Consultation outcome

CO2 emission performance standards for new passenger cars and light commercial vehicles

Updated 13 October 2020

Introduction

The UK has left the EU. There is now a transition period until the end of 2020 while the UK and EU negotiate additional arrangements. The current rules on trade, travel, and business for the UK and EU will continue to apply during the transition period. New rules will take effect on 1 January 2021.

This consultation relates to the regulation of CO₂ emission performance standards for new passenger cars and light commercial vehicles (vans) from 1 January 2021.

In March 2019, the government made a statutory instrument (SI), correcting for deficiencies arising through the retention of EU regulations 443/2009, 510/2011 and all associated delegated regulations – the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019. This SI corrected for deficiencies and ensured that a UK only regulation was operational.

The Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019 were consulted on during November 2018, as well as information relating to this, including the government’s response.

On 31 December 2019, regulations 443/2009 and 510/2011 were repealed in the European Union and replaced with regulation 2019/631. As a result, regulations 443/2009 and 510/2011 will not be retained in UK legislation. The references to these regulations in the above SI need to be repealed, and deficiencies/inoperabilities in regulation 2019/631 must now be corrected. Regulation 2019/631 was published in the Official Journal of the European Union on 17 April 2019 and came into effect on 1 January 2020.

This document sets out the details for the implementation and operation of the resulting UK regulatory scheme at the end of the transition period on 31 December 2020. It is aimed at ensuring the regulation of emissions from new cars and vans when they are produced or registered in the UK. As set out in the government’s Road to Zero Strategy, we will pursue “a future approach as we leave the European Union that is at least as ambitious as the current arrangements for vehicle emissions regulation”.

The European Union (Withdrawal) Act 2018 (EUWA), as amended by the European Union (Withdrawal Agreement) Act 2020, converts all EU law into UK legislation at the end of the transition period on 31 December 2020. However, doing so creates certain ‘inoperabilities’ in the way the legislation might function in a UK only context.

Noting the constraints of the extent to which changes to address inoperabilities can be made in implementing legislation under the EUWA, this consultation document only seeks comments on the new UK provisions to ensure they are practicable and continue to work within the UK context.

The provisions within the EUWA allow for secondary legislation to be made, for a time limited period, in order to correct for deficiencies/inoperabilities within the newly created legislation. When designing such secondary legislation, any amendments should only be made to correct for deficiencies/inoperabilities, and should maintain as close to a business-as-usual scenario as possible. The provisions of the EUWA mean that the secondary legislation cannot be used to change the legislation or to take alternative policy objectives into account.

The main changes to address this with regard to the existing articles of regulation 2019/631 are set out in the draft UK SI (at annex A) and are covered in the main changes section.

How to respond

The consultation period began on 10 July and will run until 21 August 2020. Ensure that your response reaches us before the closing date. Alternative formats can be obtained from environmental.strategy@dft.gov.uk.

When responding via email, please send it to environmental.strategy@dft.gov.uk with the subject line ‘LDV CO2 emission performance standards consultation response’.

Due to remote working for the foreseeable future we cannot accept hard copies of responses but do let us know if you are unable to respond by email.

When responding, state whether you are responding as:

• an individual
• representing the views of an organisation

If responding on behalf of a larger organisation, make it clear who the organisation represents and, where applicable, how the views of the members were assembled.

Background

Current regulatory regime

Until the end of 2019, emissions of CO₂ from new passenger cars and light commercial vehicles registered in Europe each year (registrations) were governed by 2 regulations – (EC) 443/2009 which regulated the CO₂ emissions of new M1 vehicles (passenger cars) sold into the EU market; and (EC) 510/2011 which regulated the CO₂ emissions of new N1 vehicles (light commercial vehicles) sold into the EU market.

These 2 regulations were repealed and replaced by EU 2019/631 on 1 January 2020. Regulation 2019/631 recasts the requirements pertaining to 2020-2024 from regulations 443/2009 and 510/2011, and sets new targets for 2025 and 2030.

The current targets in the new regulation require the average CO₂ emissions of all new cars registered in the EU in any given calendar year to be no more than 95g of CO₂ per km by 2021. 95% of all new cars registered in 2020 must meet this 95g CO₂ per km target, effectively giving a one-year phase in of the 2021 target.

For light commercial vehicles, the current targets require the average of all new vans registered in the EU in any given calendar year to emit no more than 147g of CO₂ per km by 2020. There is no phase-in period for the van target – 100% of the fleet must meet the target in 2020.

In 2025, both cars and vans must meet an EU-wide fleet average CO₂ emissions reduction of 15% according to the 2021 baseline following the conversion to WLTP (as set out in 6.1.1 of part A of annex 1 for cars and 6.1.1 annex B for vans). For 2030, the target is for a 37.5% reduction against the 2021 baseline (as set out in 6.1.1 of Part a of Annex 1) for cars and a 31% reduction against the 2021 baseline for vans (as set out in 6.1.1 annex B). (Greater information on WLTP is available).

EU regulation 2019/631 also introduces zero and low emission benchmarks of 15% of a manufacturer’s fleet for both cars and vans from 1 January 2025, and 35% of the fleet of new cars and 30% of new vans from 1 January 2030.

The EU level target is broken down into specific targets for individual manufacturers. Each manufacturer is set a specific target based upon the average weight of their fleet of vehicles sold in that year. The bigger the difference between the manufacturer’s fleet average and the overall average, the bigger the impact on an individual manufacturer’s targets. The specific target that each manufacturer is set is determined by formulae listed within annexes in the regulation. These formulae will be discussed in this document.

EU countries are required to record information about new vehicle registrations within their territories and report it to the European Environment Agency by 28 February each year. In 2018 (the most recent year for which data is available), according to provisional data from the EU, the UK had 2,355,962 new passenger vehicle registrations. This compares to a community-wide figure of 15,272,915 meaning that UK passenger car registrations account for roughly 15.43% of the EU’s new passenger car market. (EU28 plus Iceland)^{[footnote 1]}.

