(a)-(b) Not cleared from scrutiny; further information requested; (c) Cleared
(a) Proposal for a Regulation on the monitoring and reporting of CO2 emissions from and fuel consumption of new heavy-duty vehicles: (38794), 9939/17 + ADDs 1–3, COM(17) 279; (b) Commission Regulation implementing Regulation (EU) No 595/2009 as regards the determination of the CO2 emissions and fuel consumption of heavy-duty vehicles and amending Directive 2007/46/EC and Commission Regulation (EU) 582/2011; (c) Commission Recommendation on the use of fuel consumption and CO2 emission values type-approved and measured in accordance with the World Harmonised Light Vehicles Test Procedure when making information available for consumers pursuant to Directive 1999/94/EC
(a) Article 192(1) TFEU; ordinary legislative procedure; QMV; (b) Regulation 595/2009
(a) (38794), 9939/17 + ADDs 1–3; (b) (39318), 11880/17; (c) (38813), C(17)3525
8.1Heavy-duty vehicles (HDVs) account for 25% of road transport-based greenhouse gas emissions in the EU. With these proposals, the Commission seeks to require Member States and vehicle manufacturers to monitor and report on the fuel consumption and CO2; emissions of all new HDVs registered in the EU market from 2019 onwards. Vehicle testing would be carried out through a Commission-developed simulation software system called VECTO.
8.2The Commission hopes that the obligation to test and report these figures will serve three main purposes: to contribute to the achievement of the EU’s climate and energy targets; enable informed purchasing decisions and the deployment of more fuel-efficient vehicles; and contribute to increased competitiveness among EU HDV manufacturers, in a market where international competitors have made rapid advancements on more fuel efficient and low emissions HDVs.
8.3The Commission has also issued a Recommendation focusing on the provision of consumer information on a new regulatory test procedure called the World Harmonised Light Vehicle Test Procedure (WLTP), which has already been introduced for certain specified new passenger cars from September 2017 and will apply to all new passenger cars from September 2019.
8.4The new test, which has been developed by the EU and major economies such as Japan, Canada and India under the auspices of the United Nations Economic Commission for Europe, is intended to be used as a global standard. It will enable reporting on fuel consumption and CO2; emissions obtained under real world driving conditions, and the Commission notes that the figures will, in many cases, be higher than those obtained under the previous testing system.
8.5The Government supports EU-level action to reduce HDV emissions and to set fuel consumption standards. The Parliamentary Under-Secretary of State for Transport (Jesse Norman MP) also agrees with the Commission’s assessment that a lack of market transparency on HDVs’ fuel consumption and CO emissions contributes to a lack of incentive for innovation.
8.6In the Government’s Explanatory Memorandum, the Minister expressed some concerns that the simulation software that HDV manufacturers would be required to use to measure and certify fuel consumption and CO2; emissions might “conceal opportunities for manufacturers to ‘optimise’ modelled performance in a way that does not provide corresponding improvements in the real world”.
8.7He notes that the Commission and Member States agree with the UK on the need for on-road testing, but that a suitable procedure has proved “technically challenging and time consuming” to develop and that therefore an on-road test will be introduced as part of a “second package” after 2020.
8.8The Minister also expressed concerns that the delegated powers granted to the Commission to amend data reporting requirements could increase the administrative burden on Member States. However, in a letter of 7 December providing an update on working group discussions, the Minister also tells us that the Government has, following discussions with the Driver and Vehicle Licensing Agency (DVLA), concluded that the risks of an increased administrative burden are very low and that, moreover, other Member States believe that such powers are necessary for the Commission to verify the results of future modelled tests.
8.9The Minister also informs us that these latest Mobility Package proposals have made rapid progress through working groups, and that the Estonian Presidency now intends to seek from COREPER, on 15 December, a mandate to open trilogue negotiations with the European Parliament.
8.10The Government has told us that, regardless of the outcome of EU exit negotiations, the proposed Regulation and related implementing Regulation are likely to impact on the UK, since HDVs are typically manufactured for a Europe-wide market. This implies that although the UK will no longer be bound by EU commitments on greenhouse gas emissions and fuel efficient vehicles, UK freight transport operators are likely to continue to use HDVs complying with EU standards.
