Consultation Document - Regulatory Framework Consultation Document describing key elements being considered for future regulations to limit greenhouse gas emissions from new on-road heavy-duty vehicles and engines of the 2014 and later model years

The Government of Canada is committed to reducing Canada’s total greenhouse gas (GHG) emissions by 17% from 2005 levels by 2020, a target which reflects the importance of aligning with the United States, while maintaining economic competitiveness and prosperity. Transportation is a significant source of GHG emissions in Canada, accounting for about 27% of total GHG emissions in 2008. Heavy-duty vehicles are also an important contributor to overall emissions, representing 23% of total GHG emissions from transportation in Canada.

Taking action to reduce GHG emissions from new vehicles is an important element of the Government’s plan to introduce an integrated, nationally consistent approach to reduce emissions of air pollutants and GHGs to protect the health and environment of Canadians. On May 21, the Honourable Minister Prentice announced that Canada is developing new Regulations under the Canadian Environmental Protection Act, 1999 (CEPA 1999) to reduce GHG emissions from new heavy-duty vehicles.

The following regulatory framework consultation document is intended to provide an overview of the main elements that can be considered in developing the proposed regulations. The Government of Canada intends to strive to align as closely as possible with the U.S. EPA final regulations to reduce GHG emissions from heavy-duty vehicles while considering the specific characteristic of the Canadian fleet and safety standards. The regulatory framework is primarily intended to seek early stakeholders’ views on potential elements in advance of developing the proposed regulations.

The proposed regulations would apply to any person who is engaged in the business of manufacturing new heavy-duty vehicles or engines in Canada, or imports these vehicles or engines into Canada for the purpose of sale. As is the case with the On-Road Vehicle and Engine Emissions Regulations, the proposed regulations would not apply to owners or operators of heavy-duty vehicles.

The proposed Regulations would seek to reduce emissions from the whole range of new on-road heavy-duty vehicles from full-size pick-up trucks to combination tractors, and including a wide variety of vocational vehicles such as: freight, delivery, service, cement, garbage and dump trucks, as well as buses. This would effectively include all on-road vehicles with a Gross Vehicle Weight Rating of more than 3,856 kg (8,500 pounds), except those vehicles that would be subject to the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (e.g. medium-duty passenger vehicles up to 4,536 kg). It is intended that trailers designed to be attached to combination tractors would not initially be subject to the proposed regulations.

The proposed regulations would seek to reduce GHG emissions from the whole vehicle. There are many aspects of heavy-duty vehicles beyond their engines that affect GHG emissions and the “vehicle-based” emissions standards would address these other aspects (the engine emits virtually all of the GHG emissions from the vehicle, but many other aspects of the vehicle such as its transmission, tires and aerodynamics affect how hard the engine must work and therefore how much it emits).

The proposed regulations would also recognize the range of applications of vehicles and consider emissions standards expressed as the quantity of GHG emissions emitted per unit of work. This per-unit-work method of establishing the standards would recognize that heavy-duty vehicles serve important purposes, and avoid distorting the heavy-duty vehicle market ability to serve those purposes. In general, vehicles with higher workload capacities are more efficient overall but do emit more as individual vehicles depending on its duty-cycle. The proposed regulations would ensure that these vehicles would not be penalized and that purchasers would maintain the ability to specify and buy the right vehicles.

Emissions standards would consider the dominant GHGs for transportation, including carbon dioxide (CO₂), nitrous oxide, methane and hydrofluorocarbon refrigerants. The standards for nitrous oxide and methane would be intended simply to prevent significant increases in emissions of these gases as vehicle technologies evolve. The proposed regulations could also include measures in the form of compliance flexibilities to recognize reductions in the release of hydrofluorocarbon refrigerants.

The standards for CO₂, by far the dominant greenhouse gas emitted by heavy-duty vehicles, would be designed to drive improvements over time and would be designed to become increasingly more stringent over the model years 2014 through 2018. The emission standards would be performance based, which would allow manufacturers to combine the most appropriate and cost-effective GHG emission reduction methods for the products they built. It is expected that standards would be developed in a manner that would allow manufacturers to be able to build compliant vehicles by selecting among technologies, components or strategies that are already cost-effective and available off-the-shelf today. Many of these technologies would bring fuel savings that could outweigh initial costs in less than three years. Moreover, the proposed regulations could provide the option for companies to meet the standards on the basis of fleet averaging. The companies could also have the possibility to bank and trade emission credits.

