Explanatory Memorandum to COM(2023)441 - Accounting of greenhouse gas emissions of transport services - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)441 - Accounting of greenhouse gas emissions of transport services. |
|---|---|
| source | COM(2023)441  |
| date | 11-07-2023 |
Contents
- - Reasons for and objectives of the proposal
- To properly address its objectives, the initiative has been structured into seven main policy areas, which are described below:
- - Consistency with existing policy provisions in the policy area
- - Consistency with other Union policies
- As part of preparing the proposal, other consultation activities included:
- The considered policy options were the following:
Greenhouse-gas emissions accounting is a measure used in various economic sectors to generate greenhouse gas emissions data from specific activities of businesses and individuals. In the transport sector, transparent information on emissions of transport services empowers customers to make well-informed choices and influences business decisions of entities organising and providing these services on the market. Making reliable data on emissions available can encourage sustainability, innovation and behavioural change towards sustainable transport options. The benefits and added value of emissions accounting are demonstrated by the results of existing emissions monitoring and reporting schemes in the EU and beyond1.
Unlocking the potential of greenhouse gas emissions accounting in transport requires that the underlying calculations are comparable and accurate, addressing the specific characteristics of a particular transport service. Therefore, emissions should be quantified based on a scientifically sound, detailed and harmonised methodological approach.
However, there is currently no universally accepted framework for greenhouse gas emissions accounting of transport services2. To quantify those emissions, transport stakeholders can choose among different standards, methodologies, calculation tools and multiple emissions default values databases and datasets. This often leads to a significant discrepancy in results that compromises the comparability of greenhouse gas emission figures on the market, and provides inaccurate and misleading information on a transport service’s performance. It also risks selecting an emissions calculation method and default data based on what is more beneficial for an individual entity. This creates conditions for greenwashing3, and can give wrong incentives to users. The lack of a standard framework is generally recognised and has resulted in several attempts by industry or national governments4 to produce one. However, none of these efforts have led to harmonising greenhouse gas emissions accounting methods or consistently using greenhouse gas data at Union level.
The transport sector also sees the lack of reliable and comparable information on greenhouse gas emissions of transport services as an issue. 80% of respondents to the open public consultation recognised the prevalence of this problem and considered it significant or very significant. Similar views were noted when analysing the responses to this initiative’s call for evidence, its targeted stakeholder survey and discussions at the workshop.
In addition, despite the growing interest of transport stakeholders in greenhouse gas transport performance data, the overall uptake of greenhouse gas emissions accounting of transport services is still very limited. Transport service users do not usually obtain accurate information on the performance of transport services, and transport service organisers, including operators, do not systematically calculate their greenhouse gas emissions. Furthermore, the majority of those who calculate emissions tend to do so at company or vehicle level and are unable to generate data on the greenhouse gas emissions of a transport service5. However, only the latter type of information is relevant to effectively support and influence transport service users’ decisions. It is estimated that almost 600,000 entities in the EU transport sector measure their greenhouse gas emissions (2020), but only 21,660 of these do it at the disaggregated level needed to produce greenhouse gas emissions data of transport services. This is only 1.2% of approximately 1.8 million entities performing transport operations on their own6. The low uptake of greenhouse gas emissions accounting is mainly observed among micro-, small- and medium-sized enterprises (SMEs)7, which represent the vast majority of entities operating in the EU transport market.
The low uptake of greenhouse gas emissions accounting of transport services was also highlighted as a problem in different consultation activities. In the open public consultation, 45 out of 56 organisations (80%), 61 out of 70 individuals (87%), and 60 out of 65 online customers (92%) stated they are not given enough information when planning/organising a journey, shipment or choosing the delivery of a package. In addition, 26 out of 31 (84%) respondents to the targeted survey considered current level of uptake as low or very low. On greenhouse gas emissions accounting, the targeted survey showed that 78% of respondents (29 out of 37) already measure their emissions in some way, but only 35% (9 out of 26) of those that measure do it at transport service level. However, this finding may not be fully representative of all entities concerned, as the real number of companies calculating transport services greenhouse gas emissions appears to be significantly lower.
The EU has recognised the need for a harmonised methodological framework for accounting emissions of transport services. Between 2011 and 2019, there were two consecutive EU-funded projects – Carbon Footprint of Freight Transport (COFRET)8, under the seventh framework programme (FP7), and Logistics Emissions Accounting & Reduction Network (LEARN)9 under Horizon 2020. These projects addressed calculating, reporting and verifying greenhouse gas emissions from transport services, with the aim to develop a global methodology. Such efforts supported setting up and developing an industry-led Global Logistics Emissions Council10 framework, and put in place a coordinated action to draw up a comprehensive and tailor-made International Organization for Standardization (ISO)11 standard. ISO published this new standard ISO 14083:2023 in March 2023. Subsequently, CEN transposed it as an equivalent European standard EN ISO 14083:2023.
