Sustainability Strategies Addressing Supply-Chain Air Emissions (2014)

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92 A P P E N D I X B National Initiatives Introduction This case study cluster considers programs based in the United States that provide single, integrated approaches to address the energy, economic, and environmental impacts of goods movement at the national scale. Two programs have been selected: • The U.S. Environmental Protection Agency’s (EPA’s) SmartWay Program, which aims to improve fuel effi- ciency and reduce greenhouse gases (GHGs) and crite- ria air pollutants (CAPs) from the transportation supply chain. SmartWay is an example of a successful public ini- tiative to manage emissions, based on voluntary involve- ment and close interaction with the private sector. This incentive-based program was most frequently cited dur- ing the Phase 1 stakeholder interviews as an example of a win-win initiative that addresses the energy, economic, and environmental impacts of goods movement. It dem- onstrates how the public sector can work productively with carriers, railroads, and shippers to make a positive contribution to supply-chain sustainability with both environmental and economic benefits. • The not-for-profit company, Cascade Sierra Solutions (CSS), assists truck carriers across the United States in obtain- ing the technology and knowledge necessary to improve their fuel efficiency, switching to less polluting technologies, and reducing emissions. CSS provides unbiased advice to the trucking industry, along with low-cost financing and access to government grants, enabling truck carriers to reduce fuel consumption and access cleaner technologies. This initiative provides a clear example of cooperation and partnerships between the nonprofit, public, and private sectors to reduce emissions, improve carrier profitability, and enhance energy security. Case Study: EPA SmartWay Transportation Partnership Program Inception and Objectives Context The EPA SmartWay Program was formed in 2004, at a time when shippers and carriers sought a common way to address their supply-chain energy emissions while energy prices were escalating and fuel usage and emissions in the sector were growing. The industry itself was searching for new ways to improve performance and its public image, while the EPA was looking for innovative ways to collaborate with the freight sector to reduce emissions and improve the efficiency of legacy fleets in a manner that would complement other agency regulatory programs (EPA, 2011, pers. comm.). Between 1980 and 2006, the average fuel economy for com- bination trucks remained mostly constant, at 5 to 6 miles per gallon (MPG), despite the availability of more fuel-efficient technology. Significant market inefficiencies and challenges to the optimal uptake of technology in the heavy-duty truck sector included the lack of accurate, verifiable fuel economy information and not incorporating the costs of CO2 emis- sions and other air pollutants into logistics operations (Tan and Blanco, 2009). The structure of the truck manufacturing and component industry also posed challenges to the flow of accurate and useful information. This led to much uncertainty regarding payback from technology investment. Further, there were no clear standards or methodologies for measuring the effi- ciency of heavy trucks that were easily replicable. Engaging the Private Sector SmartWay was intended to provide a single integrated, national program that offers consistent and measurable

93 approaches to reduce the energy, economic, and environ- mental impacts of goods movement (EPA, 2011, pers. comm.). The program built upon industry and civil society participa- tion from the outset. In early 2003, the EPA met with indus- try stakeholders including representatives from multimodal carriers and shippers, environmental groups, the American Trucking Association and Business for Social Responsibil- ity (which later became SmartWay Charter Partners). This group evaluated the core principles, tools, and recommen- dations that make up the SmartWay Program (EPA, 2011, pers. comm.; EPA, 2012a). The stakeholders assisted the EPA in building a sound business case for a program that would meet the needs of industry and provide value-added benefits by helping the EPA to understand industry challenges. Because SmartWay was developed to provide technical assistance to carriers and a platform for partners to exchange information regarding the effective use of a broad range of technologies, as well as access to financial assistance, ongoing engagement of the private sector remains critical. Program Focus and Scope Components The SmartWay Program strives not only to reduce freight emissions but also to support key national interests, includ- ing energy independence and the sustainability of U.S. busi- nesses and supply chains (that protect and generate jobs and contribute to the economy). Specifically, the program is structured into the following five components (EPA, 2011a): 1. SmartWay Transport Partnership—Partnership by which freight carriers and shippers commit to benchmark opera- tions, track fuel consumption, and improve performance annually. 2. SmartWay Finance Program—Competitive grant program that makes investing in fuel-saving equipment easier for freight carriers by providing better access to financial mech- anisms such as reduced-interest loans with flexible terms. 