Background
Download Full Report
Key Findings and Recommendations
The transport sector is the EU’s largest source of greenhouse gases, and emissions continue to rise in many member states. Between 1990 and 2022, transport emissions in the EU increased by 26%, while emissions from other sectors fell by 42%. Road transport was the primary contributor, responsible for 73% of sectoral emissions in 2022, driven by growing car ownership, increased road freight activity, and a shrinking share of rail freight.
The EU can enhance the impact of public resources by leveraging private sector expertise, capital, and partnerships to scale results. Financial tools and de-risking mechanisms can help bridge investment gaps, while public-private partnerships in transport infrastructure and services could crowd in global expertise and innovation. Additionally, expanding policy-based conditionalities to EU funds would help maximize their impact and promote best practices across the region.
E-mobility offers significant potential but requires additional action to overcome barriers. The EU accounted for a quarter of global electric vehicle (EV) sales in 2023, yet affordability remains challenging. Policies to incentivize smaller, more energy-efficient EVs and electrifying commercial fleets are key steps. Expanding modern concession models, pooling procurement for electric buses, de-risking mechanisms, and innovative business models for zero-emission trucks are all crucial for advancing sustainable transport solutions.
Urban areas, home to 75% of the EU population, are central to reducing transport emissions. The EU should find ways to improve governance frameworks and diversify financing and funding mechanisms in cities and metropolitan areas. Expanding the application of tools like congestion charges, dynamic parking pricing, and land value capture can help leverage funding sources for sustainable urban transport systems. Learning from the best-in-class examples in Europe and abroad, successful practices could be replicated across the region.
Finally, rail freight holds untapped potential for Europe’s decarbonization goals, despite its modal share falling to 17% in 2022. Targeted investments in cross-border coordination, digitalization, last-mile connectivity, and multimodal logistics can help railways regain competitiveness and boost efficiencies. The EU could also explore alternative funding sources for railway systems, including from the Emissions Trading System, and consider options to increase private sector participation in infrastructure development and management.