In a shift over new energy policy, China favors hybrids over diesel vehicles

 In the recently released Industry Structure Adjustment Guidelines 2007, a government policy agenda prepared by NDRC, clauses concerning the development of diesel engine sedans are deleted.

 “With all things considered, we’ve decided to remove diesel engine powered sedans from the catalogue,” Yang Yongxin, an official from the Industry Policy Department of NDRC told China Business News.

 Instead, the Guidelines said government will encourage the development of electricity combustion engine technology and related key parts.

 Under the policy guidelines concerning new energy vehicles released by NDRC on December 14, China will continue to encourage the development of Compressed Natural Gas, Hydrogen fuels, blend fuels, hybrid powered vehicles and batter-powered electricity vehicles.

 More interestingly, the guidelines raised bio-fuel technology and DME engine technology for the first time as government-backed automobile technology.

 Industry insiders say that the shift in government policy means China is clearly in favor of hybrid vehicle technology developed by Honda and Toyota over the diesel engine technology advocated by Volkswagen and PSA.

”Diesel engine sedan is still in the testing stage, not in maturity yet,” said Li Shulin, an automobile expert with NDRC. “We’re not certain about the direction of diesel engine sedan. And we’re also concerned with the supply of diesel fuels.”

 In fact, there have been pros and cons over the development of diesel engine sedan among Chinese experts. Many experts have expressed their support for this technology.

“If 30 percent of China’s all vehicles in use were powered by diesel engines, the country could save up to 28.30 million tons of oil a year,” said Feng Fei, director of the Economic Development Department of National Development Research Center, a government think-tank affiliated to China’s central government.

 Detractors of diesel engine sedan said diesel engine vehicles can barely meet EU-IV tailpipe emission standards; it will be out of question that diesel engine technology can meet more stringent EU-V standards which will be released in the future.