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European Year of Rail: 2021 – boost to a modal shift

The EU institutions declared 2021 as the European Year of Rail but what will next year exactly entail and how can stakeholders take advantage of this initiative? In this blog post, Dr2 Consultants highlights how the rail sector will be put in the limelight as of January.

Every calendar year since 1983 (with the exception of 2016 and 2017) marks a new ‘European Year’ with a different theme during each iteration. The European Years span across a wide range of subjects such as development aid (2015), mobility of employees (2006) languages (2001), etc. 2021, has been declared the European Year of Rail.

The main goal of designating ‘European Years’ is to increase the visibility of certain industries and to promote a political momentum to bring around significant changes. The practical aspects mostly entail media campaigns and stakeholder events targeting both European citizens as well as businesses and other stakeholders. In some cases, the European Commission also uses this opportunity to put forward new legislation.

What the European Year of Rail will look like?

In March 2020, the European Commission published a proposal for a decision to designate 2021 as the European Year of Rail. Rail plays an important role in the Commission’s plans in decarbonizing the transport sector, as it is referred to in the European Green Deal as the most sustainable and therefore preferred mode of transport. Moreover, the rail sector has also taken a prominent place in the COVID-19 recovery phase as enabler of the green recovery.

The Commission’s proposal was quickly followed by inter-institutional consultations between the European Commission, the European Parliament, and the Council of the EU, where an agreement was reached on the final text on 12 November. The agreement includes a final budget for the year of €8 million, which is higher than previous proposals. While a comprehensive list of the activities is still yet to be published, following an advice taken up in the European Parliament’s Transport and Tourism Committee (TRAN) report on the proposal for decision, the Commission has been tasked with conducting two studies into concrete proposals to stimulate both freight as well as passenger related rail transport. Even though the final text of the decision is basically set in stone, it has to be approved by the European Parliament plenary (date still to be determined) and the meeting of the European Transport ministers in the Transport Council of 8 December.

Impact on the rail sector

Designating 2021 as the European Year of Rail is in line with the European Commission’s priorities on making transport more sustainable. Stakeholders from the rail sector have unique opportunities in shaping the policy agenda for the years to come, meaning that it will be imperative for them to seize this momentum as much as possible.

Several key initiatives for the transport and rail sector will be central in 2021. Firstly, actively providing input on the execution of the policy initiatives mentioned in the Strategy for Sustainable and Smart Mobility (planned to be published on 8 December 2020) will be crucial in shaping the rail sector for years to come. Secondly, in June 2021 the TEN-T Days will be organized by the Portuguese Presidency of the Council of the EU, which will be an important moment to influence the TEN-T revision and future targeted rail infrastructure investments. Lastly, highlighting important European routes in the Action Plan on rail corridors (Q3 2021), which will aim to facilitate better connections between European capitals and the modal shift, will increase efficiency and connectivity on the trajectories most important to stakeholders actively lobbying on the file. Activities surrounding these proposals, ranging from formal consultations to stakeholder dialogue events and communication campaigns will be initiated on all different levels (European, national, regional and local).

EU Affairs Training - 28 January 2021

In parallel to the policy initiatives, there will be other initiatives that highlight the momentum for rail. This year, a coalition of 25 Member States have set up the International Rail Passenger Platform, in which governments and the industry come together to make meaningful steps on the topics of infrastructure development and passenger services (i.e. ticketing). In addition, Germany has initiated the revival of the once popular TransEuropExpress, with launching a study on high-speed rail transport and night trains. The arts festival Europalia will dedicate its 2021 edition to the influence of railways on arts and their contribution to socio-economic change.

Opportunities for stakeholders in the European Year of Rail

As the focus of 2021 will be on setting the agenda for a modal shift to rail transport, European stakeholders can utilize the stage set by European institutions for rail-related issues to further elaborate and market their ideas and solutions. As the European Commission will be responsible for rolling out of communication and marketing campaigns, being aware of the latest events and actively engaging with the European institutions to be the first guest or participant of choice will be a crucial step to take to be more visible and effective. The industry will be able to fulfil a much needed role in the Commission’s campaigns, providing substance and content-driven input. Additionally, European businesses can initiate their own communication campaigns, which link to the existing media-related initiatives in the context of the European Year of Rail. This will greatly increase the effectiveness and reach of these campaigns, increasing their value and efficiency, and resulting in more value for money.

As mentioned earlier, the European Commission will be conducting two studies. Accompanying stakeholder consultations are expected in the first half of 2021, focused on the viability of a European label to promote goods transported by rail and the development of a rail connectivity index for rail passenger transport. The outcome of these studies will influence legislation for years to come, meaning that taking a proactive role is imperative. These consultation moments are also an opportunity to increase the network of Public Affairs professionals within the European Commission. It is therefore key to be aware of the latest consultations, even if they might not be public, to know who to engage with within the institutions and to effectively promote Public Affairs messages.

Moment to act

Dr2 Consultants has built solid expertise and network by providing support to transport stakeholders from rail and aviation to the maritime sector. We tailor our services, knowledge and expertise to support organizations in the most bespoke way and achieve tangible results. To successfully capitalize on the current political momentum and seize the opportunities provided by the European Year of Rail in 2021, please get in touch with us through our website.

