Industry Issues: EnviroTruck – an idea whose time has come

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The past year has been a monumental one in terms of bringing the trucking industry to the cusp of historic reductions in smog and GHG emissions.

A new generation of smog-free trucks has been mandated in Canada starting with the 2007 model year. Between 2007 and 2010 the emissions of particulate matter (PM) and nitrogen oxides (NOx) will be virtually eliminated.

In October 2006, a new ultra low-sulfur diesel fuel (ULSD) standard was introduced which mandated a reduction in the sulfur content of truck diesel from 500 ppm to 15 ppm.

This new ULSD was required to work with the new smog-free engines.

To date, trucking is the only freight mode to see its engine and fuel emissions so regulated.

However, there are obstacles to the uptake of the new equipment. For starters, the purchase price of the 2007 model year engines is about $8,000 higher than previous models. This has been dubbed by some of the truck/engine manufacturers as an “environmental surcharge.”

Also, while the new engines will virtually reduce smog emissions from heavy trucks, both the new engines and the new truck diesel are less fuel efficient than pre-2007 engines and pre-2006 diesel fuel.

The fuel efficiency “penalties” associated with the new engines and the new ULSD mean that while the new generation of truck engines and fuels will make a major contribution to air quality improvement, the industry’s GHG performance could suffer.

These two factors combined to cause a major pre-buy binge in 2006, which has been followed by a collapse in the manufacture and purchase of 2007 model year equipment.

The challenge is to accelerate the penetration of the new smog-free engines into the marketplace and to allow/assist the industry in regaining/increasing its fuel efficiency in order to reduce GHG emissions. In 2006, the Canadian Trucking Alliance unveiled a 14-point environmental strategy to accomplish this in a document entitled Trucking Industry Proposals for a Made in Canada Clean Air Act.

Combined, the CTA proposals would contribute to a 140 million kg reduction in NOx emissions or the equivalent air quality impact of removing almost 90,000 trucks off the road; 3 million kg reduction in PM emissions or the air quality equivalent of removing over 100,000 trucks from the road; and almost 11 million metric tonne reduction in GHG emissions or the equivalent of removing over 45,000 trucks from the road.

CTA is now calling upon the Government of Canada to work with us, and industry equipment manufacturers to develop a strategy – which we are calling the EnviroTruck Program – to create a cohesive and practical approach to accelerating the purchase or lease of the new, mandatory, smog-free trucks and proven technologies and devices to reduce fuel consumption leading to lower GHG emissions through meaningful financial incentives.

The program would be consistent with programs that already exist in Canada and the US. The 2007 Canadian federal budget created a rebate system for fuel efficient light-duty vehicles – Vehicle Efficiency Incentive (VEI) – which offers a rebate of up to $2,000 for the purchase of a new fuel-efficient vehicle. In April 2007 the US EPA (through its SmartWay truck program) entered into a joint venture with major US truck manufacturers (Freightliner, International, Kenworth, Mack, Peterbilt, and Volvo) to offer US customers a SmartWay-certified 2007 model year truck that includes the new generation of smog-free truck engines and is equipped with optional devices and technologies aimed at improving fuel efficiency and reducing GHG emissions. An auditable system of vehicle models deemed to meet the environmental criteria has been developed by the truck makers. The US EPA is on record as supporting financial incentives.

An EnviroTruck configuration would include: (1) A 2007 (and newer) heavy truck engine; plus (2) A combination – depending on the type of vehicle/operation – of various fuel conservation enhancing devices such as those listed in CTA’s Made in Canada Clean Air Act submission (e.g., speed limiter activation, auxiliary power units to eliminate truck idling, fuel efficient wide-base single tires, aerodynamic enhancements such as but not limited to boat tails, longer length double trailer configurations, etc.

It is to be understood that the number, type and combination of fuel consumption enhancement devices utilized by a carrier will be impacted by operating conditions (weights, type of trailer, geography) and provincial regulations (e.g., vehicle weights and dimensions standards). Therefore, some flexibility to choose amongst various devices will be required to ensure as many trucks as possible can participate in the program.

The success of the program will ultimately hinge on the incentives available to the industry to help defray the costs of purchasing/leasing EnviroTruck vehicles. Existing programs, like eco-Freight ($10 million, all modes) are insufficient to provide an appropriate stimulus. The type of incentive could be either financial or tax-related. However, given the low margins that persist in the trucking industry, financial incentives such as grants or rebates on the purchase of an EnviroTruck (consistent with the federal government’s VEI program for light duty vehicles and the former rebate program for anti-idling devices (NRCAN) would be preferred and likely have the most impact.

Were tax incentives (e.g., tax credits, accelerated CCA rates) to be considered, they would have to be of sufficient scale – along the lines of the write-offs provided to manufacturers in the 2007 budget or a 100% write-off for add-on devices – to provide meaningful incentive.

There will be a shared payback to both industry and the government. The payback to industry will be the opportunity for improved fuel efficiency. For government it will be an accelerated environmental benefit in terms of reduced smog emissions and lower GHG emissions.

– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.

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