Diesel still has a real future, despite the tirade of criticism, says economist Prof Garel Rhys, who in four decades studying the automotive industry, has seen in all before.
The current furore over the fuel has raised a number of issues not only about the fuel itself but the way Governments have supported it, how carmakers have embraced it and how society has accepted it.
The reality today is that whatever happened from the middle of the first decade of the 21st century until now it was very much out of sight and out of mind so long as greenhouse emissions were down and fuel economy was up.
What has happened since the middle of September 2015 is a catastrophic mismanagement of the issues it raised and the public relations surrounding them.
But that is not a new phenomenon in automotive history and other car-makers have endured public humiliation and truly massive legal claims over a variety of issues, mostly safety related. Some have handled it better than others.
What possibly sets apart the diesel issue is the fact that this fuel has been with us for a very long time, in other words we have happily lived with it, and in fact it powers a very big percentage of road vehicles and transport on sea and land, provides power generation and is the mainstay of plant equipment in the construction industry. Much of what we enjoy today, what we do and where we go, the food and other goods we buy, is at some point fuelled by diesel.
Indeed, it is claimed 94% of world trade in one way or another is dependent on diesel.
That history is rooted in the commercial sector and vehicles. Diesel was the mainstay of British and foreign heavy commercial vehicles and rapidly grew between World War 1 and World War 2 and when fuel rationing continued into the 1950s the motor car industry turned to the experienced heavy diesel engine manufacturers for small diesel engines to power. This was typified by for the famous London Black Cab.
History shows us the London ‘taxi market from the early 1950s was going diesel and operators put up with low power and slower acceleration because of the considerable saving in fuel costs of almost 50%.
In the 1950s Borgward and Mercedes in Germany and Citroen in France pushed ahead with improving car diesels. The better thermal efficiency (ie more miles per gallon) together with the fiscal incentives given to diesel by lower fuel duty in countries such as France, Italy Germany, Spain and so on created a widening market for diesel cars.
However, apart from 1928 – 1932 the British Treasury saw no reason to levy lower duties on diesel and left it to the market to determine the spread of diesel power. So in the UK, take up of diesel cars was much slower and therefore demand was lower per year.
The fuel companies ramping up fuel prices during the two oil crisis in the 1970s did lead to an increase in demand for diesel cars, however this was short lived.
In the early 1980s oil and therefor petrol prices almost collapsed, and petrol prices fell to their lowest ever level in real terms. This reduced the incentive to buy diesel cars and light vans.
It was only with the introduction of ever more attractive car diesels in the mid 1980s with direct injection and common rail systems that a long-term growth in the demand for diesel powered cars in Britain started. Even so in 1990s only 6% of the car market was diesel. Now, in 2015 it’s almost 50%.
This was reinforced by virtually all manufacturers adding diesel powered cars to their ranges and this significantly increased the defusion of the product.
The history of emissions control shows that in the 1980s we became aware of the toxicity and therefore harm to humans.
This was the decade when the three-way catalyst appeared to clean up harmful toxic emissions from petrol and diesel cars. A decade on it was concern with emissions of CO2 and harm to the planet which became the issue. As far as toxic emissions were concerned it was job done for both petrol and diesel engines. As diesels emit around 30% less CO2 per mile it was seen as a providential way to reducing greenhouse gases.
For this reason the green lobby, whose interest in the well-being of the planet meant that they paid greater attention to CO2 than the toxic emissions gave diesels their wholehearted support.
Although the three-way catalyst on a diesel was not as successful as on a car in reducing NOX it did have beneficial effects. Much is made of the fact that despite emission controls NOX in cities is still what it was 25 years ago. This misses the point. The traffic in cities has grown greatly in this period so to keep NOX emissions constant the diesel must have been cleaned up somewhat in its NOX emissions.
An issue faced by diesels but not petrol engines is soot particulates. These are captured by Diesel Particulate Filters (DPFs), and these are fitted to all types of diesel applications in road vehicles.
As long as there are periods of constant high speed running the soot is burned off and the engines work as they should. If most usage is slow stop and start urban driving, the filters clog up and engine efficiency is lost. It is this which can add to NOX issue in cities.
It is clear that there are two main emission issues: Toxic and CO2. When commentators and the general media have been querying how green is your Volkswagen, this is clearly a nonsense question borne of ignorance. The diesel is still as green as ever.
