Program Management Branch…

Program Management Branch
Ministry of Environment,
Conservation and Parks
40 St. Clair Avenue West
Toronto ON M4V 1M2

Re: Pembina Institute comments on redesigning the heavy duty vehicle emissions testing program and strengthening the on road enforcement of emission standards (ERO: 013-3867).

To whom it may concern,

The Pembina Institute welcomes the opportunity to share our views on the government’s recent proposal to redesign the heavy duty vehicle (HDV) emissions testing program and strengthen on road enforcement of emissions standards.

A. General Comments

We are pleased to see the government move to address heavy duty vehicle emissions as a means to improve the health and safety of Ontario’s communities. The policy actions proposed by the province are, broadly speaking, positive steps toward combating the ecological, health, and safety impacts of heavy duty vehicle emissions. We support the province in targeting the use of delete kits through on board diagnostic monitoring and on road spot checks, as these kits have become increasingly popular and sophisticated in recent years. We recommend these new measures be bundled into existing vehicle testing programs to mitigate the economic and operational costs to vehicle operators. Taken as a whole, these steps will ensure a level playing field for the province’s freight operators while laying the foundation for a cleaner freight industry as drivetrain technology and energy infrastructure evolves in the medium to long term.

We encourage the government to align these efforts with its commitment to develop a new, credible climate plan that addresses the biggest pollution sources in Ontario, and establish an Emissions Reduction Fund to support this effort. We recommend that the province consider building on the present policy proposal to integrate even stronger action to combat pollution from freight and support the sector in becoming more efficient. A fuel efficiency requirement for existing fleets is one such option.

B. Freight in Ontario

Transportation was the highest-emitting economic sector in Ontario in 2015, generating one-third of total GHG emissions. Freight is a significant and growing source of emissions within the transportation sector, now accounting for about 10% of provincial GHG emissions following a 242% increase in road freight activity between 1990 and 2014. Continuing growth will cause overall freight emissions to eclipse passenger vehicle emissions in Canada by 2030 despite improvements to vehicular and operational efficiency during this period.

This growth suggests two competing goals for provincial policymakers. On one hand, the transportation and warehousing sector is crucial to economic efficiency and growth, both by ensuring that goods can be sold at reasonable prices across the province and by directly employing 5% of Ontario’s 7.6 million-strong labour force. On the other, today’s heavy duty vehicles emit disproportionate quantities of particulate matter (PM2.5), nitrous oxide (NOx), and carbon monoxide (CO) into the air we breathe. Vehicle emissions contributed to 280 premature deaths and 1,900 hospitalizations in the City of Toronto alone in 2014, without accounting for long-term impacts associated ozone layer damage and climate change.

Building a cleaner and more efficient freight sector is therefore crucial to achieving the Ontario government’s objectives to create jobs and support a thriving economy while addressing harmful pollution. Freight solutions can reduce fuel use and travel time by reducing congestion and conflicts between modes of transportation, facilitating intermodal operations, shortening trip lengths, or shifting the last mile of trips to smaller vehicles. Such interventions can save businesses money while also reducing GHG emissions per unit of goods transported.

C. Policy Design Considerations

In preparing to submit these comments, the Pembina Institute has reviewed the proposal and existing heavy duty vehicle emission policies and regulations in Ontario and elsewhere, as cited in the PDF version of this submission. We offer the following considerations to support the Ministry as it strives to tackle ecological, health, and safety concerns associated with heavy duty vehicle emissions without passing an undue economic burden to the province’s taxpayers, consumers, and vehicle operators.

C.1 Strengthen annual testing in response to evolving vehicle technologies

Drive Clean has made strides in reducing vehicular emissions throughout the province since its introduction in April 1999. The Office of the Auditor General calculates that the program was responsible for approximately one-third of the province’s particulate matter and carbon monoxide emission reductions from light duty vehicles between 1999 and 2012, although when last investigated in 2012 by the Auditor General of Ontario, the impact of testing had declined as newer vehicles are built to more stringent standards. Light duty vehicles now pass annual tests at a rate between 95 and 100%, a success which provincial officials cite as one of the primary reasons for cancelling the program next year.

