CELEX: 52021PC0556
Language: en
Date: 2021-07-14
Title: 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

EUROPEAN
                           COMMISSION
                                                     Brussels, 14.7.2021
                                                     COM(2021) 556 final
                                                     2021/0197 (COD)
                                        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
                                  (Text with EEA relevance)
          {SEC(2021) 556 final} - {SWD(2021) 188 final} - {SWD(2021) 613 final} -
                                    {SWD(2021) 614 final}
EN                                                                                        EN
 ---pagebreak---                                  EXPLANATORY MEMORANDUM
   1.         CONTEXT OF THE PROPOSAL
   •          Reasons for and objectives of the proposal
   The European Green Deal Communication1 launched a new growth strategy for the EU that
   aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient
   and competitive economy. It reaffirms the Commission’s ambition to increase its climate
   targets and make Europe the first climate-neutral continent by 2050. Furthermore, it aims to
   protect the health and well-being of citizens from environment-related risks and impacts. The
   necessity and value of the European Green Deal have only grown in light of the very severe
   effects of the COVID-19 pandemic on the health and economic well-being of the Union’s
   citizens.
   Tackling climate change is an urgent challenge. In line with the scientific findings of the
   Intergovernmental Panel on Climate Change (IPCC) Special Report global net-zero CO2
   emissions need to be achieved around 2050, and neutrality for all other greenhouse gases later
   in the century. This urgent challenge requires the EU to step up its action and demonstrate
   global leadership by becoming climate neutral by 2050. This objective is set out in the
   Communication ‘A Clean Planet for all’ - A European strategic long-term vision for a
   prosperous, modern, competitive and climate-neutral economy’2.
   Based on a comprehensive impact assessment, the Commission’s Communication of
   September 2020 on Stepping up Europe’s 2030 climate ambition3 proposed to raise the
   EU's ambition and put forward a comprehensive plan to increase the European Union’s
   binding target for 2030 towards at least 55% net emission reduction, in a responsible way.
   Raising the 2030 ambition now helps give certainty to policymakers and investors, so that
   decisions made in the coming years do not lock in emission levels inconsistent with the EU’s
   objective to be climate neutral by 2050. The 2030 target is in line with the Paris Agreement
   objective to keep the global temperature increase to well below 2°C and pursue efforts to keep
   it to 1.5°C.
   The European Council endorsed the new EU binding target for 2030 at its meeting of
   December 20204. It also called on the Commission “to assess how all economic sectors can
   best contribute to the 2030 target and to make the necessary proposals, accompanied by an
   in-depth examination of the environmental, economic and social impact at Member State
   level, taking into account national energy and climate plans and reviewing existing
   flexibilities”.
   To this end, the European Climate Law, as agreed with the co-legislators, will make the
   EU’s climate neutrality target legally binding, and raise the 2030 ambition by setting the
   target of at least 55% net emission reduction by 2030 compared to 1990.
   In order to follow the pathway proposed in the European Climate Law, and deliver this
   increased level of ambition for 2030, the Commission has reviewed the climate and energy
   legislation currently in place that is expected to only reduce greenhouse gas emissions by 40%
   by 2030 and by 60% by 2050.
   1
            COM(2019) 640 final.
   2
            COM(2018) 773 final.
   3
            COM(2020) 690 final
   4
            European Council Conclusions 10-11 December 2020 EUCO 22/20 CO EUR 17 CONCL 8
EN                                                   1                                            EN
 ---pagebreak---    This ‘fit for 55’ legislative package, as announced in the Commission’s Climate Target Plan5,
   is the most comprehensive building block in the efforts to implement the ambitious new 2030
   climate target, and all economic sectors and policies will need to make their contribution,
   including road transport.
   Transport is the only sector where greenhouse gas (GHG) emissions have been on the rise.
   The GHG emissions from road transport are no exception. They represent almost 20% of
   total EU GHG emissions and have significantly increased since 1990. Air quality continues to
   be impacted by traffic and congestion, leading to increasing number of cities introducing low-
   and zero-emission zones restricting local access for vehicles with internal combustion engines
   and to certain Member States announcing the phase-out of sales of internal combustion engine
   cars.
   The automotive industry is of key importance for the EU economy and accounts for over 7%
   of the EU's GDP. It provides jobs - directly or indirectly, in manufacturing, sales,
   maintenance, construction and transport and transport services - to 14.6 million Europeans.
   The EU is among the world's biggest producers of motor vehicles and demonstrates
   technological leadership in this sector. EU automotive investment in R&D amounts to €60.9
   billion annually.
   The automotive sector is undergoing a significant structural transformation including changes
   in clean and digital technologies, in particular the shift from internal combustion engines
   towards zero- and low-emission technologies as well as increasingly connected vehicles. The
   ambition should be to empower the automotive sector to continue and strengthen its
   leadership in the technologies of the future, especially in the face of international competition.
   The Commission’s Strategy for Sustainable and Smart Mobility 6 addresses the broader
   challenges of the transition to zero-emission mobility and sets out a roadmap for putting
   European transport firmly on the right track for a sustainable and smart future.
   The Strategy’s accompanying Action Plan includes policies aimed, amongst others, at
   boosting the uptake of zero-emission vehicles and related infrastructure. The shift toward
   zero-emission vehicles will prevent pollution and improve the health of our citizens; this is
   also supporting the Zero Pollution Ambition of the European Green Deal, as articulated in
   the Zero Pollution Action Plan7.
   The CO2 emission standards for passenger cars and light commercial vehicles are key
   drivers for reducing CO2 emissions in the sector, as shown in the Communication on Stepping
   up Europe’s 2030 climate ambition.
   The general objectives of this proposal are to contribute to achieving climate neutrality by
   2050 and to this end, in line with the European Climate Law, to contribute to reaching at least
   55% net greenhouse gas emission reductions by 2030 compared to 1990.
   The proposal serves three specific objectives. The first is to contribute to the 2030 and 2050
   climate objectives by reducing CO2 emissions from cars and light commercial vehicles.
   5
           COM/2020/562 final
   6
           COM(2020)789 final
   7
           COM/2021/400 final, see also in this context Directive 2008/50/EC on ambient air quality and cleaner
           air for Europe and Directive (EU) 2016/2284 on the reduction of national emissions of certain
           atmospheric pollutants
EN                                                      2                                                       EN
 ---pagebreak---    Considering that the effect of the CO2 emission standards on the reduction of emissions from
   the stock of vehicles is not immediate, and considering the dynamics of the fleet renewal,
   early action is important to ensure the achievement of the long term objective.
   The second specific objective is to provide benefits to consumers and citizens from a wider
   deployment of zero-emission vehicles. The key expected benefits concern not only improved
   air quality, in particular in cities. The CO2 emission performance standards trigger
   manufacturers to increase the supply of zero-emission vehicles, and with that increased supply
   consumers can benefit from more affordable zero-emission vehicle models and significant
   energy savings from the use of zero-emission vehicles, hence decreasing the total cost of
   ownership of such vehicles.
   The third specific objective is to stimulate innovation in zero-emission technologies, thus
   strengthening the technological leadership of the automotive value chain and stimulating
   employment in the EU. While the automotive sector has been successful in developing and
   manufacturing advanced internal combustion engine vehicle technologies and marketing them
   world-wide, it needs to increasingly channel investments in zero-emission technologies.
   Within this global context, also the EU automotive chain must be a leading actor in the
   ongoing global transition towards zero-emission mobility. The proposal is technology neutral
   and will be accompanied by measures to boost zero-emission fuels and the charging
   infrastructure.
   Additional co-benefits are expected to be the increased energy efficiency and energy
   security.
   •         Consistency with existing policy provisions in the policy area
   This ‘fit for 55’ climate and energy package is a comprehensive step in overhauling Union
   legislation to align it with the EU’s increased climate ambition. All initiatives in the package
   are closely interlinked.
   This legislative proposal on the CO2 emission standards for cars and light commercial
   vehicles is complementary to the other proposals made in the package and maintains
   consistency, in particular, with the following measures.
   By ensuring a reduction of road transport emissions, the CO2 emission standards notably
   support Member States in meeting their targets under the Effort Sharing Regulation (EU)
   2018/8428. Since they incentivise electrification of vehicles they contribute both to the energy
   efficiency objectives and by providing a complementary route to using renewable energy also
   to the renewables objective.
   There are clear complementarities between the CO2 emission standards and the emissions
   trading for buildings and road transport. The CO2 emission standards address the supply of
   more fuel efficient and zero-emission vehicles, setting requirements on vehicle manufacturers
   with regard to their new vehicles fleets. The extension of emissions trading concerns the fuel
   use in the entire vehicle stock. It could increase both the demand for more fuel-efficient
   vehicles and for zero emission vehicles, thus facilitating the fulfilment of the CO2 efficiency
   objectives of the vehicle manufacturers.
   8
           Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding
           annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to
           climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No
           525/2013
EN                                                    3                                                     EN
 ---pagebreak---    The CO2 emission standards, supplying new zero-emission vehicles to the market, are also a
   complementary measure to the Renewable Energy Directive (EU) 2018/20019, which will
   decarbonise the production of electricity used in electric vehicles and incentivise the uptake of
   renewable and low carbon fuels for the combustion engine vehicles in the stock.
   There are also important synergies between CO2 emission standards and a strengthened
   emissions trading system (ETS)10 and the Renewable Energy Directive. The emissions trading
   system and the Renewable Energy Directive will drive decarbonisation of the power
   generation, so that zero-emission vehicles, incentivised by the CO2 emission standards, are
   progressively powered by renewable energy sources thus achieving decarbonisation of full
   well-to-wheel emissions.
   Finally, while the CO2 emission standards ensure the supply of zero-emission vehicles, the
   Alternative Fuels Infrastructure Directive 2014/94/EU11, which incentivises the rollout of
   recharging and refuelling infrastructure, is a necessary complementary instrument to address
   the market barrier on the deployment of infrastructure. This in turn is also incentivised by the
   Effort Sharing Regulation, which also incentivises Member States to take action in their road
   transport sectors.
   A combination of energy taxation, investment in charging and refuelling infrastructure, new
   carbon pricing and updated CO2 standards leads to a balanced and cost-effective approach for
   the reduction of emissions from road transport, addressing market barriers and failures as well
   as providing investors certainty to invest in zero-emission technologies.
   •          Consistency with other Union policies
   The proposals of the ‘fit for 55’ package are consistent with all EU actions and policies and
   help the EU achieve the increased 2030 target and a successful and just transition towards the
   2050 climate neutrality, as stated by the Commission in the European Green Deal
   Communication.
