But should be further strengthened before it’s finalized to maximize benefits.
By E2/NRDC interns Niaz Jamshidi & Arely Ortiz
This blog discusses findings from a recently released independent report by ERM, 2022 CA Clean Trucks Program Report, which analyzes the impacts of cleaner medium- and heavy-duty trucks on the environment, public health, industry, and the economy.
California’s recently proposed Advanced Clean Fleets (ACF) rule would propel zero-emission truck (ZET) sales over the next 20 years generating massive economic, public health, and environmental benefits. It will do so by driving in-state ZET technology innovation and manufacturing investments and jobs, reducing the greenhouse gases (GHGs) causing climate change, slashing truck tailpipe pollution to improve air quality and mitigate public health costs.
Also, as more ZET are purchased thanks to the ACF rule, they will put downward pressure on all residential and commercial electricity rates while helping fleets save money on fuel and maintenance costs. In fact, this smart standard will create over $9.9 billion in net societal benefits through 2050. Thirteen leading Californian business groups, representing thousands of businesses, entrepreneurs, and investors and trillions of dollars in annual economic activity, and including including the San Francisco Chamber of Commerce and the Los Angeles Business Council, agree; California’s business community supports ambitious transportation policies that are good for the economy and good for the environment. It is clearer than ever that the time to act is now. California must take the lead on this advancement and seize the benefits.
What is the ACF regulation?
The Strengthen the Advanced Clean Fleets Rule to Protect CA regulation is a comprehensive statewide strategy to reduce emissions from the transportation sector; by finalizing a smart and ambitious ACF standard, the ACF will drive economic development, protect public health, and meet climate goals outlined by the Governor. The ACF builds off the Advanced Clean Truck (ACT) rule, which is developing supply by requiring truck manufacturers to sell an increasing number of ZEVs; the ACF rule is complementary and drives demand and would require California’s public and private fleets to purchase an increasing number of medium and heavy-duty (M/HD) ZEVs.. Currently, the draft ACF rule would require 100% ZEV sales in California by 2040. However, to fully maximize the benefits to California, the ACF rule should keep up with the pace of ZEV technology innovation and require 100% ZEV sales by 2036.
Strengthening the ACF, and California’s future
A recent analysis of the benefits of the ACF — the e 2022 CA Clean Trucks Program Report, produced by ERM — modeled three scenarios with increasing levels of ZEV sales ambition as well asa baseline business as usual scenario that analyzes the impact of the adoption of the ACT and the NOx Omnibus regulations as passed in 2021. The most beneficial policy scenario in the study is to pass the ACF rule with 100% sales requirement for all M/HDV classes starting in 2036.
The data tells a compelling story: California’s economy, the health of our residents, and the state’s environment will be positively impacted by an ACF with a more ambitious 100% ZEV sales by 2036 requirement.
As shown above, a lack of ambition will minimize benefits. 100% zero-emission sales by 2040 would cause a stall in zero-emission truck sales, missing out on important progress during a critical time. This is due to manufacturers stockpiling compliance credits from the lower sales requirement, meaning that if the requirement isn’t fulfilled until 2040, then there is a possibility sales will flatline the ACT rule going into producing many zero emission vehicles.
Why a 2036 Target is Good for the Economy and the Environment
California has long benefited from its climate policy leadership, and the state has developed into a global hub of clean vehicle innovation and development, including a robust electric vehicle and battery manufacturing center. This global leadership — and the associated job creation and in-state investment — is the product of innovative clean energy economy policies — like the ACF — that continue to pay dividends for California’s economy. In 2020, electric vehicles were the state’s most valuable export, producing over $5.6 billion in revenue and overtaking California’s aerospace industry for the first time. As an established center of the clean energy economy, there is a strong base of over 500,000 clean energy workers, with 53,000 employed in clean vehicle jobs.
California clean energy businesses and employees are not the only ones benefiting from this move to zero emission fleets, but California fleet owners and operators are also benefiting from ZEV adoption.
Costs and Benefits to Fleets
ZEV trucks are cheaper to maintain and fuel than diesel powered trucks, and the 2022 CA Clean Trucks Program Report finds the average M/HD ZEV in California is projected to have between $48,000 and $84,000 in discounted fuel and maintenance cost savings per vehicle over its lifetime compared with the costs of an equivalent gasoline vehicle. By 2030, ZEV purchase costs are projected to fall significantly, so much so that the average ZEV will reach the same cost as combustion vehicles, when considering discounted lifetime fuel and maintenance savings. When modeling an ACF standard with a 100% ZEV sales by 2036, the report finds that by 2050, statewide fleet savings will surpass $23 billion, and these savings account for the capital costs to transition fleet.
