CALSTART
Volume 1, Issue 3 July—September 2013
Information Technology Solutions Clean Technologies and Fuels Summary FUNDING AND REGULATORY TRENDS STATE AND FEDERAL CLEAN FUEL STANDARDS DRIVE INVESTMENT IN LOW CARBON FUELS
In September, the Ninth Circuit Court of Appeals upheld California's Low Carbon Fuel Standard (LCFS). The LCFS is a performance standard that requires a 10% reduction in the "carbon intensity" of transportation fuels by 2020. The main aim of the LCFS is to support the market penetration of cleaner fuels such as electricity, biofuels, hydrogen and natural gas.1 The market is quickly evolving. While commercial scale production of cellulosic ethanol has lagged predictions, experts are seeing greater than expected contributions to LCFS targets from other low carbon fuels such as renewable
Source: University of California, Davis— Status Review of California's Low Carbon Fuel Standard - Spring 2013
diesel, biodiesel, natural gas, and electricity. The LCFS is expected to continue driving investment in this wide array of diesel alternatives.
Source: University of California, Davis— Status Review of California's Low Carbon Fuel Standard - Spring 2013 THIS NEW “MEMBERS-ONLY” REPORT FROM CALSTART WILL BE PUBLISHED ON A QUARTERLY BASIS AND WILL HIGHLIGHT KEY INFORMATION IN THE CLEAN TRANSPORTATION SECTOR, WITH A SPECIAL FOCUS ON MARKET TRENDS, ENVIRONMENTAL TRENDS, AND FUNDING & REGULATORY TRENDS.
For More Information:
At the federal level, the US Environmental Protection Agency (EPA)finalized the 2013 percentage standards for four fuel categories that are part of the Renewable Fuel Standard (RFS) program. The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the US fuel supply (a 9.74% blend). Because the production of cellulosic biofuels has grown at a much slower pace than envisioned, the rule sets a 6 million gallon target for cellulosic biofuels use in 2013, less than half the level in the proposed rule issued in February 2013. By law,
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Whitney Pitkanen, Senior Project Manager wpitkanen@calstart.org 626.744.5600
Clean Technologies and Fuels Summary
FUNDING AND REGULATORY TRENDS the EPA can lower the required volumes of advanced biofuels and total renewable fuels by up to the amount that it reduces the required volume of cellulosic biofuels.2 Despite a few high-profile program setbacks, the advanced biofuels industry continues to grow as a number of commercial scale operations are coming online. On August 27th in Sacramento, CALSTART, in coordination with Environmental Entrepreneurs (E2) and the California Natural Gas Vehicle Coalition, hosted the First Annual Clean, Low-Carbon Fuels Summit. Expert panelists represented the largest producers and providers of biodiesel, renewable diesel, and natural gas in the US and beyond; producers and distributors of emerging fuels like DME and natural gas made from very low carbon renewable sources including methane; academic researchers working in this area to develop new feedstocks from purpose grown energy crops and algae; technical specialists; utilities; regional air quality management districts; biofuels associations; and an alternative fuel retailer.
July– September 2013 Clean Vehicle Rebate Project (CVRP) and the Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (HVIP) programs are fully funded. In other state funding news, New York Governor Andrew Cuomo, announced the state has launched a $19 million truck voucher program to promote the purchase of alternative fuel-powered commercial trucks. The program, administrated by the New York State Energy Research and Development Authority and managed by CALSTART, will support the purchase of battery-powered trucks and compressed natural gas powered trucks as well as retrofitting diesel engines with emissions-control devices. It is designed for Classes 3 - 8, including large pickups, box trucks, buses, tractor trailers, garbage trucks and construction vehicles, such as cement and dump trucks.3
MAJOR INCENTIVES BILLS SIGNED INTO LAW
At the end of September, CALSTART and the clean transportation technologies industry scored a major policy victory when California Governor Jerry Brown signed AB 8 into law. The bill, which was coauthored by Assembly Member Henry Perea and Senator Fran Pavley, extends $2 billion in funding for clean transportation incentive programs until 2023. Funding for these key California programs was set to expire in 2016. Also signed into law was Senate Bill 359 which provides funding for California’s successful incentive programs for plug-in cars and hybrid and electric trucks and buses. CALSTART helped lead a broad coalition to pass this legislation and make sure the
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California Governor Brown Signs Historic $2 Billion Clean Transportation Funding Bill (Photo Credit: CALSTART)
July—September 2013
Clean Technologies and Fuels Summary
derive efficiencies through economies of scale to help to launch mass-market FCEVs as early as 2017.6
