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Fit for 55 package: carbon pricing in the transport sector

The European Green Deal aspires to reduce the transport sector’s dependence on fossil fuels. In that context, the Commission presented the ‘Fit for 55 Package’ on 14 July 2021. This legislative package aligns the EU’s legislation with the 55% emission reduction target to be achieved by 2030. In order for the transport industry to play its part, the EU is increasing its efforts to put a price on CO2 emissions. Dr2 Consultants will demystify the Commission’s greening efforts within the ‘Fit for 55 Package’ through three illustrative examples of increased carbon pricing across different transport modalities.

1. Eurovignette and CO2 emission standards to decarbonize road transport

The use of road infrastructure by heavy-duty vehicles is regulated through the Eurovignette Directive. The revision of this file, first tabled in 2017 by the Commission, has entered the final stages of the decision-making procedure, and is not part of the Fit for 55 Package. The co-legislators reached in June an agreement on the revision. According to the agreement, time-based road charges will be phased out for heavy-duty vehicles on the core TEN-T network (main routes where most international transit of commercial vehicles takes place). Additionally, the revision grants Member States the possibility to set up combined charging system for heavy-duty vehicles, based on both time-based and distanced-based elements, in order to allow full implementation of the user-pays and polluter-pays principles.

The decarbonization of heavy-duty road transport will also be further incentivized by the introduction of a new system of varying road charges based on CO2 emissions.

With regards to passenger cars and light-duty vehicles, which are responsible for 75% of EU road transport CO2 emissions, the EU tabled as part of the Fit for 55 package the revision of the Regulation setting CO2 emission performance standards for cars and vans. The CO2 reduction target for cars, currently set at 15% for 2025 and 37,5% for 2030 compared to 2021 levels, have been raised in order to ensure that all cars registered as of 2035 will be zero-emission. The new targets require average emissions of new cars to come down by 55% from 2030 and 100% from 2035, compared to 2021 levels. This implies that the European Commission sees no future for the internal combustion engine in the future of the European transport sector.

Considering both aforementioned proposals, Dr2 Consultants expects that the various Fit for 55 carbon pricing measures in the road transport sector will stimulate the market demand for zero- and low emission vehicles, both for passenger as well as freight transport.

2. Extending the EU ETS to the maritime sector

The EU Emissions Trading System (EU ETS), the EU’s instrument to measure and price carbon emissions per unit, is also being revised as part of the Fit for 55 Package. The revised proposal does not only increase its ambition to reduce the number of EU-wide annual allowances at a quicker pace (which will significantly drive up the price for CO2 per ton by cutting supply of emissions permits), but it also extends its scope towards other sectors, including emissions from maritime transport. As a reasoning behind the inclusion of maritime transport in the EU ETS, the European Commission states that maritime transport emissions are currently higher than in 1990 and these are expected to grow further in a business-as-usual scenario. 

Fit for 55 services

The extension of the EU ETS to maritime transport applies in respect of emissions from incoming voyages (i.e. emissions from ships arriving at an EU port from a port outside the EU, as well as intra-EU voyages) and emissions occurring at berth in an EU port. The revision plans for the obligation to surrender allowances is to be gradually phased-in over the period between 2023 to 2025.

Investments to support the decarbonization of the maritime transport sector will be supported by the Innovation Fund.

The inclusion of maritime emissions in the scope of the EU ETS, and especially the determination of which emissions are covered (intra-EU voyages, emissions at berth in EU ports, as well as ships arriving at an EU port with their last port of call being outside the EU) risk impacting the competitiveness of the EU maritime transport at global level.

3. Revising energy taxation: end fossil fuel subsidies and incentivize green alternatives

The Energy Taxation Directive (ETD) sets the rules for the taxation of energy products such as motor fuels or electricity. The Commission also proposed a revision as part of the Fit for 55 Package in order to align the taxation of energy products with EU energy and climate policies and end outdated tax exemptions and incentives for the use of fossil fuels, for example the exemption for fuels in the aviation and maritime transport sectors.

