COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - Implementing the Community Strategy to Reduce CO2 Emissions from Cars: - Fourth annual report on the effectiveness of the strategy - (Reporting year 2002) [SEC(2004) 140]

1. Introduction

The Community's strategy to reduce CO2 emissions from passenger cars and improve fuel economy [1], [2] is based on the following three pillars:

[1] COM (95)689 final

[2] Council conclusions of 25.6.1996

(1) Commitments of the automobile industry on fuel economy improvements, aiming at achieving an average specific [3] CO2 emission figure for new passenger cars of 140 g CO2/km by 2008/9.

[3] The term "specific" is taken from the title of Decision 1753/2000/EC and is used in order to indicate that the CO2 emissions are expressed in grams per kilometre

(2) Fuel-economy labelling of cars [4] which aims at ensuring that information relating to the fuel economy and CO2 emissions of new passenger cars offered for sale or lease in the Community is made available to consumers, in order to enable consumers to make an informed choice.

[4] Directive 1999/94/EC relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars

(3) The promotion of car fuel efficiency by fiscal measures.

Support is given to pre-competitive research activities through the Community Research Framework Programme, with the objective to contribute to the reduction of CO2 through the development of advanced component, power train and vehicles technologies.

According to Article 9 of Decision 1753/2000/EC [5] the Commission has to report annually on the effectiveness of the strategy [6].

[5] Decision 1753/2000/EC of the European Parliament and of the Council establishing a scheme to monitor the average specific emissions of CO2 from new passenger cars

[6] Information concerning the Community strategy can also be found on the web site: http://europa.eu.int/comm/environment/co2/ co2_home.htm

2. Brief overall assessment

In total, considering all measures, at EU and national level, the average specific CO2 emission from passenger cars in the EU decreased in the period 1995 to 2002 from 186 g CO2/km to 166 g CO2/km [7], [8]. This corresponds to a reduction of 10.8 %. The Community's strategy to reduce CO2 emissions from passenger cars and improve fuel economy aims at achieving an average specific CO2 emission figure for passenger cars newly registered in the EU of 120 g CO2/km by 2005, and by 2010 at the latest. This corresponds to a reduction of 35 %. As already mentioned in the last report, it is unlikely that the Community target of 120 g CO2/km will be reached as early as 2005.

[7] For the first time, official EU data is used in this Communication. The data are delivered by Member States under Decision 1753/2000/EC. Prior 2002 monitoring was based on data provided by the associations. As mentioned in the last Communication there are slight differences between these data sets. The average specific CO2 emissions based on association data is 165 g CO2/km

[8] It should be mentioned that the CO2 figures shown in this report show the effect of all CO2 related measures taken in the Community. Article 10 of Decision 1753/2000/EC requires the Commission to report to Council and European Parliament by 2003/4 and 2008/9 about the reductions achieved by technical and by other measures. In 2002 the Commission launched a service contract in order to study this issue in greater detail. The results of this work will be part of the next year's Communication

To meet the Community target of 120 g CO2/km in 2010 would require achieving an average annual reduction of 3.5 % at EU level. This is significantly higher than what has been achieved on average between 1995 and 2002 (about 1.5 %). It was anticipated that the reduction would increase over time but it is clear that additional efforts have to be made in order to meet the target by 2010. However, as far as the Commitments are concerned the intermediate target was reached early by both ACEA and JAMA and we therefore consider that these associations are on track to meet their long term targets.

3. Progress made by the car industry with regard to their respective commitment.

Commitments have been made by the European (European Automobile Manufacturers Association - ACEA [9]) [10] the Japanese (Japan Automobile Manufacturers Association - JAMA [11]) and Korean (Korea Automobile Manufacturers Association - KAMA [12]) automobile associations [13]. Table 1 shows the detailed list of the most important manufactures/affiliations/brands that have been allocated to the respective association for the monitoring figures shown in this report.

[9] European car manufacturers in ACEA: BMW AG, DaimlerChrysler AG, Fiat S.p.A., Ford of Europe Inc., General Motors Europe AG, Dr. Ing. H.c.F. Porsche AG, PSA Peugeot Citroën, Renault SA, Volkswagen AG

[10] COM (98) 495 final

[11] Japanese car manufacturers in JAMA: Daihatsu, Fuji Heavy Industries (Subaru), Honda, Isuzu, Mazda, Nissan, Mitsubishi, Suzuki, Toyota

[12] Korean car manufacturers in KAMA: GM Daewoo Auto and Technology Company, Hyundai Motor Company, Kia Motors Corporation, Renault Samsung Motor Company, and Ssangyong Motor Company

[13] COM (99) 446 final

ACEA [14] // ALFA ROMEO, ALPINA, ASTON MARTIN, AUDI, BAYERISCHE MOTOREN WERKE , BENTLEY, CADILLAC, CHEVROLET, CHRYSLER, CITROEN, DAIMLER, FERRARI., FIAT, FORD, GENERAL MOTORS, JAGUAR, JEEP, LAMBORGHINI, LANCIA-AUTOBIANCHI, LAND-ROVER, MASERATI, MATRA, MCC (SMART), MERCEDES-BENZ, MINI, OPEL, PEUGEOT, PORSCHE, RENAULT, ROLLS-ROYCE, SAAB, SEAT, SKODA, VAUXHALL, VOLKSWAGEN, VOLVO

[14] It should be noted that although Rover, including MG, is no longer a formal member of ACEA, it has been agreed between Rover, ACEA and the Commission to incorporate Rover/MG in ACEA figures

JAMA // DAIHATSU, HONDA, ISUZU, LEXUS, MAZDA, MITSUBISHI, NISSAN, SUBARU, SUZUKI, TOYOTA

KAMA // DAEWOO, HYUNDAI, KIA, SSANGYONG

Table 1: List of most important manufacturers/affiliations/brands that have been allocated to the respective association for the monitoring figures shown in this report.

All three commitments constitute equivalent efforts, having the following main features:

(1) The CO2 emission objective: All commitments contain the same quantified CO2 emission objective for the specific average of new passenger cars sold in the European Union, i.e. 140 g CO2/km (to be achieved by 2008 by ACEA and 2009 by JAMA and KAMA).

(2) Means of achievement: ACEA, JAMA and KAMA commit themselves to achieving the CO2 target mainly by technological developments and related market changes.

In addition, "estimated target ranges" are set for 2003/2004 [15]. All associations have, as well, committed themselves to review in 2003 (ACEA and JAMA) or 2004 (KAMA) the potential for additional CO2 reductions "...with a view to moving further towards the Community objective of 120 g CO2/km by 2012".

[15] For ACEA 165 - 170 g CO2/km in 2003; for JAMA 165 - 175 g CO2 /km in 2003; for KAMA 165 - 170 g CO2/km in 2004

The commitments are subject to a thorough and transparent monitoring scheme. For this purpose an annual "Joint Report", one with each of the associations, is drafted and agreed between the parties. They are published in parallel to this Communication as SEC papers.

For the first time official EU CO2 monitoring data are used for calculating the 2002 figures [16]. In the past the associations have provided the underlying data.

[16] Article 8 of Decision 1753/2000/EC requires that the monitoring system from the year 2003 onward shall serve as the basis for the voluntary obligations agreed between the Commission and the automobile industry

The main findings for the reporting period 1995 to 2002 are:

- Taking official Member States' data in 2002 the average specific CO2 emissions of the fleets are 165 g/km for ACEA, 174 g/km for JAMA and 183 g/km for KAMA [17]. If ACEA's figures were taken the average specific CO2 emissions of this association was 163 g/km. (see Table 2).

[17] The question to what extend technological progress and related market changes, or other aspects like changes in consumer behaviour, e.g. due to taxation measures or car labelling, contributed to the observed reductions will be studied in 2004

- Compared to 1995 the average specific CO2 emissions have been reduced by 10.8% for ACEA (12.1% if using ACEA figures), 11.2 % for JAMA and 7.1 % for KAMA.

- Compared to 2001 all three associations reduced the average specific CO2 emissions of their cars registered for the first time on the EU market (ACEA by about 1.2 % [18], JAMA by about 2.5 % and KAMA by about 1.8 % [19]). Since 1995 the fuel efficiency improvements for diesel passenger cars are clearly better compared with gasoline vehicles.

[18] This reduction figure is based on ACEA data for 2001 and 2002. If ACEA's data for 2001 and the official EU data for 2002 were taken there would be no reduction. However, it can be assumed that this is mainly caused by the change in the database. If official 2002 EU data and unofficial 2001 EU data are compared the reduction percentage is about the same as identified when using ACEA's figures

[19] All 2001 and 2002 data are corrected by 0.7 % in order to take into account the change in the test cycle

- JAMA and ACEA show good progress, although ACEA's 2002 performance is lower than in the previous years. However, ACEA reached already in 2000 the intermediate target range envisaged for 2003, and is now at the very low end of this range. JAMA achieved in 2002 the upper end of the intermediate target range. Both associations can be considered to be on track.

- KAMA's progress is still unsatisfactory, although it has been catching up slightly in the last 2 years. There is a real risk that KAMA will not meet its 2004 intermediate target range of 165 to 170 g/km, seeing that only two years are left to close the gap of 13 g/km. This could affect the whole approach on CO2 [20]. However, KAMA has reconfirmed its commitment to meet its targets.

[20] It should be recalled that the Council invited the Commission "...to present immediately proposals, including legislative proposals, for consideration, should it become clear, on the basis of the monitoring and after consultation with the associations, that one or more of the associations would not honour the commitments made" (Council conclusions of October 1999)

- In order to meet the final target of 140 g/km additional efforts are necessary, as the average annual reduction rate of all three associations needs to be increased. On average the reduction rate must be around 2 %, or about 3.5 g/km per year 1995-2008/9. In the years remaining until 2008/9 the reduction rates must be on average 2.5 % for ACEA, 2.8% for JAMA and 3.4 % for KAMA. However, it was anticipated from the beginning that the average reduction rate would be higher in the later years (see Table 3).

>TABLE POSITION>

(1) Petrol and diesel-fuelled vehicles only, other fuels and statistically not identified vehicles are not expected to affect these averages significantly.

(2) For 2002 data from Member States is taken. For the 'change 95/02' the 95 data from the associations and the 2002 data from the Member States are taken. New passenger cars put on the EU market by manufacturers not covered by the Commitments would not influence the EU average significantly.

(3) The figures for 2001 and 2002 are corrected by 0.7 % for the change in driving cycle.

(4) Percentages are calculated from unrounded CO2 figures; for 2002 data from Member States is taken.

(5) The first figure is based one data from Member States; the second figure is based on data from ACEA.

(6) The first figure is based on 2002 data from Member States and 1995 data from ACEA; the second figure is based solely on data from ACEA.

