Part I – How weak Euro 7 standards could cost up to €100 billion in health and environmental damage by 2050
The policy advisers of the European Commission sound the alarm. Weak and delayed enforcement of the Euro 7 standards, setting new requirements for car emissions, may very well cause an estimated €100 billion health and environmental damages until 2050 due to excess pollution from internal combustion engines (ICE). Estimates are based on analysis performed exclusively for Voxeurop by the Commission consultants, the Consortium for ultra-low vehicle emissions (CLOVE). Europe’s top automotive experts scrutinised the watered down text agreed at the end of September by the 27 governments at the Council (the EU co-legislator together with the European Parliament elected by citizens). This loss of €4 billion a year could be averted if European carmakers forfeited a tiny fraction of their annual fortune, doubled to €73 billion since 2019, to produce cleaner models.
Through its vote at the plenary session on 9 November, the European Parliament holds the responsibility to confirm or overturn the Council decision squandering the EU ambition to crack down on the toxic legacy of Dieselgate. The scandal in 2015 exposed manufacturers’ tricks to circumvent the rules capping tailpipe fumes through doctoring the levels of NO (or NOx, Nitrogen Oxide), one of the primary contaminants released by combustion (mostly diesel) engines. NO is rapidly converted into Nitrogen Dioxide (NO2), which causes 49,000 premature deaths per year in the EU and indirectly contributes to the formation of Particulate Matter (PM) which is even more harmful: the estimated number of excess annual deaths is 238,000.
Half of these premature deaths could be avoided if cars had the same on-the-road emissions as reported in the laboratory tests conducted for the approval of new models. Although in the wake of Dieselgate the EU tightened its surveillance rules by coupling the traditional laboratory tests with mandatory driving tests on the road, legal emission limits are often exceeded also by new car models.
Along with cases of clear violations and lack of controls by national authorities, excess emissions mostly happen because of legislative loopholes: indeed, the tests for the approval of new models are not required to capture all real driving conditions (for example cold environments and short trips) and measurements do not cover the entire vehicle’s lifetime.
That is why the Euro 7 standard proposed by the Commission aimed to tighten both emission limits and testing procedures for cars, vans and heavy-duty vehicles like buses and lorries.
However, the Council approved a text which essentially continued with the almost 10-year-old Euro 6 norms for exhaust emissions (with tighter limits only for heavy-duty vehicles), while implementing limits for PM from brakes and tyres and requiring an emissions monitoring system ensuring long term compliance. Diesel-fuelled cars are still allowed to pollute more than petrol ones.
Carmakers obtain the permit to over-pollute
“Spain, holding the Council rotating presidency during the second semester of 2023, played a key role in killing Euro 7,” said Anna Krajinska, Manager on vehicle emissions and air quality at the NGO Transport & Environment. “On the first day of the Presidency, Renault confirmed a huge investment in ICE cars in Spain and only days after the proposals were agreed in Council, Spain’s trade minister boasted of how a weak Euro 7 will help secure further carmaker investment in Spain.”
Early this year Volkswagen (VW) and Stellantis also announced big plans on hybrid and Electric Vehicles (EVs) in the Iberian country. Through the silent barter offered by Trade Minister Héctor Gómez the industry received a gift worth billions in avoided eco-expenditure. This will lead to around 47-58% less public benefits up to 2050, compared to the Commission’s proposal, according to forecasts provided to Voxeurop by CLOVE consultants which advised the Commission on the Euro 7 policy options.
“In exchange for every extra billion saved by a few carmakers, millions of European citizens will suffer serious diseases, hospitalisations and other social costs, shouldering the €27 billion paid to shareholders between 2019 and 2023 by the five largest automotive groups in Europe (VW, BMW, Mercedes-Benz, Stellantis and Renault),” Krajinska added. “Member states should be ashamed for putting profiteers’ interests over the health of their own citizens.”
These comments measure the success of the pressures exerted on the EU institutions by the European Car Manufacturers Association (ACEA), currently chaired by Renault CEO Luca de Meo. The Brussels-based industry platform increased its lobbying spending since the discussions on Euro 7 started in 2018 with preliminary recommendations made by the CLOVE consortium.
Confidential correspondence seen by Voxeurop revealed how carmakers convinced EU high-ranking officials to weaken their Euro 7 plans from the outset with the argument that investments should prioritise the transition to emissions-free electromobility by 2035.