Electric Utility Impacts
Ambitious transportation electrification will bring benefits to all California residents, not just ZEV truck owners and operators.. The report demonstrates that the plugging in of thousands of new electric trucks and buses will spread an increasing amount of electricity demand over the largely fixed costs of our electrical system. Under the 100% Sales by 2036 scenario, in 2050 utility net revenue will increase from M/HD EV charging and will be passed directly to customers, resulting in statewide reduced average residential and commercial electricity rates by an estimated 2.5%. By adopting an ambitious ACF rule, the average California household will save an estimated average of $46 per year and the average commercial customer $426 per year on their electricity bills.
The table below from the 2022 CA Clean Trucks Program Report summarizes the estimated charging infrastructure required to support M/HD electric trucks and buses under the 2040 and 2036 scenarios. Under the 100% sales by 2036 scenario, the deployment of ZEV trucks will result in the need to build over 500,000 chargers by 2050, driving $12 billion in public and private investment and stimulating consummate local construction job creation in California to build out this infrastructure.
Environmental Benefits
California’s air quality and the climate will reap the benefits of moving this requirement forward to 2036. Extreme climate events, such as wildfires and droughts, costs have risen steadily throughout the past decade. A report by E2 –Climate Action in the Golden State — shows there was:
- $55 billion in direct property damage from California wildfires (2017–2020).
- $47 billion in economic activity in California’s clean ocean economy under threat from sea level rise and ocean warming.
These numbers are illustrative of the cost of climate change and the transportation sector representing the states largest source of emissions, it is an economic imperative we address climate emissions from the states MHD truck fleet.
The 2022 CA Clean Trucks Program Report shows under the baseline scenario, annual M/HD fleet GHG emissions are projected to fall by 16% through 2050 as the current fleet turns over to new, more efficient gasoline and diesel trucks that meet the more stringent California and EPA new engine and vehicle emission standards. In comparison, the 100% Sales by 2036 scenario has the lowest fleet GHG emissions, due to replacing more gasoline and diesel M/HD with ZEVs by 2050, resulting in 46% lower fleet GHG emissions than the baseline scenario emissions.
Health and Community Benefits to California
Despite making up only 7% of on-road fleet vehicles, heavy duty trucks are accountable for 27% of GHG emissions, 56% of the particulate matter (PM), and 62% of the NOx emissions from on road vehicles. Residents across California — but importantly, low-income communities and communities of color that live along transit routes or near ports and warehouses that experience heavy traffic and pollution will reap the benefits of breathing cleaner air as more M/HD ZEVs replace dirty diesel vehicles. This is good for Californians and the state’s economy as less truck pollution will result in less asthma attacks, less hospital visits, and reduced economic activity. Harmful local air pollution caused by internal combustion engines poses a significant risk to public health and therefore considerable economic costs in the form of additional hospital visits and healthcare expenses, decreased work productivity, and missed workdays. In fact, a robust economy is predicated on a healthy workforce and a healthy consumer population. By adopting the 100% sales requirement by 2036, there will be an estimated $30 billion in avoided public health costs.
Source: ERM Group,*CA Clean Trucks Report_02.pdf (sharepoint.com), 2022
An ACF standard that rise to the occasion
The 2022 CA Clean Trucks Program Report shows that a more ambitious ACF that calls for 100% ZEV truck sales by 2036 maximizes benefits to the state. The net societal benefits of moving the 100% sales year from 2040 to 2036, will result in an estimated annual $6.8 billion in savings by 2050. This includes the monetized value of climate and public health benefits from reduced GHG, NOx, and PM emissions. Shown in the chart below, the projected cumulative estimated societal net benefits under this scenario total $82.1 billion by 2050. This number comes from;
- Operating ZEVS saving fleets net $2.4 billion
- $771 million in utility net revenue
- $41 billion in air quality benefits
- $24 billion in climate benefits
In conclusion, California business leaders, residents, and environmental experts agree, we need to advance policies that benefit the economy and address pollution and the climate crisis. The answer is clear, passing an ACF rule with 100% sales requirement for all M/HDV classes starting in 2036 is a critical opportunity to significantly reduced GHG emissions, advance a 21st century sustainable California economy and decrease the amount of health impacts due to the ongoing noxious emissions from combustion vehicles.
The evidence shows that a 100% ZEV truck sales by 2036 standard is good for California’s economy and environment. Now California’s regulators need to rise to the occasion and pass a stronger, more ambitious ACF.
California’s Advanced Clean Fleets Rule is Good for the Economy and Environment was originally published in e2org on Medium.