Europe’s global leadership on vehicle emission standards at risk in the truck sector

While most of the world follows Europe’s conventional pollution emission standards, and pays great attention to Europe’s CO2 standards for passenger vehicles, Europe has been surprisingly slow to act on heavy-duty vehicle CO2 standards. As a result, the United States, Canada, Japan and most recently China have all set some form of heavy-duty vehicle efficiency standards without the benefit of Europe’s traditional leadership.

The European Commission appears satisfied with a CO2 reporting requirement, in sharp contrast to the presidential-level importance that the US is placing on truck standards.

Europe’s plans for a CO2 reporting requirement rest on two assumptions: One is that this reporting scheme will give the end user more information on which to base their purchasing decision, which will lead to increased competition among truck manufacturers, and thus effectively contribute to the adoption of the most energy-efficient technologies in trucks. The second, supporting the first, and noted explicitly in a supporting memo, is that European trucks are already much more fuel efficient than US trucks because of the market forces caused by high European fuel prices.

Let’s explore the validity of these assumptions on which the Commission’s newly announced strategy is based.

Are European Union trucks really more fuel-efficient than North American trucks?

It is often said by European truck manufacturers (and others) that EU trucks are more efficient than those in the US and Canada, but there is scant data to support this statement. Performing an apples-to-apples comparison of fuel efficiency has a number of challenges. There are many factors—such as metrics (L/km, L/ton*km), payload, vehicle speed, traffic conditions, emissions control level, and topography—which differ significantly from region to region. For example, the Europe-wide speed limit for trucks is around 80 km/h, which is significantly lower than the average highway speed in North America. As vehicle speed increases, fuel economy worsens. So, while the lower speeds in the EU should result in better fuel consumption overall, it certainly doesn’t follow that the trucks are more efficient. As another example, in the passenger-vehicle market it is straightforward to use liters of fuel per kilometer (L/km) as a metric for fuel consumption. However, in the heavy-duty, freight-hauling world, the L/km metric does not capture the efficiency with which a truck hauls its cargo. Therefore, many argue that L/ton*km is a more representative metric. Again, this distinction convolutes any regional (or even truck-to-truck) comparisons.

Pollutant emissions regulations can also impact fuel consumption. As regulations have tightened on HDV emissions of PM and NOx in recent years, OEMs have been obliged to install aftertreatment and emissions control systems on their engines. The US and Canada mandated diesel particulate filters (DPFs) on heavy-duty trucks beginning in 2008, while in the EU DPFs are only required on trucks starting in 2014. These filters virtually eliminate harmful diesel PM emissions, but they have been shown to modestly increase fuel consumption.

HDV efficiency, US v EU, 1995-2015

Average fuel consumption values for US and EU on-highway tractor-trailer trucks (US in red, EU in blue). [Sources: EU numbers averages from testing reported in Lastauto Omnibus and Trucker Magazine as well as numbers reported in presentations from industry. US numbers reported by ACT Research to NAS committee. Future dates are estimated from the US GHG regulation.]

So, is there a way to compare the fuel consumption of North American and European Union trucks? The first thing to look at is what is being reported in the public literature. ICCT searched the available literature for in-use fuel consumption data on tractor-trailers and the average fuel consumption values for a range of 25 years are summarized in the figure at left.

The figure shows that although EU trucks have achieved slightly better fuel consumption over the last two decades, in recent years North America has caught up and has even begun to surpass the EU as of this year. The figure shows that NOx and PM emissions regulations have impacted fuel consumption (at times negatively) over the past 10–15 years. Yet, it is likely that as we move into the future, the regulations that will be the most impactful on fuel consumption rates will be of the efficiency variety, as can be seen by the downward trend in North America. Publicly reported and reliable data can be scarce and the data reported in the figure below comes mostly from data reported in magazines (for the EU data points) and from the fleets themselves (for the North America data points). As previously mentioned, the vast number of test-to-test variables can make direct comparisons iffy, so a wide range of fuel consumption values should always be assumed. The two key factors are (1) the EU moving to Euro VI standards (the negative impact of which is likely temporary) and, most importantly, (2) the implementation of Phase 1 of the US HDV GHG standard (which was also adopted by Canada).

