EC publishes reports to help inform decisions about 2020 new car CO2 targets
Wed 30 November 2011
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The European Commission has published two new technical reports by external contractors which have been commissioned to help inform the upcoming discussions on future regulation of new passenger car CO2 emissions to 2020. One of the reports on the impact of regulations on car prices does not discern that there has been any definite relationship between vehicle emissions standards and prices.
In December 2008 the European Parliament and Council reached agreement on the regulation of CO2 emissions for passenger cars. Besides the target of 130 g/km for 2015 and details of the way it is implemented, the Regulation also specified a target for the new car fleet of 95 g/km for the year 2020. The European Commission has stated that it will carry out a review of the Regulation no later than the beginning of 2013 in order to define the modalities of reaching the longer term target.
To help support the review the EC commissioned TNO (and associates) to examine the costs and options for implementing the 95 g/km target as well as an assessment of the costs for meeting this target.
The TNO-led study is the most comprehensive analysis of the costs of achieving proposed future regulations. It estimates the indicative 95 g/km target can be met but will add between EUR 760 to 1,700 to the average cost of a new car by 2020 compared to the current 2015, 130g/km target. The additional cost drops further to EUR 1,200 if unexplained progress over the period 2002-9 arising from “possible utilization of flexibilities in the test procedure” is taken into account. TNO have also incorporated the results of a recent USEPA study that suggest lower costs than the European analysis and indicates the cost of achieving the 95g/km target will only be EUR 760. This difference arises since USEPA costs for technologies such as hybrids and light weighting are significantly lower.
At a stakeholder event in Brussels TNO also explained that a switch to a footprint-based metric as opposed to one based on the weight of the vehicle would also deliver cost savings – although ACEA continue to support a weight- based system. The European Commission is expected to produce its impact assessment for the new regulation imminently.
The Commission also asked the UK's AEA Technology to review the effect of regulations and standards on vehicle prices.
The specific objectives of the study were to:
- Analyse the historical evolution of new passenger car market prices in the EU27 with respect to environmental performance, safety standards and comfort levels
- Understand the development/composition of manufacturing costs, both of the vehicle itself and of the technical equipment on board the vehicle. This included understanding how these costs have evolved over time
- Estimate the effect of existing legislation (regulations and standards) on the real end-user prices and characteristics of new vehicles in the period up to the year 2010
- Use the findings from this research to develop a quantitative method by which the impacts of vehicle regulations and standards can be translated into real-world price impacts. Such a method could potentially then be integrated into the design of the Commission’s modelling tools in order to improve the accuracy and usefulness of modelled outputs.
The report concludes that evidence from the dataset of historical vehicle prices and features does not provide any definite relationship between vehicle emissions standards and car prices. In general, only indicative correlations can be made between emission trends and car prices.
Overall cars have become 12% to 22% cheaper – after inflation – in the eight years from late 2002 to late 2010. The average annual reduction in CO2 emissions was 0.7% and 2.5% in 2002-2006 and 2002-2010 respectively.
The report highlights the difficulty in isolating the impact of car attributes on prices which stems from the complexity of vehicle production technology, pricing/marketing strategies and compliance with regulations.
For more information and to download the reports, please follow the associated links
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