Communication from the Commission to the European Parliament and Council - A competitive automotive regulatory framework for the 21st Century - Commission's position on the CARS 21 High Level Group Final Report - A contribution to the EU's Growth and Jobs Strategy {SEC(2007) 77} {SEC(2007) 78}
Date: 2007-02-07
Institutions: European Commission
Subjects: EU industrial policy, competitiveness, international competition, motor vehicle industry, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 7.2.2007 
COM(2007) 22 final 

COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND COUNCIL 

A Competitive Automotive Regulatory Framework for the 21st Century 

Commission's position on the CARS 21 High Level Group Final Report 

A contribution to the EU's Growth and Jobs Strategy 

{SEC(2007) 77} 
{SEC(2007) 78} 

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COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND COUNCIL 

A Competitive Automotive Regulatory Framework for the 21st Century 

Commission's position on the CARS 21 High Level Group Final Report 

A contribution to the EU's Growth and Jobs Strategy 

(Text with EEA relevance) 

TABLE OF CONTENTS 

1. 

2. 

3. 

EXECUTIVE SUMMARY .................................................................................................. 3 

INTRODUCTION.............................................................................................................. 5 

AN INDUSTRY IN TRANSITION? ………………………………………………………..6 

IMPROVING THE INDUSTRY'S REGULATORY FRAMEWORK: FOLLOW UP TO CARS 21..... 7 

3.1. Internal market: the type-approval of vehicles...................................................... 7 

3.2. Regulatory simplification and internationalisation ............................................... 8 

3.3. Environmentally sustainable road transport: the integrated approach .................. 9 

3.4. Increasing safety on European Roads: a joint effort ........................................... 12 

3.5. Trade and overseas markets: striving for fair global competition....................... 14 

3.6. Research and Development: the key to future competitivenss ........................... 15 

3.7. Taxation and fiscal incentives, intellectual property and competition................ 17 

4. 

NEXT STEPS................................................................................................................. 17 

Annex 1: List of directives to be proposed for self- and virtual testing 

Annex 2: List of directives to be proposed for replacement by UN/ECE regulations 

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EXECUTIVE SUMMARY 

This Communication outlines the direction of future automotive policy. In the spirit of better 
regulation  it  aims  to  promote  coherent  interaction  between  different  policy  areas,  provide 
predictability  and  seek  the  protection  of  public  interest  (e.g.  environment  and  safety)  while 
attempting to reduce the regulatory burden on industry.  

It presents the Commission’s position on the CARS 21 High Level Group which brought 
together  the  main  stakeholders  (Member  States,  industry,  NGOs  and  MEPs)  in  2005  to 
examine  the  main  policy  areas  impacting  the  European  automotive  industry  and  to  make 
recommendations for future public policy and regulatory framework. 

At the outset of the CARS 21 Group, industry raised concerns about the high cumulative cost 
of  legislation.  The  review  conducted  in  CARS  21  concluded  that  the  current  type-approval 
system was effective, should be maintained and that most of the legislation was necessary and 
useful in the interest of protecting health, safety, consumers and the environment. The CARS 
21 Group did, however, identify 38 EC directives which can be replaced with international 
UNECE (United Nations Economic Commission for Europe) regulations. It also identified 25 
directives and UNECE regulations, for which self- or virtual testing can be introduced. 
The  Commission  supports  these  recommendations,  but  will  ensure  that  in  referring  to 
UN/ECE regulations, the Community will keep its ability to legislate independently from the 
UN/ECE system, where appropriate.  

In the area of the environment, the Communication endorses the further limiting of pollutant 
emissions in line with the Thematic Strategy on Air Pollution. Furthermore, it describes the 
key elements of the future Commission strategy to reduce CO2 emissions from cars set out in 
the  Communication  on  results  of  the  review  of  the  current  Community  strategy.  The  future 
strategy is based on an integrated approach to achieving the EU objective of 120 g/km CO2 
by  2012  through  a  combination  of  EU  and  Member  States  action.  The  Commission  will 
propose  legislation,  focusing  on  mandatory  reductions  of  the  emissions  of  CO2  to  reach  the 
objective  of  130  g/km  for  the  average  new  car  fleet  by  means  of  improvements  in  vehicle 
motor  technology,  and  a  further  reduction  of  10  g/km  of  CO2,  or  equivalent  if  technically 
necessary, by other technological improvements and by an increased use of bio-fuels. It will 
encourage  additional  efforts  by  the  Member  States  and  the  consumer.  The  strategy  is  to  be 
seen  in  the  context  of  the  recently  adopted  Commission  Communication  on  Energy  for 
Europe1. 

The Communication identifies a series of measures to be considered in the area of road safety. 
A  number  of  vehicle-related  actions  are  proposed  with  the  inclusion  of  the  Electronic 
Stability Control in new vehicles being the most significant. The Communication stresses the 
need to adopt a holistic approach to road safety involving vehicle features, infrastructure and 
road users. 

The  Communication  aligns  the  main  concerns  of  the  automotive  sector  to  trade  policy.  It 
proposes  to  assess  the  potential  of  using  bi-lateral  trade  agreements  (particularly  in  the 
Asian region) to improve market access and reinforces the need enforce intellectual property 
rights globally. 

1 

COM(2007) 1. 

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In the area of research and development, the Communication identifies clean renewable fuels 
and  intelligent  vehicles  and  roads  as  core  research  priorities.  It  adopts  a  forward-looking 
approach and outlines the Commission’s intention to set up a Joint Technology Initiative on 
hydrogen  and  fuel  cells  as  well  as  to  put  forward  a  regulation  on  vehicles  which  use 
hydrogen as a fuel. 

