Current state of affairs
Since the early 1990s we have seen a diesel love affair evolving in Europe where car buyers started an impressive trend away from gasoline fuel to diesel-powered engines. Diesel cars had the reputation to be “dirty and slow” but high efficiency, enhanced technical performance and lower prices than gasoline started to move the consumers away from gasoline onto diesel cars in many European countries. At the same time the diesel fuel quality developments by the oil industry, initiated by the European Commission and demanded by federal legislators in European countries and cities brought the so-called “Clean Diesel Fuel” to the market and consumers felt affirmed to have done the right thing by changing to diesel-powered engines.
The market share for newly registered passenger diesel cars in Western Europe has almost quadrupled over the last 25 years and we have seen rates as high as 80% per year in i.e. leading European economies such as France. In contrast to Europe, the nationwide diesel car sales share in the US is a negligible 3%.
During the same time span European transportation fuels went through a number of quality changes, in terms of carbon monoxide, nitrogen oxide and particulate matter (PM) and the table below shows the chronological development of the Euro 1-6 emissions standard for diesel and petrol cars implementation.
For a decade or more European policy makers had focused on targets to reduce carbon dioxide emissions which prompted car makers to invest heavily in diesel vehicles but the November 2014 announcement by French Prime Minister Manuel Valls in which he admits that the promotion of diesel cars had been a mistake comes as no real surprise to the observer. In the meantime the French government has pledged to “progressively ban” diesel vehicles from 2015 on.
Paris mayor Anne Hidalgo promised to have banned diesel vehicles from the city by 2020. Apparently, a big shift is taking place in the European debate over vehicle pollution and it is quite remarkable that the centre of attention is in France, a country which strongly promoted diesel engines and fuels over the last two decades and which has currently a more than 60% market share for diesel cars.
But the issue has already spread much further. In Italy health officials have noted an increase in reports of cardiovascular disease. In the UK one study states 9416 premature deaths in 2010 which are attributed to nitrogen dioxide and PM2.5 particles. Last year London mayor Boris Johnson called for a British programme to pay some drivers to scrap their diesel vehicles.
Diesel exhaust laden with insidious soot particles, the so-called PM2.5 (particulate matter smaller than 2.5 microns) allow carcinogens to penetrate deep into tissues and organs.
Volkswagen emission scandal accelerated and extended the negative diesel image
For a number of years Volkswagen persuaded consumers it had created a new generation of so-called clean diesel cars – until investigators in the US discovered that defeat devices, which activated emissions controls only when the cars were tested, were concealing the fact that its vehicles emitted up to 40 times the permitted levels of pollutants during regular use. Since the obvious scandal became publicly known, Volkswagen has been punished with plummeting sales and costly recalls. Yet the public outrage over the fraud obscures a much larger issue.
Monitoring sites in European cities such as London, Paris, Stuttgart, Munich, Milan and Rome have reported high levels of nitrogen oxides and particulate matters (soot) that created menacing smog. Recently, officials in Milan temporarily barred cars from the city; in Rome, too, persistent smog has forced the authorities to limit the use of private vehicles. In March 2015, Paris was enveloped in a grey cloud of choking fumes that obscured the Eiffel Tower for hours and briefly earned the capital the title of the world’s most polluted city, beating out even Beijing. An air quality expert in Britain reported that much of it was “stale diesel” from traffic emissions generated in European cities.
In Europe, where diesel enjoys in preferential excise duty treatment over gasoline in most member states, the automotive and fuel industry realized early that promoting diesel would likely be “plain sailing” – the pump price per litre is lower than the price for gasoline and the “clean fuel’ image will be happily absorbed by the consumer.
In the US, Volkswagen pushed hard to promote its TDI technology (Turbo-charged direct injection) for diesel cars as far less polluting. However, today after the VW emission scandal broke, researchers at Stanford University reported already in 2002 that the claimed “cooling” by carbon dioxide emission reduction in diesel engines is more than offset by the “warming” due to higher soot emissions.
The VW emission fraud has shifted the diesel air quality issue to a much higher level with full attention from the public and political forces. The numerous measurements undertaken or planned by a whole range of cities in Europe is just the peak of the iceberg and further action is being considered which will challenge both industries, the car makers and the fuel suppliers, once again.
WHO stated PM and diesel emissions are carcinogenic
The International Agency for Research on Cancer (IARC) which is part of the World Health Organization reported in two press releases
that Diesel engine exhaust and particulate matter (PM) are classified as carcinogenic to humans (Group 1). In press release no 221, the IARC also classifies outdoor air pollution in general as carcinogenic to humans (Group1) .
Diesel exhausts were classified as probably carcinogenic to humans (Group 2A)in a previous press release from 1988 and since 1998 an advisory group within the IARC had recommended diesel exhaust as a high priority for re-evaluation.
The press releases state that in 2010, 223,000 deaths from lung cancer worldwide resulted from air pollution. An article on the Environmental Health News website (EHN is a non-profit, independent organization) states that an estimated 6% of lung cancer deaths in the US and in the UK may be due to diesel exhaust, according to a study released in November 2013.
The IARC Monographs evaluation for the outdoor air pollution assessment which comprise of more than 1000 scientific papers from studies on five continents analyses the carcinogenicity of various pollutants present in air pollution, especially particulate matter and transportation-related pollution, showed an increasing risk of lung cancer with increasing levels of exposure to particulate matter and air pollution.
