Planning for Greenhouse Gas Phase 2 - Things to consider

By Generation Next Treasurer Jennifer Pellersels
Customer relations manager, Altec Industries

Published in the December 2016 issue of Generation Next Edition.

Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” Over the years, I have learned that fleets – no matter the vocation – need to plan for the long-term. Our industry has had to adapt to major changes over the past decade due to Environmental Protection Agency (EPA) regulations regarding Class 2-8 trucks.

In 2007 and 2010, chassis and engine OEMs made major changes to their product in order to comply with EPA regulations. The requirements impacted chassis technology, options and price. In my own experience, and in speaking with other fleet and purchasing managers in the utility/vocational market, these changes have caused companies to evaluate their fleet purchasing strategies. 

There are many factors to consider when making your next fleet purchase. Here are some elements regarding GHG Phase 2 I’ve found to be helpful with my own planning process.

Understand the timeline
Many articles explain the expectations for GHG Phase 2, but I find visual aids to be most helpful. Based on a variety of resources, I’ve built the graphic below as a high-level summary of when GHG implementation targets will hit. Individual fleet size and vehicle replacement cycles are important to factor into the schema.      

What is the goal?
The primary goal of GHG Phase 2 is to reduce carbon emissions and fuel costs for medium- and heavy-duty trucks. Heavy pickups and vans are to become 2.5 percent more efficient each model year between 2021 and 2027. Carbon emissions are to be reduced by 1.1 billion over the lifetime of these new vehicles. Estimated fuel savings are to be five percent for tractor engines and four percent for vocational engines.

The Department of Energy will subsidize the OEMs involved in making this happen; $140 million is on the books for it. This will cost an estimated $12,000-14,000 more per large truck. Although there is an increase in base price, support for the new standards argue that the long-run savings in fuel costs will more than make up for it. For more information, visit the Washington Post and whitehouse.gov.

Are you planning for GHG Phase 2?
Based on estimated timeline and fuel savings as well as the potential price increase on for trucks, a fleet and/or purchasing manager needs a plan. If you don’t plan and prepare to understand what’s coming in the next five to 10 years, then you and your company can be caught off guard. Speaking as a buyer for a utility company, it is important to think ahead. In the vocational market, truck changes impact how our product is mounted and integrated with the chassis. It is critical to understand how changes in the truck industry impact our market. I imagine this to be true for other vocational markets as well.

Also, trucks are getting more complicated as technology continues to be incorporated into the vehicles. Fleet/purchasing managers need to make sure operators and mechanics are prepared for the technology change. If a fleet/purchasing manager is not prepared for the changes, their fleet could suffer the consequences.

We can expect the cost of trucks to increase with the new technologies. If a fleet has to replace a number of units a year, it is critical to understand the estimated unit cost for the next five to 10 years – for the sake of budget planning. 

In summary, truck changes are on the horizon and fleets, no matter the vocation, need to start planning five to 10 years out.

Learn about Generation Next. 

More resources at The Work Truck Show® 2017 and Green Truck Summit

Held in conjunction with The Work Truck Show, the Green Truck Summit is the industry’s premier conference on clean energy innovations for commercial vehicles.

Produced by NTEA – The Association for the Work Truck Industry, the events take place at the Indiana Convention Center in Indianapolis, Indiana. The Green Truck Summit runs March 14-16. The Work Truck Show 2017 runs March 14–17. Educational sessions begin March 14, and the exhibit hall is open March 15–17. Learn more.

Sessions to help you with your GHG Phase 2 planning: