Zero-Emission Vehicles Act of 2022
Bill: S.5263 | Sponsor: Sen. Merkley, Jeff (D-OR)
Policy area: Environmental Protection

Summary:
Zero-Emission Vehicles Act of 2022 or the ZEVs Act of 2022
This bill requires the Environmental Protection Agency (EPA) to establish a zero-emission passenger vehicle standard. Specifically, the bill sets a schedule for increasing the percentage of zero-emission vehicles a vehicle manufacturer delivers for sale, culminating in a requirement to sell only zero-emission vehicles from 2035 on. The bill also requires the EPA to establish a zero-emission vehicle credit program that approves one zero-emission vehicle credit for each zero-emission vehicle delivered for sale in the United States and partial credits for qualified electric vehicles based on the estimated proportion of the mileage driven on the battery.
Manufacturers that fail to meet the minimum required percentage of zero-emission vehicle sales must submit to the EPA a quantity of zero-emission vehicle credits sufficient to offset the excess.
Credits may also be sold, transferred, exchanged, or retired in certain circumstances.
The bill imposes civil penalties for the failure to comply with zero-emission vehicle credit standards, with collected penalties being deposited into the Highway Trust Fund. After 2035, the EPA must issue injunctions on the manufacture of passenger vehicles other than zero-emission vehicles.

To amend the Clean Air Act to create a national zero-emission vehicle 
                   standard, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Zero-Emission Vehicles Act of 2022'' 
or the ``ZEVs Act of 2022''.

SEC. 2. NATIONAL ZERO-EMISSION VEHICLE STANDARD.

    Part A of title II of the Clean Air Act (42 U.S.C. 7521 et seq.) is 
amended by adding at the end the following:

``SEC. 220. NATIONAL ZERO-EMISSION VEHICLE STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Base quantity of new passenger vehicles.--The term 
        `base quantity of new passenger vehicles' means the total 
        quantity of new passenger vehicles delivered for sale by a 
        vehicle manufacturer during the most recent model year.
            ``(2) Passenger vehicle.--The term `passenger vehicle' has 
        the meaning given the term `passenger motor vehicle' in section 
        32101 of title 49, United States Code.
            ``(3) Qualified electric vehicle.--The term `qualified 
        electric vehicle' means a passenger vehicle that is--
                    ``(A) a new clean vehicle (as defined in section 
                30D(d) of the Internal Revenue Code of 1986); or
                    ``(B) a new qualified fuel cell motor vehicle (as 
                defined in section 30B(b)(3) of the Internal Revenue 
                Code of 1986).
            ``(4) Retire.--The term `retire', with respect to a zero-
        emission vehicle credit, means to disqualify the zero-emission 
        vehicle credit for any subsequent use under this section, 
        including sale, transfer, exchange, or submission in 
        satisfaction of a compliance obligation.
            ``(5) Vehicle manufacturer.--
                    ``(A) In general.--The term `vehicle manufacturer' 
                means an entity that--
                            ``(i) engaged in the manufacturing of new 
                        passenger vehicles; and
                            ``(ii) sold not fewer than 100 new 
                        passenger vehicles to ultimate purchasers in 
                        the United States within the current or 
                        previous calendar year, either directly or 
                        through an affiliate, such as a dealer.
                    ``(B) Exclusions.--The term `vehicle manufacturer' 
                does not include--
                            ``(i) a motor vehicle parts supplier; or
                            ``(ii) a dealer.
            ``(6) Zero-emission vehicle.--The term `zero-emission 
        vehicle' means a passenger vehicle that produces zero exhaust 
        emissions of any criteria pollutant, precursor pollutant, or 
        greenhouse gas, other than water vapor, in any mode of 
        operation or condition, as determined by the Administrator.
    ``(b) Compliance.--For model year 2026 and each model year 
thereafter, each vehicle manufacturer shall meet the requirements of 
subsections (c) and (d) by submitting to the Administrator, not later 
than April 1 of the following calendar year, as applicable--
            ``(1) for a vehicle manufacturer that fails to meet the 
        minimum required percentage of zero-emission vehicle sales for 
        the applicable model year, as determined under subsection (c), 
        a quantity of zero-emission vehicle credits sufficient to 
        offset that excess, as determined by the Administrator; or
            ``(2) for a vehicle manufacturer that meets or exceeds the 
        minimum required percentage of zero-emission vehicle sales for 
        the applicable model year, as determined under subsection (c), 
        a certification of that compliance, as the Administrator 
        determines to be appropriate.
    ``(c) Minimum Required Annual Percentage of Zero-Emission Vehicle 
Credits.--For model years 2026 through 2035, in annual increments, the 
minimum annual percentage of the base quantity of new passenger 
vehicles of a vehicle manufacturer delivered for sale that are 
equivalent to zero-emission vehicles, based on the issuance of zero-
emission vehicle credits, shall be the applicable percentage specified 
in the following table:

