EPA Names Idle Reduction Systems Eligible for Federal Excise Tax Exemptions

Last year, the U.S. Congress granted an exemption from the 12 percent federal excise tax for truck idle-reduction systems. Recently, the Environmental Protection Agency (EPA) released a list of approved idle reduction systems eligible for the federal excise tax exemption. The exemption applies to sales and installation of these systems since Oct. 4, 2008. 

Federal Tax Exemption

In the Energy Improvement and Extension Act (EIEA) of 2008 (PL 110-343), Section 206 excludes certain idling reduction devices and advanced insulation from the federal excise tax. This law amends section 4053 of the Internal Revenue Code, covering exemptions from the federal excise tax for parts and accessories for heavy trucks, tractors, and trailers, and applies to sales and installations of idling reduction devices after the enactment of the EIEA. One caveat is that fleets are advised to consult with their tax counsel prior to implementation to confirm eligibility for the tax exemption. 

For purposes of section 4053(9)(B) of the Internal Revenue Code, the EPA has determined the devices listed in this article reduce truck idling. For the purposes of EIEA, the effective date of the list is the first day after the enactment of EIEA. 

Truck fleets must ensure all devices installed on commercial motor vehicles conform to the Federal Motor Carrier Safety Regulations, 49 CFR 393, Parts and Accessories Necessary for Safe Operation. Regulations governing auxiliary power units are contained in Section 393.28, Section 393.30, and SubPart E of Part 393. These requirements dictate the specifications of installation of wiring and fuel systems for this equipment. 

Criteria for Exemption

An idle reduction technology is defined as the installation of a technology or device that: 

• Is affixed to a vehicle.
• Is designed to provide services (such as heat, air conditioning, and/or electricity) to the vehicle or equipment that would otherwise require the operation of the main drive engine while the vehicle or equipment is temporarily parked or remains stationary.
• Reduces unnecessary idling of such vehicle or equipment.  

Over the past seven years, EPA and the Department of Energy have evaluated idle reduction technologies/devices as part of grants, cooperative agreements, emissions testing, engineering analyses, modeling, demonstration projects, and external peer-reviewed reports to study the effects of idling on air quality, fuel consumption, and driver health. 

Based on this evaluation and research, EPA has determined a variety of idle reduction technologies save fuel and reduce emissions when compared to idling the main engine. Qualified devices were added to EPA's list of verified idling control technologies. In the future, additional technologies/devices similar in design, function, and effect can be added to the list after EPA evaluates their capabilities to determine if the device or devices may be accepted as verified technologies. 

EPA-approved idling reduction technologies are categorized by technology type and listed by company/model. For further information, see www.epa.gov/smartway/transport. 

Eliminating Zero MPG

The worst mileage a vehicle can get is 0 miles per gallon, which occurs when it idles. Reducing unnecessary idling is the simplest and easiest way for a fleet to reduce fuel costs. Besides wasting fuel, excess idling causes unnecessary emissions, noise pollution, and needless engine wear and tear. For example, International Truck & Engine Corp. estimates a typical truck fleet burns a half-gallon of fuel for every hour a truck idles - in the process, adding the equivalent of 40 miles of engine wear and tear.  

The amount of unnecessary idling varies by fleet, but some fleets have recorded idling as much as 35 percent of the time. Eliminating an hour of idling per day results in a significant savings across the entire fleet. A typical goal is to reduce engine idling time to less than 5 percent, which can be measured using telematic devices or GPS monitoring. 

An anti-idling program encourages drivers to turn off their engines when not in use. The biggest challenge to implementing an anti-idling program is educating drivers. Some drivers mistakenly believe that frequently starting and stopping an engine uses more gas and/or causes additional wear and tear on the vehicle. This may have been a concern in the past, but with today's fuel injection engines, starting systems are more efficient and don't require as much fuel to start an engine. 

