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Reducing CO2 emissions from vans

Questions and answers on the regulation to reduce CO2 emissions from light commercial vehicles (vans)

What is the problem?

Road transport is the second biggest source of greenhouse gas emissions in the EU, after power generation. It contributes about one-fifth of the EU's total emissions of carbon dioxide (CO2).

Road transport is one of the few sectors where emissions have been rising rapidly over the last 20 years, with the exception of the period 2008 to 2010 when lower transport activity due to the economic slowdown brought a drop in CO2 emissions. In the period 1990 to 2010 emissions from road transport increased by 22.6%. This increase acted as a brake on the EU's progress in cutting overall emissions of greenhouse gases, which fell by 15.4%.

Light-duty vehicles (cars and vans) are responsible for a significant part of the overall transport emissions and emit around 13.5% of total EU emissions of CO2 and about 15% when the emissions from supplying the fuel are included. In view of the expected increase in the light-duty vehicle fleet, a continuation of the effective application of the EU mandatory CO2 targets is necessary to ensure further reduction of road transport emissions of CO2.

What is the EU's objective?

Under the EU Regulation on light commercial vehicles, average CO2 emissions from vans should not exceed 175 grams CO2 per km by 2017 and should drop further to 147g/km by 2020. The 175 grams target will be phased in between 2014 and 2017. It represents a reduction of 14% compared with the 2007 level (203g CO2 per km). This approach is similar to the legislation on CO2 emissions from passenger cars adopted in 2009. Achieving these targets will help Member States reach the economy-wide reductions in greenhouse gases they have committed to deliver by 2020 under the climate and energy package.

How will it work in practice?

Each manufacturer gets an individual target based on the average of mass of all its new vans registered in the EU in a given year. As of 2014, manufacturers must ensure that 70% of the new vans registered in the EU each year have average emissions that are below their respective targets. In 2015, the percentage rises to 75% and in 2016 to 80%, reaching 100% in 2017.

Indicative emissions are established for each van according to its mass on the basis of the emissions limit curve in Annex I in the Regulation. The limit value curve is set in such a way that a fleet average of 175 grams of CO2per kilometre is achieved for the EU as a whole. Only the fleet average is regulated, so manufacturers will still be able to make vehicles with emissions above the indicative targets if these are offset by other vehicles which are below their indicative targets. In order to comply with the regulation, a manufacturer will have to ensure that the overall sales-weighted average of all its new vans does not exceed the limit value curve.

The precise formula for the limit value curve is:

  • Permitted specific emissions of CO2= 175 + a × (M – M0)

Where:

  • M = mass in kg
  • M0 = 1706.0
  • a = 0.093

What if a manufacturer does not meet its target?

If a manufacturer's average emission levels are above the target set by the limit value curve it will have to pay an excess emissions premium. The more a manufacturer goes above the target, the higher the premium. It will be calculated on the basis of the number of grams per kilometre (g/km) that an average vehicle registered by the manufacturer is above the target, multiplied by the number of vans registered by the manufacturer. A premium of €5 per van registered will apply to the first g/km above the target, €15 for the second g/km, €25 for the third g/km, and €95 for each further g/km. From 2019 every g/km of exceedence will cost €95.

How does this differ from the legislation on cars?

The vans legislation is closely modelled on the legislation for cars. However, as the van market differs from the car market, there are some differences between the two regulations. The limit value curve is different in its value and its slope because vans are heavier and emit more CO2 than cars. The curve is flatter for cars, meaning that more reductions are required from larger cars. This is not the case for vans, because there is little risk of an uncontrolled increase in the size of vans: commercial buyers of vans mostly buy vehicles that reflect their needs. The phase-in period for vans also starts later than for cars because the light commercial vehicles regulation was adopted later.

The rules on derogations for small-volume manufacturers are also different. Manufacturers which register fewer than 22,000 new vans in the EU per year can apply for an individual target that takes into account their reduction potential and the characteristics of their market.

How does manufacturers' current performance compare to the targets?

The chart below shows the position of the various manufacturers in terms of the average CO2 emissions of their new vans sold in the EU in 2007 (sales-weighted fit line) and the limit value curve (in red) as set by the Regulation.

Average CO2 emissions of the new vans by car manufacturers

The data for this graph is summarised in the following table.

