Commission staff working document - Impact assessment - Accompanying document to the 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 COM(2010)362 final SEC(2010)828
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 
SEC(2010) 829 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying document to the 

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  

COM(2010)362 final 
SEC(2010)828 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

3.7. 

3.8. 

4. 

INTRODUCTION AND POLICY CONTEXT....................................................................... 5 

Basis for the introduction of the flexibility scheme ..................................................... 5 

Competitiveness issues................................................................................................. 6 

PROCEDURAL ISSUES AND POSITIONS FROM CONSULTATION OF INTERESTED 
PARTIES ........................................................................................................................ 7 

Consultation and expertise ........................................................................................... 7 

Impact Assessment Board (IAB) recommendations .................................................... 9 

PROBLEM DEFINITION ................................................................................................. 9 

Background .................................................................................................................. 9 

Developing New Engine Technology ........................................................................ 10 

Ability to Comply ...................................................................................................... 10 

Compliance costs ....................................................................................................... 12 

Regulatory issues ....................................................................................................... 12 

Influence of the Crisis ................................................................................................ 12 

How will the situation develop?................................................................................. 13 

Does the EU have the right to act?............................................................................. 14 

OBJECTIVES................................................................................................................ 14 

4.1. 

Consistency with other horizontal objectives of the European Union....................... 15 

4.1.1.  The European Economic Recovery Plan.................................................................... 15 

4.1.2.  Environmental Policies .............................................................................................. 15 

5. 

5.1. 

5.2. 

POLICY OPTIONS ....................................................................................................... 17 

Introduction ................................................................................................................ 17 

Options ....................................................................................................................... 17 

5.2.1.  For the sectors already covered by the flexibility scheme........................................ 17 

5.2.2.  For the railcars sector currently excluded from the use of the flexibility scheme . 18 

6. 

6.1. 

6.2. 

OPTION ANALYSIS – PRELIMINARY ANALYSIS – SECTORS ALREADY COVERED BY 
THE FLEXIBILITY ....................................................................................................... 19 

Analysis of Option 1A – Baseline.............................................................................. 19 

Option 2A. Provision of loans for purchasing stocked engines manufactured under 
the so called sell-off period as in Article 9, section 4a of the Directive .................... 19 

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6.3. 

6.4. 

Option 3A. Implementation of a scrapping scheme at National level. ...................... 20 

Option 4A Implementation of alternative types of provisions under the existing 
flexibility scheme. ...................................................................................................... 21 

6.4.1.  Option 4.1A Implementation of scaled percentages of flexibility for the different types 

of machinery, depending on the problems they encounter for the transition from 
Stage III A to Stage III B. ........................................................................................... 21 

6.4.2.  Option 4.2A Increase of flexibility percentage to 50% for all machinery eligible to 

use the provisions of the scheme and proportionate adjustment of the fixed numbers 
of engines to the relevant table of Annex IV. ............................................................. 21 

6.4.3.  Option 4.3A. Conditional use of the flexibility scheme, with penalty mechanism ..... 22 

6.4.4.  Option 4.4A. Implementation of a trading system...................................................... 23 

6.4.5.  Comparison of the Options ........................................................................................ 23 

6.5. 

Conclusion on preliminary Analysis.......................................................................... 25 

7. 

IMPACTS OF PREFERRED OPTION.............................................................................. 26 

7.1.1.  Environmental impact ................................................................................................ 26 

7.1.2.  Economic impact........................................................................................................ 29 

7.2. 

Description of methodology for the sectors excluded from the use of the flexibility 
scheme........................................................................................................................ 31 

7.2.1.  Environmental impacts............................................................................................... 33 

7.2.2.  Economic impact........................................................................................................ 34 

7.3. 

For the SMEs.............................................................................................................. 34 

8. 

9. 

EFFECT OF THE PROPOSED MEASURE COMPARED TO THE BASE LINE ..................... 35 

MONITORING AND EVALUATION ............................................................................... 36 

ANNEX I : GLOSSARY........................................................................................................ 37 

ANNEX II: REFERENCE DOCUMENTS.......................................................................... 38 

ANNEX III: Summarized Stages table of Directive 97/68/EC ........................................... 39 

ANNEX IV: Flexibility scheme ............................................................................................. 40 

ANNEX V: Positions of stakeholders regarding the amendment of the provisions of the 
flexibility scheme .................................................................................................................... 42 

ANNEX VI: Fleet and annual sales of NRMM machinery ................................................ 44 

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ANNEX VII: Emissions of NOx and PT .............................................................................. 45 

ANNEX VIII: Tables of fixed engines numbers of the flexibility scheme......................... 46 

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1. 

INTRODUCTION AND POLICY CONTEXT 

The  Non-Road  Mobile  Machinery  Directive  97/68/EC1  (NRMM)2  regulates  the  exhaust 
emissions  (carbon  oxide  (CO),  hydrocarbons  (HC),  nitrogen  oxides  (NOx)  and  particulates 
(PT)) from diesel engines installed in non-road mobile machinery. This includes construction, 
agricultural and forestry machinery, railcars & locomotives, inland waterway vessels, constant 
speed engines (mostly used in generator sets and pumps, etc) and small petrol engines used in 
different types of machinery (including handheld machinery like chainsaws, etc). 

The  Commission  proposal  accompanying  this  impact  assessment  responds  to  the  adverse 
market conditions for the non-road OEMs3 brought about by the financial and economic crisis 
and only covers the flexibility scheme. A full review of the Directive is planned and a further 
Commission proposal is likely to be presented by the end of 2010 and will be accompanied by 
an IA. 

1.1. 

Basis for the introduction of the flexibility scheme 

For the various types of machinery, the Directive stipulates the maximum permitted engines 
exhaust emissions as a function of the power of the installed engine. Moreover, the Directive 
includes  a  series  of  emission  limit  stages  of  increasing  stringency  with  corresponding 
compliance dates. OEMs must ensure that new engines used in their machines comply with 
these limits when placing them on the market.  

Directive  2004/26/EC  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  entering  into  force  progressively,  depending  on  the  power 
category,  as  of  1st  January  2011  with  regard  to  the  placing  on  the  market  whilst  from  1st 
January 2010 the type approval period for these engines will start. As the Stage III B limits 
are stricter, current engines will need to be modified, re-designed in order that the limits can 
be respected. This redesign affects OEMs who have to adapt the design of their machines to 
accommodate  the  modified  engines.  This  is  a  time  and  resources  consuming  procedure, 
depending  heavily  on  the  required  changes  in  the  engines  and  body  of  the  machinery  to  be 
installed.  

Directive  2004/26/EC4  also  introduced  the  so-called  flexibility  scheme5  to  facilitate  the 
transition between the different emission stages. The flexibility scheme allows the OEMs to 
place  on  the  market,  during  the  period  between  two  successive  stages  of  exhaust  emissions 
limit values, a limited number of non-road mobile machinery which is fitted with compression 
ignition  engines  –with  power  from  19kW  to  560  kW-  that  still  comply  with  the  exhaust 
emission limits of the previous stage. The flexibility scheme applies to various types of land 
based  machinery  including  construction,  agricultural  and  forestry  machinery,  generator  sets 
and pumps using constant speed engines, but not to locomotives, railcars and inland waterway 
vessels.  An  OEM  has  the  option  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 

1 
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5

OJ L 59, 27.2.1998, p.1 
Additional information on abbreviations used are available in Glossary in Annex I. 
OEM: Original Equipment Manufacturer, also explained in Annex I 
OJ L 225, 25.6.2004, p.3 
Additional clarifications on provisions of the flexibility scheme can be found in Annex IV 

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machinery (calculated as the average machinery sales in the EU of the latest 5 years) or (2) a 
fixed  maximum  number  of  machines  as  stipulated  in  the  Directive.  This  second  option  was 
intended to be used by smaller enterprises producing lower volumes of engines. 

The flexibility scheme was designed6, among other reasons, to: 

•  Permit  smooth  integration  of  applicable  regulations  to  the  NRMM  machinery;  since  the 
majority  of  OEMs  do  not  produce  their  own  engines,  but  have  to  purchase  these  from 
engine  manufacturers.  Engine  and  after-treatment  development7  is  then  followed  by  its 
integration, optimisation and machinery type approval. This situation is unique compared 
with other vehicle manufacturers, who can develop and produce both vehicle and engine at 
the same time. 

•  Provide the necessary environment for the OEMs to develop and  adapt firstly  machinery 
with bigger volume sales and fewer problems and then utilise the gained experience to the 
rest  of  the  machinery,  produced  at  smaller/niche  volumes.  This  experience  makes  the 
adaptation of the rest of the machinery less costly.  

•  Avoid excessive impacts at the transition to the next Stage of low volume products (such 
as  harvesters-linen/grapes,  landfill  compactors,  pipe-layers,  etc),  since  development  in 
these series requires relatively high fixed cost.  

1.2. 

Competitiveness issues 

World-wide,  only  the  EU  and  the  U.S.  and  to  a  lesser  degree  Japan  have  similar  ambitions 
with regard to engine emission legislation for NRMM. In other important geographical areas 
like  China,  India,  Russia  or  Latin-America  these  requirements  do  not  exist.  Thus  the  main 
geographical market is the transatlantic market hosting the key manufacturers of engines and 
machinery, but also of customers. This is why considerable efforts have been made to fully 
align emission limits and implementation dates of the key Stages on both sides of the Atlantic. 
Testing procedures are currently in the process of being harmonised at global level and a UN 
ECE8  standard  is  to  be  adopted  in  November  2009.  Only  the  approval  procedures  remain 
different. 

Flexibility measures in this area have also been adopted in the U.S. In addition to the existing 
flexibility,  the  U.S.  system  has  in  2008  introduced  an  additional  'flexibility',  the  so-called 
ABT9-system, which is built on the three pillars of Averaging i.e. exchange of credits between 
engine families within a given engine manufacturer for a specific model year, Banking i.e. the 
retention  of  credits  by  one  engine  manufacturer  for  use  in  future  model  year  averaging  or 
trading and Trading i.e. exchange of credits between engine manufacturers.  

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As stipulated in the COM (2002) 765 final and COM (2000) 840, amending proposals  
Additional  equipment  installed  with  the  engine,  that  chemically  or  physically  reduces  the  exhaust  emissions  emitted  from  the 
engine  before  releasing  them  to  the  atmosphere  ex.  Diesel  Particulate  Filters,  NOx  adsorber  Catalyst  or  Selective  Catalyst 
Reduction systems 
See reference in Annex I 
The Average Banking and Trading (ABT) system on exhaust emissions used in U.S. allows a manufacturer to produce individual 
products  of  'cleaner'  and  'dirtier'  lines  and  place  both  types  on  the  market,  provided  that  the  average  emissions  of  the 
manufacturer's  fleet  comply  with  the  legislated  limits.  A  precise  method,  allocating  points,  is  used  in  order  to  calculate  the 
emissions from both engine types. In the same legislation an emissions cap is foreseen, as a higher limit that must be met by all 
individual products. Strict rules on the implementation and compliance of the engines placed on the market by the manufacturer 
followed by strict penalties in case of no compliance are set in the regulation 

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The U.S. introduced a modification in their current ABT system for Tier 4 engines and it is 
assumed  that  this  measure  provides  a  greater  flexibility  for  manufacturers  compared  to  the 
current EU system in place.  

2. 

PROCEDURAL  ISSUES  AND  POSITIONS  FROM  CONSULTATION  OF  INTERESTED 
PARTIES 

2.1. 

Consultation and expertise 

The  current  analysis  of  Directive  97/68/EC  is  part  of  the  Commission’s  Legislative  Work 
Programme for 2009 and introduced under the reference 2009/ENTR/028.  

Before the onset of the financial crisis, a possible amendment of the  flexibility  scheme was 
already considered in the context of a wider revision of the Directive which is foreseen in the 
Commission’s Legislative Work programme for 2010. The current analysis takes into account 
elements of this process including the following main steps: 

•  a Technical Review of the Directive10 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 study11 to assess the impacts of the policy options as laid down in 
the  draft  Technical  Review  of  JRC.  Two  complementary  studies  have  been  launched  to 
further  assess,  inter  alia,  the  impacts  of  a  possible  inclusion  of  the  rail  sector  (railcars, 
locomotives) and the impacts of the options of the Technical Review of JRC, including the 
amendment  of  the  flexibility  scheme's  percentage,  to  SMEs12.  The  final  report13  and 
executive summary14 of the third study will be delivered by March 2010. 

