On June 25, California regulators will vote on a first-of-its-kind rule that would require truck manufacturers to sell an increasing percentage of zero emissions vehicles.
On the eve of that vote, CARB Board member Dan Sperling talked to FreightWaves about the “tremendous innovation” in trucking, his sympathy for industry players juggling uncertainties and upfront costs and why a “trucking czar” might make the clean truck transition much easier.
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On June 25 the California Air Resources Board (CARB) is expected to approve the nation’s first zero emissions truck sales mandate, a rule that would require manufacturers to sell an increasing percentage of electric vehicles. By 2035, about 60% of all medium and heavy-duty trucks sold in the state would be electric.
Response from the trucking industry has been less than enthusiastic, with sentiment ranging from outright opposition to concern about lack of charging infrastructure, incentives and other programs that would help boost demand and bring down costs of fleet electrification.
Ahead of the historic vote, FreightWaves spoke to CARB board member Dan Sperling, a professor of Civil Engineering and Environmental Science and Policy, and founding Director of the Institute of Transportation Studies at the University of California, Davis. He talked about the “tremendous innovation” in trucking, his sympathy for industry players juggling uncertainties and high upfront costs and why a “trucking czar” might make the transition to clean truck technology much easier. (Interview excerpts have been edited for length and clarity.)
FreightWaves: One of the top concerns for industry is the upfront cost associated with electric trucks, the cost for the manufacturer and the cost to the fleet owner.
Sperling: The regulation is putting a cost burden on the manufacturer, but look at what’s happening on the light-duty side. Manufacturers are investing massive amounts of money into electric cars and light trucks and massive amounts in all of the automation technologies as well. In that case, the automation is voluntary. But it’s the same phenomenon – the automotive industry has a challenge. The good news is technology is evolving so quickly that all of these options become very real and very compelling. That’s the good news for society, but it’s a challenge for the industry because it requires a massive amount of investment.
FW: Last week, some of the biggest truck manufacturers and suppliers, including Daimler Trucks North America and Cummins, formed a coalition calling for federal investment in clean transportation technologies as well as a voucher incentive program to bring down purchasing costs. Where do incentives fit into the new regulation?
Sperling: Incentives are really important. Part of the challenge is that the government has no czar of the trucking industry or czar of the automotive industry. So when we talk about electrifying trucks, we know the manufacturing costs are higher, and we need some way to scale economies so vehicles are attractive economically to manufacturers and consumers.
But while incentives are important, many of the analyses and studies (including from my colleagues at UC Davis) and even the fleets themselves are saying that in many cases truck electrification will soon make sense economically. That would be especially true for delivery trucks and trucks only driven 100 miles a day. You put in a smaller battery, and you get huge savings, as well as lower energy costs, less maintenance, and longer life. So when you look at the total cost of ownership, many of these trucks very quickly will be economically attractive to the buyer.
These positive assessments are especially relevant for large fleets. They can manage their fleets more effectively, provide charging infrastructure more efficiently, and can absorb the higher initial purchase cost as they await the lower costs for energy and maintenance.
FW: What about heavier-duty Class 8 vehicles?
Sperling: It will be more difficult for Class 8 tractors, that’s more challenging for sure – especially those used for long-haul. It might make more sense for this application to use hydrogen fuel cell electric technology and/or low-carbon biofuels. We’ll see.
I also want to address regulatory proposals to further reduce NOx emissions – and thus prolong the acceptability of diesel trucks. Companies that manufacture engines and emissions controls are coming up with innovative ways to reduce NOx emissions, but in ways that also improve fuel economy. They’re doing things like cylinder deactivation, in which you shut down some of the cylinders and get better fuel economy.
(Along with the electric truck rule, CARB is simultaneously developing lower NOx emission standards for combustion trucks)
These new innovations are important, because until now, most technologies to reduce NOx emissions came at a cost to fuel economy. Now we see the potential for reductions in both NOx and fuel consumption, with the possibility that improved fuel economy ends up paying for NOx reduction costs.
FW: So you’re saying the same cost reductions will happen with heavy-duty electric vehicle technology.
Sperling: This is a remarkable time in history for cars and trucks. What we’ve seen with emission reductions is radical and revolutionary. When diesel emission regulations took effect, beginning in the late 1980s, engineers went to work, and they’ve dramatically reduced the particulate matter and NOx emissions.The overarching theme is the remarkable amount of innovation taking place in vehicle technology. The same thing is happening with heavy-duty automation technology. It’s mostly driver assist at this point. That’s expensive too, but it all provides benefits.
FW: In public comments submitted to CARB, the Truck and Engine Manufacturers Association, among others, argue the Board should have taken a more targeted approach, focusing on delivery trucks and some other lighter-duty segments first and phasing in larger trucks later.
