Communication from the Commission to the Council and the European Parliament - Implementing the Community strategy to reduce CO2 emissions from cars: an environmental agreement with the European automobile industry
Date: 1998-07-29
Institutions: European Commission
Subjects: air quality, environmental protection, motor fuel, motor vehicle, motor vehicle industry

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.07.1998 
COM(l 998) 495  final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN  PARLIAMENT 

i  '. 

Implementing the Community Strategy to Reduce C02 Emissions from Cars: 
An Environmental Agreement with the European Automobile Industry 

....  >t M. 
-^"V 
';.'. 

I. 

Introduction 

One  of  the  elements  of  the  Community's  strategy  to  reduce  C02  emissions  from 
passenger  cars  and  improve  fuel  economy  (COM(95)  689)  is  an  environmental 
agreement  with  the  automotive  industry  (the  other  elements  being  vehicle-related 
fiscal  measures 
to  promote  fuel-efficient  cars  within  an  overall  Community 
framework  on  vehicle  taxation,  and  a  consumer  fuel-economy  infonnation  scheme 
(fuel-economy  labelling)).  These  three  instruments  will  reinforce  and  add  to  each 
other  when  implementing  the  strategy.  Following  the  outcome  of  its  negotiations 
with  the  European  automobile  industry  {European  Automobile  Manufacturers 
Association  - ACEA)  and  its earlier consultations with  the Council  and the  European 
Parliament  on  this  matter,  the  Commission  intends  to  conclude  an  agreement  with 
ACEA (hereinafter  'the Agreement *). 

The  Community's  strategy  on  C02  emissions  from  passenger  cars  was  proposed  by 
the  Commission.  The  Council  endorsed  its  overall  approach.  The  Council  specified 
that the objective  of the strategy  should be to achieve an average C02  emission  figure 
for  new  passenger  cars  of  120  g/km  by  2005,  or  by  2010  at  the  latest  (Council 
conclusions  of 25.6.1996).  The Council  also indicated that an agreement  should  seek 
to commit the industry "to make the major  contribution" to this objective. 

fuel-economy 

The  European  Parliament  for  its  part  has  so  far  objected  to  the  principle  of  an 
agreement  and  has  called  on  the  Commission  to  propose  C02  emission  limit  values 
for passenger cars, with even more ambitious objectives than those set by the Council, 
while  supporting 
fiscal  measures  (resolution  of 
labelling  and 
10.4.1997).  However,  the  Commission  understands  that  though  maintaining  its 
opposition  to  an  agreement  in  principle,  the  Parliament  might  go  along  with  an 
agreement  under  certain  conditions.  During  the  successful  conciliation  between  the 
Parliament  and the Council  on the Auto-Oil  I fuel  quality directive on 29.6.1998, the 
Commission  at  the  invitation  of  the  European  Parliament  made  the  following 
declaration:  "In  the  event  of  negotiations  with  ACEA  not  coming  to  a  successful 
conclusion,  the  Commission  undertakes  to  consider  the  introduction  of  binding 
legislation." 

The  Commission  will  shortly put  forward  a legislative  proposal  for  a consumer  fuel-
economy information  scheme. 

The  Commission  believes  that  the  terms  of  the  Agreement  which  the  Commission 
intends  to  conclude  with  ACEA  correspond  to  the  Council's  expectations  and  the 
Commission's  own  original  objectives  (COM(95)  689).  Furthermore,  they  take 
account  of  the  general  criteria  for  environmental  agreements  contained  in  the 
Commission  Communication  on  Environmental  Agreements  (COM(96)  561).  The 
Agreement  will  take  the  form  of:  a  Commitment  formally  adopted  by  the  Board  of 
ACEA  (see  Annex);  a  Recommendation  to  be  adopted  by  the  Commission 
subsequently; and (as far as its practical implementation  is concerned) an exchange of 

letters  between  ACEA  and  the  Commission.1  This  Communication  sets  out  the 
Commission's  assessment of the terms of the Agreement. 

II. 

The terms of the Agreement: The Commission's  assessment 

The  Commission  Communication  on  Environmental  Agreements  (COM(96)  561) 
recommends  a  number  of  general  guidelines  for  environmental  agreements.  The 
Agreement  with  ACEA  takes  account  of  these  guidelines,  and  satisfies 
the 
requirements of the Community's strategy on C02 emissions from cars. 

1. 

