The Future of Transport in the Context of the Recovery Plan
The crisis caused by the COVID-19 pandemic has demonstrated that protecting the single market is vital for the EU. This historic challenge has shown the crucial role played by transport and the social, health and economic costs when free movement of people, goods and services is disrupted. Supply chains protection and a coordinated European approach to connectivity and transport activity are essential to overcome any crisis and strengthen the EU. Both its strategic autonomy and resilience are to be considered.
Transport matters to us all. However, despite the fact that mobility brings many benefits for its users, it is not without costs for our society. The EU’s strategic target of at least -55% greenhouse gas reduction target by 2030 and of climate neutrality by 2050 will be reached, only provided that more ambitious policies to reduce transport’s reliance are introduced and implemented.
With a view to reach the climate ambition to decrease emissions by 55% in 2030 below 1990 levels, Member States are obliged to initiate reforms and investments to support the green transition in the fields of energy, transport, decarbonising industry, circular economy, water management and biodiversity.
The EU is facing the double challenge of supporting the economy and reaching the strategic green targets mentioned above. Investing in sustainable mobility can strongly support the recovery. Actions addressing transport can bring significant greenhouse gas emission reductions and improvements to air quality, while stimulating productivity and growth. The key to achieving EU’s dual target of an efficient green mobility are measures such as investing in public transport and in infrastructure that supports the shift towards more sustainable and smart mobility. Efficient European multimodal networks as well as Trans-European Transport Networks for passengers and freight will boost the transition.
They can be translated into action only if an ambitious plan is put into practice. The Sustainable and Smart Mobility Strategy – putting European transport on track for the future1 outlines the following targets especially in the field of transport for 2030 and 2050:
By 2030:
at least 30 million zero-emission vehicles to be in operation on European roads.
100 European cities to be climate neutral
high-speed rail traffic to double.
scheduled collective travel of under 500 km to be carbon neutral within the EU.
automated mobility to be deployed at large scale.
zero-emission vessels to become ready for market By 2035:
zero-emission large aircraft to become ready for market.
By 2050:
nearly all cars, vans, buses as well as new heavy-duty vehicles to be zero emission.
rail freight traffic to double.
high-speed rail traffic to triple.
the multimodal Trans-European Transport Network (TEN-T) equipped for sustainable and smart transport with high speed connectivity to be operational for the comprehensive network.
The EU provided an immense response to the coronavirus crisis. It is going to be delivered through a stimulus package of €2.0182 trillion in current prices (€1.8 trillion in 2018 prices). It consists of the Multiannual Financial Framework for 2021 to 2027 of €1.211 trillion (€1.074 trillion in 2018 prices) complemented by €806.9 billion (€750 billion in 2018 prices) through NextGenerationEU (temporary instrument to stimulate the recovery).
Thanks to the allocated amount of €806.9 billion (€750 billion in 2018 prices), NextGenerationEU will stimulate the recovery of the economic and social damage caused by the coronavirus pandemic. The instrument will invest in projects which focus on delivering a greener, more digital, and resilient Europe. The key element of NextGenerationEU is the Recovery and Resilience Facility. The instrument provides grants and loans to support reforms and investments in the EU Member States at a total value of €723.8 billion. Part of the funds will be provided in form of grants (€338.0 billion). The remainder - €385.8 billion - will be used to provide loans from the EU to individual Member States.
The following amounts were allocated for the key priorities of the EU: Single Market, Innovation and Digital (€149.5 billion (+ €11.5 from NGEU)), Cohesion, Resilience and Values (€426.7 billion (+ €776.5 from NGEU)), Natural Resources and Environment €401 billions (+ €18.9 from NGEU), Migration and Border Management (€25.7 billion), Security and Defence (€14.9 billion), Neighbourhood and the World (€110.6 billion), European Public Administration (€82.5 billions). For an overview of the funding available under the Multiannual Financial Framework for 2021 – 2027 see .
The EU transport envelope within the Recovery plan consists of three essential parts: the Connecting Europe Facility general envelopes (€12.83 billion), the Cohesion fund contribution (€11.29 billion transferred to the Connecting Europe Faclity )which are channelled through the Connecting Europe Facility and additional funding of the security and defence budget (€1.5 billion).
The initially proposed amounts were significantly adjusted as a consequence of the coronavirus pandemic. As in the previous CEF, a general transport envelope of €11.4 billion and a Cohesion Fund contribution of €10 billion were planned to be implemented under the CEF. An additional €5.8 billion, included in the security and defence budget were planned to be managed trough CEF.
As a result of the COVID-19 pandemic and to the demand of the European Council of 23 April 2020, the Commission adopted an adjusted Multiannual Financial Framework proposal on 27 May 2020. It has some implications for the CEF budget. The Commission has increased its proposal for CEF-Transport, but still for a lower amount than the EP demanded. This increase was accompanied by larger cuts to CEF-military mobility, CEF-Energy and CEF-Digital.
The CEF Transport part of the programme will strongly promote the idea of shifting from individual national networks to a interconnected one by supporting the modernisation of railway, road, inland waterway and maritime infrastructure. The safe and secure mobility will also be promoted. Priority will be given to further development of the trans-European transport networks (TEN-T), focusing on missing links and cross-border projects with an EU added value. Infrastructure with dual-use compatible, meeting both civilian and military needs will also be a priority.
