Thursday

21st Jun 2018

Ministers water down post-Dieselgate reform

  • The commission wanted the power to fine car companies that break EU law if the national authority fails to act. But the council's text restricts the commission's ability to do so. (Photo: TÜV SÜD)

Industry ministers on Monday (29 May) adopted their position on a proposed reform of the EU's car approval system, signalling tough negotiations ahead with the European Parliament.

The reform includes more specific requirements for member states to check whether cars approved for the EU market still comply with the rules once they are on the road.

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At the Council of the EU in Brussels, the ministers adopted a compromise text, proposed by Malta, which currently holds the rotating six-month council presidency.

Although sources had said last week that Germany may oppose the text, it was adopted without a vote after the Maltese industry minister, Christian Cardona, concluded that there was a broad enough majority.

The council's text differs on several substantial points from the original proposal from the European Commission, published in January 2016 after the Dieselgate emissions scandal broke out. It also differs greatly from the position of MEPs.

The final legislation will be a compromise of the council's text and that of the parliament.

The scandal – which was kick-started in September 2015 when it emerged that Volkswagen Group (VW) had cheated in emissions tests – gave the commission the confidence to propose more EU oversight in the field of car approvals.

Currently, there is a single market for automakers, which can choose any EU member state to certify their cars. That approval is then valid in the whole of the EU.

At the market surveillance level, however, there is a still a national system: only the country where the certification was granted can take action.

The commission had proposed that it should have greater involvement. This was supported by the EU parliament, which adopted its position in April 2017.

EU fines

While the council's text accepts some more EU oversight, it scrapped or weakened some proposals for centralisation.

The commission had wanted to have the power to fine car companies that break EU law, if the national authority fails to act.

But the council text restricts the commission's ability to do so.

The commission will not be able to fine a cheating car company if the member state responsible for granting the approval has already fined the company, or if it has acquitted the company.

The commission's original text only ruled out its ability to fine a company if the member state had already done so.

Brussels-based consumer organisation Beuc said in a press release on Monday that this leaves the door open for member states to protect their companies by handing out "a completely insignificant penalty".

The only situation in which the commission can fine a company, under the council's proposal, is if the member state has done nothing.

'Technicality'

However, it is still unclear what would happen if a member state opens a case after the commission has already announced it would hand out a fine.

Would the commission's fine still stand, or would it be declared null and void until the member state's national court has come to a conclusion?

“Who takes precedence in this case, I think it's a technicality, which needs to be figured out eventually,” said an EU source who was involved with the drafting of the compromise text.

But does that then not mean that a member state can always overrule the commission?

Julia Poliscanova of the Brussels-based non-governmental organisation, Transport & Environment (T&E), told EUobserver she shared that analysis.

Minimum number of checks

Another change in the text is that the council proposes to specify how much double-checking national authorities should do.

Member states should check at least 0.002 percent of all vehicles that were registered in the previous year. In theory, that could include many cars of the same type.

The parliament, however, took a different approach. Rather, it said that the member states should check at least 20 percent of the number of car types on the market in the previous year, which means that member states would have to check different types of cars.

For the purpose of comparison: several millions of vehicles are registered each year, but only a couple hundred types.

The council also opposed a mandatory system for type approval authorities to check each others' work through peer reviews. Instead, it said that member states should be allowed to opt for their test laboratories to be accredited in accordance with internationally recognised standards.

Member states also removed the obligation to impose a fee on companies to pay for market surveillance activities, saying instead that governments should be free to decide how oversight will be funded.

How the actual legislation will look depends on the outcome of negotiations between representatives of the council and MEPs – mediated by the commission.

Delicate compromise

Several ministers said on Monday that during the upcoming negotiations with the parliament on the final legislation, the representatives of the council should not deviate from the compromise text on the contentious issues, including peer reviews and penalties.

“Even a small change could undermine the very delicate balance which has been struck in the general approach [the compromise text],” said Greece's economy minister, Alexandros Charitsis.

A handful of countries – including Luxembourg and the Netherlands – said they would have liked the reform to be more far-reaching, but that they could support the compromise.

EU commissioner for industry Elzbieta Bienkowska said on Monday that “more ambition was still needed” and she mentioned the need for the commission to hand out fines – to create a level playing field for companies.

“As we all speak in favour of the single market in this area, how can we possibly deliver that concept of the single market, if the same offence by some manufacturers is punished in 28 or 27 different ways?” said the Polish commissioner.

Bienkowska also noted that, ever since the Dieselgate scandal broke with the Volkswagen cheating, it has continued – returning in the headlines every week with new suspicions of cheating, different car companies, and further developments.

“It will never finish if we do not have in Europe a new robust system,” she said.

However, Bienkowska added that she was happy there was a council position, so that negotiations with the parliament can begin.

Talks will likely begin under the Estonian presidency of the council, which will begin on 1 July.

Consumer organisation Beuc said on Monday that it hoped MEPs and the commission will "push member states to agree on a more ambitious final package".

"Clearly under pressure from Germany, [ministers] have agreed on a package of half-baked measures that risk turning the entire reform into a paper tiger," Beuc said.

Investigation

MEPs oppose EU agency to prevent Dieselgate II

The European Parliament said on Tuesday that there should be more EU oversight on how cars are approved, but stopped short of calling for an independent EU agency.

Investigation

Dieselgate: MEPs want to give EU more testing powers

EU Commission should have power to veto national car testing programmes, MEPs in lead committee agreed. Meanwhile EU commissioner Bienkowska says member states have learned little from emissions crisis.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

Opinion

The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

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