52000PC0639

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL modifying Directive 94/25/EC on the approximation of the laws, regulations and administrative provisions of the Member States relating to recreational craft

(presented by the Commission)

TABLE OF CONTENTS

EXPLANATORY MEMORANDUM

1. Introduction

2. Justification of the proposal

2.1. Background

2.2. Economic, Scientific and technical basis for the proposal

2.3. Objectives of the proposed Directive

3. Need for action at Community level - Subsidiarity

3.1. What are the objectives of the proposed measure in relation to the Community obligations-

3.2. Is the proposed measure an exclusive Community competence, or a competence shared with the Member States-

3.3. What is the Community dimension of the problem- What solution has been in force until now-

3.4. What is the most effective solution comparing the means of the Member States and the Community-

3.5. What added value does the proposed measure offer the Community-

3.5.1. Benefits for the recreational marine engine and boating industry

3.5.2. Benefits for the environment

3.6. Cost of the proposed directive

3.7. Cost efficiency (exhaust emissions)

3.8. What action is available to the Community-

4. Comparison of the proposed directive with other legislation relating to recreational marine engines

5. Results of consultation with partners

6. Choice and justification of the legal basis

7. Comments on the individual articles of the proposal

7.1. Article 1 of the modified directive (scope)

7.2. Article 4 of the modified directive (free movement of products)

7.3. New Article 6a (Regulatory Committee)

7.4. Article 7 of the modified directive (safeguard clause)

7.5. Article 8 of the modified directive (conformity assessment)

7.5.1. Conformity Assessment with regard to exhaust emissions

7.5.2. Conformity Assessment with regard to noise emissions

7.6. Article 10 of the modified directive (CE Marking)

7.7. Annex I of the modified directive (Essential Requirements)

7.7.1. Exhaust emissions limit values

7.7.2. Noise emission measurement

7.8. Annex VI of the modified directive (Internal production control plus tests: Module Aa)

7.9. Annexes VIII, X, XIII, XIV and XV of the modified directive

7.10. New Annex XVI of the proposed directive (Product Quality Assurance for Exhaust Emissions)

7.11. New Annex XVII of the proposed directive (Conformity of Production Assessment for Exhaust Emissions)

7.12. New Article 2 (Durability)

7.13. New Article 3 (transposition into national law)

7.14. New Articles 4 & 5 (entry into force, address)

DIRECTIVE

ANNEX

IMPACT ASSESSMENT FORM

EXPLANATORY MEMORANDUM

1. Introduction

Directive 94/25/EC is a New Approach Directive dealing with the design and construction of recreational craft. It became fully operational in June 1998, after a four-year transition period.

The purpose of the proposed amendment to this Directive is to include harmonised provisions on exhaust and noise emissions from engines intended to be installed on recreational craft.

The proposed directive lays down limits:

- for exhaust emissions of carbon monoxide, hydrocarbons, nitrogen oxides and particulate pollutants, with different limits depending on engine rated power for 2-stroke spark-ignition, 4-stroke spark-ignition and compression-ignition engines.

- For noise emissions for the boat/engine installation, depending on power rating and the type of engine and its installation, (e.g. inboard/stern drive, outboard drive, personal watercraft, single or multiple engine installations).

The incidents that led the Commission to consider the inclusion of environmental aspects in Directive 94/25/EC are the following:

- The adoption of Lake Constance shipping ordinance (Bodensee-Schifffahrtsordnung). Germany, Switzerland and Austria, the three countries bordering the Bodensee, are involved in regulating everything concerning the lake on an international basis. Exhaust and noise emissions rules for recreational marine engines were initiated in the late 1980s. These rules were finalised 1992 and went into effect with stage 1 in 1993 and with stage 2 in 1996.

- The notification on the part of the Swedish government of its intention to introduce national legislation covering exhaust and noise emissions from engines on recreational craft (1996). The proposed legislation that was initially foreseen to be effective on 1 January 1999, is currently waived in order to observe the development of harmonised legislation at EU-level.

- The notification in 1997 of a proposed emissions legislation by the German State of Brandenburg to introduce limits for exhaust and noise emissions.

Other Member States expressed similar intentions.

The Swedish Emissions proposal, as notified to the Commission, drew official observations or detailed opinions from Member States. The majority of comments indicated a general acceptance of the concept of exhaust and noise emissions limits for recreational craft and their engines. At the same time, industry and Member States expressed a clear concern that the proposals, if applied at national level, might constitute an obstacle to the free movement of trade.

In view of the danger of having a fragmentation of the Internal Market from various national laws on emissions, Member States, Industry, users, and representatives of international business organisations requested the Commission to take measures for the harmonisation of emissions limits on a EU-wide basis, and thus ensure a fair and viable trading basis for the sale of marine engines throughout Europe.

2. Justification of the proposal

2.1. Background

Environment and industrial policies are both important pillars for the achievement of sustainable development and increased interrelation between these policies will promote environmental protection, competitiveness, innovation and employment.

In order for environment and industrial policies to be as complementary and mutually supportive as possible, the full range of costs and benefits of the various policy instruments should be identified and put in the balance of a systematic policy assessment framework. Article 174 EC addresses this concern, stating that in preparing policy on the environment, the Community should take into account potential benefits and costs of action or lack of action as well as the economic and social development of the Community as a whole. Along the same lines, Articles 2 and 6 of the Treaty imply that ecological economic and social concerns should be taken into account in the context of measures designed to ensure that the conditions necessary for the competitiveness of industry exist, in application of Article 157 EC.

The process of integrating environmental concerns and sustainable development into other Community policies started at the Cardiff European Council (June 1998) where all relevant formations of the Council were invited to develop integration strategies. Building on this, the Industry Council of 9 November 1999 adopted a Report on "Integrating sustainable development and industry policy" and presented it to the Helsinki European Council. This report identifies the minimisation of pollution, waste, environmental health risks and other pressures, as one of the main objectives of sustainable industrial development.

2.2. Economic, Scientific and technical basis for the proposal

The market of the recreational craft industry in Europe:

According to ICOMIA (International Council of Marine Industries Association) Statistics, 1997, the European Union accounts for 33 % of the world output of pleasure boats (USA, 47 %). If non-EU member countries are also considered the overall European production amounts to 36 %.

Boat park and sales in Europe

ICOMIA estimates that the total boat park in the EU/EEA countries, including Switzerland, was in 1998 in the order of:

Sailboats: // 821 506

Motorboats: // 3 628 000

Inflatables: // 170 000

(not already included with motorboats)

Personal watercraft: // 10 700

Total: // 4 619 506

This figure equates to an approximate ratio of one boat to every 70 members of the European population. As shown above, the majority of pleasure boats in Europe are motorboats.

Personal watercraft share of recreational boat market

In 1998, 11 000 outboard and stern drive engines with similar power range to PWC were sold in Europe, with only a slightly lower figure of PWC being sold in the same period. Excluding Scandinavia, the sales of PWC in the other European Member States exceeds those for outboard and stern drive craft in the same power range. The PWC sector generates a significant contribution to the overall recreational marine industry.

Annual Turnover for EU PWC Operations - 1998

(All amounts estimated and in EUR ex VAT)

>TABLE POSITION>

(Source: ICOMIA)

The distribution of engines according to type and number of engines sold in Europe is shown below. Most of the engine sales are outboard engines, followed by inboard compression ignition engines. Inboard spark ignition engines have only a very limited market share.

Engine sales in Europe in 1998 (in units)

Outboard engines // 196 700

Inboard compression ignition // 26 000

Inboard spark-ignition // 4 916

Personal Watercraft // 10 700

(Source: ICOMIA)

Exhaust emissions and relevant exhaust compounds

In the field of SI engines for non-road mobile machinery the most immediate pollutants to discuss are hydrocarbons and oxides of nitrogen - as precursors to the formation of ozone. In a longer term also particulate emissions, especially from two stroke engines, and perhaps specific toxic hydrocarbons should be studied. Those later pollutants are not covered in this proposed amendment as regards spark ignition engines, but might be covered in a future work since further scientific studies have to be carried out before any concrete measures can be justified and proposed.

Statistics on emissions of air pollution have very much been concentrated on road traffic and stationary sources. Thus there is a certain lack of reliable data on the over all emissions from non-road mobile machinery. In preparing the Directive 97/68/EC to control exhaust emissions from non-road internal combustion engines, the Commission (DG Environment) launched a study on the emissions and the relative importance of different categories of non-road engines. The data used in this study is from the beginning of the 1990s.

Relevant exhaust compounds

>TABLE POSITION>

(Source: European Commission, DG ENV)

Since this study was finished, the first phase of Directive 97/68/EC has been implemented resulting in a reduction of emissions from non-road mobile machinery equipped with diesel engines.

Concerning light on road vehicles three-way catalytic converter technology has been implemented in the beginning of the 1990s resulting in a significantly lower emission of all gaseous pollutants. The standards have stepwise been tightened and a modern light vehicle of today is emitting less than 10 % of what was the case with a vehicle at the late 1980s. A similar development has taken place concerning heavy-duty vehicles although not as effective as for the light vehicles.

Environmental needs

Some results of the Auto-Oil II program concerning the road transport sector are also of interest when evaluating future emission standards for non-road machinery. The aim of this program was to find cost-effective strategies to meet the different air quality standards and other air pollution programs within the EU.

Modelling of the so-called base case forecasts significant reductions in emissions for all "conventional" pollutants for the year 2010. These reductions, which will be even more significant for the year 2020, will translate into important improvements in air quality but may not always be sufficient to reach the air quality objectives mentioned above.

In particular with regard to regional tropospheric ozone, it has been indicated that the improvements in ozone levels, which can be expected, will still leave the Community well short of its objective of no regional-scale excesses of critical levels. The remaining main air quality challenges will be "closing the gap" between the Auto-Oil II base case emission projections and the proposed national emission ceilings for NOx and HC. Excesses in 2010 with respect to national emission ceilings for HC emissions, which is one of the main pollutants from small SI Engines, are reported for several Member States.

Another pollutant that is highlighted in the AO II program is particulate emissions. In this case the cause-effects relationship is still unclear but it is obvious that the number of small particles as well as the content of the particles might be more important that have been thought previously. Therefore this kind of pollutant is of future interest also concerning spark ignition engines - especially two-stroke engines.

Exhaust Emissions of recreational craft

Exhaust gases emitted by recreational craft are causing air pollution problems as well as water pollution problems.

