Measures against air pollution by emissions from heavy duty vehicles
1. Title
"The Road Vehicles (Construction and Use) (Amendment) (No.2) Regulations 2002"
2. Purpose and Intended Effect of the Measure
2 (i) Objective
To reduce air pollution from heavy-duty vehicles in general and to extend the EU market for alternative fuelled heavy-duty engines. This will be achieved by enacting EU Directive 2001/27/EC, concerning the emissions from engines for use in large commercial vehicles, into Member State domestic law. This mandatory Directive, amending Directive 88/77/EC, introduces a requirement for the manufacturer to declare at type approval all the emissions control strategies available to an engine. It also changes the emission test requirements for gas engines, changes the specification of the reference fuel to be used for natural gas fuelled engines and makes provisions for the approval of ethanol fuelled engines. In its terms the Directive is very prescriptive, and leaves no room for interpretation.
2 (ii) The Issue
Much progress has been achieved in reducing air pollution in the UK through successive vehicle emission standards. Further measures are necessary to ensure that the existing regulations deliver the emission reductions that were expected. It is recognised that alternative fuelled vehicles can deliver significant reductions in certain pollutants and it is important that they are encouraged to compete with conventional engines. This amendment to "The Road Vehicles (Construction and Use) Regulations" will help to ensure three objectives:
- lower transport emissions that contribute to the Government's objectives for the reduction of the four main pollutants (established by the Air Quality Strategy for England, Scotland, Wales and Northern Ireland), especially taking into account the effects of road traffic growth,
- that engines deliver similar emissions performance in-service as assessed during type-approval, and
- that a single standard for alternatively fuelled vehicles is applied throughout the EU, hence removing any trade barriers that may be in place.
2 (iii) Risk Assessment
Knowledge about the effects of air pollution is continually developing. Pollution adversely affects health; the effects may vary between pollutants but can range from mild irritation, through increased symptoms for those with pre existing respiratory problems to premature mortality. Air quality standards have been established in the UK based on expert medical advice as to the likely effects of air pollutants. In respect of some pollutants such as fine particles, no threshold of effects has been identified.
2 (iv) Main Provisions
Directive 2001/27/EC amends the provisions introduced by Directive 1999/96/EC. The main changes are as follows;
Some engines employ alternative control strategies depending on the operating conditions encountered. Under the previous Directive, there was no requirement to declare all the alternatives, only the one employed during the type approval test. This amending directive requires the manufacturer to declare all the alternative control strategies and to show that these alternatives do not result in excessive emissions. It also gives the type approval authorities the ability to request additional tests to verify the effects of these alternative strategies. These tests can be applied at type approval and during conformity of production checking.
The requirement to declare alternative control strategies will also apply to engines that already have approval. However, this requirement can be satisfied using existing data and would not require actual engine testing. Where this declaration cannot be made, engine testing may be required to show that the alternative control strategies do not result in excessive emissions.
Directive 1999/96/EC introduced the possibility for gas engines to receive type approval. While they are able to meet the regulated limits, it has been recognised that due to the characteristics of the engine response to speed and load demand certain gas engines, by virtue of their design, have difficulty following the European Transient Cycle (ETC). To avoid distorting the design philosophy of gas engines, and to help stimulate the development of the market for gas-fuelled vehicles, Directive 2001/27/EC introduces a concession concerning how closely a gas engine has to follow the ETC. The continuation of this concession will be reviewed at a later date.
The reference fuels for Natural Gas and Liquefied Petroleum Gas, are revised to more closely represent market fuels, and a further reference fuel for ethanol fuelled engines is introduced.
A new Annex is added which specifies the technical requirements relating to ethanol-fuelled diesel engines.
2 (v) Regulatory Instruments
"The Motor Vehicles (EC Type Approval)(Amendment) Regulations 2001 (S.I. 2001 No 2809) made under the European Communities Act 1972. Amendments to "The Motor Vehicles (Type Approval for Goods Vehicles) Regulations 1982" and to "The Road Vehicles (Construction and Use) Regulations 1986" made under "The Road Traffic Act 1988".
