Proposal for a Directive of the European Parliament and of the Council amending Directive 97/68/EC as regards the provisions for engines placed on the market under the flexibility scheme SEC(2010)828 SEC(2010)829 (Text with EEA relevance)
Date: 2010-07-07
Institutions: European Commission
Subjects: agricultural vehicle, approximation of laws, atmospheric pollutant, motor vehicle, pollution control measures, technical regulations

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EUROPEAN COMMISSION 

Brussels, 7.7.2010 
COM(2010)362 final 

2010/0195 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Directive 97/68/EC as regards the provisions for engines placed on the market 
under the flexibility scheme 

SEC(2010)828 
 SEC(2010)829 

(Text with EEA relevance) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Directive  97/68/EC  on  the  approximation  of  the  laws  of  the  Member  States  relating  to 
measures against the emission of gaseous and particulate pollutants from internal combustion 
engines to be installed in non-road mobile machinery (hereafter “the Directive”) regulates the 
maximum exhaust emissions carbon oxide (CO), hydrocarbons (HC), nitrogen oxides (NOx) 
and particulates (PM) from diesel engines installed in construction, agricultural and forestry 
machinery,  railcars  &  locomotives,  inland  waterway  vessels,  constant  speed  engines  and 
small petrol engines used in different types of machinery. 

The  Directive  foresees  emissions  limit  stages  of  increasing  stringency  with  corresponding 
compliance  dates.  Manufacturers  must  ensure  that  new  engines  comply  with  these  limits  in 
order that they can be placed on the market. 

Directive  2004/26/EC1  introduced  the  current  applicable  stage  of  emission  limits  for  the 
majority of diesel engines referred to as Stage III A. These limits will be replaced by the more 
stringent Stage III B limits progressively as of 1st January 2011. The type approval period for 
these  engines  has  started  from  1st  January  2010.  A  great  diversity  of  machinery  production 
(approximately 1500 companies in the EU) is affected. 

To  comply  with  Stage  III  B  limits,  current  engines  will  need  to  be  substantially  modified. 
Changes to the configuration, size or weight of engines have a knock-on effect for Original 
Equipment  Manufacturers  (OEM)  who  will  have  to  adapt  completely  the  design  of  their 
machines in order to accommodate the modified engines. This process can only start once the 
engine is fully developed. Technical solutions for complying III B engines are not in general 
yet  finalised.  Thus,  OEMs  are  not  in  a  position  to  fully  redesign  the  machinery  where  the 
engine is to be installed. While for some of them, the Stage III B emissions requirements will 
not  pose  very  significant  problems,  in  other  non-road  mobile  machinery  a  Stage  III  B 
compliant engine is far from being finalised and substantial further research and technological 
development is needed to ensure that machinery can be placed on the market with compliant 
III B engines.  

Compliance  costs  for  manufacturers  to  cope  with  the  new  emission  limits  are  significant. 
These costs include for example research and development costs, equipment redesign costs, 
after treatment devices costs, documentation and labelling costs, etc. 

From  autumn  2008  onwards  most  of  the  Union  based  industry  producing  non-road  mobile 
machinery has been unexpectedly and severely hit by the global financial and economic crisis. 
Namely construction equipment and agricultural machinery are heavily affected. For railcars 
the crisis has negative impacts, however, less severe. In general, sudden falls in sales caused a 
large  decrease  in  income  and  available  capital  to  finance  the  necessary  technology  research 
and  development  for  machinery  with  Stage  III  B  compliant  engines  in  all  power  categories 
and applications within the time limits in the Directive. 

