UNITED S TAT ES OF AMERICA ENVIR ONMENTAL PROTECTION AGENCY DEPARTMENT OF TRANSPORTATION Green h ouse Gas E mi ss ion s a nd Fue l Efficiency S tandard s for Medium- a nd H eavy- Du ty E ngine s a nd Ve hicl e s - Phase 2 ) ) ) ) Do cket N o.: E P A- HQ -OAR -2014-082 7 NHTSA-20 1 4-0132 Public Hearin gs: Au g u s t 6 a nd 18 , 2015 ORAL S T ATEMEN T OF THE T RU C K AND ENGINE MANUFACTURERS ASSOC I ATION Tam J e d Ma nd e l , Pr es id e nt of th e Tru c k and Engine Manufa c ture r s Assoc i a ti o n ( EM A)

. E MA ' s me mb e rs ma nuf ac n.re th e me dium- a nd heavy -dut y e ng in es a nd ve hicl es th a t are th e s ubj ec t o ft oday's rul e . As yo u kn o w. EMA 's m e mb e r s we r e in s trum e nt a l in wo rk in g w ith E P A.

' HT SA , o ur c us t o me r s , a nd o th e r s ta k e ho l de rs o n EP A's and HT SA's hi s t o ri c Phase I Rul e . That rule was a s uccess , fo r a m o ng o th e r r ea s o n s , beca use th e fin a l rul e was s tru c tured a r o und ce rtain key prin c ipl es : ( i) a d o ptin g a s in g l e , na ti o n w id e GHG /FE prog r a m ; ( ii ) in c r e asin g th e utili z ation o f ex is tin g t ec hn o l o gie s t o ac hi e ve s ub s t a ntial tim e ga in s; ( iii ) r ecog nizin g th e co mmercial n ee d s o f th e marketplac e and th e co mp l e x it y o f product o f fe rin gs; and , (iv) av o i din g unint e nd ed c o n se qu e nces . EM A and its me mb e rs have adv oca t e d th a t s imilar pr in c ipl es g uid e th e d eve l o pment a nd impl e me ntati o n of Ph a s e 2. Giv e n E P A's a nd N H TSA ·s s ta ted in te nt is t o a d o pt a s i g ni fica ntl y mo r e s trin ge nt prog r a m. o ne th a t f o r

ces th e deve l op m e nt of t ec hn o l ogy , th e a ppr o priat e an d necess ary prin c ipl es a re so mew ha t mo difi e d. H oweve r , it r e ma in s abso lute l y c riti ca l th a t we m

a intain a s in g le , n ati o nw id e program. Th a t no t o nl y me an s th a t th e E P A a nd NHTS A rule s mu s t align , but th a t Ca lif o rni a must full y harm o ni ze with them a s we ll. T n that rega rd , w e are aware that Ca li f o rni a ha s advocated that EPA co n s i d e r adoptin g a more a gg r ess iv e tim e lin e f o r th e Pha se 2 s tandard s, alon g wit h l o w e r NOx limit s co nte mpora neo u s with th e pro pos ed Pha se 2 s ta nd a rd s . M o re imp o rt a nt , C alif o rnia has indic ate d th a t th ey will co n s id e r a do ptin g mo r e strin ge nt GHG / FE a nd NOx limit s o n th e ir o wn i f E P A does n o t a c t. W e h ave a n a lm os t thirt y- yea r hi s t o r

y o f ali g nm e nt b et wee n CA RB a nd E P A heavy -du ty e mi ss i o n s ta nd a rd s . Th a t a li g nm e nt i s a fu ndam e nt a l co rn e r s t o ne t o the cos teffect i ve ness a nd impl e m e nta bili ty o f th e wo rld" s m ost s trin ge nt c rite ri a e mi ss i o n co ntro l prog r a m.

Full r eg u l ato r y a li g nm e nt wa s s imi l a rl y c r iti c al t o th e s uccess of Pha s e I. 50

- s tate harmonization li kew ise wi ll be abso lu t e ly c ritica l to the feas ib i li ty of Ph a se 2

