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A potentially disastrous diesel plan

New fuel will solve next to nothing

by Paul Cochrane

 

In March this year the government drafted a law for the importation and use of cars that run on ultralow-sulfur diesel, also known as “green” diesel, in compliance with the European Union’s Euro 5 emissions standards. Though the law is still awaiting ratification, dealerships are up in arms about the plan, describing it as “stupid,” “nonsensical,” “not feasible” and “only in the personal interest of politicians.”

The rationale behind the law is that, in the words of the Ministry of Justice, it “will contribute to preserving the environment as green diesel is free of sulfur and the percentage of tar is 50 percent less than [in] the diesel that is currently       being used.”

While importing cleaner diesel would be far better than the currently used Euro 3 diesel, with 350 parts per million (PPM) of sulfur, or the red diesel with 5,000 PPM, Euro 5 diesel is not sulfur free – it has 10 PPM. What is more, the draft law comes at a time when Europe is mulling banning diesel vehicles outright in cities due to its health risks. In June the World Health Organization decreed that inhaling diesel fumes can cause lung cancer, adding diesel fumes to its list of Group 1 Carcinogens alongside arsenic, strontium-90 and neutron radiation. 

While dealers are concerned about the environmental consequences if diesel cars are allowed, they are wary of a repeat of 2001, when law 341 amended a 1995 law that restricted the use of diesel to trucks and busses by banning vehicles with engines smaller than 3,500cc from running on diesel. As a result dealers and drivers had to convert engines, at an estimated cost of $6,000 for a mini van. 

If the law is passed, dealers are worried that it may be overturned just years later, which would have a negative effect on inventory and after-sales, as well as cause expenses due to the importation of specialized equipment needed to service diesel cars. Furthermore, certain manufacturers are planning to stop producing diesel vehicles altogether, including Ford, BMW and Nissan, to focus on hybrid and electric cars instead.

“I don’t understand the objective of the government — to reduce fuel costs or save the environment? Diesel may be cheaper but if it is taxed like petrol it is the same price, especially ‘green’ diesel, and the cars are more expensive,” said Cesar Aoun, general manager of Gargour & Fils, distributor of Mercedes. “And will we reach the Euro 5 level? Come on. We need to stop the import of cars older than five years.”

Old cars emit more pollution than newer models and their prevalence on Lebanon’s roads is an environmental problem. Some 52.5 percent of registered cars currently on the roads are older than 15 years, and 29 percent between nine and 15 years old, according to the Automobile Importers Association (AIA). A further argument against importing green diesel cars is the price of high-level filters that limit nitrogen oxide (NOX) particles from entering the air, at between $1,300 to $2,600. As the Ministry of Environment has noted, cars that run on Euro 5 diesel “are equipped with a special filter that is installed in the car exhaust, and this filter should be maintained, cleaned and emptied regularly.” The big question here is whether there would be actual checking of filters by the authorities, as well as proper storage of Euro 5 diesel at gas stations.

After all, enforcement is not a strong attribute of the state when it comes to vehicles, as some statistics show. According to the AIA, out of the 1.3 million cars registered in the country, approximately half a million did not go for the annual “mechanique” road test last year, and some 30,000 cars are illegally running on natural gas. There are some 33,000 registered red license plate taxis whereas 55,000 are actually plying the roads; 4,000 red plate mini-buses registered but more than 6,000 in operation; and 2,000 red plate buses while 6,500 are on the roads. At the gas station level, out of 3,250 in the country only 1,450 are actually licensed by the government, according to the Ministry of Energy and Water.

Marwan Naffi, general manager of Gabriel Abou Adal and Partners, distributor of Volvo, believes a solution would be taxing vehicles that have higher carbon dioxide emissions and giving tax breaks for vehicles with lower emissions instead of introducing “green” diesel. 

“Today you can’t sell a car because of its lower emissions whereas elsewhere you get tax incentives,” said Naffi. “If you look at our Volvo T4 with 180 horsepower (HP) and the T5 with 250 HP, they would be the same price in Lebanon whereas the T5 in Europe is more expensive. We will not import the T4 for the Lebanese market as there is no incentive to do so.”

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Paul Cochrane

Paul Cochrane is the Middle East Correspondent for International News Services. He has lived in Beirut since 2002, and has written for some 70 publications worldwide, covering business, media, politics and culture in the Middle East, East Africa and the Indian subcontinent.
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