COMMISSION STAFF WORKING DOCUMENT Accompanying document to the
Date: 2011-01-13
Institutions: European Commission
Subjects: air quality, approximation of laws, motor vehicle, pollution control measures, technical regulations, tractor

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D5 95728 
Executive Summary  

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EUROPEAN COMMISSION 

Brussels, 13.1.2011 
SEC(2011) 44 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the  

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive 2000/25/EC as regards the application of emission stages to narrow-track 
tractors 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

SEC(2011) 43 final 
COM(2011) 1 final 

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Disclaimer: This executive summary commits only the Commission's services involved in its 
preparation  and  does  not  prejudge  the  final  form  of  any  decision  to  be  taken  by  the 
Commission. 

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1. 

PROBLEM DEFINITION 

The  problem  to  be  assessed  is  the  feasibility  of  meeting  the  currently  enacted  legislative 
pollutant emission requirements for the so-called narrow-track tractors (NTTs). With annual 
sales of around 26.000 units, they represent 16% of the EU market for new tractors. They are 
specially  designed  to  meet  the  specific  terrain  and  layout  characteristics  of  vineyards  and 
orchards in Europe, such as narrow vineyard rows. As a consequence, NTTs are almost solely 
produced and used in Europe. The problem is two-fold: the adequacy of the regulatory limits 
and the lack of technological feasibility.  

When the new emission limits for tractors were introduced by the legislator in 2005, there was 
a limited amount of information available on the technology needed to meet those standards. 
In addition to the currently applicable Stage IIIA, also Stage IIIB and Stage IV were defined, 
requiring  strong  reductions  in  the  emissions  of  particulate  matter  (PM)  and  nitrogen-oxides 
(NOx). The implementation dates currently defined concerning  the placing on the  market of 
NTTs  for  the  relevant  engine  categories  (covering  75%  of  the  market  of  new  NTTs)  are  as 
follows: 

Engine power 

Implementation date 

Implementation date 

56-75 kW 

37-56 kW 

(Stage IIIB) 

(Stage IV) 

1 January 2012 

1 October 2014 

1 January 2013 

- 

The potential existence of difficulties for NTTs was acknowledged in the Tractor Emissions 
Directive  2000/25/EC  and  article  4  (8)  was  introduced  requiring  a  further  study  of  the 
feasibility of the foreseen emission limits for NTTs. Over time, it was confirmed that NTTs 
would  have  serious  difficulties  meeting  the  next  stages  of  emission  requirements.  This  is 
because contrary to normal/larger tractors, NTTs have only a limited space available for the 
fitment of the required new engine and pollutant after-treatment technologies. An increase in 
the  vehicle  size  would  compromise  the  essential  user  requirements,  caused  by  a  loss  in 
manoeuvrability, loss in cultivable grounds and a general difficulty to operate in the current 
environment for which they are designed.  

information  shows 

The  emission  requirements  of  Stage  IIIB  and  IV  would  not  be  problematic  if  satisfactory 
technological  solutions  for  NTTs  were  available  in  the  appropriate  timeframe.  However, 
current  market 
that  development  of  engine  and  after-treatment 
technologies to meet Stage IIIB has only recently delivered the first prototype solutions. For 
Stage  IV,  R&D  on  engine  concepts  is  still  ongoing.  Further,  additional  efforts  will  be 
necessary  to  adapt  these  technologies  for  application  in  NTTs  and  integrate  them  in  the 
limited  available  space.  This  process  for  Stage  IIIB,  according  to  standard  industrial  lead 
times, is expected to take between 3 and 6 years. For Stage IV, if a feasible technical concept 
can be demonstrated, the development of compliant NTTs may still require between 6 and 10 
years. 

The  most  affected  parties  are  engine  and  tractor  manufacturers,  their  workforce  and  the 
agricultural  sector.  First,  new  engines  must  be  developed  by  engine  manufacturers  that  can 

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meet  the  new  limits  and  are  suitable  for  use  in  NTTs.  Secondly  there  is  the  technological 
challenge  for  NTT  manufacturers  to  install  the  next  generation  of  engines  in  their  specific 
products  and  to  maintain  their  ability  to  operate  in  narrow  vineyard  rows.  The  agricultural 
sector  would  be  affected  by  the  absence  of  new  NTTs  that  would  be  compatible  with  the 
current row-width of vineyards and orchards and with their existing equipment/tools used for 
cultivation.  The  employees  of  these  tractor  manufacturers  would  be  affected  by  possible 
factory downtimes due to the inability to meet the demand for new products. 

