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# 52011SC0358

**COMMISSION STAFF WORKING PAPER EN EN /\* \*/**

  

EN

|| EUROPEAN COMMISSION

Brussels, 28.3.2011

SEC(2011) 358 final

COMMISSION STAFF WORKING PAPER

IMPACT
ASSESSMENT
Accompanying document to the
WHITE PAPER
Roadmap to a Single European Transport Area – Towards a
competitive and resource efficient  transport system
SEC(2011) 359 final
SEC(2011) 391 final
COM(2011) 144 final

This
report commits only the Commission’s services involved in its preparation and
does not prejudge the final form of any decision to be taken by the Commission.

TABLE OF CONTENTS

1........... Procedural
issues and consultation of interested parties. 5

1.1........ Background
in the development of the White Paper on Transport Policy. 5

1.2........ Organisation
and timing. 5

1.3........ Consultation
and expertise. 6

1.4........ Results
of the consultation of the Impact Assessment Board. 7

2........... Problem
definition. 9

2.1........ General
context 9

2.2........ Description
and scope of the problem – Mobility of people and businesses today is not
sustainable  10

2.3........ What
if present trends continue?. 14

2.3.1..... Reference
scenario assumptions. 15

2.3.2..... Reference
scenario main results. 16

2.3.3..... Sensitivity
analysis. 18

2.4........ The
root causes of the unsustainability of transport 19

2.4.1..... Cheap
for users, expensive to society: prices do not reflect true costs. 20

2.4.2..... Research
and Innovation: transport technologies do not achieve low carbon mobility. 20

2.4.3..... Supply
of transport services: not sufficiently efficient 22

2.4.4..... Transport
planning: lack of coordination and insufficient awareness of interactions. 23

2.5........ Does
the Union have the right to act?. 24

3........... Objectives. 26

3.1........ Policy
objectives. 27

3.1.1..... General
policy objective. 27

3.1.2..... Specific
policy objectives. 27

3.2........ Trade-offs
and synergies between sustainability goals. 29

3.3........ Consistency
with horizontal objectives of the European Union. 29

3.3.1..... EU
2020 Strategy and Single Market Act 29

3.3.2..... Sustainable
Development Strategy. 30

4........... Policy
options. 30

4.1........ Preliminary
note on methodology. 30

4.2........ Rationale
behind a comprehensive and strategically coordinated EU action. 36

4.3........ Description
of policy options. 39

5........... Impact
analysis of policy options. 53

5.1........ Main
modelling results. 54

5.2........ Economic
impact 56

5.2.1..... Impact
on transport as a business. 56

5.2.2..... Impact
of transport dynamics on: 60

5.3........ Social
impact 66

5.3.1..... Impact
on the degree of citizens’ mobility. 67

5.3.2..... Impact
on accessibility and cohesion. 67

5.3.3..... Distributional
impacts. 69

5.3.4..... Impact
on employment level and conditions (including on gender balance) 70

5.3.5..... Impact
on safety. 72

5.4........ Environmental
impact 72

5.4.1..... Impact
on climate change. 72

5.4.2..... Impact
on air and noise pollution. 73

5.4.3..... Impact
on efficient use of energy and renewable energy sources. 75

5.4.4..... Impact
on biodiversity and other environmental resources. 77

5.5........ Conclusions. 78

5.6........ Sensitivity
analysis of policy options. 80

6........... Comparison
of the options. 81

7........... Monitoring
and evaluation. 87

8........... Reference
Documents. 90

9........... Annexes. 93

1.
Procedural issues and consultation of interested
parties

Identification

Lead DG: Directorate General for Mobility and
Transport

Agenda Planning: 2010/MOVE/002

1.1.
Background in the development of the White Paper on Transport Policy

1.
In the last two decades, EU transport policy has
been the subject of periodic assessments and of strategic guidance in the form
of White Papers, which have provided policy evaluation and alignment with
current priorities and general policy orientations.

2.
In 1992, the Commission published a White Paper
on the common transport policy, which was essentially dedicated to market
opening. Almost ten years later, the 2001 White Paper emphasised the need to
manage transport growth in a more sustainable way by achieving a more balanced
use of all transport modes.

3.
The White Paper accompanied by this impact
assessment report identifies the challenges that the transport system is likely
to face in the future, based on an evaluation of policies and developments in
the recent past and on an assessment of current trends. It then defines a
long-term strategy that would allow the transport sector to meet its goals with
a 2050 horizon.

1.2.
Organisation and timing

4.
For the preparation of the White Paper on
Transport Policy an inter-service group was set up and meetings were organised
between November 2009 and June 2010 in order to collect the views of various
services[1].

5.
This Impact Assessment was elaborated by DG MOVE
in collaboration with DG ENER and DG CLIMA. In this context, an Impact
Assessment Steering Group (IASG)[2]
was jointly set up and met three times between October 2010 and December 2010.
The timing of the proposal development and the key aspects of the proposals
(including modelling results) were discussed extensively in the context of
these inter-service meetings. The last IASG meeting took place on 14 December
2010. A final version incorporating the comments made during this meeting was
circulated on 16 December 2010.

1.3.
Consultation and expertise

6.
With a view to preparing the ground for later
policy developments, the Commission has launched a reflection on the future
transport system in 2009, comprising a public consultation from 30 January 2009
until 27 March 2009, an evaluation study on the European Transport Policy
(ETP); a debate within three ‘Focus Groups’; a study – ‘Transvisions’ –
identifying possible low-carbon scenarios for transport and a consultation of
stakeholders, notably through a High Level Stakeholders’ Conference on 9-10
March 2009.

7.
The Communication on “A sustainable future
for transport: Towards an integrated, technology-led and user friendly system”[3], adopted by the
Commission on 17 June 2009, summarises the results of this wide reflection.
Through this Communication, the Commission launched an open debate covering the
main challenges for EU transport policy, the key objectives for the transport
system and the ways how to meet them.

8.
In this Communication, the Commission encouraged
all interested parties to contribute their views on the future of transport and
on possible policy options to address the future challenges of the transport
sector. Following the public consultation which has run until 30 September 2009
and had attracted more than 250 respondents, a second High Level Stakeholders’
conference took place on 20 November 2009. It aimed at collecting stakeholders’
views on concrete measures which would need to be considered in the preparation
of the new Transport White Paper.

9.
The summaries of the stakeholder meetings and
the contributions received during the preceding public consultation are
available on the Commission website[4].

10.
Input from stakeholders has been taken into
account in assessing the different possible actions to improve the
sustainability of the transport system in the EU. External expertise was used
to assess the various options available, including aspects raised during the
public consultation.

11.
As shown by the detailed assessment presented in
Appendix 1 of this report, it
can be concluded that the minimum standards for the consultation have been
respected.

1.4.
Results of the consultation of the Impact
Assessment Board

12.
Following the submission of a draft report to
the Impact Assessment Board (IAB) on 20 December 2010 and a hearing with the
IAB (which took place on 26 January 2011), the IAB sent its opinion on 28
January 2011, asking DG MOVE to resubmit the draft report. A revised version of
the IA report has been sent to IAB on 31 January 2011.

13.
In its opinion of 28 January 2011, the IAB made
five recommendations that were addressed in the final version of the IA report
in the following manner:

(1)
The IA report should better explain how the IA
report builds on evaluation of existing policies to better demonstrate the
lessons learnt

14.
The main conclusions from the ex post evaluation
presented in appendix 2 of the IA report have been introduced in the section on
the problem definition. The connection has been reinforced between those
conclusions and the baseline projection, the problem drivers, the objectives
and the definition of policy options.

(2)
The IA report should define more clearly the
concept of sustainable mobility and how it is reflected in the definition and
prioritisation of objectives

15.
The concept of sustainable mobility has been
clearly defined in the revised version and the specific objectives have been
streamlined. A discussion on the prioritisation of the policy objectives and on
the possible trade-offs between those objectives and other sustainability goals
has been added to the Section 3 of the IA report.

(3)
The IA report should provide more clarity about
the design, content and differences between the options and the features they
have in common

16.
The revised version of the IA report provides
greater clarity on how the seven policy areas and the policy measures were
identified. Further explanation about the content of Table 4 has been provided and its
presentation improved. The IA report has clarified how the differences between
the various policy options have been reflected in modelling results.

(4)
The IA report should provide much greater
clarity about the assumptions underlying the modelling results and give more
clarity about cost figures, especially as regards the concept of ‘total
transport costs’.

17.
The revised IA report has further explained the
key assumptions that have been made in the modelling exercise. Subsection 5.6 on sensitivity analysis has been added in
the section assessing the possible impacts of the various policy measures. The
different concepts of costs used in the IA report have been clarified further.
Additional modelling results (in particular on costs) have been provided.

(5)
The IA report should provide a global assessment
of the most affected industrial sectors, social groups and regions,
differentiating between short and long term impacts.

18.
The revised IA report gives a qualitative
assessment about which industrial sectors, social groups, and regions will be
most affected by the proposed policies in Section 5 on the assessment of
impacts.

19.
The revised IA report has also been fine-tuned
on the basis of the more technical comments transmitted to DG MOVE.

20.
On 2 February 2011, the IAB issued a second
opinion on the revised IA report with several recommendations which have been
taken into account in the following manner:

(1)
Clarify certain baseline issues, define
sustainable transport in a more operational way, and reconsider subsidiarity
with respect to some urban mobility issues

21.
This recommendation has been addressed by
clarifying in footnote 25 why some policy initiatives are not
included in the baseline, by explaining in point 102 the concept of "society's economic,
social and environmental needs" and by reconsidering subsidiarity with
respect to some urban mobility issues in point 95.

(2)
Further clarify the content of and differences
between policy options.

22.
This recommendation has been addressed by:

–
clarifying further the third specific objective
linked to congestion in point 103,

–
explaining better the choice of the endogenous
variables under each Policy Option in point 136,

–
stating clearly that the IA refers to CO2
level in excise duty in footnote 101.

–
explaining to what extent the assumptions
concerning urban mobility can be the same across options, given that the CO2
shadow price is an endogenous variable in option 4 in footnote 108.

(3)
Improve transparency about the assumptions
underlying the modelling results

23.
This recommendation has been addressed by
explaining the assumptions concerning fuel price elasticities in footnote 383, by explaining better the role of the
modelling specifications in point 148 and Table 4 and by providing more explanations
about the contribution of price signals and sensitivity analysis in section 5.6 and footnotes 83 and 160.

(4)
Strengthen the presentation of cost categories
and clarify remaining inconsistencies

24.
This recommendation has been addressed by
reinforcing the presentation of cost concept in point 249 and by checking the summary tables.

(5)
Procedure and presentation

25.
A concise version of Table 4 has been added.

2.
Problem definition
2.1.
General context

26.
On 17 June 2010, the European Council endorsed
the Europe 2020 strategy (hereinafter “the EU 2020 strategy”) for smart,
sustainable and inclusive growth[5],
setting out a vision of Europe’s new social market economy for the 21st
century[6].
The EU 2020 strategy rests on three interlocking and mutually reinforcing
priority areas: Smart growth, developing an economy based on knowledge
and innovation; Sustainable growth, promoting a low-carbon, resource-efficient
and competitive economy; and Inclusive growth, fostering a
high-employment economy delivering social and territorial cohesion. In order to
meet the agreed EU-level targets, the Commission has proposed a Europe 2020
agenda consisting of seven flagship initiatives to catalyse progress under each
priority[7].
Among these, the aim of the resource efficiency flagship[8] is to support the shift
towards a resource-efficient and low-carbon economy that is efficient in the
way it uses all resources. The stated aim is to decouple economic growth from
resource and energy use, reduce CO2 emissions, enhance
competitiveness and promote greater energy security.

27.
The White Paper on Transport Policy accompanied
by this impact assessment report falls within the scope of the resource
efficiency flagship. In this respect, the assessment of
impacts, in particular modelling the effect of various policy options in terms
of GHG emissions, was jointly undertaken by the Directorates-General Climate
Action, Mobility and Transport and Energy. Therefore the current report is part
of a joint impact assessment for the Commission’s initiatives related to the
transition to a low-carbon economy by 2050. This ensures consistency not only
in the modelling framework, but also in the resulting development of policies. The overall policy goal is to design a path towards a low-carbon,
competitive economy that would meet the long-term requirements for limiting
climate change to 2 °C.

28.
At the same time, the White Paper on Transport
Policy addresses also issues related to some other flagships, and notably
“Innovation Union”, “An industrial policy for the globalisation era”, “A
digital agenda for Europe”, “An agenda for new skills and jobs” and “European
platform against poverty” (the territorial cohesion aspect).

2.2.
Description and scope of the problem – Mobility
of people and businesses today is not sustainable[9]

29.
The transport services sector accounted for
about 4.6% of total EU gross value added in 2008[10];
this figure excludes other related activities, as the manufacturing of
transport vehicles and equipment, the construction and maintenance of transport
infrastructure, fuel refining, and own account transport[11].

30.
Modern transport systems have given Europe a
high degree of mobility with an ever increasing performance in terms of speed, comfort, safety and convenience. Average mobility per person in the
EU, measured in passenger-kilometre per inhabitant, increased by 7% between
2000 and 2008, mainly through higher motorisation levels as well as more high-speed
rail and air travel. Freight transport demand continued to grow by more than
GDP over the last decade (with the exception of the crisis years 2008 and
2009).

31.
However, this enhanced mobility has developed
over the last decades in a context of generally cheap oil, expanding
infrastructure and loose environmental constraints. Now that those framework
conditions have changed, the transport system is no longer able to develop
along the same path without serious unintended consequences in the form of environmental,
economic and social costs.

32.
An in-depth ex post evaluation work undertaken
by the Commission[12],
has shown that, while several features of the transport system have improved in
the last decade - notably its efficiency, safety and security - there has been
no structural change in the way the system operates. The inability to modify
the current transport paradigm, presently founded on the use of fossil fuels
and on the dominance of road transport in moving both freight and passengers,
is one of the main causes of unsustainable trends: growing GHG emissions,
persistent oil dependency and mounting congestion.

33.
The ex post evaluation has revealed that past
policies have been ineffective in correcting the market failures that determine
the present situation and in triggering the necessary transformation:

–
Charges and taxes do not fully reflect the
societal costs of transport. The attempts at introducing policies to
internalise the transport externalities and to remove present tax distortions
have been unsuccessful. The road and aviation sector are the main beneficiaries
of such distortions;

–
EU research policies have not been able to
address the full cycle of research, innovation and deployment in an integrated
way through focusing on the most promising technologies and bringing together
all actors involved. As a result the potential of research and innovation in
contributing to EU transport policy objectives has not been exploited to its
full extent;

–
Investments to modernise the rail network and
the transhipment facilities have been insufficient to address the bottlenecks
in multimodal transport. Modal networks continue to be poorly integrated. TEN-T
policy has lacked financial resources and a true European and multimodal
perspective;

–
Legislation prescribing market opening in rail
freight as of 2007 and in international rail passenger as of 2010 has been
implemented slowly and incompletely in the large majority of Member States.
Enforcement has been inadequate. National passenger markets, that represent the
largest share of the business, are still largely closed. The crossing of
national borders continues to cause inefficiencies and additional costs in
rail. Also short sea shipping faces higher administrative burden compared to
the land-based modes whenever national borders within the EU are crossed. The
lack of competition and residual administrative barriers held back the quality
and efficiency of the service and partly explain the low appeal of the main
alternatives to road transport, particularly on medium and long distances;

–
EU policies have not addressed local and urban
transport until recently. The concept of helping local government, while
respecting subsidiarity, tackle congestion, pollution, and safety problems
requires a new and integrated policy approach to urban mobility.

CO2 emissions from transport are
still growing

34.
Global warming is unequivocal, as is now evident
from observations of increases in global average air and ocean temperatures,
widespread melting of polar ice caps and glaciers, and rising global average sea levels. The dominant factor in the
warming of the climate in the industrial era is the increasing concentration of
various greenhouse gases (hereinafter “GHG”) in the atmosphere due to human activities. The GHG
contributing most to climate change is CO2 and its emission has to
be significantly reduced in order to limit climate change to 2 ºC above
pre-industrial levels.

35.
Today transport accounts for around one-quarter
of EU CO2 emissions[13].
CO2 emissions from transport[14]
have been growing over the last 20 years. Only in 2008 and in 2009 was there a
drop in CO2 emissions from transport, but this was combined with a
drop in transport activity[15].
New vehicles have become more fuel efficient and hence emit less CO2
per km than earlier models did in the past, but these gains have been eaten up
by rising vehicle numbers, increasing
traffic volumes, and in many cases better performance
in terms of speed, safety and comfort.

Transport is extremely dependent upon oil

36.
The lack of progress in decoupling transport
growth from the growth in CO2 emissions results first and foremost
from the fact that transport is one sector of the economy where substitution
with other energy carriers has been negligible. Transport continues to rely
nearly entirely on oil and oil products: for more than 95% of its needs
worldwide and 96% in EU-27[16].

37.
Gasoline and diesel consumption makes up for 95%
of energy use in road transport. Diesel accounts for almost the entirety of the
commercial fleet, and a growing proportion of private cars (a third in 2008).
Maritime and aviation continue to rely entirely on fuel oil and kerosene,
whereas in rail some further electrification has taken place in the last
decade.

38.
Since Europe imports 84.1% of its crude oil from
abroad[17],
this makes transport, and hence the wider economy of Europe, very reliant on
the availability of oil and petroleum products on world markets. As “…energy
supply security must be geared to ensuring the proper functioning of the
economy, the uninterrupted physical availability at a price which is
affordable, while respecting environmental concerns”[18], oil security is often equated with improving the security of
supply for the transport sector.

Rising levels of congestion prevent the EU
transport system from keeping pace with the mobility needs and aspirations of
people and businesses

39.
Whilst people and businesses value mobility
highly, they have also become much more concerned about the adverse impacts of
transport on health and quality of life and about their own experience as
congestion mounts. In this respect, it is interesting to note that the Consumer
Markets Scoreboard of October 2010, identified railways as one of the top four
services market where consumers experienced most problems[19].

40.
In many places, the
current capacity of transport networks is not able to meet the demand that is,
or will be, regularly placed on them. In those circumstances, the inevitable
result is congestion in urban areas and regions, at the entrance of the main
cities, and on the key transit roads, overcrowding on some public transport
links and lengthy queues at some airports. When networks are overused, journey
times lengthen and reliability suffers.

41.
Changes in commerce and personal travel patterns
have increased the importance of a reliable and efficient transport system
because of more complex and inter-related supply chains and increasingly
complex scheduled activities. In this context, the unreliability and
inefficiency of transport has a marked effect on downstream activities. The
expectation from these demand trends is increasingly that transport should
provide high levels of reliability and of efficiency.

42.
The building of new infrastructure to reduce
congestion and accommodate higher levels of traffic is less and less a
practicable solution. The impact of infrastructure on the environment is a
growing concern. In addition, the current economic crisis reasserts the
importance of putting budget accounts into a long-term sustainable path. This
implies reducing public deficit and debt and improving the quality of public
finance. More cost-effective solutions would have to be found to tackle
congestion than relying on expanding ‘hard’ infrastructure.

43.
Congestion is not just a problem for the
individual user. Congestion that is prevalent in agglomerations and in their
access routes is the source of large costs.

44.
It has a negative impact on the environment
since it results in increased air[20]
and noise[21]
pollution. Congestion also generates higher fuel consumption[22]: vehicle fuel
consumption increases approximately 30% under heavy congestion[23]. 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.

45.
In light of the above, the Commission is of the
opinion that today’s EU transport system does not sufficiently keep pace with
the mobility needs and aspirations of people and businesses. High levels of
congestion cause large costs to the society, inconvenience and dissatisfaction
to people and companies[24].
This could ultimately become a brake on economic growth.

Conclusion

In
light of the above, it can be concluded that the European Union has not
succeeded in containing the growth of the economic, environmental and social
costs of mobility while simultaneously ensuring that current and future
generations have access to safe, secure, reliable and affordable mobility
resources to meet their own needs and aspirations.

The
Commission is therefore of the opinion that the EU transport system today is
not sustainable enough.

Firstly,
it is not sufficiently resource efficient so as to promote sustainable growth
in the meaning of the EU 2020 strategy. Transport is extremely dependent upon
oil whereas CO2 emissions from transport-related activities account
are still growing.

Secondly,
with congestion growing, it does not sufficiently keep pace with the mobility
needs and aspirations of people and businesses.

2.3.
What if present trends continue?

46.
The Commission has carried out an analysis of
possible future developments in a scenario at unchanged policies, the so-called
baseline scenario or “Reference scenario”. The
Reference scenario is the same with the one used in the Impact Assessment of
the “Low-carbon economy 2050 roadmap” and in the forthcoming 2050 Energy
Roadmap. The Reference Scenario to 2050 is presented in more detail in Appendix
3 of the present Impact Assessment Report, whereas the inventory of the policy
measures included in this scenario is provided in Appendix 4.

47.
The Reference scenario is a projection, not a
forecast, of developments in absence of new policies beyond those adopted by
March 2010[25].
It therefore reflects both achievements and deficiencies of the policies
already in place. This projection provides a benchmark for evaluating new
policy measures against developments under current trends and policies. The
Reference scenario builds on a modelling framework including PRIMES,
TRANSTOOLS, PRIMES-TREMOVE transport model, TREMOVE and GEM-E3 models[26], [27].

2.3.1.
Reference scenario assumptions

48.
The projection is built on a set of assumptions
related to population growth, macro-economic projections, developments in oil
price and technology improvement.

49.
Demographic change is transforming the EU with
inevitable consequences also on the transport sector. In the Reference case,
the population projections draw on the EUROPOP2008 convergence scenario
(EUROpean POPulation Projections, base year 2008) from Eurostat, which is also
the basis for the 2009 Ageing Report (European Economy, April 2009)[28],[29]. The key drivers
for demographic change are: higher life expectancy, low fertility and inward
migration. The EU-27 population is expected to grow by 0.2% per year by 2035
and slightly decline afterwards, remaining fairly stable in number at around
500 million in the next 40 years.

50.
Elderly people, aged 65 or more, would account
for 24% of the total population by 2020 and 29% by 2050 as opposed to 17%
today. Around one in six people in the EU has a disability. Over 20% of elderly
people aged over 75 are severely restricted. Ageing and the extended longevity
of people can be expected to lead to increasing numbers of elderly people with
a severe disability[30].

51.
In the Reference scenario, the average GDP
growth rate for EU-27 is only 1.2% per year for 2000-2010, while the projected
rate for 2010-2020 is assumed to recover to 2.2%, similar to the historical
average growth rate between 1990 and 2000. In the medium run the higher
expected growth rate is due to higher productivity growth assumed in Member States
that are catching up. GDP growth rate in the EU-27 is projected to fall to 1.6%
during 2020-2050, mainly due to demographic ageing which, with a reduction in
the working-age population, is expected to act as a drag on growth[31].

52.
The Reference scenario assumes a relatively high
oil price environment compared with previous projections, and similar to
projections from the International Energy Agency (IEA)[32], with oil prices of 59
$/barrel in 2005 rising to 106 $/barrel in 2030 and 127 $/barrel in 2050 (in year
2008-dollars) [33],
[34]. As a result,
total fuel costs for the transport sector would be about 300 billion euro
higher in 2050 relative to 2010 which represents more than 70% increase over
the period under review.

53.
In terms of technological developments, battery
costs for plug-in hybrids and electric vehicles are assumed to remain high by
2050, at about 560-780 €/kWh[35],
but 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.

2.3.2.
Reference scenario main results

54.
Modelling projections show that, in a no policy
change scenario, the unsustainable features of the EU transport system
identified in the ex-post evaluation are likely to worsen in a context of
growing demand for transport. Total transport activity is expected to continue
to grow in line with economic activity even though a decrease is visible for
2008-2009 as a result of the recent economic crisis. The recovery foreseen
starting with 2010 is reflected by transport activity returning to its long
term trends. Total passenger transport activity would increase by 51% between
2005 and 2050 while freight transport activity would go up by 82%[36].

55.
Transport accounts today for over 30% of final
energy consumption. In a context of growing demand for transport, final energy
demand by transport is projected to increase by 5% by 2030 and an additional 1%
by 2050 to then 32% of total final energy consumption, driven mainly by
aviation and road freight transport. At the same time, however, the energy use
of passenger cars would drop by 11% between 2005 and 2030 due to the implementation
of the Regulation setting emission performance standards for new passenger cars[37].

56.
Renewables would represent 10% of total energy
consumption in transport by 2020, reflecting the implementation of the
Renewables Directive[38].
Their share would gradually increase to 13% by 2050[39]. However, the pace of
electrification in the transport sector is projected to remain slow in the
Reference scenario: electric propulsion in road transport does not make
significant inroads by 2050[40].

Source: PRIMES and
projections based on TRANSTOOLS for maritime

Figure 1: Evolution of total final energy
consumption and CO2 emissions between 1990 and 2050 in the Reference
scenario[41]

57.
As a consequence, the EU transport system would
remain extremely dependent on the use of fossil fuels. Oil products would still
represent 90% of the EU transport sector needs in 2030 and 89% in 2050 in the
Reference scenario.

58.
In a no policy change scenario in which pricing
mechanisms remain inadequate and in which the way the transport system operates
is not improved substantially, people and businesses would not receive
sufficient incentives to shift away from road transport. In this context, road
would remain the dominant mode in both freight and passenger transport. In this
context, whereas transport today accounts for about one fourth of total CO2
emissions[42],
the share of CO2 emissions from transport would continue increasing,
to 38% of total CO2 emissions by 2030 and almost 50% by 2050,
following a relatively lower decline of CO2 emissions from transport
compared to power generation and other sectors. This is due to the higher cost
of abating emissions in the transport sector. Overall, CO2 emissions
from transport would still be 31% higher than their 1990 level by 2030 and 35%
higher by 2050, mainly owing to the fast rise of transport emissions during the
1990s[43].
Aviation and maritime would contribute an increasing share of emissions over
time. This trend is not compatible with the objective of a low-carbon, competitive
economy that would meet the long-term requirements for limiting climate change
to 2 °C.

59.
External costs of transport would continue
increasing. The increase in traffic would lead to a roughly 20 billion €
increase of noise-related external costs by 2050 and external cost of accidents
would be about 60 billion € higher[44].
The external cost of accidents in urban areas would increase by some 40%. Only
the external costs related to air pollutants would decrease by 60% by 2050.

60.
In particular, congestion would continue to
represent a huge burden on the society. Congestion costs are projected to
increase by about 50%, to nearly 200 billion € annually.

2.3.3.
Sensitivity analysis

61.
Considering the high degree of uncertainty
surrounding projections over such a long time horizon, especially for such a
complex system as transport, a sensitivity analysis has been carried out with
respect to developments in oil prices[45].
An evaluation is also provided below for the effects of higher GDP growth on
transport activity by 2030.

62.
If oil prices in 2050 were almost 70% higher
than in the Reference scenario (212 $/barrel in 2050 in year 2008-dollars,
compared to 127 $/barrel in the Reference scenario), this would have only
moderate effects on transport activity: passenger transport activity would be
some 5% lower than in the Reference scenario in 2050 and freight transport
activity would be almost 8% lower. However, some modal shift would take place
in favour of rail, which is expected to be largely electrified by 2050: the
modal share of rail in passenger transport would increase by some 3 percentage
points while in freight transport rail’s share would be more than 1 percentage
point higher in 2050 than in the Reference scenario[46]. The high oil price
environment triggers the uptake of electric propulsion vehicles on a large
scale but conventional ICE cars would still represent about 26% of the total
passenger transport activity in 2050. High oil prices would only lead to about
20% lower CO2 emissions by 2050[47].
CO2 emissions from maritime transport would decrease by about 20%
relative to the Reference scenario in 2050.

63.
An estimate of the impact of higher GDP growth
on transport activity can be provided by comparing the Reference scenario with
a similar scenario from the Impact Assessment of the 2008 Climate and Energy
Package, which assumes higher GDP (pre-crisis) projections[48],[49]. In this
scenario, GDP in 2030 is some 11% higher than in the Reference scenario. With
higher GDP, both passenger and transport demand would be higher relative to the
Reference scenario, although the effect is more pronounced for freight
transport: passenger transport demand would be some 3% larger by 2030 compared
to the Reference scenario, while freight transport would add some 5% over the
same time period. Without additional policies in place, CO2
emissions from transport would be higher in this scenario than in the Reference
scenario. The fact that in the Reference scenario the lower GDP growth
translates into a less than proportional decrease in transport volumes reflects
the view that transport is becoming less responsive to changes in overall
economic activity. Indeed, we have already observed the decoupling of passenger
traffic from GDP in recent years, possibly due to high congestion levels and
the high car ownership in some EU-15 Members States where passenger car
activity is close to saturation levels. A similar, though less pronounced
development may occur in freight transport owing to the fading out of the
effects of the enlargement, to the impact of growing oil prices and to the ever
increasing weight of the service sector in the economy, but also due to the
restructuring of logistics systems, the realignment of supply chains and the
rescheduling of product flows.

Conclusion

It is clear from the above that, factoring in all
the indicators, today’s unsustainable system of mobility is not likely to
become sustainable if present trends continue.

2.4.
The root causes of
the unsustainability of transport

64.
This section analyses why the transport system
is not capable to adjust to changing external circumstances – such as climate
change, infrastructure constraints and oil scarcity – and take a sustainable
path.

65.
Transport is a complex system that is based on
the interaction of many components all of which need to evolve together:
vehicles, infrastructure, behaviour etc. This explains the strong inertia of
the system and the need for addressing several problem areas in order to
determine a paradigm shift.

66.
As indicated in point 33 above, the Commission has identified four
main areas in which market and regulatory failures prevent the EU transport
system to develop into a sustainable system. These drivers are relative prices,
technology deployment, conditions of supply and planning.

67.
At this stage, it is important to note that,
whereas the drivers identified below are the root causes explaining why the EU
transport system is not sustainable, it is not possible to strictly map a
particular driver to a specific problem given the complexity of a system such
as transport.

2.4.1.
Cheap for users, expensive to society: prices do
not reflect true costs

68.
In transport, like in any other sector, there
cannot be economic efficiency unless the prices reflect all costs - internal
and external – to the society actually caused by the users. By providing
information on the relative scarcity of goods or services, prices convey
essential information to users, operators and investors.

69.
Today, as highlighted in section 1.1 of the ex post evaluation, most of the
external costs of transport are still not internalised[50]. Where existent,
internalisation schemes are not co-ordinated between modes and Member States.
Many taxes and subsidies directly affecting modal choices have been designed
without the internalisation goal in view, rather pursuing traditional fiscal
aims: the internalisation part of fuel taxation for instance is not clearly
identified against other components of the tax. There are inconsistent taxation
rules between transport modes and fuels, between and within Member States. In
the worst case, tax systems subsidise environmentally unsustainable choices:
for example, the favourable company car taxation rules give incentives for an
artificially high car use[51].

70.
On the other hand, public support to the
transport sector can be justified to the extent that transport brings about
positive externalities to society – for example by connecting an isolated
region and contributing to its economic growth – or in case of infrastructure
that has the characteristics of a public good.

71.
As long as the total costs to society induced by
transport activities (including the cost of infrastructure provision and
maintenance) are not correctly reflected in the costs borne by transport users,
the demand for transport stays above its optimal level and the pricing system
fails to steer the customers towards most efficient and sustainable mobility
choices[52].

2.4.2.
Research and Innovation: transport technologies
do not achieve low carbon mobility

72.
The ex post evaluation undertaken by the
Commission has shown that transport research and innovation in Europe today are
progressing in supporting the development and deployment of key technologies
that are needed to develop the EU transport system into a modern, decarbonised
efficient and user-friendly system[53].
However, bringing the products and services to the market to attain this
objective is not fast enough.

73.
This situation is due to a wide variety of
market and regulatory failures, such as non-appropriability of research,
coordination failures, and path dependency[54].
These are manifested as:

–
Weak innovation process resulting from the often
missing direct link between research and development and deployment;

–
Lack of sufficient coordination of efforts
between the EU, Member States, public and private actors related to insufficient data and
information and lack of common setting of strategic
priorities;

–
Excessive time to bring the technology to market,
even though long lifetime of vehicles and infrastructure requires action now to
meet our long term policy objectives; and

–
The complexity of technology options, which
makes difficult to choose between a ‘broad portfolio’ approach and strategic
technology targeting of scarce financial, managerial and scientific resources.

74.
The continued oil dependence of
transport-related activities is a clear manifestation of the problem[55].

75.
User behaviour plays a determining role in the
success or failure of new technologies. Users, apart from ‘early adopters’, are
often unwilling to change their customary way of travelling and transporting
goods, and accept alternative solutions. Lack of properly presented and
reliable[56]
information and uncertainty may also influence decisions, as, for example, in
the case of underestimation of fuel savings over the life time of an energy
efficient vehicle.

2.4.3.
Supply of transport services: not sufficiently
efficient

76.
Whereas the EU has opened to competition most of
its transport markets since the 90’s, a number of obstacles to a smooth and
efficient functioning of the internal transport market persist. In this
respect, a more detailed analysis of this driver, which is based upon the
result of the ex post evaluation, is provided in Appendix 6 of the present
Impact Assessment report[57].

77.
The level of integration of the EU transport
market remains low in comparison to other parts of the economy. A genuine EU-wide
internal market exists only in air transport, while other transport modes
suffer from different degrees of fragmentation along national borders; this
concerns in first place rail and inland waterways, but road and short sea
shipping are also affected.

78.
Cross-border transport and competition in
national markets is hindered by protectionist regulations or attitudes, often
defending the interest of incumbents and restricting access to domestic markets
by foreign operators and new market entrants. In some liberalised market
segments, a complete and correct implementation and enforcement of EU
legislation by Member States is still missing. This is particularly the case
for rail freight transport, which has been open to competition since January
2007.

79.
Besides, transport infrastructure has been
historically designed to serve national rather than European goals and cross
border links constitute bottlenecks that are likely to become increasingly
costly as the EU economy continues integrating.

80.
The lack of universally approved standards on,
for example, traffic management and data exchange systems, on power supplies,
and on educational requirements for transport workers are further obstacles to
cross-border traffic and in some cases preclude the reduction of production
costs achievable with a larger scale of production.

81.
Integration between transport modes is still far
from being achieved. Multimodal infrastructure such as multimodal transhipment
platforms for freight and integrated rail-air-public transport nodes for passengers
is not sufficiently developed. Exchanging data between the modes is difficult
because of the co-existence of non-interoperable modal IT systems.

82.
In addition, the EU transport system suffers
from an uneven level playing field regarding national health, social, safety
and security standards, which is particularly felt in some market segments such
a road transport.

83.
Finally, the human factor is a crucial component
in transport to create a higher quality and more reliable transport system with
a higher sensitivity to customers’ needs. In this respect, the EU transport
system has suffered in normal demographic and economic conditions from skill
shortages and a tight labour supply, not least given the difficulties inherent
to the working conditions of mobile workers (working far from home often at
asocial working hours, safety and security risks…)[58]. The sector will be
particularly vulnerable as it is ageing more than the economy-wide average and
it is a sector where women’s participation is much lower than the average.
These traits are particularly relevant in railways, inland waterways and short
sea shipping which would receive traffic from the more energy intensive modes
such as road transport and aviation.

84.
All these elements induce suboptimal modal choices,
delayed adoption of new technologies, slower renewal of the fleet, and lack of
investment in renewable energy sources and in certain types of infrastructure.
These inefficiencies translate then into lower resource efficiency, higher
transport externalities and higher overall transport costs to the society.

2.4.4.
Transport planning: lack of coordination and
insufficient awareness of interactions

Insufficient transport planning at local
level…

85.
When taking land-use planning or location
decisions, public authorities and companies often do not properly take into
account the consequences of their choices on the operation of the transport
system as a whole, which typically generates inefficiencies. The problem is
particularly acute in urban areas[59].
Urban transport systems are integral elements of the
European transport system and therefore are also of concern for the Common
Transport Policy. They have a large influence on the
achievement of European-wide goals such as those related to GHG emissions,
biodiversity, oil-dependency and resource efficiency.

86.
Significant changes in urban mobility require
comprehensive actions that bring together land-use planning, road use and
parking, transport pricing, infrastructure development, public transport policy
and much more. Achieving integrated and sustainable urban transport is an
increasingly complex task which touches many stakeholders and interests. A
greater coordination of all authorities having an influence on the transport
system is highly desirable, possibly bringing together the responsibilities for
land-use and transport planning, public transport, road use and transport
infrastructure. Equally desirable is an extension of the co-ordination of such
authorities beyond the strict city borders, so to cover entire metropolitan
areas or regional transport systems.

…and at continental scale

87.
Weaknesses in transport planning are also
present with respect to the Trans-European Transport Network. TEN-T planning
and implementation has so far not been driven sufficiently by a coherent
European design. National infrastructure planning remains to a large extent
disconnected from planning at EU level, and is mainly done at a modal level
rather than in an integrated way across countries and modes of transport. The
lack of international cooperation and coordination typically produced a number
of inefficiencies: lack of joint traffic forecasts leading to differing
investment plans; disconnected or even contradictory timelines; lack of joint
investment calculation and joint financial structures; incompatible technical
characteristics; inadequate joint management of cross-border infrastructure
projects.

88.
Moreover, national and European infrastructure
projects have largely focused on developing individual priority projects rather
than on creating a network. Infrastructure planning and assessment of
individual projects failed to give an accurate representation of wider effects
of infrastructure projects and of how these projects contribute to the overall
infrastructure network.

Conclusion

89.
The consideration of transport needs and of
shifting transport flows is currently not sufficiently integrated in land-use
planning decisions, resulting in excessive or sub-optimally distributed
transport demand. Consequently, the negative environmental and socio-economic
impacts of transport are aggravated.

2.5.
Does the Union have the right to act?

90.
The right for the EU to act in the field of
transport is set out in several articles of the TFEU, especially in Title VI,
which makes provisions for the Common Transport Policy and in Title XVI on the
trans-European networks. Article 192 TFEU also provides a legal basis for
addressing the environmental sustainability of the transport system.

91.
Pursuant to Articles 90 and 91 TFEU, the Common
Transport Policy should contribute to the broader objectives of the treaties.
The goal of the common transport policy is to remove obstacles at the borders
between Member States so as to facilitate the free movement of persons and
goods. To this end, its prime objectives are to complete the internal market
for transport, ensure sustainable development, promote a better territorial
cohesion and integrated spatial planning, improve safety and develop
international cooperation.

92.
All transport and environment policy proposals
are decided by qualified majority, except for taxation measures which are
decided by unanimity. As regards trans-European networks, the Commission’s
financing proposals have to be approved by the Member States, who are
responsible for the planning and construction of projects. The Union has shared
competence in the field of transport safety as set out in Article 4 of the TFEU
and only limited competence in the field of urban mobility.

93.
In areas which do not fall within EU exclusive
competence, EU action has to be justified. In the present case, it is therefore
necessary that the subsidiarity principle set out in Article 5 (3) of the
Treaty on the European Union is respected. This involves assessing two aspects.

94.
Firstly, it is important to be sure that the
objectives of the proposed action could not be achieved sufficiently by Member
States in the framework of their national constitutional system, the so-called necessity
test.

95.
Given the fact that the overall concept is to
create an EU-wide sustainable and integrated transport system, the Member
States per se are not able to meet these challenges individually for the
following reasons:

–
The issues being addressed by the Transport
White Paper, namely CO2 emissions, oil dependency and overall
efficiency of the transport system, have transnational aspects which cannot be
dealt with satisfactorily by Member States. These aspects, which concern for
instance the cross-border connections between national infrastructure networks,
need to be coordinated at EU level. International transport represents a
significant and growing share of transport and can not be properly regulated at
Member State level[60].

–
The lack of EU action or the individual actions
by Member States alone may hinder the development of the single market; give a
competitive advantage to some players against the others and therefore
negatively impact the free circulation of both goods and people, especially for
transnational services. Coordinated action at EU level could overcome these
disadvantages.

–
The issues identified above have different
spatial effects and a strong variability, meaning that impacts across the EU
could vary considerably. There is a need to ensure that solidarity is enshrined
in the future transport policies. Similarly, it has to be ensured that the ones
who are hit hardest by the problems identified will be able to adapt. Cohesion
policy can further contribute to address the consequences of new disparities
between those regions which suffer most and those that can more easily cope
with their impacts.

–
Due to its scale, action at EU level can
leverage greater results and magnify the efforts in many domains such as
capacity building, research, information and data gathering, exchange of best
practice, development and cooperation. In particular, only EU action would ensure
that all EU citizens benefit from a resource efficient and competitive
transport system.

–
Because it will be more effective, EU action on
transport emissions and oil dependency will produce clear benefits compared
with actions at the level of Member States.

–
As regards external action, the increased
negotiating power of the EU, rather than individual Member States, may confer a
leading role to the EU in some sectors. Moreover, since the unsustainable
mobility has consequences for the EU economy and the EU supply of energy, there
is a need for oversight and responsibility at EU level to complement the
actions at national level and to avoid free riding.

