Selected category: Greenhouse Gas Emissions

More Efficient Trucks Will Improve the Bottom Line

Here in the United States, the Environmental Protection Agency and the Department of Transportation will unveil new fuel efficiency and greenhouse gas standards for big trucks soon, according to the New York Times. At first glance, many companies might conclude that these new polices do not impact them. They’d be mistaken.

In fact, they would be overlooking an enormous opportunity to cut costs while delivering real-world progress on sustainability.

The fact is that nearly every company in the United States is reliant on heavy trucks, which move 70% of U.S. freight. Brands and manufacturers use trucks to bring in supplies and ship out final products. Retailers and grocers count on trucks to keep the shelves stocked. Technology companies need trucks to deliver the hardware that powers their online services. Even Major League Baseball has turned its dependence on trucking into a quasi-holiday.

More efficient trucks matter to all business because they will cut supply chain costs.

Last year, American businesses spent $657 billion dollars on trucking services. A lot of that money went to pay for fuel – the top cost for trucking, accounting for nearly 40% of all costs.

EDF and Ceres teamed up with MJ Bradley and Associates to assess how strong heavy truck fuel efficiency standards would benefit businesses that rely on trucking. In an update of analysis originally produced last year, we found that companies could see freight rates fall nearly 7% as owners of tractor-trailer units see their costs fall by $0.21/mile. Given that class 8 trucks logged nearly 170 billion miles last year, that $0.21 per mile savings, for example, equates to $34 billion dollars less in annual freight costs.

The magnitude of the savings in this update was consistent with our findings from last year; however, there are important changes in the underlying cost structure. In this new analysis we modeled significantly lower future U.S. diesel prices, in light of new fuel cost projections by the Energy Information Administration. We also updated the cost of more efficient equipment based on recent analysisby the International Council on Clean Transportation.

These savings add up for large shippers. A big consumer goods company, for example, could save over $10 million a year in 2030 by using trucking companies with newer trucks. As an added kicker, these trucks also would help meet the supply chain sustainability targets that leading brands are increasingly setting.

So, while your company may not own or make big trucks, cleaner, more efficient trucks hold a big opportunity for its triple bottom line.

This post originally appeared on our EDF + Business Blog.

Also posted in Cars and Pollution, Energy| Comments are closed

Fewer emissions from trucks equals more money in your pocket. Here's why.

Source: Flickr/raymondclarkeimages

Like most Americans, I’ve bought a few things over the past week: a few shrubs to plant in the backyard, brake cables for my bike and some odds and ends for the new baby we’re expecting in a few weeks.

Each of these items got most of the way to me by riding in the back of a diesel-guzzling tractor-trailer.

Trucks are the main way goods move to market in our country today; 69 percent of freight was carried this way in 2014.  Trucking dominates because it is fast, safe, reliable and affordable.

What it’s not – yet – is very fuel-efficient.

The average tractor trailer truck today will burn 20,000 gallons of diesel this year alone – the same volume of fuel used by 50 new passenger cars. Fuel is a top cost for trucking and we pay for it through our everyday purchases.

At the same time, heavy-duty trucks – while making up only 4 percent of registered vehicles – account for 25 percent of vehicle fuel use.

This is why the Obama administration, with important business support, is taking action to tighten fuel-efficiency for heavy-duty vehicles in standards expected to be proposed in the next month.

Trucks spend $135B per year on fuel

The average United States household pays more than $1,100 a year to fuel heavy trucks. That is a lot of money for my family, especially with a second college fund now needed, and it probably is a fair amount for your family, too.

Across our country, the total financial bill exceeds $135 billion annually – and that is in addition to a significant and growing environmental cost.

Every year, our nation’s fleet of big trucks emits the same amount of carbon dioxide as do 130 coal plants. Climate pollution from these trucks is growing fast.

A recent assessment from the U.S. Energy Information Agency projected that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040.

This is because increased demand for trucking services is projected to greatly exceed improvements in fuel efficiency.  Without action, producing and burning fuel in these trucks will account for nearly 30 percent of transportation related greenhouse gas emissions in 2040.

