THE CARL MOYER PROGRAM GUIDELINES PROPOSED REVISIONS 2005 WORKSHOP On-Road Controls Branch Mobile Source Control Division CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY Air Resources Board April 26 Long Beach April 29 Sacramento May 5 Modesto/Fresno

2 Today’s Agenda  History of the Carl Moyer Program  Overview of Program Changes  Schedule  Moyer Guidelines Modification Issues

3 Carl Moyer Program  Provides grants to offset the incremental cost of low-emission technologies  Early introduction of low-emission technologies –Accelerate old equipment turnover –Improve air quality

4 Carl Moyer Program Core Principles  A state and local partnership –ARB sets guidelines –Local districts receive applications, make grants, and monitor projects –District match funding: grants for Moyer-eligible projects, infrastructure, alternative diesel fuels  Emission reductions must be real, quantifiable, surplus, and enforceable  Environmental justice funding requirement

5 Carl Moyer Program Years 1-6  Incentive grants to reduce NOx emissions from heavy-duty diesel vehicles and equipment  PM target began in 2000  Total funding: $154 million  Engines funded: 7,000 (est.)  Emissions reduced: 18 tpd NOx; 1 tpd PM  Cost -effectiveness: <$3,000/ton of NOx

6 Funding by Project Type* *Preliminary estimate for Years 1-6

7 Carl Moyer Program – Year 7

8 Carl Moyer Program Changes  Increased and continued funding –Adjustment to Smog Check and tire fees through 2015 –Local districts authorized to increase motor vehicle registration surcharge by $2 for incentive programs  Program expansion –Add PM and ROG –Add light-duty vehicles –Add agricultural sources (HSC ) –Add fleet modernization program

9 On-going Incentive Funding  FY 04/05 (year 7) ~ $30.5 million  FY 05/06 (year 8 & subsequent years) –Air Resources Board: ~ $86 million for Moyer $61 million from Smog Check fees $25 million from tire fees (reduced to $16 million starting in 2007) –Air Districts: up to $55 million Local Boards may approve $2 increase in DMV Funds for Moyer projects, Low-Emission School Buses, light-duty scrap, and Agricultural Assistance Program

10 Schedule  Workshops on Moyer Guidelines Revision –First workshops -- Nov/Dec 2004 –Second workshops -- April/May 2005 –Third workshops -- late July 2005  Release Proposed Project Criteria -- July 2005  Release Proposed Guidelines -- Sept 2005  Proposed Guidelines to ARB -- Nov 2005

11 Issues

12 Issues  Program Implementation Improvements  Cost-Effectiveness  On-Road Heavy-Duty Vehicles  Fleet Modernization  Goods Movement -- Ports and Locomotives  Agricultural Projects  Light-Duty Incentive Programs  Other Issues

13 Program Implementation Improvements  Program Improvements  Small Businesses Accessibility  Engine Scrapping/Core Recycling  Zero-Emission Technologies  PM Retrofits on Repower Projects  Tier 1 Repower Projects for Off-Road Equipment

14 Program Improvements How can ARB and the local districts improve the efficiency of the Carl Moyer Program?  Evaluate “fast-tracking” projects  Statewide vouchers/rebate program –Ag pumps? –PM retrofits?

15 Small Businesses Should the guidelines be revised to expedite grants to small businesses?  Reduce application and processing time  Expedite fund disbursement  District set-aside for small business  ARB hold back for small business  Streamlined processing for small business  Rebates/vouchers for small business  Promote Moyer program in other languages

16 Engine Scrapping/Core Recycling  No statewide policy regarding engine scrapping under the Carl Moyer Program –Some districts require engine destruction; others do not –Certain engine cores have significant salvage value –Should ARB develop a statewide policy?

17 Engine Scrapping/Core Recycling  Issues –Air quality implications of engine core destruction versus re-use –Scrap engine or entire vehicle? All or just critical engine components? –Should cores be salvaged? Who gets compensation? Can used-core engines be sold in CA? –How to consider socio-economic impacts, energy use and potential market perturbations

18 Zero-Emission Technologies How can the Carl Moyer Program promote zero-emission technologies?  Increase outreach –Increase visibility –Increase promotion of zero-emission technologies  Modify guidelines –Increase priority for electrification projects

19 Other Improvement Issues  Require PM retrofit with all repowers –Obtain maximum NOx and PM reductions –New C/E formula would count PM emission reductions  Eliminate Tier 1 engine off-road repowers –Currently allow Tier 1 engines for off-road repower if Tier 2 or Tier 3 repower is technically infeasible, unsafe, or cost prohibitive –Do Tier 1 repowers extend the life of old technology, and slow the transition to the cleanest technology?

