On March 29, the Environmental Protection Agency announced long-anticipated Phase 3 greenhouse gas emissions standards for heavy-duty trucks, buses and other large vehicles, marking the third phase of EPA’s Clean Trucks Plan.

EPA officials said the new standards will target the North American trucking industry, which the agency said is one of the largest producers of greenhouse gas emissions.

EPA said these new standards will prevent 1 billion tons of greenhouse gas emissions over the next three decades.

“Heavy-duty vehicles are essential for moving goods and services throughout our country, keeping our economy moving,” said Michael Regan, EPA administrator, in a news release. "They’re also significant contributors to pollution from the transportation sector — emissions that are fueling climate change and creating poor air quality in too many American communities.”

The new standards apply to medium- and heavy-duty vocational vehicles (such as delivery trucks, refuse haulers, public utility trucks, transit, shuttle, and school buses) and tractors (such as day cabs and sleeper cabs on tractor-trailer trucks):

• Light Heavy-Duty (Class 2b-5)

• Medium Heavy-Duty (Class 6-7)

• Heavy Heavy-Duty (Class 8)

Strict New Standards

This final rule establishes new CO2 emission standards for MY 2032 and later heavy-duty vehicles, with more stringent CO2 standards phasing in as early as MY 2027 for certain vehicle categories.

In the face of recent pushback on the timing and cost of implementing such a massive shift away from diesel-powered trucks, EPA noted that it believes the Phase 3 standards are “appropriate and feasible considering lead time, costs, and other factors.”

EPA argues in the 1,155-page rule that the final rule is “less stringent” and increases at a “slower place” than the proposed rule.

Beginning in 2027, the rule sets higher stringency emission standards year-over-year along a six-year timeline.

These final Phase 3 standards include revised GHG standards for many MY 2027 vehicles, changing what was previously required in GHG Phase 2. At the time this was proposed, the change to the MY 2027 standards drew criticism from the industry.

As American Trucking Associations' CEO Chris Spear said at the time, "to make the plans and investments necessary for a successful transtion, our industry needs regulatory certainty....our industry has always found ways to partner with EPA on regulations that are tough but achievable. If EPA wants us to remain a willing participant, their going back and changing what was already agreed upon is not how to do it."

Technology-Neutral or ZEV Mandate?

The EPA said the new standards are technology-neutral and performance-based and can be met with a range of heavy-duty vehicle technologies, including advanced internal combustion engine vehicles, hybrid vehicles, plug-in hybrid electric vehicles, battery electric vehicles, and hydrogen fuel cell vehicles.

EPA said in the final rule that it anticipates that a compliant fleet under the final standards will include a diverse range of technologies, including ZEV and ICE vehicle technologies.

However, as the American Trucking Associations contended in an update to members, the timeline is "effectively requiring truck and engine manufacturers to sell an increasingly higher percentage of zero-emission vehicles."

Lobbying from ATA and others did result in some changes to the initial EPA proposal, resulting in lower stringency and delayed adoption timelines for model years 2027, 2028 and 2029. In additiona, according to ATA, EPA’s recognition of alternative compliance pathways through other technologies, such as natural gas and hybrid trucks, came about from trucking industry input.

Trying to Accommodate the Industry's Diversity

The rules are complex and the CO2 emissions limits depend on the type of vehicle being used and what applications it works in.

The Class 7-8 tractor category was divided into 10 subcategories based on the tractor’s weight rating, cab configuration, and roof height.

The vocational vehicles are more complex, spanning Class 2b-8. EPA has developed 15 separate numerical performance-based emission standards for each model year.

Averaging, Banking, and Trading

Since it first implemented heavy-duty GHG standards, EPA has incuded an "averaging, banking, and trading program" to give manufacturers flexibility in meeting the standards, and this will continue to be the case.

