EN    EN EN 
EN    EN  EUROPEAN COMMISSION 
Brussels, 27.10.2010 
SEC(2010) 1251 final 
  
COMMISSION STAFF WORKING DOCUMENT 
Accompanying document to the  
Proposal for a 
DIRECTIVE OF THE EUROPEAN PA RLIAMENT AND OF THE COUNCIL 
amending Directive 2000/25/EC as regards the imple mentation provisions for tractors placed on the 
market under a “flexible scheme” 
Impact Assessment 
{COM(2010) 607} 
{SEC(2010) 1252} 
EN 2   EN TABLE OF CONTENTS 
1. Introduction and policy context ................................................................................... 5 
1.1. Basis for the introduction of the flexibil ity scheme, relation between the machinery 
and the tractors directive .............................................................................................. 5 
1.2. Overview of the tractor sector...................................................................................... 7 1.3. Emissions from tractors ............................................................................................... 9 1.4. Competitiveness issues .............................................................................................. 10 2. Procedural issues and positions from consultation of interested parties.................... 10 
2.1. Consultation and external expertise ........................................................................... 10 2.2. Impact Assessment Board (IAB) recommendations.................................................. 12 3. Problem definition...................................................................................................... 13 3.1. Background ................................................................................................................ 13 
3.2. Developing New Engine Technology ........................................................................ 14 3.3. Ability to Comply ...................................................................................................... 14 3.4. Compliance costs ....................................................................................................... 15 3.5. Regulatory issues ....................................................................................................... 16  
3.6. Influence of the economic crisis  and other relevant factors....................................... 16 
3.7. How will the situation develop?................................................................................. 17 3.8. Does the EU have the right to act?............................................................................. 18 4. objectives .................................................................................................................. . 18 
4.1. Consistency with other horizontal ob jectives of the European Union....................... 19 
4.1.1. The European Economic Recovery Plan and EU2020 Strategy ................................ 19 4.1.2. Environmental EU Policies........................................................................................ 19 5. Policy Options............................................................................................................ 20  
5.1. Introduction.............................................................................................................. .. 20 
5.2. Options ................................................................................................................... .... 20 
6. Option Analysis – Preliminary Analysis.................................................................... 23 6.1. Analysis of Option 1 – Baseline ................................................................................ 23 6.2. Analysis of Option 2 - Provision of govern ment backed loans for purchasing stocked 
engines manufactured under the so called sell-off period.......................................... 24 
EN 3   EN 6.3. Analysis of Option 3 - Implementation of  a scrapping scheme (on a national basis) 25 
6.4. Analysis of Option 4 – Implementation of  alternative types of  provisions under the 
existing flexibility scheme ......................................................................................... 25 
6.4.1. Option 4.1 - Implementation of scaled per centages of flexibility for the different 
types of tractors, depending on the problem s they encounter for the transition from 
Stage IIIA to Stage IIIB. ............................................................................................ 25 
6.4.2. Option 4.2 - Increase of flex ibility percentage to 35% a nd proportionate adjustment 
of the fixed numbers of engines................................................................................. 26 
6.4.3. Option 4.3 - Increase of flex ibility percentage to 50% a nd proportionate adjustment 
of the fixed numbers. ................................................................................................. 26 
6.4.4. Option 4.4 - Increase of flex ibility percentage to 80% a nd proportionate adjustment 
of the fixed numbers of engines................................................................................. 26 
6.4.5. Option 4.5 - Conditional use of the flexibi lity scheme, with penalty mechanism..... 26 
6.4.6. Option 4.6 - Implementation of a trading system. ..................................................... 27 6.4.7. Option 4.7 – Introduction of ABT scheme. ............................................................... 28 6.5. Comparison of the Options ........................................................................................ 28 
6.6. Conclusion on preliminary Analysis.......................................................................... 32 7. Impacts of preferred option........................................................................................ 32 7.1. Environmental impact ................................................................................................ 32 7.2. Economic impact........................................................................................................ 36 7.3. Impact on SMEs......................................................................................................... 36 7.4. Social impacts ............................................................................................................ 37 
7.5. Competition impacts .................................................................................................. 37 7.6. Administrative burden................................................................................................ 38 7.7. Effect of the proposed measure compared to the base line........................................ 38 
8. Monitoring and evaluation ......................................................................................... 39 
ANNEX I: Glossary .............................................................................................................. ... 40 
ANNEX II: Reference Documents........................................................................................... 41 ANNEX III: Summarized Stages ta ble of Directive 2000/25/EC............................................ 42 
ANNEX IV: Flexibility scheme, fixed numbers and ABT ...................................................... 46 
EN 4   EN ANNEX V: Positions of stakehol ders regarding the amendment of the provisions of the 
flexibility scheme for NNRM and tractors............................................................................... 50 
ANNEX VI: Fleet and annual sales of tractors ........................................................................ 53 
ANNEX VII: Emissions of NOx and PM ................................................................................ 54 ANNEX VIII: Market of ag ricultural vehicles ........................................................................ 55 
1. Category T: Wheeled tractors .............................................................................................. 55  
2. Category C: Track – laying tractors ..................................................................................... 56 
ANNEX IX: the SME Test (ARCADIS report 30-03-2010) ................................................... 60 ANNEX X: Comparison of the options ................................................................................... 61 ANNEX XI: Calculation of environmenta l impact and maintenance costs............................. 65 
EN 5   EN 1. INTRODUCTION AND POLICY CONTEXT  
The tractors emissi ons Directive 2000/25/EC1 regulates the exhaust emissions (carbon 
monoxide (CO), hydrocarbons (H C), nitrogen oxides (NO x) and particulate matter (PM)) 
from diesel engines installed in agricultural an d forestry tractors (hereafter: tractors). The 
Directive includes a series of emission lim it stages of increasing stringency with 
corresponding compliance dates. These limits are based upon those cont ained in Directive 
97/68/EC, which covers emission limits for non-road mobile machinery  (NRMM) because 
engines used for these two applications are of a similar technical nature, and it is logical that 
their emission requirements should be aligned to allow interchangeability between engine 
designs used for NRRM a nd tractor applications. 
The original directive on tractors emissions  was introduced in 2000 and its decisions on 
deadlines and criteria were based on data available at that time. The emissions limits set in the Directive were particularly ambitious for the la ter stages (for PM, a reduction by 88 to 94 % 
was required) therefore in order to ease the bu rden for manufacturers, an amendment to the 
Directive was introduced in 2005 (2005/13/EC). Th is introduced a flex ibility scheme, based 
upon a similar scheme already introduced for NR MM, to facilitate the transition between the 
different emission stages. The flexibility sche me allows the manufacturers to place on the 
market, during the period between two successive  stages of exhaust emissions limit values, a 
limited number of tractors fitted with compressi on ignition engines that comply only with the 
exhaust emission limits of the previous stage. A manufacturer has the opt ion either to place on 
the market for each engine power category a limited number of machines not exceeding 20% 
of the manufacturer's annual sales (calculated as  the average sales in the EU of the latest 5 
years) or a fixed maximum number  of units as stipulated in th e Directive. This second option 
was intended to be used by smaller enterp rises producing lower volumes of engines. 
The present level of emission limits is aligned with those of the USA, the major difference 
being the system and level of implementing measures (flexibility). 
1.1. Basis for the introduction of the fl exibility scheme, relation between the 
machinery and the tractors directive 
The tractors emissions directive
2 was set up fully in line with the non-road mobile machinery  
(NRMM) Directive and implemented the same re quirements specifical ly for tractors under 
Framework Directive 2003/37/EC; separating the requirements in to two directives allowed 
the creation of a stand-alone tr actors Directive which could be incorporated into the whole-
vehicle type-approval system for tractors. Since the provisions for tracto rs are aligned with 
those for machinery, this impact assessment draws on the IA for flexibility for non-road 
mobile machinery. Nevertheless it was consider ed necessary to treat the proposals separately 
because of differences in timing (work on NRMM being more advanced). 
For the various types of non-road mobile machinery  (NRMM), Directive 97/68/EC stipulates 
the maximum permitted engines exhaust emissions as a function of the power of the installed 
                                                 
1 OJ L173, 12.7.2000, p.1 
2 OJ L 173, 12.7.2000, p. 1, as amended by 2005/13/EC in OJ L 55, 1.3.2005, p.35 and 2006/96/EC in OJ 
L 363, 20.12.2006, p. 81. 
EN 6   EN engine. Moreover, the Directiv e includes a series of emission limit stages of increasing 
stringency with corr esponding compliance dates. NRMM manuf acturers must ensure that new 
engines used in their machines comply with these limits when placing them on the market.  
Directive 2004/26/EC3 amended the original NRMM Directive and introduced the currently 
applicable stage of emission limits for the major ity of diesel engines (referred to as Stage 
IIIA). These limits will be replaced by the more stringent Stage IIIB limits entering into force 
progressively, depending on the power category, as of 1st January 2011 with regard to the 
placing on the market. From 1st January 2010 the type-approval period for these engines has 
started. As the Stage IIIB limits  are stricter for PM and NO x, current engines will need to be 
modified and re-designed in order to respect the new limits. This redesign affects manufacturers who have to adap t the design of their machines to accommodate the modified 
engines. This is a time and resources consuming procedure; the efforts needed depend heavily 
on the required changes to the engines and to the body of the machine in which the engine is 
to be installed.  
The reductions in PM and NO
x emissions resulting from stricter emission limits are 
significant, as can be seen in Annex III , in the last table. For PM, a reduction by 88 to 94 % 
is required for the next emission limit stage. 
Directive 2004/26/EC in troduced a so-called "f lexibility scheme"4 to facilitate the transition 
between the different emission stages. The flexibility scheme allows the manufacturers to 
place on the market, during the period between two successive st ages of exhaust emissions 
limit values, a limited number of non-road mob ile machinery fitted with compression ignition 
engines (with power from 19kW to 560 kW) that st ill comply with the e xhaust emission limits 
of the previous stage. A manufacturer has the op tion either to place on th e market (1) for each 
engine power category a limited number of machines not exceeding 20% of the 
manufacturer's annual sales of machinery (calcu lated as the average sa les in the EU of the 
latest 5 years) or (2) a fixed maximum number of machines as stipulated in the Directive. This 
second option was intended to be used by sma ller enterprises producing lower volumes of 
engines. 
The flexibility scheme was designed5 to: 
• permit smooth integration of re gulations applicable to the NRMM machinery; the majority 
of manufacturers do not produce th eir own engines, but have to  purchase these from engine 
manufacturers. Once the engine manufacturer is  satisfied that engine and after-treatment 
development6 is satisfactory and ready for producti on, then the manufactur er can follow-up 
with its integration and optimisation in the vehicle and arrange fo r type-approval. This 
situation is unique compared with other (n amely road) vehicle manufacturers, who can 
develop and produce both vehicle an d engine at the same time. 
                                                 
3 OJ L 225, 25.6.2004, p.3 
4 Additional clarifications on provisions of the flexibility scheme can be found in Annex IV 
5 As stipulated in the COM (2002) 765 final and COM (2000) 840, amending proposals  
6 Additional equipment installed with the engine, that chemically or physically reduces the exhaust 
emissions emitted from the engine before releasing them to the atmosphere e.g. Diesel Particulate Filters, NOx adsorber Catalyst or Selective Catalyst Reduction systems 
EN 7   EN • provide the necessary environm ent for the manufacturers to develop and adapt, initially, 
machinery with bigger volume sales and fewer problems and then utilise the experience 
gained to adapt the rest of the machinery, produced at smalle r volumes for niche markets. 
This experience makes the adaptation of th e rest of the machinery less costly. 
• avoid excessive impacts during the transition to the next Stage on low volume products 
since development in these series re quires relatively high fixed costs. 
The tractors emissions directive  2000/25/EC implemented the same requirements specifically 
for tractors as the requirements for non-road mobile machinery, including the Stages IIIA, 
IIIB and IV, the timeframe and the flexibility sc heme. Both with the help of an external 
consultant who had extensive contacts with in dustry (organisations as well as individual 
companies, as listed in the study report) and through direct contacts th e Commission services 
have obtained the best information availabl e to show the need for the present action. 
For the specific categories of ‘ special tractors ’ (T2, C2 and T4.1, designed for use in 
vineyards and orchards, also known as 'narrow- track tractors') the proposal for enlarged 
flexibility is not sufficient to address th e problems – of a purel y technical nature - 
encountered with the upcoming introduction of  Stages IIIB and IV emission limits. The 
Commission is therefore consider ing a separate amending proposal  to the directive, with a 
specific impact assessment. For the same reason  as described above, th is project should be 
treated separately from the current one and the one for machinery. 
1.2. Overview of the tractor sector 
Manufacturers cannot easily be categorised; many produce tractors  and/or other agricultural 
(and forestry) machinery and/or other non-ro ad mobile machinery, like construction 
equipment. Some produce their own engines, but most outsource them.This makes it difficult to aggregate specific data on production, economi c and financial performance and resources. 
This is aggravated by the fact that industr y and EU legislation do not use the same 
categorisation. Also, registration (for use on the road) is differe nt among Member States, with 
some where tractors are not s ubject to registration at all. 
Global overview of some typical products: - agricultural tractors : ‘normal’ wheeled tractors, crawler tractors, fast tract ors, narrow-track 
tractors (for use in vineyards and orchards), for mountai nous areas (low centre of gravity); see 
Annex VIII  for detailed definitions; 
- self-propelled agricultural machinery  (in EU definitions they are part of NRMM): 
planting, spraying, irrigating machinery etc.; smaller agricultural machinery like machinery 
where the user is following on foot; ha rvesters for cotton, wheat, corn etc, 
- other (self-propelled)  NRMM, some examples: landfill compactors, pipe-layers, 
construction machinery (wheel lo aders, bulldozers, off-highwa y trucks, hydraulic excavators 
etc.), forestry machinery (tree cutters, tree lo aders etc.), road mainte nance machinery, mobile 
cranes, fork-lift trucks, generator sets, pumps, inland waterways vessels, railcars and locomotives. 
EN 8   EN The NRMM Directive 97/68/EC covers em issions from the machines in the 2nd and 3rd indent; 
the tractors Directive 2000/25/EC cove rs only those in the first indent. 
Tractors are divided into two broad categories: "T" comprisi ng wheeled tractors and "C" 
comprising track laying tractors. These are fu rther divided into su b categories depending on 
the vehicle characteris tics (for details see: Annex VIII ). Categories T2/C2 and T4.1/C4.1 
representing narrow tractors and high clearance tr actors, i.e. machines specifically developed 
for fruit and vine cultivations  and adapted to extremely rest ricted spaces (see comment under 
1.1). 
Tractor manufacturers are part of the agricu ltural machinery industry, which in Europe 
consists of around 1 500 manufact urers producing variou s types of (self propelled) harvesters, 
ploughs, cultivators, tillers, seeders, spread ers etc. In 2008 the total turnover for the 
agricultural machinery re ached around € 30 billion7; for tractors CEMA estimated the 
turnover for 2008 at € 10  billion. In the 1st  quarter of 20098, hit by the financial crisis, the EU 
tractors market started to drop sharply. Fo llowing the decrease in downstream demand, the 
sales of tractors decreased by 20% in units . Consequently, according to the information 
provided by CEMA, the turnover in 2009 d ecreased by 20-25% compared to 2008. For 2010, 
tractor manufacturers are expecti ng a further 5 to 10% decrease9. Figures for the 1st quarter of 
2010 for EU15 show a decrease of 22% compared to 200910. 
Directly linked jobs reach 24 000  for tractors manufacturing, with another 10 000 indirect 
jobs (suppliers of parts and compon ents, dealers / distributors etc). 
In Europe there are six major groups that ac tively manufacture tractors and some smaller 
manufacturers, with a total of more than 40 brand names. Among those, some 15 can be 
considered as SMEs. None of the engine ma nufacturers qualify as SME. On the other hand 
probably (almost) all end-users are SMEs : both farmers and contract workers. 
Additional information on the market si tuation of tractors is included in Annex VIII . 
Tractors use compression ignition engines (CI,  diesel) with a power  rating between 19 and 
560 kW. Only 4 out of 40 tractor manufacturer s are integrated engine and equipment 
manufacturers. The other manuf acturers rely on the supply of engines from 10 large engine 
manufacturers operating on the EU market. The latter sell their products to tractor 
manufacturers. The contracts between the engine manufacturer s and the tractor manufacturers 
usually last for at least 3 year s, as it is very difficult to re design equipment for a new engine.11 
                                                 