Ending tax exemptions for aviation kerosene would result in higher tax burdens, thereby incentivizing the transition towards a higher uptake of sustainable aviation fuels. The revision of the ETD is welcomed by the railway sector, as ending tax exemptions for polluting fuels would accelerate the modal shift, level the playing field between the different modes of transport, and encourage consumers to choose clean alternatives such as rail transport.

Is your business Fit for 55?

The Fit for 55 Package will shape the legislative landscape for the upcoming decade, trigger the public debate and impact businesses across the different transport modalities. The revised and updated CO2 emission standards might radically impact your day-to-day business operations. More than ever, making your voice heard is crucial.

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. Would you like to know more about what the ‘Fit for 55 Package’ means for your organization? Feel free to reach out to us or visit our Fit for 55 webpage.

You can also sign up for our weekly Fit for 55 policy updates here.

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

Slovenian Presidency of the EU 2021 logo

Slovenian Presidency’s transport priorities

Starting on 1 July, Slovenia will take over the rotating Presidency of the Council of the EU for the next six months. The slogan of the Slovenian Presidency, “Together. Resilient. Europe.”, refers to the recovery of the European economy following the COVID-19 pandemic. With the transport industry being one of the hardest hit sectors by the COVID-19 pandemic, the Slovenian Presidency will play an important role in shaping a resilient and future-proof transport sector. In this blog post, Dr2 Consultants has identified three key transport priorities of the Slovenian Presidency for the coming semester.

Moreover, in the coming months, the Slovenian Presidency will lead crucial files through the institutional negotiations and will be closely involved in the discussions of the Commission’s legislative proposals that are part of theFit for 55’ package.

In the run up to Slovenia’s six-month Presidency, Dr2 Consultants’ transport practice organized a webinar together with Ms. Petra Zaletel, Transport Counsellor at the Permanent Representation of the Republic of Slovenia to the EU, to hear more about the Presidency’s transport priorities in the coming semester. You can watch the recording of the event here.

Coordinating legislative files stemming from the ‘Fit for 55’ package

On 14 July, the European Commission will publish the Fit for 55’ legislative package, which  will aim at aligning the EU’s climate and energy legislative framework with the European Green Deal’s target of at least 55% emissions reduction by 2030. This landmark package, covering 11 legislative proposals, is expected to set the prerequisites for the transition towards a 55% emissions reduction by 2030.

The ‘Fit for 55’ package will have both direct and indirect impact on the transport industry, for example:

  • The revision of the Energy Taxation Directive will put a higher tax rate on fossil fuels to accelerate the production and use of low-carbon and clean alternatives.
  • The revision of the Alternative Fuels Infrastructure Directive will set binding targets for the deployment of re-charging and re-fueling infrastructure across the EU.
  • The upgrade of the Renewable Energy Directive will increase the sub-target for the renewable energy share in the transport sector.

As part of its transport priorities, the Slovenian Presidency will be tasked to lead the discussions on these legislative files through the different Council configurations. A milestone event will be a joint informal ministerial meeting of transport and energy ministers on 21-23 September dedicated to common challenges of e-mobility. In a separate meeting, the transport ministers will look into issues related to alternative fuels infrastructure.

The Slovenian Presidency will have to find a balance between diverging interests among EU Member States. During the last European Council meeting on 24-25 May, Eastern EU Member States already voiced their concerns about Europe’s poorest inhabitants having to carry the burden of the EU’s climate ambitions. We expect these discussions to continue in the various Council configurations. The results of these discussions and any adopted conclusions under the leadership of the Slovenian Presidency will also be relevant in the run up to the UN Climate Change Conference (COP26) in November.

Fit for 55 services

Dr2 Consultants supportS organizations in the transition towards climate neutrality by offering tailor-made solutions to navigate the evolving policy environment at EU level and anticipate the impact of the ‘Fit for 55’ package on your organization. Make sure to check out our ‘Fit for 55’ services.

Putting rail transport in the limelight

The European Commission declared 2021 the European Year of Rail. Although the Portuguese Presidency has officially launched the Year of Rail during the informal Transport Council meeting in late March, the promotional activities have seen a slow start due to the extended travel restrictions. But now that the COVID-19 situation is rapidly improving and travelling across Europe will be possible again in the coming months, the Slovenians will have more opportunities to promote rail as a sustainable mode of transport and further build upon the recently adopted Council conclusions on “Putting rail at the forefront of smart and sustainable mobility”.

