Introduction
The transportation sector remains the largest domestic source of greenhouse gas emissions, but despite the many regulatory tools available to reduce vehicle pollution, and the prevalence of electric vehicles, along with federal and state incentives to electrify, transportation emissions continue to rise. Pollution from the transportation sector is also a leading source of nitrogen oxides (NOx) and contributes significantly to particulate matter exposure, which impacts the health of millions of Americans every year. Vehicle pollution disproportionately harms low-income, Black and Brown communities , that have historically been housed closer to high traffic areas and ports. Coordinated federal, state, and local action is needed to rapidly reduce transportation emissions over the next decade, and that work must begin now with strong regulations, targeted investments, and holistic planning efforts that will protect vulnerable populations and the planet.
The next administration will have an outsized impact on whether the U.S. achieves federal, state, and international climate agreements by 2030. Evergreen has already offered ideas on key heavy-duty vehicle actions, but there is more to do across the sector as a whole given that it is the largest source of national emissions, and emissions are still growing. Federal rules, investments, and commitments to move faster from industry that could be secured by this administration will determine whether those climate commitments are achieved.
The key is to approach the transportation system as a system and work to align rules, investments, and commitments to address both new and existing vehicles. The future does not just lie with improvements to vehicle efficiency but with an improved transportation system as a whole that is less reliant on single-vehicle transportation. We need to conceptualize a system in which cars and trucks are zero-emissions and made with strong union labor—but also a system in which cars and SUVs are less essential because we have vibrant, strong, cities, and towns with abundant and affordable housing, working transit, and walkable and bikeable streets, paths, and trails. Similarly, for heavy-duty vehicles, we need to think about freight as a system, from trucks and trains to warehouses and ports, and work to decarbonize the system as a whole. Right now, our system too often poisons and destabilizes our air and isolates and threatens our communities. But we are on the cusp of change; because transportation fundamentally shapes our lives, by improving the system, we can have both cleaner air and better experiences for our friends, families, and children in our communities.
But we need to build a foundation now. With many federal regulations and investments leading up to, and carrying through, the next presidential cycle, it is critical for this administration to secure strong vehicle rules and align investments in a manner that will swiftly decarbonize the transportation sector, while re-focusing state Departments of Transportation (DOT) away from wasteful and futile highway expansions and spending, and back on providing zero-emission and multi-option transportation options, from buses to trains to walking and cycling, in partnership with housing authorities that can help build homes and businesses in ways that support the system change.
By aggressively addressing vehicle emissions in this system-focused way, this administration has the opportunity to improve public health outcomes, stabilize energy reliability with battery storage networks, modernize transportation systems and expand mobility access, reforming how transportation is funded and governed at the state level, and provide market security for manufacturers, organized workers and supply chains. In order to attain these transformative outcomes, this administration must work alongside states and municipalities to collectively accomplish these six outcomes:
- Finalize ambitious federal regulations for light and heavy-duty vehicles
- Approve California vehicle waivers to pave the way for state electrification
- Expand the adoption of section 177 waivers with federal funding and technical assistance
- Engage state Department of Transportation to refocus on holistic transportation systems
- Diversify transportation funding and mobility options to avoid the gas tax cliff
- Design federal programs to support states in achieving emissions reductions from federal rules
I. Finalize Ambitious Federal Regulations for Light and Heavy-Duty Vehicles
Strengthening Federal Regulations
This administration has several federal tools available to significantly reduce emissions from on road vehicles that will improve air quality and public health.The U.S. Environmental Protection Agency (EPA) has the authority to regulate a variety of vehicle emissions including smog, soot and greenhouse gases produced from light, medium and heavy-duty vehicles. These regulations control the amount of pollution that can be produced by the vehicle fleet made each year in the model years covered by finalized rules. EPA’s most recent proposal to regulate light- and medium-duty vehicles is through the multi-pollutant emissions standards, which would apply beginning in model year 2027. EPA has also proposed to regulate emissions from heavy-duty vocational vehicles and tractors with the greenhouse gas emission standards for heavy-duty vehicles which would take effect in 2027. The U.S. Department of Transportation (DOT) through the National Highway Traffic Safety Administration (NHTSA) regulates the fuel efficiency of vehicles through the Corporate Average Fuel Economy (CAFE) standards, which set a standard for how far a vehicle can travel on a gallon of gasoline. NHTSA had proposed to update the CAFE standards to achieve greater fuel economy for passenger cars and light trucks beginning in 2027 through 2032, and heavy-duty pick-up trucks and vans beginning in 2030 through 2035. DOT, through the Federal Highway Administration (FHWA), can also establish state DOTs and metropolitan planning organizations, and has proposed to set declining carbon dioxide targets for emissions on federal highways through the Greenhouse Gas Emissions Measure, which requires measuring and reporting of greenhouse gas emissions.
