CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

AIR RESOURCES BOARD

STAFF REPORT: INITIAL STATEMENT OF REASONS

PROPOSED MODIFICATIONS TO THE EXHAUST EMISSION STANDARDS AND TEST

PROCEDURES - 1985 AND SUBSEQUENT MODEL YEAR HEAVY-DUTY URBAN BUS

ENGINES AND VEHICLES, THE FLEET RULE FOR TRANSIT AGENCIES, AND ZEROEMISSION BUS REQUIREMENTS

Date of Release: May 7, 2004

Scheduled for Consideration: June 24-25, 2004

This report has been reviewed by the staff of the California Air Resources Board and

approved for publication. Approval does not signify that the contents necessarily reflect the

views and policies of the Air Resources Board, nor does mention of trade names or

commercial products constitute endorsement or recommendation for use.
State of California

California Environmental Protection Agency

AIR RESOURCES BOARD

PROPOSED MODIFICATIONS TO THE EXHAUST EMISSION STANDARDS AND TEST

PROCEDURES - 1985 AND SUBSEQUENT MODEL YEAR HEAVY-DUTY URBAN BUS

ENGINES AND VEHICLES, THE FLEET RULE FOR TRANSIT AGENCIES, AND ZEROEMISSION BUS REQUIREMENTS

Staff Report

May 7, 2004
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TABLE OF CONTENTS

EXECUTIVE SUMMARY.......................................................................................................................1

I. INTRODUCTION............................................................................................................................3

II. BACKGROUND ..............................................................................................................................4

A. Applicability..................................................................................................................................4

B. Engine Exhaust Emission Standards for Urban Buses ........................................................5

C. Hybrid-Electric Bus Technology...............................................................................................7

1. California Interim Certification Procedures.........................................................................8

2. Hybrid-Electric Transit Bus Projects....................................................................................8

D. Fleet Rule for Transit Agencies................................................................................................9

E. Zero Emission Bus Regulation.................................................................................................9

1. ZEB Demonstration..............................................................................................................10

2. ZEB Purchase Requirements.............................................................................................10

3. Progress on the Demonstration Project............................................................................10

III. PUBLIC OUTREACH AND ENVIRONMENTAL JUSTICE....................................................11

A. Environmental Justice..............................................................................................................11

B. Outreach Efforts........................................................................................................................12

IV. NEED FOR REGULATORY MODIFICATIONS.......................................................................13

A. Hybrid-Electric Buses...............................................................................................................13

B. Fleet Rule for Transit Agencies..............................................................................................14

C. Zero Emission Bus Demonstration........................................................................................15

V. SUMMARY OF PROPOSED REGULATIONS ........................................................................16

A. Amendment to the Urban Bus Emission Standard, title 13, CCR, section 1956.1(a)(11)

16

B. Amendments to the Fleet Rule of Transit Agencies, title 13, CCR, section 1956.2 ......16

1. Add a Definition of Hybrid-electric Bus .............................................................................16

2. Add Transit Agency Requirements for Purchase of Diesel-fueled HEB......................17

C. Amendment to the Zero-emission Bus Rule, title 13, CCR, section 1956.3 ...................17

D. Amendment to Reporting Requirements, title 13, CCR, section 1956.4 .........................17

VI. AVAILABILITY AND TECHNOLOGICAL FEASIBILITY OF CONTROL MEASURE ........18

A. Diesel-fueled Hybrid Electric Buses ......................................................................................18

B. Zero-Emission Bus Requirements .........................................................................................18

VII. REGULATORY ALTERNATIVES..........................................................................................21

A. Do Not Adopt This Regulation................................................................................................21

B. Adopt a Lower NOx Emission Standard for Diesel HEBs..................................................22

C. Do Not Amend the ZEB Requirements.................................................................................22

VIII. ECONOMIC IMPACT...............................................................................................................22

A. Legal Requirement...................................................................................................................22

B. Affected Manufacturers............................................................................................................22

C. Potential Impacts on Businesses...........................................................................................23

D. Potential Impact on Small Businesses..................................................................................23

E. Potential Costs to Local Agencies .........................................................................................23

F. Potential Impact on Business Competitiveness...................................................................24

G. Potential Impact on Employment ...........................................................................................24

IX. ENVIRONMENTAL IMPACT AND COST EFFECTIVENESS..............................................24
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A. Benefits ......................................................................................................................................24

1. Statewide Benefits................................................................................................................24

2. Cost-Effectiveness of Proposed Regulation.....................................................................25

B. Potential Negative Impacts .....................................................................................................25

X. ISSUES..........................................................................................................................................25

A. HEBs Should Receive a NOx Emission Reduction of Greater Than 25 Percent from

the Engine Certification Value........................................................................................................25

B. HEBs Should Not be Required to Meet Urban Bus Engine Durability.............................26

C. HEBs Should be Allowed to Meet the PM Emission Standard with an ARB-Verified

Aftertreatment Device......................................................................................................................27

XI. SUMMARY AND STAFF RECOMMENDATION.....................................................................27

A. Summary of Staff’s Proposal..................................................................................................27

B. Staff Recommendation............................................................................................................28

XII. REFERENCES.........................................................................................................................28

TABLES

Table 1. California and Federal NOx Emission Standards for Urban Bus Engines ....................6

Table 2. California and Federal PM Emission Standards for Urban Bus Engines ......................6

Table 3. California Optional, Reduced-Emission Standards for Urban Buses.............................7

Table 4. ZEB Demonstration Transit Agencies...............................................................................11

Table 5. Workshop Locations and Times.........................................................................................13

Table 6. Statewide Urban Bus Fleet Emission Inventory for 2006 Compared to the Proposal...

.................................................................................................................................................25

APPENDICES

APPENDIX A: PROPOSED MODIFICATION TO THE EXHAUST EMISSION

STANDARDS AND TEST PROCEDURES - 1985 AND SUBSEQUENT

MODEL YEAR HEAVY-DUTY URBAN BUS ENGINES AND VEHICLES,

THE FLEET RULE FOR TRANSIT AGENCIES, AND THE ZEROEMISSION BUS DEMONSTRATION PROJECT
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LIST OF ACRONYMS

$/lb Dollars per pound

AC Transit Alameda/Contra Costa Transit District

ARB, or the Board Air Resources Board

CCR California Code of Regulations

CO Carbon monoxide

FCB Fuel cell bus

g/bhp-hr Grams per brake horsepower-hour

GGT Golden Gate Bridge Highway and Transportation District

GVWR Gross vehicle weight rating

HC Hydrocarbon

H&SC Health and Safety Code

HEB Hybrid-electric bus

lbs/day Pounds per day

Low sulfur diesel fuel Diesel fuel with less than 15 ppmw sulfur content

MY Model year

Moyer Program Carl Moyer Memorial Air Quality Standards Attainment Program

NOx Oxides of nitrogen

PM Particulate matter

Ppmw Parts per million by weight

SamTrans San Mateo County Transit District

Tpd Tons per day

U. S. EPA United States Environmental Protection Agency

VTA Santa Clara Valley Transit Transportation Authority

ZEB Zero-emission Bus
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EXECUTIVE SUMMARY

The major goal of the Air Resources Board (ARB or “the Board”) is to provide

clean, healthful air to all the citizens of California. California’s commitment to

providing clean public transportation is an important part of achieving this goal.

Public transportation has important societal benefits, providing access to work

and education, reducing traffic congestion, and meeting mobility needs of the

public.

In February 2000 the Board confirmed its continued commitment toward

improving emissions from public transportation by establishing a new fleet rule

for transit agencies and more stringent emission standards for new urban bus

engines and vehicles. The rule promoted advanced technologies by adopting a

zero-emission bus (ZEB) demonstration and ZEB acquisition requirements for

larger transit agencies.

Recognizing the progressive nature of the regulations, the Board required staff to

report back regularly on implementation progress and to develop a test

procedure to certify hybrid-electric urban buses (HEBs). Staff has reported back

to the Board at its September 20, 2001, and March 21, 2002, public meetings.

As instructed by the Board, staff brought modifications to the fleet rule for transit

agencies and a test procedure for certification of HEBs to the Board, which were

adopted at the October 24, 2002, public hearing.

Staff is bringing this proposal to the Board to make amendments not addressed

in the October 24, 2002, hearing. Specifically, staff is proposing modifications to

the exhaust emission standards and test procedures for heavy-duty urban bus

engines and vehicles, to the fleet rule for transit agencies, and to the ZEB

requirements.

