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June 22, 2005

Buy A Diesel?

A concerned reader is in the market for a used car, and wants to know what we'd recommend: a fuel-efficient hybrid vehicle (like a Prius), or one that can run on veggie-oil-based biodiesel (like a Volkswagen Jetta)?

A while back I posted on a similar question -- whether to buy a new Prius or an old Accord.  There, the price differences were so wide that the Accord seemed the better buy -- provided that the buyer commits to using some of the savings to offset their environmental impacts in other ways.

Here, however, the price differences aren't so wide.  And -- at risk of aggravating people attached to one solution or the other -- I'm not yet convinced that there's all that big a difference.

Of course, there are lots of uncertainties in play here.  First, a lot depends on what used cars are available when you're ready to buy.  Both hybrids and biodiesel-ready cars are still fairly scarce, so you may have no choice but to buy a car with more options -- a good stereo, plush seats, etc. -- than you really need.  Paying more could put a crimp in your wallet -- which, in turn, could leave you with less money for other earth-friendly purchases.

Second, with the purchase price of a used Jetta and Prius so close, a lot depends on what you think fuel is going to cost a few years down the road. It's hard enough to predict prices for next month; over ten years, prices are essentially unknowable. That's especially true for an evolving market like biodiesel; but it's also true for oil prices, which tend to be volatile. 

Third, "external costs" -- the things that society, rather than the driver, pays for -- are harder to get a handle on, since there are two different kinds of fuels with different kinds of externalities. Should you count the security & military costs associated with petroleum? The environmental costs of oilseed farming? The risk of oil spills? Pesticide safety? Compounding the problem, the numbers themselves are pretty sketchy -- so no matter what you decide to include in your analysis, the figures are going to be approximations.

And fourth, a lot depends on you -- in particular, are you willing to drive a car that uses a little more gas than you'd like, if it saves you some money? And if so, are you willing to invest those savings in something that might do even more environmental good in some other sector of the economy?

So starting with the basics:  before you buy a car -- any car -- you should take a look at your needs. How many passengers will you need to carry? How much cargo (if any)?  How many miles per year are you expecting to drive? Don't overbuy -- if you need a truck just a few times per year, it's usually cheaper and more earth-friendly to buy a smaller car, and rent or borrow a truck only when you need it.

Our reader has done all that: she needs a car to hold 2 adults, plus one or two car seats for kids, that will be driven less than 10,000 miles per year. She's interested in a used hybrid (such as the Prius) or a biodiesel-ready car (such as the Volkswagen Jetta).  Just to round out her choices, I'll look at a used Toyota Camry and a Toyota Corolla as well.

I took a look at the Kelly Blue Book value for comparably equipped used cars from the 2002 model year.  And I made some assumptions:  first, that the car would be driven for 12 consecutive years, for 10,000 miles per year, after which it would have to be junked; second, that future gas purchases would be discounted at a 3 percent annual rate; third, that biodiesel will cost 40 cents more per gallon than gasoline; fourth, that each vehicle's actual gas mileage would be about 5 percent lower than the federal ratings; fifth, that CO2 credits (the cost to reduce a ton of CO2 emissions on the EU carbon market) would cost $30 per ton -- which is a little more than today's rate in US dollars; sixth, that the US spends about 30 cents per gallon to defend its petroleum supply (as described here, way down on the page); and seventh, that biodiesel reduces CO2 emissions by 78 percent, compared with gasoline.  Then, I calculated the total cost of buying and fueling the car for 12 years; plus the cost of buying enough CO2 credits, purchased up front, to offset the car's CO2 emissions; plus per-gallon defense costs.

The winner in the Prius vs. biodiesel-Jetta grudge match was...wait for it...the Toyota Corolla, by a hair.  The Prius came in a close second, followed by the Jetta, with the Camry trailing the pack. 

