More than $109 million of California’s share of the money for cleaner vehicles funded by the giant settlement in the Volkswagen diesel scandal will be used to buy, among other things, zero-emissions vehicles (ZEVs) for drayage.
The South Coast Air Quality Management District (AQMD) announced earlier this month that it was releasing about $109.3 million for two categories of cleaner-energy vehicle purchases. The first is for “combustion freight and marine projects,” which comprises a wide range of vehicles including Class 7 and 8 trucks as well as ZEV locomotives.
The second category — zero-emission drayage trucks — has the potential to impact implementation of the state’s Advanced Clean Fleets (ACF) rule and has garnered the most short-term attention. The ACF rule requires that any new drayage vehicle registered with the state after Jan. 1 2024 must be zero-emission, though enforcement of that rule has been put on hold by the California Air Resources Board (CARB) while legal issues are sorted out.
Funds released under the Volkswagen Environmental Mitigation Trust under the category of ZEV Class 8 trucks can be used for vehicles besides drayage, including dump trucks and concrete mixers.
Applicants were able to start putting in for the funds starting March 5. South Coast AQMD said the window for funding will remain open until the funds are all spoken for. A spokeswoman said the agency expects this round of funding will be obligated by 2028.
While this is not the first time South Coast AQMD has released funds from the Vokswagen trust for clean vehicle purchases, including ZEVs, a spokeswoman said the previous release disbursed $41 million, so the latest round is far bigger.
The $109 million is what remains under the two funds that were allotted by the state to AQMD for the vehicle purchases.
The funding for ZEVs can include other trucks, but the primary ZEV push in California has been in drayage, owing in part to the ACF rule that, when ultimately implemented, will bar the addition of non-ZEV trucks from the state’s drayage registry.
The Bay Area AQMD was allocated $80 million under the Volkswagen disbursement, with $70 million of that to go to freight- and marine-related projects. The San Joaquin Valley Air Pollution Control District got $130 million, but that is all targeted at buses. CARB has an additional $63 million in reserve.
The maximum amount that can be used for a drayage vehicle is $240,000 per truck.
Under the combustion freight and marine projects funding, the limit is $102,000 for a replacement vehicle, whether it’s what the state calls a freight truck or other types of trucks. The limit is $60,000 for a repower. The California Air Resources Board defines repower as “(replacing) the engine in a vehicle with another engine meeting a subsequent engine emissions standard.”
Funding under this category can also go to such applications as tugboats and locomotives.
The funding from the Volkswagen set-aside joins other ZEV and clean vehicle incentives in California. In particular, $140 million is available for drayage trucks under the California Hybrid and Zero Emission Truck and Bus Voucher Incentive Project, known more widely as HVIP. Of that $140 million, California is directing $60 million to the Ports of Long Beach and Los Angeles, though there are limits to how much the incentives will pay.
The latest funding release from South Coast AQMD is part of an overall $423 million that California has received from the Volkswagen trust. It is part of the nearly $2 billion in funding that Volkswagen is providing after reaching a settlement with the federal government, in 2016 and 2017, for Volkswagen’s efforts to avoid unsuccessful emissions tests on its diesel engines sold in the U.S.
When the EPA announced the settlement with Volkswagen, it said that almost 600,000 vehicles between model years 2009 and 2016 were equipped with “defeat devices … designed to cheat on federal emissions tests.” Evading limits on nitrous oxide emissions was the primary goal of the scheme.
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