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Impact of Transportation-Related Environmental Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Impact of Transportation- Related Environmental Initiatives Final Report 22nd May, 2020 Project C021273 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Contents • Executive summary • Project report • Appendix – I (Project report addendum) • Appendix – II (Movement 101) • Appendix – III (Summary of research) 2 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 37 U.S. and global Movements were assessed prior to shortlisting 14 U.S. specific Movements for long term impact assessment Movement Emissions, fuel economy Alternative Tolls, congestion pricing Mobility Category: and carbon pricing fuels and telecommuting initiatives Low Carbon Fuel Connected and Subsidies / Incentives Congestion pricing Standard autonomous vehicles ZEV Mandate Biofuels blending Telecommuting Shared mobility Charging Infrastructure Movements shortlisted CAFE standard Global Movements assessed Movements excluded for further • China Corporate Average Fuel • EU Fuels Quality Directive (FQD) • Vehicle retirement program assessment Transportation Consumption (CAFC) standard Tolls • London Congestion Charge • Tolls Climate Initiative (TCI) • EU Emission Standards • Milan Area C • Parking benefits • Japan Energy Conservation Law • Trängselskatt I Stockholm • Passenger drones • South Korea Average Fuel Economy • Canada Telework Policy • Multi-modal transit Carbon pricing (AFE) program • EU Energy Taxation Directive (ETD) • Delivery platforms • China NEV Mandate • Autonomous Vehicle Bill Cleaner Trucks • Norway Norsk Elbilforening • EU Standard 2018/0143 (COD) Initiative (CTI) • EU Renewable Fuels Directive II (RED II) • France Mobility Law Vehicle restrictions (LEZs) / ICE bans 3 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Each Movement’s influence on emissions, fuel economy, vehicle demand, cost and scale of impact were considered for assessment Movement Category: Emissions, fuel economy and carbon pricing Alternative fuels Tolls, congestion pricing and telecommuting Mobility initiatives High Illustrative chart Subsidies Legend / Incentives LEZ / ICE bans Effectiveness: influence of a Movement Charging ZEV on emissions reduction, fuel economy infrastructure mandate improvement and plug-in electric vehicle demand weighted equally CTI CAFE Cost: cost to comply with a Movement standard Medium TCI Congestion Impact: scale of impact of a Movement Telecommuting LCFS pricing Carbon localized impact from movements, pricing Biofuels Effectiveness limited to urban areas / few cities blending Movement adopted by few states Mobility / CAV National level movements / can be adopted federally Low Low Medium High Cost Source: Ricardo analysis 4 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Telecommuting along with PEV subsidies and ZEV mandate are most effective in reducing emissions Movement Category: Emissions, fuel economy and carbon pricing Alternative fuels Tolls, congestion pricing and telecommuting Mobility initiatives Impact: considers scale High of impact of a Movement localized impact from movements, limited to LEZ / Subsidies urban areas / few cities ICE bans / Incentives Movement adopted Charging ZEV by few states infrastructure mandate National level movements / can be CTI adopted federally Telecommuting CAFE Acronyms standard • Corporate Average Fuel Medium TCI Economy (CAFE) LCFS • Transportation Climate Carbon Congestion pricing Biofuels Initiative (TCI) Effectiveness pricing blending • Low Carbon Fuel Standard (LCFS) Mobility / • Cleaner Trucks Initiative CAV (CTI) • Zero-Emission Vehicle (ZEV) • Connected and Autonomous Vehicles Low (CAV) Low Medium High Cost Source: Ricardo analysis 5 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Technological advancements in batteries will likely aid several Movements in the mid to long term Telecommuting would reduce emissions by ~5% - 15% – Telecommuting equivalent to several other “Movements” – but at negligible cost Emissions, fuel PEV “Movements” have the highest emissions reduction economy and effectiveness though with relatively high cost. Subsidies most carbon pricing effective in near term Scaling back of CAFE standards will affect emissions reduction CAFE standard drawing higher reliance on PEVs to achieve desired impact Movement Category: Emissions, fuel economy LCFS has had moderate success but will rely on PEV uptake in and carbon pricing Biofuels future. EPA continues to roll back RFS targets for 3 out of 4 alternative fuels; effectiveness of mandate under question Alternative fuels Tolls, congestion pricing TCI and