Making trucks cleaner in the G20: Experiences from America, Europe and international collaboration

25 Jun 2018

Heavy-duty trucks and buses represent only a small fraction of the road transportation fleet in G20 economies, but are responsible for a large portion of CO2 emissions and local air pollutants that contribute to increased incidence of chronic diseases and premature deaths. Yet, the stringency of environmental protections and energy efficiency standards varies substantially among G20 economies. To date, only five countries have enacted heavy-duty vehicle (HDV) efficiency standards: Canada, China, India, Japan, and the United States, and the European Commission recently proposed to introduce them in the EU. To address these policy gaps, the G20 Transport Task Group is supporting countries through policy exchanges, capacity building activities, and in-depth technical collaborations.

The IPEEC Newsletter spoke to three subject matter experts about how their respective organisations are working to address the issue of growing freight energy consumption and pollutant emissions: Mr Jim Blubaugh, Director of International Transportation and Air Quality, U.S. Environmental Protection Agency (U.S. EPA); Mr Alexandre Paquot, Head of Road Transport Unit, Directorate General for Climate Action (DG CLIMA), European Commission; and Mr Drew Kodjak, Executive Director, International Council on Clean Transportation.

 U.S. perspective: Interview with Jim Blubaugh (U.S. EPA)

Jim Blubaugh is the International Director of the Office of Transportation and Air Quality at the U.S. EPA, that is responsible for implementing national emission standards for transportation fuels and vehicles. The Transportation Office is comprised of nearly 350 employees that work on addressing the adverse impact of transportation on air pollution and public health.

IPEEC: Jim, great to meet up with you today. The U.S. has been a leader in developing and introducing efficiency standards for HDVs. Could you please tell us what first motivated the EPA to address this issue?

Jim Blubaugh: Our initial motivation was less pollution, increased economic benefits, and ultimately providing the American people with the significant health benefits that come with cleaner vehicles.  

The United States is expected to see freight activity grow by nearly 50% over the next 25 years. The U.S. freight system moves over 20 billion tonnes of domestic freight per year equal to approximately USD 19.2 trillion. It is an essential force in our economy, made up of a vast, complex network of almost seven million miles of roadways, railways, and navigable waterways. Trucking represents the backbone of U.S. freight transport, employing over 7 million people in trucking related jobs. Globally, total freight transport volumes are projected to more than triple by 2050.

With these explosive growth projections comes potentially more pollution. Improving the environmental footprint of the trucking industry is therefore a priority in the U.S to cut pollution and achieve health benefits not only in the U.S., but also around the world.

For the initial part of the programme, we estimated the standards would reduce CO2 emissions by about 270 million metric tonnes, save about 530 million barrels of oil over the life of vehicles built for the 2014 to 2018 model years, provide USD 49 billion in net programme benefits, and enable USD 50 billion in fuel savings for vehicle owners, or USD 42 billion in net savings.

IPEEC: When you developed the legislation, only Japan and China already had such regulation in place. How did you go about drafting the new regulations?

Jim Blubaugh: As we utilise the authority that we have under the Clean Air Act[1], developing new regulations is always a challenge.

For the first phase of the programme, we largely capitalised on the technologies and strategies that were already being deployed within the freight community and promoted by U.S. EPA SmartWay Transport Program, which aims to help freight shippers, carriers, and logistics companies improve fuel-efficiency and save money[2]. One of the most important steps that we took early on was to talk with manufacturers, the trucking industry and other stakeholders, about how this programme could look. Having the support of these important stakeholders to help shape these standards helped unleash innovation to develop and/or enhance fuel efficient technologies that work best for these vehicles. This approach also resulted in giving the industry more time and flexibility to develop compliance plans, and in holding them accountable for meeting the standards.

Now, we have standards that reduce pollution and also modernise America’s trucking fleet – a win for both the environment and truck owners. With a payback period of about two years, these investments in fuel efficient technology will continue to save truck owners money over the long haul.  

IPEEC: How do you see this experience benefiting other countries?

Jim Blubaugh: Many nations seek to emulate our environmental transportation policy so we feel it is incumbent upon us to share our experiences and technical expertise.  While we recognise that every country has unique challenges, we view country collaboration and experience-sharing as important steps for the U.S. and for those economies looking to move forward in their own transportation programmes.

We take this cooperation seriously both in learning from others and in sharing our own knowledge and experience. We do this in many different forums. Of course, one of the key activities for us in this regard is the G20 Transport Task Group. This group is an essential forum to build bilateral and multi-lateral relationships, as well as to share technical expertise and experience regarding environmental transportation policy.

