Many Dutch households risk facing transport poverty in the transition to sustainable mobility

Research has shown between 113,000 and 270,000 households in the Netherlands have low incomes and high fuel costs, most of which are in medium-sized cities. This group of 'at-risk' households is vulnerable to fiscal measures and other policies that drive more sustainable mobility behaviour. Lowering excise duty is not seen as a cost-effective measure to help these households because 98% of it does not reach the most vulnerable households.

The Netherlands Organisation for Applied Scientific Research (TNO) investigated, based on previously uncombined microdata, how many households in the Netherlands are potentially vulnerable to the mobility impacts of the energy transition. In the study, they show how many, and which, households in the Netherlands have a combined low income and high car mileage, making them vulnerable to higher fuel costs, for instance, due to CO₂ pricing. This study also examined the extent to which these households are dependent on their car, in the sense that their access to nearby public transport is limited. Finally, the financial capability of households was also taken into account, which helps determine whether these households would be financially able to purchase an electric car as an alternative to their fuel car.

"In the energy transition, the use of a fuel car is increasingly discouraged by regulations and pricing. Think of environmental zones in cities and higher fuel prices through environmental taxes. These measures are intended to reduce emissions, but it is important to keep an eye on households that cannot join the desired switch to sustainable transport on their own," says Peter Mulder, lead author of the study. "This is because not all households have the same ability to respond to price incentives or other sustainability policies. If a household is car-dependent and cannot buy an electric car due to limited financial resources, higher costs of a fuel car due to environmental measures lead to higher mobility costs. Especially for poorer households, this increases the risk of transport poverty. That means they are at risk of being unable to reach certain jobs, amenities and social relationships because of excessively high transport costs," Mulder explains.

TNO's analysis showed that between 113,000 and 270,000 households in the Netherlands have low income and high fuel costs. In this group, between 73,000 and 175,000 households are extra vulnerable because they have low financial assets and limited access to open transport. The exact figure depends on the fuel price and the low-income threshold used. On average, they consume about 40% more fuel than the average household with a private car, and the cost of this is on average between 10% and 12% of the households' income.

This so-called fuel ratio (fuel costs as a percentage of income) for all households averages at 4.5%. About 60% to 70% of the at-risk group of poor households with a car are also energy-poor in the sense that they live in poorly insulated houses with relatively high energy costs. Mulder noticed: "The high fuel costs of these 'at-risk' households with a car are primarily caused by high mileage. Our data shows that this is not only due to commuting; we see similar travel behaviour among pensioners and people on benefits. More research is needed into the background to this."

The group of households, vulnerable to measures to promote sustainable mobility, includes many families with children, and one-parent households are especially over-represented. The source of income of these 'at-risk' households is also often benefits or pensions. 'At-risk' households with a car more often live in medium-sized cities than in rural areas and are mainly located on the south-eastern edge of the Netherlands, including in the region of Venlo, Enschede and Zevenaar, in the area in the line Bergen op Zoom - Oss and several metropolitan districts of Rotterdam and Almere.

The government implemented an excise duty reduction between April 2022 and July 2023 due to high fuel prices. A simulation showed that due to their high mileage, the identified group of 'at-risk' households would have received around €260-300 in excise duty reduction on an annual basis, compared to an average of €185 for other car households.

Peter Mulder highlighted: "Because they drive a lot of kilometres, the 'at-risk' households with a car benefited greatly from this tax reduction. But because only a few percent of all households belong to this vulnerable group, about 98% of the cost of this measure benefits less or non-vulnerable households. The latter group spends on average less than 4% of their income on fuel. Reducing excise duty for all is therefore an inefficient and expensive way to help a relatively small group of vulnerable households."

The TNO study showed that a group of low-income car owners risks being hit disproportionately hard by sustainable mobility policies. To prevent these people from facing a mobility problem because of rising mobility costs, it is good to think about new forms of transport policy. Generic (fiscal) compensation measures such as an excise duty reduction are not a cost-effective route to reduce the risk of transport poverty. Mulder stated:"This is due to the specific characteristics of this group and their relatively small size. Policies aimed at enabling more intensive use of alternative means of transport such as electric bicycles, shared transport and public transport seem more promising, especially since the majority of 'at risk' households live in urban areas, but more research is needed to make concrete statements on this. Finally, our study also gives reason to take another close look at planned locations of new housing developments: are enough jobs and amenities accessible from those locations without depending on the car? Especially for groups with lower incomes, this question is becoming increasingly important in the energy transition."