This impact assessment sets out policy options to address this problem.  

2. 

ANALYSIS OF SUBSIDIARITY 

The Tractors Emissions Directive harmonises the laws of Member States relating to emission 
limits  and  the  type-approval  procedure  for  engines  to  be  installed  in  tractors.  Any 
modifications to the Directive can only be done at EU level. There is, however, a risk that if 
no action is taken, Member States might resort to national measures to address the problem 
that would lead to a fragmentation of the internal  market  and unlevel playing field between 
different  Member  States.  Therefore  EU  action  is  justified  and  provides  added  value  in 
maintaining the internal market for tractors. 

3. 

OBJECTIVES 

The  policy  objectives  are  related  to  competitiveness  and  environmental  issues.  The  general 
objectives  are  to  safeguard  the  competitiveness  and  viability  of  the  tractor  industry  while 
maintaining a high level of environmental protection with reduced pollutant emissions from 
tractors when addressing the identified problem. 

Faced  with  the  impossibility  of  putting  on  the  market  compliant  products  as  of  2012,  NTT 
manufacturers are likely to suffer a large loss of revenue. This would represent a serious risk 
for  the  R&D  investments  needed  to  develop  the  technical  solutions  required  to  re-enter  the 
market. This risk may jeopardise the existence of many of these specialised companies, which 
are generally industrial companies of a limited size and capital, including several SMEs.  

In  terms  of  environmental  protection,  the  renewal  of  the  tractor  fleet  is  key  to  delivering 
reductions of PM and NOx emissions. If new NTTs are not offered on the market, due to the 
technical  difficulty  in  meeting  regulatory  requirements,  users  are  expected  to  adapt  by 
extending  the  use  of  the  old  NTTs  and  more  polluting  beyond  their  normal  lifetime.  In 
addition, an incentive to industry is required to continue the development of cleaner NTTs and 
deliver  in  the  medium  to  long  term  the  necessary  reductions.  The  emissions  of  the  current 
NTT  fleet  represent  0.2  and  0.5%  of  the  total  emissions  in  the  EU  of  PM  and  NOx 
respectively. 

4. 

POLICY OPTIONS 

Six  policy  options  have  been  identified  as  possible  means  of  meeting  the  policy  objectives. 
These are: 

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•  Option 1- No new action = Baseline scenario.  

The  current  implementation  dates  for  NTTs  to  achieve  compliance  with  the  new 
Stage IIIB and Stage IV limits remain unchanged, meaning that Stage IIIB would be 
required for new NTTs starting from 1 January 2012 and Stage IV from 1 October 
2014.  

•  Option 2 – Allowing 3 extra years for implementation of Stages IIIB and IV for NTTs. 

The  implementation  dates  for  NTTs  for  meeting  Stage  IIIB  and  Stage  IV  emission 
requirements  would  be  delayed  by  3  years.  Stage  IIIB  would  be  required  for  new 
NTTs starting from 1 January 2015 and Stage IV from 1 October 2017. 

•  Option 3 – Allowing 5 extra years for implementation of Stages IIIB and IV for NTTs. 

The  implementation  dates  for  NTTs  for  meeting  Stage  IIIB  and  Stage  IV  emission 
requirements  would  be  delayed  by  5  years.  Stage  IIIB  would  be  required  for  new 
NTTs starting from 1 January 2017 and Stage IV from 1 October 2019. 

•  Option 4 – Exempting from Stages IIIB and IV for NTTs.  

Given  the  specific  design  constraints  of  NTTs  and  their  limited  market  share 
compared  to  the  entire  tractor  market,  an  additional  option  could  be  to  completely 
exempt  NTTs  from  Stages  IIIB  and  IV  requirements.  This  would  maintain  the 
current Stage IIIA requirements for these special tractors for an unlimited period of 
time.  

•  Option 5 – Skipping Stage IIIB and introducing Stage IV at the dates originally foreseen 

This option foresees skipping Stage IIIB and introducing Stage IV emission limits at 
the dates originally foreseen in the tractors emissions legislation i.e. as of 1 October 
2014. 

