<

Sustainable Freight

California’s Bold Plan to Move Toward Zero-Emission Vehicles

By: Emily Rooney, Ag Council President

The success of modern agriculture has been built upon the ability to quickly move agricultural products to processing and marketing points.  However, freight transportation in the Golden State is facing a questionable path with the recent release of the California Sustainable Freight Action Plan.  The document is a comprehensive plan intended to serve as a blueprint for transforming every facet of commercial transportation in California into one that is, according Governor Jerry Brown’s Administration, “environmentally cleaner, more efficient, and more economically competitive.”  The final version was released in July 2016.

The Action Plan is extensive.  Seven state agencies and offices developed it in response to a 2015 Executive Order by Governor Brown, which called for a single integrated action plan “to improve freight efficiency, transition to zero-emission technologies and increase competitiveness of California’s freight system.”

Following this directive, state agencies created guiding standards for California’s long-term freight goals and set a number of near-term targets:
·      Improving freight system efficiency 25 percent by 2030;
·      Deploying more than 100,000 zero-emission vehicles by 2020;
·      Fostering future economic growth with the freight and goods movement industry.

The agencies intend to revisit these targets in 2019 and will take additional actions to assess the Action Plan’s effectiveness in achieving the targets between now and then.

The Action Plan also identifies actions to initiate over the next five years to meet the stated goals, and lists possible pilot projects that integrate advanced technologies, alternative fuels and infrastructure.

Ag Council is engaged in the regulatory process and commented on the draft Action Plan, which was released in the spring of this year.  Ag Council called for the state agencies involved to consider the economic impact to the agricultural industry as they contemplated these costly new emissions targets. The shift to a zero or near-zero emission strategy will impact operations and therefore, must be carefully evaluated for flexibility to ensure businesses remain competitive.

Significant obstacles must be overcome prior to a transition in the freight sector to lower-emission technologies. As with most new technology, barriers exist. This transition will mean both up-front equipment costs and the costs associated with a charging infrastructure that needs to be built out.  Ag Council is deeply concerned about the shift towards these new technologies and the cost recovery value for owners who have already made investments upgrading diesel technology, as well as the value lost on diesel vehicles that will be sold or retired in order to comply with new regulations.

The Action Plan could affect agricultural freight through new requirements for vehicles and equipment, such as electric forklifts; lower-emission truck standards that go beyond the current Air Resources Board Truck Rule, future regulations on transportation refrigeration units (TRUs), and new rules at freight hubs and distribution centers.

The next steps for state agencies participating in the plan include continued work with interested parties to refine and prioritize the actions outlined in the plan. The agencies will create collaborative working groups on competitiveness, system efficiency, workforce developments, and regulatory and permitting process improvement.

The wholesale shift to a zero or near-zero emission strategy will impact every operation in agriculture. Given this, Ag Council continues to work closely with state agencies and other stakeholders on incentives and voluntary approaches to allow California agriculture to continue operating smoothly and efficiently.

* This is an edited version of an op-ed that appeared in Almond Advantage, a magazine published by the Almond Alliance.

Ag Council Articulates the Challenges for Agriculture in the Draft Sustainable Freight Action Plan

July 6, 2016

To:       Interagency Partners: California State Transportation Agency, California Environmental Protection Agency, California Natural Resources Agency, California Air Resources Board, California Department of Transportation, California Energy Commission, Governor’s Office of Business and Economic Development

SUBMITTED ONLINE (casustainablefreight.org)

Re:      Comments on the Draft Sustainable Freight Action Plan

The agricultural representatives listed below appreciate the opportunity to comment on the California Sustainable Freight Action Plan – Draft Discussion Document, released May 2016 (Action Plan). We recognize the extensive multi-agency collaboration and stakeholder outreach in the development of this Action Plan, in response to Governor Brown’s Executive Order B-32-15.

As you know, the food, fuel, flora and fiber produced in California is transported multiple times before consumers can enjoy and utilize their enormous benefits. The wholesale shift to a zero or near-zero emission strategy will impact every operation in the industry and must be carefully evaluated to insure we maintain a vibrant agricultural community.

We urge the interagency partners to keep in mind the tremendous challenges inherent in transitioning the freight sector to lower emission technologies and the need for state commitment and investment to overcome these challenges.

Reference to a Facility Emissions Cap

Agricultural facilities are currently paying the costs to comply with a myriad of air quality regulations, such as stationary source, mobile source and greenhouse gas (GHG) reductions, to name a few. While the Action Plan does not contain an explicit reference to facility-based rules, we understand that data collection on freight hubs is expected to move forward (Appendix C, Page C-41) with the intent of supporting future rulemaking and performance targets.

This sends a clear message to the freight industry that the Air Resources Board (ARB) will likely proceed with facility-based rules in the future, but in a less transparent fashion. For the reasons outlined in previous letters and in meetings with ARB, the Action Plan should affirmatively reject a facility emissions cap, now and into the future.

