European railways comply with the principles of ‘user pays’ and ‘polluter pays’ better than any other motorised transport mode, both for passengers and freight. This is a key insight from the European Commission’s new study on transport cost internalisation. It shows that rail excels in covering its variable infrastructure costs and externalities like air pollution, CO2 and noise through charges, with smaller cost-coverage gaps in € per passenger-km or ton-km than other modes. This suggests a shift to rail would benefit citizens in Europe.
The long-anticipated study on “Sustainable Transport Infrastructure Charging and Internalisation of Transport Externalities” has now been published. For each transport mode, each country and separately for passengers and freight, it analyses to what extent the principles of ‘user pays’ and ‘polluter pays’ are implemented in EU Member States. The study confirms rail’s leading role in complying with these principles, and rail’s very low carbon footprint and low externalities in general. Remaining external costs and those of infrastructure use are better covered by rail than by competing modes.
This can be seen in the study’s Main Findings part, which highlights Marginal Social Cost Pricing as first-best approach to internalisation and as the one “in line with the ambitions of the Commission to realise full internalisation of external costs, including wear and tear costs”. Rail leads on cost coverage of variable infrastructure and external costs. Its low externalities and almost negligible climate impact stand out.
On CO2, rail leads transport already. And also noise, rail’s major externality, is increasingly mitigated thanks to retrofitted wagons. The EU’s precautionary principle in relation to the environment (TFEU, art. 191.2) suggests EU policymakers should act now to prevent damage. Cleaning up transport with a shift to rail is an obvious solution.
That should be supported by better implementing ‘user pays’ and ‘polluter pays’ in transport, e.g. with distance-based infrastructure charging on all major roads (just as EU law requires track charging for each and every train-km), but also external-cost charging for all modes. Rail – by far the most energy-efficient motorised mode of inland transport – could then fully play its role as the backbone of transport, in a digitalised and seamless multimodal system.
CER Executive Director Libor Lochman commented: “The study amounts to a call on governments to rebalance transport policy towards modes with low externalities such as railways. Climate action is a top priority for citizens, as recent elections have shown, and European railways stand ready for a bigger role in transport. A modal shift to rail will also decrease its fixed costs per ton-km or passenger-km, thus further improving rail’s cost coverage. Thanks to EU-wide harmonisation of rail equipment standards (4th Railway Package Technical Pillar, the implementation of which is now starting), digitalisation and automation, the sector is set to become even more cost-competitive. Taking advantage of that, policymakers should make rail’s development a priority, so that more persons and goods can move in a sustainable way.”