Policies and Actions to Promote the Uptake of ZECVs

Government intervention to foster and develop a ZECV market can take many forms. Exclusion zones with exceptions for ZEVs create market signals for vehicle manufacturers to meet vehicles that meet zero-emission goals, regulations to improve vehicle and fuel performance can incentivize manufacturers to create zero-emission vehicles and fuels, and electric utilities may be permitted or obligated to advance commercial vehicle infrastructure availability. These policies, regulations, and actions and others are currently being implemented or are under development.

 

Exclusion Zones: Ports

Given the sheer volume of goods and people in transit every day, ports (including shipping and airports) can be hotbeds for air pollution and greenhouse gas emissions. The need to reduce emissions from the commercial vehicles that service ships and planes and transport goods and passengers to and from ports is recognized for the improved air quality around ports and for contributing to climate goals.

Current Examples

In Development

  • The Port Authority of New York and New Jersey manages airports and shipping for the greater New York City area. The agency is committed to switching its transit fleet entirely to zero emissions (source link).
  • The port of Rotterdam, the Netherlands, will incentives that would reduce emissions from port vehicles until the port would be entirely zero-emission by 2050 (source link).

 

Exclusion Zones: City Centers

As the mileage that vehicles travel increase in many nations, the health impacts of on-road vehicle emissions are better understood, and pedestrians aim to reclaim public roadways to make cities more livable, local governments are considering excluding all vehicles that produce air pollutant emissions that exceed a given threshold from operating in the most populated or polluted parts of cities. Allowing exceptions for ZECVs may permit cities to meet congestion goals while allowing for clean transportation and goods deliveries. Many cities have signed on to the C40 Fossil Fuel Free Streets Declarationthat would establish a zero-emission zone in a significant segment of each city.

Current Examples

  • Oslo is actively removing parking spaces to discourage and eventually eliminate traffic flow through the city center; the city concurrently operates a low emission zone that offers preferential rates to ZECVs (source link) (academic link).
  • The Swedish government has developed three classes of low emission zones that municipalities may adopt; the class with the highest standards would only allow ZEVs and vehicles that meet the strictest emissions standards (source link).

In Development

  • The head of Paris’ regional transit authority noted that the purchase of 800 all-electric buses is intended specifically to prepare the city to exclusively purchase zero-emission transit buses by 2025 (news link).
  • Seattle is preparing to make its city center zero-emissions by investing heavily in public transit, standing out as a city with high growth in transit ridership at a time when transit ridership is declining in other cities (news link).

 

Exclusion Zones: City or Federal

Some cities may prefer to exclude vehicle pollution from their entire city boundaries. By providing a timeline for restricting vehicle access to cities and providing exemptions for ZCEVs, these cities are creating a new and guaranteed market for zero-emission vehicle and fuel manufacturers to meet expected demand. Some countries have also announced policies intended to prohibit the sale of gasoline- or diesel-powered vehicles.

Current Examples

In Development

  • Amsterdam plans to bad all gasoline- and diesel-powered vehicles from the entire city by 2030, citing the negative impacts of tailpipe emissions on residents’ health (news link).
  • Several countries and cities have announced their intentions to end the sale of vehicles powered by petroleum, with dates as early as 2025 in Norway and 2030 in India, if the transition can be achieved economically (news link).

 

Procurement Requirements: Transit Bus

Zero-emission transit buses are at the leading edge of the beachhead model, with successful large-scale deployments in cities on every continent. Because transit buses are typically operated by municipal or regional government agencies, purchase requirements can guarantee the deployment of zero-emission transit buses as means to improve local air quality, meet city GHG reduction goals, and eventually improve the total cost of ownership. A switch to zero-emission transit buses is one of the pledge requirements for joining C40’s Fossil Fuel Free Streets Declaration.

Current Examples

  • Shenzen, a new and rapidly growing Chinese metropolis, has converted its entire transit fleet to all-electric vehicles through reducing costs, innovative business models, and building ample charging infrastructure (academic link) (news source).
  • Santiago, Chile has the second-largest all-electric transit bus fleet outside of China; the city’s transit agency benefitted from access to components, strong public policy, and innovative business models (news source).

In Development

  • Austin’s Metropolitan Transportation Authority plans to phase out diesel-buses entirely and anticipates that its last diesel bus may already have been purchased (news link).

 

Procurement Requirements: School Buses

Zero-emission school buses transport an extremely vulnerable population – children. Though improvements have been made in gasoline- and diesel-powered school bus technologies that reduce the health impacts on students, cities are considering adopting purchase requirements for zero-emission school buses to improve local air quality, meet city GHG reduction goals, and eventually improve the total cost of ownership.

Current Examples

In Development

  • New York City’s congested streets create a heavy health burden; city legislators have proposed a bill that would require the citywide school district to purchase only all-electric school buses to reduce air pollution (source link).

 

Procurement Requirements: Industry

Companies with significant carbon footprints from the transportation and energy sectors have begun to pledge large-scale commitments to adopting ZECVs and building infrastructure for their fleets. Adopting ZECVs helps companies meet their corporate commitments to sustainability and to making their fleet operations more efficient and cost-effective. The EV100 Project, organized by The Climate Group, is coordinating industry efforts to switch corporate fleet vehicles to ZECVs.

Current Examples

  • Truck leasing and rental company Ryder has partnered with ZECV manufacturer Chanje as an exclusive provider of electric trucks for lease or rent (source link).
  • Logistics company FedEx will lease 900 Change all-electric trucks and purchase a further 100 Change all-electric trucks for its California operations (source link).