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The future of the EU transport sector (2021-2024) – four trends

The future of the EU transport sector (2021-2024) – four trends

For the EU’s transport sector, the last several months were exceptionally challenging with passenger and freight transport being severely disrupted. Although the recovery of the sector is of vital importance for Europe’s economy, it also provides a momentum for the industry to act on the ambition of decarbonization and reaching climate neutrality by 2050. The upcoming EU Strategy for Sustainable and Smart Mobility (“EUSSSM”), scheduled to be published by the European Commission on 9 December, should pave the way towards sustainable recovery and provide clarity on the instruments to get there. The EUSSSM is the sequel to the 2011 White Paper on transport and will set out the broader policy priorities for the transport sector for the period of 2021-2024, including timelines for legislative and non-legislative proposals. A stakeholder consultation was closed on 23 September, attracting more than 600 stakeholder contributions. Based on our latest intelligence and the contributions of our clients to the consultation, Dr2 Consultants presents four emerging trends that will shape the future of the EU transport sector.

1. Prioritizing alternative fuels across all modes of transport

Alternative fuels are a key priority for the Commission to cut emissions and create jobs. The EU’s executive arm aims to accelerate the production of low-emission fuels and the deployment of sustainable vehicles and vessels. Following the publication of the Hydrogen Strategy this summer, the EUSSSM is expected to outline the broader uptake of green hydrogen in the transport sector. Although electrification seems to be the most viable option on the short term, hydrogen is dubbed as the energy source for the future of the EU transport sector.

In addition, the EUSSSM is expected to propose a range of policy instruments to decarbonize the EU transport sector and cut back CO2 emissions. A silver bullet to decarbonizing the transport sector is lacking, hence a mix of alternative fuels is required. The details of the fuel mix for the future will be worked out in both FuelEU proposals (FuelEU Maritime and ReFuelEU Aviation), that will aim to set out a pathway for low-emission fuels to be used in the maritime and aviation sectors. In parallel, the Commission is working on the revision of the Alternative Fuels Infrastructure Directive (AFID), which will accelerate the development of the necessary infrastructure across Member States to stimulate the uptake of low emission fuels for all transport modes. The AFID is expected to be upgraded to a Regulation to ensure that Member States act upon the ambitions.

How can the EUSSSM and related initiatives stimulate the uptake of alternative fuels in the maritime sector? According to the Port of Rotterdam, the FuelEU initiative and the AFID revision should be handled in an integrated manner to ensure that demand and supply requirements remain aligned. At the same time, a goal-based approach is a prerequisite for success. According to the Port, there is no one-size-fits all approach: the legislative framework should be accompanied by a clear roadmap (to be developed by the Member States together with all stakeholders in the value chain) encompassing the range of fuels available for each segment, while meeting general criteria of sustainability, carbon intensity and affordability.

2. Safeguarding competition in the aviation sector

European airlines have been intensively exploring potential pathways towards reducing their carbon footprints (offsets or market-based measures). To limit the climate impact of air travel, it is essential that a basket of measures is applied simultaneously to allow European aviation to fully contribute to the climate effort while long-term solutions are implemented to reduce emissions. These measures include, i.e. greener aircraft technologies, more efficient operations and infrastructure, the development of and appropriate support for sustainable aviation fuels (SAFs) and smart economic instruments.

The sustainable growth of aviation, which produces socio-economic benefits and contributes to achieving European environmental targets, remains one of the industry’s most important objectives. There is an urgency to make bold political decisions that will help European aviation meet these objectives for the benefit of passengers and businesses that rely on sustainable air connectivity. The EU should however refrain from imposing unilateral measures at EU level that would hamper European airlines’ ability to compete at global level.

3. A modal-neutral approach, facilitating sustainable transport

In recent months, Member States such as Austria and France have both announced that they would significantly cut short-haul flights if an alternative transport mode is available. Simultaneously, railway undertakings experience an increasing market demand for international rail passenger transport. According to the Dutch Railways (Nederlandse Spoorwegen – NS), the principal Dutch rail passenger operator, the EUSSSM should embrace the modal shift and stimulate the uptake of climate-friendly alternatives such as rail. In order to promote the development of an international passenger service market, the NS is of the view that the EU should strive towards the creation of a European high-speed network that is interoperable, linking European capitals and major cities and connecting urban nodes and airports.

The EUSSSM is expected to have a modal-neutral approach, but it will focus on facilitating the market demands and stimulating sustainable modes of transport. The Commission is expected to address issues related to establishing a level playing field between the modes of transport (i.e. fuel taxation, infrastructure charges), improving intermodal ticketing services and increasing the customer experience through digital solutions such as the Mobility as a Service (MaaS) concept.

4. Green funding to enhance the resilience of the EU transport industry

In order to stimulate the resilience of the European transport industry and to realize the ambitions that will be set out in the EUSSSM, investments are necessary. Following the landmark approval of the new EU budget and the Next Generation Recovery Fund by the European Council in July, the co-legislators are expected to conclude the budget negotiations by the end of this year. With a combined firepower of more than €1,800 trillion, EU Member States will have various funding instruments at their disposal to finance the recovery of the transport sector.