The emissions of recreational craft are very small compared with the sum of emissions of the 11 main emission sources [1]. For CO it is 0,34 %, for HC it is 0,5 % and for NOx it is 0,1 % from the sum of emissions of the main emission sources. However, this global figure can be misleading. Recreational boats are generally used in pleasant weather conditions and mainly at weekends. The crucial factor to evaluate their impact on the environment is the nature of their use, the number of motorised watercraft and the sensitivity of the body of water in question. Especially on bright summer weekends, the amount of emissions in a boating area can not be neglected. Furthermore, summer is the most sensitive reproduction period for amphibian organisms. Studies carried out on behalf of the Federal State of Baden-Württemberg (Germany) and in Sweden have identified the threat posed by the adverse effects on organisms living in the water, caused by the toxicity of the exhaust gases of two-stroke petrol engines. An example of the environmental impact from a single engine is the comparison between the emissions of a 2-stroke spark ignition engine and those of a passenger car. The operation of a 20 kW 2-stroke spark ignition engine for 5 hours results in more ozone producing emissions (HC+NOx) than the average operation of a passenger car, which meet the 1996 EU-Limits (91/441/EC), for one year (15 000 km).

[1] CORINAIR, 1994 Final Version dated 10 April 1997.

Classification of engines

The exhaust emissions from recreational craft mainly depend on the types of engine and their rated power.

The proposal distinguishes between the following three groups:

* 2-stroke spark ignition engines

* 4-stroke spark ignition engines

* compression ignition engines

The three engine types have completely different emission profiles. Additionally different applications in boating will result in different operational profiles. This is the reason why each type of engine was subdivided in classes according to the engine rated power.

2-stroke spark ignition engines

2-stroke spark ignition engines are normally used as an outboard engine in power ratings from 1,5 up to 200 kW. The advantages of 2-stroke engines are the good relation between engine weight and power output combined with low price.

Petrol 2-stroke engines in general suffer from high unburned HC-emissions because of high scavenge losses: typically between 25 % and 40 % of the petrol consumed is emitted as an unburned HC-emission. Furthermore uncontrolled engines tend to run with very fuel-rich mixtures since this is the easiest way to obtain thermal reliability. This leads to high CO-emission and a further increase of HC-emission. Another problem of the two-stroke is the oil emission because of the "lost lubrication" principle: oil is mixed with the fuel and used once, after which it is exhausted (burnt or unburned). On the other hand the emission of NOx is low, partly because of the rich mixture but mainly because of the high internal exhaust gas recirculation inherent in the common two-stroke process.

4-stroke spark ignition engines

4-stroke spark ignition engines are used as an outboard engine as well as an inboard engine. They typically have higher cost and weight as 2-stroke engines with the same rated power. 4-stroke engines have less vibration as 2-stroke engines.

Outboard engines are normally used in power ratings from 2 up to 75 kW but there are also engines up to 200 kW on the market. Inboard engines are used in power ratings up to 400 kW.

The fuel efficiency of 4-stroke engines is much better than the fuel efficiency of 2-stroke engines. 4-stroke engines have lower emissions of hydrocarbons and carbon monoxide than 2-stroke engines. Compared to 2-stroke engines their hydrocarbon emissions are only about 5-10 %

Compression ignition engines

Compression ignition engines are normally used as an inboard engine in power ratings from 5 up to 500 kW. Compression ignition engines are used for inboard and stern drive applications.

Because of the high combustion temperature, the oxides of nitrogen (NOx) are the emission components with most concern. Emission of carbon monoxide and hydrocarbons are on a lower level in comparison to spark ignition engines. Because of the higher complexity of combustion process more particulate matter (soot) is formed than in spark ignition engines.

Noise emissions

Many Europeans consider environmental noise, caused by traffic, industrial and recreational activities as their main local environmental problem. It has been estimated that around 20 percent of inhabitants in western Europe suffer from noise levels that scientists and health experts consider to be unacceptable, where most people become annoyed, sleep is seriously disturbed and even adverse effects on the cardiovascular and psychophysiological systems are to be feared. The increasing number of complaints from the public about noise is evidence of the growing concern of citizens. For example the 1995 Eurobarometer environment survey showed that noise was the fifth most important area of complaint about the local environment (after traffic, air pollution, landscape and waste) but was the only issue about which the public's complaints had increased since 1992.

General Annoyance

A serious effect of environmental noise is that it simply disturbs and annoys people. The feeling of annoyance results not only from sleep disturbance and interference with communication, but also from less well defined feelings of being disturbed and affected during all kinds of activities as well as during periods of rest. Recreational areas with a low noise level are therefore an important but scarce natural resource which must be protected. Because motor boats are frequently used in recreational areas, where peace and quiet are important qualities, such use of boats often causes noise nuisance. Noise may also disturb the sensitive fauna in otherwise undisturbed environments.

Noise emissions from Personal Watercraft

Personal Watercraft produce a high pitch sound in some manoeuvres, and a variable, undulating level of noise in others, all of which many people subjected to it find to be a source of great irritation and annoyance. The effect on wildlife can be even more adverse. Contributing to the problem is speed, on the one hand, and, on the other, the practice of "wave-jumping" or "wake-jumping", which enables a PWC to be completely out of the water in one instant, and into it in the next, thus producing entirely different sound levels and sound characteristics. The end result is far more discomfort to the human ear than a steady level of sound.

The impact of noise emissions from Personal Watercraft on wildlife

A "fact sheet" issued by the US NPCA's Conservation Policy Dept, informed that PWCs are particularly disturbing to wildlife because of their high speeds, unpredictable movements and excessive noise. Because of their size and manoeuvrability, PWCs are able to enter remote regions and areas of shallow water which are often used by fish and wildlife as nesting and reproduction habitat.

A controlled study of PWC on the San Juan Islands (Washington State) by the Woods Hole Oceanographic Institute described how PWC, which lack low frequency long distance sounds, do not warn surfacing birds or mammals of approaching danger until they are almost on top of them causing undue panic and disturbance. The high frequency sounds PWC produce in air and water also startle birds. Scientists in New Jersey (US) observed PWC disrupting nesting Osprey and terns, who fly away from their nests and leave their eggs vulnerable to predators.

2.3. Objectives of the proposed Directive

The aim of the proposed modification is to:

- Contribute to the smooth functioning of the internal market.

- Promote harmonised Community legislation to regulate exhaust and noise emissions of recreational marine engines and avoid market fragmentation and possible barriers to trade.

- Protect human health, the well-being of citizens and the environment by reducing exhaust and noise emissions of petrol and diesel engines intended for recreational craft and personal watercraft.

3. Need for action at Community level - Subsidiarity

3.1. What are the objectives of the proposed measure in relation to the Community obligations-

The proposed modification aims to ensure the free movement of products within the Community and to protect the health and well-being of citizens and the environment. Discrepancies in the national regulations to control exhaust and noise emissions of recreational marine engines could lead to barriers to trade and infringe on the free movement of products, which is the exclusive competence of the Commission.

In order to meet the objective of free movement, a set of essential requirements, together with a set of conformity assessment requirements needs to be established.

Furthermore a Community legislation would ensure a harmonised approach in the EU concerning the construction essential requirements for PWC.

3.2. Is the proposed measure an exclusive Community competence, or a competence shared with the Member States-

It is competence shared with the Member States.

3.3. What is the Community dimension of the problem- What solution has been in force until now-

The exhaust emissions from recreational craft in the EU in 1998 (baseline figures) and once the proposed emissions legislation has been fully implemented (post emissions legislation figures) for 2 and 4-stroke spark ignition engines and for compression ignition engines are as follows:

>TABLE POSITION>

(Source: ICOMIA)

The legislative initiatives to regulate exhaust and noise emissions that have already been launched or promulgated at national level are the following:

- The Bodensee regulation (Stage 1) which went into effect on 1 January 1993.

- The Bodensee regulation (Stage 2) which went into effect on 1 January 1996.

- The State of Brandenburg regulation, that was notified to the Commission in 1997 and will enter into force in January 2003.

- The Swedish regulation, that was notified to the Commission in 1996 and has been waived until the introduction of Community legislation.

3.4. What is the most effective solution comparing the means of the Member States and the Community-

Only a Directive harmonising exhaust and noise emissions requirements will ensure the smooth functioning of the internal market and contribute to the reduction of exhaust and noise emissions affecting the environment and the health of citizens.

3.5. What added value does the proposed measure offer the Community-

3.5.1. Benefits for the recreational marine engine and boating industry

Manufacturers have agreed the need for "clean engines" and legally binding, EU-wide recreational craft emissions regulations. They have for long argued in favour of the harmonisation of emissions limits through a Community directive, as the recreational marine engine industry is small in relative terms and could not afford to build engines to meet different emissions standards in the different EU Member States.

Industry indicated as an example that when the Bodensee limits were imposed, the boating industry on Lake Constance suffered an approximate 60 % decline in turnover. This could be repeated if similar legislation were to be adopted at national level.

3.5.2. Benefits for the environment

Any emission reduction from recreational craft will be advantageous for nature and recreation. The percentage reductions of exhaust emissions of CO, HC, NOx and Particulates are given in para. 3.3 above. These total reductions are shown below for all recreational marine engine emissions in graphical form:

>REFERENCE TO A GRAPHIC>

3.6. Cost of the proposed directive

The introduction of requirements relating to exhaust and noise emissions involves costs due to the new limit values, the timeframe for introduction and the conformity assessment procedures being implemented.

Outboard engine manufacturers have on average 24 engine families in their programmes within a range of 1,5 kW to 220 kW to cover the recreational and commercial marine market. The manufacturers of personal watercraft have 3 engine families in their programmes. It is mainly 2-stroke engines which need to be, and are being replaced by newly designed 4-stroke models or direct-injection 2-stroke models. For 2-stroke manufacturers converting to 4-stroke models, prior investment in new machine tools has to be made since the construction of 4-stroke engines is entirely different from that for 2-strokes. For old-technology 2-stroke engines converting to direct-injected 2-strokes, the previous simple carburettor system has to be changed to high pressure computer controlled fuel/air management systems with newly designed crank cylinder assemblies. On average, the cost per company for the conversion of one engine family to become low-emission (LE) capable amounts to EUR 10M. Therefore, a company's total average cost to convert all its engine families would amount to EUR 240M (24x10M) for outboard engines and EUR 30M (3x10M) for personal watercraft.

Furthermore, industry points out that the companies would be unlikely to increase their unit costs in the market place by more than 2 or 3 % for fear of destroying the market.

Today a recreational marine outboard engine costs on the open market from EUR 1 662 for a small range 4-stroke to EUR 15 609 for a high range 2-stroke. According to IMEC calculations, the introduction of new technology design requirements involves an average unit cost increase to the recreational marine engines industry of between 13,3 to 30,6 in % of the retail price. This cost increase will however be spread gradually by the manufacturer over a period of 10 years or more. Also the new technology marine engines will give reduced operating costs for the consumer due to reduced fuel consumption. According to IMEC, fuel and oil consumption figures are likely to be improved (reduced) by up to 30 %, when based on a E5 duty test cycle.

Fuel consumption savings in EUR are shown in the table of cost/benefit calculation for outboard engines and personal watercraft (see 3.7 below). Fuel consumption savings are calculated over the useful life of the engine (10 years or 350 hours for outboard engines).

