COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards quality inland waterway transport NAIADES II {SWD(2013) 324 final}.

Abstract

The European Union’s inland waterway network spans 20 Member States with about 37 000 kilometres of inland waterways. Every year, these transport around 500 million tons of cargo, in particular in the densely populated and congested areas of Germany, the Netherlands, France and Belgium. These areas are irrigated by the Rhine, Scheldt, Meuse and Seine rivers and are connected with the Danube river. The Inland Waterway Transport sector is small in relative terms but makes nevertheless with 140 billion tonne kilometres a considerable contribution to the EU’s transport system. It plays a significant role in bringing goods between the EU’s busiest ports and the hinterland. The EU’s largest ports would never have developed into the highly efficient logistical hubs they are today without inland navigations' contribution. These ports depend on inland navigation to reduce congestion in their hinterland and to further grow. Inland navigation transport is energy efficient and contributes to the goals of the low-carbon economy, set out in the EU’s Transport Policy White Paper1. Furthermore, low noise levels also make it convenient for freight transport in the densely populated areas they transit in and service. However, inland navigation stands to lose its comparative environmental advantage if no action is taken to further reduce air pollutant emissions, in particular in view of the progress the road transport sector is making due to stringent emissions limits. The Commission’s NAIADES action programme2 adopted in 2006 aimed to bolster the advantages of inland waterway transport and tackle a number of obstacles that could prevent it from being used to its full potential. Many measures introduced under the NAIADES programme have been implemented with the support of funding instruments such as TEN-T3, Marco Polo4, Leonardo Da Vinci5, IPA6 and the Seventh Research Framework Programme7. Further measures, such as the harmonisation of technical requirements for vessels, are still being developed by the Commission, while other measures, in particular those relating to harmonisation efforts8, have not started. An appraisal of the current NAIADES programme9 stated that NAIADES has had a significant mobilising effect in the Member States and amongst the stakeholders. However, EN 3 EN the economic and environmental prospects for inland navigation have continued to worsen and progress in overcoming key infrastructure bottlenecks has been limited. Furthermore, the sector is currently going through difficult times and is suffering from overcapacity in certain segments and from continued fragmentation of market players, on top of the general slowdown of the EU economy since 2008. Overcapacity in the liquid bulk sector is related to the introduction of the double hull requirement10. This led to additional double hull vessels being introduced, without the old single-hull vessels being taken from the market. Overcapacity is expected to ease in 2018 when single hull tank vessels will be phased out. In the large dry bulk vessel segment, however, over-investment and the resulting overcapacity is creating fierce competition, with spill-over effects on other market segments, in particular on the smaller payload market. Roughly 80% of the fleet is operated by owner-operators who work and live with their families on the vessels. Their supply is fragmented, making it more difficult to match it with demand, which is weakening their position vis-à-vis other market players such as freight forwarders or large shippers. This frail position, together with overcapacity has led to fierce price competition, which results in low earning power, thereby hampering the sector’s ability to reinvest and innovate. Although activity in the sector picked up again in 2011, after having slowed down significantly in 2009 and 2010, indicators for 2012 point downward again for parts of the market. An increasing number of operators have entered into arrangements with their banks to delay payment of interest due11. From a longer-term perspective, it is clear that the sector has experienced a long but steady decline in modal share compared to road transport. It will take time for the current difficult economic situation to reverse. There are however also positive points. For instance, throughput in seaports has been growing steadily again since 2009, and new technologies such as the use of alternative fuels can bring down operational costs and offer new market opportunities. The sector is well-positioned to take advantage of these developments. In view of the opportunities and challenges that the sector is facing, the Commission has decided to update and renew the NAIADES programme until 2020, and to align it with the Transport White Paper. The NAIADES II programme focuses on making long-term structural changes in the inland waterway transport sector, to enable it to contribute fully to the Europe 2020 strategy, which aims at smart, sustainable and inclusive growth. For this to happen, the quality of the sector’s operating conditions should be improved, including infrastructure, environmental performance, markets and innovation, jobs and skills and integration into the logistics chain. The EU, Member States, regional authorities, River Commissions12, other international organisations, and the sector itself all have a role to play. The sector operates in liberalised markets in which the possibilities for public intervention are limited. In fact, heavy-handed public intervention may negatively interfere with market players’ future business decisions and with the restructuring effects of market forces. The Commission is aware of the difficulties that parts of the inland waterway transport industry are facing as a result of the economic crisis. To help deal with the current difficult economic situation, the Commission is engaged, with the representative organisations of the sector and the Member States concerned, in discussions about suitable measures to overcome the situation. These measures need to be adequate, effective and in accordance with the applicable rules. Furthermore, the Commission will undertake short-term actions consistent with the principles of liberalised markets. For instance, it will re-examine technical requirements for vessels to check that the right balance between safety risk and compliance cost was struck when the transitional provisions were established. Furthermore, it will encourage the early uptake of the use of Liquid Natural Gas (LNG) as an alternative fuel, which has significant long-term cost-saving potential, and will facilitate the sector’s actions to reduce fragmentation among market players. The Communication establishing the NAIADES II programme is accompanied by two measures, which represent the first step towards implementation: •Legislative proposal for a Directive laying down technical requirements for inland waterway vessels and repealing Directive 2006/87/EC of the European Parliament and of the Council; •Legislative proposal amending Council Regulation No 718/1999 on a Community fleet capacity policy to promote inland waterway transport.