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How much has lobbying affected EU rules on vehicle emissions standards?

The Corporate Europe Observatory released an important study in January highlighting the influence car manufacturers appear to have on the EU’s process for regulating cars’ nitrous oxide (NOx) emissions. These emissions are damaging to human health.

One of the Observatory’s main points was to urge the European Parliament to veto the rules this in February. In the wake of the Volkswagen emissions scandal, the European Parliament’s vote and other scrutiny has now taken place. The package has been passed with some amendments, which indicates the power of car industry lobbying on the European legislative process.

However the British government supported the motion in the Council, so it is difficult to criticise the NOx result as contrary to British interests. Moreover, in a vote on 3 February 2016, the European Parliament had the chance to veto the package and push for a stronger deal. This failed 317-323, with a large number of abstentions including 20 Ukip MEPs led by Nigel Farage. In essence, British MEPs could have tipped the European Parliament against the proposals if they felt them against Britain’s interests. This blog will briefly explore the legislation’s detail to consider why the law was agreed despite the fear of lobbyists’ influence.

The proposed NOx rules revolve around testing cars’ emissions in the real world (hence the moniker real driving emissions, RDE). This is because it was found that previous emissions tests, which were done in laboratory conditions, produced results that were wildly different from cars’ emissions in actual driving. The issue gained urgency when the Volkswagen emissions scandal broke in September 2015.

The new rules proposed a NOx limit of 80mg/km for diesel cars, which would be brought into force gradually from 2019. The Observatory’s main criticism was that there was a high ‘conformity factor’, or margin of error by which cars could fail and still be allowed on the road. This was to be x2.1 until 2021, or 168mg/km, to be reduced to x1.5 (120mg/kg) in 2021. The Observatory argued that this was essentially a ‘non-conformity factor’ achieved by sustained communications from the auto manufacturing lobby, mainly embodied in the European Automobile Manufacturers’ Association (ACEA).

The ACEA, the Observatory showed, had contacted the Commission at various times during the creation of the NOx laws and had argued for the removal of certain provisions, such as high speed testing, testing from a cold start, and testing in towns, which were later modified or removed. This was complicated by some car industry employees being used as experts for the legislation process. The ACEA argued that the costs of stringent NOx tests could cause ‘social and other costs associated with closure of engine production lines’.

This is a typical lobbying threat from any industry worried it will be overregulated: suggest either that jobs will be lost or factories will move to light-touch jurisdictions. The Observatory noted that the threat is powerful in Europe as the industry employs over 12 million people and accounts for 4% of EU GDP. At the moment, politicians are surely wary of over-regulating industries like car manufacturing in case rules go too far and cause their collapse, as has arguably happened with the steel industry. The Commission’s proposals would likewise have been drafted by officials wary of adding to EU unemployment.

Read alone, the Observatory report seems scandalous: how did the car industry get its way on so many issues? Why did member states vote in its favour on 28 October 2015 (in a technical committee) and 12 February 2016 (as the Council of the European Union)? After all, Britain appeared to support the measure both times, and Ukip MEPs failed to oppose it. According to MEP advice documents seen by the Guardian, the Cameron government ‘strongly supports the current RDE agreement.

The answer appears to be pragmatism. After the Volkswagen scandal there was an urgent need for effective rules on NOx, and the proposed measures reduce real driving emissions from 400-500% of the safe levels, where they are now, to 210%, then 150%. Some of the VW culprit vehicles were apparently 40 times higher than they should be.  Any form of limit would be a great improvement on current levels.

Testing real emissions, rather than emissions in laboratory conditions, has never been done before. The regulators say their testing mechanism has a 20% error rate, so it is understandable that some leeway is given, especially in the first few years as manufacturers adapt their production lines to fit the rules. Moreover, several national governments including the UK apparently feared that opposing the measures as they stood would just lead to more delays implementing any laws at all. Concerns from environment minisers were met by a Commission proposal to review the NOx limits every year in the light of more accurate testing equipment.

Would Brexit change the situation at all? It is hard to say.

If Britain left the single market entirely then it would be able to set its own rules for domestic NOx emissions, so these could be lower or the testing more stringent. However, UK auto manufacturers that exported would still have to meet EU standards, and it is very likely that they would just produce one vehicle model that conformed to the more stringent set of rules. As we have seen, the current government supported the NOx measures and may not be keen on tightening them if that would make UK industry less competitive than European factories. Even the committed Eurosceptic party Ukip did not try to block them.

If, on the other hand, Britain left the EU but remained part of the single market like Norway or Iceland, it would have to apply the rules outright. Norway did, however, send its Public Roads Administration representative to the committee meeting that originally green-lit the proposal, indicating a degree of input into the rules.

It seems that governments needed to make a practical decision on NOx emissions. The Corporate Europe Observatory was in favour of scrapping the compromise proposals in favour of more stringent emissions tests and lower limits, but most governments decided not to let the perfect kill the good, and to avoid further delays in any rules implementation, so agreed to many of the car industry’s demands. The fear of auto jobs losses may well have been a factor, given the current steel industry crisis. This is an important public health issue which endangers an estimated 70,000 lives each year, so NOx emissions will probably be followed keenly by journalists and regulators. There is scope, thanks to the annual review, of higher standards in the future.