   The ‘fit for 55’ package, the Next Generation EU and the Multiannual Financial Framework
   for 2021-2027 will help achieving the twin green and digital transitions that Europe is aiming
   for. The combination of these policies will address the economic crisis and accelerate the shift
   to a clean and sustainable economy, linking climate action and economic growth. The
   initiatives of the package are also consistent with the Union policies on a clean and circular
   economy, sustainable and smart mobility and the Zero Pollution Action Plan. If no ambitious
   action is taken to achieve zero-emission road transport, other sectors of the economy would
   have to contribute more to the overall EU emission reduction targets.
   As announced in its Communication Updating the 2020 New Industrial Strategy: Building
   a stronger Single Market for Europe’s recovery 12, the Commission will engage together
   with public authorities, stakeholders and social partners in a co-creation process to identify
   the green and digital transition pathways that will support the scale-up of the manufacturing
   of zero-emission vehicles, the rapid deployment of alternative fuels infrastructure and the
   associated up- and re-skilling of workers.
   9
            Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the
            promotion of the use of energy from renewable sources (OJ L OJ L 328 21.12.2018, p. 82).
   10
            Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a
            scheme for greenhouse gas emission allowance trading within the Community and amending Council
            Directive 96/61/EC
   11
            Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the
            deployment of alternative fuels infrastructure (OJ L 307 28.10.2014, p. 1).
   12
            COM(2020) 350 final
EN                                                          4                                                    EN
 ---pagebreak---    This initiative is also consistent with the EU’s policy for research and innovation. Support to
   the development of zero-emission technologies will also be foreseen under the EU’s
   Framework Programme for Research and Innovation, and in particular through Horizon
   Europe partnerships.
   In addition, to reinforce consistency across policies, and as announced in its Communication
   Better regulation: Joining forces to make better laws13, the Commission is improving its
   better regulation guidelines to ensure that all its initiatives comply with the ‘do no significant
   harm’ principle thus abiding by the obligations set under the European Climate Law.
   2.        LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
   •         Legal basis
   The legal basis for this proposal is Article 192 of the Treaty of the Functioning of the
   European Union (TFEU). In accordance with Article 191 and 192(1) TFEU, the European
   Union shall contribute to the pursuit, inter alia, of the following objectives: preserving,
   protecting and improving the quality of the environment; promoting measures at international
   level to deal with regional or worldwide environmental problems, and in particular combating
   climate change. Based on Article 192 of the TFEU, the Union has already adopted policies to
   address CO2 emissions from cars and light commercial vehicles through Regulation (EC)
   443/2009 and Regulation (EU) 510/2011, which were repealed and replaced by Regulation
   (EU) 2019/631, in force since 1 January 2020.
   •         Subsidiarity (for non-exclusive competence)
   Climate change is a trans-boundary problem, which cannot be solved by national or local
   action alone. Coordination of climate action must be taken at European level and, where
   possible, at global level. EU action is justified on grounds of subsidiarity as set out in Article
   5 of the Treaty of the European Union. Since 1992, the European Union has worked to
   develop joint solutions and drive forward global action to tackle climate change. More
   specifically, action at EU level will provide for cost effective delivery of the 2030 and long-
   term emission reduction objectives while ensuring fairness and environmental integrity.
   Articles 191 to 193 of the TFEU confirm and specify EU competencies in the area of climate
   change.
   In light of the emission reduction target for 2030, and in the perspective of the climate
   neutrality objective to be achieved by 2050, stronger EU action is needed to ensure a
   sufficiently high contribution of the road transport sector.
   Although initiatives at the national, regional and local level can create synergies, alone they
   will not be sufficient. Lack of coordinated EU action via the strengthening of CO2 emission
   standards would translate into a risk of market fragmentation due to the diversity of national
   schemes, differing ambition levels and design parameters. On their own, individual Member
   States would also represent too small a market to achieve the same level of results, therefore,
   an EU wide approach is needed to drive industry level changes and to create economies of
   scale.
   •         Proportionality
   This proposal complies with the proportionality principle because it does not go beyond what
   is necessary in order to achieve the Union’s objectives of reducing greenhouse gas emissions
   in a cost-effective manner, while ensuring fairness and environmental integrity.
   13
           COM(2021) 219 final
EN                                                  5                                                 EN
 ---pagebreak---    The Climate Law agreed by the European Parliament and the Council has endorsed an overall
   economy-wide and domestic reduction in greenhouse gas emissions of at least 55% below
   1990 levels by 2030 and climate neutrality by 2050. This proposal covers a significant
   proportion of those greenhouse gas emissions and avoids the need for more ambitious
   emission reductions in other sectors, where decarbonisation is more challenging. It revises the
   existing CO2 emission standards for cars and light commercial vehicles in order to achieve
   this objective.
   •       Choice of the instrument
   The proposal provides for an amendment of Regulation (EU) 2019/631 and a Regulation is
   therefore the only appropriate legal instrument. Considering that Regulation (EU) 2019/631
   was the result of a recent recast and that the amendments proposed only concern a limited
   number of provisions, a new recast and/or replacement of the existing Regulation is not
   considered appropriate.
   3.        RESULTS              OF         EX-POST             EVALUATIONS,                 STAKEHOLDER
             CONSULTATIONS AND IMPACT ASSESSMENTS
   •         Ex-post evaluations/fitness checks of existing legislation
   For most elements of the Regulation, the conclusions of the 2015 evaluation study14 reflected
   in the 2017 impact assessment15 remain valid. Some new obligations that were introduced in
   Regulation (EU) 2019/631 have not been evaluated, taking into account that they are either
   not yet applicable or have not yet been fully implemented. This concerns, in particular, the
   new 2025 and 2030 EU fleet-wide targets and the incentive mechanism for zero- and low-
   emission vehicles. However, a revision is necessary in order to bring the Regulation in line
   with the ambitions of the European Green Deal, the strengthened emission reduction targets
   of the European Climate Law and recent market developments. These changes were subject to
   an impact assessment.
   •         Stakeholder consultations
   In order to collect evidence and ensure greater transparency, the Commission organised a
   public consultation for each of the proposals from 13 November 2020 to 5 February 2021. A
   detailed summary and the results of the public consultation are presented in Annex 2 to the
   Impact Assessment for this proposal.
   Moreover, the Inception Impact Assessment was published on 29 October 2020 during 4
   weeks.
   More precisely, for the purpose of this proposal, the Commission sought feedback from in
   particular the following stakeholders:
                    Member States (national, regional authorities)
                    Vehicle manufacturers
                    Component and materials suppliers
                    Energy suppliers
                    Vehicle purchasers (private, businesses, fleet management companies)
   14
           https://ec.europa.eu/clima/sites/clima/files/transport/vehicles/docs/evaluation_ldv_co2_regs_en.pdf
   15
           SWD(2017) 650 final
EN                                                          6                                                  EN
 ---pagebreak---                   Drivers associations
                  Environmental, transport and consumer NGOs
                  Social partners
   In addition to the public consultation and the feedback on the inception impact assessment,
   feedback was also sought through the following means:
                  Meetings with relevant industry associations representing                vehicle
                   manufacturers, components and materials suppliers, energy suppliers;
                  Bilateral meetings with Member State authorities, vehicle manufacturers,
                   suppliers, social partners and NGOs;
                  Position papers submitted by stakeholders or authorities in the Member States.
   The main outcomes can be summarised as follows:
   The majority of industry respondents, public authorities and other stakeholders supported the
   objective of ‘reducing CO2 emissions from cars and vans to implement the 55% target by
   2030 and 2050 climate neutrality objective’, while citizens had mixed views on this. The
   objective of ‘strengthening competitiveness, industrial leadership, innovation and stimulating
   employment in the EU automotive value chain’ and ‘reducing total costs of ownership for
   consumers’ received most support.
   Concerning target levels, the consultation reflected mixed views on the future target
   stringency, where the industry showed some support for stricter targets as of 2030, NGOs
   stricter targets from 2025 onwards, public authorities overall support stricter targets, while
   citizens had mixed views. As regards the timing of targets, industry supported setting targets
   every five years, while other stakeholders had mixed views in this regard. Vehicle price,
   limited driving range and the availability of infrastructure were considered particularly
   important barriers to the market uptake of zero- and low-emission vehicles. The replies were
   mixed as regards the need for the incentive mechanism, and vehicle types to be supported. As
   for the possible introduction of a mechanism for the accounting of renewable- and low-carbon
   fuels in CO2 target compliance, the consultation reflected mixed views.
   •         Collection and use of expertise
   For the quantitative assessment of the economic, social and environmental impacts, the
   Impact Assessment has built on a range of scenarios developed for the PRIMES model. This
   analysis was complemented by applying other modelling tools, such as GEM-E3 and E3ME
   and the JRC DIONE model.
   Monitoring data on GHG emissions and other characteristics of the new light-duty vehicle
   fleet was sourced from the annual monitoring data as reported by Member States and
   collected by the European Environment Agency (EEA) under Regulation (EU) 2019/631.
   Further information was gathered through service contracts commissioned from external
   contractors.
   •         Impact assessment
   The Impact Assessments for the different initiatives of the ‘fit for 55’ legislative package are
   based on integrated modelling scenarios that reflect the interaction of different policy
   instruments on economic operators, in order to ensure complementarity, coherence and
   effectiveness in achieving the 2030 and 2050 climate ambition.
EN                                                 7                                                EN
 ---pagebreak---    The impact assessment accompanying this proposal complements the analysis conducted in
   the 2020 impact assessment supporting the 2030 Climate Target Plan16. This formed the
   analytical basis to set the objective of at least net 55% reduction in GHG emissions by 2030
   compared to 1990 and the climate neutral objective of 2050.
   Moreover, the Impact Assessment accompanying this proposal has been prepared and
   developed in line with the applicable Better Regulation guidance, and the Regulatory Scrutiny
   Board issued a positive opinion on 19 April 2021.
   Improvements, as recommended by the Board, have been incorporated in the final version.
   This concerns the following:
                  Clarification of the reasons for revising the existing Regulation (EU) 2019/631
                   and the coherence and proportionality with regard to other linked legislative
                   initiatives;
                  Further demonstration of the feasibility of the high-level reduction target and
                   clarification of the trade-offs between the three target options;
                  Additional information provided on the impacts of the preferred options on
                   competiveness, innovation and smooth sector transition;
                  Incorporation of the stakeholders views in the analysis.
   Policy options
   The impact assessment has analysed policy options grouped into three topics, which are to
   address the identified problems and achieve the policy objectives.
   (1)       CO2 emission targets for cars and vans (levels, timing, modalities);
   As regards the target levels, the options considered cover three trajectories up to 2040, also
   reflecting that the objective is to achieve a reduction in road transport emissions of 90% by
   2050, taking into account that cars are on the roads on average between 10 to 15 years.
