Environmental Quality Branch

VEHICLE EMISSIONS

1997 Status Report of the Cleaner Technology Vehicles Committee:
Executive Summary

Prepared for the Minister of Environment, Lands and Parks [Ministry of Environment, as of 2006]   Province of British Columbia

Last Updated: May 1998

Contents

• Introduction
• Background
• The CTV Committee's First Report (1996)
  • Vehicle Availability and Costs
  • Fuels and Fueling Infrastructure
  • Government Leadership, Regulation and Policy
  • Education and Awareness
• The 1996 Report's Recommendations
• What Has Been Accomplished since the 1996 Report?
  • Government Leadership, Regulation and Policy
  • Vehicle Availability and Costs
  • Emission Standards and Testing
  • Fuels and Fueling Infrastructure
  • Education and Awareness
• List of Terms
• Members of the CTV Committee
• More Information

Introduction

This paper is a progress report on how well the recommendations and goals set by the Cleaner Technology Vehicles (CTV) Committee in July 1996 have been met, so far. The main goal of the committee is to reduce vehicle emissions by carrying out actions that will result in bringing more CTVs to British Columbia.

Background

The CTV Committee was formed in 1996, under the Motor Vehicle Emissions Reduction Regulation (December 1995), which is a key tool in the B.C. Government's Clean Vehicles and Fuels Program. The regulation sets targets that call for an increasing proportion of vehicles sold in the province to be ultra-low and zero emission. By 1998, all new vehicles sold in B.C. should meet the US federal emission standards (which are now the same as the Canadian standards for the 1998 model year). In addition, as of 2001, new vehicles sold in B.C. should meet California's even more stringent, low-emission standards, on a fleet-average basis.

The CTV Committee's mission is to help achieve these targets. It represents the major industry and government sectors involved in the use, sale, production and/or regulation of alternative vehicles and fuels. Specifically, its regulatory mandate is to:

• promote the use and procurement of CTVs, to reduce emissions (including GHGs) from motor vehicles;
• promote CTVs through fleet purchases and consumer marketing, to meet the targets established in the regulation; and
• identify obstacles to CTVs in B.C., and recommend ways to overcome such restraints.

The CTV committee's goals for the end of 1997 were to ensure that:

• 3,000 cleaner technology vehicles and buses are purchased in public and private-sector fleets in the province;
• there is enough fueling infrastructure to support the above purchases; and
• B.C. purchasers have sufficient access to cleaner technology vehicles.

The committee was also to prepare a longer-term action plan to meet the CTV goals of the Motor Vehicle Emissions Reduction Regulation.

The CTV Committee's First Report (1996)

The CTV Committee completed its first ("phase 1") report in July 1996 for the Minister of Environment, Lands and Parks. Entitled The Purchase of Cleaner Technology Vehicles for 1997, the report identified a number of barriers and opportunities to the sale, purchase and use of CTVs in 1997. These have been consolidated and re-ordered slightly here, for the sake of brevity.

Vehicle Availability and Costs

In the 1996 report, the committee said there were a number of CTV models already available for sale, and more 1997 models were expected to be available on the North American market. If these models were offered for sale in B.C., the committee believed there would be an excellent opportunity to achieve the 1997 sales target of 3,000 CTVs.

All the CTVs identified for 1997 had incremental costs (ranging from $1,600 to over $20,000), which were predicted to be a purchase barrier. Although reduced operating costs and higher resale values were expected to offset higher initial costs, the report emphasized that initial costs should be kept as low as possible to attract buyers.

Fuels and Fueling Infrastructure

The committee reported that fuel supply was a key issue, since all the CTVs operated on fuels other than gasoline. B.C.'s propane infrastructure (and natural gas in parts of the province) was seen as relatively good, but not comparable to that of gasoline. The methanol-supply infrastructure was even more limited. The report called for a strategy to improve the public refueling network, especially for dedicated natural gas vehicles.

