European Commission Aims for Greater Emission Reductions

The European Commission (EC) has put forth a groundbreaking proposal to revise the current CO2 standards for heavy-duty vehicles (HDVs) in a bid to accelerate emission reductions and combat climate change. The proposed amendments, detailed in a recent briefing paper, outline several significant changes that would impact compliance pathways for manufacturers, technology uptake, and real emission reductions achieved.

Published

May 2023

Industry

Electric Vehicles

One of the most notable amendments introduced by the EC is the concept of vehicle trading. This innovative mechanism allows manufacturers to report another entity’s vehicles as their own to meet their CO2 targets. For conventional vehicles, connected manufacturers that share a parent company can transfer an unlimited number of vehicles between them. This means that the burden of compliance can be shared across all entities under a parent manufacturer, potentially enabling them to pool their emissions with another and meet the targets more effectively. However, non-connected manufacturers are not permitted to engage in trading conventional vehicles.

In the case of zero-emission vehicles (ZEVs), all manufacturers, regardless of their connection, are allowed to trade vehicles, but with certain limitations. They can trade up to 5% of the receiver’s sales volume in any reporting period. This provision offers a fresh revenue stream for smaller manufacturers that exclusively focus on ZEVs. By trading their vehicles with conventional manufacturers, these ZEV-focused manufacturers can generate additional income while remaining in compliance with the standards.

The proposed vehicle trading mechanism aims to incentivize collaboration among manufacturers, accelerate the adoption of cleaner technologies, and facilitate a more equitable distribution of emission reduction efforts. By enabling the pooling of emissions for conventional vehicles and encouraging the trading of ZEVs, the EC hopes to enhance the heavy-duty sector’s ability to achieve deep emission reductions and meet the ambitious targets set for the coming years.

The EC’s proposal also expands the scope of CO2 standards to include buses, coaches, trailers, and new types of trucks. Furthermore, it introduces more stringent targets for 2030, 2035, and 2040—45%, 65%, and 90% reductions, respectively. Compliance flexibilities have been amended, phasing out certain elements while introducing new ones, and the definition of a zero-emission vehicle has been revised, along with the associated penalties for manufacturers.

This comprehensive proposal by the European Commission represents a significant step forward in the fight against climate change in the heavy-duty sector. If implemented, the amendments have the potential to drive the adoption of cleaner technologies, promote collaboration among manufacturers, and ultimately contribute to a substantial reduction in CO2 emissions from heavy-duty vehicles, bringing Europe closer to its sustainability goals.

Source: An analysis on the revision of Europe’s heavy-duty CO2 standards | The ICCT