A Big Tent for Fuel Economy Standards

Through a recently signed Presidential Memorandum, Barack Obama is continuing the push to regulate greenhouse gas emissions from the transportation sector using its authorities under the Clean Air Act (CAA) and the Energy Independence and Security Act of 2007 (EISA). While the memorandum includes provisions for passenger cars, light-duty trucks, and support of an electric vehicle charging infrastructure, the most notable component involves vehicles that have eluded fuel efficiency regulators.

When it comes to GHG emissions and the transportation sector, the elephant in the room has been medium- and heavy-duty vehicles (freight trucks). The recently released memorandum will bring these vehicles under the regulatory umbrella and increase the likelihood that the transportation sector will contribute its share to economy-wide GHG emission reductions.

The pace of GHG emission growth from freight trucking
U.S. GHG emissions from freight trucks are growing at a staggering pace, almost doubling since 1990. Looking ahead, the U.S. Department of Energy estimates that energy consumption (a proxy for GHG emissions) from freight trucks will increase by another 40 percent by 2030 unless action is taken.

The reason GHG emissions from freight trucks have grown and will continue to grow is that trucking is the preferred mode of transportation for shipping most goods in the United States (trucks ship 70 percent of all goods by weight). Freight trucks have the advantage of an extensive network of roads as well as convenience and speed. Many businesses have adopted inventory models like Just-In Time (JIT) in order to minimize the amount of goods they hold at any given time, which lowers operating costs and increases a business’s competitiveness. The dependency on convenience and speed that JIT creates is a big advantage for trucks.

A reason for the long delay
The United States has regulated passenger vehicles for decades, but has resisted taking on freight trucks until now. Beyond the political hurdles related to regulating the trucking industry, identifying an appropriate metric has been a significant barrier to truck fuel economy regulation.

The Presidential Memorandum states that the Administration intends to reduce GHG emissions from medium- and heavy-duty vehicles while taking the market structure of the trucking industry into account. The National Academies recommends using a fuel efficiency standard that is different from the typical miles-per-gallon metric. Instead, the recommendations call for using a metric known as load-specific fuel consumption (LSFC), which is measured in gallons of fuel per payload tons per 100 miles. This metric includes the extra weight of a truck when it is carrying a payload; the lower the fuel consumption of the vehicle and the higher the payload the vehicle carries, the lower the LSFC.

Impact of fuel efficiency standards
It is impossible to assess the impacts of new regulations on freight trucks until more details are available. However, existing federal programs offer insight into the potential for fuel efficiency improvements with freight trucks. For instance, implementing U.S. EPA’s SmartWay program could improve fuel efficiency by 18 percent for heavy-duty long haul vehicles, which account for about 75 percent of the fuel used by U.S. freight trucks. Estimates are that such a program would pay for itself in fuel savings in about 3 years.

For decades, the United States has used fuel efficiency standards to reduce oil consumption and increase energy security. More stringent CAFE standards announced by the Obama Administration in May of 2009 and finalized on April 1, 2010, were truly a harbinger of things to come. The Obama Administration has made it clear that it will expand the scope of fuel efficiency standards to bring more vehicles into the fold.

Nick Nigro is a Solutions Fellow