Kevin Leydon, Head of Unit for Clean Transport, European Commission
Presentation at: managEnergy European Conference on Local Energy Action: The Annual Event of Energy Management Agents in Europe 28-29 November 2002, Brussels, Belgium
Paper
It is a great pleasure for me to have the opportunity to make this presentation to you on EU initiatives on energy and transport or perhaps more precisely transport use of energy. It is of course interesting in itself to look at developments at the intersection of these two policy areas, but I also have an underlying motive. The Commission is keen to make greater use of local agencies to promote good transport practice at local level. To do this requires a sophisticated approach, and I intend to talk a little about the challenges that exist as well as to talk a bit about some evidence of solutions to the challenges.
Energy and Transport are heavily interdependent. Much of our energy resources must be transported to where it is needed, and our means of transport are themselves heavily dependent on energy sources. Of course some transport is human powered - walking and cycling - but the remainder is 98% dependent on oil. The scale of demand is also significant: EU transport activity accounts for 2/3 of EU total final energy consumption. This shows that transport is a large business, but that doesn't necessarily mean that it is bad. All that traffic has a purpose, whether it is moving raw materials, finished goods, people to work or leisure travel.
Unproductive energy use is a different issue. We have all seen office blocks with lights on at night, sat under outdoor heaters burning gas that effectively heats air that then blows away, and sat in our car with the engine running but unable to move because of congestion. Reducing these types of wasteful energy use must be desirable.
Had the Commission's proposed carbon tax been accepted by the other EU institutions, non-productive uses of fossil fuels would have been less attractive and in al probablilty would have reduced. The proposal was not accepted and we continue the search for ways to ensure that valuable fossil fuels are not squandered and to ensure more sustainable development of our economy.
Those of us with reasonably long memories will recall the oil price shocks of the 1970s. In the first, crude oil doubled in price over night and the second at the end of the decade saw another significant rise in price. The price rises had significant effects on the European economy and at the time there was great concern about future supplies and the need to improve the efficiency of energy use.
Now twenty to thirty years later one can wonder whether anything changed as a result. At the same time we can have a sense of deja vu as we are now confronted by climate change and again discuss the need for improving the efficiency of use as well as talking about the need for diversifying sources of energy supply. Transport is now responsible for some 28% of EU CO2 emissions and is therefore is an important element to consider in addressing climate change. However, there may well be cheaper and easier ways of reducing energy consumption and reducing CO2 emissions than in the transport sector. The report of the European Climate Change programme foresees some 4% reduction beyond baseline projection for 2010 being cost effective in the transport sector, as against 13% for example in the energy sector which is in any case twice as large a consumer as the transport sector.
In any case what has happened since the 1970s? The average annual growth rate for both passenger and freight transport has been just under 3% between 1970 and 1998. Overall energy consumption in transport has increased, even in the last 20 years by some 50%, as has the energy intensity of transport as traffic has shifted to more energy intense modes. The share of energy efficient transport modes such as rail, bus and inland navigation is lower than it was in the 1970s, although there has been some stabilisation in share.
One might conclude that for all the well meaning talk, little has changed or improved. However there has been a considerable gain in efficiency of internal combustion engines. New car fuel use per unit weight has improved by about 25% over the last 20 years. Similarly aviation has seen substantial gains in fuel efficiency.
However set against this is a clear behavioural problem. As energy efficiency of transport increases, it becomes cheaper. That has also translated in many cases into higher performance. The result of these factors is that people and goods are able to travel further for comparable cost. Average distances travelled have increased as a result and people now travel on average twice as far per year as they did in 1970.
While mobility is desirable to enable the functioning of society, it also undoubtedly has other undesirable features: 40,000 deaths a year in the EU virtually all of them on the roads, as well as 3.5 million serious injuries, pollutant emissions that are bad for health and the environment, noise, and barrier effects from busy roads and so on. All of these are reasons why it is possible to imagine better transport solutions in addition to the energy aspects.
If there are better solutions then why don't people make these decisions themselves? This is in most cases a clear example of market failure. Perhaps there is a regular bus service that is cheap and environemntally friendly. However, if an individual drives his car to carry out the same journey he can arrive quicker at the destination. Others see theexample and after aspiring to have the same benefit also start to drive. The bus service will become less frequent as passenger numbers decrease. Eventually only those too poor to buy a car are left using the very infrequent service. All those who have taken to their cars are however stuck in congestion. They have acted in the way that appeared to be best for each of them individually. The result is far worse for everybody overall. This illustration is of course simplistic, and reality is far more complex. Collective transport is less well able to serve less densely populated areas. Private forms of transport offer greater flexibility.
To achieve a societally optimal transport outcome it is necessary to ensure that the signals received by transport users are appropriate.
Transport is a highly complex field, and also one that is far from homogenous. Tackling the energy consumption of transport must therefore be approached in a sophisticated manner and is likely to require the use of a number of tools to achieve desirable results.
