Diesel cars: should they really be demonised?
February 1, 2018
Since the emissions scandal broke in 2015 it feels like there has been a stream of items relating to diesel cars, in particular their emission of Nitrogen Oxides (NOx), increased vehicle taxation and dramatic recent decline in new car registrations.
One of the reasons diesel cars became so popular is due to taxation. In 2002 HM Revenue & Customs introduced a new company car benefit in kind regime based on carbon dioxide emissions of cars. This means that the lower the manufacturer-stated CO2 emissions, the lower the benefit in kind percentage charge. The stated level of CO2 is also now used to evaluate the amount of vehicle excise duty due.
In 2002 the amount of CO2 for then-Euro 3 standard cars was nearly four times higher for a petrol car (2.3 g/km) than a diesel (0.66 g/km). However, the amount of NOx for those Euro 3 cars was more than three times higher for a diesel (0.5 g/km) than for a petrol (0.15 g/km).
The registration of new diesel cars grew to 47.7 per cent of all new car registrations at the end of 2016, just behind 49% for petrol. However, only a year later new diesel car registrations were down to 42%, with petrol up to 53.3%.
Why such a dramatic change?
This may be down to consumer confidence, with news stories in 2017 saying that the government plans to ban the sale of new diesel cars in the UK from 2040, that diesel cars may be banned from major cities from 2020 and that Scotland plans to phase them out from 2032.
So what is the truth about today’s diesels?
The Euro 6 standard, for all new cars from 2014 means that a diesel still has lower CO2 emissions -half those of Petrol car – and that the NOx emissions are now just a third higher for a diesel at 0.08 g/km than a petrol car 0.06 g/km.
And what is the government view?
The government view was published on January 11 this year in a House of Commons briefing paper entitled: Transport 2018: FAQ for MPs.
In response to the question: Will diesel drivers face higher costs in the future? it says:
“There has been much in the press of late about diesel vehicles and there have been calls for the Government to do something – particularly about older vehicles, which is where the real issue is. Suggestions have varied from an increase in fuel duty on diesel, to changes to the car tax (VED) system, to the introduction of a scrappage scheme, whereby owners of older diesel vehicles would be offered a financial incentive to switch their old diesel for a new vehicle of some sort.
The Government made some changes to VED for diesels in the Autumn 2017 Budget, but these only affect new vehicles. The motor industry has introduced a number of scrappage scheme but there is not as yet any Government-supported scheme. The July 2017 Air Quality Plan indicated that the Government was generally cool on the idea of a scrappage scheme and would need to be convinced of its merits”.
At MHA Chiks, we recommend that people look carefully at all the evidence including that new diesels are much improved – older diesels are considered to be the problem – any dramatic changes are perhaps 20 years away and that alternate technologies are much improved but not fully ‘on line’ yet. Consider the facts, take advice and act based on full knowledge not the headlines.
If you would like to discuss the above blog in more detail, or you would like to speak with a member of our team, please contact Tony Medcalf or call 01772 821021 to be put in touch with a member of our Tax team.
This article originally appeared on the blog of our member firm,