As part of climate change policy the Danish Government announced in December 2020 that it is introducing distance-based road user charging (RUC) for heavy goods vehicles (press release in Danish). In Europe this is typically referred to as "truck tolling" although it is distance based charging and is applied across a wide network, not point based charging on a specific road (which is the traditional definition of tolls). This is part of a national policy goal to reduce emissions by 70% by 2030.
The intention is to introduce the new system from 1 January 2025, which will replace Denmark's participation in the Eurovignette (time-based) RUC scheme. The objective of the new RUC scheme is to improve incentives to change the heavy vehicle fleet towards lower emission vehicle, but will be designed to reflect:
- Infrastructure, road wear costs;
- Noxious emissions;
- Climate change impacts; and
- Noise.
As with the Eurovignette, it will apply to Danish and foreign registered trucks (apparently not buses) with a gross maximum laden weight of 12 tonnes or more. Eurovignette is estimated to generate DK0.5 billion (US$79.8 million) revenue from Denmark at present from such vehicles, of which 20% is from foreign vehicles. The proposed new RUC system should generate the same amount of revenue in the years 2025-2027 and then increase to DK1 billion (US$159.6 million) from 2028 onwards (which assumes a sizeable increase in charges).
Estimated costs for establishing the system are DK200 million (US$32 million), with ongoing operating costs of DK175 million (US$23 million), with depreciation at DK25 million p.a. (US$4 million). Within those costs are enforcement, estimated to cost around DK10 million (US$1.6 million) p.a., which is expected to be fully recovered from fines.
These forecast costs are a far cry from levels seen in previous estimates or from schemes introduced ten or more years ago. This is due to significant drops in the cost of GNSS telematics OBUs, drops in the cost of mobile data communications thanks to 4G (and soon 5G) technology. reductions in the costs of enforcement equipment and systems (notably ANPR cameras) and the emergence of a competitive market in RUC service provision in Europe. The latter is particularly notable, as early schemes (such as the German LKW-Maut) had a single provider of services, but in the past decade a more open market approach has emerged, putting pressure on both equipment and operating costs. This was pioneered in New Zealand in 2011 with its introduction of eRUC, and the introduction of a certification system for service providers supporting the electronic option to charge RUC in that country (which now has three service providers), followed by Oregon which has done the same for heavy RUC and its light RUC pilot. In Europe it was pioneered in Hungary shortly thereafter.
I suspect the costs for enforcement are too low, unless the labour costs are seen as overlapping with safety enforcement activities (so the incremental cost of enforcing RUC is insignificant).
Interestingly, the press release indicates there has been extensive dialogue with the Danish trucking industry and the introduction of RUC may parallel some liberalisation of rules around the use of double trailers and reform of the mass and dimensions rules around trucks. This could help with acceptability by enabling higher productivity vehicles (larger trucks) to operate on Danish roads, with greater capacity (and as a result using less fuel and producing less emissions to move the same freight).
The project is being managed by Sund & Bælt. a Danish Government owned company that is responsible for several very large infrastructure projects (it is best known for being responsible for crossings such as Storebælt fixed link between Zealand and Sprogø, the Danish part of the Øresund fixed link and the under construction Fehmarnbelt fixed link between Germany and Lolland, Denmark). It is to be responsible for implementation and operations, as well as enforcement. The reason for granting authority to Sund & Bælt is because it was assessed as having experience with similar tasks and having the necessary competencies, as it has over 20 years experience in operating tolling, it is believed to have some of the project and operational competencies around customer service, technical monitoring, charging systems, technical knowledge and communication.
It's worth remembering that Denmark pursued heavy vehicle RUC before, which I wrote about in 2012 and 2013 when it was abandoned. It appears the primary reason it was abandoned was cost, although Hungary and other European countries have subsequently been able to address this (suggesting that perhaps the concept of operations and the procurement approach taken at the time was not optimal).
There are limited details of what the Danish scheme will look like, including its scope (both in terms of applicable vehicles and the network subject to RUC), but it could apply to all goods vehicles over 3.5 tonne and given experience of all European heavy RUC schemes (except Switzerland and Iceland) it will likely apply to motorways and national highways (although it could apply to all roads if desired). There is also little indication of forecast revenues and costs, although EU Directive 1999/62 does set some clear rules around rate setting, so Denmark cannot over recover such costs.
Denmark has had to its south the German LKW-Maut scheme, which charges all heavy goods vehicles over 7.5 tonnes on all German Federal Highways since 2005, and of course multiple other similar schemes in other European countries such as Belgium, Switzerland, Hungary and Slovakia. The system is required to be interoperable, so it is possible that vehicles with accounts and devices for the German LKW-Maut scheme will be able to be used for the Danish system. Denmark notes it needs to have dialogue with neighbouring EU Member States to ensure compliance with EU law.
The Eurovignette remains of course in Luxembourg and Sweden, given the Netherlands previously announced it is introducing a heavy vehicle RUC system (and Sweden continues to develop such a scheme). Given these trends, will it be that Luxembourg has the rump of the Eurovignette, which once applied across central Europe (including Germany) or will Luxembourg introduce its own heavy RUC scheme, taking advantage of the fact that its neighbours (bar France) all have heavy RUC schemes?
UPDATE: Hat Tip to Søren Have from Denmark who via Twitter directed me to additional sources of information on the project, in Danish. Documentation in available here (in Danish), but through Google Translate I can add the following points (and have edited above).
The technical solution, unsurprisingly, is a GNSS telematics on-board unit, which is estimated to cost DKK1000 (US$160) including installation, with an option for cheaper self-installed units. Devices are not expected to be purchased, but rather supplied as part of service provider contracts. No manual option will be provided, reflecting the extent to which vehicles particularly from Germany are expected to be equipped (as well as those registered in Denmark that regularly travel to Germany).
Project schedule appears to be as follows:
- Political clearance by mid 2021
- Establishment of project and organisation by mid 2021
- Legislation for implementation introduced mid 2021, passed mid 2022
- Procurement and delivery of solution from mid 2021 through to early 2024
- Negotiations with service providers early 2022- late 2024
- Preparation and operation of testing and commissioning early 2023 - early 2025
The scheme is forecast to reduce total truck traffic by 2-3% primarily by:
- Reducing demand for road freight;
- Productivity improvements in the road freight sector that are expected to parallel the move
- Modal shift (although this is questionable).
Certainly if the increase in revenue after 2027 is primarily due to significant increases in charges there would be expected to be a demand impact.
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