Decline in Diesel Vehicles - Assessment of Challenges and Options
iasparliament
March 01, 2019
What is the issue?
Across the world, the popularity of diesel as a powertrain for passenger vehicles is on the decline.
The government and auto makers in India should work together to ensure a smooth transition to other options.
What are the recent developments?
Europe, diesel vehicles' biggest market (53% of all cars sold is powered by diesel), is fast giving up on diesel.
France, where diesel cars account for 70% of its overall fleet, saw more petrol cars being sold in 2017.
In Germany, the share of diesel cars fell from 48% in 2012 to 33% in 2018.
How is diesel use in India?
India’s love for diesel powertrains peaked in 2012-13.
That was a time when diesel cars accounted for 47% of all passenger vehicles sold in the country.
The trend was driven more by cheaper diesel prices than other reasons, as it was lower than petrol by as much as Rs. 25 per litre.
However, government de-controlled diesel prices in 2014.
As the price differential between diesel and petrol narrowed, the preferences changed.
Today, only 23% of the cars sold have diesel powertrains.
How have the emission norms evolved?
Globally, the initial stages of emission norms focussed on carbon-di-oxide emission. E.g. Euro-I to Euro-IV emission norms
So diesel engines performed well on this account as they emitted lower CO2.
Diesel cars were increasingly promoted in most European countries with incentives.
As emission norms evolved, it became clear that particulate matter (PM) and Oxides of Nitrogen (NOx) were equally dangerous.
Notably, diesel engines emit higher levels of PM and Nox than petrol engines.
So Euro-V norms were introduced in 2010 focussing on reducing PM, and Euro-VI norms came into force in 2015 targeting NOx.
What is the challenge now?
Indian government too has decided to shift from BS-IV to BS-VI emission norms from April 2020. Click here to know more.
This will directly impact diesel engines the hardest.
The manufacturers have to tackle both PM and NOx in one go, with a complex exhaust system.
This will lead to cost escalation of up to Rs. 1.50 lakh depending on the size of the engine.
Resultantly, only costly SUVs will be able to absorb this cost and less-expensive, small, compact and entry level diesel versions will be out of the market.
Manufacturers who have set up large diesel engine capacity will have to compensate for fall in domestic demand by pushing exports.
Is shifting to petrol feasible?
Shifting to petrol powertrains will have another challenge for the manufacturers, which is the CAFE norms.
The CAFE (Corporate Average Fuel Efficiency) norms came into force from April 2017.
It requires cars to be 10% or more fuel efficient between 2017 and 2021, and 30% or more fuel efficient from 2022, in terms of CO2 emission.
The move is targeted at reducing the carbon footprint of the automobile industry.
Diesel cars had been helping manufacturers meet these norms.
But the shift to petrol would increase the CO2 emission and the manufacturers would have to produce more fuel efficient petrol cars or electric/hybrid vehicles.
What lies before India?
India will have to promote electrification and hybridisation more seriously.
Its vision of 100% electrification of passenger vehicle sales by 2030 may be aspirational but achieving even a third of that target necessitates a massive change.
As, in India where bulk of the cars sold is small cars, the cost of electrification may just not work out.
Though battery costs have come down substantially over the years, it is still not low enough by Indian standards.
Government should move forward with the Faster Adoption and Manufacturing of Electric Vehicles (FAME)-2 norms.
This should incentivise the manufacturer rather than the buyer.
For goods movement, the only option is to reduce the share of road transportation and to focus on coastal shipping and inland waterways.
