28 Feb 2012 1 Approval and market surveillance of two- or three- wheeled motorcycles – Impact assessment of IMCO compromise amendments Presentation by London Economics
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Feb 23, 2016
Approval and market surveillance of two- or three-wheeled motorcycles – Impact assessment of IMCO compromise amendments. Presentation by London Economics. Overview. Introduction Enhanced functional safety requirements On-board diagnostic system (OBD) Timetable for emission standards - PowerPoint PPT Presentation
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28 Feb 20121
Approval and market surveillance of two- or three-wheeled motorcycles –
Impact assessment of IMCO compromise amendments
Presentation byLondon Economics
Overview Introduction
Enhanced functional safety requirements
On-board diagnostic system (OBD)
Timetable for emission standards
Discussion
2 28 Feb 2012
Introduction
3 28 Feb 2012
Background This study is an impact assessment of amendments proposed by the IMCO Committee to
measures contained in the European Commission's proposal for a "Regulation on the approval and market surveillance of two- or three-wheeled vehicles and quadricycles“ [COM(2010) 542 final, 4 October 2010]
The IMCO amendments examined in the impact assessment cover 3 areas:1. Mandatory fitting of anti-lock braking system (ABS) 2. Mandatory fitting of On-Board Diagnostic (OBD) system 3. Expedited introduction of subsequent stages of Euro emission standards
The impact assessments build upon the comprehensive impact assessment on the Proposal compiled by the European Commission, but is narrower in focus:• The measures contained in the EC’s Proposal are taken as the baseline scenario • Only the impacts of differences between the EC’s original proposal and the IMCO
Compromise are considered
4 28 Feb 2012
Study approach Review of the impact assessment on the EC’s original proposals [SEC(2010) 1152, 4 October
2010] and underlying documentation, in particular:
• Robinson, T. L., McCarthy, M., Pitcher, M., Gibson, T. and Visvikis, C. (2009). Evaluating the impact of possible new measures concerning category L vehicles. Report to the European Commission, DG Enterprise and Industry. (‘TRL Report’)
• Ntziachristos, L., Geivanidis, S., Samaras, Z., Xanthopoulos, A., Steven, H. and Bugsel, B. (2009). Study on possible new measures concerning motorcycle emissions. Final Report – Revised Version. (‘LAT Report’)
Consultations with stakeholders: • the association of the European motorcycle industry (ACEM)• individual motorcycle manufacturers and suppliers (Honda, Triumph, Bosch) • the Federation of European Motorcyclists Associations (FEMA)• the Association for Emissions Control by Catalyst (AECC)5 28 Feb 2012
Common assumptions I A number of common assumptions are used throughout the impact assessment to ensure
consistency of the quantitative estimate for the Net Present Value (NPV) of the different impacts:
• discount rate of 4% (EC Impact Assessment Guidelines)• price inflation of 2% per year from 2012 (as in the TRL/LAT reports)• new registrations split 20:80 (constant) between new and existing types of vehicles
(based on observations from manufacturers’/dealers’ websites and consultation with ACEM)
• NPVs computed as of 2012 for the period up to 2021• average per-vehicle motorcycles prices are based on observed prices of the 50 best-
selling models (28% of the EU PTW market in 2011 )
6 28 Feb 2012
Vehicle category L1-B L3-A1 L3-A2/A3
Observations 12 17 21
Average price per vehicle €1,690 €2,837 €8,994
Common assumptions II Growth in new registrations:
• projected increases in registrations used for the EC impact assessment did not take into account the effect of the current economic crisis
• updated estimates from EMISIA foresee a decrease in registrations up to 2013• registrations never recover to current levels within the timeframe under consideration
7 28 Feb 2012
LAT Report (2009) Updated EMISIA estimates (2012)
Enhanced functional safety requirements
8 28 Feb 2012
Summary of the proposed measureStatus quo (EC proposal)
9 28 Feb 2012
Mandatory ABS for new types in categories L3e-A2/A3 from 2017
Mandatory ABS and/or CBS for new types in category L3e-A1 from 2017
2014 2015 2016 2017 2018 2019 2020
Com
mis
sion
pr
