The policies and politics of regulating car CO2

Greg Archer Transport & Environment

Leeds University

27th March 2014

Outline

The past

• How EU decisions are made

• Car CO2 regulations

• Key issues and influencers on 2020 car regulation

• What was finally agreed

The future

European

Council

European

Parliament

European

Commission Conclusions and questions

• Post 2020 targets

• WLTC

Car CO2 emissions have been regulated since 2009 on a new car average emissions basis

95g 2020

New car average CO2

€95/g/km > target

7.5g/km eco-

innovations

NEDC test cycle

Supercredits

Utility slope &

parameter 33kg/g/km

2025 target ?

2015 130g/km

Pooling

European decisions are made by consensus - there is no in-built majority

Date Milestone

H1 2012 Commission impact assessment

May 12 Commission draft proposal in inter-service consultation

Jun 12 Commission proposal

Mar 13 Transport and Industry Committee Opinions

Apr 13 Environment Committee vote

Jun 13 Original 1st reading agreement: cars and vans

Oct 13 Council requests cars agreement renegotiated

Nov 13 Cars deal amended

Feb 14 EP Plenary confirm cars

Spring 14 Council sign off

Good outcome Weakening Serious weakening

In the Commission there was intense fighting over the balance of effort between manufacturers

German Commission Oettinger wrote to VW explaining how he weaken Commission proposals

The battle focused on 3 major issues - 95g in 2020 was not questioned until the final decision

Supercredits

• Banking

• Cap

• Multiplier

2025 targets

• Yes / No

• Level

Testing

• Conformity checking

Supercredits created hot-air weakening the target & were successfully limited

190 g/km

95g + 0 g/km No multiplier

95g + Multiplier 2.5

No limit

+

Imaginary sales

Electric vehicles are over-

rewarded by failing to

account for CO2

emissions in production of

the electricity.

Supercredit multipliers

exaggerate the effect

Industry proposal

Without supercredits

+ +

+

German proposals to bank supercredits would have weakened the target by 26g/km and delayed achieving 95g to 2024

95g delayed to 2024

Industry opposed setting a 2025 target but Parliament proposed a range of 68-78g/km

• 95g did not require EVs

• <70g is needed to drive investment in EVs

• The US had proposed a 2025 target

• EP was concerned at the EU lossing its competitive advantage

• T&E proposed 60g/km

78

54

71

52

22

46 22

24

15

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

75g 70g (1)70g (2) 60g

% n

ew

car

sal

es

2025 target g/km based upon NEDC

Fuel cell

Battery electric

Plug-in hybrid

Hybrid

Conventional

Type of Vehicle

The outcome of the June trilogue was weaker than that proposed by Parliament – but still a good outcome

Issue Commission Parliament Council Outcome Trilogue 1

Target 95g 2020 95g 2020 95g 2020 95g 2020

Supercredits 1.3 multiplier applied to 200k

vehicles

1.5 multiplier 2.5g cap 2020-22

Wide range of views

2-1.33 multiplier 2.5g cap 2020-22

Testing WLTC 2017 WLTC 2017+conformity

checking

WLTC as soon as feasible

WLTC as soon as feasible

2025 Post 2020 target 68-78g/km No post 2020 target

Commission declaration

FR

BE

DK

PT

NL

SE

FI

GR

SI UK

DE

CZ

SK

HU

ES

RO

BG

AT

IT

PL

265 17

7

Support deal Oppose deal

June Council positions

60

Blocking Minority

93

IE

Excludes small states

FR

BE

DK

PT

NL

SE

FI

GR

SI

UK

DE

CZ

SK

HU

ES

RO

BG

AT

IT

PL

224

Support deal Oppose deal

October Council positions

123

Blocking Minority 93

101

Excludes small states

Li

The November agreement weakened the 2020 target by about 5% and delayed implementation by 1 year

Issue June agreement Final agreement

Target 100% of vehicles to achieve an average of 95g/km in

2020

95% of vehicles to

achieve 95g/km in

2020; 100% in 2021

Supercredits 2.5g/km supercredits pa 2020-2 7.5g/km supercredits

in total 2020-2

Multipliers 2.0 (2020), 1.67 (2021), 1.33 (2022) Unchanged

2025 Commission declaration to review a 2025 target of

68-78g/km in 2025 by 2015

Unchanged

Testing A new, more realistic and reliable test

procedure should be agreed as soon as feasible

Unchanged

Commission to examine potential for in-service

conformity tests

Unchanged

Commission empowered through an implementing

and delegated acts to modify targets to account for

the new test procedure

Unchanged

Derogations Exemption for manufacturers producing less than

1000 vehicles pa

Unchanged

Eco-innovations 7g/km off-cycle eco-innovation packages permitted Unchanged

Milestones to a 2025 regulation

2014

• Green paper consultation

• Technical studies

2015

• Impact Assessment

• Commission Proposal

2016

• 1st reading in Parliament

• Council consider

2017

• 2nd reading

• Final regulation

Key issues for post 2020 regulation

2025 target

? ETS

2030 target

?

TTW or WTW?

Slope Costs

Mass or

Foot- print

Competitiveness

WLTC

E-

mobility

M1 only?

The current testing framework is not fit for purpose and undermines the regulation

• NEDC test was not designed to measure CO2 emissions

– Test results are significantly more important for regulation and marketing than historically

• Test is 30 years old and test procedure is outdated

• Test cycle is unrepresentative of modern cars & modern driving

• There is a lack of independence and consistency in the way tests are conducted

• There are no meaningful checks on production cars to ensure these match test results

• Vehicles that have not been specially prepared achieve test results 19-28% higher

• Performance between OEMs is highly variable

Conclusions • European decision making is a democratic negotiation

between unequals

• Car regulations are based on a muddled mix of technical uncertainty, policy preferences and political manoeuvring

• The forthcoming battle on 2025 will be even more intense than that for 2020 – Academics are largely absent from debates – get involved!