Analysis
10 Apr 18

Keep calm and diesel on

The RDE and Euro 6d-temp standard ensure NOx and PM emissions are a fraction of what they used to be. Most Low Emission Zones are unlikely to ban compliant diesels in 2025. Time to restore your faith?

Many experts agree that diesel does not deserve the cold shoulder it is given today. A correction in the petrol-diesel balance was unquestionably necessary, but that does not mean we should throw the baby out with the bathwater. OEMs have been investing billions of euros in the development of emission reducing technology, making the latest diesels cleaner than ever before.

In fact, the implementation of the Real Driving Emissions (RDE) test on September 1st, 2017 has put a lid on new diesel cars’ NOx emissions. The threshold value of 80 mg/km is still the same as the one introduced in September 2014, when the Euro 6 standard took effect. But that value was only verified in lab conditions, not in the real world, and surely enough, studies showed appalling deviations between theory and practice. Hence the introduction of RDE: a real-world emission test.

Euro 6, Euro 6d-temp, Euro 6d?

Today’s version of Euro 6, i.e. Euro 6d-temp – indeed, a temporary one – cuts OEMs some slack in preparation of the ‘real’ Euro 6d standard, which applies in 2020 and limits the NOx emissions measured during the RDE test to 120 mg/km, i.e. 150 percent of the 80 mg/km ‘lab’ threshold set by Euro 6. To comply with the Euro 6d-temp, a car mustn’t emit more than 168 mg/km while tested on the road.

So basically, the Euro 6 'lab' threshold values remain the same – which is why the new versions are not called Euro 7 – but the allowed deviation between lab and real life is decreasing step by step. Euro 6d-temp (168 mg/km) is already a huge improvement over the values measured from the first Euro 6 diesels by independent test laboratories a few years ago, which caused outrage amongst consumers and environmental organisations.    

LEZ: Euro 6d-temp welcome

Many large metropolitan areas are introducing a Low Emission Zone (LEZ) or even an Ultra-Low Emission Zone (ULEZ) to fight the consequences of traffic-related air pollution. That is one of the reasons for companies to rethink their fleet policy. Still, there is no reason to panic. Even the strictest of European LEZs will probably still allow diesels until 2025, as long as they are at least Euro 6d-temp compliant.

Considering that the average lease cycle of a car is 3.5 years, companies can still replace their current cars with new diesels, and again in 2021. By then, the Euro 6d will have taken effect, and there is no reason to believe that technology won’t have evolved enough to safeguard the future of this fuel-efficient powertrain type.  

Even if some cities will have closed their gates to all diesel vehicles by then, that does not take away that diesels could remain the best long-distance runners both economically and ecologically. The latter certainly applies to larger and heavier vehicles, such as SUVs; petrol engines hate mass and resistance and make you understand that by drinking heavily when confronted with either one of them.

The cure called petrol

The extra technology that the latest diesels carry does indeed come at a price. Compared to a Euro 4 diesel engine, a Euro 6d-temp one costs more than twice as much to build. Together with the declining cost advantage of diesel as a fuel compared to petrol, this will inevitably lead to the demise of diesel in smaller cars. In fact, Skoda struck diesel from its Fabia line-up on the occasion of the latter’s midlife facelift.

However, petrol engines, too, are becoming dearer generation by generation because they are all switching to high-pressure direct injection, variable valve lift and timing, and variable turbocharging. Moreover, a study performed by the European Commission’s Joint Research Centre shows that direct-injection petrol engines emit up to 100 times more particulate matter than indirect-injection units. That means that petrol engines, too, need particulate filters to stay within the RDE limits, further increasing their production cost.

In some cases, small-capacity turbocharged direct-injection petrol engines even emit more particulate matter and NOx than the equivalent diesel model. Worse still, the particles emitted by petrol engines are much smaller – even smaller than a virus, meaning they largely remain undetected and have an alarming capacity to transport toxic metals and hydrocarbons directly into the body through the lungs. In conclusion, petrol is not the cure-all for emission issues. 

Do OEMs need diesel?

To drastically lower their vehicle line-up’s CO2 emissions and meet the 95 g/km target set by the EU, car makers still can’t do without diesel today. That is all the more true with the introduction of WLTP. Diesels remain 20 to 25 percent more fuel efficient than their petrol peers. Also, most of the R&D budget has gone to getting diesels to comply with the emission standards. OEMs need to sell enough units to spread these costs.

Another way to lower your line-up’s weighted average is to massively promote plug-in hybrid cars, like BMW, Mercedes, Porsche and Volvo have been doing. But they are still more expensive to produce and do not fit everybody’s budget, meaning they can never sell in the same numbers as diesel-powered engines. Mild (48 volt) hybrids – either diesel or petrol-based – do not offer the same emission-reducing potential, but they are much cheaper to build and expected to become the norm by 2020.     

Dropping residuals

Another reason why diesel faces detraction is the fact that leasing companies have been adjusting their residual values. But is this a logical and justified reaction? They might be having a tough time selling Euro 5 diesel-powered off-lease vehicles today, but that does not necessarily mean that Euro 6d-temp diesels entering their service cycle today will face similar difficulties when they are ready for remarketing by the beginning of the next decade.

Likewise, even if petrol-powered used cars are selling at higher prices than before due to low supply and high demand, there is no guarantee that this trend will continue over the coming years. The corrections that the used car market is experiencing today are expected to level out already this year. In some countries, the RV corrections have been marginal to begin with, incidentally.    

Believers, naysayers and doubters

Apart from VW Group and Daimler, who remain diesel advocates, not many car makers dare to take a stance today, uncertain of what the near future will bring and how the market and legislators will respond to further (health) studies and investigations. The only real naysayer is Toyota: already this year, the Japanese OEM will stop selling diesel - at least in its car lineup: Toyota LCVs will continue burning diesel. That makes perfect sense: they have always believed in hybrids and only offered (BMW-sourced) diesels in Europe because that was the only way to enter the fleet market.    

Will Toyota capitalize on the anti-diesel climate and leverage its two-decade hybrid knowhow? Wait and see. What most OEMs agree on, is that electrification is the way forward and that various powertrain solutions will coexist. For many of them, not least the European carmakers, diesel has a role to play, but it is likely to be confined to the more expensive and heavier cars.   

Picture copyright: Audi, 2018

 

Authored by: Dieter Quartier
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