The Drive for Transportation Electrification
Governments at every level are considering polices to reduce greenhouse gas emissions from both stationary and mobile sources as part of efforts to address climate change. Some of these efforts have centered on initiatives to lowering domestic use on fossil fuels, such as coal, petroleum, natural gas and oil, by moving towards electric vehicles within our transportation system. According to the U.S. Environmental Protection Agency, the transportation sector is one of the highest sources of greenhouse gas emissions (29%) followed by electricity (25%).
The recent passage of the bipartisan Infrastructure Investment and Jobs Act included a number of provisions that will enable the Biden Administration to take steps towards establishing the necessary infrastructure to support transportation electrification and increase demand for electric vehicles. The shift to transportation electrification will require public confidence in a reliable infrastructure system that provides electric vehicle charging for both short- and long-distance travel.
The White House recently released a fact sheet on President Joe Biden’s Electric Vehicle Charging Plan, which outlines the administration’s approach towards establishing the necessary infrastructure for transportation electrification provided under the new infrastructure act. This fact sheet highlights several investments and actions that are to be taken by the administration, which include:
- $5 billion in formula funding for states to build a national vehicle charging network.
- $2.5 billion in grants to ensure access to charging stations in certain areas that are a priority for the administration, such as rural and disadvantaged communities.
- Issue guidance and standards to facilitate the infrastructure for a national charging network.
These investments and actions are part of the federal effort to establish a uniform and standard approach towards transportation electrification so that drivers of private and commercial electric vehicles have confidence in both local and interstate travel.
Private investor-owned electric companies have also taken steps to meet anticipated demand for transportation electrification by establishing a coalition that merges the Electric Highway Coalition and the Midwest Electric Vehicle Charging Infrastructure Collaboration with other private entities. The new National Electric Highway Coalition, announced by the Edison Electric Institute (EEI), intends to provide charging stations along “major US travel corridors” by the end of 2023 in order to increase public confidence in driving electric vehicles for both private and commercial use. EEI anticipates that domestic highway system will need more than 100,000 charging stations to the “projected 22 million” electric vehicles by 2030.
Infrastructure advancements to support transportation electrification is not only anticipated to build public confidence, but also to raise interest in the sale of electric or zero-emission vehicles. Biden has advocated for having electric vehicles account for 50% of all domestic sales by 2030. Parallel actions taken at the state level are also designed to achieve this goal. Many states have taken steps to implement policies that incentivize the sale of electric vehicles through real property tax reductions, rebates, access to HOV lanes, vehicle fee exemptions and special parking at public venues. The incentivized sale of electric vehicles is intended to reduce the number of petroleum-driven cars while reducing greenhouse gas emission from the transportation sector.
State efforts to replace petroleum-based vehicles with electric ones includes medium- to heavy-duty truck electrification. Fifteen states have signed a memorandum of understanding to work collaboratively in order to “accelerate the market” for electric trucks. Their goal is to ensure 30% of all new trucks sales are zero-emission by 2030 and eventually 100% by 2050. These 15 states will work with the Zero-Emission Vehicle Task Force, support by the Northeast States for Coordinated Air Use Management, to achieve these targets.
While government funding and incentives may spur the use of electric vehicles to reduce greenhouse gas emissions within our transportation system, it is not the only approach taken by some government entities. The South Coast Air Quality Management District in southern California has adopted a new rule for the region, known at the Indirect Source Rule, that requires warehouse operators to reduce mobile sources (i.e. petroleum driven medium- and heavy-duty trucks) of greenhouse gas emissions servicing their warehouses or pay a fee. Owners and operators within the district must earn a certain number of “WAIRE points” (Warehouse Actions and Investments to Reduce Emissions) based on measures taken to reduce greenhouse gases, such as utilizing zero- to near-zero emission truck, or a fee based on each unfulfilled point.
The enactment of government polices to reduce greenhouse gas emissions through transportation electrification is expected to continue at every level. Whether it is mandated installation of electric charging stations in new construction or other measures intended to curtail greenhouse gas emissions these policies will have a profound impact on the commercial real estate industry. NAIOP chapters will need to remain engaged in the development of these policies to ensure that a balanced, sustainable and economically viable approach is achieved by policymakers.
