The EU can foster the transformation in the transport sector by expanding and advancing existing national and city-level policies

The European transport sector is the laggard of sectoral transformations, but it can be decarbonised by scaling up existing ambitious policies at the EU level. While it is clear that current EU policies will not lead to the required transition of a zero emissions transport sector by 2050 at the latest, innovative and transformational policy examples exist throughout the EU and the world. Adapting, upscaling and expanding such policies would bring the transport sector in line with a greenhouse gas emissions pathway compatible with the Paris Agreement, including a -65% emission reduction target by 2030 compared to 1990 levels.

As the EU is currently in the process of ratcheting climate commitments, the transport sector should
follow suit

The transport sector should not impede current discussions within the EU about setting adequate levels for an updated 2030 target in line with a long-term trajectory for climate-neutrality by 2050. The European Commission has put forward a proposal for the EU to ratchet its 2030 ambition to 55% below 1990 levels. The European Parliament, and in particular the European Parliament’s Environment Committee, is considering to further strengthen the 2030 target to a 60% to 65% reduction. Recent studies suggest that a 65% target is entirely feasible (Climact, DIW, PAC Consortium). These targets are eventually to be included in a climate law, which would impact all sectors of the economy.

Regardless of the EU target to be agreed on, immediate and ambitious climate action is needed in the transport sector. Pre-COVID-19, the sector accounted for 27% of European emissions. It is the only EU sector that has seen an increase in emissions since 1990 and as other sectors decarbonise, the transport sector gains an increasingly larger share of overall emissions. In line with Paris Agreement goals, European policies should ensure that emissions in the transport sector peak immediately, steeply decline towards 2030 and reach zero emissions latest by 2050.

Adapting, upscaling and expanding existing successful national and city-level policies can foster the required transformation in the transport sector

CLIMACT and NewClimate Institute have shown how the EU transport sector can significantly increase its ambition levels, to the point where full decarbonisation of the sector by 2040 becomes possible. Irrespective of when the EU achieves decarbonisation, the analysis identified clear policy steps that can be taken at the EU and member state level, inspired by existing innovative and ambitious policies.

Reduce and avoid the need for transport

Lowering passenger transport demand will directly reduce the pressure on technology development efforts. For example, decreased transport demand can significantly reduce how fast and how many zero emission vehicles need to be produced, in turn relieving pressure around the production and disposal of batteries for electric vehicles.

Beyond the exchange of good practice, the EU has very limited policies in the area; however, many European cities can serve as examples. Successful urban planning concepts, such as Copenhagen’s five finger plan, have been around for decades. Copenhagen, and other European cities, are rooted in sustainable long-term urban planning, with compact and mixed-used neighbourhoods, transit-oriented urban development and logistics centres at urban borders that minimise freight and commercial transport within cites.

Concrete policy recommendations include:

  • Mandated Sustainable Urban Mobility Plans (SUMP) and the provision of technical and financial support to implement them, aiming to achieve a long-term decarbonised transport system. Such SUMPs could:
    • focus on transit-oriented urban development, to avoid the need to travel and offer alternatives to individual vehicles
    • include elaborated zero emission freight transport strategies to supply urban areas
    • include zero emission and congestion zones, similar to the ones implemented in London
  • Air travel demand reduction measures:
    • Adjusted air travel taxation, starting with relieving tax exemptions
    • Banning of domestic and intra-European flights that meet at least one of the following criteria:
      • The distance travelled is less than 1,500 km (i.e. short-haul flights)
      • An alternative is available with 6 to 8 hours of travel time


Higher vehicle occupancy and utilisation rates

The digitalisation and improved coordination of transport can lead to more efficient freight transport, intermodal transport (such as the switch from urban trains to shared bikes or the switch from a cargo ship to freight trains) and the upscaling of shared mobility. Increasing lfreight oad factors (ton per vehicle), occupancy rates (number of passengers per vehicle) and utilisation rates (how much a vehicle is in use) can lead to smaller vehicle fleets. This in turn would reduce pressure on technical solutions such as sustainable batteries and would relieve traffic from oftentimes already congested roads.

Europe is starting to reap the benefits of digitalisation in policies. A prime example is the Finnish Act on Transport Services, which mandates transport companies to exchange data and provide services on a coordinated digital platform. Users can search for and book a wide range of transport services on one platform as well as at any service provider, enhancing access and reliability of alternative modes of transport and thus enabling a shift away from private cars.

