Recent Diesel Price Hike makes scr a better bet
1st December 2005
DERV prices have been volatile over the last six months but most operators are seeing prices settle-down at at least 10 ppl above levels seen earlier in the year and high prices make the drive for fuel efficiency assume greater importance.
The new SCR engine technology to be used on the next generation of EURO4 commercial vehicles mandatory from 1st October 2006 should see fuel savings approaching 5% but how will this affect the operating costs of these new vehicles when the additional cost of AdBlue has been taken into account?
With the recent 10p rise in the price of DERV from 70ppl to 80ppl, operating savings should increase by about ?200 per year from ?651 to ?859 [32%] even after the AdBlue solution has been paid for.
| Cost of Diesel [?/litre | ?0.70 | ?0.80 | |
| Annual Vehicle Mileage | 75000 | 75000 | |
| Mile Per Gallon | 7.8 | 7.8 | |
| Euro4 or Euro5 Diesel Efficiency Saving % | 5% | 5% | |
| AdBlue Consumption %age of Diesel | 4% | 4% | |
| Cost of AdBlue [?/litre] assumes bulk delivery | ?0.46 | ?0.46 | |
| Vehicle Diesel Consumption Litres [per year] | 43653 | 43653 | |
| Vehicle Diesel Spend [per year] | 30557 | 34923 | |
| Vehicle AdBlue Consumption Litres [per year] | 1746 | 1746 | |
| So, how much will you save per vehicle? | |||
| Add AdBlue Spend | ?803 | ?803 | |
| Less Diesel Saving | ?1455 | ?1663 | |
| Net Saving Per Vehicle Per Year | ?651 | ?859 | |
| Net Saving in Operating Costs | 2.10% | 2.50% | 32% |
Fiscal Incentives Required for Early Adoption
The additional savings mean that over the 5-year life of a typical truck on a 60-month contract, the savings will total ?4295 about the same as the extra capital cost of the SCR equipment. This simple equation shows that to encourage early take-up of fuel-efficient and low-polluting EURO4 or EURO5 trucks in advance of the deadline needs some form of fiscal incentive, perhaps a reduction in Vehicle Excise Duty, a tactic used in 2000 following the fuel strike
editors notes
Download the BlueCat Savings Ready Reckoner here [Excel Spreadsheet]
[We assume that bulk AdBlue prices will be about 46 ppl in the spring but this prediction could be affected to some extent by volatile energy markets, delivery location and quantity.]
More Information from John Fuller 07860 101335 or Tom Holt 07799 646902
