BOARD MEETING DATE: March 2, 2018 AGENDA NO. 34 PROPOSAL: Approve and Adopt Technology Advancement Office Clean Fuels Program 2017 Annual Report and 2018 Plan Update and Resolution, Receive and File Revised Membership of Technology Advancement Advisory Group, and Approve and Adopt Membership Changes for Clean Fuels Advisory Group SYNOPSIS: Each year by March 31, the Technology Advancement Office must submit to the California Legislative Analyst an approved Annual Report for the past year and a Plan Update for the current calendar year. Staff has reviewed the Clean Fuels Program with the Clean Fuels Advisory Group, the Technology Advancement Advisory Group and other technical experts. Additionally, the 2018 Clean Fuels Program Draft Plan Update was presented to the Technology Committee for review and comment at its October 20, 2017 meeting. This action is to approve and adopt the final Technology Advancement Clean Fuels Program Annual Report for 2017 and 2018 Plan Update as well as the Resolution finding that proposed projects do not duplicate any past or present programs. This action is to also receive and file revised membership of the Technology Advancement Advisory Group and approve and adopt membership changes to the SB 98 Clean Fuels Advisory Group. COMMITTEE: Technology, February 16, 2018; Recommended for Approval RECOMMENDED ACTIONS: 1. Approve and adopt the attached Technology Advancement Office Clean Fuels Program Draft 2017 Clean Fuels Annual Report and 2018 Plan Update and include it in the SCAQMD’s Clean Fuels Program; 2. Approve the attached Resolution finding that the Technology Advancement Office Clean Fuels Program Plan Update for 2018 and its proposed projects do not duplicate any past or present programs of specified organizations; 3. Receive and file membership changes to the Technology Advancement Advisory Group; and 4. Approve and adopt membership changes to the SB 98 Clean Fuels Advisory Group. Wayne Nastri Executive Officer MMM:FM:NB:LCM:DAH Background Achieving federal and state ambient air quality standards within the South Coast Air Basin will require emission reductions from both mobile and stationary sources beyond those available from current technologies. The 2016 AQMP includes measures relying on a mix of currently available technologies as well as the expedited development and commercialization of lower-emitting mobile and stationary advanced technologies in the Basin to achieve these standards. The 2016 AQMP projects that a 45 percent reduction in NOx is required by 2023 and an additional 55 percent reduction by 2031, the majority of which must come from mobile sources (both on- and off-road), requiring widespread deployment of current clean air technologies as well as further commercialization of advanced technologies. This year will mark the 30th year of the Clean Fuels Program, along with establishment of the Technology Advancement Office (TAO). TAO’s Clean Fuels Program is an integral part of the SCAQMD’s effort to achieve the significant NOx reductions called for in the 2016 AQMP. The Clean Fuels Program, which is implemented as a public- private partnership in conjunction with private industry, technology developers, academic institutions, research institutions and government agencies, has enabled the SCAQMD to historically leverage public funds with outside investment in a ratio of about $4 of outside funding to every dollar of Clean Fuels funding. More than ever before, the Clean Fuels Program must foster and accelerate advancement of transformative transportation, and off-road technologies where possible, with an emphasis on zero and near-zero emission vehicle and fuel technologies. This is especially true given the region’s thriving goods movement industry along with the corresponding impact on environmental justice communities. This year marks another hallmark in TAO, the 20th year of the Carl Moyer Program. The two programs produce a unique synergy, with the Carl Moyer Program providing the necessary incentives to push market penetration of the technologies developed and demonstrated by the Clean Fuels Program. This synergy enables the SCAQMD through its Clean Fuels Program, coupled with Carl Moyer and other incentive programs TAO oversees, to act as a leader in both technology development and commercialization efforts targeting reduction of criteria pollutants. -2- The SCAQMD is required by Health and Safety Code (H&SC) Section 40448.5.1 to adopt a plan that describes the expected cost and benefits of proposed projects prior to any Clean Fuels Program expenditures and find that the proposed projects do not duplicate programs of other organizations specified in the H&SC provision. In 1999, SB 98 amended this provision by requiring annual updates to this Plan as well as