Commission staff working document - Impact Assessment - Accompanying document to the Proposal for a Regulation of the European Parliament and of the Council Setting emission performance standards for new light commercial vehicles as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles {COM(2009) 593 final} {SEC(2009) 1455}
Date: 2009-09-30
Institutions: European Commission
Subjects: EU environmental policy, air quality, commercial vehicle, environmental standard, greenhouse gas, impact study, reduction of gas emissions, technical regulations

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.10.2009 
SEC(2009) 1454 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying document to the 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

Setting emission performance standards for new light commercial vehicles as part of the 
Community's integrated approach to reduce CO2 emissions from light-duty vehicles 

{COM(2009) 593 final} 
{SEC(2009) 1455} 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

Procedural issues and consultation of interested parties .............................................. 5 

Background in the development of the proposal.......................................................... 5 

Consultation and expertise ........................................................................................... 6 

Results of the consultation of the Impact Assessment Board ...................................... 7 

Context and Problem definition ................................................................................... 8 

The context of the initiative ......................................................................................... 8 

Legal basis.................................................................................................................... 9 

Problem definition........................................................................................................ 9 

2.4.  What are the underlying drivers of the problem?....................................................... 10 

2.4.1.  Vehicle stock of LCVs is increasing .......................................................................... 10 

2.4.2.  LCV driving pattern and mileages ............................................................................. 12 

2.4.3.  Potential regulatory gap linked to type approval and registration procedures ........... 12 

2.5. 

2.6. 

2.7. 

2.8. 

3. 

3.1. 

3.2. 

Stakeholders affected ................................................................................................. 14 

Current economic situation ........................................................................................ 15 

Baseline scenario........................................................................................................ 17 

Does the Union have the right to act? ........................................................................ 19 

Objective .................................................................................................................... 19 

Policy objectives ........................................................................................................ 19 

Consistency with horizontal objectives of the European Union ................................ 20 

3.2.1.  Lisbon Strategy .......................................................................................................... 20 

3.2.2.  Sustainable Development Strategy............................................................................. 20 

3.2.3.  EU commitments to reduce GHG emissions.............................................................. 21 

4. 

4.1. 

4.2. 

Policy options............................................................................................................. 21 

Introduction ................................................................................................................ 21 

Design parameters ...................................................................................................... 22 

4.2.1.  Scope of the legislation .............................................................................................. 22 

4.2.2.  Effort sharing between manufacturers ....................................................................... 23 

4.2.3.  Target level................................................................................................................. 24 

4.2.4.  Target year.................................................................................................................. 24 

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4.2.5.  Utility curve slope ...................................................................................................... 24 

4.2.6.  Choice of average utility value in the definition of the limit value curve.................. 25 

4.2.7.  Flexibility mechanisms .............................................................................................. 26 

4.2.8.  Compliance mechanism ............................................................................................. 27 

4.2.9.  Long-term target......................................................................................................... 27 

4.2.10.  Multi-stage vehicles ................................................................................................... 28 

4.3. 

Policy options considered in the further assessment.................................................. 29 

5. 

5.1. 

5.2. 

Analysis of impacts .................................................................................................... 30 

Description of the methodology................................................................................. 30 

Economic impacts ...................................................................................................... 30 

5.2.1.  Distributional effect on manufacturers....................................................................... 30 

5.2.1.1.  Distributional impacts of mass-based limit function (2012 to 2015)......................... 31 

5.2.1.2.  Distributional impacts of pan area-based limit function (2012 to 2015) ................... 31 

5.2.1.3.  Summary of distributional analysis............................................................................ 32 

5.2.1.4.  Impact on small and medium enterprises (SMEs) ..................................................... 33 

5.2.2. 

Innovation and competitiveness ................................................................................. 33 

5.2.3.  Sensitivity analysis..................................................................................................... 35 

5.2.4. 

Impact on society and cost effectiveness ................................................................... 36 

5.2.4.1.  Impact on vehicle buyers and users............................................................................ 36 

5.2.5. 

Impact on energy consumption .................................................................................. 37 

5.2.6. 

Impacts of the long-term target .................................................................................. 37 

5.2.7. 

Impacts of pooling...................................................................................................... 38 

5.2.8.  Compatibility with the revised strategy on LDVs...................................................... 39 

5.3. 

Social impacts ............................................................................................................ 40 

5.3.1.  Employment aspect .................................................................................................... 40 

5.4. 

Environmental Impacts .............................................................................................. 41 

5.4.1.  Overall impacts in terms of emissions ....................................................................... 41 

5.4.2. 

Impact of the compliance mechanism ........................................................................ 42 

5.5. 

5.6. 

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Additional costs to businesses and Member States.................................................... 42 

Comparison of options ............................................................................................... 43 

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5.6.1.  Long-term target......................................................................................................... 45 

6. 

6.1. 

6.2. 

7. 

Monitoring and evaluation ......................................................................................... 45 

Core indicators of progress towards meeting the objectives...................................... 45 

Monitoring arrangements ........................................................................................... 46 

Reference Documents ................................................................................................ 46 

ANNEX I: GLOSSARY........................................................................................................... 48 

ANNEX II: SUMMARY OF STAKEHOLDER CONSULTATION 02 SEPTEMBER 
2008 .......................................................................................................................................... 49 

ANNEX III: SUMMARY OF SECOND STAKEHOLDER CONSULTATION 09 
MARCH 2009........................................................................................................................... 53 

ANNEX IV: DISTRIBUTIONAL EFFECTS ON MANUFACTURERS............................... 59 

ANNEX V DESCRIPTION OF THE METHODOLOGY ...................................................... 69 

ANNEX VI: ECONOMIC IMPACTS ..................................................................................... 72 

ANNEX VII: SOCIAL EQUITY AND DISTRIBUTIONAL EFFECTS WITHIN THE 
FLEET ...................................................................................................................................... 79 

ANNEX VIII: ENVIRONMENTAL IMPACTS ..................................................................... 80 

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1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Background in the development of the proposal  

The  proposal  for  the  regulation  on  reduction  of  CO2  emissions  from  light  commercial 
vehicles (LCVs) is a continuation of the Commission's regulatory process to address the 
climate  change  impacts  of  road  vehicles.  This  policy  initiative  started  with  the 
publication in February 2007 of two Communications: a Communication on the revised 
CO2 and cars strategy1 and a Communication on a Competitive Automotive Regulatory 
Framework for the 21st Century CARS 212 (referred to as "the earlier Communications" 
in this document). On the basis of these Communications, the Commission proposed an 
integrated  approach  to  achieve  the  EU  objective  of  120 gCO2/km  from  new  passenger 
cars  by  2012.  Under  this  approach,  legislative  proposals  would  focus  on  mandatory 
reductions  of  CO2  emissions  to  reach  an  average  objective  of  130 gCO2/km  for  new 
passenger  cars  by  means  of  improvements  in  vehicle  motor  technology.  A  further 
reduction  equivalent  to  10  gCO2/km  would  be  achieved  by  other  technological 
improvements and increased use of bio-fuels. These include3: 

– 

– 

– 

– 

– 

setting minimum efficiency requirements for air-conditioning systems; 

the compulsory fitting of accurate tyre pressure monitoring systems; 

setting maximum tyre rolling resistance limits; 

use of gear shift indicators;  

fuel efficiency progress in light commercial vehicles (vans and minibuses) with 
the objective of reaching 175 g CO2/km in 2012 and 160 gCO2/km by 2015. 

In  2007  the  Commission  adopted  a  proposal  for  a  Regulation4  setting  emission 
performance  standards  for  new  passenger  cars  with  the  aim  of  limiting  CO2  emissions 
from new passenger cars to an average of 130 gCO2/km. The proposal was accompanied 
by  an  extensive  impact  assessment5  (referred  to  as  the  'impact  assessment  on  CO2  and 
cars'  in  this  document)  that  included  a  detailed  analysis  of  the  economic,  social  and 
environmental impact of the regulation. The Council adopted the legislative text agreed 
in co-decision in April 20096, further referred to as regulation on CO2 and cars. 

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2 
3 

4 

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6 

COM(2007) 19, 07.02.2007 
COM(2007) 22, 07.02.2007 
Several of these measures are estimated to have a negative cost so their absence in the market has 
to be considered as a market failure, possibly linked to the level of return that they provide. 
COM(2007) 856  final. Proposal for  a  regulation of  the European  Parliament  and of  the  Council 
setting  emission  performance  standards  for  new  passenger  cars  as  part  of  the  Community's 
integrated approach to reduce CO2 emissions from light-duty vehicles 
Accompanying document to the Proposal from the Commission to the European Parliament and 
Council for a regulation to reduce CO2 emissions from passenger cars (SEC(2007)1723). 
Regulation of the European Parliament and of the Council setting emission performance standards 
for new passenger cars as part of the Community's integrated approach to reduce CO2 emissions 
from light-duty vehicles (EC) no 443/2009 

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Light commercial vehicles were not included in the regulation on CO2 and cars due to the 
necessity to gather more data on LCVs. The current legislative proposal on the reduction 
of CO2 emissions from light commercial vehicles therefore supplements the regulation on 
CO2 and cars and supports achievement of the overall EU objective to cut CO2 emissions 
from  the  new  light  duty  vehicle  fleet,  by  putting  in  place  measures  to  reduce  CO2 
emissions  from  light  commercial  vehicles.  Light  commercial  vehicles  make  up  around 
12% of the light duty vehicle fleet. 

For the purposes of better regulation and administrative simplicity, the proposal on CO2 
and  light  commercial  vehicles  should,  where  possible,  be  aligned  with  the  legislation 
setting emission performance standards for cars. Therefore similar policy options will be 
reviewed to regulate CO2 emissions from the light commercial vehicles fleet.  

Correspondingly,  this  impact  assessment  is  similar  to  the  impact  assessment  developed 
for  passenger  cars.  The  policy  options  applicable  for  passenger  cars  and  the  resulting 
impacts were discussed in depth in the impact assessment on CO2 and cars. In order to 
avoid repetition, this impact assessment will include cross-references to that assessment.  

1.2. 

Consultation and expertise 

For  the  preparation  of  this  legislation  an  inter-service  group  was  set  up  and  a  meeting 
was  organised  on  23  July  2008  and  18  March  2009  in  order  to  collect  the  views  of 
various  services.  The  services  involved  in  this  group  included:  DG  Environment,  the 
Secretariat  General,  DG  Enterprise  and  Industry,  DG  Transport  and  Energy,  DG 
Economic  and Financial  Affairs and Joint Research  Centre. The timing of the proposal 
development and the key aspects of the proposed legislation were discussed in this inter-
service consultation. 

Stakeholder  consultation  process  included  a  public  internet  consultation  and  two 
stakeholders meetings. 

•  Between May and July 2007, an internet public consultation was carried out, aimed at 
gathering  the  views  of  all  stakeholders  and  members  of  the  public  on  the 
implementation  of  the  revised  CO2  and  cars  strategy.  This  included  measures  to 
reduce  emissions  from  light  commercial  vehicles.  The  majority  of  consultation 
at: 
responses 
http://ec.europa.eu/reducing_co2_emissions_from_cars/index_en.htm. 
The results of the consultation were presented in Annex III of the Impact assessment 
on CO2 and cars therefore it will not be repeated here. 

available 

are 

•  To complement the internet consultation, two stakeholder meetings were organised by 
the  Commission  on  02  September  2008  and  09  March  2009.  This  provided  the 
stakeholders  directly  concerned  by  the  upcoming  legislation  (automotive  industry, 
suppliers, environmental NGOs, social partners and Member States) the opportunity to 
present their positions. The summaries of both meetings are attached in Annex I and 
Annex II. 

In  addition  an  external  study  investigating  possible  regulatory  approaches  to  reducing 
CO2  from  light-duty  vehicles  was  carried  out  and  a  study  consisting  of  two  reports: 

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'Assessment  of  options  for  the  legislation  on  CO2  emissions  from  light  commercial 
vehicles'7and 'Assessment with respect to long term CO2 emission targets for passenger 
cars  and  vans'8,  has  been  developed.  This  study  was  part  of  a  project  'Impacts  of 
regulatory options to reduce CO2 emissions from cars, in particular on car manufacturers' 
under 
the  framework  contract  ENV.C.5/FRA/2006/0071  (Service  request  ENV 
C5/GK/ak/D(2007)17850). Analysis of alternative policy options is based on findings of 
the two reports, further referred to as 'the supporting study on light commercial vehicles 
(LCVs)'.  

Input  from  stakeholders  has  been  taken  into  account  in  assessing  the  different  possible 
options  to  regulate  CO2  emissions  from  light  commercial  vehicles,  particularly  with 
regard  to  the  design  of  the  legislation,  possible  unwanted  effects,  and  implications  for 
competition on automotive markets, global industrial competitiveness and environmental 
outcome. External  expertise was  used  to assess the various options available, including 
aspects raised during the consultation process (the external contractor attended the public 
hearings). 

1.3. 

Results of the consultation of the Impact Assessment Board  

A draft version of the impact assessment report was submitted to the Impact Assessment 
Board  on  25  March  2009  which  issued  its  opinion  on  the  document  on  28  April  2009. 
The  final  opinion  stated  that  the  impact  assessment  should  assess  potential  effects  of 
pooling the CO2 reduction targets for cars (Ml) and light commercial vehicles (LCVs) in 
more  depth,  including  impacts  on  the  current  market  structure  and  on  administrative 
burden. The Board also requested that the implications of the changes introduced by the 
Legislator  to  the  regulation  on  cars,  which  were  not  assessed  in  the  corresponding  IA, 
should be discussed more explicitly. Finally, further analysis of the potential impact on 
the external competitiveness of EU car manufacturers was demanded.  

These comments have been taken into account in the final impact assessment as follows: 

Impacts  of  pooling  between  cars  and  LCVs  on  the  level  of  excess  emissions 
premium as well as on manufacturers producing cars and vans, or only vehicles 
of one category, were clarified in section 5.2.7. 

The link of this proposal to the overall Strategy, including other measures of the 
integrated approach (incl. CO2 from cars proposal), has been clarified in section 
5.2.8.  

More  attention  has  been  given  to  the  analysis  of  potential  impacts  of  the 
legislation  on  the  competitiveness  of  the  EU  industry  in  the  third  countries 
(section 5.2.2).  

- 

– 

– 

7 

This report is available on Europa website under the following link: 
http://ec.europa.eu/environment/air/transport/co2/co2_studies.htm 
This report is available on Europa website under the following link: 

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http://ec.europa.eu/environment/air/transport/co2/co2_studies.htm 

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– 

In addition, the aspects related to the type approval and monitoring of passenger 
cars  and  LCVs,  and  the  impact  of  the  scheme  on  administrative  burden,  have 
been described in more detail in sections 2.4.3 and 5.5. 

2. 

CONTEXT AND PROBLEM DEFINITION  

2.1. 

The context of the initiative 

The  overall  rationale  for  the  revised  CO2  and  cars  strategy,  based  on  an  integrated 
approach, and implemented through a legislative framework, has been analysed in detail 
in the earlier Communications and the impact assessment on CO2 and cars. Key aspects 
are summarised here: 

•  All  sectors  must  contribute  to  the  fight  against  climate  change:  The  EU  has  made  a 
commitment to achieve at least a 20% reduction of GHG emissions by 2020 compared 
to 1990 levels, increasing to 30% as part of a comprehensive international agreement. 
To avoid distortions, and for the sake of economic and social fairness, all sectors must 
contribute  to  the  reduction  effort,  including  transport.  While  there  is  no  binding  EU 
target  for  transport  sector,  transport  covers  major  part  of  the  emissions  under  the 
Effort Sharing Decision9 which requires a 10% reduction from 1990 levels by 2020; 

•  The  CO2  performance  of  new  vehicles  should  improve  at  a  faster  rate:  While  the 
EU27 as whole has reduced its emissions of greenhouse gases (GHG10) by 5.2% over 
the  1990-2006  period,  the  GHG  emissions  from  transport  have  increased  by  35.8% 
and in particular from road transport, GHG emissions have increased by 29.3%11. This 
trend  is  partly  linked  to  the  limited  progress  in  real  world  improvements  in  fuel 
efficiency  (the  average  reduction  of  emissions  over  2002-2007  for  light  commercial 
vehicles amounted to 0.4-0.5% per year), and partly linked to the increase in transport 
activity. Existing policies to reduce CO2 emissions and improve the fuel efficiency of 
new cars sold in the EU have not been able to deliver the progress needed for reaching 
the long-standing EU objective to reduce the average emissions of the new passenger 
car fleet to 120 g/km.; 

•  Road  transport  needs  to  use  less  oil:  There  is  a  direct  link  between  improved  fuel 
efficiency and lower CO2 emissions. Road transport relies heavily on oil for which the 
EU's import dependency is higher than 80%. This has a significant impact on the EU's 
security  of  energy  supply  and  makes  the  EU  economies  more  susceptible  to  oil 
shocks. In 2006, road transport accounted for 25.8% of the final energy consumption 
in the EU27; 

•  Further  reductions  in  CO2  emissions  must  be  achieved  cost-effectively  without 
undermining  sustainable  mobility  and  the  car  industry's  competitiveness:  Light  duty 
vehicles are an important part of the everyday lives of a large number of Europeans. 
Vehicles  provide  mobility,  which  is  essential  to  European  society  and  economy.  In 

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Decision 2009/406/EC 
In road transport, CO2 emissions account for 98% of all GHG in this sector. 
Source:  EC,  DG  for  Energy  and  Transport,  EU  energy  and  transport  in  figures:  Statistical 
pocketbook 2009. Figures are including International Bunkers but excluding LULUCF. 

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2005,  road  transport  accounted  for  around  86%  of  passenger  transport  activity  and 
approximately  70%  of  freight  transport  activity  in  Europe.  Europe  is  the  world’s 
largest producer of passenger cars and light commercial vehicles with around 30% of 
these vehicle types produced in Europe. The European automotive industry is a major 
component  of  Europe's  manufacturing  base.  The  vehicle  industry  accounts  for  about 
20%  of  Europe’s  manufacturing  R&D  investment  (over  €20  billion),  contributed 
about €60 billion to Europe’s trade balance and contributes more than €350 billion in 
fiscal  revenues,  which  represents  about  8%  of  the  European  Union's  total  general 
government revenues. Legislation to reduce the GHG emissions of light duty vehicles 
should not undermine the competitiveness of the automotive industry in Europe. 

2.2. 

Legal basis 

The proposal on light commercial vehicles is similar to the Regulation on CO2 emissions 
from passenger cars. The legal basis of that Regulation is Article 175 EC. The first recital 
of the Regulation states "The objective of this Regulation is to set emission performance 
standards for new passenger cars registered in the Community which delivers part of the 
Community's  integrated  approach  to  reducing  CO2  emissions  from  light-duty  vehicles 
while  ensuring  the  proper  functioning  of  the  internal  market".  The  same  applies  to  the 
current proposal on light commercial vehicles. Therefore the legal basis for the proposal 
is Article 175. 

2.3. 

Problem definition 

The main problem, concerning CO2 emissions from all light duty vehicles was described 
in the impact assessment on CO2 and cars. It states that:  

'The  overarching  problem  as  identified  in  the  earlier  Communications  is  that 
existing policies to reduce CO2 emissions and improve the fuel efficiency of new cars 
sold  in  the  EU  have  not  been  able  to  deliver  the  progress  needed  for  reaching  the 
long-standing EU objective of an average new light duty vehicles fleet CO2 emission 
of 120 g/km.' 

The  regulation  on  CO2  and  cars  addresses  CO2  emissions  from  passenger  cars  as  the 
main part of the implementation of the integrated approach. At present light commercial 
vehicles, which make up around 12% of the light duty vehicles fleet, are not covered by 
the  Community  policies  to  reduce  CO2  emissions.  However,  the  revised  strategy 
COM(2007)19 identified fuel efficiency progress in light-commercial vehicles as part of 
the  integrated  approach  to  achieving  the  Community  objective  of  reducing  emissions 
from new passenger cars to 120 g/km.  

A consultants report12 revealed that the number of light commercial vehicles (LCV) has 
been slowly increasing in European transport fleet (now making up 12% of the total road 
transport fleet13), and consequently that the share of CO2 emissions from LCV is rising. 
Therefore, in order to reduce CO2 emissions from the transport sector, it is necessary to 
introduce fuel efficiency measures for light commercial vehicles. Further, in the absence 

12 

13 

TNO  Automotive,  Measuring  and  preparing  reduction  measures  for  CO2  emissions  from  N1 
vehicles. Final report. (contract no. 04.OR.VM.050.1/DE)  
See Figure 3 

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of  a  regulation  for  light-commercial  vehicles,  there  is  a  risk  of  a  regulatory  gap  which 
could undermine the effectiveness of the regulation on passenger cars (explained in more 
detail in section 2.4.3). 

The specific problem therefore is to design a legislative instrument to limit emissions of 
CO2 from light commercial vehicles. 

2.4.  What are the underlying drivers of the problem? 

As  far  as  overall  CO2  emissions  from  road  transport  are  concerned,  a  wide  range  of 
factors  influence  the  observed  and  predicted  growth  in  CO2  emissions  from  passenger 
cars and light commercial vehicles. 

2.4.1.  Vehicle stock of LCVs is increasing 

According to the FLEETS14 report, the number of light duty vehicles has been increasing 
in  Europe  since  1995  (with  the  exception  of  gasoline  vehicles  in  EU-15).  The 
development of the stock is presented in Figure 1. 

Figure 1 Development of the LDV stock in Europe (Source: FLEETS 2008) 

Note: GLDV = Gasoline LDV; DLDV = Diesel LDV 

Sales of light commercial vehicles according to Global Insight have been growing since 
2002. Figure 2 shows that in total sales of light commercial vehicles increased by 24% 
during the period 2000-2007. 

14 

European Database of Vehicle Stock for the Calculation and Forecast of Pollutant and Greenhouse 
Gases  Emissions  with  TREMOVE  and  COPERT  (Contract  No  070501/2006/451259/MAR/C5); 
Final report, 2008 

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Figure  2  Development  of  number  of  sales  of  light  commercial  vehicles  in  EU-27 
(source: Global Insight) 

2.500.000

2.000.000

1.500.000

1.000.000

500.000

0

2000

2001

2002

2003

2004

2005

2006

2007

This trend is also clearly visible in both, EU-15 and the new Member States (Figure 3) 
with share of diesel powered vehicles growing at the expense of petrol engines in both 
groups of countries. 

Table  1  N1  registrations 
http://lat.eng.auth.gr/copert/data.php) 

in  EU-15  and  EU-12 

(source:  FLEETS 

report, 

EU15 N1 registrations 

EU12 N1 registrations 

1995 

2000 

2005 

1995 

2000 

2004 

Stock ('000): 

16 323 

20 050 

23 506 

1 611 

2 293 

3 093 

Diesel 

10 950 

15 357 

19 854 

781 

1 047 

1 255 

Gasoline 

5 342 

4 657 

3 596 

830 

1 245 

1 836 

LPG 

31 

35 

55 

New registrations ('000): 

1 241 

1 739 

2 076 

386 

Diesel 

1 073 

1 575 

1 958 

186 

211 

127 

Gasoline 

165 

162 

106 

200 

84 

301 

220 

81 

LPG 

4 

2 

12 

The share of N1 vehicles (vans) in the total registrations of light-duty vehicles has been 
increasing at a steady rate from 1995 to 2005. This phenomenon can also be explained to 
some extent by growing number of large passenger cars (e.g. SUVs) being registered as 
light commercial vehicles, mainly for tax purposes (see section 2.4.3). This trend is likely 
to be reinforced when the regulation on CO2 from passenger cars starts applying and no 
similar legislation on light-commercial vehicles is in place. 