As of September, the Connecting Europe Express will visit almost all Member States across Europe, with festivities and stakeholder events on several locations, including Brussels, Ljubljana and Berlin. In addition, in November this year, the European Commission is expected to table a package of legislative and non-legislative initiatives (e.g. revision of the TEN-T Regulation, revision of the Intelligent Transport Systems Directive, Action Plan to boost rail passenger transport) that will impact several components of the railway industry, including infrastructure, ticketing tools, and cross-border passenger services.

These legislative files are expected to dominate the policy discussions in the coming years. Would you like to better understand how these files will impact your business operations? Do not hesitate to get in touch with our Transport Team.

Concluding negotiations on inherited files

In addition to dealing with new legislative proposals, the Slovenian Presidency will also inherent files from the Portuguese Presidency. Although the Portuguese Presidency has been successful in concluding various pieces of legislation relevant for the transport sector, including the controversial new EU-wide road charging rules for light and heavy-duty vehicles (Eurovignette) and the Brexit Adjustment Reserve, several issues still require further discussions.

Regarding transport priorities of the Slovenian Presidency, we expect the Slovenians to start Trilogue negotiations on the Hired Vehicles Directive as well as the Single European Sky (SES2+) initiative with the aim to achieve a breakthrough on both files by December 2021 at the latest.

How can Dr2 Consultants’ transport practice support you?

Do you need support in understanding and anticipating upcoming transport files? Do not hesitate to get in touch with us. Dr2 Consultants has built up a track record in advising a broad range of transport clients in navigating the EU ecosystem.

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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Dr2 Consultants’ Breakfast Meetings: Key Takeaways

Cities have an important role to play in the reduction of greenhouse gas emissions and in reaching the goals of the European Green Deal. In its Sustainable and Smart Mobility Strategy, the European Commission calls on cities to be at the forefront of the transition towards more sustainability, and it sets itself the goal of achieving 100 European climate-neutral cities by 2030. In this context, Dr2 Consultants organized a series of 30-minute breakfast meetings on sustainable and smart mobility in European cities. During these sessions, Dr2 Consultants has been engaged in lively one-on-ones with several European and business stakeholders to discuss topical subjects in EU urban mobility, especially focusing on the challenges that cities need to overcome to become climate neutral and stimulate automated and shared mobility.

General takeaways

The COVID-19 pandemic has been a major challenge for everyone, and will likely impact the way people live, and in turn mobility trends. During lockdowns, people have witnessed less congested and less polluted cities, and will want the benefits to remain in the post-COVID period as well. On the other hand, many urban inhabitants have felt smothered in cities during lockdown and are now looking to move away, especially with the increase of teleworking allowing them to live further away from work. This also has the potential to impact mobility trends.

Zuzana Pucikova – Head of EU Public Affairs at Uber

On the industry side, there is a role to play in offering solutions for smarter and more sustainable mobility in cities, and especially in offering alternatives to single-occupancy vehicles. In this sense, the European Commission’s approach in the European Sustainable and Smart Mobility Strategy recognizing ride-hailing as key, safe and sustainable mobility solutions as well as clarifying legal status of ride-hailing platforms offers the right framework for the development of ride-sharing companies, such as Uber.

The work of transit agencies has been especially important, shifting from a role of transport provider to mobility manager. The pandemic is an opportunity to integrate and complement transit networks with services such as Uber, with authorities now taking a holistic approach to making transport more accessible, equitable and efficient. This enables them to be much more ‘nimble’, and address the challenges of today and tomorrow;

Given the urgent need to reduce transport emissions and to drive green recovery, Uber committed to becoming climate neutral by 2030 across the US, Europe and Canada, and by 2040 for the rest of the world. Across seven key European cities it aims to become 50% electric already by 2025. However, in order for transport to become more sustainable, we need to reduce the reliance of households on private cars.

