper 
showed  that  the  aims  and  targets  of  that  strategy  are  still  valid,  but  it  would  benefit  from  smart 
adaptation, in particular to integrate new developments. The analysis carried out provides insights on 
the necessary tools to do this. 

84 

 
 
 
ANNEX  I:  Historical  developments  in  transport  activity,  energy  use  and 
emissions 

Transport and mobility 

Transport is essential for the functioning of the single market, forming the heart of the supply chain 
and  enabling  the  free  movement  of  goods  and  people.  Market  integration,  economic  growth  and 
transport  activity  are  strongly  related.  In  the  EU,  efficient  transport  connections  have  facilitated  the 
creation  and  deepening  of  the  internal  market.  Transport  infrastructure  investments  boost  economic 
growth, create wealth, enhance trade, geographical accessibility and the mobility of people. They are 
a highly effective engine of job creation.  

Transport is a key ingredient for a high quality of life, making places accessible and bringing people 
together. About 13% of every household’s budget is spent on transport.  

Transport  sector  is  a  growing  sector:  from  1995  to  2013,  intra-EU169  freight  transport,  measured  in 
tonne-kilometres,  has  increased  by  1.1%  per  year  on  average  while  the  average  annual  growth  of 
intra-EU passenger transport, measured  in passenger-kilometres, was about 1%. This compares with 
an average GDP growth over the same period of 1.7%.170  

Besides  its  role  as  a  facilitator,  the  transport  industry  in  itself  represents  an  important  part  of  the 
economy: in the EU it directly employs around 11 million people and accounts for about 5% of the 
gross value added. It is estimated that the transport industry at large accounts for 7% of the European 
gross  value  added  and  for  7.06%  of  total  employment  in  the  EU,  corresponding  to  more  than  15 
million  people  in  absolute  terms  (2014  figures).171  Many  European  companies  are  world  leaders  in 
infrastructure, logistics, traffic management systems and manufacturing of transport equipment. 

Transport and energy  

However,  the  growth  of  transport  activity  raises  concerns  for  its  environmental  sustainability.  EU 
transport  was  responsible  for  33%  of  final  energy  consumption  (353  Mtoe)  in  2014,  while  final 
energy  consumption  by  households  and  industry  represented  respectively  25%  and  26%.172  Adding 
maritime bunker fuels, energy used in transport totalled 394 Mtoe. Figure 21 provides an overview of 
total energy demand by mode of transport in the EU, covering domestic, intra-EU and intercontinental 
traffic.  

Final  energy  consumption  in  transport173  decreased  by  -5%  between  2005  and  2014.  During  2005-
2007,  final  energy  consumption  increased  by  4%  but  has  been  decreasing  quite  rapidly  since  2007            
(-8% for 2007-2014). About 40% of the post-2007 reduction is estimated to be due to the economic 
crisis,  with  the  stabilisation  of  passenger  traffic  and  the  decrease  in  freight  traffic.  However,  the 
remaining 60% mostly originates from improvements in energy efficiency of passenger cars. Energy 

169  Intra-EU transport considers both national and international transport between EU Member States.  
170  Source: DG MOVE “EU transport in figures - Statistical pocketbook 2015” 
171  5.07% of the gross value added corresponds to transport services (including postal and courier activities) and the rest to 
transport equipment manufacturing; about 11 million jobs correspond to transport services and more than 4 million to 
transport  equipment  manufacturing.  Gross  value  added  statistics  are  estimates  based  on  Eurostat  National  Accounts, 
calculated according to the new ESA2010 methodology. Employment values are based on Eurostat Labour Force Survey 
(15-64 years). 

172  Households and services together represent 38% of final energy consumption.  
173  Excluding pipeline transport and non-specified. 

85 

 
 
                                                            
efficiency  improvements  for  road  freight  have  slowed  down  after  2007,  driven  by  the  fall  in  traffic 
and the less efficient operation of the vehicle fleet as shown by the lower load factors.174 

Figure 21: Share of transport energy demand by mode in 2014 (%) 

Source: Eurostat 

Findings  from  the  Odyssee-Mure  project  show  that  the  majority  of  transport  energy  efficiency 
measures  undertaken  at  Member  State  level  concern  the  passenger  modes.  The  energy  efficiency 
improvements  seem  to  be  mainly  related  to  three  sets  of  measures,  i.e.  measures  concerning  the 
energy and CO2 standards for new cars, measures addressing the renewal of car fleets, and measures 
addressing traffic management.175 In particular, the mandatory emission reduction targets for new cars 
and vans have led to significant improvements in the fuel economy of light duty vehicles sold on the 
European  market.  For  example,  the  average  emissions  level  of  a  new  car  sold  in  2014  was  123.4 
gCO2/km, below the 2015 target of 130 gCO2/km, according to data from the European Environment 
Agency (EEA).176 Provisional data for 2015 indicate 119.6 gCO2/km.177 

As a result of both EU and Member State level measures, the average specific fuel consumption of the 
EU  passenger  cars  fleet  went  down  from  about  7.4  l/100km  in  2005  to  about  6.8  l/100km  in  2013 
according to the findings of the Odyssee-Mure project (see Figure 22). 

For  road  freight,  significant  energy  efficiency  improvements  took  place  between  2000  and  2007, 
driven by an increase in the efficiency of vehicles and more efficient management of freight transport 
(e.g.  higher  load  factors  and  a  shift  to  larger  trucks).  However,  since  2008  despite  continuous 
improvements in vehicle efficiency, empty running increased and trucks were less loaded.178  

174  Odyssee-Mure  (2015):  Trends  and  policies  for  energy  savings  and  emissions 

in 

transport  (available  at: 

http://www.odyssee-mure.eu/publications/br/energy-efficiency-in-transport.html) 

175  Odyssee  -  Mure  report  on  Trends  and  policies  for  energy  savings  and  emissions  in  transport,  available  at: 

http://www.odyssee-mure.eu/publications/br/energy-efficiency-in-transport.html  

176  An  average  van  sold  in  the  EU  in  2014  emitted  169.1  gCO2/km.  This  is  below  the  2017  target,  which  was  already 

reached four years ahead of schedule. 

177  Source: http://ec.europa.eu/clima/news/articles/news_2016041401_en.htm 
178  Odyssee  -  Mure  report  on  Trends  and  policies  for  energy  savings  and  emissions  in  transport,  available  at: 

http://www.odyssee-mure.eu/publications/br/energy-efficiency-in-transport.html  

86 

Road73.4%Aviation12.6%Inland navigation1.1%Other0.8%Maritime10.6%Rail1.6% 
 
 
 
                                                            
Figure 22: Specific consumption of passenger cars (EU fleet average) 

Source: Odyssee-Mure 

Fuel use in transport 

The  currently  dominant  transport  technologies  are  tightly  linked  to  liquid  fossil  fuels.  Liquid  fuels, 
with their high energy density, are particularly suited for mobile applications and have displaced most 
alternatives. Today, transport relies on oil for 94% of its energy needs (see Figure 23). Europe imports 
around  87%  of  its  crude  oil  and  oil  products  from  abroad,  with  a  crude  oil  import  bill  estimated  at 
around €187 billion in 2015179, and additional costs to the environment.  

Figure 23: Share of transport energy demand by energy carrier in 2014 (%) 

Source: Eurostat 

According to Eurostat, most energy consumed in air and waterborne transport was petroleum-based in 
2014. While air transport  relies only on kerosene, inland navigation  uses few  types of fuels, but all 
petroleum based. Road transport depended on oil products for 95% of its energy use and rail transport 
for 33%. Transport dependence on oil not only needs to be reduced, but the energy sources also need 
to be diversified.  

179  For confidentiality reasons, the 2015 figures do not include the Czech Republic. Source: 

https://ec.europa.eu/energy/en/statistics/eu-crude-oil-imports 

87 

 Diesel51.3%Fuel oil9.0%Natural gas0.7%Gasoline20.0%Biofuels3.6%Kerosene12.6%Electricity1.4%LPG1.5% 
 
 
 
                                                            
Figure 24: Share of transport energy demand by energy carrier in 2014, by mode (%) 

Source: Eurostat 
Note: Biofuels also include biomethane for road transport. Inland navigation covers inland waterways and national maritime. 

Air  transport  is  most  dependent  on  oil,  with  the  main  alternative  energy  source  being  biofuels.  For 
road and waterborne applications some possible alternatives exist, such as biofuels and electricity and 
possibly for a transition period other fossil resources (e.g. LNG and GTL). However, in the long term, 
most fuels would need to be of non-fossil origin in order to secure a reduction in GHG emissions. The 
use of LNG in lorries and shipping can reduce emissions of various air pollutants (e.g. NOx) and in 
the  case  of  shipping,  can  allow  the  sector  to  meet  the  requirements  for  decreasing  the  sulphur  and 
nitrogen content in marine fuels used in the Emission Control Areas. In both cases the use of LNG can 
reduce  greenhouse  gas  emissions,  in  particular  when  blended  with  liquid  biomethane,  provided 
methane emissions are minimised. 

For international maritime shipping, LNG can play an important role as it is available in considerable 
amounts. With the exception of Norway, the take-up of LNG as ship fuel in Europe is still in an early 
stage,  and  key  stakeholders  typically  identify  three  main  barriers:  the  lack  of  adequate  bunker 

88 

Diesel65.6%Natural gas0.5%Gasoline27.0%Biofuels4.9%Electricity0.0%LPG1.9%RoadDiesel32.9%Biofuels0.5%Electricity66.4%RailDiesel69.4%Gasoline7.8%Biofuels0.1%Fuel oil22.6%Inland navigation 
 
 
 
 
 
facilities  for  LNG,  the  gaps  in  the  legislative  or  regulatory  framework,  and  the  lack  of  harmonized 
standards.180  Most  popular  alternative  is  marine  gas  oil  (MGO),  but  there  is  a  variety  of  other 
alternative fuels including Ethyl/Methyl alcohols, some biofuels and hydrogen. Mainly for short sea 
shipping there is also some potential in hybridisation and electrification.  

For  road,  many  energy  sources  could  be  used  for  different  types  of  vehicles,  including  vehicles 
powered by internal combustion engines, (plug-in) hybrids and electric vehicles (powered by batteries 
or fuel cells). For rail, the main alternative energy sources are electricity and biomass.181 

Renewable energy in the transport sector 

According  to  Eurostat  data,  the  EU  share  of  renewable  energy  in  transport  reached  5.9%  in  2014. 
Biodiesel  remains  the  most  widely  used  form  of  renewable  energy  in  transport  with  11.3  Mtoe  in 
2014, followed by bioethanol with 2.7 Mtoe.182  

A  consumption  of  1,549  ktoe  of  renewable  electricity  in  transport  was  reported  for  2014,  the  vast 
majority of it being consumed in non-road transport modes (i.e. rail).  

EU  biofuel  consumption  increased  to  14.1  Mtoe  in  2014,  but  still  being  below  the  peak  levels 
registered in 2012. Consumption of biofuels that meet the EU sustainability criteria rose to 13.2 Mtoe, 
its highest level so far, representing 92.8% of EU biofuel consumption. The main difference between 
certified and not-certified biofuels is explained by Spain's failure to implement the legal framework in 
2014 that would have officially certified its biofuel consumption. 

The  production  of  biofuels  from  non-land  using  feedstocks  in  the  EU  is  increasing,  the  majority  of 
which is produced from used cooking oil or waste animal fat. The share of food crop-based biofuels in 
the  EU  market  is  decreasing.  However,  the  biofuel  industry  argues  that  double-counting  provisions 
have so far only assisted the deployment of inexpensive conversion of used oils and waste fats. 

A  number  of  EU  production  facilities  have  already  been  producing  advanced  biofuels  since  2009, 
often  in  conjunction  with  other  bio-based  products.  Despite  the  important  and  continuous  progress 
during the past 5 years, including the opening of commercial production facilities, the development of 
large-scale production capacity for advanced biofuels in the EU is still slow. It has been hampered by 
technological  challenges  and  feedstock  availability.  The  most  viable  business  model  will  in  most 
cases be based on an integrated bio-refinery approach that produces both biofuels and a range of other 
bio-based products. 

Greenhouse gas emissions from transport  

Emissions  in  transport  did  not  show  the  same  decline  as  those  in  other  sectors  (see  Figure  25). 
Whereas  in  industry  emissions  started  to  decline  as  of  the  1990s  and  in  power  generation  they  are 
below 1990 levels, in transport they kept increasing until 2007 (+32% for 1990-2007) and only since 
they  have  reduced  as  a  result  of  past  high  oil  prices,  increased  road  vehicle  efficiency  and  slower 
growth  in  activity  as  a  result  of  the  crisis.  In  2014,  GHG  emissions  from  transport  excluding 
international maritime represented about 23% of the total emissions183, compared to 15% in 1990 - the 

180   Source: http://ec.europa.eu/transport/modes/maritime/studies/doc/2015-12-lng-lot1.pdf 
181   Source: http://ec.europa.eu/transport/themes/sustainable/studies/doc/2015-07-alter-fuels-transport-syst-in-eu.pdf 
182  According to Art. 17 (1) of the Renewables Directive, non-certified biofuels cannot be counted towards national and EU 

renewable energy targets. 

183  Including  international  maritime,  transport  provides  about  25%  of  the  total  greenhouse  gas  emissions.  International 

maritime is outside the scope of the targets established in the climate and energy packages for 2020 and 2030.   

89 

 
 
 
                                                            
base  year  for  measuring  progress  in  EU  climate  action,  and  20%  in  2000.  Transport  is  therefore  a 
sector with a significant role in energy and climate policy. 

Figure 25: Evolution of greenhouse gas emissions by sector (1990=100), EU28 

Note: * Transport includes international aviation but excludes international maritime; ** Other include fugitive emissions from fuels, waste 
management and indirect CO2 emissions 
Source: EEA 

Road  is  by  far  the  main  emitter  of  GHG  from  transport  (see  Figure  26).  In  2014,  it  accounted  for 
72.8%  of  all  GHG  emissions  from  transport.  Maritime  and  air  transport  follow  with  shares  of  13% 
and 13.1% respectively. Rail transport contributed only 0.6% of GHG emissions.184  

Figure 26: Greenhouse gas emissions from transport by mode in 2013185 

Source: EEA 

Historical  data  showing  the  split  between  the  urban,  inter-urban  and  intercontinental  transport 
emissions  is  not  available  but  model  estimates  indicate  that  about  23%  of  transport  CO2  emissions 
originate from urban transport in 2015, 53% from inter-urban and 24% from intercontinental transport 
(see Figure 27). 

184  Emissions from rail transport do not include emissions from producing the electricity used in rail.  
185  The shares of civil aviation and navigation include international bunkers. 

90 

40506070809010011012013014019901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320141990=100Energy IndustriesIndustryResidential and servicesAgricultureTransport*Other**TotalRoad transport72.8%Railways0.6%Navigation13.0%Other0.5%Civil aviation13.1% 
 
 
 
 
                                                            
Figure 27: Shares in EU transport CO2 emissions in 2015 (model estimates) 

Source: EU Reference scenario 2016 
Note: Estimates based on the PRIMES-TREMOVE model developed by ICCS- E3M-Lab 

Transport is responsible for emissions both in the EU Emissions Trading System (EU ETS) as well as 
sectors outside the EU ETS. 

Direct emissions from aviation account for about 3% of the EU’s total greenhouse gas emissions. The 
large majority of these emissions come from international flights. In 2008, the EU decided to include 
aviation  activities  in  the  EU  ETS.  These  emissions  now  form  part  of  the  EU's  internal  20%  GHG 
emission reduction target for 2020.  

Furthermore, and not often realised, most of the electricity consumed by transport is covered by the 
EU ETS  -  at  present this is  mainly rail but includes also trams,  metro  and trolleys. Around 66% of 
energy use in rail is electricity-based.  

Figure 28: Domestic transport emissions and emissions from international aviation, EU28 

Source: EEA 

Transport  is  responsible  for  around  a  third  of  all  emissions  outside  the  ETS.  The  most  important 
sector  by  far  is  road  transport,  responsible  for  around  94%  of  these  non-ETS  transport  emissions. 
Almost three quarters of road transport emissions are due to cars and vans, and a quarter due to heavy 
duty vehicles.  

91 

Urban travel18%Inter-urban travel38%Inter-continental travel9%Inter-continental freight15%Inter-urban freight15%Urban freight5%02004006008001,0001,2001990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014Mt of CO2-equivalentDomestic transport emissionsInternational aviation 
 
 
 
 
 
Recent events have led some to question the reliability of emissions estimates from cars, due to the 
divergence  between  emissions  as  measured  in  the  regulatory  test-cycle  and  real  driving  emissions. 
However, total emissions from road transport are well known, as these are estimated  based  on total 
fuel  sold.  Projections  about  the  future  can  be  affected  by  the  uncertain  relationship  of  test-cycle 
emissions  to  real-world  emissions.  In  general,  projections  do  take  into  account  that  a  test-cycle 
divergence exists. 

Emissions  from  maritime  transport  related  to  the  EU  (ship  voyages  from  and  to  EU  ports)  were 
estimated at about 195 Mt CO2 for 2005.186 After a decrease between 2008 and 2010 as consequence 
of the economic crises and the speed reductions (slow steaming), the emissions have been estimated 
by TNO187 to have remained at a more or less stable level by 2012 at 190 Mt CO2. However, maritime 
bunker fuels emissions based on fuel sold show a steep decline of 25% between 2008 and 2014, with 
emissions still being 16% lower by 2014 relative to 2005.188 

Pollutant emissions from transport 

Whilst significant progress has been made since 1990 in reducing the emissions of air pollutants from 
transport  despite  the  growth  in  activity  within  the  sector,  transport  still  makes  an  important 
contribution  to  air  pollution.189  Transport  is  responsible  for  more  than  half  of  NOx emissions,  and 
contributes  significantly  (around  15 %  or  more)  to  the  total  emissions  of  other  pollutants  (PM10, 
PM2.5, SOx and CO). 

The  range  of  policy  measures  undertaken  in  Europe  to  specifically  address  issues  concerning  air 
pollution  has  increased  since  1990.  Local  and  regional  air  quality  management  plans  including 
initiatives such as low-emission zones in cities or congestion charges were set up in areas of high air 
pollution from transport. The different legal mechanisms for air quality management comprise: limit 
or target values for ambient concentrations of pollutants; limits on total emissions; and, for traffic in 
particular,  regulation  of  emissions  from  the  sector  either  by  setting  (EURO)  emissions  standards  or 
fuel quality requirements. 

Reductions achieved in the road transport sector are responsible  for the vast  majority of the overall 
reductions  in  transport.  Nitrogen  oxides  (NOx)  emissions  from  road  transport  decreased  by  56% 
during  1990-2013  and  particulate  matter  (PM2.5)  emissions  by  50%.  Nevertheless,  road  transport 
represented  the  largest  source  of  NOx  emissions  in  2013,  accounting  for  39%  of  total  EU28 
emissions,  and  an  important  source  of  PM2.5  emissions  (13%).190  While  emissions  from  road 
transport  are  mostly  exhaust  emissions  arising  from  fuel  combustion,  non-exhaust  releases  also 
contribute (primary PM from tyre- and brake-wear, and road abrasion). The relative importance of the 
non-exhaust emissions has increased, as the introduction of vehicle particulate abatement technologies 
has reduced exhaust emissions. 

186  Ricardo-AEA (2013), Support for the impact assessment of a proposal to address maritime transport greenhouse gas 
emissions, available at: http://ec.europa.eu/clima/policies/transport/shipping/docs/ghg_maritime_report_en.pdf 
187  TNO (2015), GHG emission reduction potential of EU-related maritime transport and on its impacts, available at: 

http://ec.europa.eu/clima/policies/transport/shipping/docs/report_ghg_reduction_potential_en.pdf 

188  Source: EEA 
189  EEA, http://www.eea.europa.eu/data-and-maps/indicators/transport-emissions-of-air-pollutants-8/transport-emissions-of-

air-pollutants-2, accessed 11 Nov 2015 

190  EEA  (2015),  European  Union  emission  inventory  report  1990–2013  under  the  UNECE  Convention  on  Long-range 

Transboundary Air Pollution (LRTAP), EEA Technical Report No 8/2015. 

92 

 
 
                                                            
In contrast, international aviation and shipping are the only transport sectors where emissions of air 
pollutants  have  actually  increased  since  1990  (except  for  SOx and  PM  from  shipping).191  As 
emissions  of  pollutants  from  land-based  sources  decreases,  there  is  a  growing  awareness  of  the 
increasingly important role of, in particular, the shipping sector. 

Costs to society for local pollution are still very high at about 0.4% of GDP, according to a study by 
CE Delft192, and new evidence from OECD even shows much higher numbers (up to 6 times higher). 
Air quality in cities remains a fundamental challenge for public health.   

Overall external costs of transport 

External  costs  amount  altogether  to  about  4%  of  GDP  (lower  estimates;  the  most  important 
components  being  accidents,  congestion,  air  pollution,  climate  change  and  noise).193  The  various 
modes  of  transport  are  responsible  for  externalities  to  a  different  extent.  Most  of  the  negative 
externalities  come  from  road  transport  (climate  change,  local  air  and  noise  pollution,  accidents  and 
congestion). Aviation and maritime contribute to externalities related to climate change and pollution. 
Rail noise is a problem in certain parts of Europe; aviation also contributes to noise externality.  

191  3rd IMO Greenhouse Gas Study 2014, available at: 

http://www.imo.org/en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/Greenhouse-Gas-Studies-
2014.aspx 

192  CE Delft et al. (2011), External Costs of Transport in Europe - Update Study for 2008, available at: 

http://www.cedelft.eu/publicatie/external_costs_of_transport_in_europe/1258 

193  CE Delft et al. (2011), External Costs of Transport in Europe - Update Study for 2008, available at: 

http://www.cedelft.eu/publicatie/external_costs_of_transport_in_europe/1258 

93 

 
 
                                                            
ANNEX II: Analytical work on low-emission mobility 

Roadmap for moving to a competitive low carbon economy in 2050  

The  Roadmap  to  a  low  carbon  economy  showed  that  the  80%  domestic  reduction  for  the  overall 
economy would be reached via different emission cuts in the various sectors. Transport would need to 
contribute  with  a  60%  reduction,  as  a  reflection  of  the  fact  that  substituting  oil  is  more  costly  in 
transport than in other sectors. The Roadmap concluded that the transition to a low-carbon society is 
feasible  and  affordable,  but  requires  innovation  and  investments.  To  make  the  transition,  the  EU 
would  need  to  invest  an  additional  €270  billion  (or on  average  1.5%  of  its  GDP  annually)  over  the 
next 4 decades. 

Energy Roadmap 2050  

The  Energy  Roadmap  2050  set  out  four  main  routes  to  a  more  sustainable,  competitive  and  secure 
energy system in 2050: energy efficiency, renewable energy, nuclear energy and carbon capture and 
storage. It combined these routes in different ways to create and analyse seven possible scenarios for 
2050. 

All  scenarios  showed  that  electricity  would  have  to  play  a  much  greater  role  than  now  (almost 
doubling  its  share  in  final  energy  demand  to  36-39%  in  2050)  and  would  have  to  contribute  to  the 
decarbonisation  of  transport  and  heating/cooling  sectors.  Electricity  could  provide  around  65%  of 
energy  demand  by  passenger  cars  and  light  commercial  vehicles  by  2050.  Efficient  vehicles  and 
incentives  for  behavioural  change  are  also  required.  In  transport,  a  mix  of  several  alternative  fuels 
will  be  needed  to  replace  oil,  with  specific  requirements  for  different  modes.  Biofuels  may  be  the 
main  option  for  aviation,  long-distance  road  transport,  and  rail  where  it  cannot  be  electrified. 
However,  oil  is  likely  to  remain  in  the  energy  mix  even  in  2050 and  will  mainly  fuel  parts  of  long 
distance  passenger  and  freight  transport.  The  Energy  Roadmap  also  showed  that  an  increasingly 
important feature of the required technology shifts for the decarbonisation of the EU economy is the 
use of information and communication technologies (ICT) in energy and transport and for smart urban 
applications.194  

2011 White Paper on Transport  

The 2011 White Paper on Transport defined a long-term vision until 2050 for a transport sector that 
continues to serve the needs of the economy and of the citizens while meeting future constraints: oil 
scarcity,  growing  congestion195  and  the  need  to  cut  CO2  and  pollutant  emissions  and  improve  air 
quality  particularly  in  cities.  To  this  aim,  the  White  Paper  put  forward  four  broad  areas  of 
intervention: internal market, innovation, infrastructure, international aspects. For each of these areas, 
a  ten-year  programme  was  defined  with  40  specific  action  points,  containing  a  handful  of  specific 
initiatives.196  The  strategy  set  in  the  White  Paper  is  to  a  substantial  degree  based  on  low  emission 

194   This is leading to the convergence of industrial value chains for smart urban infrastructure and applications which need 
to  be  encouraged  to  secure  industrial  leadership.  The  digital  infrastructure  that  will  make  the  grid  smart  will  also 
require support at EU level by standardisation and research and development in ICT. 

195   Congestion  has  a  negative  impact  on  the  environment  since  it  results  in  increased  air  and  noise  pollution.  It  also 
generates higher fuel consumption. The time wasted in traffic jams prevents the benefits of agglomeration effects to 
fully materialise. The costs of congestion have a negative impact on productivity, competiveness of the economy and 
quality of life. 

196   Typically,  the  proposed  initiatives  within  each  point  are  of  different  nature,  different  time  horizon  and  different 

economic/political relevance. 

94 

 
 
                                                            
fuels,  energy  efficiency,  better  multimodality  of  transport  and  new  technologies  that  should  lead  to 
optimised journeys. 

The  impact  assessment  accompanying  the  2011  White  Paper  identified  seven  policy  areas  in  which 
concrete  policy  measures  could  have  a  key  role  in  stimulating  the  expected  shift  of  the  transport 
system to another paradigm (i.e. pricing, taxation, research and innovation, efficiency standards and 
flanking  measures,  internal  market,  infrastructure  and  transport  planning).  The  impact  assessment 
showed  that  isolated  intervention  in  either  one  of  the  seven  policy  areas  would  not  be  capable  of 
tackling at the same time and in a satisfactory way all the various problem drivers and all the elements 
of  the  specific  policy  objective  (i.e.  reducing  GHG  emissions,  decreasing  the  oil  dependency  ratio, 
limiting the growth of congestion).  

Following  these  considerations,  three  policy  options  have  been  designed  to  reach  the  60%  CO2 
emissions reduction target by 2050. All three options envisaged action in all seven policy areas and 
had  in  common  a  certain  number  of  initiatives.  What  distinguished  them  is  the  intensity  of 
intervention  that,  depending  on  the  option,  was  higher  in  some  specific  field  and  lower  in  others. 
More  specifically,  one  option  was  designed  to  show  the  effect  of  policies  that  emphasise  the  rapid 
deployment  of  new  powertrains197,  one  option  focused  on  the  effect  of  policies  that  rely  less  on 
performance standards and on active technological deployment and more on managing mobility and 
on carbon pricing198, and finally one option was designed as an intermediate approach.199 The impact 
assessment  concluded  that  the  intermediate  approach  is  the  preferred  option  since  it  offers  the 
advantage of greater balance between system improvements and technological development. It would 
avoid the creation of a pervasive command and control approach to mobility, but it would not refrain 
from  eliminating  price  distortions  by  internalising  external  cost  of  transport  and  by  introducing 
smarter taxation.200  

The modelling results indicated that energy savings in the order of 45 to 90 Mtoe would be achieved 
by 2030 and 160 to 180 Mtoe by 2050 relative to the “no new policy” option. Over 55% by 2030 and 
60% by 2050 of these energy savings originate from passenger transport.  

197   This policy option was designed to show the effect of policies that emphasise the rapid deployment of new powertrains, 
by  imposing  very  stringent  CO2  standards  on  new  vehicles  and  by  accompanying  them  with  appropriate  innovation 
policies putting in place the necessary framework conditions.  

198   This policy option was designed to show the effect of policies that rely less on performance standards and on active 
technological deployment and more on managing mobility and on carbon pricing. The necessary reduction in emission 
is  achieved  –  in  addition  to  the  full  pricing  of  externalities  and  to  the  elimination  of  tax  distortions  –  by  letting  the 
carbon price rise by the necessary amount. This could be taken to represent the effect of high carbon taxation or of the 
introduction  of  a  transport  specific  cap  and  trade  system.  In  case  of  very  high  carbon  price,  the  effect  would  be 
equivalent to restrictions in “fossil fuel” mobility and forced modal shift to clean modes.  

199   This policy option represented an intermediate approach. It has values for CO2 standards and technology deployment in 
between those of previous two options. It has full pricing of externalities and elimination of tax distortions as in the 
option  focused  more  on  managing  mobility  and  on  carbon  pricing,  but  the  additional  carbon  price  element  is  only 
applied  in  the  urban  context  in  the  form  of  a  shadow  price  acting  as  a  proxy  for  a  wide-range  of  possible  demand 
management measures. 

200   The option focused on policies that emphasise the rapid deployment of new powertrains had been discarded, despite 
being the less expensive option to reach the 60% target. This is because it incorporates a high degree of uncertainty 
associated  with  the  technological  component.  It  also  contemplates  delayed  or  weak  action  on  pricing,  which  would 
compromise the possibility of bringing about the structural change that undistorted price signals can determine. Finally, 
it  would  not  be  sufficiently  effective  in  reducing  the  cost  of  congestion  to  the  society  in  comparison  with  the  other 
options. The option focused on the effect of policies that rely more on managing mobility and on carbon pricing has not 
been  formally  discarded.  This  is  because  all  policy  options  include  a  technology  component;  that  is  low  in  this 
particular  policy  option.  In  this  respect,  if  the  technology  does  not  deliver  as  it  is  projected  in  the  preferred  policy 
option, an approach closer to that in the option focused more on managing mobility and on carbon pricing would be 
necessary in order to achieve the 60% target by 2050. 

95 

 
 
                                                            
Final  consumption  of  oil  in  transport  would  decrease  by  12  to  23%  by  2030  and  by  about  70%  by 
2050, relative to the “no new policy” option. In the long term, this decline is compensated to certain 
extent by the rise in the electricity demand by the road and rail transport and the increased demand for 
biofuels, especially in aviation, inland navigation and long distance road freight, where electrification 
is  not  or  less  an  option.  Biofuels  would  represent  less  than  1%  of  energy  demand  in  aviation  and 
inland navigation by 2030 but reach about 40% of the energy consumption of the two modes by 2050. 
For long distance road freight, biofuels would provide about 11% of energy demand by 2030 and 37 
to 41% by 2050, depending on the policy option. The role of biofuels in energy demand by passenger 
cars  and  light  commercial  vehicles  would  be  more  limited,  at  around  10%  in  2030  and  ranging 
between  15  and  25%  by  2050.  Electricity  would  provide  about  1  to  4%  of  the  energy  demand  by 
passenger cars and light commercial vehicles by 2030 and 20 to 60% by 2050.  

As  already  explained,  all  policy  options  have  been  designed  to  reach  the  same  60%  CO2  emissions 
reduction  target  by  2050  relative  to  1990.  However,  the  time  profile  of  emissions  reduction  is 
different due to the various policy measures (and their timing) covered by each policy option. Thus, 
relative to the “no new policy” option, transport emissions would go down by 12 to 23% by 2030 and 
by about 70% by 2050.  

All policy options would lead to reductions in nitrogen oxides emissions of about 7 to 21% by 2030 
(40 to 50% by 2050) relative to the “no new policy” option; particulate matter emissions would be cut 
by 10 to 15% by 2030 (50 to 55% by 2050). In addition, external costs related to noise would be 4 to 
18% lower by 2030 (32 to 46% lower by 2050) relative to the “no new policy” option. External costs 
related to congestion  would be between +1% to  -16% by 2030 (-3 to -26% by 2050) relative to the 
“no  new  policy”  option.  In  particular,  in  the  option  designed  to  show  the  effect  of  policies  that 
emphasise  the  rapid  deployment  of  new  powertrains  the  pricing  signals  are  not  sufficient  to  shift 
traffic  away  from  road  and  congestion  continues  to  pose  a  large  burden  on  the  competitiveness  of 
European businesses and on the quality of life. 

Active  modal shift policies, which are projected  to reduce road transport activity levels, would  also 
contribute to improved road safety and to the reduction of death and injury, i.e. 0 to 4% reduction in 
external costs of accidents by 2030 and 2 to 27% cut by 2050 relative to the “no new policy” option. 
This improvement in road safety would benefit directly low income groups who experience a higher 
level  of  death  and  injury  on  roads  than  other  groups.  The  large  scale  deployment  of  Intelligent 
Transport System is also expected to have positive effects on safety. The impacts on safety are lowest 
in  the  option  designed  to  show  the  effect  of  policies  that  emphasise  the  rapid  deployment  of  new 
powertrains. 

Overall, the modelling results indicated that, compared to the “no new policy” option, the additional 
total  costs  for  the  transport  sector  would  be  between  €640  billion  and  €1,193  billion  by  2050,  and 
€1,012 billion in the intermediate approach (i.e. preferred policy option)201, equivalent to an additional 
average  yearly  total  costs  relative  to  “no  new  policy”  option  of  0.2  to  0.4%  of  GDP  (0.3%  for  the 
intermediate approach). The calculation of total costs – and therefore the comparison between options 
– does not include research and development costs and infrastructure costs referred to the upgrade and 
possible extension of the transport network.202  

201  The present value of the additional costs corresponding to each policy option has been calculated using a discount rate of 

4%. 

202  Moreover, they exclude transfer payments to the budget (i.e. excise duties, value added taxes, registration taxes and other 
ownership taxes, charges, payments for CO2 allowances in aviation under the EU Emission Trading Scheme, etc.), which 

96 

 
 
                                                            
 
In general terms, the modelling exercise showed that several policy instruments need to be used to put 
the transport system on a sustainable path, lowering CO2 emissions, oil dependency and congestion. It 
also showed that policy action has to be very ambitious to reach the objective.  

2030 Climate and Energy Policy Framework  

Although no sectoral target is included for transport, the impact assessment for the 2030 Climate and 
Energy policy framework showed that a cost-effective contribution from transport to the achievement 
of the 2030 targets, drawing on measures to be adopted by 2020, requires transport emissions being 
reduced by 17-20% below 2005 levels. This range is consistent with economy-wide energy efficiency 
improvements in the range of 27 to 30%. 

Transport fuels in the EU ETS 

In  its  conclusions  on  the  2030  Climate  and  Energy  Framework,  the  European  Council  recalled  the 
possibility  for  a  Member  State  to  including  its  transport  sector  in  the  EU  ETS,  under  current 
legislation, and on a voluntary basis. Some stakeholders have called for including all road fuels in the 
EU under the EU ETS, while others have fiercely opposed this. The Impact Assessment for the 2030 
Climate  and  Energy  Framework  discusses  ETS  scope  expansion  in  chapter  7.8,  as  part  of  a  mix  of 
complementary policies.203 This section describes how road fuels inclusion would work technically, as 
well as the likely impacts of an inclusion.  

Technical aspects of road fuels inclusion 

In order to include the transport sector in the EU ETS, tax warehouse keepers would be required to 
surrender allowances for fuel sold to the transport sector. Tax warehouse keepers release fuels for sale 
on the market through excise duty points, at which point energy taxes become payable.  

Including the road fuels sector through entities further downstream, such as individual vehicle owners, 
would likely put a large administrative burden on society, due to the large number of participants. At 
further  upstream  entities,  such  as  refineries,  it  would  be  difficult  to  define  the  boundaries  of  the 
inclusion,  as  it  is  unclear  at  that  stage  to  which  sector  the  fuels  or  petrochemical  feedstocks  are 
destined.  

As tax warehouse keepers already register transport fuel flows, the same information could be used 
for EU ETS inclusion. In many Member States, tax warehouse keepers register the amount of biofuels 
as well. This means that the additional administrative burden would reflect the additional associated 
activities in relation to participation in the monitoring, reporting and verification under the EU ETS, 
for  the  increased  number  of  regulated  entities.  For  fiscal  reasons,  monitoring  requirements  on  tax 
warehouse keepers are strict, limiting the risks of fraud. 

But  while  technically  feasible,  full  inclusion  of  road  fuels  in  the  EU  ETS  would  be  a  considerable 
undertaking. There are between 5,000 and 10,000 tax warehouse keepers for energy products in the 
EU, which means that the upper bound of this range represents a number similar to the around 11,000 
stationary installations now covered by the EU ETS. It would be by far the largest scope expansion of 
EU ETS yet undertaken. Furthermore, while all tax warehouse keepers have administrative systems in 
place  to  track  fuels,  these  systems  are  adapted  to  the  needs  of  the  taxation  systems  of  different 
Member States. They may not currently distinguish fuels by CO2 content to the granularity necessary. 

are  additional  costs  for  the  user,  but  a  transfer  from  the  point  of  view  of  society.  However,  they  include  the  welfare 
losses due to limitation in mobility (users’ disutility), which are reflected through the compensating variation. 