For vans, in 2018 (the most recent year for which data is available), according to provisional data from the EU, the UK had 334,502 new van registrations. This compares to a community-wide figure of 1,747,296 meaning that UK van registrations account for roughly 19.14% of the EU’s new van market. (EU28 plus Iceland)^{[footnote 2]}.

By 30 June each year, the European Commission publishes provisional data on the previous year’s EU-wide registrations for each manufacturer, who then have 3 months to report any errors to the commission.

By 31 October, the European Commission publishes the final data and fines are issued to any manufacturer that exceeds their emissions target by way of an ‘excess emissions premium.’ This premium is €95 per gram of exceedance per vehicle registered by that manufacturer. The fines are collected by the commission and paid into the central EU fund.

Manufacturers currently liaise directly with the European Commission on matters concerning the administration of regulations. This includes working with European Commission officials when:

• finalising annual data
• applying for flexibility mechanisms within the regulations, such as the pooling of registrations, applying for derogations from the EU-wide CO₂ target, or applying for eco-innovation credits
• ‘excess emissions premiums’ have been levied

In order to protect small business interests a number of derogations exist, providing different sized manufacturers with different types of carbon reduction target. Manufacturers registering between 10,000 and 300,000 vehicles per calendar year are not set a target in line with the formula, but must instead meet a set reduction. Currently this is a 25% reduction from their 2007 average emissions until 2019, rising to a 45% reduction from 2020. If 2007 data does not exist, then a manufacturer must meet a reduction based on the average reduction of a similar manufacturer over the same period. This derogation option exists until the end of 2028.

Manufacturers registering 1,000-9,999 vehicles per calendar year must agree a reduction target with the commission. Both parties should take into account a number of criteria, including the type of vehicle being sold, the type of market that the vehicle is being marketed towards, and the economic ability of the manufacturer to employ reduction technologies. Any manufacturer registering fewer than 1,000 vehicles in a calendar year is out of scope of the legislation.

As multiple manufacturers may fall under the same overall umbrella group, manufacturers may also ‘pool’ resources and combine their registrations. Upon agreement with all parties involved, manufacturers may submit a request to the commission to pool their registrations. If accepted, for the purposes of these regulations the ‘pool’ will be considered as one manufacturer, and the pool will receive one CO₂ target based on the average weight of all of the applicable vehicles under all included manufacturers.

Manufacturers (or pools) may also apply for credits for any eco-innovations that would result in a carbon reduction but which would not be captured through traditional CO₂ testing for example energy efficient LED lightbulbs. Upon application to the commission (the application itself is the subject of a separate regulation) the Commission will grant emission credits up to a maximum of 7g/km per year.

‘Super-credits’ also apply for the registration of ultra-low emission vehicles (ULEVs) through to 2022. In 2020, any vehicle emitting less than 50g CO₂/km will be counted as 2 vehicles; 1.67 vehicles in 2021; 1.33 vehicles in 2022 before the end of super-credits in 2023.

Position after the transition period ends on 31 December 2020

Following the UK’s exit from the European Union on 31 January 2020 the above provisions of EU 2019/631 continue to apply during the transition period. However, after 31 December 2020, subject to the terms of the future trade agreement between the UK and the EU, new vehicle registrations in the UK will cease to fall under the scope of this regulation.

The Department for Transport (DfT) is therefore laying a SI to correct for ‘deficiencies/inoperabilities’ within a revised text of the regulation. This includes, for example, formulae that set specific CO₂ targets in order to account for UK only regulations and derogation thresholds to account for the size of the UK market rather than the EU. Full details of the changes proposed are set out below.

Northern Ireland

Irrespective of the scenario that will apply between the UK and EU at the end of the transition period, the Northern Ireland Protocol will continue to apply from 2021 onwards. It is for the elected institutions in Northern Ireland to decide what happens to the Protocol alignment provisions in a consent vote that can take place every four years, with the first vote taking place in 2024.

Regulation 2019/631 is listed in Annex II to the Northern Ireland Protocol. This therefore means that EU Regulation 2019/631 will continue to have effect in Northern Ireland from 1 January 2021 onwards.

For clarity, this therefore means that newly registered vehicles in Northern Ireland from 1 January 2021 will continue to be the subject of the EU regulation. The retained version of the regulation, and the subject of this consultation, will apply in Great Britain only.

Further information can be found in the Northern Ireland sections of this document.

Implementation of EU 2019/631 in the UK

The UK’s general approach in transferring the cars and light commercial vehicles CO₂ regulation is to:

• retain policy that supports the delivery of our wider ambitions to reduce CO₂ emissions from transport in support of net zero
• provide certainty to vehicle manufacturers on plans for regulation following the transition period and minimise additional reporting burdens
• ensure that UK regulation is at least as ambitious as the regulatory regime established in the EU
• enable the UK government to assume the obligations and functions, currently performed by the European Commission, to ensure the regime continues to function in a UK only context

As noted above, the EUWA provisions require that ministers can only amend the statutory regime for deficiencies/inoperabilities. The general approach is therefore that if a provision:

• is time limited and has expired, it has been removed - for example the awarding of 2 times credits for ultra-low emission vehicles registered in the 2020 calendar year
• does not work without alteration, it has been amended - for example the scope of the regulations applying to vehicles registered within the EU being replaced with vehicles registered in the UK
• does not work sensibly without alterations, it has been amended in a manner to maintain its intention - for example derogation thresholds of 10,000 and 300,000 being altered to reflect the UK market

Similarly, where a provision continues to function in the UK after exit, it has therefore not been amended, regardless of wider UK policy/commitments - e.g. the 95g CO₂/km targets for cars, and 147g CO₂/km targets for vans, are not deficient. All provisions for cars and light commercial vehicles are included in one draft statutory instrument.