For  the  intended  revision  of  the  flexibility  scheme  as  a  response  to  the  current  economic 
situation of engine manufacturers and the NRMM OEMs, the Commission’s services carried 
out between May and June 2009 an in depth consultation of Member States’ authorities and 
stakeholders  (industry,  environmental  organisations,  workers  associations)15.  Meetings  were 
organised  with  the  following  main  industry  federations:  the  Committee  for  European 
Construction  Equipment  (CECE)  and  European  Agricultural  Machinery  (CEMA),  the 
Association of the European Rail Industry (UNIFE). In a letter of 16 June 2009 Member State 
authorities  and  Non  Governmental  Organisations  (NGOs),  the  European  Environmental 
Bureau16  and  the  European  Federation  for  Transport  &  Environment17  were  informed  about 
the proposal to revise the flexibility scheme and invited to submit written contributions. The 
letter  was  uploaded  on  a  dedicated  web-based  consultation  tool  so  to  inform  stakeholders 
more widely. On 22 June 2009 a presentation on the current and future initiatives on revising 
the NRMM Directive was made by DG Enterprise at the 'Clean Air seminar' organised by the 

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The 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/projstudies.htm  
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  
The additional IA study on rail and inland waterway sector is available on the NRMM web page at the Europa web site: 
http://ec.europa.eu/enterprise/mechan_equipment/emissions/projstudies.htm  
Reference at the Europa website will be included when available 
Reference at the Europa website will be included when available 
Summarised information on the contributions of the public consultation on this proposal may be found in Annex V 
More relevant information can be found on the link: http://www.eeb.org/  
More relevant information can be found on the link: http://www.transportenvironment.org/ 

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European Environmental Bureau at which most  Environmental  NGOs  were  represented.  On 
17 July 2009 the proposal to amend the flexibility scheme was discussed at a meeting of the 
Expert Group on Emissions from NRMM. 

The input from stakeholders has been taken into account, assessing different options to amend 
the provisions of the flexibility scheme. It has also been considered by the external contractor 
(ARCADIS),  assessing  environmental,  social  and  economic  impacts,  including  large 
industries,  SMEs  and  individuals  as  workers,  consumers  and  users.  Information  on  the 
methodology  used,  and  the  interim  progress  was  made  available  to  the  public  and 
stakeholders through the NRMM web page18.  

To  summarize  the  comments  received  from  consultation:  A  majority  of  comments  were 
submitted  by  industry  federations  and  individual  manufacturing  or  user  companies.  These 
underline the benefit from increasing the flexibility which will allow companies to distribute 
the required compliance costs more evenly during the crisis and ensure a relative income that 
would allow performing the necessary extended changes in various types of products (engines 
and  machinery)  in  a  longer  period  of  time.  Only  one  company  stated  that  new  emission 
standards  can  only  be  achieved  with  low-sulphur  fuels  which  will  not  be  available  world-
wide, meaning that export oriented OEMs will be compelled to produce two different sets of 
machinery, one for the countries that have emission limits (EU, U.S., Japan) and another for 
the  rest  of  the  world.  Comments  from  the  rail  sector  highlighted  that  the  main  problem  to 
meet  the  new  emission  requirements  remains  the  complete  reengineering  of  the  rail  vehicle 
linked to the modification of the exhaust and cooling system which are closely related with 
the safety and operability requirements.  

The international organisation of catalyst and filter based technology drew the attention to the 
need  to  align  the  production  of  engines  to  emission  standards  in  the  U.S.  and  in  Japan  and 
concludes that any delay in the introduction of EU emission standards jeopardise the benefits 
for  the  whole  NRMM  manufacturing  industry,  in  particular  with  regard  to  the  'first  mover' 
benefits.  It  also  highlighted  that  the  increased  flexibility  would  delay  the  recoupment  of 
development costs. 

One  environmental  NGO  submitted  comments  and  referred  to  the  recent  statement  of  the 
European  Environmental  Agency  on  the  impact  of  particle  pollution,  mainly  emitted  from 
diesel engines and expressed its concern that the increased flexibility could trigger lobbying 
for the delay of other environmental measures. 

One national employer's organisation expressed its full support to the Commission initiative 
on extending the flexibility scheme, and identified numerous merits of this approach. 

One Member State drew the attention to the need to carefully assess the possible impact of the 
measure on the environment and in particular in the context of Member State obligations to 
meet  the  ambient  air  quality  standards.  Another  Member  State  welcomes  the  proposed 
measure,  but  invites  the  Commission  to  carefully  assess  the  specific  situation  related  to  the 
railway sector. 

A short summary of the arguments of the various stakeholders can be found in Annex V.  

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In  support  of  this  IA,  an  Impact  Assessment  Steering  Group  (IASG)  was  created  with 
invitations  for  participation  sent  to  DG  Enterprise  and  Industry,  DG  Joint  Research  Centre, 
DG  Research,  Secretary–General,  DG  Environment,  DG  Transport  and  Energy,  DG 
Employment and DG Trade. The IASG met three times on 18th June 2009, 25th June 2009 and 
15 July 2009. The suggestions of the IASG group have been incorporated in the IA. 

2.2. 

Impact Assessment Board (IAB) recommendations 

The Impact Assessment was discussed at the IAB at the meeting of 9th September 2009, and 
according to its opinions of 11 September 2009 and of 26 October2009. 

In order to accommodate the recommendations of the Board the following elements have been 
developed. 

•  Problems  which  are  caused  by  the  current  economic  crisis  and  more  general  problems 

related to the design and introduction of the necessary new technology. 

•  It was clarified that: 

–  The  proposed  amendments  of  the  flexibility  scheme  could  have  an  impact  on 

competition (between complying and non-complying manufactures). 

–  The basis on which the new flexibility limits were determined has been specified. 

–  The  incentives  of  the  manufacturers  complying  with  the  Directive  in  the  future 
have  been  further  evaluated  the  impacts  of  the  preferred  option  were  also 
identified. 

–  The reasons that the penalty mechanism option is not feasible were explained. 

•  The  IA  has  been  made  more  specific  about  all  environmental  impacts  of  the  proposed 
amendment of the flexibility scheme, especially on the efforts to develop a methodology to 
measure CO2 emissions from NRMM. 

Moreover, numerous detailed modifications have been introduced in the IA, incorporating the 
comments of the IA Board. 

3.  PROBLEM DEFINITION  

3.1. 

Background 

The  technological  challenge  for  non-road  machinery  engine  manufacturers  is  that  the  next 
generation  of  engines  must  make  emissions  reductions  in  particulate  matter  (PM)  and  NOx 
comparable  to  those  required  and  deployed  in  on-road  engines  and  vehicles  (trucks,  lorries, 
buses  etc.).  This  is  not  possible  with  the  current  technology.  Further  research  and 
technological  development  is  required  by  industry in  order  to  ensure  that  machinery  can  be 
placed on the market with compliant III B engines.  

Compliance costs include costs for the engine manufacturers but also on the OEMs.  

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There  is  a  great  diversity  of  machinery  production  (approximately  1500  companies)  which 
has to comply with the emission limits laid out in the Directive, while engines are produced 
by  only  few  large  companies  (approximately  20  companies).  Only  a  very  few  large  OEMs 
produce  their  own  engines.  The  adaptation  of  vehicles  machinery  can  only  be  done 
subsequently by the OEMs that do not produce their own engines, after the finalisation of the 
configuration of the engine, since this redesigning procedure cannot be done in parallel.  

3.2. 

Developing New Engine Technology  

Engines compliant to Stage III B emission limits are progressively going to be placed on the 
market  as  of  2011  (see  Annex  III  about  details  of  the  timing  of  stages  across  engine 
categories).  

Substantial  changes  to  the  design  of  engines  are  necessary.  Engines  must  be  fitted  with 
electronic control systems that deliver fuel at the right time and quantity for a cleaner burning 
in  the  combustion  chamber.  In  addition  new,  sophisticated  after-treatment  systems  are 
necessary.  

3.3. 

Ability to Comply 

These engine modifications have implications on the configuration of the non-road machinery 
body and chassis in which the engines are installed. It is therefore not possible to develop and 
design the machinery until the engine is ready.  

Since technical solutions for complying III B engines are not in general yet finalised, OEMs 
are  not  in  a  position  to  fully  redesign  the  body  of  the  machinery  where  the  engine  is  to  be 
installed. It is important to note that the complexity of the redesign varies among the different 
forms of NRMM applications. 

For  some  of  them,  the  Stage  III  B  emissions  requirements  will  not  pose  very  significant 
problems  for  OEMs  (e.g.  some  forestry  equipment,  some  construction  equipment,  some 
agricultural machinery and inland water way vessels). In other NRMM applications, a Stage 
III  B  compliant  engine  is  far  from  being  finalised  and  thus  the  OEMs  have  not  been  in  a 
position to redesign their machinery in order to insert the new engines. 

Individual  OEMs,  producing  machinery  with  engines  of  different  power  categories,  are  at 
various degrees of readiness depending very much on the range of products they manufacture. 
It is not possible to give a detailed overview of the state of preparation of each company/sub-
sector as such information at that level of detail is not available.  

Based on information received  from the  industry, the  adaptation period  of the bodies of the 
machinery ranges between 12 to 18 months in order to accommodate the new III B engine and 
the  accompanying  after-treatment  system.  The  exact  duration  of  the  adaptation  period 
depends  on  the  number  of  machinery  produced  with  various  engines  and  the  types  of 
machinery in each engine power category.  

Apart  from  the  redesign  of  the  body,  the  adaptation  of  the  production  line  of  machinery 
(additional space, raw material handling and storage, costs etc) must also be finalised in the 
same  adaptation  period.  At  the  end  of  this  period  there  would  therefore  be  two  production 
lines, one for Stage III A compliant machinery and one for Stage III B.  

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The situation is as follows: 

•  For construction and agricultural machinery, technical solutions for OEMs are still to be 

found and consequently increased R&D efforts are necessary. 

•  Railcar  OEMs  have  fewer  difficulties  as  they  mostly  use  engines  already  developed  for 
on-road uses but problems are encountered in the redesign of the vehicles to accommodate 
in a tight space the engine and the after-treatment systems. 

•  Locomotive  OEMs  have  the  biggest  difficulties  to  comply  with  the  new  limits  and  will 
definitely not be ready by 1.1.2012. The adaptation of vehicles compliant to Stage III B 
has  not  yet  started.  A  significant  research  program  launched  under  the  7th  Research 
program-CLEANER-D-  has  recently  been  initiated  and  the  intention  is  to  build  on  this 
experience for future orientation of the full revision of the Directive in 2010.  

•  Inland waterway vessels are not concerned as the directive does not at the moment foresee 

Stage III B emission limits for engines used in this sector. 

Table 1: State of play * (2009) 

Construction 

Railcars 

Locomotives 

Inland  

Agriculture 

Machinery 

Waterway  

Vessels 

Engines 

Ready  

Ready 

Not ready  

n.a. 

by 2011 

by 2011 

After-
Treatment 
Systems 

Ready 

Ready 

Not Ready 

n.a. 

Machinery 

Not Ready 

Not Ready 

Not Ready 

n.a. 

by 2011 

Conclusion 

III B not 
ready in time 

III B not 
ready in 
time  

III B not 
ready in time 

III B does 
not apply 
to sector 

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* General description of the industry (few individual exceptions may exist). 

3.4. 

Compliance costs 

The compliance costs for OEMs 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, investment costs, documentation and labelling costs, etc...  

Existing  Stage  III  A  production  lines  may  continue  to  be  used  –  depending  on  demand  for 
machinery with IIIA engines from third countries that do not have the same exhaust emission 
limits as the EU or the U.S. In this case new production lines for machinery with III B engines 
must be set up with additional cost in equipment, personnel (hiring, training etc).  

3.5. 

Regulatory issues 

The original directive was introduced in 1997 and its decisions on deadlines and criteria were 
based on data that was available at that time.  

The strict timetable of transition from Stage III A to Stage III B with a duration of only three 
(3) years compared to the five (5) years of transition from Stage II to Stage III A (see Annex 
III) has been ambitious. In 2004 when the new emission limits have been adopted it was still 
uncertain  whether  the  required  technology  could  be  applied  in  all  applications.  In  order  to 
maintain  the  application  dates  for  the  new  emission  limits  it  was  agreed  to  accompany  the 
measure by a flexibility scheme which should allow OEMs allocating their limited research 
and development capacity to their priority markets. 

