Features Truck News — 25 June 2018

 

California’s truck and bus operators looking to transition from diesel to cleaner emission vehicles will get a boost from the state beginning in October.

Almost $US600 million in subsidies and project proposals wending their way through the system will be reviewed by the state’s air resources board, which approves and administers funds for programs that focus on cleaning up California’s air.

It’s already allotted $US423 million for green truck and bus subsidy programs using money from California’s share of the national Volkswagen diesel emissions settlement fund.

The air board is considering an additional $US162.6 million in low- and zero-emission truck, bus and port equipment grants and subsidies from two other clean transportation programs it operates.

The board’s vote on allocations from the Low Carbon Transportation Investments fund and the Air Quality Improvement Program is scheduled for its October meeting.

Of the $US585.6 million available for various commercial vehicle programs, $US373.6 million is earmarked for direct subsidies for buyers of low- and zero-emission trucks and buses.

Funding at this level “will help the kind of development projects we have been seeing continue moving forward, and the authorities will be able to support better incentives to electrify the ports and help make the areas emissions free,” said Antti Lindstrom, trucking industry analyst with IHS Markit.

“A lot is riding on how the other states that have been following California’s example will decide to move forward in the current climate,” Lindstrom said. “If those states continue to follow California’s lead, then the momentum for a nationwide shift may exist; otherwise it will all become much more fragile.”

Not everyone is enthralled with the funding proposal, however.

Calstart, a non profit clean transportation technologies springboard that administers one of the major clean truck and bus subsidy programs, says the air board needs to provide additional funding for programs that demonstrate new clean commercial vehicle technologies.

“Despite the great one-off benefits of [funds from] the Volkswagen settlement, the funding proposal doesn’t help with improving the capacity to help develop and field steady improvements and next-generation systems that we will need to fully meet air quality and climate goals,” said Bill Van Amburg, executive vice president of the Pasadena based coalition.

“We are working hard to get additional funding for low-carbon transportation,” he told Trucks.com.

The bulk of the funding comes from the VW dieselgate settlement, which is separate from the low-carbon program.

Initially, the state received $US1.3 billion from the settlement, which Volkswagen agreed to pay after it was caught fiddling with diesel software so its vehicles could pass the state’s emissions tests while sending illegally high amounts of NOx, or nitrogen oxides, into the air.

Of the $USA423 million in Volkswagen money parcelled out by the air board last month, $US90 million will be used for subsidies for the purchase of all-electric heavy-duty drayage and freight trucks. Zero-emissions freight handling equipment subsidies and a variety of clean emissions marine projects at California’s ports will get $US70 million.

Buyers of electric trucks can get up to $US200,000 per vehicle under terms of the subsidy program.

The board awarded $US130 million of the funds for subsidies for zero-emission transit, shuttle and school buses. Subsidies for school buses can run as high as $400,000 per bus, while transit and shuttle bus subsidies were capped at $130,000 per vehicle.

An ongoing program to convert existing diesel engine heavy vehicles to natural gas was awarded $US 60 million despite objections from one board member who favoured a larger grant to a natural gas conversion program.

Of the remaining Volkswagen funds, $US10 million was earmarked for light-duty electric vehicle charging stations and hydrogen fuel stations for fuel cell electric cars.

The final $US63 million was held in reserve.

The air board last year allotted $US800 million of the Volkswagen settlement to pay for thousands of electric vehicle chargers throughout the state.

Much of the funding from the state’s low carbon transport program goes to subsidies for buyers of light-duty zero-emissions and plug-in hybrid cars and trucks.

The air board does recognize the importance of helping truck and bus operators afford the higher-cost clean emissions vehicles that state air-quality regulations increasingly require. The board this year has proposed $US162.6 million for various truck and bus subsidies and grants.

Most of the money, $US134 million, comes from the Clean Transportation Investments fund, financed with proceeds from the auction of credits under the state’s carbon emissions cap and trade program. An additional $US28.6 million comes from the Air Quality Improvement Project, financed by the smog abatement portion of annual vehicle registration fees.

The ongoing Hybrid and Zero-Emission Truck and Bus Incentive Project – HVIP – is slated to receive $US68 million for the 2019 fiscal year that begins in October.

That’s up from $41 million last year. The funds include incentives for purchase of heavy-duty trucks and buses with low NOx natural gas engines as well as for hybrid and all-electric trucks and buses. The exact split between HVIP and low-NOx subsidies hasn’t yet been decided.

To date, the HVIP program has received $US228 million in funding and has subsidized the purchase of almost 3,500 low- and zero-emission trucks and buses.

Additional help for truck buyers comes from the Air Quality Improvement Program, or AQIP, which funds a truck loan assistance program, slated to receive $US25.6 million under the allocation plan. The remaining $US3 million in the AQIP fund for 2019 will be used for diesel particulate filter retrofit subsidies.

Other clean truck and bus incentive spending in the clean transportation fund includes $US10 million for a new pilot program intended to help boost adoption of zero-emission trucks and buses, especially by small fleets.

Key elements of the program, which is still in development, call for projects that will help improve truck and bus operators’ confidence in new technologies that will clean up heavy vehicle emissions. Lowering costs for those technologies so zero-emission vehicles are more affordable without subsidies also is a priority.

The air board’s staff has been gathering public comment on the proposed spending for several months and will post a final proposal on the board’s website on or before 21 September.

The air board is scheduled to vote on the fiscal 2019 spending plan at its meeting in Sacramento on 25 October.

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