Table 2: Average specific CO2 emissions of new passenger cars per fuel type, for each association and the European Union

The overall average CO2 emissions of new passenger cars registered in 2002 was lower in all Member States than 1995 and the years in between (see Figure 1). However, it should be mentioned that the reduction rates differ somewhat from country to country [21].

[21] No figure can be given for Greece and Finland for 1995 since data are not available

>TABLE POSITION>

* First figure is based on Member States' data; second figure is based on ACEA's figure

**Based on Member States' data

Table 3: Meeting the 140g/km target in 2008/2009

>REFERENCE TO A GRAPHIC>

1995 data as delivered by the associations; for 2002 the official EU data are displayed

2002 data are corrected by 0.7 % for cycle change adjustment

Figure 1: Average Specific CO2 emissions of new passenger cars in the EU and in Member States in 1995 and 2002 (weighted averages based on the data for diesel and gasoline vehicles) [22]

[22] EU 1995 does not include data for Greece or Finland because of insufficiency of available data. For 2002 these two Member States are included

All associations increased further the share of diesel cars in their respective sales within the reporting period (see Table 4). This was predicted for the short-term. For the 2008/9 target it was understood that the associations would not meet it by a simple increase in the diesel share only, but by technological developments and market changes linked to these developments. [23] In this respect it is important to note that the Council invited the Commission "...to make continued efforts to significantly reduce nano-particulate emissions, and in particular devise a new measuring procedure for private cars, light duty vehicles and heavy duty vehicles taking into account the results of recent studies into the health effects of nano-particulate emissions..." [24]. Recently the Commission started work on EURO 5 emission limit values to be applicable around the year 2010. It can be expected that, inter alia, the limits for particle emissions and other gaseous pollutants will be tightened. In parallel an increasing number of manufacturers have declared that they intend to equip their diesel passenger cars with a particle filter. Moreover, in the past, ACEA raised uncertainties associated with the introduction of gasoline direct injection technology. This technology was supposed to break the strong trend towards diesel powered passenger cars. These developments must be considered when looking at a further "dieselisation" of the EU passenger car fleet.

[23] The three "Joint Reports" do not address this complex question of market changes further

[24] Council conclusion of 18/19.12.2000

The ACEA figures given in this Communication include Rover/MG. However, since Rover/MG - which was initially covered by the Commitment as part of BMW- is no longer an ACEA member, ACEA has stated that the association cannot take any responsibility for Rovers CO2 achievements up to 2008.

This is the first time that a change in membership has occurred. The Commission will make every effort to ensure that changes in the membership will neither have negative repercussions on the integrity of the Commitments nor on the level playing field.

>TABLE POSITION>

(1) New passenger cars put on the EU market by manufacturers that are not covered by the commitments do not affect the numbers significantly

(2) The change over the period 1995 to 2002 for gasoline and diesel driven cars represents the change in the absolute share of each fuel type of total registrations. The change for the total cars is the growth or drop in absolute new registrations. The change in total cars represents the growth in the EU-15 new registrations over the period

(3) Totals include statistically unidentified vehicles and vehicles using 'other fuel' types

(4) For 2002 the data provided by Member States is taken

(5)The total registration figure given in the table for 2002 is based on Member States data. They exclude a number of vehicles, e.g. those to which no CO2 value could be associated. The total registrations reported by the associations are about 500.000 vehicles higher. This has no significant impact on the displayed petrol/diesel share

Table 4: Trends in composition of new cars registered on the market, for each association and the EU

As already mentioned all associations declared in their respective commitment that they would meet the final target by mainly technological developments and market changes linked to these developments. Such developments contributed indeed to the reductions achieved so far (mainly the introduction of High Speed Direct Injection Diesel (HDI) engines and to less extent by the introduction of Gasoline Direct Injection (GDI) engines, Continuously Variable Transmission, (CVT), Variable Valve Lift (VVL), as well as other technical improvements, and Alternative Fuelled Vehicles (AFVs) as well as Dual Fuelled Vehicles (DFV)). Since the year 2000 ACEA and - to a lesser extent - JAMA introduced passenger cars emitting 120 g CO2/km or less (meeting one of the commitments). ACEA reached over 580 000 and JAMA about 44 000 registrations of such cars in 2002. KAMA is still to introduce such models on the market.

With regard to the assumptions underlying the commitments the associations continue to draw attention to a number of issues they consider as negative for CO2 reduction measures (see Joint Reports). Among other issues mentioned already in the past, ACEA drew attention to the difficult economic situation of the car industry. The Commission shares the view raised by ACEA that the economic situation in Europe has been rather sluggish lately and that this might have an impact on the financial performance on the auto industry and on consumers. If these conditions continue over a longer period it may affect industry's possibilities to get new technology to market. However, ACEA confirmed that the currently experienced economic situation will not change its Commitment to reach its CO2 target in 2008.

Apart from the work on fiscal measures (see chapter VI), the 2003 review (2004 for KAMA) will be of major importance for the further development of the Community strategy. Presently there are no legal requirements which oblige industry to reach 120 g CO2/km by 2012 or any other date but according to the text of the Commitments, as well as the Commission's Recommendations, ACEA and JAMA shall in 2003 "... review the potential for additional CO2 reduction, with a view to moving further towards the Community's objective of 120 g CO2/km by 2012". Informal consultation between ACEA and the Commission and JAMA and the Commission started in September 2003. Both, ACEA and JAMA have declared their intention to present the result of their respective review by December 2003 at the latest. Irrespective of the outcome of the review mentioned above, in the monitoring year 2003 (2004 for KAMA) comparisons between actual achievement and "estimated target ranges" [25] will be carried out, as a part of the "Major Review". This "Major Review" will address, in addition, questions related to the assumptions of the Commitments. In addition, as requested by Article 10 of Decision 1753/2000, the Communications for the intermediate target year (monitoring year 2003 for ACEA and JAMA, and 2004 for KAMA) will address questions related to the reasons for the observed reductions. It has to be thoroughly assessed whether the reductions registered are due to technical measures taken by the manufacturers, or due to changes in consumer behaviour.

[25] For ACEA 165 - 170 g CO2/km in 2003; for JAMA 165 - 175 g CO2/km in 2003; for KAMA 165 - 170 g CO2/km in 2004

4. Implementation of Decision 1753/2000/EC

The so-called "Monitoring" Decision came into force on 30 August 2000. The data collected under this Decision have, for the first time, been used in 2002 as official data for the monitoring of the voluntary commitments by the automobile industry to reduce emissions of CO2 from passenger cars. All Member States delivered data for 2002, although some were quite late.

In order to identify and solve potential problems associated with the implementation of the Decision the Commission - in application of Articles 3 and 6 of the Decision - established an expert group in 2001. To support the group the Commission launched a study aiming at improving the data transfer and identifying potential data inconsistencies. The group has met four times and made progress on a number of methodological and data transfer issues.

The first two deliveries by Member States (2000 and 2001) were mainly used to compare the data with those submitted by the car manufacturers' associations joint monitoring reports. It should be recalled that the associations in their reports have used CO2 statistics supplied by the AAA (Association Auxiliaire de L'Automobile - ACEA and KAMA) or by Marketing Systems (JAMA).

However, with official EU data becoming available, a discontinuity from the past data series exists and because of underlying differences (see below) it is not correct to simply adjoin official data for most recent years, onto the associations' historical data.

The main dimensions of this discontinuity are:

Country Coverage: The EU data for 2002 covers 15 Member States. Whereas, ACEA's and, apart from 2001, KAMA's CO2 data has never included Greece, and has not until recently included Finland; JAMA's data cover all Member States.

Methodology Differences: AAA and Marketing Systems link registrations to their own, highly analysed, vehicle specification information bank, which is then used for all Member States' registrations. For EU data, each Member State has its own vehicle specification set, to which it links its national registrations; national variations in these vehicle specifications exist. This could cause small differences in the overall results as well as in some of the more detailed trend analysis data.

Registration Data Differences: The official EU data seems to miss a sizeable percentage of new car sales. In 2002, the difference is about 500 000 vehicles (equal to 4 % of total registrations) [26]. It should also be noted that EU data disregards car registrations with no CO2 data provided, whereas if no CO2 information was available in the case of association data, and the data provider were unable to close the data gaps with the help of their own data, any such vehicles would be included under an "unknown" category.

[26] It should be noted that such a difference does not automatically lead to differences in the calculated CO2 averages. This would be only the case if the characteristics of the missing data deviate systematically from the characteristics of the total fleet

Grey Area Problem: ACEA believes that some Member States register vehicles in accordance with the fiscal regime (commercial or private vehicle), not in accordance with M1/N1 category definitions. This issue needs to be studied further.

Data Scope: The official EU data covers - as laid down in the Commitment - the CO2 emissions of cars using all fuels, including AFVs. The associations' CO2 data has consistently been on the basis of petrol and diesel cars [27].

[27] It should be mentioned that the number of AFV was so small in the past, and still is, that these vehicles are negligible for the calculated CO2 average

Currently the variance between EU and association data in terms of the overall average CO2 figure is only a little more than 1% for ACEA and about 0.1 % for JAMA [28]. The Commission invited the car manufacturers' associations to clarify some of these issues by establishing direct contacts between their data providers and the responsible national organisations. Some work on comparability of data was done on 2002/2003 but only little progress could be made for cost reasons and for reasons of commercial confidentiality claimed by the data providers. The work on data quality will be continued and it is expected that over the long-term data differences should narrow.

[28] KAMA did not collect own data for the monitoring in 2002

5. Implementation of Directive 1999/94/EC

The "Labelling" Directive was adopted on 13 December 1999; the implementation by Member States was required by 18 January 2001. By the end of October 2003 all Member States but Germany had implemented the Directive. Under Article 226 EC, the Commission has brought the case to the Court of Justice which has delivered its ruling on 24/09/2003 [29].

[29] C-74/02

In 2003 Annex III of the Directive has been amended [30] and the Commission published a Recommendation with regard to "other media" [31].

[30] O.J. L 186/34 of 25.07.2003

[31] O.J. L 82/33 of 29.03.2003

The Commission now awaits Member States' reports under Article 9 - which are due by 31 December 2003 [32] - in order to study the need for further steps, e.g. how to address best the other issues still to be solved as mentioned in Article 9.

[32] Article 9 of Directive 1999/94/EC reads: "Any amendments which are necessary in order to adapt the Annexes to this Directive shall be adopted by the Commission in accordance with the procedure set out in Article 10 and following consultation with consumer organisations and other interested parties.

