ATD report: US EPA underestimated costs of truck emissions compliance

12 March 2012

The National Automobile Dealers Association and American Truck Dealers (ATD) released a report—titled ‘A Look Back at EPA’s Cost and Other Impact Projections for MY2004-2010 Heavy-Duty Truck Emissions Standards’—that questions the US Environmental Protection Agency’s (EPA) estimates of the costs of compliance with 2004-2010 emission standards for heavy-duty engines.

EPA underestimated compliance costs by a factor of 2 to 5, according to ATD analysis. ATD calculated actual truck compliance costs based on individual sales invoices and OEM sales documents. Many invoices contained specific cost line items—surcharges or escalators—that specified cost increases attributable to the new emission standards.

For 2010 emission compliance for heavy heavy-duty trucks, the actual surcharges by different manufacturers varied from $7,736 to $9,600, compared to an amount of $3,419 predicted by the EPA.

The cumulative surcharges for 2004 through 2010 emission compliance in heavy heavy-duty trucks by Freightliner, Volvo and Western Star were $21,440, $21,471 and $21,876, respectively, while the EPA predicted a cost increase of $5,136.

These cost increases, in combination with customer’s uncertainty about the new emission technologies, caused truck market disruptions due to significant pre-buy of pre-2004, pre-2007 and pre-2010 vehicles.

The study also warns about EPA cost projections on the upcoming fuel economy standards for heavy and light vehicles and calls into question EPA’s and the National Highway Traffic Safety Administration’s ability to make long-term cost projections on technology that has not yet been commercialized.

Source: NADA