Member States are currently drawing up the national recovery plans in order to receive funds from the Recovery Fund. The draft plans should be shared with the Commission by late October. Project that have a cross-border impact, clear link to sustainability objectives and which can be executed in the next five years will get priority. According to the Commission, 30% of all funding through the Recovery Fund and in the new EU budget will be spent on sustainable projects.

Next steps

The EUSSSM is expected to be published on 9 December. In case you would like more information on the anticipated impact of the strategy on your organization or would like to know more about the future of the EU transport sector, do not hesitate to get in touch with us.

Visit our Transport Sector webpage.

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Back to work: EU legislative proposals – 2020 outlook

As the summer recess is coming to an end, the European Commission will start preparing the EU legislative proposals that are still in the pipeline for 2020, according to the work program. As the second semester of the year will be a packed one, it is key to timely prepare input in order to have your priorities heard.

Following our blog on the EU initiatives that were open for feedback over summer, Dr2 Consultants now guides you through the main remaining proposals for 2020 in the transport, sustainability and digital sector. You can find these below in that particular order.

Transport up-to-speed with the new decade

Emerging developments such as the decarbonization of transport, digitalization and the global COVID-19 pandemic have stressed the need to review the Trans-European Transport Network (TEN-T) Regulation. The TEN-T policy aims to develop and implement a Europe-wide infrastructure network linking ports, highways, airports and railways. With the upcoming revision of this EU legislation, the European Commission aims to bring TEN-T up-to-speed with the ongoing green and digital transitions. The Commission is expected to put renewed emphasis on the strengthening of urban nodes, the update of infrastructure requirements, and the alignment of the TEN-T policy with the EU’s environmental policies.

The Commission is currently finalizing the evaluation of the TEN-T Regulation. The different modes of transport are still invited to contribute to dedicated case studies in the course of September. The European Parliament is currently preparing an own-initiative report on the TEN-T policy. The Transport & Tourism committee will discuss the draft report on 3 September. The Commission is expected to publish a roadmap and a public consultation later this year. A legislative proposal is foreseen for summer 2021.

In addition to the TEN-T, the Commission is expected to publish the EU’s Strategy on Sustainable and Smart Mobility. With this strategy, the Commission intends to adopt a comprehensive strategy to reduce transport-related greenhouse gas emissions by 90% by 2050, and to ensure the transport sector is fit for a clean, digital and modern economy. A public consultation has been opened in the summer and is open for feedback until 23 September.

Visit our Transport page.

Green energy and sustainable production

The energy-focused sibling of TEN-T will also be subject to a revision this year. The Trans-European Energy Network (TEN-E) Regulation aims to link European electricity, gas and oil infrastructure into a single network, consisting of nine corridors. TEN-E focus areas are smart grids, electric highways and the cross-border carbon dioxide network. This EU legislation is considered to be instrumental to realize the renewable energy objectives across the Union, for example in stimulating the hydrogen economy. The Commission will come up with a legislative proposal for a revised TEN-E regulation.

European Green Deal Impact Scan

In addition, several EU legislative proposals will be initiated that will have an impact on producers. Proposals that tackle packaging waste, deforestation and industrial emissions are currently in the pipeline. Striving towards a circular economy, the Commission will promote waste reduction by reviewing the Packaging Directive. This may include improved design standards and increased recycled content in packaging materials. Possibly, packaging design standards will also change as a result of the Deforestation Regulation, which could include labelling requirements and verification schemes to increase the transparency of supply chains. Finally, the Industrial Emissions Directive may require additional sectors, such as farms and extractive industries, to implement available sustainable production techniques. Public consultations on the three initiatives are upcoming this year, and the respective legislative proposals are scheduled for 2021.

Visit our Sustainability page.

Trustworthy AI and shared data spaces

Artificial Intelligence (AI) is increasingly affecting our society. Applications can bring about revolutionary changes in healthcare, governance, research, production and many other areas of our society. On the one hand, opportunities such as the precision of diagnosis, the prevention of car accidents and more efficient farming are promising. On the other hand, AI carries several potential risks, including racial, gender or other discriminatory biases, infringements of our privacy and reduced governance accountability.

Amidst global competition, the European Commission aims to distinguish the EU approach with its emphasis on European values. The EU strategy must embrace opportunities, while protecting citizens from potential harmful impacts. The European approach for trustworthy artificial intelligence will propose ethical requirements for AI, following the general strategy presented in the White Paper, stakeholder consultations and the draft guidelines presented by the High-Level Expert Group on AI in 2018. The initiative will be a review of the draft guidelines, on which stakeholders will be invited to deliver input through the upcoming roadmap.

Another aspect of the EU digital strategy is the regulation of the growing volume of data. Data can give valuable insights that drive innovation in areas such as medicine, mobility and policy-making. The creation of common European data spaces will allow citizens, businesses and organizations to access non-personalized data from different Member States, pooled across different key sectors. European privacy rules (GDPR) and competition law continue to be applied. Although the roadmap has already closed, input can be delivered through the upcoming public consultation. Adoption by the College of Commissioners is expected by the end of 2020.

Visit our Digital & Tech page.

