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  • William Maley
    William Maley

    Volkswagen CEO Says Maybe It Is Time To Cut Diesel Subsidies

      Surprising to say the least

    Diesel is quite popular in Europe partly due to subsidies provided by governments - in this case, a lower tax rate on diesel fuel than gasoline. The thinking at the time was diesel engines burn their fuel more efficiently than gas engines, thus they contribute less to global warming. But as the Volkswagen diesel emission scandal would reveal, diesel vehicles aren't that much cleaner, producing more nitrogen oxide emissions than their gas counterparts. Now, one CEO from a German automaker is saying that maybe it is time to end the subsidies.

    “We should question the logic and purpose of diesel subsidies. The money can be invested more sensibly to promote more environmentally friendly technologies,” said Volkswagen CEO Matthias Müller to German paper Handelsblatt.

    This is quite the surprise as Volkswagen along with other German automakers said diesel still had a future due to new pollution reduction technologies. Also, Volkswagen did very well with the sales of diesel models. But with the dark cloud of the diesel emission scandal, Müller likely sees the writing on the wall and wants to get out ahead.

    Müller went on to say that he was in favor of banning older diesel vehicles from city centers. But he said that newer diesel vehicles should be exempt from the bans as they meet "stricter standards on nitrogen oxide emissions".

    Source: Handelsblatt via New York Times

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    I have a better idea: tax diesel fuel the same as gasoline.  Poof: no more subsidies.  It is rare that governments SHOULD have energy subsidies of one form or another.  Those subsidies distort markets and consumer choice.  It is best to get rid themselves of them.

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    5 hours ago, balthazar said:

    ^ Right now the federal gas tax is 18.4 cents & the tax on diesel is 24.4 cents.

    OK, So then just call it a Quarter for either form of Fuel and call it a Day of good balance and revenue to help fund the gov. :P 

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    On 12/12/2017 at 7:22 AM, balthazar said:

    ^ Right now the federal gas tax is 18.4 cents & the tax on diesel is 24.4 cents.

    The VW CEO was referring to diesel subsidies in Europe not the USA.

    I do thank you for pointing out that the federal government does NOT favor diesel over gasoline.

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    It's a rock / hard place problem. Not only do auto makers need to watch their NOX emissions from diesels, they also need to manage their carbon emissions per mile which diesels are much better at than gasoline. So diesel can be helpful to the carbon reduction goal, but they have to clean up their NOX.  

    Coming from any other manufacturer, this observation on diesel subsidies may hold water, but from VW it sound like sour grapes due to the situation they put themselves in.

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