Road Pricing

Pay as you drive road tax, road user charging.

Most European countries raise a vehicle usage-based tax in the form of a duty paid on fuel. This tax is in effect a usage based-tax as the more a vehicle is used and the more inefficient the engine the more fuel it consumes and the more tax is paid.

However, European roads are congested with high volumes of traffic at certain times of the day or in specific locations. The road network has a limited capacity and the more traffic on a road the less efficient the network becomes. This slows traffic and increases pollution and CO2 output.

Road user charging (RUC) or road pricing is able to tackle a number of possible governmental policy objectives such as:

  • actively managing traffic by higher pricing for road use at peak times, this has an effect of reducing the number of non essential journeys and encouraging model shift to public transport,
  • reducing pollution by reducing the volume of traffic and the traffic that does use the road runs more efficiently,
  • road pricing raises tax that can be ring fenced and invested back into transport infrastructure to offer further benefits to road users.

These policies can be achieved by applying Road pricing to

  • all cars nationally,
  • a specific user group such as heavy goods vehicles such as in Austria and Switzerland,
  • a specific location such as central London’s Congestion Charge or
  • a hybrid of several factors such as HGV’s on primary routes as in Germany.

Road user charging is controversial as it requires some form of pricing to control access to the road and the technology is perceived as invasive.  It therefore requires strong political will to deliver, however it is one of the few tools to actively manage road use in a fair cost / benefit way.

It has proved a success in Germany raising over €5 Billion for investment back into the transport infrastructure including rail and waterways. As the tax is variable based on the CO2 output of vehicles it has encouraged a refresh of the HGV fleet to more efficient engines.

The system is based on same technology as PAYD insurance, with charges calculated on board and communicated to a central billing system. This creates free-flowing charging with no need to stop at tolling plazas further reducing pollution and congestion.

Download our white paper on road user charging here