If gasoline averages about $2.50 over the next 12 years (a huge if), choosing the Corolla could give you a little cash--perhaps a couple thousand dollars--which you can use to buy a super-efficient fridge or, if you're in a generous mood, some more carbon credits.  That will make the cost savings on the Corolla add up to even greater environmental benefits over time. The higher gas prices go, of course, the less the Corolla saves; but as long as gas prices average less than an inflation-adjusted $4.00 per gallon over the next 12 years, the Corolla (plus carbon credits) is consistently the cheaper choice.

But not by much.  The real lesson here, perhaps, is that there's no overwhelming winner.  What you consider the best choice is very dependent on what assumptions you make, what external costs you include, what probability you assign to future events, how much you actually drive, and the like.  In the range of assumptions that I made, the choices just aren't that different; your mileage may vary. 

The real difference, however, is between a reasonably efficient car and a gas guzzler. Assuming $4.00/gallon gas, a car that costs the same as a Corolla, but is rated at 18 mpg rather than the Corolla's 31, could cost $10,000 more over 12 years. That's a big difference -- far bigger than the difference between Corolla and a Prius.

Now, for the (inevitable) caveats.

  • I didn't look into pollution costs, outside of greenhouse gases.  The diesel Jetta gets a pretty poor rating on tailpipe emissions; but biodiesel burns more cleanly than regular diesel. (However, this post from the Green Car Congress blog suggests that biodiesel may have worse overall emissions than regular diesel, because of the higher emissions and energy costs of agriculture; I don't know enough to decid.) Still, I think that the Prius would beat out the Jetta on this score, since in addition to being fuel efficient it's also a very clean car.  The Corolla is probably somewhere between the Prius and the Jetta.
  • Biodiesel currently sells at a premium to gasoline -- in mid-May, the premium was about 70 cents, based on this and this.  If you think that premium will decline over time, then the Jetta looks a lot better.
  • I don't yet know how to buy EU CO2 credits, though you can buy US credits (as detailed here). With some reservations, I think these are worthwhile -- especially since the projects they fund tend to have ancillary air quality and habitat benefits.

So to get back to the original point -- what do I recommend for someone looking to buy an environmentally friendly used car?  First, during your search, identify a few vehicles that get at least 30 mpg, that you think you think are safe, and that you could live with.  Then, sum the purchase cost of the vehicle, plus an estimate of the cost of 10 years of fuel, plus carbon credits, plus at least 30 cents extra per gallon of petroleum to account for externalities.  Compare costs based on that number, not on the purchase price.  Then check your gut, and if you feel comfortable, go with the least expensive option.  And finally...once you make your choice, buy your carbon credits, and turn your attention to your next big purchasing choice.  Perhaps a place to live that's closer to work or stores, so you can drive less?

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I own a Jetta and run biodiesel in it. I love the car--it's well engineered, probably much like a Prius.

I went with biodiesel over a hybrid because I want to be part of building an alternative energy economy. With a hybrid, I'm still buying fossil fuels--something I wanted to get away from. When I buy biodiesel, I'm supporting my local distributor, and the fuel producers. I'm part of an economy I support, and opting out of the dino-fuel one I despise.

That's why I personally chose biodiesel over hybrid.

Posted by: Steve Andersen | Jun 22, 2005 7:04:50 PM

A few comments.

First of all I've been running pure biodiesel (b100) in my truck since I purchased it 2 years ago. I believe in a balanced approach but I went biodiesel for many reasons

- "biodiesel-ready" The phrase is doing your readers a disservice. Any diesel vehicle is ready to run biodiesel. The only modification you need to make is that you need to modifiy the fuel you are putting in the tank (yes there are a couple of minor caveats to this, but only if you are looking at older diesel vehicles)

- Hybrids still use fossil fuels

- The NET greenhouse emissions of biodiesel is nominal. Biodiesel derives from organic material that has recently extracted CO2 from the atmosphere. Its a closed, short-cycle carbon loop.

