EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 28.10.2009 
SEC(2009) 1455 
COMMISSION STAFF WORKING DOCUMENT 
  
SUMMARY OF THE IMPACT ASSESSMENT  
Accompanying document to the 
 
Proposal for a 
 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
 
Setting emission performance standards for ne w light commercial vehicles as part of the 
Community's integrated approach to reduce CO 2 emissions from light-duty vehicles 
   
{COM(2009) 593 final} 
{SEC(2009) 1454} 
EN 2   EN 1. PROBLEM DEFINITION  
The overarching problem as identified in the earlier Communications (r evised strategy on 
CO 2 and light-duty vehicles1, impact assessment on the CO 2 and cars proposal2) is that 
the existing policies to reduce CO 2 emissions and improve fuel  efficiency of new cars 
sold in the EU have not been able to de liver the progress needed  for reaching the long-
standing EU objective of an average new light duty vehicles fleet CO 2 emission of 120 g 
CO 2/km.  
The revised strategy COM(2007) 19 announced  that the Commi ssion would propose a 
legislative framework to achieve the Community targ et of 120 g CO 2/km. A key element 
of the strategy consists in legislation on the CO 2 emissions of passenger cars which was 
agreed in co-decision in December 2008, reducing the CO 2 emissions of passenger cars 
to 130g/km on average. The strategy identifie s additional measures to achieve a further 
reduction of CO 2 emissions by 10 g/km (the integrat ed approach). New legislation to 
reduce the CO 2 emissions of Light Commercial Vehicles (LCVs) is one of these 
measures. In view of the increasing share of LCVs in the European fleet, lack of 
efficiency measures for these vehicles w ould put at risk the full achievement of 
objectives of the revised strategy, includi ng the objectives of the regulation on CO 2 from 
passenger cars.  
An extensive discussion on th e appropriate policy instrument s that should be used to 
improve fuel efficiency and performance in terms of CO 2 emissions in lig ht duty vehicles 
already took place in the context of th e Commission's Communica tions and in the 
proposal for a regulation on CO 2 emissions from cars. The conclusion of this discussion 
was that voluntary agreements with industry di d not bring the expect ed outcome and that 
a regulatory approach was the best solu tion to tackle the problem of rising CO 2 emissions 
from light-duty vehicles. 
The EU is committed to reduce its total gr eenhouse gas emissions by 2020 by 20%, or by 
30% if a comprehensive international agreemen t is reached. It is clear that all sectors 
have to contribute to the reduction effort. The emissions from LCVs represent around 
1.5% of EU total CO 2 emissions and the demand for LCVs  is growing. It is imperative 
that growing emissions from LCVs do not co unter balance the effort made in other 
transport modes and sectors of the EU economy.  Moreover, further to the adoption of the 
regulation on CO 2 from passenger cars ther e is a strong rationale  for regulating other 
sectors of road transport, also in order not  to create a potential regulatory gap where 
larger and highly emitting passenger cars could avoid the target. For these reasons, the business as usual option has been discarded from further analysis. 
                                                