3. SmartWay Technology Program—Testing and accredita- tion program to identify low-emission freight equipment, technologies, and strategies such as idle reduction tech- nologies that allow drivers to refrain from long-duration idling of the main propulsion engine by using alternative technology; aerodynamic technologies that minimize drag and improve air flow over the entire tractor-trailer vehicle (e.g., gap fairings that reduce turbulence between tractor and trailer and side skirts that minimize wind under the trailer); low-rolling-resistance tires that can reduce NOx emissions and fuel use by 3 percent when used on all five axles on long-haul Class 8 trucks; and retrofit technologies like diesel oxidation catalysts and diesel particulate filters. Fleet owners are therefore provided with the necessary information to enable informed decision making. Equip- ment purchased with funds from National Clean Diesel Emission Reduction Act (DERA) grants are required to be from the SmartWay-verified list to be eligible. 4. SmartWay vehicles—Program that ranks light-duty cars and small trucks and identifies superior environmental performers with the SmartWay logo, publicizing their performance on the SmartWay Partner List. 5. SmartWay international interests—Guidance and resources for countries seeking to develop freight sustain- ability programs modeled after SmartWay. Partnering Private-Sector Partners Joining SmartWay is voluntary and free for partners. As a SmartWay partner, shippers and carriers agree to undertake an assessment of their freight operations, calculate fuel consumption and carbon footprint, and track fuel efficiency and emission reductions annually. EPA has developed the methodology for reporting and works with each partner to collect and verify data received. Report- ing is a core aspect of SmartWay accreditation. In exchange, partners are provided with access to SmartWay funding provided through DERA grants, the SmartWay Finance Program, and public-private partnerships. Partners are also entitled to use the SmartWay brand and logo, which recognizes their sustainability efforts and can be used in marketing. This is reportedly a strong incentive for carriers to join the program, because shippers are increasingly committing to SmartWay-certified carriers (EPA, 2011, pers. comm.). Initiated by the EPA and 15 charter organizations in 2003, at the time of the program’s launch in 2004, SmartWay had already recruited 50 industry partners. As of December 2011, the EPA listed a total of over 2,900 companies and associa- tions in the program (see Exhibit B-1). These include “the 100 largest truck carriers [in the United States] and over 1,000 medium-small carriers” as well as “all Class 1 rail lines, major logistics firms, and shippers from every sector” (EPA, 2011, pers. comm.). The program is supported by major freight industry associations, environmental groups, states, companies, and trade publications. EPA is considering expanding its program to include part- nerships with marine and air carriers, resources permitting. SmartWay also provides an avenue for other stakeholders, such as nonprofits, dealers, and truck stops, which encourage their members to join the program as a SmartWay Affiliate. All other organizations that support the goals of SmartWay can join as a SmartWay Community Member (EPA, 2012b).

94 Public-Sector Partners The SmartWay Program also is based on strong partnerships and linkages within the pub- lic sector. For example, SmartWay routinely coordinates with other federal, state, local, and regional authorities to ensure the program is compatible and supplementary to their efforts. SmartWay’s tools and approaches draw upon and comple- ment EPA’s existing resources, (e.g., by using emission fac- tors from EPA’s national transportation regulatory air quality model, MOVES) (EPA, 2011, pers. comm.). SmartWay is part of the EPA’s Legacy Fleet Programs (which include the National Clean Diesel Campaign and Clean Ports USA), enabling a comprehensive approach to addressing the legacy truck fleet. Through this synergy, SmartWay has dem- onstrated that test methods, technologies, and trucking indus- try knowledge can serve as a technical basis for formulating new large truck standards to improve the efficiency and reduce GHGs from new commercial trucks. The EPA and Depart- ment of Transportation (DOT) plan to implement these new standards in the near future (EPA, 2011, pers. comm.). Further, SmartWay’s test data was instrumental in the development of a vehicle simulation model that EPA and DOT will provide to businesses to help demonstrate compli- ance with new emissions standards. The EPA has incorpo- rated certain SmartWay-demonstrated technologies into its state implementation plan (SIP) guidance, giving states more tools to meet national health-based standards for air quality (EPA, 2011, pers. comm.). Working with the Coalition for Responsible Transporta- tion and the Environmental Defense Fund, the EPA also has lunched a port drayage truck initiative under the SmartWay Transport Partnership aimed at reducing emissions from dray- age trucks. The port drayage initiative will provide technical assistance, emission assessment tools, and partnership recog- nition to port truck companies that commit to cleaner trucks. It will also provide