This initiative aims to overcome the barriers that prevent harmonising the measurement and calculation of greenhouse gas emissions and facilitate its uptake in the transport sector. It sets out a common regulatory framework for greenhouse gas emissions accounting of transport services across the entire multimodal transport chain, thus creating a level playing field between modes, segments, and the Union’s national networks. The increased transparency on the performance of various services should lead to incentives for market players to reduce greenhouse gas emissions and make transport more efficient and sustainable.
This Regulation does not make greenhouse gas emissions reporting mandatory. It is designed to support other, specific measures taken by industry and public authorities to facilitate the green transition. These measures include establishing greenhouse gas transparency clauses in transport contracts, providing information on greenhouse gas emissions of a given service to passengers, or setting climate-related criteria for green procurement procedures and green transport programmes. They may be implemented through separate, individual arrangements, in particular in authority-to-business and business-to-business perspective, however they must always comply with the specific rules on calculating, substantiating and communicating greenhouse gas emissions of transport services as laid down in this initiative.
At this point it should also be noted that although this Regulation addresses well-to-wheel greenhouse gas emissions stemming from both vehicle use and vehicle energy provision12, the transport sector does create other adverse effects. This includes air pollutant and noise emissions and subsequent health and environmental impact. These consequences are out of scope of the proposed initiative.
To properly address its objectives, the initiative has been structured into seven main policy areas, which are described below:
- Methodology – establishing a common reference methodology ensuring that calculating greenhouse gas emissions of transport services is performed in a standardised way across the entire transport sector.
The reference methodology is a key part of the initiative and therefore was given particular attention in the preparatory work. A number of approaches were analysed, diverging in terms of the scope and method of greenhouse gas emission calculation and the allocation of emissions to transport services. As a result, the new ISO standard 14083:202313 was chosen as being the most relevant and proportionate in achieving the stated objectives at this point in time. ISO 14083:2023 is a step forward towards laying down a common set of rules and greenhouse gas emissions calculation principles for transport operations, where the quantification is carried out well-to-wheel. Since this standard is recognised worldwide, it can be used to generate data on greenhouse gas emissions for international transport chains, thus creating the opportunity for global alignment.
On the other hand, the Regulation should account of the potential future development of the standard and be able to address flexibility that is embedded in its certain components. Therefore, future revisions and amendments to the standard should be closely monitored, scrutinised and, in justified cases, excluded from the scope of this initiative, to ensure the consistency of the reference methodology with the objectives of this Regulation and other applicable Union law. Furthermore, the need for additional adjustments and clarifications should be considered, especially if using this standard creates a risk of undue imbalances resulting from the calculation of greenhouse gas emissions of transport services in specific transport segments.
- Input data and sources – providing a harmonised approach to input data, by creating incentives to use primary data, permitting modelled data, increasing the reliability, accessibility and appropriateness of default values, and mitigating discrepancies between national, regional and sectoral datasets.
Without a common approach to input data, greenhouse gas emissions calculation results will continue to be inconsistent and incomparable even when using the same reference methodology. This issue featured prominently across all stakeholder consultation activities. Different types of input data, including primary and secondary data, are required or used to calculate greenhouse gas emissions of transport services. Using primary data leads to the most reliable calculation results. However, these data type are often unavailable or prohibitively expensive for certain stakeholders, especially SMEs, so using secondary data should also be considered. To ensure comparable and accurate greenhouse gas emissions calculation outputs, the use of primary data should therefore be recognised and prioritised, and secondary data should be based on credible estimations and scientifically proven and reliable databases and datasets. The secondary data may be determined using default values or models.
Using default values should result in accurate and reliable information on the greenhouse gas emissions of a specific transport service. Therefore, these values should be developed in a neutral and objective manner, and come from trusted sources. Default values are derived from literature and other publications, and include greenhouse gas emission intensity values and the greenhouse gas emission factors (depending on the source referred also as energy or fuel emission factors).
Default values for greenhouse gas emission intensity relate specified transport performance (activity) data with greenhouse gas emissions, and are used to generate information on emissions of a certain transport service. These values should therefore be based on parameters that closely resemble those of a particular service. To ensure comparable emissions calculation results, a core EU database of these values should be created. However given their high sectorial, national and regional specificity, other relevant databases and datasets run by third parties should also be allowed, on the condition that they undergo a specific quality check at EU level.
Greenhouse gas emission factors relate the amount of energy used when performing an operation to well-to-wheel greenhouse gas emissions. These factors are necessary inputs in calculating the well-to-wheel greenhouse gas emission intensity of a given transport service. Determining greenhouse gas emission factors based on a uniform methodology and trusted sources results in acceptable levels of variability. Therefore, a central EU database of greenhouse gas emission factors should be developed, taking due account of relevant Union’s regulatory initiatives and other reliable sources, including revised Renewable Energy Directive (REDII)14 (once adopted), and a dedicated topic of the Horizon Europe programme15.
