Policy 360 Rewind: How 2021 Sets the Stage for ZEV Policy in 2022

December 21, 2021

2021 was a pivotal year for clean transportation policy in many states throughout the nation. Through GNA’s Policy 360 program, we have observed that multiple states have adopted policies to require the sales or purchase of passenger and commercial zero-emission vehicles (ZEVs). California, which is typically seen as a leader at the state level, passed several bills to advance zero emission and alternative fuel technologies.

Historically, California has relied on various mechanisms to create some of the most groundbreaking, innovative regulations in the country. Policy 360 gurus have seen many of these initiatives continue throughout 2021, including ZEV sales and purchase mandates; increased incentives such as grants, rebates, and loans for the acquisition of electric vehicles and charging infrastructure; and the introduction of pilot programs and other studies to understand the impacts of zero emissions fees and taxes, vehicle production, and freight corridors. These, most notably the Advanced Clean Fleets (ACF) rule, will likely set the precedent for what to expect in California and other states in 2022.

The Advanced Clean Fleets (ACF) rule will likely set the precedent for what to expect in California and other states in 2022.

California has relied on incentives to encourage ZEV adoption for several years, and 2021 was no exception. There was a significant focus throughout the year on public sector funding for fleet electrification. Assembly Bill (AB) 148 will provide grants to local transportation agencies to switch from diesel operated vehicles to electric fueled vehicles and infrastructure. AB 33 will provide grants and loans to local bodies of government to expand energy utilization for electric vehicle charging and other infrastructure energy use related to buildings and storage. Senate Bill (SB) 372 focuses on the private sector and establishes a loan and financing program for firms that transport goods across the country to purchase electric trucks and charging infrastructure to replace current diesel fleets. We intend to see the details and implementation of each of these incentives throughout the coming year.

While the transition to ZEV provides many health and environmental benefits, stakeholders have expressed concern about the need to replace excise tax revenue not collected from ZEVs. Legislators in California and across the country have been contemplating the best method for ensuring electric vehicle drivers pay their fair share of road taxes. California’s SB 339 will implement a pilot program beginning in 2023 where participants who drive electric vehicles will be charged a mileage-based fee that is comparable to the state fuel tax. The goal of the program will be to evaluate costs and implementation of the fee and compare the effectiveness of the fee with the fuel tax.

While the transition to ZEV provides many health and environmental benefits, stakeholders have expressed concern about the need to replace excise tax revenue not collected from ZEVs.

Two other bills — SB 643 and 671 — establish studies on fuel cell electric vehicle production and zero-emission freight corridors, respectively. California is a leader in battery-electric vehicle (BEV) adoption, but as the fuel cell market begins to gain traction, the state needs to assess the fueling infrastructure and fuel production needed to compliment BEVs in the transition to zero-emission fleets. Senate Bill 643 will require the Energy Commission to complete the assessment by the end of 2023 and to update it once every three years until 2030. Further, SB 671 will implement the Clean Freight Corridor Efficiency Assessment to identify priority freight corridors throughout the state for the deployment of zero-emission medium- and heavy-duty vehicles and infrastructure. This assessment will also be completed by the end of 2023.

In addition to these policies, the California Air Resources Board introduced the draft language of the ACF rule and expects adoption of some version of the rule in 2022. As it stands, the rule would set a goal of achieving zero-emission truck and bus fleets in California by 2045 by zero-emission requiring purchase mandates for high-priority fleets.

These initiatives monitored by Policy 360 are expected to advance clean transportation efforts in California and will also provide a template for other state’s regulatory policy. California’s Advanced Clean Trucks rule has already been adopted by three states — New Jersey, Oregon, and Washington — with other states, including New York and Massachusetts, proposing adoption as well. Policies enacted in 2021 and those to come in 2022 will likely be no exception, with a greater focus on clean transportation in the year to come.

These initiatives monitored by Policy 360 are expected to advance clean transportation efforts in California and will also provide a template for other state’s regulatory policy.

By keeping pace with the policy updates in California and across the country, Policy 360 will be the first to know of any new policy changes, but also how these will affect business markets and the regulatory compliance requirements. 

Policy 360 is the evolution of the involvement and support GNA has had over the past 28 years in supporting the clean transportation industry.  Our work helps our 300+ clients—fleet, OEM, technology providers, and other stakeholders— effectively navigate the ever-changing landscape of advanced clean transportation.  To learn more, contact Cliff Gladstein, founding president of GNA.