Concrete policy recommendations include:

  • A European directive on Transport Services for the safe and reliable exchange of data and transport service provision on a coordinated digital platform
  • The set-up of a European transport coordinating agency to pursue efforts for seamless cross-border rail, bus and inland waterway routes


Modal shift to walking, cycling, public transport, rail and inland waterways

A multitude of environmentally-friendly alternatives to (polluting) cars, trucks and planes exist; EU policies should clearly support them and reshape transport infrastructure. In the last decades, governments and cities have built transport systems around the use of cars and trucks – this needs to change. Cities can largely contribute by offering alternatives to private motorised transport. In metropolitan areas, the modal split of passengers using alternative transport modes could reach up to 90%. Similarly, freight transport needs to shift from trucks to electrified rail routes and inland waterways, which could reduce the number of trucks on European road by half by 2050.

Urban centres in the EU provide many useful policy examples to get people out of their cars – but there are no ‘one-size-fits-all’ solutions. A few examples to get inspired: Austria’s 2015 Master Plan for Walking contains a strategy to promote walking and to meet pedestrian needs in federal, state, and local government policymaking and planning. The Netherlands notoriously integrates biking as an official transport mode in infrastructure planning. For example, it dedicated 100 million euros to building and/or modifying high-speed bicycle routes and parking facilities together with municipalities across the country. Paris implemented an interesting and innovative subsidy scheme, ensuring affordable public transport (ticket fares represent only 28% of total investment and operational costs) and leading to investments in modern transport services such as shared bicycle infrastructure investments.

Large investments in medium- and long-distance transport infrastructure are required to enable the transition to zero-emission mobility. The long lifetime of transport infrastructure assets leads to a high risk to lock Europe’s transport sector into a high emissions pathway for many years to come. Railways can connect Europe and replace commuting by car, travelling by plane, and transporting freight with trucks. Japan’s railways can serve as an example: the network reaches all corners of the country; private companies boost efficiency and financial self-sufficiency; a subsidised public company competes on the market ensuring a lever to indirectly regulate rail fares; and finally high-speed train lines, punctual departures and a modern and user-friendly payment system enhance reliable and user-friendly rail services.

Concrete policy recommendations include:

  • EU-wide modal shift targets and an EU directive to mandate member states and indirectly cities/municipalities setting targets too, aiming to reduce the use of private cars to 20% or less in urban areas. Such targets provide clear signals to all stakeholders on the architecture of future urban landscapes.
  • Systematic EU support to cities and municipalities in further developing their public transport systems, including financial support to provide affordable transport fares.
  • European support to national and city-level walking and cycling plans, including investments in safe and reliable walking and cycling infrastructure
  • Reconsidering the European infrastructure pipeline, for example through the European Investment Bank (EIB) transport lending policy, soon to be revised. The EIB could shift finance flows and strategically scale up mobilisation of finance to decarbonise the transport sector for example in:
    • upscaling public transport investments
    • developing an investment roadmap to completely decarbonise and electrify European rail
    • fostering research, development, and implementation of decarbonisation solutions for the shipping sector, such as green ports
    • building the required infrastructure to support electric mobility and efficient, forward-looking freight infrastructure
  • Improved EU coordination and revised priorities of the Trans-European Transport Network (TEN-T), which is not on track to lead to an integrated European network by 2030
  • Removal of financial and administrative barriers for intermodal freight transport, particularly at borders.


Increased vehicle efficiency

Emission standards for vehicles is a core strategy of EU transport policy but could be more ambitious. European emission standards have been a mixed success to date and together with the EU ETS, lack ambition to bring the transport sector to zero emissions. The EU has largely omitted the aviation and shipping sectors and international agreements are weak.

Concrete policy recommendations include:

  • A new and more ambitious EU directive on emission standards for all road vehicles targeting 50 gCO2/km by 2025 and 0 gCO2/km by latest 2035
  • Removing tax exemptions and introducing a carbon tax, particularly for the aviation and shipping sectors
  • The gradual increase of fuel taxes, ideally in larger groupings of countries
  • European green port fees and/or similar schemes such as green berth allocation policies, green procurement and carbon pricing schemes
  • A strengthened EU Emissions Trading Scheme (ETS) with more stringent caps and including extra-European flights and shipping as currently being discussed.


Technology shift to zero emission transport

To fully decarbonise the transport sector, the shift to electric mobility must be accelerated, effectively ending the sales of new internal combustion engines. Based on energy efficiency considerations as well as the level of maturity and steep recent cost reductions of battery technology and electric vehicles, decarbonising transport can best be achieved through the full electrification of vehicle fleets. Electric mobility support must be regarded as a policy package. While some policies will have an impact as a standalone policy (e.g. financial support schemes) others will likely not (e.g. charging infrastructure). In either case, the most effective way to implement them is in combination.

