PURPOSE: to reduce by 2020 the CO2 emissions from new passenger cars.

LEGISLATIVE ACT: Regulation (EU) n° 333/2014 of the European Parliament and of the Council amending Regulation (EC) No 443/2009 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars

CONTENT: this Regulation amends Regulation (EC) No 443/2009 in order to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars. High fossil fuel prices have a negative impact on economic recovery and on energy security and affordability in the Union. Increasing, therefore, the efficiency and sustainability of new passenger cars and light commercial vehicles, thus reducing the dependency on oil, is a priority.

The main points of the Regulation are as follows:

· 2020 objectives: the Regulation sets out the conditions under which vehicle manufacturing must take place in order to reach the 2020 objectives for CO2 (95 g de CO2/km) for new passenger cars.

· Each manufacturer must reach this objective in a progressive way from 80 % of new cars sold in 2014 going to 95% in 2020 and reaching 100% from the end of 2020.

· From 1 January 2012, manufacturers responsible for less than 1 000 new passenger cars registered in the Union in the previous calendar year are excluded from the scope of specific emission targets.

· Super-credits: the Regulation also provides for the use of "super-credits" from 2020 to 2022: this means incentives for car manufacturers to develop new technologies and manufacture cars with low emission levels (less than 50g CO2/km), as these cars would count more towards meeting the fleet average than normal cars. The limit for the use of super-credits is set at 7.5g of CO2/km for the three years 2020-2022.

· Innovative technologies: upon application by a supplier or a manufacturer, CO2 savings achieved through the use of innovative technologies or a combination of innovative technologies shall be considered. The total contribution of those technologies to reducing the specific emissions target of a manufacturer may be up to 7 g CO2/km.

· Such technologies shall be taken into consideration only if the methodology used to assess them is capable of producing verifiable, repeatable and comparable results . A supplier or a manufacturer who applies for a measure to be approved as an innovative technology shall submit a report, including a verification report undertaken by an independent and certified body, to the Commission.

· Test procedure : in a recital, it is stressed that a new, more realistic and reliable test procedure should be agreed as soon as feasible. In order to ensure that specific CO2 emissions quoted for new passenger cars are brought more closely into line with the emissions actually generated during normal conditions of use, the Worldwide harmonized Light vehicles Test Procedure (WLTP), in the framework of the United Nations Economic Commission for Europe, should be applied at the earliest opportunity.

· Review: by 31 December 2015, the Commission shall review the Regulation, in order to establish the CO2 emissions targets for new passenger cars for the period beyond 2020. The review will examine the specific emissions targets and the modalities set out, as well as the other aspects of the Regulation, including whether a utility parameter is still needed and whether mass or footprint is the more sustainable utility parameter.

· The Commission shall submit a report on the result of that review. That report should include proposals for amending Regulation (EC) No 443/2009, including the possible setting of a realistic and achievable target for 2025 , based on a comprehensive impact assessment that will consider the continued competitiveness of the car industry and its dependent industries.

ENTRY INTO FORCE: 08/04/2014.

DELEGATED ACTS: the Commission may adopt delegated acts, particularly in order to amend Annex II to Regulation (EC) No 443/2009 as regards data requirements and data parameters and supplement the rules on the interpretation of the eligibility criteria for derogations from the specific emissions targets. The power to adopt delegated acts will be conferred on the Commission for a period of five years from 8 April 2014 . The European Parliament or Council may raise objections to a delegated act within two months from the date of notification (which may be extended by two months). If Parliament or Council raise objections, the delegated act will not enter into force.

The European Parliament adopted by 499 votes to 107 with 9 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 443/2009 to define the modalities for reaching the 2020 target to reduce CO 2 emissions from new passenger cars.

Parliament adopted its position in first reading following the ordinary legislative procedure. The amendments adopted in plenary are the result of an agreement between Parliament and Council. The main amendments were as follows:

Emission targets : in accordance with the Commission proposal, from 2020 onwards, the Regulation sets a target of 95 g CO2 /km for the average emissions of the new car fleet.

With effect from 1 January 2012, a manufacturer, which is responsible for less than 1 000 new passenger cars in the previous calendar year, shall be excluded from the scope of the specific emissions target and the excess emissions premium.

Specific emission targets : for the purposes of determining each manufacturer's average specific emissions of CO 2, the following percentages of each manufacturer's new passenger cars registered in the relevant year shall be taken into account:

· 65% in 2012,

· 75% in 2013,

· 80% in 2014,

· 100% from 2015 to 2019,

· 95% in 2020,

· 100% by the end of 2020 onwards.

