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Disappointed by Diesel? The impact of the shift to Diesels in Europe through 2006

Panel: Panel 6. Energy efficiency in transport and mobility

Authors:
Lee Schipper, Precourt institute for Energy Efficiency, Stanford University, USA
Lew Fulton, International Energy Agency
Energy Technology Policy Division, France

Abstract

A previous review of trends in light-duty diesel vehicle sales and usage in Europe through the mid 1990s questioned whether the shift toward diesels would yield large energy savings (Schipper, Fulton and Marie 2002, SFM). This study expands the sample of countries in the previous work and adds about ten years more data from both new vehicle test fuel economy and on-road performance, including usage.

The updated findings renew the concerns first expressed in SFM. Although there is still evidence that diesels of a certain size have a substantial (volumetric) fuel economy advantage over gasoline vehicles of a similar size (perhaps 30% on average), average new diesel cars and the stock of diesels on the road maintain a smaller efficiency advantage over gasoline, on the order of 15% in most countries as of 2005. When the higher energy content of diesel is considered, the new vehicle and on-road figures shrink to less than a 5% and 7% fuel intensity advantage for new diesel vehicles and stock, respectively. The net CO 2 /km emissions advantage for diesels is even less; for new cars, below 5% in all but one country and 0% on average across the 8 sampled countries in 2005. For total stock, diesel has a 2% average CO 2 advantage.

Even normalizing for the larger average size of diesels, their CO 2 advantage appears to be no more than 15-18% for vehicles of a similar size class. Diesels are typically larger and are driven 60-100% more per year than gasoline cars. While much of these differences could be ascribed to self selection and related effects, some are likely due to a rebound effect created by diesel's better fuel economy and (in many countries) the lower price of diesel fuel. Using typical elasticity estimates to measure the driving rebound effect, the average result is about a 5% increase in annual driving and up to a 12% increase depending on the country and assumed elasticity. This is small compared to the observed driving difference between gasoline and diesel vehicles (and therefore raises questions for further research), but it is enough to offset the remaining fuel savings and CO 2 benefit of diesels in the sampled countries.

The findings indicate that after taking all factors into account, diesels in Europe may provide significant fuel savings to individual drivers, but probably do not provide significant national energy or CO 2 savings on average across the 8 countries studied. Almost certainly, taxing diesel fuel lightly relative to gasoline is counterproductive from an energy savings and CO 2 point of view since it contributes to a higher rebound effect (by lowering the cost per km of driving diesels). The good news is that diesel fuel price subsidies relative to gasoline have declined in most EU countries in the past 10-15 years, and the price-induced rebound effect is probably much lower in many countries than it once was.

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