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. In general, Member States also differ in the extent to which their road transport sectors meet the ‘polluter-pays’ and ‘user-pays’ principles.

The European Commission has presented proposals to incentivise the pricing of CO2 emissions for road transport, both 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 these types of instruments.