Tuesday, July 19, 2016

What the Truck?

Major developments in On-Road Truck and Bus Rule, Sustainable Freight and Mobile Source control in the South Coast
So far, 2016 has been a tumultuous year in the world of air quality here in the Golden State. Although within the past few weeks most mainstream air quality news tidbits have been related to the lack of cap and trade activity, the transportation sector is facing the perfect storm.
Strict new engine standards, facility caps and a potential zero emission last mile rule are all part of a larger complex web that is weaving the future for transportation here in the Golden State. It is no secret that California has the strictest regulatory standards for the trucking industry across the US. What may or may not be of a surprise is that the state of California is far from writing the final chapter on their air quality saga. While many believe that what happens in California stays in California, a closer analysis will demonstrate that what happens in California eventually makes its way across the US.

Within the larger universe of both the California and local air quality planning documents is a major reliance on a lower federal NOx new engine standard to meet air future federal air quality goals across the state. It is no secret that if the feds don’t act in implementing the lower standard, then California will seek an exemption to set their own standards with several other states possibly opting in under section 177 of the Clean Air Act. Although some have backed out, over a dozen states could also require the sale of the California engine if California receives the exemption.
However, according to CARB, a California only standard may not be enough. A federal standard is preferred since the majority of trucks operating in California are from out of state. The state and districts feel that a new engine standard will eventually be implemented by fleets across the country through normal turnover, thus resulting in the needed reductions as the engines trickle into California operation.  Furthermore, according to the state, the Federal standard is needed despite the major reductions achieved by current in-use rules, including the crown jewel of the on-road regulatory lexicon, the on-road truck and bus rule.
The on-road rule was initially adopted in 2008, changed in 2010 and implemented in 2012 as part of an effort to reduce criteria pollutants to meet federal air quality guidelines. The rule has forced the turnover of thousands of pieces of Heavy Duty equipment over the last 4 years. These efforts have resulted in significant improvements to air quality throughout the state but ironically enough may also be to blame for the slow adoption of the cleanest diesel technology available, the 2010 emissions and Phase I GHG standards.   

Despite the California only in-use standards under the truck and bus rule, when compared to other states, the in-state California fleet lags far behind in the deployment of the cleanest existing diesel technology. According to the Diesel Technology Forum, only 18% of the California fleet has 2010 or newer engines.
Speculation abounds that the on-road rule may have been the reason for this slow adoption since fleets have been focusing on interim targets instead of looking at normal turnover. The thought is that normal turnover may have resulted in greater penetration of 2010 engine technology since fleets would not be forced to install particulate traps on existing equipment and could instead retire and replace with newer technology.
Nevertheless, CARB could not rely on natural turnover to meet air quality standards, so back in 2008 a rule was imminent. Today, according to CARB, despite the on-road reductions, a federal engine standard is needed to meet the air quality goals were shooting for with implementation of the on-road rule. And adding even more irony to the fire, during their relentless pursuit of federal attainment since adoption in 2008, CARB, by their own admission, has been directly responsible for an actual increase in on-road emissions because of a rule modification that took place in 2014.

Although the complex exemption and phase in pathways provided relief for those who took advantage under the rule prior to the 2014 amendments, the strict standards were “unattainable” for small fleets and so a set of amendments that loosened the rule for this particular sector and others was adopted in 2014.
While CARB was playing the Good Samaritan in helping small fleets with the 2014 amendments, larger fleets felt they were left holding the bag while their smaller and non-asset competitors were given a free pass. Subsequently, a lawsuit was filed shortly after the amendments were adopted and on June 7th 2016, a superior court in Fresno ruled the 2014 amendments were invalid since proper administrative procedures were not adhered to during consideration, adoption and eventual implementation.
Although all amendments were essentially thrown out by the ruling, what this means is CARB will appeal and file for an injunction pushing a final resolution out months if not years. The regulation will exist in its current form until further notice, so although a major event in the CARB zeitgeist, it is not impacting the immediate future for the majority of the industry.
What is impacting the immediate future of the industry in addition to the potentially lower federal engine standards is a collaborative effort by CARB and several other executive agencies to fulfill the Governor’s low carbon vision for transportation trough a sustainable freight plan. The plan has been laid out on a document that to say the least is a comprehensive vision for a lower emission future, if not at a minimum, a wish list. The document is setting specific targets for the trucking industry and looking towards a future where zero emission equipment is everywhere feasible and near zero emission engines everywhere else.

Simultaneously, the South Coast has released a mobile source plan that amounts to an outline for a massive facility cap program across the southern California region. Although the South Coast plan is being ridiculed by environmentalists as business friendly, it still amounts to stricter control of emissions from otherwise currently unregulated “magnet sources” like warehouses and other transportation facilities such as ports and railyards where trucks operate. The plan also looks toward federal money to incentivize the turnover to ultra-low NOx near zero engines, but the money isn’t there yet and many wonder if it will ever be.
The two plans taken together and combined with a formal request to the feds for an even cleaner engine standard should leave the transportation sector with California much to ponder staring in the face of these tumultuous seas. And despite the potential fallout from a significant rule change back to the 2012 standards should CARB lose in court (again) nothing is standing in the way of more air quality improvement measures, compulsory, incentivized or otherwise.

Stay Tuned!

1 comment:

  1. Excellent article Matt. We are in such flux that my estimate is that well over 50% of fleets have some compliant issues that they are not even aware of having. How can your average equipment manager understand a set of rules that change like the weather?