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OJ L 225, 25.6.2004, p.3 

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Directive  2004/26/EC  also  introduced  the  so-called  flexibility  scheme  to  facilitate  the 
transition  between  the  different  emission  stages.  The  flexibility  scheme  allows  the  OEM  to 
place  on  the  market,  during  the  period  between  two  successive  stages  of  exhaust  emissions 
limit values, a limited number of non-road mobile machines which are fitted with engines that 
still  comply  with  the  exhaust  emission  limits  of  the  previous  stage.  The  flexibility  scheme 
applies to compression ignition (diesel) engines used in construction, agricultural and forestry 
machinery,  generator  sets  and  pumps  using  constant  speed  engines,  but  not  to  locomotives, 
railcars and inland waterway vessels. It allows the OEM either to place on the market (1) for 
each engine power category a limited number of machines not exceeding 20% of the OEM's 
annual sales of machinery (calculated as the average machinery sales in the EU of the latest 5 
years) or (2) a fixed number of machines as stipulated in the Directive. This second option is 
intended for smaller enterprises producing lower volumes of engines. 

It  is  proposed  to  modify  the  provisions  of  the  flexibility  scheme  to  further  mitigate  the 
economic costs of the transition of emission Stages III A to III B by extending its application 
for  some  type  of  non-road  mobile  machinery  while  maintaining  the  entry  into  force  of  the 
exhaust  emission  limit  Stage  III  B  to  preserve  the  objective  of  the  Directive  to  reduce 
emissions  of  gaseous  and  particulate  pollutants  in  the  Union.  The  Impact  Assessment 
accompanying this proposal provides detailed information on the different options which have 
been  assessed  in  order  to  mitigate  the  impact  of  the  economic  crises  on  OEMs.  The 
assessment concluded that manufacturers will not be able to place in the near future Stage III 
B  compliant  locomotives  on  the  market,  as  more  research  is  required,  and  consequently 
extending  the  proposed  flexibility  measures  to  engines  used  in  locomotives  did  not  appear 
relevant.  In  2010  intensive  discussions  took  place  with  experts  from  industry  and  Member 
States  to  assess  the  situation  for  locomotives,  which  had  over  time  evolved.  It  allows  the 
Commission to conclude that some engine manufacturers have progressed in the meantime in 
developing compliant IIIB engines for locomotives while OEMs will yet not be entirely ready 
to  place  III  B  compliant  locomotives  on  the  market  by  1st  January  2012  as  foreseen  in  the 
Directive. Therefore it appeared necessary to apply the flexibility scheme also to locomotives. 
The  analyses  concluded  that  this  extension  will  have  a  very  limited  impact  on  the 
environment, while at the same time it will allow railway companies to realise the necessary 
investments.  

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Representatives  of  Member  States  and  Industry  stakeholders  have  been  consulted  on  the 
proposal through the Group of Experts on Machinery Emissions under the Directive (GEME). 
In addition the Commission carried out between May and June 2009 an in-depth consultation 
of  Member  States  authorities  and  all  relevant  stakeholders,  i.e.  industry,  environmental 
organisations,  workers  associations.  The  proposal  takes  into  account  a  Technical  Review  of 
the Directive2 by the Joint Research Centre (JRC) which includes, inter alia, an evaluation of 
the need to amend the provisions of the flexibility scheme; an Impact Assessment study by an 
external consultant3 to assess the impacts of the proposed policy options as laid down in the 
draft Technical Review of JRC, two complementary studies on the impacts for the rail sector 

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The draft final report of the Technical Review is available on the NRMM web page at the Europa website : 
http://ec.europa.eu/enterprise/mechan_equipment/emissions/2007tecrew_dfr.pdf  
The  final  report  of  the  IA  study  by  ARCADIS  N.V.  is  available  on  the  NRMM  web  page  at  the  Europa  website: 
http://ec.europa.eu/enterprise/mechan_equipment/emissions/impactassessment/nrmm_iastudy_fnrep.pdf  

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(railcars,  locomotives)  and  the  impacts  of  the  options  of  the  Technical  Review  of  JRC, 
including consequences of an amendment of the flexibility scheme for SMEs4. 

