Future of EU Transport Policy

POSITION | MOBILITY AND LOGISTICS POLICY

Future of EU Transport Policy JOINT DECLARATION ON THE SUBJECT For a sustainable and efficient mobility of tomorrow

September 2019

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Ensuring an efficient transport infrastructure is essential for a highly interconnected EuroOctober 23rd pean industry that relies on cross-border production processes and reliable logistics.

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The creation of a competitive European single market for transport and the intermodal use of all transport modes must remain the top political priority. The optimisation of European transport processes strengthens Europe's competitiveness.

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Achieving the extremely ambitious climate targets for transport poses a major challenge for industry. The aim here is to promote technology neutral solutions for tomorrow's mobility.

Unilateral bans and quotas unnecessarily make individual mobility more expensive without necessarily making a contribution to reducing emissions.

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The promotion of digitalisation in transport must be achieved jointly by industry and politics. Digitalisation offers additional potential for increasing efficiency in all modes of transport.

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The international dimension of transport policy remains high on the agenda. This applies both to free and fair competition, to non-discriminatory cross-border transport of all modes of transport and to the leading role of transport in international trade.

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The modes of transport are aware of their social responsibility and will jointly tackle and master the current challenges in the areas of environmental, noise and climate protection.

Unilateral, internationally uncoordinated regulations or additional burdens, however, only have a distorting effect on competition.

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Future of EU Transport Policy

Table of contents Introductory remarks .......................................................................................................................... 2 Efficient transport infrastructure ....................................................................................................... 3 Completion of the Trans-European Transport Network ........................................................................ 3 The artery of European mobility: The road network .............................................................................. 4 Building block for climate-friendly transport solutions: Capacity expansion in the rail network ............ 4 Earmarking of infrastructure charges .................................................................................................... 5 Single European Transport Area ....................................................................................................... 5 Ensuring efficient road freight transport ................................................................................................ 5 Ensuring a modern and interoperable rail network ............................................................................... 6 Completion of the Single European Sky ............................................................................................... 7 Suitable framework conditions for waterways ....................................................................................... 8 Digitalisation in transport ................................................................................................................... 9 Provision of digital infrastructure and test fields .................................................................................... 9 International harmonization of standards .............................................................................................. 9 Reducing bureaucracy in road freight transport .................................................................................. 10 Urban Air Mobility ................................................................................................................................ 10 Sustainable mobility ......................................................................................................................... 10 Promotion of alternative fuels and drives ............................................................................................ 11 International solutions for CO2 reduction ............................................................................................ 12 Balancing environmental protection and international competitiveness ............................................. 13 Internalisation of external costs ........................................................................................................... 13 Imprint ................................................................................................................................................ 14

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Introductory remarks For German industry, the European single market is the basis for freedom and prosperity in our society.

However, the further integration of the European Community can only succeed if an efficient transport system is guaranteed which provides a functioning and reliable infrastructure across borders. All modes of transport, i.e. road, rail, waterway as well as air and sea transport, have their specific advantages and thus contribute to the success of the German economy, which is characterized by decentralized, Europe- and worldwide connected production sites. The prosperity of the European Union is essentially based on the economic success of the European single market.

From the point of view of German industry, a competitive European single transport market and the intermodal use of all transport modes across national borders are of great importance. The production processes of European industry are highly interconnected. The preservation and creation of jobs and the safeguarding of the competitiveness of European industry require an efficient cross-border transport infrastructure that enables efficient and reliable logistics processes. This will require increased investment, coordinated at EU level, in rail and roaf capacity development, interoperability of the rail network, demand-driven expansion of airports and broadband mobile coverage of transport routes.

German industry attaches great importance to making mobility even more climate- and resourcefriendly while at the same time strengthening Europe's competitiveness. More than ever, the EU's ambitions can only be fulfilled with a joint effort by politics, business and society in a pan-European context. The extremely ambitious climate protection targets for the transport sector must be reconciled with economic success and social concerns in terms of sustainability. All existing and foreseeable technical possibilities of all modes of transport as well as the whole efficiency potential of digitalisation must be used to achieve the European climate protection targets. A technology-open and cost-efficient approach must be pursued.

New technologies for vehicle drives and traffic management systems as well as efficient infrastructures must be developed. In addition to electromobility, CNG/LNG, synthetic and biogenic fuels also play an important role in the transition to low-carbon mobility for all modes of transport. Air and maritime transport must continue to be governed by the principle that solutions at international level must take precedence over individual national measures. All modes of transport are indispensable for a functioning mobility in the Europe of tomorrow and can thus contribute to the achievement of climate protection goals. European industry provides solutions to the challenges of the future. The European institutions remain called upon to gear the framework conditions to innovation.

With this position paper on the future of EU transport policy, the Federation of German Industries (BDI) calls on the European institutions to sustainably and permanently strengthen Europe as a business location through the following measures.