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Figure  3  Registrations  of  vans  (N1)  and  passenger  cars  (M1)  in  EU27  (1995-2005) 
(source: EC) 

20 000 000

15 000 000

10%

N1

10 000 000

5 000 000

0
1995

11%

N1

12%

M1
Passenger Cars

2000

2005

2.4.2.  LCV driving pattern and mileages 

The driving patterns for LCVs are slightly different than for cars. FLEETS study analysis 
shows  that  vans  are  mostly  used  in  urban  conditions  (shorter  distances,  lower  speeds, 
many  restarts  and  periods  of  idling)  which  results  in  higher  fuel  consumption  and 
therefore generates more CO2 emissions than extra-urban, motorway driving. However, 
the EU average annual mileage of the whole fleet (old and new vehicles) has been found 
to  be  very  close  for  LCVs  and  passenger  cars  (M1),  i.e.  13  971  km  and  13  303  km 
respectively. This is also the case for new fleet whereby EU average annual mileage for 
passenger cars amounts to 17 113 km whereas for light commercial vehicles it is around 
20 000 km.15 

2.4.3.  Potential regulatory gap linked to type approval and registration procedures 

According  to  the  Directive  70/156/EEC  (amended),  the  light  commercial  vehicle  (N1) 
category contains vehicles with maximum mass not exceeding 3,5 tonnes which are used 
for the transport of goods. However, in practice many vehicles that are homologated as 
passenger  cars  (category  M1)  are  registered  as  N1,  often  to  take  advantage  of  reduced 
taxation  or  other  fiscal  incentives.  The  decision  under  which  category  the  vehicle  is 
registered  may  be  made  independently  from  the  homologation.  Cars  can  also  be  easily 
adapted  by  distributors  in  order  to  allow  the  users  to  register  these  vehicles  as  LCVs. 
Therefore, the exact mix of N1 vehicles in total vehicle fleet is not entirely certain.16 

The 2008 report "European Database of Vehicle Stock for the Calculation and Forecast 
of Pollutant and Greenhouse Gases Emissions with TREMOVE and COPERT" (FLEETS 
report) concluded that in EU15 passenger cars make up 4-58 % of N1 registrations. Data 

15 
16 

TREMOVE baseline scenario 2005 
The  database  used  in  the  supporting  study  was  corrected  in  view  of  eliminating  M1  vehicles 
registered as N1 from the dataset.  

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show that these are SUVs but also other luxury and smaller vehicles, which are mainly 
used for the transport of passengers. Based on the FLEETS report analysis, it is clear that 
the number of N1-registered vehicles which are primarily used for the transport of people 
and not goods is quite significant. 

Table 2 EU15 sales and actual registrations of N1 vehicles in 2005 (source: FLEETS 
report) 

EU15 

Total sales of 

N1 models 

Total N1  M1 models 

 share in 

AT 

BE 

DE 

DK 

ES 

FI 

FR 

IT 

LU 

NL 

PT 

SE 

UK 

32 285  

74 879  

8 004 

24 374 

28 878 

62 672 

322 801  

129 019 

202 335 

5 249 

58 079 

3 051 

387 203 

150 041  

2 230 

16 211 

 832  

77 583 

420 065 

149 750  

26 059 

218 514 

81 182  

1 621 

7 794 

1 260 

4 438 

3 064 

66 236 

66 774 

35 095 

4 597  

12 167  

8 553  

33 598  

 298  

5 052  

34 516  

5 427  

56 936  

16% 

19% 

4% 

58% 

39% 

5% 

36% 

37% 

10% 

8% 

52% 

15% 

17% 

29 730  

240 213  

17 609  

347 898  

163 391  

4 387  

68 978  

33 518  

34 106  

291 475  

17 975 

330 436 

In  addition,  there  are  no  constraints  on  drivers  consequent  on  the  type  approval  of  a 
passenger car as N1 because the same driving licence is required and insurance premiums 
are not significantly higher.  

The  scope  of  the  legislation  on  passenger  cars,  and  also  of  the  proposed  legislation  on 
light  commercial  vehicles,  is  linked  to  the  type  of  vehicle  (M1  or  N1)  as  homologated 
under  Directive  2007/46/EC.  Therefore,  the  registration  practice  in  the  Member  States 
regarding M1 versus N1, as described above, does not affect the scope of the legislation. 
This  means  that  even  vehicles  type  approved  as  passenger  cars  but  registered  as  LCVs 
will fall under the scope of the regulation on CO2 and cars. However, the presence of a 
certain  degree  of  overlap  between  the  registrations  for  passenger  cars  and  light 
commercial vehicles suggests that there is a risk of market responses if one category of 
vehicles is subject to legislation on CO2 emissions whereas the other is not, leading to the 
risk  of  an  unintended  regulatory  gap.  The  absence  of  regulation  for  LCVs  could  create 
incentives  for  manufacturers  to  type  approve  large  passenger  cars  as  light  commercial 
vehicles in order to avoid the mandatory CO2 standards for passenger cars. 

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For this reason, the legislation for M1 category and N1 category should preferably enter 
into force in the same time – the longer the gap between the legislation, the bigger the 
incentive for inappropriate type approval. 

2.5. 

Stakeholders affected 

The  proposed  regulation  will  have  an  impact  on  a  number  of  stakeholder  groups, 
however  the  scale  of  the  effect  should  not  be  as  large  as  in  the  case  of  passenger  cars. 
The  share  of  light  commercial  vehicles  produced  by  the  automobile  manufacturers  in 
Europe  is  much  smaller  than  the  share  of  cars.  According  to  ACEA  statistics,  light 
commercial vehicles (below <3.5 t) amount to 10% of total motor vehicle production in 
the EU.  

Major stakeholder groups affected include the general population, vehicle consumers, car 
manufactures, automotive component suppliers and fuel suppliers: 

•  The  population  of  the  European  Union  is  increasingly  affected  by  climate  change 
through  the  increased  climate variability  and  more  frequent  extreme  weather  events, 
and their related impacts. 

•  The buyers of vehicles are affected by possible increases in the price of new vehicles 
and  reductions  in  their  running  costs,  due  to  stricter  requirements  on  CO2  emissions 
and  the  related  improvements  in  fuel  consumption.  The  regulation  on  light 
commercial  vehicles  (LCVs)  however  will  have  a  less  important  impact  on  private 
consumers  than  the  regulation  on  CO2  and  cars,  because  there  are  fewer  LCVs 
purchased  for  individual  use.  On  the  other  hand,  users  with  specific  applications 
(police  and 
services; 
telecommunications and other infrastructure services suppliers) will be affected. 

security  organisations,  postal  and  parcel  delivery 

•  The manufacturers of LCVs will be affected by the obligation to comply with the new 
regulatory  scheme  to  reduce  CO2  emissions.  Manufacturers  will  have  to  introduce 
technical  CO2  reduction  measures.  In  the  short-term,  this  is  likely  to  result  in 
increased  production  costs  and  could  affect  the  structure  of  their  product  portfolios. 
However, given that demand for low carbon vehicles is likely to increase throughout 
the  world  as  climate  change  policies  continue  to  develop,  manufacturers  have  an 
opportunity to gain first mover advantage, providing them with a possibility to export 
advanced low carbon vehicles to other markets. 

•  Component  suppliers  will  also  be  affected  by  increasing  demand  for  advanced 
technologies.  They  are  likely  to  benefit  from  the  higher  demand  for  low  carbon 
technologies.  As  with  the  automotive  manufacturers  they  may  also  benefit  from  the 
possibility to export these advanced technologies to other markets around the world.  

•  Fuel suppliers will also be affected. They are likely to see lower demand for transport 

fuels as a result of the legislation. 

•  Small  and  medium  enterprises  (SMEs),  using  light  commercial  vehicles  will  be 
affected  by  possible  increases  in  the  price  of  new  vehicles  and  will  benefit  from 
reductions in their running costs that will result from the legislation.  

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2.6. 

Current economic situation 

The financial crisis that began in the second half of 2008 has had profound impacts on 
the  economy,  including  the  automotive  sector.  In  February  2009,  the  Commission 
adopted  a  Communication  on  "Responding  to  the  crisis  in  the  European  automotive 
industry"  (COM(2009)104).  The  Communication  notes  three  major  reasons  for  the 
difficulties being experienced by the European automotive industry: 

1. 

2. 

3. 

A  sharp  and  uniform  drop  in  demand  for  passenger  and  commercial  vehicles 
both in the EU and worldwide. In the last quarter of 2008 new car registrations 
in Europe declined by an average of 20%. New passenger car sales fell by 1.2 
million in 2008. In January 2009, the European passenger car market was 27% 
lower than a year before. 

Parts  of  the  automotive  industry  are  reporting  problems  with  access  to  credit 
financing and fears of  liquidity shortages. In addition, suppliers are expressing 
an additional concern about money not moving down the supply chain.  

The  industry  suffers  from  longer-term  structural  problems  pre-dating  the  crisis 
including a very competitive business environment, high fixed costs, structural 
overcapacity  and  intensive  price  competition.  The  average  overcapacity  in 
Europe is estimated to be at least 20%. Globally, vehicle production capacity is 
currently at ca. 94 million per year at a time when demand for 2009 is estimated 
at ca. 55 million. 

The  accumulative  figures  of  new  car  registrations  in  Europe  (EU-27  and  EFTA)  in  the 
period  from  January  to  August  2009  showed  an  8.2%  drop  as  compared  to  the  same 
period  in  2008.17  This  trend  is  even  more  severe  for  light  commercial  vehicles.  The 
number  of  registrations  of  new  light  commercial  vehicles18  in  the  same  period  in  2009 
was 37.4% lower than in the previous year19. A reduction in demand is likely to lead to 
continued production decreases, following estimates of reductions by 25% in the first two 
quarters  of  2009  alone.  This  exceeds  a  forecast  made  in  autumn  of  2008  although  the 
downturn expected is of a comparable magnitude (see Figure 4 below). This figure also 
illustrates  that  if  the  downturn  turns  out  to  be  as  anticipated,  it  will  be  comparable  to 
earlier such events although on a higher overall sales level. 

17 
18 
19 

ACEA 
In ACEA's statistics vans are defined as LCVs up to 3.5t. 
ACEA 

EN 

15 

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Figure  4  Trend  level  of  car  sales  on  the  western  European  market  (1960  –  2012) 
[Source: Global Insight] 

On  a  more  positive  note,  the  Communication  also  points  out  that  the  long  term  global 
outlook  for  the  automotive  industry  is  promising  as  world-wide  demand  for  vehicles  is 
projected  to  double  or  even  triple  in  the  next  20  years,  and  that  the  imperative  of  a 
"greener" car fleet will bring new opportunities for innovative technology.  

Building  on  the  re-launched  Lisbon  partnership  for  growth  and  jobs  in  2005,  the 
European  Economic  Recovery  Plan20  identified  the  automotive  sector  as  requiring  a 
strong policy response. As noted in the Communication, a key priority for the automotive 
industry in this context will be to master the triple challenge of technological leadership 
with an environmental and safety performance that is world class.  

In the Communication the Commission undertook to weigh up the costs and benefits of 
any new legislative initiative and seek, as far as possible, to avoid creating new economic 
burdens.  It  also  announced  that,  together  with  the  European  Investment  Bank  and  the 
Member States, which are increasingly undertaking measures to support the automotive 
industry (e.g. scrapping schemes), it would support industry in their efforts to maintain 
investments  into  future  technologies  (particularly  green  technologies  such  as  fuel 
efficiency  and  alternative  propulsion)  throughout  the  economic  downturn.  This  support 
will be provided primarily through the European Investment Bank as well as through the 
7th Research Framework Programme. 

On 5 March 2009, the Competitiveness Council adopted conclusions on the automotive 
industry in which it stressed that “the main principles of the [CARS-21] mid-term review 
should remain the guiding forces for the future decision-making process, while applying 
thoroughly the better regulation principles, namely through impact assessments, in order 
to  guarantee  predictability  and  legal  certainty  for  the  businesses”.  In  this  respect,  the 
Council  invited  the  Commission  to  “thoroughly  assess  any  possible  new  legislative 

20 

Communication  from  the  Commission  to  the  European  Council  of  26.11.2008,  "A  European 
Economic Recovery Plan" - COM(2008) 800. 

EN 

16 

   EN 

 
                                                 
initiative in line with these principles and avoid unnecessary administrative burdens on 
businesses”. 

In the context of the considerations outlined above, the arguments for making a proposal 
now or at a later stage have to be weighed up against each other.  

On the one hand, it can be argued that in a time of economic crisis the focus of action 
should  be  on  addressing  the  short-term  issues  and  that,  given  the  difficulties  being 
experienced by the industry to access finance, new action should be postponed.  

However, there are a number of arguments in support of making a proposal now. First, 
there is a need for planning certainty in the industry. The need to reduce CO2 emissions 
from all sources including road transport is undisputed and has not changed as a result of 
the economic crisis. It is therefore clear that emissions will have to come down, and the 
industry needs to know as soon as possible what is required. Given that demand for low 
carbon  vehicles  is  likely  to  increase  throughout  the  world  as  climate  change  policies 
continue  to  develop,  there  could  be  some  first  mover  advantage  for  European  based 
manufacturers,  providing  them  with  ability  to  export  advanced  low  carbon  vehicles  to 
other markets. 

Second, the Decision on Effort Sharing21 that has been agreed as part of the package on 
energy  and  climate  in  December  2008  puts  an  obligation  on  Member  States  to  reduce 
their  greenhouse  gas  emissions  from  the  sectors  not  included  in  the  Emissions  Trading 
Scheme. Failure to address one source of emissions implies more effort in other parts of 
the non-ETS sector, which are probably affected by current crisis as well.  

Third,  the  regulation  of  emissions  from  light  commercial  vehicles  is  an  outstanding 
element in the implementation of the Commission's Integrated Approach to reducing CO2 
emissions from light-duty vehicles.22 As the boundary between cars and light commercial 
vehicles is not fully clear-cut, there is a risk of creating a loophole in the legislation on 
CO2 and cars unless light commercial vehicles are also subject to similar legislation (see 
section 2.4.3).  

2.7. 

Baseline scenario 

The existing historical data on the development of CO2 emissions from light commercial 
vehicles  is  very  limited.  This  provides  challenges  for  projecting  the  trends  of  the 
emissions development in the future.  

The  supporting  study  on  light  commercial  vehicles  revealed  that  the  new  fleet  average 
emissions  in  2007  amounted  to  about  203  g  CO2/km  whereas  the  average  of  emission 
level  of  the  whole  fleet  was  230  g/km23.  To  develop  baseline  scenario  going  forward, 
estimations of the development of CO2 emissions in light commercial vehicles between 
2002  and  2007  were  made.  The  same  study  suggested  that  manufacturers  applied 
efficiency improvements to passenger cars in the context of the voluntary agreements. As 
these agreements do not apply to light commercial vehicles, it is likely that the amount of 

21 
22 
23 

Decision 2009/406/EC 
COM(2007)19 
Source: TREMOVE 

EN 

17 

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CO2 reduction measures applied in vans and minibuses is lower. According to the TNO 
2006  study  the  baseline  value  for  2012  in  the  absence  of  a  policy  aimed  at  efficiency 
improvements in light commercial vehicles, based on the 2002 average of 201 g/km, is 
expected to be around 190 g/km for newly registered vehicles. This estimate is based on 
assumed  autonomous  efficiency  improvements  stemming  partly  from  technology 
improvements diffusing into light vans from equivalent passenger cars. This corresponds 
to a decrease  of the  average  CO2 emissions by about 0.5-0.4%  per  year, or 1 gram per 
year.  However,  the  analysis  of  the  2007  data  in  the  supporting  study  shows  that  the 
average  CO2  emissions  for  light  commercial  vehicles  increased  to  203  g/km  and 
concluded that the majority of vans and minibuses are diesel vehicles. It is expected that 
implementation of additional efficiency improvements for diesel vehicles will generally 
be  more  costly  to  manufacturers  than  improvements  to  petrol  vehicles.  Therefore,  it 
should be assumed that it is unlikely that many improvements will occur in the absence 
of regulatory incentives to manufacturers.  

Further,  it  is  possible  that  an  inverse  trend  could  develop  in  the  absence  of  legal 
constraints,  potentially  resulting  in  an  increase  in  average  CO2  emissions.  This  would 
occur if the benefits of improved engine technology were offset by an increase in engine 
power  and  vehicle  mass.  However,  measures  developed  by  Member  States  to  address 
transport  emissions,  including  fiscal  measures,  rising  prices  of  fuel  and  technological 
improvement  in  passenger  cars  resulting  from  the  adopted  CO2  and  cars  legislation 
(likely to be also applied to smaller car-derived vans) could be expected to trigger a more 
rational approach to fuel efficiency of LCVs.  

To  understand  the  baseline  scenario  in  terms  of  total  CO2  emissions  from  light 
commercial vehicles, it is necessary to take into account the demand for these vehicles. 
The  FLEETS  report  suggests  that  the  number  of  light  commercial  vehicles  has  been 
increasing in Europe for the last ten years and this trend is confirmed by the data from 
Global Insight (see Figure 2) on the increase of sales of LCVs. 

Figure  5:  TREMOVE  baseline  scenario  for  CO2  emissions  from  N1  (source: 
TREMOVE) 

CO2 emissions from vans (N1)
TREMOVE baseline scenario

90

80

70

60

50

40

30

20

10

)
t
s
u
a
h
x
e
(
2
O
C

t

M

0
1995

2000

2005

2010

2015

2020

2025

2030

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As a result, the overall CO2 emissions from light commercial vehicles will also increase 
in a business as usual scenario. These results are confirmed in the TREMOVE baseline 
scenario (see Annex V for details on TREMOVE) on Figure 5. 

2.8. 

Does the Union have the right to act? 

Similarly  to  the  Regulation  setting  CO2  emissions  standards  for  passenger  cars,  the 
subsidiarity  principle  is  respected  by  this  proposal,  as  the  policy  objectives  cannot  be 
sufficiently achieved by actions of the Member States and can be met more efficiently at 
the Community level. EU action is necessary in order to avoid the emergence of barriers 
to the single market in the automotive sector and because of the transnational nature of 
climate change. The absence of action at the European level risks resulting in a series of 
national schemes to reduce CO2 emissions of light commercial vehicles. This would be 
of  particular  disadvantage  to  vehicle  manufacturers  as  differing  ambition  levels  and 
design  parameters  would  require  a  wide  range  of  technology  options  and  vehicle 
configurations. Such market fragmentation would also affect consumers who would not 
benefit from lower costs and economies of scale that an EU wide policy would deliver. 

3. 

OBJECTIVE 

3.1. 

Policy objectives  

The general policy objectives applicable for the legislative proposal on light commercial 
vehicles are similar to those developed for the cars proposal. These are:  

•  Providing  for  a  high  level  of  environmental  protection  in  the  European  Union  and 

contributing to reaching the EU's climate change targets; and 

•  Reducing  oil  consumption  and  thus  improving  the  security  of  energy  supply  in  the 

EU. 

The specific objective is: 

•  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  proposal  that  efficiently  implements  the  fleet  average 
emissions  target  for  new  LCVs  and  prevents  any  regulatory  gap  which  could 
undermine the effectiveness of the regulation on CO2 and cars; 

•  Making the legislation compatible with the regulation on CO2 and cars for reasons of 

simplification; and 

•  Providing a regulatory framework that avoids any unjustified distortion of competition 

between automobile manufacturers.  

EN 

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3.2. 

Consistency with horizontal objectives of the European Union 

Consistency  of  the  legislative  proposal  on  CO2  and  passenger  cars  with  horizontal 
objectives of European Union was extensively documented in that impact assessment. As 
this proposal is similar, most of the same considerations apply. These are summarised in 
the following sections. 

3.2.1.  Lisbon Strategy 

The  policy  objectives  of  the  revised  strategy,  which  includes  both,  passenger  cars  and 
light  commercial  vehicles,  are  in  line  with  the  three  pillars  of  the  European  Union’s 
Lisbon  strategy,  namely  "making  Europe  a  more  attractive  place  to  invest  and  work", 
"knowledge and innovation for growth" and "creating more and better jobs". 

•  The  policy  objectives  promote  innovation  and  technological  development,  because 
tighter requirements on CO2 emissions and fuel efficiency for light duty vehicles will 
encourage the development and application of new vehicle technologies; 

•  In  the  longer  term,  it  is  expected  to  lead  to  increased  competitiveness  in  the 
automotive sector. Technological innovation that is required to achieve the objectives 
is one of the main prerequisite for long-term competitiveness.  

•  It  will  increase  a  demand  for  highly  qualified  jobs  in  Europe.  Development  of  the 
technologies  needed  to  achieve  emission  reductions  requires  high  skilled  human 
resources to generate high value added solutions.  

•  The  policy  objectives  are  also  consistent  with  the  approach  taken  in  the  European 
Economic  Recovery  Programme  to  support  the  industry  by  encouraging  it  towards 
'tomorrow's markets'. 

3.2.2. 

Sustainable Development Strategy  

The overall objective of the Renewed Sustainable Development Strategy (RSDS) of the 
European  Union24,  regarding  sustainable  transport  is  "to  ensure  that  our  transport 
systems meet society’s economic, social and environmental needs whilst minimising their 
undesirable  impacts  on  the  economy,  society  and  the  environment".  The  related 
operational objective is to achieve sustainable levels of transport energy use and reduce 
transport greenhouse gas emissions. 

•  The policy objectives of the proposed regulation on light commercial vehicles are in 
line  with  the  RSDS.  The  requirements  of  the  proposed  regulation  will  contribute  to 
more  sustainable  mobility.  Cleaner  light  commercial  vehicles  will  bring  economic, 
social  and  environmental  benefits  through  reduced  CO2  emissions  and  fuel 
consumption.  

•  The  proposed  regulation  is  consistent  with  the  operational  objective  of  the  Strategy: 
'promoting  sustainable  consumption  and  production  by  addressing  social  and 
economic  development  within  the  carrying  capacity  of  ecosystems  and  decoupling 

24 

European Council, June 2006 

EN 

20 

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economic  growth  from  environmental  degradation'.  Improving  the  fuel  efficiency  of 
vehicles  will  support  the  decoupling  of  economic  growth  from  environmental 
degradation through reduced greenhouse gas emissions.  

3.2.3.  EU commitments to reduce GHG emissions 

In December 2008 the Council and the Parliament reached an agreement on the climate 
and energy package of legislation to implement the EU's climate change commitments to 
be met by 2020, namely to reduce greenhouse gas emissions by at least 20%, to ensure 
that 20% of final energy consumption is met with renewable sources, and to raise energy 
efficiency by 20%. The package also contains a clear offer to go further and commit to a 
30% cut in the event of a satisfactory international agreement. 

•  The  proposed  Regulation  to  reduce  CO2  emissions  from  light  commercial  vehicles 
will  make  an  important  contribution  to  the  reduction  of  GHG  emissions  in  the  non-
ETS sector of the economy which includes transport, buildings, agriculture and waste, 
representing some 60% of total GHG emissions in the EU. By 2020, emissions from 
these  areas  are  to  be  reduced  by  an  average  of  10%  compared  to  2005,  shared  out 
between  Member  States.  Section  5.4.1  inter  alia  concludes  that  reductions  of 
emissions  resulting  from  the  proposed  regulation  on  CO2  emissions  from  light 
commercial  vehicles  will  by  year  2020  correspond  roughly  to  5%  of  the  total  EU 
reduction effort. 

4. 

POLICY OPTIONS  

4.1. 

