Frequently asked questions on application for derogations pursuant to Article 11 of Regulation (EU) 510/2011

11 February 2013

THE PROCESS

Electronic application forms are available on CIRCABC and the DG CLIMA website. These may be updated to reflect feedback from applicants and updates to these FAQs so please check that you are using the latest version of the form when submitting your application.

  1. What is a derogation from the targets set in Regulation (EU) 510/2011?

Regulation (EU)510/2011 defines CO2 targets for new light commercial vehicles (vans)relating to their mass.The fleet average to be achieved by all vans registered in the EU is 175 grams per kilometer (g/km) by 2017 phased-in from 2014. A so-called limit value curve means that heavier vans are allowed higher emissions than lighter vans while preserving the overall fleet average.The target is set as an average for the manufacturer's fleet meaning that a manufacturer can still produce vans emitting amount above the limit value as long as this is offset by other models emitting less than set out by the limit value curve.

However, the Regulation(EU) 510/2011also appreciates that it is not appropriate to use the same method to determine the emissions reduction targets for large-volume and small-volume manufacturersbecause of a more limited scope for distribution of effort within the product rangeof the latter group. Therefore, Article 11 of the Regulation provides for derogation for certain manufacturers from the specific CO2 emissions target set in Annex I of the legislation, and allows these manufacturers to apply for alternative targets.

So called small-volume derogation (Art.11(1)) is available to manufacturers responsible for less than 22 000new light commercial vehicles'registrations in the EU per year. These manufacturers can apply for individual targets based on their reduction potential, expressed as economic and technological potential to reduce CO2, and characteristics of the markets for the vehicles concerned.

  1. Who can apply for a small-volume derogation?

An application for thesmall volume derogation can be made bya manufacturer who:

a)Is responsible for fewer than 22 000 new vans registered in the EU per calendar year;AND

b)is not part of a group of connected manufacturers (see question 3); OR

c)is part of such a group but all connected manufacturers are responsible in total for fewer than 22 000 vans registered in the EU per calendar year; OR

d)is part of a group of connected manufacturers but operatesitsown production facilities and independent design centre (see question 5). Such manufacturer can make an application separately from a large-volumemanufacturer.

  1. Who is the manufacturer?

Article 3 point (f) of Regulation (EU) 510/2011 defines the manufacturer as "the person or body responsible to the approval authority for all aspects of the EC type-approval procedure in accordance with Directive 2007/46/EC and for ensuring conformity of production."

  1. What is 'a group of connected manufacturers'?

This term is defined in article 3(2) of Regulation (EU) 510/2011. The term means "a manufacturer and its connected undertakings. In relation to a manufacturer, 'connected undertakings' means:

(a) undertakings in which the manufacturer has, directly or indirectly:

— the power to exercise more than half the voting rights;or

— the power to appoint more than half the members of the supervisory board, board of management or bodies legally representing the undertaking; or

— the right to manage the undertaking’s affairs;b) undertakings which directly or indirectly have, over the manufacturer, the rights or powers listed in point (a);

(c) undertakings in which an undertaking referred to in point (b) has, directly or indirectly, the rights or powers listed in point (a);

(d) undertakings in which the manufacturer together with one or more of the undertakings referred to in points (a), (b) or (c), or in which two or more of the latter undertakings, jointly have the rights or powers listed in point (a);

(e) undertakings in which the rights or the powers listed in (a) are jointly held by the manufacturer or one or more of its connected undertakings referred to in points (a) to (d) and one or more third parties."[1]

The applicants are requested to attach the declaration set out in Annex IIof theDelegatedRegulation[2](EU) No 114/2013 duly signed and dated confirming that the conditions listed above are met.

  1. What is 'own production facility' and 'own design centre'?

Definitions pursuant to the Delegated Regulation:

'own production facility' is defined as "a manufacturing or assembly plant used solely by the applicant for the purpose of manufacturing or assembling new vans exclusively for that manufacturer, including, where relevant, vans which are intended for export";

'own design centre' is defined as "a facility in which the whole vehicle is designed and developed, and which is under the control and exclusive use of the applicant".

Applicants are requested to attach the declaration set out in Annex II of the Delegated Regulation duly signed and dated confirming that the conditions listed above are met.

  1. What if members of connected undertaking are eligible for different types of derogations?

Manufacturers can always apply separately provided that the conditions set out in Regulation (EU) No 510/2011 are met (see question 2 points c) OR d). In such case, manufacturers should make separate applications specifying that they are part of connected undertakings and providing the names and numbers of EU new light commercial vehicles registrations of the whole group of connected manufacturers.

  1. Is it necessary to apply for a derogation?

Manufacturers qualifying for any type of derogation can choose not to apply for a derogation. In cases where no application is submitted, the Commission will verify compliance with the manufacturer's target calculated based on the formulae in Annex I of Regulation (EU) 510/2011.