6. Work on fiscal measures

6.1. Vehicle related work

In 2002 the Commission published the results of its work on fiscal framework measures [33]. Focusing on registration (RT) and annual circulation taxes (ACT) the Commission concluded that:

[33] COM(2002)431 final

* Fiscal measures are an important complementary instrument to support the realisation of the EU-target of 120 g CO2/km for new cars by 2005, and 2010 at the latest, and to contribute to the accomplishment of the EU engagements under the Kyoto Protocol;

* National vehicle taxes should establish a more direct relation between tax level and the CO2 performance of each new passenger car. Vehicle tax differentiation has been identified as an important parameter for improving the average fuel consumption of newly registered cars. Existing vehicle taxes should be replaced by taxes fully based on CO2 emissions or, a CO2 sensitive element should be added to existing RT and ACT. Add-on elements would also allow taking into account other national environmental objectives, e.g., the early introduction of EURO 4 standards.

The European Parliament reacted positively to the Communication [34]. The Council started discussions in May 2003; they are still not finalised.

[34] Report A5-0265/2003, adopted by the EP on 6 November 2003

6.2. Fuel related work

Although currently not directly related to the Community Strategy to reduce CO2 emissions from cars it might be of interest to take note of Directive 2003/96/EC which the Council adopted in October 2003. This Directive is restructuring the Community framework for the taxation of energy products and electricity. It established higher or introduces new minimum levels of taxation for a number of energy products and provides incentives for the promotion of the use of more environmentally friendly energy products. In the long run this work could gain importance for the CO2 and cars strategy, e.g. if more cars switched to electricity or hydrogen as an energy source.

7. Other related measures

The Environment Council conclusions of 10 October 2000 requested the Commission to study emission reduction measures on light commercial vehicles (LCV, in technical terms equal to

category N1 vehicles [35]) and mobile air conditioning systems used in passenger cars [36]. In the following the state-of-play of the work is presented.

[35] N1 vehicles are defined as vehicles used for the carriage of goods and having a mass not exceeding 3.5 tonnes

[36] The Environment Council of 10 October 2000 concluded, that

7.1. Light Commercial Vehicles

Light commercial vehicles are the third largest category of on-road CO2 emitters after passenger cars (PC) and heavy-duty vehicles (HDV). In the year 2000 LCV accounted for about 13 % of total on-road CO2 emissions, emitting about 90 Mt CO2. On current trends, it is predicted that these emissions will increase both in absolute and relative terms in the coming decade [37].

[37] Year 2000 figures. Passenger cars account for about 420 Mt and heavy duty vehicles, including buses for about 200 Mt. For details, see European Environment Agency: National and central estimates for air emissions from road transport. Technical Report 74

Standardised rules and procedures for the measurement of CO2 emissions are a prerequisite for studying, developing and implementing emission reduction policy options for LCV. For this reason, the Commission adopted in 2001 a proposal concerning the measurement of CO2 emissions and fuel consumption of light commercial vehicles [38]. Under this proposal fuel consumption and CO2 emissions for these vehicles would be determined, for type approval purposes, more or less in the same way as for M1 (passenger) vehicles. In September 2002, this proposal passed the 1st reading in the European Parliament and the Council's Common Position was adopted September 2003. The European Parliament is likely to accept the Common Position in December 2003 in which case the act would be deemed to be adopted in accordance with the Common Position.

[38] Proposal for a Directive of the European Parliament and the Council amending Council Directives 70/156/EC and 80/1268/EEC as regards the measurement of carbon dioxide emissions and the fuel consumption of N1 vehicles. COM(2001)543 final

The amendments made to the Commission's proposal by the two institutions are significant in so far as they propose to set a later date for the implementation of mandatory CO2 and fuel consumption measurements: 2009, compared to the 2007 in the Commission's proposal. Full information on class I vehicles, including multi-stage vehicles, would be required from 1.1.2007 onwards. Full information on classes II and III vehicles, including multi-stage vehicles, would be required from 1.1.2009. The information on measured consumption and CO2 figures of registered N1 vehicles as such would be available one year later, i.e. 2008 for class I vehicles and 2010 for classes II and III vehicles.

The Council and European Parliament also incorporated possibilities to group vehicles together into families. This grouping - in conjunction with the "6% derogation" rule [39] - has unclear repercussions on the accuracy of the CO2 and fuel consumption values finally reported for a particular vehicle type or version or variant. Therefore, one amendment requests the Commission to study the repercussions of the "grouping together" concept as well as of some of the other incorporated amendments within two years of the entry into force of the Directive, with the aim to present, if appropriate, measures for the adaptation of the Directive to technical progress.

[39] According to point 11.1 of Annex I to the draft amendment the type-approval can be extended to vehicles from the same type or from a different type differing with regard to the characteristics reference mass, maximum authorised mass, overall gear ratios and engine equipment and accessories, if the CO2 emissions measured by the technical service do not exceed by more than 6 % for vehicles of category N1 the type-approval value

The Commission has recently carried out an initial study on options for CO2 emission reduction and policy development for LCV - covering the period 2005 to 2015 - with close stakeholder involvement. The results of this study are now available [40]. The main conclusions are:

[40] "Preparation of measures to reduce CO2 emissions from N1 vehicles", study carried out by RAND Europe, Institut für das Kraftfahrtwesen Aachen, Tansport&Mobility Leuven

The N1 market: Around 20 million N1 light commercial vehicles are estimated to be on the market. There has been a steady growth of newly registered N1s from just above 1 million in 1995 to over 1.5 million in 2000. ACEA has a market share of around 90% of N1 vehicles, JAMA about 6-8%, and KAMA holds most of the remaining 2-4%. Diesel engines dominate the majority of the N1 vehicle market with around 95% penetration of new sales.

Expected future market trends: Sales of N1 vehicles in the EU are expected to grow by 2% annually. The future shares of the subclasses remain uncertain. A continuation of the trend seen 1995 to 2000 would further increase the share of classes II and III.

Development of CO2 emissions: As CO2 emissions of N1 vehicles are not yet included in the EU test procedures, no reliable base data exists. Therefore - according to the study - only a few estimates are available from a broad range of sources. The estimates suggest that the specific CO2 emissions of new N1 vehicles in recent years have been decreasing. In this respect it should be noted that the AUTO OIL II scenarios [41] predict an annual reduction of the specific CO2 emissions of N1 vehicles of about 1.2 %. At the time the figure was approved by the car industry, and can be taken presently as the best indicator of expectations about future technology development. In comparison, the required annual CO2 reduction figure for passenger cars under the CO2 Commitments is about 1.9 %. As far as future CO2 emissions are concerned, estimates show that - in a business as usual scenario, and keeping the market shares of the three subclasses constant - the emissions of new N1 vehicles are likely to increase from about 9500 Kt in 2005 to 11500 Kt in 2015.

[41] COM(2002)626 final

Driving forces in the market: According to manufacturers the priorities of customers when buying N1 vehicles are in the following order: cost of ownership, functionality, robustness, safety and dynamics. Since incremental savings due to improved fuel-efficiency are a relatively small part of the total costs of ownership, they are not likely to play the major role in decision making, neither for customers nor for manufacturers.

Technology options: A large number of currently available technologies have been identified which could reduce fuel consumption and CO2 emissions of N1 vehicles - see Table 5. While the figures on CO2 savings are considered as quite reliable, the cost estimates are less certain. They are based on a literature review of costs for the end-consumer. It is realistic to assume that the actual costs for the manufacturers are significantly lower. As a rule, it is estimated that the production costs are by a factor of 2 to 3 lower than the prices for the end consumer. However, the actual costs for the end-consumer are ultimately a question of competition and marketing so it is an important factor for the manufacturers.

>TABLE POSITION>

Table 5: Possible CO2 savings in 2010 and estimated technology costs, expressed in consumer prices

Scenario calculations: Based on the identified technology options and costs, the study developed two scenarios, a realistic one and an optimal one, in order to assess

the future evolution of CO2 emissions and associated specific costs [42]. Table 6 shows the results of these investigations. If the realistic technology options were applied for all cars sold in 2005, CO2 emissions would be reduced by 6.7 % from 9550 Kt to 8910 Kt. If the optimal technology options were applied the reduction would be 13.3 %. In 2010 the figures are 11.3 % and 23.1 % respectively for the two options. In 2015 the figures are 22.8 % and 28.5 %. All these reduction figures are in relation to the business-as-usual scenario. It should be mentioned that the annual reductions assumed for the 'realistic scenario' are very close to the reduction rate incorporated in AUTO OIL II. That means they are in line with the future technology expectations of the AUTO OIL II expert groups.

[42] The study group estimated the base case CO2 emission for years 2005, 2010 and 2015 using the TREMOVE model. They first estimated the total and new N1 fleet numbers, then the CO2 emissions for new vehicles by class. With this as a basis the technology options were evaluated. The base case for CO2 emission is based on extrapolating the current fleet and current technologies. The average kilometres driven are estimated to go up only slightly from 19,738 in year 2000 to 20,016 km by 2015. Finally, CO2 emissions reductions associated with different scenario settings were calculated

>TABLE POSITION>

* The abatement costs include investment costs (see Table 5) and fuel savings, taking into account estimated future fuel prices

** Please note: the increase of emissions from 2010 to 2015 is due to the expected increase in the number of new N1 vehicles within this period of time

Table 6: CO2 emissions and annualised specific abatement costs in 2005, 2010 and 2015 for two scenarios, taking into account investment costs and fuel savings

Cost-effectiveness considerations: According to this study an analysis of the two technology options shows that figures for cost-effectiveness range between a saving of 18 EURO per tonne abated, up to a cost of about 54 EURO/tonne abated, depending on the scenario. Table 6 sets this out in more detail, based on the costs for consumers shown in Table 5. For comparison a benchmark figure between 20 and 50 EURO/tonne is mentioned in the European Climate Change Programme as an indicator of cost efficiency [43], [44].

[43] A common feature of the different ECCP working groups was the identification of a criterion "below 20EUR/t CO2eq" and "below 50EUR/t CO2eq." as a benchmark to evaluate the cost-effectiveness of each potential measure. However, it should be mentioned that the ECCP cost criterion is only used for measures for the first commitment period. For technology to be introduced in 2015 future costs-efficiency assessments might come to different conclusions

[44] ECCP report of March 2003. However, the 20 to 50 EURO/tonne should not be regarded as a strict cut-off point but, taking into account the uncertainties related to the specific implementation, gives a general indication of the cost-effectiveness of a certain measure, while other considerations (for instance benefits related to security of supply, related to other environmental issues or in the longer term,) need to be taken into account as well. Other common criteria for the cross-sectoral assessment and comparison of measures were the time frame for implementation and the impact on other policy areas, see Second ECCP Progress Report: "Can we meet our Kyoto targets?"

The specific costs depend, inter alia, on the vehicle class. Most cost efficient are measures implemented in class I vehicles, followed by the combination of technologies applied in both classes I and II. For some of the scenarios - in particular for the more demanding measures for the sub classes II and III, envisaged to be taken in 2010 and 2015 - the costs would be slightly above the 50 EURO/tonne cut.

