Designing a Medium and Heavy-Duty Zero-Emission Vehicle and Infrastructure Incentive Program for Washington State

In the past few years, Washington state has assumed a leadership position in the national conversation on clean energy stewardship. Developments advanced by the Washington State Legislature to promote cleaner and more sustainable transportation solutions are underway with the 2023 - 25 Transportation Budget that is directing the Joint Transportation Committee (JTC) to oversee the design and implementation of an incentive program for medium and heavy-duty zero emission vehicles (MHD ZEVs).

The JTC has partnered with zero-emission vehicle accelerator CALSTART, its project team S Curve Strategies, and the PNWER Regional Infrastructure Accelerator to exercise the study.

About the JTC Design Study

The Joint Transportation Committee (JTC) was directed to oversee a project to design and document an infrastructure and incentive strategy to drive the purchase and use of zero emission medium and heavy-duty (MHD) vehicles, as well as cargo handling and off-road equipment, in the state including, but not limited to, programs for tractor trucks, box trucks, drayage trucks, refuse trucks, step and panel vans, MHD buses, school buses, on and off-road terminal tractors, transport refrigeration units, forklifts, container handling equipment, airport cargo loaders, and railcar movers.

In the 2023-25 transportation budget, the following allocations from the Carbon Emissions Reduction Act (CERA) are held in unallocated status until the completion of this project:

• $100 million for “implementation of zero-emission commercial vehicle infrastructure and incentive programs and for the replacement of school buses powered by fossil fuels with zero-emission school buses, including the purchase and installation of zero-emission school bus refueling infrastructure.” (Sec. 215 (7)(b))

• $3 million for hydrogen refueling infrastructure investments (Sec. 215 (8)).

• $2.5 million for zero emission cargo handling equipment incentives (Sec. 215 (10)).

• $5 million for clean off-road equipment incentives (Sec. 215 (11)).

In addition, the consultant will conduct a review of the clean alternative fuel passenger vehicle tax incentive in current Washington state law and evaluate its utility, to include possible modification of the criteria for eligibility and tax incentive amount maximums.

The final report draft was presented to the JTC January 4, 2024. The recording is available for viewing here.

The final incentive design strategy is available for viewing here.

Background

Transportation is the largest contributor of greenhouse gas emissions in Washington state. Medium and heavy-duty vehicles (MHD), including buses, big trucks and delivery vans make up approximately 10 percent of the vehicles on Washington’s roads but are responsible for 30 percent of the state’s on-road GHG emissions, and even higher percentages of fine particulates and nitrogen oxides. These tailpipe pollutants disproportionately contribute to reduced air quality in low-income and overburdened communities.

Battery electric and hydrogen powered trucks and buses – collectively called zero emission vehicles (ZEVs) – reduce carbon emissions and eliminate toxic tailpipe pollutants compared with their conventional counterparts.

Legislative Action

In March 2020, the state legislature passed the Motor Vehicle Emission Standards - Zero-Emission Vehicles law (RCW 70A.30.010). This law directs the Department of Ecology to adopt California’s stringent vehicle emission standards, gradually increasing the number of new ZEVs sold in Washington until all new vehicles meet the ZEV standard starting in 2035

A significant milestone was seen in April 2023 as the Environmental Protection Agency granted a waiver allowing Washington and like-minded states to transition MHD ZEVs from diesel to zero-emissions technology. This waiver paves the way for the Clean Trucks program, which compels manufacturers to sell and register a growing percentage of new, zero-emission alternatives, beginning with the 2025 model year.

In July 2020, Washington Governor Jay Inslee, alongside 15 other states, Washington D.C., and Quebec, signed a Multi-State Zero Emission Medium- and Heavy-Duty Vehicle Memorandum of Understanding (MOU). This MOU called for the development of a multi-state MHD ZEV Action Plan which was published in July of 2022. The action plan includes more than 65 strategies and recommendations for policymakers to accelerate electric truck and bus adoption, including recommendations for incentives for MHD ZEV purchases and infrastructure.

The Washington State Legislature passed the Climate Commitment Act (CCA) in 2021, establishing a comprehensive program to cut carbon pollution and meet GHG limits set by state law. This market-based initiative caps carbon emissions and mandates businesses to obtain allowances equal to their covered GHG emissions. The generated revenues are reinvested into climate projects, including those aimed at reducing transportation-sector emissions.

The CCA aligns with the requirements of the Healthy Environment for All (HEAL) Act and includes provisions to ensure communities in Washington that are disproportionately impacted by climate change and air pollution benefit from cleaner air. In addition to the GHG reductions that will result from the cap-and-invest program, the CCA also calls for reduction of "criteria" air pollutants, such as ozone and particulate matter, in overburdened communities highly impacted by air pollution.

Last year the Legislature established a new Interagency Electric Vehicle Coordinating Council (EV Council) to facilitate better collaboration amongst state agencies on efforts to accelerate electric vehicle adoption and reduce transportation-sector greenhouse gas emissions. The EV Council is currently engaged in the development of a statewide transportation electrification strategy with a goal of finalizing the strategy by the end of 2023. The council is also charged with identifying and coordinating state and federal electric vehicle related funding criteria.