“We have invested significantly in technology for e-mobility to the tune of more than 250 billion,“ said an ACEA spokesperson.
“The Commission ask us to work towards the 2035 zero emissions target while at the same time converting to Euro 7 through committing resources and engineers back to combustion engine technology which will become obsolete in just a few years from now,” Matthias Johansson, Head of Public Affairs at carmaker Volvo, told Voxeurop. Volvo intends to produce only EVs as of 2030.
Indulging in lengthy behind-the-scenes consultations with ACEA, the Commissioner for Internal Market Therry Breton, former lobbyist for the tech company Atos, of which he was the CEO, and frontrunner candidate as the next EU Commission President, resolved to present a formal proposal only in November 2022, with a one-year delay. The text set looser requirements (i.e. emission limits to 60 mg/km) than those outlined in the greener policy options recommended by CLOVE (limits 20 to 30 mg/km).
The most balanced option would have decreased nitric oxide (NOx) emissions from cars and heavy-duty vehicles by an average 44% until 2050. The projected savings lost 18% with the “Breton” text, according to a study on the impact of Euro 7 on air quality, decreasing to 35-40%. They further shrunk to 15-25% with the EU Council decision (bringing to zero cars emissions reduction), according to estimates shared by CLOVE consultants with Voxeurop.
A study by the research organisation International Council for Clean Transportation (ICCT) demonstrates that the proposal availed by Breton, if enforced timely in 2025, would cut 1 million tons of emissions and would prevent 7,300 premature deaths until 2050 (with 56% attributed to reductions in emissions from heavy-duty vehicles). As a result of the industry’s time-wasting strategy and the vote delayed by the European Parliament centre-right majority, the proposed application date has been postponed to 2026/2027 for cars and 2028/2029 for heavy-duty vehicles. This extension may cause over 1,700 premature deaths in the EU.
Test procedures and reduction efforts for all other pollutants have also been progressively softened throughout the lawmaking process, including ultrafine particles, particulate matter (PM) from brakes and ammonia (NH3, which contributes to PM, but so far unregulated) which has been totally scrapped in the Council deal.
“The Euro 7 that EU-27 ministers agreed on for cars and vans is akin to greenwashing,” said Felipe Rodriguez, Deputy Managing Director at the Europe office of the ICCT. “It keeps the existing test conditions and emissions limits of Euro 6 but calls it Euro 7 because new brake and tyre abrasion limits would apply.”
“It is inexplicable that cleaner cars have to be sold in China and the U.S. by European manufacturers than in Europe,” said Krajinska.
U.S. and Chinese laws set binding requisites similar to the Euro 7 standards proposed by the Commission that carmakers are opposing.
“The US approach is less stringent than the EU’s in a number of instances, for example emission limit values achieved by vehicles are measured under controlled lab tests, not under the variability of on-road driving,” said an ACEA spokesperson, who nonetheless admitted that the “effectiveness (i.e. of pollutant emissions standards) should ultimately be measured by how a vehicle performs on the road.”
The amendments adopted on 12 October by the EU Parliament Environment Committee largely followed the Council position. Emails seen by Voxeurop were addressed to Members of the European Parliament by the German company Daimler Truck ahead of the vote in the committee and by ACEA ahead of the plenary, scheduled on 8 November. Both messages aimed to influence the bill. Particularly the Czech member of the populist ANO party Ondrej Kovarik (affiliated to the centrist Renew group), copy-pasted the request to restore the Euro 6 limits, submitted by Alessandro Vascotto, Head of Public affairs at ACEA, into an amendment that he then circulated to secure sufficient signatures for a vote.
Renew is part of the majority centre-right coalition at the European Parliament, together with the European Conservatives and Reformists Group which includes the Euro 7 rapporteur Alexandr Vondra (also Czech – a member of the ruling ODS party) and the centre-right European People’s Party. The coalition appointed as negotiator on the file the German Jens Gieseke, former co-chair of the special investigation committee on Dieselgate. He drafted the Committee recommendations in 2017 calling for the elaboration of the Euro 7 standard that he is now trying to dismantle by leading the fight against the Commission’s proposal.
