ARCHIVED — Vol. 151, No. 9 — March 4, 2017

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Regulations Amending the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and Other Regulations Made Under the Canadian Environmental Protection Act, 1999

Statutory authority

Canadian Environmental Protection Act, 1999

Sponsoring department

Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Emissions of greenhouse gases (GHGs) are contributing to a global warming trend that is associated with long-term climate change. In 2014, on-road heavy-duty vehicles were the source of about 8% of total GHG emissions in Canada. The annual amount of GHGs emitted by these vehicles in Canada doubled between 1990 and 2014, from 28 to 56 megatonnes (Mt) of carbon dioxide equivalent (CO2e) per year. In 2013, Canada began regulating GHG emissions from the on-road heavy-duty vehicle sector; however, without additional action, annual GHG emissions from freight transport, the majority of which come from heavy-duty vehicles, are projected to continue to increase and surpass annual GHG emissions from passenger transport by 2030.

Description: The proposed Regulations Amending the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and Other Regulations Made Under the Canadian Environmental Protection Act, 1999 (the proposed Amendments) would introduce more stringent GHG emission standards that begin with the 2021 model year for on-road heavy-duty vehicles and engines. Further, the proposed Amendments introduce new GHG emission standards that would apply to trailers hauled by on-road transport tractors for which the manufacture is completed on or after January 1, 2018, starting with model year 2018 trailers. These emission standards for heavy-duty vehicles, engines and trailers would increase in stringency every three model years to the 2027 model year and maintain full stringency thereafter. The proposed Amendments would also amend two other regulations made under the Canadian Environmental Protection Act, 1999 to ensure consistency with existing on-road vehicle and engine emission regulations and maintain alignment with U.S. regulatory provisions.

Cost-benefit statement: The proposed Amendments are estimated to lead to CO2e emission reductions of approximately 41 Mt from heavy-duty vehicles (including engines and trailers) produced in model years 2018 to 2029 (MY2018-2029), and to CO2e emission reductions of about 3 Mt from all heavy-duty vehicles in 2030. The total costs associated with the proposed Amendments for MY2018-2029 vehicles are projected to be $4.8 billion, largely due to additional costs of about $4.1 billion for the technologies that are expected to be adopted to meet the more stringent GHG emission standards for these vehicles. The total benefits are estimated at $13.6 billion, mostly due to fuel savings of about $10.3 billion, and GHG emission reductions and increased travel opportunities valued each at around $1.5 billion. Over the portion of the lifetime operation of MY2018-2029 vehicles that occurs during the 2018–2050 period, the net benefits of the proposed Amendments are estimated to be $8.8 billion.

“One-for-One” Rule and small business lens: The proposed Amendments would add trailers used with transport tractors into the regulatory framework. Canadian companies that manufacture or import trailers would be faced with new reporting obligations. The proposed Amendments would also lead to minor reductions in reporting burden for small volume companies that manufacture or import heavy-duty engines. The net annualized administrative costs introduced are projected to be approximately $25,000, or $130 per company.

The proposed Amendments would have an effect on about 175 companies that manufacture or import small volumes of heavy-duty engines and trailers for sale in Canada, many of which are small businesses. A flexible regulatory option that incorporates provisions tailored specifically to small volume companies has been selected. Relative to a non-flexible regulatory option, this option would yield annualized cost savings of about $1.7 million, or $10,000 per small volume company.

Domestic and international coordination and cooperation: The proposed Amendments would build on the history of collaboration achieved under the Canada–United States Air Quality Agreement in relation to the development of aligned vehicle and engine emission regulations and their coordinated implementation. In March 2016, Canada committed in the United States–Canada Joint Statement on Climate, Energy, and Arctic Leadership to implement a second phase of aligned GHG emission standards for on-road heavy-duty vehicles. The proposed Amendments are an important step towards this implementation and would contribute to Canada’s international commitments made under the Paris Agreement.

Background

Since 2003, the Canadian Department of the Environment (the Department) has introduced a range of vehicle and engine emission regulations in alignment with the corresponding standards of the United States Environmental Protection Agency (U.S. EPA), pursuant to the Canada–United States Air Quality Agreement. In 2011, the Canada–United States Regulatory Cooperation Council was established with a goal of enhancing the alignment of regulatory approaches between Canada and the United States in a broad range of areas, including vehicle emissions.

The Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (the Regulations), made under the Canadian Environmental Protection Act, 1999 (CEPA), were published in the Canada Gazette, Part II, on March 13, 2013. The objective of the Regulations is to reduce GHG emissions by establishing performance-based emission standards for heavy-duty vehicles and engines in alignment with the corresponding emission standards established by the U.S. EPA.

The Regulations apply to companies that manufacture or import new on-road heavy-duty vehicles and engines for sale in Canada. The GHG emission standards in the Regulations apply to vehicles and engines of the 2014 and later model years and reach full stringency with model year 2018. The Regulations apply to the entire range of on-road heavy-duty vehicles, from full-size pick-up trucks and vans to transport tractors manufactured primarily for hauling trailers, including a wide variety of specialized (vocational) vehicles, such as school, transit and intercity buses, and freight, delivery, service, cement, garbage and dump trucks.

In October 2014, a notice of intent was published in the Canada Gazette, Part I, announcing the Government of Canada’s intention to develop proposed standards to further reduce GHG emissions from heavy-duty vehicles and engines in alignment with those of the United States. During consultations with stakeholders following the publication of the notice of intent, the Department confirmed that proposed regulatory amendments would build on the Regulations and would take specific implications for the on-road heavy-duty vehicle sector in Canada into consideration.

On October 25, 2016, the Government of the United States published its final rule concerning a second phase of GHG emission and fuel efficiency standards for heavy-duty vehicles, engines and trailers (the Phase 2 standards). (see footnote 1) These Phase 2 standards, which will be phased in gradually, reaching full stringency with model year 2027, will build upon the existing standards that are being phased in over model years 2014 to 2018; standards will also be introduced for trailers hauled by transport tractors, as trailer design has an impact on the GHG emissions and fuel consumption of the vehicles hauling them.

Recent policy context

At the United Nations Framework Convention on Climate Change (UNFCCC) conference in December 2015, the international community, including Canada, concluded the Paris Agreement, an accord intended to reduce GHG emissions to limit the rise in global average temperature to less than two degrees Celsius (2°C) and to pursue efforts to limit it to 1.5°C above pre-industrial levels. As part of its commitments made under the Paris Agreement, Canada pledged to reduce national GHG emissions by 30% below 2005 levels by 2030.

In March 2016, First Ministers met in Vancouver, British Columbia, and agreed to build on the momentum of the Paris Agreement by developing a concrete plan to achieve Canada’s international commitments through a pan-Canadian framework on clean growth and climate change.

Later in March 2016, Canada and the United States issued the United States–Canada Joint Statement on Climate, Energy and Arctic Leadership and resolved to work together to meet their respective commitments under the Paris Agreement. (see footnote 2) Recognizing the excellent collaboration between the two countries to establish world-class, aligned regulations and programs to reduce GHG and air pollutant emissions from on-road vehicles, Canada and the United States reaffirmed their commitment to continue this strong collaboration towards the finalization and implementation of a second phase of aligned GHG emission standards for heavy-duty vehicles.

Issues

The Government of Canada is committed to reducing GHG emissions to help limit global warming and the effects of climate change. The combustion of fuels for road transportation is an important source of such emissions. In 2014, the GHG emissions in Canada from road transportation sources totalled 171 megatonnes (Mt) of carbon dioxide equivalent (CO2e). Approximately 23% of total GHG emissions in the Canadian economy came from the transportation sector, making it the economic sector with the second-largest share of such emissions in Canada. (see footnote 3) Heavy-duty vehicles accounted for about 8% of total GHG emissions in Canada. The latest historical emissions trends show that the annual amount of GHGs emitted by on-road heavy-duty vehicles in Canada doubled from 28 to 56 Mt of CO2e per year between 1990 and 2014 (Table 1). (see footnote 4)

Table 1: GHG emissions in Canada (Mt of CO2e)

  1990 2000 2005 2010 2014
Total

613

744

747

706

732

Transportation sector

129

156

171

173

171

On-road heavy-duty vehicles

28

39

50

55

56

In 2013, Canada began controlling GHG emissions from the on-road heavy-duty vehicle sector by means of the Regulations, which are expected to lead to decreases in the growth of GHG emissions from heavy-duty vehicles. However, if additional action is not taken by the Government of Canada, annual GHG emissions from freight transport, the majority of which come from heavy-duty vehicles, are currently projected by the Department to continue to increase and surpass annual GHG emissions from passenger transport by 2030. (see footnote 5)

Objectives

The objective of the proposed Amendments is to further reduce GHG emissions in Canada from new on-road heavy-duty vehicles, engines and trailers by establishing more stringent emission standards to help protect Canadians and the environment from the effects of climate change. Additionally, the proposed Amendments aim to maintain common Canada–United States GHG emission standards for heavy-duty vehicles, engines and trailers, and contribute to minimizing the overall regulatory burden for companies operating in the Canada–U.S. market.

Description

The proposed Amendments would modify the Regulations, which apply to on-road vehicles with a gross vehicle weight rating (GVWR) above 3 856 kilograms (kg) [8 500 pounds (lb)], with the exception of medium-duty passenger vehicles (e.g. certain large passenger vans), which are defined in the On-Road Vehicle and Engine Emission Regulations and subject to the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations. (see footnote 6) The proposed Amendments would apply to any person or company manufacturing or importing new vehicles, engines or trailers for the purpose of sale in Canada.

New and more stringent emission standards

The proposed Amendments would introduce more stringent GHG emission standards for heavy-duty pick-up trucks and vans, vocational vehicles, transport tractors, and heavy duty engines designed for vocational vehicles and tractors. The more stringent emission standards would begin with the 2021 model year and increase in stringency for most vehicle and engine types with model years 2024 and 2027. (see footnote 7) Further, the proposed Amendments would introduce new standards for GHG emissions that result from the operation of trailers used with transport tractors. (see footnote 8) These standards would apply to trailers for which the manufacture is completed on or after January 1, 2018, and would start with the 2018 model year and increase in stringency for most trailer types with model years 2021, 2024 and 2027. All of these GHG emission standards are primarily performance-based, expressed in grams emitted per unit of work, and would therefore provide companies with flexibility when choosing the methods and technologies to comply with them.

Heavy-duty pick-up trucks and vans

The proposed Amendments would include more stringent standards for CO2 emissions from heavy-duty pick-up trucks and vans, starting with model year 2021 vehicles. The emission standards would continue to be fleet average standards for all applicable vehicles of a company’s fleet and determined based on a work factor value, which is a function of the payload and towing capacities, and the four-wheel drive capability, of the vehicles in the fleet. Vehicle emission performance would be measured using prescribed test cycles on a chassis dynamometer.

Vocational vehicles

The proposed Amendments would include more stringent standards for CO2 vehicle emissions from vocational vehicles, starting with model year 2021 vehicles. The emission performance of vocational vehicles would be assessed using an enhanced version of the Greenhouse Gas Emissions Model (GEM), a simulation model developed by the U.S. EPA. (see footnote 9)

The CO2 vehicle emission standards for vocational vehicles would vary based on the type of operation that applies (i.e. urban, regional or multi-purpose operation). Also, the proposed Amendments would include alternative emission standards for certain classes of vocational vehicles with specific applications, such as emergency vehicles, motor homes, coach and school buses, waste collection vehicles, and concrete mixers. Finally, a leakage standard for refrigerants from air conditioning systems in vocational vehicles of the 2021 and later model years would be established, aligning it with the current leakage standard in the Regulations for heavy-duty pick-up trucks and vans, and tractors.

Tractors

The proposed Amendments would include more stringent CO2 vehicle emission standards aligned with the corresponding U.S. standards for transport tractors with a gross combined weight rating (GCWR) below 54 431 kg (120 000 lb), starting with model year 2021 vehicles. (see footnote 10) As described below, the proposed Amendments would also establish new CO2 vehicle emission standards for two sets of transport tractors with greater GCWRs that are aligned with similar standards in the United States while taking Canadian-specific considerations into account. The emission performance of all transport tractors would be assessed using an enhanced version of GEM.

Heavy line-haul tractors

Greater weights are permitted on Canadian roads by provincial and territorial jurisdictions compared to the weights allowed on U.S. roads. To account for this context, the proposed Amendments would establish new CO2 vehicle emission standards, starting with the 2021 model year, for a set of transport tractors with a GCWR of at least 54 431 kg (120 000 lb) and below 63 503 kg (140 000 lb), which are referred to as “heavy line-haul tractors.” Heavy line-haul tractors are designed for on-road applications that mainly involve hauling higher payloads over long distances on highways. The emission standards for heavy line-haul tractors would be less stringent than the standards for tractors with a GCWR below 54 431 kg (120 000 lb). These standards would take powertrain characteristics required for tractors with higher payload capacities into consideration and, at the same time, reflect improvements in technologies reducing GHG emissions that are appropriate for highway hauling applications in Canada, such as technologies that reduce aerodynamic drag and main engine idling. The emission standards for heavy line-haul tractors in Canada would be aligned with corresponding optional standards in the United States.

Heavy-haul tractors

The proposed Amendments would establish new CO2 vehicle emission standards, starting with the 2021 model year, for a set of transport tractors with a GCWR of 63 503 kg (140 000 lb) or more, which are defined as “heavy-haul tractors.” Heavy-haul tractors are designed for on-road specialty applications that typically involve hauling very high payloads over short distances. The emission standards for heavy-haul tractors in Canada would be less stringent than those for tractors with a GCWR below 63 503 kg (140 000 lb) and would be aligned with the corresponding standards in the United States. Given that greater weights are permitted on Canadian roads relative to the United States, and that standards are proposed for heavy line-haul tractors to account for this context, the proposed Amendments would introduce a Canadian-specific definition of a heavy-haul tractor. A heavy-haul tractor in Canada would be defined as any tractor with a GCWR of 63 503 kg (140 000 lb) or more, whereas a heavy-haul tractor in the United States is defined as any tractor with a GCWR of at least 54 431 kg (120 000 lb).

Auxiliary power units

Important GHG emission reductions could be realized from the operation of auxiliary power units (APUs) installed in transport tractors as an alternative to main engine idling. However, diesel-powered APUs are sources of particulate matter emissions; consequently, an increase in such emissions is likely to result from an increased use of APUs powered by diesel. For these reasons, the proposed Amendments would modify the On-Road Vehicle and Engine Emission Regulations to include standards for particulate matter emissions from tractors equipped with APUs.

Heavy-duty engines

The proposed Amendments would include more stringent standards for CO2 emissions from compression-ignition (diesel) engines designed for vocational vehicles and tractors, starting with model year 2021 engines. Also, the proposed Amendments would introduce alternative emission standards for some engines of the 2024 to 2026 model years. Specifically, a company that chooses to have its model year 2020 engines designed for vehicles with a GVWR above 8 845 kg (19 500 lb) conform to the standards applicable to model year 2021 engines would be allowed to comply with alternative emission standards with a lower level of stringency applicable to engines of model years 2024 to 2026. Engine emission performance would be measured using prescribed test cycles on an engine dynamometer.

Trailers

The proposed Amendments would introduce new standards for CO2 emissions attributable to trailers hauled by transport tractors. Standards for box van trailers would be set according to the type of box van trailer and take into account technologies installed on trailers to reduce GHG emissions, such as devices to reduce aerodynamic drag, low rolling resistance tires, lightweight components, and tire pressure monitoring and automatic tire inflation systems. (see footnote 11) The emission performance of box van trailers would be assessed using a prescribed equation with a set of coefficients for calculating CO2 emissions related to each of the technologies installed on trailers to reduce emissions. Also, the proposed Amendments would introduce design-based standards for non-box trailers and box van trailers that cannot be equipped with devices to reduce aerodynamic drag due to their distinct applications. The design-based standards would require that these trailers be equipped with low rolling resistance tires, and tire pressure monitoring or automatic tire inflation systems.

Compliance flexibilities

The proposed Amendments would offer several flexibilities to support compliance with the emission standards, which are described below.

CO2 emission credit system for heavy-duty vehicles and engines

The proposed Amendments would extend the existing system of CO2 emission credits to help meet overall environmental objectives in a manner that provides companies with compliance flexibility. The system would continue to allow companies to generate, bank and trade emission credits for heavy-duty vehicles and engines in the same manner as in the Regulations. (see footnote 12) The proposed Amendments would allow a company to be eligible for additional emission credits by means of enhanced credit multipliers for plug-in hybrid, electric or fuel cell vehicles of the 2021 to 2027 model years, if the company chooses to participate in the CO2 emission credit system. The proposed Amendments would also continue to allow a company to be eligible for additional emission credits, if the company incorporates innovative technologies into its vehicles or engines which generate reductions in CO2 emissions that cannot be measured during prescribed emission testing or through the use of GEM.

Exemptions for small volume companies

Under the Regulations, companies have the option to exempt their vocational vehicles and tractors of a given model year from complying with the CO2 vehicle emission standards, provided that they manufactured or imported fewer than 200 vocational vehicles and tractors for sale in Canada in 2011, and that they manufacture or import fewer than 200 vocational vehicles and tractors for sale in Canada on average over the three most recent consecutive model years. The proposed Amendments would simplify the requirements that companies manufacturing or importing vocational vehicles and tractors must satisfy to qualify for the existing exemption for small volume companies. The exemption from emission standards would also be expanded to include the engines installed in exempt vocational vehicles and tractors. Further, the proposed Amendments would contain a temporary, one-year exemption from the CO2 emission standards for small volume companies that manufacture or import fewer than 100 trailers for sale in Canada in 2018.

Transitional exemption for trailers

The proposed Amendments would incorporate a transitional exemption for companies that manufacture or import trailers of the 2018 to 2026 model years. This transitional exemption would allow a company to exempt a number of box van and non-box trailers from the CO2 emission standards under the two following conditions: (i) the number of box van or non-box trailers exempt must not exceed 20% of the total number of box van or non-box trailers that the company manufactures or imports for sale in Canada for a given model year; and (ii) this number must be lower than 25 in the case of box van trailers, and lower than 20 in the case of non-box trailers, for a given model year.

Fleet average standards for CO2 emissions attributable to box van trailers

Starting with the 2027 model year, the proposed Amendments would provide a company that manufactures or imports box van trailers with the flexibility of meeting a fleet average standard for CO2 emissions, for each of its fleets of trailers of a given model year, to help reduce the compliance burden associated with the new emission standards applicable to box van trailers.

Reporting requirements

The proposed Amendments would expand the scope of the annual end of model year report to manufacturers and importers of trailers used with transport tractors of the 2018 and later model years in Canada. The information that would be required to be included in this report concerning trailers has been streamlined to minimize additional administrative burden.

Additional amendments to other regulations under CEPA

Additional amendments are proposed to ensure consistency within the Department’s suite of on-road vehicle and engine emission regulations and to maintain alignment with U.S. regulatory provisions. In particular, to maintain alignment with the United States, the proposed Amendments would modify the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations to incorporate a provision that allows companies to be eligible for an expanded CO2 emission allowance for their full-size hybrid pick-up trucks of the 2017 to 2021 model years. Also, the proposed Amendments would modify the On-Road Vehicle and Engine Emission Regulations to update references to the U.S. Code of Federal Regulations, address discrepancies between the English and French versions, improve the clarity of the regulatory text, and enhance alignment with the U.S. regulatory provisions.

Regulatory and non-regulatory options considered

The Government of Canada currently regulates emissions from heavy-duty vehicles and engines under CEPA, and considered maintaining the regulatory status quo or updating the regulatory requirements to achieve stringent aligned Canada–U.S. standards.

Status quo approach

The Regulations establish the Phase 1 standards for heavy-duty vehicles and engines that begin in the 2014 model year and increase in stringency to the 2018 model year. In the absence of the proposed Amendments, the 2018 model year standards would apply to all heavy-duty vehicles and engines of the 2019 and later model years, and GHG emissions attributable to trailers would remain unregulated.

Without the proposed Amendments, vehicles and engines compliant with the Phase 1 standards (but not with the more stringent Phase 2 standards) and unregulated trailers would be allowed to be manufactured and imported for sale in Canada. Consequently, the additional GHG emission reductions and other benefits that are associated with maintaining alignment with the U.S. standards for vehicles, engines and trailers would not be fully realized. Further, the vehicle and trailer manufacturing sectors in Canada and the United States are highly integrated. Under a status quo approach, regulatory misalignment would create a non-level playing field for manufacturers and importers in Canada and the United States. It would allow Canadian companies that manufacture or import less expensive heavy-duty vehicles and trailers that do not meet the Phase 2 standards to place competitive pressure on other companies operating in Canada that would comply with the Phase 2 standards. For these reasons, this option was rejected.

Regulatory approach — Maintaining Canada–U.S. alignment

The vehicle and trailer manufacturing sectors in Canada and the United States are highly integrated, and there is a long history of collaboration in working towards the alignment of emission standards. The implementation of common Canada–U.S. standards for manufacturers and importers would provide regulatory certainty to facilitate investment decisions and minimize regulatory burden by allowing the use of common information, data and emission testing results to demonstrate compliance. Maintaining regulatory alignment with the Phase 2 standards is the option that is being proposed. This option would deliver important GHG emission reductions while preserving the competitiveness of the heavy-duty vehicle and trailer manufacturing sectors in Canada.

Benefits and costs

An analysis of the incremental impacts was conducted using business-as-usual (BAU) and regulatory scenarios. The costs and benefits of the proposed Amendments have been assessed in accordance with the Canadian Cost-Benefit Analysis Guide published by the Treasury Board Secretariat (TBS). (see footnote 13)

The expected impacts of the proposed Amendments are presented in the logic model (Figure 1) below. Compliance with the stricter limits in the proposed Amendments for GHG emissions from heavy-duty vehicles would lead to important GHG emission reductions and fuel savings by means of more effective vehicle emission technologies. These fuel savings are anticipated to result in reduced refuelling time for vehicle operators and additional opportunities for vehicle operators to transport goods and provide services. Compliance with the proposed Amendments would also result in health and environmental benefits for Canadians through improvements in air quality.

Figure 1: Logic model for the analysis of the proposed Amendments

Detailed information can be found in the surrounding text.

Analytical framework

Impacts are analyzed in terms of changes to vehicle technologies, emissions, and associated costs and benefits, in the regulatory scenario compared to the BAU scenario. The incremental impacts are the differences between the estimated levels of technologies and emissions, and the differences between the associated costs and benefits, in the two scenarios. To the extent possible, benefits and costs are quantified and monetized, and the monetized impacts are expressed in 2015 Canadian dollars. The first year of regulatory implementation is 2018. The analysis uses 2016 as the present value base year and ends in 2050. Unless otherwise indicated, the monetized impacts are analyzed in present value terms, applying a 3% discount rate for future years, in accordance with TBS guidance for environmental and health regulatory analyses. Other identified impacts have been considered qualitatively.

The Department conducted two distinct types of analysis that show the projected impacts of the Phase 2 standards from different perspectives. First, a model year analysis was conducted to estimate the costs and benefits associated with the operation of MY2018-2029 Phase 2 vehicles that are expected to be produced within the time frame of regulatory implementation. (see footnote 14) In addition, an alternative calendar year analysis was conducted to provide estimates of the annual impacts attributable to all Phase 2 vehicles over the analytical time frame, including the costs and benefits resulting from Phase 2 vehicles of the 2030 and later model years (i.e. the impacts associated with the ongoing implementation of the Phase 2 standards at full stringency). Results from both types of analysis are presented below.

The BAU scenario assumes that emission rates corresponding to the Phase 1 standards in the Regulations for model year 2018 (MY2018) engines, heavy-duty pick-up trucks and vans, vocational vehicles, and transport tractors would be extended indefinitely into the future with no change in stringency. (see footnote 15) Further, the BAU scenario assumes that standards would not be adopted for trailers used with transport tractors. (see footnote 16)

The regulatory scenario assumes that new GHG emission standards would be introduced for trailers used with transport tractors beginning in MY2018 and more stringent GHG emission standards would be introduced for the currently regulated categories of vehicles (heavy-duty pick-up trucks and vans, vocational vehicles, and transport tractors) and engines beginning in MY2021. These proposed emission standards, which are collectively referred to as the “Phase 2 standards,” would increase in stringency every three model years to MY2027 and maintain full stringency thereafter. Overall emission reductions are expected to increase over time as vehicles and trailers that are compliant with the Phase 2 standards become a larger percentage of the in-use fleet. It is projected that most on-road heavy-duty vehicles in Canada would be compliant with these standards by 2050 in the regulatory scenario.

In order to assess the impacts of the proposed Amendments, it was necessary to obtain Canadian estimates of future vehicle sales, fuel prices and monetary values for GHG emission reductions; to identify the technologies that manufacturers would likely adopt and the costs they would carry; and to then model future vehicle emissions, fuel consumption and distance travelled, with and without the proposed standards. The key sources of data that were used to complete these tasks, including the proposed U.S. Phase 2 rule and its associated regulatory impact analysis, are described throughout this analysis. (see footnote 17)

The emission standards from the final U.S. Phase 2 rule have been incorporated into the proposed Amendments. However, since the Department’s modelling of Canadian costs and benefits was conducted prior to the publication of the final U.S. rule, the following impact analysis considers the emission standards proposed by the U.S. EPA in July 2015 in a Canadian context and does not take into account changes made in the final U.S. rule. Relative to the proposed U.S. Phase 2 rule, the final rule includes CO2 emission standards that are more stringent for diesel engines and better tailored to vehicle application for vocational vehicles, as well as new standards for particulate matter emissions from APUs. The Department plans on updating its modelling to reflect the costs and benefits of these provisions in a Canadian context in the Regulatory Impact Analysis Statement published with the final Amendments in the Canada Gazette, Part II. It is anticipated that both cost and benefit estimates would increase as a result of these modelling updates, and that overall the regulatory proposal would lead to net benefits for Canadians.

Costs

The analysis of costs assumes full compliance with the Phase 2 standards proposed by the U.S. EPA in July 2015 (the “proposed Phase 2 standards”), which would impose upfront vehicle technology costs and ongoing tire maintenance costs on industry stakeholders. Compliance would lead to fuel savings, thereby encouraging additional driving. In turn, this “rebound-effect” driving is expected to lead to increases in accidents, congestion and noise caused by heavy-duty vehicles. To help ensure that compliance with the standards is maximized, there would also be some business administrative and government costs.

Vehicle technology and tire maintenance costs

The proposed Phase 2 standards were modelled to apply to all newly manufactured or imported trailers of the 2018 and later model years hauled by on-road transport tractors, and to all newly manufactured or imported on-road heavy-duty pick-up trucks and vans, vocational vehicles, tractors, and the engines used to power vocational vehicles and tractors, of the 2021 and later model years (“Phase 2 vehicles”). Phase 2 vehicles can be powered by gasoline, diesel, electricity, compressed natural gas, liquefied petroleum gas, or a combination of energy sources. Nonetheless, it is anticipated that Phase 2 vehicles would be predominately powered by gasoline and diesel engines. Consequently, this analysis assumes that all Phase 2 vehicles are powered by gasoline and diesel engines, including hybrid electric engine types.

Multiple Canadian sources of information on historical vehicle sales and registration, and vehicle sales forecasts, were used as inputs into the Motor Vehicle Emission Simulator (MOVES) and processed for forecasting, generating projected sales of heavy-duty vehicles for use in Canada for each required vehicle class and model year. These projections are summarized in Table 2 in the form of average sales for four periods covering model years 2018 to 2029. Future sales of trailers for use in Canada were projected using the historical sales ratio of trailers to tractors that was estimated to be about 1.6 to 1 in a study conducted for the Department by the International Council on Clean Transportation in 2016 (the 2016 ICCT study).

Table 2: Average sales of new vehicles per year by engine fuel type and vehicle category

Engine Fuel Type Vehicle Category MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029

Diesel

Tractors

25 431

26 070

24 919

25 650

Vocational vehicles

28 035

28 892

28 079

29 619

Heavy-duty pick-up trucks and vans

24 743

25 033

23 666

23 583

Gasoline

All categories

51 800

52 518

49 767

50 009

No engine

Trailers

40 722

41 745

39 900

41 071

Note: The estimated sales ratio of trailers to tractors of 1.6 to 1 from the 2016 ICCT study was used to project trailer sales.

Phase 2 vehicles, engines and trailers would be required to comply with GHG emission standards that increase in stringency from model years 2018 to 2027 for trailers, and from model years 2021 to 2027 for vehicles and engines, as previously described. Given that these proposed standards are primarily performance-based standards, manufacturers and importers in most cases would be free to choose what technology packages to adopt in order to comply with the standards and achieve emission reductions. However, this would not be the case for non-aerodynamic and non-box trailers, for which design-based standards are being introduced, requiring these trailers to be equipped with lower rolling resistance tires, and automatic tire inflation or tire pressure monitoring systems.