A neutral and competent EU body should develop and maintain the EU databases of default greenhouse gas emission intensity values and greenhouse gas emission factors. This body should also carry out technical quality checks of third-party external databases and datasets. The European Environmental Agency (EEA) is considered to be the most appropriate body to provide the necessary assistance in implementing this part of the Regulation properly. Where relevant, the Agency’s work may rely on contribution from and be supported by other sectorial EU bodies, such as the European Aviation Safety Agency (EASA) that will be entrusted in implementing the environmental label for flights in the context of ReFuelEU Aviation initiative16.
Modelled data combine primary data with certain greenhouse gas emission-relevant parameters for a specific transport or hub operation. These parameters should be representative, accurate, and strictly based on the reference methodology’s requirements. This will result in the best possible view of the actual greenhouse gas emissions of a transport service.
- Applicability – determining the right policy instrument (from mandatory to voluntary) to effectively apply the initiative on the Union market.
Weighing the effectiveness of the instrument against the possible administrative burden and costs for the transport sector, a binding opt-in approach emerged as the most appropriate one. It imposes the requirement to use the common framework only when an entity providing or organising a transport service chooses or is mandated by other means17 to both calculate and disclose greenhouse gas emissions data for this service. This approach is of particular relevance for SMEs that represent the vast majority of companies in the transport sector, and very often do not have enough capacity to measure and calculate greenhouse gas emissions from their transport activities. However, this approach guarantees the regulatory predictability and level playing field for greenhouse gas emissions accounting among those who publish or share emissions information. Over time this should result in a gradual market push towards the increased uptake of the framework by the transport sector.
- Greenhouse gas emissions output data and transparency – setting appropriate metrics for generating and sharing the greenhouse gas emissions data, and laying down common rules on the communication and transparency of emissions accounting results.
Harmonised metrics for emissions output data are necessary to ensure consistent measurement units when disclosing data on greenhouse gas emissions of transport services between all parties in the transport chain and beyond. Common metrics enable clear communication from data providers and an accurate understanding by data recipients. This is vital for correctly comparing greenhouse gas emissions data on the market and supporting transport users’ choices. Furthermore, entities calculating and disclosing greenhouse gas emissions data need to establish and maintain evidence of the calculations carried out. Such evidence should be made available upon the request of a competent authority or any other third party based on separate, individual arrangements, such as those stemming from specific legal requirements or business-to-business contractual clauses. These provisions are primarily intended to ensure trust in the reliability and accuracy of the disclosed data.
- Implementation support – providing for a harmonised implementation of this initiative in different transport segments.
Implementation support ensures that the Regulation’s rules are interpreted and applied in the same way by bodies operating in different segments of the transport chain across the EU. It includes, in particular, general guidelines clarifying and explaining certain parts of the initiative to the different stakeholders. This will help them implement the rules in their usual business practices. This can include guidance on data requirements, data management and sharing, emissions calculation processes and verifying conformity. The Commission reserves its exclusive right to draw up these general guidelines based on its assessment of the transport sector’s needs and the added value that this guidance would bring to the market.
- Conformity – ensuring a common, proportionate and reliable verification system for the data on greenhouse gas emissions of transport services and for the underlying calculation processes.
A verification system for the GHG emissions data and the underlying calculation processes is another need that was strongly voiced during the stakeholder consultations. The impact assessment has confirmed this need and shown that a properly designed verification system may substantially increase the trust of the transport sector in the GHG emissions data and improve the uptake of GHG emissions accounting in general. However, the requirements associated with verification processes often lead to additional costs and administrative burden for the sector. Therefore, attention needs to be paid not to produce more red tape that would counterproductively prevent the use of the common framework for accounting greenhouse gas emissions in wider business practices. This is the reason why this proposal only requires large entities to verify their compliance with the rules set out in this Regulation, while allowing SMEs to use the verification voluntarily.
- Complementary measures – developing and using technical calculation tools
The availability of technical calculation tools (such as web applications, models and software) is a useful enabler to facilitate the uptake of the common emissions accounting methodology in the transport sector. External commercial and non-commercial calculation tools offered for the broader use on the market can effectively support this initiative’s purpose. They provide suitable features for automatically calculating emissions and offer enough flexibility for quick adjustments to calculation formulas and data if required. The use of these tools must, however, ensure compliance with requirements set out in this Regulation, especially regarding the use of the common reference methodology, modelling parameters and the appropriate set of default values. Therefore, the use of external calculation tools should be allowed, on the condition that these are formally certified.
Transport18 accounted for 26% of all EU greenhouse gas emissions in 2020, with road transport alone representing around 20% of the total19. Therefore, this initiative has to be seen in the context of the European Green Deal20, and the European Climate Law21, which set out the steps towards climate neutrality by 2050.
