LONDON -- The UK plans to copy and paste European Union regulations on corporate average carbon dioxide targets for cars and vans when the country fully leaves the EU at the end of December.
The British government has published a consultation document setting out its plans and proposing fixes to continuity problems as it shifts the EU's regulations to reduce CO2 emissions to a UK regulatory regime.
The proposals will maintain a regulatory regime "as close to business as usual (BAU ) scenario for manufacturers as possible,” the consultation document says.
The change will come into effect on Jan. 1 2021 when the transition period covering the UK's exit from the EU ends.
Britain voted to leave the EU in 2016 in part so the country could deviate from EU regulations if it wanted to, but automakers have said they do not want a two-tier system whereby they would have to comply with two sets of regulations.
“The government really didn’t have a choice but to keep the regulations,” David Bailey, Professor of Business Economics at the UK’s Birmingham Business School, said. “Manufacturers don’t want a different set of regulations, and having the same set makes sense to encourage to them sell electric cars in the UK.”
The UK government was further restricted in what it could change because the EU CO2 regulations stay the same in Northern Ireland, which continues to follow EU Single Market rules under the terms of the EU Withdrawal Agreement signed by Prime Minister Boris Johnson.
The government needs to encourage the sales of electric cars if it is to enact its proposed plan to ban the sale of all cars with internal combustion engines, including plug-in hybrids, by 2035.
All aspects of the EU regulation are kept in the consultation document, including the super-credits for selling ultra-low emissions vehicles in 2021 and 2022.
Automakers will face fines of 86 British pounds instead of 95 euros for every gram of CO2 the manufacturer exceeds over the limit, which is currently an average of 95 grams per kilometer.
Individual automaker targets will still be based on the average weight of vehicles sold, but instead of using the weight of vehicles sold in the UK, the system will continue to take the average of vehicles sold across the EU.
“The UK fleet is heavier than the EU27’s and therefore moving from the EU fleet average to a UK specific value would immediately make regulatory targets more demanding for all manufacturers,” the consultation document said.
The average weight of cars sold in the UK in 2018 was 1,466kg, against an EU average of 1,420 kg, according to European Union data.
The UK will also keep the EU’s derogation system that allowed automakers that sell under 300,000 models annually in Europe to negotiate more relaxed targets.
The target will be amended to take to account what percentage of the automakers’ EU sales occur in the UK, for example if 50 percent of a manufacturers’ EU sales are in the UK then the UK threshold is 150,000.
The change means Jaguar Land Rover will continue to take advantage of its softer targets in the UK, where last year almost half its 228,626 sales in the EU plus EFTA region occurred.
JLR’s continued use of the derogation in the UK could raise objections among other automakers who don’t currently have a derogation but have a similar share of sales. JLR for example had a market share in the UK of 4.87 percent last year according to data from UK automakers’ association the SMMT, while Toyota, which doesn’t qualify for an EU derogation, had a share of 4.55 percent.
The UK government says in the document that “over time, it may become more appropriate to move to fixed thresholds for a UK only derogation”.
The same equation based on the percentage of UK sales within EU sales applies to automakers selling under 10,000 vehicles, which are given separate targets within the EU system.
Under the EU system anyone registering under 1,000 vehicles falls out of the scope of the regulations and that threshold continues unchanged in the UK, potentially helping the country’s smaller automakers who otherwise breech the 1,000 threshold with European figures taken into account.
The UK plans to keep the EU’s target of a 15 percent reduction of CO2emissions for cars and vans from 2025, and a 37.5 percent reduction for cars and a 31 percent reduction for vans by 2030, according to the proposed plans.
Automakers can form pools, as they do now, “provided that their agreements are in compliance with the Competitions Act 1998,” the consultation document said.