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EPA Response to GTA Comments for Joint Rulemaking

Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles

The Green Truck Association (GTA) solicited comments in December 2010 from GTA members on the standards proposed jointly from the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) calling comments on their proposed greenhouse gas (GHG) reduction and  fuel efficiency  standards applicable to medium- and heavy-duty trucks. GTA prepared and submitted comments to the agencies on members’ behalf in January 2011.

The following synopsis summarizes comments submitted by members as well as corresponding responses from the agencies. The agency responses are overwhelmingly favorable to GTA comments.

Although the proposed standards have not been made into final rules as part of the truck efficiency rules announced Aug. 9, the GTA expects that they will be published in the federal registry shortly.

GTA: General Support for Final Rule

The GTA supports the agencies’ regulatory approach to this complex issue. Recognizing the diversity of the medium and heavy truck market and applying different regulatory approaches to differing segments of the industry is appropriate and reasonable. [EPA-HQ-OAR-2010-0162-1596.1, p.1]

 

As Congress, during its deliberations on the Energy Independence Security Act (EISA) legislation, and the agencies throughout this rulemaking have recognized, commercial trucks and passenger cars are dramatically different, not simply in size but in use and manufacture as well. Creating a regulatory approach that differs from the traditional corporate average fuel economy system for passenger cars was necessary and would be accomplished through these regulations. [EPA-HQ-OAR-2010-0162-1596.1, p.1]

 

We recognize that this rulemaking requires a fairly compressed time frame which may not allow for the flexibility that might be available during future rulemakings on this issue. Nonetheless, we believe there exist opportunities within the advanced and innovative technology sections that should be explored to promote their use and development. We feel also that alternative fuels play an important role in greenhouse gas reduction and energy independence and that they could be further incentivized through this or future fuel efficiency rulemakings. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

We support the goals and general approach of this rulemaking. As recognized in this rulemaking, commercial trucks have far less homogeneity than passenger cars. Trucks can be built in an almost infinite number of configurations and for widely divergent tasks. Dividing the truck universe into three categories will allow for better and more appropriate regulations. [EPA-HQ-OAR-2010-0162-1596.1, p.4]

GTA: Vocational Trucks

The majority of our comments concern the vocational truck category. These trucks serve a much different purpose than do passenger cars and also are built in a much different process than are passenger cars. A vocational truck begins when an original equipment manufacturer (OEM) builds a chassis that includes the engine and transmission, then one or more companies (known as intermediate or final-stage manufacturers, depending on their place in the manufacturing process) install a work-related body and/or equipment specific to the needs of the customer. Trucks of this type include, but are not limited to, aerial bucket trucks, digger derricks, step vans, ambulances, snow removal trucks, dump trucks, utility trucks and tow trucks. The number of buildable chassis, body and equipment configurations is enormous. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

The marketplace demands such a wide variety of configurations for reasons of efficiency. Unlike passenger cars, commercial trucks are purchased to work. The more efficient a truck is in performing its intended function and the less costly it is to operate, the better. Efficiency is created by matching the proper chassis to the proper body and work-related equipment for a particular set of work tasks. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

Not uncommonly, when the chassis for a vocational truck is built, the OEM will not know the truck’s final application. Once known, additional components may be added by intermediate or final stage manufacturers to enhance fuel efficiency based on the vehicle’s expected use. It is of benefit to the owners of such trucks and the public that any such fuel-saving devices be promoted. [EPA-HQ-OAR-2010-0162-1596.1, p.4]

Response:

The agencies recognize the vast diversity in the vocational vehicle segment. To establish standards for a complete vocational vehicle, it would be necessary to assess the potential for fuel consumption and GHG emissions improvement for each of these vehicle types and to establish standards for each vehicle type. Because of the size and complexity of this task, the agencies judged it was not practical to regulate complete vocational vehicles for this first fuel consumption and GHG emissions program, and these comments provide support for that conclusion. To overcome the lack of information as to baselines from the different vehicle types and to still achieve improvements in fuel consumption and reductions of GHG emissions, the agencies proposed to set standards for the chassis manufacturers of vocational vehicles (instead of the body builders) and the engine manufacturers. Chassis manufacturers represent a limited number of companies as compared to body manufacturers, which are made up of a diverse set of companies that are typically small businesses. These companies would need to be regulated if whole vehicle standards were established.

