PURPOSE: to establish CO2 emission performance standards for new heavy-duty commercial vehicles

LEGISLATIVE ACT: Regulation (EU) 2019/1242 of the European Parliament and of the Council setting CO2 emission performance standards for new heavy-duty vehicles and amending Regulations (EC) No 595/2009 and (EU) 2018/956 of the European Parliament and of the Council and Council Directive 96/53/EC.

CONTENT: this Regulation sets binding CO2 emission reduction targets for heavy duty vehicles. CO2 emissions from heavy commercial vehicles, including lorries, buses and coaches, represent around 6% of total CO2 emissions in the EU and 27% of total CO2 emissions from road transport.

The Regulation is part of the Commission's third mobility package of 17 May 2018, entitled "Europe on the move - sustainable mobility for Europe: safe, connected and clean". Its objective is to contribute to achieving the Union’s target of reducing its greenhouse gas emissions by 30 % below 2005 levels in 2030 in the sectors covered by Regulation (EU) 2018/842 and to achieving the objectives of the Paris Agreement, and to ensure the proper functioning of the internal market.

Binding emission reduction targets

To this end, the Regulation provides for a binding CO2 reduction target of 30% by 2030 for new heavy-duty vehicles, such as trucks and lorries, with an intermediate target of 15% by 2025.

The reference CO2 emissions shall be based on the monitoring data reported pursuant to Regulation (EU) 2018/956 for the period from 1 July 2019 to 30 June 2020, excluding vocational vehicles.

Incentives for zero-emission and low-emission vehicles

In order to ensure the smooth transition towards zero-emission mobility and to provide incentives for the development and deployment on the Union market of zero- and low-emission heavy-duty vehicles, the Regulation introduced a dedicated mechanism in the form of super credits for the reporting periods before 2025 and a benchmark for the share of zero- and low-emission heavy-duty vehicles in a manufacturer’s fleet for the reporting periods as from 2025.

The incentive system shall be designed so as to ensure investment certainty for charging infrastructure providers and manufacturers in order to promote the rapid deployment on the Union market of zero- and low-emission heavy-duty vehicles, while allowing certain flexibility for the manufacturers to decide on their investment timeline.

Specific measures to ensure the availability of solid and reliable data

The Commission shall monitor and assess the real-world representativeness of the CO2 emissions and energy consumption values of heavy-duty vehicles using on-board fuel and/or energy consumption monitoring devices, starting with new heavy-duty vehicles registered from the date of application of the measures. It shall also ensure that the public is informed of how that representativeness evolves over time.

Sanctions

The Commission shall impose a financial penalty, in the form of an excess CO2 emissions premium, where a manufacturer is found to have excess CO2 emissions, taking into account the emission credits and emission debts. Information about excess CO2 emissions of manufacturers shall be made publicly available.

In order to provide manufacturers with sufficient incentive to take measures to reduce the specific CO2 emissions from heavy-duty vehicles, it is important that the premium exceed the average marginal costs of the technologies needed to meet the CO2 emissions targets.

The premium should be considered as revenue for the general budget of the European Union.

Just transition

A text stressed the need for a socially acceptable and fair transition to zero emission mobility as well as the importance of taking into account the social effects of the transition throughout the whole automotive value chain and anticipating the implications on employment.

Targeted programmes at Union, national and regional levels are therefore to be considered for the re-skilling, up-skilling and redeployment of workers, as well as education and job-seeking initiatives in adversely affected communities and regions, in close dialogue with the social partners and competent authorities.

Evaluation and reporting

By 31 December 2022 at the latest, the Commission shall present a report on (i) the effectiveness of the Regulation, (ii) the CO2 emission reduction target and the level of the incentive mechanism for low- and zero-emission heavy duty vehicles applicable from 2030, (iii) on the setting of CO2 emission reduction targets for other types of heavy-duty vehicles, including trailers, buses and coaches and professional vehicles, and (iv) on the introduction of binding CO2 emission reduction targets for heavy-duty vehicles for 2035 and 2040 and beyond.

The report shall include, among other things, an evaluation of the VECTO calculation tool to ensure its continuous and timely update.

ENTRY INTO FORCE: 14.8.2019.

The European Parliament adopted by 474 votes to 47, with 11 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council setting CO2 emission performance standards for new heavy-duty vehicles.

