The free circulation of machinery in the Single Market was reached by the introduction of the Machinery Directive 98/37/EC for most of the product groups, with the exception of only few groups such as self-propelled machinery (construction machinery, agricultural machinery, mobile cranes, industrial trucks). The regulatory framework have not been harmonized, in particular the roading approval procedures for self-propelled machinery. Discrepancies among the various national roading approval procedures hamper the free circulation for those self-propelled machinery which need a roading approval for the regular utilization. Since a decade the associations of the industry have lobbied – with reference to Article 28 of the Treaty of Rome - for the harmonization of the roading approval. In 2000 the Commission decided to finance a study to investigate the economic effects of non-harmonization and to suggest a procedure how to solve the problem.
The ifo Institute won the contract, lead the project and focused on the evaluation of the economic effects. The technical working packages were subcontracted. The TÜV Süddeutschland GmbH analyzed the technical requirements, the various approval procedures and the national regulations.
The data base for the project was created with numerous expert interviews in Europe. The contacts comprised representatives from companies, approval and certification bodies. To broaden the data base a questionnaire was circulated and 54 companies participated in the survey. The inefficiencies of non-harmonization were calculated by the application of a marginal cost approach.
Off-road machinery industry, in this context, is defined as manufacturers of self-propelled machinery, e.g., for the agricultural (with the exception of tractors) and construction sectors. EU(15) turnover has been estimated to be €15.5 billion. The intended purpose of off-road machinery is to work on construction sites, agricultural areas etc. and not to carry goods or persons on public roads. However, the use of public roads is necessary for the quick and efficient transport of machinery to its place of work.
Disparate technical requirements including third-party certification exist at national level in order to allow such equipment to use the public highway. Therefore, in order to ensure this facility in more than one national territory manufacturers are required to undergo parallel approval procedures. This lack of harmonisation entails additional costs and delays the introduction of new products within the EU. The findings of this investigation support the above hypothesis. . Fifty-four companies participated, representing approximately 60% of the industry turnover. On the basis of this survey, it has been calculated that the additional burden on industry due to non-harmonisation is about € 74 million, which is approximately 10% of industry’s “bottom line” profit. This corresponds to 0.5% of industry turnover.
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