International Master’s Programme in Environmental Science

Reducing environmental impacts of freight

transport sector: The case of the Czech Republic

Jitka Andersson
Barytongränd 8
224 68 Lund, Sweden
Email: [email protected]

Supervised by:

Bengt Holmberg
Lund University, Dep. of Technology and Society
John Ericssons väg 1
221 00 Lund, Sweden

Lund, Sweden
January 2005
 Abstract

A well-organized freight transport system is essential for economic development and it

offers a wide range of benefits such as accessibility to goods and services. However, it is
obvious that it also causes serious problems in form of negative impacts on environment
and human health. Motor vehicles emit a large amount of pollutants and freight transport
sector is a significant contributor to air pollution at local as well as regional and global
levels. In addition, transport is a major source of noise, and gives rise to other
environmental problems, such as water pollution and fragmentation of land.

The transport system in the Czech Republic has gone through substantial changes since
1990, mostly due to political and economical changes in the country. During this period,
the environmental performance of many sectors, such as industry and energy has
improved; however it is not so in the case of freight transport. The demand for freight
transport in the Czech Republic has been steadily increasing during the latest years and
demand is expected to continue growing. Furthermore, the most polluting road transport
sector has become overwhelmingly dominant. There are several reasons for this
development, such as currant trends in production and logistics and slow adoption of the
railway sector to competition from more flexible and reliable road sector. Moreover, the
external costs of the road sector are significantly higher then external costs of the rail
sector, which makes the road favored at the expense of rail.

The analysis of transport related air emissions has shown that the contribution of this
sector to the total of air emissions is small compared to OECD average. The reason for
this is the high emission intensity of energy and industry sectors. However, freight
transport related emissions of carbon dioxide have been increasing fast during the studied
period and so have emissions of nitrogen oxides. Furthermore, the situation concerning
the exceeding of air pollution concentration limit values in urban areas in the CR is
serious. This shows that the current trends in freight transport performance would lead to
negative effects on human health and environmental degradation and there is urgent need
for measures in order to reduce these effects.

For the reduction of environmental damage caused by road freight transport, there is a
need for strong emission regulations, implementation of new technologies as well as
solutions in order to reduce the demand for transport. Those measures are important in
working towards sustainable transport, however, they are unlikely to divert the currant
development in emission trends. In order to attain a sustainable freight transport sector it
is necessary to increase the share of railways on the freight transport market. Measures
aiming at improving efficiency and opening up the freight railway market to competition
will make this sector more competitive in comparison to the road freight sector.
However, because the forces driving the modal slant towards road transport are powerful,
more efficient policy instruments internalizing the external costs of road transport need to
be implemented.

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 Table of contents

1. Introduction..................................................................................................................... 4
1.1 Objectives ........................................................................................................... 4
1.2 Methods..................................................................................................................... 5
1.3 Limitations ................................................................................................................ 7
1.4 Study area.................................................................................................................. 8
2. Freight transport and environment.................................................................................. 9
2.1. Sustainable transport................................................................................................ 9
2.2 Environmental impacts of freight transport ............................................................ 10
2 .2. 1 Road and railway transport modes................................................................. 10
2.2.2 Air pollution..................................................................................................... 11
2.2.3 Local, regional and global air pollution........................................................... 13
2.2.4 Noise pollution................................................................................................. 13
2.2.5 Land use and habitat fragmentation................................................................. 14
3. Driving forces for freight transport............................................................................... 15
3.1 Driving forces for transport demand....................................................................... 15
3.2 External costs of transportation .............................................................................. 17
4. Infrastructure and organization of transport in the Czech Republic ............................. 19
4.1. Road freight sector................................................................................................. 19
4.2 Rail freight sector.................................................................................................... 19
5. Performance of freight transport sector in the CR ........................................................ 21
5.1 Transport performance............................................................................................ 21
5.2 Modal split .............................................................................................................. 23
5.3 Vehicle fleet ............................................................................................................ 26
6. Air emissions from freight transport sector- the trends and the targets........................ 27
6.1 Energy consumption by freight transport sector..................................................... 27
6.2 Air emissions from freight transport sector ............................................................ 28
7. Measures for sustainable transport................................................................................ 32
7.1. Transport policy and targets................................................................................... 32
7.2 Measures for road freight transport......................................................................... 33
7.2.1 Technical opportunities.................................................................................... 34
7.2.2 Reducing the demand for transport by preventive measures ........................... 35
7.3 Increasing share of railways.................................................................................... 36
7.4 Market based policy instruments for sustainable transport..................................... 37
7.4.1 Fuel taxes ......................................................................................................... 37
7.4.2 Road and Highway tolls................................................................................... 38
7.4.3 Vehicle tax ....................................................................................................... 40
8. Conclusions................................................................................................................... 41
References:........................................................................................................................ 43

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1. Introduction
The development of transport networks has played an essential role in the economic
development in all countries. Freight transport, in all its forms, provides access to
materials, food and goods, enables export and import and is of high importance for
virtually all industries and activities. It is has been well established that economic
development requires a well-functioning transport system (OECD 2003), however, it is
also known that freight transport, especially the road transport sector is a significant
contributor to a wide range of environmental and social problems. Road transport gives
rise to various forms of air, water and land pollution, noise pollution, contributes to
global warming and causes accidents as well as congestion (UNEP 2000).

Freight transport is strongly linked to economic development. Consequently, following

economic growth, freight transport has increased by an average of 2-3 % annually in
OECD countries during the last decades (OECD 2003). Since the political changes in
1989, the Czech Republic (CR) as well as the whole Central and Eastern Europe has
experienced a tremendous increase in freight transport by road. In contrast, rail freight
transport, which is considered more environmentally sound experienced a substantial
decline (OECD 2000). A projection of current transport trends in Central European
countries from 1994 to 2030 shows a large increase in road traffic, road freight transport
would be four times the volume of 1994. The consequences of this growth of road traffic
would result in unacceptable environmental and social effects and there is an urgent need
for efficient policy measures changing this trend (CEI 1999).

1.1 Objectives

The main objective of this study is to focus on the different ways of reducing the
environmental impact of freight transport in the Czech Republic and thus, make this
sector more sustainable. Existing policy measures for reduction of environmental impacts
of transport currently applied in the Czech Republic will be analyzed. This analysis will
asses a question if those measures are powerful enough to divert the current trend of
increasing road freight transport. The possibility of enhancing rail transport and thus,
stabilizing and successively decreasing freight transport by roads will be the main focus
of this paper.

The main objectives are:

• Analyzing the development of the freight transport system performance in the

Czech Republic since the beginning of the transition period in 1990. The focus of
the analysis is on rail and road modes.
• Identifying the main driving forces for the increasing share of road transport in
the CR
• Establishing the relationship between increasing road freight transport and its
effects on air pollution

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 • Analyzing policy instruments used by the Czech government for achieving its
targets
• Proposing improvements for solutions for reduction of the negative
environmental effects of freight transport sector

1.2 Methods

In order to achieve a better understanding of the studied system and relationships

between all its elements a mental model in form of Causal Loop Diagram (CLD) was
developed (see figure 1). In this mental model, it is hypothesized that economic growth
increases the demand for freight transport. At the same time a well functioning freight
infrastructure is necessary for economic development, thus investments in infrastructure
will increase economic growth. With increasing demand for freight transport, roads get
congested and the traffic flow will decelerate. The governments will increase its
investments in new infrastructure and at the same time, better infrastructure will make it
easier and faster to transport goods thus, increase the demand for freight transport. This
shows that increasing transport demand and investments in infrastructure are reinforcing
one another.

This model is simplified, thus showing that freight transport can be conveyed either by
rail or road transport (while in reality air and inland waterway can also be used). Those
two variables balance each other, thus more road transport means less rail transport and
less road transport will to certain extend increase road transport.

The higher demand for road transport will increase air pollution and thus increase
external costs for society. This is also very simplified as rail transport is considered in
this model not to cause any air pollution, which of course is not true. Rail transport also
gives rise to air pollution and this varies according to whether the locomotive is driven by
diesel or electricity. However, the air pollution caused by road freight transport is much
higher thus, the only link between road transport and air pollution is considered in this
CLD.

It is further hypothesized that with increasing external costs for society, more efficient
policy measures leading to better use of technological innovations, improved efficiency
of rail network and increased prices for road transport will have to be implemented in
order to change the current trends of increasing the share of road transport and thus
reducing air pollution. Increased prices for road transport will bring changes in the
logistic organization of production and distribution of goods which would reduce the total
demand for freight transport. At the same time, increased prices for road transport can
also divert the modal from road to rail, to some extent.

To fulfill the objectives of this thesis a literature review of scientific journals and policy
documents in the field of freight transport was conducted. For the analysis of transport
performance and air emissions, secondary quantitative data was collected and analyzed.
Statistical data was largely retrieved from studies conducted by the Ministry of Transport

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of the CR, The Transport Yearbook of the CR and The Environmental Yearbook of the
CR. However, additional data from articles published in Czech scientific journals were
used.

Figure 1: CLD The relation between freight transport demand, air pollution and policy
measures

+ +
Ec onomic growth Demand rail
+
+ -

+ + -

New roads Demand for freight transport Demand road

- +
+
Change in logistics +
+ Technologic al inovation - Air pollution

Road transp. price +

+
+
External costs for soc iety
+
Policy measures
Efficient rail network

In order to support the information retrieved from literature, five qualitative interviews
were conducted with representatives of university and governmental institutions dealing
with transport questions as well as an interview with a representative of a private haulage
company. The qualitative research interview is more appropriate for this study as it
allows more flexibility and gives more factual data, which is difficult to obtain from other
sources. The persons interviewed work with transport questions and have good
knowledge of the freight transport system in the Czech Republic. Their opinions and
views on the problem and potential solutions were of great importance to this study.

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There are certain ethical rules which are important to follow before and during a research
interview. The researcher must inform the persons that will be interviewed about the
purpose of the interview as well as about the risks the interview can cause. Another
important rule is to protect the privacy of the interviewed persons and inform them in
case this data will be published (Kvale 1997). Those ethical rules were followed and
persons who were participating in the interviews were informed of all those facts prior to
the interviews. The person representing of the haulage company did not wish to be named
or the name of the company to be used, thus an aliases will be given to him and the
company. Names, institutions and date of interview are in table 1.