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L1e
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1
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new
existing
new
Com
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L3e
– A
2/A
3
existing
new
existing
new
2021
CBS/ABS ABS
Summary of the proposed measureProposed changes I
10 28 Feb 2012
Introduction of ABS requirement for new types in categories A2/A3 one year earlier (2016)
2014 2015 2016 2017 2018 2019 2020
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2021
CBS/ABS ABS
Summary of the proposed measureProposed changes II
11 28 Feb 2012
Introduction of ABS requirement for new types in categories A2/A3 one year earlier (2016)
Extension of the ABS requirement to existing types in categories A2/A3 from 2017
2014 2015 2016 2017 2018 2019 2020
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CBS/ABS ABS
Summary of the proposed measureProposed changes III
12 28 Feb 2012
Introduction of ABS requirement for new types in categories A2/A3 one year earlier (2016)
Extension of the ABS requirement to existing types in categories A2/A3 from 2017
Introduction of equivalent ABS requirements for category A1
2014 2015 2016 2017 2018 2019 2020
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CBS/ABS ABS
Main impacts
13 28 Feb 2012
Main impacts were evaluated qualitatively based on existing evidence
Impact Assessment
Manufacturer costs Potentially serious
Environmental costs Likely negligible
Demand effect of increased price of vehicles reduces quality of the vehicle stock Likely small in sub-categories A2/A3
Negative safety impacts Likely small except potentially for CBS substitution
Avoidance or mitigation of accidents and casualties
Significant, but more uncertain in sub-category A1
Insurance costs to consumers Potentially significant
Increased demand for motorcycles Likely small
Revenue and employment in supplier industry
Benefit dependent on multiplier effect, likely small
Additional assumptions I
14 28 Feb 2012
New registration forecasts for vehicles in categories A1 and A2/A3 are: • based on 2011 ACEM figures for new registrations of ‘motorcycles’• projected up to 2021 using EMISIA growth forecasts• assuming a split of 30:70 between A1 and A2/A3 (as in the TRL report)
Cost of ABS/CBS: • based on observed price differences (2011) between models with/without ABS• assuming limited economies of scale
- ABS: € 500- CBS: € 250
• cost figures are disputed:- European Association of Automotive Suppliers (CLEPA): €100-€150 after mandatory
introduction due to economies of scale- sensitivity tests show this affects the qualitative results only if ABS effectiveness is
very high
Additional assumptions II
15 28 Feb 2012
Effectiveness of ABS/CBS: • based on ‘estimated effectiveness of advanced braking systems for fatalities’ (‘best
estimates’ from TRL report): - ABS: 18%- CBS: 8%
Deaths per 1,000 vehicles per vehicle category and braking system: • based on casualty figures and current use of advanced braking systems from the TRL
report• assuming vehicles in categories A2 and A3 account of 80% of fatal accidents
Vehicle category L3-A1 L3-A2/A3
Deaths per 1,000 vehicles: ABS 0.14 0.24
Deaths per 1,000 vehicles: CBS 0.16 -
Deaths per 1,000 vehicles: no advanced braking system 0.17 0.30
Additional assumptions III
16 28 Feb 2012
Cost of accidents: • based on TRL report
Three scenarios for the effect of ABS/CBS where fatality is avoided:• fatality mitigated to non-injury (best case)• fatality mitigated to slight injury• fatality mitigated to serious injury (worst case)
Casualty type Valuation
Fatal €1,000,000
Serious €100,000
Slight €15,000
Results ICategories L3-A2/A3
17 28 Feb 2012
The net cost of the proposed measure is between €747 million and €1.1 billion, depending on the assumed effectiveness of ABS
95% of the cost is due to the extension of the ABS requirement to existing types of vehicles in categories A2/A3
The difference in fatality rates between vehicles with and without ABS results in 383 fatalities either avoided or mitigated due to the proposed measure over the period 2016-2021
Under the most optimistic assumptions (all fatalities are avoided, resulting in costs of €1 million avoided in each case), the total costs avoided by the proposed measure are €380 million.