This rulemaking has two purposes. First, staff is proposing a mechanism in this

rulemaking to allow the purchase by certain transit agencies of diesel HEBs from

2004 through 2006 model year (MY). Second, staff is proposing modifications to

the ZEB program to conform with current and potential future market conditions

and availability of ZEBs. Staff is not, at this time, proposing to modify the 2007

engine exhaust emission standards for urban bus engines and vehicles.

Staff expects a small positive effect on emissions from the amendments it is

proposing to the engine exhaust emission standards for urban buses and

vehicles. Staff’s proposal would allow manufacturers to sell a MY 2004 through

2006 diesel HEB certified to standards of 1.8 grams per brake horsepower-hour

(g/bhp-hr) oxides of nitrogen (NOx) and 0.01 g/bhp-hr particulate matter (PM).

Transit agencies on the diesel path would be allowed to purchase those diesel

HEBs, provided they offset the difference between 1.8 g/bhp-hr NOx and the

current diesel urban bus engine standard of 0.5 g/bhp-hr NOx. Offsets can be
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obtained through installing a retrofit device that reduces NOx emissions or

repowering to a lower emitting diesel or alternative-fuel engine.

In addition to the changes to the urban bus engine standards, staff also is

proposing to revise the zero emission bus demonstration program by reducing

the number of concurrent fuel cell buses and extending the time period for

initiation and completion of the demonstration projects. At the time the transit

bus regulation was developed, information available to staff indicated that the

research and development of fuel cells would result in their application in transit

buses before their application in light duty vehicles. The reverse has occurred,

and manufacturers are focusing their efforts on developing light duty vehicle fuel

cell applications. Despite the exemplary efforts of the transit agencies, the

demonstration program is, therefore, behind schedule and staff is proposing

changes to match the program goals with the current status of technology.

The proposed regulatory amendments have no associated costs for

implementation because the changes do not mandate purchases. Rather, the

amendments provide the opportunity for transit agencies to purchase new diesel

HEBs from 2004 through 2006. In addition, there is no added cost as a result of

the proposal to modify the ZEB demonstration program. Staff expects there will

be benefits to those businesses that produce or sell diesel HEBs.

The proposed modifications, as described herein, are consistent with the

authority of the ARB to control emissions from mobile sources. To maintain

current emission reduction goals set for transit buses in 2000, the ARB staff,

therefore, recommends that the Board adopt the proposed modifications to

sections 1956.1, 1956.2, 1956.3, and 1956.4, title 13, California Code of

Regulations, set forth in the proposed Regulation Order in Appendix A.
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I. INTRODUCTION

The major goal of the Air Resources Board (ARB or “the Board”) is to provide

clean, healthful air to the citizens of California. California’s commitment to

providing clean public transportation is an important part of achieving this goal.

Public transportation has important societal benefits, including providing access

to work and education, reducing traffic congestion, and meeting the mobility

needs of the public, including the elderly and physically challenged.

Most types of public transportation, however, are also sources of polluting engine

exhaust emissions. Oxides of nitrogen (NOx) and hydrocarbons (HC) contribute

to the atmospheric formation of ozone and fine particles. Diesel particulate

matter (PM) is a toxic air contaminant – a cancer-causing pollutant that also has

significant short- and long-term negative cardiovascular impacts. These

emissions often occur within California’s most populated areas. It is, therefore,

vital to all Californians that the ARB continue its efforts to reduce engine exhaust

emissions from all sources, specifically transit buses, which are the subject of

this rulemaking.

In February 2000, the Board confirmed its continued commitment toward

improving emissions from public transportation by establishing a new fleet rule

for transit agencies and more stringent emission standards for new urban bus

engines and vehicles. The multi-faceted regulations were designed to reduce

NOx, an ozone precursor, and PM by setting fleet emission reduction

requirements that encouraged transit agencies to purchase cleaner buses and

retrofit their existing buses. The rule promoted advanced technologies by

adopting a zero-emission bus (ZEB) demonstration and ZEB acquisition

requirements applicable to larger transit agencies. New, more stringent mid- and

long-term emission standards were adopted that apply to new urban bus

engines.

Recognizing the progressive nature of the regulations, the Board required staff to

report back regularly on implementation progress and to develop a test

procedure to certify hybrid-electric urban buses (HEBs). Staff has worked closely

with transit agencies to encourage compliance and reported back to the Board at

its September 20, 2001, and March 21, 2002, public meetings. As instructed by

the Board, staff brought modifications to the fleet rule for transit agencies and a

test procedure for certification of HEBs to the Board, which were adopted at the

October 24, 2002, public hearing.

Staff is bringing this proposal to the Board to make amendments to sections of

the rules not addressed in the October 24, 2002, hearing. Staff is proposing

modifications to the exhaust emission standards and test procedures for heavyduty urban bus engines and vehicles, to the fleet rule for transit agencies, and to

the ZEB requirements.
4

This rulemaking has two purposes. First, staff is proposing a mechanism to allow

the certification, sale, and purchase of diesel HEBs, for the 2004 through 2006

model years (MY). At the time of the rulemaking, the Board was asked by

several witnesses to provide a way for HEBs to be sold in California. Staff

developed interim certification procedures, which the Board adopted in October

2002. With the 2004 model year, however, the current rule requires those

engines to meet the very low California 2004 urban bus engine exhaust emission

standards, which they are unable to meet. The benefits anticipated from the

development of HEB technology and the offsets that transit agencies will need to

supply in order to compensate for the loss of NOx reduction benefits justifies this

approach.

Second, staff is proposing modifications to the ZEB program to conform with

current and potential future market conditions and the availability of ZEBs. The

ZEB demonstration program is behind schedule. ARB staff has been closely

monitoring activities and the delay is a consequence of conditions out of the

transit agencies’ control. The amendments to the ZEB program are necessary

and appropriate.

Staff is not, at this time, proposing to modify the 2007 engine exhaust emission

standards for urban bus engines and vehicles. Staff had raised the issue of

aligning California’s urban bus standards for 2007 and beyond with the California

and federal heavy duty truck standards, and had entertained comments on this

proposal at public workshops, but has since decided not to propose this change

in this rulemaking.

II. BACKGROUND

California’s regulations applicable to transit agencies and the manufacturers of

urban bus engines and vehicles are innovative and go beyond the federal

requirements for urban buses. Since rule adoption, many transit agencies have

installed natural gas refueling infrastructure and purchased alternative-fuel urban

buses; repowered diesel engines to cleaner exhaust emission standards;

installed diesel particulate filters on diesel engines; and experimented with

developing technologies, such as HEBs and cleaner fuels. Many of California’s

transit agencies consider themselves to be innovators and incubators for

advanced technologies.

A. Applicability

The Fleet Rule for Transit Agencies regulates transit buses that are owned or

leased by public transit agencies and that meet the definition of an urban bus.

An urban bus is a bus that is normally powered by a heavy heavy-duty diesel

engine, or of a type that would normally be powered by a heavy heavy-duty

diesel engine. These buses are generally 35 feet in length or longer. Urban
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buses usually operate on a fixed route consisting of stops and starts as

passengers are routinely picked up and delivered to their destinations.

Commuter bus operations within metropolitan areas (such as the YoloSacramento metropolitan area) that consist of more than a few pick-up and dropoff stops are also considered to fall within the definition of urban bus operation.

B. Engine Exhaust Emission Standards for Urban Buses

The “Exhaust Emission Standards and Test Procedures - 1985 and Subsequent

Model Heavy-Duty Urban Bus Engine and Vehicles” are codified in title 13,

California Code of Regulations (CCR), section 1956.1. The requirements set

forth engine exhaust emission standards for urban bus engines and vehicles

operating in California. Beginning October 1, 2002, all diesel-fueled, dual-fuel,

and bi-fuel urban bus engines were required to meet a 0.01 grams per brake

horsepower-hour (g/bhp-hr) PM emission standard. Beginning with the 2004 MY,

diesel urban bus engines must meet new NOx emission standards of 0.5 g/bhphr, and with the 2007 MY all urban bus engines must meet new emission

standards of 0.2 g/bhp-hr NOx.

California’s exhaust emission standards for urban buses are, in most years, more

stringent than the federal requirements for urban buses until 2010. California

and federal heavy duty truck engine exhaust standards, however, are the same.

