EUROPEAN COMMISSION

Brussels, 30.3.2023

SWD(2023) 65 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

on the approval and market surveillance of non-road mobile machinery circulating on public roads and amending Regulation (EU) 2019/1020

{COM(2023) 178 final} - {SEC(2023) 145 final} - {SWD(2023) 64 final} - {SWD(2023) 66 final}

Table of contents

1.Introduction: Political and legal context

1.1.What is non-road mobile machinery?

1.2.Political and legal context

1.3.The non-road mobile machinery sector

2.Problem definition

2.1.What is/are the problems?

2.2.What are the problem drivers?

2.3.How will the problem evolve?

3.Why should the EU act?

3.1.Legal basis

3.2.Subsidiarity: Necessity of EU action

3.3.Subsidiarity: Added value of EU action

4.Objectives: What is to be achieved?

4.1.General objectives

4.2.Specific objectives

5.What are the available policy options?

5.1.What is the baseline from which options are assessed?

5.2.Description of the policy options

5.3.Options discarded at an early stage

6.What are the impacts of the policy options?

6.1.Policy Option 1.a – Type-approval

6.1.1 Economic impacts

6.1.1.1 Impact on manufacturers and distributors (large enterprises and SMEs)

6.1.1.2 Impact on rental companies and end users

6.1.1.3 Impact on Member States authorities

6.1.1.4 Impact on technical services

6.1.1.5 Impact on competitiveness

6.1.1.6 Impact on single market

6.1.2 Social impacts

6.1.2.1 Road Safety

6.1.3 Environmental impacts

6.2.Policy Option 1.b – Simplified type-approval

6.2.1 Economic impacts

6.2.1.1 Impact on manufacturers and distributors (large enterprises and SMEs)

6.2.1.2 Impact on rental companies and end users

6.2.1.3 Impact on Member States authorities

6.2.1.4 Impact on technical services

6.2.1.5 Impact on competitiveness

6.2.1.6 Impact on single market

6.2.2.1 Road Safety

6.2.3 Environmental impacts

6.3.Policy Option 2 – CE Marking (New approach type of legislation)

6.3.1 Economic impacts

6.3.1.1 Impact on manufacturers and distributors (large enterprises and SMEs)

6.3.1.2 Impact on rental companies and end users

6.3.1.3 Impact on Member States authorities

6.3.1.4 Impact on technical services

6.3.1.5 Impact on competitiveness

6.3.1.6 Impact on single market

6.3.2 Social impacts

6.3.2.1 Road Safety

6.3.3 Environmental impacts

6.4.Directive or regulation

6.5.Mandatory versus optional

6.6.Include (or not) towed equipment

6.7.Limit (or not) the scope to a maximum design speed up to 40 Km/h

7.How do the options compare?

8.Preferred option

8.1.Simplified type-approval, mandatory, covering self-propelled machinery only and with a maximum design speed limit up to 40 km/h

8.2.Choice of the instrument: a regulation.

9.How will actual impacts be monitored and evaluated?

Annex 1: Procedural information

1.Lead DG, Decide Planning/CWP references

2.Organisation and timing

3.Consultation of the RSB

4.Evidence, sources and quality

Annex 2: Stakeholder consultation

Annex 3: Who is affected and how?

1.Practical implications of the initiative

2.Summary of costs and benefits

Annex 4: Analytical methods

Annex 5: Vehicle features

Glossary

1.Introduction: Political and legal context

1.1.What is non-road mobile machinery?

Non-road mobile machinery (hereafter 'NRMM’, or simply ‘non-road mobile machinery’) means any self-propelled or towed vehicle machinery that is designed and constructed specifically to perform work and which, because of its construction characteristics, is not suitable for carrying passengers or for transporting commercial goods. In this impact assessment, tractors are not considered non-road mobile machinery 1 . 

In the execution of their work, these machines are often required to move around and may, from time to time, need to circulate on the road to go from one workplace to another.

The main types of non-road mobile machinery belong to the agricultural and forestry, construction, garden, material handling and municipal equipment sectors. Non-road mobile machinery may have a huge variety of designs, depending on the intended use of the machinery. Some examples 2 of non-road mobile machinery are:

·Agricultural and forestry: Combine harvesters, forage harvesters, sprayers;

·Construction: Loaders, excavators/diggers, dumpers, telescopic loaders, mobile cranes;

·Garden: Ride-on mowers;

·Material handling: Forklifts, side loaders, tele handlers;

·Municipal: Street sweepers, lifting platforms, snow cleaners.

