• EMISSIONS TRADING PROVES COST-EFFICIENT TO REACH CLIMATE OBJECTIVES IN ROAD TRANSPORT

    28 May 2021

    A study commissioned by the FIA European Bureau to Transport & Mobility Leuven concludes that including road transport into the European Union Emissions Trading System (EU ETS) can help the European Union reaching its climate objectives in a cost-efficient way.

    As the European Commission is about to table its “fit for 55” package, containing a proposal to reform the EU ETS, and possibly extending it to further sectors such as road transport, the study outlines the conditions to be fulfilled for emissions trading to complement the climate policy framework, while respecting fairness and inclusiveness principles.

    “Should the European Union choose to extend the emissions trading to road transport, only a complete integration into the existing EU ETS would reap the full benefit of the cap-and-trade system” said Laurianne Krid, Director General of the FIA European Bureau.

    Considering the high abatement costs in road transport, the study pinpoints the appropriateness of command-and-control policy instruments, such as vehicle CO2 emission standards and targets for sustainable low carbon fuels, as complementary tools to reaching the objective of dynamic efficiency, while spurring innovative, alternative technologies. At the same time, the study concludes that other pricing instruments, such as energy taxation, should be revised to progressively lower existing fuel taxes, so that carbon permit prices can really play their role.

    The study goes on analysing the impact of the inclusion of road transport into emissions trading. Considering the low energy demand price elasticity in road transport, the study underlines the necessity of flanking policies to compensate those low-income households that are impacted disproportionally. “The social dimension of the transition to greenhouse neutral mobility should not be neglected. It is important to get consumers onboard and leave no one behind” added Laurianne Krid.

    “An extension of the EU ETS would give a uniform, transparent, and reliable price signal to all sectors. At the same time, no additional CO2 pricing elements should be included in any other policies, to avoid distorting this price signal” concluded Laurianne Krid.

    VISIT THE STUDY PAGE

    Notes to editors

    The objective of the expert study commissioned by the FIA European Bureau has been to analyse the conditions and the impact of the potential inclusion of road transport into the EU ETS.

    Having described the European climate context and the role of road transport, the study carried out by Transport & Mobility Leuven describes the functioning of the EU ETS and provides an overview of the most important existing policy instruments addressing CO2 emissions in road transport. It reviews the options to set up emissions trading and the interactions with the existing policy instruments.

    After analysing the impact of the most relevant policy options on CO2 emissions, abatement costs and on the incentives for technological innovation, the study analyses the economic and social impact on road transport users, fuel suppliers, the other EU ETS sectors and governments.

    The FIA European Bureau is a consumer body representing 67 Motoring and Touring Clubs and their 36 million members from across Europe. The FIA European Bureau represents the interests of its members as motorists, riders, pedestrians and passengers. The FIA European Bureau is working to ensure safe, affordable, clean and efficient mobility for all. Learn more at www.fiaregion1.com

    Contact
    Olivier Lenz
    Programmes Director, FIA European Bureau
    olenz@fia.com
    +32 2 282 08 25