CQ2 emission objective: 

The ACEA  Commitment contains  a clearly quantified  C02  emission objective  for  the 
average  of  new  passenger  cars  sold  in  the  European  Union,  i.e.  140  g/km  to  be 
achieved  by  2008,  measured  according  to  the  Community's  current  measurement 
procedure  (Directive  93/116/EC).  The scope of the Agreement are passenger  cars  of 
category  Ml  as  defined  in  Directive  70/156/EEC,  although  innovative  vehicle 
concepts  and  cars  using  alternative  fuels  or  radically  new  propulsion  systems  will 
equally  be  counted  towards  ACEA's  C02  objective  (see  the  assumption  concerning 
the acceptance  of  innovations  in the  Commitment).  In the Commission's  view, these 
specifications  meet  the  requirement  of  a  quantified  objective  and  unambiguous 
definitions  as a major criterion  for a good environmental agreement. 

The  C02  objective  of  the  Agreement  for  2008  also  corresponds  to  the  Council's 
benchmark  that  an  agreement  should  make  "the major  contribution" to  the  objective 
of  the  Community's  strategy  as a whole by  covering  about  70% of  the  gap  between 
the  current  (1995)  market  average  (186  g/km)  and  the  Community's  120  g/km 
objective.  The  target  year  of  2008  is  within  the  timeframe  set  by  the  Council,  i.e. 
2005  - 2010.  In  addition,  ACEA  commits  itself  in  2003  to  review  the potential  for 
additional C02  emission reductions in the 2012 perspective. 

Given that the Community's  strategy on C02  from  cars consists of instruments  which 
complement each other in achieving the strategy's overall target, it is essential that the 
added  value  of  the  instruments  is  maintained.  C02  emissions  from  cars  can  be 
reduced: 

9 

by  technological  improvements.  Technological  improvements  can  furthermore 
induce changes in the market by increasing the attractiveness of certain  categories 
of cars to the consumer and/or creating new market segments; and 

by  changes  in  the  market,  and  in particular  by  a  shift  towards  smaller  and  more 
fuel-efficient  cars ('downsizing').  Market changes can be the result of changes in 
consumer  preferences,  product  policy  and  marketing  efforts  by  the  automotive 
manufacturers,  and fiscal measures and fuel-economy  labelling, inter alia. 

1  See  also  the  analysis  by  the  Commission  Services  of  ACEA's  proposal  for  a  Commitment  of 
2.6.1998 (SEC(1998)  1047) which already contained most of the elements of the Commitment. 

The  added  value  of the different  elements  of the  Community's  strategy  is ensured  as 
ACEA commits itself in the Agreement  to technological  improvements  and as its  C02 
target  allows  for  C02  emission  benefits  from  market  changes  in  addition  to  ACEA's 
C02  commitments,  which  could  be  induced  by  fiscal  measures  and  fuel-economy 
labelling. 

ACEA's  Commitment  explicitly  recognises  the  possible  added  value  of  fiscal 
measures,  and  does  not  contain  any  clauses  which  question  the  right  of  the 
Community  or  its  Member  States  to  exercise  their  prerogatives  in  the  field  of  fiscal 
policy.  At the same time, ACEA assumes that it can achieve its C02  objectives  under 
the  Commitment  without  additional  fiscal  measures.  Furthermore,  ACEA  commits 
itself to achieving  its C02  target for 2008 'mainly' by technological  developments and 
related  market  changes  which  leaves  scope  for  further  market  changes  being  induced 
by  the  other  instruments  of  the  Community's  strategy.  The  Commission  will 
emphasise in its Recommendation  the added value of fiscal  measures.  With the added 
value  provided  by  the  other  instruments  foreseen  in  the  strategy,  the  Commission 
considers it desirable to build upon ACEA's commitment with a view to achieving the 
Community's  120 g/km objective. 

2. 

Assumptions: 

ACEA's  Commitment  contains  certain  assumptions.  The  assumptions  reflect  the  fact 
that  the  automotive  industry's  ability  to  attain  its  C02  objective  may  be  affected  by 
developments  outside  its  control,  reflecting  technical  and  economic  constraints,  and 
they  are  therefore  justifiable.  More  particularly, 
the  Commission  sees  the 
assumptions in the following  context: 

1.  The  availability  of  enabling  fuels  for  the  application  of  technologies  required  to 
achieve  ACEA's  C02  objective:  The  Commitment  is  based  on  the  requirements 
resulting  from  the  conciliation  procedure  between  the  Council  and  the  European 
Parliament  on  29.6.1998, notably  the  maximum  sulphur  specifications  of  50 ppm 
in petrol and diesel and the maximum  aromatic content for petrol of 35 %, although 
ACEA  expects  that  the  market  average  fuel  quality  will  be  better  than  these 
legislative  requirements  for  technical  and  market  reasons.  Any  problems  with 
respect to fuel  quality would be considered in the monitoring of the Agreement. 

