Heavy-duty vehicle efficiency

International policy developments for heavy-duty efficiency 2014–2015

Heavy-duty vehicles (HDVs) encompass a wide range of vehicle types, including large pickups, delivery trucks, long-haul tractors, refuse trucks, urban buses, and coaches. The diversity of heavy-duty fleets — both in vehicle characteristics and duty cycles — makes regulating their fuel consumption and GHG emissions more challenging than for LDVs. Key components of HDV regulations include the metric for efficiency or GHG emissions, vehicle types covered (segmentation), test methods for certification, and means of enforcement.

To date, four markets have adopted national efficiency regulations for heavy-duty trucks and buses (U.S., Canada, Japan, and China), and each of these regulations has taken effect in the last two years. These four markets covered 47% of new HDVs sold worldwide in 2014 (Table 1).

Table 1. Comparison of latest adopted regulations for heavy-duty vehicle efficiency
Region Share of world HDV sales (2014) Implementation period Reduction in average CO2 rate (g/km)
  • Reduction in average new HDV CO2 rate is sales-weighted by vehicle type.
  • Information shown for China's Phase II (National Standard) and U.S. Phase 1 HDV GHG standard.
  • Proposed U.S. Phase 2 HDV GHG standards would cover model years 2018-2027.
  • Total may not appear as the sum of its parts due to rounding.
China[1] 31% 2014-2015 11%
U.S.[2] 11% 2014-2018 14%
Japan[3] 5% 2014-2015 11%
Canada[4] 1% 2014-2018 14%
Total 47%

Within the four regulated markets, five major heavy-duty vehicle efficiency policies were proposed, adopted, or first implemented between January 2014 and January 2016 (Table 2).

Table 2. International policy developments for heavy-duty efficiency 2014–2015
Month Policy Development
Jan 2014 The U.S. implemented Phase 1 standards starting with model year 2014 vehicles. The standards require CO2 emission reductions of 6-23% and will be fully phased in by 2018.[1]
Jan 2014 Canada implemented Phase 1 standards starting with model year 2014 vehicles. These standards are closely aligned with the US rules.[2]
Feb 2014 China adopted Phase 2 fuel consumption standards. The standard applied to new type approvals for July 2014, and required an average reduction in fuel consumption of 11% by July 2015.[3]
Jan 2015 Japan's Phase 1 standard, established in 2005, became fully enforceable in 2015.[4]
Jun 2015 The U.S. proposed Phase 2 standards that will apply to model year 2018-2027 vehicles. Together with Phase 1, the standards will reduce fuel consumption by 20%-45% compared with model year 2010 technology.[5]

Additional heavy-duty efficiency regulations are under consideration in major markets around the world. In 2015, the U.S. EPA proposed Phase 2 HDV GHG standards that will apply to model years 2018–2027. These standards build from the initial phase of US standards, the U.S. EPA SmartWay program, and the California tractor-trailer greenhouse gas regulation. The European Union is developing CO2 emissions certification, monitoring, reporting, and verification legislation for heavy-duty vehicles. Meanwhile, other markets such as India are working toward HDV efficiency standards. Korea is also actively working on heavy-duty efficiency standards. In addition, Mexico is exploring the possibility of adopting heavy-duty vehicle efficiency standards. Even as leading markets adopt standards, most HDVs sold in the world today are not subject to any GHG or fuel consumption standards. In addition, a number of countries around the world are investigating voluntary green freight programs that would provide in-use fleet efficiency improvements and could serve as building blocks toward future efficiency standards.

Impact assessment of heavy-duty vehicle efficiency policies

Figure 1 compares projected CO2 emissions from the global HDV fleet under three scenarios:

  • Business as usual: Considers improvements in HDV efficiency up until 2015, but no further improvements after 2015. This scenario serves as a baseline for estimating the impacts of standards implemented after 2015 (e.g. Phase 1 standards).
  • Adopted: Reflects improvements in HDV efficiency that are required under all adopted policies, but no additional improvements beyond the requirements of these policies (summarized in Table 1).
  • Efficiency potential: Considers the impacts on HDV energy use and CO2 emissions if all vehicle markets adopt standards that reduce average CO2 rates of new vehicles by 3.5% annually starting in 2020 in eleven of the top vehicle markets, and 2025 in the rest of the world, until each market reaches a 50% reduction in fuel consumption compared to 2010 technology. The National Research Council has found this level of reduction to be feasible for medium-duty and heavy-duty vehicles, and the ICCT has confirmed this potential for tractor-trailers.

Adopted policies are forecast to reduce emissions by 0.4 GtCO2 in 2050, equivalent to 2.2 mbd, compared to a business as usual scenario without these standards. Additional standards that require a 50% reduction in fuel consumption compared to 2010 technology could drastically change the GHG emissions trajectory for HDVs, curbing growth in emissions in the 2025-2030 timeframe and reducing emissions to near current levels in 2050. Compared to a scenario with adopted policies, annual emissions could be 2.6 GtCO2 lower in 2050, with fuel savings equivalent to 14 mbd. As shown in Figure 2, roughly 70% of the potential energy savings of new HDV efficiency standards are concentrated in India, China, the US, Canada, and the EU. The remaining potential is somewhat evenly distributed throughout the rest of the world, highlighting the importance of international activities to support the development and implementation of such standards.

Figure 1. Impact of heavy-duty efficiency standards on global lifecycle CO2 emissions. (Estimated using ICCT's Global Transportation Roadmap model.)


Figure 2. Regional distribution of potential energy savings from HDV efficiency standards. (Estimated using ICCT's Global Transportation Roadmap model.)

Cost-effectiveness of heavy-duty efficiency standards

In addition to climate and energy security benefits to society, vehicle efficiency standards result in fuel savings to vehicle owners and operators that pay back the incremental cost of technologies that improve vehicle efficiency. The length of time it takes for fuel savings to pay off the initial incremental cost is commonly referred to as the payback period. Regulatory agencies typically publish analyses of regulatory cost-effectiveness in support of their proposed rules, and these analyses are often supplemented by studies from independent research organizations.

Table 3 summarizes the findings of cost-effectiveness analyses of U.S. heavy-duty efficiency standards based on government and ICCT analysis. As shown, the incremental cost of technology has ranged from less than $420 to $12,800 per vehicle, with payback periods of 1 to 5 years. The length of payback is determined by various region-specific factors including technology cost, annual vehicle mileage, fuel prices, and the discount rate used to put future costs and benefits into present value terms.

Table 3. Cost-effectiveness analyses of US heavy-duty efficiency standards
Rule Per-Vehicle Cost Payback Period Source
Currency units have been converted to 2015 USD.
U.S. HDV Phase 1 2014-2018 $420-$6,890 1-2 years EPA (2011)
U.S. HDV Phase 2 2018-2027 (combination tractors) $9,500-$12,800 2 years Lutsey et al. (2015)
U.S. HDV Phase 2 2018-2027 (vocational) $3,380 5 years Lutsey et al. (2015)
U.S. HDV Phase 2 2018-2027 (pickups and vans) $1,340 3 years Lutsey et al. (2015)
Advanced trailer technologies in U.S. HDV Phase 2 (potential) $870-$3,370 2 years Lutsey et al. (2015)