Eco-Tolls and the European Green Deal: A New Era for Logistics

Climate change is a pressing challenge on a global scale, calling for immediate action and consistent efforts. Approved in 2020, the European Green Deal set the course for the EU to become a modern, resource-efficient, and competitive economy by achieving net-zero greenhouse gas emissions by 2050. The Eco-Toll system is a key mechanism within this framework, pushing for the widespread adoption of cleaner technologies in the logistics sector.?

While logistics companies face immediate challenges related to increased costs and operational adjustments, industry leaders also acknowledge these changes as a clear path toward achieving broader environmental goals and promoting sustainable practices within the transportation industry. As the adoption of the new system spreads throughout Europe, varied challenges in implementation across different countries call for reflection and a collaborative approach.?

Transition to CO?-Based Tolling in EU?

The European Parliament approved changes to the rules on charging heavy goods vehicles (HGVs) for road use on 17 February 20221. This approach is designed to accelerate the adoption of eco-friendly vehicles, as trucks and light commercial vehicles with lower emissions will face reduced toll fees, and those that pollute more will see higher charges. Member states were given two years to transpose these rules into national law - a deadline that passed on 17 February 2024.?

Germany, Austria, the Czech Republic, and Hungary already have updated systems in place, charging HVGs based on the distance traveled and emissions produced. Sweden launched its own system earlier this year, and Denmark is set to follow by January 2025. By 2026, emissions-based toll systems - tailored to reflect both distance traveled and CO? output - are expected to be in place in a total of 17 EU member states. This shift will affect roughly 62% of EU truck activity, measured in tonne-kilometres2.?

As a major part of the EU transport network, France presents an interesting exception in this timeline. Although the French government has published a decree linking HGV tolls to CO? emissions, the new regulation will not apply until the current motorway concessions expire - 2031 at the earliest3. This delay is primarily due to the structure of France's motorway system, which is largely operated by private companies.?

Germany as a Trendsetter in CO2-Based Tolling? ?

Widely recognized as a central hub for European logistics, Germany has taken a leading role in the adoption of CO2-based tolling systems. With its robust transport infrastructure and significant share of cross-border freight, Germany set a precedent for the EU, showcasing both the challenges and opportunities of emissions-based tolling.?

On 1 December 2023, Germany introduced the new tolling system for commercial vehicles over 7.5 tons4. Tolls are based on four parameters: infrastructure costs, air pollution, noise pollution, and CO? emissions. By July 2024, the system expanded to cover vehicles over 3.5 tons as well. Zero-emission electric and hydrogen vehicles remain exempt from tolls until the end of 2025, with a reduced rate starting in 2026. Furthermore, benefits for vehicles with alternative, climate-friendly technologies are extended until 2028, aligning with Germany’s long-term decarbonization goals.?

As a result of this change, federal roads and motorways now see toll rates as high as €0.34 per kilometer for a typical 18-tonne, 5-axle heavy goods vehicle (HGV) - an 80% increase from prior rates5. For example, a single trip from the Netherlands to Poland, covering 700 km through Germany, could now cost an additional €110 in tolls under the new system.

Navigating such cost increases causes a strategic challenge to logistics companies. For cross-border operations, these tolls intensify the financial strain on routes traversing Germany, whereas domestically, small to medium-sized transport businesses whose fleets rely heavily on older, higher-emission vehicles will also face significant struggles. At the same time, Germany’s reforms incentivize investment in zero-emission vehicles (ZEVs), contributing to an industry-wide shift toward sustainable transport. This is expected to drive innovation in vehicle technology, with projections that 50% of new HGV sales will be electric by 2030 and 75% by 2040.?

Ylva Dalerstedt, Segment Manager for Long Haul at Volvo Trucks, views these changes positively: "Overall, this is a great reform for Europe and the truck industry as a whole. For the first time, truck businesses will be encouraged to find better solutions to lower CO2 emissions, and truck manufacturers will have a clear framework to work towards to provide these solutions. And that is what is needed to aid the shift to zero emissions."6?

Germany’s toll increases also underscore the broader economic and operational challenges of decarbonizing road transport. The higher toll rates will likely ripple through industries reliant on road freight, including retail, manufacturing, e-commerce, and agriculture, pushing businesses to reassess their supply chain strategies. For some, this might mean increased reliance on intermodal transport options, such as rail or waterway freight, to mitigate costs.?

EU Fleet and Emissions Today?

The current state of trucks on EU roads reflects a diverse mix of emission classes and vehicle ages, with significant implications for operational costs and environmental impact. According to ACEA data, many trucks still fall under older emission classes, particularly Euro 5 and below. The average age of trucks in the EU is 14,2 years7, which means a substantial portion of the fleet is older and less efficient. This aging fleet correlates with higher operational costs, as older vehicles tend to be more expensive to maintain, less reliable, and subject to higher tolls under new emissions-based systems.?

As the new CO2-based tolling systems become the new standard across the EU, companies that do not assess their vehicles for potential reclassification into lower CO? classes will automatically incur the highest toll rates.??

This is what vehicle categorization looks like under the new system:??

• Class 1: Vehicles not belonging to any other class.?
• Class 2: Emissions 5-8% below the emissions reduction trajectory.?
• Class 3: Emissions more than 8% below the trajectory but not in lower classes.?
• Class 4 (Low Emission Vehicles - LEV): Emissions more than 50% below reference CO? emissions.?
• Class 5 (Zero Emission Vehicles - ZEV): Vehicles without an engine or with emissions less than 1 gCO?/kWh or km.?

To qualify for a lower toll rate in Classes 2 to 5, companies must provide specific data regarding their vehicles’ CO2 emissions and other characteristics. This includes engine specifications, registration dates, maximum laden mass (F1 value), engine power in kilowatts, cabin type, vehicle classification (e.g., Tractor or Rigid Lorry), axle configuration, and CO? emissions per tonne-kilometer.?