Sperling: The requirements are different for Class 7 and 8 trucks. They are phased in more slowly. (Under the clean truck rule, 40% of Class 7 and 8 tractors sold in California would have to be zero emission in 2035.) But I agree with the overall point. It would have been good if we could have targeted these most attractive market segments first. Speaking as an academic or from the perspective of manufacturers, I would agree with that. But as a regulator trying to devise rules for each market segment becomes a very complicated process… How do you do it? How do you enforce it? Many of us would have liked to have seen a more targeted approach, but it is probably just too complicated.
FW: Another criticism of the sales mandate is the lack of a corresponding rule requiring fleets to purchase the trucks. That is, without a fleet purchasing requirement, it will be difficult for manufacturers to meet the sales goals.
Sperling: I agree 100% with their concern. It’s a very legitimate, appropriate concern, and that is why CARB is moving as fast as it can to also adopt a fleet purchase mandate, which will take effect at the same time as the sales mandate, in 2024.
(CARB will hold its first public hearings on the fleet purchasing rule in late summer or early fall.)
FW: Renewable natural gas and other near-zero emissions fuel advocates are disappointed the rule doesn’t allow for alternatives to electric vehicles, an approach they argue would accelerate the clean transportation transition.
Sperling: I’m sympathetic. I’ve always been a proponent of setting performance standards, and letting the market arrive at the lowest cost, best solution. In this case, if manufacturers sold low-NOx engines that were fueled with low-carbon biofuels, (gas or liquid), then we should be happy. Of course, we’d need to be able to confirm that the combusted fuels really were low-carbon, which is one challenge in pursuing that policy route. But the bigger concern is strategic.
California is committed to electrifying virtually the entire transportation system. Many believe that retaining combustion engines would undermine the overall strategic thrust and slow the transition. Another concern is that the limited low-carbon biogas (from landfills, dairy farms, etc.) would be of higher value when used in other industrial and building applications.
FW: It would be remiss of me not to ask about the coronavirus. Many trucking organizations have called on CARB to delay rulemaking due to the economic downturn tied to the viral outbreak.
Sperling: I’m sympathetic. The economic downturn is a concern for everything we do. But the rule doesn’t take effect for another four years, so hopefully we’ll be out of it by then. And certain segments of the trucking industry have done okay [during the pandemic]. Certainly the delivery industry has done well. For many segments of the industry, however, the near-term future is going to be a strain. Personally, not speaking on behalf of CARB, I would say if the economic downturn persists, then I think we should take another look at the phasing in of the ZEV truck requirements.
FW: There’s a great deal of interest in the industry about the inner workings of CARB – the relationship between staff and board and how decisions are made.
Sperling: You have a board comprised of politicians and a variety of experts, so you can expect that we all have different perspectives. Overall, though, the board and staff are very well aligned. I suspect the motivation for your question relates to the first hearing on the rule last December, when many members of the Board said to the staff, “Go bigger and go stronger.” The staff went back and then proposed a more aggressive rule. I’m on record saying at the December board hearing that I was concerned about adopting a more aggressive rule. I am still uneasy about the aggressiveness of the rule, but I have come to believe that battery costs – and possibly hydrogen and fuel cell costs – are continuing to drop fast enough to make this transition compelling.
FW: How will the battle between California and the Trump administration over auto emissions standards influence the state’s ability to implement the clean truck rule?
Sperling: It certainly doesn’t help. I would note there are a number of lawsuits ongoing. Indeed, just in the last few months, several more states have said they are going to join California in adopting our light-duty zero emission mandate. Even more have adopted California’s vehicle greenhouse gas standards. There is also a presidential election in November.
FW: Earlier you talked about a trucking czar. What exactly do you mean by that title?
Sperling: If I were the czar of all policy related to trucks, I would build more chargers and hydrogen fuel stations for trucks, adopt a fleet and sales mandate, and offer incentives to early buyers of electric trucks. But we don’t have a czar; rather we have a variety of government agencies and policies that are not always fully aligned. It means we all need to work together. If I were a truck manufacturer I would be nervous about this rule, because we don’t know how the market is going to respond. You can’t force a company to sell what no one wants. There has to be an appreciation for all the pieces of the system that all need to be coordinated.
FW: Would you support the creation of a trucking czar position? Andrew Yang, the former presidential candidate, proposed a similar role, albeit for different reasons.
Sperling: (laughs) I think that’s heading in a dangerous direction. No, I would not support a czar of trucking. But it comes down to our highest political leaders – the governors and the President need to nudge or coerce all the relevant agencies under them to work more closely together. California is doing a pretty good job. CARB has developed good working relationships with the Energy Commission and the Public Utility Commission, as well as others – but the reality is that each operates under different legislative authority and with different missions.
More coordination is good government. It doesn’t always happen, but that’s what we should aspire to.
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