Introduction 

An  extensive  discussion  on  the  appropriate  policy  instruments  that  should  be  used  to 
improve fuel efficiency and performance in terms of CO2 emissions in light duty vehicles 
took  place  in  the  context  of  the  Commission's  Communications  and  the  proposal  for  a 
Regulation  CO2  and  cars.  The  conclusion  of  this  discussion  was  that  voluntary 
agreements  with  industry  did  not  bring  the  expected  outcome  and  that  a  regulatory 
approach was the best solution to tackle the problem of rising CO2 emissions from light-
duty vehicles. 

In view of growing demand for LCVs (see section 2.7) and the EU target to reduce CO2 
emissions  by  2020  by  20%  (or  by  30%  if  a  comprehensive  international  agreement  is 
reached), it is clear that all sectors have to contribute to the reduction effort. Emissions 
from  LCVs  represent  around  1.5%  of  EU  total  CO2  emissions  and  it  is  imperative  that 
growing emissions from LCVs do not undermine the efforts to reduce emissions in other 
transport modes and sectors of the EU economy. Moreover, there is a strong rationale for 
regulating  other  sectors  of  road  transport  in  order  to  avoid  creating  a  regulatory  gap 
which could undermine the effectiveness of the regulation on CO2 and cars by enabling 
larger and highly emitting passenger cars to avoid the target (see section 2.4.3). For these 
reasons, the business as usual option has been discarded from further analysis. 

The  intention  of  the  proposed  regulation  on  CO2  from  light  commercial  vehicles  is  to 
ensure  that  all  light  duty  vehicles  are  covered  by  similar  legislation  to  that  agreed  in 
December  2008  for  passenger  cars.  There  are  no  obvious  reasons  for  a  significantly 
different policy mechanism for LCVs than that agreed upon for cars. Therefore, there is a 

EN 

21 

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strong  degree  of  guidance  for  many  of  the  design  parameters  and  policy  options  to  be 
discussed in this impact assessment.  

The legislation for LCVs needs to take into account the differences between the markets 
for passenger cars and for light-commercial vehicles and some stakeholders argue that a 
different approach is therefore needed. Although a substantial part of LCV sector is very 
similar  to  cars  and  uses  the  same  technology  (car-derived  vans,  mostly  found  in  mass 
class I and II), heavier LCVs are less like cars and the heaviest vehicles are more akin to 
lighter heavy-duty vehicles. Further the market in passenger cars is highly heterogeneous. 
However, despite these differences, the legislation on the emission of air pollutants from 
road vehicles deals with LCVs of all mass classes in the same manner as cars.25 Indeed, 
the  concept  of  mass  classes  I,  II  and  III  is  laid  down  in  that  legislation  and  only  used 
there. It is necessary to find a balance between consistency with existing legislation and 
adaptation to the specificities of the sector. The approach chosen for the current proposal 
is to design the legislation on LCVs to be as similar as possible to the one on cars except 
where  there  are  justifications  for  taking  a  different  approach  for  LCVs  (such  as  limit 
value and slope of the utility curve). 

4.2. 

Design parameters  

The  main  design  aspects  to  be  discussed  in  this  section  are  effort  sharing  between 
manufacturers, possible flexibility mechanisms and the compliance mechanism.  

4.2.1. 

Scope of the legislation 

In order to ensure that the objectives of the current proposal are met, it is important that 
the scope of the legislation does not create any additional regulatory gaps. Therefore, it is 
important that vehicles which directly compete with N1 but are not covered by other CO2 
emissions standards are also included into the scope of the regulation. This is the case of 
lighter  N2  and  M2  vehicles  which  are  derived  from  N1  category  but  due  to  certain 
features, i.e. higher mass or higher number of seats are categorised as N2 or M2 vehicles. 
In the absence of CO2 standards for lighter N2 and M2 there is a risk of creating perverse 
incentives  for  manufacturers  to  further  increase  mass  of  heavier  N1  and  type-approve 
them as N2 to avoid CO2 standards. In one specific example of a widely used van, the N2 
version of the vehicle is only 190 kg heavier than its N1 counterpart. 

The scope of Regulation (EC) 715/2007 on type approval of motor vehicles with respect 
to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on 
access to vehicle repair and maintenance information includes vehicles of the N2 and M2 
categories  with  a  reference  mass  not  exceeding  2610  kg  or  to  which  type-approval  has 
been extended in accordance with Art. 2(2) of the above Regulation (with a mass up to 
2840  kg).  It  would  seem  advisable  to  make  use  of  the  same  scope  for  the  purposes  of 
regulating the CO2 emissions of LCVs. 

This would ensure that vehicles of similar physical characteristics that compete directly 
in  the  same  markets  are  covered  by  the  same  legislation,  while  leaving  the  heavier 
vehicles in the M2 and N2 classes out of the scope (N2 vehicles can reach a maximum 
mass of up to 12 tonnes). 

25 

Regulation(EC) 715/2007 

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4.2.2.  Effort sharing between manufacturers 

The key approaches to share regulatory effort between manufacturers are as follows: 

•  Utility based targets: in this approach, the CO2 obligation is defined as a function of a 
so-called "utility" parameter reflecting the utility of vehicles perceived by customers.  

•  Percentage reduction based targets: in this approach, the CO2 obligation is defined as a 
function  of  a  percentage  emission  reduction  compared  to  earlier  emissions 
performance.  

Under  the  utility  based  target  option  approach,  a  utility  curve  would  be  developed  to 
reflect the fact that different vehicles have different utilities and emit different levels of 
CO2.  The  average  reduction  target  would  be  distributed  between  vehicles  of  different 
sizes according to their utility (i.e. recognising that a large van capable of carrying a large 
load emits more than a small van with a much lower load carrying capability). As regards 
developing the utility function, a linear approach could be used in distributing the target 
amongst different vehicles and manufacturers.  

In  earlier  studies  on  light  commercial  vehicles,  a  range  of  utility  parameters  was 
discussed  including  maximum  payload,  gross  vehicle  mass,  loading  volume,  footprint 
and pan area. The supporting study concluded that in view of the available data and for 
reasons  of  practicality,  only  functions  based  on  vehicle  mass  and  on  vehicle  pan  area 
could be analysed. 

Figure 6 presents distribution of CO2 emissions in relation to mass and pan area. A sales 
weighted regression line also demonstrates that either of these parameters is suitable as 
they  show  a  reasonable  correlation  to  CO2  emissions.  There  are  a  number  of  outlying 
models  on  both  graphs.  However,  the  scatter  for  pan  area  is  wider  meaning  that  more 
models are further from the limit value curve. 

Figure 6 Sales-weighted correlation (least squares) between CO2 emissions and two 
principal  utility  parameters  for  petrol  and  diesel  models-  2007  LCV  database 
(source: supporting study on LCVs) 

The option of a percentage based CO2 reduction will also be considered as an alternative 
option to the utility based target. The percentage based reduction target would mean that 

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a proportionate emissions reduction would be required relative to the existing base level. 
This  would  be  an  alternative  way  to  distribute  the  burden  among  manufacturers.  In 
practical terms it means that producers of vehicles emitting higher amount of CO2 would 
have  to  deliver  higher  absolute  reduction  of  emissions.  However,  it  does  not  recognise 
the  efforts  of  those  manufacturers  who  have  already  taken  early  action  to  reduce 
emissions of their products. 

4.2.3.  Target level 

The  supporting  study  on  light  commercial  vehicles  analysed  the  target  levels  set  in  the 
revised Strategy on CO2 emissions from light duty vehicles, that is: 175 g/km target  in 
2012 and 160 g/km target in 2015. Since the revised Strategy was published in January 
2007,  there  have  been  major  developments  such  as  the  improvement  of  the  available 
dataset  and  the  agreement  of  the  Regulation  on  CO2  and  cars  which  create  a  need  for 
reconsideration of the target dates. 

•  The  target  of  175  gCO2/km  by  2012  set  in  the  revised  strategy  is  found  in  the 
supporting  study  to  be  demanding  given  the  proximity  of  the  target  date  of  2012.  It 
appears desirable to also consider an option to postpone the introduction of this target 
to a later date (2013-15). In further analysis the level of 175 gCO2/km will be tested 
with different utility parameters and slopes. 

•  The  target  of  160 g/km  in  2015  set  in  the  revised  strategy  does  not  appear  to  be 
realistic in this timeline according to the supporting study. Therefore, it is discarded 
from further analysis. However, a second step is considered as part of the discussion 
of the long term target (section 4.2.9). 

4.2.4.  Target year 

The  revised  Strategy  on  CO2  from  light-duty  vehicles  set  the  CO2  emission  target  for 
passenger cars of 130g/km and set the CO2 emission target for light-commercial vehicles 
of 175 g/km for 2012. This is the date for which targets will begin to apply for passenger 
cars  (phased-in  with  full  implementation  in  2015).  Given  the  time  needed  for  the 
agreement of the legislation in the co-decision procedure, to allow sufficient lead-in time 
for  the  industry  and  to  take  into  consideration  the  current  economic  situation  (in 
particular  more difficult  access to finance (see section 2.6) additional target years from 
the range 2013 – 2015 will be considered. 

The  timeframe  for  LCVs  should  be  consistent  with  that  for  cars  where  the  limit  value 
becomes binding in the year 2012. The proposal for a Regulation on passenger cars was 
made  in  December  2007,  it  was  agreed  in  co-decision  in  December  2008  and  formally 
adopted in June 2009. A similar timetable would indicate entry into force of the standard 
for light commercial vehicles by mid-2013.  

4.2.5.  Utility curve slope 

The  choice  of  the  slope  of  the  utility  curve  and  utility  parameter  determine  the 
distribution  of  reduction  effort  between  vehicles  and  as  a  consequence  between 
manufacturers.  The  impact  assessment  on  cars  included  an  analysis  of  a  wide  range  of 

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utility curve slopes26, starting from 0% slope to 120% slope. For passenger cars a 60% 
slope was selected. In order to rationalise the impact assessment on vans and minibuses a 
number of options short-listed for further thorough analysis is reduced. 

Utility  curves  with  lower  slopes  i.e.  0%  to  40%  seem  less  suitable  for  LCVs  than  for 
passenger  cars  where  perverse  incentives  of  increasing  mass  in  order  to  gain  a  less 
stringent  target  are  of  greater  concern.  Light  commercial  vehicles  are  used  to  transport 
goods therefore there are fewer incentives to make them heavier. A mass increase is done 
at  the  expense  of  payload  or  performance  which  then  needs  to  be  compensated  by 
increased  engine  power  leading  to  higher  vehicle  cost.  Also  market  shifts  on  the  LCV 
market are usually not driven by such incentives as luxury or increased comfort, which 
could also increase the mass of a vehicle, but rather are driven by business needs (with 
the exceptions of LCVs also being used for private purposes). The supporting study on 
LCVs explains different gaming options in chapter 7 and considers that the likelihood of 
mass increase being used by manufacturers as a means to reduce required CO2 reduction 
effort  is  considered  less  significant  for  LCVs  than  for  passenger  cars.  Thus,  only  the 
upper  range  of  utility  curve  slopes:  60%,  80%,  100%  and  120%  will  be  analysed  in 
detail in this impact assessment. However, reduction effort for lower slopes will still be 
presented for completeness. 

4.2.6.  Choice of average utility value in the definition of the limit value curve 

The formula for a limit value based on a utility parameter, M, can be written as follows 
(for the case of a target value of 175g/km, and assuming mass as the utility parameter): 

CO2 level = 175g/km + a × (M – M0), 

where a is the slope of the limit value curve and M0 is the average mass of the fleet. This 
formula only delivers the desired CO2 fleet average if the real, physical average mass of 
the fleet coincides with the value M0 assumed in the formula. If the figure M0 is too low, 
the  limit  value  curve  will  be  too  far  to  the  left  and  the  fleet  average  delivered  by  the 
legislation will be higher than desired. Conversely, if the figure M0 is too high, the limit 
value curve will be too far to the right and the fleet average delivered by the legislation 
will be lower than expected. In practice, the real average vehicle mass is not known in 
advance.  It  has  been  observed  to  rise  over  time  both  for  cars  and  for  LCVs.  This 
phenomenon is known as "Autonomous Mass Increase" (AMI) and has been discussed at 
length  in  the  context  of  the  Impact  Assessment  for  passenger  cars  and  its  underlying 
study. 

Further to the analysis conducted in the impact assessment on CO2 from passenger cars, 
an account of possible future developments of the market for light-commercial vehicles 
is taken. An autonomous mass increase can happen as a result of additional applications 
to  improve  safety,  comfort  or  performance  within  a  vehicle  class,  or  due  to  the  overall 
average mass increase resulting from increasing sales of vehicles from higher classes. In 
general  this  phenomenon  is  less  true  for  LCVs  as  explained  above.  In  addition,  a  shift 
towards larger vehicles may also mean that CO2 performance in terms of emissions per 
tonne kilometre may be improved. 

26 

See Glossary in Annex I 

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The analysis conducted by the consultant was done on the basis of different autonomous 
mass increase (AMI) scenarios: 0%, 0,82% and 1,5%. Contrary to the study for cars, an 
extreme  scenario  of  AMI  equal  to  2,5%  was  excluded  as  an  unlikely  trend  for  LCVs. 
Further  analysis  will  focus  on  two  options  0%  and  1,5%.  The  effects  on  costs  and  the 
distributional  impacts  for  AMI=0,82%  will  not  be  presented  explicitly  in  chapter  5 
however,  the  expected  results  would  be  roughly  halfway  between  the  two  remaining 
scenarios. 

Two approaches can be used to handle AMI in practice. First, a plausible value of AMI 
can be used to make a projection into the future and thus to determine an expected value 
of M0 in advance. Second, an ex-post adjustment of M0 can be done every few years, thus 
enhancing planning certainty for the industry while ensuring that the actual value of the 
average mass is never too far away from the chosen value of M0. This second approach is 
applied  in  the  Regulation  on  CO2  from  cars  and  it  appears  sensible  to  take  the  same 
approach in the case of LCVs. 

4.2.7.  Flexibility mechanisms  

To  increase  a  level  of  flexibility  for  manufacturers  to  comply  with  the  regulation,  it  is 
important  that  appropriate  mechanisms  are  introduced.  Mechanisms  to  be  considered 
include  options  of  fleet  averaging,  pooling,  and  derogations  for  small  volume 
independent manufacturers: 

•  Fleet  averaging:  manufacturers  could  average  their  CO2  emissions  over  their  fleet 
(rather than having to respect a target for each car they sell). The model assumes that 
manufacturers would choose to deliver the cheapest reductions first. This approach is 
consistent with the one in the CO2/cars legislation. 

•  Pooling  between  manufacturers:  manufacturers  could  do  the  same  fleet  averaging 
amongst  companies  belonging  to  the  same  group;  similarly  different  manufacturers 
could  be  allowed  to  create  a  pool  on  their  own  initiative  and  trade  the  credits  they 
need, should this help to optimise the cost of delivering CO2 reductions needed. This 
solution is also permitted in the CO2/cars regulation. 

•  Pooling  of  the  targets  for  cars  (M1)  and  LCVs  would  mean  that  manufacturers  can 
compensate underachievement in terms of CO2 g/km in one category by an equivalent 
overachievement in the other category. This flexibility would allow manufacturers to 
minimise  their  abatement  cost  by  choosing  to  reduce  more  in  a  category  where  it  is 
cheaper. According to the supporting study this would be the case for the majority of 
manufacturers  producing  both  passenger  cars  and  LCVs.  Pooling  between  cars  and 
LCVs  would  lead  to  a  net  cost  reduction  compared  to  the  situation  in  which  both 
targets  have  to  be  met  separately  but  would  introduce  competitive  advantage  for 
manufacturers producing both cars and vans. 

•  Specialist  derogation  for  small  volume  independent  manufacturers:  some  specialised 
independent manufacturers who make small numbers of vehicles may not be able to 
take  advantage  of  the  types  of  flexibility  identified  above  (e.g.  through  a  lack  of 
pooling partners) and therefore may need additional flexibility. A limited number of 
derogations are included in the CO2/cars legislation. 

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4.2.8.  Compliance mechanism 

Following  the  approach  taken  in  the  impact  assessment  for  regulation  on  CO2  and  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 as well as competitiveness of the automotive industry. Under 
the regulation on CO2 and cars, the premium is calculated at the manufacturer level after 
fleet  averaging  (which  would  allow  low  emitting  vehicles  to  offset  vehicles  above  the 
limit). The premium is calculated as the product of the distance to target (in  grams per 
kilometre) multiplied by the premium level (€ per gram per kilometre) and by the number 
of vehicles registered for which the manufacturer under consideration is responsible. 

The impact of selected levels of excess emissions premium (EEP) is evaluated in terms 
of deterrent effect against non-compliance and competitiveness.  

The  premium  must  be  set  at  a  level  which  deters  non-compliance  whilst  taking  into 
account the effect on global competitiveness and the automotive value chain's ability to 
continue  contributing  to  the  Growth  and  Jobs  agenda.  The  level  of  the  EEP  under  the 
Regulation  on  CO2  and  cars  was  set  by  reference  to  the  marginal  CO2  abatement  cost 
through vehicle technology. This rationale also applies to the setting of the EEP for light-
commercial  vehicles.  Together  with  the  competitiveness  dimension,  it  should  also  be 
taken into account that manufacturers do not have full control over the average of their 
sales in a given year and the target is defined as the average of all the vehicles placed on 
the  market.  This  creates  a  margin  for  error.  Manufacturers  can  reduce  the  risk  through 
putting in place continuous sales monitoring or through introducing a safety margin for 
uncertainties.  The  Regulation  on  CO2  and  cars  addresses  this  situation  by  allowing  a 
lower premium level for the first few grams per kilometre above the target (the so-called 
corridor approach). This corridor of reduced premium levels extends until the year 2018 
and subsequently ceases to apply. It can be assumed that by that time the manufacturers 
have  gained  sufficient  experience  with  the  regulatory  system  and  the  response  of  the 
market so the corridor is no longer needed. The corridor is therefore a risk management 
tool  that  reduces  the  financial  exposure  of  a  manufacturer  in  case  of  accidental, 
unintended non-compliance during an introductory period. A similar approach could be 
taken in the case of light commercial vehicles. In addition, in the longer term it would be 
desirable to consider linking the excess emissions premium to the consumer price index 
in order to avoid that its level, once chosen, erodes over time and thereby diminishes the 
intended deterrent function. 

4.2.9.  Long-term target 

The  regulation  on  CO2  and  cars  includes  a  long-term  target  of  95  g/km  in  2020  which 
was introduced by the European Parliament and the Council during the co-decision. This 
long-term vision allows for more planning certainty for the industry and counter balances 
the effects of less stringent design parameters (i.e. phase-in of full compliance and fines 
as well as additional derogations). 

The revised Strategy introduced a two step approach to CO2 emissions reductions from 
light-commercial vehicles (in 2012 and 2015). In order to be consistent with the approach 
in the Regulation on CO2 and cars, there is a case for replacing the 2015 target for LCVs 
referred to in the revised Strategy with a long-term target for 2020 and new information 

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gathered in the meantime. However, in view of a longer than originally proposed break 
between  the  two,  the  target  for  2020  should  be  more  ambitious  than  160  g/km.  The 
stringency of the 2020 target for passenger cars may provide guidance in this respect. 

Further to the analysis in the supporting study, the following emissions levels have been 
identified as potential targets for year 2020, i.e. 160, 150 g/km, 140 g/km, 135 g/km and 
125  g/km.  According  to  the  supporting  study  the  average  level  of  125  g/km  is  the 
maximum technically feasible option according to current knowledge, and thus the most 
expensive effort. The methodology applied in this assessment was based on the learning 
curve theory. This approach takes into account that costs of a product generally decrease 
over time as a function of economies of scale, learning effects and innovations in product 
and  production  methods.  Learning  curve  theory  summarises  the  effects  of  these  in  a 
learning  curve  that  specifies  the  development  of  costs  as  function  of  the  cumulative 
production.  The  consultant  identified  two  variants  with  similar  reduction  potential  but 
different  costs:  full  hybridisation  and  extra  strong  downsizing  (of  the  engine). 
Following  the  methodology  described  above  within  these  two  variants  three  possible 
scenarios were explored:  

1. No learning (each grade in the reduction potential is achieved using new technology 
replacing the previous one);  

2.  Learning  and  slow  penetration  (technologies  once  introduced  and  having  attained  its 
maximum penetration remains in full production, the rate of penetration is low and takes 
about 10 years);  

3. Learning and fast penetration (as above but it takes about 3 years to fully penetrate the 
market).  

It  is  important  to  note  that  these  calculations  were  done  at  level  of  total  sales,  without 
assessment  of  efforts  by  individual  manufacturers  and  the  costs  do  not  depend  on  the 
utility  parameter  and  limit  function  slope  that  is  assumed.  Costs  and  impacts  of  the 
identified  options  for  the  long-term  target  are  further  analysed  in  section  5.2.6.  In 
addition  several  scenarios  linking  short-term  and  long-term  targets  were  selected  for 
further  analysis  of  the  economic,  social  and  environmental  impacts  of  the  proposed 
legislation.  

4.2.10.  Multi-stage vehicles 

Multi-stage vehicles are LCVs that are sold as chassis-cabin combinations only and are 
completed with a dedicated build-up after the vehicles are sold by manufacturers to final 
users or third companies installing these build-ups. These structures are often constructed 
to  buyers'  specifications.  Sales  of  these  vehicles  are  estimated  to  represent  8%  of  the 
market. It is expected that many multi-stage vehicles in the 2007 database will not have 
information on CO2 emissions. Directive 2004/3/EC extended the measurement of CO2 
emissions to N1 vehicles and established a timetable for the reporting of these emissions 
which stretches from 1 January 2006 for complete vehicles of class I to 1 January 2009 
for incomplete vehicles of classes II and III. Thus, the regulatory mechanism to provide 
the CO2 levels for completed multi-stage vehicles is in principle in place. Any provisions 
specific  to  multi-stage  vehicles  in  the  Regulation  on  CO2  from  LCV  would  therefore 
have  the  character  of  transitional  measures  until  the  provisions  of  Directive  2004/3/EC 
are fully operational.  

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For  the  time  being  it  appears  feasible  to  adopt  a  pragmatic  approach  based  on  the 
observation  that  the  superstructures  built  by  third-party  vehicle  body  manufacturers  are 
unlikely to perform better in terms of air resistance and mass than those provided by the 
original equipment manufacturer (OEM). The range of variants and versions of complete 
vehicles of the same type offered by a manufacturer can be considered as an indication of 
the variety that is present in this segment of the market for light commercial vehicles.  

One possibility is to use, for incomplete vehicles of each manufacturer and vehicle type, 
the emission level of the variant and version of the same type of vehicle marketed in that 
year with the second--highest specific emissions of CO2 (this approach would be similar 
to the choice of tyres at the type approval test).  

Alternatively, a conservative approach would be to consider, for each manufacturer and 
vehicle  type,  the  average  CO2  emission  level  of  all  complete  vehicles  registered  in  the 
EU  in  that  year,  and  to  use  that  value  as  representative  for  the  incomplete  vehicles, 
recognising that an OEM has no control over the air resistance and mass of a vehicle that 
is being completed by a third party. In this case the true emissions of the vehicles as they 
finally  enter  the  market  are  very  likely  to  be  underestimated.  This  approach  would 
require  safeguards  such  as  ensuring  that  multi-stage  vehicles  that  are  completed  by  an 
enterprise  that  is  connected  to  a  manufacturer  are  not  given  unduly  advantageous 
treatment,  as  well  as  monitoring  the  share  of  vehicles  that  are  registered  as  multi-stage 
vehicles and adapting the legislation in case the provision is being abused. 

4.3. 