Figure 1. Main non-road mobile machinery sectors

Agricultural    Construction    Garden     Material handling   Municipal

1.2.Political and legal context

Over the last decades, substantive efforts have been made to harmonise different aspects affecting non-road mobile machinery, such as the product safety 3 , pollutant emissions 4 , noise emissions 5 as well as electromagnetic disturbances generated by these machines 6 . However, no harmonisation exists as regards the technical requirements for the road circulation of non-road mobile machinery.

The Machinery Directive 7 is the regulatory basis governing the safety of non-road mobile machinery placed on the EU market. It requires that non-road mobile machinery placed on the single market meet the essential health and safety requirements set out in the Annex I to the Directive. These requirements cover the off-road travelling function of non-road mobile machinery such as slowing down, stopping, braking, driving seats, restraint systems, etc. However, the essential health and safety requirements in the Machinery Directive are designed to cover the occupational safety, i.e. when machinery is at work, but do not cover the safety aspects related to the circulation of this machinery on public roads 8 .

In EU law, the technical safety of vehicles, including the requirements for road circulation are harmonised and regulated in vehicle type-approval legislation such as Regulation (EU) 2018/858 on the approval and market surveillance of motor vehicles and their trailers 9 , or Regulation (EU) No 167/2013 on the approval and market surveillance of agricultural and forestry vehicles 10 . However, these legislative acts do not cover non-road mobile machinery, with the following exceptions: categories R (agricultural trailers) and S (agricultural interchangeable towed equipment), for which manufacturers can apply for road approval under Regulation (EU) No 167/2013 on an optional basis, and most of the towed equipment today can be homologated under category O (trailers). All other mobile machines are not covered by the type-approval framework. This leaves a gap in the single market as manufacturers need to comply with different technical rules and conformity assessment procedures set up by each EU country. 

For many years, the industry has informed the Commission about the administrative and cost burdens manufacturers are facing due to non-harmonisation of road approval requirements for non-road mobile machinery. 11

The Commission proposal for a Tractor Regulation in 2012 12 included a category type of agriculture non-road mobile machinery. However, during the legislative process, this category was disregarded. Instead, Recital 6 of Regulation (EU) 167/2013 13 was introduced, asking the Commission to carry out a study to identify policy options for harmonising road approval requirements for non-road mobile machinery. In reply, the Commission launched an impact assessment study, which was finalised in 2016 (the ‘impact assessment study’ 14 ). This study focused on the direct costs faced by stakeholders in compliance with the different requirements in the EU countries and did not provide enough reliable information on the indirect costs incurred by the different stakeholders, despite these costs being significant. As a result, the Commission commissioned a second study focusing on the costs and benefits of the different policy options that are the subject of this impact assessment. This second study was finalised in 2019 (the ‘costs and benefits study’ 15 ). Both studies are contributors to this impact assessment report, together with public and targeted consultations, workshops and other meetings held with stakeholders including Member State authorities, technical services for road approvals, manufacturers and distributors, rental companies and individual end users (see Annex 2 to this report for more details).

The following table presents the existing legal frameworks as regards vehicle safety legislation:

Table 1. Vehicle safety legal framework

 Category descriptions: M: vehicles carrying passengers; N: vehicles carrying goods 16 ; O: Trailers; L: 2- and 3-wheel vehicles and quadricycles; T: wheeled agricultural and forestry tractors; C: tracked agricultural and forestry tractors; R: agricultural trailers; S: agricultural interchangeable towed equipment.  17  

Type-approval legislation and the Machinery Directive are fundamentally different frameworks for product safety legislation. The type-approval framework (in green in the above table) is sometimes referred to as the ‘old approach’ legislation, where technical specifications are embedded in the legal text itself. Type-approval describes the process applied by national authorities to certify that a model of a vehicle meets all EU safety, environmental and conformity of production requirements before authorising it to be placed on the EU market. In practice, the manufacturer makes available a number of pre-production vehicles that are equal to the final product. These prototypes are used to test compliance with EU safety rules (installation of lights, braking performance, stability control, etc.). If all relevant requirements are met, the national authority delivers an EU vehicle type-approval to the manufacturer authorising the sale of the vehicle type in the EU. The approval granted by one Member State authority is valid throughout the entire EU (i.e., certified once, accepted everywhere in the EU). Every vehicle produced is then accompanied by a certificate of conformity, in which the manufacturer certifies that the vehicle corresponds to the approved type. Based on this document, the vehicle can be registered anywhere in Europe.