If these rules are strong enough, they could dramatically curb emissions from the most heavily polluting sector and put the nation on a path to becoming a leader in clean vehicle deployment. Each of the rules mentioned above drives down emissions for future model years and beyond this administration. The EPA rules and CAFE standards begin to take effect for vehicles produced in 2027 and extend beyond 2030, while the FHWA rule sets annually declining targets that may stretch well into the future. The strength of these finalized regulations will determine whether the nation as a whole and individual states meet their climate targets, which is why it is incumbent on this administration to ensure that each of the rules is as strong as possible based on current technology, existing investments, and public health necessity. As vehicle emissions continue to rise and disproportionately harm Black, Brown, and low-income communities, strong vehicle regulations to sharply reduce emissions is one of the administration’s greatest tools to protect the health of frontline communities.
Federal Investments Make Way for Stronger Standards
Each of these rules gives manufacturers the flexibility to determine how they meet the fleet-wide standard each year, and federal investments can promote equitable and aggressive choices by manufacturers as they determine compliance pathways. For example, automakers can produce smaller, lighter vehicles, or increase production of hybrid and fully electric vehicles rather than producing large gas-guzzling models. Electric vehicles are clearly the most efficient way to meet these increasingly stringent emissions standards, as they eliminate tailpipe pollution. While some automakers push back at the feasibility of increasing production of light and heavy-duty electric vehicles, consumers continue to demand electric vehicles, with purchases of new electric vehicle sales nearly doubling from 2020 to 2021. This spike in demand for electric vehicles is only expected to grow in coming years, particularly as federal incentives such as consumer tax credits from the Inflation Reduction Act (IRA) cover a wide range of electric vehicle models. Beginning in 2024 electric vehicle tax credits will be even more accessible for consumers to get the full value of the credit, regardless of federal tax liability, with a point of sale discount at the dealer. The broadening accessibility of electric vehicles makes the need for consistent and equitable public charging even more apparent, which states and the federal government can prioritize through thoughtful planning in the deployment of charging stations through the National Electric Vehicle (NEVI) Infrastructure program, by replicating best practices from leading states.
Federal investments and incentives from the IRA and the Infrastructure Investment and Jobs Act (IIJA) pour billions of dollars into efforts to electrify vehicles and deploy charging stations for public and private entities, as well as individuals. There are tax credits for consumers looking to buy electric vehicles, and tax credits available to public entities and nonprofits for fleet transition of light- and medium -duty vehicles. There are also programs geared toward electrification of heavy-duty vehicles like EPA’s Clean Heavy Duty Vehicle program, Clean Ports program, Clean School Bus program, and the Diesel Emissions Reduction Act (DERA) grants for states. As federal funds support the transition to electric vehicles of all sizes, it is crucial that these programs also support good jobs as workers transition away from manufacturing and maintaining internal combustion engines. Some initiatives, such as the Clean Heavy-Duty Vehicle program, even fund workforce development and training as part of the program.
The investments available to transition to electrification can and must support workers and unions, by enabling family-sustaining salaries, good working conditions, and strong benefits. Good jobs should be available to those that manufacture cleaner vehicles, as well as those that build out and maintain the growing charging network to power electric vehicles.
