- The 31 December 2020 end of EU regulation in the United Kingdom will not be fully implemented in Northern Ireland, and it will continue to be under the EU framework
- All new cars being sold in Northern Ireland will be counted as EU sales, and thus would have to adhere to stricter emission norms of EU
- The average UK car emissions for 2019 was at 127.9 grams CO2 per kilometre, which is about 35 per cent above EU’s 2020 to 2021 target of 95 grams CO2 per kilometre
The withdrawal of the EU regulations from the United Kingdom post 31 December 2020, will bring in more complications to the country than one. Among the many, one of the murkier most is the car emission standards applicable on sale of new cars in Northern Ireland and the rest of the United Kingdom. In the withdrawal arrangement of the UK from the EU, Northern Ireland decided to stick with the EU in terms of the governing regulations while still being a part of the UK. This means there would be two different types of laws, and policies applicable within one country at a particular time, making the work of administration in the country all the more difficult. In particular, the car industry in the UK will be very badly impacted after the passing of the 31 December 2020 EU regulations deadline. The average UK car emissions for 2019 was at 127.9 grams CO2 per kilometre, which is about 35 per cent above EU’s 2020 to 2021 target of 95 grams CO2 per kilometre
From 1 January 2021, all new vehicles sold in Northern Ireland will have to confirm to the 95 grams of carbon dioxide per kilometre emission rule, while the same will not be applicable to the rest of United Kingdom. Not only that it would also mean that the cars now sold in Northern Ireland will be counted as EU sales. This would also mean that the domestic market size for British car manufacturers will also shrink considerably.
The current state of the Automobile industry in the United Kingdom
The car industry is a very important sector for the British economy. The industry is the biggest exporter and foreign revenue earner for the country; it is also one of the largest employers of highly qualified technical manpower. However, since the period of the European Union, the industry had made deep inroads in other union countries from where it sources raw materials and components cheaply apart from skilled manpower at lower wages, and also the EU was its largest market. Ever since the decision of the Brexit withdrawal was made, the situation became precarious for the UK automobile industry. Many of the skilled manpower who belonged to other countries had to leave or continuing them became very expensive for the industry. The components that arrived from other EU countries also became expensive as new tariffs were going to be imposed on them. Overall, the industry would lose a significant amount of its competitive edge once the EU common area regulations come to an end on 31 December 2020, and currently does not have any immediate alternatives to fill in the gap.
Because of the Brexit induced slowdown from 2016 to 2019, and also due to various other cyclical reasons, the British automobile industry has been a bit slow in adopting the EU environment regulations relating to passenger cars. The current gap of 35 per cent in the carbon dioxide emitted per kilometre regulation is because of the lower research and development expenditure the British industry has undertaken in the past few years compared to its other European counterparts.
The future of the Automobile industry in the United Kingdom
In the automobile industry’s vehicle technology is on the verge of making a generational leap. Lithium-ion technology has made it possible to make electric vehicles that give the same level of power and energy efficiency as internal combustion engines, yet at much-reduced carbon emission levels. Given the increasing level of emission standard, it will now be difficult to make vehicles which will adhere to them without significantly jacking up their costs. It is thus imperative that in times to come electric vehicles will be the only viable alternative for car manufacturers if they want to confirm with the prevailing regulations, and not attract heavy fines.
Car manufacturers across Europe have invested heavily in electric vehicle technology during the past few years, and several models have already come up in the market. British manufacturers are also not far behind and are having several projects are in various stages of development, which will help them maintain their competitive edge over their competitors.
The Brexit negotiations and the challenge posed by the coronavirus pandemic
When the United Kingdom and European Union parted ways on 31 January 2020, they had an agreement in place to continue with the Brexit deal negotiation and arrive at an agreement by 31 December 2020. The automobile industry in the UK has a lot of hopes on these negotiations. It has lobbied hard to ensure that they receive their raw materials and components from other union member countries duty-free, as they did before and would also have access to the EU market without any new tariff being imposed.
The outbreak of the coronavirus pandemic, however, has caused many problems for the automobile industry. Not only has it significantly slowed down the Brexit negotiation process but has also severely battered the existing supply lines of most companies, resulting in slow down and production losses in most cases. The complete draw-down of exports perhaps is the biggest hit the industry has taken because of the coronavirus pandemic, which will take at least a couple of months more to recover.
EU emission regulations for cars sold in Northern Ireland is an unwanted complication for the British car industry that is already suffering from so many complications. The Brexit negotiations that are currently going on between the UK and EU could alleviate a lot of these problems for the industry to maintain the lead it has over its competitors. Thus it is imperative on the negotiators on both sides that they enhance their efforts to close their deal before the year-end.
In the meantime, however, efforts also need to be made to explore new markets and explore possibilities of trade deals with countries outside of EU so that the over-dependency of British companies on the EU can be reduced.
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