The Sustainable and Smart Mobility Strategy22, published on 9 December 2020, lays the foundation for how the EU transport system can achieve this change (including a 90% cut in transport greenhouse gas emissions by 2050) and be delivered by a smart, competitive, safe, accessible and affordable transport system. Apart from targeted actions to make individual transport modes more sustainable, the strategy also refers to incentives for choosing the most sustainable transport options, within and across the modes. The incentives may be of both an economic and non-economic nature, including providing better information for users and increased transparency of the greenhouse gas performance of transport services. This is why the strategy announced plans23 to “establish a European framework for the harmonised measurement of transport and logistics greenhouse gas emissions, based on global standards, which could then be used to provide businesses and end-users with an estimate of the carbon footprint of their choices, and increase the demand from end-users and consumers for opting for more sustainable transport and mobility solutions, while avoiding greenwashing”. This Regulation is therefore an appropriate policy response.
There have been already certain policy considerations on emissions accounting of transport services. In the 2011 White Paper on transport24, the Commission presented a vision for the future of the EU transport system. It set out a policy agenda to address the future challenges, notably maintaining and developing transport and considerably reducing the carbon footprint of transport and logistical operations. One of the specific initiatives designed to help achieve these goals was the development of common EU standards to estimate the carbon footprint of passenger and freight transport services. The aim was to provide a tool to companies wishing to procure less environmentally harmful services and to passengers wanting to travel in a more environmentally sustainable way. These plans triggered further action in this policy area, including the research project LEARN, mentioned above.
As a cross-cutting initiative for all transport modes, this Regulation creates synergies with and complements other EU regulatory action on emissions reduction frameworks, fuel and emissions standards, better transparency for users and stronger consumer rights. These links with other policies concern, in particular, the use of input data and emissions accounting methods, as well as the requirements for unambiguous communication on greenhouse gas emissions of transport services.
There are major interlinkages with regulatory action on collecting information on emissions and environmental reporting. Under the EU monitoring, reporting and verifying (MRV) framework25, maritime vessels above 5 000 GT sailing to and from EU ports have to monitor, verify and report annually their CO2 emissions based on the fuel burnt while carrying out their activities26. In aviation, the European Union Emissions Trading System (EU ETS)27 requires airlines to calculate CO2 emissions per flight and to submit an emissions report every year. While EU MRV and EU ETS serve different objectives and do not lead to accounting greenhouse gas emissions of specific services, they may be seen as complementary to this Regulation, especially on the collection of the actual fuel burnt data.
The consistency of the input data for quantifying greenhouse gas emissions is also addressed as part of the emerging EU initiatives on the uptake of renewable low- and zero-carbon fuels. This initiative includes a thorough reflection of the Fit for 55 package28, with a particular reference to the Commission’s proposals for the revised Renewable Energy Directive (RED II) and the new FuelEU maritime initiative29. The revised RED II and FuelEU maritime will specifically provide sets of default values for greenhouse gas (energy) emission factors. These will be estimates of greenhouse gas emissions based on the amount of energy used applying the well-to-wheel approach30. All these aspects are highly relevant for the uniform implementation of this initiative on the Union market. This implementation will however take also account of other legislative frameworks, such as CO2 performance standards for new heavy-duty vehicles31 and light duty vehicles32, Eurostat statistical guidance for environmental economic accounts33, as well as a planned EU action on the access to in-vehicle generated data34. In this respect, possible synergies may be related for instance to the collection of fuel consumption data, and the establishment of a common environment of default values.
Information on greenhouse gas emissions calculated and collected when applying rules set out in this Regulation, may be used for corporate reporting, such under Corporate Sustainability Reporting Directive (CSRD)35, and the related European Sustainability Reporting Standards (ESRS), currently in preparation36. The CSRD and this initiative are consistent in their approach, both recognising CO2 equivalent emissions of Scope 1 (direct emissions from own activity), Scope 2 (indirect emissions from the generation of purchased or acquired electricity, steam, heat, or cooling consumed by the reporting company), and Scope 3 (indirect emissions that occur in the value chain)37. These frameworks differ in terms of the subject and level of precision (the CSRD covers emissions of an entire company, and this Regulation covers emissions of transport services). However, information generated from this initiative may contribute to companies’ general sustainability reports, thus facilitating the implementation of the CSRD.
REFuelEU Aviation, another initiative under the Fit for 55 package, includes provisions for a dedicated environmental label for flights38 to help consumers make informed choices and promote greener travel. The Commission will ensure that the development of the labelling scheme for flights is properly coordinated with the implementation of this initiative to ensure consistency and reliability of any transport greenhouse gas emissions data generated.
Regulation (EU) 2020/1056 on electronic freight transport information (eFTI)39 relates to the exchange of regulatory information in electronic format on the transport of goods by road, rail, air and inland waterways. It will enable operators to prove compliance with many EU and national reporting formalities applicable to the transport of goods. By setting up a fully decentralised but harmonised and trusted data-sharing network, eFTI is expected to support sharing GHG emissions data among different bodies and individual users, thus supporting the implementation of this initiative.
