Indicator Assessment

Transport taxes and charges

Indicator Assessment

Prod-ID: IND-115-en

Also known as: TERM 022

Published 05 Jul 2010 Last modified 11 May 2021

17 min read

Topics: Transport

This page was archived on 12 May 2015 with reason: No more updates will be done

Transport infrastructure charges throughout the EEA region are decreasing, although at the same time the length of the motorway network that is tolled is increasing (strongly territorial road charge). The most widely spread form of taxing is the charges on the possession of vehicles, or use of roads, applicable only to vehicles registered in the country (nationality based charge), although a number of countries through EEA do not apply the tax. The nationality based charges are applied in 20 out of the 32 EEA countries. A number of countries have abolished time band charges (in other words, charges differentiated by the usage time) for the use of the road or motorway network, a practice also referred to as Eurovignette (moderately territorial road charge).

Infrastructure charges for rail freight transport are higher in the new EU Member States than in the EU-15. In general, charge levels are still well below marginal cost levels.

Infrastructure taxes and charges for aviation vary by country and airport. Some impose charges which internalise some of the external costs of aviation, including congestion and noise. Very few airports apply aircraft emission charges. The indicator does not cover parking charges as well as inland waterways (IWW) and marine infrastructure charges.

This indicator is no longer being regularly updated

TERM22 Nationality based charges

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TERM22 Moderately territorial charges

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TERM22 Strongly territorial charges

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Transport infrastructure taxes and charges across the EEA region are decreasing, although at the same time the length of tolled motorway network is increasing.

Nationality based road charges (vehicle taxation)

Nationality based road charge is a charge on the possession of a vehicle or use of road applicable only to vehicles registered in the country. This charge is the most widely spread in Europe; although a number of countries through EEA do not apply the tax (see Table 1).

Charge levels of nationality based taxes (vehicle possession or national road use tax) vary greatly within the EEA-32 region. In some countries the tax is growing (the largest growth during the last 10 years was in Hungary, Norway and Poland), while in some it is falling (the highest fall during the last 10 years was in Austria and Germany). The overall trend is increasing levels of taxes due to economic development and pressures to control increases in car ownership.

Moderately territorial road charges (vignettes)

Highway vignettes and Eurovignettes are classified as moderately territorial road charges, and in Europe are applied in 16 countries (in some countries they are applied to freight transport exclusively, such as in Lithuania) (see Table 2). Germany (2005) and Austria (2004) introduced infrastructure charges for Heavy Duty Vehicles (HDVs), but abolished vignettes. Lithuania started charging HDVs for the use of roads in 2007. The minimum period of vignette varies from 1 day to 1 week (ITF, 2008). Slovenia introduced vignette in July 2008 where it is available for either half a year or one year.

Motorway user charges (vignette) have remained the same in the last year in most countries with the exception of Hungary where it has increased by almost 20 times between 2000 and 2008 due to the inclusion of a previously tolled motorway section into the system of Eurovignette. Tolls have increased since 1998 in all counties where they have been applied.

Strongly territorial road charges (tolls)

Tolls belong to the strongly territorial road charge or distance based charge category. In Europe 13 countries currently use toll systems (see Table 3). Hungary abolished tolls and included all motorways into one highway vignette (which differentiates between modes of transport). Toll charges are continuing to increase (where introduced). Norway has an urban toll system with more than 30 constituent projects running in the country. The considerable increase in the toll charge in Norway identified in 2005 is linked to the introduction of the electronic toll collection system in Norway, the AutoPass system, as of 2004, which started in Bergen in February 2004 and was accompanied by an increase in the toll fees (Ieromonachou et al., 2004). Switzerland is the only country which applies weight based charges for the use of roads and motorways by HGV (as of 2001).

Rail infrastructure charges

There is a high variety of infrastructure charge structures and levels for rail freight transport in EEA-32. The most common system is a simple charge per train kilometre, which may be differentiated by type of traction, weight, speed and axle-load of the train. Some countries (such as Finland) only charge per gross tonne kilometre, while others (such as Austria) combine gross tonne kilometre charges for wear and tear with charge per train kilometre for other cost elements. Due to the diversity of the structure of charges (see Nash, 2005 for the overview) it is hard to compare the rail charging levels by type of charge. Only the total charges from different countries are comparable, if made available.