 
1 COM(2007) 19. 
2 SEC(2007) 1723. 
EN 3   EN 2. OBJECTIVES  
2.1. Policy objectives 
The general policy objectives applicable for the legislative proposal on light commercial 
vehicles are very similar to  those developed for the CO 2 and cars proposal, that is:  
• Providing for a high level of environmen tal protection in the European Union and 
contributing to reaching the EU's climate change targets; 
• Reducing oil consumption and thus improvi ng the security of energy supply in the 
EU. 
The specific objective covers: 
• To reduce the climate change impacts and improve the fuel efficiency of light 
commercial vehicles by means of a specified  emission reduction for new vehicles in 
line with the revised strategy COM(2007) 19. 
The operational objectives include: 
• Designing a legislative propos al that efficiently implements the fleet average 
emissions target for new LCVs and pr events any regulatory gap which could 
undermine the effectiveness of the regulation on CO 2 and cars;  
• Making the legislation compatib le with the regulation on CO 2 and cars for reasons of 
simplification; and 
• Providing a regulatory framework that avoids any unjustified distortion of competition 
between automobile manufacturers.  
2.2. Consistency with horizontal objectives of the European Union 
The policy objectives promote innovation and technological development, enabling the 
EU industry to achieve global leadership in the field of fuel efficient technologies in view 
of oil scarcity and of fuel efficiency legi slation in other countri es, contribute to the 
Growth and Jobs agenda a nd promote highly qua lified jobs in Europe. The policy 
objectives are in line with the Renewed Sust ainable Development Strategy spelled out in 
June 2006 by the European Council which unanimously reconfirmed3 that " in line with 
the EU strategy on CO 2 emissions from light duty vehic les, the average new car fleet 
should achieve CO 2 emissions of 140g/km (2008/09) and 120g/km (2012) ". In addition, 
the objectives of the propos ed Regulation to reduce CO 2 emissions from light 
commercial vehicles (in addition to the legisl ation on cars) will have important share in 
the GHG reduction in the non-ETS sector as re quired in the Effort Sharing Decision. 
                                                 
