Business in Europe, Energy, EU – Baltic States, Legislation, Transport

In Europe, the member states rely on efficient transport networks for the economy to stay competitive and for the EU internal market to function smoothly. Transport represents the heart of the supply chain, and, as such, it is a primary enabler of jobs and growth. Without it, we cannot prosper.

The renewed policy was revealed by Siim Kallas, Vice-President and Commissioner for Transport to the French Parliament (Assemblée Nationale) committees on European affairs, sustainable development and regional planning committee (Paris, 16 November 2011).  

Transport’s role in the EU

Transport is one of Europe's few industries that successfully competes on the world stage. Actually, the EU is a global leader in this vital sector: its transport industry employs around 10 million people, accounting for 4,5% of total employment in the EU and about the same percentage of GDP. Many European companies are world leaders in infrastructure, logistics and the manufacture of transport equipment and traffic management systems.

The Commission clearly wants to keep the transport industry growing; France is right at the forefront of this excellent development.

Some “success examples” of France transport policy:

• Alstom, developing high-speed trains;
• In the automobile sector, Peugeot-Citroen, combined with Renault, manufacture more than 6 million motor vehicles a year;
• In Paris Air Show in Le Bourget this summer, Airbus swept the board with a surge of new orders worth many billions of euros to European business.

Reference:  SPEECH/11/763, 16 November 2011    

The list of successes continues: Air France-KLM, SNCF, Veolia Environment and pioneering role of France’s local authorities in developing modern tram systems, making public transport ever more efficient.

Demand for mobility

The EU is facing many new challenges and barriers which threaten its leading position; the Union cannot simply afford to lag behind. Europe risks losing out to global rivals, above all to low-cost competitors who are keen to innovate and invest if the EU transport policy is not successful.

It is well-known that the demand for mobility will continue to grow in the foreseeable future. At the same time, parts of the EU transport infrastructure are starting to creak with age. In some areas, the infrastructure is already approaching capacity limits. There are also a number of important missing links and bottlenecks. That puts a squeeze on trade flows within the EU internal market, to the detriment of the overall economy.

Barriers to overcome

At the moment, there are a number of barriers which threaten European competitive edge and prevent the region from completing the EU’s internal transport market. Too much red tape, administrative formalities, numerous ‘missing links’ across the transport network, like technical incompatibilities on national railways and lengthy authorisation procedures for rolling stock.

This is why initiatives such as France's “Assises du ferroviaire” are particularly useful; it can be used as an opportunity for a national debate on necessary reforms in the rail system. The Commission participates in the discussion as recognition of the existence of a European railway market which must function along common European rules.

In a broad way, the EU transport strategy for the future aims to respond to several longer-term challenges:

• Firstly, Europe needs to reduce its historic overdependence on oil, which is likely to become harder in the years to come. The transport sector remains almost totally oil dependent (96% of its total energy supply); the EU oil imports come from increasingly unstable parts of the world – while markets are more volatile than ever. This is why the EU-2020 strategy is looking into innovative (and cleaner) alternatives to fossil fuels and investing in research to develop new sources of energy.
• Secondly, European cities, roads, railways and skies are increasingly congested. Urbanisation process will continue and traffic in cities and on their access routes will grow. Bottlenecks are also present in some ports.
• And third, delivering on the EU's climate change targets requires deep cuts in CO2 emissions from transport over the medium term.

These challenges cannot be avoided; Commission intends to act now, in order to prepare for the future. Merely to maintain the status quo is not an option, especially if Europe is to remain competitive in the world marketplace.

Presently, the EU transport policy is at a crossroad, acknowledged the Commissioner for transport. The decisions reached now will affect the sector for decades to come.

Technological innovation is crucial for tackling these challenges and the Commission wishes to promote it strongly.

Research and innovation are central to achieve smart, sustainable and inclusive growth. But this alone is not enough to solve all the problems: efficiency is also about better logistics and smarter behavior.