8.11This also highlights the issue of regulatory alignment or divergence. Manufacturers of vehicle components feeding into European supply chains would need to maintain compliance with EU regulatory standards on fuel consumption and CO so as to continue to do business.
8.12The development of global harmonised standards such as the WLTP for the testing of passenger cars is welcome, and demonstrates that the UK will be able to play a constructive role in multilateral standard-setting bodies in the future. However, the possibility remains that in some areas, the EU will develop more stringent regulatory standards. The Government and UK manufacturers will need to decide whether to follow or diverge from those standards, and consider the economic implications of that decision.
8.13The Government has indicated that it does not have issues with the Commission’s Recommendation on the provision of consumer information on the WLTP, and we are content to release it from scrutiny. However, we retain the proposed Regulation and implementing Regulation under scrutiny, and request the Government to keep us informed of the outcome of the COREPER discussions on 15 December and the outcome of trilogue negotiations. In particular, we would like to know in what respects the proposals are amended following trilogue discussions, and the Government’s views on the outcome reached. We also wish to kept informed of the timeframe for when this proposal will reach the Council.
(a) Proposal for a Regulation on the monitoring and reporting of CO2; emissions from and fuel consumption of new heavy-duty vehicles: (38794), + ADDs 1–3; (b) Commission Regulation implementing Regulation (EU) No 595/2009 as regards the determination of the CO2; emissions and fuel consumption of heavy-duty vehicles and amending Directive 2007/46/EC and Commission Regulation (EU) 582/2011: (39218), ; (c) Commission Recommendation on the use of fuel consumption and CO2; emission values type-approved and measured in accordance with the World Harmonised Light Vehicles Test Procedure when making information available for consumers pursuant to Directive : (38813), C(17)3525.
8.14In 2014 the Commission adopted a Communication on a strategy for reducing the fuel consumption and CO2; emissions of heavy-duty vehicles, which identified a lack of transparency in the market regarding fuel consumption performance. It announced that a simulation tool, known as VECTO (Vehicle Energy Consumption and calculation Tool) would be used to calculate CO2; emissions from new heavy-duty vehicles (HDVs), to be followed by legislation to monitor and report CO2; emissions for all new vehicles placed on the EU market.
8.15In 2015 the EU ratified the Paris Agreement, and committed to a reduction in domestic emissions by at least 40% by 2030 compared to 1990. The Commission consequently proposed an Effort Sharing Regulation on binding reductions in annual greenhouse gas emissions by Member States for 2021–2030. The impact assessment produced in relation to this proposal concluded that reductions in transport emissions would need to be around 19% by 2030 compared to 2005 levels.
8.16In 2016, the Commission’s European Strategy for low-emission mobility set out an ambition for the transport sector to reduce greenhouse gas emissions by at least 60% by 2050 compared to 1990 levels. The strategy set out an action plan to improve fuel efficiency and reduce emissions from HDVs.
8.17Current legislation on the emission performance of HDVs are set out in Regulation EC 595/2009 which establishes common technical requirements for type approval with regard to emissions. Regulation EC 582/2011 sets out requirements for the approval of HDVs with regard to emissions and access to vehicle repair and maintenance information. These Regulations are part of the wide type approval Framework Directive, which sets out the safety and environmental requirements that must be met before a vehicle can be placed on the EU market.
8.18The Commission has now proposed two new Regulations. One concerns the monitoring and reporting of CO2; emissions from new HDVs. The other is a related implementing Regulation, which concerns the determination of CO2; emissions and fuel consumption of new HDVs using the VECTO software. These proposals are accompanied by a Commission Recommendation on the provision of consumer information on the CO2; emissions of new cars, following the introduction of a new testing procedure.
8.19The Commission notes that these proposals will facilitate the development of a methodology for differentiating infrastructure use charges for new HDVs in line with new CO2; emissions, supporting implementation of its review of the “Eurovignette Directive”.
8.20The Commission’s background documents state that at present there is no certification, monitoring or reporting of CO2; emissions and fuel consumption of new HDVs placed on the EU market. This, in the Commission’s view, has given rise to a number of problems.
8.21Fuel costs often amount to over a quarter of the operational costs of the more than 500,000 transport companies operating in the EU. Most of these companies are small and medium sized enterprises (SMEs) and as such would benefit from standardised information that would enable them to evaluate fuel efficiency, compare vehicles and make better informed purchasing decisions.
