A step further towards Eurovignette

The Council adopted yesterday (14 February) its first-reading position on a draft directive amending the 1999 directive on road use charges for heavy goods vehicles ("Eurovignette"), formalizing the political agreement reached last October by the transport ministers. This would allow Member States to charge lorries for the air pollution, noise and congestion they cause.

The European Commission adopted the proposal in 2008. The Directive sets common rules on distance-related tolls and time-based user charges for heavy goods vehicles for the use of certain infrastructures but it does not include external costs in road tolls. Member States are not required to introduce charging, but, if they choose to do so, they would be obliged to comply with the Directive’s rules.

If adopted, the draft directive would be the first application of the ‘polluter pays' principle in EU road transport legislation. Member States would be able to integrate in tolls levied on road hauliers an amount which reflects the cost of air pollution and noise pollution caused by traffic.

The member states’ positions have been too different as they have different interests. Member States such as Spain, Portugal, Greece, Ireland, Italy have raised concerns of competitiveness of their businesses with the revision of the Eurovignette Directive, particularly they are concerned with the higher costs that another road charging might impose on their trade. In fact, Italy and Spain voted against the proposal, and Ireland and Portugal abstained. In the other hand, Member States such as France and Austria are very much in favour of the “polluters pays principle.

The proposal’s major outstanding issues have been, in particular, the scope, legal basis, congestion as a chargeable external cost, earmarking on charges and the methods of calculating external costs.

The Commission has chosen Article 91 (1) TFEU, transport policy, as the legal basis for its proposal. The proposal is going through the ordinary legislative procedure with QMV required at the Council. Some Member States, including the UK, have argued that the common transport policy is not the right basis. They consider that Article 113 TFEU should be used as a legal basis since some of the proposal's provisions are related to taxation. In this case the proposal would require unanimity at the Council and the European Parliament would have a consultative role. Nevertheless, the majority of the member states, agreed that the draft proposal should be on a transport provision of the EU treaty, consequently the ordinary legislative procedure and voting by qualified majority continue to applies.

The existing Directive applies its rules to tolling schemes on the Trans-European Road Network however Member States are allowed to apply charging regimes on other roads provided they respect the Community principles of non-discrimination and freedom of movement. Member States are allowed to apply, on roads within built-up areas, regulatory charges particularly intended to reduce road congestion or combat effects on the environment. The Commission has proposed to extend the scope of the Directive in force beyond the trans-European transport network (TEN-T) to cover the entire national road network. Some Member States, arguing that the Commission’s proposal breaches the principle of subsidiarity, have asked for the scope of the directive to be limited to the trans-European transport network (TEN-T). However, under the compromise reached by the Council, the draft directive would apply to all motorways which represents a considerable extension of the scope of the existing directive.

The Council agreed, therefore, that member states may apply a "external cost charge" on heavy goods vehicles, requiring hauliers to pay for the cost of air and noise pollution caused. This will complement the existing infrastructure charge for the recovery of infrastructure costs. The amount of the charge related to external costs such as air pollution and noise will vary taking into account the vehicle environmental quality, vehicles' Euro emissions class type, and the travelled distance, location and time of use of roads.

Presently, levies amount around 15-25 euro cents per kilometre, but it has been estimated that the proposal will entail an increase of 20-30%, meaning 3 -4 cents per kilometre.

Under the compromise reached by the Council less polluting vehicles, those which comply with the most stringent emission standards, would be exempted from the air pollution charge for four years after the date of entry into force of the regulation providing for those standards. Hence, less polluting vehicles, Euro V and Euro VI, would be exempted until 31 December 2013 and until 31 December 2017 respectively.

The main controversial point for the Council was whether or not to allow the Member States to include the costs of traffic congestion in the tolls. Several Member States have not backed the inclusion of congestion as a chargeable external cost. They argued that traffic congestion problems are mostly caused by privately- owned cars and not lorries. Whereas some Member States believe that if applied, congestion charging can have a disproportionate impact on the direct price of transport as well as it could have an unfair treatment on commercial road transport in comparison with other road users, for others it is the most important element of this proposal. Hence, several Member States are demanding the elimination of these costs from the text’s scope. The Council has agreed to replace the provision on congestion charge by a charge modulation. The compromise treats congestion as part of current infrastructure costs. Member States may therefore “modulate the infrastructure charge to take account of road congestion at peak hours.” Consequently, member states would be allowed to charge higher tolls during rush hour provided they introduce lower tariffs during off-peak periods. The Council agreed on a maximum rate for variation of the infrastructure charge at 175 % for peak hours and duration of the peak hours period of 5 hours.

The Council also amended the Commission’s proposal in order to allow member states to exempt vehicles under 12 tonnes from the tolls.

The draft proposal lays down certain rules in order to ensure that tolls based on external costs are applied homogeneously within the internal market. The draft proposal sets up common charging principles as well as a common method of calculating chargeable costs. Member States would be required to collect the charge through electronic collection systems. The Commission has proposed common charging principles, methods of calculation and unit values for external costs. The Commission’s proposal provides that the calculation formulæ and the maximum amounts of the external cost charges may be amended by comitology. The Council has agreed to limit the Commission’s powers, hence the adoption of any amendments to the rules for calculating the infrastructure charge would no longer be delegated to the Commission, but it will be decided by the Council and the European Parliament.

According to the Commission proposal the toll’s revenue should be used to develop alternative infrastructure for transport users, to improve CO2 and energy performance of vehicles. Unsurprisingly, the European Parliament supports the Commission proposal to reinvest revenues into the transport system however it has proposed to strengthen even more the obligation how revenues should be used to reduce external costs. Under such proposal Member States would not be able to use the revenue from the road charging schemes as they wish and allocate it to their general budget. Obviously, this is a highly controversial issue among the Member States. Member states’ want to keep control of the takings from these tolls. The UK Government as well as the majority of the Member States opposes mandatory earmarking of charges to various measures contributing to the sustainability of transport. The Council has agreed to delete such obligation of earmarking revenues generated by an external cost charge for projects in the transport sector and replaced it with a recommendation.

The text has been sent to the European Parliament for a second reading. A struggle between the Council and the European Parliament is set to happen. Whereas the Council is opposed to legally binding earmarking of revenues this is a "sine qua non" condition to the European Parliament. It remains to be seen what will come out from the negotiations.

At the moment it would be optional for Member States to impose tolls and charges for transport-related environmental and social costs however the Commission will reserve the right to review the situation in 2013 and then it might become an obligation. In 2013 the Commission might decide to introduce a compulsory minimum charge. The Commission will also review in 2013 to assess whether Member States should be allowed to include the cost of CO2 emissions in tolls.

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