| TLDR: Unpacking climate provisions in the Infrastructure Investment & Jobs Act and uncovering who will be using the planned 500,000 chargers nationwide. |
| $1.2 trillion IIJA lotta money It’s understandable if many of you are bullish carbon nerds like myself and spent the past two weeks with eyes peeled for updates from climate negotiations at COP26 in Glasgow, Scotland. It’s probably not understandable to the remaining majority of the population so let’s bring the climate conversation closer to home and focus on keeping the wheels turning and the lights on here in the U.S. On Nov. 5, the U.S. House of Representatives passed the Infrastructure Investment & Jobs Act (IIJA) by a vote of 228-206. President Joe Biden signed it into law this past Monday. We all by now know it’s the largest-ever investment in U.S. infrastructure, at $1.2 trillion over the next five years. We all should be expecting massive investments in road, bridge, and port projects to kick off in the coming years. In fact, FreightWaves has posted some great content around the impact on trucking jobs, a breakdown of many provisions in the bill, and how these investments can prevent the next major supply chain crisis. But how will these investments impact the energy transition and combat climate change? I’m so glad you asked! |
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| Gotta spend if you wanna save (emissions) While the law includes typical funding reauthorization areas around roads, bridges, public transit, freight and passenger rail, R&D, etc., it’s notable that $550 billion of the total is new spending. These funds are directed broadly toward “new economy” infrastructure such as broadband deployment and adoption, enhanced grid security and resiliency, and clean energy programs. Of the $1.2 trillion price tag, nearly two-thirds is devoted to the transportation sector. However, just a small portion of that overall budget is earmarked for low-carbon mobility or climate resiliency. For the ambitious/interested, here is a great review of IIJA by the numbers with some great charts. This one also is really informative, though no charts (sad). Not that ambitious/interested? Ok, how about a generous bullet list of my favorite/interesting pieces before a deeper dive on the sexier stuff (EVs!!)? – $7.5 billion for EV charging infrastructure (Also includes hydrogen, propane, and natural gas. Huh?) – $5 billion for zero- and low-emission school buses – $250 million for electric/alternative fuel ferries – Grant program to electrify port equipment and reduce idling truck emissions – $3 billion to support the battery supply chain (processing, recycling, and rare earth resiliency) – $8 billion for “regional clean hydrogen hubs” – Grant program to improve the resiliency of coastal infrastructure in the face of extreme weather events and to move coastal infrastructure to higher ground – Lots. Lots. More. (Sorry if the list is less generous than expected) Does anybody else find it odd that we’re going hard to the paint in the fight against methane emissions and yet simultaneously including natural gas as an option for alternative fuel corridor infrastructure funding? I guess as long as those trucks are running on processed cow farts instead of fracked gas, then it’s a win. And I am very bullish on cow farts, especially for medium- to heavy-duty trucks. If that’s your thing, check out the trivia below. Enough with the gross oversimplifications and bad livestock jokes: on to EVs! |
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| Who’s going to use all those EV chargers? In case it hasn’t been said enough, the world seems to be very, very excited about electrifying transport. How else can we explain Rivian becoming the fourth most valuable auto manufacturer despite not having sold a single unit? Here are two things I believe are true, well three actually. 1) Passenger and light-duty EV sales will skyrocket in the coming decade. 2) My next vehicle purchase will probably be fully electric or hybrid. 3) The majority of heavy-duty trucks globally will NEVER be majority electric. Why are these three beliefs true? No. 1, I believe that the combination of shifting economic buying power to climate-conscious millennials and a massive wave of capital investment by OEMs inevitably means that EVs overtake combustion engines in the next 20 years (maximum). No. 2, I personally think they’re cool and my driving needs prevent range anxiety. If there’s a tax credit available in five years when my daughter is driving age, guess what? She’s probably going to be whipping around in my old 2011 Camry while I’m day trading crypto in my Tesla on autopilot to a local craft brewery in Nashville. And for No. 3…stay tuned for a future NZC newsletter breaking down the future of alternative fuels in Class 8 truck markets. Still skeptical? Well, consider a new report from Bloomberg NEF. Global EV sales are projected to rise to 5.6 million in 2021, up from 3.1 million in 2020. Also, check out an impressive Twitter thread breaking down the key takeaways from the report. Plus, note that 32% of the global auto market is now covered by manufacturers’ commitments to end sales of fossil-fuel-powered vehicles, and 20% is covered by equivalent national or subnational policies. And don’t forget that much of the globe agrees that we must reduce greenhouse gas emissions drastically in the coming decades or we’ll face growing harm from increasingly extreme weather, which will cause more storms, wildfires, and droughts and result in more displaced populations, famine, disease, death, etc. ad nauseam (COP26, remember). Finally (I promise we’re done), recall that the transportation sector is one of the largest contributors to anthropogenic emissions. According to the EPA: Transport accounts for the largest portion (29%) of total U.S. GHG emissions in 2019. Cars, trucks, commercial aircraft, and railroads, among other sources, all contribute to transportation end-use sector emissions. Within the sector, light-duty vehicles (including passenger cars and light-duty trucks) were by far the largest category, with 58% of GHG emissions, while medium- and heavy-duty trucks made up the second-largest category, with 24% of emissions. Between 1990 and 2019, GHG emissions in the transportation sector increased more in absolute terms than any other sector (i.e., electricity generation, industry, agriculture, residential, commercial), due in large part to increased demand for travel. |
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| To recap, passenger and light-duty EVs are coming in greater numbers and sooner than we thought. Of that, we can be certain. And it’s good news because it targets the biggest slice of transport emissions pie. Overcoming emissions from the remaining segments of heavy-duty hauling, air and ocean will be much more difficult to swallow. But don’t worry about that this weekend. Enjoy your Thanksgiving holiday and pumpkin pie with your family. But save room for a future installment where we dive headlong into the challenge of decarbonizing cargo freight. Read more: EPA Fast Facts on Transport Emissions |
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| See Eye (CI) Q: Which fuel has a lower carbon intensity? Biodiesel or renewable natural gas (RNG)? A: In general, RNG has a lower CI than biodiesel. As of Q2 2021, the California Air Resources Board’s (CARB) latest report shows the average carbon intensity of Bio-CNG is 64.41 gCO2e/MJ lower than biodiesel. Biodiesel averaged 28.54 compared to RNG’s -35.87 (yes, it’s negative, primarily because of a weighted calculation given methane’s elevated global warming potential relative to carbon dioxide). Source: CARB Quarterly Data Summary |
| Have friends that are equally concerned and interested in sustainable supply chains? Please share this link to keep them informed: https://freightwaves.com/NZC Until next week, stay curious and keep improving. Cheers, Tyler @tyleracole |