Monday, 29 May 2023

Consultation on Cambridge's Sustainable Travel Zone reveals widespread opposition

I wrote a couple of months ago about how poorly plans for a blunt congestion charge for Cambridge (UK) were going, in terms of public response, and this seems to be continuing following publication of the results of formal public consultation into what is being called a "Sustainable Travel Zone".

The Sustainable Travel Zone would be a single area charge (£5 for cars but much more for trucks) across virtually all of metropolitan Cambridge, which would operate 12 hours a day weekdays only. It would legally be a congestion charge, and would effectively emulate London, except for its scale of operation. Whilst the London congestion charge only affects a tiny proportion of greater London (separate from the Ultra Low Emission Zone), the Cambridge Sustainable Travel Zone would affect all of Cambridge. Why? It would appear to be to ensure that it would raise enough money to pay for the significant increase in bus services.

Rarely have congestion pricing schemes ever been publicly accepted if sold on the basis that it is about raising money (effectively a sophisticated form of tax) rather than reducing congestion. The record in the UK is that several cities have attempted to progress congestion charging on the basis that it would raise a lot of money for public transport (see Manchester and Edinburgh), and been rejected by the public.

By contrast, congestion pricing has been successfully advanced in Stockholm because it was about reducing congestion, whereas it saw considerable opposition in Gothenburg because that is about raising revenue. It is difficult, although not impossible to get support for such a scheme as a revenue raising instrument, but it would appear to be that people in Cambridge are not warm to the idea.

Cambridge News reports that although 70% of the population supported the transport improvements, 58% opposed the Sustainable Travel Zone/congestion charge. Only 34% supported the Sustainable Travel Zone as proposed. 

Another report breaks down the results in more detail:

61% of those aged 16-24 who responded to the consultation were in favour of the charge

64% of those aged 55-64 opposed the charge.

Of those living within the proposed zone boundary, 49% were opposed and 46% in favour.

Those living outside the boundary were 60% opposed, 32% in favour.

Key concerns expressed were those wanting more exemptions, thinking the £5 charge was too high and thinking residents should have an exemption.  Many wanted Addenbrooke Hospital excluded from the zone. 

So what now?

29 June is the date when the Greater Cambridge Partnership meets to consider what to do next. It could just plough on, but it may be better to think about some of the ideas I wrote about before on how to phase in charging.

  1. Just introduce it in the AM peak only at first, in part to demonstrate the effects, but also to encourage some time-of-day shift in travel (which many would rather do compared to shifting mode). It would also give some idea of the elasticity of demand in the AM peak for driving to better inform forecasts for revenue. Sure it won't be enough revenue longer term, but then the improved public transport package can be focused on the peaks instead. Expand it to the PM peak later, as that would capture more traffic likely to mode-shift, rather than inter-peak traffic. 
  2. Replace the blunt area charge with two cordons.  One in the city centre (whether it is a tight city centre or one bounded by the effective ring roads of the A1303, A1334, A603), one at the proposed outer boundary.  This means people won't be charged for simply moving their cars short distances, and will focus attention on entering Cambridge and then central Cambridge. 
  3. Have a shoulder charge (at half price) for the first and last half hour to encourage time of day shift and provide more options for motorists.
  4. Dedicate some of the net revenues to some improve road infrastructure this means fixing substandard intersections, and although there will be resistance to using the money for maintenance (as it would reduce funding from other sources), some of what motorists pay should benefit them.
It is plausible that the full Cambridge scheme could be introduced over time, but any combination of the above ideas can provide a pathway of phasing it in. Say an inner cordon could operate 0700-1900 (with a half hour shoulder fee), but the outer cordon only 0700-1000 and 1600-1900.  


Thursday, 25 May 2023

Denmark implementing heavy vehicle RUC from 2025 - but not without protest

Initial Danish heavy vehicle charge network

From 2025 Denmark will be the 12th jurisdiction in Europe to have some form of distance-based road user charging (RUC) (or tolls) for heavy vehicles.  Some may argue about the definition (as two of these are essentially network tolls using tolling technology) but the others are Iceland, Switzerland, Germany, Austria, Czechia, Slovakia, Poland, Hungary, Belgium, Bulgaria and Russia.

Key elements of the new scheme, called the "Kilometer-based toll":

  • On 1 January 2025 all heavy vehicles with a Gross Vehicle Weight of 12 tonnes or above will have to pay per-kilometre road user charges based on the vehicle's weight and emissions rating. This will apply on the national road network and other main roads, including public roads in "environmental zones". This is a network of around 7,300 km (around 9.7% of public roads, but the roads that carry most of the freight traffic).
  • On 1 January 2027 the charge will be extended to all heavy  vehicles of 3.5-12 tonnes Gross Vehicle Weight as well.
  • On 1 January 2028 the charge will apply to all public roads in Denmark (a network of around 75,000km).
  • On 1 January 2025 Denmark will withdraw from the Eurovignette scheme, which applies to trucks 12 tonnes and above, and requires trucks to prepay a set number of days they are driving on the national road network (trucks can buy an annual Eurovignette).

Average charges will be DKK1.2 per km in 2030 (US$0.17 per km). 

The policy focus is on reducing CO2 emissions. It will apply to all trucks with a gross vehicle weight of 12 tonnes or more. It will be expanded to heavy vehicles of 3.5 tonnes and above from 1 January 2027.

It is being introduced alongside multiple complementary measures:

  • Rules on weights and dimensions for trucks on Danish roads are to be eased, enabling larger and heavier trucks to operate
  • Improvements to rail freight in Denmark including a loans scheme for rail freight operators.
There will be a single rate geographically across all major roads in Denmark (it will not apply to local roads), with a higher rate for cities with low emission zones. The charge will automatically collect higher fees for the low emission zones.  There will be no VAT as it is legally a tax.