In contrast, the Machinery Directive (in orange in the above table) follows the ‘new approach’ principles of EU legislation, where the legal text only lays down the essential health-and-safety requirements to be complied with by the product, without prescribing any specific technical solution for complying with those requirements. This creates a technologically neutral legal act that allows manufacturers to develop new innovative designs to comply with the legislative requirements. To help manufacturers prove that their machinery conforms to the requirements, harmonised standards whose references are published in the Official Journal of the European Union provide a presumption of conformity with the requirements in the legal act. However, their use always remains voluntary.

In the absence of harmonised rules, the principle of mutual recognition allows for the free movement of goods in the single market. Mutual recognition guarantees that any good lawfully sold in one EU country can be sold in another Member State without the need for dedicated EU harmonising legislation. However, the principle of mutual recognition is hard to apply in highly technical and regulated areas of the economy. The strong diversity of national rules, the big variety of machinery products, the sensitive political nature of road safety for Member States and the strong burden of proof with respect to the demonstration of technical equivalence, all prevent mutual recognition from being an adequate alternative to EU harmonising legislation (see sections 2 and 5).

Both the Type-Approval legislation and the Machinery Directive are frameworks regulating product safety features and do not affect other aspects that may be regulated with the aim to ensure safety on the roads, such as road infrastructure rules, circulation rules (speed limits, prohibition to circulate in certain roads, etc.), driver licences and other.

This initiative is consistent with the Commission’s New Legislative Framework 18  and policy on the Single Market (Single Market Act) 19 . 

1.3.The non-road mobile machinery sector

The non-road mobile machinery industry cannot be statistically defined as a ‘sector’, as it consists of a range of products that cover different sectors such as agricultural (excl. tractors), construction, garden, material handling and municipal equipment.

The overall non-road mobile machinery EU production value can be estimated at €12.5 billion, based on 2019 data 20 . The covid-19 pandemic in 2020 affected the sector, which presented lower production figures. Nonetheless, the industry showed a relatively prompt recovery from the crisis in 2021. In any case, production figures for 2019 are considered more representative for the sector than those for 2020. Annual production figures for each category of self-propelled and towed non-road mobile machinery in 2019 are reported in Annex 4.

The production of non-road mobile machinery in the EU is highly concentrated in a small number of EU countries. Almost 80% of the production is in just six EU countries: Germany (37 %), Italy (11%), France (10%) and Finland, Sweden and Austria (7% each).

The production of non-road mobile machinery in the EU is carried out by both large and small manufacturers. Like in other segments of the machinery industry, a small number of large companies control large shares of the market, while SMEs tend to be more specialised in niche markets. An estimation of size distribution points to SMEs accounting for 98% of all companies registered. Nevertheless, large enterprises contribute 82% of the sector’s revenues and 70% of employment 21 .

The EU non-road mobile machinery sector is a significant producer and strong exporter of non-road mobile machinery globally. Out of the annual production value, 42% exported to non-EU countries and 54% is traded intra-EU, hence only 4% is sold in the EU country where production takes place 22 . Thus, non-road mobile machinery producers are extremely reliant on road approval in other countries.

2.Problem definition

2.1.What is/are the problems?

The lack of harmonisation leads to considerable differences across EU countries in technical requirements and approval procedures, and therefore harms the correct functioning of the single market. Some EU countries have a conformity assessment procedure for the entire non-road mobile machinery similar to a type-approval with third party testing (e.g., Austria, Germany, Italy, Portugal, Slovak Republic, Spain; France for agricultural self-propelled machinery only, but not for construction machinery). Other countries have lighter processes, based on documentation from the manufacturer (e.g., Belgium, Luxembourg, Greece), on internal production control (Estonia), on CE Declaration of Conformity under the Machinery Directive (Finland, Latvia) or on in-house certification (Sweden).  23

The most demanding requirements categories include vehicle performance and control (especially braking and max. speed), vehicle dimensions (max. weight/length/width), road surface protection (max. axle loading, max. surface contact pressure), vehicle awareness (in particular, lighting, signalling and reflectors), operator vision (including operator field of vision and mirrors) and vehicle design (mechanical towing couplings). The following table provides a detailed overview on each category of requirements.

