Considered in Grand Committee
My Lords, these draft regulations will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be required if the UK leaves the European Union without a deal. The regulations correct deficiencies in EU regulation 2018/956, which concerns the monitoring and reporting of CO2 emissions from, and fuel consumption of, HDVs—heavy duty vehicles—such as trucks, buses and coaches.
Emissions from the UK HDV sector made up 16% of CO2 emissions from transport in 2016. At the European level, HDVs account for about a quarter of road transport emissions. To address this, the European Commission introduced three measures. The first was the introduction, through the certification regulations in December 2017, of a new computer based tool, VECTO, which came into effect from 1 January 2019. The second measure is monitoring and reporting regulations, which the statutory instrument we are debating today is based on. The final measure of the package is a legislative proposal to set CO2 emission standards for new HDVs, which was agreed by the Environment Council on 20 December 2018.
The monitoring and reporting EU regulation—the second measure—came into force on 29 July 2018. It requires member states and HDV manufacturers to monitor certain data relating to the CO2 emissions and fuel consumption of new HDVs registered in the EU from 1 January 2019. Manufacturers must report that data to the European Commission from 28 February 2020. The Commission will hold a database, verify data quality and compile and publish an annual report. There are provisions for administrative fines for HDV manufacturers if these data requirements are not met.
The publication of data collected under the regulation will increase the transparency of HDV CO2 emissions and fuel consumption and underpin the new emission reduction targets. It will provide transport operators access to information on the performance of HDVs of different makes with similar characteristics, allowing them to make better-informed purchasing decisions. It also enables vehicle manufacturers to compare their vehicles’ performance with their competitors, providing an increased incentive for innovation. Finally, publication allows the analysis of the data, for example to assess the penetration level of certain technologies and to support the proposed future CO2 emission reduction standards for HDVs.
The regulations that we are discussing today amend the EU regulation to ensure that it continues to function correctly after exit day. Through this SI, all relevant data calculated in line with the certification regulation will be monitored, reported and published. The data will be available to all stakeholders. The main policy content, including the purpose and objectives of the current EU regulation, remains unchanged by this SI. Provisions about the monitoring and reporting timetable, data to be monitored, HDVs in scope, fines and publication of data will also remain unchanged.
The focus of these amendments is on ensuring that the EU regulation will continue to apply to HDVs registered in the UK after exit day, and to transfer responsibilities from the Commission to the Secretary of State. For example, after EU exit manufacturers will need to report data for new HDVs registered in the UK to the Secretary of State and not to the Commission, and any fines would be levied in pounds rather than euros.
Given the minor changes proposed, a formal consultation has not carried out. However, the Government have made stakeholders aware of this instrument and their plan for its introduction into UK law.
Correcting the inoperabilities within the existing EU regulation will ensure that there continues to be a functioning legislative and regulatory regime which allows for the collection and monitoring of HDV emissions data in a no-deal scenario. As set out in the Government’s strategy The Road to Zero, we are committed to,
“a future approach as we leave the European Union that is at least as ambitious as the current arrangements for vehicle emissions regulation”.
This SI supports that commitment. I beg to move.
My Lords, I presume that when Constantinople or Rome fell, there were still committees sitting somewhere in both cities looking at issues such as drainage and transport. The record should show that the House of Lords has felt it necessary to adjourn at this moment but the Committee looking at statutory instruments for exiting the European Union continues to sit. Of course, this instrument has been introduced by the Minister with her usual clarity and good sense.
We welcome the commitment by the Government to continue with the monitoring of CO2 from heavy goods vehicles. It is important to ensure that the UK is meeting its target in relation to emissions and air quality, and reporting is key to keeping us on track for reducing emissions and air pollution. However, we have to face the fact that, by leaving the European Union, we will lose its valuable oversight in ensuring that the Government comply with air quality legislation.
