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German Automakers Formed a Secret Cartel In the '90s To Collude On Diesel Emissions, Says Report (theverge.com)
An anonymous reader quotes a report from The Verge: Last week, Der Spiegel published an explosive report alleging that the major German automakers formed a secret cartel in the 1990s to collude on diesel emissions. These companies, including Volkswagen, Audi, BMW, Porsche, and Daimler, met in secret working groups to discuss "the technology, costs, suppliers, and even the exhaust gas purification of its diesel vehicles," the German weekly reported. The meetings were disclosed to German competition officials in letters from VW and Daimler and viewed by Der Spiegel. The secret meetings "laid the basis" for the 2015 diesel emission cheating scandal, in which VW was caught installing secret software in more than half a million vehicles sold in the US that it used to fool exhaust emissions tests. The admission of cheating ultimately cost the automaker tens of billions of dollars in fines and legal fees, making it one of the most expensive corporate scandals in history.
Years earlier, VW participated in dozens of secret meetings with its competitors, involving over 200 employees in up to 60 working groups, on how to meet increasingly tough emissions criteria in diesel vehicles. The automakers may have colluded to fix prices of a diesel emission treatment called AdBlue through these working groups, Der Spiegel says. Specifically, VW (which owns Porsche and Audi), Daimler (which owns Mercedes-Benz and Smart), and BMW allegedly agreed to use AdBlue tanks that were too small. AdBlue is a liquid solution used to counteract a vehicle's emissions.
Years earlier, VW participated in dozens of secret meetings with its competitors, involving over 200 employees in up to 60 working groups, on how to meet increasingly tough emissions criteria in diesel vehicles. The automakers may have colluded to fix prices of a diesel emission treatment called AdBlue through these working groups, Der Spiegel says. Specifically, VW (which owns Porsche and Audi), Daimler (which owns Mercedes-Benz and Smart), and BMW allegedly agreed to use AdBlue tanks that were too small. AdBlue is a liquid solution used to counteract a vehicle's emissions.
If it is any other country/company we could blame it on "low level team cheating" or "midlevel managers were scared to tell the higher level managers the truth" or "simple incompetence and cowboy attitude towards laws".
But in Germany, in VW, these stories do not add up. Given the documentation they do and the way they follow the orders, the cheating was done with full knowledge and compliance of everyone all the way to the top. VW buys our software. I see their acceptance testing reports and how much they test, document and demand explanations. Not only they document, they refer to the docs and use them all the time.
No way the VW diesel cheating was the work of some rogue team in some isolated division. It went all the way up the company, now it appears, it went all the way up the entire damned industry.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
AdBlue is a liquid solution used to counteract a vehicle's emissions.
AdBlue is a solution of urea and water generically referred to as diesel exhaust fluid. It lowers NOx emissions in diesel vehicles.
I remember posting about it back when VW diesel cheating was making rounds.
The article is mixing up two different things, and pretending that they are connected. Der Spiegel says that the automakers met in secret to discuss “the technology, costs, suppliers, and even the exhaust gas purification of its diesel vehicles." Then, separately, VW implemented a cheating system to dodge the emissions testing, with other automakers doing similar things, although to lesser degrees.
But the article implies that these two things are connected. Documentation, however, pretty well shows that the original plan of VW was to buy a license for the Mercedes "blueTec" technology, but they abandoned this plan when the Chief Operating Officer changed, who favored using their own developed technology (TDI). TDI didn't work as well as expected, necessitating the cheat.
Der Spiegel attempts to imply that the collusions were to agree on how to cheat, but from the evidence, it looks like the "collusion" was exactly the opposite of what Der Spiegel implies: the "collusion" was to collaborate on technology to avoid producing emissions, but when that collaboration fell apart, they shifted to cheating.
New York Times article here: https://www.nytimes.com/2015/1...
Wall Street Journal article here: https://www.wsj.com/articles/v...
