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Graphic element Research > Growth > Research projects > Mobility and intermodality projects > Is transport too cheap?
Graphic element Is transport too cheap?

The price of transport should reflect the costs it imposes on society, such as environmental damage, congestion, accidents, and wear and tear to infrastructure. For this purpose, new methods are needed to calculate and implement appropriate charges.

The EU has financed a number of research projects aimed at providing a basis for pricing reform. The projects show that optimal pricing could reduce transport volumes in urban areas by 7-14% and improve traffic speeds by 30-70% during peak hours.

Pricing of transport

In principle, transport prices should make users pay for the additional costs they cause, including costs to society. Research has shown that this concept can be translated into practical pricing or taxation measures using existing technology. Moreover, simple "second best" approaches such as cordon tolls for entering a congested area can achieve nearly as much as a theoretically optimal solution. The major trend will be a move to more variable charges, for example differentiated between peak and off-peak periods and levied at the point of use.

Case studies show that pricing reform may result in price reductions for some modes as well as price rises for some others. For example, inter-urban passenger travel in uncongested conditions, by road or rail, is typically over-priced at present. For inter-urban freight transport, evidence suggests that there is often significant under-charging for both road and rail. Finally, urban transport by means of road-based modes is typically dramatically under-charged, particularly in congested conditions.

The need to reform policy on charging is highlighted in the Policy Guidelines of the White Paper on a common transport policy, recently published by the Commission. This document proposes that guidelines are developed to align the principles for charging for infrastructure use between modes.

Public acceptance

One of the major barriers to radical changes in prices could be political and public acceptance. Surveys showed that, to increase acceptability, the reform of pricing should be staged, starting with simple systems with low charge levels. In addition the revenue should be earmarked for public transport, or returned to the local population in some other way and compensating measures should be considered for social groups that are disadvantaged by the pricing scheme.

Therefore, among other projects on pricing, the Commission is funding further lessons on the practical implementation of pricing measures are needed before pricing measures gain the necessary social and political acceptance. Therefore, the Commission is funding a major demonstration project in eight cities, through to the year 2004. This will test a range of road pricing concepts and technologies as part of a wider strategy to combat congestion and improve the environment.

  More information

More information on EU research results on the pricing of transport is available on the European Commission's web site:


  Further Information and Notes to Editors


The transport research programme forms part of the Fourth Framework Programme, which set out the activities to be launched by the European Community in the field of Research and Technological Development (RTD) between 1994 and 1998.

The transport programme focused on helping to achieve the objectives of the Community's Common Transport Policy (CTP), namely efficient and cost-effective transport networks for goods and passengers while minimising both energy consumption and the social and environmental impacts of transport. The Commission has contributed ECU 270 million Euro to the programme, with further funding (often 50%) coming from project partners and their sponsors.

The transport programme has financed around 280 projects within seven main areas of research: strategic research; rail transport; air transport; waterborne transport; road transport; urban transport; and integrated transport chains. The programme was set up by the former DGVII (Transport), and is now managed by the Directorate-General for Energy and Transport. Altogether 46 projects and concerted actions were commissioned on research into the economic aspects of transport, with a total EU contribution of 73 million Euro.
Under the Fifth Framework Programme, which started up in 1999, transport policy research is based around themes rather than transport modes. The work is covered by the Key Action "Sustainable Mobility and Intermodality", and the European Commission expects to contribute 370 million Euro.
Other transport-related RTD is carried out elsewhere in the Fifth Framework programme - covering such topics as aeronautics, urban development, and new vehicle and information technologies.

The transport programme can only achieve its objectives if project results are effectively disseminated to people who can use them - notably policy-makers, planners, industry and the research community.

Therefore the Commission has funded a project specifically aimed at disseminating information on the transport programme as a whole, supplementing the more limited efforts of each project. The aim is to use cost-effective means of communication to specific audiences in the EU and in Central and Eastern Europe.

The project (called EXTRA, EXploitation of TRAnsport research) has developed an Internet site (, opened an Information Bureau and provides complementary activities (newsletters, events) to raise awareness of the programme.

The Information Bureau can be contacted by telephone:
+ 44 (0) 1235 46 42 46,
by fax: + 44 (0) 1235 43 65 51
or by e-mail to:

It provides printed copies of information on the web site, as well as helping with more general enquiries on transport research. A handy web site user guide is provided on request.

Users are encouraged to register with the Bureau to receive monthly e-mail bulletins announcing the latest information on the web.

The next few months should see a large increase in the volume of results. Analyses will be provided on the contribution of research in developing key policy areas.

See also
Website reveals research results on sustainable mobility
Pricing of transport
Public acceptance
More information
Further Information and Notes to Editors

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