Next steps 

Commission proposals on the EU legislative initiatives mentioned above are expected by the end 2020, or in the course of 2021. As the Commission is preparing for a proposal-packed final quarter, it is key to reach out early to have your interests set on the agenda.

Want to know more about the upcoming initiatives, COVID-19, or other files that might affect your business? Please contact Dr2 Consultants to see what we can do for you.

Summer recess – what’s next?

As EU leaders agreed on a new proposal for the new Multiannual Financial Framework and the Recovery Plan on 21 July, the European Parliament was given good food for thought over its summer recess. However, the new long-term budget is not the only priority on the EU agenda. The Commission is already chewing on a series of proposals to be expected later this year and in 2021. In fact, now is the moment to deliver input on some key, planned legislative proposals, as the Commission launched a series of public consultations that are open until after summer. Let’s have a look what is next after the 2020 summer recess.

Transport: smarter and greener

The green and digital transition as the twin priorities of the Von der Leyen Commission are also reflected in the upcoming transport initiatives. To deliver the ambitious European Green Deal climate neutrality objective, the mobility sector needs a 90% emission reduction by 2050. The Strategy for Sustainable and Smart Mobility, expected towards the end of the year, will be the overarching strategy for the delivery of the twin transitions in this area. Stakeholders can contribute to the public consultation until 23 September.

Expectedly, the strategy will include the integration of alternative fuels, in line with the recently published hydrogen strategy that already outlines a pathway for the deployment until 2050 in all modes. The strategy is also complemented by the upcoming FuelEU initiatives for the maritime and aviation sector. The FuelEU Maritime initiative, aimed at boosing alternative fuels in shipping specifically, is open for feedback until 10 September. The public consultation on ReFuelEU Aviation, initially planned for the first quarter of 2020, is still to be expected ahead of the Commission proposal this year.

Sustainability: a bigger role for tax

Taxation will become a more important instrument for the Commission to align consumer choices and business investments with its climate targets. On 23 July, public consultations on both the revision of the Energy Taxation Directive and the creation of a Carbon Border Adjustment Mechanism were launched. Having been unchanged since its adoption in 2003, the Energy Taxation Directive will be subject to a thorough review. The exact changes are yet to be determined based on the consultation outcome, however, what is clear is that it will include a correction of the minimum taxation rates for electricity, gas, and coal, as well as a tax exemption reduction for fossil fuels. The proposal, which is part of the European Green Deal, is scheduled for June 2021. The consultation is open for feedback until 14 October.

In addition, the Commission proposes a Carbon Border Adjustment Mechanism to prevent ‘carbon leakage’. This ‘CO2-tax’ internalizes emissions in the price of a product, so production does not shift to countries with lower climate ambitions. The exact instrument is still to be determined, and could take the form of an EU-wide import tax or an extension of the Emmission Trading System (ETS). The latter has already seen critical responses, as this may not be in line with WTO rules. The Commission plans to scrutinize the issue and present a proposal later this year. The revenues would directly contribute to the ‘own resources’ of the EU budget for the next seven years that would help finance the new €750 billion recovery plan. Stakeholders can deliver their contribution to the plan until 28 October.

Digital: fit for the COVID-19 reality

Following its pledge to make Europe ‘fit for the digital age’, the Digital Education Action Plan and the Digital Services Act are also high on the Commission’s agenda. The Digital Education Action Plan, due to be published in September this year, will be part of the Next Generation EU program. The COVID-19 crisis has seen schools and universities close their doors and increasingly turn to remote, digital teaching. The Action Plan aims to promote high-quality and inclusive education and training in the post-COVID digital reality. Feedback on the proposal can be delivered until 4 September.

Part of the Next Generation EU financing is the digital tax element of the Digital Services Act, to be presented by the end of 2020. The Digital Services Act is an attempt to regulate online platforms when it comes to illegal goods, product safety, political advertising and offensive content. The initiative may face intense debates before its approval, as previous attempts to implement an EU-wide Digital Taxation mechanism have so far been unsuccessful. The consultation remains open until 8 September.

Next steps

The Commission’s proposals on the above initiatives are expected before the end of 2020, except for the Energy Taxation Directive which is due in June next year. From the above-mentioned public consultations, it is evident that the European Commission is gearing up for a busy end-of-year period. Early (proactive) action is desirable for stakeholders that aim to represent their interests on these files, which will also be closely examined by the European Parliament and Council of the EU in 2021 (and later).

Want to know more about the upcoming initiatives, COVID-19, or other files that might affect your business? Please contact Dr2 Consultants to see what we can do for you.

Europe’s hydrogen revolution: the outlook for transport

On 8 July, the European Commission unveiled its long-anticipated Hydrogen Strategy, laying out a roadmap to make the EU the global leader in the hydrogen economy. The Hydrogen Strategy aims to foster the energy transition and act on the ambition of achieving climate-neutrality by 2050. The Commission aims to grow the share of hydrogen in the EU’s energy mix from the current 2% to 13-14% by 2050.

The momentum for hydrogen has grown in recent months. Market demand has significantly increased and the costs of renewable energy have decreased. Moreover, several Member States already published national hydrogen initiatives (e.g. Germany, France, the Netherlands). According to the Commission, a coordinated approach at EU level is necessary to scale up fast and streamline investment needs.