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Efficient transport infrastructure Investments in transport infrastructure are investments in the future. A modern and well-developed transport system forms the backbone of an efficient European single market and the competitiveness of European companies on the world market. The EU Commission recognises the high relevance of a needs-based infrastructure expansion for the economic growth and climate protection in Europe. The German economy attaches great importance to the cross-border connection of European economic centres, the development of efficient hinterland connections for sea- and airports and the expansion of Trans-European Transport Network (TEN-T).

Completion of the Trans-European Transport Network The development of the Trans-European Transport Network is of great importance for the efficient value chains and the division of labour throughout Europe. In order to maintain and strengthen the European economic area, further development of infrastructure for all modes of transport and smooth cooperation based on the principle of intermodality are necessary. The different modes of transport have their specific strengths and the industry depends on the use of the whole range of transport modes. Cross-subsidisation between transport modes leads to possible inefficiencies and rarely takes into account the entire value-added or logistics chain. To this end, however, efficient interfaces between transport operators and the removal of obstacles at national borders are essential. The optimal use of the existing infrastructure requires not only adequate establishment and financing of a long-term and transnational maintenance strategy in compliance with the life cycle principle, but also funds for the modernisation and introduction of new transport technologies. The full development of the European single market can only succeed if the structural and technical prerequisites for crossborder traffic are in place. The BDI welcomes the planned completion of the TEN-T core network of strategic infrastructures by 2030.

The connection of strategically important ports and airports and the expansion of the trans-European freight transport network in all modes are particularly important. This includes the development of highspeed rail lines and cross-border projects to increase network capacity and remove bottlenecks. In addition, the development of a comprehensive network of regional and national feeder roads and tracks as well as sidings in logistical conurbations must be advanced by 2050. In order to increase the certainty of deadlines and costs in the realisation of public infrastructure projects, alternative procurement models such as design-and-build models, functional construction contracts and publicprivate partnerships (PPP) should be used as a supplement to conventional construction contracts, especially for large and complex projects. The ability to access different models ensures that clients can select the most economical form of implementation for a project.

So far the EU Commission's budget approach lags far behind the increase in funds that is required for the development of the TEN-T network. Therefore, during the negotiations on the Multiannual Financial Framework, the EU Parliament should work to ensure that the funds earmarked for the transport sector realistically reflect the real investment needs and allow more flexibility within the European support programmes. In order to achieve both objectives, the upcoming revision of the Regulation on the guidelines for the development of the TEN-T network (Regulation 1315/2013) should be used as an opportunity to further develop TEN-T policy. Investment support through European financial instruments such as the European Strategic Investment Fund (EFSI) and the European Regional Development Fund (ERDF) should be continued and expanded. The mobilisation of private capital should also play a special role here, e.g. to create investment opportunities for institutional investors in the area of public infrastructure.

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Eligible trans-European projects should be selected according to uniform, objective and transparent criteria across the EU, based on transport-related data, i.e. according to actual needs. In the case of EU (co-)financed projects, the identification and implementation of the most economical procurement option by the EU should be demanded. The qualification of a TEN-T project should depend on its contribution to improving mobility, removing bottlenecks and creating a single market. In view of the enormous long-term funding requirements to achieve these goals, mechanisms should be strengthened that contribute to a stronger prioritisation of projects along demand potential. For rail freight transport, this means that customers of transport services must be given even greater priority than in the past, that the European single wagon network must be kept efficient and that the new construction and maintenance of railway sidings must be further promoted. For road transport, a stronger demand orientation means that bottlenecks must be removed as a matter of priority, truck parking capacities massively increased and the requirements placed on the loading and tank infrastructure by the growing number of vehicles with alternative drive systems taken into account.

In addition, when implementing European infrastructure projects, care must be taken to ensure that the criteria for sustainable procurement set out in the European procurement directives are implemented. In particular, care must be taken to ensure that the best price/performance ratio is used in tenders (in the form of the MEAT - Most Economically Advantageous Tender Principle) and that the lowest price alone is not the decisive factor. A sustainable procurement policy enables the development of a reliable infrastructure and the best possible use of public funds.

The artery of European mobility: The road network The road network in the European Union remains the backbone of individual motorised mobility - both for rural areas and conurbations - and by far accounts for the largest share of freight transport. The maintenance and demand-driven expansion of the road network must be continued in order to meet the mobility needs of the population and maintain the competitiveness of European companies, which depend on efficient transport routes. Today, the free movement of goods, people and services is mainly exercised via the transport infrastructure. Restrictions and prohibitions therefore de facto mean restrictions on these freedoms, which can only be permissible in extreme exceptional situations, where adequate transport alternatives are available and where proportionality principles are observed. Today, the challenges of expanding road infrastructure also include expanding the infrastructure for electric mobility and refuelling infrastructures for alternative drives such as LNG and hydrogen. In addition, measures to combat the acute shortage of drivers need to be implemented. Here, for example, the development of physical roadside infrastructure, safe parking, sanitary facilities and overnight accommodation for professional drivers should be addressed. In addition, the attractiveness of the driving profession for men and women should in general be increased.

