President Barack Obama on Tuesday directed the Environmental Protection Agency and the Department of Transportation to establish the next tier of fuel efficiency and carbon emission-reduction standards for medium and heavy-duty trucks within a year.
Administration officials said they would propose by March 2015 new truck-efficiency standards for the next decade in partnership with manufacturers, labor, environmental groups, the trucking industry, the California Air Resources Board and other stakeholders. They promise to issue a final rulemaking within two years.
The White House announced that Obama wants Congress to offer $200 million in new tax credits to manufacturers of heavy-duty alternative vehicles and companies that build fuel infrastructure to increase locations where trucks can fill up on biodiesel, natural gas, hydrogen, electricity or other alternative fuels. The White House also renewed its call for Congress to end $4 billion in subsidies to oil and gas companies, and create an Energy Security Trust Fund to fund research and development for advanced vehicle technologies; it also wants an extension of expired tax credits to support plant-based biofuels,
"Finalizing new fuel efficiency standards for medium- and heavy-duty trucks will be an important milestone that should result in significant benefit to our economy, the trucking industry and the environment," said Douglas Stotlar, president and chief executive officer of Con-way Inc., an Ann Arbor, Mich., logistics conglomerate that owns two large trucking subsidiaries and belongs to the Heavy Duty Fuel Efficiency Leadership Group.
"The development of these new standards continues to demonstrate meaningful progress between government and industry," Stotlar said. "This collaborative approach will result in realistic, achievable goals, and an effective regulatory framework to improve fuel efficiency and reduce greenhouse gas emissions."
In 2011, the Obama administration instituted the first-ever fuel efficiency and greenhouse gas standards for commercial vehicles for model years 2014 through 2018. Under the rules, tractor trailers are required to achieve about a 20-percent reduction in fuel consumption and greenhouse gas emissions, while vocational vehicles — delivery trucks, buses, garbage trucks — must improve by 10 percent in those categories. The new standards are projected to reduce oil consumption by a 530 million barrels and greenhouse gas pollution by about 270 million metric tons, saving vehicle owners and operators an estimated $50 billion in fuel costs, according to the White House.
Some of those savings, however, will be returned through costs for better engine technology in new vehicles.
The development of fuel-efficiency standards for trucks is part of the White House's Climate Action Plan, announced last summer. The standards follow an earlier push to get automakers to agree to double fuel economy (known as corporate average fuel efficiency because the standards don't apply to each vehicle but the average for a company's entire fleet) to 54.5 miles per gallon for cars and light trucks by 2025. The standards rise in phases beginning in 2011 and then to 35.5 mpg for 2016 model-year vehicles, an increase of 8 mpg from the time Obama took office. The government set the goal and let automakers decide how to achieve the targets. Many are developing hybrid and plug-in electric cars, as well as improving the efficiency of gas engines, to get there.
Modern trucks typically average about 6 mpg to 7 mpg, although some well-maintained and properly run fleets are able to squeeze out a little bit more.
Speaking at a Safeway distribution center in Upper Marlboro, Md., Obama said, "Heavy-duty trucks account for just 4 percent of all the vehicles on the highway. But they’re responsible for about 20 percent of carbon pollution in the transportation sector (and) about 20 percent of our on-road fuel consumption."
Big trucks are responsible for 25 percent for on-road fuel use and greenhouse gas emissions in the transportation sector, according to a White House fact sheet.
"And because they haul about 70 percent of all domestic freight — 70 percent of the stuff we use, everything from flat-screen TVs to diapers to produce to you name it — every mile that we gain in fuel efficiency is worth thousands of dollars of savings every year," Obama added.
Obama said his administration has supported research that recently has led to a redesigned truck able to achieve a 75-percent improvement in fuel economy. (According to the fact sheet, the administration's SuperTruck program, launched in 2010 with funding from the massive economic stimulus bill and subsequent annual appropriations, is targeting a 50-percent improvement in the efficiency of Class 8 trucks by 2015).
Through the SuperTruck program, the Energy Department has partnered with engine manufacturer Cummins and truck makers Volvo, Navistar and Daimler Truck North America to increase overall fuel economy to about 9.75 mpg. A Peterbilt truck with a Cummins engine has demonstrated a 20-percent increase in engine efficiency and a 70-percent increase in freight efficiency, reaching over 10 mpg under real-world driving conditions, according to the White House. Cummins is now working to develop technologies to achieve even greater engine efficiency. The other three partner teams are also near the 50-percent-improvement goal by leveraging technologies such as waste heat recovery.
Improving fuel mileage for trucks will further drive down U.S. oil imports and carbon pollution that affects weather patterns, while reducing fuel costs for businesses, resulting in lower prices for consumers, the president said. "So it's not just a win-win. It's a win-win-win," he said.
