Can We Create a Win-Win Policy for the Trucking Industry?

Rocky Mountain Institute’s Transformational Trucking Charrette looks to integrate emissions and efficiency for maximum environmental benefit

When the auxiliary power unit (APU) was first developed, it quickly made its way into trucking fleets across North America because of the numerous direct benefits it offered across the entire value chain. Drivers were happy because APUs warmed their cabs in even the coldest conditions without running the truck's engine. Environmentalists were happy because truckers no longer had to idle during their required down-time. Fleet owners were happy because this cost-effective technology allowed for less engine use and lowered costs for fuel and maintenance.

Fast-forward to 2007, when particulate matter mandates required the installation of a particulate filter to reduce emissions. At an added cost ranging from $8,000 to $9,000 per filter, along with the burden of installation, emissions regulations have caused completely unintended consequences. Owners simply stopped installing APUs because while particulate matter requirements were nationwide mandates, anti-idling laws applied in only a few states. Many of the smaller APU manufacturers risked losing market share in California because there, they sell an engine without an after-treatment. Yet, APU manufacturers didn’t have the capital to develop the technology and effectively transition into that market.

Rocky Mountain Institute’s Chief Scientist Amory Lovins advises that without an understanding of complex interconnections in a system, often the cause of unintended problems are solutions. Effective technologies mean very little if they are not considered in the whole system. The same can be said for policies or regulations that seek to make large-scale environmental improvements. There is no “quick fix” to a problem that lies at the intersection of complex issues like volatile oil prices and emissions that contribute to global climate change. Without a broad view of the basic problems, but, more importantly, the intended outcomes, you risk policies that, in spite of positive intentions, can cause costly problems.

There are many policies and regulations that seek to mitigate the environmental impact of the trucking industry on both the state and federal level.

Characteristically, government policies react to public concerns such as personal health, clean water, and clean air. For this reason, most of these regulations address emissions—primarily particulates.

But there is another side of the environmental coin. Trucking efficiency, the ability to haul more goods with less energy, has been sacrificed in spite of being the fundamental building block of effective and profitable industry transformation. Instead of a comprehensive policy, regulation, or standards that integrate or incentivize both a reduction in emissions and an increase in efficiency, we are faced with a trade-off. Many of the technologies that allow trucks to reach strict emissions standards reduce fuel economy. According to a 2006 report from JD Power and Associates, fuel economy declined from 6.04 to 5.72 mpg—a drop of more than 5 percent. This was attributed directly to the emissions control systems that were phased in during 2003 and 2004.

A big challenge, but also great opportunity lies in a policy that creates a "win-win" between emissions standards and efficiency improvements. During the second day of RMI’s Transformational Trucking Charrette, a diverse group of industry experts and stakeholders brainstormed a menu of solutions to resolve the challenge of policies competing with misaligned incentives. Each brought a unique perspective on the barrier that led to a rich discussion on potential solutions. But in spite of their different areas of expertise, there were resounding commonalities in their interpretations of the issue.

According to Don Kraft of Jacobs Vehicle Systems, "emissions regulations have only been targeting one part of the problem, and are therefore having a huge impact on the direction of technology development. For example, in order for engine manufacturers to meet a NOx target, they lose efficiency. If they were given free reign to run their own programs and development, then they could reach both the emissions targets and increase efficiency. Right now, they need to reach that target, but then don’t have to worry about anything else. There is no incentive to."

"Integrated technologies can mitigate many challenges," added Don Baldwin, Product Marketing Manager for Commercial Truck Tires at Michelin North America. "One technology can both improve fuel efficiency and reduce emissions."

When both efficiency and emissions are accounted for in, there can be a win-win. According to Kraft, "Last year, Class-8 trucks used 53 billion gallons of diesel. Walmart proved that a 25 percent gain in fuel economy is achievable. If we had focused federal mandates on fuel efficiency instead of NOx, we would be saving 13 billion gallons of fuel per year, and producing 100 million tons less of CO2." Industry success stories such as this helped fuel discussion on how to ensure that efficiency was adequately addressed in policy and regulation.

System integration, aligned incentives, and government collaboration: all proposed solutions come back to the whole-system approach and a common vision. When asked the question "in 10 years, what would you like to accomplish to overcome the barrier of competing policies?," group members were consistent and clear. The industry needs unified, prioritized, and maintained policy, and an immediate and equal consideration of efficiency.

The "low-hanging fruit" is already gone. Many simple solutions have already been phased out by more aggressive regulation. The solutions we need now, which are equally integrated and complicated, require a more comprehensive look than what we currently have. There are still many barriers to overcome so that we can adequately focus on efficiency.

There may not be a single solution, however there is an urgent need to align government bodies and industry leaders, and align policy with the long-term business cases. As RMI continues to consolidate the proposed solutions from the Charrete, there may soon be a comprehensive set of recommendations.

More to come.

Kelly Sweitzer, RMI