Policy options considered in the further assessment 

The  key  policy  options  short-listed  for  further  assessment  are  summarised  in  Table  3 
below.  These  options  are  used  for  the  purpose  of  distributional  analysis  and  do  not  yet 
include  the  long-term  target.  Further  analysis  of  the  long-term  target  is  conducted  at  a 
later  stage  (section  5.2.6).  The  options  differ  according  to  target  year  and  utility 
parameter. In options 2, 4, and 5 the target year is set beyond 2012 and is defined as a 
range of possible dates up to 2015 considered for the first step of the emissions standards. 
Within each option there are variants with different slopes of the utility curves and two 
variants of the autonomous mass increase (AMI). 

Table 3 Policy options 

Target 
Option 1 
175 g/km 

Option 2 
175 g/km 

Option 3 
175 g/km 

Slope 

Year 

Parameter 

60% 
80% 
100% 

120% 

60% 
80% 
100% 
120% 

2012 

2013-2015 

mass 
mass 
mass 

mass 

mass 
mass 
mass 
mass 

AMI 

0% 
1.5% 

0% 
1.5% 

60% 

2012 

pan area 

0% 

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Option 4 
175 g/km 

Option 5 

% reduction 

80%; 
100%; 
120% 

60% 
80%; 
100%; 
120% 

2013-2015 

pan area 
pan area 
pan area 

pan area 
pan area 
pan area 
pan area 

2012/ 

mass/pan area 

2013-2015  mass/pan area 

1.5% 

0% 
1.5% 

0% 
1.5% 

In addition to the main policy options setting the main orientation of the approach of this 
legislation, the design parameters such as flexibility and compliance mechanisms will be 
assessed and chosen independently from these options because this choice is not affected 
by  the  conclusions  on  main  policy  options.  This  is  also  true  for  the  long-term  target 
because at this stage the detailed modalities of reaching this target are not being defined. 
The recommended policy option will thus be accompanied by chosen design parameters. 

5. 

ANALYSIS OF IMPACTS  

The impacts of the short-listed policy options will be analysed according to the criteria 
set  in  the  Communication  from  the  Commission  on  the  revised  strategy  on  CO2 
emissions  from  light  duty  vehicles,  namely  neutrality  to  competitiveness,  social  equity, 
and sustainability. More specifically, the economic, social and environmental impacts of 
selected options will be analysed. 

5.1. 

Description of the methodology  

The methodology followed in the analysis of the impacts of identified policy options is 
based  on  the  impact  assessment  on  cars  and  a  supporting  study  on  light  commercial 
vehicles. In addition, the contributions provided during the stakeholder consultation will 
be taken into account. To reflect the overall socio-economic impacts, the modelling time 
horizon is 2020 and 2030. For further details refer to Annex V. 

5.2. 

Economic impacts  

5.2.1.  Distributional effect on manufacturers 

The  impacts  on  manufacturers  (i.e.  cost  of  compliance  with  the  targets)  of  different 
options selected for further analysis are analysed in terms of estimated changes in retail 
prices and relative emissions reduction required by each manufacturer.27 

27 

The analysis is based on the assumption of full cost pass-through from manufacturers to buyers. 

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5.2.1.1.  Distributional impacts of mass-based limit function (2012 to 2015) 

Figure 7 - Figure 12 (all figures provided in the Annex) present the distributional impacts 
of  options  1  and  2  for  the  achievement  of  the  175  g/km  target  with  mass-based  utility 
parameter, as well as option 5, expressed in terms of absolute and relative price increase.  

This  analysis  shows  clearly  that  the  costs  per  manufacturer  are  more  sensitive  to  the 
slope of the limit function than was the case for passenger cars. This is also true for the 
difference in levels of costs across the manufacturers. In general, it can be concluded that 
the higher the slope of the mass-based limit function the more even is the distribution of 
costs  between  the  manufacturers.  Lower  slopes  (below  60%)  increase  the  difficulty  of 
meeting the targets on the limit value curve for manufacturers of larger LCVs. 

If AMI is set at the level of 0% the average costs of meeting the target are independent of 
the target year and therefore are presented in the same figure (Figure 7 and Figure 8). On 
average the costs would be lower the higher the slope, with the best result for option 5 
(percentage  reduction  target).  An  assumption  of  AMI  =  1.5%  and  target  date  of  2012 
(Figure 9 and Figure 10) leads to higher costs of meeting the target than in case of zero 
autonomous mass increase. When these are compared to the results for a later target date 
(Figure 11 and Figure 12) one can see that the costs of meeting the target go up when the 
target  year  is  shifted.  This  is  due  to  higher  mass  increase  between  2007  and  the  target 
year  leading  to  proportional  higher  CO2  emissions.  This  mass  increase  needs  to  be 
compensated  with  additional  more  expensive  measures  from  the  upper  end  of  the  cost 
curve. This leads to an overall cost increase of meeting the target. 

5.2.1.2.  Distributional impacts of pan area-based limit function (2012 to 2015) 

Figure  13  and  Figure  14  (all  figures  provided  in  the  Annex)  represent  absolute  and 
relative  price  increase  of  reaching  the  target  of  175  g/km  in  2012,  when  pan  area  is 
selected as utility parameter (option 3) and AMI = 0%. Following the previous section, 
the results for option 5 are also included for comparison. 

The average costs of option 3 and 4 (if AMI is set at the level of 0% the average costs of 
meeting  the  target  are  independent  of  the  target  year)  are  quite  similar  to  the  average 
costs  for  the  mass-based  limit  functions  (option  1  and  2  with  AMI=0%).  However,  the 
distributional impact is much more diverse and uneven for pan-area and therefore more 
manufacturers would have difficulty to meet their specific targets and one is reaching the 
maximum of its reduction potential (i.e. price increase is the same for different slopes of 
utility  curves).  Similarly  to  the  results  for  mass-based  parameter  the  average  costs  are 
lower with higher slopes of the curve and are the lowest for percentage reduction (option 
5). This becomes even more visible if AMI of 1,5% is applied (Figure 15 and Figure 16) 
with the average relative costs being closer to 10%. 

Shifting the introduction of the target beyond 2012 (Figure 17 and Figure 18) results in 
the  average  costs  rising  above  10%  for  most  of  the  options.  Only  the  manufacturer 
reaching the maximum of its reduction potential in 2012 benefits from slight decrease in 
the cost of reaching the target. 

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5.2.1.3.  Summary of distributional analysis 

Comparing the different slopes for the limit functions of all options shows that the sales-
weighted  average  retail  price  increase  per  vehicle  is  lower  when  the  slope  is  higher, 
although these variations are not very significant. The retail price increases for a mass-
based curve by 5.8% (sales-weighted average) at 60% slope and by 5.4% at 100% slope 
for  option  1.  For  option  3  these  values  amount  to  6.3%  to  6%  respectively.  The 
differences are similarly small for options with AMI = 1.5%, equalling to 9.9% to 9.5% 
for  mass-based  limit  functions  and  10.5%  to  10.2%  for  pan  area-based  limit  functions 
respectively.  For  option  2  and  4  with  AMI  =  1.5%  the  differences  of  cost  increase  are 
also less than 0.5%.  

While the average cost is not subject to significant variations, the differences at the level 
of  single  manufacturers  are  much  more  important,  especially  with  a  lower  slope  of  the 
curve. The most even distribution of retail price increase is observed between 100% and 
120%  slopes.  However,  even  though  the  risk  of  perverse  incentives  of  increasing  the 
mass of vehicles to receive less stringent targets in LCVs is expected to be lower than in 
the case of passenger cars, the slope of 120% is more likely to provoke these adjustments 
than  the  100%  slope.  Therefore,  it  seems  that  a  slope  of  100%  would  be  most 
appropriate. 

Delaying  the  introductory  date  of  the  175  g/km  target  from  2012  to  a  later  date  (with 
AMI  =  0%)  is  of  advantage  for  the  industry  due  to  the  later  introduction  of  the  target 
allowing  for  more  time  to  implement  the  necessary  technological  measures  to  comply 
with the legislation. A certain delay beyond 2012 appears to be a necessity on practical 
grounds to take into account the time needed for the co-decision procedure. 

The  autonomous  mass  increase  set  at  the  level  greater  than  0%  increases  the  cost  of 
meeting  the  average  target  in  the  case  of  a  mass-based  limit  function,  and  makes 
compliance  more  difficult  for  certain  manufacturers  which  may  find  themselves  at  the 
maximum  of  their  cost  curves.  As  explained  in  section  4.2.5,  the  risk  of  perverse 
incentives to make LCVs heavier appears less pronounced than for cars because their size 
is mostly determined by the task for which they are designed, and mass increases would 
reduce available payload. In order to ensure that perverse incentives to increase the mass 
of  vehicles  in  order  to  benefit  from  a  less  stringent  target  are  avoided,  an  ex-post 
adjustment of the average mass would have to be embedded in the legislation, following 
the approach in the agreed Regulation on CO2 and cars. Setting a zero autonomous mass 
increase may therefore be considered suitable for the proposed legislation on LCVs. 

The  choice  of  utility  parameter  (mass  or  pan  area)  has  more  important  impacts  on  the 
average  retail  price  increase  and  the  distribution  of  burden  among  manufacturers.  The 
main tendency is that the estimated retail price increase is slightly higher when pan area 
is used as a utility parameter (with AMI = 0%). A serious drawback of this parameter is 
that  the  distributional  impacts  are  more  unevenly  spread  than  in  case  of  a  mass-based 
utility parameter. The individual targets for some manufacturers become more stringent 
for pan area as compared to mass.  

Option  5  (percentage  reduction)  is  the  most  attractive  in  terms  of  the  average  costs  of 
compliance which are lower than in other options. The average increase of retail price in 
this option for 2012/15 scenario equals 5.1%, rising to 7.8% with AMI=1.5% in 2012 and 

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9.3%  with  AMI=1.5%  and  the  target  date  in  2015.  The  distribution  of  costs  among 
manufacturers  is  also  the  most  equal.  However  the  drawback  of  this  option  is  that  past 
efforts to reduce CO2 emissions are penalised. In addition, it would be difficult to define 
the targets for new market entrants. Finally, the legislation would be defined on the basis 
of the current market situation, and not on the basis of an objective criterion. 

Following the results of the distributional analysis, options 3 and 4 (pan area-based utility 
parameter)  and  option  5  have  been  discarded  from  further  considerations.  Also  lower 
slopes  of  the  curve  (below  60%)  as  well  as  the  slope  of  120%  will  not  be  analysed 
further. 

5.2.1.4.  Impact on small and medium enterprises (SMEs) 

LCVs are mostly produced by large manufacturers. Where SMEs are currently present on 
the  market  they  evidently  compete  in  today's  circumstances.  As  long  as  the  legislation 
does not introduce distortions that impact disproportionately on the vehicles produced by 
SMEs, distortions at the expense of these SMEs should be avoidable. 

SMEs  play  a  rather  bigger  role  as  customers  of  LCVs.  For  them,  as  for  all  buyers  and 
users of these vehicles, the key impact is the change in the total cost of ownership. As 
demonstrated  in  section  5.2.4,  this  change  is  expected  to  be  a  negative  cost  and  thus 
beneficial.  Hence  SMEs,  along  with  all  other  users  of  LCVs,  stand  to  gain  from  the 
proposal. While upfront financing may be an issue, by the time the legislation enters into 
force, the effects of the economic crisis on credit availability should have abated. 

5.2.2. 

Innovation and competitiveness 

The impact of the regulation on CO2 and cars on research and development was analysed 
in the impact assessment on cars and the following conclusions were drawn: 

•  the 130 gCO2/km target for passenger cars will promote further technological advance 
in  fuel  efficiency  measures  and  accelerate  the  market  penetration  of  advanced 
combustion and powertrain technologies ; 

•  the legislation will to some extent limit possible vehicle upsizing; 

•  it is expected that the diesel penetration rate will continue increasing in the short term. 

It is likely that the legal proposal on light commercial vehicles will have similar impacts 
on research and development. The proposed 175 g/km will require a significant increase 
in the efficiency of light commercial vehicles. To a significant extent, manufacturers of 
light commercial vehicles are expected to take an advantage of learning effects obtained 
from  reducing  the  CO2  emissions  of  passenger  cars,  especially  for  car-derived  smaller 
vans. 

Further  dieselisation  of  the  fleet  is  not  expected  in  view  of  significant  domination  of 
diesel LCVs already. 

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The impact assessment on cars, suggested that the above mentioned trends should have 
positive impacts on the competitiveness of European manufacturers28:  

'In the global perspective, research and innovation are seen as strengths of the European 
market  and  it  is  not  likely  that  the  above  trends  will  have  a  damaging  effect  on  the 
competitive position of EU manufacturers. As regards mature non-EU markets where EU 
manufacturers  are  already  present  (e.g.  US,  Canada)  there  is  a  general  trend  towards 
the  reinforcement  of  fuel  efficiency/greenhouse  gas  emission  standards.  Because 
requirements  on  these  markets  are  so  far  less  ambitious  than  those  in  the  EU,  the 
proposed  EU  legislation  will  allow  European  carmakers  to  provide  vehicles  that  are 
competitive and meet the reinforced standards to come into force in the coming years. ' 

This  conclusion  can  also  be  applied  to  light  commercial  vehicles.  First  of  all,  vehicles 
that meet strict CO2 emissions requirements in the EU will be globally competitive and 
compliant  with  the  climate  change  policies  being  implemented  in  third  countries 
(especially  where  fuel  economy  standards  exist  and  are  about  to  be  tightened,  notably 
Japan, China, and USA, as well as India which is likely to follow). The reduction of CO2 
emissions is now a global phenomenon and involves all means of transport.  

Currently European LCV manufacturers are amongst the most technologically advanced 
in the world. Vans, trucks and buses produced in Europe are highly valued on the non-
EU  markets.  Moreover,  more  fuel  efficient  vehicles  will  be  attractive  to  vehicle  users 
allowing to lower costs of running  a vehicle  which is especially important for business 
users. New vehicles equipped with even more advanced fuel saving technologies should 
remain  competitive,  especially  with  oil  prices  expected  to  rise.  This  is  also  true  for 
countries with lower fuel taxation which tend to be more sensitive to price fluctuations of 
oil. 

To  assess  the  impact  of  the  proposed  regulation on light commercial  vehicles on trade, 
current trade patterns need to be understood. According to the impact assessment on cars, 
the automotive industry contributes nearly €60 billion to the European trade balance, so 
is one of the most important sectors. The share of light commercial vehicles in imports 
and exports of the EU automobile sector is presented in Table 4. 

Table 4 EU25 automobile trade (in million EUR) Source: www.acea.be  

2004 

2005 

Vehicle category 

Imports  Exports  Trade 

Imports  Exports  Trade 

Balance

Balance

Passenger cars 

24972 

56315 

31342 

25208 

60820 

35612 

Light commercial 
vehicles 

3005 

1836 

-1169 

3257 

2155 

-1102 

The  data  suggests  that  trade  flows  of  light  commercial  vehicles  are  significantly  lower 
than  passenger  car  imports  and  trade  balance  is  negative.  The  analysis  of  the 

28 

SEC(2007)1724 

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distributional impacts of the policy on manufacturers (section 5.2.1), suggests that to the 
extent  that  importing  manufacturers  produce  vehicles  with  higher  emissions  and 
therefore will need to make more effort to reach the target than domestic manufacturers, 
the proposal could have a positive impact on the EU's trade balance. 

In  terms  of  impacts  on  competitiveness,  the  proposal  will  apply  to  all  manufacturers29, 
irrespective of where they are located (i.e. EU or third countries). It will therefore affect 
all  manufacturers  in  a  relatively  consistent  manner.  The  legislation  will  be  most 
beneficial  to  those  manufacturers  with  access  to  the  most  advanced  technology  as 
compliance will require lower carbon powertrain technology to be introduced. However, 
much  advanced  technology  is  developed  by  the  automotive  component  suppliers  and 
should be available to all manufacturers willing to purchase it. 

5.2.3. 

Sensitivity analysis 

Sensitivity to fuel prices- in order to assess the impact of fuel prices (experiencing high 
volatility over the past year) an additional analysis including oil prices was carried out. 
The fuel prices used to perform these runs (TREMOVE) model are country specific and 
for  all  countries  are  expressed  in  Euro  in  the  year  2000.  Three  price  levels  were 
investigated: base case, as well as half and double of the fuel price which is a common 
approach in econometric modelling of scenarios with high uncertainty. 

Restrictions  on  reduction  potential-  the  supporting  study  on  light  commercial  vehicles 
assumes  that  due  to  much  lower  share  of  petrol  vans  on  the  market,  a  large  part  of 
technical measures will be introduced in diesel vehicles. To avoid unrealistic high costs 
for  petrol  vehicles  in  the  model  (due  to  their  small  share  and  much flatter  cost  curves 
than  for  diesels)  a  cap  on  the  available  reduction  potential  for  petrol  vehicles  was 
introduced.  This  is  modelled  as  a  percentage  of  the  maximum  achievable  reduction 
according  to  the  cost  curves.  The  following  alternative  situations  with  50%  cap  were 
modelled: 175 g/km – 2012 – 60% and 175 g/km – 2012 – 100%. 

Fuel price sensitivity runs (Table 12 in the Annex) show that if the fuel prices decrease 
(as happened currently, see section 2.6), the GHG abatement costs will be positive as the 
higher  purchase  costs  will  not  be  fully  offset  by  the  fuel  savings.  However,  they  are 
within the range of the EU ETS price and also in the levels comparable to the abatement 
costs  under  the  Regulation  on  CO2  and  cars  as  presented  in  the  CO2  and  cars  impact 
assessment.  Note  that  the  fuel  price  is  assumed  constant  over  the  modelling  period  in 
each fuel price scenario considered. It can be thus concluded that based on the results of 
the TREMOVE model the contribution of the transport sector is either cost benefiting for 
the society as whole or of a comparable cost effort to other sectors with Community-wide 
measures.30 

29 

30 

The  manufacturer  is  defined  in  the  legislation  as  the  entity  responsible  for  the  type-approval  of 
vehicle. 
Sensitivity runs were not performed for the long-term options because of the favourable results of 
analysis  for  the  short-term  targets  which  show  a  net  benefit  or  in  –  the  worst  case  –  a  rather 
limited cost. The introduction of the long-term target is expected to provide clear benefits to the 
society and lower compliance costs. 

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5.2.4. 

Impact on society and cost effectiveness  

As  mentioned  at  the  beginning  of  section  5,  the  economic  impacts  of  the  proposal  on 
light  commercial  vehicles  have  been  analysed  in  terms  of  distributional  effects  among 
manufacturers  and  of  overall  cost-effectiveness.  The  results  of  the  cost  effectiveness 
analysis  are  provided  in  this  section  and  the  figures  and  tables  are  presented  in  the 
Annex.  

The  associated  CO2  abatement  costs  reflect  costs  to  society  per  unit  of  achieved  CO2 
emission reduction. In the supportive study on light commercial vehicles, CO2 abatement 
costs were estimated for mass-based utility curve slopes 60% and 100%, the autonomous 
mass  increase  was  assumed  to  be  zero.  The  CO2  abatement  costs  decrease  with  the 
increase of fuel prices due to  higher savings from increased fuel efficiency. Abatement 
costs  for  a  60%  slope  are  depicted  in  Figure  21  and  for  a  100%  slope  are  depicted  in 
Figure 22. For the autonomous mass increase of 0%, a CO2 emissions reduction target of 
175  g/km  for  light  commercial  vehicles  is  cost  effective  to  society  (because  the 
abatement costs are negative or equal to zero) at both, 60% and 100% slope in case of oil 
price above 54 €/bbl and 50 €/bbl respectively. 

The  economic  impact  on  society  of  options  1  and  2  (mass-based  utility  parameter, 
AMI=0%)  was  also  assessed  in  TREMOVE  model  (see  Table  17  in  the  Annex).  The 
abatement  costs  to  society  are  expressed  by  the  net  present  value  of  purchase  and  fuel 
costs incurred to the consumers over the period 2010-2020 as compared to the base case. 
The difference between the options 1 and 2 is negligible in terms of costs to society and 
CO2  abatement  costs,  because  the  target  is  actually  the  same  and  the  same  technology 
improvement measures have to be implemented in both options. The overall amount of 
CO2 saved is slightly lower in the options with a later start date because of the delay in 
implementing the target.  

The combined scenarios (options 1 or 2 combined with different levels of the long-term 
targets) offer negative cumulative GHG abatement costs in the range of - €38.9 to - €32.6 
up to 2020, and - €20.6 to - €34.9 up to 2030 (see Table 17). 

5.2.4.1.  Impact on vehicle buyers and users 

From  the  end-user  perspective  the  proposed  regulation  is  cost  beneficial  according  to 
TREMOVE  simulations  (Table  10  and  Table  11  in  the  Annex).  Additional  costs  are 
calculated  as  a  difference  between  end-user  purchase,  repair  and  insurance  costs 
inclusive of all taxes and end-user fuel costs inclusive of all taxes. Negative costs mean 
savings for end users. It should be noted that TREMOVE assumes repair and insurance 
costs increasing according to the increase in vehicle prices, which might not be fully in 
line  with  the  actual  observed  technological  and  market  development.  Thus  as  a 
consequence, costs shown in the table might be overestimated which consequently would 
mean higher savings. 

Simulations  in  TREMOVE  model  indicate,  in  line  with  the  initial  expectation,  that  the 
effect of the legislation on vehicle sales should be very small (see Table 9 in the Annex). 
In fact, the decrease in vehicle sales in N1 segment for some of the options has an effect 
only  on  lowering  the  expected  growth  of  this  market.  The  expected  growth  in  sales 
(+18.7% by 2020 and +19.2% by 2030) is reduced by approximately 1%. This effect is 
also  very  small  for  different  combinations  of  the  short-term  and  long-term  targets  and 

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ranges from 0.38% decrease to 0.7% increase in 2020 and approximately from 2.7% to 
0.4% decrease in 2030.31 

Further impacts on end-users are listed in section 5.2.6. 

5.2.5. 

Impact on energy consumption 

In  2006,  564  Mt  of  crude  oil  was  imported  into  the  European  Union  and  final  oil 
consumption  was  496  Mtoe.  Based  on  the  results  of  TREMOVE  simulations,  the 
proposed  CO2  in  LCVs  regulation  (combined  scenarios,  50%  cap)  will  deliver  fuel 
savings  in  the  range  of  3.18-4.54  Mt  by  2020  depending  on  the  case,  which  means 
decrease of fuel consumption of road transport by 1.57-2.52% (Table 7). The decrease of 
total  fuel  consumption  by  this  range  represents  a  sizeable  cut  in  fuel  used  by  light 
commercial vehicles, which account for 12% share in the LDV fleet and use 6-7% off all 
road fuel, and means  a  comparable reduction effort to the one required from passenger 
cars. The LDV fleet (passenger cars and LCVs) is in total responsible for two thirds of all 
road  emissions,  and  thus  fuel  use.  This  means  LCVs  thereby  make  an  adequate 
contribution to energy security and reducing oil import dependence. 

Delay of the start date for the first step of reduction (175 g/km) to after 2012 will deliver 
slightly lower savings. However, an additional stricter long-term target from the range of 
125 to 160 g CO2/km in 2020 will more than compensate for this (see section 5.2.6.). 

5.2.6. 

Impacts of the long-term target 

Figure 19 and Table 5 present relative retail price increases for both variants of the long-
term  target:  full  hybridisation  and  extra  strong  downsizing,  as  well  as  three  scenarios 
within  each  option  (no  learning,  learning  with  slow  penetration  and  learning  with  fast 
penetration).  The  technology  options  of  extra  strong  downsizing  and  of  strong 
hybridisation  are considered as mutually exclusive for technical  reasons. It  is clear  that 
the option of hybridisation is much more expensive than extra downsizing however the 
differences  between  costs  of  scenarios  within  each  variant  do  not  differ  significantly. 
Therefore,  a  preferred  option  for  further  analysis  is  a  more  cost  effective  scenario  of 
extra  strong  downsizing  with  variant  of  learning  and  slow  penetration  which  also 
seems to be the most realistic option. 