Government Leadership, Regulation and Policy

The overwhelming message of the vehicle manufacturers, purchasers and fuel suppliers was the importance of government and industry leadership in establishing the market and fuel-infrastructure support needed to promote CTVs. The committee urged the provincial government to continue to focus on CTVs as a key part of its clean air strategy.

Provincial fuel tax exemptions were identified as a crucial area of government policy affecting the likelihood of success in achieving CTV goals, and an important "first step" before other sectors might take action. The CTV committee recommended that options for targeted CTV incentives be evaluated and implemented, along with any future tax changes.

The committee also recommended that the provincial government implement a CTV purchasing policy, similar to that of the federal government (Alternative Fuels Act). As well, it stressed the importance of multiple account evaluation: including environmental and health considerations in government cost-benefit analyses of vehicle and fuel purchasing initiatives.

Finally, the committee encouraged the provincial government to implement the transportation actions in the B.C. Greenhouse Gas Action Plan, which are aimed at reducing vehicle emissions. This was to include offset recognition for greenhouse gases.

Education and Awareness

The CTV Committee felt there should be more emphasis on educating fleet managers, industry and the public about the importance, value and availability of CTVs. It suggested that vehicle and fuel suppliers, and governments, should develop programs to inform public- and private-sector fleet managers about CTV purchasing and fueling opportunities.

The 1996 Report's Recommendations

Building on its discussion of obstacles and opportunities to CTVs, the report then listed 10 specific recommendations aimed at bringing 3,000 cleaner technology vehicles into British Columbia in 1997. These are outlined below:

What Has Been Accomplished since the 1996 Report?

Since the CTV Committee issued its first report in July 1996, both government and industry have taken important steps to increase CTV purchases and use in B.C., as well as to enhance the alternative fuel infrastructure. CTV sales by members of the Canadian Vehicle Manufacturers' Association (CVMA) and the Association of International Automobile Manufacturers of Canada (AIAMC) exceeded the CTV Committee's 1997 target of 3,000. New CTVs came on the market in late 1997, and many more are slated for 1998. Also, a number of manufacturers have new incentives for the 1998 model year, which will reduce CTV costs.

On the other hand, several CTV Committee members reported that access to OEM CTVs was limited and costs remained high in 1996-7. While natural gas sales and infrastructure are growing in B.C., sales of propane — and especially M85 (85% methanol, 15% gasoline) — have decreased. Current economic conditions are a significant obstacle to selling E85 (85% ethanol, 15% gasoline) and even lower-level ethanol-gasoline blends.

Below is a brief overview of accomplishments and difficulties in 1996-7. Government leadership, laws and policies were identified by the committee as crucial to promoting CTV availability, acquisition and use in B.C.. Therefore, these topics will be discussed first.

Government Leadership, Regulation and Policy

Government of British Columbia
Within fiscal limitations, the provincial government has taken action on several fronts in the past year to promote CTV use and cut vehicle emissions.

Motor Fuel Tax Policy — One of the government's most important CTV-related initiatives was clarifying its motor fuel tax policy, which is of central importance to CTV purchasing decisions. When the 1996 report was presented to the Minister, the CTV Committee saw B.C. government action on the fuel tax issue as a crucial step needed to set the stage for further CTV-promotion efforts by industry and other groups.

In December 1996, the provincial government confirmed the tax exemption for natural gas and high-level alcohol blends. Then in March 1997, the government announced that propane would remain exempt from the provincial motor fuel tax, but would be subject to a provincial sales tax of about 2.2¢/L, starting on June 1, 1997. These exemptions will be in effect until March 31, 2000.

A 1997 review of the provincial fuel tax policy showed that the exemption for natural gas and alcohol-based fuels should be extended because those industries are still in their infancy. The propane industry is well advanced, in contrast. Propane still gets a tax exemption of about 18¢/L from federal and B.C. taxes. The Ministry of Finance has also agreed to work on a longer-term policy for alternative fuel taxation.