. G iven the we ll

kn o wn , we ll-d oc um e nted ph ys ic s a sso c i a t

ed with the trade-off betw ee n NO x e mi s sions and GHG/FE limit s, it is no t e no ugh that Calif o rni a a l i g n it se l f w ith EP A's GHG l imit s -- in c ludin g o n th e s am e tim e lin e r eco mmended and e s tabli s he d b y EPA. CARB al so mu s t co ntinue t o full y a li g n w ith E P A o n NOx e mi ss io ns a s we ll. T o do ot he rwi se wo uld se ri o u s ly j eo p a rdi ze th e s uccess o f b o th th e G HG/FE rul e and E P A's c rite ri a e mi ss io n co nt ro l p r og r a m .We re ma in o pe n to h ea rin g fr o m bo th CA RB a nd EP A o n th e ir in te r es t in expl o rin g p oss ible futur e l o we r NOx reduction s, and how and when they could b e ac hi e ve d. But , in th e me antim e, a na ti o nwid e, full y harmoni ze d GH G/c rite ria e mission pr og ram mu s t be maintained. Tt al so i s esse nti a l that th e final rul e r ecog ni zes th e co mm e r c i

a l nee d s o f th e mark e tpl ace a n d the co mpl ex it y of pro du c t of f e rin gs. a nd avo id s uninte nd e d co nse qu e nces . T o th a t e nd , th e fin a l rul e mu s t ( i ) p r ov id e a d equ a t e l ea dtim e a nd s t a bili ty; ( ii ) ba l a nce s trin ge ncy, c ost a nd impl e me nt a ti o n d a t es; ( iii ) loo k t o impr ove m e nt op p o rtuniti es b eyo nd ju s t th ose that a r e in th e co ntro l o f tru ck a nd e ng in e manuf ac turer s; ( i v) acco unt f o r the imp ac ts o f trail e r desi g n o n tr ac to r ae r o d y n a mi cs; and (v ) ass ure uni fo rm , acc urate, c os t-eff ec ti ve and r e liable s imulati o n mo de ling and meas ur e m e nt me thod s . The pro p ose d rule , and acc o mpan y in g dra ft Re g ulat o ry Impa c t Anal ys is, are incredibl y co mple x . The y e nvi s i o n a s trong , agg r ess iv e pr og r a m of Phas e 2 GHG re du c ti o n s and F E impr ovem e nts. T he pro posa l al so d e mo ns tra t es that th e ag e nc i es ha ve c o ns id e r e d multipl e op ti o n s, a r e o p e n to po t e ntial c ha nges be f ore th e rul e is fini s hed , and a r e co mmit1 e d to w o rk with all s takeh o ld e r s to fin a li ze a rul e th at s ub s ta nti a ll y re du ces GHG e mi ss io n s a nd improv e s fuel e ffi c i e ncy in a way th a t ( i ) i s cos t- effec ti ve a nd impl e me nta bl e; ( ii ) wi ll be acc epted b y c us to me r s; a nd ( iii ) w ill prov id e r e al- wo rld im prove me nt s. Whil e th ose go al s ar e envi s ion e d in th e pr o posa l, th e y are n o t ye t fully inte g rated into th e proposed regulati o ns . In all candor, we still arc s tud y in g the details o ft o da y's massive prop os al. W e are f ocu se d o n ma kin g s ure that th e fin a l rul e "ge ts it right. " To a c hi e ve that g oal , we ar e co mmitted to co ntinuin g to wo rk with EP A a nd NHT S A to a ss ure th a t a stron g, e f f ective a nd impl e mentabl e rul e is fin a li ze d

- o ne th a t m ee ts th e prin c iple s th a t we l o ng have a rti c ulat ed a nd th a t we b e li eve EP A a nd N HT SA s upp o rt. T o da y i s n o t th e t im e and pl ace f o r us to de lin ea t e w ith s pec ifit y a ll of o ur are as of co n c ern. But , I will ta k e a m o me nt to bri e fl y id e ntif y a f ew k ey co nce rn s. We not e that to day 's rule include s a numb e r o f pro pos al s that w o uld c hang e the Pha se I rule. Manufacturer s alre ad y have full y c o mmitt ed to th e ir product devel o pm e nt plan s for Pha se I co mplianc e . EP A a nd NHTSA mu s t no t e ith e r c r e ate un ce rta inty , o r e liminat e e s se nti a l r eg ulatory s ta bility , b y a tte mptin g to m a k e re tr oac ti ve c ha nge s to th e Ph ase I rul e . As yo u kn ow, und e r th e De pa rtm e nt o f E ne r gy's · 'S uperTru c k" initi a ti ve, EM A me m be rs h ave deve lo p ed pr o to t y p e e ng in e, tra c to r a nd tra il er co mb inati o ns th a t ac hi eve inn o v a tive , g am e c han g ing improve m e nt s in fr e i g ht effi c ie ncy . Ye t, base d o n our pr e limin a r y assess me nts, e ven th os e SuperTru c k s, w hi c h in c lude t ec hn o log i es a nd des i g n element s th a t excee d wh a t w o uld b e co mmercially vi a bl e in 2 0 2 7 , wouldn ' t b e ca pabl e o f achieving th e b es t perf o rming ve hi c le requirements c o nt e mplated by the prop os ed rul e . W e don ' t believ e that EPA 's and NHTSA 's intent is to adopt rul es that would require th e d evelopment of n e w t ec hn o l og i es, beyond th e S up e r Truck proto typ es ju s t no w bein g d e ve l o ped , a s th e r e f

