In the current context of profound transformations in the transportation sector, the need to understand the dynamics and future prospects of local public transport (LPT) has become a priority for operators and stakeholders.

With this in mind, the Transport Cluster has prepared a paper that takes stock of LPT in Italy and Europe, offering a comprehensive overview of the sector’s performance, analyzed in terms of green transition, technological and service innovation, without neglecting issues related to investment and Total Cost of Ownership (TCO).

The Transportation Cluster report (which can be viewed at the following link) also offers an in-depth analysis of the challenges and opportunities facing the industry, highlighting trends that will redefine mobility in the coming years.

The seventh transportation revolution

Globally, the transportation sector is affected by potentially “disruptive” innovations.

These trends, the subject of the recent Transportation Cluster Conference, converge toward what is called the “seventh transportation revolution,” set to radically change the way people and goods move, as well as the planning, organization and management of services and vehicles.

In this scenario, LPT is one of the most affected sectors, as it is called to a process of system and vehicle integration that will most likely significantly change the current set-up.

The Transportation Cluster document

The role of the LPT in Italy

The local public transport (LPT) sector in Europe handles 60 billion trips per year, with public investment of 40 billion euros generating an overall economic impact of 130-150 billion.

In Italy, local mobility is predominant, with three out of four trips being within 10 km. However, the modal share of public transport has remained stationary and well below pre-pandemic levels (-2.2 percent as modal share).

Demand for public transportation, both road and rail, is about 10 percent below the 2019 figure, and this decline is particularly pronounced in some regions of southern Italy.

The trend in the use of public transportation

The use of public transport is directly proportional to the size and wealth of municipalities, as well as the availability and quality of services offered. In particular, there is evidence of gaps in LPT use between North-Central and South Italy, as well as between central areas and urban peripheries.

Car use, which is inversely proportional to income, is growing in suburban and peri-urban areas. As for intermodality, or the combined use of different means of transportation, it shows a small share, varying between 1.4 percent in the South and Islands and 5.1 percent in the Northwest Regions.

Italy’s transportation investment plan

Italy is implementing a major investment plan of about 400 billion euros for transportation, also supported by PNRR and PNC, the National Recovery and Resilience Plan and the Complementary National Plan, respectively, and earmarked for strategic infrastructure.

The main beneficiary is rail transport, with 183 billion euros, or 45 percent of the total investment, which will have major impacts on regional and local rail services.

For urban and metropolitan areas, on the other hand, 57 billion euros have been allocated, including 12 billion for fleet renewal (buses and trains), 20 billion for mass rapid transit, and 5.4 billion for new tramways.

As the Transport Cluster paper points out, however, the completion of these interventions will not make up for the accumulated deficit compared to major European countries for fixed-site systems (metros and streetcars).

The resources allocated to LPT in Italy

The resources allocated to the financing of LPT services in Italy (rubber and gerro) amount to about 7 billion euros annually, more than 70 percent of which comes from the National Transport Fund (NFT).

Despite this, the historical increase in FNT has been extremely limited over the past decade (just 300 million more since 2013), falling well short of inflation.

According to ASSTRA assessments, an increase of at least 800 million euros would be needed to compensate for inflation.

Green transition and decarbonization

The Italian bus fleet has 100,000 vehicles, 43,000 of which are for LPT, and 85 percent of these are still diesel, with half of them Euro V class or lower.

The average age of the TPL bus fleet at the end of 2024 is 10.3 years, significantly higher than the European average of 7.5 years.

The Italian bus market, in general, is growing strongly thanks to PNRR and PNC funds, with alternative drives to diesel increasing: electric buses account for nearly 18 percent and CNG buses for 22 percent.

The comparison of CO2 emissions and other pollutants reported in the paper also highlights the key role of fleet aging and the use of bio/renewable fuels.

Technology and service innovation

The “seventh transportation revolution” is first and foremost driven by theinteraction of digital technologies, artificial intelligence and the transformation of mobility services.

Technological innovations affect the vehicle (sensing, autonomous driving), the service (fleet monitoring, electronic ticketing, infomobility), and the interaction between vehicle and the external environment(Smart Roads, C-ITS).

The concept of “Mobility as a Service” (MaaS), with integrated platforms, is essential to respond to the fragmentation of demand and is proceeding with trials also funded in Italy by the PNRR.

Demand Responsive Transit (DRT), on the other hand, shows cost reduction and increased ridership, but is hampered by scalability issues, profitability uncertainty, and an insufficient regulatory framework.

New technologies also improve security on board and in stations through smart video surveillance systems and will transform work tasks, requiring retraining of staff.

An eco-rational approach to future mobility

According to the paper, a diesel or mild-hybrid bus costs about half as much as an electric bus and allows twice as many obsolete vehicles to be replaced for the same investment, with emissions reductions primarily related to the elimination of older vehicles.

With the use of renewable fuels (HVO or biomethane), the WtW CO2 emissions of new diesels are similar to those of electric buses, making diesel a “rational” choice. In addition, hydrogen and LNG buses are scarcely available in the market, while electric and CNG are only available for Class I.

In terms of operating costs (energy and maintenance), they are higher on average for alternative fuels than for diesel, and small and medium-sized companies struggle to manage multi-carrier fleets due to lack of expertise.

All of this data underscores the need to take a step-by-step approach to energy transition, including with traditional technologies and low-carbon fuels, in order to improve service quality and, at the same time, stimulate modal shift.