This Regulation also seeks to complement the circular economy action plan40 and, under the plan’s umbrella, specific initiatives aiming to provide the right information to consumers. In particular, it has potential links with the product environmental footprint (PEF)41 initiative related to methodological requirements for quantifying emissions. PEF was originally developed as part of the single market for green products initiative42. It provides a general cross-sectoral method for measuring a good or service’s environmental performance throughout its life cycle. However, the general PEF framework does not specifically address transport services, and its implementation for emissions benchmarking purposes would still require drawing up detailed category rules43.
Synergies were also identified with: (i) Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market, which applies to misleading environmental claims; and (ii) the proposal for a Directive on empowering consumers for the green transition (amending Directive 2005/29/EC), which sets out a number of specific requirements on environmental claims and prohibits communicating generic environmental claims that are not based on recognised and relevant environmental performance44. These synergies primarily concern the need for better and reliable information on the sustainability of services. This includes protecting consumers against false or misleading information that may give the impression that a service is more environmentally friendly than it actually is. This initiative would regulate specific aspects of environmental claims by providing a harmonised, universally applicable framework. This would ensure accurate and comparable emissions data are made available to consumers by bodies accounting emissions of transport services.
The Commission’s proposal for Directive on substantiation and communication of explicit environmental claims (Green Claims Directive)45 is designed as lex specialis to Directive 2005/29/EC. Green Claims Directive sets detailed requirements for the assessment substantiating explicit environmental claims, and specific rules on environmental labelling schemes to improve trust in the credibility of environmental claims and reduce the proliferation of environmental labels. This Regulation sets out methodological rules to substantiate explicit environmental claims on well-to-wheel greenhouse gas emissions of transport services and thus for these claims it takes precedence over the rules on substantiation, communication and verification set out in the Green Claims Directive.
Whilst pollutant emissions are out of scope of the initiative, this Regulation is expected to generate co-benefits in the form of reduced pollution from transport, in line with the objectives of the Commission’s Zero Pollution Action Plan46.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The Initiative would be proposed on the basis of Article 91(1) and Article 100(2) of the Treaty on the Functioning of the European Union (TFEU). In accordance with Article 4(2) of the Treaty, shared competence between the EU and the Member States applies in the area of transport.
• Subsidiarity (for non-exclusive competence)
EU dimension of the problem
By providing harmonised rules for greenhouse gas emissions accounting at the transport service level, this initiative is particularly relevant for cross-border operations between EU Member States. This level of harmonisation, mostly related to the methodological choices, input data and common rules for verification, cannot be effectively achieved by actions of individual Member States. So far only France has established a dedicated harmonised methodological framework, including measures to incentivise its uptake47. However, in case further Member States follow, this may lead to very diverse calculation or disclosure requirements for transport organisers and users, with additional costs and administrative burden for industries operating across borders. Actions at national level may also lower the general effectiveness of greenhouse gas emissions accounting, as greenhouse gas emissions output data from transport services carried out in different countries would not be comparable, with a significant risk of creating confusion for users, thus providing different, or even negative incentives for entities offering transport services on the market.
Added value action at EU level
The EU transport sector has a strong cross-border dimension, playing an important role for the free flow of people and goods on the EU internal market. Efficient transport services are key to meet the demand of transport users, support the growth of the EU economy and preserve lifestyle of the citizens. At the same time, attention should be drawn to challenges related to environmental impacts from transport, still growing mostly due to the increase of freight and passenger traffic on the European network48. This initiative is therefore conceived as an enabler for the transport community to facilitate its green transition. By providing for better transparency on the performance of transport services, it will lead to creating incentives for more sustainable solutions and innovation, giving customers more information for their own choices. As shown above, any national approaches would be highly counterproductive for achieving these objectives, bearing significant risk of conflicting requirements and inconsistent methodologies and data.
• Proportionality
Choices concerning the relevant policy measures and policy option forming the structure of this initiative were made in due consideration of the proportionality principle, thus resulting in the most balanced approach possible. First, the Regulation envisages the use of the existing and widely recognised standard ISO 14083:2023, in its European version EN ISO 14083:2023, as a reference methodology for calculating greenhouse gas emissions of transport services. This measure received significant support from the stakeholders participating in various consultation activities, and therefore it is expected to result in a very good acceptability and applicability on the transport market. Secondly, the initiative provides for decentralised implementation of certain components, especially by permitting, under certain conditions, the use of external databases and datasets of default values and emission factors, as well as greenhouse gas emissions’ calculation tools operated by third parties. Thirdly, it sets rational requirements for the verification of greenhouse gas emissions data and calculation processes, exempting SMEs, unless they wish to undergo the verification on a voluntary basis. Finally, by including the binding opt-in application of the harmonised framework, this proposal imposes the requirements only on those entities that decide or are mandated by other means to calculate and share greenhouse gas emissions data. This aspect is important for stakeholders, in particular SMEs, which very often lack capacity to effectively start accounting greenhouse gas emissions at the level of transport services in the short term, and therefore expect a more gradual approach addressing their specific situation, and allowing them to take up the common framework over time.