Only the following heavy vehicles will be exempt:
  • National armed forces and emergency services vehicles;
  • Vehicles adapted and used exclusively for fire and rescue;
  • Police vehicles; and
  • Vehicles belonging to the "road services" (believed to be maintenance/operations)


Unlike almost all other implementation of heavy vehicle RUC anywhere, Denmark is taking a technology neutral approach to how data is measured and collected from heavy vehicles to enable collection of the charge.  Given the number of similar schemes in Europe, it called for accreditation to be a certified service provider, meaning that as long as a private commercial toll/RUC service provider could meet the performance requirements specified, it could be certified to collect the charge.  Denmark has received six application to do so after the deadline of 30 April (to enable initial operation) from the following firms:

  • Brobizz (Denmark)
  • SkyttelPASS A/S (Norway)
  • Telepass S.p.A. (Italy)
  • tolltickets GmbH (Germany)
  • Toll4Europe GmbH (Germany)
  • ØresundPAY (Sweden)
This does not necessarily mean all or any of these operators will be certified, but indicates Denmark has taken an open system approach in encouraging competition in delivering RUC services to heavy vehicles in the country. 

The project is being led by the Danish Road Directorate, but the contract for establishing it was granted to 
Sund & Bælt, a Danish government enterprise responsible for some major infrastructure projects such as the Øresund Crossing between Denmark and Sweden. 

The remuneration of EETS providers will be done under two categories:
  • A fixed percentage of the revenue collected (1.5% for the calendar year 2025 and 2% for the subsequent year)
  • A fee based on the number of active OBEs (On Board Equipment). An active OBE is an OBE that has been provided by the EETS Provider and installed in a vehicle registered with the EETS Provider, and for which circulation on the tolled road network has been detected at least once for the respective calendar month. (DKK60 per month (US$8.66) for the calendar year 2025, down to DKK15 per month the following year (US$2.17). 
Consider if a Class 5 above 32 tonne truck travelled 100,000km in a year (outside LEZs), it would generate DKK20,000 (US$2885) in gross revenue, so the EETS provider in the first year would obtain DKK300+DKK720=DKK1020 (US$147). So volumes of business matter (and it also encourages EETS providers to target the higher emitting vehicles that generate them more revenue).

Number of vehicles and kilometres driven

Number of trucks registered in Denmark in 2021

Initial installation will be for 35,500 locally registered vehicles, but the foreign vehicles are not included in this.  

Distance driven on Danish roads by heavy vehicles

The total distance to be driven by vehicles subject to the RUC is depicted above.

User experience

It is expected that regular users of the Danish road network will have a contract with an EETS provider (European Electronic Tolling Service) which will supply or use telematics installed in the vehicle.  The vehicle owner will pay the EETS provider, which will then pay the charges to the government.  Denmark is neutral about whether the EETS provider uses On Board Units already installed on trucks, new ones or uses the telematics system already built into some trucks.

Occasional users of the network (visiting trucks from foreign countries that infrequently enter Denmark will be able to buy a single trip ticket for a specific journey online, through the website of the "toll charger" (which is Sund & Bælt). 


The rates table applying from 1 January 2025 is seen below, it differentiates between three weight categories and five emissions categories with higher rates in low emission zones.

Denmark heavy vehicle RUC charge table

As can be seen rates range from DKK0.20 to DKK2.03 per kilometre (US$0.03 and US$0.29 per kilometre or US$0.048-US$0.47 per mile).  Note this replaces a rate structure of the Eurovignette below:

Eurovignette in DKK

This starts at DKK89 for one day on the network (US$12.85) to up to DK1755 for one year (US$2534), which depending on how much distance a truck travels on the network will determine if it is going to be paying more or less with the new kilometre-based RUC.


The burden on Danish business is estimated to be DKK2.5b (US$370 million) offset by DKK1b (US$140m) due to the measures to enable larger trucks on the roads, so the net impact will be US$230m per annum by 2030.

It is estimated to reduce emissions by 0.4 million tonnes by 2030, but with 0.3 million tonnes coming from the road user charge and 0.1 million tonnes by allowing larger trucks on the network.

Summary leaflet here


An organised opposition group "the Road Tax Committee" has been set up to oppose the proposal and it has been engaging in protests by blockading roads.  Some of the trucking industry is calling for a delay to implementation until 2030, largely so there are more lower and zero emission trucks available to purchase, so they would not face the highest charges.  The "Road Tax Committee" has since dissolved, but protests and opposition continue.

All of this indicates how important it is to get some support from the trucking industry before introducing charge that are, by and large, likely to charge many of them much more than they do now.

It seems challenging to introduce any form of road user charging without intending to ensure that net revenues will be used to, at least, ensure the road network is well maintained and managed, but there is little expression of this. The messaging is focused on fighting climate change, and nowhere else has this been seen by the trucking industry as a policy it can support. France tried this previously with the abortive Ecotaxe proposal (which I wrote about extensively over nine years ago).

In every other European jurisdiction that has managed to implement heavy vehicle RUC, the objective has been clear - the need to raise revenue from the vehicles that generate the most damage to the road network, including those from foreign jurisdictions. A secondary objective with some has been to encourage more environmentally friendly vehicles, but that is reflected in preferential rates for low emitting vehicles, it is not the primary objective. I would not be surprised if protests continue in Denmark until there is some recalibration of the objectives and policy. 

Hopefully Denmark can reach a point where it finds compromises that brings the trucking industry with it, whether it be about timing, the rate structure, the use of net revenues or any combination of the above (or even consolidating other taxes), so that it too can join the list of jurisdictions with RUC. Bear in mind that it will need to progress it to replace fuel tax revenue in the medium to long term as well.

