Mid-Atlantic Dray Truck Replacement Program Highlights

1. Mid-Atlantic Dray Truck Replacement Program Highlights Sept 23, 2011 Catherine Magliocchetti EPA – Mid Atlantic Region

2. PRESENTATION OUTLINE • Health Effects Overview • Air Quality • Innovative Financing/Funding: • Mid Atlantic Dray Truck Replacement Program

3. Health Effects of Diesel Emissions

4. Diesel emissions pose a significant environmental health problem • Serious health impacts • exacerbates asthma, respiratory & cardiac illness • Possible human carcinogen • over 70% of the cancer risk from all air toxics • Degrades air quality • Particulate Matter • Ozone • Contributes to climate change

5. Some Groups Are More at Risk • People with heart or lung disease • Conditions make them vulnerable • Older adults • Greater prevalence of heart and lung disease • Children • More likely to be active • Bodies still developing • Breathe more per body pound

6. Particulate matter (PM) in diesel exhaust is the driver of risk • Mix of particles and liquid droplets • Considerably smaller in size than human hair • Penetrates deeply into the lungs Hair cross section (70 mm) Human Hair (70 µm diameter) PM10 (10µm) PM2.5 (2.5 µm)

7. National Ambient Air Quality Standards (NAAQS) Ozone (O3) – Not a direct emission, but forms in the atmosphere – EPA regulates precursors Oxides of Nitrogen (NOx) Volatile Organic Compounds (VOC) Particulate Matter (PM) Carbon Monoxide (CO) Nitrogen Dioxide (NO2) Sulfur Dioxide (SO2) Lead (Pb) Many areas of the US are in Non-Attainment Over 52 percent of the U.S. population lives in counties that have unhealthful levels of either ozone or particle pollution (http://lungaction.org/reports/sota05exec_summ.html) 7

8. National Ambient Air Quality Standards (NAAQS) – continued Many areas of the US are in Non-Attainment for Air Quality Standards Over 52 percent of the U.S. population lives in counties that have unhealthful levels of either ozone or particle pollution (http://lungaction.org/reports/sota05exec_summ.html) 8

9. About 127 million people live in areas that do not meet one of the health-based national ambient air quality standards.

10. National Clean Diesel Campaign Advances strategies that move toward cleaner air to reduce diesel emissions through partnerships and grants Verify technology http://www.epa.gov/oms/retrofit/verif-list.htm Provide tracking and quantification tools 10

11. Local Collaboratives Philadelphia Diesel Difference Delaware Diesel Difference GASP (Pittsburgh area) Virginia Clean Cities 11

12. Mid Atlantic Dray Truck Replacement Program • Currently $3.3 M in total EPA Funds • Prior to 2011, EPA funded replacement or retrofits for dray as follows: • VA – $1.25 M for 212 trucks • MD - $550 K for 14 applications (multiple trucks/app) • Clean Air Council - $350 K for 60 retrofits • Targeting Ports • Voluntary Effort

13. Truck Replacements Programs showing up at Ports across the U.S. • Several ports across the country are trying to replace older short haul trucks serving their ports. • Ports of Long Beach, LA, Oakland • Ports of Seattle & Tacoma • Port of Houston • Port of New York/New Jersey

14. Now Available in the Mid-Atlantic • $3.3 million in total funds from EPA • Ports of Philadelphia and Wilmington • Port of Baltimore • Port of Virginia

15. Why a Truck Replacement Program for the Mid-Atlantic? • Improve air quality at port terminals • Reduces pollution impacts of heavy truck traffic in communities surrounding ports • Addresses health issues (asthma, bronchitis, cancer, heart disease, premature death, etc.) • Provide financing assistance to applicants

16. Typical Port Drayage Truck • Evolution of a Typical Truck: • Truck starts out in large well-maintained fleet that travelling long distances; upon aging is moved to smaller fleet, ultimately end up in a drayage service fleet • Truck is older (pre 2000) with a million or more miles on it • Travels through low-income areas