This  Communication  reflects  extensive  stakeholder  consultation  and  dialogue  on 
automotive  issues  and  the  Commission  hopes  that  it  will  contribute  to  the  policy-making 
culture and methodology in the future. 

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1. 

INTRODUCTION 

Mobility  provided  by  road  transport  is  a  prerequisite  for  the  way  Europeans  live  today. 
Vehicles underpin our lifestyle by facilitating social interaction and the reliable distribution of 
goods across the continent. 

The  automotive  industry’s  complex  value  chain  plays  a  substantial  role  in  the  European 
economy  and  its  importance  is  largely  derived  from  linkages  within  domestic  and 
international economic structures. 

The  vehicle  industry  operates  world-wide  and  is  one  of  the  drivers  of  globalisation, 
characterised by the rapid opening of global markets and the ensuing increase and diversity in 
the  movement  of  capital.  The  ongoing  technological  revolution  is  transforming  the 
automotive  industry  from  a  traditional  manufacturing-based  sector  into  an  increasingly 
knowledge-based  one.  Domestically,  the  vehicle  industry  is  taking  important  and  often 
difficult  steps  to  optimise  its  cost-base  and  production  processes  raising  fears  related  to 
restructuring and relocation.  

These  factors  combined  with  the  need  to  protect  the  natural  environment,  safeguard 
human health and lives and operate in a high oil price environment have created a situation 
where industry faces new challenges, responsibilities and opportunities which could alter both 
the industry and its products. 

The  policy  interactions  with  industry  should  seek  to  improve  the  framework  conditions  for 
vehicle  production  and  carefully  analyse  the  cost  and  competitiveness  impacts  of  future 
regulatory activity. The Commission believes that public policy should be predictable while 
correctly  reflecting  the  increasingly  complex  demands  of  society  and  anticipating  trends  in 
world  markets.  In  line  with  the  Better  Regulation  initiative  the  Commission  initiated  a 
comprehensive automotive-related regulatory and policy review by setting up the CARS 21 
High  Level  Group,  which  brought  together  all  the  main  stakeholders  to  advise  the 
Commission on future policy options2. 

This Communication provides the Commission's assessment and public policy response to 
the  report  presented  by  the  CARS  21  Group3.  As  such,  it  outlines  to  the  European 
Parliament  and  Council  the  direction  in  which  the  Commission  intends  to  steer  future 
automotive policy. 

The proposals and initiatives contained in this Communication aim to: 

•  further improve the functioning of the internal market 

•  further  simplify  automotive  legislation  and  pursue  the  internationalisation  of  the 

automotive regulatory environment 

•  further promote environmentally sustainable road transport 

2 

3 

For more details: 
http://ec.europa.eu/enterprise/automotive/pagesbackground/competitiveness/cars21.htm 
The CARS 21 final report can be found on:  
http://ec.europa.eu/enterprise/automotive/pagesbackground/competitiveness/cars21finalreport.pdf 

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•  further enhance safety on European roads 

•  contribute to a fair global operating environment for the European automotive industry  

•  encourage increased research and development into areas of strategic interest 

2. 

AN INDUSTRY IN TRANSITION? 

Recent efforts by automotive companies to seek productivity improvements and reduce costs 
have  attracted  public  attention  and  raised  concerns  about  the  future  of  automotive 
manufacturing  in  European  economies  with  high  production  costs  and  little  or  no  demand 
increase for vehicles. There are fears that automotive production could be transferred to third 
countries as industry searches for a lower cost base and for markets likely to experience fast 
future growth. Existing overcapacities in the EU and the increased role of flexible production 
and automation in improving production efficiency coupled with investments into additional 
capacity in some Member States lead to risks of reduction in automotive-related employment. 

Some  of  the  current  restructuring  is  a  reaction  to  structural  problems  which  have  existed  in 
parts  of  the  industry  for  some  time.  Despite  variations  between  individual  producers,  most 
manufacturers’  challenges  relate  to  managing  productivity  levels,  costs  and  labour  market 
regulations.  High  fixed  costs,  structural  overcapacity  and  recent  record  prices  in  global 
commodity markets combined with aggressive price competition among manufacturers, have 
led  many  companies  to  focus  on  their  long  term  competitiveness  by  concentrating  on 
improving  productivity  and  optimise  cost  structures.  This,  in  turn,  can  lead  to  the 
reorganisation  of  production  processes  and  a  tendency  towards  workforce  reduction.  The 
overall impact can be further aggravated by knock-on effects on the automotive supply chain 
given the integral part of suppliers in vehicle construction. 

In the medium term it appears probable that vehicle assembly for the European market will 
largely be conducted in Europe. Although this industry is becoming increasingly global, the 
characteristics  of  demand  remain  relatively  distinctive  in  different  markets  and  most 
automotive companies keep a significant proportion of their production in situ. The high level 
of  sunk  costs  into  existing  production  facilities,  the  rise  of  flexible  production  and  the  skill 
level of European workers seem to reinforce this conclusion. However, the challenges posed 
by more aggressive international competition are likely to grow in the longer term. In terms of 
production  location,  fast-growing,  low-cost  areas  close  to  but  outside  the  EU,  are  attracting 
significant attention from European vehicle manufacturers. 

In  line  with  the  Commission's  strategy  for  growth  and  jobs4  this  Communication  strives  to 
create  favourable  framework  conditions  for  an  innovative  and  thriving  automotive  industry 
and thus minimise the need for restructuring. Where a company nonetheless takes decisions 
on  its  organisation  and  working  arrangements,  the  Commission  cannot  interfere  with  such 
commercial decisions. However, any resulting transition should be carried out in accordance 
with  Community  Directives  on  information  and  consultation  of  workers,  collective 
redundancies  and  European  Works  Councils5.  Furthermore,  in  the  longer  term  perspective, 

4 

5 

See Commission Communication COM(2005) 474: Implementing the Community Lisbon Programme: 
A policy framework to strengthen EU manufacturing - towards amore integrated approach for industrial 
policy. 
E.g. Directive 2002/14/EC, Directive 98/59/EC and Directive 94/45/EC. 