2.  No  distortions  of competition  which  disfavour  the European  manufacturers  due to 
their  efforts  to  reduce  C02  emissions:  This  assumption  is  in  line  with  the 
Community's strategy on C02  emissions from cars.  (See also Section III below.) 

3.  The unhampered  diffusion  of  fuel-efficient  technologies  into  the market:  It is the 
Commission's  and  ACEA's  common  understanding  that  this  does  not  restrict  the 
Community's  and  the  Member  States'  freedom  to  use  fiscal  or  regulatory 
measures.  However,  such measures would be considered  in the monitoring  of the 
Agreement and could be grounds for its review under certain circumstances. 

4.  Impacts  of  the  strategy  on  the  general  economic  situation  of  the  European 
automobile  industry  to  be  taken  into  account:  These  would  in  any  case  be  taken 
into account by the Community. 

The Commission  has no reason to believe that the assumptions2 will  not be borne out, 
and  therefore  it  should  not  be  necessary  to  review  the  Agreement  at  any  stage.. 
Furthermore, the Commission would  agree to a review of ACEA's C02  objective  only 
once both sides had jointly conducted  a careful  analysis of all relevant  circumstances, 
having consulted  other experts as appropriate, and once both parties had exhausted  all 
other  means  to  maintain  the  C02  objective.  ACEA  and  the  Commission  will  lay 
down the procedure to be followed  in such an event in an exchange of letters at a later 
stage. 

Overall, the  Commission  views the C02  emission  objective  of ACEA's  Commitment 
as a firm  and unequivocal basis for the Agreement which satisfies  the requirements  of 
the Community's strategy to reduce C02 emissions from passenger cars. 

3. 

Intermediate objectives: 

The  Commission,  the  Council  and  the  European  Parliament  have  emphasised  the 
importance  of  intermediate  targets  in  an agreement  with  the  automotive  industry.  A 
staged approach  is also an essential  guideline for  environmental  agreements  generally 
(COM(96) 561).  The Agreement with  ACEA conforms  with  this criterion by  setting 
the following  two intermediate objectives: 

1.  Not  later  than  2000,  some  European  manufacturers  will  begin  to  sell  models 
emitting  120  g/km  C02  or  less  in  the  EU  market.  This  demonstrates  ACEA's 
commitment to undertake efforts  soon to reduce C02 emissions from cars. 

2.  An "estimated  target range" for the average new car C02  emissions is provided  for 
2003.  This  target  range,  however,  is  indicative  and  does  not  represent  an 
additional commitment by the industry. 

The  Commission  recognises  that  the  intermediate  target  for  2003  is  of  a  purely 
indicative  nature,  which  is  in  line  with  the  guidelines  in  its  Communication  on 
Environmental  Agreements  (COM(96)  561). 
It  nevertheless  attaches  special 
importance  to  this  intermediate  objective  as  a  basis  for  verifying  whether  the 
Agreement  is  effective.  This  corresponds  in particular  to  concerns  expressed  by  the 
European  Parliament.  Against  this  background,  the  Commission  would  thoroughly 
review  the  Agreement  should  ACEA  fail  to  achieve  its  target  range  in  2003,  and 
consider  drawing  up  a proposal  for  binding  legislation.  Of  course,  the  Commission 
would  in  any  event  take  measures  to  allow  the  target  to  be  achieved  should  any 

2  Another  'assumption'  besides  those  mentioned  above  is that  innovative  vehicle  concepts,  and  cars 
using  alternative  fuels  or radically  new propulsion  systems  will be  counted  towards the  C02  objective 
of  the  Agreement.  However,  this  'assumption'  relates  more  to  the  definition  of  the  scope  of  the 
Agreement  (see  above),  and as the Commission  accepts  the  inclusion  of  such  vehicles  in the  scope  of 
the Agreement,  it is not strictly speaking an assumption. 

circumstances  arise  at  any point  during  the  life  of the Agreement  suggesting  that  the 
Agreement  is  not  being  honoured.  This  intention  should  be  included  in  the 
Commission  Recommendation  and  will,  as  a  result,  form  part  of  the  Agreement. 
ACEA  is  fully  aware  of  this  clause.  It  should  be  noted  that  the  Commission  has 
already  stated  its  intention  to  consider  the  introduction  of binding  legislation  should 
the negotiations  with  ACEA  fail  (through  its  declaration  made  during  the  successful 
Auto-Oil Conciliation on 29 June - see above). 