Tom Berendsen – Member of European Parliament for CDA/EPP

In order to boost the uptake of smart and sustainable mobility solutions within cities, the EU should provide the right set of regulations and a framework for businesses, establishing product standards. The EU level is also where best practices should be shared.

The most efficient way to stimulate sustainable and smart mobility within cities is to adopt a bottom-up approach, focusing on city planning. Indeed, cities are best placed to know the needs of their inhabitants. Therefore, when preparing regulations, the EU should listen to cities’ experiences and ideas. Moreover, traditional modes of transport will need to cohabit with new “smart” systems of mobility. To ensure a smooth cohabitation, there is a need for test areas that can only be implemented within cities, to learn from the problems raised there and take the appropriate measures at European level.

To ensure the mass uptake of more sustainable mobility by citizens, for example of electric vehicles, it is necessary to provide affordable and easily accessible infrastructures (e.g. sufficient charging points). The development of such infrastructures are projects of common European interest, as we need to ensure that the knowledge and skills needed exist within the EU, and that we are not dependent of foreign actors.

Isabelle Vandoorne – Deputy Head of Unit B.3 at DG MOVE

The European Sustainable and Smart Mobility Strategy has the double objective of contributing to the objectives of the European Green Deal through the greening of the transport sector, and of digitalizing mobility. The Strategy adopts a holistic approach, considering not only urban mobility but also peri-urban and rural areas and how to connect them. Especially considering the impact of the COVID-19 pandemic on the future of work, which will see telework more widely accepted, and office areas maybe displaced from inner cities to peripheries. In order to improve commuting, proper infrastructures are needed, including functioning multimodal hubs.

In ten years’ time, cities will be more livable. The decrease in number of cars and traffic will leave more space for inhabitants and for other modes of transport.

Regarding the uptake of Mobility-as-a-Service (MaaS), the Commission will organize a forum, in a format similar to the Digital Transport and Logistic Forum (DTLF), to bring all stakeholders to the table.

As mentioned in previous meetings, urban planning is at the core of sustainable and smart mobility. That is why the Commission is in the process of revising its 2013 Urban Mobility Package, to enhance its scope. The Urban Mobility Package includes guidelines from experts on the overall development of urban plans for mobility, as well topical guidelines of relevant arising topics, such as MaaS.

One of the key aspects to boost the digitalization of the transport sector is the creation of a European Mobility Data Space, whose components are described in the European Data Strategy. In order to deliver in time (2021-2022) on its commitments, DG MOVE has reorganized its internal digital task force to coordinate with all units within the DG, in order to adopt a common approach. Moreover, a special expert group has been created to reflect on the EU Mobility Data Space, which has the particularity of covering a variety of sub-mobility data spaces for all the different modes of transport. DG MOVE, in collaboration with DG CNECT, will elaborate interfaces to make these bubbles interact with each other.

Finally, the Commission, and especially Thierry Breton, Commissioner for Internal Market, have always had the ambition to ensure that the skills and jobs needed to develop technologies exist within the EU, so that the bloc is not dependent on external actors. This is always taken into consideration by the Commission when proposing legislation. The Commission relies on the excellence of EU industries, notably through partnership programmes, such as Horizon Europe.

Daan van der Tas – Project Leader for Mobility-as-a-Service and Shared Mobility, City of Amsterdam

  • Amsterdam, who is evolving like an international city, is witnessing an important increase of activity in its narrow streets, with an ever-growing supply of different modes of transport. Rethinking mobility systems is relevant not only in terms of clean air but also considering the impact of mobility on public spaces. The main goal of the city of Amsterdam is to reclaim public spaces from cars and alleviate pressure on roadways, for example by expanding the use of its waterways, which are currently mostly used for leisure.
  • With regards to micromobility, Amsterdam is being very cautious, considering that when e-mobility solutions first appeared a few years ago, the city was completely overrun by e-bikes flooding the streets. Amsterdam has now re-introduced e-scooters and is slowly reintroducing e-bikes. In Amsterdam, this needs a special adaptation since most people already own a bike, if not several.
  • In cities of the future, there will be much less room for cars, private or shared, whether for circulation or parking, as we will see an increase of micromobility solutions. Transport systems will also be increasingly digitalized. Additionally, all mobility within Amsterdam will be CO2-neutral by 2030.