Moving forward, we request that the ARB take into account the unique nature of agricultural facilities. Many of the packinghouses, cooling facilities, processors and nut hullers are seasonal and operate for limited periods to process harvested product and then shut down until the next season. Also, both seasonal and year round agricultural facilities have timing and temperature factors to consider when moving product. Maintaining the desired or ideal holding temperature along the whole supply chain is a major component in protecting perishable food against quality loss during storage and distribution. Even short periods of time during loading, transit, and unloading may cause a considerable amount of quality loss by the time the product reaches its destination. Spoilage can not only lead to potential food safety concerns, but losses of millions of dollars. These factors need to be considered when looking at the state’s freight system as a whole, as well as determining the cost effectiveness of data collection and performance targets.

System Efficiency Target

Improve freight system efficiency 25 percent by increasing the value of goods and services produced from the freight sector, relative to the amount of carbon that it produces by 2030.

As stated in the Action Plan, the use of gross domestic product as a metric is consistent with industry practice. However, the freight efficiency metric is not.

We encourage the efficiency workgroup, as called for in proposed State Agency Action #7 (Page 18), to additionally consider efficiency goals more reflective of priorities for infrastructure investment, such as velocity, throughput, reliability and congestion relief. These metrics are well understood to increase the efficiency of the freight system.

Zero-Emission Freight Targets

Deploy over 100,000 freight vehicles and equipment capable of zero emission operation and maximize near-zero emission freight vehicles and equipment powered by renewable energy by 2030.

 As with most new technology, barriers exist. There is the potential for higher product and maintenance costs, lower reliability and limited infrastructure for both electricity and repairs. Future technology must ensure food safety and prevent spoilage of the product. In addition, electrical connection standards have not been established, preventing the development of standardized systems that work for both interstate and intrastate transit.

Before moving forward, ARB should conduct an extensive review of the economic and technological feasibility considering the cost to transfer to zero emission technology, the cost for renewable fuel technologies, incentives for infrastructure development, cost recovery value for owners who have already made investments upgrading diesel technology and the value that will be lost on diesel vehicles that will be sold or retired to adjust for complying with new regulations.

Further, we ask you to take into account the inability agriculture has to pass on costs. Farmers in California must compete with farmers in other states and countries that already have far lower wage costs. The buyers of our products – big box and traditional grocery chains, restaurant chains – set the price they will pay our farmers. If California farmers cannot meet the stated price, the buyers can and do purchase from farmers in other states and countries. These facts, along with increasing regulatory costs, are driving family farmers out of business and fueling a trend toward consolidation and investor owned agriculture. It is important we continue to dialogue and work toward solutions to bring long-term, dedicated revenue to California’s freight infrastructure. We urge the State to invest in technologies that will assist industry in reaching the goals, while minimizing the impacts of new regulatory barriers that will stifle innovation.

 Economic Growth Target

Foster future economic growth within the freight and goods movement industry by promoting flexibility, efficiency, investment and best business practices through State policies and programs that create a positive environment for growing freight volumes, while working with industry to lessen immediate potential negative economic impacts.

 The Action Plan should recognize that freight dependent industries compete for investment and business on a global scale and the State’s policy focus is to help the industry remain competitive in the global market. To achieve meaningful reductions of climate change emissions, other states and countries must join the effort. With less than 1 percent (and falling) of global emissions coming from California, GHG reductions in California are not enough. For that reason, California should remember its goal is not ultimately just to reduce emissions but also to create a model for others, and therefore the state should strongly consider making new requirements conditional on action by others outside California.

In addition, the State’s own purchasing programs and other regulations should support reducing GHGs. This commitment to addressing climate change is not occurring across all state agencies and local public entities.  For example, just last year, a local school district chose to buy tens of thousands of dollars of cheaper food imports sourced from over 6,000 miles away. Meanwhile, several food facilities within a two-hour drive of the school district process the very same product. California farmers and food processors are subject to numerous directives to purchase lower emission tractors, forklifts and more fuel-efficient trucks that drive up operating costs. All of these environmental benefits–as a result of investments by farmers and food processors–are more than negated when public agencies import products with a large GHG footprint. The state must not undermine its significant efforts to reduce GHGs by spending taxpayer dollars to import products from nations not complying with equivalent emissions standards, not to mention food safety and other environmental standards.

Appendix D: Pilot Projects

Item A, Dairy Biogas for Freight Vehicles, has been highlighted as one of three pilot project concepts. We support exploring this demonstration and see it as a model for subsequent fueling centers utilizing the bio-methane from the state’s many dairies. This project would have the benefit of creating a renewable low carbon fuel produced in state, cleaning the air in some of the more disadvantaged locations of the State and providing much needed jobs in the Central Valley.

Appendix E: Discussion Concepts for Potential Future Action

Item D, Supply Chain Consolidation in the Agricultural Industry, discusses the concept for potential future action around a centralized location for storage and consolidation of perishable crops. While this is a big-picture idea and the Action Plan states that the concepts listed will need further exploration, we suggest utilizing the California Department Food and Agricultural (CDFA) to help determine feasibility and effectiveness based on the location where different crops are grown and their season.

In closing, thank you for the opportunity to provide comments on the Action Plan. Our industry has a committed interest in a sustainable, yet functional freight system. The safety of our products and many California jobs depend on it. We will remain engaged and welcome future opportunities to continue to discuss the Sustainable Freight Strategy.

