23 May 23

Euro 7 will cost four to 10 times more than EC forecasts, say OEMs

Manufacturers and environmentalists dispute the true cost of meeting new vehicle emission standards.

Vehicle manufacturers in Europe have raised the stakes in their campaign against having to meet Euro 7 emission standards by claiming that achieving the new pollutant level will cost between four and 10 times as much as the European Commission (EC) forecasts.

The OEMs commissioned Frontier Economics to study the cost impact of complying with the Euro 7 standards, and its report calculates that the cost per vehicle will be about €2,000 for cars and vans with an internal combustion engine, and almost €12,000 for diesel trucks and buses.

The EC’s own impact assessment estimated the cost of delivering Euro 7 standards would only be €180-450 for cars and vans, and €2,800 for trucks and buses.

Costs and hidden costs

The forecasts by Frontier Economics apply only to research and development investment, new parts (such as catalyst reformulation, onboard emission monitoring and components to reduce brake emissions), as well as direct manufacturing costs.

In addition, OEMs warn that new vehicle buyers should expect higher purchase prices and more expensive in-life costs, with fuel bills rising by 3.5%, due to the additional fuel required to warm up a catalyst from a cold start.

Direct costs of Euro 7, Industry vs EC Impact Assessment estimates

Frontier Economics said that Euro 7 standards would even drive up the cost of battery electric vehicles by about €180 per car/van and €750 per lorry/bus due to the higher manufacturing costs of meeting non-exhaust emission limits and battery durability requirements.

OEMs oppose Euro 7

Ever since the EC unveiled the Euro 7 targets, OEMs have argued that the tougher standards, which propose stringent new limits for NOx and particulate emissions as well as non-exhaust particle emissions from brakes and tyres from July 2025, are an unnecessary diversion of time and investment from their efforts to electrify vehicles, given that the Commission will ban the sale of new petrol and diesel cars and vans from 2035.

Manufacturers insist that Euro 6, which came into force in 2014 and was updated in 2017 and 2020, already sets the most demanding pollutant emission standards in the world.

Sigrid de Vries, Director General of the European Automobile Manufacturers’ Association (ACEA), which commissioned the study, said: “The European auto industry is committed to further reducing emissions for the benefit of the climate, environment, and health. However, the Euro 7 proposal is simply not the right way to do this, as it would have an extremely low environmental impact at an extremely high cost. Greater environmental and health benefits will be achieved by the transition to electrification, while at the same time replacing older vehicles on EU roads with highly efficient Euro 6/VI models.”

Environmentalists want tougher standards

However, Transport & Environment (T&E), the NGO that campaigns for cleaner transport, says Euro 7 does not go far enough, and argues that its costs are negligible given that Europe’s five big carmakers have more than doubled their annual profits since 2019 to €64 billion. T&E also highlights the ‘cost’ of toxic road transport pollution cause 70,000 premature deaths every year within the European Union.

Anna Krajinska, vehicle emissions and air quality manager at T&E, said: “We don’t begrudge carmakers their record profits, but claims that they cannot afford cheap pollution fixes are simply corporate greed. The auto industry is maximising profits by selling more expensive premium vehicles while at the same time pretending pollution rules would make cars unaffordable. EU lawmakers need to put public health before the industry’s money grab.”


Images: Shutterstock, Frontier Economics


Authored by: Jonathan Manning