Table 3. Vehicle features relevant for road safety

It is estimated that about half of current national technical requirements mainly translate into high administrative hindrance for non-road mobile machinery manufacturers, as the technical differences are minor, but manufacturers need to keep track of the different requirements between Member States 24 . For example, there are different requirements for markings across Member States. These markings come in different sizes, colours, shapes. The manufacturer needs to ensure that the right markings are installed in the right place on the machines. This procedure is not technically challenging, but requires additional logistics, proper sequencing and high doses of precision. In addition, technical requirements also can be contradictory in areas such as markings, lights or warnings, where the requirements in terms of position, colour or shape may be different and overlap, creating contradictory requirements.

The other half of the current national technical requirements present a more technical challenge for implementation. For example, certain diverging requirements such as those related to braking are technically difficult to implement and require much more effort as they may require changes to the core design of the vehicle in question. 25  On complex technical requirements, what often happens is that some may be more stringent, rather than contradictory. For instance, on vehicle performance and control braking systems, some countries require two braking systems, whereas other countries require three braking systems (service, parking, and emergency braking). 26

Due to the lack of harmonisation at EU level, individual countries have issued specific requirements to address safety of non-road mobile machinery circulating on the road, and this has led to a situation where this kind of equipment may not be developed and produced in a single version to fulfil those requirements. Such non-harmonisation leads to entry barriers to EU markets, and increased direct and indirect costs for manufacturers. In fact, the multiplication of different requirements in the various EU countries obliges manufacturers to produce many versions of the same machine model in order to sell it within the EU. The effort to get familiarised and comply with multiple rules is proportionally bigger for SMEs than for large companies, particularly for those SMEs producing low volume but highly specialized export-oriented machines 27 .

Depending on the market situation, these costs may be passed on towards downstream clients, preventing a level playing field for downstream clients, who do not have access to the same variety of products 28 and at the same prices across the EU 29 .

In addition, also the use of non-road mobile machinery is reduced due to national requirements. For example, rural contractors or construction companies, which provide services in multiple EU countries, may not be able to use their non-road mobile machinery across Member State borders, due to the costs and regulatory requirements associated with the need to adapt to different rules for circulation in border countries.

Finally, feedback from stakeholders suggests that the different national legal requirements for the road approval result in differences in the level of safety requested between EU countries. Germany, Italy and France can be considered not only the main producers of non-road mobile machinery but also the most demanding Member States in terms of road approval requirements. Other Member States still have comparatively lower requirements.

According to the costs and benefits study, under the current system, all stakeholders in the EU incur costs of just over €6 billion over ten years 30  to comply with, and to maintain the road safety requirements for non-road mobile machinery. Such costs are borne by three stakeholder groups: €3 561 million (59%) by manufacturers and distributors 31 ; €2 442 million (41%) by rental companies and end users 32 ; and €23 million by MS authorities 33 . Costs for MS authorities are limited in comparison with the other two. Out of 19 authorities responding to a targeted consultation carried out by the Commission 34 , only 3 estimated a significant effort’ to enforce new EU rules, corresponding to countries where road circulation rules are very loose or non-existing today.

ØEU manufacturers and distributors 35 (large enterprises and SMEs) are presently incurring compliance costs of approximately €3 561 million over ten years to comply with the current safety requirements and to obtain the necessary certification and approvals for the road circulation of non-road mobile machinery, as defined in national legislation set by the Member States. Compliance costs for manufacturers and distributors were estimated at 4% of the industry’s production value.

As seen in section 1, SMEs account for 18% of the NRMM market revenue, hence out of the €3 561 million compliance costs borne by manufacturers and distributors over ten years, at least €641 million are borne by SMEs.

The direct costs for manufacturers and distributors account for 28% of total compliance costs. However, the biggest cost are the indirect costs, amounting to 72% of the total compliance costs, which are mostly due to market entry delays 36 . As a result, of the total compliance costs estimated over ten years at €3 561 million, €2 564 million (72%) are indirect costs and €997 million (28%) are direct costs.