• Choice of the instrument
The impact assessment evidenced that regulatory measures are necessary to achieve the objectives of the initiative. A regulation is the most appropriate instrument to ensure common implementation of the measures envisaged, while reducing the risk of distortion within the single market, which could result from differences into how EU Member States transpose the requirements into national law. The uptake of a harmonised approach should follow homogeneous rules to allow for comparability and sufficient quality and granularity of data produced. It is vital to avoid solving the current patchwork of differing solutions at national or sectoral level, which would be the case if implemented under a cross-sectoral directive.
The proposal is highly technical in nature, and there is a likelihood that it will have to be regularly amended to reflect technical and legal developments, particularly concerning the common reference calculation methodology and the rules on input data, certification and verification. Therefore, a number of delegated and implementing measures are also planned. These will focus particularly on the technical specifications to implement the functional requirements.
3. Results of Ex-post evaluations, stakeholders’ consultations and impact assessments
• Stakeholders’ consultation
The Commission actively engaged with stakeholders and conducted comprehensive consultations throughout the impact assessment process.
Stakeholders’ views started to be collected in response to the publication of the Call for Evidence (19 November to 17 December 2021). A total of 64 replies were received, which helped to refine the approach and better identify the barriers that hamper the harmonised accounting of GREENHOUSE GAS emissions of transport services.
- Open public consultation, organised by the Commission, running from 25 July to 20 October 2022. A total of 188 responses were received, covering a variety of stakeholder groups. The responses came from companies and businesses (63), business associations (59), EU citizens (26), public authorities (26), NGOs (8), academic and research institutions i, consumer organisations (3), trade unions (2), environmental organisations (1) and other (10)49;
- Exploratory interviews organised by the consultant responsible for the impact assessment support study, in July 2022 and directed at a passenger transport association, a shippers’ association, a non-profit environmentally oriented organisation and a green transport programme;
- A targeted stakeholders’ consultation organised by the consultant responsible for the impact assessment support study, including a survey and series of interviews. The survey ran from August to October 2022 and directed at individual companies (12), transport associations (9), public authorities i, consumers and passengers association (2), academia and research (1) and other types of stakeholders i. The interviews addressed representatives of individual stakeholders (38), including businesses (22), business associations (7), consumer organisations (1), public authorities (1) and other types of stakeholders (5);
- A stakeholder workshop, jointly organised by the Commission and the consultant responsible for the impact assessment support study on 27 October 2022, with 43 participants representing 33 stakeholders, out of which businesses, business organisations, public authorities and individual experts.
First, it should be noted that the concept and objectives of the initiative received strong support across all the consultation activities. Stakeholders generally recognise that a harmonised measurement and calculation framework is needed as greenhouse gas emissions accounting becomes increasingly embedded in the broader policy ecosystem and the decision-making processes of transport services users. They are aware that over time relevant information on greenhouse gas emissions would be more important for preserving their competitiveness (or investor relations), and they are therefore investing in systems to calculate emissions and communicate them effectively. Better measurement of emissions is also considered by many as a way to establish and monitor specific sustainability targets for reducing emissions and costs.
Information provided by stakeholders was key in allowing the Commission to adjust the design of the problem definition, to obtain input for the construction of policy options, and to facilitate assessment of the economic, social and environmental impacts, notably for determining which option is likely to maximise the benefits/costs ratio for the society.
As regards the problem definition, the consultation showed consensus amongst all stakeholder groups on the relevance of the specific problems that had been pre-identified in the impact assessment process, i.e. “the limited comparability of results of greenhouse gas emissions accounting in transport and logistics” and “the limited uptake of emission accounting in usual business practice”. The contributing stakeholders also confirmed the general pertinence of the underlying problem drivers, but pointed out to the need for adjusting some elements, especially to underline the importance of input data for calculating GREENHOUSE GAS emissions, and to better reflect the issues related to the lack of trust in greenhouse gas emissions output data disclosed on the market and the reluctance of market players to share sensitive operational data. The problem tree was updated accordingly.