Taxpayers’ money wasted in unused clean technology
A final victory for Big Auto would undo five years of valuable work, funded by taxpayers’ money (through the EU budget), to identify the most cost-effective regulatory options. Under a formal mandate from the Parliamentary Special Committee investigating Dieselgate, the Commission has committed considerable human resources and spent €3.9 million in consultancy for Euro 7 and its impact on air quality as well as over €80 million in projects aiming to demonstrate that pollution can be reduced through adopting already existing and affordable technical solutions. “By killing off Euro 7 by opposing the mandatory use of such technology, carmakers have wasted all the taxpayer funding they received,” said Krajinska.
Indeed many of the EU-funded projects, worth around €56 million, involved brands such as Mercedes-Benz (formerly Daimler), Jaguar-Land Rover, Volvo, Fiat, Iveco and Renault. The French company’s CEO De Meo currently leads the ACEA battle against tighter emissions reduction, but for many years it advocated for the opposite through using EU funding for its own in-house engineering. Renault was the most successful applicant to programs specifically requested by member states to improve the environmental performance of diesel engines.
The Dieper project started in 2016 while Renault, which scored the farthest out of compliance with Euro 6 standards, was audited by the Dieselgate Committee of the European Parliament. Dieper demonstrated that noxious compounds (particularly ultra-fine particles) can be lowered below the obsolete Euro 6 limits. After speeding the €8.6 million provided by the EU, the French giant announced its intention to “pursue various of the Dieper developments to serious production”, without any commitment to produce less polluting vehicles.
Earlier on, from 2015 to 2018 the group had conducted a similar project with the Reward consortium, funded by the Commission with €10 million, to “cost-effectively produce cleaner, highly efficient Diesel […] technologies for future cleaner […] passenger cars” and to “prove […] compliance with stricter post Euro 6 limits”. These promises amounted to nothing when last May De Meo publicly stated that the proposed Euro 7 (which precisely sets more stringent limits for future cleaner cars) “would require us to put a lot of money on things which have no future.”
With a view to the Euro 7 implementation, the European association of catalyst suppliers (AECC) conducted tests in collaboration with CLOVE, proving that limits well below those of the Euro 6 can be achieved, also in very low temperatures. AECC used a consolidated technology (electrically heated catalyst) which has been ready for many years but never commercialised. The tool can limit NO2 release during the first kilometres when the engine is still cold and emissions peak above the legal limits, before exhaust cleaners warm up and turn on.
To force carmakers to use this equipment, the Commission wanted to include in the approval tests trips shorter than 16 Km, which is the minimum mileage to start measuring the emissions under Euro 6. Governments decided, instead, to continue allowing carmakers to spew unlimited NOx over such distance, which makes most of the short driving trips in cities (an average 20 Km a day) pollution bombs .
“Carmakers have signed contracts with us to make the adjustments needed to comply with the Euro 7, before turning to their political blockade,” said a public affairs director of an AECC member company on condition of anonymity.
Car price vs. health price
Official EU Commission’s sources and updated calculations provided to Voxeurop by CLOVE suggest that with the proposed Euro 7 the price per car would not increase more than €200-250 on average. According to a survey conducted by YouGov in 2021, people would be willing to pay over double the amount for cleaner models in Italy, France, Spain and Germany, which together account for 68% of new sales across Europe.
The Commission’s notes based on the CLOVE projections, seen by Voxeurop, reveal that the total cost that carmakers could pass on consumers would be close to €30 billion until 2050. This amount is far less than the €145 billion in net welfare (benefits-cost) expected from decreasing road pollution. Each euro invested in Euro 7 would save 5 euro on healthcare and environment costs.
“Our cost-benefit analysis is based on transparent modelling assumptions and a thorough dialogue with all stakeholders, including automotive suppliers such as AECC, and carmakers,” said Professor Zissis Samaras, coordinator of CLOVE and co-founder of Emisia, a spin-off company of the Laboratory of Applied Thermodynamics at the Aristotle University of Thessaloniki, which advises industry and policymakers on sustainable and cost-efficient transport technologies. “I must say that carmakers did not provide information on the possible Euro 7 costs when asked in the framework of stakeholder consultation launched by the European Commission.”
Eventually lawmakers preferred to believe in the danger of a socio-economic breakdown taunted by the automotive sector which accounts for a considerable share of the EU wealth: over 7% of EU GDP, 12.9 million workers (8.3% of all manufacturing jobs in the EU) and €392.2 billion in tax revenue for European governments.