For compression ignition engines, industry estimates that the unit cost increase per engine model will be kept within the range of 1-5 % on the retail price. Specifically, it is envisaged that most engine manufacturers will not increase their retail cost by more than 2 or 3 % per annum for fear of destroying the market. These envisaged increases in retail price take account of the conformity assessment costs for the new exhaust and noise emissions requirements.

According to industry estimations, maximum conformity assessment costs for exhaust emissions on a per engine model basis might be in the order of EUR 5 000. With an absolute maximum of 24 models, total costs for the larger companies could therefore be EUR 120 000. However, real cost will probably be far lower and will in any case be spread over several years.

Conformity assessment for noise emissions is likely to be slightly more expensive per engine model than for exhaust emissions. It is estimated that maximum costs per engine model might be in the order of EUR 15 000 for outboard engines and personal watercraft and EUR 20 000 for inboard/stern drive engine models.

3.7. Cost efficiency (exhaust emissions)

Based on IMEC data an attempt has been made to estimate costs and cost/benefit ratios on a per engine basis. The table below gives a summary of the results for outboard engines and personal watercraft (i.e. for the 85 % of the European market). Cost/benefit ratios for outboard engines and personal watercraft are calculated for HC+NOx, as this allows comparisons with the impact of other exhaust emissions regulations (e.g. estimations for HC emissions from motorcycles):

Cost/benefit calculation for Outboard Motors and Personal Watercraft - Based on Current Retail Prices

>TABLE POSITION>

(Source: ICOMIA)

Cost/benefit calculation for diesel engines - Based on Current Retail Prices

>TABLE POSITION>

(Source: ICOMIA)

The range of cost-benefit ratios is between EUR 381/ton and EUR 1 494,9/ton for outboard engines, between EUR 1 313,7/ton and EUR 1 477,9/ton for personal watercraft and between EUR 2 246/ton and EUR 8 116/ton for compression ignition (diesel) engines. These results can be compared with marginal costs estimates for reducing HC emissions from stationary sources (IIASA "Cost effective control of acidification and ground level zone") [2] ranging from EUR 550 to EUR 10 000/ton for the different countries.

[2] Study carried out for the Commission, DG ENV. All reports prepared by IIASA are available on the Internet under: http://www.iiasa.ac.at/~rains.

3.8. What action is available to the Community-

A directive is the appropriate instrument to ensure the smooth functioning of the Internal Market, the free movement of products and a high level of environmental protection.

4. Comparison of the proposed directive with other legislation relating to recreational marine engines

US EPA legislation

Comparable legislation exists in the U.S on exhaust emissions from outboard engines with equivalent limits to those of the proposal. The Environmental Protection Agency is currently preparing legislation for recreational petrol and diesel inboard and stern drive marine engines. It is foreseen that the consultation process on the EPA rulemaking will be launched at the end of 2000. The limits are not yet known. This case is under discussion bilaterally under the TABD auspices, with a view to achieving harmonisation between EU and US legislation.

Brandenburg Shipping Order

The exhaust emission limit values of the Brandenburg Shipping Order are in line with the limit values of the proposed Directive. The relevant noise emission limit values are consistent with those proposed by the Commission for engines up to 40 kW. However, no higher limit is at present proposed for larger engines.

Swedish legislation on recreational marine engines

The exhaust and noise emission limits of the proposed Directive are in line with the limits of the Swedish legislation on recreational marine engines.

Bodensee-Schifffahrtsordnung Stage II

The exhaust limit values for compression ignition engines are similar to the limits of the proposed Directive. For 4-stroke and 2-stroke spark ignition engines, the Bodensee Stage II limits are lower. The noise limit values are similar to those of the proposed Directive.

5. Results of consultation with partners

At the various stages of preparation of this proposal all interested parties, i.e. Member States, the EEA Members, Industry, users and CEN have been consulted. The proposal has been extensively discussed at meetings and recently distributed for written comments. Most of the suggestions, comments and contributions have been taken on board.

6. Choice and justification of the legal basis

The legal basis of the proposed Directive is Article 95 of the Treaty for the following reasons:

- The introduction of technical standards concerning exhaust and noise emissions of engines intended for recreational craft and personal watercraft will ensure the proper functioning of the internal market and avoid the creation of technical barriers to trade.

- The harmonisation of the requirements for exhaust and noise emissions performance at Community level is necessary to avoid market fragmentation. A lack of Community-wide legislation could result in national legislation, resulting in increased production costs to comply with different requirements.

7. Comments on the individual articles of the proposal

7.1. Article 1 of the modified directive (scope)

Article 1 of Directive 94/25/EC is replaced by a new article which:

- Defines all products subject to the proposed directive, including personal watercraft, broken down into three sub-sectors corresponding to design and construction, exhaust emissions and noise emissions requirements respectively.

- Specifies the list of products excluded from the scope of the proposed directive, broken down, along the same line, into three sub-sectors.

- Lays down the definitions of the products covered by the proposed directive.

- Includes the definitions of the manufacturer and the authorised representative to clarify their role under the directive.

7.2. Article 4 of the modified directive (free movement of products)

A new paragraph 3a is added to the 1994 text of Article 4 to ensure free movement of inboard and stern drive propulsion engines, when these engines are accompanied by a declaration by the manufacturer or his authorised representative that the product will meet the exhaust emissions requirements of the proposed directive.

The underlying principle is that inboard/stern drive engines can function properly only when they are placed inside a boat.

This provision is in line with a similar provision of the Machinery Directive (98/37/EC) where machinery that cannot function independently and is intended to be incorporated into machinery or assembled with other machinery, need not bear the CE mark.

Furthermore, it has been argued that inboard/stern drive engine manufacturers produce similar and sometimes the same engines for assemblies covered by the Machinery Directive and by the proposed directive and cannot guarantee during the manufacturing process in which assembly (machinery or boat) the engines will be ultimately fitted.

7.3. New Article 6a (Regulatory Committee)

As established in this new Article of the modified Directive, the Commission assisted by a Regulatory Committee will be empowered, in the light of advances in technology, to carry out any necessary amendments to Annex I.B.2, as regards the reference to exhaust emission limits and specific duty cycles and fuels to be used for the exhaust emissions tests and to Annex I.C.1, as regards noise emissions limits. The possibility to amend the directive is limited to this part of Annex I that contains only technical issues not altering the objective of this proposal. All other amendments of the proposed directive require a formal amendment procedure.

7.4. Article 7 of the modified directive (safeguard clause)

Paragraph 1 of Article 7 of Directive 94/25/EC is replaced by a new paragraph to reflect the fact that inboard/stern drive engines must be accompanied by the manufacturers' declaration of conformity referred to in Annex XV.

7.5. Article 8 of the modified directive (conformity assessment)

Article 8 of Directive 94/25/EC is replaced by a new Article which:

- Extends the range of modules available under the Module Decision 93/465/EC, to leave as wide a choice to the boat manufacturers as is consistent with ensuring compliance with the design and construction requirements of the proposed directive.

- Sets the range of modules to be applied with regard to the exhaust and noise emissions requirements taking into account the appropriateness of the modules to the type of product, the nature of risks involved and the importance of production.

- Lays down the modules to be applied for certifying compliance of personal watercraft with the essential requirements relating to design and construction.

- Specifies the obligations of the person placing the products on the market in the absence of the manufacturer or his authorised representative.

7.5.1. Conformity Assessment with regard to exhaust emissions

The person responsible to ensure compliance with the exhaust emissions requirements is the engine manufacturer or his authorised representative. The proposed conformity assessment procedures starting with EC-type examination (module B) supplemented by module C (type conformity) are in line with other Community emissions legislation.

Several Member States and industry requested the inclusion of internal production control plus tests (Module Aa). However, in order to ensure a coherent approach with the other relevant Community measures regulating exhaust emissions (Directive 97/68/EC), this request has not been endorsed. Exception is made only for compression ignition engines type-approved according to the above mentioned Directive which are in compliance with stage II emission limits. The proposed conformity assessment procedure for these engines is internal production control (Module A). The reason for this exception is that some of the engines covered by the proposal are similar to those covered by Directive 97/68/EC and that the stage II requirements in this Directive are stricter than the emissions requirements laid down in the proposed Directive. It is reasonable to consider that once the engine manufacturer has obtained type-approval for the engines concerned, no third party intervention is required to certify compliance with the requirements of the proposed Directive.

7.5.2. Conformity Assessment with regard to noise emissions

Insofar as the noise emissions section of the proposed directive is concerned, the following requirements shall apply:

- For outboard-powered craft and for personal watercraft, the personal watercraft/engine manufacturer or his authorised representative established in the Community is required to certify that the sound level complies with the provisions of the proposed directive.

- For stern drive and inboard-powered craft, the boat manufacturer or his authorised representative established in the Community will be responsible for meeting the limits and certifying that the sound level complies with the provisions of the proposed directive.

The responsibility of the boat manufacturer for the certification of stern drive and inboard-powered craft is based on the concept that design and manufacture of the boat engine enclosure and the exhaust system are the primary means of controlling the noise emission characteristics of an inboard engine. This can be accomplished by ensuring that the engine compartment is properly sealed and insulated, the exhaust is vented underwater and/or other appropriate design features are built into the craft.

Reference Boat Concept

In order to reduce the cost of conformity assessment, particularly to SMEs, industry has suggested the use of a reference boat procedure, as an alternative to module Aa (Internal production plus tests). It has been argued that the boat manufacturer needs to work closely with the engine manufacturer, and vice versa, to achieve the required sound levels when the boat/engine combination is being constructed and finally certified. To assist in this process and to avoid a situation where boat-builders might have to test each and every boat/engine model configuration, industry has developed the Reference Boat Concept. The Reference Boat Concept is designed to allow boat manufacturers the opportunity to declare compliance with the noise emissions requirements via self-certification (Module A).

First, a list of Reference Boats must be established by running any normal production boat/engine combination through a full pass-by sound test (in accordance with ISO 14509). Providing the boat/engine combination passes the relevant sound level requirements for its engine size, as stipulated in the Directive, and the Notified Body involved is fully satisfied, the boat may then be CE marked and added to the list of Reference Boats. A master list of Reference Boats will be held centrally. Full details of this Reference Boat Master List will be available for consultation to all boat-builders and/or engine manufacturers, whether large or small.

Subsequently, boat-builders wishing to self-certify their production boat/engine combinations may choose from the master list a Reference Boat most similar to their production boat/engine combination. They would then carry out a detailed comparison between the two boat/engine combinations. Where the differences are negligible and within the stated tolerances or are of no significance, the two boats may be deemed to produce similar sound levels. Under such conditions, the manufacturer may certify the boat in accordance with Module A. Where the differences are deemed to fall outside the stated tolerances or are otherwise too great, either a new Reference Boat should be selected and the comparison procedure be repeated or the production boat/engine combination must be subjected to a full pass-by sound test with third party involvement.