A detailed Impact Assessment accompanying this proposal has been carried out on the basis 
of the technical studies and the stakeholder consultation. It covers the different scenarios for 
engines covered by the existing flexibility scheme and identifies the need to include railcars. 
In addition to the conclusions of the Impact Assessment locomotives have been added to the 
flexibility scheme. 

the 

The  Impact  Assessment  analyses  different  options  ranging  from  the  implementation  of  a 
scrapping  scheme,  variations  of 
the  allowed 
percentage/number of engines to the set-up of a trading system whereby firms that would not 
use  the  entire  flexibility  could  sell  their  flexibility  rights  to  firms  that  need  additional 
flexibility.  The  use  of  a  scrapping  scheme  has  been  discarded  as  it  is  not  suitable  to  assist 
OEMs in financing R&D to make Stage III B machinery available. The set-up of a flexibility 
trading  system  was  considered  as  a  too  complex  system  in  a  short  time  scale  and  thus 
disproportionate to the expected achievements 

flexibility  scheme  as 

regards 

The option to increase the existing flexibility scheme and enlarge it to sectors not yet included 
has been considered as the best option balancing the environmental impact and an economic 
benefit in saved compliance costs for a limited period of time. 

3. 

LEGAL BASIS 

The aim of Directive 97/68/EC, as well as this proposed amendment, is to contribute to the 
smooth  functioning  of  the  internal  market  for  engines  to  be  installed  in  non-road  mobile 
machinery while protecting human health and the environment. The legal basis is thus Article 
114 of the Treaty. 

4. 

AMENDMENTS 

The proposal foresees the following amendments to Directive 97/68/EC: 

•  An increase of the percentage of the number of engines used for application in land based 
machines, placed on the market under the flexibility scheme in each engine category from 
20% to 50% of the OEM’s annual sales of equipment and an adaptation of the maximum 
number  of  engines  that  may  be  placed  on  the  market  under  the  flexibility  scheme  as  an 
optional alternative, in the period between emission Stage III A to emission Stage III B. 

•  An  inclusion  of  engines  used  for  the  propulsion  of  railcars  and  locomotives  in  the 
flexibility scheme providing the possibility for the OEM to place on the market a limited 
number of engines under the flexibility scheme. 

•  These measures will expire on 31 December 2013. 

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http://ec.europa.eu/enterprise/mechan_equipment/emissions/projstudies.htm 

The additional IA study on rail and inland waterway sector is available on the NRMM web page at the Europa web site : 

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5. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Union’s budget. 

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2010/0195 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

amending Directive 97/68/EC as regards the provisions for engines placed on the market 
under the flexibility scheme 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission5, 

Having regard to the opinion of the Economic and Social Committee6, 

Having regard to the opinion of the Committee of the Regions7, 

Acting in accordance with the procedure laid down in Article 294 of the Treaty8, 

Whereas: 

(1) 

(2) 

(3) 

Directive  97/68/EC9  concerns  exhaust  emissions  from  engines  installed  in  non-road 
mobile  machinery.  The  current  emission  limits  applicable  to  type  approval  of  the 
majority of compression ignition engines under Stage III A are to be replaced by the 
more  stringent  limits  under  Stage III  B.  Those  limits  apply  from  1s  January  2010  as 
regards the type approval for those engines and from 1 January 2011 with regard to the 
placing on the market. 

The transition to Stage III B involves a step change in technology requiring significant 
implementation  costs  for  redesigning  the  engines  and  for  developing  advanced 
technical solutions. The transition occurs at the same time when industry faces severe 
economic difficulties. 

Directive  97/68/EC  provides  for  a  flexibility  scheme 
to  allow  equipment 
manufacturers  to  purchase,  in  the  period  between  two  emission  stages,  a  limited 
quantity of engines that do not comply with the current emission limit values, but are 
approved to the nearest previous stage of emission limits.  

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9 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 59, 27.2.1998, p.1.  

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(4) 

(5) 

(6) 

(7) 

Article 2 (b) of Directive 2004/26/EC10 foresees the evaluation of the possible need for 
additional flexibilities.  

During the transition from Stage III A to Stage III B, the percentage of the number of 
engines used for application other than propulsion of railcars and locomotives placed 
on the market under the flexibility scheme, should be increased from 20% to 50% of 
the equipment manufacturer’s annual sales of equipment with engines in that category. 
The  maximum  number  of  engines  that  may  be  placed  on  the  market  under  the 
flexibility scheme should be adapted accordingly. 

