U.S. to set 24 percent emission cut for heavy trucks

U.S. regulators on Friday proposed a 24 percent improvement in fuel efficiency for heavy trucks by 2027 as part of the Obama administration's plan to reduce greenhouse gas emissions.

The Environmental Protection Agency said the new standards for truck tractors would reduce carbon emissions by a total of 1.1 billion tons (1 billion metric tons) and begin with model year 2021. The regulators also proposed efficiency standards for trailers.

If adopted by the federal government next year, the regulations would spur technological innovation in the trucking industry, create jobs and lead to a new generation of cleaner, fuel-efficient commercial trucks, officials said.

Full details of the proposals were not immediately available. A source familiar with the matter said a lower efficiency goal of 16 percent was expected for recreational vehicles and pickup trucks.

New efficiency standards would have a direct bearing on companies involved in truck manufacturing, including Cummins Inc (CMI.N), Eaton Corp (ETN.N), Daimler AG (DAIGn.DE) and Volvo AB (VOLVb.ST).

The standards are the latest rule by the Obama administration aimed at slashing greenhouse gas emissions from the country's biggest emitting sectors.

Transportation-related greenhouse gases are the second-largest source of emissions after power plants. The U.S. Environmental Protection Agency is expected to finalize sweeping greenhouse gas standards for power plants in August.

(Additional reporting by Valerie Volcovici; Editing by Lisa Von Ahn)