Analytics, Estonia, EU – Baltic States, Transport

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EU Directorate: Estonia has the most environmentally unfriendly new vehicle fleet in the EU (with comments from the RB Rail )

BC, Riga, 24.08.2018.Print version
The study "Transport in the European Union - Current Trends and Challenges" was prepared by the Directorate General for Mobility and Transport (DG MOVE). Below the Baltic Course, the trends and challenges of the transport industry in each of the Baltic countries are highlighted, The study "Transport in the European Union - Current Trends and Challenges" was prepared by the Directorate General for Mobility and Transport (DG MOVE). Below the review is devoted to the main problems of the transport industry in Estonia.

Main current issues in Estonia Issue

1 - Rail Baltica In the context of the so-called Rail Baltica project, the Grant Agreement for the EUR 110 million allocated to the Baltic States through the third Connecting Europe Facility call in 2016 has not been signed yet and is at risk. This situation should be addressed by moving towards a much more integrated project delivery organisation. The Commission is discussing this very actively with the authorities of the Baltic States. 

Rail Baltica aims to link Warsaw via Elk, Kaunas and Riga to Tallinn by rail, with a connection to Vilnius. The targeted date for completing the project (2025) was reaffirmed by the Intergovernmental Agreement ratified in 2017 by Estonia, Latvia and Lithuania. The updated cost-benefit analysis of the project, delivered in April 2017, confirmed the expected positive impact on the economic growth in the region and on the environment due to the likely modal shift from road to rail in passenger and freight transport (Ernst & Young Baltic Ltd (2017).69 In October 2017, it was agreed to review the organisational setup of the Rail Baltica project in order to speed up its implementation. The aim is to move to a highly integrated project delivery organisation, notably to ensure the efficiency of EU funding in the framework of the Connecting Europe Facility, cost minimisation, full interoperability and synchronisation of works. 

Issue 2 - Greening of transport in Estonia 
Estonia is unlikely to reach its 10 % target share of renewable energy in transport by 2020. The sales of alternative fuel vehicles have decreased and greenhouse gas emissions from transport are increasing. Estonia has the most environmentally unfriendly new vehicle fleet in the EU with an average CO2 emission of 137 grams per kilometre compared to an EU average of 119 grams in 2015. Transport taxes (excluding fuel taxes) remain amongst the lowest in the EU as there is no charge or CO2 based tax on vehicles applying to road transport, although a new time-based charge on heavy goods vehicles was introduced in 2018. 

Issue 3 - Investment sustainability 
The sustainability of overall transport infrastructure is not ensured. Investments into transport infrastructure depend mainly on EU funds with a focus on major projects, such as Rail Baltica. In particular, investment into secondary infrastructure and maintenance of existing infrastructure is not actually ensured.


Key facts and figures on transport in Estonia

Modal split


The introduction of free public transport in the capital Tallinn where one third of the population lives, has increased the use of public transport by 13 %. In general, buses and coaches remain the main form of public transport with 20 % share of total passenger transport. The use of passenger cars is below the EU average. The modal split in freight land transport is also favourable with only 47.6 % road transport as compared to 71.7% of EU average. Modal split for passenger and freight transport in 2015 Source: EU Transport in figures, Statistical Pocketbook 2017.



Performance of the logistics sector


The World Bank Logistics performance index for Estonia has improved compared to 2010, with Estonia being in 38th position in 2016 compared to 43rd in 2010 and 65th in 2012. Estonia is performing best in timeliness and customs and worst in international shipments. For infrastructure, logistics competence and tracking and tracing, Estonia ranks between 44th and 48th globally.

 

Road safety


In 2016, there were about 54 road fatalities per million inhabitants in Estonia. However, provisional data for 2017 shows an impressive decrease of 32% on fatalities compared to 2% for the EU average. Fatalities in rural areas are highly over-represented in Estonia compared to the EU average. The share of pedestrian fatalities is significantly higher than the EU average (31% versus 21%). Speeding has increased on high speed rural roads in Estonia, as well as the percentage of speed offenders. The alcohol limit of 0.2‰ in Estonia is lower than the common limit of 0.5‰ in the EU.

 

Alternative fuels in road transport


Between 2012 and 2014, Estonia built up a nationwide network of fast-charger stations in the framework of the Electro-Mobility Programme. However, the number of registered new alternative fuel vehicles declined significantly between 2014 and 2015 after abolition of a support scheme demonstrating that without the direct support for buying the specialised vehicles, the take up of either electric or bio-methane run vehicles is unlikely to be considerable. The Electro-Mobility Programme helped to introduce slightly more than 1000 cars into circulation. SOURCE: EUROPEAN ALTERNATIVE FUELS OBSERVATORY (BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle; CNG = compressed natural gas).

 

Market opening in the railway sector


As regards the market share of all but principal rail undertakings as an indicator of access to market for new commercial operators, in rail freight Estonia has an average share compared to other Member States. On the other hand, in passenger rail transport all operations are run by a state-owned enterprise since January 2014. This marks a re-nationalisation of the sector after previous market opening. 46 | Transport in the EU: Current Trends and Issues

 

Share of renewable energy in transport


The current level of renewables in transport remains at 0.4%. Estonia is unlikely to reach its 10% target share of renewable energy in transport by 2020. Estonia amended the Liquid Fuel Act with the aim to incentivise biofuels and is promoting the use of bio-methane in public transport trough requirements in public transport concession tenders. Excise tax policy is also used to promote LPG and bio-methane use

 

Quality of the transport infrastructure in Estonia

Compared to many other Member States that joined since 2004, Estonia ranks highly in the World Economic Forum’s ranking of infrastructure quality. In particular, the port infrastructure is considered to be of high quality. The airport infrastructure, which was very low in the past, has improved a lot since 2014. The destinations directly accessible from Tallinn international airport are increasing, waiting times are short and the airport is well connected via public transport. Tallinn airport is one of the first airports in Europe with a tram connection to the city centre. The overall trend for the quality of land transport infrastructure is positive since 2011. This is despite Estonia having no highways and only limited km of two-lane road. Overall progress of improving the secondary road infrastructure is slow. While the passenger railways have considerably improved in recent years, there are still only limited connections. Graph Source: World Economic Forum, The Global Competitiveness Report. The bars represent the rank of the country compared to the rest of the world, while the lines represent the quality scores in a scale from 1 to 7.





https://ec.europa.eu/transport/themes/infrastructure/news/2018-04-25-transport-european-union-current-trends-and-issues_en


Comments from the RB Rail

“The Grant Agreement for the EUR 129 million allocated to the Baltic States through the third Connecting Europe Facility (CEF) was signed on 13 July 2018. The total value of the Agreement is nearly 130 mln EUR while the CEF contribution will be of a maximum amount of 110 million EUR which is 85% of total eligible costs,”  "Transport in the European Union - Current Trends and Challenges"  conclusions comments Ignas Degutis, Chief Financial Officer and Member of the Management Board AS RB Rail. 
 
“The funding will be used for construction activities in Lithuania on Kaunas–Lithuanian/Latvian border section, including to build a bridge over Neris river and access roads over the line, and to start construction preparatory works on the Pärnu–Latvian border section in Estonia. In addition, the funds will allow to design railway section Upeslejas to the Vangaži maintenance facilities in Latvia. Furthermore, CEF Agreement includes the consolidation of the preliminary technical design for the entire railway line. A number of studies will be carried out, amongst many, focusing on consolidated procurement and economies of scale, supplier market assessment and deployment strategies,” he added.







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