Written by Jostein Solheim, chief executive of Ben & Jerry’s, a division of Unilever, an international food and consumer products company.
More than 90 percent of the ice cream that Ben & Jerry’s sells in the United States is manufactured in our home state of Vermont, which is not exactly centrally located in the middle of the country. That pint of Cherry Garcia in your freezer covered a lot of miles in the back of a truck.
There are costs to all those miles: expenses to our company for fuel and logistics and significant environmental costs that we all pay in rising global greenhouse gas emissions and accelerating climate change. That’s why our company has an interest in policies that deliver the next generation of modern, innovative and efficient long haul over-the-road trucks.
This is an important policy to get right. Freight trucks make up only 7 percent of the vehicles on the road, but already use more than 25 percent of the fuel. It is crucial to put strong standards in place now because heavy-duty trucks are the fastest-growing single source of carbon pollution in the U.S.
Existing truck fuel-efficiency standards cover model years 2014 through 2017, and they are already bringing cost-effective solutions to market. Proposed rules covering model years 2018 and beyond promise to do more of the same. But we can, and frankly must, do better. We believe a 40 percent reduction in fuel consumption by 2025 – a stronger standard than what has been initially proposed by the Environmental Protection Agency – is technologically feasible and would yield even greater economic and environmental benefits.
Of course, the idea of new standards has not been universally embraced.
Jeremy Anwyl, chief executive of Trucks.com, recently argued that if more efficient trucks were in fleet owners’ economic interest, market forces would encourage the production of such trucks in the absence of regulation.
On the face of it, this sounds like it should be true, but history has shown that efficiency gains don’t often come on their own. They require smart and strategic policies that drive innovation. We know that without long-term standards in place to level the playing field, truck manufacturers would find it much harder to commit to the multi-year investment of bringing fuel-efficient technologies to market.
The track record of automakers with the fuel efficiency of passenger cars makes a good point of comparison. Back in April 2008, the sales-weighted fuel economy (window sticker) of new vehicles was about 21.2 miles per gallon, according to the University of Michigan Transportation Research Institute. The average accounts for the mix of sedans, SUVs and trucks that are sold each month.
For over 20 years, fuel-efficiency standards for cars essentially plateaued and there was relatively little improvement. But since the first meaningful standards were adopted in 2010, we’ve seen a rapid change in the industry. Companies are now investing heavily in the development and manufacture of far more fuel-efficient vehicles, which has resulted in significant savings for consumers, economic benefits for auto manufacturers and suppliers, and significant reductions in gasoline consumption and carbon pollution. The average sales-weighted fuel economy of new vehicles in April 2016 was 25.2 mpg, according to the University of Michigan.
As Mr. Anwyl points out, fleet owners’ appetite for fuel-efficiency innovations is different when diesel is $2.50 a gallon rather than $4.50 a gallon. However, we know that fossil fuel prices are volatile and higher efficiency standards act as a hedge against future increases in fuel costs.
Given the long lead time required to scale up manufacturing, companies can’t just flip a switch to produce more efficient products when fuel prices spike. Long-term standards give manufacturers the market certainty needed to develop fuel-efficient technology. In turn, the availability of fuel-efficient trucks insulates companies like ours from fuel price spikes, and ultimately protects customers from higher prices. As a shipper that bears the bulk of fuel costs through fuel surcharges, we may value fuel-efficient trucks even more than trucking companies do, but because we don’t purchase the trucks, market forces alone will not ensure the availability of cleaner trucks.
Extensive analyses, including those from independent organizations such as the National Academies of Science and the Southwest Research Institute, as well as data from the Department of Energy’s SuperTruck program, have shown that a 40 percent reduction in truck fuel consumption by 2025 is feasible and cost effective. While trucks meeting strong standards may cost more upfront, operators will see net savings in fuel costs over the life of the truck. And that’s good news for our fans and consumers too – in fact, the Consumer Federation of America estimates that strong fuel-economy standards could save the average household $250 a year. What’s not to love?
Mr. Anwyl asks whether the trucking industry or consumers should bear the costs of greater fuel efficiency. The truth is, we already pay high costs for inefficient trucks, both financially and environmentally. The better question to ask is how will we share the savings that come from innovative advances in fuel economy among trucking companies, shippers like us, and consumers?
At Ben & Jerry’s, we are committed to doing our part in the fight against global warming.
We have a goal to reduce our carbon footprint across our entire business 80 percent by 2050. We are starting with the cow and continuing to the empty pint container. We are working to reduce emissions on our dairy farms through innovative manure management technologies, and we have installed solar panels at our flagship factory in Waterbury, Vermont. But we know we can’t hit our goal alone, and the global economy will not reduce greenhouse gas emissions fast enough to avert catastrophic climate change through the voluntary efforts of companies and industries. We need smart, targeted policies to keep our economy thriving as we address the urgent climate challenge.
Strong truck standards will help further both our economic and environmental goals; they will help us reduce our fuel costs; they will drive the innovation needed to make fuel-efficient trucks available; and they will help us tackle global warming. Getting this right – and doing it now – will ensure better outcomes for everyone for years to come. At Ben & Jerry’s, and all across the United States, we’ve got to be in it for the long haul.
Editor’s note: Jostein Solheim, a Unilever executive from Norway, became chief executive of Ben & Jerry’s in 2010. His nickname is Scooper Man and his favorite flavor is Chunky Monkey.