BorgWarner, Cummins, Eaton, Ford to EPA: It’s Time to Finalize GHG Phase 3

What’s the best way to push heavy-duty vehicle emissions toward zero? While major truck and engine makers all say they have ambitious goals to help the global heavy-duty transport industry reach zero emissions, it appears that they disagree when it comes to how U.S. regulators are trying to get there.

BorgWarner, Cummins, Eaton, and Ford on Feb. 6 called for stronger national heavy-duty pollution standards through an informal alliance called the Heavy-Duty Leadership Group.

At issue is the Environmental Protection Agency’s proposed Phase 3 greenhouse gas emissions standards for heavy-duty commercial vehicles.

EPA’s April 2023 proposal called for CO₂ standards for model-year 2027 heavy-duty vehicles that go beyond the current standards that apply under the HD Phase 2 Greenhouse Gas program.

The agency also proposed an additional set of CO₂ standards for heavy-duty vehicles that would begin to apply in MY 2028, with progressively lower standards each model year through 2032.

The Heavy-Duty Leadership Group issued a “statement of principles” calling on EPA to finalize the rule by March 31.

The companies in the alliance said they believe that EPA’s tighter standards would “provide industry with the confidence to deploy capital and resources that will result in high-quality job growth and technology leadership, which are critical in de-carbonization of the transportation sector.”

BorgWarner, Cummins, Eaton, and Ford are diverging from other industry players when it comes to two controversial provisions of the rule, regarding changes to existing GHG Phase 2 regulations for 2027 and the need to consider charging infrastructure.

The Heavy Duty Leadership group is distancing itself from the Truck and Engine Manufacturers Association, which has criticized the EPA’s GHG Phase 3 proposed rules for the lack of infrastructure consideration and the backtracking on GHG2.

However, one thing the two groups do agree on is the importance of EPA working with the industry.

The HDLG stressed the need for a “whole of government approach” to partner with private industry to meet the new EPA standards.

EMA said previously it looked forward to working with EPA and other stakeholders to ensure the final GHG Phase 3 rule would “successfully facilitate a swift transition to ZEVs.”

Changing GHG Phase 2

HDLG called for no delay in EPA’s planned MY 2027 start date. In comparison, the Truck and Engine Manufacturers Association and the American Trucking Associations have criticized this provision for changing a previous regulation and upending plans for OEs and trucking companies alike. EMA and ATA want to see that date pushed to 2030 or later.

“This administration should not set the precedent that established standards can be changed from administration to administration, thus completely undermining regulatory certainty and stability and undermining manufacturers necessary multi-year investment plans," said EMA President Jed Mandel in testimony to EPA last year.

ATA said “the proposal reneges on commitments and timelines EPA made in Phase 2 of the standards, upending the plans and schedules for both equipment makers and purchasers.”

Charging Infrastructure

ATA criticized the GHG Phase 3 proposal because “the rule does not take into account the lack of infrastructure to fuel and charge these new vehicles — infrastructure that is critical to maintaining our supply chain.”

ATA and EMA have advocated for an “off ramp” that would end or weaken emissions standards if certain charging and fueling infrastructure goals aren’t achieved.

“Without electricity recharging and hydrogen refueling infrastructures in place, trucking fleets won’t be able to operate zero-emission vehicles and, thus, won’t make the needed investment to purchase them,” EMA President Jed Mandel told the EPA in testimony last year.

“To successfully achieve a zero-emission future, the infrastructures needed to allow commercial ZEVs to complete the important work of hauling the nation’s freight must be in place and trucking fleets must see a positive business case to invest capital in their purchase.

“We need a whole of government approach to solve the problem and meet the challenge. EPA should do its part by adopting a final rule that includes a requirement to assess progress on the development of the needed infrastructure.”

The Heavy-Duty Leadership Group companies said they opposed this “hard-wired off ramp,” emphasizing the need for regulatory certainty and clear market signals.

The companies instead urged the EPA to conduct regular technical assessments of factors related to the adoption of zero-emission technology, such as the number of charging and other fueling stations, battery costs, availability of rare minerals and other critical issues.

Previous Split on Emissions Regulations

It’s not the first time Cummins and Ford have split from other EMA members when it comes to emissions regulations.

In 2022, EMA filed a lawsuit against the California Air Resources Board, saying the agency has not provided enough lead time for truck and engine makers to meet its latest emission standards due to go into effect in 2024.

While the lawsuit was intended to address the short lead time, not the contents of the regulation itself, it drew the ire of environmental groups and saw some EMA members distancing themselves from it. Ford and Cummins were among several EMA members that had stated publicly that they did not support the litigation.

EMA ended up withdrawing that challenge. EMA later worked out a compromise with CARB, forming the Clean Truck Partnership.

Daimler, Navistar, Volvo Take a Different Approach

The HDLG announcement comes on the heels of one by Daimler Truck North America, Navistar, and Volvo Group North America forming a group called Powering America’s Commercial Transportation, a coalition that will use education and advocacy to speed the construction of nationwide electric-truck charging infrastructure.

The group plans to lobby at the national and state level and to work with utilities and state public service commissions to address charging infrastructure challenges.

Together, the three companies represent approximately 70% of all new medium- and heavy-duty truck sales in the U.S., according to the announcement. Each already has battery-electric vehicles in the marketplace, but say access to charging infrastructure is a major bottleneck to widespread adoption.

