Cummins Tier 4 Final
The tier 4 final diesel exhaust system adds a selective catalytic reduction system, or SCR, that utilizes diesel exhaust fluid.
The Environmental Protection Agency’s stringent tier 4 emission-control mandate for diesel engines is driving up demand for non-tier 4 construction equipment, according to a recent survey of Independent Equipment Dealers Association members.
The association “predicts this trend will continue for the next several years,” said a recent news release announcing the survey results.
“For many equipment categories, used equipment availability is outpacing demand, but for other categories, including excavators, backhoe loaders, wheel loaders, dump trucks dozers and compact equipment, IEDA members are seeing resale pricing increase by as much as 20 percent,” the release said.
Over half of those surveyed noted that it is becoming harder to find quality used equipment, the release added.
Tier 4 refers to the latest in a series of emissions standards for non-road diesel engines that EPA adopted in 1994 and began enacting in 1992. Tier 4 final, which went into effect in 2015, reduced the levels of oxides of nitrogen and particulate matter by 90 percent over the tier 3 levels.
A proposed tier 5 standard would reduce those pollutants to zero. Several engine manufacturers, including Cummins, have already unveiled engines to meet a similar Stage V standard in Europe.
The IEDA has watched closely to see how the new standards have affected pricing and availability of used equipment, the IEDA news release noted.
“Our members buy and sell used equipment globally, which makes them well aware of market trends,” the release quoted IEDA president Drew Van Brunt, who owns Global Tractor Company in Colleyville, Texas. “As a group, we make it a point to share trends we see in the market with each other, as well as with used equipment buyers and sellers. The current used equipment market is strong, but it will be affected by tier 4 machines in the near future.”
In the recent survey, IEDA members expressed uncertainty about how well tier 4 machines will retain their value. Thirty-seven percent expect tier 4 equipment won’t retain its value as well as non-tier 4 equipment does. However, others surveyed believe tier 4 machines will have higher value because many projects require tier 4 equipment.
“If more construction projects demand the use of tier 4 machines, the residual value of non-tier 4 machines will drop significantly,” the release said.
With few tier 4 machines currently on the used-equipment market, IEDA members don’t expect the new machines to dominate that market for four to eight years.
“At that point, non-tier 4 machines will be harder to come by, and pricing on tier 4 machines will become more steady.”
For more information, on the IEDA, visit www.iedagroup.com.