According  to  the  analysis  performed  by  the  contractor  the  level  of  125  g/km  is  the 
maximum  feasible  reduction  in  the  timescale  and  the  costs  of  reaching  this  target  are 
high,  amounting  to  €4193  for  the  shortlisted  variant  (see  Figure  19)  in  addition  to  the 
effort that needs to be born for the first step of emission reductions. The effort that would 
be required from LCVs in 2020 would in this case be more than asked from passenger 
cars. According to the supporting study, the 2020 target of 95 g/km for passenger cars is 
expected to result in 15 to 22% retail price increase from 2006, whereas the target of 125 
g/km for LCVs would result in a 20% retail price increase as compared to 2007 baseline. 

31 

The  TREMOVE  model  has  not  been  designed  to  describe  the  effects  of  situations  such  as  the 
current economic crisis. This analysis therefore concerns the impact of the vehicle purchase price 
on the demand in the absence of other considerations like access to financing, economic situation 
etc.  

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A target of 135g/km would be consistent with the stringency of the 2020 target for cars 
leading to a 15 to 26% retail price increase. 

Further analysis in TREMOVE uses 150 g/km as a potential target level for 2020 as well 
as 125 g/km which represents maximum feasibility. In addition, target levels of 160, 140 
and  135  g/km  are  analysed  in  a  simplified  way  based  on  the  modelling  results  for  150 
and 125g/km. A long-term target set within the range of 160-125 g CO2/km is expected 
to deliver: 

-  net  benefit  for  the  vehicle  owner  at  all  investigated  levels  of  the  2020  target  in  the 
cheaper of the two approaches (extra strong downsizing) and at a discount rate of 4% as 
usually  employed  from  a  public  policy  perspective  (see  in  Annex  IV).  A  target  of 
150g/km, for example, would on average lead to savings between €2 110 and €2 331, a 
target of 140 g/km would on average lead to savings of €2 028 to €2 297, and a target of 
135 g/km would lead to savings of €1 987 to €2 279. Even choosing a discount rate as 
high  as  10%  –  which  is  closer  to  a  commercial  perspective  –  would  still  lead  to  a  net 
benefit for most of the options in the approach of extra strong downsizing apart from the 
target of 125 g/km which would impose a net cost of €88 in the 'no learning' scenario and 
allow for net savings ranging from €121 to €252 for other scenarios. 

- net benefits to end-users in all combined scenarios (different short-term and long-term 
targets) as depicted in Table 10. The scenario with a 2013 start date and 135 g/km target 
for  2020  offers  the  highest  savings  of  €4  831  and  results  in  savings  of  €1.45  per  €1 
invested.  Less  challenging  scenarios,  e.g.  2015  as  a  start  date  and  160  as  a  long-term 
target,  offer  lower  savings  of  €4  097,  but  require  lower  investment  due  to  later 
introductory date and less ambitious 2020 target and thus yield higher return (€1.55 per 
euro invested). All scenarios offer savings also in the period up to 2030 (Table 11).  

- negative cumulative GHG abatement costs as presented in section 5.2.4 and Table 17. 

-  benefits  from  savings  due  to  reduction  in  the  consumption  of  fuel  of  €11.6  -  €15.6 
billion by 2020, and €42.4 – €60.7 billion by 2030 (see Table 8 in the Annex). 

5.2.7. 

Impacts of pooling 

Flexibility  mechanisms  provide  manufacturers  with  a  broader  range  of  options  to  meet 
their emission targets and therefore facilitate the achievement of targets.  

The  impact  assessment  on  cars  argued  that  applying  the  target  to  manufacturers’  fleet 
average  rather  than  individual  vehicles  would  allow  manufacturers  to  decide  for 
themselves how and in which segments to reduce their emissions. Reduction of average 
emissions  may  be  achieved  by  reducing  the  emissions  of  the  models  where  such 
reductions  cost  the  least.  The  approximate  difference  in  cost  increase  for  cars  for  fleet 
average/individual  car  was  found  to  be  2%  lower  when  the  target  applied  to  the 
manufacturer fleet average. In case of LCVs some manufacturers may find it difficult to 
meet the individual target if the vehicle-based emission limit is introduced therefore there 
is an even stronger case to apply the average target to the producer's fleet.  

The positive effect of pooling between two or several manufacturers was emphasised in 
the impact assessment on cars. It is very likely that pooling of manufacturers producing 

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vans and minibuses will have similar effect. A summary of the arguments are provided 
below: 

-  Pooling  between  manufacturers  has  similar  effects  to  fleet  averaging.  As  different 
vehicles are subject to different abatement costs, different manufacturers are also  faced 
with  varying  costs  of  abatement.  By  allowing  pooling,  the  abatement  costs  of  different 
manufacturers  could  theoretically  move  towards  average  costs,  which  would  result  in 
increased cost-effectiveness.  

- Pooling would allow for niche producers to combine their portfolios with mainstream 
producers hence helping to address the problem of outliers within the overall system. 

- The precise impact of pooling on cost-effectiveness will depend on the extent to which 
manufacturers  use  this  possibility  and  the  nature  of  the  agreements  they  reach  between 
one  another,  it  is  likely  that  it  will  take  place  in  practice  and  has  been  supported  by 
representatives of the automotive industry during the consultation process. 

Pooling  between  cars  and  LCVs.  Bringing  both  categories  of  vehicles  under  the  same 
limit  function  is  not  a  realistic  option,  as  concluded  in  the  supporting  study  on  LCVs, 
because it would require a majority of vans and minibuses manufacturers to apply 100% 
of  their  technically  feasible  emissions  reduction  potential.32  Allowing  pooling  of  the 
efforts  under  separate  targets  (resulting  from  different  limit  functions)  for  LCVs  and 
passenger cars however is a possible option. Pooling of the targets for passenger cars and 
light  commercial  vehicles  would  mean 
that  manufacturers  can  compensate 
underachievement  in  one  category  (expressed  in  average  g/km  above  target  times  total 
sales in that category) by an equivalent overachievement in the other category (expressed 
in average g/km below target times total sales in that category).  

According  to  the  supporting  study  on  light  commercial  vehicles,  for  the  majority  of 
manufacturers  the  marginal  costs  for  meeting  their  manufacturer-specific  target  values 
(resulting  from  the  overall  targets  and  slope)  are  expected  to  be  somewhat  higher  for 
LCVs than the marginal costs for meeting the proposed passenger car target. This means 
that,  when  pooling  of  targets  is  allowed,  the  manufacturers  for  which  the  difference  is 
more important may limit their CO2 reduction efforts in LCV category and to compensate 
this by applying more CO2 reduction measures in the M1 category of vehicles (see Table 
13 in the Annex). 

A  manufacturer  that  produces  only  light  commercial  vehicles  could  still  have  a 
possibility to pool with another manufacturer of cars and/or vans33. However, this could 
potentially put such a company at a certain disadvantage compared to a manufacturer or a 
group of connected manufacturers that produce both types of vehicles. 

5.2.8.  Compatibility with the revised strategy on LDVs 

As explained in section 1.1, the proposal for a regulation on LCVs is a continuation of 
the  Commission's  regulatory  process  to  address  the  climate  change  impacts  of  road 
vehicles resulting from the revised strategy on CO2 from light-duty vehicles. The strategy 

32 
33 

See section 5.3 of the supporting study on LCVs. 
Similarly to pooling allowed under article 7 of the CO2/cars regulation 

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announced  that  CO2  reduction  from  LCVs  should  be  a  part  of  the  measures  of  the 
integrated approach to deliver reduction of additional 10 g CO2/km complementing the 
target of 130 g/km set for passenger cars, which in total would result in an average of 120 
g/km from light-duty vehicles by 2012. However, during the co-decision process to adopt 
the  regulation  on  CO2  emissions  standards  for  passenger  cars,  the  time  schedule  of  the 
strategy and the overall ambition have been amended by the European Parliament and the 
Council by introducing the long-term perspective of 2020 target. In addition, a phase-in 
period of full compliance with the target for cars introduced to the scheme changed the 
timeframe  of  the  short-term  reductions.  It  is  therefore  difficult  to  directly  compare  the 
level of CO2 reductions anticipated in the impact assessment accompanying the strategy 
(aiming  at  2012  as  a  target  date)  with  the  estimates  of  this  proposal  which  takes  into 
account  the  new  framework.  Likewise,  a  more  precise  estimate  of  the  long-term  target 
will be possible only when the modalities of reaching it are defined at the review in 2013. 

The  impact  assessment  of  the  revised  strategy  (SEC(2007)60)  estimated  the  CO2 
reduction  due  to  mandatory  reduction  requirements  from  LCVs  as  44.5  Mt  of  GHG 
(expressed as well-to-wheel CO2 equivalent) over the period 2010-2020. As specified in 
Table  16  the  anticipated  reduction  level  of  the  analysed  option  1  and  2  (assuming 
AMI=0%)  in  the  period  2010-20  should  amount  to  at  least  60  Mt  of  GHG  in  CO2 
equivalent with a start date from the range 2013 to 201534. This amount of CO2 reduction 
which  is  higher  than  anticipated  in  the  strategy  is  the  result  of  the  more  extensive  data 
collection  and  investigation  for  this  individual  proposal  compared  to  a  necessarily  less 
accurate  approach  for  the  overall  strategy.35  It  was  announced  in  the  strategy  that  "in 
2010,  the  Commission  will  review  the  status  of  implementation  and  the  potential  for 
further measures to move beyond the stated EU objective." This will be an occasion for 
taking stock of all EU measures undertaken to implement CO2 reduction from light-duty 
vehicles  as  part  of  the  integrated  approach,  and  for  potentially  revising  the  strategy  in 
view of the findings made. 

5.3. 

Social impacts  

5.3.1.  Employment aspect 

The  industries  that  manufacture  cars  and  light  commercial  vehicles  are  very  similar  – 
indeed almost all manufacturers of LCVs also make passenger cars. Therefore, many of 
the key aspects in this section are rather similar in the two sectors and the discussion in 
the impact assessment36 of the proposal for the regulation on CO2 and cars largely applies 
in  the  present  case  as  well,  bearing  in  mind  that  the  size  of  the  market  under 
consideration here is about 1/10 of that for passenger cars.  

34 

35 

36 

The value would be 63Mt for a 100% slope of the limit value curve in 2015, based on a simplified 
calculation on the basis of results from TREMOVE 
The impact assessment of the Strategy SEC(2007)60 used the baseline of 200.9 g/km in 2002 and 
assumed that the baseline value (without policy aimed at efficiency improvement in N1s) for 2012 
would  be  around  190  g/km  based  on  autonomous  efficiency  improvements  stemming  in  part  at 
least  from  technology  improvements  diffusing  into  light  vans  from  equivalent  passenger  cars. 
However,  the  most  recent  analysis  shows  that  the  average  emissions  in  2007  amounted  to  203 
g/km  which  explains  higher  savings  resulting  from  the  proposal  than  initially  expected  in  the 
Strategy. 
SEC(2007)1723, section 5.3. See 
http://ec.europa.eu/environment/air/transport/co2/pdf/sec_2007_1723.pdf 

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The impact assessment on cars discussed the balance of two opposing tendencies linked 
to more ambitious environmental performance of vehicles. On the one hand, the higher 
added value on the vehicle is likely to lead to more employment along the value chain; 
on the other hand adverse impacts on the sales of new vehicles have the opposite effect. 
The impact assessment on cars concludes that the direct impact on employment through 
decreased  sales  levels  caused  by  the  legislation  seems  likely  to  be  relatively  marginal, 
while  the  upstream  (suppliers)  and  downstream  (servicing)  impacts  as  well  as  the 
requirements for higher added value at the manufacturers themselves holds out positive 
prospects for employment.  

In the case of LCVs, an assessment of the alternative options shows that the retail price 
increase  per  vehicle  may  range  from  5.4%  to  5.8%  at  the  first  stage  of  the  legislation, 
depending on the slope of the utility curve and assuming full cost pass-through, and 7.1-
20.9% for the long-term target (range of 160 – 125 g/km level; extra strong downsizing 
option).  This  relative  price  increase  for  light  commercial  vehicles  is  similar  to  the 
estimated  6%  retail  price  increase  for  passenger  cars  for  the  short-term  target,  whereas 
the 2020 target is estimated to result in 15-20% increase.  

In  addition,  the  TREMOVE  model  forecasts  only  insignificant  decreases  of  light  duty 
vehicles sales (0.31 – 0.42% in 2020) due to lower price elasticity of demand for LCVs 
as compared to demand for passenger cars. Thus, it is expected that a marginal decrease 
of LCV sales (see Table 9 in the Annex) resulting from the regulation should not have 
important implications on employment in the vehicle manufacturing sector. 

5.4. 

Environmental Impacts  

5.4.1.  Overall impacts in terms of emissions  

The overall CO2 abatement in two alternatives is presented in Table 15 and Table 16 (in 
the Annex). The estimated emission reduction for the 2010-2020 in option 1 amounts to 
67-77  million  tonnes  (100%  slope).  However,  the  variation  in  savings  between  the 
different slopes is not very large, it may occur because of slight shift in vehicle sales.  

The CO2 abatement in option 2 is at least 60 million tonnes. The difference between the 
options is caused by the fact that the target of 175 g/km will be achieved at the most 3 
years later that in option 1. 

According to TREMOVE modelling37: 

•  The  reduction  in  the  GHG  emissions  in  period  from  2010  to  2020  (Table  15  in  the 
Annex)  corresponds  roughly  to  10%  of  the  reductions  calculated  in  the  impact 
assessment  for  CO2  in  cars,  which  is  in  line  with  the  proportion  of  the  vehicle  fleet 
sizes  of  the  vehicle  fleet  in  the  covered  categories  (the  number  of  newly  registered 
LCVs in 2005 was 12% of the number of passenger cars). 

37 

Note: "Abatement costs" are calculated for year 2009 with the recommended discount factor 4% 
and expressed in Euros of year 2000 – which is the base year in the TREMOVE model. "WtW" 
(Well-to-Wheel) GHG abatement also includes GHG emissions reduced by fuel producers. 

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41 

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•  The reduction in the GHG emissions from LDVs in year 2020 for targets from 2012 to 
2015 targets corresponds roughly to 5% of the total reduction effort (Table 15 in the 
Annex) under the decisions of European Parliament and of the Council on the effort of 
Member States to reduce of their greenhouse gas emissions to meet the Community’s 
greenhouse gas emission reduction commitments up to 2020 (Decision 2009/406/EC). 
This  can  be  partly  offset  by  the  increase  in  the  road  transport  emissions  due  to 
increase  of  transport  activity.  However,  the  contribution  of  CO2  reductions  from 
LDVs to the total effort does not take into account the offset of additional growth of 
GHG emissions from 2005 level. 

•  The introduction of the long-term target is estimated to result in the cumulative GHG 
savings (CO2 equivalent) of 61.7 to 81.6 Mt by 2020 (Table 16). These levels of CO2 
abatement  will  help  achieve  4.7  to  6.0%  of  the  reduction  effort  of  the  non-ETS 
contribution  to  20%  reduction  in  EU  GHG  emissions  by  2020  (see  Table  15  and 
section  3.2.3).  The  cumulative  GHG  savings  resulting  from  the  combined  scenarios 
increase to 267 to 342 Mt in 2030 (see Table 16).  

•  The impact of the legal proposal on CO2 emissions from light commercial vehicles in 
principle  has  an  insignificant  impact  on  the  overall  emissions  of  other  pollutants,  as 
indicated in Table 18 (in the Annex). LCVs sold in the EU will be subject to pollutant 
emissions  standards  (Euro  5  and  Euro  6)  in  any  event  and  the  proposal  for  CO2 
standards will not impact on these limit values. The share of diesel vehicles is already 
near 100% and no shift in the petrol/diesel share is expected. 

•  The production of more efficient vehicles under the present legislation is not expected 
to  generate  substantially  more  CO2  emissions  than  current  processes.  Moreover, 
production  is  to  a  certain  extent  already  covered  by  the  EU  Emissions  Trading 
Scheme  (cost  of  electricity  as  well  as  parts  of  the  production  of  raw  materials  and 
components). At present the CO2 emissions resulting from the production of vehicles 
are estimated to be responsible for about 15% of their lifecycle CO2 emissions. 

5.4.2. 

Impact of the compliance mechanism 

In order to ensure that manufacturers have incentives to comply with the legislation, the 
excess emissions premium should be set at the level of the marginal cost of compliance. 
On the basis of the purely technical cost of compliance as obtained from the supporting 
study,  compliance  with  the  target  of  175  g/km  in  the  timeframe  2012-2015  with  mass-
based  parameter  and  zero  AMI,  and  within  a  margin  of  0,1g/km,  would  require  a 
premium level of around €120 per gram per kilometre (Figure 23). This is higher than the 
level of €95 per gram agreed for passenger cars and results from higher marginal cost of 
CO2 abatement for light commercial vehicles. 

Setting  the  same  premium  levels  for  the  two  types  of  vehicle  would  be  important  if 
pooling between passenger cars and LCVs is permitted to avoid gaming. 

5.5. 

Additional costs to businesses and Member States 

The  proposal  for  a  regulation  to  reduce  CO2  emissions  from  LCVs  will  not  put  any 
additional  reporting  burden  on  manufacturers.  Car  producers  are  obliged  to  report  the 
data necessary to check compliance with this legislation already now at the type approval 

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42 

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and in the certificate of conformity of each vehicles. This also includes any parameters 
needed for a future review of the utility parameter. This is required from both, passenger 
cars and LCVs (the latter as of 2007 pursuant Directive 2004/3).  

The  regulation  will  however  require  that  producers  put  more  effort  in  monitoring  and 
forecasting of progress of sales in order to manage the compliance of their fleet with the 
target,  and  handle  the  monitoring  reports  prepared  by  the  Commission  each  year.  This 
will  be  already  required  by  the  regulation  on  CO2  and  cars  which  enters  into  force  in 
2012 and therefore a large majority of manufacturers will have these procedures in place 
in any case. 

The Member States are obliged to monitor and report the data provided by manufacturers 
for passenger cars already now (Decision 1753/2000/EC). Further to the adoption of the 
regulation  on  CO2  and  cars  regulation,  the  national  authorities  will  have  to  adapt  the 
monitoring  schemes  to  the  requirements  of  the  Regulation  (i.e.  gather  data  on  the 
footprint). The Commission is also working with the Member States to improve national 
monitoring schemes which also includes monitoring of the registration of passenger cars 
as LCVs and the opposite.  

Inclusion  of  the  obligation  to  monitor  data  concerning  LCVs  will  put  only  negligible 
additional costs on national authorities. The monitoring scheme required for this purpose 
will  be  the  same  as  used  for  passenger  cars  and  the  only  difference  will  relate  to  the 
obligation to process more data. The share of LCVs in the whole light-duty fleet is only 
around 12% of  the light-duty  vehicles fleet and this additional effort is estimated to  be 
very limited. 

5.6. 

Comparison of options 

As a starting point, five alternative policy options were identified. However, the analysis 
of distributional impacts of options discarded pan area-based utility (options 3 and 4) and 
percentage reduction (option 5) from further analysis (see section 5.2.1.3). Pan area was 
discarded  because  the  distribution  of  reduction  efforts  was  more  uneven  between 
different manufacturers than in case of a mass-based utility parameter. This means that 
the  individual  targets  for  some  manufacturers  were  more  stringent  for  pan  area  as 
compared  to  mass.  The  general  tendency  was  that  the  estimated  retail  price  increases 
were also higher for pan area. 

The  short-listed  options  1  and  2  were  further  analysed  in  terms  of  social  equity, 
competitive  neutrality,  cost-effectiveness  and  the  environmental  outcome.  Within  these 
options  low  slopes  of  the  utility  curve  (below  60%)  were  discarded  and  the  slope  of 
120%  was  rejected  on  the  basis  of  a  risk  of  perverse  incentives  to  increase  mass.  In 
option  2  the  target  year  was  defined  as  a  range  of  possible  dates  (beyond  2012  up  to 
2015) considered for the first step of emissions reductions. 

In  principle  the  two  options  are  alike  in  terms  of  costs,  if  assumed  autonomous  mass 
increase  is  set  to  zero.  If  the  autonomous  mass  of  vehicles  increases  over  3  years,  the 
manufacturers will be in less favourable position in 2015, because they will be required 
to  introduce  more  reduction  measures  needed  to  compensate  the  increased  CO2 
emissions. However, AMI of 1.5% is unlikely for light commercial vehicles because of 
their  use  in  transporting  goods.  The  additional  mass  would  come  at  the  expense  of  the 
payload and performance.  

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43 

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The  most  even  distribution  of  retail  price  increases  between  manufacturers  is  observed 
between 100% and 120% slopes. In addition, even though the risk of perverse incentives 
of increasing the mass of vehicles to receive less stringent targets in LCVs is expected to 
be lower than in the case of passenger cars, the slope of 120% is more likely to provoke 
these adjustments than the 100% slope. Therefore, the latter seems the most suitable. 

Option 1 
Mass-based utility 
Target year – 2012 
Slope: 60% - 100% 
☺ 
67 to 77 Mt CO2 eq. until 2020 

Option 2 
Mass-based utility 
Target year – 2013-2015 
Slope: 60% - 100% 
(cid:46) 
At least around 60 Mt CO2 until 
2020 

5.4%- 5.8% price increase per vehicle 
The cost of meeting this target for both start dates is similar if zero AMI 
increase is assumed 

7.9% - 8.3% price increase per 
vehicle 
Higher cost results from the need 
to compensate for the autonomous 
mass increase of 1.5% 
(AMI=1.5%) 
☺ 
-13.5 to -10.2 €/ton CO2 eq. 

9.5% - 9.9% price increase per 
vehicle 
Higher cost results from the need 
to compensate for the autonomous 
mass increase of 1.5% 
(AMI=1.5%) 
☺ 
Around -13.5 €/ton CO2 eq. 

(cid:46) 

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 costs 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. 
☺ 
Light Commercial Vehicles are 
mostly used by commercial 
enterprises including SMEs. At 
both slopes there are net benefits to 
the vehicle operator. 

(cid:46)/☺ 

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 (i.e. longer lead time). 

☺ 
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. 

Environmental 
impacts (i.e. CO2 
reductions) 

Average 
compliance costs 
(expressed as 
relative retail price 
increase for 60%-
100% slope) 

Cost-effectiveness 
to society 
(cumulative GHG 
abatement cost 
2012-2020) 

Other economic 
impacts (incl. 
competitive 
neutrality) 

Other economic 
impacts - impact 
on businesses 
including SMEs 

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Option 1 
Mass-based utility 
Target year – 2012 
Slope: 60% - 100% 
☺ 
The higher added value on the 
vehicle is likely to lead to more 
employment along the value chain 
(similarly to effects of CO2/cars 
regulation).  
The adverse impacts on the sales 
of new vehicles are estimated to be 
very small: -0.69% to – 1.33%  

Option 2 
Mass-based utility 
Target year – 2013-2015 
Slope: 60% - 100% 
☺ 
The higher added value on the 
vehicle is likely to lead to more 
employment along the value chain 
(similarly to effects of CO2/cars 
regulation).  
The adverse impacts on the sales 
of new vehicles are estimated to be 
very small, around -1%. 

