Transport subsidies

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Topics: Transport ,

Assessment made on 01 Feb 2007

This is the latest published version. .

Generic metadata

Classification

Transport (Primary theme)

DPSIR: Driving force

Identification

Indicator codes

TERM 023

Geographical coverage:

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Contents

Policy issue: Increase vehicle occupancy and load factors

Key messages

Transport Subsidies are significant. More than 270-290 billion Euro of annual transport subsidies have been identified in Europe. Almost half of this is related to road infrastructure. Transport subsidies may have considerable environmental impacts. External costs of transport even exceed the size of transport subsidies.

Figures

Overview of total annual subsidies found by incidence and mode (billion 2005 EUR)

Key assessment

Table 1 summarises the subsidies found broken down by subsidy type and transport mode. The total value of subsidies that appear directly in public budgets (229 billion annually) greatly exceeds the value of tax and VAT exemptions (40 to 65 billion).

More than two-thirds of the subsidies found in public budgets are for infrastructure. Infrastructure subsidies, however, only make up one half of the total subsidy.

Around two-thirds of the infrastructure subsidy goes to road transport.
Rail is the main recipient of other direct transfers.
Fuel-tax and VAT exemptions are the most relevant subsidies for air and to some extent also waterborne transport.

EUR 30 billion annually could not be assigned to one specific mode (e.g. support for multi-modal projects) and is therefore listed in the "multiple modes" category. In general, environmental objectives are not significant motivators for the bulk of subsidies. Rail transport subsidies however represent an exception, as they are sometimes justified on the basis of the better environmental performance of rail compared with road and air transport.