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Incentives

Coalition Seeks Higher Incentives for Low-NOx NGV Engines

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February 13, 2017

The Coalition has asked CARB to increase the incentive amounts for low-NOx NGV engines in this year’s approved Low Carbon Transportation Spending Plan, and to make more significant changes in next year’s plan.

Coalition President Thomas Lawson proposed the changes during a Feb. 10 CARB meeting to discuss the 2016­­–17 Low Carbon Transportation Spending Plan, which funds the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). CARB and CALSTART launched the HVIP in 2009 to accelerate the adoption of cleaner, more-efficient trucks and buses in California through point-of-sale incentives and vouchers. Low-NOx natural gas engines became eligible for the program in May 2016.

To get low-NOx heavy-duty trucks onto California’s roads and into the ports faster, however, CARB needs to offer higher-value vouchers for low-NOx NGV engines, Lawson said.

“To incentivize the move to a cleaner technology, there needs to be equity in the way voucher amounts are calculated,” he said. “Currently, customers receive a larger voucher amount for moving from diesel to electric vehicles because NGV vouchers are calculated on the basis of moving from an existing natural gas engine to a low-NOx natural gas engine.”

For the current year, Lawson asked CARB to adjust the incremental cost formula for low-NOx NGV engine incentives with renewable fuel by using a diesel vehicle as the baseline and increasing the per-vehicle voucher amount accordingly, or by providing a standard $25,000 for any vehicle equipped with a low-NOx natural gas engine.

“Many stakeholders have noted that the current low-NOx voucher amount isn’t enough to incentivize a fleet to switch to a cleaner technology, especially when that voucher is tied to a 100 percent renewable fuel requirement,” said Lawson. Following the meeting, he sent CARB a letter detailing the Coalition’s comments and proposed changes.

Looking forward to the 2017–18 plan, the Coalition suggested five fundamental changes to the HVIP.

  1. Change the definition of “incremental cost” to reflect the cost of switching from a diesel-powered vehicle to one with a low-NOx natural gas engine, creating parity with the incentives other technologies receive.
  2. Increase the per-engine amount of each low-NOx NGV voucher, because lowering the up-front capital costs for fleets is essential to the success of the program. Also consider providing additional funding to cover training and other costs associated with switching to a low-carbon renewable fuel, as the hybrid and electric engine incentive programs do.
  3. Simplify the low-NOx natural gas engine voucher structure, which varies drastically between vehicle makes and models equipped with low-NOx engines.
  4. Raise awareness of the HVIP program in the NGV industry and educate fleets and other stakeholders on how to access the vouchers.
  5. Explain the reasoning behind the 100 percent renewable-fuel requirement and why a lower percentage is not an option.

“Everyone’s goal should be to reduce the number of diesel vehicles on the road, especially in the heavy-duty sector. It’s especially important that CARB incentivize that transition as the 11.9-liter low-NOx natural gas engine joins the 8.9-liter engine on the market next year,” said Lawson. “These changes in the next funding plan are important to getting this low-NOx natural gas technology adopted in California, especially around the ports.”

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Photo ©Westport Innovations, used by permission

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