  ``Minimum Required Annual Percentage of Zero-Emission Vehicle Credits
------------------------------------------------------------------------
                         Model Year                           Percentage
------------------------------------------------------------------------
2026.......................................................         35.0
2027.......................................................         43.0
2028.......................................................         51.0
2029.......................................................         59.0
2030.......................................................         68.0
2031.......................................................         76.0
2032.......................................................         82.0
2033.......................................................         88.0
2034.......................................................         94.0
2035.......................................................       100.0.
------------------------------------------------------------------------

    ``(d) Requirement for 2035 and Thereafter.--For model year 2035 and 
each model year thereafter, a vehicle manufacturer shall sell only 
zero-emission vehicles.
    ``(e) Zero-Emission Vehicle Credits.--
            ``(1) In general.--A vehicle manufacturer may satisfy the 
        requirements of subsection (b) through the submission of zero-
        emission vehicle credits--
                    ``(A) issued to the vehicle manufacturer under 
                subsection (f); or
                    ``(B) obtained by purchase, transfer, or exchange 
                under subsection (g).
            ``(2) Limitation.--A zero-emission vehicle credit may be 
        counted toward compliance with subsection (b) only once.
    ``(f) Issuance of Zero-Emission Vehicle Credits.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of this section, the Administrator shall establish by 
        rule a program--
                    ``(A) to verify and issue zero-emission vehicle 
                credits to vehicle manufacturers;
                    ``(B) to track the sale, transfer, exchange, carry 
                over, and retirement of zero-emission vehicle credits; 
                and
                    ``(C) to enforce the requirements of this section.
            ``(2) Application.--
                    ``(A) In general.--A vehicle manufacturer that 
                delivered for sale, either directly or through an 
                affiliate, such as a dealer, a new zero-emission 
                vehicle or a qualified electric vehicle in the United 
                States may apply to the Administrator for the issuance 
                of a zero-emission vehicle credit.
                    ``(B) Eligibility.--To be eligible for the issuance 
                of a zero-emission vehicle credit, a vehicle 
                manufacturer shall demonstrate to the Administrator 
                that the vehicle manufacturer delivered for sale 1 or 
                more zero-emission vehicles or qualified electric 
                vehicles in the previous model year.
                    ``(C) Contents.--The application shall indicate--
                            ``(i) the type of zero-emission vehicle or 
                        qualified electric vehicle that was delivered 
                        for sale;
                            ``(ii) the State in which the zero-emission 
                        vehicle or qualified electric vehicle was 
                        delivered for sale; and
                            ``(iii) any other information determined to 
                        be appropriate by the Administrator.
                    ``(D) Aggregation.--An application for a zero-
                emission vehicle credit under subparagraph (A) may 
                aggregate information on all zero-emission vehicles and 
                qualified electric vehicles delivered for sale by the 
                vehicle manufacturer in the applicable model year.
            ``(3) Quantity of zero-emission vehicle credits.--
                    ``(A) Zero-emission vehicles.--The Administrator 
                shall issue to a vehicle manufacturer the application 
                under paragraph (2) of which is approved 1 zero-
                emission vehicle credit for each zero-emission vehicle 
                delivered for sale in the United States.
                    ``(B) Qualified electric vehicles.--For a qualified 
                electric vehicle delivered for sale by a vehicle 
                manufacturer the application under paragraph (2) of 
                which is approved, the Administrator shall issue a 
                partial zero-emission vehicle credit based on the 
                estimated proportion of the mileage driven--
                            ``(i) with respect to a qualified electric 
                        vehicle described in subsection (a)(3)(A), on 
                        the battery of the qualified electric vehicle, 
                        as determined by the Administrator; and
                            ``(ii) with respect to a qualified electric 
                        vehicle described in subsection (a)(3)(B), on 
                        hydrogen that is produced through a process 
                        that results in a lifecycle greenhouse gas 
                        emissions (as defined in section 45V(c) of the 
                        Internal Revenue Code of 1986) rate of less 