Results IICategory L3-A1
18 28 Feb 2012
The net cost of the proposed measure ranges from €610 million to €761 million, depending on the assumed effectiveness of ABS
96% of the cost is due to the extension of the ABS requirement to existing types of vehicles from 2017
Per vehicle, the cost of ABS represents on average 18% of the price of a motorcycle in category L3e-A1
The difference in fatality rates between vehicles with and without ABS results in 155 fatalities either avoided or mitigated due to the proposed measure over the period 2016-2021
Under the most optimistic assumptions (all fatalities are avoided, resulting in costs of €1 million avoided in each case), the total costs avoided by the proposed measure are €153 million
On-board diagnostic (OBD) system
19 28 Feb 2012
Summary of the proposed measureStatus quo (EC proposal)
20 28 Feb 2012
2016(t+2)
2017 (t+3)
2018 (t+4)
2019 (t+5)
2020 (t+6)
2021 (t+7)
2022 (t+8)
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L1Be
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OBD I OBD II Only measures for categories L1B and L3 are analysed
New motorcycles and mopeds have to be equipped with OBD I from 2017
New motorcycles and mopeds have to be equipped with OBD II from 2021
Summary of the proposed measureProposed changes I
21 28 Feb 2012
2016(t+2)
2017 (t+3)
2018 (t+4)
2019 (t+5)
2020 (t+6)
2021 (t+7)
2022 (t+8)
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OBD I OBD II For new vehicle types in category L3e, the requirement for OBD I and OBD II will apply one year earlier: 2016 (OBD I) and 2020 (OBD II)
Summary of the proposed measure Proposed changes II
22 28 Feb 2012
2016(t+2)
2017 (t+3)
2018 (t+4)
2019 (t+5)
2020 (t+6)
2021 (t+7)
2022 (t+8)
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OBD I OBD II For new vehicle types in category L3e, the requirement for OBD I and OBD II will apply one year earlier: 2016 (OBD I) and 2020 (OBD II)
For existing vehicle types in category L3e, the requirement for OBD I will apply from 2017 and for OBD II from 2021
Summary of the proposed measure Proposed changes III
23 28 Feb 2012
2016(t+2)
2017 (t+3)
2018 (t+4)
2019 (t+5)
2020 (t+6)
2021 (t+7)
2022 (t+8)
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OBD I OBD IIFor new vehicle types in category L3e, the requirement for OBD I and OBD II will apply one year earlier: 2016 (OBD I) and 2020 (OBD II)
For existing vehicle types in category L3e, the requirement for OBD I will apply from 2017 and for OBD II from 2021
OBD II will not be required for vehicles in category L1Be
Existing types of vehicles in category L1Be have to be fitted with OBD I from 2018
Main impacts
24 28 Feb 2012
Main impacts were evaluated qualitatively based on existing evidence
Impact Assessment
Manufacturer costs Relatively small for OBD I, larger for OBD II
Costs for the aftermarket Likely small
Reduction of vehicle emissions Likely positive
Safety benefits Likely positive, but small
Revenue and employment in the supplier industry and type approval authorities
Benefit dependent on multiplier effect, likely small
Consumer benefits due to timely/efficient repairs/servicing Positive, difficult to quantify
Competition benefits in the aftermarket for L-category vehicles Uncertain
Additional assumptions
25 28 Feb 2012
Cost of OBD 1: €11 per vehicle• based on report for UK Department of Transport (2003)
Cost of OBD II: €46 per vehicle• based on industry consultation: price up to €92 • potential cost including oxygen sensors up to €100
Vehicle category* L1-B L3-A1 L3-A2/A3
Average price per vehicle (€) 1,690 2,837 8,994Cost of OBD I (€11) as % of average price 0.7% 0.4% 0.1%Cost of OBD I and II (€11+€46=€57) as % of average price 3.4% 2.0% 0.6%
Results
26 28 Feb 2012
The proposed measure results in additional net costs of €130 million (NPV) The main driver of the cost differential is the expansion of the OBD requirement to existing
types of vehicles• the extension of the requirement to fit OBD I to new types of motorcycles (category L3e)