However, the formulae that dictate individual manufacturer targets can be considered inoperable as they reference an EU average vehicle mass, rather than UK average vehicle mass. The primary question to answer is therefore whether the formulae continue to work sensibly at the end of the transition period. The impact on industry is also considered – the intention of the EUWA is to maintain regulations as closely as possible in order to minimise any potential additional burden.

Main changes

UK targets and specific emissions of CO₂ formulae

Currently, the European Commission sets an EU fleet average target that must be met by the EU fleet. For cars, this target is currently 95g CO₂/km in 2020. For vans, the target is 147g CO₂/km in 2020.

These targets will be converted into WLTP CO₂ emissions targets in 2021 following the change in the vehicle CO₂ test procedure, and the 2021 actual emissions will represent the new baseline. Manufacturers will then have to meet a 15% reduction for cars and vans by 2025, and a 37.5% reduction for cars and a 31% reduction for vans by 2030, both against this 2021 baseline.

From these, manufacturers receive individual targets that are set according to the mass of their fleet. Only the fleet average is regulated, so manufacturers are able to make vehicles with emissions above the EU target provided these are balanced by vehicles below. Manufacturers with heavier fleets receive individual targets above the EU target; manufacturers with lighter fleets receive targets below the EU target.

A value limit curve, set by formulae listed within the regulation, establishes the CO₂ target according to average fleet mass. The curve is set so that the specific average emissions targets for each manufacturer’s fleet of new cars combine to achieve the EU fleet target. Manufacturers currently balance the CO₂ emissions of new vehicles sold across the 28 individual EU markets to deliver compliance. They often offset sales of higher emitting vehicles in one market against sales of lower emitting vehicles in another. Post-transition period, manufacturers will not be able to meet UK targets using sales in the EU27.

The overall mass-based emissions target continues to work in a UK-only context, and thus will be retained after the transition period. The UK fleet is heavier than the EU27’s and therefore moving from the EU fleet average to a UK specific value would immediately make regulatory targets more demanding for all manufacturers.

In order to maintain the level of effort required to meet targets from 1 January 2021 in the UK, the government intends to maintain the EU formulae ‘as-is’. Rather than comparing the manufacturer’s fleet against the average mass of relevant UK vehicles, the fleet will continue to be compared against the average mass of relevant EU vehicles.

Due to the UK having a higher average vehicle mass than the EU, this means that the combined sum of UK targets will be slightly higher than in the EU27. However, this reflects a continuation of the current level of effort employed in the UK in order to meet compliance standards rather than any weakening of ambition.

The formulae that dictate individual manufacturer targets are updated every three years in order to allow the regulations to keep pace with any changes to the market. This will not change in a UK-only context. The next scheduled formulae update for cars will be announced in October 2020, entering into force on 1 January 2022. For vans, an update was due to be announced by the European Commission in October 2019, however this has been delayed as the 2018 dataset has not yet been finalised. If this update is published before the end of the transition period, it will enter into force on 1 January 2021. All future updates will be issued according to the same timeframe. These updates will take account of the average mass of vehicle in the scope of the regulation at that point – which will be a UK average mass.

Northern Ireland

Both the EU regulation, and the proposed retained version of the regulation in the UK, include a clause stating that any vehicle registered outside the relevant territory, within 3 months of the vehicle subsequently being registered in the relevant territory, shall be classed as a new vehicle, and thus in scope of the regulation.

This clause was originally intended to prevent vehicles from being registered outside the EU, then subsequently registered inside the EU and to avoid counting toward CO₂ emissions targets. There is however no clause regarding vehicles being registered inside the relevant territory, then subsequently exported.

Given that when a vehicle is registered for use in either Northern Ireland or in Great Britain, it is registered for use in the UK, this therefore could lead to a situation where vehicles permanently moving from GB to NI or vice versa, within 3 months of initial registration, would therefore count in both regulations. This is a deficiency of the retained regulation.

The government therefore proposes adding a clause to the retained regulation, stating that if a vehicle is registered in Great Britain, and subsequently exported or permanently moved to Northern Ireland within 6 months of that registration, it will not count toward CO₂ emissions targets.

Question 1

Given the UK’s general approach in retaining the cars and light commercial vehicles regulation.

Do you have any comments on the approaches proposed for UK targets and CO₂ emission forumlae? Are there unintended consequences of the proposed approach? If not, please explain your reasons in your response.

Sales volumes and derogation thresholds

Derogations protect the competitiveness of smaller vehicle manufacturers, who lack the resources to invest in the development of new technologies that the mass manufacturers do, by setting them relative rather than absolute emissions targets.

The EU threshold values are set on the basis of EU market sales, rather than those in the UK (which represents between 15%-20% of the EU market). Adjusting derogation thresholds to reflect a UK only market share would introduce changes for manufacturers who sell significantly higher or lower proportions of vehicles in the UK versus the wider EU. This could change their category, substantially altering their emissions targets, and facing/avoiding significant fines in comparison to the current mechanism.

We therefore propose derogation thresholds based on the historical share of manufacturers’ EU sales that have occurred in the UK. This will ensure that manufacturers qualify for the same type of derogation in the UK that they would have through the EU regulation.

Over time, it may become more appropriate to move to fixed thresholds for a UK only derogation. The time period and methodology for such a change is outside the scope of this regulation – which, as described, can only fix inoperabilities - but any proposed change would be consulted on before being legislated for.

Detail on proposed changes to the related article 10

For cars - There are a number of changes required to ensure that the article continues to work within a UK only context. The largest change required is around the actual derogation limit thresholds of 10,000 and 300,000. The bulk of the requirements and obligations are placed on vehicle manufacturers, meaning that the domestic corrections should attempt to maintain as close to business as usual (BAU) scenario for manufacturers as possible.

