ROAD SECTOR CRITICISES PLANS FOR NEW EU STATE AID RULES TO PROMOTE GREEN TRANSPORT 12/07/22

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ROAD SECTOR CRITICISES PLANS FOR NEW EU STATE AID RULES TO PROMOTE GREEN TRANSPORT

 

The EU Commission's proposal to change the state aid rules in the transport sector is not well received by road freight transport companies. The aim is to "simplify state aid procedures to support green modes of transport such as rail, inland waterways and multimodal transport, which are less polluting and more sustainable than road transport alone," said EU Competition Commissioner Margrethe Vestager a corresponding draft regulation.

It's wrong to exclude road transport routes from subsidies designed to improve the sustainability of the entire transport economy, says Raluca Marian, head of the EU representation of the International Road Transport Union (IRU). "Aiming for decarbonisation without investing in pure road transport is pointless when you consider that pure road transport accounts for more than 45 percent of transport in the EU. All modes of transport need incentives if the EU is to achieve its Green Deal goals", so Marian.

Commission is not concerned about competition

But the Commission is concerned with subsidies for a not specifically defined "coordination" of transport, which contributes to modal shift, and the promotion of multimodal transport, rail and inland waterway transport - expressly not road transport. If the Member States agree to the proposed regulation, the Commission intends to issue block exemptions on this legal basis. The EU states could then pay subsidies in the affected areas without having to have them approved by the Commission beforehand.

The Commission argues that it has often approved subsidies for rail freight transport, inland waterways and combined transport for environmental and climate protection reasons and that there is experience of how general block exemptions can be designed without distorting competition in the EU internal market. But the IRU doubts that. This distorts competition between pure road freight companies and those active in multimodal transport. In addition, the two types of company are not easy to distinguish in practice.

The European associations of the rail and inland waterway transport industry and combined transport naturally see the Commission's proposal more positively and as a development opportunity for the member companies. Subsidies for "green" modes of transport can be better defended against challenges, for example in the road freight transport industry, on the new legal basis, says Conor Feighan, Secretary General of the European Rail Freight Association ERFA. "We expect that the procedures for approving rail freight aid will be greatly simplified," explains Alberto Mazzola, Executive Director of the EU railway association CER. Companies currently have to wait four years for approval, which is far too long.

PSO proposal is viewed differently

Mazzola has high hopes for the possibility of remunerating “public services” in freight transport, similar to what is already happening in passenger rail transport. “Particularly in freight transport, public service obligations can be an appropriate instrument to promote services in areas and segments where freight transport would otherwise only take place on the road,” says the draft regulation. "That could be important for single wagon traffic," says Mazzola. However, it remains to be seen which types of aid and recipients will ultimately be covered by the planned block exemptions. "It's all about the details here," says Mazzola.

The ERFA sees it that way too. Railway companies should not cross-subsidise other areas of the company with subsidies for single-wagon transport, warns Conor. In addition to the planned regulation, this must also be clarified in the state aid guidelines for the railways, which are currently being revised by the EU Commission. The more leeway the member states are given with subsidies, the more important clear rules for their use are.

UIRR welcomes simplifications for smaller member states

Akos Ersek, Chief Policy Advisor at the European CT association UIRR, also has certain concerns about the “untested” concept of Public Service Obligations (PSO) in freight transport. PSO tenders are not usually aimed at awarding contracts to several transport providers, says Ersek. He also sees the danger that many PSO orders could go to the former state railways. Ersek finds it problematic that the draft regulation speaks both of the promotion of "intermodal transport" - which is very clearly defined - and of "multimodal transport", which leaves a lot of room for interpretation. In general, the UIRR welcomes the proposal. The association has long called for the possibility of block exemptions from state aid law. This makes it easier for smaller EU countries in particular

Conversion of inland vessels probably not recorded

Turi Fiorito, director of the EU inland port association EFIP, sees the proposed regulation as the first step towards changing subsidy programs and block exemptions. The initiative can only be evaluated once the contents of the planned block exemption regulations are known. Theresia Hacksteiner, Secretary General of the European Barge Union (EBU), points out that it is unclear which subsidies the Commission has in mind when it comes to "aid for the coordination of transport". Subsidies for more sustainable ships are probably not covered by the plans, which means that Member States would have to continue to have such support programs approved by the Commission. According to the EBU, around 5.22 billion euros are missing by 2050 to make inland waterway vessels in the EU emission-free. EFIP demands that subsidies not only for port facilities such as quay walls, but also for warehouses or handling cranes should be facilitated by inclusion in a block exemption regulation.

Author: DVZ

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