7 Source: CEMA 
8 Reference: CEMA letter and attached ''Background material for the Request to Enlarge Flexibility from 
20% to 50% for Stage IIIB'', 14-07-2009, addressed to Commission VP G. Verheugen. Additional 
information on market share can be found in the study 'Competitive analysis of the EU Mechanical 
Engineering', p. 4, available at the link: http://ec.europa.eu/enterprise/mechan_equipment/companalysis-eu-mechengin.pdf 
9 Source: email from CEMA to ENTR-F.1 dated 18.02.2010. 
10 Source: CEMA, June 2010. 
11 Source: ARCADIS study 
EN 9   EN In 2005, the latest available information indica ted that there were 2 500 420 tractors in use12 
(for a detailed breakdown data pe r engine type, please refer to Annex VI ).  
When engines are sold to a tractor manufac turer, the transaction takes place without 
intermediary and the prices are kept secret – th is business practice is an important constraint 
on the availability of data. An  additional difficulty in obtaini ng tractor-specific information 
results from the fact that such sources such as EUROSTAT treat tractors as part of the 
agricultural machinery. Nonetheless, due to simi larities between NRMM and tractors as to the 
engines used, the present report will build on the findings for NRMM sector. 
1.3. Emissions from tractors 
Data on emissions from tractors cannot be obtai ned from emissions inve ntories like those on 
the web site of the European Environment Agency13 as tractors are not  defined separately 
therein. 
The key air pollutants from the tractors sector  contributing to overall air pollution are PM and 
NO x emissions14. According to the RAINS model15 the estimated PM1016 emissions from the 
entire NRMM  sector for EU27 are 7% compared to 13% for road transport. In 2005, the 
contribution of tractors to all NRMM PM emissi ons was 43% or 57 kt per year for EU15 and 
47% or 11 kt per year for EU 12.17 In terms of NO x emissions, the NRMM sector is 
responsible for 16% of all NO x emissions in the EU27 while th e road sector contributes to 
42% of all NO x emissions. In 2005, the contribution of tractors to all NRMM NO x emissions 
was 36% or 539 kt per year for EU15 and 43% or 120 kt per year for EU1218. This 
contribution from tractors to the overall air po llution in the EU provides the rationale for 
increasing the efforts to reduce the emissions in  the coming years. Care will be taken not to 
endanger the overall objective of the tractors emissions Directive to progressively reduce 
emissions. 
Although the Directiv e covers exhaust emissions from in ternal combustion engines, it does 
not address CO 2. CO 2 is not regulated under Directive 2003 /37/EC. As a result no inventory 
or data is available on CO 2 emissions of engines in the vari ous types of tractors. As tractors 
applications and type approval pr ocedures are different from t hose of other sectors like heavy 
and light duty vehicles or cars, the me thodology, limits and implementation dates for CO 2 
emissions still need to be identified. Acco rding to industry sources and based on the 
accumulated knowledge and practices of othe r sectors the development of necessary 
legislation and monitoring system s still require a transitional a nd testing period of about three 
to four years. 
                                                 
12 Source: CECE-CEMA-EUROMOT, 2006, Arcadis study, p. 295 
13 http://dataservice.eea.europa.eu/ PivotApp/pivot.aspx?pivotid=468   
14 Definitions of the gaseous and particulate pollutants are the same as in Directive 97/68/EC Annex I, as 
amended, and include: 
 '2.2. gaseous pollutants shall mean carbon monoxide, hydrocarbons (assuming a ratio of C1: H1.85 and oxides of nitrogen, the last named being expressed in nitrogen dioxide (NO2 equivalent; 2.3. particulate 
pollutants shall mean any material collected on a specified filter medium after diluting C.I. engine 
exhaust gas with clean filtered air so that the temperature does not exceed 325 K (52 
oC)'.  
15 Regional Air Pollution Information and Simulation model and database.  
16 Particulate matter below 10 µm 
17 JRC Technical Review, p. 24-25 
18 JRC Technical Review, p. 26-27 
EN 10   EN 1.4. Competitiveness issues 
World-wide, only the EU and the USA and to a lesser degree Japan have similar ambitions 
with regard to engine emi ssion legislation for NRMM and tractors. In other important 
geographical areas like China, India, Russia or  Latin-America these requirements do not exist, 
or are lagging stages behind. The main geographi cal market is the transatlantic market hosting 
the key manufacturers of engines and tractors, but also the main customers. This is why 
considerable efforts have been made to fully align emission limits and implementation dates of the key stages on both sides of the Atlantic. Testing procedures are cu rrently in the process 
of being harmonised at global level and UNECE
19 adopted a Global Technical Regulation 
(GTR) for this purpose in November 2009. Only  the administrative approval procedures 
remain different between the EU and th e other countries th at accept this GTR. 
Flexibility measures in this area have also been adopted in the USA. In addition to the 
existing flexibility (for tractor manufacturer s), the USA system introduced an additional 
'flexibility', the so-called ABT-system20 (for engine manufacturers) , one of the main aspects 
of which is that emission limits must not be met by each individual pr oduct line, but as an 
average over the manufacturer’s pr oduction sold over the year, so that a “dirty” product needs 
to be compensated by selling a “cleaner” one. In  addition the US scheme foresees a cap, a 
higher emission limit that has to be met by each individual product.  With all these measures at 
the disposal of the US industry, it is noteworth y that the present situation in the USA allows 
more than the EU flexibility (up to 80% and more21). An amendment allowing more 
flexibility for tractors on the European ma rket would reduce the competitive difference 
compared to the US market.  
2. PROCEDURAL ISSUES AND POSITIONS FROM CONSULTATION OF INTERESTED PARTIES  
2.1. Consultation and external expertise 
This IA Report builds on the report prepared fo r a flexibility proposal for NRMM prepared in 
2009. The current analysis takes into account elements of the ongoing process to study a 
revision of Directive 97/68/EC, including: 
• a Technical Review of Directive 97/68/EC22 by the Joint Research Centre (JRC) 
which includes, inter alia, an evaluation of  the need to amend the provisions of the 
flexibility scheme; 
• an Impact Assessment study carried out by ARCADIS23 to assess the impacts of 
the policy options as laid down in  the Technical Review by JRC.  
                                                 
19 See reference in Annex I 
20 Averaging, Banking and Trading system - see Annex IV – 2. 
21 See JRC page 97. 
22 The final report of the Technical Review is availa ble on the NRMM web page at the Europa website : 
http://ec.europa.eu/enterprise/mechan_equipment/emissions/projstudies.htm  
23 The final report of the IA study by ARCADIS N.V. is available on the Europa website: 
http://ec.europa.eu/enterprise/newsroom/cf/newsbytheme.cfm?displayType=library&tpa_id=163&lang
=en 
EN 11   EN • a complementary study to further assess, in ter alia, the impacts of the options of 
the Technical Review of JRC, including th e amendment of the flexibility scheme's 
percentage, to SMEs. The pr esent report builds on the findings of this study which 
have been made available to the pub lic and stakeholders through the NRMM web 
page24.  
For a possible revision of the flexibility sc heme as a response to the current difficult 
economic situation of the engine manufact urers and the tractor manufacturers, the 
Commission’s services carried out between Ma y and June 2009 an in depth consultation of 
Member States’ authorities and stakeholders (industry, environmental organisations, workers 
associations)25. Meetings were organised with the fo llowing main industr y federations: the 
Committees for European Construction Equi pment (CECE) and European Agricultural 
Tractors (CEMA). In a letter of 16 June  2009 Member State au thorities and Non 
Governmental Organisations (NGOs), the European Environmental Bureau26 and the 
European Federation for Transport & Environment27 were informed about the proposal to 
revise the flexibility scheme and invited to  submit written contributions. The letter was 
uploaded on a dedicated web-base d consultation tool so as to inform stakeholders more 
widely. On 22 June 2009 a pres entation on the current and futu re initiatives on revising the 
NRMM Directive was made by DG Enterprise at  the 'Clean Air seminar' organised by the 
European Environmental Bureau at which mo st Environmental NGOs were represented. On 
17 July 2009 the proposal to ame nd the flexibility scheme was discussed at a meeting of the 
Expert Group on Emissions from NRMM (GEME) . During those consultations much work 
was directed to the NRMM Directive, but all al ong it included work on flexibility for tractors 
(and on narrow-track tractors). The forum (GEME)  was used to consult relevant stakeholders 
on the tractors flexibility. Italy expressed it s support for extending the flexibility to the 
tractors' field, also repeatedly in messages to the Commission services. 
The issue of wider flexibility for tractors was also discussed with all relevant stakeholders in 
the Commission's Working Group on Agricultur al Tractors (WGAT) on 22 June and 18 
December 2009 and in the Commission's Working Group on Motor Vehicles on 26 January 2010. Apart from general support for wider flex ibility expressed by so me MS and CEMA / 
EUROMOT no further comments were made in those meetings. 
CEMA and ORGALIME
28 addressed the Commission in writing29 and at a meeting with the 
then Commissioner for Enterprise and Industry, Günter Verheugen with the request to support 
a wider flexibility allowance (50% instead of 20%), explaining why the tractor industry would 
need such mitigating measure. 
                                                 
24 More relevant information can be found on the link: 
http://ec.europa.eu/enterprise/newsroom/cf/newsbytheme.cfm?displayType=library&tpa_id=163&lang
=en 
25 Summarised information on the contributions of the public consultation on this proposal may be found 
in Annex V 
26 More relevant information can be found on the link: http://www.eeb.org/   
27 More relevant information can be found on the link: http://www.transportenvironment.org/  
28 Organisme de Liaison des Industries Métalliques Européennes  is the European Engineering 
Industries Association, speaking for 33 trade federations representing some 130 000 companies in the 
mechanical, electrical, el ectronic and metalworking & metal articles industries of 22 European 
countries.  
29 See footnote 9. 
EN 12   EN The input from stakeholders has been taken in to account, assessing different options to amend 
the provisions of the flexibility scheme. It has al so been considered by the external contractor 
(ARCADIS) while assessing environmental,  social and economic impacts on large 
manufacturers, SMEs, workers, consumers and users. 
A summary of the views of various  stakeholders can be found in Annex V.   
In support of this IA, an Impact Assessm ent Steering Group (IASG ) was created with 
invitations for participation sent to DG Joint Research Centre, DG Research, the Secretariat-
General, DG Environment, DG Mobility and Transport, DG Employment, DG Trade and DG 
Agriculture. The IASG met twice on 15 March 2010, and 13 April 2010, with participation by 
DG ENTR, ENV (15-3), MOVE (13-4) and SG ( 13-4); written contributions came from ENV 
and ECFIN. The suggestions of the IASG group have been incorporated in the IA. 
2.2. Impact Assessment Board (IAB) recommendations 
The Impact Assessment was discussed at th e IAB meeting of 2 June 2010. Following a 
negative opinion of the Board the report has been considerably changed, using the best information available in order to address th e main concerns expressed in the opinion. The 
main changes are as follows: 
The baseline scenario has been reworded in orde r to distinguish the effects of preparation for 
the new requirements and the impact of the cr isis (paragraph 6.1). Modifications have been 
made throughout the text to empha sise how the different player s have been affected by the 
current situation. 
As suggested, additional options have been adde d (paragraphs 5.2, 6.4 and later); in particular 
we have explained what the eff ect of 80% flexibility would be  and why the introduction of the 
USA-like ABT system is not feasible. 
Future compliance with Stage IV ha s been addressed in 5.1, 6.4 and 7.1.1. 
We have added the latest inform ation on the readiness to comply  of the different players (in 
paragraph 3.3). 
Text has been added (i.a. in paragraph 5.1) to explain and discuss the choice of the different 
options presented. 
The report explains (i.a. in pa ragraph 3.3) why it is not possibl e to give data on compliance 
costs for the industry; it provides the av ailable information on competition impacts. 
In chapter 2 and especially in Annex V all the information about stakeholders' views has been 
clearly established. The additiona l comments sent separately ha ve been taken into account. 
Paragraph 6.1 and others have been amended in order to support the need for EU action. It 
should be noted however that specific evid ence could not be made available to the 
Commission because of the sensitive nature of this information. 
Paragraph 7.5 has been revised in order to be tter show possible impacts of the preferred 
option on the competition. 
EN 13   EN On the basis of the opinion of the Board after resubmission  of the report the following 
paragraphs have been amended in or der to address IAB recommendations:  
In paragraph 2.1 and Annex V we have clarified the stakeholder consultation. 
In paragraph 3.3 and later the position (of con tinuous support for more flexibility) of the 
manufacturer who informed the Commission servic es that he will be ready by the present 
deadlines has been inserted. 
In paragraph 5.2 a new intermediate option 4.2  proposing 35% flexibility (halfway between 
20 and 50%) is introduced which is  discussed in 6.4.2 and further30. 
In paragraph 5.2 and later the option (new number 4.4) of 80% is further discussed. 
In paragraphs 7 and 7.7 the text relating to the present 20% flexibility has been improved. 
The last lines of paragraph 7.1 have been modifi ed to state the Commission's intention not to 
extend the flexibility for the fu ture Stage IV and to inform stakeholders of this position. 
As a consequence of the above, the text of annex VIII was completed for 35 and 80% and the 
whole text was moved to annex IV (old annexes IX to XII being renumbered to VIII to XI). 
Also annex X (new) has been completed. 
3. PROBLEM DEFINITION  
3.1. Background 
The technological challenge for tractor manufactur ers is that the next generation of engines 
must achieve emission reductions in PM and NO x comparable to thos e required and deployed 
in on-road engines and vehicles (trucks, buses  etc.). Although technical solutions to meet 
these targets are becoming available, the physic al implementation of th ese solutions across a 
full range of products is particularly challe nging. This is due, not only to the technical 
modifications required for the engines, but al so the additional complexities involved in 
designing the installation of the e ngine and ancillary equipment to  the vehicle itself. In cases 
where a manufacturer produces a large range of  specialist equipment, often produced in 
relatively low volumes, this can take up a c onsiderable amount of design resources. 
Despite the introduction of the flexibility scheme, many manufacturers were finding the 
timetable of the Directive impossible to comply  with. This is largely due to the economic 
crisis which caused the tractor market in Eur ope to decline by 20-25 % in units between 2008 
and 2009. Steep falls in sales caused a large decr ease in income and available capital to 
finance the necessary technology research a nd development for tractors with suitably 
compliant engines in all power categories and applications within the time limits in the 
Directive. Consequently, there is a danger that some products in certain sectors of the market 
will become unavailable, leading to end users (f armers and contract-workers) retaining older, 
more polluting, tractors or replacing them onl y with second hand m achines not compliant 
                                                 
