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Are diesel drivers paying their share?

In NZ, we don’t have many diesel cars. They make up around 8.4% of the “light passenger vehicle” fleet,1 similar to Japan (where most of our cars come from) and the US, but much lower than most European countries. Diesel engines are more common for “light commercial vehicles”, i.e. small goods vans and trucks. They account for 68.9% of these vehicles. Overall, across the entire light fleet – defined as all vehicles under 3.5 tonnes – diesels make up 16.2% of vehicles.

Diesel light vehicles pay Road User Charges of $53 per 1,000 km including GST, or $46.08 excluding GST. This charge goes straight to the National Land Transport Fund, paying for road maintenance and construction (and a token amount to public transport and other things).

Petrol vehicles don’t pay Road User Charges. Instead, they pay an excise on petrol, which currently equates to 53.524 cents per litre, excluding GST.

As I’ve written previously, the Ministry of Transport estimates that petrol light vehicles have an average on-road fuel efficiency of around 10.1 litres per 100 km. So, to travel 1,000 km, petrol cars use around 110 litres, and pay $54.06 into the National Land Transport Fund. That’s quite a bit more than the diesels – 17% more per kilometre.

That’s not really fair, especially considering that diesel light vehicles tend to be heavier than petrol ones (since many of them are vans, light trucks, big SUVs etc), and so they do more “wear and tear” on the roads. Plus, the diesel vehicles travel further on average – 14,580 km a year vs. 10,850 for petrol vehicles.

Overall, a light diesel vehicle, travelling 14,580 km a year, will pay $672 into the NLTF. An average petrol car doing the same distance would pay $796 – even though it does less damage to the roads it’s driven on. The difference is a bit over $100, which may not sound like a lot – but it adds up over hundreds of thousands of vehicles.

The government could level the playing field by lowering the excise for the many petrol cars by a tiny bit, or by raising Road User Charges for the fewer diesel vehicles by quite a bit. Given that there’s currently a bit of a funding issue for the National Land Transport Fund – thanks, Roads of National Significance! – there’s a strong argument for picking the latter option.

I emailed the Ministry of Transport to check the figures I’ve used above, and they provided the following additional context:

Until 1 July 2008, light diesel vehicles contributed more to the National Land Transport Fund (NLTF) per 1,000km than petrol vehicles, because a large portion of petrol excise duty was being directed into the Crown consolidated fund, while all road user charges revenue went into the NLTF.  When the Government fully hypothecated petrol excise duty to the NLTF from 1 July 2008, this resulted in petrol vehicles contributing considerably more to the NLTF per 1,000km than diesel vehicles.

I would note here that, even pre-2008 when diesel vehicles were paying more into the NLTF than petrol vehicles, the petrol vehicles still paid more overall per kilometre – it’s just that some of those funds were diverted for other purposes. In 2008, the Labour government shifted transport funding towards more of a user-pays system (still not entirely user-pays), changes which I think makes sense, and which National also supported.

The Ministry of Transport also mentioned in their email:

The rates of petrol excise duty and light road user charges are slowly being brought together.  However, this is a gradual process, as recent Government decisions have capped the maximum increase in any road user charges rate at around 10 percent for a given year.  For example, on 1 July 2013, the rate of petrol excise duty increased by 3 cents per litre, or 5.9 percent.  The rate of road user charges for light vehicles increased by $5, or 10.4 percent.

As such, it seems the government is well aware of the issue, but at the current rate, it will still take several more years before this long-standing imbalance is fixed entirely.

There are other equity issues around the excise vs. Road User Charges system – for example, with petrol cars, there’s a greater incentive to choose more fuel-efficient models – and I’ll look at those another time. These kinds of issues will become clearer if we ever end up moving to a universal Road User Charges system – which is quite possible, although unlikely to happen for a few years.

Sources:

1 “2012 New Zealand Vehicle Fleet Annual Spreadsheet”, tab 8.1a,b,c, Ministry of Transport

2 My calculations using “2012 New Zealand Vehicle Fleet Annual Spreadsheet”, tab 3.1,3.2,3.4,8.3, Ministry of Transport

101 comments to Are diesel drivers paying their share?

  • They should ditch RUC’s and just put up the pump price of diesel by the same amount. There’s a good reason why every other country does that – it’s so much simpler!

    • Bryce P

      Actually, many countries are looking at doing the exact reverse Geoff, and moving to RUC’s for all vehicles.

      • Iiq374

        I’d certainly prefer ditching the RUC and moving to tax at pump system.
        The increased granularity available in RUC by weight class / vehicle type etc would seem to an excuse to support a burgeoning bureaucracy rather than actually achieve a reasonable outcome

      • John Polkinghorne

        Yeah, much more likely to go the other way and go to universal RUCs. Otherwise you’d need to charge different diesel prices for different types of vehicle (possibilities for arbitraging the system), or have supplementary RUCs stay in place for heavier vehicles anyway.

    • Harvey

      You can’t upset the farmers!

      Seriously, give most non users of diesel would be businesses, surely the admin of a rebate scheme would be less than the current RUC scheme.

    • And then do what to capture all the extra damage that heavier vehicles do to the roads? Remember that doubling the axle load increases damage to the road surface to the fourth power. You can’t just fund it out of general taxation, because that money is already being spent on other stuff.