Both IRA and IIJA provide funds for developing public charging stations, such as through the NEVI program, the Charging and Fuel Infrastructure Grants, and the Clean Heavy-Duty Vehicles program. And there are broader opportunities to transition sectors such as through the state Climate Pollution Reduction Grants program that allows broad focus on emissions reduction initiatives, and the Greenhouse Gas Reduction Fund opportunities. States and public entities can also lead in the transition by borrowing federal funds to help reduce vehicle pollution such as through the Department of Energy Loan Program Office. With this wide array of funding, in addition to state resources and incentives, achieving stringent vehicle standards through electrification is imminently achievable, and increasingly affordable. With electrification within reach, EPA must finalize the most ambitious pollution standards possible to maximally protect the health of all communities.
Work to Solidify Manufacturer Commitments to Change
There is no substitute for ambitious federal regulations. But there is certainly room to ensure that companies are ready to comply and committed. In the wake of California’s deal with major truck manufacturers to commit to 100 percent clean truck sales by 2036, and earlier deal with automakers to stay the course on carbon reductions despite Trump-era rollback efforts, it's clear that industry knows the future lies with zero-emission vehicles. But industry needs to be held to those commitments, and more need to be locked in. In addition to rulemaking efforts, the White House should work to insist that industry groups commit to the transition and its key elements—including worker and community protections—upfront. Supportive IRA funding to help build out infrastructure or ease transitions can be an important adjunct to these conversations, by helping to build the larger ecosystem for success even as core regulators set ambitious standards.
Pollution Regulations for Rail, Planes, Ships, and Off-Road Vehicles
EPA also has much to do to regulate locomotive emissions, which is an essential part of cleaning up mobile source pollution as trains in the U.S. predominantly run on diesel fuel. Unsurprisingly railyards, rail lines, and ports where trains operate disproportionately impact people of color and low-income communities with toxic diesel pollution. Despite the availability of zero-emissions locomotive technology, rail companies prefer to repair old, polluting locomotives, prolonging pollution and community harm. California is again leading in reducing rail emissions, with a proposed rule to cut locomotive emissions and protect communities. But in order to do so and allow other states to follow suit, EPA must get rid of an outdated rule that blocks states from regulating rail emissions. EPA included a proposal to allow states to regulate their own rail emissions in the 2023 proposed greenhouse gas emission standards for heavy-duty vehicles, but there is limited time. The rail industry is suing California to block its rule from going into effect this fall, and EPA must step in and clarify that states have the ability to regulate rail emissions in time for the rule to go into effect this autumn. EPA must prioritize finalizing the locomotive aspect of the rule now to allow California to move forward with strong standards, particularly because EPA itself has not updated federal locomotive regulations for pollution in over a decade – and an update of federal standards needs to be on the shortlist for the second Biden term.
In addition to finalizing strong light- and heavy-duty vehicle standards, and allowing states to regulate rail pollution, this administration must begin to work on a broader suite of rules that would finally cover the full scope of mobile source pollution. EPA has yet to set strong standards for off-road vehicles, planes, and ships which all produce significant soot, and smog, and greenhouse gas emissions. These nonroad vehicles ought to be regulated by EPA, considering the authority under the Clean Air Act. EPA must exercise the full scope of its Clean Air Act authority to protect public health by reducing pollution from all mobile sources. Impacted populations do not have idle time to continue to breathe in polluted air, and the climate crisis demands swift, holistic action to draw down pollution, even in sectors that pose greater challenges. EPA must begin to set itself up now to regulate these mobile emissions sources in the future by looking into initial endangerment findings if needed, issuing any necessary information collection requests, and meeting with industry players early on to identify pollution reduction solutions.