We have not been the greatest pathfinder in terms of environmental protection. I once worked for the water industry and, following European legislation, that industry was dragged kicking and screaming into what was probably the 19th century at the time, and I think that the same may be true of air quality. I am not sure that we will be as good at this on our own. We need to prioritise the reduction of emissions, given the thousands of deaths being caused every year and the serious impact they can have on health, particularly on that of children.
These regulations were initially conceived in tandem with targets for CO2 reduction that were suggested by the Commission and revised by the European Parliament. Will the targets set by the Government keep in tandem with any standards set by the EU Commission and Parliament?
We welcome the use of the ambitious CO2 reduction targets, but we must ensure that the industry is sufficiently supported to meet them. What are the Government doing to encourage the adoption of ZEV/LEV HDVs—I am pleased to note that, after I inquired earlier, the Minister knows what that means—be that through subsidies or improvements in the infrastructure? How will we help the industry to keep pace with developments of zero and low-emission HDVs? Do the Government envisage that the fines levied against those who fail to comply with the data gathering will be in line with those proposed by the EU, and will they keep pace with the fines to ensure compliance?
The instrument provides for further regulations to be made to set out the procedures by which manufacturers can notify the Secretary of State of errors in data. That will be key to ensuring that we have an effective and transparent system. When will those regulations be brought forward?
These regulations were brought forward by the European Union as part of a wide package of measures to ensure that Europe’s future mobility system is,
“safe, clean and efficient for all EU citizens”.
What impact could our exit from the EU have on our future plans to reduce harmful emissions?
Finally, the Minister mentioned that it was not thought necessary to go through a formal consultation process, but were environmental and health groups consulted in any way during the discussions? Some have made accusations of a lack of transparency while the regulations were considered.
Further, what continuing access will we have to EU-wide data collection and analysis in order to drive up standards and related matters? Are we not cutting ourselves off from the best practice data which helps to drive good standards?
As I say, we welcome the way in which the instrument has been presented and the work done, but it leaves these questions unanswered.
My Lords, I make my standard statement that I wish I was not here and that we were not preparing for a no-deal scenario. I fear that such a scenario would be every bit as bad as predicted. I think we must all hope and pray that it does not happen.
Turning to the generality of what the statutory instrument does, I think it obviously makes sense within the general theme of developing controls on transport-related CO2 emissions. I have only three real areas of concern, and certainly none which would cause me to oppose the statutory instrument.
First, in paragraph 2.2 of the Explanatory Memorandum, sub-paragraph c) says among other things:
“Some data is commercially sensitive and exempt from publication”.
That seems to me to be completely opposite to the concept of the statutory instrument and the regulation that it modifies. Surely, its whole concept is that all data is available to everybody in the same format, so that even small firms with one or two vehicles would have no problem in comparing manufacturers when they consider purchasing one of these heavy duty vehicles. Having said that the data is commercially sensitive—and I cannot see why that statement is there at all—if it is commercially sensitive, that would require us to be kept in line with the commercially sensitive decisions that the EU made; otherwise, the usefulness of this data-collecting exercise would otherwise be rapidly eroded. Does the department have any plans to somehow consult the European Union on what areas of commercially sensitive data it is going to suppress? I hope that the answer will be none.
I was sufficiently curious about this SI to look at regulation 2018/956. I am amazed to find that its requirements are in fact for the collection of 78 pieces of data without air drag values—which I could not understand at all but which had their own separate table. One thing that struck me was that about a third of the regulation was made up of the preamble, which is 22 paragraphs and four pages long. I think that the Minister has already alluded to some things that it says:
“The Commission’s 2016 European Strategy for low-emission mobility sets the ambition that, by mid-century, greenhouse gas emissions from transport will need to be at least 60 % lower than in 1990, and be firmly on the path towards zero”.
Does this regulation coming into English law mean that we are accepting the Commission’s low-emissions strategy targets? Is it part of our law, or is that covered somewhere in the complexity of the European Union (Withdrawal) Act? After it comes into law, where would one find it? Would that be in the Kew records, as I call them?
Finally, how would the regulation be enforced? The statements in its preamble are really statements that the Government should have regard to in the future.