“Unfortunately, the political debate was never really about air quality or about technical or economic feasibility: the car industry has succeeded in centering it on the price of a car,” Dutch MEP Bas Eickhout, negotiator on Euro 7 for the Greens Group, told Voxeurop. “Their alternative claims and figures found their way into the minds of most politicians and they are now happy to trade public health for a marginal increase of the price of a car.”
ACEA-paid studies totally invert the cost-benefit perspective, indicating that stringent obligations would raise the price per car by up to €2,000 (€12,000 for heavy-duty vehicles) while contributing very little to pollution reduction. The latter would supposedly decrease by a larger extent through shifting the old fleet (i.e. Euro 4 and 5) to Euro 6 and to zero emissions electric vehicles (EVs).
“Euro 6 covers over 95% of statistically realistic on-road driving events and conditions,” said an ACEA spokesperson. “The Euro 7 proposal aims to extend coverage to the minority of possible driving events that would require an unnecessary level of effort and cost to address.”
Emissions can be up to 475% higher outside the parameters of the approval tests (that ACEA defines as “minority events”), resulting in unaccounted NOx outflow over 20% of the driven distance, as found by the European Commission’s Joint Research Center.
The biased industry approach
The industry claims about dramatic price increase, based exclusively on manufacturers inputs and questionable methodology, were debunked by an independent review by CLOVE. CLOVE members are regularly contracted by carmakers to optimise their environmental performances and therefore are very familiar with emissions-related engineering.
The report by Frontier Economics, commissioned by ACEA, inflates projected costs based on carmakers’ assumptions that complying with the Euro 7 proposed by the Commission is not feasible without installing automatic gearboxes (reportedly decreasing emissions), developing new technologies, upgrading catalysts and wasting more fuel.
“Automatic transmission has steadily increased over the last decade and projections for 2026 show that the trend will continue, independently of Euro 7 introduction, letting alone that CLOVE car emissions database and AECC tests show the same compliance of manual and automatic transmission with the limits proposed by the Commission,” pointed out Zissis Samaras, whose expertise has been trusted in many occasions by ACEA itself through consulting contracts signed with EMISIA. “There is no need for new exhaust emission control technologies since those which are already developed and particularly catalysts size increase and improved filters for gasoline and diesel vehicles are sufficient to reduce emissions with no additional fuel consumption, stressing that carmakers are constantly improving engine efficiency regardless of Euro 7.”
Also, new analysis by Transport & Environment shows that Europe’s five biggest carmakers have already raised the prices of their cheapest models since 2019 by an average of 41% (almost double the cumulative rate of inflation during this period), independent of the Euro 7 adoption.
“Carmakers have raised prices for consumers beyond inflation to substantially bolster their own profits and yet they have fought tooth and nail against life saving anti-pollution technologies costing only €200 per car,” said Krajinska.
ACEA’s attempt to dismiss the Euro 7 health benefits is also disproved by expert analysis, confidential documents and emissions data.
“In principle, the industry proposal to minimise pollution through converting the whole fleet to Euro 6 and distributing the efforts among the different sectors contributing to urban emissions (including house heating) would be more cost-effective than imposing a Euro 7 standard alone,” a scientist who has contributed for several years to air quality studies for the Commission told Voxeurop, under condition of anonymity. “But this is a theory as long as governments do not enforce that current cars, vans and trucks are actually as clean as they are supposed to be. Thus a new Euro 7 limit stage emerges as an alternative solution.”
Minutes of a meeting of the Forum for Exchange of Information on Enforcement held on 29 September 2022, seen by Voxeurop, show that national surveillance authorities have failed so far to force carmakers to recall from the market those Euro 6 vehicles breaching the emission limits. These vehicles are equipped with on board software which switch off the NOx control systems for reasons considered unacceptable by the European Court of Justice (e.g. low temperatures or engine durability).
With its ruling of July 2022, the Court banned such softwares (technically ‘defeat devices’) as cheating methods to put an end to the long wave of Dieselgate. During the meeting, the Commission “expressed disappointment” for the lacking information “on the evaluations and appropriate measures carried out in the Member States following the […] judgement”. Particularly, while Italy and France are still performing their inspections with no concrete results, Germany has completed them, but has not taken corrective actions yet.