There are notably higher infrastructure charges for rail freight transport in new Member States compared to in the EU-15 (2005 data). There are a number of reasons for this including the nature and mix of rail traffic, differences in the willingness and ability of governments to provide subsidies, and a continued lack of consensus over the measurement of the marginal cost of infrastructure use. Member States charging high fees for the use of rail infrastructure are frequently those who do not charge heavy duty vehicles anything for the use of national highways. In general, charge levels are still well below marginal cost levels.

The United Kingdom, France and Germany have the highest charges for passenger trains. Freight tariffs are the highest in Slovakia and the Baltics countries. There is a serious danger that in many cases these tariffs are set to achieve full cost recovery without consideration of the competitive position of rail freight, and without adequate examination of unpopular options such as rationalisation to reduce costs (Nash, 2005).

Aviation infrastructure charges

Infrastructure taxes and charges for aviation are applied at the airports and are somewhat linked to the environmental effects of aviation through charges applied to noise pollution and in rare cases to emissions of aircraft. The pricing of airport infrastructure charges is regulated at a national level and varies y by country and airport. Airport charges account for between 4 % and 8 % of the major EU air carriers' operational costs. A high percentage of the total costs of low cost air carriers are airport charges.

Supporting information

Indicator definition

The infrastructure taxes and charges indicator is a complex indicator, which includes:
Road transport charges (note data is only currently available for the freight sector):

Taxes on the possession of freight vehicles or use of road applicable only to vehicles registered in the country (nationality based road charge);
Moderately territorial charges: time based charges for the use of road or motorway networks, moderately territorial road charges; including its minimum charge (EUR) and length of minimum period of charge (days) (freight transport);
Strongly territorial road charge or distance charge for freight transport;
Combined distance and weight based charges for the use of road or motorway networks applied to freight only. So far only Switzerland has implemented it.

The indicator could be expanded to include the revenues collected per country, e.g. total toll revenues (EUR) for some countries.
Rail infrastructure charges:

fixed rail charges for freight and passenger rail;
variable rail freight and passenger charge.

The indicator could be expanded to include total rail infrastructure charges per country as well as a sum of the total amount of rail freight charges (EUR) and total amount of rail passenger charges (EUR).
Information is currently collected for infrastructure charges as well as for total charges, but due to only a few countries submitting data, the comparison is very fragmented.

Units

Road transport:

Nationality based charges - vehicle tax (EUR/year). It comprises the taxes on the possession of a vehicle and on the use of roads applicable to vehicles registered in the country.
Weakly territorial charges - tax (EUR/l). It comprises fuel taxes.
Moderately territorial charges - user charge (EUR/year). It comprises a time based charge for the use of road or motorway networks, such as vignette and Eurovignette.
Distance charge (toll) - tax (EUR/km). It represents kilometre charges and motorway tolls.
Strongly territorial charges - charge per tkm (EUR/tkm). It comprises distance/weight charges for the use of road or motorway networks.

Rail infrastructure charges:

Fixed rail charges (EUR/tonne-km and EUR/train-km) for freight and passenger rail.
Variable rail freight charge (EUR/gross tonne-km) and variable rail passenger charge (EUR/pkm).
Variable rail freight charge (EUR/net tonne-km and EUR/gross train-km).

Rationale

Justification for indicator selection

Road transport is one of the main sources of GHG emissions and also gives rise to significant air pollution. Infrastructure taxes and charges help to understand the potential to internalise the external costs of transport such as impacts on climate change, air pollution, noise and congestion. They also help to explain the observed trends in transport development and the lack of progress in the internalisation of external costs of the transport sector. The infrastructure taxes and charges provide a complementary mechanism that influences transport development and behaviour through other mechanisms rather than fuel taxes.
The indicator of infrastructure taxes and charges for heavy road vehicles is governed by a separate Directive (Directive 2006/38/EC). By laying down common rules on how EU states may charge heavy goods vehicles for using the road network, the 'Eurovignette' Directive aims to ensure that road usage better reflects its true impact on society and the environment. It does this by introducing a "user pays" and a "polluter pays" principle. An aim of this Directive is to shift freight away from roads onto other less-polluting modes of transport such as rail and waterways. The indicator tracks the impact of the Directive.
Directive 2001/14/EC (last amendment by Directive 2007/58/EC) sets out the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification. Charges are set and collected by an independent charging body; generally the infrastructure manager provided it is not dependent on the railway undertakings. The Directive defines the minimum access package and the mandatory access to services to which railway undertakings are entitled. The undertakings in turn are under an obligation to provide certain mandatory services, to which additional and ancillary services may be added. These are listed in an annex.

