IMPRINT HGV Nash Matthews et al

Charges for Heavy Goods Vehicles: EU Policy and Key National Developments: 

Charges for Heavy Goods Vehicles: EU Policy and Key National Developments Chris Nash, Bryan Matthews, Batool Menaz and Esko Niskanen Institute for Transport Studies University of Leeds Paper presented at the IMPRINT-EUROPE one day workshop on charges for heavy good vehicles 1 October 2003

Slide2: 

Introduction Developments in European inter-urban road transport pricing policy The draft Eurovignette Directive Swiss experience German experience British proposals Comparison of the HGV charges Conclusions

Heavy Goods Vehicles(HGVs) Costs and Charges: 

Heavy Goods Vehicles (HGVs) Costs and Charges The marginal social costs of freight transport depend on: Congestion, which varies with traffic volume; Road damage, which is sensitive to axle load and road quality; Environmental costs, which vary widely with geographical location.

Slide4: 

Normal charges are: Fuel taxes Fixed annual charges Insurance In terms of supplementary charges, currently there are three Europes: Eurovignette countries Countries with tolls on specific roads Countries with no direct road charging at all

The Eurovignette Directive (EU, 1996): 

The Eurovignette Directive (EU, 1996) Aimed to limit competition problems within the road freight sector caused by the existence of very different methods and levels of charging for infrastructure use in different countries.

Slide6: 

BUT … The Eurovignette is limited to motorways It is only related to the infrastructure cost of providing those roads, thus excluding external cost It is based on time, rather than on the distance travelled.

The Draft RevisedEurovignette Directive: 

The Draft Revised Eurovignette Directive This will change the earlier Directive by: Permitting charges to vary by distance, location, time of day, vehicle type Extending the Directive to all goods vehicles over 3.5 tonnes (instead of 12 tonnes) gvw Applying to the TEN network and to other roads to which traffic might divert, but permitting application of pricing to other roads as well

/cont …: 

/cont … Annual vehicle taxes may be reduced below the currently permitted minimum to compensate Revenue must be used for expenditure on roads, or on other transport networks as substitutes Each state must create an independent transport infrastructure supervisory authority to guarantee that charges are being set and revenue is being used in the required way

/cont …: 

/cont … The overall average charge must be equal to infrastructure and uncovered accident cost (i.e. external cost of accidents minus insurance premiums) In exceptional circumstances, a surcharge of up to 25% will be permitted to fund alternative rail infrastructure

Swiss Experience (1): 

Swiss Experience (1) Heavy Vehicle Fee (HVF) was implemented to cover the high costs of heavy goods vehicles on the roads It took 20 years from the first approaches to introduce the HVF. The first step was to introduce a flat fee and finally a distance based fee was accepted and put into force in 2001.

Swiss Experience (2): 

Swiss Experience (2) The fee was calculated in 3 steps: Step 1: calculate the uncovered costs of heavy traffic which consist of uncovered road costs and external costs (Air pollution, Noise and Accidents) caused by HGVs. This amounts to 750 million Euros. Step 2: calculate total transport performance (tonne kilometres). This amounts to 47 billion tonne kilometres.

Swiss Experience (3): 

Swiss Experience (3) Step 3: fixing the rate as the ratio Step 1 750 million Euros Step 2 47 billion tonne-kilometres 1.6 cents per tkm The fee was introduced in 2 steps: 2001: 1.6 cents/tkm (0.01 Euros) 2005: 2.5 cents/tkm (0.016 Euros)

Swiss Experience (4): 

Swiss Experience (4) HGVs with total admissible weight over 3.5 tonnes were taxable HVF was calculated by: Rate x Distance travelled in Switzerland x Weight of vehicle x Emissions

Swiss Experience (5): 

Swiss Experience (5) Data for calculating the fee was obtained by: Each domestic HGV is fitted with an On Board Unit (OBU) which registers kms travelled using a tachograph. OBU also stores admissible weight and emission category. Data is transmitted to Swiss Customs Authority (SCA) each month for billing. For unequipped vehicles, the fee is registered using an ID card at special terminals for HVF clearance. Data on distance is obtained by driver entering actual mileage when entering and leaving the country on a form. When leaving the country, the fee is paid by cash, fuel credit cards or through an account with the SCA.

