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Biden Must Boost Climate Impact of Truck and Bus Standards by Leveraging EV Momentum

January 21, 2022
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To maximize cuts in harmful emissions, the Biden administration needs to leverage the swift increase in electric vehicles (EVs) as it prepares this month to revise rules limiting the greenhouse gases and other pollutants that trucks and buses can emit. The Environmental Protection Agency (EPA) will soon propose changes to heavy-duty vehicle standards, presenting a major opportunity to reduce emissions from these vehicles. The climate effort is expected to be part of a crucial larger rule that also will reduce emissions of nitrogen oxide (NOx), a dangerous local pollutant; the combined proposal is now pending in White House review.

The EPA needs to make substantial changes to the existing greenhouse gas (GHG) rules to take advantage of emerging technologies and avert unintended adverse outcomes.

Here’s why: The greenhouse gas standards at issue were set by EPA in 2016 and regulate a range of larger trucks and buses, or heavy-duty vehicles. These rules, known as Phase 2 emissions standards, did not anticipate—and hence do not capitalize on—the strong advances in electric trucks and buses now underway.

The average fuel efficiency and GHG emissions levels they require could be achieved with no EVs at all. As a result, they would allow petroleum-fueled trucks to stop improving, or even worsen, in fuel efficiency as more electric trucks are sold (which is now expected), squandering the emissions reduction benefit of this new technology. The EPA must update the standards at the first opportunity—model year 2027—to avert this outcome and help drive growth in EV sales.

States are boosting the electric truck market; EPA needs to pitch in by adjusting its standards

Several states have already adopted Advanced Clean Truck (ACT) regulations requiring annual ramp-ups in EV sales for major categories of heavy-duty vehicles, reaching 15%–20% by model year 2027. Several more have begun the process to adopt the rules or announced their intention to do so. Jointly, these states represent more than a third of the heavy-duty vehicle market, and their action will likely lead to increased EV sales beyond their borders as they help achieve economies of scale and increase the availability and variety of EV models in the broader market.

EPA must strengthen the GHG emissions targets to bolster these levels of EV adoption, along with the improvements in internal combustion engine vehicles on which the standards were originally based.

Simply increasing the stringency is insufficient, however. EPA must eliminate the EV “multiplier” in the Phase 2 rule. This multiplier can offset the emission reductions from any EV sale several times over by decreasing the average fuel economy that petroleum-fueled vehicles need to achieve. ACEEE estimates that, assuming the 3% EV sales that are mandated by the states that have already adopted the ACT, the multiplier would effectively reduce the GHG emissions benefit of the standards by at least 40%.

EPA also needs to act to prevent excessive EV multiplier credits earned prior to model year 2027 from being spent on vehicles in subsequent model years; otherwise, the credits from the multiplier can continue to be used, even after it is abolished, and will continue to weaken the standards for the foreseeable future. Model year 2024 through 2026 EV sales combined have the potential to generate EV multiplier credits in excess of the credits from model year 2027.

Meeting the President’s climate mandate

The EPA must take decisive action in its upcoming proposal. This is necessary not only to avert emissions backsliding from outdated credit multipliers, but also to take advantage of the major opportunity that state actions and industry innovation have created to push forward the vehicle market into the future. To ensure that the administration can meet its 50% economy-wide GHG reduction commitment and its pledge to contribute its share to ensuring that global warming is limited to no more than 1.5°C, we need nothing less.

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