5 numbers you need to know about the proposed U.S. truck efficiency rule

Posted Friday, 19 June 2015, 18:00

Today the U.S. Environment Protection Agency and the National Highway Traffic Safety Administration released a notice of proposed rulemaking (NPRM) for heavy-duty vehicle fuel-efficiency and greenhouse gas standards. This is “Phase 2” of the regulation; Phase 1 was finalized in 2011 and went into effect for model year 2014 vehicles and engines.

The full package—including preamble, NPRM, Draft Regulatory Impact Assessment, and other supporting info—comes in at well over two thousand pages, so we all have a lot of homework to do. We'll publish a detailed policy update when we've finished combing through the details, looking for the devil. Still, some of the highlights regarding the complexity, the technology improvements, and the benefits are immediately clear. Here is the gist of the rule in five numbers.

46 different engine, truck, tractor, and trailer categories. The heavy-duty vehicle fleet encompasses diverse vehicle types, technologies, and usage patterns. The agencies seem to have meticulously tailored the standards to the characteristics and technology potential of different vehicle types and components. There are 10 categories for tractors, 18 categories for medium- and heavy-duty vocational vehicles, 2 work-factor indexed categories for commercial pickups and vans, 10 categories for trailers, and 6 categories for engines. The structure and subcategories mostly follow from the Phase 1 regulatory structure. The most significant change from Phase 1 is the inclusion of trailers. The effect of that change will be to accelerate the deployment of cost-effective aerodynamic and tire technologies, leveraging the success of the SmartWay program and California’s tractor-trailer GHG regulation to provide fuel and cost savings to trucking fleets and consumers. In addition to all of these regulatory subcategories, there are many other caveats and special provisions for engines and vehicles that pop up in the 1,300+ pages of regulatory text.

12%–24% fuel use reduction per vehicle. New vehicles in model year 2027 would see their fuel use reduced by 12-16% (vocational vehicles), 16% (commercial pickups and vans), and up to 24% (class 8 tractor high-roof sleeper cabs) relative to the Phase 1 regulation. The agencies seem to have targeted much of the available and anticipated technologies for the 2020–2030 timeframe across all of the vehicle categories, including tractor-trailers and heavy-duty pickup trucks. Taken together, Phase 1 and the proposed Phase 2 amount to a 21%–42% reduction in fuel use and carbon emissions from a model year 2010 baseline for these trucks, work pickups, delivery vans, tractors, etc.

500,000 barrels per day in fuel savings in 2035. The agencies estimate that the vehicles affected by the Phase 2 regulation will result in fuel savings of 1.8 billion barrels and GHG reductions of 1 billion metric tons of carbon dioxide (CO2) emissions over their lifetimes. A billion tons of CO2 is over three times the cumulative benefits from the 2014-2018 trucks regulated by the first phase of the US heavy-duty rules. By the time these standards fully phase in, they’ll deliver over a half million barrels per day of oil savings in 2035 and might even approach 1 million barrels per day by 2050. Including the adopted Phase 1 and these proposed Phase 2 regulations together will result in savings that greatly surpass 1 million barrels of oil per day by 2050.

$170 billion in fuel savings. Over the lifetime of all the 2018-2027 vehicles impacted from this rule, the agencies estimate a $230 billion net societal benefit for the vehicles affected by this regulation. Of that, the largest part of the benefits are about $170 billion in fuel savings – assuming this ripples through the economy, this would mean hundreds of dollars per household per year. Moreover, the benefits are estimated to be larger than the costs by a factor of more than 9 to 1. In addition, to the fuel savings, there are substantial health benefits, because same technologies, like idle-reduction devices, reduce fuel consumption and local air pollution.

2-year payback period for big rigs. Accounting for nearly at least two-thirds of fuel use and GHGs from the commercial vehicle sector, tractor-trailers are the key vehicle segment covered under this rule. For these tractor-trailers, the average payback period the agencies are projecting is within 2 years (similar to our own findings), less than half of the 4 to 6 year average time period that these vehicles are held by their first owner. For the other two broad vehicle categories—commercial pickups and vocational vehicles—the estimated payback periods of 3 and 6 years also fall well within the typical first ownership cycle, meaning that first owners can expect to more than make up the increase in new-vehicle purchase price attributable to efficiency technologies through the fuel savings.

During the 60-day comment period, we'll be doing a comprehensive analysis of the rule, publish a summary policy update, and post a number of blogs looking at specific aspects of the proposal. In addition, we’ll be putting a lot of thoughts into how the aspects of rule are relevant to heavy-duty vehicle policy deliberations elsewhere. This regulation is a key to U.S. action on climate, so we’re looking forward to a big year for big carbon cuts from big trucks.