The general approach of the proposed regulations to establish CO₂ standards that attempt to be similar for the whole range of heavy-duty vehicles, but would also seek to recognize and accommodate the significant differences between three broad kinds of heavy-duty vehicles, their use, their manufacture and their emission regulation history, while achieving the common objective of whole-vehicle regulation of GHG emissions:

1. Heavy-duty pick-up trucks and vans -- This category is largely similar to light-duty vehicles and includes 2500 and 3500 series pick-up trucks and vans. The proposed regulations would seek to establish emission standards based on the complete vehicle. The standards for a given vehicle could seek to consider the vehicle work factor and could be measured using a standardized duty cycle. The proposed standards for this Class of vehicles would be defined in grams of emissions per distance travelled.
   
2. Combination tractors -- This category would include medium/heavy-duty trucks that are typically designed to haul a trailer (i.e., Class 7 and 8). The proposed regulations would seek to separate emission standards for the engine and the rest of the vehicle. Engine emissions could be measured using a standardized duty cycle in a manner similar to the procedures currently used to certify engine smog-forming pollutant emissions under the On-Road Vehicle and Engine Emissions Regulations. The proposed engine standards could be measured in grams of emissions per unit of work or energy. Vehicle emissions could be evaluated in a manner that would estimate the emissions based on a standardized duty cycle. The emission model could consider variables such as tractor aerodynamics, tire rolling resistance, wheel weight, drive-train efficiency or transmission. The proposed vehicle standards could be measured in grams of emissions per unit of work and distance travelled.
   
3. Vocational vehicles – This category would comprise all heavy-duty vehicles not covered in the previous two categories. For example, this category would include heavy-duty vehicles such as: freight, delivery, service, cement, garbage, dump trucks and buses. The proposed regulations would seek to establish and measure emission standards similar to combination tractors.

The proposed regulations could offer flexibility to achieve overall compliance with emissions standards. The flexibilities could be similar to those used under existing regulations such as the On-Road Vehicle and Engine Emission Regulations (for air pollutants) and the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations under the CEPA1999, and are widely supported by stakeholders. These measures could include flexibilities such as meeting the standards on the basis of fleet averaging, banking or trading of emission credits, providing allowances for making GHG-reducing improvements to vehicles or for innovative technologies to reduce GHG emissions, incentives for advanced technology vehicles, or optional standards for companies selling smaller volumes of vehicles.

The proposed regulations could also seek to reduce leakage of hydrofluorocarbon refrigerant used in cabin air conditioning systems. These standards would be independent from the other GHG emission standards. Hydrofluorocarbon refrigerants have high global warming potential and highly cost-effective leakage prevention measures are available.

There are many sizes and varieties of heavy-duty vehicles serving a wide spectrum of functions. The type of companies involved in the manufacture of different kinds of heavy-duty vehicles is also very diverse and there may be distinctions between the Canadian and American fleets that warrant consideration in the development of Canadian regulations. The Government of Canada intends to consider potential implications for the Canadian trucking sector in developing Canadian regulations, specifically the competitiveness and safety of Canadian fleet. A cost-benefit analysis will also be developed as part of the regulatory development process.

Regulated companies would be subject to enforcement and compliance requirements and penalties as specified under CEPA 1999.

Companies would be required to demonstrate compliance with emissions standards using prescribed emissions testing procedures, or prescribed emissions simulation modelling procedures. The proposed regulations would seek to recognize U.S. evidence of conformity.

All technologies, components or strategies will have to meet requirements under the Motor Vehicle Safety Act.

Companies would be required to submit annual reports, to maintain records relating to the GHG emission performance of their fleets and to establish compliance with the proposed Regulations.

A consultation plan will be elaborated for the development of the proposed regulations.

Consultation will continue with the transportation and vehicle manufacture industries, environmental non-governmental organizations, provinces/territories and other stakeholders.

Proposed regulations are intended to be developed for pre-publication in the Canada Gazette, Part I, in mid-2011 to provide for a formal 60-day consultation period consistent with the Cabinet Directive on Streamlining Regulation and section 332 of CEPA, 1999. Final regulations are targeted for December 2011 publication in the Canada Gazette, Part II. The implementation date of the regulations will be aligned with that of the U.S.

Work is underway with the U.S. EPA to develop a common approach to regulate GHG emissions from heavy-duty vehicles, including an emission testing protocol.