Industry Issues: Exempt anti-idling device fuel from taxes

by David Bradley

Last month in my column I talked about CTA’s enviroTruck proposal for reducing smog and GHG emissions through federal financial incentives.

However, there is also a significant role for the provinces (and the individual US states) to play. One area where this is so, is with regard to fuel drawn from the main engine of a truck but not used to propel the main truck engine.

Many jurisdictions already exempt fuel from taxation that is used, for example, to power reefer units or power take-off (PTO) units like blowers on tankers for example. However, the same consideration has up until now rarely given to fuel used to power anti-idling devices.

Recently, Gov. Bill Graves, president of the American Trucking Associations, and I sent a joint letter to all of the state and provincial administrators of the International Fuel Tax Agreement (IFTA) urging all jurisdictions to seriously consider adopting legislation that would provide a full exemption from fuel, sales and use taxation for fuel used in an auxiliary power units (APUs) or similar devices used as an alternative to engine idling on a heavy commercial vehicle.

A few US states already provide such an exemption. No Canadian provinces currently do.

The primary reason for main engine idling in longhaul trucks is cab comfort – that is, heating and cooling when the driver is resting or sleeping in the vehicle.

Several technologies are available that can reduce this idling by as much as 90%.

The US Environmental Protection Agency (EPA) estimates that the use of idle-reduction technology could reduce the fuel consumption of a long-haul tractor by some 1,900 gallons or 7,200 litres per year – which equates to an emissions reduction of greenhouse gases of some 42,000 pounds or 19 metric tonnes – as well as significant reductions in various other emissions deleterious to environmental quality.

Using a heavy-duty truck engine to power the heating and cooling of a truck cab is inefficient and environmentally unsound.

For this reason, carriers have begun to purchase APUs which, mounted externally on the truck cab, can perform these functions in place of the main engine.

These products may be referred to generically as diesel-driven heating systems or generator sets, as well as APUs.

Whatever they are called, these units typically consist of a combination of a small combustion engine and a generator that can provide power to the truck when the main engine is shut off. Fuel is sourced from the main engine and vehicle fuel tank.

The cost of an APU varies with type of device, anywhere from US$6,000 to a top price of perhaps $10,000, with an average of about $7,750.

Likewise, the fuel consumption of an APU will vary, but may be estimated for an over-the-road operation at 500 gallons or 1,900 liters a year.

At the average state fuel tax rate of about 22 cents per gallon and provincial rate of 15 cents a liter, an exemption would represent a tax savings of more than US$100 a year – or $280 Canadian.

Coupled with operational savings, this is a significant incentive for installing an APU.

Time will tell if, or how many jurisdictions heed the ATA and CTA proposal.

However, if state and provincial governments are serious about encouraging the trucking industry to assist in air quality improvement and reducing the emissions of greenhouse gases, then this proposal is worthy of consideration.

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

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