Social impacts 
(employment) 

5.6.1.  Long-term target38 

2020 target 

Environmental 
impacts [cum. 
GHG savings in 
Mt] 

2020 
2030 

160 g/km 
59.1 

150 g/km 
61.7 

140 g/km 
71.7-64.3 

135 g/km 
65.6-81.6 

125 g/km 
68.2 

237 

267 

297-311 

312-342 

342 

Fuel savings [in 
Mt] 

2020 

3.18 

3.49 

3.80-4.07 

4.21 

4.51 

2030 

5.99 

7.02 

8.06-8.19 

8.57-8.85 

9.60 

Fuel savings at 4% 
discount rate [€/vehicle] 

Retail price increase 
[€/vehicle] (extra strong 
downsizing; slow 
penetration scenario)  

3477 

4286 

5094 

5499 

6307 

1499 

2049 

2907 

3335 

4193 

Cost-
effectiveness to 
society 
[€/tCO2] 

2020 

-38.9 

-36.9 

2030 

-34.9 

-29.6 

-34.7 to -
35.1 

-33.4 to -
34.2 

-25.4 to -
25.5 

-23.7 to -
23.9 

-32.6 

-20.6 

6. 

MONITORING AND EVALUATION 

6.1. 

Core indicators of progress towards meeting the objectives 

The  core  indicators  of  progress  are  linked  to  the  evolution  of  the  average  new  fleet  of 
light commercial vehicles over the years, and they cover data relating to:  

38 

Only for combined scenarios with 50% cap 

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•  specific  CO2  emissions  as  measured  under  the  EU  test  procedure,  to  assess  the 
performance of the automotive industry towards the respect of the mandatory targets,  

•  utility  (mass  or  footprint),  to  provide  an  analysis  of  the  evolution  of  the  EU  LCV 
market e.g. in case a shift in utility would require an adaptation of the utility curve in 
the  future.  Further  utility  parameters  such  as  maximum  payload  or  maximum  load 
volume  have  been  proposed  by  stakeholders  and  could  become  part  of  a  mandatory 
monitoring regime in order to assess the appropriateness of such parameters at a future 
review. 

6.2.  Monitoring arrangements 

The  necessary  data  have  to  be  provided  by  manufacturers  of  light  commercial  vehicles 
already  now  at  type  approval  (Directive  2004/3).  The  arrangements  on  monitoring  of 
compliance with the legislation will be similar to the ones for passenger cars. Further to 
the adoption of the regulation on CO2 and cars, the national authorities already now need 
to adopt the monitoring schemes to new requirements, e.g. by gathering data on footprint. 
The  Commission  is  currently  working  with  the  Member  States  to  improve  national 
monitoring schemes which also includes monitoring of the registration of passenger cars 
as  LCVs  and  the  opposite.  The  revised  monitoring  arrangements  will  allow  using  the 
similar scheme for both categories of vehicles, cars and vans. 

7. 

REFERENCE DOCUMENTS 

SUPPORTING STUDY 

1. 

AEA 2008 

Assessment  of  policy  options  for  the  regulation  on  CO2  emission  reduction  for  light-
commercial  vehicles  carried  out  by  ASPEN,  TNO,  CE  DELFT,  OKO  INSTITUT, 
Framework contract No. ENV/C.5/FRA/2006/0071, December 2008 

2. 

AEA 2009 

Assessment with respect to long term CO2 emission targets for passenger cars and vans 
carried out by ASPEN, TNO, CE DELFT, OKO INSTITUT, Framework contract No. 
ENV/C.5/FRA/2006/0071, July 2009 

FLEETS 2008 

European  Database  of  Vehicle  Stock  for  the  Calculation  and  Forecast  of  Pollutant  and 
Greenhouse  Gases  Emissions  with  TREMOVE  and  COPERT,  Contract  No 
070501/2006/451259/MAR/C5, Final report, 2008 

TNO 2004 

Service  Contract  on  the  Policies  for  reducing  CO2  emissions  from  light  commercial 
vehicles,  carried  out  by  TNO,  IEEP  and  LAT  on  behalf  of  the  European  Commission 
(DG Environment) in 2003-2004 

TNO 2006 

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46 

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Review  and  analysis  of  the  reduction  potential  and  costs  of  technological  and  other 
measures to reduce CO2-emissions from passenger cars, study for DG Enterprise carried 
out by TNO, IEEP and LAT/AUTh, Contract nr. SI2.408212, October2006 

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ANNEX I: GLOSSARY 

Light-duty vehicles (LDVs) - passenger cars and light commercial vehicles 

Light  Commercial  vehicles  (LCVs)  –  the  definition  applied  for  the  purpose  of  this 
document aligns the scope of LCVs with that of the Euro 5/6 legislation and covers N1, 
N2  and  M2  vehicles  with  a  reference  mass  not  exceeding  2610  kg.  This  is  further 
extended to those vehicles with reference mass up to 2840 kg to which type-approval is 
extended in accordance with Article 2(2) of Regulation (EC) No 715/2007. 

N1  vehicles  -  definitions  of  N1  vehicles  and  N1  vehicle  classes  are  given  in  Directive 
2007/46  Annex  II;  these  are  motor  vehicles  with  at  least  four  wheels  designed  and 
constructed  for  the  carriage  of  goods  and  having  a  maximum  mass  not  exceeding  3.5 
tonnes.  Classes  of  N1  vehicles  are  defined  on  the  basis  of  reference  mass:  class  I  (≤ 
1305kg), class II (1305 kg < reference mass ≤ 1760 kg), class III (> 1760 kg). 

N2  vehicles  –  according  to  Directive  2007/46  Annex  II  N2  vehicles  are  designed  and 
constructed for the carriage of goods and having a maximum mass exceeding 3,5 tonnes 
but not exceeding 12 tonnes. 

M2  vehicles  -  according  to  Directive  2007/46  Annex  II  M2  vehicles  designed  and 
constructed for the carriage of passengers, comprising more than eight seats in addition 
to the driver's seat, and having a maximum mass not exceeding 5 tonnes. 

Autonomous mass increase (AMI) – is an indicator of an average increase of mass of 
the fleet resulting from such factors as additional safety measures. 

Limit  value  curve  -  in  the  utility  based  approach  the  obligation  of  CO2  reduction  is 
defined  as  a  linear  function  of  a  so-called  "utility"  parameter  reflecting  the  utility  of 
vehicles. The line is such that the average new LCV fleet respects the average target (e.g. 
175 g/km). A 100% curve is based on the observed trend in a base year, scaled down to 
reach the desired limit value. Furthermore, one can rotate the curve around the point of 
average  utility  and  the  targeted  CO2  level,  which  means  that  even  though  the  slope 
changes  the  average  target  remains  the  same.  The  rotation  can  make  the  curve  flatter 
(below 100%) in which case vehicles with higher utility would have to reduce more in 
order  to  meet  the  target,  or  steeper  (above  100%)  for  which  smaller  vehicles  would  be 
asked to make more effort. 

Utility  parameter  –  a  parameter  meant  to  distinguish  vehicles  by  their  utility  as 
perceived  by  buyers  or  users.  The  utility  parameter  can  for  example  be  chosen  to  be 
vehicle's mass, pan area or footprint, or its carrying capacity. 

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ANNEX II: SUMMARY OF STAKEHOLDER CONSULTATION 
02 SEPTEMBER 2008 

Stakeholder  meeting  on  the  Proposal  to  reduce  CO2  emissions  from  light 
commercial vehicles, 02.09.2008 

Chairman: 

Philip Good, DG Environment 

The chair from the Clean Air and Transport unit in DG Environment opened the meeting 
and  outlined  the  context  for  the  stakeholder  consultation.  The  revised  strategy  on  CO2 
emissions  from  light  duty  vehicles  announced  that  the  Commission  would  propose 
legislation  to  reduce  CO2  emissions  from  light  commercial  vehicles.  The  aim  of  this 
workshop  was  to  give  industry  and  NGO  stakeholders  to  express  their  views  on  the 
proposed legislation and in particular the issue paper circulated by the Commission.  

Introduction  

The  chair  gave  an  introductory  presentation,  highlighting  the  main  aspects  of  the 
proposed regulation on light commercial vehicles. These included following:  

•  Proposed regulation on CO2 from light commercial vehicles should follow in general 

the structure of the proposal on passenger cars; 

•  To be consistent with the scope of Euro 5 and Euro 6 standards (Regulation (EC) No. 
715/2007) the proposed regulation should cover vehicles of categories N1, N2 and M2;  

•  The  Communication  from  the  Commission  sets  two  targets  for  light  commercial 
vehicles:  175  g/km  target  in  2012  and  160  g/km  target  in  2015.  The  proposed 
legislation should include these targets; 

•  With  regard  to  long  term  targets  it  is  possible  to  proceed  in  two  ways,  i.e.  to  set 
separate  targets  for  passenger  cars  and  light  commercial  vehicles,  or  to  set  a  single 
long term target; 

•  It  is  considered  appropriate  to  apply  a  utility  curve  based  target  in  the  proposed 
regulation.  Utility  parameters  under  consideration  are  vehicle  pan  area  and  vehicle 
mass; 

•  For  manufacturers  producing  both  M  and  N  type  of  vehicles  it  is  possible  to  allow 
pooling between cars and vans targets. Possibility for pooling between manufacturers 
is also being considered; 

•  It is considered to have a similar compliance mechanism to that for cars; 

•  The  possibility  of  including  a  derogation  for  small  scale  manufacturers  will  be 

considered. 

The Commission aims to make a proposal before the end of 2008. The full consultation 
paper is available at:  

http://ec.europa.eu/environment/air/transport/co2/co2_cars_regulation.htm. 

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ACEA Presentation 

Mr. Rolf Stromberger from ACEA provided their opinion on some of the key questions 
in the issue paper. He highlighted that: 

•  LCVs have a wide range of different designs and are more varied in terms of vehicle 
configuration  and  body  styles  than  passenger  cars.  Functionality  is  one  of  the  key 
purchase considerations for LCVs.  

•  ACEA  considered  that  CO2  savings  potential  for  LCVs  were  limited,  as  the  vast 
majority  of  the  light  commercial  vehicles  fleet  is  already  equipped  with  diesel 
engines.  

•  ACEA  considered  that  there  was  a  lack  of  CO2  emissions  data  for  light  commercial 

vehicles, making it difficult to set targets.  

With regard to the specific questions posed by the Commission he noted that: 

•  They  do  not  consider  that  an  immediate  merger  of  the  proposals  on  CO2  emissions 

from passenger cars and that for light commercial vehicles is appropriate. 

•  They  do  not  support  a  common  target  for  passenger  cars  and  light  commercial 

vehicles.  

•  They agree that an increase in fuel price makes technologies more cost-effective. 

•  They  consider  that  retail  price  increase  would  require  the  first  owner  to  keep  the 
vehicle  longer  to  get  the  investment  back.  Small  and  medium  enterprises  may 
postpone investments in new vehicles.  

•  ACEA  supports  a  utility  based  approach,  but  it  raised  a  question  whether  a  single 
utility  parameter  is  sufficient  to  cover  the  range  of  segments  of  vehicles.  They 
emphasised that bigger vans carry significantly more load that smaller vans and that 
this should be taken into consideration. 

•  ACEA is supportive to the pooling between manufacturers,  

•  They did not support pooling within a manufacturer between the targets for cars and 

vans due to competition concerns. 

•  They support the possibility to grant derogations to small scale producers.  

•  They stated that the level of excess emissions premium should be similar those in the 

EU Emissions trading scheme.  

Summary of discussion  

ACEA was asked to clarify the statement that retail price increase will cause a slowdown 
of fleet renewal. It was quite possible that any increase in price of the vehicle would be 
offset by the reduced fuel cost, so it could have little or no overall effect. ACEA thought 

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that  in  order  to  get  back  the  extra  purchase  cost,  users  will  drive  the  same  vehicle  for 
longer.  

ACEA  proposed  to  exclude  vehicles  of  category  M2  from  the  scope  of  legislation, 
arguing that this segment of vehicles is specialised, and that increased retail price of the 
vehicle  may  cause  the  increase  in  costs  of  transportation  of  passengers  so  was  not 
socially desirable. Other stakeholders thought that the rationale for this exclusion was not 
at all clear as these vehicles are based on N1, and that it would not be correct to exclude 
one particular segment of vehicles.  

Industry representatives were concerned about a long product cycle of 10 years, due to 
which  manufacturers  will  have  difficulties  in  reaching  the  target  in  2012.  They  also 
stressed  that  all  new  technologies  being  developed  now  have  to  undergo  long  testing 
procedures  before  implementing  them  in  the  vehicles.  The  assertion  that  it  was  not 
possible  improve  vehicle  fuel  efficiency  in  a  shorter  time  period  was  disputed,  as  for 
example emissions requirements tended to change every 4- 5 years. 

Industry  representatives  stated  that  it  may  not  be  enough  to  apply  a  single  utility 
parameter,  due  to  the  large  segmentation  of  light  commercial  vehicles.  However,  no 
preference was expressed for a specific utility parameter at this stage. 

The issue of multi-stage vehicles was also raised. It was noted that these vehicles are sold 
incomplete, so there is an issue of who should  be responsible  for  emissions from these 
vehicles. ACEA was asked to provide information on what is the share of sales of these 
vehicles and the type approval arrangements for vehicles which have been completed by 
a coachbuilder.  

There were questions as to why ACEA opposed pooling between the cars target and the 
vans  target.  Their  opposition  was  because  of  competition  concerns  between  different 
manufacturers.  JAMA  and  KAMA  did  not  have  a  common  position  regarding  the 
pooling yet.  

Other questions and comments: 

•  A comment was made that a maximum mass limit can cause loopholes and perverse 
incentive  to  produce  heavier  vehicles  that  will  be  outside  of  the  scope  of  this 
regulation. 

•  A question was asked about the strategy if there will be a fleet wide non-compliance 

with the target due to shift to heavier vehicles. 

•  A comment was made that all derogations in the legislation should not be permanent 

and need to be regularly reviewed. 

•  A comment was made that different policies between M1 and N1 classes could cause a 

distortion in the M1 and N1 markets. 

At  the  end  of  the  meeting  stakeholders  were  informed  that  the  presentations  of  DG 
Environment  and  ACEA  will  be  circulated  via  e-mail.  Stakeholders  were  asked  to 
provide their additional comments by 30 September 2008.  

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In addition DG Environment received some written responses to the consultation which 
can be accessed on: 
 http://ec.europa.eu/environment/air/transport/co2/co2_cars_regulation.htm 

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ANNEX III: SUMMARY OF SECOND STAKEHOLDER CONSULTATION 09 
MARCH 2009 

Chairman: 

Stefan Moser, Günter Hörmandinger, DG Environment 

The chair from the Clean Air and Transport unit in DG Environment opened the meeting 
and outlined the context for the stakeholder consultation. The aim of this meeting was to 
inform  all  interested  parties  about  the  progress  with  regard  to  the  development  of  the 
legislative proposal on light commercial vehicles and to provide an opportunity to share 
views on the proposal. 

Introduction 

Representative of the contractor39 Richard Smokers gave an introductory presentation on 
the  main  elements  and  findings  of  the  report  on  the  Assessment  of  options  for  the 
legislation  of  CO2  emissions  from  light  commercial  vehicles.  The  main  conclusions  of 
the report were: 

•  175 g/km target can be reached in 2012/15 

– 

at around 10% retail price increase 

•  160 g/km target not feasible for 2015 

– 

– 

based  on  static  cost  curves  for  2012-15  period  with  conservative  safety 
margin for assessing total reduction potential for combined measures 

assessment of a long-term target for 2020 still on-going 

– 

analysis  will  include  additional  technological  options  and  cost 
reduction  as  function  of  cumulative  production  due  to  learning 
effects 

•  mass-based limit function with slope ≥ 80% preferred due to: 

– 

– 

– 

lowest average costs per vehicle for meeting target  

most equal distribution of efforts among manufacturers 

limited chance of perverse effects compared to M1 

•  non-zero AMI has strong impacts on costs 

impacts on CO2 corrected by adjusting the limit curve 

39 

Consortium  of  AEA,  CE  Delft  and  TNO;  analysis  performed  under  the  framework  contract  DG 
ENV/C.5/FRA/2006/0071 

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ACEA presentation 

Mr  Rolf  Stromberger  from  ACEA  (Association  of  European  Car  Manufacturers) 
provided  joint  position  of  association’s  members  on  some  of  the  key  issues  in  the 
proposal and the report. The main highlights are:  

•  it is a business-to-business market and there is a high diversity in customer needs 

•  there is no need for a regulation on light commercial vehicles, because:  

– 

– 

– 

85% of road vehicles are already covered by CO2 cars legislation 

LCVs are responsible for 1,7% of man-made CO2 emissions in the EU 

LCVs are not 'emotional products' and are not driven by fashion, they need 
to fulfil a work function; 

•  ACEA  considers  that  direct  application  of  the  same  design  used  for  CO2  and  cars 
regulation is not appropriate because of differences between passenger cars and LCVs, 
for  instance:  dedicated  business  needs;  higher  diversity  of  LCVs;  limited  CO2 
reduction potentials; etc.  

•  Impact  assessment  should  sufficiently  consider  the  wide  range  of  LCVs  and  other 
aspects  as  lead-time.  According  to  ACEA  inadequate  impact  assessment  may  put 
additional  burden  on  industry  and  customers  and  is  incompatible  with  CARS  21 
principles. 

•  ACEA  noted  that  LCV's  development  and  product  cycles  are  longer  than  for 
passenger  cars.  In  addition,  due  to  cash  shortage  and  economic  situation  the  current 
development  time  for  LCVs  will  be  even  longer.  Therefore,  ACEA  believes  that 
proposed CO2 target in 2012 does not consider lead-time needs; 

•  According  to  ACEA,  CO2  saving  potential  for  LCVs  is  limited  as  compared  to  cars 
because  diesel  engine  penetration 
load  volume  determines 
aerodynamics and design of vehicle; some technologies for cars are not applicable or 
have lower CO2 reduction potential (e.g. engine down-sizing). Due to this the vehicle 
price and CO2 abatement costs will increase significantly.  

is  above  90%; 

•  ACEA considers that the data used by the consultant is weak because it contains many 

assumptions; 

•  ACEA  considers  that  cost  increase  for  LCVs  will  not  be  recoverable  because  of  the 

following aspects:  

– 

CO2 fleet average is not representative 

–  When  proposing  targets  in  the  revised  Strategy  on  CO2/LDVs  it  was  not 
considered that CO2 reduction for LCVs is more costly than for passenger 
cars; 

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– 

– 

For proposed Community target of 175g/km average retail price increase 
would be €1,650–€2,000 (excl. tax); 

Tougher  long  term  target  will  require  further  cost  increase  and  it  is  not 
technically feasible. 

•  ACEA  considers  that  consultants  study  does  not  justify  the  proposed  CO2  target  for 

LCVs; 

•  The  current  economic  situation  of  the  automotive  industry:  LCV  sales  dropped  by 
35.6%  in  January  2009;  forecasts  show  that  vehicles  production  in  the  world  will 
further  decrease  in  2009.  The  goal  of  the  industry  is  to  get  through  the  recession 
without  long-term  damage  to  competitiveness  and  minimisation  of  the  closure  of 
production sites.  

•  ACEA  considers 

that  proposed 

legislation  needs  a  robust  database  and  a 

comprehensive impact assessment and it proposes a following way forward:  

– 

– 

– 

Joint work of the Commission and the industry on the vehicles database; 

Setting  more  realistic  targets  than  currently  proposed  and  allowing 
sufficient lead-time; and avoiding additional economic burden; 

Consideration of the cumulative costs of regulation. 

FIA European Bureau presentation 

Mr  Wilfried  Klanner  from  FIA  (Fédération  International  d’Automobiles)  European 
Bureau  presented  results  of  their  own  analysis  conducted  on  the  ADAC  data  to 
demonstrate the influence of different target line concepts on the CO2 emission reduction 
potential  based  on  the  strategy  to  reduce  CO2  from  LDVs,  and  on  the  achievability  of 
these  targets  by  future  N1  fleet.  The  objective  of  this  analysis  was  to  find  the  most 
promising  concept.  The  analysis  looked  at  three  policy  options:  utility  curve  based  on 
kerb  weight,  utility  curve  based  on  gross  mass,  and  similar  scheme  as  the  one  used  in 
regulation on CO2 from passenger cars. 

Based on this analysis of the data, FIA presented the following conclusions: 

i. 

The  constant  CO2  reduction  target  line  concept,  based  on  vehicle  kerb 
weight  respectively  on  vehicle  reference  mass,  is  likely  to  be  a  good 
compromise between CO2 reduction potential and achievability.  

ii.  Using the M1 target line for the N1 car fleet as well is not a satisfactory 
solution,  due  to  low  achievability  and  due  to  the  fact  that,  in  contrast  to 
M1  cars,  heavier  N1  vehicles  normally  also  transport  higher  loads. 
Therefore  heavier  N1  should  not  be  punished  by  more  demanding 
thresholds, as it is the case for the M1 target line. 

iii.  Based on this concept the target lines to fulfil the CO2 emission targets for 

2012 and 2015 are developed and discussed. 

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iv.  The outcomes of this analysis show good compliance with the findings of 

the AEA study.  

v. 

FIA proposal for 2012- 175 g/km average- a constant CO2 reduction target 
line based on vehicle kerb mass. 

vi.  The target line of 2012 would mean 13,79% reduction line (203 g/km to 

175 g/km)- already today a lot of vehicles are meeting this target. 

Contribution by Axel Friedrich 

Axel  Friedrich  presented  a  short  statement  on  behalf  of  German  environmental  NGOs. 
An  importance  of  reducing  CO2  emissions  from  all  sources  (also  small  emitters)  and 
energy security (i.e. lowering reliance on imports of oil) was stressed.  

Mr Friedrich referred to the estimation of costs in the contractor’s report saying that they 
are much too high. In addition, a longer lifetime of light commercial vehicles, and thus 
longer impact on emissions, should be taken into account in the estimations of efficiency 
of CO2 reductions. In UBA the costs of optimised technological packages were estimated 
proving that these reductions can be done at much lower costs, e.g. optimisation of tyres 
can provide savings of 5%, engine friction 3-5% with virtually no cost, improvement of 
air  resistance  of  vehicles  can  also  contribute  to  fuel  efficiency.  Taking  this  into 
consideration  when  analysing  data  in  the  report  leads  to  conclusions  that  the  target  of 
175g/km can be reached with no additional costs.  

In addition, Mr Friedrich claimed that nearly all light commercial vehicles in class I are 
derived from passenger cars which means that CO2 reduction in the former could be done 
using  the  same  solutions  as  in  M1.  According  to  the  speaker  half  of  LCVs  in  class  II 
could  also  benefit  from  investments  in  efficiency  in  passenger  cars  (example  of  the 
retrofitting  programme  in  Germany).  The  statement  that  some  of  the  targets  cannot  be 
made was also opposed and benefits to society being three times higher than costs were 
highlighted. In addition, an example of hybrid LCVs being used in Japan and USA and 
offering 50-60% of reduction in fuel consumption was given. 

Mr  Friedrich  also  referred  to  an  agreement  on  phasing  out  of  cooling  agent  for  air 
conditioners 134a and possible plans of manufacturers to delay coming into effect of this 
agreement until 2017. The speaker claimed that this should be penalised by adding 8-10g 
of CO2 to the emissions figure of vehicles. 

Finally,  a  mass-based  utility  parameter  was  questioned,  and  volume/or  area  based 
standard was proposed instead as more suitable for LCVs. 

Contribution by JAMA (Hiroki Ota) 

The  representative  of  Association  of  Japanese  Automobile  Manufacturers  (JAMA) 
highlighted that the recommendations of CARS 21 should be respected while preparing 
this  proposal  and  that  unnecessary  costs  for  the  industry  should  be  avoided.  Mr  Ota 
called  for  a  comprehensive  impact  assessment  of  the  proposal,  especially  because  the 
costs  of  compliance  are  higher  than  for  passenger  cars.  A  need  for  more  precise  and 
accurate  database  was  reiterated  and  JAMA  offered  support  to  the  Commission  in  this 

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respect. The speaker reminded that manufacturers of LCVs need more lead time due to 
longer product cycles, especially the target date of 2012 is too short to achieve it. 