30 Introduction of the new option 4.2 (35% flexibility) caused renumbering of many paragraphs. 
EN 14   EN with even the current IIIA emissions standards: neither of these solutions can be considered as 
environmentally beneficial. 
At around the time that the engine development w ould have come to its final stages, in early 
2009, the tractor industry was hit by the crisis. This may have caused delays for the engine 
development, but most of the problem rests with the tractor industry. 
The purpose of the impact assessment is to examine possible solutions which will seek to 
maintain, as far as possible, the environmental benefits envisaged in th e original Directive, 
whilst taking into account the changed circumstances with regard to the current economic 
situation, and the desirability of mainta ining the competitiveness of the industry. 
3.2. Developing New Engine Technology  
Engines compliant with Stage IIIB emission limits  are going to be progre ssively placed on the 
market as of 2011 (see Annex III  for the details of the timing of stages across engine 
categories).  
Substantial changes to the design of engines are necessary to meet the stringent emission 
limits of Stage IIIB. Engines must be fitted with electronic control systems that deliver fuel at 
high pressures at the right time and in the righ t quantity for a cleaner burning process in the 
combustion chamber. In addition new, sophistic ated after-treatment systems and increased 
cooling capacity are necessary. These engine modi fications have implica tions on for instance 
the mass and the size of the e ngines and on the location of its components, like connectors. 
This means that also the configuration of the tractor body (the chassi s parts) in which the 
engines are installed need to be  redesigned in order to accommodate a new engine. For tractor 
manufacturers this implies that they are not ab le to develop and design the tractor until the 
engine is ready, i.e. until the dimensions  and mass of the engines are known.  
3.3. Ability to Comply 
Since technical solutions for Stage IIIB engine s are in general not yet finalised, tractor 
manufacturers are not in a posi tion to fully redesign the body of  the tractor where the engine 
is to be installed. The research on technologi cal solutions, followed by the redesign of the 
engine, testing its performance both in terms of the emissions requirements and aspects like 
maintenance and durability can easily take 5 to 10 years. The original schedule allowed five 
years (2005 – 2010) for this process. This timetab le was probably feasible in order to allow 
the manufacturer to develop technical solutions, but the implementation of these solutions throughout a complete range of engines may pr ovide a greater challenge, depending on the 
basic configuration of the engine . In addition, for tractors it is  important to note that the 
complexity of the redesign varies depending on different tractor types. 
For some of them, the Stage IIIB emissions requirements will not pose very significant 
problems for tractor manufacturers. For other types, a Stage IIIB compliant engine is far from being finalised and thus the tract or manufacturers have not been in a position to redesign their 
tractors accordingly. 
Tractor manufacturers, producing tractors with engines of different pow er categories, are at 
various degrees of readiness depending very mu ch on the range of products they manufacture. 
It is not possible to gi ve a detailed overview of the state of preparation of each company/sub-
EN 15   EN sector as such information at that level of deta il is not available. Despite many efforts made to 
obtain data on the level of  preparedness of various actors for the next stage, the industry was 
reluctant to disclose such sensitive informati on for reasons linked to commercial interests.  
Based on information received from the tractor  manufacturers, the time required for the 
adaptation of tractor bodies ranges between 12 and 18 months in order to ac commodate the 
new IIIB engine and the accompanying after-treatment system. The exact duration of the adaptation period depends on the number of tr actors produced with va rious engines and the 
types of tractor in each engine power category.  
Apart from the redesign of the body, the adaptation of the tractor production line (additional 
space, raw material handling and storage, costs etc) must also be finalised in the same 
adaptation period. At the end of this period th ere could be two produc tion lines, one for a 
Stage IIIA compliant tractor a nd one for Stage IIIB (see also  point 2.1 on non-EU markets). 
Operating two production lines means that the ma nufacturer will need more operating staff, 
space, equipment and support, thus additional costs. 
Technical solutions for tractor manufacturers still need to be f ound and consequently 
increased R&D efforts are necessary.  
Engine manufacturers: in June 2010 the Commission learned that the first engines for tractors 
have now been approved for Stage IIIB. 
Integrated manufacturers: There are four inte grated manufacturers (who produce at least for a 
part their own engines and who also produce the tractors). Acco rding to anecdotal evidence, 
one integrated manufacturer hopes to have tract ors ready by the required deadlines. Others 
confirm not to be ready with engine approval nor with tractors. CEMA, with support of the 
manufacturer who might be read y by the imposed deadlines, maintains that the sector still 
needs the requested action. 
Therefore, with the best information availabl e today and while engines may be ready by 2011 
and after-treatment systems are ready today for most purposes, most tractors will not be ready 
to be fitted with such engines by the deadlines specified  in the currently a pplicable legislation. 
3.4. Compliance costs 
The compliance costs for tractor manufacturers to cope with the new emission limits are 
significant. These include costs for research an d development, redesign of equipment, after 
treatment devices, documentation and labelling, et c. The external contractor has put a lot of 
effort in obtaining data as liste d in his report; for the present project this did not bring any 
useful result. The same applies to additi onal efforts by DG Enterprise although one 
manufacturer estimated to have spen t € 1,5 billion on R&D for Stage IIIB. 
Existing Stage IIIA production lines may cont inue to be used – depending on demand for 
tractors  with IIIA engines from third countries that  do not have the same exhaust emission 
limits like the EU or the USA. In th is case new production lines for tractors  with IIIB engines 
must be set up with additional cost of equi pment and personnel (hiring, training etc). For 
other costs than R&D no data have been made available. 
EN 16   EN 3.5. Regulatory issues 
The original directive on tractors emissions  was introduced in 2000 and its decisions on 
deadlines and criteria were based on data available at that time. 
The strict timetable of transiti on from Stage IIIA to Stage IIIB  with a duration of only 3 years 
compared to the 5 years of transition from Stage II to Stage IIIA (see Annex III ) may have 
been too ambitious for developing technical solutions for tractors to meet Stage IIIB 
requirements. The ch anges in PM and NO x limits are substantial, as can be seen in Annex III, 
last table: for PM, a reduc tion by 88 to 94 % is required. 
This was recognised in 2005 in Directive 2 005/13/EC and the flexibility scheme was 
introduced as a solution.  
3.6. Influence of the economic crisis  and other relevant factors 
From early 2009 onwards most of the EU based industry producing tractors  has been 
unexpectedly and severely hit by the global financ ial and economic crisis. Steep falls in sales 
caused a large decrease in income and availabl e capital to finance th e necessary technology 
research and development for tractors  with Stage IIIB compliant  engines in all power 
categories and applications within the time limits in the Directive. Firms prioritise their R&D 
expenditure to cover firstly those products with high existing and potential sales volumes. 
These sales then provide the business with reve nues that can be used for R&D in order to 
develop technical solutions for smaller niche markets.  
For tractors  the market in Europe starte d to drop sharply in the 1st  quarter of 200931; the sales 
over the year 2009 have dropped by 20 % in units compared to 2008 (approximately 180 000 
in EU15 for 2008. No figures are available for EU12;  for all tractors this  is estimated to be 
15% of the total). According to CEMA th e turnover in 2009 decreased by 20 to 25% 
compared to 2008. This is the consequence of  the decrease in downstream demand. For 2010 
tractor manufacturers are expecti ng a further 5 to 10% decrease32. Figures for the 1st quarter 
2010 show a 22% decrease compared to 2009. 
Clients of tractor manufacturer s are currently much more prudent towards buying new tractors  
as a result of the economic climate, including the lower prices that farmers generally get for their products. For various products like oats, wh eat, barley etc the lowest price level in 10 
years according to AGRIVIEW (EC-AGRI). CEMA reported a drop in farm income for 2009 
of 12% for EU27, up to 25% for Italy and 21 % for Germany, compared with 2005 (source: 
EUROSTAT). Users cut capital costs by extending the use of old tractors  and not purchasing 
newer, cleaner tractors, thus causing a larger ne gative environmental impact in the short term. 
The end-user may not be able to buy a new trac tor, at least not from his regular source, 
because of unavailability of a compliant type from his manufacturer. As a consequence he 
                                                
 
31 Reference: CEMA letter ''Background material for the Request to Enlarge Flexibility from 20% to 50% 
for Stage IIIB'', 14-07-2009, addressed to Commission Services. Additional information on market 
share can be found in the study 'Competitive analys is of the EU Mechanical Engineering', p. 4, 
available at the link: http://ec.europa.eu/enterprise/mechan_equipment/companalysis-eu-mechengin.pdf 
32 Email from CEMA to ENTR-F.1 dated 18.02.2010. 
EN 17   EN will have to continue using his old tractor, which is even more polluting than the IIIA tractors. 
Alternatively he could buy a used, older tractor, with poor emission performance. 
The old tractors will be more costly in maintenance and fuel consumption, as well as less 
efficient in performing the work. For some a dditional information on increased maintenance 
costs, see Annex XI. However, th ere are severe limitations to th e available data, such that no 
estimate can be provided on the overall magn itude of increased maintenance cost. 
3.7. How will the situation develop? 
If the current regulatory framework is maintained  without additional measures to alleviate the 
burdens of the crisis, the follo wing developments are expected: 
• Tractor manufacturers will place tractors on the market under the currently allowed 
flexibility scheme of 20% until the completion of this allowance. Only a limited number of 
new tractor types compliant with Stage IIIB will  be available in early 2011. Users / buyers 
will have to postpone buying a new tractor of their choice, change to another brand (if 
available) or buy a used tractor. 
• Due to the drop of sales, the funds to furthe r develop and finalise th e required adaptations 
of tractor bodies and production lines will no t be available as estimated and planned 
incoming cash flow will be limited. 
• One likely course of action will be that the tractor manufacturers will reduce the number of 
types of tractors they produce, to cut complian ce costs, which will consequently lead to the 
loss of the market and of customers, maki ng tractor manufacturers' future incoming cash 
flows smaller.  
• In order to fund their activitie s, tractor manufacturers usually tend to turn to the financial 
institutions for loans. However, in particul ar against an environment characterised by a 
general financial crisis, banks are expected to more systema tically require a solid turnover 
in order to provide financing. The risks of  funds not being obta ined are increased. 
• The tractor manufacturers, after having exhausted the flexibility allowance would not be in 
a position to produce next stage compliant trac tors as they would not generate revenues 
from sales necessary to cover expenditure on R&D and would thus not have a product to 
place on the market.33 
• This would negatively a ffect not only tractor manufacturers and their suppliers but also end 
users. End users (farmers and contract work ers) would not be able to purchase any new 
tractor where a IIIB compliant tractor model is  not available when the new stage enters 
into force. This would mean that the only wa y to buy a tractor would be through the second 
hand market. Such tractors would only co mply with earlier emission limit stages. 
                                                 
33 In the extreme case of 0% compliance this would be the case after 2,4 months; the allowed 20% would 
then be fully used. 
EN 18   EN 3.8. Does the EU have the right to act? 
The legal basis of this initiative is the sa me as for the tractors emissions Directive 
2000/25/EC, namely Art. 114 of the TFEU.  
The Directive already harmonises the laws of the Member States relating to emission limits 
and the type-approval procedure fo r engines to be installed in tractors. Any modifications to 
the Directive can only be done at EU level.  There is, however, a risk that Member States 
might resort to national measures once the curr ent flexibility scheme is exhausted and no 
more tractors can be put on the market. This might lead to a fragmentation of the internal market and unlevel playing field between different Member States. 
Therefore EU action is necessary and provides va lue added in maintaining the internal market 
for tractors. 
4. 
OBJECTIVES  
The general objective  of the proposal is to maintain the internal market for tractors 
and to maintain a high level of environmental protection.  
The table 1 below describes the genera l, specific and operational objectives. 
GENERAL SPECIFIC OPERATIONAL 
1. Maintain the 
functioning of the internal market for tractors 
 1. Maintain a level playing field 
for tractor producers by upholding a harmonised regulatory framework across all Member States (and thus eliminating the risk of national deviations). 
2. Prevent the foreseeable 
aggravation of an already difficult economic situation for the tractor industry that has been caused by the economic crisis. 
3. Ensure that demand for new 
tractors can be satisfied by industry. 1. Introduce a cost-effective and 
timely measure that will allow EU producers to keep selling tractors under the same rules across the EU and will allow users to replace end of life tractors.  
2. Allow tractor manufacturers to 
generate revenues that can be used to invest in the necessary R&D to comply with foreseen emission limits. 
2. Protect the environment  
 1. Reduce the risk that older, 
more polluting (pre-Stage IIIA) tractors cannot be replaced by newer cleaner tractors, i.e. make sure that the potential for emission reductions from replacing end of life tractors is 1. Enable the replacing of older, more 
polluting and fuel consuming engines and tractors by cleaner ones by adjusting the emission requirements in such a way that demand for new tractors can be met by the cleanest available models.  
EN 19   EN not jeopardised. 
2. Maintain the incentive for the 
industry to invest in R&D necessary to develop cleaner tractors compliant with the foreseen future emission limit stages.  2. Send a clear signal to industry that 
further emission reductions are required and that the current path of reducing emissions is maintained. 
 
4.1. Consistency with other horizontal objectives of the European Union 
4.1.1.  The European Economic Recovery Plan and EU2020 Strategy 
The present proposal is in lin e with the objectives of the EU 2020 Strategy and complements 
the European Economic Recovery Plan (EERP)34. Adopted in November 2008, the EERP 
addresses the difficulties of the wider econom y brought about by the global financial crisis. 
The Plan outlines a series of measures to cope  with the squeeze on credit, declining sales and 
revenues. It refers inter alia to the need for a swift stimulation of demand and consumer 
confidence as well as measures to lessen the human cost of the economic downturn and its 
impact on jobs. The EERP high lights the need to ensure full coherence between immediate 
actions and the EU’s medium- and longer term objectives.  
Such immediate action needs to focus on improving business conditions through maintaining 
the competitive industrial base and through promoting knowledge based and low carbon economy as set out in the EU2020 Strategy.  
4.1.2.  Environmental EU Policies 
The tractors emissions Directive, which provides  an important contribu tion to a progressive 
reduction of targeted emissions, is also in li ne with the EU environmental policies, in 
particular with the Sixth European Environmen t Action Programme and one of its initiatives - 
Clean Air For Europe (CAFE). The initiative sets out an integrated and long term strategy for 
reducing the adverse impact of air pollution on human health and environment. These 
objectives are implemented through Directive 2008/50/EC
35 on ambient air quality and 
"Cleaner Air For Europe" which establishes a sy stem for the assessment of ambient air quality 
and provides thresholds for each pollutant. Member States have to assess and manage the 
                                                 
34 COM (2008) 800 
35 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air 
quality and cleaner air for Europe (AAQD) entered into force on 11 June 2008. It merges existing 
legislation into a single directive with no change to existing air quality objectives for PM 10 and NO x 
contained in Directive 1999/30/EC; maintains two limit values for NO x based on hourly and annual 
average concentrations; sets (new) air quality objectives for PM 2.5 including the limit value and 
exposure related objectives – exposure concentratio n obligation and exposure reduction target; creates 
the possibility for time extensions for compliance up until June 2011 for PM 10 (where the limit values 
entered into force on 1 January 2005 ) or up until 31 December 2014 for NO 2 and benzene) based on 
conditions and the assessment by the European Commission. Single most important condition is that the 
notification must include an air quality plan that delivers compliance by the extended deadline for compliance. 
EN 20   EN ambient air quality. Besides this instrument it remains important to combat emissions of 
pollutants at the source and to implement th e most effective emission reduction measures.  
5. POLICY OPTIONS  
5.1. Introduction 
The issues highlighted in the problem definitio n and the subsequent objectives warrant an 
interim measure to mitigate the impact of the economic dow nturn. The options described 
hereafter are based on the recent IA for Non-Ro ad Mobile Machinery. In addition a scrapping 
scheme is also considered based on e xperience with the pa ssenger car sector. 
It should be emphasised, that it is not envisage d to introduce an amendm ent to the flexibility 
scheme for the transition from Stage IIIB to IV. According to industry, the R&D work for 
Stage IIIB is at the same time a good basis for getting Stage IV approvals in due time. It is 
therefore expected that adaptation costs for tr ansition from Stage IIIB to Stage IV will be 
significantly lower than those from Stage IIIA  to Stage IIIB; therefore the Commission 
services consider that no additional flexibility  is needed for the transition to Stage IV.  
5.2. Options 
• Option 1 - No action = Baseline scenario 
The provisions of the current flexibility sche me remain unchanged, i.e. 20% (or absolute 
numbers of engines) continue to apply.  
• Option 2 - Provision of government backed  loans for purchasing stocked engines 
manufactured under the so called sell-off period 
Article 4 of Directive 2000/25/EC states that 'requirements shall be postponed by two years in 
respect of engines with a productio n date prior to the said date ', the 'said date' being one of the 
deadlines specified in point 2 of that articl e, after which non-compliant engines and tractors 
shall not enter into service anymore. 
While Stage IIIA is in force, industry may produ ce engines and tractors and stock them in the 
EU territory. These Stage IIIA engines and tractors are manufactured to keep industries running and to cover the needs of other count ries that do not have exhaust emissions 
limitations as strict as EU. After the beginning of implementation of Stage IIIB (between 1-1-
2010 and 1-1-2013 depending on the pow er category) these stocked engines and tractors may 
be placed on the market for a period of two y ears. This option suggests the use of government 
backed loans in the form of loan guarant ees provided by Member States to tractor 
manufacturers in order to enable them to  purchase Stage IIIA engines on stock.  
• Option 3 - Implementation of a scrapping scheme. 
The use of a scrapping scheme would be a subsi dy, given as an incentive, to the user to buy 
new tractors with a Stage IIIB engine.  
Under this option, the owner of an older, more polluting tractor will deliver the tractor for 
scrapping (destruction-recycle etc) . A national public authority w ould grant a lump sum to the 
EN 21   EN owner of the scrapped tractor. The owner will receive the money via banking or the tax 
system when the purchase of new the tractor is proven. 
• Option 4 – Implementation of alternative type s of provisions under th e existing flexibility 
scheme 
Under this option additional flexibility will be granted for the transition from Stage IIIA to 
Stage IIIB. No additional measures for future stages are envisaged. Several different sub-options are considered: 
- Option 4.1  - Implementation of a scaled percentage of  the flexibility scheme for the various 
categories of tractors, depending on the particul ar transitional problems from Stage IIIA to 
Stage IIIB plus a similar approach with regard to  the fixed numbers of engines as set in Table 
2.  
- Option 4.2 - Increase of flexibility percentage  to 35% for all tractors and proportionate 
adjustment of the fixed numbers of engines.  
The maximum number of engines placed on the ma rket under a flexibility scheme is increased 
to 35%  (midway between 20 and 50%) of the manufact urer's past annual sales of tractors 
with engines in that power category.  
The tractor manufacturer would have the choi ce to alternatively not exceed the fixed 
maximum number of engines (see Table 2 and Annex IV).  
The system of flexibility and fi xed numbers is explained in Annex IV, with calculation of new 
fixed numbers for 35, 50 and 80% flexibility. 
- Option 4.3 - Increase of flexibility percentage  to 50% for all tractors and proportionate 
adjustment of the fixed numbers.  
The maximum number of engines placed on the ma rket under a flexibility scheme is increased 
to 50%  of the tractor manufacturer's past annual  sales of equipment with engines in that 
engine category. This change would be cohe rent with the Commission's proposal for the 
NRMM sector. 
The tractor manufacturer would have the choi ce to alternatively not exceed the fixed 
maximum number of engines (see Table 2 and Annex IV). 
This new percentage or the amended fixed num ber of engines may be distributed, according 
to the tractor manufacturer's production pl an, over the duration of Stage IIIB.  
Initially a figure of 40%  was proposed as an option to be further investigat ed for mobile 
machinery, in order to amend the provisions of th e flexibility scheme dur ing the first steps of 
the Technical Review of the Directive in 2006. This initial figure was decided via numerous 
consultations with contributions from Member States, industry and va rious stakeholders. It 
was assessed as the figure that would ge nerate sufficient revenues for the tractor 
manufacturers in order to fund the R&D and comp liance costs for the transition from Stage II 
to Stage IIIA and have the le ast environmental burden. During the course of the Technical 
Review however and after rea ssessing the non-road inventory, as mandated in Article 2 of 
Directive 2004/26/EC, it emerged that an increase  to 50% would be needed in order to allow 
EN 22   EN manufacturers to comply with the Directive. It was considered, additionally, that the new 
figure would provide better alignm ent of the EU provisions of the flexibility scheme to the 
ABT system used in the USA (see 1.4 above). 
For those engines in power categories for which no Stage IIIB and/or IV exists and for those 
engine categories where implementation of Stage IIIB starts at a later date than 1 January 
2011, a time limit should be included  so as to restrict the placi ng on the market of tractors 
under the revised flexibility scheme until 31 Decemb er 2013. This date is selected in order to 
comply with the main objectiv e of the proposal: to alleviat e the burden of the current 
economic crisis and to provide a 'similar' three years time of implementation of the flexibility 
scheme to all engine power categories si nce starting time of Stage IIIB differs. 
- Option 4.4 - Increase of flexibility percentage  to 80% for all tractors and proportionate 
adjustment of the fixed numbers of engines.  
The maximum number of engines placed on the ma rket under a flexibility scheme is increased 
to 80%  of the tractor manufacturer's past annual  sales of equipment with engines in that 
power category. This option would s eek to align the European system  of flexibility to the U.S. 
ABT system to the largest extent possible while  still maintaining a fundamentally different 
system (no averaging, banking or trading in the EU). As mentione d earlier, the U.S. system is 
similar to granting flexibility of 80% in the EU system. 
The tractor manufacturer would have the choi ce to alternatively not exceed the fixed 
maximum number of engines (see Table 2 and Annex IV). 
Table 2: Maximum number of engines to be sold under the current and the revised flexibility schemes 
Engine 
category  
(kW) Number of engines 
(existing scheme up 
to Stage IIIA, 20%) Number of engines 
(revised scheme for 
transition from 
IIIA to IIIB, 35%) Number of engines 
(revised scheme for 
transition from 
IIIA to IIIB, 50%) Number of engines 
(revised scheme for 
transition from 
IIIA to IIIB, 80%) 
19-3736 200 - - - 
37-56 140 200 320 
56-75 150 
123 175 280 
75-130 100 175 250 400 
130-560 50 88 125 200 
 