•  Option 6 – Extending the flexibility provisions for NTTs  

This  option  foresees  a  further  extension  of  the  flexibility  provisions  in  the  Tractor 
Emissions Directive for NTTs, so as to allow the manufacturers of NTTs to sell an 
additional  number  of  non-compliant  tractors  without  changing  the  emission 
requirements as such. 

Option 5 has been discarded at an early stage because vehicle design complying with Stage IV 
will take much longer than the time available until the mandatory introduction of the limits 
foreseen  by  the  legislation.  Strong  negative  impacts  (impossibility  to  sell  compliant  NTTs, 
loss  of  revenues,  continued  use  of  old  tractors)  can  be  expected  as  of  2014,  probably  in  an 
even larger extent than under Option 1. Moreover, it would mean a waste of resources for the 
companies that have invested in technical solutions for Stage IIIB.  

Also Option 6 has been discarded. The flexibility provisions for tractors allow manufacturers 
to  continue  sales  of  non-compliant  tractors  beyond  the  date  of  implementation  of  new 
emissions stages. Current provisions give a relief for a period of only a few months. In order 

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to  bring  these  provisions  more  in  line  with  the  leadtime  needed  for  developing  compliant 
NTTs,  one  could  imagine  a  further  extension  of  the  flexibility  provisions  for  NTTs.  In  that 
case,  the  flexibility  provisions  would  need  to  be  around  300%.  In  practice,  such  an  option 
would represent a delay of 3 years in the application of the new emissions stages, very similar 
to  Option  2.  However,  the  administrative  burden  for  manufacturers  and  administrations  to 
implement the flexibility scheme would be significantly higher.  

5. 

ASSESSMENT OF IMPACTS 

As  this  Impact  Assessment  concerns  a  'narrow'  legislative  action,  it  will  assess  the  options 
essentially in a qualitative way with quantifications for those impacts for which sufficient data 
was available. The analysis is based on the data available from different sources, including the 
supporting  studies  by  JRC  and  Arcadis  and  the  industry  itself  (in  particular  engine,  after-
treatment  and  tractor  manufacturers),  who  delivered  information  on  R&D  results  and  the 
state-of-the-art technology related to the introduction of the new stages for NTTs. 

•  Option 1- No new action = Baseline scenario.  

This  policy  option  represents  a  serious  risk  of  disrupting  the  NTT  industry  and 
market, as industry would not have compliant tractors ready in time for Stage IIIB or 
for  Stage  IV.  Users  will  not  be  able  to  replace  old  polluting  tractors  with  modern 
equipment  and  are  likely  to  continue  to  use  old  tractors  with  high  pollution  and 
deteriorated  worker  safety.  Some  compliant  tractors  (in  the  lower  engine  category) 
may  come  some  years  later  to  the  market,  but  the  prolonged  loss  of  revenue  from 
NTT  could  lead  several  manufacturers  to  close  business,  resulting  in  a  significant 
proportion of jobs lost, which is estimated to amount to 3000 over a period of three 
years. Further, due to the lack of replacement of the existing fleet, it can be estimated 
that  around  80.000  workers  using  NTTs  will  be  exposed  to  higher  safety  risks,  at 
least  for  a  period  of  3  coming  years.  In  fact  recent  legislation  improved  safety 
requirements for new tractors, particularly against rollover accidents, and renewal of 
the fleet is essential to improve worker safety.  

The  overall  emissions  of  PM  and  NOx  under  this  option  are  higher  than  originally 
expected  from  the  new  emission  limits.  This  is  due  to  the  continued  use  of  old 
tractors, caused by the inavailability of compliant new NTTs.  

Stakeholders  (mainly  from  industry)  have  for  many  years criticised  this  option  and 
warned against its negative consequences. 

•  Option 2 – Allow 3 extra years for implementation of Stages IIIB and IV for NTTs. 