II. Approve California Vehicle Waivers to Pave the Way for State Electrification
California’s vehicle waivers, when approved by EPA, are some of the strongest tools that states and the federal government have to reduce pollution from vehicles. This is because California’s vehicle regulations are allowed to go beyond the stringency of EPA’s rules to drive down vehicle pollution even faster, and unlike EPA, California’s rules do not have to be technology-neutral. This means that through California’s vehicle regulations, electrification of light, medium, and heavy-duty vehicles can be mandated by a certain date. This allows a faster phase out of internal combustion engines, protecting greater numbers of residents, and provides clear market signals that manufacturers should produce more electric vehicles of all classes.
Impact of California Vehicle Waivers
California’s comprehensive vehicle emissions rules have a far-reaching impact because they are not limited to the borders of the Golden State. Any state can opt-in to adopt California’s vehicle regulations for light, medium- or heavy-duty vehicles. There are 17 states including Washington, D.C. that have adopted some portion of California's vehicle regulations, with growing interest from other states. With many states currently signed on to some form of California vehicle rules, over 20 percent of the heavy-duty market and 40 percent of the light-duty market will have to transition to electric vehicles over the next decade. Automakers that are already mandated to reduce fleet emissions and improve fuel efficiency through federal rules must now produce zero-emissions vehicles for these jurisdictions following the California vehicle rules. As California and other states adopt and implement these rules, electric vehicles of all classes will become more affordable nationwide.
The Administration Must Quickly Approve Remaining and Future Waivers and Authorizations
EPA must take advantage of the power to propel the electric vehicle market forward by swiftly and fully approving California vehicle waivers. So far, this administration has approved many
waivers and authorizations submitted by the California Air Resources Board (CARB), including the Advanced Clean Trucks (ACT) regulations. The ACT regulations will increase the number of medium- and heavy-duty zero-emissions vehicles on the road beginning in 2024 and extending through 2035. By 2035, 55 percent of light-duty truck sales (class 2b-3) must be zero-emission, 75 percent of medium-duty vehicles (class 4-8), and 40 percent of tractors. So far, seven states in addition to California have adopted the ACT rule, with six additional states in the process of adopting it. The ACT states currently cover five of the ten largest ports in North America, which will have significant health benefits for frontline communities while pushing the electric heavy-duty vehicle market forward.
EPA must also move forward with approval of the Low-NOx Omnibus rule, which will dramatically reduce the deadly NOx pollution from heavy-duty trucks in coming years. Beginning in 2024 the Omnibus rule requires a 75 percent reduction in NOx emissions from heavy duty vehicles, with a 90 percent reduction by 2027. This rule was adopted in California in 2021 and awaits a waiver from EPA that would allow other states to follow these strong standards. Heavy-duty vehicles are responsible for nearly a quarter of all vehicle pollution, although they only account for 10 percent of the vehicles on the road. Cutting NOx pollution rapidly will be transformational for the Black, Brown and low-income communities that are disproportionately exposed to vehicle pollution and as a result suffer higher rates of heart and lung disease along with other negative health outcomes. EPA must use its waiver authority to protect frontline communities from NOx pollution from heavy-duty vehicles without further delay.
In addition to quickly approving the Omnibus rule to allow other states to protect the public health of their residents, EPA must be prepared to quickly approve additional pending California vehicle waivers and finalize them before the end of President Biden’s first term. These vehicle regulations include the Advanced Clean Cars II (ACCII) rule and the Advanced Clean Fleets (ACF) regulation. The ACCII rule establishes that by 2035 all new passenger vehicles sold in California must be zero emissions by requiring 35 percent of new passenger vehicles sold to be electric by 2026 and increasing that market share annually until 100 percent of new passenger vehicle sales are electric in 2035. The ACF regulation ensures that only zero emissions medium and heavy-duty vehicles will be sold in the state beginning in 2036, and applies to fleets owned by state, local, and federal governments, high-priority fleets, and those that perform drayage operations. These rules chart the course towards the end of combustion in both light- and heavy-duty vehicles, consistent with industry trends and community needs. EPA needs to approve them, quickly.
