Opinion of the Economic and Social Committee on:

- the 'Communication from the Commission to the European Parliament and the Council on a future strategy for the control of atmospheric emissions from road transport taking into account the results from the Auto/Oil Programme`,

- the 'Proposal for a European Parliament and Council Directive relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC`, and - the 'Proposal for a European Parliament and Council Directive relating to measures to be taken against air pollution by emissions from motor vehicles and amending Council Directives 70/156/EEC and 70/220/EEC`() (97/C 206/20)

On 13 February 1997 the Commission decided to consult the Economic and Social Committee, under Article 100a of the Treaty establishing the European Community, on the above-mentioned communication and proposals.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 4 April 1997. The rapporteur was Mr Gafo-Fernandez.

At its 345th plenary session (meeting of 24 April 1997), the Economic and Social Committee adopted the following opinion by 61 votes to three with four abstentions.

1. Introduction

1.1. The aim of these directives is to bring about a substantial improvement in air quality throughout the European Union, particularly in cities, by the year 2010. To this end, they together define new vehicle emission limits for 2000 and 2005 and specifications for petrol and diesel fuel quality for 2000.

1.2. New passenger car exhaust emission limits are established on this basis for the year 2000, entailing an average reduction of between 35 and 50 % over the values set in 1996 for the main pollutants (NOx, CO, HC and particulates). A total ban is also to be placed on the marketing of leaded petrol after this date, and a series of unleaded petrol and diesel fuel specifications are improved.

1.3. The directives provide that no later than 31 December 1998 the Commission must submit new proposals on new emission values for 2005 and the fuel quality required to match these values. These proposals, which should enable very stringent emission values to be attained (a reduction of a further 50 % or so over those for 2000), are to be based on the results of the Auto/Oil Programme and, inter alia, on the following parameters:

- Trends in air quality.

- Pollutant emissions in Europe from transport and non-transport sources and the potential contribution of the measures adopted to reduce them.

- Technical developments with regard to vehicles and new propulsion technologies.

- The contribution of local measures or those encouraging public transport, including tax incentives.

- The supply and quality of crude oil available to the EU.

- The cost-effectiveness ratio of the planned measures.

1.4. The purpose of defining objectives far ahead of 2005 is to give the industry time to prepare for the necessary technological changes to be applied to both new vehicles and oil refineries. The initiative should be tied in with the current draft directive aimed at restricting fuel consumption for petrol- and diesel-powered passenger cars to 5 and 4,5 litres per 100 km respectively.

1.5. The estimated annual costs (including those arising from technological development, investment and operation) before tax and updated for a period of 15 years, for the Auto/Oil Programme as a whole, are as follows.

For industry:

- 'First Step` measures (2000 emission limits and fuel quality): ECU 4 906 million per annum.

- 'Second Step` measures (2005 emission limits only): ECU 3 000 million per annum.

For governments: ECU 555 million per annum for the first step, arising from the costs of improved vehicle inspection and maintenance.

This will produce the following cost increases per vehicle:

- 'First Step` measures (2000 emission limits): fuel - ECU 2 per annum, plus increased manufacturing cost of new vehicles - ECU 200-520 (depending on type and cylinder capacity of vehicle).

- 'Second Step` measures (2005 emission limits): ECU 150-200 more in manufacturing cost of new vehicles.

These costs would be passed on to consumers if not absorbed by manufacturers and/or distributors.

1.6. The draft directives provide for the introduction of fiscal incentives to accelerate the implementation of the objectives. The incentives are fixed applying the usual criteria of transparency, prior notification to the Commission, proportionality with the extra costs, and duration compatible with the directives' deadlines.

1.7. Appropriate safeguard measures are also established, both for accelerating the introduction of these objectives in areas identified as especially sensitive and for requesting temporary derogation of the measures.

2. General comments

2.1. The Committee supports the aim of improving air quality which these draft directives seek to achieve through the combined effect of reducing vehicle emissions and improving fuel quality, together with the adoption of non-technical measures in this field. The Committee also believes that such measures need to be supported by others in areas such as building up public transport and improving traffic management.

2.2. The Committee wishes to congratulate the Commission on the Auto/Oil Programme initiative. The way it has been implemented, based on a partnership and efficient cooperation between the Commission and the car and oil industries, represents an excellent example for the future - its results are the best evidence of this. The Committee feels that this procedure should be used wherever possible in other sectors facing similar challenges.

2.3. The Committee endorses the reduction targets for the year 2000 and the reference targets for 2005, on the basis of the following considerations.

2.4. The Committee considers that the series of measures with which it is planned to achieve the 'Stage 2000` emission targets (entailing, as stated earlier, emission levels for the year 2010 some 35-50 % lower than would be the case without the Commission's planned package of measures) will require a major effort in economic terms and in terms of adapting the latest available technologies. Similarly, the Committee is aware that the major part of this effort, regarding both technological developments and overall cost aspects, will fall to the car manufacturing industry. It therefore urges the Commission to support the implementation of the Auto/Oil Programme under the Framework Research Programmes and a selective fiscal approach aimed at sustainable private vehicle use, with incentives for 'clean cars`.

2.5. A key element in achieving the objectives set is the guarantee that vehicles should meet their emission targets throughout their useful life. The Commission's proposals centre upon three complementary actions:

- on board diagnostics for petrol-driven vehicles;

- regular inspection and maintenance systems.