Building block for climate-friendly transport: Capacity expansion in the rail network Environmentally friendly rail plays an important role in achieving European climate protection targets.

Institutions and industry should jointly set the right course for the necessary expansion of the capacities of the European railway market. The European financial framework and the European transport budget to support the TEN-T projects as well as the Connecting Europe Facility ((CEF) II) will play a central role in the coming period 2021 - 2027. In addition to the content for CEF II and the associated funding quotas, the budget - which depends on the Multiannual Financial Framework (MFF) - must also be adequately equipped to meet the future challenges of infrastructure development and new construction within Europe. The "Horizon Europe" research and development programme and a needs-based continuation of shift2rail are also essential here. Of course, this does not only involve expansion and new construction, but also, with a view to increasing capacity, infrastructure support, in particular for the TEN-T core network with the European Train Control System (ETCS) - an essential technical

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component of the European Traffic Management System (ERTMS) and the nine European rail freight corridors.

The opportunities for the further development of trans-European transport policy should be exploited in view of the planned revisions of the Regulation on the guidelines for the development of the TransEuropean Transport Network (Regulation (EU) 1315/2013) and the Regulation on the creation of a European rail network for competitive freight (Regulation (EU) 913/2010). European funding instruments should be more flexible in future. It must also be taken into account that alternative routes must be equipped at the same technical and operational standard as the main lines in order to ensure sufficient resilience to disruptions and the smoothest possible operation of the entire network. This reduces long-distance bypasses and interruptions to travel, which have negative cascade effects on network capacity. In addition, conditions should be created to enable freight trains with a length of at least 740 metres to be built throughout Europe. In the future, European support for the expansion of railway infrastructure should take account of the fact that the introduction of the European Train Control System (ETCS) will mean that tasks previously performed by the infrastructure will now migrate to the rolling stock. The introduction of ETCS technology could be significantly accelerated by cleverly designed support for vehicle conversion. In addition, European rail freight transport must be adequately taken into account in country-specific train path capacities.

Earmarking of infrastructure charges The BDI advocates the earmarking of infrastructure charges and the establishment of closed financing cycles in the member states. National revenues generated in the transport sector should also be reinvested at Member State level in line with subsidiarity. In order to achieve ecological goals, measures that are adequate for the economy as a whole must be given absolute priority over politically motivated increases in mobility and transport costs. Concrete measures should always be reviewed to see to what extent they impose additional burdens on the transport sector and Europe as a business location and whether they can contribute to reducing emissions in the respective sector. Effects on the competitiveness of individual economic sectors must be taken into account in the global context.

Single European Transport Area A central overarching objective of European transport policy is to create a single European transport area. The BDI attaches top priority to the creation of a competitive, European transport single market and the intermodal use of transport modes across national borders. German industry therefore supports policy measures at European level to promote an efficient road transport market, to create a modern and interoperable railway network, to ensure suitable framework conditions for waterways and to complete the Single European Sky. Ensuring efficient road freight transport In order to improve competition in the European single market, it is essential to simplify and harmonise the legal framework, to reduce administrative hurdles and to interpret and implement as harmoniously as possible the European requirements for road freight transport. In cross-border and intra-European traffic, uniform standards are urgently needed with regard to a European toll system and digital control systems to ensure compliance with minimum wage requirements and driving and rest periods. The availability of the accompanying documents in all the languages of the countries being crossed is an anachronism. The rapid introduction of electronic transport documents should be pursued further.

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In the last legislative period, the EU Commission reviewed whether the market situation in road freight transport permits further market opening and the lifting of the existing cabotage restrictions. Instead of a liberalisation of road freight transport with a strong social component, only stricter rules for the posting of workers in the transport sector were proposed. BDI continues to advocate a complete liberalisation of cabotage in order to avoid empty runs and to contribute to an economic and environmentally friendly optimisation of transport processes in freight transport, which is already plagued by a shortage of drivers. The implementation of the proposals currently under consideration would lead to considerable supply bottlenecks in Europe. While there are still differences in competitive conditions between EU Member States, they also offer economic development opportunities for economically weaker EU Member States. Differentiation features here are not only different wage levels, but also, for example, different vehicle and energy tax rates on fuels. Therefore, 15 years after the EU's eastward enlargement began, challenges in harmonising competitive conditions must not be allowed to delay the consistent opening of the road freight transport market any further.

