The average diesel car in Europe typically emits about 17% less CO₂ than a similar conventional gasoline car within the same vehicle segment. However, across all vehicle segments, average CO₂ emissions of new diesel and gasoline cars are close (119 grams per kilometer [g/km] vs. 123 g/km, respectively).

Efficiency gains from the diesel engine often are counterbalanced by a higher engine power and higher weight for diesel cars.

—Dr. Peter Mock, Managing Director of ICCT in Europe

Furthermore, hybrid electric cars today often are cheaper than diesel cars within the same vehicle segment. In Germany, the average hybrid car within the lower medium segment (also known as “Golf”-segment) in 2015 sold for €26,700 (US$30,476), whereas the average diesel car cost €1,700 (US$1,940) more. This additional cost is the result of higher temperatures and pressures for the diesel combustion process and more complex aftertreatment systems, which increase the production costs of diesel engines.

Given that the average hybrid car emits about 18% less CO₂ and is cheaper than the average diesel car within a specific vehicle segment, switching to hybrid cars is a more cost-efficient way of reducing CO₂ than sticking with the diesel engine technology. In future years, the cost of hybrid cars—in particular, plug-in hybrid and battery-electric vehicles—is expected to decrease further, as a result of continued advances in battery technology, the ICCT said.

For the analysis, the ICCT researchers assumed a CO₂ target of 70 g/km for new passenger cars by 2025. This is within the target range of 68–78 g/km, as suggested earlier by the European Parliament.

The ICCT team reduced diesel market share to 50% for the baseline, and then subsequently reduced the share in increments of 5 percentage points to a minimum market share of 15%. The team assumed that manufacturers would preferentially reduce diesel market share in the lightest segments first, starting with B class vehicles and progressing through C, D, and E class vehicles, so that the only diesel vehicles remaining in the 15% market share scenario were SUVs.

The researchers found that manufacturers could still comply with the target by offering more advanced gasoline, hybrid, and electric vehicles.

The overall compliance cost for an average vehicle manufacturer was found to be up to €280 per vehicle lower if the diesel market share declined. This is because the required investment in vehicle efficiency technologies and electrified vehicles is counterbalanced by savings when moving away from expensive diesel engine technology, according to the ICCT.

As a co-benefit, NO_xemissions from diesel cars are estimated to be 60,000–260,000 tons lower by 2030 if the new car diesel market share in the EU drops to 15% by 2025. This would equal a reduction of 10%–28% compared to a baseline scenario and is equivalent to the sum of all NO_x emissions in a country the size of the Netherlands.

The ICCT analysis come at a time when post-2020 CO₂ standards for new vehicles in the EU are under preparation; the European Commission is expected to put forward a regulatory proposal by the end of 2017. The transport sector currently is the only sector in the EU that has failed to reduce CO₂ emissions since 1990; rather, it has increased its greenhouse gas emission level by 20% between 1990 and 2014.