The proposed Phase 2 standards were modelled to align with the proposed GHG emission standards of the U.S. EPA for the 2018 and later model years, which would provide manufacturers with a common set of Canada–U.S. standards for heavy-duty vehicles, engines and trailers. As a result, the analysis assumes that manufacturers supplying the Canadian and American markets would likely adopt similar technologies to meet these emission standards. Table 3 presents a list of technologies that manufacturers are likely to choose to comply with the proposed Phase 2 standards.

Table 3: Key vehicle technologies expected to be adopted to meet the Phase 2 standards

Category of Vehicle Vehicle Technology

Tractors

  • engine efficiency improvements
  • lower rolling resistance tires
  • aerodynamic drag improvements
  • mass reduction
  • use of idle-reducing technologies, such as APUs
  • predictive cruise control
  • speed limiters
  • driveline, axle and transmission efficiencies
  • low friction lubricants
  • electric and high efficiency accessories
  • tire pressure monitoring systems
  • automatic tire inflation systems

Trailers

  • devices to reduce aerodynamic drag, such as side skirts, underbody and rear fairings, and gap reducers
  • lower rolling resistance tires
  • lightweight components
  • tire pressure monitoring systems
  • automatic tire inflation systems

Vocational vehicles

  • engine efficiency improvements
  • lower rolling resistance tires
  • axle and transmission efficiencies
  • mass reduction
  • workday idle reduction systems
  • hybrid applications
  • powertrain optimization
  • reduced air conditioning leakage
  • tire pressure monitoring systems
  • automatic tire inflation systems

Heavy-duty pick-up trucks and vans

  • engine efficiency improvements
  • lower rolling resistance tires
  • aerodynamic drag improvements
  • mass reduction
  • improved transmissions
  • reduced accessory loads
  • engine stop-start
  • powertrain hybridization

Based on engineering and market analyses, the U.S. EPA determined technology packages that were most likely to be adopted from existing and anticipated sets of vehicle, engine and trailer technologies. Next, the U.S. EPA projected the rates of adoption for these technology packages that would be necessary to comply with the Phase 2 standards, and estimated the redesign and application costs per vehicle for those technology packages. The U.S. EPA’s assessment of technologies that would be available for each vehicle, engine and trailer category, and the estimates of their relative effectiveness and costs, were guided by published research and independent assessments. For each vehicle, engine and trailer category, technologies that could be applied practically and cost-effectively have been identified.

The availability and increase in market penetration rates of technologies have been assessed by the U.S. EPA, together with effectiveness and costs, for each model year from 2018 to 2027. The technology costs are incremental to the costs in the BAU scenario (Phase 1). In the regulatory scenario, technologies and compliance options are applied to vehicles, engines and trailers in order for companies to meet the standards. The estimated incremental cost per vehicle or trailer is calculated on this basis. Given the integration of the Canada–U.S. vehicle and trailer manufacturing sectors, and the alignment with the proposed Phase 2 standards, the same technology choices and adoption rates assumed by the U.S. EPA are used in this analysis. This leads to similar costs per vehicle, adjusted for inflation and exchange rates, as those calculated in the analysis of the proposed U.S. Phase 2 rule.

The Department has also estimated increased maintenance costs associated with the installation of lower rolling resistance tires. It is expected that, when replaced, the lower rolling resistance tires would be replaced by equivalent performing tires throughout the lifetime of the vehicle or trailer. Therefore, the incremental increases in costs for lower rolling resistance tires would be carried throughout the lifetime of the vehicle or trailer at intervals consistent with current tire replacement intervals. Tire replacement intervals were chosen for each vehicle category in the Canadian heavy-duty fleet, based on total distance travelled per vehicle and approximations of the total number of tire replacements per vehicle, as follows: 75 000 kilometres (km) for heavy-duty pick-up trucks and vans, with an average of over two tire replacements per vehicle lifetime; 100 000 km for vocational vehicles, with an average of about nine tire replacements per vehicle lifetime; and 250 000 km for tractor-trailers, with an average of over five tire replacements per vehicle lifetime. The same maintenance costs assumed by the U.S. EPA in its analysis of the proposed Phase 2 rule, adjusted for inflation and exchange rates, are applied in this analysis at the selected tire replacement intervals.

Table 4 presents the estimates of the vehicle technology and tire maintenance costs carried by Canadian manufacturers and importers due to the adoption of the Phase 2 standards for MY2018-2029 vehicles.

Table 4: Vehicle technology and tire maintenance costs for MY2018-2029 Phase 2 vehicles (millions of dollars)

  MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029 MYs 2018-2029 (total)

Vehicle technology costs

Tractor-trailers

98

677

857

955

2,587

Vocational vehicles

0

198

276

487

961

Heavy-duty pick-up trucks and vans

0

137

218

240

594

Total

98

1,011

1,351

1,682

4,142

Tire maintenance costs

Tractor-trailers

25

34

29

26

114

Vocational vehicles

0

7

14

15

36

Heavy-duty pick-up trucks and vans

0

1

3

2

6

Total

25

43

45

44

156

Note: Costs are discounted to present value at 3% per year. Totals may not sum due to rounding.

Costs due to accidents, congestion and noise

In the context of heavy-duty vehicles, increased vehicle fuel efficiency is expected to lead to more intensive vehicle use. This increase in vehicle use in response to lower vehicle operating costs is referred to as the “rebound effect,” and is measured in vehicle-kilometres (distance) travelled. The rebound effect is expected to lead to more accidents, congestion and noise.

The rebound effect in this analysis refers to the fraction of gasoline and diesel savings expected to result from an increase in fuel efficiency that is offset by additional vehicle use. Overall, increases in annual distance travelled per vehicle in the regulatory scenario, in response to total vehicle operating cost savings due to fuel savings, are estimated to be small, averaging around 0.8% over the 2018–2050 period.

There are no identified Canadian estimates of heavy-duty vehicle costs per kilometre for accidents, congestion and noise. The Department used the central estimates from the analysis of the proposed U.S. Phase 2 rule for marginal accident, congestion and noise costs due to increases in vehicle distance travelled. The per-kilometre cost estimates were applied in this analysis to the Canadian estimates of distance travelled due to the rebound effect in order to obtain estimates of the overall value of accidents, congestion and noise for each vehicle category.

Table 5 presents the estimates of the accident, congestion and noise costs due to increases in distance travelled by MY2018-2029 vehicles over the 2018–2050 period.

Table 5: Additional costs due to accidents, congestion and noise for MY2018-2029 Phase 2 vehicles (millions of dollars)

  MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029 MYs 2018-2029 (total)

Costs due to accidents, congestion and noise

Tractor-trailers

53

56

49

46

205

Vocational vehicles

0

112

100

96

309

Heavy-duty pick-up trucks and vans

0

14

12

11

37

Total

53

182

162

153

550

Note: Costs are discounted to present value at 3% per year. Totals may not sum due to rounding.

Business administrative and government costs

The proposed Amendments would introduce incremental administrative costs for trailer manufacturers and importers, while reductions in administrative burden are expected for small volume companies that manufacture or import vocational vehicles and tractors. Business administrative costs are discussed in further detail in the section of this statement concerning the ‘“One-for-One” Rule.’ The annualized business administrative costs are estimated to be approximately $36,000 per year (undiscounted).

As a result of the addition of the CO2 emission standards for trailers, there would be federal government costs for additional compliance promotion, enforcement activities and regulatory administration. The annualized government costs are estimated to be up to $275,000 per year (undiscounted). No incremental government costs related to ongoing administration, enforcement activities or emission verification operations for the categories of heavy-duty vehicles and engines that are currently subject to the Phase 1 standards are expected. The existing implementation strategy for executing the GHG regulatory program for MY2014-2018 heavy-duty vehicles and engines would be extended to vehicles and engines of the 2019 and later model years.

Calendar year analysis of costs

In the regulatory scenario, the Phase 2 standards would be phased in starting with MY2018, reach full stringency with MY2027, and maintain this level of stringency until 2050. A calendar year analysis was conducted to estimate the costs attributable to all Phase 2 vehicles from 2018 to 2050. From this perspective, the costs are estimated at $15.4 billion, largely due to the additional costs of the vehicle technologies expected to be adopted to meet the Phase 2 standards. Table 6 shows the breakdown of these costs for all heavy-duty vehicles in select years and over the 2018–2050 period.

Table 6: Monetized costs for all Phase 2 vehicles in select years (millions of dollars)

  2020 2030 2040 2050 20182050 (total)

Vehicle technology costs

31

536

462

381

13,867

Tire maintenance costs

2

11

14

13

345

Costs due to accidents, congestion and noise

4

39

49

49

1,215

Total

37

587

524

443

15,427

Note: Costs are discounted to present value at 3% per year. Totals may not sum due to rounding.

Benefits

The Department adapted and employed the U.S. EPA’s peer-reviewed MOVES model to estimate the impact of the proposed Phase 2 standards in a Canadian context. (see footnote 18) Key data for Canadian vehicle operating conditions, fuel properties and vehicle characteristics were incorporated into MOVES. Emission and fuel consumption estimates were modelled in MOVES annually for the BAU and regulatory scenarios from 2018 to 2050 at the national level.

For the BAU scenario, emissions from heavy-duty vehicles and engines of the 2014 and later model years were assumed to meet the existing Phase 1 emission standards. Fuel quality parameters were estimated from reporting data collected annually from fuel refiners and importers under several departmental regulations. Historical vehicle sales and registration data used for the Phase 1 regulatory analysis were complemented by a key dataset purchased by the Department from R.L. Polk & Company, covering the Canadian heavy-duty vehicle fleet up to 2013. Forecasts of future vehicle sales were informed by a study conducted for the Department by Environ in 2015, while estimates of historical sales of trailers were obtained from the 2016 ICCT study.

For the regulatory scenario, vehicle emission rates were assumed to meet the Phase 2 standards for the 2018 and later model years, with increasing stringency over model years 2018 to 2027, as previously described. Vehicle fleet composition and size were assumed to be the same in the BAU and regulatory scenarios. In terms of vehicle fleet activity, the Canadian analysis used the same rebound effect estimates as those employed by the U.S. EPA in the analysis of the proposed U.S. Phase 2 rule; specifically, 5% for tractors; 10% for heavy-duty pick-up trucks and vans; and 15% for vocational vehicles. These rebound effect estimates were applied in MOVES to annual Canadian estimates of the baseline distance travelled by the vehicle fleet to project the increase in distance travelled attributable to the rebound effect in the regulatory scenario.

GHG emission reductions

The Regulations and proposed Amendments address emissions of three GHGs: carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). In order to comply with the Phase 2 standards, manufacturers are expected to adopt various technologies that would increase the fuel efficiency associated with the operation of on-road heavy-duty vehicles. As a result of this anticipated adoption of technologies improving fuel efficiency, the proposed Phase 2 standards would lead to significant gasoline and diesel savings for the owners and operators of on-road heavy-duty vehicles while generating important GHG emission reductions.

The Phase 2 standards are estimated to result in lifetime reductions of CO2e emissions for the cohort of vehicles in the model year analysis, increasing from 0.4 Mt for MY2018-2020 vehicles to 18.8 Mt for MY2027-2029 vehicles. (see footnote 19) The emission reductions from MY2018-2020 vehicles are fully attributable to the standards that would apply to MY2018-2020 trailers hauled by transport tractors. Overall, these standards are estimated to result in a cumulative reduction of around 41.5 Mt of CO2e emissions with respect to the portion of the lifetime operation of MY2018-2029 vehicles that occurs over the 2018–2050 period. The proposed Phase 2 standards would remain in full effect for vehicles of the 2030 and later model years. The average reduction in GHG emissions per model year during the lifetime operation of these vehicles would thus likely be similar to the average reduction of 6.3 Mt of CO2e emissions that have been estimated with respect to the lifetime operation of MY2029 Phase 2 vehicles that occurs over the 2018–2050 period.

Figure 2 presents the modelled trends in GHG emission reductions attributable to the Phase 2 standards with respect to the lifetime operation of MY2018-2029 heavy-duty vehicles over the 2018–2050 period. The increasing stringency of these standards, which occurs with model years 2021, 2024 and 2027, is clearly shown.

Figure 2: GHG emission reductions from MY2018-2029 Phase 2 vehicles over the 2018–2050 period

Bar Chart-Detailed information can be found in the surrounding text.

The estimated value of avoided damages from GHG emission reductions is based on the avoided climate change damages due to emissions of CO2, CH4 and N2O. The social cost of CO2, commonly referred to as the social cost of carbon, and the social costs of CH4 and N2O, are monetary measures of the global climate change damages expected from the atmospheric emissions in a given year of an additional tonne of CO2, CH4 and N2O, respectively. Alternatively, these social costs can be used to measure the value (benefits) of avoided damages from marginal decreases in emissions of CO2, CH4 and N2O. The central estimates of the social costs of CO2, CH4 and N2O have been recently updated and published by the Department. (see footnote 20) These central estimates are employed throughout this analysis to generate estimates of the value of the projected changes in emissions of these three GHGs.

The estimates of GHG emission reductions from MY2018-2029 Phase 2 vehicles are summarized in Table 7, along with the associated monetized benefits that have been calculated with the central estimates of the social costs of CO2, CH4 and N2O.

Table 7: GHG emission reductions from MY2018-2029 Phase 2 vehicles

  MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029 MYs 2018-2029 (total)

GHG emission reductions (Mt of CO2e)

Tractor-trailers

0.4

4.7

8.2

8.9

22.2

Vocational vehicles

0.0

1.3

2.6

4.5

8.4

Heavy-duty pick-up trucks and vans

0.0

1.5

4.0

5.5

10.9

Total

0.4

7.5

14.7

18.8

41.5

Benefits due to GHG emission reductions (millions of dollars)

Tractor-trailers

15

176

294

310

794

Vocational vehicles

0

49

92

155

296

Heavy-duty pick-up trucks and vans

0

54

139

186

379

Total

15

278

525

650

1,468

Note: Benefits are discounted to present value at 3% per year. Totals may not sum due to rounding.

Fuel savings

Manufacturers are expected to meet the proposed Phase 2 standards by adopting heavy-duty vehicle, engine and trailer technologies that reduce GHG emissions. Most of these technologies would achieve emission reductions by improving vehicle energy efficiency. MOVES was used to estimate these vehicle efficiency improvements due to technological improvements, and these energy savings were then converted to fuel savings and GHG emission reductions using standard conversion procedures.

For the cohort of vehicles in the model year analysis, technological improvements that are projected to be adopted to meet the Phase 2 standards would lead to fuel savings that increase from 0.1 billion litres for MY2018-2020 vehicles to 7.2 billion litres for MY2027-2029 vehicles. Similar to the GHG emission reductions from MY2018-2020 vehicles, fuel savings from these vehicles are fully attributable to the standards that would apply to MY2018-2020 trailers used with transport tractors. Altogether, the proposed standards are estimated to result in cumulative fuel savings of about 15.7 billion litres with respect to the portion of the lifetime operation of MY2018-2029 vehicles that occurs over the 2018–2050 period.

Fuel price forecasts for both gasoline and diesel were adopted from the Department’s Energy-Emissions-Economy Model for Canada (E3MC) for the years 2016 to 2035. The E3MC model is an end-use model that incorporates current Canadian projections of energy supply, and of petroleum and natural gas prices, from the National Energy Board. (see footnote 21) It uses this data to generate energy demand forecasts that are primarily based on consumer-choice modelling and historical relationships between macroeconomic and fuel price variables. Fuel prices beyond 2035 were projected based on the average growth rate of fuel prices for the years 2020 to 2035 in the E3MC model.

Pre-tax gasoline and diesel prices were used to generate estimates of the benefits due to fuel savings from MY2018-2029 vehicles, which are summarized in Table 8. (see footnote 22)

Table 8: Fuel savings from MY2018-2029 Phase 2 vehicles

  MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029 MYs 2018-2029 (total)

Fuel savings (millions of litres)

Tractor-trailers

147

1,721

2,993

3,259

8,120

Vocational vehicles

0

603

1,612

2,216

4,431

Heavy-duty pick-up trucks and vans

0

500

980

1,697

3,178

Total

147

2,824

5,585

7,173

15,729

Benefits from fuel savings (millions of dollars)

Tractor-trailers

107

1,238

2,032

2,086

5,462

Vocational vehicles

0

355

658

1,072

2,085

Heavy-duty pick-up trucks and vans

0

403

1,025

1,336

2,764

Total

107

1,996

3,714

4,493

10,311

Note: Fuel savings include reductions in both diesel and gasoline use, and are monetized using pre-tax fuel prices. Benefits are discounted to present value at 3% per year. Totals may not sum due to rounding.

Since the projected fuel savings shown above should be more than enough on their own to motivate further GHG emission reductions, reasons that help explain why vehicle owners are not expected to fully respond to future fuel savings and adopt more efficient technologies in the absence of the proposed Amendments have been considered. To begin, comprehensive and reliable information on the effectiveness and efficiency of new technologies is not always available, and buyers may as a result be reluctant to purchase heavy-duty vehicles equipped with these new technologies. Further, if buyers are not directly responsible for future fuel costs, then there are reduced (or “split”) incentives for them to invest in vehicles with technologies that improve fuel efficiency. Buyers may also underestimate future fuel savings due to uncertainty regarding future fuel prices and the effectiveness of new technologies in reducing fuel consumption. Altogether, costly information, split incentives and uncertainty concerning future market conditions are expected to limit the adoption of new technologies in the absence of further government intervention.

Additional benefits related to fuel savings

In addition to directly reducing the fuel expenditures of owners and operators of on-road heavy-duty vehicles, improved fuel efficiencies would generate two additional effects. All else being equal, increased fuel efficiencies would lead to less time spent refuelling for operators, while these improved efficiencies and less time spent refuelling would yield increases in the distance travelled by heavy-duty vehicles which, in turn, would increase the opportunities to transport goods and provide services with these vehicles.

Fuel savings are expected to reduce refuelling frequency, which is a time-saving benefit for vehicle operators. The calculation of refuelling time savings uses the reduced number of litres of fuel consumed in a given year, for each of the main vehicle categories, and divides that value by fuel tank volume and refill amount to obtain the number of refills. This result is multiplied by the time taken per refill to determine the time saved in that year. The inputs used in this calculation were taken from the analysis of the proposed U.S. Phase 2 rule, with the wage rate estimates by vehicle type being converted to 2015 Canadian dollars. Using these inputs, the benefits of refuelling time savings are expected to be $372 million for the MY2018-2029 fleet (Table 9).

The increase in travel associated with the rebound effect would produce additional benefits to vehicle owners and operators, which reflect the value of the increase in opportunities that would become accessible with additional travel. Given that vehicles are projected to make more frequent or longer trips when the cost of driving declines, the economic benefits from this supplementary travel are estimated to exceed supplementary expenditures for the fuel consumed.

The total travel benefits from increased distance travelled due to the rebound effect are estimated by adding the benefits realized from the additional fuel expenditures resulting from increased vehicle use, and the additional benefits (surplus) to vehicle owners and operators from increased distance travelled (“owner/operator surplus”). Owner/operator surplus was calculated by multiplying the estimated reduction in vehicle operating costs per kilometre by the projected increase in the annual number of kilometres driven. This result was then multiplied by one half, given that linear demand for vehicle-kilometres travelled was assumed. The value of benefits from increased vehicle use was estimated separately for each of the three main vehicle categories, as it depends on the extent of improvement in fuel efficiency.

Table 9: Additional benefits related to fuel savings from MY2018-2029 Phase 2 vehicles (millions of dollars)

  MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029 MYs 2018-2029 (total)

Benefits related to refuelling time savings

Tractor-trailers

5

59

95

96

256

Vocational vehicles

0

14

26

41

82

Heavy-duty pick-up trucks and vans

0

5

13

16

34

Total

5

79

134

154

372

Travel benefits

Tractor-trailers

161

170

148

140

619

Vocational vehicles

0

191

170

162

522

Heavy-duty pick-up trucks and vans

0

123

105

95

324

Total

161

484

423

397

1,465

Note: Benefits are discounted to present value at 3% per year. Totals may not sum due to rounding.

Calendar year analysis of benefits

From a calendar year point of view, from 2018 to 2050, the proposed standards could lead to a cumulative reduction of 137.4 Mt of CO2e emissions from all Phase 2 vehicles. In terms of fuel savings, these standards could lead to a cumulative reduction in fuel consumption from all Phase 2 vehicles of 52.2 billion litres from 2018 to 2050. Over this period, the total benefits for the calendar year analysis are projected to be $38.6 billion, mostly due to fuel savings ($30.0 billion), the value of increased travel opportunities ($3.4 billion) and the value of GHG emission reductions ($4.5 billion). The main results of the calendar year analysis of benefits are presented in Table 10.

Table 10: Benefits from all Phase 2 vehicles in select years

  2020 2030 2040 2050 2018–2050 (total)

Quantified benefits

GHG emission reductions (Mt of CO2e)

0.02

3.1

6.2

8.2

137.4

Fuel savings (millions of litres)

9

1 167

2 368

3 109

52 199

Monetized benefits (millions of dollars)

Benefits due to GHG emission reductions

1

115

204

231

4,482

Benefits from fuel savings

7

835

1,344

1,453

29,987

Reduced refuelling time benefits

0

21

34

34

744

Travel benefits

12

110

138

135

3,395

Total

20

1,081

1,720

1,852

38,609

Note: Fuel savings include reductions in both diesel and gasoline use and are monetized using pre-tax fuel prices. Benefits are discounted to present value at 3% per year. Totals may not sum due to rounding.

Other impacts considered qualitatively

The proposed Amendments would lead to additional impacts other than those analyzed above. These additional impacts are expected to be small in magnitude relative to the main benefits and costs and would most likely only change the net benefit results by small amounts. These additional impacts have thus been considered qualitatively in this analysis and are discussed below.

Additional reductions in GHG emissions

The proposed Amendments would establish a leakage standard for refrigerants from air conditioning systems in vocational vehicles, which would serve to minimize leaks from these systems and thereby reduce emissions of hydrofluorocarbons (HFCs) and other refrigerants. (see footnote 23) Although the impacts of reducing refrigerant emissions have not been quantified or monetized, these impacts are expected to add, to a small extent, to the overall benefits of GHG emission reductions estimated above.

Reductions in air pollutant emissions

The vehicles subject to the proposed Amendments are significant sources of air pollutants, such as fine particulate matter (PM2.5), nitrogen oxides (NOx), sulphur dioxide (SO2), volatile organic compounds (VOCs), carbon monoxide (CO) and other toxic substances. These pollutants affect ambient levels of secondarily formed PM2.5 and ozone. Exposure to ozone and PM2.5 (two principal sources of smog) is linked to adverse health impacts, including premature death, and chronic and short-term respiratory problems, as well as negative environmental effects on vegetation, buildings and visibility.

The vehicle, engine and trailer technologies that are expected to be adopted would lead to decreases in fuel consumption and hence reductions in emissions of smog-forming air pollutants, which would positively impact the health and environment of Canadians. In particular, auxiliary power units (APUs) are anticipated to be installed in transport tractors to provide power and climate control for drivers during extended idle operations. The operation of APUs as an alternative to main engine idling would lead to significant reductions in GHG emissions, as well as in emissions of NOx and VOCs. However, APUs powered by diesel would be sources of particulate matter emissions. To eliminate the unintended consequence of increased emissions of particulate matter from a more intensive use of APUs, the proposed Amendments would include a standard for these emissions from APUs installed in MY2021-2023 tractors, which would increase in stringency with MY2024 and later tractors.

Notwithstanding emissions of particulate matter from transport tractors equipped with diesel-powered APUs, the proposed Amendments would not directly regulate emissions of other air pollutants. Nevertheless, technologies that are anticipated to result in decreases in the fuel consumption of heavy-duty vehicles, such as decreases in total operating mass, aerodynamic drag and tire rolling resistance, as well as improvements in engine efficiency, would also lead to reductions in air pollutant emissions.

In order to assess the impacts of these anticipated changes, primary emissions of air pollutants were modelled for the BAU and regulatory scenarios in MOVES annually from 2018 to 2050 at the national level for NOx, SO2 and PM2.5. Due to the amount of time and modelling resources required to forecast VOC emissions from mobile sources, primary emissions of VOCs were modelled for the two scenarios in MOVES at the national level only for 2035.

Table 11 presents the changes in primary emissions of air pollutants from all Phase 2 vehicles in select years. Since the modelling of emissions was conducted early in the regulatory development process, prior to the proposal of standards for particulate matter emissions, the results below include projected increases in PM2.5 emissions, mainly due to increased APU use in tractors. It is expected that PM2.5 emissions would in fact decrease, given that the proposed Amendments incorporate standards for particulate matter emissions from APUs in alignment with the final U.S. Phase 2 rule.

Table 11: Changes in emissions of key air pollutants from all Phase 2 vehicles in select years

  2020 2025 2030 2035

Change in tonnes

NOx

23

–3 570

–7 090

–9 859

VOCs

–1 234

PM2.5

1

33

64

89

SO2

0

–6

–17

–29

CO

6

–1 007

–1 971

–2 701

Change relative to the BAU scenario

NOx

0%

–3%

–6%

–9%

VOCs

–8%

PM2.5

0%

1%

2%

2%

SO2

0%

–2%

–5%

–7%

CO

0%

0%

–1%

–1%

Note: VOC emissions were modelled at the national level only for 2035 due to the amount of time and modelling resources required to model these emissions from mobile sources. Increases in PM2.5 emissions are shown here because the modelling was conducted prior to the inclusion of the standards for particulate matter emissions from APUs installed in tractors.

Health benefits

Prior to modelling emissions in MOVES and the introduction of the standards for particulate matter emissions from APUs in tractors, a scenario analysis was conducted by the Department of the Environment and the Department of Health to evaluate the potential magnitude of the health benefits of the changes in primary emissions of air pollutants expected to result from the proposed Phase 2 standards. Specifically, the relative (percentage) changes in emissions of key air pollutants from the analysis of the proposed U.S. Phase 2 rule were used as inputs and applied to the baseline emissions in 2035 from all on-road heavy-duty vehicles operating in Canada within A Unified Regional Air-Quality Modelling System (AURAMS). AURAMS was then used by the Department to estimate the impacts on ambient air quality resulting from the interaction of changes in vehicle emissions with existing ambient air quality, daily weather and wind patterns.

The Department of Health then applied the Air Quality Benefits Assessment Tool (AQBAT) to estimate the health and economic impacts associated with the air quality projections generated by AURAMS for 2035. In particular, the modelled changes in ambient air quality levels were allocated to each Canadian census division and used as inputs for AQBAT. Based on changes in local ambient air quality, AQBAT estimated the likely reductions in average per capita risks for a range of health impacts known to be associated with air pollution exposure. These changes in per capita health risks were then multiplied by the affected populations in order to estimate the reduction in the number of adverse health outcomes across the Canadian population. AQBAT also applied economic values drawn from the available literature to estimate the average per capita economic benefits of lowered health risks.

Based on this scenario, it was estimated that air quality improvements in 2035 would, at a minimum, generate health benefits valued at $60 million. This value is expected to be an underestimate of the health benefits resulting from the proposed Phase 2 standards, given that the air quality modelling was not updated to reflect the standards for particulate matter emissions from APUs in tractors. In addition, this value would likely represent the minimum annual health benefits for years after 2035, as an increasing portion of the on-road heavy-duty vehicle fleet would be subject to the proposed Phase 2 standards in these years as a result of fleet turnover.

The estimate of potential health benefits in this scenario analysis has not been included in the main results because detailed emission results from MOVES were not used as inputs within AURAMS, and the standards for particulate matter emissions in the proposed Amendments were not incorporated into the air quality modelling. By not including the potential health benefits in the net benefit calculations, the total monetized benefits have been underestimated.

Environmental benefits

Air pollutants such as NOx, VOCs, SO2 and PM2.5 are precursors to the formation of secondary particulate matter and ground-level ozone, which impact air quality and the environment by damaging forest ecosystems, crops and wildlife. The deposition of excess nitrogen on surface waters may also lead to lake and stream eutrophication, which poses a threat to aquatic life. Finally, smog and deposition of suspended particles may impair visibility and result in the soiling of surfaces, respectively, thereby reducing the welfare of residents and recreationists, and potentially increasing cleaning expenditures.

The environmental benefits associated with the proposed Amendments were not monetized, as precise modelling of the air quality impacts has not been undertaken. Nonetheless, the environmental benefits associated with the reductions in air pollutant emissions are expected to be positive.