203  SWD(2014) 15 final 

97 

 
 
                                                                                                                                                                                         
Some  level  of  harmonisation  of  regulation  for  tax  warehouse  keepers  would  therefore  be  required, 
especially if some subsectors (such as fuels for agricultural machinery) are exempted from EU ETS 
inclusion. Finally, a  solution  would need to be found  to the issue of natural gas in transport,  which 
does not pass through tax warehouse keepers.  

Solving  and  implementing  such  issues  would  take  time  and  require  a  broad  political  will  and 
cooperation  from  Member  States.  For  this  reason,  the  EU  wide  inclusion  of  road  fuels  in  EU  ETS 
would be difficult in the short term. The EU ETS allows for opt-in of sectors at individual Member 
State level, and this could thus in principle also be done for transport. Such a voluntary approach at a 
smaller scale was mentioned by the European Council in its October 2014 Conclusion as a possible 
option. It would have the benefit that it would concern Member States already willing to adapt their 
legislation.  Furthermore,  technical  learning  could  take  place  without  posing  significant  risks  to  the 
integrity of the carbon market, as it's likely that only a small subset of total transport emissions would 
be involved.  

Environmental impacts 

The economic incentive provided by the carbon price would incentivise a fuel shift to lower carbon 
fuels, as well as more efficient transport. As a purely indicative example, we can use an estimate from 
the literature that the long-run price elasticity of fuel consumption by cars (as a function of elasticities 
of vehicle ownership, vehicle kilometres and fuel efficiency) is around -0.6 to -0.8. This suggests that 
an additional carbon price of around 10-40 €/tCO2, could, by raising retail fuel prices in the EU by 
around 2-7%, lower emissions by up to ~5% in the long term. In the short to medium term the effect 
could be more limited due to the low price elasticity of fuel consumption.  

In  other  words,  adding  a  carbon  price  to  fuels  would  indeed  reduce  CO2  emissions  in  the  road 
transport sector to some extent. It would also reduce air pollution. However, a relatively limited price 
incentive  on  fuels  is  insufficient  on  its  own  to  significantly  improve  vehicle  efficiency  or  drive 
technological change. Various market failures and cognitive biases, discussed elsewhere, prevent the 
level of impact required to ensure a full contribution to decarbonisation.  

In the road transport sector, it is therefore typically deemed that price instruments should be deployed 
as complementary to vehicle standards, infrastructure deployment and R&D policies. It should also be 
noted  that  Member  States  could  themselves  decide  to  add  a  carbon  price  to  their  excise  duties, 
attaining a reduction of emissions on their territory. Conversely, Member States with taxes well above 
the EU minimum could decide to compensate consumers for an EU-level price increase by lowering 
excise duties, thereby (partially) cancelling out the incentive. 

On the other hand, if electrification of road transport would become a strong driver of reductions, it 
would  lead  to  considerable  increases  in  electricity  demand,  and  thus  increasing  the  emissions 
elsewhere  in  the  ETS,  in  proportion  to  the  carbon  intensity  of  the  additional  electricity  that  is 
generated. As a result, the emissions of the transport and EU ETS sectors would become interlinked 
over the longer term and would interact in opposing directions. EU ETS prices would be affected as 
well.  This  would  increase  the  economic  logic  to  include  emissions  from  both  sectors  under  the  EU 
ETS  (so  that  within  the  EU  ETS,  increased  electrification  would  not  only  lead  to  higher  emissions 
from the power sector but also be linked to lower emissions from the transport sector). 

98 

 
 
Economic impacts, social and distributional issues 

The economics of road fuels inclusion on the road transport sector would be similar to that of a carbon 
tax on fuels. The net economic and distributional impact would depend on the way the tax is recycled 
to consumers by the state. Economic impacts could be positive if taxes more harmful to growth were 
lowered.  

Whether the carbon price is regressive or progressive will depend on the national context: while fuel 
costs can be  a  more important part  of the consumption of lower-income households, higher income 
households  tend  to  consume  more  transport  fuels.  Again,  the  distributional  policies  of  the  state 
determine  the  final  impact.  But  choices  made  at  EU  level  are  important  as  well,  for  instance  in 
relation  to  the  distribution  of  the  additional  allowances  to  be  auctioned  for  the  transport  sector. 
Diverging impacts between Member States for EU wide road fuels inclusion could be compensated by 
redistributing  auctioning  revenues,  as  is  current  practice  in  the  EU  ETS.  Total  EU  wide  additional 
auctioning revenues for EU wide road fuels inclusion would depend on the carbon price. They could 
amount to as much as €19 billion yearly by 2030, with a carbon price of around ~€25.  

The  emissions  of  EU  road  transport  in  2013  were  around  840  Mt.  This  compares  to  an  overall  EU 
ETS cap of over 2,084 Mt in 2013. Road transport emissions are projected to decrease in the future, 
but lowering available allowances to an even greater extent would create a significant new demand in 
the EU ETS for allowances, and thus reduce the surplus on the EU market. This in turn will result in a 
lower number of allowances in circulation, decreasing the number of allowances being placed in the 
Market  Stability  Reserve  (MSR)  and  potentially  resulting  in  a  higher  carbon  price.  The  size  of  this 
additional demand, along with the adjustment of the cap, would determine the impact on the surplus, 
MSR and price. The impacts of the additional demand would need careful economic assessment: the 
resulting price increase would benefit sellers in the system but could disadvantage buyers with limited 
reduction options.  

On  the  other  hand,  the  impacts  on  the  carbon  price,  if  a  limited  number  of  small  Member  States 
decide to include road fuels in the EU ETS, is likely to be small. The small impacts on demand would 
in addition be counterbalanced by adjustments to the supply of allowances to be auctioned through the 
Market Stability Reserve. 

Conclusion 

Technically and politically, the EU-wide inclusion of road fuels in the EU ETS would be a significant 
undertaking. It would contribute towards reducing emissions in the road transport sector, but only to a 
limited degree and thus would only be a complementary measure to policies such as vehicle standards 
to improve vehicle emissions and infrastructure development. Impacts on environmental integrity in 
the  short  term,  as  well  as  on  the  carbon  price  would  need  to  be  carefully  considered.  On  the  other 
hand,  in  the  longer  term,  it  is  clear  that  the  emission  profiles  in  transport  and  EU  ETS  sectors  will 
interact through electrification, and that there could be a policy logic to putting them under  the same 
cap. 

The existing option of voluntary inclusion by specific Member States should not have a major impact 
on  the  EU  ETS.  It  could  provide  Member  States  who  so  wish  with  additional  flexibility  on  how  to 
achieve non ETS targets, while allowing learning by doing both how to technically include transport 
in the ETS, and how it would impact both the ETS and transport emissions. 

99 

 
 
ANNEX III: Overview of policy measures  

Further detail  on the  measures identified  in sections  2  and 4  is provided below. They are presented 
according  to  the  same  main  categories:  low-  and  zero-emission  vehicles;  switching  towards  low-
emission alternative energy for transport; efficiency of the transport system. 

Low- and zero-emission vehicles 

Car and Light Commercial Vehicle CO2 Regulations  

As  explained  in  section  2,  Regulations  have  been  put  in  place  which  set  CO2  targets  for  new  light 
commercial vehicles and passenger cars (collectively LDVs) by 2020/2021.204 The legislation requests 
the Commission to review the Regulations and if appropriate make proposals for CO2 emission targets 
for new cars and light commercial vehicles for the period beyond 2020, including possibly setting a 
2025 target.  

An extensive evaluation of the existing Regulations has been carried out as part of Regulatory Fitness 
and  Performance  Programme  (REFIT).  This  identifies  that  while  the  Regulations  have  been  largely 
effective and have delivered CO2 reductions at lower cost than originally foreseen, there are a number 
of  areas  where  the  Regulations  could be  improved.  These  include  the  test  procedure  (that  measures 
the CO2 emissions) and the inclusion of energy using devices (e.g. car air conditioning) not included 
in the test procedure, the use of vehicle mass (weight) as the utility parameter (a way to differentiate 
between  manufacturers'  fleets),  the  upstream  emissions  from  energy  production  and  embedded 
emissions from vehicle manufacture. 

The  2021  car  target  represents  a  reduction  of  40%  compared  with  the  2007  fleet  average  of  158.7 
gCO2/km. The 2020 van target represents a reduction of 19% compared with the 2012 fleet average. 
This  refers  to  the  emission  values  established  as  part  of  the  type approval  process  for  new  vehicles 
using the New European Driving Cycle (NEDC).  

These  percentage  reductions  in  new  vehicle  emissions  do  not  translate  immediately  into  the  same 
level of reduction in fleet emissions. The main reason for this time lag is the approximately  10-year 
life  of  vehicles.205  In  addition,  and  as  explained  in  box  "More  reliable  fuel  consumption  and  CO2 
figures for consumers and regulators" in section 4.1.1, real world emissions are known to be higher 
than those measured in the test cycle. The available research indicates that real world CO2 emissions 
per kilometre driven have fallen since the introduction of the legislation, but that  over time the gap 
has  widened  with  significantly  less  impacts  on  overall  GHG  emissions  in  the  new  vehicle  fleet  in 
recent years.206  

There are a number of contributors to the observed gap. The main identified elements are: 

  ambient conditions which are not represented in the test; 
  ancillary energy consuming devices which are not activated during the test; 
  differing  performance  of  CO2  reducing  technology  in  test  conditions,  primarily  because  of  the 

unrepresentativeness of the drive cycle; 

204 Regulation (EU) No 510/2011, amended by Regulation (EU) 253/2014 and Regulation (EC) No 443/2009, amended by 

Regulation (EU) No 333/2014. 

205  Source: http://www.acea.be/statistics/tag/category/average-vehicle-age 
206  See for example: ICCT (2015) Real-world fuel consumption of popular European passenger car models 
http://www.theicct.org/sites/default/files/publications/ICCT_Real-worldFC-EUcars_28122015.pdf  

100 

 
 
                                                            
  exploitation of flexibilities in the measurement of CO2 in test conditions.  

It is unlikely that the first of these has changed over the last decade, however there is strong evidence 
that the other three have all contributed to the increased divergence. Also electric vehicles can display 
a significant gap between energy consumption measured in the test cycle and in real driving.207 

In  addition,  for  air  pollutants,  the  discrepancies  between  real-driving  emissions  and  emissions 
measured under the laboratory test procedure, in particular for diesel cars – which form a large share 
of the EU market, can be significant. In particular the NOx emissions of many diesel cars drastically 
exceed the values defined in the Euro emission standards. This has a significant negative impact on air 
quality, especially in urban areas. 

Vehicle testing 

The CO2 emission values of light duty vehicles are produced from type-approval tests that rely on the 
New European Driving Cycle (NEDC) test-cycle, which is outdated and insufficiently representative 
of real driving. To address this shortcoming, the European Commission is advancing rapidly on the 
introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP). On 14 June 2016, 
the technical regulatory committee gathering Member States representatives (Technical Committee of 
Motor Vehicles) voted in favour of the Commission's draft Regulation to introduce the WLTP in the 
EU. If the European Parliament and the Council do not object to the current text, the new WLTP test 
will  become  mandatory  as  from  September  2017  for  all  new  vehicle  types  (September  2018  for  all 
new vehicles) and the new light duty vehicle efficiency requirements for the time after 2020 will be 
based on it. 

The WLTP incorporates the following main improvements with respect to the NEDC: 

  The driving curve of the WLTP was designed on the basis of real driving data, while the NEDC 
was designed artificially on the "drawing board". Speeds and accelerations of typical driving are 
now properly represented. 

  The rules for the determination of the road loads have been significantly improved with respect to 

previously insufficiently defined areas and possible loopholes. 

  Test  procedures  for  electric  vehicles  have  been  significantly  improved  and  updated  to  technical 

progress. 

As a result, the WLTP will provide significantly more realistic fuel consumption/CO2 values than the 
NEDC. 

To  strengthen  the  overall  reliability  of  vehicle  testing,  the  European  Commission  also  proposed  a 
major overhaul of the EU type-approval framework for motor vehicles. Under current rules, national 
authorities are solely responsible for certifying that a vehicle meets all requirements to be placed on 
the  market  and  for  policing  manufacturers'  compliance  with  EU  law.  The  proposal  for  a  new 
Regulation208,  adopted  by  the  Commission  on  27  January  2016,  will  make  vehicle  testing  more 
independent, increase surveillance of vehicles  already in  circulation  and introduce greater European 
oversight.  Once  the  draft  Regulation  has  been  adopted  by  the  European  Parliament  and  Council,  it 
will be directly applicable and will repeal and replace Directive 2007/46/EC.  

207  JRC 2015. Individual mobility: From conventional to electric cars, available at: 

http://publications.jrc.ec.europa.eu/repository/bitstream/JRC97690/eur_27468_en_online_v3.pdf 
208  Source: http://ec.europa.eu/growth/sectors/automotive/technical-harmonisation/eu/index_en.htm  

101 

 
 
                                                            
Building on these initiatives, further work is being carried out to ensure the continued relevance and 
accuracy  of  the  EU's  vehicle  emissions  testing  regime.  This  includes  further  work  on  the  WLTP 
(Phases 2 and 3), which should cover all the rest of emission-related light duty vehicle testing, such as 
evaporative  emissions.  In  addition,  the  Commission  introduced  a  Real  Driving  Emissions  (RDE) 
procedure to measure the NOx emissions of light duty diesel vehicles in real driving conditions which 
will be performed from 2017, but the second stage of this procedure will only become mandatory for 
all  new  vehicles  in  January  2021.  This  new  procedure  utilises  portable  emissions  measurement 
systems (PEMS) and will be further developed and refined.  

Car labelling 

The car labelling Directive (Directive 1999/94/EC) requires EU Member States to ensure that relevant 
information  is  provided  to  consumers,  including  on  fuel  efficiency  and  CO2  emissions.  It  may 
influence consumers' choice in favour of cars which use less fuel and emit less CO2 and should also 
provide an incentive to manufacturers to reduce new car fuel consumption. The evaluation of the Car 
Labelling  Directive  shows  that  it  was  successful  in  increasing  consumer  awareness  of  the  fuel 
economy and CO2 emissions of new passenger cars. However, the report identified a number of issues 
that  prevented  the  Directive  from  being  more  effective  in  stimulating  the  uptake  of  vehicles  with 
lower fuel consumption and CO2 emissions.  

Heavy Duty Vehicle Strategy  

About one quarter of road transport CO2 emissions (or some 5% of EU emissions) are estimated to be 
produced by Heavy Duty Vehicles (HDVs).209 The HDV strategy, adopted in May 2014, is the EU’s 
first initiative to tackle greenhouse gas emissions from trucks, buses and coaches.210 CO2 emissions 
from HDVs are currently neither measured nor reported. The strategy therefore focuses on short-term 
action to certify, report and monitor HDV emissions - an essential first step towards reducing them. 

The development of the VECTO simulation tool and the implementation of the certification procedure 
using the VECTO output will support the envisaged  Commission legislative proposals which would 
require fuel consumption and CO2 emissions from new HDVs to be certified, reported and monitored. 
This will contribute to a more transparent and competitive market and the adoption of the low-carbon 
technologies. 

Weights & Dimensions  

Heavy goods vehicles, buses and coaches in the EU must comply with certain rules on weights and 
dimensions  for  road  safety  reasons  and  to  avoid  damaging  roads,  bridges  and  tunnels.  In  2015, 
Directive  96/53/EC  has  been  amended  by  Directive  2015/719/EU  which  grants  derogations  on  the 
maximal lengths to make heavy goods vehicles greener by improving their aerodynamic performance. 
This also provides the opportunity to make them safer by enabling vehicles to have a new driver cab 
profile  that  reduces  blind  spots  in  the  driver's  vision,  including  those  under  the  windscreen. 
Derogations on weights are also allowed for vehicles powered by alternative fuels.  

The  Directive  needs  to  be  transposed  by  Member  States  in  national  legislation  by  May  2017.  The 
impact assessment and its support studies211 estimated that these measures will considerably improve 
the aerodynamics of vehicles, saving approximately €5,000 per year in fuel costs for a typical long-

209  Source: UNFCCC 
210  COM(2014) 285 final 
211  SWD(2013) 109 final 

102 

 
 
                                                            
distance lorry covering 100,000 km. This represents an improvement of 7 to 10 % of GHG emissions 
(or  7.8  tonnes  of  CO2)  in  2030  compared  to  the  baseline  for  the  same  long-distance  lorry  covering 
100,000 km at speeds above 60 km/h, of which 5 to 8 % attributable to the rear aerodynamic devices, 
and 3 to 5 % to the new cabs.212 At the same time, the field of vision of the driver will be improved, 
helping  to  save  the  lives  of  300  to  500  vulnerable  road  users  such  as  pedestrians  or  cyclists  every 
year.213 

Energy labelling of tyres 

Tyres  sold  in  the  EU  are  subject  to  energy  labelling  requirements.  Regulation  (EC)  No  1222/2009 
provides information on fuel efficiency, wet grip and external rolling noise through clear pictograms. 
Tyre labels help consumers choose vehicle tyres that are more fuel efficient, have better wet braking 
and  are  less  noisy.  New  tyres  come  with  an  energy  label  showing  their  energy  efficiency  class, 
ranging from efficiency class A (most efficient) to G (least efficient). 

Tyres account for 20 to 30% of a vehicle’s fuel consumption; choosing energy efficient tyres results 
in fuel cost savings. Switching to the most energy efficient tyres can reduce fuel consumption by up to 
9%. At a fuel price of €1.50 per litre, this would mean around €660 over the lifetime of the tyres (if it 
covers  65,000  km).  The  additional  purchasing  costs  of  energy  efficient  tyres  thus  may  be 
compensated by the fuel savings, resulting in overall total savings over time. 

Clean Vehicles Directive 

Public procurement can be a powerful instrument for pushing the uptake of more energy efficient and 
clean,  alternatively  fuelled  vehicles  and  kick-starting  their  large  scale  deployment  in  particular  in 
captive  fleets.  Directive  2009/33/EC  on  the  promotion  of  clean  and  energy-efficient  road  transport 
vehicles mandates public procurers to consider fuel consumption, CO2 and pollutant emissions when 
purchasing road transport vehicles, giving them various options to do so.  

An evaluation of the Clean Vehicle Directive was completed in 2015. It is estimated that 53 to 475 
thousand  vehicles  (or  0.4  to  3.5%  of  total  vehicle  purchases)  were  purchased  annually  under  the 
Directive between 2012 and 2014214, but for some segments the share can be significantly higher (e.g. 
buses, 17 to 75% of vehicle purchases). This translates into estimated annual CO2 emissions avoided 
of  54  to  676  thousand  tonnes,  which  is  however  significantly  less  than  the  annual  reduction  of  1.9 
million  tonnes  estimated  in  the  2007  impact  assessment.  In  addition,  it  also  resulted  in  significant 
reductions of operating costs and slightly lower air pollutant emissions.  The Directive is estimated to 
have generated total benefits of €43 to 521 million and total costs of €35 to 431 million, resulting in a 
benefit: cost ratio of 1.2.215  

212  According to the impact assessment, of the total estimated EU heavy good vehicles fleet in 2030 (9.8 million vehicles), 
only  those  above  20  tonnes  in  maximum  weight  are  expected  to  be  equipped  with  rear  devices  and  cabins  (41.5%  or 
slightly more than 4 million). Roughly 1 in 4 (around 25%) of these are thought to be used to travel long distances (about 
1 million). Due to their safety benefits in urban contexts, the fleet of vehicles using new cabins is expected to be larger 
than the one equipped with rear flaps. However, the fuel savings linked to their aerodynamic properties will only take 
place  on  long-distance  high-speed  trips.  The  fleet  used  to  estimate  the  fuel  savings from  this  measure  is  therefore  the 
same as for vehicles using rear add-ons. 

213  FKA (2011), Design of a Tractor for Optimised Safety and Fuel Consumption, Report 104190, available at: 

https://www.transportenvironment.org/sites/te/files/media/2012%2002%20FKA%20Smart%20Cab%20study_web.pdf 
214  Ricardo-AEA (2015), Ex-Post Evaluation of Directive 2009/33/EC on the promotion of clean and energy-efficient road 
transport  vehicles,  available  at:  http://ec.europa.eu/transport/facts-fundings/evaluations/doc/2015-09-21-ex-post-
evaluation-directive-2009-33-ec.pdf 

215  Reductions of operating costs (€32 to 393 million), reductions of external costs related to CO2 (€10 to 124 million) and 
air  pollutants  (€1  to  4  million).  Source:  Ricardo-AEA  (2015),  Ex-Post  Evaluation  of  Directive  2009/33/EC  on  the 

103 

 
 
                                                            
 
The  conclusions  of  the  evaluation  show  that  the  Directive  is  relevant,  but  has  limited  effectiveness 
and efficiency, and significantly lower impacts than estimated in the impact assessment.  This can for 
an  important  part  be  attributed  to  the  fact  that  the  final  Directive  deviated  significantly  from  the 
original  proposal,  as  it  included  less  harmonized  monetization  methodologies,  introduced  threshold 
values  of  the  procurements  the  legislation  applies  to,  and  suffered  from  late  transposition.  While 
publicly  procured  vehicles  represent  a  small  share  of  the  overall  vehicle  market  when  procurement 
thresholds  are  applied,  the  legislation  remains  a  useful  tool  in  stimulating  the  market  for  clean 
vehicles,  as  part  of  a  more  comprehensive  approach  to  stimulate  the  market  for  clean  and  energy-
efficient  road  transport  vehicles.  Particularly  concerning  specific  vehicle  segments  (such  as  buses), 
the potential for stimulating the market for clean vehicles via public procurement is significant. In the 
framework of the Energy Union Package, a review has been announced for 2017.  

Switching towards low emission alternative energy for transport 

Fuel Quality Directive 

The Fuel Quality Directive (FQD)  216, last amended by the ILUC Directive 2015/1513/EU, regulates 
aspects of fuel quality to address environmental and health concerns such as air pollutants from fuels 
while  ensuring  fuel  and  vehicle  compatibility  across  Europe.  It  also  contains  binding  sustainability 
criteria  for  biofuels  and  lays  down  the  methodology  for  the  calculation  of  the  GHG  intensity  of 
biofuels.  

Article  7a  of  the  FQD  requires  fuels  suppliers  to  reduce  the  GHG  intensity  (gCO2/MJ)  of  fuels 
supplied by 6% in 2020 compared to 2010. Article 7a217 mainly concerns road transport fuels but the 
recent amendment218 gives Member States the possibility to allow emission reductions in aviation to 
be taken into account. 

Renewable Energy Directive  

The use of renewable energy in transport is promoted by the Renewable Energy Directive 2009/28/EC 
(RED), amended by the ILUC Directive 2015/1513/EU, which requires 20% of energy in final energy 
consumption to be renewable in 2020 and has a transport sub-target requiring each Member State to 
have  a  10%  share  of  renewable  energy  in  transport  by  2020.  The  RED  also  provides  a  regulatory 
framework for biofuel sustainability to be applied across the EU, identical to that included in the Fuel 
Quality Directive.  

The  implementation  of  the  Directive,  including  the  design  of  the  support  schemes  promoting 
renewable transport fuels, is the responsibility of Member States.  

A  mid-term  evaluation  study  of  the  RED  indicated  that  the  objective  of  increasing  the  share  of 
renewable  energy  in  EU  final  energy  consumption  had  been  successfully  met.219  Deployment  of 
renewable energy across all sectors of the economy resulted in around 388 Mt of gross avoided CO2 
emissions in 2013 and a reduction in the EU demand of fossil fuels of 116 Mtoe. Avoided imported 
fuel  costs  due  to  increased  use  of  renewable  energy  amount  to  at  least  some  €30  billion  a  year. 

promotion  of  clean  and  energy-efficient  road  transport  vehicles,  available  at:  http://ec.europa.eu/transport/facts-
fundings/evaluations/doc/2015-09-21-ex-post-evaluation-directive-2009-33-ec.pdf  

216  Directive 98/70/EC as amended by Directive 2009/30/EC  
217  Directive 2015/652/EU 
218  Directive 2015/1513/EU 
219  CE Delft et al. (2015), Mid-term evaluation of the Renewable Energy Directive - A study in the context of the REFIT 

programme, available at: 
https://ec.europa.eu/energy/sites/ener/files/documents/CE_Delft_3D59_Mid_term_evaluation_of_The_RED_DEF.PDF 

104 

 
 
                                                                                                                                                                                         
Mandatory targets and adequate support schemes have contributed to driving down technology costs 
for renewable energy technologies.  

In transport, the mandatory target has been important for the deployment of renewable energy in the 
sector,  mainly  through  implementation  of  national  blending  obligations.  Furthermore,  EU-wide 
biofuel sustainability criteria, covering the 3rd largest world biofuel market with biofuel consumption 
of 0.7 Mboe/d, would not have been in place in the absence of the Directive. 

Progress  observed  over  the  past  five  years  towards  the  2020  transport  renewable  energy  target  has 
been slow – a 5.4% share was achieved in 2013 and 5.9% in 2014. In 2014, Finland and Sweden were 
the  only  Member  States  to  have  already  reached  the  10%  transport  target  (21.6%  and  19.2%  of 
renewables  in  transport  respectively),  while  Austria  was  rather  close  to  achieving  it  (8.9%  share). 
Most of the EU Member States are around half-way to attain their 2020 objective. With less than 1% 
of  energy  from  renewables  in  transport,  Estonia  (0.2%)  and  Spain  (0.5%)  are  the  worst  performing 
Member States. 

The  main  reason  for  the  slow  progress  pace  has  been  policy  uncertainty  at  the  EU  level  regarding 
biofuels policy, low competitiveness of biofuels in terms of prices alongside the increasing awareness 
that  certain  biofuel  production  pathways  may  increase  overall  greenhouse  gas  emissions  when 
emissions from indirect land use change are taken into account. In addition, there has been a lack of 
commercially available alternative, second generation biofuels.220 

The 'ILUC' Directive 

To address concerns about the indirect land use change (ILUC) impacts of biofuels, both the RED and 
the  FQD  Directives  were  amended  by  Directive  2015/1513/EU  (so  called  "ILUC  Directive”).  The 
Directive  introduced  a  cap  on  the  amount  of  food  or  feed  based  biofuels  (7%)  that  can  be  counted 
towards the 2020 target for renewable energy in transport. It also introduced an indicative sub-target 
for advanced biofuels to be set by Member States and contains a list of feedstock for biofuels that can 
be  counted  double  towards  the  renewable  energy  target  for  transport.  Incentives  for  the  use  of 
renewable electricity in transport were also scaled up through the extension of multiple counting.   

European Alternative Fuels Strategy  

In January 2013 the European Commission adopted a European Alternative Fuels Strategy to address 
the decarbonisation of the transport sector and air quality objectives, and also energy supply security 
and  EU  industry  competitiveness.  The  initiative  sets  out  a  comprehensive  strategy  and  an 
implementation roadmap, covering all modes of transport. It aims at establishing a long-term policy 
framework to guide technological development and investments in the deployment of these fuels and 
give  confidence  to  consumers.  The  strategy    advocated  that  there  is  no  single  fuel  solution  for  the 
future of mobility and all main alternative fuel options must be pursued, with a focus on the needs of 
each transport mode (see Table 16).  

220  COM(2015) 293 final 

105 

 
 
                                                            
Table 16: Modes and suitable alternative fuel types  

Source: European Alternative Fuels Strategy 

Each  alternative  fuel  will  have  a  different  level  of  contribution  towards  the  decarbonisation. 
Alternative  fuel  vehicles  and  vessels  provide  in  most  cases  CO2  emission  reductions  on  a  well  to 
wheel (WTW) basis (see Table 17).  

Table 17: Overview of WTT, TTW and WTW GHG emissions of compact passenger vehicle applications221,222 

WTT gCO₂/km  

TTW gCO₂/km   WTW gCO₂/km  

Alternative fuels 

Conventional gasoline  

Conventional diesel  

BEV EU28 Mix*  

PHEV EU28 Mix (Gasoline/Diesel)  

FCEV Thermal gasification path EU28 Mix  

29  

25  

78  

38  

62  

FCEV Electrolysis path, EU28 electricity mix   125  

156  

120  

0  

185  

145  

78  

75 / 68  

111 / 105  

0  

0  

62  

125  

Bio-diesel/B7  

E10/E20/E85  

CNG (EU mix)  

Biomethane  

HVO  

GTL  

CTL  

Wood  

-101 to -22 / 14-19  

125 / 181-184  

44-103/137-140  

17 – 28 / 6-28 / -82 to 29   150 / 148 / 143  

168-178/154-176/61-171  

30  

- 290 to -33  

-111 to -22  

22 – 38  

65 – 211  

104 to -111  

132  

132  

116  

116  

116  

116  

163  

-158 to 99  

5-94  

138-154  

181 - 328  

12  

DME (natural gas/Coal /BTL)  

38 / 218 / -104  

117 / 117 / 117  

137-154 / 334 / 12  

LPG  

17  

142  

160  

Source: JEC study (2014)  
Note: * With EU28 Mix data of 2013, BEV reaches a WTW of 64 gCO2/km instead of 78g/km (EU Mix 2009). Source: JRC recent work - to 
be published. WTT stands for well to tank, TTW for tank to wheel and WTW for well to wheel. 

In waterborne transport, the use of LNG allows for about 20% less GHG emissions than bunker oil, a 
significant  reduction of NOx, and nearly no sulphur emissions compared to heavy fuel oil (3.5% to 
4.5% SOx) or particulate matter emissions. The use of LNG in maritime transport allows the sector to 
meet the requirements for decreasing the sulphur content in maritime fuels in the Sulphur Emission 
Control Areas. For road transport, the advantages of natural gas vehicles in terms of GHG emissions 
are  also  significant  compared  to  petrol  vehicles  but  less  important  against  diesel  vehicles. 
Nevertheless,  it  is  expected  that  the  new  generation  of  advanced  natural  gas  powertrains  for  either 
dual  or  single-fuel  natural  gas  operation,  or  the  higher  use  of  biomethane  blended  with  LNG,  will 

221  For  the  vehicle  calculations,  a  common  vehicle  platform  representing  the  most  widespread  European  segment  of 
passenger vehicles (C-Class compact 5-seater European sedan) was used, and a number of powertrain options assessed. 
222  JEC - Joint Research Centre-EUCAR-CONCAWE collaboration (2014), WELL-TO-WHEELS Report Version 4.a - JEC 

WELL-TO-WHEELS ANALYSIS, available at: http://iet.jrc.ec.europa.eu/about-jec/downloads 

106 

 
 
 
                                                            
increase significantly the GHG's emissions reduction from LNG vehicles including a reduction of the 
emissions  of  unburned  methane.  The  use  of  LNG  in  road  transport  has  also  the  advantage  of  low 
pollutant  emission  levels  (mainly  NOx)  and  particulate  emissions  close  to  zero.  In  addition,  the 
evidence for fugitive emissions and methane leakages along the entire value chain would need to be 
considered. 

Enhancing  the  share  of  renewables  in  alternative  fuels  will  further  reduce  CO2  emissions.  In  this 
context, renewable electricity and advanced biofuels (including biokerosene and biomethane) are the 
most  promising  alternatives  to  increase  the  share  of  renewable  energy  in  transport  and  for  its 
decarbonisation. 

The  Strategy  has  indicated  four  priority  fields  for  further  EU  action:  1)  addressing  alternative  fuels 
infrastructure;  2)  developing  common  technical  specifications;  3)  addressing  consumer  acceptance 
and 4) addressing the technological development, including advanced biofuels production. Priorities 
were set according  to  the stage of technological maturity and market development as well as future 
prospects  of  the  different  fuels,  focussing  on  infrastructure,  technical  specifications,  consumer 
information, coordination of public expenditures to reduce costs and improve impacts, and R&D. 

Several measures to implement the European Alternative Fuels Strategy could be envisaged:  

1)  addressing  technological  development,  including  advanced  biofuels  production.  Specific 
technology  roadmaps  for  alternative  fuels  and  electrification  will  be  developed  in  the  frame  of 
the Strategic Transport Research and Innovation Agenda (STRIA).  Other measures relate to e.g. 
electro-mobility  -  continue  funding  for  research  and  demonstrations  for  vehicles  through  the 
European  Green  Vehicle  Initiative  (EGVI)  but  also  deployment  of  infrastructure  through 
Connecting Europe Facility and structural  funds, facilitating the deployment of European based 
battery competence centres;  natural gas - continue funding for research and demonstrations for 
vehicles  through  the  EGVI  but  also  deployment  of  infrastructure  through  Connecting  Europe 
Facility and structural funds; hydrogen – Fuel Cells and Hydrogen Joint Undertaking to continue 
developing  hydrogen  transport  solutions  for  increased  performance  and  for  reducing  cost  of 
vehicles and  hydrogen production, developing a platform of EU industry to ensure EU industry 
competitiveness;  biofuels  -  developing  financial  instruments  to  trigger  the  deployment  of 
advanced  biofuels  production  capacity  in  Europe  for  aviation,  developing  a  framework  for  EU 
harmonised incentives for the aviation industry. 

2)  addressing  alternative  fuels  infrastructure  and  its  integration  to  the  energy  system,  e.g. 
developing dedicated financial instruments for alternative fuels deployment (Connecting Europe 
Facility/European  Fund  for  Strategic  Investments);  for  electro-mobility  –  addressing  the 
interoperability,  the  cost  of  connections  of  fast  charging  points  and  reinforcing  local  grids 
through smart grids, addressing the private charging points in buildings; for natural gas – support 
higher biomethane blending in natural gas used in transport and the uptake of LNG for shipping.  

3)  developing  common  technical  specifications,  e.g.  standards  for  interfaces  between  vehicle  and 
infrastructure;  standardisation,  protocols  and  test  procedures  for  smart  charging;  harmonization 
of  rules  for  homologation  of  vehicles  (also  to  replace  batteries  in  electric  vehicles  by  higher 
capacity batteries coming into the market). 

4)  addressing consumer awareness, acceptance and market uptake, e.g. setting up together with the 
CEN/CENELEC a fuel compatibility labelling system to reassure confidence of users when using 
alternative fuels, developing a methodology of price comparison of alternative fuels and create a 
platform  to  promote  the  use  of  this  methodology  in  Member  States,  setting  up  an  Alternative 
Fuels Observatory (EAFO) as a reference website for user information.  

107 

 
 
Directive 2014/94/EU on the deployment of alternative fuels infrastructure, part of the 2013 Strategy, 
was adopted by the European Parliament and the Council on 29 September 2014. It requires Member 
States  to  submit  to  the  Commission  national  policy  frameworks  for  the  market  development  of 
alternative  fuels  and  their  infrastructure  by  November  2016.  In  addition,  it  foresees  the  use  of 
common technical specifications for recharging and refuelling stations and paves the way for setting 
up  appropriate  consumer  information  on  alternative  fuels,  including  a  clear  and  sound  price 
comparison methodology. The required coverage and the timing by which it must be put in place by 
the Member States are provided in Table 18. 

The  national  policy  frameworks  will  be  assessed  by  the  Commission  and  a  report  including  their 
assessment will be published by November 2017.  

Table 18: Deployment of alternative fuels infrastructure 

Electricity 
densely populated areas 

in  urban/suburban  and  other 

CNG  in  urban/suburban  and  other  densely 
populated areas 

Coverage 

Timing 

Appropriate number of publically accessible points  by end 2020 

Appropriate number of points 

by end 2020 

CNG along the TEN-T core network 

Appropriate number of points 

by end 2025 

Electricity at shore-side 

Ports of the TEN-T core network and other ports 

by end 2025 

Hydrogen in  the  Member  States  who choose 
to develop it 

Appropriate number of points 

by end 2025 

LNG at maritime ports 

Ports of the TEN-T core network 

LNG at inland ports 

Ports of the TEN-T core network 

LNG for heavy-duty vehicles 

Appropriate  number  of  points  along  the  TEN-T 
core network 

by end 2025 

by end 2030 

by end 2025 

The  impact  assessment  accompanying  the  proposal  for  the  Directive  2014/94/EU  has  indicated  the 
lack  of  recharging/refuelling  infrastructure,  and  the  inability  of  market  forces  to  fill  this  gap,  as  a 
fundamental  barrier.  A  market  failure  in  the  provision  of  recharging/refuelling  infrastructure  affects 
particularly the deployment of three alternative transport fuels: electricity, hydrogen, and natural gas 
(LNG and CNG). The other main alternatives to oil  – biofuels and liquefied petroleum gas (LPG) – 
are  less  concerned.  The  availability  of  recharging/refuelling  infastructure  is  not  only  a  technical 
prerequisite  for  the  functioning  of  alternative  fuel  vehicles,  but  also  one  of  the  most  critical 
components  for  consumer  acceptance.223  Technological  maturity  of  alternative  fuel  vehicles  and 
vessels  has  been  convincingly  proven  in  large-size  European  projects,  but  those  transport  means 
remain  disfunctional  without  at  least  a  basic  network  of  refuelling/recharging  points.  Without 
removing the ‘chicken and egg’ problem between vehicles and infrastructure, all other efforts to allow 
efficient market choices among technologies risk to remain ineffective. 

