Environment & Energy Report

Volvo, Truck Groups Say EPA Exemption Comes at Their Expense

Dec. 4, 2017, 12:46 PMUpdated: Dec. 4, 2017, 11:14 PM

Exempting some trucks from federal emissions requirements mocks the massive investments that companies such as Volvo have made to clean up their vehicles, industry representatives told the EPA.

At a Dec. 4 public hearing, Environmental Protection Agency officials heard little support for the agency’s proposal to exempt glider kits from Obama-era greenhouse gas standards for heavy-duty trucks. Glider kits are new truck chassis and cab assemblies built for the installation of a used engine and transmission.

The hearing exposed a split within the trucking industry: While glider kit makers have cheered the EPA’s plans—which came at their request—major truck engine manufacturers, including Volvo Group North America, are strongly opposing any exemption for the equipment.

By removing glider kits from the EPA’s 2016 regulation, trucking groups say, the agency would allow a small portion of the industry to circumvent emissions requirements at the expense of companies that are complying with federal air quality standards.

Susan Alt, senior vice president of public affairs for Volvo Group North America, said the EPA’s proposal “makes a mockery” of the company’s investments to develop low-emissions technology and will “hurt a large number of small businesses who are not selling glider vehicles.”

The EPA’s proposal also could lead to regulatory uncertainty through an “inconsistent patchwork” of federal and state requirements, said Pat Quinn, executive director of the Heavy Duty Fuel Efficiency Leadership Group, whose members include Cummins Inc., FedEx Corp., and PepsiCo.

“These companies value regulatory certainty and rely upon that certainty to both manufacture and operate the cleanest and most fuel efficient heavy duty vehicles in the market,” Quinn said.

Circumvent Emissions Limits

Glider vehicles currently make up about 5 percent of the heavy-duty fleet. Both trucking industry and environmental experts said the glider kit market has significantly increased from only a few hundred a year to more than 10,000 in 2015.

That increase reflects “a deliberate attempt to circumvent emissions control requirements,” Rachel Muncrief, heavy-duty vehicles program director at the International Council on Clean Transportation, said.

“How would we all feel if 5 percent of trucks didn’t have to stop for a school bus or abide by the speed limit?” said Robert Nuss of Nuss Truck & Equipment.

Nuss, who also represents the Volvo dealer network, said glider-kit vehicles typically use rebuilt engines from 1999 or older that often don’t include modern pollution controls or comply with safety requirements.

Both trucking industry groups and environmental advocates said the EPA’s proposed glider kit exemption represents a “loophole” the agency would create, through a re-interpretation of the Clean Air Act that is contrary to the law.

That re-interpretation “could have implications farther than gliders,” said Glen Kedzie, vice president and energy and environment counsel for the American Trucking Associations. He said it would effectively allow some vehicle manufacturers to “avoid all regulations” so long as the engine used in the final truck includes some re-manufactured parts.

Economic Incentive

But Farrell Dale Clark Jr., owner of Kentucky-based glider kits maker D&B Trucks & Equipment, said glider vehicles should “in no way” be considered “new vehicles” subject to the EPA requirements. Clark was one of the few who testified in support of the EPA’s proposal at the Dec. 4 hearing.

Clark, whose company makes 15 to 17 glider kits a week, said glider vehicles can be up to 50 percent cheaper than new vehicles—providing a significant economic incentive for smaller businesses. “That’s our main customer base,” he told Bloomberg Environment.

He said Volvo and Mack Trucks are vocal opponents of the EPA’s plans to exempt glider kits because they do not offer a glider vehicle. “They view it as taking sales away from them.”

Clark also cited recent researchfrom Tennessee Tech University—which the EPA references in its Nov. 9 proposal—that found older engines “were just as clean and some even better than the new ones today.” He said old research didn’t involve tests using the cleaner diesel that the EPA and Energy Department have required since 2006.

Data Credibility

Environmental groups and state officials, however, questioned the credibility of the Tennessee Tech data. Andrew Linhardt, Sierra Club’s deputy legislative director for transportation, said that research has been analyzed by several groups and “been found wanting for not following even the most basic guidelines.”

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, the ultimate owner of Bloomberg Environment.

For example, Dave Cooke, senior vehicles analyst for the Union of Concerned Scientists, said the Tennessee Tech research was conducted by Fitzgerald Glider Kits, a major maker of the equipment, using their vehicles. Cooke said the analysis “didn’t use the industry standards’ test cycle” and tried to judge particulate matter emissions “simply by eye.”

Paul Billings, senior vice president for advocacy for the American Lung Association, cited a Nov. 20 report from the EPA showing that glider vehicles emitted 55 times to 450 times higher particulate matter emissions than comparable model year 2014 and 2015 trucks.

The EPA is going “to be very hard-pressed to make the argument that they don’t have the authority to regulate these vehicles,” Linhardt told Bloomberg Environment, adding that environmental groups’ and trucking companies’ attorneys will be “ready to pounce” if the EPA goes ahead with its plans.

The agency is “trying to do a carve-out for one company essentially while the rest of the industry is on board.”

The comment period ends Jan. 5.

(This story has been updated with additional reporting from the Dec. 4 hearing.)

To contact the reporter on this story: Abby Smith in Washington at asmith@bloombergenvironment.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bloombergenvironment.com

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