–
In the field of urban mobility, there are
several examples confirming the necessity to take action at EU level. One of
the problems related to urban mobility and transport are emissions from road
traffic, including emissions that contribute to climate change. This is a
problem with a clear transnational dimension, where action by individual Member
States, for example to set new limit values, introduce financial incentives or
implement their own access restriction rules, could be in violation of EU
legislation. Urban congestion affects enterprises from other Member States. No
action by the EU in this field, or action by just a few individual Member
States, could lead to less informed decisions and damage the financial and
policy interests of Member States[61].

96.
Secondly, it has to be considered whether and
how the objectives could be better achieved by action on the part of the EU,
the so-called “test of European added value”. The rationale for a
European action in the field of transport stems from the trans-national nature
of the identified problem. However, it has to take into
account that a ‘one size fits all’ approach would not
be an adequate response. Therefore, an action at EU level coupled with actions
at all administrative levels would yield significant added value.

97.
As regards urban mobility, dissemination of
information and knowledge, expansion of the knowledge base and exchanges of
best practice in the area of urban mobility are best carried out at EU level.
This will avoid duplication of work and fragmentation of resources and allow
decision-makers to benefit from the broadest, most diverse experience possible.
In addition, emission and noise limits are best set at EU level in order to
avoid an adoption of different standards in different Member States, which
would add to the regulatory burden. Other examples include setting technical
standards, e.g. for intelligent travel information and payment systems,
including Galileo-based applications. There is also clear added value in action
at EU level on information and data collection and monitoring. Based on the
above observations, there is a basis to conclude that there is “added value” in
EU action in the field of urban mobility and transport[62].

98.
For these reasons, the policy objectives set out
in section 3 of the present Impact Assessment report cannot be sufficiently
achieved by actions of the Member States alone, but can rather, by reason or
scale of the proposed action, be better achieved with high involvement of the
EU. A thorough subsidiarity analysis will be performed for the specific policy
measures contained in the proposed initiative.

3.
Objectives

99.
Section 2 has shown that the EU transport system
is not sustainable to the extent of supporting smart, sustainable and inclusive
growth in the meaning of the EU 2020 Strategy. More specifically, it has been
explained that the efficiency of the EU transport system in the use of natural
resources and its ability to respond to the mobility needs and aspirations of
people and businesses are not satisfactory.

100.
This section defines the general and specific
policy objectives of the proposed initiative, discusses possible trade-offs and
synergies between sustainability goals and verifies their consistency with
other EU horizontal objectives.

3.1.
Policy objectives
3.1.1.
General policy objective

101.
A sustainable transport system is a crucial
element for achieving smart, inclusive and resource efficient growth in Europe
as defined in the EU 2020 strategy. To this end, as indicated under the
resource efficiency flagship, the scale of the change that a resource-efficient
agenda implies requires a massive technological improvement and a radical change
in the transport system.

102.
Based on the assessment of the problem and its
root causes, the general policy objective of this initiative is to define a
long-term strategy that would transform the EU transport system into a
sustainable system by 2050. The Renewed Sustainable Development Strategy of the
European Union (hereinafter SDS) of the European Union[63] defines a sustainable transport system as the one that “meets
society’s economic, social and environmental needs whilst minimising its
undesirable impacts on the economy, society and the environment”. More
specifically, the main “undesirable impacts on the economy, society and the
environment” caused by transport are: congestion, oil dependence,
accidents, emissions of GHG and of other pollutants, noise, and land
fragmentation caused by infrastructure. The following section formulates
specific policy objectives in relation to the main sustainability concerns.

3.1.2.
Specific policy objectives

103.
The general objective of achieving a sustainable
transport system by 2050 can be translated into more specific goals:

(1)
A reduction of GHG emissions that is
consistent with the long-term requirements for limiting climate change to 2 °C[64] and with the overall
target for the EU of reducing emissions by 80% by 2050 compared to 1990.
Transport-related emissions of CO2[65]
should be reduced by around 60% by 2050 compared to 1990[66]. This target has been
derived from the results of the “Effective and widely accepted technology”
scenario from the Impact Assessment on a “Low-carbon economy 2050 roadmap”[67]. It includes aviation,
but excludes international maritime[68].

(2)
A drastic decrease in the oil dependency
ratio of transport-related activities by 2050 as requested by the EU 2020
Strategy for transport calling for “decarbonised transport”.

(3)
Limit the growth of congestion.

104.
The three specific policy objectives could be
broadly summarised as the prescription to ‘use less energy, use cleaner energy
and better exploit infrastructure’. The first two objectives overlap to a large
extent, and should be considered the absolute priority in line with the
Resource Efficiency Flagship of the EU 2020 Strategy. There are, however, also
significant synergies with the third objective that would typically call for a
more extensive use of non-motorised and of public transport, which reduces both
the use of space and the use of energy.

105.
At the same time, the achievement of the
specific policy objectives identified above should not prevent that “current
and future generations have access to safe, secure, reliable and affordable
mobility resources to meet their own needs and aspirations.”[69] More specifically,
this means, as suggested by the EU Transport Council[70], that the EU transport
system should:

–
in terms of accessibility: allow the basic access and the development of mobility needs of
individuals and companies;

–
in terms of equity: promote equity within and between successive generations;

–
in terms of quality of services: offer safe, secure and reliable transport services of high
quality;

–
in terms of provision of services: be affordable, operates fairly and efficiently, offers a choice of
transport mode, and supports a competitive economy, as well as balanced
regional development; it should promote high quality employment;

–
in terms of external costs to society: minimise the external costs of accidents, noise and air pollution,
biodiversity loss and increased land use.

3.2.
Trade-offs and synergies between sustainability
goals

106.
It is generally accepted that sustainable
transport implies finding a proper balance between (current and future)
environmental, social and economic sustainability goals[71]. Two main trade-offs between sustainability goals can be
highlighted.

–
First of all, there could be a conflict between
cheap transport and GHG abatement. Fossil fuels have the great advantage of
energy density. This is a valuable characteristic in mobile applications and
the reason why fossil fuels are currently the cheapest option for transport.
Clearly it will cost more to replace them. The trade-off is solved by setting a
goal for emissions (the priority objective) and by devising a cost minimising
strategy to achieve it.

–
Secondly, there could be a conflict between
improving accessibility and lowering congestion, which could imply additional
infrastructure, and land use. This trade-off is more severe in the EU-12, where
catching up with EU-15 makes certain infrastructure development a necessity.
This trade-off is solved by giving priority to the upgrade of infrastructure
over new construction and to ‘green infrastructure’[72], but each project would have to be assessed individually on its own
merits.

107.
This being said, there are also substantial
synergies between sustainability goals. Policies to reduce GHG emissions can
also be expected to reduce local pollutants, noise and energy consumption, thanks
to new vehicles and clean fuels. Lower utilisation of road transport would also
reduce the number of accidents.

3.3.
Consistency with horizontal objectives of the
European Union

108.
The EU 2020 strategy, the Single Market Act and
the Sustainable Development Strategy have set the scene for the transport
sector.

3.3.1.
EU 2020 Strategy and Single Market Act

109.
The objective of the White Paper on Transport
Policy clearly contributes to the objectives laid down in the EU 2020 Strategy.

110.
The EU 2020 Strategy, under the flagship
initiative “Resource efficient Europe”, aims at supporting the shift towards a
resource efficient and low carbon economy through the reduction of CO2
emissions as well as through increased competitiveness and energy security. The
specific objectives set out in section 3.1 above are clearly in line with the aim
of the above-mentioned flagship. The objectives of the White Paper on Transport
Policy are also consistent with other objective defined in priority areas of
the EU 2020 strategy such as innovation, high employment, social and
territorial cohesion.

111.
The objectives of the White Paper on Transport
Policy are also fully in line with the ambition to create a stronger, deeper
and extended Single Market as set out in the Single Market Act[73].

3.3.2.
Sustainable Development Strategy

112.
The overall objective of the SDS, regarding
sustainable transport is “to ensure that our transport systems meet society’s
economic, social and environmental needs whilst minimising their undesirable
impacts on the economy, society and the environment”. The related operational
objective is to achieve sustainable levels of transport energy use and reduce
transport’s GHG emissions.

113.
The policy objectives of the White Paper on
Transport Policy are in line with the renewed SDS by contributing to more
sustainable mobility. Making mobility more sustainable would facilitate
achieving other sustainable development goals.

4.
Policy options

114.
As described above, the current transport system
is fundamentally unsustainable and major, not just incremental, changes are
required to implement next generation transport solutions.

115.
In this context, this section will explore
alternative policy options aimed at transforming the EU transport into a
sustainable system by 2050.

4.1.
Preliminary note on methodology

116.
As described in the first section of this
report, the identification of these policy areas is the result of a long,
intense and interactive process of internal and external consultation. The
input of this consultation process, together with the findings of two external
studies undertaken by the Commission (one on the evaluation of the Common
Transport Policy, undertaken by DG Energy and Transport, the other on “EU
Transport GHG: Routes to 2050?”, undertaken by DG Environment), has allowed the
Commission to identify more precisely the problem to be solved, the four main
underlying drivers and the corresponding policy areas and instruments that
would be appropriate to address those issues.

117.
On that basis, the Commission has 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.
These policy areas are: pricing, taxation, research and innovation, efficiency
standards and flanking measures, internal market, infrastructure and transport
planning.

118.
The policy areas taken into consideration
incorporate a broad range of policy instruments that can be implemented at EU
level from softer instruments to more prescriptive ones including
communication/awareness raising, research and development (innovation),
guidelines, governance and co-ordination, market-based instruments, private and
EU financing schemes, new regulation and standards. As regards transport
planning in urban areas, EU action is limited to soft measures for subsidiarity
reasons. EU action on taxation is also limited by the requirement of unanimity
among Member States in the decision making process.

119.
These policy instruments are not mutually
exclusive. In transport, the existence of multiple market failures – as
indicated in the analysis of problem drivers – suggests the adoption of a
combination of individual instruments that complement each other and create a
comprehensive policy mix.

120.
The table below gives a mapping between the
drivers identified in section 2.4 above and the policy areas. It also
provides in the second column an indication of possible policy measures in each
of the specified policy areas that would be referred to in the White Paper on
Transport Policy as component of the overall strategy. The list of possible
policy measures presented below is not exhaustive and will be finalised by the
adoption of the White Paper by the Commission.

121.
Given the nature of the White Paper as a
strategic document, the individual initiatives are broadly defined. The precise
specification of the policy measures referred to in the White Paper will be
done at a later stage, following a more specific analysis and an individual
Impact Assessment[74].
Accordingly, it is outside the scope of the present Impact Assessment report to
evaluate each initiative in detail.

122.
In this context, the Commission has undertaken a
modelling exercise to provide a stylised quantitative assessment of the
effectiveness and efficiency of possible initiatives in each policy area,
giving illustrative evidence on their relative importance, on the way they
interact and on the required intensity of the intervention. The Commission has
modelled the impact of the possible policy measures assuming a specification –
indicated in the third column and in Table 4 – that does not necessarily
correspond to what would actually be proposed at a later stage.

Table 1: Mapping drivers, policy areas, possible
policy measures envisaged in the White Paper and modelling hypothesis

Policy Areas || Possible policy measures envisaged in the White Paper || Modelling hypothesis

Driver 1: Cheap for users, expensive to society: prices do not reflect true costs

Pricing || Strategy for the gradual phasing in of a coherent internalisation system for local externalities in all transport modes on the whole network || Internalisation of local externalities for all modes of transport according to the values specified in the handbook on internalisation[75]

Taxation || Establish a link between vehicle fuel taxation and the environmental performance and full internalisation of the cost of GHG emissions for all modes of transport in a co-ordinated and stepwise manner || Elimination of distortions in energy taxation by establishing an energy and CO2 component in excise duties and abolition of exemptions[76],[77]

|| Establish a link between vehicle taxation and the environmental performance || Introduce a CO2-related element in the registration and annual circulation taxes[78]

|| Assess the possibility of introducing VAT on all international passenger transport services inside the EU || Introduction of VAT on all international passenger transport services inside the EU[79]

|| Promote a revision of company car taxation to eliminate distortions or, as a second best, to provide incentives for clean vehicles. || Elimination of favourable taxation regime for company cars[80]

Driver 2: Innovation: transport technologies do not achieve low carbon mobility

Research and Innovation || Conduct a screening to identify key innovative technologies, with a view to better target existing resources, define a governance structure for organising their development and enhance coordination of European and national (private and public) efforts and funding Bring together all relevant actors within the transport system, to develop research and deployment agendas, to design standards and to build demonstration projects, including bilateral cooperation frameworks in research and innovation with the main transport partners || Improvement of the cost of batteries and of other critical technological components Deployment of supporting infrastructure (charging points, refuelling stations)

Efficiency standards and flanking measures || Use standards for controlling energy efficiency as well as air pollution for all vehicles which have proven to be an effective way of providing the industry with certainty concerning long-term objectives Encourage deployment of clean energy carriers by establishing the necessary supporting infrastructures Improve the effectiveness of fuel efficiency labelling, promote eco-driving and support eco-driving dissemination || Implementation of CO2 standards for all vehicles (cars, vans, trucks, locomotives, vessels, barges, aircrafts)

Driver 3: Supply of transport services: not sufficiently efficient

Internal market || Railways: develop corridors, strengthen the European Railway Agency and ensure convergence of technical standards, reinforce the network of rail regulators and further pursue the opening of markets (domestic passengers). Aviation: effective implementation of the Single European Sky project - from the designation of a network manager, via the integration of national air traffic control to the deployment of the next generation of air traffic management system (SESAR). Maritime transport: simplification of the formalities for ships travelling between EU ports; a single electronic environment for all port/maritime transport related information exchanges and management; and a review of restrictions on provision of port services. Road transport: phase out of restrictions in the internal market like cabotage and of non-harmonised enforcement of social legislation. Promote quality jobs and uniform working conditions || Increase in the efficiency of all transport modes as a result of the removal of regulatory, administrative and technical barriers Wide deployment of Intelligent Transport Systems

Infrastructure || Propose a core network consisting of nodes and links relying primarily on the efficient use of existing infrastructure via ITS/smart mobility solutions and aiming at bridging missing links, facilitating multimodality and creating links to third countries. Establish a firm long-term infrastructure plan for the completion of the core network together with EU Member States detailing the projects to be completed as well as the modalities. || Increase in the capacity and performance of the network resulting from the elimination of bottlenecks and addition of missing links

Driver 4: Transport planning: not sufficiently integrated from the first to the last mile

Transport planning || Encourage the establishment of urban mobility plans and implementation of related measures to manage demand in non-collective motorised transport modes || Shadow carbon pricing[81] as a proxy for locally determined policies (pricing, support to public transport and non-motorised modes, integrated land planning)

4.2.
Rationale behind a comprehensive and
strategically coordinated EU action

123.
Given the high level of complexity of transport
system, the interaction between multiple actors, also at international level,
and the global relevance of transport and of its effect on the economy, society
and the environment, the Commission considers that – besides the reasons
explained in section 2.5 above – EU intervention is fully
justified to reach the objectives and complement the action of stakeholders and
Member States.

124.
To determine appropriate EU policy action, in a
first step, the Commission has considered the possible application of an
isolated intervention in each of the seven policy areas identified in section 4.1 above. Each of the instruments seems particularly suited for addressing some
of the raised issues:

–
market-based instruments such as charging and
taxation can ensure efficient allocation of resources and efficient modal
choices;

–
efficiency standards have produced a significant
acceleration in the introduction of more efficient vehicles, by providing clear
targets for the industry and avoiding ‘wait and see’ strategies of
manufacturers;

–
research and development programs appear
necessary to solve other types of market failures in innovation, as for
example, the coexistence of multiple technical standards;

–
internal market measures and an effective
enforcement of EU competition rules are needed to solve instances of regulatory
failure and insufficient competition and to derive benefit from scale
economies;

–
infrastructure policy is required to address
coordination failures and the existence of network and cross-border
externalities;

–
planning policies can take into account the
interaction of transport with other policy areas, such as housing.

125.
It appears though that
none of the categories of instruments alone would 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. A mix of actions would be needed.

126.
For example, while pricing and taxation can
bring economic efficiency, on their own they are not suited to bring more
competition into a market characterised by regulatory failures, or to assist in
the definition of technical standards. Market-based instruments are also relatively
ineffective in the presence of ‘split incentives’[82], where the party paying for the production of externalities does
not have control over the investments needed to abate those externalities[83].

127.
This is particularly the case for many transport
modes, as indicated by McKinsey &Company (2009), where it is suggested that
transport has negative costs for GHG abatement, but can require relatively high
investments. In other words, the graph below shows that implementing GHG
abatement measures in the transport sector would demand greater capital
intensity than would abatement in any other sector. This may be an indicator
that the transport sector requires significant upfront capital investment, and
in case of market failures there is a need for complementary public action in
addition to the economic instruments.

Source: McKinsey
& Company (2009)

Figure 2: Capital intensity and abatement cost[84]

128.
A balanced use of several policy instruments can
also mitigate the trade-offs and exploit the synergies between sustainability
goals. For example, technologies that improve the fuel efficiency of vehicles
can lower the cost of transport and generate more travel – inducing thereby a
so-called rebound effect[85] – and more congestion. As shown in the table below, the rebound effect can partially offset the effect of a policy
measure aimed at improved fuel efficiency. Similar effects exist for improved
utilisation of infrastructure capacity. While new technologies or innovation
will nevertheless provide higher utility for fewer resources, the absolute
improvement in resource efficiency can be lower unless appropriate measures are
applied to manage demand. Therefore
combining action in several policy areas is all the more important.

Table 2: Estimates of the long-run direct rebound
effect for consumer energy services in the OECD[86]

End-Use || Range of values in evidence Base || ‘Best Guess’ || No. of studies || Degree of confidence

Personal automotive transport || 5-87% || 10-30% || 17 || High

Space heating || 1.4-60% || 10-30% || 9 || Medium

Space cooling || 1-26% || 1-26% || 2 || Low

Other consumer energy services || 0-49% || <20% || 3 || Low

129.
As regards GHG emissions, individual measures or
policies that focus exclusively on either the technological or the
organisational and regulatory aspects would come short of the target of setting
the EU transport sector on a sustainable path and of reducing GHG emissions by
close to 60% below 1990 levels by 2050. This conclusion is confirmed by other
research work: a recent project funded by the European Commission showed that
for the EU, on tank-to-wheel basis, technical options can deliver a 42%
reduction in GHG emissions by 2050, compared to 1990. For OECD Europe, IEA
(2010) estimates that technical options can deliver about 50% over the same time
horizon[87].
The same sources show that the potential of organisational and regulatory
measures taken in isolation would be lower than that of technical options.

130.
In light of the above, the Commission concludes
that a holistic approach that comprises all elements considered so far is
therefore needed.

Conclusion

Only a long-term and overarching strategy established for all identified
policy areas has a reasonable chance of achieving the EU objectives. It should combine policy initiatives
targeted at enhancing the efficiency of the system through better organisation,
infrastructure and pricing with those that are more focused on technology
development and deployment. It should also provide a framework for action at
all levels of government. This conclusion is in line with the Europe 2020
Strategy which highlights that a resource-efficient agenda implies a massive
technological improvement and a radical change in the transport system.

Therefore, taking also into account the fact that
the Commission has adopted in June 2009 a Communication on “A sustainable
future for transport: Towards an integrated, technology-led and user friendly
system”, the Commission is of the opinion that a White Paper is the most
appropriate sui generis document, in terms of simplicity and coherence
with the objectives set out in section 3.1 above, to lay down a comprehensive and
strategically coordinated EU action.

4.3.
Description of policy options

131.
In light of the above, the Commission has
identified three policy options – besides the baseline
scenario – that combine specific EU actions across the seven policy areas described above. The design of
policy options build on the achievements and deficiencies of current policies
outlined in section 2 and in Appendix 2. All three policy options have been designed
to reach the same CO2 emission reduction target, i.e. 60%[88] over 1990 levels.

132.
All three options envisage action in all seven
policy areas and have in common a certain number of initiatives. What distinguishes
them is the intensity of intervention that, depending on the option, is higher
in some specific field and lower in others.

133.
Policy Option 3 is 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. It is assumed that this approach would be the most
effective in reducing the costs and the time of introduction of new
technologies.

134.
Policy Option 2 is 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. It is assumed
that the industry will not outperform the less stringent CO2
standards for road and rail vehicles and that 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 a very high carbon price, the effect would be equivalent to restrictions
in “fossil fuel” mobility and forced modal shift to clean modes.

135.
Policy Option 4 represents an intermediate
approach. It has values for CO2 standards and technology deployment
in between those of Option 2 and 3. It has full pricing of externalities and
elimination of tax distortions as in Option 2, 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.

136.
A detailed description of the content of each
policy option is presented in Table 4 below. The
policy areas where assumptions are the same are shown in italics. For each
policy option, an endogenous variable was identified and derived by the model
to ensure that the reduction target of 60% is achieved. These variables are
displayed with bold underlined font in Table 4: for Policy Option 2 – the CO2
tax component of motor fuel excise duties[89]; for Option 3 – the stringency of CO2 standards for road
passenger transport[90]; and for Option 4 – the CO2 shadow price on urban
transport.

Policy Option 1: No
additional EU action

137.
Policy Option 1, which is presented in detail in
Appendix 3 of this Impact
Assessment report, represents the future without any additional policy
intervention to change current trends.

Policy Option 2

138.
Policy Option 2 includes policies with a strong focus on the completion of the internal market,
infrastructure development, pricing and taxation. The 60% CO2 emission reduction target is achieved largely through
improved efficiency within each mode, better logistics, modal shift and reduced
mobility.

139.
With respect to other options, support for R&D
and deployment of technologies is more limited. This has been translated into
higher cost of batteries and more limited range[91] for passenger cars and trucks. The range
limitations act as a barrier to the diffusion of technology. This results in a
more modest uptake of new powertrains, despite high price signals. Progress in
efficiency is realised with conventional technologies, but up to a limit:
although CO2 standards are put in place for road and rail vehicles
with targets in place for 2020, they do not become stricter after 2020. Only
autonomous, pricing-driven efficiency improvement follows in the period of
2020-2050. In this scenario, as slower developments in clean transport
technologies is assumed, strong pricing signals are required to alter the mobility
patterns to an extent sufficient for achieving the required abatement in
greenhouse gas emissions.

140.
These strong price signals go beyond the full
internalisation of externalities and the elimination of existing distortions in
taxation, which are assumed to be an integral part of Policy Option 2 and would
be justified by economic theory to improve the economic efficiency in the
overall economy. In effect, as technology development is assumed to be limited
due to inadequate policies to address the failures identified in Section 2 for
research and innovation, the achievement of the 60% CO2 emission
reduction target requires that the CO2 externality is internalised
at a much higher rate than in any other sectors of the economy. This will
necessarily affect the cost and transfer payments resulting from this option
set-up.

141.
The system improvement measures are front loaded
in this policy option to allow gradual changes in the transport system.

Policy Option 3

142.
Policy Option 3 relies heavily on developing and
deploying technologies in particular in the long-term (2030-2040) through the
universal introduction of rigorous standards for all vehicles[92]. The crucial element of fuel shift is addressed through the
promotion of R&D policies into the development and subsequent deployment of
alternative fuel use. This is reflected in the assumption of the lowest battery
costs for electric vehicles among all policy options.

143.
While transport activities are optimised in the
period 2010-2020 to eliminate crucial regulatory and market failures, transport
demand in the long-term is satisfied through technological solutions.
Internalisation of externalities is not complete over the EU and some
distortions in taxation, in particular concerning VAT on international
passenger transport and company car taxation, remain beyond 2020. In such an
economy where market and regulatory failures are not fully addressed, the
achievement of the 60% CO2 emission reduction target is made
possible by very ambitious technological developments triggered by technology
improvement measures.

Policy Option 4

144.
Policy Option 4 also covers all policy areas
identified above (see section 4.1 above), but the intensity of the
measures is intermediate with respect to Policy Options 2 and 3, thus envisaging a balanced contribution of system improvement and
technology measures to achieve the objectives set out
in Section 3. Measures influencing transport activity and modal choice, as well
as those improving energy efficiency in a given mode and the carbon intensity
of transport fuels are applied throughout the period gradually, reflecting the
tightening constraint on CO2 emissions.

145.
Policy Option 4 assumes full internalisation of
externalities and elimination of distortions in taxation, in particular
concerning VAT on international passenger transport, vehicle taxation and
company car taxation. Similarly to Policy Option 2, it also includes policies
with a strong focus on the completion of the internal market, infrastructure development.
Like Policy Options 2 and 3, this policy option also relies on locally
determined policies (pricing, support to public transport and non-motorised
modes, integrated land planning) in urban areas. The intensity of the policy
measures in urban transport is derived residually to achieve the 60% reduction
target.

146.
The main difference in the design of this policy
option comes from the assumption that vehicles in all modes will be subject to
CO2 standards up until 2050. Battery costs for electric vehicles are
assumed to be half way between Policy Options 2 and 4, to reflect an
intermediate level of intensity of R&D policies.

147.
Policy Option 4 can be described as eliminating
distortions through pricing, CO2 taxation and internalisation
measures, but can also be characterised by investment in non-road
infrastructure, relatively stringent CO2 standards for all vehicles
and relatively high investment in R&D.

148.
As said above, the Commission has undertaken a
modelling exercise to provide a stylised quantitative assessment of the
effectiveness and efficiency of the identified Policy Options. To this end, the Commission has modelled the impact of the possible
policy measures assuming a specification that does not necessarily correspond
to what would actually be proposed at a later stage. Indeed, the precise specification of the policy measures referred to in the
White Paper will be done at a later stage, following a more specific analysis
and an individual Impact Assessment[93]. Accordingly, it is outside the scope of the present Impact
Assessment report to evaluate each initiative in detail. The table 3 displayed below presents an overview of the modelling
assumptions whereas table 4 provides a detailed description of the modelling
specifications used for each Policy Option.

Table 3: Overview of the modelling assumptions in
Policy Options 2, 3 and 4

Policy measures || Policy Option 2 || Policy Option 3 || Policy Option 4

System improvement policy measures

Pricing

|| High (full internalisation of external costs) || Low (partial internalisation of external costs) || High (same as in Policy Option 2)

Taxation

Taxation of fuels || High Endogenous variable: CO2 tax component of motor fuel excise duties || Low || Medium

VAT on international passenger transport services || High || Same as in Policy Option 1 || High (same as in Policy Option 2)

Vehicle taxation || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Company car taxation || High || Same as in Policy Option 1 || High (same as in Policy Option 2)

Internal Market

Opening transport markets and removing regulatory, administrative and technical barriers || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Wide deployment of intelligent transport systems || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Infrastructure || || ||

Create a core backbone of high performing infrastructure in terms of environmental impact || High || Same as in Policy Option 1 || High (same as in Policy Option 2)

Transport Planning

Better integrate urban mobility in the EU transport policy || Medium (same as in Policy Option 4) || Medium (same as in Policy Option 4) || Medium Endogenous variable: Shadow price on urban transport acting as a proxy for a wide-range of possible demand management measures in urban areas

Technology improvement policy measures

Research and Innovation

Battery costs, power density and speed of charge for electric vehicles || Low || High || Medium

Efficiency standards and flanking measures

CO2 standards || Low || High Endogenous variable: Level of CO2 standards for road passenger vehicles || Medium

Standards for controlling air pollution || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Deployment of less GHG intense energy carriers || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Eco-driving || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Fuel efficiency labelling || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Internalisation of NOx emissions in aviation || High || High (same as in Policy Option 2) || High (same as in Policy Option 2)

Table 4: Detailed content
of Policy Options 2, 3 and 4

The common
features between Policy Options are displayed in italic.

Policy measures || Policy Option 2 || Policy Option 3 || Policy Option 4

System improvement policy measures

Pricing

Internalise local externalities for all modes of transport || 100% internalisation of all external costs for heavy duty vehicles (HDV), passenger cars, motorcycles, passenger and freight rail, inland navigation and aviation for all Member States by 2050, according to the central value from the Handbook on estimation of external costs in the transport sector[94],[95]. || 100% internalisation of external costs for heavy duty vehicles (congestion, air pollution, noise, infrastructure wear and tear), passenger and freight rail (air pollution and noise) by 2020, for Member States that currently have in place a distance related infrastructure charging system or have officially announced their intention to introduce such a system in the near future, according to the central value from the Handbook on estimation of external costs in the transport sector. After 2020, the coverage of charges remains unchanged. || Same as in Policy Option 2

Taxation

Taxation of fuels || Phase I (2013-2019)[96]: · revised structure of the Energy Taxation Directive and of national taxes and introduction of a CO2 tax component; · diesel rates based on the 2007 commercial diesel proposal[97], but CO2 component included; · current exemptions left unchanged; · exemption of compressed natural gas (CNG), liquefied petroleum gas (LPG) and biofuels from the energy component. Taxation of biodiesel increased gradually; · CO2 tax component: 10 € per tonne of CO2. Phase II (from 2020 onwards): · elimination of exemption for diesel use in rail, local public passenger transport; · commercial and non-commercial diesel use is taxed at the same rate; · abolition of exemption of kerosene for aviation and diesel for navigation. For aviation, given that it would be covered by the Emission Trading Scheme starting with 2012, the energy taxation would only consist of the energy component, but not the CO2 component. The taxation of kerosene for aviation only applies to intra-EU flights, in line the provisions of the Chicago Convention. · energy component for CNG, LPG and biofuels aligned with other fuels. The CO2 tax component is derived endogenously to achieve the 60% CO2 emissions reduction by 2050 compared to 1990. || Phase I (2013-2019) as in Policy Option 2. After 2020 the taxation level is kept unchanged. || Phase I (2013-2019) same as in Policy Option 2. Phase II (from 2020 onwards): same as in Policy Option 2 but the CO2 tax component is equal to 20 € per tonne of CO2 from 2020 onwards, instead of being endogenously derived as in Policy Option 2.

VAT on international passenger transport services || Introduction of a minimum VAT rate of 19% on all intra-EU international passenger transport services[98] || Same as in Policy Option 1 (No additional EU action) || Same as in Policy Option 2

Vehicle taxation || Establish a link in vehicle taxation with the environmental performance by introducing a CO2-related element in the annual circulation tax and the registration tax[99],[100]. In Member States that did not introduce a CO2-related element, we assume that at least 25% of the total tax revenue from registration and annual circulation taxes should originate in the CO2-based element of each of these taxes starting with 2015. From 2017 at least 50% of the total tax revenue from both the annual circulation tax and the registration tax would originate in the CO2 based element[101]. || Same as in Policy Option 2 || Same as in Policy Option 2

Company car taxation || Elimination of favourable taxation regime for company cars, reflected through changes in car ownership, vehicle size in the fleet and fuel consumption[102]. || Same as in Policy Option 1 (No additional EU action) || Same as in Policy Option 2

Internal Market

Opening transport markets and removing regulatory, administrative and technical barriers || Increase in the efficiency of all transport modes as a result of the removal of regulatory, administrative and technical barriers, reflected through decreases in the ticket price for passenger rail and operation costs and time costs for freight (10% to 25%, depending on mode) [103] and higher load factors for road freight. || Same as in Policy Option 2 || Same as in Policy Option 2

Wide deployment of intelligent transport systems || Deployment of Intelligent Transport Systems reflected through a reduction in congestion and improvements in energy efficiency, due to more efficient use of infrastructure, vehicle capacity and mode[104]. || Same as in Policy Option 2 || Same as in Policy Option 2

Infrastructure || || ||

Create a core backbone of high performing infrastructure in terms of environmental impact || Effects of the increase in the capacity and performance of the network resulting from the elimination of bottlenecks and addition of missing links, and increase in the train length (to 1.5 km) and maximum axle load (to 22.5 tonnes), reflected through decreases in operation costs and time costs (6% to 20%, depending on mode) and higher load factors for freight[105],[106],[107]. || Same as in Policy Option 1 (No additional EU action) || Same as in Policy Option 2

Transport Planning

Better integrate urban mobility in the EU transport policy || Same as in Policy Option 4[108] || Same as in Policy Option 4 || Effects of shadow carbon pricing as a proxy for locally determined policies (pricing, support to public transport and non-motorised modes, land planning) The value of the CO2 shadow price is derived endogenously to achieve the 60% CO2 emissions reduction by 2050 compared to 1990 in this Policy Option.

Technology improvement policy measures

Research and Innovation

Battery costs, power density and speed of charge for electric vehicles || Assumed specific battery costs per unit kWh[109] in the long run: 595-640 €/kWh for plug-in hybrids and 415-530 €/kWh for electric vehicles, depending on range and size[110], and range limitations for passenger cars and trucks. || Optimistic assumptions on specific battery costs per unit kWh in the long run: 240-260 €/kWh for plug-in hybrids and 160-210 €/kWh for electric vehicles, depending on range and size, and other critical technological components[111], [112]. || Assumed specific battery costs per unit kWh in the long run: 390-420 €/kWh for plug-in hybrids and 315-370 €/kWh for electric vehicles, depending on range and size, and other assumptions on critical technological components[113].

Efficiency standards and flanking measures

CO2 standards || Implementation of CO2 standards for passenger cars (95 g CO2/km), light commercial vehicles (135 g CO2/km), heavy duty vehicles (15% compared to 2005), powered two-wheelers (70 g CO2/km) and trains (20% compared to 2005) by 2020. Starting with 2020 assume autonomous efficiency improvements as in Policy Option 1 (No additional EU action). || Derived endogenously to achieve the 60% CO2 emissions reduction by 2050 compared to 1990, by triggering the large scale uptake of electric propulsion vehicles. || Implementation of CO2 standards for all vehicles (cars, vans, trucks, locomotives, vessels, barges, aircrafts). CO2 standards by 2020 are the same as in Policy Option 2. In addition, for cars they go down from 95g CO2/km in 2020 to 20 g CO2/km in 2050 [for light duty vehicles: 135g CO2/km in 2020 to 55 g CO2/km in 2050; for heavy duty vehicles, trains, ships and aircrafts 40% , 40%, 45% and 60% improvement in energy efficiency, respectively, by 2050].

Standards for controlling air pollution || Starting with 2030 implement standards for controlling air pollution. For passenger cars: 0.025 g/km for CO; 0.03 g/km for NOx and 0.0025 g/km for particulate matter[114]. For heavy duty vehicles: assumed halving of the EURO VI limit values. || Same as in Policy Option 2 || Same as in Policy Option 2

Deployment of less GHG intense energy carriers || Share of blending of biofuels and carbon intensity for electricity in line with the Effective and widely accepted technology scenario from the Impact Assessment on “Low-carbon economy 2050 roadmap”. || Same as in Policy Option 2 || Same as in Policy Option 2

Eco-driving || Assumptions on reduction in vehicle energy consumption (MJ/km) by 2050, relative to Policy Option 1: 1.6% for cars and motorcycles; 2.1% for buses; 3.2% for vans; 1.9% for medium and heavy trucks; 2.2% for passenger rail and 1.3% for freight rail[115]. For road and rail, virtually all drivers are assumed to be trained by 2050. || Same as in Policy Option 2 || Same as in Policy Option 2

Fuel efficiency labelling || Fuel efficiency labelling would have limited effect with mandatory CO2 standards enforced, but it would still play a role in raising awareness and ensuring independent and comparable information for consumers[116]. || Same as in Policy Option 2 || Same as in Policy Option 2

Internalisation of NOx emissions in aviation || Inclusion of NOx emissions from aviation in the EU Emissions Trading Scheme[117] starting with 2020 and apply a 2x emissions multiplier to account for the impact of NOx (1 tonne NOx= 2 tonne CO2). || Same as in Policy Option 2 || Same as in Policy Option 2

5.
Impact analysis of
policy options

149.
This section provides an assessment of the
economic, social and environmental impacts that is proportionate to the nature
of the document proposed. The assessment of those impacts is supported by
modelling results[118]
and/or by academic research where possible. Table 12 presented at the end of this
section summarises the results of the assessment of impacts[119].

150.
At this stage, it is important to underline that
modelling results are global and tentative, and present the impacts as
illustrations rather than as conclusive evidence to support the preferred
option.

151.
A 40-years outlook is surrounded by a
significant degree of uncertainty, especially for such a complex system as
transport. Whereas some parameters such as population growth can be projected
with a reasonable degree of confidence, the projection of other key factors
like economic growth, oil prices or technological developments over a long
period of time incorporates a higher amount of uncertainty. This needs to be
taken into account for the assessment of impacts presented below. In this
respect, in addition to undertaking individual Impact Assessments for each
single measure proposed in the future, regular reviews following the evaluation
of policies in place are essential to allow for the necessary adjustments and
to reduce policy failures.

152.
The nature of the present Impact Assessment
report, assessing broad policy measures without going into the precise
specifications on concrete proposals, the high uncertainty surrounding the long
time horizon and the inherent modelling limitations, requires treating the
modelling results with caution. For example, the magnitude of transport-related
problems differs across Member States and regions, and various income groups
will be affected to a differing degree. However, without further specifying the
details of policy measures, assessing the impacts is extremely difficult.

153.
Each policy option assessed below incorporates a
set of possible policy interventions at EU level, which will be the subject of
an individual Impact Assessment report when necessary[120].

154.
Policy Option 1, namely no additional EU action,
is analysed in-depth in Appendix 3 of the present Impact Assessment
report. The impacts of Policy Options 2, 3 and 4 are assessed compared to
Policy Option 1 as required by the 2009 Impact Assessment Guidelines.

5.1.
Main modelling results

155.
The tables presented below give an overview of
the main modelling results in terms of transport activity, CO2 emissions
and other external costs. More specific tables will be displayed along with the
assessment of impacts.

Transport activity

Table 5: Change in
passenger and freight transport activity of Policy Options 2, 3 and 4 relative
to Policy Option 1

Source: PRIMES-TREMOVE
transport model

Table 6: Change in
passenger and freight transport activity of Policy Options 2, 3 and 4 relative
to 2005

Source:
PRIMES-TREMOVE transport model

CO2 emissions

Table 7: Main projections regarding CO2 emissions[121]

Source:
PRIMES-TREMOVE transport model

External costs of transport

Table 8: Change in external costs of Policy Options 2, 3 and 4 relative to
Policy Option 1

Source:
PRIMES-TREMOVE transport model

5.2.
Economic impact

156.
This section analyses in a first step the
impact of the various policy options on the transport sector itself, in terms
of level of activity, modal shift and production costs. Given the central role
transport plays in the economy and in the everyday life of people, this section
also assesses in a second step the impact of the transport system’s
evolution under each Policy Option on a different aspect: economic growth,
efficiency of the transport system, congestion, households, transport-related
sectors, innovation and research, administrative burden, EU budget and
international relations.

5.2.1.
Impact on transport as a business

Transport activity

157.
Transport activity is expected to continue
increasing in all Policy Options, driven by growth in economic activity.
Modelling results show that between 2005 and 2050 passenger transport activity
would raise by 49% in Policy Option 3, followed by Policy Option 4 with 41% and
24% in Policy Option 2 (see Table 6: ).

158.
However, the active policies in place for
stimulating change in the transport system would put a brake on the expansion
of passenger transport activity in all Policy Options in comparison with Policy
Option 1 (see Table 5). Policy
Option 2 shows the highest effect on passenger transport activity by 2050
(about -18%) relative to Policy Option 1, due to its strong focus on taxation.
The large scale uptake of electric propulsion vehicles enables the
decarbonisation of passenger transport with only moderate impact on transport
activity in Policy Option 3 (-2%) and Policy Option 4 (-7%) by 2050.

159.
Freight transport activity is projected to grow
at a strong pace between 2005 and 2050 in Policy Options 3 and 4 (about 92%).
The high share of maritime in freight transport activity (around 80%) and its
similar evolution in Policy Options 3 and 4 is responsible for this outcome
(see Table 6). In Policy Option
2, strong price signals generate a fall in freight road transport demand by
2050 and, hence, a slower growth in freight transports activity (84%) relative
to Policy Options 3 and 4.

Modal shift

160.
As indicated in Table 10 below, the market share of
different modes of transport will remain relatively stable in Policy Option 3
compared to Policy Option 1.

161.
Under Policy Option 4, modal shift takes place
in a number of segments of the transport activity: high-speed rail gains
further shares (it is projected to undertake 72 billion more passenger
kilometres in 2050), and around 88% of freight is carried by rail, inland
navigation and maritime in 2050. Passenger rail transport activity is projected
to grow by 66% in Policy Option 1 and to more than double in Policy Option 4
between 2005 and 2050, while freight rail would increase by 58% in Policy
Option 1 and by 87% in Policy Option 4 over the same period (see Table 6).

162.
The greatest changes occur however in Policy
Option 2 due to very intensive policies with the objective of managing demand
and encouraging a shift in modal choices: demand for road passenger transport
and aviation drops by over 20% relative to Policy Option 1 by 2050, while
demand for rail passenger transport increases by 35%. For freight, rail
transport benefits most in terms of increased demand by 2050, followed by
inland navigation and maritime (see Table 5).

Unit costs per user

163.
The unit costs per passenger transported would
increase in all three Policy Options, despite the decline in the fuel costs per
km travelled[122], [123]. Policy Option 2 shows the highest increase, 23% compared to Policy
Option 1 by 2050, due to the capital costs related to public transport and
pricing. The cost increase in Policy Option 3 is driven to a large extent by
the capital costs for the electric propulsion vehicles, while in Policy Option
4 (13% increase relative to Policy Option 1 by 2050) both capital costs for
public transport means and those for electric propulsion vehicles play an
important role (see Table 9).