223  “Examining choice data from a survey of potential car buyers in Germany, we have shown in this paper that demand for 
alternative-fuel  vehicles  strongly  depends  on  the  availability  of  fuelling  infrastructure.  Consequently,  a  failure  to 
significantly expand the network of stations for alternative fuels would significantly hamper the adoption of alternative-
fuel vehicles in coming years.” Source: Acthnicht et al., 2012. The impact of fuel availability on demand for alternative-
fuel  vehicles.  Transportation  Research  Part  D  17  (2012)  pp.  262-269.  Examples  of  other  studies  supporting  this 
statement: Egbue et al, 2012, Barriers to widespread adoption of electric vehicles: Analysis of consumer attitudes and 
perceptions; Deloitte Development LLC, 2010, Gaining traction - A customer view of electric vehicle mass adoption in 
the U.S. automotive market. 

108 

 
 
 
                                                            
The impact assessment also showed that investing in a minimum recharging/refuelling network is the 
most  efficient  way  to  promote  alternative  fuel  vehicles.224  While  infrastructure  alone  has  no  major 
direct impact, an intervention on the refuelling/recharging network can have a very large and positive 
effect in combination with other initiatives targeted at the introduction of cleaner vehicles. Mainly as 
a result of increased deployment of electric vehicles, including plug-in hybrids, oil consumption may 
decrease by 0.3 to 0.9% by 2020 relative to the baseline, while CO2 emissions would go down by 0.2 
to 0.3% (2.5 to 3.2 Mt of CO2) and NOx emissions by 1.4 to 2%. Particulate matter emissions follow 
a similar pattern to NOx emissions. In  addition, external costs of  noise are reduced by about 0.1  to 
0.2%  during  the  same  period.  In  the  medium  to  long  term  perspective,  about  0.9  to  1.3%  CO2 
emissions reduction (76 to 81 Mt of CO2) could be achieved by 2030, relative to the baseline, and 1.1 
to 3.4% (138 to 158 Mt of CO2) by 2050. Overall, avoided fuel consumption over the lifetime of the 
alternative  fuel  cars,  heavy  duty  vehicles  and  vessels  whose  uptake  would  be  enabled  by  this 
minimum network would amount to €17.5-37.7 billion, while the energy security benefits would add 
€3.8-8.3  billion  and  the  lower  impact  on  the  environment  can  be  monetised  to  be  around  €8.9-12.5 
billion.225 

In  2015  the  European  Commission  published  a  report  on  the  "State  of  the  Art  on  Alternative  Fuels 
Transport Systems in the European Union" based on the contribution of the Expert Group on Future 
Transport  Fuels.226  The  report  covers  electricity,  hydrogen,  liquid  biofuels,  natural  gas  (including 
biomethane), synthetic & paraffinic fuels and LPG. The analysis covers the availability, maturity of 
the  technology,  vehicles  and  infrastructure,  production  costs  for  fuels,  vehicles  and  infrastructure, 
emissions and energy efficiency. It  provides recommendations for consideration by: the Commission, 
the  Council  and  the  European  Parliament,  the  Member  States,  the  European  Committee  for 
Standardisation and the EU industry. 

In addition, a study by CE Delft and TNO analyses the development of the LNG market for shipping 
in  the  EU.227  At  present,  LNG  is  available  as  a  bunker  fuel  for  maritime  shipping  at  seven  EU  sea 
ports.  Several  other  ports  are  preparing  for  LNG  bunkering.  There  are  currently  about  100  LNG-
fuelled ships in the world fleet (excluding LNG tankers), and this number is expected to double in the 
next  few  years.228  In  this  context,  the  study  provides  a  qualitative  analysis  of  the  most  important 
drivers  and  barriers  with  respect  to  the  use  of  LNG  as  a  bunker  fuel.  In  addition,  it  provides  a 
quantitative analysis of the economic feasibility of the use of LNG in ten ports and develops scenarios 
for the uptake of LNG as a bunker fuel by 2030.  

The scenarios quantified in the study assume that by 2025 LNG bunkering facilities will be available 
in all TEN-T core ports because of the implementation of Directive 2014/94/EU, and that from 2020 
onwards the Sulphur Directive will require ships sailing to any EU port to use low sulphur fuels or a 
scrubber  with  equivalent  emissions.  According  to  the  study,  LNG  bunker  demand  in  the  central 
scenario could be between 0.4 and 2.8 million tonnes by 2030, leading to NOx emissions reductions 
of 350 to 2,300 tons, SOx reductions of 0.5 to 3.2 tons, PM emissions reductions of 0.4 to 2.6 tons and 
CO2 emissions reductions of 150 to 1,100 ktons relative to the baseline in 2030.  

224  SWD (2013) 5 final 
225  The impacts of the user information measures foreseen in the Directive have not been quantified. 
226  COWI (2015), State of the Art on Alternative Fuels Transport Systems in the European Union, available at: 

http://ec.europa.eu/transport/themes/urban/studies/doc/2015-07-alter-fuels-transport-syst-in-eu.pdf 

227  CE Delft, TNO (2016), Study on the Completion of an EU Framework on LNG-fuelled Ships and its Relevant Fuel 

Provision Infrastructure (Lot 3) - Analysis of the LNG market development in the EU, available at: 
http://ec.europa.eu/transport/modes/maritime/studies/maritime_en.htm 

228  The world fleet comprises about 60,000 transport ships and 50,000 non-transport ships. 

109 

 
 
                                                            
The main drivers of demand for LNG identified by the study are environmental regulations, especially 
the Sulphur Directive, and the price differential between LNG and other fuels. The following barriers 
are identified: the uncertainty about the availability of LNG in ports, the uncertainty about technical 
and safety standards, and the uncertainty about the second hand-price of LNG ships. 

Other studies by DNV/GL and PWC229 and by PWC and MSL230 provide a comprehensive analysis of 
the EU framework on LNG-fuelled ships.  

Electricity Market Directive  

Directive 2009/72/EC contains provisions for Member States to analyse the costs and benefits of the 
roll  out  of  smart  meters  (and  to  roll  out  those  meters  to  at  least  80%  of  all  consumers  by  2020  if 
benefits outweigh costs).  

Integrating  variable  renewables  to  the  electricity  grid  requires  the  demand  to  become  increasingly 
flexible. This means that the electricity market design needs to encourage consumers to shift demand 
to high production times. For this to happen, the consumer needs to have access to the technical tools 
to manage demand (smart meters) and get a monetary incentive to shift demand, either directly (e.g. 
through  dynamic  electricity  tariffs)  or  indirectly  through  demand  response  service  providers  (e.g. 
aggregators) who remunerate consumers for their flexibility. 

Adding new loads – such as electric vehicles – bring additional challenges to the electricity network. 
Efficiently integrating those new loads will only be possible if the charging is done at high production 
times  and  during  those  periods  when  there  is  no  network  congestion.  Under  the  ongoing  market 
design initiative, the Commission is currently analysing options to strengthen the role of flexibility by 
accelerating  the  deployment  of  smart  metering  systems,  encouraging  the  use  of  dynamic  electricity 
pricing contracts, facilitating market access of aggregators and revisiting the structure of distribution 
network  tariffs.  Such  strengthened  rules  are  also  aimed  at  providing  a  business  case  for  smart 
charging.  

Efficiency of the transport system 

Road pricing and internalization  

The  internalisation  of  external  costs  generated  by  transport  operations  can  be  an  efficient  way  of 
reducing  the  negative  impacts  of  transport  activity.  CO2  emissions  are  one  of  the  main  negative 
externalities caused by transport along with air pollution, congestion, noise, accidents etc. The 2011 
White Paper on Transport set a roadmap for gradually internalising external costs in the sector. The 
ultimate goal was to move towards full internalisation in all modes by 2020. 

In  monetary  terms,  currently  the  most  important  measure  having  the  effect  of  internalising  external 
costs in transport is the taxation of fuel. This is in line with the findings of the Commission’s report 
on  taxation  trends  in  Europe,  which  showed  that  while  non-energy  related  environmental  taxes  on 

229  DNV GL and PWC (2015), Study on the completion of an EU framework on LNG fuelled ships and its relevant fuel 

provision infrastructure; Lot 1: Analysis and evaluation of identified gaps and of the remaining aspects for completing an 
EU-wide framework for marine LNG distribution, bunkering and use, available at: 
http://ec.europa.eu/transport/modes/maritime/studies/doc/2015-12-lng-lot1.pdf 

230  PWC and MSL (2015), Study on the completion of an EU framework on LNG-fuelled ships and its relevant fuel 

provision infrastructure; Lot 2 “Creating Awareness on LNG Risks and Opportunities, available at: 
http://ec.europa.eu/transport/modes/maritime/studies/doc/2015-12-lng-lot2.pdf 

110 

 
 
                                                            
transport amounted to around 0.5% of GDP in 2012, taxes on transport fuels represented around 1.4% 
of GDP (about €188 billion in 2012).231 

Fuel taxes have multiple objectives and in most cases are not formally linked to CO2 emissions; only 
some  Member  States  have  an  explicit  CO2  tax  in  place.  Nevertheless,  fuel  taxation  is  directly 
correlated to fuel consumption and CO2 emissions and therefore represents an appropriate instrument 
for internalising the climate change externality. If one were to consider the current fuel tax levels as 
internalising  climate  costs  only  (from  exhaust  CO2  emissions),  then  translating  the  minimum  tax 
levels of the Energy Taxation Directive into a carbon price would result in €124.5 and €157 per tonne 
of  CO2  for  diesel  and  gasoline,  respectively.  Moreover,  many  Member  States  apply  rates  that  are 
higher than the minimum levels stipulated in the EU law.232 The amount of fuel taxes collected from 
transport (€188 billion) implies that CO2 emissions from road, rail and domestic navigation (857 Mt 
in 2012) are charged an average of €219 per tonne of CO2. 

Besides fuel taxation, infrastructure charging is another important measure in internalising transport 
externalities.  Directive  1999/62/EC  (the  "Eurovignette"  Directive)  provides  a  detailed  legal 
framework  for  charging  heavy  goods  vehicles  (HGVs)  for  the  use  of  roads.  The  main  aim  of  the 
Directive is to eliminate distortions of competition between transport undertakings by achieving step-
wise harmonisation of vehicle taxes and establishment of fair mechanisms of infrastructure charging. 
Nevertheless, by first allowing then making differentiation of infrastructure charges according to Euro 
classes  mandatory,  it  did  contribute  to  fleet  renewal  and  thus  to  the  reduction  of  emissions  of  air 
pollutants.  

An  evaluation  of  EU  road  charging  policies  took  place  in  2013.233  According  to  the  evaluation, 
reducing  air  pollution  has  been  achieved  by  Euro  class-differentiation  of  network-wide  tolls.  Fleet 
renewal due to tolls differentiated by Euro class was found to be significant in Germany, where the 
effects of road pricing were reinforced by government incentives to purchase Euro V trucks. The use 
of  vignette  systems  has  had  less  impact  compared  to  distance-based  tolls.  In  countries  with  tolls 
differentiated  by  Euro  class,  the  share  of  vehicle-kilometres  is  proportionately  higher  for  cleaner 
trucks compared to the fleet composition. Generally, the “mileage is cleaner than the fleet”, i.e. newer 
trucks tend to be used more, but this effect appears to be lower in countries with vignettes. Euro class-
differentiated  tolls  also  encourage  greater  use  of  cleaner  vehicles  engaged  in  international  transport 
from non-tolled countries. 

Some  evidence  was  found  of  improvements  to  transport  efficiency  due  to  tolls,  whereas  vignettes 
have had no discernible effect. The introduction of the tolls in Germany and Austria coincided with a 
decrease in the average distance travelled by trucks. The fact that the cleanest vehicles have been most 
used  indicates  that  differentiated  road  pricing  (especially  in  the  form  of  tolls)  has  had  a  positive 
impact on the use of the available vehicle fleet.  

There has been limited use of congestion pricing, but where it has been introduced it has proved to be 
an effective instrument to reduce congestion. In the Czech Republic, a significantly higher toll rate for 
trucks  on  Friday  afternoons  on  the  network-wide  toll  led  to  a  reduction  in  Friday  afternoon  peak 
traffic  by  15%.  In  France,  increasing  toll  rates  during  the  weekend  rush  hour  on  several  motorway 
sections resulted in a transfer to off-peak periods of 8-12% of traffic. Differentiated charges in France 
apply  to  passenger  transport  as  well,  which  is  thought  to  be  able  to  adjust  travel  times  more  easily 

231  Source: http://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/data_on_taxation/index_en.htm 
232  SWD(2013) 269 final 
233  Ricardo-AEA (2014), Evaluation of the implementation and effects of EU road charging policy since 1995, available at: 

http://ec.europa.eu/smart-regulation/evaluation/search/download.do?documentId=10296156 

111 

 
 
                                                            
compared  to  freight.  With  regard  to  modal  shift,  while  there  has  been  some  minor  increase  in  the 
share of rail freight transport, no significant evidence was found on such effects of road charging in 
Germany. In Austria, there has been a clear modal shift in freight transport since 2004, when distance-
based  tolls  were  introduced  for  heavy  goods  vehicles.  This  however  was  only  one  of  a  handful  of 
other (notably fiscal, financial and regulatory) measures in support of rail and combined transport. 

The effect on decarbonisation has been limited so far, as tolls remain small compared to the overall 
costs  of  road  transport,  and  because  road  transport  is  characterised  by  low  price  elasticity. 
Furthermore, tolls apply on a small portion of the network, and therefore concern only a small portion 
of road traffic. 

Providing correct price signals and reducing disparities in road charging policies across the EU could 
decrease  the  negative  environmental  and  health  impacts  of  road  transport,  reduce  congestion  on                    
TEN-T network and eliminate discriminatory practices in the internal market. Achieving wide-scale 
interoperability of electronic tolling services in the EU could reduce the setup and operation costs of 
electronic  tolling,  as  well  as  facilitate  cross-border  movement  of  goods  and  people  by  reducing  the 
cost and burden of compliance with the obligation to pay tolls.  

The  improvement  in  the  functioning  of  the  Eurovignette  and  European  Electronic  Tolling  System 
(EETS) system in the EU is also expected to have positive impacts on CO2 and air pollutant emissions 
from the road transport sector. These positive impacts would be achieved through better organisation 
of transport, leading to a reduction in transport demand and consequently a reduced consumption of 
fuel.  An  analysis  performed  in    2013  by  Ricardo-AEA  estimated  a  maximum  reduction  in  gasoline 
consumption  of  2.3%  compared  to  the  baseline,  and  of  1.6%  for  diesel.  These  reductions  in  fuel 
consumption would translate into a decrease of 1.7% in CO2 emissions from the road sector in the EU. 
The  modelling  results  do  not  take  into  account  the  potential  of  congestion  charges  to  reduce  fuel 
consumption and CO2 emissions which are linked to the stop-and-go traffic on congested links. Thus, 
depending  on  the  way  the  tolls  are  designed  they  can  send  transport  users  price  signals  to  better 
organise  transport  (e.g.  avoiding  single  occupancy  in  passenger  cars,  consolidation  of  freight 
shipments  during  rush  hours)  and  as  a  result  further  reduce  CO2  emissions  and  air  pollutants.  In 
addition, possible differentiation of infrastructure charges for heavy goods vehicles according to CO2 
emissions could contribute to a faster uptake of more energy-efficient vehicles - in a similar way the 
differentiation of infrastructure charges according to EURO classes contributed to fleet renewal and to 
the reduction of emissions of air pollutants. 

Intelligent Transport Systems  

Intelligent Transport Systems (ITS) can significantly contribute to a cleaner, safer and more efficient 
transport  system.  The  ITS  Action  Plan  suggested  a  number  of  targeted  measures  with  the  goal  to 
create the momentum necessary to speed up market penetration of rather mature ITS applications and 
services in Europe.234 A new legal framework (Directive 2010/40/EU) was adopted to accelerate the 
deployment of ITS across Europe. It aims to establish interoperable and seamless ITS services while 
leaving  Member  States  the  freedom  to  decide  which  systems  to  invest  in.  Under  this  Directive  the 
European  Commission  adopts  specifications  (i.e.  functional,  technical,  organisational  or  services 
provisions)  to  address  the  compatibility,  interoperability  and  continuity  of  ITS  solutions  across  the 
EU.235 

234  COM(2008) 886 final 
235  Up until  now the  Commission  has  adopted  4  such  specifications:  emergency  call,  road  safety traffic  information,  safe 

and secure parking places information, and real-time traffic information. 

112 

 
 
                                                            
One lesson learned from the mid-term evaluation of the ITS Action Plan related to the need to ensure 
that  standards  resulting  from  the  standardisation  efforts  provide  a  sufficiently  flexible  environment 
and  are  technologically  neutral.  In  order  to  ensure  that  they  are  appropriate  for  the  needs  of  the 
industry  and  the  latest  technological  development,  stakeholders  should  actively  participate  in  the 
standardisation process.236 

In  road  transport,  Collaborative  Intelligent  Transport  Systems  (C-ITS)  typically  involve 
communication  between  vehicles  (vehicle-to-vehicle,  V2V),  between  vehicles  and  infrastructure 
(vehicle-to-infrastructure, V2I) and/or infrastructure-to-infrastructure (I2I). The benefits span a range 
of  areas,  including  improving  road  safety,  reducing  congestion,  optimising  transport  efficiency, 
enhancing  mobility,  increasing  service  reliability,  reducing  energy  use  and  environmental  impacts, 
and supporting economic development. 

In the framework of the Energy Union Package, a master plan on the deployment of C-ITS has been 
announced for 2016. To support the shaping of this strategy, the Commission has set up a dedicated 
C-ITS Platform bringing together a wide range of stakeholders, with the aim to create a shared vision 
of options for overcoming issues which hamper the co-ordinated deployment of C-ITS and supporting 
their actual deployment. The final report and recommendations of the C-ITS Platform were finalized 
on 21 January 2016.237 

A  Cost  Benefit  Analysis  (CBA)  study238  assessed  the  impacts  of  potential  deployment  scenarios. 
Estimates are that deployment of relatively mature technologies across Europe could by 2030 lead to 
annual reductions of: 1.2% in fuel consumption and CO2 emissions (respectively 2.4 Mtoe and 7.5 Mt 
of CO2, or €1.4 billion and €140 million), 2 billion hours spent in traffic (€10 billion), 7% in accidents 
(€3.4  billion),  and  0.4-0.7%  in  pollutants  emission  (€33  million).  It  also  estimates  that  this 
deployment can be very cost-effective (discounted cost-benefit ratio of 2.8 up to 2030). In addition, a 
high  deployment  scenario  was  designed  to  represent  the  impact  of  using  the  cellular  network  to 
provide  V2I  services;  it  showed  annual  reductions  of:  up  to  2.5%  in  fuel  consumption  and  2.7%  in 
CO2 emissions (respectively 5.3 Mtoe and 16.5 Mt of CO2), 2.6 billion hours spent in traffic, and 0.6-
1.2% in pollutants emission. 

Multimodal  travel  planning  is  a  key  element  of  Intelligent  Transport  Systems  (ITS)  deployment. 
With its vision of seamless door-to-door mobility, the 2011 Transport White Paper239 stresses further 
integration of the different transport modes to make mobility more efficient and user-friendly. Online 
information,  electronic  booking  and  payment  systems  integrating  all  means  of  transport  should 
facilitate and promote multimodal travel.  

The Commission Staff Working Document "Towards a Roadmap for delivering EU-wide multimodal 
travel  information,  planning  and  ticketing  services"240  describes  the  challenges  that  need  to  be 
addressed, and a coherent approach to mobilize a series of instruments, in order to create a framework 
supporting more comprehensive travel information, planning and ticketing services to emerge in the 
EU,  including  notably:  specifications  for  EU-wide  multimodal  travel  information  services  and  for 
real-time  traffic  information  services  (both  also  foreseen  under  the  ITS  Directive);  and  activities 

236  Ramboll (2013), Mid-term evaluation of the implementation of the ITS action plan, available at: 

http://ec.europa.eu/transport/themes/its/studies/doc/2013-03-06-mid-term-evaluation-of-the-implementation-of-the-its-
action-plan.pdf 

237  Final report adopted by the C-ITS Platform, available at:  

http://ec.europa.eu/transport/themes/its/doc/c-its-platform-final-report-january-2016.pdf 

238  Carried out by Ricardo-AEA, available at: http://ec.europa.eu/transport/themes/its/c-its_en.htm  
239  COM(2011) 144 final 
240  SWD(2014) 194 final 

113 

 
 
                                                            
funded  under  Horizon  2020  ("Smart,  green  and  integrated  transport"  Challenge)  and  Connecting 
Europe Facility. 

There  is  a  large  travel  demand  for  cross-border  journeys  within  the  EU.  In  2013  there  were  300 
million cross border journeys made by EU-citizens requiring at least one night stay. If also including 
those  trips  made  by  tourists  within  the  EU  each  year  (600  million)  and  single  day  return  trips,  the 
overall figure would be even higher. It is estimated that 214 million cross-border trips are made into 
either train stations or airports every year by EU residents with around 50% of the last mile made by 
taxi or private car. If, through more comprehensive multimodal travel information, an estimated 10% 
of those last mile trips were shifted to sustainable modes, this would reduce the distance travelled by 
car by 163 million km.241 

According to the outcome of a pilot project that was commissioned in 2014 (All Ways Travelling), it 
was  found  that  more  effective  network  management  and  more  efficient  transport  of  people  through 
more efficient journeys and optimized travel choices reduce travel time.242 Relative to the baseline this 
could  lead  to  some  3%  shift  of  vehicle-km  for  passenger  cars  at  EU  level,  mainly  towards  rail  and 
road public transport. In terms of environmental impacts, it would lead to about 13 Mt CO2 emissions 
saved,  18  ktons  of  NOx-equivalents  (NOx,  CO,  HC)  and  0.1  ktons  of  particulate  matter  saved  per 
year.  

Combined Transport Directive  

Directive 92/106/EEC established common rules for promoting combined transport (CT) in the EU in 
an  effort  to  curb  the  negative  externalities  of  road  transport.  CT  is  a  multimodal  transport  with 
intermodal load units (such as containers), and in which the road leg is limited and the major part of 
the  route  is  carried  out  by  rail,  inland  waterways  or  maritime  transport.  The  objective  of  the  CT 
Directive is to promote combined transport as an alternative to road transport, and thus contributing to 
road traffic safety, reduced congestion and environmental pollution, as well as better management of 
transport resources. 

According to the REFIT evaluation of the Directive243, in terms of impacts, it has been estimated that 
the  shift  from  road  to  CT  transport  has  brought  along  an  annual  saving  of  €2.1  billion  (in  2011)  in 
external costs, of which €607 million are attributed to air pollution and €366 to GHG emissions. The 
shift from road to rail/road CT has saved in 2011 (compared to road only transport) 7.3  Mt of CO2, 
while the shift to inland waterways has saved 0.96 Mt of CO2.  

The CT Directive has considerably contributed to the development of the CT. The CT operations in 
the  EU  have  quadrupled  since  1992  and  the  CT  Directive  helped  to  shift  a  considerable  amount  of 
freight away from road. However, the general freight transport volumes have grown even more, and 
thus it has not been possible to considerably reduce the share of road transport. In addition, there are 
shortcomings  in  the  transposition  and  implementation  caused  by  somewhat  ambiguous  language  of 
the Directive, the diverging transposition and implementation at Member State level and the outdated 
provisions. 

241  http://ec.europa.eu/transport/themes/its/index_en.htm 
242  Source: http://ec.europa.eu/transport/themes/its/studies/doc/20140812-july9thversion-awtfinalreport.pdf 
243  SWD(2016) 140 final 

114 

 
 
                                                            
The Energy Efficiency Directive  

Directive  2012/27/EU  contains  several  provisions  of  importance  to  energy  demand  reduction  and 
management,  as  well  as  increased  use  of  renewable  electricity,  including  in  transport  sector.  They 
include inter alia: 

  Achieving new savings of 1.5% of final energy sales annually; 
  The development of National Energy Efficiency Action Plans (every three years)  – a framework 

for national strategies on energy efficiency measures in different sectors, including transport; 

  An  obligation  for  public  procurement  for  energy  efficient  products,  services  and  buildings 

(covering also the purchase of electric vehicles); 

  Provisions supporting the rollout of smart meters for electricity by 2020;  
  Provisions for encouraging demand response; 
  Provisions related to the protection of the rights of consumers to access data. 

Those actions should also support the transition of the energy system towards increased use of electric 
vehicles. A number of Member States have already envisaged actions in the transport sector in view 
of  reaching  their  national  energy  efficiency  targets  by  2020.  However,  for  the  energy  saving 
obligation, Member States were allowed to exclude the final energy consumption in transport from the 
baseline,  a  provision  which  was  used  by  all  but  one  Member  State  and  resulted  into  a  33%  lower 
baseline.244  Thus,  use  of  the  energy  saving  obligation  in  transport  sector  has  been  limited. 
Nevertheless,  Member  States  proposed  alternative  measures  targeting  end-use  in  transport  and  the 
expected cumulative savings from these measures amount to 6% of all savings by 2020. 

Urban Mobility / Smart Cities  

The  EU  urban  mobility  policy  is  summed  up  in  the  2013  Urban  Mobility  Package,  comprising  a 
Communication  and  Guidelines  on  Sustainable  Urban  Mobility  Plans  (SUMPs),  and  four  Staff 
Working Documents on City Logistics, Access Regulation, Urban Road Safety and Urban ITS. The 
actions/initiatives announced in the Urban Mobility Package are currently under implementation and 
cover  various  non-binding  measures  that  would  help  and  encourage  cities  in  designing  and 
implementing ambitious measures through SUMPs. 

A JRC study245 estimated that the potential CO2 emissions reductions of 21 policy measures found in 
SUMPs ranges between 15 and 18 Mt of CO2 for 2030, equivalent to 7  - 8.8% emissions reduction 
compared  to  2010,  if  all  measures  were  implemented  in  the  whole  of  the  EU.  The  effects  of  the 
measures  were  defined  through  their  ability  to:  avoid  unsustainable  transport  practices;  shift  from 
unsustainable  to  sustainable  transport  modes;  improve  the  current  behaviour  in  transport  activities 
(see Table 19). 

All in all, improving urban mobility has a high potential to reduce the CO2 emissions from transport 
and especially high exceedances of air pollutants that are widespread over European urban areas. The 
SUMP concept is a way for dealing with the complexity of urban mobility which can stimulate a shift 
towards cleaner and more sustainable transport modes246, but its effectiveness will depend on the level 
of ambition of the measures adopted and the specificities of urban context. 

244   According to Article 7(1) baseline is final energy consumption (averaged for 2010-2012) to be used for the calculation of 

the 1.5% target. 

245  JRC (2013), Quantifying the Effects of Sustainable Urban Mobility Plans, available at: 

http://ftp.jrc.es/EURdoc/JRC84116.pdf  

246  Source: http://www.eltis.org/mobility-plans/sump-concept#sthash.1z4ObhGN.dpuf 

115 

 
 
                                                            
Table 19: Potential CO2 reduction by measure for urban transport 

Measure 

Avoid  
kt of CO2 

Shift                      

Improve kt of 
CO2 

kt of CO2 

Potential 
CO2 reductions  
in kt of CO2 

Investment and maintenance, including safety, 
security and accessibility 
Public transport coverage (line density, stop 
density, walking distances between stops) & 
public transport frequencies. 
Interoperable ticketing and payment systems 

255 - 319 

204 - 256 

255 - 319 

713 - 894 

408 - 511 

306 - 383 

204 - 256 

917 - 1 150 

Travel information provision systems 

 -  

 -  

153 - 192 

255 - 319 

64 - 80 

 -  

471 - 591 

 -  

Taxi services (individual and collective) 
Dedicated walking and cycling infrastructure 
investment and maintenance & Bike sharing 
schemes 
Improvement of the efficiency of city logistics by 
the use of ICT 
Measures to improve the energy efficiency and 
environmental performance of vehicles and/or 
use of alternative modes. 
Corporate, school and personalised mobility 
plans (or workplace travel plans) 
Car sharing & carpooling schemes. 

Telecommunications 

Multimodal connection platforms 

Multimodal travel information provision 

Park and Ride areas 
Reallocation of road space to other modes of 
transport, e.g. dedicated bus lanes 
Parking management 

Dynamic traffic management measures 

Low speed zones 

Information and marketing campaigns 

Promotion of eco-driving 
Congestion charging zones (area and cordon 
charging) 
Low emission zones 

Totals 

204 - 256 

170 - 213 

204 - 256 

578 - 724 

306 - 383 

408 - 511 

68 - 85 

781 - 979 

408 - 511 

 -  

544 - 681 

951 - 1 192 

153 - 192 

204 - 256 

255 - 319 

612 - 767 

408 - 511 

204 - 256 

68 - 85 

255 - 319 

306 - 383 

102 - 128 

331 - 415 

204 - 256 

(-17) - (-21) 

510 - 639 

204 - 256 

119 - 149 

102 - 128 

204 - 256 

204 - 256 

 -  

399 - 500 

204 - 256 

680 - 852 

442 - 554 

1 019 - 1 278 

306 - 383 

849 - 1 065 

510 - 639 

306 - 383 

408 - 511 

272 - 341 

985 - 1 235 

178 - 224 

204 - 256 

153 - 192 

187 - 234 

204 - 256 

340 - 426 

 -  

255 - 319 

204 - 256 

263 - 330 

204 - 256 

68 - 85 

238 - 298 

(-102) - (-128) 

51 - 64 

781 - 979 

408 - 511 

476 - 596 

629 - 788 

153 - 192 

815 - 1 022 

408 - 511 

272 - 341 

1 495 - 1 874 

204 - 256 

306 - 383 

340 - 426 

849 - 1 065 

5 742 - 7 197 

4 485 - 5 621 

4 379 - 5 488 

14 605 - 18 306 

Source: Calculated from the scorings based on experts' opinions in the KONSULT, EC-FREIGHT, EPOMM and TransProd studies.  

Note: * All negative values refer to an increase in car use because congestion and/or overall cost goes down. **- stands for not available 

If done rightly, smart transport and mobility services offer unique opportunities for decarbonisation of 
the transport sector, particularly in an urban context. However, innovations are rolled out on the back 
of slowly changing infrastructures. Markets are fraught by uncertainties about user needs, acceptance 
and  profitability.  Better  collaboration  between  public  authorities,  companies  and  research  will  help 
taking innovations from niche to mass market. This is the core objective of the European Innovation 
Partnership on Smart Cities and Communities and its action clusters, which form the backbone of the 
virtual marketplace with more than 4,000 participants registered. Among others, two initiatives were 
launched to establish dynamic market places for smart electro-mobility and smart mobility services, 
which are backed by 25 cities and 50 companies already and seeing rapid growth throughout 2016.247 

247  Source: www.eu-smartcities.eu 

116 

 
 
                                                            
With  urban  and  peri-urban  transport  often  directly  managed  by  local  and  regional  authorities, 
Covenant  of  Mayors  signatories  have  a  powerful  lever  to  act  on  decarbonising  transport,  whilst 
improving citizens' quality of life and contributing to the fight against climate change in general. Over 
55% of signatories have included transport-related measures in the Sustainable Energy Action Plans 
(SEAPs). Based on the estimated GHG emission reduction declared in signatories' SEAPs,  by 2020 
the  emissions  in  the  transport  sector  could  be  reduced  by  19%  (36  MtCO2-eq)  compared  to  the 
baseline year.248,249 

Preparing such a pipeline  of projects needs  adequate assistance.  The Commission has expanded the 
successful  EIB  ELENA  facility  to  cover  both  energy  and  transport  projects,  enabling  cities  to  plan 
large-scale proposals for roll out of innovative urban mobility action. 

Road market functioning (market access rules) – road haulage 

Regulation  (EC)  No  1072/2009  lays  down  the  provisions  to  be  complied  with  by  undertakings  that 
wish to operate on the international road haulage market and on national markets other than their own 
(cabotage). One of the objectives of the Regulation is to optimize transport operations by reducing the 
number  of  empty  runs  (trucks  travelling  unloaded).  This  potentially  could  lead  to  less  fuel 
consumption and therefore to reduced carbon emissions.     

Although empty running cannot be avoided completely, there is some scope in reducing the amount of 
empty  running  whenever  a  vehicle  registered  in  one  Member  State  drives  between  two  points  in 
another  Member  State,  as  shown  in  the  report  on  the  State  of  the  Union  Road  Transport  Market  of 
2014.250  Levels  of  empty  running  remain  high  in  national  transport  activities.  The  rate  of  empty 
running  for  domestic  hauliers  carrying  out  national  transport  is  close  to  25%.  However,  in  case  of 
foreign  trucks  travelling  national  trips  in  a  Member  State  other  than  the  one  in  which  they  are 
registered, this rate stands at close to 50%.251 

The cabotage accounted for 2.3% of national transport activity in 2014; its share has roughly doubled 
between 2004 and 2014. The strong increase in cabotage activities is partly due to the lifting in 2009 
and  2012  of  special  transitional  restrictions  on  hauliers  from  most  countries  that  joined  the  EU  in 
2004  and  2007,  respectively.252  Cabotage  grew  by  45%  between  2010  and  2014  but  overall  still 
accounts for a relatively small share of total freight activities and it is mainly concentrated in some 
Member States, such as Germany, France, Italy, the UK, Sweden, Belgium, Spain, the Netherlands, 
Austria and Denmark (see Figure 29). 

According to research by the Dutch Institute for Transport Policy253,254, increased market access could 
lead to an increase in the share of road cabotage at the EU level from 2.3% currently to 4.8%. This 
would result in a reduction of empty trips by up to 1.9% vehicle-km and a decrease in the EU CO2 
emissions of up to 1.6% (as percent of total road transport CO2 emissions).  

248  Bertoldi  Paolo  et  al.  (2015),  Do  we  have  Effective  Energy  Efficiency  Policies  for  the  Transport  Sector?  Results  and 

Recommendations from an analysis of the National and Sustainable Energy Action Plans, ACEEE.  

249  Kona  Albana  et  al.  (2015),  The  Covenant  of  Mayors  in  Figures  and  Performance  Indicators:  6-year  assessment  - 

Luxembourg: Publication Office of the European Union. 

250  COM(2014)222 
251  COM(2014)222 
252  COM(2014)222 
253  Dutch Institute for Transport Policy (2010), https://www.rijksoverheid.nl/documenten/rapporten/2010/06/08/cabotage-

and-co2-reduction; 

254  European Parliament (2013), Development and implementation of EU road cabotage 

117 

 
 
                                                            
Figure 29: Cabotage in the EU in 2014 by host country 

Source: Eurostat 

An evaluation study of the Road Haulage market was concluded in November 2015.255 It concluded 
that the relevance of Regulation (EC) No 1072/2009 to targeting environmental goals in a significant 
way is uncertain. However, the Eurostat data shows that the levels of empty running in the EU have 
reduced  substantially  after  the  cabotage  restrictions  on  new  Member  States  were  lifted  in  2009  and 
2012  (from  25%  in  2008  to  23%  in  2014),  and  segments  exposed  to  competition  (cross-trade  and 
bilateral  international  haulage)  have  much  lower  levels  of  empty  running  compared  to  market 
segments with restrictions (e.g. cabotage).  

Road market functioning - use of commercial vehicles hired without drivers 

Directive  2006/1/EC  lays  down  provisions  for  the  use  of  vehicles  hired  without  drivers  for  the 
carriage of goods by road. Hired vehicles are not only newer, greener and cleaner but they are often 
also  better  serviced.  When  combining  latest  vehicle  technologies  and  proper  vehicle  servicing,  it  is 
possible to decrease fuel costs by approximately €10,000 euro per vehicle per year, which translates 
into  approximately  18  tonnes  of  CO2  emissions  per  vehicle  per  year.  Besides  reductions  in  CO2 
emissions, external costs related to air pollution and noise from hired vehicles are significantly lower.  

