The transportation sector has been identified as the single largest US source of greenhouse gas (GHG) emissions, and continues to be an area of focus in the nation’s decarbonization efforts. Due to heavy-duty vehicles contributing the second largest amount of GHG emissions in the transportation sector, there has been a continued focus on increasing the use and integration of zero-emission heavy-duty vehicles. Three recent government agency actions seek to promote and accelerate the use of heavy-duty zero-emission vehicles, including those powered by hydrogen fuel cell technologies.
Under the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), funding, grants, and incentives have been earmarked for promoting the adoption of zero-emission technologies and the expansion of fueling infrastructure.
The Environmental Protection Agency (EPA) recently issued a request for current and comprehensive information on zero-emission technologies to support the development of funding programs under the Clean Heavy-Duty Vehicles Program created by the IRA, and the Federal Highway Administration (FWA) of the US Department of Transportation will soon be reviewing applications for grants under the Charging and Fueling Infrastructure Discretionary Grant Program created by the BIL.
Separately, EPA recently issued a proposal that would impose more stringent standards to reduce GHG emissions from heavy-duty vehicles in model years 2027 through 2032. The proposal contemplates the use and incorporation of a diverse range of technologies, including hydrogen fuel cell technologies, in a heavy-duty fleet.
The adoption of hydrogen fuel cell technologies for heavy-duty vehicles will depend in large part on the availability, cost, and performance of hydrogen fuel cell technologies and the expansion of the hydrogen refueling network.
However, these funding and grant opportunities and the proposed GHG emission standards strengthen the business case for the continued development of zero-emission technologies, including hydrogen fuel cell technologies, the use of these technologies in heavy-duty vehicles, and the expansion of the hydrogen refueling infrastructure.
Funding Under EPA Clean Heavy-Duty Vehicle Program
The IRA has established programs, such as the Clean Heavy-Duty Vehicles Program, to address climate change by reducing GHG emissions and improve the air quality through the use of zero-emission vehicles.
The Clean Heavy-Duty Vehicles Program directs EPA to award a total of $1 billion through grants and rebates to eligible recipients (e.g., states and municipalities) to replace existing heavy-duty vehicles with clean zero-emission vehicles and develop zero-emission vehicle infrastructure.
The eligible recipients, in turn, will contract with eligible contractors that can (1) sell, lease, license, or contract for service zero-emission vehicles or charging or other equipment needed to charge, fuel, or maintain zero-emission vehicles; or (2) arrange for financing for such a sale, lease, license, or contract for service.
The funding can be applied to up to 100% of the incremental costs of replacing an eligible heavy-duty vehicle with a zero-emission vehicle. It can also be used for other activities such as purchasing, installing, operating, and maintaining infrastructure needed to fuel or maintain zero-emission vehicles.
On May 8, 2023, EPA issued a request for information on the availability of zero-emission technologies in the heavy-duty vehicle sector. EPA seeks comments that detail the availability, market price, performance, reliability, and durability of zero-emission heavy-duty vehicles; the fueling infrastructure needs and availability for zero-emission technologies in the near term (i.e., one to three years); and whether the components of the systems are manufactured and/or assembled in the United States.
Comments received from stakeholders, which may include manufacturers, distributors, installers, and fleet operators, will help inform EPA as it determines the scope of and develops the funding programs.
Comments in response to EPA’s request for information are due by June 5, 2023.
Funding Under FWA Infrastructure Discretionary Grant Program
The BIL created the Charging and Fueling Infrastructure Discretionary Grant Program to deploy publicly accessible charging and fueling infrastructure and provides for $2.5 billion over five years for the program. At the end of March 2023, FWA issued a notice of funding opportunity to solicit applications for grants totaling up to $700 million to deploy charging and alternative fueling infrastructure projects.
Half of the $700 million is allocated for electric vehicle, hydrogen, propane, and natural gas fueling infrastructure located on public roads or in other publicly accessible locations, while the other half is allocated for charging and alternative fueling infrastructure located along designated alternative fuel corridors.
The application period for this initial funding closes on May 30, 2023, but additional funding is expected to be made available over the next three years.
EPA’s Proposed “Phase 3” GHG Standards
EPA recently proposed a new, more stringent set of GHG standards for heavy-duty vehicles for model years 2027 through 2032. The proposed standards are referred to as the “Phase 3” GHG standards and build off of the Phase 2 GHG standards issued in 2016 that apply to medium- and heavy-duty vehicles in model years 2021 through 2027.
The proposed Phase 3 GHG standards look to (1) impose emission standards applicable to model year 2027 heavy-duty vehicles that are more stringent that those finalized in the Phase 2 GHG standards and (2) introduce new standards applicable to vehicles in model years 2028 through 2032 that become more stringent with each model year. Heavy-duty vocational vehicles including delivery trucks, refuse haulers, and public utility trucks as well as tractors would be subject to these standards.
The proposed Phase 3 GHG standards are performance-based but do not mandate the use of a specific technology. Instead, they contemplate that a compliant fleet would be composed of a diverse range of technologies including hydrogen fuel cell technologies.
EPA has stated that the proposed Phase 3 GHG standards account for the current trends and projections of commercial development and availability of fuel cell technologies and vehicles in the near term as well as the expected decrease in the costs of the fuel cell stack and onboard hydrogen storage tanks.
EPA has also stated that it accounted for the monetary incentives that have been made available through the BIL and IRA. EPA projects that the proposed standards would avoid approximately 1.8 billion metric tons of GHG emissions from 2027 through 2055.
Comments on EPA’s proposed Phase 3 GHG standards are due by June 16, 2023.
Takeaways with Respect to Hydrogen Fuel Cell Technologies
These agency actions signal that hydrogen fuel cell technologies remain viable options and components of a heavy-duty vehicle fleet despite the issues and concerns that have been raised as impediments to their successful adoption and deployment.
These concerns include the stage of development of hydrogen fuel cell technologies, the current cost of hydrogen fuel cell technologies and resulting cost of hydrogen-fueled heavy-duty vehicles, the availability and projected expansion of the fueling infrastructure that is needed to support the deployment of hydrogen fuel cell vehicles, the availability of hydrogen supply, and regulatory uncertainties.
However, the funding opportunities, grant programs, and proposed GHG standards discussed above are expected to propel forward the continued development of hydrogen fuel cell technologies and fueling infrastructure.
In addition, some states have implemented strategies to accelerate the transition to zero-emission heavy-duty vehicles. For example, in 2020 California adopted the Advanced Clean Trucks program, which requires manufacturers that certify heavy-duty vehicles for sale in California to sell a certain percentage of zero-emission heavy-duty vehicles in California for each model year beginning with model year 2024.
Other states have also established targets to make all sales of new medium- and heavy-duty vehicles zero-emission vehicles by 2050 and an interim goal of making 30% of all sales of new medium- and heavy-duty vehicles being zero emission vehicles no later than 2030. More states are expected to adopt similar proposals that encourage the adoption of zero-emission vehicles, including those powered by hydrogen fuel cell technologies.