GTA: Averaging, Banking and Trading

We encourage the agencies to modify the averaging, banking and trading (ABT) system such that entities installing fuel-saving components after the chassis has been completed be recognized and rewarded. Technology and alternative fuels should be on a level playing field. The intermediate and final-stage manufacturers and alterers should be allowed appropriate incremental credits for the incremental improvements in fuel efficiency and greenhouse gas reduction they can demonstrate over and above the OEM-certified truck. [EPA-HQ-OAR-2010-0162-1596.1, p.4]

Response:

The agency welcomes innovation and the use of advanced technology to achieve greater greenhouse gas emission reductions and improved fuel consumption performance. To that end, the agency has provided for additional incentive for the use of Advanced Technology Credits, as well as Innovative Technology Credits which have the intent of providing an additional incentive for those market participants that choose to innovate to achieve reductions beyond those technologies that the agency identifies as readily available. The advanced technologies include hybrid systems, as well as engines equipped with Rankine cycle strategies, all electric vehicles and fuel cell vehicles. For those technologies which offer improvements and benefits that are not currently reflected by or included in the existing test cycles or as an input to the GEM, manufacturers may choose to obtain innovative technology credits. Should a manufacturer choose to certify using either of these options, they are free to do so whether they are the original equipment manufacturer or a secondary manufacturer. Any certificate holder will need to meet the obligations associated with certification to obtain credits.

GTA: Early, Advanced Technology, and Innovative Credit Provisions

The GTA supports the recognition of advanced technologies in the ABT. The proposed provisions would create incentives to incorporate technologies such as hybrid systems and electric vehicles by making them eligible for special credits. These credits could be applied to other vehicles or engines, including those in other categories. The ABT system could potentially accommodate some level of multiplier to further incentivize such technology. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

In considering advanced technologies that would qualify for ABT, the GTA believes that any idle-reduction technology should be included. The GTA feels also that things such as advances in specialized and lighter weight materials and others should be included, not only driveline technologies. [EPA-HQ-OAR-2010-0162-1596.1, p.2].

 

The GTA believes that providing a credit multiplier of 1.5 or 2.0 is appropriate and reasonable to provide an additional incentive to incorporate new advanced technology. In addition to a base multiplier of 1.5 or 2.0, the agencies should consider the possibility of additional incremental multipliers for incremental improvements provided by advanced technology over and above the baseline. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

Advanced technology can help reduce greenhouse gas emissions and increase fuel efficiency while reducing foreign oil dependency and should be promoted. Despite these benefits, advanced technology can face an economic hurdle as it can be more expensive than traditional methods of fuel usage reduction. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

An ABT multiplier can help level the playing field for more expensive technologies which will help speed their adoption by the marketplace. Making those credits usable across heavy-duty categories helps also to increase the incentive value for advanced technologies. [EPA-HQ-OAR-2010-0162-1596.1, p.2]

 

The agencies should also consider allowing additional companies to participate in the ABT system. Often, the intended use of the completed truck is unknown as the chassis is being built. Understanding the intended use of the truck can allow for the application of appropriate advanced technologies that might not make sense on that particular chassis for other work purposes. As such, not all advanced technologies are necessarily installed by the engine or chassis manufacturer or by the time the chassis is completed. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

For instance, there are hybrid systems for heavy-duty trucks that will be utilized at the worksite to power truck-mounted electrical and hydraulic equipment that can be, and are being, installed by later-stage manufacturers. Indeed, such systems can be retrofitted to fully completed trucks. These hybrid systems, tied to the power takeoff (PTO) unit, can reduce diesel fuel usage at idle by 50 percent or more. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

To best incentivize the use of advanced technologies, the entity installing the applicable technology should be given control of the credits. We recognize this would add complexity to the ABT system but it would greatly promote the end use of advanced technologies. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

The GTA supports the agencies’ proposal to provide ABT credits for new and innovative technologies that reduce fuel consumption and CO2 emissions. We would suggest, however, that those credits not be restricted to the subcategory within which they were generated. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

