On June 14, Reuters reported Munich, Home to BMW, Considers Diesel Ban to Tackle Pollution.
Today, with strong overtones of regulators hopping in bed with industries they are supposed to regulate, EU’s Car Regulator Warns Against Diesel Ban in Cities.
Munich, home to carmaker BMW, has become the latest German city to consider banning some diesel vehicles amid “shocking” nitrogen oxide emissions in the Bavarian capital.
“As much as I would welcome avoiding such bans, I think it is just as unlikely that we can continue to do without bans in the future,” Munich mayor Dieter Reiter was quoted as saying by the Sueddeutsche Zeitung newspaper on Wednesday.
Asked about the latest nitrogen oxide readings, which the paper said violated European air quality standards well beyond busy trunk roads, the mayor said: “The results are shocking, nobody expected this.”
The scandal over rigged diesel emission tests at Volkswagen has already thrown the future of diesel engines into doubt, and has highlighted carmakers’ struggle to comply with ever stricter rules on the nitrogen oxides emissions.
Regulators in Bed With Industry?
Flash forward to today.
Banning diesel cars in European cities could hamper automakers’ ability to invest in zero-emission vehicles, the European Union’s commissioner for industry has warned the bloc’s transport ministers.
In a letter seen by Reuters, Commissioner Elzbieta Bienkowska said there would be no benefit in a collapse of the market for diesel cars and that the short-term focus should be on forcing carmakers to bring dangerous nitrogen oxide emissions into line with EU regulations.
In the letter, Bienkowska told ministers she was concerned that the latest emissions violations at Audi and Porsche were discovered by prosecutors and not Germany’s vehicle and transport authorities.
Bienkowska’s letter also called for all cars with excessively high levels of nitrogen oxide emissions to be taken of European roads, but said carmakers should act on a voluntary basis.
Experts who have seen the letter to ministers say the commissioner appeared to be bowing to carmakers’ demands.
“Her letter contained some important statements that we believe show the industry’s lobbyists have scored a big win,” Bernstein analyst Max Warburton said in a report.
Diesel Job Math
The Center for Economic Studies (CESifo) produced a report on the German diesel industry for its stated client, the German Association of the Automotive Industry.
Let’s dive into the report on the Consequences of a Potential Ban on New Cars and Light Trucks with Combustion Engines.
Based on the structure of production in 2015, at least 457,000 employees are involved in producing types of products which would be directly affected by the ban (e.g., diesel engines). This is equivalent to 7.5% of overall manufacturing employment in Germany. The largest share of these employees (426,000) works in the automotive industry itself. If one includes product groups that would be indirectly affected (e.g., transmission systems, which are more complex in vehicles with combustion engines), the number of potentially affected jobs rises by 163,000 or an additional 3% of overall manufacturing employment. These jobs are mainly clustered in the metal industry: 102,000 employees in metal processing produce parts destined for vehicles with combustion engines. Taking the direct and indirect channel together, a total of at least 620,000 employees would be affected by the ban, which represents over 10% of total German manufacturing employment.
Among the 457,000 directly affected jobs, 31,000 jobs in small and medium-sized enterprises would be highly at risk. These firms can be expected to face larger difficulties than large companies in developing new alternative fields of business against the background of a major shift in propulsion technology. This share is substantially larger among indirectly affected jobs: Here 101,000 out of 163,000 jobs are situated in small and medium-sized enterprises and highly concentrated among automotive suppliers in the metal industry.
If value-added is considered instead of employment, these effects become even more pronounced. This is due to the exceptionally high average labour productivity in the automotive industry. If direct and indirect effects are combined, around 13% of German overall manufacturing value added would be affected by the ban. Based on the 2015 figures, this would represent a volume of 48 billion euros. In interpreting these figures, one has to bear in mind that not the entire workforce and value-added “at risk” would necessarily vanish. Some parts, for example, are also used in heavier trucks and buses, which would probably not be subject to the ban. In addition, new jobs in the areas of alternative propulsion technologies in Germany would help to limit employment reduction, at least in the aggregate.
Germany’s Over-Dependence On Diesel Technology
Eurointelligence discussed diesel in a recent article.
