Proposed Changes to California ZEV Program Emphasize Plug-in Hybrids at the Expense of Full ZEVs in the Near- and Medium-Term
Changes proposed by the ARB staff to the California Zero Emission Vehicle (ZEV) program would encourage the production and deployment of plug-in hybrids (PHEVs) by allowing a new class of vehicle (which includes PHEVs and hydrogen ICE) to meet up to 90% of the ZEV requirement in the near term and up to 50% in the medium term. However, this will result in lower near- and medium-term production of pure Zero Emission Vehicles—battery electric vehicles and fuel cell vehicles—according to the staff.
The California Air Resources Board (ARB) will meet on 27 March in Sacramento to consider adopting the proposals. Adoption would conclude a process begun in 2006 to examine the need for modification to the current ZEV program. (Earlier post.)
The ZEV program was last modified in 2003 to resolve legal challenges and to better address the state of technology. At that time, the Board directed that an independent panel of experts convened to report on the status of ZEV technologies and their readiness for commercialization. The panel presented its findings to the Board in May 2007. (Earlier post.)
The Board directed ARB staff to return to the Board with proposed changes that address the state of technologies needed to meet the regulation. In directing that changes were needed, the Board affirmed its support for the program and emphasized that any changes should strengthen the overall objectives of the program.
The resulting amendments proposed by ARB staff are intended, according to the Initial Statement of Reasons (ISOR) document published in preparation for the March meeting, “to better reflect the state of technology and create incentives for new vehicle designs.”
The most significant proposed amendments affect the mid-term Phase III and Phase IV (2012–2017) requirements, while Phase II (2009 – 2011) requirements remain largely unchanged.
The key elements of staff’s proposal are the following:
Creation of the “New Path” for 2012. In 2003, the Board amended the ZEV program to define an alternative path for automaker compliance with the ZEV regulation that was solely designed to advance the commercialization of fuel-cell vehicles. At the same time, the credit system was adjusted so that one fuel cell vehicle garnered the same credits as 10 battery-electric vehicles.
The currently proposed amendments merges the base and alternative paths into a “New Path” in which the ZEV obligation and the options to use other vehicle types are expressed as annual percentage requirements. The pure ZEV (i.e., battery electric vehicle or hydrogen fuel cell vehicle) requirement may be offset by up to 90% “Enhanced” Advanced Technology Partial ZEVs (Enhanced AT PZEV), a new classification of vehicle in Phase III (2012– 2014). Examples of Enhanced AT PZEVs are plug-in hybrid electric vehicles (PHEVs) and hydrogen internal combustion engine vehicles.
In Phase IV (2015 – 2017), 50% of the ZEV target requirement could be met with Enhanced AT PZEVs. The amendments also establish a new Type IV category to recognize longer range ZEVs and adjust ZEV credits such that Type III ZEVs earn 4 credits and Type IV ZEVs earn 5 credits through 2017.
The Type IV ZEV is a ZEV with at least 200 miles range that is fast refuel capable (e.g, a fuel-cell vehicle such as the Honda FCX Clarity).
Currently, Type III ZEVs are defined as ZEVs with range greater than 100 miles and fast refueling capabilities. Staff is proposing to broaden that definition to allow ZEVs with range greater than 200 miles, but not fast refuel capable to be Type III ZEVs. This would mean that a battery EV with range greater than 200 miles would earn the same credit as a fuel cell vehicle with range less than 200 miles; the differentiation being the fast refueling capability.
Proposed Credits for ZEVs (Battery-Electric and Fuel Cell Vehicles) 2009-2017 Type Technology Range Existing Proposed I BEV 50-74 miles 2 2 I.5 (new) BEV 75-99 miles NA 2.5 II BEV >100 miles 3 3 III FCV
FCV: 100-199 miles
BEV: >200 miles
4 4 IV (new) FCV >200 miles NA 5
Establish carry-forward and carry-back provisions for ZEV credits. Modify the credit provisions under the proposed “New Path” to be consistent with the existing provisions contained in the Alternative Path which allow compliance over a three year window. Additionally, modify the way credits may be used after a specified time to limit the possibility that amassed credits could cause a black out of ZEV production for an extended period of time and to make the regulatory requirements better reflect the expected outcome in terms of vehicles produced.