With the Hydrogen Strategy, the Commission charts the path towards ‘green’ hydrogen, based on renewable electricity (e.g. solar and wind energy). However, as green hydrogen is not yet cost-competitive against fossil-based hydrogen, the Commission acknowledges the potential of low-carbon hydrogen (e.g. Carbon Capture Storage) as a facilitator to scale up production and stimulate the market demand for hydrogen.

Hydrogen as enabler of emissions-free transport

The Hydrogen Strategy presents opportunities for the transport industry to act on the ambition of decarbonization and reducing CO2 emissions. Although electrification seems to be the most viable option on the short term, hydrogen is dubbed as the energy source for the future of transport. According to the Commission, the application of hydrogen in the transport industry is likely to develop through a gradual trajectory.

  • In the first phase (2020-2024), the objective is to produce up to 1 million tonnes of renewable hydrogen and to facilitate the take up of hydrogen consumption in commercial fleets (e.g. taxi’s) and specific parts of the railway network. Moreover, it could also be applied to heavy-duty transport, such as buses, lorries, coaches – currently responsible for about 6% of total EU CO2 emissions.
  • In the second phase (2025-2030), the objective is to make hydrogen an intrinsic part of an integrated energy system and to produce up to 10 million tonnes of renewable hydrogen. In this phase, green hydrogen should be cost-competitive with other forms of hydrogen production, but demand-boosting policies will be needed for the application of hydrogen in the railway sector and maritime transport (e.g. short-sea shipping and inland waterborne transport).
  • In the last phase towards maturity (2030-2050), renewable hydrogen and hydrogen-derived synthetic fuels could be applied to several hard-to-decarbonize modes of transport, such as aviation and deep-sea shipping, although the Commission acknowledges more research and innovation efforts are required to realize these ambitions.

In order to realize the hydrogen ecosystem and trajectory for transport, the Commission opts for an integrated value chain approach. In doing so, the Commission incorporates several aspects which are necessary to facilitate the hydrogen transition, ranging from infrastructure (e.g. the deployment of hydrogen refueling networks for the different modes of transport) to production techniques and market regulation (e.g. EU incentives to stimulate demand-side support policies).

The Commission is still exploring further renewable hydrogen appliances in the transport industry. This broader uptake of green hydrogen in the transport sector will be reflected in the Strategy for Sustainable and Smart Mobility, which is due for publication in the fourth quarter of 2020, and for which the public consultation has recently opened

Stimuli for the Hydrogen revolution

The Clean Hydrogen Alliance, a Commission-led coalition that brings together industry, governments and civil society, will identify a robust pipeline of projects to accelerate the upscaling of hydrogen production. The Alliance will be strongly anchored in the hydrogen value chain, covering green and low-carbon hydrogen from production via transmission to mobility, industry, energy and heating applications.

Financial instruments such as InvestEU, the Horizon partnership for clean hydrogen and the Cohesion Fund, which will expectedly be topped up by financial resources from the €750 billion Next Generation EU Recovery Fund, will help drive clean hydrogen past its tipping point.

All eyes on Berlin as Germany starts the Council Presidency

On 1 July, Germany took over the Presidency of the Council of the EU from Croatia, for the second half of 2020, which is already dubbed the ‘Corona-Presidency’. The upcoming six months will bring historic challenges as the management of the recovery from the current health crisis will coincide with some fundamental political choices in the EU, and the outcome will determine the future direction of European integration.

As one of the most powerful Member States of the EU takes over at this crucial moment in time, it will have to play multiple roles at the same time.

Crisis management

First and foremost, the German Presidency will have to play its role as ‘crisis manager’ in the context of the COVID-19 pandemic. Based on epidemiological developments and assessments, the German Presidency will seek to increase coordination in Europe to gradually return to a fully functioning Schengen Area. Furthermore, Germany is expected to lead the politically complicated negotiations on potentially expanding the list of third countries from which travel to the EU is allowed. These priorities will be central during the whole German Presidency mandate.

EU budget negotiations

Germany will also take an active part in managing the negotiations on the new Multiannual Financial Framework (MFF) 2021-2027 and the Next Generation EU Recovery Fund during the summer months. The main challenge will be to find common ground between the hard-hit Member States, such as Italy, Spain and France on the one hand, and the ‘frugal four’ – Austria, Denmark, the Netherlands and Sweden – on the other hand, with the latter group being against grants as part of the Recovery Fund. Germany will be directly responsible for the legislative work on the different sector programs within the MFF (e.g. Horizon Europe, Just Transition Fund and InvestEU) and the Recovery Fund, and will lead the trilogue negotiations with the European Parliament on the financial framework, once there is political agreement on the general features of the future budget. France and Germany expressed their ambition for a quick agreement by end of July, as European leaders are set to meet face-to-face on 17 and 18 July.

Brexit negotiations

With the Brexit transition period ending on the 31 December 2020 and the United Kingdom declining the opportunity to extend this deadline, the German Presidency will have yet another prospective challenge. Once an agreement has been reached at European Commission level, the Member States will have to give their consent. German EU ambassador Michael Clauss stressed that Germany will be exclusively focusing on “brokering agreements between the 27”.