  1. Duration of the derogation

The small-volume derogation can be granted for a maximum period of five calendar years. The applicant can choose to send yearly applications. However, in order to ensure planning certainty regarding the target applicable for eachcalendar year for which the derogation is sought, the application should be submitted to the Commission no later than 31 March of the preceding calendar year. For more details see question 12.

Note thata derogation scheme (conditions, duration, eligibility) will be reviewed in the context of the overall review of Regulation (EU) 510/2011 foreseen for the end of 2013(see question 13).

  1. What if the eligibility criteria or manufacturer's situation changes during the period of granted derogation?

According to Article 11(4) of Regulation (EU) 510/2011a manufacturer subject to a derogationshall notify the Commission immediately of any change which affects or may affect its eligibility for a derogation. If the manufacturer is no longer eligible for a derogation based on this notification or based on the information available to the Commission, the derogation will be revoked with effect from January 1 of the next calendar year. The Commission shall notify the manufacturer of this decision.

A manufacturer that has already been granted a derogationmay re-apply for the same or different derogationin case of a change of circumstances, provided that the basic conditions for eligibility are satisfied.To ensure timely processing of the application it should be sent to the Commission no later than 31 March of the preceding calendar year (see question 12).

  1. New market entrants

New entrants to the market may not be able to use past CO2 emissions of their EUregisters fleet as a baseline for reduction. Therefore, the Commission will assess the company's reduction potential on the basis of the market characteristics relevant for the types of vanswhich will be covered by the derogation, the technologies used in these vehicles and in the relevant competing models produced by other small-volume manufacturers.

Some small-volume manufacturers which are not new on the market may have had no sales (registrations) in 2010. In such case, the applicant is requested to provide its average specific emissions in the following calendar year closest to 2010.

  1. Other flexibilities provided by the Regulation

Regulation (EU) 510/2011 provides manufacturers with the following flexibilities:

  • phase-in of targets (Article 4): only 70% of the lowest emitting vehicles in the fleet will be obliged to comply with the target in 2014, 75% in 2015, 80% in 2016 and 100% as of 2017 onwards.
  • super-credits (Article 5): in calculating the average specific CO2 emissions of a manufacturer each vehicle emitting less than 50g/km will be counted as: 3.5 vans in 2014, 3.5 vans in 2015, 2.5 vans in 2016, 1.5 vans in 2017 and 1 van from 2018.
  • credits for E85 vehicles (Article 6): CO2 emissions of each vehicle designed to be capable of running on a mixture of petrol with 85% ethanol ('E85') which meets relevant Community legislation or European technical standards will be reduced by 5% until 31 December 2015. This reduction will apply only to vehicles registered in Member States where at least 30% of the filling stations provide this type of alternative fuel from sustainable sources.
  • eco-innovations (Article 12):the innovative technologies reducing CO2 will in certain circumstances be granted credits which will reduce the specific emissions of a vehicle on which such technology is deployed. These credits in terms of g/km will be granted upon application by a manufacturer or supplier. The rules setting out a detailed application and assessment procedure are currently under development.

These flexibilities also apply to manufacturers granted a derogation.

  1. Assessment process
  2. How long is the assessment process?

The Commission will assess applications within 9 months of the receipt of a complete application. If the application does not contain the information or supporting documents requested in the Delegated Regulation, the Commission will send a letter to the contact person requesting the missing information and specifying a deadline for submission. The 9-month assessment period will start only after the Commission receives a complete application.

The application should be submitted by 31 March 2013 at the latest to enable the Commission to take a decision prior to 2014. Please note that if the application is incomplete the 9-month period will start only from the date of receipt of requested information.

  1. Sending your application

Applicants are requested to submit their application in an electronic format and via post/courier.

  • The version sent by post or courier should include the paper version of the following documents: signed cover letter, printed application form(public and confidential part should be sent together)and a signed form from Annex II of the Delegated Regulation. In addition, the applicants are requested to attach a CD-Rom/DVD containing scanned versions of the abovementioned documents together with all other supporting documents. In order to avoid delays, the applicants are requested to send all the material listed above (including public and confidential information and supporting documents) under one cover. The cover should bear the heading "Derogation under Regulation (EU) 510/2011"andbe sent to the following address:

European Commission

Secretariat General

1049 Brussels

Belgium

  • The electronic version of the application containing digital versions of all the documents mentioned in the preceding bullet point should be sent via email to the following functional mailbox

Please note that the two sets of documents must be IDENTICAL.

The official date from which the 9-month assessment period will start will be the date of the registration of receipt of the application by the Secretariat General of the Commission (provided that the application is complete see question 12 a). However, the electronic application will be used to streamline the process of checking the completeness of applications.

If the application is submitted to the Commission before the Commission Delegated Regulation No 114/2013 enters into force, the official date from which the assessment period will start,will be the date on which the Delegated Regulation enters into force.

  1. Confirmation of receipt of completed/incomplete application

The official confirmation specifying the end of the 9-month period will be sent to the applicant after the completeness of the paper version of the application form has been verified (also see point 12.a).

  1. How are the decisions taken?

The formal decisions granting or rejecting the derogation will be taken by the Commission based on the assessment performed by DG CLIMA.