                        than 0.45 kilograms of carbon dioxide-
                        equivalent per kilogram of hydrogen, as 
                        determined by the Administrator.
                    ``(C) Credit banking.--A zero-emission vehicle 
                credit issued for any model year that is not submitted 
                to comply with the minimum annual percentage of zero-
                emission vehicles under subsection (c) during that 
                model year may be carried forward for use pursuant to 
                subsection (b)(1) within the next 5 years, but not 
                later than model year 2035.
    ``(g) Zero-Emission Vehicle Credit Trading.--
            ``(1) In general.--A zero-emission vehicle credit for any 
        model year before 2035 that is not submitted to the 
        Administrator to comply with the minimum annual percentage of 
        zero-emission vehicles under subsection (c) for that model year 
        may be sold, transferred, or exchanged by the vehicle 
        manufacturer to which the credit is issued or by any other 
        entity that acquires the zero-emission vehicle credit.
            ``(2) Delegation.--
                    ``(A) In general.--The Administrator may delegate 
                to an appropriate market-making entity the 
                administration of a national tradeable zero-emission 
                vehicle credit market for purposes of creating a 
                transparent national market for the sale or trade of 
                zero-emission vehicle credits.
                    ``(B) Public report.--If the Administrator makes a 
                delegation under subparagraph (A), the entity to which 
                the Administrator made the delegation shall annually 
                submit to Congress and make available to the public a 
                report describing the status of the zero-emission 
                vehicle credit market.
    ``(h) Zero-Emission Vehicle Credit Retirement.--
            ``(1) In general.--Any entity that obtains legal rights to 
        a zero-emission vehicle credit may retire the zero-emission 
        vehicle credit in any model year.
            ``(2) Use of retired zero-emission vehicle credit.--A zero-
        emission vehicle credit retired under paragraph (1) may not be 
        used for compliance with subsection (b) in--
                    ``(A) the model year in which the zero-emission 
                vehicle credit is retired; or
                    ``(B) any subsequent model year.
    ``(i) Information Collection.--The Administrator may collect the 
information necessary to verify and audit--
            ``(1) the model year sales of passenger vehicles of any 
        vehicle manufacturer;
            ``(2) a zero-emission vehicle credit submitted by a vehicle 
        manufacturer pursuant to subsection (b)(1);
            ``(3) the validity of a zero-emission vehicle credit 
        submitted for compliance by a vehicle manufacturer to the 
        Administrator; and
            ``(4) the quantity of passenger vehicles delivered for sale 
        in the United States of all vehicle manufacturers.
    ``(j) State Programs.--
            ``(1) In general.--Nothing in this section shall preempt 
        the authority of a State or political subdivision of a State to 
        adopt or enforce any law (including regulations) relating to 
        motor vehicles, including the authority to set standards for 
        motor vehicle emissions and zero-emission vehicle requirements 
        under section 177 and section 209.
            ``(2) Compliance with section.--No law or regulation of a 
        State or political subdivision of a State shall relieve any 
        vehicle manufacturer from compliance with any requirement 
        otherwise applicable under this section.
    ``(k) Sense of Congress.--It is the sense of Congress that vehicle 
manufacturers should diversify vehicle technologies and models to 
ensure consumer choice and access.
    ``(l) Regulations.--Not later than 540 days after the date of 
enactment of this section, the Administrator shall promulgate 
regulations to implement this section.
    ``(m) Enforcement.--
            ``(1) Civil penalty.--
                    ``(A) In general.--A vehicle manufacturer that 
                fails to comply with subsection (b) shall be liable for 
                a civil penalty, assessed by the Administrator, in an 
                amount that is equal to twice the average value of the 
                aggregate quantity of zero-emission vehicle credits 
                that the vehicle manufacturer failed to submit in 
                violation of that subsection, as determined by the 
                Administrator.
                    ``(B) Enforcement.--The Administrator shall assess 
                any civil penalty under subparagraph (A).
                    ``(C) Deposit.--With respect to any civil penalty 
                paid to the Administrator pursuant to subparagraph (A), 
                the Administrator shall deposit the amount into the 
                Highway Trust Fund established by section 9503(a) of 
                the Internal Revenue Code of 1986.
            ``(2) Injunction.--After model year 2035, the Administrator 
        shall issue an injunction on the manufacture of any passenger 
        vehicles other than zero-emission vehicles by a vehicle 
        manufacturer.''.
                                 <all>