The evaluation of the diesel engine exhaust evidence concluded that there is sufficient evidence in humans for the carcinogenicity of diesel exhaust, leading to the Group 1 classification for diesel engine exhaust.
Air quality impact of diesel “severely underestimated”
A recent ‘Science for Environment Policy’ news alert, dated 14-Jan 2016, the European Commission reports that hydrocarbons are precursors to hazardous air pollutants including ozone and particulate matter (PM). Hydrocarbons from diesel make up over 50% of all atmospheric hydrocarbons in London, a new study conducted by researchers at the York University has found. The authors also estimate that they contribute up to half of total ozone production potential in London, and say future air quality control strategies must focus more on these pollutants and call for an improvement of legislation on the issue.
Around three quarters of the European population now live in urban areas, and as a result are exposed to hazardous air pollution. The primary urban air pollutants are particulate matter (PM), nitrogen oxides (NOx), ozone (O3) and volatile organic compounds. These pollutants are linked to respiratory and cardiac disease and can reduce life expectancy.
Hydrocarbons (chemicals made up of hydrogen and carbon) are precursors to two priority air pollutants: ozone and PM. Small hydrocarbons (containing between two and seven carbons) are relatively simple to observe and levels have been successfully reduced in many cities. However, those with longer carbon chains — typically released from diesel vehicles — are more difficult to measure, and therefore are not explicitly considered in air quality strategies.
Other countries turning away from diesel
Apart from the various measurements taken or planned by a range of European countries (UK, France, Italy) to restrict or even bar diesel engine cars in their cities, other countries are now also paying high attention to the matter in order to tackle air quality and pollution issues.
India has recently announced that new diesel car sales will be banned in Delhi as the pollution debate intensifies. India’s Supreme Court has banned new luxury diesel vehicles in Delhi and doubled a recently imposed “green tax” on trucks coming into the city – the latest in a series of tough measures to curb pollution. The ban on the registration of new diesel vehicles with engines of two litres or more will initially be in force until 31-March 2016 but it is a warning sign to India’s car industry of the growing backlash against diesel, especially against larger, heavy sport utility vehicles popular among the wealthy.
The Volkswagen scandal in the US has already led to a consumer de-selection trend which undermines the overall passenger diesel car share of 3% as new registration show a drop to a 1% share only.
Conclusion
For the European oil industry, the expected decline in diesel penetration leading to shifting consumers back to gasoline might actually be a positive turn, as refiners were facing significant investment needs at a time when low oil prices and major cutbacks on capital spending programmes.
Whether the VW scandal will accelerate the diesel decline is yet to be seen but restrictive measures on the use and acceptance of diesel-powered passenger cars will ultimately make the consumer more aware of air quality issues and potentially change the public perception once again.
In 2015, after years of building up diesel production, European oil refiners have been using every trick in the book to maximize gasoline output to meet unabated global demand as the two fuels stage a sharp reversal of fortune. Many operators in Europe, including Total, BP, Royal Dutch Shell and ExxonMobil, have invested hundreds of millions of dollars over the past decade to increase production of diesel, the road fuel of choice in the region, while seeking to lower gasoline output, seen as a mere "by-product" of that process until recently.
But today, after Russia significantly increased its diesel output over the last two years, the world faces a growing excess of diesel and spectacular demand in Asia and the United States for gasoline and naphtha. While oil refineries cannot maintain high output of gasoline without also ramping up diesel production, they are now taking every possible step to tweak production in order to favour gasoline and naphtha.
One such step is using lighter crude oil grades as feedstock with higher yields of gasoline and naphtha. For example, light Nigerian crude prices have outperformed heavier grades. Some refineries have also opted to lower operating levels or runs for the hydrocrackers. At the end of 2015, as naphtha cracks surged to record levels, some refiners have tweaked the distillation boiling temperature, in order to favour naphtha over kerosene and jet fuel, according to refinery sources and traders.
Benchmark European gasoline refining margins are seen at a level of $13-15 a barrel for the last couple of months, nearly three times higher than a year ago and ten times above 2013 levels -- as demand in China and Asia for the road fuel remains unabated. Diesel cracks, on the other hand, have languished due to rising global production, slower demand and a mild winter that has filled storage tanks to the maximum.
In this issue of our “In Conversation with” we talked to Mr. Jeff Hove, acting Vice President and Executive Director at the Fuels Institute. In recent years we have seen some initiatives to consider policies to ban the sale of vehicles equipped with internal combustion engines (ICE), predominantly emerging in Europe, but also spreading out in parts of Asia.
In this issue of our “In Conversation with” we talked to Dr Tilak Doshi, an energy sector consultant based in Singapore. Dr Doshi shared his views and observations about the global “2050 decarbonisation” plan and move towards Electric Vehicles (EVs) with us. We would like to thank Dr Doshi for his efforts to comprehensively answer our questions which provide some highly valuable and very interesting insights into this matter, highlighting a range of topics often overlooked in the political discussion between the various stakeholders in the race to save the world from impending climate catastrophe.
In this issue of our “In Conversation with” we talked to Dr Sanjay C Kuttan, Chairman of the Sustainable Infrastructure Committee at Sustainable Energy Association of Singapore (SEAS).
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