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This report discusses recent developments in the European Transport Policy (ETP) as well as outstanding issues. In Section 3, it looks at the future, identifying trends in transport drivers and the likely challenges they could pose to society. In Section 4, it proposes some intermediate policy objectives, which could be pursued to address the emerging challenges in the transport sector. In Section 5, it describes some available instruments and possible lines of intervention for achieving the stated objectives. The ideas put forward in this communication are meant to stimulate further debate aimed at identifying policy options.