  • Shared mobility services raise several challenges, but they can be easily resolved. For example, Amsterdam is working on resolving the conflict between taxis and private ride-hailing platforms such as Uber by developing virtual queuing solutions. Additionally, although micromobility solutions raise certain criticism (safety issues, being discarded anywhere in the streets and taking up space on sidewalks), their advantages outweigh the disadvantages if they can prevent polluting cars or motorbikes being purchased and used.
  • As the mobility system will be increasingly digitalized, data-sharing will become increasingly important. Data will also be needed to understand how mobility systems are running. A mutual understanding will need to be found with industry partners to encourage them to share their data. If an understanding can’t be found, cities will have to rely on legislation, including legislation passed at EU level.
  • Amsterdam is at the forefront of developing Mobility-as-a-Service (MaaS), and has started several pilot projects in the city, notably the MaaS Amsterdam Zuidas, which allows people to reach Amsterdam’s large financial and business district south of the city with MaaS solutions. The city is also investigating a country-wide permit for ride-sharing companies so they can offer rides across cities.

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. Would you like to know more about how your organization can make the most out of the upcoming regulations included in the European Sustainable and Smart Mobility Strategy? Feel free to reach out and discuss opportunities over a (virtual) coffee.

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Smart mobility within cities: benefits and challenges

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

Key takeaways of the first Dr2 Consultant’s Breakfast Meeting with Uber

Smart mobility within cities: benefits and challenges

Cities have an important role to play in the reduction of greenhouse gas emissions and in reaching the goals of the European Green Deal, since cities are responsible for about 72% of all greenhouse gas emissions, a considerable part of which comes from urban transport. In its Sustainable and Smart Mobility Strategy, the European Commission calls on cities to be at the forefront of the transition towards more sustainability, and it sets the goal of achieving 100 European climate-neutral cities by 2030, with a big role for innovative digital solutions. Dr2 Consultants will take you through the key trends and challenges in the transition to smart and sustainable mobility in European cities.

Why does smart mobility in cities matter?

The idea behind the concept of smart mobility is to limit the use, or replace altogether, privately owned gas-powered vehicles by providing easily accessible, cheap, and sustainable alternatives, as well as using technology and digitalization, specifically Intelligent Transportation Systems (ITS), to collect, process and spread information in order to manage mobility more efficiently. The main objectives of smart mobility are to reduce traffic congestion and air and noise pollution, increase safety, improve transfer speed, and reduce transfer costs between different modes of transportation. Smart solutions for mobility are also recognized as essential to further decarbonize the transport sector and reach the ambitious emission reduction goals the EU institutions have set.

In practice, cities have a variety of options to implement smart mobility with solutions fitting for their residents. The concept of smart mobility promotes a wide range of alternative modes of transportation, from privately owned or shared bicycles to electric scooters, buses, metros, taxis, car-sharing, and ridesharing. For example, the city of Paris has bet on the development of a widespread bike-sharing system, with 15,000 electric or regular bicycles available to users all throughout the city.

Dr2 Consultants recognizes that digitization and especially data management are a big part of smart mobility, allowing to smoothen traffic as well as offering integrated solutions to users. For example, some cities collect data to provide real-time information allowing travelers to adapt their route to avoid congested areas. Other examples include connected traffic lights adjusting their timing to respond to real-time traffic or connected cars able to identify and direct the driver to the nearest available parking spot.

Heightened ambition

The European Commission’s recently published Strategy for Sustainable and Smart Mobility proposes several measures to make the transition to carbon-neutral smart cities a reality. The Strategy recognizes the need for clearer guidance in mobility management and urban planning, to adapt the shifts in transportation habits as well as provide the most adequate sustainable mobility options. In it, the European Commission identifies several concepts which can be added to cities’ policy toolboxes to decarbonize urban mobility in a smart way.

