In 2022, transport accounted for 28.9% of GHG emissions in the EU-27, including international bunkers, and remained the only major sector where emissions had not declined since 1990. The EU has set ambitious targets, but between countries investing in common infrastructure and those relying on market signals, a gap has widened that will not close on its own. This gap threatens to transform transport’s climate commitments into political posturing.
The Essentials
- Transport is the only EU sector whose emissions have not declined since 1990, representing 26% of the European total in 2026.
- Vehicle electrification advances on the surface, 23% of new sales in 2025, but masks massive disparities: 89% in Norway, 31% in the Netherlands, less than 10% in Eastern Europe (Transport & Environment).
- Rail freight, the only real lever for decarbonizing large-scale goods transport, represents 17% of the total in 2022, against a European target of 30% by 2030.
- The financing gap reaches 70 billion euros per year until 2050, of which 30 billion for infrastructure alone, according to the European Commission.
- Without pooled financing at the European level, countries that cannot or will not invest will remain blocked, making the sector’s climate targets collectively unreachable.
Rail Freight Declines When It Should Accelerate
Let us start with the most revealing data point. In 2022, rail represented 17.2% of EU terrestrial freight, according to the European Commission. The European strategy provides for a 50% increase in rail freight traffic by 2030. The gap is explained notably by growth in freight demand and the increase in the modal share of roads; the precise effect of deferred rail investments requires separate demonstration.
Meanwhile, emissions linked to road freight and heavy vehicles have generally increased, despite efficiency gains. Trucks account for approximately 26% of European road transport emissions for barely 3% of vehicles in circulation, a structural power dynamic that carbon neutrality targets cannot ignore. The electrification of heavy vehicles is advancing, but slowly: infrastructure for heavy vehicles remains unevenly deployed and faces gaps, but their deployment falls under European obligations and also benefits from European funding, supplementing national and private financing.
Hydrogen and electric locomotives exist, and rail operators are ready to invest in rolling stock. The obstacles lie upstream: a fragmented rail network, variable gauges depending on the country, national infrastructure managers who do not coordinate their decisions, and public investments that remain sovereign arbitrations. A wagon crossing France, Germany, and Poland can change locomotives three times due to incompatible power supply systems. This inefficiency is the product of accumulated national decisions over a century, which the market alone cannot correct.
The Netherlands Demonstrates What Coordinated Public Investment Produces
One must compare modal shares calculated with the same perimeter, for example terrestrial freight in tonne-kilometers. This gap is not explained by geography—the country is flat and dense, which is not a priori favorable to rail. It is explained by consistent political decisions over several decades: public financing of multimodal hubs, integration between the Port of Rotterdam, rail network and continental corridors, and centralized management of capacities.
Rotterdam is Europe’s leading port and a logistics node where rail, inland waterway, and road have been deliberately connected through public investments. Rotterdam’s infrastructure and the Betuwe Route support rail, supplemented by public measures, particularly temporary aid on access fees. Competitiveness results from the system’s quality, not from permanent financial compensation.
By contrast, Germany, the EU’s leading economy, stagnates around 17-20% rail freight despite a dense network. Deutsche Bahn Cargo suffers from saturated infrastructure, chronic delays, and under-capitalization dating back to the 1990s. The federal government has announced a ten-year rail modernization program, but it arrives after decades of disinvestment and budget constraints. Poland and Italy present similar configurations: rail networks requiring profound renovation and limited public financing capacity or constrained by other priorities.
The Dutch lesson is clear: when infrastructure exists, operators use it. When it does not, the market chooses the truck by default.
Vehicle Electrification Advances, But Not Where It Matters Most
On passenger car electrification, surface figures are encouraging. In the EU, 17.4% of new cars registered in 2025 were 100% electric. But this average masks a multi-speed reality. Norway, outside the EU but within the European Economic Area, reaches 89%, a result associated with decades of strong fiscal incentives, usage advantages often local, and public policy supporting charging, with implementation involving municipalities and operators. The Netherlands shows 31%.
At the other end of the spectrum, Central and Eastern European countries remain below 10%.
This dispersion is not a market accident. It reflects different income levels, different fiscal policies, and above all radically unequal charging infrastructure. A driver in Poland or Romania considering an electric vehicle faces an insufficient network of fast chargers for long journeys, absolutely higher vehicle prices, and less generous national fiscal incentives. Price signals alone do not create demand when infrastructure is lacking.
The EU created the AFIR regulation (Alternative Fuels Infrastructure Regulation), which mandates rapid charger deployment milestones along major European axes by 2025 and 2030. This is real progress: for the first time, a binding framework exists at the European level for charging infrastructure. But financing remains predominantly national, and the poorest member states find themselves having to finance expensive infrastructure with narrow tax bases. Obligations exist; financial transfers to meet them are insufficient.
On maritime transport, tensions related to new EU emissions rules illustrate how sectoral economic logics complicate the transition, even when regulation is in place.
70 Billion Per Year: Who Finances, Who Benefits
The Commission estimates additional public and private needs of 205 billion euros per year between 2021 and 2030, without establishing in this source a gap of 70 billion of which 30 billion for infrastructure. To put this figure in perspective: the EU’s total budget for 2024 was 189 billion.
The Connecting Europe Facility (CEF) finances cross-border infrastructure projects, but its allocations remain far below identified needs. Structural funds and the Cohesion Fund support investments in less developed countries, but with conditions and slow absorption timelines. The European Investment Bank finances rail and electromobility projects, but as loans, not grants, which limits attractiveness for projects with long or uncertain returns.
