Dawn of a new era for road safety and air quality?

1 September 2020 should mark the day when the European Union finally draws a line under the 2015 “Dieselgate” scandal which rocked the European motor industry, and in particular, the Volkswagen Group (‘VW’). For those with short memories, the scandal concerned the revelation that nearly half a million diesel cars sold in the USA by VW over the period 2009-2015 had been fitted with an ‘emissions-compliance’ defeat device.  The device enabled the cars to ‘defeat’ standard emissions testing and appear far greener than they actually were.  It quickly emerged that such trickery was not confined to VW, and nor were sales of such vehicles restricted to the USA!  The revelations not only damaged the financial performance of the European motor sector, they also enraged many consumers who had bought diesel motor cars in the mistaken belief that they were ‘cleaner’ than their petroleum counterparts.  These consumers were also left with a car that was virtually unsaleable other than at a ridiculously low price – a situation which was not improved by panicked manufacturers aggressively marketing new cars, which had already been produced, at knockdown prices.

The scandal resulted in the European Commission (the ‘Commission’) developing a new set of ‘type approval’[1] rules which were adopted by the European Council and the European Parliament in 2018. The “EU Regulation on the approval and market surveillance of motor vehicles” (the ‘Regulation’) was adopted in May 2018 and takes effect from 1 September 2020.  The Regulation improves the quality and independence of type approval and testing, increases checks of cars already on the EU market and, strengthens EU oversight of the entire system.

The Regulation has three key strands:

  1. Independence and quality of testing before a car can be placed on the market. Technical services which perform testing and inspections of new car models will be independently audited both to obtain and to maintain their approved status. National ‘type approval’ bodies will be subject to peer review to ensure uniform standards apply across the EU.
  2. Checks on cars already on the market. Member States are now obliged to regularly test a minimum number of cars that are already on the market and for sale at dealerships.  If they find any ‘non-compliant’ vehicles they can act directly to take safeguarding measures.  Previously, only the authority which issued the ‘type approval’ could take such action.
  3. European oversight. The Commission now has the authority to perform compliance and conformity checks on vehicles both in the laboratory and on the road. Where it finds that a manufacturer is in breach of ‘type approval’ legislation, e.g. ‘defeat devices’ are installed or fake declarations have been made, it can issue an EU wide vehicle recall and impose fines of up to Euro 30,000 per vehicle.  Previously, only the national authority which issued the original ‘type approval’ could take such action.  Remedial action must involve no cost to the consumer and people who have ‘fixed’ their vehicle at their own cost prior to any recall must be reimbursed their costs.

Whilst the headlines associated with the Regulation have focused on emissions standards, it should be noted that it is designed to ensure that before issuing any ‘type approval’ the national authority must also ensure compliance with safety rules (installation of lights, braking performance, stability control, crash tests) and production requirements (of individual parts and components such as seats, seat belts and airbags).  The fines for breaching the Regulation are severe, and as such, they should keep motor manufacturers in check.  The net result could be, as intended by the Commission, a phased but steady increase in both vehicle safety on European roads in and in air quality across the continent as older vehicles are gradually replaced by the new.

For more information please speak with your usual contact at Elias Neocleous & Co LLC.