EUROPEAN COMMISSION

Brussels, 7.12.2023

SWD(2023) 401 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the protection of animals during transport and related operations, amending Council Regulation (EC) No 1255/97 and repealing Council Regulation (EC) No 1/2005

{COM(2023) 770 final} - {SEC(2023) 397 final} - {SWD(2023) 399 final} - {SWD(2023) 402 final}

Contents

Annex 1: Procedural information

1.Lead DG, Decide Planning/CWP references

2.Organisation and timing

3.Consultation of the RSB

4.Evidence, sources and quality

Annex 2: Stakeholder consultation (Synopsis report)

Annex 3: Who is affected and how?

1.Practical implications of the initiative

2.Administrative and adjustment costs (One-in, One-out)

Summary of costs and benefits

3.Relevant sustainable development goals

Annex 4: Analytical methods

1.Baseline

2.Methodology and models

2.1.Identification of potential impacts and indicators used

2.2.Multi-Criteria Decision Analysis (MCDA)

2.3.Supply chain analysis

2.4.Assessment of cumulative impacts on production levels and consumer prices with the Agricultural Commodity Market Model (by JRC)

2.5.Costs and benefits

2.6.Assessment of food affordability

2.7.Comparison of the options and of the packages of options

3.Sources and challenges

4.Correlation tables with external study for the MCDA

5.Sensitivity Analysis

Annex 5: Competitiveness check

1.Overview of impacts on competitiveness

2.Synthetic assessment

2.1.Cost and price competitiveness

2.2.International competitiveness

2.3.Capacity to innovate

2.4.SME competitiveness

Annex 6: SME Test

Annex 7: EFSA opinions

EFSA’s main recommendations on the welfare of animals during transport:

Space allowance during transport

Transport Poultry:

Transport Rabbits:

Specific means of transport:

Annex 8: Other EU legislation and policies

Annex 9: Detailed impact assessment

3.Journey times and space allowance

3.1.1.    Background and non-action scenario    

3.1.2.    Animal welfare impacts    

3.1.3.    Economic impacts    

3.1.4.    Social impacts    

3.1.5.    Environmental impacts    

3.2.Exports

3.2.1.    Background and non-action scenario    

3.2.2.    Animal welfare impacts    

3.2.3.    Economic impacts    

3.2.4.    Social impacts    

3.2.5.    Environmental impacts    

3.3.Transport of unweaned calves

3.3.1.    Background and non-action scenario    

3.3.2.    Animal welfare impacts    

3.3.3.    Economic impacts    

3.4.Hot temperatures

3.4.1.    Background and non-action scenario    

3.4.2.    Animal welfare impacts    

3.4.3.    Economic impacts    

3.4.4.    Social impacts    

3.4.5.    Environmental impacts    

3.5.New technologies

3.5.1.    Background and non-action scenario    

3.5.2.    Animal welfare impacts    

3.5.3.    Economic impacts    

3.5.4.    Social impacts    

3.5.5.    Environmental impacts    

3.6.Transport of cats and dogs

3.6.1.    Background and non-action scenario    

3.6.2.    Animal welfare impacts    

3.6.3.    Economic impacts    

3.6.4.    Social impacts    

3.6.5.    Environmental impacts    

Annex 1: Procedural information

1.Lead DG, Decide Planning/CWP references

The Directorate for Health and Food Safety (DG SANTE) is the lead DG on the initiative on the Proposal for a Regulation of the European Parliament and of the Council on the protection of animals during transport and related operations (repealing and replacing Council Regulation (EC) 1/2005).

The initiative has the reference PLAN/2022/1491 in the Agenda Planning.

The initiative is in the Annex 1 of the European Commission's Work Programme for 2023 1  (under the heading “A European Green Deal”, item 5).

The Fitness Check of the existing animal welfare legislation 2 , which includes the Transport Regulation, was published on 4 October 2022, after it received a positive opinion from the RSB with recommendations that have been addressed.

2.Organisation and timing

An Inter-Service Steering Group (ISSG) was first established in May 2020 for the purpose of the Fitness Check of the existing animal welfare legislation and involved representatives from several Commission’ services: DG AGRI, DG INTPA, DG ENV, DG JUST, DG MARE, DG MOVE, DG NEAR, DG TRADE, DG RTD, DG JRC, Legal Service and the Secretariat General.

The mandate of the existing ISSG was amended to also cover the work on the revision of the animal welfare legislation, which included transport. The ISSG met on 12 December 2022, 19 January 2023, 20 February 2023, 27 March 2023 and 9 June 2023. The members of the ISSG were regularly informed on the progress of the initiative and invited to relevant meetings.

3.Consultation of the RSB

An upstream meeting with the Regulatory Scrutiny Board (RSB) was held on 3 October 2022. At the meeting, the Commission introduced the initiative and its objectives, as well as the methodological challenges (e.g. unquantifiable benefits, lack of data, timing of certain scientific input, as well as uncertainties related to food security).

This Impact Assessment Report, covering the initiative on the protection of animals during transport, was submitted to the RSB on 30 October 2023 and benefitted from a written procedure. The RSB opinion was received on 17 November 2023. The RSB gave a positive opinion with reservations, based on the following findings:

(1) The analysis of costs and benefits is not clearly presented.

(2) The analysis of impacts on competitiveness and the distributional impacts in the supply chain, including on producers and consumers, is not sufficiently comprehensive.

(3) The comparison of options is not sufficiently clear.

The table below lists the changes made to the Impact Assessment Report in response to the detailed recommendations of the RSB in its opinion:

Table 1: RSB recommendations

4.Evidence, sources and quality

The Impact Assessment Report has built on the Fitness Check of the EU animal welfare legislation as well as new scientific evidence on animal welfare, in particular the EFSA recommendations listed in Annex 7.

The Impact Assessment Report takes into account the input from stakeholders, including the feedback on the  Inception Impact Assessment 3  (IIA) and the contributions to the Public Consultation 4   (PC). The IIA, covering both the fitness check and the impact assessment, was published on 6 July 2021 and open for feedback until 24 August 2021. The PC, also covering both the fitness check and the impact assessment, ran from 15 October 2021 to 21 January 2022.

An external study 5  supporting the impact assessment accompanying the initiative on the welfare of animals during transport was carried out. This study gathered information and data on impacts and costs for stakeholders of the initially proposed measures and options (it should be noted that some measures presented in this impact assessment report deviate from the measures that were originally assessed in the external supporting study), and further documented six case studies. Views from stakeholders gathered during the targeted consultation activities (surveys, interviews, focus groups, workshop) organised in the context of this study are presented in Annex 2.In addition, an assessment of the cumulative impacts of the two proposed packages of measures and options was made based on a supply chain analysis by external experts.

Finally, the Commission’s Joint Research Centre has performed two analysis:

-the outcome of the supply chain analysis on impact on production costs was used to model impacts on production levels, consumer prices, exports and imports

-The impacts of the two packages on food security and food affordability were assessed.

As part of the supporting study, statistical sources and databases have been consulted:

·Eurostat (e.g. EU trade, annual enterprise statistics, labour force main indicators, etc);

·European Commission databases or reports (e.g. overview reports of DG SANTE Directorate for audits and analysis, Trade Control and Expert System (TRACES)); 

·Other European institutions or international statistical sources (e.g. EPRS reports, European Court of Auditors reports, UN Comtrade, etc.).

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Annex 2: Stakeholder consultation (Synopsis report)

This synopsis report provides an overview of the results of the consultation activities carried out in the context of the Impact Assessment supporting the initiative on the protection of animals during transport.

1.Consultation strategy

The aims of the consultations were to:

·inform stakeholders and the public on the ongoing impact assessment.

·receive views of the public and stakeholders on possible future options; and

·to gather evidence and data regarding impacts of policy options from stakeholders.

2.IDENTIFIED STAKEHOLDERS

The initiative is relevant to a wide and varied range of stakeholders. The main categories of concerned stakeholders are:

·Business and professional organisations in the food supply chain (including in particular: farmers, transporters and meat production/processing).

·Competent authorities of the EU Member States responsible for animal transport.

·Citizens (EU and non-EU).

·NGOs active at Union level in relation to animal welfare, sustainability and environmental policies, and consumer organisations.

·Trade Unions

·Experts from academic and research institutes active in the field of animal welfare.

·European bodies, including the European Food Safety Authority (EFSA).

·International intergovernmental organisations active on animal welfare.

·Third country trading partners with the EU.

3.Overview of consultation activities and evidence gathered

Table 1: Overview of consultation activities carried out per stakeholder group relevant to the protection of animals during transport

Inception Impact Assessment

The Inception Impact Assessment 8 (IIA) on the revision of the EU legislation on animal welfare , presenting the objectives of the revision and the policy options under consideration, was published on 6 July 2021 and open for feedback until 24 August 2021. Amongst others, it covered animal welfare during transport. There was a total of 983 feedback received and additional information was provided as part of the responses of 114 organisations, including NGOs, business associations and companies / business organisations. After the screening of the feedback 9 , 110 feedback were identified as belonging to four stakeholder campaigns leading to a total of 873 individual feedback.  Out of these, 525 have been analysed as relevant to the protection of animals during transport in the context of the external study.

