TO: Editorial, Energy and Environment Reporters

The Issue: Today President Bush signed a comprehensive energy bill that included two key provisions that address a perhaps surprising yet vitally important energy source for our nation: diesel technology. One provision will extend tax credits now available for hybrid cars to include clean diesel vehicles, which are 20% to 40% more fuel efficient than comparable gasoline engines. The second establishes a national program that will provide federal grants and loans to make existing diesel engines much cleaner, resulting in significant air quality improvements.

Why is diesel suddenly so important to U.S. energy policy?

Will a tax credit be just what consumers need to bring diesel cars back into the mainstream in this country?

Why are environmentalists, public officials and diesel manufacturers all supporting a national voluntary diesel retrofit program as a key solution to lingering air quality problems?

The following points and sources may be helpful to developing a story that answers these questions and explores diesel's role in the energy bill.

NEWER CLEAN DIESELS NOW ELIGIBLE
FOR SAME TAX INCENTIVES AS HYBRIDS

POLICY GOAL: REDUCE U.S. DEPENDENCE ON FOREIGN PETROLUEM

Action in Congress

• Congressional negotiators who developed the final energy bill recognized that both clean diesels and hybrids have a major role to play in improving U.S. energy policy. Beginning January 1, 2006, consumers who purchase some new diesel-powered cars, light trucks and SUVs will be eligible for up to $3,400 in tax credits based on the weight, fuel efficiency rating and emissions level of the vehicle, as determined by the U.S. Environmental Protection Agency. The credit is available through December 31, 2010. Click here to view the details on the advanced vehicle tax credit provision.
  
• President Bush supports these incentives for clean diesel. "We're encouraging automakers to produce a new generation of modern, clean diesel cars and trucks," President Bush said in an April 27 speech on U.S. energy policy. "Clean diesel technology will allow consumers to travel much farther on each gallon of fuel, without the smoke and pollution of past diesel engines. We've proposed $2.5 billion over 10 years in tax credits that will encourage consumers to buy energy-efficient hybrid cars and trucks, and we need to expand these incentives to include clean diesel vehicles, as well." Click here to view the full text of President Bush's speech.

Today's Diesel is Efficient and Clean

• With gasoline prices hitting record highs in 2005, Americans are taking notice that diesel-powered cars can achieve 20% to 40% better fuel economy than gasoline-powered equivalents, especially in sport utility vehicles and other light-duty trucks, which now make up more than half of all new sales. The 2005 U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy (DOE) Fuel Economy Guide shows that four of the vehicles in the top ten most fuel-efficient vehicles are diesel powered. And because diesels burn less fuel than gasoline-powered vehicles, they produce lower emissions of greenhouse gases such as carbon dioxide.
  
• According to the U.S. Department of Energy (DOE), if diesel vehicles reached a 30 percent market share by 2020, it would reduce U.S. consumption of oil by 350,000 barrels a day.
  
• Technology advances have also made today's diesel vehicles much cleaner. Chrysler reports that diesels have 80 percent lower particulate emissions, 70 percent lower nitrogen oxide (NOx) emissions, 15 percent improved fuel consumption, 50 percent more power and 30 percent more torque than diesel engines of 10 years ago. Today's engines are also much quieter than their predecessors.

Diesel's Market Growth and Future in the U.S.

• Annual registration of new diesel passenger vehicles in the U.S. has grown nearly 56 percent during the past five years, reaching nearly 470,000 diesel registrations in 2004 according to R.L. Polk & Co. Click here to view a fact sheet on this data.
  
• American consumers have more diesel choices than ever, with the recent introduction of new models (Jeep Liberty CRD, Mercedes E-320 CDI, and Volkswagen Touareg and Passat) in four separate market segments. This is in addition to the continuing popularity of diesel engine options in medium- and heavy-duty pickups. Click here for a complete list of currently available diesel models. Consumer tax incentives will likely spur the development of even greater diesel options, just as the hybrid credits have helped bring numerous new hybrid models to market.
  