As we have noted time and again it is very hard for people to separate their expectations of the future from their fundamental beliefs. One of the unshakable beliefs in Germany is the virtue of the diesel car. It gives the German motor industry a competitive advantage that cannot be reversed.
Except, of course, through new technologies and shifting social trends.
We noted this tendency to wishful thinking again when we read a story in FAZ this week on the future of the diesel car in Germany, and the importance of the technology for the German economy. One of the statistics quoted is that one tenth of the jobs in German industry directly depends on the production of car engines. And so, the car-obsessed media reporters and German economists have a tendency to downplay technological, social, and political trends by insisting that diesel still has a future.
The Ifo institute has done the math on the impact of a diesel bans on the industry. It shows that 620,000 jobs in Germany directly and indirectly depend on the production of fuel engines for cars – about 1.5 percentage point of the labour force. This is about 10% of all jobs in German industry. These numbers would include suppliers, but presumably, do not take account of any multiplier effects one would observe if those jobs were to disappear.
The Ifo Institute made another important observation, according to FAZ. If fuel-driven engines were made illegal from 2030, Germany could reduce its carbon dioxide emission by one-third. But the study does not advocate such a strategy. Indeed the headline says that banning combustion engines is the wrong path to take. The Ifo institute favors free-market solutions to the problem. Ifo chief Clemens Fuest, who presented the study, argued that it would be a mistake to over regulate the industry because this would waste resources, which in turn would be bad for the goal of climate protection.
We also note confirmation bias among diesel advocates in that they only ever focus on carbon dioxide emissions, rather than the high levels of nitrogen oxides and other substances that are believed to be responsible for tens of thousands of death each year in Europe. This is the main reason why cities are now considering diesel bans.
The study also tried to correct the impression that German car makers are inactive when it comes to alternative technologies. According to the Ifo study, Germany registers around one-third of all global patents in the area of alternative engines – hybrid and electrical. We do not doubt that the German car giants are actively researching alternatives. But the point is that the competitive advantage of German motor manufacturing is predominantly based on its fuel-based engine technologies – an advantage that is bound to decline over time. They are not ahead of the game in the fields of hybrid and electric engines. There is an illusion in Germany that appears to equate the number of registered patents with future commercial success.
In the meantime, expect to see an increase in costs to maintain the diesel technology, and a fall in revenues. Diesel registrations in Germany are falling at a dramatic pace. And car companies are now paying for expensive recall operations, like Mercedes did this week, to upgrade existing cars with the latest software to optimize engines to reduce fuel emissions.
Protecting the Cheaters
My take is the focus on carbon dioxide is wrong. A focus on carcinogens and other pollutants would make more sense.
We can debate at length what pollution standards should be. What’s not debatable is German auto corporation lied and cheated their way to good results and now they are caught with their pants down, at least twice.
Either way, diesel is on the way out. And with that pending change, Germany’s vaunted lead in auto technology has turned into ashes.
Meanwhile, EU regulators are prepared to look the other way in an attempt to give German manufacturers time to catch up.
One can argue that letting the cheaters off the hook makes economic sense, but let’s be honest about what’s happening.
Mike “Mish” Shedlock
The pollution and smog in most EU cities caused by heating systems that have zero abatement . They burn wood, coal, turf or peat and low grade oil. The anti auto agenda continually blames autos
“…They burn wood, coal, turf or peat and low grade oil. …”
That ended in the early 1970s. Most Europeans heat with electricity or natural gas.
