Background
8.1 This document sets out the Commission's strategy for reducing emissions from road
transport, together with proposals for reducing emissions from passenger cars and for improving fuel
quality from the year 2000. The Community's legislation on emission limits began in 1970[13]. The most recent Directive on emission standards for cars was
Directive 94/12/EEC[14]. Under that Directive, the Commission
was charged with identifying a package of cost-effective measures necessary to reduce road transport
emissions to a level compatible with future air quality objectives. In response the Commission
embarked on a study programme (the "Auto-Oil Programme") in which the European oil and
automobile industries participated.
8.2 In an Explanatory Memorandum dated 18 October, the Parliamentary Under-Secretary
of State at the Department of Transport (Mr Bowis) tells us:
"One of the main conclusions of the Auto-Oil study, and the basis for the
Commission's strategy, is that, in view of differing air quality between and within Member States,
a package of measures consisting of Community-wide measures -- in particular increasing the
stringency of permitted emissions limits for the main classes of new vehicles in two stages, from
the years 2000 and 2005, together with measures to improve fuel -- in combination with additional
measures taken at national or local level (eg fiscal incentives) -- represents 'an optimal package
of legislative actions which will ensure that the air quality targets identified in the Auto-Oil
programme will be met by year 2010."
"To implement the strategy the Commission has proposed measures to reduce
emissions from passenger cars, including measures not only to reduce limit values but to sustain
the emissions performance of cars when in service and to improve fuel quality from the year 2000.
It also proposes to bring forward in 1997 proposals to reduce emissions from new light commercial
vehicles and heavy vehicles together with a proposal to improve in-service inspection and
maintenance standards. Whilst recognising that some measures will largely be for local application
as deemed necessary by individual Member States, the Commission also sees a role for itself to
'inform, provide and enable' as evidenced in its setting up of a body to co-ordinate research
into alternative propulsion systems.'
The passenger cars proposal
8.3 The Commission is proposing two stages of new emission limits for implementation
in the years 2000 and 2005. The first of these will secure reduction over present limits of 30 per
cent in carbon monoxide (CO) and 40 percent in oxides of nitrogen and hydrocarbon limits (HC+NOx).
For diesels of direct injection type, the proposals represent up to a 40 per cent reduction CO, a
40 per cent reduction in HC+NOx, a 40 per cent reduction in the separate NOx limit and a 50 per cent
reduction in the particulate limit. The reductions for indirect injection diesels are 40 per cent,
20 per cent and 35 per cent respectively.
8.4 The second stage of emission limits will be subject to a review under Article
5 of the proposal (to be completed by the Commission by 31 December 1998) of the trends in air
quality, technical development applicable to vehicles and in oil refineries, the potential of
alternative fuels, improvements in vehicle test procedures, the potential of non-technical measures
(such as traffic management and enhanced urban public transport) and the application of differential
fiscal measures. The Minister tells us in his Explanatory Memorandum that there is at the moment
no proven vehicle technology capable of meeting the emission limits proposed for 2005.
8.5 Other technical measures proposed include changes to test procedures to secure
the development of more effective catalysers and the reduction of petrol evaporation; provision for
a mandatory on-board diagnostic system for petrol cars and an optional system for diesel cars which
will provide early warning of a fault in the emission control system; and new procedures for
checking selectively the emissions of passenger cars up to 5 years old or having travelled less than
80,000 km.
8.6 The Minister notes that Article 4 of the proposal makes provision for Member
States to offer fiscal incentives in respect of vehicles which meet in advance the standards set
out for 2000 and/or 2005.
The fuel quality proposal
8.7 In this document the Commission has proposed a comprehensive set of technical
specifications on fuel quality and:
(i) a ban on the sale of leaded petrol in the EU from 1 January 2000
(with a three-year derogation for Member States where socio-economic hardship can be demonstrated);
(ii) to allow the use of fuels with more stringent specifications over
those proposed by the Commission in specific areas where local air quality needs require such
action;
(iii) adoption of monitoring programmes by Member States to ensure that
market place petrol and diesel meet the proposed standards;
(iv) to review by 31 December 1998 the need for further changes to fuel
quality in the light of new technical measures.
The Government's views
8.8 The Minister notes in his Memorandum that the Government is satisfied with the
legal base for proposals to harmonise vehicle construction standards and considers that action (at
Community level) is justified under the Treaty. But he adds:
"However the Government is of the view that any proposals for provisions
relating to fiscal incentives linked to such standards should adhere to the principle of
subsidiarity, and should ensure that Member States retain maximum flexibility to introduce fiscal
incentives as and when appropriate according to national circumstances and priorities. Furthermore,
fiscal provisions should not be adopted under a qualified majority voting Treaty base article such
as Article 100a."