Norway has proven to capture the uptake of electric mobility through a comprehensive policy package. Norway has a generous purchase subsidy (just over EUR 10,000 per vehicle) and provides other financial incentives such as registration tax benefits, ownership tax benefits, company tax benefits, and VAT benefits. The country has also an extensive electric vehicle charging infrastructure (2,000 chargers per million inhabitants) and provides behavioural incentives such as free parking, toll benefits, or access to bus lanes.

Concrete policy recommendations include:

  • A ban on fossil fuel vehicle sales by a given year, but no later than 2030 for cars and two-wheelers, and 2035 for buses and trucks
  • A European directive on support for zero-emission vehicles
  • Comprehensive European electric vehicle charging infrastructure development plan with short and medium-term targets dependent on population and traffic density
  • Behavioural incentives for the uptake of zero-emission vehicles such as priority lanes and dedicated parking spots


Fuel switch to zero emission synthetic fuels

Zero emissions synthetic fuels will be key in reaching a decarbonised transport sector but needs to be the last resort. The production of zero emission synthetic fuels puts pressure on the energy transition as it requires massive amounts of renewable electricity. Electrifying vehicles is the most energy efficient zero emission technical solution as of today. However, such solutions do not yet exist at the commercial scale for the aviation and shipping sectors. Synthetic fuels will thus likely be necessary. The lack of commercial solutions at the required scale highlight the need for energy efficiency improvements to alleviate pressure on synthetic fuel production.

Concrete policy recommendations include:

  • EU and member state level research and development (R&D) of zero emission synthetic fuels for the aviation or shipping sector including supporting prototype projects (such as public-private partnerships)
  • European support for the uptake of alternative synthetic fuels, requiring ports and airports to develop the required infrastructure and continue to engage with the International Maritime Organization (IMO) to implement more stringent measures at the global scale. These measures could include emissions standards, energy efficiency standards, and a global emissions levy (more information here).
  • An amended EU Renewable Energy Directive to require fuel suppliers to supply alternative synthetic fuels to the aviation and maritime transport sector, instead of boosting the supply of potentially unsustainable biofuels

Immediate and strong action needed on all fronts

Transforming the transport sector on a path to zero emission by 2050 with a steep decline by 2030 (e.g. -65% from 1990 levels) will require immediate and strong policy action on all fronts, involving all stakeholders. The EU can play a key role in rethinking its infrastructure pipeline, enabling coordinated cross-border travel routes and accruing EU coordination in sectoral transformation. Ambitious action to avoid and shift current (motorised) transport demand will alleviate the pressure on technological solutions such as sustainable batteries, renewable synthetic fuels and the large-scale expansion of renewables.


Are you tuned? Find more details on our policy analysis and the policy packages we recommend here – or just keep reading

In a policy heatmap, we rate the ambition level of current EU policies (as of end of 2019), of existing good practice policies in countries or cities and, of those policies required to fully decarbonise the transport sector. We use the traffic light colours to indicate how far away each of the ambition levels is from the highest plausible ambition level that would lead to full decarbonisation of the sector. The heatmap is the backbone of policies proposed in a study by CLIMACT and NewClimate Institute to fully decarbonise the European transport sector by 2040. Policies to decarbonise the European transport sector by 2050 will require transformative policies as the ones suggested in this study, especially in regards to the current massive policy gap.

Current EU policies to reduce emissions in the transport sector are weak in all areas and will not enable the shift to a zero emission transport sector (mainly marked red).
Plenty good practice policies exist that could be scaled up to all EU member states. However, it is difficult to find policies that are mature, replicable and ambitious at the same time so to decarbonise the European transport sector. Of 17 good practice policies reviewed, three have a high scalability potential (green), namely London’s ultra-low emission zones (ULEZ), highly subsidised public transport in Paris, and Norway’s electric vehicle (EV) support package, while most other policies have a limited scalability potential (mainly orange and yellow).
A zero emission transport sector latest by 2050 requires highly ambitious policies, which boost transformational change in a rapid manner (entirely dark green).

More detail on the policies can be found in our latest report: A radical transformation of mobility in Europe: Exploring the decarbonisation of the transport sector by 2040 – Explorative scenario and related policy packages.


Julie Emmrich, Markus Hagemann