TECHNOLOGY TRENDS
PROJECT COLLABORATIONS IMPROVE TECHNOLOGY HYDROGEN FUEL CELLS: In the second fuel cell-related announcement General Motors (GM) has made this year, GM and the US Army Tank Automotive Research, Development & Engineering Center (TARDEC) are expanding their collaboration in the development of hydrogen fuel cell technology. GM and TARDEC will jointly test new hydrogen fuel cell-related materials and designs to evaluate their performance and durability before assembling them into full scale fuel cell propulsion systems. The partners said that the collaborative effort will enable them jointly to develop technology that meets both of their requirements and accomplish more tangible results than either could achieve on its own. The project is expected to continue for up to five years.4 Previously in July, GM and Honda announced a longterm, definitive master agreement to co-develop a next-generation fuel cell system and hydrogen storage technologies, aiming for the 2020 time frame. GM and Honda plan to work together with stakeholders to further advance hydrogen refueling infrastructure, which is critical for the long-term viability and consumer acceptance of fuel cell vehicles.5 And even earlier in January, Daimler AG, Ford Motor Company and Nissan Motor Co., Ltd., signed a threeway agreement for the joint development of a common fuel cell system to speed up availability of the technology and significantly reduce investment costs. The goal of that collaboration is to develop jointly a common fuel cell electric vehicle system while reducing investment costs associated with the engineering of the technology. The strategy is to maximize design commonality, leverage volume and
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NATURAL GAS: In other business collaborations, Ricardo Inc. and Clean Air Power (CAP) have entered into an agreement for the development of a dual fuel engine business. This agreement brings together Ricardo's system integration experience with CAP's dual-fuel technology of compression ignited diesel engines that use natural gas with diesel pilot ignition. CAP's dual-fuel system enables heavy-duty vehicles to operate primarily on natural gas, with diesel fuel acting as a 'liquid spark plug.' If the natural gas runs out, the system changes to operate on 100% diesel, providing complete diesel operational backup.7 In terms of consumer offerings, Southern California Gas Co. (SoCalGas) introduced four dual-fuel prototype natural gas vehicles (NGVs) to California consumers at the Santa Monica AltCar Expo on September 20-21. The BMW, Chrysler, Honda and Hyundai demonstration vehicles represent a diverse group of manufacturers and were part of an array of six dual-fuel NGVs. The vehicles demonstrate how existing automotive technology can economically add low-cost domestic natural gas to power consumer vehicles without compromising convenience or performance. Two other vehicles, a Ford Mustang and GMC Acadia are also planned to be brought to California.8 The California Air Resources Board (CARB) has been encouraging engine manufacturers to introduce new technologies to reduce NOx emissions below the current mandatory on-road heavy-duty diesel engine emission standards for model years 2010 and later.9 Natural gas is seen as an option to meet the low NOx standards. A consortium of funding
July—September 2013
Clean Technologies and Fuels Summary agencies (SCAQMD, CEC, and SoCal Gas) recently selected Cummins Westport and Westport Innovations to fund the development of engines with 90 percent lower NOx levels. It is envisioned that the proposed optional low NOx standards would encourage truck manufacturers and fleets to showcase these new technologies and could be utilized to prioritize additional funding in incentive programs such as the Carl Moyer and AB 118. Staff plans to propose new optional low NOx standards for on-road heavy-duty engines to the Board in late 2013.
ful initial demonstration of the vehicles. Beyond statewide incentives such as the Hybrid and ZeroEmission Truck and Bus Voucher Incentive Project offered by the California Air Resources Board, EVI has partnered with the San Joaquin Valley Air Pollution Control District to reduce the costs of clean vehicles even further. PG&E said it plans to eventually replace all 942 of its conventional fuel Class 5 vehicles, including bucket trucks, flat beds, and other service trucks, with plug-in electric hybrid models, which would save the utility nearly $3.5 million in fuel costs and reduce GHG emissions by over 9,000 metric tons annually.10
Optional Low NOx Exhaust Emission Standards for 2015 and Subsequent Model Year (grams per brake-horsepower-hour or g/bhp-hr) NOx
NMHC or NMHCE
CO
PM
HCHO
Optional Low NOx 0.10
0.10
0.14
15.5
0.01
0.5
Optional Low NOx 0.05
0.05
0.14
15.5
0.01
0.5
Optional Low NOx 0.02
0.02
0.14
15.5
0.01
0.5
Manufacturers may elect to certify heavy duty engines to the above optional low NOx emission standards in lieu of the primary NOx emissions standard of 0.20 g/bhp-hr.
