Skip Navigation LinksHome|News & Analysis|Videos| Diesel controls come at critical technological juncture in transport

Platts Snapshot

Diesel controls come at critical technological juncture in transport

With Ross McCracken

April 04, 2017 13:12:55 EST (3:01)

With major cities planning to ban diesel engines by 2025, Ross McCracken looks at how alternative modes of transport are already becoming economically viable in both the developed and developing world.

Platts Email

Request a complimentary issue of: Energy EconomistEnergy Economist
Energy Economist

Every month Energy Economist combines incisive judgments and detailed data sets that deliver ideas you can profit by. It includes coverage of:

  • Political and economic risk
  • Supply and demand
  • Policy and regulation
  • Liberalization and market design
  • Supply security
Request Free IssueRequest More Information

Video Transcript

At the end of last year, the leaders of Paris, Mexico City, Madrid and Athens all said they would ban diesel engines in their cities by 2025.

These bans would impact almost 80 million people – around the population of Germany – and leaders in other major cities, such as London, have warned that more bans are possible.

Since transport is a point-to-point activity, and the life-time of a vehicle is about 9 to 10 years, mounting concern over diesel engines, and the threat of bans, will start to affect consumer choices now.

The driver, if you’ll excuse the pun, of this change is neither technology nor the greenhouse effect, it’s local air pollution. The World Health Organization, back in 2012, reclassified diesel emissions from being a probable carcinogen, which is bad enough, to belonging to the group of substances that have definite links to cancer.

Air quality standards create legal route to drive out diesel engines

As most countries have air quality standards, this opened a legal route to change, which is exactly what happened in New Delhi. There, a court order to reduce local air pollution has resulted in a switch to Compressed Natural Gas for public transport in the capital and 22 districts in three adjoining states.

Wider concerns about climate change mean that alternative modes of transport are already becoming economically viable, in both developed and developing countries.

The point is that rising concern over diesel emissions comes at a critical moment of technological change and opportunity.

Countries like Norway, Sweden, Belgium and the Netherlands are looking to ban both diesel and gasoline engines by 2025-2030 – with electric vehicles favored to replace them.

But in countries like India and Pakistan, where economic and population growth rates are higher than in the OECD, and where electricity systems are already stretched, the answer seems to be compressed natural gas.

Diesel engine bans to upset the balance of global oil product demand

Banning diesel and gasoline engines is clearly bad news for the oil sector, but a shift away from diesel alone is enough to upset the balance of demand for oil products. This will present significant challenges for the refining sector, far ahead of peak oil demand.

Meanwhile, in the UK, the London Taxi Company opened in March a new factory and R&D facility dedicated to the production of electric taxis. It is the first new car plant to be built in the UK in a decade.

With a government incentive of £7,500 to buy, low emission mandates coming into force from next year, and large fuel savings to be made for these heavy-use vehicles, London’s iconic black cabs are predicted to all be green within six years.

Video Requirements

Download Flash plug-in

Copyright © 2017 S&P Global Platts, a division of S&P Global. All rights reserved.