What Drives Demand for Clean Diesel Cars?

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The ECOnetic Ford Fiesta is a clean diesel car with an engine that gets 65 mpg — but it's only available in Europe.
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In the United States, federal taxes on diesel fuel are 6 cents/gallon higher than on gasoline.

Why are there so many more models of clean diesel cars in Europe than we have here in the United States?

Thomas Cantrell
San Francisco, California

It’s true that diesel cars are quite popular in Europe, certainly more so than in the United States. In some European countries, diesel cars outsell gasoline cars. But a variety of recent changes may make diesel cars much more common in the United States.

The main reason for diesel’s popularity in Europe is simple economics: Fuel (gasoline and diesel) is much more expensive in Europe than it is in the United States, primarily because of higher taxes. In 2008, while we were complaining about $4/gallon gasoline, the price of both gasoline and diesel in Europe was about $8.50 per gallon. With that in mind, diesel cars are a more compelling choice for Europeans because they are about 30 percent more fuel efficient than their gasoline-powered counterparts (for perspective, that’s about the same difference as that between a regular gas car and a gasoline-electric hybrid car). Over the years, demand from European drivers for diesel cars has sparked a wide range of diesel models and sizes.

Until recently, relatively low gas prices made fuel economy at best a minor priority for most Americans. But that has changed — perhaps permanently. Not only did gas prices spike in the summer of 2008, but they have remained unstable ever since. Diesel fuel also used to be less expensive than gasoline, but that too has changed in recent years. In general, diesel is now more expensive than gas, and its price fluctuates at a different rate than that of gasoline.

Policies from the federal government also have affected the price of diesel fuel. Federal taxes on diesel fuel are higher than those for gasoline: 24.4 cents per gallon for diesel compared with 18.4 cents per gallon for gasoline (state taxes on gasoline and diesel vary). In contrast, many European countries tax diesel less than gasoline in order to promote an increase in fuel efficiency.

Another hurdle for diesel cars in America has been their reputation. Critics say diesel cars are noisy and smelly polluters that belch black smoke. While that was true of some diesel cars from decades ago, new “clean diesel” engines are smooth, quiet, and powerful, with tailpipe emissions rivaling those of modern gasoline engines. Read more in Clean Diesel: A New Era of Green Cars.

Two more factors caused all but a few automakers to shy away from selling their diesel models in the United States: inconsistent emissions regulations from state to state and the limited availability of the new clean diesel fuel. California was the first state to impose emissions regulations on diesel cars that make them more difficult to certify than gas cars, followed by a handful of New England states. Not being able to sell diesel cars in these states (or making different versions to meet different emissions regulations) was unappealing to the automakers, but there was a bigger issue that compounded the problem.

The diesel fuel sold in the United States had high sulfur content, which wasn’t compatible with the new clean diesel technology developed for the European market. So even if an automaker offered clean diesel models, the United States didn’t have the fuel to power them. That changed in 2006, when the federal government mandated the use of the more highly refined ultra-low sulfur diesel fuel for on-road vehicles. The new specification allowed just 15 parts per million of sulfur, compared with the old standard of 500 parts per million.

Another historical problem for diesel adoption was the number of refueling stations. There was a time when refueling a diesel car or truck meant a trip to the nearest truck stop. But with the growing popularity of turbo diesel engines in full-size American pickups, more and more gas stations have added diesel pumps in recent years.

In the end, consumer demand will dictate how many diesel car models come to the United States. Test-drive one for yourself to experience how a modern clean diesel car compares with gas cars. These cars are powerful (tons of torque) and fun to drive, plus they have high fuel economy.

— Todd Kaho, executive editor, Green Car Journal