California’s Zero-Emission Vehicle Program on Track to Reduce State-Wide GHG Emissions

In January, the California Air Resources Board (“CARB”) released a Midterm Review of Advanced Clean Cars Program report (“Midterm Review”), the most exhaustive evaluation to date of the California passenger vehicle market.  The Midterm Review includes the first comprehensive and in-depth analysis of California’s Zero-Emission Vehicles Program (“ZEV Program”).  The Midterm Review found that California is on track to deliver significant clean-air and public health benefits by 2025 through its ZEV program and GHG regulations. 

California is at the forefront of adopting environmental regulations and policies to reduce dependence on petroleum fuels and, in turn, reduce emission of air pollutions and greenhouse gases.  CARB has long focused on developing programs to reduce emissions from mobile sources, including motor vehicles, and has been leading the battle against GHG emissions and air pollution since 1995, when the state required all new vehicles to be labeled with information about a vehicle’s smog emissions.  More recently, in 2016, California passed Senate Bill 32, which directed CARB to ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by 2030.  California also enacted Assembly Bill 197, which declares that continuing to reduce GHG emissions is critical for the protection of the state overall, but especially for the state’s most vulnerable communities.

The ZEV Program furthers California’s commitment to reduce GHG emissions by requiring automakers to sell ZEVs in California.  ZEVs are vehicles driven only by an electric motor that are powered by advanced technology batteries or a hydrogen fuel cell.  ZEV vehicles include plug-in electric vehicles (PEVs), battery electric vehicles (BEVs), and hydrogen fuel cell vehicles (HFCVs).  Unlike motor vehicles, ZEVs have no tailpipe emissions over their entire lifetime.  Compared to gasoline counterparts, ZEVs emit 100% fewer greenhouse gases, emit over 75% fewer ozone-forming air pollutants, and use 100% less petroleum.  Nine other states (Connecticut, Maine, Massachusetts, Rhode Island, Vermont, New Jersey, New York, Maryland, and Oregon) have also adopted California’s ZEV program.  

The program’s objective is to ensure that automakers research, develop, and market ZEVs.  Governor Brown set an ambitious goal to have 1.5 million ZEVs on the road by 2025.  The ZEV Program works by assigning “ZEV credits” to automakers that the automaker must meet through sale of ZEVs.  The total percentage requirement starts at 4.5% for model year 2018 sales, and increases to 22% for model year 2025 sales.  Thus, an automaker selling 100,000 cars in 2018 needs at least 4,500 ZEV credits to comply with the program.  Most ZEVs generate more than one credit per vehicle; for example, plug-in hybrids (which only partly drive on electricity) receive between .4 and 1.3 credits per vehicles sold, whereas battery electric and fuel cell vehicles receive between 1 and 4 credits based on range.  For instance, the Tesla Model S, which has a range of more than 200 miles, is eligible for 3.3 credits.  Manufacturers are allowed to carry over excess credits from one year to the next, and can purchase or trade ZEV credits from other manufacturers.

The ZEV Program is one of many statewide programs aimed at reducing GHG emissions from the transportation, electricity, commercial/residential, industrial, agricultural, and waste management sectors.  Bick Law LLP’s California Environmental Lawyers will continue to monitor the ZEV Program, as well as any other zero-emission or low-emission programs, to assist clients in meeting California’s goal to reduce GHG emissions.