Table 9: Unit costs of
transport in Policy Options 2, 3 and 4 relative to Policy Option 1

Source: PRIMES-TREMOVE transport model

164.
The evolution of the unit cost for freight
transport shows similar patterns in Policy Option 2, increasing however by 43%
compared to Policy Option 1 by 2050[124]. Capital costs for rail play a more significant role for freight
transport in Policy Option 2. In Policy Options 3 the drop in the unit fuel
cost outweighs the increase in capital costs and the total unit cost for
freight transport slightly declines relative to Policy Option 1 by 2050. The
decrease in the unit fuel cost for freight is the effect of tighter efficiency
standards and of lower fuel prices in Policy Option 2, 3 and 4, relative to
Policy Option 1[125]. In addition, fuel costs play a more important role in total costs
for freight, relative to passenger transport. In Policy Option 4 unit cost for
freight transport is similar to that of Policy Option 1 by 2050 (see Table 9).

Table 10: Modal shares in Policy Options 1, 2, 3 and 4

Source:
PRIMES-TREMOVE transport model

5.2.2.
Impact of transport dynamics on:
5.2.2.1.
Economic growth

165.
The current report is part of a joint analysis
and projection exercise for the Commission’s initiatives related to the
transition to a low-carbon economy by 2050. The transport sector has to contribute
to the overall policy goal of designing a path towards a low-carbon,
competitive economy that meets the long-term requirements for limiting climate
change to 2°C.

166.
Previous assessment by the Commission shows that
the costs by 2020 of putting the EU economy on a path that meets the long-term
requirements for limiting climate change to 2°C would be limited compared to
Policy Option 1, at around 0.2%-0.5% of GDP[126], with access to the carbon market. Using the additional revenues
from auctioning the CO2 emissions allowances in all the EU Emissions
Trading Scheme (EU ETS) sectors and the tax revenues from the non-ETS sectors
to decrease the labour costs would improve overall macroeconomic results
leading to 0.4%-0.6% increase in GDP by 2020, relative to Policy Option 1.

167.
The Impact Assessment on a “Low-carbon economy
2050 roadmap” shows that a CO2 emission reduction target for
transport of around 60% is consistent with the aim of achieving emission
reductions for the whole economy in a way that minimises the impact on growth.
It corresponds to emission reductions in other sectors of around 80% for the
industry, 90% for the residential sector and services and over 90% for power
generation.

168.
As regards the differentiated impact of the four
policy options on economic growth, the long-term perspective implies that it is
very difficult to go beyond a qualitative assessment[127].

169.
Policy Option 1 would spare the economy the
costs of replacing fossil fuels in the transport sector with energy sources
that, currently, are less cheap and convenient. However, this initial advantage
would eventually be eroded by increasing fuel costs. Perhaps more importantly,
since the technological race for clean transport is a global one, remaining a
frontrunner is essential for the EU manufacturing industry: other regions of
the world will face similar constraints while global demand for mobility keeps
growing. On the other hand, delayed action and timid introduction of new
technologies as in Policy Option 1 can condemn the EU transport industry to
irreversible decline.

170.
Policy Options 2 and 4 contain a range of
measures aimed at further opening the transport markets and at removing
regulatory, administrative and physical barriers to the transport system. A
more integrated and efficient transport system enabling the free movement of
people and goods across the EU is expected to contribute to economic growth, as
it would allow a more efficient use of resources. In particular, measures aimed
at getting the transport prices right should be at the core of the transport
strategy, as they contribute to the efficiency and the sustainability of the
transport system. In addition, in Policy Option 2 and 4, the EU economy should
also benefit from the increase in the capacity and performance of the infrastructure
resulting from the elimination of bottlenecks and addition of missing links.
Policy Option 4 would have the additional advantage over Policy Option 2 of
providing a greater stimulus to technological development and of allowing
greater levels of mobility, to the benefit of trade and economic
specialisation.

171.
Policy Option 3 relies to a greater extent on
technological advance and innovation in the EU. It does, however, bring about
more limited improvements on the functioning of the markets and it might suffer
from higher overall costs of congestion.

5.2.2.2.
Efficiency of the transport system – transport
as a service

172.
In Policy Option 1, transport prices would
continue increasing in line with rising oil prices.

173.
In Policy Option 2, smart pricing for transport
services is expected to steer the customers towards more efficient and
sustainable modal choices. Besides, as highlighted above, the achievement of a
Single Transport Area supported by an efficient transport network will be a key
to increase the efficiency of the transportation system. While the
internalisation of external costs and the taxation is expected to increase
end-user prices, the greater efficiency of the transportation system will be
able to partly offset this increase.

174.
Under Policy Option 3, technology is only
capable of delivering limited improvements in the functioning of the transport
system compared to the Policy Option 1. The policy intervention that improves
the fuel efficiency of vehicles leads to less fuel being required to travel the
same distance. As the uptake of advanced powertrains is accelerated under this
policy option, economies of scale enable lower costs of production. However,
total vehicle purchase costs would still increase by about 20% relative to
Policy Option 1 by 2050[128].

175.
Under Policy Option 4, the overall efficiency of
EU transport system improves through a balanced combination of system
improvement and technology improvement measures.

5.2.2.3.
Congestion levels

176.
In Policy Option 1, congestion is projected to
pose a huge burden to the society: congestion costs would increase by about 50%
by 2050, to nearly € 200 billion annually.

177.
As highlighted in Table 8 above, in Policy Option 2, the modal
shift projected from road to rail for passenger transport and from road to rail
and inland navigation for freight would have a positive effect on congestion
levels and would reduce the bill to the society compared to Policy Option 1.
Modelling results indicate that congestion costs in Policy Option 2 would be 26%
below those in Policy Option 1 by 2050.

178.
In Policy Option 3, the pricing signals are not
sufficient to shift traffic away from road. Congestion continues therefore to
pose a large burden on the competitiveness of European businesses and on the
quality of life, congestion costs being only 3% lower than in Policy Option 1
by 2050.

179.
The modal shift in favour of rail induced by
Policy Option 4 will have a positive effect on congestion levels compared to
Policy Option 1 by 2050, although to a lesser extent. Modelling results
indicate that congestion costs would drop by about 11% in Policy Option 4.

Source: TRANSTOOLS

Figure 3: Congestion
levels in 2030 in Policy Option 4

5.2.2.4.
Household transport costs

180.
Prices for private passenger transport would
increase in all Policy Options, driven by capital costs increases in Policy
Options 3 and 4, and to a large extent by pricing in Policy Option 2. For road
freight transport, the decline in fuel costs per km travelled would outweigh
the rise in the capital and operation cost in Policy Options 3 and 4, while
user price would increase in Policy Option 2.

181.
With respect to transport costs per household, Table 11 shows that the share of passenger
transport costs in the income of an average EU household would increase in all
Policy Options relative to Policy Option 1. The costs included are the
annualised transport equipment costs (i.e. related to vehicle stock), the fuel
and electricity costs as well as other fixed and variable non-fuel costs,
including taxes and charges.

182.
In Policy Option 2, the increase in fixed and
variable non-fuel costs, among which mostly taxation and pricing, outweighs the
positive effects in terms of fuel costs but also the capital costs. As a
result, the share of the transport costs in households income increase by 0.3
percentage points in Policy Option 2 relative to Policy Option 1 by 2050. In
Policy Options 3 and 4, capital costs related to the large scale uptake of
advanced technologies play a more important role relative to Policy Option 2.

183.
The pattern of the additional transport costs as
a share of household income is also different between Policy Options 2, 3 and
4. This outcome is due to the different intensity of policy measure included in
each policy option and the time profile of the measures. For example, as
previously indicated, in Policy Option 2, system improvement measures are front
loaded to allow gradual changes in the transport system, which is reflected
through higher additional fixed and variable non-fuel costs by 2030. However,
all Policy Options show moderate increases in additional passenger transport
costs as share of household income by 2050 (see Table 11).

Table 11: Total passenger
transport costs in % of households’ income in Policy Options 2, 3 and 4
relative to Policy Option 1

Source:
PRIMES-TREMOVE transport model

5.2.2.5.
Transport-related sectors

184.
European manufacturers are currently amongst the
most technologically advanced in the world in all transport modes. Vehicles,
trains and aircrafts produced in Europe are highly valued on the non-EU
markets. As regards the automotive industry, the Commission’s Impact Assessment
on CO2 standards for passenger cars suggested that efficiency
standards would have positive impacts on the competitiveness of European
manufacturers[129]. First of all, vehicles that meet strict CO2 emissions
requirements in the EU will be globally competitive and compliant with the
climate change policies being implemented in third countries (especially where
fuel economy standards exist and are about to be tightened, notably Japan,
China, and USA, as well as India which is likely to follow). The reduction of
CO2 emissions is now a global phenomenon and involves all means of
transport.

185.
An ambitious EU policy in the environmental
field will help maintain the technology lead of the EU automotive industry and
thus support its competitiveness. While European automotive firms are market
leaders in some transitional drive-train and fuel technologies, they have also
been investing heavily in alternative powertrains such as hybrid vehicles,
electric vehicles and hydrogen. It is clear that in the medium and long-term
the global competition for market leadership in these technologies will
intensify. Given the strong position of European manufacturers in the market
segment of premium vehicles and its high-quality supplier base, the automotive
industry is well-equipped to take a leading role in this global race driven by
stricter regulatory standards for environment and safety[130]In the long term the main areas of growth will come from external
markets, as rising income levels improve access to individual mobility. In this
context, Policy Options 3 and 4 would allow maintaining to the greatest extent
the European manufacturers’ competitive position on the external markets. This
effect is much less pronounced in Policy Option 2 where policies enable slower
technological advance and innovation in the EU.

186.
In addition, the wide deployment of ITS
technologies foreseen in Policy Options 3 and 4 is likely to have a positive
effect on the developers of key enabling transport technologies. This impact is
much less prominent in Policy Option 2.

5.2.2.6.
Innovation and Research

187.
The European automotive industry is a world
leader in developing clean and energy efficient technologies based on
combustion engines, consequence of substantial investment in the last 15 years
in research and development[131].
About one third of the R&D investments are directed towards research
efforts that reduce the GHG emissions of vehicles, in particular towards the
improvement of conventional engine technologies and the development of electric
powertrains.

188.
In all Policy Options (except Policy Option 1),
the decarbonisation of transport relies on technology development towards clean
and energy efficient vehicles based on conventional ICE and the deployment of
breakthrough technologies in ultra-low-carbon vehicles. This will be achieved
mainly through setting long term efficiency targets for vehicles.

189.
As said above, past experience has shown that
setting long term efficiency targets via specific regulation can steer
environmental innovation within the automotive industry in the right direction.
Creating appropriate framework conditions for steering the automotive sector’s
research efforts is therefore of high relevance and impact.

190.
As a consequence, all Policy Options are
expected to have a favourable impact on research and innovation. However, the
magnitude of the effect of each Policy Option on research and innovation will
differ. High intensity of policies accelerating the deployment of advanced
technologies in Policy Option 3, namely efficiency standards, is expected to
bring about the largest investments in innovation, followed by Policy Option 4.
Policy Options 2 will also contribute, but to a lesser extent.

191.
Sending to the market the right signals can
contribute to the creation of a lead-market and bring long-term benefits to
EU-based industry. Companies in the lead-market, the so-called first-movers,
are better positioned than their competitors when demand for ‘their’ technology
increases and gains world market shares. They are indeed at the forefront of
the diffusion of the innovative technology and are the first to experience the
benefits of ‘technology learning’. As indicated in the Commission Communication
on Innovation Union[132],
supporting and facilitating environmental innovation is expected to boost the
competitiveness of the European industry, provide new jobs in the automotive
industry and in other sectors in the supply chain and support restructuring.

5.2.2.7.
Administrative burden

192.
Compared to the Policy Option 1, Policy Options
2 and 4 are expected to reduce administrative burden at EU and at national
levels given that they both incorporate policy measures that will remove
barriers, including administrative obstacles, to a Single Transport Area. A
more detailed assessment of the impact of specific proposals on administrative
burden will be performed in the context of individual Impact Assessments.

193.
Policy Option 3 is not expected to have a
significant impact on administrative burden compared to Policy Option 1.

5.2.2.8.
EU budget

194.
In principle, all Policy Options envisaged in
this Impact Assessment report have a direct impact on the EU budget. However,
the impact of individual measures on EU budget will be assessed in the context
of individual impact assessments.

5.2.2.9.
International relations

195.
Under Policy Options 2, 3 and 4, the EU is
foreseen to substantially reduce its GHG emissions. Given the importance of
international transport in overall emissions, the international aviation and
maritime sector will need to make substantial contributions to the overall
abatement effort. As a consequence, modelling analysis shows an 8% to 22% decrease
in the overall activity levels of aircrafts by 2050 compared to Policy Option
1, while maritime benefits the most in terms of improvements in energy
efficiency and CO2 intensity. Overall, both modes increase their
activity substantially over 2005 levels: 100% to 140% in aviation and about
100% in maritime. The share of biofuels is projected to reach about 40% in
energy consumption by aviation and maritime by 2050.

196.
Increases in traffic are made feasible in a
sustainable way by the technological and operational improvements foreseen to
be undertaken in both sectors as a result of additional policies. In
particular, achieving a Single European Aviation Area consisting of the
neighbouring countries and accommodating the increased trade flows carried on
maritime vessels, is accompanied by measures that improve the fuel efficiency
of both modes and enable better operations through ITS solutions (SESAR,
e-Maritime, speed optimization).

197.
All Policy Options demonstrate an increased need
for global action that ensures a level playing field internationally.
Therefore, depending on what emission reduction policies are adopted in IMO and
ICAO, a certain strain on international relations in particular with developing
countries can be expected at least in the near and medium-term. In addition,
the implementation of taxation policies going beyond the internalisation of
external costs for international transport under Policy Option 2 may require
substantial diplomatic efforts.

5.3.
Social impact

198.
As pointed out in the literature[133], defining social
impacts in transport is not an easy task. Defining social impacts as all
impacts on people is a too broad definition, but a limitation to “demographic
changes, job issues, financial security and impacts on family life”[134] would be too narrow. One
of the difficulties of assessing social impacts in transport policy is that,
often, no clear distinction can be made between social, economic and
environmental impacts. For instance, a policy that reduces air pollution
induced by transport activities affects primarily the natural environment, but
also human health thanks to improved air quality. It has therefore both social
and environmental impacts. In this context, the Commission will assess social
impacts of the various policy options in the fields which affect primarily
people, namely mobility, accessibility and cohesion, equity, employment level
and conditions and safety. The impacts of variation of air and noise pollution
on human health are assessed in the section analysing environmental factors.

5.3.1.
Impact on the degree of citizens’ mobility[135]

199.
In comparison with Policy Option 1, all Policy
Options will put a brake on the mobility for the EU citizens by 2050. However,
the degree of mobility reached in 2050 with respect to 1990 would still be
about 58% higher in Policy Option 2, 90% in Policy Option 3 and 80% in Policy
Options 4.

200.
The strong focus of Policy Option 2 on pricing
policies and taxation implies that mobility of citizens will be substantially
constrained relative to Policy Option 1 (-18% by 2050). On the contrary, the
large scale uptake of electric propulsion vehicles in Policy Option 3, would
enable the EU citizens keeping about the same degree of mobility as in Policy
Option 1 by 2050 (-2% by 2050), while also decarbonising the passenger transport.

201.
Under Policy Option 4, the combination of demand
management measures and technology improvement measures allows to limit the
reduction in citizens’ mobility to 7% by 2050 compared to Policy Option 1 (see Table 5 above).

202.
In terms of choice of transport means, Policy
Option 2 and 4 incorporate system improvement measures that render rail more
efficient and convenient for citizens. It can therefore be concluded that both
Policy Options offer more choice to citizens contrary to Policy Options 1 and
3.

5.3.2.
Impact on accessibility and cohesion

203.
Accessibility in this context is based on the
concept of “potential accessibility”, which assumes that the attraction of a
destination increases with size, and declines with distance, travel time or
cost[136].

204.
In Policy Option 1, the ownership and use of
cars would create more bottlenecks and congestion. High congestion levels are
expected to seriously affect road transport in several Member States by 2030 in
the absence of effective countervailing measures such as road pricing.

205.
The expected rise in fuel costs and congestion
levels by 2030 would lead to further divergence in accessibility at regional
level. Peripheral areas require longer average trips using, in most cases, more
expensive modes and networks than the central areas do. As a result, their
situation is expected to worsen, with higher average transport cost increases
than central areas. With economic activity continuing to demonstrate signs of
centralisation at EU level, transport may not support sufficiently economic
growth and job creation in the peripheral regions.

Source: TRANSTOOLS

Figure 4: Change in
accessibility between 2005 and 2030 in Policy Option 1

206.
Policy Options 2 and 4 will provide better
access for more people than is currently the case. Traffic congestion and time
wasted stuck in jams will decrease. Improvements in accessibility under Policy
Option 3 are more limited as transport demand remains close to levels under
Policy Option 1.

Source: TRANSTOOLS

Figure 5: Change in
accessibility in Policy Option 4 relative to Policy Option 1 in 2030

5.3.3.
Distributional impacts

207.
In Policy Option 1, the lack of improvement in
the field of quality of service combined with deteriorating accessibility is
likely to worsen social equity as the transport system do not adjust to
prioritise the needs of those who rely on alternatives to cars. The negative
impact of high levels of congestion is relevant in Policy Option 3 as well.

208.
In Policy Options 2 and 4, the improved quality
of service combined with enhanced accessibility is likely to promote social
equity. However the beneficial impact of increased transport efficiency and of
the wider availability of alternative, collective modes of transport is
partially offset by the higher private cost of transport. This effect is
particularly pronounced in Policy Option 2. Data on the share of household
expenditure on transport across income groups suggest that highest income group
spends around 5% more on transport than the lowest one[137]. However the
distributional impacts will primarily depend on the exact characteristics of
any given scheme of internalisation, and in particular the linked method of
government revenue recycling. As shown in Section 5.3.2 however, accessibility
will improve more in the peripheral regions of the EU-12 as the EU-15 already
has a well-developed multi-modal transport network. This will improve EU-wide
equity among regions.

5.3.4.
Impact on employment level and conditions (including
on gender balance)

Effect on green jobs

209.
The decarbonisation of transport can be expected
to have a favorable effect on ‘green jobs’. Numerous studies indeed quantify
and describe the trend in green job growth in Europe. A
study from Ecorys outlines the manner in which the combination of environmental
policy, regulation and public awareness has affected industries such as the
automotive and transport sectors[138].
The developments in these sectors have, in turn, been strong drivers for
employment in eco-industry sub-sectors, notably the environmental technology,
recycling and renewable energy subsectors. Another study pays particular
attention to the multiplier effects of environment related activities[139]. The employment
multiplier describes the jobs directly and indirectly linked to the
eco-industry as a ratio to those directly created in the eco-industry. The
study finds multipliers of between 1.3 and 1.9 across the 27 Member States.

Effect on total employment

210.
In Policy Option 1, total employment in
transport services[140]
is projected to roughly maintain its relative share by 2050[141], resulting in a lower
level of absolute employment by the sector. With growing transport activity
demand, the lower employment in transport may negatively affect the workload
and working conditions. A scarcity of labour and skills may arise due to
ageing, further aggravating the shortage of labour already experienced before
the crisis in many segments of the transport sector. In absence of innovative
alternatives, this may also result in higher transport costs for the society.

211.
In light of the conclusions of various economic
studies[142],
total employment in transport services is expected to grow under Policy Option
2. Employment effects from modal shift[143]
induced in Policy Option 2 on the various modes of transport depend on the
labour intensity of each mode: road transport, public transport and inland
waterways are more labour intensive than maritime transport, railways or
aviation. Amongst the labour-intensive modes, the largest employer is road
freight transport whose job losses due to modal shift may be compensated by new
jobs in multimodal transport services, collective modes and in logistics. The
use of public transport instead of the private car will moreover have immediate
effects on employment as the self-provision of car mobility is not accounted
for in statistics even if the negative impact on car servicing businesses may
be important. Improvements in transport services in Policy Option 2 will
require the creation of numerous jobs that will in particular enable catering
for the needs of various users in collective modes. As in the services sector
in general, such employment is expected to attract a larger female workforce.

212.
Labour shortages in most modes, and particularly
in maritime and inland navigation, are likely to be compensated by recourse to
extra-EU workers, with the risk of losing EU know-how.

213.
In Policy Option 3, it is expected that
employment in the transport equipment manufacturing sector will grow. In
economic theory, product innovations have a positive impact on employment,
since they open the way to the development of either entirely new goods or
radical differentiation of mature goods. A study conducted on behalf of the
Commission has shown that the large scale uptake of alternative energy carriers
should facilitate additional job creation in the renewables sector[144]. The reorientation of
activities towards new markets and products will generate demand for new
skills. The most prominent examples are in the automotive sector and in
shipbuilding, responding to low-carbon demands for hybrid vehicles and offshore
investment in wind and tidal energy respectively. Generally, skills needs are
reflected in demand for additional competences of existing workers. These new
environmentally-driven competences relate to new technologies as well as to new
management requirements because of the changes in production methods and the
adoption of new business models[145].

214.
This will happen against the background of an
already tight situation in the transport labour market due to the ageing of the
labour force and to the little attractiveness of mobile jobs. Hence, labour
shortages are likely to appear in the “low carbon marketplace” where existing
skills will have to be enhanced and new skills into the European workforce will
be needed[146].

215.
In Policy Option 4, the combination of system
improvement measures and technology improvement measures would benefit from the
positive impacts of Policy Option 2 on employment in transport services and of
Policy Option 3 in the sectors manufacturing equipment for the transport
sector. The latter are expected to demand workers with higher skills profile.

5.3.5.
Impact on safety

216.
The projected increase in traffic in Policy
Option 1 would induce an increase of accidents: the external cost of accidents
would be about 60 bn € higher by 2050 compared to 2010. The external cost of
accidents associated to urban transport would increase by some 40% over the
same period.

217.
In Policy Options 2 and 4, active modal shift
policies, which are projected to reduce road transport activity levels, would
contribute to improved road safety and to the reduction of death and injury. In
Policy Option 2, external cost of accidents would decline by 27% relative to
Policy Option 1 by 2050, while in Policy Option 4 by 9% (see Table 8). This improvement in road safety
will benefit directly low income groups and ethnic minorities who experience a
higher level of death and injury on roads than other groups. The large scale
deployment of Intelligent Transport System (ITS) is also expected to have
positive effects on safety.

218.
The beneficial effects in terms of safety would
be more limited in Policy Option 3 because traffic levels would be similar to
those in Policy Option 1.

5.4.
Environmental impact

219.
Transport related activities have many impacts
on the environment. The most important effects are contribution to climate
change, to local air pollution, to noise levels, to biodiversity loss and
natural resources depletion.

5.4.1.
Impact on climate change

220.
In 2050, CO2 emissions including
international aviation and maritime are projected to be 35% above 1990 levels
under Policy Option 1, owing to the fast rise in the transport emissions during
the 1990s[147]. As indicated in Table 7 above, excluding international
maritime this translates into a 24% increase above 1990 levels.

221.
As indicated in point 131 of the present Impact Assessment report,
the three other Policy Options will be capable of reducing CO2
emissions by 60% by 2050[148]. The approach followed in each of these policy options is however
different as shown in the following graph (see Figure 6). CO2 emissions from international
maritime transport would decrease by about 40% between 2005 and 2050 in Policy
Options 3 and 4 and by about 50% in Policy Option 2.

222.
As shown in Figure 6 below, the profile of the CO2 reduction
between 2020 and 2040 is projected to be different amongst the Policy Options.
Policy Option 2 is indeed projected to reap the benefits of EU action sooner
than Policy Options 3 and 4[149].

Source:
PRIMES-TREMOVE transport model

Figure 6: Approach followed to reduce transport CO2
emissions by 60% over 1990 levels[150] and evolution of well to wheel emissions

223.
On well-to-wheel basis, the Policy Options
deliver over 65% reduction in CO2 emissions by 2050 compared to the
Policy Option 1[151] assuming that power generation is decarbonised. Power generation
mix plays here an important role: the large scale electrification of transport,
not accompanied by the decarbonisation of power generation, would only shift CO2
emissions from transport to the energy sector[152].

5.4.2.
Impact on air and noise pollution

224.
As highlighted in Table 8, external costs of transport to the
society would continue to increase in Policy Option 1. The increase in traffic
would lead to roughly 20 bn € increase of noise related external costs by 2050.
NOx emissions and particulate matter would drop by about 40% and 50%,
respectively, by 2030 and roughly stabilise afterwards (see Figure 7 below). As a result, external costs
related to air pollutants would decrease by 60% by 2050.

225.
In Policy Option 2, the modal shift induced by a
more efficient pricing mechanism and the decline in the passenger transport
activity is expected to lead to significant reduction in air pollutants by
2050. Nitrogen oxides emissions would decline by about 50% relative to Policy
Option 1, while particulate matter emissions by about 55% (see Figure 7 below). Moreover, there will be a
reduction in vehicle related noise pollution due to a decrease in the number of
vehicles used and to a limited extent due to the gradual substitution of
internal combustion engines for electric vehicles. External costs related to
noise would decrease by as much as 46% relative to Policy Option 1 by 2050 (see
Table 8 above).

Source:
PRIMES-TREMOVE transport model

Figure 7: Evolution of NOx emissions and
particulate matter in Policy Options 1, 2, 3 and 4

226.
Under Policy Option 3 and 4, large scale
electrification in various modes carries significant abatement of pollution.
Compared to Policy Option 1, nitrogen oxides would drop by around 40% and
particulate matter emissions by about 50% by 2050 in both policy options (see Figure 7 above). Owing to the ‘displacement’
of air pollutants from vehicle tailpipes near streets in mostly urban and
densely populated areas to remote power plant sites considerable population
exposure benefits are generated[153]. The electric propulsion system is also characterised by
considerably lower noise emissions than the conventional ICE powertrain.
Therefore, the noise level would be particularly lowered in urban driving
situations, whereas interurban driving is mainly dominated by rolling noise and
noise from wind resistance. Overall, external costs related to noise would drop
by 39% in Policy Option 3 and 32% in Policy Option 4 by 2050, relative to
Policy Option 1 (see Table 8 above). The relatively higher
decrease in external costs for noise and air pollution in Policy Option 3
compared to Policy Option 4 is due to the larger share of electric propulsion
vehicles in the vehicle fleet in Policy Option 3.

227.
Studies have also shown that co-benefits of
policies aiming at mitigating climate change can reduce substantially the
number of premature deaths from air pollution, by lowering the chronic exposure
to ambient particulate matter, especially in urban areas[154]. This is especially true in urban areas.

228.
Thanks to the improved quality of air and to the
decreased level of noise nuisance under Policy Options 2, 3 and 4, the public
health and the quality of life in general will increase.

5.4.3.
Impact on efficient use of energy and renewable
energy sources

229.
Energy demand by transport would decline in
Policy Options 2, 3 and 4. Policy Option 2 delivers the highest energy savings,
in order of 180 Mtoe[155], followed by Policy Options 3 and 4 with about 160 Mtoe[156]. Over 60% of these energy savings originate from passengers
transport.

Source:
PRIMES-TREMOVE transport model

Figure 8: Final energy demand in Policy Options 1,
2, 3 and 4

230.
In terms of energy intensity, Policy Options 3
and 4 achieve the highest improvements for passenger transport due to the
enforcement of CO2 standards (almost 65% between 2005 and 2050)[157]. However, other measures like eco-driving and fuel efficiency
labelling also contribute to energy intensity improvements in Policy Options 2,
3 and 4, although to a more limited extent. For freight transport, very
intensive policies with the objective of managing demand and encouraging a
shift in modal choices deliver around 50% improvement in energy intensity in
Policy Option 2 between 2005 and 2050. Overall, Policy Options 2, 3 and 4
achieve an improvement in energy intensity of about 70% by 2050 relative to
2005. Policy Option 2 provides the highest decrease in energy intensity
followed by Policy Options 4 and 3[158], [159].

Source:
PRIMES-TREMOVE transport model

Figure 9: Evolution of energy intensity for
passenger and freight transport

231.
Transport activity will remain heavily dependent
upon oil in Policy Option 1: oil products would still represent 90% of the EU
transport sector needs in 2030 and 89% in 2050.

232.
Final consumption of oil by transport in Policy
Options 2, 3 and 4 is expected to decrease by about 70% by 2050, relative to
Policy Option 1. This decline is compensated to a 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[160] would represent around 40% of energy consumption in aviation and
inland navigation and between 37% and 41% in long distance road freight by
2050, depending on the Policy Option. The role of biofuels in energy demand by
passenger cars and light duty vehicles would be more limited, ranging between 15%
and 25%. The amount of biofuels remains closely in line with the Effective and
widely accepted technology scenario from the Impact Assessment on “Low-carbon
economy 2050 roadmap. Electricity would provide some 20% of energy demand by
passenger cars and light duty vehicles in Policy Option 2 and 60% in Policy
Option 3, while in Policy Option 4 would represent about 50%. Electro-mobility
would need to be supported by the upgrade of Europe’s networks towards a
European supergrid and decarbonisation of electricity sector.

233.
As a result of the increased demand for
electricity and sustainable biofuels, the share of renewables in transport
would increase by 2050, especially in Policy Options 3 and 4. This assumes the
decarbonisation of the power generation sector and an important share of
electricity based on renewable energy sources by 2050, in line with the
Effective and widely accepted technology scenario from the Impact Assessment on
“Low-carbon economy 2050 roadmap”[161] [162].

Source:
PRIMES-TREMOVE transport model

Figure 10: Final
demand of oil and electricity in Policy Options 1, 2, 3 and 4

5.4.4.
Impact on biodiversity and other environmental
resources

234.
The greatest impact on other environmental
resources would be caused by an increase in land use for infrastructure,
generating increased pressure on biodiversity and ecosystem services due to
direct damage linked to construction, habitat fragmentation and degradation and
disturbance. In all scenarios, constraints on the availability of public resources
will be a limiting factor for the expansion of infrastructure and new built
will probably be significant only in cohesion countries.

235.
In a no additional policy scenario, the
expansion of infrastructure would remain the standard response to increased congestion
levels, so, in principle, this would be the least favourable option in terms of
other environmental aspects. Policy Options 2, 3 and 4 tackle differently the
pressure on infrastructure. Policy Option 2 relies on better land planning, on
traffic reduction and on modal shift; the latter implying an expansion of rail
infrastructure. Policy Option 3, would essentially manage high traffic volumes
with advanced traffic management systems, but would need relatively more road
infrastructure. Policy Option 4 would have intermediate characteristics.

236.
It is difficult to rank the three options in
terms of fragmentation of the landscape and loss of biodiversity and
degradation of eco-system services. A tentative answer would be to consider
that the levels of congestion in the three scenarios are representative of the
pressure that transport is likely to put on the territory, which, in turn,
would suggest that the most favourable scenario is the one described in Policy
Option 2 followed by Policy Option 4.

5.5.
Conclusions

237.
The results of the previous sections give the
following picture of the impacts of the various policy options relative to
Policy Option 1 by 2050.

Table 12: Summary table of impacts

|| Policy Option 2 || Policy Option 3 || Policy Option 4

Economic impacts || || ||

Transport as a business Transport activity Modal shift Unit costs per user || -- ++ --- || = = = || - + --

Of transport dynamics on: Economic growth Efficiency of the transport system Congestion Household transport costs Transport-related sectors || ++ ++ ++ -- + || + + = - +++ || +++ +++ + -- +++

Innovation and Research || + || +++ || ++

Reduction of administrative burden || + || = || +

EU budget || = || = || =

International relations || -- || - || -

Social impacts || || ||

Mobility of citizens Degree of mobility Choice || --- ++ || = = || - ++

Accessibility || ++ || = || ++

Distributional impacts || = || - || +

Employment level and conditions || ++ || ++ || +++

Safety || ++ || = || +

Environmental impacts || || ||

Climate change || +++ || +++ || +++

Air pollution || +++ || ++ || ++

Noise pollution || +++ || ++ || +

Energy use/energy efficiency || +++ || ++ || +++

Renewable energy use || + || +++ || ++

Biodiversity || + || - || =

Legend:

=             baseline
or equivalent to Policy Option 1

+ to +++ low
to high improvement compared to Policy Option 1

- to - - -   low to high
worsening compared to Policy Option 1

5.6.
Sensitivity analysis of policy options

238.
It is clear that the robustness of modelling
results is affected by the assumptions underlying the modelling scenarios. As
outlined in section 2.3.3, sensitivity analysis has been carried out on these
assumptions concerning GDP growth and oil prices, which are used in all policy
options[163].

239.
Other assumptions are embedded in the design of
specific policy options. A critical hypothesis is that the performance
standards imposed on industry (as in Policy Option 3) are more effective than general
price instruments (as in Policy Option 2) in lowering the cost of new
technologies and in accelerating their deployment. This assumption is certainly
questionable, but is in line with the observed acceleration in the introduction
of cleaner vehicles following the adoption of CO2 standards in the
EU and with arguments pointing to the existence of market failures in systems’
innovation.

240.
In any event, the three policy options assume
different costs and timing of technology and can therefore be interpreted as
‘sensitivity analyses’ of the hypotheses on R&D. Whereas the assumptions in
one of the policy options would turn out to be unrealistic, the other policy
options would represent a more credible alternative. For example, Policy Option
2 highlights a path for decarbonisation where barriers to the electrification
of transport still persist (i.e. through range limitations for passenger cars
and trucks). On the contrary, Policy Option 3 illustrates achievements under a
more favourable technological development.

241.
Another important assumption is the neutrality
of the transfer of resources collected through pricing and taxes from the
transport sector to the public budget. In other words no effect is assumed for
the recycling of the revenues. The transfer is particularly high in Policy
Option 2 (2.3% of GDP as opposed to around 0.3% in Policy Options 4 and
negligible in Policy Option 3).

242.
Whereas the full pricing of externalities and
the elimination of tax distortion is very likely to improve the efficiency of the
entire economic system, it is far more difficult to be conclusive on the impact
of very large shifts in the burden of taxation across sectors, going beyond
that point. Much would also depend on the exact use of revenues[164]. The forthcoming Impact Assessment report on the restructuring of
the Community framework for the taxation of energy products and electricity
found that the additional revenue from energy taxation would have a positive
impact on GDP and employment when used to reduce the employers’ social security
contributions. This is due to lower labour costs which boost employment and
decrease domestic price levels thus increasing private consumption. However,
the favourable impacts on GDP and employment do not materialize when tax
revenues are recycled through lump-sum transfers to households or are used for
fiscal consolidation[165]. For this reason, together with modelling limitations[166], a neutrality assumption is used in the analysis.

6.
Comparison of the options

243.
The analysis above has shown that the different levels of ambition in system improvement and technology
improvement have clear implications in terms of the related socio-economic and
environmental impacts.

– From an economic point of view, Policy Option 4 seems to be overall
preferable. In fact, while achieving the CO2 target at higher costs
than Policy Option 3, it has lower congestion costs and the overall benefits of
a less distorted pricing system.

– Also from a social point of view, Policy Option 4 would be the most
desirable. Compared to Policy Option 2, it does not affect drastically the
present lifestyles and organisation of society and is therefore expected to
have lower social costs of adaptation to new circumstances. Compared to Option
3, it would have the benefits of better choice, higher safety and greater
accessibility.

– From an environmental point of view, Policy Option 2 is the most
ambitious option since it covers the broadest range of environmental impacts.

244.
This section provides for an assessment of how
the policy options will contribute to the realization of the policy objectives,
as set in Section 3, in light of the following evaluation criteria:

· effectiveness – the extent to which
options achieve the objectives of the proposal;

· efficiency – the extent to which
objectives can be achieved at least cost;

· coherence – the extent to which policy
options are likely to limit trade-offs across the economic, social, and
environmental domain.

Effectiveness

245.
The following table gives a synthetic overview
of the policy options’ effectiveness with regard to the specific policy
objectives defined in section 3. From this table, it appears that Policy Option
2 scores best on effectiveness. It offers indeed the most appropriate pallet of
actions to meet the defined objectives.

246.
As regards the resource efficiency objective (CO2
target and oil dependency), since all three Policy Options have been designed
to reach the 60% target, they are all effective. However, it must be noted at
this stage that Policy Option 3 is highly dependent on the successful uptake on
large scale of alternative fuels. Significant challenges remain in the area of
electrical energy storage (i.e. in terms of cost, weight, volume, etc.), while
alternative vehicles are likely to remain more expensive than the existing
conventional ones despite their potential lower operation costs[167]. In addition, the
potential GHG emissions reduction from the use of biofuels depends on the
feedstock and their production methods. The use of biofuels in transport may
also be constrained by total limits to land availability and by competing
demand for biomass or for land and water from other sectors. Finally, ensuring
that biofuels deliver GHG emissions reductions over the lifecycle of the fuel
(taking into account the effect of direct and indirect land use changes)
remains a challenge.[168]

247.
Therefore, in case the uptake of new technology
on a large scale does not occur as expected and ambitious policies favouring
modal shift are not in place, the only way to achieve the 60% target will be to
constrain mobility leading to disproportionately high negative social impacts.
Policy Option 2 is the option which is the least exposed to technology risk,
and hence can be considered more reliable in achieving the GHG emission target.

248.
As regards the objective linked to the limitation
of the growth of congestion, Policy Option 2 offers the best possibilities
thanks to its strong focus on policy measures covering demand management and
system improvement. In Policy Option 3, which has a strong technology focus,
congestion still represents a high cost to the society whereas Policy option 4
scores better than Policy Option 3.

Table 13:
Effectiveness of envisaged policy options in light of objectives

|| Policy option 1 || Policy option 2 || Policy option 3 || Policy option 4

GHG emissions and oil dependency reduction compared to 1990 levels || 0 || high || high || high

Limit the growth of congestion || 0 || high || low || medium

Associated technology risk || 0 || Low reliance on large scale deployment of electric propulsion in transport || Extensive reliance on large scale deployment of electric propulsion in transport || Moderate reliance on the deployment of electric propulsion in transport

Efficiency

249.
In terms of efficiency, the model provides an
indication of the total costs of transport of each Policy Option. These costs
include: capital costs related to transport equipment, infrastructure costs for
the charging and refuelling of electric propulsion vehicles[169], fixed operation costs, variable operation costs (including fuel
costs), users’ disutility[170], and external costs of congestion, air pollution, noise and
accidents[171]. So defined, the concept of total cost covers the costs for the
society of each Policy Option and, as such, measures the extent to which
objectives can be achieved at least cost for the society.

250.
The modelling results indicate that, compared to
Policy Option 1, the total costs of transport so defined would be the highest
in Policy Option 2, adding an additional 1,193 billion € by 2050. Policy Option
4 follows adding 1,012 billion € and Policy Option 3 about 640 billion €.

Table 14: Total cost of Policy Options 2, 3 and 4
relative to Policy Option 1

Source:
PRIMES-TREMOVE transport model

251.
An element which is common to all Policy Options
is the considerable amount of savings in fuel costs, which amounts between 300
and 330 bn € in 2050 relative to Policy Option 1.

252.
Another way of looking at the net additional
costs of Policy Options 2, 3 and 4 with respect to Policy Option 1 is by
singling out from the total cost the gains from the reduction in the external
costs and expressing the two elements thus obtained in terms of €/ton of CO2.
The two components would therefore represent the “mitigation costs”[172] of achieving the CO2 target (i.e. the cost of each
Policy Option per tonne of CO2 avoided) and the “co-benefits” (i.e.
the benefit of each Policy Option per tonne of CO2 avoided) [173]. They are summarised in Table 15[174], [175], [176].

Table 15:
Mitigation cost and co-benefit of envisaged Policy Options

Source: PRIMES-TREMOVE
transport model

253.
The calculation of net 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 network. 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 are additional costs for the
user, but a transfer from the point of view of society.

254.
The reasons for not taken into account R&D
costs and network costs in comparing options in terms of efficiency are the
following:

– 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 Policy Options. However this aspect
is addressed in discussing the risks associated with relying on more favourable
technological developments.

– The network infrastructure requirements – and thus the related costs
– are assumed to be the same in Policy Option 2 and 4 and geared toward a
greater use of multimodal solutions. Accordingly, they do not affect the choice
between these two options. Infrastructure costs would however be lower in
Policy Option 3 if, as assumed, road congestion is not accommodated by
significant additional investment in the road network.

255.
An estimation of network infrastructure costs
will be established by the Commission as part of the revision of the TEN-T
guidelines and therefore only a rough estimate can be offered at this stage.
Investment in the network designed to serve the transport system up to 2050
would need to be put in place much earlier. The cost of EU infrastructure
development to match the demand for transport has been estimated at over € 1.5
trillion for 2010-2030. The completion of the TEN-T network requires about €
550 billion until 2020 out of which some € 215 billion can be referred to the removal
of the main bottlenecks[177].

Coherence

256.
As highlighted in Table 12 above, Policy Option 4 ensures the
achievement of the objectives with lowest trade-offs across the economic,
social, and environmental domain.