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regional policy can play a role in minimising transition costs by fostering necessary structural 
changes. Instruments such as the European Social Fund, the European Regional Development 
Fund and the newly-established Globalisation Adjustment Fund can play a role in mitigating 
the  short-term  social  costs  of  transition,  for  example  by  providing  workers  with  training  in 
order  to  find  new  jobs.  These  funds  also  play  a  significant  role  in  creating  better  structural 
conditions for economic activity, which in turn provides new job opportunities. Moreover, the 
Commission  should  strive  for  favourable  framework  conditions  that  allow  companies  to 
anticipate  at  an  early  stage  competitive  challenges  and  to  respond  to  them  in  a  socially 
responsible  way.  In  this  regard,  the  Commission  will  convene  a  restructuring  forum  on  the 
automotive industry in order to address challenges and better anticipate and adapt to change6. 

The  automotive  industry  in  Europe  is  currently  characterised  by  strong  price  competition, 
high  raw  material  and  energy  prices,  a  strong  emphasis  on  cost  management  and  a 
restructuring of production processes. From a policy perspective, the pressure on employment 
and focus on cost control imply that the Commission will carefully analyse the employment 
and competitiveness impacts of future regulatory activity. 

3. 

IMPROVING THE INDUSTRY'S REGULATORY FRAMEWORK 

3.1. 

Internal market: the type-approval of vehicles 

The internal market policy for motor vehicles currently regulates three categories of vehicles 
(passenger cars, motorcycles and tractors) on a mandatory basis. It is based on the EC Whole 
Vehicle  Type-Approval  system7  which  has  proven  highly  effective.  The  Commission 
believes  that  it  should  be  maintained  and  its  benefits  extended  to  cover  more  automotive 
products (e.g. light commercial vehicles, buses and trucks). 

The Commission believes that the internal market should function more efficiently once 
the  vehicle  has  reached  the  market.  In  particular,  problems  with  roadworthiness  and 
registration procedures are still a source of concern for citizens and enterprises. 

The Commission8: 

– 

– 

6 
7 
8 

9 

has  adopted  a  proposal  for  a  new  Framework  Directive  for  the  approval  of  motor 
vehicles9  to  extend  the  EC  Whole  Vehicle  Type-Approval  procedure  to  all  vehicle 
categories on a mandatory basis and urges the European Parliament and Council to 
adopt this proposal as soon as possible 

has  included,  in  the  new  Framework  Directive  proposal  a  provision  for  an 
authorisation  scheme  for  parts  and  equipment  which  are  critical  for  safety  and 
environmental performance 

See the Commission's Communication on Restructuring and Employment - COM(2005) 120. 
Council Directive 70/156/EEC (OJ L 42, 23.2.1970, p. 1). 
It  should be noted  that  actions which have  already been proposed or  implemented  are  presented with 
indents, whereas the actions which the Commission intends to propose in the future are consecutively 
numbered throughout the Communication. 
COM(2003) 418. 

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Furthermore, 

the Commission: 

1. 

will, in 2007, update the Commission’s interpretative communication on procedures 
for  the  type-approval  and  registration  of  vehicles  previously  registered  in  another 
Member State10 

3.2. 

Simplification and the internationalisation of the regulatory environment 

One  of  the  reasons  for  setting  up  CARS  21  was  the  concern  expressed  by  industry  that  the 
cumulative  cost  of  regulation  had  a  negative  effect  on  competitiveness  and  made  vehicles 
unnecessarily expensive. A dedicated sub-group was set up as part of CARS 21 to scrutinise 
the  regulatory  framework11  and  to  identify  possibilities  for  withdrawing  or  simplifying  the 
legislation in force. 

After examination, the CARS 21 Group concluded that most of the legislation in force should 
be  maintained  as  it  is  needed  for  the  protection  of  health,  safety,  consumers  and  the 
environment.  Nonetheless,  in  the  light  of  the  fact  that  the  Community  has  acceded  to  more 
than 100 international vehicle-related regulations adopted under the auspices of the UN/ECE 
which  are  applicable  as  alternatives  to  corresponding  Community  legislation,  the  CARS  21 
Group recommended that 38 directives could be replaced by UN/ECE Regulations without 
any loss in the level of safety and environmental protection. In addition, the CARS 21 Group 
also  identified  one  directive  which  could  be  repealed12  and  25  directives  and  UN/ECE 
Regulations  in  which  self-testing  and  virtual  testing  could  be  introduced  so  as  to  reduce 
regulatory compliance costs for industry by making administrative procedures less costly and 
time-consuming. 

The  Commission  supports  these  recommendations,  but  is  conscious  of  the  need  to  maintain 
the possibility for the EU to legislate independently from the UN/ECE system where this is 
required to meet EU objectives in terms of health, environment or other policy objectives and 
will  seek  to  implement  future  movement  towards  UN/ECE  regulations  in  a  manner 
compatible with this need. 

The Commission: 

2. 

3. 

10 
11 
12 
13 
14 

will propose replacing 38 EC directives13 with corresponding UN/ECE regulations as 
soon  as  the  Framework  Directive  on  type-approval  has  been  adopted  (expected  in 
2007) 

will,  in  2008-2009,  propose  the  introduction  of  necessary  technical  provisions  for 
using self testing and virtual testing in 25 EC directives and UN/ECE regulations14 

OJ C 143, 15.5.1996, p. 4. 
Details of this review can be found in Annex II of the CARS 21 Final Report. 
Council Directive 72/306/EEC (OJ L 190, 20.8.1972, p. 1). 
The relevant directives have been listed in Annex 2. 
The relevant directives and UN/ECE regulations have been listed in Annex 1. 