0 

4. 

Monitoring, verification  of results and reporting: 

The Council conclusions of 25.6.1996 stressed the importance of a monitoring  system 
to follow  the development  of the average C02  emissions of new passenger cars on the 
basis  of  data  provided  by  the  Member  States.  A  monitoring  system  independent  of 
industry  data  is  the  best  basis  for  an  independent  verification  of  results  (one  of  the 
criteria  for  environmental  agreements  recommended  by  the  Commission  (COM(96) 
561)).  The  Commission  has  presented  a  proposal  for  a  Community  monitoring 
system  along  these  lines  (COM(1998) 348).  It invites  the Council  and the  European 
Parliament  to treat this proposal  rapidly  so that the system  can become operational  as 
soon  as  possible.  At  the  same  time,  the  Commission  welcomes  ACEA's  offer  to 
provide  its  own  data  derived  from  official  government  sources,  in  particular  with  a 
view  to  monitoring  progress  before  the  future  Community  monitoring  system  is 
operational. 

In addition to the statistical  exercise of tracking the evolution of average new car  C02 
emissions, a broader,  'holistic'  monitoring  system is established by the Agreement, to 
be  administered  jointly  by  the  Commission  and  ACEA.  This  system  would  give 
particular scrutiny to the assumptions underlying the ACEA  Commitment.  ACEA has 
agreed  to provide the necessary  information  in order to  allow  this monitoring  system 
to function  and to enable it to identify  in a proactive way problems which might  arise 
in the achievement  of the C02  emission  objective  of the Agreement.  It will allow the 
early  identification  of  any  circumstances  which  might  facilitate  or  hinder  the 
achievement  of  the  objectives  of  the  Agreement.  The  procedures  for  this  joint 
monitoring  system  will  be  laid  down  in  an  exchange  of  letters  between  the 
Commission  and  ACEA.  The  future  Community  monitoring  system  and  the  joint 
monitoring  mechanism  with  ACEA will, in the Commission's  view, together  provide 
an effective  instrument  for  the monitoring  of the Agreement  and  a basis  for  a broader 
co-operation between both sides in the area of C02 emissions from  passenger cars. 

Based  on the  future  Community  monitoring  system  on  C02  emissions  from  cars, the 
joint  monitoring  system  with  ACEA  and  any  further  studies  as  necessary,  the 
Commission  will  report  annually  to the  Council  and the European  Parliament  on the 
implementation  of the Agreement and of the progress and impact of the  Community's 
strategy on C02  emissions from  cars overall in the light of the Kyoto commitments.  If 
appropriate,  it  will  involve  technical  experts  from  the  Member  States  in  the 
preparation of this report. 

Together  with  the  publication  of  the  ACEA  Commitment  and  the  Commission 
Recommendation  in  response  to  this  Commitment  in  the  Community's  Official 

Journal,  the  Commission's  annual  reports  will  satisfy  the  criterion  of  public 
information  and  transparency  as  set  out  in  the  Commission's  guidelines  for 
environmental agreements (COM(96) 561). 

5. 

General provisions: 

The  Agreement  will  also  fulfil  the  other  guidelines  in  the  Communication  on 
Environmental  Agreements (COM(96) 561) where applicable. 

1. 

In  the  way  of  additional  guarantees  for  ACEA's  commitments  under  the 
Agreement, the  Commission  should  make  it clear  in  its  Recommendation  that  it 
will  consider  regulatory  measures  should  ACEA  not  honour  its  commitments. 
The  Agreement  does  not  affect  the  Commission's  right  of  initiative  under  the 
Treaty. 

2.  ACEA's  Commitment  clearly  declares  the  parties  to  the  Agreement  on  the 
industry's  side.  The Commitment will be made by the President of ACEA  acting 
on  behalf  of  ACEA  according  to  ACEA's  statutes.  Those  members  of  ACEA 
which  manufacture  passenger  cars  support  the  Commitment and  have  agreed  to 
make  every  endeavour 
the  achievement  of  ACEA's 
commitments. 

to  contribute 

to 

3. 

In  principle,  the  Agreement  ends  once  its  C02  emission  objective  has  been 
achieved  in  2008.  However,  the  Commission  warmly  welcomes  ACEA's 
commitment to review the potential  for additional  C02  reductions  in 2003 with a 
view to moving  further  towards  120 g/km  C02  by 2012.  This could be the basis 
for an extension of the Agreement. 