8.22In 2015, EU exports of lorries generated a €5.1 billion (£4.69 billion) trade surplus. However, EU HDV manufacturers face increasing global competitiveness pressures from manufacturers in the United States, Canada, Japan and China. These countries have all, in recent years, implemented certification and fuel efficiency measures to stimulate innovation and improve vehicle efficiency.
8.23The Commission observes that the current lack of market transparency on these issues in the EU leads to less pressure for EU HDV manufacturers to improve vehicle efficiency and invest in innovation and that this stifles competition in the internal market. This in turn creates risks for the sector in relation to its global competitors.
8.24The HDV sector accounts for 5% of total EU emissions, 20% of all transport emissions and about 25% of road transport emissions, according to 2016 data cited by the Commission. HDV emissions have increased by 14% since 1990, in comparison to an overall 20% increase in greenhouse gas emissions in the transport sector.
8.25EU data projections show that without further action, HDV CO2; emissions will increase by up to 10% by 2030 compared to 2010 levels. EU-level action has already been taken to curb emissions from cars and vans, and the Commission observes that as a result, HDV emissions as a share of road transport emissions will increase to about 30% by 2050.
8.26However, the lack of information on CO2; emissions and fuel consumption is hampering effective action. Member States face difficulties in providing further incentives for the production and purchase of efficient HDVs, and in the design of schemes to promote emission reductions. At EU level, the Commission notes that:
“the absence of robust and comparable data prevents the implementation and enforcement of future harmonised CO2; emission standards across the EU market”.
8.27Member States and vehicle manufacturers will be required to monitor and report to the Commission data on CO2; emissions and fuel consumption of new heavy-duty vehicles registered in the EU.
8.28The Commission’s impact assessment concluded that it would be most cost-effective for national registration authorities and vehicle manufacturers to submit the required data to the European Environment Agency, rather than solely one or the other. The reasons were that national registration authorities still generally use paper files to register HDVs. The need to digitalise this data would generate administrative costs and would slow down the process.
8.29The proposal’s efficacy would also be impeded if vehicle manufacturers had sole responsibility for providing monitoring data. Their data would be based on sales data with no access to registration data. It would subsequently be impossible to allocate data to a particular Member State, and would make it more difficult for Member States to design effective national policies to encourage the uptake of more efficient HDVs.
8.30Under the Commission’s preferred option, national registration authorities would report annually to the Commission through the European Environment Agency the vehicle identification numbers of all new HDVs registered in their territory. Vehicle manufacturers would similarly submit monitoring data for those vehicles to the EEA. The agency would then combine both sets of data to obtain monitoring data at a Member State level. This would also ensure the full digitalisation of data.
8.31In addition to vehicle identification numbers, Member States would be required to report:
8.32This information would need to be provided by the end of February 2020 for all new HDVs registered in 2019.
8.33Vehicle manufacturers would be required to report certain monitoring parameters for each vehicle placed on the EU market. These would be recorded by the manufacturer at the time of production and would include the following:
8.34This information will be used to populate a central register managed by the European Environment Agency, which maintains a similar register for light-duty vehicles. The information provided will be publicly available to enable consumers to compare fuel efficiency across vehicle types and makes. The Commission notes that information that is sensitive on personal data protection grounds and fair competition would not be published. This would include individual vehicle identification numbers and the make or model of components such as transmission, axle or tyres.
8.35The Regulation would confer implementing powers on the Commission concerning the verification and correction of the monitored data. In addition, to ensure that the data requirements and monitoring and reporting procedure remain relevant over time, as well as to ensure the availability of data on new and advanced CO2; reducing technologies, the Regulation would give the Commission delegated powers to amend the data requirements and the monitoring and reporting procedure set out in the annexes to the Regulation.
8.36This Commission implementing Regulation will require vehicle manufacturers to use the EU’s VECTO simulation software to measure and certify the fuel consumption and CO2; emissions of HDVs as required under proposal (a) above.
8.37The Commission’s impact assessment states that the decision to opt for a simulation tool was made after considering other options for test procedures, including engine test beds, chassis dynamometer and on-board tests in real traffic with Portable Emission Measurement Systems.
