EU transport policies: looking back and moving forward

Over the past four years, von der Leyen’s Commission has forged a legacy defined by the European Green Deal and the twin transitions. These guiding principles have underpinned most legislative proposals, fundamentally shaping the EU’s transport agenda towards 2030. In this article, Publyon’s transport team takes stock of the progress on key EU transport policies proposed under von der Leyen’s Commission and evaluates potential priorities for transport policies during the next Commission term (2024 – 2029).

The Commission has set ambitious goals for reducing transport emissions and promoting clean mobility. Simultaneously, substantial investments in digitalisation and innovation aim to enhance the efficiency and connectivity of the transport system. These ambitions materialised in the deliverables of the Smart and Sustainable Mobility Strategy (the EU’s transport strategy towards 2030, including 82 EU policy measures), characterised by the keywords: Sustainable, Smart, and Resilient.

 

Driving changes via EU transport policies: The EU’s leadership in greening mobility

One of the main priorities under the von der Leyen Commission has been the effort to reduce the environmental footprint of the transport sector (cutting 90% CO₂ emissions by 2050), while supporting the development of clean technologies and energy sources.

The EU decided to take a leading role in greening mobility, shaping the reduction of emissions at both the European and global transport sectors. The EU’s decision to expand the EU Emissions Trading System to cover aviation and maritime triggered a response at international level. Countries increased their green ambitions for their transport policies, as well as in the context of the United Nations climate change conference (COP), International Maritime Organisation (IMO), and the International Civil Aviation Organisation (ICAO).

 

How has the EU become a leader?

The Fit for 55 package established new targets for emissions reduction in the transport sector and introduced incentives for the uptake of low-carbon and renewable fuels (and related infrastructure).

Notably, to decarbonise the sector, the Commission has focused its transport policies on the electrification of vehicles and zero-emissions solutions for rail, while prioritising the uptake of renewable and low-carbon fuels for aviation and maritime. Examples of the main transport policies include the Alternative Fuels Infrastructure Regulation, the extension of the EU Emissions Trading System to road, air, and waterborne transport, new targets for CO₂ emissions for (heavy-duty) vehicles, and legislation promoting the uptake of renewable fuels in maritime and aviation.

Furthermore, the Commission decided to concentrate its final efforts on greening the freight sector, supporting the shift from road to rail and inland waterways and introducing incentives for multimodal freight operations.

 

The work is far from done

The majority of the legislative texts has been finalised, hence, the next step is the implementation phase. Member States will need to transpose the new targets and obligations into their national legislation, allowing some flexibility for a national touch.

The implementation of the new measure will also face challenges on the technical and practical side. Will the EU electricity grid be ready for the increased number of recharging stations? Will there be enough vehicle batteries and renewable fuels to power cars, planes, and ships? The ambitious targets for 2030 are quickly approaching and much still needs to be done to realise them.

Questions also arise regarding the competitiveness of EU companies, which will have to invest significant resources to decarbonise the sector while remaining competitive. The EU will have to monitor the potential relocation of companies to non-EU countries, as a result of the implications of the new rules (e.g., EU ETS).

 

The transformative role of digitalisation in EU transport policies

Digitalisation is an indispensable driver for the modernisation of the entire system, making it seamless and more efficient. Von der Leyen’s Commission has supported the use of digitalisation and automation in its transport policies.

For instance, it addressed the uptake of intelligent transport systems to enhance safety, security, reliability, and sustainability. The recently launched Passenger Mobility Package provides recommendations to address the impact of automation and digitalisation on the transport workforce, promoting upskilling and reskilling.

The Commission has also committed to providing better multimodal travel information services and building a European Common Mobility Data Space. The latter aims to provide better access, sharing, and reuse of data, as well as innovative transport services, safety, sustainability, multimodality, and data-driven transport policies.

Sector-specific initiatives are not the only factors impacting the transport sector. The digitalisation of the EU and its economy has been high on von der Leyen’s Commission’s agenda, translating into comprehensive legislation addressing the broad digital realm, from the Data Act to the Artificial Intelligence (AI) Act. Why are these important for the transport sector? Data and AI systems will play a pivotal role in shaping mobility, improving seamless transport operations and efficiency.

 

Challenges and delays

Despite the initial commitment, the Commission postponed the publication of the proposal on multimodal digital mobility services (MDMS), which should have better integrated public transport and ticketing to achieve seamless (and more sustainable) multimodal passenger transport.

Why? The initiative was already highly criticised by the industry over the new requirements to share data between operators and booking platforms. A similar fate is faced by the initiative on access to in-vehicle data. Originally planned for 2021, it should have provided sector-specific legislation for data sharing and smart mobility.

