ZEV (Zero Emission Vehicle) States and Fuel Standards

Emissions from transportation is the single largest sector contributing to climate change in the U.S., and historically has had an interesting trajectory. Prior to 2005, U.S. vehicle miles traveled per capita increased annually because of the rise of the two-car family, increased participation of women in the labor force, and the rise of low-density suburbs. After 2005, transportation sector emissions fell 6.1 percent from their 2005 peak, but from 1990-2016, transportation sector emissions grew 21.5 percent because of population growth and low fuel prices. Here in North Carolina, overall CO2 emissions declined from their peak in 2005, but transportation emissions increased as an overall share of North Carolina’s economy-wide CO2 emissions.

What is most concerning, is the fact that when global emissions need to be going down, transportation emissions are on the rise, despite improvements in vehicle efficiency, mainly because emissions are more than offset by increased travel. That trend has paused due to the pandemic but as the electric power industry retires coal plants, the transportation sector must be the focus for overall carbon emission reductions.

Zero Emission Vehicle (ZEV) Memorandum of Understanding

To change that trajectory, many states have adopted goals for Zero Emission Vehicle (ZEV) Deployment.

ZEVs include three different types of vehicles:

· Plug in hybrid vehicles – characterized by a traditional gas-powered engine along with a battery that can be charged from the grid

· Electric vehicles – which run entirely on electricity and are recharged that way

· Hydrogen fuel cell vehicles – which run on electricity from a fuel cell with hydrogen gas

The ZEV requirements are designed to achieve long-term emission reduction goals by requiring auto manufacturers to offer for sale specific numbers of the very cleanest cars available. The ZEV regulation is a set of tailpipe regulations put in place to limit greenhouse gas emissions.

On October 24, 2013, the governors of eight states -- California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont -- (and later New Jersey and Maine) signed a memorandum of understanding (MOU) committing to action on their states’ zero-emission vehicle (ZEV) programs. Together, these states represent approximately one-third of the total car sales in the United States. Collectively, they have committed to having 3.3 million ZEVs or more on the roads by 2025.

The governors created a multi-state ZEV Program Implementation Task Force and called for the development of an action plan that was published in 2014. An updated plan was developed for 2018-2021 with focus on five key areas:

1. Raising consumer awareness and interest in electric vehicle technology through consumer education, outreach, and advertising campaigns (e.g. Drive Change. Drive Electric);

2. Building out a reliable and convenient charging infrastructure network to help enable the transition to widespread adoption of electric vehicles;

3. Continuing and improving access to consumer purchase and non-financial incentives;

4. Expanding the number of ZEVs in public and private sector fleets; and,

5. Supporting dealership efforts to increase ZEV sales.

More States Join

For a long time, these were the only states with a ZEV mandate but the numbers have increased since 2018. Part of the impetus came from opposition from an action by the Trump administration. In the Spring of 2020, President Trump dramatically reduced fuel-efficiency standards by limiting the increase from 5 percent annually (introduced in 2012 by then President Obama) to only increase by 1.5 percent each year through the model year 2026. This strategy led to more states joining as ZEV states.

In fact, ZEV states could soon govern emissions rules for a bigger part of the American auto market than the U.S. Environmental Protection Agency.[1] Some states merely have their adoption dates on hold during the COVID-19 pandemic such as Ohio. Nevada became the latest to join the ranks of ZEV states along with Minnesota, New Mexico, Colorado, and Nevada, bringing the total ZEV states to the low twenties.

What Does This All Mean?

Zero emission vehicles (ZEV) are clearly a focus for almost half of the U.S. states. States are showing support for environmental benefits and the technology is much more widely accepted. Of note, even Uber announced a year or so ago that it would offer incentives for drivers with EVs.

What is noticeably absent, though, is the fact that there are no Southeastern states that have joined as a ZEV state. Governor Roy Cooper’s ZEV plan advocates for 80,000 ZEVs by 2025. Despite that seemingly large goal, information from the Energy Information Administration, Bloomberg New Energy Finance, and Synpase Energy Economics (using the EV-REDI model), there may be 190,000 EVs on the road by 2025 in North Carolina based on business as usual activity.

In conclusion, we may see business as usual moving toward ZEVs, but a ZEV mandate is still the where most of the states are headed. ZEVs have other obvious benefits beyond just the climate benefits, including diversifying our fuel away from oil and the little to no maintenance requirements for the vehicles themselves. One year from now we are hopeful to add even more states to the list of ZEV states.

[1] The Clean Air Act allows other states to adopt California’s motor vehicle emission standards under section 177. Section 177 requires, among other things, that such standards be identical to the California standards for which a waiver has been granted. States are not required to seek EPA approval under the terms of section 177.