Friday, April 29, 2016

What are the various vehicle weight classes and why do they matter?

Question of the Month: What are the various vehicle weight classes and why do they matter?

Answer: Which Corporate Average Fuel Economy (CAFE) standard applies to my vehicle? What are the state emissions testing requirements for my vehicle? Would a medium-duty vehicle qualify for the plug-in electric drive motor vehicle tax credit? To answer these questions and determine which laws, regulations, and incentives may apply to your vehicle or fleet, you must first understand the specifics of the vehicle weight classifications.


You may recall learning about federal agencies and vehicle classes from our February Question of the Month. However, each agency defines vehicle classes differently. So this month, we will dig deeper into the specific vehicle weight classes set by three federal agencies. This guide will help you identify a Class 1 vehicle to a Heavy-Duty Vehicle 8b, and everything in between.

U.S. Department of Transportation Federal Highway Administration (FHWA)

The FHWA defines vehicles as Class 1 through 8, the most common categorization used in the fleet industry. The classes are based on a vehicle's gross vehicle weight rating (GVWR), which is the maximum operating weight of the vehicle, measured in pounds (lbs.). GVWR is set by the manufacturer and includes the total vehicle weight plus fluids, passengers, and cargo. The FHWA's vehicle classes (listed below) are used in the Fixing America's Surface Transportation (FAST) Act (e.g., as it relates to the National Highway Freight Program). The vehicle classes are also used by certain states to determine vehicle road and fuel taxes, access to roadways, and idle reduction and emissions reduction requirements.

  • Light-Duty Vehicle: less than (<) 10,000 lbs.
    • Class 1: <6,000 lbs. Example vehicle: Sedan or sport-utility vehicle (SUV)
    • Class 2: 6,001 – 10,000 lbs. Example vehicle: Utility van
  • Medium-Duty Vehicle: 10,001 – 26,000 lbs.
    • Class 3: 10,001 – 14,000 lbs. Example vehicle: Mini bus
    • Class 4: 14,001 – 16,000 lbs. Example vehicle: Step van
    • Class 5: 16,001 – 19,500 lbs. Example vehicle: Bucket truck
    • Class 6: 19,501 – 26,000 lbs. Example vehicle: School bus
  • Heavy-Duty Vehicle: greater than (>) 26,000 lbs.
    • Class 7: 26,001 – 33,000 lbs. Example vehicle: City transit bus
    • Class 8: >33,000 lbs. Example vehicle: Dump truck

For more vehicle examples, see the Types of Vehicles by Weight Class chart.

U.S. Environmental Protection Agency (EPA)

The EPA uses the following categories to certify vehicles based on emissions standards, in conjunction with the National Highway Traffic Safety Administration's CAFE standards to regulate fuel economy. The light-duty vehicle category is also used in Energy Policy Act vehicle acquisition requirements. Note that there is a distinction between vehicles and engines in the EPA's classification because there are separate emissions standards for each.

Passenger Vehicles
  • Light-Duty Vehicle: <8,500 lbs.
  • Medium-Duty Vehicle: 8,501 – 10,000 lbs.
Heavy-Duty Vehicles and Engines
  • General Trucks
    • Light-Duty Trucks: <8,500 lbs.
    • Heavy-Duty Vehicle Heavy-Duty Engine: >8,500 lbs.
  • Heavy-Duty Trucks
    • Light-Duty Truck 1 and 2: <6,000 lbs.
      • Split is based on loaded vehicle weight (LVW), where:
        • Light-Duty Truck 1: <3,750 lbs. LVW
        • Light-Duty Truck 2: 3,751 – 6,000 lbs. LVW
    • Light-Duty Truck 3 and 4: 6,001 – 8,500 lbs.
      • Split is based on adjusted loaded vehicle weight (ALVW, the average of the GVWR and the curb weight, which is the weight of the vehicle without passengers or cargo), where:
        • Light-Duty Truck 3: <5,750 lbs. ALVW
        • Light-Duty Truck 4: >5,750 lbs. adjusted ALVW
    • Heavy-Duty Vehicle 2b: 8,501 – 10,000 lbs.
    • Heavy-Duty Vehicle 3: 10,001 – 14,000 lbs.
    • Heavy-Duty Vehicle 4: 14,001 – 16,000 lbs.
    • Heavy-Duty Vehicle 5: 16,001 – 19,500 lbs.
    • Heavy-Duty Vehicle 6: 19,501 – 26,000 lbs.
    • Heavy-Duty Vehicle 7: 26,001 – 33,000 lbs.
    • Heavy-Duty Vehicle 8a: 33,001 – 60,000 lbs.
    • Heavy-Duty Vehicle 8b: >60,000 lbs.
  • Heavy-Duty Engines
    • Light Light-Duty Truck: <6,000 lbs.
    • Heavy Light-Duty Truck: 6,001 – 8,500 lbs.
    • Light Heavy-Duty Engine: 8,501 – 19,500 lbs.
    • Medium Heavy-Duty Engine: 19,501 – 33,000 lbs.
    • Heavy Heavy-Duty Engine Urban Bus: >33,000 lbs.