- Option 4.5 - Conditional expansion of the flex ibility scheme, with penalty mechanism.  
                                                 
36 Stage IIIB is not applicab le to this power category. 
EN 23   EN In order to maintain the incentives to deve lop Stage IIIB engines, a system could be 
introduced where additional flexibility used in th e transition from stage IIIA to Stage IIIB will 
trigger payment of a penalty  after several years.  
This would maintain the incentive for the tracto r manufacturers to develop tractors with IIIB 
engines and use only the minimum a dditional flexibility they need. It requires a penalty to be 
set at the right level. 
A variant of this option would be to not have a financial penalty but to deduct any additional 
flexibility used for the transition from IIIA to III B from the flexibility that will be available 
for the transition from IIIB to IV (20%). 
- Option 4.6 - Implementation of a trading system  A system similar to that of the EU Emissions  Trading Scheme could be developed for the 
flexibility measure. A system could be esta blished whereby firms th at would not use the 
entire flexibility could sell their flexibility right s to firms that need additional flexibility. This 
scheme would require a mechanism to sell flex ibility (permits) and a system in place to 
monitor the scheme. The price of each permit of flexibility would be determined by the 
market.  
- Option 4.7 - Replace the flexibility scheme by a combination of flexibility for tractor 
manufacturers and ABT, as applied in the USA. 
An ABT scheme similar to the one used in  the USA could be developed for engine 
manufacturers, together with a flexibility  scheme for the tractor manufacturers. 
6. O
PTION ANALYSIS – PRELIMINARY ANALYSIS  
This IA will assess the options in a qualitative way with respect to the criteria of efficiency, 
effectiveness, coherence and feasibility in orde r to establish a prefe rred option. The preferred 
option will then be analysed in greater deta il with respect to the economic, social and 
environmental impacts.  
6.1. Analysis of Option 1 – Baseline 
The situation under the baseline scenario would be as follows: engine manufacturers (around 
10 companies in the EU) will continue the engi ne development programme that was started 
following publication of the amending directiv e in 2005. A variation of technologies was 
known in principle, ranging from optimising th e engine (internal combustion aspects, high-
pressure injection in stead of diesel pumps etc) to various options for after-treatment, all with their advantages and drawbacks. The known technol ogies also needed to be adjusted to the 
specific application of the tr actors and their working enviro nment and conditions, compared 
to road vehicles for which they were often developed. Based on the fact that most engine 
manufacturers are independent from the tractor manufacturers, the latter will have to adapt 
their vehicles once the design of the engine is final (normally: after it ha s been shown that the 
engine has been approved compliant with the dire ctive). Only in the few cases of "integrated" 
manufacturers, who produce their own engines, the adaptation of the tr actor design (and its 
production line etc) can be done earlier. 
EN 24   EN The policy option of doing nothing would not be effective in re aching the objectives for the 
reasons described in section 3.7. To recall,  by doing nothing industry would continue to 
struggle in the current economic climate and w ould not have tractors ready for Stage IIIB. 
Industry would then not be able  to place products on the market beyond what is offered in the 
20% flexibility scheme; they may have to close down certain product lines if they are not able 
to get their products adapted to the new stage of requirements; they will not be allowed to sell 
their Stage IIIA co mpliant tractors. 
Some firms would subsequently go (temporarily ) out of business which would lead to job 
losses. Especially for SMEs this might mean ri sk of closing down thei r business, due to the 
limited number of products a nd their limited resources 
The baseline scenario assumes that industr y will in general be unable to fund the R&D 
necessary for Stage IIIB. Most companies face serious difficulties to finance the investment necessary to ensure compliance of e quipment with IIIB emission limits.  
6.2. Analysis of Option 2 - Provision of government backed loans for purchasing 
stocked engines manufactured under the so called sell-off period. 
Due to the economic crisis, private banking ins titutions are reluctant to  provide credit to 
industry. A government backed loan (in form  of a loan guarantee offered by national 
administrations or the European Investment Bank), would enable tr actor manufacturers to 
purchase engines from an engine manufactur er, stock them and continue selling IIIA 
compliant tractors  after the entry into force of the st age IIIB. The revenues generated from 
these sales would enable tractor manufacturer s to finance the R&D necessary to develop 
Stage IIIB tractors . 
Moreover, the incentive to produce more Stage IIIA  engines would result in a large number of 
Stage IIIA engines being produced and bought  by tractor manufacturers, instead of the 
development of cleaner Stage II IB engines; this would act as  a counter incentive to innovate 
and develop more environmentally friendly machines.  
There would also be the risk that extra demand  for stocked Stage IIIA engines might lead to 
higher prices for those engines in the short term  (particularly due to capacity constraints), 
which would subsequently requi re increasing the level of loans requested by tractor 
manufacturers. One other important issue related to the use of stocked engines is that special 
treatment
37 is required for those engines that had been stocked for over three months. Such 
treatment is time consuming, costly and can reac h up to 5% of the sale  price of the engine.  
Therefore this option is not f easible as a timely measure.  
In addition, this option raises i ssues regarding compatibility with  the EU state aid provisions. 
                                                 
37 When the engine is manufactured to be stocked, it is  filled with a special oil. When it is placed on the 
tractor, this oil must be changed to a specific one and then with a specific fu el the engine is kept 
running for a few hours. After that period the oil must be changed again to normal and with a normal 
fuel it must run for some time and then it is ready and safe to be sold. The required time and cost of the procedure depend on the size of the engine and its power. 
EN 25   EN 6.3. Analysis of Option 3 - Implementation of a scrapping scheme (on a national 
basis) 
The use of a scrapping  subsidy will provide an incentive to the users to buy new tractors  with 
a cleaner Stage IIIB engine, under the condition that  they officially destroy their older, more 
polluting tractor .  
This will encourage the purchase of Stage IIIB tractors  and will have positive environmental 
impacts. However, it will not assist tractor ma nufacturers in financing the R&D to make Stage 
IIIB tractors available. Whether the prospect of a scrapping scheme would be sufficient to 
induce banks to hand out additional loans to tractor manufacturers for R&D remains doubtful. 
In addition, if Member States implemented the scrapping scheme in different ways, this could 
lead to a fragmentation of the internal market and to distortion of competition. 
In any event, no plans from any MS to introduce a scrapping scheme for this sector are known 
to the Commission and given the currently ti ght national budgets, no financial means might 
be available for it.  
6.4. Analysis of Option 4 – Implementation of alternative types of provisions under 
the existing flexibility scheme 
6.4.1.  Option 4.1 - Implementation of scaled percentages of fl exibility for the 
different types of tractors, depending on the problems they encounter for the 
transition from Stage IIIA to Stage IIIB. 
Industry's priority is to develop initially tractors  that face fewer problems and for bigger sale 
volumes and to progressively address smalle r niche market tractors with weight and 
dimension constraints. Therefor e, an alternative allowance unde r the flexibility scheme for 
each one of these categories of tractor  would be a logical solution. 
There is no specific inventory of the tractors in each category when placed on the market nor 
a relevant system to survey the number of  sales. The current system, surveying the 
implementation of the tractors sold using flexibility does not require such detailed 
information. 
However, gathering information on the amount of problems for each specific type of tractor is 
very difficult. It is a common approach for engine and tractor development to use the 
experience and progress gained from one type to  another. The implementation of this option 
would require the deliver y of sensitive inform ation to the Commissi on, to be used as a 
background for determining figures  of alternative flexibility. 
This measure would optimise the trade-off between environmental costs and economic 
benefits within the flexibility scheme provide d there was perfect information on the basis of 
which a decision on how to allocate flexibility could be taken. However, this information is 
not available and this makes this option unfeas ible. It will therefore not be analysed any 
further as being unfeasible. 
EN 26   EN 6.4.2.  Option 4.2 - Increase of flexibility percentage to 35% and proportionate 
adjustment of the fixed numbers of engines.  
As to effectiveness 35% would not alleviate the burden for manufacturers enough. In addition 
this would not be coherent with the solution c hosen for NRMM, where both sectors are facing 
the same situation. As to environmental effect s the option would lead to slightly more IIIA 
tractors coming on the market (see: table 2 fo r exact numbers), thus a negative effect on 
environment, but on the other hand these IIIA  tractors would mostly replace more polluting 
older tractors. The same would apply to safety  and efficiency of these tractors: a slight 
positive effect when compared to the baseline. 
6.4.3.  Option 4.3 - Increase of flexibility percentage to 50% and proportionate 
adjustment of the fixed numbers.  
Allowing an extended flexibility in  all tractor categories will facilitate the adjustment process 
to stage IIIB by allowing tractor manufacturers to not have to redesign all tractor models at 
once. The additional flexibility does not require  any up-front payments from industry. This 
change would be coherent with the Co mmission's proposal for the NRMM sector. 
However, there would be environmental harm fr om allowing more Stage IIIA tractors on the 
market. The environmental impacts will be analysed in detail in section 7.1. 
6.4.4.  Option 4.4 - Increase of flexibility percentage to 80% and proportionate 
adjustment of the fixed numbers of engines.  
This option would allow industry to  put existing tractors  on the market to a larger extent than 
options 4.2 and 4.3. It should therefore lower co mpliance costs of industry and allow more 
time to carry out the required R&D. In addition, this option would further align the EU system 
to the U.S. system, even though this is much more complicated and cannot be used in the EU. 
However, this option would lead to additiona l environmental harm by allowing more Stage 
IIIA tractors on the market than necessary for industry to overcome the problems relating to 
introduction of the new emission limits at this ti me of crisis. In line wi th the reasoning given 
in footnote 39, if all of the flexibility was used  straight away in the current 20% flexibility 
scheme then the manufacturer could delay usi ng Stage III B by 10 week s; instead, under 80% 
flexibility the manufacturer can delay by 40 weeks. Therefore, assuming constant sales, this is 
an extension of 30 weeks (if he would use the full allowance for all types straight away). 
Industry representatives have informed the Co mmission services that 50% flexibility would 
be all that is necessary for industr y to comply with the Directive. 
To cause unnecessary environmental damage woul d not be consistent with the fundamental 
environmental policy objectives of the EU. In addition this would not be coherent with the 
solution chosen for NRMM (50%), while bot h sectors are facing the same situation. 
6.4.5.  Option 4.5 - Conditional use of the fl exibility scheme, with penalty 
mechanism. 
The users of the additional flexibility for transi tion from Stage IIIA to  IIIB would be subject 
to a penalty. This could either take the form of a financial penalty that would need to be paid 
EN 27   EN at a later point in time or, alte rnatively, it could be a "penalty" in kind that would consist of a 
reduction of future flexibility, e.g. for the transition from Stage IIIB to Stage IV. 
This approach would limit concerns that comp etitive distortions may occur from enlarged 
flexibility. For instance, those firms that have al ready invested in getting Stage IIIB compliant 
tractors  ready could be at a competitive disadvant age compared to those that have not 
invested yet; as the ones who ar e ready, are going to have to price their products to recoup 
their investments. This system would theref ore reduce the adverse incentives of Option 4.3. 
However, there is a lack of information available and complications that makes this option unrealistic: No information exists that woul d help to determine th e correct amount of a 
penalty that would incentiv ise tractor manufacturers to limit the amount of additional 
flexibility to the optimal level from an environmental and economic point of view. 
Furthermore, there is a risk that a firm would use the maxi mum established percentage under 
the enlarged flexibility scheme to gain the a dvantage for the transition from Stage IIIA to IIIB 
and then if obliged to pay a pe nalty, it could be tempted to cha nge name or ownership status 
to avoid paying it.  
Moreover, it is noteworthy that  according to the industry, Stag e IV engines will be based 
mostly on those compliant with Stage IIIB. It is  therefore expected that adaptation costs for 
transition from Stage IIIB to Stage IV will be lower than those from Stage IIIA to Stage IIIB; therefore the Commission services consider that no additional flexibility (above the 20% 
already included in the Directiv e for stage IV) are necessary.  
Further, creating and implementing such a sy stem would place additional administrative 
burden on MS since they have to put a system in place to either impose the financial penalties later or to manage databases that would allow to determine how much flexibility needs to be 
reduced per power category for each manufacturer in the next transition phase from IIIB to 
IV. If the measure was to be harmonised and implemented with the same terms to all MS, 
additional costs and problems would arise re garding funding resources, notification and 
surveillance costs in EU level, translation co sts, etc. The implementation cost of such a 
measure would be substantial. Therefor e this option is considered unfeasible. 
6.4.6.  Option 4.6 - Implementation of a trading system. 
This option foresees a scheme in which firms th at require additionally flexibility buy it from 
those that do not need it. This  option has the effect  of maintaining the incentives to innovate 
for those firms that have the lowest cost to do so while at the same time allowing firms with higher costs to comply with the tighter emission limits to postpone the ad justment (at least for 
some models). Such an option would set incentives  to innovate at an efficient level. The price 
of the permit would be determined by the mark et and would reflect th e costs of development 
to comply with Stage IIIB (on the margin, i.e. for the firm that is just indifferent between 
using flexibility or selling it): if it was cheaper for a firm to spend the extra resources to reach 
Stage IIIB rather than purchase the flexibility, then they would not buy the flexibility but they 
would invest in R&D instead. 
As in the case of government backed loans, a tr ading system would be very complex to put in 
place in a short time. This would not be effect ive in meeting the immediate requirements of 
industry. Additional EU and national resources w ould be required to set up and regulate this 
system. This scheme would not help the firms who are experiencing problems in cash flow to 
EN 28   EN dedicate to R&D to reach Stage IIIB. Those fi rms not ready for Stage IIIB would either have 
to pay for flexibility or for additional R&D. 
6.4.7.  Option 4.7 – Introduction of ABT scheme. 
Alternatively an ABT scheme for engine manuf acturers similar to the one used in the USA 
could be developed, together with a flexibil ity scheme for the tractor manufacturers. 
Advantages of ABT would be th at manufacturers that are quic k with their new products can 
build up credits, to be used to compensate for their engine types that are not yet compliant, or can be sold to competitors that are slower. Also, use of an ABT system might allow an earlier introduction of new requirements.  
The introduction of an ABT system in the EU was proposed when the amendments to 
Directive 2002/88/EC were discussed. However, th is idea was rejected by Member States and 
Parliament because it was too complex for impl ementation in the legislation of MS and too 
difficult to monitor. In addition it would not work for smaller ma nufacturers. To be noted that 
ABT would bring serious admini strative burden to manufacturers , who have to predict their 
production in different engine families befo re the year (numbers, engine emissions 
performance etc) and calculate the outcome at the end of the year, keeping records of all 
shipments. National authorities would have to check these. 
6.5. Comparison of the Options  
The options will now be qualitatively assessed against their effectiveness, efficiency and 
coherence in meeting the objectives. A table with  a detailed comparison of the options can be 
found in Annex X . A summary comparison is pr esented in Table 3 at the end of this chapter.  
The opinion of the stakeholders is reproduced in Annex V . 
• Option 1 - No action = Baseline scenario 
A no-action option is not effective in reaching th e objectives as industry  would continue to 
struggle and would not have compliant tractors ready for Stage IIIB. 
• Option 2 - Provision of government backed  loans for purchasing stocked engines 
This option would provide tracto r manufacturers with the access to finance the purchases of 
Stage IIIA engines and would al low them to continue to ge nerate revenue necessary to 
develop Stage IIIB compliant tractors. Howe ver, the control of stocked engines and 
surveillance by type approval authorities of Member  States is close to impossible, since such 
a surveillance system currently does not ex ist and it would require time and financial 
resources to be established, cer tified and operated in practice.  This scheme is similar in its 
effect to extending flexibility by allowing tracto r manufacturers to put Stage IIIA compliant 
engines on the market during Stage IIIB, but will front load engine sales which could 
introduce capacity constraints fo r the production of Stage IIIA e ngines. This option would be 
more expensive for tractor manufacturers due to the stocking (additional fees and 
transportation costs) involved, it is much more  difficult to monitor by au thorities and includes 
the associated administrative costs of pr oviding loan guarantees and the actual loans. 
Therefore this option is not e fficient compared to option 4.3.  
• Option 3 – Implementation of a scrapping scheme 
EN 29   EN A scrapping scheme will stimulate demand for St age IIIB compliant tr actors but will not 
assist in helping tractor manufacturers develop compliant tractors; it may be effective in reaching environmental objectives on condition that the scheme as well as compliant tractors 
are available. Substantial funds will be requ ired to provide loans under a scrapping scheme, 
which may at present not be available and distor tions of the internal ma rket could occur from 
diverging national schemes. If technical solutions are not yet available a scrapping scheme 
will not work. It raises additional concerns regarding compliance with state aid rules.  
• Option 4.1 - Implementation of a scaled pe rcentage of the flexibility scheme  
This system would be effective and efficient in  meeting the objectives and providing targeted 
support where additional flexibility was require d. However, there is no specific inventory on 
which these assessments could be made, th erefore, this system is not feasible. 
• Option 4.2 - Increase of flex ibility percentage to 35% 
Similar to what is described below for option 4.3, with the following differences: 35% would 
not be coherent with the NRMM proposal ( 50%); it would bring less reduction of the 
distortion with the US market; for impact on the environment this  option would be the 
equivalent of a 13 week delay in  the introduction of Stage III B.  For safety and efficiency of 
working with the tractors this option is better th an the baseline (as more  of the older tractors 
will be replaced by Stage IIIA tractors which are also modernised and improved in these respects), but less than option 4.3. 
• Option 4.3 - Increase of flex ibility percentage to 50% 
A uniform increase to 50% would avoid the in formation issue from the option 4.1 and would 
provide assistance to industry in  the short term. This additional flexibility could be introduced 
without setting up any new systems and therefore could provide an immediate response to the 
crisis. The option would be coherent with NRMM and reduce the distortion with the US 
market where an even larger flexibility is allowed. 
To put this extension into contex t, the 50% flexibility is the e quivalent of a 16 week delay in 
the introduction of Stage III B
38 (if the manufacturer would choose  to use the flexibility for all 
of his models fully from the start date). If a tractor manufacturer will not be in a position to 
produce Stage IIIB engines after the use of its allowance of 50% of engines of Stage IIIA, 
then it may disappear  from the market.  
There is a trade off between the economic ince ntives and the environmental pressures. In 
order that industry can ensure production of Stag e IIIB tractors, and thus be able to continue 
                                                 