The GVRD points out that although the tax policy removes a degree of uncertainty surrounding CTV purchases, the current conditions of high vehicle cost and fuel price uncertainty will likely discourage all but the very high-mileage driver. Other incentives may be necessary. (For example, the GVRD has estimated a six-year payback period for the OEM natural gas CTVs it bought in 1997.)

Multiple Account Evaluation — The B.C. government has carried out the 1996 report's recommendation that environmental and health costs should be key considerations in vehicle and fuel purchasing decisions. Such multiple accounting was done in the "Transit Fuel Choice Study" carried out by the Crown Corporations Secretariat, BC Transit, MELP, the Ministry of Employment and Investment, and the GVRD. A similar approach was followed by government in the recent evaluation of independent power proposals.

Standards for Emissions from Alternative Fuel Vehicles — In 1996, the provincial government announced the Requirements for Emission Compliance for Alternative Fuel Vehicle Conversions in B.C., which was jointly developed with industry. Under these requirements, the emission performance of alternative fuel conversions must be equal to or greater than that of gasoline-powered vehicles.

Cleaner Technology Vehicle Purchasing Policy — The government also developed a CTV purchasing policy in 1996, to guide 1997 purchases. Due to fiscal constraints, though, there have been no major vehicle purchases this year, other than 11 bi-fuel NGV pickups.

BC Gas has commented that, despite the spending freeze, Crown corporations such as BC Hydro and the Insurance Corporation of B.C. continued to buy vehicles, but not CTVs. Following on the Transit Fuel Choice Study, BC Transit is moving towards the purchase and operation of cleaner technology vehicles. More details cannot be given at this time, pending a public announcement in 1998.

Provincial Implementation of GHG Action Plan Transportation Measures — The B.C. Government is committed to reducing greenhouse gas emissions, with transportation-related initiatives at the forefront. These include:

• Ballard fuel-cell research and development, and bus demonstration;
• natural gas bus purchases;
• transportation demand management strategies, being developed for major urban-growth areas: Lower Fraser Valley (LFV), Capital Regional District and the Okanagan;
• high-occupancy-vehicle (HOV) lanes in the LFV, to encourage the use of buses and vanpools; and
• $2 million from the province for the 1996-7 and '97-8 fiscal years, to promote the development of cycling infrastructure in B.C. communities, and a further $4 million (total) in federal and municipal funding in 1997-8.

A voluntary pilot GHG offset program, run by industry and the provincial government, was launched officially in November 1997. A call for proposals should be issued in 1998. Under the program, firms will have the opportunity to create tradable emission credits by offsetting GHG emissions (e.g. CO2 and methane) through reductions at other sources, or the development of carbon sinks. For example, an offset would be produced if a company discharging GHGs funded the purchase of low-emission buses for a local transit service.

The GVRD states that, if GHG emission fees are eventually implemented, a significant credit for alternative fuel vehicles should be included, to help counteract the existing vehicle price disincentive. In the meantime, the government could include emission credits (for common air contaminants and GHGs) in the purchasing decisions made by its Crown corporations, such as BC Transit.

Local Governments

In 1996, the GVRD and its member municipalities formed the "Regional and Local Government Working Group on Motor Vehicle Emissions" to facilitate the incorporation of CTVs into their fleets — the first of such working groups in the province. The GVRD included multiple account evaluation and emission credits in its bid evaluations for 1997 model year vehicles.

Of the 1997 model year purchases by the GVRD and municipalities, about 7% were OEM CTVs (19), and 7% were conversions to alternative fuels (19). The City of Victoria also showed leadership in this area, converting 76 vehicles to natural gas and six to propane, over the last few years. These conversions followed the emission-compliance requirements referred to earlier, so the emission quality is good.

