Tuesday, 17 December 2024

Oh Lord, don’t follow the Opinion in Mercedes-Benz: Advocate General Rantos proposes a retroactive interpretation of European type approval law which makes up to 200 Mio type approved motor vehicles in the EU illegal

 



 

Dr. Benedikt Wolfers, M.A. & Sebastian Lutz-Bachmann, LL.M.*

 

* Partners of the Law Firm Posser Spieth Wolfers & Partners in Berlin.

 

Photo credit: Reinhold Möller, via Wikimedia Commons

 

In recent years, the Court of Justice decided a series of cases in relation to vehicle type approval law. On 21 November 2024, Advocate General Rantos published his Opinion in two further cases (joint cases C-251/23, C-308/23 Mercedes-Benz). A regulatory key question in these cases is whether EU5 and EU6 vehicles registered in the EU that comply with the emission limits on the legally required chassis dynamometer test in the New European Driving Cycle (NEDC) also have to comply with these emission limits in real driving conditions outside the NEDC. For NEDC vehicles the more recent Real Driving Emissions (RDE) test, that has been introduced as of 1.9.2017, is not applicable.

 

In his Opinion, Advocate General Rantos nevertheless considers NEDC emission limits to be applicable in real driving conditions: In his view, NEDC vehicles “must simultaneously comply with all of the limits values set out in Annex I to Regulation No 715/2007, both in the NEDC test and in real driving conditions” (para. 61). He states “that compliance with the NOx emission limit values must be verified not only in the context of the NEDC test but also under real driving conditions, in normal use” (para. 47). This general, far reaching statement on Art. 4(2) and Art. 5(1) of Regulation (EC) No 715/2007 (on type approval of motor vehicles) is the basis to answer the initial question put the court: whether a NEDC vehicle has to meet the emission limit values in the NEDC test not only after a cold start (as Annex I to Regulation (EC) No. 715/2007 requires) but also after a warm start (as Annex I does not require). Advocate General Rantos confirms this and justifies his position with his general statement, “in so far as driving with a warm engine constitutes normal use […] in real driving conditions, as they are usually present in the territory of the European Union” (paras. 47, 92).

 

Since the Advocate General interprets the scope of Art. 4(2) and Art. 5(1) of Regulation (EC) No 715/2007 generally his view applies to all EU5 and EU6 NEDC light passenger and commercial vehicles (be extended to EU4 ), with a diesel or petrol engine, and is relevant for all courts and EU type approval and market surveillance authorities who prove compliance of NEDC vehicles with the EU emissions regulation - far beyond the individual case at hand.

 

Should Advocate General Rantos’ view prevail, holders of NEDC vehicles would have to meet retroactively the additional requirement to meet the emission limits in real driving conditions which did not exist at the time of the type approval and marketing of the vehicles. Holders will not able to not do so - because NEDC vehicles are no RDE vehicles and can typically not meet the NEDC limits in real driving conditions. This means that up to 200 Mio of EU citizens, tradespeople, service providers, etc. in the EU could be exposed to the risk that their NEDC vehicles, which did comply with the statutory test when approved, would today, retroactively, be considered illegal. This could lead to massive damage claims and recall of vehicles, imposing an unbelievably high burden on customers and the EU industry.

 

Advocate General Rantos’ opinion is not only very dangerous but also, legally, erroneous. It infringes the legal and factual status of the last 20 years as well as the fundamental legal principle that measures should have no retroactive effects. For more than 20 years, EU law has provided that the limit values for NEDC vehicles are tested in the NEDC test only, not in real driving conditions. For more than 20 years, the EU Commission, all EU member states, all vehicle approval authorities, scientists, courts, manufacturers, importers and consumers have applied the limit values for NEDC vehicles exclusively to the NEDC on the test bench, but not to normal use in real driving conditions. To comply with the law and to avoid massive risks for consumers and the industry in the EU the Court of Justice should not follow Advocate General Rantos’ proposal.

 

European type approval law does not provide for the application of NEDC emission limits in real drive conditions

 

Advocate General Rantos argues that the application of NEDC emission limits in real drive conditions would result from the existing case law of the Court of Justice on diesel vehicles (esp. from the decision in Case C-134/20 Volkswagen). However, in these cases the Court of Justice only decided on the interpretation of “normal driving conditions” in the context of defeat devices and did not decide that NEDC emission limits have to be met in real drive conditions. This is not the same. The definition and prohibition of a defeat device (in Art. 3(10) and Art. 5(2) of Regulation (EC) No 715/2007) is strictly to be distinguished from the question whether emission limits specified in Annex I to Regulation (EC) No. 715/2007 have to be met in real driving situations.

 

In that regard, European type approval law, to which Advocate General Rantos refers in his Opinion, does not provide for the application of NEDC emission limits in real drive conditions. Rather, Regulation (EC) No. 715/2007 and Regulation (EC) No. 692/2008, which form together the core of emission-related type approval law for vehicles in the European Union, clearly establish that compliance with the relevant emission limits is only required during the specified NEDC test procedures:

 

Emission limits for EU5 and EU6 are specified in Annex I to Regulation (EC) No. 715/2007. For passenger and light duty diesel vehicles NOx limits are 180mg/km (EU5) and 80mg/km (EU6) respectively. Art. 4(1) sub 2 Regulation (EC) No. 715/2007 obliges manufacturers to comply with the emission limit values set out in Annex I. The reference to meet the limits is immediately followed by a reference to the implementing measures. According to these implementing measures, which are set out in Regulation (EC) No. 692/2008, the emission limits must only be met under test procedures specified in the detailed annexes to Regulation (EC) No. 692/2008 (Art. 3 para 6 Regulation (EC) No. 692/2008). These test procedures most notably include the NEDC test procedures. Until 2017 the test procedures set out in the annexes to Regulation (EC) No. 692/2008 did not, however, refer to any testing under real driving conditions. Therefore, until 2017 all type-approved vehicles had to comply with the emission limit values set out in Annex I to Regulation (EC) No. 715/2007 only in the prescribed test procedures on the dynamometer.