Heavy duty vehicle emissions have not decreased as rapidly as those of light duty vehicles, however, “in part due to less stringent vehicle emission standards” and “a slower replacement rate of older, higher emission vehicles” by fleet owners. Though the pass rate for heavy duty diesel vehicles has matched that of all light duty vehicles, year-to-year, emission standards for heavy duty vehicles rely exclusively on the opacity of emissions rather than a more comprehensive suite of indicators informed by vehicle drivetrain and production year. Opacity tests can be easily manipulated using delete kits: after-market products which either recirculate or scrub exhaust fumes within the vehicle to lower the particulate density of tailpipe emissions during testing. Canadian industry advocates suggest use of delete kits is growing, causing damage to the environment and public health while simultaneously lowering the competitiveness of well-maintained, environmentally-compliant fleets.

The province proposes revisions to heavy duty vehicle emission testing procedures across three domains: on board diagnostics (OBD), test frequency, and emissions opacity. We list policies in each domain as written in the proposal before introducing considerations necessary to tackle emissions without imposing unnecessary new costs on the majority of heavy duty vehicle operators who comply with environmental regulations.

C.2 Introducing mandatory testing of vehicles’ OBD computer based emissions controls.

The province should introduce mandatory OBD testing for heavy duty vehicles, as has been the case for newer (1998 and later) light duty vehicles since 2013. The test should robustly account for a wide range of delete kit technologies, including those directly built into on board diagnostic computers, e.g., Volkswagen’s illicit Test Mode. To ensure efficient testing operations, the test should take the minimum time necessary for a thorough diagnostic and be bundled into existing testing procedures, such as annual Periodic Motor Vehicle Inspections (PMVI) at MTO-licensed testing facilities to limit the burden on fleets. As highlighted in the submission to this consultation from the International Council on Clean Transportation, there is significant international precedent for mandatory OBD testing. There are also emerging technologies/approaches such as remote sensing and On-road Heavy-duty Vehicle Emissions Monitoring Systems (OHMS) that could complement these tests and help regulators target only those vehicles that show signs of underperformance.

C.3 Reviewing appropriate vehicle test age and test frequency.

The province should maintain existing testing criteria which target older vehicles (≥7 years) for annual testing. Older vehicles were designed under weaker emissions standards than newer models, and older vehicles are more likely to encounter maintenance issues relating to emissions. Annual tests will ensure compliance at regular intervals, particularly should they be bundled into existing heavy duty vehicle tests.

C.4 Reviewing standards for visible emissions opacity.

Current testing standards pass heavy duty vehicles whose tailpipe emissions block no more than 30% of light, while vehicles whose tailpipe emissions block up to 20% of light are permitted to skip the following year’s emission test. The province should maintain existing standards with two caveats: (a) that vehicles are not permitted to skip the following year’s emission test unless they pass all test components beyond a stringent standard, rather than simply the opacity test, and (b) that the province explore opportunities to bundle the opacity test alongside other emission and safety tests to decrease the operational burden of testing on truck operators.

D. Enforce Compliance in Real-time Vehicle Operations

As delete kits become increasingly sophisticated, it is uncertain whether today’s testing procedures can register tomorrow’s cheating innovations. We therefore welcome the province’s proposal to more rigorously enforce vehicles’ compliance with environmental and technological regulations.

D.1 Increase enforcement of existing anti-tampering restrictions with regard to emission control systems in current regulations.

Though the precise proportion of heavy duty vehicles using delete kits is unknown, industry advocates and studies in other jurisdictions, suggest that delete kits are widely available and sought by a minority of truck owners. The province should undertake a multipronged approach to discourage the use of delete kits, including:

(a) Imposing fines on drivers or owners caught tampering with emission controls, ranging from hundreds (United Kingdom ) to tens of thousands (California , Québec ) of dollars depending on the magnitude of the offense.
(b) Flagging firms with vehicle violations for additional review, including spot checks.
(c) Withholding vehicle licensing and business permitting for grievous or recurring offenders.