Tuesday, 4 April 2023

Australia quietly runs the National Heavy Vehicle Charging Pilot - manual option

The Australian Commonwealth Government has been undertaking a programme of trialling distance and weight based road user charging (RUC) for heavy vehicles.  It ran a small-scale trial in 2019-2020 using existing telematics equipment, which was evaluated here.  Now the large-scale trial, manual technology component, was launched quietly by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) in July 2022 and will run until the middle of the year.  It uses hubodometers, installed on powered units and trailers, with prepaid permits. It has parallels to New Zealand's long established Road User Charge system that has applied to heavy vehicles (over 3.5 tonnes) and light diesel vehicles. since 1978.  The graphic below depicts how the manual pilot works.

Australia's National Heavy Vehicle RUC pilot manual permit based system

Participants "buy" a permit (no real money is exchanged) for distance travelled, enabling participants to compare what they pay to stay up to date with distance permits, compared to what they pay in fuel tax and registration fees under the current system.

The video below includes segments from some of the trial participants.

This is not the only part of the trial, as a telematics based trial is due to start later this year, using a mix of new and existing on-board telematics systems on a range of trucks and buses.

The purpose of the trial is to gather data about various types of operators, obtain feedback on their experiences of the technological option and what operators think of paying by distance rather than tax on fuel and the high Australian registration fees for heavy vehicles.

The findings will be interesting and should inform decisions about whether to proceed with reforms to replace the fuel tax and registration based system (known as PAYGO or fuel based RUC), with a distance, weight and configuration based road user charge.

Disclosure: Milestone Pacific Pty Ltd (a subsidiary of CDM Smith) has been a technical advisor to DITRDCA on the National Heavy Vehicle Charging Pilot since 2019.  I have been leading that advice.

Thursday, 9 March 2023

Cambridge (UK) announced plans for a congestion charge - and it is not going well

The Greater Cambridge Partnership has announced plans to introduce a congestion charge for the city of Cambridge. This has been mulled for some years, and of course the record of UK cities introducing congestion pricing, beyond London and Durham has been a failure - primarily because the public has been opposed, so it will be interesting to see how and whether this actually gets implemented.

The Greater Cambridge Partnership is a public sector body set up between five local authorities and the UK Government to implement a City Deal - which is a partnership for funding infrastructure and development for the city using a mix of local and central government tax income.

It would be fair to say that the proposal has been highly controversial, and with good reason. 

The congestion charge zone has been labelled the Sustainable Travel Zone. I'd question whether rebranding something achieves much, as the public's scepticism can only be enhanced when a euphemism is used to describe what it actually is - it's an area which will have road pricing. 

What's the objective?

The objective expressed first in the consultation document is to raise money to spend on subsidising a significant improvement in bus services. The second objective is to lower the level of traffic.  The implication is that there would be reductions in congestion, but it would be wrong to infer this is about improving travel times for those who drive.

Where's the money going?

The proposed improvement in bus services includes simpler fares, more routes and more services, with 10 minute headways, more evening services and more services to rural areas. It certainly looks like a huge uplift in service, but of course someone has to pay, and the Greater Cambridge Partnership wants motorists to. £50 million a year is proposed to be spent, and the congestion charge is not to be introduced until most of the bus service improvement have been implemented. 

A big uplift in cycling infrastructure and improvements to encourage more walking, including secure cycle parking.

What are the details?

Proposed Cambridge congestion charging zone

Friday, 11 November 2022

Congestion pricing doesn't require public transport to be an alternative for most trips - the Mayor of Auckland makes a common mistake

Does congestion pricing need all motorists to have a "reasonable alternative", by mode of transport?


The alternatives to congestion pricing include:

  • Modal choices (public transport and cycling/walking for shorter trips)
  • Time of day choice (driving outside charging periods)
  • Route choice (avoiding driving on priced roads if possible)
  • Trip frequency choice (driving less frequency if a trip is regular)

The single biggest reason cars have become ubiquitous in cities is because they enable trips to be undertaken between origins and destinations that are not, and are likely to never be efficient to take by other modes. For trips to city centres, public transport can be an option for many, at peak times and indeed for trips between locations on public transport corridors, they obviously can be undertaken instead of driving, but for many cities, especially lower density cities like Auckland, characterised by houses on blocks of land in outer suburbs. It is not ever going to be efficient to have bus services that are always walkable to all of those suburban outlying areas.

So those that claim public transport alternatives need to exist for everyone are mistaken or actually just opposed to congestion pricing.  I hope the Mayor of Auckland is simply mistaken.


I've written before about Auckland, New Zealand's, experience in investigating congestion pricing.  A major report was released just before the pandemic (see here) and I wrote about it here.

In short it was recommended that Auckland implement congestion pricing, starting with a small inner city cordon (effectively as a pilot, but consistent with Auckland Council's objectives to reduce car use in the inner city and provide more space for pedestrians, cyclists and buses) followed by corridor based charging, in some ways resembling how Singapore's excellent ERP system was rolled out. 

The pandemic stopped further progress, but in the meantime the Government of the day was re-elected, with a majority for the ruling Labour Party, and it followed up with a Parliamentary Inquiry into congestion pricing in Auckland. which recommended that congestion pricing proceed.

It's worth noting that congestion pricing is not controversial at the level of national politics, although there is debate about how to use the money, and the priority of objectives. The Green Party supports it, so do the Opposition centre-right National and free-market liberal ACT parties.  However, it would be fair to say that progress in advancing congestion pricing in Auckland has been glacial over the past year.

To enable congestion pricing, the Government needs to introduce legislation to permit it to be introduced and this has not yet occurred.  However, in the meantime there were local elections in New Zealand. Auckland's Mayor had retired, and he has been replaced by the centre-right candidate Wayne Brown, who has reportedly now said that congestion charging is a "distraction" and 

"Congestion charging could only make sense once every Aucklander has the option of catching a bus or a train that they know will show up on time, every time – and we are two years away from that, at the very least"

There are two big mistakes with this:

  1. If it were decided to introduce congestion pricing, it would take at least two-three years before it could be ready in any case.  Indeed, the argument has been made that the right time to introduce it is when Auckland's underground city rail loop is completed in 2025 or so.
  2. There is no reason for EVERY person to have a public transport option to substitute every possible car trip, indeed it is neither possible nor rational nor necessary.  This is because many trips will simply change time or frequency of travel, especially more discretionary trips.
What does congestion pricing do?

