Big trucks brace for new fuel efficiency standards

Source: Camille von Kaenel, E&E reporter • Posted: Tuesday, August 16, 2016

The Obama administration is tackling greenhouse gas emissions from trucks this week in one of its last regulatory actions on climate change.

U.S. EPA and the National Highway Traffic Safety Administration are expected to release their greenhouse gas emissions and fuel efficiency standards for medium- and heavy-duty engines and vehicles for model years 2018 through 2027.

Medium- and heavy-duty trucks are responsible for 23 percent of the greenhouse gas emissions from the transportation sector, but they make up 5 percent of the vehicles on the roads. Since 1990, the emissions from medium- and heavy-duty vehicles have grown eight times faster than those from light-duty vehicles like passenger cars, which have their own standards.

The new rule could avoid 1 billion metric tons of carbon dioxide emissions over the lifetime of the vehicles, according to the administration. That’s more than the yearly emissions of 290 coal-fired power plants.

The standards will apply to tractor-trailers for the first time as well as delivery vans, large pickups and other medium- and heavy-duty trucks. An earlier version of the standards covers 2014 to 2018.

President Obama mentioned the upcoming rule Saturday in his weekly address. Calling climate change “one of the most urgent challenges of our time,” he named the regulatory effort as the latest in a string of key domestic and international measures to curb rising emissions.

“There’s still much more to do. But there’s no doubt that America has become a global leader in the fight against climate change,” Obama said.

Industry: ‘We absolutely cannot support any increase’

The final rule is expected to be slightly more stringent than a draft proposal, splitting industry and environmentalists.

The debate around the standards has grown increasingly polarized in recent months. Some manufacturers, facing economic pressure, have opposed any increase in stringency. Environmentalists have argued that tighter standards are technologically feasible, and California regulators have suggested they might enact a tougher rule on their own.

Major changes from the draft rule, which requires an improvement of 36 percent in fuel efficiency by 2027, are unlikely, according to multiple sources. But the standards for engines will be slightly tweaked, they said. The final rule will require an improvement in engine efficiency of around 5 percent, an increase from the original 4.2 percent.

The change comes mostly because of technical fixes and updates to testing procedures. It is unlikely to make a significant change to projected greenhouse gas emissions and fuel savings, said environmental advocates.

But it has upset the industry. Major manufacturers say they support the standards but oppose any increase in stringency. Their growing resistance represents a shift since the release of the first set of standards in 2011, which received wide applause, and since they made cautiously supportive comments on the draft proposal last year.

Daimler AG, Navistar International Corp., PACCAR Inc. and Volvo Group, the four major manufacturers of heavy-duty vehicles, outlined their concerns in a letter to EPA Administrator Gina McCarthy in July, after the rules were sent to the Office of Management and Budget for review.

Spokespeople for the companies said the letter still reflects their views and would not comment further before the final rule is released.

“We absolutely cannot support any increase in the already very aggressive standards — both engine standards and vehicle standards — beyond those outlined in the proposal,” the truck manufacturers wrote.

Low fuel prices unanticipated by the agencies will mean it will take longer to see the benefits of new, expensive technology in fuel economy, they argued.

Technological steps

They also fear that fleet owners will rush to buy vehicles now, before the looming standards push up prices. They cite a report by the Americas Commercial Transportation Research Co. suggesting significant market distortions as a result.

Dave Cooke, a senior vehicles analyst at the Union of Concerned Scientists, called the manufacturers’ arguments “misinformation.”

“We’ve been a little surprised at this,” he said. “I don’t believe the rule is more technology-forcing than before.”

The engine standard, even with the expected increase in stringency, would require less improvement than the first phase of the standards from 2014 to 2018.

The standards would not require radical changes in heavy-duty vehicle technology like electrification. But they would encourage tweaks like better aerodynamics, start-stop technology or mild hybridization.

Cummins Inc., which supplies engines, said in its comments to the agency that available technology could exceed the proposed engine standard. It argued against a decrease in stringency.

The firm belongs to the Heavy Duty Fuel Efficiency Leadership Group, made up of Eaton Corp., FedEx Corp., PepsiCo, Wabash National Corp. and Waste Management Inc., which has backed the standards.

Tighter standards from Calif.?

A recent report by clean transportation industry group CALSTART identified 255 suppliers of low-carbon technology for heavy-duty vehicles in 40 states.

Eaton has specialized in manufacturing lighter and higher-efficiency transmissions for heavy-duty vehicles.

“We always knew we needed to bring more fuel efficient technology to the market, but it was linked to the price of fuel, and today, there’s less pressure,” said Mihai Dorobantu, director of technology planning and government affairs with Eaton’s vehicle group. “What the rule does is it brings clarity to the entire industry. … It helps us pace and justify our investments, an investment we are doing anyway.”

New fuel-saving technology like automated or dual-clutch transmissions and closer engine-transmission integration has already changed the market since the standards began, he said.

The California Air Resources Board, which has distinct authority to set its own vehicle emissions standards but is working with federal agencies, has said the program “falls short of the program needed” in the state in public comments. The agency has recommended accelerating the timeline for the standards by three years, a change that is not expected in the final rule. It also argued for an increase in engine standard efficiency to 7 percent.

State regulators have left the option of adopting a stricter rule open, saying they would study it in a plan for cutting emissions from freight (ClimateWire, Aug. 1). Manufacturers want to avoid having to comply with two different sets of standards.