On 18 September the US Environmental Protection Agency (EPA) issued a notice of violation to Volkswagen (VW) that 2009–15 model year VW and Audi diesel cars fitted with the EA189 powertrain featured software that circumvents EPA emissions standards. The California Air Resources Board (CARB) also issued a separate in-use compliance letter. The situation centres around an algorithm that allowed the company's EA189 diesel powertrain to recognise when it was undergoing testing in order to lower nitrogen oxide (NOx) emissions to the level required to pass the test. The company subsequently stated that 11 million VW Group vehicles were fitted worldwide with the EA189 family of diesel engines that featured the algorithm.
The different demands of the EU and US test cycle
The EA189 diesel is a Euro-V 2.0L, 1.6L, 1.5L, and 1.2L engine launched in 2007. The 2.0L engine was the most common variant and Europe was the primary market destination. As such, vehicles fitted with EA189 were originally calibrated to comply with European Union 5 (EU5) emission norms under the New European Drive Cycle (NEDC) testing regime. The US test cycle is more stringent than the NEDC because it places a higher load on the vehicle and it is a transient test (continually changing speed and acceleration profiles) – not a steady-state test like NEDC. This makes it harder to control diesel emissions such as NOx and particulate emissions. In order to certify an EA189-powered model in the United States at the time of launch, the vehicle would need to comply with the Tier II Bin 5 limit. These limit values are more stringent than Euro V. To comply with Euro V, EA189-equipped vehicles needed to emit no more than 0.180 grams per kilometer (g/km) of NOx, while for the United States, the target was, and still is, 0.044 g/km – more stringent even than the new Euro VI limit of 0.080 g/km. The differences between the NEDC and FTP cycles are illustrated in the following graphic.
In addition to the differences between test cycles, there has been a growing gap between homologated fuel economy and that experienced under real-world driving conditions. This is generally explained by the difference between real-world driving duty cycles and the test cycle criteria. The fuel-economy gap has been widening, in Europe specifically, largely owing to vehicle manufacturers focusing on optimising the vehicle to the test cycle.
Outlook and implications
Currently, there are many different testing cycles around the world for gasoline and diesel vehicles. With perhaps the exception of Japan, very few are as stringent as FTP75 (the US cycle) on NOx emissions. Europe's cycle focuses more on reducing CO2 output with a correspondingly higher legal NOx limit than the United States. This, in effect, favours the uptake of diesel technology. Emissions testing regulations are currently undergoing a global overhaul as many nations, including the European Union, are moving to reduce these cycle "gaps" by harmonising their disparate vehicle-testing cycles under the Worldwide Harmonized Light Vehicles Test Procedures (WLTP). WLTP is designed to replicate real-world driving conditions more closely than current testing regimes. This initiative includes the European Union, Japan, and India but does not include the United States, which prefers to continue with its own regime.
Negotiations with carmakers are ongoing about when to change testing procedures, but the most recent prognosis would give carmakers a three-year period of double testing (NEDC and WLTP), whereby vehicle labelling would be based on WLTP and vehicle certification and compliance to targets based on NEDC. This would then result in the 95 g/km target being converted to a WLTP equivalent from 2020 onwards. This practice, referred to as the "Correlation Exercise", is being executed by a United Nations Economic Commission for Europe (UNECE) technical working group and should soon be complete.
In the run-up to a potential full implementation (100% of the fleet) of WLTP in 2021, European authorities have already moved to close the gap between NOx observations during homologation and values seen on road by introducing Real Driving Emissions (RDE). RDE will be implemented for monitoring and familiarisation in January 2016 and will be mandatory from September 2017. This will mean that vehicles will still be tested and homologated in the laboratory, but will also be taken onto a real road and driven using random acceleration and deceleration patterns. The vehicle will likely have not to exceed (NTE) thresholds and must then maintain its NOx emission performance within those thresholds in order to be approved for sale.
As a result of the EPA's actions against VW, it is possible that the European Commission will feel compelled to swiftly conclude the correlation exercise between NEDC and the WLTP, and regulators may try to enforce an earlier adoption of WLTP. The challenge for manufacturers from any advance in the WLTP is that the majority of product planning and technology investment has already been made and calibrated to an NEDC environment, and changes could mean an extra cost.
So what is the future for diesel in Europe? For some time, IHS has been forecasting a long-term decline in diesel penetration rates in the European region and, in the context of the relative difficultly that diesel vehicles face with WLTP and RDE testing, was already reducing its outlook for diesel passenger cars. To this trend we now add the recent narrative regarding NOx emissions.
Diesel-emissions regulations and compliance tests will be under an even stronger spotlight from now on with manufacturers possibly wanting to demonstrate over-compliance on future engine homologations. The implied increase in relative technology load costs for diesel is likely to have a significant long-term impact on diesel sales across the region.
IHS Automotive was already forecasting diesel's share of EU 28 passenger car sales falling from 52% in 2014 to 40% by 2027. Based on likely added regulatory impetus and consumer caution regarding diesel as a fuel type in Europe, it is possible that diesel will lose share at a faster rate in Europe than previous forecasts. Just how low diesel penetration will go is being worked through at the time of writing. In terms of the future of the fuel type in the United States, it is too early to pass judgment. Up until now, passenger car diesel penetration is extremely low in the United States with the 2014 diesel share of the US passenger car market only 1.3%. Combined light duty diesel market share, including commercial vehicles (SUVs, LCVs and pick-ups) was 6.8%. Certainly in the passenger car diesel segment, where VW is the dominant US player, it would appear highly unlikely that this penetration rate will rise in the near future.
