The Legal Intelligencer
(by Julie Domike and Gina Falaschi)
The transportation sector is the nation’s largest source of greenhouse gas emissions. To reduce these emissions, cleaner transportation initiatives are on the rise nationwide, with new state programs being announced almost daily. While California has always been in the forefront of these enterprises, other states, including Pennsylvania, are not far behind. This is especially true of the new clean transportation initiatives for the medium- and heavy-duty vehicle market, which produces 25% of the transportation sector emission but only represents 4% of the vehicles on the road.
At a public hearing on June 25, the California Air Resources Board adopted a long-awaited Advanced Clean Trucks Regulation. California Air Resources Board, Notice of Decision (June 25, 2020). This program builds on California’s 2012 Advanced Clean Cars Regulation to further reduce emissions from the transportation sector by requiring truck manufacturers to sell a certain percentage of zero-emission vehicles beginning in model year 2024. The percentage will increase annually, meeting the ultimate goal of phasing out new diesel trucks by 2045.
The federal Clean Air Act affords California the ability to pass historic initiatives and to be at the forefront of setting new, more stringent, environmental standards. While Section 209 of the federal Clean Air Act generally preempts state and local emission standards for new motor vehicles, there are a few exceptions. See 42 U.S.C. Section 7543(a). The EPA can waive preemption for any state that had adopted standards for control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966. The only state that qualifies to receive such waivers is California, the only state to have adopted motor vehicle emission standards prior to March 1966.
Additionally, under Section 177 of the Clean Air Act, states that have EPA-approved plans to attain the national ambient air quality standards may adopt and enforce California’s emissions control standards for new motor vehicle and motor vehicle engines if the standards are identical to California’s standards and the state adopting the standards gives industry at least two years advance notice of their applicability. To date, 13 states—Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington—and the District of Columbia have adopted some or all of California’s motor vehicle and engines standards under Section 177 (Section 177 states). Several more states have announced their intention to adopt them.
So, while California is the first to adopt an electrification requirement for medium and heavy-duty trucks, because other states can adopt California’s standards under Section 177, many states are not far behind in considering adopting Advanced Clean Trucks in their own states.
In July, Pennsylvania Gov. Tom Wolf joined the governors of 14 other states (California, Connecticut, Colorado, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, and Washington) and the mayor of the District of Columbia in signing the multi-state medium- and heavy-duty zero emission vehicle memorandum of understanding (MOU). Available at https://www.nescaum.org/. This MOU commits the signatories to collaboratively foster a market for zero emission trucks, vans, and buses through the Multi-State ZEV Task Force, an existing program created by some Section 177 states to coordinate action to ensure the successful implementation of their state zero-emission vehicle (ZEV) programs. Within six months of the signing of the MOU, the task force will develop an action plan to consider funding, infrastructure, regulatory, data collection and other needs. As part of that action plan, the task force will consider the benefits associated with the adoption of California’s Advanced Clean Trucks rule under Section 177 of the Clean Air Act. The plan does not, however, commit the signatory states to adopt the Advanced Clean Trucks Rule.
In fact, under the MOU, the signatory states will strive to have all new medium- and heavy-duty vehicles purchased to be zero emission vehicles by 2050, five years later than the Advanced Clean Truck target. The signatory states will also focus on deploying zero emission trucks and buses to disadvantaged communities historically burdened with higher air pollution levels, and on working towards electrification of government and quasi-governmental agency fleets.
These initiatives will have substantial and beneficial environmental impacts in Pennsylvania and the other signatory states over the next three decades. There will be, necessarily, potentially significant growing pains associated with a dramatic shift in the industry long dependent on engines powered by diesel fuel. Instead, industry must scramble to adapt to electric or hydrogen fuel cell powered engines with their accompanying demand for new infrastructure and increased initial costs.
New charging infrastructure will be needed to support these medium- and heavy-duty vans, trucks and buses not only in Pennsylvania but throughout the signatory states, many of which are clustered in the Mid-Atlantic and Northeast. This will require coordination similar to that in The West Coast Clean Transit Corridor Initiative, a recent study commissioned by nine electric utilities and two agencies representing municipal utilities in California, Oregon and Washington. West Coast Clean Transit Corridor Initiative (June 2020), https://westcoastcleantransit.com/. The study provides a roadmap for states and public utilities to add electric vehicle charging for freight haulers and delivery trucks along Interstate 5 and adjoining highways to support the growth of the electric truck market. It contains recommendations regarding funding, locating charging stations, and capacity development. The phased approach suggested in the study would first involve installing 27 charging sites along the interstate at 50-mile intervals for medium duty-vehicles by 2025, and then expanding 14 of the 27 stations to accommodate electric big rig charging by 2030. Utilities will need to commission a similar study to support the development of infrastructure for an electric truck market in the Mid-Atlantic and Northeastern states.
In addition to the need for an expanded infrastructure, there will also be growing pains for the purchasers of medium- and heavy-duty vehicle fleets, especially small businesses and fleet owners. The initial cost of electric medium- and heavy-duty vehicles is anticipated to exceed that of today’s diesel-powered trucks and buses, though the cost differential likely will diminish over time as battery production ramps up and battery costs decrease. This increased cost could, however, prove to be too much for competitive industries struggling with tiny profit margins. The higher costs of vehicles will likely be passed on by fleet owners to those using their hauling services; ultimately, consumers may see increased costs of goods.
While the actual increase in cost can be disputed, what is not in dispute is that the cost of new trucks and the new infrastructure necessary to support them will be considerable. It remains to be seen whether and how the signatory states will jointly fund initiatives for widespread charging capabilities to be made available where buses and trucks need them. State funding will be critical to support the adoption of electric medium- and heavy-duty vehicles at the rapid rate at which these initiatives expect to fully replace diesel. Whether this adoption rate is possible without significant funding and incentives remains to be seen.
Julie R. Domike and Gina N. Falaschi are attorneys at Babst Calland Clements & Zomnir. Their practice focuses on regulatory issues arising under the Clean Air Act. They represent a variety of companies that have been the focus of the EPA’s regulations, including refineries, engine manufacturers, independent power producers, chemical plants, fuel producers, and construction and farm equipment makers. Contact Domike at 202-853-3453 or jdomike@babstcalland.com or Falaschi at 202-853-3483 or gfalaschi@babstcalland.com.
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Reprinted with permission from the July 30, 2020 edition of The Legal Intelligencer© 2020 ALM Media Properties, LLC. All rights reserved.
