COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new passenger cars and new light commercial vehicles in line with the Union’s increased climate ambition
Date: 2021-07-14
Institutions: Directorate-General for Climate Action, European Commission
Subjects: air quality, commercial vehicle, energy consumption, environmental standard, greenhouse gas, motor car, motor vehicle, motor vehicle pollution, pollution control measures, reduction of gas emissions

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   EUROPEAN COMMISSION  Brussels, 14.7.2021  SWD(2021) 614 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new passenger cars and new light commercial vehicles in line with the Union’s increased climate ambition                     {COM(2021) 556 final} - {SEC(2021) 556 final} - {SWD(2021) 188 final} - {SWD(2021) 613 final}  
 
 
Executive Summary Sheet  

Impact assessment on the Revision of the CO2 emission performance standards for new passenger cars and 
new light commercial vehicles   

A. Need for action 

What is the problem and why is it a problem at EU level?  

Three key problems have been identified at the EU level: (1) light-duty vehicles contribute insufficiently 
to the at least 55% GHG reductions in 2030 and climate neutrality in 2050; (2) consumers risk missing out 
on the benefits of zero-emission vehicles; and (3) the automotive value chain in the EU is at risk of losing 
its technological leadership. The impact assessment also outlines the drivers behind these problems, and 
the most affected stakeholders.  

What should be achieved? 

The  initiative  aims  to  achieve  the  following  specific  objectives:  (1)  contribute  to  the  2030  at  least  55% 
GHG  emission  reduction  target  and  to  the  2050  climate  neutrality  objective,  by  reducing  CO2  emission 
from  cars  and  vans  cost-effectively;  (2)  provide  benefits  for  consumers  and  citizens  from  wider 
deployment  of  zero-emission  vehicles;  (3)  stimulate  innovation  in  zero-emission  technologies,  thus 
strengthening the technological leadership of the EU automotive value chain and stimulating employment. 

What is the value added of action at the EU level (subsidiarity)?  

Climate  change  is  a  transboundary  problem  where  coordinated  EU  action  supplements  and  reinforces 
national  and  local  action  effectively.  Without  further  EU  action,  national  and  local  initiatives  alone  are 
likely to be insufficient, and they risk fragmenting the internal market. EU action would provide the entire 
automotive value chain with the necessary long-term, stable market signal and regulatory certainty needed 
for large capital investments necessary to deploy zero-emission vehicles. 

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If not, 
why? 

Various policy options were explored, grouped in three main categories: (i) levels, timing and modalities 
for the CO2 emission targets for cars and vans; (ii) specific incentive for zero- and low-emission vehicles 
(ZLEV); (iii) mechanism to take into account the potential contribution of renewable and low-carbon fuels 
for  the  purpose  of  target  compliance  assessment.  Under  the  preferred  option,  the  CO2  emission  target 
levels  for  cars  and  vans  (%  reduction  compared  to  2021)  are  significantly  strengthened  as  of  2030, 
decreasing in five-year steps. The possible excess emissions premium revenues remain part of the general 
EU budget. The current specific incentive mechanism for ZLEV is removed as of 2030. No mechanism to 
account for the potential contribution of renewable and low-carbon fuels is introduced.  

What are different stakeholders' views? Who supports which option?  

Based  on  the  results  of  the  OPC,  as  regards  the  CO2  target  levels,  vehicle  manufacturers  called  for  no 
changes to the current targets set for 2025. For 2030 and beyond, the ambition level would need to depend 
on  the  enabling  conditions.  Public  authorities  and  NGOs  in  general  supported  setting  more  ambitious 
targets  for  2025  and  2030  and  new  targets  for  2035  and  2040.  Environmental  NGOs  called  for  a  zero-
emission target at the latest by 2035. As regards the timing of the targets, vehicle manufacturers supported 
the continuation of a 5-year steps approach. Environmental NGOs called for annually decreasing targets or 
an  interim  target  to  be  set  in  2027.  Concerning  the  incentive  mechanism  for  ZLEV,  manufacturers 
expressed  the  view  that  it  should  be  maintained  in  its  current  form.  Environmental  NGOs  called  for 
removing  this  incentive  scheme  as  soon  as  the  share  of  electric  vehicles  reaches  a  certain  level.  Fuel 

 
 
producers  and  component  suppliers  expressed  the  view  that  compliance  assessment  should  take  into 
account  emission  reductions  due  to  the  use  of  renewable  and  low-carbon  fuels.  Environmental  NGOs 
argued against this accounting.   

