The environmental movement has grown in scope and momentum year after year. There is a big push to come up with eco-friendly alternatives to fossil fuels and the machinery they currently power. Electric engines seem to be at the forefront of this latest thrust. When people think about electric engines, most jump right to cars, but the auto industry isn’t the only one being targeted by tightening environmental regulations.
What does this mean for the construction industry? How should companies move forward, and what can marketers do to stay ahead of the competition?
The EPA Crackdown on Construction
Federal standards began cracking down on off-road diesel engines over twenty years ago in 1994 with the adoption of Tier 1 engine standards. The engines were to adhere to the principles signed into effect and mutually agreed upon by the EPA, CARB (California Air Resources Board), and top engine manufacturers (CAT, Cummins, and Deere included). The goal was to cut exhaust gas and GHG (greenhouse gases) by implementing advanced engine design and adhering to stringent requirements.
Over the years as technology has advanced, the benchmark has continually been moved and required manufacturers to meet increasingly rigorous standards. Companies were required to begin phasing in Tier 4 engines from 2008-2015, with the goal once again being to reduce engine emissions.
The Coming Shift
The message is clear. Whether the industry likes it or not, the world is gradually shifting away from fossil fuel energy and governments are tightening regulations and threatening stiff sanctions for those who fail to meet the standards. Construction is now ranked as the 3rd highest GHG producer. That means the industry will have to change and adapt as time goes on to reduce high emissions. Staying ahead of the game and having reliable, actionable data, could be a real advantage as we move forward.
So, what happens next? In many ways we’ve already seen what comes next. All we have to do is look to the auto industry. Companies meeting or surpassing the standards and driving innovation in fuel efficiency are being rewarded with government tax breaks. For the first time since their introduction, electric and hybrid cars are beginning to compete with gasoline models in both price and performance.
As technology capabilities have started to meet customer performance demands, more and more are making the switch to electric-powered alternatives. It may only be a short time before this trend continues gaining steam in the construction industry.
Those in the construction industry have not been ignorant to the impending changes. Volvo unveiled a hybrid concept wheel loader nearly ten years ago in 2008. At the time, no one was really sure what to make of Volvo’s bold move. As time went on and regulations became tighter, companies worked hard to innovate and continue to turn out quality machines while maintaining the higher standards put in place. In 2002, the EPA estimated that the construction industry accounts for as much as 6% of all GHG emissions in the United States. With the continued focus on emission reduction, OEM’s are looking to change the playing field.
As recently covered by Equipment World, Volvo has once again unveiled a new prototype. Their new excavator is fully electric and replaced traditional hydraulics with electric actuators. The excavator is classified as a true “zero emissions” machine that is touted as 10x more efficient and 10x quieter than traditionally powered machines.
The change won’t come overnight, but the shift is coming. Companies need to be ready. The general public is focused on a becoming green, and industries across the board are following suit. It will be important to keep up with customer mood and sentiment to make sure expectations and customer demands are met.
Preparing With Data
Gathering and analyzing data will be key in this process. With Randall-Reilly’s EDA, you can locate and target those most attracted to the newer more efficient and environmentally friendly products. For example, those equipment owners in emission heavy states, who generally face tougher regulations and higher fines, would more than likely be more open to investing in the new wave of technology to save money on operations and adhere to government implemented standards. Using EDA data can paint an accurate picture of purchasing trends, and allow you to keep a finger on the pulse of the market.
Not all equipment manufacturers have ventured into the territory of hybrids or electric machinery, but the shift in technology is on the horizon. Volvo’s new prototype has shown that electric machines can be a practical and attractive option. The eventuality may be that all machinery will be gradually converted to electric zero emission machines as governments unite globally to enact environmental regulations and law. Having access to data will allow your company to target potential hot zones for electric adoption, and keep up to date as the market continues to evolve.