It's no small task.
Reduce particulate matter by 90 percent, reduce nitrogen oxides by 45 to 50 percent, and don't sacrifice performance. Change the physical shape of engines, add exhaust after-treatment devices and get them to fit into construction equipment without significantly altering the machine itself. Spend up to a billion dollars on research and development, yet find a way to absorb these costs in a recession when price increases are the last things OEMs, dealers or rental companies are prepared for.
But those are just a few of the tasks involved in getting ready for the implementation of Interim Tier-4 (IT4) standards going into effect beginning in 2011. Non-road diesel Tier-4 emission regulations are being implemented by the Environmental Protection Agency in two steps, IT4 and Tier 4 final. The IT4 step starts in January 2011 for 174 horsepower and larger engines, with final regulations going into effect in 2013 and 2014, depending on size. IT4 begins in January 2012 for machines from 75 to 173 horsepower.
The challenges are many.
“The big task for the engineers is to make sure that the diesel particulate filter (DPF) gets warm enough to clean itself,” says Joe Mastanduno, product manager for engines and drive trains, John Deere Construction and Forestry Division. “And then we're putting this filter under the hood in the engine compartment; so you have all this additional heat, and you want the filter to get hot but you want to also keep the components under the hood cool. That's really the big task. Finding space under the hood on a mid-sized piece of equipment is difficult, but on a compact piece of equipment is very tough. The challenge is to not change the sheet metal.”
The results, while good for the environment, will change the equipment landscape in dramatic ways.
While each engine manufacturer has its own solutions, most involve electronic fuel injection (common rail system) for more efficient combustion, exhaust gas recirculation (EGR) to reduce nitrogen oxides (NOx), DPFs to capture or control particulate matter, turbochargers to overcome power loss inherent in EGR and to create turbulence for a better fuel mixture, and a catalyst on the exhaust to burn off unspent fuel and further reduce NOx output.
For rental companies, most engines probably won't seem different and will perform about the same as before. However, they will undoubtedly cost more since engine manufacturers and other OEMs have spent millions, hundreds of millions, even billions of dollars on research and development and other costs to develop Tier-4 engines, including significant resources to change equipment to accommodate engines with different shapes because of the addition of after-treatment devices. And while most customers probably won't care what tier category the engines on the equipment they rent falls in, IT4 may create new opportunities as many government agencies, industrial facilities and even commercial construction jobsites categorized as “green” will insist that equipment they rent be IT4-approved. While it may cost less to utilize Tier-3 grandfathered equipment, rental companies may find they are missing opportunities by not having IT4 engines and equipment.
“In California, they have what they call ‘green construction sites,’” says Mastanduno. “If you want to operate on those sites, you have to bring only the latest-tier machines onto that site. And now on the East Coast, in Chicago, in some southern states such as Texas and Georgia, there are emissions regulations from counties, cities and states.” While federal regulations allow companies to continue to use Tier 3 and lower engines in most cases, and the current economy makes many companies hesitant to invest in new equipment, the market may compel quicker adoption.
“There are a number of local initiatives across the country that encourage fleet owners to have the latest emissions-compliant product,” says David Campbell, design team manager, for Perry, Okla.-based Charles Machine Works, manufacturer of Ditch Witch products. “On some publicly funded projects, a contract may stipulate that the contractor has to have the latest emissions-compliant equipment on the job. In California, fleet owners are going to be required to meet certain average emission levels. If they can put the latest compliant products in their fleet, that will help their averages.”
One size fits all?
Users will be required to use ultra-low sulfur diesel fuel and low-ash engine oil in Tier-4 engines to keep emission devices functioning properly. The fact that IT4 equipment is being designed for ultra-low sulfur diesel fuel could complicate some rental opportunities.
“The most significant customer effect will be for those rental companies that transport machines into countries where ultra-low sulfur diesel fuel is not available,” says Erik Elzinga, director of engineering, Terex AWP. “It is currently already available in the United States, Canada, and Western Europe, but if a machine located in Texas is rented to a user in Mexico, the sulfur content in the fuel would do damage to the exhaust after-treatment system.”
Manufacturers will no longer be able to have a one-size-fits-all approach to selling machines as emissions regulations will differ more significantly from country to country than in the past. “Manufacturers must take into consideration that some horsepower categories have emission regulations that differ between the United States and Europe,” says Tony Salia, vice president of engineering for Gehl Co. “A common world platform may no longer be feasible.”