3. Options
3 (i) Identifying the Options
Directive 2001/27/EC is a mandatory directive that the UK is required to implement under EU law. Failure to do so would contravene our obligations under the Treaty of Rome, which may result in fines. For this to happen the European Commission would take the UK to the European Court of Justice on two separate occasions. On the first occasion the ECJ would have to find that we had failed to fulfil a Treaty obligation and on the second that we had failed to comply with its earlier judgement. If the court finds the latter it may impose a lump sum or penalty payment on us.
In bringing the second action the Commission specifies the amount of lump sum or penalty payment it considers appropriate for the Member State to pay.
3(ii) Issues of equity or fairness
The requirements will apply equally to all EU manufacturers as well as to non-EU manufacturers who wish to market their products in the UK or EU.
4. Benefits
4 (i) Identifying the Benefits
Initially Directive 1999/96/EC introduced new limits for future heavy-duty engines and brought gas-fuelled engines within the scope of the directive. Its purpose was to improve air quality across Europe, bringing greater protection to public health. The requirements of Directive 2001/27/EC will ensure that the expected benefits arising from the implementation of Directive 1999/96/EC are not diluted by engines that employ alternative high pollution engine control strategies under certain operating conditions. It will also ensure that gas engines can be available in the market and also bring ethanol-fuelled engines within the scope of the directive, which will open the EU market to these engines.
By reducing the potential for engines to operate with inferior control strategies and by facilitating the uptake of alternative fuel engines the directive will reduce pollution from transport, which in turn will help combat the problem of air pollution. Air pollution is known to have a significant impact on the health of vulnerable people, especially those suffering from heart or lung disease. In their report published in 1998, the Department of Health's Committee on the Medical Effects of Air Pollutants concluded that evidence suggested that the deaths of between 12,000 and 24,000 vulnerable people may be brought forward each year and between 14,000 and 24,000 hospital admissions and re-admissions may be associated with short term pollution from all sources annually.
By clarifying the test procedures, this legislation is addressing the emission of key air pollutants. Heavy-duty vehicles are the significant source both of UK road transport related particulate emissions (43%) and of UK road transport related NOx emissions (42%). Particulate air pollution is associated with a range of effects including effects on the respiratory and cardiovascular systems, asthma and mortality. Nitrogen dioxide may have both acute and chronic effects, particularly in people with asthma.
4 (ii) Quantifying the Benefits
Many of the benefits of reducing air pollution are hard to quantify or value in monetary terms. Preliminary studies into the evaluation of the benefits of reducing emissions for nitrogen dioxide (NO2) and particles have been undertaken in the context of the UK National Air Quality Strategy (NAQS) by the DERA. The findings on particle levels have been published in "An Economic Analysis to Inform the Review of the Air Quality Strategy Objectives for Particles", a report of the inter-Departmental group on costs and benefits. It concluded that reducing the level of particles would result in an improved life expectancy for the UK population.
4 (iii) Emissions Reductions Predicted
The adoption of Directive 2001/27/EC will provide reductions in vehicle pollutants that will bring direct and indirect benefits.
This directive is closely linked to the Auto-Oil directives that set emission standards for passenger cars, light vans and heavy-duty vehicles. Estimated emission reductions in the UK by 2005 which would result from the Auto-Oil package of directives implemented in 2000 range from 16% to 21%, depending on pollutant, at both urban and national levels. By 2010, with implementation of the 2005 standards further reductions of 31 to 46% at both urban and national levels are forecast. This directive, by providing greater robustness to the 2005 standards will help in achieving the latter targets. In addition it will encourage the use of cleaner vehicle technologies which will reduce PM emissions and, to a lesser extent, NOx.
5. Compliance Costs for Business
5 (I) Business Sectors Affected
UK manufacturers of heavy-duty vehicles mostly rely upon independent engine manufacturers to supply type-approved engines. This is unlike the light duty sector, where the emission approval is given to the complete vehicle. As a consequence, the directive affects UK engine manufacturers directly and vehicle manufacturers indirectly.
In the UK the directive will impact on one manufacturer of heavy-duty engines and 3 manufacturers of heavy vehicles (over 3.5 tonnes). There are also 3 bus and coach manufacturers who will be affected.