    • Kevin Welsh

      Why not just do what they do in other countries where diesel for commercial use is a different colour. That way commercial diesel users can be taxed differently to passenger vehicles.

      • grantb

        a) No way to charge EV’s even thought they use the roads (and ACC etc).

        b) There are lots of scams with coloured diesel; people with boats or claiming that they have a tractor at home can get cheap fuel and dilute the stuff in there private vehicles. Means police have to start sampling fuel tanks and also encourages storing tanks of diesel.

        Given that there (used to be) six monthly or yearly WOF checks in which KM travelled can be checked, the RUC thing is not a bad solution, but think it should be better integrated with vehicle license. Personally I think that when you buy a motor vehicle, regardless of type (diesel, EV, petrol), you have to purchase a single license to operate that covers all costs (roading charges, compulsory insurance) etc, you simply have to get an odometer check once a year (or on sale/disposal of vehicle).

    • Ryan Gibbs

      Personally I think the best solution will be a mix of tax and RUC for both diesel and petrol. The tax should cover the carbon cost of the fuel, and the RUC should cover the total cost of road maintenance and upgrades (both national and local roads) and roading costs taken out of local rates.
      That way the roading funds are fairly recovered by the vehicles that use the road the most or that cause the most damage to it.
      A US department of transportation study (I cant find it again at the moment sorry) found that a 40tonne truck does 40,000x the damage to the road than a 2 tonne car (several other studies have shown similar figures and a civil engineering friend was told a similar figure when studying at Uni).
      The best way to organise the RUC would be to charge per tonne per axle per km. That way the charges are much more closely linked with the pressure and therefore damage that is done to the road by the vehicle. The charge should increase exponentially as the tonne/axle/km figure increases. For example if a 1 tonne 2 axle car pays $50/1000km, a 2 tonne 2 axle car would pay $100/1000km, a 4 tonne 2 axle truck would pay $400/100km and a 8 tonne 2 axle truck would pay $1600/1000km. As you can see as the weight per axle increases the charge increases exponentially as the studies show that the damage increases exponentially (i.e. weight doubles damage done does up 4x, weight quadruples damage done goes up by 16x).
      No that is not a perfect system but it is a hell of a lot better than the current one and can have the values tweeked to better suit.

  • Harvey

    Not so sure. That 10.1l per 100km should be revised. I nearly get that in my gas guzzler. Modern engines are getting a lot less than this and the newer effecient turbos do even better. We are looking at a car that is meant to get 5l per 100

    • John Polkinghorne

      Individual cars can do much better, especially in good conditions, but averaged across the entire NZ fleet for all on-road driving it’s around 10.1 litres/ 100 km. Fuel efficiency tends to be worse in congested conditions (city driving), or with the A/C on, etc…

      • Greg N

        Yes, the average fleet efficiency is skewed higher by the “long tail” of *really* inefficient, old clunkers out there (both car and trucks).
        It is not a NZ exclusive issue, but our average vehicle fleet age means its worse than in most other developed countries.

        It was also the thinking behind the “cash for clunkers” scheme that the Bush administration came up with – pay people to trade in their old vehicle on a more fuel efficient one.
        Unfortunately that scheme was a dismal failure in improving the fuel efficiency of the entire US fleet and also economically and lead to all sorts of bad outcomes.

        • grantb

          “…dismal failure in improving the fuel efficiency of the entire US fleet”

          Maybe because the US fleet, even new cars has dismal fuel efficiency? Look at Japanese vehicles – they seem to go out of there way to make the US models of popular cars like the Accord, have bigger capacity and higher fuel consumption compared with those sold elsewhere. And the F150 is still one of the biggest selling *new* vehicles in the US.

          • Greg N

            As of last month (see http://green.autoblog.com/2014/02/08/umtri-average-fuel-economy-in-us-climbs-yet-again/ ), the CAFE rating of the US new car fleet is 24.9 MPG. (thats US gallon).
            Thats 9.45 l per 100km in metric – thats better than a lot of NZ cars get now. For those old timers who still think in MPG this equates to 29.9 MPG (using Imperial Gallons measurement)

            Of course, the overall US Fleet average will be lower due to the old gas guzzlers but their fleet is much younger than ours is, and CAFE ratings for new cars has been going up steadily the last 3 or so years in the US.

      • Donald

        Today I drive a 2008 Hyundai Getz, weighing a bit over 1.3 tonnes. In actual use I get 5l/100km pretty well exactly. For that I pay $5.30/100km in road user charges.

        If I were to replace that with a modern petrol car of the same weight and a roughly similar per-litre fuel consumption, (say a Hyundai i30) I’d have a vehicle which caused the same road wear but paid half as much tax. If I were to replace that with a later-model lighter diesel car I’d have vehicle which used less fuel and caused less road wear. Guess how much difference that would make to the tax bill.

        As long as I’m paying twice the tax on the petrol equivalent or more, I’m going to be hard to persuade I’m not paying my share.

        That could lead to a rational discussion of the higher particulate output of diesel engines versus their much lower greenhouse gas emissions, but I don’t believe such considerations have any effect on our current tax system.

        • Greg N

          I think your maths are right for your situation, but your interpretation is wrong for the NZ Fleet (and economy) as a whole..

          A fuel efficient Petrol car would as you say pay less RUC equivalent charges compared to you – solely due to its reduced l/100km which means the built in charges per litre of petrol are lower in total for this cvar as a result. A Electric vehicle would pay $0 “RUC” equivalent charges but still cause road damage too..