The work on N1 vehicles is inconclusive and has not yet been finalised. It is therefore too early to present final policy options.

Nevertheless, in the light of the findings up to now the Commission is considering measures. Among these are:

- the introduction of labelling requirements similar to those which have been introduced for M1 vehicles (see Directive 1999/94/EC),

- the monitoring of emission trends for N1 vehicles (see Decision 1753/2000/EC),

- CO2 emission reduction measures for N1 vehicles

The timing of implementation of these measures will depend on the outcome of discussions at Council and European Parliament level on the proposed amendments to Directive 80/1268/EEC and the results of additional studies to be carried out in the coming years.

Measures concerning CO2 emission reductions from light commercial vehicles can only be considered when we have comprehensive and reliable emission data, measured in accordance with the proposal concerning the measurement of CO2 emissions and fuel consumption of light commercial vehicles.

To attain more information on the issues mentioned above the Commission decided to launch a follow-up study focussing on

i measuring, in accordance with the amended Directive 80/1268/EEC, the fuel consumption and the CO2 emissions of a representative number of light commercial vehicles,

ii addressing the questions listed by Council and the European Parliament in Article 3 [45] of the amended Directive 80/1268/EEC, as applicable to category N1 vehicles, and

[45] This new draft Article requests the Commission, not later than two years after the entry into force of this Directive, to:

iii developing further the evaluation of policy options for reducing emissions from this category or its subclasses, including Candidate Countries.

The result of this study will be available by the end of 2004.

7.2. Mobile Air Conditioning

The Commission started work on mobile air conditioning focusing on possible options to (i) measure and, if possible, reduce the additional fuel consumption and related CO2 emissions, and (ii) to reduce emissions of the coolant (HFC-134a). Both activities are part of the European Climate Change Programme [46]. The results of the work on the coolant are presented elsewhere [47].

[46] COM(2001)580 final

[47] COM (2003)492 final

With regard to fuel consumption there is growing evidence that the use of air conditioning systems in passenger cars could add significantly to CO2 emissions. This is a source not covered by the existing legislation on fuel consumption and CO2 emission measurements and therefore not covered by the Commitments of the car industry [48]. Estimates show that the additional emissions are in the range of 3 to 8 % [49]. Moreover, there seems to be a potential to reduce the impact on fuel consumption of the use of the equipment by about 50 %.

[48] The Commitments specify that new car CO2 emissions will be measured according to Directive 93/116/EC, which is the basis on which the targets were established. This test does not include the use of mobile air conditioning. In any case changes of the test procedure, as happened last time with Directive 99/100/EC, need to be taken into account in the monitoring of the CO2 Commitments by correcting the measured CO2 emissions in order to bring them into line with the 93/116/EC procedure. The last correction made is the 0.7 % adjustment mentioned in the footnote of Table 2

[49] "Options to reduce Greenhouse Gas Emissions due to Mobile Air Conditioning" Summary of discussions of the 'MAC Summit' held in Brussels on 10/11/ February 2003.

Again, a prerequisite for studying the impact of the use of air conditioning systems are reliable test procedures. Therefore the Commission aims at finalising the work as quickly as possible, while striving to establish internationally harmonised test procedures, where appropriate.

8. Conclusions

The Community's strategy to reduce CO2 emissions from passenger cars and improve fuel economy aims at achieving an average specific CO2 emission figure for passenger cars newly registered in the Community of 120 g CO2/km by 2005, and by 2010 at the latest. The specific CO2/km value achieved in the calendar year 2002 was 166 g CO2/km [50], compared to 186 g CO2/km in 1995, the reference year of the Community strategy. While it is unlikely that the 120 g CO2/km target would be met as early as 2005, it remains realistic to meet the objective by 2010 if the necessary measures are taken and all efforts are made. It is important that ACEA and JAMA achieved early their intermediate target set for 2003.

[50] Figure based on official EU data

It seems clear that to achieve the overall target the implementation of all three pillars of the strategy will be necessary. The recently published Communication of the Commission on passenger car taxation presents, inter alia, options for taxation schemes that can support the Community Strategy to reduce CO2 emission. In addition the results of the 2003 [51] review of the potential for additional CO2 reductions by the manufacturers' associations with a view to moving further towards the Community's objective of 120 g CO2/km by 2012 will be of great importance.

[51] 2003 for ACEA and JAMA, 2004 for KAMA

The implementation of the commitments by the car industry shows good progress. However, in order to meet the final target of the Commitments (140 g CO2/km) all three associations have to increase their efforts to a greater or lesser extent. Based on the Joint Reports the Commission has no reason to believe that ACEA and JAMA would not live up to its respective commitment. With regard to KAMA there is valid reason to be concerned. Additional and significant efforts will be necessary by KAMA if it is to meet its intermediate target for 2004. This has been emphasised to KAMA and it has reiterated its determination to achieve the targets to which it has committed.

The implementation of Directive 1999/94 and Decision 1753/2000 made good progress and is nearly complete.

The Commission is continuing its work concerning CO2 emissions from light commercial vehicles and started to work on CO2 emissions due to the use of mobile air conditioning.

COMMISSION STAFF WORKING PAPER Monitoring of ACEA's Commitment on CO2 Emission Reductions from Passenger Cars (2002) Monitoring of JAMA's Commitment on CO2 Emission Reductions from Passenger Cars (2002) Monitoring of KAMA's Commitment on CO2 Emission Reductions from Passenger Cars (2002) - Final Reports 5 September 2003 {COM(2004) 78 final}

Monitoring of ACEA's Commitment on CO2 Emission

Reductions from Passenger Cars (2002)

Final Report 5 September 2003

Joint Report of the European Automobile Manufacturers Association and the Commission Services

Monitoring of ACEA Commitment [1] on CO2 Emission Reductions from Passenger Cars

[1] As recognized by the European Commission in the Recommendation of 5 February 1999 on the reduction of CO2 emissions from passenger cars (1999/125/EC). Hereafter referred to as "The Commitment".

JOINT REPORT OF ACEA AND THE COMMISSION SERVICES [2]: YEAR 2002 REPORT

[2] Hereafter often referred to as "The Commission".

ES SUMMARY OF PROGRESS IN DELIVERING THE COMMITMENT

E1 Trends in specific emissions of CO2 (g/km)

In 2002 - taking official EU data [3] - the average specific emissions of ACEA's new car fleet registered in the EU was 165 g/km. For petrol-fuelled cars, specific emissions were 172 g/km; for diesel-fuelled cars, the corresponding value was 155 g/km and for alternative fuelled [4] passenger cars the value was 177 g/km.

[3] According to the Joint Monitoring System prior 1995-2001 monitoring was based on data provided by ACEA which are broadly similar to those specified in Annex I of Decision 1753/2000/EC. In 2002 for the first time, official EU data is used in the joint monitoring based on data delivered by Member States under Decision 1753/2000/EC. Annex 2 contains comparisons of data from EU and ACEA sources, whenever appropriate.

[4] These are all vehicles not using diesel or petrol, e.g. LPG, CNG or electric power.

Compared to ACEA's 2001 data, ACEA reduced the average specific CO2 emissions of its new car fleet registered within the EU by about 2 g/km; a reduction of 1.2 % [5], [6]. This is about the same reduction rate identified when official 2002 EU data are compared with unofficial 2001 EU data [7]. Since 1995, ACEA has maintained an unbroken trend of CO2 emission reduction (see Figure 1 [8]).

[5] In the 2002 report ACEA data continues to be used in certain places, in particular where consistent longer-term trends contribute to a better understanding of CO2 reduction developments (and official EU data is not available to fulfil this role).

[6] All percentage figures are based on unrounded numbers.

[7] See COM(2002)693 final. Please note that the official EU data cover alternative fuels, ACEA data does not. However, in the light of the small number of alternative fuel vehicles registered this has no impact on the reported EU averages.

[8] Figure 1 shows in particular ACEA time-series data for 1995 to 2002. In the 2001 joint Monitoring Report, ACEA's 2001 CO2 figure was shown as 164 g/km. This figure included a cycle change correction factor (see Section 2.11) of 1 %; the Commission and ACEA have now agreed that the correction factor should be 0.7 %. This means that, using exact figures, ACEA's CO2 figure in 2001 was 164.5 g/km, or using the rounded figures normally quoted in this report 165 g/km (see Annex 2).

With official EU data becoming available, a discontinuity from the past data series exists, because of underlying differences (see Section 2.10). It is therefore not correct to simply adjoin official data for the most recent year, onto ACEA's historical data.

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Figure : EU Trends of ACEA members' fleet in average specific emissions of CO2; based on ACEA data [9]. For 2002 the official EU data are added. 2001 and 2002 data are corrected by 0.7 % for cycle change adjustment.

[9] Please note, ACEA figures do not include alternative fuels. The official EU data cover alternative fuels, e.g. they are included under "all" in Figure 1.

Using ACEA's 1995 time-series between 1995 and 2002, ACEA achieved an overall reduction in new car CO2 emissions of 12.1 %; petrol cars were down by 9.0 %, and diesel cars were down by 13.6 %.

E2 Trends in specific fuel consumption by fuel type (litres/100km)

Fuel consumption in terms of litres per 100 km (l/100km) has followed a similar downward profile to that of CO2 emissions. Over the 1995 to 2002 period, using ACEA's time-series data, average fuel consumption fell for new petrol and diesel cars combined from 7.6 l/100km to 6.5 l/100km [10]. The corresponding consumption reductions for new petrol cars and new diesel cars decreased from 7.9 l/100km to 7.2 l/100km and from 6.6 l/100km to 5.7 l/100km, respectively (see Figure 2).

[10] The following conversion factors were used for the calculation of specific fuel consumption (l/100km) from specific CO2 emissions (g/km): petrol 23.7, diesel 26.6.

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Figure : Trends of ACEA members' fleet in average specific fuel consumption (l/100km) by fuel; based on ACEA data. For 2002 official EU data are added. 2001 and 2002 basis CO2 data are corrected by 0.7 % for cycle change adjustment

E3 Trends in physical fleet characteristics

ACEA has achieved these sizeable improvements in new car CO2 performance whilst increases in physical fleet characteristics have occurred. Overall figures for average car mass, engine capacity and power increased in 2002, compared to 2001 (see Annex 2). However, based on ACEA's time-series data, some car characteristics decreased in 2002 compared to earlier periods; for example, petrol car mass (down on 1999) and diesel engine capacity (down on 1996).