C. Impacts of the preferred option 

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

The  preferred  option  contributes  significantly  to  the  CO2  emission  reductions  for  cars  and  vans.  The 
projected emission reductions for this sector as compared to 2005 are in the range 32-33% in 2030, 56-
66% in 2035 and 83-89% in 2040.  It  will also contribute to lower air pollutant emissions: the estimated 
cumulative cost of the avoided pollutants compared to the baseline in the period 2030 to 2040 amounts to 
49  to  59  billion  euros.  Consumer  benefits  in  terms  of  average  net  savings  in  total  cost  of  ownership, 
averaged over the EU-wide new vehicle fleet, for a 2030 car are up to 330-600 EUR and for a 2030 van up 
to 340-600, for the first user. They increase to around 2800-3100 EUR for a 2040 car and around 5200-
5500 EUR for a 2040 van. Net savings also occur for the second user. Societal benefits over the lifetime 
are  in  the  range  860-1600  EUR  for  a  2030  car,  and  1000-1200  EUR  for  a  2030  van.  They  increase  to 
around 4600-5100 EUR for a 2040 car and 5600-6400 EUR for a 2040 van. Over the period 2030 to 2050, 
cumulative  savings  of  diesel  and  gasoline  in  the  range  913-1100  Mtoe  are  achieved  with  respect  to  the 
baseline, reducing the import dependency of the EU economy. Economy-wide GDP and employment are 
impacted positively. In particular, the number of jobs increases in 2030, and even more in 2040. However, 
a  loss  in  jobs  related  to  the  production  of  components  for  conventional  engines  is  projected,  so  the 
reskilling of workers in the sector will be needed to facilitate the transition.   
What are the costs of the preferred option (if any, otherwise of main ones)?                                    

Costs for  automotive manufacturers increase, as  additional technologies  need to  be deployed in  the new 
vehicle fleet to meet the stricter CO2 targets. For a 2030 new vehicle, additional costs, averaged over the 
EU-wide  new  vehicle  fleet,  are  in  the  range  of  300-550  EUR  (cars)  and  450-940  EUR  (vans).  They 
increase to a range of 1400-1700 EUR for a 2040 car and around 2300-2700 EUR for a 2040 van. 

What are the impacts on SMEs and competitiveness?  

The analysis shows positive economic impacts, including for SMEs. SMEs using vans will largely benefit 
from fuel savings. While SMEs producing conventional automotive technologies may need to adjust, they 
will also benefit from new opportunities from the additional demand for new technologies.  

Will there be significant impacts on national budgets and administrations?  

While the overall GDP impacts will be positive, the fuel duty revenue loss in 2030 is estimated at around 
0.01% of the EU-27 GDP. These losses can be balanced at the Member State level, for example through 
indirect taxation. There are no additional administrative impacts on national administrations. 

Will there be other significant impacts?  

An ambitious, cost-effective long-term regulatory framework for CO2 emissions from cars and vans will 
provide predictability and help the EU automotive industry to retain its technological leadership.  

Proportionality?  

The proposed action is proportionate to achieve the climate objectives that the EU has committed to. 

D. Follow up 

When will the policy be reviewed?  

A  review  of  the  effectiveness  of  the  new  legislation  will  be  foreseen,  aligned  with  the  review  of  other 
legislation such as in the proposal for ETS and the Effort Sharing Regulation.