The European Parliament’s position adopted at first reading under the ordinary legislative procedure has amended the Commission proposal as follows:

Emission reduction targets

This draft Regulation is part of the third ‘Europe on the Move’ package. Its aim being to make European mobility safer and more accessible, European industry more competitive, European jobs more secure, and the sector to be firmly on the path towards zero emission by mid-century and fully in line with the Paris Agreement.

To this end, it provides for a binding CO2 reduction target of 30% by 2030 for new heavy-duty vehicles, such as trucks and lorries, with an intermediate target of 15% by 2025.

The European Commission shall also propose new post-2030 targets by 31 December 2022 at the latest, in accordance with the Paris Agreement.

Assessment of reference CO2 emissions

In order to ensure the robustness and representativeness of the reference CO2 emissions as a basis for determining the Union fleet-wide CO2 emissions targets, the Commission shall, by means of implementing acts, establish the methodology for assessing the application of the conditions under which the reference CO2 emissions have been determined and establish the criteria to determine whether those emissions have been unduly increased and, if so, how they are to be corrected.

Real-world CO2 emissions and energy consumption

The Commission shall monitor and assess the real-world representativeness of the CO2 emissions and energy consumption values determined within the framework of Regulation (EC) No 595/2009. Furthermore, the Commission shall regularly collect data on the real-world CO2 emissions and energy consumption of heavy-duty vehicles using on-board fuel and/or energy consumption monitoring devices.

In order to prevent the real-world emissions gap from growing, the Commission shall assess how fuel and energy consumption data may be used to ensure that the vehicle CO2 emission and energy consumption values determined pursuant to that Regulation remain representative of real-world emissions over time for each manufacturer.

Verification of the CO2 emissions from heavy-duty vehicles in service

Manufacturers shall ensure that the CO2 emissions and fuel consumption values recorded in the customer information file referred to in Regulation (EU) No 2017/2400 correspond to the CO2 emissions and fuel consumption of heavy-duty vehicles in service as determined in accordance with that Regulation.

Just transition

A new recital underlined the need for a socially acceptable and fair transition to zero emission mobility as well as the importance of taking into account the social effects of the transition throughout the whole automotive value chain and anticipating the implications on employment.

Targeted programmes at Union, national and regional levels are therefore to be considered for the re-skilling, up-skilling and redeployment of workers, as well as education and job-seeking initiatives in adversely affected communities and regions, in close dialogue with the social partners and competent authorities.

Evaluation and reporting

By 31 December 2022 at the latest, the Commission shall present a report on (i) the effectiveness of the Regulation, (ii) the CO2 emission reduction target and the level of the incentive mechanism for low- and zero-emission heavy duty vehicles applicable from 2030, (iii) on the setting of CO2 emission reduction targets for other types of heavy-duty vehicles, including trailers, buses and coaches and professional vehicles, and (iv) on the introduction of binding CO2 emission reduction targets for heavy-duty vehicles for 2035 and 2040 and beyond.

The report shall include, among other things, an evaluation of the VECTO calculation tool to ensure its continuous and timely update.

The European Parliament adopted by 373 votes to 285, with 16 abstentions, amendments to the proposal for a regulation of the European Parliament and of the Council setting CO2 emission performance standards for new heavy-duty vehicles.

The European Parliament's position adopted at first reading under the ordinary legislative procedure amended the Commission's proposal as follows.

Emission reduction targets : this draft Regulation is part of the third ‘Europe on the Move’ package. Its aim being to make European mobility safer and more accessible, European industry more competitive, European jobs more secure, and the sector to be firmly on the path towards zero emission by mid-century and fully in line with the Paris Agreement .

To this end, Parliament considered that the specific CO2 emissions of the EU fleet of new heavy vehicles should be reduced compared to the reference CO2 emissions as follows:

from 1 January 2025 to 31 December 2029, by 20% (15% in the Commission proposal); from 1 January 2030, by at least 35 % (instead of 30 %), subject to review in 2022.

The Commission shall adopt, by 1 July 2019 at the latest, delegated acts specifying the technical criteria for determining the professional destination of a vehicle and defining the urban buses covered by the Regulation.

Zero and low-emission heavy-duty vehicles : in order to ensure the smooth transition towards zero-emission mobility and to provide incentives for the development and deployment on the Union market of zero- and low-emission heavy-duty vehicles, the Regulation should set a reference value for the proportion of zero and low-emission vehicles in all manufacturers' fleets by 2025 and 2030.

Members proposed that starting from 1 January 2025 , the specific share of zero- and low-emission heavy-duty vehicles (whose specific CO2 emissions are less than 50% of the value of the reference CO2 emissions for each subgroup determined) in the manufacturer’s fleet in a calendar year shall be benchmarked against the following values:

as of 2025: at least 5 % ; as of 2030: 20 %, subject to the review .

