GHG Phase II: 10 key points in the proposed truck standards

The next phase of the federal government’s plan to reduce greenhouse gas (GHG) emissions by setting fuel efficiency standards for commercial vehicles was released Friday.

The U.S. Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) proposed the standards for medium- and heavy-duty vehicles meant to reduce the impacts of climate change. The proposed standards, for model years 2021-2027, are expected to lower CO2 emissions by approximately 1 billion metric tons, cut fuel costs by about $170 billion, and reduce oil consumption by up to 1.8 billion barrels over the lifetime of the vehicles sold under the program.

1. Why?

As National Highway Safety Administration Mark Rosekind opened the press conference to announce the standard, the Obama Administration is committed to act on climate change “before the planet is beyond fixing,” as the president promised two years ago when he revealed his Climate Action Plan.

The CAP was billed as a “blueprint” for reducing carbon emissions, and the administration has taken steps to use the power of the executive branch to enact a number of reforms. A fuel efficiency standard for commercial vehicles is one of those initiatives.

2. Why trucking?

According to the government, heavy-duty trucks are the second largest and fastest growing segment of the U.S. transportation sector in terms of emissions and energy use.

Medium- and heavy-duty vehicles currently account for about 20 percent of GHG emissions and oil use in the U.S. transportation sector, but are only about 5 percent of the vehicles on the road. And, as the industry routinely cites, trucking hauls about 70 percent of all freight in the U.S.

3. What does fuel consumption have to do with GHG?

Simply, burning diesel and gasoline puts CO2 into the atmosphere. The less fuel a vehicle burns, the less CO2 is emitted. The program would save approximately 1.8 billion barrels of oil, or 75 billion gallons of fuel, over the lifetime of the vehicles subject to these standards.

Those oil savings would exceed a year’s worth of U.S. imports from OPEC.

4. What are the trucking goals?

Peppered with questions from the press about what the Phase II standards mean in terms of improved MPGs, EPA Acting Asst. Administrator Janet McCabe insisted that such a measurement is meaningless for the many trucks and applications covered under the proposal. For highway tractors, the key is “freight efficiency,” or the amount of freight that can be hauled per mile, per gallon of fuel. In 2027, EPA estimates the average line-haul truck would achieve a 50% improvement, with that potentially rising to 90% with the development and adoption an new, more efficient technologies.

(Experts at the Environmental Defense Fund put the 2027 goal at about 9.5 mpg for highway tractor-trailers, compared to about 6 mpg in 2010.)

More precisely, the metric for compliance under the standard will be a grams/mile emissions rate. In 2027 when the standard is fully phased in, heavy-duty vehicles across all classes would achieve up to the following CO2 emissions and fuel use reductions:

24% for combination tractors designed to pull trailers and move freight when compared to Phase I standards
8% for trailers when compared to an average model year 2017 trailer
16% for vocational vehicles when compared to Phase I standards, and
16% for pick-up trucks and light vans when compared to Phase I standards.

5. Just where are these impressive improvements going to come from?

According to the proposal, the goals can be met with “cost-effective” technology that’s already available, or that is currently in development.

Additionally, the standards do not mandate the use of specific technologies. Rather they establish standards achievable through a range of technology options, and allow manufacturers to choose those technologies that work best for their products and for their customers, the government says.

Broadly, for example, these technologies include improved transmissions, engine combustion optimization, aerodynamic improvements and low rolling resistance tires.

6. How much is all of this going to cost a truck buyer?

The cost, arguably, is the good news for truck operators. Unlike EPA emissions regulations aimed at NOx and diesel particulates—for which costly new technologies had to be developed, and these negatively impacted reliability and fuel efficiency—the required improvement is expected to immediately begin to pay for itself in reduced fuel expense.

There are, of course, many details to come and some unforeseen market dynamics likely at work over the next decade—and that initial purchase price is still going to have to be financed.

Given rough estimates of $10,000 to $12,000 added cost to tractor-trailers, and less for smaller vehicles, EPA puts the payback in model year 2027 at

Two years for a tractor/trailer combo;
Three years for pick-ups and vans; and
Six years for a vocational vehicles.

7. Why trailers?

Simply, trailers pulled by combination tractors are part of that vehicle, and trailers contribute significantly to carbon pollution emissions, and to the vehicle’s fuel consumption, EPA says. Cost-effective technologies, including aerodynamic devices, low rolling-resistance tires, and automatic tire inflation systems can offer significant CO2 emissions and fuel use reductions for the vehicle.

Because EPA and DOT each have statutory responsibilities related to the matter, the agencies say they worked very closely to ensure that EPA’s CO2 proposed regulations and NHTSA’s proposed fuel efficiency regulations are fully harmonized. The agencies also propose that manufacturers would submit a single report to show compliance with both programs.

The proposed standards would apply to certain trailer types beginning in MY 2018 for EPA’s standards, and would be voluntary for NHTSA from 2018 to 2020, with mandatory standard beginning in 2021. The proposed standards would extend to more trailer types in MY 2021.

The fully-phased standards would apply to five categories of trailers:
Long (longer than 50 feet) highway box trailers - dry vans;
Long highway box trailers - refrigerated vans;
Short (50 feet and shorter) highway box trailers - dry vans;
Short highway box trailers - refrigerated vans; and
Non-box highway trailers.

8. Why engine standards?

As with the Phase I program, the agencies are proposing separate standards and test cycles for tractor engines, vocational diesel engines, and vocational gasoline engines—standards that some truck makers have suggested will complicate matters when it comes time to assess the complete vehicle.

For diesel engines, the proposed standards would begin in model year 2021 and phase in to MY 2027, with interim standards in MY 2024. They are also proposing a revised test cycle weighting for tractor engines to better reflect actual in-use operation.

The proposed diesel engine standards would reduce CO2 emissions and fuel consumption by up to 4% compared to Phase I. Technologies that could be used to meet the standards include: combustion optimization; improved air handling; reduced friction within the engine; improved emissions after-treatment technologies; and waste heat recovery.

9. Who wins?

The big picture benefits depend on how one feels about anthropogenic climate change, and how much one values the survival of civilization generations hence. But since global warming is an Obama administration priority, and since the White House gets to set the rules and do the math, here are the numbers used to justify the GHG proposal:

The program would cut carbon pollution by about 1 billion metric tons, roughly equivalent to the GHG emissions associated with the electricity and power use from all U.S. residences for one year.
The program would save vehicle owners $170 billion in fuel costs over the lifetime of the vehicles sold.
When fuel savings bring down the costs of transporting goods, the average household could save nearly $150 a year by 2030 and $275 by 2040 assuming all savings and costs are passed through to consumers.
In total, the program would result in about $230 billion in net benefits to society over the lifetime of vehicles sold under the program.
The benefits to society outweigh costs over the lifetime of vehicles sold under the program by about 10 to 1.