The Irish might still burn dirt ( peat ), but that’s minuscule
A bit dated:
http://www.zerohedge.com/news/2017-07-23/protecting-cheaters-eu-regulators-bed-german-auto-industry-regarding-diesel#comment-9937720
Which references:
https://www.wsws.org/en/articles/2015/09/29/volk-s29.html
German government and EU Commission complicit in Volkswagen scandal
By Peter Schwarz
29 September 2015
https://www.wsws.org/en/articles/2016/11/11/vwex-n11.html
VW denies emissions fraud in Europe
By Dietmar Henning
11 November 2016
https://www.wsws.org/en/articles/2016/02/16/volk-f16.html
In wake of VW scandal European Parliament relaxes emissions regulations
By Jan Peters and Dietmar Henning
16 February 2016
This is a very complicated subject. First of all, it was recently found that regarding some pollutants, diesel engines are cleaner than gas engines:
http://www.naturalnews.com/2017-07-21-diesel-engines-now-cleaner-for-the-environment-than-gas-engines.html
As for the specific pollutant Nitrogen Oxide, there are many sources including lightening, fertilizers used by farmers, and legume plants such as alfalfa or beans. Details here:
https://en.wikipedia.org/wiki/NOx
In any case, modern diesel engines are WAY cleaner than the old ones, and will likely continue to improve. Don’t sell diesel short just yet, in terms of engine performance it is still more efficient than gasoline, the engines last much longer, and with less maintenance.
Isn’t that what they’re supposed to do for German companies? And isn’t this “cheating” just a totally rational disregard (to a minute extent) of the Global Warming fraud?
“And isn’t this “cheating” just a totally rational disregard (to a minute extent) of the Global Warming fraud?”
More like a complete kowtow to the global warming “fraud.” Diesel engines look “green” from a “greenhouse” POV, as they emits less CO2. Of course, in non-crazy land, CO2 is harmless. It’s just soda bubbles. While much of the stuff diesel engines does emit more of than gas ones, is toxic. Like NOx and particulates. Chances are, after some years, someone will figure out that the direct injection gas engines that are currently all the rage, aren’t as particulate emissions free as the theoretical models, and current measurements, insist they are, as well……
From a pragmatic POV, a diesel plug in hybrid would be a nice combination, if one insists CO2 emissions really are such a bad thing. Particularly in European countries, where freeways are generally routed past the outskirts of cities, rather than all throughout them, like they are in LA and other US cities. Ban diesel and run on battery within densely populated areas, and get the benefit of very good diesel highway mpg on the autobahn.
Get up to speed people….The answer to everything that ailes us from an automotive and environmental perspective, is battery operated autonomous driving
transportation…The techno-environmentalist fascists have told us so….Fall in line and get with the program damn it….
Fundamentally, the EU is Germany as they pay the fiddler.
Germany is Auto.
Anything that damages Auto, damages Germany, damages the EU.
Forget lobbying by industry, this is lobbying by Germany & EU once they realised the consequences.
The State and major Industrial complex are symbiotic. This is one tick box used to identify a fascist state.
Consider who is behind this; “emissions violations at Audi and Porsche were discovered by prosecutors and not Germany’s vehicle and transport authorities.”
NOT the German Authorities – strange? I think not. The reason is obvious. Tick that box.
Be sure, if a corporate America was to suffer because of this there is no way the EU would bend or change to reduce the commercial impact.
This is a very naive blog post.
The EU is fiscally bankrupt and cannot afford the self righteous nonsense. Of course the EU will protect its only significant source of revenue (German industry). If they don’t, the EU is no different from other totalitarian states with failed economies.
Without a tax base, the EU doesn’t matter. They already surrendered their energy independence to Gazprom, they can’t afford to lose even more.
German industry (and the taxes it pays) allows the EU fantasy to exist. Simple as that.
We saw the same naive nonsense from Bloomberg’s “news” service when they tried to write some self-righteous ultra-liberal nonsense about the Chinese government. The facts are this: sales of the Bloomberg terminal pay for the “news” division that has never made money or broke even. The “news” crap is a loss leader to help sell terminals, and if the news division writes something that jeopardizes the money train, the news division gets put in its place.
Bezos recently told the infants at WaPo to stop writing bad things about advertisers and sponsors. Bezos hates Trump and supports endless propoganda against the sitting president, but Bezos isn’t dumb enough to shoot the people who keep the former newspaper alive.
And while we are on the subject, the meanest and most mange dog in the world knows not to bite the hand that feeds it.
The EU will continue to screw over the citizens of Europe, but it won’t bite the hand that feeds it. Time for all the libtards of the world to grow up.
But you must and have to love the EU/Brussels inspired, electric saving, single slice toaster…
I have that toaster with the optional wind turbine! Every hurricane that passes thru gets me weeks of environmentally friendly toast!
I’m shocked! shcked to hear there is regulatory capture in the EU.
