Strong Truck Standards Cut Costs and Emissions

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By Carol Lee Rawn, Director, Transportation Program
Ceres Posted on Jun 04, 2015

Next week, we expect to see proposed federal regulations governing the fuel economy of freight trucks. This is a big deal from both an economic and an environmental perspective — an important opportunity to take a big bite out of carbon emissions and freight costs.

The freight truck sector plays a major role in our transportation system, and is projected to grow significantly. Heavy trucks move 70 percent of U.S. freight, and U.S. businesses spend $650 billion a year on freight trucking services. Truck travel is projected to increase 48percent by 2040. Freight trucks account for over half a billion tons of GHG emissions a year, and are the fastest growing single source of GHG emissions in the U.S. Clearly, we need strong truck standards to control future growth in both freight costs and emissions, as well as to reduce our dependence on oil.

Amazingly, trucks were not subject to fuel economy standards until 2011, when the first ever fuel efficiency/GHG standards for medium and heavy duty trucks were adopted. These standards, called Phase 1 (model years 2014 through 2018), will save vehicle owners and operators an estimated $50 billion in fuel costs and save a projected 530 million barrels of oil over the life of a vehicle. (Note that the truck standards apply to a wide range of medium and heavy duty trucks, from delivery vehicles and garbage trucks to tractor trailers.) While the Phase 1 regulations were a good start, we have the technology to cut fuel consumption 40 percent by 2025 (compared to 2010 levels).

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We expect to see the proposed Phase 2 regulations shortly, and there  will be  a public comment period before the regulations are finalized next year.

Strong standards are good for companies’ bottom lines. A recent Ceres/EDF analysis shows that strong, technically feasible Phase 2 standards that cut fuel consumption by 40 percent (compared to 2010 trucks) would result in significant cost savings; an annual savings potential of $34 billion, and a 6.8 percent reduction in freight costs, by 2040. Shippers (those who hire trucking services) bear the bulk of fuel costs, and would especially benefit from strong standards.

Astute companies recognize the advantages of fuel efficient trucks; more than 300 companies, including PepsiCo and IKEA Distribution Services, and business advocacy groups signed a letter for strong standards.  In addition to providing cost savings, strong standards benefit the growing list of companies that are concerned about reducing their carbon footprint. Strong standards will increase the availability of fuel efficient trucks, making it easier for companies to meet carbon or fuel reduction goals.

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Investors also recognize the value of strong standards in driving innovation to make the trucking industry and suppliers of advanced technologies more globally competitive. Federal regulations governing the fuel efficiency and GHG emissions of heavy duty trucks  provide an enormous opportunity for investing toward the Clean Trillion goal in the transportation sector, which is responsible for nearly 30 percent of greenhouse gas emissions in the United States, and is a growing source of emissions globally.

In short, strong standards are good news for America’s economy and environment. Lower freight costs will benefit companies and consumers.  And just as the passenger car fuel economy standards are making the U.S. auto industry more globally competitive, so too will strong truck standards drive innovation in that industry. Strong truck standards are a win for the economy and the planet.

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