Conclusion

257.
In general terms, the modelling exercise shows
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 shows that policy action has to be very ambitious to reach
the objective.

258.
The table below summarizes the results of the
comparison of policy options in terms of effectiveness, efficiency and
coherence.

Table 16: Comparison of Policy Options

|| Effectiveness || Efficiency || Coherence

Policy Option 1 || no || no || no

Policy Option 2 || high || low || medium

Policy Option3 || low || high || low

Policy Option 4 || medium || medium || high

259.
In light of the above, Policy Option 3 is
discarded, despite being the less expensive and most powerful 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 is not sufficiently effective in reducing the cost of congestion to
the society in comparison with Policy Options 2 and 4.

260.
Modelling results do not point to huge
differences between Policy Option 2 and Policy Option 4, and indeed the two
options have many elements in common, as the elimination of obstacles to the
internal market and the investment in a multimodal network. The preference is
given to Policy Option 4 since it offers the advantage of greater balance
between system improvement and technological development. Policy Option 4 would
avoid the creation of a specific carbon price for the transport sector or,
else, 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. Factoring in all these elements,
Policy Option 4 appears to offer the highest benefits at the lowest cost with
moderate technology risk, and more balanced solution to the trade-offs across
the economic, social, and environmental domains

261.
However, Policy Option 2 is not formally
discarded. Indeed, as said above, all Policy Options include a technology
component that is low in Policy Option 2, moderate in Policy Option 4 and high
in Policy Option 3 (see Table 3).
In this respect, if the technology does not deliver as it is projected in
Policy Option 4, an approach closer to that in Policy Option 2 will be
necessary in order to achieve the 60% target by 2050.

262.
In this context, a proper monitoring and
evaluation of the implementation of the White Paper is a key element.

7.
Monitoring and evaluation

263.
The Commission will properly evaluate and review
the White Paper on transport policy 5 years after its adoption by the
Commission. The policy design and its implementation will be in any case
continuously fine-tuned on the basis of individual impact assessments as
mentioned above.

264.
In addition, the Commission will constantly
monitor a set of core transport indicators which are already available. These
indicators will be used to measure to what extent Policy Option 4 under the
comprehensive and strategically coordinated EU action is properly implemented
and its objectives achieved. This set of core indicators will be updated to
trace the development and deployment of new transport technologies.

265.
These indicators are:

Table 17: Monitoring indicators

Key indicators || Definition || Relevance

Monitoring the environmental performance of transport

Share of renewable energy in transport || This indicator is the share of energy from renewable sources in gross final energy consumption for transport || This indicator monitors the progress achieved in reducing oil dependency of transport

GHG emissions from transport || Each greenhouse gas (CO2, methane, and nitrous oxide) is weighted by its global warming potential and aggregated to give total greenhouse gas emissions expressed in terms of CO2 equivalents. || This indicator shows trends in the greenhouse gas emissions from transport by mode of transport.

Emissions of particulate matter from transport || This indicator is defined as the aggregated particulate-forming potential of emissions of particulate matter (PM10), nitrogen oxides, sulphur dioxide and ammonia from transport. || This indicator shows trends in emissions of PM10 from transport.

Fragmentation due to transport infrastructure || This indicator is calculated on basis of the mesh size of unfragmented areas, related to the construction of new or improved transport infrastructure || Indicator shows the state of fragmentation of land and ecosystems due to transport infrastructure

Average CO2 emissions per km from new passenger cars || This indicator is defined as the average emissions of carbon dioxide per kilometre by new passenger cars sold in a given year. || This indicator measures the CO2 efficiency of new fleet

R&D intensity in transport || This indicator is defined as business expenditure in R&D in transport (manufacturing) as % of value added in the transport sector || This indicator measures R&D intensity in transport

Monitoring the overall efficiency of EU transport system

Modal split of passenger transport || This indicator is defined as the percentage share of each mode of transport in total inland transport, expressed in passenger-kilometres. It is based on transport by passenger cars, buses and coaches, and trains. || This indicator monitors the achievement of a balanced shift towards environmentally friendly transport modes for passengers

Modal split of freight transport || This indicator is defined as the percentage share of each mode of transport in total inland transport expressed in tonne-kilometres. It includes transport by road, rail and inland waterways. || This indicator monitors the achievement of a balanced shift towards environmentally friendly transport modes for freight

Investment in transport infrastructure to GDP || This indicator is the ratio between total gross investment expenditure and GDP. Infrastructure expenditures cover new construction, extension, reconstruction and major repairs of selected EU-27 Member States for transport infrastructure for road, rail, air transport, sea ports and inland waterways. || Investments are one way in which the objective creating a single transport area can be realised

Road safety || This indicator is defined as the fatalities caused by road accidents include drivers and passengers of motorised vehicles and pedal cycles as well as pedestrians, killed within 30 days from the day of the accident || This indicator monitors the trend in road safety

8.
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(6)
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(9)
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(11)
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(16)
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(17)
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(21)
Joined cases C 402/07 (Sturgeon vs. Condor
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(25)
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(26)
Rapid Press Release (2009): VP Verheugen and
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(28)
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(29)
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(30)
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(32)
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9.
Annexes

Appendix 1: Assessment of the application of the minimum consultation standards

–
Clear content of the consultation process

1.
The objectives of the White Paper and the
principles for its design were clearly described on the public consultation
websites. The public hearings and the public consultations have been publicised
to relevant stakeholders as well as widely through press releases[178]. The Commission
services have made clear how comments received would be dealt with and how the
process would proceed.

–
Consultation of target groups

2.
Given that the White Paper will affect a broad
range of stakeholders, namely EU Member States, citizens and companies, the
consultation has been open to the general public. Representatives of a wide
range of stakeholders were invited to both conferences[179].

–
Publication

3.
The preparation of the White Paper was announced
in an earlier Communication. Interested parties were aware that there was to be
consultation on the issues to be addressed in line with the better regulation
principles. Special websites were created for the public consultations and the
public hearings.

–
Time limits for participation

4.
The Commission provided stakeholders with a
month or more notice of the public hearings. It has given 8 and 15 full weeks
for the submissions of written comments to the public consultations.
Stakeholders have been given adequate time to provide written comments to the
public consultations, as well as to make a statement in the public hearings.
Overall, the Commission has been in an ongoing dialogue with stakeholders and
met with all interested stakeholders requesting to do so. All stakeholders
should therefore have been able to express their views on the main challenges
for the EU transport policy, the key objectives for the transport system and
how to meet them.

–
Acknowledgement and feedback

5.
Responses from stakeholders following the public
consultations and stakeholder meetings have been acknowledged and the
stakeholders’ responses are publicly available[180].

6.
According to the privacy statement, no
individual’s contribution can be posted therein without their consent. The
Commission has not responded to the points raised in individual responses given
the wide range of issues raised, it was however able to identify the main
issues.

–
Main results and how these have been taken into
account

7.
The Commission has analysed the comments made,
and the results of the consultation are available on the Commission website[181].

8.
Input from stakeholders has been taken into
account in assessing the different possible actions to improve the
sustainability of the EU transportation system. External expertise was used to
assess the various options available, including aspects raised during the
public consultation.

Appendix 2: Ex-Post Evaluation of Transport Policy 2001-2010[182]

1.
This appendix puts the White Paper into its
historical context and assesses to what extent previous political objectives –
in particular those of the 2001 White Paper[183]
and its mid-term review of 2006[184]
– have been achieved. The assessment looks at the state of the European transport
sector at the beginning of the 21st century and compares it with
today’s situation. It concentrates mainly on the measurable objectives and is
partly based on the findings of an external study of 2009 that evaluated the
Common Transport Policy between 2000 and 2008[185].

1.
Managing transport growth in a more sustainable
way

2.
Transport demand has shown strong growth rates
in the 1990s. Rapidly rising traffic volumes resulted in high levels of
congestion, noise and air pollution which were considered to be unsustainable.
One of the main objectives of the 2001 White Paper was therefore to decouple
transport growth from GDP growth and hence to limit the growth in transport
demand. As transport growth in the 1990s had been uneven – mainly benefiting
road and air, while largely neglecting cleaner and less congested modes of
transport such as rail and inland waterways, another main objective in 2001 was
rebalancing the modal distribution of transport, away from congested roads and
airports towards other, less congested and often also more environmentally
friendly modes.

1.1.
Decoupling transport growth from GDP growth

3.
Decoupling transport growth from growth in GDP,
hence reducing the transport intensity of the European economy, was one of the
core objectives of the 2001 White Paper. It was also an objective of the
Sustainable Development Strategy which the European Council had adopted in June
2001 in Gothenburg.

4.
This objective should be seen in the context[186] of the 2001 White Paper: Between 1970 and 1998, the European economy
was characterised by increasing transport intensity: both passenger and freight
transport had grown faster than GDP. Moreover, following the adoption of the
Lisbon Strategy in March 2000, an enhanced GDP growth rate of about 3% was
expected for the decade 2000-2010. Even higher GDP growth rates (4-5% per
annum) were predicted for the then candidate countries of Central and Eastern
Europe. An increase in transport demand that would outpace GDP growth was
thought not to be sustainable. Apart from the negative environmental impact, it
would have led to even more congestion which could have paralysed the transport
system, in particular on roads and in aviation which showed signs of capacity
shortages. The overall objective was to break the link between transport growth
and GDP growth, which was to be achieved through the implementation of the
measures announced in the White Paper, without the need to restrict the
mobility of people and goods.

5.
Essentially, this meant eliminating
‘unnecessary’ transport activities – activities that do not add any economic
value or which are the result of regulatory failures. One regulatory failure
was seen in the fact that transport users did not pay the full price of the
external costs which their activities produce. The full internalisation of the
external costs of transport was believed to be an effective instrument to
decouple transport growth and GDP growth. As long as external costs were not
fully borne by transport users, the demand for transport was bound to be artificially
high. Appropriate pricing and infrastructure policies that applied the “user
pays” principle and the “polluter pays” principle would largely remove these
inefficiencies over time.

6.
As part of the greening transport package of
2008, the Commission presented a strategy for the internalisation of external
costs[187] for all modes of transport. It proposed a revision of the
Eurovignette Directive[188] which was to allow the charging of heavy goods vehicles for
external costs of air pollution, noise and congestion, also beyond the amount
needed to recover infrastructure costs, which – as a rule – was the limit set
by the Directive at the time. The revision of the Directive is still being
debated in the Council and the European Parliament. In rail transport, infrastructure
charges may be modified to take environmental costs into account. As long as
there is no comparable level of charging of environmental costs in competing
modes, however, such charging shall be revenue-neutral for the rail
infrastructure manager[189]. The costs of climate change shall be internalised by identifying a
carbon component in fuel taxes and/or by direct or indirect participation in
the European emission trading scheme (ETS). Aviation will be included in the
ETS from 2012 onwards[190], electrified rail traffic is indirectly included in the ETS through
the power generating sector.

7.
The policy of internalising all external costs
is still far from being fully implemented. Consequently, it has so far not
contributed much to the decoupling of transport and GDP growth.

8.
Another example of regulatory failures that
produce more transport than necessary would be the different fuel taxation
levels in the Member States which give rise to the phenomenon of ‘tank
tourism’. Attempts to harmonise fuel taxes across the EU have so far failed,
however. Traffic generated by a lack of efficient intermodal connections or
state-of-the-art transport information and guidance systems (e.g. to help
drivers looking for a place to park their vehicles) may also be considered to
be ‘unnecessary’. If this kind of traffic could be eliminated, some congestion
could be eased.

9.
Even if all proposed measures had been fully
implemented, it is however questionable whether significant progress in
decoupling freight transport from economic growth could have been
achieved. Freight transport is largely a commercial business in which
‘unnecessary’ transport activities are already limited. Moreover, logistics
practices like ‘just-in-time’ delivery and growing specialisation patterns
dominate in modern industries. While improving the efficiency of European
industry, they tend to increase the transport intensity of the economy.

10.
External trade also has a direct impact on
freight transport volumes. While in years of economic growth trade usually
grows by more than GDP, it falls more steeply than GDP during recessions. As
trade and freight transport are two sides of the same coin, this rule also
applies to freight transport, which can be seen when looking at EU freight
transport activity over the last decade.

11.
Between 2000 and 2007, intra-EU freight
transport grew on average by 2.6% per year while GDP has gone up by 2.2%.
International transport has grown faster than domestic transport. In the boom
years, freight transport activity was boosted by deeper market integration
inside the EU (following the introduction of the single currency and EU
enlargement) and outside the EU (through the rise of emerging economies such as
China and the general globalisation of production patterns). It should not be
forgotten in this context that deeper market integration and the promotion of
international trade are crucial ingredients for balanced economic growth and
economic, social and territorial cohesion. These are key policy objectives of
the EU.[191]

12.
In 2008, when the recent economic crisis set in,
intra-EU freight transport demand fell by 2.1% while GDP was still growing by
0.7%. Preliminary figures for 2009 show an even greater gap between GDP growth
(which dropped by 4.2%) and the demand for intra-EU freight transport which in
terms of tonne-kilometres is estimated to have collapsed by around 11%, wiping
out almost all growth in freight transport since 2000. While intra-EU freight
transport activity is nearly back to 2000 levels, GDP in the EU27 is still 12%
higher than it was in 2000. Seen over the whole period 2000-2009, therefore,
freight transport appears at first sight to have decoupled from GDP growth.
This decoupling effect is however largely due to the economic crisis and likely
to be of a temporary nature.

13.
Intra-EU passenger transport has grown by less
than GDP each year since 2000 (apart from 2009 when it didn’t fall as
dramatically as GDP). It increased on average by 1.4% per year between 2000 and
2007. In 2008, there was a slight decline in intra-EU passenger transport
activity (-0.1%) followed by a somewhat stronger drop in 2009 (around -1%).
This reduces the average annual growth rate to merely 1% between 2000 and 2009.
It confirms the trend that motorised passenger transport activity in the EU has
decoupled from GDP growth, despite an increase in the average mobility per
person by more than 5% between 2000 and 2009[192]. The mobility of people was boosted by the liberalisation of air
traffic within the EU, by the construction of high-speed rail lines in a number
of countries and by the general increase in motorisation levels, above all in
the countries which joined the EU in 2004 and 2007. These developments allowed
EU citizens to travel faster and further afield in a given time. EU policies
have hence contributed to an increase in the mobility of its citizens, the
objective of decoupling transport and GDP growth notwithstanding. The link
between personal mobility and economic activity is not as strong as that
between freight transport and GDP.

Source: Eurostat,
DG MOVE

Figure 1:
Evolution of GDP, population, passenger and freight transport in the EU27
between 2000 and 2009 (2000=100)

14.
Over time, it had become clear that the
objective of decoupling, as it was, needed to be refined. While the renewed EU
Sustainable Development Strategy of 2006[193]
kept the operational objective of “decoupling economic growth and the demand
for transport with the aim of reducing environmental impacts”, the 2006
mid-term review of the White Paper modified the original target into one of
decoupling the growth of transport from its negative effects such as
congestion, accidents and the emission of pollutants, CO2 and noise.

15.
In view of this revised objective, the outcome
has so far been mixed – at least as far as gaseous emissions from transport are
concerned. CO2 emissions from transport have been steadily growing
over the last 20 years. Only in 2008 (and presumably 2009) was there a drop in
CO2 emissions from transport, but this was combined with a drop in
transport activity, so there was no decoupling. New vehicles have become more
fuel efficient and hence emit less CO2 per km than earlier models
did in the past, but these efficiency gains have been more than compensated for
by rising vehicle numbers and increasing traffic volumes. It remains to be seen
to what extent recently adopted measures to further improve the energy
efficiency of passenger cars[194],
to use more renewable fuels or to include aviation in the EU ETS will help in
the future, given the expected rise in traffic volumes.

Source: Eurostat, European Environment
Agency.

Figure 2:
Evolution of CO2 emissions by sector in the EU27 between 1990 and
2008 (1990=100)

16.
The failure to reduce CO2 emissions
from transport is also linked to difficulties to switch to cleaner fuels. The
high energy density of liquid hydrocarbon fuels represents a crucial advantage
in all mobile applications and an essential requirement for those that are most
sensitive to additional weight, namely aircraft.

17.
Gasoline and diesel vehicles make up 97% of all
road transport vehicles in the EU. In countries with a developed refuelling
infrastructure, vehicles running on alternative fuels could make some inroads.
In Italy, for example, more than 670,000 vehicles run on compressed natural gas
(CNG), around three quarters of the EU total. Italy has 725 public refuelling
stations for CNG which is around a quarter of the EU total.[195] As regards vehicles
running on liquefied petroleum gas (LPG), Poland provides a similar picture:
According to the European LPG Association, it has more than 2 million LPG cars,
40% of the EU total. A quarter of the roughly 25,000 LPG refuelling stations in
the EU are in Poland. Between 2003 and 2008, the number of LPG vehicles has
grown fastest in countries where the network of public refuelling stations has
seen the biggest expansion. An almost nine-fold increase in the number of
refuelling stations in Germany, for example, was met by a more than twenty-fold
increase in the number of LPG vehicles. This proves the more general point that
an adequate distribution network is essential for the promotion of alternative
fuels.

18.
Maritime and aviation continue to rely almost
entirely on fossil fuels (in particular fuel oil and kerosene). There have
however been first successful tests of blending some algae-based biofuel into
jet fuel. In short-distance waterborne transport, the use of liquefied natural
gas (LNG) has also been tested. In rail some further electrification has taken
place in the last decade, especially with the construction of new high-speed
rail lines across Western Europe.

19.
In contrast to the evolution of CO2
emissions, the emissions of air pollutants from transport vehicles were reduced
significantly despite rising traffic volumes: transport-related emissions of
particulate matter (PM10) and of acidifying substances have
decreased by about one third between 1990 and 2006, those of ozone-forming
substances have even halved. Emission reduction has been more successful in
road transport than in other modes of transport. This success is mainly due to
ever more stringent Euro emission standards for road vehicles. It should be
noted, however, that road still accounts for the lion’s share (more than two
thirds) of total pollutant emissions from transport.

Source: Eurostat,
European Environment Agency

Figure 3:
Evolution of pollutant emissions from transport between 1990 and 2007
(1990=100)

20.
Even if the total amount of pollutants and
particulates has been significantly reduced, their concentration in many urban
areas is still often beyond what is considered to be healthy[196]. More needs therefore
to be done to reduce the emission of these harmful substances, most of which
come from transport. A lack of co-ordination across the EU regarding local
measures to achieve compliance with EU air quality targets has induced a
patchwork of measures and restrictions.

1.2.
Shifting the balance between modes of transport

21.
The strong increase in road transport activity
during the 1990s had led to high levels of congestion and air and noise
pollution which were costing the European economy dearly[197] and which could not
be sustained in the long run. Something had to be done to contain the
increasing share of road transport. The 2001 White Paper therefore included a
series of measures which were to allow the non-road modes to return by 2010 to
their market shares of 1998 and prepare the ground for a shift in the modal
balance from then on. Shifting the balance between the modes of transport had
become one of the main objectives of the White Paper. This was to be achieved
by regulating the competition between the modes (creating a level playing field
between them) and by promoting intermodal transport.

22.
The objective of bringing the modal share of
road by 2010 back to where it was in 1998 has not been achieved. In fact, the
share of road haulage in total intra-EU freight transport increased from close
to 43% in 1998 to almost 46% in 2008. This was partly due to the quick
expansion of road transport in the new Member States and their more limited
overall access to sea transport.

Source: Eurostat,
DG MOVE.

Figure 4:
Modal split in intra-EU27 freight transport in 1998 and in 2008

23.
In passenger transport, the private car is still
by far the most dominant mode of transport. It accounts for almost three
quarters (more than 72%) of all motorised intra-EU passenger transport.
Compared with 1998, however, its share has gone down by almost 1 percentage
point. This is mainly due to intra-EU aviation, which has grown by more than a
third (+37%) between 1998 and 2008. The passenger car is however as popular as
ever in the EU: The motorisation level has continued to increase[198], mainly boosted by developments in the 12 new Member States where
it has grown by almost 60% since 1998[199]. Except for 2009, more than 4 million cars have been added to the
vehicle stock in the EU every year since 2005.

Source: Eurostat,
DG MOVE.

Figure 5:
Modal split in intra-EU27 passenger transport in 1998 and in 2008

1.2.1.
Improving quality in the road sector

24.
In road transport, price de-regulation and free
access to the international haulage market considerably increased efficiency in
the 1990s. Shippers enjoyed cheaper and more flexible services, which triggered
an expansion of road transport activity to the detriment of other modes. The
opening of the road cabotage market[200],
albeit only on a temporary basis, contributed to the reduction of empty returns
from international deliveries. The rules had however been rather unclear which
made it difficult to enforce them. They have recently been somewhat clarified[201] but still do not allow a completely free movement of heavy goods
vehicles within the EU despite the advantages which this would bring to the
European economy.

25.
For some time, the European road haulage sector
has been characterised by intense competition. At times, this has led to
practices which put safety at risk and which distorted competition between
modes. In 2001, social rules on driving time and working time were deemed to be
insufficient and, moreover, they were not properly enforced. The 2001 White
Paper therefore proposed a number of measures which would both improve the
working conditions of drivers and also create a level playing field between the
modes[202].

1.2.2.
Revitalising the railways

26.
At the start of the 21st century, all transport
modes but the railways were liberalised in the EU. The absence of any
competitive pressure on rail operators was believed to be one of the main
reasons why the railways had become relatively uncompetitive and lost
significant market shares during the 1990s. The three railway packages adopted
in 2001, 2004 and 2007[203]
included the most important initiatives at EU level through which the sector
was to be revitalised. This was to be achieved essentially by opening up the
rail market in the EU, by introducing common safety rules and standards and by
improving the interoperability of national railway networks. As a result, both
national and international rail freight services were opened up to competition
in 2007 and international passenger services were liberalised in early 2010.
Safety rules have been strengthened, the European Railway Agency has been
created and the removal of technical barriers hindering the development of rail
transport has started. The development and deployment of ERTMS offers a common
rail traffic management system that can significantly improve the performance
of cross-border rail connections.

27.
In addition, the EU promoted the construction of
high-speed rail (HSR) lines to bring citizens closer together and to offer them
a viable alternative to planes on distances up to 1,000 km. The EU promoted
interoperability between HSR infrastructure, equipment and rolling stock[204] with a view to enabling high-speed trains to run safely and
seamlessly throughout the trans-European rail network. Moreover, the priority
projects of the trans-European transport network (TEN-T) included a number of
HSR lines, some of which have been completed by now. HSR already accounts for
about a quarter of all rail passenger traffic in the EU. Measured in
passenger-kilometres, HSR traffic has more than doubled between 1998 and 2008.
The European HSR network currently comprises around 10,000 km of lines. By
2020, it is expected to be twice as long. Once completed, it will consist of
more than 30,000 km of lines.

28.
One of the priority projects co-funded by the
TEN-T budget is the Betuwe line, a rail freight dedicated line between
Rotterdam and the German border that was opened in 2007. It will form part of
the rail network for competitive freight which is about to be created to
improve the competitiveness of rail freight transport in the EU, in particular
along international corridors.[205]
The network should enhance co-operation between infrastructure managers and
provide a more integrated service to customers along a given corridor (one-stop
shop). Moreover, rail freight traffic is to be given sufficient priority along
corridors shared with passenger traffic.

29.
Revitalising the railways appears to have been
successful to some extent: After losing one percentage point between 1998 and
2001, the share of railways in intra-EU freight transport has then remained
roughly the same at close to 11%. In intra-EU passenger transport, railways
could also keep their market share of slightly more than 6% which they had at
the beginning of the decade.

30.
While rail could keep its modal share during the
last decade in the EU as a whole, this success has not been evenly spread.
Between 2000 and 2008, rail freight transport activity rose by 54% in the
Netherlands, by 40% in Germany and by 37% in the United Kingdom while it shrank
by 30% in France. There is a positive correlation between market opening and
increasing volumes. Rail has gained market share mostly in those countries
which liberalised their rail market early on. Some countries which delayed
market opening struggled to keep the market share of their rail sector at the
level at which it was at the start of the century. In 19 EU countries, the
market share of non-incumbent railway undertakings is still below 15%. This
relatively low penetration of newcomers is a sign of persisting market entry
barriers.

Source: Eurostat.

Figure 6:
Evolution of rail freight transport activity by country between 2000 and 2008
(in billion tkm)

31.
It may be argued that the rail sector could have
performed even better had market opening not been postponed in many countries
and had the market access directives – in particular those of the first railway
package – been properly implemented. The unsatisfactory level of implementation
and application of these Directives has led to many complaints by new operators
who were facing obstacles where there should have been none. Some provisions of
the first package left some scope for interpretation which resulted in unequal
transposition of the directives in the various Member States.

32.
The greatest strengths of rail freight lie in
longer distance transport. It is therefore essential to remove all obstacles
that may hinder border-crossing traffic. Operators need equal access conditions
to the rail network of all Member States. Too many rules and restrictions are
still in place which make border-crossing transport more cumbersome than it
needs to be. The full implementation of the provisions of the three railway
packages is crucial in ensuring a level playing field for all operators. More
simplification and harmonisation of rules may be needed. The recast of the
market access directives recently proposed by the Commission[206] aims at clarifying,
simplifying and modernising the existing rules to facilitate their
implementation and thereby improve the functioning of the market.

1.2.3.
Addressing the challenges from growing air
transport

33.
Air transport has shown the strongest growth of
all modes of transport in Europe at the end of the 20th century. According to
figures provided in the 2001 White Paper, passenger numbers in the EU15 had
increased five-fold between 1970 and 2000. The liberalisation of air transport
in the EU in the 1990s accelerated this process. It significantly increased
competition in the sector, lowered air fares and widened the range of choices
for passengers as the number of intra-EU routes offered by airlines more than
doubled. The share of air transport in the modal split of intra-EU passenger
transport was expected to double between 1990 and 2010 (from 4 to 8%) – a
scenario that has actually come true, despite a temporary slowdown of air
traffic growth in the wake of the terrorist attacks in 2001, the SARS outbreak
in 2002/03, the economic crisis in 2008/09 and the volcanic ash cloud in 2010.

34.
The increase in air traffic has put some strain
on the available capacity, above all in the sky. Traffic density resulted in an
increasing number of delays. The saturation of the skies and shortages in
airport capacity needed therefore to be addressed. Moreover, air transport
needed to become cleaner and less noisy if its growth was not to be thwarted by
environmental and health concerns.

35.
The creation of a Single European Sky (SES)[207] was one of the main measures to address the rising density of air
traffic and to rationalise air traffic management (ATM) in Europe. It was to
put an end to the fragmentation of the European airspace which was highly
inefficient and cost the industry dearly. A single sky would also have positive
environmental effects as airplanes would be able to fly more direct routes and
hence consume less fuel per flight. Once established, it is expected to triple
capacity, increase safety by a factor of ten, halve ATM costs and reduce the
environmental impact of each flight by 10%.

36.
Slow and insufficient progress in the
implementation of the SES prompted the Commission to strengthen the existing
legislative framework through the adoption of the “SES II package” in 2008[208], which, among others, introduced a firm deadline (December 2012)
for the creation of functional airspace blocks (FAB), a crucial element of the
SES initiative. The FABs will be based on operational requirements rather than
national borders and contribute to a substantial consolidation of ATM
activities in Europe. The reluctance of Member States to pool their sovereignty
in this field needs to be overcome. Some progress appears to have occurred in
the wake of the ash cloud crisis in spring 2010, when the Council has given the
highest priority to the acceleration and anticipation of the implementation of
the SES.[209]

37.
The SES II package also foresees the creation of
an independent performance review body which defines EU-wide targets with a
view to improving the performance of ATM in the areas of safety, environment,
capacity and cost efficiency. The need for such a body has become apparent in
the last couple of years when airlines increasingly complained about the rising
costs of, in their view, relatively unproductive and inefficient ATM services
and when the need to improve the environmental performance of air traffic has
become more and more urgent.

38.
In 2007, the Commission adopted an Action Plan
on airport capacity, efficiency and safety in Europe[210] to avoid an expected capacity crunch at airports. It called, among
others, for a better use of existing capacity at airports, a coherent approach
to air safety operations at aerodromes and the promotion of ‘co-modality’
(stressing the need for better air-rail connections). While many of the
proposed actions have been carried out in the meantime (e.g. the work done by
Eurocontrol in the areas of air traffic flow management, the creation of an
observatory for airport capacity planning in 2008 or the extension of EASA’s
role in the field of aerodrome safety[211]),
there are still some shortcomings as airport-rail connections are still often
inadequate or completely missing.

39.
The allocation of landing and take-off slots at
congested airports in the EU is governed by EU legislation dating from 1993.[212] An amendment in 2004[213] contained a number of technical improvements such as provisions
with regard to enforcement, clearer definitions, better monitoring tools and
stricter sanctions against abuse or non-compliance with the allocation rules.
Nevertheless, experience shows that some problems still exist: new entry takes
place with difficulty because the turnover of slots into the allocation pool is
insufficient. At congested airports, pool slots tend only to be available at
unattractive times or they are not available as series. This is impeding the
creation of strong competition to the incumbent carriers and hence the optimal
use of airport capacity.

1.2.4.
Promoting the use of waterborne transport and of
intermodal transport

40.
Other measures intended to favour modal shift
were targeted at maritime transport (in particular short-sea shipping), inland
navigation and intermodal transport in general. The promotion of short-sea
shipping was to shift transport away from road onto ships. One major obstacle
to this shift has been the complexity of administrative procedures and
reporting formalities. This obstacle should be reduced through the foreseen
creation of a European maritime transport space without barriers[214] and the introduction of electronic documents. Short-sea shipping
also benefits from the creation of “Motorways of the Sea” (MoS) and from the
Marco Polo Programmes.

41.
The MoS were to become a real competitive alternative
to road transport. Certain shipping links, particularly those providing a way
around the bottlenecks in the Alps and the Pyrenees were to become part of the
trans-European transport network. A critical mass of goods was to be
concentrated on certain ports to increase the economic viability of frequent
regular maritime connections between them. In addition, the intermodal
connections in the ports and the hinterland connections were to be strengthened
to allow for a smoother transport chain.

42.
The success of the MoS concept has so far been
limited. The need to better integrate the hinterland connections of the ports
into the concept to avoid them becoming bottlenecks has not always been
understood. Some of the projects funded so far do not really contribute to a
modal shift as there is no viable land alternative and/or they do not
contribute to a reduction of harmful emissions. Moreover, any MoS funding is
bound to raise competition issues between ports. A revision of the MoS policy
would therefore be appropriate.

43.
Other initiatives to promote maritime transport,
such as those to open up the market access to port services[215] have however failed.
Following fierce demonstrations by dockers, the European Parliament rejected
the Commission proposal in early 2006 and called instead for a directive on
transparency and fair conditions of competition between ports. The Commission
issued a Communication on a European Ports Policy[216] in 2007 which
contains an Action Plan that addresses a number of issues relevant to ports.
The proposed actions are meant to support an improvement in port performance, a
potential increase in port capacity, the modernisation of port activity, the
improvement of the environmental credentials of ports and the attractiveness of
ports both for workers and for the surrounding cities.

44.
After road, maritime freight transport recorded
the strongest growth of all modes during the last decade. Intra-EU shipping
increased by more than 20% between 1998 and 2008. This is partly due to
globalisation which boosted some shipping markets – in particular container
shipping. Intra-EU shipping benefited from feeder traffic for these global
connections as well as from the supporting policies mentioned above.

45.
Inland waterways are among the safest and most
environmentally friendly modes of transport. Moreover, they still have plenty
of free capacity to transport goods along the extensive inland waterway network
in Europe. The Commission has therefore been eager to support this mode of
transport. In early 2006, it adopted an Action Programme for inland waterway
transport, called NAIADES[217].
The Programme included a number of legislative (harmonisation of rules), policy
(e.g. TEN coordinator, market observation) and support instruments (such as the
Reserve Fund, research and support programmes). Overall, the fruits of this
work have not been reaped yet. Between 1998 and 2008, inland waterways
transport in the EU has grown by a total of 9.3% or 0.9% per annum. At 3.5% its
share in intra-EU goods transport is lower than in the 1990s.

46.
The Marco Polo programmes[218] promoted a general
shift of transport activities away from road (i.e. to short-sea shipping, rail
and inland waterways). The idea behind the Marco Polo concept is that operators
are reimbursed for each tonne-kilometre (tkm) moved away from road. The first
Programme which went from 2003 to 2006 had the objective of moving 12 billion
tkm per year off the road. While the contracts concluded did meet that target
on paper, not all projects succeeded. With altogether about 31 billion tkm
shifted over four years, the overall target has been missed by more than a
third. The second Programme has so far been somewhat more active: The planned
amount of freight to be shifted from projects funded in the first three years
(2007-2009) is 61.8 billion tkm.

1.2.5.
Modal shift in the new Member States of Central
and Eastern Europe

47.
The Central and Eastern European countries that
joined the EU in 2004 and 2007 had traditionally a higher share of rail
transport in the modal split. In 1998, rail still accounted for over 40% of
inland freight transport in these countries. This relatively high share is even
more remarkable when considering that it reflected the situation after a
precipitous drop both in transport volumes – which nearly halved – and in market
shares during the1990s. The fall in rail activity during the 1990s was mainly
due to the economic restructuring in these countries away from heavy
industries. As the Central and Eastern European countries still had an
extensive rail network and a lot of expertise in rail transport, however, the
EU set itself the target of maintaining a high share of rail in these
countries. By 2010, rail should still account for 35% of all inland freight
transport in new Member States.

48.
After the sharp decline during the 1990s in rail
transport activity in the Central and Eastern European countries that joined
the EU in 2004 and 2007, rail freight transport in these countries started to
increase again in the course of the last decade, albeit at a snail’s pace
(+2.6% altogether between 2000 and 2008). As road transport activity had more
than doubled during the same time, however, rail continued to lose market
share. By 2008, the share of rail in inland freight transport of the new Member
States had gone down to an estimated 34%[219].
The share of rail in these countries is hence still fairly close to the target
value for 2010. This should not hide the fact that the rail network in the new
Member States is mostly in a bad shape, following years of underinvestment.

49.
The accession of the Central and Eastern
European countries to the EU and the integration of their economies into the
wider EU economy had a dramatic effect on road transport. Its share in all
inland transport activities of the new Member States has gone up from around 43%
in 1998 to about 55% in 2008[220].
The international transport activities of Central and Eastern European road
hauliers showed the most spectacular growth rates over the last decade: In
terms of tonne-kilometres, they almost tripled (+190%) between 2000 and 2008.
National and international activities of road hauliers from the new Member
States more than doubled while those of hauliers from the EU15 only increased
by 10%.

50.
The success of hauliers from the new Member
States can be explained in part by their relative cost advantage. Lorry drivers
in the new Member States earn a fraction of their colleagues’ pay in the EU15.
The salary of a lorry driver in Romania, for example, is less than a quarter of
that of a driver in Germany. This also explains why, in terms of
tonne-kilometres, more than 90% of all road transport operations between EU15
and EU12 countries are carried out by hauliers from the new Member States.

51.
Polish hauliers have in 2008 become the biggest
cross traders in the EU, i.e. they transport most goods from one foreign
country in the EU to another. More growth of the activities of road hauliers
from Central and Eastern Europe can be expected, in particular given that all
special restrictions on the cabotage market inside the EU – which had been imposed
on a temporary basis upon accession on hauliers from most of the countries that
joined the EU in 2004 – have been lifted on 1 May 2009.

52.
Rapidly rising motorisation levels in the new
Member States make it more difficult for other modes of transport to keep their
market shares. The volume of passenger transport by rail in the new Member
States, for example, has fallen by 20% between 2000 and 2008. This is in stark
contrast to the evolution in the EU15 where railway passenger transport
increased by about one sixth (+16%) during the same period. The relative
success of rail in the old Member States can mainly be attributed to the
attractiveness of the ever expanding high-speed rail network. The new Member
States still do not have such a network.

53.
Bus and coach operators in the new Member States
are also losing market share to the passenger car. Their transport activities
have slightly gone down (-4%) since 2000. In the EU15, by contrast, bus and
coach operators were able to increase their transport activities by more than
8%. It should be noted, however, that bus and coach transport is still about
1.5 times more important (in terms of modal share) in the new Member States
than it is in the old ones.

1.2.6.
The 2006 mid-term review and the concept of
co-modality

54.
The existence of alternative modes is a
precondition for shifting transport activities from the road to other modes.
Often enough, however, there is no economically viable alternative to the road.
In the mid-term review of the White Paper, it was acknowledged that, in an
integrated transport system, modes of transport do not necessarily compete
against each other but rather complement one another. Improving the efficiency
of each mode of transport on its own and in combination – in short: co-modality
– was to become the leitmotif of European transport policy since then. Modal
shift was still an objective – but only where it was most needed, such as over
long distances, on congested corridors and in urban areas.

55.
In 2007, the Commission adopted a Freight
Transport Logistics Action Plan[221]
which aimed at making freight transport in the EU more efficient and more
sustainable. It contained a number of measures which were to increase the
attractiveness of non-road modes, e.g. through the creation of a European
maritime space without barriers, the development of a freight-oriented rail
network or the definition of green corridors. Other measures looked at the
whole logistics chain and tried to reduce the administrative hurdles in
intermodal transport by developing a single transport document. In addition,
the use of new technologies such as e-freight and intelligent transport systems
in freight transport was to be promoted. The rules on vehicle dimensions and
standards in road transport were also to be reviewed. Some of the measures have
only recently been adopted or are still in the pipeline; it is therefore too
early to assess any measurable impact from them.

2.
Eliminating bottlenecks
2.1.
TEN-T

56.
The TEN-T policy goes back to the Maastricht
Treaty which gave the Community the powers and instruments to establish and
develop the trans-European networks. Their main purpose is to contribute to the
smooth functioning of the internal market and the strengthening of economic,
social and territorial cohesion. In general terms, the TEN policies promote the
interconnection and interoperability of national networks and support projects
of common interest.

57.
The European Council in Essen in 1994 has
adopted a list of 14 transport projects of common interest. The selection of
the 14 projects was largely based on national priorities (bottom-up approach)
rather than European ones (top-down approach). The TEN-T guidelines adopted in
1996[222] included these 14 projects which were to be completed by 2010.

58.
By the time of the 2001 White Paper, only 3 of
the 14 projects had been completed (Malpensa airport in Milan, the Øresund
fixed link between Denmark and Sweden and the railway axis
Cork-Dublin-Belfast-Stranraer). Some other projects had made significant
progress, but a number of projects were far behind schedule. While the EU15
countries struggled to make progress on their own projects, the upcoming
accession of the then candidate countries called for even greater efforts as
their infrastructure needs were much bigger.

59.
A revision of the TEN-T guidelines in 2004 took
account of EU enlargement: it expanded the list of priority projects to 30,
with the horizon for completion set to 2020. At the same time, the original
projects were revised and, typically, extended; their target date has also been
postponed. Moreover, European co-ordinators were appointed for the most
important priority projects. They were to promote the projects and thus speed
up their completion.

60.
By 2010, a total of 5 out of 30 TEN-T priority
projects have been completed. Only two railway projects (the Betuwe line in the
Netherlands and the west coast main line in the UK) have been finished since
2001. Other projects, while not completed, did make significant progress. Out
of the nearly 400 billion € of projected costs for the 30 priority projects,
around 164 billion € have been invested until the end of 2009, and close to 80
billion € are projected for the period 2010-2013. The remaining 37% of the
investments are foreseen after 2013.

61.
The opening of high-speed lines in Germany,
Italy, Spain, France and the Benelux countries has considerably improved
accessibility and brought people closer together. Rail could capture market
shares from aviation and from the passenger car. These successes should however
not hide some disappointments: a couple of projects such as the trans-Alpine
rail tunnels on Brenner and Fréjus have been designated as a ‘priority’ for
more than 15 years but construction has not even started yet. These points have
been critical bottlenecks since then. The elimination of bottlenecks – one of
the key priorities of the 2001 White Paper – is work in (slow) progress.

2.2.
Infrastructure funding

62.
Infrastructure financing is supported by various
financial instruments at EU level, including the TEN-T budget, the Structural
Funds and the Cohesion Fund, and loans from the European Investment Bank (EIB).
The Structural Funds and the Cohesion Fund have been a major source of finance
for the investment needed to reduce imbalances in transport endowment in
lagging regions across the EU. The TEN-T budget currently co-finances projects
on the TEN-T network. It contributes up to 10% of costs of works on the
comprehensive TEN-T network, up to 20% of the costs of works in priority
projects and traffic management systems (except for rail) and up to 30% of the costs
of works in cross-border sections of priority projects. Moreover, they finance
up to 50% of preparatory, feasibility, evaluation and other studies related to
projects and of costs related to the development and deployment of ERTMS.[223]

63.
Although the TEN-T financing thresholds have
been raised in 2007, Community financial instruments in their current form have
so far not been able to bring about a full and timely completion of all
projects involved. Insufficient finance – both public and private – and insufficient
access to long-term finance are among the most important obstacles in
infrastructure development. This has been identified as one of the main reasons
for lack in progress in certain TEN-T priority projects.[224] Higher financing
thresholds may have helped for certain projects, but in an overall limited (and
insufficient) budget this has come at the cost of financing capabilities of
other projects.

