US tightens fuel standards for commercial trucks

OREANDA-NEWS. August 17, 2016. President Barack Obama's administration today finalized tougher fuel-efficiency standards for commercial trucks that it projects will cut oil consumption more than 1.9bn bl and save vehicle owners nearly \\$170bn on fuel costs.

The second round of fuel-efficiency standards for medium- and heavy-duty vehicles will cut CO2 emissions by 1.2bn tons (1.1bn metric tonnes) over the lifespan of the vehicles, the US Environmental Protection Agency (EPA) projects. That will bring the US closer to meeting commitments it made in Paris last year to cut its greenhouse gas emissions by 26-28pc below 2005 levels by 2025.

The tougher standards will apply to semi-trucks, heavy pickup trucks, vans, buses and work trucks, which collectively are responsible for 6pc of US greenhouse gas emissions and 20pc of the fuel consumption in the US transportation sector. The standards apply to model year 2021-27 vehicles. EPA today also finalized first-time efficiency standards for trailers that will take effect in 2018.

The projected fuel savings from the standards could be significant. EPA expects a new tractor-trailer will consume 25pc less fuel than a comparable 2018 vehicle after the standards are fully phased in by 2027. This will allow the typical buyer of a long-haul truck to recover the additional compliance costs from the program in less than two years, the agency said.

Vehicle manufacturers are responsible for hitting the efficiency targets. EPA expects they will use a combination of aerodynamic and engine improvements, better tires and advanced transmission systems to comply. Manufacturers are allowed to average and trade credits for complying with the program, as a way to reduce compliance costs.

Industry groups have been mostly supportive of the program, in part because its projected fuel savings of \\$149bn to \\$169bn dwarfs the projected costs of \\$29bn to \\$31bn. The American Trucking Associations said it was "cautiously optimistic" that the standards were achievable and hoped the 10-year phase-in period would reduce disruptions to manufacturers and fleets.

Environmentalists also support the program, which EPA expects will generate net benefits of at least \\$197bn after adding in the health and climate benefits of cutting air pollution. But free-market groups complain the rules will drive up the cost of buying new vehicles and are unnecessary, because companies already have an incentive to buy fuel-efficient vehicles.

EPA made its final fuel-efficiency standards 10pc more stringent than when they were proposed in June 2015. The standards, developed jointly with the US Transportation Department, are expected to achieve far more fuel savings than first round of fuel efficiency standards in 2011, which EPA has estimated would conserve 530mn bl of oil.