Table 1: Information about persons participating in interviews

Number Name Institution Date for

interview

1 Zeman, Jan The Czech Ecological Institute, September 14,

Prague 2004
2 Bendl, Jiri The Ministry of Environment of the September 22,
CR, Prague 2004
3 Dufek, Jiri Transport Research Center, Brno September 8, 2004
4 Straka, Ivo College of Business Studies, Prague September 17,
2004
5 Petera, Jan Haulage Company, Prague September 21,
2004

The questions were carefully prepared before the interview and given in a structured way.
All interviews were taped. Additional email interviews were conducted with several
employees of Transport department and Czech Statistical Office in order to achieve
additional information not published in statistical yearbooks.

1.3 Limitations

The issue this paper deals with is complex and the coverage is by necessity far from
complete. In order to address the objectives, a broad and multidisciplinary approach is
used in this study. This approach makes it impossible to go into depth in any of the many
subjects dealt with in this thesis and gives the big picture of the whole situation. Road
transport creates many environmental problems such as air pollution as well as to soil and
water pollution and waste generation. However, the focus of this paper is only on the
most significant air pollutants from freight transport sector.

Although the freight transport in the CR consists of 5 modes: railways, road, inland
waterway, air and pipe-lines, only road and rail will be considered this thesis, the two
overwhelmingly dominant modes in the Czech freight transport sector.

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1.4 Study area

As stated in the title of the thesis, the focus area of this study is the Czech Republic (CR).
The country was founded in 1993, when Czechoslovakia split into two independent
states: the Czech Republic and the Slovak Republic. The area of the CR is 78,864 km2
with around 10.3 million inhabitants. 1.2 million people live in Prague, the capital
(OECD 2000). The country is located in central Europe, bordering with Germany,
Austria, Poland and The Slovak Republic (see figure 2).

The Czech Republic is a locked country, thus the modes used for the freight transport are
road transport, railway, air and inland waterways. However, road and railway are the
overwhelmingly dominant modes with the share more then 99 % in 2003 (CDV 2004).

Figure 2: Map of the Czech Republic

The Czech Republic has gone through a radical political and economical transformation
during the past decade. In 1989, the communist one party political system was abolished
and replaced by multiparty parliamentary democracy. During the transition period, all
sectors, thus even freight transport sector, had gone through the process of privatization
and liberalization. Most of the work in this field has been finalized, much due to
preparations for accession to the EU, which occurred in May 2004.

Since the beginning of the transition period, the improvement of the degraded
environment was among the main issues in the CR and the country has experienced a
fundamental decrease and stabilization in the air pollution level in all the main indicators
(CHI 2003). However, during this period air pollution related to the freight transport
sector increased considerably, mainly due to uncontrolled growth of road freight sector.

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2. Freight transport and environment

2.1. Sustainable transport

There are many definitions and ideas associated with sustainability. This term became
popularized by release of the Brundtland Report, where the concept of sustainable
development in its broader version is defined as “development that meets the needs of the
present without compromising the ability of future generations to meet their own needs”
(WCED 1987, 43). This vision has become a framework for policy debates at all levels.
The United Nations Document from 1992, Agenda 21, contains 40 chapters that define
the more specific objectives and strategies for practical application of those targets. An
important outcome of Agenda 21 is the notion of three dimensions of sustainability: the
economical, social and ecological. Those three dimensions are not seen as contradictory;
on the contrary, all these conditions for development must be taken into account (SOU
1997).

Since release of the Brundtlnd Report, the world‘s governments and policies have
increasingly been oriented towards sustainable development. A central feature of
sustainable development is the notion that sustainability requires a complex process of
trading off social, economical and environmental priorities. Development is a
transformation process, which by combining economic growth with broader social and
cultural changes, helps individuals to realize their potential. The dimension of
sustainability brings the recognition that the development must respect the limits imposed
by ecosystems and that environmental considerations must be embedded in all sectors
and policy areas (Carter 2001).

Sustainability is a relevant issue for transport, because on one hand transport is connected
to economic growth while at the same time it puts enormous pressure on the
environment. Consequently, there have been many attempts to define sustainable
transport. Black (1996, 151) suggests a definition of environmentally sustainable
transport as “satisfying current transport and mobility needs without compromising the
ability of future generations to meet these needs.” He gives reasons for why the current
transport system is not sustainable. Those include the fact that petroleum reserves are
finite and their emissions have impact on urban air quality and as well as on global
environment. Also injuries, fatalities and congestions are issues making transport non-
sustainable. Other, short terms problems such as noise pollution or water pollution due to
runoff from streets are considered as important, however not preempting the future
generations from meeting their transportation needs and thus not considered as creating
long term problems of sustainability (Black 1996).

OECD has defined environmentally sustainable transport as “Transport that does not
endanger public health or ecosystem and meets mobility needs consistent with (a) use of
renewable resources at below their rates of regeneration and (b) use of non –renewable
resources at below the rates of development of renewable substitutes” (CEI 1999, 20).
More specifically, a sustainable transport system is one that:

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 • “allows generally accepted objectives for health and environmental quality to be
met, for example, those concerning air pollutants and noise proposed by the
World Health Organization” (OECD 2002, 16)
• “is consistent with ecosystem integrity, for example, it does not contribute to
exceedence of critical loads and levels as defined by WHO for acidification,
eutrophication and ground level ozone; and” (ibid, 16)
• “does not result in worsening of adverse global phenomena such as climate
change and stratospheric ozone depletion” (ibid, 16)

OECD defined six criteria for the attainment of environmentally sustainable transport:
reduction of particulates, nitrogen oxides (NOx) and volatile organic compounds (VOCs)
emissions, use of land for transportation, climate change and noise pollution. For each of
those criteria, a long term objectives were defined (OECD 1997 (a)). When referred to
sustainable transport in this thesis, the definition of OECD is carried in mind.

Thus, there are various definitions and explanations of sustainable transport. However,
the exact definition of sustainability does not change the fact that the current transport
patterns contradict the objectives of sustainable development. The conclusion of the
majority is that fundamental changes in technology, design and financing of transport
system are needed (Greene and Wegener 1997).

2.2 Environmental impacts of freight transport

A well-organized freight transport system is essential for economic development and

social well-being. It enables trade and offers a wide range of benefits such as accessibility
to goods and services (UNEP 2000, 4-6). However, transport is also identified as one of
the main consumers of fossil fuels and thus a major contributor to serious problems in
form of negative impact on environment and human health (Alvarsson and Andersson
1995). Motor vehicles emit a large amount of pollutants and transport sector is a
significant contributor to air pollution at the local as well as regional and global levels
(Westerholm 1996). Besides air pollution transport gives rise to other environmental
problems such as water pollution, uptake and fragmentation of land, noise pollution, and
generation of waste and risk of accidents (UNEP 2000).

2 .2. 1 Road and railway transport modes

Current transport sector is mostly based on fossil fuels and its energy consumption is seen
as having a major effect on environment (OECD 2001 (a)). Because oil consumption can
be directly related to air emissions a key factor in determining transport related
environmental impacts is energy intensity of different transport modes. While rail freight
transport requires approximately 0.09 kWh / tonne-kilometer, truck distribution requires
0.65 kWh / tonne-kilometer (Holmberg 2004). Freight transport section is an important
element concerning energy use as it accounts for one third of the total transport energy

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demand in OECD countries. Motor vehicles are by far the most important concerning
intensity of use and environmental impacts (UNEP 2000).

Thus, different transport modes have varying degrees of impact on the environment.
Railway is considered to be an environmentally friendly transport mode, mostly due to
lower energy consumption compared to a lorry with the some freight capacity. However
railway demands more energy when accelerating and demands at least two reloading
stages before reaching the final customer. Also, its environmental effects depend on
whether the train uses electric or diesel power. While emissions caused by electrified
railways are largely determined by the source of power generation, diesel locomotives
emit the same pollutants as road transport (Alvarsson and Andersson 1995).

Most widely used engine in heavy duty vehicles is diesel engine. In comparison to petrol
engines, diesel engine has better fuel economy and higher combustion temperatures.
Because of the fact that the combustion is almost complete the diesel engine gives rise to
low hydrocarbons (HC). Also the fact, that diesel engines work with access to air
ensuring efficient combustion and thus eliminating emissions of carbon monoxide (CO).
However, the same factors that support the low emissions of HC and CO, high
combustion temperatures and access of air are the same factors that cause the formation
of high emissions of NOx to the air. Thus, in comparison with petrol engines, diesel
engines contribute very little to CO and HC emissions but at the some time their
contribution to NOx emissions is high. The emissions of carbon dioxide (CO2) are directly
related to the fuel consumption (Alvarsson and Andersson 1995).

2.2.2 Air pollution

Car emissions are the combined effects of 10 000 – 15 000 different chemicals, a fraction
of which have been identified and quantified (Westerholm 1996). The main pollutants
emitted from transport are carbon dioxide (CO2), carbon monoxide (CO), nitrogen oxides
(NOx), particulate matter (PM), volatile organic compounds (VOC) and sulphur dioxide
(SO2) (OECD 2001 (a)). The following paragraphs will discuss the most significant
environmental and health effects of these pollutants.

Emissions of CO2, HC (mostly methane) and nitrous oxide (N2O) contribute to global
climate change (OECD 1997) and thus contribute to pollution on global level. These
gases accumulate in the atmosphere and absorb and trap some of the infrared radiation
radiated by the Earth’s surface. This is called greenhouse effect and it is a natural
process. However, increasing concentrations of greenhouse gases in the atmosphere
enhance the Earth’s natural greenhouse effect and thus raise the average global
temperature. This effect is also called global warming (Miller 2004).

Nitrogen oxides (NOx) are chemical species containing nitrogen (N) and oxygen (O),
particularly the reactive form nitric oxide (NO) and nitrogen dioxide (NO2). Nitric oxide
is colorless gas that occurs in extremely low quantities in the atmosphere, but which is
nevertheless regarded as a significant pollutant and contributor to acid rain. Human

11
health effects of NO2 are causing concern, especially in urban areas. NO2 can cause lung
irritation, asthma and chronic bronchitis and at high concentrations even pulmonary
edema. Epidemiological studies have shown an increased frequency of respiratory
diseases at children younger then 12 years exposed to high levels of NO2. Also, repeated
respiratory diseases at childhood are considered as risk factor for high inclination to lung
diseases at adult age (Adamec et al. 2002).

Sulphur dioxide (SO2) is a colorless gas that is soluble in water. At higher concentrations
in the air, SO2 gives rise to effects in the form irritation of the mouth and eyes, coughing
and breathing difficulties. SO2 is one of main contributors to acid rain which causes
damages on buildings, statues and metals (Alvarsson and Andersson 1995)

Carbon monoxide (CO) is a poisonous gas, reacting with hemoglobin receptors, and
competes with oxygen. This reduces the ability of blood to transport oxygen to the cells.
This has numerous effects on humans and animals such as dizziness, headaches,
impairing perception and thinking. In extreme cases of high level and bad ventilation, it
can cause a coma, irreversible brain damage and even death (Miller 2004).

