Focus on EPA GHG Phase 3 emissions regulations

Focus on EPA GHG Phase 3 emissions regulations

This isn't just another round of stricter diesel engine emissions.

While CARB has been creating headaches for commercial vehicle operators and manufacturers alike with Advanced Clean Fleet and Advanced Clean Truck regulations that aim to rapidly accelerate the adoption of zero-emissions vehicles, the U.S. Environmental Protection Agency (EPA) was hard at work on its own set of sustainability focused emissions: the Greenhouse Gas Phase 3 regulation. The trucking world is no stranger to the stringent emissions requirements of EPA Phase 1 and Phase 2, but this time around the agency is reaching beyond the diesel engine.

The GHG Phase 3 rules emphasize a technological shift towards zero-emissions vehicles (ZEVs) and hybrid drivetrains, particularly for heavy-duty applications, including hydrogen combustion engines, hydrogen fuel cells, and battery electric vehicles (BEVs). However, diesel engines will remain part of the mix through provisions like averaging, banking, and trading, ensuring flexibility for fleets that still rely on diesel.

“The new rules are technologically feasible,” said Alex Boesenberg, vice president of Regulatory Affairs at MEMA Original Equipment Suppliers. “If someone really needs or wants a diesel, they’ll still be able to make one through things like averaging, banking, and trading and other provisions.”

Boesenberg and Collin Shaw, president of MEMA Original Equipment Suppliers, sat down with us to discuss the regulations, and they noted that while feasible, these regulations bring economic challenges, particularly for suppliers. Profitability in the supplier industry has declined from 8.5% in 2017 to about 3% today, according to Shaw. Suppliers must invest in new technologies while ensuring these innovations are economically viable for fleets.

“What I want to make sure happens is the ability to buy the equipment is reasonable,” Shaw said. “That fleets are able to make money on the equipment. If the fleets are not profitable, the supplier base can’t be profitable.”

The pair noted that feedback from MEMA’s manufacturer contingent is mixed. While the technology to meet the new regulations exists, there are concerns about the industrialization process and the overall profitability of adopting these new standards. The industry has seen fluctuating interest and investment in new technologies such as autonomous trucking and electrification. This history of peaks and valleys contributes to the hesitation among suppliers and fleets.

“We’re looking at a lot of technologies that sort of all need to come together in 2027, 2030, and beyond,” Boesenberg said. “If there’s any trouble with that, the EPA reserves the right to conduct another rulemaking sort of off cycle to try to address that.”

Collaboration across the supply chain is vital for navigating these new regulations. Forums like the Heavy Duty Business Forum, which brings together CEOs from the supplier community, OEMs, dealership owners, and fleet operators, play a pivotal role in fostering collaboration.

“We bring these groups together for the reason of listening and understanding where each of the perspectives is coming from,” Shaw said. “This really helps the supplier base, and I think others to inform their decision on how to invest, where to put their people, and where to put their capital.

“The technology is certainly available. The bigger question is the industrialization and how to make this profitable and sustain a business?”

Watch the video for more EPA GHG Phase 3 insight from Shaw and Boesenberg.

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No script? No plan? No problem. Welcome to Fleet Equipment Unscripted—the video interview series that connects you with the greatest minds in the heavy-duty trucking world. Fleet Equipment Unscripted is sponsored by Hendrickson.

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