Super-credits for 95 g CO 2 /km target : in calculating the average specific emissions of CO2 , each new passenger car with specific emissions of CO2 of less than 50 g CO2 /km shall be counted as:

· 2 passenger cars in 2020,

· 1,67 passenger cars in 2021,

· 1,33 passenger cars in 2022,

· 1 passenger car from 2023.

Eco-innovations : upon application by a supplier or a manufacturer, CO 2 savings achieved through the use of innovative technologies or a combination of innovative technologies (“innovative technology packages”) shall be considered.

Such technologies shall be taken into consideration only if the methodology used to assess them is capable of producing verifiable, repeatable and comparable results . The total contribution of those technologies to reducing the specific emissions target of a manufacturer may be up to 7 g CO 2 /km.

A supplier or a manufacturer who applies for a measure to be approved as an innovative technology or innovative technology package shall submit a verification report undertaken by an independent and certified body, to the Commission.

Evaluation and reports : by 31 December 2015 , the Commission shall review the specific emissions targets and the modalities set out herein, as well as the other aspects of this Regulation, including whether a utility parameter is still needed and whether mass or footprint is the more sustainable utility parameter , in order to establish the CO2 emissions targets for new passenger cars for the period beyond 2020. The Commission shall submit a report with the result of that review. That report shall include any appropriate proposals for amending this Regulation, including the possible setting of a realistic and achievable target for 2025 , based on a comprehensive impact assessment that will consider the continued competitiveness of the car industry and its dependent industries.

New test procedure : a recital stressed the need to amend the currently used ‘New European Driving Cycle’ (NEDC), to ensure its representativeness regarding real driving conditions and to avoid the underestimation of real CO 2 emissions and fuel consumption. A new, more realistic and reliable test procedure should be agreed as soon as feasible.

In order to ensure that specific CO 2 emissions quoted for new passenger cars are brought more closely into line with the emissions actually generated during normal conditions of use, Parliament stated that the Worldwide harmonized Light vehicles Test Procedure (WLTP) should be applied at the earliest opportunity.

The Council examined the final compromise text of a draft regulation amending regulation

443/2099 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars. The text was negotiated in informal trilogues with the European Parliament last June.

The Council confirmed its willingness to reach, at the earliest opportunity, a first reading agreement with the European Parliament on this file, and maintain a high level of ambition.

It agreed to support the presidency in s eeking, together with the Commission, further contacts with the European Parliament in order to explore the possibility of finding some limited flexibility , while maintaining the overall balance of the compromise agreed in June.

The Committee on the Environment, Public Health and Food Safety adopted the report by Thomas ULMER (EPP, DE) on the proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 443/2009 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars.

The Committee on Industry, Research and Energy, in exercising its prerogatives as an associated committee in accordance with Article 50 of Parliament’s Rules of Procedure , was also consulted for an opinion on this report.

The parliamentary committee recommends that the position adopted by the European Parliament at first reading according to the ordinary legislative procedure should amend the Commission’s proposal as follows:

Emission targets: Members want the Regulation to set the target for 2025 within an indicative range of 68g CO2/km to 78g CO2/km as average emissions for the new car fleet .

Producers responsible annually for fewer than 1000 new passenger cars are excluded from the scope of the specific emissions target and the excess emissions premium.

New world test procedure: with a view to bringing the specific CO2 emissions quoted for new passenger cars more closely into line with the emissions actually generated during normal conditions of use, the Commission should seek to ensure that the new international light-duty vehicle test procedure ( World Light-Duty Test Cycle – WLTC/P ) is finalised as soon as possible, so that it may be adopted at Union level by the end of 2014 and introduced in January 2017 .

Monitoring and reporting of average emissions: where as a result of the verification of the conformity of production, a Member State establishes that the CO2 emissions for a production vehicle deviate by more than 4% from the approved type, that deviation shall be reported to the Commission.

The Commission should monitor real reported CO2 emission values by vehicle type and manufacturer on the basis of the best available sources of information and publish in its annual monitoring reports how those values compare with type approval values.

Eco-innovation: manufacturers of new cars and their suppliers should be encouraged to certify and incorporate technologies or technology packages (eco-innovations) which further reduce fuel consumption and the CO2 emissions directly associated with it. Such technologies shall be taken into consideration only if the methodology used to assess them is capable of producing verifiable, repeatable and comparable results.