Fundamentally, congestion pricing is applying a time and location sensitive price to road use directly, with the intention that it shall alter behaviour of marginal users of the road network (those sensitive to price relative to the value of the trip by road at that time and location), so that they do not use congested roads at specific times, reducing congestion to more economically efficient levels.

In most cases congestion pricing has not been mostly about people shifting modes of travel, although modal shift is very important, it is a common mistake to think that if, say, 5000 car trips are priced off the road at 0800 that the occupants of those 5000 cars (which will be more than one per car on average) all catch a train or bus.

In Stockholm congestion pricing reduced trips over the cordon by 25% (Source: Centre for Transport Studies, Stockholm, CTS Working Paper 2014:7), but of that 25% the percentage breakdown of behaviour change varied:
  • around 10% points were commuters that shifted mode (so only around 40% of car occupants went to other modes)
  • around 6% points were discretionary trips (likely social, recreational, retail) that changed either the destination of travel at charging times or travelled less frequently.  So they still drove, just fewer times per week (consolidating trips) or to another destination not subject to pricing.
  • around 5% of trips were commercial trips (deliveries, tradespeople, taxis) that disappeared, again likely due to consolidation of trips (deliveries being managed more efficiently, tradespeople booking work for a single trip across the cordon rather than multiple ones during a day)
  • <2% changed route (using the bypass motorway to avoid the charged cordon).
  • <1% changed time of travel, noting the Stockholm scheme operates all day, but has lower prices between the peaks. 
The key conclusion being that a great deal of behaviour change is having fewer discretionary trips and more efficient management of trips.

In London most shifted mode it is believed, to buses, but it is difficult to be sure because there was a significant uplift in the level of bus service, which is believed to have resulted in more trips in any case.

For Auckland it is proposed to only have charging during the peaks, so the potential for changing time of driving is significant, much more like Singapore, which only applies charges at times when demand slows traffic below stated performance levels (very few routes have charges outside peaks, especially post-Covid).

What would happen in Auckland?

If the first stage of congestion pricing were introduced, it is likely a significant proportion of motorists would shift mode of travel, assuming bus service reliability were back to pre-pandemic levels, and the City Rail Link is opened.  However, the majority would still drive. Of those that wouldn't, many would drive off-peak instead, some discretionary trips might go elsewhere at the peak, and some would not travel at all.  

It's worth noting that the highest peak charge was assumed to be NZ$3.50 (US$2.10). Over a work week this would be NZ$17.50, this is less than the normal public transport fares (there is currently a 50% discount applied by the Government to address the cost of living temporarily) and of course for many they also pay for parking.  

The inner city cordon is estimated to reduce car trips across Auckland by only 0.4%, and even if the FULL corridor scheme were eventually introduced, there would be a 1.3% reduction in trips.  This is enough to make a significant impact on travel times and trip reliability for the vehicles that ARE paying, plus of course buses.

It's also worth remembering that freight/logistics trips mostly cannot shift modes, and in many cases can't shift time of travel, but that isn't a reason not to price those vehicles using a scarce resource (road space) when they will benefit from it operating more efficiently.

Bus services can be improved significantly because of the effects of pricing

This is the almost instant "win" of congestion pricing, ignoring any money that might be raised and diverted into public transport. Reducing traffic congestion improves travel times for buses, improves trip reliability for buses, and enables more services to be operated with the same number of buses and drivers. FHWA (US) noted that in London:

 “Excess wait time” at bus stops fell by 24 percent across Greater London during the first full year of charging, with a 30-percent decrease within the zone itself.

Stockholm also saw such an improvement in trip times, that bus services that had been enhanced were cut back somewhat because too many services were operating with too few passengers. 

Congestion pricing CAN be designed to make life better for those driving

Many who support congestion pricing do so because they want fewer car trips, as an objective, but it is worth remembering that the goal of the original Congestion Question study was to improve network performance. Less congestion benefits those who pay to use the roads at peak time, because they have more reliable travel times, shorter travel times and also save on vehicle fuel/energy costs. Moreover, the use of net revenues can be applied to reducing or abolishing other motoring taxes, such as the NZ$0.125/l Auckland regional fuel tax (including GST), which apply to ALL road users, regardless of where and when they drive.  

Mayor Wayne Brown expressed concern that transport policy in Auckland under the previous Mayor was increasingly antagonistic towards drivers, but he could embrace road pricing as enabling better conditions for drivers and public transport users, and as a tool to reduce the burden on motorists outside peak times. 

What SHOULD happen?

The New Zealand Government should announce it is going to introduce legislation enabling congestion pricing under certain conditions. This won't force the Mayor of Auckland and Auckland Council to proceed with pricing, but will raise the question more explicitly, and it will enable Wellington (and other cities) to progress it, if they so wish.  

Given 2023 is election year in New Zealand (and polls indicate there is a reasonable likelihood the governing Labour Party would be voted out of office), it might be too much to expect this level of courage, but this IS a government that has set a target of reducing total kilometres driven by light vehicles, across the country, by 30% to meet climate change targets. To implement that requires measures much more intrusive than a congestion charge for central Auckland.

Congestion pricing in Auckland should not be delayed because the Mayor doesn't fully understand the impacts it will have. Government should enable it to happen, and progress detailed design for the preferred scheme options, with the intention of being able to implement it by 2026 at the latest (and if the Government changes after the election, it might help replace the Auckland regional fuel tax, which was implemented by the current government. 