38 The flexibility scheme today basically allows that a manufacturer sells 'old' tractors up to 20% of his 
annual sales, meaning that 80% must  already comply with the new limits; this allows him to concentrate 
his R&D work on a limited number of 'best selling'' types and update the others types later (e.g. in the 
second or third year). He is free to choose when he uses this allowan ce; he can use it fully in the first 
few months, but then all models should be ready soon and at the same time. If all of the flexibility was used straight away in the current 20% flexibility scheme then the manufacturer could delay using Stage 
III B by 10 weeks, instead, under the proposed 50% flexibility the manufacturer can delay by 26 weeks. 
Therefore, assuming constant sales, this is an extension of 16 weeks (if he would use the full allowance for all types straight away). 
EN 30   EN selling in the future, there is a negative imp act on the environment as the introduction of 
stricter Stage IIIB compliant tractor is being delayed. 
According to information from industry, Stag e IV engines are cons idered as a not too 
different from Stage I IIB engines. Depending on the type of  technology used, and in order to 
comply with the stricter NO x emissions limits in Stage IV engines, compared to those of Stage 
IIIB, 'minor' adaptations are expected by installing a more efficient anti-NO x after-treatment 
system. Therefore it would be  logical to assume that, in order to diminish R&D and 
compliance costs, firms might try to accompli sh the redesign of the engines as soon as 
possible and only once (from Stage IIIA to Stag e IIIB covering as much as possible the needs 
for Stage IV) instead of having to do similar adaptation twice (once for the transition from 
Stage IIIA to Stage IIIB and then from Stag e IIIB to Stage IV). Th is is the only option 
favoured by industry stakeholders. 
• Option 4.4 - Increase of flex ibility percentage to 80% 
This is similar to option 4.3, with the following differences: 80% would not be coherent with 
the NRMM proposal (50%); it would bring maxi mum alignment with the US market while 
maintaining a fundamentally different system ; the negative impact on the environment from 
this option would be larger than from option 4.3. Also, industry could comply with the 
Directive with only 50% flexibility. 
• Option 4.5 - Conditional use of the flexib ility scheme, with penalty mechanism 
This option introduces the idea of a penalty for those industries that did not reach Stage IIIB 
compliance in time, by penalising them in th e future. However, such a system would be 
difficult and costly to implement and enforce.  The option would be effective regarding the 
internal market and environmen tal objectives if the optimal le vel of the penalty could be 
determined and is uniform across firms. Crea ting and implementing a penalty system would 
place administrative burden on MS. Moreover if  the measure was to be harmonised and 
implemented identically in all MS , additional costs would be invol ved at the EU level. It is 
therefore not considered to be efficient. It w ould be rather coherent with environmental and 
competition objectives and providing incentives to innovate, but due to the lack of data this 
option is not feasible. 
• Option 4.6 - Implementation of trading system 
Here the market would decide whether or not firms would purchase additional flexibility or 
spend the money on R&D to reach Stage IIIB, therefore, optimising the trade-off between 
economic development and environmental objectiv es. The system would be very complex to 
put into place in such a short time scale. Th e time taken to develop a working system would 
not be effective in meeting the immediate requirements of indus try. If it were possible to set 
up such a system it would in principle be e ffective in reaching the internal market and 
environmental objectives. Additional EU and nati onal resources would be needed in order to 
put the trading scheme in place. However, the advantage of such a system is its built-in 
mechanism leading to efficient avoidance of pollution and efficient innovation. This option 
would be coherent with environmental and comp etition objectives and pr oviding incentives to 
innovate. The time taken to develo p a trading system would not be effective in meeting the 
immediate requirements of the industry. It is not feasible in the scope of a few years. 
EN 31   EN • Option 4.7 - ABT scheme  
ABT is not considered to be a feasible option as described be fore; it was already turned down 
by Council and Parliament. 
Table 3: Comparison of the listed options:  
 Effectiveness Efficien cy Coherence Feasibility 
Option 1 –  
Baseline  Not effective Not efficient Partly coherent Feasible  
Option 2 -  
Provision of government 
backed loans to finance 
stocking of IIIA engines  Partly Effective Not efficient Not coherent Feasible, if MS 
would be willing 
Option 3 -  
National scrapping 
schemes  Partly effective Not efficient Partly coherent Unfeasible  
Option 4.1 –  
Scaled Flexibility  Effective Efficient Coherent Unfeasible 
Option 4.2 –  
35% Flexibility  Somewhat 
effective with 
respect to 
objective 1 Not fully 
efficient Not coherent 
with NRMM Feasible 
Option 4.3 –  
50% Flexibility  Effective Efficient Coherent Feasible 
Option 4.4 –  
80% Flexibility  Effective only 
with respect to 
objective 1 Not efficient 
due to 
environmental 
trade-off Not coherent 
with 
environmental 
policy Feasible 
Option 4.5 –  
Penalty mechanism  Effective Not Efficient Coherent Unfeasible  
Option 4.6 -  
Trading scheme  Effective  Partly efficient Coherent Unfeasible  
Option 4.7 -  
ABT  Effective  Partly efficient Coherent Unfeasible  
 
EN 32   EN 6.6. Conclusion on preliminary Analysis  
As a result of the above analys is, it is concluded that extendi ng the flexibility to 50% is the 
most appropriate measure to ensure that the obj ectives of the policy are met. The impacts of 
the preferred option will be assess ed against the baseline in a quantitative way in section 7.1.  
7. IMPACTS OF PREFERRED OPTION  
The environmental, social and economic impact of the preferred policy option will be 
analysed in the following sections. 
All contributions provided durin g stakeholders meetings and especially during the public 
consultation for this proposal have been taken into account.  
The major cost categories that can be taken into account include: research and development 
costs, variable producti on engine costs, tractor  redesign costs, after treatment devices costs 
and fuel costs39. 
Environmental impacts have been determined ba sed on external costs of calculated emissions. 
Emissions have been calculated taking into account tractor  / engine stocks, average use and 
lifetime of tractors.40 These environmental costs as a c onsequence of enla rged flexibility 
should partly be compensated by the avoided cost s of prolonged cost of using older tractors, 
but no figures are available. 
As the preferred option results  in a proposal for a Directiv e amending Directive 2000/25/EC, 
to be approved by the co-legislators and then  implemented by Member States, this procedure 
will take time. After submission by the Commissi on it could be adopted in 6 months; time to 
implement differs between Member States, from  almost zero to 12 months. This means that 
the option would not be available yet in some MS  as of the first deadline (for engines between 
130 and 560 kW), i.e. 1.1.2011. This is a serious dr awback, but there is no other and better 
solution. On the other hand the re maining period of time, where i ndustry would be able to use 
the proposed 50% flexibility woul d still be important for them and allow the recuperate some 
of the investments, which then can be used fo r further preparation for Stage IV. MS are aware 
of the problem and expect an amending propos al from the Commission. They will do what 
they can to help industry to overcome the problems by implementing the amending directive 
as soon as possible. Therefore it remains to be hoped that following the Commission's adoption of the revised proposal, MS will take  prompt actions to transpose the amended 
Directive so that the manufacturers could bene fit from the revised flexibility as soon as 
possible.  
7.1. Environmental impact  
The environmental costs represent the cost generated from the additional emissions of the 
engines under the amended 50% flexibility scheme compared to the current 20% flexibility 
                                                
 
39 ARCADIS IA study page 28, point 0.10 
40 Same as footnote 40. 
EN 33   EN scheme. As mentioned before, the additional flexibility has the impact of increasing the 
availability of Stage IIIA by 16 weeks (see footnote 39).  
The overall impact from the a dditional amount of emi ssions is not expected  to significantly 
affect the Member States oblig ations under the CAFE program. Legislation requires MS to 
meet certain ceilings for ambient air quality in defined geographical areas41.  
The effect on the environment will be even sm aller than the one estimated in the Technical 
Review due to the impact of the crisis as th ere will be a reduced number of new engines 
placed on the market than what was the basis of the calculation. An average drop of sales of at 
least 25% up to 60% for some types is e xpected (2009 vs. 2008). Th is, combined with 
diminished fuel consumption in the tractors sector may lead to a small decrease in the 
emissions. However, an exact assessment of the environmental impact of placing on the 
market a smaller number of engines as a result of the economic crisis is not yet available and 
the environmental impacts may thus be overstated. 
As the tractors are rarely used in problem atic and highly populated areas which have the 
highest local concentrations of pollutants, the overall impact from this additional amount of 
emissions is not expected  to be significant. 
Emission limits as set by Directive 2005/13/EC are around 30% lower for NO x and around 
90% lower42 for PM in Stage IIIB than in the St age IIIA. The environmental impact of a 
modified flexibility scheme is estimated under the assumption that all tractor manufacturers  
will use the full percentage of the flexibility sche me in the first year after the introduction of 
the new limits of Stage IIIB. This assumption is based on the information available to Commission Services via the notification requir ements of Directive 97/68/EC on the use of 
the flexibility scheme, for the transition from St age II to Stage IIIA. They  clearly indicate that 
the total allowance of tractor manufacturers to place on the market 'flexed' engines was not 
depleted in most of the power categories (mor e than 50% was still available). For the very 
small power engines category how ever, the total allo wance is used almo st in 100%. In the 
case of 50% flexibility, from all new tractor s (100%) placed on the market only 50% would 
comply with Stage IIIB emissions limits, while  the remaining 50% would comply with the 
emission limits of Stage IIIA. 
Building on the 2005 figures
43 for the NRMM  sector, where the average share of emissions 
exhausted by new engines put on the market during one year accounts for around 5% of the 
total emissions of NRMM, while the remaining 95% comes from the engines already operating on the market, we can assume that the s ituation looks similar in case of the tractors 
sector. 
The amendment of flexibility from 20% to 50% would increas e the emissions of newly 
produced  machinery within the first year by a bout 9% compared to the current scheme. 
However, the overall  machinery CI engine emissions would increase for the first year under 
the 50% flexibility by around 0,3% compared to the current 20% scheme. In absolute numbers the amounts of emissions can be quant ified to about 0,66 kt for PM and 9,8 kt for 
                                                
 
41 Directive 2008/50/EC L 152 11.6.2008 p1, Annex III 
42 More information on the reduction % of pollutants of the different stages of the Directive can be found 
in table 3. of Annex III.  
43 Summarised sales table of new tractor to be placed on the market and table of existing tractors, covered 
by the tractors Directive, are available in Annex V 
EN 34   EN NO x per year for all NRMM. For tractors this is estimated to be about 0,3 kt for PM and 3,9 kt 
for NO x per year44. 
Comparative graphs presenting NO x and PM emissions for the current 20% and the proposed 
50% flexibility scheme can be found in Figure 1 and Figure 2. They were created for NRMM, 
but our best estimate is that the effect for tractors is very similar. 
Figure 1: Total NO x emissions for all CI engines in ca se of 20% flexibility and of 50% 
flexibility45 
 
                                                 
44 Based on JRC table 5.4 data of 26 kt PM and 515 kt NO x p.a. See Annex XII for further details. 
45 Environmental costs were calculated based on the emission model for CI engines, including 
assumptions and information provided by industry and the JRC emissions inventory, as described in detail in Annex 7.8 of the IA study by ARCADIS. 
EN 35   EN Figure 2: Total PM emissions for all CI engines in case of 20% flexibility and of 50% 
flexibility 
 
The conclusion of the study, according to the methodology based on the Net Present Value 
(NPV), estimates, the environmental costs per type of pollutant of the following magnitude: 
Table 4: Environmental costs occurred during 2008 – 2030 (million Euros) 
Pollutant  50% flexibility for all NRMM 50% flexibility for tractors  
PM 200 80 – 90  
NO x 350 130 – 150  
Total 550 210 - 240  
 
This figure represents the total cost over the period of 2008-2030, wh ile for the present 
Impact Assessment the benefit has been calculate d for the period of three years as covered by 
the accompanying proposal. The figures for tractors are based on the assumption that tractors will still have the same relative share in pollution. 
The estimated impact of an enlarged flexibility scheme is 0,3%
46 of the overall emissions 
(both of PM and NO x) of all NRMM in use, in the first year. 
Impact on emissions of CO  and HC is not discussed here sin ce these factors are not important 
with regard to diesel engines; Directive 2005/13/EC did not introduce a reduction in those 
gases for that reason. The only change here is that HC must now be measured and approved 
separately from NO x whereas until now these were a combined factor. 
                                                 
