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EO12866_GHG+Fuel Eff Stds for Med-Heavy-Duty Engines+Vehicles 2060-AP61 FRM 

RIA_20110722_Ch 07 Vehicle Costs per Ton.docx

Chapter 7: Truck Costs and Costs per Ton of GHG

7.1 Costs Associated with the Program

In this section, the agencies present our estimate of the costs associated with the program. 

The presentation here summarizes the costs associated with new technology expected to be 

added to meet the GHG and fuel consumption standards, including hardware costs to comply

with the air conditioning (A/C) leakage program. The analysis summarized here provides our 

estimate of incremental costs on a per truck basis and on an annual total basis. 

The presentation here summarizes the best estimate by EPA and NHTSA staff as to the 

technology mix expected to be employed for compliance. For details behind the cost estimates 

associated with individual technologies, the reader is directed to Section III of the preamble and 

to Chapter 2 of the RIA. 

With respect to the cost estimates presented here, the agencies note that, because these 

estimates relate to technologies which are in most cases already available, these cost estimates 

are more easily found than estimates for technologies that do not yet exist.

7.1.1 Technology Costs per Truck

For the HD pickup trucks and vans, the agencies have used a methodology consistent 

with that used for our recent light-duty joint rulemaking since most of the technologies expected 

for HD pickup trucks and vans are consistent with those expected for the larger light-duty trucks. 

The cost estimates presented in the recent light-duty joint rulemaking were then scaled upward to 

account for the larger weight, towing capacity, and work demands of the trucks in these heavier 

classes. For details on that scaling process and the resultant costs for individual technologies, the 

reader is directed to Section III of the preamble and to Chapter 2 of the RIA. Note also that all 

cost estimates have been updated to 2009 dollars for this analysis while the recent light-duty 

joint rulemaking was presented in 2007 dollars.1 

For the loose heavy-duty gasoline engines, we have used engine-related costs from the 

HD pickup truck and van estimates since the loose heavy-duty gasoline engines are essentially

the same engines as those sold into the HD pickup truck and van market. 

For heavy-duty diesel engines, the agencies have estimated costs using a different 

methodology than that employed in the recent light-duty joint rulemaking establishing fuel 

economy and GHG standards for MYs 2012-2016. In the recent light-duty joint rulemaking, the 

fixed costs were included in the hardware costs via an indirect cost multiplier. As such, the 

hardware costs presented in that analysis, and in the cost estimates for HD pickup trucks and 
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vans and HD gasoline engines, included both the actual hardware and the associated fixed costs. 

For this analysis, some of the fixed costs are estimated separately for HD diesel engines and are 

presented separately from the technology costs. These fixed costs are referred to as “Other 

Engineering Costs” as shown in Table 7-2 and described in the text surrounding that table. 

Importantly, once totaled both methodologies account for all the costs associated with the 

program. As noted above, all costs are presented in 2009 dollars.

The estimates of vehicle compliance costs cover the years leading up to – 2012 and 2013 

– and including implementation of the program – 2014 through 2018. Also presented are costs 

for the years following implementation to shed light on the estimated long term (2022 and later) 

cost impacts of the program (note that engines and trucks will be required to continue meeting

the final standards in 2019 and later model years absent further rulemaking action by the 

agencies). The year 2022 was chosen here consistent with the recent light-duty joint 

rulemaking. That year was considered long term in that analysis because the short-term and 

long-term markup factors described below are applied in five year increments with the 2012 

through 2016 implementation span and the 2017 through 2021 span, both representing the shortterm. Since many of the costs used in this analysis are based on costs in the recent light-duty 

joint rulemaking analysis, consistency with that analysis seems appropriate. 

Individual technology cost estimates are presented in Chapter 2 of this RIA, and account 

for both the direct and indirect costs incurred. As described fully in Chapter 2 of this RIA, the

agencies have also considered the impacts of manufacturer learning on the technology cost 

estimates. 

The technology cost estimates discussed in Section III of the preamble and detailed in 

Chapter 2 of the RIA are used to build up technology package cost estimates. For each engine 

and truck category, a single package for each was developed capable of complying with the 

standards, and the costs for each package was generated. The technology packages and package 

costs are discussed in more detail in Chapter 2 of the RIA. The compliance cost estimates take 

into account all credits and trading programs and include costs associated with air conditioning 

controls. 