The Ontario Trucking Association has supported restrictions on the sale and installation of delete kits, given their widespread availability in today’s market. We agree that the province should regulate or ban the import, sale, and installation of delete kit technologies by retailers. Such measures would limit the supply of these technologies and raise their price against genuine emission reduction strategies, such as improving vehicle maintenance or purchasing newer fleets.

The Volkswagen emissions scandal and others, underscore manufacturers’ capacity to design on board technologies that obfuscate on road emissions. The province should collaborate with government stakeholders in other jurisdictions, particularly at the federal level, to hold original equipment manufacturers to account for on board defeat devices. Such accountability is not unprecedented. In the wake of the Volkswagen emissions scandal, the Safer Vehicles for Canadians Act (Bill C-62) was tabled, though not put to a vote, to allow the federal transport minister to order recalls and repairs for non-compliant models as well as fine manufacturers and importers up to $200,000 per day for violating federal vehicle standards.

D.2 Strengthening on road enforcement of heavy duty vehicles on provincial highways to ensure domestic and out-of-province vehicles do not pollute.

The province should strengthen on road enforcement of heavy duty vehicle rules, especially as on board and after-market delete technologies prove increasingly effective at masking emissions during annual tests. Improving enforcement would enable the province to:

(a) Audit the results of scheduled emissions tests, as compared to on road spot checks.
(b) Identify and penalize trucks and firms whose devices successfully hide emissions issues during annual tests.
(c) Target specific locations for enforcement based on government goals, such as those relating to public health or road safety.
(d) Ensure compliance of out-of-province carriers, including from south of the border.
(e) Dissuade future adoption of emission-masking technologies by publicizing the results of enforcement operations.

By making non-compliance more costly than other options, the province would catalyze the adoption of cleaner vehicle technologies at little cost to the taxpayer. On road enforcement, depending on operational choices and penalties, could also generate sufficient revenue to fund green technology vehicle incentives for the trucking industry.

E. Going the Distance on Freight Carbon Pollution

E.1 Fuel efficiency

While the proposed measures are positive steps toward combating heavy-duty carbon monoxide and particulate matter emissions, more action is needed to combat climate-harming GHG emissions from freight transport, which as mentioned now account for about 10% of GHG emissions in Ontario. While enforcing tailpipe emissions regulations is important, there is also an opportunity to encourage greater fuel efficiency, which reduces overall fuel use and therefore overall emissions. As the Ontario government moves forward with establishing a new climate plan and Emissions Reduction Fund, there is an opportunity for the government to harmonize these efforts and take leadership on freight pollution.

To truly tackle GHG emissions from freight transport, we need to address both new and existing vehicles. Until recently, an important program for doing so was the Green Commercial Vehicle Program. This program, designed in collaboration with the trucking industry, was funded via the revenue generated by the cap-and-trade program. Cap-and-trade proceeds were also planned to support the buildout of alternative fueling stations and pilots for municipal transit and school buses (also heavy-duty vehicles) but those initiatives are now on hold.

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Inset: Modernized Ontario Green Commercial Vehicles Program

In late 2017, building on an earlier program that had been established in 2009, Ontario’s modernized Green Commercial Vehicles Program was launched to “provide incentives to eligible applicants for the acquisition of low-carbon alternative fuel commercial motor vehicles and fuel savings devices” (p. 4). Alternative vehicle subsidies applied to electric (50% of cost difference with same-size diesel models), natural gas (30%), and diesel-natural gas hybrids (15%). The modernized program also subsidized the purchase and installation costs of fuel-saving aerodynamic and air conditioning technologies by 30% for most device classes. The program involved up to $270 million in funding. Although data on program uptake has not been made publicly available (the program was only active for a number of months), it was widely supported and welcomed by industry. As the government considers other options for regulating heavy-duty vehicle efficiency, well-designed incentives could be integrated as a program component, and could include any expected revenue from enforcement operations.]
]