3.6. 

Influence of the Crisis 

From  autumn  2008  onwards  most  of  the  EU  based  industry  producing  non  road  mobile 
machinery has been unexpectedly and severely hit by the global financial and economic crisis, 
particularly affecting construction equipment and agricultural machinery. Steep 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. Firms prioritise their R&D 
expenditure  to  cover  firstly  those  products  with  high  existing  and  potential  sales  volumes. 
These  sales  then  provide  the  business  with  revenues  that  can  be  used  for  R&D  in  order  to 
develop technical solutions for smaller niche markets.  

For  construction  equipment19  the  market  in  Europe  started  to  drop20  sharply  in  the  4th 
quarter  of  2008  and  is continuing  to  decline21;  the  sales  over  the  year  2009  are  expected  to 
drop by at least 25% in units and depending on the market segment there are decreases up to 
60%. This reduction in sales ultimately results in cutting down production plans.  

19

20

21

Construction  equipment  includes  wheel  loaders,  bulldozers,  crawler  tractors,  crawler  loaders,  truck-type  loaders,  off-  highway 
trucks, hydraulic excavators, etc. 
Reference: CECE letter ''Background material for the Request to Enlarge Flexibility from 20% to 50% for III BStage III B'' , 05-
06-2009, addressed to Commission Services 
Additional information on market share can be found in the study 'Competitive analysis of the EU Mechanical Engineering', p. 4, 
available at the link: http://ec.europa.eu/enterprise/mechan_equipment/companalysis-eu-mechengin.pdf 

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•  Downstream  demand  is  greatly  influencing  construction  companies  and  rental 
companies  using  this  type  of  machinery.  The  construction  activity  dropped  by 
6.5%  in  2009  and  is  predicted  to  drop  by  an  additional  2.5%  in  2010. 
EUROSTAT22  reports  that  many  European  countries  still  register  a  decline  of 
economic activity in the construction industry. The largest quarterly decreases for 
the  3rd  quarter  2009  were  reported  in  LT  (-18.32%),  LV  (111.8%)  and  EE(-
11.4%). Only PL, LU, FI, CZ reported a positive construction output compared to 
the previous quarter, but stakeholders remain pessimistic about the stabilisation of 
the  situation  and  a  possible  recovery  in  the  coming  months..  As  a  result,  new 
orders for construction equipment are expected to further delayed. 

•  The European construction equipment industry includes around 1.200 companies 
which  are  operating  with  an  estimated  turnover  of  Eur  30  billion.  According  to 
industry estimates, the sector provides for 2008 around 160,000 direct jobs and an 
additional  450,000  indirect  jobs  in  the  supply,  distribution  and  maintenance 
network. For March 2009, the indirect jobs were expected to drop by 20% and the 
direct jobs to be reduced to 90,000-95,000. 

For agricultural machinery23 the decline started in most European countries in early 2009. 
For the part of agricultural machinery covered by the Directive, the total number of machinery 
registered in 2009 is estimated at 10,000 to 15,000 units.  

•  According  to  industry  60%  of  all  OEMs  reported  in  May  2009  an  order  intake 
which  was  more  than  10%  below  the  previous  year  in  their  home  markets  and 
50% of all OEMs declines of above 20% in incoming orders from other countries. 
Exports  to  Russia  for  example  have  dropped  dramatically  according  to  industry. 
85% of all OEMs expect their turnover to further decrease in the coming months.  

•  No  separate  data  concerning  NRMM  covered  machinery  and  agricultural 
machinery  (tractors  not  covered)  is  available  at  this  time.  According  to 
information  from  the  industry,  the  total  turnover  for  agriculture  machinery,  in 
2008,  should  have  reached  almost  Eur  30  billion.  Directly  linked  jobs  reach 
135,000 with another 200,000 indirect jobs.  

For railcars, the impacts of the crisis according to industry, at the time do not seem as severe 
as  for  construction  and  agricultural  machinery.  According  to  information  from  industry, 
passenger  numbers  have  not  started  to  decline  but  are  stagnating,  and  business  travel  is 
predicted  to  decline  by  10-20%.  Railcars  are  mostly  using  engines  deriving  from  the  heavy 
duty vehicles that are modified to comply with the overall design and use of the rail vehicle. 

3.7. 

How will the situation develop? 

If no additional measure is taken to alleviate the burdens of the crisis: 

22 

23 

Updated  data  on  construction  output  is  available  at  the  link:  http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-17062009-
BP/EN/4-17062009-BP-EN.PDF 
Agricultural  equipment  includes  harvesters,  self-propelled  agricultural  equipment  for  spraying,  irrigating,  planting,  crop 
harvesting, rotary tillers (walking ploughs). 

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•  OEMs  would  place  on  the  market  machinery  under  the  currently  allowed  20% 

until the completion of this allowance.  

•  Due  to  the  drop  in  sales,  the  funds  to  further  develop  and  finalise  the  required 
adaptations  of  machinery  bodies  and  production  lines  would  not  be  covered 
(estimated and planned incoming cash flow is limited). 

•  One  course  of  action  would  be  to  reduce  the  number  of  types  of  machinery  the 
OEM produces, so compliance costs would be less, but at the same time the OEM 
would  lose  a  segment  of  the  market  and  previous  customers,  making  his  future 
incoming cash flows smaller.  

•  In  order  to  acquire  the  required  funds,  OEMs  could  turn  to  the  banks  for  loans. 
However,  as  a  consequence  of  the  financial  crisis  banks  revised  their  lending 
policy and will give a higher consideration to the risk profile of companies. As a 
result  some  companies  may  have  difficulties  to  obtain  the  necessary  financial 
means to carry out the necessary R&D. 

•  The OEMs, after having exhausted the flexibility allowance and since they would 
not be in a position to produce next Stage compliant machinery, would not have a 
product to place on the market.  

•  This could negatively affect OEMs suppliers.  

3.8. 

Does the EU have the right to act? 

Since  the  Directive  already  harmonises  the  laws  of  the  Member  States  relating  to  emission 
limits and type approval procedure for engines to be installed in Non-Road mobile machinery 
it is an area of EU concern.  

The legal basis of this initiative is the same as for the NRMM Directive, namely Art. 114 of 
the Treaty of the functioning of the European Union. The subsidiary principle is respected by 
the  proposal,  since  amending  the  NRMM  Directive  is  only  possible  at  EU  level.  Member 
States cannot take action individually on emission limits for NRMM. 

4.  OBJECTIVES 

The general objective of the proposal is to safeguard economic development of the NRMM 
industry and maintain a high level of environmental protection.  

Specific objectives: 

•  To  maintain  the  competitiveness  of  EU  NRMM  industry  and  alleviate  the 

immediate pressures brought about by the economic crisis. 

•  To  enable  industry  to  continue  financing  R&D  so  that  technology  becomes 

available for all product types in Stage III B.  

•  To  limit  the  emissions  of  NRMM  by  enabling  the  replacing  of  older,  more 

polluting and fuel consuming engines by cleaner ones.  

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Operational Objectives: 

•  To  introduce  a  cost  effective  and  timely  measure  that  allows  EU  engine  and 
machinery  producers  to  maintain  their  competitiveness  and  to  continue  selling 
products  throughout  Stage  III  B  and  therefore  alleviate  the  immediate  pressures 
brought about by the economic crisis. 

•  To maintain the incentive to invest in R&D and develop cleaner engines that are 

compliant with future emission limit Stages. 

•  To  allow  industry  to  finance  expenditure  on  R&D  in  the  short  term  to  develop 
Stage  III  B  compliant  machinery  by  allowing  them  to  continue  to  generate 
revenues from sales. 

4.1. 

Consistency with other horizontal objectives of the European Union 

4.1.1.  The European Economic Recovery Plan 

The November 2008 European Economic Recovery Plan (EERP)24 addresses the difficulties 
of the wider economy due to the global financial crisis. The Plan outlines a series of measures 
to cope with the squeeze on credit, declining sales and revenues. It refers inter alia to the need 
for a swift stimulation of demand and consumer confidence as well as measures to lessen the 
human cost of the economic downturn and its impact on jobs. The EERP highlights the need 
to  ensure  full  coherence  between  immediate  actions  and  the  EU’s  medium  and  longer  term 
objectives.  In  its  Communication  for  the  Spring  European  Council25  the  Commission 
reconfirmed the unprecedented pressure in Europe from a global economic crisis and the need 
to pursue the efforts launched under the European Economic Recovery Plan (EERP). A joint 
effort  of  over  €400  billion  of  immediate  fisc al  measures  is  expected  to  generate  new 
investment,  boost  demand  and  rate  employment.  The  impact  from  this  EERP  will  however 
not  be  immediate  and  needs  therefore  to  be  complemented  by  action  to  improve  business 
conditions.  

Such complementary action needs to focus on maintaining the competitive industrial base and 
focus on knowledge based and low carbon economy as set in the Lisbon Strategy. The current 
proposal will respect the objectives of the Lisbon Strategy and complement the EERP.  

4.1.2.  Environmental Policies 

Under  the  Sixth  European  Environment  Action  Programme  which  highlights  the  need  to 
reduce pollution to levels which minimise harmful effects on human health, the Commission 
presented in 2002 the Clean Air For Europe (CAFE) initiative which provides an integrated 
and long term strategy for reducing the adverse impact of air pollution on human health and 
environment. These objectives are implemented through Directive 2008/50/EC on ambient air 
quality and cleaner air for Europe which establishes a system for the assessment of ambient 
air  quality  and  provides  thresholds  for  each  pollutant.  Member  States  have  to  assess  and 

24 
25

COM (2008) 800 
COM (2009) 114 

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manage  the  ambient  air  quality.  Besides  this  instrument  it  remains  important  to  combat 
emissions  of  pollutants  at  source  and  to  implement  the  most  effective  emission  reduction 
measures. Also the national ceilings Directive 2001/81/EC26 establishes legally binding limits 
to  be  attained  by  2010  for  the  total  permssable  emissions  from  a  Member  State  for  several 
pollutants including nitrogen oxides (NOx). Current forecasts suggest 11 Member States will 
not comply with their ceilings for NOx. 

The  NRMM  Directive  provides  an  important  contribution  with  a  progressive  reduction  of 
targeted emissions.  

The  key  air  polluters  from  the  NRMM  sector  to  overall  air  pollution  are  PM  and  NOx 
emissions27.  According  to  the  RAINS  model28  the  estimated  PM1029  emissions  from  the 
NRMM  sector  for  EU27  are  7%  compared  to  13%  for  road  transport.  In  terms  of  NOx 
emissions,  the  NRMM  is  responsible  for  16%  of  all  NOx  emissions  in  the  EU27  while  the 
road sector contributes to 42% of all NOx emissions. This contribution from NRMM to the 
overall  air  pollution  in  the  EU  provides  the  rational  for  increasing  the  efforts  to  reduce  the 
emissions in the coming years. Care will be taken not to endanger the overall objective of the 
NRMM Directive to progressively reduce emissions. 

Although the NRMM Directive covers exhaust emissions from internal combustion engines, it 
does  not  address  CO2.  As  a  result  no  inventory  or  data  is  available  on  CO2  emissions  of 
engines in the various types of NRMM machinery.  

Nevertheless  CO2  emissions  from  combustion  engines  in  the  NRMM  sector  need  to  be 
addressed  in  the  future  in  line  with  the  recent  development  in  the  road  sector,  either  by 
voluntary or regulatory measures.  

Specific  consideration  must  be  given  to  the  fact  that  NRMM  applications  are  different  than 
those  of  other  sectors  like  heavy  and  light  duty  vehicles  or  cars.  Consequently  specific 
methodology, limits and implementation dates for CO2 emissions need to be identified. Based 
on the existing knowledge and practices of other sectors, substantial preparatory work is still 
necessary especially for the large variety of NRMM applications which are characterised by 
variations in uses and power of the used engines. 

This  requires  however  substantial  preparatory  work  because  of  the  large  variety  of  NRMM 
applications  which  results  in  significant  variations  of  emissions  and  fuel  consumption  for 
identical engines.  

These  future  strategies  are  currently  discussed  in  the  context  of  the  overall  revision  of  the 
Directive into 2010.  

