Published June 2014

Client: Southern California Gas Company

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Executive Summary:

In February 2000, the California Air Resources Board adopted the Fleet Rule for Transit Agencies which includes a requirement that larger transit agencies begin to purchase buses with zero exhaust emissions (“zero emission buses”). This zero emission bus purchase requirement was originally scheduled to begin in 2008, but only after a demonstration phase in which participating transit agencies procured and successfully operated qualifying buses. This report covers two of the three technologies which, by regulation, qualify to meet the zero emission bus requirements, namely hydrogen fuel cells and electric batteries. The third technology, catenary electric buses, are not covered in this report.

The original April 2012 edition of this report was prepared upon completion of the initial round of zero emission bus demonstration projects and midway through a second demonstration. The intent of the second phase was to demonstrate zero emissions buses on a larger scale with the hope of eliminating the operational and financial challenges experienced during the initial demonstration. After an initial round of demonstration projects, fuel cell buses were approximately 4.5 times as expensive to purchase, only 15 percent as reliable and cost $4.60 per mile more to operate than a natural gas bus, which had become the standard technology in the South Coast Air Basin. The operational and financial challenges experienced during the initial demonstration prompted a delay in the purchase requirement schedule while the second advanced demonstration was implemented.

As a follow-up to the original edition of this report, the June 2014 edition has been prepared to incorporate the final results of the second round of advanced demonstration projects, which recently became available. In addition to evaluating the results, the June 2014 edition includes: updates to the technology and operational cost assumptions used in the model, revisions to the fuel pathway values, an assessment of the current state of fuel cell technology compared to recently released DOE/FTA cost and performance targets, and an analysis of additional hydrogen and electric fuel pathways.

The advanced demonstration placed twelve additional hydrogen fuel cell vehicles in California transit agencies between 2009 and 2011. Significant improvements were realized between the two demonstration phases. However, one year into the second phase, these buses are about 3.3 times more expensive to purchase, only 50 percent as reliable and cost $3.41 per mile more to operate than a natural gas bus. Despite significant progress towards commercial viability, the advanced demonstration still indicates that it will take many more years for zero emission buses to meet the operational needs of transit agencies with respect to reliability and cost effectiveness. In the meantime, the opportunity to encourage other promising technologies and to reduce smog-forming, toxic and greenhouse gas pollutants from transit operations is being missed, and the emission reductions which were supposed to begin in 2008 are not being realized.

While the development of zero emission technologies is an important goal, it is even more crucial to immediately reduce the exposure of transit-dependent Californians to the adverse public health impacts of poor urban air. As we wait for the maturation of these zero emission buses, other alternative fuel technologies can match or exceed the needed emission reductions at a cost that transit agencies can afford today. Not only are these options more cost effective than the current zero emission buses, they provide equivalent or even superior emission reductions when considering the well-to-wheel environmental impact.

Natural gas is already quite prevalent as a transit bus fuel and offers greater than 23 percent reduction in greenhouse gas emissions compared to diesel buses. For years, natural gas engines also typically produced 40 percent less oxides of nitrogen emissions than their diesel counterparts, and eliminate emissions of toxic diesel particulate. Hybrid technology, renewable natural gas and advanced after-treatment can further reduce oxides of nitrogen and greenhouse gas emissions from today’s transit buses. These are lower cost technologies that can provide near zero emission levels. This analysis suggests that there are other currently available strategies that can provide and exceed the total emission reduction benefit expected from the current zero emission bus regulation at a cost savings of up to 42 percent.

In order to obtain badly needed emission reductions sooner and to encourage the fuel neutral development of zero and near zero emission technologies, the California Air Resources Board should consider revising their technology forcing regulation and provide transit agencies greater flexibility to meet the net emissions reductions attributed to the zero emission bus purchase requirement. Transit agencies should be allowed to use whatever combination of technologies that best meets the operational, invested capital, and fiscal requirements of the subject transit agencies, while maintaining the integrity of their service and avoiding a degradation in the same.

Recommendation:

  • Implement an emissions reduction performance requirement on new purchases rather than requiring a specific technology; an example being:
    • 15 percent reduction of engine/vehicle NOx totals on all new vehicles.
    • Reduction of GHG totals on all new vehicles.
  • Continue advance demonstrations and analysis of zero and near zero technologies.
  • Modify the California Code of Regulations, Title 13, Sections 2023.1 – 2023.4 to include the option to use near zero technologies that provide equivalent or greater emission reductions than would result from the current regulations.
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