“We are still waiting for member states to comply with their obligations to publish the annual in-service conformity reports,” the Commission spokesperson told Voxeurop.
Euro 6 cars, in most cases, emit up to four times more than the legal limits (10% of the worst-performing models contribute to 25% of the total pollution from Euro 6). Analysis by the ICCT and T&A argue that a new stringent Euro 7 standard is needed to ensure that, during the transition towards zero emissions in 2035, cars pollute as little as possible. “95 million new vehicles certified as Euro 7 will be sold until 2035 and, without effective rules, will be nothing more than greenwashed Euro 6 and many of them will keep poisoning our air for decades, until at least 2050,” said Krajinska. “Carmakers will claim they are cleaner and try to get them exempted from restricted access to city centres.”
Car making countries voting against their citizens’ health
The irony is that the countries supporting the industry against a strong Euro 7, officially or behind-the-scenes, are precisely those which have been scolded for exceeding the EU concentration caps for NO2 and PM and subject to infringement procedures by the Commission or even fines by the European Court of Justice.
No wonder that such member states are home to the biggest car manufacturing brands (Italy, France, Spain and to some extent Germany, which is split between Greens respectively in favour and Free Democrats against the Commission proposal) or car factories (Czech Republic, Slovakia, Bulgaria, Poland, Romania). However, in most of them, 77% of people on average think that car manufacturers should be legally obliged to reduce pollution as much as technically feasible, according to the YouGov poll mentioned earlier.
Almost two third of the legal breaches of pollution norms by those countries are to be blamed on dense road traffic. The latter represents almost 40% of the total NOx emissions in urban areas, where 70% of Europeans live.
Concentration thresholds will be severely lowered by the revised EU air quality standards, on the way to adoption. In September, though, the European Parliament cautiously postponed their alignment with the WHO values until 2035, meaning not before cars running on fossil fuels are phased out. Indeed, the Commission’s impact assessment shows that member states will not be able to comply with more rigorous NO2 targets, should a shaky Euro 7 compromise be hastily sealed in the run-up to the EU elections in 2024.
Also, the WHO limits for PM 2.5 (10 µg/m³ compared to the current 25 µg/m³ ) “can only be achieved with a reduction in NOx emissions from road transport”, explained Francesco Forastiere, epidemiologist and WHO consultant.
“The ambitious Euro 7 standards are needed urgently as a major opportunity to decrease the harmful impact of combustion engines, which are the major source of air pollution to people living in cities around Europe,” said Zorana Jovanovic Andersen, Chair of the European Respiratory Society Environment and Health Committee. “They will prevent new cases of cardiorespiratory and metabolic diseases and improve the quality of life of millions of heart and lung patients around Europe.”
Around 90% of urban dwellers in the EU were exposed to levels of NO2 above the WHO guidelines, including during COVID lockdowns in 2020. A study covering 432 cities calculated that each urban population suffered 58 million of healthcare and other social costs due to NO2 concentrations (15% of the total damage caused by air pollution).
Reacting to the Council decision, Polis, the network of European cities and regions for sustainable mobility, stated Euro 7 is essential to allow local authorities to attain the future EU air quality standards, otherwise they will have to bear the burden of compliance through unpopular more stringent measures to keep pollutant cars away from their territory and protect public health, such as expanding Urban Vehicle Access Regulations Low and Zero Emission Zones.
Part II – Industry game exposed: saving dirty cars, wasting public health
Inside the Euro 7 lobbying strategy. The car industry hijacked the Commission’s work and influenced the decision on Euro 7 from the outset. Their aim was to continue producing polluting cars at the lowest cost, while delaying the transition to zero emissions.
In 2018 the Commission created the Advisory Group on Vehicle Emission Standards (AGVES) including industry representatives, NGOs as well as consultants from the Consortium for Ultra Low Vehicle Emissions (CLOVE), consisting of academic, research and business experts. CLOVE was awarded over 2 million euro to verify the potential for additional pollutant reduction and to further the discussions within AGVES to develop a collaborative approach towards the Euro 7 standards.
