Brussels, 18 September 2012
Research and innovation for Europe's future mobility
What's the issue?
The EU's oil import bill was 210 billion euros in 2010 and oil prices will increase. Transport is to about 95% dependent on fossil fuels. If we do not address this oil dependence, people’s ability to travel and the costs of goods transport could be severely impacted with dire consequences on the overall competitiveness of the EU economy.
The European Union has committed to reducing its greenhouse gas emissions, with the goal of limiting climate change below 2ºC. A reduction of at least 60% of GHGs by 2050 with respect to 19901 is required from the transport sector, which is a significant and still growing source of GHGs.
Innovative technologies need to be deployed quickly to reduce Europe's dependence on oil and GHGs and make sure that our mobility is maintained. New technologies are also essential to winning the global race for sustainable mobility, keeping the European transport industry competitive whilst preserving jobs in Europe and supporting economic growth.
Europe's citizens and industry could benefit from increased cooperation and prioritisation in transport research and innovation. This requires, among others, the development, with all transport stakeholders involved, of ambitious and accelerated research and deployment roadmaps for innovative technologies that will help to achieve sustainable mobility in Europe.
Who will benefit and how?
Citizens: the strategy aims at providing a safer, greener and sustainable European transport system.
Industry: developing and deploying innovative technologies will support European industry competitiveness and create jobs.
Why does action have to be taken by the EU?
This is a Europe-wide issue that cannot be successfully resolved by individual Member States.
A drive against fragmentation of research and innovation efforts in transport for the deployment of new technologies is more effective if coordinated at European level.
Europe has at its disposal a range of instruments that can usefully contribute to the implementation of the strategy (European funding programmes, coordinating platforms, public-private partnerships, national programmes cooperation structures).
What exactly will change?
All actors involved in bringing novel transport technologies and services to the market will participate in a process that aims at steering Europe towards sustainable mobility.
European research and innovation activities in transport will be better coordinated to define priorities for actions and investments to deploy innovative technologies and services.
Facts and Figures
The overall investments dedicated to transport-related research and development (R&D) in the EU from all public funders and industry exceeded €43 billion in 2008. They are dominated by corporate investments (90.4%), in particular from road transport industries, while public funds from EU Member States account for 8.2% and those from the EU through FP7 for 1.4%.
All modes dedicate an important part of their R&D efforts to technologies that can reduce emissions of greenhouse gases. For the road and civil aviation sector, this part has been estimated to be at least one third, and around 45% and 20% for waterborne and rail transport, respectively.
For manufacturers of transport equipment, innovative products contribute to almost half (car manufacturers) and more than 30% (manufacturers of other transport equipment) of their turnover.
Transport service providers sell a homogenous good that differs mainly through price, implying that innovative products contribution to the total turnover of the sector is very limited (less than 15%).
It is estimated that at the EU-25 level, public bodies purchase around 110,000 passenger cars, 110,000 light duty vehicles, 35,000 heavy duty vehicles, and 17,000 buses (PricewaterhouseCoopers, 2005). Nevertheless, the potential for innovation through public procurement is currently under-exploited in the EU. Most public purchases do not put a premium on innovation; besides, the fragmented public 58 procurement markets often remain too small to reach a critical mass for innovation (European Commission, 2010).
EU-based transport companies hold a large share in global transport-related R&D investment (43% of the total), followed by companies with headquarters in Japan and the USA.
Corporate R&D investments are highly concentrated in few companies. In 2008, only 30 companies (i.e. 15% of the total number) accounted for around 80% of the world R&D investment in transport. This is even stronger for the EU where 80% of the R&D investment is due to the contribution of only 12 companies.
Research efforts of the automotive industry – and in particular those of the car manufacturers – are clearly dominating, followed by those of the aviation sector. R&D investments in rail and waterborne are more limited, when comparing the absolute values with road and air. However, when setting the R&D investments in relation to the net sales of the sectors – i.e. R&D intensity – this heterogeneity becomes less pronounced. In 2008, R&D intensities in the road sector are around 5.2% (5.3% for passenger cars; 3.5% for commercial vehicles and 6% for automotive suppliers), while aviation (civil aeronautics) shows significantly higher (7.8%) and rail (3.9%) and waterborne (3.2%) slightly lower values.
Around 56% of the total R&D investment stemmed from German-based companies (e.g. Volkswagen, Daimler, Bosch, BMW, Continental) followed by French (19%) and Italian-based industries (10%).
Currently, the EU and its Member States may not exploit the full potential of joint technology-push mechanisms through alignment of R&D efforts. This may be influenced by the heterogeneous institutional set-up of transport policy making and research across Member States, but also by divergent transport research policies, reflecting differences in the countries’ industrial, regional, geographic, and historical characteristics. Measures to overcome the fragmentation in R&D, such as European Research Area Networks (ERA-NETs) are considered successful, but transnational research activities still remain a very small fraction of the total national R&D investments except for a few cases such as the Fuel Cells and Hydrogen Joint Technology Initiative. Despite the relatively limited volume of transnational calls (that has been augmented significantly by the recent call Electromobility+), they have an important leverage effect.
There is some indication of shortage of highly skilled workforce in the European transport sector. The German Association of engineers reports a lack of 68700 engineers in Germany in April 2011, out of which 29200 are missing in the automotive and machinery manufacturing sectors (VDI, 2011). In the European aerospace industry, growing production levels have led to an estimated shortage of 25000 engineers per year (Ecorys et al., 2009b quoting Wall, 2009), and demand is also growing at the level of component suppliers. Also in transport services, a shortage of qualified personnel can be observed; for example, a lack of 75000 truck drivers has been estimated at EU-27 level in 2008 (European Parliament, 2009).
This would correspond to emissions cuts of around 70% below 2008 levels.