Program Activities
2009 – 2010

Program Overview
EIN works closely with the California Air Resources Board (CARB), the California Energy Commission (CEC), State Legislative offices, the Clean Cars Environmental Coalition and industry to ensure effective implementation of the key regulations and funding programs that address climate change by reducing greenhouse gas emissions from our transportation sector. EIN leverages the experience it has gained on technology-specific regulations (biodiesel, hydrogen, electric vehicles) to provide direct input on the design and language of these new regulations, as well as work through the Environmental Coalition to ensure key practical topics are kept high on the group’s agenda.

The following is a selection of some key areas of focus:

Low Carbon Fuel Standard (LCFS)

EIN provided regular input in the development of the LCFS, which was adopted in April 2009. There are still a number of unresolved issues which EIN continues to engage the Air resources board, in the finalization and implementation of the regulations, including:

• Market Design. EIN has urged CARB to establish a formal trading platform for LCFS credits, rather than take a ‘hands-off’ approach. The intent is to ensure that there is sufficient price transparency and liquidity to provide alternative fuel producers with a reliable platform to monetize their LCFS credits.
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• Ultra-low carbon fuels. EIN continues to voice its concern that the LCFS provides an insufficient incentive for the development of ultra-low carbon, non-liquid biofuels, given the disproportionate infrastructure and regulatory barriers these fuels face. If the development of ultra-low carbon fuels is not adequately incentivized by the LCFS, EIN will press CARB to develop a parallel initiative, using the Clean Fuels Outlet or some other new mechanism to ensure fuel diversification.
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• Regulatory Barriers. Continued pressure is needed for ARB to work with California Public Utilities Commission on aligning the electricity and transport regulations. In particular, CARB’s desire to incentivize third party electric charging infrastructure must be balanced with the need to ensure incentives for off-peak charging.
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• Sustainability. The environmental coalition has significant work ahead in helping the ARB draft some sustainability guidelines for alternative fuels. EIN will continue to play a moderating role in this process, ensuring that a pragmatic solution that is good for the environment and not insurmountable for industry is ultimately proposed.

AB 32 Global Warming Solutions Act Implementation

In the coming year, EIN will continue to identify the key areas where AB 32-related developments specifically impact the transportation sector, and vice versa. We expect this will include:

• Further work on AB32’s rules for acceptance of allowance offsets from transportation sector actions. A balance must be found between ensuring the small LCFS market has guaranteed buyers for its credits, while not diluting the effectiveness of the AB32 cap.
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• EIN will also work with the CPUC on better alignment between its regulations and the objectives of the transportation sector, including how to continue to incentivize greater efficiency to achieve AB32 goals, and simultaneously incentivize growth of electricity, hydrogen and natural gas investments to reduce GHG emissions from the transport sector.

Zero Emission Vehicle (ZEV), Low Emissions Vehicle (LEV) and AB 1493 (Pavley I and II) Programs

• CARB is overhauling the ZEV program, updating the LEV Program, revising Pavley I and setting the stage for Pavley II (tailpipe greenhouse gas emission standards). EIN is working independently and within the context of the environmental coalition and fuel/vehicle technology-specific organizations to insure that these revisions successfully push technology to move California aggressively toward our 2020 and 2050 emissions goals and improve California air quality.
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• Along these lines, EIN will also work with CARB staff as it develops a proposal for the Board to create an infrastructure requirement for fuel providers, preferably through the existing authority of the Clean Fuels Outlet program, to ensure both hydrogen and electric fast charging infrastructure are available as ZEVs are deployed under the program. This is especially critical given the fact that the LCFS as currently designed will have little to no effect on spurring availability of these ultra low carbon fuels.

AB 118 Implementation

• With the adoption of the AB 118 Alternative Fuels Investment Plan, the Energy Commission is under tremendous pressure to award the first year and a half’s funds, while it simultaneously develops the second Investment Plan.
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• EIN will closely monitor and support allocation of the existing $40 million for hydrogen fueling infrastructure development. EIN advocated strongly for securing a significant allocation to hydrogen infrastructure, and for an interagency agreement with CARB for spending of the $40 million, given their existing Hydrogen Highway program and their expertise in the field. EIN will continue to work closely with CARB and CEC staff as well as with industry stakeholders to develop an effective strategy for hydrogen infrastructure deployment and will work to help identify and assemble qualified teams to bid on these funds.
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• EIN sees a need to play a role closely monitoring the AB118 process, including the RFP’s that are released, awards that are made, and interim modifications to the funding allocations as allowed in the Plan’s flexibility provision. In addition, EIN will work with CEC staff and contractors to review and comment on the various sustainability protocols that will be evaluated as part of AB 118 implementation.

Threats and Modifications to SB 1505: Environmental Performance Standards for Hydrogen Fuel

• Together with the Union of Concerned Scientists, EIN worked to put in place environmental performance standards for hydrogen fuel that would ensure environmental benefits from the technology and avoid any potential backsliding on a variety of metrics including criteria pollutants, toxic air contaminants, and greenhouse gases. As the regulation is developed in the beginning of 2010, we will be working with CARB staff, industry and environmental stakeholders to defend the purpose of the regulation while accommodating legitimate needs to harmonize it with the LCFS.

Ongoing Policy Analysis, Education & Outreach

In advancing the above initiatives, EIN will continue to:

• Pursue policies that support all fuels and technology solutions that help address petroleum dependence, climate change, and air quality.
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• Advocate for sustainability metrics and protocols that anticipate and avoid unintended consequences and adverse impacts of the transition to alternative fuels.
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• Advocate for policies that create clear regulatory certainty, but do not stifle investment in alternative fuels or have a chilling effect on the transition away from petroleum.
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• Support policies that stimulate market development for in-state bio-energy production, including fuels and power from agricultural waste, municipal waste, and direct feedstock production.
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• Work to ensure that key policy makers are educated on the issues and opportunities related to advancement of alternative fuels and advanced vehicle technologies in California, and on the negative impacts of California’s growing dependence on petroleum-based fuels