64.
Expanding the financing capacity available for
investment in infrastructure in general and in the TEN-T in particular has been
one of the major tasks in the past and will likely remain so in the future. One
way to address this issue is to mobilise private investment in infrastructure
projects. The involvement of private capital in public-private partnerships (PPP)
enabled the completion of a number of projects (e.g. the Øresund fixed link).
To strengthen the organisational capacity of the public sector to engage in
PPP, the Commission and EIB set up a European PPP Expertise Centre in 2008.

65.
The budgetary resources at EU level have grown
somewhat over time. At just 8 billion € between 2007 and 2013, however, the
TEN-T budget only covers a fraction of the needs. The commitment of the EIB has
also been expanded over the years, both through the amount of financing
provided and through the development of specialised financing instruments such
as the Loan Guarantee instrument for TEN-T projects (LGTT).[225]

66.
Finding more money to finance transport
infrastructure projects in mountainous areas was also one of the objectives of
the amendment of the Eurovignette Directive in 2006.[226] It allows a mark-up
of tolls on specific road sections in mountainous areas to finance projects of
high European value, including those involving another mode of transport along the
same corridor. This allows for instance Austria to charge more from heavy duty
vehicles using the Brenner Pass. The money thus collected is to be used to
finance a part of the upcoming Brenner base tunnel, a TEN-T priority rail
project. This allows a kind of pre-financing of important new infrastructure projects
and has as such been foreseen in the 2001 transport policy White Paper to
relieve the headache of funding.

3.
Placing users at the heart of transport policy
3.1.
Transport safety

67.
As long as people get accidentally killed or
seriously injured while moving from one place to another, ensuring and
improving transport safety will remain a key theme of any transport policy. At
EU level, such policies have already been pursued in the 1970s and 1980s in the
context of safety features being included in the type approval process of new
road vehicles. The breakthrough in the EU policy on transport safety came with
the Maastricht Treaty of 1993, which explicitly gave the EU competence in this
field. Improving transport safety has become one of the main objectives of EU transport
policy ever since[227].

3.1.1.
Road

68.
Producing the highest number of casualties, road
is the main challenge with regard to transport safety. The Commission has
adopted two Road Safety Action Programmes in the 1990s, one going from 1993 to
1997[228]
and the other from 1997 to 2001[229].
At the beginning of the 21st century, progress in road safety had been somewhat
slower than planned. The target of 38,000 road fatalities in the then EU15 by
2000 had been missed by more than 3,000. In addition to the more than 41,000 people
who died on EU15 roads at the start of the decade, around 15,000 lost their
lives on the roads of the countries that were to join the EU in 2004 and 2007.
It was clear that more ambitious measures had to be taken to reduce the number
of people killed on European roads.

69.
In the 2001 White Paper, the EU set itself the
ambitious target of halving the number of road deaths by 2010. In 2003, the
Commission adopted the third Road Safety Action Programme[230] to this end, a
document with a list of 62 measures and initiatives which were to be adopted
and carried out until 2010. Although the 50% reduction target initially only
covered the EU15, it was extended to the new Member States upon their
accession.

70.
Improvements in road safety were to be achieved
through action at different levels of government. The concept of shared
responsibility was introduced. Member States adopted national road safety
plans; some did so for the first time. This helped to focus minds and to target
policies and hence to reduce the number of road casualties.

71.
There has been significant technological
progress in active and passive safety of vehicles over the last decade with the
introduction by the industry of a wide range of technical safety elements, in
particular in passenger cars and heavy duty vehicles. Often, EU legislation
helped spread the improvements to all vehicles. Next to vehicle safety, EU
legislation also helped to improve infrastructure safety (e.g. road tunnels on
the TEN-T network[231])
and driving behaviour (e.g. recommendation to lower the blood alcohol limit to
0.5 mg/ml of blood[232]).

72.
In 2009, around 34,500 people were killed on the
roads of the EU27. While this was the lowest figure ever recorded, it was still
only 36% below the reference level of 2001, when about 54,300 people lost their
lives on the roads of what is now the EU27. Preliminary data for 2010 suggest
that the overall target of halving the number of road deaths in the EU by 2010
has not been met.

Source: CARE
database, DG MOVE.

Figure 7:
Evolution of the number of road deaths in the EU27 compared with the target of
the 2001 White Paper

73.
There are still big differences in the
performance of individual Member States. The worst performers (Romania, Greece)
have more than three times as many road deaths per million inhabitants than the
best performers (United Kingdom, Sweden and the Netherlands). There should
therefore be a huge scope for improvement just by applying best practice
throughout the Union. If all countries were as ‘safe’ as the best performing
ones, the annual toll of people killed in road accidents in the EU27 would
already now be below 20,000. All new Member States except for Malta and the
Slovak Republic show a worse record than the EU27 average of 69 deaths per 1
million inhabitants. Adequate and safe road infrastructure that can cope with
rising motorisation levels is often missing in these countries: their
below-average performance can partly be attributed to this phenomenon.

Source: DG MOVE
calculations

Figure 8:
Road deaths per million inhabitants in 2001 and 2009 by country

74.
As road safety is a policy area with shared
responsibilities, also involving national, regional and local authorities as
well as associations, stakeholders and the citizens themselves, the failure to
reach the 50%-reduction target cannot be blamed on the EU alone. The new Member
States had little time to improve their road safety performance but start
showing encouraging results[233].
Moreover, several EU legislative acts adopted towards the end of the period
covered by the third road safety action programme will only show their full
impact during this decade.

3.1.2.
Maritime

75.
In recent years, the EU and its Member States
have been at the forefront of actions to improve maritime safety legislation
and to promote high-quality standards. The aim has been to eliminate
substandard shipping, to increase the protection of crews and passengers, to
reduce the risk of environmental pollution, and to ensure that operators who
follow good practices are not put at commercial disadvantage by others who are
prepared to take short cuts with vessel safety.

76.
The EU has so far adopted three legislative
packages with the aim of improving maritime safety: the so-called “Erika I”[234] and “Erika II”[235] packages, and the
third maritime safety package[236].
The Erika I and Erika II packages were a direct result of the catastrophic
impact which the sinking of the single hull oil tanker Erika had in December
1999 off the coast of Brittany. It was felt that the Community needed to adopt
stricter safety rules than those set by the International Maritime Organisation
(IMO) to prevent similar disasters from happening again. The first package
(Erika I) involved more rigorous inspection of ships at Community ports,
stricter monitoring of the classification societies and a ban on single hull tankers.
The second package (Erika II) established a Community monitoring, control and
information system for maritime traffic, a fund for the compensation of oil
pollution damage and the European Maritime Safety Agency (EMSA).

77.
In general terms, EMSA provides technical and
scientific assistance to the Commission and the Member States in the fields of
maritime safety, maritime security, prevention of pollution and response to
pollution caused by ships. Its assistance is particularly relevant in the
continuous process of updating and developing new legislation, monitoring its
implementation and evaluating the effectiveness of the measures in place. In
order to monitor the implementation of the Community acquis, the specialised
staff of the Agency carries out inspections to Member States and, in specific
areas, to third countries. Such inspections started in 2004 and intensified
over the last years.

78.
Another disaster, the sinking of the oil tanker
Prestige off the coast of Galicia in November 2002, prompted more legislative
action that resulted in the third maritime safety package which the Commission
adopted in 2005 and which finally was adopted by the European Parliament and
the Council in 2009. It seeks to improve the effectiveness of existing measures
to prevent accidents and to better manage their consequences in case accidents
do happen.

79.
Apart from the Prestige accident in 2002, there
has been no major catastrophic oil spill in European waters over the last ten
years. The accelerated phasing-in of double hull tankers has significantly
reduced the risk arising from the transport of heavy fuel oil in single-hull
tankers. Moreover, the work done by EMSA and the stronger roles of national
safety authorities helped improve safety in European waters.

80.
In its Maritime Accident Review 2009, EMSA
reports that the total number of vessels involved in accidents and the loss of
life in and around EU waters were at historically low levels in 2009. 52 people
on board commercial vessels were killed in 2009, close to 37% less than in 2007
and 2008.[237] It is not clear though what part of the positive evolution in 2009
can be attributed to EU action in this area and what part is due to the
economic crisis: with lower traffic volumes and less pressure on crews to meet
tight deadlines a reduction in accidents was to be expected. In any case, there
is room for improvement as there were still hundreds of accidents and (minor)
oil spills in and around EU waters in 2009.

3.1.3.
Rail

81.
Rail is a relatively safe mode of transport. The
number of railway passengers killed per year in the EU is usually counted in
dozens, not in thousands as in road transport. There were two main reasons for
the EU to become involved in railway safety: first of all, safety rules across
Member States had been so different that it was very cumbersome for a railway
operator from one country to be granted a safety certificate from another one
which is a prerequisite for market access. For the opening of the market, it
was essential to harmonise safety rules and to ensure interoperability between
different safety regimes in the Member States.

82.
Later, with the opening of the railway market,
it was feared that safety would suffer under the pressures of a competitive
environment. In the 2001 White Paper, the EU therefore set itself the target of
guaranteeing a level of safety that is at least equal to, if not higher than,
that achieved in the national context. So far, this objective has been met:
figures provided by the International Union of Railways (UIC) suggest that the
number of railway passengers killed in the EU15 has even fallen slightly: while
between 2001 and 2004, an average of 91 rail passengers died every year in the
EU15, this figure went down to 43 in the period 2005 to 2008 (when on average
91 passengers died in the whole EU27, not just the EU15).

83.
Generally, rail is considered to be a relatively
safe mode also when it comes to the transportation of dangerous goods. In an
integrated European rail market, both infrastructure and rolling stock, in
particular those carrying dangerous goods, have to meet high and comparable
safety standards across the EU. The tragic accident in Viareggio in June 2009[238] showed a number of shortcomings in existing rules. Distance-based
controls for train wagons and a stronger role for the European Railway Agency
(ERA) in accident investigations appear necessary.

84.
ERA has been created as part of the second
railway package[239]. It supports the Commission in setting up and enforcing common
safety standards and in improving the interoperability of the European railway
system. At Member State level, it is supported by independent national rail
safety authorities.

85.
The certification and authorisation process is
still managed by the national rail safety authorities. However, the cost and
duration of the related procedures are significant. Moreover, the procedures
differ from one country to another, and they lack transparency and
predictability.

3.1.4.
Air

86.
Europe has a relatively good track record when
it comes to safety in air transport. The number of air crashes and related
casualties is lower than on most other continents. The White Paper of 2001 saw
the need to establish a European Aviation Safety Agency (EASA) which was to
work on all aspects of air transport activities, from aircraft certification to
the operational rules. The co-operation within the Joint Aviation Authorities,
which had been dealing with these issues before, had reached its limits. EASA
was created in 2003[240] and became fully operational in 2008. It supports the Commission
among others in the implementation and monitoring of safety rules through
inspections in the Member States, in the type certification of aircraft and in
the authorisation of third-country operators.

87.
To protect European citizens from potentially
unsafe aircraft originating from third countries, the procedures for ramp
inspections for third-country aircraft landing at EU airports have been
harmonised,[241]
as announced in the White Paper. Moreover, the Commission has created a black
list where all airlines with some safety concern are listed.[242] These airlines are
banned from European airspace. The list is regularly being updated.

88.
Given the relatively good level of air safety,
there have been only very few major air crashes by EU carriers and over EU
territory. Individual crashes often dominate the casualty statistics of a given
year. Based on figures provided by EASA, the annual number of lives lost by any
airline over EU27 territory has fluctuated between 0 and 154 in the last 20
years, those lost on board an EU carrier anywhere in the world has been
somewhere between 0 and 278 since 1990. Compared with the 1970s and the 1980s,
air transport has become significantly safer, especially in relation to the
volume of air traffic: air traffic in the EU has more than doubled during the
last two decades while the number of people getting killed remained at very low
levels.

3.2.
Transport security

89.
While transport safety deals with the prevention
of accidents, the protection of passengers and workers from unlawful
interference or intentional attacks is being subsumed under the term transport
security. Transport security is not mentioned in the White Paper of 2001. It
has however become a great concern in the wake of the terrorist attacks of 11
September 2001 in the United States. Soon thereafter, the EU has established
common rules and common basic standards in the field of civil aviation security[243]. Harmonised rules
across the EU created a ‘one-stop security’ regime where passengers arriving
from one EU airport do not have to be re-screened when transferring at another
EU airport. Unannounced Commission inspections at EU airports help ensure the
implementation of the security measures.

90.
The absence of any terrorist attack in European
air transport may be attributed to EU action in this area. Actions taken so far
may therefore be considered to have been effective to date. It should be noted
however that several attempted attacks since 9/11 were committed by passengers
boarding an aircraft in the EU[244].
New security rules usually followed attempted or successful attacks which
exposed shortcomings in existing rules. The ban of liquids in containers larger
than 100 ml on planes, for example, followed a terrorist plot in 2006 involving
explosive liquids[245]. As the ban was rather costly and caused a lot of misery to ordinary
travellers, its proportionality has been called into question[246]. The ‘Christmas Day
bomber’ in 2009 is another example: his failed attempt has stirred up the
debate on the use of security scanners at airports.

91.
In maritime transport, the EU has been active in
enhancing ship and port facility security[247]. The Commission carries out inspections to monitor the correct
application of the legislation. The fight against piracy is another EU activity
in the field of maritime security. The EU is currently involved in the
operation Atalanta off the coast of Somalia to protect vessels sailing in the
area and to end acts of piracy and armed robbery, if needed. While the effect
of EU action in this field may be considered as overall positive, the pressing
problem of piracy is far from solved.

92.
In addition to legislation in air and maritime
security, the Commission also proposed some measures to improve the security of
surface freight transport in order to have unified security rules across the
supply chain[248]. They included the concept of a ‘secure operator’ who would benefit
from fast-track treatment at security checks. The European Parliament was
however of the opinion that the revision of the Community Customs Code which
was going on at the same time and which foresaw a similar certification for
secure operators was sufficient.

93.
There appears to be a clear need in increasing
the security of surface freight transport in general and of road freight
transport in particular. Lorry drivers are frequently attacked, often while staying
at unsecured parking spots. The lack of secure parking areas is a growing
problem which the EU is trying to address through a number of projects such as
SETPOS[249]
and LABEL[250].
In November 2010, the Council adopted a resolution on preventing and combating
road freight crime and providing secure truck parks.[251]

94.
Next to surface freight transport, surface
passenger transport is another area without existing security rules at European
level. The devastating terrorist attacks on the public transport systems in Madrid
in 2004 and in London in 2005 killed almost 250 people altogether and exposed
the vulnerability of these networks. With the gradual integration of the
European transport system, common security rules also in inland transport may
be warranted.

95.
In many cities, public transport suffers from a
lack of security due to some anti-social behaviour. That goes from spraying
graffiti via damaging carriages to attacking ordinary passengers. Pickpockets
are another common threat in a number of public transport networks. It should
be ensured that public transport is a no-go zone for thugs and criminals.
Public transport must be perceived to be safe and secure if it is to succeed in
convincing more people to leave the car at home and use public transport
instead.

3.3.
Working conditions and social dialogue

96.
One of the fundamental objectives of the EU is
the promotion of employment as well as the improvement of living and working
conditions. The EU may to this end adopt Directives which set minimum
requirements regarding several aspects of working conditions (e.g. health and
safety at work, social protection, information and consultation of workers).
The European social partners play an important role in the formulation of EU
social legislation, as agreements between them at EU level on matters covered
by the Treaty may become binding EU law. The Commission encourages the social
partners to find solutions at EU level and consults them on policy measures.[252]

97.
In the transport field, sectoral dialogue
committees were set up in 1999 for road, rail, inland waterway and maritime
transport, and in 2000 for civil aviation.[253] In sea ports, however, no such committee has so far been
established despite the Commission explicitly encouraging such a step.[254] The committees
dealing with maritime, civil aviation and rail transport have since found
agreements on the working conditions of (at least some of) the employees in
their specific sectors. These agreements have been transposed into EU law.[255] In the areas covered
by such agreements, the general working time rules[256] do not apply.

98.
In road transport, however, no such agreement
could be found. The EU social dialogue in the road transport sector was
deadlocked among others over the question whether self-employed drivers should
be covered or not. Here, the EU has come up with its own rules on the working
time of persons performing mobile road transport activities[257] which – in a compromise fashion – temporarily exempted
self-employed drivers during the first seven years after the Directive entered
into force (i.e. until March 2009).

99.
In 2008, the Commission proposed to amend the
Directive in order to maintain the exclusion of genuine self-employed drivers
from the scope of the Directive while strengthening its enforcement in the case
of so-called “false self-employed”[258] drivers in addition to employed professional drivers.[259] Among the reasons for not covering self-employed drivers were the
difficulties and costs involved in enforcing such rules, particularly among
this group. The European Parliament was however of the opinion that the rules
on working time should uniformly apply to all drivers, including the
self-employed ones. The Commission then withdrew its proposal and is now faced
with the challenge of ensuring a proper enforcement of the existing rules.

100.
The road transport sector is highly fragmented
and the bulk of the operators are very small undertakings or even one-man
companies. To make their production capacity more flexible and
demand-responsive and to save costs, larger undertakings often subcontract the
work to drivers who were previously employees. Such drivers are then however
socially vulnerable as they occupy a ‘grey area’ between labour law and
commercial law. E.g. current rules forbid payments by transport undertakings to
employed drivers on the basis of distance travelled and/or the amount of goods
carried if that payment endangers road safety.[260] Any circumvention of
this rule, for instance by declaring (false) self-employment, should be
prevented. According to the social partners, however, the phenomenon of ‘false’
self-employed drivers has become increasingly frequent.

101.
Next to the overall working time, EU legislation
also regulates maximum driving time and minimum rest periods in road transport.
These rules are meant to avoid driver fatigue and hence to contribute not only
to better working conditions but also to road safety. In 2006, the rules have
been substantially updated.[261] Moreover, the enforcement of the rules has been strengthened by an
increase in the number of inspections, by more co-ordination and co-operation
between national enforcement bodies and by introducing the digital tachograph
in road vehicles, a device which automatically records the driving time of a
driver and which cannot be manipulated as easily as traditional recording equipment.

102.
Right now, virtually all goods transport
vehicles and buses have to be equipped with the digital tachograph if they are
used to cover distances longer than 50 km. For regionally operating small and
medium-sized craft businesses, however, this produces an enormous amount of red
tape. Their administrative burden could be substantially reduced if the
installation of the tachograph was not required in vehicles that are used by
them on distances up to 150 km.[262]

103.
There is still an important gap between the
remuneration of lorry drivers from the new Member States and those from the old
ones which is also one of the reasons of the current limitation of cabotage[263]. This difference in labour costs decreases, but it will for a
number of years continue to put pressure on road haulage undertakings
established in the old Member States, unless they diversify their activity in
logistics activities with higher value added.

104.
Differences between Member States in applying
and enforcing existing social rules in road transport (e.g. there is a huge
variance in penalties for breaching the rules[264]) may distort
competition in the sector and lead to a potential exploitation of workers. A
more harmonised control and sanctioning system would allow the legislation to
deploy its full benefit in particular for drivers and undertakings. The new
possibilities offered by the Lisbon Treaty should be used in this context.
Generally low levels of compliance with the social rules by both employers and
by workers (e.g. undeclared work, incorrect records) add to the enforcement
challenge.

105.
In some areas, such as maritime transport, there
is a growing shortage of qualified staff of European origin. The problem has
already been identified in 2001[265] and the situation has not improved since. The ageing of existing
crews is bound to further increase the scarcity of European officers in the
near future. More actions to improve the working conditions at sea and to emphasise
the attractiveness of the maritime profession appear necessary to attract more
young Europeans and thus ensure the competitiveness of the European shipping
sector. This requires better perspectives for a life-long career that includes
assignments on board and on the ground. The inland navigation sector faces
similar problems which the NAIADES Action Programme[266] tries to address.

106.
The European Commission has actively supported
the negotiations on the 2006 Maritime Labour Convention (MLC) of the
International Labour Organisation. The MLC, also called the seafarers’ “bill of
rights”, provides for minimum social standards for seafarers worldwide. An
Agreement concluded by the European Community Shipowners’ Associations (ECSA)
and the European Transport Workers’ Federation (ETF) on the MLC has meanwhile
been implemented[267]
and will enter into force together with the MLC.[268]

3.4.
Passenger rights

107.
There was a risk that the increasing competitive
pressure in the wake of the opening of the transport market would at times lead
to practices that were not in the interest of the passengers. Such practices
had above all been observed in air transport where cases of denied boarding,
flight cancellations and considerable delays had become frequent. The EU has
therefore extended the rights of air passengers in these cases. They have now a
right to care, to reimbursement and to compensation if needed. The enforcement
of the rules is to be carried out by national designated bodies. The air
passenger rights[269]
entered into force in 2005. The rights of passengers using other modes
followed: those of rail passengers entered into force in 2009,[270] those of ferry
passengers will apply from late 2012[271]
and those of bus and coach passengers from March 2013.[272]

108.
There is no doubt that air passengers enjoy
better protection today than they did before EU legislation in this area
entered into force. An evaluation of the air passenger rights regulation
carried out in 2009-2010[273]
came however to the conclusion that there were some shortcomings in the
application and enforcement of the rules. Differences in length and duration of
the national sanction schemes in case of non-compliance reduce the
effectiveness of the legislation. Moreover, sometimes the interpretation of the
rules also differs between Member States so that there is no level playing
field. Further measures to improve enforcement and a more harmonised
application of the rules appear necessary.

109.
Some rules in the Regulation would need to be
clarified so that there is less room for interpretation. The Court of Justice
of the EU has been called to interpret already a number of key issues, such as
the rights in case of long delays[274]
or the notion of “extraordinary circumstances” under which airlines are not
obliged to pay compensation when cancelling a flight.

110.
The air passenger rights legislation was put to
a test in spring 2010 when a volcanic ash cloud led to air space closures in
most of Europe which left millions of passengers stranded. The European
Commission reminded the passengers of their rights. It made clear that
passengers had a right to care (i.e. provision of meals and accommodation, if
necessary) even in extraordinary circumstances like these. Airlines however
were opposed to having to pay for something which was outside their control. A
more balanced approach, which takes both the needs of stranded passengers and
the interests of airlines into account, is needed.

111.
Air passengers’ rights already start while
booking a ticket: Passengers are entitled to know the final price to be paid
from the start of the booking process. Some airlines had advertised much lower
ticket prices only to add taxes and charges later on. This was thought to be
misleading and hence it has been outlawed[275]. Joint EU ‘sweep’ exercises have revealed that compliance has
greatly improved and that the legislation is effective.

112.
It is probably too early to assess the
effectiveness of the rail passenger rights that entered into force in December
2009. Eurostar passengers who were affected by train breakdowns due to
technical problems during the cold winter 2009/2010 were among the first to
benefit from them. In general, the implementation of this new legislation does
not seem to have given rise to major problems. Some experience from Germany
suggests though that the number of delays officially lasting 59 minutes has
gone up considerably[276].
In case of delays lasting 1 hour or more, passengers are entitled to get a part
of the ticket price reimbursed. Proper monitoring and enforcement will be key
in all areas where passengers have been given rights.

113.
Passengers with reduced mobility also benefit
from extended rights. It is no longer possible to discriminate against them.
Equal access to transport services is a necessary prerequisite to a full
participation in the modern society. Rules for the protection of and provision
of assistance to disabled persons and persons with reduced mobility travelling
by air have been adopted in 2006 and took full effect in July 2008.[277] A recent study[278] found out that the
implementation of the regulation is generally good. There is however a big
variation in the quality of services provided and in the severity of sanctions
in case of non-compliance. The very similar rights of disabled passengers and
of passengers with reduced mobility using other modes of transport have been or
are about to be granted in the corresponding passenger rights legislation. It
is too early to assess any impact at this stage.

4.
Urban transport

114.
Traditionally, EU transport policy has aimed at
simplifying and enabling cross-border traffic within the EU. National borders
have increasingly ceased to be obstacles to the free movement of people and
goods. Similarly, however, free movement should not be unduly hindered at city
borders. As the majority of people live in urban areas and as economic
activities are concentrated there, most journeys, including international ones,
start or end in urban areas. In an integrated transport system, there is a need
to look at the whole transport chain – including the ‘last mile’.

115.
Competence for urban mobility is shared between
authorities at local, regional, national and European level. The subsidiarity
principle[279] exposes any EU action in this field to close scrutiny. A lot of
issues and challenges in urban transport are however common in many towns and
cities across Europe and have a direct link to key EU policy objectives.
Increasing road congestion, air pollution and noise are just a few examples.
The EU can help to solve such issues and add value, e.g. by providing a
framework for action, by supporting initiatives that improve local transport
systems and by promoting the exchange of ideas and examples of best practice.

116.
EU action in urban and regional transport goes
back to the Green Paper “The Citizens’ Network” of 1995[280] which focused on the
issue of public passenger transport in general and public transport in urban
areas in particular. It resulted in the launch of a series of initiatives based
upon a ‘best practice’ approach. The CIVITAS initiative[281] about cleaner and
better transport in cities, launched in 2000 and financed by the EU research
budget, is one of the more prominent activities in this respect. It has brought
together a number of cities and supported them in implementing and evaluating
technology- and policy-based measures to achieve a more sustainable, clean and
energy-efficient urban transport system.

117.
Most road transport vehicles purchased by public
authorities mainly run in an urban environment. The promotion of green public
procurement was hence thought to also contribute to a cleaner urban environment
– something badly needed given the fact that the air in many cities still is not
sufficiently healthy. The EU has recently adopted new rules which stipulate
that energy consumption, CO2 and pollutant emissions linked to the operation of
vehicles over their whole lifetime will have to be taken into account in all
public purchases of road transport vehicles[282]. The market for clean and energy-efficient road transport vehicles
is thus to be stimulated.

118.
These new rules were one of the outcomes of a
broad debate in the wake of the adoption of another Green Paper on urban
mobility in 2007[283] and a thorough consultation of stakeholders. Another one was an
Action Plan on Urban Mobility which the Commission adopted in 2009[284]. It contains a list of 20 actions which together form a
comprehensive support package for local, regional and national authorities in
their efforts to make urban mobility more sustainable. The actions will be
launched until 2012. They include initiatives to increase the knowledge about
urban mobility issues and how to share it. It is still too early to assess any
effects of the actions.

5.
Promotion of research and technological
development in transport

119.
Technological innovation plays a key role in
ensuring sustainable, efficient and competitive mobility in Europe. It has the
potential of speeding up the achievement of the objectives of the Common
Transport Policy. The EU has therefore been active throughout the last decades
in promoting research and technological innovation in the area of transport.

120.
One of the areas where EU promotion has been
particularly intense is the development and deployment of Intelligent Transport
Systems (ITS), i.e. the application of Information and Communication
Technologies (ICT) in transport. The 2006 mid-term review of the White Paper
acknowledged the role of ITS in making transport more efficient, safer and
greener. EU action in this field avoids the emergence of a patchwork of ITS
applications and services and ensures interoperability across borders and,
possibly, systems.

121.
ICT are crucial elements in all kinds of traffic
management systems. Technological innovations such as satellite and radio
navigation and identification systems are available today and allow improved
monitoring and management of flows of goods, passengers and vehicles. The EU
supports the development and deployment of pan-European traffic management
systems in all modes and also between modes. A better management of transport
flows helps to avoid congestion and to make better use of existing
infrastructure capacity.

122.
In air transport, a new generation European air
traffic management system is being developed within the SESAR project.[285] It is the technological pillar of the Single European Sky
initiative (see above). SESAR is currently in the development phase (until the
end of 2013) which will be followed by the deployment phase. It should be fully
deployed by 2020.

123.
In maritime transport, the development and
deployment of Vessel Traffic Monitoring and Information Systems (VTMIS)[286] such as the Community maritime information exchange system
SafeSeaNet make it possible to locate at source and communicate to any
authority accurate and up-to-date information on ships in European waters,
their movements and their dangerous or polluting cargoes, as well as marine
incidents. Automatic Identification Systems (AIS) and the establishment of the
Long-Range Identification and Tracking (LRIT) of ships will further improve
maritime safety and efficiency in Europe.

124.
In inland waterways, the introduction of
harmonised River Information Services (RIS)[287] and their implementation along all the main inland waterways helps
improve safety and efficiency of transport by inland waterways. RIS comprise
services such as fairway information, traffic information, traffic management
and calamity abatement support. They provide information for transport
management, statistics and customs services as well as waterway charges and
port dues.

125.
In rail transport, the development and
deployment of the European Railway Traffic Management System (ERTMS) across the
rail network in the EU, starting with six priority corridors, is expected to
improve safety and significantly enhance the efficiency of cross-border
traffic. Cross-border trains will in future only need to be equipped with ERTMS
instead of a range of mutually incompatible national systems. ERTMS will
gradually replace the currently over 20 train control systems in the EU.

126.
In road transport, the deployment of ITS has
been relatively slow and fragmented. Many safety-enhancing features such as
lane keeping support, emergency braking system or the pan-European in-vehicle
emergency call system eCall[288], for example, are available but not in widespread use. The
development of electronic tolling systems is another field where the EU can add
value by ensuring that the various national schemes are co-ordinated and,
possibly, integrated. A better link up of information flows across intermodal
logistics chains and a better integration with systems used in other modes also
needs to be promoted.

127.
To speed up and to co-ordinate the deployment of
ITS in road transport and its interfaces with other transport modes, the
Commission adopted an Action Plan in 2008.[289] It contained 24 initiatives related to the optimal use of road,
traffic and travel data, the continuity of ITS services along major corridors,
ITS applications to improve road safety and security, the integration of
various vehicle-based applications in one platform, data protection issues and
the co-ordination of ITS deployment across the EU. The Action Plan was
accompanied by a Directive that provides a framework in support of a
co-ordinated and coherent deployment and use of ITS within the Union.[290]

128.
Many ITS use satellite-based radio navigation
and positioning services currently provided by the Global Positioning System
(GPS) run by the US military and by the Russian GLONASS system. In 1999, the EU
decided to set up its own global positioning system, Galileo[291]. In 2004, Galileo has become one of the 30 TEN-T priority projects.
Funding and governance issues have delayed the project which originally should
have become operational in 2008 but which is now expected to be operational by
2014.

129.
Technological solutions are essential for
cleaning up the transport system. Vehicles and vessels have become cleaner by
using new technologies. Many EU-funded projects have contributed and continue
to contribute to this objective. A prominent example is the Clean Sky Joint
Technology Initiative[292], a PPP research project that aims at improving the environmental
performance of the air transport system. The budget of around 1.6 billion € is
equally shared between the public (EU FP7 research funding) and the private
sector (aeronautics industry). Another noteworthy example is the European Green
Cars Initiative[293], a PPP that supports research in greening road transport vehicles.
A total of 1 billion € is jointly funded by the EU FP7 research budget, the
Member States and the vehicle manufacturing industry. The Ocean of tomorrow is
another FP7 joint research initiative, following the adoption in 2008 of the
"European Strategy for Marine and Maritime Research", which highlights
the importance of integration between established marine and maritime research
disciplines in order to reinforce excellence in science and to reconcile the
growth of sea-based activities with environmental sustainability.

130.
Numerous ex-post evaluations of past research
projects (i.e. AGAPE, AIMS, MEFISTO, METRONOME, SITPRO PLUS) have confirmed the
European added value in transport research: it is often only at European level
that a critical mass in terms of both scale and scope of a project can be
reached. Moreover, research at European level avoids duplication of efforts and
fosters the exchange of ideas and knowledge across Europe.

6.
The external dimension of transport

131.
Transport connects Europe with the outside
world. The external dimension of transport is obvious in particular in maritime
and air transport. With the exception of the immediate neighbours in Europe,
almost all transport activities between the EU and the rest of the world are
either by air or by sea.

132.
The EU has developed an external transport
policy distinguishing between neighbouring countries on the one hand and other
important partners – such as the United States – on the other. In line with the
European Neighbourhood Policy, neighbouring countries are to be better
connected and integrated in the internal transport market of the EU.

133.
In 2007, the Commission adopted Guidelines for
transport in Europe and neighbouring regions which extended the major
trans-European transport axes to the neighbouring countries.[294] It identified five
transnational axes to connect the EU with its neighbours, four of which are
land-based: a Northern axis connecting the northern EU with Norway, Russia and
Belarus; a central axis linking central Europe to Ukraine and the Black Sea; a
South-Eastern axis linking the EU with the Western Balkans and Turkey and with
the countries of the Southern Caucasus, the Caspian Sea and the Middle East,
including Egypt and the Red Sea; and a South-Western axis linking the EU with
Switzerland and the Maghreb countries. The fifth axis deals with “Motorways of
the Sea”, i.e. efficient maritime transport links between the neighbouring
countries and the EU. In addition, the Guidelines included horizontal measures
to approximate the neighbouring countries’ standards, legislation and policies to
the EU and hence promote interoperability. In its dealings with the
neighbouring countries, the Commission was to follow a two-step approach:
exploratory talks first which, if successful, may later be followed by concrete
recommendations.

134.
A progress report of 2008[295] found that the
exploratory talks with the neighbouring countries were progressing well. There
was a general approval of the approach taken by the EU. Progress in the
co-operation and adoption of the Community acquis had been most advanced in the
Western Balkan countries – mainly due to the fact that these countries are all
actual or potential candidate countries.

135.
In mid-2008, the Commission started negotiations
on a treaty establishing a Transport Community with the Western Balkans. It
aims to better integrate the respective transport systems and to create an
integrated market for land, inland waterway and maritime transport by aligning
the relevant legislation in the Western Balkan countries with EU legislation.
The negotiations are still ongoing.

136.
In aviation, the EU has created a European
Common Aviation Area (ECAA) with the Western Balkan countries as well as with
Norway and Iceland. The ECAA Agreement[296]
has been signed in May 2006. It aims at integrating these countries into the
EU’s internal aviation market. The EU has set itself the target of developing a
wider Common Aviation Area (CAA) by 2010 that covers also other neighbouring
countries from Morocco in the West to Kazakhstan in the East. Some agreements
with third countries have already been signed – notably the Euro-Mediterranean
air transport agreement with Morocco which provides for a high degree of
regulatory convergence and should serve as a blueprint for similar agreements
with other countries in that region.

137.
In 2008, the Commission published a progress
report on the Common Aviation Area with neighbouring countries.[297] It recognised the
progress that had been made but acknowledged that the completion of the wider
CAA will probably be delayed. Moreover, it found that the implementation of the
agreements would require more efforts. Being “mixed agreements”, they have to
be ratified by all EU Member States as well as by the partner countries.
Ratification in some EU Member States is however progressing only slowly.

138.
The CAA is one of altogether three pillars of
the EU’s external aviation policy. The other two pillars are bringing existing
bilateral air service agreements (ASA) concluded between EU Member States and
third countries in line with EU law and negotiating comprehensive air transport
agreements with important third countries.

139.
The need for bringing bilateral ASA in line with
EU law followed directly from the “open skies” judgement of the European Court
of Justice in November 2002.[298]
Up to then, ASA had been governed by bilateral agreements between states. These
bilateral agreements however regularly breached EC law, especially as regards
the principle of non-discrimination. Every EU Member State is required to grant
equal market access for routes to destinations outside the EU to any EU carrier
with an establishment on its territory (so-called “EU designation clause”), not
just to companies owned and controlled by nationals of that Member State.

140.
The existing ASA between the Member States and
third countries had thus to be brought in line with Community law. This could
be done either by bilateral negotiations between each Member State concerned
and its partners, amending each bilateral ASA separately, or the negotiation of
single “horizontal” agreements, with the Commission acting on a mandate of the
EU Member States. To date, over 900 bilateral agreements have been modified
accordingly. Moreover, 45 horizontal agreements have been signed with partner
countries worldwide.

141.
A comprehensive so-called “Open Skies” agreement
has been signed with the USA in 2007. It allows open market access for air
services between all 27 Member States and the US. Some leftovers of this first
agreement, above all in the area of airline ownership and control, have been
addressed in second-stage negotiations which resulted in a draft agreement in
March 2010. A similarly wide-ranging air transport agreement with Canada has
been signed in December 2009. Negotiations with Australia, New Zealand and
Brazil are currently ongoing.

142.
Good external relations in maritime transport
are essential in ensuring the stability of the global seaborne trade system.
The Commission is in regular contact with key shipping and trading partners
around the world and participates in talks in international organisations
related to issues of safety, the protection of the marine environment or labour
standards. Moreover, bilateral working groups with the US, Japan, Russia, China
and Korea meet regularly to discuss issues related to maritime transport
security.

143.
As the world’s leading commercial power, the EU
needs to play a strong role in the adoption of international rules which govern
a large part of international transport. Moreover, the internal transport
market requires an effective and co-ordinated representation towards the
outside world, also to promote and effectively defend European interests and
standards worldwide. It is important for Europe to speak with one voice in
international transport fora. The increasing EU competence in defining also the
external dimension of European transport policy should be better reflected in
the Commission’s role in representing the EU in bodies such as the
International Civil Aviation Organisation (ICAO) in Montreal and the
International Maritime Organisation (IMO) in London. At their meetings, the
Commission has so far merely played the role of observer with the right to
speak. A recommendation to the Council of April 2002 to authorise the
Commission to negotiate with ICAO and with IMO the conditions and arrangements
for the accession of the EU to these organisations[299] has so far been
blocked by the Member States.

144.
In the absence of further action on the mandate
for membership at ICAO, the Commission has taken a more pragmatic approach
along the following three lines: It opened an EU office in Montreal in 2005 to
provide permanent representation of the Commission at ICAO and to develop a
closer co-operation with the UN body. In matters of EU competence, it
co-ordinates the EU position in the Council and on the spot in Montreal.
Moreover, a Memorandum of Co-operation between the EU and ICAO has been
initialled during the 37th ICAO Assembly in autumn 2010. The Memorandum
provides a framework for strengthening the co-operation between both
organisations and should enhance the influence of the EU in ICAO decision making.

7.
Conclusion

145.
Looking back over the last ten years, it is fair
to say that a lot has been achieved and even more has been done to make the
European transport system more efficient, more integrated and more sustainable.
Not all that has been done has so far had a measurable impact. This is mostly
due to the fact that in some cases more time is needed for any impact to become
visible (because a number of measures have only recently been adopted) or to
the fact that, in some other cases, implementation has been insufficient and
slow.

146.
Progress has been slow in areas such as the
opening of the rail market, the creation of the SES or the completion of the
TEN-T priority projects. Moreover, the development, deployment and application
of technological innovations such as intelligent transport systems have also
been rather slow and are in some cases behind schedule (e.g. Galileo). The
internalisation of the external costs of transport is another area where there
has not been much progress to date.

147.
Some objectives have not been fully achieved
because European transport policy had only a limited influence on them (e.g.
decoupling transport growth and GDP growth) or because of the general inertia
of the transport system (e.g. modal shift). But things are generally moving in
the right direction: passenger transport is now growing more slowly than GDP
(in a context of still growing mobility) and the relative fall of rail
transport could be stopped.

148.
While some ambitious targets have not been fully
achieved (e.g. halving the number of road deaths by 2010), significant progress
has been made: transport in the EU has become a lot safer than it was 10 years
ago, despite growing traffic volumes. Transport has also become more secure, in
particular in aviation. Moreover, passengers in air and rail transport now
benefit from new and extended rights, those using ferries or coaches will have
similar rights soon. Proper monitoring and enforcement of the existing rules is
important, in particular when it comes to passenger rights and to social
legislation.

149.
Transport is still producing too many negative
side effects for the environment. The emission of air pollutants could be
reduced significantly, but in many cities, the concentrations are still at
unhealthy levels. Moreover, when it comes to CO2 emissions,
transport is the black sheep in the family as its emissions have almost
continuously increased over the last 20 years while those of other sectors have
been falling. In the light of growing concerns, among others about climate
change, the objective of a (relative) decoupling of the negative effects of
transport from the growth in transport activity, as expressed in the 2006
mid-term review of the White Paper, appears not to be sufficient.

Appendix 3: Reference scenario (2010-2050)

1.
In the EU, transport services contribute 4.6% of
gross value added and account for 4.5% (10.2 million people) of total
employment[300],
[301]. Road and rail
together employ around 60% of all persons in the transport services sector and
provide more than 50% of gross value added. Around two thirds of the people
working in road transport enterprises are active in moving freight around, one
third in moving passengers[302].

2.
Transport is closely interrelated with the rest
of the economy: around 30% of the total output of the transport services sector
is bought by the manufacturing sector and 18% by retail and wholesale trade[303]. By enabling trade,
transport allows competition and thus fosters competitiveness and innovation
and facilitates economic growth.

3.
In formulating the future EU transport policy,
it is necessary to conduct a thorough analysis of possible developments in the
EU transport sector in a “no-policy change” scenario, also called the baseline
or “Reference scenario”. This appendix examines the challenges which Europe’s
transport sector will likely face in the future, covering the economic, social
and environmental dimension. The appendix first presents the Reference scenario
assumptions, followed by a discussion of the main results.

Box 1
- The Reference scenario

The Reference scenario is a projection of developments in absence of
new policies beyond those adopted by March 2010. The transport-specific
policies adopted by March 2010 as well as the 2008 Climate and Energy Package are
included in this scenario[304].