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4. 

5. 

will issue an annual paper to the European Parliament on the progress being made at 
the UN/ECE and the comitology process 

will,  in  2008-2009,  consider  simplifying  Directives  71/127/EEC15,  74/297/EEC16, 
76/115/EEC17 and 78/932/EEC18 as well as UN/ECE Regulation No 12219 

3.3. 

Environmentally sustainable road transport: the integrated approach 

Cars are responsible for 12% of Europe’s greenhouse gas emissions and a significant part of 
pollutant  emissions.  Consequently  the  two  main  environmental  policy  areas  linked  to  the 
vehicle industry are the Thematic Strategy on Air Pollution20 and the Community Strategy to 
reduce  CO2  emissions21.  EU  policies  on  waste  and  noise  also  interact  with  the  automotive 
sector. Increased energy (cost and supply) and environmental concerns are likely to play an 
important role in the debate on the shape and functioning of future vehicles. 

3.3.1.  Pollutant emissions 

Since  the  adoption  of  the  first  Euro  emission  limit  standards  reductions  of  approximately 
70-90% for NOx and particulate matter emissions have been achieved as measured under 
type-approval  conditions.  The  Commission  intends  to  continue  the  tightening  of  Euro 
emission limits for light- and heavy duty vehicles in line with the Thematic Strategy on Air 
Pollution  and  will  seek  to  work  towards  a  better  reflection  of  real-life  emissions  during  the 
emissions' testing process.  

The Commission: 

– 

– 

– 

15 
16 
17 
18 
19 

20 
21 

22 
23 

has  adopted  a  proposal  for  Euro  522  emission  limits  to  reduce  pollutant  emissions 
from passenger cars and light-duty vehicles. The adoption of the proposal will lead to 
a further 80% reduction in particulate emissions from diesel vehicles and a 20% and 
25% reduction of NOx emissions from diesel and petrol vehicles respectively 

has contributed, together with the European Parliament and Council, to further NOx 
emissions reduction (Euro 6) from passenger cars and light-duty vehicles 

has  adopted  a  proposal  for  a  Directive  on  the  promotion  of  clean  road  transport 
vehicles by public procurement23 which aims at improving air quality (particularly in 
cities) and should support the market introduction of clean vehicle 

Council Directive 71/127/EEC (OJ L 68, 22.3.1971, p. 1). 
Council Directive 74/297/EEC (OJ L 165, 20.6.1974, p. 16). 
Council Directive 76/115/EEC (OJ L 24, 30.1.1976, p. 6). 
Council Directive 78/932/EEC (OJ L 325, 20.11.1978, p. 1). 
Regulation  No  122  of  the  UN/ECE:  Uniform  technical  prescriptions  concerning  the  approval  of 
vehicles of categories M, N and O with regard to their heating systems, 23 February 2006. 
COM(2005) 446. 
COM(95) 689: A Community Strategy to reduce CO2 emissions from passenger cars and improve fuel 
economy. For additional information also see: 
http://europa.eu.int/comm/environment/co2/co2_home.htm 
COM(2005) 683. 
COM(2005) 634. 

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– 

has  adopted  the  proposal  for  Community  Strategic  Guidelines  for  Cohesion  2007-
2013,  which  promote  investment  in  sustainable  transport  networks  and  common 
public transport services providing distribution networks for alternative vehicle fuels 

The Commission: 

6. 

7. 

8. 

will, in 2007, come forward with a proposal for Euro VI emission limits to achieve 
further significant pollutant emissions reduction from heavy duty vehicles 

is  working  towards  the  adoption  of  global  technical  regulations  on  heavy  duty 
vehicles’ emission test cycles (both steady and transient cycles), off-cycle emissions 
and  on-board  diagnostic  systems  so  that  real-life  emissions  conditions  are  better 
reflected 

is examining options to ensure that the emissions testing process for passenger cars 
also takes better account of real-life emissions 

3.3.2.  Reducing CO2 emissions from the road transport sector 

The Commission will pursue its integrated approach with a view to reaching the EU objective 
of 120 g/km CO2 by 2012. This can be achieved through a combination of EU and Member 
States action. The Commission will propose a legislative framework, if possible in 2007 and 
at latest by mid 2008, to achieve the EU objective of 120 g/km CO2, focusing on mandatory 
reductions of the emissions of CO2 to reach the objective of 130 g/km for the average new 
car fleet by means of improvements in vehicle motor technology, and a further reduction 
of  10  g/km  of  CO2,  or  equivalent  if  technically  necessary,  by  other  technological 
improvements and by an increased use of bio-fuels, specifically: 

a) 

b) 

c) 

d) 

e) 

f) 

setting minimum efficiency requirements for air-conditioning systems; 

the compulsory fitting of accurate tyre pressure monitoring systems; 

setting maximum tyre rolling resistance limits in the EU for tyres fitted on passenger 
cars and light commercial vehicles; 

the use of gear shift indicators, taking into account the extent to which such devices 
are used by consumers in real driving conditions; 

fuel  efficiency  progress  in  light-commercial  vehicles  (vans)  with  the  objective  of 
reaching 175 g/km CO2 by 2012 and 160 g/km CO2 by 2015; 

increased use of bio fuels maximizing environmental performance. 

The  above  will  be  measurable,  monitorable,  accountable  and  non  double-counting  the 
reductions of CO2. 