$400 in annual household savings

President Obama’s call in early 2014 for a new round of fuel efficiency and greenhouse gas standards for our nation’s biggest trucks is a once-in-a-generation opportunity to dramatically alter course.

We have the technology today to cost-effectively cut fuel consumption by 40 percent and a regulatory framework that is already producing impressive results. A recent assessmentby the International Council on Clean Transportation found that advanced efficiency technologies, now emerging in the marketplace, can double heavy truck fuel economy with payback periods of 18 months or less in the 2025 to 2030 time frame.

Households and businesses will immediately benefit from the new truck efficiency standards.

U.S. households, alone, stand to save more than $400 a yearas the fuel efficiency solutions are scaled up. This will produce an annual economic benefit of $50 billion dollars.

Businesses that rely on trucks to bring their products to market, meanwhile, could see freight costs drop by as much as 7 percent.

The standards will also avoid 270 million tons of greenhouse gas emissions annually, cut emissions of criteria pollutants and air toxics from fuel production and combustion, and reduce oil consumption by 1.4 million barrels a day – or more than we import from Saudi Arabia each year.

The protective standards make sense for consumers, families, businesses, trucking companies and the Earth. Sounds like a win to me.

Also posted in Cars and Pollution| Comments are closed

Déjà vu: Pushback to U.S. Clean Power Plan Reminiscent of 2011 Mercury Rule

By Susan Tierney,  Managing Principal, Analysis Group, Inc.

This post originally appeared on World Resources Institute's Insights blog.

Did you notice the massive blackout on April 16th, 2015?Reversed-GoldBackground

Actually, I didn’t either. That’s because the electric system didn’t falter. The fact that April 16th came and went without a reliability glitch was both nothing unusual and also a really big deal. Because history has a habit of repeating itself, it’s worth understanding why April 16th was a remarkable (and remarkably dull) milestone in electric-industry history.

The Origins of the Mercury and Air Toxics Standard (MATS)

Back in 2010, just under a third of all U.S. power-plant capacity burned coal to produce electricity. Many of those plants were emitting unhealthy levels of toxic air pollution, which forthcoming regulations from the Environmental Protection Agency (EPA) would limit. Critics of EPA’s rule doubted that manufacturers and installers could get enough pollution-control equipment into the market and on to power plants fast enough to meet the deadline under the new Mercury and Air Toxics Standard (MATS) – and that taking so much of the nation’s generating capacity off line all at once would inevitably lead to an unreliable electric system.

Before the EPA finalized its MATS rule at the end of 2011, countless groups published estimates of how many coal plants would retire due to the EPA regulations. The North American Electric Reliability Corporation (NERC) warned that “with [the mercury rules] as the primary driver, the industry faces considerable operational challenges to complete, coordinate and schedule the necessary environmental retrofits.” Others, including opponents of the rule, argued that, in the name of reliability, the rule would need to be delayed.

In December 2011, EPA issued the final MATS rule, which gave owners of affected power plants until April 16, 2015, to either bring their plants into compliance with the new requirements or cease their operations.

That date passed two weeks ago without incident. The lights didn’t dim.

Why not? First, the EPA stood by its commitment (made in November 2011 by then-Assistant EPA Administrator Gina McCarthy in testimony to the Federal Energy Regulatory Commission, the agency with responsibility for electric system reliability) that “In the 40-year history of the Clean Air Act, EPA rules have never caused the lights to go out, and the lights will not go out in the future as a result of EPA rules.”

Part of the reason for that is that the EPA is nowhere near as rigid or anti-business as many observers like to portray it. The final EPA rule gave power-plant owners the ability to request an additional year of time to comply, and allowed yet another year in unusual cases where continued operation of a plant would be needed for reliability. According to the National Association of Clean Air Agencies, as of March 2015, owners of 38 percent of the 460 coal-fired power plants affected by the MATS rule had requested additional time to comply and, of those, the EPA granted an extension to 95 percent.

Kentucky power plant. Photo by Cindy Cornett Seigle/Flickr

Second, the electric industry is already transitioning to rely less on coal, even without the MATS rule. Between 2011 and the end of 2014, 21.5 gigawatts (GW) of coal-fired power plants retired. The fact that these retirements occurred before the MATS deadline indicates that something other than EPA's regulations is driving the least-efficient and oldest coal plants into retirement.

