Ambitious CO2 standards for trucks are good for businesses, and the climate

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

A file photo dated 12 May 2014 showing South Korean models during the presentation of the new Volvo Trucks range in Seoul, South Korea. The European Commission on 19 July 2016 said it found MAN, Volvo/Renault, Daimler, Iveco, and DAF responsible of breaking EU antitrust rules. [EPA/JEON HEON-KYUN]

The starting point for truck emission rules must be cost-effectiveness, writes James Nix. But it will take tough standards to ensure R&D is deployed at scale on most vehicles, he argues.

James Nix is freight and climate director with sustainable transport group Transport & Environment (T&E).

Recent days have seen a leak suggesting that the European Commission is set to place a 15% emissions reduction target on trucks by 2025.

If correct, the Commission’s truck CO2 proposals – to be released this Thursday – will fall significantly short of what a broad coalition of industries, truckers and member states ask for.

Trucks make up less than 5% of the vehicles on the road but account for almost a quarter of vehicle emissions. And transport emissions are going up – contrasting with progress in sectors such as power generation.

The starting point must be cost-effectiveness. As Dutch state secretary for infrastructure, Stientje van Veldhoven, puts it: “you need to look at what are the cost-effective options and you need to exploit those to the full”.

If the low-hanging fruit is not harvested, then greater – and more expensive – efforts need to be made elsewhere, a point Minister van Veldhoven has also made.

So what is the cost-effective level of emissions reduction from newly-built trucks? The answer, according to the International Council on Clean Transportation (ICCT), is 24%, with the biggest areas for improvement being the greater engine efficiency, re-shaping truck fronts to make them aerodynamic and low-rolling resistance tyres.

A best-in-class new truck is already 9% more fuel efficient than the average new truck. Great R&D is taking place but the resulting technology currently sees very limited deployment (for example, one particular engine innovation, turbo-compounding, saves 3% fuel but is found on less than 1% of new trucks).

It takes tough standards to break this vicious cycle. Under strong standards, fuel-saving technology must be deployed on all trucks, which will result in economies of scale shooting up – and costs for everyone going down.

Standards based on harvesting the full cost-effective potential will, according to the ICCT’s work, have a reduction target of 24% using a 2015 baseline, or 21% on a 2019 baseline. The Commission, if the leak is accurate, is some way behind.

What’s the payback time for the higher figure? The first owner of a new truck keeps it for 4 – 5 years on average. According to ICCT data, and again taking the average case, fuel savings over the first year alone (€7,700) will be enough to pay back the cost of fitting the extra technology (€7,500) used over the life of truck (12+ years before major overhaul).

It costs €32,000 a year to fuel a long-haul diesel truck in the EU. And because fuel is more expensive in Europe, payback times here are set to be even shorter than under the industry-supported US truck standards introduced by Obama.

So who supports capturing the full 24% level of cost-effective emissions reductions? The companies include Carrefour, Heineken, IKEA, Nestle, DB Schenker, Alstom, and Unilever –but this list omits more than 20 other major corporate brands.

Supportive member states include France, the Netherlands, Sweden, Ireland, Lithuania and Luxembourg, while trucker representative organisations from Belgium, Hungary, Netherlands, Portugal and Spain also back 24%.

As well as cutting emissions from diesel trucks, there must also be an incentive for truck makers to make and sell zero-emission trucks. Here, Europe risks a repeat of what has happened with electric vans. European vehicle makers couldn’t / wouldn’t build e-vans for Deutsche Post-DHL – so it built its own, the Streetscooter.

Now, in partnership with Ford, DP-DHL Streetscooters are gobbling up a great deal of the market share shunned by Europe’s traditional vehicle makers.

Unsurprising then that a number of large retailers have told T&E of their desire to buy electric trucks for use as urban delivery vehicles (typically tying in with sustainability objectives to complete home deliveries cleanly and quietly).

The key question is whether the demand for e-trucks will be satisfied by the traditional vehicle-makers or whether, yet again, leading companies will have little choice but to look elsewhere, and potentially beyond Europe.

An e-truck sales target with a bonus for surpassing a benchmark level (e.g. 5%) isn’t simply environmentally sensible. It will be an important element of EU industrial policy for the vehicle manufacturing sector to remain a world leader.

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