from 2016 results in additional costs of around €2.4 million• the extension of the requirement to fit OBD I to existing types of motorcycles from 2017
results in additional costs of around €10.7 million per year• the extension of the requirement to fit OBD II to new types from 2020 and existing types
from 2021 results in additional costs of €12 million and €48 million, respectively• the extension of the requirement to fit OBD I to existing types of mopeds (category
L1Be) from 2018 results in additional costs of around €6.6 million per year• the removal of the requirement fit OBD II to new types of mopeds (category L1Be)
results in savings of around €7 million
The environmental benefits have not been quantified, but are considered small
Timetable for emission standards
27 28 Feb 2012
Summary of the proposed measureStatus quo (EC proposal)
28 28 Feb 2012
Euro 3 for new types from 2014 and for existing types from 2015
Euro 4 for new types from 2017 and for existing types from 2018
Euro 5 for new types from 2020 and for existing types from 2021
2014 2015 2016 2017 2018 2019 2020
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-L7e
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Euro 3 Euro 4 Euro 5
Summary of the proposed measureProposed changes I
29 28 Feb 2012
Removal of the Euro 3 step
2014
2015
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2020
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Euro 3 Euro 4 Euro 5
Summary of the proposed measureProposed changes II
30 28 Feb 2012
Removal of the Euro 3 step
Expedited introduction of Euro 4: 2016 for new types and 2017 for existing types
2014
2015
2016
2017
2018
2019
2020
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Euro 3 Euro 4 Euro 5
Main impacts
31 28 Feb 2012
Main impacts were evaluated qualitatively based on existing evidence
Overall impacts appear in terms of costs and environmental benefits appear limited
The impact on the competitiveness of European motorcycle manufacturers could be substantial, but is difficult to predict and to quantify
Impact Assessment
Manufacturer costs Likely moderate for Euro 4, but highly variable
Reduction of vehicle emissions Substantial for new vehicles
Increased competitiveness of European industry Potentially substantial
Revenue and employment in the supplier industry and type approval authorities
Benefit dependent on multiplier effect, likely small
Additional assumptions
32 28 Feb 2012
Cost of Euro 4: €40-€70 + engine tuning/calibration costs, which apply per engine family • based on TRL report scenario 3 (Euro 4 in the EC proposal)• potential costs of IMCO requirements for Euro 4 could be higher (LAT scenario 4, with
costs of €135-€225 + calibration costs per engine family)
Vehicle category L1-B L3-A1 L3-A2/A3
Observations 12 17 21
Average price per vehicle (€) 1,690 2,837 8,994
Cost of Euro 4 as % of average price 3.0% 1.8% 0.6%
Current emissions performance of L-category vehicles
33 28 Feb 2012
Compliance with Euro 3 and Euro 4 standards is already relatively widespread (~25%), especially for A2/A3 vehicles (based on type approval data from DE)
However, this does not take into account the durability requirement
0
100
200
300
400
NO
x (m
g/km
)
0 500 1000 1500HC (mg/km)
L3e-A2,A3 L3e-A1 L5e L7e
Euro 4 (vmax < 130 km/h
Euro 4 (vmax ≥ 130 km/h
Euro 3 (vmax < 130 km/h
Euro 3 (vmax ≥ 130 km/h
11.5%
16.4%
17.4%
21.9%
22.1%24.4%
41.6%
71.3%
87.4%
89.7%
87.5%88.0%
0%10%20%30%40%50%60%70%80%90%
100%
2005 2006 2007 2008 2009 2010
% o
f com
plia
nt t
ypes
year of approval
EURO 4 EURO 3
Emission performance by vehicle type % of compliant types (A2/A3) by year of approval
Results
34 28 Feb 2012
The proposed measure results in additional costs of €16 million, assuming an average cost of Euro 4 of €50
Manufacturers argue the cost could be 4x as high (akin to LAT scenario 4)
The environmental benefits have not been quantified, but are considered small
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