Table 7-1 presents the average incremental costs per truck for this program. For HD 

pickups and vans, costs increase as the standards become more stringent in 2014 through 2018. 

Following 2018, costs then decrease going forward as learning effects result in decreased costs 

for individual technologies. By 2022, the long term ICMs take effect and costs decrease yet 

again. For vocational vehicles, cost trends are more difficult to discern as diesel engines begin 

adding technology in 2014, gasoline engines begin adding technology in 2016, and the trucks 

themselves begin adding technology in 2014. With learning effects, the costs, in general, 

decrease each year, except for heavy-duty gasoline engines since their standards go into effect in

2016 resulting in a cost increase for the vocational category in that year. Long term ICMs take 

effect in 2022 to provide more cost reductions. For combination tractors, costs generally 

decrease each year due to learning effects, with the exception of 2017 when the engines placed in 

sleeper cab tractors add turbo compounding. Following that, learning impacts result in cost 

reductions and the long term ICMs take effect in 2022 for further cost reductions. By 2030 and 

later, cost per truck estimates remain constant for all categories. Regarding the long term ICMs 

taking effect in 2022, the agencies consider this the point at which some indirect costs decrease 
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or are no longer considered attributable to the program (e.g., warranty costs go down). Costs per 

truck remain essentially constant thereafter.
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Table 7-1 Estimated Hardware Cost per Truck (2009 dollars)

YEAR HD PICKUPS 

& VANS

VOCATIONAL COMBINATION 

TRACTORS

2014 $165 $329 $6,019

2015 $215 $320 $5,871

2016 $422 $397 $5,677

2017 $631 $387 $6,413

2018 $1,048 $378 $6,215

2020 $985 $366 $6,004

2030 $977 $311 $5,075

2040 $977 $305 $5,075

2050 $977 $304 $5,075

As noted above, the fixed costs were estimated separately from the hardware costs for 

the HD diesel engines. Those fixed costs are not included in Table 7-1. The agencies have 

estimated the R&D costs at $6.8 million per manufacturer per year for five years and the new test 

cell costs (to accommodate measurement of N2O emissions) at $63,087 per manufacturer. The 

test cell costs of N2O emissions measurement has been adjusted for the final rulemaking to 

reflect comments which stated that approximately 75 percent of manufacturers would be required 

to update existing equipment while the other 25 percent would require new equipment. These 

costs apply individually for LHD, MHD and HHD diesel engines. Given the 14 manufacturers 

impacted by the standards, 11 of which are estimated to sell both MHD and HHD diesel engines

and 3 of which are estimated to sell LHD diesel engines, we have estimated a five year annual 

R&D cost of $170.3 million dollars (2 x 11 x $6.8 million plus 3 x $7.75 million for each year 

2012-2016) and a one-time test cell cost of $1.6 million dollars (2 x 11 x $63,087 plus 3 x 

$63,087 in 2013). Estimating annual sales of HD diesel engines at roughly 600,000 units results 

in roughly $284 per engine per year for five years beginning in 2012 and ending in 2016. Again, 

these costs are not reflected in Table 7-1, but are included in Table 7-2 as “Other Engineering 

Costs”.

The certification and compliance program costs, for all engine and truck types, are 

estimated at $6.5 million in the first year and $2.3 million per year thereafter. These costs are 

detailed in the “Draft Supporting Statement for Information Collection Request” which is 

contained in the docket for this rule.2 The costs are higher in the first year due to capital 

expenses required to comply with new reporting burdens (facility upgrade costs are included in 

engineering costs as described above). Estimating annual sales of heavy-duty trucks at roughly

1.5 million units would result in just over $4 per engine/truck in the first year and less than $2

per engine/truck per year thereafter. These costs are not reflected in Table 7-1, but are included 

in Table 7-2 as “Compliance Program” costs.
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7.1.2 Annual Costs of the Program

The costs presented here represent the incremental costs for newly added technology to 

comply with the program. Together with the projected increases in truck sales, the increases in 

per-truck average costs shown above result in the total annual costs presented in Table 7-2

below. The compliance program costs include items such as the burden for demonstrating 

compliance. For example, the combination tractor compliance costs include the measurement of 

aerodynamic performance, tire rolling resistance, and engine performance. Note that the costs 

presented in Table 7-2 do not include the savings that would occur as a result of the 

improvements to fuel consumption. Those impacts are presented in Chapter 7.2 below.