The figure below presents the breakdown of costs that manufacturers currently incur due to the non-harmonised system of homologation of non-road mobile machinery as shown in the costs and benefits study, classified as direct or indirect.

Figure 2. Manufacturers and distributors compliance costs composition at the baseline

Source: Cost and benefit study - PPMI analysis.

·Direct costs comprise recurring and one-off compliance costs. One off compliance costs include staff familiarisation with the legislation costs, type-approval body testing/third party testing costs, internal company product testing/self-testing costs and product design. Recurring compliance costs include the manufacturing and marking for safety features. Administrative costs relate to the road homologation administrative procedures and are estimated at 4% of the total compliance costs.

·Indirect costs are measured by the costs incurred due to the market delays. The costs incurred by manufacturers due to market entry delays are the lost revenues of manufacturers who, after having completed production of a new machine model, cannot export it. Market delays can originate simply from the need to perform multiple procedures, for instance performing conformity assessment in several countries, storing production and waiting times before being able to export products. According to the industry, the indirect costs related to market delays are the biggest negative economic impact for them, because the lost revenues due to delays in market launches are directly impacting companies’ sales and cash flow, which has stronger financial consequences than the direct compliance costs.

The market entry delays also lead to unpredictable delivery of machines. Due to the highly specialised and in some cases tailor-made aspects of the machinery, many manufacturers produce on-demand only. In the agricultural sector, this leads to strong cyclical peaks, e.g., orders are placed in winter and delivery is expected in the middle of the year, typically prior to harvesting. In such cases, delays in delivery can be more harmful than in a regular and more standard production and may result in machinery not being available in time for a particular construction project or the harvest, with production losses as a possible consequence for end users.

ØEU rental companies and end users presently incur costs of approximately €2 442 million over ten years to comply with the current safety requirements for the road circulation of non-road mobile machinery and to obtain the necessary certification and approvals as defined by national legislation set by the Member States (when this has not been dealt with by manufacturers or distributors). This amount includes both the direct and indirect costs.

The main direct costs for rental companies stem from: familiarisation with the legislation for the road approval of mobile machinery; technical and administrative procedures that include fixing national vehicle compliance or warning signs to meet national road safety requirements; modifying machinery or sending it back to manufacturers. The main indirect costs experienced by rental companies come from time delays due to having to follow the national road safety requirements for the machinery produced in other EU countries.

The main direct costs experienced by end users relate to the need to modify mobile machinery to meet national road safety requirements if manufacturers or distributors have not dealt with this. The main indirect costs for end users stem from lost earnings due to the delay and/or unpredictable delivery of machines.

ØIn total, all EU Member State authorities currently spend around €23 million over ten years on the enforcement of existing rules for the requirements of the road circulation of non-road mobile machinery. The enforcement activities usually include tasks such as granting the approval for non-road mobile machinery, market surveillance, vehicle conformity spot checks, and the removal and storage of non-conforming vehicles.

ØTechnical services were interviewed, although they were not included in the costs and benefit study calculations. The study found out that seven out of eight technical services interviewed claimed that the fee is determined based on the complexity of the product 37 . It is common practice that technical services also spend time and money to drive to the manufacturers’ plants where they carry out the testing and/or inspection. According to the manufacturers’ data, the average annual fee paid for third party testing and certification purposes by a manufacturer is approximately €82 000. Large manufacturers pay around €104 000 annually on average and SMEs pay approximately a third of what large manufacturers pay. Considering that SMEs sell on average 238 machines per year, which is only one-tenth the number of machines sold by manufacturers, SMEs pay a higher fee per machine than manufacturers and therefore experience higher cost burden compared to large firms.

To facilitate the definition of the problems encountered in the market of non-road mobile machinery, they have been split in distinct aspects below. 

ØProblem 1: Barriers to market entry and market delays in the introduction of new machines

As explained above, the cost and benefit study estimated that about 72% of the costs manufacturers face when getting multiple approvals are indirect costs due to market delays, which could be spared if requirements would be harmonised and approvals would be done only once. The major driver of such costs is market delays. Most manufacturers and distributors expect reduced delays under a harmonised system. However, none of them believes that the delays will be cut out completely.