In many cases, a large part of the ability to influence transport behaviour rests at local level. There are numerous tools: access controls, bus or high occupancy vehicle lanes, parking controls and charges, pedestrian zones. cycle lanes and facilities, road user charges, encouraging use of cleaner vehicles and so the list goes on. It is clearly not appropriate for most of these to be demanded at a a European level. Nevertheless it is important to share experiences of the implementation of these types of ideas. In different parts of the EU authorities have attempted to tackle problems and had different degrees of success. There is a wealth of experience and as well as funding some of the experiments, the Commission has also encouraged the sharing of this information.
A good example of this is ELTIS the European Local Transport Information Service, which is a web based service providing support and information to practitioners.
CIVITAS is another example where the Commission has sought to fund large integrated demonstrations which seek to make a step change in transport patterns and where it will be possible to assess the impact of a range of measures on overall transport in the participating cities.
The EU does of course continue funding research into more technical issues such as the CUTE project trialling fuel cell busses in 9 European cities.
Other measures include voluntary agreements, such as those reached between the EU and car manufacturers on energy efficiency. Enhanced environmentally friendly vehicles are also being investigated by a specific group within the Commission.
Legislation does of course also have a role, and the Commission has proposed various measures to address some of the issues that I have mentioned. Our proposal on Public Passenger Services remains under discussion. This aims to encourage the utilisation of means that have been identified as leading to more attractive and cost effective public passenger transport while assuring a proper internal market in these services. In our White Paper we stated that we intended to propsoe the gradual opening of the market for international passenger rail services which should also lead to improved and innovative services that will be attractive to customers. Last year of course the directive on labelling of new car fuel consumption came into force. Recently the Commission adopted a communication setting out its views on the taxation of passenger cars in the EU in which it discussed this as a tool for CO2 emission reduction and suggested possible Community legislation in this field.
We have also published a Communication on Alternative Fuels for road transportation together with a set of measures to promote the use of these fuels. Our objective is a 20% share for alternative fuels in this sector by 2020. One part of this action is a Contact Group with industry and other stakeholders to assess the various alternative fuel technology options. Another action was our proposal, now under discussion, for a Directive on the promotion of Biofuels for transport coupled with one to apply a reduced rate of excise duty to biofuels.
Next year the Commission intends to produce a Communication on the promotion of energy efficient and clean vehicles by public authorities as well as a proposal for a Directive on public procurement of these vehicles. The Communication will consider the need for EU level action to promote demand for these type of vehicles. There is a strong case for action at EU level since this can create the necessary critical mass for manufacturers to respond to and provides them with confidence that the market will be long term. In drafting the Directive we will consider a number of issues. Two key ones will be:
Recognition of this need to ensure that there are suitable options available brings me to the final instrument that I want to talk about, which is STEER. This forms part of the Intelligent Energy for Europe programme. The programme is still under discussion but should come into being in 2003 and run for 4 years. STEER is the part of it dedicated to transport. STEER will fund actions that address the energy aspects of transport. The underlying objectives of the programme are to increase diversity of energy supply and lead to a more rational use of energy. The second of these objectives fits as I have illustrated within a much larger web of issues and challenges.
STEER has three action areas. The first of these concerns the promotion of alternative fuelled vehicles. This will focus on Biofuels and Natural Gas. The Commission has proposed a target of 20% substitution of oil by alternative fuels in the transport sector by 2020 and this action will seek to identify and overcome barriers as well as encourage the spread of good practice to enable progress toward that goal.
The second action addresses the efficient use of energy in transport. This will cover a wide range of activities from managing demand for transport through promoting efficiency within transport modes to encouraging transfer to more efficient transport modes. Coupled with these will be activities related to the use of economic instruments and incentives as well as for awareness and dissemination of good practices.
The third action, which is of key interest to you, is focussed on measures to facilitate the involvement of local agencies to address energy issues in the transport field. Part of this envisages the provision of training to those agencies that are keen to develop skills in this area, while another part envisages facilitation of work in this area. For example through networking. Agencies can play a key role in providing information and encouraging changes in habits and attitudes. We know that there is a lot that can be done to make our transport more sustainable, and at the same time our society more pleasant, and it is local agencies that can really communicate this information and experience to more people at local level.
Conclusions
The use of energy in transport is both an important part of total energy consumption, but also an area where there is likely to be a growing focus in future, especially as current predictions foresee this area of energy use increasing in importance in the future.
There is clearly a role to be played by well informed local agencies to guide authorities, companies and individuals towards more intelligent transport choices that are good for society and good for the environment. There is no shortage of possible avenues to explore, and they do not need to imply rigid structures imposed on people but rather a range of options with the incentives for individuals and companies to select those that are best for society as a whole.
Nevertheless we cannot underestimate the nature of the challenges to be addressed. Those of you that choose to take up the challenge will benefit from an enormously interesting and lasting work.
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