          But the RUC rate your pay is fixed based on weight and covers all Diesel vehicles up to 3.5 Tonnes in weight – you are therefore not subsidising petrol car drivers.
          You are subsidising other Diesel drivers who drive heavier diesel vehicles than you do up to 3.5T.

          There is some argument to be made that lighter diesel vehicles under 3.5T should pay reduced RUC rates – but the fact that Diesel vehicles as a whole do not pay their fair share is a more important reason to leave it as it is/reduce the cross-subsidy between fuels.
          So what needs to happen is that once the Diesel fleet as a whole pays its way, then the RUC charges within the diesel fuel regime can be adjusted for different weight classes.

          I’d also point out, that a 3.5T truck unloaded may not weigh more than your 1.3T car, so doesn’t cause “3.5 times”* the damage of your car all the time.
          If it was classed a Heavy vehicle it would pay RUC charges on its “maximum loaded weight” thus assuming it was fully loaded all the time.

          But there is valid argument that even that figure would be too low.

          *(the road damage for a 3.5T truck over a 1T car is way way more than 3.5 times higher but for simplicity lets say its only 3.5 times).

        • John Polkinghorne

          Hi Donald, yes small diesels do pay more proportionately – and you would indeed pay a bit less into the NLTF if you were driving a similar petrol car (maybe 30% less – certainly not half). But then, if all petrol cars were paying that small an amount, the NLTF would have a big funding shortfall on its hands.
          The current situation means that petrol car buyers are more incentivised to choose more efficient models (which is good), but may be less likely to consider diesels (which may be good or bad, depending on the pollution and long-term costs). Another potential equity issue.
          But most of the diesels under 3.5 tonnes are large cars/ SUVs, or vans or trucks, and those ones certainly do seem to be getting a bit of an easy ride in terms of their contribution to the NLTF.

          • Donald

            John,

            On your numbers

            Diesel at 5l/100km is $5.30/100km in road user charges
            Petrol at 5l/100km is 53c*5 = $2.65/100km in tax, or as near to half as makes no difference.

            My application of these numbers assumes that the relationship between the vendor’s published economy and real numbers is the same in both cases, but the gap in real life is not likely to be nearly as small as 30%. Recall that I’m comparing a five-and-a-bit year old diesel with a possible new petrol replacement.

            Of course the gap widens if newer examples of both types continue to improve in efficiency.

            Your argument seems to come down to “We tax the most efficient light vehicles heavily, but that doesn’t matter because they’re so rare in New Zealand.”. Which rather invites the question of why they’re so much rarer here than in much of Europe. Might the extra taxation have something to do with that?

          • John Polkinghorne

            Hi Donald, you need to take the GST off the RUCs. And diesel engines use 20% to 30% less fuel (in litres) than petrol ones, so the petrol car would actually use 6-7 litres per 100 km. This would still be considered very good (on-road) fuel economy.

          • Bryce P

            The other thing that gets forgotten John is that, companies operating vehicles, get to claim back tax (other than GST) against the fuel / operating costs of motor vehicles. Now, this doesn’t come from the transport budget but is still a loss against income for the govt.

          • John Polkinghorne

            Hi Bryce, you mean they get to treat it as an expense and therefore it’s reducing their bottom line profit, and the tax paid that way? In which case, sure, but that’s no different than any other business expense (it could also be travel via bus or train, if that was how the business travel was being done). Or is there something else I’m not aware of?

          • Bryce P

            It’s exactly what I mean. It’s just that the income for the roading budget (100% of what’s paid – GST) doesn’t reflect that the cost of doing business is off set against profit. I’m not saying it’s wrong but it does skew the figures. If the business pays $100 toward RUC’s but claims 30% of this against their tax bill, then the actual amount into the gov’t land transport budget is off set against what IRD will get from the company. IRD subsidises the transport budget. No, it is no different than any other transport mode, other than it is the most common (air travel excepted).

          • Bryce P

            I’m a business owner myself and see how it happens.

          • Greg N

            If there is GST on RUC’s isn’t that a tax on a tax? Like the GST on rates?

          • Bryce P

            There sure is.

  • My 1991 2.5l Nissan Skyline does about 10.9l per 100km (600km on the full 55 litre tank). But that’s open road driving, it’s less on local trips.

  • Bryce P

    Cripes, my Xtrail is a 2.5L, almost always carries my 50 or so kg of gear and manages 9.0L almost continually (mixed driving). I’m really impressed.

    • Greg N

      Ya think?

      Back in the day, the Model T ford got 25MPG (thats British Gallons, not US ones), thats about 11.3 l per 100km in todays numbers – and that was 80+ years ago, on crappy unpaved roads.

      So by that token, 9.0l 100ks is good but not *that* great, and shows how inefficient cars are overall for moving people – especially when given after 80- years of trying our current fossil fuel driven fleet average is probably what it was in the 20′s and 30s.

      In effect 80 years of “fuel efficiency” gains have been lost through vehicle weight gains, air-con, electric this, power that – “Jevons Paradox” at its most perverse I’d say.