Following public consultation, in October 2020, CLOVE recommended tighter tests to capture the emissions released in all real driving conditions and to lower limits for NOx (10mg/km) and other compounds based on the best environmental performances achieved by different models on the road. “According to our database, several large carmakers already produce vehicles which emit much less than the Euro 6 limits, meaning that emissions reduction below the Euro 6 are technically and economically possible,” said Zissis Samaras, CLOVE Coordinator.
However, the industry promptly fought back. On 20 November , the European Car Manufacturers Association (ACEA) sent a complaint letter to the Commission Vice-President for the Green Deal, Frans Timmermans, which described CLOVE recommendations “as an intention to severely limit, or even cancel, the future role of the internal combustion engine in the European market”.
On 27 November, the German Association of the Automotive Industry (VDA) backed ACEA’s move through sending a letter to the Director General for Internal Market policies (DG GROW) at the Commission, Kerstin Jorna, following their video call two days earlier. VDA reiterated its position against the idea to make cars “as clean as possible […] under almost all driving conditions”.
“The response from the industry was completely out of proportion,” said Felipe Rodríguez, Deputy Managing Director at ICCT Europe. “Instead of working with the Commission and CLOVE consortium to put forward something constructive, they triggered a media storm and reactions from Member States backing their cause, so that the process became very politicised from the outset.” According to confidential sources, CLOVE members were also put under pressure by carmakers, which are often lucrative customers that commission emissions performance tests from them.
As a result, in April 2021 CLOVE loosened both limits for all contaminants (20-30 mg/km for NOx) and the approval measurements. At first the industry seemed happy. “The EU Commission has accepted the limits of what is technically feasible and has said goodbye to unattainable goals,” said VDA President, Hildegard Müller.
The friendship between the industry and EU Commissioner Breton
However, the truce did not last long. Carmakers harshened their crusade, begging ,the European Commissioner for the Internal Market, Thierry Breton, for help. The former French lobbyist became the industry’s best ally, as shown by confidential email exchanges obtained through FOI requests.
The first meeting was held on 19 May 19. “During the discussions Breton invited ACEA to send him the industry’s alternative Euro 7 proposal, so that the Commission could get input into its final proposal,” said a source from the car industry on condition of anonymity. Breton’s generous move towards the industry is confirmed in a letter that on 9 June was submitted by ACEA to Jorna (similar to the one addressed to Breton the day earlier).
The letter summarised the lobby platform’s public position requesting to keep the test conditions the same as in Euro 6 and slightly lower the emission values only for NOx, so that the industry could put its technical and financial efforts in the electrification needed to meet the CO2 targets, driving further air quality improvements. Jorna promptly sent a reply to ACEA: “Rest assured that we will analyse and consider them carefully in the course of work on the regulatory text”.
A month later, the Commission’s Regulatory Scrutiny Board rejected the impact assessment prepared by the Directorate General for Industry and Transport (DG GROW), outlining the Euro 7 policy options based on CLOVE inputs. The main invalidating argument was the missing analysis of the cumulative costs for carmakers and the air quality benefits expected from the transition from combustion to electrification, as suggested by ACEA.
Indeed, on 14 July, the Commission proposed the revised legislation requiring zero CO2 emissions for passenger cars and vans in 2035 (compared to those in 2021), with 15% and 50% intermediary targets by 2025 and 2030, forcing carmakers to progressively replace fossil fuel cars with EVs and bringing to an end combustion engines.
While DG GROW civil servants were busy revising their impact assessment, the industry and Breton continued their discussions behind- the-scene. “Lots of information was exchanged in the meantime between ACEA and the commission,” said our anonymous source. Following a new meeting on 26 October, ACEA sent a letter to Breton on 2 November saying “we are happy to follow-up on these issues and […] we trust that technical follow-up meetings will be quickly organised at the working level with your services for Euro 7” (recorded subsequent interactions include a meeting on 12 December, and another letter from ACEA to DG GROW on January 24 2022).
In January 2022, the revised Euro 7 impact assessment, taking into account the effects of electrification, was given the green light by the Regulatory Scrutiny Board. The Commission was finally entitled to present its long-due legislative proposal, initially planned for the end of 2021, but again Breton’s cabinet put it on hold. The new measures were announced for July 2023.
“ACEA kept telling the Commission that developing a new engine for Euro 7 and electrification at the same time would be too much effort to handle for the automotive industry, and would slow down electrification of the sector, as all focus would first go to reducing the emissions of combustion engines,” according to our industry source.
