COLUMBUS, Ind.—What will make a bigger difference to global warming: sleek electric sedans like those made by
or heavy duty trucks, powered by the sort of engines that
is testing at its research center here just south of Indianapolis?
The answer is the latter, for a simple reason: Most of the world thinks like a Cummins customer, not a Tesla customer. A Tesla buyer isn’t trying to save money: It is “an emotional buy,” says Wayne Eckerle, Cummins’s head of research. Cummins customers are commercial truck operators: “They don’t buy on emotion. At all.” Committed as Cummins is to combating climate change, any innovation it offers must meet one simple rule: pay for itself within 18 months.
Climate change is a rising worry for both the public and the political leaders gathering in Poland this week. But worries don’t translate into solutions unless businesses devise products that emit dramatically less planet-warming greenhouse gases. The innovation is the easy part; getting people to buy it is the hard part. That requires incentives, which depend heavily on governments. Without their intervention, solar and wind power and electric and hybrid cars would have no foothold against their fossil fuel competitors. Yet government incentives still don’t go far enough—and sometimes go in the opposite direction.
Trucking exemplifies both the challenges, and the stakes. Though less numerous than passenger vehicles, trucks collectively emit almost as much carbon dioxide because they travel further and weigh more. According to the International Energy Agency, road freight accounts for 35% of transport-related greenhouse gas emissions and 7% of total emissions.
The bad news: Trucks’ shares will expand as freight volumes grow and fuel efficiency advances more rapidly for automobiles than trucks. The good news: Incremental changes actually deliver bigger carbon dividends than with cars.
In 2009 the federal government joined with manufacturers in a project dubbed SuperTruck to raise truck mileage to about 10 miles a gallon from 6. That would equal a staggering 40% reduction in fuel consumption. For Cummins, that meant raising the efficiency of an engine from about 42% (the share of energy burned that becomes motion, as opposed to wasted heat) to 50%.
Cummins is now incorporating some of the resulting innovations, such as combining the transmission and engine for optimum shifting, and increasing cylinder pressure to maximize fuel efficiency. Its flagship heavy duty engine, rolled out last year, gets 3% to 8% more mileage than its predecessor.
Yet Cummins has yet to implement some innovations because they don’t meet customers’ financial criteria. For example, it figured out how to boost efficiency 4% by recycling waste heat back into the engine compartment, but that won’t pay for itself in 18 months.
In 2016 a second SuperTruck program kicked off, aiming to boost mileage to 14 miles a gallon and engine efficiency to 55%. Mr. Eckerle predicts achieving the new goal will be far harder than the last because the easiest, most cost-effective changes have been made. Indeed, conventional engines may never exceed 60% efficiency.
Cummins is spreading its bets, developing a mix of electric, hybrid and natural-gas powered motors for small and medium-size trucks. But long-haul heavy trucks will, for the foreseeable future, run on diesel. Besides costing a fortune, an electric truck’s batteries would reduce payloads and recharging time would lengthen trips.
It would help, he said, if regulations would incentivize customers to pay for advances that take longer than 18 months to pay off. The U.S. has implemented greenhouse gas emission restrictions on trucks that phase in through 2027. Yet Mr. Eckerle would have preferred even tougher standards for engines since that would have attracted customers to the fuel-saving (and costlier) innovations where Cummins specializes.
While President Trump isn’t rolling back those standards, he isn’t pushing them further. He dismisses the threat of climate change, plans to withdraw from the Paris climate accord, and wants to end subsidies for electric cars and renewable energy.
At the same time his federal regulators plan to tighten emission limits on pollutants such as nitrogen dioxide and small particles. This tends to undermine the appeal of diesel, which releases less carbon dioxide per mile than gasoline but emits more nitrogen dioxide and particles.
Then there is the growing divergence across borders. Mr. Eckerle says talk in Europe of a 50% reduction in carbon emissions would mean “legislating the internal combustion engine out [of existence] as we know it today. The U.S. is doing nothing like that.”
Cummins would prefer a carbon tax: By forcing customers to internalize the cost of climate change, it would naturally incentivize them to pay up for lower-emission technology, no matter the fuel type.
“If we want rules that are more effective, decide the end result we want and let technology compete for the best solution,” says Chief Executive Tom Linebarger. “Carbon taxes are much better than all the other choices.”
Yet hopes of such a tax are fading. Even voters in liberal Washington state have twice rejected such a tax and France has just been forced to suspend a fuel tax increase because of widespread protests. All of which means businesses must live without the thing they need most to deliver a low-carbon economy: a price signal that aligns their customers’ interests with that mission.
Write to Greg Ip at email@example.com