8.9 On the fuels proposal, the Minister says that the UK is satisfied that action
under the Treaty for the purpose of introducing new fuel standards is justified and that Article
100a is the appropriate Treaty base for this purpose.
8.10 The Minister sets out the Government's general views as follows:
"Overall the Government supports the Commission in formulating proposals for
future emission standards and fuel quality which follow three years of rigorous analysis of costs
and benefits by the Commission and industry. The Government considers that standards for 2000 will
be essential for ensuring that UK air quality targets are met and supports the need for a further
review of appropriate measures for 2005 on the same cost effectiveness basis as adopted in
developing the 2000 proposals.
"Whilst it is arguable whether the Commission have covered all the items
referred to in Article 4 of Directive 94/12/EC, and in a number of instances, as detailed below,
have departed from the main strategy of a cost effective package of measures to achieve air quality
objectives, nevertheless the Commission has made very good progress. The Government is encouraged
that the proposals are directly related to air quality standards and that we now have a benchmark
against which the effectiveness of measures to reduce emissions from road transport, and the costs
involved, can now be judged.
"The Government also welcomes the Commission's recognition that local measures
may provide the most cost effective 'top-up' solution to air quality problems in certain cases.
The measures for 2000 will go a large proportion of the way to meet the UK's air quality targets
for 2005, although other local 'top-up' measures may be necessary to meet targets in some
locations.
"In this connection the Government welcomes the Commission's recognition that
fiscal incentives can play a part in achieving air quality targets. However, the Government is
opposed to the inclusion of fiscal provisions in a Directive made under Article 100a. As indicated
above, it is also of the view that any proposals on fiscal incentives should adhere to the principle
of subsidiarity, and should ensure that Member States retain maximum flexibility to introduce fiscal
incentives as and when appropriate according to national circumstances and priorities.
"The Government does however have some reservations on points of detail which
are broadly related to the fact that, in certain aspects of the proposals, the Commission appears
to have departed from the main strategy of a cost effective package of measures necessary to achieve
measurable air quality objectives.
"So far as the proposals on passenger car emissions and fuel quality are
concerned the Government supports the Commission's proposals for 2000 which are essential to achieve
acceptable air quality across the UK."
8.11 The Minister's reservations and comments on the individual proposals are set
out in greater detail in his Explanatory Memorandum.
Cost implications
8.12 The Minister has provided us with a cost assessment which suggests that the
additional vehicle costs to meet the Commission's proposals for the year 2000 stage will be
£210 per petrol passenger car and £295 per diesel passenger car, and that the total cost
of the stage 2000 proposals will be in the range £454-£520 million.
8.13 Costs to the oil refining industry of the fuel quality proposals in the
Commission's paper are also likely to be high. The Minister provides the following estimates.
Costs to the UK refining industry |
| | Capital costs
(investment)
£ M | Annual costs
(operating)
£ M | Pence/litre
|
| Petrol | 753 | 46 | 0.14 |
| Diesel | 637 | 95 | 0.59
|
The Minister says that differences in the UK and EU market and refining structures,
in particular the focus on petrol production in the UK, mean that the Commission's proposals will
have a disproportionate effect on the UK refining industry and that some refineries may need to
choose between making the investment necessary to make cleaner fuels or closing. He says that the
UK oil industry has nevertheless accepted the proposed quality limit values for unleaded petrol and
diesel for 2000 as proportionate and reasonable in the light of the Auto-Oil study.
Conclusions
8.14 These further proposals for reduction in the permissible emission limits for
vehicles will be costly but must be measured against their environmental and other benefits. We
have no doubt that the proposals raise matters of political importance. And the proposal to have,
once again, a fiscal provision in a Directive under Article 100a is a matter of legal importance,
though we accept, with some reluctance, that the Council has allowed so-called
"permissive" provisions to appear in recent proposals of this kind.
8.15 We have noted the Government's broad support for the proposals which is
coupled with reservations about some aspects of them and, in particular, concern that the Commission
has departed from its strategy of establishing a cost-effective package of measures to
achieve measurable air quality objectives.
8.16 These are detailed and in some respects, highly technical proposals. We do
not rule out the possibility that there should be a debate, because we think the House will need
to be satisfied that what is proposed can be justified in terms of cost-effectiveness and results
to be achieved. We therefore invite the Minister to let us have a Supplementary Explanatory
Memorandum to enable us to consider these matters again in the light of the Council's further
deliberations and before the establishment of a Common Position. Meanwhile, we do not clear the
document.
13. Directive 70/220/EEC; OJ No. L 76, 6.4.70, p.1
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14. OJ No. L 100, 19.4.94, p.42.
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