**Heavy Duty Fuel**  **Efficiency Leadership Group FE/**  **GHG Phase II Statement of Princip**  **l e**  **s April, 2015** 

The Heav y Dut y Fuel Efficiency Leadership Group (Leadership Group), a diverse coalition of medium and heav y dut y fleets and advanced technology providers, was formed in 2010. The Group worked collaborativel y with EPA, NHTSA and other stakeholders to inform and support the first ever national program to reduce GHG and improve the fuel efficiency of medium and heav y dut y vehicles. The Leadership Group has no w developed the following Statement of Principles which are consistent with our corporate values and should form the basis for a successful national FE/GHG Phase II program. **Achieve Significant Environmental, Economic and Energy Security Benefits** Phase I will reduce U.S. oil consumption, cut GHG emissions and produce fuel costs savings for fleets. Phase II should drive substantial GHG reductions while achieving important economic and energy

securit y benefits. **Ensure a National Harmonized Program** A sin gle nationwide FE/GHG program must be maintained in Phase II. Inconsistencies between regulatory

agencies (EPA/NHTSA/CARB) must be avoided. Harmonization of certification and compliance requirements is critical. **Maintain Market, Fleet, Fuel and Technolog y Choices**  Fleets are necessarily

diverse in weight, size and capability to perform specific work tasks. Phase II should achieve significant FE/GHG gains without restricting fleet choice of product specifications and FE/GHG technologies needed for different applications. Phase II should be fuel neutral and should not advantage one fuel over another. **Build on Success of Phase I** Phase I utilized proven testing/certification protocols while establishing incentives to drive adoption of advanced and innovati ve technologies. Additionally , it minimized compliance burdens b y rel yi ng heavily on the existing emissions protocols. Phase II should not impose requirements that shift compliance burdens to end

- users. The Phase I framework, which minimized market disrupt ion and compliance burdens, should be maintained and improved for Phase II. **Provide R egulatory**  **C ertainty**  **with Adequate Lead Time and Stability** A l onger term roadmap (up to 10 years) with enough lead time (4 years) and stability (3 years) to develop, mature and deploy advanced technology will provide regulatory certainty and pullthrough advanced solutions that will provide significant GHG and fuel consumption reduction in

an economically

sustainable fashion. This is necessary for both manufacturers to make long

- term investments that would support the new standards, as well as for fleets that need a high level of reliability and cost effective solutions in order to deploy new technology

. **Drive GHG/FE Improve ment Technologies in Tractors, Trailers and Vocational Vehicles**  Greater opportunities exist to drive more significant technology adoption than in Phase I. Apart from the engine standards, tractors were required to meet one set of standards in 2014, traile rs were not included and vocational vehicles were regulated based on tires only. There are challenges in addressing each of these aspects given the diversit y and complexity of the market. Verifiable testing and certification procedures should be adopted th at balance accuratel y and equitably quantifying the benefits of GHG/FE technologies with regulatory complexity . While trailers were not included in Phase I , in Phase II, regulations should be focused on taking advantage of existing GHG/FE technologies for trailers that are already in use today

. **Maintain Incentives and Flexibilities** Credits intended to incentivize early market adoption of advanced FE/GHG technology should be retained. The ATC and I TC programs from Phase I should be improved to increase th e attractiveness of early

adoption of advanced and emerging technologies (Hy brids; EVs; Route Automation, etc.). **Adopt Complimentary Policies** The Leadership Group continues to believe that other governmental policies must promote research, development an d deploy ment of efficient technologies in the heavy duty vehicle space. Financial and other incentives

– including investment tax credits; accelerated depreciation of new capital investment; increased highway infrastructure spending and increased size (e .g. increasing federal standard for twin trailers from 28 to 33 ft.) and weight of vehicles

– can accelerate the deplo ym ent of new, more fuel efficient trucks and assist in rapid fleet turnover.

 Con

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Inc.  Cummins Inc.  Eaton Corporation  FedEx Corporati on  PepsiCo  Wabash National Corporation  Waste Management, Inc.