A third, supplementary, system has also been planned, based on control of compliance of vehicles in use. This would be carried out on the basis of a statistical sample, broken down by make and model, of vehicles in use under optimum operating conditions during their operational life.

Given the combined effects of the first two elements, the Committee questions the need to set up a system of control of compliance of vehicles in use as this could prove to be bureaucratic and cost-ineffective. It would therefore urge the Commission to study alternative formulas, such as a voluntary agreement in this sphere with the European car industry.

2.6. The Committee considers that the fuel qualities required to meet the 'Stage 2000` emission targets represent a balanced proposal for the European Union as a whole, although they involve a relatively significant effort, particularly for refineries in the south of the Community. Furthermore, as indicated by the Auto/Oil Programme, they are an essential adjunct to the future new technologies for petrol and diesel engines.

2.7. The Committee would however have preferred a number of actions supplementing the proposals to have been considered at the same time. Many of these, examined in the Auto/Oil Programme, may offer a good cost-effectiveness ratio. The following should be noted:

- impact of the new fuel consumption reduction strategy for private cars on overall car emissions;

- emission reduction, especially at local level, by applying the 'non-technical measures`, such as enhanced traffic management or the possible use of alternative fuels such as LPG, compressed natural gas or others;

- measures to speed up the replacement of existing vehicles.

2.8. The Committee welcomes the fact that the Auto/Oil II Programme required for the period up to 2005 is already being drawn up. The programme should be of an integrated type covering both mobile and stationary sources. It should take account of air quality trends in the wake of the adoption of the package of measures arising from the Auto/Oil I Programme, newly-available technologies and the new pollution limits which might be fixed on health grounds. Any such second phase must be governed by the same cost-efficiency criteria.

2.9. Throughout the work on the programme, the Association of European Automobile Manufacturers made clear its opposition to establishing reference values for the year 2005 at the present time. The Commission's assumption that this would enable the automobile industry to press ahead with its technological development programmes using reference targets is valid because the Auto/Oil II Programme can be completed by the end of 1998. This will provide the automobile industry with a firm basis for technological developments. Otherwise, the suggested 2005 reference emission targets may well be excessive or, alternatively, may have to be increased above the initially planned level. The technologies developed on the basis of the original targets could consequently be partly or wholly irrelevant.

2.10. The Committee agrees with the Commission on the need to have reference targets, which are scientifically and economically verifiable. It therefore urges the Commission and the industry to speed up progress on the Auto/Oil II Programme so that appropriate reference targets can be established before the year 1999. This would also allow the latest available data on European Union air quality to be used, so that the targets would be based on a more accurate environmental picture.

2.11. The issue of tax-based environmental incentives has been discussed in a number of ESC opinions (). In accordance with Commission precedent, the Committee considers that such incentives are only acceptable (a) if they serve to accelerate the application of stricter standards, approved at Community level and intended to be implemented at a future date, (b) if they are calculated as a fraction of the incremental cost of complying with such measures, and (c) if they do not lead to distortions of competition. For these reasons, the Committee supports the introduction of such fiscal incentives in order to meet the emission objectives for 2000.

2.12. The Committee wishes to highlight a number of problems concerning the application of these incentives relating to 'Stage 2005` emission standards, which the draft directive sets out on an indicative basis. These standards must be made binding at the appropriate time, otherwise the incentives could not meet any of the three single market compatibility conditions defined above. More specifically:

2.12.1. Until any new emission standards have been agreed at Community level and have entered into force, fiscal incentives would not have a sound legal basis.

2.12.2. In the absence of a study, such as the 'Auto/Oil II` proposed above, it would be difficult to establish, in a transparent manner at EU level, the additional cost for vehicles of meeting the standards.

2.12.3. These conditions - in particular the lack of a harmonized Community framework - could lead to distortions in the single market.

2.13. The Committee believes, on the other hand, that allocating such fiscal incentives to accelerate the replacement of older, and therefore more polluting, vehicles could have a far greater, and more cost-effective, impact on overall emissions.

2.14. The Committee considers that the measures contained in the directive on fuel quality are appropriate regarding both the temporary extension of the period in which leaded petrol may be marketed and the requirement for higher-quality fuel in particularly sensitive areas, provided that Member States show that such quality criteria are necessary in order to protect the environment.

3. Specific comments

3.1. In the proposal for a directive on the quality of petrol and diesel fuels:

3.1.1. Article 9: replace 'a significant reduction in the sulphur content .... to come into effect on 1 January 2005` with 'a petrol and diesel sulphur content compatible with the new emission targets set for vehicles`.

3.2. In the proposal for a directive on emissions from motor vehicles:

3.2.1. The Member States which originally grant type-approval may invite the manufacturers to reach voluntary agreements in order to ensure control of compliance of vehicles in service with the provisions for in-service durability.

3.2.2. Article 5: replace 'a further tightening of the emission standards` with 'new emission values reflecting air quality trends in the European Union and the results of the latest technical studies and cost-benefits analyses carried out by the European Commission with the cooperation of the industrial concerns in question in the framework of the Auto/Oil II Programme`.

Brussels, 24 April 1997.

The President of the Economic and Social Committee

Tom JENKINS

() OJ No C 77, 11. 3. 1997, p. 1-8.

() OJ No C 155, 21. 6. 1995; OJ No C 18, 22. 1. 1996; OJ No C 212, 22. 7. 1996.