The directive generates a new digital innovation for reducing traffic emissions
On August 2nd, 2021, the Act on Environmental and Energy Efficiency Requirements for Vehicle and Transport Service Procurements entered into force in Finland. The law is based on the so-called EU Clean Vehicles Directive (CVD). Under the threat of a penalty payment, the law obliges the public sector to take emissions into account when purchasing new vehicles. In addition to municipalities and cities, the new law also applies to state-owned companies such as Alko and Yleisradio. National legislation under the EU Procurement Directive entered into force in all EU countries at the same time. Finland has an overall obligation of 38.5% of new public sector passenger car and van purchases being clean in terms of emissions. Even stricter procurement criteria have been set for the 17 largest cities in the country. The law also includes an order to report vehicle fleet emissions data.
The new legislation is by no means problem-free. Municipalities have little information on the current state of emissions from the vehicles they own, lease, or use. Municipal and city procurements are very fragmented, and it is very difficult to determine the total emissions when purchasing new equipment. The situation is similar in other EU countries.
Simultaneously with the preparatory work for the law, the Finnish company Vediafi Oy has developed a new digital innovation, a web-based service, Clean Vehicles Wizard (CVW), which is sort of an emission minimiser for fleets of vehicles. It registers, analyses, and reports vehicle emissions, and assists in the procurement process of new vehicles. This service is exactly how digitalisation can help reduce emissions.
The MEP Henna Virkkunen: “There are two megatrends in European transport policy”
MEP Henna Virkkunen, who works in the European Parliament and its Transport and Energy Committees, highlights two megatrends in European transport policy: reducing emissions and digitalisation.
- Finnish municipalities and cities are well committed to climate goals, and many have set the goal of being completely carbon-neutral by 2030. However, transport is a challenging sector as the need for transportation and moving around is constantly growing. I am pleased to say that Finland is a major pioneer in Europe, and we have just the right kind of digital know-how to reduce emissions. This know-how has a huge demand elsewhere in Europe. We also have very specific expertise in the development of biofuels. This is based on our strong expertise in the forest industry, explains Virkkunen.
The seventeen largest cities have stricter procurement criteria than others
For Finland to achieve the emission targets set for it, our legislation has set stricter procurement criteria for the largest cities in the country. These cities are Espoo, Helsinki, Hämeenlinna, Joensuu, Jyväskylä, Kouvola, Kuopio, Lahti, Lappeenranta, Oulu, Pori, Rovaniemi, Seinäjoki, Tampere, Turku, Vaasa, and Vantaa.
Up to half of new vehicle and transport procurement in these cities must be clean in terms of emissions. Until the end of 2025, vehicles with CO₂ emissions of up to 50 g/km will be classified as such by law. In practice, electric cars and the latest rechargeable hybrid vehicles fall under this definition. Beginning in 2026, only completely carbon-neutral vehicles will be considered clean vehicles. In practice, this means that half of the new purchases of cars and vans in these cities must be fully electric cars from 2026 onwards.
Will the municipalities start playing tricks around being emission neutral?
Emissions need to be reduced, but the problem is that little is known about the current situation and what the starting point is. The entry into force of the new law will cause many problems for municipalities and other public procurement entities. The directive must also be applied to the municipalities’ own responsibility objectives.
- Are municipalities prepared to act and report in accordance with the directive? Are there enough clean vehicles that meet the criteria? What will it cost for municipalities to build an electric car supporting infrastructure? Will we now start playing tricks and manipulating the procurement processes so that the directive is being met, but emissions may even increase? Will clean vehicles be purchased and then stand in the garages unused? How are the emissions actually monitored and reported? Lasse Nykänen, Vediafi Oy’s project manager, poses questions on how to make the right kind of purchases to achieve the emission targets.
Emissions can be reported transparently to residents
Vediafi Oy has developed the vehicle fleet emission management tool CVW (Clean Vehicles Wizard), which provides an overview of the emissions of the municipality or other procurement units’ vehicle fleet and helps take clean vehicles into account when purchasing fleet and transport services. CVW is a Finnish web-based vehicle CO₂ tool. The concept behind it is based on the Clean Vehicles Directive and has been developed together with Traficom and the Association of Finnish Municipalities, among others. The service has been piloted in several cities in cooperation with the Northern Growth Zone.
- With the help of the pilot, it became clear that the municipalities have little information about the current emissions of their vehicles, notes Nykänen.