When inquired about possible solutions, stakeholders provided a very valuable input supporting the development and assessment of the relevant policy measures and options. On the methodological framework, the majority of them advocated the uptake of existing or emerging greenhouse gas accounting approaches, and preferably those offering a global scope for emissions calculation. Stakeholders also suggested the EU should promote the use of primary data, and create a common system of default values in case the primary data are not available. They also expressed the need for a harmonised guidelines for the effective implementation of the framework across specific segments of the transport sector, to ensure its uniform understanding and use in various parts of the transport chain. Furthermore, the need for a dedicated system for the verification of greenhouse gas emissions data and calculation processes featured prominently in the received contributions, even if stakeholders were reserved about the associated administrative burden and costs, especially for the SMEs. Concerning the applicability, while some stakeholders found that a mandatory requirement would be the most effective for levelling the playing field on the transport market, the biding opt-in approach was overall deemed to be the most feasible and efficient, especially due to the disproportionate impact of the mandatory instrument on SMEs, a comment that appeared during interviews and the workshop.
• Collection of expertise
A study was conducted by an external contractor to support the impact assessment underpinning the proposal. This study was launched in March 2022 and was concluded in February 2023. The study provided valuable insights to the Commission, notably to design the policy options, assess the expected impacts, and collect the views of the directly impacted stakeholders.
• Impact assessment
The policy measures included in this proposal were informed by the results of the impact assessment. The impact assessment report [SWD(2023)XXXXX] received a positive opinion with reservations from the Commission Regulatory Scrutiny Board [SEC(2023)XXX]. In its opinion, the Board provided a number of recommendations about the evidence provided that have been duly addressed; Annex 1 to the impact assessment report includes a summary outline of how this was done.
Six policy options were considered in the context of the impact assessment to achieve the identified objectives. These options were structured around seven policy areas, already discussed above: “Methodology”; “Input data and sources”; “Applicability”; “Greenhouse gas emissions output data and transparency”; “Implementation support”; “Conformity”; “Complementary measures”.
Policy options provided alternative approaches to design the harmonised framework, varying in principle with respect to the choice of a reference methodology, the use of input data, the applicable verification system for the greenhouse gas emissions data and calculation processes, the use of greenhouse gas emissions calculation tools, as well as the way on how the regulation should be imposed. It should be noted that certain elements related to input data, namely the recommendation for the use of primary data, the establishment of a central EU database for greenhouse gas emissions factors, and the rules for modelled data were addressed in the same way throughout respective alternative policy measures and all policy options.
- Policy option 1 (PO1) envisaged the highest level of centralisation and harmonisation for accounting greenhouse gas emissions of transport services, and boosting its uptake on the market through a full mandatory application of this Regulation to all entities providing or organising transport services. PO1 included a comprehensive reference methodology based on ISO standard 14083, but with certain additional methodological elements increasing accuracy and comparability of greenhouse gas emissions calculation results, and established requirements for the mandatory verification of greenhouse gas emissions data and calculation processes to all concerned entities. It also allowed default values for greenhouse gas emission intensity under the sole condition that these would be derived from a central database established at EU level. Eventually, PO1 put forward a common calculation tool to be established by the EU to facilitate the calculation of greenhouse gas emissions of transport services on the market.
- Policy option 2 (PO2), compared to PO1, assumed an equally high level of centralisation concerning the treatment of input data and the use of the common calculation tool, but significantly leaner implementation of the initiative on the market. As regards the latter, this option proposed a fully voluntary application of this Regulation by stakeholders, voluntary verification of greenhouse gas emissions data and calculation processes, and more conducive reference methodology established by globally recognised standard ISO 14083.
- Policy option 3 (PO3), included measures allowing for a quasi-voluntary and decentralised approach with respect to the greenhouse gas emissions accounting. In principle, this policy option offered a “binding opt-in” applicability, imposing the requirement to use the common framework only to entities that choose (or are mandated by other means) to calculate and disclose data on greenhouse gas emissions related to transport services. In terms of input data, PO3 proposed a core EU database of default values for greenhouse gas emission intensity, however, unlike PO1 and PO2, it allowed the use of additional national, regional or sectorial datasets, subject to a specific quality assurance process. In addition, PO3 mandated the verification of adherence to the common greenhouse accounting framework only to entities above a certain size, i.e. large organisations, and permitted external calculation tools offered on the market by industry and public authorities, under the condition that these tools are certified as conform to the requirements of the initiative. As regards the methodological approach, PO3 chose the comprehensive methodology based on ISO standard 14083 with additional elements, identical as in PO1.
- Policy option 4 (PO4) replicated PO3 with regard to the composition of almost all policy measures, but the one regarding the calculation methodology. As regards the latter, PO4 included the global standard ISO 14083, featuring also in PO2 and PO6.
- Policy option 5 (PO5) differed from PO3 and PO4 on two aspects, namely the methodological choice, being the Product Environmental Footprint category rules (PEFCR) for greenhouse gas emissions of transport services, and the fully centralised database of default values for greenhouse gas emission intensity, similarly as the one used in PO1 and PO2.
- Policy option 6 (PO6) envisaged almost identical set of policy measures to PO4, with one single exception: it imposes mandatory applicability (as PO1) of the Regulation to all entities involved in providing or organising transport services.