Eliminate the cap on the use of full-function and city battery electric vehicles (EV) within the Alternative Compliance Path. Change the ratio for substitution for each vehicle type to be consistent with the credits earned by the vehicle rather than a separate ratio established only for pure ZEV obligation compliance. Create a new Type I.5 to recognize opportunity for a marketable longer range city EV.
Adjust credits for AT PZEVs. Modify the AT PZEV requirements, primarily to address PHEVs. The proposed amendments include addressing deployment of “blended” HEVs through an equivalent all electric range (EAER) credit, adjusting the credits for advanced componentry and fuel cycle emissions, and other conforming changes.
Double the credit for NEVs. Double the existing credit for neighborhood electric vehicles (NEV) to 0.3 credits per vehicle to reflect the vehicle’s positive environmental benefits but limited functionality compared with full function battery or fuel cell EVs.
Extend “Travel” provision. Extend the provision that allows Type III ZEVs placed in any state that has adopted California’s ZEV program to count towards California’s ZEV requirement through 2017, and include Type IV ZEVs. Include battery EVs within the provision but sunset the application of this provision for these vehicles in 2014.
Modify transition for intermediate automakers. Create a ramp-up period of six years for intermediate volume manufacturers (IVM) who are transitioning to large volume status. During this time, an automaker would be allowed to meet its ZEV requirements with increasing numbers of partial ZEV allowance (PZEV) of which a percentage must be AT PZEVs.
Public availability of ZEV credit data. Require that all production data be publicly available starting with the 2009 model year and release ZEV credit bank balance information for the 2010 model year and beyond.
Anticipated Effect of the Amendments. In the near-term (2009-2011), ARB staff expects that the proposal will not change the number of pure ZEVs, although the changes made do allow additional flexibility for the use of battery EVs.
ARB staff expects that most automakers will aggressively use their banked credits to meet the requirements in this timeframe “since ZEV technologies remain very expensive.” ARB staff expects that the actual number of new ZEVs produced is expected to be lower than the 2,500 commonly referred to for this time period.
In the medium term (2012-2017), ARB staff expects the proposal to decrease the number of pure ZEVs (e.g. fuel cell and battery EVs) introduced during this timeframe relative to the existing program.
Where the existing program would call for 75,000 ZEVs between 2012 and 2017, the staff proposal could result in as few as 27,500 ZEVs if manufacturers comply using the highest credit earning ZEVs. A mix of ZEV types used for compliance in this time period, including fuel cell vehicles and a range of battery EVs, would result in a higher number of ZEVs.
The overall number of advanced technology vehicles should increase as manufacturers are allowed to meet a part of the requirements with a new class of vehicle, referred to as Enhanced AT PZEVs. More than 150,000 Enhanced AT PZEVs could result in the 2012–2017 timeframe.
In the long term (2018 -), there are no changes proposed; the current 16% requirement beginning in 2018 remains in place. ARB staff expects the program will be revisited prior to the implementation of this portion of the regulation to determine if the pace of vehicle introduction is correct or if it can be accelerated.
The proposal is expected to reduce the cost of compliance by reducing the number of vehicles incorporating the most expensive technologies (fuel cell and battery EVs) needed during the 2012–2017 timeframe. The estimated annual savings averages $1.3 billion in 2012–2014 and nearly $0.9 billion in 2015 – 2017.
The changes proposed by staff significantly reduce an automaker’s cost of compliance, but still provide increased air quality benefits primarily because they rely upon the proven emissions benefits of commercially viable and increasingly available AT PZEVs. Staff believes that a reduction in the near term production volume of ZEVs is warranted because technological and cost hurdles remain that are best solved through continued lower volume demonstrations of the technologies...The proposed changes further encourage AT PZEV technologies as well as Enhanced AT PZEV technologies, both of which enable pure ZEV technology.