I'm not passing judgment on their actions one way or another, but the dynamics of this are interesting. In a nutshell:
Or they could just take a bath on profits and stop selling diesel vehicles. Which VW did for three years while they sorted this out (2006 - 2009). Every diesel auto manufacturer tried both systems. Everyone wanted the regen system to work. But it was pretty terrible -- people didn't understand it and there were a lot of complaints about the smell. There were even class action lawsuits against Dodge for the regen system they installed on their pickups so German vehicles were not the only ones.
AdBlue seemed like the more obvious way to go, but the large tank required that the vehicle's fuel tank would have to be smaller, and they would have to give up things like independent rear suspension (there was just no room for it). To overcome these issues they would have had to create larger vehicles which would have lowered fuel economy (and increased emissions ironically) and ultimately alienated their target market.
The point is that every option was a compromise and they had a lot to lose. So they cheated. And got caught. There is just no way to make diesel work as cleanly as it needs to and frankly, there is just no need for it anymore. Gasoline engines have come a long way in the interim and electric vehicle costs will be at parity in just a few years (according to Bloomberg).
Goodbye diesel. I will miss you, but your time has come.
I am not interested in articles about life extension advancements.
There is a third option, which what was actually done. The conditions under which the tests are done (with a sensor) are known. They programmed the ECU so it would detect those conditions and modify the engine performance to pass the test.
Is this just the natural result of unrealistic or even impossible regulations devised by leftist bureaucrats being forced on companies?
Basically: no.
The regulations were neither unrealistic nor impossible. Gasoline powered cars, for example, met the regulations easily.
The companies involved, however, thought that they could meet the emissions standards using diesel engines. Old-fashioned diesel engines are classically dirty and polluting (although also simple and efficient)-- but new "clean diesel" technology was being developed.
VW, however, chose not to license the Mercedes technology and instead develop their own clean diesel approach... which turned out not to work as well as they had anticipated in stopping nitric oxide emissions. So they cheated.
It's easy for regulators to create policies demanding that unrealistic, if not outright impossible, goals be met.
It wasn't a case of regulations that couldn't be met-- it was a case of VW's "not invented here" syndrome.
You do have to pay attention to the fact that the "collusion" in the Spiegel article was not companies colluding on cheating: it was companies colluding on using each others technologies (which VW eventually decided not to do).
There is even more to diesel than just the German car companies. The kind of crude that Europe gets is very high-quality and can be fed right into a fractional distillation facility. That's very economical, but also limits your choices in what comes out - you get whatever proportion of products happened to be in the crude. Usually this means quite a bit of diesel. As a result, diesel tends to be priced pretty well since there is plenty of supply. In North America, the crude is terrible - it needs to be "cracked" with catalysts into smaller chains to produce the desired product mix. This is expensive and complex, but the upshot is that once you've built these multi-billion-dollar facilities, you can tweak the mix quite a bit. If the market price for diesel is high, you can make more diesel. If it's gasoline you want, just change the recipe a bit. In North America, diesel tends to cost more, reflecting its higher energy (and carbon!) content per unit volume and therefore larger proportion of crude required to make it.
If Europe gives up on diesel, they will need to spend billions to build new or to retrofit refineries, or else take a hit and export the diesel. I'm sure the oil companies and governments would rather not. "Clean diesel" was very alluring to everyone - economical cars for consumers, high profits for car makers, lower capital costs for oil companies, and no fights over refinery construction for governments. Environmentalists were excited over the false claims as well.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
You bring up an excellent point which I did not address at all. Thank you.
Diesel lubricity regulations (HFRR spec) is much higher in Europe (and Canada) than it is in the USA. Combine that with the "occasional" mistake (oops, I put a bit of regular gas in my diesel), and the Common Rail engine design which requires a high-pressure fuel pump (HPFP) generating something above 10,000 psi to the injectors and which is lubricated and cooled by the diesel fuel itself, and you have a recipe for disaster.
The NHTSA investigated VW for this exact problem. When the HPFPs started going on their CR engines the cost to the consumer was $10,000 to fix it (because once the HPFP eats its own guts it contaminates the entire fuel system). Everything had to be replaced. VW just always claimed that the problem was that the consumer put gasoline in their car and would refuse to fix it. And the car may have in fact had gasoline in it, but it may have been contaminated at the fueling station, not the fault of anything that the consumer did.