Tables 1 and 2 below list both California and federal NOx and PM emission

standards for urban bus engines. In addition to the mandatory emission

standards listed in Tables 1 and 2, the ARB also has optional, reduced-emission

standards, which were integrated into the February 2000 urban transit bus

emission standard. The optional reduced-emission standards for NOx are listed

in Table 3 below.
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Table 1. California and Federal NOx Emission Standards for Urban Bus

Engines

Emission Standards (g/bhp-hr)

Model Year California Federal

1988 6.0 10.7

1990 6.0 6.0

1991 5.0 5.0

1996 4.0 5.0

1998 4.0 4.0

October 2002 2.2(1) 2.2(1)

2004 0.5(2), 2.2(3) 2.2(1)

2007 0.2 1.2 (4)

2010 0.2 0.2(4)

1. Nominal expected NOx level based on emission standards of 2.4 g/bhp-hr NOx plus non-methane hydrocarbons

(NMHC) or 2.5 g/bhp-hr NOx plus NMHC with 0.5 g/bhp-hr NMHC cap to take effect in October 2002 for those

engines subject to the Settlement Agreements between the heavy-duty engine manufacturers, the United States

Environmental Protection Agency (U.S. EPA), and ARB. As part of the Settlement Agreements, the federal heavyduty engine emission standards adopted for 2004 took effect in October 2002.

2. Standard applies to urban bus equipped with diesel-fuel, dual fuel, or bi-fuel, engines.

3. Standard applies to urban bus equipped with alternative-fueled engines. Nominal expected NOx level based on ARB

emission standards of 2.4 g/bhp-hr NOx plus NMHC or 2.5 g/bhp-hr NOx plus NMHC with 0.5 g/bhp-hr NMHC.

4. Between 2007 and 2009, U.S. EPA requires 50% of heavy duty diesel engine family certifications to meet the 0.2

g/bhp-hr NOx standard. Averaging is allowed, and it is expected, most engines will conform to a NOx standard of

approximately 1.2 g/bhp-hr.

Table 2. California and Federal PM Emission Standards for Urban Bus

Engines

Emission Standards (g/bhp-hr)

Model Year California Federal

1988 0.6 0.6

1991 0.1 0.25

1993 0.1 0.1

1994 0.07 0.07

1996 0.05(1) 0.05(1)

October 2002 0.01(2) 0.05

2007 0.01 0.01

1. In-use standard of 0.07 g/bhp-hr.

2. Standard applies to urban bus equipped with diesel-fuel, dual fuel, or bi-fuel, engines. Urban bus equipped with

alternative fueled engines may certify to optional standard of 0.03, 0.02, or 0.01 g/bhp-hr.
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Table 3. California Optional, Reduced-Emission Standards for Urban

Buses

Emission Standard (g/bhp-hr)

Model Year Optional

Standards

Increment

2000 – 10/2002 2.5 - 0.5 0.5

10/2002 – 2003 1.8-0.3 0.3

2004 – 2006(1) 1.8-0.3 0.3

1. Emission standards apply only to alternative fueled engines.

In January 2001, after California adopted its current 2007 urban bus exhaust

emission standard, the U.S. EPA completed its 2007 heavy-duty engine exhaust

emission rulemaking and adopted "Heavy-Duty Engine and Vehicle Standards

and Highway Diesel Fuel Sulfur Control Requirements." Although the final NOx

emission standard is the same, there are significant differences between

California’s standards for new urban bus engines and the federal 2007 engine

standards. California’s standards require all urban bus engines to certify to 0.2

g/bhp-hr NOx as of the 2007 MY. The federal heavy-duty engine standard allows

the 0.2 g/bhp-hr NOx standard to be phased-in as a percentage of sales: 50

percent in 2007 through 2009 and 100 percent in 2010 and beyond.

C. Hybrid-Electric Bus Technology

Hybrid-electric buses utilize an advanced technology that achieves lower

emissions and better fuel economy than equivalently sized diesel buses. Hybridelectric propulsion systems combine two motive power sources: an energy

storage system such as a battery pack or ultracapacitors, and an internal

combustion engine, turbine, or fuel cell functioning as an auxiliary power unit. An

electric motor provides partial or complete power to the wheels. In addition,

energy otherwise lost as heat during braking is captured through regenerative

braking to charge the energy storage system.

Transit buses and delivery trucks with frequent stop-and-go drive cycles are ideal

for hybrid-electric applications. The energy storage system is used during

periods of initial acceleration, which are usually high emission episodes.

Regenerative braking during frequent stops recharges the energy storage

system. As the engine is not the sole power source in hybrid-electric drive trains,

a smaller engine can be used and operated at high efficiency and low emissions.

Emissions testing studies at the ARB and other facilities indicate a fuel

consumption reduction of 25 percent and NOx emission reduction of about 50

percent for diesel-fueled HEBs compared to conventional diesel transit buses

(ARB 2002). Emission testing studies of gasoline-fueled HEBs indicate even

more significant NOx emission reductions compared to conventional diesel and

Compresses Natural Gas (CNG) transit buses.
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1. California Interim Certification Procedures

Recognizing the projected emission benefits of HEBs, the Board directed ARB

staff to develop a test procedure that would allow manufacturers to demonstrate

and claim the emission benefit of the electric motor. Certification through engine

dynamometer testing does not reflect the emission benefits of the hybrid-electric

drive system. Staff developed the interim certification procedures to provide

early flexibility and ensure long-term benefits. The Board adopted the “California

Interim Certification Procedures for 2004 and Subsequent Model Hybrid-Electric

Vehicles, in the Urban Bus and Heavy-Duty Vehicle Classes” (interim certification

procedures) on October 24, 2002.

The interim certification procedures provide a method for manufacturers to

quantify the emission reductions attributable to hybrid-electric drive systems

through a combination of chassis dynamometer and engine dynamometer

testing. To facilitate introduction of this technology in California, manufacturers

may simply claim a 25 percent reduction from the engine’s NOx certification

value during the interim period of 2004-2006. Alternatively, manufacturers may

perform chassis testing to determine the full emission benefits of the hybridelectric drive system. Manufacturers are also allowed relaxed useful life and

durability requirements for the hybrid-electric drive system during the interim

period of 2004-2006.

To date, one manufacturer, ISE, has certified a hybrid-electric drive system for

use in urban buses. ISE received certification for a hybrid-electric drive system

incorporating a gasoline engine in October 2003. The ISE hybrid-electric drive

system, when installed in a bus chassis, is classified as an alternative-fuel bus,

and the system is certified under the optional NOx standards (Table 3) at 0.6

g/bhpr-hr.

2. Hybrid-Electric Transit Bus Projects

HEBs have been in revenue service in the United States for the past six years.

In 1998, New York City Transit began a demonstration program with four dieselfueled HEBs. The success of the program has resulted in New York City Transit

ordering an additional 325 diesel-fueled HEBs, which it will receive through 2005.

The past two years have seen a shift from research and development to

production and use of HEBs. In January 2002, fewer than 100 HEBs were in

active service. To date, orders have been placed for approximately 650

additional HEBs throughout the United States. In addition to the New York City

Transit order, large orders have been placed by King County Metro in Seattle,

Washington (213 diesel hybrid buses) and Long Beach Transit in California (27

gasoline hybrid buses).
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The commercialization of hybrid-electric drive system technology for transit

buses is encouraging; however, the industry is still in a relatively early stage.

The complete emission and fuel economy benefits of this technology will be

realized with continued refinements made to HEBs currently available.

D. Fleet Rule for Transit Agencies

The fleet rule for transit agencies sets fleet-wide requirements applicable to each

transit agency. Thus, each transit agency must consider its fleet as a whole to

meet emission reduction goals. Initially, each transit agency was required to

select a compliance path – either the “diesel” path or the “alternative-fuel” path,

by January 1, 2001. Path selection set the fuel type for urban bus purchases or

leases through model year 2015. Transit agencies on either path were required

to achieve a maximum fleet average of 4.8 g/bhp-hr NOxas of October 1, 2002,

but PM and ZEB requirements differ depending on the path selected. Diesel

path agencies are required to reduce PM emissions and purchase ZEBs sooner

than those on the alternative fuel path.

