Katie from Seoul | Can Europe’s trains compete with flying?

08 Mar Can Europe’s trains compete with flying?

Posted at 11:14h in Financial Times by Katie 0 Comments

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Discourse on the aviation industr-impact on environment

The pressure about the aviation industry and its impact on the environment is moving into the political mainstream,
- with policymakers in Europe asking whether airlines and airports
  - should be forced to reduce flight numbers to slow emissions growth.
It is a conversation that was absent from public debates and policymakers’ agendas until recently

On the ground…

- Last week Spain followed France in unveiling a limited ban on short-haul flights.
- The Netherlands, Denmark and France plan higher taxes on flying,
- The Dutch government tried to lower flight numbers at Schiphol.

But policymakers also need to acknowledge the popularity of cheap flying and the lack of viable alternatives
- no realistic long-term EU plan for high-speed rail

Rail context

While aviation is a highly competitive marketplace with frequent price wars,
- rail remains dominated by state-run operators whose domestic priorities
  - often trump efforts to improve international connectivity.
Yet in spite of the advantages flying has over rail, many aviation executives worry they will face growing regulatory scrutiny
- if they are not seen to be making progress on decarbonisation.

Aviation industry

Aviation supports close to 5mn jobs in the EU and contributes €300bn, or 2.1 per cent, to European GDP,
But it also accounts for about 4 per cent of carbon emissions and faces a huge technological challenge to decarbonise.
European airlines and airports laid out a detailed plan in 2021 to reach net zero by 2050.
- Most of that will be achieved by switching to sustainable aviation fuels, or SAFs,
  - which are made from feedstocks other than fossil fuels.
They say they can decouple growth from carbon emissions,
Airlines in Europe say they already live with the toughest environmental rules in the world:
- a carbon tax on intra-European flights and a requirement that 6 per cent of fuel on every flight is sustainable by 2030.
Airlines are trying to push back against some of the measures to decarbonise, [arguing] it’s anti-competitive
The industry says the rising cost of the EU’s emissions regime will drive up fares;
- pricing travellers off planes contributes about 15 per cent of the net carbon emissions reduction
  - within the industry’s net zero road map.

Advantages aviation enjoys

Currently, airlines pay no duty on fuel and tickets are exempt from VAT,
- while airports and aircraft makers often receive state subsidy,
That gives flying a cost advantage; found that trains were on average twice as expensive as flight

But problems with rail are…

Cost is not the only issue preventing more rail travel.
- A bigger problem is that the network does not provide the connectivity needed.
flights are almost always quicker than trains.
- Brussels is hoping to change that.
Part of its efforts are to put more concerted focus — and investment — into the socalled TEN-T network
- trans-European spider web of roads and rail lines intended to link the continent’s hubs.
- It forms the backbone of the EU’s land transport policy.
The commission’s overarching but non-binding target is to double highspeed rail traffic by 2030 and triple it by 2050,
- ensuring that passenger trains running on the TEN-T network travel at a minimum speed of 160km/h.

EU investments into rail

The EU moved to boost cross-border rail services in 2016 with new rules to foster competition and encourage new entrants.
It also pushed to make competitive tendering mandatory for public service contracts.
Transport consumes the biggest share of the EU’s €723bn Recovery and Resilience Facility,
- while rail accounts for a majority of projects in the €25.8bn provided for transport by the Connecting Europe Facility
But new rail infrastructure is expensive, often subject to delay and takes a long time to pay back its capital cost, making it
- less attractive to private finance and
- difficult for states to justify when public finances are stretched.
spending €550bn on a “comprehensive” highspeed rail network in Europe could add €750bn in economic value by 2070.
- But efforts to roll out standardised signalling across the EU, s
  - omething Citroën describes as “absolutely essential” for cross-border services,
    - has been patchily implemented and has taken decades.
Whatever Brussels proposes in terms of international connections often butts up against national concerns

Substituting aeroplanes with trains?

the potential for substituting planes with trains was limited;
In contrast to the sometimes-brutal competition in short-haul aviation,
- trains in Europe are mostly operated by state-owned companies with near monopolies in their national markets.
- incumbents are using taxpayer subsidies “to campaign against liberalisation behind closed doors”.
But demand appears to be high enough to sustain more competitive markets

There is potential

a lot of things can be done to increase the capacity of the rail sector,
- but we need to find money for these and we need to have the political will to continue to lower CO₂ emissions
That political will is increasingly under threat from a backlash against Brussels’ green agenda
- in many states ahead of EU elections in June.
  - Politicians fear voters will punish those pushing costly climate-related policies.
Brussels is also wary of measures that might damage the bloc’s competitiveness.

Conclusion

as with other areas of green transition,
- the EU risks falling behind if it does not invest now
While that takes shape, aviation’s expansion — and the environmental opposition to it — looks set to continue