“We'll find ourselves in a situation where for some models we'll have to build two different products,” adds Campbell. “One for the highly regulated countries — such as U.S., Europe, Japan — and a separate product for the rest of the world.”
Rising engine costs
The cost, not only of engines, but equipment itself, cannot help but be affected as OEMs are forced to pay more for their engines.
“We're seeing quotations on engines and the price of the engine itself in some cases is almost doubling,” says Campbell. “So depending on the cost of that engine package and what percentage it is of the total product cost, we're probably going to see price increases of anywhere from 4 to 15 percent in the marketplace.”
While previous emissions tiers primarily caused internal changes to engines, Tier 4 involves the addition of after-treatment devices that in most cases alter the shape of engines by adding a device similar to a catalytic converter in an automobile, and sometimes require design changes to machines themselves.
“This will cause some pain in the current environment where rental rates have remained stubbornly in the cellar,” says Steve Shaughnessy, president of Skyjack Inc. “There will be more complicated systems, which will require additional training for service personnel and investment in additional diagnostic equipment.”
“Each link of the supply chain will have to absorb its share,” adds Jeff Eckhardt, director of engineering for Snorkel.
“A number of products will have to undergo redesign,” says Torsten Erbel, vice president product management, engineering & customer support for Carson, Calif.-based Multiquip Inc. “Some models may have to be eliminated due to dimensional restrictions some of our customers have for the product and we can no longer provide a package that meets the dimensional restrictions as well as provide a proper operating environment. From what we have seen initially, the added cost impact will be significant. Some popular engine models will also disappear with Tier 4, as the compliance investment was too much for some of the engine suppliers. We will spread some of the costs across our product offerings to dampen the impact on selected products.”
The horsepower of an engine could affect its future viability as well. “One of the boundaries is at 75 horsepower, and if an engine is above that level, say 76 or 80, it will be subject to much more restrictive NOx requirements in 2014,” says Campbell. “The technology to meet those NOx requirements we expect will be pretty expensive so we think we'll see most OEMs go to great lengths to design products that are 74 or 75 horsepower and not 80. I think in the future we're going to see a dead zone between 75 and 100 horsepower where there just won't be many products in that horsepower range. If you make the commitment to go from 75 to 80, you're adding a lot of expense, so you might as well jump on up to 100 horsepower. If a manufacturer has a product that's marginal in terms of sales or profit margins, that's the perfect opportunity for their product planning people to re-examine whether or not they even belong in that particular business or if that particular model makes sense for them anymore.” Or manufacturers may redirect the marketing of those machines to countries where Tier-4 regulations, or comparable standards, are not applicable.
“The Tier-4 regulations will affect the design and manufacturing of our current AWP models in 2013 and our telehandlers starting in 2012,” says Shaughnessy. “The regulations will lead to an increase in the space required for engines and exhaust systems, which will result in complete re-designs for most models.”
“Some of our products with tight engine compartments such as the Genie Z-45/25 may require new engine covers and other changes to accommodate the DPF and larger radiator,” says Terex' s Alzinga. “We are in the feasibility stage on several products right now. Tier-4 final standards in 2015 on large telehandlers will feature Selective Catalytic Reduction (SCR). This system requires Urea injection into the exhaust stream and an additional catalyst along with the DPF.”
“Changes in the Tier-4 engines will lead to possible redesigns of cowling, both to handle the extra space required by after-treatments, as well as to accommodate the extreme temperatures encountered in the proximity of the after-treatments,” adds Snorkel's Eckhardt. “Going forward with new designs, we are building the space required to handle what the engine manufacturers are projecting. We may also be exploring more alternative power methods, including electric drives. It may not be immediate, but one just has to look at the automobile industry again and follow performance and mileage from the early 1970s until present day to see the remarkable changes that have been implemented.”
Various types of equipment, such as wheel loaders, are likely to look more seriously at hybrids in the future as technology continues to evolve, several manufacturers point out.
Cummins, on the other hand, says its compact catalyst will fit easily inside OEM machines without altering the architecture or customer interface.
“Some of the largest challenges, when we look at IT4 and the compact equipment market, is where do you fit the extra architecture, the additional after treatment, as well as engine architecture, how do you squeeze it into such a compact package without disrupting the line of site, or causing massive insulation challenges for our OEMs,” says Cummins engineer Chris Calas. “So that's where we started and we designed towards our customer base as well as emission requirements, and we're very excited about our Cummins compact catalyst.”