The October 24, 2002, rule amendments were primarily focused on changing the

mechanism for PM reduction because of the unavailability of technology for the

oldest engines (ARB 2002). Further, any transit agency on the diesel path and

located in the South Coast Air Basin was allowed to switch its fuel path to

alternative-fuel path, provided the transit agency was in compliance with the rule.

Additional changes allowed diesel path agencies to purchase 2004 through 2006

model year alternative-fuel engines; provided a “financial hardship” delay request

mechanism for small transit agencies; repealed the certification procedures for

PM retrofit devices as duplicative of another, recently adopted rule; and made

other conforming and clarifying changes.

E. Zero Emission Bus Regulation

The Board adopted the ZEB requirements (title 13, CCR, section 1956.3) in 2000

as part of the comprehensive fleet rule for transit agencies within California. The

development of zero emission transportation is key to California’s long-term

clean air strategy and the ZEB regulation establishes demonstration and

acquisition criteria for each large transit agency to further that goal.

Zero emission technologies include battery electric buses, electric trolley buses

with over-head twin-wire power supply, and fuel cell electric buses. A “zeroemission bus” is defined as producing zero exhaust emissions of any criteria or

precursor pollutant under any and all possible operational modes and climates.

“Criteria pollutants” are those for which the ARB has adopted ambient air quality

standards.
10

1. ZEB Demonstration

Any transit agency on the diesel path that has more than 200 urban buses as of

January 31, 2001, is required to implement a ZEB demonstration project. Up to

three transit agencies can participate in any one joint project, provided the project

does not utilize electric trolley buses.

Key components and milestones of the demonstration project are as follows:

• Transit agencies were to prepare bid proposals for materials and services

necessary to implement the demonstration project no later than January 1,

2002.

• The required ZEBs were to be in revenue service no later than July 1, 2003.

• Transit agencies were to place at least three ZEBs in revenue service per

participating agency, but up to three transit agencies in an air basin could

petition to implement a joint demonstration project.

• The buses must be in revenue service for a minimum duration of 12 calendar

months.

• Transit agencies are to submit a report on the demonstration project to the

ARB’s Executive Officer no later than January 31, 2005.

• The ARB is to review ZEB technology and the feasibility of implementing the

purchase provision of the program (described below) no later than January

2006.

2. ZEB Purchase Requirements

Large transit agencies (those with more than 200 buses) on both fuel paths are

required to implement the ZEB purchase component of the program on a

phased-in schedule. For transit agencies on the diesel fuel path, a 15 percent

aggregate total of all bus acquisitions from model year 2008 through model year

2015 must be ZEBs. For transit agencies on the alternative fuel path, the 15

percent ZEB acquisition requirement starts with model year 2010 and runs

through model year 2015. Transit agencies on the diesel path must submit a

compliance plan by January 2007 and transit agencies on the alternative fuel

path must submit a compliance plan by January 2009. Any request for deviation

from the ZEB purchase requirement must be submitted to, and approved by, the

Executive Officer prior to the transit agency’s submittal of the purchase order.

3. Progress on the Demonstration Project

In 2001 there were 71 transit agencies reporting to the ARB. Of these, only five

of the 44 transit agencies on the diesel path met the criteria for having to

implement a ZEB demonstration project (Table 4).
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Table 4. ZEB Demonstration Transit Agencies

Transit Agencies Required to Implement a ZEB Demonstration Project

Alameda/Contra Costa Transit District

Golden Gate Bridge Highway and Transportation District

San Francisco Municipal Railway

San Mateo County Transit District

Santa Clara Valley Transportation Authority

Of the five eligible transit agencies, four are participating in fuel cell bus

demonstrations and the fifth, San Francisco Municipal Railway, is using its

electric trolley fleet to meet the ZEB demonstration requirements. The four

transit agencies formed two partnerships, with Alameda/Contra Costa Transit

District (AC Transit) being joined by Golden Gate Bridge Highway and

Transportation District (GGT), and Santa Clara Valley Transportation Authority

(VTA) being joined by San Mateo County Transit District (SamTrans). In

addition, SunLine Transit Agency joined the AC Transit and GGT partnership

voluntarily and will purchase one bus.

The transit agencies selected fuel cell powered buses as the technology most

likely to cost-effectively meet the required performance standards and emission

requirements in the long term. As explained below, however, implementation is

behind schedule and adjustments to the program are necessary.

III. PUBLIC OUTREACH AND ENVIRONMENTAL JUSTICE

The ARB is committed to ensuring that all California communities have clean,

healthful air by addressing not only the regional smog that hangs over our cities

but also the more localized toxic pollution that is generated within our

communities. The ARB works to ensure that all individuals in California,

especially children and the elderly, can live, work and play in a healthful

environment that is free from harmful exposure to air pollution.

A. Environmental Justice

On December 13, 2001, the Board approved Environmental Justice Policies and

Actions,1 which formally established a framework for incorporating environmental

justice into the ARB's programs, consistent with the directives of State law and

policy (ARB 2001). “Environmental justice” is defined as the fair treatment of

people of all races, cultures, and incomes with respect to the development,

adoption, implementation, and enforcement of environmental laws, regulations,

and policies. These policies apply to all communities in California, but

environmental justice issues have been raised more in the context of low-income

and minority communities because of past land use policies and the

 

1

 Complete information for these programs can be found at http://www.arb.ca.gov/ch/ej.htm.
12

accumulative impact of a concentration of emitting facilities in some

neighborhoods.

To achieve this ambitious goal, the ARB has established a Community Health

Program and emphasized community health issues in our existing programs. To

prove people with basic tools and information needed to understand and

participate in air pollution policy planning, permitting, and regulatory decisionmaking processes, ARB has published, “The Public Participation Guide to Air

Quality Decision Making in California.”2

The Environmental Justice Policies are intended to promote the fair treatment of

all Californians and cover the full spectrum of ARB activities. Underlying these

Policies is a recognition that we need to engage community members in a

meaningful way as we carry out our activities. People should have the best

possible information about the air they breathe and what is being done to reduce

unhealthful air pollution in their communities. The ARB recognizes its obligation

to work closely with all stakeholders; communities, environmental and public

health organizations, industry, business owners, other agencies, and all other

interested parties to successfully implement these Policies. Our outreach efforts,

described below, facilitate this objective.

B. Outreach Efforts

The ARB strives to involve the widest number of affected persons in the

development of its regulations. To this end, staff held informal public workshops

and meetings prior to publishing the notice and staff report. For this rule, staff

conducted four public workshops (Table 5) and additional focused meetings.

Notices for the workshops were mailed to over 1,800 individuals and companies

and were posted to ARB’s Public Transit Agencies web site and e-mailed to

subscribers of ARB’s electronic list server. Those workshops held in Sacramento

were webcast for individuals who could not travel to the meeting locations. To

generate additional public participation and to enhance the information flow

between ARB and interested persons, staff made all documents, including

workshop presentations, available via the Public Transit Agencies web site.3 In

addition, the web site provides background information and serves as a portal to

other web sites with related information.

 

2

 Complete information on this program can be found at

http://www.arb.ca.gov/ch/public_participation.htm 3

 http://www.arb.ca.gov/msprog/bus/bus.htm
13

Table 5. Workshop Locations and Times.

Date Location Time

December 2, 2003 El Monte 1:30 – 3:00 PM

December 3, 2003 Sacramento 1:30 – 3:00 PM

March 29, 2004 Sacramento 1:30 – 3:00 PM

March 30, 2004 El Monte 1:30 – 3:00 PM

Attendees of the workshops included representatives from environmental

organizations, transit agencies, engine manufacturers, bus manufacturers, air

pollution control districts, cities and counties, the California Association for

Coordinated Transportation, Regional Council of Rural Counties, Manufacturers

of Emission Control Association, Engine Manufactures Association, California

Department of Transportation, California Natural Gas Association, California

Energy Commission, consultants, and other parties interested in transit bus

emissions.

Staff met with a number of the same stakeholders in focused meetings

throughout the rulemaking process to get feedback on staff’s proposed regulatory

modifications. These stakeholders represent transit agencies; manufacturers of

engines, hybrid-electric drive systems, and buses; natural gas advocates; and

environmental organizations. Staff attended and made presentations at the

California Transit Association conference in November 2003 and the California

Association for Coordinated Transportation conference in April 2004. Staff also

worked closely with ZEB stakeholders, including AC Transit, VTA, SunLine

Transit, California Energy Commission, National Renewable Energy Laboratory,

South Coast Air Quality Management District, Ballard Power Systems (Ballard),

ISE , and United Technologies Corporation Fuel Cells. Alternatives were

suggested to the proposed regulation and explored by staff.