In order to ascertain threshold limits, a new annex with a formula listing how an individual manufacturer’s derogation thresholds will be calculated has been created. For example, if 50% of a manufacturer’s EU vehicle registrations occurred in the UK, the formula establishes that their UK derogation thresholds would be 50% of those in the EU – instead of 10,000 and 300,000 the thresholds are 5,000 and 150,000. The de minimis threshold remains unchanged at 1,000 registrations.

These formulae only work if a manufacturer is established and has had sales in the UK and EU previously. If the formulae do not work due to an absence of registrations data the regulations include a strict threshold of 1,550 and 46,500 vehicles (15.5% of 10,000 & 300,000). The 15.5% represents the UK share of the EU car market. These will be the ‘default’ thresholds used in such a scenario.

At the end of the transition period, the latest full set of confirmed data available should be for the 2019 calendar year, on the basis that the European Commission is obligated to publish a dataset by 31 October of the following year.

That being said, as manufacturers will have prepared to meet their obligations under the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019, which used the 2017 dataset for determining the thresholds, it is proposed that for continuity, the 2017 dataset is again used to determine the thresholds.

As this regulation will be introduced on 1 January 2021, the first reporting ‘year’ constitutes a full year.

For light commercial vehicles – As for cars, the intent is that manufacturers should maintain the same effort share in the change from an EU-wide to UK only CO₂ monitoring regime, so the threshold will also be based on the historical share of EU sales occurring in the UK. For light commercial vehicles, if 50% of a manufacturer’s EU vehicle registrations occurred in the UK, the formula establishes that their UK derogation threshold would be 50% of those in the EU. For example, instead of 22,000 the threshold will be 11,000. The de minimis threshold remains unchanged at 1,000 registrations.

The formulae only work if a manufacturer is established and has had sales in the UK and EU previously. If the formulae do not work due to an absence of registrations data, the regulations include a strict threshold of 4,224 vehicles (19.2% of 22,000). The 19.2% represents the UK share of the EU van market.

As with cars, at the end of the transition period, the latest full set of confirmed data available should be for the 2019 calendar year, on the basis that the European Commission is obligated to publish a dataset by 31 October of the following year.

As manufacturers will have prepared to meet their obligations under the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019, which used the 2017 dataset for determining the thresholds, it is proposed that for continuity, the 2017 dataset is again used to determine the thresholds.

As this regulation would be introduced 1 January 2021, the first reporting ‘year’ constitutes a full year.

Reporting of information pertaining to derogations

Currently, when manufacturers wish to apply for a derogation, they do so by sending any required information to the European Commission. In a UK-only scenario, the obligations conferred upon the European Commission will instead be carried out by the Secretary of State for Transport. The Secretary of State for Transport will be allowed to appoint a person or persons to act on their behalf. This person or persons will be authorised to approve and issue derogations to individual manufacturers.

Detail on proposed changes to regulations 63/2011 and 114/2013

These regulations establish the procedure for applying for a derogation from either the car or van top level targets. As they are regulations, these will also be retained in UK law at the end of the transition period. These regulations were corrected for by the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019. As these regulations have remained unchanged by EU Regulation 2019/631, no further amendment is required for a UK-only scenario.

Question 2

Given the UK’s general approach in retaining the cars and light commercial vehicles regulation.

Do you have any comments on the approach proposed for sales volumes and derogation thresholds? Are there unintended consequences of the proposed approach? If not, please explain your reasons in your response.

Eco-Innovations

Under the EU regulations, manufacturers can apply for credits against their CO₂ targets for technologies on their vehicles that reduce emissions but are not ‘seen’ during the regulatory type approval test. To gain credit, manufacturers must demonstrate the emissions saving, have it independently verified and apply to the European Commission who adjudicate.

We propose to automatically recognise all existing EU ‘eco-innovation’ approvals in the UK legislation, and will also mirror the approvals system domestically to avoid forcing manufacturers to test their ‘eco-innovations’ in the EU27.

When applying for an eco-innovation approval in the UK, we will allow manufacturers to submit data and testing methodologies that have been developed in collaboration with an EU Technical Service. This maintains the approach that was taken in the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019.

Detail on proposed changes to related article 11

This article sets out the ability for manufacturers to apply for ‘eco-innovation’ CO₂ reduction credits and receive additional reductions for some vehicles. It is not expected that manufacturers will create different specifications of vehicle specifically for the UK market - it is therefore not expected that manufacturers will create eco-innovation technologies that are solely destined for the UK market. Therefore, as it is expected that all eco-innovation technologies that are deployed in UK vehicles will also be deployed in EU vehicles, the statutory instrument provides that any eco-innovation that is currently approved within the EU will be approved by the UK on 1 January 2021.

For new eco-innovations brought to market after this date, manufacturers and/or body-builders will need to have their technology approved by the UK as well as the EU. If a manufacturer chooses to have their eco-innovation approved by the European Commission after 1 January 2021, then this may be used to assist their application for approval in the UK. However, an application for approval will still need to be submitted in the UK.

As part of the first registration process, vehicle manufacturers will have to submit whether a vehicle has been fitted with an approved eco-innovation. Additionally, every currently approved eco-innovation is the subject of a European Commission decision and is available online. Therefore, when a manufacturer registers the vehicle, DfT will have all of the information required in order to provide the vehicle with an eco-innovation credit.

Detail on proposed changes to regulations 725/2011 and 427/2014

These regulations establish the application procedure for eco-innovation approvals for cars and for vans.

As already mentioned, the intention is that the UK will mirror that current approvals process so that, after 31 December 2020, new eco-innovations may still be approved on to the UK market without having to be approved in the EU27 first. Regulations 725/2011 and 427/2014 have also been retained in UK law and have been amended to correct for deficiencies by the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019. This will provide the Secretary of State with the ability to approve eco-innovations in the same manner as the Commission has been able to, and will require that all information that is currently submitted to the Commission will also need to be submitted to the Secretary of State.