The  Directive  allows  the  use  of  hired vehicles  for  the  purposes  of  cross-border  transport  operations 
between  Member  States  under  certain  conditions.256  However,  it  also  gives  Member  States  the 
possibility to restrict the use of hired vehicles  with  a total permissible laden  weight of  more than  6 
tonnes used for international transport operations or for own account operations. As a consequence of 
these restrictions, the efficiency of road transport sector is hampered and emissions are significantly 
higher  than  if  operators  were  allowed  to  freely  hire  vehicles.  The  average  age  of  hired  or  leased 
vehicles is 4-6 years below that of the overall fleet. 

An  internal  ex-post  evaluation  study  was  concluded  in  March  2016.  The  evaluation  found  that  the 
average  age  of  the  vehicle  fleet  in  countries  with  restrictions  on  the  use  of  hired  vehicles  is 
significantly  higher  than  in  countries  without  such  restrictions.  Hiring  goods  vehicles  can  reduce 

255  Ricardo-AEA  (2015),  Ex-post  evaluation  of  Regulation  (EC)  No  1071/2009  and  Regulation  (EC)  No  1072/2009, 

available at:  
http://ec.europa.eu/transport/facts-fundings/evaluations/doc/2015-12-ex-post-evaluation-regulations-2009r1071-and-
2009r1072.pdf 

256  The vehicle should be compliant with national laws, the contract should relate to the hiring of a vehicle without a driver, 
the hired vehicle should be at the sole disposal of the undertaking using it during the period of the hire contract, and the 
hired vehicle should be driven by personnel of the undertaking using it. 

118 

 
 
 
                                                            
operating costs for companies by 10-15%. Moreover, they significantly increase the flexibility of the 
operators (e.g. to meet seasonal demand peaks). 

Road market functioning - promoting bus/coach transport 

Regulation  (EC)  No  1073/2009  lays  down  the  provisions  concerning  access  to  the  market  for 
international passenger transport. The regulation applies to the international carriage of passengers by 
coach and bus within the Union by carriers for hire and reward or by own-account carriers established 
in a Member State. It also regulates the cabotage operations in the course of a regular international 
service.257 

An internal ex-post evaluation is ongoing and builds on the findings of an external fact finding study. 
The  evaluation  will  amongst  other  provide  an  assessment  of  whether  market  opening  led  to  the 
creation  of  an  internal  market  and  whether  the  objectives  of  fair  competition  and  modal  shifts  are 
achieved. Preliminary results of the fact finding study confirm that access to the market for domestic 
regular  coach  services  is  restricted  in  some  Member  States  in  order  to  protect  rail  services  and 
incumbent  providers  in  the  bus,  coach  and  taxi  sectors.  Coach  operators  suffer  from  discriminatory 
access  to  terminals  at  national  level.  The  market  opening  strategies  adopted  were  inconsistent 
amongst Member States leading to divergent structures ranging from fully open markets to partially 
restricted.  This  created  an  uneven  playing  field  for  international  services  and  conditions  of  unfair 
competition on national markets. 

Eco-driving  

Directive  2003/59/EC  establishes 
training 
requirements for drivers who are nationals of Member States or who are working for an undertaking 
based  in  the  European  Union.  The  environmental  impacts  of  the  Directive  come  from  fuel  and 
corresponding emission savings as a result of eco-driving courses.  

initial  qualification  and  periodic 

the  mandatory 

The evaluation of the Directive was completed in 2014.258 The assessment of its effects on a yearly 
potential reduction of fuel use ranges between 2 and 4%. The yearly reduction in direct costs linked to 
fuel savings is estimated to total between €4,032 million and €6,862 million, based on 2013 data. 

Speed limiters 

Limiting  the  vehicle  speed  of  road  vehicles  by  installing  speed  limitation  devices  constitutes  a 
measure  to  improve  road  safety,  and  to  reduce  greenhouse  gas  emissions,  pollutant  emissions  and 
traffic  noise.  Directive  92/6/EEC  requires  speed  limitation  devices  to  be  installed  on  large  heavy 
goods  vehicles  and  buses  (N3  and  M3  vehicles).  In  2002,  the  scope  of  the  "Speed  Limitation 
Directive"  was  extended  by  Directive  2002/85/EC,  which  obliges  all  heavy  commercial  vehicles 
(HCVs), so also N2 and M2 vehicles, to be equipped with speed limiters. 

An  evaluation  was  completed  in  2013.259  The  effects  on  emissions  were  estimated  by  comparing 
speed profiles. Both a lower average speed and a less dynamic speed profile lead to lower emissions. 

257  Coach and bus transport has important advantages, in terms of CO2 emissions per passenger transported, over passenger 
car. The average CO2 emissions per passenger of coach and bus transport (36.9 gCO2/pkm) is significantly lower than 
passenger cars (120.1 gCO2/pkm). 

258  Panteia and TML (2014), Ex-post evaluation study report - Study on the effectiveness and improvement of the EU 

legislative framework on training of professional drivers, available at: http://ec.europa.eu/transport/facts-
fundings/evaluations/doc/2014_ex_post_evaluation_study_training_drivers_en.pdf  

259  TML et al. (2013), Ex-post evaluation of Directive 92/6/EEC on the installation and use of speed limitation devices for 

certain categories of motor vehicles in the Community, as amended by Directive 2002/85/EC, available at: 
http://ec.europa.eu/transport/road_safety/pdf/vehicles/speed_limitation_evaluation_en.pdf  

119 

 
 
                                                            
The final impacts on emissions depend on the changes in driving speeds, which depend on the way 
the EU Directive is implemented by the various EU Member States. Depending on the posted speed 
limits in Member States, the decrease in average speed on motorways was estimated to lie between 
1% and 3% due to the implementation of the speed limiter.  

The  analysis  showed  that  for  the  EU  as  a  whole  the  introduction  of  speed  limiters  resulted  in  a 
reduction of the total CO2, NOX and particulate matter emissions of heavy goods vehicles of about 1% 
(between  0%  and  2%  in  function  of  posted  speed  limit).  This  corresponds  overall  to  a  reduction  of 
CO2  by  326  ktons,  of  NOx  by  3  ktons  and  particulate  matter  of  0.049  ktons.  The  reduction  can  be 
decomposed  into  two  components.  The  first  one  is  a  lower  average  velocity  with  a  lower  rolling 
resistance  and  air-drag.  The  second  component  is  lower  dynamics  with  less  braking,  which  will 
decrease  CO2  emission  as  well,  but  will  primarily  affect  the  pollutant  emissions  which  are  more 
dependent on dynamics. 

Rail Freight Corridors 

Regulation (EU) No 913/2010 lays down rules for the establishment and organization of international 
Rail Freight Corridors (RFCs). The general objective of the Regulation is to develop a European rail 
network for competitive freight, in order to boost rail freight in terms of volume, market share, quality 
and  reliability.  Nine  initial  corridors  were  designated  in  the  Regulation.  Six  of  the  nine  RFCs  are 
operational since 2013, the remaining three become operational at the end of 2015.260 

The RFCs form the rail freight backbone of the multimodal Core Network Corridor of the EU. They 
are a key initiative of the Commission to achieve a truly Single European Rail Area for rail freight; 
the  Commission  is  providing  co-funding  for  their  activities  through  the  Connecting  Europe  Facility 
(CEF).  The  RFCs  foster  cooperation  across  borders  both  at  the  level  of  Member  States  and  rail 
infrastructure managers and strengthen the involvement of users in the development of the European 
rail  freight  system,  most  importantly  through  Advisory  Groups  for  Railway  Undertakings  and 
Terminals. The RFC concept aims at providing capacity of good quality for international freight trains 
by  co-ordinating  capacity  planning,  traffic  and  infrastructure  management  and  setting  up  Corridor 
One-Stop-Shops as single contact points for the customers. 

The  impact  assessment  carried  out  in  2008261  estimated  for  the  ERIM  network262  that  the 
implementation of RFCs would lead to an increase of rail freight traffic of about 3.4 to 5.1% and a 
decrease in road freight transport of about 1.1 to 1.6% by 2020 relative to the baseline. In terms of 
emissions reduction, the impacts are estimated at 0.7 to 1.1 Mt CO2. In addition, the measure would 
result in 3.8 to 5.7 kt of NOx reduction, 0.08 to 0.1 kt of PM, and 1.1 to 1.6 kt of SO2 reduction. 

An evaluation of the Regulation is ongoing and looks at the extent to which the expected impacts have 
materialised.  The  assessment  will  make  use  of  the  available  annual  corridor  reports  for  2013  and 
2014.263 From these reports, two corridors report an annual increase of rail traffic between 2% and 3% 
in 2013 and 2014.  

260  Source: http://ec.europa.eu/transport/modes/rail/news/2015-11-10-rail-freight-corridors_en.htm 
261  SEC(2008) 3028  
262  The European Rail Infrastructure Masterplan (ERIM) network is constituted by the major rail freight traffic routes. 
263  Source: http://www.rne.eu/rail-freight-corridors-rfcs.html 

120 

 
 
                                                            
Fourth railway package  

Rail  is  a  vital  part  of  the  EU  transport  system,  with  a  key  role  in  addressing  rising  traffic  demand, 
congestion,  fuel  security  and  decarbonisation  but  many  European  rail  markets  are  still  facing 
stagnation  or  decline.  Therefore,  in  January  2013  the  Commission  put  forward  the  Fourth  Railway 
Package  that  proposes  to  open  up  domestic  passenger  markets  to  competition  and  to  remove 
remaining  legal,  institutional  and  technical  obstacles  in  order  to  foster  performance  of  the  railway 
sector  and  its  competitiveness.264  The  'technical  pillar'  of  the  package  was  adopted  in  May  2016265 
and,  in  view  of  the  provisional  agreement  on  the  'market  pillar'  in  April  2016266  the  legislative  acts 
under this pillar may be adopted soon. 

The  package  will  contribute  to  completing  the  European  Single  Railway  Area,  result  in  improved 
efficiency of the rail transport system and foster modal shift.267 According to the impact assessment 
accompanying the package268, passenger rail activity would increase by 3.8 to 16.4 billion passenger-
kilometres (Gpkm)269 relative to the baseline by 2035270,271, of which 2.3 to 2.7 Gpkm will come from 
high  speed  rail.  The  expected  modal  shift  would  have  an  increasing  positive  effect  on  congestion 
levels of roads and is likely to reduce societal costs.  

Since rail transport is among the most energy efficient modes, larger volumes of rail transport flows 
should  also  lead  to  a  reduction  in  the  overall  energy  consumption  with  positive  impacts  on  GHG 
emissions.  The  impact  on  emissions  will  also  depend  on  the  degree  of  electrification  of  the  rail 
system.  According  to  the  impact  assessment272,  the  package  could  achieve  0.3  to  1.1  Mt  of  CO2 
emissions savings annually273 by 2035, resulting in €15 to 63 million net present value (NPV) of CO2 
emissions saved. The package would bring clear benefits to passengers in terms of improved services, 
increasing  choice.  Overall,  it  would  lead  to  financial  savings  for  citizens  and  companies  by  2035, 
estimated to be in the order of €34 to 43 billion (net present value).  

NAIADES II  

Barges  are  amongst  the  most  climate-friendly  and  energy  efficient  forms  of  transport  but  currently 
they  only  carry  about  6%  of  European  cargo  each  year.274  Inland  waterway  transport  has  also  clear 
advantages as regards low congestion, low noise and accident levels. However, the potential of inland 
waterways  is  not  sufficiently  exploited.  Even  on  the  EU’s  main  waterway  axes,  the  Rhine  and  the 
Danube, there is still a lot of spare capacity, contrary to the road and rail networks which are heavily 
congested. 

264  Source: http://ec.europa.eu/transport/modes/rail/packages/2013_en.htm 
265  OJ L 138 of 26 May 2016. 
266  See: http://europa.eu/rapid/press-release_MEMO-16-1383_en.htm  
267  The  impact  of  the  fourth  railway  package  on  modal  shift  is  likely  to  be  proportionate  to  the  impact  on  the  level  of 

competition and the level of activity in the railway sector. 

268  SWD(2013) 10 final 
269  The 16.4 Gpkm represent a 6% increase of passenger-km on top of the baseline developments. 
270  SWD(2013) 10 final /Part 1 
271  The results are based on the assumption that on average, competent authorities would take 50% of the potential savings 

of competitive tendering out of the rail industry and “reinvest” the remaining 50% in capacity and/or quality.  

272  SWD(2013) 10 final /Part 1; SWD(2013) 10 final /Part 4 
273  The impact on greenhouse gas emissions is measured in terms of million tonnes of CO2 reduction (above the baseline) 
and the equivalent NPV of annual CO2 emissions saved. The reduction in CO2 emissions is derived from estimates of 
traffic shift from other more carbon-intensive transport modes (modal shift from road and air). 

274  Source: http://europa.eu/rapid/press-release_IP-13-824_en.htm 

121 

 
 
                                                            
The  Commission’s  response  to  this  challenge  is  formulated  in  the  NAIADES  II  Communication 
adopted  in  September  2013.275  The  main  areas  of  intervention  of  NAIADES  II  are  quality 
infrastructure,  quality  through  innovation,  smooth  functioning  of  the  market,  environmental  quality 
through  low emissions,  skilled  workforce  and  quality  jobs,  integration  of  inland  waterways  into  the 
multimodal logistics chain. Interventions to make inland navigation more efficient under NAIADES II 
will attract  more freight to energy efficient inland waterways. For instance,  a  macro  analysis of the 
market  potential  in  the  continental  cargo  market276  estimates  that  if  only  for  the  segment  of 
intercontinental  container  cargo  the  untapped  potential  would  be  realised,  the  overall  volumes 
transported  in  the  EU  by  inland  waterway  transport  would  increase  by  17%.  Such  increases  can  be 
captured by the sector without major investments. Free capacity is still available on the EU’s inland 
waterways.  Even  on  the  Rhine,  the  EU’s  busiest  river  in  the  EU’s  industrial  heartland,  transport 
density  could  be  further  increased  by  100%  without  recourse  to  major  infrastructure  works. 
Combining  this  with  actions  to  further  improve  the  energy  efficiency  of  inland  navigation  through 
digitalisation  and  the  introduction  of  LNG  renders  NAIADES  II  an  important  contributor  to  the 
decarbonisation of transport. The NAIADES II package has been complemented at the end of 2014 by 
the  proposal  for  a  Regulation  on  requirements  relating  to  emission  limits  and  type-approval  for 
internal combustion engines for non-road mobile machinery (NRMM Regulation).277 

The  analytical  document  accompanying  the  2013  package278,  showed  that  by  2030  CO2  emissions 
could be reduced by 0 to 11%, NOx emissions by 54 to 86% and PM emissions by 58 to 92% relative 
to the baseline. Overall, the lower emissions would lead to an external cost decrease, as compared to 
the  baseline  of  €14  to  23  billion  (28  to  45%).  For  inland  waterways,  both  impact  assessments 
accompanying the NAIADES II package and the NRMM Regulation draw on a study undertaken by 
Panteia  in  2013.279  NAIADES  II  covers  the  period  2014-2020  and  will  be  reviewed  in  2017  with  a 
view to renew the programme in 2019.  

Accomplishing the internal market for inland waterway transport  

Under  NAIADES  II,  two  legislative  proposals  have  been  adopted  by  the  Commission  to  harmonise 
requirements  for  inland  waterway  vessels  and  recognise  the  professional  qualifications  in  inland 
navigation. These proposals address the existing fragmentation of legal frameworks and the ensuing 
barriers to free movement of labour and inland waterway transport services. Both proposals will help 
to  make  inland  waterway  transport  more  attractive  and  efficient,  contributing  to  the  goals  of 
NAIADES II.  

275  Source: http://ec.europa.eu/transport/modes/inland/promotion/naiades2_en.htm 
276  Source: http://www.naiades.info/news-and-events/markets/macro-analysis-of-the-market-potential-in-the-continental-

cargo-market/ 

277  NOx  and  PM  emissions  from  inland  waterways  have  been  subject  to  EU  standards  since  the  early  2000s.  They  are 
currently governed by the Stage IIIA standards under the NRMM Directive and the CCNR 2 standards under the CCNR 
Regulations. Emissions of some pollutants, such as ultra-fine particulates, are currently not regulated. Inland waterways 
standards are less stringent than the EURO VI standards that currently apply to heavy-duty road vehicles. Also, inland 
waterways engines have a long lifetime and therefore only a few of them are currently subject to emission standards. The 
Stage V emission standard retained in the NRMM Regulation proposal sets ambitious emission reduction targets for the 
inland waterways sector – for new engines - and is based on the principle of a staggered effort profile: stringent emission 
standards for vessels with very big engines, less stringent yet still demanding standards for vessels with engines in the 
mid-size range and least stringent standards for engines in the lowest size range. 

278  SWD(2013) 324 final 
279  Panteia et al. (2013), Contribution to impact assessment of measures for reducing emissions of inland navigation, 

available at: http://ec.europa.eu/transport/modes/inland/studies/doc/2013-06-03-contribution-to-impact-assessment-of-
measures-for-reducing-emissions-of-inland-navigation.pdf 

122 

 
 
                                                            
Digital Inland Waterway Area 

The  Commission  Communication  on  a  Digital  Single  Market  Strategy  highlights  the  unprecedented 
opportunities digitalisation offers to economic sectors, such as transport. Digitalisation also supports 
decarbonisation  by  shifting  freight  transport  from  road  to  the  water.  The  Digital  Single  Market 
Strategy  announces  the  Digital  Inland  Waterway  Area  (DINA)  as  a  platform  to  interconnect 
information systems on infrastructure, people, vessels, management and cargo components in inland 
waterway transport. The interconnected approach will make inland waterway transport more efficient 
and attractive by developing ITS enabled tools for supporting vessel management and operations and 
for cargo tracking and tracing, by linking workers-related data with vessel operations and by devising 
strategies for improved data collection through data reuse and smart monitoring-enabled vessels. This 
should result in increased use of energy-efficient inland waterways.  

Regulation on digital tools related to work in inland navigation  

In  its  2016  proposal  on  the  recognition  of  professional  qualifications  in  inland  navigation,  the 
Commission has stated its intention to examine the possibility of introducing an electronic version of 
service  record  books  and  logbooks,  as  well  as  electronic  professional  cards  incorporating  Union 
certificate  of  qualifications.  In  doing  so,  the  Commission  will  take  existing  technologies  in  other 
modes  of  transport  into  account,  in  particular  road  transport  (tachograph).  The  digitalization  of 
documents  and  other  tools  aimed  at  verifying  compliance  with  work-related  legislation  in  inland 
waterway  transport  has  the  objective  to  further  reducing  administrative  burden  whilst  rendering  the 
documents less prone to tampering. This should also result in increased use of energy-efficient inland 
waterways.  

River Information Services  

Directive  2005/44/EC  on  River  Information  Services  (RIS)  establishes  a  framework  for  the 
deployment and use of harmonized River Information Services in order to support safe, efficient and 
environmentally  friendly  inland  waterway  transport  that  smoothly  interacts  with  other  transport 
modes. An evaluation of the RIS Directive has been concluded in 2014.280 In terms of impacts, it was 
estimated that RIS implementation by 2011 has brought annual benefits in terms of fuel savings and 
GHG emissions of 1 to 2%. It resulted in reduced costs of €2.9 to 7.1 million per year for fuel savings, 
€4.1  to  8.2 million  for  air  pollutant  emissions  and  €0.5  to 1.0  million  per year  for  GHG  emissions, 
based on 2011 data. Increased safety benefits were estimated at €4 million. Due to differences in the 
pace of RIS implementation in Member States and corridors, key RIS technologies and services are 
not  yet  fully  deployed.  As  a  result,  the  benefits  from  the  implementation  of  those  technologies  and 
services have not yet fully materialized.  

Ports Policy  

On  23  May  2013,  the  Commission  adopted  a  strategy  on  maritime  ports  aimed  at  improving  port 
operations and onward transport connections at 329 key seaports in the EU.281 As part of this strategy, 
the  Commission  proposed  a  Regulation  on  the  provision  of  ports  services  and  the  transparency  of 
public funds and port charges.282 The European Parliament and the Council reached an agreement on 

280  Panteia (2014), Evaluation for RIS implementation for the period 2006-2011, available at: 

http://ec.europa.eu/transport/modes/inland/studies/doc/2014-07-evaluation-of-ris-implementation-main-report.pdf 

281  COM(2013) 295 final 
282  COM (2013) 296 final 

123 

 
 
                                                            
27  June  2016  and  the  rules  are  expected  to  be  finally  adopted  by  the  end  of  2016.  Ports  make  an 
important part of the short sea shipping costs.283  

By  making  port  operations  and  connections  more  efficient,  this  strategy  and  these  new  rules  will 
improve the attractiveness of short sea shipping as energy efficient alternative to road transport, hence 
reducing  congestion  and  CO2  from  transport.  According  to  the  impact  assessment  total  inland 
transport  will  be  reduced  by  5,996  million  tonne  kilometres,  of  which  2,634  million  will  be  shifted 
from road haulage trips over 300 km long.284  

Moreover, this strategy promotes the recourse to port charges to provide financial incentives for more 
environmental  friendly  and  energy  efficient  shipping  operations.  The  new  regulation  legally 
authorises port charges to integrate external costs and to vary  them  according to environmental and 
climate  goals.  The  Commission  has  also  undertaken  to  provide  guidelines  and  promote  a  more 
consistent application of such environmental port charges at a European or regional level in order to 
maximise their effectiveness in stimulating investments in cleaner and more energy efficient shipping 
technologies.  Such  charging  policy  can  in  particular  accelerate  the  deployment  of  LNG  in  shipping 
and on-shore supply of power. 

Short Sea Shipping and the concept of Motorways of the sea 

The  2001  Transport  White  Paper  introduced  the  concept  of  Motorways  of  the  Sea  with  a  view  to 
revive short sea shipping and thereby facilitate modal shift from land transport modes. The concept 
was supported by a range of funding schemes, in particular the TEN-T and Marco-Polo programmes. 
The  Commission  has  commissioned  a  study  with  a  view  to  assess  how  to  further  improve  the 
competitiveness  of  short  sea  shipping.  First  results  of  this  study  call  for  further  simplifying  of 
administrative procedures, in particular through the development of an  EU maritime single window, 
for  improving  cooperation  between  maritime  stakeholders  as  well  as  with  the  rest  of  the  logistics 
chain through the use of digital technologies, and increasing further the demand for short sea shipping 
services.  

Aviation - Single European Sky 2+ and other initiatives 

Based on the lessons learned during the implementation of the 2009 SES II-package and the need to 
address  remaining  overlaps  in  legislation,  the  European  Commission  proposed  in  June  2013  an 
interim  update  of  the  SES  rules,  called  Single  European  Sky  2+  (SES2+),  which  envisaged  better 
safety  and  oversight,  better  Air  Traffic  Management  Performance,  new  business  opportunities  in 
support  services  and  enabled  industrial  partnerships  in  Functional  Airspace  Blocks  (FABs).285  The 
main  objectives  of  the  package  were  to  improve  performance  of  air  navigation  service  providers 
(ANSP) in terms of efficiency and to improve the utilisation of ATM capacity. 

The Single European Sky 2+ is currently pending adoption in the Council. Emissions from aviation 
accounted for 3.7% of total CO2 emissions in Europe in 2012286 of which approximately 6% can be 
influenced  by  the  European  Air  Navigation  Services  (ANS),  i.e.  0.2%  of  the  total  emissions.287  Air 
pollutants (NOx) from aviation have also been increasing in the EU, from 1.5% in 1990 of total EU 

283  Source: http://ec.europa.eu/transport/modes/maritime/news/doc/2016-06-27-ports/2016-06-27-memo-ports-

regulation.pdf 
284  SWD(2013) 181/2 
285  COM(2013) 409 final; COM(2013) 410 final 
286  Includes international bunkers. Source: EEA. 
287  Eurocontrol  (2015),  Performance  Review  Report.  An  Assessment  of  Air  Traffic  Management  in  Europe  during  the 

Calendar Year 2014 

124 

 
 
                                                            
emissions  to  6.3%  in  2013.288  Any  improvement  in  flight  efficiency  may  result  in  corresponding 
reduction  in  emissions.  The  average  en-route  extension  was  4.6%  of  the  routes  flown  in  2011  and 
each 0.1% improvement in that extension reduces fuel burn by 30,000 tons, which translates to 92,000 
tonnes of CO2 as well as a proportionate amount of reduction in NOx and particulate matter. Even if 
we assume that only the en-route part is affected and no improvements in the interfaces with airport 
terminal  areas  can  be  achieved,  that  would  correspond  to  a  potential  3%  (instead  of  4.6%)  route 
extension and CO2 reductions of 2.76 Mt.289  

In  addition,  92  European  airports  are  currently  participating  in  the  Airport  Carbon  Accreditation 
programme, and 20 of these airports are carbon neutral.290 

A  new  EU  Regulation  on  managing  noise-related  operating  restrictions  (Regulation  (EU)  No 
598/2014)  will  ensure  that  best  practices  and  evidence-based  decision  making  on  operating 
restrictions  will  be  applied  throughout  Europe  from  June  2016.  The  EU  is  also  adopting  a  new 
international noise standard to be applied to new types of large aircraft from 2017.291 

Carbon footprinting of transport services 

Harmonized carbon footprinting enables companies and customers to objectively compare the GHG 
performance of different transport services. The development of harmonised methodologies will first 
be supported through H2020.292 

It is estimated that companies that measure and report their carbon footprint could reduce their CO2 
emissions by 10 - 15%293 based on the results delivered by the Dutch "Lean & Green" programme.294 
Carbon  footprinting  creates  a  level  playing  field  between  the  market  players  and  more  market 
transparency; informed decisions lead to decreases of pollutant emissions and increased demand for 
innovative technological.  

Behavioural changes 

Since the 2011 White Paper strategy some genuinely new societal developments have emerged. 

Sharing economy in transport 

Taxis  and  car-sharing  are  a  form  of  collective  transport  carried  out  with  light  passenger  vehicles 
(carrying  up  to  9  persons  including  the  driver).  As  such  they  represent  a  viable  alternative  to  low-
occupancy  passenger  car  transport.  The  idea  of  sharing  things  is  not  new,  but  the  scale  of  it  has  - 
thanks to new IT technologies - pushed the concept of sharing to an entirely new dimension, leading 
to new disruptive business models. In particular, mobility has been a fast developing segment of the 
shared economy, making it a challenge for legislators to fully address all the issues related to it. 

288  European Union emission inventory report 1990–2013 under the UNECE Convention on Long-range Transboundary Air 

Pollution (LRTAP) 

289  SWD  (2013)  206  final,  Draft  Impact  Assessment  accompanying  the  document:  Legislative  proposals  to  update  the 

regulations on Single European Sky - SES2+  

290  EEA, EASA and Eurocontrol (2016), European Aviation Environmental Report 2016. 
291  COM(2015) 598 final 
292  H2020, Work Programme 2016 – 2017: MG-5.3-2016: Promoting the deployment of green transport, towards Eco-labels 
for logistics; available at: http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/2099-
mg-5.3-2016.html 

293  CE Delft et al. (2014), Fact-finding studies in support of the development of an EU strategy for freight transport logistics 

Lot 3: Introduction of a standardised carbon footprint methodology, available at: 
http://ec.europa.eu/transport/themes/strategies/studies/doc/2014-12-introduction-of-a-standardised-carbon-footprint-
methodology.pdf, p. 103 

294  Source: http://lean-green.nl/lean-and-green/  

125 

 
 
                                                            
Within  a  short  period  of  time  car-sharing  has  become  a  major  global  industry.  In  2014,  car  share 
programs were available in over 30 countries, and in hundreds of cities. The success of one-way car-
sharing services is encouraging new companies to consider offering this service model (OEMs, rental 
or  leasing  companies,  mobility  solution  providers).  In  particular,  several  car  manufacturers  have 
entered  this  market  with  good  results,  building  substantial  membership  levels  in  only  a  few  years. 
Some estimates predict that global car-sharing services revenue will grow from $1.1 billion in 2015 to 
$6.5 billion in 2024.  

Studies  conducted  for  the  providers  of  such  services  highlight  the  benefits  of  higher  efficiency, 
including less congestion and reduced need for passenger cars.295 At the same time, increased use of 
on-demand  mobility  by  car  may  take  away  traffic  from  the  traditional  forms  of  collective  public 
transport, which may result in an increase rather than a decrease of emissions. However, a recent case 
study by International Transport Forum (ITF)296 on the city of Lisbon, looking into various options297, 
shows a potential CO2 emission reduction of 18 to 30% and up to 18% reduction in vehicle-kilometres 
driven. In addition, MOMO car sharing project298 has shown that the difference between the specific 
CO2 emissions of several car-sharing fleets in comparison to personal cars (new or existing vehicles) 
lies between 15 and 20% with the highest being almost 25%. This is because car-sharing vehicles are 
newer than most personal vehicles. 

In addition, bike-sharing schemes (public rental bikes) have been significantly gaining in popularity in 
cities across the EU in the recent years. They have potential to bring about a positive modal share and 
reduce emissions by reducing the demand for car usage. Gradual introduction of electric bikes to the 
bike-sharing schemes further increases the number of users and the related benefits.  

Currently these trends are taking place without intervention at EU level. In order to better understand 
rules  governing  taxi  and  similar  services  as  well  as  market  realities  in  the  EU  Member  States,  the 
Commission has launched a fact-finding study, which aims at identifying and quantifying trends and 
developments  in  these  markets.  It  also  looks  into  new  and  innovative  services  such  as  electronic 
platforms that link passenger service providers with passengers.  

Automation and connected vehicles 

New  technologies  have  allowed  for  driver  assistance  and  autonomous  operations  of  vehicles  and  in 
the  future  could  lead  to  the  emergence  of  fully  automated  cars.  This  technological  change  is  taking 
place  very  rapidly  and  vehicle  technology  is  practically  ready  for  deployment,  while  there  is  still  a 
lack of harmonised framework conditions (legal, co-existence with conventional means of transport, 
social  implications,  required  interoperable  infrastructure  and  interfaces).  The  shift  to  automation 
concerns all modes of transport, with highest public attention currently aimed at aviation (drones or 
unmanned aerial vehicles) and road vehicles.  

Concerning  drones,  the  technology  is  already  there,  fully  functional  and  offering  a  multitude  of 
applications. The world market is forecast to more than double to €4 billion per year by 2022. Europe 
is expected to represent about 25% of the world market.  In terms of jobs, for Europe, employment is 

295  E.g.  Economic  benefits  of  peer-to-peer  transport  services,  Copenhagen  Economics,  study  commissioned  by  Uber, 

August 2015. 

296  ITF (2015), A New Paradigm for Urban Mobility How Fleets of Shared Vehicles Can End the Car Dependency of Cities 
297  Three  options are  assessed:  Simple  Modal  Diversion  scenario  (trips  by  both  private car and  taxi are  all taken  over by 
shared taxis; all current trips by public transport (bus, metro, rail), continue to be made as before), Ridesharing scenario 
(users  chose  between  the  options walking/cycling,  metro/rail  and  shared  taxis), Ridesharing  plus taxibus  scenario  (the 
additional choice of taxibus services as a mobility option is given to users). 

298  Source: https://ec.europa.eu/energy/intelligent/projects/sites/iee-projects/files/projects/documents/momo_car-

sharing_the_state_of_european_car_sharing_en.pdf 

126 

 
 
                                                            
estimated to increase to about 150,000 jobs by 2050 in manufacturing with additional jobs created in 
drone operator services employment.    

With respect to autonomous cars, similar developments can be observed. Relevant vehicle technology 
is largely available or close to market readiness. Progress in achieving required framework conditions 
is  expected  to  be  more  gradual:  road  infrastructure,  legal  and  ethical  issues,  co-existence  with 
conventional cars and appropriate use of interoperable communication and information technologies 
are needed. The introduction of cooperative ITS is partially a parallel trend. Full automation in certain 
areas (i.e. highways) could already be operational in the near future. Various companies and countries 
are running pilot projects for both passenger cars and trucks in anticipation of this substantial change. 

Despite the existence of technologies, the legislative framework is lagging behind. This is mainly due 
to  the  fact  that  some  issues  are  not  fully  resolved  at  the  moment,  in  particular  security,  liability, 
privacy protection (especially in case of drones), employment (truck and bus drivers, pilots etc.) and 
safety.  There  will  be  a  need  for  a  drastic  shift  in  the  approach  and  management  of  risk  in  order  to 
allow for autonomous vehicles to fully enter the transport market. 

The High Level Group on the Competitiveness and Sustainable Growth of the Automotive Industry in 
the  European  Union  (GEAR  2030)299  will  assist  the  Commissions  in  setting  up  an  EU-level  action 
plan in order to facilitate the roll out of autonomous and automated vehicles, taking into account the 
ongoing  work  in  the  context  of  the  Cooperative  ITS  platform300  and  other  consultations  the 
Commission regularly holds with the automotive and telecom sector.  

As  to  the  net  effects  of  autonomous  and  automated  vehicles  on  CO2  emissions  and  energy 
consumption, significant  uncertainties remain  and further research is warranted. While the technical 
potential to make road transport more efficient is clearly there, this technology could also result in a 
demand increase by making long commutes less burdensome and by bringing down the cost of road 
freight. The net effect will, therefore, likely depend on the future transport policy mix. 

Digitalisation and mobility as a service 

Smartphones, apps, big data and internet give access to and enable processing huge amounts of data to 
offer  better  services  to  customers.  Data  can  be  collected  through  various  means:  ticketing  systems, 
sensors  attached  to  vehicles,  traffic  signals,  surveys,  social  media  and  smartphones  apps.  Mobile 
broadband can make this data accessible at any place and time and also brings major opportunities for 
better  passenger  services,  predictive  maintenance,  etc.  However,  it  can  also  bring  some  challenges, 
such as spectrum interferences.  

Continuous  digitalisation  has  made  it  possible  to  treat  mobility  as  a  service  (a  mobility  distribution 
model in which a customer’s major transportation needs are met by services integrating transportation 
infrastructures,  transportation  services,  information  and  payment  services,  and  others  more).  Key 
factors  to  support  the  growth  of  mobility  as  a  service  are  good  public  transport,  mobile  broadband 
roaming policy and strong broadband connections. This approach represents increased use of ICT in 
transport and the removal of barriers between different transport modes and their users, also thanks to 
the new 'shared economy' solutions. The focus is not on the transport mode, but on mobility, which is 
seen as a traveller service with physical transportation products, rather than a transportation product 

299  Source: http://ec.europa.eu/growth/sectors/automotive/policy-strategy/index_en.htm 
300  Source: http://ec.europa.eu/transport/themes/its/news/c-its-deployment-platform_en.htm 

127 

 
 
                                                            
with additional services. This concept has already been developed in Helsinki301 and is considered by 
other cities.  

Increasing role of active modes in the urban transport mix 

Walking and cycling are not new phenomena, but their importance in urban mobility has been gaining 
prominence in recent years and many observers see high potential for further expansion in new fields. 
The importance of walking as an inexpensive, emission-free, accessible for all form of mobility has 
been gaining recognition and pedestrian zones are being created or extended in various cities across 
Europe.  

Likewise, cycling is more and more considered as a mode of transport with high potential to address 
many  urban  mobility  challenges,  also  due  to  the  technological  and  societal  developments.  The 
incorporation  of  IT  technologies  allowed  for  improvement  and  increased  popularity  of  bike  sharing 
schemes.  Such  programmes  are  already  available  in 800  cities  across  the  world  and  have become  a 
part  of  the  landscape  in  many  European  cities.  Electric  power  assisted  cycles  (or  pedelecs)  make 
cycling more attractive to people who live in hilly areas or who could find it difficult or tiring to ride a 
bicycle.  Further  technological  developments  increase  the  range  of  bicycle  as  a  viable  mode  of 
transport and also make it an attractive mean for last-mile freight transportation. In addition, cycling is 
more positively perceived in the society than in the past making cycling fashionable and the growing 
number of cyclists on roads is having a snow-ball effect encouraging new people to use bicycles. 

Research  published  by  the  VUB  shows  that  up  to  68%  of  freight  within  a  20  km  radius  of  urban 
centres  could  be  distributed  by  cargo  bicycles.  This  offers  big  potential  to  reduce  CO2  and  air 
pollutant emissions in the very city centres with usually the highest density of population. 