IV. NEED FOR REGULATORY MODIFICATIONS

A. Hybrid-Electric Buses

Only seven transit agencies,4 out of the 44 which are on the diesel path, may

purchase 2004 through 2006 MY diesel engines that are certified to the 2.4

g/bhp-hr NOx + NMHC standard. Those seven transit agencies were approved

by the Executive Officer in 2001 to take advantage of the “alternative NOx

strategy exemption” found in title 13, CCR, section 1956.2 (c)(8) and (d)(7). The

rest of the transit agencies on the diesel path currently have no options, other

than repowering their diesel engines, to purchase cleaner diesel engines,

 

4

 AC Transit, El Dorado Transit, Eastern Contra Costa Transit, GGT, Merced Transit, Visalia

Transit, and VTA.
14

because they simply are not being manufactured or certified at the required

California standard.

For a short time, from October 1, 2002, through the 2003 model year, transit

agencies could purchase a diesel urban bus engine certified to 2.5 g/bhp-hr NOx

and 0.01 g/bhp-hr PM. As of 2004, however, the NOx standard dropped to 0.5

g/bhp-hr NOx and no manufacturer has certified an engine to meet that standard.

Thus, most transit agencies on the diesel path can only repower older engines

but cannot purchase new buses without converting to alternative fuels.

Staff believes that transit agencies on the diesel path should be provided with the

cleanest, most aggressive diesel choice available, which currently is diesel HEB

technology. Thus, staff is proposing to encourage turnover of the oldest, dirtiest

diesel engines by creating a special certification standard for manufacturers of

diesel HEBs during the 2004-2006 MY time period. Diesel HEBs are in use in

other states and two transit agencies have experimental permits to operate diesel

HEBs in California. Staff evaluated current engine technology and found that no

diesel HEB could meet the California 2004 diesel urban bus engine exhaust

emission standard of 0.5 g/bhp-hr NOx. Staff believes the diesel HEBs could,

however, meet a NOx standard of 1.8 g/bhp-hr and a PM standard of 0.01 g/bhphr.

In order to purchase the higher NOx emission diesel HEBs, a transit agency

would be required, through amendment of the fleet rule for transit agencies, to

offset the increased NOx emissions through NOx reductions elsewhere in the

fleet. A transit agency could accomplish this, for example, by installing NOx

aftertreatment technology on its remaining diesel buses or repowering an older

bus with an engine certified to lower NOx emissions. Neither NOx aftertreatment

nor repowering with a cleaner engine is required under the fleet rule for transit

agencies, so these emission savings would be surplus to other requirements and

thus available to offset any NOx increases from purchasing diesel HEBs. Staff is

proposing that this option only be for transit agencies on the diesel path, as there

is an alternative-fueled HEB already certified and available to transit agencies on

the alternative fuel path.

B. Fleet Rule for Transit Agencies

In order to accomplish the changes discussed above, ARB will need to amend

the fleet rule for transit agencies to allow diesel path agencies to purchase diesel

HEBs and to include a requirement and methodology that, at the same time,

reduces NOx emissions from diesel HEB purchases and use. The requirement

would be similar to the existing alternative NOx strategy exemption. A transit

agency would be required to submit a plan demonstrating how it would offset

NOx emissions from diesel HEB purchases to the ARB Executive Officer, and

after plan approval could go ahead with the purchase of diesel HEBs. A followup report would confirm compliance.
15

C. Zero Emission Bus Demonstration

At the time the transit bus regulation was developed, information available to staff

indicated that the research and development of fuel cells in transit buses would

lead to their deployment in transit buses before their application in light duty

vehicles. Buses are better suited to handle the relatively larger size and weight

of fuel cells and on-board fuel storage. In addition, the deployment of fuel cells in

a controlled fleet application would allow fueling and service requirements to be

performed at a single facility, thereby helping to mediate infrastructure and

support issues in the early years. As it turns out, fuel cell and vehicle

manufacturers instead focused their resources on developing light duty fuel cell

applications.

After reviewing the status of technology and bus availability, therefore, staff sees

a need to revise the number of concurrent, in-use fuel cell buses that must be

demonstrated and extend the time period for the demonstration projects.

Currently the regulation requires that each participant place a minimum of three

ZEBs in revenue service and that the demonstration be completed in time to

allow completion of a report by January 2005. Despite the exemplary efforts of

the transit agencies, the demonstration projects face significant challenges. The

projects are over one year behind schedule and each project requires additional

ZEBs. As there are two transit agencies partnered in each demonstration

project, an additional six fuel cell buses (FCBs) would be required. These FCBs,

however, will not be delivered in time to allow the demonstration to be completed

prior to January 2005.

The transit agencies have demonstrated due diligence in attempting to comply

with the demonstration requirements. For example, AC Transit and VTA, the

lead transit agencies of the two ZEB demonstrations, individually initiated efforts

to develop ZEB programs as the ZEB regulation was being promulgated. Transit

agencies solicited bids for the purchase of FCB with sufficient lead time to meet

regulatory requirements. However, transit agencies experienced difficulties in

receiving responses from fuel cell and bus manufacturers. The FCBs for the

VTA demonstration are not expected until second quarter 2004 and the FCBs for

AC Transit are not anticipated to be delivered until fourth quarter 2005. As a

result, the in-revenue demonstrations of the FCBs will start over one year after

the currently required start date.

In addition, the cost of buses is greater then anticipated. At the time of the

original rulemaking, in 1999, ARB estimated that by 2001 the cost for a

demonstration FCB would be in excess of $1 million and by 2003/2004 an FCB

would be around $550,000 to $790,000, which is cost competitive with electric

trolley buses. The cost of an FCB for this initial demonstration, however, is

greater then $3 million. By soliciting partners, the lead transit agencies were able

to secure additional funding to allow the demonstrations to go forward despite the

increases in cost.
16

Staff has considered several options to solve this issue, such as allowing transit

agencies to acquire the FCBs at a future date and allowing initial FCBs to be

retrofit with improved fuel cell or zero emission technology-enabling

componentry. After analysis, staff believes the cost of the current buses, the

state of technology, and the availability of data from European fuel cell buses

justify simply reducing the number of buses required in California to three per

demonstration project, instead of three per transit agency, which brings the costs

of the demonstration project back to that projected in the original rulemaking.

V. SUMMARY OF PROPOSED REGULATIONS

Staff recommends that the Board adopt proposed amendments to sections

1956.1, 1956.2, 1956.3, and 1956.4 of title 13, as set forth in Appendix A. All the

provisions in the proposed amendments apply to engines and vehicles produced

for sale in California. There are three components to this proposal:

• Add a 2004 –2006 engine exhaust emission standard of 1.8 g/bhp-hr NOx

and 0.01 g/bhp-hr PM for diesel HEBs;

• Add emission reduction requirements to the fleet rule for transit agencies

for the purchase of diesel HEBs; and

• Modify the zero-emission bus demonstration project.

A. Amendment to the Urban Bus Emission Standard, title 13, CCR, section

1956.1(a)(11)

Staff proposes to add a new subsection to the 2004 to 2006 model year dieselfueled, dual-fuel, and bi-fuel urban bus engine standards (all of which use diesel

fuel) to allow for a diesel HEB to be certified at a 1.8 g/bhp-hr NOx and 0.01

g/bhp-hr PM exhaust emission standard.

The intended effect of the change is to set the lowest technologically feasible

emission standard for diesel HEBs to encourage manufacturers to produce and

sell diesel HEBs in California. Additional fleet requirements for transit agencies

are proposed in this rulemaking in order to offset emission increases from diesel

HEB purchases, relative to the existing urban bus NOx standard for MY 2004

through 2006.

B. Amendments to the Fleet Rule of Transit Agencies, title 13, CCR, section

1956.2

1. Add a Definition of Hybrid-electric Bus

Staff proposes to add a definition for “hybrid-electric bus.” The proposed

definition is modeled on the definition in the “California Interim Certification
17

Procedures for 2004 and Subsequent Model Hybrid-electric Vehicles, in the

Urban Bus and Heavy-duty Vehicle Classes,” incorporated by reference in title13,

CCR, section 1956.1(c).