E4 Technical developments introduced to reduce CO2 emissions

Technical developments introduced by ACEA manufacturers in 2002 included: fully variable valve lift & timing technology combined with GDI; variable intake control system on small gasoline engines; fast warm-up cooling systems; torque converter lock-up from 1st gear on automatic transmissions; application of low-viscosity/friction oil (engine and rear axle) across model-ranges; friction optimised rear axle differential; and engine covering/underbody panelling. 2002 also saw the increased application of: GDI, alternative-fuelled vehicles, VVT, 6-speed & automated manual gearboxes, electric power steering, lightweight materials, refined aerodynamics, rolling resistance improvements, and turbo-charged engines.

These advances reflect significant and continued efforts by ACEA manufacturers to introduce a wide range of technical and product developments to reduce CO2 emissions. According to ACEA the large-scale commercialisation of CO2 efficient technologies has brought to market new cars with attractive product attributes that have then induced market changes (such as diesel share growth following the launch of DI diesels etc.).

E5 Brief overall assessment on progress in relation to the target

In 2002, ACEA reduced the average CO2 emissions of its new car fleet. Taking the official EU data, the average specific emissions of ACEA's new car fleet registered in the EU was 165 g/km. ACEA's CO2 performance is consistent with achieving the 2003 estimated intermediate target range of 165 -170 g/km specified in its Commitment. ACEA has already met the first of its CO2 commitments ("some members of ACEA will introduce in the EU market, not later than 2000, models emitting 120 gCO2/km or less"). In fact, 2002 saw new registrations of cars emitting 120 gCO2/km or less rise sharply (even though car registrations in total fell by over 4 % [11]). The share of cars emitting 140 gCO2/km or less also rose in 2002, further evidencing ACEA's determination to meet its commitments.

[11] Based on ACEA data.

To meet its 2008 Commitment ACEA must increase its annual average reduction rate to about 4 g/km or 2.5 % a year during the remaining period of the Commitment. Based on ACEA's time-series data, to meet its 2008 Commitment ACEA must increase its annual average reduction rate to 2.3 % a year during the remaining period of the Commitment, from about 3 g/km or 1.7 % average annual decrease achieved since 1995. However, it should be noted that using ACEA's 1995-2002 data set, CO2 emissions have been cut from 185 g/km in 1995 to 163 g/km in 2002. Over recent years CO2 reduction rates have been higher than expected -- with diesel technology especially, being extremely well accepted in the EU market. The overall outcome is that in 2002 ACEA was almost half the way towards achieving its 2008 target.

ACEA stresses that compliance with the 2008 target remains extremely ambitious, both technically and economically.

In summary, the Commission Services and ACEA have no reason to believe that ACEA will not live up to its Commitment.

1. MONITORING OF TECHNOLOGICAL DEVELOPMENTS AFFECTING THE COMMITMENT

1.1. Commitment initiatives

1.1.1. Brief description of current R&D programmes

1.1.2. Other

The ACEA Commitment continues to ensure that right across the European automotive industry, CO2 reduction remains a high priority in R&D expenditures, as well as in product and process planning and development. The vast majority of this R&D effort is being undertaken independently, by each of the ACEA manufacturers freely pursuing their own policies and initiatives in this highly competitive area. It is not possible, for competitive reasons, to review individual manufacturer R&D programmes as part of the monitoring report.

In addition, however, ACEA and its sister body EUCAR are undertaking a collaborative, pre-competitive automotive R&D programme on medium and long-term technologies for CO2 reduction (as detailed in previous Joint Monitoring Reports). It seeks to use "Framework Programme" (FP) funding to launch collaborative projects between manufacturers, suppliers, research institutes and universities. The programme reflects the research interests of the participating companies, and serves to illustrate key areas of R&D activity. For the upcoming FP6, EUCAR has arranged its research into three areas: Fuels & Powertrain; Manufacturing & Materials; and Integrated Safety - and the first two cover CO2 reduction topics:

Fuels & Powertrain: integrated project proposals are being prepared on renewable (biomass) fuels, improved conventional powertrains, fuel cell powertrains and auxiliary power units, hydrogen storage.

Manufacturing & Material: integrated project proposals are being prepared for low weight vehicles using a mixed material approach, as well as methods and concepts on how vehicles are to be manufactured efficiently and environmentally sound in the future.

Section 4.5 provides a fuller summary of EUCAR's research activities.

1.2. Technological developments

1.2.1. Description of fuel efficiency characteristics of new technologies, alternative concepts

1.2.2. Availability of new technologies in the EU

1.2.3. Availability of alternative concepts passenger cars in the EU

1.2.4. Availability of low emission passenger cars (e.g. emitting 120 g/km or less) in the EU

Technical developments introduced by one or more ACEA manufacturers in 2002 included:

* fully variable valve lift & timing technology combined with GDI;

* variable intake control system on small gasoline engines (this employs a variable intake manifold in combination with a high rate of exhaust gas recirculation);

* fast warm-up cooling systems to reduce internal engine friction in warm-up;

* torque converter lock-up from 1st gear on automatic transmissions;

* application of low-viscosity/friction oil (engine and rear axle) across model-ranges;

* friction optimised rear axle differential;

* engine covering/underbody panelling; and 2002 also saw the increased application of: GDI, VVT, 6-speed & automated manual gearboxes, electric power steering, lightweight materials; refined aerodynamics; rolling resistance improvements (through better tyres &brakes), and turbo-charged engines.

In addition ACEA manufacturers continued their on-going development of alternative-fuelled vehicle technologies (CNG/LPG/bioethanol/biogas/electric/etc.), and 2002 saw a growth in sales of alternative-fuelled vehicles (AFVs).

These advances reflect significant and continued efforts by ACEA manufacturers to introduce a wide range of technical and product developments to reduce CO2 emissions. According to ACEA the large-scale commercialisation of CO2 efficient technologies has brought to market new cars with attractive product attributes that have then induced market changes (such as diesel share growth following the launch of DI diesels etc.).

Technical advances by ACEA manufacturers resulted in a continued upward trend in the market share taken by the most fuel-efficient cars. In 2002, based on ACEA data, ACEA first registrations of (petrol + diesel) cars with CO2 levels of 140 g or less, rose to 23.7 % of total registrations --up from a 23.0 % share in 2001 and a 2.6 % share in 1995. Further, ACEA continued to build on its Year 2000 achievement of the first of its CO2 commitments: "some members of ACEA will introduce in the EU market models emitting 120 gCO2/km or less". 2002 saw first registrations of cars emitting 120 gCO2/km or less rise by over 90 % on the prior year (even though car registrations in total dropped by over 4 %); first registrations of such cars totalled over 580 000 units, and they achieved an impressive 5 % share of new registrations, compared to only 0.7 % as recently as 1999. This technology driven trend to fuel-efficient cars directly connects to the provision in the ACEA Commitment on achieving the target mainly "by technological developments -- and market changes linked to these developments".

1.3. Description of market trends in physical fleet characteristics

Through its technical developments (see Section 1.2), ACEA has achieved sizeable improvements in new car CO2 performance whilst increases in other physical fleet characteristics have occurred. Overall figures for average car mass, engine capacity and power increased in 2002, compared to 2001. However, based on ACEA's time-series data, some car characteristics decreased in 2002 compared to earlier periods; for example, petrol car mass (down on 1999) and diesel engine capacity (down on 1996). Reduction of diesel engine capacities can mainly be attributed to direct injection technology, which has allowed lowering engine capacities.

ACEA provided some indication that new automotive regulations, introduced since 1995, have added to car mass, and therefore damaged fuel efficiency (see Section 4.2 of 2001 Joint Monitoring Report, for ACEA's estimate of adverse CO2 effects). However an in-depth analysis of the impact of new regulations needs still to be undertaken.

The Commission believes that the increases in vehicle weight that might have been as an effect of new legislation are, if at all, potentially small and would therefore be negligible for the average specific CO2 emissions

2. STATISTICAL MONITORING (1995-2002)

2.1. Trends in specific emissions of CO2 (g/km)

In 2002, taking the official EU data, the average specific emissions of ACEA's new car fleet registered in the EU was 165 g/km.

Compared to ACEA's 2001 data, ACEA reduced the average specific CO2 emissions of its new car fleet registered within the EU by about 2 g/km; a reduction of 1.2 % [12], [13]. This is about the same reduction rate when official 2002 EU data are compared with unofficial 2001 EU data [14].

[12] ACEA data used for 1995 since no official EU data exists for the period since 1995. The EU data is the official basis for the monitoring process. However, since EU and ACEA data are not fully consistent and comparable in all details, for trend analysis ACEA's 1995-2002 data are used. For this reason no percentage calculations using ACEA's 1995 data and EU 2002 data are shown in this report.

[13] All percentage figures are based on unrounded numbers.

[14] See COM(2002)693 final. Please note that the official EU data cover alternative fuels, ACEA data does not. However, in the light of the small number of alternative fuel vehicles registered this has no impact on the reported EU averages.

Since 1995, ACEA has maintained an unbroken trend of CO2 emission reduction. Using ACEA's 1995 time-series between 1995 and 2002, ACEA achieved an overall reduction in new car CO2 emissions of 12.1 %; petrol cars were down by 9.0 %, and diesel cars were down by 13.6 % (see Figure 3).

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Figure 3: ACEA's CO2 Reduction Index (1995=100); based on ACEA data. For 2002 official EU data are added. 2001 and 2002 data are corrected by 0.7 % for cycle change adjustment

2.2. Number of newly registered passenger cars

In 2002, ACEA new car registrations in the EU amounted to 12 044 461 units, using ACEA data, down over 4 % on the previous year [15]. ACEA's market share of total EU passenger cars was 86 % (including Rover [16]). Over the period 1995-2002 new registrations increased by 17.6 %.

[15] All figures given in this chapter are based on ACEA data.

[16] See Section 2.12

Petrol car registrations totalled 6 481 940 units in 2002, an 11.3 % decrease on the previous year. In 2002, such vehicles represented 53.8 % of total new car registrations by ACEA members. The number of diesel cars registered totalled 5 252 613 in 2002, which represented 43.6 % of total car registrations by ACEA members (see Figure 4). The number of cars equipped with other fuel types (AFVs) increased in 2002 (see Section 2.5).

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Figure 4: New Car Registrations by ACEA (million units)

2.3. Fleet composition

Figure 5 shows ACEA's fleet composition by CO2 categories for the year 2002, and the reference year 1995 (using ACEA data).

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Figure 5: ACEA's Fleet Composition by CO2 Categories (% share of total registrations) in 1995 and 2002

In 2002, ACEA's CO2-related fleet composition continued to show a strong move towards more fuel-efficient cars, with 140 g or below cars achieving a 23.7 % share of total (petrol + diesel) registrations in 2002 -- up from 6.8 % in 1998, and only 2.6 % in 1995 (see Figure 6). Over the 1995 to 2002 period new registrations of such cars has been multiplied by almost 10. By contrast, in 2002, there were sizeable falls in both the registrations and market share of cars with CO2 emissions of more than 160 g/km. Registrations of these cars fell by almost 8 % in 2002 on the prior year, and by over 40 % compared to 1995; as a proportion of total ACEA registrations, such cars decreased from 80.8 % in 1995, to 64.9 % in 1998 to reach 40.9 % in 2002.

