What is the issue?

• Across the world, the popularity of diesel as a powertrain for passenger vehicles is on the decline.
• The government and auto makers in India should work together to ensure a smooth transition to other options.

What are the recent developments?

• Europe, diesel vehicles' biggest market (53% of all cars sold is powered by diesel), is fast giving up on diesel.
• France, where diesel cars account for 70% of its overall fleet, saw more petrol cars being sold in 2017.
• In Germany, the share of diesel cars fell from 48% in 2012 to 33% in 2018.

How is diesel use in India?

• India’s love for diesel powertrains peaked in 2012-13.
• That was a time when diesel cars accounted for 47% of all passenger vehicles sold in the country.
• The trend was driven more by cheaper diesel prices than other reasons, as it was lower than petrol by as much as Rs. 25 per litre.
• However, government de-controlled diesel prices in 2014.
• As the price differential between diesel and petrol narrowed, the preferences changed.
• Today, only 23% of the cars sold have diesel powertrains.

How have the emission norms evolved?

• Globally, the initial stages of emission norms focussed on carbon-di-oxide emission. E.g. Euro-I to Euro-IV emission norms
• So diesel engines performed well on this account as they emitted lower CO2.
• Diesel cars were increasingly promoted in most European countries with incentives.
• As emission norms evolved, it became clear that particulate matter (PM) and Oxides of Nitrogen (NOx) were equally dangerous.
• Notably, diesel engines emit higher levels of PM and Nox than petrol engines.
• So Euro-V norms were introduced in 2010 focussing on reducing PM, and Euro-VI norms came into force in 2015 targeting NOx.

What is the challenge now?

• Indian government too has decided to shift from BS-IV to BS-VI emission norms from April 2020. 
• This will directly impact diesel engines the hardest.
• The manufacturers have to tackle both PM and NOx in one go, with a complex exhaust system.
• This will lead to cost escalation of up to Rs. 1.50 lakh depending on the size of the engine.
• Resultantly, only costly SUVs will be able to absorb this cost and less-expensive, small, compact and entry level diesel versions will be out of the market.
• Manufacturers who have set up large diesel engine capacity will have to compensate for fall in domestic demand by pushing exports.

Is shifting to petrol feasible?

• Shifting to petrol powertrains will have another challenge for the manufacturers, which is the CAFE norms.
• The CAFE (Corporate Average Fuel Efficiency) norms came into force from April 2017.
• It requires cars to be 10% or more fuel efficient between 2017 and 2021, and 30% or more fuel efficient from 2022, in terms of CO2 emission.
• The move is targeted at reducing the carbon footprint of the automobile industry.
• Diesel cars had been helping manufacturers meet these norms.
• But the shift to petrol would increase the CO2 emission and the manufacturers would have to produce more fuel efficient petrol cars or electric/hybrid vehicles.

What lies before India?

• India will have to promote electrification and hybridisation more seriously.
• Its vision of 100% electrification of passenger vehicle sales by 2030 may be aspirational but achieving even a third of that target necessitates a massive change.
• As, in India where bulk of the cars sold is small cars, the cost of electrification may just not work out.
• Though battery costs have come down substantially over the years, it is still not low enough by Indian standards.
• Government should move forward with the Faster Adoption and Manufacturing of Electric Vehicles (FAME)-2 norms.
• This should incentivise the manufacturer rather than the buyer.
• For goods movement, the only option is to reduce the share of road transportation and to focus on coastal shipping and inland waterways.