The data or parameters to be examined when comparing a production boat with a selected Reference Boat will be set out clearly in a harmonised standard.

7.6. Article 10 of the modified directive (CE Marking)

Paragraphs 1, 2 and 3 of the 1994 text of Article 10 are replaced by new ones, adapted to the requirements of the proposed directive:

- The products to be CE marked under the proposed directive, are listed according to the requirements (design and construction, exhaust emissions and noise emissions) applied to each type of product.

- The proposed directive excludes the application of the CE marking on inboard and stern drive engines.

7.7. Annex I of the modified directive (Essential Requirements)

Annex I of the 1994 text is amended to include exhaust and noise emissions requirements. The new text is composed of three parts corresponding to the design and construction, exhaust emissions and noise emissions aspects of the proposed directive. Part A) is the old Annex I of the 1994 text.

Several Member States and the group of notified bodies have underlined the fact that the current text of Directive 94/25/EC can create confusion as to what should be displayed on the "builder's plate" (Annex I, section 2.2) and what constitutes the "maximum recommended load" of a boat (Annex I, section 3.6). It has been argued that the weight of fuel and water tanks is correctly included in the definition of the maximum recommended load, but it should not be displayed on the builder's plate as it is unnecessary information and could cause confusion and possible danger from overloading.

Therefore a modification has been included in Annex I.A to clarify that the maximum recommended load displayed on the builder's plate should exclude the weight of the fuel and water tanks when full.

7.7.1. Exhaust emissions limit values

The exhaust emission limit values are determined by the formula:

L = A + //

>REFERENCE TO A GRAPHIC>

where: // * L = limit value

* PN = engine rated power

* A, B, n are constants

According to a study [3]on exhaust emissions regulations, the relative emissions of small engines are higher than those of big engines. In this formula the term A would describe a basic level, valid for high engine power, and the term B/P

>REFERENCE TO A GRAPHIC>

[3] TNO Industrial Research, August 1991.

would describe an "allowance" for smaller engines. The present production seems to agree with this formula. For future legislation the second term of the formula could be chosen so that the "allowance" for small engines is gradually decreased.

Since two-stroke petrol engines, four-stroke petrol engines and diesel engines each have their own specific emission patterns a legislation of equal severity would mean different limit values for these three categories of engines. Taking into account technological limitations, and to ensure that environmental and health objectives can be efficiently met, different emission limits are proposed for the different types of engines.

An important consideration is that legislation in the field of boat's engines is completely new. Past experiences in other fields has shown that in such a case every party involved (manufacturer, legislator, certifying authority) needs time to adapt to the new situation. Experience needs to be gained with the measuring procedure which, although it may be derived from existing procedures in related fields, as a total package is new to everyone and it is likely that there will be "teething troubles".

ISO 8178 shall be used as the test method.

Duty cycles

Other regulatory bodies for emissions testing of compression ignition engines have already selected the E3 test cycle. The IMO Protocols governing NOx emissions from CI engines greater than 130 kW installed on ocean-going vessels specify the use of E3 cycle. As engine technology designs are similar for marine commercial and recreational applications, the use of either the E3 or E5 duty test cycles would allow manufacturers to use common test protocols. This would satisfy multiple regulatory requirements and avoid the potential burden imposed by having to use different test cycles when proving conformity compliance.

7.7.2. Noise emission measurement

The noise emissions limit values are expressed in the following quantity:

LpASmax = maximum AS-weighted sound pressure level, expressed in decibels, as defined in ISO 14509.

Sound testing shall be performed according to ISO 14509. This is a pass-by test measuring the sound pressure level as the craft passes a microphone at maximum speed, or 70 km/h if the craft is capable of exceeding that speed, at an exact distance of 25 m from the microphone.

Background

In anticipation of diverse national noise emissions regulations being applied to powered recreational craft/motors, the ICOMIA Marine Environment Committee (IMEC) initiated the first international survey of noise emissions in 1992, in Maaseik, Belgium. These sound tests had concentrated on outboard engines, which account for 77 % of the European recreational marine engines market. As it soon became clear, further sound tests would be needed to obtain sound data for the other engines on the market, namely inboards, stern drives and personal watercraft. Follow-up sound tests were conducted in 1994, in 1998 and again in 1999.

The effort throughout the sound test programs has been to develop sound level test methods that yield accurate and repeatable results. Efforts have also been made to apply these test methods to determine the state-of-the-art in terms of pass by sound level for powered recreational craft. Additionally, special towing tests were performed in an attempt to determine the lower limits of pass by sound levels that can be achieved with powered recreational craft. These towing tests were performed in the Maaseik and Lake X test series where it was learned that hull noise (no engine running) for craft up to 5,5 m exceeds 72 dB(A) at 70 km/h, the maximum test speed per ISO 14509.

According to IMEC, the results of the Maaseik tests were very beneficial in establishing the state-of-the-art in terms of the level of technology being designed into small recreational craft/motors. However, many new questions were raised as a result of the Maaseik test series. This led to a second sound test series, this time with the primary focus of the testing being directed towards the "Standard Boat" concept for type testing outboard motors along with a revised sound level measurement procedure for recreational craft.

Lake X, located in central Florida, USA, was the site of the second sound test series (1994). The primary objectives of this test series were to investigate the "standard boat" concept, to develop a new ISO sound level measurement procedure suitable for recreational craft to replace ISO 2922 and to further evaluate state-of-the-art noise control for powered recreational craft.

The results of the Lake X sound tests demonstrated that the "standard boat" concept for sound level testing of outboard motors was a reliable, accurate means of evaluating and certifying outboard motors for compliance with legislated sound level limitations. Sound level tests on the same model outboards as tested at Maaseik revealed excellent correlation (97 %) with the Maaseik tests. Consequently, proof was obtained that control of the test parameters with the revised test procedure used at Maaseik and Lake X leads to accurate, repeatable results when used in conjunction with "standard boats". This revised test procedure became the basis for a new measurement standard which is now known as ISO 14509.

Towing tests at Lake X using a high-powered test boat were also performed, extending the rage of towed boat test data into the larger size runabout hulls above the 60 km/h range. The results of the towed boat tests clearly demonstrated that hull noise is a function of hull size and speed, with measured sound levels (without a running engine) reaching - 72 dB(A) at typical speeds for a runabout hull. The position adopted, consequently, was that the sound level limit should allow for equal contribution of the engine and hull to the overall pass-by sound level, which equates to 75 dB(A) at a distance of 25 metres when measured according to the ISO Standard No. 14509.

The use of ISO 14509

ISO 2922 was originally written for commercial craft and equipment and when applied to recreational craft there were numerous operational parameters that were unspecified. During the Lake X test series it has been demonstrated that by changing just one of the test parameters that are not specified by ISO 2922 the pass-by sound level was altered by as much as 12 dB(A). Consequently, when attempting to meet very tough environmental noise limits it is essential that the measurement standard is precise in terms of controlling test parameters and conditions.

Despite complaints about the precise conditions required by the new ISO 14509, there remain variables that can influence the measured sound level when using this new standard. For example, while ISO 2922 allows wind speed variations up to 36 km/h, ISO 14509 imposes a maximum limit of 18 km/h on wind speed. To demonstrate the effect of wind speed/water conditions a 7,4 kW (10 h.p.) outboard powered boat was tested on two consecutive days. The first day the wind speed was 5 km/h and the measured pass-by sound level was 67,2 dB(A). On the second day choppy water conditions caused by wind speeds of 16 km/h elevated the pass-by sound level to 69,2 dB(A), an increase of 2 dB(A).

The test conditions prescribed by ISO 14509 seldom exist in many localities in Europe, thereby making it difficult to perform pass-by testing. However, it is now an established fact that stringent sound level limits for recreational craft require stringent controls on the test environment as described in ISO 14509.

Multiple engine installations

It has been recognised that for larger craft powered by one or more engines, increased noise emissions are likely. Therefore an allowance of 3 dB is given for twin-engines and multiple engine units.

7.8. Annex VI of the modified directive (Internal production control plus tests: Module Aa)

Annex VI of the 1994 text is amended to include tests to assess the conformity of engines with the noise emissions requirements of the proposed directive. The new text is composed of two parts: part A) for design and construction and part B) for noise emissions.

Part A) is the old Annex VI of the 1994 text. Attention was drawn by Member States, industry, notified bodies and users to the anomaly whereby under Module Aa the notified body's number was required to be placed on the builder's plate, when notified bodies were not involved during the manufacturing process. Therefore, the last sentence of the last paragraph of the 1994 text, providing for the affixing of the notified bodies' distinguishing number on the builders' plate, has been deleted in the modified directive.

7.9. Annexes VIII, X, XIII, XIV and XV of the modified directive

These Annexes have been adapted to the requirements of the proposed directive and contain:

- conformity assessment procedures using modules C (Conformity to Type for Exhaust Emissions) and F (Product Verification for Exhaust Emissions) and,

- provisions concerning the technical documentation to be supplied by the manufacturer, the minimum criteria to be taken into account by Member States for the notification of bodies and the written declaration of conformity drawn up by the manufacturer.

7.10. New Annex XVI of the proposed directive (Product Quality Assurance for Exhaust Emissions)

This Annex contains the conformity assessment procedure using module E (Product Quality Assurance) with regard to exhaust emissions requirements.

7.11. New Annex XVII of the proposed directive (Conformity of Production Assessment for Exhaust Emissions)

This Annex contains a method of statistical calculation to verify the conformity of an engine family with the exhaust emissions requirements of the proposed directive.

7.12. New Article 2 (Durability)

This Article requires the Commission to submit a report to the Council and the European Parliament on methods to implement in use compliance testing of engines.

7.13. New Article 3 (transposition into national law)

For both compression ignition (diesel) and 4-stroke engines emission reductions can be achieved quickly, since the relevant technology is already being developed and engine manufacturers can look at the automotive industry for the latest technological advances. However, this does not apply to 2-stroke engines, which represent the "least clean" engine type. Industry has argued that 2005 is the earliest date that all current 2-stroke engine models can be replaced by new technology 2-stroke engines and that it takes considerable research effort, time and cost for the development of these new technology engines.

Therefore, an extension of the final implementation date is granted for 2-stroke engines to allow Member States the time needed to adopt adequate programs, while at the same time provide marine engine manufacturers with the necessary time to develop and implement reliable new technology engines.

7.14. New Articles 4 & 5 (entry into force, address)

These Articles contain standard provisions.

2000/0262 (COD)

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL modifying Directive 94/25/EC on the approximation of the laws, regulations and administrative provisions of the Member States relating to recreational craft

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission [4],

[4] OJ C

Having regard to the opinion of the Economic and Social Committee [5],

[5] OJ C

Acting in accordance with the procedure laid down in Article 251 of the Treaty [6],

[6] Opinion of the European Parliament of [...], common position of the Council of [...] and decisions [...].

