This story is part of a series concerning California’s impending regulations on zero-emissions vehicles, which have the potential to upend the American trucking industry. You can follow along with the stories here.

WASHINGTON — Political and economic realities are already setting roadblocks in front of the Biden administration’s Phase 3 truck rule that could make it difficult to hit the regulation’s lofty targets.

Citing California’s Advanced Clean Trucks (ACT) rule as support, the U.S. Environmental Protection Agency is imposing strict new standards on the trucking industry, with varying estimates on costs for both truck manufacturers and truck buyers (see charts below).

Specifically, EPA is proposing stronger carbon dioxide standards for model year 2027 trucks that go beyond the current standards that apply under EPA’s Phase 2 rule. It is also proposing an additional set of CO2 standards that would begin to apply in model year 2028, with progressively lower standards each model year through 2032.

By 2045, new trucks available for sale must be zero-emission vehicles — a goal that can be reached only by electric vehicles (EVs) powered by battery or hydrogen fuel cell.

First-mover cost

The trucking industry — both big carriers and owner-operators — wasted no time in opposing the rule shortly after it was published on April 27.

Cost has been emphasized as a big impediment. A new all-electric costs over $400,000 today, versus a new diesel truck in the $150,000 range.

In addition, charging times are too long, which eats into federal hours of service rules. The batteries weigh a lot — which puts early adopters at a disadvantage with other carriers in the amount of cargo they can haul and still be in compliance with highway weight limits.

“We operate in a market economy, so if we were to buy 200 new electric trucks it would not only cost us a lot of money, chances are we also would not be able to pass that on to our customers because most of the rest of the industry is still running older equipment,” Laurence Cox, vice president of sustainability for Aliquippa, Pennsylvania-based PGT Trucking, told FreightWaves.

“Somewhere down the road, yes, the rates we charge customers will creep up, but not initially.”

Owner-operators are even more wary of the regulation. “The Phase 3 rule is … a blatant attempt to force consumers into purchasing electric vehicles while a national charging infrastructure network remains absent for heavy-duty commercial trucks,” Lewie Pugh, Owner-Operator Independent Drivers Association executive vice president, told lawmakers at a supply chain hearing on Capitol Hill on May 10.

“Professional drivers are skeptical of EV costs, mileage range, battery weight and safety, charging time, and availability. It’s baffling that the EPA is pushing forward with more impractical emissions timelines without first addressing these overwhelming concerns.”

Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, underscored the lack of coordination in crafting the rule between EPA and agencies that oversee the electricity grid that will be needed to provide the power for the new trucks.

“I’m intrigued by a lot of technology, and I’m not opposed to the move toward electric vehicles,” Rajkovacz told FreightWaves. “But to make a mandate on a truck buyer that will potentially leave him stranded on the road because there’s not enough juice in the grid to power his vehicle doesn’t make sense.”

Challenging EPA’s authority

Conservative lawmakers and others that influence policy are also just as quickly mobilizing for a potential challenge to the EPA’s rule if it is approved.

Speaking out against the Phase 3 truck rule and its follow-on companion rule regulating light-duty vehicles, Rep. Pat Fallon, R-Texas and chair of the House Oversight Committee’s subcommittee on energy policy and regulatory affairs, stated during a May 17 hearing that “Republicans are not anti-EV. They are however deeply concerned by the Biden administration’s apparent attempt to hijack the auto industry, strangle consumer choice, and determine what products are best for the American people in setting timelines.”

At the same hearing, Rep. Chuck Edwards, R-N.C., pointed out that last year the U.S. Supreme Court “slapped EPA down” in West Virginia v. EPA for overstepping its authority in regulating power plants. “Isn’t EPA doing the exact same thing with these proposed EV rules?” he asked Steve Bradbury, testifying on behalf of the conservative Heritage Foundation.

“It really is remarkably similar,” Bradbury responded. “It’s a shift into a whole new technology, which is what they were trying to do with EPA’s Clean Power Plan.

“At issue are matters of life, liberty, and prosperity, and they are fundamentally political in nature. That is exactly why, under our constitutional republic, it is for Congress, and Congress alone, to make the monumental decisions that EPA is purporting to take upon itself in these proposed rules.”

Aligning the market

But the California Air Resources Board (CARB), which oversees the state’s ACT rule after which EPA’s Phase 3 rule was patterned, not only sees zero-emissions feasible for all heavy-duty trucks by 2045, it believes there’s room to be even more stringent.

“EPA should finalize this with bold targets for heavy duty zero-emission trucks extending to 2040,” according to CARB Executive Officer Steven Cliff, in commenting on EPA’s rule. “EPA should finalize a Phase 3 standard to push significantly more heavy-duty trucks than proposed. Heavy-duty zero-emission penetration in the final rule should be on par with the vehicle manufacturer targets that many major heavy-duty truck manufacturers have themselves been publicly stating.”

Speaking at the May 17 House Oversight Committee hearing, Rep. Melanie Stansbury, D-N.M., also pushed back on the notion that the trucking industry will not be able to meet EPA’s deadlines. “The industry is headed into the electrical market because that is the market of the future,” she said.

“This transition is crucial to our economy, crucial to our planet, and the significant legislation we passed in the last Congress is going to help make it possible for the transition to occur,” Stansbury said, referring to grants and tax incentives included in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

Despite the challenges that he sees in the regulation, PGT’s Cox said his company will not be afraid to test the waters with a hydrogen electric vehicle, possibly before the year is over.

“Our view is someone has to start, and we would rather be on the head end than the tail end,” Cox said. “But at the same time, we’re a trucking company, which is a 5-7% margin business, so it’s not like we can do things with cost impunity. At some point the economics are going to have to match.”

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