According to NEE Study, Road Traffic Does Not Cover Its Costs

The representatives of road traffic repeatedly portray themselves as victims of a redistribution that exploits car drivers and thus cross-subsidizes other modes of transport. An exploratory study commissioned by the NEE disproves this claim. In fact, road traffic does not cover its direct costs; it is supported by double-digit billion amounts from tax revenues.

(Berlin) The freight railways demand that the government finally listen to its own monopoly commission after years and put an end to the lack of transparency. Germany should follow Switzerland’s example and conduct an analysis of the costs and financing of transport.

It is incorrect to claim that car drivers and road hauliers pay high levies and do not receive an equivalent return, as demonstrated in an exploratory study. The investigation “Estimation of the Costs of Transport Modes in Comparison” by Prof. Dr. Christian Böttger from HTW Berlin, which the Network of European Railways (NEE) commissioned for the second time after 2017, also states that the actual costs of road traffic are opaque and are sometimes not even collected. “Four years ago, the freight railways called on the future government to heed the monopoly commission’s call for more transparency regarding the collection of actual revenues and expenditures.

The political response to this request has not materialized even after four years, which is why we are once again demanding from the upcoming government: It must not be the case that the financing of our transport is an opaque patchwork of numerous climate-damaging and competition-distorting subsidies. This makes a thoughtful and forward-looking financing based on climate considerations impossible. And of course, no one can accurately calculate how much the road benefits from this patchwork,” explains NEE Chairman Ludolf Kerkeling.

Increase of 10 billion

The public sector now spends 70 billion euros on road traffic compared to 60 billion in the 2017 assessment. This represents an increase of 10 billion euros, where road traffic, even assuming a earmarking of half of the mineral oil tax revenue generated in transport, does not cover its cash-effective costs with its revenues. The fact that some modes of transport have more opaque revenues and expenditures than others is primarily due to the many different funding pots. In contrast to roads, rail is largely funded by the federal government, and these expenditures are traceable in the federal budget. In contrast, while roads are also heavily funded by the federal government, they are additionally supported to a much greater extent by municipalities and states, over which there is no systematic overview. Beyond the highway network, there is little information about the road network. Not even the length of the network is statistically fully recorded. Since 2012, there have been no official figures on the costs for the construction, maintenance, and operation of district and municipal roads.

Results Contradict All Promises

“The results contradict all promises made by the governing parties to enhance the railways in the future, as the money is urgently needed for the environmentally friendly mode of transport, rail,” criticizes Kerkeling. For years, the freight railways have demanded sufficient investment funds for the new construction and expansion of rail infrastructure, a lower tax burden for rail transport, and the allocation of external costs to all modes of transport so that the climate advantage of rail can finally be reflected in the price, enabling a shift from road to rail. Kerkeling: “Transport Minister Scheuer announces that in 2022, for the first time, more money will be spent on rail infrastructure than on roads. However, he overlooks the costs that states and municipalities incur for roads, as well as external costs for climate, accidents, and traffic police. Transitioning to electric vehicles and the government’s plans for trucks with alternative drives will also cost enormous sums. In contrast, rail has been operating electrically for decades.”
 

Different Tax Burden in Intermodal Competition

The study also confirms NEE’s assessments regarding the different tax burdens in intermodal competition with road: Road enjoys extensive privileges that are not linked to climate-friendliness, such as reduced diesel tax and still too low CO₂ pricing, as well as subsidies for renewing truck fleets, while the electrically operated railway has to pay many levies simultaneously (including electricity tax, EEG levy, emission certificates, energy tax).

The investigation is exploratory and points out that it cannot replace a comprehensive study, as has been demanded by the monopoly commission for years. Especially in terms of the transport transition, transparent figures are urgently needed to achieve a systematic design of the financing of transport modes, which has so far followed more political calculations. This would enable the demand for a justified financing of transport that promotes climate-friendliness to be put into practice.

The complete study by Prof. Dr. Böttger and the graphic for download: here

Photo: © NEE