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Briefinginfographic - March 2015
EPRS|European Parliamentary Research Service Authors: Monika Nogaj, Eulalia Claros Members’ Research Service and European Added Value UnitPE 551.331
The Cost of Non-Europe in Transport
Potential annual savings and efficiency gains in transport: at least €8.6 billionPotential annual savings and efficiency gains in transport by sector: 8.6 € bn
Clarifying access charges
Addressing technical barriers
Harmonising vehicle authorisation and safety certification
€1.9 bn
€3.5 bn
Harmonising social legislation
and enforcing rules
Clarifying vehicle standards and rules on
road charging
Improving road safety
€1.3 bn
Air traffic management
Airport planning
Opening sky to 3rd countries
Completing market opening
Network integration for improved
modal inter-operability
Reducing environmental
externalities
€1.9 bn
Liberalisation of port services and transparency of port charges
Reducing administration andreporting formalities
Ensuring shipping competition
Transport is a vital component of the EU economy with huge untapped potential. The sector suffers however from remaining barriers, gaps and market inef-ficiencies that create substan-tial costs and that could be ad-dressed through further action at EU level.
The gains that could be achieved from addressing the identi-fied issues in the four modes of transport - rail, road, air and maritime - are estimated to amount to at least 8.6 bil-lion euro annually. While the four sectors show similarities in terms of market fragmentation and lack of competitiveness, each sector requires its own ap-proach to reform.
This document summarises the main elements that constitute the Cost of Non-Europe in the transport sector.
EPRS The Cost of Non-Europe in Transport
€2.7 bn
Optimal scenarioCautious scenario
Further gains from making the EU rail fully inter-operable
The historical development of rail systems within national borders results in
many differences in Europe’s railway networks, including different track and
loading gauges, electri�ication and signalling systems, and train designs.
These remain the main obstacle to a single market in the rail sector, since the
availability of trains that can cross borders is limited.
There are huge constraints to upgrading rail infrastructure to remove borders
for trains, and so the process must therefore be implemented in steps. How-
ever, the long-term bene�its of a truly European rail market could be up to 10
times those quanti�ied here, i.e. between 10 and 27 billion euros annually,
taking into account the cost of upgrading rail infrastructure.
Rail: a fragmented market
€1 bn
Vehicle & safety
certi�ication
Passenger rights
Unrestricted access to
commercial services
Standardisation
of rolling stock
Access to infrastructure
Open tendering to
Public service contracts
1
4.5
6
7.3
9.7
25 10
2.7
4.2
3
2
1
Direct quanti�ied gains
Different electri�ication systems across Europe
per yearper year
Freight transport within the EU272005-2011
AirRailSeaRoad47% 12% <1%40%
50
150
250
350
450
1995 1999 2003 2007 2011
Passenger and freight rail transport in the EU27
Passenger-km
Tonne-km
Billion
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Rail: a fragmented market and infrastructure
The Cost of Non-Europe in TransportEPRS
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Further challenges for road transport
The Single Market in the road transport sector is relatively advanced.
Nevertheless concerns remain due to the lack of suf�icient market
opening, incomplete harmonisation of social and employment stand-
ards and enforcement rules. Addressing these gaps would bring quanti-
�iable bene�its of between 2.5 and 4.5 billion euros a year.
The promotion of cleaner and safer vehicles and the achievement of
road safety targets are further challenges which remain. Additional
gains have been estimated at between 10 and 12 billion euros per year.
Adressing the environmental impact
Improving road safety
Promong modal shi�
€4.5 bnEnforcement of rules
Further potential gains
Direct quanti�ied gains
€2.5 bn
Road: an integrated market with a lot of further potential
Harmonisaon of social legislaon
Freight transport marketopening
SeaAirRailRoad
Passenger transport within the EU-27Modal distribuon 2005-2011
83% 8% 8% 1%
Road deaths per million inhabitants
Differences in transport labour costs in 2013Wages and salaries index
60 90 120 150BGROLUATHULVITSEEEBEUKMTCZPLFRDKDENLSKESHRLTFISIIECYPTGR
2008 = 100
Road: an integrated market with a lot of potential
EPRS The Cost of Non-Europe in Transport
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Different types of intervention: road and train
The gaps identi�ied for the road and rail sectors would require different types of intervention: while some issues
can be better dealt with by ‘soft’ coordination of Member States policies and actions, the EU should not shy away
from the necessary speci�ic regulation.
Approval of new legislation under
discussion at EU level
Approval of new legislation at
EU level
Industry coordination or
action
Other measures at
EU level(guidelines,
soft measures, etc.)
ROAD RAILLack of complete marketopening in the freight transportHarmonisation of sociallegislationEnforcement of rules
Inefficient vehicle design andstandardCleaner vehicles
Road charging: setting the price
Road charging: EETStechnologiesRoad safety
Envionmental sustainability
User rights - transport informationNot harmonised roadinfrastructure design
Lack of complete marketopening in the freight transport
Lack of competition for public service contracts
National specific vehicleauthorisation and safety
Ensuring non-discriminatory access to infrastructure
Single signalling system
Passenger rights
Varied access charges
Different technical standards accross Europe
Legacy of rail system
Single operating language
Standard technical parts and rolling stock and on bord signalling
Missing links at borders
Intelligent vehicles
Different types of intervention: road and rail
The Cost of Non-Europe in TransportEPRS
Air transport: preparing the market for the challenges of globalisation
Air transport: preparing the market for the challenges of globalisation
Direct quanti�ied gains
Top airports in the EU28 (passengers carried in 2013)
Bene�its of completing the single market in air A liberalised and integrated European market in air
transport would improve the organisation of transport
services and lead to a more balanced distribution of entry
and exit of intercontinental �lows. This would mean
lower fares and better service for passengers and more
competitive carriers. The ef�iciency gains have been esti-
mated between 0.9 and 1.8 billion euros.