In a way, the penetration of the diesel car in Sweden is a summary of the last 60 years. Even at the turn of the century the Swedes like the Americans and Japanese were very concerned about the particulate issue but the rapid increase in petrol prices after 2000 persuaded even the Swedes to turn to the diesel in bigger numbers. In the UK, the early adoption of the diesel in the London taxi-cab market post 1956 must still be put alongside the fact that even in 1990 diesel cars only had 6% of the market. However by 2005 the figure was almost a third. In the first year of the recession in 2008 this penetration had grown to almost 44%. This reflected the greater choice of models; various tax breaks, especially in the company car market; continued improvements in the diesel engines themselves; a greater network of diesel fuel pumps plus of course the superior thermal efficiency of the diesel engine. By 2015, the diesel car accounted for nearly half of the new car market in the UK (48.5%) and its much in line with the rest of Europe, where total diesel cars take 53% of the European market.
The current row about diesel has not been reasoned or balanced but we have seen a succession of popular-media stories often written by those without any engineering or scientific qualifications. It has also moved on from purported issues with Volkswagen to the fuel itself, as well as the EU fuel emissions tests and how comfortably the manufacturers work alongside the so-called “independent” testers.
It has to be remembered and stressed that the European commission and member states of the EU have always known about the disconnect between test results and those achieved in operating conditions. These tests cover fuel consumption (mpg), CO2 emissions, NOX, particulates and toxic emissions.
However the “authorities” have been content to accept the control tests as a form of reality and proof of satisfactory progress. Clearly, this Official position is not tenable.
There is going to be a big overhaul in the assessment process and emissions testing and that was already in the pipeline for 2017, but is now likely to be introduced sooner at considerable cost to the automotive industry and possibly their suppliers.
However we should look further ahead than the next five years and think about how we might be dealing with the issue of NOX and particulates. This is not a new problem in itself and the commercial vehicle sector has been in the forefront of reducing pollution with additives in their combustion processes.
When diesel fuel moved from the heavy to the light side of filling stations and it became a regular feature of car ranges, it had to clean up its act. It was the latest in a series of moves.
The engineers will overcome the issues raised because diesel is a more efficient fuel than petrol.
It is also important to separate reality from hysteria. When the hysteria has died down we need to consider the financial effects on VW, and possibly others, if there is sustained opposition to buying diesel cars. There are the immediate financial penalties likely to be imposed, additional refitting and engineering costs, possible repayment of EU states “green incentives” to trade in old-for-new cars from 2009 and the longer term residual value depreciation. We also need to consider the cost to the German economy of lower Volkswagen sales and their car plants making fewer models if demand slumps and the slimmer wage packets of the workers who will have less to spend and return to the German economy. The reality is that Volkswagen is too big to fail and the German Government would find some way to support it, whatever the rest of Europe thought, in much the same was as the UK Government held out its hand to Northern Rock a few years ago. It is going to be a serious problem for Volkswagen but will not be allowed to become an economic catastrophy for the country.
For the component suppliers it raises important issues as well. Bosch said it supplied Volkswagen with the software to get their cars under the Federal emissions limits and also the EU efficiency tests but importantly added that it was fulfilling a contract and it was up to Volkswagen whether or not it activated the software.
It seems it was not activated in all models but just certain versions, even so they amount to about five million cars and light commercial vehicles out of eleven million initially brought into the spotlight. Clearly, one is not legally qualified to say if Bosch could be held liable in any way but it echoes the situation of Takata supplying airbag inflators to car-makers who initially received compensation claims for injuries and deaths. The only fact I am sure of is that the lawyers will have a field day for years to come while the industry simply gets on with its job of making vehicles.
It does, however, mean that possible new forms of engineering and legal agreements will be required in future when a component is developed for a manufacturer so the supplier is acknowledged as taking all reasonable steps to ensure the device or system is not only safe and meets design requirements but will be legally used by the vehicle maker.
It might alter the conventional view of Tier suppliers. What does the tiering system really mean and involve and where does responsibility lie? What do the independents in top tier do about this sort of issue in future? Do the makers leave it to them or monitor, or just update.? Volkswagen realized too late they had not taken advice of Bosch in this case and that just might save the supplier from any legal action.
Looking further ahead to the age of the autonomous vehicle this relationship has to be firmly agreed and understood by all parties, including the customer who orders the vehicle and uses it. There is a parallel in the commercial vehicle sector. In the case of buses it’s not the chassis maker but the body builder who puts it all together and sends it out of the factory gate.
However, the chassis maker is still the turn-key contractor. If the car-maker is the turn key contractor it is the car-maker who is ultimately responsible. Probably more than anything else, the future of vehicle manufacturing will bring into the open the tiering system we are involved in but its established concept, operation, understanding and transparency will almost certainly change with all the implications that has for everyone in the automotive sector and its customers on the roads.