Table 7-2 Annual Costs Associated with the Program ($Millions of 2009 dollars)

YEAR HD PICKUPS & 

VANS

VOCATIONAL COMBINATION 

TRACTORS

OTHER 

ENGINEERING 

COSTSA

COMPLIANCE 

PROGRAM 

COSTS

ANNUAL 

COSTS

2012 $0 $0 $0 $170 $0.0 $170

2013 $0 $0 $0 $172 $0.0 $172

2014 $130 $185 $1,078 $170 $6.5 $1,569

2015 $157 $170 $922 $170 $2.3 $1,422

2016 $300 $202 $820 $170 $2.3 $1,495

2017 $447 $198 $951 $0 $2.3 $1,598

2018 $751 $201 $1,000 $0 $2.3 $1,955

2020 $754 $202 $1,001 $0 $2.3 $1,959

2030 $918 $216 $1,076 $0 $2.3 $2,212

2040 $1,024 $281 $1,372 $0 $2.3 $2,679

2050 $1,156 $354 $1,777 $0 $2.3 $3,290

NPV, 

3%

$17,070 $4,950 $24,487 $793 $52 $47,352

NPV, 

7%

$8,467 $2,588 $12,855 $724 $30 $24,665

A

“Other Engineering Costs” are described in Section 7.1.1. These costs represent fixed costs for heavy-duty diesel 

engines.

7.2 Cost per Ton of GHG Emissions Reduced

The agencies have calculated the cost per ton of GHG (CO2-equivalent, or CO2e) 

reductions associated with this rule using the above costs and the GHG emissions reductions 

described in Chapter 5. These values are presented in Table 7-3 through Table 7-6 for HD 

pickup trucks & vans, Vocational vehicles, Combination tractors and the Program (i.e., all 

engines and trucks), respectively. The cost per metric ton of GHG emissions reductions has been 

calculated in the years 2020, 2030, 2040, and 2050 using the annual vehicle compliance costs 

and emission reductions for each of those years. The value in 2050 represents the long-term cost 

per ton of the emissions reduced. The agencies have also calculated the cost per metric ton of 

GHG emission reductions including the savings associated with reduced fuel consumption 
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(presented below in Tables 7-3 through 7-6). This latter calculation does not include the other 

benefits associated with this program such as those associated with criteria pollutant reductions 

or energy security benefits (discussed in Chapter 9). By including the fuel savings in the cost 

estimates, the cost per ton is less than $0 since the estimated value of fuel savings outweighs the 

program costs. 

Table 7-3 Annual Cost per Metric Ton of CO2eq Reduced – HD Pickup Trucks & Vans (2009 dollars)

YEAR PROGRAM 

COST

FUEL 

SAVINGS 

(POST-TAX)

CO2EQ

REDUCED

COST PER 

TON 

(WITHOUT 

FUEL 

SAVINGS)

COST PER 

TON (WITH 

FUEL 

SAVINGS)

2020 $800 $1,000 3 $240 -$60

2030 $900 $3,300 10 $90 -$230

2040 $1,000 $4,700 14 $70 -$270

2050 $1,200 $5,900 16 $80 -$300

Table 7-4 Annual Cost per Metric Ton of CO2eq Reduced – Vocational Vehicles (2009 dollars)

YEAR PROGRAM 

COST

FUEL 

SAVINGS 

(POST-TAX)

CO2EQ

REDUCED

COST PER 

TON 

(WITHOUT 

FUEL 

SAVINGS)

COST PER 

TON (WITH 

FUEL 

SAVINGS)

2020 $200 $1,200 4 $50 -$240

2030 $200 $2,600 9 $20 -$270

2040 $300 $3,800 12 $30 -$300

2050 $400 $5,000 14 $30 -$330

Table 7-5 Annual Cost per Metric Ton of CO2eq Reduced – Combination Tractors (2009 dollars)