A focus on making Auckland public transport more reliable and frequent is fine, but road pricing can help with that, and it would be wrong to lose momentum on Auckland road pricing because of concerns that can be easily addressed in the detailed design phase.

Monday, 17 October 2022

Hong Kong to introduce congestion pricing on Cross-Harbour Tunnels

Hong Kong has been investigating congestion pricing since 1984, but in recent years seemed like it was likely to progress some sort of cordon for the Central-Wan Chai area. The Transport Department Hong Kong website appears to have frozen at 2020, which is not surprising, as this coincides both with the beginning of the Covid-19 pandemic, but also the period of protests and unrest arising from opposition to the increasing mainland takeover of the Special Administrative Region.

Meanwhile Hong Kong has made a more obvious step announcing it will introduce congestion pricing applying to the three Cross Harbour Tunnels.

The Standard (Hong Kong) reports that between 0700-1000, 1700-2000 the Cross Harbour Tunnel (the central and most congested one) and the Eastern Harbour Crossing (on the right) tolls will increase by HK$20 (US$2.55) per crossing. It won't apply to the much less congested Western Harbour Tunnel, which will have a discount applied (HK$5-HK$10) once the franchise for that tunnel expires (putting it in public ownership) later this year. Buses will also have a cap introduced (which had not previously applied, noting most Hong Kong bus services are commercial albeit regulated services). 

It's worth noting the Cross Harbour Tunnel is priced currently at HK$20 per car (US$2.55), the Eastern Harbour Crossing at HK$25 (US$3.18) but the Western Harbour Crossing is HK$75 (US$9.55) because the latter toll is recovering the capital costs of building it through a private concession (the other two tunnels were built as private concessions but returned to public ownership some years ago). 

It's reported around 60% of vehicles using the tunnels are private cars.

Full details of CURRENT tunnel rates are here. The rates apply to buses and trucks, all largely proportionate to road space occupancy.

This looks like a positive move, of course it won't replace what is needed in Central/Wan-Chai, but it is clear that the Cross Harbour Tunnel in particular is a major bottleneck, and this should help to encourage both modal and time shift, but also attract more demand to the Western Harbour Tunnel, which generally operates free flowing most of the day.

Thursday, 12 May 2022

Western Australia to implement RUC for EVs, Auckland congestion charging to be announced, Virginia launches RUC in July 2022

I've been very busy, but there are some announcements worth noting as follows

Western Australia announces it will introduce distance-based RUC on EVs in 2017

As part of an package of measures to incentivise increased sales of electric vehicles, the Western Australian Premier has announced that the state government will introduce 

 introduce a distance-based road user charge for zero and low emission light vehicles commencing from July 1, 2027 to ensure all motorists pay their fair share towards the maintenance and construction of WA roads.

A base rate of 2.5 cents per kilometre for electric and hydrogen vehicles and two cents per kilometre for plug-in hybrid electric vehicles will apply, with both rates indexed to the Consumer Price Index.

This parallels what has already been announced in New South Wales, what has been introduced in Victoria in 2021 and what was also announced for South Australia (but for which the recently elected Labor Government has vowed to repeal).

Western Australia has some history in looking at heavy vehicle RUC, but it will be interesting to see how this may be implemented, as it could be a simple odometer reporting based system given there is little interstate light vehicle traffic. 

New Zealand Government to make announcement on progressing congestion pricing in Auckland next week

It has been studied and investigated for some time, but Radio New Zealand is reporting (alongside other media outlets) that when the New Zealand Government Emissions Reduction Plan is released on Monday 16 May, it will also announce it will implement congestion pricing for Auckland.  It is likely to be focused on a downtown inner city cordon-style scheme at peak times only, but with the potential to expand into corridor charging beyond that. It also appears that the net revenue may be used to offset a cut and eventual abolition of the Auckland Regional Fuel Tax established only in 2018 to help fund transport projects in the city.  That tax is currently at NZ$0.125 per litre including Goods and Service Tax.

Virginia to launch RUC for EVs on 1 July 2022

Virginia will be the third US state to implement distance-based RUC for light vehicles on 1 July according to NBC12.  Branded "Mileage Choice" it will offer EV, hybrid or other ultra fuel efficient vehicle owners the choice of paying by mile instead of paying a flat annual fee for registration (currently US$109 per annum).  Distance will be measuredly a plug-in device supplied by Emovis, with an initial odometer reading captured by smartphone imaging to register.  

Tuesday, 8 March 2022

Will Denmark be the next European country to develop light-vehicle RUC?

According to the Ministry of Transport website of Denmark (in Danish), the Danish Government has agreed to a pilot of road user charging (RUC).  The Technical University of Denmark with state-owned infrastructure company Sund & Baelt  is to undertake a study as follows:

DTU's development experiments with road pricing are carried out with a randomly selected representative group of citizens. DTU's primary focus is to investigate the effects of introducing tolls on the roads that are challenged by congestion and thereby collect experiences of behavioral changes among motorists. The experiences from the experiment can form the basis for a possible further work with tolls for passenger cars.

So the idea appears to be to test RUC on congested roads, with a subset of users, to understand behaviour change to inform further work on road pricing. Sund & Baelt already operates the tolling systems on Denmark's tolled crossings - the Great Belt Fixed Link between the islands of Funen and Zealand, connecting the main islands of Denmark with the European continent, and the Øresund Bridge between Denmark and Sweden. 

2,000 citizens will be subject to the pilot which will take a total of three years, with tariffs that will vary by location based on congestion. It is clear it will only be for light vehicles (those under 3.5 metric tons Gross Vehicle Weight). The pilot budget is DKK20 million (~US$2.9m).