20 Program Implementation Improvement Discussion

21 Cost-Effectiveness Background  Current Moyer Guidelines –Emissions reduction based only on NOx –C/E = Annualized Cost / Annual Emission Reduction of NOx ($/ton)  New legislation directs ARB to develop new formula based on NOx, ROG, and PM –C/E = Annualized Cost / Annual Emission Reduction of (x NOx + y ROG + z PM)

22 Cost-Effectiveness Interim Formula  Cost Effectiveness ($/ton) = Annualized Cost NOx + ROG + PM nc + 10 x PM c Where: NOx= Annual NOx emissions (tpd) ROG = Annual ROG emissions (tpd) PM nc = Non-combustion PM (tpd) PM c = Combustion PM (tpd)  PM weighting based on diesel ATCM

23 Cost-Effectiveness Potential Weighting Factors  C/E of different regulations or programs –Moyer: $1,500 - $13,600/ton NOx –On-Road HDE regulations –Off-Road CI regulations –Off-Road LSI regulations –Diesel ATCMs  Health impacts –Ozone, Combustion PM/Non-combustion PM, PM 2.5 /Coarse PM or PM 10

24 Cost-Effectiveness Potential Weighting Factors (continued)  Exposure and risk data –Long-term exposure –Localized exposure –Sensitive communities  Socioeconomic indicators –Environmental justice

25 Cost-Effectiveness Discussion

26 On-Road Heavy-Duty Vehicles  On-road vehicles have received almost half of Carl Moyer Program funding –Typically travel many miles/year – provide a good opportunity for emission reductions –Often operate in urban areas where residents are exposed to higher levels of air pollution  Types of projects –New purchase (with low emission engine) –Repower (engine replacement) –Retrofit (add-on controls)

27 On-Road Heavy-Duty Vehicles  Issues –New regulations and impact on Moyer grant eligibility 2007 standards Existing and proposed on-road fleet rules –Low grant amounts for low annual mileage vehicles

28 On-Road Heavy-Duty Vehicles 2007 Federal HD Exhaust Emission Standards  Impact on new purchases –NOx 1.2 g. average ( ) 0.2 g (2010) Moyer grants for NOx currently not affected until 2010 –PM 0.01 g/bhp-hr standard No surplus Surplus NOx emission reductions Grams/bhp-hr 1.2 Where’s the Surplus?

29 On-Road Heavy-Duty Vehicles Impact of Fleet Regulations  Solid waste collection vehicles –Eligible projects New purchases and retrofits based on NOx reductions Repowers and PM retrofits based on a fleet’s early compliance  Urban transit buses –Eligible projects New purchases (through 2006), repowers, and retrofits based on NOx reductions

30 On-Road Heavy-Duty Vehicles Impact of Fleet Regulations  Transit fleet vehicles (commuter and charter buses >8,500 GVWR) –Eligible projects Projects based on NOx reductions on a case-by-case basis  Public fleets (proposed for adoption in 2005) –Similar to Solid Waste Collection Vehicle rule –Low mileage limits Carl Moyer grants

31 On-Road Heavy-Duty Vehicles Proposed South Coast Fleet Rules  Rules proposed for solid waste collection vehicles, street sweepers, transit buses, school buses  Proposed emission limits for new purchases –NOx : 1.8 g/bhp-hr : g/bhp-hr 2010: 0.2 g/bhp-hr –PM : 0.03 g/bhp-hr 2007-on: 0.01 g/bhp-hr

32 On-Road Heavy-Duty Vehicles Grant Amounts  What determines grant amounts?  Grants based on emission reductions –Emissions based on activity: mileage, fuel use  Small grant amounts for low mileage vehicles –Public fleets –Short-haul trucks

33 On-Road Heavy-Duty Vehicles Discussion

34 Fleet Modernization Background  AB 1394 directs ARB to develop fleet modernization program  Five year pilot programs for heavy-duty vehicles –Sacramento Metropolitan AQMD –Coalition of Gateway Cities Clean Air Program  ARB Fleet Modernization Workgroup convened

35 Fleet Modernization Parameters  Replace old, high-emitting, heavy-duty truck with one certified to cleaner emission standards  Retire the oldest, dirtiest trucks that have not qualified for Moyer grants in the past  Build-in assurances that the newly funded truck will stay in the same vocation and location  Rigorous qualifying criteria

36 Fleet Modernization Project Criteria  How to reduce likelihood of replacing trucks that would have been retired anyway? –Stricter eligibility requirements –Stricter monitoring requirements

37 Fleet Modernization Eligibility Requirements  Potential Criteria –Target independent owner/operators –Limit fleet size –Vocation restrictions –Requirement to operate in California for 3-5 years or longer

38 Fleet Modernization Grant Amount  Determining the grant amount –Pilot programs use self-reported mileage –Use a revised methodology? Standardize incentive based on vehicle year or vocation Rebate method (light-duty scrap program model) –Or, be consistent with other Moyer categories?

