Report No. 70290-ge
Promote Low Emission Freight Transport Modes
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- Figure 15
- Rationale for change: all transit trucks are charged a flat fee (200 GEL) regardless of vehicle emission class or weight; this fails to capture marginal social costs incurred by truck transport
- Vehicle Emission Class Truck charges per kilometer (in EURO)
Promote Low Emission Freight Transport ModesWhy this measure? Current condition: international truck transit traffic is increasing, in absolute terms and relatively to total road freight transport (Figure 15) and total transit transport; the rail transport share is declining (Figure 16). Since 2006, total annual international freight transport by road has been growing at an average of 13 percent; annual transit cargo is growing at 21 percent per annum. In contrast, railway cargo throughput has fluctuated and declined during the recession. If these trends continue, road transit transport externalities will continue to rise within Georgian territory, including local emissions, GHG emissions, traffic congestion, and collisions and casualties.CITATION Gla08 \n \t \l 1033 In 2010, total fuel consumption by road freight transport (including both international and local goods movement) was an estimated 462 thousand tons (about 49 percent of total fuel consumption); NOx emissions 20 thousand tons (about 78 percent of total emissions), and PM emissions 900 tons (about 88 percent of total emissions), per year.CITATION Gla08 \n \t \l 1033
Rationale for change: all transit trucks are charged a flat fee (200 GEL) regardless of vehicle emission class or weight; this fails to capture marginal social costs incurred by truck transport. Other European transit countries—Austria and Switzerland—charge more per vehicle or per ton-km than the current flat fee rate in Georgia, even though trucks operating in Georgia are of lower emission class than those in Western Europe, mostly Euro-3 or lower (Table 5). The EU transport policy aims to internalize external costs and is based on the principle of “users-pay-principle”—transport users (passengers and carriers) pay infrastructure and social costs that they incur. In fact, road use charges in European countries are often set to cover the average cost, higher than marginal costs, which include costs associated with road deterioration, emissions and congestion, plus fixed infrastructure costs. In Georgia, transit charges are based on a similar principle—transit trucks, which bring no direct benefits to the Georgian economy, pay for using the Georgian transport network—but existing transit charge levels fail to cover the average costs, nor do they provide incentives for truckers to be greener. Table 5: Comparing transit charges for heavy vehicles
Sources: WB staff calculation based on data from Austrian Motorway Agency (ASFiNAG, www.asfinag.at); Swiss Federal Office for Spatial Development (2012); and Georgian Ministry of Economy and Sustainable Development a Enhanced Environmentally-friendly Vehicles b These values are converted from Swiss Franc (CHF) rates set per ton-km, assuming on average weight of 18 tons for 2-axle trucks, 30 tons for 3-axle trucks, and 40 tons trucks/trailers with for four or more axle. The original fee schedule is 3.07 CHF cents per ton-km for Category 1 (Euro 0, 1 and 2), 2.66 for Category 2 (Euro 3), and 2.26 for Category 3 (Euro 4–5). c This was calculated from the flat fee for all transit traffic: 200 GEL divided by the average transit distance between Sarpi and Red Bridge (approximately 500 km).
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