Government of Canada

The federal government fleet in B.C. (except Canada Post) now includes 190 alternative fuel vehicles, of which about 33 are OEMs and about 157 are conversions. Natural Resources Canada has helped fund several joint programs aimed at researching and promoting alternative fuels. This includes a research project on E85, a $50,000 contribution to each of the three natural gas stations opened this year on Vancouver Island, involvement in opening five new natural gas stations in the Lower Mainland, and a combined grant with BC Gas of $2,000 (until March 1997) for purchasers of factory NGVs.

Canada Post Corporation will not be replacing any of its current B.C. fleet of 1110 vehicles in the fiscal year 1997-8. However, it is converting 10 vehicles to new, dedicated natural gas engines. Another 10 new NGVs have been ordered. The remaining 50 vehicles that, in the past, would have been replaced are getting fuel-injected, computer-controlled fuel systems, which will improve emission quality.

Vehicle Availability and Costs

Encouraging progress was made in 1996-7. The Canadian Vehicle Manufacturers' Association report that their B.C. CTV sales (number unspecified), combined with those of the AIAMC (5,772), exceeded the CTV Committee's 1997 target of 3,000. These CTVs (TLEVs, LEVs, ULEVs and ZEVs) included mono- and bi-fuel natural gas vehicles, as well as vehicles running on propane, alcohols (ethanol and methanol), electricity and gasoline.

Other CTV Committee members, such as BC Gas, the City of Victoria and the GVRD, say a lack of available CTVs, high costs, and poor or uncertain delivery times were a major obstacle to CTV purchases in 1996-7. Thirteen CTVs in the 1996 report were identified as potentially available in B.C. for 1997; however, Chrysler withdrew all four of its natural gas CTVs (including the popular mini-van) in 1997, due to supply problems with the vehicles' fuel cylinders. Access to Ford and GM natural gas CTVs was limited, and resulted in few sales. (It is not clear if the low sales were due to a limited order window or customer disinterest.)

The only natural gas CTV that was readily available throughout most of the 1996-7 period was the mono-fuel Crown Victoria sedan from Ford (ULEV), which has found a viable niche in police and taxi uses in many B.C. cities. BC Gas reports that 85 natural gas CTVs were ordered between 1996 and September 1997.

With respect to the GVRD and its member municipalities, 265 1997 vehicles were acquired, of which 19 were OEMs and 19 were alternative fuel conversions — a total of 38 CTVs, compared to the targeted total of 65. The GVRD itself requested 19 OEM CTVs in its 1997 model year tender, but was able to buy only three (full-size vans), at a significant price premium ($7,759 each). The premium cost of CTVs is a major disincentive, unless the vehicles are to be used in a high-mileage application in which the fuel-cost savings will more than make up for the initial price.

The GVRD found that, in general, dealers seemed poorly informed about the availability of these vehicles from their manufacturers, and seemed to have little interest in offering them for sale. For example, the GVRD asked the dealers that bid on 1997 vehicles to include OEM CTVs, but only one did. (The CVMA says this may have been because only a limited number of dealers were gaseous certified; an increasing number of dealers are gaseous certified for the 1998 model year.)

BC Gas and Natural Resources Canada offered a combined grant of $2,000 to aid eligible purchasers of factory NGVs ordered up to March 31, 1997. That program is now closed. However, BC Gas has proposed a new federal-provincial-B.C. Gas program to lower costs.

The future looks brighter in terms of vehicle availability. With respect to the 1998 model year, Ford has announced a strong range of NGV CTVs available in Canada with open ordering, and new pricing incentives. The company is also including bi-fuel pickups, and vans with bi-fuel propane in the '98 model year. GM is expected to bring its bi-fuel Cavalier sedan (TLEV), well suited to fleet purchase, into Canada in '98. Greater CTV availability and market competition should eventually bring costs down.

Also, in September 1997, Honda Canada Inc. began selling two gasoline-powered vehicles that meet California LEV standards (the 1998 Civic and the all-new 1998 Accord), with no price increase over the 1997 models. Honda Canada estimates that 7,400 LEV Hondas will be sold annually in British Columbia. In addition, Ford and Chrysler will offer about six flexible-fuel vehicles in the North American market, in 1998.