a 30- day public notice to specified interested parties and the public prior to the annual public hearing at which the Board takes action on the Clean Fuels Program. SB 98 also requires the preparation of an annual report with specified contents that include the prior year’s accomplishments. This annual report requires review by an advisory group and approval by the Board, prior to submittal to specified offices of the California Legislature each year. This legislation also specifies the make-up of the 13-member Clean Fuels Advisory Group and its primary responsibility to make recommendations regarding the most cost-effective projects that advance and implement clean fuels technology and improve public health. The membership of the SB 98 Clean Fuels Advisory Group was initially approved by the Board in September 1999. Changes to the composition are reviewed by the Technology Committee on an as-needed basis, subject to full Board approval as required by the charter. Prior to the formation of the SB 98 Clean Fuels Advisory Group, the SCAQMD had formed the Technology Advancement Advisory Group (TAAG) to review and assess the Clean Fuels Program. The charter and membership of the TAAG was revised in 1999 with formation of the SB 98 Clean Fuels Advisory Group so the functions of the two advisory groups would be complementary. The TAAG’s charter specifies membership changes must be approved by the Technology Committee. In fact, membership changes to both the TAAG and the SB 98 Clean Fuels Advisory Group were approved last year, concurrently with approval of the prior report. Proposal These actions are for the Board to approve and adopt the TAO Clean Fuels Program 2017 Annual Report and 2018 Plan Update and, as part of the Board’s consideration of the 2018 Plan Update, to make a finding that the update and its proposed projects do not duplicate any past or present programs of specified organizations. The review process by the two advisory groups helps ensure that SCAQMD efforts do not duplicate projects. The advisory groups provide feedback to staff on the documents during in- person biannual meetings and through subsequent correspondence. The advisors are all experts in different fields and are current or retired members of national laboratories, state or federal agencies and/or academia. Staff diligently monitors specific technologies through efforts at state and federal collaboratives, partnerships and industrial coalitions. Finally, staff also invites other technical experts to review the Annual Report and Plan Update. Through this effort, staff is confident there is no duplication of technology projects represented in the Plan Update, as required in the H&SC. -3- Furthermore, these actions are to also receive and file membership changes to the TAAG and approve and adopt membership changes to the SB 98 Clean Fuels Advisory Group, as required by their respective charters. This package includes a Resolution (Attachment A), proposed new advisory group members including their biographies (Attachment B), and one combined document comprising the TAO Clean Fuels Program 2017 Annual Report and 2018 Plan Update (Attachment C). Clean Fuels Program Annual Report 2017 The Annual Report covers projects and progress of the Program for Calendar Year (CY) 2017. As discussed earlier, this report addresses all of the requirements specified in H&SC 40448.5.1(d). Specifically, this report includes the following required elements: • A description of the core technologies that the SCAQMD considers critical to ensure attainment and/or maintenance of ambient air quality standards and a description of the efforts made to overcome commercialization barriers; • Staff analysis of the impact of TAO’s Clean Fuels Program on the private sector and on research, development and commercialization efforts by major automobile and energy firms; • A description of projects funded by the SCAQMD, including a list of recipients, key subcontractors (if known), cofunders, matching state or federal funds, and expected and actual results of each project advancing and implementing clean fuels technology and improving public health; • The title and purpose of all projects undertaken pursuant to the Clean Fuels Program, the names of the contractors and key subcontractors involved in each project, and the amount of money expended or committed for each project; • A summary of the progress made toward the goals of the Clean Fuels Program; and • Funding priorities identified for the next year and relevant audit information for previous, current and future years covered by the report. During CY 2017, the Clean Fuels Program executed 59 new projects or studies and modified 8 continuing contracts adding additional dollars to sponsor research, development, demonstration