The  Commission  agrees  that  the  legislative  framework  implementing  the  average  new  car 
fleet target will be designed so as to ensure competitively neutral and socially equitable and 
sustainable reduction targets which are equitable to the diversity of the European automobile 
manufacturers  and  avoid  any  unjustified  distortion  of  competition  between  automobile 
manufacturers. 

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The  legislative  framework  will  be  compatible  with  the  overall  objective  of  reaching  the 
EU's  Kyoto  targets  and  will  be  based  on  a  thorough  impact  assessment.  Such  an  impact 
assessment shall address the benefits and costs of different options as compared to the actual 
situation  of  average  CO2  emissions,  taking  into  account  latest  available  technology  for 
environmental improvements in car technology. 

Beyond the legislative framework, the Commission strategy to reduce CO2 should encourage 
additional  efforts  by  other  means  of  road  transport  (heavy  duty  vehicles,  etc.),  by  the 
Member States (CO2 related taxation and other fiscal incentives, use of public procurement, 
traffic management, infrastructure, etc.) and by the consumers (informed choice as a buyer, 
responsible driving behaviour). 

The Commission: 

9. 

10. 

11. 

12. 

13. 

14. 

15. 

presents its future strategy to reduce CO2 emissions from cars through an integrated 
approach as described above in parallel to this Communication in its Communication 
to  the  European  Parliament  and  Council  on  the  results  of  the  review  of  the 
Community strategy to reduce CO2 emissions from cars24 

will explore the possibility of including the road transport sector in the EU Emission 
Trading Scheme for the third allocation period starting in 2013 

will, following the recent adoption of the Biofuels Progress Report25, as part of the 
Communication on Energy for Europe which proposed a minimum binding target of 
10% biofuels by 2020, bring forward a proposal to revise Directive 2003/30/EC26 on 
the use of biofuels or other renewable transport fuels in 2007 

will assess the options available to develop a policy framework to encourage the use 
of biofuels offering greater greenhouse gas savings and will continue its support for 
R&D efforts into 2nd generation biofuels 

will,  in  2007,  put  forward  a  proposal  for  a  Regulation  on  motor  vehicles  using 
hydrogen as a fuel to ensure the safe use of this technology 

will,  in  the  framework  of  the  i2010  Intelligent  Car  Initiative27,  pursue  the  research 
and  development  of  Information  and  Communications  Technologies’  (ICT)  based 
technologies  and  applications,  which  will  contribute  to  cleaner  and  more  energy 
efficient mobility, including tools for environmentally friendly driving 

will  put  intelligent  transport  systems,  including  Galileo,  at  the  heart  of  its 
forthcoming  action  plan  on  logistics  and  the  green  paper  on  urban  transport  with  a 
view to optimising transport operations and achieving safe and sustainable mobility 
for Europe 

24 
25 
26 
27 

COM(2007) 19. 
COM(2006) 845. 
Directive 2003/30/EC (OJ L 123, 17.5.2003, p. 42). 
COM(2006) 59. 

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16. 

encourages the European Investment Bank to support the Community policy on CO2 
reductions  by  contributing  to  the  financing  of  economically  viable  projects  in  the 
fields of fuel efficiency and renewable fuels 

3.3.3.  Other environmental policies 

In addition to the above, EU policies concerning the recycling of vehicles, noise and mobile 
air conditioners bear a relevance to the automotive industry. 

The Commission: 

– 

has  proposed  a  phase-out  of  certain  fluorinated  greenhouse  gases  from  mobile  air 
conditioning systems (MACs)28
 which has been adopted by the European Parliament 
and Council 

Looking to the future: 

The Commission: 

17. 

18. 

will,  during  the  next  revision  of  the  End-of-Life  Vehicles  Directive29  address  the 
issue of non-harmonised implementation of this directive across the Member States 
(2009) 

will, in 2007-2009, seek to pursue a holistic approach to tackle noise issues, which 
would involve all relevant stakeholders and systems (e.g. traffic management, driver 
behaviour, vehicle and tyre technology, road surfaces) 

3.4. 

Increasing safety on European roads: a joint effort 

Noteworthy  progress  has  been  made  in  improving  European  road  safety:  during  the  last  30 
years traffic on European roads has tripled while the number of casualties has halved during 
the same period. The ever greater mobility enjoyed by Europeans still comes at a high price: 
latest estimates show that about 41,600 people were killed on European roads in 200530. The 
Commission’s  stated  aim  is  to  achieve  a  50%  reduction  in  deaths31  on  European  roads  by 
2010. 

The Commission believes an effective road safety strategy should be based on the interaction 
between improvements in vehicle technology, road infrastructure, driver behaviour and 
enforcement. 

The Commission: 

– 

28 
29 
30 
31 

32 

has  adopted  Recommendation  2004/345/EC32  on  best  practice  regarding  the 
monitoring of the application of rules on drink-driving, speeding and seat-belt use 

Directive 2006/40/EC (OJ L 161, 14.6.2006, p. 12). 
Directive 2000/53/EC (OJ L 269, 21.10.2000, p. 34). 
Mid term review of the European Road Safety Action Programme - COM(2006) 74. 
COM(2001) 370: The mid-term review of the European Commission’s 2001 Transport White paper was 
completed in 2006 - COM(2006) 314. 
Commission Recommendation of 6 April 2004 (OJ L 111, 17.4.2004, p. 75). 