Expected
annual savings between
€0.9 and 1.8 bn
Market opening and harmonisa�on
Internalisa�on of environmental externali�es
Improved infrastructure and cross-border links
Enhanced compe��on
Lower opera�onal costs, travel �me
and fuel consump�on
Reduced environmental impact
Shorter travel length throughNorth-South rebalancing
Complete Single Market
Geographical balance
Improved ef�iciency
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The Cost of Non-Europe in TransportEPRS
4% in Middle East
Distribution of
partner ports
2012
15% in North America
15% in Africa
38% in Asia
28% in Central and South
America
Bene�it of completing the single market in maritime transport
Emerging Asian economies have rede�ined world mari-
time trade, and today Europe's trade with Asia is four
times bigger than the traf�ic to and from North America.
However, northern European ports still hold the largest
market share in Europe, despite the shorter routes to
southern European ports.
The completion of the single market in maritime trans-
port, including the internalisation of environmental
costs, would lead to a gradual rebalancing of trade among
northern and southern ports, based on minimising costs.
This in turn would make European maritime transport
more ef�icient in terms of operational costs and energy
consumption. Gains would be in the range of 1.3 and 2.6
billion euros.
Maritime transport: geographical rebalancing of flows
Expected
annual savings between
€1.3 and 2.6 bn
Market opening and harmonisa�on
Internalisa�on of environmental externali�es
Improved infrastructure and cross-border links
Enhanced inter con�nental compe��on
Lower opera�onal costs, travel �me
and fuel consump�on
Reduced environmental impact
Complete Single Market
Geographical balance
Improved ef�iciency
Direct quanti�ied gains
Shorter travel length throughNorth-South rebalancing
Maritime transport: geographical rebalancing of flows
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Results from other assesments
European operating costs €2 to 3 bn higher than those of the USA
Missing integration and harmonisation of air transport system:
Full port competition with elimination of customs and other administrative
procedures
Savings to be generated by the simplification of administrative procedures€ 70 million per year
Savings in port costs to be generated by full port competition€ 1 billion per year
CO2 7.8 million
Single European Sky would have saved in 2012 alone €4.5 bn
and 7.8 million tonnes CO2
1
2
1 EUROCONTROL (2012) US/Europe comparison of ATM_Related Operationnal Performance 20102 Commission Staff Working Document SWD(2013)206final
3
3 Commission Staff Working Document SWD(2013)181
Results from other assesments
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Disclaimer and CopyrightThe content of this document is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy.© European Union, 2015.
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The transport sector is a vital component of the EU economy and an impor-tant generator of employment, but it also faces difficulties, namely in terms of competitiveness and environmental sustainability, exacerbated by the re-cent economic crisis.
Since its inception, transport policy has pursued the aim of integration and removal of barriers, be they technical, administrative or regulatory, in view of creating a Single Market for transport. It is indisputable that substantial progress has been achieved. However, issues associated with the implemen-tation of new legislation in the Member States, stakeholders’ opposition and vested interests have meant that 20 years of regulatory actions have not created a sufficiently open market. The transport sector still has significant potential that can be tapped through further action at EU level.
In the rail sector, the main barriers identified include non-transparent public procurement, problems with non-discriminatory access to infrastructure for new entrants, a multiplicity of authorisation and certification regimes across the EU, insufficient separation between infrastructure and service manage-ment, differences in access charges and enormous diversity in technical standards both for trains and rail infrastructure.
The road transport sector is significantly more advanced. Nevertheless, con-cerns remain due to the lack of sufficient market opening, incomplete har-monisation of social and employment standards and enforcement rules, as well as differences in the promotion of cleaner and safer vehicles and in the achievement of road safety targets.
In the air and maritime transport sectors, new policies and legislative initia-tives are needed to prevent discriminatory access to infrastructure, to clarify public service obligations, to prevent stateaid and cross-subsidies creating unjustified market distortion, and to make progress on integrated traffic management. At a more strategic level, there is a need to advance in the overall regulation of ports and airports, the internalisation of environmental externalities for maritime and air transport, and to ensure the consistency of decentralised and privatised infrastructure investments.
The gains that can be achieved from enhanced actions to fill the gaps and create a fully integrated and more efficient transport sector have been esti-mated at 8.6 billion euros annually.
The calculations of the costs and benefits rely on conservative assumptions. While the exact extent of final benefits is not possible to assess as it will depend on a multitude of various factors, it will be somewhere between the minimum and maximum impact estimated for each sector. For the purpose of this study, the mid-point values are retained for further computations.
NotesCountry codes: Austria (AT), Belgium (BE), Bulgaria (BG), Croatia (HR), Cyprus (CY), Czech Republic (CZ), Denmark (DK), Estonia (EE), Finland (FI), France (FR), Germany (DE), Greece (GR), Hungary (HU), Ireland (IE), Italy (IT), Latvia (LV), Lithuania (LT), Luxembourg (LU), Malta (MT), Netherlands (NL), Po-land (PL), Portugal (PT), Romania (RO), Slovakia (SK), Slovenia (SI), Spain (ES), Sweden (SE), United Kingdom (UK), European Union (EU28).Sources: Map on page 2 from Railway Technology. Chart on page 3 from ETSC. All other statistics from Eurostat. This document updates an earlier one published in January 2015 (PE 545.723).