UK to adopt EU emissions regulations following Brexit transition period

19 October 2020

19 October 2020 The UK government has confirmed it will adopt European Union (EU) emissions targets for 2021 and beyond at the end of its Brexit transition period on 31 December 2020. Following a consultation, the government said that the existing target of 95g/km CO2 emissions averaged across a vehicle fleet would remain, meaning carmakers may continue with their current strategies to ensure they meet the strict regulations. Many are looking to achieve this by selling a greater number of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs). However, all must now be aware of their performance in two markets, rather than a single one. Had the UK government decided to go its own way with regards emission targets, there were fears that the supply of BEVs and PHEVs in the country would become limited, as carmakers focused on supplying Europe to meet the needs of a bigger market. The new UK rules will mirror those in the EU, including an £86 (€95) fine for each g/km above the carmakers’ respective targets multiplied by the number of vehicles registered in the year. Changing figures As the UK’s average fleet mass is heavier than that of the EU, the UK government has highlighted that the sum of individual manufacturer targets in the UK will be slightly higher than the sum of targets in the EU. ′While this may therefore appear to be a slight relaxation of standards, by retaining the average EU mass value, it replicates the same level of effort required by manufacturers as under the current scheme in the EU,’ the government said. ′This ensures that the regulation is as ambitious as existing arrangements. ′If the UK average mass value was used to calculate manufacturer targets instead, it would make targets immediately more challenging.’ The UK average mass is updated every three years and will be used in calculations from the next due update onwards. Future targets The UK will also adopt EU targets set for 2025 and 2030 for a further reduction in vehicle CO2 emissions, meaning manufacturers will have to reduce output by 15% (based on 2021 levels) in 2025, with a 37.5% reduction in 2030. European regulations (EU) 2017/1152 and (EU) 2017/1153 establish the correlation procedure to be used during the regulation’s conversion from New European Driving Cycle (NEDC)-derived targets and calculations to Worldwide Harmonised Light-Vehicle Test Procedure (WLTP)-derived targets and calculations. While the corrections needed to ensure these regulations continue to function in the UK are minor, the EU dataset will be used as a basis for the correlation between NEDC and WLTP, providing further clarity for carmakers. Super credits One of the biggest changes in the government’s consultation announcement is the lowering of the CO2 g/km threshold for carmakers to apply for ′super credits’. The credits can be used against emissions targets, and work as an incentive for manufacturers to sell more zero- and low-emission electric vehicles (ZLEVs) as they will multiply within a fleet. For 2020, one super credit counts as two vehicles, with this dropping to 1.67 in 2021, and 1.33 in 2022. In the EU, the amount that manufacturers may benefit from the use of super credits is capped at 7.5g/km cumulatively over 2020-2022. As the new regulations will only take effect from 2021, the UK government has decided to reduce the cap for two years to 3.75g/km. This received a mixed response in the consultation, some arguing that the figure was too high as carmakers may have already used their EU-mandated 7.5g cap, others suggesting it was too low, unfairly affecting those looking to bring more ZLEVs to the market in 2021 and 2022. ′It is evident via the nature of the responses that this issue is complicated,’ the government said. ′An increase in the super credits can act as an incentive for car manufacturers to put more ZLEVs on to the market, which is in line with the government’s net-zero and decarbonisation commitments. ′Equally, the government recognises super credits can artificially lower manufacturer targets, thus providing the opportunity for higher emission vehicles to be sold. There is the possibility that manufacturers will use their EU-allocated 7.5g CO2/km cap in 2020 alone, meaning the 3.75g CO2/km cap available across 2021 and 2022 will be in addition to the super credits offered in the EU regime. Whilst this is possible, due to the timelines for enforcing the regulation, it will not be known until October 2021.’