ACEA’s message was clearly heard by Breton and Frans Timmermans, the then EU Commissioner for the European Green Deal. The Commission further postponed the Euro 7 proposal, pending the adoption of the road transport decarbonisation plan that Timmermans was set to flaunt at the annual international climate summit COP27 in November to confirm the EU’s commitment against global warming.
“The rules on CO2 standards for cars and the proposal for a Euro 7 regulation are complementary,” said the Commission’s spokesperson. “The timing of the publication (i.e. of the Euro 7 proposal) allowed the Commission to take into account the final outcome of the inter-institutional negotiations on the CO2 standards for cars which were considered in the impact assessment, but without clarity about the outcome of the legislative process.” “I suspect that the unspoken deal was that, if ACEA supported the CO2 targets, then the Commission would presumably present a lighter Euro 7, as especially requested by some member states,” said our source.
The behind-the-scenes agreement
This mutual understanding was somehow implicitly sealed on 1st June 2022 during a meeting at ACEA headquarters between the association’s Board of Directors and Jorna with her team. Oliver Zipse, BMW CEO and then ACEA President, led the conversation. This meeting is not disclosed in the public register, in breach of the transparency rules, according to which “The Directors-General of the Commission shall make public information on all meetings held by them with organisations or self-employed individuals on issues relating to policy-making and implementation in the Union”.
A week later, DG GROW sent to ACEA a letter Voxeurop has seen, summarising the meeting outcome. It reads that “Concerning the green transition they (i.e. the industry representatives) fully support the -55% (i.e. of CO2) targets for 2030, but asked caution for 2035 (-100% of CO2) target”, that “Concerning Euro 7, they referred to ACEA proposal (i.e. the one already submitted to Breton in 2021)” and that Jorna “reassured them that the Commission proposal will set ambitious but feasible requirements”.
During the meeting “Acea did indeed refer to proposals for Euro 7, which had been sent to commissioner Breton,” an Acea spokesperson said.
It is worth noting that both Stellantis and Volvo Cars (distinct from VOLVO Group) left ACEA after the meeting due to their different disagreements with the association’s approach to Euro 7 and electrification.
At the end of June the Council adopted the CO2 targets and in late October reached an agreement with the Parliament, largely following the Commission’s proposal, with no interference from the industry.
A month later the Commission officially presented a Euro 7 proposal which did not follow the best policy option outlined in its own impact assessment. To meet ACEA demands, the text partially loosened the test conditions and the pollutant limits. In particular, NOx emissions for diesel vehicles were just aligned to those of petrol vehicles under Euro 6 (60mg/km).
A senior source inside DG GROW agreed that this behind-the-scenes deal paved the way for the further watering down of the bill by the 27 member states at the Council. Legislative proposals by the Commission have to be approved by national governments, and a weak initial proposal leaves less room for negotiations.
“The […] Euro 7 proposal is not the result of the requests from one stakeholder, but rather the fruit of a careful examination […] following a very wide consultation with all stakeholders,” told Voxeurop the spokesperson of DG GROW who confirmed the secret meeting occurred between Jorna and ACEA. “ACEA never had any deal with the Commission about the Euro 7,” a former lobbyist for the car industry in Brussels told Voxeurop.
NGOs were outraged by the Commission proposal on Euro 7. “The auto industry lobby has fiercely opposed Euro 7, using a variety of dirty tricks to influence decision makers and the Commission has caved into their demands,” said Krajinska.
However the industry was not satisfied yet. “Unfortunately, the environmental benefit of the Commission’s proposal is very limited, whereas it heavily increases the cost of vehicles,” said Zipse in the official reaction of ACEA, which, in February 2023; called for an even weaker version of the Euro 7.
At the same time, the German car industry group VDA’s position paper recommended delaying the enforcement dates, which EU lawmakers eventually agreed to do.
“Although being responsible for slowing down the Commission’s work, ACEA had the guts to say during the AGVES meetings that the Euro 7 standards came too late and carmakers would have a hard time complying with the requirements by the proposed time frame (2025 for cars and 2027 for heavy-duty vehicles),” said a Commission civil servant at DG GROW under condition of anonymity.