Based on the 525 individual contributions relevant to transport, the majority of feedback was received from EU citizens (428; 81.52%), followed by NGOs (43; 8.19%) and business associations (15; 2.86%) and company/business organisation (13; 2.48%). 515 contributions came from stakeholders from EU Member States, three from stakeholders from the UK and 7 from stakeholders from other third countries. There were no responses from respondents from seven Member States 10 .

Interviews

As part of the external study, nine exploratory interviews were conducted to discuss the challenges with the current implementation of the Transport Regulation as well as to gather views on the proposed policy options including their impacts. The interviews were also used to gather feedback about information sources that could be consulted in the context of the study. Consulted stakeholders in this context were: competent authorities from three Member States, two NGOs, one business association, one international organisation, one academic expert and representatives of the European Commission (DG SANTE). 43 other interviews were carried out as part of the six case studies and were used to assess the impacts of the options in specific contexts. They are therefore not reported in this annex.

Survey

As part of the external study, one targeted survey was completed. It aimed to collect information on the options considered and their potential impacts. This included views on whether the options would result in adjustment costs or changes in administrative and enforcement costs. The survey targeted competent authorities (20 contributions), businesses (14 contributions) or associations representing them (19 contributions), NGOs (11 contributions) and researchers/academics (2 contributions). Two respondents replied as ‘other’. 68 responses have been analysed 11 .

Focus groups and workshop

As part of the external study, two focus groups and one workshop were organised in September 2022 in order to discuss the findings of the study with relevant stakeholders and gather feedback and insights.

The two focus groups gathered different types of stakeholders to ensure targeted and robust discussion:

·The first focus group brought together 22 representatives of businesses or business associations (representing transporters, breeders and producers) and 11 competent authorities from nine Member States. The discussion covered the economic impacts, focusing especially on potential costs, of the options related to transport conditions, exports to non-EU countries, the transport of vulnerable animals and monitoring.

·The second focus group brought together 17 representatives of NGOs (11) and academic or other relevant experts on animal welfare (6). The discussion covered mainly issues and impacts on animal welfare of the options on transport conditions, exports to non-EU countries, transport of vulnerable animals and monitoring.

The workshop gathered 80 participants representing 35 business associations (transporters, breeders, agriculture/producers) and three business organisations / companies, 17 competent authorities from 12 Member States 12 , nine NGOs, five academic experts and six stakeholders from EU institutions, international organisations and non-EU countries. The analysis and main conclusions for the policy measures were presented for the participants to express views on the findings, in particular on the effectiveness of the different options considered.

Public consultation

The Public Consultation 13  (PC) on the revision of the EU animal welfare legislation  ran from 15 October 2021 to 21 January 2022.

The Impact Assessment Report presents the outcomes of the analysis of the public consultation as carried out in the external study.  The analysis has been performed based on 59 281 total contributions 14 . 1 546 contributions as being part of campaigns were identified.

As part of the valid individual contributions analysed (57 727), the vast majority of respondents were EU citizens (54 600 contributions; 92,12%) and non EU citizens (2 817 contributions; 4.75%). Other contributions were received from businesses (537 contributions; 0.91%) and business associations (123 contributions; 0,21%) but also from NGOs (266 contributions, 0.45%), academic/research institution (116 contributions; 0.20%), environmental organisation (92 contributions; 0.16%) and consumer organisations (11 contributions; 0.02%). 83 contributions were also received from public authorities (0.14%), trade unions (38 contributions; 0.06%) and respondents categorised as ‘Other’ (590 contributions, 1%).

1 546 contributions were identified as part of 10 campaigns and analysed separately. Nearly all of the respondents gave their contribution as EU and non-EU citizens (1 521 out of 1 546; 98.4%). The other respondents gave their contributions as another type of stakeholders (25 out of 1546; 1.6%), predominantly as representing an NGO (12 out of 1546; 0.8%).

Other consultation activities

A Stakeholder Conference 15 was organised on 9 December 2021. The conference provided an opportunity to elaborate on possible improvements for the future, as well as for stakeholders to validate the preliminary findings of the Inception Impact Assessment. One panel covered the specific challenges of animal welfare during transport (Panel 3). Almost 500 stakeholders, representing e.g. Member States, NGOs, academia, SMEs and international organisations, participated in the discussions.

In addition, since the publication of the Inception Impact Assessment in July 2021 and until the end of March 2023 when the Impact Assessment Report (initially covering a potential revision of the different legislations on animal welfare) was first submitted to the RSB, the Commission has held 72 meetings with stakeholders both from industry and civil society. During the meetings, stakeholders could provide their views, insights and when available any additional data to inform the work of the European Commission. Since then, the Commission has continued liaising with many stakeholders and the Impact Assessment report on the revision of the legislation on the welfare of animals during transport has been enriched with elements coming from this additional consultation.

4.methodology

All concerned stakeholder categories were reached throughout the various consultation activities and participated. All expressed views were analysed and taken into account as part of the evidence base of the Impact Assessment. Table 1 “Stakeholders engaged per consultation activity” (presented under section 1.) provides an overview of stakeholders consulted as part of the Impact Assessment.

The supporting study conducted a quantitative and qualitative analysis of information gathered through the different consultation activities. The quantitative analysis included a statistical analysis of the results of the public consultation and the targeted surveys. The analysis of the evidence from consultation activities was conducted first at the level of individual data collection tools. Then, to the extent possible, the data was triangulated with data coming from the literature review.

5.CONSULTATION CHALLENGES

Some challenges emerged during the consultation activities. These can be summarised as follows:

-Analysis of public consultation results: The outcomes of the analysis performed as part of the external study has been presented in this Impact Assessment Report, based on the data extracted from EU Survey (59 281 contributions, with 8 duplications identified and excluded from the analysis). However, it should be noted that the data reported in this Impact Assessment differs slightly from the data reported in the Have Your Say platform mainly due to a different approach to moderation and campaigns (59 286 contributions 16 , with 64 contributions moderated 17 and a lower number of campaigns considered). However, these differences are not leading to significant differences in the statistical analysis performed 18 .

-Evidence provided by stakeholders during interviews: for reasons of trade secrecy and a lack of pan-European data, stakeholders were not always in a position to share detailed information on their sector’s business activities and market share. As a result, the consultation activities produced limited evidence as regards the costs of compliance with some of the options examined in the Impact Assessment, or about the economic benefits of certain measures. In addition, where professional stakeholders indicated estimations of costs of some of the options, they often were not able to substantiate how the estimate was calculated and on what basis, making it difficult to check its solidity and reliability. However, this was to some extent compensated by the data gathered by the external contractor, experts, or by the Commission through desk research.

The challenges emerging from the public and targeted consultations were addressed by discussing the impact assessment findings with scientific experts and stakeholders, among others during the focus groups and workshop.

6.OUTCOMES OF THE CONSULTATION ACTIVITIES

National Competent Authorities (NCAs)

An important problem highlighted by NCAs is the unclear or unspecific text in the Transport Regulation itself. The Regulation is not specific about the sanctions either and this should be addressed. Furthermore, they see a lack of coherence in enforcement and implementation across the EU. One NCA referred to the need of further clarity and clear guidance on temperature requirements and on overhead space for animals. Another one mentioned that the main problem is the inconsistencies between the time limits in the Transport Regulation and the requirements of the social legislation related to road transport. Also, it was added that the Regulation should be more specific also for non-commercial transport and define better what is a commercial or a private purpose.

According to one NCA, the Transport Regulation is outdated and there is a lack of rules/requirements concerning the commercial transport of pets, some agricultural animals (e.g. rabbits, birds/poultry and fish), chinchillas or even exotic animals, which should be included and clarified in the revised Transport Regulation. Another NCAI mentioned the export by sea of unweaned calves as a major problem because of the length of the journey. Furthermore, what is lacking is a legal basis to ensure responsibility of the journey organizer.

Specific concerns were highlighted by Ireland and the Irish dairy sector, since any limitation has important economic consequences for the sector, which relies on transport of calves by ferry based on roll-on roll-off, which takes more than 19 hours. In addition to Ireland who may not be able to reach continental Europe within 19 hours, some other Member States like Spain and Italy, who are amongst the main beneficiary countries of calves transported on long journeys, would also be impacted as their farming sector could not satisfy the national market demand. Member States and business stakeholders from southern Member States are generally more concerned by restrictions on hot temperatures as they will be more impacted. They often flag the logistical challenges linked to transporting live animals by night.

Some NCAs mentioned that they would like to see a more nuanced approach as to the type of transport used as some MS have invested more in specific infrastructure, which should be taken into account. Moreover, according to some NCAs, journey times of less than 8 hours are unacceptable and any journey time under what is currently allowed, would have significant impacts.