Scientific references

No rationale references available

Policy context and targets

Context description

European infrastructure charging policy

Objectives for reducing transport congestion, pollution and the re-balancing of the modal split are reflected in the Commission's infrastructure charging policy. Transport taxes and charges should support the goal, cover the diverse modal range of passenger and freight transport, and differentiate according to the impacts of different pollution levels, travelling times and damage costs in addition to infrastructure costs. The Polluter Pays Principle is fundamentally a fair and effective way of achieving the goal and supporting the development of public - private partnerships and market liberalisation. A clear indication that user charges are successful is that they provide a direct source of income for potential public-private partnerships, and that they support liberalised markets.

The EEA report on the "Effectiveness of environmental taxes and charges for managing sand, gravel and rock extraction in selected EU countries" (EEA, 2008) illustrates that environmental taxes and charges are Market Based Instruments (MBIs) and should help realise environmental and economic policy objectives in a cost effective way. The fundamental reason why environmental taxes are commonly applied is to correct market failures and therefore ensure that the polluter pays. Environmental charges cover the costs of monitoring and enforcing environmental regimes or services.

In 2001 the European Commission published a White Paper "European transport Policy for 2010: Time to decide". The mid term Review of the White Paper has been launched in 2005-2006. The conference held in 2005 on the Review stressed that decoupling global growth from the growth of transport must not be sought but that the growth of transport must have a much more qualitative dimension, which is already largely addressed by the White Paper. Among other recommendations, the Conference pointed out that the first step to make commerce and globalization at the economic and environmental level is to introduce taxes on air and maritime transport fuel.

The European Commission released a Handbook with estimates of external costs in the transport sector. The handbook summarises the state of the art with regards to the valuation of external costs. On the basis of this handbook, the European Commission is preparing a communication on a strategy to internalise the external costs for all modes of transport, which is due in 2008, and a proposal to revise the Directive on the charging of heavy goods vehicles.

In April 2004 the European "Interoperability Directive" 2004/52/EC (EC, 2004) was approved. It sets out the principles of the interoperability of the road toll systems within the EU. It requires that the systems capable of accepting automatic toll payment badges meet the same standards as those issued in other countries.

'Eurovignette Directive'

Directive 2006/38/EC of 17 May 2006 amends the Directive 1999/62/EC with a view to establishing a new Community framework for charging for the use of road infrastructure. The Directive lays down rules for the application by Member States of user charges on roads, including roads on the trans-European road network and roads in mountainous regions. From 2012 onwards Directive 2006/38/EC will apply to vehicles weighing between 3.5 and 12 tonnes (compared to the earlier Directive which applied to vehicles above 12 tonnes) and will impose much lower basic charges.
The Directive's main novelty was to introduce the possibility for individual states to integrate the 'external costs' of road transport into toll prices. The 'external costs' can include congestion costs, environmental pollution, noise, landscape damage, social costs such as health and indirect accident costs which are not covered by insurance. To be integrated in the charges ('internalised'), the costs have to be proved "undeniable".
The Eurovignette also gives member states extra flexibility on how to levy charges. In particular, these can now be raised on the entire road network, not just motorways:

Toll revenue should be used for the maintenance of the road infrastructure concerned or to cross-finance the transport sector as a whole.
As of 2010, countries which already apply tolls or user charges will be obliged to vary their prices according to vehicle pollution standards (Euro standards series) in order to favour the cleanest ones.
Authorities may decide to exempt isolated areas or economically weak regions from applying tolls or user charges.
An extra 15 % 'mark-up' charge can be levied to finance new alternative transport infrastructure projects such as rail or inland waterways (the mark-up can be raised to 25 % for cross-frontier projects in mountainous regions).
Urban areas are not included in these extra mark-up charges. However, local authorities can still raise them under a provision taken from Article 9 of the current Eurovignette Directive (which for instance allowed the city of London to apply such charges).
Rebates will be possible for frequent users.