Another promising venture is a memorandum of understanding drafted in 1997 by the Canadian Natural Gas Vehicle Alliance, which is expected to improve NGV sales in the coming years. This MOU is aimed at building marketing ties and joint activities between OEM manufacturers and the NGV industry. Discussions are underway between the alliance and both GM and Ford to prepare a marketing plan for the new model lines of NGVs.

The CVMA notes that, besides CTV availability and market competition, sales volume is the key factor in cutting vehicle costs. Therefore, CTV purchase and use should be encouraged throughout North America, to take advantage of economies of scale.

Emission Standards and Testing

Identifying alternative fuel vehicle conversions that meet CTV emission requirements was included in the 1996 report as a priority. This was accompanied by the need for a facility offering Federal Test Procedure (FTP) services, and/or conversion kit equipment certification to recognized standards — e.g. California Air Resources Board (CARB) standards.

BC Gas reports that the natural gas conversions meeting the voluntary B.C. standard have been identified, and the company's conversion program requires that the equipment meet this standard.

With regard to FTP testing of natural gas vehicle conversions, the AirCare test facility is the only one in B.C. that can perform a full FTP75. However, at present, the AirCare lab is available for R&D testing only — not commercial testing, (including the alternative fuel industry). Options for making AirCare commercially available will be discussed by the Ministry of Environment, Lands and Parks and the Insurance Corporation of B.C., after assignment of the AirCare testing contract.

The GVRD points out that recent AirCare results (Dec. '96 - April '97) show a marked improvement in emissions from vehicles that have been recently converted from gasoline to propane (10% failure rate) or natural gas (3% failure rate), compared with older conversions. However, the failure rate for 1996 gasoline vehicles is much lower, at about 0.3%. This indicates that, although the alternative fuel conversions' emission performance has improved, there is still room for improvement.

Consequently, the overall environmental benefit of alternative fuel conversions is still questionable, with the positive greenhouse gas emission reductions possibly being offset by increased emissions of common air contaminants, such as CO, NOx and methane (for CNG conversions) and NMHC and NOx (for propane conversions). More work needs to be done to quantify the net emission benefits of these conversions. (Editor's note: The problem appears to lie in matching conversion kits with specific vehicle technologies.)

Fuels and Fueling Infrastructure

Natural Gas — There are now 51 compressed natural gas (CNG) public refueling stations in British Columbia: 30 in the Lower Mainland, 18 in the North Coast and Interior, and three on Vancouver Island.

In the Lower Mainland, Natural Resources Canada, IMW Industries and BC Gas developed five new public station sites during 1996. Meanwhile, July 1997 marked the opening of the first public CNG station on Vancouver Island — in Victoria — followed by station openings in Nanaimo and Courtenay in November. This is the result of a joint effort by Mohawk Oil, IMW Industries, Eco Fuels Systems, Fleet 2000, and Centra Gas BC Ltd, and a $50,000 grant for each station from Natural Resources Canada.

BC Gas continues to work on developing the public, natural gas infrastructure in its service territory. At the moment, the infrastructure can support at least double the current number of NGVs (10,000 vs. 5,000) without strain. BC Gas has been working with oil companies to identify additional sites for NGV compressors, and intends to install the machines in 1997-8.

BC Gas, a number of gas utility companies in the Pacific Northwest and some US government agencies are trying to establish a series of alternative fuel outlets along the Interstate-5 highway linking B.C. to California. The group has done a market survey to determine the level of interest in NGVs along the corridor, and is now designing appropriate action plans.

Diesel with Emission Control Additive (ECA) — ECA is blended with low-sulphur diesel at all 64 B.C. Mohawk stations that offer diesel fuel, offered as an option to commercial customers for about 1¢/L incremental cost.

Propane — Propane is available at over 1,100 stations in B.C., of which 79 are run by Mohawk. The company says the number of stations offering propane has been relatively constant over the last four years, but volume has decreased by approximately 4% per year.