Suspended particular matter (SPM) is a range of small particles and droplets, which
remain suspended in the atmosphere and create dust, smoke and haze. Diesel engines are
the main emitters. SPM can cause various health effects such as lung damage, bronchitis
or asthma. Toxic particulates such as lead, dioxins or PCB can cause cancer and damage
to reproductive systems (Miller 2004). In addition, particulates can accumulate in the
atmosphere and deposition on leafs may reduce photosynthesis and thus the growth of
plants (Rodrigue 2004).

Volatile organic compounds (VOCs) are organic compounds which include pure
hydrocarbons and organic compounds containing chlorine, sulfur, or nitrogen. Some of
VOCs are highly toxic and are considered human carcinogens. The compounds causing
most concern are benzene, polycyclic aromatic hydrocarbons (PAHs) and aldehydes.
Benzene can cause dizziness, headaches and at high concentrations even unconsciousness
in humans. Repeated exposure to high levels, benzene increases incidence of leukemia
and US EPA has classified benzene as human carcinogen. Animal studies carried on
pregnant animals have showed adverse effects on the fetus, such as low birth weight,
delayed bone formation, and bone marrow damage (U.S. EPA 2004 (a)). Also some of
PAHs are considered as possible human carcinogens as many animal studies have shown
its carcinogenic effects. Formaldehyde (CH2O) a form of aldehyde, which is another
compound belonging to VOCs is also carcinogenic and highly toxic to human health
(Adamec et al. 2002).

Some chemicals emitted by vehicles can react with one another and have additional
impacts beyond the problems caused by each individually. An example is photochemical
smog formed through several chain reactions. When nitrogen dioxide (NO2) is exposed to
ultraviolet radiation from the sun, it is converted to nitric oxide (NO) and oxygen (O)
atoms. Being highly reactive, oxygen atoms react with O2 to produce ozone (O3) (Miller

12
2004). Breathing ozone causes various health problems including chest pain, coughing or
throat irritation. It can also worsen bronchitis and asthma and reduce lung function.
Furthermore, ozone also damages vegetation and ecosystems (U.S. EPA 2004(b)). In
addition, oxygen atoms and ozone also react with VOCs (mostly hydrocarbons) and
produce aldehydes. Also hydrocarbons, oxygen and nitrogen dioxide react and produce
peroxyacyl nitrates (PANs). Collectively, NO2, O3 and PANs are called photochemical
oxidants and create photochemical smog (Miller 2004).

2.2.3 Local, regional and global air pollution

As mentioned above, the effects of transport related to air pollution can be seen at three
different levels: local, regional and global. At the local level, effects on human health
caused by nitrogen oxides, VOCs and particles emitted by diesel vehicles are of the
highest concern (OECD 2001). Furthermore, degrading the urban environment in form of
discolored and damaged buildings and other objects is also of a concern (Miller 2004).

Regional impacts of car emissions include acidification, eutrofication and formation of

ozone and photochemical smog. Sulphur dioxide and nitrogen oxides are major pollutants
that lead to human - caused acid rain, which has various impacts such as soil
acidification. Decreased pH of soils has negative impact on forests and ecosystems.
Nitrogen oxides also contribute to eutrofication of lakes and coastal areas. One of the
major effects of eutrofication is the stimulation of algal growth in water. The
decomposition of dead algae depletes oxygen in the water, with killed fish and other
aquatic animals as a result (Miller 2004).

Enhancing of Earth’s greenhouse effect and rise in the Earth’s temperature, caused
mostly by emissions of CO2, CH4 (methane) and nitrous oxide (N20), is environmental
problem at global level. International Panel on Climate Change (IPCC) has stated that,
“climate change is likely to have numerous negative effects on human development and
wellbeing” (McCarthy et al. 2001, 84). Even though the warmer climate might have some
positive effects, such as more precipitation and increased food production in some areas,
the negative effects are a big threat for the whole planet. The possible negative effects are
changes in water distribution, with a risk of expanding of desert in certain areas and
heavy precipitation in others. Raised temperatures will facilitate for some animal and
plant species to spread and at the same time threaten species with specialized niches.
Also, rising of sea level and thus flooding low-lying costal regions is an expected
consequence of increased global temperatures (Miller 2004).

2.2.4 Noise pollution

Traffic creates a major source of noise, especially in urban areas. Noise can be described
as unpleasant and it is affecting wellbeing of people. At higher levels noise pollution
contributes to various health problems such as stress, sleep disturbances, cardio-vascular
disease and hearing loss. There are surveys showing that people perceive noise pollution
as more affecting than any other source of pollution (OECD 1997 (b)). Road transport

13
accounts for approximately 70 % of total transport related noise emissions, while noise
caused by rail contributes by 10 %. Main sources of noise are the engine and the friction
of the wheels over the road surface. Also travel speed can be directly linked to the
intensity of noise (Rodrigue 2004). According to WHO, the outdoor noise levels in
residential areas should not exceed 55 dB(A) during daytime and 45 dB(A) during night-
time. However, to reach such levels would require both significant reductions in traffic
activity and development of noise protection measures (CEI 1999).

2.2.5 Land use and habitat fragmentation

The existence of infrastructure requires land for roads and land transportation systems are
one of the main causes for habitat fragmentation, the division of ecosystem into smaller,
partially isolated units. This can result in destruction of habitats, injury or killing of
animals, disturbance and other negative effects on animals due to noise or movement.
These impacts can reduce the chance of survival of populations of individual species and
thus influence essential processes of the whole ecosystem (Bohemen 1998). Furthermore,
the diversity of species in ecosystems is a function of the total size of the area of habitat,
thus dividing this area by a road can cut diversity in half rather than reducing it only by
the actual area used by the infrastructure (OECD 1997(b)).

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3. Driving forces for freight transport

The phenomenon of increasing demand for freight transport can be observed in all
industrialized countries. Furthermore, the most polluting road freight transport has
become the overwhelmingly dominant mode. In order to understand this unfavorable
trend, it is necessary to identify the driving forces behind the demand for freight transport
as well as driving forces for increasing share of road transport.

3.1 Driving forces for transport demand

Freight transport can be defined as a system used for movement of goods in space and
time. This service is integrated in the production and distribution processes and it must
match the requirements made by the nature of the goods moved, such as complexity,
speed or precision. Freight transport system does not operate independently of the
surrounding systems; on the contrary it is highly dependent on economic, political or
spatial systems (Chapuis et al 1993). Thus, any changes in governmental policies, the
level of economic activity or investments in infrastructure will have impact on a countries
freight transport performance.

Historically, there has been a strong correlation between the growth in economic activity
(measured in GDP) and the demand for freight transport in all OECD countries. With
growing economy and increasing incomes it can generally be assumed that demand for
freight transport would increase and the majority of road freight traffic forecasts assume
that these variables will remain closely correlated for the foreseeable future
(OECD 2003). In Europe, each 1 per cent growth in GDP has given rise to 0.9 per cent
increase in freight transport. These figures are even higher for road transport where 1 per
cent growth in GDP was accompanied by a 1.7 per cent growth in traffic (Short 1995)
while on the other hand the share of rail continued to decrease and the statistical
correlation of this mode with GDP is quite low. Consequently, it is often argued that the
demand for freight transport is a derived demand from productive activities and transport
using sectors (OECD 2003).

However, at the same time a well functioning transport system is essential for economic
growth and investments in transportation systems have stimulated economic development
in various regions of the world (OECD 2003). Consequently, investments in transport
infrastructure are also a driving force for freight transport. Also, when the roads get
congested, policy-makers argue for building new roads to meet an increasing demand for
transport. It is often argued that improvement of road infrastructure both contributes to
economic progress and help the environment by relieving congestion-related air
pollution. However, decreasing congestions and improving the attractiveness of transport
system will increase traffic and therefore lead to more traffic-related pollution. There is a
close connection between the improvement of transport infrastructure and economic
globalization. Thus, with improving infrastructure, goods are being shipped over longer
distances (Pfleiderer and Dietrich 2003).

15
When discussing the problem of rising goods transport one must also stress the
importance of increasing globalization of the world’s economy as one of the most
important driving forces. Jandele defines globalization as “the increasing geographical
scale of economic, social, and political interactions” (Jandele 1997, 199). This refers to
increasing international trade, investment transactions and growing mobility of capital.
Also changing patterns of institutional organization and structural changes in the basic
rules of economic order are characteristics of globalization (Jandele 1997). Many
countries have adopted free market principles and lowered the barriers to import of goods
and services. This has speeded their economic growth and integration into the global
economy. With this fact in mind, it is not surprising that during the last decades the world
has experienced a steady increase in international trade. World export increased from 7 %
in 1950 to 14 % in 1992 (Veen-Groot 1999).

Another important driver behind the growth in freight transport is the reduction in
transport costs for companies. Freight transport has become cheaper over the last
centuries, partially due to decreasing fuel and vehicle prices (OECD 2003).
Manufacturing companies want, for a defined level of quality, to minimize all their
production, storage and transport costs and thus reach optimum total costs (Chapius at al.
1993). Consequently, when transport becomes cheaper, companies seeking to minimize
their total costs will weight the economic benefits of using more transport and thus saving
money on warehousing and production costs (Bleijenberg 2002). The low transportation
prices increase transports and lead to what Short (1995) calls “irrational” transports.
These refer to the cases such as when almost completed garments are sent by trucks from
United Kingdom to Morocco for the addition of buttons and zips and then back by truck
to England. Even though Short calls those transport irrational, those are completely
rational from the point of view of the company seeking to minimize all its costs.
However, this development is influenced by the fact that transport users do not pay full
costs of their activities and cause negative externalities to society. The main negative
externalities linked to road transport will be discussed later in this thesis.

Logistical organisation of production and distribution of goods also highly influences

transport volumes and the current trends in logistics and production can be considered as
drivers for freight transport demand as well as for increasing share of road transport.
Contemporary production and distribution activities are not organized by single firm, but
more and more practiced in networks of suppliers and subcontractors (Hesse and
Rodrigue 2004). The competition of the global market force companies to be highly
flexible and at the same time more and more firms concentrate only on the main skills
they can offer in order to be able to withstand world competition. Those trends of high
degree of specialisation and differentiation result in reduction of the level of in-house
production. Taking into consideration this trend together with the policies of deregulation
and liberalization this gives rise to significant increase in the volume of traffic and
frequency of consignments and at the some time reduce the size of consignments
(Stabenau 1996).