Impacts of fuel savings on the upstream petroleum sector

Canada has a small, open economy and is a price-taker in the world petroleum market. Any impact on the prices of petroleum or refined petroleum products resulting from reductions in domestic fuel consumption due to the proposed Amendments is expected to be negligible. Any reduced domestic consumption from fuel savings is expected to be redirected from domestic consumption to increased exports or result in decreased imports, with minimal incremental impacts on the upstream petroleum sector in Canada.

Summary of benefits and costs: Model year analysis

The model year analysis considered the impacts attributable to MY2018-2029 vehicles (i.e. those vehicles produced within the time frame of the regulatory implementation), and the portion of their lifetime operation occurring from 2018 to 2050. From this point of view, the costs of the proposed Phase 2 standards are estimated at $4.8 billion, largely due to the additional costs of the vehicle technologies expected to be adopted to meet these standards. The total benefits for this model year analysis are projected to be $13.6 billion, mostly due to fuel savings ($10.3 billion), the value of increased travel opportunities ($1.5 billion) and the value of GHG emission reductions ($1.5 billion). Overall, the net benefits for MY2018-2029 vehicles are estimated at $8.8 billion. The results of this model year analysis are summarized in Table 12.

Table 12: Statement of benefits and costs for the model year analysis

  MYs 2018-2020 MYs 2021-2023 MYs 2024-2026 MYs 2027-2029 MYs 2018-2029 (total)

Monetized impacts (millions of dollars)

Sectoral benefits

Pre-tax fuel savings

107

1,996

3,714

4,493

10,311

Refuelling time savings

5

79

134

154

372

Travel benefits

161

484

423

397

1,465

Societal benefits

GHG emission reductions

15

278

525

650

1,468

Total benefits

289

2,837

4,797

5,694

13,616

Sectoral costs

Vehicle technology costs

98

1,011

1,351

1,682

4,142

Tire maintenance costs

25

43

45

44

156

Business administrative costs

<1

<1

<1

<1

<1

Societal costs

Accidents, congestion and noise

53

182

162

153

550

Government costs

1

1

1

1

3

Total costs

177

1,237

1,558

1,879

4,852

Net benefits

111

1,600

3,239

3,814

8,765

Non-monetized impacts

GHG emission reductions (Mt of CO2e)

0.4

7.5

14.7

18.8

41.5

Fuel savings (millions of litres)

147

2 824

5 585

7 173

15 729

Impacts considered qualitatively

  • additional benefits due to reductions in GHG (refrigerant) emissions from air conditioning systems in vocational vehicles
  • positive health and environmental impacts as a result of reductions in air pollutant emissions from decreases in the amount of fuel consumed by all heavy-duty vehicles
  • minimal net impacts expected relating to the upstream petroleum sector

Note: Benefits and costs are discounted to present value at 3% per year. Totals may not sum due to rounding.

The time frame for assessing impacts in the model year analysis was 2018 to 2050. The emission reductions, fuel savings and related impacts resulting from MY2018-2029 Phase 2 vehicles during the portion of their lifetime operation that occurs after 2050 are not accounted for in the analysis. However, the magnitude of these impacts is anticipated to be relatively small, with benefits that outweigh the associated costs.

Summary of benefits and costs: Calendar year analysis

The calendar year analysis evaluated the annual impacts attributable to all Phase 2 vehicles from 2018 to 2050. The incremental costs of the technologies expected to be adopted over this time frame to meet the more stringent GHG emission standards are projected to be $13.9 billion. The total benefits are estimated at $38.6 billion, including fuel savings of $30.0 billion, GHG emission reductions valued at $4.5 billion and additional travel opportunities valued at $3.4 billion. Altogether, the net benefits for all heavy-duty vehicles are projected to be $23.2 billion. The annualized benefits, costs and net benefits are estimated to be $1.7 billion, $0.7 billion and $1.0 billion, respectively.

The time frame for the calendar year analysis was 2018 to 2050. Vehicle fleet turnover is expected to result in escalating GHG emission reductions and fuel savings over this period, as an increasing portion of the on-road fleet would meet more stringent emission standards. As a result of this turnover, the GHG emission reductions and fuel savings from Phase 2 vehicles are estimated to be considerably larger in 2050 than in 2030 (or earlier years), since a larger portion of the fleet would meet the Phase 2 standards in this later year. After 2050, as Phase 2 vehicles continue to replace pre-Phase 2 vehicles, benefits that outweigh the associated costs are expected over the lifetime of these new Phase 2 vehicles. In addition, the emission reductions and related benefits resulting from MY2018-2050 Phase 2 vehicles during the portion of their lifetime operation that occurs after 2050 are not accounted for in the analysis.

By 2030, the proposed Phase 2 standards are estimated to achieve cumulative reductions of CO2e emissions of 14.5 Mt. To attain these GHG emission reductions over the 2018–2030 period, industry stakeholders would carry sectoral costs of around $4.8 billion and realize sectoral benefits of about $5.0 billion. Overall, the anticipated reductions in GHG emissions over this period would be achieved at a sectoral (industry) cost per tonne of $329, and at an industry cost per tonne that takes sectoral benefits into account (i.e. a net industry cost per tonne) of –$16. However, the vast majority of the emission reductions from Phase 2 vehicles would take place after 2030, given that over 80% of the total distance travelled by these vehicles, from 2018 to 2050, is expected to occur after 2030. Over the 2018–2050 period, industry stakeholders would carry sectoral costs of about $14.2 billion and realize sectoral benefits of around $34.1 billion. The projected reductions in CO2e emissions of 137.4 Mt would be achieved over this period at an industry cost per tonne of $103, and at a net industry cost per tonne of –$145.

Table 13: Cost per tonne of GHG emissions reduced from Phase 2 vehicles

Type of Cost per Tonne Sectoral Costs (millions) GHG Emission Reductions (Mt of CO2e) Cost per Tonne of GHG Emissions Reduced

2018–2030

Industry cost per tonne

$4,770

14.5

$329

Net industry cost per tonne

–$230

14.5

–$16

2018–2050 (total)

Industry cost per tonne

$14,213

137.4

$103

Net industry cost per tonne

–$19,913

137.4

–$145

Note: Net industry costs are calculated by subtracting sectoral benefits from sectoral costs associated with all Phase 2 vehicles for the specified period. Benefits and costs are discounted to present value at 3% per year.

These cost-per-tonne results, as shown in Table 13, do not account for the value that society places on avoided climate change impacts or the timing of the emissions within the specified period.

Sensitivity analysis

The results of this analysis are based on key parameter estimates, which could be higher or lower than indicated by available evidence. Given this uncertainty, alternative impact estimates have been considered to assess their effects on the expected net benefit results. In particular, a worst-case scenario of both higher costs and lower benefits was considered. As shown in Table 14, there are expected net benefits using discount rates of 3% and 7%, and over a range of alternative impact estimates, which is evidence that the net benefit results are likely robust.

Table 14: Sensitivity analysis — Alternative impact estimates and discount rate (millions of dollars)

Alternatives (model year analysis) Benefits (B) Costs (C) Net Benefits (B–C) Benefit-cost Ratio (B/C)

95th percentile values for the GHG social costs

18,476

4,850

13,626

3.8

Central case (from Table 12)

13,616

4,850

8,767

2.8

Impacts discounted at 7% per year

7,314

3,321

3,993

2.2

Costs 40% higher than estimated

13,616

6,790

6,827

2.0

Benefits 40% lower than estimated

8,170

4,850

3,320

1.7

Costs 40% higher and benefits 40% lower

8,170

6,790

1,380

1.2

Note: Benefits and costs are discounted to present value at 3% per year, except in the cases in which a 7% rate is used. Totals may not sum due to rounding.

Further, the BAU scenario assumes that vehicle technologies that affect GHG emissions would remain unchanged over the analytical time frame (i.e. that the rate of technology change in the absence of the proposed Phase 2 standards is zero). However, this assumption does not account for any natural technological changes that could occur in the heavy-duty vehicle market in the absence of any regulations, or for any complementary technological changes that could occur in Canada either in direct response to the U.S. Phase 2 rule or in anticipation of the proposed standards in Canada. Under such circumstances, the incremental costs and benefits attributable to the proposed Phase 2 standards would be proportionately reduced, but net benefits for Canadians would still be expected.

Alignment with the final U.S. Phase 2 rule

The proposed Amendments incorporate the final Phase 2 standards, but the Department conducted its modelling of costs and benefits prior to the publication of the final U.S. Phase 2 rule. The analysis of the final rule of the United States indicates that the final Phase 2 program will realize approximately 10% more GHG emission reductions relative to the proposed program in the United States. (see footnote 24) Following the publication of the proposed Amendments in the Canada Gazette, Part I, the Department plans on updating the modelling of impacts, which will allow for a reassessment of the costs and benefits associated with the Phase 2 standards in a Canadian context. The Department anticipates that its estimates of costs and benefits would both increase following these modelling updates, and that this regulatory proposal would still lead to substantial net benefits for Canadians.

Distributional impacts

The heavy-duty vehicle and trailer manufacturing sectors in Canada are concentrated within Ontario, Quebec and the Prairies, with a range of smaller companies dispersed throughout Canada. The proposed Phase 2 standards would require manufacturers to comply by adopting GHG emission-reducing technologies in new vehicles. The analysis of the proposed standards assumes that manufacturers and importers would be able to pass on some of the costs related to technologies that reduce GHG emissions to vehicle purchasers because these increased purchase costs can be shown to be recovered relatively quickly through fuel savings. The distribution of these costs, across Canada, is expected to be consistent with the distribution of future purchases of new heavy-duty vehicles. It is not expected that there would be significant disproportional impacts on any region within Canada.

The proposed Phase 2 standards would increase costs for the Canadian on-road heavy-duty vehicle manufacturing and importing sectors. Similarly to the United States, the average vehicle production costs are expected to increase starting with MY2018 for trailers and with MY2021 for vehicles, and to reach their highest levels with MY2027 when the Phase 2 standards reach full stringency. Consequently, the technologies that are projected to be adopted to meet the proposed standards would be most costly in this model year, making MY2027 a practical point of reference to estimate an upper bound of the average costs per vehicle.

Table 15: Average incremental cost per MY2027 Phase 2 vehicle

Vehicle category Aggregate Incremental Costs for New MY2027 Vehicles MY2027 Vehicle Sales Forecast Average Incremental Cost per New Vehicle Average Cost Increase per New Vehicle

Tractors

$286,753,865

25,326

$11,322

8%

Vocational vehicles

$172,067,922

39,381

$4,369

4%

Heavy-duty pick-up trucks and vans

$83,739,049

63,247

$1,324

3%

Trailers

$50,138,528

40,522

$1,237

4%

Note: Only vehicle technology and tire maintenance costs are included in these calculations. Costs are discounted to present value at 3% per year. The estimated total costs per new vehicle that follow are used to calculate the average cost increases per vehicle: $150,000 for tractors; $120,000 for vocational vehicles; $50,000 for heavy-duty pick-up trucks and vans; and $30,000 for trailers.

Table 15 presents estimates of the average incremental costs and average cost increases per new MY2027 vehicle. The analysis of the proposed Phase 2 standards assumes that manufacturers would pass some of the technology costs on to their purchasers. Since these technologies are projected to also generate substantial fuel savings for vehicle owners and operators, the proposed standards are assumed not to impact sales of new heavy-duty vehicles and trailers. A complete analysis of price impacts is beyond the scope of this analysis; nonetheless, a simple payback analysis for the three vehicle categories is presented below.

Payback (cost recovery) analysis

All new heavy-duty vehicle purchasers are assumed to be businesses, not consumers, given that heavy-duty vehicles are generally used for commercial applications. Businesses are expected to evaluate costs and benefits in terms of the expected payback on investment costs. For simplicity, it is assumed that manufacturers pass all of the technology costs on to vehicle owners. Retail (post-tax) fuel prices, taken from the E3MC model, are used as these are the prices paid by vehicle owners. Due to regional variations in fuel taxes, post-tax fuel prices were calculated by weighting fuel sales by regional fuel demand and then adding regional taxes accordingly.

For the reasons mentioned above, MY2027 Phase 2 vehicles were selected for this payback analysis. The payback year is defined as the year of vehicle ownership during which cumulative sectoral benefits exceed cumulative sectoral costs. All calculations are for the average vehicle that drives the average number of kilometres each year. Sectoral costs have been marked up by 15% to account for extra charges that vehicle owners may have to pay, such as additional sales taxes and increases in insurance premiums, to purchase and operate vehicles equipped with new (and more expensive) vehicle technologies. Using a 3% discount rate, the estimated cost recovery is estimated to occur in years two, three and six of ownership for heavy-duty pick-up trucks and vans, tractor-trailers, and vocational vehicles, respectively. (see footnote 25)

“One-for-One” Rule

With the addition of trailer manufacturers and importers into the regulatory framework, the total number of regulated parties would rise. These new stakeholders would face new reporting requirements and associated administrative burden due to the proposed Amendments. In particular, the scope of the annual end of model year report that a company is required to submit under the Regulations would be expanded. In addition to heavy-duty vehicles and engines of the 2014 and later model years, the annual report would incorporate the trailers hauled by transport tractors that a company manufactures or imports for sale in Canada, starting with model year 2018 trailers. To comply with the new administrative requirements, regulated parties would have to collect data, maintain records, and prepare and submit reports pertaining to their trailer fleets and the CO2 emissions that result from the operation of trailers.

Conversely, the proposed Amendments are expected to result in minor decreases in administrative burden costs carried by small volume companies that manufacture or import vocational vehicles and tractors under the Regulations. The existing provisions that exempt the vocational vehicles and tractors manufactured or imported by small volume companies from the CO2 emission standards would be expanded to include the heavy-duty engines installed in these vehicles. Accordingly, the obligation for small volume companies to collect data, maintain records and prepare reports relating to the emissions from heavy-duty engines would be removed.

The “One-for-One” Rule would apply to this regulatory proposal. Given the estimated net increases in administrative burden, the proposed Amendments are considered an “IN” under the Rule, and they would require equal and offsetting reductions in administrative costs imposed by other federal regulations. (see footnote 26) As the proposed Amendments would modify the Regulations and would not introduce a new regulatory title, there would be no requirement to repeal existing regulations.

The total increase in annualized administrative costs for companies that manufacture or import trailers used with transport tractors is projected to be $26,000, while the total reduction in annualized administrative costs for small volume companies that import heavy-duty engines is estimated to be $1,000. Overall, a new net administrative burden of approximately $25,000 in annualized costs to industry stakeholders would be introduced. Net administrative impacts per stakeholder are projected to be, on average, six hours per year for about 175 stakeholders, corresponding to approximately $130 in annualized costs per company when allocated over the first 10 years of administrative cost impacts (2018–2027). (see footnote 27)

Small business lens

The small business lens applies to this regulatory proposal, since the trailer manufacturing and importing industry in Canada comprises many small companies and new standards for CO2 emissions attributable to the operation of trailers would be introduced. Based on data gathered as part of the 2016 ICCT study, it is estimated that, on average, the proposed Amendments would have an impact on 157 businesses that manufacture trailers in Canada or import them. More than 75% of these stakeholders are projected to be small businesses.

Most of the other companies to which the proposed Amendments would apply are Canadian subsidiaries or branches of multinational manufacturers and are not considered small businesses. Nevertheless, there are some independent businesses that import small numbers of heavy-duty vehicles and engines for the purpose of sale in Canada. There are also small independent manufacturers that import incomplete heavy-duty vehicles into Canada for the purpose of completing and selling these vehicles to the end user. It is projected that, on average, 11 businesses that manufacture or import vocational vehicles and tractors would qualify as small volume companies under the proposed Amendments. (see footnote 28)

Regulatory flexibility analysis statement

Two regulatory options have been considered for the purposes of analyzing possible avenues through which the costs projected to be imposed by the proposed Amendments on small businesses manufacturing or importing heavy-duty vehicles, engines and trailers could be minimized: an initial option and a flexible option.

Under the initial option, all trailers hauled by transport tractors would be subject to the proposed Amendments and required to fully comply with the CO2 emission standards, starting with model year 2018 trailers, with no flexibility offered to regulated parties. In addition, under this option, the proposed Amendments would not expand on the current exemption for small volume companies that manufacture or import vocational vehicles and tractors for sale in Canada.

Under the flexible option, a temporary exemption from the CO2 emission standards would be included for small volume companies that manufacture or import fewer than 100 trailers for sale in Canada in 2018. For businesses that manufacture or import trailers of the 2018 to 2026 model years, the flexible option would also incorporate a transitional exemption from the CO2 emission standards under two conditions. First, the number of box van or non-box trailers exempted by a company for a given model year must not exceed 20% of the total number of box van or non-box trailers that the company manufactures or imports for sale in Canada. Second, the number of trailers exempt by a company for a given model year must be less than 25 in the case of box van trailers, and less than 20 in the case of non-box trailers.

The flexible option would provide an exemption from the emission standards applicable to the engines installed in exempt vocational vehicles and tractors that are manufactured or imported for sale in Canada by small volume companies. This exemption would also result in eligible companies no longer being required to prepare full reports concerning the emission performance of these engines.

Fewer GHG emission reductions would be realized through the flexible option relative to the initial option. However, for a number of reasons, any incremental risk resulting from the flexible option is anticipated to be negligible. To begin, the temporary exemption for trailers would only apply to trailers manufactured in 2018, while the transitional exemption for trailers would not apply to the 2027 and later model years. Additionally, it is estimated that the temporary and transitional flexibilities for small volume trailer companies would each result in an exemption of less than 5% of applicable trailers. Concerning heavy-duty engines, it is projected that the flexibility for small volume companies would result in an exemption of less than 1% of all engines for a given model year.

The proposed Amendments would therefore address the vast majority of GHG emissions from the on-road heavy-duty vehicle sector while providing compliance flexibility to Canadian companies that manufacture or import heavy-duty engines and trailers, many of which are small businesses. Important information concerning these engines and trailers would still be collected, as all companies would be required to submit reports at the end of the model year to the Department under the flexible option.

Table 16: Regulatory flexibility analysis

  Initial Option (full compliance with proposed standards) Flexible Option (some trailers and engines exempt)
Annualized Value Present Value Annualized Value Present Value

Incremental costs: Trailers

$40,500,000

$471,000,000

$39,200,000

$456,000,000

Incremental costs: Vocational vehicles and tractors

$0

$0

–$340,000

–$4,000,000

Incremental costs: Trailers, vocational vehicles and tractors

$40,500,000

$471,000,000

$38,860,000

$452,000,000

Incremental cost per company (168 companies)

$240,000

$2,800,000

$230,000

$2,690,000

Risk considerations

Relative to the initial option, the flexible option is expected to result in a slight decrease in GHG emission reductions, as well as a loss of information related to emission performance for some heavy-duty engines and trailers in end of model year reports submitted to the Department. However, any additional risk introduced by the flexible option is anticipated to be low and manageable.

Note: The values in this table are the estimated incremental technology and administrative costs that would be carried by small volume manufacturers and importers of MY2018-2029 trailers, vocational vehicles and tractors. Costs are discounted to present value at 3% per year.

Table 16 provides estimates of the incremental technology and administrative costs under the initial and flexible options for the Canadian manufacturers and importers of MY2018-2029 trailers, vocational vehicles and tractors that would qualify for the exemptions in the proposed Amendments for small volume companies. The annualized costs per small volume company are estimated to be about $240,000 under the initial option and approximately $230,000 under the flexible option. Thus, the annualized cost savings under the flexible option are around $10,000 per company, for approximately 168 small volume companies.

It is anticipated that approximately 75% of all businesses qualifying for the exemptions in the proposed Amendments for small volume companies would be small businesses. The impacts of this regulatory proposal are not expected to affect the ability of these small businesses to operate in Canada, given the following:

  • (i) Small businesses, as a subset of all businesses qualifying for the exemptions in question, would tend to carry lower average (per business) costs than the average costs estimated to be carried by small volume companies, which are presented above in Table 16,
  • (ii) The total costs carried by a business would be proportional to the volume of heavy-duty vehicles, engines and trailers that it manufactures or imports, meaning that lower volume businesses would carry relatively lower costs,
  • (iii) All businesses would be able to pass some costs on to purchasers, since the proposed Amendments would create a level playing field for manufacturers and importers in Canada and the United States, and
  • (iv) The proposed Amendments would only apply to three types of non-box, speciality trailers hauled by on-road transport tractors (i.e. container chassis, flatbed and tanker trailers), and it is anticipated that small businesses manufacturing trailers in Canada or importing them would tend to focus their efforts on such trailers.

As indicated in the “Consultation” section below, the Department consulted throughout 2016 with the industry association representing Canadian manufacturers of trailers used with transport tractors to better understand the potential impacts of the proposed Amendments on the trailer sector in Canada, which is composed of many small businesses. The comments received from this key stakeholder were taken into consideration during the development of the proposed Amendments, prior to their publication in the Canada Gazette, Part I.

Consultation

On October 4, 2014, the Government of Canada published the Notice of intent to develop regulations to further reduce greenhouse gas emissions from on-road heavy-duty vehicles and engines in the Canada Gazette, Part I, which announced the intent to introduce more stringent GHG emission standards in Canada for heavy-duty vehicles and engines for model years following the 2018 model year. This notice specified that Canada’s proposed actions would build upon the Regulations and be aligned, where possible, with the U.S. regulatory approach. The publication of the notice initiated a public comment period that provided an opportunity to conduct early consultations with interested parties and seek input on the development of the proposed Amendments. This publication was followed by a stakeholder consultation (webinar) session in the fall of 2014 to clarify the notice of intent, initiate discussions on a preliminary regulatory approach and provide context to support formal comments related to the notice.

Altogether, the Department received eight submissions relating to the notice of intent from manufacturers, industry associations, a provincial government, a municipality and another federal government department. The comments received were generally supportive of further reducing GHG emissions from heavy-duty engines and vehicles through amendments to the Regulations that would align, where possible, with the emission standards of the U.S. EPA. Some industry stakeholders raised concerns relating to lead time prior to the implementation of the proposed Amendments. Others requested that the Department determine if there is a need to take Canadian-specific considerations into account in maintaining aligned standards with the United States, especially in regard to a subset of transport tractors.

On the subject of lead time, the Department is proposing to use the same phase-in schedule for the Phase 2 standards as the one established by the U.S. EPA. The proposed Amendments would apply to trailers for which the manufacture is completed on or after January 1, 2018. The Department will consider whether alternative phase-in options or compliance flexibility are warranted based on the timing of the publication of the final Amendments in the Canada Gazette, Part II. Further, the proposed Amendments would introduce additional GHG emission standards for transport tractors with heavier payload capacities.

General consultation session

On March 3, 2016, the Department held a general consultation session in Toronto, Ontario. The session was attended by approximately 30 participants, including representatives from provincial and territorial governments; other federal government departments; environmental non-governmental organizations; heavy-duty vehicle, engine and trailer manufacturers and importers; vehicle owners and operators; and the associations representing industry stakeholders. The session consisted of a presentation by departmental officials on key elements of the proposed Amendments, a general discussion concerning the proposed regulatory approach and several presentations by interested parties, including a presentation on the proposed U.S. Phase 2 rule by a representative from the U.S. EPA.

Other presentations at this session included a presentation of research conducted for the Department by the ICCT relating to trailer technologies in Canada, a presentation by the Department of Transport on work planned for a Canadian study pertaining to the “6×2” axle configuration, (see footnote 29) a presentation by the Canadian Trucking Alliance regarding a white paper that it published in January 2016 that outlines the viewpoints of vehicle owners and operators on the opportunities and challenges surrounding the proposed Phase 2 standards, and presentations by two associations representing Canadian manufacturers concerning their respective sector and views on the proposed regulatory approach.

Interested parties were invited to submit comments by April 4, 2016, on the regulatory approach that was proposed at the general consultation session. The Department received four written submissions: three from associations representing manufacturers and one from an environmental non-governmental organization. The comments indicated general support for the proposed Amendments, including for the addition of trailers used with transport tractors into the regulatory framework. Further, the comments included recommendations concerning the CO2 emission credit system for heavy-duty vehicles and engines, flexibility for vehicles and engines covered by a certificate of conformity to U.S. federal standards issued by the U.S. EPA, the exemption for small volume companies that manufacture or import vocational vehicles and tractors, and alignment of test procedures with those of the U.S. EPA.

Subsequent consultations prior to publication of the proposed Amendments in the Canada Gazette, Part I

Following the general consultation session on March 3, 2016, departmental officials met bilaterally throughout the remainder of 2016 with industry associations, provincial and territorial governments, an environmental non-governmental organization, and other federal government departments to discuss various technical aspects of the proposed Amendments. These follow-up consultations further supported the development of the proposed Amendments. For example, the Department consulted with the industry association representing Canadian manufacturers of trailers used with transport tractors. The feedback received was subsequently used to inform the Department of the estimated level of regulatory burden that the proposed Amendments would impose on Canadian trailer manufacturers and importers.

In 2016, departmental officials also worked with their U.S. EPA counterparts and consulted with key industry stakeholders to develop additional GHG emission standards for transport tractors with heavier payload capacities. This work and consultation were carried out in an effort to take Canadian-specific considerations into account, such as higher weight allowances and different rates of adoption for some technologies that reduce emissions. Stakeholders have expressed support for the elements of the regulatory proposal that are specific to Canada, and they will have additional opportunities for providing comments following the publication of the proposed Amendments in the Canada Gazette, Part I.

Regulatory cooperation

As with the development of the Regulations, the Department is working closely with the U.S. EPA to maintain a common Canada–U.S. approach to regulating GHG emissions from on-road heavy-duty vehicles. The approach of establishing emission standards and test procedures that are aligned with those of the federal emissions program of the EPA would build on the history of collaboration achieved under the Canada–United States Air Quality Agreement. This approach is also consistent with the goal of the Canada–United States Regulatory Cooperation Council of aligning regulatory approaches between the two countries, where possible.

The Department and the U.S. EPA have continued to share knowledge and collaborate closely in an effort to implement aligned regulatory standards and joint compliance verification programs, which help maximize efficiencies in the administration of the respective programs in the two countries. For instance, the Department, the Department of Transport and the National Research Council have worked collaboratively with the U.S. EPA during the development of the Phase 2 standards by conducting aerodynamic and chassis dynamometer emissions testing.

Also, given the objective of aligned regulatory standards, departmental officials and their U.S. EPA counterparts worked in 2016 to develop GHG emission standards for tractors with heavier payload capacities. As a result of this collaborative work, the EPA introduced optional GHG emission standards for heavy-haul tractors in the United States of the 2021 and later model years in its final Phase 2 rule. The U.S. optional standards served as a basis for the development of the standards in the proposed Amendments that reflect Canadian conditions for tractors with heavier payload capacities that would begin with the 2021 model year and increase in stringency with model years 2024 and 2027. These standards are specific to Canada and account for the allowance of heavier vehicles on Canadian roads relative to the United States. These standards would help ensure that the level of productivity of freight movement in Canada is maintained while making achievable improvements in the GHG emission performance of on-road heavy-duty vehicles.

Further, the Department works closely with the Department of Transport through its ecoTECHNOLOGY for Vehicles Program. (see footnote 30) As part of the work carried out through this program, federal officials undertake tests and evaluations of current and emerging vehicle technologies, such as alternative drive axle designs, advanced tire technologies and innovative devices to reduce aerodynamic drag. Program tests and evaluations take vehicle operating conditions in the Canadian context into consideration. Accordingly, these tests and evaluations have informed the development of the proposed Amendments, and outcomes of ongoing evaluations will inform the development of the final Amendments.

Rationale

The proposed Amendments would introduce a second phase of GHG emission standards for on-road heavy-duty vehicles. They would thus help protect Canadians and the environment from the effects of long-term climate change by further reducing GHG emissions from the heavy-duty vehicle sector in Canada. In particular, the preceding analysis estimates that the proposed Amendments would lead to CO2e emission reductions of approximately 41 Mt from heavy-duty vehicles (including engines and trailers) produced in model years 2018 to 2029 and to CO2e emission reductions of about 3 Mt from all heavy-duty vehicles in 2030. The proposed Amendments would therefore contribute to Canada’s international commitments made under the Paris Agreement relating to GHG emission reductions.

Given that the proposed Amendments would introduce regulatory standards that are harmonized with those of the U.S. EPA, they would preserve the competitiveness of the Canadian manufacturing industry. Canadian companies would continue to benefit from harmonized compliance and testing requirements, which are expected to lower the regulatory costs that they carry when compared to an unharmonized approach. This alignment would also provide long-term regulatory certainty to industry stakeholders by maintaining common legislative requirements in both Canada and the United States, allowing companies to take advantage of economies of scale.

