For EU, Devil in Details of Post-Dieselgate Reforms

BRUSSELS – A proposal to have European Union member countries contribute to a fund out of which private agencies would be paid to test new vehicles could face a challenge in the European Parliament.

The proposal was made in January by the European Commission, the EU’s executive branch, amid sharp criticism of the EC’s type-approval system prompted by Volkswagen’s use of software designed to produce misleadingly favorable emissions-test results in the U.S.

An aide to Dan Dalton says the British Conservative member of the European Parliament wants to amend the plan, which is meant to eliminate the direct payment of fees to testing agencies by automakers. Critics say that practice lacks oversight and poses potential conflicts of interest.

As the “rapporteur” coordinating Parliament’s votes on the issue, Dalton is drafting the legislative body’s position on the proposal, including amendments, with a preliminary report due in July.

During a May 24 discussion of the proposal by Parliament’s internal-market and consumer-protection committee, Dalton pressed the EC about its plan to end direct payments to private test houses, freeing them from potential manufacturer pressure to approve cars in return for maintaining contracts. Test labs instead would be paid out of the pooled EU fund at rates determined by member states.

The proposal also suggests more stringent performance criteria for these technical services, which would be regularly and independently audited.

Tilt Over Level Playing Field

Joanna Szychowska, who heads the EC’s automotive and mobility industries unit, says the switch from direct payments is meant to create a level playing field between different facilities and member states, with “competition based on quality rather than price.”

The Dalton aide says the MEP “will be looking to submit amendments in the fees areas,” possibly including a levy to fund market surveillance.

The ACEA, the European automakers group, is concerned about the national fees idea, warning in an April position paper that differences between charges imposed by member states “may lead to distortions of the level playing field” in the common market.

An aide to French MEP Pascal Durand, a Green Party member, praises the EC’s fee proposal, telling WardsAuto, “We particularly welcome that the financial link between manufacturers and test houses is going to be broken” by lowering the risk of conflict of interest.

Dalton also is eyeing an amendment challenging the EC’s proposal that type-approval certificates be valid for five years. “His preference would be for a longer validity on type approval to reflect industry timelines and lifecycles,” the aide says.

Suspicious Minds

Danish Socialist MEP Christel Schaldemose questions whether the EC has “built enough suspicious minds” into the proposed type-approval system, particularly for test houses and regulatory agencies.

Schaldemose blames the VW Dieselgate scandal on a lack of skepticism toward the tests, despite evidence non-governmental organizations flagged discrepancies between laboratory results and on-road emissions.

Pointing to test houses as well as national regulatory bodies and the EC’s Joint Research Center that would oversee the proposed new system, Schaldemose asks, “Have you made it clear that they need to be suspicious enough?”

Szychowska replies: “I think we are pretty suspicious. We want to ensure the vehicle is checked across its entire life, not just before it is put on the market,” referring to post-market emissions checks included in the Commission proposal.

In its April paper, ACEA says member states that do not process type approvals still must perform market surveillance. The trade group also calls for a plan that distributes costs across the EU fairly and “provides budgetary predictability for vehicle manufacturers.”

The ACEA also argues testing-facility availability, quality and efficiency should be maintained. “Free choice of technical service for type approval is paramount to maintain a functioning system and to avoid distorting competition between EU and non-EU countries,” it adds.

German Socialist MEP Evelyne Gerbhardt suggests a proposed fine of €30,000 ($33,600) per car for type-approval cheating “doesn’t seem particularly high.” Szychowska, citing the comparable fine in the U.S. of $37,500 and the millions of cars affected by Dieselgate, says, “We think this is very proportionate and dissuasive.”

Approved vehicles found to be noncompliant in areas deemed not critical would be treated more leniently through “modulable” fines, she adds.

Lax in Luxembourg?

Czech Liberal MEP Dita Charanzová argues giving power to member states to set assessment fees ignores evidence some countries’ existing approval criteria are relatively lax, encouraging automakers to “shop” for type approval where it is easiest to obtain.

Despite having no auto industry or test facilities of its own, Luxembourg hands out the second-most type-approval certificates in the EU, Charanzová says. Malta, also with no auto industry, hands out the sixth-most, she adds.

A Parliament official tells WardsAuto Malta mainly clears car parts imported from China and other Asian nations, and could use test houses in Asia provided they were accredited, but there is no way to verify this.

The parliamentary consumer-protection committee likely will adopt a position on the proposal before year-end, allowing lawmakers to start negotiating with the EC and EU nations in the Council of Ministers on the regulation’s final version set to take effect in 2017.