26 
27

28 
29

OJ L 309, 27,11,2001, p.22. 
Definitions of the gaseous and particulate pollutants, as stated in Directive 97/68/EC Annex I, as amended, include: '2.2. gaseous 
pollutants  shall  mean  carbon  monoxide,  hydrocarbons  (assuming  a  ratio  of  C1:  H1.85  and  oxides  of  nitrogen,  the  last  named 
being expressed in nitrogen dioxide (NO2 equivalent; 2.3. particulate pollutants shall mean any material collected on a specified 
filter medium after diluting C.I. engine exhaust gas with clean filtered air so that the temperature does not exceed 325 K (52 oC);'  
Regional Air Pollution Information and Simulation model and database  
Particulate matter below 10 µm 

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5.  POLICY OPTIONS 

5.1. 

Introduction 

The  issues  highlighted  in  the  problem  definition  and  the  subsequent  objectives  warrant  an 
interim measure to mitigate the impact of the economic downturn.  

The approach to be taken in identifying options is to firstly identify options to provide relief 
for those sectors already covered by the existing flexibility (options 1A to 4.4 A) , and then to 
consider sectors that do not currently have access to the flexibility scheme (railcars, options 
1B to 4.5 B). 

5.2. 

Options 

5.2.1.  For the sectors already covered by the flexibility scheme  

•  Option 1A - No action = Base line option 

The provisions of the current flexibility scheme remain unchanged. 

•  Option  2A  Provision  of  loans  for  purchasing  stocked  engines  manufactured  under  the  so 

called sell-off period. 

In  Article  9,  section  4a  of  the  Directive,  it  is  stated  that  'For  each  category,  the  above 
requirements (reference to implementation dates of Stages) shall be postponed by two years in respect 
of engines with a production date prior to the said date'.  

While Stage III A is in force, industry may produce engines and machinery and stock them in 
the  EU  territory.  These  Stage  III  A  engines  and  machinery  are  manufactured,  to  keep 
industries  running  and  to  cover  the  needs  of  other  countries  that  do  not  have  strict  exhaust 
emissions  limitations  as  EU.  After  the  beginning  of  implementation  of  Stage  III  B,  these 
stocked engines and machinery may be placed on the market for a period of two years. This 
option suggests the use of government backed loans to be granted to OEMs to purchase Stage 
III A engines on stock.  

•  Option 3A Implementation of a scrapping scheme at national level. 

The use of a scrapping scheme would be a subsidy, given as an incentive, to the user to buy 
new machinery, with a Stage III B engine.  

Under this option, the owner of older, more polluting machinery will deliver the machinery 
for scrapping (destruction-recycle etc). A National Public authority would grant a lump sum 
to the owner of the scrapped machinery. The owner will receive the money via banking or the 
tax system when the purchase of new machinery is proven.  

•  Option 4A - Implementation of alternative types of provisions under the existing flexibility 

scheme 

Under this option additional flexibility will be granted for the transition from Stage III A to 
Stage III B. No additional measures for future stages are envisaged at this stage.  

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•  Option  4.1A  Implementation  of  a  scaled  percentage  of  the  flexibility  scheme  for  the 
various  types  of  machinery,  according  to  the  amount  of  encountered  problems  for  the 
transition from Stage III A to Stage III B.  

The option suggests the implementation of a different percentage of flexibility to each of the 
various  types  of  machinery,  according  to  the  particular  transitional  problems  encountered 
from Stage III A to Stage III B plus a similar approach with regard to the fixed numbers of 
engines in Table 2. 

•  Option 4.2A Increase of flexibility percentage to 50% for all machinery eligible to use the 
provisions of the scheme and proportionate adjustment of the fixed numbers of engines to 
the relevant table of Annex IV.  

This  option  suggests  increasing  flexibility  from  20%  to  50%  for  all  machinery  currently 
covered by the scheme and also adjusting the table of fixed engines numbers accordingly.  

•  Option 4.3A Conditional use of the flexibility scheme, with penalty mechanism.  

In order to maintain the incentives to develop III B machines, a system could be introduced 
where additional flexibility used in the transition from Stage III A to Stage III B will trigger 
payment of a penalty after several years.  

This would maintain the incentive for the OEMs to develop machinery with III B engines and 
use only the minimum additional  flexibility they need in order to temporarily overcome the 
burdens of the economic crisis. It requires a penalty to be set at the right level. 

•  Option 4.4A Implementation of a trading system  

A  system  similar  to  that  of  the  EU  Emissions  Trading  Scheme  could  be  developed  for  the 
flexibility  measure.  A  system  could  be  established  whereby  firms  that  would  not  use  the 
entire flexibility could sell their flexibility rights to firms that need additional flexibility. This 
scheme  would  require  a  mechanism  to  sell  flexibility  (permits)  and  a  system  in  place  to 
monitor  the  scheme.  The  price  of  each  permit  of  flexibility  would  be  determined  by  the 
market.  

5.2.2.  For the railcars sector currently excluded from the use of the flexibility scheme 

The  railcars  sector  currently  does  not  have  the flexibility  scheme.  The  same  descriptions  of 
the options as provided above apply. 

•  Option 1B - No action – There is no flexibility 

•  Option 2B - Provision of loans for purchasing stocked engines manufactured under the so 

called sell-off period. 

•  Option 3B Implementation of a scrapping scheme 

•  Option 4B – Introduction of a flexibility scheme for railcars 

•  Option 4.1B - Introduce a flexibility of 20% 

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•  Option  4.2B  -  Implementation  of  a  scaled  percentage  of  the  flexibility  scheme  for  the 
various types of machinery, according to the various power engines used and the amount 
of  encountered  problems  for  the  transition  from  Stage  III  A  to  Stage  III  B,  with  a 
proportionate adjustment of the fixed numbers of engines table.  

•  Option 4.3B – Introduce a flexibility percentage to 50% for railcars.  

•  Option  4.4B  –  Introduction  and  conditional  expansion  of  the  flexibility  scheme,  with  a 

penalty mechanism 

•  Option 4.5B - Implementation of trading system  

6. 

OPTION  ANALYSIS  –  PRELIMINARY  ANALYSIS  –  SECTORS  ALREADY  COVERED  BY 
THE FLEXIBILITY 

This  IA  will  assess  the  options  in  a  qualitative  way  with  respect  to  the  economic, 
environmental  and  social  aspects;  then  subsequently,  compare  them  against  the  criteria  of 
efficiency, effectiveness and coherence in order to establish a preferred option. This preferred 
option  will  then  be  analysed  in  greater  detail  with  respect  to  the  economic,  social  and 
environmental impacts.  

6.1. 

Analysis of Option 1A – Baseline 

This policy option of doing nothing would not be effective in reaching the objectives for the 
reasons  described  in  section  3.7.  To  recall,  by  doing  nothing  industry  would  continue  to 
struggle in the current economic climate and would not have machinery ready by Stage III B. 
Industry would then not be able to place products on the market beyond what is offered in the 
20% flexibility scheme. 

The  baseline  scenario  would  suggest  that  industry  will  in  general  be  unable  to  commit  to 
research  and  development  of  Stage  III  B  development.  According  to  data  provided  by 
industry, the sector of construction and agriculture equipment spends around 3% of its annual 
turnover  of  around  60  billion  €  to  finance  R&D  efforts.  Most  companies  face  serious 
difficulties to finance the investment necessary to ensure compliance of equipment with III B 
emission limits.  

Clients of OEMs are currently much more prudent towards buying new machinery as a result 
of the economic climate. Companies cut capital costs by extending the use of old machinery 
and  not  purchasing  newer,  less  fuel  consuming  machinery,  even  though  this  decision  has 
higher operating costs and a larger negative environmental impact in the short term. However, 
for the products that can be produced in time and compliant with Stage III B, these would be 
less harmful than Stage III A for the environment due to the stricter criteria. 

6.2. 

Option  2A.  Provision  of  loans  for  purchasing  stocked  engines  manufactured  under 
the so called sell-off period as in Article 9, section 4a of the Directive  

Another possibility to continue its operation is that an OEM could buy stocked engines from 
an engine manufacturer so he could continue to sell IIIA compliant machinery.  

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These  engines  must  be  pre-ordered  well  in  advance  by  the  OEM  from  the  engine 
manufacturer to allow sufficient time for manufacturing. The engine manufacturer is usually 
paid in advance or at a premium pre-agreed price at fixed delivery dates.  

Additionally, in order to be used after a stocking period of more than three months, engines 
require a special treatment30 that is time consuming and costly and could reach up to 5% of 
the sale price of the engine. 

Due to the economic crisis, cash flow is limited. Private banking institutions are not providing 
credit to industry because of the turbulent economic times and the subsequent uncertainty. A 
government  backed  loan  (provided  by  national  administrations  or  the  European  Investment 
Bank)  could  enable  OEMs  to  purchase  these  engines  and  continue  to  sell  machinery  using 
these engines after the entry into force of the next stage. This would enable OEMs to develop 
Stage III B machinery whilst continuing to sell Stage III A products to finance the R&D.  

However, the incentive to produce more Stage III A engines would result in a huge number of 
Stage  III  A  engines,  instead  of  development  of  the  cleaner  III  B  engines;  it  would  act  as  a 
counter incentive to innovate in more environmental friendly machines.  

Thus,  a  loan  to  purchase  stocked  Stage  III  A  engines  would  reduce  the  incentive  to  design 
compliant Stage III B machinery which is less environmentally damaging. However it cannot 
be excluded that extra demand for a fixed number of stocked Stage III A engines might lead 
to higher prices for those engines in the short term. This might require increasing the level of 
loans requested by OEMs.  

6.3. 

Option 3A. Implementation of a scrapping scheme at National level. 

The use of  a scrapping subsidy  will provide an  incentive  to  the  user  to  buy  new  machinery 
with  a  cleaner  Stage  III  B  engine,  under  the  condition  that  he  officially  destroys  his  older, 
more polluting machinery.  

This will encourage the purchase of Stage III B machinery and have positive environmental 
impacts;  however,  it  will  not  assist  OEMs  in  financing  the  R&D  to  make  Stage  III  B 
machinery  available.  Whether  the  prospect  of  a  scrapping  scheme  would  be  sufficient  to 
induce banks to hand out additional loans to OEMs for R&D remains doubtful. In addition if 
Member  States  implemented  the  scrapping  scheme  in  different  ways.  This  could  lead  to  a 
fragmentation of the internal market and to distortion of competition. 

30 

When the engine is manufactured to be stocked, it is filled with special oil. When it is placed on the machinery, this oil must be 
changed to a specific one and then with a specific fuel the engine is kept running for a few hours. After that period the oil must be 
changed again to normal and with a normal fuel it must run for some time and then it is ready and safe to be sold. The required 
time and cost of the procedure depend on the size of the engine and its power. 

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6.4. 

Option  4A  Implementation  of  alternative  types  of  provisions  under  the  existing 
flexibility scheme. 

6.4.1.  Option 4.1A Implementation of scaled percentages of flexibility for the different types 
of  machinery,  depending  on  the  problems  they  encounter  for  the  transition  from 
Stage III A to Stage III B.  

Industry's priority is to develop initially machinery that faces fewer problems and bigger sale 
volumes  and  progressively  address  smaller  niche  market  machinery  with  weight  and 
dimension  constraints.  Therefore,  an  alternative  allowance  under  the  flexibility  scheme  for 
each one of these categories of machinery would be a logical solution. 

There is no specific inventory of the machinery in each machinery type when placed on the 
market nor a relevant system to survey the number of sales. The current system, surveying the 
implementation  of  the  machinery  sold  using  flexibility  does  not  require  such  detailed 
information.  

Gathering information on the amount of problems for each specific type of machinery is also 
very  difficult.  It  is  a  common  approach  to  engine  and  machinery  development  to  use  the 
experience and progress gained from one type to another. The implementation of this option 
would  require  the  delivery  of  sensitive  information  to  the  Commission,  to  be  used  as  a 
background for determining figures of alternative flexibility. 

This  measure  would  optimise  the  trade  off  between  environmental  costs  and  economic 
benefits within the flexibility scheme provided there was perfect information on the basis of 
which a decision on how to allocate flexibility could be taken. However, this information is 
not  available  and  this  makes  this  option  unfeasible.  It  will  therefore  not  be  analysed  any 
further. 

