Engine brakes, which include both exhaust brakes (EBs) and Jacobs ("Jake") brakes, have been around for nearly as long as road-going diesels themselves. Often confused for one another, EBs and Jakes function by related but functionally opposite principles: to slow the vehicle by causing the engine to produce "negative" power.
Diesel engines don't use a spark to ignite the fuel mixture; instead, they simply squeeze the air/fuel mixture until it explodes with heat and pressure. This "compression ignition" strategy means that a diesel can produce nearly as much negative power (resistance to forward movement) as they can regular power by harnessing the power of compressed air or the equivalent amount of vacuum trapped in the cylinders.
Exhaust Brake Function
An exhaust brake is simply a large butterfly valve in the engine's exhaust stream. When closed, the exhaust brake traps a great deal of the engine's air inside the cylinders. The engine continues to function as it normally would, but gets only enough fuel to idle. The exploding fuel's gases have nowhere to go when the valve is closed, so they push back against the piston and inhibit engine rotation. A really efficient exhaust brake on the right engine can resist truck acceleration with about 80 per cent of the engine's maximum power output.
Jake Brake Function
In terms of function, Jake brakes and exhaust brakes are exact opposites. Whereas an exhaust brake traps compressed air inside the cylinders (inhibiting upward piston movement), a Jake creates a vacuum to inhibit downward piston movement. A Jake brake is essentially a solenoid that causes the exhaust valve to open early (while the piston is still travelling upward); all of the air gets pushed out, leaving a powerful vacuum behind. A Jake brake is integral to the engine; it comprises a big part of the valvetrain, so you can't just add one on like you would an exhaust brake. A Jake brake can produce negative power to upwards of 90 per cent the engine's max power.
Although Jake brakes are powerful, they're not without their problems. The first is that the design is noisy; if you've ever heard a machine gun-like clatter echoing through a mountain valley then you've experienced the Jake brake's signature howl. Jake brakes have actually been known to trigger avalanches in some snowy mountain passes, so they're often restricted during the winter. Both Jake brakes and exhaust brakes can cause overheating, but the exhaust brake (which traps most of the exhaust's heat inside the turbo and engine) is far more prone to causing thermally-induced destruction than the Jake.
Modern trucks often use a Jake brake and exhaust brake in tandem. Although the exhaust brake does help to supplement the Jake, it's used more to quiet the truck than anything else. That's why modern diesels using an engine break tend to exhibit more of a loud purr or growl than the typical Jake brake rattle.