The Reference scenario is a benchmark for evaluating new policy
measures against developments under current trends and policies. It builds on a
modelling framework including PRIMES, TRANSTOOLS, the PRIMES-TREMOVE transport
model, TREMOVE and GEM-E3 models[305].
This framework allows exploring developments in the transport sector from two
different angles:

·
A top-down perspective, which looks at the
relative contribution of transport to economy-wide energy consumption and CO2
emissions using the PRIMES model and employment developments using the GEM-E3
model;

·
A bottom-up perspective, which enables the
analysis of transport-specific issues using TRANSTOOLS, the PRIMES-TREMOVE
transport model and TREMOVE.

1.
Reference scenario assumptions

4.
The Reference scenario builds on assumptions
related to population growth, macro-economic projections and developments in
the oil price, which are presented in the following sections.

1.1.
The demographic challenge

5.
Demographic change is transforming the EU with
inevitable consequences also for the transport sector. In the Reference case,
the population projections draw on the EUROPOP2008 convergence scenario
(EUROpean POPulation Projections, base year 2008) from Eurostat, which is also
the basis for the 2009 Ageing Report (European Economy, April 2009)[306],[307]. The key
drivers for demographic change are: higher life expectancy, low fertility and
inward migration.

1.1.1.
Ageing

6.
The EU-27 population is expected to grow by 0.2%
per year by 2035 and slightly decline afterwards, remaining fairly stable in
number at around 500 million in the next 40 years. Elderly people, aged 65 or
more, would account for 24% of total population by 2020 and 29% by 2050 as
opposed to 17% today.

7.
Around a sixth of EU population has a disability.
More than 20% of elderly people aged over 75 are severely restricted. Ageing
and the extended longevity of people can be expected to lead to increasing
numbers of elderly people with severe disabilities[308].

Source: Eurostat,
EUROPOP2008

Figure 11: Changes in the structure of the
population by main age groups, EU27 (in %)

8.
Age-related public expenditures are projected to
increase by about 4 percentage points of GDP by 2050 due to the higher ratio of
older people which require more public resources for pension payments, health
care and long-term care[309].
As a consequence, through its effect on public finance, ageing will put a
strain on the funds available to finance the construction and maintenance of
transport infrastructure and the provision of public transport.

9.
The provision of transport services with a high
level of perceived security and reliability will gain a prominent role in an
ageing society. Appropriate solutions for users with reduced mobility will also
require increased focus because frailty and disability rise sharply at older
age, especially amongst the 80+ which will be the fastest growing segment of
the population in the decades to come.

1.1.2.
Migration and internal mobility

10.
Migration already plays the predominant role in
population growth today: in many Member States, the size of net migration
determines whether the population still grows or has entered a stage of
decline. Net migration might add 30 million people to the EU population by 2030
and an additional 20 million by 2050[310].

11.
Migrants will further intensify Europe’s ties
with neighbouring regions by creating cultural and economic links with their
country of origin. These links could entail more movement of people and goods.
However, the inward net migration would not be able to sustain the EU
population growth after 2035, due to its assumed decelerating trend.

12.
In 2008, only about 2.3% of the total EU
population (11.3 million EU citizens) were living on the territory of another
EU Member State[311].
Nevertheless, mobility of workers within the Union is expected to increase with
the gradual removal of administrative and legal barriers and further deepening
of the internal market.

1.1.3.
Shortage of skills

13.
Increasing labour force participation rates in
most EU Member States and rising net immigration levels in some can only
moderate the fall in employment caused by the ageing of the population and the
negative population growth after 2035. Overall employment in the EU is
projected to shrink by 12 million by 2050.

14.
The share of transport services in total
employment in the EU is projected to roughly maintain its current levels by
2050[312],
resulting in fewer people working in the sector. With growing transport
activity demand, the lower employment level may negatively affect the workload and
working conditions. A scarcity of labour and skills may arise, further
aggravating the shortage of skilled labour already experienced in some segments
of the transport sector. In absence of innovative alternatives, this may result
in higher transport costs for the society.

1.2.
Macro-economic projections

15.
The macro-economic projections reflect the
recent economic downturn, followed by sustained economic growth resuming after
2010. The medium and long-term growth projections follow the “baseline”
scenario of the 2009 Ageing Report (European Economy, April 2009)[313].

16.
The Reference scenario assumes that the recent
economic crisis has long-lasting effects, leading to a permanent loss in GDP[314]. The recovery from
the crisis is not expected to be sufficiently vigorous to compensate for the
current GDP losses. In this scenario, growth prospects for 2011 and 2012 are
subdued. However, the economic recovery enables higher productivity gains,
leading to somewhat faster growth from 2013 to 2015. After 2015, GDP growth
rates mirror those of the 2009 Ageing Report. Hence the pattern of the
Reference scenario is consistent with the intermediate scenario 2 “sluggish
recovery” presented in the Europe 2020 strategy[315].

17.
The average annual GDP growth rate for the EU-27
has been estimated at only 1.2% for 2000-2010, while the projected rate for
2010-2020 is expected to recover to 2.2%, similar to the historical average
growth rate between 1990 and 2000. In the medium run the higher expected growth
rate is due to the higher productivity growth assumed in Member States that are
catching up. The average annual GDP growth rate in the EU-27 is projected to
fall to 1.6% during 2020-2050 because demographic ageing, with a reduction in
the working-age population, is expected to act as a drag on growth. Over time,
labour productivity will become the only driver of growth in the EU[316]. Nonetheless, there
is considerable uncertainty concerning the medium-term economic outlook.

18.
The recent economic crisis has added to the
challenges regarding the sustainability of public finances. Overall, as an
effect of both the economic crisis and the ageing population, without fiscal
consolidation the gross debt-to-GDP ratio for the EU as a whole could reach
100% as early as 2014 and 140% by 2020[317],[318]. The recent
economic crisis will therefore limit further, in addition to age-related public
expenditures, the funding available for the construction and maintenance of
transport infrastructure and for public transport.

1.3.
Increasing scarcity of fossil fuels

19.
Transport depends heavily on oil and oil
products: for more than 95% of its needs worldwide and 96% in EU-27[319]. At the same time,
more than 60% of the petroleum products used in OECD countries and about half
of those used in non-OECD countries are used as transport fuels[320].

20.
The high oil dependence of the transport sector
can be explained by the high energy density and relatively easy
handling/transportation characteristics of oil products, the low oil prices
compared to available alternatives over the past 20 years and the extensive
oil-based infrastructure and vehicle stock already in place. By contrast, most
alternative fuels require extensive investments in infrastructure and fuel
delivery systems as well as new types of vehicles, which make it difficult for
alternative fuels to compete with oil products.

21.
The high oil dependence of the transport sector
constitutes a risk to a low-cost, uninterrupted and large-scale fuel supply due
to the concentration of proven reserves in politically less stable regions, the
depletion of reserves and growing global demand. This leads to a high
uncertainty surrounding oil price developments. Reserves in the Middle East
alone account for 57% of the world’s proven reserves while the EU merely
contributes 0.5%[321].
Security of supply is particularly important because oil products would still
cover 90% of the EU transport sector's energy needs in 2030 and 89% in 2050 in
a “no-policy change” scenario.

22.
The Reference scenario assumes a relatively high
oil price environment compared with previous projections. The assumptions are
however similar to recent projections by the International Energy Agency (IEA)[322]: From 59 $/barrel in
2005, the oil price is expected to rise to 106 $/barrel in 2030 and to 127
$/barrel in 2050 (in year 2008-dollars)[323],[324]. In this scenario,
total fuel costs for the transport sector would be about 300 bn € higher in
2050 relative to 2010.

23.
However, there is uncertainty related to the oil
price projections due to the timing and pace of economic recovery and the
rebound in oil demand, the investments in oil productive and refining capacity
and the expansion of non-conventional production. Therefore, beyond 2020 there
is a sharp increase in the likelihood of prices exceeding 100$/barrel[325].

Source: Prometheus,
National Technical University of Athens (E3MLab)

Figure 12: Oil price and car ownership projections
in the Reference scenario

24.
Similarly to IEA estimates, the oil price
projections are based on only a moderate increase in the passenger light duty
vehicles ownership in the emerging economies. For example, by 2050 the car
ownership in China is assumed to reach 394 cars per thousand inhabitants,
similar to levels in the EU-15 in the 1990s. The relatively moderate increase
in car ownership could be explained by limits on infrastructure, greater income
disparities and greater urbanisation combined with lower suburbanisation than
in OECD countries[326].
Higher motorisation levels in the emerging economies than assumed for the
projections constitutes an upside risk to the current oil price projections and
thus to the transport cost projections.

1.4.
Technological improvements

25.
Battery costs for plug-in hybrids and electric
vehicles are assumed to remain high by 2050, at about 560-780 €/kWh[327], but 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 go up
due to their lower fuel consumption compared with conventional ICE vehicles.
However, there is high uncertainty related to technological developments.

2.
Reference scenario main results
2.1.
Overall transport developments and accessibility

26.
Total transport activity continues to grow in
line with economic activity in the Reference scenario. Even though a decrease
is visible for 2008-2009 as a result of the recent economic crisis, the
recovery foreseen starting with 2010 is reflected by transport activity
returning to its long-term trends. Road transport is expected to maintain its
dominant role in both passenger and freight transport within the EU. Passenger
transport by rail would grow slightly faster than passenger transport by road,
while the growth rates in road and rail freight transport are expected to be
similar. Air transport would grow significantly and increase its share of
overall transport demand.

27.
Total passenger transport activity is expected
to grow by 34% between 2005 and 2030 in a “no-policy change” scenario,
equivalent to an average growth of 1.2% per year. However, growth is not
distributed proportionally among transport modes, with air transport activity
almost doubling by 2030. The weaker growth in passenger transport compared to
GDP per capita (1.4% per year) is explained by the assumption that passenger
car activity in some EU-15 Members States is close to saturation levels and by
national and EU policies to reduce the transport intensity of the economy.

28.
Rail competes with both road and air, but the
results on its performance differ considerably between the EU-15 and the EU-12.
In the EU-15, given the expected saturation of passenger car demand, a large
share of potential additional demand could be covered by (in most cases
high-speed) rail, at least in the Member States where investments in (high-speed)
rail are foreseen. At the same time, high-speed rail attracts traffic from air
transport. In the EU-12, the competitive situation of rail relative to air and
road is expected to worsen,[328]
resulting in slower growth than the other two main modes. After 2030 the slight
decline in population combined with a slowdown in GDP growth and the saturation
of passenger car demand leads to somewhat lower growth rates in passenger
transport activity.

29.
The various modes are in general expected to
maintain their relative importance at EU level. Passenger cars would represent
almost 70% of total passenger activity in 2030 and 67% in 2050, although this
would correspond to a decrease of 6 percentage points in modal share by 2050
compared to 2005[329].
Air transport on the contrary is expected to increase its share, reaching
almost 15% of total activity in 2050 and consolidating its position as the
second most important passenger mode[330].
The increase in air transport demand is a result of the expected increase in:
the number of trips per person and year and the average distance per trip. Rail
would improve its share moderately, gaining less than 1 percentage point by
2050, up to 8% of passenger transport.

Source:
PRIMES-TREMOVE transport model

Figure 13: Passenger and freight transport
projections (average growth rate per year)

30.
Several factors influencing the freight
transport sector, including the restructuring of logistics systems, the
realignment of supply chains and the rescheduling of product flows, are
expected to change gradually during the period 2005-2050 but without affecting
much the overall trends. The developments in production and consumption
patterns would lead to an increase in the average transport distances and a
larger share of unitized /non-bulk goods.

31.
Total freight transport volumes are expected to
grow by about 38% by 2030, with road and rail growing at comparable rates. The
developments in rail freight are sustained by a slower increase in fuel costs
and the positive impacts of the opening of the rail markets. Road transport
would maintain its dominant role in inland freight transport, contributing 73%
in 2030, followed by rail (with 17%). Both road and rail slightly increase
their shares between 2005 and 2030 to the expense of inland navigation, which is
expected to grow at a lower pace.

32.
The geographic distribution of freight transport
growth is not uniform. In absolute terms, road transport in the EU-15 will
attract most of the growth in demand. However, in relative terms, the transport
volumes in the EU-12 will increase much faster. Growth is expected to be high
for all modes in the new Member States, with road being the fastest growing
one. Inland waterways traffic, especially on the Danube, is also expected to
grow by more than 80% by 2030.

Source: PRIMES-TREMOVE transport model

Note: Bubble size
corresponds to relative GDP growth between 2005 and 2030 (in %)

Figure 14: Growth in passenger and freight transport
activity and GDP growth per Member State (2005-2030)

33.
Beyond 2030, a certain weakening in freight
transport activity is expected relative to 2005-2030. Several factors
contribute to this outcome: weaker growth prospects after 2030, shifts in GDP
composition towards service and information activities[331], shifts in
value-to-weight ratios and limits to distant sourcing and off-shoring.

34.
The international shipping industry carries
about 90% of world trade. In recent years, international maritime activity has
grown significantly, driven in particular by the growth in globalisation.
Maritime trade is expected to continue growing with rising demand for oil,
coal, steel and other primary resources – which will be more distantly sourced.
For example, with the plateauing of iron ore production in Australia, China has
started to source iron ore from Brazil and Africa[332].

35.
The growth projections regarding international
shipping are highly uncertain because they depend heavily on the growth in the
production and consumption of raw materials and manufactured goods, and the
location of these activities. At global level, growth projections vary by up to
300% in 2050 depending on the specific assumptions used. The IEA assumes
slightly more than a doubling of shipping tonne-kilometres between 2005 and
2050[333],
based on growth projections from the International Maritime Organisation.

Source: IEA, 2010
Energy technology perspectives

Figure 15: Trends in maritime transport volumes and
related CO2-equivalent emissions

36.
Almost 90% of the EU external trade is seaborne.
In 2008, Europe accounted for about 15% of the global goods loaded and 24% of
all goods unloaded at ports globally[334].
In the Reference scenario maritime and road freight transport activity are
projected to grow at comparable rates up to 2030. Maritime transport activity
is expected to almost double by 2050 relative to 2005[335].

37.
Recent evidence on agglomeration economies
suggests that economic growth, labour migration and accessibility are closely
interrelated[336].
High accessibility to raw materials, suppliers and markets is positive for the
competitiveness of regions[337].
Accessibility is however a necessary but not a sufficient prerequisite for the
positive economic development of regions.

38.
The current situation in terms of accessibility[338] in the EU suggests
that there is a marked division between central and peripheral areas as regards
their transport connectivity and costs as a result of geography and patterns of
economic activity. Peripheral areas require longer average trips to reach the
rest of the EU using, in most cases, more expensive modes and networks than
those available in central areas. As a result, their average transport costs
are higher.

39.
Fuel costs and congestion levels are expected to
rise significantly by 2030, leading to further divergences in accessibility.
The situation of peripheral areas with a high share of road transport is
expected to worsen as they face higher average transport cost increases than
central areas.

Source: TRANSTOOLS

Figure 16: Change in accessibility between 2005 and
2030 in the Reference scenario

2.2.
Urbanisation and congestion

40.
There are around 5,000 towns with a population
between 5,000 and 50,000 and almost 1,000 cities with a population above 50,000
in the EU. Economic, social and cultural activity is concentrated in these
places[339].
Urbanisation has followed a clear trend in the past decades, which is expected
to continue: the proportion of the EU population residing in urban areas is
expected to increase from 74% in 2009 to about 80% in 2030 and 85% in 2050[340].

41.
Economic activity in the EU is far more
concentrated than the population. In a knowledge-based economy, knowledge
spillovers, which require proximity, become important. Services are also
spatially concentrated because they tend to use less land per employee and
because of external economies[341].
Services already represent about 72% of the EU gross value added and their
share is projected to increase in the Reference scenario to 76% by 2050.
Therefore, proximity of people and activities as well as the shift towards a
knowledge-based and services-oriented economy are major sources of advantages
that will continue to drive urbanisation in the EU.

42.
Urban sprawl is the main challenge for urban
transport, as it brings about a greater need for individual transport modes,
thereby generating congestion, environmental problems and land take for roads
and parking areas. After 2035, due to the projected decline in the European
population, many cities may have to cope with the problems of low-density
settlements[342].

43.
Transport demand and modal choice differ widely
between European cities, and depend to a large extent on urban design and
infrastructure[343]
(i.e. the location of facilities necessary on a daily basis and their
accessibility by different transport modes influences the travel patterns).
However, other factors such as income, family size and structure, employment,
speed, culture and behaviour also affect transport demand[344].

Source: EEA (2010)
based on Urban Audit database (Eurostat, 2010).

Figure 17: Proportion of cycle trips to work in a
selection of European cities, 2004

44.
At EU level, urban transport is responsible for
about 23% of total CO2 emissions from transport[345],[346]. About 70% of
the CO2 emissions in urban transport come from passenger cars,
followed by goods transport vehicles which provide another 27%. The Reference
scenario shows diverging trends for passenger and freight CO2
emissions at urban level: while the emissions from passenger transport decrease
by about 22% by 2050, mainly due to the Regulation setting emission performance
standards for new passenger cars[347],
CO2 emissions from road freight transport would increase by some
16%. Overall, urban transport CO2 emissions would shrink by about 9%
by 2030 and another 3% between 2030 and 2050.

45.
An important share of EU’s urban population is
exposed to air pollution concentration exceeding the EU air quality limits.
Sensitive groups, including people with respiratory diseases or heart
conditions and older adults suffer from air pollutants even at moderate
concentrations. In many European urban studies air pollution, especially
particulate matter and O3, has been associated with increases in
morbidity and mortality. Transport is a main source of PM10 and NOx
emissions (which contributes to ozone creation) together with industry,
commercial and residential sources).[348]
In the Reference scenario, the NOx and particulate matter emissions attributed
to urban transport would decrease by about 60% by 2030 and roughly stabilize
afterwards.

Table 18: The 10 most polluted cities in 2008 for
daily PM10, O3 concentrations and NO2 annual
mean concentration in the urban area

Source: EEA and AirBase, 2010

46.
About half of the citizens in the EU-15 are
estimated to live in areas which do not ensure acoustical comfort for
residents: 40% of the population is exposed to road traffic noise exceeding 55
dB(A) during daytime, and 20% to levels exceeding 65 dB(A). At night, more than
30% are exposed to sound levels that disturb sleep (>55 dB(A)). The WHO
Night Noise Guidelines for Europe[349]
describe levels above 55 dB Lnight as ‘increasingly dangerous to public health.
However, for the primary prevention of sub-clinical adverse health effects
related to night noise, the guidelines recommend that the population should not
be exposed to night noise levels greater than 40 dB Lnight outside. This can
thus be considered a health-based limit. The target of 55 dB Lnight outside is
not a health-based limit, being equivalent to the lowest observed adverse
effect level, and should be considered only as an interim target for situations
where the achievement of the guidelines is not feasible in the short run.
Existing studies show that noise exposure increases the risk for high blood
pressure and heart attacks. Surveys also show that (environmental) noise is a
relevant reason for people moving out of cities into the suburban area (e.g.
for every third household moving out of Cologne, noise and air pollution in the
city was a crucial reason)[350].
In the Reference scenario, increasing traffic volumes in absence of additional
policies may exacerbate the existing problems[351].

47.
Congestion that is prevalent in agglomerations
and in their access routes is the source of large costs in terms of delays and
higher fuel consumption. Denser cities are better served by collective modes of
transport but the availability of land and public acceptability to construct
new infrastructures for public or alternative means of transport remains a
great challenge. Urban congestion also negatively impacts on inter-urban and
cross-border travel because most freight and passenger transport starts or ends
in urban areas.

48.
High congestion levels are expected to seriously
affect road transport in several Member States by 2030 in the absence of
effective countervailing measures such as road pricing. While urban congestion
will mainly depend on car ownership levels, urban sprawl and the availability
of public transport alternatives, congestion on the inter-urban network will be
the result of growing freight demand across specific corridors at their points
of intersection with links serving local traffic.

49.
The largest part of congestion will be
concentrated near densely populated zones with high economic activity such as
Belgium and the Netherlands – to a certain extent as a result of port and
transhipment operations – and in large parts of Germany, the United Kingdom and
northern Italy. Congestion patterns differ significantly among Member States
though, since their hourly, daily and seasonal variation depends on local
conditions.

50.
Estimating the costs of congestion is not
straightforward, because it occurs mostly during certain times of the day,
often caused by specific bottlenecks in the network. In the Reference scenario,
congestion costs are projected to increase by about 50% by 2050, to nearly €
200 billion annually.

Source: TRANSTOOLS

Figure 18: Congestion levels for inter-urban road
traffic in 2030

2.3.
Environmental impacts and other externalities
2.3.1.
CO2 emissions

51.
Transport accounts for over 30% of final energy
consumption and about one fourth of CO2 emissions[352],[353]. In the
Reference scenario, the final energy demand of transport is projected to
increase by 5% by 2030 and an additional 1% by 2050, driven mainly by aviation
and road freight transport. By contrast, the energy use of passenger cars would
drop by 11% between 2005 and 2030 due to the implementation of the Regulation
setting emission performance standards for new passenger cars[354].

52.
CO2 emissions from transport are
projected to be 1% below their 2005 level by 2030 and roughly stabilise
afterwards. This outcome is sustained by the implementation of the Regulation
setting emission performance standards for new passenger cars, the penetration
of biofuels in road transport and the further electrification of rail.
Renewable energy sources would cover 10% of the energy needs of transport by
2020, reflecting the implementation of the Renewables Directive[355]. Their share would
gradually increase to 13% by 2050[356].
However, the pace of the electrification in the sector is projected to remain
slow in the Reference scenario: electric propulsion in road transport would not
make significant inroads by 2050[357].

Source: PRIMES and projections based on TRANSTOOLS for
maritime

Figure 19: Final
energy consumption and CO2 emissions projections[358]

53.
The share of CO2 emissions from
transport would continue increasing, to 38% of the total by 2030 and almost 50%
by 2050. This is due to a relatively lower reduction of CO2
emissions from transport compared to other sectors such as power generation
over the projection period. Overall, CO2 emissions from transport
would still be 31% higher than their 1990 level by 2030 and 35% higher by 2050,
owing to the fast rise in the transport emissions during the 1990s. Aviation
and maritime transport would contribute an increasing share of emissions over
time.

54.
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 has been evaluated how much the projected transport emissions[359] will
increase/decrease (in percentage terms or Mt of CO2) between 2005
and 2050 due to transport activity growth, improvements in energy intensity and
carbon intensity[360],[361].

55.
Overall, CO2 emissions from passenger
transport decrease by 8% (60 Mt of CO2) between 2005 and 2050 in the
Reference scenario.

56.
Transport activity growth results in a 47% (345
Mt of CO2) increase in passenger transport emissions, with demand
for interurban and intercontinental transport being responsible for most of
these additional emissions.

57.
Improved energy intensity reduces passenger
transport emissions by 46% (342 Mt of CO2), compensating the
expansion of emissions due to transport activity growth. Efficiency
improvements are triggered by the implementation of the Regulation setting
emission performance standards for new passenger cars and by efficiency gains
in aviation. For rail passenger transport, efficiency gains play a limited role
due to the uptake of high-speed rail on larger scale.

58.
The improvement in carbon intensity through the
use of less GHG\_intensive fuels has a more limited impact on passenger
transport emissions, with CO2 emissions decreasing by 9% on a
tank-to-wheel basis (63 Mt of CO2) between 2005 and 2050. The
penetration of renewables in road transport (mostly biofuels) contributes to a
large extent to the carbon intensity gains on a tank-to-wheel basis, followed
by rail transport electrification. However, the GHG emissions for the
production of biofuels are not included in this analysis.

59.
Summing up, the 8% decrease in CO2
emissions from passenger transport is due to transport activity growth (+47%),
improvements in energy intensity (-46%) and in carbon intensity (-9%). The
trend for the three components and their contribution to emissions is different
in the various transport modes. 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
GHG intensive fuels contributes to a reduction of emissions for road and rail
passenger transport with no effect on aviation in the Reference scenario.

60.
For freight transport, the 18% (88 Mt of CO2)
increase in CO2 emissions between 2005 and 2050 is the result of
transport activity growth (+55%, equivalent to 269 Mt of CO2),
improvements in energy intensity (-28%, equivalent to 136 Mt of CO2)
and in carbon intensity (-9%, equivalent to 45 Mt of CO2).

61.
The trends in projected emissions of different
freight transport modes are also diverging. On one hand, the efficiency gains
and the uptake of alternative fuels for road transport and the efficiency gains
in maritime transport are not sufficient to offset the effects of activity
growth, resulting in growing emissions. In the Reference scenario the pace in
the electrification of the transport sector is slow: electric propulsion
vehicles do not make significant inroads by 2050. On the other hand, the
electrification in rail has positive effects on emissions, despite the growth
in traffic volumes.

Source:
PRIMES-TREMOVE transport model

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.

Figure 20: Decomposition of CO2
emissions in the Reference scenario (2005-2050)

2.3.2.
Air pollution and other externalities

62.
Emissions of air pollutants result in risks to
human health and the natural environment. For example, exposure to particulate
matter is linked with respiratory problems such as asthma, impaired lung
development and lower lung function in children, acute and chronic
cardiovascular effects, reduced birth weight and premature death[362],[363], while
emissions of nitrogen oxides (NOx) contribute to acidification and
eutrophication of ecosystems as well as to the formation of ground level ozone.
There have also been numerous articles showing the linkages between air
pollutants and climate change and how short-term climate change mitigation can
be achieved by tackling some of the most potent air pollutants: ground level
ozone (including methane as an important precursor) and particulate matter
(including “black carbon”) are particularly relevant.

63.
Air quality standards and targets exist in the
EU for a range of pollutants, with the aim of protecting human health. However,
the limits and targets for particulate matter (РМ10),
nitrogen dioxide (NO2) and ozone (O3) are or are expected
to be widely exceeded. In 2008, 296 (out of 821) zones in 21 Member States did
not comply with daily limits for particulate matter (РМ10)
and most of the Member States have made use of the possibility to notify a time
extension for compliance, as provided in the Directive 2008/50/EC on ambient
air quality[364].
A similar situation is expected to emerge for NO2, where 188 (out of
822) zones have reported exceedances of the legally binding annual limit value
laid down in that Directive.

64.
About 12 Member States are also expected to
exceed their limit under Directive 2001/81/EC on national emission ceilings for
certain atmospheric pollutants, which applies from 2010[365], some by as much as
50%[366].

65.
Road transport contributes significantly to the
difficulties many Member States have in attaining their NOx ceilings, through
higher than anticipated emissions. Around 40% of total NOx emissions in EU-27
come from road transport, and their reduction has not met the original
expectations although overall emissions have decreased compared to 1990. The
main reasons were the higher than expected growth in road transport activity
and the fact that those vehicle emission standards have not always delivered
the foreseen level of NOx reductions (i.e. higher real world emissions than the
limits in the type approval)[367].
In the Reference scenario, the implementation of the current vehicle emission
standards (up until Euro VI) is expected to lead to a further decline in the
emissions of air pollutants by 2030, and a stabilisation afterwards assuming a
full fleet renewal. However, the expected magnitude of the decline may be
reduced by higher real world emissions and slower turn-over rates of the
vehicle fleet than expected in particular in the period up until 2020.

Source:
PRIMES-TREMOVE transport model

Figure 21: Evolution nitrogen oxides and particulate
matter and external costs in the Reference scenario

66.
Transport infrastructure, along with energy
infrastructure, and land use changes such as uptake by urban sprawl and
agricultural intensification contributes to the fragmentation of ecosystems.
The EU is the most fragmented continent in the world: nearly 30% of land in the
EU is moderately, highly or very highly fragmented. This has a significant
impact on habitats and ecosystems. If ecosystems become too small or isolated,
they might not deliver their services to people anymore, such as water and air
purification and flood water retention, climate change adaptation and
mitigation, nutrient cycling, tourist values etc.[368] This depletion of ecosystems is exacerbated by climate change
impacts. Fragmentation and land consumption by transport infrastructure also
leads to the loss of significant areas of fertile soil and useful agricultural
land due to soil sealing.

Figure 22: Fragmentation as percentage of total EU terrestrial
area shows that nearly 30 % of EU land is moderately-high to very high, mostly due to urban
sprawl and infrastructure development[369]

67.
In the Reference scenario external costs of
transport will continue increasing. The increase in traffic would lead to a roughly
20 bn € increase of noise-related external costs by 2050 and external cost of
accidents would be about 60 bn € higher[370]. The external cost of accidents associated with urban transport
would increase by some 40%. Only the external costs related to air pollutants
would decrease by 60% by 2050 assuming a full implementation of current EURO
standards.

2.4.
Global trends affecting the European transport
sector

68.
Global GDP is projected to increase more than
threefold between 2006 and 2050[371].
Faster economic growth can be expected in industrialising and developing
countries than in the developed economies. This higher growth will lead to an
increased importance in world trade of emerging economies such as China, India
and Brazil. The tangible result will be a change in trade flows and volumes.

69.
A doubling of global traffic is projected for
both motorised passenger travel and for surface freight transport by 2050,
mainly driven by the developing economies. International shipping activity
would follow a similar trend[372].

70.
Global maritime transport will be influenced by
the increasing size of vessels, by the expansion of the Panama Canal
(completion foreseen in 2014) and by the development of new transhipment hubs,
e.g. in North Africa. Projections for aviation show an increase by a factor of
four for passenger and freight transport between 2005 and 2050[373]. While the biggest
growth in both air and maritime traffic will occur outside Europe, the EU’s
main gateways for international traffic – airports and ports – will be seriously
affected, and increasingly short of capacity. Traffic on the hinterland
connections to these entry points will also be affected, leading to possible
additional congestion and pollution. In addition, the possible melting of the
Arctic permafrost during the summer may temporarily open up new routes and
possibilities.

Appendix 4: Inventory of policy measures
relevant for the transport sector included in the 2050 Reference scenario

|| Measures || || How the measure is reflected in PRIMES and TRANSTOOLS

1 || Biofuels directive || Directive 2003/30/EC || Support to biofuels is reflected in the model

2 || RES directive || Directive 2009/28/EC || 10% target for RES in transport is achieved for EU27; sustainability criteria for biomass and biofuels are respected

3 || GHG Effort Sharing Decision || Decision 406/2009/EC || National targets for non-ETS sectors are achieved in 2020, taking full account of the flexibility provisions such as transfers between Member States. After 2020, stability of the provided policy impulse but no strengthening of targets is assumed.

4 || EU ETS directive || Directive 2009/29/EC || Inclusion of aviation in EU ETS starting with 2012

5 || Fuel Quality Directive || Directive 2009/30/EC || Modelling parameters reflect the Directive, taking into account the uncertainty related to the scope of the Directive addressing also parts of the energy chain outside the area of PRIMES modelling (e.g. oil production outside EU).

6 || Energy Taxation Directive || Directive 2003/96/EC || Tax rates (EU minimal rates or higher national ones) are kept constant in real term. The modelling reflects the practice of Member States to increase tax rates above the minimum rate due to i.a. inflation.

7 || Regulation on CO2 from cars || Regulation No 443/2009 || Limits on emissions from new cars: 135 gCO2/km in 2015, 115 in 2020, 95 in 2025 – in test cycle

8 || Regulation on CO2 from vans[374] || Part of the Integrated Approach to reduce CO2 emissions from cars and light commercial vehicles. || Limits on emissions from new LDV: 181 gCO2/km in 2012, 175 in 2016, 135 in 2025 – in test cycle

9 || Labelling regulation for tyres || Regulation No 1222/2009 || Decrease of perceived costs by consumers for labelling (which reflects transparency and the effectiveness of price signals for consumer decisions)

10 || Regulation EURO 5 and 6 || Regulation No 715/2007 || Emissions limits introduced for new cars and light commercial vehicles

11 || Regulation Euro VI for heavy duty vehicles || Regulation No 595/2009 || Emissions limits introduced for new heavy duty vehicles

12 || Directive on national emissions’ ceilings for certain pollutants || Directive 2001/81/EC || Checked with RAINS/GAINS modelling regarding classical pollutants (SO2, NOx)

13 || Implementation of MARPOL Convention ANNEX VI || 2008 amendments - revised Annex VI || Amendment of Annex VI of the MARPOL Convention reduce sulphur content in marine fuels which is reflected in the model by a change in refineries output

|| Additional measures implemented in TRANSTOOLS || || How the measure is reflected in TRANSTOOLS

14 || Eurovignette Directive on road infrastructure charging || Directive 2006/38/EC || No additional link based charges. Assumed current level of internalisation through fuel taxes and existing infrastructure charges (tolls or vignettes) where applicable

15 || TEN-T guidelines || Decision 884/2004/EC || Priority projects introduced in TRANSTOOLS network according to expected completion date

16 || Directive on the Promotion of Clean and Energy Efficient Road Transport Vehicles || Directive 2009/33/EC || Emission factors, impact on costs per km

17 || Emission standards for diesel trains (UIC Stage IIIA) || || Emission factors, impact on costs per km

18 || ICAO Chapters 3 (emissions) || || NOx and CO emission standards for airplanes built after 2007. Updated emission factors from EXTREMIS database (http://www.ex-tremis.eu) applied on TRANSTOOLS demand projections

19 || Single European Sky II || COM(2008) 389 final || Decrease in fuel consumption, emissions and ticket prices

20 || Directive on inland transport of dangerous goods || Directive 2008/68/EC || No significant impact

21 || Third railway package || Directive 2007/58/EC || Assumed discount on user prices and decrease in rail passenger costs after 2010

22 || Port state control Directive || Directive 2009/16/EC || Decrease in transhipment costs

23 || Regulation on common rules for access to the international road haulage market || Regulation No 1072/2009 || More efficient international road freight transport (reduced empty returns) reflected through a decrease in international transport costs

24 || Directive concerning social legislation relating to road transport activities || Directive 2009/5/EC || Exclusion of self-employed drivers from the working time directive, simplification of the tachograph rules, use of targeted electronic controls; reflected through a decrease in inter-urban road transport

Appendix 5: Short description of the models used in
the Impact Assessment

GEM-E3

1.
The GEM-E3 (World and Europe) model is an
applied general equilibrium model, simultaneously representing World regions
and European countries, linked through endogenous bilateral trade flows and
environmental flows. The European model is including the EU countries, the
Accession Countries and Switzerland. The world model version includes 18
regions among which a grouping of European Union states. 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 is
explicitly represented in the production function, either exogenous or
endogenous, depending on R&D expenditure by private and public sector and
taking into account spillovers effects. The current GEM-E3 version has been
updated to the GTAP7 database (base year 2004).

TRANSTOOLS model

2.
TRANSTOOLS is a European Transport Network model
covering all modes of transport for passenger and freight. The model is used to
assess the level of congestion and of accessibility and the impact of (the
pricing of) transport infrastructure. TRANSTOOLS estimates transport costs
generated by policy measures and simulates impacts on demand for transport
services by mode, on network links and corridors, for origin-destination pairs,
commodity type, on emissions and other externalities, regional GDP and welfare.

3.
TRANSTOOLS estimates transport demand for each
NUTS 3 zone and distributes it on the networks of the various modes available.
The main steps of the approach include the estimation of: the trip generation,
the trip distribution, the mode choice and the route assignment.

4.
The trip generation represents the transport
demand that each zone generates or attracts and depends on the socio-economic
characteristics of each zone, as well as on the economic and industrial
structure. The trip distribution reflects the demand for transport between each
pair of zones in the system and depends on trade and travel patterns, as well
as on the availability and costs of transport between the zones. The mode
choice provides the part of the demand for each pair of zones that will use
each available mode and depends on the relative costs, speed and capacities of
the various alternatives. The route assignment gives within each mode, the
links of the network where transport demand will be distributed and depends on
costs, speed and capacities of the available route options.

TREMOVE model

5.
TREMOVE is a policy assessment model for the
emissions and environmental impact of transport. The model is used to estimate
the effects of various policy measures on transport demand, the resulting modal
shifts, the vehicle stock renewal, the emissions of air pollutants and the
effects on welfare. The model can be applied for the analysis of different
policies such as road pricing, public transport pricing, emission standards,
subsidies for cleaner cars, etc. TREMOVE models both passenger and freight
transport.

6.
The model consists of 31 parallel country
models, each of them consisting of three inter-linked modules: a transport
demand module, a vehicle turnover module and an emission and fuel consumption
module. The transport demand module describes transport flows and the users’
decision-making process in terms of modal choice. The vehicle stock turnover
module describes how changes in demand for transport or changes in vehicle
price structure influence the share in the stock by age and vehicle type. The
fuel consumption and emissions module calculates fuel consumption and emissions
(greenhouse gas and air pollutants emissions), based on the structure of the
vehicle stock, the number of km driven by each vehicle type, and the driving
conditions using the COPERT methodology. In addition to the three core modules,
the TREMOVE model includes a well-to-tank emissions and a welfare cost module.
The well-to-tank emissions module calculates the emissions during the
production of fuels and electricity. The time horizon of the model is 2030.

PRIMES model[375]

7.
PRIMES simulates the response of energy
consumers and the energy supply systems to different pathways of economic
development and exogenous constraints. It is a modelling system that simulates
a market equilibrium solution in the European Union and its member states. The
model determines the equilibrium by finding the prices of each energy form such
that the quantity producers find best to supply match the quantity consumers
wish to use. The equilibrium is static (within each time period) but repeated
in a time-forward path, under dynamic relationships. The model is behavioural
but also represent in an explicit and detailed way the available energy demand
and supply technologies and pollution abatement technologies. The system reflects
considerations about market economics, industry structure, energy
/environmental policies and regulation. These are conceived so as to influence
market behaviour of energy system agents. The modular structure of PRIMES
reflects a distribution of decision making among agents that decide
individually about their supply, demand, combined supply and demand, and
prices. The market integrating part of PRIMES then simulates market clearing.

PRIMES-TREMOVE transport model[376]

8.
The PRIMES-TREMOVE transport model projects the
evolution of demand for passengers and freight transport by transport mode and
transport mean, based on economic, utility and technology choices of
transportation consumers. Operation costs, investment costs, emission costs,
taxes and other public policies, utility and congestion influence the choice of
transportation modes and means. The model further projects the derived fuel
consumption and emissions of pollutants.

9.
It is essentially a dynamic system of
multi-agent choices under several constraints, which are not necessarily
binding simultaneously. Various policies and energy and environment related
topics may be studied including:

·
Pricing policies, e.g. charges, subsidies and
taxes

·
Technology diffusion

·
Development of new transport fuels (e.g.
bio-fuels, hydrogen etc)

· Climate change policies (e.g. carbon tax, ETS)

10.
The model can either be used as a stand-alone
model or may be coupled with the rest of the PRIMES energy systems model.
Linkage with PRIMES core model and the biomass supply model allow for
consistency in scenario building and well to wheel analysis. The model covers
EU27 by Member State with a 2050 time horizon.

Model structure

11.
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.

12.
The transport demand module simulates decisions
regarding allocation of transport activity to the various modes, identifying
transport service by mode of transport for both individuals and firms. The
decision process is simulated as a utility maximisation problem in the case of
the individual private passenger and as a cost minimisation problem in the case
of firms.

13.
The technology choice module determines the
vehicle technologies (generally the transportation means) that will be used in
order to satisfy each modal transport demand. It also enables the computation
of energy consumption and emissions of pollutants from the use of the
transportation means. The choice of technology is generally the result of a
discrete choice problem in which consideration of both cost and utility is
taken into account.

14.
Both modules are dynamic over time, simulate
capital turnover with possibility of premature replacement of equipment and
keep track of equipment technology vintages.

15.
The simulation of the transport market is
formulated as a simplified Equilibrium Problem with Equilibrium Constraints
(EPEC) transformed into a single Mixed Complementarity Problem (MCP). The
transport demand module and the technology choice module are solved
simultaneously in one single mathematical model, using the MCP algorithm PATH.
As the model is a single complementarity problem, it can handle overall
constraints, for example to reflect environmental restrictions, the dual
variable of which influence the endogenous choices of individuals and firms
simulated by the model.

The transport demand module

16.
The transport demand module simulates the
decision process of the representative agent regarding the choice of transport
activity. There is a distinction between private passenger transport and
transport related to direct economic activity, such as transportation of
commercial products and business trips. This distinction is triggered by the
differences in the decision process between the individual passenger deciding
on his/her own way of transport and the decision of a firm regarding budget
allocation on logistics expenditures.

17.
In passenger transport the representative
individual, i.e. the passenger, is seeking to maximise a general utility
function subject to a budget constraint that represents the total income. The
cardinal expression of the individual’s utility is assumed to be determined by
modal transport cost, a individual’s income and expenditure characteristics as
well as historical behavioural features. The decision process of the private
passenger is represented by a nested utility CES function[377].

Figure 23: Private
passenger primary decision tree

Figure 24: Private passenger secondary decision tree
on urban transport

Figure 25: Private passenger secondary decision
tree on non-urban transport

18.
Initially the individual is deciding between the
modal transport choices, i.e. whether to make a trip or not, the geographical
and temporal identification of the trip etc. Each branch of the initial
decision tree is further subdivided into several branches representing various
modal choices. Two general decision processes of this type are identified
depending on the geographical identity of the initial modal choice, namely
urban and non-urban decision trees. The result of this secondary decision
process is a more detailed modal identification of the agent’s decision up to
the level of the choice of general vehicle (mean) category.

