Studio Guest – Christine Schweikert on high energy prices

Our studio guest Christine Schweikert is a raw materials expert from BHF Bank in Frankfurt. DW-TV: For more on the changes in global raw materials markets I am joined by Christine Schweikert. She is a raw materials expert from BHF Bank in Frankfurt. Mrs. Schweikert, are you still driving a car? Christine Schweikert: Well, I do still drive, but I'm telling you, my brother-in-law has started cycling to work and that is significant anecdotal evidence that there's been a shift in demand. DW-TV: Why is there an increasing demand for diesel fuel as I suppose there must be when prices are going up? Christine Schweikert: It's a combination of supply and demand factors. We've got somewhat restricted supply of refinery capacity for diesel in Europe, so to some extent we have to import diesel. And on the demand side: we don't just have German consumers buying diesel cars like crazy but also a global demand for diesel, especially in China, where diesel imports have been really high this year. One reason is the Olympics and the other is that they have to replace coal power plants and actually create electricity with diesel. DW-TV: So why are German auto makers fearful of losing market share when things are going so well? Christine Schweikert: Well, for the diesel part of the market it's obviously a problem that people have bought diesel cars because diesel is cheaper than petrol because it isn't anymore. So where's the reason for buying a diesel car? That's one reason, and the other is that obviously when petrol prices go up, people do tend to shift – they take the train, buy cars with lower fuel consumption. there is a demand reaction and the carmakers have to react to that. DW-TV: In Germany we're already seeing a decrease in diesel sales of almost 2 percent in the first 4 months of this year, from 47.7 to 45.9 per cent. So, is this going to be the beginning of the end of diesel technology? Christine Schweikert: I don't think the end is close, but I do think we will see some levelling off in diesel demand here. Because a lot of analysts are thinking that diesel will be priced a lot higher than petrol for a long time into the future – so that will have an impact on the diesel market. DW-TV: Mercedes is trying to introduce its latest diesel engines under a new label. They call it BlueTec. Is that a promising approach to the overall problem? Christine Schweikert: It is an interesting path to go – but I think the overall problem is that energy is very expensive and that carmakers will have to go in other directions – to replace or at least supplement it with other technology and fuels DW-TV: What new technologies do you see on the horizon? Christine Schweikert: On the one hand we have the different fuels, but here we have a different problem because they come from food, so there we have the debate food versus driving. But there are second generation fuels like biomass to liquids (BTL) where you use wood or straw to make petrol that's a promising technology, and the other thing is to go away from that and use power-operated cars – the hydrogen direction. Nothing is there yet that can replace anything on a grand scale, but that's the direction we will be looking at, and that's what higher prices will cause. (Interview: Oliver Mojen)

DW-World | June 3, 2008

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