Summary of discussion 

- Timing of the proposal 

The  representative  of  the  European  Shippers  Council  expressed  its  concern  on  the 
timeline highlighting that their members will not be left with much choice if heavier vans 
go  out  of  the  market  and  that  it  will  cause  serious  problems  of  efficiency.  Timing  of 
2012/15 was therefore assumed to be not realistic. 

The  official  from  the  Ministry  of  Environment  of  the  Netherlands  asked  whether  the 
long-term target (mentioned by the contractor) would also be included in the proposal. 

- Slope of the utility line and utility parameter 

The representative of the European Shippers Council questioned whether it would be fair 
if all categories had the same burden (100% slope). A possibility of relative targets, i.e. 
same relative reduction effort for large and small vans was suggested as a better option. 

Jos  Dings  from  Transport  and  Environment  said  that  mass-based  parameter  was  an 
unfortunate consequence of copying M1 proposal. T&E study on feasibility of footprint 
parameter concluded that costs are likely to be lower in this approach. The speaker said 
that it is possible to use this parameter because the data is available and in addition the 
light  weighting  options  pay  off  fully.  Jos  Dings  also  reminded  that  the  regulation  on 
LCVs  has  been  in  place  in  the  USA  for  30  years  thus,  in  reality  the  diversity  of  the 
market is not an obstacle to regulation. 

Axel Friedrich highlighted that any parameter that is based on the area, i.e. pan area or 
footprint,  is  better  because  of  the  utility  of  LCVs  (to  transport  goods)  and  because  it 
prevents  a  misuse.  The  data  on  pan  area  is  available  whereas  footprint,  although  more 
complicated, can be estimated based on data from manufacturers. 

Wilfried  Klanner  referred  to  AEA  study  and  comparison  of  the  outcomes  of  different 
policies (incl. different utility parameters) and asked for keeping the same approach as in 
M1 regulation. Pan area does not bring many benefits because of the wider scatter. 

- Pooling 

The representative of Toyota expressed a concern that some of the manufacturers do not 
produce passenger cars and therefore would not have an opportunity to use the flexibility 
of pooling. 

An official from Department for Transport (UK) also questioned the practicality of this 
flexibility even though it sounds reasonable from the theoretical point of view. 

- Derogations 

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The  representative  of  Jaguar  Land  Rover  highlighted  that  Land  Rover  products  would 
need  a  derogation  for  small  volume  manufacturers  due  to  very  high  costs  of  CO2 
reductions and a specific use of vehicles (i.e. off-road). 

The participant from the UK Society of Motor Manufacturers and Traders (SMMT) also 
mentioned  that  the  diversity  of  the  market  should  be  preserved  and  the  case  for 
derogations (also based on other parameters than volume) should be made. The concern 
over impacts of abatement costs on small volume manufacturers was also expressed by 
the official from Department for Transport (UK) and a need to include these actors to the 
analysis was highlighted. 

T&E stressed that any derogation has a tendency to grow into a regulatory gap which can 
be  abused.  In  addition,  a  need  for  speed  limiters  for  LCVs  should  be  seriously 
considered.  LCVs  are  often  overloaded  and  raise  safety  concerns.  This  was  backed 
strongly  by  a  representative  of  German  NGOs.  The  official  from  the  Ministry  of 
Environment  (NL)  agreed  that  this  issue  should  be  analysed.  ACEA  mentioned  some 
concerns on the grounds of safety. The European Shippers Council highlighted that speed 
limiters should be able to adapt to traffic situation. 

In addition, a demand for inclusion of supercredits for low emitting vehicles (similar to 
the ones introduced in the CO2/cars regulation) was made.  

Finally,  ACEA  and  Ford  called  for  the  current  economic  situation  to  be  taken  into 
account, especially in view of current difficulties in getting financing. It was highlighted 
that  in  order  to  meet  the  targets  in  2012/15  investment  should  take  place  now.  In 
addition,  ACEA  representative  proposed  to  contribute  to  improvement  of  the  database 
used in the analysis. 

The  Chairman  concluded  the  meeting  and  invited  participants  to  send  their  written 
contributions in the coming weeks. 

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ANNEX IV: DISTRIBUTIONAL EFFECTS ON MANUFACTURERS 

Part A – Mass-based utility parameter (options 1, 2 and 5)40 

Figure 7 Estimate of absolute price increase for options 1, 2 and 5 with AMI = 0.0% 
p.a. (Source: Supporting study on light commercial vehicles)  

per manuf. - utility - m - slope 0%

per manuf. - utility - m - slope 20%

per manuf. - utility - m - slope 40%

per manuf. - utility - m - slope 60%

per manuf. - utility - m - slope 80%

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AMI = 0% / b1

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40 

Mazda (and to a lesser extent Hyundai for pan area) appears to be an outlier in this analysis. This 
is due to inclusion of pick-up SUVs with relatively high CO2 emissions as N-type vehicles in the 
JATO database. These vehicles are also included in the sales figures of other, mainly Japanese and 
Korean, manufacturers. 

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Figure 8 Estimate of relative price increase for options 1, 2 and 5 with AMI = 0.0% 
p.a. (Source: Supporting study on light commercial vehicles) 

per manuf. - utility - m - slope 0%

per manuf. - utility - m - slope 20%

per manuf. - utility - m - slope 40%

per manuf. - utility - m - slope 60%

per manuf. - utility - m - slope 80%

per manuf. - utility - m - slope 100%

per manuf. - utility - m - slope 120%

per manuf. - percentage red.

175 g/km - per manufacturer - utility - m / 
AMI = 0% / b1

2012/15

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p.a. (Source: Supporting study on light commercial vehicles) 

per manuf. - utility - m - slope 0%

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per manuf. - utility - m - slope 40%

per manuf. - utility - m - slope 60%

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Figure  10  Estimate  of  relative  price  increase  for options  1  and  5  with  AMI  =  1,5% 
p.a. (Source: Supporting study on light commercial vehicles) 

per manuf. - utility - m - slope 0%

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AMI = 1.5% / b1

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Figure  11  Estimate  of  absolute  price  increase  for  option  2  with  AMI  =  1,5%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - m - slope 0%

per manuf. - utility - m - slope 20%

per manuf. - utility - m - slope 40%

per manuf. - utility - m - slope 60%

per manuf. - utility - m - slope 80%

per manuf. - utility - m - slope 100%

per manuf. - utility - m - slope 120%

per manuf. - percentage red.

175 g/km - per manufacturer - utility - m / 
AMI = 1.5% / b1

2015

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61 

   EN 

 
 
 
 
 
 
 
 
 
Figure  12  Estimate  of  relative  price  increase  for  option  2  with  AMI  =  1,5%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - m - slope 0%

per manuf. - utility - m - slope 20%

per manuf. - utility - m - slope 40%

per manuf. - utility - m - slope 60%

per manuf. - utility - m - slope 80%

per manuf. - utility - m - slope 100%

per manuf. - utility - m - slope 120%

per manuf. - percentage red.

175 g/km - per manufacturer - utility - m / 
AMI = 1.5% / b1

2015

40%

35%

30%

25%

20%

15%

10%

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Part B- pan area-based utility parameter (options 3, 4 and 5) 

Figure  13  Estimate  of  absolute  price  increase  for  option  3  with  AMI  =  0.0%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - lxw - slope 0%

per manuf. - utility - lxw - slope 20%

per manuf. - utility - lxw - slope 40%

per manuf. - utility - lxw - slope 60%

per manuf. - utility - lxw - slope 80%

per manuf. - utility - lxw - slope 100%

per manuf. - utility - lxw - slope 120%

per manuf. - percentage red.

175 g/km - per manufacturer - utility - l x w / 
AMI = 0% / b1

2012/15

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62 

   EN 

 
 
 
 
 
 
 
 
 
Figure  14  Estimate  of  relative  price  increase  for  option  3  with  AMI  =  0.0%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - lxw - slope 0%

per manuf. - utility - lxw - slope 20%

per manuf. - utility - lxw - slope 40%

per manuf. - utility - lxw - slope 60%

per manuf. - utility - lxw - slope 80%

per manuf. - utility - lxw - slope 100%

per manuf. - utility - lxw - slope 120%

per manuf. - percentage red.

175 g/km - per manufacturer - utility - l x w / 
AMI = 0% / b1

2012/15

40%

35%

30%

25%

20%

15%

10%

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Figure 15 Estimate of absolute price increase for option 3 with AMI = 1,5% (Source: 
Supporting study on light commercial vehicles) 

per manuf. - utility - lxw - slope 0%

per manuf. - utility - lxw - slope 20%

per manuf. - utility - lxw - slope 40%

per manuf. - utility - lxw - slope 60%

per manuf. - utility - lxw - slope 80%

per manuf. - utility - lxw - slope 100%

per manuf. - utility - lxw - slope 120%

per manuf. - percentage red.

175 g/km - per manufacturer - utility - l x w / 
AMI = 1.5% / b1

2012

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63 

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Figure  16  Estimate  of  relative  price  increase  for  option  3  with  AMI  =  1,5%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - lxw - slope 0%
per manuf. - utility - lxw - slope 20%
per manuf. - utility - lxw - slope 40%
per manuf. - utility - lxw - slope 60%
per manuf. - utility - lxw - slope 80%
per manuf. - utility - lxw - slope 100%
per manuf. - utility - lxw - slope 120%
per manuf. - percentage red.

175 g/km - per manufacturer - utility - l x w / 
AMI = 1.5% / b1

2012

40%

35%

30%

25%

20%

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Figure  17  Estimate  of  absolute  price  increase  for  option  4  with  AMI  =  1,5%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - lxw - slope 0%
per manuf. - utility - lxw - slope 20%
per manuf. - utility - lxw - slope 40%
per manuf. - utility - lxw - slope 60%
per manuf. - utility - lxw - slope 80%
per manuf. - utility - lxw - slope 100%
per manuf. - utility - lxw - slope 120%
per manuf. - percentage red.

175 g/km - per manufacturer - utility - l x w / 
AMI = 1.5% / b1

2015

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64 

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Figure  18  Estimate  of  relative  price  increase  for  option  4  with  AMI  =  1,5%  p.a. 
(Source: Supporting study on light commercial vehicles) 

per manuf. - utility - lxw - slope 0%
per manuf. - utility - lxw - slope 20%
per manuf. - utility - lxw - slope 40%
per manuf. - utility - lxw - slope 60%
per manuf. - utility - lxw - slope 80%
per manuf. - utility - lxw - slope 100%
per manuf. - utility - lxw - slope 120%
per manuf. - percentage red.

175 g/km - per manufacturer - utility - l x w / 
AMI = 1.5% / b1

2015

40%

35%

30%

25%

20%

15%

10%

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Figure 19 Relative retail price increase – scenarios for the long-term target (Source: 
Supporting study on light commercial vehicles) 

Relative retail price increase 

No learning

Learning: s low penetration

Learning: fas t penetration

No learning

Learning: s low penetration

Learning: fas t penetration

Hybrid 

Extra strong 
downsizing 

35,0%

30,0%

25,0%

20,0%

15,0%

10,0%

5,0%

0,0%

e]
cl
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100

120

140

160

180

200

Target [g/km]

EN 

66 

   EN 

 
Table 5 Summary of the average costs for reaching the different 2020 target levels in 
the 6 different scenario variants - all relative to 2007 (Source: calculations based on 
supporting study) 

Absolute retail price increase relative to 2007 [€/vehicle] 

Extra strong downsizing 

Hybrid options 

Target 

No 
learning 

Learning: 
slow 
penetration

Learning: 
fast 
penetration

No 
learning 

Learning: 
slow 
penetration 

Learning: 
fast 
penetration

160(a) 

150 
140(a) 

135(a) 

125 

1599 

2175 

3066 

3512 

4403 

1499 

2049 

2907 

3335 

4193 

1420 

1954 

2797 

3219 

4062 

2155 

3030 

4584 

5360 

6914 

2004 

2840 

4354 

5111 

6625 

1899 

2703 

4179 

4917 

6393 

Relative retail price increase relative to 2007 [€/vehicle] 

Extra strong downsizing 

Hybrid options 

Target 

No 
learning 

Learning: 
slow 
penetration

Learning: 
fast 
penetration

No 
learning 

Learning: 
slow 
penetration 

Learning: 
fast 
penetration

160(a) 

150 
140(a) 
135(a) 

7,6% 

10.3% 

14,5% 

16,7% 

7,1% 

9.7% 

13,8% 

15,8% 

6,8% 

9.3% 

13,3% 

15,3% 

10,2% 

14.4% 

21,8% 

25,5% 

9,5% 

13.5% 

20,7% 

24,3% 

9,0% 

12.8% 

19,8% 

23,4% 

125 

20.9% 

19.9% 

19.3% 

32.9% 

31.5% 

30.4% 

(a) Values are obtained by linear interpolation which causes a certain overestimate. 

EN 

67 

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Table  6  (1)  Summary  of  fuel  savings  and  net  costs/benefits  for  the  different  2020 
target levels(b) at 4% discount rate (Source: calculations based on supporting study) 

Total user costs and benefits (discount rate of 4%) [€/vehicle]  

Extra strong downsizing 

Hybrid options 

Target  Discounted 
fuel saving 

No 
learning 

Learning: 
slow 
penetration

Learning: 
fast 
penetration

No 
learning

Learning: 
slow 
penetration 

Learning: 
fast 
penetration

160(a) 

150 

140(a) 

135(a) 

125 

3477

-1878 

4286

-2110 

5094

-2028 

5499

-1987 

6307

-1904 

-1978

-2237

-2188

-2163

-2114

-2057

-1322

-1473 

-2331

-1256

-1445 

-2297

-2279

-2245

-511

-138

607

-740 

-387 

318 

-1578

-1583

-915

-582

86

(b) Taking into account purchase price increase and fuel savings; assuming a fuel price of 
€1 per litre including taxes and a mileage of 300 000km over a 15 year lifetime. Negative 
numbers are savings. 

(2)  Summary  of  fuel  savings  and  net  costs/benefits  for  the  different  2020  target 
levels(b) at 10% discount rate (Source: calculations based on supporting study) 

Total user costs and benefits (discount rate of 12%) [€/vehicle] 

Extra strong downsizing 

Hybrid options 

Target  Discounted 
fuel saving 

No 
learning 

Learning: 
slow 
penetration

Learning: 
fast 
penetration

No 
learning

Learning: 
slow 
penetration 

Learning: 
fast 
penetration

160(a) 

150 

140(a) 

135(a) 

125 

2379

-779 

2932

-757 

3485

-419 

3762

-250 

4315

88 

-880

-883

-578

-426

-121

-958

-977

-224

98

-687

1099

-542

1599

-252

2599

-375 

-92 

869 

1350 

2311 

-479

-229

694

1155

2079

(b) Taking into account purchase price increase and fuel savings; assuming a fuel price of 
€1 per litre including taxes and a mileage of 300 000km over a 15 year lifetime. Negative 
numbers are savings. 

EN 

68 

   EN 

 
 
 
 
 
 
 
 
ANNEX V DESCRIPTION OF THE METHODOLOGY 

•  Estimates of costs and distributional impacts for vehicle manufacturers 

An ex-ante model developed by consultants analysed the distributional effects and costs 
among  manufacturers.  The  cost  model  used  in  this  supporting  study  was  based  on  cost 
curves representing different combinations of powertrain technologies. The methodology 
for  defining  cost  curves  was  based  on  information  collected  from  the  industry  on  the 
relative CO2 reduction potential (% reduction) and additional costs (€) for a large number 
of technological CO2 reduction options41 that can be applied to baseline N1 vehicles. For 
each  vehicle  segment  (defined  by  vehicle  class  and  fuel)  a  number  of  technology 
packages  was  assembled,  containing  a  combination  of  various  technology  options  for 
which  overall  reduction  potential  and  costs  were  estimated.  The  overall  relative  CO2 
reductions  were  then  applied  to  the  average  CO2  emission  per  segment  of  the  2002 
baseline  vehicles.  This  methodology  was  also  used  in  the  supporting  study  on  LCVs 
however, the cost curves were updated to mirror more recent reference data.42  

The starting point for the determination of cost curves were the 2002 reference vehicles, 
however  the  database  used  in  the  supportive  study  on  LCVs  provided  information  for 
2007  only.  To  obtain  2002  reference  data  that  would  be  consistent  with  the  2007 
averages  determined  from  the  database,  assumptions  on  the  development  of  CO2 
emissions in LCVs between 2002 and 2007 were made. Previous studies (see Annex I) 
have  suggested  that  in  the  period  from  2002  to  2006  manufacturers  have  applied  CO2 
reduction  technologies  to  vehicles.  In  addition  manufacturers  have  applied  some 
efficiency  improvements  to  M1  vehicles  in  the  context  of  the  voluntary  agreements 
covering these vehicles. As these agreements do not apply to LCVs it has been assumed 
that the amount of CO2 reduction measures applied in LCVs is smaller than in cars. The 
total reduction was set at 3.5% for petrol vehicles and 2.5% for diesel vehicles over the 
complete 2002-2007 period. 

In order to properly determine the maximum reduction potential available in the various 
LCV segments, the number of technology packages used to construct the cost curves has 
been  extended  from  4  to  5,  as  compared  with  the  previous  analysis.  The  updated  cost 
curves are provided in the figure 1. 

It is important to note that the analysis for the range of dates considered for the first step 
of  emission  reductions  is  based  on  the  static  cost  curves.  Possible  effects  of 
developments  in  technology,  learning  effects  and  costs  are  ignored  for  this  short  term 
horizon.  The  only  dynamic  element  in  this  short-term  analysis  is  the  autonomous  mass 
increase (AMI). 

•  For certain scenarios for the long-term target a linear approximation was performed. 
This is methodologically justified because the targets for which the intra/extrapolation 
was done are sufficiently close to the basis points (i.e. the target of 140 g/km in 2020 

41 

42 

The  methodology  was  developed  in  the  Supportive  study  carried  out  in  2006  [TNO  2006] 
Technological CO2 reduction options were presented in the Tables 8.2 and 8.3 of this study. 
For more information see the study: Assessment of options for CO2 legislation for LCVs, Chapter 
4 

EN 

69 

   EN 

                                                 
 
 
was  estimated  on  the  basis  of  modelled  scenarios  for  targets  of  150  g/km  and  125 
g/km,  whereas  160  g/km  on  the  basis  of  175  g/km  and  150  g/km).  In  addition,  13 
scenario runs in total were performed for short and long-term targets which allowed 
for a sufficient understanding of characteristics of the model. 

Figure  20  Estimated  cost  curves  for  emissions  reductions  from  light  commercial 
vehicles (Source: Supporting study on light commercial vehicles) 

9000

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N1 petrol - cost curves based on 5 packages

Class I

Class II

Class III

20

40

60

80

100

120

140

CO2 reduction [g/km]

N1 diesel - cost curves based on 5 packages

Class I

Class II

Class III

10

20

30

40

50

60

70

80

90

100

CO2 reduction [g/km]

In  the  ex-ante  assessment,  no  significant  variation  to  overall  segmentation  of  the  car 
market is expected. 

•  Dynamic modelling of economic and environmental impacts 

EN 

70 

   EN 

 
 
 
 
 
 
In  addition  to  the  modelling  of  cost  impacts  at  manufacturer  and  consumer  level, 
TREMOVE  runs  have  been  carried  out.  TREMOVE  is  a  transport  and  emissions 
simulation  model  developed  for  the  European  Commission.  It  is  designed  to  study  the 
effects of different transport and environment policies on the emissions of the transport 
sector. The model estimates the changes in transport demand, modal split, vehicle fleets, 
welfare level and emissions of air pollutants of different policy scenarios. The scenarios 
for  the  present  IA  report  have  been  modelled  using  the  latest  version  of  the  model 
TREMOVE 2.7, which covers all EU-27 Member States over the period 1995-2030 with 
yearly intervals. 

for 

contract 

the  development  of 

The details on the model structure and the baseline can be found in the final report of the 
service 
the  website 
http://www.tremove.org/. For the present report a variant of the 2.7 baseline scenario has 
been  used.  New  fuel  prices  for  the  EU  countries,  as  they  are  known  in  2008  were 
incorporated in this case. Also fuel taxes were updated according to the situation in 2008. 
This mainly involved updating values for non Euro-zone countries as their exchange rate 
to Euro have changed and thus TREMOVE values which are in Euros of year 2000 had 
to be updated. 

the  model  on 

EN 

71 

   EN 

ANNEX VI: ECONOMIC IMPACTS 

Figure 21 CO2 abatement costs for N-type vehicles (for AMI = 0.0% p.a.) as function 
of the target level and the oil price for a mass-based limit function with slope 60% 
(Source: supporting study)  

CO2 abatement costs 

100

50

0

25

-50

-100

-150

-200

-250

]
n
o
t
€/
[

s
t
s
o
c

t
n
e
m
e
t
a
b
a

50

75

100

125

150

discount rate = 4%
lifetime = 15 years
annual mileage = 20.000 km

oil price [€/bbl]

190
185
180
175
170
165
160
M1 - 130 g/km

mass-based limit
slope 60%
AMI = 0.0% p.a.

Figure 22 CO2 abatement costs for N1 vehicles (for AMI = 0.0% p.a.) as function of the 
target level and the oil price for a mass-based  limit function  with slope 100% (Source: 
supporting study)  

CO2 abatement costs 

150

100

50

0

25

-50

-100

-150

-200

-250

-300

]
n
o
t
[€/

s
t
s
o
c

t
n
e
m
e
t
a
b
a

50

75

100

125

150

discount rate = 4%
lifetime = 15 years
annual mileage = 20.000 km

oil price [€/bbl]

190
185
180
175
170
165
160
M1 - 130 g/km

mass-based limit
slope 100%
AMI = 0.0% p.a.

EN 

72 

   EN 

 
 
 
 
 
 
Table 7 Fuel savings for options 1,2 and long-term targets in 2020 and 2030 (Source: 
TREMOVE) 

scenario 

slope 

cap 

fuel 
price43 

Fuel savings 

Fuel savings 
share in total road 
transport fuel 
consumption 

2020 
[Mt] 

2030 
[Mt] 

slope 

cap 

short-term target 
and start date 

2020 
target 

175 g/km (2012) 

n/a 

175 g/km (2015) 

n/a 

175 g/km (2012) 

n/a 

60% 

100% 

no 

no 

basecase

3.15 

4.66 

0.92% 

1.22% 

basecase

3.28 

4.89 

0.96% 

1.28% 

60% 

50%  basecase

2.85 

4.15 

0.83% 

1.09% 

100% 

50%  basecase

2.85 

4.15 

0.83% 

1.09% 

60% 

60% 

100% 

60% 

100% 

no 

no 

no 

no 

no 

basecase

2.86 

4.55 

0.84% 

1.19% 

half 

half 

3.24 

4.84 

0.95% 

1.26% 

3.38 

5.07 

0.99% 

1.32% 

double 

2.98 

4.36 

0.87% 

1.15% 

double 

3.11 

4.59 

0.91% 

1.21% 

175g/km (2013) 

135g/km 

100% 

50%  basecase

4.54 

8.85 

1.33% 

2.32% 

175g/km (2014) 

140g/km 

100% 

50%  basecase

4.07 

8.19 

1.19% 

2.15% 

175g/km (2015) 

160g/km 

100% 

50%  basecase

3.18 

5.99 

0.93% 

1.57% 

175g/km (2015) 

150g/km 

100% 

50%  basecase

3.49 

7.02 

1.02% 

1.84% 

175g/km (2015) 

140g/km 

100% 

50%  basecase

3.80 

8.06 

1.11% 

2.11% 

175g/km (2015) 

135g/km 

100% 

50%  basecase

3.96 

8.57 

1.16% 

2.25% 

175g/km (2015) 

125g/km 

100% 

50%  basecase

4.27 

9.60 

1.25% 

2.52% 

175g/km (2013) 

135g/km 

100% 

175g/km (2014) 

140g/km 

100% 

175g/km (2015) 

160g/km 

100% 

175g/km (2015) 

150g/km 

100% 

175g/km (2015) 

140g/km 

100% 

175g/km (2015) 
175g/km (2015) 

135g/km 

100% 

125g/km 

100% 

no 

no 

no 

no 

no 

no 

no 

basecase

4.62 

8.91 

1.35% 

2.34% 

basecase

4.15 

8.23 

1.22% 

2.16% 

basecase

3.26 

6.02 

0.95% 

1.58% 

basecase

3.57 

7.05 

1.04% 

1.85% 

basecase

3.88 

8.09 

1.14% 

2.12% 

basecase

4.04 

8.61 

1.18% 

2.26% 

basecase

4.35 

9.64 

1.27% 

2.53% 

Note: Shaded scenarios are estimated using linear interpolation/extrapolation. 

