TORONTO, (Nov. 8, 2004) — Rival truck and engine OEMs south of the border are uniting under the umbrella of the American Trucking Associations to develop a consensus on possible ’07 engine incentives for truck buyers.

The group wants to finalize an incentives plan to encourage the purchase of more expensive, EPA-mandated low-emissions engines. The ATA hopes to take a formal case to Capitol Hill by the end of this year or early 2005. Some of the possibilities being discussed include tax credits, purchase rebates, or purchase credits. Another plan being floated involves accelerated depreciation.

“We believe a package of government incentives will make new ’07 engines more attractive to truck operators and might encourage faster market acceptance,” Freightliner CEO Rainer Schmueckle said in a conference call to trucking journalists recently. “Such incentives would help, at least initially, to offset the increased purchase and operating costs of the new engines, while at the same time limiting disruption in the truck manufacturing and supply industries.”

The new round of emission rules — which reduce the NOx limit to 0.2 g/bhp-hr from the 2004 level of just above 2 g/bhp-hr — are even tougher than the original standards put in place Oct. ’02. At that time, thousands of carriers and owner-operators inflated the sales market by “pre-buying” trucks before the rules took effect. Many industry analysts fear the same result if something isn’t done to cushion the high costs of the ’07 engines.

Also concerned over another possible pre-buy, the U.S. General Accounting Office — an investigative watchdog to Congress — released a report earlier this year that made several proposals to help avoid some of the pitfalls the trucking industry experienced in 2002.

A major GAO recommendation suggested the creation of an independent review panel that would explore, among other things, the possibility of financial incentives for truckers to offset the high compliance costs of the stringent ’07 emission rules.

With much of the attention swinging away from technological concerns, the movement for incentives should begin picking up steam, says Patrick Charbonneau, International Truck and Engine’s vice-president of regulatory and technology affairs. “Now that there’s consistency among the (OEMs) on technology — which is essentially an evolution of the ’02 and ’04 product — the swamp has been drained, and the major concern for everybody has switched to figuring out how to reduce the impact (of cost),” he told Today’s Trucking.

At home, the Canadian Trucking Alliance is taking a similar message to Ottawa. The CTA reviewed with the Minister of the Environment Stephane Dion pre-buy events of 2002 and the incentive movement in the U.S. The truck group hopes the minister will act as a champion on this cause, and bring some needed relief to the Canadian industry as well.

The CTA is also pressing the Ministry of Finance to agree on a proposal to accelerate the rate at which trucking equipment can be depreciated for tax purposes. Stephen Laskowski, CTA associate vice-president, says an adjustment of Canadian capital cost allowance (CCA) rates for equipment to bring them into line with rates in the U.S., is another way the industry could offset ’07 engine costs.