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July 22, 2016   |   Diesel Technology Forum

Policy Insider

A $2.7 Billion Missed Opportunity

For any level of funding, more near-zero NOx technologies may find their way on the road and at work with clean diesel than other technologies.


The VW settlement may be the second biggest environmental settlement in U.S. history but it might turn out to be the biggest missed opportunity to clean up the air. Right before the July 4th holiday, the Department of Justice and VW released the details of their settlement to fix the 550,000 faulty cars deployed with “defeat devices” to skirt emissions standards and clean up the emissions generated by these cars going back to 2008. The massive $14.7 billion settlement includes a $2.7 billion trust to clean up emissions of oxides of nitrogen (NOx) – the pollutant that is the focus of the agreement. Unfortunately, the $2.7 billion trust missed the mark by incentivizing unproven NOx reduction technologies at the expense of available clean technologies.  Why should we wait for years for clean air when we can have it today?

What are bigger sources of NOx emissions… trucks, powerplants or factories?
When it comes to cleaning up NOx emissions, the enormous variety of cars, commercial trucks, agricultural and construction equipment, marine vessels and other equipment represent almost 60 percent of NOx emissions generated in 2014, according to the National Emissions Inventory compiled by the U.S. Environmental Protection Agency.  This is the largest category of NOx emissions.

Within the large category of vehicles and equipment, diesel sources represent the largest contributor to NOx emissions, as estimated by the California Air Resources Board.  Cleaning up these category of “mobile” sources will generate the greatest improvement in NOx emissions reduction.

What is responsible for the biggest cut in NOx?Clean diesel.
The adoption of the latest clean diesel technologies will provide the biggest anticipated reduction in NOx emissions, according to estimates provided by the California Air Resources Board. The average annual reduction in NOx emission generated from diesel engines that power trucks and equipment will fall by 600 tons each day between 2012, the last full year for which there is data, and 2035.

Technologies to meet near zero NOx standards are on dealer lots today.
These impressive NOx emission reductions are attributable directly to the roll-out of existing clean diesel technologies. From commercial vehicles, to construction and agricultural equipment and larger engines that power locomotives and marine vessels, clean diesel technologies have been developed and are ready today to reduce NOx emissions to near-zero levels relative to previous generations of engines. These near-zero NOx emission technologies have been developed to meet stringent emissions standards established by the U.S. Environmental Protection Agency (EPA). Beginning in 2010, all commercial vehicles rolling-off of assembly lines were required to be powered by an engine that meets near-zero NOx emissions requirements. Beginning in 2014, off-road equipment is required to be powered by an engine that meets similar near-zero NOx emissions reduction rules, also known as Tier 4 standards.

Diesel engines are important because they power over 90 percent of commercial vehicles today and almost the entirety of large off-road equipment.

While clean diesel technologies are available today to reduce NOx emissions by over 95 percent relative to previous generations of technologies, the adoption rate of available new diesel technology is relatively slow due to the durability and longevity of diesel engines. Replacing a greater number of older diesel engines with clean diesel engines quickly will lead to immediate air quality benefits.

How to reduce 86 tons of NOx a day…today?
Air quality regulators in southern California estimate that NOx emissions could fall immediately by 70 percent , or 86 tons a day, if all commercial vehicles in operation were powered by a clean diesel engine…a technology that is ready today.

The quicker turn over of older diesel commercial trucks will deliver air quality benefits to other regions.  According research commissioned by the Diesel Technology Forum, one-in-four commercial vehicles in operation comes with an engine that meets the near-zero NOx standard.  If more of these vehicles were replaced with available clean diesel technology immediate air quality benefits accrue.  For example, clean diesel commercial vehicles in the road today in New York have reduced 250,000 tons of NOx. An additional 95,000 tons of NOx could be reduced immediately is all commercial vehicles came with a clean diesel engine.

Additional Air Quality Benefits Under Greater Adoption of Clean Diesel Technology in Commercial Vehicles (eliminated tons NOx/year)

Share of the fleet with a clean diesel engine

Pennsylvania

New York

New Jersey

100%

105,000

95,000

63,000

75%

68,000

64,000

43,000

50%

31,000

34,000

22,000

Source: Research Commissioned by the Diesel Technology Forum (2016)

 

The Big Missed Opportunity
Despite the enormous benefits provided by widely available clean diesel technology, the $2.7 billion Environmental Mitigation Trust to clean up NOx emissions provides relatively little benefit for clean diesel technology in favor of technologies that are largely unproven. Why should we all wait for these unproven technologies to catchup to clean diesel to breathe better air?

For large classes of vehicles, the program provides much greater funding for all-electric applications than are afforded to clean diesel technology. For example, the Trust will pay for 75 percent of the cost of an all-electric Class 8 tractor but only 25 percent of the cost of a new diesel engine. Outside of small niche applications, there is currently not a commercially available all-electric Class 8 tractor that can meet the demanding duty cycle of a long haul tractor typically traveling 100,000 miles each year hauling up to 50,000 lbs of freight. Clearly, much greater air quality benefits will accrue to communities across the country today if clean diesel technologies received equal funding treatment in the program. 

The U.S. Department of Transportation recently estimates that clean diesel technologies provide the biggest bang for the buck when it comes to NOx reduction investment relative to other technologies. 

How Much Investment is Needed to Reduce 1 ton of NOx Emissions?

Technology

$ per Ton of NOx Reduction

Idle Reduction

$2,040

Diesel Engine Replacement: Heavy-Duty Truck Engines

$13,748

Diesel Engine Replacement: Transit Bus Engines

$51,131

Diesel Engine Replacement: School Bus Engines

$77,315

Extreme Temperature Cold Start

$364,817

Car Sharing

$319,608

Bike Sharing

$1,217,644

Electric Vehicle Infrastructure

$1,462,694

  

Given clean diesel’s cost effectiveness, more NOx can be eliminated immediately by investing Trust revenue in clean diesel technologies. Put another way, for any level of funding, more near-zero NOx technologies may find their way on the road and at work with clean diesel than other technologies.  These immediate term benefits are severely diluted by the disparity in treatment of technology. 

The second biggest environmental settlement may be end up as the biggest missed opportunity. The ink is not dry yet on the settlement and negotiators still have time to provide a technology neutral approach to provide greater immediate term air quality benefits for the same investment.



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Key Contact

Ezra Finkin
Director, Policy
efinkin@dieselforum.org
301-668-7230

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