The influence of access fees on the competitiveness of railway transport

11. Juni 2008 zur Übersicht

A sustainable transport policy must reinforce environmentally friendly opportunities for mobility

Address to the 'RAILWAY MARKET FORUM', June 11, 2008, Warsaw, Poland

Ladies and Gentlemen,

I would like to express my sincere thanks for the invitation to attend the RAILWAY MARKET FORUM, and for the privilege of giving the speech here today.
I would like to tie in with a subject that in the last year has preoccupied politics, the economy and society like no other: climate change. Many studies - starting with the Stern report in automn 2006 - have been published, many shocking news have alarmed politics. But despite all new awareness and all declarations of good intent I fear that still too little action is undertaken.

Looking only at the EU we notice that we are lacking behind in terms of reaching the Kyoto targets decided in 1997. Only two percent of the EU-15 target of minus 8 percent are achieved. Spain's emissions, for instance, were skyrocketing in past years and they reach a significantly higher level than the agreed plus of 15 per cent. Germany reached a reduction of 17 per cent of which 15 per cent were achieved just by the breakdown of the eastern German economy in the beginning of the 1990ies. But Germany is on a good way forward to fulfil the agreed CO2-reductions of minus 21% by 2012.

Looking at the new Member States we notice that thanks to the restructuring of economies after 1989 significant reduction of CO2 emissions have been achieved. Poland, for example, is supposed to reduce emissions by 6 per cent until 2012 but achieved already more than 30 per cent. This situation applies for most of the eastern and central European economies. Kyoto 1 is in this respect for the new Member States easy to achieve. However, these countries will have a heavier burden when it comes to Kyoto 2 and the reduction goals after 2012. Rather sooner than later everyone should recognise: If we can't stop emissions to grow - and if we don't manage to lower them significantly - climate change will not be stopped.

A growing cause of this change is transport, which, in the European Union, now accounts for almost 30% of all CO2-emissions. Although they are harmful to the climate, they are even growing. Despite this, the wrong political course seems to have been set across the board: large subsidies for the climate culprits motor vehicles and aeroplanes, yet more and more new barriers and burdens for the railways. Consequently, transport continues to grow, and nullifies the expensive emission reductions achieved in other sectors. Since 1990, sectors like industry and housing have decreased CO2 emissions by 10%.

The problem can be simply illustrated by the example of a yoghurt pot. By the time it has reached supermarket shelves, a strawberry yoghurt has travelled almost 10 000 km on our roads. And despite its long journey, it only costs around 40 Eurocents. Prawns from Scandinavia are carried by truck on the road to Morocco where they are peeled before they take their journey back on Europe's roads to reach plates in Paris, London or Oslo. Because transport costs are transmitted to the environment and thus to the tax payer - as well on the road as in the air - it is not a cost factor anymore for business.

The result is an ever growing transport sector. Food transport has doubled in the last 20 years, and heavy traffic on German roads has tripled since the 1980s. How transport increases without a significant benefit is clearly demonstrated by the following example: Great Britain imports exactly as much porc meat every year as it exports - 1,5 million tonnes. In other words: A lot of emissions for no value!

Between 1993 and 2000 the number of air passengers in the EU rose by around 10% a year. Transport in Europe is too cheap - it is only the environmentally friendly options that are too expensive. Consequently, the modal shift of traffic from the roads to the railways is thwarted by the framework conditions.

Traffic increases are also a reason why CO2-emissions, with its devastating effects on the climate, have not fallen but risen by at least 1% a year between 2000 and 2004. Emissions of this pollutant have increased by almost 25% since 1990. In air transport they have doubled. In the EU, mobility causes just under 30% of all CO2 emissions, and as much as 40% in towns and cities. And if you look at all climate damaging emissions, the transport sector is responsible for 70 percent in cities. Approximately two thirds of imported oil is needed in the transport sector, which is 96% dependent on oil. Everyone wants to move away from oil, everyone wants to combat climate change - yet nearly everyone is ignoring the transport sector. This strategy is doomed to failure!

A closer examination of our mobility reveals an anachronism: the climate-damaging modes of transport are highly subsidised in everyday life, whereas the more environmentally friendly ones are subject to tax. As you can see in the present slide: as a result of this framework the share of road transport has been rising. Railways lost share to only 16 percent in 2005. Today it is even lower at about 14 percent. While lots of responsible politicians continue to preach solar and wind power but consume oil, they are bound to fail.

The railways are indisputably the most environmentally friendly mode of mobility. As such, they should actually be encouraged and supported, but the opposite is the case. In the EU it is mandatory for tolls to be levied on all trains on all rail tracks in the form of route prices. Poland, Slovakia and six further new Member States have the highest rail tolls for freight transport, while roads are still toll-free or nearly toll-free.

And yet for its keenest and most polluting competitor, road transport, however, tolls are charged mainly only on motorways and as a rule only for lorries above 12 tonnes. There is an upper limit on these tolls, external costs may not currently be internalised, and toll charging is voluntary for the member states.
Under these circumstances it is not surprising that freight transport in particular is at home on Europe’s roads. Incidentally, the United States, the land of the highway, is an example to us here, with 40% of freight being transported by rail as opposed to the EU’s pitiful 14%.

Switzerland has demonstrated how this situation can be changed. Its lorry toll, which applies to all lorries on all roads and, following a further increase, is five times higher than in Germany, has resulted in the transfer of petroleum transport, for example, back from the roads to the railways. Before the introduction of the tolls, 70% of petroleum was carried by road, whereas now 70% goes by rail. In Switzerland there has been neither a shift from motorways to other major roads, nor from larger to smaller lorries. And consumer costs still rose by only 0.5%. There really is no more cost-effective way to fight climate change. With the allocated money the Swiss build new railway tracks such as the Lötschberg- and the Gotthardt tunnel. To ensure the success of these investments Switzerland stopped building new trans-alpine highways and introduced a night- and weekend-ban on driving for trucks.