The German Presidency program expresses the Presidency’s ambition for a comprehensive partnership between the EU and the UK. However, it also reads that the Member States will not accept an agreement that would distort fair competition within the Single Market. If there is an acceptable agreement before the end of the year, the German Presidency is expected to align Member States in its role as ‘Brexit-Broker’.

Work program

The work program sets out, in broad terms, the policy priorities for the second half of 2020. In general, Germany will prioritize the digital and green transitions throughout all of its activities. The German Presidency is committed to an innovative Europe based on three pillars: expanding the EU’s digital sovereignty, enhancing competitiveness and a sustainable and stable financial architecture. It will also ensure that the Green Deal’s implementation will contribute to the recovery from the COVID-19 pandemic in Europe.

The German Presidency will have an extremely challenging task of fostering European unity in the budget negotiations in the face of existing difficulties such as the COVID-19 crisis and Brexit. For more information on the German Presidency’s sector-specific priorities, please read our analyses of the German priorities in the fields of digital & tech, sustainability and transport:

From Green Deal to Green Recovery

While the COVID-19 crisis has seen unprecedented challenges for the European transport sector, it also demonstrated the crucial role transport plays to ensure an uninterrupted supply of goods and services across Europe. Although the recovery of the sector is of vital importance of Europe’s economy, the recovery from the crisis also provides a momentum for the industry to act on the ambition of decarbonization and reaching climate neutrality by 2050. As put forward in the Commission’s EU Recovery Plan, the COVID-19 recovery phase should be used to pave the way towards not only a resilient and reliable transport sector, but also a sustainable one that is at the heart of the European Green Deal.

Following the publication of the Commission’s plan for recovery – dubbed as ‘Next Generation EU’ – as well as its updated Work Program for 2020, we have a clearer picture how the greening of the sector will unfold in the coming years. Dr2 Consultants’ transport team presents four take-aways for sustainable transport that will dominate the EU’s policy agenda in the years to come.

1. Alternative fuels, sustainable vehicles

Alternative fuels are a key priority for the Commission to cut emissions and create jobs. The EU’s executive arm aims to accelerate the production of low-emission fuels and the deployment of sustainable vehicles and vessels. In order to finance this, public investment should come with a commitment from the industry to invest in cleaner and more sustainable mobility.

The roadmaps for the further deployment of different fuel types are expected to be part of the highly-anticipated FuelEU proposals – to be published later this year – that will aim at increasing the use of alternative fuels in the maritime and aviation sector. Furthermore, in early 2021, the Commission will put forward the revision of the Alternative Fuels Infrastructure Directive, which will ensure the development of the necessary infrastructure across Member States to stimulate the uptake of sustainable fuels for all transport modes. 

2. The convergence of the energy and mobility systems

In order to decarbonize the transport sector, no stone is currently left unturned. Although electrification seems to be the most viable option on the short term, hydrogen is dubbed as the energy source for the future. The Commission’s flagship instrument for research and innovation, Horizon Europe, will be instrumental to kick-start the clean hydrogen revolution. The Commission has increased its budget in the new Multiannual Financial Framework (MFF) with €13.5 billion, bringing Horizon Europe’s new budget to a total of €94.4 billion.

Later this month, the Commission will launch the Clean Hydrogen Alliance to stimulate the upscaling of clean hydrogen production in Europe. Also, the work of the European Battery Alliance will be accelerated. On 24 June, the Hydrogen Strategy is expected to be published.

3. Cities at the heart of sustainable mobility

With over 70% of EU citizens currently living in urban areas, achieving sustainability in cities across Europe is one of the main challenges of the recovery period. As a direct result of the COVID-19 crisis, noise pollution and air quality figures have dropped to an unprecedented level. Moreover, cities reinvented the way citizens move around, e.g. by giving priorities to pedestrians, introducing speed limits for vehicles and implementing new cycling lanes. The shift towards smart and more livable cities, therefore, places a big responsibility on the transport sector.

The Commission aims to increase the support for zero and low-emission mobility in cities by investing significantly in clean urban mobility. Funding calls in the Connecting Europe Facility (CEF) and InvestEU programs will focus on clean fleet renewals by cities, the deployment of charging points and mobility-as-a-service solutions.

4. Taxation, anyone?

In the Next Generation EU, the Commission proposes to generate additional own resources by new taxes. Although the Commission still must draw up the specifics, it floated the option of extending the EU’s Emissions Trading System (ETS) to the maritime sector, thereby raising up to €10 billion annually that will feed into the EU’s budget. In addition, the so-called carbon border adjustment mechanism is likely to be introduced, putting a carbon levy on non-EU imports.

Raising these kinds of ‘European’ taxes is unprecedented. As Member States have diverging views on this matter, it remains to be seen whether we can expect a breakthrough on these new own resources any time soon.

Next steps

The Commission aims to have the new MFF and recovery fund operational by 1 January 2021. EU leaders are expected to start the negotiations on the budget proposal during the European Council Summit on 19 June and will have multiple rounds of very difficult talks until a compromise is made. This ultimately means that the budget as proposed now for transport-related funding instruments can still change. The budget negotiations are expected to accelerate when Germany takes over the rotating six-months Presidency of the Council of the EU on 1 July 2020.