4.  The terms of the Agreement, and in particular its C02 objective, may be subject to 
review,  especially  if  any  of  the  assumptions  underlying  ACEA's  commitments 
are not borne  out.  Procedures will be  laid down  for  such an event in the above-
mentioned  exchange  of  letters. 
its 
prerogatives  under  the  Treaty.  Both  parties  to  the  Agreement  will  act  in  good 
faith  in the implementation and any review of the Agreement. 

In  turn,  the  Commission  maintains 

5.  As  a  general  rule,  the  Commission's  attitude  towards  co-operation  as  regards 
environmental  protection  is  positive.  However,  the  ACEA  Commitment has  to 
comply  with  Community  competition  rules.  As  far  as  the  Commitment  would 
contain  or  build  upon  certain  restrictions  of  competition,  a  formal  notification 
would be required  under Article  85 of the EC Treaty before  the Commission  can 
take a position on the Agreement.  At this stage, the Commission has no reason to 
believe  that  the  Agreement  would  not  be  in  compliance  with  Community 
competition  rules.  The  Commission  Services  will  work  closely  together  with 
ACEA in order to clarify  this issue as quickly as possible. 

III.  Non-ACEA  manufacturers 

The  Agreement  with  the  European  Automobile  Manufacturers  Association  (ACEA) 
represents  the  critical  first  step  in  implementing  this  element  of  the  Community's 
strategy  on  C02  emissions  from  passenger  cars.  According  to  the  strategy,  similar 
agreements should  be  concluded  with  non-ACEA  manufacturers  and  importers.  The 
Commission  welcomes the fact  that ACEA has not made its Commitment conditional 
on these  other  agreements.  At the  same time  it  recognises  that  ACEA's  assumption 
regarding  distortions  of competition  will best  be met by concluding  agreements  with 
the  major  (groups  of)  non-ACEA  manufacturers  present  on  the  EU  market,  and  in 
particular the Japanese and Korean automobile manufacturers  and Chrysler (the status 
of the latter remaining under review in the light of recent developments). 

The Commission  has in the meantime begurç negotiations with the Japan  Automobile 
Manufacturers  Association (JAMA) and is confident  that an agreement with them can 
be  concluded  soon.  The  Commission  has  also  invited  the  Korean  Automobile 
Manufacturers Association (KAMA) and Chrysler to begin negotiations. 

IV. 

Further steps in the follow-up to the  Agreement 

The  Agreement  foresees  that  innovative  vehicle  concepts  as  well  as  cars  using 
alternative  fuels  or  radically  new  propulsion  systems  are  included  in  ACEA's  C02 
objective.  This  requires  that  their  C02  emissions  be  measured  and/or  calculated 
according to a standardised procedure.  Directive 93/116/EC will therefore  have to be 
amended by the Commission  accordingly.  At the same time, the driving cycle in this 
directive should be aligned with the driving cycle according to Directive 91/441/EEC 
as  modified  by  the  outcome  of  the  Auto-Oil  conciliation  procedure  between  the 
Council and the European Parliament on 29.6.1998. 

V. 

Conclusions 

In  the  Commission's  opinion,  the  Agreement  with  the  European  Automobile 
Manufacturers  Association  (ACEA)  on the table corresponds  to the guidelines  in  the 
the 
Communication  on  Environmental  Agreements  (COM(95)  561)  and 
benchmarks  for  an  agreement  with  the  industry  according  to  the  Community's 
strategy  to  reduce  C02  emissions  from  passenger  cars  (COM(95)  689;  Council 
conclusions  of  25.6.1996).  The  Agreement  makes  "the  major  contribution"  to  the 
overall  objective  of the  strategy,  as called  for  by the  Council,  and  is based  on  sound 
terms  which  justify  the  expectation  that  it  will  be  fully  implemented.  The 
Commission  has  entered  into  negotiations  on  similar  agreements  with  non-ACEA 
manufacturers  and  expects  to  conclude  these  negotiations  in  good  time.  The 
the 
Agreement  will  make  a  significant  contribution 
Community's  greenhouse gas emission objectives under the Kyoto Protocol. 

the  achievement  of 

to 

to 

Against  this  background,  and  provided  that  the  notification  under  Community 
competition  law  does  not  give  rise  to  problems,  the  Commission  believes  that  this 
Agreement  with  ACEA  is  satisfactory  and  intends  to  adopt  a  Recommendation  to 
ACEA as its part of the Agreement  Before doing so, however, the Commission would 

like to  give the  European  Parliament  and the Council  an opportunity  to  express  their 
views on the ACEA Commitment and the assessment in this Communication, and will 
therefore defer the adoption of the Recommendation until the end of October. 

