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Why Walmart, PepsiCo, UPS Say Big Rig Emissions Standards Are Good for Business

Semi-truckThe much-anticipated greenhouse gas and fuel efficiency standards for big rigs was released yesterday by the EPA and US Department of Transportation and they’ve been largely applauded by the nation’s largest corporate fleets and manufacturers.

Why? Because the so-called Clean Trucks program will save fuel and operating expenses for corporate owners and provide new revenue streams for manufacturers, which stand to benefit financially from developing more efficient engines and vehicle technologies.

Fuel is the largest single cost for trucking fleets. It’s also a major contributor to greenhouse gas emissions.

The transportation sector is the second biggest contributor to US carbon dioxide emissions, and heavy-duty vehicles account for about 20 percent of these emissions and oil use in the US transportation sector — representing the biggest increase in the sector’s emissions.

“PepsiCo believes strong phase two standards for medium and heavy-duty vehicles will further enhance our efforts to improve the fuel efficiency of our fleet, while meeting environmental and business goals,” Frito-Lay North America supply chain senior director Michael O’Connell said in an email. “In our opinion, the phase two standards are balanced, with the EPA and NHTSA having done an excellent job of incorporating feedback from multiple stakeholders including manufacturers, fleet operators, private operators and environmental NGOs.”

Eaton said the new standards would deliver “significant” fuel and emissions reductions — and added that it would play a role in helping fleets achieve these benefits. “As a leading supplier of advanced transmissions, engine and powertrain components, Eaton is committed to delivering cost effective technologies that will help our customers achieve significant operational savings,” said Craig Arnold, Eaton chairman and CEO. “These new standards ensure that we both satisfy customers and protect the environment.”

The final standards are the second round of federal regulations to improve fuel efficiency and reduce GHG emissions from trucks and buses. They will require emissions be reduced by 25 percent by 2027 and apply to semi-trucks, large pickup trucks and vans, and all types and sizes of buses and work trucks.

The EPA expects the rules will lower carbon emissions by about 1.1 billion metric tons. And while they will add $27 billion in upfront costs, the agency says they will save vehicle owners fuel costs of about $170 billion, and reduce oil consumption by up to 2 billion barrels over the lifetime of the vehicles sold under the program.

“These standards will not only benefit our climate, but also modernize America’s trucking fleet, cut costs for truckers, and help ensure the US trucking industry is a global leader in fuel efficient heavy duty vehicle technology,” EPA administrator Gina McCarthy and DOT secretary Anthony Foxx wrote in a blog post.

The Clean Trucks program also includes provisions that the agencies say reduce the burden on small-businesses, such as a one-year delay in initial standards for small businesses and simplified certification requirements.

On a call with reporters, McCarthy and Foxx said fleet owners can achieve these emissions reductions through existing technologies such as improved engines and tires, better aerodynamics and vehicle weight reductions achieved by using lighter materials.

“Truck owner will recoup their investment in less than years through fuel savings,” Foxx said.

Compared to the proposed standards, released last year, the final clean truck rules achieve 10 percent more GHG and fuel consumption reductions, the agencies said.

The second-phase Clean Truck standards build on the first-ever first phase of GHG reduction and fuel efficiency standards for heavy-duty vehicles finalized in in 2011. These standards apply to model years 2014-2018; the agencies say they will result in emissions reductions of 270 million metric tons and save vehicle owners more than $50 billion in fuel costs.

The American Trucking Association said it was “cautiously optimistic” about the phase two rules and hoped the 10-year phase-in period for the regulation would not be unduly disruptive to fleets and manufacturers.

“While today’s fuel prices are more than 50 percent lower than those we experienced in 2008, fuel is still one of the top two operating expenses for most trucking companies,” said ATA president and CEO Chris Spear in a statement. “That’s why our industry has worked closely with both the Environmental Protection Agency and the National Highway Traffic Safety Administration over the past three-and-a-half years to ensure these fuel efficiency and greenhouse gas standards took into account the wide diversity of equipment and operations across the trucking sector.”

More than 300 companies called for strong final standards during the rulemaking process, including PepsiCo and Walmart, two of the nation’s largest fleets.

“We support a strong Phase 2 rule that will drive innovation in truck technologies to viable solutions at a pace that ensures the technologies will have the intended triple bottom line outcomes without unintended consequences,” said Walmart senior VP in comments to the agencies.

UPS director of advanced engineering Mike Britt called the standards “forward looking and feasible” and said the concerns that fuel-efficiency technologies won’t be reliable enough by 2027 can be avoided.

“We know technologies validated in programs like Super Truck and in labs across the country are ready for market introductions,” Britt said in a letter to the EPA. “We call on the truck and engine makers to speed the validating and deploying of higher efficiency systems and technologies. And we call on the Department of Energy and other federal and state agencies to work with the manufacturers and suppliers to provide critical funding for the development and testing of advanced truck technologies and components.”

Also yesterday, the Energy Department announced it will invest up to $137 million to develop efficiency technologies for heavy duty trucks and passenger cars. This includes $57 million for technologies that will more than double the freight efficiency of 18-wheelers.

It follows an earlier $80 million in funding for the SuperTruck II, which aims to bring to market technologies to increase tractor-trailer fuel, engine and drivetrain efficiency for 18-wheelers.

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