Coal's ardent supporters may prefer to point the finger at EPA, but the truth is that market conditions are responsible: relatively flat electricity demand, increased supply from power plants using other domestic energy sources (natural gas, wind and solar), and price competition between natural gas and coal. Another 14.6 GW of power plants have retired or will retire in 2015. This total amount of coal-plant retirements (36.1 GW) falls at the mid-point of estimates made during the 2010-2011 period.

Third, the electric industry is dynamic. The market has responded to signals that additional electric resources are needed to replace old ones. Many projects have come forward: new power plants, upgraded transmission facilities, rooftop solar panels, energy-efficiency measures and energy-management systems. These varied responses are the norm, collectively maintaining reliability and modernizing the power system along the way.

That’s why there were no blackouts on April 16th, despite all the dire warnings.

History Repeats Itself

The reliability theme is re-emerging once again, as the states and the electric industry face the prospect of EPA finalizing its “Clean Power Plan” to control carbon pollution from the nation’s power plants. In anticipation of the final rules coming out this summer and of power plant owners having to comply with them by 2020, many observers are saying that the electric system's reliability will be jeopardized if the EPA goes forward as planned. The latest warning came last month with a new assessment published by NERC, calling for more time to allow the industry and the states to respond to the forthcoming carbon-pollution rules.

Such warnings are common whenever there is major change in the industry, and they're not without value: They play an important role in focusing the attention of the industry on taking the steps necessary to ensure reliable electric service.

But warnings lose their value when they are read as more than what they are. Notably, the reliability concerns currently being raised by some observers about EPA’s Clean Power Plan presume inflexible implementation, are based on worst-case scenarios, and assume that policy makers, regulators and market participants will stand on the sidelines until it is too late to act.

There is no historical basis for these assumptions. Reliability issues will be worked out by the dynamic interplay of actions by regulators, entities responsible for reliability, and market participants, all proceeding in parallel to find solutions.

EPA’s proposed carbon-pollution rule provides states and power plant owners with the means to prevent reliability problems by giving them a wide range of compliance options and plenty of operational discretion (including various market-based approaches, other means to allow emissions trading among power plants, and flexibility on deadlines to meet interim targets). And EPA Administrator McCarthy has stated repeatedly that her agency will write a final rule that reflects the importance of a reliable grid and provides the appropriate flexibility.

One of the best ways to assure electric reliability will be for states to actively avail themselves of the Clean Power Plan’s flexibility, rather than “just say no.” States that do not take advantage of this flexibility and then suggest that EPA’s regulations led to unreliable and uneconomic outcomes may be courting a self-fulfilling prophecy. The more states sit in the driver seat and figure out how to arrive at the emissions-reduction destination in a manner consistent with their goals and preferences, the more likely it is that they’ll accomplish them.

Also posted in Clean Power Plan, Energy, Health| Comments are closed

Three Climate Leadership Openings Corporate America Can't Afford to Miss

By Ben Ratner, Senior Manager, Corporate Partnerships Program

Too much ink has been spilled on the anti-climate furor of the Koch brothers. If we lose on climate, it won’t be because of the Koch brothers or those like them.

It will be because too many potential climate champions from the business community stood quietly on the sidelines at a time when America has attractive policy opportunities to drive down economy-endangering greenhouse gas emissions.

Corporate executives have the savvy to understand the climate change problem and opportunity. They have the incentive to tackle it through smart policy, and the clout to influence politicians and policy makers. Perhaps most importantly, they can inspire each other.

And today, they have a chance to do what they do best: lead. Corporate climate leadership has nothing to do with partisanship – it’s ultimately about business acumen.

For starters, here are three immediate opportunities smart companies won’t want to miss.

1. Clean Power Plan: Will spur new jobs and investments.

The Obama administration’s plan will cut emissions from coal plants by 30 percent by 2030. This is expected to trigger a wave of clean energy investment and job creation. It will also seize energy efficiency opportunities and take advantage of America’s abundant and economic supply of natural gas.