The proposed Amendments would build on the history of collaboration achieved through the Canada–United States Air Quality Agreement in relation to the development of aligned vehicle and engine emission regulations and their coordinated implementation, and they are consistent with the goal of the Canada–United States Regulatory Cooperation Council of aligning regulatory approaches between the two countries, where possible. Also, the proposed Amendments are an important step towards delivering on Canada’s commitment in the United States–Canada Joint Statement on Climate, Energy, and Arctic Leadership, announced in March 2016, to implement a second phase of aligned GHG emission standards for on-road heavy-duty vehicles.

The consultations associated with the development of each regulatory proposal revealed a broad consensus that Canada’s regulatory emission standards for vehicles and engines should be based on alignment between Canada and the United States. Most stakeholders have identified that the general integrated nature of markets in Canada and the United States, and the implementation of aggressive national programs for vehicles and engines by the U.S. EPA, are two key elements supporting the argument that a policy of alignment with EPA programs is a logical approach for Canada to achieve important emission reductions in a cost-effective manner.

While the additional vehicle technology costs to meet the Phase 2 standards for heavy-duty vehicles produced in model years 2018 to 2029 are projected to be $4.1 billion, these costs would be more than offset by the benefits to the owners of these vehicles from reduced fuel consumption of about $10.3 billion. Overall, the implementation of the Phase 2 standards by means of the proposed Amendments is anticipated to generate substantial net benefits for Canadians through the adoption of new technologies that reduce fuel consumption and GHG emissions. The total costs associated with these standards for heavy-duty vehicles produced in model years 2018 to 2029 are projected to be $4.8 billion. The total benefits attributable to these vehicles are estimated at $13.6 billion, resulting in net benefits of about $8.8 billion for Canadians.

Strategic environmental assessment

The proposed Amendments have been developed under Canada’s Clean Air Regulatory Agenda (CARA). A strategic environmental assessment was completed for CARA and a public statement was issued in 2013. (see footnote 31) The assessment concluded that activities under CARA would support the Federal Sustainable Development Strategy’s goal of reducing levels of GHG emissions to mitigate the impacts of climate change.

Implementation, enforcement and service standards

The compliance promotion approach for the proposed Amendments would be similar to that taken for the Regulations, which includes maintaining a departmental website containing guidance material, and responding to inquiries from stakeholders. As a result of the new requirements that would apply to trailer manufacturers and importers, the Department plans to update its reporting system to accommodate the increase in the amount of information anticipated to be received from these regulated parties. The Department would continue to review and respond to submissions of evidence of conformity in a timely manner, in accordance with the response times set out in the guidance material for the Regulations. (see footnote 32)

Members of the regulated community would be responsible for ensuring that they are in compliance with the proposed Amendments, and for producing and maintaining evidence of conformity. To assist regulated parties in understanding the new requirements, the existing guidance material would be updated and posted on the Department’s website. The updated material would provide details on the more stringent GHG emission standards for vehicles and engines and the new GHG emission standards for trailers. This guidance material would also include more information to address frequently asked questions concerning evidence of conformity and the procedures to be followed when submitting required documents to the Department.

The proposed Amendments would come into force six months after the day on which they are registered. Implementation and enforcement actions would be undertaken by the Department in accordance with the Compliance and Enforcement Policy for CEPA (the Policy). (see footnote 33) As the proposed Amendments would be made under CEPA, enforcement officers would apply the Policy when verifying compliance with the regulatory requirements. The Policy sets out the range of possible enforcement responses to alleged violations. Following an inspection or investigation, when an enforcement officer discovers an alleged violation, the officer would choose the appropriate enforcement action based on the Policy.

Performance measurement and evaluation

Regulated parties would be required to submit end of model year reports to the Department concerning the performance of the heavy-duty vehicles, engines and trailers that they manufacture or import for each model year. Starting with the 2018 model year, these reports would be used to assess compliance with the proposed Amendments. These reports would indicate the emission standard and performance that apply to each vehicle, engine or trailer. The reports would also include the information required to calculate the number of applicable CO2 emission credits or deficits, including early action credits, and the balance of credits or deficits, as well as information on any transfers of credits between companies.

The information within the end of model year reports would be used to monitor compliance with regulatory requirements, measure and evaluate the performance of the proposed Amendments, and provide data to support enforcement activities, if required. The Department would also review evidence of conformity and other records that regulated parties must maintain. In addition, the Department would conduct tests of emissions from samples of heavy-duty vehicles, engines and trailers each year to verify compliance with the emission standards. The emission testing program would be largely based on current programs that are carried out to verify compliance with the Regulations and other regulations related to emissions from transportation sources.

Contacts

Stéphane Couroux
Director
Transportation Division
Energy and Transportation Directorate
Environmental Protection Branch
Department of the Environment
351 Saint-Joseph Boulevard, 13th Floor
Gatineau, Quebec
K1A 0H3
Telephone: 819-420-8020
Email: stephane.couroux@canada.ca

Joe Devlin
Policy Manager
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Strategic Policy Branch
Department of the Environment
200 Sacré-Cœur Boulevard, 10th Floor
Gatineau, Quebec
K1A 0H3
Email: ec.darv-ravd.ec@canada.ca

PROPOSED REGULATORY TEXT

Notice is given, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), that the Governor in Council, pursuant to sections 160 (see footnote c) and 162 of that Act, proposes to make the annexed Regulations Amending the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and Other Regulations Made Under the Canadian Environmental Protection Act, 1999.

Any person may, within 75 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or, within 60 days after the date of publication of this notice, file with that Minister a notice of objection requesting that a board of review be established under section 333 of that Act and stating the reasons for the objection. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Stéphane Couroux, Director, Transportation Division, Environmental Protection Branch, Department of the Environment, Gatineau, Quebec K1A 0H3 (fax: 819-938-4197; email: stephane.couroux@canada.ca).

A person who provides information to the Minister of the Environment may submit with the information a request for confidentiality under section 313 of that Act.

Ottawa, February 23, 2017

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and Other Regulations Made Under the Canadian Environmental Protection Act, 1999

Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations

1 (1) The definition heavy-duty completed vehicle in subsection 1(1) of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (see footnote 34) is repealed.

(2) The definition classe de service d’un véhicule in subsection 1(1) of the French version of the Regulations is repealed.

(3) The definitions A to B testing, CO2 family certification level, engine configuration, engine family, family emission limit, heavy-duty incomplete vehicle, heavy heavy-duty vehicle, medium heavy-duty vehicle and vehicle configuration in subsection 1(1) of the Regulations are replaced by the following:

A to B testing means testing performed in pairs to allow comparison of a vehicle A to a vehicle B, an engine A to an engine B or equipment A to equipment B, as the case may be. (essais A à B)

CO2 family certification level, in respect of a company’s heavy-duty engines, means the maximum CO2 emission level determined by the company for a fleet, which is greater than or equal to the maximum CO2 deteriorated emission level value calculated in accordance with subsection 32(1) for the engines that are included in the fleet. (niveau de certification de la famille applicable au CO2)

engine configuration means a unique combination of heavy-duty engine hardware and calibration that has an effect on measured emissions within an engine family. (configuration de moteur)

engine family, in respect of a company’s heavy-duty engines other than those referred to in section 25, means

  • (a) if they are covered by an EPA certificate, the grouping for which the EPA certificate was issued; or
  • (b) if they are not covered by an EPA certificate, the grouping determined in accordance with section 230 of Title 40, chapter I, subchapter U, part 1036, subpart C, of the CFR. (famille de moteurs)

family emission limit means

  • (a) in the case of CO2 emissions,
    • (i) in respect of a company’s vocational vehicles and incomplete vocational vehicles, the maximum CO2 emission level determined by the company for a fleet or subfleet, which is greater than or equal to the maximum CO2 emission rate calculated in accordance with subsection 26(2) for the vehicles that are included in the fleet or subfleet,
    • (ii) in respect of a company’s tractors and incomplete tractors, the maximum CO2 emission level determined by the company for a fleet or subfleet, which is greater than or equal to the maximum CO2 emission rate calculated in accordance with subsection 27(2) for the tractors and incomplete tractors that are included in the fleet or subfleet, and
    • (iii) in respect of a company’s trailers, the maximum CO2 emission level determined by the company for a subfleet, which is greater than or equal to the maximum CO2 emission rate calculated in accordance with subsection 33.1(3) for the trailers that are included in the subfleet; and
  • (b) in the case of N2O or CH4 emissions,
    • (i) in respect of a company’s Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles — other than those that are vocational vehicles — the maximum N2O or CH4 emission level determined by the company for a fleet or subfleet, which is greater than or equal to the maximum N2O or CH4 emission value calculated in accordance with section 24 for the vehicles or vehicle configurations that are included in the fleet or subfleet, and
    • (ii) in respect of a company’s heavy-duty engines, the maximum N2O or CH4 emission level determined by the company for a fleet, which is greater than or equal to the maximum N2O or CH4 deteriorated emission level value calculated using the applicable emission value determined in accordance with subsection 29(2) for the engine configurations that are included in the fleet. (limite d’émissions de la famille)

heavy-duty incomplete vehicle means a vehicle that consists of, at a minimum, a chassis structure, a powertrain and wheels in the state in which all of those components are to be part of a heavy-duty vehicle, but that requires further manufacturing operations to become a heavy-duty vehicle. (véhicule lourd incomplet)

heavy heavy-duty vehicle means

  • (a) for the 2014 to 2020 model years, a Class 8 heavy-duty vehicle; and
  • (b) for the 2021 model year and subsequent model years,
    • (i) a Class 6, Class 7 or Class 8 vocational vehicle that is equipped with a heavy heavy-duty engine, or
    • (ii) a Class 8 tractor. (gros véhicule lourd)

medium heavy-duty vehicle means

  • (a) for the 2014 to 2020 model years, a Class 6 or Class 7 heavy-duty vehicle; and
  • (b) for the 2021 model year and subsequent model years,
    • (i) a Class 6, Class 7 or Class 8 vocational vehicle that is equipped with a spark-ignition engine or with a compression-ignition engine other than a heavy heavy-duty engine, or
    • (ii) a Class 7 tractor. (véhicule mi-lourd)

vehicle configuration means, in respect of Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles, a configuration as defined in section 1819(d)(12)(i) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR. (configuration de véhicule)

(4) The definition dispositif antipollution auxiliaire in subsection 1(1) of the French version of the Regulations is replaced by the following:

dispositif antipollution auxiliaire Tout élément de conception qui perçoit la température, la vitesse du véhicule, le régime du moteur, le rapport de transmission, la dépression dans la tubulure ou tout autre paramètre dans le but d’activer, de moduler, de retarder ou de désactiver le fonctionnement de toute partie du système antipollution. (auxiliary emission control device)

(5) Paragraphs (a) to (e) of the definition averaging set in subsection 1(1) of the Regulations are replaced by the following:

  • (a) Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles other than those that are vocational vehicles;
  • (b) vocational vehicles that are light heavy-duty vehicles and incomplete vocational vehicles that are to become light heavy-duty vehicles;
  • (c) medium heavy-duty vehicles and heavy-duty incomplete vehicles that are to become medium heavy-duty vehicles;
  • (d) heavy heavy-duty vehicles and heavy-duty incomplete vehicles that are to become heavy heavy-duty vehicles;
  • (e) light heavy-duty engines and medium heavy-duty engines that are spark-ignition engines;

(6) Paragraph (h) of the definition averaging set in subsection 1(1) of the Regulations is replaced by the following:

  • (h) heavy heavy-duty engines. (groupe de calcul de points)

(7) The portion of the definition deterioration factor in subsection 1(1) of the Regulations before paragraph (b) is replaced by the following:

deterioration factor means the correction factor used to account for the variation, if any, between the maximum emission level during useful life and the undeteriorated emission level measured at the point corresponding to a maximum of 6 437 km (4,000 miles) of operation in relation to a vehicle that has stabilized emissions, and to a maximum of 125 hours of operation in relation to an engine that has stabilized emissions, determined in accordance with

  • (a) sections 1819(d)(5) and 1823(m) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, in the case of Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles other than those that are vocational vehicles;

(8) The portion of the definition element of design in subsection 1(1) of the Regulations before paragraph (a) is replaced by the following:

element of design means, in respect of a vehicle, engine or trailer,

(9) Paragraph (c) of the definition vocational tractor in subsection 1(1) of the Regulations is replaced by the following:

  • (c) a tractor of the 2020 model year or an earlier model year that has a GCWR of 54 431 kg (120,000 pounds) or more. (tracteur routier spécialisé)

(10) Paragraph (e) of the definition vocational vehicle in subsection 1(1) of the Regulations is replaced by the following:

  • (e) a Class 2B or Class 3 heavy-duty vehicle that is not subject to section 1819 of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR. (véhicule spécialisé)

(11) Subsection 1(1) of the Regulations is amended by adding the following in alphabetical order:

automatic tire inflation system means a pneumatically or electronically activated system that is installed on a vehicle or a trailer to maintain tire pressure at a preset level. (dispositif automatique de gonflage des pneus)

box van trailer means a trailer, other than a tank trailer, that has an enclosed cargo space that is permanently attached to the trailer chassis, has fixed sides and a fixed nose and roof. (remorque fourgon)

brake horsepower or BHP means a unit of brake power that is equal to 745.7 watts, expressed in horsepower. (BHP)

bus means a vocational vehicle that is designed to carry more than 15 passengers. (autobus)

coach bus means a bus that is designed for intercity passenger transport that is not equipped with features to accommodate standing passengers. (autocar)

concrete mixer means a vocational vehicle that is designed to mix and transport concrete in a revolving drum that is permanently mounted. (bétonnière)

dry box van trailer means a box van trailer other than a refrigerated box van trailer. (remorque fourgon non-frigorifique)

emergency vehicle means a vocational vehicle that is designed for use as an ambulance or fire truck. (véhicule d’urgence)

full-aero, in respect of a box van trailer, means one that does not have any of the following features:

  • (a) a belly box that occupies at least half of the length of both sides of the trailer between the centreline of the landing gear when it is extended and the leading edge of the front wheels;
  • (b) a drop-deck;
  • (c) a side-mounted, pull-out platform;
  • (d) steps for side-door access;
  • (e) a side lift gate;
  • (f) a rear hinged loading ramp;
  • (g) a rear lift gate or, for the 2023 model year or an earlier model year, a roll-up rear door. (totalement aérodynamique)

heavy-haul tractor means a tractor of the 2021 model year or a subsequent model year that has a GCWR of 63 503 kg (140,000 pounds) or more. (tracteur routier à chargement lourd)

long, in respect of a trailer, means more than 15.24 metres (50 feet) in length. (longue)

motor home means a vocational vehicle that is designed to provide temporary residential accommodations and that is equipped with at least four of the following features:

  • (a) a cooking appliance;
  • (b) a refrigerator;
  • (c) a self-contained toilet;
  • (d) a heating or air conditioning system;
  • (e) a potable water supply system, including a faucet and a sink;
  • (f) a 110-125 V electrical supply system or propane supply system. (autocaravane)

multi-purpose vocational vehicle means a vocational vehicle that is neither a regional vocational vehicle nor an urban vocational vehicle. (véhicule spécialisé à usages multiples)

non-aero box van trailer means

  • (a) a box van trailer that is at least 10.67 metres (35 feet) in length and that has a rear hinged loading ramp, a rear lift gate or, for the 2023 model year or an earlier model year, a roll-up rear door and at least one of the following features:
    • (i) a belly box that occupies at least half of the length of both sides of the trailer between the centreline of the landing gear when it is extended and the leading edge of the front wheels,
    • (ii) a drop-deck,
    • (iii) a side-mounted, pull-out platform,
    • (iv) steps for side-door access,
    • (v) a side lift gate; or
  • (b) a short refrigerated box van trailer that is less than 10.67 metres (35 feet) in length and has at least one of the features listed in subparagraphs (a)(i) to (v). (remorque fourgon non aérodynamique)

non-box trailer means a tank trailer, a trailer that is designed to carry a temporarily mounted shipping container, or a trailer that is designed to accommodate side- loading cargo onto a single, continuous load-bearing surface that runs from the rear of the trailer to at least the trailer’s kingpin and that may have curtains, straps or other devices to restrain or protect the cargo during transport, including side walls that do not completely enclose the cargo space. (remorque sans fourgon)

non-specified vocational vehicle means a vocational vehicle that either

  • (a) has one or more of the following characteristics:
    • (i) is designed to operate at low speeds that are unsuitable for normal highway operation,
    • (ii) has affixed components that are designed to perform work in an off-road environment; or
  • (b) has one or more of the following characteristics:
    • (i) an axle that has a GAWR of 13 154 kg (29,000 pounds) or more,
    • (ii) the capacity to attain a speed of not more than 53 km/h (33 miles per hour) over 3.2 km (2 miles),
    • (iii) the capacity to attain a speed of not more than 72 km/h (45 miles per hour) over 3.2 km (2 miles), an unloaded vehicle weight that is not less than 95% of its GVWR and no capacity to carry occupants other than the driver and operating crew,
    • (iv) a maximum speed that is limited to 87 km/h (54 miles per hour) by parameters that are not adjustable parameters as defined in subsection 15(1). (véhicule spécialisé non spécifique)

partial-aero, in respect of a box van trailer other than a non-aero box van trailer, means one that

  • (a) has at least one of the following features:
    • (i) a belly box that occupies at least half of the length of both sides of the trailer between the centreline of the landing gear when it is extended and the leading edge of the front wheels,
    • (ii) a drop-deck,
    • (iii) a side-mounted, pull-out platform,
    • (iv) steps for side-door access,
    • (v) a side lift gate; or
  • (b) in the case of a long dry box van trailer or a long refrigerated box van trailer, has a rear hinged loading ramp, a rear lift gate or, for the 2023 model year or an earlier model year, a roll-up rear door. (partiellement aérodynamique)

plug-in hybrid vehicle means a hybrid vehicle that has an energy storage system that can be recharged from an electric source that is not on board the vehicle. (véhicule hybride rechargeable)

refrigerated box van trailer means a box van trailer that has a self-contained heating, ventilation or air conditioning system. (remorque fourgon frigorifique)

regional vocational vehicle means a vocational vehicle that has any of the characteristics of a vehicle to which the regional duty cycle is applicable under section 510 of Title  40, chapter I, subchapter U, part 1037, subpart F, of the CFR. (véhicule spécialisé régional)

short, in respect of a trailer, means not more than 15.24  metres (50 feet) in length. (courte)

test group, in respect of a company’s Class 2B and Class 3 heavy-duty vehicles other than those that are vocational vehicles, and the company’s engines referred to in section 25, means

  • (a) if they are covered by an EPA certificate, the grouping for which the EPA certificate was issued; and
  • (b) if they are not covered by an EPA certificate, the grouping determined in accordance with section 1827 of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR. (groupe d’essai)

trailer means equipment with wheels that is designed to carry cargo and be pulled by a tractor when coupled to the tractor’s fifth wheel, excluding equipment that

  • (a) is less than 10.67 metres (35 feet) in length and has three axles;
  • (b) has four or more axles;
  • (c) has adjacent axles whose centrelines are at least 305 cm (120 inches) apart and, if the distance between the axles is adjustable, cannot be set closer together; or
  • (d) is intended to be used as a temporary or permanent residence or as an office or other work space. (remorque)

trailer family, in respect of a company’s trailers, means

  • (a) if they are covered by an EPA certificate, the grouping for which the EPA certificate was issued; or
  • (b) if they are not covered by an EPA certificate, the trailers within a grouping referred to in any of paragraphs 33.2(3)(a) to (d) that have the same family emission limit. (famille de remorques)

urban vocational vehicle means a vocational vehicle that has any of the characteristics of a vehicle to which the urban duty cycle is applicable under section 510 of Title  40, chapter I, subchapter U, part 1037, subpart F, of the CFR. (véhicule spécialisé urbain)

vehicle family, in respect of a company’s tractors or vocational vehicles, means

  • (a) if they are covered by an EPA certificate, the grouping for which the EPA certificate was issued; or
  • (b) if they are not covered by an EPA certificate, the grouping determined in accordance with section 230 of Title 40, chapter I, subchapter U, part 1037, subpart C, of the CFR. (famille de véhicules)

waste collection vehicle means a vocational vehicle that is designed primarily to collect, compact and transport solid waste or recyclable materials. (camion à ordures)

(12) Subsection 1(1) of the French version of the Regulations is amended by adding the following in alphabetical order:

classe de service S’entend de l’un des groupes de véhicules suivants :

  • a) les petits véhicules lourds;
  • b) les véhicules mi-lourds;
  • c) les gros véhicules lourds. (vehicle service class)

(13) Paragraph 1(4)(b) of the Regulations is replaced by the following:

  • (b) part 1037 of Title 40, chapter I, subchapter U, of the CFR, for the applicable standards and test procedures in the case of trailers and heavy-duty vehicles other than those referred to in paragraph (b.1);
  • (b.1) section 1819 of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, for the applicable standards and test procedures in the case of Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles other than those that are vocational vehicles; or

(14) Subsection 1(5) of the Regulations is replaced by the following:

Useful life

(5) Unless otherwise provided in these Regulations, useful life refers to the period of time or use in respect of which an emission standard applies to, as the case may be,

  • (a) Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles — other than those that are vocational vehicles — namely,
    • (i) for the 2014 to 2020 model years, 11 years or 193 121 km (120,000 miles), whichever occurs first, and
    • (ii) for the 2021 model year and subsequent model years, 15 years or 241 401 km (150,000 miles), whichever occurs first;
  • (b) Class 2B, Class 3, Class 4 and Class 5 vocational vehicles and incomplete vocational vehicles, namely,
    • (i) for the 2014 to 2020 model years, 10 years or 177 027 km (110,000 miles), whichever occurs first, and
    • (ii) for the 2021 model year and subsequent model years, 15 years or 241 401 km (150,000 miles), whichever occurs first;
  • (c) Class 6 and Class 7 vocational vehicles and incomplete vocational vehicles and Class 7 tractors and incomplete tractors, namely, 10 years or 297 728 km (185,000 miles), whichever occurs first;
  • (d) Class 8 vocational vehicles, incomplete vocational vehicles, tractors and incomplete tractors, namely, 10 years or 700 064 km (435,000 miles), whichever occurs first;
  • (e) heavy-duty engines, namely,
    • (i) in the case of spark-ignition engines and of light heavy-duty engines that are compression-ignition engines of the 2021 model year or a subsequent model year, 15 years or 241 401 km (150,000 miles), whichever occurs first, and
    • (ii) in any other case, the same useful life as that which is set out for the type of engine in question in section 2 of Title 40, chapter I, subchapter C, part 86, subpart A, of the CFR, for emissions of oxides of nitrogen (NOX), hydrocarbon (HC), particulate matter (PM) and carbon monoxide (CO); and
  • (f) trailers, namely 10 years.

(15) Section 1 of the Regulations is amended by adding the following after subsection (8):

Length — trailer

(8.1) The length of a trailer corresponds to the outer dimensions of its load-carrying structure, excluding any aerodynamic devices and any heating, ventilating or air conditioning systems.

Number of axles

(8.2) The number of axles on a vehicle or trailer includes any axles that can be used to carry the loaded or unloaded weight of the vehicle or the trailer while in motion, including lift axles.

(16) Subsections 1(10) and (11) of the Regulations are replaced by the following:

Spark-ignition engines

(10) For the purposes of these Regulations, a sparkignition engine of the 2020 model year or an earlier model year that is regulated as a diesel engine under part 86 of Title 40, chapter I, subchapter C, of the CFR, must conform to the standards, test procedures and calculation methods applicable to a compression-ignition engine.

Compression-ignition engines

(11) For the purposes of these Regulations, a compression-ignition engine of the 2020 model year or an earlier model year that is regulated as an Otto-cycle engine under part 86 of Title 40, chapter I, subchapter C, of the CFR, must conform to the standards, test procedures and calculation methods applicable to a spark-ignition engine.

Various engines

(12) For the purposes of these Regulations, the following engines must conform to the standards, test procedures and calculation methods applicable to a compression-ignition engine:

  • (a) a gas turbine heavy-duty engine; and
  • (b) a heavy-duty engine that is not a spark-ignition engine or compression-ignition engine.

Multi-fuel, dual fuel and flexible fuel engines

(13) For the purposes of these Regulations, a multi-fuel, dual fuel or flexible fuel engine that operates on gasoline is considered to be a gasoline-fueled engine.

2 Sections 1.1 and 2 of the Regulations are replaced by the following:

Concurrent sale

1.1 For the purposes of these Regulations, a vehicle, engine or trailer of a given model year that is sold in Canada is considered to be sold concurrently in Canada and in the United States if a vehicle, engine or trailer of that model year that belongs to the same test group, vehicle family, engine family or trailer family is offered for sale in the United States during the 365 days preceding

  • (a) in the case of a vehicle, engine or trailer that is imported into Canada, the day on which it is imported; and
  • (b) in the case of a vehicle, engine or trailer that is manufactured in Canada,
    • (i) the day on which the national emissions mark is applied to the vehicle, engine or trailer, if known, or
    • (ii) if the day referred to in subparagraph (i) is not known, the day on which the main assembly of the vehicle or the manufacture of the engine or trailer, as the case may be, was completed.

Purpose

Purpose

2 The purpose of these Regulations is to reduce greenhouse gas emissions that are attributable to heavy-duty vehicles, heavy-duty engines and trailers by establishing standards and test procedures that are aligned with the federal requirements of the United States.

3 Paragraphs 3(a) to (c) of the Regulations are replaced by the following:

  • (a) prescribed classes of vehicles, engines and equipment for the purposes of section 149 of the Act;
  • (b) requirements respecting the conformity of heavy-duty vehicles, heavy-duty engines and trailers to greenhouse gas emission standards for the purposes of section 153 of the Act;
  • (c) requirements respecting the conformity of fleets of heavy-duty vehicles, heavy-duty engines and trailers to greenhouse gas emission standards and other requirements for carrying out the purposes of Division 5 of Part 7 of the Act; and

4 Section 4 of the Regulations is replaced by the following:

Model year

4 (1) A year that is used by a manufacturer as a model year must,

  • (a) if the period of production of a model of heavy-duty vehicle, heavy-duty engine or trailer does not include January 1 of a calendar year, correspond to the calendar year during which the period of production falls; or
  • (b) if the period of production of a model of heavy-duty vehicle, heavy-duty engine or trailer includes January 1 of a calendar year, correspond to that calendar year.

Period of production

(2) The period of production of a model of heavy-duty vehicle, heavy-duty engine or trailer must include only one January 1.

5 The heading before section 5 of the Regulations is replaced by the following:

Prescribed Classes of Vehicles, Engines and Equipment

6 (1) Subsection 5(3) of the Regulations is replaced by the following:

Trailers

(2.1) Trailers are prescribed for the purposes of the definition equipment in section 149 of the Act.

Exclusion

(3) The prescribed classes of vehicles, engines and trailers set out in subsections (1), (2) and (2.1), respectively, do not include heavy-duty vehicles, heavy-duty engines or trailers that are to be exported and that are accompanied by written evidence establishing that they will not be sold for use or used in Canada.

(2) Section 5 of the Regulations is amended by adding the following after subsection (5):

Transportation within Canada — trailers

(6) For the purposes of section 152 of the Act, the prescribed equipment is trailers that are manufactured in Canada, other than trailers that will be used in Canada solely for purposes of exhibition, demonstration, evaluation or testing.

7 Subsection 6(1) of the Regulations is replaced by the following:

Application

6 (1) A company that intends to apply a national emissions mark to a vehicle, engine or trailer must apply to the Minister to obtain an authorization.

Contents of application

(1.1) The application must be signed by a person who is authorized to act on behalf of the company and must include

  • (a) the name and street address of the company’s head office and, if different, its mailing address;
  • (b) the classes of vehicles, engines or trailers for which the authorization is requested;
  • (c) the street address of the location at which the national emissions mark will be applied to the vehicles, engines or trailers;
  • (d) the street address where the records referred to in section 59 will be maintained; and
  • (e) information demonstrating that the company is capable of verifying compliance with the standards set out in these Regulations.

8 Section 7 of the Regulations is replaced by the following:

National emissions mark

7 (1) The national emissions mark is the mark set out in the schedule.

Dimensions

(2) The national emissions mark must be at least 7 mm in height and 10 mm in width.

Location

(3) Subject to subsection 11(2), the national emissions mark must be displayed

  • (a) on or immediately beside the U.S. information label referred to in paragraph 53(d);
  • (b) on or immediately beside the compliance label applied in accordance with the Motor Vehicle Safety Regulations; or
  • (c) on or immediately beside the compliance label referred to in section 8, 9 or 9.1, as the case may be.

Requirements

(4) The national emissions mark must be displayed on a label that

  • (a) is permanently applied to the vehicle, engine or trailer;
  • (b) is resistant to or protected against any weather condition; and
  • (c) bears inscriptions that are legible, indelible and that are indented, embossed or in a colour that contrasts with the background of the label.