YEAR PROGRAM 

COST

FUEL 

SAVINGS 

(POST-TAX)

CO2EQ

REDUCED

COST PER 

TON 

(WITHOUT 

FUEL 

SAVINGS)

COST PER 

TON (WITH 

FUEL 

SAVINGS)

2020 $1,000 $8,700 32 $30 -$240

2030 $1,100 $17,000 57 $20 -$280

2040 $1,400 $22,100 68 $20 -$300

2050 $1,800 $28,500 78 $20 -$340

Table 7-6 Annual Cost per Metric Ton of CO2eq Reduced – Final Program (2009 dollars)

YEAR PROGRAM 

COST

FUEL 

SAVINGS 

(POST-TAX)

CO2EQ

REDUCED

COST PER 

TON 

(WITHOUT 

FUEL 

SAVINGS)

COST PER 

TON (WITH 

FUEL 

SAVINGS)

2020 $2,000 $10,900 39 $50 -$230

2030 $2,200 $23,000 76 $30 -$270

2040 $2,700 $30,600 94 $30 -$300
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2050 $3,300 $39,500 108 $30 -$340

7.3 Impacts of Reduction in Fuel Consumption

7.3.1 Gallons Reduced under the Rulemaking

The new fuel consumption and CO2 standards will result in significant improvements in 

the fuel efficiency of affected trucks. Drivers of those trucks will see corresponding savings 

associated with reduced fuel expenditures. The agencies have estimated the impacts on fuel 

consumption for the fuel consumption and tailpipe CO2 standards. To do this, fuel consumption 

is calculated using both current emission levels and the new CO2 and fuel consumption 

standards. The difference between these estimates represents the net savings from the standards. 

Note that the total number of miles that vehicles are driven each year is different under each of 

the control case scenarios than in the reference case, due to the “rebound effect” which is 

discussed in Chapter 9. The agencies also note that drivers who drive more than our average 

estimates for vehicle miles traveled (VMT) will experience more fuel savings; drivers who drive 

less than our average VMT estimates will experience less fuel savings. 

The expected impacts on fuel consumption are shown in Table 7-7. The gallons shown in 

this table reflect impacts from the new CO2 and fuel consumption standards and include 

increased consumption resulting from the rebound effect.

Table 7-7 Fuel Consumption Reductions of the Program (Million gallons)

GASOLINE DIESEL

YEAR HD 

PICKUPS 

& VANS

VOC COMB TOTAL

HD 

PICKUPS 

& VANS

VOC COMB TOTAL

2012 0 0 0 0 0 0 0 0

2013 0 0 0 0 0 0 0 0

2014 1 0 0 1 4 38 431 473

2015 3 0 0 3 9 70 767 846

2016 11 4 0 14 24 97 1,050 1,171

2017 23 7 0 31 48 160 1,435 1,643

2018 47 11 0 58 92 219 1,813 2,123

2020 98 17 0 114 183 324 2,479 2,986

2030 309 39 0 348 567 654 4,450 5,670

2040 412 41 0 453 752 900 5,394 7,046

2050 476 45 0 522 867 1,062 6,229 8,158

7.3.2 Monetized Fuel Savings

Using the fuel consumption estimates presented above, the agencies can calculate the 

monetized fuel savings associated with the adopted standards. To do this, reduced fuel 

consumption is multiplied in each year by the corresponding estimated average fuel price in that 

year, using the reference case taken from the AEO 2011 through 2035. Fuel prices beyond 2035 

were extrapolated from an average growth rate for the years 2017 to 2035. These estimates do 
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not account for the significant uncertainty in future fuel prices; the monetized fuel savings will 

be understated if actual fuel prices are higher (or overstated if fuel prices are lower) than 

estimated. The Annual Energy Outlook (AEO) is a standard reference used by NHTSA and EPA 

and many other government agencies to estimate the projected price of fuel. This has been done 

using both the pre-tax and post-tax fuel prices. Since the post-tax fuel prices are the prices paid 

at fuel pumps, the fuel savings calculated using these prices represent the savings consumers 

would see. The pre-tax fuel savings are those savings that society would see. These results are 

shown in Table 7-8. Note that in Chapter 9, the overall benefits and costs of the rule are 

presented and, for that reason, only the pre-tax fuel savings are presented there. 

