From SCDigest's On-Target E-Magazine
- June 23, 2015 -
Supply Chain News: US Drafts New Mileage and CO2 Requirements for Trucks, as Industry is Generally Supportive
Proposed Rules would Require 24% Improvement in Miles Per Gallon; Feasibility Not Clear, and Truck Costs will Rise
SCDigest Editorial Staff
The US EPA and Dept. of Transportation jointly issued draft new rules for fuel efficiency and related CO2 emissions improvements for heavy duty and many smaller trucks.
The new standards will require truck manufacturers to increase their fuel efficiency by about 24% in 2027 models from those built in 2018, ramping up improvements starting in 2019. Today, new trucks average of about six miles a gallon - up only about one mile per gallon over the last 40 years. So with improvements through 2018 and then these new rules, it seems likely we are talking about something in the nine miles per gallon range at the end of the period.
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| Tom Linebarger, CEO of engine maker Cummins , said the proposed rules "will help our industry grow in a more sustainable way, which is a win for our customers and a win for the environment." |
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What Do You Say?
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In 2011, new rules for large trucks were set for models built in 2014 through 2018, so this is the second round of changes under the Obama administration.
In addition to large tractor-trailer, there are also new targets for garbage trucks, combination trailers, three-quarter-ton pickups, delivery trucks, public utility trucks, transit, shuttles and school buses. The proposed rules for the first time will also regulate the trailers that the tractors haul, looking to reduce their weight to generate additional fuel savings.
By the end of the compliance period, the changes would "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. These reductions are nearly equal to the greenhouse gas (GHG) emissions associated with energy use by all U.S. residences in one year. The total oil savings under the program would be greater than a year's worth of U.S. imports from the Organization of the Petroleum Exporting Countries (OPEC)," according to an EPA-DOT statement.
Industry Generally Supportive
"Fuel is an enormous expense for our industry, and carbon emissions carry an enormous cost for our planet," said Bill Graves, CEO of the American Trucking Associations. "That's why our industry supported the Obama Administration's historic first round of greenhouse gas and fuel efficiency standards for medium and large trucks and why we support the aims of this second round of standards."
"ATA has adopted a set of 15 guiding principles for Phase II [of truck fuel regulations]," added ATA Vice President and Energy and Environmental Counsel Glen Kedzie, "Based on conversations with regulators and a preliminary review this proposal appears to meet 14 of those."
Tom Linebarger, CEO of engine maker Cummins , said the proposed rules "will help our industry grow in a more sustainable way, which is a win for our customers and a win for the environment," though we will note engine and truck makers generally benefit from such regulatory changes that drive a new upgrade cycle.
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Still, there are some questions. The US government estimates the cost for gaining these improvements will be between $10-12,000 per tractor - but that is just a guess. New environmental rules have played a key role in rising costs for new trucks, though robust demand would seem to indicate carriers and shippers with private fleets are still seeing an ROI from the improved mileage in new models. The EPA estimates that carriers will see a payback from the higher priced trucks in two years based on fuel savings.