46 JRC Technical Review page 98 (see footnote 10 on page 6) 
EN 36   EN Concerning CO 2, it being the natural product of burning fossil fuel, the emissions from 
engines are currently not repor ted and therefore no estimate can be given on the impacts of 
increased flexibility or any ot her tentative measure reducing CO 2 emissions. 
As alternative to 50% flexibility, a possibility  to postpone the introdu ction of Stage IIIB 
might be considered until the in troduction of Stage IV. The conse quence of this would be that 
the effect of the 90% reduction in PM limits would be delayed for three years. 
The Commission is also of the opi nion that a similar rise in flex ibility for the introduction of 
Stage IV should not be considered; as stated before, the R&D work done for Stage IIIB should guarantee that this woul d not be justified. The Commi ssion will send a clear signal to 
the stakeholders about its firm intention to maintain the deadlines for Stage IV. 
7.2. Economic impact  
The main economic impact of the proposed meas ure are related to compliance costs which, as 
described under 3.1, include mainly research a nd development costs as well as investment 
costs. Despite the efforts, it was possible to  obtain estimate costs of R&D from only one 
'integrated' manufacturer, who stated to have  invested € 1,5 billion for R&D on Stage IIIB. As 
mentioned before both the external contractor  (who specified a long list of efforts in his 
report) and DG ENTR have done considerab le efforts to collect further data.  
Industry reported relative incr eases in R&D costs around the date of introduction of the new 
stages for NRMM. Some of the factors, not possi ble to be quantified due to lack of detailed 
information and therefore not taken into acc ount, include: increased  learning & training; 
increased unavailability  of manpower; increased stock piling;  increased unavailability of low 
volume products; standstill state of the art; incr eased peak load certification bodies; increased 
warranty cost due to rush released. 
A simplified approach was used for NRMM to qu antify the impact of the flexibility scheme 
enabling the reduction of R&D costs and the possibility to amortise these costs over an 
extended period of time. The assumptions and clar ifications of this approach are as follows: 
Estimates for the potential relative gains in R&D budget, provided by manufacturers of 
agricultural machinery, due to the increase in flexibility fo r the typical period around the 
introduction of new emission standards, were given in the IA Report for flexibility for NRMM. The larger the flexibility percentage  is, the lower the peak costs of R&D are 
expected in the same period of time. The same principle works for tractors. 
7.3. Impact on SMEs  
The existing flexibility scheme already considers the need to protect small volume tractor 
manufacturers which have lower resources for developing new technology as the current 
system allows firms to either place a fixed numbe r of tractors or a perc entage of the previous 
stage on the market. The proposal , by scaling the fixed number by the same proportion as the 
percentage increase (2.5 times), maintains the logic of a system  already preferred by SMEs.  
Data concerning possible impacts on SMEs are drawn from the impact assessment study 
carried out by ARCADIS, delivered in Marc h 2010. This complementary study covers the 
relevant target group including manufacturers of both tractors  and engines, as well as 
professional users of the tractor s. Information collected by the study suggests that compliance 
EN 37   EN costs, mainly R&D and conformity assessment costs will weigh rela tively more upon SMEs 
(manufacturers). Raising the necessary capital may be more difficult for SMEs which also 
have a lesser potential for co st pass-through compared to la rge enterprises. The study also 
indicated that only few tractor manufacturers and no engine manu facturers are SMEs and that 
the professional users are mainly very small entities.  
With the preferred option some SMEs (manufacture rs) might be able to completely skip Stage 
IIIB, replacing in time their Stage IIIA tractor with a Stage IV model (because their 'normal' 
sales would not be more than  the fixed number allowed). 
Without change, the SME / end-user may not be able to buy a new tractor, at least not from 
his regular source. As a consequence he will have to continue using his old tractor, which is (much) more polluting than the IIIA tractor th at could be available when we allow 50% 
flexibility. Alternatively he c ould buy a used, older tractor. 
The old tractor will be more costly in main tenance and fuel consumption, as well as less 
efficient in performing the work. For maintena nce, ARCADIS quotes in section 8.2.2 of the 
SME report figures for maintenance of older sp ecial (narrow-track) tractors, which is at € 
1 339 million an order of magnitude higher th an the additional environmental costs. 
7.4. Social impacts  
The 50% flexibility would probably allow (mos t) manufacturers not to close down production 
of certain lines as described under the baseline. This may avoid lay-offs. At present there is no 
information on how many of the present 24 000 j obs in the EU would be  at risk. For SMEs it 
may mean not closing down thei r business. Industry should ha ve less problems getting the 
qualified staff. The proposal would reduce the risk  for the end-user not to be able to buy a 
new tractor from his regular source because that  manufacturer would not be able to deliver a 
IIIB compliant tractor. As a consequence the number of old tractors, which are (much) more polluting, costly in maintenance and less safe and efficient in use than the IIIA tractor that could be available when 50% flexibility  would be allowed, would be reduced. 
7.5. Competition impacts 
The preferred option could have an impact on "f irst mover advantage" and innovation, which 
in turn could affect competition in this sector.  
As for "first mover advantage
", anecdotal evidence suggests th at integrated manufacturers 
might be the first to have a Stage IIIB compliant tractor on the market. An integrated manufacturer indeed can theore tically and to some extent re design engine and tractor in 
parallel. By contrast, pure tr actor manufacturers have to wa it until the engine manufacturer 
has completed the work on the engine and only then start redesigning their tractor. 
Under the baseline scenario , competition might be reduced in the long term. The tractors of 
first movers would be the only ones on the mark et - after every manufacturer has exhausted 
the 20% flexibility. From that point onwards, this or these manufacturer(s) would enjoy a 
monopolistic / oligopolistic position. Market co mpetition would increase gradually each time 
another manufacturer has IIIB compliant trac tors ready. There coul d however also be a 
permanent reduction in competition resulting from the (permanent) exit of a number of manufacturers unable to quickly present a IIIB tr actor. Some of them are indeed probably not 
EN 38   EN able to survive an extended period without reve nue (pm. no data are available to assess this 
risk, firms withholding information on th eir vulnerability for obvious reasons). 
Under the preferred option , competition would be preserved in the short and possibly also in 
the longer term, with a margin al impact on those manufacturer s who may be ready to produce 
type IIIB tractor by the current  legislative deadline. The Commission services have received 
confirmation that these manufacturers still support the request for more flexibility. 
On one hand, the preferred option would indeed allow more (non-integrat ed) manufacturers to 
remain on the market since they  can sell tractors over a somewh at extended period of time 
and use those revenues to finance the necessary redesign.  
On the other hand, manufacturers having made a major effort to comply with Stage IIIB by 
investing upfront into R&D w ould still benefit from this investment despite having to 
compete with possibly cheaper IIIA  tractors for a limited period of  time. In this sector, many 
elements besides price determine the buying d ecision of the end user. Manufacturers ready 
with Stage IIIB tractors would demonstrate their technological leadership whic h is commonly 
exploited for marketing purposes. First movers put  quality and reputation effects at the heart 
of their branding strategy which in turn allow them to enjoy a price premium. The preferred 
option would therefore only have a margin al effect on first mover advantage.  
As for innovation , the impact of the preferred option is likely to be fairly limited in scope and 
in time. This option maintains the obligation fo r manufacturers to innova te. It simply provides 
with some additional time to find the required solutions. The more manufacturers remain in 
the market, the more innovative solutions can ulti mately be expected. Mo reover, the preferred 
option is more stringent that the approach taken by US regul ators, which might give an 
innovative advantage to EU manufacturers over time. Insofar as the main reasons 
underpinning the preferred option are linked to  exceptional circumstan ces (the financial 
crisis), there should be no sign ificant negative impact on comp liance with EU rules in the 
future.  
Therefore the overall impact on  competition and innovation, both in a static and in a dynamic 
view, appears to be relatively limited and would even be positive in the short term. 
7.6. Administrative burden 
The preferred option will not bring any major additional administrative burden. The necessary 
reporting requirement is already present in Directive 2000/25/EC.  
7.7. Effect of the proposed measure compared to the base line 
Although the use of the flexibility  scheme generates a negative environmental impact (partly 
compensated because less older, polluting tractors would remain in use), it offers a benefit for 
the manufacturer when it comes to the comp liance cost including a decrease in peak R&D 
investments costs, since these costs are spread  over a longer period, a nd less problems to get 
qualified staff. Additional flexibil ity would also mean less risk of lay-offs and better prospects 
for the end-user. 
EN 39   EN 8. MONITORING AND EVALUATION  
An assessment of the impacts of the enlarged pr ovisions of the flexibility scheme after its 
implementation and completion will be based on information provided by the industry and by 
Member States. 
Key indicators to assess the effectiveness of this  initiative could be the use of the flexibility 
scheme until end of 2013, the development of the number of firms going out of business, and 
the development of NO x and PM emissions attr ibuted to tractors. 
Directive 2000/25/EC, Annex IV , requires the tractor manufact urer under th e arrangements 
for the flexibility scheme to notify all relevant data concerning the application of the scheme including inter alia th e cumulative data on the number of engines placed on the market under 
the flexibility scheme. Thus, no increase in cost s for manufacturers or national authorities is 
expected. 
It is the Commission’s intention to evaluate the impact of the revised flexibility measure at 
the end of the period defined in the accompa nying proposal, i.e. in 2014 and to draw the 
necessary conclusions from the results obtained.  
EN 40   EN ANNEX I: Glossary  
ABT Averaging, Banking and Trading system (USA)  
Adsorption the accumulation of atoms or molecules on the surface of a material  
Engine family a manufacturer's grouping of engine s which, through their design, are 
expected to have similar exhaust emission characteristics and which 
comply with the requirem ents of Directive 2000/25/EC  
CECE Committee for European Construction Equipment  
CEMA Committee for European Agricultural Tractor Manufacturers  
C.I. An engine that works under the co mpression-ignition principle, e.g. 
diesel engine  
CO Carbon monoxide  
DPF Diesel Particulate Filter  
EGR Exhaust Gas Recirculation  
Engine 
manufacturer the person or body who is responsible to the approval authority for all 
aspects of the type-approval process and for ensuring conformity of production of the engines  
HC Hydrocarbons  
NO x Nitrogen oxides (NO, NO 2, N2O) 
NRMM non-road mobile machinery (e missions directive 97/68/EC)  
NTT narrow-track tractors (categories defined in Directive 2003/37/EC as 
T2, C2 and T4.1, the width of which is less than 1,15 m)  
PM Particulate Matter  
UNECE United Nations Economic Commission for Europe (Geneva)  
 
EN 41   EN ANNEX II: Reference Documents  
Final Report Technical Review - DG JRC - 28-11-2008 
Administrative arrangement for a Technical Review of Directiv e 97/68/EC, carried out by DG 
JRC, on behalf of DG ENTR, September 2006 - September 2008. 
http://ec.europa.eu/enterprise/news room/cf/document.cfm?action=disp lay&doc_id=5015& userservice_id=
1&request.id=0  
Final Report of the IA study - ARCADIS - January 2009 
External specific contract, under LOT5 framewor k contract, for an Impact Assessment study of 
options presented in the Technical Review of  Directive 97/68/EC, carried out be ARCADIS 
N.V., April 2008 - January 2009. 
http://ec.europa.eu/enterprise/news room/cf/document.cfm?action=disp lay&doc_id=5028& userservice_id=
1&request.id=0  
Final Report of the SME Test Study and IA  on possible options for reviewing of the 
Directive 97/68/EC relating to NRMM - ARCADIS - March 2010 
Additional external specific c ontract, under LOT5 framework cont ract, for an SME Test study, 
carried out be ARCADIS N.V., 2009 - March 2010.  
a.eu/enterprise/newsroom/cf/newsbytheme.cfm?displayType=library&tpa_id=163&lang=en  
EN 42   EN ANNEX III: Summarized Stages table of Directive 2000/25/EC  
1. STAGE I (ENGINE CATEGORIES A, B, C)  
cat power range (kW) tractors  - TA tractors – all new 
A 130 ≤ P ≤ 560  30-06-2001 
B 75 ≤ P < 130 31-12-2000 30-06-2001 
C 37 ≤ P < 75  31-12-2000 30-06-2001 
 
2. STAGE II  (ENGINE CATEGORIES: D, E, F, G) 
cat power range (kW) tractors  - TA tractors – all new 
D 18 ≤ P < 37  31-12-2000 31-12-2001 
E 130 ≤ P ≤ 560  31-12-2000 31-12-2001 
F 75 ≤ P < 130  31-12-2001 31-12-2002 
G 37 ≤ P < 75  31-12-2002 31-12-2003 
 
3. STAGE IIIA  (ENGINE CATEGORIES H, I, J, K) 
cat power range (kW) tractors  - TA tractors – all new 
H 130 ≤ P ≤ 560  31-12-2005 31-12-2005 
I 75 ≤ P < 130  31-12-2005 31-12-2006 
J 37 ≤ P < 75  31-12-2006 31-12-2007 
K 19 ≤ P < 37 31-12-2005 31-12-2006 
 
EN 43   EN 4. STAGE III B  (ENGINE CATEGORIES L, M, N and P) 
cat power range (kW) tractors  - TA tractors – all new 
L 130 ≤ P ≤ 560  31-12-2009 31-12-2010 
M 75 ≤ P < 130  31-12-2010 31-12-2011 
N 56 ≤ P < 75  31-12-2010 31-12-2011 
P 37 ≤ P < 56 31-12-2011 31-12-2012 
 
5. STAGE IV  (ENGINE CATEGORIES Q and R) 
cat power range (kW) tractors  - TA tractors – all new 
Q 130 ≤ P ≤ 560  31-12-2012 31-12-2013 
R 56 ≤ P < 130  30-09-2013 30-09-2014 
 
EN 44   EN  
Power Year 
(kW)   2009 2010 2011 2012 2013 2014 2015 2016 
Type-
approval   H L       Q     
130 / 560 CO: 3,5; HC+NOx: 4,0;  
PM: 0,2 CO: 3,5; HC: 0,19; NOx: 2,0; 
PM: 0,025 CO: 3,5; HC: 0,19; NOx: 0,4; 
PM: 0,025 
                        
Type-
approval   I   M R 
75 / 130 CO: 5,0; HC+NOx: 4,0; PM: 0,3 CO: 5,0; HC: 0,19;  
NOx: 3,3; PM: 0,025 CO: 5,0; HC: 0,19; 
NOx: 0,4; PM: 0,025 
                        
Type-
approval   J   N R 
56 / 75 CO: 5,0; HC+NOx: 4,7; PM: 0,4 CO: 5,0; HC: 0,19;  
NOx: 3,3; PM: 0,025 CO: 5,0; HC: 0,19; 
NOx: 0,4; PM: 0,025 
                        
Type-
approval J P 
37 / 56 CO: 5,0; HC+NOx: 4,7; PM: 0,4 CO: 5,0; HC+NOx: 4,7; PM: 0,025 
                        
Type-
approval K 
19 / 37 CO: 5,5; HC+NOx: 7,5; PM: 0,6 
                        
   2009 2010 2011 2012 2013   2014   2015 2016
            
 Stage 
IIIA  Stage 
IIIB  Stage 
IV      
 limit values: gr/kWh         
CO = carbon monoxide; HC = hydrocarbons; NO x = nitrogen oxides; PM = particulate matter. 
Letters H to R refer to the combination of  engine power category and emissions stage, as specified before in this annex. 
EN 45   EN Percentage reductions for diff erent engine categories are: 
 NO x: IIIA Æ IIIB NO x: IIIB Æ IV PM: IIIA Æ IIIB PM: IIIB Æ IV 
130 – 560 kW H Æ L: HC+NOx=4,0 
Æ HC+NOx=2,19; 47 % L Æ Q:  
2,0 Æ 0,4 = 80 % H Æ L:  
0,2 Æ 0,025 = 88 % L Æ Q:  
0,025 Æ 0,025 = 0 % 
75 – 130 kW I Æ M: HC+NOx=4,0 Æ 
HC+NOx=3,49; 13 %   M Æ R:  
3,3 Æ 0,4 = 86 % I Æ M:  
0,3 Æ 0,025 = 92 %  M Æ R:  
0,025 Æ 0,025 = 0 % 
56 – 75 kW J Æ N: HC+NOx=4,7 Æ 
HC+NOx=3,49; 27 %  N Æ R:  
3,3 Æ 0,4 = 86 % J Æ N:  
0,4 Æ 0,025 = 94 % N Æ R:  
0,025 Æ 0,025 = 0 % 
37 – 56 kW J –> P: HC+NOx=4,7 Æ 
no change No Stage IV J –> P:  
0,4 Æ 0,025 = 94 %  No Stage IV 
EN 46   EN ANNEX IV: Flexibility sche me, fixed numbers and ABT  
1. Flexibility 
As provided in Article 3A and in Annex IV of Directive 2000/25/EC, any tractor 
manufacturer that wishes to make use of the flexibility scheme shall request permission from an approval authority to purchase from his engine  suppliers, in the period of a new emission 
stage, the quantities of engines that do not comply with the cu rrent emission limit values, but 
are approved to the nearest prev ious stage of emission limits. 
The flexibility scheme applies to tractors with  compression ignition engi nes (e.g. diesel) with 
a power from 19 kW to 560 kW. 
The number of tractors placed on the market under a flexibility scheme shall, in each engine 
category, not exceed 20%  of the tractor manufacturer's annual sales of tractor with engines in 
that engine category (calculated as the average of the latest 5 years sales on the EU market). 
Where a tractor manufacturer has marketed tract ors in the EU for a period of less than 5 
years, the average will be calcu lated based on the period for which the tractor manufacturer 
has marketed tractors in the EU. 
As an alternative the tractor manufacturer may seek permission to place on the market a fixed 
number of tractors under the flexibility sc heme. The number of tr actors in each engine 
category shall not exceed the following values: 
Engine Category (kW) Number of engines 
19-37 200 
37-75 150 
75-130 100 
130-560 50 
  
