COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the quality of petrol and diesel fuels and amending Directive 98/70/EC (COM(2001)241 2001/0107(COD))

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2001/0107 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the quality of petrol and diesel fuels and amending Directive 98/70/EC (COM(2001)241 2001/0107(COD))

1. HISTORY OF THE FILE

- The proposal was presented to the Council on 11 May 2001 (OJ C 213E, 31.7.201, p.255)

- The Economic and Social Committee adopted its opinion on 18 October 2001, CES 1331/2001). The Committee of the Regions has not yet given an opinion.

- The European Parliament gave its opinion (first reading) at its plenary session on November 29 2001.

- At its meeting on 13 December 2001, the Council unanimously reached a political agreement with a view to adopting a Common Position.

- At its meeting on 15.04.2002,the Council formally adopted its Common Position.

2. PURPOSE OF THE COMMISSION'S PROPOSAL

The proposal requires Member States to introduce petrol and diesel with a maximum sulphur content of 10 mg/kg into the marketplace on a balanced geographic basis no later than 1 Jan 2005. It also proposes that all petrol and diesel sold in the Community after 1 Jan 2011 is subject to a maximum sulphur content of 10 mg/kg. The date for diesel is subject to confirmation in a review to be completed by the Commission no later than 31 Dec 2006. Member States are required report on the extent to which petrol and diesel with a maximum sulphur content of 10 mg/kg is available during the introductory period.

The proposal also clarifies the situation regarding the currently permissible sulphur content for diesel used in non-road mobile machinery but introduces no new provisions. It also proposes minor changes to the provisions on technical adaptation and alignment with a pending European Standard on fuel quality monitoring. No changes to the non-sulphur parameters have been proposed.

3. COMMENTS ON THE COMMON POSITION

3.1. General comments

Three key issues arose during the debate in Council:

* the final date after which the maximum sulphur content of all petrol and diesel sold should be limited to 10 mg/kg;

* whether the quality of diesel used for road vehicles should be extended to apply in non-road mobile machinery applications;

* the possibility to have more stringent environmental specifications for petrol and diesel than those set down in the directive when they are justified by local environmental conditions.

The European Parliament, in its First Reading, sought to advance the date after which all petrol and diesel sold would be limited to a 10 mg/kg maximum to 1 Jan 2008 from 1 Jan 2011 as proposed by the Commission. Regarding diesel used in non-road mobile machinery the European Parliament sought to require that road diesel quality specifications would apply from 1 January 2005.

In the Common Position the Council agreed to advance the date after which all petrol and diesel sold would be subject to a maximum sulphur content of 10 mg/kg to 1 Jan 2009. Regarding gas oil used in non road mobile machinery the Council has left the current situation unchanged whereby a maximum sulphur content of 2000 mg/kg shall continue to apply until 1 Jan 2008 after which it shall reduce to 1000 mg/kg. However Member States may apply more stringent standards for sulphur content if they so wish. In addition the Commission has been invited to establish the necessary fuel quality consistent with the next stage of emission standards for compression ignition engines used in non-road applications. The current provision in Directive 98/70 whereby a Member State may seek permission to have more stringent environmental specifications for petrol and/or diesel in specific areas within its territory for air quality reasons has now been extended to include risks to groundwater pollution.

3.2. Parliament's amendments accepted in full, in part or in principle by the Commission and incorporated in full, in part or in principle in the Common Position

Amendments 1, 2, 4, 6, 7, 8, 9, 13, 16, 28, 29, 30, 34, 35, 44, 47 & 48

Amendment 1 improves the clarity of the text by highlighting the importance of the sulphur content in fuel used in both on road vehicles and in the case of non road mobile machinery and is reflected in Recital 5.

Amendment 2 more accurately reflects the titles of directives referred in Recital 6 and is reflected in that recital.

Amendment 4 emphasises the effect that the fuel with a maximum sulphur content of 10 mg/kg will have on emissions of carbon dioxide (CO2) and conventional pollutants in view of new emerging vehicle technology. It also states that sulphur along with other fuel parameters are equally important in the case of non-road mobile machinery. In Recital 7 the Common Position accepts this point in the case of sulphur for fuel used in on road vehicles and states that it should be studied in the case of fuel used in non-road mobile machinery.

Amendment 6 highlights the role that fiscal incentives can play in moving consumer demand toward more environmentally friendly fuels and is reflected in Recital 8.

Amendment 7 stresses the need to take into account the move toward petrol and diesel with a maximum sulphur content of 10 mg/kg in the review in 2003 of the voluntary agreements with the major auto manufacturers to reduce CO2 emissions from vehicles and is reflected in Recital 9.

Amendment 8 is in part reflected in Recital 10 to the extent that it improves the text referring to the maximum sulphur content. However, that part of the amendment referring to the mandatory availability of all grades of petrol with a maximum sulphur content of 10 mg/kg is not reflected in the Common Position and was not acceptable to the Commission.

