No market for electric-powered trucks exists now, nor in the next decade, but that isn't stopping the Obama administration from creating big subsidies for the vehicles under its latest climate rules.
The Environmental Protection Agency and the Department of Transportation on Tuesday finalized joint greenhouse gas emissions and fuel efficiency standards for big-rig trucks, vans and buses.
The rules are the final step in President Obama's broad effort to confront global warming. The regulations target the trucking sector, which makes up about 20 percent of the nation's transportation-based greenhouse gas emissions and energy use but only 5 percent of the vehicles on the road.
The truck rules provide some of the biggest incentives for companies to build more advanced vehicles that use partial or full battery-electric power to drive the truck, or adopt hydrogen fuel cells that produce electricity with water vapor as the only byproduct.
The EPA is building in the incentives while admitting there is no market, nor demand, for the vehicles, the agency said in the final truck rule.
"Adoption rates for these advanced technologies in heavy-duty vehicles are essentially nonexistent today and seem unlikely to grow significantly within the next decade without additional incentives," according to the rule.
The credits are big, much bigger than the original Phase 1 truck rules.
The credits provide up to five-and-a-half times the normal credit that a diesel-powered truck would receive for complying with the regulations. That means if a company builds one electric vehicle, it can count more than five times toward normal vehicle compliance.
The compliance credits are used by the EPA to drive innovation by making it somewhat easier to meet the standards. Critics argue that the credits don't do anything to reduce emissions and could actually have the opposite effect of driving them up.
Nevertheless, the EPA said the credits in the new regulations are the biggest the agency has ever implemented. Plug-in hybrid-electric trucks get a 3.5 multiplier credit, full-battery electric trucks get a 4.5 multiplier credit and fuel-cell trucks get a 5.5 credit multiplier. Previous truck rules gave a similar set of technologies a flat 1.5 multiplier credit, with a specific cap to prevent the credits from distorting the market.
The credit hike in the new rules is in response to industry leaders such as Eaton, which specializes in electric motors, and others, that recommended some level of credit be maintained in the new standards for the advanced technology.
The EPA had said in the proposed rule last year that it was considering eliminating the credits for electric trucks.
By the end of the rulemaking process, both the EPA and the Transportation Department agreed that "it is appropriate to provide such large multipliers [or, credits] for these very advanced technologies at least in the short term, because they have the potential to provide very large reductions in [greenhouse gas] emissions and fuel consumption and advance technology development substantially in the long term," Tuesday's final rule said.
But the agency highlighted in the rule that the credits probably would be eliminated in the future. "Because they are so large, we also believe that we should not necessarily allow them to continue indefinitely," according to the final rule. "Therefore, the agencies are adopting them as an interim program that will continue through [model year] 2027.
"If the agencies determine that these credit multipliers should be continued beyond ... 2027, we could do so in a future rulemaking," the agency said.
The EPA said big trucks have a harder time adopting electric power than cars, such as the Toyota Prius, which have gained sizeable market share in the last decade. Adopting hybrid-electric technology for a commercial semi-tractor trailer truck is much more challenging.
For starters, heavy-duty vehicles are more expensive than light-duty vehicles, and it is "a greater monetary risk for purchasers to invest in unproven technologies," the EPA said.
"These vehicles are work vehicles, which makes predictable reliability even more important than for light-duty vehicles," and sales are much lower for heavy-duty vehicles, especially when they are specialized, the agency said.