Authorization number

(5) Subject to subsection (6), a company that has been authorized to apply the national emissions mark must display the authorization number assigned by the Minister in figures that are at least 2 mm in height, immediately below or to the right of the national emissions mark.

Exception

(6) A company is not required to display its authorization number on a vehicle or trailer if

  • (a) the company is authorized by the Minister of Transport to apply the national safety mark in accordance with the Motor Vehicle Safety Act;
  • (b) the company applies both the national emissions mark and the national safety mark to the vehicle or the trailer; and
  • (c) the national emissions mark is displayed on the same label as the national safety mark.

9 (1) Paragraph 8(1)(a) of the Regulations is replaced by the following:

  • (a) subject to subsection (2), the statement “THIS ENGINE CONFORMS TO ALL APPLICABLE STANDARDS PRESCRIBED BY THE HEAVY-DUTY VEHICLE AND ENGINE GREENHOUSE GAS EMISSION REGULATIONS IN EFFECT FOR MODEL YEAR [MODEL YEAR] / CE MOTEUR EST CONFORME À TOUTES LES NORMES QUI LUI SONT APPLICABLES EN VERTU DU RÈGLEMENT SUR LES ÉMISSIONS DE GAZ À EFFET DE SERRE DES VÉHICULES LOURDS ET DE LEURS MOTEURS EN VIGUEUR POUR L’ANNÉE DE MODÈLE [ANNÉE DE MODÈLE]”;

(2) Paragraph 8(1)(i) of the Regulations is replaced by the following:

  • (i) the engine family’s or test group’s identification code, as the case may be;

(3) Subsection 8(1) of the Regulations is amended by striking out “and” at the end of paragraph (l), by adding “and” at the end of paragraph (m) and by adding the following after paragraph (m):

  • (n) in the case of a heavy-duty engine that is exempted under subsection 17(1.1), the engine’s model year and a statement, in both official languages, that the engine is exempted under that subsection.

(4) Paragraph 8(4)(b) of the Regulations is replaced by the following:

  • (b) the statement referred to in section 1819(k)(8)(iv) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR.

10 (1) Paragraph 9(1)(a) of the Regulations is replaced by the following:

  • (a) subject to subsection (2), the statement “THIS VEHICLE CONFORMS TO ALL APPLICABLE STANDARDS PRESCRIBED BY THE HEAVY-DUTY VEHICLE AND ENGINE GREENHOUSE GAS EMISSION REGULATIONS IN EFFECT FOR MODEL YEAR [MODEL YEAR] / CE VÉHICULE EST CONFORME À TOUTES LES NORMES QUI LUI SONT APPLICABLES EN VERTU DU RÈGLEMENT SUR LES ÉMISSIONS DE GAZ À EFFET DE SERRE DES VÉHICULES LOURDS ET DE LEURS MOTEURS EN VIGUEUR POUR L’ANNÉE DE MODÈLE [ANNÉE DE MODÈLE]”;

(2) Paragraphs 9(1)(e) to (h) of the Regulations are replaced by the following:

  • (e) the type of vehicle, in both official languages, referred to in paragraph 18(3)(a) and, if it is an emergency vehicle, a statement to that effect;
  • (f) the vehicle family’s or test group’s identification code, as the case may be;
  • (g) except in the case of a tractor or vocational vehicle of the 2021 model year or a subsequent model year, the identification of the vehicle’s emission control system;
  • (h) in the case of a vocational vehicle referred to in subsection 26(3), the vehicle’s model year and a statement, in both official languages, that the vehicle is exempted under that subsection;

(3) Paragraph 9(1)(j) of the Regulations is replaced by the following:

  • (j) in the case of a vocational vehicle or a tractor that is exempted under subsection 17(1), the vehicle’s or tractor’s model year and a statement, in both official languages, that the vehicle or the tractor is exempted under that subsection; and

(4) Subsection 9(2) of the Regulations is replaced by the following:

National emissions mark

(2) Paragraph (1)(a) does not apply when a national emissions mark is applied to the vehicle or when the information referred to in paragraph (1)(h) or (j) is set out on the label.

11 The Regulations are amended by adding the following after section 9:

Trailers not certified by EPA

9.1 (1) Trailers that are imported or manufactured in Canada — other than EPA-certified trailers that bear the U.S. information label referred to in subparagraph 53(d)(i) — must bear a compliance label that sets out the following information:

  • (a) subject to subsection (2), the statement “THIS TRAILER CONFORMS TO ALL APPLICABLE STANDARDS PRESCRIBED BY THE HEAVY-DUTY VEHICLE AND ENGINE GREENHOUSE GAS EMISSION REGULATIONS IN EFFECT FOR MODEL YEAR [MODEL YEAR] / CETTE REMORQUE EST CONFORME À TOUTES LES NORMES QUI LUI SONT APPLICABLES EN VERTU DU RÈGLEMENT SUR LES ÉMISSIONS DE GAZ À EFFET DE SERRE DES VÉHICULES LOURDS ET DE LEURS MOTEURS EN VIGUEUR POUR L’ANNÉE DE MODÈLE [ANNÉE DE MODÈLE]”;
  • (b) the name of the trailer’s manufacturer;
  • (c) the trailer’s model year if a national emissions mark is applied to it;
  • (d) subject to subsection (3), the trailer’s date of manufacture;
  • (e) the type of trailer, in both official languages; and
  • (f) the trailer family’s identification code.

National emissions mark

(2) Paragraph (1)(a) does not apply when a national emissions mark is applied to the trailer.

Date of manufacture

(3) The trailer’s date of manufacture may, instead of being set out on the label, be permanently affixed, engraved or stamped on the trailer.

12 (1) The portion of section 10 of the Regulations before paragraph (a) is replaced by the following:

Requirements

10 Any label that is required by these Regulations, other than a U.S. information label referred to in paragraph 53(d), must

(2) Paragraph 10(b) of the Regulations is replaced by the following:

  • (b) be permanently affixed to the vehicle or the trailer and, in the case of an engine, be permanently affixed to an engine part that is necessary for normal engine operation and does not normally require replacement during the engine’s useful life;

13 (1) The portion of subsection 11(1) of the Regulations before paragraph (a) is replaced by the following:

Requirements

11 (1) If a company alters a heavy-duty vehicle or heavy-duty incomplete vehicle that was in conformity with these Regulations in such a manner that its stated type of vehicle referred to in paragraph 18(3)(a) is no longer accurate, or if the company alters the emission control system, alters an engine configuration in a way that might affect emissions or replaces any of the components of the vehicle that might alter the value of a parameter used in the GEM computer simulation model, the company must

(2) Paragraph 11(1)(b) of the English version of the Regulations is replaced by the following:

  • (b) ensure that the vehicle, once altered, conforms to all applicable standards;

(3) The portion of paragraph 11(1)(c) of the Regulations before subparagraph (i) is replaced by the following:

  • (c) apply to the altered vehicle an additional label that sets out the following information:

(4) Subparagraphs 11(1)(c)(iii) and (iv) of the Regulations are replaced by the following:

  • (iii) the national emissions mark, and
  • (iv) the type of vehicle referred to in paragraph 18(3)(a), if it differs from the type set out on the compliance label referred to in section 9 or if the regulatory subcategory that is set out on the U.S. emission control information label is changed, as the case may be; and

(5) Subsection 11(2) of the Regulations is replaced by the following:

National emissions mark

(2) The national emissions mark referred to in subparagraph (1)(c)(iii) must be displayed on a label applied to the vehicle immediately beside any previously applied label on which the national emissions mark appears or beside the U.S. emission control information label.

14 The heading “Heavy-duty Vehicles of the 2014 Model Year” before section 12 of the Regulations is replaced by the following:

Application

15 The heading before section 13 of the Regulations is replaced by the following:

January 1, 2018

12.1 These Regulations apply to trailers for which the manufacture is completed on or after January 1, 2018.

Engine Installed in Heavy-duty Vehicle

Vocational vehicles or tractors

12.2 (1) Subject to subsection (2), every vocational vehicle or tractor must be equipped with a heavy-duty engine that meets the following standards:

  • (a) the standards set out in the On-Road Vehicle and Engine Emission Regulations that are applicable to heavy-duty engines as defined in subsection 1(1) of those Regulations that are of the same model year as the heavy-duty vehicle in which the engine is installed or one model year earlier or any model year subsequent to that model year; and
  • (b) the standards set out in these Regulations that are applicable to engines that are of the same model year as the heavy-duty vehicle in which the engine is installed or one model year earlier or any model year subsequent to that model year.

Election

(2) A company may elect not to comply with subsection (1) for a vocational vehicle or tractor if the vocational vehicle’s or tractor’s engine

  • (a) has never been rebuilt and has not reached the end of its useful life; or
  • (b) has accumulated less than 160 935 km (100,000 miles) of operation since its original date of manufacture or less than three years have passed since that date.
Heavy-duty Vehicles, Heavy-duty Engines and Trailers Covered by EPA Certificate

16 (1) The portion of subsection 13(1) of the Regulations before paragraph (a) is replaced by the following:

Conforming to EPA certificate

13 (1) Subject to subsections (4), (7.1) and (8), a heavy-duty vehicle, heavy-duty engine or trailer of a given model year that is covered by an EPA certificate and bears the U.S. information label referred to in paragraph 53(d) must conform to the certification and in-use standards referred to in the EPA certificate instead of to the following standards, whichever apply:

(2) Paragraphs 13(1)(b) to (d) of the Regulations are replaced by the following:

  • (b) sections 14 and 15 and, as the case may be, subsection 26(1), (1.1), (1.2) or (1.3) for vocational vehicles and incomplete vocational vehicles;
  • (c) sections 14 to 16 and subsection 27(1), (1.1) or (1.2)for tractors and incomplete tractors;
  • (d) sections 14 and 15 and subsection 29(1) and, as the case may be, section 30 or subsection 31(1), (2) or (5) for heavy-duty engines; and
  • (e) section 15 and, as the case may be, subsection 16.1(1) or 33.1(1) or (2) for trailers.

(3) Subsection 13(2) of the Regulations is replaced by the following:

Exceeding N2O or CH 4 emission standard — vehicles

(2) Subsections 20(3) to (6) apply in respect of a company’s Class 2B or Class 3 heavy-duty vehicles or cab-complete vehicles — other than those that are vocational vehicles — that are covered by an EPA certificate and, as the case may be, conform to a N2O or CH4 family emission limit that exceeds the N2O or CH4 emission standard applicable to their model year under these Regulations.

(4) Paragraphs 13(4)(a) and (b) of the French version of the Regulations are replaced by the following:

  • a) au moins 50 % de ses véhicules spécialisés et véhicules spécialisés incomplets et au moins 50 % de ses tracteurs routiers et tracteurs routiers incomplets de l’année de modèle 2015 si le nombre de véhicules lourds vendus au Canada par l’entreprise est de plus de 500;
  • b) au moins 75 % de ses véhicules spécialisés et véhicules spécialisés incomplets et au moins 75 % de ses tracteurs routiers et tracteurs routiers incomplets de l’année de modèle 2016 si le nombre de véhicules lourds vendus au Canada par l’entreprise est de plus de 500;

(5) Section 13 of the Regulations is amended by adding the following after subsection (7):

Exceeding N2O or CH 4 emission standard — engines

(7.1) Subsections 29(4) to (7) apply in respect of a company’s heavy-duty engines that are covered by an EPA certificate if

  • (a) the engines conform to a N2O or CH4 family emission limit that exceeds the N2O or CH4 emission standard applicable to engines of their model year under these Regulations; and
  • (b) the number of engines referred to in paragraph (a) that are sold in Canada by the company
    • (i) is between 101 and 1000 and is more than twice the number of engines sold in the United States that are of the same engine family, or
    • (ii) is more than 1000 and exceeds the number of engines sold in the United States that are of the same engine family.

(6) Subparagraphs 13(8)(b)(i) and (ii) of the Regulations are replaced by the following:

  • (i) is between 101 and 1000 and is more than twice the number of engines sold in the United States that are of the same engine family, or
  • (ii) is more than 1000 and exceeds the number of engines sold in the United States that are of the same engine family.

(7) Subsection 13(9) of the Regulations is replaced by the following:

Subsection 153(3) of Act

(9) For the purposes of subsection 153(3) of the Act, the provisions of the CFR that are applicable under an EPA certificate to a vehicle, engine or trailer referred to in subsection (1) correspond to the standards referred to in paragraphs (1)(a) to (e).

17 Section 14 of the Regulations is amended by adding the following after subsection (2):

Exception — emergency vehicles

(2.1) Despite subsection (2), an emergency vehicle may be equipped with a defeat device if the device is one that is activated during emergency response operations to maintain speed, torque or power in either of the following circumstances:

  • (a) the emission control system is in an abnormal state, or
  • (b) the device acts to maintain the emission control system in a normal state.

18 Sections 15 and 16 of the Regulations are replaced by the following:

Definition of adjustable parameter

15 (1) In this section, adjustable parameter means a device, system or element of design that is capable of being adjusted to affect the emissions or performance of a heavy-duty vehicle, heavy-duty engine or trailer during emission testing or normal in-use operation, but does not include a device, system or element of design that is permanently sealed by the manufacturer or that is inaccessible using ordinary tools.

Standards

(2) A heavy-duty vehicle, heavy-duty engine or trailer that is equipped with adjustable parameters must conform to the applicable standards under these Regulations for any specification within the adjustable range.

Fairings

(3) A tractor’s roof fairing and a trailer’s rear fairing are not adjustable parameters for the purposes of this section.

Air Conditioning Systems

Standards

16 A heavy-duty vehicle or heavy-duty incomplete vehicle that is equipped with an air conditioning system must conform to

  • (a) section 1819(h) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR in the case of a Class 2B or Class 3 heavy-duty vehicle or cab-complete vehicle of any model year that is not a vocational vehicle or incomplete vocational vehicle; or
  • (b) section 115(e) of Title 40, chapter I, subchapter U, part 1037, subpart B, of the CFR in the case of a vocational vehicle or incomplete vocational vehicle of the 2021 model year or a subsequent model year or a tractor or incomplete tractor of any model year.
Non-box Trailers and Non-aero Box Van Trailers

Standards

16.1 (1) For the 2018 model year and subsequent model years, every non-box trailer and non-aero box van trailer must be equipped with

  • (a) an automatic tire inflation system or tire pressure monitoring system for each wheel that is mounted on an axle; and
  • (b) tires with a tire rolling resistance level of
    • (i) in the case of non-box trailers
      • (A) 6 kg/t or less for trailers of the 2018 to 2020 model years, or
      • (B) 5.1 kg/t or less for trailers of the 2021 model year and subsequent model years, and
    • (ii) in the case of non-aero box van trailers
      • (A) 5.1 kg/t or less for trailers of the 2018 to 2020 model years, or
      • (B) 4.7 kg/t or less for trailers of the 2021 model year and subsequent model years.

Determination of tire rolling resistance level

(2) The tire rolling resistance level must be determined in accordance with the procedures described in sections 515(b) and 520(c) of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR.

19 The heading before section 17 of the Regulations is replaced by the following:

Small Volume Companies

20 (1) The portion of subsection 17(1) of the Regulations before paragraph (a) is replaced by the following:

Exemption

17 (1) A company may elect, for a given model year, not to comply with the standards set out in subsection 26(1), (1.1), (1.2) or (1.3) or 27(1), (1.1) or (1.2), as the case may be, for its tractors and vocational vehicles and, in the case of tractors and vocational vehicles that are covered by an EPA certificate, the company may elect not to comply with subsection 13(4), if the following conditions are met:

(2) Paragraph 17(1)(b) of the Regulations is replaced by the following:

  • (b) the number of tractors and vocational vehicles of the model year in question that it manufactured or imported for sale in Canada is less than 200; and

(3) Subsections 17(2) to (4) of the Regulations are replaced by the following:

Exemption — engines

(1.1) A company that makes an election referred to in subsection (1) may also make one or both of the elections set out in one of the following paragraphs in respect of the engines of a given model year that are installed in its tractors and vocational vehicles referred to in subsection (1) if it reports the election in its end of model year report in accordance with section 48:

  • (a) in the case of heavy-duty engines other than those that are covered by an EPA certificate, not to comply with
    • (i) the N2O and CH4 emission standards set out in section 29, or
    • (ii) the CO2 emission standards set out in section 30 or subsection 31(1), (2) or (5); and
  • (b) in the case of heavy-duty engines that are covered by an EPA certificate, not to comply with subsections 13(7.1) or (8).

CO2 emission credit system

(2) A company that makes an election referred to in subsection (1) or (1.1) must not participate in the CO2 emission credit system set out in sections 34 to 47 for the model year in question.

Merger

(3) If a company merges with one or more companies after the day on which these Regulations come into force, the company that results from the merger may make an election referred to in subsection (1) or (1.1) if the combined number of vocational vehicles and tractors manufactured or imported for sale in Canada by the merged companies under each of paragraphs (1)(a) and (b) is less than 200.

Acquisition

(4) If a company acquires one or more companies after February 22, 2013, it must

  • (a) in the case where the company made an election referred to in subsection (1) or (1.1) before the acquisition, recalculate the number of vocational vehicles and tractors that it manufactured or imported for sale in Canada under each of paragraphs (1)(a) and (b) by adding to that number the number of tractors and vocational vehicles that were manufactured or imported for sale in Canada by each of the acquired companies and report the total number in its first end of model year report following the acquisition; and
  • (b) in the case where the company makes an election referred to in subsection (1) or (1.1) after the acquisition, calculate the number of vocational vehicles and tractors that it manufactured or imported for sale in Canada under each of paragraphs (1)(a) and (b) by adding to that number the number of tractors and vocational vehicles that were manufactured or imported for sale in Canada by each of the acquired companies.

21 The Regulations are amended by adding the following after section 17:

Exemption — trailers manufactured before January 1, 2019

17.1 A company may elect not to comply with the standards set out in section 16.1 or 33.1, as the case may be, for its trailers for which the manufacture is completed before January 1, 2019, if

  • (a) in 2018 it manufactured or imported in total less than 100 trailers for sale in Canada; and
  • (b) it reports the election in its end of model year report in accordance with section 48.

Exemption — trailers of the 2018 to 2026 model years

17.2 For trailers of the 2018 to 2026 model years, a company may elect not to comply with the standards set out in section 16.1 or 33.1, as the case may be, for a certain number of its trailers of a given model year if

  • (a) the number of trailers in respect of which it makes the election does not exceed
    • (i) in the case of box van trailers, 20% of the number of box van trailers of the model year in question that it manufactured or imported for sale in Canada or 25, whichever is less, and
    • (ii) in the case of non-box trailers, 20% of the number of non-box trailers of the model year in question that the company manufactured or imported for sale in Canada or 20, whichever is less; and
  • (b) it reports the election in its end of model year report in accordance with section 48.

22 (1) Subsection 18(1) of the Regulations is replaced by the following:

Definition of fleet — heavy-duty vehicles and heavy-duty engines

18 (1) In these Regulations, fleet refers to the heavy-duty vehicles and heavy-duty engines that a company imports or manufactures in Canada for the purpose of sale in Canada to the first retail purchaser and that are grouped in accordance with this section for the purpose of conforming to sections 21 to 23 or for the purpose of participation in the CO2 emission credit system set out in sections 34 to 47.

(2) The portion of subsection 18(3) of the Regulations before paragraph (b) is replaced by the following:

Fleet composition

(3) A company may group heavy-duty vehicles or heavy-duty engines of the same type and model year into more than one fleet as follows:

  • (a) in the case of heavy-duty vehicles and subject to subsections (4) to (7), each fleet is composed solely of the vehicles referred to in one of the following subparagraphs or clauses, as the case may be:
    • (i) subject to section 25 and subsection 26(6), Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles other than those that are vocational vehicles,
    • (ii) for vocational vehicles and incomplete vocational vehicles of the 2014 to 2020 model years,
      • (A) those vehicles that are or are to become light heavy-duty vehicles,
      • (B) those vehicles that are or are to become  medium heavy-duty vehicles, or
      • (C) those vehicles that are or are to become heavy heavy-duty vehicles,
    • (iii) for multi-purpose vocational vehicles and incomplete vocational vehicles that are to become multi-purpose vocational vehicles of the 2021 model year or a subsequent model year that are equipped with a compression-ignition engine,
      • (A) those vehicles that are or are to become light heavy-duty vehicles,
      • (B) those vehicles that are or are to become medium heavy-duty vehicles, or
      • (C) those vehicles that are or are to become heavy heavy-duty vehicles,
    • (iv) for regional vocational vehicles and incomplete vocational vehicles that are to become regional vocational vehicles of the 2021 model year or a subsequent model year that are equipped with a compression-ignition engine,
      • (A) those vehicles that are or are to become light heavy-duty vehicles,
      • (B) those vehicles that are or are to become medium heavy-duty vehicles, or
      • (C) those vehicles that are or are to become heavy heavy-duty vehicles,
    • (v) for urban vocational vehicles and incomplete vocational vehicles that are to become urban vocational vehicles of the 2021 model year or a subsequent model year that are equipped with a compression-ignition engine,
      • (A) those vehicles that are or are to become light heavy-duty vehicles,
      • (B) those vehicles that are or are to become medium heavy-duty vehicles, or
      • (C) those vehicles that are or are to become heavy heavy-duty vehicles,
    • (vi) for multi-purpose vocational vehicles and incomplete vocational vehicles that are to become multi-purpose vocational vehicles of the 2021 model year or a subsequent model year that are equipped with a spark-ignition engine,
      • (A) those vehicles that are or are to become light heavy-duty vehicles, or
      • (B) those vehicles that are or are to become medium heavy-duty vehicles,
    • (vii) for regional vocational vehicles and incomplete vocational vehicles that are to become regional vocational vehicles of the 2021 model year or a subsequent model year that are equipped with a spark-ignition engine,
      • (A) those vehicles that are or are to become light heavy-duty vehicles, or
      • (B) those vehicles that are or are to become medium heavy-duty vehicles,
    • (viii) for urban vocational vehicles and incomplete vocational vehicles that are to become urban vocational vehicles of the 2021 model year or a subsequent model year that are equipped with a spark-ignition engine,
      • (A) those vehicles that are or are to become light heavy-duty vehicles, or
      • (B) those vehicles that are or are to become medium heavy-duty vehicles,
    • (ix) Class 7 low-roof tractors and incomplete tractors,
    • (x) Class 7 mid-roof tractors and incomplete tractors,
    • (xi) Class 7 high-roof tractors and incomplete tractors,
    • (xii) for Class 8 tractors and incomplete tractors of the 2014 to 2020 model years,
      • (A) those with a low-roof that are equipped with a day cab,
      • (B) those with a low-roof that are equipped with a sleeper cab,
      • (C) those with a mid-roof that are equipped with a day cab,
      • (D) those with a mid-roof that are equipped with a sleeper cab,
      • (E) those with a high-roof that are equipped with a day cab, or
      • (F) those with a high-roof that are equipped with a sleeper cab,
    • (xiii) for Class 8 tractors and incomplete tractors of the 2021 model year or a subsequent model year that have a GCWR of less than 54 431 kg (120,000 pounds),
      • (A) those with a low-roof that are equipped with a day cab,
      • (B) those with a low-roof that are equipped with a sleeper cab,
      • (C) those with a mid-roof that are equipped with a day cab,
      • (D) those with a mid-roof that are equipped with a sleeper cab,
      • (E) those with a high-roof that are equipped with a day cab, or
      • (F) those with a high-roof that are equipped with a sleeper cab,
    • (xiv) for Class 8 tractors and incomplete tractors of the 2021 model year or a subsequent model year that have a GCWR of 54 431 kg (120,000 pounds) or more, other than heavy-haul tractors and incomplete tractors that are to become heavy-haul tractors,
      • (A) those with a low-roof that are equipped with a day cab,
      • (B) those with a low-roof that are equipped with a sleeper cab,
      • (C) those with a mid-roof that are equipped with a day cab,
      • (D) those with a mid-roof that are equipped with a sleeper cab,
      • (E) those with a high-roof that are equipped with a day cab, or
      • (F) those with a high-roof that are equipped with a sleeper cab, or
    • (xv) heavy-haul tractors and incomplete tractors that are to become heavy-haul tractors; and

(3) Subparagraph 18(3)(b)(i) of the Regulations is replaced by the following:

  • (i) spark-ignition engines other than heavy heavy-duty engines of the 2021 model year or a subsequent model year,

(4) Subparagraph 18(3)(b)(iv) of the Regulations is replaced by the following:

  • (iv) heavy heavy-duty engines that are spark-ignition engines of the 2021 model year or a subsequent model year or compression-ignition engines and that are designed to be used in vocational vehicles and incomplete vocational vehicles,

(5) Subparagraph 18(3)(b)(vi) of the Regulations is replaced by the following:

  • (vi) heavy heavy-duty engines that are spark-ignition engines of the 2021 model year or a subsequent model year or compression-ignition engines and that are designed to be used in tractors and incomplete tractors.

(6) Paragraph 18(4)(a) of the Regulations is replaced by the following:

(a) for the 2014 to 2020 model years, hybrid vehicles that have regenerative braking;

(7) Subsection 18(4) of the Regulations is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) for the 2021 model year and subsequent model years, plug-in hybrid vehicles.

(8) Subsection 18(5) of the Regulations is replaced by the following:

Grouping into subfleets

(5) For the purposes of subparagraph (3)(a)(i) and subsection 20(3), the vehicles in the fleet that exceed the standards set out in subsection 20(1) and have more than one N2O or CH4 family emission limit, must be grouped into subfleets that include vehicles with identical N2O or CH4 family emission limits, as the case may be, and that are of the same test group.

(9) The portion of subsection 18(6) of the Regulations before paragraph (b) is replaced by the following:

Tractors and vocational vehicles

(6) For the purposes of subparagraphs (3)(a)(ii) to (xv), all heavy-duty vehicles of a fleet must

(a) if applicable, be vocational tractors, hybrid vehicles of the 2014 to 2020 model years that have regenerative braking, vehicles equipped with an engine that includes a Rankine-cycle or other bottoming cycle exhaust energy recovery system, electric vehicles, fuel cell vehicles, vehicles manufactured with innovative technologies or plug-in hybrid vehicles of the 2021 model year and subsequent model years; and

(10) Subsection 18(9) of the Regulations is replaced by the following:

Engines not sold in United States

(9) For the purposes of subsection (8), the CO2 family certification level and the N2O and CH4 family emission limits for the model year in question are determined using the engine sales in Canada if none of the engines in the engine family are sold in the United States.

23 (1) Subsection 20(1) of the Regulations is replaced by the following:

Standards

20 (1) For the 2014 model year and subsequent model years, every Class 2B and Class 3 heavy-duty vehicle and cab-complete vehicle that is not a vocational vehicle must, for the duration of the vehicle’s useful life, have N2O and CH4 emission values that do not exceed 0.05 g/mile.

(2) Subsection 20(2) of the French version of the Regulations is replaced by the following:

Calcul

(2) Les valeurs des émissions de N2O et de CH4 sont calculées conformément à l’article 24.

(3) The portion of subsection 20(3) of the Regulations before the formula is replaced by the following:

Fleet calculation

(3) A company that manufactures or imports vehicles referred to in subsection (1) whose N2O emission value or CH4 emission value exceeds the emission standard set out in that subsection must group those vehicles of a given model year into a fleet and subfleets in accordance with section 18 and must calculate the N2O and CH4 emission deficits for that fleet, expressed in megagrams of CO2 and rounded in accordance with subsection 35(2), by adding the deficits for all those subfleets, if applicable, using the formula

(4) The descriptions of A and B in subsection 20(3) of the Regulations are replaced by the following:

  • A is 0.05 g/mile;
  • B is the N2O or CH4 family emission limit for the fleet or subfleet, as the case may be;

(5) The descriptions of D and E in subsection 20(3) of the Regulations are replaced by the following:

  • D is the vehicle’s useful life, expressed in miles; and
  • E is the global warming potential and is equal to the following number of CO2 emission credits, expressed in megagrams of CO2, needed to offset a deficit of N2O or CH4:
    • (a) for each megagram of N2O, 298; and
    • (b) for each megagram of CH4,
      • (i) for vehicles of the 2014 to 2020 model years, 25, and
      • (ii) for vehicles of the 2021 model year and subsequent model years, 34.

(6) Subsection 20(4) of the Regulations is replaced by the following:

Separate calculation

(3.1) For the purposes of subsection (3), if both the N2O emission value and the CH4 emission value exceed 0.05 g/mile, the emission deficit must be calculated separately for N2O and CH4.

Family emission limit

(4) For the purposes of subsection (3), every vehicle within a fleet or subfleet must conform to the N2O or CH4 family emission limit for the fleet or subfleet, as the case may be.

