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MEMO/05/495

Brussels, 21 December 2005

Directive on the promotion of clean road transport vehicles

1. How many vehicles does the quota of 25% represent?

Market shares for the assessment of the economic and industrial impact are as follows:

  • For buses, public procurement represents about one third of the whole market; 25% of that would represent 8.25%.
  • For other Heavy Duty Vehicles, public procurement represents 6% of the total market.

The number of vehicle procurements covered by this Directive is about 52.000 in total, split into 17.000 buses, and 35.000 other Heavy Duty Vehicles (e.g. garbage vans). A quota of 25% clean vehicles from the total corresponds to 13.000 vehicles per year. The Directive leaves full flexibility for re-distribution of these clean vehicle procurements within the whole category of Heavy Duty Vehicles. If a public body or an operator wants to focus on a specific type, such as buses or garbage van, it has the liberty to do so. This can offer economies of scale for the operator with larger fleets of a single type, while providing the full benefit of economies of scale for vehicle manufacturers, as the same type of clean engines (those fulfilling the EEV standard) can be mounted onto different vehicle types having just different chassis.

Market shares for the assessment of the economic and industrial impact are as follows:

  • For buses, public procurement represents about one third of the whole market; 25% of that would represent 8.25%.
  • For other Heavy Duty Vehicles, public procurement represents 6% of the total market.

2. What is the current situation in terms of use of clean vehicle technologies? Are some Member States more advanced?

Vehicles that correspond to the EEV standard (“Enhanced Environmentally Friendly vehicle”, see Directive 2005/55/CE, are operating so far only in very small numbers. They operate more as demonstration vehicles and are not broadly deployed. Yet, vehicle models complying with EEV standards are available from several manufacturers. The objective of today’s proposed directive is precisely to accelerate market demand.

Examples of EEV vehicles in operation

  1. Paris: 28 EEV garbage vans (IVECO; CNG) in operation, 90 additional ones ordered.
  2. Montpellier: 19 garbage vans (IVECO; CNG) in operation
  3. Frankfurt/Main: From December 2006, 20% of the public transport buses shall comply with the EEV standard. The German Environment Ministry supports the fleet renewal with 1,4 M€.

Case studies carried out in the frame of the Impact Assessment
a) Rome: 5584 buses in operation.
325 annual purchases
81 annual purchases on 25% EEV quota
20,000 € additional cost per bus (average)
1,62 M€/y additional cost
3% internal rate of return for overall cost/benefit analysis
b) Brussels: 571 buses in operation
Full replacement by clean vehicles planned by STIB for 2006-2014
20,000 € additional cost per bus (average)
1,27 M€/y additional cost.

Policy programmes

UK government has notified the Commission in May 2005 of a support programme for buses complying with the EEV standard.

3. How much more costly are vehicles that use clean technologies compared to conventional vehicles in the +3.5 tonne category?

The average price of clean vehicles is about 5-15% higher than that of conventional ones. The exact difference in price depends on the technology. Diesel vehicles upgraded for EEV with catalysers and particulate filters cost about 5% more; Natural gas (CNG) and LPG vehicles cost about 15% more. The difference is expected to decrease by developing markets for clean vehicles due to the economies of scale involved.

Price examples for buses are:

Diesel conventional: 200.000€; diesel EEV: 210.000€; CNG or LPG: 230.000€.

4. What is the extra cost that flows from today’s proposed directive? Who will have to pay for that extra cost?

The total extra cost arising from the obligation of this proposed initiative to buy cleaner vehicles is estimated at 1,610 M€ over 15 years. After this period of time general standards for the fleet are expected to have risen to the level required by this directive, which would then have served its purpose of speeding up improvement of air quality and boosting the general market for clean vehicles.

In the meantime, financial support from national and appropriate EU funds can compensate for the higher procurement costs incurred to ensure that the higher cost for clean vehicles does not lead to a degradation of the quality of public transport services. Examples of such support from EU funds exist already. Clean buses have been co-financed in the past through Structural Funds in eligible regions.

5. What is the total benefit for society from today’s proposed directive?

The benefit for society from the proposed broader market introduction of clean vehicles consists in a (1) reduction of damage from the emissions of pollutants and greenhouse gases, estimated at 1,050 M€, and (2) a reduction of overall energy consumption as assessed on a complete fuel chain (“well-to-wheels”) analysis, of about 870 M€. The resulting total gain of about 1,920 M€ in terms of environmental and energy resources over-compensates the higher vehicle purchase cost of about 1,610 M€. The cost/benefit analysis of this proposed initiative therefore gives a net benefit for society over the period of time this directive will have an impact, i.e. until 2030, of about 300 M€.

See also IP/05/1672


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