Meanwhile, a petition signed by 50,000 citizens is requesting that the Great Belt Fixed Link toll be removed. The toll is DKK250 (US$37) per car, which is high, but the cost of the bridge and tunnel link was DKK21.4b in 1988 (US$3.1b), so it is reasonable to recover those capital costs from the users (particularly for a Government committed to encouraging greater use of public transport).  The Local reports that the debt for the bridge won't be fully repaid under 2032. 


It's clear that revenue from fuel tax is putting pressure on lots of jurisdictions, but it is curious that Denmark appears to be focusing on reducing congestion, which is a difficult objective to achieve unless all light vehicles are put onto a RUC system.  I'll look forward to more information in due course.  

Monday, 21 February 2022

Does road user charging harm electric vehicle sales?

RUC makes little difference to EV sales.

Under a year ago I wrote this piece Would RUC for EVs harm sales? largely in reference to concerns in Australia from the Electric Vehicle sales lobby that Australian states investigating road user charging (RUC) based on distance, for light vehicles; would significantly reduce consumers' propensity to buy such vehicles. 

Dr Jake Whitehead from the University of Queensland apparently conducted a study which was cited in an article in Driven that claimed it would hurt sales by 25%, claiming that it would be perceived by drivers as adding $4,000 on the cost of owning and operating an electric vehicle. I demonstrated in my previous article that this was highly questionable, because no purchasers of petrol powered cars estimate the fuel tax they would pay on top of the cost of owning and operating the car. If they did, it might be around A$367 a year for a new petrol Hyundai Kona driving the average annual 13,838km of a car in Victoria. This compared to around A$346 for an equivalent EV paying the Victoria state RUC. Sure I understand Whitehead's estimate, but it simply isn't a valid comparison to think anyone buys a car thinking about the lifecycle costs of charges associated with using the road (although buyers of many commercial vehicles do make such estimates). 

However, there is now some actual evidence, with the latest sales data on electric vehicles in Australia.  You see Victoria introduced RUC (known as the ZLEV road-user charge) at A$0.025 per km for battery-electric EVs (BEVs) and A$0.02 per km for plug-in hybrid vehicles (PHEVs). Both also obtain a registration fee discount of A$100 a year. 

The data for 2021 indicates that 6,396 EVs were sold in Victoria, with 7,430 sold in NSW and 5,342 in Queensland. Given RUC was introduced in July 2021 if Dr. Whitehead's assessment were valid you would expect a significant decline in EV sales relative to other states, but that isn't what happened.

You see the 7,430 sold in NSW compared to the total passenger vehicle fleet in NSW is around 0.17% of all vehicles. Whereas the 6,396 sold in Victoria, compared to the total passenger vehicle fleet in Victoria is around 0.16% of all vehicles.  If it made a difference it was barely discernible, and undoubtedly less relevant than other factors.

In the ACT, the number of EVs sold comprised 0.37% of all passenger vehicles registered in the territory, the highest of any state and territory, but that's not so surprising. The ACT has relatively high affluence, motor vehicle registration is free for two years for EVs, with a 20% ongoing reduction.  

Queensland has a slightly higher number of EVs as a proportion of all passenger vehicles at 0.18%, but that's close enough to NSW and Victoria to suggest that there isn't a significant difference in policy impacts.

Western Australia, Tasmania, South Australia and Northern Territory all have much lower sales, as a proportion of the total passenger vehicle fleet, than the other states, ranging from 0.1% to 0.05%.  In shortsthere is a great deal of reluctance to buy EVs in Australia, but the wealthiest eastern states/territory have better sales.  Note that both NSW and South Australia announced they would introduce RUC from 2027.

So from that I conclude that RUC in Victoria has made virtually zero difference to EV sales in the state. 

That's with a RUC rate of A$0.025 which is equivalent to US$0.029 per mile or £0.02 per mile or €0.016 per kilometre. That is higher than some US states have implemented or are proposing, but much lower than would be a replacement rate for fuel taxes in any European countries.

A higher rate might make a difference to sales. Certainly New Zealand has maintained an exemption from its RUC system for EVs, which would have resulted in them being charged NZ$0.076 per km (A$0.071 per km, €0.045 per km, US$0.08 per mile or £0.06 per mile). Exemption EVs from RUC has undoubtedly contributed to greater sales per capita than in Australia, but I suspect other factors, including price of electricity and the network of charging points matter as well (plus less range anxiety in a smaller jurisdiction).

What it means is that RUC, as a policy tool, needs to be considered within the context of a wide range of pull and push factors for jurisdictions that want to encourage sales of EVs. 

Thursday, 17 February 2022

UK House of Commons Transport Committee Road Pricing report released - so here's my review of it

Nothing new in the UK investigating road pricing

The UK's journey towards national road pricing has been long and arduous.  It once started with the Lorry Road User Charging programme in 2002, essentially a more ambitious version of the highway heavy vehicle RUC systems in continental Europe, but that was abandoned because the business case didn't stand up at the time, given the costs.  It was replaced in 2004 with National Road Pricing, which was to pioneer TDP (Time Distance Place) based road pricing, to better manage congestion.  However, that collapsed due to public opposition, primarily out of concern about how much motorists would have to pay, and a lack of trust that fuel duty and vehicle excise duty would be cut at the same time.

That was 2007.

One of my big questions is whether UK politicians and policy makers have learned from that failure, and maybe learned from the successes of jurisdictions elsewhere that have partially implemented forms of RUC, such as in continental Europe, the United States and New Zealand. 

House of Commons Transport Committee report

Last year, the Transport Committee of the House of Commons (UK) held an inquiry into road pricing (and also electrification of the road vehicle fleet in the UK).  It released the findings of its work on 2 February 2022 with a full copy of the report available here (PDF).