      My Honda Hybrid gets at the very worst 6.4l 100km – only if I really thrash it at away from lights/heavy braking etc, and have a really congested drive to/from work in it, while running the aircon full bore. (its more like 5.3l 100 k around town for normal congested “school term time” commuting)

      Same car gets well below 5.0l/100k if I drive on the motorway though.
      Which shows my car is more efficient at moving long distances at higher speeds, than when stuck in stop/start traffic during a shorter commute.
      So I could live further out of town, and commute each day via motorway for the same “fuel cost” (as long as I did it at 100k each way mind).
      Of course, I don’t do that as it isn’t that simple.

      But that “paradox” of efficiency in itself is a good reason why our fleet fuel average is 11.1 l per 100km
      - basically the fleet spends too much time in “city driving” mode, not “open road” driving. Which is the reality of car usage for most of us.

      • Bryce P

        At what speed was that Model T operating? What was it’s crash rating? Given the comfort and safety in the X-Trail (that does get used quite a long way off road BTW) the economy is pretty good.

        • Greg N

          You will probably find that the efficiency is good on the motorway/open road getting to/from your off road locations. and not good around town or actually off road. Unless you have a onboard fuel usage system you won’t know the actual usage over your trips, except as a comparison of X mk for Y litres of fuel between fuel ups.
          My car shows me what my current usage is as well the current average since last fueling up, it is sobering to see your car show 27 l per 100km when its cold na dpulling up a steep hill. Of course, most of the time its not doing that but you soon see where the “expensive” parts of the trip are.

          I am not saying a Model T ford is as safe as a modern car is, or as fast, but goes to show how little in fuel efficiency has changed as the safety and other features conspire to in effect overcome the efficiency gains.

          • Bryce P

            The car has a trip computer. Also, the hp for the fuel economy has improved vastly over the past century. When i first started my apprenticeship the only cars with EFI were from Europe.

          • grantb

            Remember doing a study on vehicles many years ago, looking at drag coefficient, Surprising thing was that back in the 1930’s, long before computerised fluid dynamic modelling, was that car designers could put together a car with lower drag (and frontal area) than many modern vehicles.

            While car manufactures often claim their new model is now more sleek and efficient, (and may be given advances in engine efficiencies), generally drag on modern vehicles has not been reducing much on average. Partially that has to do with other safety features like pedestrian safety (higher bonnets, bigger crumple zones) or larger wing-mirrors for better visibility, but biggest issue is that people prefer fashionable looks over aerodynamics. So although covered rear wheels, smooth underbodies (which people don’t get to see) and tapered/rounded vehicle body shape, all make a car more efficient, people instead to prefer oversized wheels (17” or more) and more SUV body shapes, even on non-4WD vehicles.

            Funny thing about power though – I brought a LAMS registered motorbike (40KW) as that was the only one on the show-room floor, rode it for about 4 weeks until first service was due, then had it derestricted (so now max power is 60KW). Despite the significant increase in power, fuel burn (at least over the limited time I had in comparison) did not seem to change.

          • Bryce P

            More power doesn’t have to mean more fuel consumption. It’s how you use it that matters. The Chev V8′s in the VE Commodore can give astounding economy if you drive them nicely. If however, you use all of the power, you’ll be visiting your local petrol station quite quickly.

  • Peter Olorenshaw

    There are two things missing with this post. The first is the inequity of a 1 tonne diesel mini paying the same RUC as a 3.5 tonne truck (laden with xxtonne of freight) and the amount of road damage they do. – surely there is a significant difference.
    Secondly and far moire importantly only half* of maintenance and seal renewals of local roads is paid for out of RUC & FED, the rest is from ratepayers. So big trucks using our local roads are only paying half the damage they cause – ratepayers are paying the rest. Why are we ratepayers subsidising trucking like this?

    * The actual proportion of local body to NLTF funding for local roads depends on the area – for most people its around half from their local council and half from the National Land Transport Fund (funded from Road User Charges and Fuel Excise Duties)

    • Rob

      Peter is right. Usage is ignored. Even a 2 tonne family 4wd (which uses more than twice as much fuel as a diesel mini) does far less damage than a 3 tonne truck.
      There are other inequities too. Do you have a petrol ute or 4wd? It will pay a far smaller ACC premium than the same model diesel ute or 4wd, regardless of use. Something acknowledged by Judith Collins and was going to be fixed, but is being delayed so govt can continue collect revenue.
      Of course, if the govt didn’t waste so much of their revenue on Roads of National Stupidity…

  • Matthew

    Diesel particulates are also more deadly than petrol (yes even when taking into account better fuel efficiencies in diesels), so tax should be used to discourage diesels in the light vehicle category. European cities are finding it harder to comply with EU particulate standards because of the increasing market share of diesels. (and EU diesel standards are cleaner than NZ). It is not a mistake New Zealand should repeat.

    Diesel particulate are a Class 1 carcinogen after all. Class 1 means proven to cause cancers in humans. i.e. if you are breathing diesel exhausts your risk of cancer goes up. They are best avoided, and logically (but it’s amazing how many fail the cause and effect kind of logic) not created in the first place by thinking a diesel car is better than non-diesel. Also a compelling reason why buses should not be diesel too.

    • Bryce P

      Hence the reason I choose petrol over diesel.

      • JohnP

        The move to small diesel engines could be a disaster for NZ given how long cars are kept on the road. Small common rail diesel engines use very high compression and so as cylinder rings wear they smoke. The EU focussed on CO2 rather than particulates (presumably they figured kill this generation rather than the next.) But car manufacturers only care about the warrantee period rather than what their product is still doing to the air in 10 years. JD Power gives reliability for the first few years so people think that German diesel cars have a good reliability record when you are better off buying a small Asian petrol engine. Still there are plenty of people on Auckland’s roads who like to drive around feeling like they are part of the master race just because they have a BMW or Audi.