Table 7-8 Estimated Monetized Fuel Savings ($Millions of 2009 dollars)

YEAR FUEL SAVINGS (PRE-TAX) FUEL SAVINGS (POST-TAX)

2014 $1,200 $1,400

2015 $2,200 $2,600

2016 $3,300 $3,800

2017 $4,800 $5,500

2018 $6,400 $7,400

2020 $9,600 $10,900

2030 $20,600 $23,000

2040 $28,000 $30,600

2050 $36,500 $39,500

NPV, 3% $375,300 $415,300

NPV, 7% $166,500 $185,400

7.4 Key Parameters Used in the Estimation of Costs and Fuel Savings

This section briefly presents some of the parameters used in generating costs and fuel 

savings associated with the program. Table 7-9 presents estimated sales of complying vehicles 

by calendar year. Table 7-10 presents VMT by age for both the reference and control cases,

where the control case includes rebound VMT. Table 7-11 presents AEO 2011 reference case 

fuel prices.
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Table 7-9 Estimated Calendar Year Sales by Truck Type

Calendar Year HD Pickup Trucks 

& Vans

Vocational 

Vehicles

Combination 

Tractors Total

2014 784,780 563,004 179,087 1,526,871 

2015 729,845 529,533 157,103 1,416,481 

2016 712,328 508,856 144,533 1,365,717 

2017 708,054 511,068 148,286 1,367,408 

2018 716,549 531,001 160,979 1,408,529 

2019 735,105 546,611 168,313 1,450,029 

2020 765,721 550,823 166,815 1,483,359 

2021 787,933 565,299 171,117 1,524,349 

2022 807,342 587,882 179,991 1,575,215 

2023 822,170 605,769 186,985 1,614,924 

2024 837,009 619,178 191,065 1,647,252 

2025 853,222 630,394 193,564 1,677,180 

2026 870,125 640,928 195,940 1,706,993 

2027 884,235 651,936 198,634 1,734,805 

2028 904,933 666,042 202,578 1,773,553 

2029 926,609 679,826 207,013 1,813,448 

2030 939,367 695,698 212,045 1,847,110 

2031 950,482 759,850 217,485 1,927,817 

2032 957,803 773,686 221,968 1,953,457 

2033 964,913 787,125 226,261 1,978,299 

2034 974,328 803,140 231,412 2,008,880 

2035 986,240 821,951 237,484 2,045,675 

2036 998,294 841,206 243,715 2,083,215 

2037 1,010,497 860,916 250,108 2,121,521 

2038 1,022,844 881,090 256,670 2,160,604 

2039 1,035,349 901,744 263,403 2,200,496 

2040 1,048,003 922,885 270,315 2,241,203 

2041 1,060,814 944,528 277,406 2,282,748 

2042 1,073,778 966,679 284,684 2,325,141 

2043 1,086,901 989,359 292,152 2,368,412 

2044 1,100,188 1,012,574 299,817 2,412,579 

2045 1,113,637 1,036,341 307,684 2,457,662 

2046 1,127,249 1,060,668 315,756 2,503,673 

2047 1,141,023 1,085,571 324,039 2,550,633 

2048 1,154,970 1,111,068 332,540 2,598,578 

2049 1,169,090 1,137,164 341,265 2,647,519 

2050 1,183,377 1,163,879 350,218 2,697,474 
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Table 7-10 Annual Vehicle Miles Traveled by Age for the Reference and Control Cases