My Lords, I thank noble Lords for their consideration of these draft regulations. I agree with the noble Lord, Lord McNally, about the importance of addressing the issues around air quality, and of course emissions from transport vehicles are a key part of that. Our aim as a Government is to put the UK at the forefront of the design and manufacture of zero-emission vehicles, with all new cars and vans being effectively zero emission by 2040. We recently published our strategy The Road to Zero, which sets out a clear pathway to zero emissions and an end to the sale of new conventional petrol and diesel cars and vans by 2040, with the aim that by 2050 almost every car and van will be zero emission. The aim is that at least half of new cars will be ultra low emission by 2030.
In respect of HDVs, which we are discussing today, we want to see the development and deployment of zero-emission vehicles. For example, we have agreed an industry-wide voluntary commitment from the freight industry to reduce greenhouse gas emissions by 15% by 2025, and we are working closely with the industry to develop an ultra low emissions standard for trucks and increasing the supply and sustainability of alternative low-carbon fuels. The SI we are considering today supports those aims by maintaining the current CO2 emission monitoring and reporting requirements and underpins the new regulation which is currently being finalised before being brought forward.
The noble Lord asked about fines. The fine levels will remain the same as those set out in the European regulation, albeit having been translated into pounds rather than euros. The powers in the regulation and the SI do not allow for a change to the level of the fines, so they will stay the same.
The noble Lord also asked about consultation. As I said in my opening speech, given the limited impact of this SI on industry and businesses, a formal consultation has not been carried out, but there was a full consultation when the initial EU regulation came into force. That was carried out by the Commission. It was a full, open and public consultation, which received around 100 replies, and of course environmental groups were closely involved in the formation of the regulation. However, as we are keeping things the same, we have not spoken specifically to environmental groups about this SI.
On the new CO2 emission standards regulation, the EU has provisionally agreed targets and incentives for HDVs to 2025 and 2030. They are due to be agreed by the European Parliament later this month and, once agreed, they will come into legal effect via a new European regulation. As that is yet to be finalised and adopted, how its requirements might be implemented in the UK will depend on when that is achieved, but our commitment to tackle climate change remains strong. We know that we must do more to meet our collective commitments on climate change and, indeed, the UK Government was one of those who led the way on increasing our ambition during the recent EU negotiations on emissions reduction as well as on standards for passenger and light commercial vehicles. As I have said, in the strategy The Road to Zero, the Government have committed that, as we leave the EU, we will ensure that we are at least as ambitious as the current arrangements for vehicle emissions regulations.
On data sharing, raised by the noble Lord, Lord Tunnicliffe, one of the key advantages of the EU regulation is that the data will be published and shared. Currently, the data will be reported by manufacturers in member states of the EU, and the Commission will maintain and manage its publication. It will be published annually from 31 October 2020 and the data will be openly available. Although some of it is commercially sensitive and thus exempt from publication, we expect the vast majority to be published. The commercially sensitive data exemption was agreed at European level and that is set within the regulations. It means that it will be published more in the form of a range rather than exact points. However, only data that is genuinely commercially sensitive will be withheld. We will replicate the data publication for UK-registered vehicles in the event of no deal. The content and the date of the report are set in the original EU regulations and are carried over by the withdrawal Act. That will not change, so it will still be possible to use UK data as a comparison against EU data—aside from the data that will be exempted for commercially sensitive reasons, and that will be the same for the EU and the UK. All the data will be openly available, and the EU 27 plus the UK will be able to be looked at side by side.
The preamble to the EU regulation provides background only and its content is not legally binding. The entire regulation will be carried over into UK law, but the targets set will be met through future regulations. The content and the preamble will stay, but specific targets will be set through future legislation.
I think that I have answered all the questions. I will go through Hansard and check. If I have not answered any questions, I will follow up on them in writing.
This SI is essential to ensuring that we maintain control of HDVs registered to travel on UK roads and that the system to support that continues to function from day one after EU exit. It will help us to reach our climate change goals and ensure that we do all we can to improve air quality.