Washington – President Barak Obama Tuesday directed federal agencies to begin work on a new, more stringent round of fuel economy standards for commercial vehicles.
The announcement was a series of executive directives, a call for Congress to make policy changes, and praise for voluntary programs that have encouraged business to adopt hybrid and alternative fuel commercial trucks.
The immediate impact of Tuesday’s announcement will be the start of a new round or rulemaking. Obama ordered the Department of Energy(DOE) and the Environmental Protection Agency (EPA) to begin work on proposals. A draft of those proposals should be publically available by March of 2015, allowing those rules to become official a year later.
Trucking companies, truck producers, and aftermarket equipment companies will have the opportunity to present evidence on how fuel efficient large trucks can realistically get during that rulemaking process.
When enacted, the fuel economy standards for medium-duty trucks (classes 5-7) and heavy duty trucks (class 8) would be the second round of standards for such vehicles. Standards for the 2014-2018 calendar year truck models (pdf) went into effect this year. The new round of fuel-economy standards would pick up where the already approved ones leave off.
Obama and environmental leaders have targeted heavy trucks because of their outsized impact on fuel use. Though commercial trucks make up only 4% of vehicle registrations, they account for 25% of fuel consumption because of their sizes and the fact that they tend to be in use as much as possible.
Though the aerodynamic improvements and engine enhancements on trucks are costly, the Obama administration said they save owners more than they cost. The administration estimates that the first round of standards will save trucking fleets $50 billion over the lifetime of those vehicles. The administration estimates that the owner of a 2018-compliant truck would be able to pay for the higher vehicle expense from fuel savings in one year and save a net $73,000 over the vehicle’s lifetime.
The administration’s announcement of fuel standards policies for trucks mirrors what it has been doing with passenger cars. Obama directed the EPA and DOE to set standards for the passenger fleet to achieve 54.5 miles per gallon by 2025. Because of various credits for changing air-conditioning chemicals, the real-world figure is closer to 40 mpg, still a large increase that is driving automakers to consider lighter-weight materials, new engine types, and hybrid systems for cars.
The earlier round of commercial truck standards set a target of reducing fuel consumption by about 20%. Obama didn’t announce a target Tuesday, but he did talk about voluntary industry programs that have had more impressive results.
The National Clean Fleets Partnership has encouraged UPS, FedEx, AT&T, and many large fleet operators to adopt higher-tech, fuel-saving trucks. Many of those companies have tested hybrids, natural-gas-powered delivery vehicles, and all-electric vehicles.
And the EPA has run test programs with Paccar, Navistar, Cummins, Volvo, and others to test new heavy duty technologies. The SuperTruck program has set a target of a 50% increase in fuel economy to about 9.75 mpg (diesel) from 6.5 mpg. Truck producers will testify in the coming two years whether or not such a 50% increase would be economically viable as many of the test technologies they are using are extremely expensive.
Many of those test technologies will be on display next month at the Work Truck Show in Indianapolis, an annual event held by the NTEA, the national trucking industry trade group.
While Obama has the authority and the Congressional mandate to start the fuel-economy standards process, he also encouraged lawmakers to take action on other initiatives to improve commercial trucks.
As he has done several times over the past six year, the president called on Congress to eliminate tax subsidies for oil and gas producers and use those funds to create trust fund to invest in technological development.
Source: White House, NTEA, NHTSA