California’s Plans To Reduce Emissions In Heavy-Duty, Off-Road Vehicles

May 31, 2019 | Leslie Goodbody, an engineer with the California Air Resources Board (CARB), spends her time with the Innovative Heavy-Duty Strategies Section, focusing on addressing heavy-duty vehicles and off-road equipment that are responsible for a significant portion of California’s particulate, smog-forming, and climate change emissions.

The state has several plans, strategies, and regulatory efforts underway to reduce emissions in these heavy-duty and off-road vehicle fleets. On behalf of Battery Power Online, Craig Wohlers spoke with Goodbody about what changes she sees in California’s approach to heavy-duty and off-road vehicles, and the funding structures enabling improvements.

Editor’s note: Craig Wohlers, a conference producer at Cambridge Innovation Institute, is planning a track dedicated to EV Technology for Specialty Transportation at the upcoming Advanced Automotive Battery Conference in San Diego, June 24-27. Goodbody will be speaking on the program. Their conversation has been edited for length and clarity.

Battery Power Online: Where are you seeing some of the largest areas of growth within heavy-duty EVs and off-road vehicles in California currently? And how do you see that market changing over the next 10 years?

Leslie Goodbody: The largest growth right now is in urban transit buses, and this is due in large part to the Innovative Clean Transit regulation, which was adopted by our board last December.  The regulation requires that public transit agencies transition to zero-emission buses with the purchase requirements starting in 2023 for the larger agencies and in 2025 for the smaller agencies. So the vision is a complete transition to zero-emission fleets by 2040. Local delivery trucks make up the next largest market where we’re seeing a lot of growth. And we have two regulations under development right now that will promote the development and use of zero-emission airport shuttle buses and zero-emission Class 2b through Class 8 trucks.

Today, there are nine companies manufacturing battery electric transit, school, and shuttle buses for sale in California, plus two that are offering fuel cell transit buses. And there are about seven companies also manufacturing electric delivery vans and trucks. Over the next several years we’ll also see increasing numbers of zero-emission school buses, airport shuttle buses, class 8 short haul and drayage trucks, yard tractors, and cargo handling equipment operating in the state. Growth in all of these industries and applications, and California’s push towards zero emission in these sectors can be attributed to a combination of both near- and long-term strategic planning, several incentive programs, and regulations both on the books now, and pending in the next few years.

China has had a very heavy incentive on the bus side that is now being pulled back. What do you see happening in incentives for buses in the United States?

Nationally, the Federal Transit Administration offers competitive incentives to public agencies through the Low or No Emission Vehicle (Low-No) Program for zero-emission or low-emission transit buses and supporting infrastructure. Of course California transit agencies compete for Low-No funding, but California also has three fairly large funding sources for heavy-duty zero-emission buses.  First is the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) launched in 2009, which offers vouchers for commercially available heavy-duty on-road vehicles.  Most of the HVIP vouchers committed in the last two years have been for battery electric transit buses.  The California State Transportation Agency offers competitive funding, primarily for zero-emission transit projects, through the Transit and Intercity Rail Capitol Program.

Starting this fall, California will launch a first-come, first-serve program offering a total of $130 million in purchase incentives for zero-emission transit, school and shuttle buses funded through the Volkswagen Mitigation Trust. The San Joaquin Valley Air District will administer this funding on a statewide basis where no more than half of the funds can go to a single bus category. We anticipate the transit agencies will be actively applying as soon as these funds become available.

What are you seeing as some of the barriers for at least mainstream adoption of EVs? What do you see as the biggest hurdle right now?