Any technology that reduces greenhouse gas emissions and increases fuel efficiency creates societal benefits — not simply benefits that are restricted to one segment. The ABT credits accrued should be usable across vehicle lines and classes as the benefits for which they were earned are not limited. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

Similar to the advanced technology credits, also we would suggest that these credits be made available to entities other than the engine manufacturer or OEM that may install them after completion of the chassis. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

The GTA believes that providing a credit multiplier of 1.5 or 2.0 is appropriate and reasonable to provide an additional incentive to incorporate new and innovative technology. In addition to a base multiplier of 1.5 or 2.0, the agencies should consider the possibility of additional incremental multipliers for incremental improvements provided by new and innovative technology over and above the baseline. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

Innovative technology should be well incentivized as it requires risk-taking and investment to develop. It is through new inventions and new applications of technology that we will see breakthrough improvements in fuel efficiency and greenhouse gas reduction. Technological developments of this caliber may well come from small companies or individuals. Those entities should not be faced with putting that technology directly in the hands of another company in order to fully benefit from the ABT system. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

Response:

Advanced Technology Credits

The agencies received comments from Bendix, Bosch, MEMA, Navistar, Odyne, Green Truck Association, Eaton, ArvinMeritor and Calstart, which supported the 1.5 multiplier for advanced technology credits. MEMA argued that these added flexibilities are absolutely necessary to help advanced technologies penetrate the marketplace and are the primary impetus to integrate these technologies onto vehicles given the technologies’ costs. The agencies also received comments from several stakeholders, including ACEEE and Cummins opposing the 1.5 multiplier for advanced technology credits. ACEEE argued that multipliers should be avoided because they lessen the total emission reductions by allowing a greater increase in the emissions of other vehicles than they offset. After reviewing these comments, the agencies have determined that the relatively low volumes expected in this timeframe are likely to mitigate any potential adverse impact. Further, the credit multiplier will provide enough added benefit to the potential hybrid community to help reduce barriers to market entry for these technologies. Therefore, the final rule includes a multiplier of 1.5 for advanced technology credits.

 

The agencies are also capping the amount of advanced credits that can be brought into any averaging set into any model year to prevent market distortions.

Innovative Technology Credits

 

In response to the NPRM, the agencies received numerous comments relating to all aspects of the innovative technology credit flexibility provision. The vast majority of the commenters supported this provision as proposed, but have requested further clarification, so the agencies are adopting the full provision as proposed and providing further discussion that addresses and clarifies the provision in response to the comments solicited and the comments received.

 

A number of organizations, including DTNA, MEMA, Navistar, Green Truck Association, Eaton, ACEEE and NESCAUM, commented that technologies such as advanced transmissions, engine cooling strategies, idle reduction, light-weight components (including light-weight engines) and advanced drivelines should be able to receive credit through the innovative technology program. The agencies agree with these commenters. The NPRM did not provide a specific list of technologies that the agencies would consider “innovative” because the agencies intended that an innovative technology could be any technology that can be proven to reduce CO2 emissions and fuel consumption but for which the benefits are not captured utilizing the FTP procedures, SET procedures and GEM methodology used to determine compliance with the emission and fuel consumption standards. Technologies which are inputs to the GEM for combination tractors, but not for vocational vehicles, may be considered for innovative technologies in vocational vehicles. Any of the suggested technologies could be considered as an innovative technology if the associated emission and fuel consumption benefit has not already been considered in developing the standard and similarly if the technology is not already in substantial use in the heavy-duty sector, if the associated emission and fuel savings can be measured and validated, and if the technology and measurement methodology have been approved by the agencies.