BTW, joule-for-joule, diesel is more environment-friendly than electric vehicles.
Low emmission diesel is possible
http://www.prnewswire.com/news-releases/new-technology-clean-diesel-trucks-with-near-zero-emissions-now-make-up-41-of-class-3-8-us-diesel-vehicles-in-operation-300299041.html
though I’m haven’t info on auto engines/cost.
Looking at catalytic converters and filters, they start around 100 and go up to around 2k or more , depending on what level anyone is after. The higher end supposedly effective at all, so why the talk of banning diesel.
http://www.dieselforum.org/policy/why-retrofit
http://www.dieselforum.org/about-clean-diesel/what-is-scr
Diesel autos are popular because they burn tax free heating oil. That much won’t change. Natural gas vehicles are a similar USA option for those who purchase a compressor and tap the home heating lines.
Gal, you don’t seem to know much about diesel fuel these days. Diesel fuel has much less sulfur content than heating oil now, plus the government mandates that “untaxed” heating oil has red dye, while taxed fuel oil is dyed green. That is so that the government can check on what you have in your vehicle’s fuel tank. Hardly anyone uses heating oil in their diesel vehicle anymore, although the basic product is the same.
Tell your friends how to filter out the die with activated charcoal. Recycle the charcoal on low oven heat.
I wonder if hydrogen fueled engines are not being repressed because the government cannot tax the fuel. Hydrogen is probably the cleanest of all fuels. It can be made by anyone for free by using solar panel electricity to separate the hydrogen from water, put in a tank at home and then put in your vehicle.
Generating hydrogen from electrolysis is typically a very ineffective use of electricity and electricity produced from photo-voltaic cells is already dear. Once one has the hydrogen it is difficult to store and transport and there are technical problems with getting the energy density up.
The laws of physics get in the way of a lot of wishful thinking. If using hydrogen as transportation fuel were easy and practical, it would be used. If you don’t believe me, then believe in Occam’s Razor.
See how Bloomenery extract H from natural gas
https://youtu.be/zWiMB4wp3jU
Due to your challenge Anonymous, I looked into it more, and it turns out hydrogen fuel is more in use than I realized. It turns out that several Japanese car makers offer zero-emissions hydrogen fueled cars:
https://en.wikipedia.org/wiki/Toyota_Mirai
The mpg equivalent is very high and the range is quite high. Fueling stations are being built:
https://www.afdc.energy.gov/fuels/hydrogen_locations.html
https://ssl.toyota.com/mirai/stations.html
As for photo-voltaic electricity, I have solar panels and my electric bill is zero. The government support programs for solar panels are limited to what a homeowner uses, otherwise I would have installed more. With costs coming down, I may eventually install more anyway. Southern CA Edison pays me for any excess generation.
Breathe Clean Air A lot of people associate poor air quality with smog or industrial pollution. You may be surprised to learn that, according to the EPA, indoor air quality is usually 2-5x worse than that outside. That may be a best-case scenario; in the worst cases, indoor air can be up to 100x more toxic.[2]
Oddly, efficient construction may be largely to blame. It’s energy efficient for a building to be sealed up tight, but it also allows for the accumulation and concentration of air pollutants. These pollutants include the VOCs and chemical fumes that off-gas from furniture, paint, flooring materials, and other indoor building materials.
Don’t think an air freshener is going to “clean” the air. Most air fresheners just release an equally toxic chemical fragrance to mask odors.
https://www.lewrockwell.com/2017/03/edward-group/feeling-poorly/
Since electricity is generated mostly by burning coal, has anyone calculated how much pollution is created by electric cars, even though none of that pollution comes out of their tailpipes?
Thomas Sowell
People today who complain about the automobile’s pollution have no idea how much more pollution there was before the automobile came along. In New York City, for example, the 40,000 horses that were the backbone of the city’s transportation, before the automobile, produced 400 tons of manure per working day, along with 20,000 gallons of urine.
https://www.creators.com/read/thomas-sowell/01/11/new-heroes-vs-old-
Electric cars may be fun at amusement parks, where they don’t have to go very far or very fast. But if the consuming public wanted electric cars for regular use, Detroit would be manufacturing them by the millions. Only people infatuated with their own wonderful specialness would think that their job is to coerce both the manufacturers and the consuming public into something that neither of them wants. https://townhall.com/columnists/thomassowell/2001/01/30/no-sense-of-proportion-n1014354
Demanding “clean” air and water is like demanding “safe” sources of power. There are no such things. There is air and water containing greater and lesser amounts of other elements and compounds, some of which represent varying amounts of danger that can be removed at varying costs.
