Truck Fuel Efficiency Standards

The EPA and NHTSA issued the first Greenhouse Gas and Fuel Efficiency (GHG&FE) Standards in 2011.  These GHG&FE Standards are designed to reduce new Medium-Heavy Duty (MD/HD) Trucks carbon dioxide tailpipe emissions and fuels consumption 2014-2018.  During the President’s 2014 State-of-the-Union speech, he announced plans for the EPA/NHTSA to begin developing the next phase of U.S. Truck GHG&FE Standards.  Based on recent DOE/EIA analysis, how effective are these new GHG&FE Standards projected to be in the future?

Brief MD/HD Truck GHG&FE Standards Development History – These standards originated during the Bush Administration in 2002.  The EPA was assigned the task of developing a new ‘Smartway’ program, which engaged volunteer partnerships with major Trucking Companies and Associations.  The program was launched in 2004 to share and develop the new-improved technologies needed to reduce all MD/HD diesel truck tailpipe emissions (NOX and PM), and substantially reduce petroleum fuels consumption and associated carbon dioxide (CO2) emissions.  Substantial MD/HD Truck efficiency improvements were developed and shared between about 600 Trucking Company members and the EPA administrators.  Many promising technology upgrades identified in the Smartway program have been voluntarily purchased and implemented fairly aggressively by numerous Trucking Companies and Owner-Operators since 2007.

The implemented Smartway fuel efficiency improvements included Truck Stop upgrades (plug-in power and HVAC), truck drive-chain innovations (reduced engine idling, and more efficient tires and engines), improved vehicle aerodynamics (tractor & trailer), new tailpipe-exhaust pollution controls (catalytic converters & PM filters), and sharing other best practices such as training drivers how to maximize truck operations’ overall fuel efficiencies.  As a result, average MD/HD Freight Truck fleet fuel efficiencies increased by 11% 2007-2013, which reduced petroleum consumption by about 100 million barrels (MB) during 2013.  This is equivalent to reducing U.S. CO2 emissions by over 40 million metric tons per year (MMT/yr.); tank-to-wheel (TTW) tailpipe basis (i.e. engine fuel consumption and exhaust CO2 or carbon emissions only).

In 2010 the EPA began the regulatory rules development process to mandate new MD/HD Truck GHG&FE Standards.  The new Standards appear to be largely based on the research and technologies developed-shared within the Smartway program.  The final GHG&FE Standards were approved in 2011, which created the first GHG emission and fuel efficiency standards for new MD/HD Trucks for model years (MYs) 2014-2018.  This new regulation was generally supported by larger Truck Freight Companies, since it appears to be fairly consistent with the original Smartway program.  The American Trucking Association (ATA) also generally supports the new Standards, however, urged the President to proceed ‘judiciously’ with any new regulations.  The ATA’s primary concern is the actual financial impacts on 97% of Trucking Companies (< 20 MD/HD Trucks per company) if the claimed savings benefits prove to be substantially less than actual costs.

Brief Review of the New MD/HD Truck GHG&FE Standards – Implementation of these new Standards begins in 2014.  The following Table 1 summarizes the standards for MY 2017.

Table 1 – Combination Tractor GHG&FE (Per Ton-Mile) Standards

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Data source: EPA and NHTSA Regulatory Announcement, ‘Table 1: MY 2017 Combination Tractor Standards’.

The above Standards effectively cover all MD/HD Trucks including the 18-wheel tractor-trailers Class 8 rigs commonly used to haul maximum freight loads.  Note: the EPA emission standards and NHSTA fuel consumption standards are basically redundant, and are calculated based on TTW (engine tailpipe exhaust) carbon emissions from the petroleum diesel fuel consumed. 

Unlike the CAFE fuel consumption standards established for lighter duty vehicles that are based on miles per gallon (mpg), the MD/HD Truck standards are based ‘ton-miles’.  To compare the new EPA/NHSTA standards on a more common basis a Table 2 was developed to show the minimum mpg allowed for Class 7-8 combination tractor-trailer rigs.

