Heavy-Duty Phase 2 GHG NPRM Overview for SBA Roundtable EPA Presentation July 29 2015.pdf

Proposed Phase 2 Fuel Efficiency and GHG Emission Standards for Heavy-Duty Vehicles Small Business RoundtableJULY20151Overview EPA and NHTSA have jointly proposed a second phase of greenhouse gas (GHG) and fuel consumption standards Currently requesting comment on these proposed standards Also requesting comment on related compliance provisions GHG reductions from heavy-duty trucks are an important part of the Presidents Climate Action Plan As proposed, Phase 2 would reduce GHG emissions by a billion tons Proposed regulations include flexibilities for small businesses Intended primarily to help them comply Considering additional flexibilities2360%20%9%3%2%6%Light-Duty VehiclesHeavy-Duty Trucks and BusesAircraftShips and BoatsRailOther (Motorcycles,Pipelines, Lubricants)Heavy-DutyU.S. Transportation Sector Energy UseSource:U.S. Energy Information AdministrationAnnual Energy Outlook 2014 Heavy-duty vehicles responsible for about one fifth of the energy use and GHG emissions from transportation sources In terms of energy use, heavy-duty vehicles are also the fastest growing transportation sector in the U.S. and globally4Heavy-DutyLarge Pickups & Vans14% of HD Fuel Consumptionand GHG InventoryStandards in g/mileand gallons/100 milesVocational Vehicles21% of HD Fuel Consumption and GHG InventoryStandards in g/ton-mileand gallons/1000 ton-milesLine-Haul Tractors65% of HD Fuel Consumption and GHG Inventory (together)Standards in g/ton-mileand gallons/1000 ton-milesHeavy-Duty Truck CategoriesLine-Haul Trailers(currently unregulated Federally)Phase 1 Highlights Phase 1 heavy-duty fuel efficiency and GHG standards began in 2014 First-ever standards for heavy-duty vehicles, will be fully phased in by 2018 A coordinated national program: manufacturers produce a single fleet to comply with all federal standards Manufacturers are complying with off-the-shelf technologies Very cost-effective technologies lead to fuel-savings greater than the technology costall standards pay back Phase 1 implementation in 2014 was very successful Market has been very accepting of improvements Sales higher than before Phase 1 began Some early compliance, no apparent non-compliance5Proposed Phase 2 Program Overview Proposed Phase 2 standards are generally performance-based Manufacturers can choose technology pathway that works best for their customers The exception: less flexibility was proposed for non-box trailers to minimize complexity Program informed by a comprehensive assessment of advanced technologies and extensive stakeholder outreach Proposed Phase 2 standards would begin as follows: In 2018 for EPA trailer standards, which were not regulated in Phase 1(NHTSAs voluntary until 2021, due to EISA requirement) In 2021, Phase 2 standards begin for all other HD categories, along with the full trailer program All standards increase incrementally in 2024 and would be fully phased in by 2027 The level of the proposed standards are based on the following: Nearly full use of most existing Phase 1 technologies with additional optimization Increasing use of emerging and advanced technologies by 20276Summary of Phase 2 Proposal GHG and Fuel Reductions, Costs and Benefits7Proposed Phase 2MY 2018-2029(beyond Phase 1)*GHGEmissions Reductions1 billion metric tons (CO2-equivalent)Reductions in Fuel Use1.8 billion barrels of oilBillions of 2012$ Fuel Savings $170Cost to Industry $25Net Benefits to Society $230*Preamble and Draft Regulatory Impact Analysis present a range of estimates of costs and benefits to reflect range of analyticalbaselines, discount rates and modeling approaches. Annual GHG Reductions from Adding Phase 2 Proposal to Existing Phase 18600700800900100011001200GHG (MMT CO2eq)Calendar YearPhase 1 ReductionPhase 2Proposal ReductionPer Vehicle Costs and Payback9Projected Average Cost Increase for MY 2027 Vehicle(Relative to 2018 vehicles)Tractors $11,700 (