   In order to contribute to the overall 2030 increased ambition level and the 2050 climate
   neutrality objective, the preferred option is to significantly strengthen the CO2 EU fleet-wide
   targets for both cars and light commercial vehicles as of 2030. This will provide for the
   necessary steer to accelerate the supply to the market of zero-emission vehicles, bring benefits
   for vehicle users as well as stimulate innovation and technological leadership, while limiting
   the costs increase for manufacturers.
   As regards the timing for tightening the targets, the preferred option is to maintain the
   regulatory approach of setting targets decreasing in 5-year steps and not more frequently in
   order to provide for sufficient flexibility for manufacturers to manage this transition. In order
   to take into account the development cycles in the automotive sector, it is therefore
   appropriate to maintain the target levels set for 2025.
   The possible revenues from excess emissions premiums would remain part of the general EU
   budget. The other options considered would significantly increase the administrative burden
   while not directly benefitting the automotive sector in its transition.
   The possibility for both EU and non-EU based small volume manufacturers (i.e. those
   responsible for between 1 000 and 10 000 new car registrations or 1 000 and 22 000 new van
   registrations in a calendar year) to be granted a derogation target would be removed from
   2030 onwards, thereby improving the effectiveness and coherence of the legislation. The
   16
           SWD/2020/176 final
EN                                                   8                                               EN
 ---pagebreak---    choice of the date gives the manufacturers concerned lead-time to programme and adapt to the
   new regulatory requirements, and is consistent with the date of application of the strengthened
   targets. Manufacturers responsible for less than 1 000 new vehicle registrations per calendar
   year continue to be exempt.
   (2)       specific incentives for zero- and low-emission vehicles (ZLEV);
   Different options were considered as regards the incentive mechanism for ZLEV, both as
   regards the type of mechanism and the type of vehicles it should cover. The preferred option
   is to remove as of 2030 the ZLEV incentive scheme both for cars and light commercial
   vehicles as the market uptake of ZLEVs will be driven by the stricter CO 2 targets applicable
   from that date, which will require manufacturers to deploy significantly more zero-emision
   vehicles. This would also simplify the legislation and avoid the risk of undermining its
   effectiveness.
   (3)       a mechanism to take into account the potential contribution of renewable and low-
             carbon fuels for the purpose of target compliance assessment.
   In this respect, two options were considered: either a carbon correction factor or a crediting
   scheme. However, the preferred option is not to include such an accounting mechanism, as
   this would blur the responsibilities of different players to reach the targets, undermine the
   effectiveness and efficiency of the legislation and increase the administrative burden and
   complexity. Promoting the use of renewable and low-carbon fuels will be done through the
   revision of the Renewable Energy Directive, the emissions trading system and the Energy
   Taxation Directive.
   •         Regulatory fitness and simplification
   In line with the Commission’s commitment to Better Regulation, the proposal has been
   prepared inclusively, based on transparency and continuous engagement with stakeholders.
   Compared to the current Regulation, the proposal is not expected to increase the
   administrative costs caused by the legislation. In addition, it is not increasing the complexity
   of the legal framework.
   Two of the existing provisions, i.e. the ZLEV “bonus” incentive mechanism and the 'small
   volume' derogation, are proposed to be removed from 2030 onwards, which should contribute
   to the simplification of the legislation. At the same time, the regulatory system will continue
   to provide for flexibilities intended to lower the compliance cost for manufacturers.
   No changes in the compliance monitoring regime or in the level of the excess emissions
   premium are proposed. The proposal will therefore neither increase administrative costs for
   manufacturers and competent national authorities nor enforcement costs for the Commission.
   •         Fundamental rights
   The proposal respects the fundamental rights and observes the principles recognised in
   particular by the Charter of Fundamental Rights of the European Union 17. In particular, it
   contributes to the objective of a high level of environmental protection in accordance with the
   principle of sustainable development as laid down in Article 37 of the Charter of Fundamental
   Rights of the European Union.
   17
           OJ C 326, 26.10.2012, p. 391.
EN                                                  9                                               EN
 ---pagebreak---    4.        BUDGETARY IMPLICATIONS
   The collection, reporting and processing of different datasets are essential elements of the
   implementation and enforcement of the CO2 emission performance standards which are
   further extended or adjusted in this proposal. These datasets include data for target
   compliance purposes, for the verification of the CO2 emissions of vehicles in-service and data
   for assessing the representativeness of the type approval procedure as compared to real world
   CO2 emissions. In view of the important legal effects linked to those datasets, considerable
   efforts are needed to ensure their correctness and reliability for which further resources would
   be required within the Commission. A detailed breakdown of the budgetary implications is set
   out in the Financial Statement.
    5.       OTHER ELEMENTS
   •         Implementation plans and monitoring, evaluation and reporting arrangements
   A well-established system is in place for monitoring the implementation of Regulation (EU)
   2019/631. Member States annually report the CO2 emissions and mass of all newly registered
   cars and vans to the Commission. Manufacturers have the opportunity to notify to the
   Commission errors in this provisional data. In addition, from 2022, data on real-world fuel
   and energy consumption of cars and vans will be reported to the Commission by
   manufacturers and Member States’ competent authorities.
   The Commission, supported by the European Environment Agency (EEA), publishes every
   year the final monitoring data of the preceding calendar year including the manufacturer
   specific performance against the CO2 targets. The legislation will continue to rely on this
   well-established monitoring and compliance framework. From 2022 onwards, a comparison
   between the type approval and real world CO2 emissions data will be published by the
   Commission also with the support of the EEA.
   •         Detailed explanation of the specific provisions of the proposal
   Article 1(1): Amendment to Article 1 – Subject matter and objectives
   In paragraph 5 of Article 1, the EU fleet-wide CO2 targets for new passenger cars and new
   light commercial vehicles, which are applicable from 2030 onwards are revised. A new
   paragraph 5a is added, setting out the EU fleet-wide targets applying from 2035.
   In order to take into account the change in type approval test procedure, i.e. from the New
   European Test Cycle (NEDC) to the Worldwide Harmonised Light Vehicle Test Procedure
   (WLTP), the EU fleet-wide targets are expressed as percentage reductions compared to the
   2021 starting point. This starting point is determined on the basis of the average of the
   specific emission targets for 2021, where, in order to avoid an undue increase in the level of
   the starting point, the emission values used as input to the calculation are those measured
   during the WLTP, instead of the emission values declared by the manufacturers. The 2021
   starting point will be published by the Commission by 31 October 2022.
   The zero- and low-emission vehicles’ incentive set out in paragraph 7 is deleted from 2030
   onwards. An adjustment of the date in paragraph 6 is also necessary for that purpose.
   Article 1(2): Amendment to Article 2 – Scope
EN                                                10                                                EN
 ---pagebreak---    Paragraph 1 of Article 2 is amended in order to replace references to Directive 2007/46/EC18
   (type approval framework Directive), which was repealed from 1 September 2020, by
   references to the type approval framework Regulation (EU) 2018/85819 which applies since
   that date.
   Due to the change in structure between the repealed Directive and the new Regulation, the
   amendments are necessary in order to ensure precision in the legal references.
   Article 1(3): Amendment to Article 3 – Definitions
   In paragraph 1 of Article 3, the amendment aligns the definitions with those of the type
   approval legislation and removes the definition of footprint and payload as those terms are no
   longer relevant for the implementation of the Regulation.
   Article 1(4): Amendment to Article 4 – Specific emissions targets
   A sub-paragraph is added to paragraph 1 of Article 4, in which a safeguard is introduced to
   avoid that the calculation of the manufacturer’s specific emission targets under certain
   conditions would result in a negative target. Where that situation would occur, the specific
   emission target should be set to 0 g CO2/km.
   Article 1(5): Amendment to Article 7 – Monitoring and reporting of average emissions
   A new paragraph 6a is inserted which provides the Commission, as part of the verification of
   the provisional monitoring data, with the possibility to request type approval authorities and
   manufacturers to issue a statement of correction in those cases where the type approval
   documentation or the certificate of conformity cannot be corrected under the type approval
   legislation, such as where the incorrect data relates to a type approval which is no longer
   valid.
   Paragraph 11, which provides for the reporting of data concerning vehicles of category M 2
   and N2, is deleted, as those vehicle categories fall within the scope of Regulation (EU)
   2018/95620 on the monitoring and reporting of CO2 emissions from and fuel consumption of
   new heavy-duty vehicles.
   Article 1(6): Amendment to Article 10 – Derogations for certain manufacturers
   In paragraph 2 of Article 10, the possibility for manufacturers responsible for between 1 000
   and 10 000 new passenger cars or between 1 000 and 22 000 new light commercial vehicles in
   a calendar year to apply for a derogation from the specific emission targets is removed from
   2030 onwards. Manufacturers responsible for less than 1 000 new vehicle registrations per
   calendar year continue to be exempt.
   Article 1(7): Amendment to Article 13 – Verification of the CO2 emissions of vehicles in-
   service
   In paragraph 3 of Article 13, a provision is added providing the Commission with the
   possibility to request a type approval authority to issue a statement of correction in case
   corrections cannot be made to the type approval documentation or certificates of conformity
   under the relevant type approval legislation, e.g. due to their validity having expired.
   18
           Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing
           a framework for the approval of motor vehicles and their trailers, and of systems, components and
           separate technical units intended for such vehicles
   19
           Regulation (EU) 2018/858 of 30 May 2018 on the approval and market surveillance of motor vehicles
           and their trailers, and of systems, components and separate technical units intended for such vehicles,
           amending Regulations (EC) No 715/2007 and (EC) No 595/2009 and repealing Directive 2007/46/EC
   20
           Regulation (EU) 2018/956 of the European Parliament and of the Council of 28 June 2018 on the
           monitoring and reporting of CO2 emissions from and fuel consumption of new heavy-duty vehicles
EN                                                        11                                                       EN
 ---pagebreak---    Article 1(8): Amendment to Article 14 – Adjustment of M0 and TM0 values
   In paragraph 2 of Article 14, the legal basis is corrected to provide for an amendment of
   Annex I, which is consistent with current practice, replacing the current wording which refers
   to a Regulation supplementing Regulation (EU) 2019/631.
   Article 1(9): New Article 14a – Progress Report
   A new Article 14a is added in order to set out the obligation for the Commission to report on
   the progress towards zero-emission road mobility and assess the need for possible additional
   measures to facilitate the transition.
   Article 1(10): Amendment to Article 15 – Review and report
   In paragraph 1 of Article 15, a review of Regulation (EU) 2019/631 is foreseen for 2026,
   whilst paragraphs 2 to 5, which listed a number of elements to be considered for the current
   review, are deleted.