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Figure 6: Change in ACEA's Fleet Composition by "aggregated CO2 Categories"

Figure 7 shows how ACEA shares of registrations have developed by CO2 category over the 1995-2002 period. As can be seen, ACEA achieved a clearly identifiable "wave-effect" towards enhanced new car fuel efficiency.

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Figure 7: ACEA's "wave-effect" of CO2 categories towards enhanced fuel efficiency (g/km)

2.4. EU trends in physical fleet characteristics

Trends in physical characteristics of ACEA's new car fleet are shown in Figure 8 below (see also Section 1.3).

>REFERENCE TO A GRAPHIC>

Figures 8: Physical ACEA Fleet Characteristics (1995=100)

Using ACEA time-series data, average car mass (petrol + diesel) rose in 2002, and since 1995 a 10.2 % increase in mass has occurred. For petrol cars, there was virtually no growth in mass, and compared to 1999, petrol car mass was down by 1 %. In 2002, diesel car mass maintained its recent upward trend.

Engine capacity for petrol and diesel combined increased very slightly in 2002; and over the 1995 to 2002 period has only shown a growth of 5.7 %. In 2002, petrol capacity rose marginally, and since 1995 has risen by only 1.6 %. Diesel capacity fell in 2002; this 2002 level is below that in 1996.

Engine power (petrol + diesel) rose in 2002, and since 1995, quite a strong increase has occurred, driven particularly by increased diesel power.

Through its technical developments (see Section 1.2), ACEA has achieved sizeable improvements in new car CO2 performance whilst increases in other physical fleet characteristics have occurred.

2.5. Trends in new technologies in the EU

As noted in Sections 1.2, 2002 saw the introduction or increased application by ACEA manufacturers of a wide range of technical developments to reduce CO2 emissions. Within these reduction efforts, ACEA manufacturers continued their on-going development of alternative-fuelled vehicle technologies (CNG/LPG/bioethanol/biogas/electric/etc.), and 2002 saw a growth in sales of alternative-fuelled vehicles (AFVs). See Figure 9 for AFV sales developments since 1995, based on ACEA data.

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Figure 9: ACEA sales of Alternative-Fuelled Vehicles (units)

2.6. Trends in low emission passenger cars in the EU

In 2002 ACEA built further on its Year 2000 achievement of the first of its CO2 commitments ("some members of ACEA will introduce in the EU market models emitting 120 gCO2/km or less"). Using ACEA time-series data, in 2002 ACEA first registrations of 120 gCO2/km or less cars rose by over 90 % on the prior year (even though car registrations in total dropped by over 4 %). In 2000, ACEA manufacturers achieved this commitment, by bringing to market more than 20 models that achieved 120 gCO2/km or less - with registrations of almost 160 000 units. This major effort was augmented in 2001 with ACEA manufacturer first registrations of such cars totalling over 306 500 units -- which represented over 2.5 % of total ACEA (petrol + diesel) registrations. In 2002, first registrations of cars emitting 120 gCO2/km or less again almost doubled to reach over 580 000 units (see Figure 10 for longer-term developments), and achieved an impressive 5 % share of total new registrations.

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Figure 10: ACEA Registrations of Cars with CO2 emissions of 120 gCO2/km or less

2.7. Trends in alternative concepts passenger cars in the EU

Nothing new to report.

2.8. Trends in innovative concepts passenger cars in the EU

In 2002 the car manufacturers' associations and the Commission agreed guidelines for the acceptance of innovative concepts within the monitoring of the commitments (see Annex 3).

2.9. Brief description of the degree of occurrence of grey areas between M1 and N1 vehicles

Nothing to report (see Section 2.10).

2.10. Data sources, data methods and data confidence levels

For the first time since the inception of the Joint CO2 Monitoring Reports, this 2002 report utilises data from the official EU scheme (1753/2000/EC), that is based on Member State submissions (see Annex 1). The data submitted by Member States are now the official basis for the monitoring process. The data have been slightly processed by the Commission [17]. Until now, ACEA purchased data from the French-based association AAA (Association Auxiliaire de l'Automobile), so as to enable the annual monitoring exercises to be undertaken.

[17] The cycle change correction of 0.7 % has been applied, and potentially erroneous allocations of vehicles to CO2 classes, involving a few hundred vehicles, have been suppressed (see Annex 1)

However, with official EU data becoming available, a discontinuity from the past data series exists, because of underlying differences (see below). It is not correct to simply adjoin official data for the most recent year, onto ACEA's historical data.

The main dimensions of this discontinuity are:

Country Coverage: The EU data for 2002 covers all 15 Member States. Whereas, ACEA's CO2 data has never included Greece, and has not until recently included Finland (due to data unavailability).

Methodology Differences: ACEA data links registrations to one, highly analysed, vehicle specification information bank, which is used for all Member State registrations. For EU data, each Member State has its own vehicle specification set, to which it links its national registrations; national variations in these vehicle specifications exist. A number of more specific methodological issues have been identified in relation to CO2 categories and the treatment of unknown cars (see next item on Registration Differences), e.g. ACEA's data provider closes gaps in incomplete data sets with the help of its databank while Member States count only cars with complete data sets. In order to improve the data a more in-depth analysis would be needed. Moreover there seems to be a systematic difference in the reporting of the mass of vehicles between ACEA data (report mass of empty vehicle) and Member States data (report in accordance with the definition given in Decision 1753/2000/EC).

Registration Data Differences: The official EU data seems to miss a sizeable percentage of new car registrations. In 2002, the difference is about 400 000 vehicles (equal to about 3 % of total registrations) [18]. The largest difference was in Spain. The official EU data only record registrations (and CO2 figures) for which CO2 data is provided whereas in the case of ACEA data, if no CO2 information was available, or cannot be provided by the vehicle specification data bank, any such vehicles would be included under an "unknown" category. In past Monitoring Reports the size of "unknown versions" has been an important parameter in the evaluation of data quality. The EU data cannot provide this information.

[18] It should be noted that the Commission believes that such a difference does not automatically lead to differences in the calculated CO2 averages. This would be only the case if the characteristics of the missing data deviate systematically from the characteristics of the total fleet. The issue will be further discussed within the Expert Group dealing with the implementation of Decision 1753/2000/EC.

Grey Area Problem: ACEA believes that some Member States might register vehicles in accordance with the fiscal regime (commercial or private vehicle), not in accordance with M1 & N1 category definitions. This is a likely source of difference, which needs more thorough investigation -- particularly the number of M1 vehicles potentially registered as N1. As shown in an earlier report, for ACEA data, the grey area issue is small; for EU data it is an unknown volume.

Data Scope: The official EU data covers - as laid down in the Commitment - the CO2 emissions of cars using all fuels, including AFVs. Whereas ACEA's CO2 data has consistently been on the basis of petrol + diesel cars [19].

[19] It should be mentioned that the number of AFV was so small in the past, and still is, and that the Commission therefore believes that these vehicles are negligible for the calculated CO2 average.

ACEA is closely monitoring data quality of this newly available EU data source. Currently the variance between EU & ACEA data in terms of the overall average CO2 figure is only a little more than 1%; although differences in some details exist, over the long-term data differences should narrow. ACEA explained that for the future it will continue to make data comparisons between EU/Member State and industry data sources, and if over the next years systematic deviations become apparent, ACEA will assume that systematic deviations also existed in the baseline assumption for year 1995.

Since actual and underlying methodological differences exist between the EU data and ACEA's data (see above and Annex 2) the new EU data cannot be simply adjoined onto ACEA's historical CO2 time-series built-up from 1995. As a result, the new data does not provide a means to undertake longer-term "trend" evaluations of key CO2 developments that can contribute to a better understanding of CO2 reduction developments. For this reason this Joint Report uses ACEA's consistent historical data through to 2002 for such evaluations.

2.11. Description of measurement issues for CO2 emission factors

The ACEA Commitment specifies that new car CO2 emissions will be measured according to Directive 93/116/EC. Since the establishment of the ACEA Commitment, the mandatory type approval method of measuring CO2 emissions has been revised by Directive 99/100/EC. One of the principle changes (introduced over the period 2000 to 2002 for M1 vehicles) relates to the drive cycle - the deletion of the initial 40 seconds of unmeasured engine idling prior to the commencement of the test. As a rule, such a change of test procedure increases the measured value of CO2 emissions.

Since January 2001 almost all new M1 vehicles have had their CO2 emissions measured according to the "new" directive/cycle (99/100/EC). A correction factor needs to be applied to the measured CO2 emissions of such vehicles to broadly bring them into line with the 93/116/EC procedure, which is the basis on which ACEA's future targets were established and the basis of historical monitoring data in this report. In 2002 ACEA & the Commission reached a consensus on this correction factor adjustment; it was agreed that a 0.7 % reduction should be applied to "measured" emissions to align them with the Commitment's basis. In this report, this adjustment has been applied to 2001 and 2002 data. For future years it was also agreed that this 0.7 % adjustment should be maintained unless new data is provided by ACEA, that proves its inappropriateness.

2.12. Other issues

As stated in the 2001 Monitoring Report, Rover is no longer a member of ACEA. Although Rover terminated its ACEA membership from 2001, to maintain consistency with prior years, when Rover was a member, figures on ACEA, contained in this report, continue to include Rover. The procedure is acceptable to ACEA and Rover. ACEA explained that this does not imply, however, that ACEA now takes any responsibility for Rover's CO2 performance; historical data consistency is the sole reason for the continued inclusion of Rover data in ACEA's figures.

According to ACEA's data in 2002 Rover car registrations only accounted for 1.2 % of the ACEA total. ACEA's total CO2 figure for 2002 would have been about 0.1 g/km lower if Rover were excluded from the ACEA total. The impact on the 1995 data has not been assessed yet.

The Commission is continuing to examine Rover's exit from ACEA, in relation to the CO2 Commitment.

3. KEY ASSUMPTIONS TO THE COMMITMENT

3.1. Availability of enabling fuels

Statement on implication for the Commitment and justification

3.2. Nothing new to report.Distortion of competition

Statement on implication for the Commitment and justification

Nothing new to report.

3.3. Promotion of CO2 efficient technologies

Statement on implication for the Commitment and justification

In prior monitoring reports ACEA raised concerns over UK diesel policies that have restricted CO2 reduction potential over a period through to 2001. In October 2002 ACEA provided the Commission with additional information on UK diesel disincentive policies and diesel's weak performance in the UK market compared to the rest of the EU market. In its reply in May 2003 concerning the taxation of diesel passenger cars in the United Kingdom, the Commission provided results of an independent study that shows that the recent changes in UK's taxation policy favour the purchase of diesel vehicles. This has been confirmed by the UK Government, which drew attention to the increasing trend in diesel share between 2000 and 2002. The Commission and ACEA agree that this issue will again be addressed in the "2003 Review" of the ACEA Commitment.