8.38The main reasons given for choosing this option are:
8.39Vehicle manufacturers will run the simulation test on the basis of certified input data of all the different vehicle components, and on the basis of a certified process of sourcing, managing and applying such input data. Manufacturers of “base vehicles” will be granted licences to run the simulation software on all new vehicles produced and to make this information available to the vehicle purchaser.
8.40Directive 1999/94/EC seeks to ensure that consumers have access on the fuel efficiency and CO2; emissions of new passenger cars, including at point of sale.
8.41A new regulatory test procedure for measuring CO2; emissions and fuel consumption of light-duty vehicles is to replace the New European Test Cycle (NEDC), which no longer corresponds to current vehicle technologies or driving conditions.
8.42The World Harmonised Light Vehicles Test Procedure (WLTP) will provide stricter test conditions and more realistic fuel consumption and CO2; emission values. The new procedure was introduced for new type approvals on 1 September 2017 and will apply to all new passenger vehicles from 1 September 2019.
8.43The current test has been criticised for providing unrepresentative measurements compared to actual road performance. The new test provides for a real driving emission test procedure and this, coupled with new requirements for declaring a maximum value of real-driving emissions, means, according to the Commission, that WLTP values will “in many cases be higher compared with NEDC values for the same car.”
8.44In contrast to the previous test, the WLTP will provide specific fuel consumption and CO2; emission values for each individual vehicle, reflecting the vehicle specifications and optional equipment that affect those values.
8.45The Recommendation covers the following main issues:
8.46The Parliamentary Under-Secretary of State (Jesse Norman MP) writes with a detailed analysis of the proposals.
8.47On subsidiarity, he agrees with the Commission that EU-level action would be the most appropriate, as there is already a common approach for the monitoring and reporting of fuel consumption and CO2; emissions from cars and other light-duty vehicles.
“Monitoring at Member State level would require extensive cooperation and agreement among Member States, and harmonisation would be difficult without EU action due to differences in internal legislation and policy practices.”
8.49The Government shares the Commission’s assessment that coordinated action is necessary to reduce road vehicle emissions and meet wider climate change objectives. The Minister agrees that the current lack of market transparency on fuel consumption and CO2; emissions from heavy-duty vehicles contributes to a lack of innovation and slow improvements in energy efficiency.
8.50The Minister expresses reservations on the proposed delegation of powers to the Commission to amend “non-essential elements” of the annexes to the Regulation which set out the data parameters to be reported and the provisions for verifying and correcting reported data.
“An obligation to provide additional data parameters, however small, may place additional cost burdens onto national authorities if their current registration processes do not capture that data.”
8.52The Minister adds that some Member States either currently have or are moving towards more automated methods of electronic vehicle registration that will capture all the technical content in vehicle Certificates of Conformity. He states:
“There is a risk that the Commission may use the delegated powers in the future to request further registration parameters that are collected by automated systems within other Member States, which may not be recorded at the point of registration within the UK.”
8.53The Minister expresses some reservations about the prescribed use of the VECTO simulation software, as it might
“conceal opportunities for manufacturers to ‘optimise’ modelled performance in a way that does not provide corresponding improvements in the real world”.
8.54He notes that the Government has stressed to the Commission the need to include an on-road verification test in the Regulation to ensure that modelled results accurately reflect real world emissions performance. The Minister adds, however, that while the Commission and Member States agree with the UK on this issue, it has proved technically challenging and time consuming to develop a suitable procedure. The Commission’s view is that such a procedure will in any event not be needed until 2020 at the earliest, and that therefore further development of on-road tests can be introduced as part of a second phase.
8.55The Regulations would affect large-volume manufacturers of commercial vehicles, national registration authorities (the DVLA) and the Department for Transport. Small and medium-sized manufacturers and commercial vehicle-body builders fall outside the scope of the requirements, which apply only to “base vehicles” comprising at lease an engine, chassis, gearbox, axle and tyres.
8.56The Government agrees with the Commission’s impact assessment that mixed reporting of data by national authorities and HDV manufacturers would provide the most effective approach. In addition, it aligns with the approach already taken with respect to light-duty vehicles. Most importantly, the Minister notes that it will “provide the highest levels of data credibility at most sensible cost”.
