1 Emissions from road
transport and inland waterways
(28351)
6145/07
+ ADDs 1-2
COM(07) 18 |
Draft Directive amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emissions from the use of roads transport fuels and amending Council Directive 99/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC
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| Legal base | Articles 95 and 175EC; co-decision; QMV
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| Department | Transport |
| Basis of consideration | SEM of 2 August 2007
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| Previous Committee Report | HC 41-xiv (2006-07), para 1 (14 March 2007)
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| To be discussed in Council | December 2007
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| Committee's assessment | Politically important
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| Committee's decision | For debate in European Standing Committee
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Background
1.1 The impact on the environment and human health of emissions
from vehicles and other forms of transport has long been recognised,
as has the link between those emissions and quality standards
for petrol and diesel fuels. In particular, Directive 98/70/EC
(as amended) lays down minimum requirements for such fuels, notably
as regards their lead content, when used in on and off road vehicles,
whilst Council Directive 1999/32/EC establishes sulphur limits
for fuel used in inland waterway vessels. In the meantime, the
need to limit emissions from these sources has been accentuated
by the Community's commitments on greenhouse gas emissions under
the Kyoto Protocol, whilst the Thematic Strategy on Air Pollution[1]
envisages significantly higher air quality goals for the Community.
The current proposal
1.2 As we noted in our Report of 14 March 2007, the Commission
put forward this document in January 2007, proposing the following
changes:
— Petrol
vapour pressure limits
Directive 98/70/EC currently limits the maximum vapour
pressure of petrol distributed during the summer to 60kPa, so
as to control the emission through evaporation of hydrocarbons,
but Member States (including the UK) with so-called "Arctic
conditions" are allowed to relax this limit to 70kPa, in
order to aid vehicles starting in cold summer conditions. A new
definition of "Arctic or severe" conditions would be
introduced, based on average winter temperatures being below the
Community average, which would limit the vapour pressure relaxation
to regions meeting those conditions: there would also be a separate
vapour pressure relaxation of up to 8kPa for petrol containing
ethanol.
— Ethanol-petrol
blends
The ethanol content of petrol is currently limited
to 5%, and this proposal would allow the introduction of a petrol
blend with up to 10% ethanol, which would be marked as "high
biofuel petrol", with fuel meeting the current 5% limit being
marked as "low biofuel petrol".
— Polycyclic
Aromatic Hydrocarbon (PAH) content of diesel
The maximum permissible PAH content in diesel would
be reduced from 11% to 8%.
— Fuel
additives
Metallic additives are not widely used in fuel within
the Community at present, and the proposal would require the Commission
to develop a testing methodology for approving their use.
— Off-road
gas oil requirements
The maximum content of sulphur in gas oils used in
non-road machinery is 2000mg/kg, reducing to 1000mg/kg from 1
January 2008. This would be reduced to 10mg/kg (virtually "sulphur
free") from 31 December 2009, thereby enabling the use of
emissions control technologies which would not operate with fuel
having a high sulphur content, whilst for inland waterway fuel,
the limit would be set at 300mg/kg from this latter date, falling
to 10mg/kg from 31 December 2011.
— Life
cycle reduction of carbon dioxide
Suppliers would be required to report on the life
cycle greenhouse gas emissions of their fuels, and to reduce these
(per unit of fuel energy) by 1% a year between 2010 and 2020.
We also noted that, although the Government had a
number of initial comments, it was preparing a Regulatory Impact
Assessment, which would form the basis of its public consultation
on the proposal. We therefore said that, although the proposal
appeared to be significant, both in terms of its intended effect
on human health and the environment, and its potential costs,
we would take a more definitive view once we had seen that Assessment.
In the meantime, we though it right to draw the document to the
attention of the House.
Supplementary Explanatory Memorandum of 2 August
2007
1.3 The Parliamentary Under-Secretary of State at
the Department of Transport (Mr Jim Fitzpatrick) has now provided
a supplementary Explanatory Memorandum of 2 August 2007, enclosing
a copy of the promised Regulatory Impact Assessment. He says that
the Government has considered the detailed policy implications
of the proposal, and that its policy on each issue aligns closely
with the concerns it had originally outlined (and which were set
out in paras 1.4 — 1.6 of our earlier Report).