GTA: Incentives for Alternative Fuels

The rule should recognize the value of alternative fuels as being both clean and a way of reducing dependence on foreign oil. (Energy Independence Security Act). [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

Incentive credits could be crafted based on a combination of oil displacement and GHG reduction. [EPA-HQ-OAR-2010-0162-1596.1, p.3]

 

For instance, compressed natural gas (CNG) is a natural gas that is extracted from wells and compressed. Natural gas is a fossil fuel comprised mostly of methane and is cleaner burning than gasoline or diesel fuel (natural gas produces 22 to 29 percent less greenhouse gas emissions than traditional diesel or gasoline-powered vehicles). Increased usage of natural gas as a transportation fuel also will contribute to the EISA goal of decreasing our nation’s dependence on foreign oil. [EPA-HQ-OAR-2010-0162-1596.1, pp.3-4]

 

Propane autogas is the leading alternative fuel in the United States and the nation’s third-most common on-road vehicle fuel after gasoline and diesel, according to the U.S. Department of Energy. It fuels more than 270,000 vehicles in the United States, including pickup trucks, vans, shuttles, taxis, delivery vehicles and school buses. Worldwide, the number of on-road vehicles fueled by propane autogas is more than 13 million. [EPA-HQ-OAR-2010-0162-1596.1, p.4]

 

Studies show vehicles fueled by propane autogas reduce greenhouse gas emissions by 17 percent, create 20 percent less nitrogen oxide, up to 60 percent less carbon monoxide and fewer particulate emissions for the environment than vehicles fueled by gasoline. These vehicles achieve comparable horsepower, torque and towing capacity as gasoline-fueled equivalents. In addition to emissions reductions, 90 percent of propane used today comes from domestic production sources, meaning propane autogas used to fuel vehicles plays a strong role in lowering national dependence on foreign oil. [EPA-HQ-OAR-2010-0162-1596.1, p.4]

 

Allowing a subsequent stage vehicle or component manufacturers to participate in the credit system further incentivizes the development of new and innovative fuel-saving technologies. Such a system would need to include a simplified process by which the technology can be assessed as many new technologies are likely to be developed by manufacturers with limited resources, in comparison to an OEM. [EPA-HQ-OAR-2010-0162-1596.1, p.4]

Response:

The agencies received several comments arguing for greater crediting of NGVs than the proposed approach would have provided. NGV interests commented that the NPRM ignored Congress’ intent to incentivize the use of NGVs by not including the conversion factor that exists for light-duty vehicles under EPCA/EISA. The commenters argued that Congress’ intent to incentivize NGVs is evident in the formula contained in 49 U.S.C. 32905, which deems a gallon equivalent of gaseous fuel to have a fuel content of 0.15 gallon of fuel. The commenters also argued that Congress implicitly intended NGVs to be incentivized in this rulemaking, as evidenced by the incentives for light-duty vehicles fueled by natural gas. Commenters also suggested that the agencies were not including the NGV incentive from light-duty because Congress did not explicitly include it in 49 U.S.C. 32902(k), and argued that this would contradict the agencies’ inclusion of other incentives similar to those in the light-duty rule.

 

The agencies continue to believe that alternative-fueled vehicles, including NGVs, provide fuel consumption benefits that should be accounted for in this program. However, the agencies do not agree with the commenters’ claim that the NGV incentive contained in the light-duty program is an explicit Congressional directive that must also be applied to the heavy-duty program, nor that the light-duty incentive for NGVs should be interpreted as an implicit Congressional intent for NGVs to be incentivized in the heavy-duty program. Furthermore, the agencies believe that the fuel consumption benefits that FFVs will obtain in engine test cycles accurately reflects their energy benefits and thus provides sufficient incentives for these vehicles. The agencies would like to clarify that the decision not to include an NGV incentive was based on this determination, not on a belief that incentives present in the light-duty rule could not be developed for the heavy-duty rule if they were not explicitly included in Section 32902(k).

The agencies have reviewed this issue and continue to believe that the light-duty conversion factor is not appropriate for this rule. Instead, the agencies are finalizing a conversion process from CO2 to fuel consumption that we believe accurately reflects the fuel consumption of the vehicles while at the same time providing a significant incentive for the alternative fuel use. Using the agencies’ calculation, NGVs will exhibit an approximate 20 percent benefit over conventional fuel use. We believe this is a substantial enough advantage to spur the market for these vehicles. The calculation at the same time does not overestimate the benefit from this technology, which could reduce the effectiveness of the regulation. Therefore, the final rule does not include the light-duty 0.15 conversion factor for NGVs.

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