EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The COVID-19 pandemic is causing major disruption which is impacting the motorcycle industry in the form of multiple shocks with on the one hand immediate disruption of production sites and of international value chains and on the other hand a sizeable drop in demand and increase of vehicles in stock. This has affected manufacturers’ ability to meet some of the deadlines imposed by Regulation (EU) No 168/2013 of the European Parliament and of the Council of 15 January 2013.

According to that Regulation, the pollutant emissions Euro 5 step will apply on 1 January 2021, which means that as of that date only vehicles meeting the Euro 5 requirements can be placed on the Union market.

However, due to the COVID-19 outbreak, motorcycles sales have been highly impacted. Usually, up to 60% of sales take place between March and July. Because of Member States authorities’ lockdowns, sales could not take place during the peak season. According to industry sources, it is estimated that around 553.700 Euro 4 vehicles were in stock in March 2020. During the lockdowns, sales went down by 98% and remained sluggish since then. It is therefore likely that not all Euro 4 vehicles currently in stock will be sold by the end of the year.

If Regulation (EU) 168/2013 provides for the possibility for manufacturers to sell so-called end-of series vehicles (i.e. ‘old stock’ vehicles that do not meet the latest requirements), this is limited in each Member State to maximum 10% of the average number of vehicles sold the two preceding years or 100 vehicles. The number of vehicles that can be registered as end-of-series is at the discretion of the Member States.

In the light of this disruption and given the number of vehicles in stock and the almost complete stop of sales at the peak of the 2020 season, the existing provisions on end-of-series do not constitute an appropriate mechanism to address this situation. The end-of-series provisions should therefore be adapted to allow dealers to sell higher amounts of their stock of Euro 4 vehicles in 2021 only.

This proposal will not increase pollutant emissions as the flexibility will be limited to already produced vehicles at the time of the lockdown. In addition, it also avoids the need to unnecessarily scrap vehicles that would have been otherwise placed on the market in absence of the crisis. This proposal will not postpone the entry into force of the Euro 5 step for all newly produced vehicles on 1 January 2021.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

Article 114 of the Treaty on the Functioning of the European Union

•Subsidiarity (for non-exclusive competence)

The subsidiarity principle applies since the proposal does not fall under the exclusive competence of the Union. As the proposal involves amendments to existing EU legislation, only the EU can effectively address the issues. Furthermore, the policy objectives cannot be sufficiently achieved by actions of the Member States. In order to allow for an EU vehicle type approval system, the technical requirements for the type-approval of motor vehicles with regard to safety and environmental elements must be harmonised at Union level. Action by Member States alone would undermine the whole vehicle type-approval system. European Union action is necessary because of the need to avoid the emergence of barriers to the single market. The proposal therefore complies with the subsidiarity principle.

•Proportionality