The European Union’s leadership void on heavy-duty vehicle GHG standards

Many countries around the world look to Europe as a guiding example for vehicle and fuel environmental policy. For the past 20 years, India, China, Russia, Australia, Thailand, and S. Korea (to cite only the largest markets) have adopted “Euro” regulatory standards from the European Commission for vehicle emission and fuel quality policies. Regulators in these countries use the Euro standards as the basis for their own regulatory programs and often have identical (or nearly identical) provisions for parameters such as test procedures and limit values. 
Despite its leadership role historically on vehicle environmental policy, the European Union has lagged in one key area: regulatory measures for reducing greenhouse gas (GHG) emissions from on-road heavy-duty vehicles (HDVs). Starting with Japan in 2006, a number of countries—the United States, Canada, and China—have developed regulations to control fuel consumption and GHGs from new HDVs. All four of these countries have already implemented their first-phase standards and are actively working on developing second-phase standards. 
In contrast, Europe has elected to take an alternative approach, in which regulators and industry stakeholders have largely focused on first establishing a sophisticated computer simulation-based approach for certifying per-vehicle carbon dioxide (CO2) emissions. The HDV fuel efficiency and GHG regulations in Japan, the United States, Canada, and China all utilize computer simulation to varying degrees. But Europe’s model, VECTO, and the associated certification process have taken much longer to develop, validate, and finalize than the models in those countries. Even after this long development time, VECTO will first be used only for a labeling scheme, and policymakers in Europe have not committed to pursuing a regulatory program.
The initial objective of the VECTO-based labeling scheme will be to provide consumers with information about fuel consumption and CO2 performance at the vehicle model level so that truck and bus operators can make more informed decisions regarding the efficiency of new vehicles at the time of purchase. However, evidence from the passenger vehicle market suggests that consumer-based labeling programs, unlike mandatory efficiency regulations, have limited effect in driving fuel consumption reductions in new vehicles over time. 
The European Commission has made no announcements about plans for developing a GHG regulation for commercial vehicles, and this decision to instead pursue a VECTO-based labeling program is having ripple effects in other countries. At present, India, where regulators are currently developing efficiency standards for commercial trucks and buses, provides the best example of this. The lack of any regulatory initiative on GHG standards for HDVs in the EU has resulted in two trains of thought in India that have been counterproductive to the development of fuel efficiency standards. One holds that India has followed the European pathway on HDV emission regulations for many years, so why should GHGs be any different? In this argument, because India has modeled its Bharat Stage criteria pollutant emission control and fuel quality standards after the Euro regulations for 15-plus years, India should wait until the European Commission has established a GHG regulation for commercial trucks and buses, and then align with Europe. 
The second argument is related to the first and contends that India would be best served by developing its own version of VECTO to use in its fuel efficiency regulation. However, the European Commission and manufacturers in Europe have already spent roughly five years developing VECTO, and a version of the tool that is fully validated for all classes of HDVs will likely not be ready for implementation until after 2020. Therefore, it’s reasonable to assume that a VECTO-based regulation in India could not be developed and implemented successfully in the near-term. 
We support India pursuing VECTO (or some other software platform) as a basis for national fuel-efficiency standards. But because of the long lead time needed to develop such a simulation-based program, we have recommended that India base its first phase regulation on well-known physical test procedures, such as engine dynamometer and tire rolling resistance testing. Work on an “India-VECTO” can occur in parallel, and India can transition to simulation-based standards in the future, while reaping the fuel-saving benefits of a first-phase regulation in the meantime. 
These debates currently happening in India are evidence that Europe’s failure to commit to GHG regulation has created a leadership void. A strong commitment by the European Commission to establish CO2 performance standards for HDVs would provide regulators in India and other countries with a useful benchmark to assess the their own regulatory development. This would also largely neutralize the argument being made by industry that India should wait for regulatory action in Europe before pursuing its own standards. Moreover, having a clear direction on the overall VECTO timeline and clarity on how it will be used in a regulatory context would greatly help India and others in their assessment of the level of effort needed to adapt VECTO to their own local context or pursue other software and/or test procedure options.  
The world is definitely waiting and watching to see what Europe will do on this front. But, as evidenced in a recent announcement by the United States and India to collaborate on measures to reduce GHGs from HDVs, India will not be waiting around idly. If the European Commission persists in its indecision around GHG regulation for HDVs, they will not only continue to be a drag on the efficiency progress of HDVs in Europe, but they also risk falling behind the US and other countries in HDV efficiency technology development and deployment.