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– 

– 

– 

– 

– 

– 

has acceded to UN/ECE Regulation No 10433 and amended UN/ECE Regulation No 
4834 to improve the conspicuity of heavy-duty vehicles 

has  adopted  a  Communication  on  “Bringing  eCall  to  Citizens”35
  with  the  aim  of 
accelerating  the  deployment  of  eCall  systems,  which  have  been  identified  as  a 
priority under the eSafety Initiative 

has adopted a Communication on the Intelligent Car Initiative36 which aims to foster 
the  deployment  of  advanced  safety  technologies  in  order  to  contribute  to  the 
reduction of road casualties in the EU 

has adopted a proposal for a Directive on Road Infrastructure Safety Management37 

has adopted a proposal for a Directive on the retrofitting of mirrors to heavy goods 
vehicles registered in the Community with the aim of avoiding blind spots in the rear 
field of vision38 

has adopted a proposal for Community Strategic Guidelines for Cohesion 2007-2013 
which, among the recommended guidelines for action, include investment in proper 
traffic management, with particular attention to safety 

Taking  into  account  the  recommendations  of  the  CARS  21  Group,  the  Commission  has 
adopted a forward-looking approach to road safety and assessed the possible future initiatives 
in this field. Consequently,  

Between 2007  and 2009,  the  Commission will assess  the opportunity to come forward with 
proposals to: 

19. 

20. 

21. 

22. 

23. 

33 

34 
35 
36 
37 
38 
39 

make  the  inclusion  of  Isofix  child  restraint  systems  obligatory  for  all  new  M1 
vehicles 

make  the  use  of  daytime  running  lights  obligatory  (a  public  consultation  was 
launched on this subject on 1 August 2006) 

make the inclusion of the Electronic Stability Control mandatory starting with heavy-
duty vehicles and followed by passenger cars and light-duty vehicles as soon as a test 
method has been developed 

make seat-belt reminders mandatory for all new vehicles 

amend  phase  II  requirements  of  the  Pedestrian  Protection  Directive  in  order  to 
improve the provisions of Directive 2003/102/EC39 

Regulation  No  104  of  the  UN/ECE:  Uniform  provisions  concerning  the  approval  of  retro-reflective 
markings for heavy and long vehicles and their trailers, 22 January 1998. 
Regulation No 48 of the UN/ECE: Installation of lighting and light signalling devices. 
COM(2005) 431. 
COM(2006) 59. 
COM(2006) 569. 
COM(2006) 570. 
Directive 2003/102/EC (OJ L 321, 6.12.2003, p. 15). 

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24. 

improve  the  cross-border  enforcement  of  fines  imposed  for  the  infringement  of 
traffic rules of another EU Member State (a public consultation was launched on this 
subject on 6 November 2006) 

The Commission will also: 

25. 

26. 

27. 

28. 

29. 

investigate  the  costs,  benefits  and  feasibility  of  introducing  Emergency  Braking 
Systems  in  vehicles  (particularly  heavy-duty  vehicles).  The  Commission  is 
conducting a study into such systems and has set up a stakeholder working group to 
assist with the work 

continue  efforts  to  promote  the  development,  deployment  and  use  of  active  in-
vehicle  safety  systems  and  vehicle-infrastructure  co-operative  systems  in  the 
framework of the i2010 Intelligent Car Initiative 

will adopt in 2006, the 3rd eSafety Communication, which brings to the attention of 
the European Parliament and Council further measures aiming at full deployment of 
eCall starting from 2010 

will  encourage  and  support  the  conditioning  of  Community  financing  in  the  road 
sector to projects which follow best practice in road safety 

calls  on  the  Member  States  to  further  improve  the  enforcement  of  bans  on  drunk 
driving, enforcement of speed limits, enforcement of motor-cycle helmet use and to 
promote and enforce seat-belt use 

3.5. 

Trade and overseas markets: striving for fair global competition40 

Most  of  the  global  demand  increase  for  the  industry’s  products  over  the  next  decade  will 
come from rapidly developing economies (e.g. China, India, Russia etc.) and the international 
dimension is crucial to the competitiveness of the European automotive industry. 

The Commission believes that multilateral negotiations provide an opportunity to improve 
market access for European industry while there is also a need to pursue bilateral or regional 
approaches (through Free Trade Agreements or similar arrangements) in trade relations with 
third countries, as appropriate. 

In a global industry conditions relating to foreign direct investment and the establishing of 
local  production  in  third  countries  are  as  important  as  the  more  traditional  export-import 
flows. European policy should seek to ensure that European companies’ operations overseas 
are not subjected to unfair discrimination. 

The  Commission  is  committed  to  enhancing  and  widening  regulatory  governance  on  the 
international  level,  in  particular  through  the  UN/ECE  framework  (as  discussed  in  section 
3.2.)41,  to  reduce  non-tariff  barriers  to  trade  and  to  further  the  development  of  a  level 

40 

41 

The  Commission’s  approach  to  trade  policy  has  been  outlined  in  a  recent  Communication  “Global 
Europe: Competing in the World” - COM(2006) 567. 
As  outlined  in  section  3.2.  the  Commission  will  seek  to  move  to  international  harmonisation  in  a 
manner,  which  would  enable  the  EU  to  legislate  independently  in  areas  related  to  safety  and  the 
environment should this be necessary in the future. 

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regulatory  playing  field  worldwide.  The  automotive  industry  has  also  expressed  serious 
concerns  about  the  enforcement  of  intellectual  property  rules  (IPR)  in  some  areas  of  the 
world. 

The  Commission  has  concerns  regarding  market  access  to  China  and  operating  conditions 
there. These are significant not only due to China’s market potential but also because similar 
concerns may arise in other large emerging markets. 

The Commission: 

– 

– 

has, adopted a policy of encouraging increased international technical harmonisation 
of  motor  vehicle  regulations  in  the  framework  of  both  the  1958  and  the  1998 
Agreements of the UN/ECE 

has  formally  requested  the  establishment  of  a  WTO  Dispute  Settlement  Panel  to 
resolve  outstanding  issues  related  to  the  treatment  of  imported  vehicle  parts  by 
China. The United States and Canada have brought similar complaints 

With regard to future policy direction: 

The Commission: 

30. 

31. 

