Meeting Hydrogen Infrastructure Needs
PROBLEM
In order to meet long-term air quality, climate change and energy independence goals, nearly all vehicles on the road will need to be zero emission vehicles (ZEVs) by 2050. Currently, there are two cost effective and technologically feasible ZEV options: battery electric vehicles (BEV) and hydrogen fuel cell electric vehicles (FCEVs). The two technologies are complementary: BEVs provide better value to drivers for trips under 100 miles and for smaller vehicles. Fuel cell vehicles provide better customer value for trips over 100 miles and in larger vehicle applications. Both vehicle types are necessary to meet the transportation needs of Californians.
Expected start of retail FCEV salesToyota / 2015
Honda / 2015
Hyundai / 2015
GM / 2015 or 2016
Nissan / 2017
Ford / 2017
Daimler / 2017
Several automakers are planning to introduce FCEVs in commercial volumes beginning in 2015, and there is a narrow window of opportunity to ensure that adequate fueling infrastructure will be available. Without infrastructure, consumers will not have confidence that they will be able to refuel their vehicles, and auto manufacturers will thus delay the launch of FCEVs in California until such infrastructure is available. Unlike BEVs where charging infrastructure can be placed at home, FCEVs require centralized fueling stations similar to gasoline vehicles. The Clean Fuels Outlet regulation was adopted by the Air Resources Board (ARB) to ensure that a sufficient number of hydrogen stations would be available as the population of FCEVs reached a critical mass. The regulation, however, was not designed to create the initial fueling network needed to support the commercial launch of FCEVs and the creation of a self-sustaining hydrogen fueling network. Furthermore, the requirement to provide hydrogen fueling stations was staunchly opposed by some stakeholders, and ARB has been working with stakeholders to develop an alternative means to achieving the same goals.
THE BILLS
AB 8 and SB 11 reauthorize various motor vehicle, tire, and equipment fees, that support the Carl Moyer incentive program to clean up diesel engines, local air district programs that complement the Carl Moyer program, and the AB 118 program until January 1, 2024. These bills also dedicate funding to establish hydrogen fueling infrastructure to support the commercial launch of FCEVs, coupled with regulatory relief from ARB’s Clean Fuels Outlet regulation.
Specifically, the bills:
· In lieu of regulatory action, the bills provide $20 million from the Alternative and Renewable Fuels and Vehicle Technology Fund for three years, from July 1, 2013 to June 30, 2016, and then up to $20 million annually thereafter until at least 100 hydrogen fueling stations are in place.
· Require CEC and ARB, on or before December 31, 2015 and annually thereafter, to jointly review and report on progress toward establishing a hydrogen fueling network that provides the coverage and capacity necessary to support the deployment of FCEVs. These provisions in the bills ensure that CEC matches investments in hydrogen fueling station to actual needs following the initial commercial launch of hydrogen fuel cell vehicles in California.
· Establish a cap on funding for hydrogen fueling stations at $20 million per year or 20 percent of CEC’s annual appropriation of funds from the Alternative and Renewable Fuels and Vehicle Technology Fund, whichever is lower, in order to ensure a balanced portfolio of investments in advanced fuel and vehicle technologies.
The dedication of funding for 100 hydrogen stations in lieu of requiring the development of such stations administratively through the Clean Fuels Outlet regulation provides a stronger, more certain path to achieving the State’s air quality and climate change goals for the following reasons:
· Guaranteeing funding for infrastructure upfront will support the initial commercial launch of vehicles that will commence beginning in 2015. The regulation, by contrast, would have only provided for stations after a significant volume of vehicles were on the road (20,000 statewide or 10,000 in an air basin).
· Dedicating funding in statute, rather than through CEC’s annual investment plan process, provides the certainty the auto manufacturers need that the infrastructure will be in place to support vehicle deployment.
· Expected litigation over the regulation could delay implementation, potentially resulting in insufficient infrastructure being available and undercutting the certainty the auto manufacturers need.
BACKGROUND
The widespread adoption of FCEVs is critical to meeting California’s clean air and climate change goals. Approximately 40 percent of climate change emissions and 70 percent of smog-forming emissions in California come from mobile sources. When comparing the well-to-wheels (WTW) emissions associated with the production, transport and combustion of vehicle fuel, FCEVs and BEVs have considerably lower emissions. By 2025, FCEVs will have 75 to 85 percent fewer greenhouse gas emissions than gasoline vehicles and greater than 50 percent fewer smog-forming emissions than gasoline vehicles.
Hydrogen is one of a series of investments in a variety of alternative fuels and vehicles by the CEC and ARB, including biofuels, compressed natural gas, and electricity. The funding dedicated to hydrogen in these bills represents a very small portion of the total funding being reauthorized, and is part of a portfolio of vehicle and fuel strategies necessary to support the transition to lower carbon intensity and zero-emission technologies. While the State has invested in hydrogen fueling infrastructure, investment has not kept pace with that for other zero and near-zero technologies. These bills help to provide certainty to the auto manufacturers that the fueling infrastructure will be available and provide greater parity between investments in hydrogen with other clean vehicle technologies.