The proposal will also impact manufacturers of emissions control after-treatment devices and systems, companies supplying liquefied petroleum and natural gas as road fuels.
There are at present no ethanol-fuelled engines on the market but these regulations will give confidence to this sector by providing an EU wide marketplace for their use.
5(ii) Compliance costs for a typical business
As indicated above a variety of enterprises will be affected by the proposal.
This directive seeks to prevent manufacturers using environmentally damaging emission control strategies. As such it is expected that few manufacturers of heavy-duty engines will have to undertake significant development work to re-design or redevelop existing engines to comply with this directive. The engines affected have already been approved to Euro III emission limits, it is the alternative engine control strategies that may need modification, and these are software based and could be modified comparatively easily. In addition any changes required to the control strategies would affect future production only; existing engines can continue to be used unmodified. The change in the requirements for the testing of natural gas fuelled engines will give the manufactures of these engines a greater opportunity to bring them to market.
The UK has only one manufacturer of on-road heavy-duty vehicle engines the sales of which represent approximately 33% of their business. Another company has some manufacturing base in the UK, but does not manufacture on-road engines here. Both companies produce natural gas fuelled engines.
Any costs will be made up of the cost charged by the type approval authority plus the internal costs of the manufacturer. There will be significant additional costs if engine testing is involved. Engine testing would only be required if an engine control strategy were suspected of causing an engine to not meet the emission requirements of its original type approval. Under the directive, current engines must be re-approved by 1 April 2002; therefore all costs will be incurred before that date
For type approval a manufacturer will group similar engines into 'engine families'. All the engines within the engine family can then gain approval through a single type approval process, saving considerable costs for the manufacturer.
Typical costs of complying with the proposed regulation are:
|
|
Per engine family |
|
|
Without engine testing |
With engine testing |
|
|
Type approval Authority fees |
£820 |
£1,230 |
|
Manufacturer costs |
£1,640 |
£42,000 |
|
Total |
£2,460 |
£43,230 |
An engine manufacturer has typically between 2 and 8 engine families, 4 being the most common. Therefore, a manufacturer could be faced with costs anywhere between £4,920 (2 x £2,460 and £345,840 (8 x £43,230). However, it is expected that most manufacturers will comply with minimum additional testing and therefore at a cost toward the lower end of the range.
Suppliers of gas fuels could face rising demand for their product as a result of the relaxation of the requirements for the type approval of gas fuelled engines. However, for both natural and liquefied petroleum gas the likely increase is extremely small compared to the total usage of these gases.
5 (iii) Total Compliance Costs
For the EU
There are principally 7 heavy-duty engine manufactures in Europe, whose collective annual production is approximately 1.2 million engines. These engines are approved in 30 engine families.
The effect of this Directive is to require the re-approval of certain engines that may otherwise have held a valid approval until the next change in emission standards in 2005/2006. As a worst case it is possible that 6 million (5 x 1.2 million) engines could be affected.
Minimum cost - no engine testing required
Engine family approval fees - £820 x 30 = £24,600
Manufacturers internal costs £1,640 x 30 = £49,200
Total £73,800
Maximum cost - all engine families require engine testing
Engine family approval fees - £1,640 x 30 = £49,400
Manufacturers internal costs £42,000 x 30 = £1,260,000
Total £1,309,400
For natural gas and ethanol fuelled engines the Directive offers benefits in that it will open up the European market for these engine types.
When compared with the current Directive the compliance cost for natural gas engines may be reduced as a result of the implementation of Directive 2001/27/EC. For ethanol fuelled engines the compliance costs relate only to new approvals (there is currently no market for ethanol fuelled engines) and should be no different to that for engines fuelled by diesel, i.e. £43,230.
For the UK
The UK's only manufacturer of on-road heavy-duty engines produces 6 families of engines. However, only 2 of these families will be affected by these proposals. Annual production numbers are in the order of 16000 units (including those for export).