Innovative commercial vehicles can make an important contribution to increasing the efficiency of freight transport and transport chains in their field of application between logistics nodes. Longer vehicle combinations, such as those offered by the European Modular System (EMS), can achieve enormous CO2 savings. EMS vehicles are powerful vehicle combinations and usually have at least two additional axles to reduce the road load. On the market for heavy commercial vehicles, this technology offers a very CO2-efficient transport option per load unit. The possibility of crediting these systems as part of the revision of the CO2 regulation for heavy goods vehicles (Regulation (EU) 2019/1242) would represent further investment incentives in the transition phase to environmentally friendly road freight transport. Experience with long trucks in Germany has shown that fuel savings of between 15 and 25 percent can be achieved per tonne transported or per transport unit. CO2 emissions are also reduced in proportion to the reduction in fuel consumption. The efficiency of pre- and postcarriage in combined transport operations can also be significantly increased by the realisation of intermodal container traffic. This strengthens combined transport and relieves the burden on longdistance roads.

The directives on weights and measures, which are implemented very differently in the Member States, present companies in Europe with major challenges in ensuring smooth cross-border transport. At present, this deficit can only be absorbed through a large number of bilateral agreements. Uniform European regulations for EMS vehicles, for example, and for permissible weights in pre- and postcarriage in combined transport are preferable to this. The introduction of cross-border standards should be based on successful test operations, positive experiences in the Member States and the requirements of combined transport. Innovative commercial vehicle concepts capable of combined transport should therefore be admitted more quickly and without prejudice to cross-border European traffic so that it can fully develop its potential for reducing CO2 emissions.

However, it is also important that EU rules on the installation of certain systems in vehicles include sufficient lead times. This requires the timely publication of detailed technical provisions in the form of delegated or implementing acts in addition to the relevant legal requirements. It should also be borne in mind that trucks with superstructures often undergo a longer, multi-stage production process. The introduction of the new "smart tachograph" on 15 June 2019 was an example of inadequate lead times and the associated problems. Additional costs were incurred as a result of necessary retrofitting. In addition, there was a co-existence of different national transitional arrangements.

Ensuring a modern and interoperable rail network Rail freight transport is European and therefore requires regulation that further promotes the interoperability of European rail systems and the simplification of cross-border transport. The objective

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of a Single European Railway Area requires the effective enforcement of the existing regulatory acquis and the implementation of the rules on technical interoperability. A first step would be taken if the EU Commission were able to work towards a rapid and uniform implementation of the "Fourth Railway Pact" by the member states. For the successful implementation of the measures of the "Fourth Railway Package", a smooth start of the activities of the European Railway Agency (ERA) and its intensive cooperation with the national authorities is crucial. However, even then many nationally very different technical and personnel requirements still stand in the way of the goal of a railway single market. The regulatory framework must therefore be standardised and streamlined throughout Europe in order to simplify operating procedures. For this purpose, a common language and electronic freight documents valid throughout Europe are urgently required. The use of electronic freight transport information (eFTI) should not be subject to legal and mandatory use and paper documents should remain in place. In the course of a largely automated, ETCS-guided train operation, the existence of the line customer should also no longer be an indispensable prerequisite in the future.

One of the greatest challenges currently facing rail capacity expansion and interoperability is a consistent rollout of ERTMS/ETCS in Europe that is as synchronised as possible. This primarily involves the Europe-wide standardisation of the technological components and baselines of ETCS and also ensuring EU-wide harmonisation in the provision of sufficient frequencies for the railway mobile radio system "Future Railway Mobile Communication System (FRMCS)" and FRMCS migration. With ETCS technology, control and safety technology functions that are still fulfilled by the infrastructure today are transferred into the rail vehicles. As the modernisation of infrastructure and the modernisation of rolling stock are interdependent, incentives for vehicle upgrading are an instrument to make the benefits of the ETCS infrastructure more rapidly available.

As companies from countries with which there are no agreements on fair conditions of competition are increasingly pushing their way onto the European railway market, instruments should promptly be developed to prevent a reduction in capacity and innovation in the European railway industry as a result of a lack of level playing field when rolling stock and infrastructure are modernised. At the same time, interoperability in operational railway operations must be promoted through further technical innovations in the field of digitalisation and through intensified cooperation in the European railway sector with a view to efficient deployment of personnel. For example, IT tools for speech-to-speech translation can make an important contribution to the cross-border communication of train drivers. With regard to language competence requirements, the security of operations must have the highest priority - however, regulatory requirements in this regard must be tailored to requirements. Excessive requirements which are not relevant in rail operations practice should be avoided.

Further increases in efficiency and an improvement in reliability and safety in rail operations can be achieved through automated driving, but also through the widespread use of digital automatic couplings throughout Europe. Here, the harmonisation of brake and train control rules is also relevant with regard to rail freight transport. For this "increase" in interoperability within the European rail market and the implementation of technical innovations, concerted action by the rail transport companies together with the politicians is also indispensable. What is now needed is the development of a European master plan. When developing and implementing a European master plan, attention should also be paid to European harmonisation of measures.