Earlier in the month, Eaton quietly withdrew its hydraulic hybrid from the market, but continues to support it. Sources cite the rise of compressed natural gas as the reason for the decision. Eaton continues to offer electric hybrid drives.11 Nissan announced that it is in the "final development phase" for its electric compact van—the eNV200—after trying it out with various commercial companies since 2011. Nissan is also speeding up work on its e-NT400 electric light truck, which the company says has an 87-mile single-charge range.12
EV/PHEV’s: At the end of September, Electric Vehicles International (EVI), in partnership the Pacific Gas and Electric Company, unveiled an electric hybrid drivetrain Class 5 truck. The Range Extended Electric Vehicle (REEV) utility truck features an all-electric range of 45 miles and fuel savings of up to 30% when the units are operating in hybrid mode. PG&E accepted delivery of the first two REEV units this summer, and purchased two additional units after a success-
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Nissan e-NV200 electric compact van, available to public next year
July—September 2013
Clean Technologies and Fuels Summary California Sales:
MARKET TRENDS ELECTRIC VEHICLES
Global Sales: According to Navigant Research’s recently published EV market report titled Global Forecasts for Light Duty Hybrid, Plug-in Hybrid, and Battery Electric Vehicles: 2013-2020, combined worldwide sales of hybrid and plug-in electric vehicles will reach 6.6 million annual units by 2020 and become almost 7% of the total light-duty vehicle market. The report cites several factors that are fueling this growth, including consumer demand for lessexpensive operational costs compared to gasolinepowered vehicles, consistent government policy, multiple new models from major automakers, and lower battery prices. U.S. Sales:
Source: California Auto Outlook
In California, hybrid vehicle market share (excluding plug-in hybrids) increased to 7% in the first half of 2013, up from 6.2% in 2012, according to the California Auto Outlook, for the second quarter of 2013. Plug-in hybrid market share was an estimated 0.7%, while battery electric vehicle market share hit 1.1%. 14 Toyota remained the dominant hybrid brand in the California market during the first half of 2013, with Honda a distant second, closely followed by Ford. On the electric vehicle side, Tesla Motors posted 2,308 units of the Model S in California during the second quarter of 2013. The Model S also received the highest score of any car Consumer Reports had ever reviewed, and the National Highway Traffic Safety Administration awarded the car its highest rating possible, a five out of five in every category.15
Total U.S. plug-in hybrid and battery car sales totaled 57,976 in 2013's first eight months, more than the 51,938 for all of last year. And General Motors and Nissan posted record U.S. plug-in sales in August as their low-cost leases pushed battery-vehicle deliveries this year past 2012's tally. GM delivered 3,351 Chevrolet Volt plug-in sedans last month, up 18 percent from a year earlier, and Nissan's allelectric Leaf hatchback sales more than tripled to 2,420.13
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EV Charging Infrastructure: For the first time in history, a premium car manufacturer has partnered directly with a charging point manufacturer and installer to provide EV charging facilities in the home in the United Kingdom. BMW AG and Schneider Electric will provide home surveys, supply and installation of the charg-
Clean Technologies and Fuels Summary ing point, as well as offering maintenance and comprehensive support. The BMW i Wallbox will enable owners charge their BMW i3 at up to 7.4kW from zero to 80% within three hours, and on to a full charge within four hours.16 In other international partnership news, Toyota, Nissan, Honda, and Mitsubishi jointly announced their agreement to work together to promote the installation of chargers for plug-in electric vehicles, plug-in hybrids, and battery-electric vehicles—and to build a charging network service that offers more convenience to drivers in Japan. At present, there are about 1,700 quick chargers and just over 3,000 regular chargers in Japan—generally recognized as insufficient. The government of Japan announced subsidies for installation of charging facilities totaling ¥100.5 billion (US$1.03 billion) as part of its economic policy for fiscal year 2013 to develop the charging infrastructure and expand the use of electric-powered vehicles using alternative energy sources.17 Less positively, on September 17, Ecotality made its official bankruptcy announcement, and reportedly laid off the majority of its workforce as it struggled to meet its daily operational commitments. The company was forced to cut back or suspend the servicing of its more than 13,000 home and public charging stations on the Blink Network.