 

Are the EU transport policies fit for the future? Navigating through global competition

The EU transport market can be considered as heterogeneous, with national and regional frameworks still regulating most of railways and roads operations, and some of air and maritime transportation. Exemptions concern only international aviation, maritime and freight transport. This fragmented environment weakens the power of the EU to address international challenges for the sector.

First, COVID-19, and then continuous geopolitical challenges put the EU transport sector and its supply chains at risk. Notably, COVID-19 hit the transport sector the hardest, reducing connectivity across the EU, foreign and domestic travel, and disrupting supply chains.

Moreover, the competition with China and the ban on Russian fossil fuels exposed the EU to the risk of a shortage of key technologies deemed fundamental to decarbonise the sector, such as raw materials needed for batteries, and high energy prices drowned the competitiveness of the whole EU industry.

On top of this, the race for clean technologies and renewable energy sees the EU competing with the substantial greater firepower of the United States, which is pumping resources and money into these businesses (if based in the US). This trend will continue in the coming years, and to build a sustainable and smart transport sector, von der Leyen’s Commission had to face and address these challenges.

One of the first initiatives aimed at ensuring the EU remains a global actor boosting competitiveness and global supply chains in the transport sector is the Global Gateway. This EU Strategy will support the EU signing partnerships with key countries, for instance, on critical raw materials.

Yet, the focus on competitiveness accelerated in the second half of von der Leyen’s term. The Commission started applying the concept of open strategic autonomy to EU transport policies, wanting to ensure that critical transport infrastructure and operations are economically independent and resilient to foreign influence.

Examples of some of the actions taken by the EU have been the investigation launched on electric vehicles from China, the strengthening of the foreign direct investment screening Regulation and the own initiative by the European Parliament on a comprehensive European port strategy. Former President of the European Central Bank Mario Draghi is also writing a report on how to boost the EU’s competitiveness. The report, expected to be finalised by summer 2024, will include proposals to revitalise the EU economy and feed into the EU strategy for the next years.

 

Challenges and delays

However, much still needs to be done to ensure the competitiveness of the EU transport sector. For instance, aviation stakeholders have been long waiting for the revision the regulatory framework of air transport.

Nevertheless, the different interests within the Commission (business vs sustainability) and outside advocacy efforts led to a delay in the publication of the revision of the EU Slot Regulation as well as the Air Services Regulation.

 

EU transport policies in transition: new landscapes and legislative priorities

As the EU approaches a crucial turning point with the impending European elections and the formation of a new College of Commissioners, the contours of the EU’s strategic vision for the next five years are taking shape. The arrival of new faces in Brussels brings with it a spectrum of fresh interests that will wield significant influence in shaping the priorities for the upcoming EU Strategic Agenda 2024 – 2029.

A notable aspect of this evolving landscape is the ascent of right-wing parties in the European Parliament and across various Member States. This political shift is anticipated to usher in a more business-oriented legislative approach. This shift in ideology implies a departure from the priorities set in the preceding legislative term, particularly impacting the trajectory of EU transport policies, such as the last-minute decision to leave the door opened to e-fuels in the new CO₂ standards for cars and vans.

In the imminent term, the forthcoming Commission is set to limit the publication of new EU transport policies, excluding those already in the pipeline. The primary focus will pivot towards the implementation of recently adopted legislation, with a keen interest in translating how initiatives like the Fit for 55 will work in practical terms.

Beyond the domestic front, a key challenge that the EU transport sector faces is the intensification of global competition. The new Commission will be tasked with devising strategies to safeguard the competitiveness of the EU transport sector in the face of this escalating global rivalry. The pertinent questions arise: How can the EU effectively tackle the surge in global competition, and what measures will be employed to navigate this dynamic landscape?

As the political and strategic recalibration unfolds, the EU transport sector stands at a crossroads, awaiting the strategic decisions that will shape its trajectory in the years to come.

As such, the new Transport Commissioner will have to assess how the EU could support companies and Member States to achieve the 2030 targets (e.g., Fit for 55, TEN-T). This should include an investment agenda to ensure projects can commence quickly and project developers have quick access to financial support. For this, we foresee that a targeted update of the Smart and Sustainable Mobility Strategy is needed to respond to the changing geopolitical context, provide certainty to Member States and industry, and provide clarity by setting a strategic direction towards 2040.

 

Would you like to know how these developments will impact your business and what you can do to ensure your licence to operate?

Companies and organisations will have to ensure compliance with adopted EU transport legislation, updating their operational procedures, assessing the impact throughout their value chains and (re)thinking their corporate strategy and investments. Publyon offers expert advice and guidance, assisting in understanding legislation and its potential impact on your operations throughout the value chain. Do not hesitate to reach out to our transport team if you want to know more.