20 April 2019
Diesel costs less than petrol, but diesel cars are generally more expensive than gasoline-powered vehicles. Photo: HKEJ
Diesel costs less than petrol, but diesel cars are generally more expensive than gasoline-powered vehicles. Photo: HKEJ

Why the govt can hardly justify banning diesel private cars

The Transport Department has recently announced that starting October, it will tighten emission standards on diesel cars, under which all newly registered private cars powered by diesel will have to meet both the Euro VI and the California LEV III emission standards simultaneously in order to get approval for use on our roads.

The new measure amounts to banning all new private diesel vehicles since there is currently not a single make of diesel private car available on the market that can meet both the Euro VI and US LEV III standards at the same time.

The new decision has immediately sparked a backlash from local diesel family car owners or people intending to buy diesel private cars. They criticized the government for “robbing us in broad daylight”.

And given that the government levies a HK$6 tax on every liter of motor gasoline sold while none on diesel, some even suspected that this could indeed be part of the administration’s sneaky “conspiracy” – if diesel family cars gained in popularity in the market, the government would lose a chunk of motor fuel tax revenues.

I understand that diesel cars are in general more polluting than petrol cars since they emit more nitrogen dioxide produced from vehicular nitrogen oxide emissions and respirable suspended particles, which are the two major roadside air pollutants in Hong Kong.

However, the problem is, it would be a big “if” as to whether the new measure would automatically lead to cleaner air unless the government can guarantee that the vast majority of existing diesel car owners would switch to electric cars or simply give up buying cars altogether rather than buying petrol or hybrid vehicles instead.

If the government can’t guarantee that, I simply see no justification for imposing such unreasonably rigorous emission standards on diesel cars.

Besides, if the new measure is really intended to reduce air pollutants on our roads like the Transport Department has claimed, then why don’t the new emission standards apply to large commercial diesel vehicles such as trucks, minibuses and buses as well?

As a matter of fact, the amount of harmful air pollutants emitted by diesel private cars is just peanuts compared to that of large commercial vehicles. And the fact that the government is singling out diesel family cars for stricter emission rules while turning a blind eye to the much more polluting commercial diesel vehicles shows that the government might have a secret agenda with this new measure.

Some may argue that it is necessary to subject the more polluting diesel cars to stricter regulations or else they may replace petrol cars and become the mainstream choice for motorists given their so-called “fuel price advantage”, i.e. diesel is substantially cheaper than gasoline in Hong Kong.

They might appear to have a point there at first glance, but the truth is, their worries have never materialized, and probably never will, since it is highly unlikely that diesel private cars will become mainstream in the foreseeable future.

The reason I say this is that contrary to popular belief, fuel prices are not necessarily a major concern for potential car buyers when it comes to choosing between petrol or diesel cars.

In fact, diesel cars have never been popular among local families even though they may cost less in fuel. It is because on one hand, they are often more expensive than petrol models. Let’s take one particular family car make produced by a Japanese automaker as an example, the diesel version costs HK$50,000 more than the petrol version.

On the other hand, diesel private cars are actually targeted at a niche market: under most circumstances, only motorists who are either driving long distance on a regular basis or living on the hills would prefer diesel cars to petrol cars, since the former have a definite advantage over the latter when it comes to off-road and uphill driving.

In other words, if you are neither driving long distance regularly nor living on the hills, it is not worth paying extra money to get a diesel private car. And statistics have already proven that nobody would bother.

Hong Kong is an economy that embraces the principles of the free market, under which consumers are always allowed to have as many choices as possible.

The government must never limit consumer choices unless it can prove that there is an overriding public interest in doing so.

Unfortunately, I just don’t see any such overriding interest in this case. I hope the authorities concerned or other learned people can explain in detail the rationale behind the new measure on diesel private cars.

This article appeared in the Hong Kong Economic Journal on Sep 27

Translation by Alan Lee

[Chinese version 中文版]

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