Diesel car registrations hit 5 year low in major European markets
With diesel car registrations at a five-year low in Germany, France, Spain and the UK, as a result of Volkswagen's "dieselgate" scandal and the wider furore over exhaust emissions, European cities are well on the way to saying no to diesel. Governments have strong incentives to move away from diesel after the European Commission warned several member states that they were not meeting air quality standards for nitrogen oxide, and could face fines - which could result in cities also facing fines. Consequently, cities are keen to severely reduce diesel usage, which causes 80% of Europe's nitrogen oxide emissions from vehicles.
Diesel car registrations are down in Europe: March 2017 saw a 5-year low in France, Germany, Spain, and the UK, which together make up almost 60% of the European new car market. Dieselgate sparked this development and revealed national regulators’ failure to police the car market, but cities are now leading the charge against diesel cars.

European governments have strong incentives to discourage diesel technology. In February 2017, the European Commission issued a final warning to five member states–the four listed above plus Italy–for failing to meet ambient air quality standards for nitrogen dioxide. National governments could face fines for these transgressions, which could in turn trickle down to cities. As a result, cities in these countries are now moving fast to phase out diesel vehicles, which account for 80% of all nitrogen oxide emissions from vehicles in Europe.

The chart below plots monthly diesel shares of new car registrations from January 2012 to March 2017 in France, Germany, Spain, and the UK. Because monthly data are quite noisy, we added 12-month rolling averages to even out monthly and seasonal trends. The chart also tracks relevant policy announcements from cities in these countries.

Figure 1. Diesel shares of new car registrations in France, Germany, Spain, and the UK. Round markers denote policy developments. (sources: French Ministry of Ecology, Sustainable Development and Energy, German Motor Transport Authority, Spanish Association of Manufacturers of Automobiles and Trucks, UK Society of Motor Manufacturers and Traders)

Combining the four markets, the 12-month rolling mean of diesel shares has receded by 4.4 percentage points (or 8.4%) since Dieselgate broke in September 2015. March was the low point in monthly diesel shares in all four countries, but differences between the four markets are still apparent. We explore some of these differences, and how cities combat air pollution, below.

France had the highest diesel share in 2012 but was also ahead of the curve in phasing out diesel: In 2014, Paris already toyed with the idea of banning diesel cars and the French carbon tax, introduced in the same year, started to increase the price of diesel fuel. These developments led to a gradual decline in diesel shares over the years, and monthly diesel shares plunged further after several cities announced bans in late 2016 and early 2017. Paris announced that the city will ban diesel vehicles by 2025. In the meantime, four French cities, including Paris, will rely on a color-coded system of anti-pollution badges to restrict vehicle access to city centers during pollution peaks. These Crit’Air badges range from 1 (cleanest) to 5 (dirtiest, though pre-1997 vehicles don’t qualify for a badge at all) and are awarded based on the powertrain and emission standard of a vehicle. Diesel vehicles must meet more stringent emission standards than gasoline vehicles to be awarded the same Crit’Air badge, making it harder for diesel vehicles to gain access to city centers.

In contrast to France, Germany’s diesel share has been stable since 2012, hovering around 48% of the new car market. Debates around banning diesel cars in German cities first surfaced when the federal government started discussing “blue badges” in April 2016, and since then diesel registrations have gradually declined. Blue badges would only be awarded to Euro 6 (post-2014) diesel cars and would enable cities to ban older diesel cars from entering their centers. Several cities, including Berlin, Cologne, and Munich, have begun to discuss restrictions on diesel vehicles. Stuttgart has decided to ban pre-Euro 6 diesel cars when particulate levels exceed European thresholds.

The Spanish diesel market rapidly contracted after Dieselgate broke, with the 12-month rolling mean declining from 64% in September 2015 to 55% in March 2017. During this time, Madrid announced that it would ban diesel vehicles by 2025 (though Mayor Manuela Carmena later denied committing to a diesel ban), and Barcelona decided to ban old (pre-2006 diesel and pre-2000 gasoline) cars from 2019 and to introduce temporary bans during pollution peaks from December 2017. Monthly diesel shares nosedived following these announcements.

Like Germany, the UK saw relatively stable diesel shares before Dieselgate. Even after the scandal broke, the 12-month rolling mean fell by only 2.2 percentage points, the smallest decline among the four markets. But monthly shares dropped steeply throughout 2017, falling to 43% in March. This drop followed news of municipal initiatives to combat local air pollution. For instance, Liverpool’s mayor proposed temporary bans of diesel cars starting in 2022. Instead of banning diesel vehicles, London opted to introduce a 10-pound “Toxicity Charge” for pre-Euro 4 cars in October 2017 and an Ultra Low Emission Zone in 2020, which will charge pre-Euro 6 cars 12.50 pounds per day in central London. London and Paris, in collaboration with the ICCT, announced plans to measure and make public real-world pollution levels from vehicles to improve the air quality in these cities.

Cities outside these four countries are also moving to ban or penalize diesel vehicles. Oslo temporarily barred diesel cars from entering the city for two days in early 2017 during a peak in air pollution. Stockholm is considering introducing low emission zones that would only allow electric cars or modern (gasoline Euro 5 and diesel Euro 6) cars to enter the city center. Like Paris, Athens plans to ban diesel vehicles by 2025. The list goes on.

None of this is to say that cities are the only driver of the de-dieselization of the European car market. National governments play a role. For instance, the French government wants to level the playing field for diesel and gasoline company cars, eliminating tax advantages that diesel cars enjoy. Some car manufacturers are also doing their best to make diesel technology taboo by creatively interpreting the definition of defeat devices rather than meeting emission limits on the road. But cities are setting the tone in the diesel debate: The prospect of owning a vehicle that potentially cannot be driven in important urban areas is creating doubt about the resale value of diesel cars and curbing consumers’ appetite for diesel technology.

Some cities are going further than just banning diesel cars. Barcelona, for instance, is exploring the superblock concept to clean up its air and to reclaim space from road transportation. With a plethora of options (and buzzwords) for cleaner, safer road transportation to choose from–electric vehicles, car/ride sharing, autonomous vehicles–it will be interesting to see how cities design future transportation systems. Whatever route they take, it seems increasingly likely that they will continue to drive diesel cars out of the European car market.