Amendment 9, which included a recital pointing to the need to allow the continued marketing of regular unleaded petrol, is reflected by the provision in footnote 3 of Annex I and III.

Amendment 13 is in principle reflected in Recital 14 in that the fuel quality monitoring systems foreseen will achieve the same objective sought by the amendment.

Amendments 16 and 48, which point to the need for further evaluation of alternative fuels, bio-fuels and the need for specific legislation are reflected in Recital 17 and Article 1, point 6, paragraph 1, sub paragraph (g) .

Amendment 28 on reporting from the Member States is in principle reflected in Article 1, point 5, paragraphs 2 and 3 while Amendment 29 on the need for the Commission to publish results of fuel quality monitoring is reflected in Article 1, point 5, paragraph 4.

Amendment 30 which proposes to bring forward the next review of the directive by the Commission is reflected in part in Article 1, point 6, paragraph 1.

Amendment 34 points to the need to take into account the reduction in the sulphur content of petrol and diesel from 50 to 10 mg/kg in the review of the voluntary agreements on CO2 emissions with the major auto producers. This is reflected in principle in Article 1, point 6, paragraph 1, sub- paragraph (d).

Amendment 35 reinstates the possibility for Member States to continue to permit the marketing of regular unleaded petrol with a minimum Research Octane Number of 91. The Common Position provides in footnote 3 of Annex I and III for those Member States that are currently permitting the marketing of this petrol to continue to do so.

Amendments 44 and 47 highlight a number of issues, including the use of metallic additives in petrol, that may have an impact on the functioning of abatement equipment and consequently on vehicle emissions. These are reflected in summary form in Recital 17 and in Article 1, point 6, paragraph 1, sub-paragraph (f) respectively.

3.3. Parliament's amendments not accepted by the Commission and not included in the Common Position

Amendments 3, 5, 10, 11, 12, 15, 18, 19, 20, 21, 23, 24, 25, 26, 27, 32 & 37

Amendments 10, 19 and 27, which proposed that Member States should have an automatic right to promote the early introduction of petrol and diesel with a maximum sulphur content of 10 mg/kg through the use of fiscal incentives, were not accepted by the Council due to incompatibility with the legal basis for this proposal and existing provisions in Community legislation.

Amendments 20, 21, 24, 25 which proposed to delete the possibility for a Member State to seek derogation from the obligation to market petrol and diesel with a sulphur content less than 50 mg/kg from 1 January 2005 for up to two years were not accepted.

Amendments 3, 12, 26 and 37 which relate to proposing that diesel used in non-road mobile machinery should meet the same environmental specifications as on-road diesel from 1 Jan 2005 were not accepted. The Council did however invite the Commission in Article 1, point 6, paragraph (2) to establish the necessary specifications required for diesel when considering the next stage of emission standards for compression ignition engines used in non-road mobile machinery.

Amendments 5, 11, 15, 18, 23 and 32, which dealt with advancing the final date after which all petrol and diesel sold must comply with a 10 mg/kg maximum sulphur content to 1 Jan 2008, eliminating the possibility for the Commission to confirm the final date in the case of diesel and providing for the possibility of derogation due to socio-economic considerations, are not reflected in the Common Position. The Council did however agree to advance the final date to 1 Jan 2009 but maintained the possibility for the Commission, to confirm the date in the case of diesel, no later than 31 December 2005

3.4. Parliament's amendments accepted by the Commission and not reflected in whole or in part in the Common Position of the Council

Amendments 42/45 & 43/46

Amendments 42/45 and 43/46 proposed that the Commission should identify, via a Comitology procedure, criteria to determine what would constitute the availability of 10 mg/kg petrol and diesel on a balanced geographic basis during the introductory phase. While these amendments had been acceptable to the Commission, they were not acceptable to the Council, where it was felt that the divergence of local circumstances would mitigate against the development of such common criteria.

3.5. New provisions introduced by the Council

Expanded basis to justify more stringent environmental specifications

The Council has decided to extend a previous provision in Article 6 of Directive 98/70/EC, which currently allows Member States, subject to a Community control procedure, to require only the marketing of fuel with more stringent environmental specifications in certain parts of a Member States for reasons of atmospheric pollution, to include reasons related to groundwater pollution.

4. CONCLUSIONS

The Common Position was agreed to unanimously by Council. The provisions are broadly in line with the Commission's proposal although the final date after which all petrol and diesel sold in the Community shall be subject to a maximum sulphur content of 10 mg/kg has been advanced by 24 months to 1 Jan 2009. In the case of diesel the final date of 1 Jan 2009 for complete market switchover to 10 mg/kg remains subject to confirmation in a review which will be completed by the Commission no later than 31 Dec 2005 instead of 31 December 2006 as originally proposed.

The Common Position will not detract from the environmental benefits of the Commission's proposal in the long term. In the near term, depending on technology developments, the earlier date for final market switchover may slightly alter the balance between air quality improvements and reductions of emissions of carbon dioxide. However, this can be taken into account in the review to be completed by the end of 2005. Thus the Commission can accept and support the Common Position.