With Congress returning for the second half of its 199th legislative session, the trucking industry's focus is shifting from new legislation to anticipated regulatory rollbacks by the EPA and the inevitable lawsuits that will follow.
In this episode
00:00 10-44 intro
00:44 Rolling back the Endangerment Finding and greenhouse gas standards
01:26 Delaying implementation of heavy-duty NOx rule
02:37 Reduced emissions solutions; natural gas and renewable diesel
03:27 Increased cost and the NOx rule
Speaker 1:
Congress is back in session. Could this round be as exciting as the last? Hey, everybody, welcome back. I'm Jason Cannon and my co-host, as always is Matt Colt. Congress is currently in its second session of the hundred 19th Congress with the House of Representatives having reported to work on Monday. The first half of this legislative session has been an exciting one for trucking, highlighted by the repeal of various controversial emissions regulations. By comparison, the rest of this session might be a snoozer unless you like lawsuits.
Speaker 2:
Fireworks are likely to come from EPAs potential rollback of the endangerment finding and greenhouse gas standards, which drew some spirited comments during our recent listening session.
Speaker 3:
Obviously just by the numbers, the largest percentage of commenters at the listening session were against rolling back GHE phase three and endangerment finding. But I think we all know the writings on the wall, right? I think we all anticipate that the EPA is going to rescind greenhouse gas phase three, and I would say in all likelihood is going to rescind the endangered refining. And if that happens, of course, EPA can't regulate greenhouse gases at all. So I think Congress is going to just let that happen and the EPA will go that route. They'll get sued, right? We all know that, and then it'll work its way through the course whether or not the endangerment rescission is lawful or not. So I don't expect Congress to tackle anything on that end.
Speaker 1:
Most major trucking groups have already asked the EPA to delay implementation of its heavy duty NOx rules from 2027 to 2031. There's several layers to that rule, some that cut emissions limits and some that require OEMs to extend warranties and useful life limits. Those measures have put fleets and OEMs at odds.
Speaker 3:
By the way, on Knox, as you probably know, there are a couple items in there that some of the fleets and the associations not only they want the extended warranty and the useful life rescinded taken out because those are cost mechanisms, but they also ask for the criteria level to be changed to go from point 200 to 0.035. The CFC hasn't taken a position on the criteria level. CFC thinks that's really not our fight. That's the OEMs fight. It's my understanding that the OEMs are not asking for the criteria level to be changed as far as I know their physician is, if it goes to 0.305 as plan will accommodate. So that will be interesting to see how NOx plays out because you have a difference opinion between the fleets and the OEMs. If I were betten, I would bet that the EPA is going to change the levels as well, but I'm not sure. And then they will most certainly be sued if they change the levels. Without a doubt,
Speaker 2:
If there's good news in all the pushing and shoving over zero emissions regulations, it's that tax credits for reduced emissions solutions like natural gas and renewable diesel have been extended. So trucking does have clean and cheaper alternatives to battery electric.
Speaker 3:
Congress passed the tax credits for those other renewable sources, right? RNG and diesel. So that's another incentive. Absolutely, in my opinion, and I think you're seeing in the fleets, I think they're already starting to pivot towards those other lower emission powertrains. Yeah, it's a huge opportunity for those markets and to penetrate a greater market percentage of RNG and renewable diesel, I think it's a huge opportunity. The 15 liters obviously very important in a lot of the applications. So I think having that back in the marketplace and right here, very well performing 15 liters. So I think it's a little bit of both.
Speaker 1:
All the potential litigation over emissions and equipment inserts, more uncertainty around regulations that are seemingly constantly under fire, leaving an entire industry wondering what it should or what it can do next.
Speaker 3:
So they're a tough spot, at least they're a tough spot. And obviously, what are we in the 13th quarter in a row of the freight recession? So any sort of cost increase under the NOx rule, which would include the extended warranty, the useful life provisions of the Knoxville, that's going to add around, depending on which OM you talk to, 15 to $25,000 a cost. Well, if you're a fleet in today's environment, you're going to defer what that acquisition costs. So you're not going to do a pre-buy, do those things. The finances don't work. So it does create pressure, and that's why it's really critical that some of these issues get resolved sooner or rather than later, whether it's NOx, whether it's GHG phase three, I mean that the CRAs and the rescission of the A CT waiver. I don't see any way in the world that car wins that lawsuit.
I just don't see it. I mean, right in the CRA statute that says these are non judicially reviewable, right? So even put aside whether they're right, wrong, or indifferent, statute says are nonjudicial. So I'll see how carbon ends on A-C-T-G-H-G phase three. I think that the EPA would've a strong basis if they just repealed GHG phase three, the endangerment finding probably a little more subject to litigation, and if they revise the Knox role properly, I think the not only would stamp the litigation, maybe they would file litigation. So we'll see. But it does create uncertainty for the fleets. But I would say if there's any uptick in the market, in the freight market, I think you'll see more normal buying patterns than you saw over the last two years. Tariffs are problematic that needs to be resolved, but I do think if you see a meaningful or even a slight change in the freight rates, that you'll start to see more normal buying patterns.
Speaker 1:
That's it for this week's 10 44. You can read more on ccj digital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.