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July—September 2013 Ecotality built its network largely with the support of stimulus funds from the Department of Energy, but despite receiving more than $100 million in funding, the company failed to generate enough revenue to sustain operations.18 On October 10th, CarCharging Group emerged as the winner of an auction for the rights to Ecotality’s assets.19
ENVIRONMENTAL TRENDS California sees improvement in diesel emissions but global warming is already having dramatic impacts According to an annual analysis of air pollution from port sources, the Port of Long Beach in California has cut diesel particulates by 81% since 2005. The results for 2012, released in August, mark six straight years of improving air quality in the harbor area due to efforts to reduce air pollution caused by goods movement. The reasons for air quality improvements include (1) bigger ships carrying cargo more efficiently, (2) newer ships with cleaner engines, (3) the January 1, 2012 deadline for full implementation of the Clean Trucks Program, (4) increasing use of shore power, and (5) a new lowsulfur fuel rule for ships that started in August 2012.20
July—September 2013
Clean Technologies and Fuels Summary
However, according to a new report also released in August issued by the California Environmental Protection Agency titled “Indicators of Climate Change in California,” climate change is "an immediate and growing threat" affecting the state's water supplies, farm industry, forests, wildlife and public health, the report says. Although California has done more than nearly every other state to reduce emissions of heattrapping gases, if it were a country, it would still rank as the 13th largest source of greenhouse gases in the world, ahead of France, Brazil, Australia and Saudi Arabia.21 Unlike previous studies which have tended to focus on specific countries or regions, a new scientific report published in September takes a global perspective on climate change and sets out projections of wide-ranging impacts from droughts to floods to sealevel rise. The report titled “Co-benefits of Mitigating Global Greenhouse Gas Emissions for Future Air Quality and Human Health” concludes that tackling climate change would save millions of lives a year by the end of the century purely as a result of the decrease in air pollution. The study was published as scientists from around the globe gathered in Stockholm to the final details of a landmark assessment of climate science. 22
REFERENCES
January 28, 2013. 7
Trucking Info. “Ricardo and Clean Air Power to Develop Dual Fuel Engine Business.” September 20, 2013. 8
PR Newswire Services. “SoCalGas Unveils Prototype Vehicles Powered By Natural Gas, Gasoline: AltCar Expo Visitors Get First Look.” September 19, 2013. 9
State of California Air Resources Board. “PROPOSED AMENDMENTS TO CALIFORNIA EXHAUST EMISSION STANDARDS AND TEST PROCEDURES FOR 2004 AND SUBSEQUENT MODEL HEAVY-DUTY DIESEL-ENGINES AND VEHICLES.” April 18, 2013. 10
Trucking Info. “PG&E, EVI Unveil Electric Hybrid Bucket Trucks.” September 20, 2013. 11
Fleets and Fuels. “ Eaton drops HLA, Keeps Electric Drive.” September 13, 2013, 12
Autobloggreen. “ Nissan e-NV200 electric van in final development phase.” September 11, 2013.13 Navigant Research. “ Global Forecasts for Light Duty Hybrid, Plug-in Hybrid, and Battery Electric Vehicles: 2013-2020.” Published 2Q 2013. 13
Automotive News. “ Deals juice U.S. sales of plug-in vehicles.” September 5, 2013. 14
California Auto Outlook. “California’s New Vehicle Market Continues to Post Impressive Gains.” Volume 9, Number 3 Released August 2013 Covering Second Quarter 2013. http:// www.cncda.org/secure/GetFile.aspx?ID=2583 15
Claire Thompson. “Tesla Model S rocks safety tests, gets highest possible score.” The Daily Grist. August 20, 2013. 16
BMW Group Press Release. “BMW i seals partnership deal to provide home charging installation service in the UK.” July 8, 2013. 17
Nissan Motor Company Press Release. “Toyota, Nissan, Honda and Mitsubishi Agree to Joint Development of Charging Infrastructure for PHVs, PHEVs and EVs in Japan.” July 29, 2013. 18
Zach McDonald. “Ecotality Announces Bankruptcy, Gets $1.2M in Help from Nissan.” Plugincars.com. September 17, 2013. 19
1
Dana Hull. “Ninth Circuit upholds California's Low Carbon Fuel Standard.” San Jose Mercury News. September 19, 2013. 2
U.S. Energy Information Administration. “EPA finalizes Renewable Fuel Standard for 2013; additional adjustments expected in 2014.” August 14, 2013. 3
Transport Topics Online. “New York Launches Alt-Fuel Truck Voucher Program.” August 12, 2013. 4
GM News, “GM and U.S. Army to Expand Fuel Cell Testing.” September 30, 2013. 5
GM News. “GM, Honda to Collaborate on Next-Generation Fuel Cell Technologies.” July 2, 2013. 6
Zach McDonald. “CarCharging Group Announces Acquisition of Ecotality’s Blink Network.” Plugincars.com. October 10, 2013. 20
Trucking Info. “Cleaner Trucks Contribute to Cleaner Air Says Long Beach Port Study.” August 20, 2013. 21
Paul Rogers. “Global warming already having dramatic impacts in California, new report says.” San Jose Mercury News. August 8, 2013. Full report at http://www.calepa.ca.gov/. 22
Damian Carrington . “Cleaner air from tackling climate change would save millions of lives, says study.” The Guardian. September 22, 2103.
For comments or questions about this report, please contact Whitney Pitkanen at wpitkanen@calstart.org or 626.744.5609, or Susan Romeo at sromeo@calstart.org or 626.744.5686.
Automotive News. “Daimler, Ford and Nissan sign deal on fuel-cell cars.”
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