Finally,  there  is  a  growing  evidence  base  on  the  benefits  of  walking  and  cycling  in  terms  of  lower 
congestion  and  pollution,  as  well  as  health  benefits  for  the  users.302  A  study  for  Copenhagen  has 
estimated  that  cycling  has  better  costs  and  benefits  than  both  private  and  public  transport.303 
Facilitation  of  walking  is  also  an  indispensable  integral  part  of  the  efforts  to  promote  public 
transport.304  Besides,  the  bicycle  sector  has  a  potential  to  boost  jobs  and  growth  and  support  EU 
industry through new technology and services. It is estimated that cycling related manufacturing and 
services  currently  employ  around  650,000  people  and  considering  that  EU  based  manufacturers  are 
leaders  in  electric  bike  technologies  there  is  a  big  potential  for  growth  in  the  sector.305  All  these 
factors  have  convinced  many  local  and  national  authorities  to  promote  more  active  modes  through 
infrastructure adjustments and various systems of incentives (e.g. kilometric reimbursement for bike 
use). 

Withdrawn policy initiatives  

The Commission has decided to withdraw306 the proposal to revise the Energy Taxation Directive307 
as  well  as  the  proposal  for  a  Directive  on  passenger  car  related  taxes.308  In  the  case  of  the  Energy 
Taxation  Directive,  the  draft  compromise  text  was  de  facto  void  of  all  constituting  elements  of  the 

301  Source: http://maas.fi/ 
302  Source : http://www.ecf.com/press-corner/cycling-facts-and-figures/ 
303  Gössling, S. and Choi, A. (2015). Transport transitions in Copenhagen: Comparing the cost of cars and bicycles. 

Ecological Economics, http://dx.doi.org/10.1016/j.ecolecon.2015.03.006 

304  ITF (2012), Pedestrian Safety, Urban Space and Health 
305  ECF (2014) Cycling works. Jobs and Job Creation in the Cycling Economy  
306  Commission Work Programme 2015, Annex 2, COM(2014) 910 final 
307  COM(2011) 169 final 
308  COM(2005) 261 final 

128 

 
 
                                                            
original Commission proposal. There was no agreement in the Council even on the draft compromise 
text. For the directive on passenger car related taxes, no agreement was reached in the Council.  

The Revision of the Energy Taxation Directive 

In  March  2008  the  European  Council  in  its  conclusions309  requested  the  review  of  the  Energy 
Taxation  Directive  (ETD)  to  bring  it more  closely  in  line  with  the  EU's  energy  and  climate  change 
policy.  

It  is  in  this  context  that  the  Commission  presented  its  proposal310  for  a  revision  of  Directive 
2003/96/EC, to allow Member States to make the best use of an existing instrument in the new policy 
framework. The proposal aimed at a more rational and targeted energy taxation that would contribute 
in  a  technology-neutral  manner  to  cleaner  and  more  efficient  consumption  of  energy,  therefore 
supporting sustainable growth. In a nutshell, the ETD revision: 

  proposed the rebalance of the charge between different fuels, including renewable energies, in an 

objective manner (based on energy content and on CO2 emissions); 

  was providing for a framework for CO2 taxation in the internal market and in that way put a price 

on CO2 emissions which are not covered by the EU Emission Trading System. 

The Commission services carried out an impact assessment examining the impacts of possible options 
for the revision of the Energy Taxation Directive. The revision was expected to result, among others, 
in311: 

  Better  and  more  consistent  price  signals  and  more  effective  use  of  energy  taxation  both  for 

environmental and fiscal purposes; 

  CO2  emissions  reductions  of  up  to  2%;  this  would  have  represented  about  92 Mt  CO2  of  the 

reduction effort needed outside the ETS; 

  Removing the price advantage for diesel both in the EU minima and in national rates would have 
had a rebalancing effect on the supply and demand of the fuel market. Such neutral treatment of all 
transport  fuels  would  have  provided  a  technology  neutral  appraoch  to  all  low  carbon  fuels  and 
would have also encouraged energy efficiency. 

The negotiations showed that due to a number of reasons (e.g. coverage of industries by the EU ETS, 
high  energy  prices  for  the  industry,  competitiveness  issues)  any  changes  to  the  tax  treatment  of 
industrial  heating  fuels  by  introducing  a  mandatory  CO2  tax  for  such  fuel  uses  have  very  limited 
probability of being agreed upon unanimously in the Council. On the contrary, the introduction of a 
CO2 tax on fuels used in transport is an option to be considered for the future. The discussions in the 
Council  expedited  the  need  for  simplification  and  modernization  of  Energy  Taxation  Directive,  as 
many technical and legal problems were reported. 

The Proposal on Passenger Car taxation 

The  proposal  on  passenger  car  taxation  aimed  to  improve  the  functioning  of  the  internal  market  by 
removing existing tax obstacles to the transfer of passenger cars from one Member State to another. It 
also aimed to promote sustainability by restructuring the tax base of both registration taxes and annual 
circulation  taxes,  as  well  as  by  including  elements  directly  related  to  carbon  dioxide  emissions  of 

309  European Council of 13-14 March 2008, Presidency conclusions (7652/1/08 rev.1, 20/05/2008). 
310  COM(2011) 169 final 
311  SEC(2011) 409 final 

129 

 
 
                                                            
passenger  cars.  It  would  not  have  harmonized  tax  rates  or  oblige  Member  States  to  introduce  new 
taxes, but only included an EU structure on car taxes.  

The main benefits expected: i) the total abolition of registration tax over a ten-year transitional period, 
ii) the restructuring of both registration taxes and annual circulation tax bases to include a CO2 based 
element,  and  iii)  the  establishment  of  a  registration  tax  refund  system,  would  have  represented  a 
considerable improvement in the functioning of the internal market and an important contribution to 
achieving the Community's environmental objectives. 312  

The  negotiations  showed  that  the  proposed  abolition  of  the  registration  tax  was  too  ambitious,  as  it 
represents a non-negligible source of revenues for the Member States. However, the incorporation of 
an adequate environmental element (e.g. CO2, air pollutants) in the registration and circulation taxes 
could be a possible option for unanimous support, as 24 Member States have already introduced such 
element (CO2 emissions, exhaust emissions, Euro standards, fuel consumption) into their national tax 
systems. 

The lack of political support in the Council for EU-level legislation on these matters does not mean, 
however,  that  fiscal  policy  is  not  an  important  driver  of  fuel  use,  vehicle  use  and  modal  shift.  In 
addition, fuel and vehicle taxes can contribute towards a growth-friendly tax shift. They are therefore 
important  for  attaining  national  and  EU-level  goals.  But  other  approaches  to  attain  these  objectives 
must be found.313 Whatever the future policy direction, it is clear that Member States314 will continue 
to have a central responsibility. 

Transport research and innovation 

Horizon 2020 

Achieving  the  long  term  targets  for  reducing  transport's  GHG  emissions  and  dependence  on  fossil 
fuels is extremely challenging. The paradigm shift needed in transport can only be achieved through 
extensive research and innovation. Therefore, a major emphasis of the €6.4 billion transport research 
and innovation programme under Horizon 2020315 is aimed at projects addressing energy use issues, 
both directly and indirectly.316  

The four main priorities for transport research under Horizon 2020 are: 

  Making transport more sustainable: resource-efficient transport that respects the environment; 
  Making  transport  and  transport  systems  seamless:  better  mobility,  less  congestion,  greater  safety 

and security; 

  Keeping transport competitive: European transport industry as a global leader; 

312  SEC(2005) 809 
313  First vice-president Frans Timmermans stated on the topic of withdrawing Commission proposals: "We want to achieve 
results. This Commission agrees that Europe needs to be ambitious, including on environmental and social standards. 
But it would be pointless to let the EU institutions waste time and energy on proposals which have no chance of being 
adopted – that will not deliver the results we want to see on the ground. So whenever that's the case we will think of 
other, more effective ways to achieve our common objectives. " 

314  Member  States  policies  are  summarised  in  regular  reports  such  as  Taxation  Trends  in  the  European  Union  and  Tax 
Reform in the EU Member States . The latter report also compares member states to each other, showing which member 
states have relative room for improvement. 

315  Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at 
securing Europe's global competitiveness. The goal is to ensure Europe produces world-class science, removes barriers 
to innovation and makes it easier for the public and private sectors to work together in delivering innovation. 

316  The  Horizon  2020  programme  has  been  fundamentally  changed  to  put  a  much  greater  emphasis  on  near  market 

innovation and cooperation with industry, to try and ensure a faster and broader take up of transport innovation. 

130 

 
 
                                                            
  Making transport research responsive: socio-economic research and forward-looking activities for 

policy-making. 

In  addition,  a  number  of  key  programmes  have  been  established  for  transport  decarbonisation, 
including  to  support  the  development  of  light  and  heavy  duty  electric  vehicles  (contractual  public-
private  partnership  on  European  Green  Vehicle  Initiative)  and  fuel  cells  (Fuel  Cells  and  Hydrogen 
Joint  Undertaking),  to  promote  low  carbon  and  non-polluting  transport  for  cities  (Horizon  2020 
funding  for  urban  mobility  and  smart  cities),  to  facilitate  the  market  uptake  of  liquefied  natural  gas 
(LNG)  for  heavy  duty  vehicles  (LNG  Blue  Corridors  project317  funded  under  the  7th  Framework 
Programme  ‘European  Green  car  initiative’),  to  facilitate  more  efficient  road  use,  rail  innovation 
(Shift2Rail  Joint  Undertaking)  and  more  efficient  air  transport  (SESAR  Joint  Undertaking)  and 
energy efficient aircrafts (Clean Sky 2 Joint Undertakings), with the JU's co-financed by the EU from 
Horizon 2020. These programmes are complemented by research and innovation activities related to 
key enabling technologies in the areas of new materials (e.g. lightweight materials, composites) and 
advanced manufacturing (e.g. additive manufacturing) contributing to development and production of 
new low-emission vehicles. Other research projects, supported by Member States, are underway.318,319  

Strategic Transport Research & Innovation Agenda (STRIA) and Strategic Energy Technology 
(SET) Plan 

A Communication320 on "Research and innovation for Europe's future mobility" (Strategic Transport 
Technology  Plan)  described  in  2012  issues  related  to  transport  R&I  and  presented  ideas  on  how 
innovation  could  better  serve  the  transport  and  mobility  needs  of  European  citizens  and  businesses 
whilst addressing larger societal challenges such as climate change and dependence on oil.  

In the energy sector, the European Strategic Energy Technology Plan (SET-Plan) aims to accelerate 
the development and deployment  of low-carbon  technologies. It seeks to improve new technologies 
and  bring  down  costs  by  coordinating  research  and  helping  to  finance  projects.  The  SET-Plan 
promotes research and innovation efforts across Europe by supporting technologies with the greatest 
impact on the EU's transformation to a low-carbon energy system, including in the transport sector. It 
promotes cooperation amongst EU and (H2020) associated countries, industry, research institutions, 
and the EU itself. 

The new Integrated SET-Plan Communication, adopted on 15 September 2015321, identified 10 areas 
of  action,  corresponding  to  the  4+2  Energy  Union  R&I  priorities,  where  promotion  of  strengthened 

317  12  LNG  stations  (out  of  the  planned  14)  were  in  operation  by  the  end  of  March  2016,  which  represents  18%  of  the 
present  LNG  infrastructure  at  EU  level.  120  trucks  are  being  demonstrated  and  monitored.  The  development  of 
optimised engines with an efficiency close to the diesel powertrains is also part of the project. 

318  The  "ENUBA 2"  project,  which  is  part  of  the  German  Federal Government's  beacon  project  called  "Electric  Mobility 
Concepts", is intended to lay the foundation for a new type of ecologically oriented, freight transport. A concept aimed at 
the electrification of heavy goods vehicles (HGVs) via overhead contact lines has been developed in cooperation with 
the  Scania  company  and  its  technical  feasibility  duly  tested.  The  focus  is  on  optimizing  the  integration  of  the  drive 
system and pantograph into the vehicle and on providing the necessary traffic control systems. A new, extended test road 
in  Gross  Doelln  mirroring  real-life  road  conditions  has  been  set  up  for  this  second  research  project.  Source: 
http://www.siemens.com/press/en/pressrelease/index.php 

319  The first eHighway system on a public road opened in June 2016. For the coming two years, a Siemens catenary system 
for trucks will be tested on a two-kilometer stretch of the E16 highway north of Stockholm. The trial will use two diesel 
hybrid  vehicles  manufactured  by  Scania  and  adapted,  in  collaboration  with  Siemens,  to  operate  under  the  catenary 
system. During the two-year trial, Sweden's Transport Administration Trafikverket and Gävleborg County want to create 
a  knowledge  base  on  whether  the  Siemens  eHighway  system  is  suitable  for  future  commercial  use  and  further 
deployment.  As  part  of  its  climate  protection  strategy,  Sweden  has  committed  to  having  a  fossil  fuel  independent 
transport sector by 2030. Source: http://www.siemens.com/press/en/pressrelease/index.php 

320  COM(2012) 501 final 
321  COM(2015) 6317 

131 

 
 
                                                            
cooperation  in  R&I  between  the  EU,  Member  States  and  stakeholders  (research  and  industry)  is 
necessary, in order to bring new, efficient and cost-competitive low-carbon technologies to the market 
faster  and  deliver  the  energy  transition  in  a  cost-competitive  way.  Sustainable  transport  within  a 
diversified and integrated energy system, as part of the Energy Union R&I key priorities, is primarily 
being  addressed  under  actions  7  and  8,  aiming  at  strengthening  European  competitiveness  in  the 
battery  sector  (for  e-mobility)  and  supporting  market  uptake  of  renewable  fuels.  The  process  to 
address  these  actions  includes  an  agreement  (among  industrial  and  research  stakeholders,  Member 
States and the EC) on common strategic targets and objectives and at a second stage identification of 
priority  actions,  interested  actors  and  instruments  that  will  contribute  to  the  achievement  of  the 
targets. 

The  Commission  is  also  working  on  the  Strategic  Transport  Research  and  Innovation  Agenda 
(STRIA) as part of the upcoming Communication on Energy Union Integrated Strategy on Research, 
Innovation and Competitiveness (EURICS) in order to streamline the research and innovation efforts 
and focus them on the most pressing challenges and the most beneficial actions for transport. 

 Technology state of play of renewable fuels in transport 

Renewable  electricity:  The  share  of  renewable  electricity  is  expected  to  increase  significantly  to  2020  and 
beyond. Given the move towards a low carbon electricity mix, both electrification of transport and the use of 
renewable hydrogen could contribute to the decarbonisation options of the transport sector. 

According to a JRC study based on EEA data322, around 79,000 electric vehicles (battery electric and plug-in 
hybrid electric M1 and N1 vehicles) were newly registered in the EU in 2014, up by 40 % compared to 2013 
and 175% compared to 2012. The largest number of registrations in 2014 was recorded in France (more than 
17,200 vehicles), the Netherlands (around 16,200 vehicles) and the UK (around 15,100 vehicles). Nevertheless, 
electric vehicles continue to constitute only a very small fraction of new registrations (0.7 %) and the market is 
fragmented  according  to  the  level  of  national  support  measures  in  place  (see  maps  below).  Currently,  the 
amount of electricity used in non-road transport, e.g. in rail transport, is much more pronounced. 

322  JRC (2015), Electric vehicles in the EU from 2010 to 2014 – is full scale commercialisation near?, available at: 

https://setis.ec.europa.eu/sites/default/files/reports/Electric_vehicles_in_the_EU.pdf 

132 

 
 
 
 
                                                            
Map of electric vehicles (EV) registrations per EU member state. Left side: number of registrations (M1). Right 
side: EV (M1) as share of total car registrations. All figures are based on the sum of registrations 2010 to 2014. 
Note that the scale is optimised to show differences between MS (class size not uniform). 

Advanced Biofuels: 

  Ethanol from lignocellulosics - This value chain is the one closest to achieving market deployment. There 
are  two  main  reasons  for  this:  the  number  of  competing  technologies  and  the  technology  breakthroughs 
achieved in the last years. However, fragmented fuel markets, lack of technical standards and lack of vehicle 
fleet for ethanol content higher than 10% hamper the market deployment.323  

  Hydrogenated vegetable oils (HVO) - HVO is already at commercial scale and new plants are coming on 
stream from the key technology providers NESTE and UOP/Honeywell. HVO can be used as a drop-in fuel 
in high blends in diesel and kerosene. 

  Synthetic  biofuels  for  diesel  and  kerosene  replacement  -  Synthetic  biofuels  are  still  facing  technical 
hurdles.  The  main  reason  is  that  the  corresponding  scale  for  first-of-a-kind-plants  is  larger  than  that  of 
lignocellulosic ethanol (lignocellulosic ethanol plants are economically viable from a capacity range of about 
100 to 120 ktons/y while synthetic biofuel plants are economically viable from a capacity range of about 175 
to 250 ktons/y). Synthetic biofuels can be used for both road and air transport. 

  Biofuels from algae - Algae have strong potential to provide significant quantities of biomass if the current 
projects  and  technology  advances  will  prove  successful.  Algae  technologies  are  at  the  early  stages  of 
development, however, they are making significant advances. In a relatively short period of time the industry 
was  able  to  move  to  large  scale  demonstration  and  all  3  projects  supported  under  FP7  are  on  10  ha  area. 
Algae can produce a variety of biofuels and at present algal fuels produced from combined operations with 
waste water purification, is the preferred route. Such applications are expected to enter the market by 2020. 
  Pyrolysis  oils  -  can  be  fed  directly  into  a  petroleum  refinery  after  some  upgrading  and  processed  with  oil 

thus eliminating the cost of building a dedicated plant.  

  Biofuels from microbial conversion - This value chain addresses various technologies that are at the early 
stages of development. However, they are very attractive since they are expected to have better efficiencies 
than current technologies.  

  Gaseous biofuels – Biomethane – Significant progress has been achieved directly by the industry but more 
demonstration  and  first-of-a-kind  plants  are  needed  to  ensure  the  deployment  of  this  value  chain  in  the 
market.324  

  Resources,  enzymes  and  bacteria  -  Further  scientific  work  is  needed  to  improve  the  yields  of  biomass 
resources,  improve  the  existing  enzymes  and  develop  new  types  of  conversion  bacteria  and  yeasts.  This 
work is important also in the context of bio-based economies.  

Hydrogen (renewable hydrogen can be produced from biomass or electricity) - Major car manufacturers have 
announced that fuel cell propelled cars are to be produced at commercial scale in the future; a few models are 
already  available  now.  Currently,  the  use  of  hydrogen  in  transport  is  negligible.  Some  Member  States  have 
national strategies for the deployment of hydrogen infrastructure for the coming years, therefore some market 
uptake could still be expected.  

Other alternative low carbon fuels are currently in the development phase. Fuel production from power to gas 
(methane) or power to liquid (methanol) is under development for application to heavy duty, maritime transport 
and aviation fuel.  

  Methanol  for  maritime  transport  -  Several  shipping  companies  and  ship-engine  manufacturers  (MAN, 
Wartsila and Meyer Werft) are exploring the potential use of methanol (either bio or power to gas origin) in 
ferry  operations.  Stena  is  already  operating  a  methanol  powered  ferry  from  Hamburg  to  Stockholm  and 

323  CEN is undertaking an extensive testing work for E20 under a H2020 Contract; results are expected in 3 years. 
324   CEN is developing standards for the utilisation of biomethane in vehicle engines and injection of biomethane in natural 

gas pipelines. 

133 

 
 
 
                                                            
Maersk is contracting another one. Tests have also been done with biodiesel but the preferred alternative fuel 
beyond LNG for the maritime sector appears to be methanol. In Nordic countries the MARINA project aims 
to reduce emissions and increase the use of alternative fuels in the marine sector. To do so, the project aims 
to  create  a  network  between  key  players  in  all  the  Nordic  countries  to  identify  policy  and  roadmap 
recommendations for Nordic policy and decision makers on how to increase the use of alternative fuels and 
reduce emissions from marine applications. 

Low-carbon infrastructure planning, technical, regulatory and financing aspects 

The  way  transport  infrastructure  is  shaped  has  a  decisive  impact  on  the  achievement  of 
decarbonisation  objectives  in  transport.  The  revised  TEN-T  guidelines325  set  a  range  of  binding 
standards  for  infrastructure  development  which  are  indispensable  for  clean  fleets  to  operate 
throughout Europe, as well as for transport services to become safer and more energy efficient: 

  Multimodal  infrastructure  (including  Intelligent  Transport  Systems)  has  been  given  increased 
importance.  It  is  an  enabler  of  seamless  transport  chains  across  modes  and  future-oriented 
logistics solutions. By stimulating the shift of long-distance freight traffic from road to rail and 
inland waterways, it plays a vital role in reducing the carbon footprint of transport.  

 

 

Intelligent  Transport  Systems  for  all  transport  modes  have  become  an  integral  part  of  TEN-T 
development:  ITS  for  road,  ERTMS  for  railways,  SESAR  in  the  air  and  RIS  in  the  inland 
waterways sector help reducing accidents and using infrastructure as efficiently as possible. The 
former notably contributes to reducing congestion and, thereby, emissions.  

Infrastructure equipment for innovative transport solutions – notably alternative fuel solutions (e-
mobility charging, LNG and hydrogen terminals, etc.) or automated transport concepts – are key 
to ensure a sustainable transport system.     

This  new  infrastructure  approach  contributes  at  the  same  time  at  reducing  noise  pollution  from 
transport, at improving quality of freight and passengers' services and – through the vast potential for 
innovative infrastructure equipment – also at boosting Europe's competitiveness. 

The Commission is currently preparing – under the supervision of each European Coordinator –  the 
second  generation  of  corridor  work  plans,  further  refining  the  initial  analysis  of  the  infrastructure 
needs and relevant projects, in particular to remove bottlenecks and complete cross border sections. 
The  updated  corridor  work  plan  will  especially  include  the  most  complex  elements  of  the  corridor 
activity  such  as  measuring  the  impact  on  climate  change  and  the  promotion  of  sustainability  for 
instance in urban areas and nodes (e.g. ports). 

The  efficient  completion  of  this  network  may  however  be  impacted  by  complex  regulatory  and 
administrative  arrangements,  which  can  contribute  to  increased  costs,  delay  and  uncertainty  for 
infrastructure  projects,  and  by  the  availability  of  funding  and  appropriate  financial  solutions.  In 
particular,  a  number  of  measures  would  need  to  be  considered  to  support  the  streamlining  of 
procedures  for  TEN-T  core  network  projects  with  a  view  to  facilitate  the  completion  of  the  core 
network.  The  Commission  is  currently  running  a  study  to  take  stock  of  good  practices  and  identify 
ways to simplify procedures for projects of common interest of the core network.  

Public  support,  from  EU  and  Member  States  funding  mechanisms,  to  drive  investment  into 
sustainable transport modes is essential, and the interaction within such funding mechanisms between 
infrastructure policies objectives and the EU climate change goals need to be clearly recognised. In 

325  Regulation (EU) No 1315/2013 

134 

 
 
                                                            
alignment  with  the  TEN-T  policy,  the  CEF  has  a  strong  focus  on  decarbonisation  reflected  in  the 
budgetary allocation priorities for the call for proposals agreed in the annual working programme. As 
a result, the CEF call 2014 allocated the large majority of funds, or 92% of the total envelope of €13 
billion  of  grant  co-financing,  to  environmentally  friendly  modes,  innovative  technologies  and 
investment on multimodality and ITS, and about 82% for rail and inland navigation investment alone. 
This is in line with the share of funding per mode in the previous Multiannual Financial Framework 
2007-2013. For the new programming period 2014-2020 European Structural and Investment Funds 
(ESIF)  also  provide  substantial  funding  for  the  network  industries,  specifically  supporting  the  shift 
towards  a  low-carbon  economy  including  in  multimodal  urban  transport.  The  wider  application  of 
grant  funding  from  CEF,  the  European  Structural  and  Investment  Funds  (ESIF)  and  other  EU 
mechanisms pursuing decarbonisation objectives to primarily privately financed projects ("blending") 
would help bolster the transport pipeline in more challenging and more sustainable modes of transport 
and is an effective way to maximise the impact of public resources. 

For  high  capital  expenditure  projects,  as  low-carbon  transport  infrastructure  typically  are,  the 
availability (and cost) of capital and predictability of revenue stream have a strong influence on the 
economic viability of the project which in turn has an impact on the financial viability of the overall 
project.  Cross-funding  schemes  (e.g.  the  use  of  road  charges,  for  instance,  for  the  funding  of  rail 
projects), the setting of user funds (e.g. future revenues from infrastructure, like ports, airports and toll 
highways  could  contribute  to  such  a  fund)  and  revenues  from  the  Eurovignette  or  the  Emission 
Trading  Scheme  (e.g.  under  the  so  called  Innovation  and  Modernisation  Funds)  deploying  the 
user/polluter pays principle, may be considered as financing models that complement, in some cases, 
the available funding for infrastructure. 

Another key challenge is about directing private capital to a policy priority area where the market is 
not investing sufficiently in on its own. Financial instruments that mitigate risk for private investors, 
such  as  demand  risks  related  to  the  uncertainty  on  clean  vehicles  market  penetration  and  risk 
associated  with  underlying  green  assets,  are  also  essential  to  speed  up  the  transition  to  low  carbon 
technologies and are been developed in particular under the CEF and the European Fund for Strategic 
Investment (ESFI). The inclusion of sustainable transport within the scope of the green bonds (e.g. the 
Climate  Awareness  Bonds,  currently  issued  by  the  EIB),  could  be  also  considered,  ensuring  that 
investments supported under this new category respect stringent criteria on environment integrity. 

135 

 
 
 
ANNEX  IV:  Models  and  model-based  scenarios  used  in  preparing  the 
analytical work 

Description of analytical models used 

The  model  suite  used  for  this  analytical  work  has  a  successful  record  of  use  in  the  Commission's 
transport, energy and climate policy impact assessments  – it is the same model suite as used for the 
2020 climate and energy package as well as for the 2030 climate and energy policy framework. The 
models and their linkages are briefly described in the following subsections.326 

The  full  model  suite  has  been  used  for  developing  the  EU  Reference  scenario  2016  and  the  two 
central scenarios presented in the following sections. For the more ambitious pathways/scenarios for 
decarbonising  transport  sector  the  PRIMES-TREMOVE  Transport  Model  has  been  used,  coupled 
when relevant with the PRIMES energy system model and/or the PRIMES biomass module. 

The  PRIMES-TREMOVE  Transport  Model  can  be  used  stand-alone  or  linked  with  the  entire 
PRIMES energy system model and the PRIMES-Biomass model and cover: 

  Time horizon: 2005 to 2050 (5-year time steps). 
  Geography: individually all EU Member States. 
  Transport  modes  covered:  private  road  passenger  (cars,  powered  2  wheelers),  public  road 
passenger  (buses  and  coaches),  road  freight  (heavy goods  vehicles,  light  commercial  vehicles), 
passenger  rail  (conventional  rail,  high-speed  rail,  metro),  freight  rail,  passenger  aviation  (split 
into distance classes), freight and passenger inland navigation and short sea shipping, maritime 
bunkers (when linked with PRIMES or PRIMES Maritime model). Numerous classes of vehicles 
and transport means with tracking of technology vintages.  

  Regions/road  types:  no  spatial  resolution  below  country  levels.  For  trip  classes  distinction 
between urban areas (distinguished into one metropolitan and other urban areas) and inter-urban 
areas (distinguished into motorways and other roads).  

  Time  of  day/trip  types:  off  peak  and  peak  time  travelling  relevant  for  congestion;  passenger 
trips  are  distinguished  into  non-working,  commuting  and  business  trips;  freight  split  into  bulk, 
cargo and unitized.  

  Trip  distances:  stylized  histogram  of  trip  types  according  to  distance,  representing  different 

agents' travelling habits per trip and region type.  

  Energy:  all  crude  oil  derived  fuels  (total  and  separated  by  the  different  grades),  biofuels 
(bioethanol  and  biodiesel  blends,  bio-kerosene,  bio-heavy  oil  and  DME),  CNG,  LNG,  LPG, 
electricity and hydrogen. Linkage to refuelling/recharging infrastructure by trip type.  

  Emissions:  GHG  emissions  on  a  tank  to  wheel  and  well  to  wheel  basis;  pollutants  emissions 

 

(CO, NOx, PM2.5, SOx). 
Stock of vehicles: full dynamics of stock turnover for road (more refined) and non-road transport 
means.  

326  Detailed model descriptions can be found at: http://ec.europa.eu/clima/policies/strategies/analysis/models/index_en.htm 

136 

 
 
                                                            
Overview of model inter-linkages 

The models are linked with each other in formally-defined ways to ensure consistency in the building 
of  scenarios  (i.e.  for  the  EU  Reference  scenario  2016  and  the  two  central  scenarios),  as  shown 
graphically in Figure 30.  

Figure 30: Inter-linkages between models 

Source: ICCS-E3MLab  

PRIMES 

The  PRIMES  model  is  an  EU  energy  system  model  which  simulates  energy  consumption  and  the 
energy  supply  system.  It  is  a  partial  equilibrium  modelling  system  that  simulates  an  energy  market 
equilibrium in the European Union and each of its Member States. This includes consistent EU carbon 
price trajectories. 

Decision  making behaviour  is forward  looking and grounded in micro economic theory. The model 
also  represents  in  an  explicit  and  detailed  way  energy  demand,  supply  and  emission  abatement 
technologies, and includes technology vintages. 

The core model is complemented by a set of sub-modules, of which the transport sector module and 
the  biomass  supply  module  are  described  below  separately  in  more  detail.  Industrial  non-energy 
related CO2 emissions are covered by a sub-module so that total CO2 emissions can be projected. The 
model proceeds in five year steps and is for the years 2000 to 2010 calibrated to Eurostat data. 

The  PRIMES  model  is  suitable  for  analysing  the  impacts  of  different  sets  of  climate,  energy  and 
transport  policies  on  the  energy  system  as  a  whole,  notably  on  the  fuel  mix,  CO2  emissions, 
investment needs and energy purchases as well as overall system costs. It is also suitable for analysing 

137 

 
 
 
the  interaction  of  policies  on  combating  climate  change,  promotion  of  energy  efficiency  and 
renewable energies. Through the formalised linkages with GAINS non-CO2 emission results and cost 
curves, it also covers total GHG emissions and total ESD sector emissions. It provides details on the 
Member State level, showing differential impacts across Member States. 

The  PRIMES  model  represents  energy  efficiency  by  simulating  different  measures  with  different 
techniques.  These  modelling  techniques  will  affect  the  context  and  conditions  under  which  stylized 
agents per sector, make their decisions on energy consumption. 

PRIMES  has  been  used  for  the  analysis  underpinning  the  Commission's  proposal  on  the  EU  2020 
targets (including energy efficiency), the Low Carbon Economy and Energy 2050 Roadmaps as well 
as the 2030 policy framework for climate and energy.  

PRIMES is a private model and has been developed and is maintained by E3MLab/ICCS of National 
Technical University of Athens327 in the context  of a series of research programmes co-financed by 
the European Commission.  

The model has been successfully peer reviewed328, most recently in 2011.329 

PRIMES-TAPEM & PRIMES-TREMOVE  

PRIMES-TAPEM,  operated  by  ICCS/E3MLab  is  an  econometric  model  for  transport  activity 
projections. It takes GEM-E3 projections (GDP, activity by sector, demographics and bilateral trade 
by  product,  and  by  country)  as  drivers,  to  produce  transport  activity  projections  to  be  fed  into 
from 
PRIMES-TREMOVE.  The  econometric  exercise  also 
PROMETHEUS, as well as transport network infrastructure (length of motorways and rail-ways), as 
drivers.  The  PRIMES-TAPEM  model  provides  the  transport  activity  projections  for  the  Reference 
scenario. 

fuel  prices  coming 

includes 

The  PRIMES-TREMOVE  Transport  Model  projects  the  evolution  of  demand  for  passengers  and 
freight transport by transport mode and transport mean. It is essentially a dynamic system of multi-
agent choices under several constraints, which are not necessarily binding simultaneously. The model 
consists of two main modules, the transport demand allocation module and the technology choice and 
equipment  operation  module.  The  two  modules  interact  with  each  other  and  are  solved 
simultaneously.   

The  projection  includes  details  for  a  large  number  of  transport  means,  technologies  and  fuels, 
including  conventional  and  alternative  types,  and  their  penetration  in  various  transport  market 
segments. It also includes details about greenhouse gas and air pollution emissions, as well as impacts 
on external costs of congestion, noise and accidents. 

PRIMES-TREMOVE has been used for the 2011 White Paper on Transport, Low Carbon Economy 
and Energy 2050 Roadmaps as well as the 2030 policy framework for climate and energy.330 

The  PRIMES-TREMOVE  is  a  private  model  that  has  been  developed  and  is  maintained  by 
E3MLab/ICCS of National Technical University of Athens331, based on, but extending features of the 

327  Source: http://www.e3mlab.National Technical University of Athens.gr/e3mlab/  
328  Source: http://ec.europa.eu/clima/policies/strategies/analysis/models/docs/primes_model_2013-2014_en.pdf. 
329  https://ec.europa.eu/energy/sites/ener/files/documents/sec_2011_1569_2.pdf 
330  The model can be run either as a stand-alone tool (e.g. for the 2011 White Paper on Transport) or fully integrated in the 
rest of the PRIMES energy systems model (e.g. for the Low Carbon Economy and Energy 2050 Roadmaps, and for the 
2030 policy framework for climate and energy). When coupled with PRIMES, interaction with the energy sector is taken 
into account in an iterative way. 

138 

 
 
                                                            
open  source  TREMOVE  model  developed  by  the  TREMOVE332  modelling  community.  Part  of  the 
model (e.g. the utility nested tree) was built following the TREMOVE model.333 Other parts, like the 
component on fuel consumption and emissions, follow the COPERT model.  

In the transport field, PRIMES-TREMOVE is suitable for modelling soft measures (e.g. eco-driving, 
deployment of Intelligent Transport Systems, labelling), economic measures (e.g. subsidies and taxes 
on fuels, vehicles, emissions; ETS for transport when linked with PRIMES; pricing of congestion and 
other externalities such as air pollution, accidents and noise;  measures supporting R&D), regulatory 
measures (e.g. CO2 emission performance standards for new passenger cars and new light commercial 
vehicles;  EURO  standards  on  road  transport  vehicles;  technology  standards  for  non-road  transport 
technologies),  infrastructure  policies  for  alternative  fuels  (e.g.  deployment  of  refuelling/recharging 
infrastructure for electricity, hydrogen, LNG, CNG). Used as a module which contributes to a broader 
PRIMES scenario, it can show how policies and trends in the field of transport contribute to economy 
wide  trends  in  energy  use  and  emissions.  Using  data  disaggregated  per  Member  State,  it  can  show 
differentiated trends across Member States.  

PRIMES Biomass Supply 

The biomass system model is linked with the PRIMES energy system model for Europe and can be 
either solved as a satellite model through a closed-loop process or as a stand-alone model. 

It  is  an  economic  supply  model  that  computes  the  optimal  use  of  biomass/waste  resources  and 
investment  in  secondary  and  final  transformation,  so  as  to  meet  a  given  demand  of  final 
biomass/waste energy products, projected to the future by the rest of the PRIMES model. The biomass 
supply  model  determines  the  consumer  prices  of  the  final  biomass/waste  products  used  for  energy 
purposes  and  also  the  consumption  of  other  energy  products  in  the  production,  transportation  and 
processing of the biomass/waste products.  

The  model  also  reflects  the  sustainability  criteria  currently  in  place  and  can  be  used  for  reflecting 
policies  facilitating  the  use  of  renewable  energy  sources.  After  cross  check  of  input  data  and  draft 
results, results of the biomass supply model are used to ensure consistency between PRIMES, CAPRI 
and GLOBIOM bioenergy modelling. 

The  PRIMES  biomass  supply  model  is  private  and  has  been  developed  and  is  maintained  by 
E3MLab/ICCS of National Technical University of Athens.334 

GAINS 

The GAINS (Greenhouse gas and Air Pollution Information and Simulation) model is an integrated 
assessment model of air pollutant and greenhouse gas emissions and their interactions. GAINS brings 
together data on economic development, the structure, control potential and costs of emission sources 
and the formation and dispersion of pollutants in the atmosphere. 

331  Source: http://www.e3mlab.National Technical University of Athens.gr/e3mlab/  
332  Source: http://www.tmleuven.be/methode/tremove/home.htm  
333  Several model enhancements were made compared to the standard TREMOVE model, as for example: for the number of 
vintages (allowing representation of the choice of second-hand cars); for the technology categories which include vehicle 
types using electricity from the grid and fuel cells. The model also incorporates additional fuel types, such as biofuels 
(when they differ from standard fossil fuel technologies), LPG and LNG. In addition, representation of infrastructure for 
refuelling  and  recharging  are  among  the  model  refinements,  influencing  fuel  choices.  A  major  model  enhancement 
concerns the inclusion of heterogeneity in the distance of stylised trips; the model considers that the trip distances follow 
a  distribution  function  with  different  distances  and  frequencies.  The  inclusion  of  heterogeneity  was  found  to  be  of 
significant influence in the choice of vehicle-fuels especially for vehicles-fuels with range limitations. 