In Development

  • Logistics company DHL has committed to operating with zero emissions by 2025 and has set milestones to achieve its goals (source link).
  • Home and office furnishing company Ikea aims to make home deliveries almost entirely through all-electric trucks by 2020 in Amsterdam, Los Angeles, New York, Paris, and Shanghai (news source).

 

OEM Sales Requirements

Requiring vehicle manufacturers to sell ZEVs as a percentage of their vehicle sales has helped develop two of the largest light-duty EV markets in the world – both China and California use this model to promote the growth of the EV industry while allowing automakers flexibility in achieving their targets. Expanding the ZEV requirement to commercial vehicles would create a minimum market for ZEV manufacturers to grow their business, develop their supply chains, and innovate to meet new duty cycles.

Current Examples

In Development

  • California regulators are considering adapting the state’s ZEV sales requirement to the commercial vehicle market beginning as soon as 2024 (source link(pages 26-42)).

 

Fuel Economy Standards

Improving the fuel economy of medium- and heavy-duty vehicles may take several forms, but the requirements are typically technology-neutral and allow automakers the option to include and technologies that meet the minimum standards. Zero-emission technologies not only meet minimum standards, but can also create financial incentives (such as surplus credits) that allow vehicle manufacturers the flexibility to continue improving the fuel economy of their gasoline- or diesel-powered vehicles.

Current Examples

  • The European Union’s heavy-duty vehicle carbon dioxide regulations went into effect in January 2019, encouraging improved design and performance in heavy-duty vehicles while rewarding ZECV production (academic link).
  • The U.S. Environmental Protection Agency’s Phase 2 standards require GHG reductions for several types of heavy-duty vehicles while rewarding ZECV production (source link).

In Development

 

Clean or Renewable Fuel Standards

These regulations may work in different ways – a low-carbon fuel standard (LCFS) creates a cap on carbon intensity and credits low-carbon fuels production below that cap, whereas a renewable fuel standard identifies low-carbon fuels and establishes a volumetric requirement for their use – but they both create incentives to produce low-carbon fuels. Generators and refiners of electricity, renewable natural gas, and low-carbon biofuels earn credits for producing or selling their fuels, making low-carbon fuels less expensive and more abundant.

Current Examples

  • The United Kingdom’s Renewable Transport Fuel Obligation supports GHG emissions reductions by requiring fuel suppliers to produce purchase renewable fuels as a percentage of all fuel supplied (source link).
  • British Columbia’s Renewable & Low Carbon Fuel Requirements Regulation were introduced in 2010 to reduce reliance and impacts from non-renewable fuels and to develop a low-carbon economy (source link).
  • The European Union’s Renewable Energy Directive requires that a minimum percentage of all energy use, including 10 percent of on-road transportation fuels, must be renewable; the Fuel Quality Directive requires a reduction in the carbon intensity of petroleum fuels (academic link).
  • Both California and Oregon have passed LCFSs that cap carbon intensity of transportation fuels and incentivize low-carbon fuel production (source link(CA) (source link(OR)).

In Development

  • Washington State legislators are considering a bill that would enact an LCFS; the bill passed the state House but has not been voted on by the Senate (news link).

 

Utility Investments in Charging Infrastructure

Electric utilities are knowledgeable industry partners with an interest in expanding ZEDC adoption. However, they may be restricted from participating in charging markets due to regulations on competition or how utility funds can be invested. If states or utility commissions see a need for electric utilities to fill in charging infrastructure gaps and to participate in competitive charging markets, utilities may provide ZEDC charging at a large and rapid scale. California’s SB 350directed electric utilities to propose EV charging investments, which has led to more than $1 billion in proposed activities in the state.

Current Examples

In Development

  • Southern California Edison is spending over $300 million to install truck and bus charging stations at sites within its service territory within the next five years (news link).

 

Carbon Pricing

Placing a price on carbon is one of the most direct ways to create a market for ZECVs, since carbon emissions would create a higher cost for producing and operating petroleum-powered vehicles. Policies that create carbon prices may include federal or state carbon taxes or cap-and-trade systems, as well as technology-specific regulations such as low-carbon fuel standards or fuel economy standards (which are variants on cap-and-trade systems).

Current Examples

  • California’s Cap-and-Trade system was implemented in 2013 to reduce GHG emissions and develop low-carbon technologies and economies, including the funding of low-carbon transportation projects (source link).

In Development

  • The Transportation Climate Initiative is coordinating government agencies and stakeholders from 10 states and districts in the Northeast and Mid-Atlantic to develop a cap-and-invest program to reduce GHG emissions from the transportation sector (source link).

 

Innovative Business Models

Switching from petroleum-powered commercial vehicles to ZECVs may require revising aspects of business models, from purchasing and financing processes that reflect the higher up-front costs of vehicles or charging infrastructure installations to operating budgets that may be lower due to reduced maintenance and fueling costs. Some business models may be controlled by government agencies, such as transit agencies. Revising how vehicle fleets operate financially may create greater flexibility to adopt ZECVs.

Current Examples

  • China’s “Ten Cities, Thousand Vehicles” program encouraged innovation in ten large cities procuring all-electric transit buses; these cities worked with regional energy partners and automakers to explore leasing batteries, preserving the value chain of components, and successfully developing a system of rapid battery swapping (academic link(page 25)).
  • The FAST Act (Fixing America’s Surface Transit) allows transit bus operators to lease removable power sources, most notably EV batteries, reducing the all-electric transit buses’ up-front costs (source link) (news link).
  • Santiago’s transit bus operators have worked a consortium of public and private stakeholders, with local utilities that have purchased all-electric transit buses and leased them to the operators (news link).
  • Shenzen, a new and rapidly growing Chinese metropolis, has converted its entire transit fleet to all-electric vehicles through reducing costs, innovative business models, and building ample charging infrastructure (academic link) (news source).

In Development