In practice, before the non-road mobile machinery is put on the market, the manufacturer must complete the necessary national approval procedure, also known as 'homologation', which in some countries requires third party verification, to certify that the design and construction respect the requirements stipulated in the national legislation.

Because the requirements for homologation are different between EU countries, manufacturers need to complete the homologation process in each country in which they plan to market their new models of machinery. This creates market entry delays and a consequent significant delay in return on investment for the manufacturer. While large manufacturers are seen as being able to cope with such complexity to cover the whole EU, even if at a higher cost 38 , SMEs producing low volume highly specialized machines perceive such differences often as entry barriers and thus focus on their home countries 39 .

According to manufacturers consulted in the costs and benefits study, the biggest problem is the delays in making profit out of new machine models, caused by the need to go through lengthy homologation processes in various countries. During the interviews with the manufacturers, it emerged that market delays occur when a manufacturer has to adapt machinery to comply with the regulations in other countries. They can also face delays while waiting for national approvals once they reach another EU Member State. The end users, in turn, suffer delayed and/or unpredictable delivery time of machines. Due to the highly specialised and in some cases tailor-made aspects of the machinery, many manufacturers produce on-demand only. Clients are often requested to make up-front down payments and, in advance of the receipt of their ordered products, they prepare time specified plans for the use of their machinery. However, as mentioned already, road approval requirements can lead to delays in delivery, which can result in machinery not being in time for a particular construction project or the harvest, with production losses as a possible consequence. This problem is especially acute for some products subject to strong seasonality, as it is often the case in the agricultural sector.

ØProblem 2: High compliance costs for companies

Manufacturers are usually responsible for the homologation of series production machinery, which covers most of the cases. However, for individual approvals, homologation can be undertaken either by the manufacturer or by the owner/end user.

The cost and benefit study estimated that about 28% of the costs manufacturers face when getting multiple approvals are direct costs of compliance to divergent or multiple requirements, i.e., could be significantly reduced if requirements would be harmonised and approvals would be done only once. The figure below depicts the key compliance activities that generate direct costs to industry.

Figure 3. Road approval compliance activities

Ø

On design and manufacturing costs, to meet the different homologation requirements in every EU country, manufactures are often bound to adopt different designs of their machinery parts in order to conform to those various national rules. This results in increased costs, which may be passed further down the supply chain until the final user. This also leads to companies limiting their investment in innovation. As an example, non-road mobile machinery designs need to consider different requirements for lighting. In France, lights often need to be designed to fold, or remain in a position where they are more likely to not be damaged when the machinery is in use. Other countries require R65-R10 beacons. It is difficult to design a machine according to ISO visibility standards and at the same time according to each specific national road requirement further testing or technical requirement 40 .

The efforts required for type-approval in some Member States can be very high. Here below are reported examples of three member states 41 :

vIn Germany: In order to be able to apply for national type-approval, the manufacturer or dealer needs to provide information about ISO9002 equivalent standard to the road approval body (initial procedure). The technical service asks the manufacturer for the provision of written information on the machine, specific designs and testing results that indicate that there is conformity with existing regulations 42 . Moreover, independent tests are carried out to evaluate the results. The technical service test report based on the company’s information is the document that is transferred to the public administration responsible for the national road approval regulation. The procedure is concluded if this public body decides on the road approval of one specific type of off-road machines.

vIn Italy, third party testing is carried out by the relevant regional office of CPA 43 , a public authority under the Ministry of Transport. The Ministry of Transport checks the report of the regional CPA bureau. If the Ministry of Transport decides on the road approval, this decision is binding for the whole country. In addition, every two years an audit by an organisation appointed by the government takes place in order to review the management system of the manufacturer.

vIn Sweden: The manufacturer of the machine has to provide a certain amount of technical documentation and certification that systems and components fulfil the requirements of the legislation and must certify that the machine complies with applicable legislation 44 . Additional extensive practical tests are to be conducted at the discretion of the technical service and paid by the manufacturer. The assigned type designation has to be reported to Swedish Road Authorities as a basis for registration.

Granting road approval for highly specialised machines requires specific expertise, which is not always available at the authorities concerned; it can lead to delays and less prioritisation of the files. Such delays can last up to 6 months or even several years in certain instances  45 . Such delays are problematic especially for smaller players, who might not be able to engage in such an administrative exercise for a long time. As a result, they might focus on home markets. This could lead to limited choice of machines and less competition in the European market.