This must be so as a solution to the VW Group’s problems and indeed any other company with a major diesel footprint.
The component makers providing injection equipment are confident they have solutions which will reduce NOX emissions by 95% (source Bosch).
In the past, the vehicle makers baulked at utilizing this solution because of the estimated cost per car and the consequent impact on prices. This was short sighted.
During the 1980s the vehicle firms argued against the three-way catalyst on exactly the same grounds. In the event the extra price to the consumer was minimal because of competition on the one hand and economies of scale enjoyed by catalyst makers and production efficiencies on the other. Sometimes the vehicle makers are their own worst enemy.
So what of VW Group on the one hand and diesel engines on the other?
The way Toyota successfully rode out the storm created by multiple recalls associated with the safety of its vehicles and thereby which questioned the very essence of the company whose reputation was based mainly on its superb build quality and the reliability of its products. In fact, there was no statistically significant effect on its sales or long run reputational issues.
Furthermore, Chrysler’s chief executive of the time Lee Iacocca immediately admitted that it had indeed “clocked” used cars and by doing so turned a drama into a five-minute wonder.
These and other examples from within and outside the motor industry suggests that its probable that the present “disaster” will not have adverse effects on Volkswagen and its relationship with its customers.
After all, to take almost a quarter of the ultra competitive European car market and around 20% of the British one suggests the company must have been doing something right.
In the 1980s the three-way catalyst did much to counter toxic emissions. As a result attention was transferred to the separate issue of tackling greenhouse gases. Here the diesel was seen as a knight in shining armour because of its impact on reducing CO2emissions per mile. Now the wheel has turned again to re-examine what remains of the toxic emissions issue. Compared with the 1980s the problem is much more manageable and as we have illustrated, solutions exist that can reduce the toxic emissions from diesel, leaving it to continue its beneficial effect on green emissions. The diesel remains as green as ever.
Consequently, the predicted demise of diesel power, as that of the VW Group is a major exaggeration and completely premature. After all, the consumer never asked for improved emissions. These were imposed by the “Authorities” who knew better than us what our true interests were. So, if a car does not perform in an area the consumer wasn’t worried about in the first place, one must wonder what the effect is when the consumer reads that these emissions controls do not work as well as claimed. If it was valued so lightly in the first place it’s probable that there is a similar valuation today about problems with their operation.
The saga of unleaded fuel demonstrates the low value the consumer placed on toxic clean up due to their reluctance to pay extra for lead free fuel. In the UK, the Government was overly influenced by vested interests and those specially committed to the issue that they thought the public would pay extra for a gallon of unleaded petrol. This was a major error. Sales of unleaded only took off when the price differential was removed.
To repeat, even though there was a small blip in short run sales in the follow up to the safety-related recall by Toyota, this proved to be of minimum duration. The company retains supremacy in the World Car Market. This will be the probable sequence of events facing the VW Group: Some short-term pain but no long-term harm. Indeed if the company is perceived as correctly handling the crisis it could even benefit from an enhancement in its reputation for efficiency and public concern.
Part and parcel of this must be a candid and transparent admission of who knew about the problem, with no attempt to put the onus of blame on a few fall guys or dolls.
As regards the future of the diesel, a number of points emerge:
- As already indicated the carbon particulates can be burned off so no toxic harm occurs. However, this requires interludes of high speed driving as constant urban driving can damage the filter and the optimum running of the engine. Therefore the filters need to be kept fully operational.
- Clean “diesels” using biofuels should be further encouraged. Historically the very first diesels ran on peanut oil. Such fuels considerably reduce the toxic emissions.
- Devices exist which can reduce NOX emissions as indicated above. Car-makers must sideline their concerns about extra costs and higher prices and install such devices.
- The timeline for the introduction of low carbon technologies such as batteries, fuel cells and hybrids suggest that post 2025 the use of internal combustion engines in cars could significantly fall. Although this is concerned with the reduction in CO2, the employment of different types of power train could reduce both types of emissions.However it is still expected that the internal combustion engine perhaps using gas and renewables will have a major role to play long term. A free gift where emissions are concerned are improvements in driving techniques which commercial vehicle transport shows can reduce emissions by 12-16%.
- There will be uses where the diesel will reign supreme. The use of cleaner technologies will mean that the diesel will continue to power heavy trucks and indeed a myriad of other applications and in addition the internal combustion engine will have a long-term future in hybrid solutions.
© Prof Garel Rhys, CBE, Prof Emeritus Cardiff University and President of the Centre for Automotive Industry Research.