32. 

33. 

34. 

will, on a case by case basis, assess the potential of negotiating bilateral Free Trade 
Agreements  with  third  countries  (particularly  in  South  East  Asia)  and  open  such 
negotiations, if and when, appropriate 

will  continue  monitoring  Chinese  business  and  regulatory  developments  to  ensure 
that improved market access resulting from China’s WTO accession is implemented 
in practice 

will  pursue  a  formal  dialogue  with  China  on  issues  related  to  China’s  regulatory 
environment  to  ensure  that  there  is  a  level  playing  field  and  legal  certainty  for  the 
business community in this market. In this respect, the Commission will continue to 
follow the development of the draft Chinese Anti-Monopoly Law 

will  continue  building  closer  automotive  ties  with  Russia  in  the  framework  of  the 
EU-Russia Common Economic Space 

will  continue  its  policy  of  ensuring  that  IPR  are  promoted  and  enforced  globally 
through  existing  international  agreements  and  will  include  comprehensive  IP 
provisions in future bi-lateral agreements 

3.6. 

Research and Development: the key to future competitiveness  

With approximately € 20 billion (ca. 5% of the sector’s turnover) invested into research and 
product  development  the  automotive  industry  is  the  largest  industrial  R&D  investor  in 
Europe in absolute terms. 

Technology  Platforms  play  an  important  role  in  identifying  research  needs  relevant  to 
industry. The “Vision of road transport in 2020”, the Strategic Research Agenda developed 

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by  the  European  Road  Transport  Research  Advisory  Council  (ERTRAC)  and  those 
developed  under  other  relevant  technology  platforms42  have  been  central  to  defining  the 
direction of future R&D efforts for the whole automotive value chain at the EU, national and 
regional levels. 

The Commission: 

– 

– 

has,  in  the  7th  Research  Framework  Programme  (FP7),  proposed  the  creation  of  a 
dedicated  priority  theme  for  “Transport  (including  aeronautics)”,  the  proposed 
budget of which (€ 4 180 million in current prices) represents a significant increase 
in the allocation of Community funds for innovation in the automotive sector 

has,  in  FP7,  under  the  Information  and  Communications  Technologies  theme, 
proposed  continuing  research  in  the  area  ICT  for  mobility,  environmental 
sustainability and energy efficiency, building on the research conducted under 5th and 
6th Framework Programmes 

The  Commission  believes  that  it  is  necessary  to  focus  European  research  in  FP7  on  both 
incremental  research  (e.g.  technologies  for  clean  and  energy  efficient  thermal  engines, 
integrated safety systems) and on breakthrough technologies (e.g. hydrogen and fuel cells, 
development  of  rechargeable  hybrids,  2nd  generation  biofuels).  Furthermore,  the 
Commission  considers  that  the  creation  of  lead  markets  in  areas  relevant  to  this  sector  is 
important (e.g. hydrogen and fuel cells, biofuels etc. could be potential candidates). 

From a wider perspective new, safer, more efficient and less polluting automotive technology 
forms part of the Intelligent Transportation Systems (ITS) concept. The automotive industry is 
actively involved in several Technology Platforms43, which contribute directly or indirectly to 
competitiveness  of  the  automotive  industry  and  to  the  development  of  better  transportation 
systems. 

The Commission: 

35. 

36. 

37. 

will continue to develop R&D co-operation between the EU and industry (primarily 
through FP7) 

will  aim  to  reinforce  coherent  research  collaboration  between  the  EU,  the  Member 
States  and  the  automotive  industry  within  a  system’s  approach  and  use  different 
types  of  instruments  for  R&D  support  in  the  automotive  sector  including 
collaborative projects and networks of excellence 

will focus research programmes on making the road transport system more efficient 
while  enhancing  environmental  compatibility  and  safety.  Particular  focus  will  be 
placed  on  clean  renewable  fuels  as  well  as  intelligent  vehicles  and  roads  (e.g.  the 
“intelligent car” project in the framework of the i2010 initiative) 

38. 

will aim to use public-private partnerships as a new instrument of industrial research, 
technological  development  and  demonstration.  It  is  preparing,  jointly  with  the 

42 

43 

Examples  include  the  hydrogen  and  fuel  cell  platform,  the  advanced  engineering  materials  and 
technologies platform, the smart systems integration platform, etc. 
For example, NESSI, the platform for software and ARTEMIS, the platform for embedded IT systems. 

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automotive  industry  (and  other  stakeholders),  the  setting  up  of  a  Joint  Technology 
Initiative in the area of hydrogen and fuel cells 

39. 

encourages European financing institutions, such as the European Investment Bank, 
to continue supporting research in the automotive sector and to focus its activities on 
projects that lead to improved energy efficiency, emissions reduction and enhanced 
safety, notably through the new Risk Sharing Finance Facility 

3.7. 

Taxation and fiscal incentives and competition in the aftermarket 

3.7.1.  Taxation and fiscal incentives 

Discussions  in  the  CARS  21  Group  indicated  that  the  diverse  vehicle-related  taxation 
regimes  in  the  Member  States  are  considered  to  be  among  the  main  barriers  to  an 
effectively  functioning  internal  market  while  the  use  of  fiscal  incentives  should  be  co-
ordinated  across  the  Member  States  and  should  demonstrably  contribute  to  the  EU’s  policy 
objectives  in  areas  such  as  the  environment  and  safety.  In  this  context,  further  to  the 
Commission’s  proposal,  an  article  that  regulates  the  conditions  for  the  granting  of  financial 
incentives  was  agreed  by  the  European  Parliament  and  the  Council  in  the  Euro  5  and  6 
Regulation44. 

