Low-Carbon Fuel Standards could provide billions in support of commercial vehicle electrification
Research Brief
Impacts of California Low Carbon Fuel Standard amendments on meeting heavy-duty vehicle sector electrification targets
In November 2024, the California Air Resources Board (CARB) adopted amendments to the Low-Carbon Fuel Standard (LCFS) program that have the potential to offer sizeable support for medium- and heavy-duty vehicle (MHDV) charging infrastructure funding, charging cost reductions, and point-of-sale vehicle rebates. However, actual funding amounts are heavily dependent on LCFS credit prices, which can fluctuate substantially based on market dynamics. This paper explores the revenue the LCFS amendments can direct to MHDV electrification in California through 2035.
Conclusions:
- Combined energy and infrastructure credits can generate approximately $8.4 billion in funding for charging infrastructure in our Central credit price scenario, and $3.8 and $15.3 billion in our Low and High scenarios, respectively, between 2025 and 2035.
- Credits directed toward point-of-sale MHDV rebates could provide an additional $0.41 billion ($0.22 in the Low and $0.88 billion in the High scenarios) in funding for MHDVs over the next decade.
- Together, this is much more than the approximately $1.4 billion in funding distributed to zero-emission trucks and buses since 2010 under California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project.
The LCFS has the potential to be an unprecedented funding stream for the electrification of MHDVs in California. Maintaining a high LCFS credit price is critical to offset the high breakeven costs of fast and ultra-fast chargers in the near-term. Simultaneously, directing crediting revenue toward point-of-sale rebates via the CFRP can help lower the price premium of heavy weight-class battery electric vehicles.
Figure. Total LCFS revenue to support MHDV electrification by year
