Document ID: EPA-HQ-OAR-2004-0437-0017
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-11-24T05:00Z

Proposed
Amendments
to
the
Zero
Emission
Vehicle
Regulation
March
27­
28,
2003
2
Overview
°
Background
°
Description
of
proposed
changes
°
Summary
and
staff
recommendation
3
Background
°
Overview
of
regulation
°
Program
goals
°
Program
achievements
°
Why
are
amendments
needed?

°
Staff
objectives
4
6
%
PZEV
10
%
Mandate
2
%
AT­
PZEV
2
%

2
%
ZEV
Overview
of
Regulation
5
ZEV
Program
Categories
Category
Typical
Vehicles
Gold
Battery
EV,
hydrogen
fuel
cell
Silver
CNG,
hybrid,
hydrogen
ICE,

grid
connect
hybrid,

methanol
fuel
cell
Bronze
Extremely
clean
gasoline
ICE
6
Program
Goals
°
Achieve
significant
air
quality
benefits
°
Push
research,
development
and
deployment
of
zero
emission
vehicles
°
Encourage
ZEV
commercialization
through
introduction
of
ZEV­
enabling
technology
7
Program
Achievements
°
ZEV
program
has
resulted
in
 
Significant
efforts
to
advance
battery
technology
 
More
than
2,500
battery
electric
vehicles
leased
or
sold
in
California
 
Ten
near­
zero
emission
PZEV
models
currently
certified
 
Three
hybrid
electric
vehicles
on
sale,

others
announced
 
Air
quality
benefit
8
°
Membership
°
Goals
°
Vehicles
California
Fuel
Cell
Partnership
9
Other
Developments
°
Freedom
CAR
°
National
and
international
commitment
to
ZEV
technology
10
Why
Are
Amendments
Needed?

°
Address
legal
challenges
°
Align
requirements
with
technology
and
market
status
11
Address
Legal
Challenges
°
Federal
preemption
lawsuit
 
Preliminary
injunction
issued
June
2002
 
Appeal
argued
February
2003
°
First
state
court
lawsuit
°
Second
state
court
lawsuit
12
Technology
Status­­
BEV
°
2001
Biennial
Review
showed
incremental
cost
of
$
7k­$
9k
for
full
function
EV
battery
pack,
in
volume
production
°
Recent
advances
in
cycle
life,
but
fundamental
cost
challenges
remain
°
Sustainable
demand
in
near
term
appears
to
be
small
°
Major
manufacturers
have
ceased
production
13
Technology
Status­­
Fuel
Cell
°
Technology
shows
great
promise,
and
manufacturers
appear
to
see
business
case
°
Significant
cost,
manufacturing
and
performance
challenges
°
Not
ready
for
volume
production
14
ZEV
Status­­
Overview
°
Development
needed
before
any
ZEV
technology
ready
for
mass
deployment
°
2001
requirements
too
ambitious
 
Force
BEV
production
regardless
of
perceived
long
term
prospects
 
Dilute
manufacturer
efforts
°
Pace
of
future
development
difficult
to
predict
15
Technology
Status­­
AT
PZEV
°
CNG
vehicles
in
commercial
production
°
Three
HEVs
on
market,
others
announced
 
Not
yet
AT
PZEV,
but
future
versions
expected
to
qualify
°
Hydrogen
ICE
vehicles
demonstrated
°
Plug
in
hybrid
vehicles
being
studied
16
Technology
Status­­
PZEV
°
10
models
certified
°
About
140,000
expected
to
be
sold
in
model
year
2003
17
Staff
Objectives
°
Restart
program
 
Take
advantage
of
technologies
in
showrooms
today
 
Capture
air
quality
benefits!

