Brussels, 04/09/2001 (Agence Europe) - The European Commission is due to adopt the White Paper on the future of transport in Europe (until 2010). Discussions between the different services and the Commission are expected to reach a conclusion this week.
As the Commission announced in its "political orientations" on transport adopted last July (see EUROPE Issues No.2245-2246), a harmonisation on the taxation of fuel for professional purposes is proposed. A Framework Directive in 2002 is also proposed which will outline new guidelines for assessing the rates to be charged for all modes of transport accessing the different infrastructures. The objective is to pass on the social costs of transport to the user - these include costs for dealing with environmental damage, improving security and reducing congestion - in Commission speak "integrating external costs". This document suggests that the increase in charges ought to be compensated by a reduction in taxes on vehicles and social costs.
Establishing pricing systems: The draft White Paper notes that that it is inappropriate for the European Union to intervene in arbitration procedures for setting prices for communal facilities. This usually falls within the remit of the national and local authorities. Instead of harmonising the rates, it proposes a definition of the principles and a common methodology within a Framework Directive. This Directive will allow for exceptions and a surcharge (in addition to "external costs") to finance the infrastructure essential for crossing natural environmental barriers, such as infrastructure for rail routes through the Alps. It should also establish National and Regional Funding for financing measures that will reduce external costs from excess funds resulting from new charges.
According to the authors of the document, the methodology is well under way and external costs and infrastructures are estimated at between 8 and 36 Euro for each 100 km travelled by a lorry down an uncongested motorway. These costs include pollution (2.3-15 Euro), climate change (0.2-1.54 Euro), noise (0.7-4 Euro), accidents (0.2-2.6 Euro) and congestion (2.7-9.3 Euro). Current charges in Europe are in the range of 12-14 Euro of which 8 Euro cover the costs for infrastructure.
According to the document, it is not the "overall level" of taxes that should change but "their structure". It also indicates that: 1) in the road transport sector, charges will be fixed according to the environmental performance of the vehicles (fuel and noise emissions), the kind of infrastructure used, distance covered, axle weight, and level of traffic congestion. It explains that the introduction of these charges will be progressive and co-ordinated with a reduction in other charges, such as taxes on vehicles, which should minimise the impact of the measure; 2) for railway transport the document suggest that charges should be based on the scarcity of infrastructure capacity and environmental damage; 3) the maritime sector should integrate the costs linked to maritime safety (particularly assistance provided to navigators at sea, marking with buoys, providing tugboats such as the Abeille).
Fuel taxation: The authors of the text claim that this should incorporate the external costs linked to greenhouse gas emissions. They also maintain that at a time of fullopening of the transport market, the absence of a harmonised fuel tax system appears more and more as an obstacle to the efficient working of the internal market. They also point out that excise duty on diesel varies from 246 Euro to 797 Euro for every 1000 litres throughout the European Union. The White Paper therefore proposes ending the link between fuel taxes on private and professional use (as outlined in the 1992 Directive on excise duties) and introducing in the short term a fuel for professional purposes subject to a harmonised level of taxation. This harmonised Community law on diesel, exceeding the current average on taxes on diesel aims to: 1) rebalance the division between the modes of transport and integrate "external costs", 2) reduce distortions to competition in the single market; 3) assure price stability. The White paper is calling for the Directive to be adopted rapidly so that tax reduction on "green" fuels can be enacted. This will be shortly presented by the Commission (see EUROPE of 28 July, p.7). It also suggests revising exceptions that enable air transport for example to be exempted from VAT.