        • Bryce P

          And the difference between Germany and NZ is that they replace their cars more frequently and the average age of the fleet (and probably km’s travelled) is lower than here. They’re probably also more enthused about servicing vehicles after the warranty period. Would make for some interesting reading.

    • I have had reason recently to be spending more time than usual at a number of Auckland’s train stations and the hideousness that our current trains spew out becomes plainly evident once a couple of trains have been through. Living or working next to the rail network at the moment must be seriously bad for carcinogens and particulates. And then there’s the noise. Electrification is going to just completely transform the quality of life near the network, especially around stations [and land values].

      Freight movements are going to stick out badly soon. The call to complete more electrification of the freight network may soon come as much from pollution awareness as from the need to for resilience and fuel security and lower opex [but only likely to be heard when there is a different government in Wellington of course].

      • Anyone know what would be involved in getting the electrification systems used on the central NIMT section compatible with what’s being installed in Auckland? And what about Wellington? Is it feasible to consider changing Wellington from DC to AC for its trains? If rail could be electrified all the way from Auckland to Wellington, that’d do some pretty amazing things for rail freight. I’m guessing the likes of the Raurimu Spiral couldn’t realistically be electrified, though, due to tunnel heights?

        • Ak is compatible, Wellington not. Raurimu is electrified as far as I know as NIMT is all the way to Hamilton. Soon the the only gap will be Hamilton to Papakura [and it surely won’t be long before there to Pukekohe is also done. But also all the freight marshalling yards etc.

          Of course the line to Tauranga, now such an important part of the network is the expensive bit if we were going all out. And new electric locos would be required. How wonderful that would be especially for urban areas.

          Even LNG locos would be a huge improvement in terms of air pollution and fuel security. Electrification is clearly the best long term solution to these issues. But it does require an economic rather than narrowly financial understanding of the whole transport structure.

          • Pete g

            There are locos that will do both 1500V DC and 25 kV AC so could be possible. There is also gap from Palerston North (where the 25 kV AC ends) and Waikanae (1500 V DC starts) to fill as well.

            Also others will know more, but the 2 25kV AC systems have different fault currents meaning that exisiting NIMT locos can’t go north. Just needs some effort to make it happen

          • Marshalling yards can be done gradually, since the use of small diesel shunting locos to assemble trains is still a huge improvement on what we have at present.
            Pete G’s comment was what I meant about Auckland not being compatible with NIMT. Both 25kV AC, but not identical.

          • jonno1

            Pete G is correct, the two 25kV systems are not compatible as the AEA fault level is much higher, where fault level is a measure of the energy released during a dead short circuit. The present NIMT locos couldn’t handle the fault level of the AEA. That’s not to say they couldn’t be replaced, even with dual voltage locos as suggested, but I don’t know the economics of that, or of “filling the gaps”.

      • Greg N

        You are right, but lets not overlook though Patrick, that while our crappy old Diesel hauled passenger and freight trains are a major emitter of visible pollution (and PM5 & PM10s) without a doubt – as anyone who has walked over a passenger footbridge.to an island platform as a smoky diesel loco hauled its sorry ass out of the station below, can attest.

        The fact that most of the freight moved around NZ (even to and from said freight trains) is going on trucks who also emit smoke and particulates should not be overlooked as well. And “tonne for tonne” of freight moved, the truck fleet is probably the worse emitter of the lot – even when those 55 tonne “HPV” megaliths are factored in.
        Buses aren’t far behind in the transport equation either. And we have some real shockers on that front in Auckland still – despite NZ Bus proclaiming the gazillions on new busesthey spend, the quality of the NZ Bus fleet emission wise does not seem to be improving.

        And one problem with the RUC system is that it does not directly account for fuel efficiency of RUC-requiring vehicles – other than by fact the more efficient ones have a lower fuel cost “at the pump”. But this pump price difference does often mean there is little, if any incentive to replace a 15 years+ “old smoky” diesel powered vehicle with a newer one, so the old one just keeps on keeping on, emitting the visible and invisible pollution without any incentive not to.

        And thats where the RUC system is wrong footing us. We need a user charges system which better captures more of the externalities each class of fuel and vehicle is responsible for, while rewarding those who do not. So it is fair that passenger electric vehicles are exempt RUCs presently When and if the fleet becomes majority electric powered ,then we can review this situation.

        But I don’t think the same would apply to electric trucks or buses should they become common – but the rate of RUCs for an electric bus over a diesel one would be different to reflect that fact by having the diesel bus RUC charges rise not by putting the electric bus RUCs down.
        On the basis that the trucks and buses don’t cover all their damage now, so putting RUCs down makes no sense for a user pays system.

        • Patrick R

          The failure to price what are known, tellingly, as externalities in the transport system is why we are using our legacy rail network so inefficiently.

          Yes I agree about the quantity of truck emissions but one good way of reducing those is incentivising a greater use of the rail network for freight, especially to and from ports. But I am wary of waking the sleeping giant of Remuera activism in opposing increased freight movements on the eastern line.