According to Article 7(1) of the Delegated Regulation the derogation is granted if no objections are raised by the end of the 9-month period.

  1. Rejection of application

Applications can be rejected for the following reasons:

The applicant does not meet the eligibility criteria;

The application is incomplete and the requested additional information is not submitted within the time period specified by the Commission in the request;

The proposed reduction programme (a target or yearly targets)is not consistent with the applicant's reduction potential.

In case the application is rejected due to incompleteness or inconsistence of the targets with the applicant's reduction potential the applicant may resubmit the completed or revised application. However, if this is done later than 31 March of the year preceding the calendar year for which the derogation is sought, there is a risk that the Commission may not take a decision in time for the derogation to apply to the subsequent year.

If no derogation is granted, the applicable targets will be calculated based on the formulae in Annex I of Regulation (EU) 510/2011.

  1. Interactions with the Commission after submitting the application

The Commission expects to receive a number of applications. In order to ensure level-playing field and a smooth and timely assessment process, interaction with applicants will be limited to formal contacts such as to confirm the completeness of the applications or to request missing information.

  1. Compliance check

The Commission will check manufacturers' yearly compliance with the targets based on the registration data supplied to the Commission by the Member States. For further information about this process please see the following link:

  1. Can the conditions, eligibility criteria or assessment process change?

A derogation scheme is part of an overall review of Regulation (EU) No 510/2011 scheduled for 2013 in view of determining the modalities for reaching the 2020 target of 147 g CO2/km. The Commission's proposal (COM(2012) 394 final) includes two amendments regarding derogations aiming at simplification of the process, however these will apply only once the proposals are adopted by the European Parliament and the Council.

  1. What if the successful applicant does not meet the target approved by the Commission?

In case a manufacturer does not meet the approved target, the excess emissions premium set out in Article 9 of the Regulation (EU) 510/2011 will apply.

  1. What information will be made public?

Article 11(8) of Regulation (EU) 510/2011 requires the application, including the supporting documents, notification of any change of circumstances, revocations of decisions, as well as decisions to impose excess emissions premiums to be made public. The Commission will publish the ''public'' section of the application form.

Information that the applicant considers to be commercially sensitive should be provided in the confidential part of the application. This information will not be made public. In the case of a request for access to documents that covers also such confidential information the Commission will contact the applicant and verify whether the exemptions set out in Regulation (EC) 1049/2001 apply.

THE APPLICATION

  1. Content of the application
  2. The name of the manufacturer

The name of the manufacturer should be consistent with the name stated on the certificate of conformity of the vehicles to be covered by the derogation and the name indicated to the Commission for the purpose of monitoring (see Article 9 of Regulation (EU) No 293/2012).

  1. Contact person

The contact person does not have to be a CEO or Director. It should be the person responsible for the application. The Commission will contact this person in order to confirm if the application is complete or request further information. In case of connected manufacturers applying for a joint target, the contact person does not necessarily have to be from the parent company. For information regarding how the Commission will treat your personal information, please use the following link to a privacy statement on the DG CLIMA website:

  1. Is it necessary to attach the evidence of the ownership structure?

A signed declaration stating the structure of ownership set out in Annex II to the Delegated Regulation should be attached to the application form. Further evidence is not required.

  1. Where to find official EU registration data?

The official data on EU registrations per manufacturer, along with other data on CO2 and mass, for the year 2010 can be accessed in the report

“Support for the revision of regulation on CO2 emissions from light commercial vehicles”, Annex 7, Page 145 on the DG CLIMA website:

The 2012 official registration data for the whole Community will only be accessible in the second half of 2013.Therefore, the applicants will need to provide their best estimate for this year.

The specific emissions of CO2 refer to the combined emissions indicated in the certificate of conformity.

  • What is considered as the best estimate of EU registrations based on verifiable data?

The manufacturer's own data or commercially available sales data shall be considered as the best estimate. This number should be verifiableand in case of doubts regarding the eligibility for the derogation the Commission may request it.

  • Vehicles type-approved under the national type approval of small series or individual approval (Articles 23 and 24 of Directive 2007/46/EC)

Only vehicles for which the CO2 emission value is available will be taken into account while checking compliance with the target. Vehicles undergoing simplified procedures may therefore be not considered in the manufacturer's fleet average.

For more information on monitoring please refer to the Commission Regulation (EU) No 293/2012.

Regulation (EU) 510/2011 covers only vans which are registered in the EU for the first time and which have not previously been registered outside the EU for more than 3 months.

In case a vehicle produced for a market in a third country is re-imported to the EU by individual buyers, it will normally undergo a simplified type approval procedure and therefore, not count towards the manufacturer's average specific CO2 emissions.

  1. Duration of the derogation

See question 8

  1. Proposal for a specific emissions target

Applicants can choose to propose a single target to comply with on a yearly basis during the period of derogation (e.g. a yearly target of 210g/km from 2014 to 2018). The target should represent a reduction as compared to 2010 or another baseline.