ESC: EU road tax won’t induce modal shift

ESC: EU road tax won’t induce modal shift The European Shippers’ Council on Friday said the European Union is right not to rush a decision on road taxes as a way to cut down on air emissions.
   The ESC said such a tax would not induce cargo that moves by truck to go by other modes, such as has been seen with the recent introduction of a road tax in Germany.

van der Jagt

   “It is a clear example of the fact that the price elasticity in the road transport sector is very low, and few are expected to abandon road haulage,” said ESC Secretary General Nicolette van der Jagt. “Instead, prices of freight transport have risen. If anything, it is possible that the policy of charging for external costs might slow down such developments towards cleaner transport. Companies may find their margins are lower as a result of higher costs and invest less into new technologies, equipment and efficiency-enhancing systems that could deliver real and tangible environmental and social benefits.'
   The ESC praised the EU for going slow on the road tax issue, saying the EU had 400 amendments to consider to a proposal to ease transportation congestion and pollution in Europe.
   “Internalizing external costs is being touted by the European Commission as a solution for the problems created by the transport world,” van der Jagt said. “It is supposed to ease congestion and lessen environmental pollution by enticing transport users to switch from one transport mode to others. But we seriously doubt whether this policy will achieve these goals in practice.'
   The shippers’ council recommends that the EU:
   ' Remove the costs of congestion from toll charges as users already pay these.
   ' Remove amounts already charged to users to pay for infrastructure and external costs in the form of taxes, duties and other levies from toll calculation.
   ' Compensate road freight users for increased user charges where other operating restrictions imposed on them prevent them achieving lower user charges.
   ' Remove an inference that this policy would create modal shift from road, since this is wrong and misleading.
   ' Stipulate that revenue raised from tolls should be reinvested into schemes and initiatives that reduce future road user charges on the routes where the charges were collected for those that paid the charges.
   ' Phase in user costs over a 10-year period in order to limit market distortions. ' Eric Johnson