The result of this fragmented architecture is predictable: countries with means invest and advance; countries without means wait. Germany launches its rail program. Poland gradually modernizes its lines with European cohesion funds. Southern Italy, Romania, Bulgaria remain in waiting. A single market for decarbonized mobility assumes common infrastructure; common infrastructure assumes pooled financing.
On the question of dependence on fossil fuels and its economic challenge, sectoral dynamics show how established rents resist their own obsolescence.
Two-Speed Decarbonation Through 2040
The current trajectory draws two plausible scenarios for 2040, and they diverge sharply.
In the first, financing remains fragmented. Each member state assumes infrastructure investments according to its capacity. Northern and Western European countries, the Netherlands, Belgium, Austria, Scandinavia, achieve transport decarbonation levels close to targets. Germany, after a decade of rail catch-up, approaches targets. But Poland, Romania, Bulgaria, Hungary remain halfway: their car electrification remains below 40%, their rail freight stagnates below 25%, their transport emissions decline but insufficiently.
Europe reaches its aggregate targets on paper thanks to the high performers, but populations in the poorest countries continue to depend massively on fossil fuels for their movements.
This scenario is not hypothetical: it corresponds to current dynamics, extrapolated. It produces a single market at two speeds where logistics companies in advanced countries benefit from competitive decarbonized infrastructure, while their Central European competitors operate with rising carbon costs linked to ETS2, which covers notably road transport and must become fully operational in 2028. Unequal competitiveness risks fueling political tensions over European convergence.
In the second scenario, the EU undertakes substantial reallocation toward common infrastructure in its next multiannual financial framework (MFF 2028-2034). Signals exist: the revision of the current MFF has already integrated greater flexibility for green transitions, and several member states advocate for a common financing instrument for strategic investments. The Commission estimates 205 billion euros in annual additional needs for 2021-2030, without a target of 30 billion annually limited to infrastructure in this source.
This scenario requires difficult political agreement. Net contributor states, Germany, the Netherlands, Austria leading, historically resist any expansion of transfers. But the argument has shifted: European industrial competitiveness depends on common decarbonized logistical corridors. A German manufacturer exporting to Asia through a Polish or Romanian port suffers as much from rail insufficiency in those countries as the local economy does. Infrastructure pooling is no longer merely a solidarity argument; it becomes a value chain argument.
The OECD’s ITF identifies several indicators to distinguish which of these scenarios will materialize: the level of rail commitment in the next MFF, the nature of financing mechanisms for transport ETS (the proceeds of the carbon tax will be reinvested in infrastructure subsidies or general tax reduction), and the deployment speed of hydrogen corridors for heavy freight along TEN-T axes. These three variables will be decided between 2025 and 2028.
The Limits of AFIR
The EU has built a substantial regulatory corpus. Beyond AFIR, the regulation on emissions from new cars imposes, from 2035, a European target for 100% reduction in average CO2 emissions from new cars and vans. FuelEU Maritime mandates low-carbon fuels in maritime transport. ReFuelEU Aviation targets sustainable aviation fuels. The extension of ETS to road and maritime transport is underway.
This corpus is real and more constraining than it was ten years ago. But regulation sets obligations without always providing the means to meet them. From 2028, fuel suppliers must surrender quotas for 2027 emissions; cost pass-through to transporters is possible, while access to alternatives depends on routes, markets, and available infrastructure. Regulation creates pressure; infrastructure creates possibility. Without the latter, the former produces additional costs without real transition.
The logic is comparable to what is observed in other digital or industrial sectors: regulating without building is insufficient. Regulating the cloud instead of building it is insufficient, the same reasoning applies to rail freight corridors and charging networks: regulatory constraint without collective capacity to meet it displaces costs without decarbonizing.
European rail operators, DB Cargo, Fret SNCF, Rail Cargo Austria, PKP Cargo, are investing in low-carbon rolling stock. Some ports like Antwerp, Rotterdam, and Hamburg are developing multimodal hubs at the European scale. Industrial consortiums are testing hydrogen corridors for heavy freight in Scandinavia and Germany. These initiatives fit within continental frameworks, including AFIR and TEN-T, implemented through European, national, and private funding and decisions.
What Is at Stake by 2028
Decarbonization of European transport will depend on financial frameworks from 2028 to 2034 and financing for necessary infrastructure.
Concrete initiatives merit close monitoring. The revision of the TEN-T regulation, adopted in 2024, tightens obligations on European rail corridors and imposes delivery deadlines on member states. The deployment of the Social Climate Fund, which begins in 2026, will inject resources to support the most vulnerable households facing energy transition costs, including in transport. The question remains whether these instruments will be sufficiently resourced, flexible enough, and well-coordinated to transform regulatory signals into tangible infrastructure in regions that need it most.
In Norway, 89% of new passenger cars were electric in 2024; this example is compatible with a policy and investment effect, without demonstrating broad general causality. The bad news is that reproducing these choices across the entire EU requires exactly what Europe struggles to do: collectively decide to finance together what no single state can finance alone.
Sources
- Transport & Environment, Europe’s transport sector set to make up almost half of the continent’s emissions in 2030: https://www.transportenvironment.org/articles/europes-transport-sector-set-to-make-up-almost-half-of-the-continents-emissions-in-2030
- European Commission, DG CLIMA, sectoral emissions data and sustainable transport financing gap
- OECD / International Transport Forum (ITF), modal trajectories and 2021-2026 projections
- European Commission, AFIR Regulation (Alternative Fuels Infrastructure Regulation), 2023
- European Commission, Revision of the TEN-T regulation (trans-European transport network), 2024
- World Bank, rail freight modal share data by country