 
Build
manufacturing
and
supplier
base
for
pure
ZEV
technologies
18
Staff
Objectives
°
Avoid
mismatch
between
program
requirements
and
technology
status
°
Recognize
successful
compliance
under
2001
rules
°
Provide
compliance
pathway
for
aggressive
pursuit
of
fuel
cell
commercialization
19
Summary
of
Proposed
Amendments:

History
°
Strawman
proposal,
November
2002
°
Public
workshop,
December
2002
°
Initial
Statement
of
Reasons,

January
10,
2003
°
Staff's
additional
proposed
modifications,
March
5,
2003
20
Summary
of
Proposed
Amendments:

Overview
°
Program
start
°
Category
percentages
°
Credit
calculations
°
Early
production
incentives
°
Clarifying
and
balancing
amendments
21
Summary
of
Proposed
Amendments:

Program
Start
Date
°
Program
start
in
2005
instead
of
2003
°
Earliest
practical
start
date
°
Allows
adequate
lead
time
°
Pick
up
from
2001
Amendments
22
Summary
of
Proposed
Amendments:

Two
Paths
°
Base
Path
°
Alternative
Compliance
Path
23
6
%
PZEV
10
%
Mandate
2
%
AT
PZEV
2
%

2
%
ZEV
Overview
of
Regulation
24
Percentage
Requirement
0
2
4
6
8
10
12
14
16
18
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2016
2017
2018
Gold
Silver
Bronze
25
Summary
of
Proposed
Amendments:

Base
Path
°
Preserve
2001
regulation
structure
°
Percentage
ZEV
requirements
 
2
%
Gold
 
2
%
Silver
 
6
%
Bronze
°
Allow
use
of
banked
credits
 
Some
manufacturers
able
to
comply
with
banked
credits
through
2008
and
may
use
base
path
26
Summary
of
Proposed
Amendments:

Alternative
Compliance
Path
°
Market
share
of
250
type
III
ZEVs
(
fuel
cell
vehicles)
placed
between
2001
and
2008
°
Remaining
gold
obligation
may
be
met
with
silver
°
Post
2008
requirement
to
be
determined
27
Manufacturer
Market
Share
of
250
Type
III
(
fuel
cell
vehicle)
ZEVs
51
17
17
48
57
62
Ford
Nissan
DaimlerChrysler
Honda
Toyota
General
Motors
28
Summary
of
Proposed
Amendments:

Independent
Expert
Review
Panel
°
Independent
experts
°
Assess
ZEV
technologies
 
Fuel
cell
and
battery
 
Technology
readiness
 
Market
readiness
°
California
Fuel
Cell
Partnership
a
key
resource
29
Summary
of
Proposed
Amendments:

Independent
Expert
Review
Panel
°
Report
to
the
Board
prior
to
setting
post­
2008
ZEV
requirements
°
Provide
Board
with
data
necessary
to
define
future
ZEV
requirement
30
Summary
of
Proposed
Amendments:

Credit
Calculation
°
Credit
calculations
 
ZEVs
 
AT
PZEVs
31
Summary
of
Proposed
Amendments:

Proposed
Changes
to
ZEV
Credit
°
Remove
efficiency
multiplier
°
Create
categories
of
ZEV
types
 
NEV,
Type
0,
Type
I,
Type
II,
Type
III
°
Simplified
calculation
°
Adjust
credit
levels
over
time
32
Summary
of
Proposed
Amendments:

ZEV
Types
ZEV
Types
NEV
Type
I
T
y
p
e
II
T
y
p
e
III
Type
0
?
33
Summary
of
Proposed
Amendments:

ZEV
Credit
Calculation
3
4
4
4
40
40
40
40
40
40
Type
3
(
Fuel
Cell)
3
3
3
3
7
10
10
12
12
12
Type
2
(
FF
EV)
2
2
2
2
5
7
7
8
8
8
Type
1
(
City
EV)
1
1
1
1
1.5
1.5
1.5
1.5
1.5
1.5
Type
0
(
Utility)
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.625
0.625
1.25
NEV
2012+

2011
2010
2009
2008
2007
2006
2005
2004
2003
Tier
Stage
III
Stage
II
Stage
I
34
Summary
of
Proposed
Amendments:

Anatomy
of
AT
PZEV
Credit
°
AT­
PZEVs
earn
PZEV
base
credit
of
0.2
plus:

 
Zero
Emission
Range
(
ZER)
credit
 
Advanced
ZEV
Componentry
credit
 
Low
Fuel
Cycle
Emissions
credit
°
Staff
proposes
modifications
to
all
three
of
these
AT
PZEV
components
35
Summary
of
Proposed
Amendments:

HEV
Advanced
ZEV
Componentry
Credit
°
In
2001
amendments,
HEVs
treated
according
to
 
CO2
reduction,

 
Percent
Peak
Power,
or
 
Efficiency
°
Proposed
amendments
credit
based
only
on
the
electric
drive
system
 
Voltage,

 
Peak
power,
and
 
ZEV­
like
attributes
36
Summary
of
Proposed
Amendments:

HEV
Advanced
Componentry
Credit
Low
Voltage/

Low
Power
HEV
High
Voltage
HEV
High
Voltage/

High
Power
HEV
Drive
System
Voltage
Low
High
High
Drive
System
Min.
Peak
Power
4
kW
10
kW
50
kW
Traction
Drive
Boost
Yes
Yes
Yes
Regenerative
Braking
Yes
Yes
Yes
Idle
Stop/
Start
Yes
Yes
Yes
MY
'
05
 
'
07
AT
Credit
0
0.4
0.5
Total
ATPZEV
Credit
0.2
0.6
0.7
37
Summary
of
Proposed
Amendments:

Other
Proposed
ATPZEV
Modifications
°
Zero
Emission
Range
 
Method
of
calculation
changed
 
Maximum
credit
capped
at
1.5
°
Advanced
Componentry
 
May
be
combined
with
ZER
 
H2
storage
increased
from
0.2
to
0.3
 
Bi­
Fuel
CNG/
H2
now
earns
same
as
H2
 
Battery
warranty
requirement
reduced
°
Low
Fuel
Cycle
Emissions
 
Increased
maximum
credit
from
0.2
to
0.3
38
Summary
of
Proposed
Amendments:

Credit
for
CNG
Vehicles
Base
Zero
Emissions
Range
Advanced
Componentry
LFCE
TOTAL
2001
Amendments
CNG
0.2
N/
A
0.1
0.2
0.5
Proposed
CNG
0.2
N/
A
0.2
0.3
0.7
39
Summary
of
Proposed
Amendments:

Credit
for
Hydrogen
ICE
Base
Zero
Emissions
Range
Advanced
Componentry
LFCE
TOTAL
2001
Amendments
H2
ICE
0.2
1.0
N/
A
0.2
1.4
Proposed
H2
ICE
0.2
1.5
0.3
0.3
2.3
Proposed
H2ICE
HEV
(
Ford
Model
"
U")
0.2
1.5
0.7
0.3
2.7
40
Summary
of
Proposed
Amendments:

Credit
for
Plug­
In
HEVs
Base
Zero
Emissions
Range
Advanced
Componentry
LFCE
TOTAL
2001
Amendments
P20
HEV
0.2
0.6
N/
A
0.1
0.9
Proposed
P20
HEV
0.2
1.25
0.5
0.12
2.1
41
Summary
of
Proposed
Amendments:

Overall
AT­
PZEV
Credits
0
2
4
6
8
10
12
14
16
18
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Model
Year
Possible
Credit
Hydrogen
Internal
Combustion
Hybrid
Electric
Vehicle
Grid
Hybrid
with
60
miles
range
Indirect
Methanol
Fuel
Cell
Vehicle
Hydrogen
Internal
Combustion
Engine
Vehicle
Grid
Hybrid
with
20
miles
range
Compressed
Natural
Gas
Hybrid
Electric
Vehicle
Compressed
Natural
Gas
Vehicle
High
Voltage,
High
Power
Hybrid
Electric
Vehicle
High
Voltage
Hybrid
Electric
Vehicle
Low
Voltage
Hybrid
Electric
Vehicle
42
Summary
of
Proposed
Amendments:

Early
Production
Incentives
°
Incentivize
manufacturers
to
maximize
PZEV
production
°
"
Excess"
PZEVs
produced
in
2003
and
2004
can
be
used
for
silver
category
until
2006
43
Summary
of
Proposed
Amendments:

Clarifying
and
Balancing
Amendments
°
Section
177
(
travel)
provision
°
Addition
of
LDT
2
°
Transportation
system
credit
°
Placed
in
service
date
°
Banked
NEV
credit
cap
°
Severability
44
Summary
of
Proposed
Amendments:

Section
177
(
travel)
provision
°
Other
states
able
to
adopt
LEV/
ZEV
regulations
°
Result:
Increases
automaker
obligation
by
1.7
X
°
Provision
proposed:

 
Allow
Type
III
ZEVs
placed
in
any
ZEV
state
to
count
towards
compliance
MA
NY
45
Summary
of
Proposed
Amendments:

Inclusion
of
LDT
2
volumes
°
Board
directed
staff
to
include
LDT
2
in
2001
°
Issues
regarding
notice
requirements
have
been
raised
°
Asking
the
Board
to
reaffirm
the
inclusion
of
LDT
2
volumes
46
Summary
of
Proposed
Amendments:

Transportation
system
credit
°
Additional
credit
awarded
for
ZEVs
placed
in
transportation
systems
°
2001
Amendments:
Sunset
credit
in
2008
°
Proposed
Amendments:

Extend
credit
to
2011
47
Summary
of
Proposed
Amendments:

Placed
in
service
date
°
Applies
to
application
of
early
introduction
credits
°
September
30,
2003
for
model
year
2002
vehicles
°
June
30
for
subsequent
model
years
48
Summary
of
Proposed
Amendments:

Banked
NEV
credit
cap
°
2001
Amendments:
Banked
NEV
credit
cap
applied
to
gold,
silver
and
bronze
°
Proposed
Amendments:
Banked
NEV
credit
cap
applied
to
gold
and
silver
°
Banked
NEV
Credit
Cap:

 
Up
to
75
%
of
obligation
may
be
met
with
banked
NEV
credit
 
2006
gold,
2009
silver
 
Up
to
50
%
of
obligation
may
be
met
with
banked
NEV
credit
 
2007
gold,
2010
silver
49
Severability
°
Background
 
Severability
clause
expresses
intent
that
if
one
element
of
regulation
is
invalidated,

the
remainder
can
still
be
enforced
 
Relevant
to
key
question
before
court­­
what
would
agency
have
done
if
precluded
from
adopting
invalid
provision?

 
No
severability
clause
in
2001
amendments
50
Severability
°
Federal
trial
court
held
that
AT
PZEV
provisions
for
HEVs
were
not
severable
 
Unclear
to
court
whether
Board
would
have
proceeded
with
regulation
if
regulation
did
not
result
in
improved
fuel
economy
 
AT
PZEV
provisions
critical
to
intended
reduction
in
number
of
pure
ZEVs
51
Severability
°
Proposed
regulation
amendments
contain
both
general
severability
clause
and
additional
clause
specifically
addressing
AT
PZEV
provisions
on
hybrids
°
Proposed
resolution
contains
finding
that
if
AT
PZEV
provisions
on
hybrids
or
alternative
compliance
path
are
found
preempted,
Board
chooses
to
enforce
remainder
of
2003
amendments
rather
than
fall
back
on
current
ZEV
regulation
when
enforcement
has
been
enjoined
52
Summary
and
Staff
Recommendation
°
Effects
of
proposed
changes
 
Number
of
vehicles
 
Air
quality
°
Major
issues
°
Staff
recommendation
53
Number
of
Vehicles
°
Not
possible
to
provide
firm
estimates
 
