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California’s Landmark Clean Car Mandate: How It Works and What It Means

The first quotas for green vehicles in the largest car market could have broad national impact, but will there be enough consumer demand?

Feb 8, 2012
Los Angeles, Calif.

If all goes as planned, more than a million ultra-clean cars will be zipping around California in the next decade, a 30-fold increase from today, thanks to tough new rules recently approved by state regulators.

It's not the first time the nation has set its sights on the million-mark for green vehicles. In 2009 President Obama pledged to put a million plug-in cars on U.S. roads by 2015.

But the president had no regulatory muscle to try to enforce his goal. And three years later there are fewer than 20,000 all-electric and plug-ins in the U.S., says Plug-In America, a San Francisco advocacy group.

Undaunted, California believes its clean car ambitions will be easily met because 12 of the world's leading carmakers helped craft its new rules and because the industry has six years to begin complying with them. The program is the first in the nation to regulate the kinds of vehicles to be sold in a state auto market.

"These regulations were done in very close conversation with the automakers and are based on what they're capable of," David Clegern, a spokesperson for the California Air Resources Board (CARB), the influential state air agency behind the rules, told InsideClimate News. "We, and they, don't really see any reason that they wouldn't work."

On Jan. 27, after nearly four years of arduous bargaining with the auto industry and environmental groups, CARB unanimously approved rules that require 15 percent of cars sold in California to be all-electric, plug-in hybrid electric or hydrogen vehicles. Compliance begins with model year 2018. Full compliance is expected by 2025.

The regulations would bring the number of zero-emissions vehicles up to about 1.5 million in California, the largest U.S. car market. CARB also strengthened an existing regulation to cut tailpipe greenhouse gas emissions in half for gasoline-powered cars by 2025.

Together they mark "the biggest improvement in global-warming emissions from vehicles that we've ever seen," said Don Anair, a senior engineer at the nonprofit Union of Concerned Scientists, which helped shape the rules,in an interview.

Here's a primer that explains how California's newest clean car program is expected to work and the challenges it faces.

How, exactly, will the rules work?

Beginning with the 2018 model year for cars and light trucks, a dozen of the world's largest carmakers will be required to meet the regulations or purchase credits if they can't.

Clegern, the CARB spokesperson, said the work has already begun. A few years ago the agency started reviewing automakers' preliminary production plans, delivery projections and initial sales goals for the 2018-2025 model years.Using those projections, CARB set a mandatory, annual target for each manufacturer to increase its share of zero-emissions vehicles, a mix of plug-in hybrids, battery-electric and hydrogen cars.

Combined the 12 automakers will have to supply some 78,000 clean cars in the first year, with incremental increases every year for eight years. Clegern said CARB might have to adjust yearly targets to reflect changing consumer demand and carmaker projections.

The goal is to have 500,000 all-electric and hydrogen cars and 900,000plug-in hybrids cruising California roads by 2025.

Half of the automakers have a head start on compliance. The six leading U.S. and Japanese automakers—General Motors, Ford, Chrysler, Toyota, Nissan Motor and Honda—are already required to meet California's 2008 clean car standard, which requires them to sell 60,000 green vehicles from 2012 through 2014.

By 2018, CARB's regulations will extend to Japan's Mazda Motor, South Korea's Hyundai Motor and Kia Motors, as well as leading German carmakers Daimler, Volkswagen and BMW.

Will the rules affect conventional cars?

Yes, a second rule passed last month requires all new conventional cars to slash tailpipe greenhouse gases by 50 percent from current levels by 2025. The policy strengthens an existing CARB regulation and is in line with what the U.S. Environmental Protection Agency and Department of Transportation proposed in November for new cars nationwide.

What happens if carmakers miss their targets?

CARB allows automakers to earn credits if they overshoot their clean car goals in a given year or beat their fleet-wide greenhouse gas targets. If they miss a target they can apply credits without penalty, similar to rollover minutes in a cell phone plan. Another option is buy credits from smaller E.V. makers, which aren't required to meet the CARB targets but can get credits for selling cars in California.

The big manufacturers can also trade credits among themselves. Clegern said that carmakers, not CARB, will set the prices.

If an automaker fails to meet CARB's requirements the agency would levy a $5,000 fine per vehicle. But CARB doesn't anticipate issuing fines. "Because the auto industry has to plan so far in advance ... it's pretty unlikely that you're not going to be able to deliver the cars that you promise," Clegern said.

Do the rules mandate fueling stations, too?

Yes, the new standards include requirements to boost the number of "clean fuel outlets" across California. The focus will be on building hydrogen filling stations, since most E.V. drivers charge their batteries at home or in office parking lots, Clegern said. But that could change if demand picks up for public E.V. chargers.

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