Table 2 – Combination Tractor GHG&FE (MPG) Standards

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Data source: EPA and NHTSA Regulatory Announcement, ‘Table 1: MY 2017 Combination Tractor Standards’.  GVWR based on FHA/EPA ‘Vehicle Weight Classes & Categories’The maximum Class 8 GVWR is currently 80,000 lbs.

Based on Class 7-8 average and maximum GVWR’s, Combination Tractor (or MD/HD Freight Trucks) minimum fuel economies will vary between 3.5-6.5 mpg.

Projected Future MD/HD Truck Fleet Fuel Efficiencies – The EIA annually develops very detailed U.S. energy balances.  The latest projection is the AEO 2014 Early Release.  Based on past actual and future projected HD/MD Freight Truck fuel efficiency a 2004-2040 plot was developed.  Refer to Figure 1.

Figure 1 – U.S. Freight Truck Average Fleet Fuel Efficiency: 2004-40

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Data source: AEO 2014 ‘Transportation Sector Key Indicators and Delivered Energy Consumptionand similar AER (Annual Energy Review; actual performance) data from AEO’s 2006-13.  Note: MD Freight Trucks only make up about 25% of the total MD+HD U.S. Freight Truck fleet.

Between 2004-2013 MD/HD Freight Truck average fleet fuel efficiency increased from 6 mpg up to 6.7 mpg.  This 11% improvement (significantly due to the Smartway program’s value-added performance) reduced petroleum diesel consumption by 101 MB/yr. and associated (TTW) carbon emissions by 43 MMT/yr. in 2013; the year before the EPA/NHTSA GHG&FE Standards went into effect.  The EIA predicts that the new GHG&FE Standards will increase 2013-40 average MD/HD Freight Truck fleet fuel efficiency up to 7.8 mpg; or an additional 16% improvement over the next 27 years.

With this 16% increased fuel efficiency by 2040, what will be the impacts on future MD/HD Freight Truck fleet’s total petroleum oil fuels consumption and associated carbon emissions?

Projected Future MD/HD Truck Fleet Fuel Consumption – The EIA AEO analyses also routinely forecast the impacts of changing MD/HD Freight Truck fleet average fuel efficiencies on the total petroleum motor fuels consumption.  Refer to Figure 2.

Figure 2 – U.S. Freight Truck Fleet Fuel Consumption: 2004-40

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Data source: AEO 2014 ‘Transportation Sector Key Indicators and Delivered Energy Consumptionand similar AER data from AEO’s 2006-13. 

During the 2007-09 economic recession and the initial relatively slow recovery, the MD/HD Freight Truck fleet petroleum oil fuel consumption was nearly constant on average.  However, in 2013 the petroleum fuel consumption began to increase very significantly.  Somewhat surprising, the EIA predicts that total Freight Truck fleet’s petroleum fuel consumption is expected to increase by 38% 2013-2040 or by an additional 350 MB/yr. in 2040.  This represents an increase in annual carbon emissions of about 150 MMT/yr. from 2013 to 2040.

So why does the EIA predict such a large increase in the Freight Truck fuel consumption over the next 27 years when average fleet fuel efficiency is projected to increase by a very significant 16%?

Projected Future MD/HD Truck Fleet Utilization – The EIA AEO 2014 predicts that the U.S. economy GDP should grow by over 90% 2013-2040.  This appears to represent a relatively conservative economy average growth rate of 2.5% per year.  A large part of this economic growth is definitely due to increased consumer goods and commodities produced within the Industrial Sector and delivered to the Commercial & Residential Sectors.  These increased economic activities, of course, require transporting increased volumes/weights of essentially all types of goods+commodities from the Industrial/Manufacturing Facilities to Consumers.  A very large percentage of these goods+commodities must be transported cross-country in the MD/HD Freight Truck fleets.  Refer to the following Figure 3.

Figure 3 – U.S. Freight Truck Fleet ‘Vehicle Miles Traveled’: 2004-40

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Data source: AEO 2014 ‘Transportation Sector Key Indicators and Delivered Energy Consumptionand similar AER data from AEO’s 2006-13.