- Biodiesel now has a large tax credit associated with it and is virtually the same price as petro-diesel.

- Diesel engines last SIGNIFICANTLY longer than gasoline based vehicles.

- The longevity and replacement costs of the batteries in hybrids have me concerned

- the higher emissions issue is a pretty involved discussion. The short of it is that all emissions are down except for the NOx. There is technology to significantly reduce NOx emissions, however it is not in widespread use (yet) because the sulphur content in petro-diesel ruins the device that removes NOx (there is no sulphur content in biodiesel)

Posted by: Simp | Jun 22, 2005 8:45:06 PM

One thing you didn't mention is general customer satisfaction with these cars. I read that Consumer Reports gave the Prius 94% user satisfaction rating, one of the highest ever. JD Power put Lexus/Toyota at the top, and VW near the bottom.

Certainly my Prius is the most fun of any car I have ever owned, and I have some good ones...

Posted by: jerry | Jun 23, 2005 3:06:25 AM

Did you run numbers for a Toyota ECHO?

I've always figured that would be the economy king, and very close to a total "environmental footprint" winner (among new cars).

I bought a Prius (two days ago), in part because I've accepted the "diesels are unhealthy" thing (no ready supply of biodiesel here either), and in part because California won't really let me have one.

(I couldn't quite make myself ego-less enough for an ECHO. And the Prius is a bit more socially acceptable that the ECHO. It self-explains the reason you have a funny little car.)

Anyway, my last question ... I thought Washington ran on "California smog rules" ... they still let you buy small diesels?

Posted by: odograph | Jun 23, 2005 8:28:44 AM

Oh, and be honest .. VW reliability is still a few notches below Toyota.

Posted by: odograph | Jun 23, 2005 8:31:06 AM

Odograph -
you're right, my spreadsheet declares the Echo the winner.

Everyone -
Just for the record, I haven't made up my mind about carbon offsets yet. To the extent that they encourage businesses to invest in energy efficiency and renewable energy, and encourage people to protect and restore prairie and forests, they're probably a good thing. But there's some question in my mind about whether they're "real" -- perhaps, for example, adding renewable energy to the grid encourages overconsumption of electricity, rather than reduction in coal-fired power. The same thing, of course, is true of any solution that relies on individual action. Buying a fuel sipping car reduces demand for fuel; that, in turn, reduces the price; and that, in turn, increases consumption. So no matter what, the fuel savings are less than you'd hoped for. Which makes me feel that systemic solutions -- carbon taxes and the like -- will always be more effective than individual consumer action.

Posted by: Clark Williams-Derry | Jun 23, 2005 3:39:01 PM


To address your question about Washington's adoption of California's smog rules, the answer is no, not yet. Washington recently adopted the CARB emissions standards (over EPA emissions standards) which will go into effect in 2009 and only then if Oregon also adopts California emissions regulations (this year?)

As an aside, I'm happily running B100 in my VW :) From what I've seen, it's selling around Puget Sound at $3.00 per gallon and can be had for $2.70, perhaps slightly lower than the $0.70 premium you quoted.

Soybeans yield about 48 gallons of biodiesel per acre, mustard seed - 61 gallons, and rapeseed 127 gallons (http://www.journeytoforever.org/biodiesel_yield.html). According to this agriculture.com story(http://www.agriculture.com/ag/story.jhtml?storyid=/templatedata/ag/story/data/ag-sfonline-0507business.xml&catref=ag6001), soybeans require $23-$43 of fuel and fertilizer per acre. I don't know what that equates to in energy consumption (calories, KWhs, etc.) but I am skeptical that biodiesel uses more energy than it produces. I understood biodiesel to have 3.1 energy balance, far better than corn ethanol. In other words, for ever 1 unit of energy than goes into production, you get 3.1 units of biodiesel energy out of the system.