   A new paragraph 9 is added in order to provide a legal basis for amending the specific
   emission target calculation formulae in Part B of Annex I, where this is necessary in order to
   take into account the specific procedure applicable for light commercial vehicles that are type
   approved in multiple stages. I.e. this refers to the procedure applicable when a vehicle is
   manufactured by more than one manufacturer and the responsibility for the CO2 emissions of
   the completed vehicle is attributed to the manufacturer of the base vehicle. In order to provide
   that manufacturer with planning certainty, a specific procedure applies for how to determine
   the CO2 emissions and the mass of such multi-stage light commercial vehicles. The
   Commission is empowered to determine the procedure for multi-stage vehicles and may in
   case of a revision of that procedure also have to adjust the specific emission target calculation
   formulae.
   Article 1(11): Amendment to Article 17 – Exercise of the delegation
   A reference to the new Article 15(9) is added to paragraphs 2, 3 and 6 of Article 17.
   Article 1(12): Amendments to Annex I
   Part A of Annex I, relating to passenger cars, is amended to reflect the amendments to Article
   1. This includes adjusting the formulae for calculating the EU fleet-wide targets for 2030 and
   setting the formulae for 2035 as well as the annual specific emission targets for each
   manufacturer, and removing the application of the zero- and low-emission vehicle (ZLEV)
   factor from 2030 onwards.
   Part B of Annex I, relating to light commercial vehicles, is amended similarly to Part A, with
   the additional adjustment of the formulae for determining the slope values required for
   calculating the annual specific emission targets. This adjustment is made in order to ensure a
   fair distribution of the reduction burden between manufacturers of lighter light commercial
   vehicles and those manufacturing heavier vehicles of that category.
EN                                                12                                                 EN
 ---pagebreak---                                                            2021/0197 (COD)
                                             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
                                       (Text with EEA relevance)
   THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular
   Article 192(1) thereof,
   Having regard to the proposal from the European Commission,
   After transmission of the draft legislative act to the national parliaments,
   Having regard to the opinion of the European Economic and Social Committee21,
   Having regard to the opinion of the Committee of the Regions22,
   Acting in accordance with the ordinary legislative procedure,
   Whereas:
   (1)     The Paris Agreement, adopted in December 2015 under the United Nations
           Framework Convention on Climate Change (UNFCCC) entered into force in
           November 2016 (’the Paris Agreement’). Its Parties have agreed to hold the increase in
           the global average temperature well below 2 °C above pre-industrial levels and to
           pursue efforts to limit the temperature increase to 1,5 °C above pre-industrial levels.
   (2)     Tackling climate and environmental-related challenges and reaching the objectives of
           the Paris Agreement are at the core of the Communication on the “European Green
           Deal”, adopted by the Commission on 11 December 201923. The necessity and value
           of the European Green Deal have only grown in light of the very severe effects of the
           COVID-19 pandemic on the health and economic well-being of the Union’s citizens.
   (3)     The European Green Deal combines a comprehensive set of mutually reinforcing
           measures and initiatives aimed at achieving climate neutrality in the EU by 2050, and
           sets out a new growth strategy that aims to transform the Union into a fair and
           prosperous society, with a modern, resource-efficient and competitive economy, where
           economic growth is decoupled from resource use. It also aims to protect, conserve and
           enhance the Union's natural capital, and protect the health and well-being of citizens
           from environment-related risks and impacts. At the same time, this transition affects
           women and men differently and has a particular impact on some disadvantaged
   21
           OJ C , , p. .
   22
           OJ C , , p. .
   23
           Commission Communication - The European Green Deal, COM(2019) 640 final of 11 December 2019.
EN                                                  13                                                  EN
 ---pagebreak---         groups, such as older people, persons with disabilities and persons with a minority
        racial or ethnic background. It must therefore be ensured that the transition is just and
        inclusive, leaving no one behind.
   (4)  The Union committed to reducing the Union’s economy-wide net greenhouse gas
        emissions by at least 55% by 2030 below 1990 levels in the updated nationally
        determined contribution submitted to the UNFCCC Secretariat on 17 December 2020.
   (5)  In Regulation (EU) [--] of the European Parliament and of the Council 24 the Union has
        enshrined the target of economy-wide climate neutrality by 2050 in legislation. That
        Regulation also establishes a binding Union domestic reduction commitment of net
        greenhouse gas emissions (emissions after deduction of removals) of at least 55%
        below 1990 levels by 2030.
   (6)  All sectors of the economy are expected to contribute to achieving those emission
        reductions, including the road transport sector.
   (7)  The measures set out in this Regulation are necessary as part of a coherent and
        consistent framework that is indispensable for achieving the overall objective of the
        Union to reduce net greenhouse gas emissions.
   (8)  In order to achieve a reduction in net greenhouse gas emissions of at least 55 % by
        2030 compared to 1990, it is necessary to strengthen the reduction requirements set
        out in Regulation (EU) 2019/631 of the European Parliament and of the Council 25 for
        both passenger cars and light commercial vehicles. A clear pathway also needs to be
        set for further reductions beyond 2030 to contribute to achieving the climate neutrality
        objective by 2050. Without ambitious action on greenhouse gas emission reductions in
        road transport, higher emission reductions would be needed in other sectors, including
        sectors where decarbonisation is more challenging.
   (9)  The strengthened CO2 emission reduction requirements should incentivise an
        increasing share of zero-emission vehicles being deployed on the Union market whilst
        providing benefits to consumers and citizens in terms of air quality and energy
        savings, as well as ensuring that innovation in the automotive value chain can be
        maintained. Within the global context, also the EU automotive chain must be a leading
        actor in the on-going transition towards zero-emission mobility. The strengthened CO2
        emission reduction standards are technology neutral in reaching the fleet-wide targets
        that they set. Different technologies are and remain available to reach the zero-
        emission fleet wide target. Zero-emission vehicles currently include battery electric
        vehicles, fuel-cell and other hydrogen powered vehicles, and technological innovations
        are continuing. Zero and low-emission vehicles, which also include well performing
        plug-in hybrid electric vehicles, can continue to play a role in the transition pathway.
   (10) Against that background, new strengthened CO2 emission reduction targets should be
        set for both new passenger cars and new light commercial vehicles for the period 2030
        onwards. Those targets should be set at a level that will deliver a strong signal to
        accelerate the uptake of zero-emission vehicles on the Union market and to stimulate
        innovation in zero-emission technologies in a cost-efficient way.
   24
        Regulation (EU) […/…] of […] 2021 of the European Parliament and of the Council establishing the
        framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European
        Climate Law), [OJ L, …/… .].
   25
        Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 setting CO2
        emission performance standards for new passenger cars and for new light commercial vehicles, and
        repealing Regulations (EC) No 443/2009 and (EU) No 510/2011 (OJ L 111, 25.4.2019, p. 13).
EN                                                 14                                                       EN
 ---pagebreak---    (11) The targets in the revised CO2 performance standards should be accompanied by a
        European strategy to address the challenges posed by the scale-up of the
        manufacturing of zero-emission vehicles and associated technologies, as well as the
        need for up- and re-skilling of workers in the sector and the economic diversification
        and reconversion of activities. Where appropriate, financial support should be
        considered at the level of the EU and Member States to crowd in private investment,
        including via the European Social Fund Plus, the Just Transition Fund, the Innovation
        Fund, the Recovery and Resilience Facility and other instruments of the Multiannual
        Financial Framework and the Next Generation EU, in line with State aid rules. The
        revised environmental and energy state aid rules will enable Member States to support
        business to decarbonize their production processes and adopt greener technologies in
        the context of the New Industrial Strategy.
   (12) The updated New Industrial Strategy26 foresees the co-creation of green and digital
        transition pathways in partnership with industry, public authorities, social partners and
        other stakeholders. In this context, a transition pathway should be developed for the
        mobility ecosystem to accompany the transition of the automotive value chain. The
        pathway should take particular heed of SMEs in the automotive supply chain, of the
        consultation of social partners including by Member States, and also build on the
        European Skills Agenda with initiatives like the Pact for Skills to mobilise the private
        sector and other stakeholders to up-skill and re-skill Europe’s workforce in view of the
        green and digital transitions. The appropriate actions and incentives at European and
        national level to boost the affordability of zero emission vehicles should also be
        addressed in the pathway. The progress made on this comprehensive transition
        pathway for the mobility ecosystem should be monitored every two years as part of a
        progress report to be submitted by the Commission, looking inter alia at the progress
        in the deployment of zero-emission vehicles, their price developments, deployment of
        alternative fuels development and infrastructure roll-out as required under the
        Alternative Fuels Infrastructure Regulation, the potential of innovative technologies to
        reach climate neutral mobility, international competitiveness, investments in the
        automotive value chain, up-skilling and re-skilling of workers and reconversion of
        activities. The progress report will also build on the two-year progress reports that
        Member States submit under the Alternative Fuels Infrastructure Regulation. The
        Commission should consult social partners in the preparation of the progress report,
        including the results in the social dialogue. Innovations in the automotive supply chain
        are continuing. Innovative technologies such as the production of electro-fuels with air
        capture, if further developed, could offer prospects for affordable climate neutral
        mobility. The Commission should therefore keep track of progress in the state of
        innovation in the sector as part of its progress report.
   (13) Those EU fleet-wide targets are to be complemented by the necessary roll-out of
        recharging and refuelling infrastructure as set out in Directive 2014/94/EU of the
        European Parliament and of the Council27.
   (14) Manufacturers should be provided with sufficient flexibility in adapting their fleets
        over time in order to manage the transition towards zero-emission vehicles in a cost-
        efficient manner, and it is therefore appropriate to maintain the approach of decreasing
        target levels in five-year steps.
   26
        Commission Communication - Updating the 2020 New Industrial Strategy: Building a stronger Single
        Market for Europe’s recovery, COM(2021) 350 final of 5 May 2021
   27
        Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the
        deployment of alternative fuels infrastructure (OJ L 307 28.10.2014, p. 1).
EN                                                     15                                                EN
 ---pagebreak---    (15) With the stricter EU fleet-wide targets from 2030 onwards, manufacturers will have to
        deploy significantly more zero-emission vehicles on the Union market. In that context,
        the incentive mechanism for zero- and low-emission vehicles (‘ZLEV’) would no
        longer serve its original purpose and would risk undermining the effectiveness of
        Regulation (EU) 2019/631. The ZLEV incentive mechanism should therefore be
        removed as of 2030. Before that date and therefore throughout this decade, the
        incentive mechanism for ZLEV will continue to support the deployment of vehicles
        with emissions from zero up to 50 g CO2/km, including battery electric vehicles, fuel-
        cell electric vehicles using hydrogen and well performing plug-in hybrid electric
        vehicles. After that date, plug-in hybrid electric vehicles continue to count against the
        fleet-wide targets that vehicle manufacturers must meet.
   (16) The implementation of the CO2 emission standards is strongly linked to that of the
        type approval legislation. Following the repeal and replacement of Directive
        2007/46/EC of the European Parliament and of the Council28 on 1 September 2020 by
        Regulation (EU) 2018/858 of the European Parliament and of the Council 29, it is
        appropriate, in order to ensure continued consistency between the two sets of
        instruments, to further align the definitions and to update references in Regulation
        (EU) 2019/631 to the type approval framework legislation.