M85 (85% methanol, 15% gasoline) — M85 is offered at three stations in B.C.: two in Kamloops and one in Vancouver. Ford is the only company that currently offers an M85 flexible-fuel option (Taurus). Sales volume for M85 has dwindled to extremely low levels over the past year, in spite of the fact that M85 pricing is the same as regular gasoline on an energy-equivalent basis. Mohawk is reviewing its M85 program in B.C. and has removed M85 from three of the four sites in Alberta.

E85 (85% ethanol, 15% gasoline) — Mohawk is experimenting with E85 in a 1996 Ford Taurus, and a research project supported by Mohawk, AirCare and Natural Resources Canada has been established. A large potential for E85 under current economic conditions is unlikely. However E35 (35% ethanol, 65% gasoline) could be marketed at the same energy-equivalent price as regular gasoline, if provincial tax exemptions for E85 were extended to these lower-level blends.

Ethanol-Blended Gasoline — Mohawk markets three grades of ethanol-blended gasoline (one specifically for the LFV in the summer), ranging from 5-10% ethanol content. At least one grade of ethanol-blended gasoline is available at the 111 service stations in Mohawk's B.C. network. Pricing is a major consideration. Current economic conditions result in a price for ethanol which is approximately 2.5 times that of gasoline (before taxes). In the absence of taxation incentives that recognize the environmental and social benefits, the price for ethanol blends is higher than for conventional gasoline.

Gasoline Content — The CVMA says fuels should be improved in B.C. to gain maximum environmental benefits from LEV technology — mainly by reducing sulphur to California levels (30 ppm avg. / 80 ppm max.), and ending the inclusion of manganese (MMT). This view is disputed by the fuel industry, and the data are not yet conclusive (according to recent work by the CCME's Vehicles and Fuels Task Group).

Canada Post Corporation states that the use of low-sulphur fuels must be encouraged. 1998 vehicles will not meet advertised CARB levels of emissions, if they are not run on low-sulphur fuel. Endorsement of fuel companies who actively participate in making this product available to the marketplace, through concessions and other inducements, will be necessary if "regulation" is undesirable for the government. In addition, benzene and other evaporative emissions from fuel-storage tanks and vehicle fuel tanks during the filling process must be addressed quickly.

Education and Awareness

Both the City of Victoria and the GVRD have noted that dealers seem poorly informed about the availability of CTVs vehicles from their manufacturers, and/or they have little interest in offering them for sale, or providing outreach and incentive programs. The GVRD Regional and Local Government Working Group on Motor Vehicle Emissions has been meeting regularly over the past year to exchange information and experiences, and encourage the purchase of CTVs.

The BC Automobile Dealers Association has offered to play a more active role in providing dealer principals and fleet managers with information on the goals of the CTV committee and the environmental benefits of CTVs. This association has been involved in the pilot Scrap-It program, which has been very successful. It suggests that, if the program continues, the associated communications materials could include information on CTVs.

The Canadian Vehicle Manufacturers' Association says that manufacturers have begun better communication with dealers for the 1998 model year, which should improve dealers' knowledge of the CTV offerings.

The Canadian Natural Gas Vehicle Alliance's MOU, drafted in 1997, has resulted in media releases, a financial incentive program offered by natural gas utility companies, and discounted premiums offered by the manufacturer.

BC Gas will continue its incentive program for the next three years. It uses its newsletter, trade show displays, demonstration vehicle program, information hotline, personal visits and other means to inform target customers about NGV developments. Other ways the public could be encouraged to acquire CTVs are access to HOV lanes and customized licence plates.

List of Terms

Members of the CTV Committee

For More Information:

Environmental Quality Branch
Ministry of Environment
Government of British Columbia

PO Box 9341
Stn Prov Govt
Victoria, British Columbia
Canada V8W 9M1
http://www.env.gov.bc.ca/air