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BC's new ZEV standard - modeled on California or Quebec?

Tom Hackney
Wednesday, February 27, 2019

19 February 2019

To:  Christina Ianniciello, Director, Clean Transportation Branch, Ministry of Energy, Mines and Petroleum Resources

by email: christina.ianniciello@gov.bc.ca Dear Ms. Ianniciello,

Re: BC Zero-Emission Vehicle Standard – Request for Input

Thank you for this opportunity to comment on the government’s proposed ZeroEmission Vehicle (ZEV) Standard.

The BC Sustainable Energy Association strongly supports the government’s proposal in the CleanBC plan to introduce an escalating ZEV standard:

“Just over 20 years from now, all new light-duty cars and trucks sold in British Columbia will run on clean electricity from batteries or hydrogen fuel cells. Between now and then many of us will be driving plug-in electric hybrids with internal combustion engines as a back-up to ensure we can get where we’re going in remote areas. By 2030 or earlier, we expect the price of ZEVs to be about the same as for conventional vehicles – and we can drive the price even lower by drawing more supply to our province.  By 2020, we will put in place a ZEV standard to make sure British Columbians have access to the numbers and types of zero-emission vehicles they want. The standard will require automakers to meet an escalating annual percentage of new light-duty ZEV sales, reaching: 

• 10 per cent in 2025

• 30 per cent in 2030 and

• 100 per cent by 2040.” [CleanBC, page 17]

Reducing vehicle greenhouse gas (GHG) emissions will necessarily be a critical part of any effective plan to reduce BC’s GHG emissions in accord with BC’s legislated targets and international norms arising from the 2015 Paris Agreement.

BCSEA understands that the government intends to develop ZEV regulations and is considering using California’s and/or Québec’s regulations as a model. The following are BCSEA’s comments on the ZEV regimes of those two jurisdictions and their potential application to BC.i

Alignment with other jurisdictions – benefits and disadvantages

The California and Québec ZEV standards are very similar and appear to have been intentionally aligned. This may be a consideration for BC, if it wishes to cooperate with other jurisdictions in fostering the manufacture and sale of ZEVs in the North American market.
   
In particular, alignment of legislation and regulations may be a consideration for the numbers of ZEVs that will be manufactured for the North American market and the extent to which BC wishes to cooperate with (or out-compete) other jurisdictions in moving its vehicle fleet to ZEVs.

California and Québec have both set targets for ZEV sales figures (as adjusted by the ZEV credit system) to make up 22% of total sales by 2025. BC’s CleanBC commitment is for ZEV sales to be 10% of the total by 2025, 30% by 2030 and 100% by 2040. Since BC has one of the higher rates of EV use in Canada, it’s not clear why it should adopt a less ambitious 2025 target than California and Québec. (And these jurisdictions may be considering increased ZEV targets for future years.)

Another issue on which alignment and cooperation between jurisdictions may be a consideration is the trading of ZEV compliance credits. California and Québec both allow wide trading of ZEV compliance credits between manufacturers and between jurisdictions (presumably those with comparable ZEV standards). The benefits of such trading are not clear from the materials BCSEA reviewed. BC may wish to consider what those advantages may be, as well as some possible disadvantages, which might include, for example:

• Credit trading could give rise to “niche” jurisdictions where few ZEVs are sold and other “niches” where many are sold. This could work against the development of a sense across North America that everyone should be acting to address climate change.

• Credit trading could give rise to “laggard” manufacturers that continue to specialize in fossil fuel powered vehicles. This effect would be made worse by the exclusion of “small volume” manufacturers from regulation by California and Québec. This seems to exempt the manufacturers of highend luxury vehicles and high-end “muscle cars” – i.e. manufacturers whose business models and corporate cultures are largely contrary to the ethos of addressing climate change. Allowing this would likely be bad for the “optics” of the ZEV standard. It may be preferable to confront these manufacturers with the need to change, rather than exempting them.

ZEV compliance credit system

The ZEV compliance credit rules are complex and arbitrary and will, to the layperson, be difficult to understand. If the government wishes to communicate with regular people and gain their support and trust, it might want to simplify the system.