Whereas:

(1) Developments since the adoption of Directive 94/25/EC of the European Parliament and of the Council of 16 June 1994 on the approximation of the laws, regulations and administrative provisions of the Member States relating to recreational craft [7], have made it necessary to amend that Directive.

[7] OJ L 164, 30.6.1994, p. 15.

(2) It does not cover personal watercraft, while since its adoption some Member States have introduced laws, regulations and administrative provisions laying down technical requirements for such craft.

(3) The propulsion engines on recreational craft and personal watercraft produce exhaust emissions of carbon monoxide (CO), hydrocarbons (HC), nitrogen oxides (NOx) and noise emissions which affect both human health and the environment.

(4) Noise and exhaust emissions produced by the engines of such recreational craft are also not covered by that Directive.

(5) It is now necessary to integrate environmental protection requirements into the various Community activities in order to promote sustainable development. Such provisions, which are already the subject of the Council Resolution of 3 December 1992 concerning the relationship between industrial competitiveness and environmental protection [8], were recalled in the conclusions of the Industry Council of 29 April 1999.

[8] OJ C 331, 16.12.1992, p. 5.

(6) Laws, regulations and administrative provisions are in force in some Member States limiting noise and exhaust emissions from engines in order to protect human health, the environment and, where appropriate, domestic animal health. Those provisions differ and are likely to affect the free movement of such products and constitute barriers to trade within the Community.

(7) In the framework of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations [9], as amended by Directive 98/48/EC [10] the Member States have notified draft national regulations aimed at reducing noise and exhaust emissions from the engines of recreational craft; such technical regulations are considered, like the national provisions already in force, to be likely to affect the free movement of such products or to create obstacles to the proper functioning of the internal market. It is therefore necessary to draw up a binding Community instrument.

[9] OJ L 204, 21.7.1998, p. 37.

[10] OJ L 217, 5.8.1998, p. 18.

(8) The harmonisation of national laws is the only way to abolish such barriers to trade and unfair competition found in the internal market. The objective of limiting noise and exhaust emissions cannot be satisfactorily met by the Member States individually. The measures provided for in this Directive lay down only the essential requirements for the free movement of all the types of engines to which it applies.

(9) These measures are in accordance with the principles for the implementation of the new approach as set out in the Council Resolution of 7 May 1985 on a new approach to technical harmonisation and standards [11] and of making reference to harmonised European standards.

[11] OJ C 136, 4.6.1985, p. 1.

(10) The provisions on emissions laid down in this Directive should apply to all engines, whether inboard, outboard or stern drive, and to personal watercraft in order to ensure optimum effectiveness in the protection of human health and the environment. Engines undergoing major alterations should also be included as regards gaseous emissions. Craft or partly completed craft with an inboard or stern drive engine, or one of such types of craft whose engine is undergoing major alterations should also comply with the provisions regarding noise emissions.

(11) Conformity with the essential requirements for emissions from the engines concerned is essential to protect human health and the environment. Maximum authorised levels should be laid down for exhaust emissions of carbon monoxide (CO), hydrocarbons (HC), nitrogen oxide (NOx) and particulate pollutants. As far as noise emissions are concerned, the maximum levels should be broken down as a function of the power of such engines and the number of engines on board. These measures are consistent with all other measures to reduce engine emissions in order to protect human beings and the environment.

(12) For the two types of emission in question, the data certifying their conformity should always accompany the recreational craft.

(13) Harmonised European standards, in particular as regards the measurement of levels and test methods, make it easier to demonstrate conformity with the essential requirements, also in the case of emissions from the recreational craft covered by this Directive.

(14) In view of the nature of the risks involved, it is necessary to adopt conformity assessment procedures to ensure the necessary level of protection. The manufacturer or his authorised representative should ensure that the products covered by this Directive comply with relevant essential requirements, when they are placed on the market or put into service, relating to personal watercraft and recreational craft engines as appropriate. Adequate procedures should be laid down which provide a choice between procedures with equivalent stringency. Those procedures should comply with Council Decision 93/465/EEC of 22 July 1993 concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking which are intended to be used in technical harmonisation Directives [12].

[12] OJ L 220, 30.8.1993, p. 23.

(15) As far as exhaust emissions are concerned, all types of engines, including personal watercraft and other similar powered craft, should bear the CE mark affixed by the manufacturer or his authorised representative within the Community, except inboard and stern drive engines, which should be accompanied by the manufacturer's certificate of conformity. As far as noise emissions are concerned, only outboard engines must bear the CE mark affixed by the manufacturer or his authorised representative within the Community. For noise emissions and for all types of engines, except outboard engines, the CE mark affixed on the craft demonstrates conformity with the relevant essential requirements.

(16) Directive 94/25/EC should also be amended, to take account of manufacturing needs, which require a greater choice of certification procedures.

(17) For the sake of legal certainty and to ensure the safe use of recreational craft, it is necessary to clarify the essential requirement concerning the maximum recommended load to be displayed on the builder's plate.

(18) In order to facilitate the application of measures concerning the efficient functioning of legislation, the procedure establishing a close co-operation between the Commission and Member States in the framework of a Committee is maintained and reinforced.

(19) The efficient functioning of legislation requires a mechanism for amending the technical provisions concerning the evolution of exhaust and noise emission limits and of exhaust duty cycles and test fuels in the light of advances in technology; a Regulatory Committee established following the Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [13] would be required to advise the Commission on the measures to be taken.

[13] OJ L 184, 17.7.1999, p. 23.

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 94/25/EC is hereby amended as follows:

(1) Article 1 shall be replaced by the following:

"Article 1

Scope and definitions

1. This Directive shall apply:

(a) with regard to design and construction, to:

(i) recreational craft and partly completed boats,

(ii) personal watercraft,

(iii) components referred to in Annex II when separate and when installed;

(b) with regard to exhaust emissions, to:

(i) propulsion engines intended for recreational craft and personal watercraft,

(ii) propulsion engines installed on or in these craft that are subject to a "major engine modification";

(c) with regard to noise emissions, to:

(i) recreational craft and partly-completed boats, with stern drive or inboard propulsion engine installations,

(ii) recreational craft, with stern drive or inboard propulsion engines that are subject to a "major craft conversion",

(iii) personal watercraft,

(iv) outboard engines intended for installation on recreational craft.

2. The following shall be excluded from the scope of this Directive:

(a) with regard to paragraph 1(a):

(i) craft intended solely for racing, including rowing racing boats and training rowing boats, labelled as such by the manufacturer;

(ii) canoes and kayaks, gondolas and pedalos;

(iii) sailing surfboards;

(iv) surfboards, including powered surfboards;

(v) original, and individual replicas of, historical craft designed before 1950, built predominantly with the original materials and labelled as such by the manufacturer;

(vi) experimental craft, provided that they are not subsequently placed on the Community market;

(vii) craft built for own use, provided that they are not subsequently placed on the Community market during a period of five years;

(viii) craft specifically intended to be crewed and to carry passengers for commercial purposes, without prejudice to paragraph 3, subparagraph a), in particular those defined in Council Directive 82/714/EEC of 4 October 1982 laying down technical requirements for inland waterway vessels [14], regardless of the number of passengers;

[14] OJ L 301, 28.10.1982, p.1, Directive as amended by the Act of Accession of Austria, Finland and Sweden.

(ix) submersibles;

(x) air cushion vehicles;

(xi) hydrofoils.

(b) With regard to paragraph 1(b):

(i) Propulsion engines installed or specifically intended for installation on the following:

- craft intended solely for racing and labelled as such by the manufacturer;

- experimental craft, provided that they are not subsequently placed on the Community market;

- craft specifically intended to be crewed and to carry passengers for commercial purposes, without prejudice to paragraph 3 subparagraph a), in particular those defined in Council Directive 82/714/EEC of 4 October 1982 laying down technical requirements for inland waterway vessels, regardless of the number of passengers;

- submersibles;

- air cushion vehicles;

- hydrofoils;

(ii) Original and individual replicas of historical propulsion engines, which are based on a pre 1960 design, not produced in series and fitted on craft referred to in paragraph 2(a)(v).

c) With regard to paragraph 1(c):

all craft referred to in point (b) of this paragraph.

3. For the purposes of this Directive the following definitions shall apply:

(a) "recreational craft" shall mean any boat of any type intended for sports and leisure purposes of hull length from 2,5 m to 24 m, measured according to the harmonised standard, regardless of the means of propulsion; the fact that the same boat could be used for charter or for recreational boating training shall not prevent it being covered by this Directive when it is placed on the market for recreational purposes;

(b) "personal watercraft" shall mean a vessel less than 4 m in length which uses an internal combustion engine having a water jet pump as its primary source of propulsion and designed to be operated by a person or persons sitting, standing or kneeling on, rather than within the confines of a hull;

(c) "propulsion engine" shall mean any spark or compression ignition, internal combustion engine used for propulsion purposes, including 2-stroke and 4-stroke inboard, stern-drive and outboard engines;

(d) "major engine modification" shall mean the modification of an engine which:

- could potentially cause the engine to exceed the emission limits set out in Annex I.B. excluding routine replacement of engine components that do not alter the emission characteristics; or

- increases the rated power of the engine by more than 10 %.

(e) "major craft conversion" shall mean a conversion of an existing craft which:

- changes the means of propulsion of the craft,

- involves either a major engine modification or the replacement of the propulsion engine by a different type or size of engine,

- alters the craft to such an extent that it is considered a new craft;

(f) "means of propulsion" shall mean the mechanical method by which the craft is driven, in particular marine propellers or waterjet mechanical drive systems;

(g) "engine family" shall mean the manufacturer's grouping of engines which through their design, are expected to have similar exhaust emission characteristics and which comply with the exhaust emissions requirements of this Directive;

(h) "manufacturer" means any natural or legal person who designs and manufactures a product covered by this Directive or who has such a product designed and/or manufactured with a view to placing it on the market under his own name;

(i) "authorised representative" means any natural or legal person established in the Community who has received a written mandate from the manufacturer to act on his behalf with regard to the latter's obligation under this Directive."

(2) In Article 4, the following paragraph 3a shall be inserted:

"3a. Member States shall not prohibit, restrict or impede the placing on the market and putting into service of inboard and stern drive propulsion engines where the manufacturer or his authorised representative established in the Community declares in accordance with Annex XV.3 that the engine will meet the exhaust emission requirements of this Directive, when installed in a recreational craft or personal watercraft in accordance with the manufacturer's supplied instructions."

(3) The following Article 6a shall be inserted:

"Regulatory Committee

Article 6a

1. Amendments which are necessary, in the light of evolution of technical knowledge and new scientific evidence, to the requirements of Annex I.B.2, concerning limit values of exhaust emissions, duty cycles and reference fuels, and Annex I.C.1, concerning limit values of noise emissions, shall be adopted by the Commission assisted by the Standing Committee set up pursuant to Article 6(3), acting as a regulatory committee in accordance with the procedure referred to in Article 6a(2).