43 

Fuel prices used in TREMOVE model are country specific and for all countries are expressed in 
Euro  of  year  2000.  As  an  example  of  a  baseline,  in  Germany  the  assumed  fuel  price  increases 
between  2000  and  2020  are  as  follows:  pure  biodiesel  +27%,  diesel  +26%,  ethanol  +16%, 
gasoline +12%, CNG +4% and LPG +17%. 

EN 

73 

   EN 

                                                 
Table  8  Savings  on  fuel  spending  by  end-users  (incl.  all  taxes)  in  2010-2020  and 
2010-2030 (Source: TREMOVE) 

 scenario 

short-term target 

2020 
target 

slope 

cap 

fuel 
price44 

savings in M€ 2000 

2010 to 2020 

2010 to 2030 

175 g/km (2012) 

n/a 

60% 

100% 

no 

no 

basecase

-15 677 

basecase

-16 436 

60% 

50%  basecase

-14 122 

100%  50%  basecase

-14 155 

175 g/km (2015) 

n/a 

60% 

no 

basecase

-12 243 

175 g/km (2012) 

n/a 

60% 

100% 

60% 

100% 

no 

no 

no 

no 

half 

half 

double 

double 

-13 337 

-14 014 

-20 086 

-21 005 

175g/km (2013) 

135g/km  100%  50%  basecase

-15 656 

175g/km (2014) 

140g/km  100%  50%  basecase

-13 891 

175g/km (2015) 

160g/km  100%  50%  basecase

-11 613 

175g/km (2015) 

150g/km  100%  50%  basecase

-11 953 

175g/km (2015) 

140g/km  100%  50%  basecase

-12 294 

175g/km (2015) 

135g/km  100%  50%  basecase

-12 464 

175g/km (2015) 

125g/km  100%  50%  basecase

-12 804 

175g/km(2013) 

135g/km  100% 

175g/km (2014) 

140g/km  100% 

175g/km (2015) 

160g/km  100% 

175g/km (2015) 

150g/km  100% 

175g/km (2015) 

140g/km  100% 

175g/km (2015) 
175g/km (2015) 

135g/km  100% 

125g/km  100% 

no 

no 

no 

no 

no 

no 

no 

basecase

-16 250 

basecase

-14 459 

basecase

-12 155 

basecase

-12 496 

basecase

-12 837 

basecase

-13 007 

basecase

-13 349 

-41 952 

-44 071 

-37 535 

-37 611 

-37 228 

-33 419 

-35 265 

-58 020 

-60 673 

-60 721 

-55 294 

-42 452 

-47 392 

-52 331 

-54 801 

-59 741 

-61 748 

-56 286 

-43 395 

-48 345 

-53 295 

-55 770 

-60 721 

Note: Negative number denotes savings, positive additional costs. Saving (costs) in this table are 
discounted (4% rate) and are expressed in Euros of year 2000. 

EN 

74 

   EN 

Table  9  Effect  on  new  LCV  sales  in  2020  and  2030  for  options  1,  2  and  long-term 
targets (Source: TREMOVE) 

scenario 

short-term 
target 

2020 
target 

slope 

cap 

fuel 
price44 

Total N1 market 
change [%] from 
2005 levels 

Change in 
vehicle sales 

in 2020 

in 2030 

in 2020 

in 2030 

baseline scenario 

+18.7%  +19.2% 

175g/km (2012) 

n/a 

60% 

100% 

no 

no 

basecase

+17.4%  +17.6% 

-1.16% 

-1.34% 

basecase

+17.2%  +17.3% 

-1.33% 

-1.59% 

60%  50% basecase

+17.8%  +18.1% 

-0.83% 

-0.87% 

100%  50% basecase

+17.9%  +18.3% 

-0.69% 

-0.75% 

175g/km (2015) 

n/a 

60% 

no 

basecase

+17.6%  +17.6% 

-0.98% 

-1.34% 

175g/km (2013)  135g/km  100%  50% basecase

+18.4%  +16.9% 

-0.25% 

-1.88% 

175g/km (2014)  140g/km  100%  50% basecase

+18.8%  +17.3%  +0.01% 

-1.58% 

175g/km (2015)  160g/km  100%  50% basecase

+19.6%  +18.9%  +0.71% 

-0.23% 

175g/km (2015)  150g/km  100%  50% basecase

+19.2%  +18.1%  +0.42% 

-0.92% 

175g/km (2015)  140g/km  100%  50% basecase

+18.9%  +17.2%  +0.13% 

-1.62% 

175g/km (2015)  135g/km  100%  50% basecase

+18.7%  +16.8% 

-0.01% 

-1.97% 

175g/km (2015)  125g/km  100%  50% basecase

+18.4%  +16.0% 

-0.31% 

-2.66% 

175g/km (2013)  135g/km  100% 

175g/km (2014)  140g/km  100% 

175g/km (2015)  160g/km  100% 

175g/km (2015)  150g/km  100% 

175g/km (2015)  140g/km  100% 

175g/km (2015)  135g/km  100% 
175g/km (2015) 

125g/km  100% 

no 

no 

no 

no 

no 

no 

no 

basecase

+19.6%  +18.7%  +0.70% 

-0.37% 

basecase

+19.3%  +18.2%  +0.48% 

-0.78% 

basecase

+19.6%  +19.0%  +0.74% 

-0.11% 

basecase

+19.2%  +18.2%  +0.42% 

-0.84% 

basecase

+18.9%  +17.3%  +0.10% 

-1.57% 

basecase

+18.7%  +16.9% 

-0.06% 

-1.93% 

basecase

+18.3%  +16.0% 

-0.38% 

-2.66% 

Note: Shaded scenarios are estimated using linear interpolation/extrapolation 

EN 

75 

   EN 

 
 
Table 10 Costs to end-users(a) in period 2010-2020 (Source: TREMOVE) 

scenario 

short-term 
target 

2020 
target 

slope 

cap 

fuel 
price44 

Additional 
costs 
[M€ 2000] 

Savings per 
1 € invested 

[€ 2000] 

175g/km (2013)  135g/km 

100%  50%  basecase

-4 831 

175g/km (2014)  140g/km 

100%  50%  basecase

-4 438 

175g/km (2015)  160g/km 

100%  50%  basecase

-4 097 

175g/km (2015)  150g/km 

100%  50%  basecase

-4 061 

175g/km (2015)  140g/km 

100%  50%  basecase

-4 025 

175g/km (2015)  135g/km 

100%  50%  basecase

-4 007 

175g/km (2015)  125g/km 

100%  50%  basecase

-3 971 

175g/km(2013) 

135g/km 

100% 

175g/km (2014)  140g/km 

100% 

175g/km (2015)  160g/km 

100% 

175g/km (2015)  150g/km 

100% 

175g/km (2015)  140g/km 

100% 

175g/km (2015)  135g/km 
175g/km (2015) 

125g/km 

100% 

100% 

no 

no 

no 

no 

no 

no 

no 

basecase

-4 658 

basecase

-4 291 

basecase

-3 987 

basecase

-3 943 

basecase

-3 900 

basecase

-3 878 

basecase

-3 834 

1.45 

1.47 

1.55 

1.51 

1.49 

1.47 

1.45 

1.40 

1.42 

1.49 

1.46 

1.44 

1.42 

1.40 

 (a) Costs in this table are discounted (4% rate) and are expressed in Euros of year 2000 

EN 

76 

   EN 

Note:  Negative  number  denotes  savings,  positive  additional  costs.  Saving  (costs)  in  this  table  are 
discounted (4% rate) and are expressed in Euros of year 2000 

Table 11 Costs to end-users(a) in period 2010-2030 (Source: TREMOVE) 

scenario 

short-term target 

2020 
target 

slope 

cap 

fuel 
price44 

Additional 
costs [M€ 2000] 

Savings per
1 € invested 

[€ 2000] 

175g/km (2013) 

135g/km  100%  50%  basecase

-10 442 

175g/km (2014) 

140g/km  100%  50%  basecase

-10 519 

175g/km (2015) 

160g/km  100%  50%  basecase

-12 232 

175g/km (2015) 

150g/km  100%  50%  basecase

-11 138 

175g/km (2015) 

140g/km  100%  50%  basecase

-10 044 

175g/km (2015) 

135g/km  100%  50%  basecase

175g/km (2015) 

125g/km  100%  50%  basecase

-9 497 

-8 403 

175g/km(2013) 

135g/km  100% 

175g/km (2014) 

140g/km  100% 

175g/km (2015) 

160g/km  100% 

175g/km (2015) 

150g/km  100% 

175g/km (2015) 

140g/km  100% 

175g/km (2015) 
175g/km (2015) 

135g/km  100% 

125g/km  100% 

no 

no 

no 

no 

no 

no 

no 

basecase

-9 699 

basecase

-10 037 

basecase

-12 199 

basecase

-10 978 

basecase

basecase

basecase

-9 758 

-9 148 

-7 927 

1.21 

1.23 

1.40 

1.31 

1.24 

1.21 

1.16 

1.19 

1.22 

1.39 

1.29 

1.22 

1.20 

1.15 

(a) Costs in this table are discounted (4% rate) and are expressed in Euros of year 2000 
Note:  Negative  number  denotes  savings,  positive  additional  costs.  Saving  (costs)  in  this  table  are 
discounted (4% rate) and are expressed in Euros of year 2000 

Table 12 Results of price sensitivity runs 

175 gCO2/km (no cap) 

WtW GHG abatement 
2010 >> 2020 [Mt CO2 eq.] 

Abatement costs 
[€/t CO 2 eq.] 

60% slope 

base case 

100% slope 

base case 

2012 

60% slope 

100% slope 

half 

half 

60% slope 

double 

100% slope 

double 

73 

77 

75 

78 

71 

74 

-12.5 

-9.4 

12.9 

15.7 

-62.9 

-59.6 

EN 

77 

   EN 

Table 13 Comparison of marginal costs per manufacturer for a 175 g/km target in 
2012  /  2015  with  different  slope  values  for  N-type  vehicles  (assumed  AMI  =  0.0% 
p.a.)  with  the  marginal  costs  per  manufacturer  for  meeting  the  130  g/km  target 
based on a 60% slope in M1 category. (Source: supporting study on LCVs) 

EN 

78 

   EN 

 
 
ANNEX VII: SOCIAL EQUITY AND DISTRIBUTIONAL EFFECTS WITHIN 
THE FLEET 

Table 14 Relative retail price increase (%) per segment for alternative policy options 
(Source: Supporting study on light commercial vehicles)  

Diesel class I 

Diesel class II 

Diesel class III  Sales-weighted average

Options 1 & 2 : 175 target in 2012/2015; utility parameter – mass; AMI = 0 

Slope 60% 

Slope 80% 

Slope 100% 

3.6% 

4.4% 

5.2% 

5.0% 

5.1% 

5.2% 

6.3% 

5.8% 

5.4% 

Option 1: 175 target in 2012; utility parameter – mass; AMI = 1.5% 

Slope 60% 

Slope 80% 

Slope 100% 

5.2% 

6.2% 

7.3% 

7.4% 

7.5% 

7.7% 

8.9% 

8.3% 

7.9% 

Option 2: 175 target in 2015; utility parameter – mass; AMI = 1.5 % 

Slope 60% 

Slope 80% 

Slope 100% 

6.2% 

7.3% 

8.6% 

9.0% 

9.2% 

9.4% 

10.7% 

10.0% 

9.5% 

Options 3 & 4 : 175 target in 2012/2015; utility parameter – pan area; AMI = 0 

Slope 60% 

Slope 80% 

Slope 100% 

3.0% 

3.4% 

3.9% 

5.0% 

5.0% 

5.0% 

7.2% 

6.9% 

6.6% 

Option 3: 175 target in 2012; utility parameter – pan area; AMI = 1.5% 

Slope 60% 

Slope 80% 

Slope 100% 

4.3% 

4.8% 

5.5% 

7.3% 

7.4% 

7.4% 

9.9% 

9.6% 

9.3% 

Option 4: 175 target in 2015; utility parameter – pan area; AMI = 1.5 % 

Slope 60% 

Slope 80% 

Slope 100% 

5.1% 

5.8% 

6.5% 

8.7% 

8.8% 

8.9% 

11.8% 

11.4% 

11.1% 

5.8% 

5.5% 

5.4% 

8.3% 

8.0% 

7.9% 

9.9% 

9.6% 

9.5% 

6.3% 

6.1% 

6.0% 

8.8% 

8.7% 

8.5% 

10.5% 

10.3% 

10.2% 

EN 

79 

   EN 

 
ANNEX VIII: ENVIRONMENTAL IMPACTS 

Table 15 Well-to-wheel GHG reductions in year 2020 and 2030 for options 1, 2 and long-
term targets (Source: TREMOVE) 

scenario 

slope 

cap 

fuel 
price44 

[Mt CO2 
eq.] 

GHG 
abatement 

short-term target 
and start date 

2020 
target 

175 g/km (2012) 

n/a 

60% 

no 

basecase

11.4 

100% 

no 

basecase

11.9 

60% 

50%  basecase

10.3 

100% 

50%  basecase

10.3 

175 g/km (2015) 

n/a 

60% 

no 

basecase

10.4 

175 g/km (2012) 

n/a 

60% 

100% 

60% 

100% 

no 

no 

no 

no 

half 

half 

11.7 

12.2 

double 

10.8 

double 

11.2 

175g/km (2013) 

135g/km 

100% 

50%  basecase

175g/km (2014) 

140g/km 

100% 

50%  basecase

175g/km (2015) 

160g/km 

100% 

50%  basecase

175g/km (2015) 

150g/km 

100% 

50%  basecase

175g/km (2015) 

140g/km 

100% 

50%  basecase

175g/km (2015) 

135g/km 

100% 

50%  basecase

175g/km (2015) 

125g/km 

100% 

50%  basecase

175g/km (2013) 

135g/km 

100% 

175g/km (2014) 

140g/km 

100% 

175g/km (2015) 

160g/km 

100% 

175g/km (2015) 

150g/km 

100% 

175g/km (2015) 

140g/km 

100% 

175g/km (2015) 

135g/km 

100% 

175g/km (2015) 

125g/km 

100% 

no 

no 

no 

no 

no 

no 

no 

basecase

basecase

basecase

basecase

basecase

basecase

basecase

16.2 

14.7 

11.5 

12.6 

13.8 

14.3 

15.4 

16.5 

15.0 

11.8 

12.9 

14.1 

14.6 

15.7 

Note: Shaded scenarios are estimated using linear interpolation/extrapolation 

Contribution to 
the Effort 
Sharing 
Decision 

GHG 
abatement 

[Mt CO2 
eq.] 

2020 

2030 

4.2% 

4.4% 

3.8% 

3.8% 

3.9% 

4.4% 

4.6% 

4.0% 

4.2% 

6.0% 

5.5% 

4.3% 

4.7% 

5.1% 

5.3% 

5.8% 

6.1% 

5.6% 

4.4% 

4.8% 

5.2% 

5.4% 

5.9% 

16.9 

17.7 

15.0 

15.0 

16.5 

17.5 

18.3 

15.8 

16.6 

32.1 

29.6 

21.7 

25.4 

29.1 

31.0 

34.8 

32.2 

29.8 

21.8 

25.5 

29.3 

31.1 

34.9 

EN 

80 

   EN 

Table 16 Well-to-wheel cumulative GHG reductions in the period from 2010 to 2020 and 
2010 to 2030 for options 1,2 and long-term targets (Source: TREMOVE) 

slope 

cap 

fuel price44 

GHG 
abatement [Mt 
CO2 eq.] 

GHG 
abatement [Mt 
CO2 eq.] 

2010 >> 2020 

2010 >> 2030 

scenario 

short-term target 
and start date 

2020 
target 

175 g/km (2012) 

n/a 

175 g/km (2015) 

n/a 

175 g/km (2012) 

n/a 

60% 

100% 

60% 

100% 

60% 

60% 

100% 

60% 

100% 

175g/km (2013) 

135g/km 

100% 

175g/km (2014) 

140g/km 

100% 

175g/km (2015) 

160g/km 

100% 

175g/km (2015) 

150g/km 

100% 

175g/km (2015) 

140g/km 

100% 

175g/km (2015) 

135g/km 

100% 

175g/km (2015) 

125g/km 

100% 

175g/km (2013) 

135g/km 

100% 

175g/km (2014) 

140g/km 

100% 

175g/km (2015) 

160g/km 

100% 

175g/km (2015) 

150g/km 

100% 

175g/km (2015) 

140g/km 

100% 

175g/km (2015) 

135g/km 

100% 

175g/km (2015) 

125g/km 

100% 

no 

no 

50% 

50% 

no 

no 

no 

no 

no 

50% 

50% 

50% 

50% 

50% 

50% 

50% 

no 

no 

no 

no 

no 

no 

no 

basecase 

basecase 

basecase 

basecase 

basecase 

half 

half 

double 

double 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

73 

77 

67 

67 

60 

75 

78 

71 

74 

81.6 

71.7 

59.1 

61.7 

64.3 

65.6 

68.2 

84.1 

74.1 

61.4 

64.0 

66.6 

67.9 

70.5 

221 

231 

199 

199 

201 

228 

238 

209 

219 

342 

311 

237 

267 

297 

312 

342 

347 

316 

241 

271 

302 

317 

347 

Note: Shaded scenarios are estimated using linear interpolation/extrapolation 

Table 17 Cumulative GHG abatement costs in 2010 to 2020 and 2010 to 2030 for options 
1, 2 and long-term targets (Source: TREMOVE) 

scenario 

short-term 
target and start 
date 

2020 
target 

175 g/km(2012) 

n/a 

slope 

cap 

fuel 
price44 

GHG abatement costs 
€/tCO 2 in € 2000 

2010 >> 2020 

2010 >> 2030 

60% 
100% 

no 
no 

basecase 
basecase 

-13.5 
-10.2 

-9.3 
-5.4 

EN 

81 

   EN 

175 g/km(2015) 

n/a 

175 g/km(2012) 

n/a 

175g/km (2013) 

135g/km 

175g/km (2014) 

140g/km 

175g/km (2015) 

160g/km 

175g/km (2015) 

150g/km 

175g/km (2015) 

140g/km 

175g/km (2015) 

135g/km 

175g/km (2015) 

125g/km 

175g/km (2013) 

135g/km 

175g/km (2014) 

140g/km 

175g/km (2015) 

160g/km 

175g/km (2015) 

150g/km 

175g/km (2015) 

140g/km 

175g/km (2015) 

135g/km 

175g/km (2015) 

125g/km 

60% 
100% 

60% 

60% 
100% 
60% 
100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

50% 
50% 

no 

no 
no 
no 
no 

50% 

50% 

50% 

50% 

50% 

50% 

50% 

no 

no 

no 

no 

no 

no 

no 

basecase 
basecase 

basecase 

half 
half 
double 
double 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

basecase 

-20.2 
-23.2 

-13.5 

13.9 
17.0 
-68.1 
-64.4 

-33.4 

-34.7 

-38.9 

-36.9 

-35.1 

-34.2 

-32.6 

-31.3 

-32.4 

-36.3 

-34.4 

-32.7 

-31.9 

-30.4 

Note: Shaded scenarios are estimated using linear interpolation/extrapolation. 

-17.2 
-19.9 

-9.8 

24.2 
27.8 
-78.1 
-73.2 

-23.9 

-25.5 

-34.9 

-29.6 

-25.4 

-23.7 

-20.6 

-22.4 

-24.4 

-34.2 

-28.9 

-24.6 

-22.8 

-19.6 

EN 

82 

   EN 

Table  18  Reduction  of  emissions  of  other  pollutants  for  modelled  scenarios  (Source 
TREMOVE) 

scenario 

short-term 
target and 
start date 

175g (2014) 

175g (2015) 

175g (2015) 

175g (2014) 

175g (2015) 

175g (2015) 

2020 
target 

140g/k
m 

150g/k
m  

125g/k
m  

140g/k
m 

150g/k
m 

125g/k
m 

scenario 

short-term 
target and 
start date 

175g (2014) 

175g (2015) 

175g (2015) 

175g (2014) 

175g (2015) 

175g (2015) 

2020 
target 

140g/k
m 

150g/k
m  

125g/k
m  

140g/k
m 

150g/k
m 

125g/k
m 

slope 

cap 

fuel 
price44 

well-to-wheel changes from the baseline scenario 
in year 2020 

PM 

SO2 

VOC 

NOX 

TOFP 

100
% 

100
% 

100
% 

100
% 

100
% 

100
% 

50%  basecase

-0.63% 

-1.13% 

-0.47% 

-0.36% 

-0.35% 

50%  basecase

-0.54% 

-0.97% 

-0.41% 

-0.31% 

-0.30% 

50%  basecase

-0.66% 

-1.19% 

-0.50% 

-0.38% 

-0.37% 

no 

basecase

-0.65% 

-1.16% 

-0.49% 

-0.37% 

-0.36% 

no 

basecase

-0.56% 

-1.00% 

-0.42% 

-0.31% 

-0.31% 

no 

basecase

-0.68% 

-1.22% 

-0.51% 

-0.38% 

-0.37% 

slope 

cap 

fuel 
price44 

well-to-wheel changes from the baseline scenario 
in year 2030 

PM 

SO2 

VOC 

NOX 

TOFP 

100
% 

100
% 

100
% 

100
% 

100
% 

100
% 

50%  basecase

-1.33% 

-2.07% 

-1.16% 

-0.82% 

-0.83% 

50%  basecase

-1.13% 

-1.78% 

-0.99% 

-0.70% 

-0.70% 

50%  basecase

-1.57% 

-2.43% 

-1.38% 

-0.97% 

-0.98% 

no 

basecase

-1.34% 

-2.09% 

-1.17% 

-0.82% 

-0.83% 

no 

basecase

-1.14% 

-1.80% 

-1.00% 

-0.70% 

-0.71% 

no 

basecase

-1.57% 

-2.44% 

-1.38% 

-0.97% 

-0.99% 

Figure  23  Influence  of  the  excess  emissions  premium  on  the  average  CO2  from  LCVs 
(Source:  technical  compliance  costs  from  supporting  study;  own  calculations  assuming  that 
emission improvement stops when the marginal abatement cost is equal to the premium) 

EN 

83 

   EN 

 
 
Influence of the excess emissions premium 
on the average CO2 level
175g/km, mass, AMI=0

]

m
k
/
.
g
[
e
g
a
r
e
v
a
2
O
C

t
e
e
l
F

177

176

175

80

90

100

110

120

130

140

150

160

Excess emissions premium [€/(g/km)]

EN 

84 

   EN