Some of these elements and compounds are dangerous pollutants, which can be removed to a great extent at relatively modest costs. But to remove that last infinitesimal fraction of pollutants means skyrocketing costs to avoid ever more remote, or even questionable, dangers.
http://seattlecentral.edu/faculty/jhubert/sowelltradeoffs.html
Since they can’t sell people on electric cars, the next best thing is to outlaw internal combustion-engined cars. In order to force people into electric cars.
https://www.lewrockwell.com/2016/10/eric-peters/extinction-level-event/
But how about cars powered by compressed natural gas (CNG)?
They did exist. And – much more interesting – they worked.
https://www.lewrockwell.com/2017/06/eric-peters/whatever-happened-cng-powered-cars/
Oliver Schmidt is facing 169 years in prison
Not one of them identifying a single specific victim.
https://www.lewrockwell.com/2017/03/eric-peters/silence-lambs/
“…Since electricity is generated mostly by burning coal, has anyone calculated how much pollution is created by electric cars, even though none of that pollution comes out of their tailpipes?…”
Yes. Scientific American published a study that found that gasoline/electric hybrids are actually cleaner than pure battery electrics if the electricity comes from coal.
https://www.scientificamerican.com/article/electric-cars-are-not-necessarily-clean/
Note the unsubstantiated allegation by the government filth. “Dangerous Nitrogen Oxide”.
I wonder if they ever considered running diesel powered vehicles on natural gas.
Guess there would be no “cheaters” to “protect” were it not for draconian bureaucratic regulations, eh?
2 comments from me in Oz: I have a diesel car (2010 Mercedes C class), has great performance and fuel economy, but it puts out a lot of soot (mostly carbon?) particles, some of which are deposited on the rear of the (white) car. NOx emissions aside, I didn’t expect a Mercedes to produce and sell a car with such a defect, but having seen the whole ‘Dieselgate’ story develop, I won’t be buying another diesel car in future, Mercedes or not. Secondly, the argument that the German car industry will lose vast numbers of jobs if diesel engines are banned doesn’t add up – all that logically will happen is that they will switch their focus to building cars with petrol and hybrid / EV engines. And if the EU bans diesel cars buyers will have no choice but to buy non-diesel cars. I am amazed that the CESifo ‘economics’ study did not make this simple point, but then I guess researchers are paid to find what the customer wants…
Tottenham boy, you have an old generation diesel. Every time it rains those particles are washed from the air, but anyway, the new diesels are much cleaner. Do your homework.
That may be so, but the car was sold to new as a ‘low pollution’ diesel powered car, and it turns out that it is not, and the manufacturer (among others) used a software ‘trick’ to fake its environmental tests. Mercedes may have addressed this in their newer models, but it doesn’t change the facts at the time I bought it. And the excuse that the carbon particles are ‘washed from the air’ when it rains doesn’t wash with me either.
A shock too for diesel owners who honestly were sold the story of being clean diesel, finding that the EU has robbed them, as the U.S. owners get compensation EU owners get stuffed
Power and money are at the heart of societies which breeds corruption. We are at an interesting time in history where technology allows us to see it firsthand.
Is there a reason the author does not disclose whether he or his firm are long or short on relevant companies he writes about?
I am neither long nor short anything stocks related to Germany
In general, unless I state otherwise, that is the case.
Happy?
Reblogged this on World4Justice : NOW! Lobby Forum..
Will the NSA ever get the credit due for breaking the VW Diesel scandal?
US automakers have always scammed EPA tests. That’s why this happens.
https://www.edmunds.com/fuel-economy/heres-why-real-world-mpg-doesnt-match-epa-ratings.html
I you must and have to love the EU Brussels inspired, electric saving, single slice toaste