The logistics sector has already seen a troubling increase in bankruptcies in recently, driven by various factors including heightened fuel prices, labor shortages, increasing costs, and now the introduction of emissions-based tolls. Transparent communication is crucial for service providers and their customers to navigate these changes effectively. Companies that fail to act risk being grouped in the highest tariff category, which could significantly impact their bottom line as operational costs rise due to increased toll fees associated with older vehicles.?

To address these challenges, there is a growing need for stakeholders across the supply chain to engage in co-creation. This collaborative approach can help share the burden of decarbonization efforts and foster innovative solutions that enhance efficiency and sustainability.??

"Decarbonizing the transport sector is a crucial goal, but it comes with significant challenges for logistics companies," Tomasz Weber, Head of Corporate Communciations at Girteka Group, has said. "To meet them, we need support and cooperation from all stakeholders. Our fleet of over 6,000 trucks has an average age of just 2 years, ensuring we operate with the most fuel-efficient and environmentally friendly vehicles available. However, the transition to even greener operations requires substantial investment and adaptation. We believe that with the right incentives and a cocreation approach across the EU, logistics companies can turn these challenges into opportunities for innovation and sustainable growth."?

Companies like Girteka are already setting examples of leadership and innovation, showcasing the potential of co-creation on multiple levels:?

• Collaboration with customers to plan operations and provide logistics solutions tailored to their needs.?

• Sustainability partnerships with customers and vehicle manufacturers to implement sustainable transportation solutions, such as battery electric vehicles (BEVs).?

• Sharing data and insights from ongoing BEV operations with partners.?

• Nurturing feedback loops with manufacturers to improve electric truck technology.?

• Developing and increasing intermodal transports.?

• Offering integrated solutions that combine different sustainable transport modes, like BEVs and intermodal rail.?

• Fostering cross-border team collaboration.?

By working together, customers, logistics providers and carriers, and manufacturers can develop strategies that mitigate costs while complying with new regulations.?

Compliance Across EU Member States?

The implementation of eco-tolls across EU member states has revealed significant disparities in readiness, particularly evident in countries like Bulgaria and Poland. Both nations have struggled to align their national energy and climate plans (NECPs) with EU directives aimed at reducing greenhouse gas emissions.?

The lag in compliance hinders collective progress toward EU climate goals. Countries that delay implementing CO2-based tolls also risk losing out on potential funding and investments aimed at modernizing their transportation infrastructure. As seen in the case of Poland, where the logistics sector is under pressure from rising operational costs, non-compliance further intensifies the financial strain on companies already grappling with tight profit margins. This inconsistency in the adoption of CO2-based tolling across the EU can also lead to confusion among logistics providers operating across borders, as they must navigate differing regulations and toll structures.?

The concept of green corridors is gaining traction as a potential solution to these issues. Green corridors would facilitate the movement of goods through designated routes that prioritize low-emission vehicles and streamline compliance with eco-toll regulations. By creating a network of routes specifically designed for greener transportation, stakeholders can enhance efficiency while reducing overall emissions.?

Digitalization and Other Measures for Smoother Implementation of CO2-Based Tolling?

The transition to eco-toll systems across Europe has boosted the adaptation of various digital systems aimed at enhancing the user experience, streamlining operations, and facilitating the collection and processing of toll payments. Some of the key features of such solutions include automatic payments, mobile applications, telematics solutions that provide real-time data on vehicle routes and emissions, professional mapping tools integrated with transportation management systems, and so on.?

Overall, the necessity to standardize digital toll systems across EU member states is a unique opportunity to reimagine the system by not only focusing on efficiency and compliance but also addressing evolving user expectations and implementing technological innovation. For example, countries like the Netherlands, Denmark, and Romania are exploring the integration of satellite-based tolling systems, which could pave the way for a unified approach9. Artificial Intelligence (AI) also has immense potential to simplify and support the implementation of eco-toll systems by enhancing data analysis and decision-making processes. AI algorithms can analyze vast amounts of data from telematics systems to predict vehicle emissions based on real-time driving conditions and patterns. Moreover, AI-driven predictive analytics can assist in forecasting toll costs based on historical data and anticipated changes in regulations.?

Future Perspectives and Challenges?

By linking road charges to vehicle emissions, the Eco-Toll system aims to drive the adoption of zero-emission heavy-duty vehicles, incentivize cleaner technologies, and align the industry with the European Green Deal’s ambitious climate targets. But in truth, the ripple effects of eco-tolling will extend far beyond logistics, affecting supply chains across retail, manufacturing, and agriculture. Even more importantly, the costs associated with these new tolling systems are primarily shouldered by logistics and freight operations, potentially impacting their competitiveness and operational efficiency.?

To address these challenges and strike a balance between environmental goals and the economic realities faced by the logistics sector, a more consistent and harmonized approach across the EU is necessary. This aligns with CLECAT's strategic priorities, which emphasize the need to "ensure harmonized cross-border road freight transport" and "provide a single window environment for business and harmonized regulations"10.?

In addition, logistics companies must take a proactive stance on the matter, engaging with government initiatives and implementing strategic steps to ensure a sustainable shift from an economic perspective. As Tomasz Weber states: "More upward pressure on road tolls in Europe is to be expected in the near future. The pressure to decarbonise transport is immense and there is no escaping from it. Meeting CO2 reduction targets is becoming a priority, regardless of company size. Hence, every company will have to factor environmental costs into its operations. For transport companies, this means a change in their approach. The potential of digitalization and an appropriate fleet development strategy will play a key role in their competitiveness in an already very competitive market."?