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A new standard: Governments look to mandate fuel economy standards for heavy trucks

WASHINGTON, D.C. -- In a much-anticipated move, US President Barack Obama announced May 21 that heavy tru...

WASHINGTON, D.C. — In a much-anticipated move, US President Barack Obama announced May 21 that heavy truck manufacturers will have to meet minimum fuel economy standards, beginning with the 2014 model year.

Specific details on the targets, and just how truck manufacturers will meet them, remain unclear, but the US president said the benefits of more fuel-efficient trucks will be far-reaching.

“This will bring down costs for transporting goods, serving businesses and consumers alike,” said President Obama. “It will reduce pollution. And, just like the rule concerning cars, this standard will spur growth in the clean energy sector. We know how important that is. We know that our dependence on foreign oil endangers our security and our economy. We know that climate change poses a threat to our way of life – in fact we are already beginning to see its profound and costly impact. And we know that our economic future depends on our leadership in the industries of the future.”

The announcement comes on the heels of the roll-out of the latest generation of smog-free, EPA2010-compliant engines, which have added about $10,000 the cost of a new Class 8 truck. Yet, truck and engine manufacturers seem ready to face the new challenge head-on – and several were present at the White House when the new standards were announced, Mack and Volvo CEO Denny Slagle among them.

“We would have liked to have had a breather on this,” he admitted during a roundtable discussion with trucking trade press editors in Virginia just days after the announcement. “We are now putting out almost zero emissions after 10 years of very hard work and a lot of resources directed towards that emissions challenge, and I would’ve loved to have a breather, particularly on the R&D level to do some other things to the truck. But the times demand that we focus now on CO2 and we would rather be part of the whole process and the whole dialogue with the (Obama) Administration. We’re comfortable with what was signed last week. It was a good document but it’s very conceptual at this stage.”

Other manufacturers as well seem unfazed by the impending targets.

“Regulations that recognize the needs of business, offer clear direction and provide incentives to companies that create innovative technologies have the power to significantly benefit the environment while creating jobs in this country,” added Cummins CEO Tim Solso, who was also at the announcement.

It’s expected fuel economy will be required to improve by up to 25% by 2018 under the impending rules, but it’s not yet clear what will be used as a baseline.

Manufacturers are hopeful the targets will be attainable using existing technologies, such as low-rolling resitance tires and aerodynamic fairings.

“One of the agreed-upon terms was that we would at least start with focusing on existing technologies,” Slagle said. “Existing technologies help us (meet the targets) and we think we can get there based on what’s on the drawing board (already) and taking existing technologies a little further.”

It may mean, however, that customers will have no choice but to spec’ proven fuel-saving equipment that is optional today.

“I don’t know if it can all be achieved through more aerodynamics or better, more efficient engines,” Slagle admitted. “I think some of it is going to involve acquiring different types of optional equipment that may have to become standard.”

It’s also not yet clear how the Administration will enforce the new standards. For instance, will the compliance responsibility rest with the manufacturer or operator? Will every truck an OEM builds have to meet the standard or will the targets be applied across the average of a manufacturer’s product line? Or, if it’s up to the end user to meet the targets, will a fleet be required to maintain a certain percentage of aerodynamic, fuel-efficient trucks in its fleet? If so, how will that affect the single truck owner/operator? All those details are being worked out, but Tony Greszler, vice-president of government and industry relations with Volvo, said it’s expected the rules will be imposed on the OEMs. Does that spell the end of the classic-styled, long and tall tractor?

“That could be a casualty of what we’re talking about,” Slagle admitted.

Here in Canada, it was feared the Harper government would simply adopt the US standards, without consideration of our unique operating requirements, including more liberal weight allowances. Just hours after Obama announced the US mandate, Canada’s Environment Minister Jim Prentice lent credence to those fears.

“Just like passenger vehicles, manufacturers of heavy-duty trucks operate in an integrated North American market-so a closely-harmonized approach makes sense for them,” Prentice told reporters in B.C. Prentice also told reporters he would work with the Canadian trucking industry to develop standards that would be implemented in line with the US mandate.

The Canadian Trucking Alliance’s (CTA) assessment of the US announcement and Prentice’s remarks was that “the devil is in the details.”

“Today’s announcement will hopefully lead to technology, regulatory and taxation reforms that will help eliminate the fuel efficiencies lost by heavy trucks over the last few years because of federal smog control regulations,” said Stephen Laskowski, senior vice-president of the CTA. “Fuel is either the first or second leading cost for a trucking company, so intuitively a regulation designed to reduce this cost should be welcomed by our sector, but the devil will be in the details.”

The CTA is quick to point out the trucking industry is not “homogenous” and that fuel standards can’t be slapped uniformly across all segments of the industry. Sizes and weights vary by province and state, Laskowski pointed out, and a one-size-fits-all approach is not feasible. Instead, the CTA would like to see the federal government provide incentives to encourage the adoption of fuel-saving technologies. The CTA says it has been assured by Environment Canada that it will be involved in developing the Canadian requirements.

“CTA looks forward to working with Environment Canada to develop a fuel efficiency regulation that is realistic, practical and provides incentives for quicker adoption,” Laskowski said.

In the US, the agreement noted the new standards must not hinder the trucking industry’s ability to conduct business.

“There is an understanding that there is sensitivity to reasonable commercial standards, that we don’t do crazy things that cost jobs and create chaos in the industry with extra costs people can’t bear,” said Slagle. “That understanding is in the document.”

The irony of government-imposed fuel economy standards for heavy trucks coming on the heels of emissions requirements that in some cases actually reduced fuel economy, was not lost on Slagle, who wondered whether the impending targets would have already been met if not for the stringent EPA emissions standards.

“What would our truck look like today if we had no emissions standards over the last 10 years?” he pondered. “I think on its own intertia, a lot of the fuel efficiency and emissions (targets) would have been accomplished. (Emissions regulations) did suck a lot of oxygen out of the R&D budget. It’s possible we would have been further along with (natural) gas, for example.”

Nonetheless, Slagle said Volvo Group will not shy away from the latest challenge, noting environmental care is one of the company’s core values.

“We are already working hard on improving fuel efficiency and at the end of the day, the best way to reduce greenhouse gases is to not burn as much fuel,” Slagle said. “It’s not terribly invasive to us, we already have plenty of great ideas on the drawing board.”


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