ManufacturerCO2 [g/km]mass [kg]sales
avg.avg.Petrol, class IPetrol, class IIPetrol, class IIIDiesel, class IDiesel, class IIDiesel, class IIItotal
Daimler243202403536504623151677156700
Fiat1961770630853202840175819168481279541
Ford20717481473769622358116737114924235507
GM18115921428351906304834515749920128245
PSA18115396830399013116766020112850317266
Renault1931595516415972788766928367110767233872
Volkswagen207179374731321093188271094112716190664
Isuzu230196900004421112711549
Mazda246179900087662252256723
Mitsubishi23319460004601373407834675
Nissan2381932363651194363126046464982163
Toyota22318680005166804650853239
Hyundai227189709600151074489054
LDV229191900001378847897
total/average203173120987658337232877104298059982871747095

How will manufacturers' progress be monitored?

Starting in 2012, the relevant national authorities in each Member State will report annual registration figures for new vans to the European Commission, which will collate the data. Manufacturers will be invited to check that the data is correct. On that basis the Commission will publish, by 31 October each year, a list showing the performance of each manufacturer in terms of its average emissions and compliance with the annual emissions target. This will allow manufacturers' progress to be tracked. The data will be publicly available.

How will the regulation incentivise alternative technologies?

Super-credits

Manufacturers which produce vans with extremely low emissions (below 50g/km) will be given extra credits. When calculating the average emissions of each manufacturer's fleet, each low-emitting van will be counted as 3.5 vehicles in 2014 and 2015, reducing to 2.5 in 2016, 1.5 vehicles in 2017 and one vehicle from 2018. This will lower the manufacturer's average emissions as calculated by the Commission, making it easier to meet the target. To prevent these 'super-credits' from undermining the environmental integrity of the legislation, the number of vehicles for which the manufacturer can claim the credits will be limited to 25,000 over the whole 2014-2017 period.

Eco-innovations

Because the test procedure used for vehicle type approval is outdated, certain innovative technologies cannot demonstrate their CO2-reducing effects under the type approval test. As an interim procedure until the test procedure is revised, manufacturers which fit new vans with approved "eco-innovations" that reduce emissions will be able to count up to 7 g/km worth of emission savings towards their target. The savings must be independently verified.

Alternative fuel vehicles

Vehicles capable of running on E85 fuel (a mixture of petrol with 85% ethanol) will be considered, until the end of 2015, as having CO2 emissions 5% lower than the level reported by the Member States provided that 30% of the filling stations in the Member State where the vehicle is registered offer this type of fuel. The fuel must comply with the sustainability criteria set by other legislation.

How will manufacturers comply? What about small manufacturers?

Manufacturers may form a pool to meet the specific emissions targets jointly. When forming a pool, manufacturers must respect the rules of competition law: the information they exchange should be limited to average specific emissions of CO2, their specific emissions targets, and their total number of vehicles registered.

In addition, manufacturers which sell fewer than 22,000 vans per year and which cannot or do not wish to join a pool can instead apply to the Commission for an individual target.

What about the impact on van buyers?

Vans are expected to become more fuel-efficient as a result of new investments and technologies. This will lead to fuel cost savings for users, many of which are small and medium-sized enterprises.

How much will the measures cost? Will van prices increase?

It is not certain that the cost of meeting the new targets for vans will be passed on by manufacturers to buyers. However, even if the purchase price of vehicles rises slightly, this will be more than compensated for by fuel savings over the vehicle's lifetime.

Will older vehicles have to be taken off the market?

No, the emissions targets apply only to new vans. Vans sold before 2012 will not be affected and will not have to be taken off the road. But the lower fuel costs of the new vans will provide a powerful incentive for replacing older vans by newer ones.

Is this part of a wider strategy?

Yes. The Commission has a comprehensive strategy, adopted in 2007, to reduce carbon dioxide emissions from new cars and vans sold in the European Union. This sets an objective of limiting average CO2 emissions from new vehicles to 120 g/km. This is to be achieved through setting emissions performance standards for cars and vans and through additional measures that can bring a further reduction of 10 grams CO2 per km.

Furthermore, to promote the purchase of fuel-efficient cars, an EU-wide system of consumer information on the CO2 emissions of all new cars is in operation. Member States are also encouraged to promote fuel-efficient cars through their vehicle taxation policies.