Why now is the time to embed European affairs in your organization?

Author:

Margreet Lommerts

Managing Partner at Dr2 Consultants

More than ever, it is important to have a focused and effective European Affairs Strategy and structure in place to effectively contribute to the (re)shaping of the European economy for the next decades. Now is the time for organizations to see EU affairs no longer in isolation but as an integral part of their Corporate Affairs Strategy.

Soon after the start of the new European Commission at the end of 2019, we could already see the outline of the agenda of Commissioner President von der Leyen. The Commission’s Green Deal – published on 13 December – presents an overarching growth strategy to achieve a green transformation and climate neutrality of the economy.

Before the realization of tangible proposals for the green and digital transformations of the EU economy, COVID-19 turned the Commission into full crisis mode. Priorities shifted and the Commission and Council of the EU dedicated their work on drafting a comprehensive recovery plan from the health and economic crisis. It will not come as a surprise that a green recovery and the digital transformation will continue to be prioritized and play a central role in relaunching and modernizing the EU economy. According to the Commission, the trillions of euros for the recovery should be spent in a clean, competitive, resilient, and inclusive economy for the 21st century, into a new economy.

As the Commission is formulating its economic and green recovery plan, there is an enormous momentum for organizations to engage with EU institutions in Brussels and to play a role in the shaping of the new economy which will have a huge impact on all businesses.

Looking at the transport sector, it is clear that the demand for mobility and individual transport is changing due to the COVID-19 crisis. The European transport sector faces the great challenge of regaining consumer confidence while stimulating economic growth. According to the Commission, green and digital transitions are at the center of the recovery to create new jobs, remain internationally competitive and bring the sector in line with European climate goals. The Commission aims to better coordinate modes of transport and to encourage the use of sustainable fuels.

In addition, the European energy market will be heavily impacted by the EU’s climate ambitions. The European solar and wind energy market is expected to shrink by about 30% because of disruptions in the logistics chain, delays in projects and stricter financing conditions. As a result, the realization of the EU’s climate targets for 2030 are in jeopardy. This means that acceleration must take place to achieve the EU’s green ambition. The Commission is expected to make additional funding available for sustainable industrial projects and technologies (e.g. carbon capture and storage, relaxation of state aid rules, and alignment of energy taxation with climate ambitions with the aim of getting innovative projects off the ground and scaled up.

As an effect of the COVID-19 crisis, the digital transformation of more “traditional” businesses has definitely accelerated, like brick-and-mortar shops, some of which probably had no online presence whatsoever, maybe not even a Facebook or Google page, before the outbreak. In order to continue operating in a full lockdown situation, these businesses have had to quickly “go online”, either individually or in cooperation with other similar businesses or by relying on the services of online platforms such as e-commerce marketplaces.

As the Commission, Members of the European Parliament (MEPs), and Member States are actively reaching out for industry input, it is important for these businesses to get involved and make their voices heard at EU level, so that they can contribute to the shaping of EU policies that can actually benefit them.

Even though advocacy in these challenging times may not seem top priority and will take more time, the EU institutions are calling for input and involvement from industry which is a prerequisite for future-proof legislation.

Dr2 Consultants has a proven track record in supporting organizations to become more effective in their European Affairs by providing support in:

  • Identifying the role of European Affairs within the current structure and develop the ideal proposition for your organization;
  • Defining a targeted European Affairs strategy with key objectives;
  • Providing tools and know-how on how to execute the strategy successfully;
  • Creating effective internal structures.

For more information or to get in touch click here.

Reinstating the European transport sector

Following weeks, during which containment measures rapidly succeeded each other, the focus of the EU institutions is now on shifting towards re-establishing transport services and connectivity in the EU. The relief measures of 8 May (more information below) and the package of guidelines of 13 May and recommendations are considered to be important milestones in the recovery of the sector.

Nonetheless, the recovery phase is far from crystallized. Important discussions are still taking place in various European Parliamentary committees and Council configurations, focusing amongst others on maintaining a level-playing field between the different modes of transport, safeguarding passenger rights (e.g. reimbursement of tickets) and aligning the recovery measures with the EU’s climate objectives.

The Commission is expected to present a new proposal on the Multiannual Financial Framework (MFF) for the period 2021-2027 on 20 May, although this is not a definitive date. The amount of the overall budget and the allocation of funds will provide more clarity about the financing of the recovery of the transport sector.

Herewith you can find an overview of recent contingency and recovery measures in the transport sector. For a detailed analysis of the developments below, please get in touch with us via our website.

Transport relief measures

The European Commission is working together with Member States on transport relief measures, covering all modes of transport, which the European Parliament is expected to approve during its extraordinary plenary session of 13-15 May. Among the measures are (1) an aviation relief package, (2) an omnibus legislative proposal for the extension of certificates and (driving) licenses, (3) the postponement of the transposition deadline of the Fourth Railway Package and (4) an amendment to the Port Services Regulation, which allows reduced infrastructure charges in the maritime sector.