“Hybrid-electric bus” would be defined as an urban bus equipped with at least

two sources of energy on board; this energy is converted to motive power using

an electric drive motor and an auxiliary power unit, which converts consumable

fuel energy into mechanical or electrical energy. The electric drive motors must

be used partially or fully to drive the vehicle’s wheels.

No impact will result from this change, as the definition is already being used in

the certification procedure for hybrid-electric buses.

2. Add Transit Agency Requirements for Purchase of Diesel-fueled HEB

Staff is proposing that a new section be added to the existing regulation that

provides for procedures for offsetting NOx emissions that would result from the

purchase and operation of diesel HEBs that meet the less stringent NOx exhaust

emission standard. This provision would only apply to transit agencies on the

diesel path. Transit agencies on the alternative-fuel path would not be allowed to

purchase a diesel HEB, as there is already a certified alternative-fuel HEB

available.

The new provision requires the diesel HEB to be certified at the proposed

standard set forth in section 1956.1(a)(11); provides a specific calculation to be

used to quantify emission reductions; and provides a mechanism whereby ARB’s

Executive Officer approves the actions to offset the emission increases that

would result from operating a diesel HEB. This provision also includes reporting

requirements outlined in title 13, CCR, section 1956.4.

C. Amendment to the Zero-emission Bus Rule, title 13, CCR, section 1956.3

Staff proposes to reduce the number of buses required to three buses per

demonstration project, as opposed to three buses per participant, and to revise

the start date of the demonstration to February 28, 2006. These changes more

accurately reflect the cost and expected availability of the FCBs. In addition, staff

is recommending to add an interim demonstration status report due July 31,

2005, and to delay the final project report until July 31, 2007.

D. Amendment to Reporting Requirements, title 13, CCR, section 1956.4

Staff is proposing that a new section be added to the existing regulations that

provides for a mechanism to allow the Executive Officer to receive applications

and decide on the merits of exhaust emission offset actions proposed by a transit

agency that chooses to purchase diesel HEBs. Transit agencies would be
18

required to submit a plan prior to purchasing diesel-fueled HEBs. The application

would need to include the number of diesel HEBs to be purchased and specific

actions, such as the addition of NOx aftertreatment technology or number and

types of engines to be repowered, to reduce NOx emissions. The Executive

Officer would have up to 90 days to consider the transit agency’s request and

analysis, and render a decision. Prior to receipt of the last HEB, the transit

agency must provide a report documenting implementation of the plan. A transit

agency would be responsible for providing any plan changes or updated

information to the Executive Officer.

VI. AVAILABILITY AND TECHNOLOGICAL FEASIBILITY OF CONTROL

MEASURE

A. Diesel-fueled Hybrid Electric Buses

The collaborative efforts of hybrid-electric drive system developers, engine

manufacturers and bus builders have resulted in HEBs utilizing a variety of fuel

and energy storage systems. Advanced battery technologies and ultracapacitors

are available in current buses. HEBs with engines or turbines using diesel,

gasoline, CNG, or propane are commercially available.

Transit agencies are interested in diesel HEBs because of the compatibility with

current fueling structure and familiarity with diesel engine technology. Diesel

HEBs have lower exhaust emissions and better fuel economy compared to

conventional diesel buses. The number of diesel HEBs in revenue service

throughout the United States is expected to triple in the next few years as transit

agencies incorporate this promising technology in their fleets.

B. Zero-Emission Bus Requirements

In addition to reducing the public’s exposure to smog forming emissions the

transit bus regulation aimed to reduce toxic air contaminants and be technology

forcing by requiring zero-emission engines. Zero emission transportation

technology is a key component in California’s long-term clean air strategy. As

the ZEB regulation was being developed, fuel cell technology had demonstrated

greater potential to meet transit agencies’ power, range, and refueling

requirements then battery electric zero emission buses and offered greater route

flexibility and focused infrastructure needs when compared to over-head wire

trolley buses. Buses equipped with direct hydrogen, proton exchange membrane

(PEM) fuel cells or with, on-board methanol reforming, phosphoric acid fuel cells

had been demonstrated successfully. In addition, fuel cell manufacturers

anticipated being production ready by 2003.

It was believed that transit bus applications would lead light-duty vehicles’

development and deployment. Buses are better suited to handle the relatively

larger size and weight of pre-production fuel cell and fuel storage systems. The
19

deployment of fuel cells in a controlled fleet application would allow fueling and

service requirements to be performed at a single facility, thereby helping to

mediate infrastructure and support concerns. In addition, transit agencies

routinely train staff; therefore applicable staff could be trained for proper servicing

or operation of fuel cells.

Based on demonstrated performance, expected cost and availability, transit

agencies viewed the fuel cell engine as the transportation industry’s

environmental solution and eagerly initiated efforts to further test and evaluate

fuel cell buses. For example, AC Transit and VTA, the lead transit agencies of

the ZEB demonstrations, individually initiated efforts to develop ZEB programs as

the ZEB regulation was being developed.

The transit agencies initiated project planning and developed bids for the

purchase of FCBs with sufficient lead-time to meet regulatory requirements.

Much, if not all, of the planning and needs for implementing the ZEB

demonstration proved to be groundbreaking and required creative and persistent

effort from the transit agencies.

As it turns out, vehicle and fuel cell manufactures exerted great efforts on

developing light duty fuel cell applications therefore focussing resources on light

duty applications. In addition, Ballard, one of the fuel cell manufacturers,

dedicated significant resources to meeting production requirements for the Clean

Urban Transport in Europe (CUTE) 30-bus demonstration. While the number of

buses deployed for the CUTE demonstration likely added to the delay in the

California demonstration, the information will be valuable for aiding fuel cell

development.

In addition, the cost of buses is greater then anticipated and not expected to

decrease significantly in the near future. The cost of a bus for this initial

demonstration is greater then $3 million. At the time of the original rulemaking, in

1999, it was estimated that by 2001 the cost for a demonstration fuel cell bus

would be around $1 million and by 2003/2004 a FCB would be around $550,000

to $790,000, which is cost competitive with electric trolley buses. Through

additional efforts the lead transit agencies were able to secure funding to allow

the demonstrations to go forward despite the increases in cost. Despite the

exemplary efforts of the transit operators, the demonstration projects will not be

in compliance. The projects are over one year behind schedule and each project

requires additional buses in order to comply with the California regulation.

Since the causes for the delay in the FCB demonstrations are outside of the

control of the transit agencies, staff recommends moving the deadline for the

placement of the fuel cell buses from July 1, 2003, to February 28, 2006.

Contract agreements specify that the required buses will have been delivered by

then and most of the buses will have been delivered and placed into operation

prior to this date.
20

Staff considered options that would allow compliance with the number of zero

emission buses currently required, such as allowing transit agencies to acquire

the FCBs at a future date or allowing initial FCBs to be retrofit with improved fuel

cell or zero emission technology-enabling componentry. Allowing the initial FCBs

to be retrofit with improved fuel cell or zero emission technology-enabling

componentry has the potential to reduce costs. This initial deployment of buses

required the development and construction of chassis specific for fuel cell

applications. Allowing the reuse of the initial buses could help eliminate cost

associated with bus development, electric drive components, fuel storage, and, if

applicable, electric energy storage. In addition to the cost savings for the transit

agencies, the deployment of an updated fuel cell is more likely to foster fuel cell

development then additional deployments of the same technology.

In order to determine if retrofitting the initial buses could result in savings to the

transit agencies, staff contacted the FCB providers and integrators. While this

report is not intended to contain a thorough state of technology evaluation, staff

did meet with technology providers and system integrators to discuss the

potential amendments.

The VTA bus demonstration uses a Ballard fuel cell system that is identified as a

model P-5. The P-5 is used to supply all system power requirements. The P-5 is

also used in CUTE the 30-bus demonstration project in Europe. At this time

Ballard does not plan to develop an upgraded P-5 fuel cell. The next fuel cell

system is likely to differ extensively therefore making a retrofit of one of the initial

FCBs not cost effective.

The AC Transit FCB demonstration, a hybrid design, was designed with retrofit

capabilities in mind and uses a fuel cell from UTC along with batteries to meet

power requirements. Even with the retrofit capabilities any cost savings will be

limited as the upgraded fuel cell requires similar support systems. In addition, at

this time UTC, the fuel cell provider for this project, does not have a projected

date for a revised fuel cell. For both fuel cell providers, the next generation fuel

cell is not expected for at least three years and is not expected to provide

significant cost reductions at the anticipated production volume of three buses.