Question 3

Given the UK’s general approach in retaining the cars and light commercial vehicles regulation.

Do you have any comments on the approach proposed for eco-innovations? Are there unintended consequences of the proposed approach? If not, please explain your reasons in your response.

Super-credits

Under the EU regulations, manufacturers may benefit from super-credits for registering zero or low emission vehicles (ZLEVs). A ZLEV is defined as any car with CO₂ emissions of less than 50g CO₂/km.

The super-credits act as an incentive for manufacturers to put ZLEVs onto the market, and for the purpose of calculating their average specific emissions, such vehicles will be counted as:

• 2 vehicles in 2020
• 1.67 vehicles in 2021
• 1.33 vehicles in 2022

A cap of 7.5g CO₂/km is applied to each manufacturer’s average specific emissions over the 3 years for example a manufacturer may reduce their annual average specific emissions total by no more than 7.5g CO₂/km cumulatively over all 3 years.

Detail on proposed changes to related article 5

As this legislation will not enter into legal effect until 1 January 2021, the double-counting for 2020 is no longer appropriate so this reference has been removed. The 1.67 multiplier for 2021, and the 1.33 multiplier for 2022 will remain.

The 7.5g CO₂/km cap was due to apply over a three-year period, however the super-credit period will only apply for 2 years in the UK – 2021 and 2022.Taking that into account, and that only the 1.67 and 1.33 multipliers will be available, we propose to reduce the 7.5g CO₂/km limit in line with both the time and multipliers available, to a maximum of 3.75g CO₂/km over 2 years.

Question 4

Given the UK’s general approach in retaining the cars and light commercial vehicles regulation.

Do you have any comments on the approach proposed for super-credits? Are there unintended consequences of the proposed approach? If not, please explain your reasons in your response.

Minor and technical changes

General

The following general changes have been made:

• throughout the articles all references to the ‘European Union’ or ‘Community’ have been replaced with ‘United Kingdom’
• where appropriate references to ‘the commission’ have been amended to reference ‘the Secretary of State’ throughout
• where dates have expired these have been removed
• subsequent cross references to regulations, directives and articles have been amended where appropriate

Such changes are therefore not referenced in each individual case below.

Changes to regulation EU 2019/631

Article 1 - Subject matter and objectives

The existing target figures for cars and light commercial vehicles have been maintained for example 95g CO₂/km for cars and 147g CO₂/km for vans both measured in accordance with regulation 715/2007 and annex XII of regulation 692/2008 until 31 December 2020, and in accordance with regulation 2017/1151 from 1 January 2021.

For cars, the EU Regulation also states that it will be complemented by additional measures that will deliver a further 10g CO₂/km reduction as part of the community’s integrated approach until 31 December 2024.

The UK does not have an integrated approach in the same sense as the EU, however the UK does utilise additional measures, such as the use of biofuels at refuelling stations, and the use of gear-shift indicators to improve driving efficiency. Therefore, the reference to the additional measures has been removed, as it was with the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019. However, this is purely for the purpose of setting out the subject matter of this particular regulation. All existing policies that help to deliver carbon dioxide reductions in the UK will continue to apply.

The new targets of a 15% CO₂ reduction for both cars and vans from 2025, and of a 37.5% CO₂ reduction for cars and a 31% CO₂ reduction for vans from 2030 have also been maintained.

The zero and low emissions vehicle benchmarks of 15% for both cars and vans from 2025, and 35% for cars and 30% for vans from 2030, have been maintained.

Article 2 - Scope

The intent of the article is to define which vehicles are to be captured by these regulations. To this end the only changes that are required to be made are the references to:

• regulation 715/2007 which has been amended to reference the UK equivalent after 31 December 2020
• registration in or outside the Union are replaced with registrations in or outside the UK

Manufacturers registering fewer than 1000 vehicles in the UK continue to be out of scope of the legislation

In order to prevent vehicles being eligible to be counted in both UK and EU markets in any given calendar year, a new clause has been inserted stating that if a vehicle has been exported from the UK within 3 months of registration, the regulation shall no longer apply.

Article 3 - Definitions

Retained in full.

Article 4 - Specific emissions targets

The intent of this article is to establish which specific sections of the regulation should be taken into account when determining the specific emission targets for each manufacturer.

Paragraph 1a has been removed as it relates only to 2020, and will therefore will be defunct when the UK regulation enters into legal effect in 2021.

In paragraph 3, the percentage of the fleet being taken into account has been amended to read 100% for 2020. 2020 registrations will continue to be captured by the European Commission as the UK regulation will not be in legal effect. This change has been made to ensure that all future changes to the regulation that take 2020 registrations into account (such as the change to the M0 value in the emissions calculations) will consider 100% of 2020’s registrations.

Article 5 - Super-credits

Article 5 issues are considered before.

Article 6 - Pooling

The intent of the article is to allow manufacturing groups to pool their registrations together and, for the purposes of the regulations, to be considered as one manufacturer, receiving one joint CO₂ target covering every vehicle registration in the particular pool. The article also establishes the rules around applying for the creation of a pool.

Paragraph 5 of the article states that manufacturers may enter into agreements that are in compliance with articles 101 and 102 of the ‘Treaty on the functioning of the European Union’. The treaty articles in question refer to competition law and seek to prevent restrictive or abusive business practices that may distort the market. The Competition Act 1998 seeks to harmonise UK competition policy with EU competition policy. This paragraph has been amended therefore to state that ‘manufacturers may enter into pooling arrangements provided that their agreements are in compliance with the Competitions Act 1998’. The second sentence has also been amended to reference ‘applicability of UK competition rules’ rather than ‘Community competition rules’.