A trend that has emerged simultaneously with reducing of in-house production is the
strategy of reducing the stocks and feeding production lines with products delivered “Just

16
in time” (Council of Logistical Management 2004). Applying JIT production means that
producers have no more inventories on the production line then is needed for the
production cycle. This implies deliveries in much smaller sizes but more frequently.
Furthermore, the experience from U. S. automobile industry accommodating JIT
production system caused modal shift from the traditional 50 / 50 truck / rail to as much
as 80-90 per cent truck (Whitford 1987). Thus, the current trends in production system
and logistics with demand of flexibility, frequent deliveries in smaller volumes are not
only increasing the freight transport demand but also influence the modal split in favor to
road freight transport.

3.2 External costs of transportation

Above, it has been stated that low transportation prices increase the transport demand.
The price of transports is determined by supply and demand, but transport is causing
significant environmental and social costs that are not included in its prices. Neglecting
those costs makes a distorted picture of reality (Harris 2002) and contributes to increasing
transports. Thus, transport costs can be divided into internal and external costs. Internal
costs are the costs borne by the person using transport in form of for example time, taxes
or road tolls. On the other hand, when a transport user affects others well-being without
paying for it, then those costs are external for him. The most significant external costs
caused by transport are costs caused by traffic accidents, air and noise emissions and
congestions. The sum of external and internal costs is also called social costs and table 2
shows examples on different external and internal costs of transport. Thus, transport
externalities refer to situations in which transport user does not pay for the full cost of his
/ her activity, or does not receive the full benefits from it (European Commission 1995).

Table 2: The costs of transport

Source: European Commission 1995

17
There are countless studies evaluating external costs of transport, but quantification of
external costs is difficult and the results of different studies vary according to the
methodology used. Some external effects can be directly measured in monetary terms,
such as hospital care, or production losses due to air pollution. However, external effects
of transportation affect us more as welfare effects then as monetary costs and there are
different ways for their evaluation. Welfare effects can be transferred to monetary values
as willingness to pay for increased safety or quality of life, or willingness to accept, thus
what would be an adequate compensation for deteriorated quality of life (Hansson and
Markham 1992). The willingness to pay method has been used for decades; however it
has also received severe critique for not being morally acceptable or for overestimating
the values. That’s why new, improved techniques for this method have been continuously
developed. Another problem associated with this method is that not all countries use this
method to the some extends, thus comparing of the results is difficult (CDV 2002, 10).

However, despite the problems concerning the methods, the fact that transport sector
causes significant external costs is well acknowledged and the need of their internalizing
is generally accepted. According to a review of existing literature carried out by the
European Commission (1995), the rough estimates of external costs for accidents, noise
and air pollution and climate were in 1995 33.2 ECU per 1000 tonne-km for road freight
transport and 5.3 ECU per 1000 tonne-km rail freight transport. Although the evaluation
methods vary, those numbers show that the external costs of freight transport are large
and that the external costs of road freight transport are much higher then those of rail
freight transport. This fact gives advantage to the road transport because, according to
(Hansson and Markham 1992), in case that there are different external costs for different
transport modes, the modes with large external effects will be favoured at the expense of
modes with relatively little external costs.

18
4. Infrastructure and organization of transport in the
Czech Republic
4.1. Road freight sector

As all other enterprises, even road freight transport sector was owned by the state until
the downfall of communist regime in 1989. The liberalization of this sector started at
1991 and it can be considered to be successful, from free market point of view.
Privatization started at 1991 and the governmental price regulations were abolished the
same year. Today there are no numerical restrictions on entry to this business and prices
are not controlled. The responsible authority for regulation of the road freight transport
sector is the Ministry of Transport and Communications of the CR (OECD 2001(b)).

The data on freight prices is not collected systematically in the CR, however the prices
have fallen substantially compared to general price level and the degree of competition
on the road market is very high (ibid.). The competition has increased even further since
the CR joined European Union in May of 2004. The reason for this is that before entering
the EU, trucks often waited at the borders for many hours for custom clearance. Unused
vehicles and drivers were causing economic losses on a big scale. After entering the EU,
the custom clearance was abolished and the trucks pass through the borders within a few
minutes. This means that the traffic goes much faster and the trucks which used to stand
at the borders can be utilized today. Thus, the supply is much higher then demand, which
is further pressing down the prices (Interview person 5).

4.2 Rail freight sector

The rail freight sector in the CR has also gone through substantial changes since 1990;
however the transformation process of this sector has been more difficult then in the case
of road sector. At 1995, the competition was introduced in the Czech rail sector. The
access to rail sector is regulated by The Railway Authority, an independent governmental
office, ensuring safety by licensing operators and drivers and giving technical approval to
rolling stock. Since 1995 some private entry has occurred, however mostly on dedicated
short haul high weight routes. The problem is that the 1994 Railway act ensures free
access to track, but not to the terminals, rolling stock or other equipment. Thus, Czech
railways can forestall some entry to the sector. However, it can not forestall entry by
operators having own necessary equipment, e. g. coal mining company shifting coal to
power station owning its own equipment (OECD 2001(b)).

The organization of the rail freight sector has changed radically by adopting the Czech
Railway Transformation Act in January 2003. This resulted in the division of the 100 %
state owned governmental organization Czech Railways into Railway Routes, the owner
and responsible authority for rail infrastructure and Czech Railways join stock company,
responsible for rail operations (Logistika a Doprava 2002).

19
Czech Republic has more then 160 years of tradition by railway transport with the density
of railway infrastructure 0.12 km /km2, which is much higher then EU average. The
density of electrified rail is much less, 0.036 km/km2, which nevertheless is also a little
bit higher then EU average (Kasltlová et al. 2003). The density of railway network is
highest at industrial and densely populated areas in the central and northern parts of the
country (see figure 3). At more then 90 % of the area of the CR, the distance to closest
railway is less then 10 km. With 29 crossing points, the Czech railway network is well
connected to networks in neighboring countries (Kloutvor et al 2001).

Thus, the high density of railway network shows that there is a potential for higher use of
railways on the freight market. However, it is also necessary to emphasize that the quality
of the railway infrastructure is not good, so the possibility of its utilization in freight
transport, with high demand on speed and time accuracy are limited. According to
Kloutvor et al (2001) only 10 % of the tracks are able to keep the speed of
120-160 km / h. Furthermore, only 28 % of the tracks comply with international
standards for axel load (22.5 t) which is an important factor for freight transport. Poor
maintenance of the infrastructure causes that the speed needs to be reduced on many parts
of the railway net, which is causing time delays. This poor condition of the infrastructure
is naturally caused by lack of money for necessary reparations and investments. Almost
all investments are used for building of the corridors connecting to the Trans European
Network (see railway transit corridors in figure 3), so the rest of the trucks receive
minimum financial support, resulting in further deterioration (Interview person 1).

Figure 3: Railway net in the CR

20
5. Performance of freight transport sector in the CR
As was discussed in the previous chapter, the transport sector in the Czech Republic has
gone through vast changes since 1990, mostly due to political and economical changes in
the country. During this period, the environmental performance of many sectors, such as
industry or energy has been improving. However, it is not the case of the transport sector,
which is showing the opposite trend. In this chapter, the performance of freight transport
sector as well as modal split in the Czech Republic during the period 1990 – 2003 will be
analyzed. Also, technical condition of vehicle fleet, which is an important factor
determining environmental impact of transport sector, will be shown.

5.1 Transport performance

The demand for freight transport has been increasing in almost all industrial countries. In
OECD countries, the overall freight transport increased by an average of 2-3 % annually
since 1970 (UNEP 2000). The development of freight transport performance in the CR,
divided into different transport modes is shown in table 3. Transport performance in this
table is measured in tonne-km and is the amount of the transport (measured in tonnes) for
a certain period multiplied by the average distance traveled of the goods transported
(measured in km). There are several other ways to measure transport performance, such
as in tonnes or in value of the goods. The data on total volume of goods does not say
anything about the distances the goods is transported. The distances, however is
important for showing the environmental impact of the transport sector. Neither the
information about the value of goods transported can give any information about the
distances the goods has been transported. Thus, transport performance measured on
tonne – km basis was chosen as it was assumed to give an adequate picture of transports
environmental impact.

Table 3 shows that the total freight transport performance had decreased between 1990
and 1994. As discussed in the previous chapter, transport demand is strongly linked to
economic activity in the country. Thus, this decline in transport performance can be
explained by economic recession and a decrease in the GDP that occurred after the
collapse of the communist regime in 1989. Furthermore, in the beginning of 1990s, the
Czech economy experienced large changes in the structure of industry with a decrease in
the share of heavy industry, reorientation on the import of iron ore with higher content of
iron and reduction of coal use. All those factors contributed to the decline of transport
volumes (Interview person 4). However, in 1993 transport demand, following economic
recovery, started to grow again and basically followed the development of GDP. The
linkage between GDP and transport performance in the Czech Republic is shown in
figure 4. On graph y-axis, there is transport performance in billion tonne-km and GDP in
billion USD. It shows clearly that transport performance is following the development of
GDP. The graph also shows that both transport performance and GDP had been steadily
increasing since 1998.

21
According to interview person 4, the GDP in the Czech Republic can be expected to grow
at a rate around three per cent annually. Taking into consideration this and the fact that
none of the changes in the industrial and energy sectors that occurred at the beginning of
1990s is going to be repeated, it can be assumed that the demand for freight transport will
continue grow in the future. The only way to divert this is to introduce efficient policy
measures for decoupling economic growth and the growth of transport demand.

Table 3: Transport performance in freight transport 1990 - 2003 [billion tonne-km]

Transport Year
Mode 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Road total
16,82 20,25 25,26 29,81 32,50 34,55 40,64 33,91 36,96 39,03 40,26 45,06 46,56

Railway
41,14 31,11 25,14 22,70 25,50 22,46 20,97 18,76 16,71 17,30 16,88 15,77 15,85

Electric traction
34,81 26,48 21,59 19,43 20,66 19,10 18,68 16,90 14,37 15,57 14,91 13,91 14,12

Motor traction
6,33 4,63 3,55 3,27 4,84 3,36 2,29 2,63 2,34 1,73 1,97 1,86 1,72

Air
0,06 0,08 0,03 0,03 0,03 0,03 0,05 0,06 0,03 0,04 0,03 0,03 0,04

Inland
1,41 1,34 1,22 1,18 1,23 1,35 0,70 0,82 0,91 0,77 0,61 0,54 0,52
Waterways
Total 59,43 52,78 51,65 53,72 59,26 58,39 62,36 53,55 54,61 57,14 57,78 61,4 62,97
Source: CDV (2004)

Another factor influencing the transport performance in the CR is the transit transport.
The Czech Republic is situated in the centre of Europe with Germany, Austria and
Slovakia as neighbors, and consequently a part of those countries export goes through the
Czech Republic. Transit freight transport has increased substantially since 1990, from 4.7
mill tonnes in 1990 to 12 mill tonnes in 2003 (Codlova 2004, email). In addition, the
transit freight transport has been increasing rapidly since the CR joined the EU. Because
of the short time period, there is no available official statistical data, but according to
preliminary estimations, the number of heavy duty vehicles has increased by up to 40 %
on the Czech roads due to transit. The reasons for this are that it is easier to cross the
borders and also the road tolls are very cheap in the CR in comparison to Germany and
Austria. Consequently, it is economically profitable to drive through the Czech Republic
(Interview person 5). Thus, as stated there is no official statistic yet, however even in case
that the preliminary estimations are too high, the transit transport is increasing and this
shows the need of policy measures regulating this phenomenon.