In terms of exports to third countries, one NCA expressed their support for a total ban of live animal exports outside the EU, however it stated that it is not necessary to completely ban sea transport but to limit it to a maximum journey time. Another NCA mentioned that if the EU adopts the Irish ship standards, there would be huge improvements for animal welfare. Generally, they were not in favor of replacing transport of live animals by transport of carcasses only, as it is not possible to automatically replace the transport of live animals with transport of carcasses as the demand for meat is not equivalent to the demand of live animals. Furthermore, if EU exports are banned, North African countries will simply replace their imports with imports from other countries, likely with lower welfare standards. It would be more appropriate for the EU to help improve conditions in e.g. slaughterhouses in destination countries.

NCAs agreed that the Transport Regulation needs to provide specific rules for unweaned and vulnerable animals. One NCA even agreed that it is better not to transport them at all. However, one NCA addressed the importance of the transport of young calves, if transport is not possible, they would be slaughtered soon after birth. The NCAs generally welcomed provisions on the commercial transport of cats and dogs.

Regarding improving monitoring and enforcement, several suggestions were made by NCAs. For example, to create an EU-wide electronic journey log, an app that the driver can fill and check-in at different points (loading, arrival etc.) and those logs can be verified, or compulsory GPS on the truck. Compliance and enforcement costs would depend on the already existing rules in the MS. They did not comment on other impacts of the policy options.

Non-Governmental Organisations (NGOs)

NGOs highlighted the need for deep revision in order to reflect scientific findings and that a ban on sea transport is needed which is not provided by current legislation. Furthermore, there is a lack of controls at departure, during the travel and at arrival and no authorities check when and how animals arrive at the slaughterhouse. They also agreed that the Transport Regulation is outdated and pointed to the lack of rules concerning the transport of specific animals.

NGOs agreed that all aspects of the current legislation need to be updated. Particularly, one NGO stated in this regard that all of the aspects need to be species-specific as well as category specific.

NGOs generally supported a total ban of live animal exports outside the EU as European welfare standards could not be guaranteed in third countries. Instead, animal transport outside the EU should be moved towards export of carcasses. Importantly, moving to slaughtering in the EU (stunning) would actually give more business to EU slaughterhouses with a potentially positive economic impact. The impact of such a policy change would be improved animal welfare and state of the environment as well as a boost of EU business.

NGOs supported specific rules for unweaned and vulnerable animals and further stressed that it is better not to transport them at all. Furthermore, they were in favour of implementing specific rules for cats and dogs.

Considering improved monitoring and enforcement, one NGO mentioned the need for more sanctions as only few Member States are complying with existing rules, and consequently they have disadvantages in terms of competition. They also addressed the lack of exchange of data between Member States. It was suggested to introduce an EU independent authority for monitoring and checking Member States’ compliance with the law. One of the NGOs stated that these measures are only mitigating and stressed that live animals should not be transported at all.

In terms of costs, one NGO mentioned that the biggest impact in the value chain would initially be on farmers and subsequently on the transport company (technology). However, ultimately, it should be the responsibility of the Member States and the EU to enable policy changes to be made since in the end it is the consumer who receives higher-quality products. Prices of animals would also go higher if slaughtered in the EU bringing another potential economic benefit. This would all be feasible but there is apprehension of changes even if there would be little economic impact.

Furthermore, according to NGOs, enhanced legislation would lead to a reduction of the current overproduction of meat and animal products as prices would increase, which would be beneficial for the environment. Currently, the low cost of meat does not incentivize consumers to make the right choice, maintaining the overconsumption of meat in the EU. Less animal transport together with less animal product production would result in less pollution by meat industries. Another option raised by these NGOs is to move slaughterhouses or to construct them at a closer distance to the farms in order to avoid long transports. This would also have a positive impact on local economies. Additionally, one NGO highlighted the current sea pollution due to carcasses that are discarded in the sea during sea transport.

Business and professional organisations

Business organisations also highlighted the lack of coherence in enforcement and implementation across the EU. According to business organisations, the current requirements regarding animal welfare are sufficient, and the most problematic thing is reloading and unloading. Shorter journeys and more frequent resting times can be attractive but loading and unloading is very problematic for the welfare of animals. If travel times are reduced, more loading and unloading would be necessary. Furthermore, as regards space, the stakeholders pointed to the right balance as animals might fight, they will not have stability during transport and can get hurt under too much space. Stakeholders generally supported measures regarding the weight and minimum age of the animals, although some of them flagged the economic and logistical challenge (e.g. trucks with two decks instead of three have to be used).

Regarding exports to third countries, the organisations stated that if those are banned, third countries will most likely replace these EU imports with imports from other countries with lower animal welfare standards (e.g. longer journey times). However, suggested improvements of exports include improved border checks or conducting pre-assessments of the welfare, so that paperwork can be transferred to border controls in advance.

According to these stakeholders, the replacement of live animal transport with transport of carcasses may not be feasible because:

-The transport of animals to the Middle East/Africa is not always for slaughter.

-The transportation of carcasses over long journeys would require more energy due to the requirement for refrigeration.

-There might be specific conditions for religious slaughter in some destination countries that favours the import of live animals.

The replacement of live animals by the transport of carcasses also depends highly on the willingness of the importing country to accept such a replacement. If there is no acceptance, there will only be substitution of EU animals with imports from other parts of the world (likely subject to longer journeys and less strict animal welfare regulations than in the EU).

This category of stakeholders generally supports that the Transport Regulation needs to provide specific rules for cats and dogs as well as for unweaned and vulnerable animals. However, a complete ban would mean that farmers have to keep all animals, which is not realistic and farmers will not do that, they will reduce the overall number of herds. Furthermore, they pointed out the necessity of defining the term “unweaned” within the Regulation.

According to the organisation, the biggest costs were administrative processes which could be simplified through new technology such as apps or automatic transfer of notifications between countries, so that checks happen faster at the border. Furthermore, the biggest impacts in the value chain would be on the farmers who might lose the market; for the transporters, they are already starting to transport other goods instead of live animals. In some countries there is already a shortage of drivers.

Academic experts and institutions

Compared to other stakeholder groups, the academic experts and institutions commented relatively little. The issue of diseases spreading due to animal transport was brought up by academics. They stressed the importance of checking the animal prior departure: check whether animals are able to be transported or not, if they are affected by diseases or injuries. Poor transport conditions can worsen present diseases or lead to transmission to other animals. Veterinary inspection should be expanded to all animals and not only be limited to the vulnerable ones. If welfare is poor, there is a higher chance to develop illnesses. The academics also supported a total ban of live animal exports outside the EU as it would it is difficult to guarantee the welfare standards in non-EU countries.

They also favoured the provision of transport regulations on unweaned and vulnerable animals as well as on cats and dogs. Furthermore, with regards to fish, the academic interviewee stated that fish transport requires more control and monitoring (e.g. salmon fish are transported in “sea cages”). It is in the interest of producers to decrease the number of mortalities.

International and EU organisations

The EU organisation explained some of the reasons for the ongoing revision Council Regulation (EC) No 1/2005 on the protection of animals during transport (referred to as “Transport Regulation” in short) – while the Farm to Fork Strategy provides political platform, the objective is also to reflect the latest scientific evidence (i.e. EFSA opinions) in order to ensure that animal welfare is not compromised and to respond to EU citizens calls for a greener Europe, as transport is also an environmental issue. Public acceptance and attitudes (e.g. trends favouring local production and consumption, calls for more sustainable food production chains) are also shaping the revision process.

The issue of problems at borders and exports outside the EU was particularly highlighted as a concern by the EU organisation as feedback is rarely received, especially when it comes to third countries. The international organisation further stressed the issue of information flows and gave the Australian system as an example of more advanced monitoring. Another major problem pointed out by the EU organisation is long distance transport by any means – but particularly challenging is the transport by sea. According to the international organisation, the lack of coherence in enforcement and implementation across the EU is crucial. In order to improve animal welfare, implementation of current rules, collaboration and communication between authorities must be improved and feedback from the destination must be provided.

In terms of the ban on transport of live animals and the possible replacement by the transport of carcasses, the international organization highlighted the need for a cooling infrastructure (such as refrigerators) in the EU, which currently does not exist.

The stakeholder group supported specific rules for the transport of unweaned and vulnerable animals and cats and dogs. Moreover, the international organisation advised that young animals should be transported only if the conditions in the vehicles/vessels meet their specific needs and supports the options for the stricter rules. If there was a total ban on transport, however, the breeding system would be affected. According to the international organisation, there is also a need to regulate the transport of horses, fish and laboratory animals.

Regarding improved monitoring, it was mentioned that strengthened collaboration is necessary and needs improvement. This should be achieved through the same level playing field for all businesses and exchange of information. In terms of expected costs, the European organisation stressed that audits and subsequent infringement procedures require a lot of time and resources, e.g. the ability to conduct multiple checks, to ensure follow-up to determine non-compliance and measuring the progress made. For the moment, there is no expectation to change the number/frequency of audits for any of the options although it would be better to have more audits. The stakeholders did not elaborate on other policy impacts.

