Friday, 17 December 2021

Netherlands to introduce road pricing for light vehicles from 2030

Those who have been following the road pricing scene for around twenty years may have memories of the Netherlands attempting to introduce road pricing (as in full network, all vehicles, distance/location/time of day based road user charging) several times in the past.

So the most recent news that the new coalition government in the Netherlands has decided to advance road pricing may give some a sense of déjà vu. However, I am a bit more optimistic.

Five previous attempts at road pricing for light vehicles

Three times in the 1990s there were congestion pricing proposals based on either city cordons or corridor based pricing, all of which failed due to political opposition. However, in 2001 and then again in 2005 there were attempts to introduce nationwide road pricing schemes called Kilometerheffing and Anders Betalen voor Mobiliteit.

Kilometerheffing (Kilometre charge) was announced in 2001 as a proposal to introduce distance-based RUC at a flat rate initially, from 2004, transitioning all vehicles onto the system in 2006 (to replace registration fees and sales taxes). It was to be built to be capable of allowing location and time of day based pricing in due course to help relieve congestion. There was widespread opposition, in part due to the forecast €6 billion implementation cost (as it was to require On Board Units to be installed in all vehicles). The proposal was abandoned by the new coalition government following the 2002 election.

Anders Betalen voor Mobilitei (pay differently for mobility) was announced in 2006 with legislation to follow in 2009 for implementation in 2018, also distance based varying by time of day and location. A key condition was that it would be implemented when operating costs would be no greater than 5% of gross revenues. However, the 2010 election saw a new government cancel the proposal, due to concerns over its scale, costs and difficulties in persuading motorists of the merits.

In short, the Dutch appetite for believing politicians that road pricing is about improving mobility is low. There is some sign of progress though.

RUC for trucks coming in 2024

In 2018 the Netherlands decided to introduce RUC for heavy goods vehicles. This is unsurprising since it is surrounded by countries with such systems (Germany since 2005 and Belgium since 2012). It will apply to all trucks 3.5 tonnes and above, on all motorways, highways and major roads (and local roads that may see traffic diversion). It would not apply to the handful of toll roads in the country. It Is now planned that the Netherlands will have heavy vehicle RUC from 2024, although legislation to enable it has not been passed yet. Rates will vary by weight/size and emissions rating. It is intended to replace the Eurovignette for the Netherlands and reduce vehicle registration fees (and apply to foreign as well as domestic vehicles). Revenues will be placed in a hypothecated fund for transport.

So that is a start, and puts it on a par with its neighbours, and also helps to set up some of the infrastructure that could support RUC for light vehicles, even though it is not on all roads (which is common to all such European schemes, except Switzerland and Iceland).

Light RUC from 2030 announced

The new coalition Government is to introduce RUC for light vehicles by 2030.  The political parties in the coalition had different views on the topic.  The liberal/centre right VVD, centrist liberal D66, centre right CDA and the conservative CU coalition.  The VVD and CDA only wanted it to apply to electric vehicles, but D66 and the CU want it to apply to all light vehicles, including light commercial vehicles, so that is what is going to happen.

It was originally only to apply to electric vehicles, but will be phased in for all light vehicles.

What do we know so far?

· It will apply to ALL light vehicles

· It will apply to distance travelled on all roads

· Charge rates will vary by emissions rating, but not location or time of day

· Once introduced, tolls will be abolished on the three existing/planned toll roads

· It will replace sales tax on vehicles and registration fees, not fuel tax

One report indicated that KPMG had estimated the capital cost of introducing RUC for all light vehicles (9.1 million in the Netherlands) is €160 million (which seems plausible, although the technology proposed is not published), with annual operating costs of €350-450 million (which seems ridiculously high, but again the technical proposal is not reported).

So what now?

2030 is a long time away, so it is entirely possible this wont proceed as expected, except that it is widely accepted that as the electric vehicle fleet grows, revenue from motor vehicles is in decline. Fuel tax revenue will drop, but this wont directly replace it, although it is hard to see it not doing so, in effect.

Key is that the Netherlands is, this time, not considering road pricing to relieve congestion, but just to replace existing revenue sources.  The UK should heed this, as its previous attempt to introduce road user charging sought to fix congestion, but this simply isn't possible until all vehicles are on the system, and that means equipping all vehicles with technology to measure distance by time and location.

The Netherlands is just introducing a basic distance based system, that will only be defined geographically by the borders.  There is a lot to do, but at least this seems like a policy that, as long as it is clear it is replacing sales tax and registration fees, might just be acceptable enough to be a successful fifth attempt at introducing RUC in the Netherlands for light vehicles.

More here and here (both Dutch)

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