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E U Legislation Update
March 2007

OPPORTUNITIES FOR DIALOGUE
European Parliament Transport Committee supports Historic Vehicle amendment
In November 2006, the FIVA EU issues update reported that the European Commission had drafted its proposal for a Directive to require trucks up to 10 years old to fit special mirrors designed to cover blind spots to help improve road safety. The proposal was designed not to affect vehicles more than 10 years old and therefore should have addressed the authenticity concerns for historic trucks which FIVA had previously highlighted. However, the relevant provision only stated that the 10-year provision would apply to all trucks "registered" with in the last 10 years. As historic vehicle enthusiasts often register vehicles bought abroad or which have been off the road for many years this could presented an unintended regulatory problem. Accordingly, FIVA took its concerns back to the European Commission who in discussions with the Finnish presidency of the European Council at the end of last year made a change to the text – but which also was not quite sufficient to resolve the issue. Accordingly, further to discussions with FIVA, the European Parliament Transport Committee under the guidance of its Chairman Italian MEP Paolo Costa, on 28 March adopted an amendment which means that the recitals of the Directive will include the following text:
“Vehicles in categories N2 and N3 which were originally registered and/or have been type-approved and/or put into service more than 10 years before the date of transposition of this Directive and which are operated mainly for their historical interest should not be affected by the rules and procedures contained in this Directive.” The Committee gave its explanation for the amendment as follows: The amendment aims to provide an exemption regarding the use of historical vehicles given that this could not affect the output of the proposed measure. The recital intends also to cover historical vehicles for which there are no longer registries or documentation proving their initial date of registration. (The Council in its "general approach" introduced a similar reference to those vehicles into the text).
It is hoped that the parliament as a whole will now adopt this amendment and given that FIVA has already been told by the European Commission that it has no objections to this text, that this will be approved by all the institutions when they adopt the Directive.
INFORMATION
Commission proposes tax increase for diesel
In March, the European Commission proposed draft legislation to raise the minimum tax rates on diesel for commercial vehicles with the specific objective to limit "fuel tank tourism” where commercial vehicles travel longer distances to cross borders to buy cheaper fuel - the effect being greater damage to the environment. The new proposal is designed to reduce the national disparities in diesel taxes by half. The current minimum tax rate for diesel is €302 per 1,000 litres for diesel which under the proposal will rise to €359 per 1,000 litres - the same as the current petrol minimum - in 2012. Under the proposal, the minimum tax rates for both diesel and petrol will further increase to €380 in 2014. Equally, countries that already have high taxes will be allowed to reduce diesel duties for commercial users below 2003 levels if they introduce other types of charges designed to keep the overall fiscal burden stable.
ACEA calls for car tax harmonisation
ACEA, the European car manufacturers’ association, has called for car taxation to be harmonised across the EU as a circulation tax and based on CO2 emission output in order to help consumers to purchase lower-emission vehicles. The European Commission has recently proposed a Directive for such a scheme (see July 2005 EU issues update) but member states are blocking the adoption of law – primarily because they wish to maintain national control on passenger car tax. Currently 11 of the EU's 27 member states impose some linkage to CO2 emissions in their national car tax systems – however, each of the systems and tax amounts are different – and while they provide different tax rates dependant upon CO2 output, the difference in tax paid by high and low CO2-emitting vehicles is generally relatively small. ACEA claims that these variations impede the industry’s ability to sell low-CO2 vehicles as the fragmented tax market means that they cannot exploit economies of scale.
CO2 limits may impact on car industry profits
In parallel, an independent report by the credit ratings agency Standard & Poor's has claimed that the profitability and creditworthiness of the European car industry could be seriously undermined by the EU’s proposed CO2 emission limits for new vehicles (see February 2007 EU issues update). The report suggests that the profit margins on cars is already tight and given that the industry estimates that the cost of achieving the reduction will be between €600 and €3,000 per car, will clearly worsen if the new proposals are adopted. An additional concern is that any move by consumers to buy the more fuel-efficient vehicles will further damage the manufacturers' profits as the smaller cars generally carry lower profit margins than the larger models.
The Swedish Government is encouraging consumers to buy fuel-efficient cars
The Swedish government has launched a scheme to encourage private motorists to buy fuel-efficient cars. Until December 2009 consumers will get a €1,070 "bonus" if they buy a car which emits less than the EU's long-term car emissions target of 120 grams of carbon dioxide per kilometre – as a result anyone buying a hybrid or electric car will also receive a rebate. The plan is to boost sales of fuel efficient cars by up to 15 percent annually.
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The FIVA Legislation Commission members are: Horst Bruning (Chairman), Tiddo Bresters (the Netherlands), Andrew Burt , (UK), David Davies (UK), Marek Gacek (Poland), Zoltán Gárdos (Hungary), Dage Groop (Finland), Adalberto Gueli (Italy), Peeter Henning (Belgium), Maik Hirschfeld (Germany), David Hurley (UK), Winfried Kallinger (Austria), Jim Krier (Luxembourg), Victor Papadopoulos (Cyprus), Patrick Rollet (France), Zdenek Ruzicka (Czech Republic) and Carla Fiocchi (Secretariat). Andrew Turner of EPPA works with the Committee.