22
Figure4: Development of GDP and freight transport performance between 1990 and 2003 in
the CR

200

150
GDP
100
Tr. Perf.
50

0
1985 1990 1995 2000 2005
Year

Source: CDV (2004)

5.2 Modal split

The intensity of use of different modes of transport is an important factor in showing

transport related environmental and social impacts of transport sector. Diagram 5 shows
the share of different transport modes on total freight transport performance in the Czech
Republic for the period of 1990 - 2003. It shows clearly that railways have been losing
share on total transport performance. While in 1990 the share of railways on total goods
transport was 69 %, this has dropped down to 25 % in 2003. On the other hand, the share
of road transport has been steadily increasing from 28 % in 1990 to 74 % in 2003.

Increasing demand for freight transport as well as increasing share of road on total freight
transport is a phenomenon that can be observed in almost all industrial countries. Within
EU1, most of goods traffic goes by road, and road’s share of goods market has been
growing continuously, from 41 % in 1990 to 44 % in 1998. On the other hand, goods
carried by rail fell from 21 to 8 % between 1970 and 1998. Projections with business as
usual scenarios are showing increase of road traffic to 47 % in 2010 (European
Commission 2001). This comparison must be considered with the fact that Czech
Republic is an in locked country, consequently has no sea transport. However, Czech
railways are going through similar development as railways in other European countries.
The clear difference is only that this development lasted for several decades in Europe,
but just for a few years in the CR.

There are several reasons for this unfavorable development it the CR. Generally, railway
has comparative advantage in transport of bulk commodities as coal, iron ore,
construction materials and forestry products. Here the price advantage can outweigh
speed and reliability offered by road transport (OECD 2001 (b)). During the last decade,

1
EU before enlargement in May 2004

23
the volume of goods suitable for transport by railways has decreased in the Czech
Republic due to structural changes in industry, with declining share of heavy industry and
metallurgy. Also the structure of electricity production has changed, since 1989 several
coal fired power plants have been shut down and replaced by gas or nuclear power
stations, thus less coal is transported (Interview person 4). At the same time the volume
of lighter goods with higher value that is more suitable for road transport is increasing
(MDCR 2000). However, here must be pointed out that during the latest years the road
sector takes a share even in bulk commodities. Sedimbursky and Vichta (2003 (a)) argue
that practically all new transport volumes are taken by road transport, which furthermore
takes shares on goods previously transported by other modes.

Figure 5: Share of transport performance in freight transport [%]

80
70
Road
60
50
Share (%)

40
30
20 Rail
10
0
1985 1990 1995 2000 2005
Year

Source: CDV (2004)

The general trends in the current organisation of production and logistics with high
requirement on flexibility and time accuracy were discussed in chapter 3. Also companies
enterprising in the Czech Republic are adjusting to a global market and naturally, the
haulers need to meet their customers’ requirements. According to interview person 5 the
criteria that are considered for the choice of transport mode are “we have to fulfil what the
customer requires: quality, keeping the time limits and of course the price. Our offer is
the compromise of those three requirements. Thus, it is not the question of for example
just speed, but that the goods must be delivered at exact time and we have to keep
it…..Road transport in the Czech Republic is much more reliable considering the time of
delivery, and in ability to keep the terms”. Also the safety of the goods is considered as
higher when transported by road. There is no need for reloading and the risk for
damaging the goods is therefore minimized. Also, according to interview person 4, there
are companies complaining about the thefts on railways in the CR, so it is more
convenient for them to pay more and transport the goods by road in stead. Thus, safety,

24
flexibility and reliability of road transport are clearly overweighing the advantages of
railways.

The low ability of Czech railways, the biggest operator on the Czech rail market, to meet
customers demand is accompanied by poor organisation of the whole company. While
road sector has adapted to marked demands quickly, it is not possible to say the same
about the railway sector. Slow changes and lack of business policy makes railways to
lose even more customers. The decline of transport volumes on the Czech Railways
logically caused reduced incomes from freight transport. Despite this large decline, the
offered transport capacity was reduced only by one third during the last decade. Thus, the
company keeps too many freight wagons resulting in poor maintenance and delaying of
necessary reconstructions. This leads to situation where one third of wagons are not
technically good enough for using for export and many exporting companies are reacting
by going over to road transport, which enables them to keep the delivery times (Kloutvor
et al 2001).

Nevertheless, it is also necessary to emphasize the fact that the railway and road sectors
are for several reasons not competing at the same conditions. The need of improving and
building new road infrastructure is taken as a matter of course and nobody questions this.
The same can not be stated about the railway infrastructure. This because the capacity of
road infrastructure is overused while the capacity of rail infrastructure is not fully used
and the decisions for development of the infrastructure are based on current transport
volumes. But the fact that the railway infrastructure is deprived and in many cases can
not offer the quality that would be required is not taken into consideration (Sedimbursky
and Vit 2003 (a)).

Another fact that makes the competition between railway and road sectors not equal is the
case of externalities. There is no standard methodology for evaluation of external costs in
the Czech Republic, however the studies over the external costs of transport carried out
indicate that the external costs of road transport are significantly higher then external
costs of rail. As explained earlier in this paper this favours the road transport at the
expense of railways.

Zeman (2003) made, according to own methodology, calculations for external costs from
different modes of transport. The results shows that external costs for road transport were
year 2001 40 billion Kč 2, while this was only 18.6 billion Kč for rail. Thus, according to
this study, the external costs of road traffic were 21.4 billion Kč more then external costs
of rail. Another study, carried out by Transport Research Centrum (CDV 2001) has
evaluated external costs of road transport. The study focuses on three different areas:
Evaluation of external costs of traffic accidents, evaluation of costs for air pollution and
evaluation of costs for emissions of greenhouse gases. Methodology for this study varies
from the one used in Zeman’s study and the estimations of road transport external costs is
approximately 56.1 billion Kč. However, it can be concluded that external costs of road
transport are significantly higher then external costs of rail transport, which favours road
transport.
2
1 € = 29 Kč

25
5.3 Vehicle fleet

The technical condition of the vehicle fleet and the rate of its renewal is an important
factor determining the environmental impact of transport sector. The European Union
sets standards for new heavy duty vehicles engines and their emissions. They are also
referred to as EURO I – V. First regulation EURO I was introduced in 1992, EURO II
was introduced in 1996, EURO III in 1999. European Parliament also adopted EURO IV
and V standards for years 2005 /2008. The limit values are for emissions of carbon
monoxide, hydro carbons, nitrogen oxides and particulate matter (DieselNet 2004). Total
number of lorries divided into different categories according to age is shown in table 4
below. Total number of lorries has increased considerably since 1995, from 202 929 in
1995 to 323 434 in 2002. Furthermore, vehicles older then 10 years and thus not fulfilling
EURO I standards create the largest part of vehicle fleet. However, the positive fact is
that the share of vehicles older then 10 years has been decreasing, it has dropped down
from 44 % in 1995 down to 37 % in 2002.

Table4: Lorries registered in the Czech Republic

1995 1998 1999 2000 2001 2002

Total number 202 929 260 276 268 259 275 617 296 412 323 434
by age category

Up to 2 years 33 398 36 482 30 289 33 762 39 562 42 517

2 - 5 years 32 090 57 952 68 249 66 925 61 381 62 302

5 - 10 years 47 552 55 175 59 973 69 223 86 349 98 331

Over 10 years 89 889 110 667 109 748 105 707 109 120 120 284

Source: MDCR 2004

26
6. Air emissions from freight transport sector- the trends
and the targets
The analysis carried out in the pervious chapter showed that the demand for transport can
be expected to increase in the CR and that the dominant mode is the road transport. In
this chapter the contribution of freight transport sector to the total air emissions, divided
between road, rail electric traction and rail motor traction, will be analyzed. The trends of
the most significant pollutants from road freight sector are presented and put into relation
with governmental targets and emission limits expressed in Regulation No. 351 / 2002
Coll., setting air pollution limit values for emissions of NOx, CO, VOC and SO2 for the
whole country. In addition, the quality of air, regarding the concentration of pollutants
will be discussed.

6.1 Energy consumption by freight transport sector

In chapter 2, environmental effects caused by transport related energy consumption were

discussed. As shown in table 3 the share of the transport sector on the total energy
consumption has an increasing tendency. Between 1990 and 2003 both absolute
consumption of energy by transport sector and the share of the transport sector on total
energy consumption had increased. At the same time, the countries total energy
consumption under this period had decreased. The growth of transport share is
considerable, between 1990 and 2002 it has increased from 10 to 18 %. Within the
transport sector, road freight transport was the second most energy consuming after
individual car transport with almost 32 % of total transport sector energy consumption in
2003 (CDV 2004).

Table 5: Share of transport in the total energy consumption in CR [%]

Year
Unit
1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Total
3
consumption PJ 1 303,2 1 124,7 1 056,2 1 038,2 1 091,3 1 151,5 1 098,1 1 054,6 1 052,1 1 018,2 1 056,6 1 049,8

Consumption PJ 131,4 120,0 113,2 121,7 138,5 158,0 164,6 160,1 171,8 176,4 187,1 189,9
by transport

Share of % 10,1 10,7 10,7 11,7 12,7 13,7 15,0 15,2 16,3 17,3 17,7 18,1
transport
Source: ČSÚ, CDV

3
1 PJ = 1015 J

27
6.2 Air emissions from freight transport sector

To find the data for air emissions created by freight transport sector itself in the Czech
Republic is problematic. The data for emissions for different modes of transport are
accessible in the Transport Yearbook of the CR and emissions created by road transport
are divided into passenger and freight transport. However, emissions from the railway
sector are not further divided into passenger and freight sectors. Furthermore the
emissions from rail electric traction are not followed. Consequently, in order to find out
the emission intensity of the railway freight sector, it is necessary to obtain further data
from other sources.