Related manufacturers may form a pool to meet their obligations

Excess emissions : if a manufacturer or group of manufacturers has excess emissions, the Commission may impose a financial penalty in the form of an excess emissions premium at a level of EUR 5 000 per g/tkm during the period 2025-2029 and at EUR 6 800 per g/tkm from 2030 .

Premiums on excess emissions shall be included in the revenue of the general budget of the Union. Members proposed that those amounts shall be used to complement Union or national measures which, in close cooperation with the social partners and competent authorities, promote the development of skills or the reallocation of workers in the automotive sector in all affected Member States, in particular in the regions and the communities most affected by the transition, in order to contribute to a just transition towards zero- and low-emission mobility.

Actual CO2 emissions and energy consumption : the Commission shall adopt, by 31 December 2019 at the latest, delegated acts in order to supplement this Regulation by introducing an on-road in-service conformity test which ensures that on-road CO2 emissions and fuel consumption of heavy-duty vehicles do not exceed the monitoring data reported pursuant to Regulation (EU) 2017/2400 and to Regulation (EU) 2018/956 by more than 10%.

The Commission shall ensure that the public is informed of how the real world representativeness.

Life-cycle emissions : in its report to be published in 2022, the Commission shall assess the feasibility of developing a method for assessing CO2 emissions throughout the life cycle of heavy vehicles. On the basis of this assessment, the Commission shall propose, where appropriate, to establish reporting obligations for manufacturers and specify the rules and procedures necessary for such reporting.

The report shall also include an assessment of the effectiveness of the modalities for the roll-out of the necessary recharging and refuelling infrastructure.

The 2022 review should take full account of the evolution of the VECTO simulation tool , which should be continuously and timely updated by the Commission.

The Committee on the Environment, Public Health and Food Safety adopted the report by Bas EICKHOUT (Greens/EFA, NL) on the proposal for a regulation of the European Parliament and of the Council setting CO2 emission performance standards for new heavy-duty vehicles.

The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal as follows.

Emission reduction targets : Members considered that the specific CO2 emissions of the EU fleet of new heavy vehicles should be reduced compared to the reference CO2 emissions as follows:

from 1 January 2025 to 31 December 2029, by 20% (15% in the Commission proposal); from 1 January 2030, by at least 35 % (instead of 30 %), subject to review in 2022.

In addition, the minimum binding share of zero-emission buses in a manufacturer's fleet of new city buses should be:

50% from 1 January 2025 to 31 December 2029; 75% from 1 January 2030.

The Commission shall adopt, by 1 July 2019 at the latest, delegated acts specifying the technical criteria for determining the professional destination of a vehicle and defining the urban buses covered by the Regulation.

Zero and low-emission heavy-duty vehicles : starting from 1 January 2025 , the specific share of zero- and low-emission heavy-duty vehicles in the manufacturer’s fleet in a calendar year shall be benchmarked against the following values:

as of 2025: at least 5 % ; as of 2030: 20 %, subject to the review .

Related manufacturers may form a pool to meet their obligations

Excess emissions : if a manufacturer or group of manufacturers has excess emissions, the Commission may impose a financial penalty in the form of an excess emissions premium at a level of EUR 6 800 per g/tkm.

Premiums on excess emissions shall be included in the revenue of the general budget of the Union. Members proposed that those amounts shall be used to complement Union or national measures which, in close cooperation with the social partners and competent authorities, promote the development of skills or the reallocation of workers in the automotive sector in all affected Member States, in particular in the regions and the communities most affected by the transition, in order to contribute to a just transition towards zero- and low-emission mobility.

Actual CO2 emissions and energy consumption : the Commission shall adopt, by 31 December 2019 at the latest, delegated acts in order to supplement this Regulation by introducing an on-road in-service conformity test which ensures that on-road CO2 emissions and fuel consumption of heavy-duty vehicles do not exceed the monitoring data reported pursuant to Regulation (EU) 2017/2400 and to Regulation (EU) 2018/956 by more than 10%.

Life-cycle emissions : in its report to be published in 2022, the Commission shall assess the feasibility of developing a method for assessing CO2 emissions throughout the life cycle of heavy vehicles. On the basis of this assessment, the Commission shall propose, where appropriate, to establish reporting obligations for manufacturers and specify the rules and procedures necessary for such reporting.

