Following the Volkswagen fiasco, Brussels sets out plan to improve compliance

The European Union has many excellent policies relating to energy or climate change. But ensuring good implementation is not simple because in most cases compliance is the responsibility of individual member states. The EU can set out a policy framework but compliance is always a delicate area. Following the controversy that has arisen by Volkswagen cheating on emissions tests, the Commission is trying to gain more authority, as Jim Brunsden explains in the Financial Times.

 

Brussels seeks new powers to oversee carmakers

Brussels is seeking new powers to police carmakers’ compliance with emissions rules as EU officials seek to address regulatory failings that left it to US regulators to expose widespread cheating by Germany’s Volkswagen.

The European Commission, the EU’s executive arm, is considering options including endowing itself with authority to review the national regulators who currently assess cars’ safety and environmental performance, according to officials. This could include giving the commission power to demand extra testing on suspect cars and even to apply sanctions.

VW’s dieselgate scandal has been a stinging embarrassment for Europe’s existing system, in which national authorities determine whether cars are meeting technical standards.

In spite of longstanding suspicions in Europe, the company’s use of technology known as defeat devices to cheat laboratory tests for dangerous nitrogen oxides (NOx) was exposed through work by US academics that was then taken up by the country’s powerful Environmental Protection Agency.

Adding to the EU’s embarrassment, as many as 8.5m of the 11m vehicles affected were sold in Europe.

The US this week raised the stakes in its quest to hold the company to account when the Department of Justice filed a lawsuit against VW that threatens to cost the company tens of billions of dollars in damages. No equivalent step has been taken in the EU, where national governments are still investigating whether VW’s actions fall foul of an existing defeat device ban that contains some loopholes.

The pending EU plans will fall well short of previous suggestions from the bloc’s former environment commissioner, Janez Potocnik, to give the commission EPA-style powers to enforce environmental laws. Instead, they will focus more narrowly on motor regulations.

In addition to handing more oversight to Brussels, other changes being considered include reinforcing the EU’s existing ban on defeat devices with a US-style ”disclosure obligation” that would force manufacturers to identify and describe all emissions control devices they install in their cars.

According to Lucia Caudet, a commission spokeswoman, such a rule “widens the base for legal action” against manufacturers by obligating them to be more forthcoming with regulators about what they put in their cars. This “may well be an area for improvement in the EU legislative framework”, she said, adding that the commission was finalising its proposals.

Other possible measures, according to officials, include making it easier for regulators in EU nations other than the one where a car was first approved to initiate recalls.

The German carmaker is engulfed in the worst scandal in its 78-year history after it admitted to manipulating emissions test data on its diesel vehicles in the US and Europe. The deepening crisis has wiped billions of euros off the company’s shares and rocked the European car industry.

The commission is also expected to address an apparent conflict of interest in that vehicle testing centres are paid by the same carmakers whose products they are meant to be scrutinising, and possibly introduce more spot checks to determine how vehicles are performing.

“The financial relationship between carmakers, national authorities and private testing services needs to be broken up to ensure greater independence,” said Monique Goyens, director-general of BEUC, a consumers’ lobby group. “Random conformity testing such as in the US is also needed to put a further check on the system.”

The plans, which are to be presented in coming weeks, will require approval from national governments and the European parliament to take effect. They add to work by the EU to introduce on-road emissions tests that would be more difficult to game than existing laboratory-based tests.

The EU is also calling on VW to offer a similar compensation package to EU consumers to that rolled out in the US; something the company has so far declined to do. US customers have received two $500 gift cards as well as three years free breakdown cover.

Elżbieta Bieńkowska, the bloc’s single market chief, has “expressed the clear view that EU consumers should be treated in the same way as US customers”, Ms Caudet said. “VW have since announced that they do not plan to do so. I won’t comment on how European consumers might view that decision.”

2 thoughts on “Following the Volkswagen fiasco, Brussels sets out plan to improve compliance

  1. Dear Rod, Interesting article. From what I read in the Automotive press there is speculation that this will mean the break up of the VW empire and some of the brands- likely Porsche will again become independent companies. The never ending power struggles between the Porsche side of the family and the Piech side. Makes for great drama. A bit warmer here but we still have lots of snow and they have done nothing to clear it up on these small side streets. I could not get in or out of the drive with cars parked on the other side and the snow banks. Called the City but nothing has been done yet…Every time I see some asshole with skis on his car and a ‘Pray for Snow’ sticker I get livid! Love to you both, rgds Drew

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    • I have heard the same thing about the possible breakup. Yes, there definitely has been this power struggle. Crazy weather you’ve had. I understand your feelings completely.

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