Select Committee on European Scrutiny Twelfth Report




COM(00) 639

Draft Council Directive modifying Council Directive 94/25/EC on the approximation of the laws, regulations and administrative provisions of the Member States relating to recreational craft.


Legal base: Article 95 EC; co-decision; qualified majority voting
Department: Trade and Industry
Basis of consideration: SEM of 20 April 2001
Previous consideration: HC 28-iv (2000-01), paragraph 5 (24 January 2001)
To be discussed in Council: No further date currently set
Committee's assessment: Politically important
Committee's decision: Not cleared; further information requested


2.1  Council Directive 94/25/EC[3] lays down design and construction standards for recreational craft, and was originally adopted as part of the creation of the Single Market. However, a number of Member States have since introduced national measures to control exhaust and noise emissions from such craft, and this has given rise to concern that these might constitute an obstacle to free trade. As a consequence, the Commission put forward in October 2000 proposals to harmonise within the Community provisions on exhaust and noise emissions from engines intended to be installed on recreational craft.

The current proposal

2.2  In putting its proposal forward, the Commission pointed out that exhaust emissions depend mainly on the type of engine and its rated power, and it identified three groups of engine — 2-stroke spark ignition; 4-stroke spark ignition; and compression ignition — which it says have completely different profiles, and whose level of exhaust emissions also depends upon the boating application. 2-stroke engines in general suffer from high hydrocarbon emissions and carbon monoxide emissions, as do 4-stroke engines (though at lower levels), whilst the emissions of most concern from compression ignition engines are the nitrogen oxides. Also, although the emissions from recreational craft are small compared with those from other sources such as road traffic, they tend to occur at particular times of the year in environmentally sensitive locations. The Commission also pointed to the adverse impact which noise levels have on a large number of people, and to the fact that recreational craft are frequently used in areas where peace and quiet are important both to humans and sensitive wildlife, for which the varying pitch produced by personal watercraft is an especial problem.

2.3  It has therefore proposed a range of exhaust emission requirements for carbon monoxide, hydrocarbons and nitrogen oxides depending on the type of engine, with maximum noise levels related to engine power also being set. The proposal sets out conformity assessment procedures, similar to those in other Community emissions legislation, and, in order to reduce the cost involved, particularly for small and medium sized enterprises (SMEs), these would include a "reference boat" concept, so as to avoid boat builders having to test each and every boat or engine.

2.4  In his Explanatory Memorandum of 14 November 2000, the Parliamentary Under-Secretary of State for Science at the Department of Trade and Industry (Lord Sainsbury of Turville) said that there were strong grounds for adopting these measures in order to prevent the break-up of the single market for recreational and personal watercraft. The UK also considered the principle of taking Community action to limit exhaust gas emissions to be reasonable on health grounds, though the environmental case for including noise might be weaker. It intended to support the proposal in principle, whilst negotiating to ensure that it does not impose unnecessary costs on industry. The Minister added that noise emissions were likely to impose disproportionate costs on the SME boat builder, and that a traditional boatbuilder not following the same design each time might need to have each craft tested and certified for noise by a third-party conformity body. Similar problems could arise with gas emission requirements for smaller-volume engine manufacturers.

2.5  The Minister also said that a requirement on the Commission to report on "in use" compliance testing was of concern, as it could result in craft being subject to annual tests similar to existing vehicle testing. He also said that this would not be a trade issue, and that, even if Community action was appropriate, it should not emanate from an Article 95 Directive, but be based on environmental and health grounds. The UK therefore intended to seek the removal of this provision from the proposal.

2.6  Finally, the Minister said that a Regulatory Impact Assessment would be submitted as soon as it is available, but that industry and the Commission had estimated that the engineering cost of converting one "family" of engines to low emissions might be in the region of £6 million. This, together with conformity assessment costs, could increase the cost of each engine by between 13% and 30%, although users would benefit by a reduction of around 30% in fuel consumption. Costs would also be incurred for conformity with the noise assessment provisions. However, much would depend on how the "reference boat" concept would work in practice.

2.7  In the conclusion to our Report of 24 January 2001, we said that the application of exhaust and noise emission standards to recreational craft was welcome in principle on health and environmental grounds, and that there appeared to be sound Single Market reasons for introducing harmonised standards across the Community. However, since it was also clear that there were a number of unresolved questions, notably on the costs of conformity assessment, we would await the Regulatory Impact Assessment promised by the Minister before considering the document.

Supplementary Explanatory Memorandum of 20 April 2001

2.8  The Minister has now provided a Supplementary Explanatory Memorandum to which is attached a detailed Regulatory Impact Assessment as regards engine manufacturers (who will be responsible for meeting the exhaust emission requirements, and, in the case of outboard-engined craft, the noise requirements), craft manufacturers (who will be responsible for meeting the noise requirements for boats powered by stern drive and inboard engines), and boat owners.

2.9  The Assessment says that, in the case of engine manufacture, the two companies involved will be able to spread their design and development costs over their whole production, and that their main costs are likely to arise from the need to certify new or modified engine types. The same is also broadly true of those companies which adapt engines for marine purposes

2.10  In the case of boat builders, six companies are of substantial size, with on average about 50 different hull/engine design combinations in current production, and these appear to be reasonably confident that they can meet the new noise limits with little modifications to their designs. Consequently, their main costs seem likely to arise on the tests needed to ensure noise compliance. In the case of the 180 or so SME boat builders, the Assessment says that most are "hopeful" that they can meet the limits with little design modification, though a more detailed examination of two very small companies suggests that the range of design options could be severely limited, and it also suggests that "as many as one-fifth of small and medium boatbuilders would be at serious risk of closure as a result of the extra costs and limitations imposed by the amendments to the directive".

2.11  In any event, the Assessment suggests that the major costs are likely to fall on boat owners, a substantial proportion of whom make major modifications or conversions to their craft each year. Under the proposal, those planning refurbishment would be required to install a new engine, and would therefore face substantial additional costs. Overall, it suggests that these might amount to some £90 million a year for the boat-owning population as a whole, whereas the costs falling on the boat builders and companies converting engines to marine uses would be £2.8 and £2.0 million respectively in the first year, and about £2.1 million and £700,000 a year thereafter.

2.12  The Assessment also deals briefly with the potential benefits, though lack of data about current emission levels make it impossible to quantify these. It also suggests that, in the short term, the proposal might lead to increases in emissions, as boat owners contemplating refurbishment or replacement of engines might be deterred by the extra costs they would now face. In addition, it has been suggested that some of the problems which arise, such as the running of engines at night when craft are moored, would not be addressed by the proposal.


2.13  We are grateful to the Minister for the Regulatory Impact Assessment, which makes it clear that the environmental benefits of this proposal are difficult to assess, but that it would entail additional costs, particularly for boat owners. Also, although the larger boat-builders and engine manufacturers who export to the rest of the Community are said to welcome the proposed harmonisation of exhaust and noise requirements, there does appear from the comments we have quoted in paragraph 2.10 to be some doubt as to the impact on the small and medium-sized boat- builders.

2.14  In view of this, we think it would be premature to clear the proposal, and we would like the Government to keep us informed of the progress of the negotiations on it, including the point in paragraph 2.5 above about "in use" compliance testing. In the meantime, it would be helpful if it could provide further clarification of the effect which the proposal is likely to have on the small and medium-sized boat-builders.

3   OJ No. L 164, 30.6.94, p.15. Back

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