The Committee notes in its report that it "launched an inquiry in December 2020 called Zero emission vehicles and road pricing. We chose to split the inquiry into two parts. We reported our findings on Zero emission vehicles in July 2021. That Report addressed the opportunities and challenges presented by the advancement of the ban on the sale of new petrol and diesel vehicles to 2030. This Report on Road pricing covers the second part of our inquiry. It examines the consequences of the shift to electric vehicles, including tackling the decline in fuel duty and vehicle excise duty."

Before I review the report's key findings, it is important for those unfamiliar with the UK to recognise that the report is influential but not binding on the UK Government. It is a matter for Cabinet and ultimately Parliament to make decisions on implementing any form of road pricing or road user charging (RUC) for the UK.  

What is behind the inquiry?

  • Revenue
  • Demand impacts of no charges on electric vehicles

It's fairly simple, because it follows on from the primary reason RUC is being implemented in US and now Australian states. Revenue from fuel taxes is threatened by the shift away from fossil fuel use by road vehicles. £28 billion is the annual revenue from both fuel duty and with the UK looking to prohibit sales of petrol and diesel vehicles from 2030, it will drastically erode revenues from motor vehicles. Add the £7 billion raised from vehicle excise duty (an annual registration fee for motor vehicles) that is hypothecated to the National Roads Fund (which fully funds National Highways and contributes towards spending on local roads) and the total revenue is equivalent to 4% of all tax revenue, and this is more than just a problem for spending on roads, let alone transport.  That revenue is five times what is spent on roads, so it is a general source of revenue.

In other words, unlike the US or Australia where motoring taxation barely or doesn't at all cover the cost of paying for roads, in the UK it does so and so much more.  Setting aside externalities (and given no other sector pays for externalities either), the roads make a significant fiscal surplus.

However, it's not all just about money, it is also about the demand impacts. Electric vehicles pay nothing to use the roads, which means that driving is substantially cheaper for those vehicle owners than others. This is a matter of both equity, but also overall impacts on the network. If a third of vehicles are paying nothing in say ten years' time, the effects on congestion are likely to be considerable. I recall a study around twenty years ago that estimated the demand impacts of fuel duty on driving in the UK was around 10%, in other words, 10% fewer miles were driven in the UK because of the effect of fuel duty. As fuel duty has not increased in 11 years, that impact is likely to have weakened somewhat, but it still exists. So for the UK, RUC is also about sending a price signal to drivers to think about whether to drive or choose another option.

Key conclusions

  • It is difficult to predict the timescale of the impact on revenues. In 2021, 11.6% of new cars were battery electric and it is estimated by 2026, only 4% of all registered cars will be electric. (comment: Indeed, but hybrids and more fuel efficient vehicles are eroding revenues easily as much as electric. It would be wrong to focus solely on pure electric vehicles) 
  • However, it gets much harder to introduce RUC when there are many electric vehicles compared to when there are few, so the message needs to be sent that electric vehicles will have to pay to use the roads. (comment: agree)
  • A shift to electric vehicles could increase "traffic levels" by 51% by 2050 according to the Department for Transport (DfT), with the average driver spending an additional nine hours a year in traffic by 2040. (comment: "on average" hides some disparities, but the aggregate impact is likely to be true. Cheaper driving will mean more driving).
  • "Any alternative road pricing mechanism must be revenue neutral to the Government rather than causing drivers, as a whole, to pay more than they do currently. Such a mechanism should be phased in before fuel duty and vehicle excise duty decline to zero. The situation is urgent; work must begin without delay" (comment: YES absolutely)
  • Technology already built into vehicles (in-vehicle telematics) has potential to collect and deliver the data necessary for a road pricing system (comment: Yes, and this happens already today on a small scale in Utah).
  • "The Government must assess the potential effect of a road pricing mechanism based on telematic technology on high-mileage drivers, such as road hauliers and those in rural communities, and on those least able to adapt to increased motoring costs." (comment: Yes there should be modelling and even piloting of road pricing to assess those impacts. Noting that road hauliers should see the HGV Levy replaced by RUC, but rate setting needs some serious policy analysis. A cost allocation study should be carried out).
  • "The successful implementation of a national, technology-based road pricing scheme is contingent on the Government explaining how data capture will work in practice, ensuring that data management is subject to rigorous governance and oversight and reassuring the public that their privacy will be protected" (comment: Data privacy is critical, but there needs to be acknowledgement of some obvious ways to ensure this, such as not having a government owned RUC system collecting trip data, specifying the level of location disaggregation needed, consider having a non-location aware option (at least for a transition period))
  • The DfT and Treasury should set up an arms-length body to investigate and evaluate options to replace fuel duty and vehicle excise duty (comment: This seems reasonable, but there isn't an actual need to replace vehicle excise duty. Vehicle excise duty is only an issue because electric vehicles are exempt, but that exemption need not be maintained. However, there are merits in shifting from ownership based to usage based charging of motor vehicles).
Conclusions that are questionable
  • (para. 25) A claim that the UK can be a "world leader" in road pricing, is bold but also maybe fanciful, especially given how little progress has been made in the UK compared with other jurisdictions. The report doesn't note that there are three and soon to be four jurisdictions charging light vehicles (in all cases but one, electric vehicles) by distance instead of fuel duty. There are two jurisdictions that charge heavy vehicles by distance, weight and configuration instead of fuel duty. There are twelve jurisdictions that charge heavy vehicle by distance and weight as well as fuel duty, using GNSS technologies. However there is very little citing of relevant international experience. Is that because most of those who gave evidence have no such experience> There are multiple companies in Europe, the US and New Zealand that run RUC account management operations, including supplying technology for vehicles (heavy and light). If the UK WAS able to implement a national road pricing scheme that included congestion pricing based on distance it might be world leading (although I suspect Singapore might beat it), but it has so far proven that it cannot even roll out a basic cordon or area based congestion charge beyond London and Durham after 21 years. 
  • (para. 28) The claim is that "The devolution of road pricing could lead to the introduction of clunky, unconnected schemes that charge users the same price for driving one mile into the zone as those who drive across it for hours in a day. The more regional schemes that are created, the harder it will eventually be for the Government to implement a functional national system". This is simply nonsense, not only because it is based on the idea that there is only ONE type of congestion pricing scheme (cordon or area charges) and only one way to implement it (assuming there is a flat all day charge). Why can local schemes not work with a national system? The US looks like it may have multiple state RUC systems and ultimately federal system, which may all be interoperable and function seamlessly. Several European countries have toll schemes plus heavy vehicle RUC systems operating in parallel (see Belgium which has a national heavy vehicle RUC scheme, with Brussels developing a local congestion based scheme for light vehicles). New Zealand has a national RUC system and is investigating a local congestion pricing scheme for Auckland. There MIGHT be a problem if systems require multiple accounts, or multiple pieces of on-board equipment, but this is unnecessary and avoidable. It is likely to be lower risk for congestion pricing to be locally defined and implemented, even if nationally regulated.  It seems to be an excessively engineering rather than policy and business based perspective.
  • (para. 32) The report cites John Siraut from Jacobs who says:
"He stated that a system where charges vary dynamically based on the road being used and the time of travel are “certainly perfectly feasible to do”, even though they do not exist at the moment"