Different requirements lead to different costs, and these would likely be passed on to consumers 46 . Based on the higher costs (and depending on the pass-on capabilities), downstream clients will need to purchase products at higher prices. The costs borne by manufacturers to launch their new machines in each EU country lead (depending on price elasticity) to downstream clients purchasing machines for higher prices.

In addition to the higher general prices, the barrier to market entry may also introduce a differentiation of sales prices between EU countries 47 . As an example, prior to the introduction of harmonised requirements for tractors (Regulation 167/2013), significant price differences were observed between EU countries in the period between 2005 and 2011. An analysis carried out in 2013 compared prices in Germany, Netherlands, the UK, Finland, France, Italy and Sweden for the same vehicle models, and estimated an average price difference of 10.3%. Cross-border transport and red tape costs accounted for 4.4% of the price difference. Considering the similar nature of the non-road mobile machinery sector, but accounting for the significantly smaller sector size, it can be reasonably assumed that intra-EU price differences for these mobile machines are at least equivalent to the ones previously found for tractors. Industry testimonials confirm the existence of higher prices and price differentiation due to the lack of harmonised rules.

A further reason behind higher and different consumer prices for the same products is related to production and stock management issues. Whilst certain non-road mobile machinery manufacturers are producing on demand only, others are producing in large series. This requires detailed production planning, and detailed forecasts about sales volumes for each product in each market. If these forecasts prove incorrect (which is not unusual), stocks of machinery for certain countries can pile up whilst there may be shortage of machinery originally planned for export to other countries. This will require the manufacturer to either manage this stock (with capital costs incurred as a result) or reconfigure the machinery to adapt it other countries rules (e.g., from a machine destined for the French market to one for the German market). Both options lead to higher costs and inflate production prices, which maybe passed-on to consumers.

This differentiation in product specification and pricing also has a bearing on second-hand market prices, as non-road mobile machinery homologated in one country can be difficult to resell in another country without substantive modifications. This may lead to price decreases for second-hand machines 48 , especially in smaller markets where a second-hand market for specialised pieces of machinery is sometimes non-existent given the high homologation costs.

A further consequence for clients, triggered by the above-mentioned indirect industry costs, is a limited access to certain machines. A farmer in one country has access to the latest range of machines, whilst his colleague from a neighbouring country does not have the option to purchase this product. This differentiated access to machinery can lead ultimately to differences in productivity of downstream producers across the EU. In addition, it leads to axn uneven playing field for competing companies from different EU countries and hence reflects a malfunctioning of the single market.

Because of the high compliance costs for companies, manufactures may reduce investment in product innovation, and this could contribute to the existence of sub-optimal products. Manufacturers are likely to stick to design solutions that work and have been approved in several Member States, rather than innovate on designs and risk expensive, and time consuming, new homologation procedures. Consequently, downstream clients are often in the position where the latest technological advanced machines are not offered in their markets. This reduces the productivity and safety of the users and thus affects their competitiveness.

ØProblem 3: Difficulties in the use of machinery across intra-EU borders

In addition to the indirect costs associated with the homologation of the vehicle itself, the use of non-road mobile machinery itself can be reduced due to national requirements. For example, for rural contractors or construction companies which provide services in multiple EU countries (such as the harvesting of crops for others, or the renting of construction equipment, etc.), the use of non-road mobile machinery across different borders is not always possible.

Stakeholders indicate that in some cases there have been difficulties for construction service providers to take non-road mobile machinery across borders for projects in other EU countries as a result in differences in the national road safety requirements 49 . As a result, it is sometimes more cost effective for service providers to hire compliant non-road mobile machinery in the relevant country where the project is taking place 50 . Alternatively, machinery is moved between workplaces on trucks, without road approval. 

However, a quantification of these problems was not possible.

ØProblem 4: Need for authorities to adapt technical provisions

The current situation obliges each of the EU countries road approval authorities to set up and maintain specific legislation on requirements for the road approval of non-road mobile machinery, whenever there is an evolution in the start of the art. This, however, is seen as a minor problem even by the authorities themselves since they are already handling several approval processes for different types of vehicles. Therefore, it does not translate into a specific objective of this impact assessment.