3 Renewed EU Sustainable Development Strategy, June 2006. 
EN 4   EN 3. POLICY OPTIONS  
The supporting study on light commercial vehicles  analysed the target levels set in the 
revised Strategy on CO 2 emissions from light duty vehicl es, that is: 175 g/km target in 
2012 and 160 g/km target in 2015. However, further to the major developments since the publication of the revised Stra tegy, i.e. improvement of ava ilable dataset and agreement 
of the Regulation on CO
2/cars (with new target dates), an  alternative date  of introduction 
from the range 2013 to 2015 is also considered . The second step of 160 g/km envisaged 
in the Strategy was discarded as unrealis tic in the 2015 time horizon, and thus is 
considered as part of the discussi on on an additional target for 2020. 
The impact assessment analyses the following policy options: 
Option 1 - 175 g/km target in 2012 with  mass as utility parameter; 
Option 2 - 175 g/km target in 2013-2015 w ith mass as utility parameter 
Option 3 - 175 g/km target in 2012 with pa n area as utility parameter; 
Option 4 - 175 g/km target in 2013-2015 with  pan area as utility parameter; 
Option 5 - percentage reduction targets considered for both 2012 and 2013-
2015. 
All the above options are also assessed in vi ew of the slope of the utility curve and 
autonomous mass increase (AMI) of 0% and 1.5%. 
In terms of flexibility mechanisms, the options of fleet averaging by individual 
manufacturers, averaging amongs t manufacturers of LCVs ( pooling), as well as between 
both passenger cars and LCVs are examined. 
Following the approach taken in the im pact assessment for regulation on CO 2 from 
passenger cars, the excess emissions premium has been identified as being the most 
suitable way of enforcing the regulation. The level of premium is of crucial importance 
for the effectiveness of the scheme. In line with the regulation on CO 2 from passenger 
car, the premium should be cons istent with the marginal CO 2 abatement cost. 
Finally, the additional target for 2020 (the long-term target) complementing the short 
term options listed above is analysed. Fu rther to the analysis  performed by the 
consultant, the emissions leve ls from the range 125 to 160 g CO 2/km have been 
identified as potential future targets for LCVs.  
4. ANALYSIS OF IMPACTS  
4.1. Economic impacts 
The distributional analysis of options listed above leads to conclusions that the utility 
parameter based on pan area ( option 3  and 4) is less cost-effective than the mass-based 
parameter ( option 1  and 2). A serious drawback of pan ar ea-based parameter is that the 
distributional impacts are much more spread out than in case of a mass-based utility. The 
individual targets for some  manufacturers become more stringent for pan area as 
EN 5   EN compared to mass. Also option 5 , despite the lowest average costs and the most even 
distribution of reduction effort  between manufacturers, proves to have serious drawbacks 
of penalising past effort to reduce CO 2 emissions (discouraging early introduction of 
measures to reduce CO 2 emissions) and creates difficulties in defining the target for new 
market entrants. 
Utility curves with lower slope s, i.e. 0% to 40% seem less  suitable for LCVs than for 
passenger cars where perverse incentives of increasing weight in order to gain a less 
stringent target are of greater importance. Li ght commercial vehicles are used to transport 
goods therefore there are fewer in centives to make them heav ier. Also market shifts on 
the LCV market are usually not driven to the same extent by such incentives as luxury or 
increased comfort. Therefore, it is concluded that the risk of perverse incentives in LCVs is limited, and a higher slope than the one used for passenger cars can be applied.  
A comparison of slope variants for limit func tions of all options shows that the sales-
weighted average retail price increase per vehi cle is lower for higher values of the slope, 
although the difference in aver age costs is not very si gnificant. The most even 
distribution of retail price increase is  observed between 100% and 120% slopes. 
However, even though the risk of perverse in centives of increasing the mass of vehicles 
to receive less stringent targets in LCVs is regarded as low, the slope of 120% is more 
likely to provoke these adjustments than the 100%  slope . 
Further to the analysis conducted in the impact assessment on CO
2 from passenger cars, 
an account of possible future developments (inc rease of the mass) of the market for light-
commercial vehicles is taken. The autonomous mass increase  (AMI) set at the level 
greater than 0% increases the cost of m eeting the average target and makes it more 
difficult for certain manufacturers to meet thei r targets. In view of a less significant 
probability of increase of ma ss of LCVs, a zero autonomous mass increase is therefore 
considered as the most suitable for this category of vehicles. 
The analysis of cost-effectiveness for th e short-listed options (mass-based utility 
parameter) concludes that in case of zero AMI the emissions reduction target of 175 
g/km for light commercial vehicles is cost e ffective to society (i.e. the abatement costs 
are negative) at both, 60% a nd 100% slope. Cost s to society become negative at oil 
prices ranging from 50 to 54 €/bbl and above . The difference between  the two options is 
negligible in terms of costs to society and CO 2 abatement costs. The overall amount of 
CO 2 saved is slightly lower in the options w ith a later start date  (2013-2015), because of 
the delay in the implementation of the target. The analysis of fuel price sensitivity shows 
that if the fuel prices de crease by half, the GHG abatement costs will be positive for 60% 
and 100% slope respectively  (€12.9 – €15.7 per tonne CO 2 eq.) as the higher purchase 
costs will not be fully offset by the fuel savi ngs. However, even in this unfavourable case 
they are within the range of the EU ETS price as well as being comparable to the 
abatement costs for cars as presented in the CO 2 from cars impact assessment. 
4.2. Social impacts 
The assessment of the costs to the society revealed that the retail price increase of 
vehicles will be compensated by the fuel sa vings over the lifetime of the vehicle.  
The regulation on CO 2 from LCVs is not expected to  have a significant impact on 
employment. The potential impacts will be simi lar to those expected for passenger cars 
EN 6   EN however, as the light commercial vehicles c onstitute only 10% of the automotive market, 
the share in the overall employment  will be proportionally lower.  
The demand for light commercial vehicles is le ss elastic than in case of passenger cars 
and an increase in the retail pr ice resulting from the legislation is expected to have a 
marginal impact of less th an 1% on LCV sales by 2020 comp ared to the base case, and 
decrease by less than 2,7% in 2030. 
4.3. Environmental impacts 
The average emission reduction for the 2010-2020 in option 1  is about 67-77 million 
tonnes, with savings being slightly higher at the 100% slope. The CO 2 reduction 
delivered in option 2 in 2020  amounts to about 60 million tonnes. The difference 
between the options is caused by the fact th at the target of 175 g/km will be achieved 
later than in option 1 . 
The introduction of a long-term target from the range of 125-160 g/km in 2020, in 
addition to the short-term target, allows  for cumulative savings of 59-82 Mt CO 2 eq. from 
2010 to 2020 depending on the chosen scenario (i .e. combination of short- and long-term 
targets) and 247-342 Mt CO 2 eq. from 2010 to 2030. 
A reduction in the GHG emissions from LCVs for option 2 in year 2020 corresponds 
roughly to around 4% of the total reduction effort under the decisions of European 
Parliament and of the Council on the effort of Member Stat es to reduce their greenhouse 
gas emissions to meet the Community’s gr eenhouse gas emission reduction commitments 
up to 2020. This is lower than 4.4% for option 1 which is due to the later implementation 
of the target. The introduction of the long-te rm target increases the non-ETS effort share 
of light-commercial vehicles to 5-6%. 
5. COMPARING THE OPTIONS  
5.1. Comparison of the two options 
 Option 1 
Mass-based utility 
Target year – 2012 
Slope: 60% - 100% Option 2 
Mass-based utility 
Target year – 2013-2015 
Slope: 60% - 100% 
Environmental 
impacts (i.e. CO 2 
reductions) ☺ 
67 to 77 Mt CO 2 eq. until 2020 . 
At least around 60 Mt CO 2 until 
2020 
5,4% - 5,8% per vehicle 
The cost of meeting this target for both start dates is similar if zero AMI 
increase is assumed  Average compliance costs (expressed as relative retail price increase for 60%-100% slope) 7.9% - 8.3% per vehicle 9.5% - 9.9% per vehicle 
EN 7   EN  Option 1 
Mass-based utility 
Target year – 2012 
Slope: 60% - 100% Option 2 
Mass-based utility 
Target year – 2013-2015 
Slope: 60% - 100% 
Higher cost results from the need 
to compensate for the autonomous 
mass increase of 1.5% 
(AMI=1.5%) Higher cost results from the need 
to compensate for the autonomous 
mass increase of 1.5% 
(AMI=1.5%) 
Cost-effectiveness ☺ 
-13.5 to -10.2 €/ton CO 2 eq. ☺ 
Around -13.5 €/ton CO 2 eq.  
Other economic 
impacts (incl. competitive neutrality) . 
The slope of 60% makes it very 
challenging for some manufacturers producing larger vehicles (class III) to meet their respective targets. The slope of 100% gives a more even distribution of co sts over different 
manufacturers and on average a lower cost of compliance for the 
industry.  
The start date of 2012 is very 
challenging and does not leave enough lead time for manufacturers to adjust their production cycles. ./☺ 
Concerning slope and costs this 
option has similar characteristics as option 1. However, it provides manufacturers with more time to respond to the requirements of the legislation. 
 
