Does the truck industry need to embrace more emission regulations or step up and say 'no more'?
Another fuel emissions benchmark was recently introduced, marking the next notch in the U.S. Environmental Protection Agency’s regulations belt. The EPA and the National Highway Traffic Safety Administration have extended fuel efficiency regulations for medium- and heavy-duty trucks for models beyond 2018. The 2011 fuel standards applied only to truck models for the years 2014 through 2018, calling for a 20 percent reduction in heavy-vehicle emissions by 2018.
Small business owners who were subject to rule requirements had the option to provide input on the next round of regulations targeting trucks to reduce air pollution. The EPA wanted to evaluate — and prevent — adverse impacts of the rule on small trucking operations, however, many business owners were not aware of the 14-day self-nomination period in April.
“While exact details of the EPA’s upcoming regulations are not yet clear, one can expect that the regulators will regulate in such a way as to push technologies that save fuel but do not offer the best total cost of ownership (TCO),” says Sean Waters, director of product compliance and regulatory affairs at Daimler Trucks North America.
According to an article on LATimes.com, experts estimate manufacturers would need to boost fuel efficiency for trucks to an average of 8 mpg to meet the new standards.
Take a look at this example to put it into dollars and cents. Your current truck, we’ll call this truck A, gets 6 mpg and costs $100,000. If you drive 100,000 miles, you use 16,667 gallons of fuel. Let’s say diesel fuel costs $4/gallon, which means you pay $66,668 in fuel costs per year. If you run the truck for 10 years, the total cost for fuel is $666,680.
Assuming a 25 percent price increase, a new truck, truck B, gets 8 mpg under the fuel efficiency standards, and costs $125,000. If you drive 100,000 miles, you use 12,500 gallons of fuel. At $4/gallon for diesel fuel, you pay $50,000 in fuel costs per year. If you run the truck for 10 years, the total fuel cost is $500,000.
The total cost to run truck A for 10 years is $766,680, and the total cost to run truck B for the same time is $625,000. So, paying $25,000 more up front for a new truck saves $141,680 over a 10-year life of the truck.
Bottom line? Required increases in fuel efficiencies do have benefits — a fuel-efficient fleet will make you more profitable.
Used market takes a hit
Heavy-duty trucks are the second-largest source of transportation greenhouse gas emissions. The program is designed to reduce fuel consumption with more advanced technologies, such as more fuel-efficient diesel engines.
Many manufacturers have rolled out more fuel-efficient diesel technology, and they’re already seeing benefits. According to an article on DieselForum.com, “clean diesel technology is already delivering significant environmental and climate benefits. It would take 60 new clean diesel trucks to produce the same level of emissions as a truck manufactured in 1988.”
A plan that reduces emissions, raises mpg standards and adds to the price of a truck has long-term benefits. Tightening restrictions on carbon emissions from trucks could cut back on overall pollution, reduce the nation’s dependence on foreign oil and save consumers money.
“The agency’s 2020 or 2021 rules will likely push technologies that only pay back in saved fuel after a period of three or four years,” Waters says. “This could disturb markets, both for new and used vehicles.”
What's it worth?
Perhaps increased fuel efficiency standards offset the price tag of a new truck, but continued regulation changes could have damaging effects on the used truck market. Truck owners — and buyers — will no longer be able to add-on or change-out truck parts and make engine modifications to meet new regulations.
“Regulations affect vehicle owners in two ways,” Waters says. “First, regulations that do not align with TCO force customers to buy technologies they would not otherwise buy.
“Second, regulations prohibit customers from removing or rendering inoperative components installed on a vehicle or engine in order to comply with emission or fuel efficiency requirements. This means that customers cannot, for example, remove side fairings from tractors built with them in order to meet regulatory limits.
“There is, however, an exception in the regulations allowing changes to vehicles outside their regulatory useful life period when the change is meant to improve fuel efficiency, such as taking the aerodynamic sleeper off a vehicle when changing it from line-haul service to regional haul.”
More than 90 percent of all heavy-duty trucks in the U.S. are diesel powered, according to DieselForum.com. “Advancements in clean diesel technology will play a major role in helping meet future efficiency, environmental and climate goals.”
Updated medium- and heavy-duty trucks with new diesel technology could translate to higher sticker prices for consumers, but price has, and always will, factor into truck-buying decisions.
Waters sums up the bottom line for business owners who invest in dump trucks, equipment-hauling medium-duty flatbeds or vacuum trucks: “Customers should choose products that provide the best overall total cost of ownership.”
New diesel technology has made an impact on reduced fuel emissions, but at what point will the EPA stop changing regulations? Does the truck industry need to embrace these changes or step up and say ‘no more’?