Program
provides
great
flexibility
 
Post­
2008
ZEV
requirement
under
alternative
compliance
option
to
be
determined
°
Overall
effect
 
Reduce
number
of
ZEVs
and
increase
number
of
AT
PZEVs
 
PZEV
totals
not
significantly
affected
54
Number
of
Clean
Vehicles
(
ZEVs
plus
AT
PZEVs
plus
PZEVs)

0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2003
Revised
Staff
Proposal
2001
Regulation
55
Number
of
Vehicles­­
ZEVs
°
On
base
path
 
Requirement
is
2
percent
gold,
but
banked
credits
may
be
used
°
On
alternative
compliance
path
 
Total
(
for
all
manufacturers)
is
250
fuel
cell
vehicles
between
2001
and
2008
 
Production
level
for
2009
and
beyond
to
be
determined
by
Board
after
input
from
Independent
Expert
Review
Panel
56
Number
of
Vehicles­­
AT
PZEVs
°
In
near
term,
depends
on
manufacturer
capability
and
strategy
regarding
use
of
banked
credits
°
In
long
term,
AT
PZEV
total
will
change
in
response
to
ZEV
requirement
in
effect
at
that
time
57
AT
PZEVs­­
2003
vs.
2001
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
AT
PZEV
2003
Modified
Proposal
AT
PZEV
2001
Amendments
58
AT
PZEVs­­

Effect
of
ZEV
Requirement
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Fu
ll
u
se
o
f
silver
in
g
old
No
us
e
o
f
silver
in
go
ld
(
base
program)
59
Air
Quality
Impacts
ROG
NOx
Net
change
from
2001
amendments
2010
­
0.03
­
0.06
2020
­
0.04
­
0.17
Net
change
from
no
ZEV
program
2010
­
0.38
­
1.02
2020
­
3.28
­
2.23
°
Will
also
reduce
CO
and
air
toxics
60
Major
Issues
°
ZEV
requirement
under
alternative
compliance
option
in
MY
2009
and
beyond
°
Role
of
BEVs
°
Long
term
silver
production
levels
°
ZEV
credit
for
infrastructure
61
ZEV
Requirement
for
MY
2009
and
Beyond
°
Issue
 
ZEV
requirement
for
model
years
2009
and
beyond
under
alternative
compliance
option
is
"
to
be
determined",
following
input
from
Independent
Technical
Advisory
Panel
 
Staff
recommends
this
approach
because
timing
for
ramp
up
of
vehicle
production
is
difficult
to
predict
62
ZEV
Requirement
for
MY
2009
and
Beyond
°
Stakeholder
views­­
environmental
 
Long
term
technology­
forcing
goal
is
needed
to
promote
competition
to
achieve
the
next
generation
of
ZEV
technologies
 
Manufacturer
public
statements
predict
rapid
pace
of
development
63
ZEV
Requirement
for
MY
2009
and
Beyond
°
Stakeholder
views­­
automaker
 
Appropriate
goal
for
2009
timeframe
cannot
be
predicted
at
this
time
 
Overly
ambitious
goal
is
not
credible
and
if
enforced
will
waste
resources
64
ZEV
Requirement
for
MY
2009
and
Beyond
°
Options
 
Retain
staff
proposal
(
future
quantity
to
be
determined)

 
Continue
demonstration
level
requirement
(
e.
g.
250
vehicles)

 
Establish
higher
target
level
(
e.
g.
10
x
first
stage)
65
ZEV
Requirement
for
MY
2009
and
Beyond
°
Staff
response
 
To
achieve
commercialization,
a
ramp
up
must
occur
 
The
question
is
when
 
Staff
has
explained
rationale
for
our
approach,
but
recognizes
Board
may
wish
to
establish
a
firm
target
66
Role
of
BEVs
°
Issue
 
Manufacturers
must
build
Type
III
ZEVs
(
fuel
cells)
in
order
to
qualify
for
alternative
compliance
option
 