Completion of the Single European Sky At EU level, the implementation of the Single European Sky (SES) is the largest climate protection project in European aviation. An efficiently organised single European airspace with modern technologies and harmonised processes could sustainably reduce the environmental and climate impact of aviation by up to 10 percent. At the same time, SES can create sufficient airspace capacity

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to meet the growing demand for air transport and thus improve air traffic reliability and punctuality. A digitised and better optimised European air safety area serves to ensure efficient air traffic in Europe on a permanent basis and benefits climate, passengers and freight. Mobility and the connection of Europe to the international air traffic network for passengers and cargo are essential for the success of the European economy.

The European regulatory framework for the Single European Sky needs to be revised in order to increase the environmental efficiency and capacity of airspace. In order to achieve the environmental objectives, the following issues, among others, must be addressed in the necessary readjustment of the regulatory system: Support the introduction of new technologies to facilitate air traffic control activities and improved cross-border cooperation between the various air navigation service providers, most of which are national. The optimisation of flight paths helps to save fuel and emissions. Improved flight management leads to an increase in capacity and an additional reduction in the environmental and climate impact of aviation. BDI is committed to cross-border cooperation between national air navigation service providers, more automation to support pilotage and more flexibility in the use of air traffic controllers. The EU institutions should actively support the further development of the regulatory framework for the Single European Sky. The Finnish Council Presidency in the second half of 2019 already laid the foundations and on 12 September 2019 a declaration on the next steps was adopted jointly by all stakeholders and the EU Commission. BDI calls on Member States and all organisations involved to contribute to the implementation of the goals of the declaration as quickly as possible.

To this end, the current regulatory framework of the Single European Sky should be fundamentally revised in order to better meet the various requirements of the aviation industry and to promote a cooperative approach. As part of the further development of effective regulation, air navigation service providers in Europe should be given the opportunity to create human resources that meet their needs by increasing flexibility in the use of controllers, simplifying the allocation of air traffic controller licences within Europe, creating a regulatory framework for sectorless flying in upper European airspace and consistently standardising technologies, interfaces, systems, training and processes.

Suitable framework conditions for waterways The transport of raw materials and bulk goods by waterway is an important pillar of international transport and secures the added value of European industry. In order to maintain the export strength of German industry in the future, an efficient, conceptually linked system of seaports, inland ports and waterways is crucial. In addition to demand-oriented investments in the maintenance and expansion of infrastructure in Europe, an optimisation of the maritime supply chain is also indispensable. It is also necessary to further develop the Water Framework Directive (WFD), which has proved its worth as an instrument of pan-European water law. Since 80 percent of water bodies in Europe will not achieve the objectives of the Water Framework Directive by 2027, an amendment of the WFD is needed to further develop inland navigation as an extremely environmentally friendly mode of transport. The WFD poses enormous challenges for the demand-oriented expansion of inland waterways. Plans with an overall positive effect on the water body can also be rejected in the licensing procedure due to the prohibition of deterioration and the lack of an integrated approach to the individual quality elements concerned, so that the objective of increasing the share of inland waterway transport in freight traffic as a mode of transport with particularly low CO2 emissions is unnecessarily complicated.

BDI is also committed to free and fair competition between and within ports. Competition is the only way to ensure that the shipping industry has high-quality, low-cost access to international maritime transport. Competition generates efficient solutions and must not be distorted by subsidies. At the same time, it is important to create long-term planning security for the often immense investments in infrastructure and superstructures of the ports. German and European environmental law, in particular

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water law, are of great importance for Germany as a business location. Ultimately, environmental law decides on the approval and operation of industrial plants and thus on the development of Germany as a business location with its inland waterways. It is also essential to secure the long-term future of shipping on the EU's most important inland waterway, the Rhine, in view of the danger of more frequent and heavier periods of low water due to climate change.

Digitalisation in transport The digitalisation of the European transport and logistics sector is an important building block on the way to an intelligent, efficient, safe and sustainable mobility of tomorrow. Modern technologies are indispensable to keep pace with the expected increase in mobility in the coming decades. The integration of existing digital tools should be pursued in a harmonised and interoperable way. For example, networking and a cloud connection can enable more efficient fleet management, through connectivity platooning can reduce the fuel consumption of trucks and make transport and roads safer.

In addition, new and innovative technologies should continue to be promoted. Many technologies are currently under development and must be effectively integrated into our transport systems. Technology neutrality should be an important guide in supporting innovation. Data is a prerequisite for networked and automated mobility. As fuel for networked mobility, they offer great potential for end customers, market participants and society.

