UK TRANSPORT AND BREXIT NEWS & VIEWS NO. 153

Mark’s EU Week for Transport 
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WattsUp! 

Last month we witnessed the publication in both Brussels and London of policy and legislative proposals will shape transport for the years and decades to come. 

In Brussels, the European Commission adopted legislative proposals that will help the EU reduce net greenhouse gas emissions by at least 55% by 2030, the Fit for 55 Package. Achieving these emission reductions in the next decade is crucial to Europe becoming the world’s first climate-neutral continent by 2050 and making the European Green Deal a reality. 

In addition to measures like extending the scope of the EU ETS, and revising the Energy Taxation Directive, there are three transport-specific initiatives – ReFuel Aviation, FuelEU Maritime and the Alternative Fuels Infrastructure Regulation which will support the transport sector’s transition into a future-proof system.  They will help create a market for sustainable alternative fuels and low-carbon technologies, while putting in place the right infrastructure to ensure the broad uptake of zero-emission vehicles and vessels. This package is also seen as a chance to make the EU a lead-market for cutting-edge green transport technologies.

The Commission also has a big budget to help deliver their ambition, including the COVID-recovery fund, NextGeneration EU. They also launched funding for studies via the Connecting Europe Facility (CEF). They are a starting point for many projects that will help accelerate the transition to a smart and sustainable transport network. Looking ahead, they are going to release new funds worth €30 billion for transport, digital and energy projects for 2021-2027, via the CEF.  Over half of the projects will help create a stronger European railway network, whilst other priorities include financing the installation of on-shore power supply in ports to cut emissions from docked ships. 

Meanwhile, in London the UK Government has unveiled its much-anticipated Transport Decarbonisation Plan, the first in the world. It is designed to align all modes of domestic transport with the national net-zero target.  This follows on from the Government’s decision to bring the ban on new petrol and diesel cars and vans forward from 2035 to 2030.

With less than 100 days to COP26 it’s vital that transport is high on the global agenda. UKTiE, in partnership with the UK Mission to the EU will be hosting a pre-COP26 roundtable on Friday 24 September, to exchange best practice, including the UK’s TDP and the EU’s Fit for 55 Package, and discuss how we can work together to ensure our collective goals can be realised in Glasgow, and then delivered on the ground. If you are interested in attending, please RSVP here.

This will be our last News & Views for a couple of weeks, we will be back at the end of August!

1. Maritime – Shipping to join ETS and big push for alternative fuels
The European Commission has proposed, in its headline maritime initiatives FuelEU Maritime and expanding the ETS to include shipping, a maximum limit on the greenhouse gas intensity of energy used on-board and certain obligations to use on-shore power supply or zero-emission technology and has proposed that shipping would join the Emissions Trading System (ETS) from 2023, forcing ship owners to buy ETS permits based on their level of pollution.

Under a proposed revision of the Energy Taxation Directive, Fuel supplied for use in shipping is currently exempt from taxation under the ETD. The proposal set forth on 14 July 2021 introduces a minimum tax rate on the relevant fuels used for intra-EU ferry, fishing and freight vessels. Sustainable and alternative fuels will be subject to a minimum zero tax rate for a transitional period of 10 years when used for waterborne navigation.

2. Aviation – EU pushes for kerosene taxation
The ‘Fit for 55’  package  is likely to have long-term consequences for the aviation sector. The package includes proposals for introducing an incremental blending mandate for sustainable aviation fuels and tightening of EU Emissions Trading System (EU ETS) provisions for intra-European flights. However, in a revision of the Energy Taxation Directive, the European Commission proposes to remove the tax exemption on aviation fuel could have a major impact on the sector. The Commission is proposing a kerosene tax based on energy content be introduced linearly over a transitional period of 10 years from 2023, corresponding to minimum tax rates applicable to road transport fuels.

3. Funding the shift to green and sustainable transport
The Fit for 55 package has set the EU on the regulatory path for the transport sector to get to a greener and more sustainable future. However, there is a significant need for funding in order to lay the road towards that future. The EU believes that CEF, Connecting Europe Facility, can be the vehicle for this. The day after the Fit for 55 package was published, the European Commission announced an additional €242 million for transport infrastructure studies looking into delivering a transport network that is environmentally performant, safe for its users and driven by smart solutions. Announcing the new funding, Transport Commissioner Adina Vălean, said: “This week we adopted important legislative proposals that will help the EU reduce net greenhouse gas emissions by at least 55% by 2030. The studies that we are supporting today via the Connecting Europe Facility contribute to the same aim. They are a starting point for many projects that will help accelerate the transition to a smart and sustainable transport network. Looking ahead, we are going to release new funds worth €30 billion for transport, digital and energy projects for 2021-2027, via the Connecting Europe Facility programme for 2021-2027, bringing us closer to achieving our European Green Deal goals.”

4. Tackling transport emission in a holistic manner 
Although the fuel initiatives, the extension of the ETS and the revision of the ETD have grabbed the headlines for their impact on the maritime and aviation modes, it is worth nothing that these are all part of a holistic Smart and Sustainable Mobility Strategy that has the ambitious goal of not just reigning in transport emissions but reducing the existing levels of emissions to turn the transport sector into a driver of the fight against climate change and not a laggard sector. With the EU looking to set new criteria defining sustainable alternative fuels, setting rules for investment into transport, and setting standards for each transport mode to meet in order to achieve the bloc’s 2030 and 2050 climate targets, the transport sector in the EU and across the global faces unprecedented changes and challenges. It is vital you have your say:

  • Fuel EU Maritime feedback (Deadline 27 September)
  • Energy Taxation Directive feedback (Deadline 27 September)
  • Fuel Aviation feedback (Deadline 27 September)
  • ETS revision feedback (Deadline 27 September)
  • Alternative Fuel Infrastructure Directive feedback (Deadline 27 September)

5. UKTiE has also put together the latest timetable of key transport and supply chain developments in Europe. We will keep this up to date as the process develops:

  • 15 July-30 August: European Parliament on recess.
  • 31 August-1 September: Next ENVI Committee meeting.
  • 1 September-2 September: Next TRAN Committee meeting.
  • 24 September 2021: UKTiE pre-COP26 event.
  • 15 October 2021: Next UKiE Horizon workshop.
  • 1-12 November 2021:  COP 26.
Mark Watts
UK Transport in Europe (UKTiE)
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