Energy Efficiency In Boston’s Transportation Sector: Opportunities For Savings

Energy Efficiency In Boston’s Transportation Sector: Opportunities For Savings – The transportation sector is the largest direct source of greenhouse gas emissions in the United States, surpassing the power sector in 2015. Cars and light trucks (including pickup trucks and SUVs) account for 57.5 percent of emissions from transportation. Medium and heavy vehicles, which include tractor trailers, large pickups and vans, delivery trucks, buses and garbage trucks, produce about 26 percent of transportation emissions.

The figure shows total emissions from the US transport sector in 2020. Emissions from pipelines, lubricants and mobile sources other than transport are shown together as others.

Energy Efficiency In Boston’s Transportation Sector: Opportunities For Savings

Energy Efficiency In Boston's Transportation Sector: Opportunities For Savings

In April 2010, the federal government finalized the first harmonized set of light vehicle standards in cooperation with major automakers and the state of California. The Environmental Protection Agency (EPA) established greenhouse gas emission standards and the National Highway Traffic Safety Administration (NHTSA) established average fuel economy (CAFE) standards. The first CAFE standards were adopted in 1975, and the first GHG vehicle standards were adopted in 2010.

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The 1975 Energy Policy and Conservation Act directed the US Secretary of Transportation to establish Corporate Average Fuel Economy (CAFE) standards for new passenger cars. CAFE is the sales-weighted average fuel economy in miles per gallon (mpg) for the vehicles in a manufacturer’s fleet. This law was updated in 2007, when Congress increased fuel economy standards for passenger cars and also established efficiency standards for medium- and heavy-duty vehicles.

California is the only state allowed to set its own air emission standards for motor vehicles. California was granted an exemption under the Clean Air Act because the state had already implemented standards in 1966 to address the critical smog problem and had created an Air Resources Board (CARB) to oversee them. The Clean Air Act states that the EPA must grant a waiver if California’s standards are necessary to meet exigent circumstances and are at least as stringent as federal standards. Other states may choose to adopt California’s emissions standards for vehicles without EPA approval. Seventeen states and the District of Columbia, which account for about 40 percent of U.S. auto sales, currently comply with at least some of California’s vehicle emissions standards.

The order sets a non-binding goal of making 50 percent of all new car and light truck sales ZEVs by 2030. Under the order, “zero emission vehicles” include battery electric, plug-in hybrid electric and hydrogen fuel cell electric vehicles. The order was supported by leading US automakers, including Ford, General Motors and Stellantis, which have voluntary goals to make 40-50 percent of all sales electric by 2030. Labor groups including the United Auto Workers union also supported the order.

In addition to setting the target, the executive order directs EPA and NHTSA to begin the rulemaking process to set emissions and fuel economy standards for passenger cars and light trucks extending through the 2030 model year, to be completed no later than July 2024. directs the agencies to issue standards for medium- and heavy-duty trucks for the 2027 to 2030 model years, which was completed in December 2022.

Reducing Carbon Pollution Through Infrastructure

Vehicle emissions and fuel economy standards have varied since they were established in 1975. Most recently, in August 2021, the Biden administration proposed new and revised standards for passenger cars and light-duty vehicles for the 2023 through 2026 model years. In December 2021, the EPA issued the final rule establishing greenhouse gas emissions standards through the 2026 model year. In addition, President Biden signed Executive Order 14037, setting a nonbinding goal of making 50 percent of passenger car and light truck sales zero-emission by 2030. The order also directs the EPA and NHTSA to establish new fuel economy – and emission standards for passenger cars for the model years 2027–2030 which must be completed by July 2024 at the latest.

In December 2021, the Environmental Protection Agency (EPA) issued new greenhouse gas emission standards for new passenger cars and light trucks. The final rule requires automakers to meet a projected industry-wide goal of 161 carbon dioxide grams per mile (g/mi) by 2026, increasing in stringency by 9.8 percent from the 2022 to 2023 model years, 5.1 percent in the 2024 model year, 6, 6 percent in model year 2025, and 10.3 percent in model year 2026.

The rule is expected to result in 3.1 billion tons of avoided carbon dioxide emissions through 2050 and reduce gasoline use by 360 billion gallons. The ambitious standards provide net economic benefits of $120 to $190 billion over that period, including $8 to $19 billion in public health benefits resulting from lower emissions of other pollutants responsible for smog and soot, saving consumers hundreds of billions of dollars at the pump.