Provision of digital infrastructure and test fields Intelligent connectivity and digitalisation of all modes of transport will play an increasingly important role in the future. The intermodal connectivity and automation of mobility is an important area of innovation in which the EU has the potential to become a world leader. In order to increase this potential, the expansion of cross-border broadband internet and mobile radio coverage along transport routes are essential. In addition, a European approach is needed to set up pilot plants and test fields across national borders, where connected and automated mobility solutions can be tested. In addition, a modern regulatory framework is needed to establish concrete projects. In particular, demarcated spaces (e.g. depots, airports, fields) offer great potential for connected and automated mobility solutions.

The rail transport sector requires an effective and future-oriented European radio spectrum policy that is tailored to the needs of the Member States' different regulations. With regard to the Future Railway Mobile Communication System (FRMCS), the successor for today's Global System for Mobile Communication (GSM-R), it is essential that the continuously increasing data throughput due to the progressive digitalisation of rail operations is made possible by sufficient frequency equipment. For rail transport in Europe, it is crucial that the FRMCS decision of the EU Commission at the end of 2020/beginning of 2021 takes into account the increased requirements of the European railways and thus creates the basis for the Europe-wide digitalisation of rail operations.

International harmonization of standards The timely introduction of new technologies into road traffic requires the creation of the necessary legal and infrastructural framework conditions. The smooth functioning of automated and networked vehicles requires a modern and efficient infrastructure. One cornerstone is the creation of a comprehensive connectivity among infrastructures for communication between vehicles and the environment. On the road infrastructure side, EU-wide compliance with certain quality and safety criteria must be ensured.

In addition, there is a need for enhanced cooperation to introduce European systems for the transfer of information on a transitional or permanent basis to the infrastructure. Legal and infrastructural

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framework conditions must be coordinated internationally with the aim of achieving the greatest possible harmonisation. The concrete regulatory work takes place directly between the states at UNECE level. The EU Commission coordinates the positions of the EU Member States. This coordination and a strong EU voice in the UNSECE are of great importance. It is also crucial to refrain from using own EU standards in favour of international solutions.

For rail freight transport, the international harmonisation of standards means the Europe-wide introduction of the Type 4 Digital Automatic Coupling, so that efficiency leaps in the rail system can be achieved through the automation of operational processes (increase in productivity / increase in competitiveness), safety in shunting operations can be further increased and the flexibilisation of rail freight transport can be promoted.

Reducing bureaucracy in road freight transport For cross-border road freight transport, the introduction of uniform standards for digital onboard systems throughout Europe offers great potential for reducing bureaucracy, minimising the effort involved in checks and ensuring that transport flows are as smooth as possible. These include digital standards for toll collection, the control of posting regulations and the control of driving times and rest periods. In particular, the digital tachograph and the introduction of electronic transport documents should be further promoted. The EU Commission's proposal to introduce electronic freight transport information is a first step in the right direction. The trialogue negotiations must ensure that national authorities are obliged to accept electronic cargo information. BDI however rejects an obligation for companies. If there is certainty that electronic documents will be accepted by public authorities across the EU, operators will make a natural shift towards electronic reporting. Where implementing and delegated acts are used as instruments for the subsequent definition of technical details, transparency and the involvement of industry in the process are crucial. IT experts from Member State authorities and stakeholders from all modes of transport should be involved as experts in defining the necessary information. Overall, the number of implementing and delegated acts should be kept limited in order to provide a realistic prospect of the impact of legislation. Existing systems for the use and transmission of freight information should be retained as far as possible or integrated into new solutions.

Urban Air Mobility Unmanned systems and air taxis can contribute to the environmentally friendly mobility mix of the future. In addition, opportunities are opening up in the field of civil drone technologies - especially for start-ups, small and medium-sized enterprises. Drones are a worldwide future market with the opportunity to create many jobs in industry and services worldwide. The drone economy needs a clear framework. Clear European rules are needed for the approval, operation and safe integration of drones into airspace. The objective must be to ensure that there are no disruptions in the vicinity of critical infrastructures such as power stations, railway stations or airports. It is therefore necessary to create a registration obligation and the mandatory installation of tamper-proof technologies for the traceability and restriction of the freedom of movement of drones in safety-relevant areas. Public authorities must assume their responsibility for the security of unmanned aerial vehicles. This requires central coordination of official activities at European and Member State level.

Sustainable mobility Climate protection is a central challenge. Industry is committed to the goals of the Paris Climate Agreement. Implementing these objectives will require massive private and public investment in transport over the next years. For an economically efficient implementation of climate protection and

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the avoidance of distortions of competition, an internationally coordinated approach is the right approach. More than ever, the EU's ambitions can only be fulfilled with a joint effort by politics, business and society in a pan-European context. Climate protection policy must not stop at the one-sided setting of targets. Ambitious climate targets can only be achieved if all available paths to climate-neutral mobility are used. From the point of view of the German economy, there is an urgent need for a technology neutral and market-oriented approach to reducing negative external effects from transport.

