COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and the Council On the approval and market surveillance of motor vehicles and their trailers, and of systems, components and seperate technical units intended for such vehicles
Date: 2016-01-27
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: Community certification, approximation of laws, market supervision, motor car, motor vehicle, motor vehicle pollution, road safety, spare part, technical standard, vehicle parts

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   EUROPEAN COMMISSION  Brussels, 27.1.2016  SWD(2016) 10 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and the Council On the approval and market surveillance of motor vehicles and their trailers, and of systems, components and seperate technical units intended for such vehicles {COM(2016) 31 final} {SWD(2016) 9 final}  
 
 
Impact of the VW emissions crisis on the review of the type-approval framework for motor vehicles 

Executive Summary Sheet 

Why? What is the problem being addressed?  

A. Need for action 

The VW emissions crisis calls for a thorough re-assessment of the current type-approval system for motor vehicles with a 
view  to  addressing  the  regulatory  weaknesses  that  have  prevented  the  detection  of  this  large  scale  breach  of  the 
type-approval requirements on pollutant emissions. The fact that this could happen puts the credibility of the type-approval 
system at stake. The scale and obvious nature of this breach is evidence that those responsible felt very confident that the 
deception would not be detected. It has breached the confidence in the principle of mutual trust upon which the internal 
market legislation for motor vehicles has been built. A fundamental change to the type-approval system is needed to address 
this credibility issue, and to restore the confidence of the society and the level playing field in the internal market.  

The  main  underlying  drivers  for  this  problem  are  the  lack  of  supervision  on  the  actors  responsible  for  the  proper 
functioning  of  the  ex-ante  compliance  control  mechanism  (type-approval)  and  the  absence  of  an  efficient  ex-post 
control mechanism (market surveillance). 

What is this initiative expected to achieve?  

The initiative is expected to: 
  achieve a substantial change to the way motor vehicles and related products will be verified on their compliance 

with the safety and environmental requirements,  

  ensure the early detection and prevention of non-compliance problems,  
  minimise the risk that non-compliant automotive products can be placed or stay on the EU market, and  
  create sufficiently strong deterrents for involved actors to ignore, circumvent and breach the rules of the game. 

What is the value added of action at the EU level?  

Member States are responsible for the implementation and enforcement of the automotive product legislation in their territory, 
but  the  extent  and  scale  of  VW  crisis  has  demonstrated  that  individual  action  by  Member  States  at  national  level  is  not 
sufficient  to  detect  and  prevent  major  non-compliance  compliance  problems  on  the  internal  market.  There  is  a  warranted 
need  for  EU  wide  supervision  to  achieve  a  harmonised  and  co-ordinated  enforcement  based  on  commonly 
applicable criteria and uniformly applied by Member States. This is indispensable for ensuring a level playing field 
across the EU. The VW crisis has demonstrated that if Member States would take remedial actions individually at national 
level, this entails the risk that the problems would not be uniformly addressed across the EU and create obstacles to the free 
movement of motor vehicles within the Internal Market.  

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why? 

Already  before  the  outburst  of  the  VW  crisis,  the  Commission  was  working  on  proposals  to  improve  the  type-approval 
legislation for  motor vehicles, and  identified main areas  with a significant potential for improvement to better address 
the  problems  of  unsafe  and non-compliant  automotive  products. The  assessment  of the  possible policy  options  resulted  in 
the conclusion that regulatory action in these areas would be the most effective. The re-assessment of these policy options in 
the light of the VW crisis has highlighted the need to further increase their effectiveness in terms of detecting and preventing 
non-compliance problems. In addition, this re-assessment has resulted in the identification of a major weakness of the type-
approval  system,  i.e.  the  lack  of  supervision  on  the  actors  responsible  for  the  proper  functioning  of  the  ex-ante 
compliance  control  mechanism  (type-approval)  and  the  absence  of  an  efficient  ex-post  control  mechanism  (market 
surveillance). 

Main areas identified for improving the type-approval legislation (pre-VW crisis) 

A:  traceability of products and responsibilities of economic operators 

B:  responsibilities and cooperation of enforcement authorities 

C:  quality of type approval tasks carried out by Technical Services 

D:  post safeguard measures and recalls 

E:  procedures for ensuring conformity of production 

New areas identified for improving the type-approval legislation (post-VW crisis) 

F:  Supervision and co-ordination of type-approval and market surveillance enforcement  

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Who supports which option?  
The  regulatory  options  for  areas  A  to  E  are  supported  by  the  majority  of  the  economic  operators,  national  authorities  and 
technical  services.  The  introduction  of  market  surveillance  as  envisaged  for  area  F  is  supported  by  these  stakeholders  as 
well. In the aftermath of the VW crisis, strong calls have been made upon the Commission to also establish supervision and 
co-ordination  at  EU  level  to  ensure  effective  enforcement  of  the  type-approval  and  market  surveillance  obligations.  In 
particular the European Parliament and environmental and consumer protection NGO's are supporting this option.  