Zeman (2004) deals with this problem and he has estimated air emissions for freight
transport sector in 2002. In his study, he has calculated emissions from electricity
production (in ton/GWh) in the CR and required further data concerning energy
consumption of railway electric traction from Czech Railways. The data for air emissions
from rail electric and motor tractions are taken from Zeman’s study and used in this paper
for further analysis. In 6 table total air emissions of most significant pollutants from road,
rail electric and rail motor tractions, emitted by freight transport. Shares of respective
mode on total emissions in the CR are also shown in the table.

Table 6: Freight transport related emissions of CO2, VOC and NOx and their contribution
to total emissions in the CR

Type of emission Road Rail electric Rail motor

traction traction
CO2 total (tonnes) 4 485 000 605 801 300 505
CO2 % of total 4% < 0.1% < 0.1%
VOC (tonnes) 16 400 70 434
VOC % of total 8% < 0.1% < 1%
NOx (tonnes) 46200 Not available Not available
NOx % of total 15 % Not available Not available
SO2 (tonnes) 1 288 1 087 96
SO2 % of total 1% <1% < 0.1 %
Source: MZP (2004), Zeman (2004), MDCR (2004)

Regarding CO2, the most important greenhouse gas, the share of both rail tractions is
below 0.1 per cent of total emissions in the country. On the other hand, the share of road
is quite considerable, counting for 4 % of countries total CO2 emissions. The share of the
whole transport sector on CO2 emissions in 2002 was approximately 12 %. This is quite
low in comparison to other OECD countries, where transport sector contributes to total
emissions by approximately 20 % (OECD 2001 (b)). This can be explained by the fact
that the CR has high energy-intensity and the energy production is to large extent based
on fossil fuels. Energy and industry sectors contribute with 70 % to total emissions of
CO2 (MZP 2000, 37). However, while total emissions of CO2 in the whole country
decreased by 27 % since 1990, transport emitted CO2 emissions have been increasing
(Brusik 2004). Emissions of CO2 from road freight transport for the period of 1990 –

28
2003 are shown in figure 6. It shows that these emissions have increased considerably
under the studied period and they have an increasing tendency.

As discussed in a previous chapter, the demand for road freight transport can be expected
to grow in the future. Because CO2 emissions are directly linked to the consumption of
fossil fuels, an increasing share of railways on the freight market would slow down the
fast increase in those emissions. Also increased share of vehicles with low, or none fossil
fuel consumption in the vehicle fleet would decrease those emissions.

CO2 emissions

5000
4500
CO2 (thousand tonnes)

4000
3500
3000
2500 CO2
2000
1500
1000
500
0
1985 1990 1995 2000 2005
Year

Figure 6: Emissions of CO2 from road freight transport for period 1990 - 2003

The contribution of nitrogen oxides (NOx) to total emissions is available only for road
freight transport, which contributes with 15 % of the countries total emissions (see
table 6). This is approximately 43 % of total transport sector contribution. As in case of
CO2, the contribution of NOx to countries total emissions is lower then average in OECD
countries, where transport sector contributed by 52 % to total emissions (OECD 2001
(b)).This can be explained by the some factors as for CO2 emissions, e. g. high energy
intensity and high share of fossil fuels on energy production. According to Directive
No. 351 / 2002 Coll., setting emission limits for NOx, CO, VOC and SO2 for the Czech
Republic, total emissions of NOx must not exceed 286 000 tonnes in 2010 (ASPI). At
2002, total NOx emissions for the whole country were 318 230 tonnes (MZP and
CSU 2004) thus, this limit was exceeded by more then 32 000 tonnes.

The development of NOx emissions in period 1990-2003 for the road freight transport
sector is shown in diagram. The rapidly increasing trend of those emissions during the
1990s had slowed down since year 2000. This change has occurred due to lower
emissions of NOx from new vehicles. As mentioned earlier in this paper, NOx belong to
regulated emissions and all new vehicles must fulfil the emission standards. However, the
increasing transport demand and number of vehicles is partially taking out the decreasing
contribution of vehicles and NOx are not likely to decrease rapidly in the nearest future
due to technological improvements.

29
 NOx

50000

40000
NOx (tonnes)

30000
NOx
20000

10000

0
1985 1990 1995 2000 2005
Year

Figure 7: Emissions of NOx from road freight transport for period 1990 - 2003

Directive No. 351 / 2002 Coll. also regulates emissions of VOC. The target for VOC is
200 000 tonnes in 2010 for the whole CR. Current emissions in the CR are 200 000
tonnes (CEU 2004), thus very close to the targeted limit. As shown in the table 6, the
contribution of both tractions of rail freight sector was under 1 % while freight road
sector contributed by 8 % to the total emissions. After a rapid growth during the 1990s,
those emissions changed the trend (see figure 8) and started to decrease year 2000. As in
the case of NOx this change occurred due to improved technology and implementation of
tighter regulations, thus a rapid increase in number of vehicles can change this trend.

VOC

20000

15000
VOC (tonnes)

10000 VOC

5000

0
1985 1990 1995 2000 2005
Year

Figure 8: Emissions of VOC from road freight transport for period 1990 - 2003

Table 6 also shows the contribution of freight transport sector to total emissions of
sulphur dioxide SO2. Their contribution to countries total emissions is very low, 1 % for
road transport and less then that for both tractions of railway. The development of SO2

30
emissions from road freight sector is shown graphically in figure 9. After a substantial
increase during 1990s, those emissions had decreased significantly between 2002 and
2003. This occurred due to implementation of new limits for sulphur content in diesel oil.
This trend of decreasing of those emissions can be expected to continue as during 2005
the limits for sulphur content in diesel will be further lowered (CDV 2004).

SO2

1600
1400
1200
1000
SO2

800 SO2
600
400
200
0
1985 1990 1995 2000 2005
Year

Figure 9: Emissions of SO2 from road freight transport for period 1990 - 2003

However, one can not only consider the total volume of pollutants emitted as a guideline
for pollution abatement policy. The data for total volume of pollutants do not show if the
concentration of pollutants in the air is acceptable, or if it is exceeding the limits and thus
endangering human health at specific areas. In chapter 2, various health effects caused by
vehicle emissions in urban areas were discussed. As will be shown in the next paragraph,
ssituation regarding the quality of air in urban areas in the CR can be considered as
serious.

The quality of air, regarding pollutant’s concentration in the ground layer of atmosphere
in the Czech Republic is regulated by the new Clean Air Act No. 86 / 2002 Coll., which
came into force 1 June 2002. Regulation No. 350 / 2002 Coll. sets air pollution limit
values. According to assessment carried out by Czech Hydrometorlogical Institute
(CHI 2003, 70-71) more then 64 % of the Czech population is exposed to ground-level
ozone concentrations exceeding limit values for protection of health. Carried out
assessment shows also that pollution caused by suspended particles exceeds the limit
values. At 2002, areas where concentrations of suspended particles exceeded the limit
values were inhabited by more then 23 % of the population. Also the situation concerning
benzene concentrations is unfavorable; the limit values were exceeded in Ostrava (east-
north Bohemia). In addition, further cases of surpassing the concentration limits can be
expected due to newly established monitoring stations meeting requirements of the new
directive on monitoring transport impacts on quality of urban air.

31
7. Measures for sustainable transport
7.1. Transport policy and targets

In chapter 5 of this paper it has been shown that the Czech Republic as well as the whole
European Union is facing a problem of increasing freight transport and of growing
imbalance between modes of transport. The road transport, which is a large contributor to
air pollution and congestion, is taking a share from more environmentally friendly modes
as railways and inland waterways. Consequently, reducing the negative effects of freight
transport on environment and human health and creating a sustainable transport sector is
one of the main priorities for European transport policy as well as for the Czech transport
policy.

A healthy environment is a condition for long term prosperity and quality of life of
European citizens, consequently air pollution is considered as one of Europe’s main
political concerns. Among the main objectives for the European Commission is to
achieve levels of air quality that do not give rise to significant impacts on human health
and the environment (European Commission 2004 (a)). In order to achieve this, changes
in many areas are required and environmental concerns should be fully implemented in
the early phases of the different sector policy processes. Therefore, the European Union
policy on air quality aims to develop and implement efficient instruments for controlling
of emissions from transport as well as energy sector (Commission of the European
Communities 2001).

Also reduction of CO2 emissions in order to protect the environment and fulfil the Kyoto
agreement is one of the priorities of the European Unions environmental policy. The
target for reduction of CO2 emissions stemming from Kyoto Protocol is 8 % reduction of
emissions in 2008 – 2012 compared to 1990 levels. Because transport sector is a
significant contributor to CO2 emissions, the European Commission emphasises the need
of transport measures that will contribute to the reduction of those emissions (European
Commission 2004 (b)).

Among the main objectives for freight transport sector at the EU level expressed by the
European Commission is to revitalise the railways and thus get freight traffic to switch
from road to alternative transport modes, especially rail. Also promoting alternatives that
combine transport modes for freight transport are seen as a priority (European
Commission 2003, 15). The White Paper, the European Transport Policy for 2010
emphasises that railways still are a means of transport with major potential and sees its
revitalisation as the key to achieving modal rebalance. Thus, the commission suggests a
number of measures to be implemented in order to attain those objectives. The most
important objectives to achieve until 2010 are:

• Creating internal market in rail transport is one of the core stones of this
document. By 2008 the entire trans-European freight network opened for free
competition should be completely finalized and opened. Opening up the
competition will bring companies form other backgrounds with fresh experience

32
 of logistics to this sector. Entrance of new companies on the freight railway
market is expected to increase the competition between operators, and thus make
the rail industry more competitive against other modes of transport (European
Commission 2001).
• Setting high safety standards for the rail network. This means setting clear
definition of responsibilities of each actor involved in order to ensure safe
operations on the market with several operators sharing the some part of network
(ibid).
• Improved interoperability, thus removing of technical barriers hindering the trains
to run on some stretches of the network. There are still significant differences
between networks, such as different electrification and signalling systems in
Europe (ibid).
• Encouraging the development of trans-European corridors for priority, or even
exclusive use by freight trains. Also establishing well equipped freight terminals
with access to all operators is considered as important factor for promoting rail
freight transport (ibid.).