1.4 In particular, he says that:
- since the proposed relaxation
for petrol vapour pressure limits would apply in the summer,
it is "highly illogical" to base eligibility for it
on winter temperatures, and that, insofar as the proposal would
result in a tighter limit applying to petrol in the UK, it would
impose costs on refiners which would far outweigh any benefits:
the Government will therefore seek to ensure that the relaxation
continues to be based on summer temperatures, and hence to apply
to the UK;
- the separate vapour pressure relaxation of
up to 8kPa for petrol containing ethanol would only arise
where the non-Arctic limit of 60kPa applies, and, if the UK succeeded
in retaining its summer limit of 70kPa, this aspect of the proposal
would have no direct impact here (although it might increase evaporative
emissions of hydrocarbons in mainland Europe, perhaps resulting
in some trans-boundary air pollution in the UK);
- an increase in the current limit for the ethanol
content from 5% to 10% would help to deliver the European
Council's wish to see bioethanol account for 10% by energy content
by 2020 (equivalent to 15% by volume), but, since it is unlikely
that much of the current vehicle fleet would be compatible with
the latter standard, the Government intends to seek a requirement
from the Commission to review the case for increasing ethanol
content to this level by 2015: also, since the marketing of the
two grades side by side is unlikely to be viable in the UK, due
to limitations in the distribution chain and on the space available
on filling station forecourts, it might be more effective simply
to allow all petrol to contain up to 10% ethanol, without creating
an additional grade, and to delete the proposal that petrol containing
10% ethanol should be described as "high biofuel";
- the air quality benefits of reducing the PAH
content of diesel are not well demonstrated, and, although
the UK currently meets the proposed 8% limit, any need in future
to move to alternative crude oil supplies could make it costly
to meet this: the Government therefore intends to seek the retention
of the current 11% limit;
- because of concerns that some metallic additives
might damage certain vehicle emissions control technologies, the
Government accepts the suggestion that the Commission should develop
a testing methodology for approving their use in fuels;
- the costs of reducing off-road gas oil sulphur
content to 50mg/kg or lower were considered when Directive
2004/26/EC (which sets engine emissions standards for non-road
mobile machinery) was negotiated, and the Government continues
to support this in principle: however, as contamination in the
distribution chain would make it extremely difficult to deliver
gas oil with only 10mg/kg of sulphur, without the use of a dedicated
fleet of tankers supplying fuel for off-road uses, it intends
to seek some flexibility on this point, and also to allow a two
year delay (until 31 December 2011) for rail gas oil, thereby
aligning this with the date on which new emissions standards apply
to that sector;
- there does not appear to be any justification
for applying the 10mg/kg standard to inland waterway fuel,
as the emissions control technology for these engines does not
require it, and any consequent reduction in sulphur dioxide or
particulate emissions is likely to be negligible: on the other
hand, as inland waterway fuel demand is unlikely to be sufficient
to justify distributors supplying a separate grade of gas oil
from that used in other off-road machinery, the likelihood in
practice is that the limit will in any case apply to fuel for
that use as from 31 December 2009.
1.5 In its initial comments, the Government's main
concerns related to the proposed requirements for lifecycle greenhouse
gas reductions, which it said would have major implications, not
only in terms of costs, but also for agricultural land use and
biodiversity, since it believes that the only way of meeting this
target would be through increased use of biofuels. It also pointed
out that the proposal appears to assume a very low baseline biofuel
penetration in 2010, and that it makes optimistic assumptions
about the lifecycle savings of future biofuels. Even so, it implies
the need for an increase in the biofuel content substantially
more ambitious than the 10% target set by the European Council
in March 2007 (and which is the figure the Commission is planning
to introduce over the same period by amending the Biofuels Directive).[2]
1.6 The Minister reiterates these concerns, not least
in terms of the implications which the 2010 baseline would have
for countries, such as the UK, which have already made substantial
progress towards increasing biofuel use, and he says that the
Government will be seeking to remove the greenhouse gas reduction
targets from the proposal. He adds that this would be consistent
with the European Council having also agreed that the adoption
of binding targets should be subject to sustainable production
first being ensured. However, in order to ensure that the underlying
principle is not overlooked, the Government also intends to ask
the Commission to review the setting of such targets within the
Directive, once experience is available of the effectiveness of
sustainability criteria.
1.7 The Regulatory Impact Assessment submitted with
the Minister's supplementary Explanatory Memorandum also sets
out the financial implications of the proposal, and points out
that the life cycle greenhouse gas reduction proposal would fall
most directly on fuel suppliers (including refiners and importers),
and both large and small biofuel suppliers; that its monitoring
and reporting aspects might affect farmers and both fuel distributors
and retailers; and that consumers would be affected by increased
fuel costs. More specifically, it suggests that, so far as the
UK is concerned, the net economic costs of the Commission's proposals
as drafted would be between £667 and £1,362 million
a year, with additional environmental costs of £10 to £15
million (from increased emissions on nitrogen oxides), but that
the only benefits would be environmental, amounting to between
£174 and £183 million, as a result of savings in emissions
of particulate matter and carbon dioxide. There would be no economic
or social benefits.
1.8 A very high proportion of the costs and benefits
identified above would arise from the proposed reduction in life
cycle emissions of greenhouse gases, and the Minister has therefore
considered the implications of securing the UK's aim of removing
the target set out in the Commission's proposal. He suggests that,
if this were to be achieved (as well as the amendment which the
UK is seeking on summer petrol vapour pressures), the economic
costs would be reduced to between £61 and £91 million,
but, again there would be no economic or social benefits, and
nor would there be any direct environmental benefit.
Conclusion
1.9 Whilst we are grateful to the Minister for
this Regulatory Impact Assessment, it merely reinforces our initial
view that this a significant proposal, both in terms of its intended
effect on human health and the environment, and its potential
costs. In particular, we note that, as drafted, it would provide
no economic or social benefits, and that, although there would
be net environmental benefits, these would be significantly outweighed
by the very substantial costs involved. Moreover, even if the
UK were to secure the major change it is seeking, the measure
would still impose costs (albeit at a much lower level), but would
produce no direct environmental benefits. We therefore believe
that this raises issues which the House would wish to consider
further, and we are consequently recommending the document for
debate in European Standing Committee.
1 (26900) 12735/05: see HC 34-x (2005-06), para 8 (16
November 2006). Back
2
2003/30/EC. Back
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