Another common reason for excess idling is to operate an air conditioning system so a driver can stay cool in the summer or to operate a heater to stay warm in the winter. Fleet managers struggle with this form of idling because they want to reduce fuel costs, but not at the expense of driver morale. The reality is for many employees, their vehicles are also their offices. 

Using GPS to Curb Idling

A growing number of fleets are turning to vehicle recorders or GPS tracking systems as the most cost-effective tool to curb excessive idling and other "fuelish" driver behavior. 

For example, Genuine Parts determined its drivers were idling company trucks two to three hours per day - a pretty heavy hit in terms of fuel consumption. Drivers leave a distribution center and make 12-15 stops and deliveries per evening. They idle engines 15-20 minutes at each stop for a combination of reasons. Drivers typically want to maintain cab climate comfort, but many also fear frequent liftgate use will run down the battery. That fear was proven largely groundless. A test by the company's liftgate installer determined liftgates could actually be cycled 14 times before the battery ran down. 

Another fleet (that wished to be unidentified) began a fleet-wide rollout of GPS tracking units when a test program revealed that drivers were frequently sitting in their trucks, eating lunch, while running the air conditioning for up to an hour at a time. The only way to correct the problem is to find it, and the most cost-effective way to do so is to use a GPS system. 

Verizon Inc. has successfully reduced fuel costs by curbing unnecessary engine idling. Verizon estimates unnecessary idling costs it about $20 million. For calendar-year 2008, Verizon targeted a 3-percent reduction in the 53 million gallons of fuel used by company vehicles. Most are light- and medium-duty trucks. Verizon uses a combination of GPS tracking and employee education efforts to curb unnecessary engine idling. GPS tracking systems have been installed in about 25 percent of company trucks. 

Anti-idling programs are being implemented not only by private fleets, but also the public sector. A growing number of municipal fleets are looking to curb idling to reduce fuel costs and cut tailpipe emissions. One example is the city of Minneapolis, which passed a law limiting fleet vehicle idling to three minutes, except in traffic. Another example is Polk County in Florida. For the past three years, Bob Stanton, fleet management director for Polk County, has utilized a GPS system, tracking the users of the county's 2,000 vehicles and pieces of equipment. Stanton sends a monthly idle history report via e-mail to each division director. "If the results are positive, I mention that in the e-mail. If the results are worse or need attention in a certain area, I mention that, too," he said. "My correspondence isn't judgmental; the manager must determine if, in their specific application, the idling amount was justified or requires further study." 

Alternatives to Long Duration Idling

The many alternatives to engine idling range from no cost to several thousand dollars. The alternatives can be divided into two broad categories: 

• Behavioral change.
• Technology-based.  

Behavioral Change: Education about the impacts and adverse effects of long-duration idling can help change behavior. Informing the driver or operator about the fuel consumption, emissions, and the potential health risks plays an important part in changing behavior. 

Fleet managers can offer financial incentives to drivers to reduce idling. Many large truck fleets already offer these incentives and have reported success in reducing idling times below national averages. However, simply instituting a company "no-idling" policy isn't enough to deter a driver or operator from idling in extreme weather conditions - education and incentives are only a partial solution. That's where technology solutions come into play. 

Technology-based: For technology-based alternatives, the list is further subdivided into three categories: 

Automatic engine shutdown/start-up: An automatic engine shutdown/start-up system controls the engine start and stop, based on a set time period or ambient temperature and other parameters (e.g., battery charge). The application for ambient temperature addresses the issue of cab comfort. For example, a driver can set the system to turn on the engine and heat when the outside temperature reaches 65 degrees F. For trucks, these devices are available from some engine manufacturers and cost $900-$1,200. 

Direct Fired Heater: These are small, lightweight devices that provide heat only. They cost about $1,000 and are available at the engine manufacturer level. 

Auxiliary Power Units/Generator Sets: These small, diesel-powered engines (5 to 10 horsepower) are installed on the truck to provide air conditioning, heat, and electrical power to run appliances.