• The following spokespeople are available to discuss diesel vehicles currently available in the US:
  
  • Max Gates, Product and Design PR, DaimlerChrysler, (248) 512-2688
    
  • Marijke Smith, Public Affairs Manager, Volkswagen of America, (202) 216-4921
    
  • Rob Moran, Manager, Product and Technology PR, Mercedes Benz, (201) 573-2245
    
• The industry is working to continually improve technology that - when combined with the nationwide rollout of ultra-low sulfur diesel fuel in 2006 - will allow diesel engines to meet increasingly stringent EPA regulations that begin taking effect in 2007. These new standards will make diesel and gasoline emissions equivalent with one another.
  

  • To discuss the progress on cleaner fuel, Contact : Scott Dean, Media Relations, U.S. Downstream, BP, (630) 821-3212.
    
  • For a discussion of advanced engine technologies, including revolutionary common rail injection technology or turbocharging, Contact : Bill Rutecki, Director, Diesel Products, Robert Bosch Corp., (248) 342-7296 or Chen Yao, Communications, Honeywell Turbo Technologies, (310) 791-9103

The Need for a National Diesel Emissions Reduction Program

• Because of their efficiency and durability, diesel engines are the workhorse of the U.S. economy and play an indispensable role in transportation, agriculture, construction, mining and other key sectors. Click here for more information on the $85 billion per year diesel industry.
  
• Advances in diesel engine technology, as well as fuel and exhaust treatment systems, will make diesel vehicles virtually emissions free within a decade. According to the EPA, by 2030, total emissions from diesel trucks, buses and off-road equipment will have been slashed by 80 percent compared to 2000 levels, thanks to new regulations that start taking effect in 2007.
  
• However, these new EPA regulations do not affect the approximately 11 million engines in use today. Fortunately, the same clean diesel technologies that will power the next generation of diesel vehicles and equipment can be applied to some older engines, reducing emissions by up to 90 percent.

• The Diesel Emissions Reductions Act (DERA) was included as part of the final energy bill. The legislation authorizes $1 billion in federal funds over five years to help finance voluntary retrofit incentive programs at both the national and state level. Now lawmakers must take the next step by appropriating the money necessary to fund this vital clean air initiative.
  
• The U.S. Environmental Protection Agency (EPA) will distribute 70 percent of the funds through a competitive system that favors the most cost-effective programs affecting the greatest number of Americans. The remaining 30 percent of the funds will go to the states to create their own retrofit programs similar to what's been done in California and Texas . Click here for additional details on the DERA provision.
  
• The Diesel Emissions Reduction Act (DERA) was originally introduced on June 16 by a bipartisan, geographically diverse group of Senators, led by George Voinovich (R-OH).
  
• Other DERA sponsors included: Senators Tom Carper (D-DE), Johnny Isakson (R-GA), Hillary Clinton (D-NY), Kay Bailey Hutchison (R-TX) and Diane Feinstein (D-CA). On June 21, the Senate voted 92-1 to include the legislation as an amendment to the energy bill - Title VII, Subtitle E, Sections 751-757. Click here to view the legislative details.
  
• A broad coalition of environmental and industry groups - including the Diesel Technology Forum, Environmental Defense, Caterpillar, Cummins, the Associated General Contractors of America, the Ohio Environmental Council, the Clean Air Task Force, and STAPPA/ALAPCO - also came together in support of the DERA legislation.

• DERA represents one of the most important actions the U.S. can take to improve air quality and public health. According to EPA, more than half of all Americans currently live in places that fail basic health standards for ozone (smog) and particulate matter (soot). The agency estimates that a program like DERA will reduce particulate matter by 70,000 tons and produce economic benefits totaling $20 billion.
  
• According to a recent study by Environmental Defense, a program like DERA will produce annual economic and health benefits in the range of $10.6 billion to $19.2 billion.
  
• Because of the ability for states to match federal funding, it may leverage significant additional funding from other sources of diesel retrofit.
  
• The bottom line is cleaner, healthier air.

DTF is a non-profit organization dedicated to promoting a greater understanding of diesel technology. Members of the Forum are leaders in developing clean diesel technology in three areas-engines and vehicles, cleaner diesel fuel, and emissions treatment and filter systems as well as other major diesel engine component manufacturers. For more information, visit www.dieselforum.org .