Report

Pricing instruments on transport emissions

Pricing instruments on road transport CO2 emissions are widely applied in Europe, although there are significant differences between Member States. More broadly, Member States also differ to the level by which their road transport sectors meet the ‘polluter-pays’ and ‘user-pays’ principles.
The European Commission has presented proposals to intensive the pricing of CO2 emissions of road transport by introducing emission trading for this sector as well as by revising the Energy Taxation Directive. One of the aims of the latter is to incentivise the uptake of low-carbon energy carriers by the transport sector.
Pricing instruments (particularly emission trading and fuel taxes) are effective in reducing CO2 emissions in the road transport sector. They may, however, also have significant distributional impacts, which should be carefully considered in order to gain social acceptance for this type of instruments.