The report shall also include an assessment of the effectiveness of the modalities for the roll-out of the necessary recharging and refuelling infrastructure.

The 2022 review should take full account of the evolution of the VECTO simulation tool , which should be continuously and timely updated by the Commission.

PURPOSE: to set mission performance standards for new heavy-duty vehicles.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: the European strategy for low-emission mobility sets a clear ambition: by mid-century, greenhouse gas emissions from transport will need to be at least 60% lower than in 1990 and be firmly on the path towards zero .

Emissions of air pollutants from transport that harm our health need also to be drastically reduced without delay.

Light-duty vehicles (LDV) – passenger cars and light commercial vehicles (vans) - are already delivering their share of emission reductions and legislation has been proposed in 2017 so that they continue doing so after 2020.

Lorries carry around 70% of freight transported over land, delivering also essential public services. While CO2 emissions from heavy-duty vehicles (HDV), i.e. lorries, buses and coaches, account for about 6% of total EU emissions and 25% of road transport CO2 emissions in the EU , they are currently not regulated at EU level. This poses three main problems:

without any further action, CO2 emissions from HDV are projected to grow by 9% over the period 2010– 2030 due to increasing transport activities ;

transport operators, mainly SMEs or micro enterprises, and their clients currently miss out on possible fuel savings and reduced fuel bills;

EU HDV manufacturers face increasing global competitive pressures as the United States, Canada, Japan and China have already implemented regulatory measures to reduce HDV CO2 emissions. However, it is necessary for the EU car industry to keep up with the technological improvements introduced in these markets.

This proposal is part of the third ‘ Europe on the move ’ package which delivers the new industrial policy strategy of September 2017. The aim of the package is to make European mobility safer and more accessible, European industry more competitive, European jobs more secure and the mobility system cleaner and better adapted to the imperative of tackling climate change.

IMPACT ASSESSMENT: the policy options considered in the impact assessment are grouped into five key elements , aimed to address the identified problems and achieve the policy objectives: (i) EU fleet-wide CO2 emission targets; (ii) distribution of EU fleet-wide target across vehicle groups and manufacturers; (iii) incentives for zero and low-emission vehicles; (iv) elements for cost-effective implementation; and (v) governance related issues.

CONTENT: the proposed Regulation sets CO2 emission performance standards for new heavy-duty vehicles whereby the specific CO2 emissions from the EU fleet of new heavy-duty vehicles are reduced compared to the reference CO2 emissions as follows:

from 1 January 2025 to 31 December 2029 by 15 % ; from 1 January 2030 by at least 30 % , subject to review in 2022.

The targets are set as a relative reduction of the average specific emissions of the vehicles registered in the reference year 2019 which is the first year for which official monitored CO2 emissions data will be available. The targets are attributed to each vehicle sub-group as defined in Section 1 of Annex I.

In addition, the proposal:

· defines the vehicles that fall within the scope of this Regulation by reference to the relevant categories defined in type approval legislation and to the four vehicle groups for which certified CO2 emissions data will be available from 2019 onwards;

· provides that the Commission shall determine and publish annually the average specific CO2 emissions of each manufacturer starting from 2019 on the database provided by the relevant manufacturers;

incentivises the deployment of zero- and low-emission heavy-duty vehicles , those vehicles shall be counted multiple times for the purpose of determining a manufacturer’s average specific emissions starting from 2019. A specific incentive is also provided for zero-emission heavy-duty vehicles of the categories M2 (buses) and M3 (coaches) as well as certain category N vehicles (small lorries), including zero-emission vocational vehicles; provides for the calculation of annual manufacturer specific emission targets for the preceding calendar year, starting in 2026. The first annual targets will therefore be determined for the calendar year 2025; sets out a ‘ banking and borrowing’ mechanism , allowing a manufacturer to balance an underachievement of its specific emission target in one year by the overachievement in another year. For that purpose, the manufacturer may ‘bank’ emission credits, if its emissions are lower than a reduction trajectory determined as a linear trajectory from the 2019 reference CO2 emissions to the 2025 targets and from the 2025 targets; imposes financial penalties in case of non-compliance with the specific CO2 emission targets.

The level of the premium is set at EUR 6 800 per g/tkm, equivalent to EUR 570 per g/km based on an average payload of 12 tonnes, of excess emissions which reflect the marginal cost of CO2 reducing technologies.

BUDGETARY IMPLICATIONS: the budgetary impact resulting from the implementation of the proposed Regulation is very limited. It is estimated at EUR 1.888 million for the years 2019-2020.