Zero emissions zones don’t lead to higher consumer prices in stores

Transport companies’ investments in zero-emission (ZE) trucks and charging infrastructure will not result in higher consumer costs at checkout. Outgoing State Secretary Vivianne Heijnen of the Dutch Ministry of IenW is not concerned about any costs that may be passed on to the end customer. Panteia conducted the research.

Rising transport costs

Until 2030, the effect of the limited additional investments in ZE (Zero Emission) transport on the prices of consumer products will be minimal. But even after that, the effect is likely to remain marginal. This is because transport costs will increase, including for transport with diesel trucks. Rising costs for labor and energy also play a role, as well as pricing for CO2 emissions. In summary, transportation will become more expensive due to multiple factors, including investment in ZE transport.

The share of transport costs within product costs is small. Due to the overall rise in costs, including for the production of consumer goods, it is expected that even with the use of ZE trucks, the proportion of transport costs to total product costs will remain the same. The cost share of transport costs in product costs averages between 1 and 5%.

Passing on higher costs?

The additional costs for zero-emission transport are not always fully passed on to the customer. This is due to various reasons, with the transition to ZE transport still being in the development phase. Companies often absorb some extra costs and ultimately explore how to pass them on to the customer.

Different approaches are being applied.

Some companies have invested in ZE transport with their customers, allowing them to pass on these costs either entirely or partially through transport rates, providing more certainty about covering part of them. Another company offers various transport options, allowing customers to choose between fully emission-free transport with a ZE truck, CO2-neutral transport with HVO, or transport with a diesel truck. Each option has its price, allowing costs to be directly passed on to the customer.

However, this is not always the case. Some companies do not pass on the additional costs to the shipper or only for some of their trips. This happens for various reasons. For example, some companies cannot pass on the extra costs for groupage transport because customers might switch to competitors. The price difference with competitors using diesel trucks would become too large, according to the researchers at Panteia. Another interesting point is that it’s not so much passing on the additional costs of the vehicle that’s a problem, but rather that of the necessary investments in charging infrastructure. In short, there is still much uncertainty about how the passing on of the additional costs will develop exactly.

Source: Dutch Ministerie IenW

Leave a Reply

Your email address will not be published. Required fields are marked *