This  policy  option,  by  allowing  NTTs  three  extra  years  to  comply,  would  be  very 
effective  in  mitigating  the  economic  impacts  on  the  industry  to  challenging  but 
feasible proportions, without serious social drawbacks. Industry would remain under 
continuous  pressure  to  find  technical  solutions  to  meet  the  new  emission  limits 
introduced  by  the  Directive,  so  innovation  is  fostered.  It  is  estimated  that 
manufacturers would have to increase their R&D spending from 3% to more than 6% 
of  turnover  over  the  coming  4  years  in  order  to  meet  Stage  IIIB  as  of  2015.  Total 
R&D investment from NTT manufacturers is expected to be around €50m. Worker 

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safety  will  improve  as  expected,  due  to  the  replacement  of  older  NTTs  with  new, 
safer ones.  

Compared to the baseline scenario (option 1) the environmental impacts are positive. 
This  is  due  to  the  fact  that,  while  Stage  IIIB  NTTs  are  not  available,  new  NTTs 
complying  with  Stage  IIIA  will  be  able  to  enter  the  market  and  reduce  pollutant 
emissions,  through  the  replacement  of  old  and  polluting  NTTs.  The  overall 
environmental  benefits  of  this  option  are  estimated  at  €122m  (lower  PM  emissions 
are monetized at €31m, NOx emissions at €91m).  

Some  industrial  companies  have  indicated  that  this  might  be  feasible,  while  others 
think it is not. 

•  Option 3 – Allow 5 extra years for implementation of Stages IIIB and IV for NTTs. 

This  option,  allowing  NTTs  five  extra  years  to  comply,  would  be  very  effective  in 
avoiding job losses in the sector. Industry would still remain under pressure to find 
technical  solutions  to  meet  the  Directive,  although  all  relevant  industrial  actors 
should have sufficient time to develop technical solutions for NTTs. The credibility 
of  legislation  may,  however,  be  somewhat  questionable,  if  it  is  perceived  that  the 
industry did not try to meet the limits in time. This option corresponds to the current 
requests  from  NTT  manufacturers.  Worker  safety  will  improve  as  expected,  due  to 
the replacement of older NTTs with new, safer ones.  

Again, there will be an improvement for the environment compared to the baseline 
scenario due to the replacement of old NTTs by cleaner ones, complying with Stage 
IIIA. The overall environmental benefits of this option are estimated at €74m (lower 
PM emissions are monetized at €12m, NOx emissions at 62 M€). These values are 
somewhat  lower  than  those  for  option  2,  as  Stage  IIIB  will  be  applicable  2  years 
later.  

This option corresponds to the current requests from NTT manufacturers.  

•  Option 4 – Exemption from Stages IIIB and IV for NTTs.  

A permanent exemption does effectively mitigate the negative economic impacts for 
industry  but does not give any  certainty  that  pollutant emissions are reduced  in the 
long  term,  as  it  is  far  from  certain  that  NTTs  meeting  Stage  IIIB  or  IV  would  be 
developed. As other sources of PM and NOx are expected to reduce their emissions 
over time, the relative share of NTTs in those emissions will therefore increase. The 
overall  environmental  costs  of  this  option  are  estimated  at  €674m  (higher  PM 
emissions  are  monetized  at  €313m,  NOx  emissions  at  €361m).  In  the  short  term, 
however, it would be positive for the environment as at least new Stage IIIA tractors 
would be available to replace older, more polluting ones. An exemption would also 
largely  remove  any  incentive  to  invest  in  R&D  and  innovation  in  environmental 
technologies  for  NTTs.  Again,  worker  safety  will  improve  as  expected,  due  to  the 
replacement of older NTTs with new, safer ones.  

There would be no risk that companies are pushed out of business due to emissions 
requirements,  as  they  would  effectively  stay  as  they  are  today.  However,  a  small 

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number  of  jobs  related  to  R&D  in  the  tractor  manufacturer  and  exhaust  after-
treatment supplier sector may be lost. 

Initially, this was the solution requested by (industrial) stakeholders. More recently, 
they requested a 5-year delay. 

6. 

COMPARISON OF OPTIONS 

As a result of the above analysis, it is concluded that postponing the implementation dates for 
NTT  with  3  years  (Option  2)  is  the  most  appropriate  measure  to  ensure  that  the  policy 
objectives of ensuring a competitive industry and a better protecting the environment are met. 
As  summarised  in  the  table  below,  this  option  delivers  the  most  favourable  overall  impacts 
with regard to the economic, environmental and social implications. 