Based on comments received from Ballard and UTC, it appears unlikely that an

improved fuel cell will become available within the next three years. Therefore,

allowing a current FCB to be retrofit with an improved fuel cell is not likely to

provide a additional useful information within the next three years. After

considering the number of buses in demonstrations world wide, the cost of the

buses, and the state of the technology staff recommends reducing the number of

buses required to three per demonstration project.

While reducing the number of buses required will decrease the amount of

information gathered from California demonstrations, sufficient information will be
21

available to allow a technology assessment by January 31, 2006. For example,

the transit agencies plan to operate the buses for at least two years of in-revenue

demonstration. SunLine Transit partnered with AC Transit and will be

independently operating a fuel cell powered bus. This will provide a third fuel cell

bus demonstration in California that will be operated under different climate

conditions then the AC Transit and VTA demonstrations. And, information will

have been collected from the CUTE demonstration.

In addition to delaying the placement date and the number of buses required,

staff is recommending changes to the reporting requirements by requiring an

interim report by July 31, 2005, as a new requirement, and moving the date of

the project report from January 31, 2005, to July 31, 2007, which would allow the

report to include information on at least 12 months of in-revenue service.

VII. REGULATORY ALTERNATIVES

No alternative considered by the ARB would be more effective in carrying out the

goals previously endorsed by the Board in the 2000 regulation than the proposed

modifications, nor would any alternative be both as effective and least

burdensome to affected private persons than the proposed modifications. The

following options were considered in reaching this conclusion.

A. Do Not Adopt This Regulation

Not adopting this regulation would have the continued effect of prohibiting the

sale of diesel HEBs in California from 2004 through 2006 to most transit

agencies, and would leave the four transit agencies mandated to demonstrate

ZEB technology in violation of the regulation. California’s regulations for transit

agencies and urban buses are innovative and go beyond the federal

requirements for urban buses. At the time they were adopted, it was anticipated

that changes may be necessary based upon the state of the technology. Not

adopting this regulation would also result in higher emissions than the proposal,

because newer buses could not be purchased to replace older, higher emitting

diesel buses.

Since the original rule adoption in 2000, many transit agencies have installed

natural gas refueling infrastructure and purchased alternative-fuel urban buses;

repowered diesel engines to engines meeting cleaner exhaust emission

standards; installed diesel particulate filters in diesel engines; and experimented

with developing technologies, such as hybrid-electric engines and cleaner fuels.

Many of California’s transit agencies continue to take on the challenge to be

innovators and incubators for advanced technologies. Not adopting these

amendments would hurt the continuing efforts to advance innovative

technologies needed to meet future emission objectives.

Staff does not recommend the Board endorse the “no change” alternative.
22

B. Adopt a Lower NOx Emission Standard for Diesel HEBs

Staff has evaluated the technology and emission levels achieved by diesel HEBs

and does not believe that adopting an emission standard for diesel HEBs lower

the 1.8 g/bhp-hr standard proposed herein would result in the certification and

sale of diesel HEBs. Staff believes this alternative would have the same result

as not adopting the proposal.

Staff does not recommend the Board endorse a lower NOx emission standard for

diesel HEBs alternative.

C. Do Not Amend the ZEB Requirements

The Board could decide not to change the number of buses or the time frame

specified in the ZEB demonstration requirements. However, as discussed, the

demonstration deadline has already passed and it would not be productive to

penalize transit agencies that operated in good faith to acquire the buses prior to

the deadline. Similarly, the buses are significantly more expensive than

previously estimated and additional worldwide fuel cell transit projects make it

less critical to demonstrate the original number of ZEBs in California prior to the

Board’s review of the technology.

Staff does not recommend the Board endorse the “do not amend the ZEB

requirements” alternative.

VIII. ECONOMIC IMPACT

A. Legal Requirement

Sections 11346.3 and 11346.5 of the Government Code require state agencies

to assess the potential for adverse economic impacts on California business

enterprises and individuals when proposing to adopt or amend any administrative

regulation. The assessment shall include a consideration of the impact of the

proposed regulation on California jobs, business expansion, elimination, or

creation, and the ability of California business to compete with out-of-state

businesses.

State agencies are also required to estimate the cost or savings to any state or

local agency and school districts in accordance with instructions adopted by the

Department of Finance. This estimate is to include any nondiscretionary costs or

savings to local agencies and the costs or savings in federal funding to the state.

B. Affected Manufacturers

Businesses that may be affected as a result of the proposed regulation include

manufacturers of advanced, hybrid electric vehicles/engines, and urban bus
23

manufacturers. One business that manufactures hybrid-electric engines is

located in California, therefore most impacts to these businesses, both positive

and negative, will occur in other states.

C. Potential Impacts on Businesses

Currently no diesel hybrid-electric bus has been certified for sale or use in

California. The proposed amendments should have a positive impact on diesel

HEB system and bus manufacturers by allowing them to certify and sell their

products in California during 2004 through 2006. Thus, staff’s proposal opens up

the market for diesel hybrid-electric urban buses, allowing engine manufacturers,

bus manufactures, and system integrators to sell their products in California

between 2004 and 2006. These amendments do not impose a mandate to

produce but open a potential market by allowing the sale and purchase of diesel

hybrid-electric urban buses.

One California manufacturer, ISE, has certified a gasoline HEB. This

manufacturer may see a decline in projected orders because of competition from

the newly-allowed diesel HEBs. Staff believes, however, that there will be a net

increase in HEBs purchased by California transit agencies as a consequence of

this proposal based on conversations with transit agencies that have stated they

would only purchase a diesel HEB and would not purchase the gasoline HEB. In

addition, staff’s proposal is that transit agencies on the alternative-fuel path

would not be allowed to purchase diesel HEBs, thus maintaining the ISE gasoline

HEB as the only HEB for these agencies.

D. Potential Impact on Small Businesses

Staff is not aware of any small businesses that are affected by this regulatory

change.

E. Potential Costs to Local Agencies

Staff has concluded that there are no significant adverse fiscal impacts on any

state or local agencies. Transit agencies on the diesel path currently cannot

purchase diesel HEBs beginning with the 2004 MY engines because no HEBs

are certified to in California. Opening up the diesel HEB market provides transit

agencies with more flexibility to achieve emission reductions and increase

ridership.

The new diesel-fueled HEB requirements are optional. If a transit agency opts to

purchase this technology between 2004 and 2006, staff estimates that the

resulting reporting and emission control device costs will be incorporated into

their current budgets. Extending the deadline for the ZEB demonstration and

reducing the number of fuel cell buses required to be demonstrated will not result
24

in a cost increase for transit agencies; rather they can spread the cost for the

project over a longer period of time.

The proposed modification would impose no costs on government-contracted

(publicly-contracted), and government (publicly-owned) transit agencies.

F. Potential Impact on Business Competitiveness

Staff believes there will be an effect on business competitiveness as it affects

ISE, a California company that manufactures, and has certified, a gasoline HEB.

Other companies that make diesel HEBs will likely benefit from this proposed

rule, perhaps to the detriment of ISE’s market. Currently, the market for hybridelectric buses in California is confined to ISE as no other manufacturer has

certified an HEB in California. Transit agencies, however, appear reluctant to

purchase the ISE gasoline HEB, probably as there are none yet in commercial

operation. Transit agencies that have ordered the ISE gasoline HEB are those

under the jurisdiction of the South Coast AQMD, which are required by local rules

to purchase only alternative-fueled buses when adding to their fleets. Other

transit agencies, which might have purchased the ISE gasoline HEB, may

instead wait and purchase a diesel HEB if one is certified following adoption of

this proposal. Thus ISE may lose some of its potential market.

G. Potential Impact on Employment

Staff believes there may be a positive affect on employment as a result of the

adoption of the proposed modifications as engine and bus manufacturers obtain

additional orders from California transit agencies. Most transit agencies are

currently prevented from purchasing diesel buses because no manufacturer has

chosen to meet the emission standard for NOx imposed by the current rule.

IX. ENVIRONMENTAL IMPACT AND COST EFFECTIVENESS

A. Benefits

Staff believes there will be no business elimination, and believes there will be no

or minimal business creation or expansion, as a result of the adoption of the

proposed modifications.