The fixed number of engines scheme is in tended for very small producers that would 
otherwise not be able to effectively use the scheme. 
Any tractor manufacturer may a pply to the type approval author ity of a Member State to be 
allowed to use the provisions of the flexibility  scheme for each engi ne power category. The 
placing on the market of tractors (with new e ngines) under the scheme can be spread over the 
duration of the next 'cleaner' stage, in different  ways, provided the total allowance of 20% of 
sales per power category is not exceeded. (ex. fo r the duration of Stage IIIA - 5 years for the 
power category of 130-560 kW - the 20% can be all used in the 1st year, or 10% in the first 
year 10% in the second, 0% in the 3rd, 4th and 5th, or 10% in the first, 5% in 2nd and 5% in 3rd, 
0% in 4th and 5th, etc.), according to the needs and busin ess plan of the tractor manufacturer. 
The tractor manufacturer may also choose for tractors with engines of one engine power 
category to apply the percentage of sales of the previous year  and for another engine power 
EN 47   EN category to use the fixed engine s number as mentioned in the relevant table; he cannot use 
both options in the same power category. 
The number of tractors allowed to be placed  on the market under the maximum 20% per 
power category, is calculated as the average of sa les of the tractors placed on the market in 
EU for the previous 5 years, counting back from the day of the application to the type 
approval authority of a Member  State for using the flexibility scheme. If the tractor 
manufacturer has not been in business for 5 years, then the average is calculated for the 
period that the tractor manuf acturer is in business. 
As a result, after the approval of using the flexibility scheme, the number of tractors to be 
placed on the market under the flexibility scheme remains the same and is not recalculated as years pass by in the 'cleaner' stage. 
The main advantage of the scheme is that the sooner the application fo r using the flexibility 
scheme is granted, the bigger numbers of tracto r may be placed on the market, especially in 
times where technical changes must be implem ented or like the presen t situation when under 
the pressure of the economi c crisis, sales are dropping. 
The tractor manufacturer cannot transfer part or the total of his flexibility allowance to 
another tractor manufacturer or from  one power category to the other. 
The provisions of the flexibility scheme are allo cated to power categories of the used engines, 
regardless of the number of engine families
47 type approved in that category.  
It must be noted that as a result of the way that the flexibility scheme is implemented, all 
environmental impacts remain the same in total, regardless of the time of the placing of engines on the market, since the total allowa nce of 20% per power category is respected. 
The application for the use of the flexibility scheme may be delivered to only one type 
approval authority of any Member State in th e EU. The provisions of the scheme make it 
very clear that the type approval authorities  of one Member State disseminate to other 
Member states information on granting approvals for tractor being placed on the market 
under the flexibility scheme. As a result, the tr actor manufacturer cannot apply for the use of 
the flexibility scheme to more than one Member States. 
2. Fixed engines numbers of the flexibility scheme  Table 1- Fixed number of engines under the cu rrent flexibility scheme up to Stage IIIA 
ENGINE CATEGORY (kW) NUMBER OF ENGINES 
(flexibility at 20%)  
19-37 200 
37-75 150 
                                                 
47 Engine family: a manufacturer's grouping of engines which, through their design, are expected to have 
similar exhaust emission characteristics and which comply  with the requirements of the Directive, as in 
Annex I. 
EN 48   EN 75-130 100 
130-560 50 
 
The classification of engines differs in Stage I IIB, compared to the classification of engines 
up to Stage IIIA. Power category of 19-37 kW is not included any more in the flexibility scheme, and power category 37-75  kW is split in two separa te categories of 37-56 kW and 
56-75 kW. The total of engines in  these two categories (80+70) as  in Table 2, equal the total 
of the 37-75 kW . 
Table 2 - Calculation of fixed number of e ngines under the proposed amended flexibility 
(1) (2) (3) 
ENGINE CATEGORY (kW) Number of engines under 
flexibility scheme of 20% Final number of engines – 
50%  (Figures in (2) 
multiplied by 2.5) 
37-56 80 200 
56-75 70 175 
75-130 100 250 
130-560 50 125 
 
Table 3 - Calculation of fixed number of e ngines under amended flex ibility: 35% and 80% 
(1) (4) (5) 
ENGINE CATEGORY (kW) Final number of engines 
under flexibility scheme of 
35% Final number of engines 
under flexibility scheme of 
80%   
37-56 140 320 
56-75 123 280 
75-130 175 400 
EN 49   EN 130-560 88 200 
 
3. ABT The Averaging, Banking and Trading system, originally introduced before 2000, is built on 
the three pillars of  - Averaging i.e. exchange of credits between engine families of a given engine manufacturer 
for a specific model year,  - Banking i.e. the retention of credits by one engine  manufacturer for use in future years, and  
- Trading i.e. exchange of credits  between engine manufacturers.  
The ABT system on exhaust emissions used in the USA allows an engine manufacturer to 
produce individual products of 'cleaner' and 'dir tier' lines and place both types on the market, 
provided that the average emissi ons of the manufacturer's fleet comply with the legislated 
limits. A precise method, allocating points, is used in order to calculate the emissions from 
both engine types. In the same legislation an emissions cap is foreseen, as a higher limit that 
must be met by all individual products. Strict rules on the implementation and compliance of 
the engines placed on the market by the manufactu rer followed by strict penalties in case of 
no compliance are set in the regulation. 
The ABT system is addressed to engine ma nufacturers. In addition the USA operates a 
'flexibility' system which is addressed to (machinery and) tr actor manufacturers, allowing 
sales of tractors complying with the earlier 'Tier' for 7 years. 
In the EU an ABT system was proposed when the amendments to Directive 2002/88/EC were 
discussed. This idea was rejected by Member States and Parliament because it was too 
complex for implementation in the legislation of MS and too difficult to monitor. In addition 
it would not work for smaller manufacturers. To be noted that ABT would bring serious 
administrative burden to manufacturers, who ha ve to predict their production in different 
engine families before the year (numbers, engi ne emissions performance etc) and calculate 
the outcome at the end of the year, keeping re cords of all shipments. National authorities 
would have to check these. 
Advantages of ABT would be th at manufacturers that are quic k with their new products can 
build up credits, to be used to compensate for their engine types that are not yet compliant, or can be sold to competitors that are slower. Also, use of an ABT system might allow an earlier introduction of new requirements.  
EN 50   EN ANNEX V: Positions of stakeh olders regarding the amendment of the provisions of the 
flexibility scheme for NNRM and tractors  
01-06-2007 United 
Machinery 
Equipment - 
CECE Industry Association Proposing: an enlargement of flexibility to 
better align with the US. 
03-06-09 CEMA /CECE Industry Associations Le tter with supporting evidence for the request 
for extended flexibility for tractors. 
16-06-2009 WIRTGEN 
GROUP Road and mineral 
Technologies Supports an increase of flexibility up to 50% 
and a relevant increase of the fixed numbers 
table, proposes the extension of implementation 
date of Stage IIIB be 2 years and Stage IV by 3 
years and emphasises on the need to adopt a 
positive statement on these issues by October 2009. 
29-06-2009 German 
Federal Ministry of 
Environment  Expresses doubts on the extent of the economic 
crisis of the NRMM sectors, concerns on the analysis of the presented environmental 
impacts, concerns over the rise of the PM 
concentration. Proposes to address an enlargement of flexibility, linked to limit values, 
in the full revision of the Directive.  
30-6-2009 Department of 
Transport, UK  Welcomes the proposal to amend flexibility 
30-06-2009 FEM Federation of 
European Materials Handling Really appreciates the amendment of flexibility. 
01-07-2009 EUROMOT The European 
Association of Internal Combustion 
Engine 
Manufacturers Fully support the flexibility amendment 
02-07-2009 EEB European 
Environmental Bureau Express concerns on the flexibility amendment, 
on the ability of MS to comply with National emission ceilings, on possible delay of placing 
on the market of Stage IIIB compliant engines, 
on competitiveness issues within industry and on the reliability of the EU policies as a total.  
03-02-2009 CEA Construction 
Equipment Association (UK) Strongly endorses the proposal 
March 2-009 ORGALIME Industry Association Meeting with VP Verheugen to support the 
proposal for tractors. 
09-07-2009 JCB Construction 
Equipment 
Manufacturer Strongly endorses the proposal. 
EN 51   EN 10-07-2009 SMMT The Society of Motor 
Manufacturers and 
Traders (UK) off 
Highway Engine & Equipment Group  Strongly endorses the proposal  
13-07-2009 AGORIA Belgium Employers 
Organisation Fully support the proposal, asks for a similar 
measure to be proposed for tractors. 
14-07-2009 CEMA Industry Association Letter to VP Verheugen asking for progress on 
the dossier for tractors. 
14-07-2009 AECC Association for 
Emissions Control by 
Catalyst Supports additional measures acting as 
incentives for Stage IIIB engines to be placed 
on the market but not the proposed measure. 
Justifications include impacts on environment, 
EU competiveness in the global market. 
15-07-2009 WKO Austrian Vehicle 
Industry Association Supports the proposal. 
16-07-2009 CLAAS Agricultural 
Equipment Manufacturer Appreciates the proposal to amend flexibility 
and proposes the implementation of a similar measure for tractors. 
In GEME discussions focussed on NRMM but di d include the possibility to also enlarge 
flexibility for tractors (and the exemption fo r narrow-track tractors). On 17-7-2009 the Italian 
representative insisted that the Commission s hould include tractors in its proposal to enlarge 
flexibility. 
To summarize the comments received from the consultation: a majority  of comments were 
submitted by industry federations and individual  manufacturing or user companies. These 
underlined the benefit from increasing the fl exibility which would allow companies to 
distribute the required compliance costs more even ly over time during the crisis and ensure a 
relative income that would allow performing the necessary extensive changes in various types 
of products (engines and vehicles ) over a longer period of time. Only one company stated that 
new emission standards could on ly be achieved with low-sul phur fuels which would not be 
available world-wide, meani ng that export oriented tr actor manufacturers would be 
compelled to produce two different sets of trac tors, one for the countries that have similar 
stringent emission limits (EU, USA, Japan)  and another for the rest of the world. 
The international organisation of catalyst and filter based technology (AECC) drew the 
attention to the need to align the production of  engines to emission st andards in the USA and 
in Japan and concluded that any delay in the introduction of  EU emission standards would 
jeopardise the benefits for the whole manufacturing industry, in particular with regard to the 
'first mover' benefits. It also highlighted that the increased flexibility would delay the 
recoupment of development costs. 
One environmental NGO submitted comments and referred to the recent statement of the 
European Environmental Agency on the impact  of particle pollution, mainly emitted from 
diesel engines and expressed its concern that the increased flexibility  could trigger lobbying 
for the delay of other environmental measures. 
EN 52   EN One national employer's organisation expressed its full support to the Commission's initiative 
on extending the flexibility scheme, and identi fied numerous merits of this approach. 
One Member State drew the attention to the ne ed to carefully assess the possible impact of 
the measure on the environment, in particular in  the context of Member State obligations to 
meet the ambient air quality standards. Another Member State welcomed the proposed 
measure. No Member State objected. 
The issue of wider flexibility for tractors was al so discussed with all re levant stakeholders in 
the Commission's Working Group on Agricultur al Tractors (WGAT) on 22 June and 18 
December 2009. Apart from general support for wider flexibility expressed by some MS and CEMA / EUROMOT no further comments were made in those meetings. 
In the Commission's Motor Vehicles Worki ng Group on 26-1-10 the proposed work program 
was discussed with all stakeholders, which included the present issue of amending the 
flexibility scheme for tractors. No objections we re raised against this approach of allowing 
more flexibility. 
EN 53   EN ANNEX VI: Fleet and annual sales of tractors  
Table 1: Annual sales estimates per tracto r category and power class (year 2005, EU15) 
Power 
(kW) < 19 19-37 37-56 56-75 75-130 130-560 > 560  
average 9,5 28 46,5 65,5 102,5 345 800 
Agricultural 
tractors 163 000 14 670 3 260 32 600 48 900 48 900 14 670 0 
Percentage  10,8 2,0 20,0 30,0 30,0 9,0 0 
 
Table 2: Total number of tractors in use per tractor category and power class  
(overall NRMM: 6,7 million; year 2005, EU15) 
Total Nr < 19 19-37 37-56 56-75 75-130 130-
560 > 560 Total engines 
on market 
 9,5 28 46,5 65,5 102,5 345 800 
Agricultural 
tractors 2 500 
420 146 700 32 600 521 
600 782 
400 782 
400 234 
720 0 
Percentage  5,9 1,3 20,9 31,3 31,3 9,4 0 
Source: JRC 
Table 3: Western European tractors market 2007 – Q1 2010 (EU15) 
 2007 2008 2009 Q1 2010 Change 
(Q1 2010 - Q1 2009) 
Agricultural 
tractors 165 83 173 615 150 083 30 387 -22% 
Source: CEMA, June 2010 
EN 54   EN ANNEX VII: Emissions of NOx and PM  
Table 1: NO x and PM emissions per tractor  category and power class  
NO x emissions (kt) 
power < 19 19-37 37-56 56-75 75-130 130-
560 > 560 Total  
 9,5 28 46,5 65,5 102,5 345 800  
Agricultural 
tractors 0,86 0,99 36 107 185 185 0 515 
Percentage 0,17 0,19 7,0 20,8 35,9 35,9 0  
 
PM emissions (kt) 
< 19 19-37 37-56 56-75 75-130 130-
560 > 560 Total  power 
9,5 28 46,5 65,5 102,5 345 800  
Agricultural 
tractors 0,12 0,11 2,55 7,55 8,58 7,58 0 26 
Percentage 0,5 0,5 9,8 29,0 33,0 29,1 0  
 
Overall:  1281 kt NO x 71 kt PM  
Agri. + Constr.:  605+593= 1098 kt NO x 30+29= 59 kt PM  
RAINS (Agri. + Constr.):  539+248 = 787 kt NO x 57+23= 80 kt PM  
 
Source: JRC  
EN 55   EN ANNEX VIII: Market of  agricultural vehicles  
1. Number of tractors sold in 2001, 2004, 2005, average prices and turnovers  
Number sold (units) Average price (€) Turnover (€ million) 
Tractor 
category 2001 
(EU12) 2004 2005 
(EU25) 2001 
(EU12) 2004 2005 
(EU25) 2001 
(EU12) 2004 2005 
(EU25) 
T1   120 000       
T2   15 000       
T3   1 650       
T4   15 000       
T4.1          
T4.2      100 000 - 
150 000    
T4.3          
T5   13 000   100 000- 
150 000   1,3 – 2 
C   5000       
Total 154 000 156 200  169 650 40 130 46 700  6 180  7 300   8 000 
(2005 figures based on TRL final report, 2009, p. 73; 2001 and 2004 figures based on CEMA information) 
2. Definition of tractor categories 48 
1. Category T: Wheeled tractors 
– Category T1: wheeled tractors with a maximu m design speed of not more than 40 km/h, 
with the closest axle to the driver49 having a minimum track width of not less than 
1 150 mm, with an unladen mass, in running or der, of more than 600 kg, and with a ground 
clearance of not more than 1 000 mm. 
                                                 
48 Directive 2003/37/EC and TRL Study: 
http://ec.europa.eu/enterprise/newsroom/cf/documen t.cfm?action=display&doc_id=4501&userservice_
id=1&request.id=0  
49 For reversible driver's position tractors (reversible seat and steering wheel), the closest axle to the 
driver to be considered must be the on e fitted with the biggest diameter tyres. 
EN 56   EN – Category T2: wheeled tractors with a maximu m design speed of not more than 40 km/h, 
with a minimum track width of less than 1 150 mm, with an unladen mass, in running order, 
of more than 600 kg and with a ground clearance of not more than 600 mm. However, 
where the height of the centre of gravity of the tractor50 (measured in relation to the ground) 
divided by the average minimum track for each axle exceeds 0,90, the maximum design 
speed is restricted to 30 km/h. 
– Category T3: wheeled tractors with a maximum design speed of not more than 40 km/h, and 
with an unladen mass, in running order, of not more than 600 kg. 
– Category T4: special purpose wheeled tractors with a maximum design speed of not more 
than 40 km/h (as defined in Appendix 1). 
– Category T4.1: high-clearance tractors mainly u sed in France and with a small number of 
manufacturers; 
– Category T4.2: very large tractors; 
– Category T4.3: alpine tractors with a low centre of gravity to allow them to work on steep 
inclines. 
– Category T5: wheeled tractors with a maxi mum design speed of more than 40 km/h. 
2. Category C: Track – laying tractors 
Track – laying tractors that ar e propelled and steered by endl ess tracks and whose categories 
C1 to C5 are defined by analogy with categories T1 to T5.  
                                                 
