The global automotive sector has been undoubtedly and persistently dominated by one over-riding topic over the last number of years – emissions standards. In both North America and Europe, mainly in the USA and Germany, investigations into vehicles within the fleet as well as wider manufacturer practices remain ongoing by enforcement agencies. Additionally, settlements between regulators and OEMs are being agreed as both parties attempt to progress passed the recent controversies. While the legislative changes that have permeated from these events have predominantly been within the realm of passenger vehicles, this has had a knock-on effect for other motor vehicles too.
This is evidently the case for vehicles used for commercial transportation and especially so for heavy-duty vehicles. In North America, updated emissions standards will come into force from 2018 for the period up until 2027 in the USA and Canada. In Europe, the relevant regulation is at a more elementary stage as the first steps are being made to introduce a first mandatory CO2 emission standard for heavy-duty vehicles. However, the changes is both North America and Europe represent a wider trend of regulators sharpening their focus on these policies. However, while the overall trends are similar, the intricacies of the legislation do differ.
On 17th May, the European Commission presented its long-awaited proposal for a first mandatory CO2 emission standard for heavy-duty vehicles in the EU on, a cornerstone of the third in a series of three landmark packages of mobility legislation which all placed a high emphasis on emissions legislation. In the draft legislation under consideration, the European Commission propose the introduction of a set 15% CO2 reduction target in 2025 and an indicative 30% CO2 reduction target in 2030 for large heavy-duty vehicles. The reduction is proposed to be based on 2019 CO2 levels and a review in 2022 would determine if the scope would be expanded to include buses, coaches, smaller heavy-duty vehicles and trailers as well as determine if the 2030 target should be changed.
In the USA, the second phase CO2 reduction targets will apply from 2018 up until 2027. The standards require a 10-18% reduction target for gasoline vocational vehicles while their diesel alternatives are set targets of 12-24%, the specific target for vehicles is dependent on vehicle size and whether is it is predominantly used in urban or regional areas, with a multi-purpose category also available. In Canada, the legislation is largely designed to complement that in the USA with vocational heavy-duty vehicles being set CO2 reduction targets of 10-24% for the same period, 2018-27.
The most significant divergence between Europe and North America is on whether to differentiate between fuel types. In the USA, higher reduction targets are set out for diesel vehicles over gasoline alternatives, while the European Commission retain a firm commitment to the principal of technological neutrality, deeming that no technology or fuel should be afforded an explicit legal preference over another. Furthermore, the EU’s initial attempt to legislate for trucks is evidenced by the staged-approach to eventually including all heavy-duty vehicle types within the scope, where the second phase of legislation in both the USA and Canada will include the majority of vehicle types upon application in 2018.
Despite these significant differences, the EU’s proposed headline CO2 reduction levels match the level of ambition as in the USA and Canada, as well as what is being proposed for passenger vehicles and vans in Europe. Regarding other markets, it is clear by the position of Canada, aligning with the USA, and Mexico, where law will apply from 2018 meaning manufacturers will have to comply with USA or EU regulation, that the emissions standards set by both the USA and EU will have a significant impact on the global industry.