What will be the impact of the proposed fuel efficiency standards?
November 1, 2010
Heavy-and medium-duty trucks in the US are about to get cleaner and more fuel-efficient. The first national standards to reduce greenhouse gas (GHG) emissions and improve fuel efficiency of the workho...
Heavy-and medium-duty trucks in the US are about to get cleaner and more fuel-efficient. The first national standards to reduce greenhouse gas (GHG) emissions and improve fuel efficiency of the workhorses on US highways were announced in October by the US Environmental Protection Agency (EPA) and the US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA).
EPA and NHTSA are proposing new standards for three categories of heavy trucks: combination tractors, heavy-duty pickups and vans, and vocational vehicles. The categories were established to address specific challenges for manufacturers in each area. For combination tractors, the agencies are proposing engine and vehicle standards that begin in the 2014 model year and achieve up to a 20% reduction in CO2 emissions and fuel consumption by the 2018 model year.
For vocational vehicles, the agencies are proposing engine and vehicle standards starting in the 2014 model year that would achieve up to a 10% reduction in fuel consumption and CO2 emissions by the 2018 model year.
The Obama government already has set new rules for cars and light trucks requiring 35.5 mpg by 2016 and proposed as high as 62 mpg by 2025.
The national program, announced jointly by EPA Administrator Lisa P. Jackson and Transportation Secretary Ray LaHood, is projected to reduce GHG emissions by nearly 250 million metric tonnes and save 500 million barrels of oil over the lives of the vehicles produced within the program’s first five years.
Calling it a “win-win-win” for the environment, businesses and the American consumer, LaHood said through the new fuel efficiency standards, “We will not only reduce transportation’s environmental impact, we’ll reduce the cost of transporting freight.”
Jackson said the proposed regulations provide a steady improvement in fuel efficiency aimed at quick payoffs.
“In addition to cutting greenhouse gas pollution, greater fuel economy will shrink fuel costs for small businesses that depend on pickups and heavy-duty vehicles, shipping companies and cities and towns with fleets of these vehicles. Those savings can be invested in new jobs at home, rather than heading overseas and increasing our dependence on foreign oil,” she said.
Overall, NHTSA and EPA estimate that the heavy-duty national program would provide $41 billion in net benefits over the lifetime of model year 2014 to 2018 vehicles. With the potential for significant fuel efficiency gains, ranging from 7%-20%, drivers and operators could expect to net significant savings over the long term, the agencies say. For example, it is estimated an operator of a semi-truck could pay for the technology upgrades in under a year, and save as much as $74,000 over the truck’s useful life. Vehicles with lower annual miles would typically experience longer payback periods, up to four or five years, but would still reap cost-savings.
EPA and NHTSA are providing a 60- day comment period that begins when the proposal is published in the Federal Register. The rules, with whatever changes are made following this comment period, are expected to be final next summer.
Initial industry reaction was mainly positive. The following is a statement from the American Truck Dealers: “Dealers support improving fuel economy for medium-and heavy-duty trucks,” said Kyle Treadway, chairman of the American Truck Dealers (ATD) and owner of Kenworth Sales Company in Salt Lake City, Utah. “To its credit, the administration clearly is attempting to tailor its mandates to specific vehicle subclasses and to each manufacturer’s unique production. Compliance flexibility will be essential to the national truck fuel efficiency program’s success and its ability to prevent an unworkable patchwork of State-by- State mandates.”
Truck and engine manufacturers did not appear fazed by the new requirements.
“For some time now, Cummins has advocated for consistent and responsible regulations that recognize the needs of business, offer clear direction and provide incentives to companies that create innovative technologies as well as jobs in this country,” said Cummins engine business president Rich Freeland. “Such regulations also add real value to our customers, as better fuel economy lowers their operating costs while significantly benefitting the environment. We look forward to working with the EPA, DOT and other stakeholders in developing the final rule.”
But while manufacturers felt the fuel efficiency targets were attainable, there was some concern about the reporting burden this may place on OEMs. In a meeting with media, Navistar chairman, president and CEO Dan Ustian said, “What we worry about is not that it can’t be done; it can be met easily. We worry about the measuring device and the work to prove it will be a burden to all companies. We don’t think it’s a big deal except for maybe keeping track of it all.”
Ustian said OEMs may work together to ensure Washington doesn’t make the program too onerous on manufacturers.
During the joint EPA/NHTSA press conference, Jackson stressed that the government is concerned only with setting a consistent and national standard. How truck manufacturers choose to meet that standard -whether through improved engine technology, tire design, aerodynamics or a combination of these and other advancements -will be up to them.
“As we give one consistent national standard, truck manufacturers will rise to find the next level of improvement. We don’t want to pick a winner in terms of technology,” Jackson said.
Treadway, however, was concerned the fuel economy proposal would add thousands of dollars to the cost per truck.
“These first-ever truck rules will govern how new medium-and heavy-duty trucks are built for sale. If technologically feasible and economically practical, they should result in vehicles that commercial fleets, owner/operators and small businesses will want to buy, at prices they can afford. If not, truck dealers, their employees and the economy in general will suffer without environmental and national security benefits being achieved,” Treadway said. “We are concerned that this could price some buyers out of the market.”
When asked during the press conference whether incentives would be put in place to boost the adoption of more fuel-efficient technologies, a senior government official appeared non-committal, focusing instead on the money to be saved through quick payback for the investments made.
The American Trucking Associations, meanwhile, recently adopted a new policy stating that “carbon emission reduction achieved through national truck fuel economy standards are preferable to government actions that increase fuel prices in an effort to discourage petroleum-based diesel fuel consumption or mandate the use of alternative fuels.”
And Jed Mandel, president of the Engine Manufacturers Association, said in a statement: “Because improved efficiency also results in lower greenhouse gas emissions, engine and truck manufacturers’ efforts to improve fuel efficiency for our customers align well with the overall goals of the regulation proposed today.”
Allen Schaeffer, executive director of the non-profit Diesel Technology Forum, seized on the announcement as indication there is a future for clean diesel power as the proposal does not include mention of alternative fuels.
“This proposal clearly envisions clean diesel power as the centrepiece of freight transportation in the clean energy economy of tomorrow,” Schaeffer said. “For all parties, the challenge of increasing fuel efficiency while maintaining or improving environmental (?), safety and productivity of commercial vehicles is as important as it is complex. It is fitting that a key solution for solving this challenge lies in the diesel engine.”
More than 95% of all heavy-duty trucks are diesel-powered as are a majority of medium- duty trucks.
Jackson characterized the proposed standards as a “transition to greater energy efficiency and lower carbon emissions,” once
again emphasizing the government wants to leave it to the industry to decide which technologies or fuels are best to use to meet the new standards.
The proposed rules also don’t address trailers, which could further improve fuel efficiency. EPA’s Jackson said the decision was made to steer away from trailers in the initial rulemaking because the two government agencies involved had very little experience regulating trailers and the manufacturers involved had little experience dealing with fuel efficiency design issues. She added that although the proposed rules focus on “what is currently possible,” trailer design and its contribution to fuel efficiency is something that could be considered in the future.
To help Canadian truckers understand how the proposed rules will affect them, the Canadian Trucking Alliance published a preliminary summary of the US Notice of Proposed Rulemaking.