U.S. Census Bureau

The U.S. Census Bureau uses the following Vehicle Inventory and Use Survey classes to measure how many private and commercial trucks operate within the United States.

  • Light-Duty Vehicle: <10,000 lbs.

  • Medium-Duty Vehicle: 10,000 – 19,500 lbs.

  • Light Heavy-Duty Vehicle: 19,001 – 26,000 lbs.

  • Heavy-Duty Vehicle: >26,000 lbs.


States are not consistent, as some use one of the classifications above and others develop their own classifications for various state laws, regulations, and incentives related to vehicles. Be sure to check your state legislation and program guidance to determine which classifications apply. For example, the California Air Resources Board typically uses "heavy-duty" to describe vehicles with a GVWR greater than 14,000 lbs., which is referenced in the Mobile Source Emissions Reduction Requirements.


Looking for a more visual comparison of the various classifications? Check out the Alternative Fuels Data Center (AFDC) Vehicle Weight Classes and Categories chart.


Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

Friday, April 22, 2016

"Let’s Make OPEC Irrelevant, Not Just Laughable"

From T. Boone Pickens:
Nearly 40 years ago, OPEC nations met and brought America to her knees overnight. Long gasoline lines. Gasoline prices skyrocketed. Crippling economic conditions. Nearly two generations have passed since then. That translates to 185 million Americans - more than half of all Americans - who have never experienced that hardship or challenge. But those of us who did will never forget it.

My, how times have changed. OPEC nations - and a few others - gathered in Doha, Qatar the other day to address the slide in oil prices that threaten their economic viability and their national security. Powerful gathering? Hardly. Laughable is more like it.

Led by the Saudi contingent, with their own resolution in hand, they met to approve a freeze on production at January levels. It would have been a meaningless gesture, but, still, the markets took note. Oil prices perked in advance of the confab in anticipation of "positive" news.

That gathering was as fractured as the Mid East itself. There was no agreement. It was a comical sideshow on the global energy stage that proves, yet again, just how irrelevant OPEC has become these days.

There are much more important issues playing out on that same energy stage that will move oil prices higher in the coming months. Consider these operational outages and challenges:
  • U.S. rigs have fallen by 75 percent and 30 percent internationally. In the U.S. alone, that has led to a steeper and steeper decline of oil and natural gas production.
  • We're closing in on 300,000 lost jobs in the energy space in America.
  • We are witnessing production declines in China, Brazil, Mexico, Kazakhstan, Latin America, Europe and many other nations.
  • As if this is not enough, in the last month, we have seen production outages in Kuwait, Iraq, Nigeria and Venezuela.
And then there's Russia. They have moved in and out of the Middle East, having been kicked out in the 1970s. They are back in now, and whether it's for "diplomacy" or control of oil supplies, they are a growing factor. And, know this: Russia has never been a nation that's fostered stability. Instability is more their game.

Thankfully, we're now a nation with options. Credit stunning advances in horizontal drilling and fracking that position us rich in energy resources. We're now the number one natural gas producer in the world, and in the top three for crude oil production.

