Motorists gear up for switch to clean-burn diesel fuel
Motorists gear up for switch to clean-burn diesel fuel
By Bernard Simon in Toronto
Copyright The Financial Times Limited 2006
Published: October 13 2006 03:00 | Last updated: October 13 2006 03:00
The drive to con-vert American motorists to diesel will take a big step forward during the next few days asa more environmentally friendly version of the fuel goes on sale.
The clean-burning ultra-low sulphur diesel emits only 15 parts per million of sulphur, compared with 500 parts for existing diesel. Used in conjunction with the latest diesel engines, it greatly reduces the noise, smell and soot that have up to now turned many Americans off diesel.
"We're bullish on this," said Volkswagen, which sells the most diesel vehicles in the US. "Several of the barriers to diesel ownership are going to go away."
Stephen Johnson, the admin-istrator of the Environmental Protection Agency, described ULSD this week as the biggest advance in clean fuels since the removal of lead from petrol in the 1980s. Diesel typically offers 30-45 per cent more fuel economy than petrol and is already widely used for trucks, buses and off-road vehicles. The introduction of ULSD has facilitated tighter emission standards for heavy-duty trucks, which take effect in January.
But car owners have so far shown little enthusiasm. Though sales of diesel-powered cars and light trucks rose by almost a third last year, they still made up only 3.6 per cent of the total. In Europe, by contrast, diesels account for close to half of vehicle sales.
Allen Schaeffer, the executive director of the Diesel Technology Forum, a lobbying group, acknowledges that "the fuel itself is not going to generate a lot of excitement among consumers. The real promise comes with what it enables."
The hope is that interest will swell with the arrival during the next two to three years of a slew of diesel models with the exhaust-scrubbing technology required to take full advantage of ULSD.
Mercedes-Benz will start rolling out its diesel-powered E320 Bluetec saloon in 45 states next week. The car will not meet emission standards in the remaining five states, including California and New York, until 2008.
Chrysler plans to introduce the US's first full-sized, diesel-powered sports utility vehicle early next year in the form of a diesel version of its Jeep Grand Cherokee. But the big push will not come until 2008 and 2009 when General Motors, Honda and VW, among others, are expected to launch diesel-powered models.
"Once that happens, it will spark further interest and more product from the manufacturers' side", says Jeff Schuster, director of global forecasting at JD Power, a market research group.
The next generation ofdiesel vehicles will for the first time meet federal emission standards, enabling buyers to qualify for a "fuel efficiency" tax credit of between $300 (€239, £162) and $3,400 a vehicle.
The credits also apply to hybrid petrol-electric vehicles. But the most popular hybrids, notably the Toyota Prius, have used up their 60,000-vehicle allocation, giving diesels a potential competitive edge. A JD Power forecast that diesels would garner 10 per cent of the US market by 2015 roughly double hybrids' share.
Besides overcoming Americans' ingrained prejudice against diesel engines, the diesel lobby also faces the challenge of volatile fuel prices. While diesel has traditionally been cheaper than petrol, that has changed during the past year as demand from China and India has ballooned. In addition, US refineries have more flexi-bility to adjust supplies ofpetrol than -diesel.
Diesel reached a peak of $3.24 a gallon last October, compared with $3.06 for regular unleaded petrol, according to the AAA motoring organisation. This week, diesel is selling at a national average of $2.62 a gallon, versus $2.26 for regular petrol and $2.48 for premium.
Diesel vehicles made up more than half of Volkswagen's US sales at the height of the spike in petrol prices in 1981. But they accounted for only 13.5 per cent of the German carmaker's sales in the first nine months of this year.
Persuading Americans of diesel's benefits would be much easier if the fuel regained its price advantage.
By Bernard Simon in Toronto
Copyright The Financial Times Limited 2006
Published: October 13 2006 03:00 | Last updated: October 13 2006 03:00
The drive to con-vert American motorists to diesel will take a big step forward during the next few days asa more environmentally friendly version of the fuel goes on sale.
The clean-burning ultra-low sulphur diesel emits only 15 parts per million of sulphur, compared with 500 parts for existing diesel. Used in conjunction with the latest diesel engines, it greatly reduces the noise, smell and soot that have up to now turned many Americans off diesel.
"We're bullish on this," said Volkswagen, which sells the most diesel vehicles in the US. "Several of the barriers to diesel ownership are going to go away."
Stephen Johnson, the admin-istrator of the Environmental Protection Agency, described ULSD this week as the biggest advance in clean fuels since the removal of lead from petrol in the 1980s. Diesel typically offers 30-45 per cent more fuel economy than petrol and is already widely used for trucks, buses and off-road vehicles. The introduction of ULSD has facilitated tighter emission standards for heavy-duty trucks, which take effect in January.
But car owners have so far shown little enthusiasm. Though sales of diesel-powered cars and light trucks rose by almost a third last year, they still made up only 3.6 per cent of the total. In Europe, by contrast, diesels account for close to half of vehicle sales.
Allen Schaeffer, the executive director of the Diesel Technology Forum, a lobbying group, acknowledges that "the fuel itself is not going to generate a lot of excitement among consumers. The real promise comes with what it enables."
The hope is that interest will swell with the arrival during the next two to three years of a slew of diesel models with the exhaust-scrubbing technology required to take full advantage of ULSD.
Mercedes-Benz will start rolling out its diesel-powered E320 Bluetec saloon in 45 states next week. The car will not meet emission standards in the remaining five states, including California and New York, until 2008.
Chrysler plans to introduce the US's first full-sized, diesel-powered sports utility vehicle early next year in the form of a diesel version of its Jeep Grand Cherokee. But the big push will not come until 2008 and 2009 when General Motors, Honda and VW, among others, are expected to launch diesel-powered models.
"Once that happens, it will spark further interest and more product from the manufacturers' side", says Jeff Schuster, director of global forecasting at JD Power, a market research group.
The next generation ofdiesel vehicles will for the first time meet federal emission standards, enabling buyers to qualify for a "fuel efficiency" tax credit of between $300 (€239, £162) and $3,400 a vehicle.
The credits also apply to hybrid petrol-electric vehicles. But the most popular hybrids, notably the Toyota Prius, have used up their 60,000-vehicle allocation, giving diesels a potential competitive edge. A JD Power forecast that diesels would garner 10 per cent of the US market by 2015 roughly double hybrids' share.
Besides overcoming Americans' ingrained prejudice against diesel engines, the diesel lobby also faces the challenge of volatile fuel prices. While diesel has traditionally been cheaper than petrol, that has changed during the past year as demand from China and India has ballooned. In addition, US refineries have more flexi-bility to adjust supplies ofpetrol than -diesel.
Diesel reached a peak of $3.24 a gallon last October, compared with $3.06 for regular unleaded petrol, according to the AAA motoring organisation. This week, diesel is selling at a national average of $2.62 a gallon, versus $2.26 for regular petrol and $2.48 for premium.
Diesel vehicles made up more than half of Volkswagen's US sales at the height of the spike in petrol prices in 1981. But they accounted for only 13.5 per cent of the German carmaker's sales in the first nine months of this year.
Persuading Americans of diesel's benefits would be much easier if the fuel regained its price advantage.
posted by Carlos T Mock @ 5:25 PM
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