   (17) The emission reduction effort required to achieve the EU fleet-wide targets is
        distributed amongst manufacturers by using a limit value curve based on the average
        mass of the EU fleet of new vehicles and of the manufacturer’s new vehicle fleet.
        While it is appropriate to maintain this mechanism, it is necessary to prevent that with
        the stricter EU fleet-wide targets, the specific emission target for a manufacturer
        would become negative. For that reason, it is necessary to clarify that where such a
        result occurs, the specific emission target should be set to 0 g CO2/km.
   (18) In order to ensure a fair distribution of the reduction effort, the two limit value curves
        for lighter and heavier light commercial vehicles should be adjusted to reflect the
        strengthened CO2 reduction targets.
   (19) The values used for the calculation of the specific emission targets and the average
        specific emissions of a manufacturer are based on data recorded in the type approval
        documentation and in the certificates of conformity of the vehicles concerned. It is
        essential for ensuring the effectiveness of the CO2 emission standards that the data
        used for these purposes is correct. If nevertheless errors are identified in the data, it
        may not be possible, based on the type approval legislation to correct the type
        approval documentation or the certificates of conformity that have already been
        issued, where the data refers to type approvals that have ceased to be valid. In such
        situations, the Commission should have the power to request that the relevant type
        approval authorities, or where applicable, manufacturers, issue a statement of
        correction on the basis of which the values used for determining manufacturers’
        performance in meeting their targets can be corrected.
   (20) The reporting of data from vehicles of categories M2 (buses) and N2 (medium-sized
        lorries) falls within the scope of Regulation (EU) 2018/956 of the European
   28
        Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing
        a framework for the approval of motor vehicles and their trailers, and of systems, components and
        separate technical units intended for such vehicles (OJ L 263, 9.10.2007, p.1).
   29
        Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the
        approval and market surveillance of motor vehicles and their trailers, and of systems, components and
        separate technical units intended for such vehicles, amending Regulations (EC) No 715/2007 and (EC)
        No 595/2009 and repealing Directive 2007/46/EC (OJ L 151, 14.6.2018, p. 1).
EN                                                     16                                                     EN
 ---pagebreak---         Parliament and of the Council30 and it is therefore appropriate to remove this
        requirement from Regulation (EU) 2019/631.
   (21) In view of the increased overall greenhouse gas emissions reduction objectives and to
        avoid potential market distorting effects, the reduction requirements for all
        manufacturers present in the Union market should be aligned, except for those
        responsible for less than 1 000 new vehicles registered in a calendar year.
        Consequently, the possibility for manufacturers responsible for between 1 000 and
        10 000 passenger cars or between 1 000 and 22 000 light commercial vehicles newly
        registered in a calendar year to apply for a derogation from their specific emission
        targets should cease from 2030 onwards.
   (22) In order to ensure legal clarity and consistency with current practice, it is appropriate
        to clarify that the adjustments of the M0 and TM0 values should be done by way of
        amendments to Annex I to Regulation (EU) 2019/631 instead of providing for an act
        supplementing that Regulation.
   (23) The progress made under Regulation (EU) 2019/631 towards achieving the reduction
        objectives set for 2030 and beyond should be reviewed in 2026. For this review, all
        aspects considered in the two yearly reporting should be considered.
   (24) The possibility to assign the revenue from the excess emission premiums to a specific
        fund or relevant programme has been evaluated as required pursuant to Article 15(5)
        of Regulation (EU) 2019/631, with the conclusion that this would significantly
        increase the administrative burden, while not directly benefit the automotive sector in
        its transition. Revenue from the excess emission premiums is therefore to continue to
        be considered as revenue for the general budget of the Union in accordance with
        Article 8(4) of Regulation (EU) 2019/631.
   (25) In order to ensure that the calculation of the specific emission targets for
        manufacturers responsible for the CO2 emissions of multi-stage light commercial
        vehicles can be adjusted to take into account changes in procedure for determining the
        CO2 emissions and mass of such vehicles, the power to adopt acts in accordance with
        Article 290 of the Treaty on the Functioning of the European Union should be
        delegated to the Commission in respect of amending, where necessary, the calculation
        formulae set out in Part B of Annex I to Regulation (EU) 2019/631. It is of particular
        importance that the Commission carry out appropriate consultations during its
        preparatory work, including at expert level, and that those consultations be conducted
        in accordance with the principles laid down in the Interinstitutional Agreement of 13
        April 2016 on Better Law-Making. In particular, to ensure equal participation in the
        preparation of delegated acts, the European Parliament and the Council receive all
        documents at the same time as Member States' experts, and their experts
        systematically have access to meetings of Commission expert groups dealing with the
        preparation of delegated acts.
   (26) Regulation (EU) 2019/631 should therefore be amended accordingly,
   30
        Regulation (EU) 2018/956 of the European Parliament and of the Council of 28 June 2018 on the
        monitoring and reporting of CO2 emissions from and fuel consumption of new heavy-duty vehicles (OJ
        L 173, 9.7.2018, p. 1).
EN                                                  17                                                     EN
 ---pagebreak---    HAVE ADOPTED THIS REGULATION:
                                                 Article 1
   Regulation (EU) 2019/631 is amended as follows:
   (1)     Article 1 is amended as follows:
           (a)    paragraph 5 is amended as follows:
                  (i)    in point (a), the figure “37,5 %” is replaced by ‘55 %’,
                  (ii)   in point (b), the figure “31 %” is replaced by ‘50 %’,
           (b)    the following paragraph 5a is inserted:
           ‘5a. From 1 January 2035, the following EU fleet-wide targets shall apply:
                  (a)    for the average emissions of the new passenger car fleet, an EU fleet-
                         wide target equal to a 100 % reduction of the target in 2021 determined
                         in accordance with Part A, point 6.1.3, of Annex I;
                  (b)    for the average emissions of the new light commercial vehicles fleet, an
                         EU fleet-wide target equal to a 100 % reduction of the target in 2021
                         determined in accordance with Part B, point 6.1.3, of Annex I.
           (c)    in paragraph 6, the words “From 1 January 2025,” are replaced by ‘From 1
                  January 2025 to 31 December 2029,’,
           (d)    paragraph 7 is deleted;
   (2)     Article 2 is amended as follows:
           (a)    paragraph 1 is amended as follows:
                  (a)    in point (a) the reference to ’Annex II to Directive 2007/46/EC’ is
                         replaced by ‘Article 4(1), point (a)(i), of Regulation (EU) 2018/858’,
                  (b)    point (b) is replaced by the following:
                  ‘(b) category N1 as defined in Article 4(1), point (b)(i), of Regulation (EU)
                  2018/858 and falling within the scope of Regulation (EC) No 715/2007 (‘light
                  commercial vehicles’), which are registered in the Union for the first time and
                  which have not previously been registered outside the Union (‘new light
                  commercial vehicles’); in the case of zero-emission vehicles of category N
                  with a reference mass exceeding 2 610 kg or 2 840 kg, as the case may be, they
                  shall, from 1 January 2025, for the purposes of this Regulation and without
                  prejudice to Regulation (EU) 2018/858 and Regulation (EC) No 715/2007, be
                  counted as light commercial vehicles falling within the scope of this
                  Regulation if the excess reference mass is due only to the mass of the energy
                  storage system.’,
           (b)    in paragraph 3, the reference to “point 5 of Part A of Annex II to Directive
                  2007/46/EC” is replaced by a reference to ‘ Part A, point 5, of Annex I to
                  Regulation (EU) 2018/858’;
   (3)     in Article 3, paragraph 1 is amended as follows:
           (a)    the introductory sentence is replaced by the following:
           ‘For the purposes of this Regulation, the definitions in Regulation (EU) 2018/858
           shall apply. The following definitions shall also apply:’,
EN                                                  18                                            EN
 ---pagebreak---         (b)    points (b) to (g) and points (i) and (n) are deleted;
   (4)  in Article 4(1), the following subparagraph is added:
        ‘For the purposes of point (c), where the specific emission target determined in
        accordance with Part A, point 6.3., of Annex I or Part B, point 6.3., of Annex I is
        negative, the specific emission target shall be 0 g/km.’;
   (5)  Article 7 is amended as follows:
        (a)    the following paragraph 6a is inserted:
        ‘6a. Where the Commission finds that the provisional data submitted by Member
        States in accordance with paragraph 2, or the data notified by the manufacturers in
        accordance with paragraph 5, is based on incorrect data in the type approval
        documentation or in the certificates of conformity, the Commission shall inform the
        type approval authority or, where applicable, the manufacturer and request the type
        approval authority or, where applicable, the manufacturer to issue a statement of
        correction specifying the corrected data. The statement of correction shall be
        transmitted to the Commission and the corrected data shall be used to amend the
        provisional calculations under paragraph 4.’,
        (b)    paragraph 11 is deleted;
   (6)  in Article 10(2), the first sentence is replaced by the following:
         ‘A derogation applied for under paragraph 1 may be granted from the specific
        emission targets applicable until and including calendar year 2029.’;
   (7)  in Article 13(3), the following second sentence is added:
        ‘Where the data in the type approval documentation may not be corrected under
        Regulation (EU) 2018/858, the responsible type-approval authority shall issue a
        statement of correction with the corrected data and transmit that statement to the
        Commission and the parties concerned.’;
   (8)  in Article 14(2), the words ‘supplement this Regulation by establishing the measures
        referred to in’ is replaced by ‘amend Annex I as provided for in’;
   (9)  the following Article 14a is inserted:
                                                 ‘Article 14a
                                               Progress report
        By 31 December 2025, and every two years thereafter, the Commission shall report
        on the progress towards zero emission road mobility. The report shall in particular
        monitor and assess the need for possible additional measures to facilitate the
        transition, including through financial means.
        In the reporting, the Commission shall consider all factors that contribute to a cost-
        efficient progress towards climate neutrality by 2050. This includes the deployment
        of zero- and low-emission vehicles, progress in achieving the targets for the roll-out
        of recharging and refuelling infrastructure as required under the Alternative Fuels
        Infrastructure Regulation, the potential contribution of innovation technologies and
        sustainable alternative fuels to reach climate neutral mobility, impact on consumers,
        progress in social dialogue as well as aspects to further facilitate an economically
        viable and socially fair transition towards zero emission road mobility.’;
   (10) Article 15 is amended as follows:
EN                                               19                                            EN
 ---pagebreak---             (a)   paragraph 1 is replaced by the following:
            ‘1. The Commission shall, in 2028, review the effectiveness and impact of this
            Regulation, building on the two yearly reporting, and submit a report to the European
            Parliament and to the Council with the result of the review.