carbon pricing – though effective tools – may have and telecommuting Carbon pricing marginal impact given the limited nationwide momentum they may generate Mobility initiatives 6 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Movements range from federal to local mandates, and ones in proposal phase • Subsidies: Federal and state incentives offered to incentivize PEV adoption. Federal tax credit of upto $7,500 available for PEVs. Various state level rebates, HOV access etc. offered • ZEV mandate adopted in 1990 by California to control emissions from passenger vehicles decrees increasing ZEV floor requirements through 2025+. Adopted by 11 other states (CT, ME, MA, VT, RI, OR, NY, NJ, MD, CO, WA) • CAFE standard is fleet wide average fuel economy targets to be achieved by passenger vehicle OEMs. SAFE rule implemented in Emissions, fuel March 2020 mandates ~1.5% CAGR growth in fleet fuel economy for MY 2021 – 2026. Scaled back CAFE standards mandated ~5% economy and CAGR fuel economy improvement between 2020 – 2025 carbon pricing • Cleaner Trucks Initiative (CTI) is still in proposal phase and aims to address diesel commercial trucks NOX emissions in low load conditions. Estimated to impact model years 2025+ • Transportation Climate Initiative (TCI) is a still-in-work “cap & invest” initiative estimated to start in 2022. TCI seeks to reduce transportation emissions and develop a clean energy economy in 12 Northeastern regions • Numerous carbon pricing initiatives have been proposed; however none has been enacted into legislation. Distribution of revenue from most proposed carbon pricing initiatives are not targeted towards transportation • LCFS adopted by California and Oregon mandates reduced “Carbon Intensity (CI)” of fuels over time. 20% CI reduction targeted by Alternative fuels 2030 compared to 2010 level • RFS is a federal biofuel standard passed in 2005 with aim of blending ~36B gallons of biofuels by 2022 in U.S. fuel mix Tolls, congestion • Telecommuting: Telework Enhancement Act of 2010 (applicable only for federal employees) mandates each federal agency to pricing and establish a telecommuting policy and maximize where applicable telecommuting • Zone based congestion pricing legislation adopted only by New York City in U.S. (implementation in 2021) Mobility • No legislation currently in place initiatives Emissions, fuel economy Tolls, congestion pricing Movement Category: Alternative fuels Mobility initiatives & carbon pricing & telecommuting 7 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Acronyms and abbreviations ANPR Advance Notice of Proposed Rule LEZ Low Emission Zone BEV Battery Electric Vehicle LNG Liquified natrual gas CAFE Corporate Average Fuel Economy MMT Million Metric Tonnes CAGR Compound Annual Growth Rate NEV New energy vehicles CARB California Air Resources Board OEM Original Equipment Manufacturer CAV Connected and autonomous vehicles parc / VIO Vehicles in operation CI Carbon Intensity Plug-in Electric Vehicles (includes Battery CNG Compresses natural gas PEV Electric Vehicles and Plug-in Hybrids) CSE Center for Sustainable Energy PM emissions Particulate matter emissions CTI Cleaner Trucks Initiative RFS Renewable Fuel Standard CVRP Clean Vehicle Rebate Program SAFE Safer Affordable Fuel-Efficient DCFC Direct-current fast charger TCI Transportation Climate Initiative EPA Environmental Protection Agency VAT Value-added tax EU European Union VMT Vehicle Miles Travelled EV Electric vehicles include mild-hybrid, hybrid electric, plug-in xEV hybrids and batery electric vehicles (BEV) GHG emissions Greenhouse gas emissions YOY Year-on-year HEV Hybrid Electric Vehicle ZEV Zero-Emission Vehicle ICE Internal Combustion Engine kWhr kilowatt-hour LCFS Low Carbon Fuel Standard LDV Light Duty Vehicles (pass cars and light trucks) 8 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Contents • Executive summary • Project report • Appendix – I (Project report addendum) • Appendix – II (Movement 101) • Appendix – III (Summary of research) 9 Impact of Transportation - Related Environmental Initiatives Project # C021273, 22 May 2020 Telecommuting would reduce emissions by ~5% - 15% – equivalent to several other “Movements” – but at negligible cost Movements: Telecommuting Movement Category: Emissions, fuel economy and carbon pricing Alternative fuels Tolls, congestion pricing and telecommuting Mobility initiatives High Subsidies Key takeaways / Incentives LEZ / ICE bans • ~37% of U.S. workforce can feasibly Charging ZEV complete their work from home(1) infrastructure mandate – Current U.S workforce is ~165M(2) CTI – Beginning of April 2020,
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