3.4. Acceptance of innovation

Statement on implication for the Commitment and justification

Nothing new to report.

4. OTHER ISSUES

4.1. New measures affecting CO2

Comment on impact of the issue and on implication for the Commitment

Nothing new to report.

4.2. New regulatory measures

Comment on impact of the issue and on implication for the Commitment

ACEA continues to consider that the End of Life (ELV) Directive has adverse implications for fuel efficiency. ACEA disagrees with the Commission's assessment (see 2001 Joint Report) that this Directive "will not have any adverse effect on fuel efficiency given it does not limit the use of any material". As expressed in previous reports the Commission sees no evidence for adverse effects.

4.3. Fiscal measures

Comment on impact of the issue and on implication for the Commitment

Nothing further to report (see Section 3.3).

4.4. Breakthrough technologies

Comment on impact of the issue and on implication for the Commitment

Nothing further to report (see Sections 1.1, 1.2 & 4.5).

4.5. Research Programmes: Description and future potential

Comment on impact of the issue and implications for the Commitment

In 2002 the final phase of FP5 was being reached, along with preparations for the start-up of the next EU Framework Programme -- FP6. This meant that during 2002 there were no submission of proposals for new research projects, as FP5 have had no calls (of EUCAR relevance) in the later period.

Instead efforts were placed on launching proposals accepted during the 2001 calls -- such as FUEVA (fuel cell technologies validation), and FPEC (piston movement to electric conversion), as reported in the 2001 report. Also, for those proposals accepted in the earlier phase of FP5, and expected to be completed during 2003, efforts were being placed on delivering what has been agreed. Further, initial ideas on how to evaluate the results of the FP5 powertrain related projects were elaborated. The Commission funded Thematic Network on Powertrain, PREMTECH, will play an important role in this evaluation which is expected to start in 2003.

The European industry has always indicated that CO2 research issues need to be addressed by a long-term programme, and consequently has stressed the need to have CO2 emission reduction research issues sufficiently covered and funded in both FP5 and FP6. During 2002, FP6 has therefore been of great interest and concern to EUCAR and its members. The initial proposal on FP6, to a too great extent, neglected road transport and CO2 emission reduction research; however, this was corrected for the final version, and FP6 now offers a level of CO2 research possibilities comparable to that in FP5.

During 2002 initial ideas on FP6 projects were matured into draft Integrated Project (IP) proposals which are to be submitted to the first calls of FP6, deadline March - April 2003. The Integrated Project form of running research projects, as FP6 offers, allows larger and more system oriented research, (budget range 10 - 30 M Euro, duration 4 - 6 years).

For FP6, EUCAR has arranged its research into three programmes; Fuels & Powertrain, Manufacturing & Materials and Integrated Safety. Each will be mentored by one or two research directors coming from the EUCAR Council members; the idea behind forming these three programmes is to direct the research towards the relevant issues and to harmonise industrial and research strategies.

Clearly the first two groups cover topics dealing with CO2 reduction. In the Fuels & Powertrain program, IP proposals are being prepared on renewable (biomass) fuels, improved conventional powertrains, fuel cell powertrains and auxiliary power units, hydrogen storage. In the second program, Manufacturing & Material, IP proposals are being prepared for low weight vehicles using a mixed material approach, as well as methods and concepts on how the future vehicles are to be manufactured efficiently and environmentally sound. In mid-2003 indications are expected on which of these IP proposals will be accepted for FP6 funding.

4.6. Other measures - telematics, infrastructure, education

Comment on impact of the issue and on implication for the Commitment

Nothing new to report.

4.7. Economic situation of the car industry

Comment on impact of the issue and on implication for the Commitment

ACEA is of the opinion that the EU economic growth in 2002 was very disappointing and well below potential. A range of global and EU-level uncertainties had a negative impact on domestic demand and consumer & investor confidence. ACEA explained that against this poor macro-economic environment car sales deteriorated in 2002, despite the provision of sales incentives by manufacturers. ACEA new car registrations in the EU fell by over 4 % in 2002 on 2001 (based on ACEA data) (see Section 2.2).

ACEA believes that the tough economic and financial environment has slowed the uptake of more advanced (and typically more expensive) technologies into the marketplace.

The Commitment requires that "...any detrimental impacts on the financial performance, competitiveness and employment with the European industry associated with the Commitment will be reviewed". Nevertheless, the Commission agrees that the general economic growth in the EU in 2002 was depressed. A fragile economy especially in some of Europe's larger economies, and political instability following September 11 has contributed to a more cautious outlook among consumers overall. Even a short-term reduction in demand, as in 2002, can be a cause for concern in the auto industry. The cost for launching a new model is high and as it will only have a relatively short life span each model is dependent on a certain uptake. This coupled with a certain over capacity in the sector can give industry concerns. It is worth noting, however, that the slowdown in 2002 comes after a number of years with historically high sales figures.

It was agreed that the issue will be re-addressed within the "Review in 2003" mentioned in the Technical Annex to the Commitment

5. CONCLUSIONS

5.1. Progress statement on delivering the Commitment

Since 1995, ACEA has maintained an unbroken trend of CO2 emission reduction. In 2002 - taking the official EU data [20] - the average specific emissions of ACEA's new car fleet registered in the EU is 165 g/km. ACEA's CO2 performance is well ahead of what is needed to achieve the 2003 estimated intermediate target range of 165 -170 g/km specified in its Commitment, and ACEA has already met the first of its CO2 commitments ("some members of ACEA will introduce in the EU market, not later than 2000, models emitting 120 gCO2/km or less"). In fact, 2002 saw registrations of cars emitting 120 gCO2/km or less rise sharply (even though car registrations in total fell). The share of cars emitting 140 gCO2/km or less also rose in 2002, further evidencing ACEA's determination to meet its commitments.

[20] For the first time, official EU data is used in this Joint Monitoring Report. According to the Joint Monitoring System the monitoring has to be based on the data delivered under Decision 1753/2000/EC. According to this scheme prior 1995-2001 monitoring was based on data provided by ACEA. The Annex contains comparisons of data from EU and ACEA sources, whenever appropriate.

5.2. Statement on expected future progress of the Commitment

Further in 2002, ACEA was almost half the way towards achieving its 2008 target and CO2 reduction rates have been higher than expected. To meet its 2008 Commitment ACEA must increase its annual average reduction rate to about 4 g/km or 2.5 % a year during the remaining period of the Commitment. Based on ACEA's time-series data, to meet its 2008 Commitment ACEA must increase its annual average reduction rate to 2.3 % a year during the remaining period of the Commitment, from about 3 g/km or 1.7 % average annual decrease achieved since 1995. Over recent years diesel technology, especially, has been extremely well accepted in the EU market.

ACEA stresses that the 2008 target remains extremely ambitious, both technically and economically.

In summary, the Commission Services and ACEA have no reason to believe that ACEA will not live up to its Commitment.

DATA ANNEXES (2002)

ANNEX 1:

A1: SPECIFIC FUEL EFFICIENCY (l/100km) AND EMISSIONS OF CO2 (g/km) AVERAGED OVER ALL NEWLY REGISTERED PASSENGER CARS FOR EACH DIFFERENT FUEL-TYPE, FOR THE EU AND EACH MEMBER STATE

A2: THE DISTRIBUTION OF CO2 EMISSIONS (g/km) IN THE NEW PASSENGER CAR FLEET FOR EACH DIFFERENT FUEL TYPE, FOR THE EU

A3: THE DISTRIBUTION OF AVERAGED POWER AND ENGINE CAPACITY OF NEW PASSENGER CARS FOR EACH FUEL TYPE FOR THE EU-15 AND EACH MEMBER STATE

ANNEX 2: KEY DAT COMPARISON

ANNEX 3: MONITORING RULES FOR INNOVATIVE CONCEPTS

ANNEX 1: 2002 Monitoring Data

A1: SPECIFIC FUEL EFFICIENCY (l/100km) AND EMISSIONS OF CO2 (g/km) [21] AVERAGED OVER ALL NEWLY REGISTERED PASSENGER CARS FOR EACH DIFFERENT FUEL-TYPE FOR THE EU AND EACH MEMBER STATE [22]

[21] The emission-values of CO2 are corrected by 0.7%

[22] The total number of vehicles based on the data from Member States is smaller than the total number of vehicles according to the data of the car manufacturers association because the Member States submit exclusively data about those vehicles for which corresponding CO2 data are available in their database.

ACEA MEMBERS - 2002

>TABLE POSITION>

A2: THE DISTRIBUTION OF CO2 EMISSIONS [23] (g/km) IN THE NEW PASSENGER CAR FLEET [24] FOR EACH DIFFERENT FUEL TYPE [25]

[23] It is generally not possible to adjust the official EU CO2 category distribution data for the 0.7 % cycle change. If such an adjustment were feasible, the effect would be for volumes to move into lower categories (e.g. 140 g & less cars would increase in volume as a % of total). However, on request of ACEA it was taken into account that each of two ACEA members respectively is producing one variant of a model which is emitting 81 gCO2/km. After adjusting this value to the new test cycle (-0.7 %) the value will be 80.4 gCO2/km. This adjustment is done in this table only for these two variants. All other vehicles, car makes and CO2 emission categories are not adjusted.

[24] The following vehicles were suppressed due to possible data implausibility: 290 petrol cars with 14 gCO2/km as an average from the category <60 gCO2/km, 16 diesel cars with 16 gCO2/km as an average from the category <60 gCO2/km, 144 petrol cars with 79 gCO2/km as an average from the category 60-80 gCO2/km, 50 diesel cars with 79 gCO2/km as an average from the category 60-80 gCO2/km, 502 diesel vehicles emitting 414 gCO2/km as an average from the category 351-450 gCO2/km, 7 vehicles emitting 775 gCO2/km as an average from the category >450 gCO2/km

[25] The total number of vehicles based on the data from Member States is smaller than the total number of vehicles according to the data of the car manufacturers association because the Member States submit exclusively data about those vehicles for which corresponding CO2 data are available in their data base.