E.2 New HDVs

Emission and efficiency standards for new heavy duty vehicles and trailers are grounded in federal regulations, which have been recently amended. Provincial governments can complement these regulations by investing in research and development and alternative fueling infrastructure to support faster uptake of zero-emissions HDV technologies, as well as directly incentivizing companies to purchase zero-emitting vehicles through scrappage programs or purchase incentives. The Emissions Reduction Fund is an opportunity to support these shifts and the province can build on the successes and internal knowledge generated in the early stages of the Green Commercial Vehicle Program. Zero-emissions HDV manufacturing has taken off in Canada, with buses being manufactured in Manitoba and Quebec. Ontario has an opportunity to support job growth in this sector.

E.3 Existing HDVs

Because of the slower turnover rates of heavy-duty fleets compared to passenger fleets (HDV fleets can take up to 20 years to fully turn over ), it is crucial to address GHG emissions from existing vehicles. Building on the province’s present proposal to redesign the Drive Clean Program to address tailpipe emissions from existing fleets, the government should consider opportunities to integrate requirements or supports for fuel efficiency to complement these efforts.

An example of one such effort that can be implemented at little cost to government is the tractor-trailer GHG rule in California, which requires that fleets install SmartWay-certified low rolling resistance tires and aerodynamic technologies for certain fleet model years. Uptake of such technologies could be encouraged with a requirement coming into effect in a target year established through consultation with industry. California’s approach of aligning this requirement with SmartWay (now a voluntary program in Canada) ensured that the required technologies are highly cost-effective (many have payback times of less than one year), and familiar to industry in Canada and the U.S.

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Inset: California Tractor-Trailer Greenhouse Gas Regulation

The California Air Resources Board approved the Tractor-Trailer Greenhouse Gas Regulation to “significantly reduce greenhouse gas emissions produced by certain heavy-duty tractor-trailers.” It mandates aerodynamic retrofits to pre-2010 tractors and trailers, bringing the vehicles in sync with requirements for newer models. The retrofits include low rolling resistance tires and aerodynamic technologies, such as trailer front gap and rear fairings, side skirts, and other SmartWay-approved technologies. Retrofit requirements are based on the percentage of fuel savings for each device, with targeted vehicles required to improve cumulative fuel efficiency by at least 5%.
]

Similar to our recommendations above, inspections for required fuel-saving technologies could be bundled alongside other emission and safety tests to decrease the operational burden of testing on truck owners and operators. Efficiency requirements could be scaled up over time.

F. Continuing the Conversation

We encourage the government to continue working with industry and stakeholders to ensure efficient and effective design of new programs and regulations relating to HDVs. We support the Ontario Trucking Association’s recommendation to establish stakeholder-government working groups on various aspects of regulatory design.

As technology advances rapidly, freight industry actors are left to make investment decisions with limited information about the long-term benefits, risks and payback of the different options. Therefore, we suggest that the province also establish a stakeholder-government working group to examine technology pathways to zero-emissions HDVs in Ontario. We would be pleased to participate in such a working group.

G. Conclusions

We welcome the proposal to redesign the heavy duty vehicle emissions testing program and strengthen the on road enforcement of emission standards. The policy actions proposed by the province are, broadly speaking, positive steps toward combating the ecological, health, and safety impacts of heavy duty vehicle emissions. Taken as a whole, these steps will ensure a level playing field for the province’s freight operators while laying the foundation for a cleaner freight industry as drivetrain technology and energy infrastructure evolves in the medium to long term.

As highlighted in our comments, building on its commitment to develop a new climate plan and Emissions Reduction Fund, the province should consider building on the present policy proposal to integrate even stronger action to combat pollution from freight. An efficiency requirement for existing fleets is one such option.

We would be pleased to discuss these policy proposals further with you.