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Phase 2 Fuel Economy/Greenhouse Gas Proposal Will Force Technology, Cost Tens of Billions

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July 6, 2015 by Minuteman Trucks

Article published by ATD

The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) have proposed ambitious Phase 2 fuel economy increases/emission decreases for new commercial trucks.

The Obama administration estimates that its proposal, phased in between model year 2018 and 2027, will cost at least $25 billion or some three times the estimated cost of Phase 1.  (Note: this figure does not account for the numerous other federal mandates expected to kick in during that time-frame.)

The proposal seeks to impose the following mandates by model year 2027:

  • Class 7 and 8 Tractors: a 24% improvement over Phase 1, including 4.2% from engines alone.
  • Vocational Trucks: a 16% improvement over Phase 1, including 4% from engines alone.
  • Heavy-Duty Pick Ups and Vans: a 16% improvement over Phase 1, contemplating both existing and future technologies.
  • Class 7 and 8 Trailers: regulated for the first time, with different trailer types added over time.
  • Air Conditioners: reductions in potential emissions from commercial truck A/C systems.
  • Tighter nitrous oxide (N2O) emissions requirements.

 

While supportive of practical and affordable fuel economy improvements, the American Truck Dealers (ATD), a division of the National Automobile Dealers Association (NADA), is concerned that:

  • The administration’s payback estimates from potential fuel savings (two years for tractors, six years for vocational trucks, three years for heavy-light) are too ambitious, especially if interest rates rise and credit terms tighten.
  • Compliance will require untested technologies that may not perform reliably in the real world.
  • Cost, reliability, and maintenance concerns will cause prospective purchasers to delay or defer new equipment purchases.
  • Setting rules extending out 12 years necessarily involves shaky economic assumptions.
  • Tighter N2O mandates will conflict with tighter fuel economy mandates.

 

ATD intends to participate in hearings on the proposal and to file comments with EPA and DOT. Questions on the proposal should be directed to regulatoryaffairs@nada.org.

The National Automobile Dealers Association (NADA) and American Truck Dealers (ATD) released the following statement in response to EPA and NHTSA’s proposed Phase 2 emissions and fuel-efficiency standards for medium- and heavy-duty trucks:

“Affordable transportation is the bedrock of the American economy, and adding — by the Administration’s own estimate — an average of just under $12,000 to the cost of a new truck through mandates based on potentially untested technologies is a great risk to a still-fragile economy. Recent history has shown that mandates with underestimated compliance costs result in substantially higher prices for commercial vehicles, and force fleet owners and operators to seek out less-expensive and less fuel-efficient alternatives in the marketplace. The costs could even drive small fleets and owner-operators out of business, costing jobs and only further impeding economic growth. While supportive of affordable fuel-economy improvements, ATD is closely reviewing the proposal and the many potential impacts it will have on truck dealerships and their customers.”

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