Increasing the efficiency of all modes of transport alone will not suffice to achieve the climate protection goals in transport. In a climate policy-optimised interaction of all modes of transport, the strengths of the individual modes must be harnessed for the overall transport system. Rail transport, which is already highly electrified today, can contribute its strength here, as can inland navigation, especially on long-distance routes and in the bundling of traffic flows. Against this background, it is essential to integrate the services of rail transport, especially rail freight transport, as well as all other modes of transport more closely into synchronised logistics processes and intermodal transport chains. The aim must be to strengthen electric drives and CO2-neutral fuels in freight transport as a whole and to promote sector coupling. German industry provides solutions for the challenges of the future.

Policymakers remain called upon to gear the framework conditions towards innovation. New technologies for vehicle drives and traffic management systems as well as efficient infrastructures must be developed.

Promotion of alternative fuels and drives The ramp-up of alternative drives and the use of alternative fuels are the most efficient levers for achieving th EU’s climate protection goals. Increases in efficiency and modalshift contribute only 25 percent to achieving climate protection targets. The importance of alternative fuels and drives for all modes of transport will therefore continue to grow rapidly. The use of electric and hybrid drives for passenger and freight traffic on the roads will continue to grow. This applies initially to urban traffic and commercial vehicles in delivery and distribution traffic. CO2-neutral fuels, i.e. synthetic and biogenic fuels, are a viable solution for low-carbon mobility over long distances, especially in road freight transport and for air and sea transport. In order to raise the additional efficiency potential of these technologies, consistent and technology neutral funding of research and development for all alternative drives and fuels is needed. The market penetration of already available technologies requires the rapid development of sufficient charging and refuelling infrastructure across Europe and financial incentives for the use of all available technologies to reduce CO2 in road transport. These include, for example, investments in overhead lines along motorways (e-Highways) between logistics hubs and ports as well as the expansion of the refuelling infrastructure, for example for CNG/LNG as well as hydrogen. To date, the EU member states have in no way fulfilled the requirements of the Directive on the deployment of alternative fuels infrastructure (Directive 2014/94/EC). This should be addressed in the upcoming revision of the Directive.

During the last legislative period, the EU Commission for the first time adopted a CO2 fleet regulation for new heavy duty vehicles (Regulation (EU) 2019/1242) and updated, stricter standards for passenger cars and light commercial vehicles (Regulation (EU) 2019/631). These standards are extremely ambitious and reach the limits of technical feasibility, especially in the area of heavy duty vehicles. Here, as well, all technology paths should be used to reduce CO2 emissions. In both segments, the targets can only be achieved through massive electrification of road traffic. However, technologies for battery-electric or fuel-cell commercial vehicles that can also cover long distances are still at an early stage of development. Therefore, synthetic fuels could build an important bridge in the transition to low-carbon mobility. BDI is committed to the introduction of an incentive system for the use of synthetic fuels as part of the revision of the CO2 regulation for passenger cars and heavy duty vehicles. In general, it must be ensured that all innovations aimed at reducing CO2 emissions, for example on the material side, can be taken into account in the fleet regulation. In this context, a

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common methodology for the assessment and reporting of CO2 emissions from vehicles throughout their life cycle (Life Cycle Assessment, LCA) offers the possibility to collect the full CO2 saving potential in the mobility sector. For example, an LCA reporting system could create additional incentives for cost-efficient emission savings as a supplement to existing CO2 credit options (e.g. eco-innovations) that go beyond the end-of-pipe approach.

A market ramp-up of synthetic fuels is also of great importance for economy and society beyond heavy goods traffic. The German industry also wants to play a leading role in the development of new technologies and measures for environmental and climate protection in aviation, particularly with the aim of CO2-neutral aircraft operation. In order to achieve the ambitious goal of CO2-neutral flying, the use of alternative sustainable fuels - especially synthetic power-to-liquid (PtL)-fuels - is urgently needed. Here the development and market penetration of PtL-fuels must be promoted. To this end, the energy industry, plant manufacturers, the aviation industry, air transport companies, the EU and member states must define and jointly implement a PtL roadmap for the construction of appropriate production facilities and the provision of regenerative fuel at competitive prices.

International solutions for CO2 reduction The international dimension of European transport policy has a high priority. An essential task is to further promote the reciprocal opening of international markets to free competition and environmentally friendly transport technologies within the framework of international negotiations. An international regulatory approach should be sought to reduce CO2 emissions in the transport sector. In the automotive sector, for example, the CO2 standards, emission limits and test methods differ in the regional markets. In Europe, Japan and the USA this has led to different technical solutions and consequently to different certification procedures. This increases administrative burden, creates additional costs for companies and make it more difficult for them to introduce new, lower-emission vehicles onto the market. Instead of taking the lead, the EU should use its influence to work towards harmonisation of existing systems at global level. With regard to electrified rail transport, it should be borne in mind that railways are already fully integrated into the European emissions trading system via the energy sector. Electric rail transport has to pay the full cost of the CO2 emissions it causes. As far as shipping is concerned, the BDI welcomes the EU's approach to achieving the desired reductions in CO2 and air pollutant emissions within the framework of the International Maritime Organisation (IMO).