EU and non-EU citizens

The views of this stakeholder group were mainly assessed through a public consultation on animal welfare focusing on the issue in general and covering different aspects of animal welfare. It contained three questions specific to animal welfare during transport and a general open question. The vast majority of the respondents were EU citizens (54 600 contributions or 92.12%). Non-EU citizens contributed to a lesser extent (2 817 contributions or 4.75%).

The majority of respondents supported the introduction of stricter requirements on the transport of live animals and bans on the transport of vulnerable animals and live animals outside the EU. Between 94-96% of the sample of non-campaign respondents supported maximum journey times, more specific requirements for different animal species and technical requirements for the means of transport used for long journeys. Between 83-94% of the non-campaign respondents supported a ban on live animals to non-EU countries for both breeding and slaughter. 49-54% favoured a limitation of the exports to those non-EU countries where requirements on animal welfare are at least equivalent to standards within the EU or favoured transport under stricter conditions. 94% of the non-campaign respondents supported a ban of the transport of vulnerable animals and only 44-45% supported transport under stricter requirements or limited to 8 hours. Amongst the responses to the open question, the most frequent statements (made by at least 10% of the sample) were: “define limit for long distance transport’; “ban live animal exports outside the EU, “ban all live animal transport”, “stricter requirements for live animal transport conditions”, “reduce need to transport animals for slaughter”, “ban transport of vulnerable animals”, “more transparency / label covering transport conditions”. These views were predominantly shared by citizens as the overall number of other stakeholders who contributed was significantly lower

Campaigns

In the context of the external study, the analysis of the contributions to the IIA and to the PC led to the following conclusions:

IIA: four campaigns were identified as part of 110 contributions:

PC: 10 campaigns were identified as part of 1 546 contributions:

Annex 3: Who is affected and how?

1.Practical implications of the initiative

Road transporters will need to reorganise their journey planning and contracts to comply with the new requirements on journey times (including for exports), vulnerable animals and hot temperatures. They might need more trucks and drivers to comply with the requirements of increased space allowances. Transporters involved in exports outside the EU will need to contract an independent auditor from the International Federation of Auditors to carry out on-the-spot checks to verify that the EU transport rules are complied with until destination. Occasional additional costs may incur to transporters for the measure on limitations of transport during hot weather, as drivers will need to work during the night. In addition, while almost all trucks already have a GPS system installed, certain administrative steps will be needed to provide authorities real-time access to this data. To a considerable extent, however, the overall administrative burden is expected to decrease by a further use of digital communication tools.

Some sea transporters will have to upgrade or replace their vessels and register these under another flag, to meet updated requirements. Sea transporters will also need to train a member of the crew as an animal welfare officer, to take appropriate measures to safeguard the welfare of animals.

Slaughterhouses may be affected by the measure on transport during hot weather events, as staff may have to work at night, or they will have to invest in a larger space to keep the animals until resuming the slaughter activities in the morning.

Breeding and fattening farms may be affected by the measure on the limitation of journey times. A certain share of current route patterns will have to change due to the limitations, which may lead to the re-localisation of some farms.

Cat and dog professional breeders will have to ensure transporters adapt to the requirement for veterinary checks for cats and dogs.

2.Administrative and adjustment costs (One-in, One-out)

As regards the administrative costs and adjustment costs imposed on the respective groups of stakeholders, the situation could be summarised as follows:

For transport by road, total costs amount to EUR 2 884 million annually over 5 years. This includes, thanks to the introduction of new technologies such as GPS and a centralised database, a EUR 71 million reduction in administrative burden.

For export via sea of beef and sheep, the administrative burden would be EUR 195 000 for the one-off registration of vessels to a white or grey flag and EUR 21 208 annually for the training of a certified animal welfare officer for each vessel. Additionally, the adjustment cost of upgrading vessels to meet new requirements would cost EUR 380 million overall (one-off cost).

Regarding the welfare of cats and dogs, transporters of puppies and kittens would face a reoccurring administrative cost of EUR 94.5 million and a single adjustment cost of EUR 7.5 million.

Summary of costs and benefits

(*) Net administrative burdens = INs – OUTs;

(**) Adjustment costs falling under the scope of the OIOO approach are the same as reported in Table 2 above. Non-annualised values;

(***) Total administrative burdens = Net administrative burdens for businesses + net administrative burdens for citizens.

3.Relevant sustainable development goals

Annex 4: Analytical methods

1.Baseline 

The baseline against which the impacts are assessed is set at 2031 (including adoption rates of the measures based on national legislation in place and costs). The aggregated costs are provided against the 2031 baseline.

2.Methodology and models

As a first step, the animal welfare, economic, social and environmental impacts of the respective policy options as well as their distribution across stakeholders were analysed and scored through a Multi-Criteria Decision Analysis (MCDA), using triangulated evidence (evidence from stakeholder consultation, from desk research and quantitative analysis where available), based on the external study and additional evidence collected.

Secondly, an assessment of the cumulative impacts of the two proposed packages of measures and options was made based on a supply chain analysis.

Thirdly, the impact assessment analysis compared the different options as regards their effectiveness, efficiency and coherence, as well as their compliance with the proportionality principle.

Fourthly, the outcome of the supply chain analysis on impact on production costs was used to model impacts on production levels, consumer prices, exports and imports (performed by the Commission’s Joint Research Centre), and additional analyses were performed (by the Commission’s Joint Research Centre) to assess the impacts of the two packages on food security and food affordability.

2.1.Identification of potential impacts and indicators used

The main impacts identified by the Commission, to be considered in this impact assessment, were the following:

·Animal welfare impacts

·Economic impacts

·Social impacts (including the extent to which societal expectations are met)

·Environmental impacts

As improving the level of animal welfare is one of the general objectives of this revision, it should be noted that the impact on animal welfare is considered as a separate impact and is not analysed under the environmental impact (as can be the case in other impact assessments).

In addition, the assessment of economic impacts gives specific attention to the impacts on competitiveness, on SMEs and on administrative burdens on businesses which are reflected in the list of selected indicators.

The assessment of territorial impacts has also been performed in the supporting studies where relevant, for instance as regards the specific situation of islands and remote, mountainous areas.

For each category of impact, indicators were developed by the external contractor and submitted to the Commission for approval. Further details on the indicators used and how these were measured are available in the supporting study 19 .

2.2.Multi-Criteria Decision Analysis (MCDA)

Given the plurality of policy objectives, a large range of assessment criteria was needed. For this, a MCDA was considered to offer a comprehensive and transparent model, allowing for non-quantifiable impacts to be measured qualitatively (and quantified impacts to be measured in different units). This MCDA has been performed as part of the supporting study. The method was applied as follows:

Each impact of each option was scored using the following scale and point of reference:

oScale used: 

§In the external study: Policy options were assessed in a consistent way using a scale from 1 to 5 (5-point Likert scale). In this case, the highest score is given to the most desirable option towards 5 (i.e. less costly or administratively burdensome, or best for animal welfare), 3 corresponds to a neutral score and the lowest score corresponds to the least desirable option (towards 1).

§In the Impact Assessment report: The 5-point Likert scale was converted into a -2 to +2 scale (i.e. with 0 being neutral). In this case, the highest score is given to the most desirable option towards 2, 0 corresponds to a neutral score and the least desirable option is scored towards -2.

§The conversion does not change outcomes of the MCDA.

oPoint of reference:

§Impact on animal welfare: Given that improving the level of animal welfare in the EU is a general objective of the revision, the latest EFSA recommendations serve as reference for this assessment. The options that are the closest to the recommendations / to the desired level of animal welfare are scored highest on the animal welfare impacts. The ones diverging the most from the recommendations / the desired level of animal welfare are given the lowest score. Thus, the current situation does not serve as a reference for the impact on animal welfare

§Environmental, economic, social impacts: The current situation serves as a reference. These impacts were scored neutral when no changes were expected. However, when changes were assumed, positively or negatively, the score was reflecting this change.

Each impact of each option was scored using the following approach:

oFor the impact on animal welfare: Although the impact on animal welfare was not quantified, the changes in terms of welfare were measured and therefore scored using the EFSA recommendations as reference for the desired level of animal welfare, which are based on the latest available scientific evidence. Where relevant the impacts were broken down by type of animal concerned (e.g. slaughter and non-slaughter animals).

oFor the economic, environmental and social impacts: All costs and benefits covered by the indicators listed were taken into account in the analysis. In the impact assessment, the outcomes of the cost benefit analysis, when available, were taken into account when assigning scores to the economic, environmental and social impacts, respectively. It should also be noted that in the external study, although the impacts were broken down by type of stakeholder groups concerned when relevant, the average score per category of impacts was estimated giving indicators an equal importance. The impact assessment report deviates from this approach as the relative importance of the different indicators is reflected in the aggregated score of each impact.

oScoring the dynamic baseline:

§In the external study and in the preparation of this impact assessment, the No Policy Change (i.e. the dynamic baseline) has been scored as any other option, in order to show with robust data and in a consistent manner the assumed changes in the baseline as well as the cost of inaction. This also allows to give a clear picture of the evolution of the situation over the long period assessed and considering the number of different species impacted by the revision. This method has been implemented in both the supporting study and the Impact Assessment Report (‘step 1'). 