Companies such as Safeway, ARAMARK, Staples, Ryder, Best Buy, PepsiCo, Coca-Cola, UPS, FedEx, AT&T and Verizon support the standards because they want to reduce their fuel costs and cut pollution, Obama said. They, along with 13 other companies, have joined the administration's National Clean Fleets Partnership to replace older trucks with more fuel-efficient models, as well as incorporate alternative fuels, electric vehicles and fuel-saving measures into their fleets. Collectively, they operate about 1 million commercial vehicles nationwide. Obama directed the Department of Energy, in collaboration with the EPA, to provide large fleets that participate with special technical expertise and support in developing a comprehensive strategy to reduce fuel use through better vehicle efficiency.
The National Clean Fleets Program resembles in many ways the EPA's SmartWay Transport program. SmartWay is a 10-year-old public-private partnership that helps motor carriers, and the shippers that hire them, benchmark their pollution output, and identify fuel-saving technologies and operational practices that reduce harmful emissions and greenhouse gases. There are more than 3,000 members who share data with the EPA and agree to make annual efficiency improvements, with the incentive that shippers in the program will hire them for a certain portion of their highway transport needs.
A White House paper on truck efficiency policy praised SmartWay member Con-Way for deploying fuel-saving and emission-reduction technologies on all its tractors, and adding aerodynamic accessories to nearly half of its trailers. The company's tractors also have automatic idle shutdown and low-rolling resistance tires.
(Read more about Con-way's efforts to make its vehicles more aerodynamic in the January 2012 sidebar "Reducing trailer drag
Obama singled out Safeway for its early efforts to reduce fuel consumption for its private fleet by improving the aerodynamics of its trucks, investing in larger trailers and using more efficient tires, while also encouraging contract carriers that supplement its fleet to do the same.
The EPA and the DOT's National Highway Transportation Safety Administration will evaluate advances that may help achieve the new fuel standards, including aerodynamics, weight reduction, engine and powertrain technologies, improved rolling resistance, hybrid power systems, automatic engine shutdown, and improvements in water pumps, fans and other accessory components, according to the White House.
The natural gas vehicle industry, including fuel provider Clean Energy, have said they want Congress to provide a federal tax credit to help truckers defray the cost of buying a more expensive natural gas vehicle instead of providing subsidies to fuel retailers to build infrastructure (see the January feature story "Transitioning from diesel
The Heavy-Duty Fuel Efficiency Leadership Group, an informal alliance of several key industry players that helped develop the first round of fuel-efficiency standards, said the administration should create a single, nationwide fuel-efficiency and carbon-reduction program so there are no inconsistencies between federal agencies or states, such as California.
Group members besides Con-way are: Cummins Inc. (engine manufacturer), Eaton Corp. (drivetrain manufacturer), FedEx, Wabash National (trailer manufacturer), and Waste Management (refuse company).
The Leadership Group also said it supported setting standards without prescribing specific product specifications or technologies needed for different applications.
Other recommendations include:
Don't impose requirements that shift compliance burdens to end users. Instead, continue the Phase I framework of using proven testing/certification protocols while establishing incentives to drive adoption of advanced and innovative technologies
- A Longer time frame (five to 10 years), and enough lead time to develop, mature and deploy advanced technology, will provide regulatory certainty and pull through advanced solutions that will provide significant greenhouse gas and fuel consumption reduction in an economically sustainable fashion. This is necessary for both manufacturers to make long-term investments that would support the new standards, as well as for fleets that need a high level of reliability and cost-effective solutions in order to deploy new technology
- Regulations should be based on verifiable test results so that that companies aren't forced to deal with extreme regulatory complexity for minimal gains, and trailers should be included to take advantage of new technologies that reduce drag
- Maintain and improve credit programs to encourage early market adoption of advanced fuel and emission-reduction technologies. Investment tax credits, accelerated depreciation of new capital investment, increased highway infrastructure spending, and increased size and weight of vehicles can accelerate the deployment of new, more fuel-efficient trucks and assist in rapid fleet turnover.
The American Trucking Associations articulated similar principles.
"As we begin this new round of standards, ATA hopes the administration will set forth a path that is both based on the best science and research available, and economically achievable," ATA President and Cheif Executive Officer Bill Graves said in a statement.
"Fuel is one of our industry's largest expenses, so it makes sense that as an industry we would support proposals to use less of it," Graves said. "However, we should make sure that new rules don't conflict with safety or other environmental regulations, nor should they force specific types of technology onto the market before they are fully tested and ready."
The Union of Concerned Scientists also endorsed applying standards to trailers as well as tractors. It said trailer improvements could reduce fuel consumption from combination trucks by as much as 35 percent with technologies available by 2017 compared with 23 percent required by the current standards.
Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, said his members are worried about the increased costs tied to buying fuel-efficient vehicles.
“Shock and awe may be the best way to describe what’s happening to the
vast majority in trucking with these proposed regulations,” he said in a statement, citing estimates that found the new regulations would add $6,200 to the price of a new truck. “Each year, for the past 10,
more and more truckers are squeezed out of the option to buy new
equipment because of ever increasing prices due to government
requirements that are long on promises but way short on performance.”