The CVW keeps track of mileage, it analyses and reports the emissions of fleets of vehicles, identifies problem areas of particular fleets, informs residents about emissions in a transparent manner, and helps plan and tender for the purchase of new fleets.
- The service allows smarter purchases to be made, using the right vehicles at the ideal times, and monitoring the reduction in emissions of an entire fleet of vehicles in real time. Buying great, clean vehicles that you do not actually use is the dumbest thing you can do. With CVW, this cannot happen, Nykänen continues.
Finnish innovation to the world for export
At the EU level, transport is the only sector where emissions continue to rise. Transport accounts for about a quarter of total emissions in the EU. The new directive is binding in all EU member states. The starting point in other EU countries is similar to that of Finland. The amount of emission from public vehicles is unknown and there are no effective tools in use to control them.
- Our goal is to make CVW an interesting export product, first to the EU countries and also later to other Western countries outside of the EU, because everyone has similar goals of minimising traffic emissions. The CVW service has been piloted in six different cities in Germany. France and Spain have also proven to be potential export countries. Of the EU countries, Sweden is ahead of us. Swedish cities embraced low emissions long before us. In Oslo, Norway, which is at the forefront of this development, half of the vehicles in the public sector will soon be electric cars, shares Nykänen.
Are responsible companies further in the process than municipalities?
The Clean Vehicle Procurement Directive (CVD) obliges all public procurement entities in EU countries, such as municipalities, cities, public procurement entities, and companies, to report emissions from their vehicles to a national authority. In Finland, reports are made to the Finnish Transport and Communications Agency, Traficom. Municipalities and cities alone currently own or use about 10,000 passenger cars. Finland’s 17 largest cities have a total of nearly 5,000 vehicles in use. Public contracting authorities tender and procure vehicle or transport services for more than €250 million a year (Source: Ramboll report on national implementation of the Clean Equipment Procurement Directive, 1/2020). At the company level, vehicle numbers and driving performances are much larger and the need for reporting also arises there. Today, consumers demand transparency and concrete accountability from companies.
- Not only can emissions be monitored in real time with the Clean Vehicles Wizard, but it also provides ready-made vehicle emissions reports required by law and thus simplifies the work of many people. We combine several different data sources for a comprehensive service of the highest quality. The service is reasonably priced for companies, municipalities, and other procurement units. Annual costs range from a few hundred euros to a few thousand euros, depending on the number of vehicles and purchases. The service can also be used by companies that want to monitor and report transparently on the emissions of their vehicles, explains Nykänen.
Compliance with the new law is closely monitored. If municipalities, cities, or other public contracting entities do not make the declarations required by law for the procurement of vehicle equipment or transport services, a penalty payment may be imposed on them.
The new law in a nutshell:
The scope of the directive covers the purchase and rental of motor vehicles of the public sector, public service contracts for the provision of passenger transport services and certain transport services. The new legislation applies to new procurement and service contracts (launched after 2.8.2021). In addition to passenger cars, the legislation also applies to, for example, vans and trucks, charter passenger transport, such as school transport, waste transport, postal and parcel transport services. The directive excludes, among others, emergency vehicles, ambulances, hearses, and tractors.
In other municipalities that are not listed amongst the 17 largest cities in the country, the minimum numbers required by the Clean Vehicles Act are lower. A total of 35% of all vehicles must meet the criteria in South Karelia, Kanta-Häme, Central Finland, Kymenlaakso, Pirkanmaa, Päijät-Häme, Satakunta, Uusimaa, and Southwest Finland. In Southern Ostrobothnia, Southern Savonia, Kainuu, Central Ostrobothnia, Lapland, Ostrobothnia, North Karelia, Northern Ostrobothnia, and Northern Savonia 20% of vehicles must meet the criteria.
Act on Environmental and Energy Efficiency Requirements for Vehicle and Transport Service Procurements
Vediafi Oy, Lasse Nykänen, project manager CVW, firstname.lastname@example.org, tel. 050 303 1268
Clean Vehicle Wizard: https://www.vedia.fi/cvw/
Vediafi Ltd is a Finnish company which sells and develops solutions to make logistics more efficient and greener. Solutions combine our extensive expertise on logistics digitalisation, IoT and location-based solutions, as well as data-driven products and services. We are an agile and fast-growing company with approximately 20 professionals working together with a partner ecosystem in Northern Europe and Germany. In the future, we will focus on expanding our operations internationally and developing new services to meet customer needs. www.vedia.fi