DOCKETED Docket Number: 20-IEPR-02 Project Title: Transportation TN #: 235623 PUBLIC HEARING TO CONSIDER THE PROPOSED Document Title: ADVANCED CLEAN TRUCKS REGULATION State of California AIR RESOURCES BOARD PUBLIC HEARING TO CONSIDER THE PROPOSED ADVANCED CLEAN TRUCKS REGULATION STAFF REPORT: INITIAL STATEMENT OF REASONS DATE OF RELEASE: October 22, 2019 Description: SCHEDULED FOR CONSIDERATION: December 12, 2019 Location: California Environmental Protection Agency Air Resources Board Byron Sher Auditorium 1001 I Street Sacramento, California 95814 Filer: Raquel Kravitz Organization: California Energy Commission Submitter Role: Commission Staff Submission Date: 11/16/2020 2:03:15 PM Docketed Date: 11/16/2020 State of California AIR RESOURCES BOARD PUBLIC HEARING TO CONSIDER THE PROPOSED ADVANCED CLEAN TRUCKS REGULATION STAFF REPORT: INITIAL STATEMENT OF REASONS DATE OF RELEASE: October 22, 2019 SCHEDULED FOR CONSIDERATION: December 12, 2019 Location: California Environmental Protection Agency Air Resources Board Byron Sher Auditorium 1001 I Street Sacramento, California 95814 This report has been reviewed by the staff of the California Air Resources Board and approved for publication. Approval does not signify that the contents necessarily reflect the views and policies of the Air Resources Board, nor does mention of trade names or commercial products constitute endorsement or recommendation for use. This Page Intentionally Left Blank Table of Contents EXECUTIVE SUMMARY ................................................................................................ 1 I. INTRODUCTION AND BACKGROUND .............................................................. 1 Supporting Existing Policies ....................................................................... 2 Medium- and Heavy-Duty Vehicle Market .................................................. 4 Zero-Emission Vehicle Technologies ....................................................... 10 Near-Zero Technology ............................................................................. 11 Cleaner Combustion Technology ............................................................. 11 Status of Medium and Heavy-Duty ZEV Market ...................................... 12 Potential Challenges for ZEV Deployment ............................................... 14 Upfront Cost of ZEVs ............................................................................. 14 Infrastructure Investment and Fuel Cost ................................................ 15 ZEV Operational Characteristics ............................................................ 16 Risk of Differing Charging and Fueling Standards.................................. 17 Summary of Public Outreach ................................................................... 17 II. THE PROBLEM THAT THE PROPOSAL IS INTENDED TO ADDRESS ......... II-1 Need for Emission Reductions ................................................................ II-1 Oxides of Nitrogen Emissions ............................................................... II-2 Particulate Matter Emissions ................................................................. II-4 Greenhouse Gas Emissions .................................................................. II-5 Need to Reduce Petroleum and Energy Consumption ........................... II-5 Need to Foster Zero-Emission Technology ............................................. II-6 Need to Gather Information on Vehicle Operations ................................ II-7 III. OVERVIEW OF PROPOSED ACTIONS AND RELATED PROGRAMS ......... III-8 Summary of Proposed Action ................................................................ III-8 ZEV Sales Requirement ........................................................................ III-8 Large Entity Reporting Requirement .................................................... III-10 Crossover with Other Programs ........................................................... III-11 IV. THE SPECIFIC PURPOSE AND RATIONALE OF EACH ADOPTION, AMENDMENT, OR REPEAL ........................................................................... IV-1 Manufacturer ZEV Sales Requirement .................................................. IV-1 Large Entity Reporting Requirement .................................................... IV-22 i V. BENEFITS ANTICIPATED FROM THE REGULATORY ACTION, INCLUDING THE BENEFITS OR GOALS PROVIDED IN THE AUTHORIZING STATUTE ................................................................................ V-1 Air Quality and Climate Benefits .............................................................V-1 Benefits to Typical Businesses ...............................................................V-2 Truck and Bus Owners ..........................................................................V-2 Utility Providers .....................................................................................V-2 Other California Businesses ..................................................................V-2 Benefits to Small Businesses ................................................................V-3 Health Benefits to Californians ................................................................V-3 Greenhouse Gas Reduction Benefits - Social Cost of Carbon ................V-6 Energy Saving and Reduction of Petroleum Fuel Dependence ..............V-8 Expanding Zero-Emission Technologies to Multiple Sectors ..................V-9 Benefits in Disadvantaged Communities and Job Creation ....................V-9 Other Societal Benefits ......................................................................... V-10 VI. AIR QUALITY ................................................................................................... VI-1 Baseline Information .............................................................................. VI-1 Emission Inventory Methods .................................................................. VI-1 Emission Inventory Results .................................................................... VI-2 VII. ENVIRONMENTAL ANALYSIS ...................................................................... VII-1 VIII. ENVIRONMENTAL JUSTICE ........................................................................ VIII-1 IX. ECONOMIC IMPACTS ASSESSMENT OR STANDARDIZED REGULATORY IMPACT ANALYSIS ............................................................... IX-1 Business-As-Usual Baseline .................................................................. IX-1 Direct Costs ........................................................................................... IX-2 Changes Since the Release of SRIA .................................................... IX-2 Vehicle Population and Annual Mileage ............................................... IX-3 Cost Inputs ........................................................................................... IX-8 Total Costs ......................................................................................... IX-27 Direct Costs on Businesses and Individuals ........................................ IX-31 Direct Costs on Typical Businesses ................................................... IX-31 Direct Costs on Small Businesses ...................................................... IX-33 Direct Costs on Individuals ................................................................. IX-33 Fiscal Impacts ...................................................................................... IX-33 Local Government .............................................................................. IX-33 ii State Government .............................................................................. IX-35 Macroeconomic Impacts ...................................................................... IX-38 Summary and Agency Interpretation of Results ................................. IX-38 California Employment Impacts .......................................................... IX-38 California Business Impacts ............................................................... IX-39 Incentives for Innovation .................................................................... IX-40 Significant Statewide Adverse Economic Impact Directly Affecting Business, Including Ability to Compete ..................................................... IX-41 X. EVALUATION OF REGULATORY ALTERNATIVES ....................................... X-1 Alternative Concepts ...............................................................................X-1 Alternative Concept: Less Stringent ZEV Sales Requirement ...............X-1 Alternative Concept: Stricter ZEV Sales Requirement ..........................X-2 Alternative Concept: ZEV and Low NOx Credit Policy Approach ..........X-2 Alternative Concept: 200,000 ZEV Sales Requirement .........................X-3 Alternative Concept: Fleet Rule Requirement .......................................X-3 Alternative Concept: EMA Sector Requirement.....................................X-3 Required Alternatives..............................................................................X-4 Small Business Alternative ....................................................................X-4 Performance Standards in Place of Prescriptive Standards ..................X-4 Health and Safety Code section 57005 Major Regulation Alternatives ..................................................................................................X-4 XI. JUSTIFICATION FOR ADOPTION OF REGULATIONS DIFFERENT FROM FEDERAL REGULATIONS