§However, as a second step, these scores of all options were converted to a baseline that is scored as 0 (‘step 2’) so that the baseline serves as the benchmark against which the policy options are compared (i.e. showing the net differences). The impact assessment report only includes tables presenting the results of the second step.

The multi-criteria impact matrix synthetises the performance of each option according to each impact, based on the following approach:

oA total score was given to each respective policy option, aggregating the scores of the categories of impact considered (animal welfare, economic, social and environmental). The score 0 applies absence of impacts or the current situation. 

oThe total score is based on the weights allocated to each category of impact (i.e. higher weights indicate the most important factors). The weights have been developed from a need for a balanced approach that strikes a compromise between animal welfare and economic impacts, taking into account the already existing economic pressure on transporters, but also the dual objective of ensuring higher welfare and contributing to sustainable food operations.

§Taking into consideration the recent geopolitical developments and the current economic situation, in this impact assessment, the same weights are applied to all impact categories: Animal welfare (25%), Environment (25%), Economy (25%) and Social (25%).

§In the supporting study, several approaches were considered, including one where focus was mainly put on the animal welfare impacts 20 .

A sensitivity and robustness analysis was performed to check if the ranking of policy options is stable, including making changes to the weight of the dimensions/criteria, to improve the transparency on the assumptions made in the impact assessment. The outcomes of the analysis are presented under point 5 of this Annex.

2.3.Supply chain analysis 21

Based on the results of the separate study supporting the impacts assessment, the policy options were arranged in two packages (1 and 2) for which cumulative impacts have been assessed in an external study, by using the following methodology.

The purpose of the supply chain analysis was to estimate the cumulative economic impacts along the value chain (pigmeat, broiler meat, beef, eggs, milk). The following process was followed to quantify the joint costs of legislative packages to the actors of the value chain. These actors included farmers, breeders, processors, input suppliers, retailers and consumers, and the public sector. These joint or cumulative impacts of all measures are dependent on several factors. These include particularly 1) impacts of measures to operators who need to adjust their operations because of new regulations, 2) impacts on operators who do not need to adjust their operations, and 3) proportion and type of operators who are affected in different ways.

Step 1: Identification of options

The cumulative impacts were assessed through several steps. First, changes considered in the regulations were reviewed. This included that information provided in separate study were reviewed and summarised to identify qualitatively what kind of effects the measures were expected to have. The most important stakeholder groups to be considered, i.e. farmers, breeders, processors, transporters, retailers, consumers, public authorities (e.g. administrative costs), and animals, and possible subgroups that need to be considered for the purposes of robust calculations were identified and inputs to them were described based on the four IA reports.

Step 2: Quantification of economic impacts of measures

Second step focused on quantifying the most significant impacts that regulatory changes can have on productivity and production costs of each individual change as reported by the separate studies, EFSA data and other data and previous studies. In practice, quantitative information was not available on the impact to all stakeholder groups mentioned above, and the impacts focused mainly on impacts to farmers, slaughterhouses, breeding sector and transporters. Because the separate reports did not provide detailed or consistent information for all relevant measures, additional data were searched from scientific publications, reports and other sources that were considered useful and robust to provide additional data. During this step, the impact of each measure was quantified in euros for each type of animal and operator that it was applicable. Additional variable costs, possible savings in variable costs, changes in market revenues, possible investments needed to comply with the measures and possible reductions in the number of animals that can be kept, transported or processed were quantified at farm, firm or animal level (euro per animal or euro per kilogram of output). Measures which were found to require investments or renovations in the current housing were annualised by using 5% interest rate and 15-30 years lifetime of an investment (30 years for buildings, 20 years for renovations, 15 for machinery):

,

where C is the cost of initial investment, r is the interest rate, and t is the duration of the investment. The annual cost was then divided by the production quantity that a given invest was estimated to produce annually. The external study 22 provides information on the literature and cost parameters used in the supply chain analysis.

Step 3: Normalising impacts

Third step was to quantify economic impacts to actors in a consistent manner so that the impacts of separate measures could be counted together. For this purpose, it was decided to summarise aggregate impacts per stakeholder group by using standard cost calculations that reflect the current relative change of production costs. The costs and revenues before and after adopting each regulatory change that were calculated at step two were transformed to a figure that describe the net impact per kilogram of output (e.g. €/kg meat produced). The net impacts were normalised to the production cost of one kilogram of meat, milk or eggs (depending on the stakeholder, costs to farmer, transporter or slaughterhouse) and then converted into a percentage change in production costs per unit of output and calculated on the condition that an actor must implement a change. Because the models operate with net economic impacts, in practice this meant that a cost elasticity estimate () was calculated for the case where specific measure is affecting economic operators in the sector. In general form, this cost elasticity estimate represented the relative change of production costs as follow:

,

where is the current cost of production, transport or slaughtering associated with one kilogram of meat, milk or eggs and is additional net cost that is cause be the implementation of the new policy measure. were obtained from the results of step two above. While prices were normalised according to the ‘current’ level of production costs, anticipated future prices were used to determine the baseline level of production costs for the cost calculations of 2031. The information on the net cost impacts was delivered to JRC’s Agricultural Commodity Market Model as an input. The elasticity estimate was applied to the 2031 baseline of costs in step 6.

Step 4: Joint impacts when adopting measures

Fourth step was to aggregate impacts across the supply chain by applying the results from the previous step’s micro-level calculations. Dynamic impacts and interactions were taken into account where possible. This implied in broiler for example, that the aggregate impact of slower growth rate and increased space allowance (i.e. more space needed for a longer time period per bird) was considered instead of considering these separately. Because the Agricultural Commodity Market Model (see section 3.3.2) modelling work was designed to assess food affordability, market prices and supply and demand were considered static in this step. In this step it was assumed that, for example, increased space allowance could be compensated only by increasing the housing capacity so that the current amount of meat or eggs can be produced. Possible changes in the total supply, demand and market clearing prices were considered later in step 6 by incorporating results from the modelling work conducted by Agricultural Commodity Market Model team through a feedback-loop to the cost calculations. For example, if Agricultural Commodity Market Model’s results suggested that a policy package would reduce aggregate supply and increase the market price, then the aggregate supply in the cost calculation was reduced according to the modelling result and aggregate costs was re-calculated and the total additional market revenues were also calculated for the new quantity that would be supplied.

Step 5: Determining the proportion of supply that still must adopt changes in the baseline year

Fifth step focused on identifying which proportion of animal population, farm population or livestock sector professionals would be required to implement the change. The proportions of population that would need to adopt measures were based on estimated share of populations that would not have adopted the measures by the end of the transition period. Hence, the baseline represents the proportion of population that has not adopted the measures by year 2031. Where possible, adoption rated were defined for each member state individually. Information about the total population of both farms and animals in the EU were obtained from Eurostat statistics and the supporting study for transport. Information about the current and anticipated adoption rates of each measure were searched from the supporting study, European statistics, scientific publications and from additional data provided by the European Commission. Complementary information was searched from reports and scientific publications and obtained from the European Commission. Cumulative economic impacts to different stakeholders were interpreted as percentage increases in production costs and revenues in each production line and as absolute impacts (euros) to different actors. Further details on the proportion of production that needs to adopt each measure in the baseline year is provided in the Annex.

Step 6: Cumulative total impacts at the EU-level and for example farms and volumes of supply

Finally, the aggregated, cumulative impacts were represented at the EU-level as well as for a representative small, medium-sized and large farms by using the equations that can be presented in general form as follows:

ImpactEU in total = (( ´ ) ´ ) +) ´ ´),

where is the baseline production cost per kg output in 2032 estimated by using cost data obtained from CAPRI model of the above-mentioned cost figures for slaughter and transportation, is the percentage of actors to adopt a change in the target population (defined for the EU or MS level and for a given group of actors), is estimated change in the producer price obtained from the Agricultural Commodity Market Model and converted to €per kilogram, is the baseline annual production quantity of commodity in the EU in 2032, and is estimated policy-induced change In the quantity traded obtained from the Agricultural Commodity Market Model.

Limitations

Although the models operate at net impacts level, both benefits and costs of each measure and regulatory package were identified. The quantification of costs and benefits is constrained by the information that was available from the supporting study, scientific literature, statistics and other sources. In some cases, the source publication did not provide detailed information about the costs and benefits, and this limits the possibility to report such impacts in detail. The impacts were considered at the member state level. Member state level data were utilised to the extent that is was available. Because no member state level (or regional) data on the impacts was available for many measures, EU-level data or data reported and extrapolated for other countries was used. This concerned especially impacts faced by farms and other operators when they adopt a new measure, but to some extent also data concerning the proportion of population that needs to adopt the measure (e.g. the proportion of production that is already applying a measure.

