Could Brexit mean bans on Britain’s cars and trucks?

With Britain set to leave the European Union next March, the two sides have been locked in complex Brexit divorce negotiations to unfasten their multifaceted relationship. One of the many issues that still faces a question mark concerns EU legislation on automotive standards after Brexit: will the EU approval system for cars and trucks stay in place in the UK? If not, then that would mean an effective ban on British-made vehicles. But until the UK’s withdrawal agreement is settled, this will remain uncertain.

The current system of determining whether cars follow the EU’s safety and environmental standards is based on mutual recognition across the bloc. These EU type-approval rules would cease to apply in the UK after Brexit, meaning that all manufacturers with a UK type-approval would need a new one from one of the EU27 member states.

However, negotiators from both sides are hoping that if an EU-UK customs union can stay in place until a “future relationship becomes applicable”, then the approvals system can continue in Britain. It would be a recognition that the automotive industry in both the EU and UK wants continuity, and that citizens would be assured of EU safety standards.

 

 

Transitional Period

The draft 585-page agreement published in London and Brussels on November 14 sets out the terms for the UK to quit the bloc on March 29, 2019, allowing Britain to stay in a customs union with the EU for longer than a proposed transitional period to December 2020, during which time EU law still would apply. Under the draft deal, the EU-UK customs union could stay until a “future relationship becomes applicable,” – which could mean years, or even decades.

In the meantime, EU legislation on automotive standards would stay in place in Britain. This includes EU Directive 2005/64/EC on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability; Directive 2006/40/EC on emissions from air-conditioning systems in motor vehicles; and Regulation (EC) No 715/2007 with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6).

MEPs have already endorsed a European Commission proposal to prepare the type-approval system for Brexit. This adapts the system for certifying passenger cars, as well as other vehicles, like motorbikes, trucks, tractors, and industrial vehicles like bulldozers.

The new rules would allow carmakers that already have acquired type approvals in the UK to apply for replacement certificates in one of the 27 EU member states. The draft regulation also says that tests related to the certification process do not have to be repeated – unless an authority in the EU27 specifically asks for it. Manufacturers who re-apply will be “liable to pay adequate fees”, and they have to do so “before the day when Union law ceases to apply in and to the United Kingdom”.

It would also mean commitments by Britain’s automotive sector to EU environmental regulations. Under the draft deal, the UK would implement a carbon pricing and trading programme “of at least the same effectiveness and scope” as the one already operating in the EU.

The issue of approvals is a particular concern for Japanese and Korean manufacturers like Toyota, Nissan, Hyundai, and Honda, which have mostly certified with the UK’s Vehicle Certification Agency. Skoda, part of Volkswagen Group, also used to apply in the UK, but earlier this year cited Brexit as a reason to stop doing so.

These arrangements are aimed at alleviating the anxiety across the automotive sector about Brexit. However, with negotiations still in flux, even this draft deal cannot be certain.