Every company with an energy-related greenhouse gas footprint has something to gain from a cleaner power mix. Each one of those companies therefore has a stake in theClean Power Plan.

Google and Starbucks – two large and profitable American companies by any standard – are among more than 200 businesses that have already stepped up to voice their support.

Who will follow them?

2. First-ever methane rules: Will make industry more efficient.

The U.S. Environmental Protection Agency’s upcoming methane emission rules are another opportunity for business leaders to weigh in.

The rules are part of a White House plan that seeks to reducemethane emissions – a major contributor to global warming and resource waste – by almost half in the oil and gas industry.

Globally, an estimated 3.6 billion cubic feet of natural gas leaks from the sector each year. This wasted resource would be worth about $30 billion in new revenue if sold on the energy market.

Some oil and gas companies that have already taken positive steps include Anadarko, Noble and Encana, which helped develop the nation’s first sensible methane rules in Colorado.

Engaging to support strong and sensible national standards isa good next step for companies in this space. And for others with a stake in cleaning up natural gas, such as chemical companies, and manufacturers and users of natural gas vehicles.

3. New truck standards: Can help companies cut expenses and emissions.

New clean truck standards are scheduled for release this summer. Consumer goods companies and other manufacturers stand to see significant dollar and emissionsavings as they move their goods to market.

Cummins, Wabash, Fed Ex, Con-Way, Eaton and Waste Management are among those that applauded the decision to move forward with new standards.

Putting capitalism to work

American business leadership is still the global standard and will remain so if it adds climate policy to its to-do list. While it will take time to build the bi-partisan momentum for comprehensive national climate legislation, there are immediate opportunities to move the needle.

Which companies will take the field?

Image source: Flickr/Don McCullough

This post originally appeared on our EDF Voices blog.

Also posted in Clean Power Plan, Economics, Energy| Comments are closed

Better Fuel Efficiency for Heavy Duty Trucks — A Target Worth Setting

1200px-Kenworth_truck

"Kenworth truck" by Lisa M. Macias, U.S. Air Force via Wikipedia

A pair of critical analyses were just released that, together, make clear the need for a strong second generation heavy truck fuel efficiency and greenhouse gas standard.

The first piece is the U.S. Energy Information Agency’s (EIA) preliminary Annual Energy Outlook for 2015. I went right to the projection of fuel efficiency for new heavy trucks in 2020, which is 7.0 miles per gallon, and compared that to the projection for 2030, which is 7.2 miles per gallon. A three percent increase in efficiency for a decade is not too impressive.

As a result of this lack of projected progress on fuel efficiency and other factors, EIA expects that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040 – an additional 120 million metric tons a year.

The other recent analysis is from The International Council on Clean Transportation. It released two papers on heavy truck fuel efficiency: one reviewed the potential of current and emerging efficiency technology; the other examined the cost effectiveness of these technologies.

Among the group’s findings are:

  • Already available tractor-trailer technologies can achieve 9 miles per gallon, deliver payback periods of less than a year, and be widely deployed in the 2020 to 2025 time frame.
  • Advanced efficiency technologies, now emerging in the marketplace, can double fuel economy to 11 to 12 miles per gallon, with payback periods of 18 months or less in the 2025 to 2030 time frame.
  • Diverse technology approaches – meaning technology packages with differing contributions from aerodynamic, engine, and other technologies – can achieve similar efficiency results.
  • Even under very conservative assumptions — fuel prices remaining as low as $3.10 per gallon diesel, higher technology costs, and a high discount rate of 10 percent — the most advanced technology packages have payback periods of only 1.4 to 2.2 years.
  • Typical first owners of tractor-trailers with efficiency technology packages up to 9 miles per gallon would see fuel savings 3 to 9 times greater than the upfront technology cost over the period of ownership.

ICCT’s findings demonstrate that we have the technology to cost-effectively cut truck fuel consumption in half compared to 2010 levels. EIA’s projections demonstrate that, without well designed performance-based standards, truck manufacturers are unlikely to deploy these highly cost-effective solutions.