ØProblem 5: Unequal requirements and technical solutions for the road safety of non-road mobile machinery in the EU

Feedback from stakeholders suggests that different national legal requirements for the road approval result in differences in the level of road safety between EU countries, but does not prove it, due to the lack of granular data. Indeed, several Member States responding to the consultation highlighted the lack of specific statistics on road safety of non-road mobile machinery (e.g., countries accident statistics include tractors and non-road mobile machinery). And even when specific statistics do exist, the data rarely allows for the identification of the vehicle types involved and the causes of the accident. Annex 2 provides road accident statistics including non-road mobile machinery received from Member States.

Nevertheless, during the public consultation, 36 out of 74 respondents replied they were aware of accidents linked to non-road mobile machinery circulating on public roads in their country, among which 31 respondents referred to road accidents that led to the personal injury of one or more persons. Respondents also mentioned knowledge of specific accidents related to movement and manoeuvring of heavy equipment, such as street sweeper trucks and larger construction equipment. The accidents appear to be caused by a lack of visibility when in motion because the operational devices are located under the cab or behind the driver, or related to manoeuvring operations that require constant reversing. Other accidents appear to be related to stability issues and braking failure. Annex 2 includes a list of vehicle features that were mentioned during the public consultation as a cause or a contributor to these accidents.

In addition, the Dutch Safety Board informed about an analysis done in the Netherlands in 2010. Such analysis established then that the width of the construction vehicle, in combination with narrow roads, is a major cause of accidents, as well as the fact that the driver's view is often blocked by parts of the vehicle, tools or charge. In addition, the Dutch Safety Board concluded that the visibility and recognizability of agricultural vehicles in the dark could be a problem. These conclusions are based on an in-depth investigation of 11 serious accidents (in which a serious road injury or death occurred) and the study of 73 fatal accidents involving agricultural vehicles 51 .

Over a period of ten years (2006-2015), an average of 11 road deaths per year in the Netherlands were registered in accidents involving agricultural vehicles. Compared to the early 1990s, the average number of road deaths resulting from accidents involving an agricultural vehicle increased from 1% to 2% of the total number of road deaths in the Netherlands. Agricultural vehicles include agricultural and forestry tractors (tractors) as well as self-propelled work equipment used for agriculture, construction, ground, road and hydraulic engineering and green maintenance. Due to ever-increasing scaling up in agriculture, companies own more and more lots spread over a larger area, which means that their agricultural vehicles travel greater distances on public roads.

Although the accidents reported have not been documented as caused by diverging legislation, a set of technical requirements agreed by all EU countries would likely increase and level the road safety of non-road mobile machinery across the EU. Indeed, because of the lack of available data and personal experiences with accidents, none of the manufacturers and distributors interviewed were certain about the positive impact of harmonisation on road accidents. However, from a normative point of view, most of the participating technical services, and almost half of the Member State authorities, believed that having a harmonised system could raise standards and decrease NRMM road accidents in Europe.

It must be noted that some Member States limit the road circulation speed for non-road mobile machinery at 40 km/h, for safety reasons. As regards potential damage of road infrastructure, the relevant requirements are the maximum axle loading and the maximum surface contact pressure of tyres and/or tracks. However, no particular concerns have been raised in this area.

Differences in rules will continue to widen as has happened over the years, since it has been observed that Member States with stringent road approvals have gradually adapted them following the path of other type-approval legislation, while countries with looser legislation do not tend to make them more stringent. Therefore, in the absence of a policy intervention, a market-driven evolution towards standardisation for an improved safety across the EU would not spontaneously happen. On the contrary, a harmonised policy would allow manufacturers’ competitive strategy to take advantage of economies of scale, by precisely aligning their models to best available standards without any ‘technical contradictions’ imposed by national legislations.

As explained earlier in this section, technical requirements can be contradictory in areas such as markings, lights or warnings, where the requirements in terms of position, colour or shape may be different and overlap. Alignment of machinery models to best available standards is happening on functional safety, ruled by the Machinery Directive, but not on road safety, precisely due to diverging requirements.

2.2.What are the problem drivers?

The problem drivers were explained in section 2.1 together with the problems. A summary is presented here below.

Figure 4. Problem tree