24 Subsection 21(1) of the Regulations is replaced by the following:

Average standard

21 (1) For the 2014 model year and subsequent model years, a company must group all its Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles — other than those that are vocational vehicles — into a fleet based on model year in accordance with section 18 and must ensure that the fleet average CO2 emission value calculated in accordance with section 23 for that fleet does not exceed the applicable fleet average CO2 emission standard calculated in accordance with section 22 for the useful life of the vehicles of that fleet.

25 (1) Subsections 22(1) and (2) of the Regulations are replaced by the following:

Calculation of average standard

22 (1) Subject to subsection (6), a company must determine the fleet average CO2 emission standard for a given model year, expressed in grams of CO2 per mile and rounded to the nearest gram of CO2 per mile, for its fleet of Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles — other than those that are vocational vehicles — using the formula

  • [∑ (A × B)]/C
  • where
  • A is the CO2 emission target value calculated for each vehicle subconfiguration in the fleet using the applicable formula set out in subsection (2) and rounded to the nearest gram of CO2 per mile;
  • B is the number of vehicles of that vehicle subconfiguration in the fleet; and
  • C is the number of vehicles in the fleet.

Exception — rounding

(1.1) For vehicles of the 2017 model year and earlier model years, the fleet average CO2 emission standard and the CO2 emission target value may be rounded to the nearest 0.1 gram of CO2 per mile, instead of being rounded to the nearest gram of CO2 per mile as specified in subsection (1).

Vehicle subconfiguration

(2) Subject to subsection (4), the CO2 emission target value for each vehicle subconfiguration in a fleet must be calculated using the applicable formula set out in one of the following paragraphs, whichever applies:

(a) for vehicles that are equipped with a spark-ignition engine, the formula set out in column 2 of the table to this paragraph for the model year set out in column 1, where WF is the work factor for each vehicle subconfiguration, calculated using the formula set out in subsection (3) and rounded to the nearest pound;

TABLE

Item Column 1


Model Year
Column 2

CO2 Emission Target
(grams/mile)

1

2014

(0.0482 × WF) + 371

2

2015

(0.0479 × WF) + 369

3

2016

(0.0469 × WF) + 362

4

2017

(0.0460 × WF) + 354

5

2018 to 2020

(0.0440 × WF) + 339

6

2021

(0.0429 × WF) + 331

7

2022

(0.0418 × WF) + 322

8

2023

(0.0408 × WF) + 314

9

2024

(0.0398 × WF) + 306

10

2025

(0.0388 × WF) + 299

11

2026

(0.0378 × WF) + 291

12

2027 and subsequent

(0.0369 × WF) + 284

(b) for vehicles that are equipped with a compression-ignition engine or that operate without an internal combustion engine, the formula set out in column 2 of the table to this paragraph for the model year set out in column 1, where WF is the work factor for each vehicle subconfiguration, calculated using the formula set out in subsection (3) and rounded to the nearest pound.

TABLE

Item Column 1


Model Year
Column 2

CO2 Emission Target
(grams/mile)

1

2014

(0.0478 × WF) + 368

2

2015

(0.0474 × WF) + 366

3

2016

(0.0460 × WF) + 354

4

2017

(0.0445 × WF) + 343

5

2018 to 2020

(0.0416 × WF) + 320

6

2021

(0.0406 × WF) + 312

7

2022

(0.0395 × WF) + 304

8

2023

(0.0386 × WF) + 297

9

2024

(0.0376 × WF) + 289

10

2025

(0.0367 × WF) + 282

11

2026

(0.0357 × WF) + 275

12

2027 and subsequent

(0.0348 × WF) + 268

(2) Subsections 22(4) and (5) of the Regulations are replaced by the following:

Alternative target value calculation — 2016 to 2018 model years

(4) For vehicles of the 2016 to 2018 model years, a company may, instead of calculating the CO2 emission target value in accordance with subsection (2), elect to calculate that target value for each of those model years using the formula set out in one of the following paragraphs, whichever applies:

  • (a) for vehicles that are equipped with a spark-ignition engine,
    • (0.0456 × WF) + 352
  • where
  • WF is the work factor for each vehicle subconfiguration, calculated using the formula set out in subsection (3) and rounded to the nearest pound; or
  • (b) for vehicles that are equipped with a compression-ignition engine or that operate without an internal combustion engine,
    • (0.0440 × WF) + 339
  • where
  • WF is the work factor for each vehicle subconfiguration, calculated using the formula set out in subsection (3) and rounded to the nearest pound.

26 (1) Subparagraphs 24(1)(b)(i) and (ii) of the Regulations are replaced by the following:

  • (i) sections 1819(d)(4) and (5) and 1819(k)(6) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, and
  • (ii) the altitude testing conditions set out in sections 1819(a)(5) and 1865(h)(3) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR.

(2) Subparagraph 24(4)(b)(ii) of the Regulations is replaced by the following:

  • (ii) by calculating the CO2 emission rate in accordance with section 1819(g) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR.

27 The heading before section 25 of the Regulations is replaced by the following:

Special Grouping — Vehicles and Engines
28 (1) The portion of section 25 of the Regulations before paragraph (a) is replaced by the following:

Spark-ignition engines

25 A company may elect to include heavy-duty engines of the 2014 to 2020 model years that are spark-ignition engines in a fleet of Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles — other than those that are vocational vehicles — if the following conditions are met:

(2) The portion of paragraph 25(d) of the Regulations before subparagraph (i) is replaced by the following:

  • (d) instead of conforming to sections 29 and 30, the engines referred to in paragraph (b) conform to

(3) Subparagraph 25(d)(ii) of the Regulations is replaced by the following:

  • (ii) the CO2 emission target value and test result determined in accordance with section 1819(k)(8) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR; and

29 (1) Subsections 26(1) to (5) of the Regulations are replaced by the following:

CO2 emission standards — 2014 to 2020 model years

26 (1) Subject to subsections (3) and (5) to (7) and section 28, for the 2014 to 2020 model years, every vocational vehicle and incomplete vocational vehicle must, for the duration of the vehicle’s useful life, have a CO2 emission rate that does not exceed the applicable CO2 emission standard set out in the table to this subsection for the vehicle service class and model year in question.

TABLE

Item Column 1



Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2014 to 2016 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2017 to 2020 Model Years

1

Light heavy-duty vehicles

388

373

2

Medium heavy-duty vehicles

234

225

3

Heavy heavy-duty vehicles

226

222

CO2 emission standards — 2021 model year and subsequent model years

(1.1) Subject to subsections (1.2), (1.3), (3) and (5) to (7) and section 28, for the 2021 model year or a subsequent model year, every vocational vehicle and incomplete vocational vehicle that is referred to in this subsection must, for the duration of the vehicle’s useful life, have a CO2 emission rate that does not exceed the applicable CO2 emission standard set out in the table to the applicable subparagraph for the vehicle service class and model year in question:

  • (a) for multi-purpose vocational vehicles that are equipped with
    • (i) a spark-ignition engine,

TABLE

Item Column 1





Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Light heavy-duty vehicles

407

385

372

2

Medium heavy-duty vehicles

293

279

268

    • (ii) a compression-ignition engine,

TABLE

Item Column 1





Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Light heavy-duty vehicles

373

344

330

2

Medium heavy-duty vehicles

265

246

235

3

Heavy heavy-duty vehicles

261

242

230

  • (b) for regional vocational vehicles that are equipped with
    • (i) a spark-ignition engine,

TABLE

Item Column 1





Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Light heavy-duty vehicles

335

324

319

2

Medium heavy-duty vehicles

261

251

247

  • (ii) a compression-ignition engine,

TABLE

Item Column 1





Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Light heavy-duty vehicles

311

296

291

2

Medium heavy-duty vehicles

234

221

218

3

Heavy heavy-duty vehicles

205

194

189

  • (c) for urban vocational vehicles that are equipped with
    • (i) a spark-ignition engine,

TABLE

Item Column 1





Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Light heavy-duty vehicles

461

432

413

2

Medium heavy-duty vehicles

328

310

297

  • (ii) a compression-ignition engine,

TABLE

Item Column 1





Vehicle Service Class
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Light heavy-duty vehicles

424

385

367

2

Medium heavy-duty vehicles

296

271

258

3

Heavy heavy-duty vehicles

308

283

269

Alternative standards for certain vehicles

(1.2) Subject to subsection (1.3), for the 2021 and subsequent model years, a company may elect to have each of its vocational vehicles of a given model year that are of a type referred to in the table to this subsection conform, for the duration of the vehicle’s useful life, to the CO2 emission standard set out in the table for the type of vocational vehicle and model year in question instead of conforming to the CO2 emission standards set out in subsection (1.1).

TABLE

Item Column 1


Type of Vocational Vehicle
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2026 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Motor home

228

226

2

School bus

291

271

3

Coach bus

210

205

4

Other bus

300

286

5

Waste collection vehicle

313

298

6

Concrete mixer

319

316

7

Non-specified vocational vehicle

319

316

8

Emergency vehicle

324

319

Alternative standards for certain vehicles — tires

(1.3) For the 2021 model year and subsequent model years, a company may elect to have any of its motor homes, concrete mixers, non-specified vocational vehicles and emergency vehicles conform to the following standards instead of conforming to the CO2 emission standards set out in subsection (1.1) or (1.2):

  • (a) in the case of motor homes, the vehicles must be equipped with an automatic tire inflation system or tire pressure monitoring system for each wheel that is mounted on an axle; and
  • (b) in the case of vocational vehicles that are of a type referred to in the table to this paragraph, the vehicles must be equipped with tires that have a tire rolling resistance level that is not more than the maximum level set out in the table for the type of vocational vehicle and model year in question.

TABLE

Item Column 1



Type of Vocational Vehicle
Column 2


Maximum Tire Rolling Resistance Level (kilograms per tonne) for 2021 to 2026 Model Years
Column 3

Maximum Tire Rolling Resistance Level (kilograms per tonne) for 2027 and Subsequent Model Years

1

Motor home

6.7

6.0

2

Concrete mixer

7.6

7.1

3

Non-specified vocational vehicle

7.6

7.1

4

Emergency vehicle

8.7

8.4

Modelling CO2 emissions to demonstrate compliance

(2) The CO2 emission rate must be determined in accordance with sections 501 and 520 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR,

  • (a) using the version of the GEM computer simulation model that is applicable to the model year in question; and
  • (b) in the case of vocational vehicles and incomplete vocational vehicles of the 2021 model year or a subsequent model year that are plug-in hybrid vehicles or fuel cell vehicles powered by any fuel other than hydrogen, taking into account the powertrain testing procedure set out in section 550 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR.

Reference in CFR — interpretation

(2.1) For the purposes of subsection (2),

  • (a) a reference in the CFR to “regulatory subcategory” is to be read as a reference to the fleet referred to in one of subparagraphs 18(3)(a)(ii) to (viii) that includes the same type of vehicles as those to which the simulation model is being applied; and
  • (b) motor homes and coach buses are to be treated as regional vocational vehicles and the other types of vocational vehicle referred to in column 1 of the table to subsection (1.2) are to be treated as urban vocational vehicles.

Electric vehicles

(2.2) For the purposes of this section and sections 34 to 47, the CO2 emission rate of vocational vehicles and incomplete vocational vehicles that are electric vehicles is zero grams of CO2 per short ton-mile.

Exemption for certain vocational vehicles

(3) The vocational vehicles and incomplete vocational vehicles referred to in subsections (1) and (1.1) do not include

  • (a) vehicles for which the manufacture is completed before January 1, 2021 and that are equipped with tires with a maximum speed rating of not more than 88 km/h (55 miles per hour); and
  • (b) vehicles that
    • (i) are designed to operate at low speeds that are unsuitable for normal highway operation or that have affixed components that are designed to perform work in an off-road environment, and
    • (ii) have
      • (A) an axle that has a GAWR of 13 154 kg (29,000 pounds) or more,
      • (B) the capacity to attain a speed of not more than 53 km/h (33 miles per hour) over 3.2 km (2 miles),
      • (C) the capacity to attain a speed of not more than 72 km/h (45 miles per hour) over 3.2 km (2 miles), an unloaded vehicle weight that is not less than 95% of their GVWR and no capacity to carry occupants other than the driver and operating crew, or
      • (D) a maximum speed that is limited to 87 km/h (54 miles per hour) by parameters that are not adjustable parameters as defined in subsection 15(1).

Non-eligible vehicles

(4) The vehicles referred to in subsections (1.2), (1.3) and (3) are not eligible for participation in the CO2 emission credit system set out in sections 34 to 47.

Option to conform to standards for heavier vehicles

(5) For any given vehicle referred to in subsection (1) or (1.1), a company may elect to have the vehicle conform to the emission standards applicable to a vehicle service class that includes vehicles that are heavier than those included in the vehicle service class to which the vehicle belongs, for a period that is equivalent to the useful life of those heavier vehicles, instead of the standards set out in subsection (1) or (1.1) that are applicable to the vehicle service class to which the vehicle belongs.

(2) The portion of subsection 26(6) of the Regulations before paragraph (a) is replaced by the following:

Alternative standards

(6) In the case of vocational vehicles and cab-complete vocational vehicles that are equipped with a spark-ignition engine, a company may elect to have its vehicles conform to the standards referred to in sections 20 to 23 that are applicable to Class 2B and Class 3 heavy-duty vehicles, taking into account section 1819(j) of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR, instead of conforming to the standards set out in subsection (1) or (1.1) and sections 29 and 30, if the following conditions are met:

(3) Subsections 26(7) and (8) of the Regulations are replaced by the following:

Calculation using fleets and subfleets

(7) A company may, instead of complying with subsection (1) or (1.1), elect to group all its vocational vehicles and incomplete vocational vehicles of a given model year into fleets or subfleets, as the case may be, in accordance with section 18 and participate in the CO2 emission credit system set out in sections 34 to 47.

Calculation for option under subsection (5)

(7.1) If a company makes an election under subsection (5) in respect of a vocational vehicle or an incomplete vocational vehicle and the vehicle’s CO2 emission rate exceeds the CO2 emission standard referred to in that subsection, the company must group all its vocational vehicles and incomplete vocational vehicles of a given model year into fleets or subfleets, as the case may be, in accordance with section 18 and participate in the CO2 emission credit system set out in sections 34 to 47, but must not obtain any credits in respect of the vehicles that conform to that standard.

Family emission limit

(8) For the purposes of subsections (7) and (7.1), every vocational vehicle and incomplete vocational vehicle within a fleet or subfleet must conform to the CO2 family emission limit for the fleet or subfleet, as the case may be.

30 (1) Subsections 27(1) to (5) of the Regulations are replaced by the following:

CO2 emission standards — 2014 to 2020 model years

27 (1) Subject to subsections (7) and (8) and section 28, for the 2014 to 2020 model years, every tractor and incomplete tractor must, for the duration of the tractor or incomplete tractor’s useful life, have a CO2 emission rate that does not exceed the applicable CO2 emission standard set out in the table to this subsection for the class of tractor and model year in question.

TABLE

Item Column 1





Class of Tractor
Column 2






Characteristics
Column 3


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2014 to 2016 Model Years
Column 4


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2017 to 2020 Model Years

1

Class 7

Low-roof

107

104

2

Class 7

Mid-roof

119

115

3

Class 7

High-roof

124

120

4

Class 8

Low-roof with day cab

81

80

5

Class 8

Low-roof with sleeper cab

68

66

6

Class 8

Mid-roof with day cab

88

86

7

Class 8

Mid-roof with sleeper cab

76

73

8

Class 8

High-roof with day cab

92

89

9

Class 8

High-roof with sleeper cab

75

72

CO2 emission standards — 2021 model year and subsequent model years

(1.1) Subject to subsections (7) and (8) and section 28, for the 2021 model year and subsequent model years, every tractor and incomplete tractor referred to in one of the following paragraphs must, for the duration of the tractor or incomplete tractor’s useful life, have a CO2 emission rate that does not exceed the applicable CO2 emission standard set out in the table to paragraph (a) or (b) for the class of tractor and model year in question:

  • (a) in the case of a tractor or incomplete tractor that has a GCWR of less than 54 431 kg (120,000 pounds),

TABLE

Item Column 1









Class of Tractor
Column 2










Characteristics
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 4

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 5

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Class 7

Low-roof

105.5

99.8

96.2

2

Class 7

Mid-roof

113.2

107.1

103.4

3

Class 7

High-roof

113.5

106.6

100.0

4

Class 8

Low-roof with day cab

80.5

76.2

73.4

5

Class 8

Low-roof with sleeper cab

72.3

68.0

64.1

6

Class 8

Mid-roof with day cab

85.4

80.9

78.0

7

Class 8

Mid-roof with sleeper cab

78.0

73.5

69.6

8

Class 8

High-roof with day cab

85.6

80.4

75.7

9

Class 8

High-roof with sleeper cab

75.7

70.7

64.3

  • (b) in the case of a tractor or incomplete tractor that has a GCWR of 54 431 kg (120,000 pounds) or more, other than a heavy-haul tractor or an incomplete tractor that is to become a heavy-haul tractor,

TABLE

Item Column 1









Class of Tractor
Column 2










Characteristics
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 4

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 5

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Class 8

Low-roof with day cab

51.8

48.7

47.0

2

Class 8

Low-roof with sleeper cab

45.3

42.5

40.6

3

Class 8

Mid-roof with day cab

54.1

50.9

49.1

4

Class 8

Mid-roof with sleeper cab

47.9

45.0

43.0

5

Class 8

High-roof with day cab

54.1

50.3

48.0

6

Class 8

High-roof with sleeper cab

46.9

43.4

40.6

CO2 emission standards — heavy-haul tractors

(1.2) For the 2021 model year and subsequent model years, every heavy-haul tractor and incomplete tractor that is to become a heavy-haul tractor must, for the duration of the useful life of the heavy-haul tractor or incomplete tractor that is to become a heavy-haul tractor, have a CO2 emission rate that does not exceed the following CO2 emission standard:

  • (a) for the 2021 to 2023 model years, 52.4 grams of CO2 per short ton-mile;
  • (b) for the 2024 to 2026 model years, 50.2 grams of CO2 per short ton-mile; and
  • (c) for the 2027 model year and subsequent model years, 48.3 grams of CO2 per short ton-mile.

Modelling CO2 emissions to demonstrate compliance

(2) The CO2 emission rate must be determined in accordance with sections 501 and 520 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR,

  • (a) using the version of the GEM computer simulation model applicable for the model year in question; and
  • (b) in the case of tractors and incomplete tractors of the 2021 model year or a subsequent model year that are plug-in hybrid vehicles or fuel cell vehicles powered by any fuel other than hydrogen, taking into account the powertrain testing procedure set out in section 550 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR.

Reference in CFR — interpretation

(3) For the purposes of subsection (2), a reference in the CFR to “regulatory subcategory” is to be read as a reference to the fleet referred to in one of subparagraphs 18(3)(a)(ix) to (xv) that includes the same type of tractors and incomplete tractors as those to which the simulation model is being applied.

Electric vehicles

(4) For the purposes of this section and sections 34 to 47, the CO2 emission rate of tractors and incomplete tractors that are electric vehicles is zero grams of CO2 per short ton-mile.

Weight reduction technologies

(5) For greater certainty, CO2 emission credits for weight reduction technologies other than those that are referred to in section 520(e) of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR may be obtained under section 41.

(2) The portion of subsection 27(6) of the Regulations before paragraph (b) is replaced by the following:

Alternative method for measuring drag area

(6) Instead of the method referred to in section 525(b) of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, a company may elect to measure the tractor’s drag area (CDA) in accordance with any other method referred to in that section if,

  • (a) in the case of a tractor that is covered by an EPA certificate, the election has been approved by the EPA for that tractor and the company provides the Minister with evidence of the EPA approval; and

(3) Subsections 27(7) to (9) of the Regulations are replaced by the following:

Option to conform to standards for heavier vehicles

(7) For any given vehicle referred to in subsection (1) or (1.1), a company may elect to have the vehicle conform to the emission standards applicable to a vehicle service class that includes vehicles that are heavier than those included in the vehicle service class to which the vehicle belongs, for a period that is equivalent to the useful life of those heavier vehicles, instead of the standards set out in subsection (1) or (1.1) that are applicable to the vehicle service class to which the vehicle belongs.

Calculation using fleets and subfleets

(8) A company may, instead of complying with subsection (1), (1.1) or (1.2), elect to group all its tractors and incomplete tractors of a given model year into fleets or subfleets, as the case may be, in accordance with section 18 and participate in the CO2 emission credit system set out in sections 34 to 47.

Calculation for option under subsection (7)

(8.1) If a company makes an election under subsection (7) in respect of a vehicle and the vehicle’s CO2 emission rate exceeds the standard referred to in that subsection, the company must group all its tractors and incomplete tractors of a given model year into fleets or subfleets, as the case may be, in accordance with section 18 and participate in the CO2 emission credit system set out in sections 34 to 47, but must not obtain any credits in respect of the vehicles that conform to that standard.

Family emission limit

(9) For the purposes of subsections (8) and (8.1), every tractor and incomplete tractor within a fleet or subfleet must conform to the CO2 family emission limit for the fleet or subfleet, as the case may be.

31 The heading before section 28 of the French version of the Regulations is replaced by the following:

Tracteurs routiers spécialisés

32 Section 28 of the Regulations is replaced by the following:

CO2 emission standards

28 (1) Subject to subsection (2), section 27 applies to vocational tractors.

Maximum number

(2) A company that manufactures or imports vocational tractors for sale in Canada may elect to have a maximum of 5250 of the Class 7 and Class 8 vocational tractors that it manufactures or imports in any period of three consecutive model years conform to the emission standards applicable to vocational vehicles instead of those applicable to vocational tractors, if it reports the election in its end of model year report.

33 (1) Subsection 29(1) of the Regulations is replaced by the following:

Standards

29 (1) Every heavy-duty engine that is a compression-ignition engine of the 2014 model year or a subsequent model year and every heavy-duty engine that is a spark-ignition engine of the 2016 model year or a subsequent model year must, for the duration of the engine’s useful life, have N2O and CH4 emission values that do not exceed 0.10 g/BHP-hr.

(2) The portion of subsection 29(4) of the Regulations before the description of C is replaced by the following:

Fleet calculation

(4) A company that manufactures or imports engines referred to in subsection (1) whose N2O emission value or CH4 emission value exceeds the emission standard set out in that subsection must group those engines of a given model year into fleets in accordance with section 18 and must calculate the N2O or CH4 emission deficit, as the case may be, for each fleet, expressed in megagrams of CO2 and rounded in accordance with subsection 35(2), using the formula

  • (A – B) × C × D × E × F/1 000 000

where

  • A is 0.10 g/BHP-hr;
  • B is the N2O or CH4 family emission limit for the fleet, as the case may be;

(3) The descriptions of E and F in subsection 29(4) of the Regulations are replaced by the following:

  • E is the engine’s useful life, expressed in miles; and
  • F is the global warming potential and is equal to the following number of CO2 emission credits, expressed in megagrams of CO2, needed to offset a deficit of N2O or CH4:
  • (a) for each megagram of N2O, 298; and
  • (b) for each megagram of CH4,
    • (i) for vehicles of the 2014 to 2020 model years, 25, and
    • (ii) for vehicles of the 2021 model year and subsequent model years, 34.

(4) Subsection 29(5) of the Regulations is replaced by the following:

Separate calculation

(4.1) For the purposes of subsection (4), if both the N2O emission value and the CH4 emission value exceed 0.10 g/BHP-hr, the emission deficit must be calculated separately for N2O and CH4.

Family emission limit

(5) For the purposes of subsection (4), every heavy-duty engine within a fleet must conform to the N2O or CH4 family emission limit for the fleet.

(5) The portion of subsection 29(8) of the French version of the Regulations before the formula is replaced by the following:

Points pour les faibles émissions de N2O

(8) L’entreprise dont les moteurs de véhicules lourds d’un parc de l’année de modèle 2014, 2015 ou 2016 sont conformes à une limite d’émissions de la famille applicable au N2O inférieure à 0,04 g/BHP-h peut obtenir des points relatifs aux émissions de CO2 pour participer au système de points prévu aux articles 34 à 47 et les points sont calculés au moyen de la formule ci-après pour chaque parc, exprimés en mégagrammes de CO2 et arrondis conformément au paragraphe 35(2) :

(6) The descriptions of A and B in subsection 29(8) of the Regulations are replaced by the following:

  • A is 0.04 g/BHP-hr;
  • B is the N2O family emission limit for the fleet;

(7) The description of E in subsection 29(8) of the Regulations is replaced by the following:

  • E is the engine’s useful life, expressed in miles; and

34 Section 30 of the Regulations is replaced by the following:

Standard

30 (1) Subject to subsection (2) and sections 31 and 33, every heavy-duty engine of a given model year must, for the duration of the engine’s useful life, have a CO2 emission value that does not exceed the following CO2 emission standard:

  • (a) in the case of a spark-ignition engine of the 2016 to 2020 model years, 627 g/BHP-hr;
  • (b) in the case of a spark-ignition engine of the 2021 model year or a subsequent model year other than a heavy heavy-duty engine, 627 g/BHP-hr;
  • (c) in the case of a compression-ignition engine of the 2014 to 2020 model years, the applicable standard set out in the table to this paragraph;

TABLE

Item Column 1









Model Year
Column 2





Light Heavy-duty Engines (g/BHP-hr)
Column 3

Medium Heavy-duty Engines Designed To Be Used in Vocational Vehicles (g/BHP-hr)
Column 4

Heavy Heavy-duty Engines Designed To Be Used in Vocational Vehicles (g/BHP-hr)
Column 5

Medium Heavy-duty Engines Designed To Be Used in Tractors (g/BHP-hr)
Column 6

Heavy Heavy-duty Engines Designed To Be Used in Tractors (g/BHP-hr)

1

2014 to 2016

600

600

567

502

475

2

2017 to 2020

576

576

555

487

460

  • (d) in the case of a compression-ignition engine of the 2021 model year or a subsequent model year or a heavy heavy-duty engine that is a spark-ignition engine of the 2021 model year or a subsequent model year, the applicable standard set out in the table to this paragraph.

TABLE

Item Column 1










Model Year
Column 2





Light Heavy-duty Engines
(g/BHP-hr)
Column 3

Medium Heavy-duty Engines Designed To Be Used in Vocational Vehicles (g/BHP-hr)
Column 4

Heavy Heavy-duty Engines Designed To Be Used in Vocational Vehicles (g/BHP-hr)
Column 5

Medium Heavy-duty Engines Designed To Be Used in Tractors
(g/BHP-hr)
Column 6

Heavy Heavy-duty Engines Designed To Be Used in Tractors (g/BHP-hr)

1

2021-2023

563

545

513

473

447

2

2024-2026

555

538

506

461

436

3

2027 and subsequent

552

535

503

457

432

Election — spark-ignition engines

(2) A company may elect to have any of its spark ignition engines referred to in paragraph (1)(a) or (b) conform to the emission standard set out in paragraph (1)(c) or (d) that is applicable to compression ignition engines of the same model year instead of the standard set out in paragraph (1)(a) or (b).

35 (1) Subsections 31(1) and (2) of the Regulations are replaced by the following:

Alternative emission standard — 2014 to 2016 model years

31 (1) Heavy-duty engines that are compression-ignition engines of the 2014 to 2016 model years may conform to the CO2 emission standard referred to in section 620 of Title 40, chapter I, subchapter U, part 1036, subpart G, of the CFR instead of the standard set out in paragraph 30(1)(b) if there are no remaining credits that can be used under sections 42 to 46 for the averaging set of those engines for the model years in question.

Alternative emission standard — 2013 to 2016 model years

(2) Heavy-duty engines that are compression-ignition engines of the 2013 to 2016 model years may conform to the CO2 emission standard referred to in section 150(e) of Title 40, chapter I, subchapter U, part 1036, subpart B, of the CFR instead of the standard set out in paragraph 30(1)(b) or in subsection (1).

(2) Section 31 of the Regulations is amended by adding the following after subsection (4):

Alternative emission standards — 2024 to 2026 model years

(5) For the 2024 to 2026 model years, a company may elect to have its medium heavy-duty or heavy heavy-duty engines conform to the applicable alternative CO2 emission standard referred to in section 150(p)(2) of Title 40, chapter I, subchapter U, part 1036, subpart B, of the CFR instead of the applicable standard set out in paragraph 30(1)(c), if all its medium heavy-duty or heavy heavy-duty engines of the 2020 model year conform to the standards applicable to medium heavy-duty or heavy heavy-duty engines of the 2021 model year set out in paragraph 30(1)(c).

Use of credits

(6) Despite paragraph 44(b), if a company makes the election referred to in subsection (4), credits obtained for an averaging set of medium heavy-duty or heavy heavy-duty engines of the 2018 to 2024 model years may be used in respect of the same averaging set of medium heavy-duty or heavy heavy-duty engines of a model year subsequent to the model year in respect of which the credits were obtained, ending with the 2030 model year.

