The dream is to have a transport mode that is as fast as a plane Adina Vălean European Commissioner for Transport

Caspian Energy (CE): What was the impact of the high level of gas and electricity prices on the transport industry?

Adina Vălean, European Commissioner for Transport:  It’s true that the transport industry is among those most affected by rising energy prices. However, the impact depends to a certain degree on the share of fuel costs compared to other costs, like labour, insurance, and maintenance. In the maritime sector, fuel is certainly the highest cost; but for rail, it is the lowest. For road freight transport, fuel costs are significant, together with labour costs, but the ration between the two varies significantly between countries.

Let’s bear in mind that due to the COVID-induced economic downturn, we are coming from a very low level, so price increases sometimes look disproportio­nately high. In fact, in the first half of 2021, household gas and electricity prices were comparable with those of the second half of 2018.

Having said that, in the past energy prices often fell as quickly as they rose. But today, actions to step up the fight against climate change may mean that fossil fuel prices remain high. This is without taking into account other factors affecting prices, such as geopolitical deve­lopments, higher international demand due to economic recovery, insufficient maintenance work on energy installations in some countries, and the impacts of the COVID pandemic and major accidents on supply chains. In short, higher energy prices will become the new normal. 

To mitigate the impact on industry – and households – the Commission has presented a toolbox of short-, medium- and long-term actions that will benefit transport companies, among others. For transport, we have also introduced measures designed specifically to provide relief, such as flexibility on access charges for use of certain infrastructure.

In the long run, however, the solution can only be to reduce dependency on polluting fuels – not only to protect the climate, but also to foster economic growth, in part through encouraging innovative investment. The rise in carbon prices is already a strong disincentive to invest in fossil fuel energy carriers.

The Commission has proposed carbon pricing initiatives to support a move to cleaner fuels. These include widening the scope of the Emissions Trading System, lowering the minimum tax rate for efficient and clean fuels. We are also now entering discussions with the other EU institutions on our proposals to boost the uptake of sustainable alternative fuels, and – by consequence – the vehicles that run on them.