Beyond Eurovignette

Nina RenshawEESC Seminar, Liège,

25 November 2010

www.transportenvironment.org

Beyond Eurovignette

Where are we now?

-In theory

-In practice

-Real world

How far from full internalisation?

Top 3 next steps

In theory: Road freight price elasticities

• Road freight very elastic• vkm-to-vkm -0.9• tkm-to-tkm -1.0

Source: Significance/CE ‘Price Sensitivity of European road freight transport’ for T&E

In practice: How and why road charging

works

Major effect = more efficient road transport

Minor effect = modal shift

In practice: German Maut effect on transport distances

Before Maut: avg distance +4% / yrAfter: slight decline

• Distance-based Charging(Green): AT, DE, CZ

• Time-based Eurovignette(Orange): SE, DK; BE, NL, LUX

• National Vignettes (Yellow): RO, BG, PO, LT

• Toll collection with physicalbarriers (pink): GR, SI, IT, FR, SP, PT

• No charges (purple): UK, IE, FI, EE, LV

• nb. Switzerland – non-EU, ownrules: distance-based charges with external cost internalisation on all national road network.

Charging schemes 2009

Update 2010 – National progress faster than EU

• SK: 1 Jan 2010• PT: 2010-11• PL: 1 July 2011• FR: 2012• HU: 2013, incl Cars• BE: agreement 2010,

start in 2013?• DE – more

Bundesstrassen

Road: miles away from full internalisation

• Air & noise – artificially low caps, esp sensitive regions

• Congestion – an external cost• Accidents• Climate change• Biodiversity / Habitat impacts• Soil, Water

• Commercial transport is the logical first step (EU internal market) – Will it encourage national-level road user charging for cars?

Top 3 next steps

1. Tax-free aviation

Flying: the cheapest

and fastest route to climate change!

ETS is not a serious incentive

• €4/tonne CO2 = €0.01/litre kerosene

• Vs. Minimum petrol / diesel taxes €0.36 / 0.33 per litre

• ETS cuts aviation emissions by max 3%

VAT exemption: Ticket taxes as a first step

• UK is only country with serious ticket tax• Others following: DE, AT (IE, FR)• EC should take lead in closing loophole• National governments should

– not brand ticket taxes as environmental taxes but clarify VAT exemption

– Work together the close the loopholes

Fuel / emissions taxationnecessary and possible

• UK to transform its ticket tax into emission-based charge

• Again EU should show the way

• And EU national governments should work together in establishing joint approaches

• Fuel tourism can be avoided by charging route-based fuel / emissions

2. Cheap diesel

Diesel prices June 2010

Importance of fuel taxation requires only little illustration

Changes in fuel taxes since Nov 2009

-12

-9

-6

-3

0

3

6

9

12

15

18

21

24

27

Austri

aBelg

iumBulg

aria

Cypru

s

Czech

Rep

ublic

Denm

ark

Estonia

Finla

ndFr

ance

Germ

any

Greec

eHun

gary

Irelan

dIta

lyLa

tvia

Lithu

ania

Luxe

mbo

urg

Malt

aNet

herla

nds

Poland

Portu

gal

Roman

iaSlov

akia

Sloven

iaSpa

inSwed

en

United

King

dom

EU27 a

vera

gechan

ges

in E

UR

cts

per

litre

petrol

diesel

French ‘taxe carbone’ failure more exception than rule

EC likely to propose to level petrol and diesel minimum rates, PER GJ

‘diesels in Europe may provide significant fuel savings to individual drivers, but probably do not provide significant national energy or CO2 savings on average across the 8

countries studied. Almost certainly, taxing diesel fuel lightly relative to gasoline is counterproductive from an

energy savings and CO2 point of view since it contributes to a higher rebound effect (by lowering the

cost per km of driving diesels).’(IEA/Berkeley)

Good idea!

Cheap diesel FUEL is not needed to give diesel CARS a chance

UK SW

ESPT

NL

LUX

IT

IRL

GR

DE

FR

FIDK

BE

AT

0%

10%

20%

30%

40%

50%

60%

70%

80%

0 5 10 15 20 25 30

petrol tax minus diesel tax Oct 09 (cents / litre)

die

sel s

har

e in

new

car

s sa

les

2009

(%

)

Avoiding commercial diesel tourism

1. Put pressure on laggards to raise tax levels and to accept higher EU minimum rates

2. Introduce km charging for trucks

3. EU border checks to limit cheap diesel imports into EU

3 Private benefits of company cars

Favourable tax regime

• Per car €4000-8000 purchase subsidy • Total indirect subsidy (:tax on private use of co. cars +

company subsidies vs. normal tax rate): €54bn (0.5% of EU GDP)

• Belgium: 1.2% of GDP; Germany 0.9%; Hungary 0.8%.• 21-43 MT CO2 induced! = 4-8% CO2 from ALL cars in

Europe• Eq. 8-21 million extra cars on the road

Recommendations• 1) Reduce indirect purchase price subsidies• 2) Increase rates for benefit-in-kind;• 3) Tackle free fuel etc. for private trips

Policy conclusions: EurovignetteRoad freight more price sensitive than often

assumed= efficiency gains: full trucks, shorter distances= even if there is no rail or water alternative

Megatrucks do not cut emissions= Lower emissions per tkm fully mitigated by

increased vkm (rebound)

Still a long way to go to internalise road freight costs: Hungarian Presidency, next steps from EC, and Energy Tax proposal

To do list• Close aviation tax loopholes

– VAT and CO2 based taxes– member states and EC cooperation

• Fuel taxes based on energy and emissions– Level playing field for diesel– Reduce ‘tank tourism’

• Company cars– Cut harmful subsidies (EC WP?)