On August 9, the U.S. Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) finalized a program to reduce greenhouse gases (GHGs) and improve fuel efficiency of medium- and heavy-duty vehicles. The rule is a global first, though Japan deserves full credit for establishing in 2005 the first fuel economy program for medium and heavy-duty vehicles (set to go into effect in 2015). The U.S. action is particularly significant because it drives efficiency improvements in all aspects of the heavy-duty vehicle for the two highest fuel consumption classes, tractor trucks and pickup trucks; sets separate standards for engines and vehicles; and establishes standards for four major greenhouse gases in addition to fuel consumption limits.
The EPA and NHTSA worked collaboratively to deliver regulations under their respective authorities: the EPA developed GHG emission standards under the Clean Air Act, and NHTSA developed fuel efficiency standards under the 2007 Energy Independence and Security Act. The emissions included in the EPA’s program will be carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs). The EPA program will begin in model year (MY) 2014, while the NHTSA program will be voluntary in MYs 2014 and 2015 and will become mandatory starting in MY 2016.
Overall, the stringency of the program ranges from 6% to 23% reduction in fuel consumption in the MY 2017 timeframe, as compared to a MY 2010 baseline. The stringency levels vary according to vehicle subcategories that are based on weight classes and vehicle attributes. The rule is best understood as three separate regulatory programs linked to specific provisions for heavy-duty engines that power tractor trucks and vocational vehicles ( download the update for details).
The agencies estimate total benefits from the rule, which will affect vehicles beginning with model year 2014, of nearly 250 million metric tons of avoided GHGs and approximately 500 million barrels of oil saved over the lifetime of the vehicles sold during 2014 to 2018. Using estimates for climate, energy security, and air pollution externalities, the agencies estimate total societal benefits of $49 billion, which is a net benefit of $41 billion after accounting for the estimated $7.7 billion in costs to industry. The rule builds on a congressionally-mandated study by the National Academy of Sciences (NAS) and previous work by the ICCT.
Projected per-vehicle costs and fuel savings are summarized in the table below. For tractor trucks, given the high number of annual miles these vehicles typically travel, the payback period per vehicle will generally be less than a year. For heavy-duty pickup trucks and vans the period will be slightly longer, as these vehicles average much less annual mileage so the fuel savings take longer to accrue. For vocational vehicles, the estimated fuel savings of roughly $700 in year one is larger than the modest cost increase of $378, thus making the payback time less than a year.
|Estimated Cost-Benefit, MY 2018 Vehicles (2009 dollars)|
|Vehicle category||Cost per truck||Lifetime fuel savings|
|HD pickups and vans||$1,048||$7,187|