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Pricing: White Paper

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1) OBJECTIVE

To show the need for gradual harmonisation at Community level of the charging principles applied in the various commercial modes of transport.

2) COMMUNITY MEASURE

White Paper, presented by the Commission on 22 July 1997: Fair payment for infrastructure use: A phased approach to a common transport infrastructure charging framework in the EU.

3) CONTENTS

Escalating congestion and pollution raise doubts about the sustainability of transport. Transport charges can help address these issues in that they influence prices, which in turn can change transport use.

However, transport charging systems differ greatly between Member States. For example:

  • There are nine different railway infrastructure charging systems;
  • Annual taxes on lorries vary between Member States by up to ECU 3000;
  • Only four Member States levy tolls on a large part of their motorway network;
  • VAT charges and energy taxation vary considerably between transport modes and Member States.

The White Paper outlines the transport problems that result from current charging systems. Charges and taxes that do not reflect transport sector costs result in:

  • distortions of competition between Member States;
  • distortions of competition between different modes of transport and within modes;
  • the failure to consider environmental and social aspects of transport;
  • difficulties in funding infrastructure investments.

These distortions are often thought of as specific problems isolated from one another, such as modal imbalance, congestion and pollution.

The White Paper then sets out a Community approach to infrastructure charging with four aims:

  • to improve the overall efficiency of the provision and use of European transport infrastructure;
  • to promote fair competition;
  • to safeguard the single market;
  • to enhance the sustainability of the transport system.

This approach is based on four fundamental concepts:

  • the same fundamental principles should apply to all commercial modes of transport in each Member State of the European Union;
  • infrastructure charges should be based on the "user pays" principle;
  • charges should be directly related to the costs that users impose on the infrastructure and on others;
  • charges should promote the efficient provision of infrastructure.

According to the White Paper, the only approach that fully satisfies these criteria is marginal social cost charging, i.e. charging users for both internal and external costs (operating costs, infrastructure damage costs, congestion costs, environmental costs and accident costs) that they impose at the point of use.

Transport undertakings that face the real costs would have incentives to adjust transport choices, for instance:

  • using vehicles that are less polluting and safer;
  • choosing routes and logistics with lower levels of road damage, congestion, accident risks and environmental impact;
  • switching to another mode of transport.

This transport charging system will also give incentives to promote transport safety.

Various Commission studies show that the introduction of such a charging policy should lead to social benefits of ECU 30-80 billion per year.

To take into account the different situations of the various modes of transport in respect of Community legislation and the complex issues involved in developing new charges, the Commission advocates step-by-step implementation of the common charging framework. Three phases are proposed:

  • 1998-2002: introduction of charging systems for railway infrastructure and airports;
  • 2001-2004: harmonisation and adjustment of charging systems, in particular for heavy goods vehicles and rail transport;
  • beyond 2004: revision of the Community framework in the light of experience drawn from the first two phases.

The White Paper outlines the priority actions to be taken in the first two stages. Apart from the development of consistent costing and accounting practices, measures are envisaged:

  • for road transport: electronic charging, electronic fee collection systems, funding of road-pricing research, development of harmonised methods for determining road infrastructure costs, analysis of the treatment of road accident costs, revision of State aid legislation, etc.
  • for rail transport: proposal for a directive on rail infrastructure charging, revision of State aid legislation;
  • for inland waterways: revision of State aid legislation;
  • for aviation:
    - measures relating to air traffic services, covering air transport and the environment, the taxation of aviation fuel, pollution charges and levels, and the financing of air traffic management infrastructure;
    - measures relating to airports, covering airport charges, airport capacity and airport cost developments in the EU;
  • for maritime transport: increased transparency of port financing.

Measures are also planned in the field of transport-related tax policy.

Finally, the White Paper gives a socio-economic evaluation of the proposed strategy, analysing the general economic effects, the distributional effects and the effects on peripheral or less developed regions.

4) DEADLINE FOR IMPLEMENTATION OF THE LEGISLATION IN THE MEMBER STATES

Not applicable

5) DATE OF ENTRY INTO FORCE (if different from the above)

Not applicable

6) REFERENCES

COM(1998) 466 final
Not yet published in the Official Journal

7) FOLLOW-UP WORK

8) COMMISSION IMPLEMENTING MEASURES

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