2022 will be remembered for its severe energy crisis following Russia's invasion of Ukraine, causing a historic rise in energy costs and soaring inflation. European leaders responded to this situation by regularly lowering taxes on hydrocarbons to ease the financial burden on households. Some countries nevertheless decided to introduce incentives to bring down the cost of public transport, at least temporarily. Last summer's €9-a-month rail pass in Germany was one such scheme, which proved a huge success, selling 52 million tickets and saving an estimated 1.8 million tonnes of carbon dioxide in the process. These schemes therefore address the inflationary challenge and at the same time encourage the use of public transport.
Initiatives for the climate
The idea of passes offering unlimited travel, or even free travel all together, is not new, and was introduced in Luxembourg in 2020, where all the country's networks, both urban and non-urban, were made free of charge from 1 March of that year. The move to free travel was prompted by the problems met by motorists in getting to the capital, but also for compelling environmental and social reasons. This free travel has also been accompanied by a major investment in public transport, estimated at €4.5 billion over eight years, to develop rail and tramways. The switch to free travel has also yielded the equivalent of an average uplift of around €100 per inhabitant per year.
This measure, taken before the energy crisis, served as an example for the "Climate Ticket" introduced in Austria at the end of 2021. This very popular initiative allows unlimited rail travel throughout the country for the equivalent of three euros a day, or 1,095 euros a year. This "Climate Ticket" was introduced as part of an overall strategy aimed at making the country carbon neutral by 2040, which includes an investment in the national rail network of more than 18.2 billion euros over 5 years. This is a considerable sum for a country with a population of fewer than 9 million, not to mention the revenue shortfall from these cheap tickets, estimated at €240 million in the first year and €150 million per subsequent year. The aim of this high-cost policy is to reduce car traffic by 16%.
This annual pass has also existed historically in Switzerland, where the GA Travelcard offers unlimited travel on all public transport for an annual cost of 3,700 euros in second class and 6,100 euros in first class.
Similarly, such initiatives exist locally in France. A strategy of partial or even total free travel on transport networks is underway in small joint authorities, but also - and on a partial basis since 2021 - in larger cities like Nantes, which has adopted it at weekends, and in Montpellier, which is in the process of extending it in phases to the whole of its urban area (500,000 inhabitants). These measures explicitly form part of an ecological strategy, which Spain is replicating with the free local and regional transport introduced in response to the energy crisis caused by the conflict in Ukraine. The government's justification for free transport is that it "contributes to Spain's and Europe's energy autonomy" and reduces oil consumption by up to 118 million litres.
Schemes to promote transport while curbing inflation
In Spain, free travel on short- and medium-distance domestic services, as well as discounts on everyday transport (metro, tramway, etc.), were primarily intended to counter soaring inflation, which was close to 10%. The measure was also designed to reduce car traffic and, consequently, carbon emissions. The scheme was a great success, with 2.5 million free or discounted travel cards issued, and was extended for the whole of 2023. In the last quarter, commuter train use increased by an average of 30.5% in Spain's major cities, and the increase was even greater for medium-distance regional trains (60% on average compared with 2021).
Germany adopted similar schemes, notably that of the Austrian "Climate Ticket", to combat inflation by selling tickets at 9 euros a month during the three summer months on all regional and urban transport. The main aim of this extremely popular scheme, which sold more than 50 million tickets, was to counter the country's dependence on Russian hydrocarbons, but also to curb strikingly high inflation. The German authorities and the association of transport operators furthermore aimed to retain some of these customers, while making transport more attractive in the long term. The ticket has worked particularly well, helping to reduce carbon emissions by 1.8 million tonnes. The €9 ticket has since been replaced by a travel card costing €49 a month for unlimited use of local and regional public transport. This pass is the result of a complex agreement between the federal government and the Länder, who are financing the estimated €2.5 billion shortfall in revenue on an equal basis.
Schemes with unquestionable social benefits
Coinciding with the fight against inflation (+7.9% in one year) and climate change, Berlin introduced the flat-rate €49 per month travel pass at the same time as a reduction in fuel duty, with the aim of boosting Germans' purchasing power. These subsidies, which facilitate access to transport, have the added advantage of largely benefiting the least privileged sections of the population, 53% of whom do not own a car, compared with just 8% of the wealthiest. These savings can amount to several dozen euros a month for commuters who use public transport on a daily basis. According to a study by the Federal Statistics Institute (Destasis), train use on local and regional routes has risen by 42% compared with the pre-Covid period.
According to the spokesman for the Austrian Federal Railways, the "Climate Ticket" passes have led to a 15% increase in ridership compared with the same pre-Covid period, which shows that this system definitely has an effect. Similarly, in Spain, the increase in ridership has been more than substantial on suburban and medium-distance lines. According to the Observatoire des Transports Gratuits (Free Transport Observatory), unlike concessionary fares, free travel can have a psychological effect on users. Ridership on buses in Dunkirk, for example, has doubled since the introduction of free travel.
A policy not always easy to implement and featuring its own drawbacks
While some stakeholders, such as Greenpeace, welcome these pricing efforts, which previously seemed impossible, the shortfall in farebox revenue was the subject of tough negotiations in Germany between the federal government and the Länder. The implementation of the "climate ticket" in Austria also involved intense negotiations between transport operators, as well as between the country's various Länder.
The sudden influx of hundreds of thousands of users can also lead to a deterioration in service quality, as was observed in Germany at weekends. Passengers with bicycles were unable to get on board because of a lack of available seats. In these conditions, service punctuality, which is already notoriously poor in Germany, can only get worse...
Generally speaking, and unlike Austria, the issue arises of how to finance the investment in infrastructure required to maintain and develop these services. Germany, like France, is lagging behind in investment, leading to ageing and less reliable infrastructure, despite the ambition to significantly increase rail use by 2050. Germany will have to invest tens of billions of euros to upgrade and maintain its network over the next few years, as will France, raising questions as to the viability of these highly advantageous fare systems.
There is also the question of areas that are poorly served by public transport, which also have travel needs that are subject to the same inflationary phenomenon.
Are these schemes here to stay?
The development of these schemes, even before the recent energy crisis - whether to support social policy, relieve road traffic congestion or for environmental reasons - has been confirmed by the various measures taken by European governments since 2022. Lowering fares, or even making local and/or regional transport free, has been an effective way of helping households cope with the rising cost of living, and is likely to be an effective environmental solution. But the feasibility of these measures, and their long-term future, are open to question, given the historic under-investment in the rail network, which is struggling to absorb current demand. However, the Austrian case shows that a long-term strategy and major financial efforts can be compatible.