Europeans need to change their travelling habits, better combine or substitute road travel with other modes such as rail, and optimise choices for passengers. It’s time to start thinking about transport as a network, as a system, rather than thinking in terms of individual modes.

Rail and waterborne transport is going to play a substantially greater role in moving freight, particularly over longer distances. Coaches and high-speed rail will need to transport more passengers.

It is also important to recognise that there are practices and behavior which limit competition and prevent these transport alternatives from becoming more efficient and appealing to users. Closed markets and protectionist attitudes, argued the Commissioner, are relics of the past and definitely not the answer, if the EU intends to stay competitive.

There are other ways forward, e.g. setting minimum standards and improving enforcement of the rules, though without blocking competition in Europe.

Passenger transport by rail is a good example where there are still many obstacles to an efficient and competitive European system. A Single European Transport area also means fair and non-discriminatory access to the rail network and to rail-related services.

As announced in the White Paper, the Commission will bring forward in 2012 some proposals on access to the passenger market, as well as rolling stock certification. The idea is to make the rail transport an attractive alternative to other modes in the future.

Similarly, the Single European Sky is going to be completed and aviation must be better integrated with other forms of transport. The Single European Sky alone would reduce the distance flown and consequently help reducing CO2 emissions of the sector and allow double traffic at the same cost. Furthermore, integrating and complementing the modal networks helps better exploiting all the available capacity: transshipment facilities, port/rail connections, inland waterways links, etc.  

Trans-European transport

In the future, Europe’s transport system will be generally relying on professional and highly-trained operators. They will play an important role in providing high-quality service both in public transport and in logistics. They will also benefit from a safer and more secure transport environment, using cleaner vehicles and working within infrastructures less congested than now.

One of the White Paper's top priorities is to complete the trans-European transport network: TEN-T. This is essential for creating employment and economic growth because the network aims to provide a seamless chain linking all modes of transport – air, rail, road and sea.

The necessary infrastructure and related developments will require substantial resources. But the financing itself should also be “smart”.

The Commission is looking closely at how innovative instruments can make transport sector a solid and attractive opportunity for private capital, particularly for specialised infrastructure investors. Some of these instruments, e.g. project bonds, should have a high leverage impact and generate even more funding for some of European larger transport projects.

For the next EU budget period (2014-20), the Commission proposed funding the Connecting Europe Facility. This flexible instrument will accelerate infrastructure development in energy, transport and information technology, helping to fill in the missing network links to strengthen the backbone of the internal market. It will offer innovative financing tools for transport projects such as project bonds, combining market-based instruments and direct EU support to optimise the impact of financing.

The Commission is also looking at ways to enhance the financial structure of public-private partnerships (PPPs) in transport. Innovative PPP projects have already been used notably for the cross-border rail tunnel on the Perpignan–Figueras section or for the future Tours–Bordeaux high-speed rail line in France.  

The White Paper shows how the EU can achieve the transformation of transport system and make the vision a reality. The single objective is to reduce CO2 emissions by 60% by 2050.  

Concrete initiatives

The Commission has set about ten goals to be achieved by carrying out 40 concrete initiatives to which the Commission has committed itself. These goals will guide the EU transport policy and provide a measure of the EU progress in transport:

• phasing out conventionally fuelled cars and trucks from cities by 2050;
• shifting 30% of medium and long-distance road freight to other modes by 2030;
• using cars for less than half of middle-distance travel by 2050; or
• halving road traffic deaths by 2020 and achieving near-zero casualties in road transport by 2050.

The Commission could reach these goals only if governments and citizens are convinced that drastic changes are needed. European citizens identify their economic and social freedom with the ability to move, to travel, and thereby access new opportunities.

It is a vision, the Commissioner concluded, to which the member states would subscribe, so that countries and citizens can help each other to turn it into reality in the hope that the EU-27 will be working together towards these shared goals.

*) WHITE PAPER. Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system. COM(2011) 144 final. Brussels, 28.3.2011.