Vehicle 

Age

Reference Control

HD 

Pickups 

and Vans

Vocational 

Vehicles

Combination 

Tractors

HD Pickups 

and Vans

Vocational 

Vehicles

Combination 

Tractors

0 11,682 21,245 133,005 11,819 21,528 133,670

1 11,695 19,366 119,291 11,833 19,623 119,887

2 11,645 17,764 107,612 11,783 18,001 108,151

3 11,511 16,269 96,713 11,646 16,486 97,197

4 11,301 14,852 86,619 11,434 15,050 87,052

5 11,046 13,527 77,482 11,176 13,707 77,869

6 10,748 12,322 69,265 10,874 12,486 69,611

7 10,422 11,272 62,051 10,545 11,422 62,362

8 10,058 10,342 55,709 10,177 10,479 55,988

9 9,669 9,478 49,920 9,783 9,604 50,170

10 9,267 8,729 44,653 9,376 8,845 44,876

11 8,851 8,031 40,063 8,955 8,138 40,263

12 8,459 7,415 35,971 8,559 7,514 36,151

13 8,071 6,871 32,261 8,166 6,963 32,423

14 7,684 6,345 28,794 7,774 6,429 28,937

15 7,312 5,864 25,776 7,398 5,942 25,905

16 6,966 5,425 23,066 7,048 5,497 23,181

17 6,639 5,030 20,716 6,718 5,097 20,820

18 6,336 4,700 18,521 6,411 4,763 18,613

19 6,059 4,375 16,581 6,130 4,433 16,663

20 5,809 4,060 14,812 5,878 4,114 14,886

21 5,589 3,811 13,292 5,655 3,862 13,358

22 5,402 3,566 11,868 5,466 3,614 11,928

23 5,254 3,354 10,590 5,316 3,399 10,643

24 5,146 3,153 9,456 5,207 3,195 9,503

25 5,082 2,962 8,439 5,142 3,001 8,481

26 5,066 2,797 7,533 5,126 2,834 7,571

27 5,064 2,667 6,739 5,124 2,702 6,772

28 5,062 2,513 6,027 5,122 2,546 6,057

29 5,060 2,392 5,376 5,120 2,424 5,403

30 5,058 2,300 4,804 5,118 2,331 4,828
*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

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Table 7-11 AEO 2011 Reference Case Fuel Prices (2009 dollars/gallon)

Pre-Tax Post-Tax

Vehicle Age Gasoline Diesel Gasoline Diesel

2014 $2.64 $2.57 $3.05 $3.02

2015 $2.73 $2.64 $3.13 $3.08

2016 $2.78 $2.75 $3.18 $3.19

2017 $2.85 $2.86 $3.25 $3.29

2018 $2.91 $2.95 $3.30 $3.38

2019 $2.95 $3.05 $3.34 $3.47

2020 $2.99 $3.10 $3.38 $3.52

2021 $3.01 $3.12 $3.39 $3.54

2022 $3.07 $3.20 $3.45 $3.61

2023 $3.09 $3.22 $3.47 $3.63

2024 $3.14 $3.30 $3.52 $3.71

2025 $3.17 $3.33 $3.54 $3.73

2026 $3.19 $3.35 $3.56 $3.75

2027 $3.25 $3.40 $3.62 $3.80

2028 $3.26 $3.43 $3.63 $3.82

2029 $3.31 $3.48 $3.68 $3.87

2030 $3.28 $3.44 $3.64 $3.83

2031 $3.28 $3.46 $3.64 $3.84

2032 $3.29 $3.47 $3.65 $3.85

2033 $3.30 $3.47 $3.66 $3.85

2034 $3.34 $3.50 $3.69 $3.87

2035 $3.36 $3.52 $3.71 $3.89

2036 $3.38 $3.56 $3.73 $3.93

2037 $3.41 $3.61 $3.76 $3.97

2038 $3.44 $3.65 $3.79 $4.01

2039 $3.47 $3.70 $3.82 $4.06

2040 $3.51 $3.74 $3.85 $4.10

2041 $3.54 $3.79 $3.88 $4.15

2042 $3.57 $3.84 $3.91 $4.19

2043 $3.60 $3.88 $3.94 $4.24

2044 $3.63 $3.93 $3.97 $4.28

2045 $3.67 $3.98 $4.00 $4.33

2046 $3.70 $4.03 $4.03 $4.38

2047 $3.74 $4.08 $4.07 $4.42

2048 $3.77 $4.13 $4.10 $4.47

2049 $3.80 $4.18 $4.13 $4.52

2050 $3.84 $4.23 $4.16 $4.57
*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

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References

1 Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final 

Rule 75 Fed. Reg. 25323 (May 7, 2010).

2

“Draft Supporting Statement for Information Collection Request,” Control of Greenhouse Gas Emissions from 

New Motor Vehicles: Proposed Heavy-Duty Engine and Vehicle Standards, EPA ICR Tracking Number 2394.01.