Election under subsection (5)

(7) A company that elects to have its engines conform to the alternative CO2 emission standard referred to in subsection (5) for the 2024 model year must have its engines conform to that standard for the 2025 and 2026 model years.

36 The portion of subsection 32(1) of the Regulations before paragraph (a) is replaced by the following:

Value

32 (1) The CO2 emission value for the following heavy-duty engines corresponds to the emission value of the tested engine configuration referred to in section 235(a) of Title 40, chapter I, subchapter U, part 1036, subpart C, of the CFR, for the engine family, measured in accordance with the following duty cycles, taking into account sections 108(d) to (f) and 150(g) and (m) of subpart B, sections 235(b) and 241(c) and (d) of subpart C and subparts E and F of part 1036, Title 40, chapter I, subchapter U, of the CFR:

37 Section 33 of the Regulations is replaced by the following:

Calculation using fleets and subfleets

33 (1) A company may, instead of complying with section 30 or subsection 31(2), as the case may be, elect to group all its heavy-duty engines of a given model year into fleets, in accordance with section 18, and participate in the CO2 emission credit system set out in sections 34 to 47.

CO2 family certification level

(2) For the purposes of subsection (1), every heavy-duty engine within a fleet must conform to the CO2 family certification level for the fleet.

Trailers

CO2 emission standards — full-aero box van trailers

33.1 (1) Subject to section 33.3, every full-aero box van trailer of the 2018 model year or a subsequent model year must, for the duration of the trailer’s useful life, have a CO2 emission rate that does not exceed the CO2 emission standard set out in the table to this subsection for the type of trailer and model year in question.

TABLE

Item Column 1









Type of Trailer
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2018 to 2020 Model Years
Column 3

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 to 2023 Model Years
Column 4

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2024 to 2026 Model Years
Column 5

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Short dry box van trailers

125.4

123.7

120.9

118.8

2

Long dry box van trailers

81.3

78.9

77.2

75.7

3

Short refrigerated box van trailers

129.1

127.5

124.7

122.7

4

Long refrigerated box van trailers

83.0

80.6

78.9

77.4

CO2 emission standards — partial-aero box van trailers

(2) For the 2018 model year and subsequent model years, every partial-aero box van trailer must, for the duration of the trailer’s useful life, have a CO2 emission rate that does not exceed the CO2 emission standard set out in the table to this subsection for the type of trailer and model year in question.

TABLE

Item Column 1





Type of Trailer
Column 2

CO2 Emission Standard (grams of CO2 per short ton-mile) for 2018 to 2020 Model Years
Column 3


CO2 Emission Standard (grams of CO2 per short ton-mile) for 2021 and Subsequent Model Years

1

Short dry box van trailers

125.4

123.7

2

Long dry box van trailers

81.3

80.6

3

Short refrigerated box van trailers

129.1

127.5

4

Long refrigerated box van trailers

83.0

82.3

Demonstrating compliance

(3) The CO2 emission rate for each trailer must be determined in accordance with sections 501 and 515 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, taking into account section 150(x) of Title 40, chapter I, subchapter U, part 1037, subpart B, of the CFR.

Definition of fleet — trailers

33.2 (1) For the purposes of this section and section 33.3, fleet refers to the full-aero box van trailers that a company imports or manufactures in Canada for the purpose of sale in Canada to the first retail purchaser and that are grouped in accordance with this section.

Exclusions

(2) A company may elect to exclude from its fleets

  • (a) the full-aero box van trailers that it manufactures and that will be used in Canada solely for the purpose of exhibition, demonstration, evaluation or testing, if it reports the election in its end of model year report; and
  • (b) the full-aero box van trailers that it imports solely for the purpose of exhibition, demonstration, evaluation or testing, if it makes a declaration in accordance with section 60 and it reports the election in its end of model year report.

Fleet composition

(3) A company must group its full-aero box van trailers of the same model year into fleets that are composed solely of the trailers referred to in one of the following paragraphs:

  • (a) short dry box van trailers;
  • (b) long dry box van trailers;
  • (c) short refrigerated box van trailers;
  • (d) long refrigerated box van trailers.

Subfleets

(4) For the purposes of section 33.3, a company must group the trailers of a fleet into subfleets that include trailers with an identical CO2 family emission limit.

Election — fleet average standard

33.3 (1) For the 2027 model year and subsequent model years, a company may, instead of complying with subsection 33.1(1), elect to group all of its full-aero box van trailers of a given model year into fleets and subfleets in accordance with section 33.2 and comply with this section.

Fleet average standard

(2) The average CO2 emission value for each of a company’s fleets of full-aero box van trailers must for the duration of the trailer’s useful life, not exceed the fleet average CO2 emission standard set out in the table to this subsection for the type of trailer in question.

TABLE

Item Column 1





Type of Trailer
Column 2



Fleet Average CO2 Emission Standard (grams of CO2 per short ton-mile) for 2027 and Subsequent Model Years

1

Short dry box van trailers

118.8

2

Long dry box van trailers

75.7

3

Short refrigerated box van trailers

122.7

4

Long refrigerated box van trailers

77.4

Calculation of average CO2 emission value

(3) For each of its fleets of full-aero box van trailers of a given model year, a company must calculate the fleet average CO2 emission value, expressed in grams of CO2 per short ton-mile, in accordance with the formula

[∑ (A × B)]/C

where

  • A is the family emission limit for each subfleet in the fleet;
  • B is the number of trailers in the subfleet; and
  • C is the number of trailers in the fleet.

Alternative method for measuring drag area

(4) Instead of the method referred to in section 525(a) of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, a company may elect to measure a trailer’s drag area (CDA) in accordance with any other method referred to in that section if,

  • (a) in the case of a trailer that is covered by an EPA certificate, the election has been approved by the EPA for that trailer and the company provides the Minister with evidence of the EPA approval; and
  • (b) in the case of a trailer that is not covered by an EPA certificate, the company provides the Minister with evidence demonstrating that the alternative method for measuring the trailer’s drag area referred to in this subsection is more representative of that trailer’s drag area.

Family emission limit

(5) For the purposes of subsection (2), every full-aero box van trailer within a fleet must, for the duration of the trailer’s useful life, conform to a CO2 family emission limit that does not exceed the limit set out in the table to this subsection for the type of trailer in question.

TABLE

Item Column 1



Type of Trailer
Column 2


CO2 Emission Limit (grams of CO2 per short ton-mile)

1

Short dry box van trailers

125.4

2

Long dry box van trailers

81.3

3

Short refrigerated box van trailers

129.1

4

Long refrigerated box van trailers

83.0

38 (1) The description of D in paragraph 35(1)(a) of the Regulations is replaced by the following:

  • D is the useful life of the vehicles of the fleet, expressed in miles;

(2) The descriptions of A and B in paragraph 35(1)(b) of the Regulations are replaced by the following:

  • A is the CO2 emission standard under subsection 26(1) or (1.1) that applies to the vehicles of the subfleet, expressed in grams of CO2 per short ton-mile,
  • B is the CO2 family emission limit for the subfleet, expressed in grams of CO2 per short ton-mile,

(3) The description of E in paragraph 35(1)(b) of the Regulations is replaced by the following:

  • E is the useful life of the vehicles of the subfleet, expressed in miles;

(4) The descriptions of A to C in paragraph 35(1)(c) of the Regulations are replaced by the following:

  • A is the CO2 emission standard under subsection 27(1), (1.1) or (1.2) that applies to the tractors and incomplete tractors of the subfleet, expressed in grams of CO2 per short ton-mile,
  • B is the CO2 family emission limit for the subfleet, expressed in grams of CO2 per short ton-mile,
  • C is the payload for the tractors and incomplete tractors, which is
  • (i) 12.5 short tons for Class 7 tractors and incomplete tractors,
  • (ii) 19 short tons for Class 8 tractors and incomplete tractors other than heavy-haul tractors and incomplete tractors that are to become heavy-haul tractors, and
  • (iii) 43 short tons for heavy-haul tractors and incomplete tractors that are to become heavy-haul tractors,

(5) The description of E in paragraph 35(1)(c) of the Regulations is replaced by the following:

  • E is the useful life of the tractors or incomplete tractors of the subfleet, expressed in miles; and

(6) The descriptions of A to C in paragraph 35(1)(d) of the Regulations are replaced by the following:

  • A is the CO2 emission standard that applies to the fleet of heavy-duty engines under section 30 or subsection 31(2) or (5), as the case may be, expressed in grams per brake horsepower-hour,
  • B is the CO2 family certification level for the fleet, subject to subsection (3), expressed in grams of CO2 per brake horsepower-hour,
  • C is the transient cycle conversion factor calculated in accordance with the applicable variable “CF” in section 705(b) of Title 40, chapter I, subchapter U, part 1036, subpart H, of the CFR, except that a reference to “production volumes” in that section must be read as a reference to the “number of engines of that engine family that a company imports or manufactures in Canada for the purpose of sale in Canada to the first retail purchaser”,

(7) The description of E in paragraph 35(1)(d) of the Regulations is replaced by the following:

  • E is the useful life of the engines of the fleet, expressed in miles.

39 Section 36 of the Regulations is replaced by the following:

Obtaining additional credits

36 (1) A company may obtain additional credits for vehicles or engines

  • (a) of the 2014 to 2020 model years in accordance with sections 37 to 41;
  • (b) of the 2021 to 2027 model years in accordance with sections 40.1 and 41; and
  • (c) of the 2028 model year and subsequent model years in accordance with section 41.

Limitation

(2) Additional credits may only be obtained once for a vehicle or engine with regard to the same type of greenhouse gas emission reduction technology.

40 The descriptions of emission rate A and emission rate B in subsection 38(2) of the Regulations are replaced by the following:

  • emission rate A is the emission test result, expressed in grams of CO2 per short ton-mile, obtained by an equivalent conventional vehicle when tested using the duty cycle test set out in section 510 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, taking into account section 501 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR; and
  • emission rate B is the emission test result, expressed in grams of CO2 per short ton-mile, obtained by the vehicle in question, which is
  • (a) for an electric vehicle, zero grams of CO2 per short ton-mile, and
  • (b) for any other vehicle, subject to subsection (3), the result obtained by the vehicle when tested using the duty cycle test set out in section 510 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, taking into account sections 501 and 540 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR; and

41 (1) The description of A in subsection 39(2) of the Regulations is replaced by the following:

  • A is the grams of CO2 per short ton-mile benefit from A to B testing determined in accordance with,
  • (a) in the case of a post-transmission hybrid system, section 555 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, taking into account section 525 of Title 40, chapter I, subchapter U, part 1036, subpart F, of the CFR, and
  • (b) in the case of a pre-transmission hybrid system, part 1065 of Title 40, chapter I, subchapter U, of the CFR, or section 555 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, taking into account section 525 of Title 40, chapter I, subchapter U, part 1036, subpart F, of the CFR;

(2) The description of D in subsection 39(2) of the Regulations is replaced by the following:

  • D is the useful life of the vehicles of the fleet or subfleet, as the case may be, expressed in miles.

42 (1) The portion of the description of A in subsection 40(1) of the Regulations before paragraph (a) is replaced by the following:

  • A is the benefit obtained from A to B testing, expressed in grams of CO2 per brake horsepower-hour, determined in accordance with section 615 of Title 40, chapter I, subchapter U, part 1036, subpart G of the CFR, or using an alternative procedure if,

(2) The description of D in subsection 40(1) of the Regulations is replaced by the following:

  • D is the useful life of the engines of the fleet, expressed in miles.

43 The Regulations are amended by adding the following after section 40:

Credit multipliers — 2021 to 2027 model years

40.1 A company that obtains credits under section 35 for its heavy-duty vehicles of the 2021 to 2027 model years that are plug-in hybrid vehicles, electric vehicles or fuel cell vehicles, may multiply the number of credits obtained for those vehicles by the following number:

  • (a) 3.5 in the case of plug-in hybrid vehicles;
  • (b) 4.5 in the case of electric vehicles; and
  • (c) 5.5 in the case of fuel cell vehicles.

44 (1) The description of C in paragraph 41(1)(a) of the Regulations is replaced by the following:

  • C is the useful life of the vehicles of the fleet, expressed in miles;

(2) The description of E in subparagraph 41(1)(b)(i) of the Regulations is replaced by the following:

  • E is the useful life of the vehicles of the subfleet, expressed in miles, or

(3) The portion of the formula in clause 41(1)(b)(ii)(A) of the Regulations before the description of C is replaced by the following:

[A – (B × C)] × D × E × F/1 000 000

where

  • A is the CO2 emission standard under subsection 26(1) or (1.1) that applies to the vocational vehicles and incomplete vocational vehicles of the subfleet, expressed in grams of CO2 per short ton-mile,
  • B is the CO2 family emission limit for the subfleet, expressed in grams of CO2 per short ton-mile,

(4) The description of F in clause 41(1)(b)(ii)(A) of the Regulations is replaced by the following:

  • F is the useful life of the vehicles of the subfleet, expressed in miles, or

(5) The portion of the formula in clause 41(1)(b)(ii)(B) of the Regulations before the description of C is replaced by the following:

[A – (B × C)] × D × E × F/1 000 000

where

  • A is the CO2 emission standard under subsection 27(1), (1.1) or (1.2) that applies to the tractors and incomplete tractors of the subfleet, expressed in grams of CO2 per short ton-mile,
  • B is the CO2 family emission limit for the subfleet, expressed in grams of CO2 per short ton-mile,

(6) The description of F in clause 41(1)(b)(ii)(B) of the Regulations is replaced by the following:

  • F is the useful life of the tractors or incomplete tractors of the subfleet, expressed in miles; or

(7) The description of E in subparagraph 41(1)(c)(i) of the Regulations is replaced by the following:

  • E is the useful life of the vehicles of the fleet, expressed in miles,

(8) The description of (A – B) in subparagraph 41(1)(c)(ii) of the English version of the Regulations is replaced by the following:

  • (A – B) is the difference between the in-use emission rate of the engine manufactured without the innovative technology and the in-use emission rate of the engine manufactured with the innovative technology, determined in accordance with engine dynamometer A to B testing of pairs of engines differing only with respect to the innovative technology in question, and expressed in grams of CO2 per brake horsepower-hour,

(9) The description of E in subparagraph 41(1)(c)(ii) of the Regulations is replaced by the following:

  • E is the useful life of the engines of the fleet, expressed in miles, or

(10) The portion of the formula in subparagraph 41(1)(c)(iii) of the Regulations before the description of A is replaced by the following:

[A – (B × C)] × D × E × F/1 000 000

(11) The description of A in subparagraph 41(1)(c)(iii) of the English version of the Regulations is replaced by the following:

  • A is the CO2 emission standard that applies to the fleet of heavy-duty engines under section 30 or subsection 31(2), as the case may be, expressed in grams of CO2 per brake horsepower-hour,

(12) The description of B in subparagraph 41(1)(c)(iii) of the Regulations is replaced by the following:

  • B is the CO2 family certification level for the fleet, subject to subsection 35(3), expressed in grams of CO2 per brake horsepower-hour,

(13) The description of F in subparagraph 41(1)(c)(iii) of the Regulations is replaced by the following:

  • F is the useful life of the engines of the fleet, expressed in miles.

45 Section 44 of the Regulations is replaced by the following:

Use of credits — time limitations

44 For the purposes of section 45, credits obtained for an averaging set of heavy-duty vehicles or heavy-duty engines of a given model year may be used only in respect of the same averaging set of heavy-duty vehicles or heavy-duty engines of a model year that

  • (a) is up to three model years before the model year for which the credits are obtained; or
  • (b) is up to five model years after the model year for which the credits are obtained.

46 Section 45 of the Regulations is amended by adding the following after subsection (2):

Credit multiplier

(2.1) Credits obtained by a company for any of the averaging sets of the 2016 to 2020 model years referred to in paragraph (a) or (b) that are used to offset a deficit incurred for the same averaging set of the 2021 model year or a subsequent model year may be multiplied by

  • (a) 1.36, in the case of the averaging sets referred to in paragraph (b), (e) or (f) of the definition averaging set set out in subsection 1(1); and
  • (b) 1.25, in the case of the averaging set referred to in paragraph (a) of that definition.

47 Subsection 47(6) of the Regulations is replaced by the following:

Credit multiplier

(6) Early action credits obtained for vocational vehicles, tractors or heavy-duty engines may be multiplied by 1.5 if the company does not use the additional credit multiplier referred to in subsection 38(4), 39(3) or 40(2) for the same vehicles or engines.

48 (1) Subsection 48(1) of the Regulations is replaced by the following:

Deadline

48 (1) A company must submit to the Minister an end of model year report, signed by a person who is authorized to act on behalf of the company, for all heavy-duty vehicles and heavy-duty engines of the 2014 model year and subsequent model years, and all trailers of the 2018 model year and subsequent model years, that it imported or manufactured in Canada, not later than June 30 of the calendar year following the calendar year that corresponds to the model year in question.

Exclusion

(1.1) Subsection (1) does not apply to a company in respect of any of their heavy-duty vehicles or heavy-duty incomplete vehicles that they have altered in accordance with subsection 11(1).

(2) The portion of subsection 48(2) of the Regulations before paragraph (a) is replaced by the following:

Statement

(2) The end of model year report must indicate the model year for which the report is made and must include the following statements by the company for its vehicles, engines and trailers, as applicable:

(3) Subparagraph 48(2)(b)(v) of the Regulations is replaced by the following:

  • (v) are exempted under subsection 17(1), or

(4) Subparagraph 48(2)(c)(i) of the Regulations is amended by striking out “or” at the end of clause (C), by replacing “and” with “or” at the end of clause (D) and by adding the following after clause (D):

  • (E) are exempted under subparagraph 17(1.1)(a)(ii) or (b)(ii), and

(5) Subparagraph 48(2)(c)(ii) of the Regulations is amended by striking out “or” at the end of clause (B) and by adding the following after that clause:

  • (B.1) are covered by an EPA certificate, bear the U.S. information label referred to in subparagraph 53(d)(ii), conform to a N2O or CH4 family emission limit, as the case may be, that exceeds the N2O or CH4 emission standard applicable to the model year of the engines under these Regulations and, in accordance with subsection 13(7.1), do not conform to subsections 29(4) to (7),

(6) Subparagraph 48(2)(c)(ii) of the Regulations is amended by adding “or” at the end of clause (C) and by adding the following after that clause:

  • (D) are exempted under subparagraph 17(1.1)(a)(i) or (b)(i); and

(7) Subsection 48(2) of the Regulations is amended by striking out “and” at the end of paragraph (b) and by adding the following after paragraph (c):

  • (d) in the case of trailers,
    • (i) in respect of its full-aero box van trailers of the 2018 to 2026 model years, partial-aero box van trailers, non-box trailers and non-aero box van trailers, that the trailers conform to the applicable standards set out in subsection 16.1(1) or section 33.1, as the case may be,
    • (ii) that its trailers are exempted under section 17.1,
    • (iii) that a certain number of its trailers are exempted under section 17.2, and
    • (iv) in respect of its full-aero box van trailers of the 2027 model year and subsequent model years,
      • (A) that the trailers conform to the applicable standard set out in subsection 33.1(1),
      • (B) that the trailers are grouped into one or more fleets in accordance with section 33.2 and the fleet average CO2 value of each of its fleets conforms to the applicable fleet average CO2 emission standard set out in subsection 33.3(2), or
      • (C) that the trailers are covered by an EPA certificate, bear the U.S. information label referred to in subparagraph 53(d)(i) and conform either to the emission standard referred to in the EPA certificate or to a CO2 family emission limit that is lower than the fleet average CO2 emission standard applicable to the model year of the trailers under these Regulations.

(8) Subsection 48(3) of the Regulations is replaced by the following:

Statement when conforming to standards

(3) If an end of model year report contains any of the statements referred to in clause (2)(a)(ii)(A), subparagraph (2)(b)(i), clauses (2)(c)(i)(A) and (ii)(A), subparagraph (2)(d)(i) and clause (2)(d)(iv)(A) for a given model year, it must contain the number of heavy-duty vehicles or heavy-duty engines for each type referred to in paragraph 18(3)(a) or (b) or, in the case of trailers, the number of trailers for each type referred to in subsection 16.1(1) or subsections 33.1(1) and (2), as the case may be.

(9) The portion of subsection 48(4) of the Regulations before paragraph (b) is replaced by the following:

Statement when covered by EPA certificate

(4) If an end of model year report contains any of the statements referred to in clause (2)(a)(ii)(B), subparagraphs (2)(b)(ii) and (iii) and clauses (2)(c)(i)(B) and (C) and (ii)(B) and (B.1) and (2)(d)(iv)(C) for a given model year, it must contain the following information for each type of heavy-duty vehicle, heavy-duty engine or trailer, as the case may be:

  • (a) the number of vehicles or engines for each type referred to in paragraph 18(3)(a) or (b) or the number of trailers for each type referred to in subsection 33.1(1);

(10) Paragraph 48(4)(f) of the Regulations is replaced by the following:

  • (f) if an end of model year report contains the statement referred to in clause (2)(c)(i)(C) or (ii)(B.1), the number of heavy-duty engines sold in the United States that are of the same engine family.

(11) Subsection 48(5) of the Regulations is amended by adding “and” at the end of paragraph (a) and by repealing paragraph (b).

(12) Section 48 of the Regulations is amended by adding the following after subsection (5):

Statement for exempted engines

(5.1) If an end of model year report contains the statement referred to in clause (2)(c)(i)(E) or (ii)(D) for a given model year, the report must contain the number of engines that are installed in the tractors and vocational vehicles referred to in subsection 17(1) that the company has elected to exempt under subsection 17(1.1).

Statement for exempted trailers

(5.2) If an end of model year report contains the statement referred to in subparagraph (2)(d)(ii) or (iii) for a given model year, the report must contain the following information:

  • (a) in the case of the statement referred to in subparagraph (2)(d)(ii), the number of trailers that the company manufactured or imported for sale in Canada in 2018; and
  • (b) in the case of the statement referred to in subparagraph (2)(d)(iii),
    • (i) for each type of trailer, the number of trailers that the company manufactured or imported for sale in Canada for the model year in question, and
    • (ii) the number of trailers that the company has elected to exempt under section 17.2 for that model year.

(13) Paragraph 48(7)(n) of the French version of the Regulations is replaced by the following:

  • n) s’il y a lieu, le nombre de points relatifs aux émissions de CO2 calculé conformément au paragraphe 29(8) pour une limite d’émissions de la famille applicable au N2O inférieure à 0,04 g/BHP-h;

(14) Paragraph 48(7)(t) of the Regulations is replaced by the following:

  • (t) an identification of every instance in each fleet or subfleet, as the case may be, when the following credit multipliers were used:
    • (i) the 1.5 credit multiplier referred to in section 37 and subsections 38(4), 39(3) and 40(2), and
    • (ii) the credit multipliers referred to in section 40.1;

(15) Paragraph 48(7)(v) of the Regulations is replaced by the following:

  • (v) an accounting of the CO2 emission credits, early action credits and deficits and, if applicable, for each averaging set in respect of which the credit multiplier referred to in paragraph 45(2.1)(a) or (b) was used, a statement that the multiplier was used; and

(16) Section 48 of the Regulations is amended by adding the following after subsection (7):

Contents — trailers

(7.1) If an end of model year report contains the statement referred to in clause (2)(d)(iv)(B) for a given model year, the report must contain the following information:

  • (a) if applicable, a statement that the company has elected to exclude trailers from its fleets in accordance with subsection 33.2(2);
  • (b) an identification of all of its fleets and subfleets referred to in section 33.2;
  • (c) the fleet average CO2 emission standard set out in subsection 33.3(2) that applies to each of its fleets;
  • (d) for each fleet,
    • (i) the fleet average CO2 emission value, calculated in accordance with subsection 33.3(3), and
    • (ii) the family emission limit for each subfleet; and
  • (e) the number of trailers in each fleet and subfleet.

49 The heading before section 51 and sections 51 to 55 of the Regulations are replaced by the following:

Documentation

Engine installation

51 (1) A company that manufactures or imports a heavy-duty engine must ensure that every engine that is installed in a vehicle in Canada is accompanied by documentation respecting the engine and emission controls or by the address of the place or the website where that documentation may be obtained.

Contents

(2) The documentation must contain the following information:

  • (a) detailed installation procedures for the exhaust system, emission control system, aftertreatment devices and their components;
  • (b) all necessary steps for installing any diagnostic system required under part 86 of Title 40, chapter I, subchapter C, of the CFR;
  • (c) the limits on the types of use for the engine to ensure that the emission standards set out in these Regulations are complied with; and
  • (d) for each engine configuration, the fuel map results as described in section 535 of Title 40, chapter I, subchapter U, part 1036, subpart F, of the CFR or the powertrain testing results as described in section 630 of Title 40, chapter I, subchapter U, part 1036, subpart G, of the CFR and section 550 of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR, as the case may be.

Language

(3) The documentation must be provided in English, French or both official languages, as requested by the installer.

Tire maintenance

52 (1) In the case of tractors, vocational vehicles and trailers, a company must ensure that the documentation respecting tire maintenance and replacement is provided to the first retail purchaser of every vehicle or trailer.

Language

(2) The documentation must be provided in English, French or both official languages, as requested by that purchaser.

Records

Evidence of Conformity

Vehicle, engine or trailer covered by EPA certificate

53 For a heavy-duty vehicle, heavy-duty engine or trailer that is covered by an EPA certificate and that is sold concurrently in Canada and the United States or has a national emissions mark applied to it, evidence of conformity in respect of a company for the purposes of paragraph 153(1)(b) of the Act consists of

  • (a) a copy of the EPA certificate covering the vehicle, engine or trailer and, if applicable, a copy of the evidence of the EPA approval concerning the vehicle, the engine or the trailer as referred to in paragraph 27(6)(a), in paragraph 33.3(4)(a), in paragraph (a) of the description of A in subsection 40(1) or in paragraph 41(2)(a), as the case may be;
  • (b) one or both of the following:
    • (i) a document demonstrating that the vehicles, the engines or the trailers covered by the EPA certificate are sold concurrently in Canada and the United States,
    • (ii) a document demonstrating that the vehicle, the engine or the trailer covered by the EPA certificate bears the national emissions mark;
  • (c) a copy of the records submitted to the EPA in support of the application for the EPA certificate in respect of the vehicle, engine or trailer and any application for an amendment to that EPA certificate and any records submitted to the EPA to maintain that EPA certificate; and
  • (d) a U.S. emission control information label or, in the case of a heavy-duty engine, a U.S. engine information label that is permanently affixed to the vehicle, the engine or the trailer in the form and location set out in
    • (i) section 35 of Title 40, chapter I, subchapter C, part 86, subpart A, of the CFR, and section 135 of Title 40, chapter I, subchapter U, part 1037, subpart B, of the CFR, for the applicable model year of the heavy-duty vehicle or trailer, and
    • (ii) section 35 of Title 40, chapter I, subchapter C, part 86, subpart A, of the CFR, and section 135 of Title 40, chapter I, subchapter U, part 1036, subpart B, of the CFR, for the applicable model year of the heavy-duty engine.

Paragraph 153(1)(b) of Act

54 (1) For the purposes of paragraph 153(1)(b) of the Act, a company must obtain and produce evidence of conformity for a heavy-duty vehicle, heavy-duty engine or trailer — other than one referred to in section 53 — in a form and manner satisfactory to the Minister instead of as specified in that section.

Time of submission

(2) For greater certainty, a company must submit the evidence of conformity to the Minister before importing a heavy-duty vehicle, heavy-duty engine or trailer or applying a national emissions mark to it.

Subsection 153(2) of Act

55 For greater certainty, a company that imports a heavy-duty vehicle, heavy-duty engine or trailer or applies a national emissions mark to it under subsection 153(2) of the Act is not required to provide the Minister with the evidence of conformity referred to in subsection 54(1) before importing it or applying a national emissions mark to it, but must provide that evidence in accordance with subsection 153(2) of the Act before the vehicle, the engine or the trailer leaves the possession or control of the company and, in the case of a vehicle, before it is presented for registration under the laws of a province or of an Aboriginal government.

50 (1) Paragraph 56(2)(c) of the Regulations is replaced by the following:

  • (c) for a vehicle that is covered by an EPA certificate, the vehicle family or the applicable test group;

(2) Paragraph 56(3)(f) of the Regulations is replaced by the following:

  • (f) the engine family’s identification code;

51 Section 57 of the Regulations is replaced by the following:

Evidence of number of engines sold

57 If subsection 13(7.1) or (8) applies in respect of a company’s heavy-duty engines, the company must maintain records demonstrating the number of heavy-duty engines sold by it in the United States that are of the same engine family.

