Fleets, truck/engine makers in talks about incentives for ultra-clean 2007 diesels, SCR

Diesel Fuel News, April 14, 2003 by Jack Peckham

San Antonio -- Engine/vehicle makers and fleet owners are starting discussions about whether and how to create financial incentives to overcome the higher cost of U.S. EPA emissions-compliant 2007 heavy-duty diesel engines.

"We're having preliminary discussions within Engine Manufacturers Association and with American Trucking Associations on possible tax incentives for 2007 trucks," Detroit Diesel Corp. (DDC) emission projects director Tim Tindall told the Hart World Fuels Conference here.

"There's a very significant 10% federal excise tax on truck sales, so maybe we can structure a clean-engine incentive or some other sort of credit" to help truck buyers overcome the significant costs of catalyst and engine control systems for ultra-low emissions of nitrogen oxides (NOx) and particulate matter (PM) starting in 2007.

A lack of such incentives, along with a huge "pre-buy" of trucks prior to EPA's October 2002 low-NOx diesel deadlines, caused a huge fall-off in orders for cleaner diesels since October. This caused engine and truck makers to suffer wild swings in sales, with resulting layoffs and financial turmoil. Industry wants to avoid a repeat of this problem in 2007 and 2010, when EPA's final ultra-low NOx limits take effect.

History lesson: The cost of producing post-October engines meeting a 2.5 grams/brake horsepower-hour NOx HC limit was far higher than EPA initially projected when engine makers signed "consent decrees" with EPA in 1998. What's more, truck fleets are balking at fuel-economy penalties from exhaust gas recirculation (EGR) that most engine makers now use to comply with the 2.5-grams NOx limit.

Only Cat decided against EGR, but it's paying EPA millions in non-conformance penalties (NCPs) for "bridge" engines sold since October (see Diesel Fuel News 3/17/03, p7). However, Cat is claiming that its new "Acert" low-NOx engines debuting this year avoid an estimated 3-5% fuel economy penalty of EGR-equipped engines.

So, Cat's now claiming that truck fleet customers are starting to choose its engines over those of competitors -- even though the new Cat engines likewise carry an initial cost premium compared to pre-October engines.

Besides initial cost penalties for emissions catalysts loaded with platinum-group metals (PGM), the other key concern is emissions-control system durability. So far, NOx traps haven't been proven able to survive the U.S. EPA required 435,000 miles minimum durability for heaviest-duty engines, let alone the million-mile commercial target of engine makers.

Because of that catalyst durability problem, engine makers might instead be forced to try to get U.S. EPA to allow the use of urea-selective catalytic reduction (SCR) systems that already show ability to meet the interim 1.2 grams/brake-horsepower hour NOx limit for 2007. Based upon test programs to date, engine and SCR systems developers are optimistic that SCR eventually could evolve to hit EPA's 0.2 g/bhp-hr NOx limit for 2010 as well, without durability problems of NOx traps.

Problem: EPA fears that truckers won't refill urea tanks, hence NOx emissions reductions can't be assured.

"We think there are technical solutions to ensure urea tanks are refilled," Tindall said here. "For example, if you run out of urea, you stop running the truck altogether -- like running out of diesel fuel.

"There's still the issue of urea refueling infrastructure and how to put that in place" at diesel stations, however. "There will be discussions with EPA [on urea-SCR issues] this year."

DDC and Mack are already running test trucks fitted with urea-SCR systems in U.S. commercial fleets. Meantime, European diesel makers are even farther ahead with their urea-SCR commercialization plans, Tindall noted. This includes the "AdBlue" urea infrastructure project involving urea producers, diesel engine makers and oil companies interested in retailing urea to truck fleets and (potentially) light-duty diesel vehicles.