Transport contributes to several environmental problems such as climate change, air emissions and noise and is at the same time favoured by significant subsidies. An EEA report identifies European transport subsidies worth at least EUR 270 to 290 billion a year.
Road transport receives EUR 125 billion in annual subsidies, most of it as infrastructure subsidies, assuming that taxes on road transport are not regarded as contributions to finance infrastructure.
Aviation, as the mode with the highest specific climate impact, gets significant subsidies in the form of preferential tax treatment, in particular exemptions from fuel tax and VAT, which add up to EUR 27 to 35 billion per year.
Rail is subsidised with EUR 73 billion per year and benefits the most from other on-budget subsidies.
For water-borne transport, EUR 14 to 30 billion in subsidies have been identified.