Energy Efficiency In Boston's Transportation Sector: Opportunities For Savings

Note: EPA’s greenhouse gas emission standards are expressed in carbon dioxide grams per mile (g/mi), while NHTSA’s proposed fuel economy standard is expressed in miles per gallon (mpg). EPA’s rule also includes an estimated impact on fuel economy (shown as CO

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EPA’s final rule retains and reintroduces several flexibilities and incentives from previous rules, including maintaining the existing program for credit-based averaging, banking, and trading greenhouse gas emissions first established in 2010. While the draft rule proposed extending the life of prior-year credits to make it more flexible , the EPA explains in the final rule that it believes the current trajectory of the electric vehicle market combined with the leniency under the previous SAFE rule will allow automakers to meet the standards without having to extend the life of the oldest credits. The rule temporarily restores the advanced technology vehicle multiplier credits established under the Obama administration but removed by the Trump administration, which allowed zero and near-zero emission vehicles to be weighted more heavily toward meeting standards than conventional vehicles. This multiplier will only apply in the 2023-2024 model years to support the transition to stricter standards. In addition, it reinstates the off-cycle credit program that allows automakers to count non-exhaust energy efficiency improvements that reduce hydrofluorocarbon (HFC) or other emissions toward total reductions in greenhouse gas emissions for the 2023 through 2026 model years. Finally, the rule restores full-size pickup truck incentives for hybrids for the 2023 model years -2024, which was originally removed by the SAFE rule.

In addition to the EPA’s greenhouse gas emission standards, the National Highway Traffic Safety Administration (NHTSA) finalized new fuel economy standards for new passenger cars and light trucks for the 2024-2026 model years in March 2022. The standards increase fuel efficiency by eight percent each year in the 2024-2025 model year and ten percent in the 2024-2025 model year 2026, reaching a fleet-wide average of 49 mpg by 2026, an increase of nearly 10 mpg from model year 2021. While NHTSA and EPA often coordinate fuel economy and greenhouse gas standards, NHTSA is required to provide more lead time than EPA. The agencies proposed standards with different effective dates to reflect this.

Both EPA and NHTSA cited significant manufacturer commitments to increase production of electric vehicles and improve fleet-wide efficiency in the coming years as reasons that manufacturers will be able to meet the more stringent standards in the proposals. Additionally, both agencies cited the voluntary agreement five automakers (BMW, Ford, Honda, Volkswagen, and Volvo) entered into with the state of California to meet significantly stricter emissions standards than those set by the SAFE rule, demonstrating their existing commitments to significantly exceed these standards.

In April 2020, the EPA and NHTSA issued the Safer Affordable Fuel Efficient (SAFE) Vehicles Rule, which required automakers to improve fuel efficiency by 1.5 percent annually from the 2021 to 2026 model years. The SAFE rule was less stringent than the Obama-era rule it replaced. This rule would have required automakers to improve fuel efficiency by 5 percent annually for car models from 2020-2025, reaching 46.7 miles per gallon (mpg) by 2025.

Corporate Social Responsibility

The SAFE rule rationale suggested that increased fuel efficiency standards have a “rebound effect” that encourages more driving and therefore more exposure to the risk of traffic accidents; that higher vehicle costs from increased fuel efficiency standards discourage consumers from purchasing new vehicles and encourage them to continue driving older, less safe vehicles; and that the manufacturer “lightweights” vehicles to achieve fuel efficiency makes vehicles less safe. The EPA and NHTSA estimated that the SAFE rule would reduce vehicle costs by more than $1,000, but consumers would spend between $1,125 and $1,425 more in fuel costs over the lifetime of the vehicle. The SAFE rule was also projected to reduce electrification rates by 2029 to 7.9 percent compared to 19.6 percent under the Obama-era rules.

The SAFE rule also repealed state emissions programs. In September 2019, EPA and NHTSA issued a final action that allowed federal vehicle standards to preempt state action and revoked the waiver for California’s Advanced Clean Cars Program, Zero Emission Vehicle Program (ZEV), and Low-Emission Vehicle Program (LEV). In response, California and other states sued in federal court to challenge the final act of preemption of state vehicle standards. In April 2021, the Biden administration’s EPA and Department of Transportation began the process of dropping the restrictions on California’s waiver. In December 2021, NHTSA issued a   repealing the SAFE Vehicle Rule Part One, and in March 2022, the EPA did the same, thus reinstating California’s waiver and the ability of other states to adopt the California standards.

In October 2012, EPA and NHTSA finalized the second set of national program standards for the 2017–2025 model years

Energy Efficiency In Boston's Transportation Sector: Opportunities For Savings

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