America's potential energy future has never been brighter. But there's a challenge, and that's whether we - as a nation - are willing to learn a lesson we should have learned 40 years ago, and that's putting our own energy future in our own hands.

The best way to do that is to utilize free market principles and inject serious fuel competition in the transportation mix. Governments at all levels can and should lead the way. One way to start: Open their fleet vehicle and fuel purchasing to competing domestic fuels. Let the cleaner, cheaper, domestic option - and taxpayers - win. Let's make OPEC and those other oil-producing nations irrelevant.

It will take an energy plan. It's like planting a tree. The best time to plant one was 40 years ago. The second best time is today. Count on me to make that a key issue in the coming presidential election.

Rather than spending hour after hour feuding over delegate selection strategies in the Republican primaries, or the role of Super Delegates on the Democratic side, candidates for public office at all levels should be elbowing each other out of the way to present the best energy program for America.

Sunday, March 27, 2016

73% Of Americans Prioritizing Alternative Energy

In a recent Gallup poll, 73% of respondents said they personally are prioritizing use of alternate energy sources. Past polls show that a majority of Americans have favored alternative energy since 2011, but "this year marks the first time a majority of Republicans and Republican-leaning independents prefer an alternative energy strategy:" 51%. One theory offered for this is that with lower gasoline prices, Americans feel there is less risk in shutting down some oil drilling in the U.S.

Here is the page on the Gallup website where they present the results of this poll.

Monday, March 21, 2016

What are some common questions related to the federal tax credits for alternative fuels and infrastructure?

Question of the Month: It's tax time! What are some common questions related to the federal tax credits for alternative fuels and infrastructure?

Answer: Tax season is upon us, and the recent federal tax incentive extensions and changes impact the alternative fuel and infrastructure tax credits.

The Consolidated Appropriations Act of 2016 (H.R. 2029) retroactively extended several tax credits, including the Alternative Fuel Excise and Alternative Fuel Infrastructure Tax Credits. It also included updates to calculation method for the Alternative Fuel Excise Tax Credit amounts, specifically for propane and liquefied natural gas (LNG). Below we discuss three recent frequently asked questions about these credits.

How have the Alternative Fuel Excise Tax Credit amounts changed for propane and LNG in 2016 and beyond?

The Alternative Fuel Excise Tax Credit applies to alternative fuel sold or used to operate a motor vehicle. Previously, the excise tax credit amount for propane and LNG was based on a volumetric basis ($0.50 per gallon). For fuel sold or used starting January 1, 2016, however, the excise tax credit amount for propane and LNG is based on an energy equivalent basis. This means the credit for propane is now measured per gasoline gallon equivalent (GGE) and LNG is measured per diesel gallon equivalent (DGE). Specifically, the updated Internal Revenue Service (IRS) Form 8849, Schedule 3 defines 2016 tax credit rates for propane and LNG as follows:
  • Propane: One GGE is equal to 5.75 pounds (lbs.) or 1.353 gallons of propane.
  • LNG: One DGE is equal to 6.06 lbs. or 1.71 gallons of LNG.
What does this mean for propane and natural gas retailers and fleets? In short, the tax credit for the same amount of fuel is now less:
  • The propane tax credit was previously $0.50 per gallon and is now $0.50 per GGE (1.353 gallons of propane), which equates to $0.37 per gallon.
  • The LNG tax credit was previously $0.50 per gallon and is now $0.50 per DGE (1.71 gallons of LNG), which equates to $0.29 per gallon.
The tax credit amount for compressed natural gas (CNG) is still based on the GGE, where one GGE is equal to 121 cubic feet.

Natural Gas Vehicles for America (NGVAmerica) provides additional information on federal tax incentives for LNG and CNG, and highlights the impacts of the recent tax credit changes in the article New Year Rings in Changes for CNG and LNG in 2016. The National Propane Gas association explains the excise tax equalization for propane.

So, you said the Alternative Fuel Excise Tax Credit was retroactively extended. Does that mean I can claim it for fuels sold or used in 2015?