'  ANNEX: 

ACEA Commitment on CO2 Emission Reductions from  New Passenger Cars 
in the Framework of an Environmental Agreement 
between the European Commission and ACEA 

10 

Mrs. 
F itt Bjerregaard 
h lember of the Commission 
F u rope an Commission 
200 Rue de la Loi 
1049 Brussels 

July. 27*  1988 

ACEA C02  Commitment 

-^ 

I  am pleased to forward to you officially the  Commitment of ACEA  and 
assure you the support by ACEA s member companies. ACEA wants to 
forward  and  honour  Its  Commitment  in the  spirit,  that  this  leads  to  a 
mutual satisfactory environmental agreement. 

Yours sincerely, 

Bernd Pteehetsrieder 

End. 

AC  E  A 

ACEA  COMMITMENT 

ON C02  EMISSION  REDUCTIONS 

FROM NEW PASSENGER CARS 

IN THE FRAMEWORK OF AN 

ENVIRONMENTAL  AGREEMENT 

BETWEEN THE EUROPEAN COMMISSION AND ACEA 

II 

1. 

INTRODUCTION  AND PRINCIPLES 

(1)  This  Commitment  is  based  on  an  undertaking  by  ACEA  itself  and  has  the 
support  of  all  its  car  manufacturing  companies:  BMW,  Fiat,  Ford  of  Europe, 
GM  Europe.,  Daimler-Benz,  Porsche,  PSA  Peugeot  Citroën,  Renault,  Rolls-
Royce,  Volkswagen  and  Volvo,  who  have  agreed  to  make  every  endeavour  to 
contribute to the achievement of ACEA's goals. 

This  Commitment  demonstrates  ACEA's  support  for  significant  reductions  in 
C02  emissions in line with the European  Union's undertakings  under the United 
Nations  Framework  Convention  on  Climate  Change  following  the  Kyoto 
Conference.  At the  same time  it aims  at preserving  the diversity  of the  product 
offerings  of  the  European  car  manufacturers  and  at  maintaining 
their 
competitiveness, as well as their financial  performance  and employment. 

(2)  As long as its commitments (see below) are being honoured, ACEA  is assuming 
that  this  Commitment  provides  complete  and  sufficient  substitute  for  all  new 
regulatory  measures  to  limit  fuel  consumption  or  C02  emissions,  and  for  any 
additional  fiscal  measures in pursuit of the C02  objectives  of this  Commitment. 
Any  fiscal  measures,  including  their  added  value  to  this  Commitment,  will  be 
taken into account in the monitoring procedure and their potential  effects  will be 
assessed in good  faith. 

(3)  The  European  automotive  industry's  C02  reduction  commitments  are  very 
ambitious  in  the  light  of  present  and  future  technologies,  and  the  industry  is 
willing  and  prepared  to  commit  substantial  development  efforts  to  implement 
the following  commitments. 

(4)  Together  with  the  European  Commission,  ACEA  will  ensure 

the 
Commitment  is  implemented  in  a  manner  which  complies  with  applicable 
competition rules. 

that 

ACEA  COMMITMENTS 

(1)  Some members  of ACEA will  introduce  in the  EU market,  not  later than  2000, 
models  emitting  120  g  C02/km  or  less,  measured  according  to  Directive 
93/116/EC (see Technical Annex, Point  1  Measuring Procedure). 

(2)  ACEA  commits  to  achieve  a  target  of  140  g  C02/km  by  2008,  measured 
according  to  Directive  93/116/EC,  on  the  average  of  the  EU  new  car  sales 
represented  by ACEA classified  as Ml. 

This  target  will  mainly  be  achieved  by  technological  developments  affecting 
different  car characteristics and market changes linked to these developments. In 
particular,  ACEA  will  aim  at a high  share  - to the  point  of  90 % - of  new  cars 
sold  being  equipped  with  C02  efficient  direct  injection  gasoline  and  diesel 
technologies. 

1$ 

Compliance with this target translates for the European automobile industry  into 
an average C02 reduction of 25% for newly registered cars, compared to  1995. 

(3) 

In  2003,  ACEA  will  review  the  potential  for  additional  C()2  reduction,  with  a 
view to moving further  towards the Community's objective  of  120g C02/km  by 
2012. 

(4)  For  2003,  ACEA  considers  an estimated  target  range  of  165-170 g of  C02/km 

to be appropriate. 

