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IRU cautiously welcomes Fit-for-55 but warns of double-dip hit to transport costs
Europe | Brussels

IRU cautiously welcomes Fit-for-55 but warns of double-dip hit to transport

14 Jul 2021 · Environment

IRU, the voice of almost one million European passenger and goods road transport operators, has cautiously welcomed some parts of the European Commission’s Fit-for-55 proposals. However, the industry group warned that energy tax and emissions trading together risk an unbalanced double-dip hit to road transport costs for EU citizens and business. 

The Fit-for-55 package includes a wide range of proposals that aim to reduce CO2 emissions by 55% by 2030 and make the EU climate neutral by 2050. 

Binding targets for EU Member States to put in place an alternative fuel infrastructure network with specific requirements for commercial road transport and heavy-duty vehicles are a welcome step forward. 

“The objective of these new measures should be to create more and new opportunities for the road transport industry to switch to economically viable alternative fuel technologies, and be able to refuel across the EU,” said Raluca Marian, IRU Director for EU Advocacy. 

Paying twice

“But the Commission is also trying to make road transport more expensive. IRU does not want to see an unbalanced overall cost increase for the industry without change for the better, given the negative impact on the EU’s collective mobility, trade and competitiveness,” she added.

While energy taxation based on energy content and CO2 emission performance could be positive, combining this with road transport emissions trading means that commercial road transport operators will pay twice on emissions. 

“This is an unfair and ultimately ineffective approach to reduce CO2 emissions in transport,” said Raluca Marian. “All modes of transport should be treated equally in terms of taxes and incentives on energy and emissions. These proposals contain too many sources of competition distortion and discrimination.” 

Technology bias

IRU’s biggest concern is the considerable cost increase due to all announced measures and their lack of technological neutrality. 

“The revised energy taxation framework will raise the fiscal burden for the most commonly used fuels in commercial road transport today. On top of this, road transport companies will foot the emissions trading bill at the pump. And, if the current Eurovignette deal is confirmed, EU Member States could add another layer of CO2 charging on top of that,” explained Raluca Marian. 

The industry is eager to switch to alternative fuels, but not all segments in commercial road goods and passenger transport can easily do this because, in the short and medium term, alternative fuel technologies will not be operationally feasible for long distance, heavy-duty services. 

Most measures encourage the switch to electricity and hydrogen. This is positive but not enough: a wider range of alternatives should be encouraged and the transition towards these fuels addressed by all proposals in the package. 

“If alternative fuel infrastructure and vehicles are not rolled out across the EU as quickly as planned, and traditional fuels and technologies become exponentially more expensive at the same time, competition will be severely distorted, especially for transport operators who cannot rapidly move to alternatives.” 

“For IRU, the entire commercial road transport sector must be able to switch to economically viable alternatives. Therefore, the implementation timing of push and pull measures such as emissions trading and energy taxation must be adequately synchronised with the sufficient availability of alternative fuel vehicles and refuelling and charging infrastructure,” concluded Raluca Marian.

IRU will examine the proposals and their cumulative impact on commercial road transport in more detail over the coming months and explore with the European Commission, Parliament and Council improvements to the current proposals.