So are EU trucks more efficient than North American trucks? Perhaps this was true in the past, but the limited amount of data that we have collected to date suggests that this is no longer true.

Given the limitation of this type of broad regional comparison, it is also informative to take a look at truck technology. For example, efficiency technologies, such as aerodynamic technologies for tractors and trailers and automated manual transmissions, have different market penetrations in the EU and North America. The best-selling models in North America have in recent years morphed into aerodynamically streamlined trucks, and a significant number of trailers are now outfitted with aerodynamic devices (such as side skirts and gap reducers) as well. This trend is not nearly so evident in the EU, likely due to the fact that the lower average highway speeds reduce (but certainly do not eliminate) the benefits to be gained. In addition, other legal constraints (such as the limit on overall truck length) in the EU have had the unintended consequence of limiting the use of certain aerodynamic devices. These constraints are currently in the process of being removed which should pave the way for more uptake of certain aerodynamic technologies on trucks and trailers. Conversely, automated manual transmissions, which improve fuel economy over conventional manual shift transmissions by optimizing shifting points and gear selection, have been historically much more popular in the EU, but are only more recently gaining ground in North America. On the whole, it is fair to say that, although the penetration of various technologies differs in the EU and North American truck market there is not currently one clear technology winner.

That being said, the Phase 1 GHG regulations in the US and Canada, which began its four-year implementation this year, is speeding up the adoption of a number of technologies into the North American fleet, such as improved aerodynamic design, use of lower rolling resistance tires, vehicle weight reduction, automatic idle shut off and speed limiters. Engine technologies such as friction reduction, aftertreatment optimization, and turbocompounding are also coming to market at increased rates. Overall, the first phase of the regulation promises to improve fuel efficiency of tractor-trailer trucks from 9%–23% between MY2010 and MY2018. The next phase of the regulation promises to push the envelope further, with technologies such as improved transmissions, engine/transmission integration, engine downsizing and downspeeding, trailer aerodynamics, and even waste heat recovery. Would market forces themselves drive significant penetration of these technologies in the heavy-duty vehicle market?

Are regulations needed to force technology adoption?

It is widely understood that strong standards can force cost-effective efficiency technology into the market faster and with higher penetration than standard market forces. The passenger vehicle fuel economy standards that have been adopted across the globe are a prime example of this phenomenon. Yet, knowing this, the Commission still proposes to rely on market forces to drive technologies to the HDV market. The Commission concedes that there are “market barriers to the uptake of energy-efficient technology” which slow down or block widespread adoption of cost-effective efficiency technologies and they highlight the lack of reliable information as the primary barrier that they hope to overcome with this CO2 reporting plan. Studies performed in North America and the EU do in fact show that lack of information is one of the top barriers to technology adoption. However, these same studies also show that most fleets are very hesitant to believe numbers reported by government programs and instead will prefer to test the technology themselves. In addition, a number of other barriers to adoption have been reported, such as lack of capital, lack of availability, and split incentives. The Commission’s plan does not specifically address these additional barriers.

In fact, the current situation for heavy-duty trucks shows some similarities to the passenger car situation in the EU a few years ago. For cars, the European Commission adopted a strategy in 1995 to reduce CO2 emissions that was based on three pillars: voluntary commitments from the car industry to cut emissions, improvements in consumer information (vehicle CO2 labeling) and the promotion of fuel-efficient cars via fiscal measures. Twelve years later, in 2007, the Commission then stated that the voluntary approach from car manufacturers was insufficient to meet the objective of reducing CO2 emissions, and finally moved to a mandatory CO2 standard—which proved to be significantly more effective in bringing down CO2 emissions. By failing to either fully address all existing market barriers or, alternatively, force technology into the market through the use of standards, it is unlikely that the CO2 reporting plan will have any significant impact on HDV fuel consumption. It is quite probable that due to lack of an EU HDV efficiency standard over the next 10 years North America will surpass the EU to become the definitive leader in advanced truck technology. With annual EU HDV sales volumes second to only China and the US, and with many of its truck manufacturers being global leader with major exports in foreign markets, it is critical that the EU embrace a more progressive stance on CO2 emissions from HDVs.