What worked really well in the U.S. was to establish a freight efficiency public/private partnership programme that allowed freight shippers and carriers to become partners with their respective government agencies i.e. the SmartWay Program. The Program has been a success because its participants share a common goal – to advance more sustainable transportation. The strength of the programme has been acknowledged by other countries, and similar programmes have started in China, Mexico and South Korea, just to name a few. The U.S. EPA and Natural Resources Canada have even expanded it into Canada, creating one seamless programme across our extensive shared border.  As such, it has served as a template for other countries to emulate.

IPEEC: Many thanks Jim, and wishing you all the best for your continued and important efforts at EPA.

Jim Blubaugh: Many thanks.

[1] The Clean Air Act is an American federal law targeting air pollution, and one of the first important environmental laws in the United States.

[2] The SmartWay program is a public/private collaboration between the U.S. EPA and the freight transportation industry which helps companies advance supply chain sustainability by measuring, benchmarking, and improving freight transportation efficiency.

European perspective: Interview with Alexandre Paquot (DG CLIMA, European Commission)

Alexandre Paquot has been heading the Road Transport Unit at the Directorate General “CLIMA” of the European Commission, which is responsible for defining and execution the Union’s climate strategy and action.

IPEEC: Alex, thanks for talking with us today. Europe is moving ahead with the introduction of mandatory CO2 standards for HDVs. Could you tell us a bit more about the Commission’s proposal?

Alex Paquot: CO2 emissions from HDVs currently account for around 6% of total CO2 emissions in the EU and a quarter of the EU's road transport CO2 emissions. Projections indicate that HDV CO2 emissions will grow by around 10% in the period 2010-30 if no measures are taken, so action is needed to curb them.

On 17 May 2018, the European Commission proposed for the first time to regulate these emissions. This is an important addition to the EU legislative framework to address GHG emissions from road transport, following legislation on CO2 emissions from cars and vans[3].

CO2 emission standards are proposed for large trucks, which account for around 65-70% of all CO2 emissions from HDVs. In 2025, average CO2 emissions from new trucks registered in the EU will have to be 15% lower than in 2019. For 2030, an indicative reduction target of at least 30% compared to 2019 is proposed.

As part of an early review in 2022, the scope of these standards will be extended to other types of HDVs such as smaller trucks, buses, coaches and trailers. During this review, the Commission will also make a proposal to determine the target for 2030.

The proposal provides flexibilities for a cost-effective implementation, allowing banking and borrowing of CO2 credits. This will reduce compliance costs for manufacturers, taking into account the long development cycles of the industry, while safeguarding the environmental integrity of the targets.

The proposal also includes incentives for zero- and low-emission vehicles in the form of a "super-credits system". These vehicles will be counted as more than one vehicle in the determination of the specific emissions of a manufacturer for compliance with the target. A cap is set to avoid excessive weakening of the CO2 target. These incentives should help the sector and public authorities in developing an EU market for these vehicles, fostering innovation and investments in these technologies.

Provisions to ensure compliance include financial penalties in the order of EUR 6,800 for each gramme of CO2 per tonne-kilometre exceeding a manufacturer’s target as of 2025. The proposal also provides for the monitoring of real-world emission data and for the introduction of in-service conformity tests, coupled with a mechanism to adjust the reported emissions in case of significant deviations from the values that are required for vehicles when they are tested for conformity.

IPEEC: What benefits do you expect with the introduction of these standards?

Alex Paquot: The CO2 emission reduction targets are in line with the EU's commitments under the Paris Agreement to reduce economy-wide CO2 emissions at least by 40% by 2030. An impact assessment thoroughly analysed the costs and benefits of the proposed HDV standards, and found that approximately 54 million tonnes of CO2 could be saved between 2020-30[4], while lowering air pollutant emissions such as nitrogen oxides (NOx) and particulate matter (PM2.5). Therefore, they will not only mitigate climate change but also bring better air quality for citizens.

In addition, it is expected that the standards will lead to lower costs for transport operators and their clients, as fuel savings will greatly offset the additional costs of new trucks equipped with CO2 reduction technologies. The net savings during the first 5 years of use are expected to be around EUR 25,000 for an average new truck bought in 2025, and second-hand truck users would also benefit.

Finally, the proposal will have a positive impact on employment, creating up to 25,000 jobs in 2025. The standards will foster investments in research and development of new technologies, helping the automotive industry in the EU retain its global technological and innovative leadership and its access to markets worldwide.

IPEEC: Thank you Alex, and good luck with the negotiations ahead and busy months to come!