334   Source: http://www.e3mlab.National Technical University of Athens.gr/e3mlab/ 

139 

 
 
                                                                                                                                                                                         
In  addition  to  the  projection  and  mitigation  of  greenhouse  gas  emissions  at  detailed  sub-sectorial 
level, GAINS assesses air pollution impacts on human health from fine particulate matter and ground-
level  ozone,  vegetation  damage  caused  by  ground-level  ozone,  the  acidification  of  terrestrial  and 
aquatic ecosystems and excess nitrogen deposition of soils. 

Model  uses  include  the  projection  of  non-CO2  GHG  emissions  and  air  pollutant  emissions  for  EU 
Reference  scenario  and  policy  scenarios,  calibrated  to  UNFCCC  emission  data  as  historical  data 
source.  This  allows  for  an  assessment,  per  Member  State,  of  the  (technical)  options  and  emission 
potential for non-CO2 emissions. Health and environmental co-benefits of climate and energy policies 
such as energy efficiency can also be assessed. 

The GAINS model is accessible for expert users through a model interface335 and has been developed 
and  is  maintained  by  the  International  Institute  of  Applied  Systems  Analysis.336  The  underlying 
algorithms are described in publicly available literature. The source code is not disclosed. GAINS and 
its predecessor RAINS have been peer reviewed multiple times, in 2004, 2009 and 2011. 

GLOBIOM-G4M 

The  Global  Biosphere  Management  Model  (GLOBIOM)  is  a  global  recursive  dynamic  partial 
equilibrium model integrating the agricultural, bioenergy and forestry sectors with the aim to provide 
policy  analysis  on  global  issues  concerning  land  use  competition  between  the  major  land-based 
production sectors. Agricultural and forestry production as well as bioenergy production are modelled 
in  a  detailed  way  accounting  for  about  20  globally  most  important  crops,  a  range  of  livestock 
production activities, forestry commodities as well as different energy transformation pathways. 

GLOBIOM covers 28 (or 50) world regions. The disaggregation of the EU into individual countries 
has been performed only recently. 

Model  uses  include  the  projection  of  emissions  from  land  use,  land  use  change  and  forestry 
(LULUCF)  for  EU  Reference  scenario  and  policy  scenarios.  For  the  forestry  sector,  emissions  and 
removals  are  projected  by  the  Global  Forestry  Model  (G4M),  a  geographically  explicit  agent-based 
model that assesses afforestation-deforestation-forest management decisions. GLOBIOM-G4M is also 
used  in  the  LULUCF  impact  assessment  to  assess  the  options  (afforestation,  deforestation,  forest 
management, cropland and grassland management) and costs of enhancing the LULUCF sink for each 
Member State. 

The  GLOBIOM-G4M  is  a  private  model  and  has  been  developed  and  is  maintained  by  the 
International Institute of Applied Systems Analysis.337  

GEM-E3 

The  GEM-E3  (World  and  Europe)  model  is  an  applied  general  equilibrium  model,  simultaneously 
representing  the  whole  world  economy,  its  major  regions  and  the  28  EU  Member  States,  linked 
through endogenous bilateral trade flows and environmental flows. 

GEM-E3  aims  at  covering  the  interactions  between  the  economy,  the  energy  system  and  the 
environment. It is a comprehensive model of the economy, the productive sectors, consumption, price 
formation  of  commodities,  labour  and  capital,  investment  and  dynamic  growth.  The  model  is 
dynamic, recursive over time, driven by accumulation of capital and equipment. Technology progress 

335  Source: http://gains.iiasa.ac.at/models/  
336  Source: http://www.iiasa.ac.at/  
337  Source : http://www.iiasa.ac.at/  

140 

 
 
                                                            
is explicitly represented in the production function. It is updated regularly using the latest revisions of 
the GTAP database and Eurostat statistics for the EU Member States. 

The GEM-E3 model has been developed and is maintained by E3MLab/ICCS of National Technical 
University of Athens338, JRC-IPTS339 and others. It is documented in detail but the specific versions 
are private.  

The  model  has  been  used  by  E3MLab/ICCS  to  provide  the  macro  assumptions  for  the  Reference 
scenario  and  for  the  policy  scenarios.  It  has  also  been  used  by  JRC-IPTS  to  assess  macroeconomic 
impacts of target setting based on GDP per capita. 

PROMETHEUS 

PROMETHEUS  is  a  fully  stochastic  world  energy  model  used  for  assessing  uncertainties  and  risks 
associated with the main energy aggregates including uncertainties associated with economic growth 
and resource endowment as well as the impact of policy actions. The model projects endogenously to 
the future the world energy prices, supply, demand and emissions for ten world regions. 

World  fossil fuel  price  trajectories  are  used  as  import  price  assumptions  for  EU  Reference  scenario 
and policy scenario modelling. 

The  Prometheus  model  is  private  and  has  been  developed  and  is  maintained  by  E3MLab/ICCS  of 
National Technical University of Athens.340 

CAPRI 

CAPRI  is  an  open  source  economic  partial  equilibrium  model  developed  by  European  Commission 
research  funds.  Operational  since  more  than  a  decade,  it  supports  decision  making  related  to  the 
Common  Agricultural  Policy  and  Environmental  policy  related  to  agriculture  based  on  sound 
scientific quantitative analysis. 

CAPRI is only viable due to its pan-European network of researchers which based on an open source 
approach  tender  together  for  projects,  develop  and  maintain  the  model,  apply  it  for  policy  impact 
assessment, write scientific publications and consult clients based on its results. It has been the basis 
of numerous peer reviewed publications. The model has been used to provide consistent agricultural 
activity  projections  for  the  EU  Reference  scenario  2016.  It  is  also  used  in  the  LULUCF  impact 
assessment. 

The CAPRI model is an open source model which has been developed and is maintained by Eurocare 
GmbH341, JRC, and other partners of the CAPRI network.  

EU Reference scenario 2016  

Scenario design, consultation process and quality assurance 

Building an EU Reference scenario is a regular exercise by the Commission. It is coordinated by DGs 
ENER, CLIMA and MOVE in association with the JRC, and the involvement of other services via a 
specific inter-service group.  

338   Source: http://www.e3mlab.National Technical University of Athens.gr/e3mlab/ 
339  Source: https://ec.europa.eu/jrc/en/institutes/ipts  
340  Source: http://www.e3mlab.National Technical University of Athens.gr/e3mlab/ 
341  Source: http://www.eurocare-bonn.de/  

141 

 
 
                                                            
The EU Reference scenario 2016 (REF2016) has been developed building on a modelling framework 
including  as  core  models  PRIMES  (PRIMES-TREMOVE  for  transport),  GAINS  and  GLOBIOM-
G4M  and  as  supporting  models  GEM-E3,  PROMETHEUS,  PRIMES  Biomass  supply  and  CAPRI 
(see prior section for details).  

For the REF2016, the model was calibrated on energy data up to year 2013 from Eurostat and other 
sources, and for agriculture and non-CO2 emission on data up to the year 2015. 

Member  States  were  consulted  throughout  the  development  process  through  a  specific  Reference 
scenario  expert  group  which  met  three  times  during  the  development  of  REF2016.  Member  States 
provided  information  about  adopted  national  policies  via  a  specific  questionnaire,  key  assumptions 
have  been  discussed  and  in  each  modelling  step,  draft  Member  State  specific  results  were  sent  for 
consultation. Comments of Member States were addressed to the extent possible, keeping in mind the 
need for overall comparability and consistency of the results. 

Quality of modelling results was assured by using state of the art modelling tools, detailed checks of 
assumptions and results by the coordinating Commission services as well as by the country specific 
comments by Member States.  

REF2016 projects EU and Member States energy, transport and GHG emission-related developments 
up to 2050, given current global and EU market trends and adopted EU and Member States' energy, 
transport, climate and related relevant policies.  

"Adopted policies" refer to those that have been cast in legislation in the EU or in MS (with a cut-off 
date end of 2014342). Therefore, the binding 2020 targets are assumed to be reached in the projection. 
This concerns GHG emission reduction targets (both for the EU ETS as well as ESD sectors) as well 
as renewables (RES) targets, including RES in transport.  

However, policies which are not yet legally implemented, e.g. those necessary to implement the 2030 
energy and climate framework, are not part of REF2016343. On this basis, REF2016 can help identify 
areas  where  the  current  policy  framework  falls  short  of  reaching  the  EU's  climate  and  energy 
objectives344. Notably, REF2016 shows that current policy and market conditions will deliver neither 
the 2030 targets nor the long-term (2050) 80-95% GHG emission reduction objective.  

REF2016  provides  projections,  not  forecasts.  Unlike  forecasts,  projections  do  not  make  predictions 
about  what  the  future  will  be.  They  rather  indicate  what  would  happen  if  the  assumptions  which 
underpin  the  projection  actually  occur.  Still,  the  scenario  allows  for  a  consistent  approach  in  the 
assessment of energy and climate trends across the EU and its Member States.   

342  In addition, amendments to two Directives only adopted in the beginning of 2015 were also considered. This concerns 
notably the ILUC amendment to the Renewables Directive and the Market Stability Reserve Decision amending the ETS 
Directive. 

343  For the period after 2020, policies are included that are part of the EU acquis, as well as important investments that are 
part of Member States' national energy plans. For instance, ETS with the Market Stability Reserve is included in REF16, 
but not the Commission's proposal for a change in the linear reduction factor post-2020. New near-zero energy buildings 
after  2020  -  as  defined  in  the  Energy  Performance  of  Buildings  Directive  -  continue  to  be  built,  as  well  as  energy 
labelling continues. Member States also gave input on planned energy investments, particularly in nuclear energy.  
344  Each new update of the Reference scenario models the projected impact of policy adopted up to the relevant cut-off date. 
Therefore, differences between two consecutive Reference scenarios , e.g. between the one from 2013 and REF2016, can 
be explained by the implications of policies adopted in the meantime as well as by changed economic and technological 
trends. 

142 

 
 
                                                            
The report " EU Reference Scenario 2016: Energy, transport and GHG emissions - Trends to 2050"345 
describes the inputs and results in detail. This section summarises the main messages derived from it, 
especially those relevant for the Energy Union framework.  

Main assumptions 

The projections are based on a set of assumptions, including on population growth, macroeconomic 
and oil price developments, technology improvements, and policies. 

Macroeconomic assumptions 

In  REF2016,  the  population  projections  draw  on  the  European  Population  Projections  (EUROPOP 
2013) by Eurostat. The key drivers for demographic change are: higher life expectancy, convergence 
in  the  fertility  rates  across  Member  States  in  the  long  term,  and  inward  migration.  The  EU28 
population  is  expected  to  grow  by  0.2%  per  year  during  2010-2030  (0.1%  for  2010-2050),  to  516 
million in 2030 (522 million by 2050). Elderly people, aged 65 or more, would account for 24% of the 
total population by 2030 (28% by 2050) as opposed to 18% today.  

GDP projections mirror the joint work of DG ECFIN and the Economic Policy Committee, presented 
in the 2015 Ageing Report346. The average EU GDP growth rate is projected to remain relatively low 
at 1.2% per year for 2010-2020, down from 1.9% per year during 1995-2010. In the medium to long 
term, higher expected growth rates (1.4% per year for 2020-2030 and 1.5% per year for 2030-2050) 
are  taking  account  of  the  catching  up  potential  of  countries  with  relatively  low  GDP  per  capita, 
assuming convergence to a total factor productivity growth rate of 1% in the long run. 

Sectoral activity projections are derived in a consistent way from these macroeconomic assumptions, 
using  the  macro-economic  modelling  tool  GEM-E3  as  well  as  econometric  estimates  for  global 
demand for energy intensive industries.  

Fossil fuel price assumptions 

Oil  prices  have  fallen  by  more  than  60%  since  mid-2014,  to  an  average  of  around  40  $/barrel  for 
Brent  crude  oil  in  the  first  four  months  of  2016.  The  collapse  of  oil  prices  has  been  driven  by  low 
demand  and  sustained  oversupply,  due  in  particular  to  tight  oil  from  North  America  and  to  the 
decision  of  the  Organization  of  Petroleum  Exporting  Countries  (OPEC)  countries  not  to  cut  their 
output  to  rebalance  the  market.  REF2016  considers  a  gradual  adjustment  process  with  reduced 
investments in upstream productive capacities by non-OPEC countries. Quota discipline is assumed to 
gradually improve among OPEC members. Thus, oil price is projected to reach 87 $/barrel in 2020 (in 
year  2013-prices).  Beyond  2020,  as  a  result  of  persistent  demand  growth  in  non-OECD  countries 
driven by economic growth and the increasing number of passenger cars, oil price would rise to 113 
$/barrel by 2030 and 130 $/barrel by 2050. This price trend resulting from PROMETHEUS modelling 
is in line with other reference sources such as the 2015 IEA World Energy Outlook. 

No specific sensitivities were prepared with respect to oil and gas price developments. Still, it can be 
recalled  that  lower  fossil  fuel  price  assumptions  tend  to  increase  energy  consumption  and  CO2 
emissions  not  covered  by  the  ETS.  The  magnitude  of  the  change  would  depend  on  the  price 
elasticities  and  on  the  share  of  taxation,  like  excise  duties,  in  consumer  prices.  For  instance,  for 
transport, the changes would be limited (depending on the magnitude of the change in the oil price) 
due to the high share of excise duties in the consumer prices but they are still expected to lead to some 

345  ICCS-E3MLab et al. (2016), EU Reference Scenario 2016: Energy, transport and GHG emissions - Trends to 2050 
346  European  Commission/DG  ECFIN  (2014),  The  2015  Ageing  Report:  Underlying  Assumptions  and  Projection 

Methodologies, European Economy 8/2014. 

143 

 
 
                                                            
higher energy consumption and CO2 emissions. They also tend to lead to lower overall energy system 
costs, as the increase in consumption is more than compensated by lower prices. Conversely, costs for 
emission mitigation could slightly increase. Different fossil price assumptions are unlikely to lead to 
significantly different impacts across Member States. 

Techno-economic assumptions 

In terms of technological developments, input assumptions are based on a wide range of sources347, 
with estimates on technological costs across main types of energy equipment, from power generation 
to  heating  systems  and  appliances.  In  addition,  it  should  be  recalled  that  the  PRIMES  model  (and 
other models where relevant) take into account technological progress.  

In  terms  of  technological  developments  relevant  to  the  transport  sector,  battery  costs  for  electric 
vehicles and plug-in hybrids are assumed to go down to 320-360 $/kWh by 2030 and 270-295 $/kWh 
by  2050;  further  improvements  in  the  efficiency  of  both  spark  ignition  gasoline  and  compression 
ignition diesel are assumed to take place. In addition, the market share of internal combustion engine 
(ICE)  electric  hybrids  is  expected  to  increase  due  to  their  lower  fuel  consumption  compared  to 
conventional ICE vehicles.348 

For the techno-economic assumptions in the projection of non-CO2 GHG emissions, see the detailed 
technical  documentation.349  In  general,  technological  progress  in  this  domain  is  strongly  linked  to 
regulation; hence Reference scenario assumptions are conservative. 

Technology assumptions are based on extensive literature review and have been peer-reviewed by the 
Commission services, notably the Joint Research Centre of the European Commission.  

Specific policy assumptions 

Following the above described policy modelling approach, the key policies included in the REF2016 
are350:   

  The EU Emissions Trading System (Directive 2003/87/EC and its amendments) is fully reflected 
in the modelling, including the linear reduction factor of 1.74% for stationary installations and the 
recently adopted Market Stability Reserve.351 

  The  Effort  Sharing  Decision  (Decision  406/2009/EC)  is  assumed  to  be  implemented,  i.e.  ESD 
GHG  emission  reductions  at  EU  level  in  2020  need  to  reach  at  least  -10%  compared  to  2005 
levels.  It  turned  out  that  no  specific  policy  incentives  in  addition  to  adopted  EU  and  national 
policies  were  needed  to  achieve  the  EU  level  target.  National  ESD  targets  need  not  be  achieved 
domestically given the existing flexibilities (e.g. transfers between Member States). 

347  Those include, among others, the European Commission Joint Research Centre, notably for power  generation costs or 

identification of Best Available Technologies, or MURE, ICARUS or ODYSSEE for the demand sectors.  

348  The  Reference  scenario,  by  design,  assumes  the  continuation  of  the  current  trends  and  policies  without  the 
implementation of additional measures. Hence, due to the absence of further policies, car manufacturers and industry are 
not  expected  to devote additional  effort  in  marketing advanced vehicle  technologies.  The  relatively  low  production  of 
advanced vehicles, in the Reference scenario, is not expected to yield economies of scale which could potentially imply 
high  reduction  in  battery  costs  as  suggested  by  other  sources.  Such  assumptions  change  in  a  decarbonisation  policy 
context. 

349  Höglund-Isaksson, L., W. Winiwarter, P. Purohit, A. Gomez-Sanabria (2016): Non-CO2 greenhouse gas emissions in the 
EU-28  from  2005  to  2050:  GAINS  2016  Reference  scenario,  International  Institute  for  Applied  Systems  Analysis 
(IIASA). 

350  For a comprehensive discussion see the Reference scenario report: “EU Reference Scenario 2016: Energy, transport and 

GHG emissions - Trends to 2050”  

351  Decision  EU)  2015/1814  concerning  the  establishment  and  operation  of  a  market  stability  reserve  for  the  Union 

greenhouse gas emission trading scheme and amending Directive 2003/87/EC 

144 

 
 
                                                            
  The  Energy  Efficiency  Directive  (EED)  and  the  Energy  Performance  of  Buildings  Directive 
(EPBD)  are  reflected,  including  Member  States'  specific  obligations  as  regards  energy  savings 
obligation and buildings codes.  

  Ecodesign and Energy Labelling Directives and Regulations are also reflected. 

  CO2  standards  for  cars  and  vans  regulations  (Regulation  (EC)  No  443/2009,  amended  by 
Regulation  EU  No  333/2014  and  Regulation  (EU)  No  510/2011,  amended  by  Regulation  EU 
253/2014);  CO2  standards  for  cars  are  assumed  to  be  95gCO2/km  as  of  2021  and  for  vans 
147gCO2/km in line with current legislation. Standards are assumed constant after 2020/2021. 

  The  Renewable  Energy  Directive  (Directive  2009/28/EC)  and  Fuel  Quality  Directive  (Directive 
2009/30/EC)  including  ILUC  amendment  (Directive  2015/1513/EU):  achievement  of  the  legally 
binding  RES  target  for  2020  (including  10%  RES  in  transport  target)  for  each  Member  State, 
taking into account the use of flexibility mechanisms when relevant as well as of the cap  on the 
amount of food or feed based biofuels (7%). Member States' specific renewable energy policies for 
the heating and cooling sector are also reflected where relevant. 

  Directive on the deployment of alternative fuels infrastructure (Directive 2009/30/EC). 

  The  Waste  Management  Framework  Directive  (Directive  2008/98/EC)  and  in  particular  the 
Landfill Directive (Directive 1999/31/EC) which contribute to a significant reduction of emissions 
from waste. 

  The revised F-gas Regulation (Regulation 517/2014) strengthens existing measures and introduces 
a number of far-reaching changes, notably limiting the total amount of the most important F-gases 
that can be sold in the EU from 2015 onwards and phasing them down in steps to one-fifth of 2014 
sales in 2030, and banning the use of F-gases in many new types of equipment where less harmful 
alternatives are widely available.  

  The  impacts  of  the  Reforms  of  the  Common  Agricultural  Policy  are  taken  into  account,  e.g.  the 

milk quota abolition. 

  Energy  Efficiency  Design  Index  (EEDI)  and  the  Ship  Energy  Efficiency  Management  Plan 

(SEEMP) for maritime transport.352 

  Relevant national policies, for instance on the promotion of renewable energy, on fuel and vehicle 

taxation or national building codes, are taken into account.  

352  IMO Resolution MEPC.203(62) 

145 

 
 
                                                            
Summary of main results of the EU Reference scenario 2016 

Figure 31 below presents the projected evolution of EU Gross Inland Energy Consumption. After the 
2005 peak, energy consumption is projected to steadily decline until 2040, where it stabilises. Oil still 
represents the largest share in the energy mix, mostly because of transport demand. Solid fuels see a 
significant  reduction  in  their  share  of  the  energy  mix,  while  the  biggest  increase  is  for  renewable 
energy. Natural gas and nuclear energy keep relatively stable shares in the energy mix.  

Figure 31: EU28 Gross Inland Consumption (Mtoe, left; shares (%), right) 

Source: PRIMES 

Energy security 

EU energy production (Figure 32) is projected to continue to decrease from around 760 Mtoe in 2015 
to  around  660  Mtoe  in  2050.  The  projected  strong  decline  in  EU  domestic  production  for  all  fossil 
fuels  (coal,  oil  and  gas)  coupled  with  a  limited  decline  in  nuclear  energy  production  is  partly 
compensated  by  an  increase  in  domestic  production  of  renewables.  Biomass  and  biowaste  will 
continue to dominate the fuel mix of EU domestic renewable production, although the share of solar 
and wind in the renewable mix will gradually increase from around 17% in 2015 to 36% in 2050.  

Figure 32: EU28 energy production (Mtoe) 

Source: PRIMES 

146 

02004006008001,0001,2001,4001,6001,8002,0002005201020152020202520302035204020452050RenewableenergyformsNuclearNaturalgasOilSolids17127637333333242426251412111171922250%10%20%30%40%50%60%70%80%90%100%200520302040205001002003004005006007008009001,0002005201020152020202520302035204020452050Renewableenergy sourcesNuclearNatural gasOilSolids 
 
 
 
EU's import dependency shows a slowly increasing trend over the projected period, from 53% in 2010 
to  58%  in  2050.  Again  RES  deployment,  energy  efficiency  improvements  and  nuclear  production 
(which remains stable) counteracts the strong projected decrease in EU's fossil-fuel production. 

Solid imports as well as crude oil and (refinery) feedstock decline throughout the projection period, 
while  oil  products  imports  slightly  increase.  Natural  gas  imports  increase  slightly  in  the  long  term 
reaching  approximately  370  bcm353  net  imports  in  2050.  Biomass  remains  mostly  supplied 
domestically,  although  the  combination  of  increased  bioenergy  demand  and  limited  potential  for 
additional EU domestic supply leads to some increases in biomass imports post-2020 (from 11% of 
biomass demand in 2020 to about 15% in 2030 and beyond).  

Up to 2020, the consumption of gas (Figure 33) is expected to remain stable (at around 430 bcm in 
gross  inland  terms).  Post  2020,  a  slight  decrease  in  gross  inland  consumption  of  gas  (412  bcm  in 
2030)  is  projected,  as  well  as  further  reductions  in  indigenous  production  of  gas.  Net  import 
dependency of  natural  gas  registers  an  increase  as  domestic  gas  production  continues  its  downward 
trend.  The  imported  volumes  of  gas  are  projected  to  increase  between  2015  and  2040  and  then  to 
stabilise in the long term, 15% above the 2010 net import level (from 309 bcm in 2010 to 369 bcm in 
2050).   

Figure 33: Gas - production, net imports and demand (volumes expressed in bcm) 

Source: PRIMES 

Internal energy market and investments 

The EU power generation mix changes considerably over the projected period in favour of renewables 
(Figure 34). Before 2020, this occurs to the detriment of gas, driven by a strong RES policy to meet 
2020 targets, very low coal prices compared to gas prices, and low CO2 prices. After 2020, the change 
is  characterised  by  further  RES  deployment,  but  also  a  larger  coal  to  gas  shift,  driven  mainly  in 
anticipation of increasing CO2 prices.354  

Gas therefore maintains its presence in the power generation mix in 2030 (at slightly higher levels in 
the long term compared to 2015). The share of solids/coal in power generation significantly declines, 
but not before 2020, to 15% in 2030.  

353  The conversion rate of 1 Mtoe = 1.11 bcm was used for natural gas, based on the BP conversion calculator. 
354  Carbon prices increase gradually from around 8€/tCO2 in 2015 to reach 34€/tCO2 in 2030. This takes into account the 

adopted Market Stability Reserve, but not a potential increase in the linear reduction factor 

147 

178118875930931032836949742741242001002003004005006002005201020152020202520302035204020452050ProductionNet importsGross InlandConsumption 
 
 
                                                            
Figure 34: EU power generation (net) by fuel (Mtoe – left, shares – right) 

Source: PRIMES 

Variable RES (solar and wind) reach around 19% of total net electricity generation in 2020, 25% in 
2030  and  36%  in  2050,  demonstrating  the  growing  need  for  flexibility  in  the  power  system.  Wind 
onshore is expected to provide the largest contribution. Solar PV and biomass also increase over time. 
Hydro  and  geothermal  remain  roughly  constant.  The  share  of  nuclear  decreases  gradually  over  the 
projected period despite some life time extensions and new built, from 27% in 2015 to 22% in 2030. 

Investment expenditures for power supply (Figure 35) increase substantially until 2020 driven by RES 
targets  and  developments,  but  slow  down  thereafter,  until  2030,  before  increasing  again  from  2030 
onwards notably due to increasing ETS carbon prices reflecting the combination of reinstated scarcity 
in the carbon market with the help of the Market Stability Reserve and a continuously decreasing ETS 
cap  based  on  the  current  linear  factor.  New  power  plant  investment  is  dominated  by  RES,  notably 
solar PV and wind onshore. Nuclear investment mostly takes place via lifetime extensions until 2030 
and  in  the  longer  term  via  new  built,  such  as  projected  in,  for  instance,  the  UK,  Finland,  Sweden, 
France, Poland, and other Central European Member States. New thermal plant investment is mainly 
taking place in gas-fired plants. 

Figure 35: Net power capacity investments by plant type (MWh – for five year period) 

Source: PRIMES 

148 

05001,0001,5002,0002,5003,0003,5004,0004,5002005201020152020202520302035204020452050RESNuclearenergyGas firedOil firedSolids fired0%10%20%30%40%50%60%70%80%90%100%2005201020152020202520302035204020452050050,000100,000150,000200,000250,000300,000350,000Gas firedOil firedSolids firedNuclear energyBiomass-waste firedSolarWind off-shoreWind on-shoreHydro (pumpingexcluded) 
 
 
 
Average  electricity  prices  (Figure  36)  steadily  increase  up  to  2030  by  about  18%  relative  to  2010 
levels, stabilising around 20% in the long-term. The structure of electricity costs changes over time, 
with the capital cost component (generation and grid costs) increasing significantly in the short term. 
From  2030,  the  fuel  cost  component  remains  stable  despite  the  increase  in  fuel  prices,  due  to  a 
decreasing share of fossil-fuel combustion. Transmission and distribution costs increase significantly 
in the longer term post-2030, partly linked to the need to cater for the increased presence of RES in 
the power generation mix.  

As a result of the modelling, carbon prices are projected to increase from around 8€/tCO2 in 2015 to 
15€ in 2020, 23€ in 2025, 34€ in 2030 and 88€ in 2050, reflecting both the steadily decreasing cap 
and the stabilising effect of the Market Stability Reserve. However, the increase in electricity prices 
due to ETS remains limited despite the large increase in CO2 price, as the share of carbon-intensive 
power generation decreases.  

Figure 36: Decomposition of electricity generation costs and prices (€'2013 MWh) 

Source: PRIMES 

Electricity prices for households and services are projected to increase moderately in the medium term 
and  to  decrease  slightly  in  the  long  term.  Prices  for  industry  on  the  contrary  are  stable  or  decrease 
over time as energy intensive industry maintains an electricity demand profile compatible with base-
load power generation and bears a small fraction of grid costs and taxes. Taxes apply mainly on prices 
for households and services. 

REF2016  shows  increasing  volumes  of  electricity  trade  over  time.  The  flow  between  regions 
increases  from  17%  in  2015  to  26%  in  2020,  29%  in  2030  and  then  stays  almost  stable  for  the 
remainder of the projection period  reaching 30% in 2050. Main drivers are intermittent RES power 
generation  and  the  resulting  balancing  requirements.  Trade  is  facilitated  by  the  assumed  successful 
development of the ENTSO-E Ten-Year Network Development Plan 2014355 as well as pan-European 
market coupling and sharing of reserves and flexibility across Member States.  

Investment expenditures in demand sectors (Figure 37 – left hand side) over the projected period will 
be  higher  than  in  the  past.  They  notably  peak  in  the  short  term  up  to  2020,  particularly  in  the 
residential and tertiary sectors, as a result of energy efficiency polices. Post-2020 they slightly decline 

355  Source: https://www.entsoe.eu/major-projects/ten-year-network-development-

plan/ten%20year%20network%20development%20plan%202016/Pages/default.aspx  

149 

0204060801001201401601802002005201020152020202520302035204020452050Excise tax and VAT on electricityEstimation of RES supportingcosts passed on to consumersTransmission, distribution andsales costsTax on fuels and ETS auctionpaymentsFuel costVariable non fuel costFixed O&M costAnnual capital cost 
 
 
                                                            
until  2030,  before  increasing  again  to  2050.  On  the  supply  side  (Figure  37  –  right  hand  side), 
investments  peak  towards  2020,  followed  by  a  decrease  notably  explained  by  a  decrease  in  power 
generation investments. 

Figure 37: Investment expenditures (5-year period) - demand side, million €'2013 (left, excluding transport) and 
supply side, million €'2013 (right) 

Source: PRIMES 

Transport  investments  (expenditures  related  to  the  turnover  of  rolling  stock)  steadily  increase  over 
time but maintain a relatively stable share of GDP.  

The  relative  weight  of  energy-related  spending  in  households'  expenditure356  increases  in  2020 
compared to 2015 (7.5% compared to 6.8%), stabilising until 2030 before decreasing again until 2050 
(6.1%). 

Moderation of energy demand  

In 2020, primary energy consumption decreases by 18.4% (relative to the 2007 baseline, i.e. how the 
target is defined), more than the sum of national Member States' indicative energy efficiency targets 
but  still  falling  slightly  short  of  the  2020  indicative  EU  energy  efficiency  target  of  20%.  In  2030, 
energy consumption is projected to decrease (again relative to 2007 baseline projections) by 23.9%. 
Primary  energy  demand  and  GDP  continue  to  decouple  (Figure  38),  which  is  consistent  with  the 
trends observed since 2005. Energy efficiency improvements are mainly driven by policy up to 2020 
and by market/technology trends after 2020.  

356  Share  of  energy  system  costs  for  the  residential  sector  (fuel  costs  and  annualised  capital  costs  of  energy  related 

investment expenditures) in total households' consumption 

150 

0200,000400,000600,000800,0001,000,0001,200,000TertiaryResidentialIndustry0100,000200,000300,000400,000500,000600,000SteamboilersPowerplants -CHP unitsPowerplants -electricityonlyPower gridinvestment 
 
 
                                                            
Figure 38: Decoupling of EU energy use and intensity from GDP (2005=100) 

Source: Commission calculations based on PRIMES and GEM E3 

The  distribution  of  final  energy  consumption  across  sectors  remains  broadly  similar  to  the  current 
picture,  all  the  way  to  2050,  with  transport  and  the  residential  sector  comprising  the  lion's  share  of 
final energy consumption (32% and 27% of final consumption, respectively, in 2030). Industry sees 
its share in final energy demand slightly decreasing, from 28% in 2005 to 23% in 2050, mostly due to 
improved energy efficiency in non-energy intensive industries. The tertiary (services and agriculture) 
sector keeps a stable share of about 17%.  

Figure 39: Evolution of final energy demand by sector (Mtoe – left, shares – right) 

Source: PRIMES 

With regard to the fuel mix in final energy, there is a gradual penetration of electricity (from 22% in 
total  final  energy  use  in  2010  to  28%  in  2050).  This  is  because  of  growing  electricity  demand  as 
compared  to  other  final  energy  use  and  to  some  electrification  of  heating  (heat  pumps)  and  to  a 
limited extent in the transport sector. The potential of gas demand developments in, e.g. the transport 
sector, are not fully reflected  in the Reference  scenario, suggesting that additional policy incentives 
would be needed to trigger further fuel switching in the transport sector. 

151 

0204060801001201401601802002005201020152020202520302035204020452050PrimaryenergyGDPEnergyintensity02004006008001,0001,2001,4002005201020152020202520302035204020452050IndustryResidentialTertiaryTransport31%31%32%33%33%15%16%17%17%17%26%26%27%27%27%28%26%25%23%23%0%10%20%30%40%50%60%70%80%90%100%20052020203020402050 
 
 
 
Figure 40: Evolution of final energy demand by fuel (Mtoe – left, shares – right) 

Source: PRIMES 

Energy  intensity  of  the  industrial  sectors  remains  approximately  constant  in  the  medium  term,  as 
additional  energy  demand  is  due  to  the  increase  in  production  activity.  In  the  long  term  however 
energy demand decreases, even though activity in terms of value added progresses. This is due to the 
energy efficiency embedded in the new capital vintages which replace old equipment and structural 
changes towards higher value added and less energy-intensive production processes, such as in iron 
and steel or non-ferrous metals. 

Figure 41: Industrial energy demand versus activity (value added)  

Source: PRIMES 

In the residential sector, energy demand remains below 2015 levels throughout the projection period. 
Energy  demand  decouples  from  income  growth  more  than  would  be  suggested  by  extrapolation  of 
trends as the efficiency policies drive energy intensity improvements fast in the medium term; in the 
long term however the rate of improvements decreases due to the absence of additional policies. 

152 

02004006008001,0001,2001,4002005201020152020202520302035204020452050SolidsOilGasElectricityHeat (from CHPand DistrictHeating)Other5%10%10%11%11%4%4%5%5%5%20%22%25%27%28%24%23%22%22%22%42%36%35%34%32%5%4%3%2%1%0%10%20%30%40%50%60%70%80%90%100%20052020203020402050020406080100120140160180200199520002005201020152020202520302035204020452050Index 1995=100Energy IntensityFinal EnergyValue AddedTrend 1995-2008 
 
 
 
Figure 42: Final energy demand in the residential sector  

Source: PRIMES 

The activity of the transport sector shows a significant growth (Figure 43), with the highest increase in 
2010 to 2030, driven by developments in economic activity. Historically, the growth of final energy 
demand in the transport sector has shown strong correlation with the evolution of transport activity. 
However, a decoupling between energy consumption and transport activity has been recorded in the 
past  years.  The  decoupling  between  energy  consumption  and  activity  is  projected  to  continue  and 
even to intensify in the future. 

153 

432114109639373938232527328889131716150%10%20%30%40%50%60%70%80%90%100%2010202020302050Shares in %050100150200250300350199520002005201020152020202520302035204020452050MtoeRenewablesDistr. HeatingElectricityGasOilSolids050100150200250300199520002005201020152020202520302035204020452050Residential Energy Demand versus Private Income Index 1995=100Energy IntensityFinal EnergyIncomeTrend 1995-200802040608010012014016018020002005201020152020202520302035204020452050Energy for Heating in kWh/sqm 
 
 
Figure 43: Trends in transport activity and energy consumption 

Source: PRIMES and GEM-E3; For aviation, passenger transport activity includes domestic, international intra-EU and 
international extra-EU aviation. 

Decarbonisation 

CO2 emissions reduction 

In REF2016, the binding energy and climate targets for 2020 will be met by assumption. However, 
current policy and market conditions will not deliver achievement of either the EU 2030 targets or the 
EU long-term 2050 decarbonisation goal.  

Total  CO2  emissions  are  projected  to  be  22%  below  1990  levels  by  2020.  In  2030,  CO2  emissions 
reduce (relative to 1990 levels) by 32%.  Most of these emissions are energy related, and this part also 
determines the overall trends. Non-energy related CO2 emissions mainly relate to industrial processes, 
and  remain  rather  stable.  Land-use  related  CO2  emissions  are  discussed  below  in  the  LULUCF 
section. 

Emission reductions in the ETS sectors are larger than those in sectors covered by the Effort Sharing 
Decision  (ESD)  as  current  legislation  implies  a  continuation  of  the  reduction  of  the  ETS  cap  with 
1.74%  per  year  over  the  projected  period  leading  to  a  carbon  price  driving  long  term  emission 
reduction. In the ESD sectors, there are no further drivers beyond market forces (e.g. rising fossil fuel 
prices)  and  the  continued  impact  of  adopted  policies  such  as  CO2  standards  for  vehicles  or  energy 
performance standards for new building to further reduce energy and consequently emissions. 

CO2  emissions  can  be  decomposed  in  the  components:  GDP,  energy  intensity  of  GDP  and  carbon 
intensity of energy. The energy intensity of GDP component declines due to structural changes in the 
economy and increasing energy efficiency in all sectors. The decrease of carbon intensity of energy 
supply  becomes  an  increasingly  significant  component  over  the  period.  This  is  mainly  due  to 
Renewable Energy policies in the short term and the ETS in the medium to long term. 