1. Statewide Benefits

Staff expects a small positive emission benefit from the diesel HEB purchase

amendments proposed for 2004 through 2006 through increased turnover of old,

dirty diesel engines that are replaced by the diesel HEBs (Table 6). Staff

assumed that 150 diesel HEBs would be placed in service in 2006, replacing 150

old diesel buses. No emission benefits would accrue prior to 2006 because of

the lead time necessary to order, manufacture, and place buses into revenue
25

service, and those emission benefits are expected to continue into the future until

the buses are replaced. Because any transit agency that purchases a diesel

HEB must offset the difference between 1.8 g/bhp-hr and 0.5 g/bhp-hr, the model

assumes that all of the 150 modeled diesel HEBs emit at the 0.5 g/bhp-hr rate.

Table 6. Statewide Urban Bus Fleet Emission Inventory for 2006 Compared

to the Proposal

Calendar Year 2006: NOx

(tpd)

PM

(lbs/day)

Current Estimate (No Purchases) 17.7 450

Staff’s Proposal 17.4 440

Emission Benefit 0.3 10

Staff expects there to be a very small, unquantifiable effect from the reduction in

ZEBs to be demonstrated.

2. Cost-Effectiveness of Proposed Regulation

The estimated cost-effectiveness of the original transit agency regulation was

detailed in the December 1999 Initial Statement of Reasons (ARB 1999). Staff

determined the cost-effectiveness of the engine emission standards and zeroemission bus purchase requirements to be about $1.80/lb of NOx in 2010 and

$1.50/lb in 2020. This proposal does not change the expected cost-effectiveness

determined at that time. As explained elsewhere, these proposed amendments

provide transit agencies with the option to purchase diesel HEBs 2004 through

2006. These rules are not a mandate to purchase and thus impose no additional

cost on transit agencies. In addition, staff’s proposal cuts the number of ZEBs

demonstrated by one-half and extends the time, thus spreading out the cost over

a longer time period.

B. Potential Negative Impacts

Staff does not expect any negative impacts from this proposal.

X. ISSUES

Over the course of development of this proposal, staff has met many times with

various stakeholders and received written and verbal comments. Although staff

has considered each comment, not all issues could be resolved. Following is a

discussion of major outstanding issues.

A. HEBs Should Receive a NOx Emission Reduction of Greater Than 25

Percent from the Engine Certification Value.

Studies have indicated that HEBs have NOx emission reductions on the order of

50 percent lower than conventional transit buses. However, as seen in light-duty
26

hybrid-electric vehicles, hybrid-electric drive systems can be designed to

maximize specific attributes such as fuel economy or emission reductions.

Without emissions test data on a specific system, it is appropriate to be

conservative in assigning emission benefits. Manufacturers are permitted to

demonstrate a greater NOx emission benefit for a HEB by using the hybridelectric drive system test procedures in the interim certification procedures. They

will receive the benefit of any demonstrated reduction. Therefore, staff believes

the current NOx emission reduction allowed for interim certification of HEBs

through engine certification alone is appropriate.

B. HEBs Should Not be Required to Meet Urban Bus Engine Durability

Conventional urban bus engines are required to meet a useful life of 12 years or

435,000 miles. This is both a California and a federal requirement. As

previously discussed, hybrid system manufacturers often utilize smaller mediumheavy-duty engines as part of their systems to take advantage of the improved

fuel economy of the smaller engine. These smaller engines have been

demonstrated to meet durability requirements for only 185,000 miles.

For model years 2004 through 2006, the ARB has implemented interim hybrid

certification procedures, which provide flexibility and options for the developing

hybrid industry. One of the options the ARB has permitted is for a manufacturer

to claim a 25 percent NOx benefit from the engine certification value without

conducting any additional emissions testing. Under this option, however, hybridelectric drive system manufacturers may not simply utilize any engine. Instead,

manufacturers must use an engine already certified to the urban bus emission

standards and useful life requirement.

Some manufacturers have requested that this option should be expanded to

allow them to use the smaller medium-heavy-duty engines, which are not

currently certified as an urban bus engine. Staff agrees some balance is

necessary in assisting markets to develop for new technologies, especially when

the hybrid drivetrain or hybrid bus manufacturer is the party seeking the

certification. Rather than certify hybrid drive systems or buses without any

demonstration of durability, as some have requested, staff has already provided

that the demonstration of durability of the system or bus may be limited to

150,000 miles, through the 2006 model year. Further, certification staff will work

with the applicant to assure exiting data are used whenever possible to further

reduce the time and cost of certification.
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C. HEBs Should be Allowed to Meet the PM Emission Standard with an

ARB-Verified Aftertreatment Device.

The currently available diesel HEBs meet the federal 2004 PM emission standard

of 0.05 g/bhp-hr. Hybrid-electric drive system manufacturers have indicated an

interest in meeting the California PM emission standard of 0.01 g/bhp-hr through

the use of a verified particulate filter on an engine not certified to the California

urban bus emission standards. An engine manufacturer may include a verified

particulate filter (verified following California’s verification procedures) on a

California certified engine by submitting additional testing data and a justification

for use. However, California engine certification procedures do not allow a third

party to add an aftertreatment device to meet California emission standards.

This ensures that the end-user has a durable, reliable product that the

manufacturer has warranted.

Alternatively, a manufacturer may certify the hybrid-electric drive system using

one-party certification of the hybrid-electric drive system instead of engine

certification. With one-party certification, the hybrid-electric drive system as a

package must meet urban bus emission standards, but the certified engine

incorporated into the hybrid-electric drive system is not required to meet the

urban bus emission standards. In this case, the manufacturer could apply an

aftertreatment system to a truck engine, but still would be required to warrant the

device as part of the hybrid-electric drive system.

XI. SUMMARY AND STAFF RECOMMENDATION

A. Summary of Staff’s Proposal

As presented in the previous sections, the ARB staff’s proposal is designed to

continue its commitment to innovative technology by removing barriers to

California’s market place. ARB staff acknowledges that the 2000 rulemaking is a

“technology-forcing” regulation. As a result, technology is not always able to

keep up. Staff does not want to hold our working partners in violation of our

regulations when all feasible efforts are being made. The staff’s proposal

includes the following:

• Add a 2004–2006 engine exhaust emission standard of 1.8 g/bhp-hr NOx

and 0.01 g/bhp-hr PM for diesel HEBs;

• Add emission reduction requirements to the fleet rule for transit agencies

for the purchase of diesel HEBs;

• Modify the zero-emission bus demonstration project.
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B. Staff Recommendation

ARB staff recommends the Board adopt the proposed modifications to sections

1956.1, 1956.2, 1956.3 and 1956.4, title 13, chapter 1, article 4, CCR, in its

entirety. The regulation is set forth in the proposed regulation order in Appendix

A.

XII. REFERENCES

ARB. December 10, 1999. Staff Report: Initial Statement of Reasons, Proposed

Regulation for a Public Transit Bus Fleet Rule and Emission Standards for New

Urban Buses. http://www.arb.ca.gov/regact/bus/bus.htm

ARB. June 30, 2000a. Neighborhood Assessment Program Work Plan.

http://www.arb.ca.gov/ch/programs/nap/napworkplan.pdf

ARB. December 8, 2000b. Final Statement of Reasons for Rulemaking, including

Summary of Comments and Agency Responses, Public Hearing to Consider

Adoption of a Public Transit Bus Fleet Rule and Emission Standards for New

Urban Buses. http://www.arb.ca.gov/regact/bus/bus.htm.

ARB. December 13, 2001. Policies and Actions for Environmental Justice.

http://www.arb.ca.gov/ch/ejpolicies_121301.pdf

ARB. September 6, 2002. Initial Statement of Reasons: Public Hearing To

Consider Amendments To The Public Transit Bus Fleet Rule And Emission

Standards For New Urban Buses. http://www.arb.ca.gov/regact/bus02/bus02.htm

ARB. October 16, 2003. Final Statement of Reasons for Rulemaking, including

Summary of Comments and Agency Responses, Public Hearing to Consider

Adoption of a Public Transit Bus Fleet Rule and Emission Standards for New

Urban Buses. http://www.arb.ca.gov/regact/bus02/bus02.htm.

U. S. EPA. January 19, 2001. Control of Air Pollution from New Motor Vehicles:

Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur

Control Requirements. Federal Register Volume 66, Number 12. Thursday,

January 18, 2001.

http://www.access.gpo.gov/nara/cfr/waisidx_03/40cfr86a_03.html