50 In accordance with st andard ISO 789-6: 1982. 
EN 57   EN 3. Tractors - new registrations per MS, 2006 – 2008  
(source: TRL final report 2009).  
Registrations 2006 2007 2008 
Austria 7 152 6 792 7 737
Belgium 2 748 2 680
Bulgaria  
Cyprus  
Czech Republic 2 225 2 730
Denmark 3 110 3 479
Estonia  437
Finland 4 172 4 245
France 27 388 29 129
Germany 29 009 28 469
Greece 3 518 4 170
Hungary 1 045 2 045
Ireland 4 221 
Italy 29 752 26 837
Latvia  
Lithuania  
Luxembourg  
Malta  
Netherlands 3 823 4 054
Poland  
Portugal 5 415 6 122
Romania  1 077
Slovakia  1 450
Slovenia 1 853 2 084
Spain 16 605 17 241
Sweden 4 233 4 465
United Kingdom 13 829 14 941
Total 160 098 159 483 10 701
 
(Empty boxes: no info rmation was received) 
EN 58   EN 4. Import/export of new agricultural tr actors, 2007, EU27 (Comext database) 51 
 Track-laying tractors   Wheeled agricultural tractors 
 Import  
Impor
t Export  
Expor
t  Import Import Export  Export 
 Value Units Value Units  Value Units Value Units 
Belarus      95.038.622 7.378 12.964.865 95
Canada 200.412 9    2.677.990 295 62.964.860 2.328
Chile   137.999 7    11.756.464 706
China 130.670 25 114.480 5  25.851.834 8.488 10.044.776 283
Croatia   96.146 4  450.727 13 34.752.302 1.160
Iceland   40.539 8    15.522.714 422
Iran        17.239.503 514
Israel 32.256 2    15.063 4 11.423.125 505
Japan 439.696 206    147.060.521 25.068 45.213.966 1.183
Malaysia        6.269.559 455
Mexico      213.457 28 9.413.104 454
Morocco   198.088 21    28.016.583 1.747
New Zealand   16.205 1  8.135 1 61.428.357 1.874
Norway 438.338 29 599.060 60  1.626.906 93 154.734.409 5.354
Russia 287.813 8 6.981.647 170  151.558 20 72.359.710 1.370
Serbia 17.439 1 151.341 4  511.653 38 17.239.770 413
South Africa   3.463.204 34  166.840 41 71.097.548 2.829
                                                 
51 Values in Euros and units 
EN 59   EN South Korea      20.661.795 2.248 36.586.678 1.200
Switzerland 580.763 28 416.682 16  7.732.927 210 93.881.975 2.921
Tunisia        9.230.970 585
Turkey 4.482.968 1.467 246.126 2  9.754.638 621 67.533.886 3.060
Ukraine   3.181.355 26  469.873 52 25.702.010 358
United States 37.641.319 368 2.082.490 1 88  476.626.178 42.049 742.673.712 25.882
Venezuela 8.000 1 336.321 12    7.440.827 280
Total 44.259.674 2.144 18.061.683 558  789.018.717 86.647 1.625.491.673 55.978
EN 60   EN ANNEX IX: the SME Test (ARCADIS report 30-03-2010)  
(1) Consultation with SMEs representatives  See sections 3.2, 3.4, 3.5, Ta ble 1 and 7: little 
response; 2 case studies. 
Representatives of manufacturers and suppliers 
as well as end-users were contacted with enquiries, meetings and phone calls, as listed in the study. 
(2) Preliminary assessment of businesses 
likely to be affected  See sections 3 and 7: few manufacturers but 
some specialised firms (T4.1 etc.); most (or all) end-users. 
(3) Measurement of the impact on SMEs  See section 7. Few replies available. One 
manufacturer indicates 30% price rise for new 
IIIB engines and huge price (€ 5 000) and time (delay up to one year) problems because with the new engine the tractors  (otherwise unchanged) 
needs new national homologation, to be avoided with enlarged flexibility. 
 
(4) Assess alternative options and mitigating 
measures  See section 7.4: 50% flexibility would solve the 
problems for SME manufacturers. 
As alternative an "extension of the duration" of 
flexibility is mentioned, but this seems unacceptable. 
. 
 
EN 61   EN ANNEX X: Comparison of the options  
 Effectiveness Efficiency Coherence Feasibility/additional 
comments 
Option 1 - 
Baseline This option is not effective as it fails to achieve the 
objectives with regard to th e functioning of the internal 
market for tractors and with regard to the environmental objectives of reducing emi ssions from older polluting 
tractors by replacing them with cleaner models. This option is not efficient because it is 
expected to lead to a situation where for some 
time the market for new tractors is either not existing or supply will be very limited (some 
models only), which woul d likely lead to high 
prices. Where old tractors can be replaced with new IIIB 
models, a positive impacts on the environment would 
materialise but this is unlik ely to be the case for all 
models, leading to negative impacts on the 
environment and on the functioning of the internal 
market in tractors..   
Feasible. 
Option 2 -  
Provision of 
government 
backed loans 
to finance 
stocking of 
IIIA engines This option would provide tractor manufacturers with the 
access to finance the purchases of Stage IIIA engines, 
would allow them to conti nue to generate revenue 
necessary to develop Stage IIIB compliant tractors and would allow them to put St age IIIA compliant engines on 
the market during Stage IIIB. It would therefore achieve the 
policy objectives regarding the in ternal market. At the same 
time it would have only some  effectiveness regarding the 
development of IIIB tractors if tractor manufacturers would 
buy large numbers of IIIA engines for stocking and thus avoid having to redesign their tractors for IIIB engines.  Resources and time necessary for setting up the 
control system of stocked engines and 
surveillance by type approval authorities of Member States would be substantial. It would be expensive for tractor manufacturers due to 
the additional cost of preparing engines for 
longer stocking. There would also be a risk that extra demand for Stage IIIA engines might 
lead to higher prices for those engines in the 
short term (capacity c onstraints), which would 
require increasing the level of loans requested 
by tractor manufacturers. It also includes the 
associated administrative costs of providing loan guarantees for MS and administrative 
costs for banks to provide the loans.  
Overall, this option is not efficient. By providing the incentive to produce more Stage IIIA 
engines, this option might result in a large number of 
Stage IIIA engines being produced instead of the development of cleaner Stage IIIB engines. This would act as a counter incentive to innovate and to develop 
more environmentally friendly tractors, which makes 
the option not coherent with  the overall policy in this 
domain.  Feasible, but this option raises 
concerns with respect to the 
compatibility with EU-state aid provisions. No information available on willingness of MS to 
support. 
Option 3 -  
National 
scrapping 
schemes A scrapping scheme will stimulate demand for Stage IIIB 
compliant tractors but will not assist in helping tractor 
manufacturers to actually develop compliant tractors. Therefore it will only partly be effective in reaching the 
environmental objectives. Where not all MS introduce 
scrapping schemes or where the conditions of the schemes differ, there is a big risk that  the internal market objectives 
will not be reached. Substantial funds at national level will be 
required to provide the scrapping subsidies. At 
the same time, where a technical solution is not yet available (no IIIB tractor), it would not 
work. Positive impacts on environment as the use of a 
scrapping scheme will provide an incentive to the users 
to buy new tractors with cleaner Stage IIIB engines where they are available. Likely negative impacts on 
the internal market, where national schemes diverge. This option raises concerns with 
respect to the co mpatibility with 
state aid rules. Besides, the Commission is not aware of any 
MS plans to introduce a scrapping 
scheme, which makes this option unfeasible.  
Option 4.1 -  
Scaled 
Flexibility This system would in theory be  very effective with respect 
to the internal market and e nvironmental objectives as it 
would provide a targeted so lution for only those models 
where additional flex ibility is needed.  This option would require the collection of 
information on the amount of problems for 
each specific type of tractor in order to 
determine an appropriate flexibility. If that information were availa ble, it would also be This option would provide a good balance between 
environmental and economic impacts provided that 
there was perfect information on the basis of which a 
decision on adequate flexib ility for different tractors Given that the information 
required for the option is not 
available to the Commission, this 
option is not feasible. 
 
EN 62   EN efficient as it is very targeted.  could be taken.  
Option 4.2 –  
35% 
Flexibility  This option would allow tractor manufacturers to put 
additional Stage IIIA compliant tractors on the market during Stage IIIB. 
 
An increase to 35% is easy to implement and would allow industry to generate revenues in  the short term in order to 
finance R&D expenses. This a dditional flexibility could be 
introduced without setting up any new systems and therefore could provide an immediate response to the crisis, 
thus meeting the internal market objective  
The increase to 35% flexibility is the equivalent of a 13 
week delay in the introduction of Stage III B. It has thus a 
limited impact on emissions fr om tractors and would avoid 
a situation where old polluting tractors could not be replaced by cleaner ones. The option thus also meet the 
environmental objectives. 
This option would be somewhat effective in relation with 
objective 1 – to maintain the functioning of the internal 
market, but it is disputable whether 35% will be enough. 
Industry stated that 50% would be required.  No new system to set up, no up-front payments 
from industry involved; in this respect the option would be efficient. This option is not coherent with the Commission 
proposal for more flexibility for NRMM (50%).  
There is some trade off between the economic 
incentives and the environmen tal impacts. There is a 
potential negative impact on the environment as the introduction of stricter Stage IIIB compliant tractor is 
effectively being slightly de layed. On the other hand, 
the option allows replacement of old tractors by cleaner ones at any point in time, thus reducing 
emissions. There also exists a risk that firms using 
flexibility have a competitive advantage in terms of the 
price over IIIB compliant models. This could 
somewhat affect competition in the short term.  This option is feasible and can be 
rather easily implemented.  
 
EN 63   EN Option 4.3 –  
50% 
Flexibility  This option would allow tractor manufacturers to put 
additional Stage IIIA compliant tractors on the market during Stage IIIB. 
An increase to 50% is easy to implement and allow 
industry to generate revenues in  the short term in order to 
finance R&D expenses. This a dditional flexibility could be 
introduced without setting up any new systems and 
therefore could provide an immediate response to the crisis, thus meeting the internal market objective  
The increase to 50% flexibility is the equivalent of a 16 
week delay in the introduction of Stage III B52. It has thus 
a limited impact on emissions  from tractors and would 
avoid a situation where old po lluting tractors could not be 
replaced by cleaner ones. The option thus also meets the 
environmental objectives. No new system to set up, no up-front payments 
from industry involved, therefore this option would be efficient.  There is some trade off between the economic 
incentives and the environmen tal impacts. There is a 
potential negative impact on the environment as the 
introduction of stricter Stage IIIB compliant tractor is 
effectively being slightly de layed. On the other hand, 
the option allows replacement of old tractors by 
cleaner ones at any point in time, thus reducing 
emissions. There also exists a risk that firms using flexibility have a competitive advantage in terms of the 
price over IIIB compliant models. This could 
somewhat affect competition in the short term.  This option is feasible and can be 
rather easily implemented. Industry strongly supported this 
option and did not raise the issue 
of possible competition distortion.  
Option 4.4 –  
80% 
Flexibility  This option would allow tractor manufacturers to put 
additional Stage IIIA compliant tractors on the market 
during Stage IIIB. 
An increase to 80% is easy to implement and would allow industry to generate revenues in  the short term in order to 
finance R&D expenses. This a dditional flexibility could be 
introduced without setting up any new systems and therefore could provide an immediate response to the crisis, 
thus meeting the internal market objective  
This option would be effective only in relation with objective 1 – to maintain the functioning of the internal 
market. On the other hand industry stated that 50% would 
be enough. No new system to set up, no up-front payments 
from industry involved; in this respect the 
option would be efficient. But it is not efficient 
due to the environmental trade-off, more 'old' 
tractors coming on the market that do not 
.comply with the new requirements. This option is not coherent with the Commission 
proposal for more flexibility for NRMM (50%). 
The option is not coherent with environmental policy, 
as the introduction of stricter Stage IIIB compliant tractor is effectively being delayed. There also exists a 
risk that firms using flexibility have a competitive 
advantage in terms of the price over IIIB compliant models. This could somewhat affect competition in the 
short term.  This option is feasible and can be 
rather easily implemented.  
     
                                                 
52 If all of the flexibility was used straight away in the current 20% flexibility scheme then the manufacturer could delay using  Stage III B by 10 weeks, instead, under the 
proposed 50% flexibility the manufacturer can delay by 26 weeks. Th erefore, assuming constant sales,  this is an extension of 16  weeks. 
 
EN 64   EN Option 4.5 –  
Penalty 
mechanism This option would be effective regarding the internal 
market and environmental objectives if the optimal level of the penalty could be determined and is uniform across 
firms. This is however not possible. Creating and implementi ng a penalty system 
would place administrative burden on MS, Moreover if the measure was to be harmonised 
and implemented identically in all MS, 
additional costs would be involved at the EU level (funding resources, notification and 
surveillance, translation costs etc.). It is 
therefore not considered to be efficient. This option would be rather coherent with 
environmental and competition objectives and providing incentives to innovate. Due to the lack of data this option 
is not feasible. 
Option 4.6 -  
Trading 
scheme If it were possible to set up such a system it would in 
principle be effective in reach ing the internal market and 
environmental objectives. Additional EU and national resources would be 
needed in order to put the trading scheme in 
place. However, the advantage of such a system is its built in mechanism leading to 
efficient avoidance of pollution and efficient 
innovation. This option would be cohere nt with environmental and 
competition objectives and providing incentives to 
innovate. The time taken to develop a 
trading system would not be 
effective in meeting the immediate requirements of the industry. It is 
not feasible in the scope of a few 
years. 
Option 4.7 - 
ABT In principle it might be effective but it would take too much 
time to implement; in addition EP and Council disapproved 
it before. See option 4.6 above. See option 4.6 above. See option 4.6 above. 
. 
 
EN 65   EN ANNEX XI: Calculation of environmen tal impact and maintenance costs  
1. Calculation of environmental costs  (paragraph 7.1.2) 
Building on the 2005 figures53 for the NRMM  sector, where the aver age share of emissions 
exhausted by new engines put on the market during one year accounts for around 5% of the 
total emissions of NRMM, while the remaining 95% comes from the engines already operating on the market, we can a ssume that the situation looks si milar in case of the tractors' 
sector. 
The amendment of flexibility from 20% to 50% would increase the emissions of newly 
produced  machinery within the first year by a bout 9% compared to the current scheme. 
However, the overall  machinery CI engine emissions would increase for the first year under 
the 50% flexibility by around 0,3% compared to the current 20% scheme. In absolute 
numbers the amounts of emissions can be quantif ied to about 0,66 kt for PM and 9,8 kt for 
NO
x per year for all NRMM.  
When we assume that the contribution of tract ors to overall agricultural machinery emissions 
will not change (45% for PM and 40% for NO x – JRC study), the same  approach would lead 
to 0,3 kt for PM and 3,9 kt for NO x per year54. 
2. Maintenance of old tractors (paragraph 6.1) 
Copy from ARCADIS SME study: 
"In Section 8.1 we had reported th at if a high clearance tracto r is used beyond its economic 
lifetime, annual maintenance costs can be expe cted to increase from 1500-2000 EUR per year 
to 3000-4000 EUR per year. 
For illustrative purposes, we assume that the cost  increase is 2 500 EUR per year per tractor, 
and that all special tractors f ace the same increase in maintenance costs as the high clearance 
tractors. To remain consistent with the IA st udy, we assume that a t echnical solution can be 
found 5 years after the planned intr oduction date of the next emi ssion stage, that a total of 25 
600 units are sold per year in the EU a nd that a discount rate of 4% applies. 
For the T4.1 tractors, based upon the response received during the consultation, we assume 
that 400 units are sold per year.  
To the best of our knowledge, no data on the sales of C2 tractors are publicly available. Thus, 
in total we assume that 26 000 special tractors are sold per year. We assume that all sales 
correspond to replacement sales and that, once th e technical solution ha s been developed, old 
tractors are replaced at a rate of 26 000 units per year. The table below gives then, for each 
year after the planned introduction of stage IIIB until all “old” tr actors have been replaced by 
stage IIIB compliant tractors, the increase in the number of tractors that are kept in use 
beyond their economic lifetime and the implied ex tra maintenance costs at the EU level. 
                                                 
53 Summarised sales table of new tractor to be placed on the market and table of existing tractors, covered 
by the tractors Directive, are available in Annex V 
54 Based on JRC table 5.4 data of 26 kt PM and 515 kt NO x p.a. See Annex XII for further details. 
 
EN 66   EN Table 5: Extra maintenance costs for speci al tractors used beyond economic lifetime 
Year Number of tractors kept in use Extra cost per year 
1 26 000 65.000.000 
2 52 000 130.000.000 
3 78 000 195.000.000 
4 104 000 260.000.000 
5 130 000 325.000.000 
6 104 000 260.000.000 
7 78 000 195.000.000 
8 52 000 130.000.000 
9 26 000 65.000.000 
 
The net present value of these costs (discounted to the planned introduct ion of stage IIIB) is 
1 339 million EUR. This is an order of magnitude higher than  the environmental benefits 
linked to not postponing stage IIIB  with 5 years (120 million EUR). 
Thus, even if actual higher maintenance cost would be significantly lower than suggested by 
the manufacturers, the costs of not postponing stag e IIIB would still be much higher than the 
benefits."