There is good news in EIA’s report, too. The 7.0 miles per gallon in 2020 is up from 6.0 miles per gallon in 2012. The increase can be attributed to the first round of Heavy Truck Fuel Efficiency and Greenhouse Gas Standards set by President Obama in 2011.

We know that well-designed fuel efficiency standards work because we are seeing it in the market today. For the second generation standards that will be announced this spring, we urge the administration to incentivize the full scale deployment of the advanced technologies highlighted in the ICCT analysis.

Also posted in Cars and Pollution, Economics| Read 1 Response

A Win for Cleaner Air and a Stronger Economy: Court Dismisses Challenges to Fuel Efficiency and Greenhouse Gas Standards for Big Trucks

Source: Flickr/MoDOT Photos

Source: Flickr/MoDOT Photos

Today, the U.S. Court of Appeals for the Washington D.C. Circuit dismissed challenges to America’s historic, first-generation standards to improve fuel efficiency and reduce greenhouse gas emissions from large trucks and buses.

The Environmental Protection Agency (EPA) and Department of Transportation (DOT)  standards are based on common sense, highly cost-effective technologies that will make our nation’s fleet of large trucks and buses more efficient while also reducing harmful, climate-destabilizing pollution, limiting our dependence on foreign oil, and saving money for both truckers (in the form of lower fuel costs) and all Americans (in the form of lower shipping costs).

These cross-cutting benefits have won broad-based support for the standards — including support from America’s truck and engine manufacturers, from states, and from public health and environmental groups.

In response to President Obama’s announcement of these first generation standards in 2011, many of these organizations sent letters of support. Here are just a few examples:

Cummins Inc. recognizes the benefits for the country of a National Program to address greenhouse gases (OHOs) and fuel efficiency from medium and heavy-duty trucks and buses. Cummins fully supports the adoption of such a National Program and welcomes this opportunity to be a partner in helping to advance that goal.
Cummins Inc.

[Daimler] is committed to working with EPA and NHTSA, the states, and other interested parties to help address three of the most pressing issues facing the U.S. today and into the future: greenhouse gas reductions, fuel efficiency improvements, and increased energy security.
Daimler Trucks North America

These standards apply to vehicles manufactured between 2014 and 2018. That means they are now in their second year of effectiveness, and they are driving technological innovations that are cleaning our air and helping American truck manufacturers to thrive. Through October of 2014, sales of fuel efficient trucks were 20 percent higher than their 2013 levels. 2015 is projected to be even stronger, with forecasts suggesting it will be the third strongest year ever for truck sales.

Martin Daum, president and CEO of Daimler Trucks North America, put it succinctly:

[These standards] are very good examples of regulations that work well.

That is very good news, because the President has announced that EPA and DOT will soon issue second-generation greenhouse gas and fuel efficiency standards for large trucks. We anticipate that those standards will be proposed late this spring or early in summer.

Many of the same companies that stood with the President in announcing a blueprint to develop the second phase standards also collaborated on the first generation clean trucks standards. Among those supporting the President’s announcement of second phase standards are major U.S. manufacturers and fleets such as Conway, Cummins, Eaton, Wabash National, Waste Management and the American Trucking Association.

The second generation standards will create an important opportunity to further reduce greenhouse gases and enhance the fuel economy of our nation’s trucks.

EDF is calling on the Environmental Protection Agency and Department of Transportation to set new standards for heavy trucks that cut fuel consumption by 40 percent in 2025 compared to 2010. That equates to an average of 10.7 miles per gallon for new tractor-trailer trucks. Technology solutions are available today to meet the goal, and strong standards will further drive innovation.

In fact, Daimler Trucks North America may have provided the best example yet of our future potential with its entry in the Department of Energy Super Truck program. Daimler announced that its team has:

[A]chieved 115 percent freight efficiency improvement, surpassing the Department of Energy program’s goal of 50 percent improvement.

Daimler’s truck registered 12.2 miles per gallon recently – a leap above the six miles per gallon typical of pre-2014 trucks.

Rigorous second generation standards will also secure critical benefits:

When Americans stand together, we can forge big gains in strengthening our economy and protecting our environment.

Also posted in Cars and Pollution, Clean Air Act, News, Policy| Comments are closed
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