recognition for shippers using cleaner trucks at ports. Through this initiative, SmartWay will help ports continue to contribute to their local economies while protecting air quality, the environment, and public health, especially that of the surrounding communities. Funding DERA is a federally funded program established under the Energy Policy Act of 2005, which gave the EPA new grant and loan authority for promoting diesel emission reductions (EPA, 2012c). The SmartWay Clean Diesel Finance Program is one of four financing programs that help fleets reduce diesel emis- sions that fall under these guidelines. Under the Clean Diesel Funding Assistance Program, competitive grants are awarded to fund projects that reduce emissions from existing diesel engines through, for example, the use of SmartWay-approved emission control and idle reduction technologies; cleaner fuels; and engine, vehicle, or equipment upgrades and replacements. Particular emphasis is on establishing low-cost loan programs for the retrofit of used pre-2007 highway vehicles (EPA, 2011, pers. comm.). Under the SmartWay Clean Diesel Finance Program, com- petitive grants are awarded to nonprofit organizations and local governments for the purposes of providing financial incentives (in the form of low-cost loans, rebates, other) to vehicle/equipment owners for the purchase of eligible vehicle replacements, idle reduction technologies, and emission con- trol retrofits. Between 2008 and 2010, EPA awarded a total of $46.9 million in loan and financing programs to assist trucking Exhibit B-1. Summary of SmartWay transport partners. Type of Partner Number of Participants Share of Total (%) Logistics 435 14.8 Multimodal Carriers 11 0.4 Rail Carriers 18 0.6 Shippers 229 7.8 Truck Carriers* 2,250 76.5 Total Partners (Dec. 2011) 2,943 100.0** Source: EPA, 2011b Notes: * Of the total number of truck carriers, 63 have joined as Drayage Carriers as part of the SmartWay port drayage truck initiative aimed at cleaning up the trucks that deliver freight in and around ports. ** Due to rounding, total does not sum to 100 percent exactly.

95 companies in reducing their fuel costs and air emissions (EPA 2012b). A particular focus is on providing access to truck own- ers, especially small- and medium-sized firms, to buy cleaner, more fuel-efficient trucks. Data Monitoring and Reporting Although SmartWay is a voluntary program, transpar- ency in carbon accounting, reporting, and benchmarking is a core aspect of the accreditation process and a requirement for accreditation. The EPA has developed a methodology for reporting of data and program impacts by working with each partner to collect and verify data received. Only after rigorous data review and validation is the data uploaded to a data- base (EPA, 2011, pers. comm.). In addition, the SmartWay Program reports on various metrics including the following (EPA, 2011, pers. comm.): • Number of partners; • Fuel savings (in cost and gallons) relative to a base case without the SmartWay Program initiatives as a measure of business sustainability; • Oil savings (barrels) relative to a base case without the SmartWay Program initiatives; • Absolute, average, and percent reductions in CO2 and CAP emissions per year achieved as a result of the SmartWay Program (in kilograms and pounds/ton-mile); • Environmental justice: number of susceptible populations (poor, minorities, children, the elderly) affected by pollution; • Freight mode split/shift; • Protection of economy and jobs (qualitative); and • Reduction of business uncertainty. Tools also have been developed specifically for shippers that enable them to: • Evaluate individual transportation providers based on their emission rates; • Estimate reductions due to reducing miles or weight in their transportation network using the emission rates from their carriers; • Evaluate mode switching impacts across all emissions and metrics; and • Determine their SmartWay shipper score and SmartWay logo eligibility. Operations The EPA SmartWay Program is staffed by 10 people who are involved in helping companies in the enrollment process, submitting their annual updates, and providing technical and marketing assistance where needed (Tan and Blanco, 2009). Benefits Industry Benefits The SmartWay logo provides partners a recognized brand within the industry by allowing carriers and shippers the ability to differentiate themselves as active participants of the sustainable freight movement (EPA, 2011, pers. comm.). The program provides a means of bringing carriers that have adopted these strategies together with shippers looking to reduce their transport carbon footprint, making it easier for both parties to “talk the same language” with common tools and approaches (EPA, 2011, pers. comm.). It provides a con- sistent means to assess optimal mode choices as well as evalu- ate, track, and reduce supply-chain fuel use and emissions. This was important to industry leaders and small firms that lacked the resources to independently research and finance new technologies (EPA, 2011, pers. comm.). Through its grants, SmartWay has been able to increase the availability and market penetration of fuel-efficient tech- nologies, particularly for small-medium carriers with fewer resources that otherwise would not have made a switch (EPA, 2011, pers. comm.). As these technologies are proven to be