Tougher DOT-EPA fuel, greenhouse-gas standards to save truck supply chain billions in fuel spend, environmental group says

Strict carbon-emissions and fuel-efficiency standards proposed Friday by the Obama administration will lead to a dramatic increase in the average miles per gallon logged by heavy-duty trucks, potentially yielding billions of dollars in fuel savings for shippers and carriers by the middle to the end of next decade, according to a leading environmental group.

The Environmental Defense Fund (EDF) estimated that the tougher fuel and greenhouse-gas caps jointly proposed by the Department of Transportation and the Environmental Protection Agency will spawn the development of higher-efficiency tractor-trailers that will get 9.5 miles per gallon. As of 2010, tractor-trailers, on average, got 5.8 mpg.

Jim Bierfeldt, an EDF spokesman, said neither federal agency has disclosed an estimate on impoved miles-per-gallon efficiency. A Department of Energy-sponsored initiative called the "Super Truck" program supports the development of tractor-trailers that can operate at 10.7 mpg, the environmental advocacy group said. At that level, truck owners would save 5,000 gallons of diesel, cut fuel costs by $20,000 per year, and attain $73,000 in net fuel savings over the life of the truck, EDF said, citing a 2014 White House report. Truck upgrade costs would be recouped in one year, according to the group, again citing administration estimates.

The proposed caps would apply to tractor-trailers, heavy-duty pickup trucks and vans, commercial and school buses, and garbage trucks, but would not affect current efficiency standards for passenger cars and light pickups.

Calling the plan "ambitious yet achievable," EPA and DOT's National Highway Traffic Safety Administration (NHTSA) proposed to extend the current "Phase 1" limits that cover vehicles built between 2014 and 2018. If approved, the proposed "Phase 2" caps would cover heavy-duty trucks built in model years 2021 to 2027, and trailers built between 2018 and 2027.

In an effort to finalize the proposed standards by 2016, EPA and DOT will host two public hearings and collect feedback through a 60-day public comment period, as well as a series of open-door meetings with interested stakeholders.

The specific limits vary according to truck model and year, but a tractor-trailer built in 2027—when the standard is fully phased in—would cut both fuel use and CO2 emissions by 24 percent compared to current standards, the EPA website shows. That efficiency boost would be 8 percent for trailers, 16 percent for vocational vehicles such as garbage trucks, and 16 percent for heavy pickup trucks.

The suggested standards target medium- and heavy-duty trucks because they account for only 4 percent of U.S.-registered vehicles but generate about one-quarter of all highway fuel use and greenhouse-gas emissions, according to U.S. government data. Worldwide, heavy-duty trucks account for 58 percent of all logistics-related greenhouse gas emissions, according to the World Economic Forum.

To comply, vehicle manufacturers could use technologies such as improved transmissions and engine combustion optimization, while trailer builders could meet the efficiency limits through options such as aerodynamic devices and lighter-weight construction, the EPA said.

Some transportation-industry figures are concerned about the cost of compliance to trucking companies and the financial impact of passing those costs on to shippers.

"The devil is in the details, but we will continue to work with our partners to ensure the final rule is strong but still implementable for our industry," Doug Stotlar, president and CEO of Ann Arbor, Mich.-based Con-way Inc., one of the nation's largest transportation companies, said in a statement.

Michael L. Ducker, president and CEO of FedEx Freight, the less-than-truckload (LTL) unit of Memphis-based FedEx Corp., added in the same statement that the federal government needs to "ensure national harmonization of standards and compliance requirements in order to maximize environmental benefits and fuel cost savings for fleets so as to decrease U.S. dependency on oil."

Bill Graves, president and CEO of the American Trucking Associations (ATA), praised the administration for meeting 14 of ATA's 15 "guiding principles" for meeting the Phase 2 goals. However, Graves said that some of the fuel-efficiency technologies necessary to meet the new targets are not ready to be implemented.

"In 2014, trucking spent nearly $150 billion on diesel fuel alone," Graves said. "So the potential for real cost savings and associated environmental benefits of this rule are there—but fleets will need a wide variety of proven and durable technologies to meet these new standards throughout the various implementation stages."

In response, administration officials downplayed the financial effect of compliance with the new fuel regulations, saying the rapid returns on investment more than justify the expense.

"Once upon a time, to be proenvironment you had to be anti-big-vehicles. This rule will change that," U.S transportation secretary Anthony Foxx said in a release. "In fact, these efficiency standards are good for the environment—and the economy. When trucks use less fuel, shipping costs go down. It's good news all around, especially for anyone with an online shopping habit."