8.57The Minister does not believe that the reporting of data is likely to add much additional burden to vehicle manufacturers or national authorities, as much of the data will be collected in any event as part of the new vehicle registration and vehicle type approval process.
8.58With regard to the Commission’s Recommendation on new car information, the Minister notes that the regulatory burden is relatively light since the recommendation is to strengthen the existing system. A new statutory instrument will be required as current regulations specify the format of the new car label, and the new test procedure uses four different cycles compared to three at present.
8.59The Government is already working with the Low Carbon Vehicle Partnership to consider the redesign of the new car label including voluntary information such as the vehicle’s compliance with the Government’s proposed Clean Air Zones. The Government is also working with its partner to examine consumer attitudes to and experience of new car information and to assess how this could better promote the purchase of lower emission vehicles. The Minister adds that the Government already funds an outreach programme to help businesses reduce transport fuel use and will use this to explain and publicise the forthcoming changes.
8.60The Minister states that since HDVs are typically manufactured for a European market, this means that:
“regardless of the outcome of EU exit negotiations, it is likely the proposed Regulation and implementing Regulation will impact on the emissions of vehicles purchased and operated in the UK in the future. The Recommendations on the changes to WLTP will have been implemented prior to leaving the EU.”
8.61The Government expects that the additional testing required to measure and certify fuel consumption and CO2; emissions data for all new HDVs using the VECTO software is likely to impose additional costs on large volume manufacturers. The Commission expects that these costs will amount to around €1 (£0.92) per vehicle.
8.62The Minister adds that any additional reporting requirements introduced by the Commission through Delegated Acts would impose cost burdens on national authorities or manufacturers if current databases do not record that information.
8.63The Minister writes with an update on the progress of this proposal. He states that working group discussions have focused on concerns over the publication of a “small number of specific pieces of information that could potentially damage the commercial interests of manufacturers such as engine and aerodynamic performance data”.
8.64He goes on to state that a compromise has now been reached. All data will be available to accredited third parties, such as type approval authorities, to allow them to recreate tests and verify the results of modelling through real world testing.
8.65The most commercially sensitive data will also be available publicly, grouped together in performance bands. Consumers, transport operators and third parties will benefit from the comparative information available, while the commercial interests of vehicle manufacturers will not be threatened.
8.66The Minister states:
“The compromise strikes a satisfactory balance and should promote transparency of performance data.”
8.67The Minister informs us that following a discussion with the DVLA, and considering the way in which data is collected, the Government
“now believe the risks of an increased administrative burden are very low.”
8.68In addition, other Member States expressed strong support for this aspect of the proposal, as they
“were convinced that the powers are needed to be able to verify the results of future modelled tests and deliver robust future regulation.”
8.69The proposal has made rapid progress through working groups, and the Minister informs us that the Estonian Presidency now intends to seek a mandate from COREPER on 15 December, to open trilogue negotiations with the European Parliament in early 2018.
8.70The European Parliament’s Environment Committee is currently considering the proposal, and is expected to report in January. The Government believes, without seeking to pre-empt the European Parliament’s consideration of the file, that its Environment Committee will focus on issues relating to transparency and the robustness of the reporting mechanisms.
28 Directive 2007/46.
29 Proposal for a Directive amending Directive 1999/62/EC on the charging of heavy goods vehicles for the use of certain infrastructures. Considered by the Committee on 6 December 2017.
30 Regulation (EC) No 443/2009 setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce CO2 emissions from light-duty vehicles; Regulation (EU) No 510/2011 setting emission performance standards for new light commercial vehicles as part of the Union’s integrated approach to reduce CO2 emissions from light-duty vehicles; Commission Implementing Regulation (EU) No 410/2014 amending Implementing Regulation (EU) No 293/2012 as regards the monitoring of CO2 emissions from new light commercial vehicles type-approved in a multi-stage process; and Commission Implementing Regulation (EU) No 293/2012 on monitoring and reporting of data on the registration of new light commercial vehicles pursuant to Regulation (EU) No 510/2011.
31 Incomplete vehicles comprising at least an engine, chassis, gearbox, axles and tyres.
32 On the availability of consumer information on fuel economy and CO2 emissions in respect of the market of new passenger cars.
15 December 2017