            The report shall, where appropriate, be accompanied by a proposal for amending this
            Regulation.’
            (b)   paragraphs 2 to 5 are deleted,
            (c)   the following paragraph 9 is added:
            ‘9. The Commission is empowered to adopt delegated acts in accordance with Article
            17 in order to amend the formulae set out in Part B of Annex I, where such
            amendments are necessary in order to take into account the procedure for multi-stage
            N1 vehicles set out in Part A of Annex III.’;
   (11)     Article 17 is amended as follows:
            (a)    in paragraph 2, the words ‘Article 15(8)’ are replaced by ‘Article 15(8) and
                  (9)’;
            (b)    in paragraph 3, the words ‘Article 15(8)’ are replaced by ‘Article 15(8) and
                  (9)’;
            (c)    in paragraph 6, the words ‘Article 15(8)’ are replaced by ‘Article 15(8) and
                  (9)’;
   (12)     Annex I is amended in accordance with the Annex to this Regulation.
                                               Article 2
   This Regulation shall enter into force on the twentieth day following that of its publication in
   the Official Journal of the European Union.
   This Regulation shall be binding in its entirety and directly applicable in all Member States.
   Done at Brussels,
   For the European Parliament                   For the Council
   The President                                 The President
EN                                                 20                                               EN
 ---pagebreak---                                LEGISLATIVE FINANCIAL STATEMENT
   1.         FRAMEWORK OF THE PROPOSAL/INITIATIVE
   1.1.       Title of the proposal/initiative
        Proposal for a Regulation 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
   1.2.       Policy area(s) concerned
        Climate action
        Heading 3 – Natural resources and Environment
        Title 9 – Environment and Climate Action
   1.3.       The proposal/initiative relates to:
             a new action
                                                                                   31
             a new action following a pilot project/preparatory action
             the extension of an existing action
             a merger or redirection of one or more actions towards another/a new action
   1.4.       Objective(s)
   1.4.1.     General objective(s)
        The general objectives of this proposal are to contribute to achieving climate neutrality by
        2050 and to this end, in line with the European Climate Law, to contribute reaching at
        least 55% net greenhouse gas emission reductions by 2030 compared to 1990.
        The proposal is part of the 2030 Climate and Energy “Fit for 55” package to achieve the
        EU 2030 greenhouse gas emission reduction target of at least -55% compared to 1990
        domestically in a cost effective manner and contribute to limiting global warming. The
        package delivers on the Commission’s obligation, set in Article 3 of the Climate Law, of
        reviewing relevant Union legislation in order to enable the achievement of the above
        mentioned target.
   1.4.2.     Specific objective(s)
        Specific objectives of this proposal are to
        1. Contribute to the 2030 at least -55% net GHG emissions target and to the climate
        neutrality objective by 2050 by revising and setting new EU fleet-wide targets with a view
        to reducing CO2 emissions from cars and vans cost-effectively;
        2. Provide benefits for consumers from wider deployment of zero-emission vehicles, by
        improving air quality in particular in cities and energy savings from the use 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.
   31
            As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
EN                                                           21                                      EN
 ---pagebreak---    1.4.3.     Expected result(s) and impact
        Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.
        The proposal will ensure that CO2 emissions from light-duty vehicles are reduced, provide
        benefits to consumers in term of air quality and energy savings, and strengthen the
        technological leadership of the EU automotive value chain. Additional co-benefits are
        expected to be increased energy efficiency and energy security.
   1.4.4.     Indicators of performance
        Specify the indicators for monitoring progress and achievements.
        The following indicators have been identified:
        1. The EU fleet average CO2 emissions of new cars and vans will be monitored annually
        per vehicle, manufacturer and Member State;
        2. The gap between the type-approved CO2 emissions data and real-world CO2 emissions
        data will be monitored through the collection and publication of real-world fuel
        consumption data;
        3. Deviations between the type approved CO2 emissions and the CO2 emissions of
        vehicles in-service will be monitored through the setting up of a specific in-service
        verification procedure and the collection of the type approval data;
        4. Cars and vans GHG emissions will be monitored through Member States' annual GHG
        emissions inventories;
        5. The number and share of newly registered zero- and low-emission vehicles will be
        monitored through the annual monitoring data submitted by Member States;
        6. The costs and effectiveness of technologies used in the vehicles to reduce emissions
        will be monitored on the basis of data to be collected from manufacturers, suppliers and
        experts;
        7. The level of innovation will be measured in terms of new patents by European
        automotive manufacturers related to zero-emission technologies through publicly
        available patents databases;
        8. The level of employment will be monitored on the basis of publicly available Eurostat
        statistics on sectoral employment data for the EU.
   1.5.       Grounds for the proposal/initiative
   1.5.1.     Requirement(s) to be met in the short or long term including a detailed timeline for
              roll-out of the implementation of the initiative
        Manufacturers of passenger cars and light commercial vehicles newly registered in the
        Union will have to:
        - comply with the revised fleet-wide CO2 emission targets;
        - report to the Commission real-world fuel consumption data measured by standardised
        devices;
        - be subject to in-service conformity tests, the results of which are reported to the
        Commission.
        Member States will have to report annually to the Commission and the European
        Environment Agency technical data on newly registered cars and light commercial
        vehicles.
EN                                                          22                                              EN
 ---pagebreak---    1.5.2.    Added value of Union involvement (it may result from different factors, e.g.
             coordination gains, legal certainty, greater effectiveness or complementarities). For
             the purposes of this point 'added value of Union involvement' is the value resulting
             from Union intervention which is additional to the value that would have been
             otherwise created by Member States alone.
       Climate change is a trans-boundary problem, which cannot be solved by national or local
       action alone. Coordination of climate action must be taken at European level and EU
       action is justified on grounds of subsidiarity.
       Although initiatives at the national, regional and local level can create synergies, alone
       they will not be sufficient. Lack of coordinated EU action via the strengthening of CO2
       emission standards would translate into a risk of market fragmentation due to the diversity
       of national schemes, differing ambition levels and design parameters. On their own,
       individual Member States would also represent too small a market to achieve the same
       level of results, therefore, an EU wide approach is needed to drive industry level changes
       and to create economies of scale.
   1.5.3.    Lessons learned from similar experiences in the past
       The proposal builds on existing legislation which has ensured continuous reductions in the
       CO2 emissions of the EU fleet of new cars and light commercial vehicles over the past
       decade.
   1.5.4.    Compatibility with the Multiannual Financial Framework and possible synergies
             with other appropriate instruments
       This proposal is compatible with the objectives of the Next Generation EU and the
       Multiannual Financial Framework for 2021-2027 which will help achieving the twin
       green and digital transitions that Europe is aiming for. The combination of these
       frameworks will address the economic crisis and accelerate the shift to a clean and
       sustainable economy, linking climate action and economic growth.
       This ‘fit for 55’ climate and energy package is a comprehensive step in overhauling Union
       legislation to align it with the EU’s increased climate ambition as set out in the European
       Green Deal. All initiatives in the package are closely interlinked.
       This legislative proposal on the CO2 emission standards for cars and light commercial
       vehicles is complementary and maintains consistency with the relevant proposals made in
       the package.
   1.5.5.    Assessment of the different available financing options, including scope for
             redeployment
       N/A
EN                                                 23                                              EN
 ---pagebreak---    1.6.      Duration and financial impact of the proposal/initiative
         limited duration
                   in effect from [DD/MM]YYYY to [DD/MM]YYYY
                   Financial impact from YYYY to YYYY for commitment appropriations and
           from YYYY to YYYY for payment appropriations.
         unlimited duration
                   Implementation with a start-up period from 2023 to 2025,
                   followed by full-scale operation.
   1.7.      Management mode(s) planned32
         Direct management by the Commission
                   by its departments, including by its staff in the Union delegations;
                   by the executive agencies
         Shared management with the Member States
         Indirect management by entrusting budget implementation tasks to:
            third countries or the bodies they have designated;
            international organisations and their agencies (to be specified);
            the EIB and the European Investment Fund;
            bodies referred to in Articles 70 and 71 of the Financial Regulation;
            public law bodies;
            bodies governed by private law with a public service mission to the extent that they
           provide adequate financial guarantees;
            bodies governed by the private law of a Member State that are entrusted with the
           implementation of a public-private partnership and that provide adequate financial
           guarantees;
            persons entrusted with the implementation of specific actions in the CFSP pursuant
           to Title V of the TEU, and identified in the relevant basic act.
           If more than one management mode is indicated, please provide details in the
           ‘Comments’ section.
   Comments
   32
           Details of management modes and references to the Financial Regulation may be found on the
           BudgWeb site:
           https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx
EN                                                    24                                              EN
 ---pagebreak---    2.         MANAGEMENT MEASURES
   2.1.       Monitoring and reporting rules
        Specify frequency and conditions.
        In order to monitor the effectiveness of the proposed strengthened CO2 emission reduction
        requirements, extensive data collection is required from different sources, including from
        Member States, automotive manufacturers and national type approval authorities. While
        the data management is performed by the European Environment Agency and the Joint
        Research Centre, coordination of the data collection activities, including interaction with
        the reporting entities is the responsibility of DG CLIMA. The tasks of DG CLIMA also
        include the analysis of the data and the preparation and execution of follow-up actions,
        including imposing financial fines on manufacturers based on the collected data.
        Three main datasets are being or will be collected:
        Data on new vehicle registrations, including technical information, is reported by Member
        States annually to the EEA. This data forms the basis for determining manufacturers’
        compliance with their specific emission targets and the imposing of any fines. The data is
        verified by manufacturers after which it is confirmed by way of Commission decision.
        Data on real world fuel and/or electric energy consumption as recorded on-board vehicles
        will be reported to the EEA annually from 2022 onwards, starting with data delivered by
        manufacturers and followed in 2025 by data collected at the roadworthiness tests by
        Member States. The data will be used as a basis for assessing the representativeness of the
        type approval CO2 emissions and may result in a revision of the CO2 emission target
        levels as well as of the type approval legislation, where appropriate.
        Data on type approval emission tests will be collected continuously by the JRC for the
        purpose of the procedure for verifying how the CO2 emissions determined at type
        approval correspond to the emissions of vehicles in-service.
   2.2.       Management and control system(s)
   2.2.1.     Justification of the management mode(s), the funding implementation mechanism(s),
              the payment modalities and the control strategy proposed
        The proposal is not implementing a financial programme but designing a long-term
        policy. Management mode, funding implementation mechanisms, payment modalities and
        control strategy in relation to error rates are not applicable. The implementation of this
        proposal will require the redeployment of human resources within the Commission.
        Appropriate procedures are in place.
   2.2.2.     Information concerning the risks identified and the internal control system(s) set up
              to mitigate them
        This proposal does not concern a spending programme.