Besides the vans regulation, which was adopted in May 2011, the measures being taken to implement the strategy are:

  • EU legislation to reduce CO2 emissions from new passenger cars (adopted in April 2009)
  • Improvements to components with the highest impact on fuel consumption, such as:
    • standards on rolling resistance of tyres
    • standards on the efficiency of mobile air conditioning
    • on-board indicators incentivising more efficient driving,
    • gradual reduction in the carbon content of road fuels, notably through increased use of sustainably produced biofuels.

For more details on the implementation of the Strategy see a progress report adopted in November 2010.

What is the next step?

The Regulation on vans is directly applicable in the Member States and does not need to be transposed into national law through national legal instruments.

The Regulation is currently being reviewed with a view to implementing the 2020 target of 147 g/km.

Questions and answers on the proposed Regulation defining the modalities for reaching the 2020 target for CO2 emissions from new vans (July 2012)

How much will the 2020 mandatory target save consumers in lower fuel bills?

For vans, the 2020 target leads to savings in annual fuel consumption of 16% compared with the 2017 target of 175 g CO2/km. For an average van, this means estimated fuel cost savings of around €403 in the first year or €3363-4564 (depending on the price of fuel) over a van's lifetime (also 13 years) as compared to retaining the 2017 target. The higher the oil price, the greater the overall savings will be.

For both cars and vans, the 'payback period' – the time it takes for cumulative fuel cost savings to outweigh the additional cost of buying a more fuel-efficient vehicle - is below five years. Net cost savings over a vehicle's lifetime are estimated at around €2000 for cars and €2500 for vans.

Will the 2020 target increase the price of vans?

It may do, but this depends on how far producers pass on additional manufacturing costs through higher vehicle prices. The average additional manufacturing cost is estimated at around €450 per van in 2020. Even if the full additional cost is passed on through higher prices, the Commission's impact assessment shows that this extra cost to purchasers will be outweighed several times over by fuel cost savings over the lifetime of the vehicle.

Over the past decade new car prices have decreased on average by about 1% annually while fuel consumption and CO2 emissions have also fallen every year. The European Automobile Manufacturers' Association (ACEA) has stated this trend is not likely to change.

Will the tighter emission targets be bad for the economy?

No, on the contrary. The proposals are expected to stimulate research and innovation in the automotive sector, promoting green growth and jobs and improving the international competitiveness of the EU industry. The impact assessment shows that the regulations would shift spending from fuel, which has a low impact on employment, to vehicle technology and other goods.

Compared with the 2015/2017 targets, it is estimated that consumers will save €27bn per year in fuel costs in 2025, rising to €36bn in 2030. The 2020 targets could increase EU GDP by €12bn annually and spending on employment by some €9bn a year.

The proposals would in total save almost 160 million tonnes of oil, worth about €70bn at today's prices, in the period to 2030. They would also prevent the emission of around 420 million tonnes of CO2, over the same period, resulting in net cost savings to society of €100-200 for every tonne of CO2 avoided.

Will older vehicles have to be taken off the road?

No, the emission limits will apply only to new vehicles. Those sold before 2020 will not be affected and will not have to be taken off the road. But the lower fuel costs of the new vehicles will provide a powerful incentive for replacing old cars and vans.

How does the 2020 target compare with current emission levels?

The 2020 mandatory target for vans of 147g CO2/km is 16% lower than the 2017 target of 175 g/km and 19% below the 2010 average of 181.4 g/km.

How have the 2020 targets been set?

The 2020 targets were established during the political process involving the European Parliament and Council that led to the adoption of the existing Regulations. The Commission has verified that the 2020 targets are achievable at reasonable cost by carrying out a thorough analysis of the available technologies and of their costs and benefits.

Are the 2020 targets technically and economically feasible?

Yes, the Commission's assessment of the technologies currently available shows that these are available to allow manufacturers to reach the targets at reasonable cost. The technological potential remains for further reductions beyond 2020, particularly in the case of vans.

Has the Commission consulted stakeholders on its proposal?

Yes, an on-line public consultation on policies to reduce greenhouse gas emissions from road vehicles was held from September to December 2011. The results are available here.

In addition, a stakeholder meeting was held in December 2011 where the results of the car and van analysis were presented (see here for summary of the meeting), and the CARS21 High Level Group also discussed the targets.

Are the 2020 proposals in line with the recommendations of CARS21?

Yes, the key recommendations of the CARS21 High Level Group regarding the 2020 CO2 targets were that they should be implemented without change. The Commission's proposals do that.

