Summary

In August 2007, Stockholm will become the second European city after London to introduce a congestion charge. Sweden’s new Alliance government made the decision following a successful seven-month trial in 2006, which reduced CO2 emissions by 14% or 25,000 tons annually, and traffic by 22% or 100,000 passengers/per day. Revenue raised from the reintroduced congestion charge should partly fund a new bypass road, 'Förbifart Stockholm', and inner city traffic improvements.

What is it?

The Stockholm congestion charge is a traffic congestion and environmental tax that has been imposed on the majority of vehicles in Stockholm. The primary purpose of the congestion tax is to reduce traffic congestion and improve the environment in central Stockholm.

How does it work?

The congestion charge was trialled between January 3 and July 31, 2006 and applied to most vehicles. Drivers were charged every time they entered in and out of the congestion zone. Their vehicle registration was filmed using high definition cameras and logged on a sophisticated database. Drivers were given up to 14 days to pay the tax, this could be done in a variety of ways – as a direct debit from individual accounts, or at shops. Payments were made after leaving the zone, and the taxation cost was linked to hours of entry. The trial delivered major reductions in CO2 emissions and congestion, prompting the Government to introduce the charge permanently.

Referendum

The Swedish government declared the congestion charge would be implemented following a controversial referendum in September 2006. Only Stockholm Municipality voted Yes to the charge, with 53% of the population supportive, other municipalities voted No by 60.2% - nationally only 39.8% voted Yes. Opinion polls have since shown greater public support for the charge.

Management of the system

In 2004, the City of Stockholm helped the Swedish Government’s Road Administration, the Vägverket, contract IBM to design, develop and operate the congestion charge system. IBM was responsible for technical and operational aspects, such as designing the cameras and computer accounting system. The Road Administration worked with the federal Tax Authority to manage the payment and fee structure, and overall administration.

The City of Stockholm, was responsible for procurement, analysis of the system and informing the public. It was also responsible for managing park and ride requirements for the public, including additional parking outside the city for those choosing to take public transport into the zone.The local County Authority was responsible for providing 200 new buses and 20 new bus lines from outside the zone into the centre. Additional rail trips and carriages were also provided by the National government during the trial.

IBM technology

IBM’s computer system and cameras have proved to be critical in the successful operation of the congestion charge. Automated Number Plate Recognition (ANPR) software enabled extremely accurate registration data to be collected on all vehicles and then compiled into a database. The cameras also provided evidence to support the enforcement of non-payers.

The database sorts each driver individually, separating exemptions from full payments and adjusting the price according to the hour vehicle entered the zone. Drivers are then automatically billed, usually by 7pm the same day. During the trial, the system processed about 120,000 of these congestion “decisions” every day.

Payment method

During the trial, payment was via a number of channels including direct debit triggered by on-board electronic transponders loaned to drivers. Two thirds of car owners paid by this method, the rest paid over the counter at 7 Eleven shops by simply providing their registration details and a special password. Shops were connected to the tax authority’s system to ensure immediate payment. Online web payments were also made. When the new system starts in August, drivers will no longer need transponders, but will be able to link to direct-debit facilities.

Cameras are situated at 18 control points at the entrances of the congestion zone. There are no payment booths because payment is made through direct-debit, at shops, or online

Cost

The congestion charge is tax deductible for individuals using their vehicles for work or going to and from work. The charge:

  • applies from 6:30 AM to 6:30 PM weekdays
  • costs 10 to 20 SEK (US$1.36 to US$2.72) each time a vehicle moves in or out of the zone.
  • does not apply during: Saturdays, Sundays, public holidays or the day before public holidays and every night between 6:30 PM and 6:29 AM
  • is capped at 60 SEK per vehicle per day (8.23 USD).

Currency rates as of May 25, 2006

Time of day Tax In other currencies
06:30 – 06:59 10 SEK 1.07 EUR, 1.37 USD
07:00 – 07:29 15 SEK 1.61 EUR, 2.06 USD
07:30 – 08:29 20 SEK 2.15 EUR, 2.74 USD
08:30 – 08:59 15 SEK  
09:00 – 15:29 10 SEK  
15:30 – 15:59 15 SEK  
16:00 – 17:29 20 SEK  
17:30 – 17:59 15 SEK  
18:00 – 18:29 10 SEK  
18:30 – 06:29 0 SEK  

Exemptions

Some classes of vehicles are exempt from the congestion tax:

  • Emergency services vehicles — while responding to an emergency
  • Buses with a total weight of at least 14 tons
  • Diplomatic corps registered vehicles
  • Military vehicles
  • Disabled people can nominate up to two cars for exemption
  • Environmental cars that are driven by electricity, biofuel or other approved fuels. These are only exempt for a five year period
  • Motorcycles and mopeds
  • Foreign-registered vehicles

CO2 Emissions Reductions

The trial delivered CO2 emissions reductions of 100 tons/week day - 25,000 tons annually. Congestion also decreased by 14% in inner city and 2-3% in country regions. Traffic on all inner streets and roads in the mornings and evenings also decreased, by an average of 22%. Travelling times also reduced by 30-50% inside the zone.

Next steps

The implementation of the charge will depend on legislation expected to pass through Parliament in April. It is anticipated that the congestion charge zone will be open from July 1, but charges will not be collected until August 1.

As a result of the trial, Stockholm is expected to make a number of changes to the congestion charge, including:

  • Expanding the number of shops where payments can be made
  • Eliminating the requirement for transponders to be used in cars, as a result of the high quality car recognition cameras at the entrance of the zone
  • Making a direct-debit payment system available to all drivers. Previously only vehicles with transponders could be linked to the direct debit payment system
  • Consideration given to extending the payment timeframe from 14 to 30 days

Funds from the congestion charge are expected to build a ring road, designed to allow traffic to bypass the capital, and traffic improvements for Stockholm city. Previous costs estimates for the road were 20 billion SEK (US$2.7 billion). Currently there are no clear timeframes or updated costs on construction.

Application

Stockholm has learnt a number of lessons from the trial, including:

  • A simple zone structurem for a congestion charge is more user-friendly: Different fees for different zones and different times makes the system complicated, that is why the City chose to keep the fee structure and times simple and easy to understand. They also clearly defined the zone perimeters, so that the public found it easier to identify and access.
  • A simplified payment process has been essential: The reliability of the cameras means transponders are no longer required to identify vehicles. During the trial two thirds of cars used transponders, which registered vehicles as they entered the zone and prompted a direct debit payment. The direct debit payment structure will now be available to all vehicles entering the zone, and more shops will be able to accept payments. The payment time may extend to 30 days.
  • Seasonal traffic variations must be considered: As a result, the month of July – which is a key holiday in Sweden - will be exempt from the charge.
  • Public transport access: The trial evaluation found that the 200 new buses, 20 additional bus routes, and additional rail services, may not be required when the system is implemented permanently because of the low numbers of people using the services.