39 Fleet Modernization Monitoring and Enforcement  Electronic usage meters –About $1000/unit with 5 years monitoring –Require on all fleet modernization trucks? –Include the cost in the grant award and factored in cost effectiveness calculations?  Progress payments based on performance  Enforcement for non-compliance with grant conditions

40 Fleet Modernization Tiered Transactions  Combines emissions reductions gained from the purchase of a new very-low or zero- emission truck with the replacement of a used truck certified to more stringent standards than the retired truck  How does this work? –A new, low-emission truck purchaser donates a used truck to the program –The donated truck is purchased by the owner of a old, high emitting truck –The high emitter gets retired

41 Fleet Modernization Tiered Transactions Dirty, old truck Near zero emission truck Tiered Transaction Newer, clean truck Typical Fleet Mod. Transaction Dirty, old truck Newer, clean truck

42 Fleet Modernization Tiered Transactions  How to implement this? –Direct match-up with new truck purchase and the retired truck? –Create a bank of donated, used trucks? –Who is the broker? Air district? Truck dealers? –Other considerations?

43 Fleet Modernization On-Road Heavy-Duty Vehicles Discussion

44 Goods Movement Ports and Locomotives  Goods movement supports one out of seven jobs in California –$200 billion annually  International, national, state, and local stakeholders  Environmental costs –Concentrated toxic emissions at ports and rail yards –Smog-forming emissions –Growth presents challenges

45 Goods Movement Ports and Locomotives  Emission reduction strategies underway –ARB rules for marine fuels, ships, and cargo- handling equipment –Goods Movement Action Plan –Port emission reduction plans  Incentives critical to reduce emissions –CMP has funded hundreds of cleaner marine, locomotive, and truck projects in first six years –Where do we go from here?

46 Goods Movement Ports and Locomotives  Marine vessel shore power (cold-ironing) –Eligible vessel categories –Safeguards to ensure continued use –Shore-side infrastructure costs  “Green Goat” switcher locomotives –Baseline emission level –Cost of used switcher  Fleet modernization for port trucks

47  Are projects envisioned in port air quality plans surplus to existing requirements?  How to complement proposed new regulations? Goods Movement Ports and Locomotives

48 Goods Movement Discussion

49 Agricultural Projects  Carl Moyer Program has provided funding for repowering engines used in irrigation pumps and mobile agricultural equipment  Legislative changes now allow funding for other agricultural projects: stationary equipment and non-engine sources  Local air districts may use extra $2 motor vehicle fee for “Agricultural Assistance Program” –Reductions do not need to be surplus

50 Tractors and other mobile equipment SB700 Sources CAFs Title V sources IC engines Other Carl Moyer Program $13,600 C/E limit Surplus reductions Agricultural Assistance Program Previously unregulated sources $13,600 CETR limit No surplus requirement SourceProgram

51 Agricultural Projects  Project Type –What types of agricultural projects should be eligible for funding? –How should the CMP address projects for non-engine equipment? –How should the CMP address projects that reduce emissions by changing practices?

52 Agricultural Projects  Ensuring real, quantifiable, enforceable emission reductions –How to determine emission reductions from sources where no certification or verification process exists? –Are stationary source permit conditions for monitoring, testing, and reporting sufficient to address this concern?

53 Agricultural Projects  The Agricultural Assistance Program (AAP) is governed by different rules than the Carl Moyer Program, but grants must be based on the CMP guidelines –In what areas should the AAP follow the CMP guidelines? –In what areas should the AAP differ from the CMP guidelines?

54 Agricultural Projects  Interaction of the Carl Moyer Program and AAP with local district rules –How should ARB administer CMP agricultural projects and AAP projects given the diversity of local district rules?

55 Agricultural Projects Discussion

56 Light-Duty Incentive Programs  Older vehicles much dirtier than newer vehicles -- even if well maintained  Voluntary accelerated vehicle retirement programs can reduce emissions  Two programs in place –ARB/Districts: generate SIP-creditable reductions –BAR: compliance assistance program for vehicles that failed Smog Check

57 Light-Duty Incentive Programs  High emitting vehicles –Should high emitting vehicles get more emission reduction credit? –Can remote-sensing be used to identify high emitting vehicles? –How to address vehicle tampering and other negative incentives –Should unregistered vehicles be eligible?

58 Light-Duty Incentive Programs  How to ensure availability of parts for car collectors and lower-income vehicle owners?  Should we consider other light-duty vehicle programs? –Parts Replacement –Vehicle Repair

59 Light-Duty Incentive Programs Discussion

60 Other Issues

61 Contact Information  Jack Kitowski - Chief, On-Road Controls Branch, (916) ,  Lucina Negrete - Manager Alternative Strategies Section, (916) ,  Edie Chang - Manager Carl Moyer Off-Road Section, (916) ,  Bob Nguyen - Moyer Guidelines Lead, Off-Road, (916) ,  Joe Calavita - Goods Movement, (916) ,  Elise Keddie - Agricultural Sources, (916) ,  Charles Kersey - On-Road, (916) ,  Martha Vazquez - Fleet Modernization, (916) ,

THE CARL MOYER PROGRAM GUIDELINES PROPOSED REVISIONS 2005 WORKSHOP On-Road Controls Branch Mobile Source Control Division CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY Air Resources Board April 26 Long Beach April 29 Sacramento May 5 Modesto/Fresno