Swiss Impacts so far (1): 

Swiss Impacts so far (1) An increase of 45% in sales of new HGVs in 2001 as the new vehicles belonged to the lowest and cheapest emission classes Concentration in the haulier industry Less vehicles on the roads. There was a fall of 5.6% in motorway traffic in 2001 after the introduction of the HVF. Stable modal split with no significant impact on rail transport performance

Swiss Impacts so far (2): 

Swiss Impacts so far (2) The gross revenue of the HVF in 2002 was 600 million Euros and the costs were roughly 8% of gross revenue (45 million Euros) The net income of the HVF in 2002 was 525 million Euros, which was distributed as follows: Reimbursement to cantons for their operational costs (5 million Euros) Reimbursement for additional enforcement (10 million Euros) Share cantons (175 million Euros) and Share federation (335 million Euros)

German Experience (1): 

German Experience (1) The goal of the tolling system for HGVs is to improve mode split, doubling railway freight transport. The charge is to be implemented in late 2003 The idea is to have a combination of tolling and public-private-partnership models. Private operator running the system may ensure cost-effectiveness and consumer friendly behaviour. The operator has to pre-finance the system.

German Experience (2): 

German Experience (2) Features of the charge: Applies to all lorries weighing 12 or more tonnes using German motorways and may extend to highways Based on number of kilometres travelled Charge is differentiated by number of axles, pollutant emission categories, and possibility of place and time of use later Toll rate set by regulator Revenues will be spent on infrastructure projects for roads, railways and waterways The average toll rate is 12.4 cents per kilometre

German Experience (3): 

German Experience (3) Benefits of the German distance based HGV user charge (Federal Ministry of Transport, Building and Housing, 2002) More precise application of user pays principle for domestic and foreign road users Fairer competition between roads and railways Additional revenue for the funding of transport infrastructure More efficient use of transport capacities Emission related toll contributing to the protection of the environment Additional relief for public budgets by switching from tax funded to user funded infrastructure

German Experience (4): 

German Experience (4) The booking system allows the charge to be paid through sales points, online or through call centres which all link to a central computer Automated toll collection – satellite based positioning system (GPS) and virtual collection points

British Proposals (1): 

British Proposals (1) The charge is hoped to be introduced in 2006 Objectives of the charge: Fairness and efficiency – All road users should pay at levels which reflect the costs they impose Positive effects on transport and the environment – the charge should reflect the costs of climate change, local air quality, road maintenance, safety, traffic congestion and noise There will be off-setting tax cuts through fuel duty reductions for lorry operators when the charge is introduced

British Proposals (2): 

British Proposals (2) Characteristics of the charge: Apply to lorries over 3.5 tonnes Apply to all lorry operators using UK roads including foreign Apply on all UK roads with the potential of a different rate for motorways Vary by lorry type (emission, weight) Potential to vary according to time of day

Comparison of the HGV charges (1): 

Comparison of the HGV charges (1)

Comparison of the HGV charges (2): 

Comparison of the HGV charges (2)

Comparison of the HGV charges (3): 

Comparison of the HGV charges (3)

Comparison of the HGV charges (4): 

Comparison of the HGV charges (4)

Slide27: 

MC-ICAM Background Recognition that MSC pricing cannot be universally implemented simultaneously Interest in possible implementation paths (expressed e.g. in the infrastructure charging White Paper, 1998 and in White Paper, 2001) Lack of research on practical implementation paths and their costs and benefits e.g. which modes or parts of the network do we address first? How far do we move towards full marginal cost pricing on each? What accompanying measures should we undertake?

Slide28: 

MC-ICAM Inter urban case studies: Emphasis on freight On relationship between modes and degree of differentiation (Netherlands) On impacts throughout the economy including use of revenue (UK, Norway) On institutional arrangements between governments

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Policy conclusions from MC-ICAM modelling results (D8) INTER-URBAN Most of the benefit can be obtained by tackling the dominant mode – road (Netherlands, Norway) Second best pricing to allow for distortions in other modes/markets may again lead to fluctuating prices A big increase in price when freight alone charged followed by a reduction when passenger charged (UK) Use of revenue crucial Benefits may be several times greater if revenue used to reduce distorting taxes rather than returned to users as lump sum payments (UK, Norway) Where revenue used in best way, optimal charge higher.

Conclusions: 

Conclusions All developments offer better differentiation by type of vehicle, distance, time of day, location. Still major issues about the level of charges Germany and Switzerland based on average cost Britain revenue neutral Eurovignette linked to infrastructure and accident cost only Earmarking of use of revenue for the transport sector may be inefficient