Euro 2M diesel is now here in Malaysia ahead of the 1st September 2009 schedule. It is priced at RM1.70 per litre. You will be able to find it at all Petronas stations from the 1st onwards in the form of the new Petronas Dynamic Diesel, that’s sold with an additive Petronas calls SINAR D07. Petronas says the previous additive introduced in 2006 was known as SINAR D05.

The new Petronas Dynamic Diesel meets Euro 2M standards, which means a maximum of 500ppm of sulphur in the fuel. This is a huge improvement over the previous standard which limited sulphur content to 3000ppm. But don’t think all diesels were that high in sulphur all this while – a research by Petronas which I pointed to back in 2007 showed that out of 6 brands of diesel at that time (2004), only one had 2800 ppm of sulphur, with the rest ranging from as low as 200 ppm to 500 ppm.

BMW 320d Badge

The availability of Euro 2M diesel fuel may spark an interest in both the car manufacturers and consumers to offer diesel versions of passenger cars and buy these diesel-powered products respectively. However one problem would be the fact that most modern diesel engines are designed to run on Euro 3 (350ppm), so the new Euro 2 diesel may still not be good enough. Euro 4 requires 50ppm, and Singaporean diesel such as Shell ULSD is already compliant.

Companies that are confident of a big enough volume might be willing to do some modifications to suit our market and it is very likely that this will only happen at the more expensive segments where the margins are larger and easier to justify. For cheaper cars, consumers may not be confident enough in diesel cars and most may still shy away from the benefits of a turbodiesel because of the certain negative characteristics of a diesel engine such as the sound and smell.

The worst part is that even for those who are very eager to try diesel cars for the economy it offers, the norm is for diesel powerplants to cost more than a petrol engine, so this may drive up the prices of diesel-engined models to a level too shocking for the budget-conscious consumers at that level to accept.

The BMW 320d Touring was offered here by BMW Malaysia Sdn Bhd when the E90/E91 3-Series was first launched. This model is now gone when the facelift was introduced as response was low.

In the second hand car market, the new diesel may spark a new interest in second hand diesel-powered luxury cars cars such as the Mercedes-Benz E270 CDI or the BMW 530d as a powerful and fuel efficient alternative.

The E270 CDI can be found priced at a good 15% to 20% cheaper than its petrol-powered siblings of the same year and the massive low-end torque of a turbodiesel suits the kind of relaxed drive that an E-Class buyer typically looks for.

We will see more fuel companies launching their improved Euro 2 diesels over the next few days leading up to the 1st September 2009 deadline for the new standard to be introduced. The fuel companies will definitely take this opportunity to rebrand their fuels.