UK: Clean Road Vehicles - Lifetime Costs In Public Procurement Agreed

Last Updated: 12 February 2009
Article by Paul Sheridan and Olivia Quaid

Recent announcements of President Obama requesting an urgent review of a policy preventing US states from imposing stricter vehicle emissions standards and the ordering of the enforcement of existing fuel-efficiency law co-incide with continued EU efforts to spearhead transport targeted regulation in order to effect change. This update relates to specific changes in public purchasing of road transport vehicles.

In July 2008 we provided details of the European Commission's (the "Commission") revised proposal for a Directive on the Promotion of Clean and Energy Efficient Road Transport Vehicles (COM(2007)817) (see link to previous article here). The revised proposal aimed to introduce energy consumption, CO2 and pollutant emissions as mandatory award criteria in the costs of the public purchasing of road transport vehicles.

To view the article in full, please see below:



Full Article

Recent announcements of President Obama requesting an urgent review of a policy preventing US states from imposing stricter vehicle emissions standards and the ordering of the enforcement of existing fuel-efficiency law co-incide with continued EU efforts to spearhead transport targeted regulation in order to effect change. This update relates to specific changes in public purchasing of road transport vehicles.

In July 2008 we provided details of the European Commission's (the "Commission") revised proposal for a Directive on the Promotion of Clean and Energy Efficient Road Transport Vehicles (COM(2007)817) (see link to previous article here). The revised proposal aimed to introduce energy consumption, CO2 and pollutant emissions as mandatory award criteria in the costs of the public purchasing of road transport vehicles.

On 22 October 2008 the European Parliament adopted a legislative resolution amending the revised proposal following a compromise with the Council of the European Union. As a result, within 18 months of the Directive becoming law (anticipated by around September 2010), operational lifetime energy and environmental impacts must be taken into account either by (i) setting technical specifications for energy and environmental performance or (ii) by including energy and environmental impacts in the purchasing decision as award criteria. This article covers the key changes.

The Directive, once implemented, could have a substantial impact on the vehicle market and bring about a fundamental change in approach to procurement in this area.

Key changes

  • The text adopted by the European Parliament contains an express recital stating that the aim of the Directive is to stimulate the market for clean and energy efficient vehicles. The Directive aims to influence the market for standardised vehicles produced in larger quantities such as passenger cars, buses, coaches and trucks by ensuring a level of demand which is sufficiently substantial to encourage manufacturers and industry to invest in and further develop vehicles with low energy consumption, CO2 emissions and pollutant emissions
  • The Directive covers road transport vehicles purchased by:-
  • entities or authorities insofar as they are under an obligation to apply procurement procedures set out in Directives 2004/17/EC (procurement procedures of entities operating in the water, energy, transport and telecommunications sectors) and 2004/18/EU (award of public works contracts, public supply contracts and public service contracts)
  • operators for the discharge of public service obligations under a public service contract within the meaning of Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on public passenger transport services by rail and by road in excess of a threshold to be defined by Member States

In other words the Directive applies to road transport vehicles purchased by contracting authorities or entities, whether public or private, where particular procurement procedures apply, and road transport vehicles bought for performing particular passenger transport service contracts.

  • "Road transport vehicles" encompasses passenger cars, light commercial vehicles, heavy goods vehicles and buses
  • Vehicles designed and constructed for special use including for example civil defence, armed services, fire and public order services and port or airport facilities which are not subject to type or individual approval may be exempted
  • In order to properly take account of energy consumption, CO2 emissions and pollutant emissions, contracting authorities, contracting entitles and operators covered by the Directive must either:
  • apply technical specifications for energy and environmental performance in the documentation for the purchase of road transport vehicles on each of the impacts or
  • include energy and environmental impacts in the purchasing decision as award criteria
  • Both options are intended to ensure the monetisation of impacts with harmonised methodology. A Commission example illustration of how operational lifetime costs would be applied to the purchase of vehicles with emission standards EURO IV (bus) and EURO 4 (car) is as follows:-

Click here

to view an example.

  • The fuel consumption will be counted in units of energy consumption per kilometre. These units are set out in the Directive
    The lifetime cost of the energy consumption, CO2 emissions and pollutant emissions must take account of any mileage already performed
  • The costs related to CO2 emissions are to be factored in at a price of 3-4€cents per kg or the EU Emissions Trading System market price whichever is higher rather than 2€cents/kg previously proposed by the Commission. A recital to the Directive states that the Commission , assisted by a Committee should, be able to adapt these values to inflation and technical progress of the data for the calculation.
    The range for the energy content of natural gas/biogas has been amended to 33-38 MJ/NM3
  • Where monetisation takes place values ascribed for calculating emissions costs are minimum values and authorities may use up to twice the stated value
  • The Commission must facilitate and establish exchange of knowledge and best practices between Member States for the promotion of the purchase of clean and energy efficient vehicles by those affected by the Directive
  • The Commission is obliged to prepare a report on the application of the Directive and the actions taken by Member States to procure the purchase of clean and energy efficient road transport vehicles. The report must compare the nominal and relative figures of vehicles purchased corresponding to the best market alternative in terms of lifetime energy and environmental impacts to the overall market and estimate how the options have affected the market, the need for further action. The report must include proposals as appropriate
  • Within 2 years of implementation the Commission must examine the ways of factoring lifetime costs into the purchase of vehicles pursuant to the Directive and evaluate the methodology regarding monetisation and propose appropriate adjustments where necessary
  • Member States are to implement the Directive into national law 18 months after the Directive enters into force. The Directive is expected to enter into force around March 2009

Other changes rejected

A number of suggested changes have not been implemented such as the requirement for manufacturers of road transport vehicles to provide indicative data for total lifetime energy consumption, CO2 emissions and pollutant emissions when the vehicles are offered for sale or for the Commission to develop a European Climate Protection Fund to encourage the purchase of clean and energy efficient road transport vehicles by procuring authorities and operators

Expected impact

The European Parliament expects the Directive to create sufficient demand to prompt industry to invest in and develop clean vehicles. On a cost benefit analysis the Commission has identified a net gain from savings in energy consumption and lower overall lifetime costs. There is also a perceived benefit in a potential decrease in the cost of public transport and in the cost of health care and climate change mitigation.

The Directive may not only impact the new vehicle market but also the second hand market and asset valuation given that vehicles which have higher energy consumption or emissions may appear less attractive on resale or hire.

Next steps

The Directive is expected to become law around March 2009.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 11/02/2009.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.