The large scale external costs caused by freight transport and their consequences were
discussed earlier in chapter 3. European Commission (2001) sees the fact that transport
users have not been fully confronted with the real cost of their activities an important
reason for imbalance and ineffectiveness in transport sector. It is emphasised that “The
thrust of Community action should therefore be gradually to replace existing transport
system taxes with more effective instruments for integrating infrastructure costs and
external costs” (European Commission 2001, 71). Charges for infrastructure should
therefore cover both infrastructure and external costs and thus include costs of
congestion, accidents and environmental impact (ibid).

The Transport policy of the Czech Republic for years 2005 – 2013 is currently under
preparation. It will derive from a consensual frame of international agreements steaming
from the countries membership in UN, OECD and EU. Thus, the Czech transport policy
will be compatible with EUs White Paper. However, specific conditions in the country
will be taken into consideration. As in White Paper, the European transport policy, one of
the basic attributes of the Transport Policy of the CR for years 2005-2013 will be to
gradually transfer part of road freight transport to environmentally sounder kinds of
transport, such as rail or combined transport. The main priority for railway sector is going
to be to finish modernization and gradual electrification of the main corridors connecting
to Trans-European Railway Network. For road infrastructure, maintenance and
construction of highways at routs with high traffic is priority (MDCR 2004 (b)).

7.2 Measures for road freight transport

For achieving its environmental objectives, the governments can use a variety of policy
instruments. It is possible to distinguish four broad types of policy instruments:
regulations, voluntary actions, government expenditures and market-based instruments.

33
Transport policies usually consist of a mixture of those instruments, because sustainable
transport policy must address both the supply side, to make vehicles more fuel-efficient
and the demand side, to reduce demand for road transport. The instruments used depend
on conditions and preferences in a specific country, there are different ways for achieving
sustainability. However, there is growing interest in using market-based instruments to
correct market failures and internalize environmental and social costs of transport (Carter
2001).

7.2.1 Technical opportunities

The environmental impacts of transport are highly dependent on the technologies used
and there is available a large of number technologies that can decrease fuel consumption
of vehicles and air and noise pollution. Modification of engines, electronic control
system, and improved exhaust systems are examples of these technologies (European
Commission 2000). New developed technologies such as catalytic converter or computer
control of combustion have reduced motor vehicle emissions significantly. For example,
in comparison to cars built before 1968, new vehicles emit 4 % as much VOCs and CO.
Technologies that are now visible on the horizon, such as the hydrogen-powered fuel cell
vehicle, give promises for future reduction of emissions from motor vehicles (Greene and
Wegener 1997). Also, drivers’ behavior has an impact on fuel consumption, thus training
the drivers and encouraging them to keep the speed limits, switch off the engines when
standing still or avoid heavy accelerations can bring fuel consumption reduction 5-10 %
(European Commission 2000).

Environmental pollution from motor vehicles is highly dependant on fuel used. So

promoting cleaner fuels such as low sulphur diesel can bring substantial environmental
benefits in form of reducing of SO2 emissions and particulate matter (Koopman 1995).
Also the possibility of substituting cleaner alternative fuel for diesel has drawn increasing
attention during the past decade. Currently less then two percent of the global motor
vehicle fleet are powered by alternative fuels including electricity power. However,
alternative fuels have a large potential to reduce air pollution when used in vehicles with
dedicated engines and optimized emission control system. The greatest emission
reductions can be obtained with hydrogen. Because of absence of carbon atoms in
hydrogen’s molecular structure, its combustion produces no direct emissions of carbon
dioxide, thus the use of hydrogen fuel produced from renewable energy sources would be
a possible solution for measures to reduce carbon dioxide emissions. The only pollutants
produced by hydrogen combustion are nitrogen oxides. Also use of electricity, natural gas
and liquefied petroleum gas (LPG) for powering motor vehicles can bring significant
reduction of air pollution (Faiz et al. 1996)

Also, drivers’ behavior has an impact on fuel consumption, thus training the drivers and
encouraging them to keep the speed limits, switch off the engines when standing still or
avoid heavy accelerations can bring fuel consumption reduction 5-10 % (European
Commission 2000).

34
As mentioned earlier, EU regulates emission standards for heavy duty vehicles, thus this
regulation is valid also in the CR. Regulatory standards are a helpful tool for achieving
sustainable transport, and they made vehicles more fuel efficient and cleaner by forcing
manufacturers to develop cleaner technology. However, the emission standards are valid
for new vehicles only and as was shown in a previous chapter a large part of the vehicle
fleet in the CR consists of old vehicles, thus not fulfilling those standards. Therefore, it
takes time before the Czech fleet is renewed and at the some time, the rapid increasing
number of vehicles can take out the benefits from technological solutions. The problem
of implementation of other, not regulated technical measures is that they are costly and it
is not probable that many companies in the CR will adopt new techniques, unless
authorities either require or by other measures promote this.

7.2.2 Reducing the demand for transport by preventive measures

There are many preventive solutions that can reduce the number of vehicle kilometers
traveled and thus reduce the negative environmental, social and economical effects
caused by road freight transport. Reducing vehicle numbers through consolidating loads
can bring large efficiency gains. For example, Swedish retailers have opened a mixed
consignment centre in the city of Malmö. Here, goods are assembled from 25 suppliers
and are to be transported to 11 regional warehouses. This solution has a huge potential to
cut daily deliveries to supermarkets (European Commission 2000).

Creation of new packaging design, from a transportation efficiency point of view offers
considerable potential for increasing the utilization of vehicles and thus reduction of the
number of vehicle movements and kilometers traveled. A French mashed potato producer
changed the size of the packages and succeeded to increase the loading rate by 60 %.
This reduced considerably the distances traveled and thus the consumption of fuels
(European Commission 2000). Also reducing the volume or tonnage of the product can
have a significant impact on transportation needed. This can be done by redesigning the
product and by cutting down the amount of air and water transported. Examples for this
can be juices that are diluted at home by customers in stead of juices that are sold ready
for drinking (Houtsma 2001).

Today, many products go long distances to be modified and then back to the country of
origin, or are imported from countries which can produce them cheaper. Solutions in
form of finding local suppliers or carrying out manufacturing processes close to the
production site would certainly decrease the distances traveled (Houtsma 2001).
According to Strutynski (1995) formation of stronger regional networks of activities
would facilitate for suppliers themselves to coordinate production with the customers and
other enterprises operating in the region. Those would be able to establish co-operatively
supply network within the region. However, here it is also necessary to point out that
having local supplier does not necessarily lead to reduction in environmental damage. For
example, tomatoes grown in warm countries need to be transported to northern part of
Europe, but it is doubtful if this transport causes more environmental damage in terms of
energy consumption then tomatoes grown in greenhouses (Houtsma 2001).

35
There are various estimations on how much it is possible to reduce transport levels by
those preventive measures. According to Houtsma (2001) this could be as much as
7-20 % in Holland. Many of those approaches are so called “win win” situations, where
the environmental benefits are either equal or exceeded by the economical benefits to the
company (European Commission 2000). Thus, many companies enterprising in the CR
might be interested in adopting those solutions in cases they are easy to implement and
would bring economical benefits to the company. However, many of those approaches
are non-win-win, thus situations when reductions in transport volumes require large
investments. Those costs are likely to create a barrier for adapting the measure
(Houtsma 2001) and are unlikely to be realized until transport reduction becomes
economically feasible for the companies.

Information and implementing solutions for reduction of road transport is important in

work towards sustainable transport. Nevertheless, all those measures together are unlikely
to divert the negative trend of increasing road freight transport and its increasing social,
economical and environmental impacts.

7.3 Increasing share of railways

It has been shown earlier in this paper, that the demand for transport in the Czech
Republic is going to grow in the nearest future, because of economic growth and also
country’s geographical position. It has also been discussed, that railway freight transport
is more environmentally and socially sound transport mode then road transport. Thus, in
order to achieve sustainable transport system it will be necessary to shift part of freight
transport to railways.

It was also stated that Czech Railways a. s., the largest operator on Czech rail freight
market, is lacking of business policy. This is naturally making the company less efficient
and gives it fewer opportunities to increase its shares on freight transport market, because
the road sector is a strong competitor. In policy recommendations to Czech government,
made by OECD (2001 (b)) it is emphasized that increases in efficiency will be required,
so it is of high importance that the authorities continue to pursue internal efficiency
reforms within Czech Railways a. s. Among those measures, reducing of staff and
housekeeping on a private enterprise base are most important. For example, Czech
Railways a. s. owns large areas of land and many facilities nearby the railway stations
that are not utilized. Those could be used for purposes such as warehouses or hotels and
increase incomes for the company (Kloutvor et al. 2001). Thus, implementation of new
governance arrangements promoting commercial orientation can be recommended
(OECD 2001(b)).

Also, for increasing of railways ability to compete with road sector, it is vital that
competition within the rail freight sector itself is ensured. Increased competition will
force Czech Railways a. s. and other companies operating on rail freight market to ensure
quality of their services and reduce the costs. Such environment can create conditions for
investments and attract private funding (Kloutvor et al. 2001). Thus, the adoption of the
Railway Transformation Act, which has enforced separation of railway operator from

36
railway infrastructure, was an important step in this direction. However, further changes
in legislation which would facilitate for non discriminatory access to rail market in the
CR will have to be done.

An important factor for increasing of share of railway is promoting intermodal transport.

Intermodal transport is goods transport using various modes of transport without any
handling of goods themselves during transfers between modes (Macharis and
Bontekoning 2004). A factor hindering multimodal transport is that transport networks of
different modes are not interconnected. To increase intermodal transport where rail is
involved, it will be necessary to build intermodal terminals (centers where the
transshipment of goods from one mode to the other takes place) at places that are
connected to railway. The current situation in the Czech Republic is going in a
completely opposite direction, where large companies are building their own logistical
terminals near the highways. This further decreases the importance of railway. Thus, it
will be necessary to build regional intermodal terminals with access for all companies
(Sedimbursky and Vichta 2003(b)).

7.4 Market based policy instruments for sustainable transport

There is a wide range of different market based instruments used in transport policy. It is
possible to distinguish three groups of charges according to leverage points. The first
group includes vehicle – based charges, such as vehicle tax or purchase tax. The second
group is fuel-based charges, e.g. fuel tax and, finally the third group consists of
road-use-based charges. However, the concrete design of those charges can differ, for
example road charges can differ according to vehicle characteristics, time of the day or
location (ECMT 2000). A significant increase of the charges for road freight transport
would motivate enterprises to take measures in order to decrease transport costs.