During my last visit to Spain on a delegation trip of the European Parliament's Transport Committee I noticed a remarkable situation: toll highways seemed pretty empty while toll-free national roads, leading parallel to them, were overcrowded with lorries. Unfortunately Spain is not the only member state luring trucks away from highways to national roads by offering the latter for free. France as well as Germany, two major transit countries in Europe, do the same. It seems absurd to invest billions in highway infrastructure without adapting the price system. The Swiss example shows: lorry tolls have to be charged for the use of every road. If not, the effect to increase a modal shift away from the roads will not appear. Already today the Eurovignette directive opens up the opportunity to all Member States to charge road transport on all roads, not only on highways. Governments should no longer hesitate to use this tool.

In this context I am looking forward to the review of the Eurovignette directive and the proposals of the EU commission to internalise external costs, probably in the beginning of July this year. Now it is time that all costs caused by road transport have to be covered by the producer. This includes more than only infrastructure costs but also costs resulting out of noise, environmental damages and - not least - climate change. However, looking at what we have already heard about the Eurovignette proposal I am afraid that the commission is not fully considering the gravity of the situation.

Despite of all the positive ideas, in particular the extension of the scope to the entire network of all roads and for all heavy road vehicles more than 3,5 t - major aspects remain, so far, uncovered by the proposal.

Whereas climate change is undisputable one of the biggest problems of our days it is not taken into account for the criteria for external costs. The same applies to a large extent also to costs for landscape damage and space use. Congestion on the contrary is the main criteria for internalisation of external costs - once again a rather economical and not ecological approach of the Commission. We also criticise that mark-ups for mountains and other sensitive regions have not been extended which would be necessary especially for the Alps.

The Eurovignette review probably carries on with two mistakes of the current situation. First, there will be again a maximum for the charges - unlike to the amount charged for the use of rail infrastructure. Second, there is so far no new proposal on revenues from charging. We, the Greens in the European Parliament, would welcome clear incentives for the cross-financing of rail roads and sustainable infrastructure investments with the money allocated from road use. Back in the days we had the reverse situation: the first highways in Germany were financed by the profit of the railways.

Seeing the fact that there are still Member States in the EU, in particular the new Member States, not charging for road uses while charging for railways we suggest a binding link with the possibility of receiving EU infrastructure aid. In other words: if a Member States doesn't charge trucks on highways it shouldn't receive EU co-financing for infrastructure, such as TEN-T funds.

I hope that some of these points will be still taken into account during the coming legislative process. If not, I fear that the unfair competition between road and rail will remain unchanged.

It is not only road and rail that are in unfair competition. The situation with air transport is also anachronistic. The tax exemption for kerosene - introduced more than half a century ago as a financial boost to help the infant air transport industry get started - currently permits airlines to transport their customers at a ‘taxi price’ between major European cities. As a result, not only their competitors, the taxpaying railways, fall by the wayside, but also the climate, which suffers extremely due to booming air transport. Aircraft emissions in the stratosphere are three to four times more harmful than those of industry and ground transport. Yet air transport is still exempted from the emission trading system, while the railways are included in the system via the electricity price. Airlines are as well exempted from the value added tax (VAT) on international tickets while railways have to pay. As a result it can be cheaper for a family to fly from Warsaw to Mallorca than to take the train to the beautiful lakes of Masuria.

Not all countries give preferential treatment to air transport with its harmful effects on the climate. The Netherlands, for example, taxes kerosene on its very few internal flights just as the United States and Canada do. My party, the Group of the Greens in the European Parliament, is calling for this tax to apply to all flights in the EU, and plans to use the 14 billion euros a year in anticipated receipts to modernise Europe’s railways and to realise a modal shift. With only 1 Euro per 100 km of air travel, the costs for the consumer is acceptable - particularly when compared to the costs of billions of Euros which would be incurred by doing nothing and allowing unchecked climate change.
The best course of action would be to emulate the success story of Germany’s Renewable Energy Act, which is now considered an example in Europe in terms of forward-looking energy. This Act makes fossil fuels more expensive for consumers, in order to promote and improve the competitiveness of renewable energy. This is a step in the right direction. Applying this to transport, the environmentally friendly railways would need to be privileged at the expense of road and air transport. For the time being, I would even be pleased if we could achieve the modest result of fair and equal competition between the various modes of transport.

The proposals are on the table. Let me please highlight once again some major tasks to be fulfilled for the necessary turn in Europe's transport policy:

? Introduction of a European climate-protection tax on aviation fuel. This revenue of 14 Billion € a year is necessary for the funding of international rail connections.

? Increase of European lorry tolls based on the polluter pays principle, with the social cost of road haulage factored into the charges, reduction of the liability threshold to 3.5 tonnes and gradual extension of the toll system to the entire road network.

? Air and sea transport must be included into the CO2-emissions trading system under Kyoto II. Tax privileges, subsidies and grants, including those for inland waterway transport, must be eliminated.

The European Union and the United Nations have put climate protection right at the top of the agenda. EU Member States have the opportunity to take specific European-wide measures that really combat climate change. Transport cannot be disregarded again in this process. At the very least, a level playing field needs to be established for the railways, by curtailing the traditional privileges of those modes of transport that harm the climate.

Thank you very much for your attention.