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Diesel Health Argument Could Cost Manufacturers Big

Diesel Health Argument Could Cost Manufacturers Big

“This is not smart regulation. We need clarity in advance so that we can plan the development and design of vehicles in line with the new requirements” – ACEA

European car makers are scrambling, at potentially crippling expense, to make engines more fuel frugal to meet harsh laws kicking in by 2020, but a big plank of that effort, diesel power, is in danger of being crippled because of pressure from environmentalists and politicians.

Roughly half of all new cars sold in Europe are diesels, and buyers have for years been persuaded by government taxation policy to go this route because these engines were about 30 per cent more fuel efficient than gasoline ones and therefore emitted less carbon dioxide (CO2), said by some to cause global warming.

Diesels might be fuel efficient, but they are also much dirtier than modern gasoline engines. They produce nitrogen oxides (NOx) said to spew toxins which cause lung irritation at best and multiple deaths at worse. This problem was believed to have been solved by new European Union regulations, so-called Euro 6 rules, which recently kicked in for new cars. But because Euro 6 compliance is measured by laboratory, rather than real world driving, tests, critics are saying in reality the rules are often ineffective.

Britain’s Sunday Times, in an article headlined “The great diesel car deception speeding us to a toxic death”, demanded tough action to force manufacturers to clean up diesels. This might be difficult because the Sunday Times said some vehicles, certified as Euro 6 compliant, failed the test completely, while others didn’t. Under acceleration many vehicles exceeded the base standard of 0.08 grammes of NOx per kilometre (0.128 per mile). The Sunday Times cited a report by Emissions Analytics which said various diesels from Vauxhall-Opel, Citroen, BMW and Mazda failed the test, while a Mercedes-Benz C220 and a VW Golf 2-liter passed it easily. Experts say the regulations work if the engine is engineered to high standards.

Voices in Europe are being raised against diesels. France’s socialist government wants to persuade buyers to cash in their old diesels for electric cars by offering incentives of up to 10,000 euros ($11,000). Meanwhile Paris Major Anne Hidalgo recently announced measures to phase out diesels in the city by about 2020. Other cities like London have announced tighter controls on noxious emissions which will severely limit diesel access to the city.

Auto manufacturers are campaigning against what they have described as ill-informed opposition. Environmental groups like Brussels-based Transport & Environment (T&E) don’t buy “superclean” claims and demand action to make Euro 6 vehicles less of a threat to health.

Earlier this month the E.U. adopted what it called the world’s first test for diesel car emissions on the road, and this was acclaimed by T&E.

“Europe now needs to fully enforce the new rules from 2017 to bring an end to dirty diesels,” T&E’s Francois Cuenot said.

The trouble is, the E.U. move was light on detail. The European Car Manufacturers Association, known by its ACEA acronym in French, described this as “very incomplete regulation” and called on the E.U.’s executive body, the European Commission, to provide details by June or July, so that it could quickly find out what investments were required by the industry.

“This is not smart regulation. We need clarity in advance so that we can plan the development and design of vehicles in line with the new requirements,” said Erik Jonnaert, ACEA Secretary General.

According to Price Waterhouse Coopers’ Autofacts, European manufacturers face potential fines of over 30 billion euros ($33 billion) by 2021 if they fail to meet the targets. They all were able to meet the 2015 target of an average 130 grammes per kilometre, equivalent to about 43 miles per U.S. gallon. By 2020, this must be raised close to 60 miles per U.S. gallon, and will need big investments, given that what Autofacts called “low-hanging fruit” like stop-start engines and rolling resistance tires have all been used.

“German (manufacturers) have shifted towards plug-in hybrids with relatively less emphasis on electric vehicles while French and Italians seem to have a greater affinity for electric vehicles and full hybrids that better suit their traditionally lighter vehicles,” Autofacts said.

Investment researcher Evercore ISI said the debate over diesels is hotting up and will pose big problems for manufacturers.

“The move to “real-world” testing in Europe will make future compliance more challenging for (manufacturers) bringing us full circle to the largest challenge faced by the industry, emissions regulation,” Evercore ISI analyst Arndt Ellinghorst said.

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