Two federal agencies on Monday finalized the next round of standards for medium- and heavy-duty vehicles — including school buses — that aim to improve fuel efficiency and reduce carbon pollution.

The final Phase 2 standards, issued by the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), were called for by President Obama’s Climate Action Plan. They follow a proposal that the agencies issued in June 2015.

“This next phase of standards for heavy- and medium-duty vehicles will significantly reduce greenhouse gas emissions while driving innovation, and will ensure that the United States continues to lead the world in developing fuel-efficient technologies through the next decade and beyond,” EPA Administrator Gina McCarthy said.

The final Phase 2 program encourages the wider application of currently available technologies and the development of new technologies through model year 2027. According to the EPA and NHTSA, the standards are expected to lower CO2 emissions by about 1.1 billion metric tons, save vehicle owners fuel costs of about $170 billion, and reduce oil consumption by up to 2 billion barrels over the lifetime of the vehicles sold under the program.

“Today’s ambitious but achievable announcement is a huge win for the American people, giving us cleaner air, more money saved at the pump, and real benefits for consumers across the supply chain,” Transportation Secretary Anthony Foxx said.

The standards apply to semi-trucks, large pickup trucks and vans, and all types and sizes of buses and work trucks, from model year 2021 to 2027.

School buses are included in the category of vocational vehicles. The new CO2 and fuel consumption standards for vocational vehicles start in model year 2021, with increased stringency in model year 2024, and a fully phased-in stringency level in 2027.

According to the EPA and NHTSA, the fully phased-in Phase 2 standards for vocational vehicles will achieve up to 24% reductions in CO2 emissions and fuel consumption compared to Phase 1. The agencies project that these standards could be met through improvements in the engine, transmission, and driveline; lower rolling resistance tires; workday idle-reduction technologies; weight reduction; and some application of hybrid technology.

The final Phase 2 standards build on the Phase 1 fuel efficiency and greenhouse gas emissions standards that are already in place for model years 2014 to 2018. As with the Phase 1 program, the agencies are again adopting separate standards and test cycles for tractor engines, vocational diesel engines, and vocational gasoline engines. 

On Tuesday, some engine and vehicle manufacturers followed the EPA and NHTSA announcement with statements on the Phase 2 standards.

“With nearly 100 years of engine expertise, we are well-positioned to develop products that comply with this new rule and meet our customers’ needs,” said Srikanth Padmanabhan, president of engine business for Cummins Inc. “We are pleased that the rule builds on the Phase 1 regulatory framework that recognizes the diversity and complexity of the commercial vehicle sector, and we look forward to continued collaboration with the agencies and our customers to ensure a successful implementation.”

Daimler Trucks North America (DTNA), the parent company of Thomas Built Buses, also commented on the new standards.

“DTNA will continue to work closely with the EPA, NHTSA, and our partners to develop new solutions that will have a positive environmental impact and fuel efficiency gains for our customers that are harmonious with the Phase 2 standards,” said Martin Daum, president and CEO of DTNA.

More details on the Phase 2 greenhouse gas and fuel efficiency standards are available on the EPA website and the NHTSA website.