New automotive emissions reduction targets: Which vehicles will they cover? | In Principle

The ambitious climate targets adopted by the European Union at the 21^st United Nations Climate Change Conference in 2015 (the Paris Agreement) require decisive action across many sectors of the economy. The automotive industry will not be spared, and will soon be subject to a series of new regulations.

Reasons for action

The Paris Agreement commits states to countering the progression of climate change. It is an international agreement that entered into force on 4 November 2016, following ratification by at least 55 countries responsible for at least 55% of global greenhouse gas emissions. Currently, 195 countries are parties to the agreement. The Paris Agreement is binding on both Poland and other member states of the European Union.

The most important target of the Paris Agreement is to hold the increase in global average temperature below 2°C relative to pre-industrial levels, with efforts to ensure that the increase does not exceed 1.5°C. The agreement also draws attention to the need for better ability to adapt to the negative effects of climate change and promotion of climate resilience and low-carbon growth that does not threaten food production. Another objective is to ensure that financial flows are consistent with a path to low greenhouse gas emissions and climate-resilient growth.

Under the Paris Agreement, states are required to prepare nationally determined contributions (NDCs). An NDC is essentially a comprehensive action plan for reducing emissions. Subsequent NDCs will be presented every five years, with each successive NDC expected to set more ambitious goals. From the EU perspective, in October 2023 the member states submitted an updated reduction plan for the Union and its member states to the Conference of Parties (COP) to the UN Framework Convention on Climate Change. The EU’s updated reduction plan follows the adoption of all key elements of the “Fit for 55” legislative package. Implementation of the adopted commitments is expected to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. These solutions also apply to the automotive sector.

Emissions reduction vs. the automotive industry

In January 2024, negotiators for the European Parliament and the Council of the European Union reached a preliminary political agreement on CO₂ emission standards for the road transport sector. This is the next step in the EU legislative procedure initiated by the proposal of the European Commission of 14 February 2023. Interestingly, the planned solutions are not part of the “Fit for 55” legislative package. Nonetheless, they are closely linked to the package and are expected to contribute to reduction of greenhouse gas emissions in accordance with the commitments undertaken by member states under the Paris Agreement.

The proposed provisions set new reduction targets for 2030, 2035 and 2040. Also, reporting requirements for CO₂ emissions from new vehicles registered for the first time in the EU will be introduced. However, the regulation will not apply to all vehicles, but only to heavy-duty vehicles—trucks, urban buses, coaches and trailers. The changes are justified by the finding that this vehicle category accounts for more than 25% of greenhouse gas emissions from road transport and more than 6% of greenhouse gas emissions in general.

Who needs to prepare for changes?

The existing provisions call for a 15% reduction in emissions between 2015 and 2019. This target is likely to be maintained. Also, the proposed regulation assumes new reduction targets at the following levels:

• 45% for 2030–2034
• 65% for 2035–2039
• 90% from 2040 on.

The benchmark for these reduction targets is 2019 emission levels. In principle, the regulation will cover all new vehicles subject to certification of CO₂ emission values. And under the political agreement, as of 2035 the regulation will cover specialised vehicles, such as garbage trucks, tipper trucks, and other vehicles used in the construction industry. Whether the new provisions also cover small trucks (less than 5 tonnes) remains to be seen. Also, by 2025, a decision is to be made on the need to standardise the approval rules for retrofitted vehicles. For this purpose, a retrofitted vehicle means a conventional vehicle that has been converted into a zero-emission vehicle.

It should be noted that the European Parliament included trailers and semi-trailers within the scope of the regulation. Reduction targets are provided for this category as well, at 7.5% and 10% respectively. As indicated in the recitals, this category also contributes to emissions and energy consumption in the transportation sector and should therefore be included in the reduction targets. The proposal also includes a definition of “e-trailer.”

Urban buses are subject to a special regulation. Under the proposal, emissions from new urban buses are to be reduced by 90% by 2030, and by 2035, total zero-emission should be achieved. The concept of urban buses excludes intercity buses, which are classified as coaches for the purposes of reducing emissions. This means that the general objectives outlined earlier in the text will apply to intercity buses.

EU lawmakers have provided several exemptions from the general reduction targets for certain categories of vehicles. In principle, this exclusion is due to their specific uses, which generally relate to meeting community needs:

• Small manufacturers and vehicles used in agriculture, mining and forestry
• Fire services and military vehicles
• Healthcare services, forces responsible for maintaining public order and other civil protection services vehicles.

What else might change?

The proposed changes are now entering a critical phase of the legislative process, as they require formal approval by both the Council and the European Parliament.

The proposed changes will take the legal form of a regulation. This means that they will apply to Polish entities without the need for implementation by the national parliament. The new provisions will come into force 20 days after publication in the EU Official Journal, with a likely effective date in July 2025. So now is the time for stakeholders to prepare for the proposed changes.

The revised regulation will include a review clause, calling for study of the effectiveness and impact of the new provisions by the Commission, which will analyse in particular:

• The common method for evaluating and reporting full-cycle CO₂ emissions from new heavy-duty vehicles
• The CO₂ correction factor in the transition to zero-emission mobility
• The methods for registering heavy vehicles powered by non-CO₂ fuels.

The review may result in another legislative initiative by the Commission for the automotive sector. As a result, we can expect more changes over the next few years. In principle, the scope of possible changes will be determined by the review of these provisions.

Conclusion

The proposed changes are part of the European Union policy to reduce CO₂ emissions, and should come as no surprise to anyone. Although they are not part of the “Fit for 55” package, they are closely related to it and arise directly from the need to take actions required by the Paris Agreement and nationally determined contributions. This is vital, as emissions from the road transport sector play a key role in the total greenhouse gas emissions in the EU.

An advantage of the proposed changes is their comprehensive scope. But the question remains whether the planned scale of emission reductions can be achieved in such a short timeframe. And it may be necessary to broaden the exemptions from the planned emission reductions so that the changes do not have harmful and irreversible effects on businesses and local government—especially considering that implementation of EU laws in Poland often generates complications and is not always conducive to environmental protection. An example of an EU directive that the Polish parliament has implemented in a manner raising doubts among businesses is the Single-Use Plastics Directive (effective from 1 January 2024). Many controversies are also generated by the law on the deposit system for beverage containers, which is to operate from 1 January 2025. Thus the European Parliament should aim to adopt solutions not overly burdening businesses, while ensuring an adequate degree of environmental protection.

Karol Maćkowiak, Environment practice, Wardyński & Partners