CO₂ reductions for heavy commercial vehicles: Making the right decision

On December 20, 2018, the Council of the European Union (EU Council of Ministers) voted on targets for CO₂ reductions for heavy commercial vehicles and supported a reduction of 15 percent by 2025 and of 30 percent by 2030 (the reference year being 2019). This equals a continuous yearly CO₂ and fuel consumption reduction of triple to quadruple the amount that has so far been possible to achieve.

These targets correspond to the EU Commission’s proposal of May 2018 and thus are below those the European Parliament has voted for in November 2018 (a reduction of 20 percent by 2025 and a minimum of 35 percent by 2030).

Both targets go far beyond what is technically feasible and economically reasonable during the available time periods. If these targets are set, manufacturers and customers will incur enormous expenses and technological challenges and enormous fines will be imposed on truck manufacturers in the case of non-achievement. This would adversely affect investment and thus jeopardize the future viability of the entire industry.

So this is a very important decision for the future of our industry and therefore for the jobs at our truck plants in Germany.

We now rely on the so called trilogue of the European Commission, the Council of the European Union and the European Parliament as the next step in the EU legislation procedure. In the next weeks and months we are going to continue our talks with political representatives and hope that our reasoning will be taken into consideration in the further process.

In the view of Daimler Trucks, an improvement in the CO₂ reduction of approximately 1.5 percent annually in the next ten years would be ambitious but still realistic. As confirmed by DEKRA, a technical inspection company, Daimler Trucks has already reduced the fuel consumption of heavy duty Mercedes-Benz trucks and thus their CO₂ emissions by 22 percent in the past 20 years.

Already in early November 2018, Michael Brecht, Chairman of the General Works Council of Daimler AG, Stefan Buchner, Head of Mercedes-Benz Trucks and a Member of the Divisional Board of Management of Daimler Trucks, and Frank Reintjes, Head of Global Powertrain, E-Mobility & Production Planning at Daimler Trucks and a Member of the Divisional Board of Management of Daimler Trucks, had together addressed a letter to the political leadership in Germany at the state, federal and European levels. In that letter, they emphasize their concerns regarding the planned European CO₂ regulation for heavy commercial vehicles and appeal for an environmentally, economically and socially balanced transformation process.

All chairmen of the works councils of Daimler Trucks’ German plants in Gaggenau, Kassel, Mannheim and Wörth have also signed the letter.

The Mercedes-Benz brand has produced trucks in Germany for more than 120 years. With more than 30,000 employees in Germany, Daimler Trucks produces successfully in the federal states of Baden-Wuerttemberg, Hesse and Rhineland-Palatinate.

Mercedes-Benz Trucks’ biggest assembly plant is in Wörth am Rhein. With more than 10,300 employees, the Mercedes-Benz plant in Wörth is the second-largest employer in Rhineland-Palatinate.

The Mercedes-Benz plant in Gaggenau, which in addition to gearboxes for all Daimler vehicle divisions also produces external planet axles, portal axles and converters, was founded in 1894 as “Bergmann-Industriewerke GmbH” and is the oldest automobile plant in the world. With approximately 6,500 employees, it is both the largest employer in the city and the largest company in the region that provides vocational training.

The more than 5,100 employees at the Mannheim plant produce engines and related components for all of Daimler’s commercial-vehicle operations worldwide. Training and securing young talents are of equal importance for the Mannheim plant: Young people have been trained here for more than 100 years and a total of approximately 11,000 employees have received vocational training since the company was established.

The Mercedes-Benz plant in Kassel is Daimler’s global competence center for commercial-vehicle axles. With approximately 3,000 employees, it is Europe’s largest plant producing axles for commercial vehicles and the largest industrial employer in the city of Kassel.

Approximately 4,500 employees work at various locations in the Stuttgart area, for example in research and development and at the head office of Daimler Trucks.

The best-possible CO₂ efficiency has always been, and continues to be, a self-evident goal for our company. In recent decades, in addition to implementing a total of six Euro emission stages, we have succeeded in continually improving the fuel efficiency and thus CO₂ efficiency of our bestselling vehicles by 22 percent in 20 years. In this way, we are already making a contribution to climate protection that will also benefit our customers and improve our international competitiveness.

We are working hard to put alternative drive systems on the road as quickly as possible, but despite all our efforts, there is still a long way to go to achieve that goal in terms of technology, infrastructure, customer acceptance and cost efficiency. These technologies can only make the contribution to reducing CO₂ in the medium to long term that the EU is already assuming for today at the currently proposed limits.

Appropriate incentive mechanisms could accelerate CO₂ reductions. We therefore regret that the regulatory proposal takes far too little account of zero- and low-emission vehicles (ZEV/LEV). The EU is thus setting the wrong priorities for further progress with the reduction of trucks’ CO₂ emissions.

  • The regulatory proposal calls for multiple offsetting for zero- and low-emission vehicles only with a maximum factor of two, and does not take into account whether the range of an electric truck in use is 50 or 400 kilometers. This contradicts the fact that electric drive systems are four to five times as expensive as conventional drive systems. On the other hand, a positive model is the existing practice in the United States, by which battery-powered vehicles are counted with a factor of 4.5 and fuel-cell vehicles even by a factor of 5.5. We regard as sensible such an offset depending on the range of a ZEV, that is, with the factor 5 (range greater than 400 kilometers), factor 4 (range greater than 200 km) and factor 3 (range greater than 100 km), and with a linear decrease to 1.5 for vehicles with at least 35 percent less CO₂ compared with base year 2019. With a view to a realistic start-up period, a limitation of such offsetting factors should not take effect before 2030, and then at 10 percent instead of 3 percent.
  • The so-called banking and borrowing system should be designed to be practical. So-called credits should be valid for the entire period (2019-2030). Manufacturers should be allowed to use those credits within five years, with compensation for overruns being possible within three years. Over-fulfilment of the limits should also lead to credits, as with the regulation in the United States.

We are also concerned about the disproportionately high level of penalties for exceeding the limits, which at 6,800 euros per g/tkm for trucks are about 30 times as high as for cars and light commercial vehicles. If a manufacturer of 50,000 vehicles missed the target by 10%, it would be fined 2 billion euros. In our view, it must also be taken into consideration that the manufacturer of a truck’s tractor unit is only responsible for a part of the entire system and can thus only partially influence the avoidance of fines.

With the implementation of the targets for CO₂ reductions and in particular in the event of the aforementioned fines, manufacturers would be faced with enormous expenses, to the detriment of investment and thus of their future viability.

Until now, there has been no generally binding test cycle for the CO₂ emissions and fuel consumption of heavy commercial vehicles. In Europe, the VECTO simulation program was therefore developed to calculate the fuel consumption of trucks in their individual configurations. In the future, this data will be recorded and made transparent throughout Europe. From base year 2019, it will form the reference value for future CO₂ reduction targets.

VECTO stands for Vehicle Energy Consumption Calculation Tool. Further information about VECTO can be found here.

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