          So how to help fix Grafton Gully, port access, quality of life on rail corridors and road routes, and improve fuel security: electrify more of the rail freight system.

          • Greg N

            Dont disagree at all, especially when as far as port freight goes, the electrification part is all done and the electric locos could equally haul up the Grafton Gully rather than going via the eastern line route because the energy “lost” hauling up the hill will be mostly regained on the downhill grades after Remuera station due to regenerative braking.

            One main issue is that the direct rail link from the ports to the rest of the network is only east facing now.

            [there is a tunnel to allow west facing trains direct exit from the port to go up the hill/out west but there is no track there and/or its alignment is wrong as I recall from other posters in the past].

            However, yes, diesel locos could haul the freight train out of the port to the marshalling yards adjacent to the eastern lines in front of Fred Amblers lookout, then the electric loco hooks up to the correct end for which ever way its going. They can even leave the diesel loco attached so its there for marshalling at the other end of the journey e.g. at MetroPort.

            All they need is some modern 26kv AC electric locos that can run on the Auckland system to kick that off – hardly rocket science, but KR don’t seem to be interested.
            I am sure they could trial it if they want to – even if these locos could only ever operate in the Auckland area, hauling freight electrically is the way forward.

          • Don’t think there is any utility in rail freight trying to use the Parnell route- but a whole lot more on the eastern line especially with a dedicated track and electrified would be ideal.

            Regenerative breaking is great but I think you may be overstating it somewhat, I think returns are of the order of 30% max. In other words it is impossible to get all or even close to all the energy back from hauling a mass up a hill and then using the resistance to recharge on the way down the other side. Others will have the maths on this more accurately than me. But yes yet another reason to be running on electricity.

          • Greg N

            Well Patrick you know the 3rd Line option ends at Panmure Station.

            As for not using Parnell Route, we do a lot things in this country for other than strict energy efficiency reasons.
            Regardless of which route the trains take, they need to be electric hauled.

          • I can’t see how but they tell me Panmure is ‘future proofed’ for a third line? The bigger expense is the tunnel and probably the causeway. But even extensive sections of additional track would allow more efficient use of this route by both freight and passenger systems wouldn’t it? I’m no trainspotter so do correct me if this is not the case.

            And KR are not allowed to even imagine spending on capex, even if it means saving on opex, as our current masters wish instead to subsidise trucking, and would dismantle the whole thing if they thought they could get away with it.

          • Luke C

            Interested to know if we really need a third main north of Westfield for the foreseeable future. With the proposed 15 minute off-peak frequencies should be fine fitting freights in. If it goes to 10 minutes should still be able to manage it as long as locomotives used are powerful enough.
            The urgent issue is grade separation of Westfield junction to reduce the various conflicts, and maybe a 2km section of third main east of here would come in handy for trains to wait at the junction.

          • Not north of metro port, but in order to grow the proportion of port of Ak freight shipped by rail it certainly would be useful Westfield junction to port. Also it would make more daytime movements and fewer at night possible, so therefore improvements for those near the line….?

            And yes, now is the time to grade separate the Westfield junction as they’re going to be shoving a road flyover right through there for the east/west link…. if it were a truly multi-modal project the mere 39mil for the third main to Westfield and grade separation of the rail junction would be part of the deal. And at least ‘future-proofing for Westfield to port third main.

      • KiwiRail’s study into extending electrification concluded that Papakura to Tauranga would be close to $900m (in 2008 dollars), so would be over the billion mark by now. The Opex savings would take close to a century to be realised.

        Much smaller spending could achieve much more (heavier axle loads etc), so the project was determined to not be worthwhile.

        It would be silly of a future govenment to prioritise something that brings little benefit to rail over other potential projects that could achieve more at less cost.

        Don’t forget, those diesel locomotive emmissions may look ugly, but per tonne being hauled, they are much smaller emmissions than any truck.

        • Bryce P

          Which seems like a lot until you remember we spent $250M on a single sports stadium.

        • Greg N

          Are you saying the NIMT electrification was a waste of money too that won’t pay for itself in OPEX savings for a hundred years too?

          I’d also point out that that study was done in 2008 before the current competition situation existed between POAL and Port of Tauranga which meant that the amount of freight moving between Tauranga and Auckland was much less than it is now.

          Basically since POT is having POAL’s lunch with regards container freight in Auckland, surely that study is now well out of date with regards the economics of the link..

          And how come the entire Auckland area can be electrified for well under that $900m cost and thats in 2010 dollars?

          Admittedly that doesn’t include buying a fleet of EMUs but since KR already has a fleet of electric locos on the NIMT presumably they can be enabled to use the new link to Tauranga without needing total replacement (maybe some upgrades to permit travelling on the Auckland Electric network).

          Something with your figures doesn’t;stack up.

          • It’s well known that the reasoning behind the NIMT electrification did not pan out, and that the project would never happen today. In fact if the decision had just been delayed a couple of years, it probably wouldn’t have happened.

            Regarding the study costs, Papakura-Hamilton was costed at $433m, and Hamilton-Tauranga at $427m, in 2008 dollars. You’ll need to adjust those figures to 2014 dollars, and I’m fairly certain that would top the billion mark.

            For KiwiRail it has little benefit, as it’s really just a case of swapping one type of locomotive for another, and swapping one type of maintenance for another. The savings on opex are quite small.