17. Improving Goods Movement • Truck Program is voluntary in our region • Program tries to ensure goods movement becomes cleaner, competitive, and sustainable • Providing direct assistance to owner operators • Prior programs at Port of Virginia & Baltimore • Small program started in Pennsylvania

18. About the Program: Available Funds • Every state given portion of total grant funds to match their own leveraged fund • Not to exceed $500,000 in year 1 • Assessment of available funds and evaluation of state-by-state success and need, will determine the funding available in years two through four • Funds should be leveraged dollar for dollar

19. Available Funds per Applicant • Applicants allowed to submit one application per truck • Total amount eligible to each applicant will not exceed $20,000 towards a new vehicle • Sponsors eligible to submit applications for multiple trucks but eligibility rules still apply

20. Financing • Five lending companies available to applicants • Terms are flexible based on credit history • More relaxed lending requirements • Typically lower than market rate: • 36 month loan • With $20,000 down payment, project is attractive to lenders

21. Scrappage Requirement • All vehicles need proof of scrappage • Program assists applicant with scrappage • Money from scrappage must be used towards down payment on a new truck

22. Scrappage Documentation • Photos needed: • Before and after photos of truck • Photo of VIN number of truck • Photo of chassis cut in half • Photo of hole in engine block • Before photo of engine where hole is being drilled

23. Scrappage Documentation • Documents needed:  • Dated receipt stating that "X" truck with "X" VIN number was scrapped. • Cancelled check showing amount received from scrappage • Contact information for the scrap company • Applicants must not proceed with scrappage before consulting MARAMA.

24. Eligibility Requirements for the Program • Replacing older truck: MY 2003 and earlier (preference given to MY 1997 and earlier) • Purchasing new truck equipped with 2007 or newer engine (engine must be 2007)

25. Eligibility Requirements for the Program • General requirements for application: • Trucks must be owned for a minimum of one year • Current title and registration in the name of the applicant • Truck is currently insured • Truck can document proof of regular service to one of the four ports • Scrappage conditions must be met prior to releasing funds • Photo of old truck with license plates clearly visible

26. Truck Purchasing Coordination • Established relationship with several vendors • Program is encouraging bulk orders to expedite process of the applicant selecting and securing a new truck • Creates efficiencies that result in lower per-truck cost which in turn reduces the loan-to-value ratio per applicant • Wide selection of trucks available

27. Leveraged Funds • Leveraging shows participation, partnership, interest • In order to facilitate this process, there will be Gold, Silver, and Bronze sponsorship levels • Opportunities for Tax deduction for sponsorships made to program • In-kind support is allowed

28. GOLD SPONSORSHIP • Shippers such as “big-box” stores and other retailers • Total amount requested from each shipper is $30,000 cash only, equivalent to the grant cost of replacing two trucks • Gold sponsors will be invited to submit up to ten trucks in their fleet for priority consideration

29. SILVER SPONSORSHIP • Large carriers with 20 or more trucks • State agencies, the Ports, and the terminals interesting in participating • Donation of $15,000, equivalent of the grant of replacing one truck • In-kind contributions will be considered in lieu of cash payment, but this must be approved by MARAMA in order to make it useful to the overall support of the program • Silver sponsors will be invited to submit up to five trucks in their fleet for priority consideration

30. BRONZE SPONSORSHIP • Smaller carriers with less than 20 trucks • Owner operators, non-profits, non-port related organization, company, or agency • $5,000 donation • No restrictions placed on these contributions • Bronze sponsors will be invited to submit up to two trucks in their fleet for priority consideration

31. Program benefits • Upgrade dray truck/continue to offer reliable drayage services •  Benefits Cargo Owners by increasing the reliability of the available dray truck fleet, while reducing their carbon footprint •  Expands upon prior efforts to reduce diesel emissions related at ports •  Helps ports possibly avoid mandates when done voluntarily – shows proactive joint partnerships with all ports. • Improves air quality throughout the region and health benefits • Builds credibility with communities and environmental stakeholders

32. Thank You! Magliocchetti.Catherine@epa.gov 215.814.2174 jthrowe@umd.edu 301-405-5036