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Transport sector and national recovery plans: investment priorities for a green recovery

On 30 April, most EU Member States handed in their national recovery and resilience plan in the framework of the Recovery and Resilience Facility (RRF), the EU recovery fund of €750 billion aimed to finance the (green) recovery from the COVID-19 pandemic. The European Commission has currently received 18 national plans. Whereas larger Member States like Germany, France, Spain and Italy already handed in their plans, it remains to be seen what Member States such as the Netherlands, Sweden and Finland will prioritize during the recovery phase. Dr2 Consultants’ Transport Team assessed the different national recovery plans focusing on the transport sector to identify Member States’ investment priorities for the coming years and identified three investment trends: charging infrastructure, railways and hydrogen solutions. These trends will provide ample opportunity for the transport industry to secure funding for their projects, and are therefore relevant to monitor closely.

Below, Dr2 consultants provides a more detailed explanation of the three identified trends.

Trend 1: Charging infrastructure to stimulate the greening of transport as part of national recovery plans

Multiple Member States aim to use RRF resources to invest in the roll-out of recharging and refueling infrastructure for alternative fuels such as electricity, hydrogen and bio-CNG/LNG. Where Austria, Belgium and Spain invest in the deployment of recharging infrastructure, Germany is leading the pack, as it will invest approximately €2.5 billion in the infrastructure for electric vehicles. This recharging infrastructure will take the form of an increase in the number of charging points for electric vehicles, both rolling out public charging points as well as stimulating public and private investments in infrastructure rollout by private companies. These investments in alternative fuels infrastructure will go hand in hand with stimulating fleet renewal throughout the EU, focusing on vehicle fleet for company cars and trucking businesses.

European Green Deal Impact Scan

Not only are these investments directly stimulating the greening of the transport sector, but they are also desirable in the context of the upcoming revisions of the Alternative Fuels Infrastructure Directive (AFID) and the TEN-T Regulation. In line with the anticipated objectives set out in these upcoming legislative files, Member States will be required to invest more in the deployment of recharging infrastructure to boost e-mobility across the EU.

Trend 2: Expanding railway connections finds resonance in the national recovery plans for transport

The European ‘Year of Rail’ appears to find resonance in the national recovery plans. A swift modal shift from road to rail could become reality as Member States are consistently aiming to invest significant amounts from the RRF into the expansion of the railway network in the EU. Italy aims to invest an approximate €25 billion in railway infrastructure, which is partly used for high-speed lines in its northern parts, focusing on cross-border connections with the rest of Europe. Belgium will also be ambitious in the coming years, focusing both on a more efficient rail network to further stimulate a modal shift, as well as embracing new mobility concepts such as Mobility as a Service (MaaS) and building accessible multimodal stations.

Trend 3: Hydrogen solutions for transport

With Member States embracing hydrogen as a key enabler of the energy transition, it is no surprise that Member States aim to invest massively in hydrogen solutions. First of all, Member States are scaling up the production, storage and transmission of (green) hydrogen. Several Member States state they want to start Important Projects of Common European Interest (IPCEI) in the field of hydrogen. This means that Member States are not individually scaling up in the field of hydrogen, but that the hydrogen transition is considered a collective effort between all Member States. This way of thinking is in line with the EU’s Hydrogen Strategy from July 2020, and is a trend that will further materialize after revisions of essential pieces of EU legislation in the Fit for 55 Package.

Dr2 Consultants observes that an important element in national hydrogen strategies are the transport applications of hydrogen. Portugal, for example, aims for a 1-5% share of green hydrogen in road transport and a share of 3-5% in inland waterway transport by 2030. Germany and France are both set to invest approximately €2 billion in the scale-up of their hydrogen economy.

What does this mean for European businesses?

The existing plans can serve as a good blueprint for lobbying activities towards Member States that are still in the process of writing and finalizing national recovery and resilience plans. The projects and investments as laid out in the existing plans can be an important driver for the Member States to invest in similar projects in order to boost their competitive position.

However, Dr2 Consultants sees that some plans are more detailed than others, and that some Member States have fewer concrete ideas yet on how to reach some of the goals they pose in their plans (e.g. sticking to general notions such as ‘stimulating the modal shift’). Since the recovery plans will be scrutinized by the European Commission, it will remain to be seen if the national plans will have to be further specified before they can be approved by the EU.

Dr2 Consultants advises businesses to consult closely with national authorities how they can contribute to the execution of projects. Although RRF resources will have to be allocated to projects that can stimulate the (green) recovery over the short-term, co-financing from the RRF can cover unprofitable margins and ensure investment clarity.