6.4.2.  Option  4.2A  Increase  of  flexibility  percentage  to  50%  for  all  machinery  eligible  to 
use the provisions of the scheme and proportionate adjustment of the fixed numbers 
of engines to the relevant table of Annex IV.  

In  the  Technical  review  study  referred  to  in  point  2.1.,  an  increase  from  20%  to  40% 
flexibility  was  proposed.  This  figure  was  discussed  with  Member  States,  industry  and  other 
stakeholders.  The  figure  was  considered  as  sufficient  to  generate  revenues  for  the  OEMs  in 
order to fund the R&D and compliance costs. The study however concludes that an increase 
to 50% should be considered by Commission because it provides better alignment of the EU 
provisions of the flexibility scheme to the ABT system used in the USA.  

Accordingly, the table of maximum should be amended as follows31: 

31

Analysis of the calculation of the new number of engines for the amended flexibility scheme is available in Annex VIII. 

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Table 2: Maximum number of engines to be sold under the current and the revised flexibility schemes 

Engine Category 
(kW) 

Number of engines 

Number of engines 

(existing scheme up to 
Stage III A) 

(revised scheme for 
transition from IIIA to III B) 

19-37 

37-56 

56-75 

75-130 

130-560 

200 

150 

100 

50 

- 

200 

175 

250 

125 

This new percentage or the amended fixed number of engines may be distributed, according 
to the OEM's production plan, over the duration of Stage III B.  

For those engines in power categories for which no Stage III B and IV a time limit should be 
included so as to restrict the placing on the market of machinery under the revised flexibility 
scheme  after  31  December  2013.  This  date  is  selected  in  order  comply  with  the  main 
objective of the proposal, to alleviate burdens of the current economic crisis and to provide a 
'similar'  three  years  time  of  implementation  of  the  flexibility  scheme  to  all  engine  power 
categories since starting time of Stage III B differs. 

Allowing  an  extended  flexibility  in  all  categories  will  ensure  that  firms  have  the  required 
flexibility  to  cover  each  sector  and  those  products  within  each  sector.  The  additional 
flexibility does not require any up front payments from industry. 

6.4.3.  Option 4.3A. Conditional use of the flexibility scheme, with penalty mechanism 

The users of the additional flexibility for transition from Stage III A to III B would, at a later 
stage for instance for the transition from Stage III B to IV, have to pay a penalty. 

This  approach  would  limit  concerns  that  competitive  distortions  may  occur  from  enlarged 
flexibility.  For  instance,  those  firms  that  have  already  invested  in  getting  Stage  III  B 
compliant  machinery  ready  could  be  at  a  competitive  disadvantage  compared  to  those  that 
have not invested yet; as the ones who are ready are going to have to price their products to 
recoup their investments. This system reduces the adverse incentives that could be introduced 
in Option 4.2.  

However, the use of a penalty mechanism will be difficult to justify for the following reasons: 

− First of all, the necessary information procedures for managing such a system would place 
additional  burden  on  competent  national  authorities.  Those  would  have  to  monitor  the  data 
exchanged and establish a system to allow them to impose a penalty. As OEMs can choose 
the  approval  authority  among  27  Member  States,  criteria  for  the  establishment  of  penalties 
(amount  etc)  would  have  to  be  established  at  EU  level  to  ensure  a  non-discriminatory 
treatment and to avoid an unbalanced application of the Directive. 

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Taking into consideration the rather limited life-time of the modified flexibility scheme, the 
introduction of a new penalty system does not seem to be proportionate, especially against the 
background  that  recently  a  simplification  of  the  management  procedures  on  flexibility  has 
been introduced into the Directive with the adoption of Directive 2010/26/EU.  

−  Secondly,  the  implementation  of  such  a  penalty  mechanism  would  also  entail 
disproportionate efforts on the market surveillance which would be continued well beyond the 
limited duration of the increased flexibility. 

6.4.4.  Option 4.4A. Implementation of a trading system  

A trading system by which firms could buy additional flexibility from those firms that do not 
need it would provide a strong incentive to comply as soon as possible with the new emission 
limits.  Firms  that  had  completed  all  of  the  tasks  in  order  to  reach  Stage  III  B  would  be 
rewarded whilst those that hadn't would be penalised.  

The price of the additional flexibility would be fixed by the market. It would be necessary to 
establish the framework for this market.  

The placing of such a complex system in a short time scale would be disproportionate to the 
expected achievements. The time taken to develop this trading system would be too long for 
meeting the immediate effects expected. Additional EU / national resources would be required 
to set up and regulate this system. This scheme would not help the firms who are experiencing 
problems in cash flow for R&D to reach Stage III B. Those firms not ready for Stage III B 
would either have to pay for flexibility or for additional R&D. 

6.4.5.  Comparison of the Options 

The options will now be assessed with respect to the efficiency, effectiveness and coherence 
with the corresponding analysis presented in the table below. 

•  Option 1A - No action = Base line option 

Is not effective in reaching the objectives and industry would continue to struggle and would 
not have compliant machinery ready for Stage III B. 

•  Option 2A - Provision of loans for purchasing stocked engines  

This would provide OEMs access to finance to purchase Stage III A engines and would allow 
them  to  continue  to  generate  revenue  so  that  they  could  develop  Stage  III  B  compliant 
machinery.  However,  the  control  of  stocked  engines  and  surveillance  by  type  approval 
authorities of Member States is close to impossible, since such a surveillance system currently 
does not exist and it would require time and financial resources to be established, certified and 
operated in practice. This scheme is similar in its effect to extending flexibility by allowing 
OEMs to put Stage III A compliant engines on the market in Stage III B, but will front load 
engine  sales  which  could  introduce  capacity  constraints  for  the  production  of  Stage  III  A 
engines. It is more expensive for OEMs due to the stocking (additional fees and transportation 
costs)  involved  and  is  much  more  difficult  to  monitor  by  authorities  and  includes  the 
associated  administrative  costs  of  providing  loans.  Therefore  this  option  is  not  efficient 
compared to options 4.A.  

•  Option 3A - Implementation of a scrapping scheme 

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This scheme will stimulate demand for Stage III B compliant machinery but will not assist in 
helping  OEMs  develop  compliant  machinery.  Substantial  funds  will  be  required  to  provide 
subsidies  under  a  scrapping  scheme  and  distortions  of  the  internal  market  could  occur  from 
diverging national schemes. Its compliance with state aid rules is also questionable.  

•  Option 4.1A- Implementation of a scaled percentage of the flexibility scheme  

This system would be very effective in meeting the objectives and providing targeted support 
where  additional  flexibility  was  required.  However,  there  is  no  specific  inventory  on  which 
these assessments could be made, therefore, this system is not feasible. 

•  Option 4.2 A Increase of flexibility percentage to 50% 

A uniform increase to 50% would avoid the information issue that is apparent in Option 4.1 
and would provide assistance to industry in the short term. This additional flexibility could be 
introduced  without  setting  up  any  new  systems  and  therefore  could  provide  an  immediate 
response to the crisis.  

However, to put this extension into context, the additional flexibility to 50% is the equivalent 
of a 16 week delay in the introduction of Stage III B32.If an industry will not be in a position 
to produce Stage III B engines, after the use of its allowance of 50% of engines of Stage III A, 
then it will disappear of the market.  

There  is  a  trade  off  between  the  economic  incentives  and  the  environmental  pressures.  In 
order  that  industry  can  ensure  production  of  Stage  III  B  machinery,  and  thus  be  able  to 
continue  selling  in  the  future,  there  is  a  negative  impact  on  the  environment  as  the 
introduction of stricter Stage III B compliant machinery is being delayed.  

According  to  information  from  industry,  Stage  IV  engines  are  strongly  considered  as  a 
continuation of Stage III B engines. Depending on the type of technology used, and in order 
to comply with the stricter NOx emissions limits in Stage IV engines, compared to those of 
Stage  III  B,  'minor'  adaptations  are  expected  by  installing  a  more  efficient  anti-NOx  after 
treatment system. Therefore it would be logical to assume that, in order to diminish R&D and 
compliance  costs,  the  preferred  option  would  be  to  perform  the  redesign  of  the  engines  as 
soon as possible and only once (from Stage III A to Stage III B covering as much as possible 
the  needs  for  Stage  IV)  instead  of  having  to  do  similar  adaptation  twice  (once  for  the 
transition  from  Stage  III  A  to  Stage  III  B  and  then  from  Stage  III  B  to  Stage  IV).  If  this 
logical  assumption  is  followed  the  50%  flexibility  would  be  a  strong  incentive  to  a  timely 
adaptation of engines since indirectly would cover the majority of the compliance costs also 
for  Stage  IV  and  would  provide  industry  additional  time  to  amortise  the  additional 
investments.  

•  Option 4.3A - Conditional use of the flexibility scheme, with penalty mechanism 

This option introduces the idea of a penalty for those industries that did not reach Stage III B 
compliance  in  time,  by  penalising  them  in  the  future.  However,  such  a  system  would  be 
difficult to implement and enforce. 

32

If all of the flexibility was used straight away in the current 20% flexibility scheme then the manufacturer could delay using Stage 
III  B  by  10  weeks,  instead,  under  the  proposed  50%  flexibility  the  manufacturer  can  delay  by  26  weeks.  Therefore,  assuming 
constant sales, this is an extension of 16 weeks. 

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•  Option 4.4A - Implementation of trading system  

Here the market would decide whether or not firms would purchase additional flexibility or 
spend  the  money  on  R&D  to  reach  Stage  III  B,  therefore,  optimising  the  trade-off  between 
economic development and environmental objectives. The system would be very complex to 
put into place in such a short time scale. The time taken to develop a working system would 
not be effective in meeting the immediate requirements of industry. 

Coherence  also  included  whether  the  options  could  be  possible  to  be  implemented  in  short 
time and also be enforceable. 

Table 3: Comparison of the listed options:  

  Effectiveness 

Efficiency 

Coherence 

Option 1A – Baseline 

Option 2A - Government loan 

Option 3A - Scrapping scheme 

0 

+ 

+ 

Option 4,1A – Scaled Flex 

+++ 

Option 4,2A - Flex to 50% 

Option 4,3A – Penalty  

Option 4,4A - Trading scheme 

++ 

+ 

++ 

6.5. 

Conclusion on preliminary Analysis  

0 

- 

+ 

+++ 

+ 

++ 

+++ 

0 

- 

- 

-- 

+ 

-- 

-- 

As a result of the above analysis, it is concluded that extending the flexibility to 50% is the 
most  appropriate  measure  to  ensure  that  the  objectives  of  the  policy  are  met  in  the  sectors 
where  the  flexibility  is  already  available.  The  impacts  of  this  will  be  measured  against  the 
baseline in a quantitative way in section 7.1.  

OPTION  ANALYSIS  –  PRELIMINARY  ANALYSIS  –  SECTORS  NOT  COVERED 
BY THE FLEXIBILITY - RAILCARS 

Due to the receding analysis, it is clear that some of the options, are not efficient in reaching 
the  objectives,  and  are  therefore  unfeasible.  It  does  not  add  value  to  repeat  the  analysis  for 
those options  where that is the case. The analysis  of  the  options  therefore  will  focus  on  the 
baseline, introducing flexibility of 20% and introducing flexibility to 50%. To avoid repeating 
the arguments made above that apply equally to this sector, these two options will be analysed 
in section 7.2 in detail against the baseline 

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7. 

IMPACTS OF PREFERRED OPTION  

The  environmental,  social  and  economic  impact  of  preferred  policy  option  of  the  identified 
policy options will be analysed in the following section. Description of methodology for the 
sectors eligible to use the flexibility scheme 

The  analysis  of  the  impact  is  based  on  data  coming  from  industry,  EUROSTAT  and  the 
European Handbook on External Costs33 (CE Delft, 2008), with a quantitative estimate of the 
gains that the amended flexibility would provide, followed by a multi-criteria analysis. 

Some of the requested economic data provided by industry, including commercially sensitive 
data, was submitted to the external consultant. 

All  contributions  provided  during  stakeholders  meetings  and  especially  during  the  public 
consultation for this proposal have been taken into account.  

Compliance  costs  were  determined  initially  for  a  typical  single  machine  or  engine.  These 
costs were then extrapolated to the whole EU. The major cost categories that were taken into 
account include: research and development costs, variable production engine costs, machinery 
redesign costs, after treatment devices costs and fuel costs.  