The EC is working towards a "common methodology for the calculation and internalisation of external costs that can be applied to all modes of transport" to be proposed in 2008 as indicated in the Directive 2006/38/EC.

European strategy for the internalization of external costs

In July 2008 the European Commission presented a review of the Directive as well as a 'Strategy for the internalisation of external costs', as part of a wider Communication on 'Greening Transport'.

The EC is planning to propose methodologies for all modes of transport, therefore the strategy for internalising external costs covers them all.

The Commission is proposing to make it possible to internalise some of the external costs of the road haulage sector by revising the Directive 199/62/EC in order to allow charges to include external costs such as air pollution, noise pollution and congestion, setting up Community coordination mechanisms with a common methodology and ceilings for the calculation of charges and allocating revenue to the transport sector. To be effective, tolls should vary depending on the vehicle concerned, the type of route and the time of day.

In the Green Paper "Towards a new culture for urban mobility" EC have promised to issue the Action Plan on Urban Mobility, to be proposed in autumn 2008. The Commission's proposal for the Action Plan includes three measures: amending the registration tax, setting up a system for refunding it, and restructuring the tax base for the registration tax and the annual road tax to establish a full or partial link with CO2 emissions.

Directive 2001/14/EC allows internalisation of rail external costs. The Directive only, however, allows internalisation if there is an equivalent cost increase for competing modes of transport (i.e. road freight and road passenger transport). Revising Directive 1999/62/EC will enable internalisation of external costs in the road transport sector without a corresponding increase in the rail sector, which will improve the competitiveness of rail transport. The Commission is also preparing a Communication on incentives for reducing rail noise levels and may propose related legislation by the end of 2008 when it reviews the first railway package.

On 24 January 2007, the Commission put forward a proposal for a Directive on airport charges. The suggested amendments relate to the inclusion of differentiated charging on the basis of environmental damage. The application throughout the EU of a common set of basic rules with regard to airport charges will ensure fair play between the aviation partners when defining the parameters for the use of airport infrastructure. The proposal is limited to the definition of a minimum of rules to be respected when Member states and/or airport operators determine the levels of airport charges.

There is no overarching pollution control policy linked to maritime and inland waterway transport infrastructure. However, the International Maritime Organisation at its 59th session in July 2009 agreed to disseminate a package of interim and voluntary technical operational measures to reduce greenhouse gas emissions from international shipping; and also agreed a work plan for further consideration at future meetings of proposed market based instruments to provide incentives for the shipping industry. The Commission does, however, wish to include the maritime sector in the post-2012 agreement on preventing climate change. There are future revision plans to internalise external costs of inland waterways as well as indicated in the NAIADES Communication . It points out that this could revitalise inland waterway transport and would make it possible to fund infrastructure development projects in the sector.

The Commission will carry out an evaluation of these measures in 2013 and draw up a report on the progress made towards internalising external costs.

Targets

No targets have been specified.

Methodology

Methodology for indicator calculation

Infrastructure charges and tolls are in Euros per standard period of time (a year for toll stickers) or minimum available period of time (such as a day for vignettes). Toll road charges are provided in an average charge per kilometre.
Methodology for calculating non-fuel related transport taxes and charges have been taken from the International Transport Forum (former ECMT) and Ecosys.

Methodology for gap filling

No gap filling has been used in this analysis.

Methodology references

No methodology references available.

Uncertainties

Methodology uncertainty

Reporting and registering rail charges is constrained due to the different charging mechanisms between countries. This therefore makes a comparison between countries difficult. The same issue also arises with road haulage.

Data sets uncertainty

There is currently no data available for passenger transport. It is important that this is collected for future indicator updates. In addition, there is data for missing for road haulage and the rail sectors.