 

Only for vehicles that have been type-approved since 1.9.2017 new test procedures that include normal use under specified real driving conditions on the road have been introduced. However, these RDE tests are not retroactively applicable for vehicles type-approved according to the NEDC before 2017.

 

Tests for NEDC vehicles under real drive conditions would not have been possible

 

An interpretation of the law which requires the impossible demonstrates that it is incorrect. This applies to Advocate General Rantos’ view that NEDC vehicles should meet the emission limits in real driving conditions: No type approval authority, no technical service and no manufacturer could have implemented this – for two reasons:

 

First, until 2017 EU law did not provide for any procedure to test emission limits of EU4, EU5 and EU6 NEDC passenger cars and light duty vehicles in real driving conditions. Each emission limit, however, requires a description of the test procedure with which it is to be tested. This is a scientific-technical law and logically mandatory. Every material test and every technical limit requires a description of the procedure in which it is tested. However, a procedure for testing emissions from passenger cars and light duty vehicles in real driving conditions was only introduced in EU law for new vehicle types as of 1.9.2017 (introduction of RDE tests). Without a legally recognized test procedure, type approval authorities could not have tested NEDC vehicles in real driving conditions.

 

Second, until 2017 it would not have been technically possible to test the emissions of passenger cars and light duty vehicles in real driving conditions. So-called PEMS devices, which have been used to carry out the RDE test of passenger cars and light duty vehicles since 2017, were not available when EU4 and EU5 were introduced in 2005 and 2009 respectively. The first recognition of PEMS devices as a measurement technology under EU law was for heavy duty vehicles in 2011 which was not applicable for passenger cars and light duty vehicles (Art. 2 No. 12 and Annex II Appendix 1 of Commission Regulation 582/2011 of 25 May 2011 on Heavy Duty Vehicles Emissions). For NEDC passenger cars and light duty vehicles, PEMS measurement technology for real driving conditions was only created and recognised in EU law with the introduction of RDE tests for new vehicle types as of 1.9.2017. Without a legally recognized PEMS test equipment, type approval authorities could not have tested NEDC vehicles in real driving conditions.

 

Advocate General Rantos’ opinion contradicts with practice of European Commission, Member States and all type approval authorities for more than 20 years

 

The incorrectness of Advocate General Rantos’ view is confirmed by the practice of the European Commission, EU Member States, vehicle approval authorities, scientists and courts, which for more than 20 years, as numerous documents show, have applied the EU4, EU5 and EU6 emission limits for NEDC vehicles only in the NEDC and not under normal use in real driving conditions.

 

Because the NEDC was criticised for not being representative for real driving conditions it was replaced at EU level in 2017 for new vehicle types by a new test procedure which provides for a more demanding driving profile on the chassis dynamometer (WLTP) and additionally and for the first time by a test under normal use under specified real driving conditions on the road (RDE test). This new legislation and its historical background confirm that before the change of law in 2017 the emission limits of NEDC vehicles had to tested in the NEDC only. This is also the view of the European Commission which in 2019 explicitly stated that “the mandatory NOx emission limits for diesel cars in the EU have been progressively lowered from 500 mg/km at Euro 3 […] to 80 mg/km at Euro 6. However, there is evidence that despite these increasingly stringent NOx limits, that are verified under laboratory conditions and on a standardised test cycle, the actual NOx emissions under real driving conditions did not come down to the same extent (Weiss et al. 2011). In response to this, the Commission has developed the real driving emissions procedure (RDE). […] It first applied for monitoring purposes from early 2016 to complement the laboratory test and has been applicable to new vehicle types as from 1 September 2017” (see: Proposal by EU Commission for a Regulation amending Regulation 2007/715; COM(2019) 208 final).

 

Conclusion: Court of Justice should not follow Advocate General’s Opinion

 

Retroactively expanding the scope of emission limits for NEDC vehicles on real driving conditions would undermine the trust in the harmonized European type-approval law and in the internal market which for more than 20 years has provided that the emission limit values for NEDC vehicles are tested in the NEDC only, not in real driving conditions. Up to 200 Mio of EU citizens, tradespeople, service providers, etc. in the EU could be exposed to the risk that their NEDC vehicles, which did comply with the statutory test when approved, would today, retroactively, be considered illegal. Such an important decision falls outside of the competence of the Court of Justice and would rather have to be adopted by a legislative act (Art. 289(3) TFEU). However, such a legal act, that would retroactively impose additional duties (and potentially sanction), would not fulfil the requirements established by the Court of Justice under which such a retroactive application is exceptionally permissible (Case 98/78, ECR 1979, 69, para. 20 (Racke); Case 84/81, ECR 1982, 1763 para. 13 - 15 (Staple Dairy Products); Case 114/81, ECR 1982, 3189, para. 5-11 (Tunnel Refineries)). Therefore, the Court of Justice should not follow the arguments in Advocate General Rantos’ opinion.

 

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