Posted by: Dave | Jun 23, 2005 4:23:21 PM

Two comments from the concerned reader in search of a family enviro-auto:

1. While I appreciate the intention behind the use of locally produced biofuels, the NOx biodiesel issue seems important. If the technology is not readily available (as indicated by Simp) to reduce the smog-forming NOx emissions, are we actually increasing local pollution by running cars on biodiesel? If anyone has more information on this or how to address the NOx issue in individual vehicles, please post.

2. As far as the Prius vs. Corolla-plus-carbon-offsets comparison, there is also something to be said for the visible message that driving a hybrid sends to car companies and other consumers. What if driving the most gas efficient vehicles available were to become trendy and widespread? The impact could be significant. Though buying carbon credits is an interesting idea, this action is practically invisible to others and thus less contagious. Plus, I'm not sure that investing in carbon credits will catch on with your average consumer quite as well as driving a shiny Prius.

Posted by: Meredith | Jun 23, 2005 10:44:56 PM

I've got a question ;-). What is the most effective "labeling" for my Prius. Should it have any politico-enviromental message on the back? Is it a message by itself? Should a driver in a conservative region seek to co-opt rather than confront? (I hope that is a fun question for you.)

Posted by: odograph | Jun 24, 2005 8:07:02 AM


I wanted to address your question about NOx and smog forming emissions. The technology to reduce NOx is readily available and being implemented in Europe as we speak. NOx traps, or scrubbers, are installed on the exhaust of cars to remove a good portion of NOx. However, these contraptions are only effective in the absence of sulfur. Unfortunately, sulfur is still present in U.S. diesel (and not in biodiesel at all) but is being phased out by 2007 when the EPA mandates Ultra Low Sulfur Diesel (ULSD).

After sulfur is completely phased out of US diesel fuel, we'll see diesel emissions take a tun for the better as automakers begin to install NOx traps across their US product lines. We'll also begin to see diesel cars for sale in states like California and Massachusetts, where they currently violate emissions standards.

Right now however, NOX can be reduced just by adjusting the timing on engines running biodiesel because it has a different lubricity than regular diesel.

Also on a related note, researchers in So. Cal have shown that smog actually increases on weekends because less NOx is present to mix with ground level ozone (this mixture reduces smog) -- called the "weekend effect". Ground-level ozone, consequently, is mostly caused by gasoline car emissions. Here's a link to the study: http://www.arb.ca.gov/aqd/weekendeffect/dri_sti_combined.pdf

Posted by: Dave | Jun 24, 2005 8:40:55 AM

For anyone who's interested, I recently put together a spreadsheet of all major manufacturer automobiles sold in the US (2005 model year) with greater than 30 MPG combined fuel economy. The list is sorted by the somewhat crude measure of "dollars of purchase price per MPG".


Posted by: Joseph Willemssen | Jun 24, 2005 12:21:12 PM

Great spreadsheet Joseph.

Posted by: odograph | Jun 24, 2005 1:35:03 PM

It is a good spreadsheet although I think it should be pointed out, for the record, that the GHG emissions listed do not take into account diesel cars running biodiesel.

Posted by: Dave | Jun 24, 2005 3:03:56 PM

Something that is not mentioned here is the ability to run Diesels on any number of oils... including Waste Vegetable Oil or Straight Vegetable Oil.

Yes, converting your diesel to run on WVO takes an intial investment that can cost a fair amount (~$2000 if you have the guy with the best kit do it for you), and as it is experimental, the conversion may have a few kinks to work out.

But, for the most part, cars converted to do this run perfectly well and the "fuel" is essentially free if you make it yourself (a simple process) and here in Seattle anyway, is available for purchase at around $1.30 per gallon.

Finally, by doing this, you are reducing your CO2 emissions to zero and recycling old oil that would otherwise end up in a landfill.

For more on the Seattle guy doing the conversions, and for a great forum where you can learn more, check out frybrid.com (I am not affliated with them).