On a sectoral level, CO2 emissions decrease in all sectors. Figure 44 shows a steep decrease in power 
generation, whereas  emissions in the field of transport decrease  at  much slower pace between 2010 
and  2050,  and  the  transport  sector  becomes  the  largest  source  of  CO2  emissions  after  2030.  Non-
energy  and  non-land  use  related  CO2  emissions  (e.g.  industrial  processes)  reduce  only  slowly 
throughout the projection period; however, they only represent a small share of total CO2 emissions.  

154 

6080100120140160180200220240199520102020203020402050Index 1995=100GDPPassengertransportactivityEnergy forpassengertransport6080100120140160180200220240199520102020203020402050Index 1995=100GDPFreighttransportactivityEnergy forfreighttransportSource: PRIMES TAPEM &TREMOVE 
 
 
Figure 44: Evolution of CO2 emissions (Mt) by sector 

Source: PRIMES  

Renewable Energy 

In  2020,  the  RES  share  in  gross  final  energy  consumption  reaches  21%  in  2020,  while  in  2030,  it 
reaches 24%.   

Renewable electricity is projected to increase (as a share of net power generation) from around 28% 
in  2015  to  36%  in  2020,  which  implies  an  acceleration  compared  to  observed  trends  today,  in 
particular in a number of  countries that are currently facing difficulties to meet their target. Further 
RES share increases are more limited until 2030 to reach 43%, as RES policies are phased out in the 
Reference scenario after 2020 and only most competitive RES technologies can emerge.  

The RES share in heating and cooling increases from 17% in 2015 to 22% in 2020, reaching 25% in 
2030.  The  use  of  RES  in  final  demand  for  heating  and  cooling  is  the  main  driver  of  RES-H&C 
increase  in  the  short  term,  but  its  contribution  stagnates  in  the  long  term.  In  the  long-term,  RES  in 
CHP  and  heat  plants  (e.g.  district  heating),  as  well  some  deployment  of  heat  pumps,  drive  further 
increase of the RES-H&C share. Energy efficiency, implying lower demand for heat in all sectors, is 
also an important driver in the medium and long term.  

The RES-T share reaches 11% in 2020. The development of bio-fuels is the main driver in the short 
term, but its contribution stagnates in the long term. The biofuel penetration is mainly driven by the 
legally  binding  target  of  10%  renewable  energy  in  the  transport  sector  (RES-T  target).  Projections 
also take into consideration specific MS mandatory blending, obligations and tax incentives, as well 
as the ILUC Directive. RES in electricity, combined with the relative increase of electricity use (albeit 
modest in share terms), is the main contributor to RES-T in the long term. 

Non-CO2 emission reduction 

Non-CO2  emissions  (CH4,  N2O  and  F-Gases),  account  currently  (2013)  for  18%  of  total  EU  GHG 
emissions (excluding LULUCF).  They have decreased significantly (32%) between 1990 and 2013. 
They  are  expected  to  further  decrease  by  29%  below  2005  levels  in  2030  (-46%  compared  to  1990 
levels), and to stagnate later on. CH4 emissions – which have the largest share in this aggregate - are 
projected  to  decrease  above  average  (33%  due  to  declining  trends  in  fossil  fuel  production, 
improvements  in  gas  distribution  and  waste  management)  and  N2O  emissions  fall  below  average 
(17%)  until  2030,  both  remaining  flat  thereafter.  F-Gases  would  reduce  by  half  between  2005  and 
2030, largely driven by EU and Member State's policies (i.e. the 2014 F-gas regulation and mobile air 

155 

05001,0001,5002,0002,5003,0003,5004,0004,5005,000199520002005201020152020202520302035204020452050Process and other CO2emissionsTransportTertiaryResidentialIndustryEnergy branchPower generation/Districtheating 
 
 
conditioning  directive).  Except  for  a  very  minor  fraction  from  some  specific  industries,  non-CO2 
emissions fall under the ESD. 

Figure 45: Non CO2 GHG emissions (Mt CO2 eq.) 

Source: GAINS 

The non-CO2 emission trends and their drivers vary by sector.  

Agriculture  is  responsible  for  about  half  of  all  non-CO2  emissions  and  is  expected  to  increase  its 
share  in  total  non-CO2  until  2030.  While  the  agricultural  non-CO2  emissions  have  reduced  by  22% 
between 1990 and 2013, they are projected to roughly stabilize at current levels as a result of different 
trends which compensate each other, such as decreasing herd sizes (both of dairy cows and of non-
dairy  cattle)  but  increasing  milk  yields.  Slightly  reduced  use  of  mineral  fertilizer  through  improved 
efficiency (2% less in 2030 than in 2005) leads to corresponding reductions in N2O emissions from 
soils. Improved manure management (e.g. through anaerobic digestion) also delivers minor emission 
reductions. The Common Agricultural Policy influences, inter alia, livestock numbers/intensities and 
the Nitrogen Directive and the Water Framework Directive impact on the use of fertilizer.  

Waste is currently the second most important sector emitting non-CO2. There, a substantial reduction 
between 2005 and 2030 is expected (70%), strongly driven by environmental legislation, such as the 
Landfill  directive  and  improvements  in  waste  management  as  well  as  an  update  in  inventory 
methodology of historic landfills that results in increased historic emissions and subsequent increased 
reductions  of  these  emissions  in  the  near  to  mid-term  future.  Also  an  increasing  amount  of  CH4  is 
recovered  and  utilised,  thereby  impacting  on  these  trends  towards  lower  emissions.  After  2030, 
however, a moderate increase is projected, reflecting trends in economic development. 

CH4  and  N2O  emissions  from  the  energy  sector  (incl.  transport)  are  expected  to  decrease  by  36% 
from  2005  to  2030,  and  further  26%  between  2030  and  2050.  The  main  reductions  come  from  less 
coal-mining  and  crude  oil  production  in  the  EU,  together  with  reduced  emissions  from  power 
generation with fossil fuels. On the other hand, transport is expected to generate an increasing share of 
energy  sector  non-CO2  emissions  (N2O  from  road  transport  being  the  most  important  contributor), 
growing from 12% in 2005 to 15% in 2030 and 20% in 2050 within the energy aggregate. 

Emissions  from  air  conditioning  and  refrigeration  decrease  by  half  from  2005  until  2030,  also 
thanks  to  existing  legislation  (i.e.  the  new  2014  F-gas  Regulation  and  the  Mobile  Air  Conditioning 
systems Directive). 

156 

01002003004005006007008009001,0002005201020152020202520302035204020452050OtherAC & refrigerationWastewaterWasteIndustryEnergyAgriculture 
 
 
Most of the non-CO2 emissions from industry – overall a minor non-CO2 sector - are covered by the 
EU  ETS  (production  of  adipic  and  nitric  acid,  and  of  aluminium).  The  resulting  incentive  in 
combination with relatively cheap abatement options and (previous) national legislation cut emissions 
quite rapidly, to, in 2030, only a fifth of those in 2005. For the period after 2030 slight increases are 
projected in line with economic trends.  

Emissions  from  the  wastewater  sector  and  remaining  other  sectors  are  projected  to  increase 
moderately in line with economic development over the whole period covered.  

LULUCF emissions and removals 

The EU28 Land Use Land Use Change and Forestry (LULUCF) sector is at present a net carbon sink 
which  has  been  sequestering  annually  on  average  more  than  300  Mt  CO2  over  the  past  decade 
according  to  the  UNFCCC  inventory  data.357  In  the  Reference  scenario  2016,  the  LULUCF  sink  is 
expected  to  decline  in  the  future  to  -288  Mt  CO2  eq  in  2030  from  -299  Mt  CO2  eq.  in  2005  and 
decreases further after 2030. This decline is driven partly by the increase in timber demand (partially a 
result of the increase in bioenergy demand that is expected in order to reach the Renewable Energy 
targets in 2020. It is the result of changes in different land use activities of which changes in the forest 
sector are the most important. Figure 46 shows the projection of the total EU28 LULUCF sink in the 
Reference scenario 2016 and the contribution from different land use activities.  

At  present,  the  carbon  sink  in  managed  forests  (-373  Mt  CO2  eq.  in  2010),  without  applying  any 
accounting rules, is the main contributor to the LULUCF sink. The forest management sink is driven 
by the balance of forest harvest and forest increment rates (accumulation of carbon in forest biomass 
as a result of growth of the trees with the age). Forest harvest is projected to increase over time from 
516 million m3 in 2005 to 565 million m3 in 2030 due to growing demand for wood for material uses 
and energy production. As a consequence, the carbon sink in managed forests declines by 32% until 
2030. This decline in the managed forests carbon sink is partially compensated by a rising carbon sink 
from  afforestation  and  decreasing  emissions  from  deforestation  in  line  with  past  trends.  Emissions 
from deforestation continue to decline from 63 Mt CO2 in 2005 to 20 Mt CO2 eq. in 2030. Carbon 
sequestration from afforested areas increases steadily to 99 Mt CO2 eq. by 2030, as new forests are 
continuously, though at slower rate, being established. In addition, young forests that were established 
over the last 20 years get into a phase of high biomass production. 

Activities  in  the  agricultural  sector  (cropland  and  grassland)  have  a  smaller  impact  on  the  total 
LULUCF sink compared to the forest sector. Still, net carbon emissions from cropland are projected 
to decline by some 18% by 2030 compared to 2005 as soils converge towards soil carbon equilibrium 
over  time.  In  addition,  perennial  crops  (miscanthus,  switchgrass  and  short  rotation  coppice)  that 
typically sequester additional carbon in soil and biomass contribute to decreasing cropland emissions. 
By  2030,  0.9  Mha  of  perennial  crops  are  expected  to  be  cultivated.  The  grassland  sink  increases  to 
around -19 Mt CO2 eq. in 2030 as land continues to be converted to grassland e.g. through cropland 
abandonment  while  at  the  same  time  the  total  grassland  area  slightly  declines  over  time  due  to 
afforestation and the expansion of settlements. 

357  http://unfccc.int 

157 

 
 
                                                            
Figure 46: Development of the EU28 emissions/removals in the LULUCF sector in Mt CO2 until 2050358 

Source: GLOBIOM-G4M 

Research, innovation and competitiveness  

REF2016  deals  explicitly  with  the  penetration  of  new  technologies.  The  approach  is  in  two  steps. 
First,  assumptions  are  made  on  techno-economic  characteristics  based  on  latest  scientific  evidence. 
Second, the model endogenously selects the most  economically viable technologies at each point in 
time, leading to further technology learning as technologies are deployed.  

The development of PVs starts from lower costs than in the previous Reference Scenario and has a 
positive learning curve throughout the projection period. This translates into significant deployment of 
solar PVs in REF2016, especially in Southern Europe.  

Figure 47: Illustrative levelized cost of electricity (expressed in €'2013/MWh-net)  

Source: PRIMES 

358  Emissions  from  deforestation  and  harvested  wood  products  are  included  in  “Forest  land”  in  contrast  to  UNFCCC 

inventories. 

158 

0501001502002503003504002005201020152020203020402050Solar PV North of EuropeSolar PV South of EuropeSolar Thermal South of Europe with storageWind offshore - remoteWind offshore close to coastWind onshore 
 
 
 
 
                                                            
There remains large uncertainty about the costs for offshore wind and there have been cost increases 
due to previously unforeseen difficulties and logistics. Surveys have identified significant potential of 
cost decrease due to economies of scale and possibilities of improvement in logistics, but these cost 
decreases are likely to occur only towards 2030. As such, offshore wind developments in REF2016 
are more conservative than in past exercises.  

The share of advanced biofuels in total consumption of biofuels moderately increases. Out of these, 
about  half  are  projected  to  be  related  to  innovative  technologies  and  methods,  such  as  forestry 
residues, or bio-waste.  

Compared to the previous Reference scenario, the costs of nuclear investment have increased and also 
the  costs  for  nuclear  refurbishments  have  been  revised  upwards.  Although  lifetime  extensions  of 
nuclear power plants remain economically viable in most cases, investments in new built plants are 
lower compared to previous projections.  

CCS uptake remains very slow all the way to 2050. The construction of power plants equipped with 
carbon capture technologies has been developing at a very slow pace, and been dependent on public 
support  (e.g.  EEPR  and  NER300).  Political  restrictions  are  also  reflected.  For  these  reasons,  CCS 
costs are assumed higher than in previous Reference scenarios.  

On  the  demand  side,  demand  for  electric  appliances  continues  to  increase.  However,  there  is  an 
uncoupling  between  appliance  stock  and  energy  consumption  due  to  the  technological  progress 
facilitated by eco-design regulations. 

Car  manufacturers  are  expected  to  comply  with  the  CO2  standards  by  marketing  vehicles  equipped 
with  hybrid  system,  which  are  becoming  more  appealing  to  the  consumers  thanks  to  lower  costs. 
Electrically chargeable vehicles emerge around 2020 and are kick-started by existing EU and national 
policies  as  well  as  by  incentive  schemes  aiming  to  boost  their  penetration.  The  share  of  activity  of 
total electric vehicles in the total activity of light duty vehicles reaches 15% in 2050 (Figure 48). Fuel 
cells would add an additional 2% by 2050. Other energy forms such as LPG and natural gas maintain 
a rather small share in the final energy demand of the transport sector.  

Figure 48: Evolution of activity of light duty vehicles by type and fuel 

Source: PRIMES-TREMOVE transport model 

159 

42322214545445333555820312592622010202020302050Shares (%)01,0002,0003,0004,0005,0006,0007,000199520002005201020152020202520302035204020452050GpkmFuel CellPure ElectricPlug-in hybridHybridICE GaseousICE DieselICE GasolineSource: PRIMES TREMOVE 
 
 
Energy  system  costs  (Figure  49)  increase  up  to  2020.  Large  investments  are  undertaken  driven  by 
current  policies  and  measures.  Overall,  in  2020  energy  system  costs  constitute  12.3%  of  the  GDP, 
rising  from  11.4%  in  2010359.  Between  2020  and  2030  the  share  remains  stable  and  decreases 
thereafter,  as  the  system  reaps  benefits  from  the  investments  undertaken  in  the  previous  decade 
(notably  via  fuel  savings).  In  this  period,  the  share  of  energy  system  costs  in  GDP  is  gradually 
decreasing, reaching levels close to 2005 in 2050. 

Figure 49: Projected evolution of energy system costs 

Source: PRIMES; Energy system costs exclude ETS auction payments, given that they result in corresponding auction 
revenues. 

Pathways/scenarios for decarbonising the transport sector 

Central scenarios 

Two central policy scenarios reflecting the 2030 targets and main elements of the 2030 climate and 
energy  framework  agreed  by  the  European  Council  in  2014360  have  been  developed,  EUCO27  and 
EUCO30. This recognises that for the energy efficiency target a review will still be undertaken to set 
the  level  of  ambition.  These  scenarios  also  aim  to  provide  consistency  across  a  number  of  impact 
assessments underpinning 2016 Energy Union policy proposals. Using two central scenarios increases 
the robustness of policy conclusions. 

Both scenarios start from the EU Reference scenario 2016 and add the targets and policies described 
below. In addition, coordination policies are assumed which enable long term decarbonisation of the 
economy. Coordination policies replace the "enabling conditions" which have been modelled in 2030 
framework impact assessment and the 2014 impact assessment on 2030 energy efficiency targets. 

Table 20 summarises the policy assumptions in EUCO27 scenario that have been modelled. 

359  Total  system  costs  include  total  energy  system  costs,  costs  related  to  process-CO2  abatement  and  non-CO2  GHG 

abatement.  

360  Source: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/145397.pdf.  

160 

0.12.14.16.18.110.112.114.12005201020152020202520302035204020452050Energy system costs/GDPEvolution of energy system costs relative to GDP (%)16222834847872662010202020302050Decomposition of energy system costs (%)CAPEXOPEX 
 
 
                                                            
Table 20: Policy assumptions in EUCO27 scenario 

EUCO27  This scenario is designed to meet all 2030 targets set by the European Council: 

  At least 40% GHG reduction (wrt. 1990) 
  43% GHG emissions reduction in ETS sectors (wrt 2005) 
  30% GHG emissions reduction in Effort Sharing Decision sectors (wrt 2005) 
  At least 27% share of RES in final energy consumption 
  27% primary energy consumption reduction (i.e. achieving 1369 Mtoe in 2030) compared to 
PRIMES  2007  baseline  (1887  Mtoe  in  2030).  This  equals  a  reduction  of  primary  energy 
consumption of 20% compared to 2005 primary energy consumption (1713 Mtoe in 2005). 

Main policies and incentives additional to Reference: 

Revised EU ETS 
- 
-  After 2030 cap trajectory to achieve -90% emission reduction in 2050 in line with Low Carbon 

Increase of ETS linear factor to 2.2% for 2021-30 

Economy Roadmap 

Renewables policies 
-  Renewables  policies  necessary  to  achieve  27%  target,  reflected  by  renewable  (RES)  values361 

applied in electricity, heating & cooling and transport sectors.  

Energy efficiency policies: 

Residential and services sector 
- 

Increasing energy efficiency of buildings via increasing the rate of renovation and depth of 
renovation.  In  this  model,  better  implementation  of  Energy  Performance  of  Buildings 
Directive, continuation of Art 7 of Energy Efficiency Directive (EED) and dedicated national 
policies are depicted by application of energy efficiency values.362 

-  Financial instruments and other financing measures on the European level facilitating access 
to  capital  for  investment  in  thermal  renovation  of  buildings.  This,  together  with  further 
labelling policies for heating equipment is depicted by a reduction of behavioural discount 
rates for households from 12% to 11.5%. 

-  More  stringent  (than  in  Reference)  eco-design  standards  banning  the  least  efficient 

technologies. 

Industry 
-  More stringent (than in Reference) eco-design standards for motors. 

361  Renewables  policies  necessary  to  achieve  27%  target  are  reflected  by  RES  values  applied  in  electricity,  heating  and 
cooling and transport sectors. RES values are used in order to ensure cost-efficient RES target achievement at European 
level. The RES value is a shadow price, a signal of potential costs per unit of renewable energy not achieved (relative to 
the target) which is internalized in the optimizing behaviours of actors and thus leads to higher RES uptake. RES values 
do not describe in detail the RES supporting policies, but are introduced if needed, in addition to the supporting policies, 
so as to complement them and reach the RES target. The RES value should not be confused with feed-in tariffs or green 
certificates, because it does not model any sort of power purchasing agreement with the RES developers and the RES 
projects compete on equal economic grounds with other forms of energy. 

362  Energy efficiency values (EEV) are modelled as shadow values of virtual energy saving constraints optionally applying 
by  energy  demand  sector.  In  the  model  the  EEVs  influence  the  behaviour  of  consumers  acting  as  a  marginal  cost  to 
penalise energy consumption and stimulate energy savings. For houses and office buildings the EEVs mainly promote 
improvement of thermal integrity of building cells by inciting renovation. Essentially using the EEVs in the model is a 
way of representing non-identified policy measures which aim at achieving energy savings. Instead of modelling one-by-
one the broad range of energy efficiency policy measures, a practical way is to assume a non-zero value of EEVs and 
increase it until the non-identified measures induce an assumed amount of energy savings. The EEVs are measured in 
EUR/toe  saved.  A  non-zero  EEVs  implies  an  increase  of  the  economic  potential  of  investment  in  energy.  A  non-zero 
EEV is added to the unit cost of energy and therefore an additional amount of energy saving investments become cost-
efficient. The use of a non-zero EEV has no financial implications for the consumers except the incurrence of additional 
investment expenditures which allow in the future lowering the expenditures for purchasing of fuels and electricity. In 
other words, the EEV is not a subsidy and is not a tax, as it has no direct implications on the consumer’s budget. 

161 

 
 
                                                            
Transport 
-  CO2 standard for cars: 85gCO2/km in 2025; 75gCO2/km in 2030 and 25 gCO2/km in 2050.363 
-  CO2  standards  for  vans:  135gCO2/km  in  2025;  120gCO2/km  in  2030  and  60gCO2/km  in 

2050.364 

-  1.5%  average  annual  energy  efficiency  improvements  for  new  conventional  and  hybrid 

heavy goods vehicles for 2010-2030 and 0.7% for 2030-2050. 

-  Measures on management of transport demand:  

o  recently adopted measures for road freight, railways and inland navigation365;  
o  gradual internalisation of  transport local externalities as of 2025 and full internalisation 

by 2050 on the inter-urban network.366 

Non-CO2 policies 
-  In  2030  carbon  values  of  €0.05  applied  to  non-CO2  GHG  emissions  in  order  to  trigger  cost-

effective emission reductions in these sectors including in agriculture. 

-  After 2030 carbon values set at EU ETS carbon price level. 

In the EUCO27 scenario, energy efficiency delivers a large part of GHG emissions reduction in the 
Effort Sharing Decision sectors. This reduction is complemented by cost-effective reductions in non-
CO2 emissions – mostly in agriculture. 

The EUCO30 scenario is constructed similarly to the EUCO27 scenario, but raises the ambition level 
of  the  specific  energy  efficiency  policies  in  a  cost  effective  way  (see  Table  21).  It  implements  the 
European Council guidance of having in mind 30% for the review of the energy efficiency target. A 
relevant implication is that more ambitious energy efficiency policies deliver all necessary reductions 
in Effort Sharing Decision sectors, and no reductions in non-CO2 sectors such as agriculture beyond 
Reference take place. 

Table 21: Policy assumptions in EUCO30 scenario 

EUCO30  This scenario is designed to meet all 2030 targets set by the European Council: 

  At least 40% GHG reduction (wrt. 1990) 
  43% GHG emissions reduction in ETS sectors (wrt 2005) 
  30% GHG emissions reduction in Effort Sharing Decision sectors (wrt 2005) 
  27% share of RES in final energy consumption 
  30% primary energy consumption reduction (i.e. achieving 1322 Mtoe in 2030) compared to 
PRIMES  2007  baseline  (1887  Mtoe  in  2030).  This  equals  a  reduction  of  primary  energy 
consumption of 23% compared to 2005 primary energy consumption (1713 Mtoe in 2005). 

Main policies and incentives additional to Reference: 

Revised EU ETS 
- 
-  After 2030 cap trajectory to achieve -90% emission reduction in 2050 in line with Low Carbon 

Increase of ETS linear factor to 2.2% for 2021-30 

Economy Roadmap 

Renewables policies 
-  Renewables  policies  necessary  to  achieve  27%  target,  reflected  by  renewable  (RES)  values367 

applied in electricity, heating & cooling and transport sectors.  

363  These values refer to the current NEDC test-cycle. 
364  These values refer to the current NEDC test-cycle. 
365  Directive on Weights & Dimensions, Fourth railway package, NAIADES II package, Ports Package. 
366  Costs of infrastructure wear & tear, congestion, air pollution and noise. 

162 

 
 
 
                                                            
Energy efficiency policies: 

Residential and services sector 
-  Further  increasing  energy  efficiency  of  buildings  via  increasing  the  rate  of  renovation  and 
depth of renovation. In this model, better implementation of EPBD and EED, continuation of 
Art  7  of  EED  and  dedicated  national  policies  are  depicted  by  the  application  of  energy 
efficiency values. Energy efficiency values are increased compared to EUCO27. 

-  Financial instruments and other financing measures on the European level facilitating access 
to  capital  for  investment  in  thermal  renovation  of  buildings.  This,  together  with  further 
labelling policies for heating equipment, is depicted by a reduction of behavioural discount 
rates for households from 12% to 11.5%. 

-  More  stringent  (than  in  EUCO27)  eco-design  standards  banning  the  least  efficient 

technologies. 

-  Policies facilitating the uptake of heat pumps. 

Industry 
-  More stringent (compared to EUCO27) eco-design standards for motors. 

Transport 
-  CO2  standard  for  cars:  80g  CO2/km  in  2025;  70g  CO2/km  in  2030  and  25  g  CO2/km  in 

2050.368 

-  CO2  standards  for  vans:  130g  CO2/km  in  2025;  110g  CO2/km  in  2030;  60g  CO2/km  in 

2050.369 

-  1.5%  average  annual  energy  efficiency  improvements  for  new  conventional  and  hybrid 

heavy goods vehicles for 2010-2030 and 0.7% for 2030-2050. 

-  Measures on management of transport demand:  

o  recently adopted measures for road freight, railways and inland navigation370; 
o  gradual internalisation of transport local externalities as of 2025 and full internalisation 

by 2050 on the inter-urban network.371 

o  modulation  of  infrastructure  charges  for  heavy  goods  vehicles  according  to  CO2 

emissions leading to faster fleet renewal; 

o  eco-driving; 
o  deployment of Collaborative Intelligent Transport Systems. 

Non-CO2 policies 
-  No policy incentive until 2030. 
-  After 2030 carbon values set at EU ETS carbon price level 

Table 22 provides a summary of the transport related measures included in the EUCO27 and EUCO30 
scenarios. 

367  Renewables  policies  necessary  to  achieve  27%  target  are  reflected  by  RES  values  applied  in  electricity,  heating  and 
cooling and transport sectors. RES values are used in order to ensure cost-efficient RES target achievement at European 
level. The RES value is a shadow price, a signal of potential costs per unit of renewable energy not achieved (relative to 
the target) which is internalized in the optimizing behaviours of actors and thus leads to higher RES uptake. RES values 
do not describe in detail the RES supporting policies, but are introduced if needed, in addition to the supporting policies, 
so as to complement them and reach the RES target. The RES value should not be confused with feed-in tariffs or green 
certificates, because it does not model any sort of power purchasing agreement with the RES developers and the RES 
projects compete on equal economic grounds with other forms of energy. 

368  These values refer to the current NEDC test-cycle. 
369  These values refer to the current NEDC test-cycle. 
370  Directive on Weights & Dimensions, Fourth railway package, NAIADES II package, Ports Package. 
371  Costs of infrastructure wear & tear, congestion, air pollution and noise. 

163 

 
 
 
 
                                                                                                                                                                                         
Table 22: Summary of transport related measures in the EUCO27 and EUCO30 scenarios  

EUCO27 scenario 

EUCO30 scenario 

Low- and zero-emission vehicles 
  CO2  standards  for  cars:  85  gCO2/km  in  2025;  75 

  CO2  standards  for  cars:  80  gCO2/km  in  2025;  70 

gCO2/km in 2030 and 25 gCO2/km in 2050.  

gCO2/km in 2030 and 25 gCO2/km in 2050. 

  CO2 standards for vans: 135 gCO2/km in 2025; 120 

  CO2 standards for vans: 130 gCO2/km in 2025; 110 

gCO2/km in 2030 and 60 gCO2/km in 2050. 

gCO2/km in 2030 and 60 gCO2/km in 2050. 

  1.5%  average  yearly 

improvement 

in  energy 
efficiency  of  new  conventional  and  hybrid  heavy 
goods  vehicles  for  2010-2030  and  0.7%  for  2030-
2050. 

improvement 

  1.5%  average  yearly 

in  energy 
efficiency  of  new  conventional  and  hybrid  heavy 
goods  vehicles  for  2010-2030  and  0.7%  for  2030-
2050. 

Low emission alternative fuels, infrastructure and alternative powertrains  
  Development  of 
  Development  of 

for  alternative 
infrastructure 
powertrains  (including  electricity,  hydrogen  and 
LNG) for all relevant transport modes. 

for  alternative 
infrastructure 
powertrains  (including  electricity,  hydrogen  and 
LNG) for all relevant transport modes. 

  Alternative  fuels  for  all  relevant  modes  driven  by 
incentives  for  biofuels  and  CO2  standards  for 
electrification. 
food-based  biofuels  respect  the  7%  cap  of  ILUC 
Directive in 2020 and their growth post-2020 is not 
going beyond the cap. 

 

  Alternative  fuels  for  all  relevant  modes  driven  by 
incentives  for  biofuels  and  CO2  standards  for 
electrification. 

  food-based  biofuels  respect  the  7%  cap  of  ILUC 
Directive in 2020 and their growth post-2020 is not 
going beyond the cap. 

Efficiency of the transport system372 
  Measures improving efficiency/reducing emissions 
of  all transport  modes:  measures  adopted  after  the 
cut-off  date  of  Reference  scenario  2016  (i.e. 
Directive  on  Weights  &  Dimensions,  Fourth 
railway  package,  NAIADES  II  package  and  the 
Ports Package)373 

  Gradual  approach  towards  the  internalisation  of 
local externalities on the inter-urban network  

  Measures  improving  efficiency/reducing  emissions 
of  all  transport  modes:  measures  adopted  after  the 
cut-off  date  of  Reference  scenario  2016  (i.e. 
Directive  on  Weights  &  Dimensions,  Fourth 
railway  package,  NAIADES  II  package,  and  the 
Ports Package) 

  Gradual  approach  towards  the  internalisation  of 
local  externalities  on  the  inter-urban  network  plus 
modulation  of  infrastructure  charges  for  heavy 
goods vehicles according to CO2 emissions. 

  Deployment  of  Cooperative  Intelligent  Transport 

Systems and eco-driving. 

Coordination policies 

In  this  modelling  exercise,  all  scenarios  (except  the  EU  Reference  scenario  2016)  achieve 
decarbonisation in 2050 and hence assume an overall policy framework which enables this. Given that 
concrete  policies  will  most  likely  have  to  be  proposed  in  order  to  fulfil  the  necessary  conditions  in 
infrastructure, technology, market coordination, the elements of this framework which go beyond the 
drivers  and  policies  specified  in  the  policy  scenarios  are  called  coordination  policies.  Coordination 

372  Same level of intensity is assumed for the measures in both scenarios. 
373  Measures adopted by the Member States by the end of 2014 which relate to the local air quality plans required to achieve 
compliance for air quality standards have been already reflected in the Reference scenario 2016 to the extent that they 
have been provided in the replies to the Policy Questionnaire.  

164 

 
 
 
 
                                                            
policies replace the "enabling conditions" which have been modelled in the 2030 framework impact 
assessment (in decarbonisation scenarios) and the 2014 impact assessment on energy efficiency target. 

In  past  modelling  exercises,  enabling  conditions  were  present  in  all  decarbonisation  scenarios. 
Enabling  conditions  meant  that  because  of  good  anticipation  of  future  GHG  emission  reduction 
commitments,  all  conditions  were  met  in  infrastructure,  technology  learning,  public  acceptance  and 
market coordination so as to enable the decarbonisation. In other words, enabling conditions enabled 
to maximize the effectiveness of policy instrument which aim at driving strong GHG emission cuts. 
These enabling conditions were fully costed in decarbonisation scenarios.  

These assumptions have been revisited considering that concrete policies will most likely have to be 
proposed in order to fulfil the necessary conditions in infrastructure, technology, market coordination, 
etc.  Consequently,  in  the  central  scenarios  (and  more  ambitious  pathways/scenarios)  enabling 
conditions  are  replaced  by  coordination  policies.  These  coordination  policies  are  envisaged  by  the 
Commission for the period post-2020. Coordination policies are fully costed in the scenarios, as it was 
the case with enabling conditions. It would be important to make a distinction between:  

  coordination  policies  related  to  ongoing  infrastructure  developments  that  will  enable  a  larger 
exploitation of cost-effective energy efficiency, renewables, greenhouse gas emissions abatement 
options after 2020;  

  coordination policies related to R&D and public acceptance that are expected to be needed to meet 

long term decarbonisation objectives, and have effects post 2030.  

A summary of coordination policies relevant for transport is provided in Table 23. 

Table 23: Summary of coordination policies relevant for transport 

Enabling conditions in the 2030 Impact Assessment  New approach 

Intelligent grids and metering (also for electric 
vehicles) 

Battery  technology  development  (for  electric  and 
plug-in hybrid vehicles) and fuel cells 

Coordination policy post 2020  

(Partly  accomplished  in  the  EU  Reference  scenario 
2016  -  implementation  of  the  3rd  Internal  Energy 
Market package). 

EU  Reference  scenario  2016  has  assumptions  on 
battery  technology  development  and  fuel  cells  which 
are  rather  conservative,  consistent  with  the  logic  of  a 
Reference  scenario,  i.e.  without  additional  policies 
stimulating R&D, infrastructure or purchase. 

For  the  decarbonisation  scenarios,  increased  R&D, 
expectations  and 
lower 
learning  effects 
technology  costs  for  electrification  technology  (for 
electric and plug-in hybrid vehicles) and fuel cells.  

lead 

to 

Recharging/refuelling infrastructure 

Coordination policy post 2020   

Market acceptance (of electrification) 

To be part of coordination policies post 2020 

(based  on 
the  Directive  on 
alternative fuels infrastructure) 

the  deployment  of 

(supported  by  the  implementing  measures  following 
the  Directive  on  the  deployment  of  alternative  fuels 
infrastructure) 

Innovation in biofuels 

Coordination policy with impacts post 2030 

165 

 
 
Enabling conditions in the 2030 Impact Assessment  New approach 

These  are  biomass  related  innovation  and  agriculture 
policies  assumed  to  develop  so  as  to  allow  the 
development  of  new  generation  bio-energy  feedstock 
(basically  lingo-cellulosic  crops)  at  large  scale.  As  a 
result,  a  new  industry  would  emerge  ranging  from 
industrial-scale  collection  and  pre-
agriculture, 
conversion 
treatment,  bio-refineries  with  new 
technologies, 
and 
commercialisation. 

standardization 

product 

More ambitious pathways/scenarios for low-emission mobility 

Several  more  ambitious  pathways/scenarios  were  developed  for  the  decarbonisation  of  the  transport 
sector. They all have as starting point the EUCO30 scenario but include additional policy initiatives 
(see  Table  24)  in  three  work  strands:  low-  and  zero-emission  vehicles,  low-emission  alternative 
energy for transport and efficiency of the transport system. These scenarios achieve more ambitious 
emissions  reductions 
terms  of 
achievements/costs to the central scenarios.  

thus  are  not  directly  comparable 

than  EUCO30  and 

in 

Table 24: Summary of measures included in the more ambitious pathways/scenarios  

Scenario 

Description 

Low- and zero-emission vehicles 

Ambitious vehicle 
efficiency standards 
(VEH scenario) 

Same as EUCO30 scenario but with more ambitious vehicle efficiency standards, as 
set out by the Commission in its statements during the trialogue discussions for the 
2020 targets374: 

-  CO2 standards for cars – in 2025: 74gCO2/km; in 2030: 64gCO2/km and in 2050: 

25gCO2/km (on current NEDC test-cycle).  

-  CO2 standards for light commercial vehicles  – in 2025: 106gCO2/km; in 2030: 

97gCO2/km and in 2050: 60gCO2/km (on current NEDC test-cycle). 

-  1.6% average yearly improvement in energy efficiency of new conventional and 

hybrid heavy goods vehicles for 2010-2030 and 0.9% for 2030-2050. 

Low emission alternative energy for transport 

Action on advanced 
renewable fuels (BIO-
A and BIO-B 
scenarios) 

BIO-A  scenario:  same  as  EUCO30  scenario  but  more  ambitious  on  advanced 
renewable  fuels.  BIO-A  scenario  would  explicitly  limit  food-based  biofuels  post-
2020,  very  gradually  reduce  their  share  in  the  2020-2030  perspective  and  further 
reduce  their  share  to  nearly  zero  in  2050  perspective.  BIO-A  scenario  simulates  a 
policy  focussing  on  the  promotion  of  advanced  renewable  fuels  (e.g.  through 
incorporation/blending  obligations  on  the  fuel  suppliers),  thereby  leading  to  earlier 
deployment of production capacity and use of advanced biofuels. Specific incentives 

374  For cars: "…This assessment will cover the range of ambition sought by the European Parliament for a 2025 target in 
the  range  of  68g  to  78g  CO2  /km,  equivalent  to  4-6%  reduction  per  year  in  relation  to  the  2020  target…"  For  light 
commercial vehicles: "This assessment will cover the range of ambition sought by the European Parliament for a 2025 
target  in  the  range  of  105g  to  120g  CO2  /km,  equivalent  to  3-4%  reduction  per  year  in  relation  to  the  average  2012 
emissions from new light commercial vehicles." 

166 

 
 
                                                            
Scenario 

Description 

are  assumed  to  promote  the  uptake  of  biokerosene  and  biomethane  (used  in 
waterborne transport and heavy-duty vehicles). 

BIO-B  scenario:  same  as  EUCO30  scenario  but  with  more  ambitious  policy  on 
advanced  renewable  fuels  and  complete  phase-out  of  food-based  biofuels  by  2030. 
The  total  level  of  biofuels  is  kept  similar  to  EUCO30,  while  reducing  the 
contribution that food-based biofuels make to the overall share in liquid and gaseous 
fuels to 0% in 2030 and beyond. Like in the BIO-A scenario, BIO-B would include 
specific measures (e.g. incorporation/blending obligations on the fuel suppliers in the 
EU) for the uptake of advanced renewable fuels and specific incentives are provided 
to promote the uptake of biomethane and biokerosene. 