The statutory instrument also includes detail on the process for making an application to the Secretary of State.

Article 7 - Monitoring and reporting of average emissions

The statutory instrument reflects the change to the UK performing this function. All of the data that is required to be reported is already collected by the DVLA as part of the vehicle registration process (vehicle registrations data used when registering a new vehicle, cars and vans, with the DVLA will be used to calculate a manufacturer’s average specific emissions of CO₂). The approach here therefore mandates functions that the Secretary of State will perform such as collecting the data defined in part A of annex II; making such data available to manufacturers; and ensuring that vehicles are tested in accordance with the regulation. The Secretary of State may appoint bodies to act on their behalf.

Notification to the manufacturer

The statutory instrument sets out common information that needs to be provided to the Secretary of State each year, and the process for doing so. It also establishes that by 30 June each year, the Secretary of State must also send a notification to manufacturers, including the average specific emissions of CO₂ in the preceding year; the specific emissions target in the preceding year; and the difference between the two.

The EU regulation also states that data for each member state on the number of new passenger cars will be included in the notification, with the data taken from a publicly available register. As a publicly available register will still be a requirement, the notification will instruct manufacturers on how to access the register.

Appeals

The appeals procedure remains the same as under the article but the appeal is to the Secretary of State. Given the switch to UK domestic law, the appeal mechanism should also include an appeal, to the First Tier Tribunal. This will allow manufacturers to appeal to the tribunal if they believe that the final data, and therefore the final calculation for the specific emissions of CO₂, is incorrect.

As the amount that a manufacturer/pool would be fined is established in article 9, the fine itself is not the subject of any appeal. Appeals should only be brought if a manufacturer/pool believes that mistakes have continued to be made in the calculation of that particular manufacturer’s/pool’s final CO₂ emissions figure. In such a circumstance, the tribunal should either confirm the final figure that the Secretary of State has calculated in respect of that manufacturer’s/pool’s CO₂ emissions, or should change the figure. This will have a consequential effect of either changing or removing the excess emissions premium that is levied.

Article 8 - Excess emissions premium

The intent of these articles is to establish how much a manufacturer should be fined should they fail to meet their specific CO₂ emissions target. This intent remains the same in the statutory instrument.

In paragraph 2b the reference to €95 has been amended to an equivalent Sterling amount of £86. This is different to the £83 referenced in the previous statutory instrument to reflect the change in the exchange rate.

With regard to the mechanism for paying fines where a civil penalty is payable to the enforcement authority in:

• England and Wales, the civil penalty is recoverable as if it were payable under an order of the County Court in England and Wales
• Northern Ireland, the civil penalty is recoverable as if it were payable under an order of the County Court in Northern Ireland
• Scotland, the civil penalty may be enforced in the same manner as an extract registered decree arbitral bearing a warrant for execution issued by the Sheriff Court of any sheriffdom in Scotland

Article 9 - Publication of performance of manufacturers

This article establishes the rules around when and what should be published by the commission regarding the performance of manufacturers/pools in respect of their individual CO₂ emission targets. As the regulation will not commence until January 2021, the first reporting date will not be until 2022. Therefore, this article has been amended to reflect this date, with minimal changes made otherwise.

Article 10 - Derogations for certain manufacturers

Article 10 issues are considered before.

Article 11 - Eco-Innovation

Article 11 issues are considered before.

Article 12 – Real-world CO₂ emissions and fuel or energy consumption

This article refers to a future obligation on the European Commission to collect information pertaining to real-world fuel consumption from newly registered vehicles from 2021 onwards. The purpose of this data collection is to allow the commission to monitor the gap between WLTP CO₂ figures and real-world fuel usage, and to publish information relating to that gap.

As such obligations remain valid in a UK-only context, this article has been retained in full, with amendments made to reflect the obligation changing from the commission to the Secretary of State.

Article 13 – Verification of the CO₂ emissions of vehicles in-service

The purpose of this article is to ensure that the CO₂ emission values listed on each vehicle’s certificate of conformity correspond to the CO₂ emission values of vehicles tested in-service.

If such values do not correspond, then the relevant type-approval authority shall have the ability to amend that vehicle’s certificate of conformity in accordance with various existing and future pieces of legislation.

As this obligation continues to function in a UK-only context, the article has been retained in full, with any amendments reflecting the change in the obligation applying to Secretary of State instead of the European Commission, and reflecting the change in legislation-making procedures in the UK compared to the European Union.

Article 14 – Adjustment of M0 and TM0 values

This article sets out when and what exactly should be changed in respect of the formulae that set individual manufacturer CO₂ emissions limits, in order to ensure that these formulae are able to keep pace with changes to the new vehicle market.

As this will continue to be necessary in a UK-only context, this article has been retained in full, although paragraph 1a may not be necessary should the commission publish an updated M0 value before the end of the transition period.

Article 15 - Review and report

This article sets out a number of obligations on the European Commission referring to future reviews and reports.

This includes:

• reviewing the effectiveness of the legislation by 2023 (paragraph 1) with the areas to be considered listed in paragraph 2
• considering whether the 2030 target should be amended, and whether targets should be introduced for 2035 and 2040 onwards (paragraph 3)
• assessing the feasibility of developing a real-world emission test procedure (paragraph 4)
• evaluating the possibility of assigning revenue from excess emissions premiums to specific funds or programs to ensure a just transition to a climate-neutral economy (paragraph 5)
• reviewing the legislation on consumer information relating to vehicle fuel consumption by 31 December 2020 (paragraph 6)
• determining the correlation parameters necessary to reflect any change to the regulatory CO₂ emissions test procedure (paragraph 7)

The bulk of these obligations remain functional in a UK-only scenario; however, a number of changes are required.

In paragraph 1, the requirement on the commission to lay a report before the European Council and Parliament has been amended to obligate the Secretary of State to publish a report.