The strongly international character of shipping requires a global approach to mitigate negative externalities while ensuring a level playing field in international competition.

In aviation, the market-based European Emissions Trading Scheme (EU ETS) is the most appropriate solution to limit and reduce CO2 emissions and to price CO2 in aviation. Other national or European approaches, such as taxes, levies or even bans, only promote circumvention effects, including additional environmental pollution through detours or overly heavy loading/fuelling. Airlines are already financing emissions trading today by purchasing the necessary emission certificates (German airlines alone have to purchase CO2 certificates for 62 percent of their emissions). With their inclusion in the EU ETS, German and European aviation companies are helping to reduce CO2 emissions by 43% by 2030 compared with 2005 in the economic sectors that are included in emissions trading. The EU's support for the introduction of the global climate protection instrument CORSIA is to be welcomed. Due to the international nature of air traffic, only globally coordinated measures are effective. This is the only way to make sustainable solutions possible and to achieve a measurable success for climate protection.

The decision of the International Civil Aviation Organisations (ICAO) must now be consistently implemented. This system will then be used to offset growth-related emissions from global air traffic and makes the international air traffic growth CO2-neutral. The system is also financed by airlines

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Future of EU Transport Policy

through the purchase of corresponding compensation certificates. CORSIA should be the only climate protection instrument for international air traffic. For this reason, BDI is believes that emissions from flights between two European countries should be removed from the European emissions trading system with the start of CORSIA. A continuation of EU ETS for international flights contradicts the international consensus. The double burden on European air transport would lead to a massive distortion of competition vis-Ă -vis non-European airlines. The EU Parliament is called upon to position itself clearly so that CORSIA replaces the EU ETS for intra-Community flights. The EU must also work to ensure that the still hesitant countries (including China, Russia, India and Brazil) can be persuaded to join this CO2 compensation system as early as 2021.

Balancing environmental protection and international competitiveness International air transport is a good example of the drastic increase in competition in recent years. In view of the upcoming challenges in climate and environmental protection, suitable ways and instruments must be developed for all modes of transport to ensure equal and fair competitive conditions at international level. National attempts are the wrong way. In particular, climate policy regulations through national taxes, levies or bans are ecologically and economically counterproductive.

Such measures do not reduce CO2 emissions, but merely shift them to other regions, where these levies are not demanded. This goes at the expense of the respective domestic industry. Particularly in aviation, only global solutions are effective in terms of climate and environmental policy. Local interventions do not reduce air traffic, but only shift it to other regions. The existing night flight restrictions at airports are an important prerequisite for the acceptance of air traffic. In order to avoid competitive disadvantages and to maintain international connectivity, existing operating hours must however be guaranteed. BDI strongly opposes interventions in existing operating licences at airports.

Operating licences must be sustainable in the long term in order to ensure economic predictability for all. The European economy is urgently dependent on efficient logistics chains at night for air, road and rail transport. For air transport, the "balanced approach" of ICAO in the sense of EU Regulation 598/2014 must continue to be applied, i.e. operating restrictions remain permissible only if all other measures have been exhausted and further measures would be absolutely necessary.

Internalisation of external costs In principle, it is right to provide economic incentives for ecologically sustainable behaviour and the introduction of innovative technologies. However, BDI is critical towards an obligatory and generalised introduction of a charge for external costs. The instrument of internalising external effects is not only problematic if it imposes a greater burden on a particular mode of transport, it also raises considerable methodological questions when it comes to quantifying costs. In addition, congestion costs, for example, are already borne by users today in the form of time losses. A new charge, e.g. for tolls, would therefore represent a double charge. BDI therefore advocates a more differentiated assessment of the principle of internalising external costs. The aim must therefore be to sustainably reduce negative externalities through intelligent traffic management and the provision of alternative mobility services rather than pricing them even further. This requires more effective and efficient instruments. Different instruments may be optimal for different environmental policy objectives. A "one size fits all" approach may not meet the specific challenges. Instead of following a blanket and obligatory approach of internalisation, BDI calls for an open discussion on suitable instruments, whereby existing successful instruments should also be developed further. In this discussion it is also important to consider the contribution of existing taxes and duties to the internalisation of external costs.

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Future of EU Transport Policy

Imprint Federation of German Industry (BDI) Breite StraĂ&#x;e 29, 10178 Berlin, Germany www.bdi.eu T: +49 30 2028-0 Editing Mrs Jessica Przybylski Senior Manager BDI/BDA The German Business Representation T: +32 2 7921009 j.przybylski@bdi.eu

BDI document number: D 1060

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