2.4.Assessment of cumulative impacts on production levels and consumer prices with the Agricultural Commodity Market Model (by JRC)

Animal and egg production in the Agricultural Commodity Market Model

The EU module of the Agricultural Commodity Market Model calculates endogenously the production of beef and veal (), dairy, poultry (), eggs (), pigmeat (). The following paragraphs detail how the Agricultural Commodity Market Model represents animal and eggs production. The description starts with beef and veal as one of the most complex modelling approaches. Quantity produced of beef and veal is a function of the following elements:

I.weighted average of the returns (present year and past two years) in the form of a gross margin: producer price () plus subsidy () divided by the cost of production commodity index ();

II.weighted average of feed costs during the last three years in the form of a feed cost index () divided by a cost of production commodity index;

III.the previous year’s production quantity ();

IV.a time trend ();

V.the beef cow inventory from previous two years () and the dairy cow inventory from the previous year ()

The structure of the equations in the model for the production of beef and veal livestock () is:

In the case of poultry () production, the equation for determining production is simplified, given that the influence on present production choices from past years is limited. The growth cycle of typical commercial poultry is just few months. Poultry quantity produced is modelled as follows:

In the case of pigmeat, the quantity of pigmeat produced is the sum of net trade in live animals () and the quantity produced from slaughtered animals ():    

The quantity produced from slaughtered animals represents the net production and is endogenously calculated. Production depends on the number of animals slaughtered () and the carcass weight ():

Slaughtered animal head numbers () depend on a producer gross margin (revenues and feed cost index). Decisions on how many animals are slaughtered in a year depend on the economic revenue returns of the previous year. The number of animals slaughtered in the current year also depends on the number of slaughtered animals in the previous year to model persistence in production. The equation is as follows:

Pork carcass weights are modelled following a similar formula as the one used for calculating supply of other meats but carcass weight () depends on revenue gross margin and the feed cost margin of the current year:

If producer prices increase more than costs, then producers will become less reluctant to sell their animals and carcass weight would decrease.

The egg production modelling has been improved from the usual Agricultural Commodity Market Model. Egg products are also modelled with a similar formula to the one used for poultry, for each of the regional blocks (EU-14 and EU-13):

For the Member States that entered the EU before 2004, the egg market price clears the whole European market while the producer price in the Member States that entered afterwards is modelled as a fixed proportion of the other one, based on historical price differences.

Costs of production commodity index

The Agricultural Commodity Market Model represents costs through a univariate cost of production commodity index (or ), in accordance with a univariate input-output profit model. That means that costs are represented by an index of the costs per unit of a composite input. The cost index is constructed as a weighted average of three cost sub-indices representing important input cost categories: energy (e.g. electricity and fuels), tradable (e.g. crop protection products, other specific crop costs, veterinary costs and other specific livestock costs, machinery, and buildings) and other non-tradable inputs (e.g. contract work, other farming overheads, depreciation, wages and own work).

The main equation for the cost of production commodity index for livestock products is defined as follows:

where

· is commodity production cost index for livestock commodity (beef and veal, pigmeat, poultry, sheep) , in region , in year ;

· is the weight of energy inputs in total base year commodity production costs;

· is the weight of tradable inputs in total base year commodity production costs;

· is the weight of non-tradable inputs in total base year commodity production costs;

· is the Gross Domestic Product Deflator in region in year ;

· is the nominal exchange rate in region in year with respect to the US Dollar;

· is the World Crude Oil price in year .

According to the OECD/FAO model framework, each of the 3 cost sub-indices are calculated as deflated indices of livestock commodities representing the cost sub-indices indicated: a deflated (to 2008) world crude oil price for the cost of energy in local currency, a deflated (to the US index in 2008) world consumer price index as proxied by the US GDP Deflator for the tradable inputs, and a deflated (to 2008) consumer price index in each country proxying for local price movements of non-tradable inputs.

The weights of the various cost categories (e.g. ) are region specific. They were estimated based on historical cost structures in regions. They are weights to aggregate, from different cost sub-indices, a univariate input cost index. This cost index moves up and down depending on the price movement of each input and on the region-specific weights. The cost index represents a unitary cost of all the inputs used to produce that commodity.

The feed costs are endogenous to the model, and therefore they are not considered in these weights. The total cost of labour is included. Thus, own labour is accounted for at its opportunity cost. Land and capital costs are not included except for depreciation.

Animal welfare regulation presumably affects production costs, so the model for the ‘commodity production cost index’ (CPCI) is augmented by to follow equation (9) :

where is a ‘production cost’ adjustment factor and the Δ is an operator deflating prices and translating into national currencies. The variable is used to model higher or lower production costs or cost-increasing/decreasing productivity changes.

Consumer prices

In each of the regions considered in this exercise (EU-14 and EU-13), consumer prices () differ from producer prices () as they include taxes () and retail margins ():

where stands for an additional tax. The retail margins are modelled as

Consumer prices at the aggregate EU level are a weighted average of the regional ones

(weighted by population, , in each of the regional blocks):

Scenario shocks

The measures proposed represent a change in costs. We assume that the producer price shocks impact the cost of production commodity index, while the consumer price shocks affect the consumer price retail margins . The presented analysis only considers pigmeat, eggs, poultry production and dairy cows and beef & veal cattle, including direct/indirect and feed market interactions. The shocks for consumer prices are applied to a proportion of consumer price margins affected by the cost categories. For the purpose of calculating the proportions, consumer price margins are from the 2023 baseline in the Agricultural Commodity Market Model.

To illustrate the impact of a production cost increase, we consider the EU market effects in 2031 of cost shocks for each animal product, all starting in 2025. Table 1 shows the percentage shocks as percentage increases in consumer price margin (Kill and Transport category).

Table 1: Percentage changes to cost of production commodity index (Kept) and consumer price (Kill and Transport) margins

How to incorporate the scenario shocks into the model

In order to implement producer shocks, we change the term in equation (9 ) ) for the increases/decreases in producer costs. Kept animal rules affect producer costs and are thus entered as shocks in the variable from 2025 onward.

Regarding consumer shocks, we increase the retail margin in equation (10) with the cost increases provoked by the new transportation rules. These changes are introduced exogenously on the residual term in equation (11).

We model two different policy packages with regard to the duration of transport of animals and journey times. The first scenario corresponding to Policy Option I entails reduced journey times. The second scenario reflects a policy option that allows for longer journeys, while still limiting journey times. We take into account the fact that different journey times affect not only consumers through the prices they are willing to pay, but also but also the farmers.

Model limitations

The Agricultural Commodity Market Model can only depict European and global agricultural markets in a simplified manner. A model is a simplified approximation of reality and cannot fully capture the behaviour of all agents involved. Consequently, several limitations of this analysis should be mentioned. Most importantly, lack of data is the main limitation to acknowledge. Information on regional transport practices and the costs attached to them is difficult to obtain. It is also difficult to assess the potential for implementation of each measure in each region.

A differentiation of market impacts by Member State would have been desirable, instead of only having EU14 and EU13 regional aggregates. This limitation is due to the global templated structure of the model and cannot be easily overcome in the short term. However, this limitation is not so important in a situation of a well-functioning EU common market.

The basic assumption in the model is that of perfectly competitive markets and homogenous goods. In reality, there are many market imperfections, and goods are often differentiated with respect to their quality and/or other attributes. The latter aspect could be important with regards to the animal welfare at transport regulation. Some consumers might be willing to pay extra for animal products produced in the EU, if the new transport regulation is passed. However, the model does not differentiate between goods from different countries. Therefore, the simulation results might overstate the negative impacts on domestic EU production and EU trade, but the extent of this overstatement is difficult to evaluate.

With respect to costs, the model lacks an explicit representation and separation of the different transportation cost elements involved.

Last but not least, in the presented ex-ante analysis it is not possible to capture all underlying interlinkages with other parallel policy proposals (e.g. Farm to Fork or Biodiversity strategy). The magnitude of the scenario shocks (i.e. distance from baseline values) needs also to be considered since the model is calibrated to a common vision of the future and the precision of measured marginal changes may be decreased when extreme changes are predicted. 

Nevertheless, even though limitations to this modelling framework exist, no better alternatives for the analysis of these future policy scenarios exist in the timeframe allowed. Although the current modelling framework has not been developed to analyse the animal transport sector and present limitations, because it is an aggregated agricultural commodity market model and market impacts are close to negligible, the economic analysis performed can be identified as robust and transparent.