            What would really benefit the business substantially would be getting rid of speed restrictions, getting wagon weights up from 72 tonne to 100 tonne, curve easements, longer loops, better signalling, and greater double tracking. These improvements would bring vastly greater benefits, for much lower cost. So as a business decision, electrification doesn’t add up.

            Future electrification extensions can therefore only be delivered if the project is carried out by government external to the KiwiRail business, and also by ignoring those things mentioned above which would be more beneficial to the business. In short, it makes little sense.

          • Bryce P

            Not everyone thinks this kind of project is as wasteful as you Geoff. http://news.bbc.co.uk/2/hi/uk_news/8164070.stm

          • MFD

            “And how come the entire Auckland area can be electrified for well under that $900m cost and thats in 2010 dollars”

            …probably because the entire Auckland electrification involved fewer km than Papakura-Te Rapa alone, let alone Hamilton-Tauranga. Geoff’s figures look on the light side…and if you have better figures, let’s see them.

            “Not everyone thinks this kind of project is as wasteful as you Geoff.”

            The Great Western main line already has much higher speed limits and axle loads than Papakura-Te Rapa or Hamilton-Tauranga and is double track throughout. It is primarily a passenger route rather than the freight route we have. It also serves the largest city in Europe at one end and the largest city in Wales at the other. As comparisons go it is a particularly poor example.

          • Bryce P

            Also, I would think electrification of the suggested lines would be easier, this cheaper, than doing urban Auckland.

          • Bryce P

            And I’m not counting out the other suggested issues. These need to be resolved as well.

          • Bryce, the world’s biggest freight operations are all diesel. The massive 20,000 tonne iron ore trains in Western Australia, the billions of tonnes carted across America every year – all diesel. The annual tonnage of Auckland-Tauranga is about one day of tonnage on California’s Cajon Pass, and they are not electrifying. It’s not cost effective even at those very high tonnage levels.

            The figures you dispute are not mine, they are KiwiRail’s (or more precisely the figures determined by Murray King’s consultancy business for Ontrack in 2008).

          • Bryce P

            I’m not disputing any figures just pointing out that not all operations share your, or KR’s view.

          • You compared apples with oranges though, by applying a subsidized passenger network motive power option to a commercial freight operation. The world’s freight railroads are not electrifying because it’s not cost effective to do so.

          • Bryce P

            But I’m not thinking of this in pure freight terms. My views are also formed by my interest in moving NZ to 100% renewable based electricity production and if possible passenger rail utilising this great resource.

          • MFD

            Open access freight operators in the EU have bought diesel locomotives, not electric and I would not be surprised if freight operations on the GW main line in the UK continue to be diesel-hauled post electrification.
            Geoff is not strictly correct; there are examples of electrically-hauled freight. Queensland coal, South African and Swedish iron ore but these are bulk haul between two fixed points. There are other examples of electric freight haulage having been abandoned: Tumbler River BC, the NW corridor, the Virginian and our own Otira tunnel.

          • Greg N

            MFD:
            Auckland contract was for 175 “track km” of electrification, the distance from Pukekohe to Tauranga (admittedly thats by road but going the long way via Hamilton, Morrinsville and Paeroa to try and follow the train route reasonably closely) is 244km by Google Earth

            so we’re talking at best 60km “further” than Aucklands network. So yep, those figures look suspect.

            The cost in 2008 dollars was around $1bn, but that figure included double tracking the western line and a whiole heap of other work not related directly to electrification.

            And I agree with Bryce NZ Inc has decisions to make on renewable transport that go far above KR board decisions on “keeping the lights on”, and thats where the Government needs to step up. In fact, the Government should remove Track ownership from KR and manage, like DOC does with the land under Crown control e.g. the High country areas, for the longer term and greater good of NZ as a whole.

            I excluded Papakura to Pukekohe as I think that this will be done anyway by At in due course (well before KR ever sorts out the Puke to Tauranga side) so the only actual new work needed for this will be from Puke to Tauranga.

          • MFD

            Papakura-Te Rapa is more than 200 track km. It’s double almost all of the way.

          • MFD

            …and the ECMT hasn’t gone via Paeroa since around 1978 when the Kaimai tunnel opened.

          • MFD, the electric locomotives used on Queensland’s North Coast Line (which was electrified in the 80′s at the same time as the NIMT) have in recent times been placed into storage. NCL freights are now hauled by newer diesel locos. The simple reason: It’s cheaper. Further inland they still have electric hauled coal trains, but it seems the lions share of new loco purchases for the area goes into new diesels.

            Much of Queensland’s electrification scheme came about from 1979 concerns over energy, much as our own NIMT did.

          • Greg, electrification to Mount Maunganui, including loops, involves something like 350 track km. Even then you don’t get the full benefits because a third of the trains using the Auckland-Tauranga corridor go to/from such places as Kinleith, Rotowaro and Mission Bush.

            Auckland’s electrification was $500m for 175km, so $860m for 350km actually sounds on the light side to me.

  • John is there any reason you didn’t look at the RUCs paid by heavy vehicles? These vehicles are the source of disproportionate amount of damage to roads and disproportionate amounts of spending on new roads. We are constantly being told that the ruinous RoNS programme is all about road freight, yet instead of being user pays as the road freight industry try to tell us it looks like it involves a pretty substantial cross subsidy from light vehicle users to heavy financially, as well as the economic subsidy from the rest of society that absorbs all the disbenefit of this system…. Got the math to hand?