The  rules  applicable  to  the  flexibility  scheme  should  be  adapted  to  extend  the 
application of that scheme to engines for use in propulsion of railcars and locomotives.  

The  measures  provided  in  this  Directive  reflect  a  temporary  difficulty  faced  by  the 
manufacturing sector. They should therefore be restricted to the transition from Stage 
III A to Stage III B and expire by 31 December 2013 at the latest. 

(8) 

Directive 97/68/EC should therefore be amended accordingly. 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 97/68/EC is amended as follows: 

1. 

Article 4(6) is replaced by the following: 

"(6)  Compression  ignition  engines  for  use  other  than  in  propulsion  of  inland 
waterway  vessels  may  be  placed  on  the  market  under  a  flexibility  scheme  in 
accordance  with  the  procedure  referred  to  in  Annex XIII  in  addition  to 
paragraphs 1 to 5." 

2. 

Article 10 is amended as follows: 

(a)  Paragraph 7 is replaced by the following: 

"(7)  Member States shall permit the placing on the market of engines, as defined in 
Section  1  of  Annex  I  under  A(i),  A(ii),  A(iv)  and  A(v),  under  the  flexibility 
scheme in accordance with the provisions in Annex XIII." 

(b)  The following paragraph 8 is added: 

"(8)  The  flexibility  scheme,  in  accordance  with  the  provisions  of  Section  1.2  of 
Annex XIII, shall apply only for the transition from Stage III A to Stage III B 
and expire on 31 December 2013." 

3. 

Annex XIII is amended in accordance with the Annex to this Directive.  

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OJ L 146, 30.4.2004, p.1. 

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Article 2  

Transposition 

1. 

Member States shall adopt and publish, by [Twelve months after the publication of 
the  Directive]  at  the  latest,  the  laws,  regulations  and  administrative  provisions 
necessary  to  comply  with  this  Directive.  They  shall  forthwith  communicate  to  the 
Commission  the  text  of  those  provisions  and  a  correlation  table  between  those 
provisions and this Directive. 

They  shall  apply  those  provisions  with  effect  from  [Day,  Month,  Year  =  following 
day of application date]. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 3 

Article 4 

This Directive is addressed to the Member States. 

Done at Brussels, […] 

For the European Parliament 
The President 
[…] 

For the Council 
The President 
[…] 

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Section 1 of Annex XIII is replaced by the following:  

ANNEX 

"1. 

ACTIONS BY THE ENGINE MANUFACTURER AND THE OEM 

1.1.  With the exception of the transition period between Stage III A and Stage III B, an 
OEM that wishes to make use of the flexibility scheme shall request permission from 
any  approval  authority  to  purchase  from  his  engine  suppliers,  the  quantities  of 
engines described in sections  1.1.1.  and 1.1.2.,  that  do  not  comply  with  the  current 
emission  limit  values,  but  are  approved  to  the  nearest  previous  stage  of  emission 
limits. 

1.1.1.  The number of engines placed on the market under a flexibility scheme shall, in each 
engine  category,  not  exceed  20%  of  the  OEM's  annual  sales  of  equipment  with 
engines in that engine category (calculated as the average of the latest 5 years sales 
on the EU market). Where an OEM has marketed equipment in the EU for a period 
of less than 5 years the average will be calculated based on the period for which the 
OEM has marketed equipment in the EU. 

1.1.2.  As an optional alternative to section 1.1.1 and with the exception of engines for use 
in  propulsion  of  railcars  and  locomotives,  the  OEM  may  seek  permission  for  his 
engine  suppliers  to  place  on  the  market  a  fixed  number  of  engines  under  the 
flexibility scheme. The number of engines in each engine category shall not exceed 
the following values: 

Engine Category 
(kW) 

Number of Engines 

19-37 

37-75 

75-130 

130-560 

200 

150 

100 

50 

1.2 

During  the  transition  period  from  Stage  III  A  to  Stage  III  B,  with  the  exception  of 
engines  for  use  in  propulsion  of  railcars  and  locomotives,  an  OEM  that  wishes  to 
make  use  of  the  flexibility  scheme  shall  request  permission  from  any  approval 
authority to purchase from his engine suppliers, the quantities of engines described in 
sections 1.2.1. and 1.2.2., that do not comply with the current emission limit values, 
but are approved to the nearest previous stage of emission limits. 

