New Heavy-Duty Vehicle Fuel Standards and R&D Grants to Create Jobs, Obama Says

During his Aug. 11 tour of Alliance Associate Johnson Controls’ advanced battery plant in Holland, Mich., President Barack Obama gave a speech emphasizing that new fuel efficiency standards and research and development (R&D) on energy-saving vehicle technology will help create U.S. jobs and reduce oil consumption.

The speech came days after Obama announced first-of-their-kind fuel efficiency standards for medium- and heavy-duty vehicles, along with with new grants from the Department of Energy (DOE) to support R&D for next-generation vehicle technology to make cars and trucks substantially more energy efficient.

Obama Praises Johnson Controls

During his visit, the president commended Alliance Associate Johnson Controls, which received $300 million in stimulus funding to build domestic manufacturing capacity for hybrid and electric vehicle batteries. This investment has created or saved 150 U.S. jobs, according to Johnson Controls.

Obama praised the facility as “one of the most advanced factories in the world … helping America lead in a growing new industry.” Johnson Controls chairman and CEO Stephen Roell echoed Obama's sentiments, describing factories like the Holland battery plant as “great examples of public-private partnerships that use innovation and technology to produce products that reduce fuel consumption and create jobs.”

Photo: Obama visits Johnson Controls facility; credit of the White House

First-Ever Fuel Efficiency & GHG Standards for Heavy-Duty Trucks

The event at Johnson Controls followed on the heels of DOE’s Aug. 10 announcement of $175 million in grants being awarded to 40 companies to support advanced R&D of next-generation vehicle technology, including technology related to fuel and fuel cells, lighter weight materials, fleet efficiency, and tire and driver feedback.

DOE's R&D grants were spurred by Obama's Aug. 9 release of the nation's first-ever fuel efficiency and greenhouse gas (GHG) standards for medium- and heavy-duty vehicles for 2014-2018, which were originally proposed in October 2010. These standards build on Obama’s July announcement of updated fuel efficiency standards for light-duty vehicles that call for a fleet-wide average of 54.5 miles per gallon by 2025.

Vehicles subject the medium- and heavy-duty vehicle standards – which include large pickup trucks, buses, semi trucks and delivery vans – are responsible for 20% of fuel consumption on the road.

Photo: Obama visits Johnson Controls facility; credit of the White House

Finalized Heavy-Duty Vehicle Standards

The proposed regulations, which will begin in the 2014 model year, divide heavy-duty vehicles into three categories:

• Combination tractors (better known as semi trucks or big rigs) are required to achieve up to a 20% reduction in fuel consumption and CO₂ emissions by model year 2018, compared to a 2010 baseline.
• Heavy-duty pickup trucks and vans are required to achieve 15% reductions from 2010 levels by model year 2018, with separate standards for gasoline-powered and diesel-powered vehicles.
• Vocational vehicles, such as delivery trucks, dump trucks and school buses, must achieve 10% reductions from 2010 levels.

The standards also include specific incentives intended to encourage early introduction and adoption of advanced technology, such as electric drive vehicles, advanced technology packages for large pickups and innovative technology credits.

Energy Savings on America’s Roads

Heavy-duty vehicles present an opportunity to improve efficiency in a previously untapped area. Consequently, the Environmental Protection Agency (EPA) and the Department of Transportation’s proposed requirements can result in large savings.These regulations are expected to save American business an estimated $50 billion in fuel costs, reduce U.S. oil consumption by 530 million barrels of oil, and reduce GHG emissions by 270 million metric tons over the lifetime of vehicles sold between 2014 and 2018, according to the EPA.

Such fuel savings are expected to translate into in-pocket savings of up to $73,000 per truck – which could drive down operating and delivery costs for business, leading to economy-wide benefits.

“Reducing fuel use by trucks, buses and other heavy-duty vehicles is an important step toward achieving lower gas prices, cleaner air and greater energy security,” said Floyd Deschamps, Alliance senior vice president of policy. “Today’s cars and light trucks run cleaner and more efficiently due to advances resulting from fuel efficiency standards, and now that same inventiveness will be brought to bear on the country’s heavy-duty vehicle fleets.”