2. Where reference is made to this provision, the regulatory procedure laid down in Article 5 of Decision 1999/468/EC shall apply, in compliance with Article 7(3) and Article 8 thereof.

3 The period stipulated in Article 5(6) of Decision 1999/468/EC shall be three months."

(4) In Article 7 paragraph 1 shall be replaced by the following:

"1. Where a Member State ascertains that products falling within the scope of Article 1 and bearing the CE marking referred to in Annex IV, when correctly constructed, installed, maintained and used in accordance with their intended purpose may endanger the safety and health of persons, property or the environment, it shall take all appropriate interim measures to withdraw them from the market or prohibit or restrict their being placed on the market or put into service."

(5) Article 8 shall be replaced by the following:

"Article 8

1. Before producing and placing on the market products referred to in Article 1(1) the manufacturer or his authorised representative established in the Community shall apply the procedures referred to in paragraphs (2), (3), (4) of this Article.

In the absence of the manufacturer and of his authorised representative the responsibilities for the product's conformity to this Directive can be assumed by any natural or legal person established within the Community who places the product on the market under his own name.

2. With regard to design and construction of products referred to in Article 1(1)(a) the boat manufacturer or his authorised representative established in the Community shall apply the following procedures for boat design categories A, B, C and D as referred to in section 1 of Annex I.A:

(a) For categories A and B:

(i) for boats of less than 12 m hull length: the internal production control plus tests (module Aa) referred to in Annex VI, or the EC type-examination (module B) as described in Annex VII, supplemented by module C (type conformity) referred to in Annex VIII, or any of the following modules: B+D or G or H.

(ii) for boats from 12 m to 24 m hull length: the EC type-examination (module B) referred to in Annex VII supplemented by module C (type conformity) referred to in Annex VIII, or any of the following modules: B + D, or B + F, or G or H.

(b) For category C:

(i) for boats from 2,5 m to 12 m hull length:

- where the harmonised standards relating to Sections 3.2 and 3.3 of Annex I.A are complied with: the internal production control (module A), referred to in Annex V, or internal production control plus tests (module Aa) referred to in Annex VI, or the EC type-examination (module B) as described in Annex VII, supplemented by module C (type conformity) referred to in Annex VIII, or any of the following modules: B+D, or B+F, or G, or H.

- where the harmonised standards relating to Sections 3.2 and 3.3 of Annex I.A are not complied with: the internal production control plus tests (module Aa) referred to in Annex VI, or the EC type-examination (module B) as described in Annex VII, supplemented by module C (type conformity) referred to in Annex VIII, or any of the following modules: B+D, or B+F, or G , or H.

(ii) for boats from 12 m to 24 m hull length: the EC type-examination (module B) referred to in Annex VII followed by module C (type conformity) referred to in Annex VIII, or any of the following modules: B + D, or B + F, or G or H.

(c) For category D:

For boats from 2,5 m to 24 m hull length: the internal production control (module A) referred to in Annex V, or the internal production control plus tests (module Aa) referred to in Annex VI, or the EC type-examination (module B) as described in Annex VII, supplemented by module C (type conformity) referred to in Annex VIII, or any of the following modules: B+D, or B+F or G or H.

(d) For personal watercraft:

the EC type-examination (module B) as described in Annex VII followed by module C (type conformity) referred to in Annex VIII, or any of the following modules: B+D, B+E, B+F, or G, or H.

e) For components referred to in Annex II: any of the following modules: B+C, or B+D, or B+F, or G or H.

3. With regard to exhaust emissions:

(a) for products referred to in Article 1(1)(b), the engine manufacturer or his authorised representative established in the Community shall apply the EC type-examination (module B) as described in Annex VII followed by module C (type conformity) referred to in Annex VIII, or any of the following modules: B+D, B+E, B+F, or G, or H.

(b) for compression ignition engines type-approved according to Directive 97/68/EC which are in compliance with stage II provided for in section 4.2.3 of Annex I to this Directive, the engine manufacturer or his authorised representative established in the Community shall apply the internal production control (Module A) referred to in Annex V.

4. With regard to noise emissions:

(a) For products referred to in Article 1(1)(c)(i) and (ii), the boat manufacturer or his authorised representative established in the Community shall apply:

(i) where tests are conducted using the harmonised standard for noise measurement: either internal production control plus tests (module Aa) referred to in Annex VI, or unit verification (module G) referred to in Annex XI, or full quality assurance (module H) referred to in Annex XII.

(ii) where certified reference boat data, established in accordance with point (i), is used for assessment: either internal production control (A) referred to in Annex V, or internal production control plus supplementary requirements (module Aa) referred to in Annex VI, or unit verification (module G) referred to in Annex XI, or full quality assurance (module H) referred to in Annex XII.

(b) For products referred to in Article 1(1)(c)(iii) and (iv), the personal watercraft/engine manufacturer or his authorised representative established in the Community shall apply: internal control plus supplementary requirements referred to in Annex VI (module Aa) or module G or H."

(6) In Article 10, paragraphs 1, 2 and 3 shall be replaced by the following:

"1. When the following products are placed on the market, they must bear the CE marking of conformity:

(a) recreational craft, personal watercraft and components referred to in Annex II, which are regarded as meeting the corresponding essential requirements set out in Annex I;

(b) outboard engines which are regarded as meeting the essential requirements set out in Annex I.B and I.C.

2. The CE marking of conformity, as shown in Annex IV, must appear in a visible, legible and indelible form on the craft and the personal watercraft as in point 2.2 of Annex I.A, on components, as referred to in Annex II and/or on their packaging, and on outboard engines and personal watercraft engines as in point 1.1 of Annex I.B.

The CE marking shall be accompanied by the identification number of the notified body responsible for implementation of the procedures set out in Annexes IX, X, XI, XII and XVI.

3. The affixing of markings or inscriptions on the craft, the personal watercraft, and on propulsion engines which are likely to mislead third parties with regard to the meaning or the form of the CE marking shall be prohibited. Any other markings may be affixed to the recreational craft and components as referred to in Annex II and/or on their packaging provided that the visibility and legibility of the CE marking is not thereby reduced."

(7) Annex I shall be amended in accordance with Part A of the Annex to this Directive.

(8) Annex VI shall be replaced by the text in Part B of the Annex to this Directive.

(9) In Annex VIII the following new point 4 is added:

"4. With regard to the assessment of conformity with the exhaust emission requirements of this Directive, a notified body chosen by the manufacturer must carry out or have carried out product checks at random intervals. When the quality level appears unsatisfactory or when it seems necessary to verify the validity of the data presented by the manufacturer, the following procedure shall be used:

An engine is taken from the series and subjected to the test described in Annex I.B. Test engines shall have been run in, partially or completely, according to the manufacturer's specifications. If the specific exhaust emissions of the engine taken from the series exceed the limit values according to Annex I.B, the manufacturer may ask for measurements to be done on a sample of engines taken from the series and including the engine originally taken. To ensure the conformity of the sample of engines defined above with the requirements of the Directive, the statistical method described in Annex XVII shall be applied."

(10) In Annex X, point 5.3, a new subparagraph shall be added as follows:

"For the assessment of conformity with the exhaust emission requirements the procedure defined in Annex XVII shall be applied."

(11) Annex XIII shall be replaced by the text in Part C of the Annex to this Directive.

(12) In Annex XIV, point 1, the first sentence shall be replaced by the following:

"1. The body, its director and the staff responsible for carrying out the verification tests shall not be the designer, manufacturer, supplier or installer of the products referred to in Article 1 which they inspect, nor the authorised representative of any of these parties."

(13) Annex XV shall be replaced by the text in Part D of the Annex to this Directive.

(14) A new Annex XVI is added, as set out in Part E of the Annex to this Directive.

(15) A new Annex XVII is added, as set out in Part F of the Annex to this Directive.

Article 2

Two years after the implementation of this Directive by the Member States, the Commission shall submit a report to the European Parliament and the Council on how to implement a system of in use compliance testing.

Article 3

1. Member States shall adopt and publish the laws, regulations and administrative provisions necessary to comply with the requirements of this Directive not later than June 2003. They shall immediately inform the Commission thereof.

Member States shall apply such provisions as from December 2003.

2. Member States shall permit the placing on the market and putting into service of products which comply with the rules in force in their territory on the date of entry into force of this Directive, as follows:

- until December 2004 for the products falling under Article 1(1)(a);

- until December 2004 for compression ignition and 4-stroke spark ignition engines; and,

- until December 2005 for 2-stroke spark ignition engines.

3. When Member States adopt the provisions referred to in paragraph 1, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

4. Member States shall communicate to the Commission the text of the provisions of national law which they adopt in the field governed by this Directive.

Article 4

This Directive shall enter into force on the day of its publication in the Official Journal of the European Communities.

Article 5

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

ANNEX

A - Annex I is amended as follows:

1. The heading is replaced by the following:

"ANNEX I: ESSENTIAL REQUIREMENTS

PRELIMINARY OBSERVATION

For the purposes of this Annex the term "craft" shall cover recreational craft and personal watercraft.

A. ESSENTIAL SAFETY REQUIREMENTS FOR THE DESIGN AND CONSTRUCTION OF CRAFT."

2. The paragraph under section 2. "General requirements" is replaced by the following:

"Products falling under Article 1(1)(a) shall comply with the essential requirements in so far as they apply to them."

3. In section 2.2 "Builder's plate", fourth indent, the following words shall be added at the end of the sentence:

"... excluding the weight of the fuel and water tanks when full."

4. In section 3.6 "Manufacturer's maximum recommended load" the following words shall be deleted:

"..., as marked on the builder's plate, ..."

5. A new section shall be added in section 5 "Installation requirements":

"5.1.5. Personal watercraft running without driver. Personal watercraft shall be designed either with an automatic engine cut-off or with an automatic switch to provide reduced speed, circular, forward movement when the driver dismounts deliberately or falls overboard."

6. Two new parts, B and C, shall be added to this Annex as follows:

"B. ESSENTIAL REQUIREMENTS FOR EXHAUST EMISSIONS FROM PROPULSION ENGINES

Propulsion engines shall comply with the following essential requirements for exhaust emissions.

1 ENGINE IDENTIFICATION

1.1. Each engine shall be clearly marked with the following information:- engine manufacturer's trademark or trade-name;

- engine type, engine family, if applicable;

- a unique engine identification number;

- CE marking, if required under Article 10;

1.2. These marks must be durable for the normal life of the engine and must be clearly legible and indelible. If labels or plates are used, they must be attached in such a manner that the fixing is durable for the normal life of the engine, and the labels/ plates cannot be removed without destroying or defacing them.

1.3. These marks must be secured to an engine part necessary for normal engine operation and not normally requiring replacement during the engine life.

1.4. These marks must be located so as to be readily visible to the average person after the engine has been assembled with all the components necessary for engine operation.