The strategy encourages the development of Mobility as a Service (MaaS) as an alternative to the use of private cars. Dr2 Consultants has identified MaaS as a very important area in the field of digitization of mobility, as it integrates different forms of transport into a unique digital service, easily accessible on-demand. It provides, within a single application and through a single payment channel, access to various forms of transport such as public transport, ride- or bike-sharing, and car rental. The city of Helsinki has for example made available to its inhabitants the Whim app, which allows to plan a trip and pay for all modes of public and private transportation existing within the city, from train to bus, to carshare and bikeshare.

Additionally, the Commission notes the increased use of shared and collaborative mobility services as alternative to private cars or packed public transport, such as shared cars, shared bikes, or ride-hailing, through intermediary platforms like Uber or Lime. Shared mobility and micro mobility devices currently remain highly unregulated and raise important safety issues.  To ensure the safety of such services and the level playing field between intermediaries, the Commission will put forward measures on on-demand passenger transport and ride-hailing platforms. Moreover, the Commission will issue guidelines to support the safe use of micro mobility devices such as e-bikes, scooters, or e-skateboards.

Finally, the growth of the e-commerce sector, even more so due to COVID-19, has seen an increase in deliveries. This raises the needs for multimodal logistics solutions, to avoid unnecessary delivery runs and congestion. According to the Commission, cities’ urban plans should accelerate the deployment of zero-emission solutions, such as cargo bikes or automated deliveries through drones. For cities crossed by rivers and other waterways, those should be used to relieve traffic congestion pressure from streets and roads. In Amsterdam, for example, the municipality uses electric boats to transport goods across the city, using the city’s wide network of canals. Delivery service provider DHL also uses the canals to facilitate deliveries, thanks to floating distribution centers.

Challenges in implementing smart mobility solutions within cities

Even though the advantages of the rollout of smart and sustainable mobility in cities are clear, there are still several challenges that need to be overcome to make the most out of the transformation of the mobility system.

Users

However, Dr2 Consultants recognizes that the biggest obstacle to the introduction of smart mobility solutions remains the users themselves. Complaints when municipalities decide to reduce speed limits or turn streets into pedestrian areas, are frequent. Especially when the implementation of smart mobility strategies requires significant changes to cities’ infrastructure, from bike lanes to electric charging points, which ask for heavy investments and public work, inhabitants seem less acceptant.

Security and Privacy

Smart mobility resting mostly on collection and use of data to feed Intelligent Transport Systems, raise the usual concern for security and privacy. Therefore, properly securing such systems is extremely important to avoid data breaches or misuse of data collected. Ensuring their security also contributes to increasing citizens’ trust in data-sharing, ensuring a widespread collection of data necessary to have the most up-to-date and relevant information, and in turn provide the most precise service.

Deployment of 5G networks

Additionally, the increased automation needed for smart mobility solutions relies on the widespread deployment of wireless mobile telecommunication systems, and especially newly introduced 5G systems, capable of supporting extremely high level of interconnections and uninterrupted data exchanges. The deployment of 5G networks is not equal within territories, and said networks also need to be properly secured. The Commission aims to tackle these challenges in its 5G Action Plan (published last year).

Accessibility

Increased digitalization of mobility also needs to consider accessibility, keeping user demand in mind when designing new urban plans and innovations, for elderly and disabled people. Not everyone knows, can or has the devices needed to use an app to plan their trip or book multimodal tickets. If accessibility is not at the core of urban planning, the solutions and innovations proposed risk not being widely deployed, limiting the potential benefits.

Dr2 Consultants’ Breakfast Meetings

Between 3 February and 17 March 2021, Dr2 Consultants organized a series of Breakfast Meetings on sustainable and smart mobility. During these lively one-on-ones several European and business stakeholders shared their vision on EU urban mobility challenges. Our guest speakers included Zuzana Púčiková (Head of EU Public Policy at Uber), MEP Tom Berendsen (NL, EPP; member of the EP’s Regional Development Committee and substitute in the Transport Committee), Isabelle Vandoorne (Deputy Head of Unit DG MOVE B.4 on Sustainable and Intelligent Transport) and Daan van der Tas (Lead Mobility as a Service & Shared Mobility at the Municipality of Amsterdam). You can read the main takeaways from our Breakfast Meetings here.

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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).

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.