The Commission: 

– 

has  proposed  a  directive  on  passenger  car  related  taxes45,  which  is  now  before  the 
European  Council  and  Parliament.  The  Commission  urges  the  Parliament  and 
Council to adopt the proposed directive as soon as possible 

3.7.2.  Competition in the aftermarket 

With regard to the distribution of vehicles, the Commission will continue its efforts to ensure 
that  Regulation  (EC)  No  1400/2002  on  motor  vehicle  distribution46  is  applied  throughout 
the  Community  while  in  the  light  of  the  increasing  complexity  of  vehicles  it  has  become 
imperative  that  all  vehicle  repairers  in  the  Community  have  access  to  the  appropriate 
technical  repair  information.  Action  on  the  latter  follows  a  clear  mandate  from  the 
European Parliament as laid down in Article 4 of Directive 98/69/EC47. 

The Commission: 

– 

44 
45 
46 

47 
48 

has introduced a  provision in the Euro 5 proposal48 whereby vehicle manufacturers 
are  obliged  to  provide  unrestricted,  standardised  access  to  vehicle  repair  and 
maintenance  information  to  independent  repairers  through  web-sites  in  a  format 
developed by a technical committee of stakeholders (OASIS format) 

COM(2005) 683. 
COM(2005) 261. 
Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the 
Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector. 
Directive 98/69/EC (OJ L 350, 28.12.1998, p. 1). 
COM(2005) 683. 

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4. 

NEXT STEPS 

The Commission is committed to implementing its better regulation policy and believes that 
there exists a unique opportunity to develop a distinct policy-making culture with regard to 
industrial policy. The Commission believes that principles such as the quality of legislation, 
simplification,  impact  assessments,  stakeholder  consultations,  lead  times  and  choice  of 
instruments should be at the heart of developing legislative proposals. 

The  most  difficult  challenge  inherent  to  such  a  policy  process  lies  in  the  relationship 
between  predictability  on  the  one  hand  and  quality  and  flexibility  on  the  other. 
Indicating the long-term direction of future regulations will inevitably raise questions relating 
to the quality and availability of data used to make assumptions about the medium and longer 
term future. A mechanism for regular revision and review should therefore be put in place. 

To  ensure  that  the  European  Parliament  and  Council  are  regularly  informed  about  the 
UN/ECE process the Commission plans to issue an annual paper to the European Parliament 
providing an update on the work being conducted at the UN/ECE and the comitology process. 

The Commission: 

40. 

will together with all relevant stakeholders, conduct a mid-term review of the actions 
proposed in this Communication in the course of 2009 to monitor progress made and, 
if appropriate, adapt the automotive regulatory policy framework on the basis of the 
results of this review 

41. 

will  regularly  inform  the  co-legislators  on  the  status  of  changes  in  automotive 
regulations by issuing an annual working paper on progress made at the UN/ECE 

ANNEXES 

1. List of directives to be proposed for self- and virtual testing 

2. List of directives to be proposed for replacement by UN/ECE regulations 

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Annex 1: List of directives to be proposed for self- and virtual testing 

To be proposed for self-testing: 

EC Directives: 
70/222/EEC (rear registration plate) 
77/389/EEC (towing hooks) 
78/316/EEC (identification of controls) 
78/317/EEC (defrost/demist) 
78/318/EEC (wash/wipe) 
78/549/EEC (wheel guards) 
92/21/EEC (masses & dimensions, cars) 

97/27/EC (masses and dimensions) 
92/114/EEC (external projections of cabs) 

UN/ECE Regulations: 

28 (audible warning) 
48 (installation of lighting) 
121 (identification of controls) 
122 (heating systems) 
43 (part on installation of safety glass) 
55 (couplings; only for geometric requirements) 

To be proposed for virtual testing: 

EC Directives: 

77/389/EEC (towing hooks) 
77/649/EEC (forward vision) 
78/318/EEC (wash/wipe, for geometric requirements) 
78/549/EEC (wheel guards) 
92/114/EC (external projections of cabs;) 

UN/ECE Regulations: 

46 (for the field of rear vision) 
21 (for the geometric requirements of interior fittings) 
26 (exterior projections) 
48 (installation of lighting) 
55 (couplings; only with regard to geometric requirements 

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Annex 2: List of directives to be proposed for replacement by UN/ECE regulations 

70/157/EEC (sound levels) 
70/221/EEC (fuel tanks) 
70/311/EEC (steering effort) 
70/387/EEC (door latches & hinges) 
70/388/EEC (audible warning) 
71/127/EEC (rear visibility) 
71/320/EEC (braking) 
72/245/EEC (radio suppression) 
74/60/EEC (interior fittings) 
74/61/EEC (anti-theft and immobiliser) 
74/297/EEC (protective steering) 
74/408/EEC (seat strength) 
74/483/EEC (exterior projections) 
75/443/EEC (speedometer/reverse gear) 
76/756/EEC (installation of lighting) 
76/757/EEC (retro-reflectors) 
76/758/EEC (lamps) 
76/759/EEC (direction indicators) 
76/760/EEC (rear registration plate lamps) 
76/761/EEC (headlamps) 
76/762/EEC (front fog lamps) 
77/538/EEC (rear fog lamps) 
77/539/EEC (reversing lamps) 
77/540/EEC (parking lamps) 
77/541/EEC (seat belts) 
78/316/EEC (identification of controls) 
2001/56/EC (heating systems) 
80/1269/EEC (engine power) 
89/297/EEC (lateral protection) 
92/22/EEC (safety glass) 
92/23/EEC (tyres) 
94/20/EC (couplings) 
95/28/EC (flammability) 
2001/85/EC (buses and coaches) 
96/79/EC (frontal impact) 
96/27/EC (side impact) 
98/91/EC (transport of dangerous goods) 
2000/40/EC (front underrun protection) 

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