Alexandre Paquot: Thank you very much. 

[3] The EU has 2015 and 2021 targets which represent reductions of 18% and 40% respectively compared with the 2007 fleet average of 158.7 grammes of CO2 per kilometre (g CO2/km). See more here.

[4] This is equivalent to the total annual emissions of Sweden.

Views on international collaboration: Interview with Drew Kodjak (ICCT)

Drew Kodjak is an environmental attorney with 25 years of experience working with governments to address air pollution from vehicles and fuels. Mr. Kodjak is currently the executive director of the International Council on Clean Transportation, an organization that he founded in 2005 to support governments in the top vehicle markets develop policies to improve the environmental performance and energy efficiency of all modes of vehicles and fuels

IPEEC: Drew, great to have you here today. The ICCT is currently providing technical expertise to G20 economies such as Brazil and Argentina to help regulators understand and acquire the necessary tools to measure the energy consumption of HDVs. Could you please tell us how the idea of such a collaboration came about, and what it entails?. 

Drew Kodjak: Over the course of my career, I’ve always had a strong interest in the development and promotion of fuel economy standards for HDVs. When HDV standards were first developed by Japan in 2005, I figured that this was a golden opportunity to help nations align the processes, procedures, stringency and timing of future standards, and in 2013 and 2014, the ICCT organised workshops in San Francisco and Beijing with government officials from the U.S., China, Europe, Japan and Korea to explore this idea.

From this effort, we learned that the most attractive target for alignment was around the computer simulation software tool that is used to determine compliance. These tools simulate the vehicle’s energy efficiency based on a variety of inputs provided by the manufacturers (e.g., engine efficiency, aerodynamics, weight, transmission, tire efficiency, etc.). As both the U.S. and E.U. had developed their own simulation models (GEM and VECTO, respectively) – and spent extensive time and effort working with manufacturers and leading academics to do so - it made little sense for other nations to duplicate years of work to reinvent a universal software tool.

In addition to that, I had also been aware for many years that the HDV industry had been calling on governments to align regulatory tests and procedures to diminish administrative burdens. For example, each year, the three major industry associations - EMA, ACEA, and JAMA[5] - issue statements calling for such harmonisation.

A number of G20 countries were already considering energy efficiency regulations for HDVs, including India, Brazil, Mexico, and South Korea. We therefore decided to kick off a project through the G20 Transport Task Group called “deep dive” to exchange technical information on the simulation models and regulation among interested countries, drawing from the U.S., Canada and Europe’s  experience and interest in supporting other nations to understand GEM and VECTO simulation tools.

These “deep dives” have expanded the scope of the G20 work on transport efficiency, adding a practical implementation element to its traditional role of issuing high-level political commitments. I am very thankful to my staff at the ICCT for their excellent support to the deep dives and for the expert technical analysis they continue to provide.

IPEEC: How do you see the global heavy-duty vehicle industry evolving in the years to come, and how is it keeping track with our climate objectives, as agreed at COP 21 in Paris? What further actions by the G20 and other economies are needed to tackle the issue of rising energy consumption and emissions from the freight sector? 

Drew Kodjak: A great deal is already happening in the HDV sector. U.S. and Canadian standards are expected to double fuel economy from the tractor-trailer[6] segment by 2027. Europe just proposed a 30% CO2 reduction by 2030. Other economies such as India, Brazil, Mexico, and South Korea are considering some form of standards. This regulatory activity has inspired the private sector to shift more resources into energy efficiency technologies. In parallel, there are a number of zero emission technologies under intense development. China now leads the world in production and sales of battery-electric buses. There are three technology options competing for the lead on long-haul tractor-trailers (i.e., Siemens with electrified highways; Tesla with a battery-powered big rig; and Nikola, a start-up, with a hydrogen fuel cell tractor-trailer). In addition to aligning simulation modeling tools for energy efficiency standards, the G20 economies can also help the industry develop by collaborating on support for various Zero Emission Vehicle technologies (e.g., R&D, infrastructure). All of this is very encouraging and the work of the TTG, ICCT and of individual G20 economies all adds up in support of continued progress in this field.

IPEEC: Thank you Drew for sharing this with us today.

Drew Kodjak: My pleasure, thank you. 

For more information on the Transport Task Group click here.

[5] EMA: Truck and Engine Manufacturers Association; ACEA: European Automobile Manufacturers' Association; JAMA: Japan Automobile Manufacturers Association

[6] The ‘tractor’ refers to the engine that provides the power to carrying the towed load, or ‘trailer’.