Once a year, the Commission shall submit to the European Parliament and to the Council a report on innovative technologies and innovative technology packages which have been approved or rejected. The Commission shall, by 31 December 2013, complete a review of the provisions relating to eco-innovations.

Checks: Members consider it to be essential that the vehicle on which conformity of production is being verified have a coast down test performed on it to establish its aerodynamic and rolling resistance and provide the values to be used for the dynamometer test which forms part of the conformity of production test.

With a view to ensuring that real world emissions are adequately reflected and measured CO2 values are strictly comparable, the Commission should ensure that those elements in the testing procedure that have a significant influence on measured CO2 emissions are strictly defined.

Utility parameter: an amendment stipulates that a manufacturer should apply the same utility parameter (mass or footprint) for the whole of its car fleet. Once a manufacturer has chosen to use footprint as the utility parameter for establishing compliance with its specific emissions target, it may not revert to the use of mass in the subsequent years.

Members also underline the need to collect information regarding the maximum net power (kW) and engine capacity (cm3) as these are both important parameters relating to vehicle CO2.

Review: as it is not yet possible to tell what alternative propulsion concepts consumers will accept, Members propose that the regulatory régime for the post-2020 period should be reviewed by 1 January 2017 (and not by 31 December 2014, as proposed by the Commission).

PURPOSE: to amend Regulation (EC) n° 443/2009 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passenger cars.

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

BACKGROUND: while emissions from other sectors are generally falling, road transport is one of the few sectors where emissions have risen rapidly. Between 1990 and 2008 emissions from road transport increased by 26%. As a result, it is the second biggest source of GHG emissions in the EU, and contributes about one-fifth of the EU's total emissions of CO2.

In March 2011 the Commission adopted the 'Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system'. It sets out a transport strategy within a frame of achieving a 60% reduction in transport GHG emissions by 2050.

Regulation (EC) 443/2009 sets the CO2 reduction framework for the new car fleet to 2020. It provides an operation in two parts.

In the first period to 2015 the modalities of compliance with the target have been established. For the second period to 2020 the target cannot become effective without implementing the necessary modalities, which are to be determined in a review. This target was established in the co-decision process and is not reconsidered in the review.

Failure to determine or implement the modalities would have a detrimental effect on vehicle manufacturers and parts suppliers who need certainty with regard to the technology and vehicles that will be needed to meet the target.

Key modalities in the current Regulation include the limit value curve which is defined by the utility parameter and the function describing the relationship between the utility parameter and CO2 emissions (setting the shape and slope). Other modalities include the excess emissions premium scheme, eco-innovations, derogations, pooling, the phasing-in of the targets and granting of super-credits for a limited period of time.

IMPACT ASSESSMENT: a joint impact assessment supporting the current proposal and a proposal to amend Regulation (EU) No 510/2011 has been prepared. The following aspects were analysed: (a) 'do nothing' option; (b) modalities of meeting the car target; (c) simplification and reduction of administrative burden; (d) adaptation to the new test cycle; (e) form and stringency of legislation beyond 2020.

LEGAL BASIS : Article 192 of the Treaty on the Functioning of the European Union. (TFEU).

CONTENT: the proposal amends the Regulation to implement the modalities of meeting the 95 gCO2/km target for new passenger cars to be reached in 2020. The main modalities implemented are as follows:

· the utility parameter continues to be the vehicle's mass in running order;

· the limit value curve remains linear with a slope of 60% compared to the baseline fleet which is kept as the 2006 fleet in line with the 2015 limit value curve;

· super-credits for cars emitting below 35 gCO2/km are introduced between 2020 and 2023 with a multiplier of 1.3 and limited to a cumulative figure of 20 000 vehicles per manufacturers over the duration of the scheme;

· the "niche" derogation for manufacturers target is updated for 2020;

· manufacturers responsible for less than 500 registrations of new passenger cars per year are excluded from the obligation of having a CO2 target;

· more flexibility is allowed in the timing of decisions granting small volume derogations;

· eco-innovations are retained when a revised test procedure is implemented;

· the Excess Emissions Premium is maintained at €95 per g/km per vehicle;

· the Committee procedure provisions are updated to be compatible with the Lisbon Treaty.

As industry benefits from indications of the regulatory regime that would apply beyond 2020, the proposal includes a further review to take place by 31 December 2014.

BUDGETARY IMPLICATIONS: the proposal has no implications for the EU budget.

DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the EU.