State of Green Business

California regulators pass major electric bus mandate

In a little over two decades, transit buses across California could be 100 percent-powered by zero-emissions technology, such as batteries or fuel cells. 

That's the goal of a first-of-its-kind rule, unanimously approved Friday by the California Air Resources Board (CARB), that says that when the state's transit agencies buy new buses they increasingly will need to purchase zero-emissions models. Starting in 2023, a quarter of purchased transit buses need to be zero emissions, and by 2029, 100 percent of new buses bought need to be zero emissions, under the new policy.

In other words, after 2029 California transit agencies no longer will be allowed to buy buses powered by fossil fuels such as diesel and natural gas. That's a big deal. 

Earthjustice Attorney Adrian Martinez called the passing of the rule (called the Innovative Clean Transit rule) "a watershed moment in the fight against deadly air pollution and climate change." The regulation has been under development for three years and is the first large mandate for 100 percent zero-emissions vehicles in the United States, said Martinez in an interview.

A handful of cities in California already have been buying, or planning to buy, electric buses, such as San Francisco, Los Angeles, Stockton and Pomona. The state already offers transit agencies various funding sources to help buy zero-emissions buses, and cities also can save money on diesel fuel costs by going electric. 

CARB said that 50 transit agencies already buy zero-emissions buses, and 16 transit agencies already have committed to having a zero-emissions fleet.

But the new rule combines those carrots with a stick. And the mandate will help the state much more rapidly transform its transit bus fleet to electric. 

California currently has 132 zero-emissions buses driving on its roads, and the new rule will boost that to 14,000 by 2040, wrote Martinez in a blog post.

The regulation also will give a substantial boost to companies such as Proterra and BYD that make electric buses. Proterra recently raised funding from Daimler and others to boost its manufacturing capacity. 

The state's smaller transit agencies likely will have a harder time navigating this shift to electric buses. But the state has ample funding sources, like from cap and trade and the gas tax, to offer subsidies for the transition and allows small agencies to be exempt from the standard until 2026. Smaller agencies also can request exemptions from the purchase standard under certain circumstances. 

Electric buses are still more expensive than their diesel counterparts, but as battery prices drop, EV buses are getting cheaper. Bloomberg New Energy Finance predicts that by 2040, 80 percent of the world's transit buses will be electric. 

California's aggressive climate policies often influence other states and countries. Martinez said he's hopeful that "California will spark a national trend that will transform public transit."

Kickstarting the electric bus market in California could also help grow the market for electric heavy-duty trucks, delivery vans and cargo handling vehicles. Such EV truck markets are still emerging and are led by small players. 

To reach its climate goals, California needs to rapidly curb emissions from transportation. Transportation is the largest contributor to greenhouse gas emissions in the state, and those emissions have been growing.

CARB says that the rule will reduce greenhouse gas emissions by 19 million metric tons of carbon dioxide equivalent between 2020 and 2050.