Are the proposals part of a wider strategy?

Yes. The Commission has a comprehensive strategy, adopted in 2007, to reduce CO2 emissions from new cars and vans. A wide range of measures has been implemented. For details see the Commission's progress report. Following adoption of the latest Transport White Paper , the Commission is now pursuing a comprehensive strategy to reduce GHG emissions from transport by 60% compared to 1990 levels by 2050. CO2 standards for vehicles form a key part of this overall strategy.

Have the 2020 targets for cars and vans been set in the same way?

Yes, the underlying assessment is identical. It looks at the technologies available and their costs. The most appropriate way of distributing the effort is then assessed. While the assessment methodology is the same, the results are slightly different because of the different characteristics of the markets for cars and vans.

How will small manufacturers comply?

As in the existing regulations, manufacturers may form a pool to meet the mandatory emission targets jointly. When forming a pool, manufacturers must respect the rules of competition law; the information they exchange should be limited to average specific emissions of CO2, their specific emissions targets, and their total number of vehicles registered.

In addition, smaller manufacturers benefit from provisions enabling them to have less demanding targets. The very smallest manufacturers registering less than 500 vehicles per year would be exempt from meeting the targets.

Why produce the proposals now?

The existing regulations state that the Commission should bring forward proposals for implementing the 2020 targets by the end of this year. The Commission is doing so several months before the deadline so that the modalities can be agreed as early as possible in order to increase certainty for manufacturers.

Why make two separate proposals? Why not merge the Regulations?

There are two existing regulations with slightly different requirements so it makes sense to have a separate amending measure for each one. The option of merging the regulations was assessed in the impact assessment, but because of the differences between the characteristics of the car and van markets and van testing procedures it was not possible to merge the requirements into one structure.

Will the proposals promote electric, hybrid and other alternative propulsion systems?

Yes, the proposed Regulations not only create an incentive to improve internal combustion engines using petrol and diesel but will also spur electric, plug-in hybrid, fuel cell, natural gas, and LPG (liquefied petroleum gas)-fuelled vehicles. Manufacturers will be free to reduce emissions in the most cost-effective manner. This is in line with the Commission's standard approach of being technology-neutral.

Isn't CO2 being over-emphasised compared with other pollutants?

Other pollutants in vehicle emissions are regulated through EU legislation governing air quality and these are also being progressively reduced. The latest emission standards for these pollutants, known as Euro 6, come into force from 2014. Many technologies can reduce emissions of both CO2 and the traditional pollutants which affect air quality.

The European Parliament has asked for 2025 CO2 targets for cars and vans. When will these be proposed?

The Commission has said it intends to issue a communication around the end of 2012 in order to carry out a consultation on the form and stringency of post-2020 CO2 targets for light duty vehicles. It would be premature to propose the targets before that consultation has taken place.

Isn't the Commission's approach flawed since real world emissions are not the same as test cycle results?

While it is clear that the emissions test cycle gives very different results from real world driving, there is no evidence that test cycle results do not correlate to real world emissions. A vehicle with lower emissions in the test cycle will also have lower emissions under real conditions.

The Commission is nevertheless taking part in international efforts to develop a new global test procedure for light duty vehicles and it is hoped that this will result in CO2 values that are somewhat more realistic than the current test procedures.

Why has the Commission based its proposal on a vehicle's mass rather than other possible parameters?

Various possible bases for the Regulation were assessed. The area (referred to as its 'footprint') and the carrying capacity (referred to as its 'payload') were analysed in the impact assessment and both were ruled out. It was concluded that a van's area can be easily manipulated and this could raise the risk of strong perverse effects. Since carrying capacity is a value declared by manufacturers it is also potentially subject to manipulation and was ruled out.

Shouldn't the 2020 target be tightened up?

The 2020 target for vans was agreed only last year. In view of the regulatory certainty manufacturers need in order to plan their future production, it is not appropriate to change the target now, particularly given the relatively short time gap between the 2017 and 2020 targets for vans.

Why is the additional manufacturing cost per van lower than estimated in 2009?

The estimated average additional manufacturing cost of around €450 per van in 2020 is lower than estimated in the Commission's 2009 impact assessment. This is due to emission reductions that have been applied since 2007, a drop in the costs of CO2 -reducing technologies, and more accurate data on van emissions.