        Efficient monitoring of vehicle registration data is essential for ensuring legal certainty in
        enforcing the legislation and for ensuring level playing field between different
        manufacturers.
        The real-world data collection and the in-service verification procedure will ensure that
        irregularities in the vehicle registration data can be detected and effective remedial
        measures be taken in a timely manner and will also serve to ensure that the long-term
        effectiveness of the EU CO2 emission targets are not undermined.
EN                                                  25                                                 EN
 ---pagebreak---         The risk of erronous vehicle registration data or delayed reporting by Member States
        and/or manufacturers might lead to difficulties in implementing the CO2 emission
        standards.
        The risk that the gap between real-world CO2 emissions and fuel consumption and those
        values determined at type approval increases may undermine the CO2 emission targets.
        The risk that the CO2 emissions recorded by manufacturers in the certificates of
        conformity used for registration purposes do not correspond to the CO 2 emissions of
        vehicles in-service may undermine the CO2 emission targets.
        The main internal control systems include the verification of the reported registration data,
        the analyses of the evolution of real-world data as compared to registration data and
        detecting deviations between the CO2 emissions recorded in the certificates of conformity
        and the emissions of vehicles in-service.
   2.2.3.     Estimation and justification of the cost-effectiveness of the controls (ratio of "control
              costs ÷ value of the related funds managed"), and assessment of the expected levels
              of risk of error (at payment & at closure)
        This initiative does not bring about new significant controls/risks that would not be
        covered be an existing internal control framework. No specific measures beyond the
        application of the Financial Regulation have been envisaged.
   2.3.       Measures to prevent fraud and irregularities
        Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
        In addition to the application of the Financial Regulation to prevent fraud and
        irregularities, the strengthened CO2 reduction requirements provided for in this proposal
        will be accompanied by enhanced monitoring and reporting of different datasets as
        described in point 2.2.2.
EN                                                        26                                                 EN
 ---pagebreak---     3.        ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
    3.1.      Heading(s) of the multiannual financial framework and expenditure budget line(s) affected
                     Existing budget lines
             In order of multiannual financial framework headings and budget lines.
                                                                   Type of
                                 Budget line                     expenditure
                                                                                                  Contribution
 Heading of
 multiannual                                                                     from                                 within the
                                                                                             from
  financial                                                                     EFTA                                 meaning of
              Number                                              Diff./Non-
                                                                               countries
                                                                                           candidate   from third
 framework                                                               33                         35            Article 21(2)(b) of
                                                                   diff.           34     countries     countries   the Financial
                                                                                                                      Regulation
                                                                   Non-
      7       20 01 02 01                                                        NO          NO           NO             NO
                                                                    diff.
              New budget lines requested: N/A
    33
             Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
    34
             EFTA: European Free Trade Association.
    35
             Candidate countries and, where applicable, potential candidates from the Western Balkans.
EN                                                                                             27                                     EN
 ---pagebreak---   3.2.     Estimated financial impact of the proposal on appropriations
  3.2.1.   Summary of estimated impact on operational appropriations
            The proposal/initiative does not require the use of operational appropriations
            The proposal/initiative requires the use of operational appropriations, as explained below:
                                                                                                                                EUR million (to three decimal places)
                                                                                                           'natural resources and
   Heading of multiannual financial framework                                                      3
                                                                                                                environment'
   DG: CLIMA                                                                                2023 2024 2025     2026     2027    TOTAL
   Operational appropriations
                                                                Commitments           (1)
    09 02 03
                                                                Payments              (2)
   Appropriations of an administrative nature financed from the envelope of specific programmes
    09 01 01 01                                                                       (3)
                                                                Commitments         =1+3
    TOTAL appropriations DG CLIMA
                                                                Payments            =2+3
                                                                Commitments           (4)
    TOTAL operational appropriations
                                                                Payments              (5)
    TOTAL appropriations of an administrative nature financed from the                (6)
   envelope for specific programmes
    TOTAL appropriations under HEADING 3 of the                 Commitments         = 4+ 6
   multiannual financial framework                              Payments            = 5+ 6
EN                                                                                      28                                                                         EN
 ---pagebreak---           Heading of multiannual financial
                                                            7      ‘Administrative expenditure’
                     framework
    This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative Financial
    Statement (Annex V to the internal rules), which is uploaded to DECIDE for interservice consultation purposes.
                                                                                                                                EUR million (to three decimal places)
                                                                    2023     2024      2025      2026       2027                TOTAL
                DG: CLIMA
                                                                            0.304       0.304     0.304     0.304
  Human resources                                                 0.304
                                                                                                                                                  1.520
  Other administrative expenditure
                                                                      0.304    0.304    0.304     0.304     0.304
            TOTAL DG CLIMA                  Appropriations                                                                                        1.520
                                                                      0.304    0.304    0.304     0.304     0.304
           TOTAL appropriations
                                            (Total commitments =
            under HEADING 7                 Total payments)                                                                                       1.520
   of the multiannual financial framework
                                                                                                                                EUR million (to three decimal places)
                                                                    2023     2024      2025      2026       2027                TOTAL
           TOTAL appropriations             Commitments               0.304    0.304    0.304     0.304      0.304                                1.520
          under HEADINGS 1 to 7
                                                                      0.304    0.304    0.304     0.304      0.304
   of the multiannual financial framework   Payments                                                                                              1.520
EN                                                                                29                                                                                EN
 ---pagebreak---  3.2.2.    Estimated output funded with operational appropriations
                                                                                                                    Commitment appropriations in EUR million (to three decimal places)
                                                                   2023          2024            2025                2026               2027          TOTAL
                           Indicate
                        objectives and                                                           OUTPUTS
                           outputs
                                           Type     Avera
                                            36                                                                                                    Total   Total
                                                      ge      No     Cost   No      Cost    No      Cost       No           Cost   No      Cost
                                                    cost
                                                                                                                                                   No     cost
                                                      37
                        SPECIFIC OBJECTIVE No 1 …
                           - Output
                           - Output
                           - Output
                       Subtotal for specific objective No 1
                         SPECIFIC OBJECTIVE No 2 ...
                           - Output
                       Subtotal for specific objective No 2
                                      TOTALS
 36
          Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).
 37
          As described in point 1.4.2. ‘Specific objective(s)…’
EN                                                                                         30                                                                                       EN
 ---pagebreak---           3.2.3.       Summary of estimated impact on administrative appropriations
                                       The proposal/initiative does not require the use of appropriations of an
                               administrative nature
                                       The proposal/initiative requires the use of appropriations of an
                               administrative nature, as explained below:
                                                                                               EUR million (to three decimal places)
                                  Year           Year            Year            Year         Year
                                      38                                                                     TOTAL
                                 2023            2024           2025            2026          2027
       HEADING 7
    of the multiannual
   financial framework
                                                 0.304          0.304           0.304         0.304
 Human resources                  0.304                                                                       1.520
 Other administrative
 expenditure
  Subtotal HEADING 7              0.304          0.304          0.304           0.304         0.304
    of the multiannual                                                                                        1.520
   financial framework
                        39
 Outside HEADING 7
    of the multiannual
   financial framework
 Human resources
 Other expenditure
 of an administrative
 nature
         Subtotal
   outside HEADING 7
    of the multiannual
   financial framework
                                  0.304          0.304          0.304           0.304         0.304
          TOTAL                                                                                               1.520
          The appropriations required for human resources and other expenditure of an administrative nature will be met by
          appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the
          DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual
          allocation procedure and in the light of budgetary constraints.
          38
                     Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first
                     year of implementation (for instance: 2021). The same for the following years.
          39
                     Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes
                     and/or actions (former ‘BA’ lines), indirect research, direct research.
EN                                                                       31                                                                 EN
 ---pagebreak---       3.2.4.        Estimated requirements of human resources
                                       The proposal/initiative does not require the use of human resources.
                                       The proposal/initiative requires the use of human resources, as
                             explained below:
                                                                           Estimate to be expressed in full time equivalent units
                                                                                Year     Year      Year      Year     Year
                                                                                2023     2024      2025      2026     2027
              Establishment plan posts (officials and temporary staff)
               20 01 02 01 (Headquarters and Commission’s Representation
                                                                                 2         2         2          2      2
               Offices)
               20 01 02 03 (Delegations)
               01 01 01 01 (Indirect research)
                01 01 01 11 (Direct research)
               Other budget lines (specify)
                                                                   40
              External staff (in Full Time Equivalent unit: FTE)
               20 02 01 (AC, END, INT from the ‘global envelope’)
               20 02 03 (AC, AL, END, INT and JPD in the delegations)
                                 41                - at Headquarters
               XX 01 xx yy zz
                                                   - in Delegations
               01 01 01 02 (AC, END, INT - Indirect research)
                01 01 01 12 (AC, END, INT - Direct research)
               Other budget lines (specify)
               TOTAL                                                             2         2         2          2      2
            XX is the policy area or budget title concerned.
            The human resources required will be met by staff from the DG who are already assigned to management of the action
            and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted
            to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
      Description of tasks to be carried out:
 Officials and temporary staff                   One additional AD official will be required as from 2023 to be
                                                 responsible for a new function to ensure the coordination and follow-up
                                                 of the different data collection exercises provided for in the Regulation.
                                                 This function reflects, in particular, the need for enhanced follow-up of
                                                 the evolution of the real-world CO2 emissions from new cars and
                                                 vans in order to ensure that the increased reduction objectives set out in
                                                 this proposal are indeed achieved. The new function will ensure that an
                                                 efficient and coherent basis is provided for implementation and
                                                 enforcement of the CO2 emission standards, as well as preparation of
                                                 any related new policy measures.
                                                 This function includes the following specific tasks:
                                                            Ensure overall coordination of the different data collection
                                                             exercises including analysis of the data and consistency checks
      40
                  AC= Contract Staff; AL = Local Staff; END= Seconded National Expert; INT = agency staff;
                  JPD= Junior Professionals in Delegations.
      41
                  Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).
EN                                                                      32                                                        EN
 ---pagebreak---                                                   across the different dataset;
                                                 Follow-up with reporting entities (manufacturers, national data
                                                  reporting authorities and type approval authorities) and liaising
                                                  with the EEA and the JRC;
                                                 Ensuring an efficient reporting of real-world fuel consumption
                                                  data by manufacturers and Member States, including follow-up
                                                  and data verification together with the EEA;
                                                 Performing an analysis of the real-world data, in particular, with
                                                  regard to the evolution of the gap between real-world and type
                                                  approval emissions, and provide detailed technical input to
                                                  future revisions of the CO2 emission standards and the type
                                                  approval legislation;
                                                 Preparation of annual Commission Decisions on the real world
                                                  data;
                                                 Preparation of corrections to the CO2 compliance data
                                                  (registration data) where deviations are determined based on the
                                                  in-service verification procedure, including ensuring effective
                                                  collection together with the JRC of type approval test data.
