Follow the moula

Author Jessica Dell, West Coast Bureau Chief

California’s spending on zero emission vehicles highlights the state’s commitment to grow this market.

If you want to know what California’s leaders envision for the state’s future transportation mix, just follow the money.

The California Public Utilities Commission has authorized the state’s investor-owned utilities to spend more than $1bn in ratepayer funds on infrastructure to meet the state’s transportation electrification goals.

The utilities also offer vehicle rebates using revenues collected from selling credits into the California Air Resources Board's (ARB) Low-Carbon Fuel Standard (LCFS) program.

The California Energy Commission has funneled millions of dollars to support electric vehicle charging. Most recently, the agency approved spending $70mn to replace 211 diesel school buses throughout the state with electric models.

And on 1 November, ARB announced that a program to advance clean trucks and buses was oversubscribed a week after the board adopted its annual funding plan for clean transportation investments. The ARB received voucher requests for the entire $142mn budget.

With a finite amount of money to hit the state’s climate goals, one group receiving a large tranche of money means another is not. In this case, biofuel producers argue that they are getting the short end of the stick.

They argue the state is directing a disproportionate amount to electric vehicles, to the detriment of fuels like biodiesel, renewable diesel, and renewable natural gas that are ready alternatives to gasoline and petroleum diesel, particularly in the medium- and heavy-duty sectors.

For the state’s climate programs this could mean an uptick in LCFS credits generated from electricity, while renewable fuel producers may have to fight a bit harder for market share in the years to come for storage and blending infrastructure.

“[Biofuels] are carrying the load with LCFS credit generation,” chair of the California Advanced Biofuels Alliance and chief operating officer of SeQuential and Crimson Renewable Energy Tyson Keever said in September. “But ZEVs (zero emission vehicles) are getting all the attention and the lion's share of the funding. While there is great market share with ZEVs, we are doing the heavy lifting now, and we could use help to meet the goals.”

State officials note that transportation accounts for 40pc of California’s greenhouse gas (GHG) emissions. And that share has grown in recent years. State leaders have made no bones about the fact that fixing this has to be a top priority for the state.

“We want zero emissions everywhere, except if it is impossible, and then we will go for near zero,” ARB chair Mary Nichols has said.

If you follow the adage, as California goes, so goes the nation, then we could see an uptick in electric vehicles outside of the state. Although California by far leads the US in electric vehicle sales with 655,000 vehicles sold, or nearly half the US total, according to Veloz, we have seen movement in other states.

Colorado officials are hoping to make a significant dent in GHG emissions from the state's transportation sector by adopting a ZEV mandate.

Exactly what percentage ZEVs will be of total vehicle sales in California and other states remains to be seen. But if the amount of money being funneled to the technology is any indication of its future growth, then that total could be much larger than gasoline, diesel and biofuels producers want to see.