Probably the infrastructure. In regards to zero-emission technology in the various heavy-duty and off-road applications, there are a number of challenges to overcome for both battery and fuel cell electric technologies, like getting the component and integration costs down through efficiency improvements and increased production. Providing sufficient charging infrastructure for fleets larger than 10 to 20 vehicles at a single location presents a bigger challenge. To give this some perspective, California has 23 transit agencies with over 200 buses in their fleets, and two have over 2000 buses.  Scaling the charging infrastructure to transition these bus fleets to 100% zero-emission will require significant investment and time. Bringing sufficient power to where it is needed to enable uncompromised vehicle and equipment operation presents unique challenges to almost every application with battery electric technology.  We’re just starting to get a better understanding of the capital costs and the time needed to permit, build, and commission this type of charging infrastructure. This is one of the reasons why CARB equally supports the demonstration and deployment of fuel cell technology in heavy-duty and off-road applications where the hydrogen infrastructure costs are actually comparable and may even be cheaper than charging infrastructure when evaluated for full scale deployments. In short, both fuel cell and battery electric technologies will play critical roles in California’s transition to zero-emission.

From a funding standpoint, do you have a general idea of what the funding requirements are for infrastructure, at least in California? And what do you think is needed for that long-term plan?

Right now, the three largest investor-owned utilities (IOUs) — PG&E, Southern California Edison, and San Diego Gas and Electric– are helping to alleviate infrastructure barriers by investing over $600 million within their utility territories towards charging infrastructure primarily for on-road medium and heavy-duty vehicles, with limited funding for infrastructure for cargo handling and other port equipment.  These three IOUs cover the vast majority of the state by land area and serve most of the state’s major metropolitan areas.  Larger publicly owned utilities are also pursuing transportation electrification initiatives, particularly in Los Angeles and Sacramento.  California’s Low Carbon Transportation Investments have provided funding for infrastructure, but only when it is associated with vehicle or equipment deployments, as is the case with our demonstration and pilot projects, and with the infrastructure enhancement tied to an HVIP voucher.   So if a fleet asks for funding to deploy 15 battery electric delivery trucks, they will likely also ask for funding for charging infrastructure. Another notable incentive is our Low Carbon Fuel Standard (LCFS), which allows providers of low carbon transportation fuels to generate credits, and those credits can be traded on the LCFS market.

These incentives all are helping to advance zero-emission technologies toward commercialization by off-setting the higher capital, O&M and fuel costs.  But definitely more infrastructure investments are needed both for captive public and private fleets and for public retail stations like truck stops.

Always is the case, it seems. Before we go, can you talk a little bit about California Air Resources Board’s programs? We’ve touched on a few, but can you talk about some of the programs that you have in place now, and what some of the funding strategies are for those programs?

California’s investment strategy spans across the entire evolution of technology to ensure continued development, demonstration and deployment of technologies that are necessary to meet the state’s air quality and climate long-term goals.  This approach is critical because it provides the opportunity to invest not only in the commercial technologies that help achieve our goals, it also signals the importance California places on the development and deployment of these advanced technologies, attracting innovators and green businesses to the state.

CARB has a very broad funding portfolio for clean transportation investments. For heavy-duty and off-road, our strategy balances these investments between achieving cost-effective near-term emissions reductions, for example Low NOx engines, and investing in transformative zero-emission technologies.  The reason for investing in zero-emission technologies is to help accelerate technology advancement, market penetration, and economy of scale cost reductions, and to reward the early adopters. The incentives also help to bring more fleets into compliance ahead of pending regulations, while the regulations help to provide a higher level of certainty to the fleet owners who might be hesitant about investing in this technology.

While there are a number of funding sources that comprise our portfolio, I will touch on the top three starting with the Volkswagen Environmental Mitigation Trust, which provides about $423 million for California to mitigate the excess nitrogen oxide (NOx) emissions caused by VW’s use of illegal emissions testing defeat devices in certain VW diesel vehicles.  This is the source of bus funding that I mentioned earlier, and also includes funding for zero-emission class 8 trucks, freight and marine equipment, automotive EVSE, and low NOx trucks and engines. Next is our Low Carbon Transportation Investments and Air Quality Improvement Program, which covers light-duty vehicles, equity projects, and heavy-duty vehicles and equipment. This program receives annual appropriations from the legislature and invests funds according our annual funding plan, which is developed through a public process and will be the subject of an upcoming workshop on June 13. Finally, we have Community Air Protection Incentives, including $495 million budgeted to-date for local air districts to take immediate actions to improve air quality in the most impacted communities in the state. Those communities continue to play an active role in setting priorities and in shaping how and where CAP funding should be spent.