TREMOVE SCP-CAR
A TREMOVE development project adding a waste materials module and introducing endogenous scrappage decisions
This study supports the general IPTS research work in the context of the Integrated Product Policy (IPP), adopted by the European Commission in June 2003. The IPP aims to reduce environmental impacts from products and services throughout their full life cycle. The focus is on market driven measures to reach this goal.
The study also contributes to the research on the new policy framework about “Sustainable Consumption and Production”, which will propose effective and concrete actions towards a low carbon, resource and energy efficient economy. In practice the TREMOVE model is extended with a materials database, to assess the waste flows of end of life vehicles in detail, and TREMOVE is further developed to include endogenous scrappage. Two policies were tested: a feebate (bonus-malus) system and a scrappage scheme.
FEEBATE
A feebate system proved to be a good market-based instrument to guide
consumers towards more fuel efficient vehicles. In the case considered
in this study, average CO2-emissions of new sold vehicles are about 7%
lower with a feebate system in place. This relates to a subsidy-tax
spectrum, depending on the CO2 level of the car, of 500€ subsidy to
1800€ tax for the average vehicle categories.
SCRAPPAGE
It was shown that a scrappage policy can successfully
accelerate penetration of new, environmental friendlier vehicles and
generate an economic incentive to car production industries. A 2000€
subsidy causes a 25% sales increase over the period of the scheme, with
the largest effect in the first year(s). The policy causes a maximal
emissions reduction of 2.5% for CO2, 18% for NOx and 10% for PM, early
in the scheme. The effect diminishes as fleet renewal rate slows down
after the scheme, because sales drop after the scheme. In this sense the
scheme accelerates emission reduction trends (NOx, PM) and slows down
emission increase trends (CO2) only with a few years.
The level of the subsidy determines the success of the policy, but also
the government loss due to accumulated subsidies. These subsidies need
to be compensated by other taxes if the government wants to hold the
same overall revenue-loss ratio. A scheme with a subsidy of 2000€ per
scrapped car can cost several billion € for EU27 in terms of scrappage
subsidy.
COMBINATION
A combined feebate – scrappage policy takes best of both
individual policies. The CO2-emission reduction of average fleet is
better in a combined policy with half the scrappage subsidy compared to
scrappage scheme exclusively. For other pollutants, the emission
reduction is less.
If designed in a careful way, a feebate – scrappage combined policy can
be revenue neutral for government with a feebate system generating
revenue which is applied for scrappage subsidies.
reports
The final report is available here.
period
2008
funded by
JRC Institute for Prospective Technological Studies (IPTS)
partners
Öko-Institut (Berlin), ISI Fraunhofer (Karlsruhe)
researchers
Kris Vanherle, Bart Van Herbruggen
contact
Kris Vanherle
+32 16 31.77.38