ACEA MEMBERS - 2002

>TABLE POSITION>

A3 THE DISTRIBUTION OF AVERAGED POWER AND ENGINE CAPACITY OF NEW PASSENGER CARS FOR EACH FUEL TYPE FOR THE EU-15 AND EACH MEMBER STATE [26]

[26] Mass data not shown due to possible inconstancies in Member States' deliveries

ACEA MEMBERS - 2002

>TABLE POSITION>

ANNEX 2: Key Data Comparison

EU 2002 & ACEA 2001 and 2002 key data

(All data in CO2 emissions section corrected by 0.7 % for cycle change)

>TABLE POSITION>

ANNEX 3: Monitoring Rules for Innovative Concepts

JOINT AGREEMENT ON THE GUIDELINES FOR THE ACCEPTANCE OF INNOVATIVE CONCEPTS WITHIN THE MONITORING OF THE COMMITMENTS OF ACEA, JAMA AND KAMA ON CO2 REDUCTION FROM PASSENGER CARS

A General aspects:

a) The basis of the assessment is the text of the Commitments [27] and the Recommendations [28], and any decision must be closely linked to monitoring-related questions of the Commitment, and must be relevant for the quality of the monitoring.

[27] "The acceptance by the Commission of innovative concepts for vehicles replacing conventional cars in short-haul traffic as contributing factors to comply with the Commitment."

[28] Innovative concepts for vehicles replacing conventional cars will be counted towards the achievement of this CO2 emission target even if they are not included in the category M1 or are not currently covered by Directive 93/166/EC

b) Political aspects should also be taken into account, e.g., possible reactions of Council, EP, NGO and the general public, and all sides should avoid undermining the credibility of the Commitments.

c) Innovations in general should not be hampered, and technical passenger car innovations, e.g. lightweight vehicles, should be promoted. However, as a replacement it should be a "bona fide" and in principle a one-for-one replacement of a conventional vehicle.

d) Any definition or criteria of "innovative concept" set out in this document is exclusively for the purpose of the monitoring of the Commitment on CO2 emission from passenger cars. They are not intended to be used in any other context or be seen by the auto industry as an indication by the Commission to establish any additional category of cars for the present or the future.

e) The "innovative concept" vehicles must meet a number of technical and environmental criteria.

B Specific criteria:

a) The "innovative concept" should meet at least the general criteria of M-class vehicles (Motor vehicles with at least four wheels [29] used for the carriage of passengers).

[29] In exceptional cases three wheel vehicles might be included, subject to a case-by-case decision

b) The CO2 emissions should be measurable in accordance with Directive 80/1268/EC and a CO2 figure should be provided by the manufacturers (even if these vehicles are currently not covered by this Directive)

c) The "innovative concept" should meet at least the emissions limit values for regulated pollutants applicable to M1 vehicles

d) The "innovative concept" vehicle should demonstrate passive and active safety appropriate to its intended use

e) The "innovative concept" should have a minimum top speed that allows its usage on all types of public roads [30]

[30] E.g., the usage of some roads require minima speeds

f) The "innovative concept" should comply with the ELV Directive.

C. Monitoring rule

(1) Vehicles - or natural developments of such vehicles - which were on the market before 1995 are not considered as "innovative concepts".

(2) The associations shall show clear evidence that the innovative concept it proposes is marketed and promoted to end users as a replacement to a conventional car in short haul traffic.

(3) Innovative concepts have to replace conventional cars. The car industry has to provide evidence of replacement numbers. If such evidence cannot be provided on at least 50% of the registrations, a maximum of 100 000 units on the total EU market will be taken into account.

In the Monitoring Report "innovative concepts" will be treated in a separate chapter.

Monitoring of JAMA's Commitment on CO2 Emission

Reductions from Passenger Cars (2002)

Final Report 5 September 2003

Joint Report of the Japan Automobile Manufacturers Association and the Commission Services

Monitoring of JAMA Commitment [31] on CO2 Emission Reductions from Passenger Cars

[31] As recognized by the European Commission in the Recommendation of 13 April 2000 on the reduction of CO2 emissions from passenger cars (2000/304/EC). Hereafter referred to as "The Commitment"

JOINT REPORT OF JAMA AND THE COMMISSION SERVICES [32]: YEAR 2002 REPORT

[32] Hereafter often referred to as "The Commission"

ES SUMMARY OF PROGRESS IN DELIVERING THE COMMITMENT

E1 Trends in specific emissions of CO2 (g/km)

In 2002 JAMA members decreased the averaged specific CO2 emissions of passenger cars registered within the EU by about 4 g/km to 174 g/km [33]. This is a 2.5 % [34] drop from 2001. Consequently JAMA accomplished the intermediate target set for the year 2003 in 2002.

[33] For the first time, official EU data is used in this Joint Monitoring Report. According to the Joint Monitoring System the monitoring has to be based on the data delivered under Decision 1753/2000/EC. According to this scheme prior 1995-2001 monitoring was based on data provided by JAMA. The Annex contains comparisons of data from EU and JAMA sources, whenever appropriate. In the 2002 report JAMA data continues to be used in certain places, in particular where consistent longer-term trends contribute to a better understanding of CO2 reduction developments (and EU data is not available to fulfil this role). Official EU data about CO2 emissions include AFV. However, it should be noted that the number of AFV was so small in the past, and still is, that these vehicles are negligible for the calculated CO2 average.

[34] All percentage figures are based on unrounded numbers and include decimals.

For petrol-fuelled cars, specific emissions dropped to 172 g/km in 2002 - a 1.0 % reduction compared to 2001. For diesel-fuelled cars, the value is 180 g/km - a 9.5 % reduction compared to 2001.

Over the full reporting period 1995 to 2002, specific average emissions showed a consistent downward trend. On average specific CO2 emission (g/km) levels of Japanese cars registered in the EU have decreased by an average of 1.5 % [35] a year and fell from 196 g/km in 1995 to 174 g/km in 2002, achieving an 11.4 % reduction from 1995 (see Figure 1).

[35] This value is a simple arithmetic average, and throughout the text simple arithmetic averages are used.

The average CO2 emission levels of gasoline-fuelled cars recorded a decrease from 191 g/km in 1995 to 172 g/km in 2002 - a 10 % reduction as compared with 1995. The average CO2 emission levels of diesel cars recorded a decrease from 239 g/km in 1995 to 180 g/km - a 24.9 % reduction as compared with 1995.

>REFERENCE TO A GRAPHIC>

Figure 1: EU Trends [36] of JAMA members' fleet in average specific emissions of CO2 (Based until 2001 on JAMA data; for 2002 the official EU data are used [37]. 2001 and 2002 data are corrected by 0.7 % for cycle adjustment.)

[36] Figure 1 shows in particular JAMA time-series data for 1995 to 2002. In the 2001 Joint Monitoring Report, JAMA's 2001 CO2 figure was shown as 179 g/km. This figure did not include a cycle change correction factor (see Section 2.11); the Commission and JAMA have now agreed that the correction factor should be 0.7 %. This means that, using exact figures, JAMA's CO2 figure in 2001 was 178 g/km.

[37] JAMA data and Commission data for the EU are nearly identical.

E2 Trends in specific fuel consumption by fuel type (l/100 km)

Fuel efficiency in 2002 improved on 2001 for both petrol and diesel cars. 2001 values were 7.3 l/100km for petrol, 7.5 l/100km for diesel and 7.3 l/100km for all JAMA members' new registrations [38]. In 2002 comparable values were 7.3 l/100km, 6.8 l/100km and 7.1 l/100km. Gasoline passenger cars, which counted for the majority of JAMA member's passenger cars registered within the EU over the full 1995 to 2002 reporting period, consumed about 8.0 l/100 km in 1995. Their average fuel consumption decreased to 7.2 l/100 km in 2002. Diesel cars consumed an average of 8.9 l/100 km in 1995, and achieved an average fuel consumption of 6.8 l/100 km in 2002 (see Figure 2).

[38] The following conversion factors were used for the calculation of specific fuel consumption (l/100km) from specific CO2 emissions (g/km): petrol 23.7, diesel 26.6.

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Figure 2: Trends of JAMA member's fleet in average specific fuel consumption by fuel (l/100km) (Based until 2001 on JAMA data; for 2002 the official EU data are used. 2001 and 2002 data are corrected by 0.7 % for cycle adjustment.)

E3 Trends in physical fleet characteristics

The average mass [39] of new petrol cars increased slightly from 2001 to 2002 - from 1 136 kg to 1 146 kg; for diesel the values decreased from 1538 kg to 1468 kg. When all new registrations are combined the average mass was 1 207 kg in 2001 and 1 220 kg in 2002. Average engine power of new registrations increased slightly, from 76 kW in 2001 to 77 kW in 2002. Average engine capacity decreased slightly, from 1 668 cm3 in 2001 to 1 666 cm3 in 2002.

[39] JAMA's data are based on the kerb weight of the vehicle.

The general trends in physical characteristics over the whole reporting period 1995 to 2002 show an increase, notably in mass (+ 12 %). This is mainly due to increasing gasoline car weight (+ 11 %) and increased diesel passenger car registrations (+ 209 %) over the reporting period. Average engine capacity increased by 2.7 % over the period from 1995 to 2002. The engine power increased by 10.5 % over the same period.

E4 Technical developments introduced to reduce CO2 emissions

The main new technologies introduced since 1995 include the gasoline and diesel direct injection engines. The Continuous Variable Transmission Technology (CVT) has already been introduced and continues to be used on cars sold on the market. JAMA members have also introduced hybrid cars and idle stop mechanism in 2000.

E5 Brief overall assessment on progress in relation to the target

In 2002 JAMA Members decreased the averaged specific CO2 emissions of passenger cars registered within the EU by about 4 g/km to 174 g/km [40]. This is a 2.5 % drop compared to 2001. JAMA already accomplished already in 2002 the 2003 intermediate target (165 to 175 g/km).

[40] For the first time, official EU data is used in this joint monitoring report In the 2002 report JAMA data continues to be used in certain places, in particular where longer-term trends contribute to a better understanding of CO2 reduction developments (and EU data is not available to fulfil this role)

Over the whole reporting period, 1995 to 2002, JAMA members fleet's average specific CO2 emissions fell from 196 g/km in 1995 to 174 g/km in 2002. Japanese automobile manufacturers have produced passenger cars achieving lower specific CO2 emission levels since 1995, achieving in that period a 11.4 % decrease in average CO2 specific emissions

The share of diesel cars in JAMA members' fleets has increased over the reporting period. While in 1995 gasoline cars accounted for 89.6 % of the fleet and diesel cars for 10.4 % in 1995, in 2002 the shares were 76.8 % and 23.2 % respectively.

An important achievement before the 2003 review is the launch on the EU market of gasoline cars emitting 120 g/km or less. Although sales remain small (43 743 vehicles in 2002), this shows a positive effort made by JAMA.

JAMA accomplished already in 2002 the 2003 intermediate target. Further CO2 emissions reductions are required to meet the final target (140 g/km in 2009). Emissions reductions will have to fall faster (around 2.8 %) for the 2009 target (140 g/km) to be met, see Figure 3. It should be mentioned that JAMA expected from the beginning that the reduction profile would be relatively slow initially and gather pace later.

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Figure 3 - The current and re