EU climate policy more favourable to transport companies of Western countries

2021/08/12 at 12:12 PM

Meeting the environmental targets set out in the legislative proposals of the European Commission will be more difficult for enterprises from Central and Eastern Europe. The beneficiaries of the EU policy will probably be suppliers of green technologies from France or Germany, considers Marcin Wolak, expert and founder of the Polish Road Transport Institute (PITD).

What will be the impact of the Fit for 55 proposals for road transport on the Polish carriers?

In my opinion, meeting the new requirements will be more difficult in the poorer EU countries. The ban on the sale of new cars with combustion engines is expected to enter into force in 2035, which means a very short time for enterprises to adapt. It can be presumed that Western politicians had calculated that the industry will be able to supply the appropriate number of low- and zero-emission vehicles by this time. This, however, will be associated with higher car purchase costs.

Marcin Wolak, founder of the Polish Road Transport Institute (PITD), source: Polish Road Transport Institute (PITD)

It will surely hit those countries that cannot catch up with the richer ones. Theoretically, Poland may suffer from this in many areas. The climate goals are reasonable but politics and the business game follow. There is a campaign to keep new players out of the top of the world’s largest economies. Of course, caring for the planet is important, but it looks like we’re dealing with madness on this subject.

There was also a proposal to support the construction of infrastructure for charging vehicles or the use of ecological fuel. There is no such infrastructure in Poland.

Certainly, if there is a possibility of co-financing such investments, it will be worth using. However, it may turn out that the beneficiaries of this funding will be equipment suppliers from Germany or France, which have the appropriate technologies. Moreover, the installation of fast charging systems requires the adaptation of the electricity infrastructure to ensure that there are enough points. There is a question mark whether the Polish energy infrastructure, especially in some regions, is ready to install this type of equipment so that it does not break down.

The road transport industry in Poland is very fragmented. Will the EU climate policy contribute to its consolidation?

I guess so but it is not known if it is beneficial for the industry. The fragmentation of this sector has its disadvantages. This affects the investment opportunities of Polish companies. Obviously, the larger companies have greater financing and fundraising opportunities. Small family businesses do not have such opportunities.

Engelberg Tunnel near Stuttgart on A81 motorway in Germany, source: Wikimedia Commons

On the other hand, fragmentation increases flexibility and the ability to respond to market situations. Some consolidation would come in handy, though. But the impact of the policy related to the Green Deal may cause this consolidation to take place at the expense of many Polish companies. Companies that have capital and access to cheap financing will grow. I would point out that the foreign companies, which have better access to capital, would primarily benefit.

The EU and national policies also include the goal of shifting freight from road to rail. Road transport should focus on first and last-mile services. How realistic is this assumption?

The policy of reducing road transport over long distances is clearly visible. But there are questions about the capacity of the railway and terminal infrastructure, and about the flexibility of this transportation. I agree that road transport will in the future focus more on the first and last-mile services. However, rail transport will not always be able to replace road transport. There are both emergency and planned situations, where it is still profitable to transport goods over long distances by trucks. Unless fuel prices increase or higher road tolls are introduced, it will not be efficient to change the mode of transport.

The capacity of the railway network, not only in Poland but throughout Europe, is limited, even in those countries where this kind of infrastructure is better developed. Even if there are more sidings and the terminals are better suited for efficient and quick operations, there are still limits to the number of trains running on railways. Hence, huge investments in infrastructure are needed. Many billions of euros should be allocated, not only in Poland. So the modal shift in freight transport will take longer than the politicians expect.

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