cost-effective, they get shared with other companies through the program, thereby increasing industry confidence in them, and small carriers start to implement them as well (Tan and Blanco, 2009). Freight sustainability is now part of the business model of an increasing number of companies as they recognize the financial and environmental benefits of reducing fuel use. Carbon benchmarking and transparency is growing through- out the trucking industry. By serving as an independent resource about technology benefits, fuel savings, and part- ner performance, the SmartWay Technology Program helps fleets identify which technologies or strategies will improve their efficiency and reduce emissions as best fits their business needs. Companies can hence make informed purchases (EPA, 2011, pers. comm.). Program Achievements EPA (2011, pers. comm.) reports that the SmartWay Pro- gram is meeting its annual goals—developed through rigor- ous forecasting—and is on target to reducing 33 to 66 million metric tons (MMT) of freight emissions (from ocean-going vessels, rail, and truck) by 2012. As of early 2011, SmartWay reported that their partners had saved 16.5 MMT of CO2, 235,000 tons of NOx, and 9,000 tons of particulate matter (EPA, 2011b). This is the equivalent of 50 million barrels of oil saved, which is equal to taking more than 3 million cars off the road for an entire year. SmartWay partners also have saved an estimated $6.1 bil- lion in fuel costs as a result of the program (EPA, 2011b). The

96 reduction in air pollution has had economic and environmen- tal impacts as well as providing social and health benefits, par- ticularly in low-income communities near ports, intermodal yards, truck stops, and border crossings. Further, EPA (2011, pers. comm.) adds that many Smart- Way partners are leading the way for industry. For example, groups like American Trucking Association, Campaign for Responsible Transportation, Council for Supply Chain Man- agement Professionals, Business for Social Responsibility, and Clean Cargo Working Group are investing in programs and projects that will ensure their stakeholders and others are competitive and prepared for a carbon-constrained world and higher energy prices. The EPA also is creating a positive impact outside of the United States through its SmartWay International Inter- est subprogram. Governments such as China, Mexico, and Canada, along with international organizations including the World Bank and the Commission for Environmental Cooperation, have projects or programs that rely upon SmartWay’s technical assistance, methods, and tools (EPA, 2011a). Success Factors Early and ongoing involvement of stakeholders in the design of the program ensured its responsiveness to business and environmental needs and is a key factor underpinning the program’s popularity. Although voluntary, the program’s success is also due to the snowball effect of enrollment and partnership that has occurred through the following: • Word of mouth—As more companies become aware of SmartWay and as they realize a growing number of compa- nies are enrolling in the program, they themselves become more receptive to participating. It was reported that indus- try awareness of the program increased from 13 percent in 2005 to 32 percent in 2007 (based on a tracking survey cited by Tan and Blanco [2009]). In this way, the SmartWay Program has propagated the concept of the sustainability brand. • Consumer pressure—As consumers become more aware of the program, they place pressure on shippers to enroll in the program through their purchasing decisions and direct communications. • Shipper pressure—Shippers participating in the Smart- Way Program are required to have at least 50 percent of their shipments moved by carriers enrolled in the program. This requirement has a large multiplying and reinforcing effect with regard to program participation. For instance, Wal-Mart has offered fuel subsidies to carriers who enroll in SmartWay, while IKEA has made participation in the program mandatory for carriers they employ (Tan and Blanco, 2009). More efficient carrier performance leads to lower operating costs and greater savings that are distrib- uted back to the shippers as well—making shippers strong proponents of SmartWay. • Strategy evaluation/validation—Shippers and carriers may share best practices and confirmation of the perfor- mance of various vehicle technologies. This helps many small carriers save time and resources in testing technolo- gies themselves (Tan and Blanco, 2009). Views from Operators According to many SmartWay partners, the fact that the program is voluntary rather than regulatory is highly desir- able, allowing them to select the emissions-reduction path that makes most sense for their businesses, and providing the nec- essary assurances and verification of fuel-saving technologies. Voluntary public-private partnerships provide an alternative policy option to regulation, which is often a contentious pro- cess and opposed by industry. They are also less costly than grants and tax incentives and directly target the market effi- ciency problem regarding lack of reliable information (Tan and Blanco, 2009). Messages heard from the EPA and SmartWay Partners interviewed in this research that are important for public policymakers in the consideration of future initiatives to improve supply-chain sustainability are as follows: 1. Any solution, whether policy-, market-, or technology- based, should consider the business case. From an end-user perspective this is a highly salient factor, because compa- nies that do not consider the bottom line do not stay in business. Additionally, businesses want certainty against unknown risks. SmartWay is effective because it helps busi- nesses assess and measure what used to be an unknown or an uncertainty—the energy, economic, and environmental impacts of goods movement—and to mitigate risks. 