Documents considered by the Committee on 27 April 2011 - European Scrutiny Committee Contents


11   Emissions from non-road mobile machinery

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Draft Directive amending Directive 97/68/EC as regards the provisions for engines placed on the market under the flexibility scheme

Legal baseArticle 114 TFEU; co-decision; QMV
Document originated7 July 2010
Deposited in Parliament16 July 2010
DepartmentTransport
Basis of considerationEM of 8 September 2010 and SEM of 31 March 2011
Previous Committee ReportNone
To be discussed in CouncilJune 2011
Committee's assessmentPolitically important
Committee's decisionCleared

Background

11.1  Directive 97/68/EC seeks to harmonise Member States' laws governing gaseous and particulate emissions from engines installed in non-road mobile machinery (including that used in construction, agriculture and forestry, railcars and locomotives, and inland waterway vessels). It provides over time for emissions of increasing stringency, with which manufacturers must comply before the engines in question can be placed on the market, and the (Stage IIIA) limits currently applicable are set out in Directive 2004/26/EC. Depending upon the size and application of the engine, those limits are to be progressively replaced by more stringent (Stage IIIB) limits between 1 January 2011 and 1 January 2013, but, in most sectors, manufacturers can make use of a flexibility scheme, which currently permits them to place on the market, over the whole lifetime of an emissions stage, a number of engines, equal to 20% of one year's average sales, meeting the previous superseded emissions stage.

The current document

11.2  However, because Stage IIIB will require the use for the first time of exhaust after-treatment technologies which are difficult to integrate into existing engines without fundamental changes in design, the Commission has concluded that this would pose a major problem for manufacturers at a time when the sector has been severely and unexpectedly affected by the financial and economic crisis. It has therefore proposed in this document some relaxation in the application of Stage IIIB, whereby until 31 December 2013:

  • manufacturers would be permitted under the flexibility scheme to place on the market up to 50% of one year's sales meeting the previous superseded emissions stage;
  • the scheme would be applied for the first time to engines for railway vehicles, allowing manufacturers of those for self-propelled passenger carriages to place on the market up to 20% of one year's sales fitted with engines meeting the superseded standard, whilst those of railway locomotives would be allowed to place up to 12 locomotives fitted with such engines.

The Government's view

11.3  In his Explanatory Memorandum of 8 September 2010, the Parliamentary Under-Secretary of State at the Department for Transport (Norman Baker) said that the Government welcomed such a relaxation of the burden placed upon engine manufacturers, and builders and operators of such machinery, given the particular problems created by the need for exhaust after-treatment facilities. However, he pointed out that there was a trade-off between this and the environmental implications of deferring the application of stricter limits, and that there was also a need to take into account the position of manufacturers of exhaust after-treatment facilities, who will already have made investments in anticipation of the new emissions standard.

11.4  The Minister added that, on balance, the Government believed that the gains would substantially outweigh the losses, but that further consultation was needed to establish whether that was the case, and that an Impact Assessment would be provided in due course. In the meantime, he commented that, because the numbers of engines placed on the market for use in railway vehicles in any year is quite small, an increase to 50% in the proportion of engines making use of the flexibility scheme might better ease the burden of the transition to Stage B without impacting significantly on air quality. Similarly, whilst an absolute limit of the number of engines making use of the scheme (rather than one based on previous sales) was appropriate for railway locomotives, the UK believed that the figure of 12 proposed by the Commission may be too low.

11.5  Our Chairman wrote to the Minister on 15 September, saying that we felt it would be sensible to await that Assessment before seeking to take a definitive view on the proposal, and we have now received this under cover of a supplementary Explanatory Memorandum of 31 March 2011.

11.6  The Assessment notes that, although the measure as proposed falls short of the aspirations of UK passenger train operators (and well short of those of freight train operators), it enjoys the support of most industry stakeholders. However, manufacturers in the exhaust after-treatment sector suggest that it will have a negligible impact on air quality, and will result in lost sales and delayed returns on the investments they have made in anticipation of the new emissions stage. The Assessment goes on to suggest that, over a thirty year period, the measure would increase emissions of oxides of nitrogen by 7,300 tonnes and those of particulate matter by 1,100 tonnes, equivalent to 0.5% and 0.8% respectively of one year's current emissions. The present monetised cost of these additional emissions is estimated at £94.9 million, whereas the corresponding benefit would be £369 million, giving a net benefit of £274 million.

11.7  The Assessment also looks in some detail at the situation facing the UK rail sector, which it notes uses a relatively high proportion of diesel traction, and thus has a particular interest in the application of this measure. It also says that the sector has reiterated its view that the proposal does not go nearly far enough, pointing out that the need to redesign vehicles of all types to accept Stage IIIB compliant engines, and the very limited number of sufficiently powerful engine types currently able to meet the Stage IIIB standard will produce difficulties for operators throughout Europe, with this being a particular problem in the UK as the more restricted loading gauge here does not generally allow the use of rolling stock designed for other European railways.

11.8  In view of this, service operators in the passenger sector and the one UK manufacturer of diesel multiple units would like to see the duration of the flexibility allowance extended to three years, and the proportion of engines allowed to be placed on the market increased to 50% of one year's sales. In the case of the freight sector, UK operators would prefer to see the introduction of the Stage IIIB standard delayed until at least 2016 (and, failing that, an increase in the number of locomotives in the flexibility scheme from 12 to 40 per manufacturer). The Assessment has accordingly examined the implications of seeking an additional flexibility for railway vehicle engines (but based on an increase in the number of locomotives from 12 to 20 manufacturer), and it suggests that this would increase the present monetised value of the cost to £193 million, with the corresponding benefits rising to £457 million, giving a somewhat smaller net benefit of £264 million.

11.9  The Minister points out that the Assessment nevertheless recommends this option because of the non-monetised benefits, which arise primarily from securing the future of UK businesses, and of the generally good quality employment to be found in the sectors concerned. In addition, it is seen as more likely to prevent a shift of freight transport away from railways. He adds that, in the course of informal discussions of the proposal in Brussels, the Commission has shown itself receptive to the idea of increasing somewhat the flexibility available to the rail sector, and to incorporating some special arrangement which would assist in securing a supply of locomotives capable of being operated on the UK's railway network. In the meantime, the European Parliament's lead committee has also shown some sympathy for extending flexibility for railway locomotives.

Conclusion

11.10  It seems clear from the information which the Government has now provided that, notwithstanding any problems which might arise for manufacturers of exhaust after-treatment facilities, this measure as drafted would give rise to a net benefit within the UK. We note that, although any further flexibility of the kind which the rail sector is seeking would produce a slightly lower net benefit, the Government has decided to pursue that option, not least because it seems more likely to prevent a shift of freight transport away from railways. Also, the Commission appears to be receptive to such an approach. In view of this, we do not think the proposal gives rise to any issues which require further consideration, and, although we are drawing it to the attention of the House, we are content to clear it.




 
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