52 Section 58 of the Regulations is replaced by the following:

Vocational tractor

58 For the purposes of section 28, in the case of a tractor that conforms to the emission standards applicable to vocational vehicles instead of those applicable to tractors, the company must maintain records demonstrating that the tractor is a vocational tractor.

Trailers

Contents — fleets of trailers

58.1 (1) A company must maintain records containing the following information for each of its fleets of trailers in respect of which an election has been made under subsection 33.3(1):

  • (a) the model year;
  • (b) the fleet average CO2 emission standard; and
  • (c) the fleet average CO2 emission value and the values and data used in calculating that value.

Contents — trailers

(2) A company must maintain records containing the following information for each of its full-aero box van trailers, partial-aero box van trailers, non-box trailers and non-aero box van trailers:

  • (a) the model year;
  • (b) the type of trailer;
  • (c) if applicable, the CO2 emission standard or fleet average CO2 emission standard that applies to the type of trailer;
  • (d) for a trailer that is covered by an EPA certificate, the trailer family’s identification code;
  • (e) the name and street address of the plant where the trailer was manufactured;
  • (f) the trailer’s identification number;
  • (g) if applicable, the CO2 emission rate that applies to the trailer and the values and data used in calculating that rate; and
  • (h) the name and the street or mailing address of the first retail purchaser of the trailer in Canada.

53 (1) The portion of subsection 59(1) of the Regulations before paragraph (a) is replaced by the following:

Maintenance of records

59 (1) For heavy-duty vehicles, heavy-duty engines and trailers, a company must maintain in writing or in a readily readable electronic or optical form for each model year

(2) Paragraph 59(1)(b) of the Regulations is replaced by the following:

  • (b) the evidence of conformity and records referred to in sections 53 and 54 for a period of at least eight years after the day on which the main assembly of the vehicle or manufacture of the engine or trailer was completed;

(3) Paragraph 59(1)(d) of the English version of the Regulations is replaced by the following:

  • (d) the records referred to in section 58 for a period of at least three years after the end of the calendar year that corresponds to the model year.

54 Paragraph 59.1(d) of the Regulations is replaced by the following:

  • (d) the make, model, if applicable, and model year of the vehicles, engines and trailers that are covered by the EPA certificate.

55 Sections 60 to 63 of the Regulations are replaced by the following:

Importation for exhibition, demonstration, evaluation or testing

60 (1) The declaration referred to in paragraph 155(1)(a) of the Act must be signed by the person referred to in that paragraph or their duly authorized representative and must contain

  • (a) the importer’s name, email address, telephone number, street address and, if different, mailing address;
  • (b) the name of the manufacturer of the vehicle, engine or trailer;
  • (c) the expected date of the importation;
  • (d) in the case of a vehicle, the vehicle’s class, make, model, model year and identification number;
  • (e) in the case of an engine, a description of the engine;
  • (f) in the case of a trailer, the trailer’s make, model year, identification number and model or, if there is no model, its type, length and axle configuration;
  • (g) a statement that the vehicle, engine or trailer will be used in Canada solely for purposes of exhibition, demonstration, evaluation or testing; and
  • (h) the date on which the vehicle, the engine or the trailer will be removed from Canada or destroyed.

Filing of declaration

(2) The declaration must be filed with the Minister

  • (a) before the import of the vehicle, engine or trailer; or
  • (b) in the case of a company whose annual world production of vehicles, engines or trailers is 2500 or more, as described in paragraph (a) or quarterly.

Rental Rate

Rental rate

61 The annual rental rate to be paid to a company by the Minister under subsection 159(1) of the Act, prorated on a daily basis for each day that a vehicle, engine or trailer is made available, is 21% of the manufacturer’s suggested retail price of the vehicle, engine or trailer.

Application for Exemption

Application

62 (1) A company applying under section 156 of the Act for an exemption from conformity with any standard prescribed under these Regulations must, before importing a vehicle or engine or applying a national emissions mark to a vehicle or engine, submit in writing to the Minister

  • (a) its name, street address and, if different, its mailing address;
  • (b) the province or country under the laws of which it is established;
  • (c) the section number, title and text or substance of the standards from which an exemption is sought;
  • (d) the duration requested for the exemption;
  • (e) the reason for requesting an exemption; and
  • (f) if the company is requesting that the information submitted be treated as confidential under section 313 of the Act, the reasons for the request.

Exemption — paragraph 156(1)(a) of the Act

(2) If the basis of an application for an exemption is substantial financial hardship, the company must include in the submission to the Minister

  • (a) the world production of vehicles or engines manufactured by the company or by the manufacturer of the model that is the subject of the application in the 12-month period beginning two years before the beginning of the period in respect of which the exemption is sought;
  • (b) the total number of vehicles or engines manufactured for, or imported into, the Canadian market in the 12-month period beginning two years before the beginning of the period in respect of which the exemption is sought;
  • (c) technical and financial information demonstrating in detail why conformity to the standards referred to in paragraph (1)(c) would create substantial financial hardship, including
    • (i) a list of each of the items that would have to be altered in order to achieve conformity,
    • (ii) an itemized and detailed description of the estimated cost to make the alterations referred to in subparagraph (i)
      • (A) at the end of one year after the day on which the application is submitted, if the duration of the requested exemption is for a period of one year or more but less than two years,
      • (B) at the end of two years after the day on which the application is submitted, if the duration of the requested exemption is for a period of two years or more but less than three years, or
      • (C) at the end of three years after the day on which the application is submitted, if the duration of the requested exemption is for a period of three years,
    • (iii) the estimated price increase per vehicle or engine to counter the total costs incurred under subparagraph (ii) and a statement of the anticipated effect of each such price increase, and
    • (iv) corporate balance sheets and income statements for the three fiscal years before the filing of the application;
  • (d) a description of the company’s efforts to have its vehicles or engines conform to the standards from which the exemption is sought, including
    • (i) a description of any other means of achieving conformity that were considered and the reasons for rejecting each of them, and
    • (ii) a description of the steps to be taken while the exemption is in effect and the estimated date by which conformity will be achieved through design changes to or the termination of the production of non-conforming vehicles or engines; and
  • (e) a copy of the research, development and testing documentation establishing that an exemption would not substantially diminish the control of emissions of the vehicle or engine, including
    • (i) the reasons why not conforming to the prescribed standards would not substantially diminish the control of emissions of the vehicle or engine, and
    • (ii) a description of other means of achieving conformity with the prescribed standards that were considered by the company and the reasons for rejecting each of them.

Exemption — paragraph 156(1)(b) of Act

(3) If the basis of an application for an exemption is the development of new emission monitoring or emission control features that are equivalent or superior to those that conform to the prescribed standards, the company must include in the submission to the Minister

  • (a) a description of the new features;
  • (b) a copy of the research, development and testing documentation establishing the innovative nature of the new features;
  • (c) an analysis of how the level of performance of the new features is equivalent or superior to the level of performance required by the prescribed standards, including
    • (i) a detailed description of how a vehicle or engine equipped with the new features would, if exempted, differ from a vehicle or engine that conforms to the prescribed standards, and
    • (ii) the results of tests conducted on the new features that demonstrate a level of performance that is equivalent or superior to that required by the prescribed standards;
  • (d) evidence that an exemption would facilitate the development or the field evaluation of the vehicle or engine; and
  • (e) a statement as to whether the company intends, at the end of the exemption period,
    • (i) to have the vehicle or engine conform to the prescribed standards,
    • (ii) to apply for a further exemption, or
    • (iii) to request that the prescribed standards be amended to incorporate the new features.

Exemption — paragraph 156(1)(c) of Act

(4) If the basis of an application for an exemption is the development of new kinds of vehicles, engines or vehicle or engine systems or components, the company must include in the submission to the Minister

  • (a) a copy of the research, development and testing documentation establishing that an exemption would not substantially diminish the control of emissions of the vehicle or engine, including
    • (i) a detailed description of how the vehicle or engine equipped with the new kinds of vehicle systems or components would, if exempted, differ from one that conforms to the prescribed standards,
    • (ii) the reasons why not conforming to the prescribed standards does not substantially diminish the control of emissions of the vehicle or engine, and
    • (iii) a description of other means of achieving conformity that were considered and the reasons for rejecting each of them;
  • (b) evidence that an exemption would facilitate the development or the field evaluation of the vehicle or engine; and
  • (c) a statement as to whether the company intends, at the end of the exemption period, to have the vehicle or engine conform to the standards prescribed by these Regulations.

New exemption

(5) If a company wishes to obtain a new exemption to take effect after the expiry of an exemption referred to in subsection (3) or (4), the company must submit, in writing, to the Minister

  • (a) the information required under subsection (3) or (4), as the case may be; and
  • (b) a statement of the total number of vehicles or engines sold in Canada under the expiring exemption.

Defect Information

Notice of defect

63 (1) The notice of defect referred to in subsections 157(1) and (4) of the Act must contain the following information:

  • (a) the name of the company giving the notice and its street address and, if different, mailing address, and the name, email address, telephone number and, if any, facsimile number of the appropriate contact person;
  • (b) in the case of vehicles, the range or ranges of vehicle identification numbers for the vehicles in respect of which the notice is given, if known, and, for each of those vehicles, its make, model, model year and the period during which it was manufactured;
  • (c) in the case of engines, for each engine in respect of which the notice is given, its make, model, model year and the period during which it was manufactured;
  • (d) in the case of trailers, the range or ranges of trailer identification numbers for the trailers in respect of which the notice is given, if known, and, for each of those trailers,
    • (i) its make,
    • (ii) its model or, if there is no model, its type, length and axle configuration,
    • (iii) its model year, and
    • (iv) the period during which it was manufactured;
  • (e) the total number of vehicles, engines or trailers in respect of which the notice is given or, if the total number is not known, the estimated number, and the number or estimated number of vehicles, engines or trailers in each identifying classification;
  • (f) the estimated percentage of the potentially affected vehicles, engines or trailers that contain the defect;
  • (g) a description of the defect;
  • (h) an evaluation of the pollution risk arising from the defect;
  • (i) a statement of the measures to be taken to correct the defect; and
  • (j) a chronology of the principal events that led to the determination of the existence of the defect, if known.

Form of notice

(2) The notice of defect must be given in writing and, when given to a person other than the Minister, must be

  • (a) in both official languages; or
  • (b) in the person’s official language of choice, if it is known.

Initial report

(3) A company must, within 60 days after giving a notice of defect, submit to the Minister the initial report referred to in subsection 157(7) of the Act containing

  • (a) any changes to the information referred to in subsection (1);
  • (b) if not already provided in the notice, the range or ranges of vehicle or trailer identification numbers;
  • (c) if not already provided in the notice, the total number of vehicles, engines or trailers in respect of which the notice was given and the number of vehicles, engines or trailers in each identifying classification;
  • (d) if not already provided in the notice, a chronology of the principal events that led to the determination of the existence of the defect; and
  • (e) copies of all notices, bulletins and other circulars issued by the company in respect of the defect, including a detailed description of the nature and physical location of the defect with diagrams and other illustrations, as necessary.

Quarterly reports

(4) If a company submits an initial report under subsection (3), it must submit, within 45 days after the end of each quarter, quarterly reports to the Minister respecting the defect and its correction that contain the following information:

  • (a) the number, title or other identification assigned by the company to the notice of defect;
  • (b) if applicable, the revised number of vehicles, engines or trailers in respect of which the notice of defect was given;
  • (c) the date on which the notice of defect was given to the current owners of the affected vehicles, engines or trailers and the dates of any follow-up communications with those owners in respect of the notice; and
  • (d) the total number or percentage of vehicles, engines or trailers repaired by or on behalf of the company, including vehicles, engines or trailers requiring inspection only.

Applicable standard — CO2 emissions

(5) For the application of section 157 of the Act, the CO2 emission standard that applies

  • (a) to Class 2B and Class 3 heavy-duty vehicles and cab-complete vehicles — other than those that are vocational vehicles — or to spark-ignition engines that conform to the alternative CO2 emission standard referred to in section 25, is the product of 1.1 multiplied by the CO2 emission value for that vehicle configuration, rounded to the nearest gram per mile;
  • (b) to vocational vehicles, is the result of the GEM computer simulation model using the parameters specified in subsection 26(2);
  • (c) to tractors of the 2020 model year or an earlier model year, is the result of the GEM computer simulation model using the parameters specified in subsection 27(2), except that the coefficient of aerodynamic drag may originate from a bin for which the coefficient of aerodynamic drag is higher than that of the bin of the subject vehicle;
  • (d) to tractors of the 2021 model year or a subsequent model year, is the result of the GEM computer simulation model using the parameters specified in subsection 27(2);
  • (e) to heavy-duty engines — other than engines referred to in paragraph (f) or (g) — is the product of 1.03 multiplied by the applicable standard set out in section 30 for that engine, or in the case of an engine that is grouped into a fleet referred to in section 18, the product of 1.03 multiplied by the deteriorated emission level applicable to the fleet;
  • (f) to heavy-duty engines of the 2014 to 2016 model years that conform to the alternative CO2 emission standard referred to in subsection 31(1), is the product of 1.03 multiplied by the alternative CO2 emission standard;
  • (g) to heavy-duty engines of the 2013 to 2016 model years that conform to the alternative CO2 emission standard referred to in subsection 31(2), is the product of 1.03 multiplied by the alternative CO2 emission standard; and
  • (h) to box van trailers that conform to the CO2 emission standard referred to in subsection 33.1(1) or (2), is the result of the compliance equation set out in section 515(a) of Title 40, chapter I, subchapter U, part 1037, subpart F, of the CFR.

Applicable standard — design

(6) For the purposes of section 157 of the Act, the standard that applies to a non-box trailer or a non-aero box van trailer is that set out in section 16.1.

56 The Regulations are amended by replacing “excluding those referred to in the definition vocational vehicle in subsection 1(1)” and “, excluding those referred to in the definition vocational vehicle in subsection 1(1)” with “other than those that are vocational vehicles” in the following provisions:

  • (a) paragraph 9(1)(k);
  • (b) paragraph 13(1)(a);
  • (c) the portion of subsection 22(6) before paragraph (a);
  • (d) the portion of subsection 23(1) before the formula;
  • (e) the portion of subsection 24(1) before paragraph (a), subsection 24(2), the portion of subsection 24(3) before paragraph (a) and the portion of subsection 24(4) before paragraph (a);
  • (f) the portion of paragraph 35(1)(a) before the formula;
  • (g) the portion of paragraph 41(1)(a) before the formula;
  • (h) the portion of paragraph 48(2)(a) before subparagraph (i), the portion of subparagraph 48(7)(d)(i) before clause (A) and the portion of subparagraph 48(7)(e)(i) before clause (A);
  • (i) the portion of paragraph 49(1)(a) before subparagraph (i); and
  • (j) the portion of paragraph 56(1)(a) before subparagraph (i).

57 The Regulations are amended by replacing “tonne-mile” with “short ton-mile” in the following provisions:

  • (a) the portion of subsection 38(2) before the formula; and
  • (b) the description of (A – B) in subparagraph 41(1)(b)(i) and the description of (A – B) in subparagraph 41(1)(c)(i).

58 The Regulations are amended by adding, after section 64, the schedule set out in the schedule to these Regulations.

On-Road Vehicle and Engine Emission Regulations

59 (1) The definition useful life in subsection 1(1) of the On-Road Vehicle and Engine Emission Regulations (see footnote 35) is replaced by the following:

useful life, in respect of a vehicle or engine, means the period of time or use, whether full or intermediate, during which an emission standard applies as set out in the CFR. (durée de vie utile)

(2) Subsection 1(1) of the Regulations is amended by adding the following in alphabetical order:

auxiliary power unit means a device that is installed on a tractor and that is equipped with a diesel engine to generate power for purposes other than propelling the tractor. (groupe électrogène d’appoint)

tractor means a heavy-duty vehicle that has a GVWR of more than 11 793 kg (26,000 lb) and that is manufactured primarily for pulling a trailer but not for carrying cargo other than cargo in the trailer. (tracteur routier)

(3) Paragraph 1(2)(c) of the Regulations is replaced by the following:

  • (c) standards or evidence of conformity of any authority other than the EPA and, in the case of the standards referred to in paragraph 12(b), the California Air Resources Board.

60 Subparagraph 13(a.1)(iii) of the Regulations is replaced by the following:

  • (iii) the family emission limit established by the company for the evaporative emission family to which the vehicle belongs, which shall not exceed the applicable family emission limit cap set out in section 1813 of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR;

61 The Regulations are amended by adding the following after section 15:

Tractors Equipped with an Auxiliary Power Unit

15.1 Tractors of the 2021 and later model years that are equipped with an auxiliary power unit must, in respect of that unit, conform to the following particulate matter exhaust emission standards for the model year of tractor in question for the duration of unit’s useful life, which is set out in section 101(g) of Title 40, chapter I, subchapter U, part 1039, subpart B, of the CFR:

  • (a) for the 2021 to 2023 model years, the particulate matter exhaust emission standard set out in section 106(g)(1) of Title 40, chapter I, subchapter U, part 1037, subpart B, of the CFR; and
  • (b) for the 2024 and later model years, the particulate matter exhaust emission standard set out in section 699 of Title 40, chapter I, subchapter U, part 1039, subpart G, of the CFR.

62 Sections 24.6 and 24.7 of the Regulations are replaced by the following:

24.6 For the 2017 and later model years, the average cold NMHC value for a company’s fleet that is composed of all of its light-duty vehicles and light light-duty trucks of a specific model year that are fueled by gasoline shall not exceed the applicable fleet average cold NMHC standard set out in Table 5 to section 1811 of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR.

24.7 For the 2017 and later model years, the average cold NMHC value for a company’s fleet that is composed of all of its heavy light-duty trucks and medium-duty passenger vehicles of a specific model year that are fueled by gasoline must not exceed the fleet average cold NMHC standard set out for heavy light-duty trucks in Table 5 to section 1811 of Title 40, chapter I, subchapter C, part 86, subpart S, of the CFR.

63 The portion of subsection 32.7(3) of the French version of the Regulations before paragraph (a) is replaced by the following:

(3) Si, dans une année de modèle, l’un ou l’autre des sous-parcs de l’entreprise comprend une ou plusieurs motocyclettes qui respectent une limite d’émissions de la famille supérieure à la norme d’émissions de HC+NOx applicable prévue à l’article du CFR qui est mentionné à l’alinéa 17a) ou prévue au paragraphe 17.1(2) ou à la norme d’émissions par perméation du réservoir de carburant prévue à cet article, l’entreprise inclut, dans son rapport de fin d’année de modèle, les renseignements suivants pour chaque sous-parc en cause :

64 Subsection 33(1) of the Regulations is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

  • (d) tractors that are equipped with an auxiliary power unit, in respect of the unit, in section 125 of Title 40, chapter I, subchapter U, part 1039, subpart B, of the CFR.

65 (1) The portion of subsection 35(1) of the Regulations before paragraph (b) is replaced by the following:

35 (1) Subject to subsection (1.1), in the case of a vehicle or engine that is covered by an EPA certificate and that, as authorized by subsection 19(1), conforms to the certification and in-use standards referred to in the EPA certificate instead of the standards set out in sections 11 to 17, evidence of conformity for the purpose of paragraph 153(1)(b) of the Act in respect of a company shall consist of

  • (a) a copy of the EPA certificate covering the vehicle or engine and, in the case of a tractor that is equipped with an auxiliary power unit, a copy of the EPA certificate covering the unit;

(2) Subsection 35(1) of the Regulations is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

  • (e) in the case of a tractor of a specific model year that is equipped with an auxiliary power unit, the U.S. engine information label that is permanently affixed to the auxiliary power unit in the form and location set out in
    • (i) for the 2021 to 2023 model years, section 135 of Title 40, chapter I, subchapter U, part 1039, subpart B, of the CFR, and
    • (ii) for the 2024 and later model years, section 699(k) of Title 40, chapter I, subchapter U, part 1039, subpart G, of the CFR.

(3) Subsection 35(1.1) of the Regulations is replaced by the following:

(1.1) For the purpose of paragraph 153(1)(b) of the Act, if it is impracticable for a company to obtain the evidence of conformity referred to in subparagraph (1)(b)(i) or (ii) in respect of a vehicle or engine referred to in subsection (1), the company shall obtain and produce evidence of conformity for the vehicle or engine in a form and manner satisfactory to the Minister, instead of as specified in subsection (1), and submit that evidence to the Minister before importing the vehicle or engine or applying a national emissions mark to it.

66 The portion of paragraph 38(1)(a) of the Regulations before subparagraph (i) is replaced by the following:

  • (a) the records referred to in paragraph 153(1)(g) of the Act and the evidence of conformity referred to in paragraphs 35(1)(a) to (c), subsection 35(1.1), paragraphs 35.1(1)(a) to (c) and, if applicable, (e) and subsection 36(1) for a period of

67 Paragraph 39.1(1)(b) of the Regulations is replaced by the following:

  • (b) an indication of whether the import consists of
    • (i) a heavy-duty vehicle and, if applicable, a tractor that is equipped with an auxiliary power unit, or
    • (ii) a heavy-duty engine; and

Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations

68 The definition plug-in hybrid electric vehicle in subsection 1(1) of the English version of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (see footnote 36) is replaced by the following:

plug-in hybrid electric vehicle means a hybrid electric vehicle that has an energy storage system that can be recharged from an electric source that is not on board the vehicle. (véhicule électrique hybride rechargeable)

69 Section 18.4 of the Regulations is amended by adding the following after subsection (2):

Description of AH

(2.1) If the percentage in the fleet of full-size pick-up trucks of a model year that are equipped with mild hybrid electric technologies or strong hybrid electric technologies is less than the percentage set out in, depending on the technology used, section 1870(a)(1) or (2) of Title 40, chapter I, subchapter C, part 86, of the CFR, the allowance for the use of hybrid electric technologies referred to in the description of AH in subsection (1) is 10 grams of CO2 per mile for those trucks, if the percentage in the fleet of full-size pick-up trucks that are equipped with either mild hybrid electric technologies or strong hybrid electric technologies is equal to or greater than the percentage referred to in section 1870(a)(3) of Title 40, chapter I, subchapter C, part 86, of the CFR. The allowance may be calculated only for full-size pick-up trucks of the 2017 to 2021 model years.

Coming into Force

70 These Regulations come into force on the day that, in the sixth month after the month in which they are registered, has the same calendar number as the day on which they are registered or, if that sixth month has no day with that number, the last day of that sixth month.

SCHEDULE

(Section 58)

SCHEDULE

(Subsection 7(1))

National Emissions Mark

Image - Detailed information can be found in the surrounding text.

[9-1-o]

  • Footnote 1
    “Regulations for Greenhouse Gas Emissions from Commercial Trucks & Buses”. U.S. EPA: https://www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-commercial-trucks.
  • Footnote 2
    “United States–Canada Joint Statement on Climate, Energy and Arctic Leadership”. Available at http://pm.gc.ca/eng/news/2016/03/10/us-canada-joint-statement-climate-energy-and-arctic-leadership.
  • Footnote 3
    GHG emissions from the Canadian oil and gas sector accounted for 26% of total emissions in 2014.
  • Footnote 4
    “National Inventory Report 1990-2014: Greenhouse Gas Sources and Sinks in Canada”. UNFCCC (National Inventory Submissions 2016): http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/9492.php.
  • Footnote 5
    “Canada’s Second Biennial Report on Climate Change” (2016). Environment and Climate Change Canada: https://www.ec.gc.ca/GES-GHG/default.asp?lang=En&n=02D095CB-1.
  • Footnote 6
    The GVWR is the maximum allowable weight of a fully loaded vehicle, as specified in the design of the manufacturer, excluding the weight of any trailer and its freight.
  • Footnote 7
    The emission standards for heavy-duty vehicles and engines of the 2018 model year will continue to apply to future model years until the standards in the proposed Amendments come into effect.
  • Footnote 8
    These trailers include dry and refrigerated box van trailers, as well as non-box trailers, such as container chassis, flatbed and tanker trailers.
  • Footnote 9
    “Regulations for Greenhouse Gas Emissions from Commercial Trucks & Buses.” U.S. EPA: www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-commercial-trucks.
  • Footnote 10
    The GCWR is the maximum allowable weight of a fully loaded vehicle, as specified in the design of the manufacturer, including the weight of any trailer and its freight.
  • Footnote 11
    Devices that may be applied to trailers to reduce aerodynamic drag include trailer side skirts, underbody and rear fairings, and gap reducers.
  • Footnote 12
    Some credits obtained under the Regulations that are used to offset a deficit incurred as a result of the proposed Amendments would be multiplied by a set factor to reflect the change to the applicable useful life of some vehicles and engines that is used to calculate credits.
  • Footnote 13
    Available at www.tbs-sct.gc.ca/rtrap-parfa/analys/analystb-eng.asp.
  • Footnote 14
    The Phase 2 standards would be introduced in model year (MY) 2018 and increase in stringency in MYs 2021, 2024 and 2027. For analytical purposes, groups of three consecutive MYs are formed; thus, MY2027 is grouped with MYs 2028 and 2029.
  • Footnote 15
    All references to years in this statement pertain to calendar years, unless it is stated that reference is being made to a given model year of vehicle, engine or trailer.
  • Footnote 16
    In this analysis, the term “vehicle” refers to the whole vehicle, including the engine and any associated equipment, such as a trailer.
  • Footnote 17
    “Regulations for Greenhouse Gas Emissions from Commercial Trucks & Buses”. U.S. EPA: www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-commercial-trucks.
  • Footnote 18
    “MOVES and Other Mobile Source Emissions Models”. U.S. EPA: www.epa.gov/moves.
  • Footnote 19
    In this analysis, emissions of CO2, CH4 and N2O are converted into quantified GHG (CO2e) emissions using global warming potential (GWP) factors of 1, 25 and 298, respectively.
  • Footnote 20
    “Technical Update to Environment and Climate Change Canada’s Social Cost of Greenhouse Gas Estimates”. Department of the Environment: http://ec.gc.ca/cc/default.asp?lang=En&n=BE705779-1.
  • Footnote 21
    “Canada’s Energy Future 2016: Energy Supply and Demand Projections to 2040”. National Energy Board: https://www.neb-one.gc.ca/nrg/ntgrtd/ftr/2016/index-eng.html.
  • Footnote 22
    Pre-tax fuel prices were used in the analysis as taxes constitute transfer payments from one group to another and they are not considered as economic costs.
  • Footnote 23
    HFCs are currently widely used as refrigerants and have a much higher global warming potential than CO2. Thus, HFC emissions have a much greater global warming impact than a similar amount of CO2 emissions.
  • Footnote 24
    Regulations for Greenhouse Gas Emissions from Commercial Trucks & Buses”. U.S. EPA: www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-commercial-trucks.
  • Footnote 25
    The U.S. EPA projects that payback for vocational vehicles will occur in year four of ownership with the implementation of the final Phase 2 standards, which are incorporated into the proposed Amendments.
  • Footnote 26
    The cost estimates presented in this section are in 2012 Canadian dollars, using a 7% discount rate and a discounting base year of 2012, in accordance with TBS guidance relating to the “One-for-One” Rule.
  • Footnote 27
    The unrounded increase in annualized administrative costs is estimated to be $24,591, or $131 per stakeholder. The undiscounted wage rate is assumed to be $35 per hour (weighted hourly average).
  • Footnote 28
    The proposed Amendments would define small volume companies as manufacturers or importers of fewer than 200 vocational vehicles and tractors for sale in Canada in 2011, and fewer than 200 vocational vehicles and tractors for sale in Canada for the model year in question.
  • Footnote 29
    The “6×2” configuration is an example of an alternative drive-axle design that consists of a front steer axle and two rear axles, where only one of the rear axles is powered (i.e. a rear drive axle with two powered wheel positions among six total wheel positions on the vehicle).
  • Footnote 30
    “ecoTECHNOLOGY for Vehicles Program”. Department of Transport: www.tc.gc.ca/eng/programs/environment-etv-menu-eng-118.htm.
  • Footnote 31
    The public statement regarding the strategic environmental assessment for CARA is available at the following address: www.ec.gc.ca/ee-ea/default.asp?lang=en&n=4F7D3B45-1.
  • Footnote 32
    Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (SOR/2013-24). Department of the Environment: www.ec.gc.ca/lcpe-cepa/eng/regulations/detailReg.cfm?intReg=214.
  • Footnote 33
    “Compliance and Enforcement Policy for CEPA (1999) – March 2001”. Department of the Environment: www.ec.gc.ca/lcpe-cepa/default.asp?lang=En&n=5082BFBE-1.
  • Footnote 34
    SOR/2013-24
  • Footnote 35
    SOR/2003-2
  • Footnote 36
    SOR/2010-201
  • Footnote a
    S.C. 2004, c. 15, s. 31
  • Footnote b
    S.C. 1999, c. 33
  • Footnote c
    S.C. 2011, c. 1, s. 5