                                         A second additional AD official will be required to contribute to the
                                         preparation of the new Progress Report pursuant to Article 14a on the
                                         progress towards zero emission road mobility and on the assessment of
                                         the need for possible additional measures to facilitate the transition.
 External staff                          N/A
      3.2.5.      Compatibility with the current multiannual financial framework
                        The proposal/initiative:
                  can be fully financed through redeployment within the relevant heading of the
                     Multiannual Financial Framework (MFF).
           No additional operational expenditure foreseen. In any case, eventual expenditure will be incured within the
           LIFE envelope.
                  requires use of the unallocated margin under the relevant heading of the MFF
                     and/or use of the special instruments as defined in the MFF Regulation.
           Explain what is required, specifying the headings and budget lines concerned, the corresponding amounts,
           and the instruments proposed to be used.
                  requires a revision of the MFF.
           Explain what is required, specifying the headings and budget lines concerned and the corresponding
           amounts.
      3.2.6.     Third-party contributions
      The proposal/initiative:
                  does not provide for co-financing by third parties
                  provides for the co-financing by third parties estimated below:
EN                                                           33                                                         EN
 ---pagebreak---                                                                    Appropriations in EUR million (to three decimal places)
                                     2023       2024        2025        2026          2027         Total
   Specify the co-financing
   body
   TOTAL appropriations
   co-financed
          3.3.       Estimated impact on revenue
                      The proposal/initiative has no financial impact on revenue.
                           The proposal/initiative has the following financial impact:
                             on own resources
                             on other revenue
                            please indicate, if the revenue is assigned to expenditure lines 
                                                                          EUR million (to three decimal places)
                              Appropriations                                                    42
                                                               Impact of the proposal/initiative
                               available for
 Budget revenue line:
                                the current
                              financial year     2023        2024       2025          2026            2027
 Article 4 2 9
               For assigned revenue, specify the budget expenditure line(s) affected.
               n/a
               Other remarks (e.g. method/formula used for calculating the impact on revenue or any other information).
               Revenue from excess emission premiums payable by manufacturers that exceed their
               annual specific emission targets is expected to arise and this should continue to be
               considered as revenue for the EU general budget. The calculation method of the premiums
               has not changed as a result of the proposal. It is not possible to estimate the level of the
               revenue until the annual data on the performance of manufacturers in meeting their targets
               is available.
          42
                   As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net
                   amounts, i.e. gross amounts after deduction of 20 % for collection costs.
EN                                                               34                                                        EN
 ---documentbreak---                            EUROPEAN
                           COMMISSION
                                                  Brussels, 14.7.2021
                                                  COM(2021) 556 final
                                                  ANNEX
                                         ANNEX
                                          to the
    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
          {SEC(2021) 556 final} - {SWD(2021) 188 final} - {SWD(2021) 613 final} -
                                   {SWD(2021) 614 final}
EN                                                                                        EN
 ---pagebreak---                                                ANNEX
   Annex I is amended as follows:
   (1)     Part A is amended as follows:
           (a)   in point 6.1, the heading is replaced by the following:
           ‘EU fleet-wide targets for 2025 onwards’,
           (b)   in point 6.1.2, the heading is replaced by the following:
           ‘EU fleet-wide target for 2030 to 2034’
           (c)   the following point 6.1.3 is added:
           ‘6.1.3 EU fleet-wide target for 2035 onwards
           EU fleet-wide target2035 = EU fleet-wide target2021∙ (1– reduction factor2035)
           where:
           EU fleet-wide target2021      is as defined in point 6.0;
           Reduction factor2035          is as defined in Article 1(5a), point (a).’
            (d) in point 6.2 the heading is replaced by the following:
           ‘Specific emissions reference targets’
           (e)   point 6.2.2 is deleted.
           (f)   point 6.3 is replaced by the following:
           ‘6.3 Specific emissions targets for 2025 onwards
           6.3.1 Specific emissions targets for 2025 to 2029:
           Specific emissions target = specific emissions reference target · ZLEV factor
           where:
           specific emissions reference target             is the specific emissions reference target
                                                           of CO2 determined in accordance with
                                                           point 6.2.1;
           ZLEV factor                                     is (1 + y – x), unless this sum is larger
                                                           than 1,05 or lower than 1,0 in which case
                                                           the ZLEV factor shall be set to 1,05 or
                                                           1,0, as the case may be;
           where:
           y             is the share of zero- and low-emission vehicles in the manufacturer's
                         fleet of new passenger cars calculated as the total number of new zero-
                         and low-emission vehicles, where each of them is counted as
                         ZLEVspecific in accordance with the following formula, divided by the
                         total number of new passenger cars registered in the relevant calendar
                         year:
                                              specific emissions of CO2 ∙0,7
                         ZLEVspecific = 1 – (                               )
                                                            50
                        For new passenger cars registered in Member States with a share of zero-
                       and low-emission vehicles in their fleet below 60% of the Union average
                       in the year 2017 and with less than 1 000 new zero- and low-emission
EN                                                  1                                                 EN
 ---pagebreak---                      vehicles registered in the year 2017*, ZLEVspecific shall, until and
                     including 2029, be calculated in accordance with the following formula:
                                              specific emissions of CO2 ∙0,7
                     ZLEVspecific = (1 – (                                  )) ∙ 1,85
                                                            50
                     Where the share of zero- and low-emission vehicles in a Member State’s
                     fleet of new passenger cars registered in a year between 2025 and 2028
                     exceeds 5 %, that Member State shall not be eligible for the application
                     of the multiplier of 1,85 in the subsequent years;
       x             is 15 % in the years 2025 to 2029.
       6.3.2 Specific emissions targets for 2030 to 2034
       Specific emissions target = EU fleet-wide target2030 + a2030 · (TM-TM0)
       Where,
       EU fleet-wide target2030          is as determined in accordance with point 6.1.2;
                                            𝑎2021 ∙ 𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2030
       a2030                             is      𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠2021
       where,
       a2021                             is as defined in point 6.2.1
       average emissions2021             is as defined in point 6.2.1
       TM                                is as defined in point 6.2.1
       TM0                               is as defined in point 6.2.1
       6.3.3 Specific emissions targets for 2035 onwards
       Specific emissions target = EU fleet-wide target2035 + a2035 · (TM-TM0)
       Where,
       EU fleet-wide target2035          is as determined in accordance with point 6.1.3;
                                            𝑎2021 ∙ 𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2035
       a2035                             is      𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠2021
       where,
       a2021                             is as defined in point 6.2.1
       average emissions2021             is as defined in point 6.2.1
       TM                                is as defined in point 6.2.1
       TM0                               is as defined in point 6.2.1
       ___________________
       * The share of zero- and low-emission vehicles in the new passenger car fleet of a Member State in
       2017 is calculated as the total number of new zero- and low-emission vehicles registered in 2017
       divided by the total number of new passenger cars registered in the same year.’;
   (2) Part B is amended as follows:
       (a)    in point 6.1, the heading is replaced by the following:
       ‘The EU fleet-wide targets for 2025 onwards’
EN                                                   2                                                    EN
 ---pagebreak---    (b)     in point 6.1.2 the heading is replaced by the following:
   ‘The EU fleet-wide targets for 2030 to 2034’
   (c)     the following point 6.1.3 is added:
   ‘6.1.3 The EU fleet-wide targets for 2035 onwards
   EU fleet-wide target2035 = EU fleet-wide target2021∙ (1– reduction factor2035)
   where:
   EU fleet-wide target2021        is as defined in point 6.0;
   Reduction factor2035            is as defined in Article 1(5a), point (b).’
    (d) point 6.2.2 is replaced by the following:
   ‘6.2.2 Specific emissions reference targets for 2030 to 2034
   Specific emissions reference target = EU fleet-wide target2030 + α · (TM-TM0)
   Where,
   EU fleet-wide target2030        is as determined in accordance with point 6.1.3;
   α                               is a2030,L where the average test mass of a manufacturer’s
                                   new light commercial vehicles is equal to or lower than
                                   TM0, and a2030,H where the average test mass of a
                                   manufacturer’s new light commercial vehicles is higher
                                   than TM0;
   where:
                                      𝑎2021 ∙ 𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2030
   a2030,L                         is      𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠2021
                                      𝑎2021 .𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2030
   a2030,H                         is    𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2025
   average emissions2021           is as defined in point 6.2.1
   TM                              is as defined in point 6.2.1
   TM0                             is as defined in point 6.2.1’
    (e)    the following point 6.2.3 is added:
   ‘6.2.3 Specific emissions reference targets for 2035 onwards
   Specific emissions reference target = EU fleet-wide target2035 + α · (TM-TM0)
   Where,
   EU fleet-wide target2035        is as determined in accordance with point 6.1.3;
   α                               is a2035,L where the average test mass of a manufacturer’s
                                   new light commercial vehicles is equal to or lower than
                                   TM0, and a2035,H where the average test mass of a
                                   manufacturer’s new light commercial vehicles is higher
                                   than TM0;
   where:
                                      𝑎2021 ∙ 𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2035
   a2035,L                         is      𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠2021
EN                                             3                                              EN
 ---pagebreak---                                        𝑎2021 .𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2035
   a2035,H                          is    𝐸𝑈 𝑓𝑙𝑒𝑒𝑡−𝑤𝑖𝑑𝑒 𝑡𝑎𝑟𝑔𝑒𝑡2025
   average emissions2021            is as defined in point 6.2.1
   TM                               is as defined in point 6.2.1
   TM0                              is as defined in point 6.2.1
   (f)      point 6.3.2 is replaced by the following:
   ‘6.3.2 Specific emissions targets for 2030 to 2034
   Specific emissions target = specific emissions reference target – (øtargets - EU fleet-
   wide target2030)
   where:
   Specific emissions reference target is the specific emissions reference target for the
                                              manufacturer determined in accordance with
                                              point 6.2.2;
   øtargets                                   is the average, weighted on the number of new
                                              light commercial vehicles of each individual
                                              manufacturer, of all the specific emission
                                              reference targets determined in accordance with
                                              point 6.2.2;
   EU fleet-wide target2030                   is as determined in point 6.1.2.
   (g)      the following point 6.3.3 is added:
   ‘6.3.3 Specific emissions targets for 2035 onwards
   Specific emissions target = specific emissions reference target – (øtargets - EU fleet-
   wide target2035)
   where:
   Specific emissions reference target is the specific emissions reference target for the
                                              manufacturer determined in accordance with
                                              point 6.2.3;
   øtargets                                   is the average, weighted on the number of new
                                              light commercial vehicles of each individual
                                              manufacturer, of all the specific emission
                                              reference targets determined in accordance with
                                              point 6.2.3;
   EU fleet-wide target2035                   is as determined in point 6.1.3.’
EN                                              4                                             EN