Expert Blog

Diesel’s difficult future

Diesel was the future once. Or at least that’s how it seemed from the newspaper headlines. “Diesel cars now more popular than petrol-driven vehicles,” announced one of those headlines in 2010, for the news that diesel sales had overtaken petrol for the first time ever. It was thought then that, with the British economy struggling to recover from the crash, people were thinking more about their own fuel economy. They were putting efficiency ahead of petrol-powered va-va-voom.

But what’s the story now, four years later? In truth, diesel cars still outsell their petrol equivalents – but in diminishing proportions. Last year, 49.8 per cent of new car registrations in the UK were diesel, down from 50.8 per cent in 2012. Meanwhile, petrol sales rose from 47.8 per cent to 48.8 per cent. So, in that one year, a three percentage-point gap between the two fuel types was reduced to one point. Petrol is catching back up.

This reflects trends across the rest of Europe, traditionally the world’s biggest market for diesel vehicles. Sales of diesel vehicles declined in the European Union as a whole, last year. But some of the most dramatic declines were in those countries where diesel has been most dominant: France, Spain and Belgium. In France alone, diesel sales fell by almost 6 percentage-points to 67 per cent overall.

There are plenty of explanations for diesel’s downwards trend. One, like in 2010, is the economics of it all. Diesel cars are more expensive to purchase than the petrol alternative, and so too is each litre of the fuel. This is fine when people are driving their diesels regularly and for long distances, when the better fuel efficiency will have chance to tell. But it’s less fine when people aren’t driving as much, or when petrol engines are becoming more efficient. And that’s exactly what’s been happening. People aren’t driving as much. And petrol engines are becoming more efficient. The sums are no longer entirely in diesel’s favour.

And the cold, hard numbers could become colder and harder still – thanks to a grand shift in attitudes about pollution. When carbon dioxide was the bête noire of environmentally-minded politicians, diesel cars werepromoted and subsidised for their lower CO2 emissions and greater fuel efficiency. But nowadays there’s a heavier emphasis on other dangerous pollutants, such as nitrogen oxides, that diesel emits more copiously. Boris Johnson is among those now calling for motorists to be encouraged off diesel, either through higher taxes or through scrappage schemes

This political about-turn is codified in a new set of EU emissions rules. The ‘Euro 6’ regulations come down on nitrogen oxides as never before, and therefore on diesel vehicles too. The filtration technology that will be required on diesel engines is costly for manufacturers, leaving them with two choices: i) pass the costs onto consumers, or ii) produce fewer diesel vehicles. Either way, according to many analysts, the popularity of diesel is likely to decline. And, all the while, petrol engines will continue to be refined to the point of supremacy.

Which could mean that diesel’s last hope is in other markets, such as China and India, where there’s plenty of potential for growth. But whether that potential is realised is another question entirely. Or perhaps it’s all a moot question, anyhow. With the driverless, electric car coming down the highway, both diesel and petrol could soon belong to the foggy past.

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