7.4.1 Fuel taxes

Many environmental externalities are related to fuel use so fuel taxes are considered as an
attractive economic instrument for internalizing of externalities. Fuel tax is easy and non
costly to implement and it has continuous short-term as well as long-term effects (ibid.)
When fuel becomes more expensive road haulers will make effort to reduce energy
consumption per tonne-km transported. This can be achieved by different measures such
as larger trucks, fuller trucks or driving behavior. However, fuel costs comprise only
roughly 10-15 % of total road haulage costs, so the total transport price will be affected
only moderately by increased fuel costs (Koopman 1995). A Danish study over price
elasticity (not fuel cost elasticity, which is only around 10-15 % of total transport costs)
indicates that a 10 % increase in the cost of freight transport would reduce the truck
transport by 5 %. This reduction in road truck transport can be divided into 3 % decrease
in transport volumes and 2 % is substituted to other modes (Bjørner 1998). Thus, in a
long-term fuel taxes stimulate the modal change to less energy intensive transport modes
as train.

37
Increased fuel taxes will have positive impact on air emissions, particularly on emissions
of CO2. However, the disadvantages experienced by use of fuel taxes is that they reduce
the overall mobility, while what is often needed is to reduce traffic at certain places and
points in time (Koopman 1995). Furthermore, fuel taxes do not allow differentiation
according to vehicle characteristics, such as different emission standards. Also, if taxes
are different in neighboring countries, there is a risk of rising of fuel tourism (ECMT
2000).

Within the EU, motor fuel taxes are regulated by Directive 2003 / 96 / EC, which makes
communities framework for taxation of the energy products. The directive lays down a
minimum tax rate on each type of mineral oil. The purpose of this directive is to reduce
distortions that exist between member states as a result of divergent rates of tax
(European Commission 2004). In the Czech Republic, tax from fuels containing hydro
carbons is applied at slightly higher rates then a minimum tax rate according to Directive
2003 / 96 / EC. (EU minimum 302 €, CR 312 € per 1000 l diesel) (Kutacek 2003).
Apparently, this tax is not giving the haulage companies in the Czech Republic the right
incentives to change the behavior towards more efficient transportation and efforts to
switch towards railway. Consequently, only a drastic increase in fuel taxes would bring
reduction of road freight transportation and promote the shift from road to rail.

7.4.2 Road and Highway tolls

Directly charging for road tolls gives a user signals about the economic costs of providing
infrastructure. This can influence the overall use of the facility, and even though road
tolls are not a direct instrument of environmental policy, it removes governmental failure
that contributes to environmental degradation. The use of direct road charging both on
highways and in the cities has received increasing popularity in Europe (Button 1999).
There are different designs of road pricing, and it is possible to distinguish between four
different charging types. Flat charge for road users is an annual charge levied at car users.
Road tolls correspond to charging for specific passages of the infrastructure. Km-charge
is a continuous charge for specific networks, levied at entry and exit points. Finally,
electronic road pricing is also continuous charge for specific networks, levied at car
holders (ECMT 2000).

The advantage of road use charging is that, apart from flat charge, those instruments
allow for wide differentiation according to vehicle type, time of day or other parameters.
One of the disadvantages with this system is that the implementation and maintenance
costs can be rather high (ECMT 2000). Also, imposing tolls on parts of networks can
cause a shift of part of traffic to alternative roads, where no toll is imposed (Ferrari P
2002).

Many of European countries are combating the problems caused by road freight transport
by raising the charges for roads. In January 2004, Austria has introduced electronic,
distance-dependent road pricing on motorways and expressways for all vehicles with a

38
total admissible weight of more then 3.5 tonne (SDFI 2004). In Switzerland a km-charge
to heavy vehicles with a total admissible weight of more than 3,5 tons has been
introduced in 2001. The level of the charge depends on three factors:

1. The distance driven on Swiss roads

2. The admissible weight of the truck (the maximum permitted total weight
according to the vehicle registration documents)
3. The emission category of the vehicle (there are three different categories, where
vehicles meeting only EURO 0 standard pay the highest fee, next level are
vehicles meeting EURO I standard and the last category, thus vehicles paying the
lowest fee are vehicles meeting EURO II/III standard (Suter and Walter 2001).

The charge is collected electronically and its implementation has been successful, the
kilometers traveled by heavy goods traffic on the roads has decreased by 3 %. This can
be compared to preceding years, when heavy goods traffic was increasing by 6 %
annually (OECD 2003). Also the renewal rate of vehicle fleet has increased; a higher
share of new, cleaner vehicles was put into the traffic a year after the implementation of
the fee then during the years before its implementation. One of the negative effects is the
case mentioned above, that some truck drivers chose smaller roads leading through
villages instead driving on motorway (Suter and Walter 2001).

However, the benefits of this measure show very good results in combating road freight
transport and there is a lot of knowledge that can be learned. The success in
implementation of road toll in Switzerland was a breakthrough for the principle of
internalization of transportation external costs. The fee is based on uncovered
infrastructure costs and the difference between external costs of heavy vehicle traffic over
its external benefits. According to the Swiss constitution, the revenue from high highway
tolls should be used to cover the external costs. Now, two thirds of the revenue is
invested in New Alpine rail tunnels, an important project for shifting freight transport
from road to rail (Suter and Walter 2001).

A current system of road tolls on the territory of the CR is applied on specific sections of
infrastructure. This system allows the differentiation of prices according to the weight of
vehicle to three different categories: up to 3.5 tonnes, 3.5-12 tonnes and more then
12 tonnes. The fee can be paid for a period of one day, ten days, one month and one year
(Codlova 2004-10-25). As shown in table 8, at present, the average charges for heavy
duty vehicles on motorways are considerably lower in the Czech Republic then in other
European countries. Implementation of electronic road pricing for duty vehicles from
year 2006 is discussed in the CR. It can be assumed that unless road charges will be
raised considerably, both domestic and transit road freight transport will continue to
grow.

39
Table8: Prices in Kč for 1 km on the highways in European countries

Price in Kč for 1 km for heavy duty vehicle

Italy Czech Rep. Switzerland Germany Austria
3,93 1,40 9,47 3,26-4,89 6,85-8,82

Source: SDFI (2004)

7.4.3 Vehicle tax

Besides fuel taxes and road charging, vehicle tax is also an instrument used for
internalizing external costs. The design of vehicles taxes vary, it can be charged in form
of registration tax, which is annual tax usually based on vehicle characteristics. Also
purchase tax or import tax can be applied. Vehicle taxes generally change behavior only
in the long run, according to the car’s lifecycle. The size of the tax must be chosen
carefully according to situation in the country. On one hand, an environmentally oriented
annual vehicle tax differentiation can be effective and help to accelerate a path to clean
technology. But on the other hand, too high purchase tax, particularly if there is no tax
decrease for technologically improved vehicles, might even slow down the renewal of
vehicle fleet (ECMT 2000).

In the CR registration vehicle tax is charged annually. The amount of the tax varies
according to weight of the vehicle and number of semi-trailers. Heavy duty vehicles
meeting EURO emissions standards pay significantly lower amounts (Kutacek 2003).
Lower fees for cleaner vehicles are considered as feasible for the renewal of vehicle fleet
and for overall environmental impacts of road transport. However, this measure does not
stimulate the reduction of transport demand or change of transport mode, and thus must
be considered as additional measure only (ECMT 2000).

40
8. Conclusions
As shown in this paper, the current freight transport system in the Czech Republic is not
sustainable for many reasons. During the studied period, its energy consumption has
increased considerably in both absolute and relative terms. Air pollution from road
freight transport has also increased considerably and carbon dioxide emissions are still on
the increase. Also the quality of air in many urban areas is exceeding the limits for
pollutants concentrations, thus affecting human health and this contradicts the main
objectives of sustainable development. Consequently, the measures aiming to reduce
environmental impacts of freight transport currently used in the CR are not sufficient and
there is a need for increased efficiency of those measures.

Governmental regulations and measures promoting development and implementation of

new technologies are promising for future reduction of air pollution. Modifications of
engines as well as increased use of alternative fuels can bring forth significant reductions
in air pollution. The analysis of air pollutants from the road freight sector showed that the
emission regulations for new vehicles proved to be efficient and started to show results.
Despite increasing road transport performance, nitrogen oxides slowed down the
increasing rate and volatile organic compounds have started decreasing. Thus,
technological fixes and their implementation is an important solution for reduction of
many of the negative environmental effects caused by road freight transport. However,
those do not address all environmental or social problems caused by freight transport
such as congestion, road accidents or land fragmentation. Consequently, technological
measures have limited potential and need to be combined with other measures for
reducing the demand for road freight transport.

Among the most important driving forces for increasing demand for freight transport
identified in this thesis was economic growth. As shown, transport demand closely
followed economic growth during the studied period and this trend is estimated to
continue in the future. Prosperous economic growth is important for countries
development and employment opportunities, and tackling the problem of increasing
demand for transport via reduction in economic growth can not be considered as feasible.
In contrast to the energy sector, it is difficult to decouple economic growth and transport
demand. Yet, there is no measure for that and more experience and research is needed in
this area. Thus, this remains a challenge for research and politics to achieve it.

Enhancing goods transport by railways is an important solution that will reduce

environmental pollution caused by the freight transport sector. The important measures
for enhancing railways discussed in this paper are solutions promoting intermodal
transport as well as ensuring free competition of the railway market. However, the
driving forces which tilt the modal towards road transport are powerful and it is not
probable that implementation of those solutions alone would divert the trend of
increasing road freight transport and its negative environmental effects. The conclusion
from this is that for increasing the role of railways in the freight transport market and
achieving more environmentally sustainable freight transport system, it will be necessary

41
to combine those strategies with more efficient economic instruments for internalization
of external costs in transportation.

Low transport prices have been established as a strong driving force for increasing
transport demand. This factor, in contrast to many other driving forces identified in this
thesis, e.g. economic growth, increasing globalization or production specialization, is
possible to change by various policy measures. It is possible to assume that increased
transport prices would reduce the demand for transport as well as promote the modal shift
from road to rail, however the prices would have to increase significantly. This change
can be seen as unpopular from the road sector representatives. Road sector has a strong
lobby in the CR and the protests against implementation of more radical measures can be
expected. It is well known that governments do not like to implement unpopular
measures; however external costs caused by road freight transport should receive more
attention and considered as arguments justifying a significant increase in freight transport
prices.

Low prices for motorway charging in the Czech Republic are not only driving forces for
domestic transport but also significantly encourage increasing transit transport as
transport companies want to avoid driving through Austria and Germany, where highway
tolls are much higher. This is causing considerable environmental, social and economical
problems and if the road charges in the Czech Republic will not be increased soon, this
will lead to inadequate environmental degradation as well as congestion threatening the
functionality of whole transport system in the country. Thus, there is a urgent need for
increasing the charge for motorway for heavy duty vehicles in the Czech Republic.

42
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