19.
In a similar way the representative firm seeks
to minimise total cost of satisfying its transport needs either regarding
transportation of goods or business trips. The overall decision process of the
firm is modelled as a nested CES cost function. The secondary decision process
regarding the modal choice of business trips is similar to the decision process
of the private passenger therefore they are not shown separately. As regards
freight transport a representative secondary decision process is represented
including all relevant modes of freight transportation.

Figure 26: Firm’s primary decision tree

Figure 27: Firm’s secondary decision tree on non-urban
freight transport

Figure 28: Firm’s secondary decision tree on urban
freight transport

Generalised Price of
Transportation

20.
The decision of the each individual or firm
depends on preference characteristics, described by the elasticities of the CES
functions, as well as on the endogenously defined “generalised price of
transportation”, which differs among the various modes of transportation.

21.
In the case of private transportation, (i.e.
personal cars and motorcycles for individual passenger and business trips as
well as road vehicles for freight transport) the generalised price of
transportation corresponds to total perceived costs of satisfying
transportation demand at the level of each transport mode. These costs depend
on actual cost of transportation as well as on the cost of time (travel time
and congestion). Actual transport cost consists of:

·
the capital cost of the vehicles

·
fixed cost that include annual maintenance,
insurance, registration, etc.

·
cost of fuel

·
taxes and subsidies

22.
Given that the endogenously defined vehicle
stock satisfies the relevant modal transport demand (i.e. private cars satisfy
all geographical and temporal modes of road transport) based on fixed annual
utilisation indices, the aforementioned costs refer to the effective vehicle
technology mix that serves each transport mode, which is endogenously
determined by the model.

23.
In the case of public transport (both for
private passengers and for firms) the generalised price of transportation
currently represents the sum of the average operational cost of the
representative public transportation supplying firm and the cost of time.
Average cost pricing of public transportation services is chosen because of the
increasing returns to scale prevailing in this sector and because often public
transportation forms incur budget deficits. Average operational costs include
the cost of the purchase and maintenance of the transport vehicle fleet, fuel
cost, labour, taxation etc. Public transportation ticket prices are determined
by using a Ramsey-Boiteux formulation which defines ticket prices by consumer
type so as to recover total cost of the transportation service.

24.
The technology choice model uses data reflecting
the technical-economic characteristics of various vehicle technology and
transportation means. The technology mix is endogenous to the model; hence the
generalised price of transportation results from an interaction between the
demand and the technology choice modules.

25.
Cost of time represents the value of travel time
which differs between the individual passenger and the firm, and depends on
temporally and geographically differences between transport modes. Travelling
time for non-road transport is exogenously defined taking into account average
mileage and speed. In the case of road transport a congestion function is used
in order to calculate travelling time.

The technology
choice module

26.
The technology choice model defines the
structure of the vehicle fleet that is optimum to deliver the transportation
service as demanded for by the transport demand module. The technology mix and
its operation is determined and so the model computes actual transport costs,
energy consumption and pollutant emissions. The technology choice model is very
detailed for road and rail transport, and less detailed for inland navigation
and air transport.

Road transport

27.
For road transport the actual vehicle stock is
split into several vehicle types, and categories including passenger cars,
motorcycles and mopeds, busses and coaches, light and heavy duty trucks.
Different vehicle technologies and vintages depending on consumption, fuel type
and emission standards are identified.

28.
In general, the choice of new vehicles is
simulated using a nested logit utility function. The optimal share of each
vehicle type for new registration depends on total lifetime cost of vehicle,
vehicles characteristics (e.g. acceleration, safety, speed, luxury etc.),
preferences indicators and expected operation costs. Turnover of vehicle fleet
is represented as a detailed vintage model with premature scrapping. The model
takes into account existing fleet structure and exogenously defined scrapping
rates of vehicles based on calibrated Weibull distributions, expressing the
probability that a vehicle of certain type is still in service at a certain
point in time.

29.
The choice about whether to satisfy activity
with existing or with new vehicles is not exogenously predetermined but is
endogenous depending on relative costs and utilities.

Rail transport

30.
A similar discrete choice methodology is
formulated for determining the structure of the train fleet, which
distinguishes between metro, tram, urban and non-urban trains. Choice of new
types of rail transport is simulated through a logistic share function that
depends mainly on total operational costs, taken into account capital costs,
fuel consumption, emissions, etc. The pre-existing rail infrastructure is taken
into account through an aggregate indicator and influences the degree of
renewal of the train fleet.

Energy consumption
and emissions

31.
Consumption of transport fuels is endogenously
determined by the model and is subject to environmental policy constraints.

32.
For road transport, fuel consumption and
emissions of non-CO2 pollutants are calculated by using the COPERT
methodology. The computation covers a wide range of pollutants including NOx,
CO, PM, CH4, Non-Methane VOCs, N2O, NH3, PAHs
(Polycyclic Aromatic Hydrocarbons), POPs (Persistent Organic Pollutants),
Dioxins, Furans and heavy metals.

33.
The COPERT methodology enables calculation of
fuel consumption of road vehicles as a function of their speed, which is
determined as function of the endogenously determined travelling time and the
average mileage of trips per type of road transport mode. The complete COPERT
methodology has been integrated into the model providing a strong analytical
tool for the calculation of the consumption of various fuels and consequent
calculations of costs. For the technology choices not included in COPERT other
data sources have been used such as results of the SAPIENTIA project.

34.
For non road transport modes, i.e. rail, inland
navigation and air transport, average mileage and specific fuel consumption
factors are used for calculating fuel consumption and CO2 emissions.

Source of Data

35.
Historical data on vehicle stock for road and
rail transport are taken from the TREMOVE database. Vehicle stock data for road
transport have been updated in the framework of the FLEETS program. Data on
vehicle costs, occupancy factors and average mileages are taken from the
TREMOVE and SAPIENTIA databases. All other statistics are taken from EUROSTAT
and DG MOVE publications.

Table 19: Classifications
in the PRIMES-TREMOVE transport model (road and rail)

Vehicle Category || Vehicle Type || Vehicle Technology

Small cars (<1.4 l) || Gasoline || Pre ECE, ECE, Conventional, Euro I-V

Pure Bio-ethanol || Pure Bio-ethanol technology

Hybrid Gasoline || Euro III-IV

Plug-in hybrid Gasoline || Plug-in hybrid technology

Diesel || Pre ECE, ECE, Conventional, Euro I-V

Pure Bio-diesel || Pure Bio-diesel technology

Hybrid Diesel || Euro III-IV

Plug-in hybrid Diesel || Plug-in hybrid technology

LPG || Conventional, Euro I-V

CNG || CNG thermal, CNG fuel cell

Hydrogen || Hydrogen thermal, Hydrogen fuel cell

Medium Cars (1.4 - 2.0 l) || Gasoline || Pre ECE, ECE, Conventional, Euro I-V

Pure Bio-ethanol || Pure Bio-ethanol technology

Hybrid Gasoline || Euro III-IV

Plug-in hybrid Gasoline || Plug-in hybrid technology

Diesel || Pre ECE, ECE, Conventional, Euro I-V

Pure Bio-diesel || Pure Bio-diesel technology

Hybrid Diesel || Euro III-IV

Plug-in hybrid Diesel || Plug-in hybrid technology

LPG || Conventional, Euro I-V

CNG || CNG thermal, CNG fuel cell

Hydrogen || Hydrogen thermal, Hydrogen fuel cell

Big Cars (>2.0 l) || Gasoline || Pre ECE, ECE, Conventional, Euro I-V

Pure Bio-ethanol || Pure Bio-ethanol technology

Hybrid Gasoline || Euro III-IV

Plug-in hybrid Gasoline || Plug-in hybrid technology

Diesel || Pre ECE, ECE, Conventional, Euro I-V

Pure Bio-diesel || Pure Bio-diesel technology

Hybrid Diesel || Euro III-IV

Plug-in hybrid Diesel || Plug-in hybrid technology

LPG || Conventional, Euro I-V

CNG || CNG thermal, CNG fuel cell

Hydrogen || Hydrogen thermal, Hydrogen fuel cell

Motorcycles || Capacity <50cc || Conventional, Euro I-V

Capacity 50-250 cc

Capacity 250-750 cc

Capacity 750cc

Mopeds || Moped Conventional || Conventional, Euro I-III

Light Duty Vehicles (<3.5 ton) || Gasoline || Conventional, Euro I-V

Diesel || Conventional, Euro I-V

CNG || CNG thermal, CNG fuel cell

Hydrogen || Hydrogen thermal, Hydrogen fuel cell

Heavy Duty Trucks (> 3.5 ton) || Capacity 3.5-7.5 ton || Conventional, Euro I-V

Capacity 7.5-16 ton

Capacity 16-32 ton

Capacity >32 ton

Busses-Coaches || Diesel || Conventional, Euro I-V

CNG || CNG thermal

Hydrogen || Hydrogen thermal

Metro || Metro Type || Metro Technology

Tram || Tram Type || Tram Technology

Passenger Train || Locomotive || Locomotive diesel

Locomotive electric

Railcar || Railcar diesel

Railcar electric

High speed train type || High speed train technology

Freight Train || Locomotive || Locomotive diesel

Locomotive electric

Railcar || Railcar diesel

Railcar electric

Table 20: Energy carriers in PRIMES-TREMOVE transport model

Energy Carriers for Transport

Gasoline || Diesel || LPG

CNG || Bio-ethanol || Bio-diesel (RME, Fischer Tropsch,etc)

Bio-methanol || Hydrogen || Electricity

Appendix
6: Detailed analysis of the lack of efficiency of today’s EU mobility system

1.
The achievement of a single, interconnected and
efficient transport system has been delayed by a number of remaining regulatory
and market failures which hamper the competitiveness of multimodal transport.

Market access is still restricted

2.
Transport infrastructure has been historically
designed to serve national rather than European goals and cross-border links
constitute bottlenecks that are likely to become increasingly costly as the EU
economy continues integrating. Cross-border transport is additionally hindered
by protectionist regulations, which refuse or restrict access to national
markets by foreign operators.

3.
Some transport market segments are not yet fully
and de facto liberalised. This is the case for instance for the port services
market (such as technical-nautical or cargo handling) which typically remain in
the hands of local monopolies and for the rail domestic passenger transport,
the access to which is restricted to national operators in most Member States
and in practice to incumbent companies. In road transport, access to the
national markets of Member States by hauliers established in another Member
State (‘cabotage’) may only be carried out “on a temporary basis”.

4.
In markets which have already been opened up to
competition by EU legislation, inherited national regulations and market
structure create obstacles to the entrance of new players.

5.
In some liberalised market segments, a complete
and correct implementation and enforcement of EU legislation by Member States
is still missing. This is particularly the case for rail freight transport,
which has been open to competition since January 2007. The principal
problematic issues in rail stem from the relations between infrastructure
managers and operators, which in many cases are still not fully independent,
and the effectiveness of the regulatory oversight of market functioning. For
instance, new rail freight operators often face discrimination in access to
infrastructure or rail related services, due to the historic integration of the
providers of such services and infrastructure managers with incumbent
operators.

6.
Market functioning is also hampered by a number
of regulatory barriers, which have a protectionist effect. For example,
relevant national rail authorities are reported to be reluctant to accept
rolling stock certificates issued by other Member States, with the effect of
hindering the free flow of trains across Europe and increasing red tape linked
to the certification process. Market integration both within and between
transport modes is still far from being achieved. Intermodal infrastructure –
multimodal transhipment platforms for freight and integrated rail-air-public
transport nodes for passengers – is not sufficiently developed. Exchanging data
between the modes is difficult because of the co-existence of non-compatible
modal IT systems.

7.
As a result, the EU transport system fails to
exploit the full network benefits and economies of scale that a completed
continent-wide transport grid would offer. At the same time, national transport
markets are hindered in their optimisation by the often state-led protection of
inefficient incumbent monopolies against the competition from new market
entrants. The functioning of the transport system is suboptimal in the routing
(due to missing infrastructure links), modal choices (because of the barriers
to multimodality) and organisational efficiency (as inefficient incumbent
operators – notably in rail transport – are protected from international and
national competition).

8.
Besides, the lack of universally approved
standards on traffic management and data exchange systems, vehicle weights and
dimensions, power supplies and educational requirements for transport workers
are further obstacles to cross-border traffic. For example in the rail sector,
the most striking evidence of such barriers is different track gauges,
electricity supply and signalling systems. The deployment of ERTMS, the
European signalling system, is progressing slowly; so far, only discontinued
sections of lines are equipped, and locomotives still need to be additionally
equipped with national systems. Also, the length and weight of trains is not
harmonised across Europe whereas the weights and dimensions of road vehicles
could be optimised, reflecting the progress in ITS and infrastructure design
and considering opportunities for reducing GHG emissions of heavy duty
vehicles.

9.
All these regulatory and technical barriers contribute
to higher than necessary transport costs, in particular in rail which is
considered a relatively environmentally friendly land transport mode,
particularly when transporting passengers on high-occupancy lines, or bulk
goods.

Efficient cross-border network not yet
completed

10.
The EU transport network is fragmented, with a
general lack of efficient and effective intermodal terminals, different service
levels across modes, a lack of standards, particularly for rail freight
transport and missing infrastructure links, especially across borders.

11.
The missing links in the European transport
network and its inefficient functioning can be attributed firstly to the lack
of coordination of policies and investment decisions between Member States and
to the absence of a comprehensive funding strategy with sufficient leverage and
conditionality to provide support for the completion of the TEN-T core network
as well as other infrastructure programmes.

12.
As indicated in the Monti report dated 9 April
2010, there is a need for a clear and transparent legal framework in the field
of State aid as regards infrastructure investment and financing.

The supply of transport services is not
sufficiently quality-driven

13.
Whereas quality services for passengers and
businesses have been promoted over the years, a number of market and regulatory
failures prevent transport services to be consistently of high quality,
hampering thereby the efficiency of the transport system. It is therefore no
surprise that the Consumer Markets Scoreboard of October 2010, identified
railways as one of the top four services markets where consumers experienced
most problems[378].

14.
“Changes in commerce and personal travel
patterns have increased the importance of a reliable transport system. Reliable
transport networks and services are required because of more complex and
inter-related supply chains and increasingly complex scheduled activities. The
physical way that the economy operates has changed, facilitated by – and
demanding – transport system enhancements. […] The importance of scheduling in
personal and freight activities has grown, so that transport unreliability has
an increasingly-marked effect on downstream activities. The expectation from
these demand trends is increasingly that transport should provide high levels
of reliability.“[379]

15.
Poor reliability of today’s transport services
is linked to the lack of a common vision for the provision of services across
transport modes and Member States. Transfers between different transport modes
often result in duplicated information efforts, loss of comfort and time, and
higher costs. Information systems for the end user are also very often
conceived in such a way that details are provided for the single transport
mode, but not for the overall multimodal door-to-door travel. “Where
performance is inconsistent, network users may simply have to accept the
consequences of the delay, albeit it may have ripple-effects or, worse,
snowballing (compounding, or growing) effects, affecting other activities or
stages in the personal or logistics chain, constituting a cost to those
involved.”[380]

16.
In addition, transport safety remains an issue,
particularly so for road transport. Notwithstanding the progress made in terms
of reducing the number of road casualties since the adoption of the third
European action programme for road safety in 2003, around 35,000 citizens were
killed on the roads of the EU in 2009.

17.
Transport security has become a great concern in
the wake of the terrorist attacks of 11 September 2001. In addition to air and
maritime security, there appears to be a clear need in increasing the security
of surface freight transport, in particular on the road. The devastating
terrorist attacks on the public transport systems in Madrid in 2004 and in
London in 2005, which killed almost 250 people, exposed the vulnerability of
surface passenger transport. In many cities, public transport suffers from a
lack of security due to some anti-social behaviour. Public transport must be
perceived to be safe and secure if it is to succeed in convincing more people
to move away from the car and use public transport instead.

18.
The existing acquis concentrates on aviation and
maritime transport security. Security measures have been developed for managing
both passengers and cargo transport in these fields. Security measures in
Europe reflect the international nature of both terrorist threats and
transport. In relation to land transport security, efforts have been made to
spread best practices, for example in emergency planning, through regular contacts
with Member State officials.

19.
At the EU level, transport security translates
into two main strategies: policy formulation and regulation, and monitoring
(inspection) activities, covering national competent authorities, airports,
port facilities and ships, to ensure correct implementation of the acquis. A
comprehensive and harmonised policy approach on security for all transport
sectors is needed which addresses the question of financing of transport
security at EU level and assesses and if necessary modifies the scope of
current inspection regimes. Consideration should be given to the application of
Article 222 TFEU, which envisages the Union and its Member States acting
jointly in a spirit of solidarity if a Member State is the subject of a
terrorist attack or the victim of a natural or man-made disaster.

Transport labour market is not completely
integrated

20.
Diverging national health, social, safety and
security standards in transport hamper the harmonised social development of
Europe and of the sector itself. The variety of rules increases the
vulnerability of certain categories of transport workers, encumbers heavy
bureaucracy on transport operators, distorts competition by basing it on
differences in working conditions, raises the unpredictability and insecurity
risks related to performing transport activities and finally renders some
pieces of EU law unenforceable in practice.

21.
In addition, barriers due to gender, age,
nationality and training hamper the availability of an appropriate labour
force. In an ageing society where the labour force will soon start shrinking,
the transport labour force is ageing more than the average in the EU (26% aged
over 50 versus 22%). A higher participation rate of women may help fill the gap
left by ageing male workers, but in transport their share has traditionally
been much lower than on average (21% versus 35%, while in land transport only
13%). The attractiveness of transport professions is also hampered by a
relatively high rate of accidents and by often difficult working conditions.

22.
The availability of a skilled and highly
motivated labour force in the transport sector is essential for the supply of
efficient and competitive transport services. Without tackling the aspect of
job quality, optimal progress towards a sustainable transport system is
unlikely to be achieved.

[1]               The services involved in this group included the
Secretariat-General, DG Agriculture and Rural Development, Bureau of European
Policy Advisers, DG Climate Action, DG Competition, DG Economic and Financial
Affairs, DG Employment, Social Affairs and Equal Opportunities, DG Energy, DG
Enterprise and Industry, DG Environment, Eurostat, DG Health and Consumers, DG
Home Affairs, DG Information Society and Media, DG Internal Market and
Services, the Joint Research Centre, DG Justice, DG Maritime Affairs and
Fisheries, DG Research, DG Regional Policy, and DG Taxation and Customs Union.

[2]               The services involved in this group included the
Secretariat-General, DG Agriculture and Rural Development, Bureau of European
Policy Advisers, DG Climate Action, DG Competition, DG Development, DG Economic
and Financial Affairs, DG Employment, Social Affairs and Equal Opportunities,
DG Energy, DG Enterprise and Industry, DG Environment, , DG Information Society
and Media, the Joint Research Centre, DG Maritime Affairs and Fisheries, DG
Research, DG Regional Policy, DG Trade, and DG Taxation and Customs Union.

[3]               COM/2009/0279 final

[4]               1st high level conference of 9
March 2009 (http://ec.europa.eu/transport/strategies/events/2009\_03\_09\_future\_of\_transport\_en.htm;
http://ec.europa.eu/transport/strategies/consultations/2009\_03\_27\_future\_of\_transport\_en.htm)
and 2nd high level conference of 20
November 2009 (http://ec.europa.eu/transport/strategies/events/2009\_11\_20\_future\_of\_transport\_en.htm;
http://ec.europa.eu/transport/strategies/consultations/2009\_09\_30\_future\_of\_transport\_en.htm).

[5]               COM (2010) 2020, EUROPE 2020 A strategy for smart,
sustainable and inclusive growth.

[6]               European Council 17 June 2010 Conclusions, document EUCO
13/10.

[7]               The seven flagship initiatives are: Innovation union,
Youth on the move, A digital agenda for Europe, Resource-efficient Europe, An
industrial policy for green growth, An agenda for new skills and jobs, European
platform against poverty.

[8]               COM (2011) 21. A resource-efficient Europe – Flagship
initiative under the Europe 2020 Strategy

[9]               The Renewed Sustainable Development Strategy of the
European Union adopted by the European Council in June 2006 defines a
sustainable transport system as the one that “meets society’s economic,
social and environmental needs whilst minimising its undesirable impacts on the
economy, society and the environment”. Sustainable mobility is
transportation undertaken using a sustainable transport system.

[10]             Source: Eurostat.

[11]             Own account transport refers to transport services that
firms in all sectors provide for themselves i.e. with their own trucks and
other vehicles.

[12]             See in this respect Appendix 2 of the present Impact
Assessment report.

[13]             The contribution of various modes to the total
emissions of the transport sector was as follows in 2008: 71.3% came from road,
15.3% from maritime, 12.8% from aviation, and 0.7% from rail transport. These
figures include international aviation and maritime but exclude combustion
emissions from pipeline transportation, ground activities in airports and
harbours, and off-road activities. The figure for rail only includes emissions
from diesel use, but not from electricity use. Looking at final energy
consumption by transport mode, electricity represents about 66% of the energy
consumed by rail.

[14]             In general, the notion of transport-related CO2
emissions covers vehicle exhaust emissions (i.e. tank-to-wheel emissions).
Unless stated otherwise, the references to transport-related CO2
emissions in this Impact Assessment report relate only to tank-to-wheel
emissions. Emissions produced by the energy consumed in the extraction,
processing and distribution of fuels, i.e. “well-to-tank” emissions, are not
part of the targets assessed. In addition, the present Impact Assessment report
does not cover the so-called “embodied energy” CO2 emissions from
the manufacture of vehicles and construction of roads and other components of
the transport infrastructure.

[15]             There is also considerable concern regarding aviation’s total climate impact on the global climate which has been
estimated by the IPCC as being two to four times higher than the effect of
carbon dioxide emissions alone due to releases of nitrogen oxides, water vapour
and sulphate and soot particles (excluding cirrus cloud effects). The figures
in this impact assessment generally refer to only the carbon dioxide effects.

[16]             European Commission, EU Energy and Transport in
Figures, 2010
http://ec.europa.eu/transport/publications/statistics/statistics\_en.htm.

[17]             Source: Eurostat.

[18]             COM(2000) 769, Green Paper - Towards a European
strategy for the security of energy supply

[19]             The others were internet
access, real estate services and investments, pensions and securities.
http://ec.europa.eu/consumers/strategy/docs/4th\_edition\_scoreboard\_en.pdf

[20]             In contrast to the evolution of CO2
emissions, the emissions of some air pollutants from transport vehicles were
reduced significantly despite rising traffic volumes: transport-related
emissions of particulate matter (PM10) and of acidifying substances
have decreased by about one third between 1990 and 2006, those of ozone forming
substances have been nearly halved (see EEA, 2010, Towards a resource-efficient
transport system — TERM 2009 (EEA Report No. 2/2010). Emission reduction has
been more successful in road transport than in other modes of transport. This success
is mainly due to the gradually more stringent EURO emission standards for road vehicles. It should be noted, however,
that partly due to the discrepancy between real-world and test-cycle emissions
of vehicles, road still accounts for the lion’s share (more than two thirds) of
total pollutant emissions from transport, even if the total amount of
pollutants and particulates has been significantly reduced. Moreover, the
downward trends have not been observed for all pollutants (e.g. NOx),
and the concentrations of NOx, ozone and particulate matters in many areas
(particularly in cities) are still often beyond what is considered to be
healthy. For example, twenty EU Member States have submitted notifications for
time extensions for PM10 limits in line with the extension of the
compliance year offered by Directive 2008/50/EC.

[21]             About half of the EU-15 citizens are estimated to live
in areas which do not ensure acoustical comfort for residents: 40% of the
population is exposed to road traffic noise exceeding 55 dB(A) during daytime,
and 20% to levels exceeding 65 dB(A). At night, more than 30% are exposed to
sound levels that disturb sleep (>55 dB(A)) [See the WHO Night Noise
Guidelines for Europe (WHO, 2009)]. Existing studies show that noise exposure increases
the risk for high blood pressure and heart attacks. Surveys also show that
(environmental) noise is a relevant reason for people moving out of the cities
into the suburban are. [See SILENCE project (Integrated Project co-funded by
the European Commission under the Sixth Framework Programme for R&D):
SILENCE Practitioner Handbook for Local Noise Action Plans, 2008,
http://www.silence-ip.org/site/fileadmin/SP\_J/E-learning/Planners/SILENCE\_Handbook\_Local\_noise\_action\_plans.pdf]

[22]             See in this respect COM/2009/0279 final.

[23]             I.D. Grenwood and C.R. Bennett (1996), “The Effects of
Traffic Congestion on Fuel Consumption,”Road and Transport Research, Vol.5,
N°2, June 1996, pp18-31.

[24]             The costs of transport can be split into
private/internal costs (those directly borne by the person engaged in transport
activity) and external costs (i.e. those that are imposed on others but not
supported by the user). The sum of private and external costs represents costs
to the society. The boundary between internal and external costs is defined by
the costs the person takes into account when deciding to use a transport
service. This means that when engaging in a transport activity, a person will
incur private costs linked to the use of a mode of transport (vehicle purchase,
tolls or fuel use), but will not be aware of effects imposed on others such as
pollution or congestion. His/her decision will not be based on the social costs
of his/her activity. In other words, the costs imposed on others– environmental
damages, accidents, congestion - generated by transport activities are external
costs, more generally referred to as externalities. Most of them have increased
over the past years despite technological progress (see in this respect the
Impact Assessment on the internalisation of external costs -
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008SC2208:EN:NOT)

[25]             The Reference scenario used for the purpose of this
Impact Assessment is the same as the Reference scenario used in the Impact
Assessment of the "Low-carbon economy 2050 roadmap”. The cut off date for
the policy measures included in the Reference scenario (March 2010) is common
to both initiatives. In other words, the Reference scenario does not
incorporate policy measures that were adopted by the Commission after March
2010. In particular, the Reference scenario does not cover the Commission
Decision of 14 October 2010 re-launching of the CARS 21 High Level Group on the
Competitiveness and Sustainable Growth of the Automotive Industry in the
European Union. For the same reason, it does not capture the recent initiatives
of car manufacturers as regards electric vehicles (hereinafter “EV”).

[26]             A brief presentation of the
models used is provided in Appendix 5.

[27]             In addition, 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 (E3MLab).

[28]             European Commission, DG Economic and Financial Affairs:
2009 Ageing Report: Economic and budgetary projections for the EU-27 Member
States (2008-2060). EUROPEAN ECONOMY 2|2009,
http://ec.europa.eu/economy\_finance/publications/publication14992\_en.pdf. The
“baseline” scenario of this report has been established by the DG Economic and
Financial Affairs, the Economic Policy Committee, with the support of Member
States experts, and has been endorsed by the ECOFIN Council.

[29]             Demographic projections in the Reference scenario are
common in PRIMES, TRANSTOOLS, PRIMES-TREMOVE transport model, TREMOVE and
GEM-E3.

[30]             European Commission, DG Employment: People with
disabilities have equal rights - The European Disability Strategy 2010-2020,
http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=591&type=2&furtherPubs=no

[31]             European Commission, DG Economic and Financial Affairs:
2009 Ageing Report: Economic and budgetary projections for the EU-27 Member
States (2008-2060). EUROPEAN ECONOMY 2|2009,
http://ec.europa.eu/economy\_finance/publications/publication14992\_en.pdf.

[32]             The IEA Energy Technology Perspectives 2010 assumes 115
$/barrel in 2008 prices for 2030 and 120 $/barrel for 2050.

[33]             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 (E3MLab).

[34]             This would translate into an oil price of 91 €/barrel
in 2030 and 118 €/barrel in 2050.

[35]             As said above, the Reference scenario does not cover
the Commission Decision on re-launching of the CARS 21 High Level Group on the
Competitiveness and Sustainable Growth of the Automotive Industry in the
European Union and does not capture the recent initiatives of car manufacturers
as regards electric vehicles (hereinafter “EV”).

[36]             Passenger transport activity includes international
aviation, while freight transport activity also includes international
maritime.

[37]             Regulation (EC) No 443/2009 of the European Parliament
and of the Council of 23 April 2009 setting emission performance standards for
new passenger cars as part of the Community’s integrated approach to reduce CO2
emissions from light-duty vehicles, OJ L 140, 5.6.2009, p. 1–15.

[38]             Directive 2009/28/EC of the European Parliament and of
the Council of 23 April 2009 on the promotion of the use of energy from
renewable sources and amending and subsequently repealing Directives 2001/77/EC
and 2003/30/EC, OJ L 140, 5.6.2009, p. 16–62.

[39]             The shares of renewables in transport reported here
follow the definition from the Directive 2009/28/EC.

[40]             As said above, the Reference scenario does not cover
the European Commission CARS 21 (Competitive Automotive Regulatory System for
the 21st century) initiative. This initiative may trigger a higher uptake of
electric propulsion vehicles in the Reference scenario, which is currently
negligible by 2050. In addition, the Reference scenario was finalised in early
2010 and does not capture the recent initiatives of car manufacturers as
regards electric vehicles. As a result, the penetration of EVs might be higher
and transport sector oil dependency and CO2 emissions might be lower
in the Reference scenario.

[41]             The CO2 emissions from transport include
international maritime and aviation but exclude combustion emissions from
pipeline transportation, ground activities in airports and harbours, and
off-road activities.

[42]             The CO2 emissions include international
maritime and aviation but exclude combustion emissions from pipeline
transportation, ground activities in airports and harbours, and off-road
activities.

[43]             The CO2 emissions from transport include
international maritime and aviation but exclude combustion emissions from
pipeline transportation, ground activities in airports and harbours, and
off-road activities.

[44]             The costs are expressed in year 2005 euros.

[45]             The Reference scenario with high oil prices is
presented in more detail in the Impact Assessment of the “Low-carbon economy
2050 roadmap”.

[46]             Transport activity in this
analysis includes international aviation and maritime.

[47]             The 20% reduction refers to CO2 emissions
excluding international maritime but including international aviation.

[48]             Impact assessment of the 2008 Climate and Energy
Package (SEC(2008) 85/3).

[49]             However, this provides only a rough estimate, because
not only GDP but also demographic projections, energy prices and some policy
assumptions included in each scenario is different.

[50]             The Impact Assessment (SEC(2008) 2208) accompanying the
Commission Communication ‘Strategy for the internalisation of external costs’
(COM(2008) 435) provided ample evidence that the total costs to society are not
correctly reflected in the costs borne by transport users.

[51]             See in this respect: http://ec.europa.eu/taxation\_customs/resources/documents/taxation/gen\_info/
economic\_analysis/tax\_papers/taxation\_paper\_22\_en.pdf

[52]             See COM(2008) 435 final. “ Strategy for the
internalisation of external costs”: http://eur-lex.europa.eu/LexUriServ/
LexUriServ.do?uri=COM:2008:0435:FIN:EN:PDF

[53]             The Commission Communication on the Innovation Union
(COM(2010) 546) and its Staff Working Document (SEC(2010) 1161) explains in
detail the key weaknesses of the EU research and innovation system, such as
under-investment, system component-, system linkage- and system governance
weaknesses.

[54]             COM(2010) 546. “Europe 2020 Flagship Initiative
Innovation Union”.

[55]             The promotion of alternative fuels has been slow and
fragmented across Member States. The share of alternative fuels remains below
5% in the EU on average. This situation is due to a series of obstacles such
as:

•
a lack of high-level coordination and
cooperation across relevant policy areas and stakeholders who have not
necessarily cooperated before; which results in the absence of EU-wide
standards, including on an accepted methodology that enables the comparison of
economic, social and environmental impacts of using various fuels and energy
carriers based on their production approach.

•
consumer myopia and lack of foresight; and

•
lack of correct pricing for the externalities of
fossil fuel use

[56]             Such as information based on the effective evaluation
of real world emissions of vehicles, and a common methodology of calculating
carbon footprints.

[57]             The independent study underlying this section was
published on the Europa website in 2009. http://
ec.europa.eu/transport/strategies/studies/doc/future\_of\_transport/20090908\_common\_transport\_policy\_final\_report.pdf

[58]             See for instance the Commission Freight Transport
Logistics Action Plan (COM(2007) 607)

[59]             The Action Plan on Urban Mobility of 2009 (COM(2009)
490) identified as its Theme 1 the need to promote Integrated Policies.

[60]             30% of total road freight is international and
international road freight transport grows twice as fast as domestic road freight
transport. Source: Road Freight Transport Vademecum, N°2, March 2009.

[61]             See in this respect the Impact Assessment accompanying
the Action Plan on Urban Mobility Impact Assessment (COM(2009) 490} {SEC(2009)
1212).

[62]             See in this respect the Impact Assessment accompanying
the Action Plan on Urban Mobility Impact Assessment (COM(2009) 490} {SEC(2009)
1212).

[63]             European Council, June 2006

[64]             The “Low-carbon economy 2050 roadmap” identifies a path
for the reduction of the EU GHG emissions by 80% by 2050 with respect to 1990.
In the “Effective and widely accepted technology” scenario it is foreseen that
the transport sector reduces its emissions by around 60%, industry by around
80%, the residential sector and services by around 90%, and power generation by
over 90%.

[65]             Unless stated otherwise, the references to
transport-related CO2 emissions in this Impact Assessment report
relate only to tank-to-wheel emissions.

[66]             As most GHG emissions from transport are CO2 emissions,
this target can be considered as equivalent to the target of reducing GHG
emissions by 60%, as expressed in the Impact Assessment on “Low-carbon economy
2050 roadmap”.

[67]             See also point 27 of the present Impact Assessment report.

[68]             The results for international maritime are presented
separately in section 5.

[69]             SEC(2010) 1606 final (14 December 2010) Commission
Staff Working Document, “A European Strategy for Clean and Energy Efficient
Vehicles - Rolling Plan”,

[70]             See in this respect the definition of the concept of a
sustainable transport system adopted by the European Union Council of Ministers
of Transport (2004), according to which a sustainable transport system:

•
Allows the basic access and development needs of
individuals, companies and society to be met safely and in a manner consistent
with human and ecosystem health, and promotes equity within and between
successive generations;

•
Is affordable, operates fairly and efficiently,
offers a choice of transport mode and supports a competitive economy, as well
as balanced regional development;

•
Limits emissions and waste within the planet's
ability to absorb them, uses renewable resources at or below their rates of
generation, and uses non-renewable resources at or below the rates of
development of renewable substitutes, while minimizing the impact on the use of
land and the generation of noise.

[71]             See in this respect United Nations General Assembly
(March 20, 1987). “Report of the World Commission on Environment and
Development: Our Common Future”; Chapter 2: Towards Sustainable Development;
Paragraph 35. http://www.un-documents.net/ocf-02.htm#I.

[72]             Infrastructure designed in a way to minimise
environmental impact.

[73]             Communication from the Commission: “Towards a Single
Market Act – for a highly competitive social market economy”, COM(2010) 608
final/2

[74]             See section 1.4 of the Commission Impact Assessment
Guidelines (SEC(2009)92).

[75]             Handbook with estimates of external costs in the
transport sector - February 2008
(http://ec.europa.eu/transport/sustainable/2008\_external\_costs\_en.htm)

[76]             COM(2007) 52 final Proposal for a Council Directive
amending Directive 2003/96/EC as regards the adjustment of special tax
arrangements for gas oil used as motor fuel for commercial purposes and the
coordination of taxation of unleaded petrol and gas oil used as motor fuel; and
Commission staff working document accompanying the proposal for a Council
Directive Amending Directive 2003/96 restructuring the Community framework for
the taxation of energy products and electricity (forthcoming)

[77]             Answer given by the Commission to the question of MEP Nick
Griffin (NI), http://www.europarl.europa.eu/sides/
getAllAnswers.do?reference=E-2010-4804&language=EN

[78]             Proposal for a Council Directive on passenger car
related taxes SEC(2005) 809; http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52005PC0261:EN:NOT

[79]             COM(2010) 695 final, Green Paper on the future of VAT, Towards a simpler, more robust and
efficient VAT system

[80]             DG TAXUD Taxation Papers, 2010,
Copenhagen Economics: Company Car Taxation, Subsidies, Welfare and Environment;
http://ec.europa.eu/taxation\_customs/
resources/documents/taxation/gen\_info/economic\_analysis/tax\_papers/taxation\_paper\_22\_en.pdf

[81]             The shadow price in this case is the marginal cost of
strengthening the constraint on CO2 emissions.

[82]             A common example of split incentives is referred to as
the landlord-tenant problem. This problem occurs when the landlord provides
energy-using appliances (such as a refrigerator or lighting systems), but the
tenant pays the electricity bill. In this situation, there is little incentive
for the landlord to choose the most energy-efficient appliance.

[83]             Individuals decide on the type of vehicle they
purchase, but cannot control investments in, for example, public transport
means or in the recharging facilities needed for alternative power trains. As a
result, consumers are often restricted in their choices and have low response
to prices (inelastic demand).

[84]             Capital intensity of an abatement measure is “defined
as the additional upfront investment relative to the BAU technology, divided by
the total amount of avoided emissions over the lifetime of the asset. For a
more fuel efficient car, for instance, the capital intensity would be
calculated as the additional upfront investment compared to the BAU technology,
divided by the amount of CO2 saved through lower fuel consumption during the
lifetime of the car. The main difference with abatement cost is the capital
intensity calculation does not take financial savings through lower energy consumption
into account.” McKinsey&Company (2009). Pathways to a Low-Carbon Economy.
Version 2 of the Global Greenhouse Gas Abatement Cost Curve. 2009.

[85]             Rebound effects are indirect, second order effects of
policy instruments, which are often unintended and have the potential to
undermine the ultimate objective of the primary policy instrument, in this case
the delivery of reductions in GHG emissions.

[86]             UKERC, 2007, The Rebound Effect: an assessment of the
evidence for economy-wide energy savings from improved energy efficiency.

[87]             Sources: Directorate General Environment (“EU Transport
GHG: Routes to 2050?”); IEA, 2010 Energy Technology Perspectives.

[88]             Policy Options 2, 3 and 4 include the same energy price
environment as the “Effective and widely accepted technology” scenario from the
Impact Assessment on “Low-carbon economy 2050 roadmap”. In the “Effective and
widely accepted technology” scenario, with global climate action, lower energy
demand is assumed to keep energy prices at lower levels relative to the
Reference scenario. Oil price is assumed to be 80 $/barrel in 2030 and 70
$/barrel in 2050 (in year 2008-dollars).

[89]             For Policy Options 2, the CO2 tax component
of motor fuel excise duties has been chosen as an endogenous variable to
reflect the high price signals required in the transport sector with limited technology deployment.

[90]             The stringency
of CO2 standards for road passenger transport is adjusting in Policy Option 3 to illustrate the efforts required
in terms of regulatory measures with more limited action on system improvement policy measures.

[91]             Range is the distance a vehicle can cover before
refuelling/recharging.

[92]             For aviation and maritime transport, setting standards
on fuel efficiency needs to be carried out through harmonised EU action in the
International Civil Aviation Organisation and International Maritime
Organisation.

[93]             See section 1.4 of the Commission Impact Assessment
Guidelines (SEC(2009)92).

[94]             Handbook with estimates of external costs in the
transport sector - February 2008 (http://ec.europa.eu/transport/sustainable/2008\_external\_costs\_en.htm).

[95]             The internalisation of external costs means that
transport users bear the costs they generate: both private and external. To
make transport users pay for these external costs Policy Option 2, 3 and 4
envisage a user charge based on the estimation of these external costs. The
central values from the ‘Handbook with estimates of external costs in the
transport sector” have been used for this purpose.

[96]             Commission staff working
document accompanying the proposal for a Council Directive Amending Directive
2003/96 restructuring the Community framework for the taxation of energy
products and electricity (forthcoming).

[97]             COM(2007) 52 final Proposal for a Council Directive
amending Directive 2003/96/EC as regards the adjustment of special tax
arrangements for gas oil used as motor fuel for commercial purposes and the
coordination of taxation of unleaded petrol and gas oil used as motor fuel.

[98]             Currently, the practices applied by Member States
differ greatly. While for international passenger transport, sea and air are
exempt of VAT in the whole of the EU-27, VAT is payable on inland waterways,
rail and road transport in Belgium, Germany, Spain and the Netherlands. France
levies VAT on inland waterways, Greece and Austria does so on rail and road
transport, while Poland and Slovenia on road transport only. 19% of VAT is
applied currently by Germany on international rail transport. Source: European
Commission, DG TAXUD. 2010. VAT Rates Applied in the Member States of the
European Union; http://ec.europa.eu/taxation\_customs/
resources/documents/taxation/vat/how\_vat\_works/rates/vat\_rates\_en.pdf

[99]             More than half of Member States
have introduced a CO2-related element in their car taxation schemes.
Source: ACEA, Overview of CO2 based motor vehicles taxes in the EU;
http://www.acea.be/images/uploads/files/20100420\_CO2\_tax\_overview.pdf

[100]            COM(2005) 261 final Proposal for
a Council Directive on passenger car related taxes

[101]            For modelling purposes, it is assumed that only the CO2
tax component of fuel taxation is endogenously determined.