With significant changes being made to conform to Tier-4 regulations, additional modifications and improvements sometimes result, such as, for example, Deere's adding telematics equipment standard on the majority of its lines.
“We are making extensive use of actual customer application data to develop performance, emissions, and regeneration strategies,” adds Chris Gustafson, Cat rental manager for Caterpillar Inc. “We are using predictive simulation techniques to predict and improve product reliability early in our new product introduction processes, before building pilot or production machines. We are validating our products through the most extensive testing and field follow program in company history, accumulating almost one million operating hours of exposure on Tier-4 products before producing the first production units. We have designed, tested, and validated a modular after-treatment design, intended for use on many machine models, enabling us to leverage designs, minimize component proliferation, and expedite validation. This is the most significant new product introduction program in company history.”
Ditch Witch's Campbell says the advent of variable-speed cooling fans will improve performance, compared to older units with fixed-speed fans. Engine suppliers are saying fuel efficiency will improve. While in the construction business many other factors have often driven operating costs more significantly than fuel prices, in the future with the potential volatility of fuel prices, fuel efficiency may become more of a factor.
“While industry-wide incremental engine purchase price increases will be inevitable due to additional components needed to achieve Tier-4 emission standards, and engines using a particulate filter may well accelerate maintenance cycles, the rental industry can look forward to certain benefits as a result of Tier 4,” says Cam Litt, marketing manager, Kohler Engines. “With Tier 4 driving engine manufacturers to deploy better engine technology, enhancements such as Common Rail System and turbochargers will become more commonplace. And with CRS and turbochargers come increased fuel efficiency and possibly improved power levels and performance.”
“A good deal of innovation is possible as a result of these changes,” adds Gehl's Salia. “An electronically controlled engine opens up more possibility for improved performance as well as equipment diagnostics and communication to operators and service personnel. Fuel economy should also improve.”
“The rental industry will benefit from the changes in that their equipment with Interim Tier-4 engines will be allowed to operate in all regulated emissions market areas including air quality districts and non-attainment areas,” adds Paul Holst, product manager at John Deere Power Systems.
There will still be challenges for service personnel.
“Most engines will be utilizing high-pressure common-rail (HPCR) fuel-injection systems operated by electronic control modules,” says Gehl's Salia. “Dealers and rental companies will need to be trained to at least perform diagnostic service on these new and complex systems. In addition, the end user will need to be trained in the proper operation of a unit that will require periodic active regeneration of the catalyst system. Most systems will regenerate with little operator involvement, but failure to allow for this may cause the unit to shut down when not desired.” In some instances, where the machine duty cycle is very low for many hours, the machine monitor may request the operator to push a button to regenerate (clean) the DPF.
“Another area where the customer will be affected is, any engine equipped with a DPF, over time those will plug up because it's a honeycomb structure that's intended to catch all of these fine particles in the exhaust stream,” says Ditch Witch's Campbell. “The engine computer monitors the pressure drop across the DPF and how much it is plugged. If it's plugged to a certain point it initiates a process called regeneration and that elevates the temperature of the exhaust by putting more fuel into the exhaust stream and burning it to burn out these particulates. If an engine is lightly loaded for a long period of time, you're going to have to regenerate more frequently.”
However, most after-treatment devices — diesel particulate filters, EGR and SCR — are being designed to provide an estimated five-year period before any maintenance is required, although there will be a need for “self-cleaning” of the diesel particulate filter on many units. “On a daily basis, or every two days, usually every 16 to 20 hours, the filter has to be self-cleaned,” says Deere's Mastanduno. “If it's warm enough and can achieve certain temperatures, it will take care of it with no impact to that operator, but if it doesn't get warm enough it could ask you to idle the machine and have it go through this cleaning process. This cleaning process uses more fuel, it's what we call re-generation, but it does use fuel to create heat so a filter can clean itself. So you can say it's only a few things where the owning and operating costs have gone up, but on a lot of big projects, fuel is the major cost driver for a lot of fleets.”
While different manufacturers approach IT4 solutions differently, all agree that the environment will benefit from the new regulations. They also agree the changes to the equipment industry will be far-reaching and irreversible and no manufacturer, dealer or rental company can escape its effects.
“The impact of interim Tier 4 and Tier-4 Final from 2011 forward will be greater than between Tier 1, 2 and 3 combined,” says Ditch Witch's Campbell.