UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY

2000 TRAVERWOOD DRIVE

ANN ARBOR, MI  48105-2498

									     OFFICE OF

									AIR AND RADIATION

August 2, 2016

MEMORANDUM

SUBJECT:	Tractor-Trailer Cost per Ton Values

FROM:	Angela Cullen, Engineer, Assessment and Standards Division

Jessica Brakora, Engineer, Assessment and Standards Division

Office of Transportation and Air Quality

TO:	Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for
Medium- and Heavy-Duty Engines and Vehicles - Phase 2 - Dockets
NHTSA-2014-0132 and EPA-HQ-OAR-2014-0827



The agencies are adopting separate standards for the tractors and
trailers, rather than combining emission standards for tractors and
trailers into a single numerical standard, because these industries have
drastically different business sizes, manufacturing practices,
resources, and experience with EPA regulations.  Additionally, we are
not aware of any manufacturers that produce both tractors and trailers.
We also evaluated technology and compliance costs for each individual
vehicle sector, because these costs would be distributed among the
manufacturers within a given sector.  However, the overall program
benefits and costs were calculated considering how the vehicles are
actually used in the real world.  Thus, tractors and trailers were
evaluated as combined tractor-trailer vehicles.

The agencies modeled the tractor-trailer vehicles in MOVES by combining
the aerodynamic, tire, and energy improvements from tractors and
trailers to determine the emissions impact of the combined
tractor-trailer portion of the Phase 2 rule.,  The agencies used the
emission impacts, along with the total costs, to determine the cost per
ton of CO2eq reduced, as shown in RIA Chapter 7.2.5. The total CO2
reductions in calendar year (CY) 2030 from the combined tractor-trailer
program is projected to be 64 MMT CO2eq (of which 47.6 MMT CO2eq are due
to downstream reductions and 16.8 MMT CO2eq are due to upstream
reductions).  The total technology, compliance, research and
development, and maintenance cost for the tractor-trailers is projected
to be $2.3 billion.  Also, as noted in Chapter 7.2.5 of the RIA, the
agencies estimate the cost per metric ton of CO2eq reduction without
considering fuel savings to be $36 for tractor-trailers in 2030.  This
value compares favorably with the levels of cost effectiveness that the
agencies found reasonable for light duty trucks (see 77 FR 62922).     

It was of interest to also develop a simple estimate of the cost
effectiveness of tractors and trailers separately.  To estimate
separated reductions, we used MOVES to calculate the downstream CO2
reduction for trailers in CY 2030 by only considering the aerodynamic,
tire and energy improvements from trailers; tractors were assumed to
remain at Phase 1 levels of performance.  This reduction was found to be
8.0 MMT CO2eq.  If we apply the same ratio of upstream reductions to
downstream reductions found for the combined tractor-trailers, the
upstream reductions from trailers (again, for CY 2030) would be about
2.8 MMT CO2eq, for a total emission reduction of 10.8 MMT CO2eq for the
trailer program.  We also project that the trailer program will cost
$200 million of the $2.3 billion cost of the combined tractor-trailer
program (without accounting for fuel savings).  Using these projections,
an estimate of the cost effectiveness of the trailer program in 2030 is
approximately $21 per ton of CO2eq reduced.  Moreover, as with all other
standards in the Phase 2 rule, the associated lifetime fuel savings are
greater than the total costs, so that there is no net cost to the
standards.  In other words, they pay for themselves.  Thus, the $21 per
ton understates the cost-effectiveness of the trailer standards.

We did not perform a similar separate MOVES analysis for
tractor-specific reductions.  Instead, we assume the same total
reductions of 64.4 MMT CO2eq from the combined tractor-trailer program
and subtracted the 10.8 MMT CO2eq attributable to trailers, to project
that 53.6 MMT CO2eq emission reductions are attributable to tractors. 
We also project that the tractor program would cost $2.1 billion of the
$2.3 billion cost of the combined tractor-trailer program (without
accounting for fuel savings).  A resulting estimate of the cost
effectiveness of the tractor program for 2030 is approximately $39 per
ton of CO2eq reduced.  Based on these results we are confident that the
trailer program is more cost effective than the tractor program, even
though the analysis makes some simplifying approximations. Considered
separately, both the tractor and trailer standards are cost-effective in
this analysis, comparing favorably to the cost effectiveness of CO2
reductions from light duty trucks. There is no question the trailer and
tractor standards are cost-effective and provide significant net
benefits. 

This analysis was performed for a single calendar year and from it we
can qualitatively project that trailers would be more cost effective
throughout the timeframe of this rulemaking.  However, within MOVES,
tractors and trailers are modeled as a unit. As a result, their
individual contributions to inventories and inventory reductions cannot
simply be gleaned from the normal MOVES output data. MOVES works this
way because that is how combination tractors and trailers actually
operate – trailers do not operate without tractors and the
overwhelming majority of miles driven by tractors are driven with a
trailer attached. Even with the numbers we have generated, which split
tractor and trailer results, they cannot be considered as independent of
one another. 

Notice that the combined GHG impact CY 2030 from the combined
tractor-trailer program of 64 MMT CO2eq is identical to that shown for
the combined program in our overall impacts tables in RIA Chapter 7.2.5.
If we were to generate truly separate tractor and trailer results, along
with the desired combined tractor-trailer result, we would have to do
three times the number of MOVES runs and analyses rather than the single
MOVES analysis done to support this rule. One analysis would look at the
tractor program independent of the trailer program. Another, the trailer
program independent of the tractor program. The summation of which would
be different than the third analysis (i.e., the analysis we have done)
which considers synergies of the two programs together. The same would
then have to be done for upstream emissions impacts once the MOVES
modeling was completed.

Therefore, the unique tractor and trailer results presented here are
really an approximate division of the full program’s impacts split
between tractor and trailer based on a single calendar year of modeling
in MOVES. As such, they do not represent the tractor versus trailer
results truly independent of one another but rather tractor versus
trailer results in combination with one another.  The results shown here
can also be considered to be an analysis of how cost-effective the
trailer standards would be if we had adopted them without also adopting
new tractor standards, and vice versa for the tractor standards. 

.  .

 See RIA Chapter 5.3.2.3.1.1.

 Note that the agencies considered the additional weight of aerodynamic
technologies, expressed as negative weight reductions, in the trailer
input values.  See our input file in the Docket:  “FRM –
Tractor-Trailer Inputs to MOVES.xlsx” EPA-HQ-OAR-2014-0827.

Tractor-Trailer Cost per ton Values, Page   PAGE  3  of   NUMPAGES   3 

