Monday, March 4, 2013

As Freight and Logistics Cleans Up European Body Proposes Tax on Road Haulage Pollution

Variable Levy to Depend on Geography Recommended by Environment Agency
Shipping News Feature

EUROPE – With the eyes of the world firmly focused on the environment and all sectors of the freight and logistics sector cleaning up its act comes a new heavyweight report relevant to the problem. Further to our recent article about the use of liquefied natural gas (LNG) and comparable fuels used for powering road haulage trucks, the European Environment Agency (EEA) last week suggested that road charges for heavy goods vehicles (HGV's) should reflect the varied health effects of traffic pollution in different European countries. This would mean quite controversially that road haulage operators in countries like Switzerland and Luxembourg would pay higher rates compared to those in Cyprus and Malta.

While air pollution in Europe has fallen significantly in recent years, it is still a problem in some parts of Europe where HGV’s can be a major factor, and with air pollution estimated to cause 3 million sick days and 350,000 premature deaths throughout the continent, the report estimates that the air pollution from HGV’s alone costs EEA member countries €43-46 billion per year, making up almost half of the approximately €100 billion cost of air pollution from all transport modes.

Diesel causes more air pollution per kilometre than other fuels such as petrol, and exhaust emissions from diesel engines were recently labelled as carcinogenic by the International Agency for Research on Cancer (IARC).

Heavy goods vehicles are responsible for 40-50% of nitrogen oxide (NOx) pollution from road transport in countries covered by the EEA. Both NOx and fine particulate matter (PM2.5) are considered in the report, as they can cause respiratory diseases, cardiovascular illnesses and other health problems.

The cost of air pollution from HGV's is up to 16 times higher in some European countries compared to others, the report notes. The average cost of pollution from a 12-14 tonne Euroclass III lorry is highest in Switzerland, at almost €0.12 per kilometre. Costs are also high in Luxembourg, Germany, Romania, Italy and Austria, at around €0.08 per kilometre. This is because the pollutants cause more harm where there are high population densities, or in landlocked regions and mountainous areas where pollution cannot disperse so easily. At the other end of the scale, the same lorry driving in Cyprus, Malta and Finland causes damage of around €0.005 per kilometre.

In certain specific regions the cost once again is also much higher than others. Zurich (Switzerland), Bucarest (Romania), Milan (Italy), the Ruhr Valley (Germany) and Barcelona (Spain) had some of the highest health costs compared to other large urban zones.

The calculations show that newer lorries would have a reduced impact, and therefore a lower cost. Euroclass IV trucks, which are up to six years old, or Euroclass V, up to three years old, would cause 40-60% less external costs on the same transport corridors. The EEA hopes that by charging haulage companies for the external costs of air pollution, it would incentivise newer and cleaner technologies.

The EEA suggests that the scheme should also create a level playing field, by internalising the costs that road freight currently imposes on the rest of society. The positive effects of such a scheme have been noted in Switzerland after the country adopted similar legislation.

The 2011 Eurovignette Directive prescribes how EU Member States could incorporate the health costs from air pollution into any charging structure for large roads and motorways. The revenue from such schemes should be invested in sustainable transport, the Directive states. However, adoption of road user charges depends on a decision by individual countries. Jacqueline McGlade, EEA Executive Director, said:

“European economies rely on transporting goods long distances. But there is also a hidden cost, paid in years of reduced health and lost life. This cost is especially high for those living close to Europe’s major transport routes. By incorporating these costs into the price of goods, we can encourage healthier transport methods and cleaner technologies.”

Last week saw Britain pass into law the directive that from April 2014 all foreign vehicles over 12 tonnes will be subject to a £10 per day levy when driving in the UK. Even British registered vehicles must be held accountable for this under EU law but native operators will be compensated by way of a reduction in their annual road tax.

Full details of the new legislation and a table showing how differing vehicle classes will be charged under the British system is viewable HERE.