Minimum cost - no engine testing required
Engine family approval fees - £820 x 2 = £1,640
Manufacturers internal costs £1,640 x 2 = £3,280
Total £4,920
Maximum cost - both engine families require engine testing
Engine family approval fees - £1,640 x 2 = £3,280
Manufacturers internal costs £42,000 x 2 = £84,000
Total £87,280
6. Impact on Small Businesses
Manufacturers of heavy goods vehicles/engines and suppliers of road fuel gases are all large enterprises, or subsidiaries of larger companies. Small businesses may purchase complete engines, but in light of the low additional cost per unit of the measures prescribed by the Directive it is unlikely that the purchase cost of an engine will increase solely as a result of the proposed legislation. In-service maintenance costs will not change, the fuel consumption may increase since the main reason for using alternative engine control strategies that result in the engine not meeting the type approval limits is to improve the efficiency of the engine.
7. Other Costs
Enforcement Costs
The Vehicle Certification Agency (VCA), an executive agency of DETR, is responsible for type approval of vehicles and their components. VCA charges manufacturers for its services - which include witnessing of type approval tests and issuing of type approval certificates. Any increases necessary in type approval costs of new engines due to the revised test cycles procedures are likely to be passed on to vehicle or engine manufacturers, although any increase is likely to be small.
The cost charged to re-approve an existing engine, or family of engines, and assuming no engine testing is required, will be as previously stated, (£820).
No increases in the costs of annual or roadside inspection of these vehicles by the Vehicle Inspectorate Executive Agency are anticipated. No change in enforcement costs is envisaged for trading standards officers or the police.
Effects on International Competitiveness
The regulations introduce an EU Directive which both EU and non-EU manufacturers will be required to meet in order to sell engines in the EU market. Competitiveness in the worldwide market is likely to be enhanced by the manufacture of engines that can be shown to comply with emission standards under all operating conditions. This is especially true in the United States of America, where 'off-cycle emissions' has been identified as a serious political issue.
8. Results of Consultation
The European heavy-duty engine manufacturers were involved in the formulation of Directive 2001/27/EC since the beginning. The manufacturers suggested the less burdensome, and less costly, route of re-approving existing engines through a paper-based exercise. This exercise would require the inclusion of a statement to the effect that whichever engine control strategy was employed by the engine it still met the emission limits. If this statement could not be made, for whatever reason, then the much more costly process involving engine testing, as originally proposed, would be followed
No objections to the regulations or the RIA were received during the public consultation exercise carried out on the associated amendments to the Road Vehicle (Construction and Use) Regulations 1986.
9. Summary and Recommendations
The directive is an element in the process of reducing the impact of vehicle pollution, especially NOx and particulates, to within air quality objectives. The costs to industry are significant, but can be spread over a large production run, giving a low unit cost increase. The Government considers that the benefits for health and the environment arising from this measure exceed the cost to industry and consumers by a considerable margin and therefore recommends that the regulation be approved.
10. Monitoring and Evaluation
Directive 2001/27/EC gives an approval authority the ability, upon suspicion of an engine type not meeting the emission requirements, of testing an example of that engine type. This would involve measuring the emissions at a random, 'off cycle' point, which should confirm whether the engine is fully compliant or not. Before this directive there was no framework to check a suspect engine. The VCA will carry out the primary monitoring function, but the Department as part of its ongoing vehicle testing programme for vehicle emission factors will be able to carry out limited random monitoring at no extra cost.
11. Declaration
I have read the Regulatory Impact Assessment and I am satisfied that the benefits justify the costs.
Signed by the responsible Minister.
.........................................................................................
Date: ..........................................................................................
David Jamieson
Parliamentary Under Secretary of State
Department for Transport, Local Government and the Regions
12. Contact Points
Type Approval Regulations: Gus Gander, Vehicle Certification Agency, Eastgate Office Centre, Eastgate Road, BRISTOL BS5 6XX.
Tel: 0117 9524119/Fax 0117 953 4103,
e-mail: Gus.Gander@vca.gov.uk.
Construction and Use Regulations: Tony Baker, VSE2, Zone 4/15, Great Minster House, 76, Marsham Street, London SW1P 4DR.
Tel 020 7944 2063, fax 020 7944 2512
e-mail: TonyT.baker@dft.gsi.gov.uk
