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Clean Diesel Technology Faces Consumer and Regulatory Challenges/Volkswagen Faces Emissions Scandal, Business and Industry Trends Analysis

During the early 1980s, when U.S. drivers were still reeling from Arab oil embargos and fuel rationing, diesel-powered cars were particularly popular in the U.S.  Mercedes-Benz made a very high-quality line of diesels at that time, and about 75% of its cars sold in the U.S. were diesel-powered.  Diesel cars unfortunately proved to be noisy, polluting and, in some cases, expensive to maintain.  American consumers drifted away from diesel for many years, particularly during the 1990s when gasoline was readily available at reasonable prices. 

In Western Europe, diesels ranging from Volkswagens to BMWs account for a very large share of all new cars sold.  Mercedes makes a diesel available in many of its larger, luxury cars.  However, diesel cars and trucks tend to be small and very inexpensive to operate, with claims of very high mileage per gallon.  This is important in Europe, where parking places are hard to find and fuel is quite expensive.  Today, in both the U.S. and Europe, new technologies such as Mercedes’ BlueTec are in place that are designed to reduce highly undesirable nitrogen-oxide (NOX) emissions.  There is a trade-off, however.  Technologies that reduce NOX can make diesels a) somewhat sluggish under acceleration, b) noisier and/or c) less fuel efficient.  These problems can be particularly bothersome to drivers of smaller, lighter vehicles containing engines that are relatively small.

In late 2015, Volkswagen AG (which manufactures Volkswagen, Audi, Porsche and Skoda models, among others) was charged by U.S. emissions standard regulators at the Environmental Protection Agency (EPA) with installing fraudulent software in diesel vehicles sold in the U.S. since 2008.  The software allegedly detects emission testing equipment.  When testing is underway, it activates full emissions control systems that hamper gas mileage and acceleration.  Otherwise, the cars and trucks run without full emissions controls, producing vastly higher amounts of nitrous oxide.

Meanwhile, ultra-low-sulfur diesel fuel was introduced at retail pumps in America in October 2006.  New EPA emissions rules took effect across America in 2009 requiring that diesel engines meet exacting standards for low air pollution.  The newer clean diesel fuel eliminates 97% of sulfur emissions.  While it was previously impossible for automakers to sell diesel-powered cars in several U.S. states, due to tough state-level emissions regulations, new technologies combined with the new clean diesel fuels now make diesels legal in all 50 states.



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