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Incentives | Regulation

CARB Promises Millions for Heavy-Duty Truck Incentives

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October 9, 2017

CARB’s draft 2017­–18 Funding Plan for Clean Transportation Incentives proposes divvying up more than $660 million among zero- and near-zero-emission vehicle projects and incentives. The plan allocates $320 million to investments in heavy-duty vehicles and off-road equipment, including $180 million for low-NOx engine incentives and hybrid and zero-emission truck and bus vouchers.

The draft reflects several recommendations made by the Coalition, but the Coalition has raised concerns about areas of funding new to this version of the plan and about an unequal baseline for incentives.

Plan maintains, simplifies funding for low-NOx engines
The current draft fully implements two of the Coalition’s suggestions for creating the funding plan and improving the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). The Coalition made the recommendations following CARB’s February workshop to develop the 2017­–18 Funding Plan.

First, low-NOx engines powered by RNG will continue to be a stand-alone funding category, which best supports fleets transitioning to a cleaner technology. The truck and bus voucher and Air Quality Improvement Plan funding pots will be accessible to those seeking subsidies for low-NOx engines running on RNG. The funding is intended to also cover the new 11.9-liter Cummins Westport ISL G Near Zero engine, scheduled for release in February.

“Although we are pleased that the new engine is included in the voucher program, we’re concerned that there may be a loss of funding for the 11.9-liter engine because specific money isn’t being set aside for its release,” said Thomas Lawson, Coalition president, pointing out that the low-NOx–engine incentives are doled out on a first come, first served basis.

Second, CARB simplified HVIP’s NOx voucher structure by recommending a fixed amount for both low-NOx natural gas engines: $10,000 for the 8.9-liter Cummins Westport ISL G Near Zero engine and $40,000 for the 11.9-liter model. Previously, the voucher amount varied considerably between vehicle makes and models equipped with low-NOx engines.

“We appreciate staff accepting our recommendation on this. Taking the guesswork out of the process for fleets and dealers will help streamline how they interact with this program,” said Lawson.

Areas of concern
Still, the Coalition believes the draft needs more work, especially to enable smaller fleets to transition to low-NOx natural gas engines and to include NGVs in all areas of alternative fuels funding.

The plan’s definition of “incremental costs” in purchasing low-NOx engines compares these engines with other NGV models. The Coalition wants CARB to change the definition to reflect the cost difference between a diesel-powered vehicle and a low-NOx engine running on RNG. Doing so would align with the way CARB defines costs for other alternative technologies.

“I strongly believe that California’s programs should provide as many paths as possible to getting diesel trucks and buses off the road, and not put up hurdles. To this end, CARB should encourage the adoption of low-NOx trucks in fleets by providing incentives for NGVs equal to those for other technologies,” said Lawson in the Coalition’s comment letter on the draft Funding Plan.

“The emissions baseline for calculating incentive amounts should be the same for all technologies. Instead of comparing new low-NOx natural gas engines to older models that companies might not have, they should be able to compare the emissions benefits for NGVs running RNG against a diesel baseline,” he added.

The Coalition also proposed that the funding plan increase the per-engine amount of each voucher to help lower fleets’ up-front capital costs. The Coalition hopes CARB will provide an additional allocation to cover training and other costs associated with moving to a renewable fuel, as it does with hybrid and electric vehicle vouchers.

In addition to seeking more funding for the larger low-NOx natural gas engine, the Coalition suggested that CARB change its definition of “small fleet” from three or fewer trucks to five or fewer trucks. This would extend voucher eligibility to a greater number of trucks, removing a major barrier to adopting cleaner technology.

“If the concerns about small fleets apply to those with three trucks, surely fleets with just four or five trucks have the same issues. Prohibiting access to incentives for a small fleet that has one more truck than its competitor seems counterproductive the program’s goals,” said Lawson.

Coalition seeks more consideration of new programs
CARB has added two new areas of funding to the latest draft plan: the 3.0-liter Volkswagen settlement and the Agriculture Heavy Duty Truck Program.

The Coalition asked CARB to wait to allocate the Volkswagen settlement money until the comprehensive plan for the California Environmental Mitigation Trust is completed. That would allow the mitigation plan to include provisions for both of the low-NOx natural gas engines. (The first public workshop was scheduled for Oct. 9.)

In addition, the Coalition asked for more details about the new Agriculture Heavy Duty Truck Program, how it will complement current programs covered in the funding plan, and how the Coalition can help develop it.

“Our industry is very excited about this new program. The agriculture industry is a prime candidate for near-zero applications,” said Lawson in the Coalition’s comments letter. “Helping them switch from diesel to low-NOx engines using RNG is the most cost-effective way to clean up that industry.”

Lawson added, “Most of our earlier recommendations have been implemented in full or partially. We really appreciate staff working with us to put together a plan that supports near-zero engines in the heavy-duty trucking sector. We look forward to working with CARB to increase awareness of the incentive programs and how to access the engine vouchers.”

Photo ©Westport Innovations, used by permission

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