Concerning pollutant emissions, it is assumed that new vehicles meet EURO 6 and 
EURO VI requirements.  

Same  policy  assumptions  for  transport  as  EUCO30  scenario  but  assuming  lower 
technology  costs  (e.g.  for  electric  vehicle  component  costs  and  fuel  cells)  due  to 
higher R&D investments. 

Advanced research 
and innovation in 
electro-mobility 
(TECH scenario) 

Efficiency of the transport system 

Focus on efficiency of 
the transport system 
(MOBI scenario) 

Focus on efficiency of 
the transport system 
and fuel taxation 
(MOBI-TAX scenario) 

Same as EUCO30 scenario but assuming: full internalisation of local externalities on 
the  inter-urban  network  from  2025  onwards  plus  modulation  of  infrastructure 
charges for heavy goods vehicles according to CO2 emissions; higher deployment of 
Collaborative  Intelligent  Transport  Systems  and  support  for  multimodal  travel 
information;  measures  promoting  efficiency  improvements  and  multimodality  (e.g. 
review  of  the  Combined  Transport  Directive,  review  of  the  Rail  Freight  Corridors 
Regulation, review of market access rules for road transport). 

Promotion  of  urban  policies  curbing  pollutant  emissions;  reflected  through  air 
pollutants  shadow  values  equal  to  the  damage  costs  from  the  2014  Handbook  on 
external costs of transport.375 

Same  as  MOBI  scenario  but  additionally  reflecting  the  alignment  of  the  EU 
minimum tax rates of petrol and gas oil used as motor fuels. 

Details  on  the  assumptions  used  for  the  transport-related  measures  in  the  central  and  more 
ambitious pathways/scenarios  

CO2 standards for new cars and light commercial vehicles  

The tightening of CO2 standards post-2020 is a key assumption, leading to improvements in energy 
efficiency  and  CO2  emissions  reduction  in  transport.  The  CO2  standards  assumed  in  the 
decarbonisation pathways/scenarios are provided in Table 22 and Table 24. 

Vehicle efficiency of new heavy duty vehicles  

The improvements in specific fuel consumption of new conventional and hybrid heavy goods vehicles 
assumed in the decarbonisation pathways/scenarios are provided in Table 22 and Table 24. 

375  Source: http://ec.europa.eu/transport/themes/sustainable/studies/sustainable_en.htm 

167 

 
 
 
                                                            
Advanced renewable fuels and food-based biofuels  

All scenarios build on the Reference scenario, which reflects biofuel blending mandates currently in 
place at the Member States level. In all decarbonisation pathways/scenarios biofuel uptake is driven 
by policies necessary to achieve the 27% overall renewables target by 2030, reflected by renewable 
(RES)  values376  applied  in  the  transport  sector.  RES  values  also  apply  in  electricity  and  heating  & 
cooling  sectors  for  achieving  the  27%  target.  Food-based  biofuels  respect  the  7%  cap  of  ILUC 
Directive  in  2020  and  their  growth post-2020  is  not  going  beyond  the  cap.  For  aviation, higher  EU 
ETS prices post-2030 drive the uptake of biokerosene in all decarbonisation pathways/scenarios. 

In BIO-A scenario a stronger emphasis is placed on the promotion of advanced renewable fuels (e.g. 
via  an  increase  of  incorporation/blending  obligations  on  the  fuel  suppliers)  leading  to  an  earlier 
deployment of these technologies. The share of advanced renewable fuels is gradually increasing after 
2020 and reaches 4% of total liquid and gaseous fuels by 2030 which represents half of the total share 
of biofuels. Food-based biofuels respect the 7% cap of ILUC Directive over the entire time horizon. 
The share increases to 4.7% in 2020 but is assumed to gradually decline afterwards to nearly zero in 
2050.  Specific  incentives  are  provided  for  the  uptake  of  biokerosene  and  biomethane  which  would 
provide about 1.3% of total liquid and gaseous fuels in transport.  

BIO-B  scenario  also  assumes  increased  blending  requirements  for  advanced  renewable  fuels  post-
2020 (e.g. incorporation/blending obligations on the fuel suppliers), leading to earlier deployment of 
biofuels  production  capacity  and  use  of  advanced  biofuels.  Furthermore,  food-based  biofuel  use 
would be phased out, from 4.7% of liquid and gaseous fuels in transport in 2020 to 0% by 2030. The 
total level of biofuels is kept similar to EUCO30. All biofuels in 2030 are advanced renewable fuels 
in  BIO-B.  Similar  to  BIO-A,  specific  incentives  are  provided  for  the  uptake  of  biokerosene  and 
biomethane which would provide about 1.3% of total liquid and gaseous fuels in transport. 

Advanced research and innovation in electro-mobility  

For the decarbonisation pathways/scenarios, increased R&D, expectations and learning effects lead to 
lower  technology  costs  for  electrification  technology  (for  electric  and  plug-in  hybrid  vehicles)  and 
fuel cells. For an electric vehicle with a range of 250 km, costs in the EUCO27, EUCO30, VEH, BIO-
A, BIO-B, MOBI and MOBI-TAX are €2,100 lower by 2030 than in the EU Reference scenario 2016 
and  €2,400  lower  by  2050.  For  plug-in  hybrid  vehicles  with  electric  autonomy  of  50km,  costs  are 
€2,000 lower by 2030 and €1,500 by 2050, while for fuel cells vehicles they are €4,500 lower by 2030 
and €5,400 by 2050. 

Even lower technology costs (e.g. for electric vehicle component costs and fuel cells), due to higher 
R&D investments, are assumed in the TECH scenario. In this scenario, increased R&D expenditure is 
assumed to deliver reductions in technological components much earlier than in the other scenarios. 
Therefore,  for  electric  vehicles,  costs  are  €3,600  lower  by  2030  than  in  the  EU  Reference  scenario 
2016  and  €3,500  lower  by  2050.  For  plug-in  hybrid  vehicles,  costs  are  €2,200  lower  by  2030  and 
€1,700 by 2050 while for fuel cells they are €12,000 lower by 2030 and €11,000 by 2050. 

376  Renewables  policies  necessary  to  achieve  27%  target  are  reflected  by  RES  values  applied  in  electricity,  heating  and 
cooling and transport sectors. RES values are used in order to ensure cost-efficient RES target achievement at European 
level. RES value is a shadow price, a signal of potential costs per unit of renewable energy not achieved (relative to the 
target) which is internalized in the optimizing behaviours of actors and thus leads to higher RES uptake. RES values do 
not describe in detail the RES supporting policies, but are introduced if needed, in addition to the supporting policies, so 
as to complement them and reach the RES target. The RES value should not be confused with feed-in tariffs or green 
certificates, because it does not model any sort of power purchasing agreement with the RES developers and the RES 
projects compete on equal economic grounds with other forms of energy. 

168 

 
 
                                                            
Recently adopted measures  

Measures adopted after the cut-off date of EU Reference scenario 2016 (i.e. Directive on Weights & 
Dimensions377,  Fourth  railway  package378,  NAIADES  II  package379,  and  the  Ports  Package380)  are 
assumed  to  apply  in  all  scenarios.  The  input  for  modelling  draws  on  the  respective  Impact 
Assessments. 

Fair and efficient pricing for sustainable transport 

-  Gradual  internalisation  of  the  costs  of  infrastructure  wear  &  tear,  congestion,  air  pollution  and 
noise in the pricing of road transport on the inter-urban network is assumed from 2025 onwards. 
For  rail,  internalisation  of the  costs  of  air  pollution, noise  and  congestion  is  assumed  from  2030 
onwards; for inland waterways internalisation of the costs of air pollution is assumed from 2030 
onwards.  In  scenarios  EUCO27,  EUCO30,  VEH,  BIO-A,  BIO-B  and  TECH  the  levels  of  the 
charges are gradually increased from 2025/2030 to 2050, when they become equal to the values of 
the 2014 Handbook on external costs of transport.381  

-  Full internalisation of local externalities is assumed in scenarios MOBI and MOBI-TAX, meaning 
that  the  charges  are  set  equal  to  the  values  of  the  2014  Handbook  on  external  costs  of  transport 
from 2025 onwards for road transport (on the inter-urban network) and from 2030 onwards for rail 
and inland waterways. 

-  Modulation  of  the  infrastructure  charges  according  to  CO2  emissions  for  heavy  goods  vehicles 
(HGVs)  is  assumed  to  apply  in  all  scenarios  except  for  EUCO27;  it  is  assumed  to  apply  on  the 
inter-urban  network  from  2025  onwards.  Starting  from  the  average  infrastructure  charge  in  each 
Member  State,  a  linear  incremental  variation  is  assumed  for  HGVs  with  higher  emissions  than 
average;  a  similar  linear  variation  is  assumed  for  HGVs  with  lower  emissions  than  average  (by 
HGVs  category).  The  measure  is  assumed  to  apply  similarly  to  the  Euro  class-differentiation  of 
network-wide tolls and implies revenue neutrality.   

Collaborative Intelligent Transport Systems (C-ITS)  

Deployment of C-ITS in road transport has been assumed in all scenarios except for EUCO27.  

-  In scenarios EUCO30, VEH, BIO-A, BIO-B and TECH the input assumption for modelling draws 
on the central scenario of a Cost Benefit Analysis (CBA) study carried out by Ricardo-AEA.382  

-  In scenarios MOBI and MOBI-TAX more ambitious deployment of C-ITS is assumed, designed to 
represent  the  impact  of  using  the  cellular  network  to  provide  vehicle-to-infrastructure  (V2I) 
services.  The  input  for  modelling  draws  on  a  sensitivity  developed  by  Ricardo-AEA  within  the 
same study. 

377  SWD(2013)109 final 
378  SWD(2013) 10 final 
379  SWD(2013) 324 final 
380  SWD(2013) 181 
381  Source: http://ec.europa.eu/transport/themes/sustainable/internalisation_en.htm 
382  Source : http://ec.europa.eu/transport/themes/its/c-its_en.htm 

169 

 
 
                                                            
Eco-driving 

Promotion of eco-driving is assumed in all scenarios except for EUCO27; the input assumption used 
for modelling draw on "EU Transport GHG: Routes to 2050?" project.383 It is assumed that virtually 
all drivers would be trained by 2050 (for road and rail). Savings from training decline to 2050 due to 
technology effects. No variation in the level of intensity of the measure is assumed between scenarios. 

Promotion of public procurement through the revision of the Clean Vehicles Directive.   

Using a conservative approach, it is assumed that starting from 2025 the level of vehicles purchased 
under  the  Directive  (i.e.  the  upper  estimate  according  to  the  evaluation  study384)  resemble  the  best-
performing  vehicles  in  the  market  in  terms  of  internalised  external  costs.  Measure  included  in  the 
VEH scenario. 

Review of market access rules for road transport (road haulage).  

For modelling purposes, it is assumed that the measures would lead to a share of empty vehicle-km in 
total vehicle-km for cabotage equal to that of domestic hauliers carrying out national transport from 
2025 onwards. Increasing  the load factors in  PRIMES-TREMOVE  model allows capturing  rebound 
effects  and  possible  modal  shift  due  to  e.g.  lower  unit  costs  relative  to  rail.  Measure  included  in 
scenarios MOBI and MOBI-TAX. 

Support for multimodal travel information  

The  input  for  modelling  is  based  on  a  2014  study385,  showing  that  more  effective  network 
management  and  more  efficient  passenger  transport  through  more  efficient  journeys  and  optimized 
travel choices reduce travel time. For modelling purpose, the measure is assumed to be implemented 
from 2025 onwards. Measure included in scenarios MOBI and MOBI-TAX. 

Promoting intermodal transport  

Drawing on a 2015 study386, the main drivers are assumed to be the decrease in the operation costs for 
combined transport and time costs for rail, inland waterways and short sea shipping, leading to model 
shift  away  from  road  (mainly  towards  rail);  implemented  from  2025  onwards.  Measure  included  in 
scenarios MOBI and MOBI-TAX. 

Promotion of urban policies  

Soft  measures  supporting  urban  policies  that  curb  pollutant  emissions  are  reflected  through  air 
pollutants  shadow  values  equal  to  the  damage  costs  from  the  2014  Handbook  on  external  costs  of 
transport;  implemented  from  2025  onwards.387  Measure  included  in  scenarios  MOBI  and  MOBI-
TAX. 

Alignment of the EU minimum tax rates of petrol and gas oil used as motor fuels 

The  changes  in  the  excise  duty  rates  for  diesel  are  assumed  to  be implemented  from  2025  onwards 
and are provided in Figure 50. Measure included in scenario MOBI-TAX. 

383  "EU Transport GHG: Routes to 2050?" final report is available at: http://www.eutransportghg2050.eu/cms/assets/EU-

Transport-GHG-2050-Final-Report-22-06-10.pdf 

384  Source: http://ec.europa.eu/transport/facts-fundings/evaluations/doc/2015-09-21-ex-post-evaluation-directive-2009-33-

ec.pdf 

385  Source: http://ec.europa.eu/transport/themes/its/studies/doc/20140812-july9thversion-awtfinalreport.pdf 
386  Source : http://ec.europa.eu/transport/themes/strategies/studies/doc/2015-01-freight-logistics-lot2-combined-

transport.pdf 

387  Source: http://ec.europa.eu/transport/themes/sustainable/studies/sustainable_en.htm 

170 

 
 
                                                            
Figure 50: Changes in the excise duty rates for diesel by Member State from 2025 onwards 

900

800

700

600

l

0
0
0
1
/
€

500

400

300

200

100

0

AT BE BG CY CZ DK EE FI FR DE EL HU IE IT LV LT LU MT NL PL PT RO SK SI ES SE UK HR

Petrol 2016

Diesel 2016

Diesel 2025

Additional results of the central and more ambitious pathways/scenarios 

Impact on fuel mix 

Alternative  fuels  and  energy  sources  are  projected  to  gain  increasing  share  in  the  decarbonisation 
pathways/scenarios over time, providing about 59%-61% of energy demand by 2050, due to the large 
scale electrification of the fleet and the uptake of advanced renewable fuels (see Figure 51). Diesel, 
gasoline  and  jet  fuels  would  lose  significant  market  shares  relative  to  REF2016  by  2050:  27-28 
percentage  points,  10-11  percentage  points  and  6  percentage  points,  respectively,  in  terms  of  total 
energy demand in transport. 

Liquid and gaseous biofuels would provide a substantial share of alternative fuels by 2050 (about 36-
38% of total energy demand), followed by electricity (around 16%) and hydrogen (some 3-4%). The 
share of electricity reflects the assumptions on the CO2 standards for LDV in the 2050 perspective. 
Gas would slightly decrease its share compared to 2030 (to about 2%) while LPG is expected  to go 
back  to  levels  similar  to  those  in  2010.  Electricity  and  hydrogen would  provide  about  40%-45%  of 
energy demand by passenger cars while the role of biofuels would be more limited, ranging between 
24% and 27%. Electricity is expected to provide around  85% of energy use in rail transport. Liquid 
and gaseous biofuels would represent around 42-45% of energy consumption in aviation, 44-45% in 
inland  navigation  and  45-48%  in  long  distance  road  freight  by  2050,  where  electrification  is  not  or 
less an option. 

171 

 
 
 
 
 
 
Figure 51: Final energy demand in transport by fuel in 2050 (in % of total)  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Figure 52: Alternative fuels/energy sources in transport in 2050 (in % of total energy demand)  

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

172 

2010REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXAlternative fuels6.7%16.2%60.0%59.9%59.8%59.3%59.1%60.7%59.9%60.2%Fuel oil0.4%0.2%0.1%0.1%0.1%0.1%0.1%0.1%0.1%0.2%Jet fuel13.7%18.1%11.9%12.2%12.3%12.4%12.5%12.4%12.2%12.3%Diesel53.6%50.9%23.4%23.2%23.1%23.5%23.6%22.7%23.1%22.7%Gasoline25.6%14.7%4.6%4.6%4.6%4.6%4.7%4.1%4.6%4.7%0%10%20%30%40%50%60%70%80%90%100%2010REF2016EUCO27EUCO30VEHBIO-ABIO-BTECHMOBIMOBI-TAXLiquefied Petroleum Gas1.5%2.1%1.3%1.3%1.3%1.3%1.3%1.2%1.3%1.3%Gas (CNG and LNG)0.3%3.2%2.1%2.2%2.0%1.8%1.8%2.2%2.2%2.4%Gaseous biofuels0.0%0.2%0.3%0.3%0.3%1.5%1.5%0.3%0.3%0.4%Liquid biofuels3.6%6.0%37%37%37%36%36%36%37%36%Hydrogen0.0%0.7%3.2%3.3%3.3%3.0%3.0%4.4%3.3%3.5%Electricity1.2%3.9%15.8%15.9%16.0%16.0%15.9%16.4%16.0%16.1%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0% 
 
 
 
 
CO2 emissions 

As explained in section 4.3.4, CO2 emissions are expected to decrease by 18 to 22% by 2030 relative 
to 2005 (see Table 25).  

Table 25: CO2 emissions reduction by mode for 2005-2030 and 2005-2050 (in %) 

CO2 emissions (% change to 2005) 

REF2016  

EUCO27  

EUCO30  

'05-'30 

'05-'50 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

Transport - total 

-12.3% 

-11.4% 

-17.7% 

-66.8% 

-19.1% 

-66.9% 

Passenger transport  

-15.7% 

-16.0% 

-22.0% 

-71.9% 

-23.5% 

-71.8% 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

-22.7% 

-26.2% 

-30.3% 

-80.5% 

-32.3% 

-80.7% 

-35.0% 

-65.2% 

-32.7% 

-80.1% 

-32.8% 

-80.1% 

15.3% 

28.6% 

14.2% 

-35.1% 

14.7% 

-33.5% 

-14.7% 

-10.5% 

-12.1% 

-44.8% 

-12.3% 

-44.8% 

-1.9% 

0.2% 

2.9% 

6.3% 

-4.9% 

-51.5% 

-5.7% 

-52.1% 

-3.2% 

-50.8% 

-4.1% 

-51.5% 

-18.3% 

-57.8% 

-17.9% 

-76.0% 

-17.9% 

-76.0% 

Inland navigation 

-25.0% 

-18.8% 

-22.8% 

-50.3% 

-22.9% 

-50.3% 

CO2 emissions (% change to 2005) 

VEH 

BIO-A 

BIO-B 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

Transport - total 

-22.1% 

-67.2% 

-20.6% 

-66.6% 

-19.7% 

-66.5% 

Passenger transport  

-26.9% 

-71.7% 

-24.7% 

-71.3% 

-24.1% 

-71.2% 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

-36.6% 

-80.7% 

-32.9% 

-80.4% 

-32.0% 

-80.3% 

-32.8% 

-80.1% 

-33.5% 

-79.8% 

-32.1% 

-79.7% 

14.7% 

-33.5% 

10.3% 

-32.5% 

10.2% 

-32.3% 

-12.1% 

-44.8% 

-13.1% 

-43.5% 

-11.8% 

-43.3% 

-7.6% 

-53.5% 

-7.9% 

-52.6% 

-6.6% 

-52.5% 

-6.2% 

-53.0% 

-6.5% 

-52.1% 

-5.2% 

-52.0% 

-18.0% 

-76.0% 

-18.7% 

-75.7% 

-17.5% 

-75.7% 

Inland navigation 

-23.0% 

-50.3% 

-23.5% 

-49.2% 

-22.2% 

-49.1% 

CO2 emissions (% change to 2005) 

TECH 

MOBI 

MOBI-TAX 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

'05-'30 

'05-'50 

Transport - total 

-20.0% 

-67.9% 

-19.7% 

-67.0% 

-20.4% 

-67.2% 

Passenger transport  

-24.6% 

-72.9% 

-23.9% 

-71.8% 

-24.4% 

-71.9% 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport  

Road 

Rail 

-33.7% 

-82.2% 

-32.8% 

-80.8% 

-33.3% 

-80.9% 

-32.8% 

-80.2% 

-32.4% 

-80.0% 

-32.5% 

-80.3% 

14.8% 

-33.3% 

14.3% 

-33.6% 

14.1% 

-33.6% 

-12.3% 

-45.0% 

-11.6% 

-44.7% 

-13.2% 

-45.2% 

-5.9% 

-52.5% 

-7.1% 

-52.2% 

-8.4% 

-52.8% 

-4.3% 

-51.9% 

-5.7% 

-51.6% 

-7.2% 

-52.3% 

-17.9% 

-76.0% 

-17.4% 

-75.9% 

-18.1% 

-76.5% 

Inland navigation 

-22.9% 

-50.3% 

-21.8% 

-50.3% 

-21.9% 

-50.4% 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 

Passenger road transport would provide a significant contribution to the emissions decline (30-37% by 
2030 relative to 2005) while road freight would show lower reductions in the medium term (3-7% by 
2030).  In  the  long  term,  all  scenarios  achieve  some  67-68%  total  emissions  reductions  relative  to 
2005, in line with the 2011 White Paper goal of cutting emissions by 60% compared to 1990 levels. 

173 

 
 
Passenger road transport is expected to reduce emissions by about 80-82% compared to 2005 while 
road freight would show significant but more limited decline (about 51-53%). 

Decomposition of CO2 emissions  

As  explained  in  section  3.3,  the  overall  trend  in  transport  emissions  is  determined  by  three  broad 
components: transport activity levels, the energy intensity of transport and the carbon intensity of the 
energy used. Following this approach, it can be shown  how much the projected  transport emissions 
are expected to decrease in each pathway/scenario (in percentage terms or Mt of CO2) between 2005 
and 2030 due to each component for each mode (see Table 26-Table 28). 

Table 26: Decomposition of CO2 emissions for 2005-2030 by transport mode in the REF2016 (% change) 

Decomposition analysis for 2005-2030 (% 
change) 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 intensity 

REF2016  

Passenger transport 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport 

Road 

Rail 

Inland navigation 

-15.7% 

-22.7% 

-35.0% 

15.3% 

-14.7% 

-1.9% 

0.2% 

-18.3% 

-25.0% 

24.5% 

15.6% 

32.6% 

63.2% 

9.1% 

27.3% 

27.8% 

30.1% 

19.9% 

-34.7% 

-31.9% 

-23.3% 

-47.9% 

-16.0% 

-20.9% 

-19.8% 

-19.2% 

-36.9% 

-5.4% 

-6.5% 

-44.3% 

0.0% 

-7.8% 

-8.4% 

-7.7% 

-29.3% 

-8.0% 

Source: EC calculations based on PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  The  figures  report  the  changes  in  CO2  emissions  due  to  the  three  broad  components  (transport  activity  levels,  energy  intensity  of 
transport and carbon intensity of the energy used) in relative terms compared to 2005.  

Overall, efficiency gains play a decisive role in further reducing emissions in road transport relative to 
REF2016. As expected, the highest reduction in emissions due to improvements in energy intensity is 
achieved  in  VEH  for  both  passenger  and  road  transport.  However,  the  differences  to  the  energy 
intensity contribution to emissions cuts in MOBI and MOBI-TAX is not very large. This is because 
measures  intelligently  managing  transport  demand  and  improving  the  efficiency  of  the  system  also 
result  in  energy  intensity  improvements.  The  use  of  less  CO2  intensive  fuels  contributes  to  further 
reduction of emissions for road and rail passenger transport relative to REF2016 and only in the BIO-
A and BIO-B scenarios to emissions reduction in aviation by 2030. 

Table  27:  Decomposition  of  CO2  emissions  for  2005-2030  by  transport  mode  in  the  decarbonisation 
pathways/scenarios (% change) 

Decomposition 
analysis for 2005-
2030 (% change) 

EUCO27  

EUCO30  

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Passenger transport 

-22.0% 

23.0% 

-38.1% 

-30.3% 

13.9% 

-36.0% 

-6.9% 

-8.3% 

-23.5% 

22.9% 

-39.1% 

-32.3% 

13.8% 

-37.3% 

-7.3% 

-8.9% 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport 

Road 

Rail 

Inland navigation 

-32.7% 

38.1% 

-24.2% 

-46.6% 

-32.8% 

38.0% 

-24.2% 

-46.6% 

14.2% 

62.3% 

-48.1% 

-12.1% 

13.2% 

-17.3% 

-4.9% 

-3.2% 

26.0% 

-21.8% 

26.0% 

-20.7% 

0.0% 

-8.0% 

-9.1% 

-8.5% 

14.7% 

62.8% 

-48.1% 

-12.3% 

13.1% 

-17.4% 

-5.7% 

-4.1% 

26.0% 

-22.5% 

25.9% 

-21.5% 

0.0% 

-8.0% 

-9.2% 

-8.5% 

-17.9% 

32.5% 

-20.1% 

-30.2% 

-17.9% 

32.5% 

-20.2% 

-30.3% 

-22.8% 

23.4% 

-38.0% 

-8.2% 

-22.9% 

23.3% 

-38.0% 

-8.2% 

174 

 
 
Table  28:  Decomposition  of  CO2  emissions  for  2005-2030  by  transport  mode  in  the  decarbonisation 
pathways/scenarios (% change) 

Decomposition 
analysis for 2005-
2030 (% change) 

Passenger transport 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport 

Road 

Rail 

Inland navigation 

Decomposition 
analysis for 2005-
2030 (% change) 

VEH 

BIO-A 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

-26.9% 

22.6% 

-41.0% 

-8.5% 

-24.7% 

22.5% 

-39.0% 

-36.6% 

13.3% 

-39.6% 

-10.3% 

-32.9% 

13.6% 

-37.3% 

-8.3% 

-9.2% 

-32.8% 

38.0% 

-24.2% 

-46.6% 

-33.5% 

37.9% 

-24.1% 

-47.3% 

14.7% 

62.8% 

-48.1% 

-12.1% 

13.2% 

-17.4% 

-7.6% 

-6.2% 

25.8% 

-24.2% 

25.8% 

-23.4% 

0.0% 

-8.0% 

-9.3% 

-8.7% 

10.3% 

61.4% 

-47.2% 

-13.1% 

13.0% 

-17.3% 

-3.9% 

-8.7% 

-7.9% 

-6.5% 

25.4% 

-22.3% 

-11.1% 

25.4% 

-21.2% 

-10.6% 

-18.0% 

32.4% 

-20.1% 

-30.3% 

-18.7% 

32.5% 

-20.2% 

-31.0% 

-23.0% 

23.2% 

-37.9% 

-8.2% 

-23.5% 

23.3% 

-37.8% 

-9.0% 

BIO-B 

TECH 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Passenger transport 

-24.1% 

22.5% 

-39.3% 

-32.0% 

13.6% 

-37.6% 

-7.3% 

-8.0% 

-24.6% 

22.9% 

-39.6% 

-33.7% 

13.7% 

-37.9% 

-7.9% 

-9.6% 

-32.1% 

38.3% 

-24.3% 

-46.1% 

-32.8% 

37.9% 

-24.2% 

-46.5% 

10.2% 

61.2% 

-47.2% 

-11.8% 

13.2% 

-17.5% 

-6.6% 

-5.2% 

25.5% 

-22.4% 

25.4% 

-21.4% 

-3.9% 

-7.4% 

-9.7% 

-9.2% 

14.8% 

62.9% 

-48.1% 

-12.3% 

13.1% 

-17.3% 

-5.9% 

-4.3% 

26.0% 

-22.6% 

25.9% 

-21.6% 

0.0% 

-8.0% 

-9.2% 

-8.6% 

-17.5% 

32.7% 

-20.3% 

-29.8% 

-17.9% 

32.5% 

-20.2% 

-30.3% 

-22.2% 

23.5% 

-38.1% 

-7.5% 

-22.9% 

23.3% 

-38.0% 

-8.2% 

MOBI 

MOBI-TAX 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Change in 
emissions  

Transport 
activity 

Energy 
intensity  

CO2 
intensity 

Passenger transport 

-23.9% 

22.3% 

-38.8% 

-32.8% 

13.0% 

-36.9% 

-7.3% 

-8.9% 

-24.4% 

21.8% 

-38.7% 

-33.3% 

12.5% 

-36.8% 

-7.4% 

-9.0% 

-32.4% 

38.8% 

-24.3% 

-46.9% 

-32.5% 

39.0% 

-24.3% 

-47.2% 

14.3% 

62.4% 

-48.1% 

-11.6% 

13.9% 

-17.5% 

-7.1% 

-5.7% 

24.2% 

-22.1% 

23.8% 

-21.1% 

0.0% 

-8.0% 

-9.1% 

-8.5% 

14.1% 

62.1% 

-48.0% 

-13.2% 

12.9% 

-18.1% 

-8.4% 

-7.2% 

23.2% 

-22.3% 

22.7% 

-21.2% 

0.0% 

-8.0% 

-9.3% 

-8.7% 

-17.4% 

33.5% 

-20.3% 

-30.6% 

-18.1% 

33.6% 

-20.6% 

-31.2% 

-21.8% 

25.0% 

-38.5% 

-8.3% 

-21.9% 

25.1% 

-38.7% 

-8.3% 

Source: EC calculations based on PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note:  The  figures  report  the  changes  in  CO2  emissions  due  to  the  three  broad  components  (transport  activity  levels,  energy  intensity  of 
transport and carbon intensity of the energy used) in relative terms compared to 2005.  

Transport activity and modal shares 

Passenger  and  freight  rail  traffic  activity  shows  sustained  growth  in  both  REF2016  and  more 
ambitious pathways/scenarios (39-49% by 2030 for passenger rail and 47-53% for freight rail). This is 
supported  by  the  completion  of  the  core  and  comprehensive  TEN-T  network  by  2030  and  2050, 
respectively, and measures increasing the competitiveness of the rail sector, i.e. 4th railway package, 
the  review  of  the  Combined  Transport  Directive  and  of  the  Rail  Freight  Corridors  Regulation  in 

175 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport 

Road 

Rail 

Inland navigation 

Decomposition 
analysis for 2005-
2030 (% change) 

Road 

Rail 

Aviation 

Inland navigation 

Freight transport 

Road 

Rail 

Inland navigation 

 
 
MOBI and MOBI-TAX (see Table 29). Freight inland navigation activity also goes up in all scenarios 
(22-29% by 2030), driven by the completion of the TEN-T network, the adoption of the NAIADES II 
package and the ports package, and incentives for combined transport (see Table 29). 

Table 29: Change in passenger and freight transport activity relative to 2010 (in %) 

Transport activity (% change to 2010) 

REF2016  

EUCO27  

EUCO30  

'10-'30 

'10-'50 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

Passenger transport  

22.2% 

40.4% 

21.7% 

38.1% 

21.8% 

38.2% 

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

16.9% 

29.3% 

15.7% 

26.3% 

15.7% 

26.4% 

38.8% 

76.0% 

47.5% 

90.4% 

47.3% 

90.2% 

59.5% 

118.2% 

58.3% 

107.1% 

59.0% 

107.6% 

13.8% 

28.3% 

18.6% 

39.3% 

18.5% 

39.0% 

35.2% 

58.4% 

35.2% 

57.0% 

35.3% 

57.1% 

35.2% 

56.7% 

33.4% 

51.0% 

33.5% 

51.1% 

47.4% 

83.7% 

51.1% 

92.5% 

51.1% 

92.4% 

Inland navigation 

22.0% 

39.2% 

26.6% 

48.2% 

26.4% 

48.1% 

Transport activity (% change to 2010) 

VEH 

BIO-A 

BIO-B 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

Passenger transport  

21.7% 

38.2% 

21.6% 

38.2% 

21.5% 

38.2% 

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

15.6% 

26.4% 

15.6% 

26.4% 

15.4% 

26.4% 

47.3% 

90.2% 

47.4% 

90.3% 

47.5% 

90.3% 

59.1% 

107.6% 

58.7% 

107.6% 

58.5% 

107.5% 

18.7% 

39.0% 

18.5% 

39.3% 

18.6% 

39.3% 

35.4% 

57.2% 

35.0% 

57.2% 

34.9% 

57.1% 

33.7% 

51.4% 

33.2% 

51.2% 

33.0% 

51.2% 

51.0% 

92.5% 

51.3% 

92.6% 

51.3% 

92.6% 

Inland navigation 

26.2% 

48.0% 

26.5% 

48.2% 

26.6% 

48.2% 

Transport activity (% change to 2010) 

TECH 

MOBI 

MOBI-TAX 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

'10-'30 

'10-'50 

Passenger transport  

21.9% 

39.1% 

21.1% 

38.3% 

20.5% 

38.0% 

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

15.9% 

27.5% 

14.7% 

26.4% 

14.0% 

26.0% 

47.1% 

89.4% 

48.6% 

91.3% 

48.9% 

91.5% 

59.1% 

108.1% 

58.7% 

107.6% 

58.5% 

107.5% 

18.5% 

38.6% 

19.5% 

39.4% 

18.3% 

38.7% 

35.3% 

57.2% 

34.0% 

57.2% 

33.1% 

56.4% 

33.5% 

51.3% 

31.0% 

51.3% 

29.6% 

50.1% 

51.1% 

92.4% 

52.7% 

92.5% 

53.1% 

93.1% 

Inland navigation 

26.4% 

48.0% 

28.5% 

48.0% 

28.8% 

48.1% 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For aviation, domestic and international intra-EU activity is reported to maintain the comparison with reported statistics.  

As explained in section 4.3.1, road transport modal share for both passenger and freight decreases at 
the expense of rail and inland navigation. Rail passenger transport provides up to 9.6% of passenger 
transport activity by 2030 (10.7% in 2050) in MOBI-TAX scenario, while rail freight up to 17.7% of 
freight transport activity by 2030 (19% in 2050). Freight inland navigation also increases its share, up 
to 13.4% by 2030 (13.1% by 2050) in MOBI-TAX scenario. However, road transport still provides 

176 

 
 
78.8% of passenger transport in 2030 (76.1% in 2050) and 68.9% of freight transport (67.9% in 2050) 
even in the MOBI-TAX scenario. 

Table 30: Modal shares in Reference scenario 2016 and alternative pathways/scenarios 

Modal shares (in %) 

REF2016  

EUCO27  

EUCO30  

2030 

2050 

2030 

2050 

2030 

2050 

Passenger transport  

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

79.7% 

76.7% 

79.1% 

76.2% 

79.1% 

76.2% 

8.8% 

9.7% 

9.4% 

10.7% 

9.4% 

10.6% 

10.9% 

13.0% 

10.9% 

12.5% 

10.9% 

12.6% 

0.6% 

0.6% 

0.6% 

0.6% 

0.6% 

0.6% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

70.7% 

70.0% 

69.8% 

68.0% 

69.8% 

68.1% 

16.8% 

17.9% 

17.2% 

18.9% 

17.2% 

18.9% 

Inland navigation 

12.5% 

12.2% 

13.0% 

13.1% 

12.9% 

13.0% 

Modal shares (in %) 

VEH 

BIO-A 

BIO-B 

2030 

2050 

2030 

2050 

2030 

2050 

Passenger transport  

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

79.1% 

76.2% 

79.1% 

76.1% 

79.1% 

76.2% 

9.4% 

10.6% 

9.4% 

10.7% 

9.4% 

10.7% 

10.9% 

12.6% 

10.9% 

12.6% 

10.9% 

12.6% 

0.6% 

0.6% 

0.6% 

0.6% 

0.6% 

0.6% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

69.9% 

68.1% 

69.8% 

68.1% 

69.7% 

68.1% 

17.2% 

18.9% 

17.3% 

18.9% 

17.3% 

18.9% 

Inland navigation 

12.9% 

13.0% 

13.0% 

13.0% 

13.0% 

13.1% 

Modal shares (in %) 

TECH 

MOBI 

MOBI-TAX 

2030 

2050 

2030 

2050 

2030 

2050 

Passenger transport  

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

Road 

Rail 

Aviation* 

Inland navigation 

Freight transport  

Road 

Rail 

79.1% 

76.3% 

78.9% 

76.1% 

78.8% 

76.1% 

9.3% 

10.5% 

9.5% 

10.7% 

9.6% 

10.7% 

10.9% 

12.5% 

11.0% 

12.6% 

11.0% 

12.6% 

0.6% 

0.6% 

0.6% 

0.6% 

0.6% 

0.6% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

69.9% 

68.1% 

69.2% 

68.1% 

68.9% 

67.9% 

17.2% 

18.9% 

17.6% 

18.9% 

17.7% 

19.0% 

Inland navigation 

12.9% 

13.0% 

13.3% 

13.0% 

13.4% 

13.1% 

Source: PRIMES-TREMOVE transport model (ICCS-E3MLab) 
Note: * For aviation, domestic and international intra-EU activity is reported to maintain the comparison with reported statistics.  

177