1.2.1.  The number of engines placed on the market under such flexibility scheme shall, in 
each engine category, not exceed 50% of the OEM's annual sales of equipment with 
engines in that engine category (calculated as the average of the latest 5 years sales 
on the EU market). Where an OEM has marketed equipment in the EU for a period 
of less than 5 years the average will be calculated based on the period for which the 
OEM has marketed equipment in the EU. 

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1.2.2.  As  an  optional  alternative  to  section  1.2.1.,  the  OEM  may  seek  permission  for  his 
engine  suppliers  to  place  on  the  market  a  fixed  number  of  engines  under  the 
flexibility scheme. The number of engines in each engine category shall not exceed 
the following values: 

Engine Category  
(kW) 

Number of engines  

37-56 

56-75 

75-130 

130-560 

200 

175 

250 

125 

1.3 

1.4 

1.5. 

(a) 

(b) 

1.6. 

1.7. 

As regards engines for use in propulsion of railcars, the flexibility scheme as defined 
in section 1.1.1. shall be applicable as from the transition period between Stage III A 
and Stage III B.  

As regards engines for use in propulsion of locomotives, during the transition period 
between  Stage  III  A  and  Stage  III  B  an  OEM  may  seek  permission  for  his  engine 
suppliers to place on the market a maximum of 12 engines for use in propulsion of 
locomotives under the flexibility scheme. 

The  OEM  shall  include  in  his  application  to  an  approval  authority  the  following 
information: 

a sample of the labels to be affixed to each piece of non-road mobile machinery in 
which an engine placed on the market under the flexibility scheme will be installed. 
The labels shall bear the following text: "MACHINE NO … (sequence of machines) 
OF … (total number of machines in respective power band) WITH ENGINE No … 
WITH TYPE APPROVAL (Dir. 97/68/EC) No …";  

a  sample  of  the  supplementary  label  to  be  affixed  on  the  engine  bearing  the  text 
referred to in section 2.2. of this Annex. 

The OEM shall provide the approval authority with any information connected with 
the implementation of the flexibility scheme that the approval authority may request 
as necessary for the decision. 

The OEM shall provide any requesting type approval authority in the Member States, 
with  any  information  that  the  type  approval  authority  requires  in  order  to  confirm 
that  any  engines  claimed  to  be,  or  labelled  as  being,  placed  on  the  market  under  a 
flexibility scheme is properly so claimed or labelled. 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A 
BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE 

1. 

NAME OF THE PROPOSAL: 

Directive  of  the  European  Parliament  and  of  the  Council  amending  Directive 
97/68/EC  as  regards  the  provisions  for  engines  placed  on  the  market  under  the 
flexibility scheme 

2. 

BUDGET LINES: 

Chapter and Article: Not applicable  

Amount budgeted for the year concerned: 

3. 

FINANCIAL IMPACT  

⌧  Proposal has no financial implications 

(cid:133) 

Proposal has no financial impact on expenditure but has a financial impact on 
revenue – the effect is as follows: 

(€ million to one decimal place)  

Budget line 

Revenue11 

12 month period, 
starting dd/mm/yyyy 

[Year n] 

Article … 

Impact on own resources 

Article … 

Impact on own resources 

Situation following action 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5] 

Article … 

11 

Regarding  traditional  own  resources  (agricultural  duties,  sugar  levies,  customs  duties)  the  amounts 
indicated must be net amounts, i.e. gross amounts after deduction of 25 % of collection costs 

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Article … 

4. 

ANTI-FRAUD MEASURES 

Not applicable 

5. 

OTHER REMARKS 

… 

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