Environmental impacts have been determined based on external costs of calculated emissions. 
Emissions have been calculated taking into account machinery/engine stocks, average use and 
lifetime of machinery. 

Socio-economic impacts have been derived from the compliance costs and the specific market 
situations. 

7.1.1. 

Environmental impact  

The overall impact from this additional amount of emissions is not expected to significantly 
affect the Member States obligations under the CAFE program. This legislation requires MS 
to meet certain ceilings for ambient air quality in defined geographical areas34.  

The  effect  on  the  environment  will  be  even  smaller  than  that  estimated  in  the  Technical 
Review due to the impact of the crisis as there will be reduced numbers of new engines placed 
on the market than what was the basis of the calculation. An average drop of sales of at least 
up to 25% and for some sectors up to 60% is expected. 

As a large part of the NRMM are not used in problematic and highly populated areas which 
face  the  highest  local  concentrations  of  pollutants,  the  overall  impact  from  this  limited 
additional amount of emissions is not expected to be significant. Furthermore some cities and 
regions in the EU are reinforcing their public procurement rules in a way that only machines 
will be allowed to operate in urban areas which meet the most stringent emission standards.  

Emission limits as provided for by the Directive are for NOx around 30% lower and for PM 
around 90% lower35 in Stage III B than in the previous Stage III A. The environmental impact 

33

34

The European Handbook on External Costs can be found at the link: 
http://ec.europa.eu/transport/sustainable/2008_external_costs_en.htm  
Directive 2008/50/EC L 152 11.6.2008 p1, Annex III 

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of a modified flexibility scheme is estimated under the assumption that all OEMs will use the 
full  percentage  of  the  flexibility  scheme  in  the  first  year  after  the  introduction  of  the  new 
limits of Stage III  B. In the case of 50% flexibility, from all NRMM (100%) placed on  the 
market, only 50% of the machinery would comply with Stage III B emissions limits, while the 
remaining 50% would comply with the emission limits of Stage III A. 
Based on 2005 figures36, the average share of emissions resulting from new engines put on the 
market during one year are around 5% of the total  emissions of  non-road  mobile machines. 
The remaining 95% of emissions are allocated to engines already operating on the market. 

The  amendment  of  flexibility  from  20%  to  50%  would  increase  the  emissions  of  newly 
produced machinery within the first year by about 9% compared to the current scheme, used 
as a base line. However, the overall NRMM compression ignition (diesel) engine emissions 
would increase for the first year under the 50% flexibility by around 0,3% compared to the 
current  20%  scheme.  In  absolute  numbers  the  amounts  of  emissions  can  be  quantified  to 
about 0,66 kt for PM and 9,8 kt for NOx per year.  

Comparative graphs presenting NOx and PM emissions for the current 20% and the proposed 
50% flexibility scheme can be found in Figure 1. and Figure 2.  

Figure 1: Total NOx emissions for all CI engines in case of 20% flexibility and of 50% 
flexibility 

All CI engines

1400

1200

1000

800

600

400

200

]
t
k
[
s
n
o
i
s
s
mi
e
x
O
N

Flex20
Flex50
Flex50-Flex20

0
2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

Environmental costs were calculated based on the emission model for CI engines, including 
assumptions  and  information  provided  by  industry  and  the  JRC  emissions  inventory,  as 
described in detail in Annex 7.8 of the IA study by ARCADIS. 

35

36

More information on the reduction % of pollutants of the different stages of the Directive can be found in table 3. of Annex III.  
Summarised sales table of new  machinery to be placed on the  market and table of existing  machinery, covered by the NRMM 
Directive, are available at Annex V 

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Figure 2 : Total PM emissions for all CI engines in case of 20% flexibility and of 50% 
flexibility 

All CI engines

80

70

60

50

40

30

20

10

]
t
k
[
s
n
o
i
s
s
i
m
e
M
P

0
2005

Flex20
Flex50
Flex50-Flex20

2010

2015

2020

2025

2030

2035

2040

2045

2050

The  environmental  costs  represent  the  cost  generated  from  the  additional  emissions  of  the 
engines  under  the  amended  50%  flexibility  scheme  compared  to  the  current  20%  flexibility 
scheme.  The  conclusion  of  the  study,  according  to  the  methodology  followed  based  on  the 
Net Present Value (NPV), estimates, per type of pollutant, the environmental costs resulting 
from a 50% flexibility compared to the current 20% flexibility, in the magnitude of: 

Table 4: Environmental costs occurred during 2008 – 2030 

Pollutant 

PM 

NOx 

Total

50% flexibility (Million Euros) 

- 200 

- 350 

- 550 

The  estimated  impact  of  an  enlarged  flexibility  scheme  is  0.3  %37  of  the  overall  emissions 
(both of PM and NOx) 

This  figure  represents  the  total  cost  over  the  period  of  2008-2030,  while  for  the  present 
Impact Assessment the benefit has been calculated for the period of three years as covered by 
the accompanying proposal. 

These conclusions on the technical review of the Directive are based on figures dating back to 
before  the  economic  crisis.  Reports  from  industry  on  the  drop  of  sales  and  diminished  fuel 
consumption,  in  the  NRMM  sector,  indicate  that  a  small  decrease  in  the  emissions  is  most 
probable. An assessment of the impact of placing on the market a smaller number of engines 
as a result of the economic crisis is not yet available. 

Available  information  to  Commission  Services  via  the  notification  requirements  of  the 
Directive on the use of the flexibility scheme, for the transition from Stage II to Stage III A, 

37 

Draft Impact Assessment p 15 

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28 

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clearly indicate that the total allowance of OEMs to place on the market 'flexed' engines is not 
depleted in most of the power categories(more than 50% is still available). On the very small 
power category however, the total allowance is covered almost by 100%.  

As reported, the additional flexibility has the impact of increasing the availability of Stage III 
A rather than Stage III B by just 16 weeks.  

As CO2 is the natural product of burning fossil fuel, its emissions will bring changes to the 
environment.  Although  it  may  seem  obvious  that  the  gained  experience  from  other  sectors' 
approach on the efforts to reduce CO2 could be easily adapted and introduced for the NRMM, 
the  differentiation  of  Directive  97/69/EC  (dealing  with  engines  not  machinery)  requires  a 
different approach that only recently has been initiated.  

CO2 emissions from engines are currently not reported and as no classification of machinery 
according to type of use is available (not mandated by the Directive), no estimate can be given 
on the impacts of increased flexibility or any other tentative measure reducing CO2 emissions.  

7.1.2.  Economic impact  

The underlying assumptions applied for the economic impact analyses are described hereafter. 
The main economic impact of the proposed measure are related to compliance costs which, as 
described  under  3.1,  include  mainly  research  and  development  costs  as  well  as  investment 
costs.  

The  assessment  is  based  on  the  data  available  from  different  sources.  Industry  reported 
relative increases in R&D costs around the date of introduction of the new stages. Additional 
information on the R&D budget for the sector was obtained from EUROSTAT. Some of the 
factors,  not  possible  to  be  quantified  due  to  lack  of  detailed  information  from  the  industry, 
and therefore not taken into account include:  

•  increased learning & training 

•  increased unavailability of manpower 

•  increased stock piling 

•  increased unavailability of low volume products 

•  standstill state of the art 

•  increased peak load certification bodies 

•  increased warranty cost due to rush released 

A simplified approach was used to quantify the impact of the flexibility scheme enabling the 
reduction  of  peak  efforts  of  R&D  costs  and  the  possibility  to  amortise  these  costs  over  an 
extended  time  period  according  to  industry  planning.  The  assumptions  and  clarifications  of 
this approach include: 

•  Estimates for the potential relative gains in R&D budget, provided by industry, due to the 
increase  in  flexibility  for  the  typical  period  around  the  introduction  of  new  emission 
standards,  are  indicated  in  the  second  and  the  fourth  column  in  Table  6.  The  larger  the 

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29 

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flexibility percentage is, the lower the peak costs of R&D are expected in the same period 
of  time.  This  difference  in  peak  costs  for  the  two  different  options  of  percentage  of 
flexibility, are also presented in Figure 3. 

Figure 3. Illustration of how flexibility reduces peak R&D efforts 

•  Use of 2005 EUROSTAT figures on R&D. The concerned sectors considered are: DK29 
Manufacture of machinery and equipment, DK2911 Manufacture of engines and turbines, 
excluding aircraft, vehicle and cycle engines. Parts of DK293_TO_DK296 were included 
on  Manufacture  of  agricultural  and  forestry  machinery;  Manufacture  of  machine-tools; 
manufacture of other special purpose machinery.  

•  Only half (48%) of the R&D budget is considered, as only half of the machinery sales is 
concerned  with  compliance  to  the  future  emission  limits  for  NRMM  machinery  with  CI 
engines.  No  discrimination  is  taken  into  account  on  the  aspect  that  bigger  engines  (with 
smaller series and sale figures) need probably more efforts to comply with the thresholds. 

•  For  the  calculation,  the  introduction  of  Stage  III  B  in  2012  and  Stage  IV  in  2015  were 
assumed as an average, to compensate for the different implementation dates in both stages 
for the various power categories of engines. The initial year is set to 0 for the year 2013. 
For this year, the theoretical gain has not been taken into account.  

•  For  each  year,  the  relative  gain  in  R&D  is  multiplied  with  the  total  R&D  budget  and 
discount of the amount to 2008 (date of the beginning of the study) at a 4% discount rate. 

The  Net  Present  Value  of  saved  compliance  costs  of  the  use  of  the  amended  flexibility  are 
presented in more detail in Table 5 for the period of 2010 to 2013 which has been chosen for 
the revised flexibility scheme. The calculation is however based on a longer period ending in 
2016.  

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Table 5: Economic Gains of 50% flexibility compared to 20% flexibility (million EUR) 

Stage X 

Year 

% gain in R&D 

Monetized gain 

discounted gain 

2010 

2011 

2012 

2013 

0.1 

0.2 

0.3 

0.2 

Total discounted period gain  

Total saved compliance cost 

496 

991 

1 487 

458 

881 

1 271 

991 

No gain due to overlap with next stage 

2 610 

2 124 

The  NPV  of  saved  compliance  costs  of  the  introduction  of  50%  flexibility  compared  to  the 
20% flexibility for the period under consideration is around Eur 2.1 billion for EU 1538. This 
is  the  amount  of  money  that  is  saved,  if  the  flexibility  used  for  placing  on  the  market 
machinery with engines of Stage III A is 50% compared to the current 20%. 

7.2. 

Description  of methodology  for the sectors excluded from  the  use of the flexibility 
scheme  

In this chapter the environmental and compliance costs are calculated for railcars which are 
currently not covered by the flexibility scheme. The assumptions made in the analysis of the 
sectors eligible to use the flexibility scheme are maintained. The unit values for external costs 
for EU were taken from the European Handbook on external costs (CE Delft, 2008).  

The methodology used included: 

•  Calculation of the difference in annual NOx and PM emission between an average IIIA and 
an  average  III  B  engine,  using  the  same  technical  assumptions  already  mentioned  in 
section 6.1.1 and 6.1.2. of this IA, 

•  Combination  of  the  previously  mentioned  data  with  the  unit  external  costs  to  obtain  the 
annual difference in external costs between an average IIIA and an average III B engine for 
each power category. 

•  Combination of the assumed engine lifetime expressed in hours with the average hours of 

use per year, to obtain the expected engine lifetime in years. 

•  Estimate  of  an  external  consultant  of  the  average  number  of  engines  put  yearly  on  the 

market in the 5 years preceding the beginning of Stage III B. 

•  Combination of the previous estimate with the allowed flexibility to obtain the number of 

IIIA engines that can be put on the market in the first three years of Stage III B;  

38

The  calculations  are  based  on  the  EU15  market  due  to  the  fact  the  base  year  has  been  calculated  for  2005  and  no  data  were 
available for EU12 

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The number of railcars with new engines to be placed on the market under proposed options 
of the flexibility scheme is summarized in the following Table 6. 

Table 6: Railcar flexibility for 20% and 50% flexibility 

Years for placing 
on the market 

Annual number of 
engines under 20% 
flexibility 

Annual number of 
engines under 50% 
flexibility 

Year of 
withdrawal from 
the market 

2012 - 2014 

52 

129 

2018-2020 

•  Calculation of compliance costs is made as the additional cost of a III B engine compared 
to a IIIA engine. Saved expenses are thus mainly concentrated at the beginning of Stage III 
B. 

