A continent squeezed
Europe’s growing diesel crisis is becoming a major drain on the bloc’s economy
Lead author
Lead analyst
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€40 billion Additional costs to the EU economy from road diesel since US and Israeli’s strikes on Iran
€30 Extra cost for EU diesel car drivers to fill a 50L tank, (September 14)
Europe is the most reliant major economy on diesel. With diesel prices at record highs, this is a major problem.
The conflict in the Middle East and Russian refineries outage have led to tightness in the supply of refined oil products. The gap between already high crude prices and refined products, especially for diesel, has widened.
Road transport makes up 77% of total diesel and gas oil consumption in the EU. A spike in prices hits not just drivers wallets, but it also pushes up the price of goods and increases the cost of operating machinery.
The EU is uniquely exposed as it is the region most reliant on diesel. Decades of dieselisation in road transport mean that a global middle-distillate shock translates unusually quickly into high European transport costs.
By September 14, we find that drivers are paying a premium of €30 every time they fill up their diesel cars (based on a 50l tank), while a German truck has been forking out an extra €236 a week on average since the beginning of the war. With about 6.2 million trucks on Europe’s roads, this quickly adds up. In total, increased fuel costs for road transport alone cost Europe a whopping €270 million a day, of which €203 million a day is from diesel consumption.
With 30% of Europe’s diesel fleet more than 15 years old, government-funded scrappage schemes could take a large chunk of the current diesel car fleet off the road. If the current diesel premium continues until Christmas, the EU will have spent the same as offering a €2000 scrappage fee for all diesel cars over 15 years old.
The EU needs to take bold action to transition away from oil and ensure that businesses and citizens across Europe benefit from stable and affordable energy prices. Reducing the amount of oil we consume and import is a win-win. It improves economic security, saves costs for drivers, reduces geopolitical uncertainties and decreases our climate impact.
In the short-term:
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Aside from scrappage schemes, measures, including reducing motorway speeds by 10km/h, eco driving guidance and car sharing could cut diesel demand by 15%
In the longer term, the EU should:
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Reject any weakening of the 2030 car CO2 target ambition to secure rapid mass adoption of electric cars and investment certainty
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Support the end of the sale of new petrol and diesel cars and vans by 2035. to ensure that the regulation remains aligned with the EU’s climate and industrial objectives.
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In the Clean Corporate Vehicles Regulation, set more ambitious electrification targets for large corporate fleets and remove plug-in-hybrids from the scope.
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Windfall profits of oil companies should be reused to protect citizens from future oil shocks.
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CO2-based tolling for trucks can make driving e-trucks cheaper, driving diesel trucks more expensive, or both.
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Provide support for setting up truck depot charging.
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