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VW Scandal May Backfire On Diesel

Tony Awunor with agency reports
Volkswagen’s worldwide pollution-cheating scandal threatens to backfire on diesel, the fuel that powers most new cars in Europe and is defended by manufacturers as a vital means to curb global warming.
Diesel spews out less heat-trapping carbon dioxide than gasoline, the industry argues, but without sophisticated controls, it may also emit harmful levels of poisonous nitrogen oxides and lung-clogging particles.
Revelations that Volkswagen equipped 11 million of its diesel cars worldwide with software that can switch off those pollution controls – except when it detects that it’s undergoing official testing – have sharpened the focus on diesel’s risks.
Carmakers were reluctant to comment on diesel’s attributes in the midst of the Volkswagen scandal, which cost the group’s chief executive Martin Winterkorn his job on Wednesday.
But former Renault boss Louis Schweitzer laid bare the worst fears of major manufacturers on Thursday when he said: “It would be disastrous to conclude that diesel must die.”
For some politicians, however, that is precisely the lesson to be learnt.
Emmanuelle Cosse, French national secretary of Europe Ecology – The Greens said: “Let’s stop lying to the French people by encouraging them to buy so-called ecological cars; clean diesel does not exist.”
In France, where most drivers use diesel, 59.6 percent of people say they do not believe the fuel is clean, according to a Harris Interactive survey published this week.
A separate survey by Tilder/LCI/Opinionway asked 1000 people if the Volkswagen revelations had changed their view of diesel cars: 27 percent said they now had a “more negative” opinion while 70 percent said it made no difference.
The Times of London said in an editorial on Wednesday: “This scandal may yet be seen as a turning point in automotive history. Hybrid and all-electric technologies, in which Apple and Google are poised to pounce, could be the beneficiaries.”
Industry analyst Meissa Tall commented: “Diesel is in the firing line of the authorities and some ecological activists, and the Volkswagen case is not going to help things; it could make them worse.”
Lawmakers would have a significant influence on whether people chose petrol or diesel engines, she added, because subsidies for diesel had greatly helped its popularity.
The Volkswagen scandal erupted three weeks after the launch of new European anti-pollution standards known as Euro 6, which introduced stricter limits on NOx, or nitrogen oxides: nitrogen monoxide and nitrogen dioxide.
Carmakers in Europe argue that diesel cars are essential to achieving a mandatory European Union target of reducing average carbon dioxide emissions from new passenger cars to 95 grams per kilometre by 2020.
Renault chief executive Carlos Ghosn, who is also the current head of the European Automobile Manufacturers Association, said in June: “Any sign of a political desire to remove diesel from the options available to achieve the average CO2 targets will be to the detriment of manufacturers’ ability to reach the targets.”
Putting old-style diesel engines in the same basket as the new Euro 6 compliant models would be “unfair” considering the efforts carmakers have expended to make their vehicles less polluting, he said.
Even before the Volkswagen scandal, however, diesel was beginning to wane in Europe, whose drivers are by far the world’s largest users of the fuel.
Diesel powered 53 percent of new cars sold in the European Union in 2014, down from 55.2 percent in 2011. In France, where diesel is particularly popular, its share has dropped from 77.3 percent to in 2008 to 58 percent this year, largely because the new regulations led manufacturers to abandon diesel for smaller models.
Manufacturers say the real problem is not new vehicles but the older automobiles already on the road in the European Union. Of the more than 250 million vehicles in the bloc, the average age is nearly 10 years, the carmakers’ association says, and 41 percent of them are running on diesel.
Volkswagen had on Tuesday revealed that 11 million of its diesel cars worldwide are equipped with devices that can cheat pollution tests, a dramatic escalation of the scandal that has wiped a third off the company’s market value and now threatens to topple its chief executive.
Authorities from France to South Korea to the United States announced investigations and threatened legal action, prompting Volkswagen to announce that it was setting aside €6.5 billion euros in provisions for the third quarter to cover the potential costs of the scandal.
VW shares, which dived 17 percent on Monday last week, plunged by another 23 percent to a low of €101.30 during trade on the Frankfurt stock exchange as the carmaker’s new revelations, including a warning that it would have to lower its profit outlook, sent investors fleeing.
When the manipulation of pollution tests was first publically revealed on Friday, US authorities said it concerned nearly half a million diesel vehicles in the United States manufactured by the Volkswagen group.
“Further internal investigations have shown that the software concerned is also installed in other diesel vehicles,” VW said in a statement.
“Anomalies have shown up in around 11 million cars worldwide that are equipped with a specific engine type,” added the car manufacturer, the world’s biggest by sales in the first half of 2015.

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