What are the benefits of the preferred options (if any, otherwise main ones)?  

C. Impacts of the preferred options 

The preferred combination of regulatory policy options for the main areas as they have been assessed before the outburst of 
the VW crisis (referred to as pre-VW measures), is estimated to have the potential of reducing the value of the market taken 
up by non-compliant and unsafe automotive products by €656 million and €12 billion per year respectively. Re-assessment in 
the  light  of  the  VW-crisis  has  resulted  in  the  identification  of  the  need  to  further  strengthen  these  pre-VW  measures  with 
complementary  actions  (referred  to  as  post-VW  measures)  to  increase  their  effectiveness  in  terms  of  reducing  the  market 
value taken up by non-compliant automotive products. The additional benefits stemming from the post-VW measures under 
area F, envisaging better EU supervision and co-ordination for the enforcement of the type-approval and market surveillance 
obligations has been estimated to generate an additional benefit of €117 million/year. (See summary table below). 

Benefits in terms of reduced share of non-compliant and unsafe automotive products on the EU Market (€ million/year) 

Reduction of  

Area  

A 

B 

C 

D 

E 

F 

Combination 

Non-compliant products 

Pre-VW measures 

Post-VW measures 

188 

- 

94 

47 

Total Pre-VW + Post-VW measures 

188 

141 

124 

62 

186 

Unsafe products 

Pre-VW measures 

Non-compliant + unsafe products 

1500 

1688 

4500 

4641 

3750 

3936 

- 

- 

- 

- 

- 

250 

125 

375 

2250 

2625 

- 

117 

117 

- 

117 

656 

351 

1007 

12000 

13007 

The combination of the pre-VW and post-VW measures would also reduce the number of vehicles to be recalled, leading to 
an estimated additional cost savings of about € 60 million per year for the economic operators and the authorities involved, 
and reduce the associated nuisance for the owners of the vehicles concerned. 

What are the costs of the preferred options (if any, otherwise main ones)?  

The estimated costs of the pre-VW and post-VW measures and their combination are summarised in the table below. 

Summary of estimated costs for implementing the Pre-VW and Post-VW measures (€ million) 

Costs to manufacturers 

Costs of introducing market surveillance  

Costs to technical services 

Costs of implementation and enforcement by Member States 

Costs for the EU supervision and co-ordination 

Pre-VW   Post-VW  

Total  

90.0 

10.0 

3.0 

28.0 

- 

10.0 

182.0 

9.0 

- 

9.0 

100.0 

192.0 

12.0 

28.0 

9.0 

Overall estimated costs of implementing the pre-VW and post-VW measures 

131.0 

210.0 

341.0 

Note:   The estimated costs for implementing the pre-VW and post-VW measures are at least an order of magnitude lower 
than the estimated benefits. 

How will businesses, SMEs and micro-enterprises be affected?  

The impact of the pre-VW measures on enterprises in terms of their cost of doing business, their capacity to innovate and 
their international competitiveness have been assessed in detail by means of a competitiveness proofing study. It emerged 
that the envisaged measures may have relatively greater impact on those sectors in the industry dominated by SMEs, such 
as manufacturers of certain categories of vehicle, distributors of vehicles and components and also some technical services. 
However,  the  expected  impacts  are  not  significant  to  the  extent  that  specific  mitigation  measures  for  SMEs  would  be 
necessary. The post-VW measures are not expected to have a significant impact on SMEs either. 

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Will there be significant impacts on national budgets and administrations? 
As can be seen from the summary of estimated costs, the impact on national budgets and administrations stem mainly from 
the strengthened market surveillance and enforcement obligations.  

Will there be other significant impacts?  
The  second  most  significant  impact  identified  would  be  for  economic  operators,  in  particular  for  non-EU  importers  to 
designate an EU representative for market surveillance purposes. It should be  noted that a similar obligation already exists 
for  type-approval  purposes,  where  manufacturers  from  3rd  countries  have  to  designate  an  authorised  representative  in  the 
EU. For these economic operators the additional cost would be limited if they would use this representative also for market 
surveillance purposes. 

D. Follow up 

When will the policy be reviewed?  
The type-approval framework has been substantially updated in 2007 with Directive 2007/46/EC, followed by a simplification 
exercise in 2009 with the General Safety Regulation No 661/2009. A fitness check on this framework, carried out in 2013, 
has demonstrated that a reasoned review of all the framework provisions was not possible due to a number of transitional 
provisions not yet having entered fully into force and the lack of experience with regard to the implementation of the newly 
introduced provisions. The lesson to be drawn from this is that the next review would only make sense if sufficient time is 
allowed for building the necessary experience to collect relevant evidence of the positive effects the envisaged measures will 
generate (i.e. at least 5 years after its entry into force).  

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