•  Since  for  all  applications  more  than  one  technical  solution  for  compliance  to  III  B  is 
possible, it is assumed that the OEM will always choose the solution with the lowest net 
compliance costs, and the same solution will be chosen for each application, independently 
of the option and the flexibility scheme under consideration. 

•  As the previous point suggests and with the comparative figures presented by industry on 
Stage  III  B  compliance  costs  for  railcars,  the  analysis  of  impacts  on  granting  the  use  of 
flexibility  to  railcars,  includes  only  the  less  costly  technical  solution39.  These  costs  are 
presented in the following Table 7. 

39

Diesel Particulate Filter and Exhaust Gas Recirculation 

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Table 7. Compliance costs for railcars per unit and per technology in Euros  

Diesel  Particulate  Filter  and  Exhaust  Gas 
Recirculation 

1 

Selective Catalytic Reactor 

Investment cost 

Operating cost 

NPV (EUR) 

15 000 

4 000 

38 000 

15 000 

5 000 

50 000 

•  For the calculation of compliance costs, the made assumption including engine life time of 
25 000 hours with a load factor fraction of 0.3 and 3 500 hours of use per year, an average 
life time of approximately 7 years is calculated. 

•  Since additional external costs are directly proportional to the number of IIIA engines that 
are  in  operation,  they  thus  first  increase  until  all  IIIA  engines  allowed  under  flexibility 
have been put on the market, and remain constant until the first batch of IIIA engines are 
reaching  the  end  of  their  economic  life.  After  that  the  total  additional  external  costs 
decline. 

•  The calculation of the net present value (NPV) of additional costs and benefits was done 

under the same discount rate of 4%. 

7.2.1.  Environmental impacts 

The  environmental  impacts  from  the  application  of  the  flexibility  scheme  to  railcars  are 
quantified and presented in Euros, according to the used technology and under the assumption 
that all engines under the 20% or 50% flexibility will be placed on the market in a three year 
period after the implementation of Stage III B, for the fleet of railcars which are equipped of 
engines having a power range situated between 130 and 560 kW.  

Based on the emission factors, the load factor fraction of 0.3, and the yearly operational hours 
(3  500  hrs),  as  provided  by  an  external  consultant,  the  difference  in  annual  NOx  and  PM 
emissions (in quantities as expressed in Table 8) between a typical III A and III B railcar can 
be estimated. The cost figures are presented in the following Table 9. 

Table 8. Difference of emissions between Stage III A and Stage III B for railcars per year40 

POLLUTANT 

TONNES (per unit) 

NOX 

PM 

0.672 

0.0315 

40

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Table  9.  Environmental  costs  related  to  flexibility  %  for  railcars  for  both  NOx  and  PM 
(NPV)41. 

Percentage of flexibility (%) 

Environmental costs (Euros) 

20%  

50% 

7.2.2.  Economic impact 

3 400 000  

8 500 000 

Calculations  related  to  the  compliance  costs  of  engines  placed  on  the  market  under  the 
proposed  %  of  the  flexibility  scheme,  using  DPF+EGR,  resulted  in  the  figures  presented  in 
the following Table 10. 

Table 10. Saved compliance costs related to flexibility % for railcars (NPV for 3 years) 

Percentage of flexibility (%) 

NPV of saved compliance costs (Euros) 

20%  

50% 

4 900 000  

12 500 000 

7.3. 

For the SMEs  

The  existing  flexibility  scheme  already  considers  the  need  to  protect  small  volume  OEMs 
which have lower resources for developing new technology as the current system allows firms 
to  either  place  a  fixed  number  of  machinery  or  a  percentage  of  the  previous  Stage  on  the 
market. The proposal, by scaling the fixed number by the same proportion as the percentage 
increase (2.5 times), maintains the logic of a system already preferred by SMEs.  

The  possible  impacts  on  SMEs  which  the  policy  options  for  revising  the  directive  as 
suggested by JRC, were assessed in the impact assessment study carried out by Arcadis. After 
the  adoption  of  the  Commission's  Impact  Assessment  guidelines  in  January  2009  it  was 
agreed to commission an additional SME focussed complement which Arcadis will finalise in 
September  2009.  This  complementary  study  covers  the  relevant  target  group  including 
manufacturers  of  both  machinery  and  engines,  as  well  as  professional  customers  of  the 
machinery.  Information  collected  so  far  suggests  that  compliance  costs,  mainly  R&D  and 
conformity  assessment  costs  will  weigh  relatively  more  upon  SMEs.  Raising  the  necessary 
capital  may  be  more  difficult  for  SMEs  which  also  have  a  lesser  potential  for  cost  pass-
through compared to large enterprises. The contractor also indicated that only very few OEMs 
are also engine manufacturers of NRMM and that the professional customers are mainly very 
small entities. 

No  SMEs  are  identified  operating  in  the  railcars  sector  according  to  the  ARCADIS  Impact 
Assessment study. 

41 

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8.  EFFECT OF THE PROPOSED MEASURE COMPARED TO THE BASE LINE 

The  use  of  the  flexibility  scheme  generates  a  negative  environmental  impact,  a  benefit  in 
compliance  cost  including  a  decrease  in  peak  R&D  investments  costs,  since  these  costs  are 
spread over a longer period.  

In order to allow the proposed measure that is limited in its duration, to produce its effect on 
the industry sectors covered it will be necessary that it enters into force as early as possible 
and is preferably applied immediately after the ordinary legislative procedure is finalised as 
the  amended  flexibility  scheme  will  expire  by  31  December  2013.  For  any  delay  in  the 
implementation of this measure the estimated monetised gains as provided in table 5 need to 
be decreased accordingly.  

In  the  present  IA  an  analysis  of  the  impact  of  an  amended  flexibility  scheme  had  to  be 
performed for the sectors already having the possibility to use a basic 20% with a proposed 
increase to 50% and for the sectors not eligible to use the scheme until now. 

As  expected  and  seen  in  the  analysis,  the  proposed  measure  covers  a  large  variety  of 
machinery,  characterised  by  heterogeneous  user  markets,  a  wide  range  of  feasible  technical 
solutions, different  investment  costs  and retail prices, which are not easily comparable. The 
comparisons of the financial figures which are based on the figures reported during the short 
period of consultation, are presented in the following Tables: 

Table 11. Comparison of options for increased flexibility for sectors already covered by the 
flexibility scheme (NPVs, all costs in Euros) 

Environmental cost 

Saved Compliance costs 

FLEXIBILITY PERCENTAGE 

20% 

50% 

550 000 000 

2 124 000 000 

The adoption of the increased flexibility is estimated to have monetised impacts in the order 
of  EUR  550  million.  This  compares  with  a  saved  compliance  cost  of  EUR  2.1  billion,  thus 
implying that the environmental costs are outweighed by the benefits. 

Table  12.  Comparison  of  options  for  railcars  for  the  period  applicable  for  the  proposed 
measure (constant prices in Euros) 

Environmental cost 

Saved Compliance costs 

FLEXIBILITY PERCENTAGE 

N.A. 

20% 

3 400 000 

4 900 000 

50% 

8 500 000 

12 500 000 

Although  it  is  apparent  that  the  use  of  50%  flexibility  for  railcars  results  in  a  bigger  total 
saved  cost  figure  than  the  20%,  the  preferred  policy  option  proposed  in  this  measure  is  the 
20% for this sector. The reasons for this proposal include: 

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•  Producers of railcars are for the first time proposed to become eligible to use the provisions 
of  the  flexibility  scheme,  so  it  is  more  logical  to  be  granted  a  smaller  %  in  order  to 
safeguard the easier transition, as a first step, to Stage III B. 

•  Railcars are mostly ‘borrowing’ engines from the heavy duty vehicles (trucks, busses e.t.c.) 
and  according  to  the  industry,  it  is  required  only  to  adapt  at  some  or  more  extend  the 
engine to fit to the body of the railcar. Therefore the need to use Stage III A engines is not 
that  imperative  since  compliant  to  Stage  III  B  technology  already  exists  and  should  be 
encouraged. 

•  Due  to  the  type  of  the  machinery  (bulky  and  quite  compact)  the  time  required  for  this 
adaptation  can  be  substantial  and  resources  demanding.  This  proposed  measure  will 
provide some additional time so investments may be amortized in a longer period of time 
and the saved costs can be allocated to the better development of Stage III B engines for 
dedicated railcar usage. 

•  The incentive of the Directive and will of the legislator for cleaner engines, for technical 
progress and placement on the market of railcars using Stage III B compliant engines must 
not  in  any  way  be  compromised  by  the  granting  the  possibility  to  continue  using  more 
Stage III B engines than required to overcome the impacts of the economic crisis and stay 
in business seeking a competitive advantage. 

•  The  20%  of  proposed  flexibility  scheme  is  expected  to  act  as  an  upper  limit  to  the 
placement of Stage III A engines to the market where a lot of railcar operators exist, but at 
the  same  time  provide  them  the  opportunity  to  stay  in  business  so  they  can  finance  the 
completion of development of Stage III B engines. 

9.  MONITORING AND EVALUATION 

An  assessment  of  the  impacts  of  the  enlarged  provisions  of  the  flexibility  scheme  after  its 
implementation and completion will be based on information provided by the industry and by 
Member States. 

Key indicators to assess the effectiveness of this initiative could be the use of the flexibility 
scheme until end of 2013, the development of the number of firms going out of business, and 
the development of NOx and PM emissions attributed to NRMM. 

Article  4  of  the  Directive  requires  the  type  approval  authorities  of  each  Member  State  to 
notify  to  the  Commission  the  relevant  data  on  the  type  approved  engines.  Furthermore  the 
flexibility scheme as provided in Annex XIII of the Directive obliges the OEM to notify all 
relevant data concerning the application of the scheme including inter alia the cumulative data 
on the number of engines placed on the market under the flexibility scheme. 

It  is  the  Commission’s  intention,  independently  from  the  current  proposal,  to  invite  the 
Member States to communicate precise information about the use of the flexibility scheme on 
the basis of the provisions specified in Annex XIII of the Directive 97/67/EC. It also intends 
to evaluate the impact of the revised flexibility measure at the end of the period defined in the 
accompanying proposal, i.e. in 2013 and to draw the necessary conclusions from the results 
obtained. If appropriate,  monitoring  and evaluation arrangements  for this initiative could be 

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integrated into the monitoring of the broader revision of the Directive foreseen for the end of 
2010. This will be discussed in the corresponding impact assessment. 

ANNEX I : GLOSSARY 

Adsorption: the accumulation of atoms or molecules on the surface of a material.  

Engine family: a manufacturer's (engines) grouping of engines which, through their design, 
are  expected  to  have  similar  exhaust  emission  characteristics  and  which  comply  with  the 
requirements of this Directive 

CECE: Committee for European Construction Equipment 

CEMA: European Agricultural Machinery 

C.I.: An engine that works under the compression-ignition principle, e.g. diesel engine 

CO: Carbon monoxide  

DPF: Diesel Particulate Filter 

EGR: Exhaust Gas Recirculation 

Engine  manufacturer:  means  the  person  or  body  who  is  responsible  to  the  approval 
authority  for  all  aspects  of  the  type-approval  process  and  for  ensuring  conformity  of 
production of the engines.  

HC: Hydrocarbons 

Non-Road  Mobile  Machinery  (NRMM):  means  any  mobile  machinery,  transportable 
industrial  equipment  or  vehicle  with  or  without  body  work,  not  intended  for  the  use  of 
passenger- or goods-transport on the road, in which an internal combustion engine is installed. 

NOx: Nitrogen oxide 

Original  equipment  manufacturer  (OEM):  means  a  manufacturer  of  a  type  of  non-road 
mobile machinery (final product). 

PT: Particulates 

UN ECE: United Nations Economic Commission for Europe (Geneva) 

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ANNEX II: REFERENCE DOCUMENTS 

Final Report Technical Review - DG JRC- 28-11-2008 

Administrative arrangement for a Technical Review of Directive 97/68/EC, carried out by DG 
JRC, on behalf of DG ENTR, September 2006 - September 2008. 

Final Report of the IA study - ARCADIS -January 2009 

External specific contract, under LOT5 framework contract, for an Impact Assessment study 
of  options  presented  in  the  Technical  Review  of  Directive  97/68/EC,  carried  out  be 
ARCADIS N.V., April 2008 - January 2009. 

