The European Court of Justice has ruled illegal an Austrian ban on heavy trucks on part of a highway that connects Germany with Italy, arguing the measure hindered the freedom of movement.

Although the court said transit restrictions sometimes could be justified to protect the environment, the court said Austria should have examined whether alternative transport existed. The court also criticized Austrian authorities for imposing the ban without sufficient warning.

The ruling represents a stinging defeat in Austria’s fight to control traffic. Soaring demand for trans-European truck transport has collided with local sensitivities in the heart of the Alps.

Austria is the Continent’s trucking crossroads, the corridor through which an increasing payload of goods is hauled to and from Germany, Italy, France and Eastern Europe.

Austria’s ban angered transport and logistics companies in Germany, Italy and the Netherlands which complained there were no viable alternatives to cross the Alps. On Nov. 15, representatives of Europe’s truckers claimed victory.

This decision won’t just save “a few jobs might be at stake in the transport industry,” said Karl-Heinz Schmidt, managing director of the German Transport Association representing logistics companies. It is crucial “for everyone who uses logistics services.”

Faced with growing public discontent, the Austrian region of Tyrol prohibited in 2003 the use of a 46 kilometer-section of the A12 highway by trucks over 7.5 tons once a limit for nitrogen dioxide emissions was exceeded. The ban targeted the transport of certain goods including cars, steel and grains that are suitable for rail transport. The European Commission asked the Luxembourg-based court to intervene. Judges then ordered Austria to suspend the ban.

Austria claimed the limit of 1.6 million trucks a year set in its 1995 entry treaty into the European Union had been surpassed since 1999. In addition, it argued that new E.U. rules put into effect in 2004 were generating an increase, rather than a reduction, of nitrogen dioxide emissions.

The decision doesn’t end the conflict though. Austria has asked the court to annual the 2004 rules on transit. A hearing on that matter was scheduled for Nov. 17.

In addition, Austria wants to charge higher tolls to finance transport-related environmental and health costs. The European Parliament is currently debating legislation.

The European Parliament’s transport committee agreed late Monday that countries should be allowed to charge truckers up to 60% of such costs, if member states can’t agree on common rules.

The proposal must now be approved by the full parliament and the Council of Ministers.

The Community of European Railway and Infrastructure Companies applauded the initiative but said a final decision couldn’t be expected before 2010. (Dow Jones)