On the other hand, a benefit of the credit system is that the regulator can assign more credits to more desirable vehicles and make fine adjustments to the level of credit – i.e. signalling precisely to the manufacturers what vehicles are preferred.

In particular, the credit system can give partial credit for plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles with fossil fuel powered range
extenders (BEVx). To the extent that BC sees these vehicles as beneficial transitional types, it can encourage them modestly in earlier years, and reduce the credit later on in favour of fully electrified vehicles.

It’s not clear to how much flexibility BC would have to design its own credit system and also be well aligned with the California and Québec systems. While BC needs a regime that reflects its own market conditions, there are also benefits to aligning with other jurisdictions and taking a coordinated approach with vehicle manufactures.

Higher credit for longer BEV range

The California and Québec systems assign higher credits to EVs with longer driving ranges and lower credits for EVs with shorter ranges. The reason for this is not clear, but it would have various effects on the types of vehicles produced, their cost and who can afford them. BC may wish to consider whether this supports its CleanBC objectives or not.

Also, the California system assigns a low credit to “Neighbourhood EVs” or NEVs (i.e. EVs with a maximum speed of 40 km/hr and other limitations that make them unsuitable for highway travel). Apparently California sees little potential for NEVs to support less use of regular fossil fuel powered vehicles. But a key concept for energy sustainability and GHG reductions is that of the “walkable community” – where people have little need to travel long distances at high speeds because employment, shopping, recreation and services are located close to where they live. If BC adopts a walkable community approach to its planning, NEVs may have a strong role to play in replacing conventional motor vehicles; and they may therefore warrant high ZEV compliance credits.

Compliance and penalties

A big potential disadvantage of a complex ZEV credit system is its high potential for contention with manufacturers over whether they have complied or not, whether they should be granted leeway for non-compliance, and finally to what extent, if at all, they should suffer penalties for non-compliance. The California and Québec systems seem to have large potential for such contention. 

The ideal for BC’s ZEV standard is that all manufacturers supplying vehicles to the BC market would be persuaded to meet the standard and that any failure of compliance would be clear and simple and easily adjudicated.

Hydrogen powered vehicles

While BCSEA appreciates the theoretical potential for hydrogen vehicle technology to help reduce transportation GHG emissions, we are also aware that hydrogen technology is currently some distance from being a practical transportation solution. In contrast, BEV technology is already a viable solution. Hydrogen vehicles may warrant a modest amount of ZEV credits, so long as that does not in any way impede the speedy development of the BEV market in BC.

BCSEA hopes these comments are helpful. Please don’t hesitate to contact BCSEA if you have further questions or wish clarification of any of these points.

Regards, 

 Tom Hackney, Policy Advisor  


                                                
 i Documents reviewed:

California’s ZEV Regulation for 2018 and Subsequent Model Year Vehicles, slide show from a webcast, California EPA, Air Resources Board, 2016. https://www.arb.ca.gov/msprog/zevprog/factsheets/zev_regulation_factshee...

Zero Emission Vehicle (ZEV) Program, website page, California Air Resource Board, last updated October 24, 2018. https://www.arb.ca.gov/msprog/zevprog/zevprog.htm

Zero-Emission Vehicle Standards for 2018 and Subsequent Model Year Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, regulation. https://www.arb.ca.gov/msprog/zevprog/zevregs/1962.2_Clean.pdf 

Québec Leads the Way with its ZEV Standard, explanatory 2-pager, Government of Québec. http://www.environnement.gouv.qc.ca/changementsclimatiques/vze/feuillet-...

Act to Increase the Number of Zero-Emission Motor Vehicles in Québec in Order to Reduce Greenhouse Gas and Other Pollutant Emissions, Government of Québec. http://legisquebec.gouv.qc.ca/en/showdoc/cs/A-33.02

Regulation respecting the application of the Act to increase the number of zero-emission motor vehicles in Québec in order to reduce greenhouse gas and other pollutant emissions, Government of Québec. http://legisquebec.gouv.qc.ca/en/ShowDoc/cr/A33.02, r. 1/

Regulation respecting the limit on the number of credits that may be used by a motor vehicle manufacturer and the confidentiality of some information, Government of Québec.  http://legisquebec.gouv.qc.ca/en/ShowDoc/cr/A-33.02, r. 2/