What a mess. Hundreds of pages of analysis here.
I am not interested in articles about life extension advancements.
I don't know where you got that from, but VW did not stop selling diesel vehicles for three years. That would be economic suicide for a major car producer.
I also don't share your conclusion. Diesel is only 'dirtier' if you only care about NOx. All of the really nasty stuff (ultra-fine particulate, volatile organic compounds, carbon monoxide) is produced in larger quantities by petrol engines and the gap is getting wider. Scrutiny may be increasing and NOx emissions may be much more in focus than they were in the past, but diesel will continue to be the most economic means of propulsion for larger cars, vabs and trucks for quite some time and I don't see the market share of diesel cars going below 40% anytime soon. Manufacturers still have to meet their CO2 goals and consumers who drive a lot will still want to use less and cheaper fuel. Diesel isn't dead until internal combustion is.
The kind of crude that Europe gets is very high-quality and can be fed right into a fractional distillation facility.
There is no "kind of crude that Europe gets". The economics of oil are highly dependent for each refinery. There are refineries that setup to take only local crudes, and there are refineries setup to take the nastiest crap on the market, and they'll get it from anywhere because it's cheap. The type of refineries are very heavily dependent on the consumer market. The largest refinery in Europe has a fantastic upgrading capacity and ability to run the nastiest shit you can think of, the second largest next door is 2 distillation towers and an ancient cat cracker struggling to keep on spec for bunker oil. It's a complete mixed bag.
As a result, diesel tends to be priced pretty well since there is plenty of supply.
The retail price difference between petrol and diesel has far more to do with taxes than supply and demand. The absolute cost of fuels even more so. Mind you saying diesel is priced pretty well should be qualified for an American news site. Priced well in this case means it only costs triple what the USA pay. The price split is very similar. Average diesel price in Chicago is 1c above gasoline right now, average diesel price in Antwerp is only 2c below gasoline.
If the market price for diesel is high, you can make more diesel. If it's gasoline you want, just change the recipe a bit.
That's really not the case at all. Well it is a bit, but the amount of handles you have are very limited. What you do have a handle on is the removal of impurities, but the general mix is hard to alter as the refineries' units are designed to produce an optimum output. I.e. if you decide you don't want to produce as much gasoline as diesel tomorrow and buy the appropriate crude to do so, what you're actually saying is I don't want to run the expensive equipment I bought to it's full utilisation and therefore don't want to make as much money. That's one of the great things about a completely fungible feedstock and product, it will always sell and the sensible option is almost universally to optimise refineries for max throughput regardless of what the market is doing. I briefly worked at a refinery in Australia that wasn't able to sell diesel locally since it lacked the ability to meet the sulphur targets with its feedstock. It was cheaper to run that refinery and export 100% of it's diesel to Asia than it was to buy a feedstock that allowed it to meet the sulphur spec, and at the time Australia was hungry for diesel. (Quite disappointing to see a ship full of diesel leave for Asia passing a ship full of diesel coming from Asia both operated by the same company, but the cost / benefit made that the most profitable option).
If Europe gives up on diesel, they will need to spend billions to build new or to retrofit refineries
To be clear Europe IS giving up on diesel, at least for the consumer market. In my city alone there has been a 90% drop in the number of registered diesel vehicles in the past 10 years. Major cities are implementing bans or have implemented them already. However this doesn't interest refiners much anyway for several reasons: They need to spend billions to retrofit in order to meet new jet standards, increasing emissions standards, flaring standards, they have continuously spent on meeting the ever changing diesel standards, and the next big one coming up: fuel oil standards. Some of the coking refineries need to upgrade as power-plants shut down, others as the iron and aluminium industry shut down.
Basically what I'm saying is investment is continuous and ongoing (even now with the oil price where it is), so changing consumer demand won't impact the industry on the whole much.