Communication on lifting travel restrictions

On 13 May, the European Commission presented a package of guidelines and recommendations to advise Member States on gradually lifting travel restrictions and allow tourism businesses to reopen, after months of lockdown, while respecting necessary health precautions. The Commission’s communication consists of several documents, including:

  • A common approach to restoring free movement and lifting restrictions at EU internal borders in a gradual and coordinated way;
  • A framework to support the gradual re-establishment of transport whilst ensuring the safety of passenger and personnel;
  • A recommendation which aims to make travel vouchers an attractive alternative to cash reimbursements for consumers;
  • Criteria for restoring tourism activities safely and for developing health protocols for hospitality establishments.

These Commission guidelines are non-binding, as Member States can decide unilaterally on border controls and restrictions. However, the Commission aims to coordinate their efforts to achieve the freedom of movement as much as possible by facilitating cross-border coordination.

Commissioner Timmermans in TRAN Committee

On 11 May, an exchange of views was held in the European Parliament’s Committee on Transport and Tourism (TRAN) with Executive Vice-President Frans Timmermans on the future of the transport sector in the framework of the European Green Deal and in the context of economic recovery from the COVID-19 pandemic. Mr. Timmermans stated during the discussions that:

  • Serious investments are needed to maintain a strong EU transport sector, including private investments, to save jobs and successfully achieve a zero-emission society by 2050;
  • Actors in the transport sector receiving financial or state aid from Member States, should be compelled to ‘give back to society’ in return for this aid, such as increasing efforts in the field of sustainability;
  • The European Commission will conduct an impact assessment in September 2020 to further analyze raising the emission reduction goal for 2030 from 50% to 55%.

Read summary

Commissioner Vălean in ENVI Committee

The European Commissioner for Transport Adina Vălean exchanged views on 11 May with the Environment, Public Health and Food Safety (ENVI) Committee of the European Parliament on sustainable transport after the COVID-19 pandemic. The main takeaways of the discussions were:

  • The recovery phase will focus on making transport smarter and cleaner;
  • The European Green Deal objectives must be sustained, Europe must stay ambitious;
  • In the context of the debate on conditionality to receiving state aid, the Commission will introduce transparency requirements for large companies, to report how the aid helps to meet European ambitions on green and digital transitions;
  • On passenger rights, right of reimbursement is still a primary right. A voucher system could be introduced, but the passenger will always have the right to be reimbursed.

Read summary

Dr2 Consultants hosts webinar on competitiveness of transport sector post COVID-19

Main takeaways

The COVID-19 outbreak has seen an unprecedented impact on the transport sector in the EU. Due to national containment measures, travel restrictions and the closure of border crossings, passenger transport is at a standstill and trade flows are severely impacted. In order to help EU citizens and businesses, the Commission has issued several contingency measures to support the transport sector, e.g. by identifying green freight lanes, issuing guidelines on passenger rights and allowing financial relief under the temporary state aid framework.

In this context, Dr2 Consultants organized a dedicated transport webinar on 7 May 2020, focusing on the question how to reinstate the EU’s transport industry in a post COVID-19 era, in order to ensure the transport sector can enable economic growth, secure jobs, increase global competitiveness and allow people and goods to move across Europe and beyond. Mr. Daniel Mes, Member of the Cabinet of Executive Vice-President on the European Green Deal, Frans Timmermans, responsible for the transport portfolio, and Mr. Jan-Christoph Oetjen, Member of the European Parliament (Renew Europe) and Vice-Chair of the Committee for Transport and Tourism took part in the panel discussion and shared their views on the subject.

 

The main takeaways from the webinar are:

  • The Commission is working on a coordinated exit strategy in which all modes of transport are covered, including practical advice on how to restart operations while ensuring the safety of the passengers;
  • It is crucial that the transport sector returns to its old strength and becomes even more resilient. It is a joint effort by the EU and its Member States to ensure the European transport sector remains competitive on a global level;
  • Mr. Mes highlighted the need for political guidance when national measures are taken to ensure consistency in sectoral investments. The transport sector will be dependent on both public as well as private investments, which the Commission will aim to mobilize;
  • Both speakers highlighted that transport will be one of the main pillars in the green recovery of the European economy. Mr. Oetjen emphasized the need for using a mix of transport modes based on their characteristics and respective advantages. Mr. Mes stated that it is key to ensure that the recovery of the transport sector is green recovery, and conditions can be attached to financial aid received by the sector.

As the webinar was recorded, please find the playback link here.

As a next step, the Commission is expected to publish a follow-up to its ‘European roadmap towards lifting coronavirus containment measures on Wednesday 13 May, which will entail a broad package of recommendations aimed at reinstating connectivity and tourism. The package will include a Communication on tourism, protocols on health and safety for main tourism locations, guidance on safe and healthy resumption of passenger transport and guidance on lifting of international borders. The package is also expected to include an assessment of the application of the temporary restriction on non-essential travel to the EU.

COVID-19 services

The fight against the spread of COVID-19 has unprecedented consequences for the daily life of almost everyone and puts pressure on the global economy. The crisis leads to questions and uncertainty, while companies try to anticipate and mitigate the impact on their daily business operations. Dr2 Consultants offers clarity to companies during the COVID-19 crisis. Please check out our webpage to explore the possibilities for your company.