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EU road safety policy: state of play and vision for 2030

On 20 April, the EU Road Safety Results Conference took place, during which the newest traffic fatalities numbers from the EU Member States were presented. In 2020, almost 19.000 people lost their lives on European roads, which is a 17% reduction compared to 2019. This was not entirely in line with the decrease in traffic due to the pandemic. Between 2010 and 2020 fatalities fell by 36% across the EU, meaning that European roads are still the safest in the world, with 42 road deaths per 1 million inhabitants.

However, progress has been slowing down for several years now, and the road safety numbers are nowhere near the desired targets for 2030 and 2050. Additionally, the disparity in road injuries and deaths between EU Member States remains big. Where the roads of Scandinavian countries such as Sweden and Denmark are among the safest on the continent, countries like Romania, Slovakia or Slovenia still bear a higher share of road fatalities.

These developments raise the question if current EU road safety policy measures are sufficient and effective. What initiatives are currently in the EU pipeline to bring the number of serious traffic accidents down, and what are the different aspects influencing the number of injuries and deaths? Dr2 Consultants’ Transport Team outlines what legislative initiatives relevant for companies and end-users in the road transport sector the EU is expected to table. Innovative solutions will be needed to further bring down the number of fatalities on European roads, which will both put additional responsibilities on both road users as well as providers of transport services.

Looking ahead: “Vision Zero”

Currently, the European institutions are working together with several international organizations to achieve ‘Vision Zero’. Vision Zero is a strategy to eliminate all traffic fatalities and severe injuries, while increasing safe, healthy and equitable mobility for all by 2050 inter alia through policies that stimulate the use of new technologies that enhance road safety.

To combat the stagnation of the reduction of the number of road deaths, and ensure that the EU maintains its leading position in the world in terms of road safety, Commissioner for Transport, Adina Vălean, highlighted several areas of attention during the Road Safety Results Conference:

  • Considering an urban mobility initiative which includes safety at all stages of mobility and urban planning. This initiative should also address the fast roll-out of micro-mobility devices throughout European cities, leading to road safety challenges;
  • Taking action to reduce speeding and alcohol consumption through further use of EU recommendations;
  • Developing and stimulating the uptake of innovative solutions, for example systems detecting weaker road users and advanced driver-assistance systems.

More will become known on these initiatives in the coming months, of which Dr2 Consultants is expecting it will influence road transport for years to come. Therefore, it is essential to gather the latest information through contact with EU institutions in Brussels. Learn more about how our monitoring services can help you stay up to date on relevant EU legislative initiatives here.

Adina Ioana Vălean - European Commissioner for Transport
Adina Ioana Vălean | European Commissioner for Transport   © European Union, 2019

One of the most prominent pieces of EU legislation safeguarding road safety, also mentioned by Commissioner Vălean during her conference keynote, is the Directive on Driving Licenses. The Directive, laying down specifications for mandatory theory tests, medical tests for professional drivers, and qualification and training of driving examiners, will be subject to a revision process starting end of this year with an eventual proposal expected by the end of 2022. Moreover, the Commission will revise the Directive on cross-border enforcement of traffic rules, come up with new guidance on blood alcohol content and the potential use of alcohol interlocks, and adapt the eCall Framework to new technologies (expected at the end of 2021, or early 2022).

In 2020, the transport committee (TRAN) of the European Parliament also started working on its own recommendations to further improve EU road safety, tackling the number of fatalities on European roads. In its draft report, the committee states inter alia that Member States and cities should consider bringing down speed limits from 50km/h to 30km/h, making EU funding available to increase road safety in countries such as Romania and Slovakia, and further incorporating (digital) advanced safety features such as intelligent speed assistance and emergency lane keeping systems as mandatory instruments in new vehicles. Apart from the increased safety that could be achieved for individual drivers, road transport companies and manufacturers of heavy-duty vehicles will have to look out for additional obligations to improve road safety in the upcoming years.

However, as traffic management and road safety are still Member State competences, it is questionable if the European Parliament and European Commission can realistically achieve Vision Zero by 2050. In the coming years both EU institutions will aim to integrate road safety in all of their proposed legislation, including the latest trends in mobility (new forms of mobility, driver-assistance systems, etc.), but ultimately the responsibility and initiative will be with the Member States to make a dent in the traffic fatality numbers.

For stakeholders it will be crucial to remain in an open dialogue with both EU institutions as well as Member States. Providers of innovative solutions for transport will have to ensure that the costs of conforming to EU policy do not weigh a too heavy burden on the business model. On the other hand, EU Member States remain strongly in the lead in the national implementation of policy for all modes of transport.

What can Dr2 Consultants do for you?

Over the last years, Dr2 Consultants has built up a track record in advising a broad range of transport clients in navigating the EU ecosystem. Feel free to reach out to discuss opportunities and threats in the upcoming legislation related to EU road safety for your company or organization with us over a virtual coffee. Visit our transport sector webpage for more information.

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