Posted by: Charlie | Jun 24, 2005 3:20:16 PM

WRT greenhouse effect of biodiesel: I agree that while biodiesel remains a niche market, greenhouse gas emissions are inconsequential because biodiesel manufacturers can use waste products as a feedstock. However, I think biodiesel is not a large-scale solution, for two reasons: 1) land required to produce biodiesel on a large scale will have to displace something (either wilderness or other agriculture) and the amount of land will not be insignificant; and 2) there may be no energy benefit if pencils out like ethanol does. Numerous studies have determined that due to use of fertilizers, pesticides, and farm machinery to grow corn to make ethanol, we would be better off from an energy standpoint to just burn the oil and skip the corn growing (sorry, don't have a reference handy). The point is, ethanol production is a net-energy loser, and I am not convinced that biodiesel won't have the same problem.

Bottom line: biodiesel is great - only as long as not everybody else is doing it too. At that point its not so great.

Posted by: Roy Smith | Jun 24, 2005 3:59:52 PM


I hate to sound harsh but to lump corn ethanol and biodiesel together in terms of net energy produced, simply because they come from agricultural feed stocks, is flat wrong. According to the U.S. Departments of Energy and Agriculture, biodiesel produces significantly more energy than goes into its production, along the lines of 3.2 times as much. Here are a few sources:


What is also important to note is that this energy balance model is for biodiesel produced from soybeans which only yields 48 gallons an acre. There are much more efficient crops like rapeseed at 127 gallons an acre and even research on algae that could produce up to 10,000 gallons an acre and grow in the desert using salt water:


Sorry for the ongoing rant, I'm sure that I sound like a broken record at this point. I just think it's very important to refute incorrect comparisons because they have the potential to propogate myths about biodiesel and other biofuels.

I do agree with you that biodiesel can't solve the problems of GHG emissions and importation of foregin oil all by itself, no one technology or solution can. It is realistic however, to assume that it could account for 10% of the fuel demand in the U.S., and that is nothing to sneeze at.

Posted by: Dave | Jun 24, 2005 4:33:13 PM

A small question I don't know how to get an answer to: Why not a hybrid-diesel vehicle? I'm not hearing anything about one of those in the works...

Posted by: Megan | Jun 24, 2005 7:34:14 PM

Megan -

I think they are working on hybrid diesels in Europe.

Dave -

I'm not sure I buy what the Department of Agriculture has to say on the subject of net energy produced because they have a political interest in promoting both ethanol and biodiesel, but I don't have any figures at hand to dispute their conclusions with, so I will leave that alone.

Another relevant point still pertains: Suppose we converted all of the U.S. auto fleet to run on biodiesel. How much land would that require? Here is my back of the envelope calculation:

1) 200 million autos in U.S. (almost certain that is lower than in fact).
2) Average fuel economy of 30 mpg (certain that is higher than in fact).
3) Average miles per year per vehicle: 10,000 miles (pretty sure that is low).
4) 2&3 give you 333 gallons per vehicle per year.
5) 1&4 give you 66.6 billion gallons per year nationwide.
6) Rapeseed gives you 127 gallons per acre per year.
7) 5&6 give you 524 million acres which is 819,000 square miles.
8) The total land area of the United States is 3,661,000 square miles.
9) So, we would need 22% of the land area of the U.S. to grow biodiesel. (Remember, all my assumptions erred in favor of less land required.) I seriously doubt we have that much agricultural land to spare.

Regarding the algae ponds you reference, having read the article, my first response is that, like in all energy issues (and the rest of life), if it sounds too good to be true, it probably is. Its too late for me to figure out what the fatal flaw in this research is, though, so maybe another day.

Posted by: Roy Smith | Jun 24, 2005 10:51:42 PM

Roy, apologies if I came off contentious, that was was not my intention. I think that we both agree that biodiesel will not meet all of our transportation fuel needs, but that doesn't diminish its potential to meet some of our needs.