[102]            Assumptions based on: DG TAXUD
Taxation Papers, 2010, Copenhagen Economics: Company Car Taxation, Subsidies,
Welfare and Environment; http://ec.europa.eu/
taxation\_customs/resources/documents/taxation/gen\_info/economic\_analysis/tax\_papers/taxation\_paper\_22\_en.pdf

[103]            FERRMED (2009), Ferrmed Global
Study.

[104]            Assumptions based on data from the Verband der
Automobilindustrie. Source: International Road Transport Union.

[105]            Zimmer, W., Schmied, M. (2008),
Potentials for a modal shift from road to rail and ship - A methodological
approach, ETC/ACC Technical Paper 2008/18. European Topic Centre on Air and
Climate Change.

[106]            Wiegmans, B.W., Konings, R.
(2007), Strategies and innovations to improve the performance of barge
transport, EJTIR 7, no. 2 (2007) pp. 145-162.

[107]            FERRMED (2009), Ferrmed Global
Study.

[108]            The CO2 shadow price has been first derived
in the Policy Option 4. Subsequently, the value of the CO2 shadow
price in Policy Option 4 has been used as input (exogenous variable) in Policy
Options 2 and 3. The presentation in the table above does not reflect the order
in which the Policy Options had been modelled.

[109]            kWh stands for kilowatt hour.

[110]            International Energy Agency (2009), Transport, Energy
and CO2: Moving Towards Sustainability, 2009

[111]            Nemry F., Leduc G., and Munoz A.
(2009). Plug-in hybrid and battery-electric vehicles: State of the research and
development and comparative analysis of energy and cost efficiency. Technical
report, Joint Research Centre: Institute for Prospective Technological Studies,
Joint Research Centre Institute for Prospective Technological Studies.

[112]            Martin Eberhard, Co-founder of
Tesla, since early 2009 electric vehicle engineering director at Volkswagen’s
Electronics Research Laboratory (ERL) in Palo Alto, California.
http://electric-vehicles-cars-bikes.blogspot.com/2010/08/eberhard-500-mile-evs-by-2020.html
(last accessed 15.11.2010); USABC,
http://www.uscar.org/guest/teams/11/Electrochemical-Energy-Storage-Tech-Team
(last accessed 15.11.2010).

[113]            International Energy Agency (2009), Transport, Energy
and CO2: Moving Towards Sustainability, 2009

[114]            CO stands for carbon monoxide
and NOx for nitrogen oxides.

[115]            “EU Transport GHG: Routes to 2050?” project, funded by
the European Commission, Directorate General Environment.

[116]            “EU Transport GHG: Routes to 2050?” project, funded by
the European Commission, Directorate General Environment.

[117]            The current EU Emissions Trading Scheme only covers CO2
emissions from aviation, but aviation has larger climate impacts due to other
emissions such as stratospheric NOx, particulates, contrails and formation of
cirrus cloud.

[118]            Modelling results build on a modelling framework
including PRIMES, TRANSTOOLS, PRIMES-TREMOVE transport model, TREMOVE and
GEM-E3 models. A short description of each model is provided in Appendix 5.

[119]            A cost-effectiveness analysis
has been used in the present Impact Assessment report, in line with the Commission Impact Assessment Guidelines (SEC(2009)92), provided the
each policy option achieves the 60% CO2 emission reduction target by
2050 relative to 1990 and the difficulty of valuing all benefits in money
terms.

[120]            See section 1.4 of the Commission Impact Assessment
Guidelines (SEC(2009)92).

[121]            As explained above, the modelling results for CO2 emissions
reduction do cover aviation, but do not cover international maritime.
Therefore, CO2 emissions for maritime are reported separately. The
modelling results reflect the accounting method set out in Commission Decision (2007/589/EC) establishing
guidelines for the monitoring and reporting of greenhouse gas emissions
pursuant to Directive 2003/87/EC of the European Parliament and of the Council
for the use of biofuels. In this Decision, biomass is considered as CO2
neutral.

[122]            Passenger transport costs include capital costs, fixed
operation costs and variable fuel and non-fuel costs (including taxes and
charges).

[123]            Annualised capital costs include the return necessary on
private sector investments in the transport sector. No social discount rate is
applied which would result in lower costs.

[124]            Similarly to passenger transport, freight transport
costs include capital costs, fixed operation costs and variable fuel and
non-fuel costs.

[125]            As previously explained Policy Options 2, 3 and 4
include a lower price environment. Oil price is assumed to be 80 $/barrel in
2030 and 70 $/barrel in 2050 (in year 2008-dollars).

[126]            SEC(2010) 650, Commission Staff Working Document
accompanying the Communication from the Commission to the European Parliament,
the Council, the European Economic and Social Committee and the Committee of
the Regions - Analysis of options to move beyond 20% greenhouse gas emission
reductions and assessing the risk of carbon leakage: Background information and
analysis.

[127]            In addition, modelling limitations do not allow
evaluating the macroeconomic effects of measures like i.e. CO2
standards.

[128]            This statement refers to total vehicle purchase costs
and not to unit costs.

[129]            SEC(2007)1724 “In the global perspective, research and
innovation are seen as strengths of the European market and it is not likely
that the above trends will have a damaging effect on the competitive position
of EU manufacturers. As regards mature non-EU markets where EU manufacturers
are already present (e.g. US, Canada) there is a general trend towards the
reinforcement of fuel efficiency/greenhouse gas emission standards. Because
requirements on these markets are so far less ambitious than those in the EU,
the proposed EU legislation will allow European carmakers to provide vehicles
that are competitive and meet the reinforced standards to come into force in
the coming years.”

[130]            SEC(2009) 1111 final. European
Industry in a Changing World. Updated Sectoral Overview 2009.

[131]            A recent research from the Joint Research Centre of the
Commission shows indeed that the EU-based automotive industry is the largest
private research investor in the EU with a volume of R&D investments of
more than 30 bln € in 2008. This high R&D effort, that reaches around 5% of
the turnover, indicates that the sector is research-intensive, especially in
comparison to the low R&D intensity of companies active in the electricity
sector (0.6%) and oil and gas producers (0.2%). See in this respect: JRC.2010. Research of the EU automotive industry into low-carbon vehicles and
the role of public intervention http://ftp.jrc.es/EURdoc/JRC58727\_TN.pdf

[132]            EU 2020 Flagship Initiative Innovation Union SEC(2010)
1161

[133]            See for instance Karts T. Geurs, Wouter Boon, Bert Van
Wee (2009): Social Impacts of Transport: Literature Review and the State of the
Practice of Transport Appraisal in the Netherlands and the United Kingdom,
Transport reviews, 29:1, 69-90.

[134]            IAIA (2003): Social Impact Assessment: International
principles. Special publication Series N°2

[135]            The mobility of citizens is defined in terms of
passenger kilometres.

[136]            More specifically, accessibility is defined in terms of
generalized transport costs from zone i to zone j for segment r
(commodity group or trip purpose) in year t, weighed with the traffic
volumes.

[137]         See for
instance European Environment Agency. Factsheet TERM 2005 24 – Expenditures on
personal mobility; http://www.eea.europa.eu/data-and-maps/indicators/expenditures-on-personal-mobility-1/
term\_2005\_24\_\_\_expenditure\_on\_personal\_mobility\_final\_version.pdf

[138]            Ecorys (2009), http://ec.europa.eu/enterprise/newsroom/cf/document.cfm?action=display&
doc\_id=5416&userservice\_id=1&request.id=0

[139]            GHK (2007) Links between the
environment, economy and jobs; http://ec.europa.eu/environment/
enveco/industry\_employment/pdf/ghk\_study\_wider\_links\_summary.pdf

[140]            This figure does not include own account transport. The
construction and maintenance of transport infrastructure and of transport means
(i.e. road vehicles, ships, trains) is not included either.

[141]            Result of the GEM-E3 model.

[142]            See for instance, “Climate Change and employment – Impact
on employment in the European Union-25 of climate change and CO2
emission reduction measures by 2030”, European Trade Union Confederation
(ETUC), Instituto Sindical de Trabajo, Ambiente y Salud (ISTAS), Social
Development Agency (SDA), Syndex, Wuppertal Institute (2007).

[143]            The distribution of jobs within the transport sector, as
different from its total volume, depends of changes in the modal split, which
will be in part influenced by the policies that will be adopted at European and
other levels.

[144]            The EmployRES study (2009), funded by the European
Commission, showed that achieving a 20% share of renewables in final
consumption could provide a net effect of about 410,000 additional jobs by
2020.

[145]            CEDEFOP, 2010, Skills for green jobs. European Synthesis
report

[146]            According to the Commission Staff Working Document
“European Industry in a Changing World - Updated Sectoral Overview 2009”, the
automotive industry employs directly more than 2.3 million people (about 6% of
manufacturing employment). Most of those employed in the automotive industry
(60-70%) are engaged in skilled (or semi-skilled) manual work, while 30-40% are
trained professionals or technicians.

[147]            The CO2 emissions from transport include
international maritime and aviation but exclude combustion emissions from
pipeline transportation, ground activities in airports and harbours, and
off-road activities.

[148]            The 60% CO2 emissions reduction target does
not cover international maritime.

[149]            Urban planning measures are used
as residual component in order to reach the 60% targets in Policy Option 4.
Their importance is moderate, as indicated by a CO2 shadow price of
about 200 €’08/ t of CO2 by 2050. This shadow price is close to the
CO2 price from the “Effective and widely accepted technology”
scenario from the Impact Assessment of the “Low-carbon
economy 2050 roadmap”. This price signal mimics a
combination of measures like: traffic management through congestion charges,
integrate planning through urban mobility plans and improvements in public
transport and soft modes infrastructure. Policy Options 2 and 3 use the same
price signals for urban as Policy Option 4.

[150]            The 60% CO2 emissions reduction target does
not cover international maritime and therefore they are not reported in this
figure. The 60% CO2 emissions reduction target only covers the tank
to wheel emissions.

[151]            The well-to-wheel CO2 emission factors for
biofuels and electricity are identical to those applied in the “Effective and
widely accepted technology” scenario from the Impact Assessment of the
“Low-carbon economy 2050 Roadmap”.

[152]            Such a shift would not result in higher absolute
emissions however: the EU Emission Trading Scheme effectively caps emissions
from power generation.

[153]            See for instance “Environmental impacts and impact on
the electricity market of a large scale introduction of electric cars in
Europe”, ETC/ACC Technical Paper 2009/4, July 2009

[154]            Bob van der Zwaan, Johannes Bollen, and Sebastiaan Hers,
“An Integrated Assessment of Climate Change, Air Pollution, and Energy Security
Policy” (December 1, 2009). Fondazione Eni Enrico Mattei Working Papers.
Working Paper 366.

[155]            Million Tonnes of Oil Equivalent

[156]            By 2020, Policy Options 2 and 4 would deliver around 18%
reduction in the transport sector energy consumption compared to the PRIMES
2007 baseline (pre-crisis baseline). According to the forthcoming Impact
Assessment report on the European Energy Efficiency Plan (until 2020), and
based on a study by the Fraunhofer ISI et al. 2009, the cost-effective
potential for the transport sector in 2020 is evaluated at 21%. Policy Options
2 and 4 achieve energy savings close to the cost-effective potential. Policy
Option 3 also delivers significant energy savings by 2020, although more
limited in size compared to the other two options. The reason is that Policy
Option 3 relies to a larger extent on technological solutions, which are rather
back loaded in terms of effects. In the study conducted by the Fraunhofer ISI
the potentials are calculated based on the PRIMES 2007 baseline (pre-crisis baseline).
Therefore, the same methodology has been followed here (i.e. comparing the
energy consumption of the Policy Options with those of the PRIMES 2007
baseline).

[157]            As long as the transport sector is almost completely
reliant on fossil fuels, standards on CO2 emissions of vehicles
correspond to de facto energy efficiency standards. However in a future
where alternative fuels and energy carriers, such as electricity and hydrogen,
play a much larger role than today, energy efficiency standards will become more
important in encouraging overall resource efficiency in the transport sector by
driving lower energy use.

[158]            Energy intensity for passenger transport is expressed
relative to passenger-km, energy intensity for freight transport is expressed
relative to tonne-km, while the energy intensity for total transport is
expressed relative to GDP.

[159]            The price of electricity is based on the Effective and
widely accepted technology scenario from the Impact Assessment on “Low-carbon
economy 2050 roadmap”.

[160]            Ibid Footnotes 121 and 150. The Impact Assessment does not assess
the impact of any possible modification in the accounting method set out in
Commission Decision (2007/589/EC) for biomass.

[161]            The pathways for the decarbonisation of power generation
would be analysed in the forthcoming Energy Roadmap 2050.

[162]            The price of electricity is based on the Effective and
widely accepted technology scenario from the Impact Assessment on “Low-carbon
economy 2050 roadmap”.

[163]            Performing sensitivity analysis on GDP growth or oil
prices for Policy Option 2, 3 and 4, while keeping the assumed intensity of the
policy measures unchanged, would lead to higher or lower CO2
emissions reductions relative to the 60% target. For example, higher GDP growth
without significant structural change would lead to less than 60% reduction in
CO2 emissions, while higher oil prices would result in more than 60%
reduction in CO2 emissions. As a consequence, the results of these
variants would not be comparable with those of Policy Options 2,3 and 4 (which
would have different CO2 emissions), nor with Policy Option 1 – Reference
scenario (which would have different macroeconomic assumptions).

[164]            An overview of studies by OECD shows that while
employment may increase if the extra revenues from environmental market-based
instruments are used for reducing taxes on labour and social security
contributions, especially when aimed at unskilled labour, the employment
effects are uncertain when the extra revenues are used for lump-sum payments to
households or for reducing VAT (Source: OECD, 2001. Environmentally related
taxes in OECD countries - issues and strategies).

[165]            Commission staff working
document accompanying the proposal for a Council Directive Amending Directive
2003/96 restructuring the Community framework for the taxation of energy
products and electricity (forthcoming).

[166]            Modelling limitations do not allow at this stage
evaluating the impact of different revenue recycling schemes quantitatively.
More specifically, the current Impact Assessment report builds on models with
specific focus on the transport and energy sectors. While these models enable
the assessment of the detailed policy measures proposed in the policy options,
they do not cover the overall economy (i.e. government sector, households) and
therefore do not allow an evaluation of various recycling schemes. Other models
(i.e. GEM-E3, WorldScan, Quest III) could provide an assessment of the effects
of different recycling schemes but they would not be able to reflect all the
policy measures considered in the policy options. Even linking the two
modelling approaches would prove challenging and would require additional
resources for further model development.

[167]            When assessing the barriers for the electrification of
transport in the context of the Strategic Energy Technology Plan, the Joint
Research Centre found that low-energy density of available batteries, which
limits the range of driving between charges, remains the main challenge. For
example, lead-acid batteries are cheap (ca. €100 per kWh) but they are too
heavy due to the low energy and power density and they also lack deep cycling
capabilities. Other battery technologies can double the vehicle’s driving autonomy
but they are still too expensive (NiMh or Li-Ion, ca. 500 – 1500 €/kWh). In
addition, other social and infrastructural barriers may delay the widespread
use of plug-in hybrids and electric vehicles: the lack of standardised electric
infrastructures, the high cost of vehicles and their batteries (including
warranty), the unrealistically short times (< 5 months) expected by
consumers to recover their investment in electric vehicles, the inertia of the
current transportation system and the major market players, the perceived high
infrastructural investment costs, etc. See in this respect JRC(2009),
Technology Descriptions of the 2009 Update of the Technology Map for the SET
Plan.

[168]            Skinner I, van Essen H, Smokers R and Hill N (2010),
Towards the decarbonisation of EU’s transport sector by 2050. Final report
produced under the contract ENV.C.3/SER/2008/0053 between European Commission
Directorate-General Environment and AEA Technology
(http://www.eutransportghg2050.eu)

[169]            The investment required for developing the electric road
transport infrastructure is estimated at roughly 140 billion € in Policy Option
3, followed by Policy Option 4 with about 120 billion and Policy Option 2 with
about 80 billion. These costs cover the recharging infrastructure for cars,
trucks, coaches and the reinforcement of the Low voltage (LV) and Medium
voltage (MV) power grid. Some industry studies suggest that the costs of
development of a network for refuelling hydrogen fuel cell vehicles would be
roughly comparable (Cf. McKinsey (2010), A portfolio of power-trains for
Europe: a fact-based analysis; available at:
http://www.iphe.net/docs/Resources/Power\_trains\_for\_Europe.pdf). The present
value of the electric road transport infrastructure costs is derived using a
discount rate of 4%.

[170]            The welfare losses due to the limitation in mobility
(users’ disutility) are reflected through the compensating variation.
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.

[171]            The present value of the additional costs corresponding
to each Policy Option has been calculated using a discount rate of 4%, in line
with the requirement laid down in the 2009 Impact Assessment Guidelines.

[172]            The overall mitigation costs as
presented here are a measure of total cost not directly comparable with the
marginal abatement cost as derived in the Impact Assessment of the “Low-carbon
economy 2050 roadmap”, which evolves in time. Having said this, the 60% target
for the reduction of transport GHG emissions was derived with the PRIMES model
based on the constraint of equal marginal abatement costs across sectors. The
Policy Options in this impact assessment were developed as alternative ways of
meeting this 60%.

[173]            Policies aiming at reducing CO2 emissions,
like taxation, can also bring benefits such as the reduction of congestion.

[174]            Co-benefits are defined as the difference between the
present value of the external costs in each Policy Option and those in Policy
Option 1, divided by the difference in the cumulative well-to-wheel emissions
in each Policy Option relative to Policy Option 1. A discount rate of 4% has
been used for the calculation of the present value.

[175]            Mitigation costs are defined as the difference between
the present value of transport costs excluding external costs in each Policy
Option and those of Policy Option 1, divided by the difference between the
cumulative well-to-wheel emissions in each Policy Option and those in Policy
Option 1. The costs also cover the electric road transport infrastructure. A
discount rate of 4% has been used for the calculation of the present value.

[176]            As already explained, the Reference scenario does not
cover the European Commission CARS 21 (Competitive Automotive Regulatory System
for the 21st century) initiative and the recent initiatives of car
manufacturers as regards electric vehicles. These initiatives may lead to
higher penetration of EVs, which is currently negligible in the Reference
scenario, and lower oil dependency and CO2 emissions for the
transport sector. As a consequence of lower CO2 emissions in the
Reference scenario, the mitigation costs and net costs may be lower for the
Policy Options considered. However, their relative order of importance will
remain the same.

[177]            The assessment of the feasibility for each Member State
to afford additional infrastructure investment in view of current fiscal
constraints is outside the scope of the present Impact Assessment report.

[178]            http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/936

                http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/365

[179]            The lists of participants is
available at the following websites: http://ec.europa.eu/transport/
strategies/events/doc/2009\_03\_09\_future\_of\_transport/2009\_03\_09\_participants.pdf;
http://ec.europa.eu/transport/strategies/events/doc/2009\_11\_20\_future\_of\_transport/participants\_list.pdf

[180]            http://ec.europa.eu/transport/strategies/consultations/2009\_03\_27\_future\_of\_transport\_en.htm;
http://ec.europa.eu/transport/strategies/consultations/2009\_09\_30\_future\_of\_transport\_en.htm

[181]            http://ec.europa.eu/transport/strategies/events/doc/2009\_11\_20\_future\_of\_transport/
summary\_of\_the\_contributions.pdf.

[182]            This ex-post evaluation is based on data up to 2008;
where available, more recent data have been used.

[183]            COM(2001)370.

[184]            COM(2006)314.

[185]            The study can be downloaded from the internet under
http://ec.europa.eu/transport/strategies/studies/
doc/future\_of\_transport/20090908\_common\_transport\_policy\_final\_report.pdf

[186]            As described, for example, in Section 3 of Chapter II of
SEC(2001)502.

[187]            COM(2008)435.

[188]            COM(2008)436.

[189]            Cf. Art. 7(5) of Directive 2001/14/EC.

[190]            Directive 2008/101/EC.

[191]            See Art. 3 (3) TFEU.

[192]            As measured by the average amount of
passenger-kilometres covered per inhabitant in the EU.

[193]            Council document number 10917/06.

[194]            Regulation (EC) No 443/2009.

[195]            Figures provided by NGVA Europe.

[196]            i.e. beyond the limit values of Directive 2008/50/EC.

[197]            Congestion alone was estimated to cost the equivalent of
around 1% of GDP.

[198]            From 396 to 470 cars per 1,000 inhabitants in the EU27
in 1998 and 2008, respectively.

[199]            At 352 passenger cars per 1,000 inhabitants, it is
however still only at 70% of the level in the EU15.

[200]            Through Council Regulation (EEC) No 3118/93;
"Cabotage" is the transport of goods within one Member State by a
haulier from another Member State.

[201]            See Art. 8 ff of Regulation (EC) 1072/2009.

[202]            See section 3.3 below.

[203]            For more information on the three packages see
http://ec.europa.eu/transport/rail/index\_en.htm

[204]            Essentially through Directive 96/48/EC, recently repealed
and replaced by Directive 2008/57/EC.

[205]            Following the rules set out in Regulation (EU) No
913/2010.

[206]            COM(2010)475.

[207]            Based on Regulation (EC) No 549/2004 (Framework
Regulation) and others.

[208]            Cf. COM(2008)389; resulting in Regulation (EC) No
1070/2009.

[209]            See Council document 6269/10.

[210]            COM(2006)819.

[211]            Through Regulation (EC) No 1108/2009.

[212]            Regulation (EEC) No 95/93.

[213]            By Regulation (EC) No 793/2004.

[214]            COM(2009)10.

[215]            COM(2004)654.

[216]            COM(2007)616.

[217]            COM(2006)6.

[218]            Regulation (EC) No 1382/2003 (1st programme)
and Regulation (EC) No 1692/2006 (2nd programme).

[219]            This share has been calculated without taking the
transport activities of road hauliers from the EU-12 into account which took
place outside the territory of the EU-12. This step is necessary to be able to
compare road transport data with data from the other modes.

[220]            See previous footnote.

[221]            COM(2007)607.

[222]            Decision No 1692/96/EC, recently repealed and replaced
by Decision No 661/2010/EU.

[223]            Cf. Regulation (EC) No 680/2007.

[224]            Cf. COM(2009)44.

[225]            LGTT has been developed in 2008 and partially covers the
revenue risks in the early operational period of a project and hence improves
the financial viability of TEN-T investments.

[226]            Through Directive 2006/38/EC.

[227]            See Art. 91 (1) c) TFEU.

[228]            COM(93)246.

[229]            COM(97)131.

[230]            COM(2003)311.

[231]            Directive 2004/54/EC.

[232]            Commission Recommendation 2001/15/EC.

[233]            In 2009, the 12 new Member States had 16% fewer road
fatalities than in 2008.

[234]            COM(2000)142.

[235]            COM(2000)802.

[236]            COM(2005)585.

[237]            Comparable figures for earlier years are not available.

[238]            On 29 June 2009, a couple of wagons of a freight train
carrying LPG derailed and exploded at Viareggio station in Tuscany, Italy. As a
result, 32 people in the vicinity of the station were killed.

[239]            In fact, by Regulation (EC) No 881/2004.

[240]            Based on Regulation (EC) No 1592/2002; later repealed
and replaced by Regulation (EC) No 216/2008.

[241]            Directive 2004/36/EC, later repealed and replaced by
Regulation (EC) No 216/2008.

[242]            Based on Regulation (EC) No 2111/2005.

[243]            Regulation (EC) No 2320/2002, later repealed and
replaced by Regulation (EC) No 300/2008.

[244]            The “shoe bomber” in December 2001, who tried to
detonate some explosives hidden in his shoes, was flying from Paris Charles de
Gaulle to Miami. The “Christmas Day bomber” in 2009, who had some plastic
explosives hidden in his underwear, was on board a flight from Amsterdam to
Detroit.

[245]            It was imposed after a plot by British terrorists had
been unveiled who wanted to blow up several trans-Atlantic flights from London
using liquid explosives concealed in soft-drink bottles.

[246]            In view of the upcoming installation of new screening
technology at airports, it has been decided to lift that ban in April 2013. See
Commission Regulation (EU) No 297/2010 amending Regulation (EC) No 272/2009.

[247]            Essentially through Regulation (EC) No 725/2004 and
Directive 2005/65/EC.

[248]            COM(2006)79.

[249]            http://setpos.eu

[250]            http://truckparkinglabel.eu

[251]            See Council document 12083/4/10.

[252]            Cf. Art. 151 to 155 TFEU.

[253]            Following Commission Decision 98/500/EC. The sectoral
dialogue committees replaced previously existing Joint Committees which were
found to be over-institutionalised, inefficient and ineffective.

[254]            See, for example, COM(2007)616.

[255]            Directive 1999/63/EC for seafarers, Directive 2000/79/EC
for mobile workers in civil aviation and Directive 2005/47/EC for mobile
workers engaged in interoperable cross-border services in the railway sector.

[256]            According to Directive 2003/88/EC.

[257]            Directive 2002/15/EC.

[258]            i.e. drivers who are not tied to an employer by an
employment contract but who do not have the freedom to have relations with
several customers.

[259]            COM(2008)650.

[260]            Art. 10 of Regulation (EC) No 561/2006.

[261]            Through Regulation (EC) No 561/2006.

[262]            As suggested by the German Confederation of Skilled
Crafts (ZDH) in 2009 – which earned them the “Best Idea for Red Tape Reduction
Award” at the time. See also IP/09/754.

[263]            Cf. Art. 8 ff. of Regulation (EC) No 1072/2009.

[264]            See COM(2009)225.

[265]            COM(2001)188.

[266]            COM(2006)6.

[267]            Through Council Directive 2009/13/EC.

[268]            The MLC enters into force once it has been ratified by
at least 30 countries representing at least 33% of world gross tonnage. While
the tonnage requirement has been exceeded in 2009, the number of countries
having ratified the MLC was still only at 11 in late 2010. Although the Council
urged Member States in 2007 to make efforts to ratify the MLC by the end of
2010 (see Council Decision 2007/431/EC), only two EU countries have done so by
that time.

[269]            Regulation (EC) No 261/2004.

[270]            Regulation (EC) No 1071/2007.

[271]            Regulation (EU) No 1177/2010.

[272]            Regulation (EU) No 181/2011.

[273]            “Evaluation of Regulation 261/2004” Final report,
February 2010; the study may be downloaded from
http://ec.europa.eu/transport/passengers/studies/doc/2010\_02\_evaluation\_of\_regulation\_2612004.pdf

[274]            Joined cases C 402/07 (Sturgeon vs. Condor Flugdienst
GmbH) and C 432/07 (Böck/Lepuschitz vs. Air France SA);
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62007J0402:EN:HTML

[275]            By Regulation (EC) No 1008/2008.

[276]            Cf. the following article on Zeit Online: http://www.zeit.de/2010/25/Bahnverspaetungen

[277]            Regulation (EC) No 1107/2006.

[278]            “Evaluation of Regulation 1107/2006”. Final Report, June
2010; the study may be downloaded from
http://ec.europa.eu/transport/passengers/studies/doc/2010\_06\_evaluation\_regulation\_1107-2006.pdf

[279]            Art. 5(3) TEU.

[280]            COM(95)601.

[281]            http://www.civitas-initiative.org/

[282]            Directive 2009/33/EC.

[283]            COM(2007)551.

[284]            COM(2009)490.

[285]            SESAR = Single European Sky ATM Research; Regulation
(EC) No 219/2007 established a Joint Undertaking to this effect.

[286]            In the wake of Directive 2002/59/EC.

[287]            Following Directive 2005/54/EC

[288]            To push the deployment of eCall, the Commission issued
COM(2005)431 in September 2005.

[289]            COM(2008)886.

[290]            Directive 2010/40/EU.

[291]            See COM(1999)54.

[292]            http://www.cleansky.eu

[293]            http://www.green-cars-initiative.eu

[294]            COM(2007)32.

[295]            COM(2008)125.

[296]            See OJ L285 of 16 October 2006.

[297]            COM(2008)596.

[298]            See OJ C323 of 21 December 2002.

[299]            SEC(2002)381.

[300]            Source: Eurostat. This figure does not include own
account transport (transport services that firms in all sectors provide for
themselves, i.e. with their own vehicles). The construction and maintenance of
transport infrastructure and of transport means (i.e. road vehicles, ships,
trains) is not included either.

[301]            According to Eurostat, the manufacturing of transport
equipment provides an additional 1.7% to value added and 1.5% to employment.

[302]            European Commission, DG Mobility and Transport: The
future of transport - Focus groups’ report, 2009.

[303]            Source: Eurostat Input-Output tables.

[304]            A list of policy measures is provided in Appendix 4.

[305]            A short description of these models is provided in
Appendix 5.

[306]            European Commission, DG Economic and Financial Affairs:
2009 Ageing Report: Economic and budgetary projections for the EU-27 Member
States (2008-2060). EUROPEAN ECONOMY 2|2009,
http://ec.europa.eu/economy\_finance/publications/publication14992\_en.pdf. The
“baseline” scenario of this report has been established by the DG Economic and
Financial Affairs, the Economic Policy Committee, with the support of Member
States experts, and has been endorsed by the ECOFIN Council

[307]            Demographic projections in the Reference scenario are
common in PRIMES, TRANSTOOLS, PRIMES-TREMOVE transport model, TREMOVE and
GEM-E3.

[308]            European Commission, DG Employment: People with disabilities
have equal rights - The European Disability Strategy 2010-2020,
http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=591&type=2&furtherPubs=no

[309]            European Commission, DG Economic and Financial Affairs:
2009 Ageing Report: Economic and budgetary projections for the EU-27 Member
States (2008-2060). EUROPEAN ECONOMY 2|2009.

[310]            Net migration is accounted in the projections on
population growth.

[311]            Eurostat (population and social conditions), Statistics
in Focus No 94/2009.

[312]            Result of the GEM-E3 model.

[313]            European Commission, DG Economic and Financial Affairs:
2009 Ageing Report: Economic and budgetary projections for the EU-27 Member
States (2008-2060). EUROPEAN ECONOMY 2|2009,
http://ec.europa.eu/economy\_finance/publications/publication14992\_en.pdf

[314]            GDP projections in the Reference scenario are common in
PRIMES, TRANSTOOLS, PRIMES transport model, TREMOVE and GEM-E3.

[315]            Communication from the Commission: Europe 2020. A
strategy for smart, sustainable and inclusive growth. COM(2010)2020, Brussels,
3.3.2010.

[316]            European Commission, DG Economic and Financial Affairs:
2009 Ageing Report: Economic and budgetary projections for the EU-27 Member
States (2008-2060). EUROPEAN ECONOMY 2|2009,
http://ec.europa.eu/economy\_finance/publications/publication14992\_en.pdf.

[317]            European Commission, DG Economic and Financial Affairs:
Sustainability Report 2009. EUROPEAN ECONOMY 9|2009,
http://ec.europa.eu/economy\_finance/publications/publication15998\_en.pdf.

[318]            European Commission, DG Economic and Financial Affairs:
Public Finances in EMU 2010. EUROPEAN ECONOMY 4|2010,
http://ec.europa.eu/economy\_finance/publications/european\_economy/2010/pdf/ee-2010-4\_en.pdf.

[319]            European Commission, EU Energy and Transport in Figures,
2010 http://ec.europa.eu/transport/publications/statistics/statistics\_en.htm.

[320]            International Energy Agency, Transport, Energy and CO2:
Moving Towards Sustainability, 2009.

[321]            BP, Statistical Review of World Energy 2010,
http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622

[322]            The IEA Energy Technology Perspectives 2010 assumes 115
$/barrel in 2008 prices for 2030 and 120 $/barrel for 2050. The IEA 2010 World
Energy Outlook assumes an oil price around 110 $/barrel for 2030 in the “New
Policies Scenario”.

[323]            The oil price projections are the result of world energy
modelling with the PROMETHEUS stochastic world energy model, developed by the
National Technical University of Athens (E3MLab). The oil price assumptions are
common in PRIMES, TRANSTOOLS, the PRIMES-TREMOVE transport model, TREMOVE and
GEM-E3 models.

[324]            This would translate into an oil price of 91 €/barrel in
2030 and 118 €/barrel in 2050.

[325]            Result of the PROMETHEUS stochastic world energy model.

[326]            International Energy Agency, Transport, Energy and CO2:
Moving Towards Sustainability, 2009.

[327]            The Reference scenario does not cover the European
Commission CARS 21 (Competitive Automotive Regulatory System for the 21st
century) initiative. In addition, the Reference scenario was finalised in
2009/early 2010 and does not capture the recent initiatives of car manufacturers
as regards electric vehicles (hereinafter “EV”).

[328]            Whereas most EU-15 Member States seem to reach a
saturation level for growth in passenger car activity, the results of faster
economic growth and rising car ownership levels would translate into higher
growth in passenger car activity in the EU-12.

[329]            The share of total road transport (including buses and
coaches and powered 2-wheelers besides passenger cars) in total passenger
transport would be about 79% in 2030 and 77% in 2050.

[330]            The shares are expressed in passenger-kilometres.

[331]            Result of the GEM-E3 model.

[332]            International Energy Agency, Transport, Energy and CO2:
Moving Towards Sustainability, 2009.

[333]            International Energy Agency, Transport, Energy and CO2:
Moving Towards Sustainability, 2009.

[334]            United Nations Conference on Trade and Development
(UNCTAD), Review of maritime transport 2009.

[335]            An increase in the consumption of biofuels may also
trigger higher demand for the transport of agricultural bulks to supply
bio-refineries.

[336]            World Bank, World Development Report 2009: Reshaping
economic geography.

[337]            ESPON project, Territorial Dynamics in Europe: Trends in
Accessibility, Territorial Observation No. 2, 2009.

[338]            Accessibility here is based on the concept of “potential
accessibility”, which assumes that the attraction of a destination increases
with size, and declines with distance, travel time or cost. More specifically,
accessibility is defined as the generalised transport costs from zone i
to zone j for segment r (commodity group or trip purpose) in year
t, weighed with the traffic volumes.

[339]            European Commission, Directorate-General for Regional
Policy (2009), Promoting Sustainable Urban Development in Europe: Achievements
and Opportunities, http://ec.europa.eu/regional\_policy/sources/docgener/presenta/urban2009/urban2009\_en.pdf.

[340]            United Nations, Department of Economic and Social
Affairs/Population Division (2009), World urbanisation prospects - The 2009
revision, http://esa.un.org/unpd/wup/index.htm

[341]            World Bank, World Development Report 2009: Reshaping
economic geography.

[342]            EEA, 2010. The European environment — state and outlook
2010: urban environment. European Environment Agency, Copenhagen.

[343]            EEA, 2010. The European environment — state and outlook
2010: urban environment. European Environment Agency, Copenhagen.

[344]            Clifton, K., Ewing, R., Knaap, G. and Song, Y., 2008.
Quantitative analysis of urban form: a multidisciplinary review. Journal of
Urbanism. Vol. 1, No. 1, March 2008.

[345]            Total CO2 emissions include international
bunkers (aviation and maritime) but exclude combustion emissions from pipeline
transportation, ground activities in airports and harbours, and off-road
activities.

[346]            No statistics are available for the share of CO2
emissions from urban transport. The current estimates are based on the PRIMES
transport model and TREMOVE results.

[347]            Regulation (EC) No 443/2009 of the European Parliament
and of the Council of 23 April 2009 setting emission performance standards for
new passenger cars as part of the Community’s integrated approach to reduce CO2
emissions from light-duty vehicles, OJ L 140, 5.6.2009, p. 1–15.

[348]            EEA, 2010. The European environment — state and outlook
2010: urban environment. European Environment Agency, Copenhagen.

[349]            http://www.euro.who.int/\_\_data/assets/pdf\_file/0017/43316/E92845.pdf

[350]            SILENCE project (Integrated Project co-funded by the
European Commission under the 6th Framework Programme for R&D): SILENCE
Practitioner Handbook for Local Noise Action Plans,
2008,http://www.silence-ip.org/site/fileadmin/SP\_J/E-learning/Planners/SILENCE\_Handbook\_Local\_noise\_action\_plans.pdf

[351]            EEA, 2010. The European environment — state and outlook
2010: urban environment. European Environment Agency, Copenhagen.

[352]            The CO2 emissions include international
maritime and aviation but exclude combustion emissions from pipeline
transportation, ground activities in airports and harbours, and off-road
activities.

[353]            There is also concern regarding aviation’s total climate
impact which has been estimated by the IPCC as being two to four times higher
than the effect of CO2 emissions alone due to releases of nitrogen oxides,
water vapour, sulphate and soot particles (excluding cirrus cloud effects).

[354]            Regulation (EC) No 443/2009 of the European Parliament
and of the Council of 23 April 2009 setting emission performance standards for
new passenger cars as part of the Community’s integrated approach to reduce CO2
emissions from light-duty vehicles, OJ L 140, 5.6.2009, p. 1–15.

[355]            Directive 2009/28/EC of the European Parliament and of
the Council of 23 April 2009 on the promotion of the use of energy from
renewable sources and amending and subsequently repealing Directives 2001/77/EC
and 2003/30/EC, OJ L 140, 5.6.2009, p. 16–62.

[356]            The share of renewables in transport reported here
follows the definition from the Directive 2009/28/EC.

[357]            The Reference scenario does not cover the European
Commission CARS 21 (Competitive Automotive Regulatory System for the 21st
century) initiative. This initiative may trigger a higher uptake of electric
propulsion vehicles by 2050 in the Reference scenario which is currently
negligible. In addition, the Reference scenario was finalised in early 2010 and
does not capture the recent initiatives of car manufacturers as regards
electric vehicles. As a result, the penetration of EVs might be higher and
transport sector oil dependency might be lower in the Reference scenario.

[358]            The CO2 emissions from transport include
international maritime and aviation but exclude combustion emissions from
pipeline transportation, ground activities in airports and harbours, and
off-road activities.

[359]            The CO2 emissions from transport include
international maritime and aviation but exclude combustion emissions from
pipeline transportation, ground activities in airports and harbours, and
off-road activities.

[360]            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.

[361]            The decomposition analysis only takes into account the
tank-to-wheel emissions, under the assumption that
biofuels are carbon neutral.

[362]            WHO, 2005. Air Quality Guideline. Global update 2005.
World Health Organisation Regional Office for Europe.

[363]            WHO, 2007. Health relevance of particulate matter from
various sources. Report on a WHO Workshop Bonn, Germany, 26–27 March 2007.
World Health Organization Regional Office for Europe.

[364]            Directive 2008/50/EC of the European Parliament and of
the Council of 21 May 2008 on ambient air quality and cleaner air for Europe,
OJ L 152, 11.6.2008, p. 1–44.

[365]            Directive 2001/81/EC of the European Parliament and of
the Council of 23 October 2001 on national emission ceilings for certain
atmospheric pollutants, OJ L 309, 27.11.2001, p. 22–30.

[366]            EEA, 2010. The European environment — state and outlook
2010: air pollution. European Environment Agency, Copenhagen.

[367]            EEA, 2010. NEC Directive status report 2009: Reporting
by the Member States under Directive 2001/81/EC of the European Parliament and
of the Council of 23 October 2001 on national emission ceilings for certain
atmospheric pollutants, No 10/2010.

[368]            More in TEEB (The Economics of Ecosystems and
Biodiversity): http://www.teebweb.org/
and http://ec.europa.eu/environment/nature/biodiversity/economics/index\_en.htm

[369]            http://www.eea.europa.eu/publications/eu-2010-biodiversity-baseline/eu-2010-biodiversity-baseline

[370]            The costs are expressed in year 2005-€.

[371]            See e.g. PWC (2008), The world in 2050.

                http://www.pwc.com/en\_GX/gx/world-2050/pdf/world\_in\_2050\_carbon\_emissions\_08\_2.pdf

[372]            International Energy Agency 2010, Energy Technology
Perspectives: 2010. Please note that the IEA MoMo model currently does not
enable a projection for shipping and air cargo transport. Therefore,
international shipping activity in the Energy Technology Perspectives 2010 is
based on growth projections from the International Maritime Organisation.

[373]            International Energy Agency, Transport, Energy and CO2:
Moving Towards Sustainability, 2009.

[374]            On 28 October 2009 the European Commission adopted a new
legislative proposal to reduce CO2 emissions from light commercial
vehicles (vans). The draft legislation is closely modelled on the legislation
on the CO2 emissions from passenger cars (Regulation 443/2009) and
it is part of the Integrated Approach taken by the Commission in its revised
strategy to reduce CO2 emissions from cars and light commercial
vehicles (COM(2007) 19 final).

[375]            The model has been developed by the
Energy-Economy-Environment modelling laboratory of National Technical
University of Athens.

[376]            Ibid Footnote 381.

[377]            PRIMES-TREMOVE transport model
uses mathematical formulations which are not based on single price elasticity,
as reduced-form models do. Price elasticities are quantified ex-post based on
the results of the whole model, and their ex-post value changes with the policy
and technology assumptions that are included in each scenario. In other words
the modeling approach is based on variable (not fixed) price elasticities.

[378]            The others were internet access,
real estate services and investments, pensions and securities.
http://ec.europa.eu/consumers/strategy/docs/4th\_edition\_scoreboard\_en.pdf

[379]            OECD, 2009. Improving Reliability on Surface Transport
Networks

[380]            idem.

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