Select Committee on European Scrutiny First Report


COM(00) 639

Draft Council Directive modifying Council Directive 94/25/EC on the approximation of the laws, regulations and administrative provisions of the Member States relating to recreational craft.

Legal base: Article 95 EC; co-decision; qualified majority voting
Department: Trade and Industry
Basis of consideration: Second SEM of 5 July 2001
Previous consideration: HC 28-iv (2000-01), paragraph 5 (24 January 2001) and HC 28-xii (2000-01), paragraph 2 (25 April 2001)
To be discussed in Council: No date set
Committee's assessment: Politically important
Committee's decision: Not cleared; further information requested


21.1  Council Directive 94/25/EC[39] lays down design and construction standards for recreational craft, and was originally adopted as part of the creation of the Single Market. However, a number of Member States have since introduced national measures to control exhaust and noise emissions from such craft, and this has given rise to concern that these might constitute an obstacle to free trade. As a consequence, the Commission put forward in October 2000 proposals to harmonise within the Community provisions on exhaust and noise emissions from engines intended to be installed on recreational craft.

21.2  The justification for these proposals is set out more fully in our predecessors' Reports of 24 January and 25 April 2001, but in essence they would set a range of exhaust emission requirements for carbon monoxide, hydrocarbons and nitrogen oxides depending on the type of engine, with maximum noise levels related to engine power also being set. They also contain conformity assessment procedures, similar to those in other Community emissions legislation, and, in order to reduce the cost involved, particularly for small and medium-sized enterprises (SMEs), would include a "reference boat" concept, so as to avoid boat builders having to test each and every boat or engine.

21.3  Although the UK considered that there were strong grounds for adopting these measures in order to prevent the break-up of the single market for recreational and personal watercraft, there were concerns that the requirements, particularly on noise emissions, could impose disproportionate costs on the SME boat builder, and that a traditional boatbuilder not following the same design each time might need to have each craft tested and certified by a third-party conformity body. A requirement on the Commission to report on "in use" compliance testing was a further cause for concern, as it was thought likely to result in craft being subject to annual tests similar to existing vehicle testing.

21.4  The Minister concerned — the Parliamentary Under-Secretary of State for Science at the Department of Trade and Industry (Lord Sainsbury of Turville) — provided on 20 April 2001 a detailed Regulatory Impact Assessment as regards engine manufacturers (who will be responsible for meeting the exhaust emission requirements, and, in the case of outboard-engined craft, the noise requirements), craft manufacturers (who will be responsible for meeting the noise requirements for boats powered by stern drive and inboard engines), and boat owners.

21.5  As our predecessors noted on 25 April, this indicated that the main costs were likely to fall on boat owners, with the engine manufacturers and the larger boat builders being reasonably confident of meeting the new conditions without undue difficulty. However, in the case of the 180 or so SME boat builders, the Assessment also said that, whilst most were "hopeful" that they could meet the limits with little design modification, a more detailed examination of two very small companies suggested that the range of design options could be severely limited, and that "as many as one-fifth of small and medium boatbuilders would be at serious risk of closure as a result of the extra costs and limitations imposed by the amendments to the directive".

21.6  In view of this, our predecessors concluded that it would be premature to clear the proposal, and said that they would like the Government to keep them informed of the progress of the negotiations on it, including the point in paragraph 21.3 above about "in use" compliance testing. In the meantime, they suggested it would be helpful to have further clarification of the effect which the proposal was likely to have on the small and medium-sized boat builders.

Second Supplementary Explanatory Memorandum of 5 July 2001

21.7  The Minister has provided with his Second Supplementary Explanatory Memorandum of 5 July 2001 a Regulatory Impact Assessment which seeks to address the impact of the proposal on small and medium-sized boat builders. This confirms that most consider that the cost of certifying noise tests could not be passed on to customers, and that more than one-third expect this to reduce their sales by anything between a few percent and one half (of which some might go to the bigger builders). Furthermore, as a result of this and ongoing costs, 17% fear they would be put out of business, and a further 14% would expect to have to leave the industry. Concerns were also expressed that a requirement to install engines according to manufacturers' instructions might limit the range of new design options they can offer customers. The Minister comments that these costs, and those falling on engine builders, would be "considerable", and that the UK negotiating strategy will seek to reduce these as far as possible.


21.8  We are grateful to the Minister for further clarification. In view of what he has now said, and of the concerns expressed earlier about "in use" compliance testing, we endorse our predecessors' view that it would be premature to clear this document. We would like the Minister to keep us informed of any significant developments in the negotiations, particularly as they might affect the position on compliance testing and the viability of the small and medium-sized builders.

39   OJ No. L 164, 30.6.94, p.15. Back

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