2.5.Costs and benefits

The source and base for the cost calculations can be found in the external study supporting this impact assessment 23 .The benefits for society of improving animal welfare are expected to be greater than the costs but it is difficult to monetise them. While for some, the relationship is clearly established (poor animal welfare associated with increased risks of zoonosis and antimicrobial resistance) and has clear economic implications (diseases are a tremendous economic burden to society), there are major limitations when attempting to provide a price tag, due to the many different and unknown variables affecting this relationship. Other benefits simply cannot be expressed in monetary terms (animal welfare from the animal’s point of view). 

2.6.Assessment of food affordability

The impact of the policy packages for improved animal welfare legislation during the transport phase on final consumer prices for animal-based products, considering an endogenous trade response, has been estimated as summarised in Table 2. We distinguish between direct impacts on retails prices due to the changes in animal welfare requirements (pigs, poultry and eggs, cattle) and indirect impacts due to the new equilibrium in the agricultural sector following the implementation of those requirements (sheep and goat).

Table 2. Impacts on consumer prices of enhanced animal welfare legislation for transport by product in percentage

Note: 1) impacts derived from the application of new AW requirements; 2) impacts from the endogenous response in the model to (1).

Source: Agricultural Commodity Market Model simulations described above

In order to get an idea of how much would the price increases identified would affect food affordability of European citizens of different income groups, data is needed about four main concepts:

a.Share of food in total expenditure

b.GDP growth to 2030

c.Share of products affected by animal welfare legislation (PAWL) in total food expenditure

d.Expected changes in diets

Considering these three aspects, we can project to 2030 the relative share of different meat products in food and total expenditure. We describe below each of the steps taken to do so.

Share of food expenditure in total expenditure

The first data source we use is that of share of food expenditure in total expenditure reported by Eurostat in its Harmonised Index of Consumer Prices data set 24 . Data is available for different aggregates following the Classification of individual consumption by purpose (COICOP) and split for different income quintiles. Data is reported every 5-years and the last available data is for 2020. On average the share of total expenditure on food ranges from 21.1% for the lowest income quartile to 15.6% to the highest one ( Figure 1 ). Member State specific data is reported in annex 1.

Figure 1. Share of food expenditure in total expenditure by income quintile in the EU (2020).

Source: Eurostat and own elaboration

These averages hide quite some heterogeneity across countries even within income groups, with the share of food on total expenditure reaching 36% of total expenditure for the lowest income group in Romania and just 11% in Germany. However, what can be seen from the inspection of the data is that the share of food in total expenditure falls with increasing income across income quartiles, confirming Engel’s law. This is also the case when we inspect that across countries, in particular for the lower income quartile, even when taking into account differences in purchase power parity ( Figure 2 ). 

Figure 2. Relationship between GDP and food expenditure share for EU countries in 2020 on average (a) and for the lowest income quintile (b).

Source: Eurostat, World bank and own elaboration

The impact of economic growth on the share of food expenditure in total expenditure

Based on the negative relationship observed between GDP and share of food in total expenditure, we need to update the shares of food expenditure on total expenditure incorporating the growth in GDP that is expected from 2020 to 2030. These growth rates are taken from the macro assumptions of the mid-term outlook for the European agricultural sector 25 with real GDP per capita growing on average by 24%, with a minimum of 14% for Luxembourg and a maximum of 55% for Croatia.

We need to take into account the decreasing share that food will have on total expenditure by 2030 assuming current growth rates. For this, we fit a fixed year and country effects panel data model with the shares of food expenditure in total expenditure per income quartile as dependent variable and GDP per capita as independent variable taking logs in both sides of the equation. Results of these regressions are shown in Table 3 with each additional 100 euros in GDP per capita reducing the share of food in total expenditures from 0.39 percentage points in the lowest income quintile to 0.68 percentage points in the highest one.

Table 3. Panel regressions for log food expenditure shares on GDP per income quartile

Source: own elaboration

We use the parameters obtained from the panel regressions to project the share of food expenditure in total expenditure taking into account the increased GDP. In order to avoid implausible results, if the share obtained in this way is above the 2020 share in the dataset we use the 2020 share. For the three cases studies selected below, this is the case for Germany in the lowest income quintile and for Portugal in both highest and lowest quintile.

We do the analysis for 2030 even when the cost shocks are for 2031 as there are no reliable GDP growth projections to 2031. Assuming that GDP would continue growing from 2030 to 2038 this means that our estimates are higher bounds as the higher the GDP the lower the share of food on total expenditure.

Share of food affected by animal welfare legislation in total food expenditure

Information regarding the share in value of products affected by animal welfare legislation (PAWL) 26 in total food consumption is only available at the aggregated level (e.g. not by income quintile). This data comes from the GTAP database 27 and on average for the EU 34.2% of total food expenditure is related to this group of products ( Table 4). Country specific figures are provided in Annex 2.

Table 4. Shares of expenditure in products affected by animal welfare legislation on total and food consumption in the EU

Source: GTAP database

Changes in diets

Another aspect to take into account to see the affordability of these price increases relates to the changes in diets. According to the latest mid-term outlook for the European agricultural sector consumption of food affected by animal welfare legislation is expected to fall by 2030 compared to 2020 for beef, pork, fresh dairy products and butter, while it will increase for sheep, poultry, eggs and cheese Table 5 . 

Table 5. Per capita consumption of products affected by animal welfare legislation (kg)

Source: DG AGRI Mid-Term Outlook 2022

Dealing with aggregation for impacts on eggs

We have no data on expenditure for eggs as a standalone product in the sources focusing on expenditure, as the expenditure on eggs is reported aggregated with dairy.

Therefore, to include the impact on eggs we need to weight changes in eggs consumption and expenditure in relationship with the other product groups included in the dairy aggregate. As our focus in changes in expenditure, we use this concept to construct weights. For this, we use the data from the Agricultural Commodity Market Model baseline, which does split consumption in all of the components of the dairy product group.

Note: Total for group calculated as sum for first two columns and as weighted average by share of expenditure for the last five columns.

Source: Agricultural Commodity Market Model database, Agricultural Commodity Market Model modelling results, DG AGRI Mid-Term Outlook 2022 and own calculation.

Conclusions

In summary, the assumptions for our affordability calculations of the packages of options for revised animal welfare legislation considering endogenous trade response and keeping imports at baseline level are as follows:

a.Share of food expenditure in total expenditure falls with GDP growth as observed during the period 2005-2020 during the period 2020-2030.

b.GDP in EU countries grows as in the macro assumptions of the MTO 2022.

c.Quantity of products affected by animal welfare legislation changes homogenously across income quartiles as projected in MTO 2022.

d.Share of different components of food expenditure is the same across income quartiles and remains stable until 2030 except for changes in consumption.

e.PAWL prices increase as per the Agricultural Commodity Market Model simulations

The impact on affordability is calculated as follows:

a.We calculate the total expenditure on FAWL products that is expected in 2030 using the modified quantities and the baseline prices.

b.We calculate the total expenditure on FWAL products that is expected in 2030 using the modified quantities and modified prices.

c.The difference between (a) and (b) is the impact on affordability of the change in animal welfare legislation keeping the same level of FAWL consumption.

The impact is reported as additional expenditure in euros per year and as share of total income. To show case the diversity of impacts we select three countries to taking into account differences in meat expenditure and GDP ( Figure 3 ). As it can be seen in Figure 3 the relationship between expenditure and GDP shown for overall food expenditure also holds for expenditure on foods affected by animal welfare legislation. The wealthier the country the less importance expenditure on PAWL on total expenditure. We choose one country with a low GDP and high share of FAWL on total food expenditure (PL), one with low GDP and low share of FAWL on total food expenditure (PT) and one with high GDP and low share of FAWL on total food expenditure (DE).

Figure 3. Intensity of expenditure in foods affected by animal welfare legislation and GDP for EU MS (2020)

Note: figures normalised.

Source: GTAP and Agricultural Commodity Market Model.

Taking all this together the expected impacts in terms of additional food expenditure is reported in Table 6. We can see that the increase in price of animal products due to enhanced animal welfare requirements in package I will represent at most EUR 14.38 per person and year (highest income group in Portugal) a minimum of EUR 2.87 per person and year (lowest income group in Germany). When package II is chosen, the expected costs is reduced on average by 2.15%; with the highest cost being EUR 14.09 per person a year (also for the highest income group in Portugal) and the lowest EUR 2.81 (again for the lowest income group in Germany).

In terms of impact on total expenditure, the figures are very small, with a maximum of 0.096% of total expenditure for the lowest income group in Poland a minimum of 0.035% of total expenditure for the richest income group in Germany in package I. In package II, these shares are reduced to 0.094% and 0.034% respectively.

Table 6. Change in in expenditure (euros per person and year) in FAWL in 2030 due to package I and package II measures for new AW transport legislation with endogenous trade response

Source: own calculations

Table 7. Share of food and non-alcoholic beverages in total expenditure by income quintile and Member State (euros per thousand euros)

Source: Structure of consumption expenditure by income quintile and COICOP consumption purpose [HBS_STR_T223__custom_4982177]

Table 8. Shares of expenditure in products affected by animal welfare legislation on total (food) consumption for each Member State

Source: GTAP

2.7.Comparison of the options and of the packages of options

Section 7. of the main report and Annex 9 include a systematic comparison of the options, as well as of the two packages of options considered, according to criteria of effectiveness, efficiency, coherence and proportionality.