Other economic 
impacts - impact on businesses including SMEs ☺ 
Light Commercial Vehicles are 
mostly used by commercial 
enterprises including SMEs. At 
both slopes there are net benefits to 
the vehicle operator. ☺ 
At both slopes there are net 
benefits to the vehicle operator. 
Option 2 also offers net benefits 
per vehicle to the vehicle operator 
in the same order as option 1.  
Social impacts (employment) ☺ 
The higher added value on the 
vehicle is likely to lead to more 
employment along the value chain 
(similarly to effects of CO 2/cars ☺ 
The higher added value on the 
vehicle is likely to lead to more 
employment along the value chain 
(similarly to effects of CO 2/cars 
EN 8   EN  Option 1 
Mass-based utility 
Target year – 2012 
Slope: 60% - 100% Option 2 
Mass-based utility 
Target year – 2013-2015 
Slope: 60% - 100% 
regulation).  
The adverse impacts on the sales 
of new vehicles are estimated to be 
very small: -0.69% to – 1.33%  regulation).  
The adverse impacts on the sales 
of new vehicles are estimated to be 
very small, around -1%.  
 
Option 2 seems to be the most promising  with an assumption of zero AMI  and a 100% 
slope  of the utility curve. Th e introductory date from the range 2013-2015 provides 
manufacturers with more time to  meet the regulation however CO 2 savings are higher for 
earlier dates. The excess emissions premium sh ould be set at the level of the marginal 
cost of abatement of € 120/g to ensure co mpliance. Finally, the long-term target of 135 
g/km by 2020  would be comparable to the target of 95g/km set for emissions from 
passenger cars and should be taken forward as  a second step of the reduction effort.