This translates  into a reduction  of 9-11 % compared  to the reference  year  1995. 
(See Technical Annex, point 3: Review in 2003 /Estimated  Target Range). 

(5)  To  assess  compliance  with  these  commitments,  there  will  be  a joint  ACEA  / 
Commission  monitoring  of  all  the  relevant  factors  with  regard  to  these 
commitments. 

ACEA's commitments are based on the  following: 

A)  Availability of enabling  fuels 

Given the outstanding  importance of improved  fuels  for  Ç02  reductions  ACEA 
assumes  the  full  market  availability  of  fuels  with  a  sufficient  quality  to  enable 
the  application  of  technologies  needed  for  the  industry  to  achieve  its  C02 
commitments  during  the  life-time  of  this  Commitment  (s.  Technical  Annex, 
Point 2 Fuel  Specifications). 

B)  Distortion  of competition 

In order to ensure a level-playing  field: 

- 

-  non-ACEA  member car manufacturers  will be committed  to equivalent  C02 
reduction  efforts  for  their  sales  in  the  EU,  in  line  with  the  Council 
Conclusions of 25.6.1996; 
the  Community  will  use  its  best  efforts  to  continue  to  seek  that  other  car 
manufacturing  countries,  notably  Japan,  USA  and  Korea,  will  undertake 
equivalent  car  C02  reduction  efforts,  in  line  with  the  Kyoto  Protocol  spirit 
ensuring  that  the  European  automobile  industry  is  not  put  at  a  competitive 
disadvantage in world markets by C02 reduction commitments in Europe. 

C) 

Promotion of car CQ2-efficient  technologies 

European  car manufacturers  have  high expectations  for  certain  technologies,  in 
particular  those  associated  with  direct  injected  gasoline  and  diesel  engines, 
which  are two  of the most  promising  routes to achieve  the central  commitment 
of  140 g C02/km  in 2008. This commitment  is based  on the  assumption  of an 
unhampered  diffusion  of  car  C02  efficient  technologies  into  the  market  via 
competition  amongst  ACEA  members  and  other  market  participants  which  is 
expected  to  result  in market  mix  changes. Therefore  it  is  fundamental  that  any 
measures  which  might  hamper  the  diffusion  process  of  either  of  the  C02 
technologies  will  be  taken  into  consideration  in  the  monitoring 

•*  efficient 

procedure. 

bi 
/  / 

D)  Acceptance of innovations 

The  acceptance  by  the  Commission  of  innovative  concepts  for  vehicles 
replacing conventional  cars in short haul traffic  and of cars not producing  fossil 
C02  as well  as a share  of cars  using alternative  fuels  or propulsion  systems  as 
contributing factors to comply with the Commitment. 

MONITORING 

The joint ACEA / Commission  monitoring procedure should  cover: 

(1)  The  development  of  C02  emissions  based  on  the  collective  achievement  of 
reductions  on the  average  EU  fleet  of  new car  sales represented  by  ACEA  and 
according to the above commitments. 

(2)  The  development  of  the  C02  emissions  of  non-ACEA  car  manufacturers  for 

their sales in the EU. 

(3)  Any  developments  regarding  the  underlying  factors  upon  which  ACEA's 

Commitment is based. 

(4)  The impact on C02 emissions of new regulatory measures. 

(5)  The development of new breakthrough  technologies  (e.g. natural  gas, hydrogen, 
fuel  cells,  electric  drive),  which  might  be  available  for  production  in  the  next 
decades,  and  the  impact  of  the  Community's  5lh  R&D  framework  programme, 
which is expected to foster research in this area. 

(6)  The  development  and  the  promotion  of  other  measures  deemed  to  reduce  fuel 
consumption,  i.e.  telematics  and  optimisation  of  the  infrastructure  reducing 
congestion;  driver  education  for  fuel  efficient  behaviour;  driver  information  on 
fuel  efficiency. 

(7)  The impacts on the financial  performance,  competitiveness and the  employment 
within the European automotive industry associated with this Commitment. 

The  Commission's  official  reports  on  the  monitoring  results  will  not  refer  to 
individual  companies'  achievements, to avoid  competition  being  distorted.  ACEA  is 
willing to provide the necessary data to achieve the objectives of the monitoring. 

*  *  * 

On the basis of the outcome  of the monitoring, or if the  impacts of  this  Commitment 
on  the  European  automotive  industry,  particularly  its  employment  situation  and  its 
global  competitive  environment,  are  detrimental,  ACEA  and  the  Commission  will 
review the situation and make any necessary adjustments  in good  faith. 