This comparison is presented in the format of a narrative underpinning comparison tables using qualitative scores (using the --- to +++ scale 28 ) and is based on the analysis performed in section 6., including the MCDA and cost-benefit analysis.

In particular, the comparison of options and packages in terms of effectiveness is based on the assessment of the animal welfare impact in the MCDA in section 6, when linked to animal welfare objectives only 29 . The comparison of the specific objective 5 on enforcement is based on the overall assessment of the options in section 6. 

With regards to efficiency, this criterion has been assessed based on a cost-benefit analysis. For the options, a cost-benefit analysis has been integrated in the comparison tables, qualitatively assessing the total costs and the total benefits (i.e. qualitative scores), based on the analysis of section 6 (including the MCDA, which is based on quantitative data whenever possible)

The comparison of the packages is also based on the analysis performed in section 6 (including the MCDA) as well as a cost-benefit analysis of the packages presented in section 6.2.1..

3.Sources and challenges

Multiple data sources and related analytical methods were applied to provide evidence for the impact assessment of the policy elements and options:

·Literature and document review

·Comparative legal analysis

·Secondary data analysis

·Case studies

·Stakeholder consultations

Evidence - including stakeholders’ views – has mostly been gathered within the framework of the external study. The Commission has performed additional desk research and undertaken additional stakeholder consultation activities 30 , including through a thematic subgroup that was established for this purpose under the EU Animal Welfare Platform 31 , and which have held in total, 10 meetings (with minutes publicly available) since March 2022 as part of the consultation strategy.

All methods applied encountered a varying degree of difficulty in relation to lack of quantitative data. Despite a growing body of relevant literature and evidence, not enough data was found to quantify all relevant impacts of every policy measure discussed in the policy options for the future of the legislation. Whenever possible, reasonable assumptions were made to assess the impacts, but this lack of quantitative data is a key limitation to the analysis.

Limitations of the approach

-    Scale used for the scoring in the MCDA

To note is that the scale used for the scoring of impacts and options does not possess cardinal properties as the distance between the score values is not uniform. For example, the distance between score 2 (“desirable”) and score -2 (“not desirable”) cannot be interpreted as score 2 being “twice as good” as score -2. Hence, the impact scores only allow for an ordinal ranking of the policy options.

-    Data limitations

The supporting study animal welfare during transport, reported challenges related to data availability or reliability.

Data for specific indicators to build the baseline (and thus assess the impacts of the proposed policy options against the baseline) are limited, particularly quantitative data on certain aspects. The gaps were completed with qualitative data from stakeholders (the data collection activities were designed to provide multiple sources for triangulation of findings), detailed analysis in the case studies, and expert judgement. Specific data availability limitations were:

While TRACES was used to map the current trends in animal transport as a basis for the analysis of the options, it has some gaps, including:

-    data on transports within Member States are not included;

-    limited detail to distinguish specific groups of animals, such as unweaned calves or piglets;

-    not all relevant data are routinely recorded in TRACES (e.g. the actual arrival time of a transport was missing in a large number of cases) – as a mitigation measure other data (e.g. the estimated arrival time, average journey times) was used to perform the analysis;

-    the data received did not include data on export to third countries;

-    data from countries that export without transiting through other Member States are not included - therefore the analysis of the impact of the options on export was based on Comext data.

In addition, availability of data on costs to transporters, industry and national authorities (e.g. adjustment costs, administrative and enforcement costs) is variable and, when available, can be qualitative only or lack detail. Information on these costs was collected through the stakeholder consultations (e.g. questions about the perceived significance of such costs in the survey; in-depth questions in the case study interviews). Information about other economic impacts (e.g. on the impact of a ban on long journeys, on exports of live animals outside the EU) was extrapolated from statistical data on trade (e.g. Comext) showing the impacts in terms of number of journeys impacted, as it was not possible to quantify the indirect economic impact on operators other than transporters.

Furthermore, information on environmental impacts linked to the transport of live animals (environmental impacts per transport of different types of animals, transport means, etc.) is not available. Thus, the survey and interview questions were used to collect stakeholder feedback on these environmental impacts. General data on transport’s environmental impacts (e.g. GHG emissions, air pollutants, soil pressure) from existing statistical sources (e.g. European Environment Agency, Eurostat) and the number of transport kilometres were used as proxies for environmental impacts.

The study also reported that the assessment of impacts on animal welfare was also limited. Despite large numbers of indicators to measure potential changes in welfare, no harmonised animal welfare indicators are in place at European level. In addition, that measurement is complex, the indicators can only measure a certain degree of change implied by the policy options and leads to difficulties to measure the gain in terms of welfare of one option against another. Regarding transport, quantitative data (e.g. on mortality or injuries) are generally perceived to be insufficiently sophisticated to measure the animal welfare impact of transport. There is no general consensus on acceptable thresholds for animal welfare related to transport, nor on maximum transport distances or duration that can be used as a generally accepted standard. Accordingly, the analysis of these impacts is qualitative and reliant on the EFSA opinions on requirements that may reduce risks to animal welfare, as well as stakeholders’ perceptions and experts’ judgement.

-    Challenges related to large scope of impacts assessed

The study also faced several challenges given its large scope. First, many types of animals and means of transport needed to be considered: the type of animals transported varies from day-old chicks (DOC), small fish to mature cattle, while the means of transport varies from climatised trucks and airplanes to large livestock vessels. As collecting information for each situation was impossible, the impacts are described in more general terms (e.g. general animal welfare impacts rather than per species, general economic impacts rather than per country/region). However, a more detailed analysis of the impacts in specific situations is provided through the case studies, which cover specific animal transport aspects, animal species and geographical regions.

Second, animal transport is part of a larger value chain of food production ranging from agriculture/farm level, through transport, slaughter and processing to retail. The Transport Regulation regulates the transport part of the value chain and directly impacts only the stakeholders directly involved in moving animals i.e. transporters and public authorities who carry out official controls. Other stakeholders in the value chain such as farmers, breeders, exporters, slaughterhouses, retailers or consumers may experience indirect impacts. Considering the broad scale of the topic (animals and modes of transports concerned) together with the complexity of the value chain and impossibility to account for all potential indirect impacts along it, the assessment in this study is focused on the direct impacts of animal transport and the stakeholders directly concerned by this activity. For example, the analysis of economic impacts focuses on impacts to the transporters and competent authorities and the analysis of environmental impacts focuses on the impacts of transport. Indirect impacts such as the environment consequences of animal production or the economic impacts on farmers, slaughterhouses, exporters or other stakeholders are discussed only where they are expected to be significant and where information is available.

-    Challenges related to timeline restrictions

In regard to animal welfare during transport, expert judgement and analysis of TRACES data was used to complement the information gathered from stakeholders and, to the extent possible, assess the detailed options.

4.Correlation tables with external study for the MCDA

One major source for the performance of policy options within the MCDA were the scorings provided by the external study accompanying the Impact Assessment.

The study contains impact scores for certain policy options in the four dimensions (animal welfare, economic, social and environmental impacts). While the scores are based on a methodology provided by the European Commission, the presentation of the policy options are in some cases somewhat different. Some policy options are not at all (or only partially) addressed in the supporting study. This is because some of the policy options have been fine-tuned in the process of preparation of the impact assessment. In such cases, the Commission has made use of other, triangulated evidence as a basis for the scoring of the options in this assessment. That evidence, which includes academic literature and stakeholders’ views gathered in the thematic subgroup under the EU Animal Welfare Platform, has also been used to generally complement and qualify the scoring suggested in the supporting study. Hence, the scoring of options in this assessment sometimes differs from the scoring suggested in the supporting study.

The following tables indicate the correspondence of the examined policy actions in the external study with the policy options mentioned in section 6. on the impacts of the policy options in the main document as well as in Annex 9 of this impact assessment. Where there is no corresponding option in the supporting study, the tables summarise the main considerations taken into account for the scoring.

Section 6.1.1 “Journey times and space allowance during transport” of the main document

Section 6.1.2. “Export of live animals” of the main document

Section 6.1.3. “Transport of unweaned calves” of the main document

Section 6.1.4. “Transport in hot temperatures” of the main document

Section 6.1.5. “New technologies” of the main document

Section 6.1.6. “Transport of cats and dogs” of the main document

5.Sensitivity Analysis

In addition to Scenario 1 being presented in the main document to this impact assessment, the following scenarios that differ in the weighting of the four impact dimensions of interest (animal welfare, economic, social, and environmental impacts) have been taken into account in a sensitivity analysis of the scorings provided by the multi-criteria analysis. In order to ensure better compatibility with the external study, the original scale was retained for the sensitivity analysis.

Measure 1: Journey times and space allowance

Measure 2: Exports