Polluting until the very end
Despite the promises made to the Commission, the industry’s subtle goal seemed to undermine both the transition to full electrification and the Euro 7 as a whole. “In all of its papers, the ACEA insists on the fact that the zero CO2 emissions strategy should be technology neutral,” said our anonymous industry source. “I believe that ACEA strategy was: ‘first, use the electrification argument to soften the Euro 7 and then try to remove the combustion engine ban set for 2035 by weakening it with eFuels [a hypothetical low carbon fuel for combustion engines, Note from the editor], which was backed by the German government after a lobby of the German VDA, and some German carmakers like Porsche and BMW.”
This is exactly what happened. Shortly before the vote at the Council which was due to formally endorse the agreement reached with Parliament on the CO2 targets, the then centre-right German government threatened to turn down the regulation to force the Commission to introduce a derogation in the EU cars approval norms, enabling the registration of vehicles running on carbon neutral eFuels after 2035. The deal between EU Commissioner Frans Timmermans and the federal minister for transport, Völker Wissing, extended de facto the sales of cars with combustion engines beyond that date.
“Carmakers successfully made the Commission believe that they would invest in increasing production of EVs if they weren’t obliged to invest too much to comply with stringent Euro 7 standards, but the reality might be different,” said our anonymous source. Indeed, the CO2 standards for the automotive sector include a revision clause allowing the Commission to assess the progress made towards 100% emission reduction in 2026 and potentially review the target schedule in the light of technological development.
“Should carmakers move too slowly with electromobility before the mid-targets, or if incentives to develop the charging infrastructure are too limited to expand capacity fast enough to power new cars, the industry will again start influencing the Commission to extend sales of new combustion vehicles beyond 2035”, Philippe Vangeel, Secretary-General of the European Association of Electromobility, told us.
This scenario comes through the industry official communications.
“Already today, a lack of charging and refuelling stations is severely hampering the market uptake of zero-emission vehicles,” stated ACEA Director General, Sigrid de Vries. “A significant ‘infrastructure gap’ will continue to limit CO2 reductions and the transition of our sector to climate neutrality.” The statement was made in reaction to the agreement reached between the European Parliament and the Council on the new mandatory deployment of alternative fuels infrastructure, setting targets for electric recharging and hydrogen refuelling infrastructure also for the road sector.
Regardless of the infrastructure progress achieved so far, electrification of road transport is moving at a slower pace in Europe than in the U.S. and China. Carmakers have not increased the proportion of EVs compared to hybrid cars [running both on electric and fuel, NftE] in Europe, remaining steady since 2015, according to the International Energy Agency outlook 2022 report which states that this “may reflect a corporate strategy among European automakers […] of offering plug-in hybrid cars (PHEVs) versions of many large and high-end car models to capitalise on their experience in developing conventional powertrains” – a necessary part of PHEVs.
The industry strategy is for a cost-free, completely ineffective Euro 7 to maximise their profits from outdated combustion engine technology,” said Krajinska. “This is at the same time as carmakers limit the production of zero emission EVs for the EU market as evidenced by stagnating EU EV sales and prioritise selling large, expensive EVs rather than small, affordable models.”
To comply with CO2 reduction targets, carmakers sell a large volume of EVs that they produce at low cost in China to European consumers, while continuing to operate their traditional factories to flood the roads with combustion engine vehicles.
Some automotive suppliers have even been blackmailed by carmakers threatening them to switch faster to electrification and stop buying emissions control components, should Euro 7 be too stringent and require significant technology upgrades, according to sector experts who talked to Voxeurop on condition of anonymity.
Paradoxically, given the cost-driven reasoning of the industry, the transition to zero emissions could have been faster, should a Euro 7 with stringent requirements raise the cost of cleaning up combustion engines.
“We planned small electric cars that would come in 2025 […] when we thought Euro 7 was an insurmountable hurdle that will accelerate electrification,” VW CEO Thomas Schäfer told the media at the Los Angeles motor show in November 2022, a few days before the presentation of the Commission proposal, as reported by Autocar.
Gian-Paolo Accardo, Lorenzo Di Stasi and James Jackson contributed to this investigation.
This story is part of an investigation supported by Journalismfund Europe, the European Excellence Exchange in Journalism (E³J) and Free Press Unlimited.
Original source: https://voxeurop.eu/en/dieselgate-how-much-carmakers-lobbying-new-eu-emissions-rules-will-cost-europeans/