2. EXHAUST EMISSION REQUIREMENTS

Propulsion engines shall be designed, constructed and assembled so that when correctly installed and in normal use, emissions shall not exceed the limit values obtained from the following table:

>TABLE POSITION>

Where A, B and n are constants in accordance with the table, PN is the rated engine power in kW and the exhaust emissions are measured in accordance with the harmonised standard.

For engines above 130 kW either E3 (IMO) or E5 (recreational marine) duty cycles may be used.

Reference fuels specified in Directive 98/69/EC shall be used for the emissions tests (Annex XI, Table 2 and Table 3).

3. DURABILITY

The manufacturer of the engine shall supply engine installation and maintenance instructions, which if applied should mean that the engine in normal use will continue to comply with the above limits throughout the normal life of the engine and under normal conditions of use.

This information shall be obtained by the engine manufacturer by use of prior endurance testing, based on normal operating cycles, and by calculation of component fatigue so that the necessary maintenance instructions may be prepared by the manufacturer and issued with all new engines when first placed on the market.

The normal life of the engine is considered to mean:

- Inboard or stern drive engines: 480 hours or 10 years, whichever occurs first

- Personal Watercraft engines: 350 hours or 5 years, whichever occurs first

- Outboard engines: 350 hours or 10 years, whichever occurs first.

4. OWNER'S MANUAL

Each engine shall be provided with an Owners Manual in the Community language or languages, which may be determined by the Member State in which the engine is to be marketed in accordance with the Treaty. This manual should:

- Provide instructions for the installation and maintenance needed to assure the proper functioning of the engine to meet the requirements of paragraph 3, (Durability).

- Specify the power of the engine when measured in accordance with the harmonised standard.

C. ESSENTIAL REQUIREMENTS FOR NOISE EMISSIONS

Recreational craft with inboard or stern drive engines, personal watercraft and outboard engines shall comply with the following essential requirements for noise emissions.

1. NOISE EMISSION LEVELS

1.1. Recreational craft with inboard or stern drive engines, personal watercraft and outboard engines shall be designed, constructed and assembled so that noise emissions measured in accordance with tests defined in the harmonised standard shall not exceed the limit values in the following table:

>TABLE POSITION>

where PN = rated engine power in kW at rated speed and LpASmax = maximum sound pressure level in dB.

For twin-engine and multiple-engine units an allowance of 3 dB may be applied.

1.2. As an alternative to sound measurement tests, recreational craft with inboard or stern drive engine configurations shall be deemed to comply with these noise requirements if their key design parameters are the same as or compatible with those of a certified reference boat to tolerances specified in the harmonised standard.

1.3. "Certified reference boat" shall mean a specific hull/inboard or stern drive engine combination that has been found to comply with the noise emission requirements, when measured in accordance with section 1.1 above, and for which all appropriate key design parameters and sound level measurements have been included subsequently in the published list of certified reference boats.

2. OWNERS MANUAL

For recreational craft with inboard or stern drive engines and personal watercraft, the Owners Manual required under Annex I.A Section 2.5, shall include information necessary to maintain the craft and exhaust system in a condition, that insofar as is practicable, will ensure compliance with the specified noise limit values when in normal use.

For outboard engines, the Owner's Manual required under Annex I.B.4 shall provide instructions necessary to maintain the outboard engine in a condition, that insofar as is practicable, will ensure compliance with the specified noise limit values when in normal use."

--------------------

B - Annex VI is replaced as follows:

"ANNEX VI: INTERNAL PRODUCTION CONTROL PLUS TESTS (module Aa, option 1)

This module consists of module A, as referred to in Annex V, plus the following supplementary requirements:

A. Design and construction:

On one or several boats representing the production of the manufacturer one or more of the following tests, equivalent calculation or control shall be carried out by the manufacturer or on his behalf:

- test of stability according to point 3.2 of the Essential Requirements,

- test of buoyancy characteristics according to point 3.3 of the Essential Requirements.

Provisions common to both variations: These tests or calculations or control shall be carried out under the responsibility of a notified body chosen by the manufacturer.

B. Noise Emissions:

For recreational craft fitted with inboard or stern drive engines and for personal watercraft:

On one or several craft representing the production of the craft manufacturer, the sound emission tests defined in Annex I.C shall be carried out by the craft manufacturer, or on his behalf, under the responsibility of a notified body chosen by the manufacturer.

For outboard engines:

On one or several engines of each engine family representing the production of the engine manufacturer, the sound emission tests defined in Annex I.C shall be carried out by the engine manufacturer, or on his behalf, under the responsibility of a notified body chosen by the manufacturer.

Where more than one engine of an engine family is tested, the statistical method described in Annex XVII shall be applied to ensure conformity of the sample."

--------------------

C - Annex XIII is replaced as follows:

"ANNEX XIII: TECHNICAL DOCUMENTATION SUPPLIED BY THE MANUFACTURER

The technical documentation referred to in Annexes V, VII, VIII, IX and XI must comprise all relevant data or means used by the manufacturer to ensure that components or craft comply with the essential requirements relating to them.

The technical documentation shall enable understanding of the design, manufacture and operation of the product, and shall enable assessment of conformity with the requirements of this Directive.

The documentation shall contain so far as relevant for assessment:

- a general description of the type,

- conceptual design and manufacturing drawings and schemes of components, sub-assemblies, circuits, etc.,

- descriptions and explanations necessary for the understanding of said drawings and schemes and the operation of the product,

- a list of the standards referred to in Article 5, applied in full or in part, and descriptions of the solutions adopted to fulfil the essential requirements when the standards referred to in Article 5 have not been applied,

- results of design calculations made, examinations carried out, etc.,

- test reports, or calculations namely on stability according to point 3.2 of the Essential Requirements and on buoyancy according to point 3.3 of the Essential Requirements (Annex I.A),

- exhaust emissions test reports according to point 2 of the Essential Requirements (Annex I.B),

- sound emissions test reports or reference boat data according to point 1 of the Essential Requirements (Annex I.C)."

--------------------

D - Annex XV is replaced as follows:

"ANNEX XV: WRITTEN DECLARATION OF CONFORMITY

1. The written declaration of conformity to the provisions of the Directive must always accompany:

- the recreational craft and the personal watercraft and must be included with the owner's manual (Annex I.A point 2.5);

- the components, as referred to in Annex II;

- propulsion engines and must be included with the owner's manual (Annex I.B.4).

2. The written declaration of conformity shall include the following [15]:

[15] And be drawn up in the language(s) as foreseen under point 2.5 of Annex I.A.

- name and address of the manufacturer or his authorised representative established in the Community [16];

[16] Business name and full address; authorised representative must also give the business name and address of the manufacturer.

- description of the product defined in paragraph 1 above [17];

[17] Description of the product make, type, serial number, where appropriate.

- references to the relevant harmonised standards used, or references to the specifications in relation to which conformity is declared;

- where appropriate, reference to the EC type-examination certificate issued by a notified body;

- where appropriate, the name and address of the notified body;

- identification of the person empowered to sign on behalf of the manufacturer or his authorised representative established within the Community.

3. With regard to inboard and stern drive propulsion engines the declaration of conformity shall include in addition to the information of point 2 above, a statement of the manufacturer that the engine will meet the exhaust emission requirements of this Directive, when installed in a recreational craft, in accordance with the manufacturer's supplied instructions and that this engine must not be put into service until the recreational craft into which it is to be installed has been declared in conformity with the relevant provision of the Directive."

--------------------

E - The following Annex XVI is added to Directive 94/25/EC:

"ANNEX XVI:PRODUCT QUALITY ASSURANCE (MODULE E) - EXHAUST EMISSIONS

1. This module describes the procedure whereby the engine manufacturer who satisfies the obligations of point 2 ensures and declares that the products concerned are in conformity with the type as described in the EC type-examination certificate and satisfy the requirements of the directive that apply to them. The manufacturer or his authorised representative established within the Community must affix the CE mark to each product and draw up a written declaration of conformity. The CE mark must be accompanied by the identification symbol of the notified body responsible for surveillance as specified in point 4.

2. The manufacturer must operate an approved quality system for final product inspection and testing as specified in paragraph 3 and must be subject to surveillance as specified in point 4.

3. Quality system

3.1. The manufacturer must lodge an application for assessment of his quality system for the products concerned, with a notified body of his choice.

The application must include:

- all relevant information for the product category envisaged;

- the quality system's documentation;

- if applicable, the technical documentation of the approved type and a copy of the EC type-examination certificate.

3.2. Under the quality system, each product must be examined and appropriate tests as set out in the relevant standard(s) referred to in Article 5 or equivalent tests shall be carried out in order to ensure its conformity with the relevant requirements of the directive. All the elements, requirements and provisions adopted by the manufacturer must be documented in a systematic and orderly manner in the form of written policies, procedures and instructions. This quality system documentation must ensure a common understanding of the quality programmes, plans, manuals and records.

It must contain in particular an adequate description of:

- the quality objectives and the organisational structure, responsibilities and powers of the management with regard to product quality;

- the examinations and tests that will be carried out after manufacture;

- the means to monitor the effective operation of the quality system;

- quality records, such as inspection reports and test data, calibration data, qualification reports of the personnel concerned, etc.

3.3. The notified body must assess the quality system to determine whether it satisfies the requirements referred to in point 3.2.

It presumes conformity with these requirements in respect of quality systems that implement the relevant harmonised standard.

The auditing team must have at least one member experienced as an assessor in the product technology concerned. The assessment procedure must include an assessment visit to the manufacturer's premises.

The decision must be notified to the manufacturer. The notification must contain the conclusions of the examination and the reasoned assessment decision.

3.4. The manufacturer must undertake to fulfil the obligations arising from the quality system as approved and to maintain it in an appropriate and efficient manner.

The manufacturer or his authorised representative must keep the notified body which has approved the quality system informed of any intended updating of the quality system.

The notified body must evaluate the modifications proposed and decide whether the modified quality system will still satisfy the requirements referred to in paragraph 3.2 or whether a re-assessment is required.

It must notify its decision to the manufacturer. The notification must contain the conclusions of the examination and the reasoned assessment decision.

4. Surveillance under the responsibility of the notified body

4.1. The purpose of surveillance is to make sure that the manufacturer duly fulfils the obligations arising out of the approved quality system.

4.2. The manufacturer must allow the notified body entrance for inspection purposes to the locations of inspection, testing and storage and shall provide it with all necessary information, in particular:

- the quality system documentation;

- the technical documentation;

- the quality records, such as inspection reports and test data, calibration data, qualification reports of the personnel concerned, etc.

4.3. The notified body must periodically carry out audits to ensure that the manufacturer maintains and applies the quality system and must provide an audit report to the manufacturer.

4.4. Additionally, the notified body may pay unexpected visits to the manufacturer. At the time of such visits, the notified body may carry out tests or have them carried out in order to check the proper functioning of the quality system where necessary; it must provide the manufacturer with a visit report and, if a test has been carried out, with a test report.