Daimler and Volvo have been criticized for pushback on EPA's GHG Phase 3 rule. Environmental and advocacy groups last month sent letters to the CEOs of Volvo Group and Daimler Truck calling on them to “stop their attempts to hinder clean trucks and clean air progress in the U.S.” The letters were signed by groups such as Environmental Defense Fund, Evergreen Action, Sierra Club, and Public Citizen.

“While both companies have made public commitments to electrify their heavy-duty vehicles and have been supportive of a transition to zero emission trucks in Europe, they continue to attempt to stymy progress in the United States through back door opposition directed at the truck standards proposed by the U.S. EPA,” the groups said in a news release.

ATA: EPA Proposal 'Recipe for Failure'

While the EPA standards are directed at manufacturers, the American Trucking Associations pointed out after the GHG Phase 3 proposal was unveiled last year, “It is fleets – the customers and end-users of this equipment – who will ultimately determine their level of success.”

In an analysis of the EPA GHG Phase 3 proposal, ATA said any regulation should be technology neutral, achievable, and based on sound science, and said the GHG3 proposal falls short on all three.

“EPA is moving at breakneck speed to force the industry towards electrification while failing to address the key enablers towards any new technology adoption,” said ATA chief Chris Spear last year. “EPA’s proposed adoption rates assumes that product availability, vehicle costs, range, weight reduction, energy capacity and recharging and refueling infrastructure will all be available for fleets to utilize the technology. Instead of the agency leap frogging existing low-carbon technologies towards electrification, allow today’s technologies to be fully adopted.”

ATA said the proposal’s aggressive timelines, with new standards coming into play annually after 2027, rush early-stage technologies to the marketplace without sufficient testing and validation.

“The rule bets so heavily on electric and hydrogen vehicles — technology that has yet to be fully vetted and proven in the commercial freight environment — so as to pick winners, providing no flexibility for fleets to reduce emissions with existing solutions.”

"Mandating unproven technology that won't meet our industry's unique requirements is a recipe for failure," Spear said.

More on HDLG

The HDLG companies stressed they are willing to meet the challenge of investing in advanced technologies necessary to make progress toward meeting new EPA Greenhouse Gas (GHG) standards.

The group’s statement of principles emphasizes that each Heavy-duty Leadership Group company is committed to “aggressively cutting GHG emissions with near-term milestones and long-term net zero goals.”

Originally formed in 2010, the Heavy-duty Leadership Group is an informal alliance. The companies credit the EPA’s first two phases of the rule for accelerating the industry’s adoption of advanced technologies while minimizing market disruption.

Its members invite other companies aligned with its statement of principles to join the HDLG to support EPA in finalizing the Phase 3 rule.

Phase 3 national heavy-duty efficiency and emissions standards apply to vehicles ranging from pickup trucks to big-rig tractors, including 18-wheelers, sanitation trucks, buses and other commercial vehicles. The standards would complement the criteria pollutant standards for MY 2027 and beyond heavy-duty vehicles that the EPA finalized in December 2022. According to the EPA, the projected net benefits of the heavy-duty proposal range from $180 billion to $320 billion.

HDLG Statement of Principles, February 2024

1. The HDLG Companies support EPA’s ongoing efforts to achieve further de-carbonization in the transportation sector through a sound, achievable HD Phase 3 GHG rule that starts in MY 2027. The HDLG companies do not support proposals to delay the start of EPA Phase 3 HD GHG until MY 2030 or later.
2. Each of the HDLG Companies has made public commitments to reduce its carbon footprint by aggressively cutting GHG emissions with near-term milestones and long-term net zero goals. These corporate sustainability principles underpin our support for finalization of an EPA Phase 3 GHG rule with urgency and not later than March 31, 2024.
3. EPA should make a commitment in the final rule to conduct periodic Technical Assessments of a wide range of factors directly related to the pace of adoption of Zero Emission Tailpipe HD technologies, including: battery technology advancement, availability, and affordability; critical mineral sourcing and cost; deployment of an extensive and available charging/fueling network, supporting electrical grid and fuel infrastructure, and other factors.
4. Long-term technology-neutral regulations provide industry with the confidence to deploy capital and resources that will result in high-quality job growth and technology leadership, which are critical in the de-carbonization of the transportation sector. The HDLG companies trust EPA to consider proposing future revisions through new rulemaking, if triggered by any major changes to the factors evaluated in EPA’s Technical Assessments, but the HDLG Companies are opposed to proposals for a “hard-wired off ramp” triggered by an infrastructure development or similar metric.
5. Multiple technology pathways exist and must be considered in a technology-neutral manner to achieve EPA’s performance-based HD Phase 3 GHG standards. These solutions include hybrid powertrains; advanced engine technologies; hydrogen combustion; and electric and hydrogen zero tailpipe emission propulsion systems.To ensure technology-neutral, performance-based, standards, EPA should make a regulatory commitment within the Phase 3 Final Rule to propose near-term technical amendments to streamline hybrid certification test procedures.
6. Achieving the Administration’s ambitious GHG reductions in the HD sector will require a “Whole of Government “approach involving DOE, DOT, EPA, and other Federal, state, and local government agencies working with the private sector to ensure that IRA and the Bipartisan Infrastructure Law funds are wisely invested across the U.S. economy to leverage a commercially viable HD infrastructure, which accelerates the adoption of zero-emission commercial vehicles.