K 

TECHNICAL ANNEX TO THE ACEA COMMITMENT ON  C02 
EMISSION REDUCTIONS FROM NEW PASSENGER  CARS 

(1)  Measuring Procedure 

ACEA's  proposals  have  been  established  according  to  Directive  93/116/EC,  which 
has been  fully  implemented  as from  1.1.1997,  and  will  be  applicable  for  the  coming 
years.  The  implementation  of  this  new  measuring  procedure  has  led  to  an  artificial 
average increase o„f 9% of the C02  emission figures, compared to the previously  used 
directive, whereas the C02 emissions from  cars in the real world have not changed. 

(2)  Fuels  Specifications 

Characteristics of the fuels are key factors  in car C02 emission reductions: 

A) 

B) 

C) 

to achieve  further  emission  reduction  together  with  lowered  C02  emissions  the 
fuel  efficient  lean  burn  technology  will  be  combined  with  special  exhaust  gas 
after-treatment  devices capable to reduce NOx under lean burn conditions.  But 
those  systems  are  only  working  with  fuels  meeting  specific  requirements,  in 
particular a low sulphur content; 

low  sulphur  fuels  ease  the  NOx/C02  trade-off  in  favour  of  C02  emission 
reductions; 

low  aromatics  in  gasoline  and  a  highcetane  number  in  diesel  lead  to  C02 
emission reduction too. 

ACEA  acknowledges  the outcome of the conciliation  procedure  between the  Council 
and  the  European  Parliament  on  29.6.1998  and  upholds  its  140  g  C02/km 
commitment  by 2008.  However, ACEA is expecting that  fuels  of the following  better 
quality  might  be  available  in  the  market  due  to  technical  reasons,  commercial 
competition as well as possible national policies: 

A)  Some  gasoline  (e.g.  Super-Plus,  98  octane  as  agreed  in  Germany)  and  some 
diesel plus with a maximum sulphur content of 30 ppm are provided in 2000 on 
the whole EU market in a sufficient  volume and geographical cover. 

B) 

In  2005  full  availability  of  fuels  on  the  whole  EU  market  which  satisfy  the 
following: 
• 

gasoline  with  a  maximum  sulphur  content  of  30  ppm  and  of  a  maximum 
aromatic content of 30%; 

• 

diesel with  a maximum  sulphur content of  30 ppm and a cetane number  of 
minimum 58. 

Any problems which might arise with respect to fuel  quality  will  be considered  in the 
monitoring procedure. 

(0 

3. 

Review in 2003 / Estimated Target Range 

ACEA  is  willing  to  contribute  to  a  periodic  monitoring  of  its  commitments, jointly 
undertaken  by ACEA and the Commission,  which  it sees as the main  tool  to  examine 
the  evolution  during  the  period  of  the  Commitment.  This  should  include  a  joint 
"Major  Review"  in 2003,  covering  both  ACEA  and  non-ACEA  developments.  This 
would  incorporate  the  results  of  C02  emission  reductions  up  to  and  including 
calendar year 2003, including comparison of that year's fleet average to the estimated 
target range. 

The  reduction  in  C02  emissions  will  not  be  linear;  the  pace  will  notably  depend  on 
the  timing  of  availability  of the  enabling  fuels  on the  market  as well  as on the  lead-
times  for  new technologies  and  products  and  their  market  penetration.  The  reduction 
profile  is therefore  expected to be relatively slow initially and to gather pace later. 

Given  all  the  uncertainties  and  the  lead-time  necessary  for  introducing  new 
technologies and models, ACEA considers an appropriate estimated target for 2003 to 
be within the range of  165-170 g C02/km.  This is a reduction of 9-11 % compared  to 
the  1995 reference  year. 

ACEA provides this estimated target range for 2003 on the following basis; 

A) 
B) 

C) 

it does not constitute a commitment of any sort by ACEA; 
the  provisions  set  out  under  "Monitoring"  are  fully  implemented  and  any 
necessary  adjustment  to the 2008 commitment  or the 2003 estimate are made in 
good  faith; 
in particular,  fuels  of  sufficient  quality  are available  - such  that  fuels  issues  do 
not  constrain  the application  of  technologies  needed  to, improve  fuel  efficiency 
(see point 2 above: Fuels  specifications). 

IT 

ISSN 0254-1475 

COM(98) 495  final 

DOCUMENTS 

EN 

06  07  10  14 

Catalogue  number  :  CB-CO-98-506-EN-C 

ISBN 92-78-38760-6 

Office  for Official  Publications of the European  Communities 

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