In paragraphs 2, 3 and 4, the relevant changes have been in respect of EU/UK and commission/Secretary of State, with references to EU Directives removed as these are not being retained in UK law after the end of the transition period.

In paragraph 5, the obligation has been placed on the Secretary of State, and the time limit of 2027 has been removed, as the ability to review government revenue streams does not require legislation.

In paragraph 6, the reference to EU Directive 1999/94/EC has been removed as directives are not being retained in UK law after the end of the transition period.

Paragraphs 7 and 8 have been corrected to reflect the changes in the EU and UK legislation creation processes.

Article 16 - Committee procedure

As this regulation will only cover the UK, the Climate Change Committee will have no jurisdiction over the UK, therefore this article has been removed.

Article 17 – Exercise of the delegation

This article sets out the conditions placed on the European Commission in respect of making subsequent legislation.

As these functions will instead transfer to the Secretary of State, this article has been replaced with paragraphs stipulating the processes for making subsequent UK secondary legislation under this regulation.

Article 18 – Repeal

This article repeals regulations 443/2009 and 510/2011 in the EU. As these have been repealed, the regulations will not be retained in the UK. Therefore, this article is not required and has been removed.

Article 19 – Entry into force

This article would be covered by the made, laid before Parliament and coming into force dates listed at the start of the UK statutory instrument.

Changes to annexes to EU 2019/631

Annex I - Specific emission targets

This annex establishes the definitions and formulae that are taken into account when determining a manufacturer’s CO₂ emissions target within any given calendar year. Part A covers the targets for passenger cars, while part B covers the targets for vans.

Part A

Paragraph 1 establishes the formula that should be used for 2020 registrations. Although not required to establish targets, as 2020 registrations remain in the EU regime, it has been retained for clarity in light of the 2021 target cross-referring to 2020 (see below).

Paragraph 2 establishes that the specific emissions target for each manufacturer shall be the average of each value for each passenger car established in paragraph 1.

Paragraph 3 establishes a new formula that will provide for a Worldwide harmonised Light vehicles Test Procedure (WLTP) emissions reference target in 2021, and takes into account the change in the CO₂ test procedure from New European Drive Cycle (NEDC) to WLTP. 2021 will be the first year that WLTP is wholly in force for CO₂ monitoring, and this formula will convert the NEDC-based targets into WLTP equivalents.

Paragraph 4 establishes how each manufacturer’s CO₂emission target will be calculated following the change to WLTP in 2021. This formula remains valid in a UK context and should be retained.

Paragraph 5 establishes a formula for the calculation of a manufacturer’s WLTP CO₂ emissions target in 2021 if that manufacturer has been granted a derogation. As with the above paragraph, this formula remains valid and should be retained. The reference to the commission in the NEDC 2021 target has been replaced with the Secretary of State.

Paragraph 6 establishes a number of formulae that set out how the various EU and individual targets will be calculated in 2025 and 2030. Barring changes to reflect the obligations falling in the UK-only and on the Secretary of State, this paragraph should be retained in full.

Part B

Paragraph 1 establishes the formula that should be used for 2020 registrations. Although not required to establish targets, as 2020 registrations remain in the EU regime, it has been retained for clarity in light of the 2021 target cross-referring to 2020 (see below).

Paragraph 2 establishes that the specific emissions target for each manufacturer shall be the average of each value for each passenger car established in paragraph 1.

Paragraph 3 establishes a new formula that will provide for a Worldwide harmonised Light vehicles Test Procedure (WLTP) emissions reference target in 2021, and takes into account the change in the CO₂ test procedure from New European Drive Cycle (NEDC) to WLTP. 2021 will be the first year that WLTP is wholly in force for CO₂ monitoring, and this formula will convert the NEDC-based targets into WLTP equivalents.

Paragraph 4 establishes how each manufacturer’s CO₂ emission target will be calculated following the change to WLTP in 2021. This formula remains valid in a UK context and should be retained.

Paragraph 5 establishes a formula for the calculation of a manufacturer’s WLTP CO₂ emissions target in 2021 if that manufacturer has been granted a derogation. As with the above paragraph, this formula remains valid and should be retained. The reference to the commission in the NEDC 2021 target has been replaced with the Secretary of State.

Paragraph 6 establishes a number of formulae that set out how the various EU and individual targets will be calculated in 2025 and 2030. Barring changes to reflect the obligations falling in the UK-only and on the Secretary of State, this paragraph should be retained in full.

Annex II - Monitoring and Reporting Emissions

Annex II establishes the rules for the collection and reporting of information from newly registered cars.

Part A establishes the fields and variables that member states should collect from manufacturers and report to the commission in order to fulfil their obligations under the regulations.

Although the UK will no longer be reporting information to the commission following the end of the transition period, the UK government will still be required to publish annual reports of all relevant registrations made in the UK, in the same way the commission currently does with EU registrations. This means that all of the information that is currently reported by the UK government will still need to be collected. Therefore, part A of annex II has been amended to detail the information that will be collected by the Secretary of State, with all references to reporting to the EEA/Commission removed.

Part B establishes the format that should be used by member states when transmitting the data to the commission, broken down by aggregated data and by detailed vehicle data. Again, although the UK will no longer be transmitting data, the data will still need to be collected in similar formats.

Part B of annex II has therefore been amended to state that the Secretary of State shall collect certain information in certain formats; references to EC type-approval have been amended to UK type-approval; and manufacturer names in member state registries have been amended to manufacturer name in the UK registry.

Annex III - Monitoring and reporting emissions

Annex III establishes the rules for the collection and reporting of information from newly registered vans.

Part A establishes the fields and variables that member states should collect from manufacturers and report to the commission in order to fulfil their obligations under the regulations.