The EIA AEO 2014 data predicts that Freight Truck total fleet ‘vehicle miles traveled’ (VMT) will increase by 60% 2013-2040.  This increase in Freight Truck VMT or usage clearly offsets all improvements or reductions in GHG&FE fleet average performance and is the primary contributing factor to increased future MD/HD Truck fleet petroleum fuel consumption.

Overall EPA/NHSTA GHG&FE Standards Support and Effectiveness – The new MD/HD Truck fuel standards are generally supported by larger Trucking Companies/Corporations and somewhat less supported by smaller, Independent Truck Owner-Operators.  There is no question that the Smartway program technology improvements have generated significant benefits for those directly and indirectly involved.  However, some smaller Freight Trucking Company’s question why the Federal Government needs to mandate improvements that are obviously beneficial to Private Business Owner’s operating expenses and profitability’s.  Since fuel costs typically make up about 1/3 of total operating expenses Owner-Operators should have sufficient ‘Free Market’ incentives to purchase the most efficient MD/HD Trucks and technologies.  ‘Free Market’ economic incentives have been the major contributing factor towards the very significant 11% increase of Freight Truck fleet average fuel efficiencies over the past 6 years.

Will the new EPA/NHSTA MD/HD Truck Standards actually help increase the level of future Freight Truck fuel efficiencies more than current-past Free Market incentives-performance?  The EPA/NHSTA estimate that the new GHG&FE Standards should reduce the carbon emissions by 270 MMT and fuel consumption by 530 MB over the full operating life’s of all MD/HD Trucks built-purchased MYs 2014-2018.  Curiously the 270 MMT figure is obvious inflated by 20% vs. the Standard’s TTW tailpipe emission calculation basis.  Was this due to inconsistent use of a WTW estimate?  This obvious error could lead to many MD/HD Truck Owner-Operators questioning the accuracy of the estimated 530 MB fuels savings claim and actual associated truck upgrade costs (increased capital-operating expenses).  If the new truck upgrade costs are 20% higher than the EPA/NHSTA estimates, the financial impacts on smaller MD/HD Truck Owner-Operators could be very onerous and possibly led to shutdown of numerous smaller Trucking Companies.

If, however, the new GHG&FE Standards do generate reasonable costs:benefits and increase the incentives to further develop and implement additional new technologies, the future possible increases in MD/HD Truck fuel efficiency standards could ‘judiciously’ add value to the Freight Trucking Industry.  Further innovative technology developments are definitely feasible that could make current state-of-art turbodiesel engines even more efficient in the future.  Possible technology improvements include a wide variety of engine and transmission drive chain upgrades that could further increase fuel efficiencies and reduce tailpipe emissions.  Hopefully these possible improvements will be reasonably supported by the next stage of GHG&FE Standards being developed for MYs 2019+.

Your Improvement Ideas Will be Appreciated – Despite the level of EPA/NHSTA GHG&FE Standard improvements the EIA projections clearly show that MD/HD Freight Truck fleet total annual petroleum fuels consumption and associated carbon emissions will continue to grow at large rates in the future.  While the new and developing GHG&FE Standards could help reduce the rate of future Freight Truck fleet fuel consumption increases, the overall effectiveness of these EPA/NHSTA regulations will apparently fall short of stabilizing or reducing total petroleum consumption and carbon emissions over the next 20+ years.  This substandard performance is unfortunately disappointing.  What other feasible and cost effective changes or improvements are needed to significantly reduce future U.S. MD/HD Freight Truck fleet carbon emissions?  Your submitted comments and ideas on how to more effectively address the apparent endless growth in Freight Truck fleet petroleum fuel consumption will be much appreciate.  Your ideas and other feasible solutions to making U.S. MD/HD Freight Truck fleet much more efficient, including other possible transport options, will be used in a future Part 2 TEC Post on other needed MD/HD Truck fuel efficiency improvements.