    • John Polkinghorne

      That’s right Patrick, just thought it would have to wait for another post is all…

      • Luke C

        and the subsidy getting worse with big money being spent to upgrade bridges for ever larger trucks that are making there way onto our roads. Each extra few tonne or few metres start with small scale trials then quickly spreads over the country.
        Soon will create big even bigger noise for Harbour tunnel as these new heavy trucks will be having to divert via the Western Ring Route to go to Northland.

  • Malcolm

    Why they dont just add RUC to the cost of diesel at the pump like they do for petrol. It would surely be a lot simpler to administer.

    • Read the comments at the top; different diesel vehicles are charged different RUCs according to their weight and axle configuration (and hence damage to the roads); this article was just looking at the 9t 2-axle truck would pay ~5 times more RUC per km than the <3.5t ones. So it would need a system whereby each vehicle had some kind of "weight/axle code" that the attendant at the service station could use to enter "RUC surcharge" to their diesel cost.

      • Luke C

        the issue is also with diesel not used on roads. Currently people can fill up little tankers for farm use at the petrol station. Or vice-versa farm tanks can be used be used for both on and off road use.
        If RUC’s were included in petrol price then would make this much more difficult. In the UK where RUC’s are included in petrol price agricultural diesel is separate and dyed red, so people who use cheap diesel for on road use can be found out.

  • I hope everyone saw this from the twitter feed on the left:

    • Rob

      I wonder where that figure “4th power” came from?

    • Greg N

      Or if cyclist pays even $1 fore road repairs, motorist has to pay $12,000, and 10 tonne trucks?
      Well lets say $15m per truck and call it square then.

      • $12k? That doesn’t sound right. Let’s say I have a $1 tax for an axle load of 40kg (let’s pretend I weigh 80kg). A 1400kg car has an axle load of 700kg (let’s pretend its weight is a perfect 50:50 front:rear split), which is 17.5 times greater than my axle load. 17.5 x 17.5 x 17.5 x 17.5=$93,789.

        Or were you just making numbers up?

        • Greg N

          I just took the 12 million pounds number in the original tweet above, divided by 100 (assuming cyclist pays only 1 not 100 for their share of “damage”) and used $’s,
          So $12 million / 100 = $12,000, however, $93.8k per car sounds fine if cyclist pays $1 for damage to roads.

          And even better, using your numbers: if car driver pays $1876 for damage (which is possible in NZ if they travelled some 34.4k in a petrol car at the fleet average 11.1 litres per 100km – Note: “Your Cars Mileage May Vary”) , and said cyclist pays 1.876 cents, so lets call it, say 2 cents.
          (not that a 2 cent coin is legal tender in NZ any more, presumably we can pay by EFTPOS or a Cheque right?)

          So next time someone says cyclists don’t pay for their share of the roads, give them their due – all 2 cents worth.

          • What will really make you happy is that a truck with a 7T axle loading will pay 10,000 times as much as that car. That is, $937 million if a cyclist with a 40kg axle loading is paying $1.

  • Don

    Surely the heavier load the more diesel used so a tax at the pump should work and IIRC this has even been suggested from some transport operators.
    The next problem is what happens to the tax on fuel not used for road transport? Examples as: Marine use, stationery plant (standby generators, compressors etc) , earthmoving machinery and farm machinery to name a few. One solution is have a refund process or colour the fuel for taxed or non taxed use. Each solution has it’s issues which has probably resulted in the ‘too hard bin / sweep it under the carpet / don’t make waves’ result we currently have.

    • Greg N

      To a point a heavier load uses more fuel – but the increase in fuel use as weight goes up is not a 45 degree linear line e.g. 10 times the weight = ten times the fuel. If it did linearly grwo why would operators want these 57 tonne monsters on the road? – they cost less to run per tonne carried than 2 28 Tonne trucks.

      And even if that was the case, a vehicle which is ten times heavier per axle causes 10,000 times (yes ten thousand times – 10 to the power of 4) the damage of the lighter vehicle. Or to put it another way 1 ten tonne two axle truck causes as much damage to the road in one trip as 10,000 2 axle cars weighing 1 tonne driving the same road.

      RUC charges are supposed to recoup that increased cost, but mostly do not.

  • Ari

    Yes, Ive always pointed out that the road freighting industry is being massively subsidised by motorists because of the fourth power law. It is totally unfair that the trucking industry get a huge subsidy, but rail gets little. The high productivity trucks do huge damage to the roads (by a factor of 300,000 or more), but they arent paying for it, other road users are. How can rail compete?

  • Don

    Rail, however, is exempt from RUC or equivalent and can even use electricity for part of the way. If taxation for road haulage was applied correctly there would be a greater incentive to use rail.
    Any excess of diesel at Marsden Point could be exported.

  • Scott

    Recreational boaties are seriously ripped off by the current petrol tax system. No tax refunds are available to recreational boats. Burnt around 65L today (running a chase boat for a sailing regatta). That’s around a $35 contribution to the land transport fund for a vehicle that is unable to operate on land.

  • Dan C

    The diesel subsidy is getting even worse. The recent 3cent petrol tax increase was a six percent increase of the tax. RUC also went up 6%, but that was on average. Passenger vehicles went up 10% while the heavier classes went up as little as 2%. It no wonder so few normal cars are diesel here, they are so heavily penalised by the tax system.

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