2. The shift to sustainability is more challenging for small businesses (such as small truck fleets, independent owner- operators, and small businesses that ship and receive freight on a regular basis). These enterprises require expertise, tools, resources, and support that can help them operate more efficiently and distinguish their businesses to custom- ers looking for greener choices. Many of these small truck- ing companies and owner-operators drive older trucks. Thus, technical and financial assistance (e.g., in respect of retrofits and fuel savings) are useful in improving these companies’ performance and carbon footprint. Bringing these technologies and approaches within the reach of small businesses allows them to be more competitive in the mar-

97 ket place and to pass on these financial and sustainability benefits to their customers. 3. The marketplace increasingly requires transparency in business operations. More consumers, shareholders, sup- pliers, and others want to understand whether the compa- nies with which they do business have sustainable practices. Because carbon is a leading indicator of fuel and energy use, it is poised to become a new indicator for sustainabil- ity, quality of life, and economic efficiency. Better market information in respect of fuel efficiency will help send the right market signals to further reduce carbon emissions. 4. Initiatives should capitalize on the growing opportunities for collaboration between stakeholders to optimize trans- portation efficiency, allowing shippers and carriers to “talk the same language” in respect to energy savings and effi- ciency, with common tools and approaches. Conclusions SmartWay has demonstrated that supportive public-sector initiatives are instrumental in promoting the sustainability of the supply chain. The program has penetrated a part of the supply-chain industry that generally is relatively inaccessible to regulation—that of in-use trucks. In particular, the success of the program has been in its ability to address common market challenges facing carriers such as the lack of information about energy efficiency options and technologies, high transaction costs, lack of reliable technical assistance, and the absence of an objective yardstick for measuring environmental stewardship (Tan and Blanco, 2009). It has helped to build stronger mar- ket confidence, awareness, and demand for sustainable freight practices, reduced obstacles to freight, and promoted the adop- tion of greener and cleaner technologies on the part of carriers. Importantly, SmartWay has demonstrated that voluntary public-private partnerships can result in innovative and effective policy design without being unnecessarily intru- sive to the market. The increased awareness of the carbon footprint and freight sustainability is helping businesses to address in a single, comprehensive approach, what had previ- ously been an area of considerable uncertainty and confusion (EPA, 2011, pers. comm.). By providing resources that assist and educate both large and small businesses, SmartWay has helped to facilitate and accelerate an industry transition to sustainability among both shippers and their carriers (EPA, 2011, pers. comm.). Although national in scale, focused initiatives such as the port drayage program enable SmartWay to concentrate efforts on specific locations where emissions are a particular concern, and on sectors that are the most polluting (because of the age of drayage trucks). Through this initiative, SmartWay will help ports continue to contribute to their local economies while protecting the air quality, environment, and public health of the surrounding communities. Cascade Sierra Solutions Inception and Objectives Founded in 2006, Cascade Sierra Solutions (CSS) is a not- for-profit company whose overall objective is to save fuel and reduce emissions from heavy-duty engines. CSS does so by assisting trucking companies in gaining access to the technol- ogy and expertise needed to improve fuel efficiency, thereby reducing emissions and costs. Such win-win solutions improve the environment, contrib- ute to business needs, and also can have benefits in terms of contributing to energy security and improving the domestic economy (e.g., by switching to locally available fuels such as natural gas). Program Focus and Scope Components CSS provides truckers with advice on technology, driver training, and access to low-cost financing and government grants, bringing sustainable technologies within reach of trucking companies. Specifically, the CSS program emphasizes older trucks, because these are the most polluting. CSS also focuses its activities on areas around ports and large cities in recognition that port trucks tend to be the older, more polluting models, and urban areas are where air emissions impacts are greater due to volumes, congestion, and