Option 1 - 
Baseline 

Option 2 – 3 year 
delay 

Option 3 – 5 year 
delay 

Option 4 - 
exemption 

0 

+ 

+ 

+ 

Direct economic impact 
(on industry) 

No NTTs sold until 
technical solution is 
found, loss of revenue, 
serious risk of 
bankruptcies 

Most actors can stay in 
business, sales 
continue, sunk 
investments not lost 

All actors can stay in 
business and sales 
continue, sunk 
investment not lost 

No need to invest 
more, sales continue, 
loss of sunk 
investments 

Indirect economic 
impact (on consumers) 

0  

+ 

+ 

++ 

Cannot renew tools, 
higher maintenance 
costs 

Additional equipment 
cost of 117 M€ initially 
per year 

Additional equipment 
cost of +/- 100M€ 
initially per year 

No particular cost 
increases 

0 

++ 

+ 

-- 

Impact on R&D 

Wild race among some 
to innovate, without 
revenue to finance it 

R&D investment 
continued, allowing 
most to participate 

Early R&D investment 
not rewarded, allowing 
all to participate 

No incentive to 
innovate 

PM emissions1 

NOx emissions 

0 

++ 

+ 

-- 

Use of old, polluting 
tractors is prolonged 

Fleet renewal 
continued, reduction of 
2.2 kt, €31m benefit  

Fleet renewal 
continued, reduction of 
0.8 kt, €12m benefit  

Long-term higher 
emissions of 22.7 kt, 
€313m cost  

0 

++ 

+ 

-- 

Use of old, polluting 
tractors is prolonged 

Fleet renewal 
continued, reduction of 
42 kt, €91m benefit  

Fleet renewal 
continued, reduction of 
29 kt, €62m benefit  

Long-term higher 
emissions of 168 kt, 
€361m cost  

Impact on employment 

0 

+ 

+ 

+ 

1 

The estimated pollutant emissions and monetized impacts are relative to the baseline scenario. The emissions correspond to the 
timeframe until 2050, the monetized environmental impacts to the 2012-2030 timeframe. 

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Serious risk for job 
losses, up to 3000 over 
3 years 

Job losses limited, not 
structural, some 
additional jobs at 
suppliers 

Job losses further 
limited, not structural, 
some additional jobs at 
suppliers 

No risk of significant 
job losses, no 
additional jobs at 
suppliers 

0 

+ 

+ 

+ 

Impact on worker safety

Unsafe tractors are 
used longer, ca. 80.000 
workers exposed  

Improvement of safety 
through fleet renewal

Improvement of safety 
through fleet renewal 

Improvement of safety 
through fleet renewal

The 3-year delay would allow most of the manufacturers to transform the recent technological 
progress  into  NTTs  complying  with  Stage  IIIB  limits  and  simultaneously  meeting  the 
essential customer requirements for their use in vineyards and orchards. Thereby, significant 
job losses of Option 1 are avoided and the environmental and worker safety impacts continue 
to be positive due to the continued renewal of the EU fleet. Compared to Option 3, the delay 
would  be  in  line  with  the  necessary  technological  development  and  continue  to  foster 
innovation.  With  a  limited  delay,  the  environmental  benefits  that  were  expected  from  the 
original legislation will therefore be realised, unlike Option 4. 

7. 

MONITORING AND EVALUATION 

It will be important to monitor over time the technical advancement in the industry, in order to 
track progress towards the transition towards Stage IIIB and Stage IV limits. Key indicators 
are the level of R&D investment in the sector, the level of sales and profitability of firms (in 
particular, SMEs) active in the sector and the number of NTTs which are successfully type-
approved  to  the  Stage  IIIB  and  IV  limit  values  over  time.  Also  the  monitoring  of  NOx  and 
PM emissions attributed to NTT will be relevant.  

Accordingly,  constant  dialogue  with  the  industry,  aimed  at  tracking  of  R&D  investment  by 
large  and  small  firms  in  the  sector  and  monitoring  the  competitiveness  of  the  sector  and  its 
ability to develop suitable technological solutions within the next few years, will be of utmost 
importance. In view of the future implementation of the rules at hand, it will be essential to 
monitor  the  NTT  market  and  the  development  of  technologies,  including  the  appearance  of 
potential solutions for the transition to Stage IV. One suitable way of achieving this constant 
dialogue is to rely on the Working Group for Agricultural Tractors (WGAT). 

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