Slides from the presentation by Dr Amaya Vega and Dr. Natasha Evers, SEMRU, Whitaker Institute given at THE NATIONAL SUSTAINABILITY SUMMIT 2015 held at the AVIVA Stadium on 3rd November 2015.

1. HGV road user charging policy in Europe:
Implications for Irish freight transport stakeholders
Dr Amaya Vega and Dr. Natasha Evers
SEMRU, Whitaker Institute
NUI Galway
AVIVA Stadium, November 3rd, 2015
THE NATIONAL SUSTAINABILITY SUMMIT 2015
This research is funded through the Beaufort Marine Research Award, with the support
of the Marine Institute and the Irish Maritime Development Office (IMDO)

2. INDEX
 BACKGROUND
 RATIONALE
 QUALITATIVE DATA METHODS
 RESEARCH FINDINGS
 CONCLUSIONS

3.  EU sustainable freight transport
policy - Member States (MS)
required to implement measures for
internalising or reducing
transport externalities
 EU directives for HGV road user
charges have played a central role
in European transport policy.
 Road charging for the private car
has been left as a matter for the
Member Sates
BACKGROUND

4.  Eurovignette Directive (1999/62/EC as amended by
2006/38/EC and 2011/76) sets out the common regulatory
framework setting up HGV distance-based road charges
and HGV time-based road charges (vignettes) for the use
of certain infrastructure.
2011/76 EU Directive
integrated elements aimed at
better reflecting the ‘polluter
pays’ principle
EU POLICY DEVELOPMENTS

5.  No MS has started internalising external costs - an
increasing number of Member States use a form of HGV
road user charging
 Sweden, Denmark, the Netherlands, Belgium and Luxemburg
(shared ‘Eurovignette’). Belgium starting new national distance-
based system in April 2016.
 April 2014 - UK government introduced a HGV road
user charge. Time-based charge of up to £1,000 a year
or £10 a day and will apply to lorries weighing more than
12 tonnes using UK roads.
 Potential impact? Will Ireland’s future economic
recovery be challenged?
RATIONALE FOR THE STUDY

6. IRELAND’S GEOGRAPHY AND PERIPHERALITY: HISTORICAL
TRADE DEPENDENCY ON UK
 Ireland’s trade dependency on the UK
land bridge goes beyond the bilateral
movement of goods.
 Approximately 90% of total ro/ro freight
movements with Continental Europe
use the British Land Bridge network
(Trant and Riordan, 2011)
 HGV section of the haulage sector (>10
tonnes) accounts for 20.7% of registered
vehicles, but it is responsible for 88.5%
of total activity in terms of tonne/km
(CSO, 2015)

7. • To explore the potential
implications of the 2014 UK HGV
road user charge for Irish
transport stakeholders
OBJECTIVE

8.  McKinnon (2006) - Initial proposals for the introduction of a HGV road user
charging scheme in 2002. Sui and Liwei (2012) for a more recent analysis.
 Potential damaging effects that a HGV pricing reform could have on the
economy of peripheral regions - TIPMAC (Kohler et al., 2003; 2008) and
IASON (Tavasszi, 2004)
 Gutierrez et al. (2013) - potential disadvantages of the ‘Eurovignette’ system
across Europe with regard to direct revenue transfers between European
countries.
 Geographical location: key factor in determining whether the net balance of toll payments
was positive or negative, with peripheral countries presenting negative balances.
 The empirical literature on the impacts of road pricing is extensive -
congestion, mobility, carbon emissions, equity or accessibility. Hensher and
Puckett (2008) used experimental design techniques to investigate the role
of distance-based charges
CURRENT RESEARCH TO DATE

9. INDEX
 BACKGROUND
 RATIONALE
 QUALITATIVE DATA METHODS
 RESEARCH FINDINGS
 CONCLUSIONS

10. • Exploratory Study led to Qualitative Data Collection Methods
• Objective is not to generalise but to acquire qualitative insights and
perspectives into the issue, which a survey would not.
• Secondary Data collection
• Primary Data collection:
– Semi-structured, in-depth interviews were then conducted with
Irish transport stakeholder categories of Irish road hauliers,
Irish freight forwarders, Irish-based exporters and industry
associations.
• Interviews lasted 60-90 minutes - recorded and transcribed
verbatim. The interviews were framed around a series of questions
relating to the topics underpinning our research inquiry.
QUALITATIVE DATA METHODS

11. INDEX
 BACKGROUND
 RATIONALE
 QUALITATIVE DATA METHODS
 RESEARCH FINDINGS
 CONCLUSIONS

12. CONTROL OF THE LOGISTICS CHAIN
SCALE OF BUSINESS
LEVEL OF AWARENESS
FINDINGS
To identify the main decision-maker in intermodal
transport choices of Irish export goods.

