EPA Phase II for Greenhouse Gas Emissions Alison Thomas & Shane Groner November 2016 Image: Created Jack Morton Design for ES Follow the Charge campaign, used with permission

Agenda Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles - Phase II What is Phase II? How does it effect original equipment manufacturers (OEMs)? How will it impact school bus fleets and districts? Acronyms ABT: Average, bank, trade (CO2 credits) CO2: Carbon dioxide EPA: US Environmental Protection Agency GHG: Greenhouse gases

EPA Phase II 101 “…cut carbon pollution and improve fuel efficiency, while bolstering energy security and spurring manufacturing innovation.” “The Phase 2 program promotes a new generation of cleaner, more fuel efficient trucks by encouraging the development and deployment of new and advanced cost-effective technologies through model year 2027.” Source: EPA 420-F-16-144, August 2016

Phase II rolls out in 3 steps, beginning in 2021 Trailer standards 1st level of increased stringency Credits begin 2024 2nd level of increased stringency 2027 3rd level of increased stringency Standards dictate maximum levels of CO2 per ton-mile

Certification and standards are mandated based on vehicle classifications Combination Tractors Class 7 Day Cab Class 8 Cab Class 8 Sleeper Heavy Haul Trailers Long Dry Long Reefer Short Dry Short Reefer Heavy Duty Pickups & Vans Vocational Light Heavy Medium Heavy Heavy Heavy Each vehicle sold has CO2 emissions estimated through software OEMs’ yearly fleet averages by category must be at or below the classification standard

17% School buses are classified as vocational / medium heavy / urban Light Heavy Medium Heavy Urban Multi-Purpose Regional Heavy Heavy Vocational classification portion of total fuel consumption and GHG emissions 17% Category also includes: delivery trucks, refuse, utility trucks, transit buses, shuttle buses, emergency vehicles, dump trucks

CO2 emissions levels are calculated by software simulation: GEMS Model Available for free download: http://www.epa.gov/otaq/climate/gem.htm Standard Certification Model inputs include Engine, transmission type, predictive cruise, start/stop, neutral idle, electrification, etc. All vehicle classifications are evaluated on 3 drive cycles Urban, regional, multi-purpose Cycles weighted differently based on classification

Standard OEM certification program enacts progressively more restrictive levels of CO2 OEMs can differentiate engines, fuel types, transmission types, gear ratios, etc. Credits can be averaged/ banked/ traded (ABT) By 2027, phased approach equates to a 22% reduction vs. current baseline Source: EPA Phase 2 Final Rule Aug 2016

Alternative “Custom Chassis” program is simplified and less stringent in 2027 Standards set by vocation (coach, motor home, school bus, etc.) One generic vehicle represents each vocation No trading or banking of credits By 2027, phased approach equates to an 18% reduction vs. current baseline Source: EPA Phase 2 Final Rule Aug 2016

Vocational vehicles: average 24% improvement at a 3% cost premium = 4 year payback Source: EPA Phase 2 Final Rule Aug 2016

Regulations can be “technology advancing,” multiple options to achieve compliance Electrification of Accessories Pumps Compressors Power steering Weight Reduction Tires Low rolling resistance Tire pressure monitoring systems High-Efficiency Axles Low viscosity (friction) lubricants Idle Reduction Neutral at idle functionality Start-stop functionality Automatic engine shutdown Transmissions Advanced shift strategies Additional gears Engine & Fuel Systems Alternative fuels, hybridization, electrification Downsizing, down-speeding Cylinder deactivation OEM compliance strategies may include technology and/or ABT credits

School bus example: advanced transmission technology enables compliance through 2023 No changes or cost add required to achieve compliance until at least 2024! Source: GEMS model, assuming MY 2021, 2024, and 2027 compliant engines