Final Report of the IA for the sector not covered – ARCADIS – May 2009 

Final  report  of  an  IA  study,  under  LOT5  framework  contract,  of  the  impacts  on  possible 
inclusion of the possible inclusion to the flexibility scheme for sectors currently not covered 
by Directive 97/68/EC (rail sector, inland waterway vessels) – carried out by ARCADIS 
N.V. – May 2009. 

All reference documents are published on http://ec.europa.eu/enterprise/index_en.htm 

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ANNEX III: Summarized Stages table of Directive 97/68/EC 

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ANNEX IV: Flexibility scheme 

As  provided  in  Article  IV  and  in  Annex  XIII  of  Directive  97/68/EC  on  NRMM  emissions, 
any OEM that wishes to make use of the flexibility scheme shall request permission from an 
approval authority to purchase from his engine suppliers, in the period between two emissions 
stages, the quantities of engines that do not comply with the current emission limit values, but 
are approved to the nearest previous Stage of emission limits. 

The  flexibility  scheme  applies  for  machinery  with  compression  ignition  engines  (eg  diesel) 
with a power from 19kW to 560 kW.  

The  number  of  machinery  placed  on  the  market  under  a  flexibility  scheme  shall,  in  each 
engine category, not exceed 20% of the OEM's annual sales of machinery 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  machinery  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 machinery in 
the EU. 

As  an  alternative  the  OEM  may  seek  permission  for  his  engine  suppliers  to  place  on  the 
market a fixed number of machinery under the flexibility scheme. The number of machinery 
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 

150 

100 

50 

The  fixed  number  of  engines  scheme  is  intended  for  very  small  producers  that  would 
otherwise not be able to effectively use the scheme. 

Any OEM may apply to the type approval authority of a Member state to be allowed to use 
the provisions of the flexibility scheme for each engine power category. The placing on the 
market of machinery (with new engines) under the scheme can be spread over the duration of 
the  next  'cleaner'  stage,  in  different  ways,  provided  the  total  allowance  of  20%  of  sales  per 
power category is not exceeded. (ex. for the duration of Stage III A - 5 years for the power 
category of 130-560 kW - the 20% can be all used in the 1st year, or 10% in the first year 10% 
in the second, 0% in the 3rd, 4th and 5th, or 10% in the first, 5% in 2nd and 5% in 3rd, 0% in 4th 
and 5th , e.t.c.), according to the needs and business plan of the OEM. 

The OEM may also choose for machinery with engines of one engine power category to apply 
the percentage of sales of the previous year and for another engine power category to use the 
fixed  engines  number  as  mentioned  in  the  relevant  table;  he  cannot  use  both  options  in  the 
same power category.  

The number of machinery allowed to be placed on the market under the maximum 20% per 
power category, is calculated as the average of sales of the machinery placed on the market in 

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EU  for  the  previous  5  years,  counting  back  from  the  day  of  the  application  to  the  type 
approval  authority  of  a  Member  State  for  using  the  flexibility  scheme.  If  the  OEM  has  not 
been in business for 5 years, then the average is calculated for the period that the OEM is in 
business.  

As a result, after the approval of using the flexibility scheme, the number of machinery to be 
placed on the market under the flexibility scheme remains the same and is not recalculated as 
years pass by in the 'cleaner' stage.  

The main advantage of the scheme is that the sooner the application for using the flexibility 
scheme is granted, the bigger numbers of machinery may be placed on the market, especially 
in  times  where  technical  changes  must  be  implemented  or  like  the  present  situation  when 
under the pressure of the economic crisis, sales are dropping. 

The OEM cannot transfer part or the total of his flexibility allowance to another OEM or from 
one power category to the other. 

The provisions of the flexibility scheme are allocated to power categories of the used engines, 
regardless of the number of engine families42 type approved in that category.  

It  must  be  noted  that  as  a  result  of  the  way  that  the  flexibility  scheme  is  implemented,  all 
environmental  impacts  remain  the  same  in  total,  regardless  of  the  time  of  the  placing  of 
engines on the market, since the total allowance of 20% per power category is respected. 

The  application  for  the  use  of  the  flexibility  scheme  may  be  delivered  to  only  one  type 
approval authority of any Member State in the EU. The provisions of the scheme make it very 
clear  that  the  type  approval  authorities  of  one  Member  State  disseminate  to  other  Member 
states information on granting approvals for machinery being placed on the market under the 
flexibility scheme. As a result, the OEM cannot apply for the use of the flexibility scheme to 
more than one Member States. 

Examples of machinery, eligible to use the flexibility scheme, include: 

–  for  construction  machinery  -  wheel  loaders,  bulldozers,  crawler  tractors,  crawler  loaders, 

truck-type loaders, off-highway trucks, hydraulic excavators etc. ,  

–  for forestry machinery - tree cutters, tree loaders etc.,  

–  for road maintenance machinery - motor graders, road rollers, asphalt finishers etc,  

–  mobile cranes, fork-lift trucks, material handling equipment, 

–  self-propelled agricultural vehicles - planting, spraying, irrigating machinery e.t.c. (tractors 

are excluded and covered by a specific directive),  

–  smaller agricultural machinery - types of machinery were the user is following on foot,  

–  harvesters - cotton, wheat, corn etc,  

–  for generator sets, pumps – using constant speed engines 

42 

Engine family: a manufacturer's grouping of engines which, through their design, are expected to have 
similar exhaust emission characteristics and which comply with the requirements of the Directive, as in 
Annex I 

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ANNEX V: Positions of stakeholders regarding the amendment of the 
provisions of the flexibility scheme 

01-06-2007 

EUnited 
Municipal 
Equipment 
CECE 

- 

Industry Associations  Proposing:  an  enlargement  of  flexibility  to 

better align with the US 

04-2009 

UNIFE 

The European Rail 
Industry 

Strongly welcomes the proposed inclusion of 
railcars  to  the  measure  enlarging  flexibility, 
asks for a provision of 50% and introduction 
of derogation for locomotives. 

16-06-2009 

WIRTGEN 
GROUP 

Road and mineral 
Technologies 

29-06-2009 

German  Federal 
Ministry 
of 
Environment 

30-06-2009 

ATOC 

Association of Train 
Operating Companies 

30-06-2009 

SNCF 

French Railways 

30-6-2009 

CER 

Community of 
European Railways 
and Infrastructure 
Companies 

proposes 

Supports an increase of flexibility up to 50% 
and  a  relevant  increase  of  the  fixed  numbers 
table, 
of 
implementation date of Stage III B be 2 years 
and  Stage  IV  by  3  years  and  emphasises  on 
the  need  to  adopt  a  positive  statement  on 
these issues by October 2009. 

extension 

the 

the  extend  of  the 
Expresses  doubts  on 
economic  crisis  of  the  NRMM  sectors  and 
inclusion of railcars in the flexibility scheme, 
concerns  on  the  analysis  of  the  presented 
environmental impacts, concerns over the rise 
of the PM concentration. Proposes to address 
an  enlargement  of  flexibility,  linked  to  limit 
values, in the full revision of the Directive.  

Welcomes  the  proposal  by  Commission  and 
proposes  a  50%  increase  compared  to  the 
20%  for  railcars  proposed  by  Commission, 
inclusion of locomotives under the flexibility 
scheme  and  refers  to  additional  issues  that 
require attention, like replacement engines.  

Support the proposal, proposes an increase of 
50%  for  railcars,  a  postponement  of  the 
implementation  date  of  Stage  III  B  for  rail 
engines  and  refers  to  additional  issues  that 
require attention like replacement engines. 

the  proposal 

to  enlarge 
Fully  support 
flexibility  and  extend  it  to  railcars,  proposes 
increase up to 50% for railcars and inclusion 
also of locomotives in the flexibility scheme, 
proposes  address  the  issue  on  replacement 
engines.  

30-6-2009 

UIC 

International Union 
of Railways 

Fully  support  the  proposal,  asks  for  50% 
flexibility  for  railcars  and 
inclusion  of 
locomotives to the scheme with 50%,  

30-6-2009 

Department  of 
Transport, UK 

Welcomes  the  proposal  to  amend  flexibility, 
asks  for  50%  for  railcars  and  inclusion  of 
locomotives  with  50%,  asks  for  additional 
the  specific 
measures 

to  accommodate 

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30-06-2009 

FEM 

01-07-2009 

EUROMOT 

02-07-2009 

EEB 

03-02009 

CEA 

09-07-2009 

JCB 

10-07-2009 

SMMT 

Federation of 
European Materials 
Handling 

The European 
Association of 
Internal Combustion 
Engine 
Manufacturers 

European 
Environmental 
Bureau 

Construction 
Equipment 
Association (UK) 

Construction 
Equipment 
Manufacturer 

The Society of Motor 
Manufacturers and 
Traders (UK) off 
Highway Engine & 
Equipment Group  

railway problems of the UK.  

Really 
flexibility. 

appreciates 

the 

amendment  of 

Fully support the flexibility amendment 

on 

the 

concerns 

Express 
flexibility 
amendment,  on  the  ability  of  MS  to  comply 
with  National  emission  ceilings,  on  possible 
delay of placing on the market of Stage III B 
compliant engines, on competitiveness issues 
within  industry  and  on  the  reliability  of  the 
EU policies as a total.  

Strongly endorses the proposal 

Strongly endorses the proposal. 

Strongly endorses the proposal  

13-07-2009 

AGORIA 

Belgium Employers 
Organisation 

Fully  support  the  proposal,  ask  for  a  similar 
measure to be proposed for tractors. 

14-07-2009 

AECC 

Association for 
Emissions Control by 
Catalyst 

14-07-2009 

BOMAG 

Compaction 
equipment (used in 
construction sites) 

Supports  additional  measures  acting  as 
incentives  for  Stage  III  B  engines  to  be 
placed  on  the  market  but  not  the  proposed 
measure.  Justifications  include  impacts  on 
environment, EU competiveness in the global 
market. 

Appreciates very much the proposal,  

15-07-2009 

WKO 

Austrian Vehicle 
Industry Association 

Supports the proposal  

15-07-2009 

US-EPA 

16-07-2009 

CLAAS 

United States 
Environmental 
Protection Agency 

Highlights 
of 
the 
including the flexibility aspects  

benefits 

alignment 

Agricultural 
Equipment 
Manufacturer 

Appreciates the proposal to amend flexibility 
and proposes the implementation of a similar 
measure for tractors. 

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ANNEX VI: Fleet and annual sales of NRMM machinery 

Table 1: Annual sales estimates per machinery category and power class (year 2005, EU15) 

Table 2: Total number of machinery on the market per machinery category and power class 
(overall: 6.7 million, 2005, EU15) 

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ANNEX VII: Emissions of NOx and PT 

Table 1: NOx and PM emissions per machinery category and power class  

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ANNEX VIII: Tables of fixed engines numbers of the flexibility scheme 

Table 1. Fixed number of engines under the current flexibility scheme up to Stage III A 

ENGINE 
(kW) 

19-37 

37-75 

75-130 

130-560 

CATEGORY 

NUMBER 
(flexibility at 20%) 

OF 

ENGINES 

200 

150 

100 

50 

The classification of engines differs in Stage III B, compared to the classification of engines 
up  to  Stage  III  A.  Power  category  of  19-37  kW  is  not  included  any  more  in  the  flexibility 
scheme,  and  power  category  37-75  kW  is  split  in  two  separate  categories  of  37-56  kW  and 
56-75 kW. The total of engines in these two categories (80+70) as in Table 2, equal the total 
of the 37-75 kW. 

Table 2. Calculation of fixed number of engines under the proposed amended flexibility 

(1) 

(2) 

(3) 

ENGINE CATEGORY (kW)  Number of engines under 
flexibility scheme of 20% 

Final number of engines  

(Figures  in  (2)  multiplied  by 
2.5 times) 

37-56 

56-75 

75-130 

130-560 

80 

70 

100 

50 

200 

175 

250 

125 

Table 3. Fixed number of engines  of the flexibility  scheme after  expiration  of the period of 
amended flexibility. 

ENGINE  CATEGORY 
(kW) 

Number of engines  

(for the period after end of 2013) 

37-56 

56-75 

75-130 

130-560 

EN 

80 

70 

100 

50 

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   EN 

 
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