Biomass traf­fic set for hike in track ac­cess charges

Rail (UK) - - News -

Ex­tra charges look im­mi­nent for biomass traf­fic af­ter a re­view by a con­sul­tant work­ing for the Of­fice of Rail and Road (ORR) found that the mar­ket could bear an in­crease in track ac­cess charges.

The con­sul­tant, Cam­bridge Eco­nomic Pol­icy As­so­ciates (CEPA), reached that con­clu­sion on the ba­sis that biomass plants at Drax and Lynemouth and ports serv­ing them had in­vested heav­ily in rail and so were not likely to switch to lor­ries in­stead. How­ever, it noted lit­tle over­all growth in biomass with a lack of govern­ment sub­si­dies for the fuel. It con­cluded that sub­si­dies would have a far greater in­flu­ence on the mar­ket than any sup­ple­men­tary rail ac­cess charge and said that it con­sid­ered, with some cau­tion, that the mar­ket could bear an ex­tra ‘freight spe­cific charge’ (FSC).

The charge al­ready ap­plies to coal traf­fic for power sta­tions. De­spite re­cent re­duc­tions in such traf­fic, CEPA rec­om­mends that ORR keep the FSC. It sug­gests that lit­tle traf­fic will switch to roads and that the charge makes lit­tle dif­fer­ence to the over­all dif­fer­ence be­tween the costs of elec­tric­ity pro­duc­tion from coal and gas.

If the ORR takes CEPA’s con­clu­sions for­ward into its fi­nal de­ter­mi­na­tion of track ac­cess charges (of which FSC forms a part) for Con­trol Pe­riod 6 (2019-2024), then freight spe­cific charges will re­main for nu­clear waste traf­fic and iron ore, but re­main un­likely for ag­gre­gates or con­tain­ers.

CEPA found con­sid­er­able com­pe­ti­tion be­tween quar­ries to sup­ply ag­gre­gates and com­pe­ti­tion be­tween road and rail to carry stone to dis­tri­bu­tion cen­tres, from where road is the usual trans­port. This makes it easy to switch en­tirely to road haulage, the con­sul­tant ar­gued. With this com­pe­ti­tion, it con­cluded that ag­gre­gates could not bear ex­tra charges.

The pic­ture for in­ter­modal trains car­ry­ing con­tain­ers was more mixed, with CEPA sug­gest­ing that some flows might be able to bear ex­tra charges while oth­ers could not. Al­though the con­tainer mar­ket has grown on rail, up 8% to 6.7 bil­lion net tonne kilo­me­tres (ntkm) be­tween 2013 and 2016, the rail­way had been ex­pect­ing higher growth and planned on 18bn ntkm by 2023, which Net­work Rail de­scribes now as chal­leng­ing.

Rail com­petes with road and ship­ping feeder ser­vices from deep-sea ports, and with road be­tween in­land ware­houses. CEPA found that rail was more dom­i­nant on some routes than oth­ers, for ex­am­ple on long-dis­tance routes from Eng­land’s south coast. With ORR defin­ing freight mar­kets by com­mod­ity and ap­ply­ing charges to mar­kets, CEPA con­cluded that charges would not be jus­ti­fied for some flows within a mar­ket and so should not ap­ply to any.

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