"Manufacturers widely utilize ABT, which provide a variety of flexible paths to plan compliance," EPA explains in the final rule. "The GHG credit program was designed to recognize that manufacturers typically have a multi-year redesign cycle and not every vehicle will be redesigned every year to add emissions-reducing technology. Moreover, when technology is added, it will generally not achieve emissions reductions corresponding exactly to a single year-over-year change in stringency of the standards.

"Instead, in any given model year, some vehicles will be 'credit generators,' over-performing compared to their respective CO2 emission standards in that model year, while other vehicles will be 'debit generators' and under-performing against their standards."

The EPA notes, however, that "in MY 2032 when the final standards reach the lowest level, it is possible that only BEVs, FCEVs, PHEVs, and H2-ICE vehicles are generating positive credits, and other ICE vehicles generate varying levels of deficits."

The Trucking Industry Reacts

Reaction to the Phase 3 Final Rule from the trucking industry was swift and generally negative.

The American Trucking Associations said opposes the rule in its final form. ATA insists the post-2030 targets remain "entirely unachievable given the current state of zero-emission technology, the lack of charging infrastructure and restrictions on the power grid.

"Any regulation that fails to account for the operational realities of trucking will set the industry and America’s supply chain up for failure.”

"Given the wide range of operations required of our industry to keep the economy running, a successful emission regulation must be technology neutral and cannot be one-size-fits-all," said Chris Spear, ATA president and CEO. “The trucking industry is fully committed to the road to zero emissions, but the path to get there must be paved with common sense. While we are disappointed with today’s rule, we will continue to work with EPA to address its shortcomings and advance emission-reduction targets and timelines that are both realistic and durable.”

NATSO, the association representing truck stops and travel plaza, called the final rule only a modest improvement from the proposal.

"The administration's final rule does not adequately consider the challenges that fuel retailers face in transitioning to heavy-duty truck electrification," NATSO said in a statement. It "also does not recognize the need to support lower carbon alternatives to diesel fuel that are currently commercially viable, such as biodiesel and renewable diesel."

To support the full electrification of long-haul vehicles, NATSO said, fuel retailers will need to invest $57 billion to build out a long-haul charging network, according to a study released by Roland Berger. To electrify all medium and heavy-duty vehicles, fleets and charge point operators will need to invest $620 billion into chargers, site infrastructure and utility service costs.

"The charging capacity required at a single large truck stop would be roughly equivalent to the electric load of an entire small town," NATSO said. "We remain unconvinced that the electricity providers will be able to increase generation and transmission activity to service that kind of load at scale within 10 years.”

Likewise, the Clean Freight Coalition denounced the Phase 3 Rule, noting that regulation that will require the adoption of zero-emissions commercial vehicles at a pace that isn’t possible due to the limits of today’s technology.

“Today, these vehicles fail to meet the operational demands of many motor carrier applications,” the group said in a press release. “They will reduce the payload of trucks and thereby require more trucks to haul the same amount of freight, and lack sufficient charging and alternative fueling infrastructure to support adoption."

“A recent study contracted by the CFC demonstrated that fully electrifying the nation’s medium- and heavy-duty commercial vehicles will cost motor carriers $620 billion in charging infrastructure alone,” the statement added. “That does not include the vehicle cost which increases by 2-3 times compared to a diesel truck."

"On top of the costs to the truck and bus industries, utilities and the government will need to invest $370 billion to upgrade their networks and the power grid to meet the demands of the commercial vehicle industry alone, putting the price tag for an electric supply chain at nearly $1 trillion before one battery-electric commercial vehicle is purchased.”

EPA: 'Balanced and Measured Approach'

In the Final Report summary, EPA noted that, “Our assessment is that setting this level of standards starting in MY 2032 achieves meaningful GHG emission reductions at reasonable cost, and that heavy-duty vehicle technologies, charging and refueling infrastructure, and critical minerals and related supply chains will be available to support this level of stringency (as many commenters agreed with and provided technical information to support).

"Our assessment of the final program as a whole is that it takes a balanced and measured approach while still applying meaningful requirements in MY 2027 and later to reducing GHG emissions from the HD sector.”