Two policy measures that applied consistently across all policy options were: the establishment of harmonised greenhouse gas output data metrics together with common rules on communication and transparency, and the provision of horizontal guidelines for the implementation of the initiative on the transport market.
Following the assessment, PO4 has been identified as the preferred policy option. This option shows the optimal balance between the objectives of the initiative and the overall implementation costs, thus resulting in the best cost – benefit ratio.
PO4 will translate into reduction of greenhouse gas emissions and other related external costs, stemming from the provision of transport services on the EU market. This reduction will be mainly driven by the behavioural effects incentivising higher use of more sustainable transport options and optimised trips. The related savings in external costs have been estimated at EUR 674 million for greenhouse gas emissions, EUR 163.5 million for air pollution and EUR 645 million for accidents, relative to the baseline and expressed as net present value for 2025-2050 period in 2022 prices. These savings have been accounted in particular by assuming shifts of activity between modes and optimisation of trips for both passengers and freight transport induced by better knowledge on the performance of transport services and data availability. Savings for the avoided fuel use of EUR 2.4 billion are expected to be realised by operators and passengers due to the reduced activity of fuel/energy intensive transport modes. The improvements in the comparability of greenhouse gas emissions data are also projected to result in increased transparency, credibility, positive effects on reputation and public image of transport service organisers and providers, and higher levels of trust between transport chain partners.
Main costs resulting from the proposed intervention are borne by businesses. They include adjustments costs related to the use (adaptation or starting) of a new greenhouse gas methodological framework and the relevant verification activities (EUR 1.5 billion), as well as administrative costs stemming from the certification of calculation tools and quality check of external databases of default values for greenhouse gas emission intensity (EUR 0.5 million). Administrative costs have also been identified for national accreditation bodies that would be responsible for the accreditation of conformity assessment bodies performing the verification and certification activities (EUR 0.1 million). Furthermore, additional adjustment costs have been accounted for national statistical offices, especially for switching to unique format of greenhouse gas emission output values (EUR 0.1 million), and for the European Environmental Agency, related to the set-up and maintenance of EU databases for input data, as well as the quality check of external databases to be allowed under the initiative (EUR 3.9 million).
The preferred option thus provides net benefits amounting to EUR 2.4 billion over the time horizon of the initiative.
Regulatory fitness and simplification
As this is a new proposal, no evaluations or fitness check have been carried out.
• Fundamental rights
The proposal is in accordance with Charter of Fundamental Rights of the European Union.
4. BUDGETARY IMPLICATIONS
The proposal gives raise to net present costs for the Union Budget of EUR 0.6 million over the period from 2025 to 2027, and additional resources of EUR 6.3 million from 2028 to 2050. The budgetary impact of the proposal is described in more detail in the Legislative Financial Statement annexed to this proposal for information.
The budgetary impact beyond the current MFF is an indicative overview, without prejudice to the future MFF Agreement.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will follow the implementation, results and impacts of this initiative through a set of monitoring/evaluation mechanisms. The progress towards achieving the specific objectives of the proposal will be measured in particular through the data collected on the number of external default values databases having undergone the quality check, number of entities having undergone the verification, number of conformity assessment bodies being accredited under this Regulation, number of calculation tools being certified, and number of entities accounting greenhouse gas emissions of transport services. Requests for information (including reports, surveys, and inquiries) will be carefully balanced so as not to put additional burden on stakeholders.
Five years after the Regulation is fully applicable, the Commission will evaluate the rules to check whether the initiative’s objectives have been reached.
• Detailed explanation of the specific provisions of the proposal
Article 1 describes the subject matter of the proposed Regulation.
Article 2 lays down the scope of the Regulation.
Article 3 sets out several definitions.
Article 4 establishes the method for calculating greenhouse gas emissions of transport services.
Article 5 lays down the rules for the use of primary and secondary data for calculating greenhouse gas emissions of transport services.
Article 6 establishes a core EU database of default values.
Article 7 establishes rules for using databases and datasets of default values operated by third parties.
Article 8 establishes a central EU database of default greenhouse gas emission factors.
Article 9 lays down requirements on output data resulting from calculating greenhouse gas emissions of transport services.
Article 10 sets out rules for communication and transparency of greenhouse gas emission calculation results.
Article 11 establishes general rules for the certification of external calculation tools.
Article 12 establishes a general requirement for the verification of output data.
Article 13 lays down rules on the verification activities and process.
Article 14 sets out requirements for the Conformity Assessment Bodies.
Article 15 establishes procedures for the accreditation of the Conformity Assessment Bodies.
Article 16 establishes conditions conferring delegated powers to the Commission under this Regulation.
Article 17 establishes the Committee procedure for the exercise by the Commission of the power to adopt implementing acts.
Article 18 requires the Commission to carry out an evaluation of this Regulation.
Article 19 includes provisions related to the date of entry into force and, respectively, of application of this Regulation.