the proximity of receptor communities. The goals of CSS are to • Improve the efficiency of existing commercial vehicles by promoting technologies and solutions approved by the EPA’s SmartWay Transport Partnership; • Evaluate and promote existing solutions and identify emerging technologies that fuel efficiency improvements and reduce emissions; • Execute truck replacement programs to permanently remove older, more polluting trucks and replace them with cleaner and more fuel-efficient vehicles including clean diesel, natu- ral gas, hybrid, and electric vehicle solutions; • Implement alternative fueling infrastructure such as natu- ral gas (both compressed natural gas [CNG] and liquefied natural gas) and biofuels as clean, efficient, and affordable transportation fuels for commercial heavy-duty diesel vehicles; and

98 • Provide electrification of truck stops along major freight corridors in the United States as an alternative to burning diesel fuel during rest periods (CSS, 2012). Partnering CSS operates in a space between the public and private sectors, bringing together multiple government and private stakeholders across geographic boundaries to reduce fuel usage and emissions while growing the economy. The orga- nization works in partnership with fuel producers, grantors, lenders, investors, manufacturers, utilities, truck stops, ports, government agencies, motor carriers, and owner-operators to facilitate the transformation of freight movement. As a not–for-profit, CSS is able to effectively bridge the gap between the trucking industry and public- and private-sector technology providers. In fact, their funding is dependent on their ability to forge partnerships, with one-third of their funding derived from managing federal grants, one-third from donations and client relationships, and one-third from their own lending activities. Perhaps most important are the partnerships CCS is able to create with the trucking industry, providing independent advice to assist truckers in selecting the best technologies for their needs and facilitating trucking company access to public (and other) financing. The organization is staffed by people with a background in trucking. The advice they provide is grounded in a solid understanding of the industry and is tech- nology neutral. Their objective is to match technologies with trucking business needs. Because they are independent, not government affiliated, not pushing a particular product, can speak the language of truckers, and are able to advise on best practices, they are perceived as trustworthy partners. CSS CEO Sharon Banks has previous experience in governmen- tal finance at an air protection agency. This independence, together with the broader perspective of the industry, under- pins the success of the initiative and their ability to forge rela- tionships across the public and private sectors. Generally, the trucking industry is composed of small businesses and is highly fragmented. It can thus be hard to reach, because owners (particularly owner-operators) are highly mobile, with limited time and resources, and often operate on razor-thin margins. CSS effectively acts as the research and development arm for these small businesses. A critical aspect of their partnering approach is to take their expertise out to the trucking community by operating outreach centers in eight locations across the United States (often linked to truck stops where truckers spend significant amounts of time). Here, CSS showcases more than 70 prod- ucts that save fuel and reduce emissions. They also provide access to the necessary financing to bring these technolo- gies within reach of small operators, as well as helping them to realize the public relations and marketing advantages of alternative technologies (Stifel Nicolaus, 2012, pers. comm., July 25). CSS also coordinates resources from a coalition of pub- lic and private partners who work together to fund truck replacements as part of the Green Highways Initiative. Under this scheme, owner-operators are provided with incentives to relinquish their old trucks and purchase new, clean, and fuel- efficient models along multiple corridors across geographic boundaries. In return for donations, private-sector contribu- tors gain recognition through the media and CSS publicity, enabling them to demonstrate their sustainability credentials. CSS has direct links to the public sector and is a Smart- Way Finance Program grantee—assisting truckers in gaining access to public funds for fuel efficiency improvements. For example, the CSS “Everybody Wins USA” Lease Program is funded by SmartWay and provides financing for the purchase of SmartWay-verified emission control and/or idle reduction technologies nationwide. Grant funding for projects is pro- vided by DERA. Win-Win Opportunities Win-win outcomes are a core aspect of the CSS partnering approach whereby parties working together are able to reap environmental, economic, and societal benefits. A particu- lar area where multiple benefits can be realized is through fuel-switching. CSS is currently assisting truckers in switching to natural gas, which is locally abundant at low cost. CSS estimates that switching to natural gas could save truckers $20,000 in fuel costs per vehicle each year (or more for a long-haul truck). For example, CNG, currently priced at $1.90 per gallon, is half the price of