Should
proposal
allow
for
other
types
of
ZEVs?
67
Role
of
BEVs
°
Stakeholder
views
 
Proposed
requirement
does
not
provide
incentive
for
ongoing
development
of
BEV
technology
68
Role
of
BEVs
°
Options
 
Require
BEV
production
in
addition
to
fuel
cells
 
Allow
BEVs
to
meet
some
portion
of
required
minimum
production
requirement
69
Role
of
BEVs
°
Staff
response
 
Staff
recommends
that
BEVs
be
allowed
to
satisfy
portion
of
minimum
production
requirement
°
Should
be
option
rather
than
requirement
°
Keep
minimum
number
of
fuel
cells
(
e.
g.

one
half
of
obligation)

°
Set
appropriate
credit
ratio
70
Silver
Production
Levels
°
Issue
 
Long
term
silver
production
levels
will
vary
with
ZEV
requirement
 
If
ZEV
requirement
remains
at
low
levels,

silver
volumes
are
high
in
2012
and
beyond
 
Purpose
of
silver
category
is
to
push
design
improvement
and
cost
reduction
for
ZEV­
enabling
technologies
0
50
00
0
100000
150000
200000
250000
300000
350000
400000
450000
2
00
9
20
10
20
11
20
12
20
13
20
14
2
01
5
2
01
6
2
01
7
20
18
20
19
20
20
Full
u
se
o
f
s
ilve
r
in
g
o
ld
No
u
se
o
f
silve
r
in
g
o
ld
(
base
p
rogram
)
71
Silver
Production
Levels
°
Stakeholder
views­­
automaker
 
Long
term
silver
production
exceeds
what
is
necessary
to
achieve
design
improvement
and
economies
of
scale
 
Market
may
not
absorb
the
required
number
of
vehicles
72
Silver
Production
Levels
°
Stakeholder
views­­
environmental
 
High
volume
silver
production
needed
to
bring
down
ZEV
cost
 
Requirement
should
be
more
stringent,
not
less
73
Silver
Production
Levels
°
Options
 
Use
Independent
Expert
Review
Panel
to
assess
silver
technology
status
 
Amend
silver
requirement
74
Silver
Production
Levels
°
Staff
response
 
Levels
shown
in
staff
report
will
decline
as
ZEV
production
expands
 
Staff
recommends
that
long
term
silver
status
be
included
in
Independent
Expert
Review
Panel
review
°
Have
economies
of
scale
been
achieved?

°
Is
technology
optimized?

°
Does
additional
silver
production
contribute
to
ZEV
commercialization?
75
Credit
for
Infrastructure
°
Issue
 
Emerging
interest
in
"
smart
mobility
corridors"

 
ZEV
regulation
already
supports
some
aspects
(
clean
mobility,
station
cars)

 
Are
there
opportunities
for
further
synergy?
Credit:
ZEV
NET
76
Credit
for
Infrastructure
°
Stakeholder
views­­
automaker
 
Regulatory
structure
should
not
imply
that
infrastructure
is
manufacturer
responsibility
 
Some
indication
of
interest
if
properly
structured
77
Credit
for
Infrastructure
°
Stakeholder
views­­
environmental
 
Providing
option
increases
manufacturer
flexibility
and
helps
enable
ZEV
commercialization
78
Credit
for
Infrastructure
°
Options
 
Allow
ZEV
credit
for
placement
of
hydrogen
infrastructure
 
Explore
other
incentives
and
non­
regulatory
approaches
79
Credit
for
Infrastructure
°
Staff
response
 
Fruitful
area
to
investigate,
but
many
complex
issues
 
Staff
recommends
report
back
to
Board
in
three
months
80
Staff
Recommendation
°
Staff
recommends
approval
of
the
proposed
amendments
 
Increase
air
quality
benefit
 
Address
litigation
issues
 
Maintain
progress
towards
transforming
California's
vehicle
fleet
to
zero
emissions