The author of the UNH algae study is Mike Briggs, a good-natured and accessible fellow who can be found lurking around the BiodieselNow forums. I'm sure he'd be glad to address any fatal flaws that you've found in his research:


While it may seem to good to be true, I think it's naive to dismiss any budding new green technology before it has been tested in real world economic conditions. One company is doing just that as we speak, called GreenFuel technologies. Time will tell:


Posted by: Dave | Jun 25, 2005 12:01:17 AM

The Hybrid vs Bio-diesel debate seems futile to me. Include hydrogen/fuel cell in the debate, and we're still left with Hybrids as the clear winner by far.

During the Clinton era, Ford and GM produced hybrid prototypes, the Prodigy and Precept 4-door sedans. Both incorporated turbo-diesels and achieved 70-80 mpg. Neither took advantage of adding extra batteries, a technically shortsighted manuever and nod to the fossil fuel industry.

The next generation Plug-in Hybrid, is the quintessential electric car that all manufacturers should drop all else and begin to mass produce.

The life-cycle of state of the art batteries now approaches or exceeds 100,000 miles. But, these batteries create many other advantages beyond longevity. Their weight, mounted low on the car frame, lowers center-of-gravity, improving stability, handling and safety. And of course, hybrid mileage will exceed, 70-80 mpg, doubling and tripling those figures and more.

The photovoltiac solar panel industry has met its match with the Plug-in Hybrid. Every household with rooftop solar panels attains a substantial energy supply not susceptable to fluxuations in the electric utility markets. These households get a invaluable lesson in energy conservation.

Perhaps the greatest lesson Plug-in Hybrids offer is their potential affect upon urban/suburban development. Because their driving range on battery power alone is still limited, they create an economic incentive to patronize and build local economies, whereby over time, more and more destinations become accessable without having to drive. Being able to safely walk and bicycle and take transit is essential transportation planning if modern civilization is to survive the coming collapse of the petroleum industry. Planning simply for the better car is, I repeat, futile.

Posted by: Art | Jun 26, 2005 11:42:48 AM

"...all cynicism masks a failure to cope--an impotence, in short; and that to despise all effort is the greatest effort of all."

-Nicholas Urfe, in John Fowles's _The Magus_

Posted by: Joseph Willemssen | Jun 27, 2005 3:11:45 PM

If the analysis mentioned here is a 12-year discounted cost of operation - then, not including new batteries for a Prius is an incomplete analysis. Everything I have read suggest no more than 8 years, if that, for a set of batteries. To campare apples to apples - or soybean to soybean - for 12 years you need the cost of a new set of batteries. Would that change the rankings?

Posted by: Dave Danielson | Jun 27, 2005 7:43:58 PM

According to Road & Track, the current quote from a Toyota dealer for a Prius battery pack is $ 3,420. Toyota "expects" the prices to come down to about $ 1,000 by 2008 or 2009 when the batteries begin to wear out. There is also the environmental impact of lead-acid battery disposal.

Posted by: Dave Danielson | Jun 27, 2005 7:52:24 PM

"There is also the environmental impact of lead-acid battery disposal."

Prius batteries are Nickel Metal Hydride, not Lead Acid. They are also fully recyclable.


Posted by: Joseph Willemssen | Jun 27, 2005 8:04:12 PM

I'm reading James Kuntzler's "The Long Emergency", an easy read and an informative analysis of what will likely befall modern societies with the coming end of cheap oil. Not a pretty sight.

The hybrid battery packs, regardless of their cost and longevity, represent a means to maintain essential electricity service. And, not just for the individual, but for grid utilities as well. Those who have extra electricity storage can sell it. "Hello? Investors?"

Look at the batteries as an industry that is more local than globally-oriented. Their weight restricts long-distance transport for production and maintenance.

Sure, bio-diesel will be a major commodity, but it is most efficiently utilized in tandom with a hybrid drivetrain. And hybrids offer many more, far more important benefits.

Posted by: Art | Jun 27, 2005 10:03:34 PM