the diesel gallon equivalent (Stifel Nicolaus 2012, pers. comm., July 25). CSS predicts that with growing demand for natural gas as a transportation fuel, prices will decline further. Thus, although the cost difference between a new diesel and a new natural gas truck is between $40,000 and $50,000, the payback time is relatively short (2–3 years) and could decline even further. The GHG and particulate matter (PM) emissions from natural gas–powered vehicles also are lower according to CSS which reports that carbon emissions from natural gas–powered vehicles are 20–30 per- cent lower than those from diesel engines (Stifel Nicolaus, 2012, pers. comm., July 25). Note, however, that taking into account lifecycle emissions, the GHG emissions reductions benefits may be less than this estimate when natural gas is derived from hydraulic fracturing of shale gas. However, impediments to switching vehicles from diesel to natural gas include lack of fueling infrastructure; limited access to financing (not many lenders want to be the first to finance alternative-fuel vehicles); and the time-consuming EPA and California Air Resources Board (CARB) technol- ogy verification process (Stifel Nicolaus, 2012, pers. comm.,

99 July 25). CSS has a goal of supporting the implementation of alternative fueling infrastructure and is working to help private-sector companies secure funding (e.g., from the U.S. Department of Energy and EPA) to help facilitate fueling infrastructure projects. They also are lobbying to obtain gov- ernment support for technologies that have environmental, as well as economic, benefits. CSS also is supporting truck-stop electrification, providing pedestals allowing trucks to plug in to the grid during man- datory rest stops. This can result in considerable savings to truckers, as the cost of electrified power is just $1 per hour— whereas trucks consume upwards of 1.2 gallons of fuel while idling (more for reefers). However, substantial trucker take- up is needed for the electrified truck stops to break even and operate profitably. Thus, the role of CSS in facilitating this change to sustainable practices is critical. For example, CSS is currently providing a bridge between public and private sec- tors, channeling $10 million in finance from the U.S. Depart- ment of Energy to subsidize the retrofit of 5,000 trucks, which will enable them to plug in to the grid (Stifel Nicolaus 2012, pers. comm., July 25). Benefits Since its inception in 2006, CSS has achieved the following (Cascade Sierra Solutions, 2012): • Upgraded or replaced more than 9,000 trucks across the United States; • Secured more than $45 million in grants for truckers; • Provided over $54 million in financing clean, fuel-efficient vehicles and upgrades; • Educated thousands of small trucking companies on best practices to save fuel and reduce emissions; • Saved an estimated 350 metric tons of carbon dioxide emis- sions through promoting a switch to natural gas trucks; • Retrofitted 5,000 trucks, enabling them to plug into the grid rather than idling; and • Is in the process of installing 1,250 electrified parking spaces on five major freight corridors nationally. Conclusions Both SmartWay and CSS aim to achieve win-win out- comes, based on fuel efficiency (and hence reduced costs) as well as emissions reductions with benefits to industry, the environment, and local communities. Additional benefits include reduced dependence on foreign oil, and in some cases, support for the local economy (e.g., through switching technologies to locally available natural gas), as well as creat- ing value-added benefits to partners who are able to market their participation in these programs to potential clients and customers as evidence of their “green” credentials. A significant aspect underpinning the successes and pop- ularity of these initiatives among truckers is that they are enabling rather than restricting. Their role in enabling small trucking companies and owner-operators to embrace sustain- able practices where they would otherwise not have the capac- ity to do so is particularly relevant. For these small companies, SmartWay and CSS effectively perform a research and develop- ment function, granting access to expertise and best practice. These agencies also provide access to funding, often offering a bridge between private operators and public and private fund- ing sources, bringing funding within reach of small operators. Because they are able to meet truckers where they are (e.g., having staff with strong trucking industry experience who understand the business and by means of physically locating expertise in outreach centers) these programs have estab- lished considerable trust and credibility within the sector. The added benefit in the case of CSS is that their not-for- profit status means that they are not affiliated with any par- ticular private-sector technology or regulatory authority, thereby allowing them a degree of independence and the ability to develop relationships that might otherwise not be possible. Further, given their national perspective, both SmartWay and CSS are able to appeal to a wide range of companies that operate across geographic boundaries. They also are able to focus their efforts on sectors that are the most polluting (e.g., older trucks and drayage trucks) and locations most severely impacted (e.g., ports and urban areas).