Although the UK will no longer be reporting information to the commission in respect of vehicles registered in the UK after the transition period (subject to the terms of the agreement between the UK and EU), the UK government will still be required to publish annual reports of all relevant registrations made in the UK, in the same way the commission currently does with EU registrations. This means that all of the information that is currently reported by the UK government will still need to be collected.

Therefore, part A of annex III has been amended to detail the information that will be collected by the Secretary of State, with all references to reporting to the EEA/Commission removed.

Paragraph 1.2 onwards of part A to annex III details how the reporting of data from multi-stage vans should be handled, and also covers how the CO₂ emissions shall be measured from base vehicles.

While the bulk of this section continues to work some amendments are proposed.

Paragraph 1.2.1. should be omitted as the data will not be reported to an external body.

Paragraph 1.2.1.1 should be omitted as it relates to 2020 only.

Paragraph 1.2.1.2 should be amended to reflect the Secretary of State rather than member states.

Paragraph 1.2.2 should be amended to reflect the Secretary of State rather than the commission, and 2021 should be replaced with 2022 as this will be the first ‘reporting’ of data in a UK-only scenario.

All subsequent amendments in paragraphs 1.2.3; 1.2.4; 1.2.5; 2; and 3 reflect the Secretary of State replacing either the commission or member states, and substituting in relevant years to reflect the regulation entering into force in 2021.

Part B establishes the methodology that should be used when determining monitoring information pertaining to new vans and to multi-stage vehicles.

These methodologies continue to function, so the only amendments are to reflect the regulation applying in a UK context, and to the obligations falling on the Secretary of State.

Part C establishes the format that should be used by member states when transmitting the data to the Commission, broken down by aggregated data and by detailed vehicle data. Again, although the UK will no longer be transmitting data, the data will still need to be collected in similar formats.

Part C of annex III has therefore been amended to state that the Secretary of State shall collect certain information in certain formats; references to EC type-approval have been amended to UK type-approval; and manufacturer names in member state registries have been amended to manufacturer names in the UK registry.

Annex IV – Repealed regulations/derogation thresholds

In the EU Regulation, annex IV contains a list of regulations that are repealed by regulations 2019/631, and their successive amendments. As these regulations have been repealed, they will not be retained at the end of the transition period, and this annex is therefore not required.

We therefore propose to replace annex IV with 2 formulae that will establish the methodology for calculating UK individual manufacturer derogation thresholds. These formulae will be identical to those used in the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019, and have been discussed earlier in this document.

Annex V – Correlation table

Annex V contains a correlation table, highlighting which sections of regulation 2019/631 should be referred to should any other piece of legislation refer to either regulation 443/2009 or regulation 510/2011. These references continue to work, we therefore propose that this is retained in full.

Associated delegated acts

1014/2010 & 293/2012 - Monitoring and reporting of data

These regulations were corrected for by the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019.

Since this instrument was made, regulation 2019/987 has amended regulation 293/2012. This has rendered small sections of the above instrument incompatible with the new legal text.

This new legal text pertains to the reporting of specific information directly from manufacturers to the European Commission on multi-stage vehicles.

The only required amendments are to replace references to the commission, member states and ‘via electronic data transfer to the data repository managed by the European Environment Agency’ with the Secretary of State. We therefore propose to amend the above instrument only as far as required to reflect the obligations falling on the Secretary of State.

63/2011 and 114/2013 - Derogation applications

These regulations were corrected for by the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019.

There have been no subsequent changes at European level, therefore no additional correction or consideration is required.

725/2011 and 427/2014 - Eco-innovation applications

These regulations were corrected for by the Road Vehicle Emission Performance Standards (Cars and Vans) (Amendment) (EU Exit) Regulations 2019.

There have been no subsequent changes at European level, therefore no additional correction or consideration is required.

Question 5

Given the UK’s general approach in retaining the cars and light commercial vehicles regulation.

Do you have any comments on the minor and technical changes proposed? Are there unintended consequences of the proposed approach? If not, please explain your reasons in your response.

Northern Ireland Protocol

Regulation 2019/631 is listed in annex II to the Northern Ireland Protocol.

This therefore means that when the transition period ends, EU Regulation 2019/631 will continue to have effect in Northern Ireland from 1 January 2021 onwards.

For clarity, this therefore means that any new car or van registered for use in Northern Ireland from 1 January 2021 onwards will continue to be captured by the EU Regulation, and information and data relating to these vehicles will continue to be reported to the European Commission, and will be taken into account when calculating manufacturer CO₂ targets and specific emissions of CO₂.

The Department for Transport is currently considering how this will work in practice, taking into account the interdependencies between the UK and EU regimes in this situation, and more information will be made available in due course.

Should you have any comments or questions relating to the Northern Ireland protocol or its application, include them at the end of your consultation response.

Annex A: draft statutory instrument

The draft statutory instrument is supplied with this consultation.

COVID-19

The government recognises the extraordinary impact that COVID-19 is having on all aspects of society, including the automotive industry.

Given this, if you have any comments or questions relating to the regulation of vehicle CO₂ emissions, or to the ability to meet CO₂ emission targets as a result of COVID-19, please include these at the end of your consultation response. This may include information on the impacts to your business and business planning, or on unforeseen impacts to the application of the regulation.

What will happen next?

A summary of the responses and the government’s response, including the next steps, will be published in due course.

Consultation principles

The consultation is being conducted in line with the government’s main consultation principles.

If you have any comments about the consultation process please contact:

Consultation Co-ordinator Department for Transport Zone 1/29 Great Minster House London SW1P 4DR

Do not send consultation responses to this address.

Footnotes

1. Figures taken from http://co2cars.apps.eea.europa.eu ↩

2. Figures taken from https://www.eea.europa.eu/data-and-maps/data/vans-12/monitoring-of-co2-emissions-vans-2018-provisional/co2_vans_v13_mdb.zip/at_download/file ↩