As mentioned above, significant funding for transport infrastructure will also be allocated through the Cohesion fund transfers to the CEF.
shows the country allocations that have been adopted:
Additional finance for transport is available also trough the NextGenerationEU (with a budget of €806.9 billion (€750 billion in 2018 prices). The central instrument of NextGenerationEU is the Recovery and Resilience Facility – an instrument for providing grants and loans to support reforms and investments in the EU Member States at a total value of €723.8 billion. Part of the funds — €338.0 billion — will be provided in form of grants. The remainder — €385.8 billion — will be used to provide loans from the EU to individual Member States. This is illustrated in .
The funds under the Recovery and Resilience Facility will be distributed according to national recovery and resilience plans prepared by each Member State, in cooperation with the European Commission, and in line with an agreed allocations per country.
The guiding principles underpinning the recovery and resilience plans, the national reforms and investments of the Member States are the following: environmental sustainability, productivity, fairness and macroeconomic stability. They are highlighted in the strategic guidance for the implementation of the Recovery and Resilience Facility ( Annual Sustainable Growth Strategy 2021).
In order to benefit from the Recovery and Resilience Facility, Member States should submit their draft recovery and resilience plans outlining national investment and reform agendas in line with the EU policy criteria. Member States’ recovery and resilience plans should address the economic policy challenges set out in the country-specific recommendations of recent years and in particular in the 2019 and 2020 cycles. The plans expected by Member States should also enable Member States to support their economic growth potential, job creation and economic and social resilience, and to meet the targets established for the delivery of green and digital transitions.
Flagship projects
Based on their relevance across Member States, the very large investments required, and their potential to create jobs and growth and increase the benefits from the green and digital transitions, the Commission strongly encourages Member States to include in their plans investment and reforms in the following seven flagship areas. One of them is namely dedicated to transport:
Power up – The front loading of future-proof clean technologies and acceleration of the development and use of renewables.
Renovate – The improvement of energy efficiency of public and private buildings.
Recharge and Refuel – The promotion of future-proof clean technologies to accelerate the use of sustainable, accessible and smart transport, charging and refuelling stations and extension of public transport.
Connect – The fast rollout of rapid broadband services to all regions and households, including fiber and 5G networks.
Modernise – The digitalisation of public administration and services, including judicial and healthcare systems.
Scale-up – The increase in European industrial data cloud capacities and the development of the most powerful, cutting edge, and sustainable processors..
Reskill and upskill – The adaptation of education systems to support digital skills and educational and vocational training for all ages.
All national recovery and resilience plans will need to focus strongly on both reforms and investments supporting the green transition. To follow the commitment of the European Council to achieve a climate mainstreaming target of 30% for both the multiannual financial framework and Next Generation EU, each recovery and resilience plan will have to include a minimum of 37% of expenditure related to climate.
Funding for transport will also be channelled through some of the pillars of other investment instruments. Invest EU’s provisions targeting support for investments for competitiveness, sustainable growth, social resilience and inclusion, sustainable infrastructure is among them. Financing operations include sustainable and smart urban transport projects which will provide additional funding in this particular area.
Additional funding for transport can be attracted from the European Regional Development Fund (ERDF). It‘s aim is to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. About 50% of the ERDF resources have been allocated to urban areas. Around €10 billion from the ERDF will be directly allocated to integrated strategies for sustainable urban development.
In addition, cities can use funding to implement integrated strategies for urban development. The INTERREG program is co-funded by the ERDF. With a budget of €8.05 billion, the 6th generation INTERREG programme supports cooperation between regions, citizens and economic stakeholders over their respective land and maritime borders. It will also cover the cooperation between regions at transnational level in the framework of the Macro regional and Sea basin Strategies: Baltic, Ionian/Adriatic and Black seas, Danube and Alps.
ERDF also promotes the Urban Innovative Actions (UIA). The funding available for 2021-2027 is €400 million. The aim of the project is to test new and unproven solutions to address urban challenges. It is the main tool for urban policies and covers all urban areas and priorities of the Urban Agenda. Under the European Urban Initiative, the Commission plans to establish a secretariat for urban matters to support the activities of post-2020 urban agenda as well as intergovernmental cooperation on urban matters. The European Urban Initiative will be implemented in two strands: 1) Support for innovative actions (previously under UIA); 2) support for knowledge, policy development and communication (aiming at having evidence-based demonstration for better policy as well as supporting the urban agenda).
The URBACT programme also enables cities to develop integrated solutions improving urban policies by networking, learning from one another’s experiences, and identifying good practices.
An important source of support is also the Horizon Europe programme. It will account for the bulk of the EU’s public research & innovation (R&I) investment in 2021-2027 and must leverage the development of zero emission technology in the transport sector. Its climate mainstreaming target will remain at 35% across the programme, as it was the case for its predecessor programme Horizon 2020. Many climate-related areas of research will be treated in an integrated approach in the so-called ‘cluster for climate, energy and mobility’.
Horizon Europe is composed of 3 pillars: excellent science; global challenges and European industrial competitiveness; innovative Europe. A cross cutting element also aims at widening participation and strengthening the European Research Area. The second pillar on global challenges is the most relevant to cities. It replaces the societal challenges under Horizon 2020. It will focus on a set of policy areas, one of them is namely relevant to transport: health; culture, creativity and inclusive society; civil security for society; digital, industry and space; climate energy and mobility; food bioeconomy; natural resources, agriculture and environment).