Attention fleet managers! The new Euro 7 vehicle emission standard, the replacement of Euro 6, was announced on November 10. Although approval from the European Union is still pending, the new standard is expected to apply to all new passenger cars and light commercial vehicles (LCVs) from July 1, 2025 and to trucks and buses from July 1, 2027.
So, with the new standard coming into force in less than three years’ time, let’s explore what it all means – from the impact Euro 7 will have on vehicles to what you can do to prepare your fleet.
It’s an update to the current Euro 6 standard, meaning it will strengthen the existing European policy on reducing emissions from cars to LCVs.
How will it work?
Euro 7 aims to cut emissions by:
• Expanding emission testing. For example, the Worldwide Harmonised Light Vehicle Test Procedure (WLVTP) test cycle will be updated to include tests on real-world driving emissions, such as those generated in temperatures of up to 45 degrees and by short trips. This will lead to vehicles being given higher (that is worse) CO2 emissions ratings.
• Regulating beyond tailpipe emissions. For the first time in any emission standard testing, emissions from brakes and microplastics from tyres will be included in the updated rating. And that goes for all vehicles, including battery electric vehicles (BEVs).
• Requiring all cars to have on-board fuel consumption monitor devices. The idea here is to avoid (or at least monitor) large variations between lab results and actual vehicle emissions.
• Expanding the compliance period and range. These will jump from five to ten years and 100,00km to 200,00km respectively.
• Regulating battery durability for EVs. Under the new regulations, batteries installed in EVs and eLCVs need to be of a high enough quality to last for a reasonable amount of time. This will help increase battery use times – not to mention consumer confidence in EVs!
What are the expected results?
There are several potential benefits to Euro 7, including:
• 35-56% lower vehicle NOx emissions which are toxic to humans.
• 13% lower tailpipe particles from passenger cars and vans; 39% lower from buses and trucks.
• 27% lower particles from brakes and tyres for all vehicles.
• Better battery durability for plug-in hybrids (PHEVs) and BEVs.
With that in mind, it’s fair to assume the introduction of Euro 7 should improve the health both of the environment and of European residents. In fact, it’s estimated that 70,000 early deaths can be avoided by 2035 if the new standard is implemented.
What’s the impact on vehicles – and fleet managers?
Whatever the outcome, Euro 7 will undoubtedly affect vehicle pricing. Estimates suggest that the upgrades needed to meet the new standard will make internal combustion engine (ICE) cars and LCVs around 300€ more expensive on average – rising to 2,700€ for trucks and buses. Of course, fleet managers should keep in mind that the extra cost can be spread over the duration of a 36-54-month contract, helping to cushion the impact.
But there’s something else to keep an eye on: the expected increase in fleet CO2 emissions. BEVs will, for the first time, be awarded an emission value, indicating their levels of non-tailpipe emissions. Meanwhile, the WLTP will become more stringent, with a particularly significant impact on PHEV results, to the extent that we expect this to quickly erode any remaining business case for this type of powertrain. With the offer of ICE vehicles also diminishing, opting for a fleet policy based solely around BEVs will become increasingly normal.
And there’s no time to waste. Assuming Euro 7 meets with the EU approval and comes into effect in 2025 as scheduled, fleet managers have limited time to prepare. Phasing out ICE vehicles, and perhaps PHEVs of a battery-only policy looks like the best place to start.
Contact LeasePlan to find out how our solutions and services can help futureproof your fleet.