e rence f o r co mpli a nc e with Ph ase 2

. Acco rdin g l y, w e b e li e ve th a t it is nec e ssa r y to r e fin e th e ref e r

e nce a ss umpti o ns, and co rrec t ma ny o f th e und e rl y in g ass umpti o ns a bo ut t ec hn o l ogy pe netra ti o n r a t

es f o r c ertain ma rk e t seg m e nts, in o rd e r to fin a li ze a t ec hn o l og i ca ll y feas ib l e a nd impl e m e n ta bl e rul e.

2EPA and NHTSA a lso are proposing significant l y m ore robu s t and comp lex s imul ation model s . W i th those n ew mod e l s comes s ignificant test variabi l ity assoc iated w ith measurement accuracy, va ry in g ambient con diti ons, test t r uck d if fe re nce s, tractor var iab il ity, a nd multiple tra il er gap and trai ler configurat ions . We believe the agencies ca n , and mu s t , minimize the man y compo n ents that co ntribu te to that va ri abi lity . Where they cannot fu l ly d o so, it is incumbent on the agenc ies to pr ov id e so me degree of testing margin to accou nt for that va ri abil i ty. Otherwise, to assure techn ical comp li ance, m a nu factu re rs will be forced to d ow n grade th e actual , r ea l- world GHG!FE perfo rm a n ce o f th e ir tractors. However, th e net res ult of b e in g forced to do so w ill b e their inability to ach ieve the cert i ficat ion level s contemp lated b y the p roposed rul e. Consequently, t h e agencies' al lowance of s uffi c ie nt test and aud i t margin s are k ey to the implementation of feas ibl e tec hn o logy-forcing Phase 2 standa rd s . We know that EPA a nd N HT SA are a ttempting to find a balance between sepa rate e n g in e and comp l ete vehicle sta nd a rd s. Our m e mb e rs h ave st rong v iews o n that subject. You hav e h ea rd from th e m , and wil l con tinu e to hear from them. H oweve r, as an indu stry , we all agree that i t is c ri t ical that the age n cies "ge t ri ght" the inte rsect between those tw o v iews - - spec ifi ca ll y, the manner in w hi ch the eng in e is accou n ted for in th e Gree nh ouse Gas Emissions Model (GEM). As i t stands n ow, t h e agencies have not yet got it ri ght. Among o th e r thin gs, in attempt in g to connect the engine and veh ic l e s ta ndard s , EPA a nd NHTSA have yet to account for the kn ow n var i ab ili ty assoc iated with mea s urin g the fu el consumpt i o n of a n engine t o s imul ate that e n g in e in GEM. A compl iance margin i s absolute l y necessary, especially in th e co ntext of an age n cy aud it, to account for inh e re nt var i ab ili ty in characte ri z in g engine fuel consumption. Without a compliance margin , the pr o p ose d rul e wi ll not be f eas ibl e. As wit h Ph ase I , EMA and it s members are committed to working wit h E PA and NHTSA to resolve the man y important open i ss u es, in c ludin g tho se I hav e touch ed on today. We w ill b e provi din g o ur best tech ni ca l assessme nt of the proposed rule , and our recommendati o n s for necessary improve ment s , al l s upp o rte d by data. Our custome rs have lon g demanded fuel efficiency

. We have worked to continuously improve it

- - eve n whi l e makin g in cred ibl e imp rovements in the reduction of crite r ia pollutants. We in te nd to co n t inu e to provide im p roved h1el effic iency, an d the corresponding improvements in GHG e mi ss ions. To that end, i t is essential that t h e final rule provide an approp r iate, fa ir , cost-effective, and implementabl e reg ulat ory framework fo r th ose future improvements; one t h at does not disrupt the market or ca u se se r ious unint e nd e d consequences. We are ready to ass ist in that effo rt. I f you h ave any qu est io n s, I am happy to answer them.

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