This is simply wrong. There IS a system that varies by location, time of day and charges by distance, in the Czech heavy vehicle RUC system. For heavy vehicles, the charges vary based on the type of road (motorway vs. 1st class highways) and the time of day.  Arguably, Singapore also has a system that varies by road being used and time of travel since.. 1997 (albeit not charging by distance), but certainly the can rates vary across 78 charging points by small increments of time of day. Strange in particular when he is previously cited as saying "Singapore comes closest" to the model discussed, which suggests he may have been misquoted at least once. . (Disclaimer: I used to work for a wholly owned subsidiary of Jacobs, in the UK from 2012-2015).

  • (para. 34) The report says "The Government must assess the potential effect of telematic technology on changing drivers’ behaviour and delivering its wider policies on air quality, congestion, public transport and public health.".  No, the effects of telematics technology on drivers' behaviour should be minimal. It is about the policy that is implemented, not the technology (although technology is the enabler).  Furthermore, if you think introducing road pricing should also address a whole host of externalities, then you'll spend another five to ten years investigating it.  This seems like an unwelcome and unnecessary distraction. The effect on environmental and transport policy outcomes will depend on the policy selected. 

Where to from here?

There is one thing missing from the report, which is a thoughtful and considered view on why road pricing failed last time it was tried in the UK. Perhaps it is because most of the politicians were not in Parliament at the time, perhaps it is because the public servants don't want to look into what were largely mistakes by public servants and politicians.  However, it is important to remember how sensitive the issue is.

The number one reason road pricing failed before was that the policy was not designed to benefit those who would pay, and there was no leading of the narrative to address the two biggest concerns:
  • Road pricing means paying a lot more to drive
  • Road pricing means tracking everywhere that you drive
It cannot be repeated too much that road pricing needs to be introduced in a way that generates the same net revenue as fuel duty and vehicle excise duty. It has to be done in stages and steps that are achievable, but it is almost impossible to introduce any form of congestion pricing until all vehicles are on a road pricing system that measures location and time of day.

So congestion management should be very much a secondary concern, it should be about replacing the current system. There are various pathways for doing this, ranging from starting with electric vehicles, starting with newly registered vehicles or with heavy vehicles.  

There should NOT be pursuit of a central government owned and managed system that is procured centrally with a single provider of technology and account management. This is NOT a model that any jurisdiction has pursued for network wide RUC for twenty years (see Switzerland).  There should ALSO not be pursuit of a PPP with a single integrated supplier of a system to collect revenue, that is ALSO not a model any jurisdiction has pursued for sixteen years (see Germany).  It should be an open market of certified service providers, supported by a government managed enforcement system.  Revenue should be collected by competing service providers, with multiple technical platforms (such as in-vehicle telematics or plug-in devices), but enforcement managed by government.  

Consideration needs to be given as to how to refund/credit fuel duty paid when vehicles that pay fuel duty transition to RUC.

NONE of this matters unless policy is designed correctly.  That means:
  • RUC rates that are based on a rational economic assessment of what different types of vehicles should pay.
  • Charges that don't vary by time of day until a vast majority of vehicle are on a system
  • Charges that vary by road type and location for traffic management purposes, but not to such an extent as to encourage use of vehicles that do not pay RUC
  • Hypothecation of some revenue for roads, to go beyond what the National Roads Fund does now
  • Care being taken as to how to treat the surplus of revenue beyond what is needed for roads.
  • A feasible staged transition path.
It doesn't require investment in alternatives to motoring.

This requires a level of engagement with the public and business that did not happen with National Road Pricing, but is exactly what has been going on in some US States in recent years.  

It would be extremely helpful if the UK looked beyond itself to see that things are moving fast elsewhere.  

Take for example Victoria, Australia.  In a short period of time it went from studying to implementing a basic distance based RUC system for electric vehicles, based on odometer reporting.  Is it the long term scheme? No.  Does it work? Yes. Is it a start beyond which more can be learned and it can be built on? Yes.

I lived in the UK for fourteen years, I worked on Manchester's congestion charging scheme that faltered because of a lack of public support (in part because there was poor communications with those who would pay as to what it would mean for them). I observed the National Road Pricing project going wrong because politicians and civil servants didn't think they needed to seriously and convincingly address concerns of the general public about paying twice, or being tracked. If they still think that, then road pricing isn't going to happen easily.

It's my hope that both DfT and The Treasury can reflect carefully on lessons learned from the past, in the UK and elsewhere, and recognise that for road pricing to be advanced in the UK it might need to think of doing it in incremental steps, that means not all objectives are met at first, and that it doesn't need to re-invent the wheel.