Yes! Both the federal Alternative Fuel Excise Tax Credit and Biodiesel Mixture Excise Tax Credit were extended to cover 2015, meaning that propane, CNG, LNG, hydrogen, and biodiesel sold or used in 2015 are eligible for the federal tax credit. To file for the tax credit, registered claimants must submit a single one-time 2015 claim with IRS Form 8849, as well as the accompanying Schedule 3. The deadline to submit a claim for fuels sold or used in 2015 is August 8, 2016. Please note that the tax credit amount for propane and LNG sold or used in 2015 is based on the previous, volumetric rate of $0.50 per gallon.

For additional information on claiming the tax credit for fuels sold or used in 2015, please see IRS Notice 2016-05.

Are tax-exempt entities eligible for the Alternative Fuel Infrastructure Tax Credit?

While a tax-exempt entity, such as a school or state government fleet, may not be eligible to claim the Alternative Fuel Infrastructure Tax Credit directly, the entity selling the fueling infrastructure to the tax-exempt entity can claim the credit and pass the "discount" along to the fleet. According to Title 26 of the United States Code, Section 30C(e)(3), the entity selling the fueling equipment to the tax-exempt entity can be treated as the taxpayer and claim the Alternative Fuel Infrastructure Tax Credit, but only if the seller discloses the amount of the credit allowable to the tax-exempt purchaser in writing. In practice, this means the tax-exempt fleet would have the opportunity to use this information to request a discount. However, the infrastructure seller is not required to pass along any savings associated with the tax credit.

For more information on how tax-exempt entities may be eligible for the Alternative Fuel Infrastructure Tax Credit, please see the IRS Instructions for Form 8911.

Please note that the Technical Response Service recommends consulting a qualified tax professional or the IRS before making any tax-related decisions.


Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

Clean Energy CEO Strongly Supports Senator Inhofe letter to EPA

From Clean Energy:
March 18, 2016—CEO Andrew J. Littlefair today gave his strong support to Senator Jim Inhofe (R-OK) and the letter he delivered to EPA Administrator Gina McCarthy, detailing how the EPA should incorporate natural gas vehicles into remediation efforts when investigating the Volkswagen diesel emissions issue.

"Senator Inhofe has given the EPA a proven path to significantly remediate the excess diesel emissions caused by Volkswagen. Natural gas vehicles with the new 'Near Zero' engine, available on the market today, lower nitrogen oxide emissions by 90 percent or more over their diesel counterparts, and provide a cost-effective real-world answer to this challenge. Only a comprehensive solution including both light duty electric vehicles, and natural gas vehicles in the medium and heavy-duty trucking markets, will be able to correct the damage caused to our environment."

Natural gas fuel costs less per gallon than gasoline or diesel, depending on local market conditions. The use of natural gas fuel not only reduces operating costs for vehicles, but also reduces greenhouse gas emissions up to 30% in light-duty vehicles and 23% in medium to heavy-duty vehicles. In addition, nearly all natural gas consumed in North America is produced domestically.

You can find a copy of the Senator's letter here. He says:
Volkswagen has until March 24 to provide the court with an explanation as to how it plans to fix the emissions problem with the diesel vehicles that the company has acknowledged violate emission standards set under the Clean Air Act. I understand that EPA has requested Volkswagen produce light duty electric vehicles as part of the settlement: in February, Reuters reported EPA "was asking VW to produce electric vehicles at its plant in Chattanooga, Tennessee, and to help build a network of charging stations for electric vehicles in the United States." While EPA has favored EVs in the past and inevitably will continue to do so, EVs are not the only answer to mitigating the Volkswagen emissions issue. If the purpose of the settlement is to remediate the excess nitrogen oxide and other pollutants emitted by compromised Volkswagen light duty vehicles, requiring light duty EV production will have little overall impact. It is my understanding that new heavy-duty natural gas powered trucks can be equipped with engines that lower nitrogen oxide emissions by 90 percent or more compared to available diesel engines, and that these heavy-duty vehicles, if deployed, could offset significantly more pollution than electric vehicles, and in a much more cost-effective way.