5. The manufacturer must, for a period ending at least 10 years after the last product has been manufactured, keep at the disposal of the national authorities:

- the documentation referred to in the third indent of point 3.1;

- the updating referred to in the second paragraph of point 3.4;

- the decisions and reports from the notified body which are referred to in the final paragraph of point 3.4, points 4.3 and 4.4.

6. Each notified body must forward to the other notified bodies the relevant information concerning the quality system approvals issued and withdrawn."

--------------------

F - The following Annex XVII is added to Directive 94/25/EC:

"ANNEX XVII: CONFORMITY OF PRODUCTION ASSESSMENT FOR EXHAUST EMISSIONS

1. For verifying the conformity of an engine family, a sample of engines is taken from the series. The manufacturer shall decide the size (n) of the sample, in agreement with the notified body.

2. The arithmetical mean X of the results obtained from the sample shall be calculated for each regulated component of the exhaust and noise emission. The production of the series shall be deemed to conform to the requirements ("pass decision") if the following condition is met:

// X + k . S <= L

// S is standard deviation, where:

// S = ( (x - X) / (n - 1)

// X = the arithmetical mean of the results

// x = the individual results of the sample

// L = the appropriate limit value

// n = the number of engines in the sample

// k = statistical factor depending on n, see table

>TABLE POSITION>

IMPACT ASSESSMENT FORM

THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs)

TITLE OF THE PROPOSAL

Proposal for a Directive of the European Parliament and of the Council amending Directive 94/25/EC of the European Parliament and of the Council of 16 June 1994 on the approximation of the laws, regulations and administrative provisions of the Member States relating to recreational craft.

REFERENCE NUMBER OF THE DOCUMENT:

1. Proposal

The specific objective of the measure is to complete the internal market in the recreational craft sector. This requires harmonisation of the laws, regulations and administrative provisions of the Member States not yet covered by Directive 94/25/EC on such craft.

This proposal for a Directive, which is based on Article 95 of the Treaty on European Union, amends Directive 94/25/EC on recreational craft. It follows the New Approach, laying down only the essential requirements of the products concerned, and aims to ensure implementation of the following objectives:

a) to incorporate the essential requirements regarding sound and exhaust emission limits for the engines of recreational craft and personal watercraft and, for the latter, also the design and construction requirements.

For these specific aspects, the following aims are sought:

- to protect the health of users and third parties;

- to eliminate the existing obstacles caused by differences in legislation and prevent the creation of new obstacles;

- to participate in environmental protection by reducing sound and exhaust emissions from recreational craft, including personal watercraft, to technically acceptable levels;

- to create a favourable framework setting out the conditions for fair competition allowing the industry to benefit from a single market and, consequently, to contribute to improving the competitiveness of European industry.

b) to amend certain existing provisions of the above-mentioned Directive, particularly regarding the conformity assessment procedures.

2. Impact on businesses

2.1. Manufacturers of engines for the maritime sector

a) Characteristics of the businesses concerned

The manufacture of engines for the maritime sector involves a large number of SMEs and a few large businesses. The total number is 87 units in the European Union, employing 13 320 persons (on average 150 employees each), including 67 SMEs employing 2 620 persons (40 persons on average). These businesses do not only produce engines for recreational craft within the meaning of Directive 94/25/EC. In general, they are diversified and produce other types of engine intended for various activities, in particular agriculture and transport. Very often, the engines manufactured are not adapted to power boats, including those for recreational purposes, until later. It is therefore difficult to estimate the market share represented by engines intended solely for recreational craft.

(Source: ICOMIA Report 1997)

b) Geographical breakdown of businesses and the engine market

The recreational craft manufacturing industry is represented throughout the EU with the exception of Luxembourg. It employs 90 502 persons, and there is a total of 14 373 manufacturing units. However, there is a particularly high concentration in certain Member States, such as France (3 000 units), the Netherlands (1 525 units), Germany (2 500 units), the UK (3 000 units), Spain (1 310 units) and Italy (700 units).

As for engine manufacturers, there are none at all in five Member States (Finland, Greece, Ireland, Luxembourg and Portugal). The industry is concentrated mainly in Italy, where there are 40 businesses, the United Kingdom with 20, Germany (ten) and France (three).

However, a large number of these businesses (recreational craft and/or engines) simply import and distribute and/or assemble these products.

(Source: various, including ICOMIA).

c) In which regions are the businesses located-

In general, the recreational craft industry is scattered among the various regions of the Member States listed in section 2.1.b). It is not possible to specify all the regions in which the industry is concentrated.

However, in the United Kingdom, for instance, the three biggest businesses are in Lancashire, Dorset and Gloucestershire. In France they are in la Gironde, in Italy they are concentrated in Lombardy and Emilia-Romagna and in the Netherlands in Overijssel and South Holland.

As a rule these regions do not receive the structural aid granted by regional and Community programmes, i.e. the ERDF.

2.2. Personal watercraft manufacturers

The manufacturing of personal watercraft is a growth industry. Three big companies share the world market - Bombardier, Kawasaki and Yamaha, which account for over 95 % of the market.

The expansion of this market is mainly due to the increased variety of personal watercraft available, which makes it possible to diversify their use. In 1998, sales of personal watercraft in the EU and EEA countries amounted to 10 789 units. The Member States accounting for most of these sales are: France, Spain, the United Kingdom, Portugal, Scandinavian countries and Italy. In relation to the number of inhabitants, sales are highest in Portugal and France. We do not have any information on the number of employees in the sector or the number of businesses, including SMEs.

3. Measures to be taken by businesses to comply with the proposal

As stated in point 1, this proposal amends certain existing provisions (aspects concerning the manufacturing of recreational craft and personal watercraft) and adds new provisions (emissions from the engines of recreational craft and personal watercraft).

As regards the manufacturing of recreational craft and personal watercraft, the proposal gives manufacturers the opportunity to use a wider choice of certification procedures with which the craft have to comply. This will allow manufacturers, at their own discretion, to use the various techniques available to assess their products or have them assessed.

On the other hand, as regards the limiting of emissions, the proposal lays down:

- the essential requirements for protecting the health of users and third parties and the environment, with which the engines of recreational craft and personal watercraft placed on the Community market must comply. To this end, different periods of application of the provisions have been provided for (depending on the difficulties of implementation). The requirements will be translated into harmonised standards, to be drawn up by the European standardisation bodies (CEN/CENELEC) and application of which is voluntary;

- conformity assessment procedures which have been adapted to the risks to be covered, i.e. the limiting of engine emissions. Although involvement of a third party is required for the monitoring of exhaust emissions, for sound emissions, in order not to repeat the tests, a system known as "reference boat" has been provided for. If the manufacturer applies this system, the conformity assessment will be carried out on his sole responsibility, without involving a third party.

4. Foreseeable economic effects of the proposed directive

a) Employment

As regards the two main amendments to Directive 94/25/EC, namely the broadening of the field of implementation to include personal watercraft and emissions, the proposed directive may not necessarily have any particular effect on employment. It lays down on the one hand the essential requirements for the manufacture of personal watercraft and, on the other, the emission limits with which the engines must comply.

For the manufacture of personal watercraft, the existing requirements apply to the new products without many changes, and, as with recreational craft, the harmonised manufacturing standards apply. For emissions, however, manufacturing has to be adapted upstream to the new technologies.

In principle, this is unlikely to give rise to new tasks involving the creation of new jobs. It is possible that new jobs may be created following an increase in demand due either to market trends or greater consumer confidence in the new products.

b) Investment and the creation of new businesses

In principle, the proposed directive will not directly lead to the creation of new businesses. However, investments will have to take account of the new technologies which have to be used in order to comply with the emission limits. On the basis of the information available to us, it would appear that manufacturers are in the process of adapting their manufacturing methods to comply with the guidelines set in the Directive; changes are therefore in progress. Furthermore, if account is taken of the transitional periods, adaptation to the new provisions will be gradual, without any significant negative effects.

c) Business competitiveness

The measures to adapt to the new requirements, if they are still necessary after the above-mentioned voluntary adaptation, and the monitoring of the quality principles (limits and conformity assessment) will initially lead to additional costs.

However, if adaptation is gradual and spread over an appropriate amount of time, once it has been carried out, businesses will be able to benefit from the effects of rationalisation.

Harmonisation of the various regulatory systems will lead to a reduction in the production costs caused by the diverging systems already in existence or likely to be created. The European dimension of the market will also make economies of scale possible. Generally speaking, these are benefits which are particularly recognised in all harmonisation measures (see COM(96)520 "The Impact and Effectiveness of the Single Market") and in the conclusions of the Presidency of the European Council in Helsinki on 10 and 11 December 1999.

While it is true that businesses will have to cope with more intense competition from both inside and outside the Community, the above-mentioned effects of the proposal will be sufficient to improve the international competitiveness of European businesses.

Once the Community legislation has been adopted, it will be possible for the Community to use it in international negotiations to extend the mutual recognition agreement (MRA) already in existence with the USA and Canada regarding the provisions of Directive 94/25/EC and thus improve the conditions of access of European industry to the markets of non-member countries.

5. Measures to take account of the specific situation of SMEs

The proposal for a Directive lays down specific measures for SMEs in order to take special account of their needs, namely flexibility in the procedures in order to eliminate and/or reduce bureaucracy as far as possible.

The very fact that the Directive goes no further than to lay down only the essential requirements, which will take the form of harmonised voluntary standards, means that it provides a flexible legal framework for implementation. The existence of the harmonised standards will facilitate compliance with the Directive, especially for SMEs.

Furthermore, the proposal extends the choice of certification procedures for the aspects concerning the manufacture of recreational craft and personal watercraft, while for sound emissions it has laid down a reference boat system. By using this system, the manufacturer can declare compliance of the engines which will be used for recreational craft on his own responsibility, without involving a third party.

It is also planned to closely involve the European federations representing SMEs in the implementation of the Directive, in particular the EBCU, and to distribute any practical information which may be useful to them via the Info Centres.

6. Consultation of the social partners and their positions

Since work began on this proposal in 1997, the Commission has involved all the professional groups concerned by means of various working documents. Four consultation meetings have been held to examine the various working documents. Written consultations have also been carried out, particularly on the final version.

The following federations and organisations were consulted:

a) Manufacturers

- ICOMIA (International Council of Marine Industry Associations)

- IMEC ( ICOMIA Marine Environment Committee)

- EUROMOT (European Association of Internal Combustion Engine Manufacturers).

b) Users

- EBA (European Boating Association).

c) Others

- CEN (European Committee for Standardisation),

- RSG (Recreational Craft Sectoral Group).

Several national federations also expressed their points of view on the proposal.

The parties concerned recognised the need to harmonise the existing provisions by means of a directive and, after discussion, supported the principles established in the proposal, notably the addition of a simplified system of certification by the manufacturer for sound emissions, namely the reference boat.