13. Findings confirm that a disproportionate
cost impact exists on Irish hauliers.
Caused by the relatively low bargaining
power of hauliers to push the road charge
on to freight forwarders and exporters.
The nature of the Irish haulage sector is
that of quasi-perfect competition market
IMPLICATION 1: COST BURDEN

14.  Irish hauliers still operate in the Republic of
Ireland, but avoid paying the road charge.
 This action will result in the long-term decline of
Ireland’s indigenous haulage industry. ‘If it is not
sorted in two months, I am moving to UK’
(haulier)
 Serious concern for Irish Tax authorities given
the potential loss of revenue.
 Increase of the cost of commercial transport
services to/from peripheral rural areas.
IMPLICATION 2: POTENTIAL EXODUS OF ROI
HAULIERS TO UK HGV REGISTRATION

15.  Alternative route/modes to access mainland Europe were limited -
‘The UK land bridge is not that you decide to use it, it is that you
have to use it because there is no other option. It is too long a
distance otherwise’. ‘Yes, it would be great to have a direct service,
but you have to have the traffic first’ (Freight forwarders industry
representative).
 Modal shift towards alternative transport modes from Ireland to
Europe, in particular Short Sea Shipping (SSS). ‘Short-sea shipping
is by far the cheapest mode …you wonder why companies go by
road to Belgium via UK’, (large Freight Forwarder).
IMPLICATION 3: ALTERNATIVE TRANSPORT MODES NEED
TO BE EXPLORED…

16. IMPLICATION 4: IRISH GOVERNMENT RESPONSE :
FORTHCOMING HGV MOTOR TAX REDUCTION 2016
• The general unsuitability of the Irish motor tax system
has seen as one of the main barriers to the introduction
of a fair HGV road charge system – ‘There is double
taxation for Irish hauliers (…) they are paying motor tax
here, they are also paying the vignette in Belgium’ (small
haulier).
• While there is no apparent opposition to the UK road
charge and its rationale is well accepted, the solution
relies on the response from the Irish government Ireland
to mitigate the impact on the medium sized haulier.

17. IMPLICATION 5 : OUR EXPORTS
GEOGRAPHICALLY AND PERIPHERALLY DISTANCE TO
THEIR MARKETS
 Any EU HGV road charging system will have a
economically detrimental effect on Ireland, relative to
other more EU core economies.
 Ireland’s geopolitical relationship with the UK as a
mechanism to deal with the recently introduced HGV
road charge – ‘we are neighbours, not foreigners’ (large
haulier)
 Disadvantages associated with Ireland’s peripheral
geographic location affect all stakeholder groups in
similar way, namely through increased transport costs.

18. INDEX
 BACKGROUND
 RATIONALE
 QUALITATIVE DATA METHODS
 RESEARCH FINDINGS
 CONCLUSIONS

19. CONCLUSIONS
• DO MEMBER STATE TRANSPORT POLICIES INTEGRATE PRINCIPLE OF
SUSTAINABILITY?
• ARE MEMBER STATES IMPLEMENTING DIRECTIVE 2011 IN A WAY THAT TAKES
ACCOUNT OF THE ECONOMIC BALANCE BETWEEN INTERNALISING AND
EXTERNALISING TRANSPORT COSTS?
• ROI GOVERNMENT INITIAL POLICY RESPONSE TO IMPLICATIONS OF MS ROAD
CHARGE INCREASES - MOTOR VEHICLE TAX REDUCTION 2016.
 THE LIKELY IMPACT OF THE UK HGV ROAD USER CHARGE IS GREATER IN THE CASE
OF IRELAND BECAUSE OF ITS PERIPHERAL GEOGRAPHICAL LOCATION AND LIMITED
NUMBER OF TRANSPORT MODE ALTERNATIVES TO CONNECT WITH THE MAIN
EUROPEAN MARKETS.
 DISCREPENCY BETWEEN THE TRANSPORT MODE DECISION-MAKER AND WHO PAYS
THE CHARGES.

20. amaya.vega@nuigalway.ie
AMAYA VEGA
natasha.evers@nuigalway.ie
NATASHA EVERS