Respectfully submitted by:

Agricultural Council of California
Almond Alliance of California
Association of California Egg Farmers
California Association of Nurseries and Garden Centers
California Association of Wheat Growers
California Bean Shippers Association
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Farm Bureau Federation
California Fresh Fruit Association
California Grain & Feed Association
California Rice Commission
California Seed Association
California Warehouse Association
FarWest Equipment Dealers Association
Milk Producers Council
Pacific Coast Renderers Association
Western Agricultural Processors Association
Western Growers Association
Western United Dairymen

Ag Council Testifies at Air Resources Board Meeting on Sustainable Freight Strategy

April 20, 2015

Clerk of the Board
California Air Resources Board 1001 I Street
Sacramento CA 95812

Submitted Electronically: http://www.arb.ca.gov/lispub/comm/bclist.php

RE: Sustainable Freight: Pathways to Zero and Near-Zero Emissions, Discussion Draft

Dear Chairwoman Nichols and Members of the Board:

The agricultural representatives listed below would like to submit these comments regarding the Sustainable Freight Strategy (SFS) that you will discuss on April 23. We realize this is a discussion draft and there is much more work yet to be done. We wanted to voice our initial concerns on several points, with the understanding that there are many more complex and wide-reaching issues in the SFS that will have significant impact on the agricultural community. We will not attempt to address all of the issues at this stage, but we will want to work with you, your staff and the board as we seek to improve the state’s freight transportation system.

As you well know, the food, fuel and fiber produced in California must be transported a number of times before consumers are able to enjoy and utilize its enormous benefits. The wholesale shift to a zero or near-zero emission strategy will touch every agricultural operation and must be carefully evaluated to insure we maintain a vibrant agricultural community.

Proposed Facilities Emissions Cap

In many cases agricultural facilities are already complying with air quality regulations for sources subject to stationary, mobile, greenhouse gas and numerous other requirements. We believe that the proposed facility-based emissions cap will overlap and require multiple emission restrictions on equipment and facilities, especially on facilities that are already adhering to cap and trade. Additionally, it could slow movement of products that are highly perishable, in some cases, if trucks have to wait because a facility has exceeded its emissions cap.

It will be important to analyze how an agricultural facility that only operates seasonally will be able to comply in a cost-effective manner with the initial data collection and any potential emission cap. Agriculture is a business of constant change; every year is different and harvest seasons are never exact. Weather, water and labor availability, pest infestations and commodity prices can provide a successful season or a disastrous one. Many of the packing houses, cooling facilities, processors and nut hullers operate for limited periods to process harvested product and then shut down until the next season. These are generally small, privately owned operations.

While the facilities emission cap is only a concept at this point, we do not believe it has merit and do not support it. The SFS will be infinitely more challenging to develop and enforce than the Truck and Bus rule as it expands across every form of transportation. How a facility operator will police vehicles that visit their operation raises significant questions regarding responsibilities, costs, and effectiveness of this proposal.

Transport Refrigeration Units

For many years, diesel-engine-driven trailer refrigeration units (TRUs) have been the standard approach for cooling fresh and frozen foods during transport. Keeping a refrigerated load at its correct temperature is critical. These loads are very sensitive to temperature variation; spoilage not only can lead to potential food safety concerns, but losses of millions of dollars.

The SFS proposes to prohibit the use of fossil-fueled transport refrigeration units for cold storage in phases, with incentives to support infrastructure installation and demonstration projects. ARB action will come in the 2016 timeframe with implementation by 2020 and beyond. The initial concept of the proposed regulation would limit the amount of time that a transportation refrigeration system can operate at any facility and encourages the adoption of foreseeable technologies in this sector.

As with most new technology, barriers exist. There is the potential for higher product and maintenance costs, lower reliability and limited infrastructure for both electricity and repairs. Future technology must ensure food safety of the product that is being moved to prevent spoilage. In addition, electrical connection standards have not been established, preventing the development of standardized systems that work for both interstate and intrastate transit.

Before moving forward, the California Air Resources Board (CARB) should conduct an economic analysis considering the following:

  • Cost recovery issues from substantial investments made to comply with existing TRU regulation. The report notes that retrofitting and conversion options are limited.
  • Consideration of higher electricity cost that are expected to rise due in part to the renewable power mandate and heavy investments in transmission lines.
  • Cost competiveness of various technologies on a full lifecycle basis relative to the next-best alternative

Large Spark-Ignition Equipment (forklifts)

The SFS proposes to develop purchase requirements to support broad deployment of zero emissions large spark-ignition (LSI) equipment in the 2016-2018 timeframe that would be implemented by 2020. The first step will be to require the reporting of LSI equipment to ARB using the Off-Road Diesel Vehicle regulation reporting requirements as a model. This additional reporting that is not currently required under the LSI regulation will add an administrative burden to agricultural operations that depend on forklifts to harvest and maintain crops and packinghouses and other post-harvest activities that must ready the crops for market.

CARB’s economic analysis should consider:

  • Reflection of the special needs of forklifts that are used exclusively in-field that differ dramatically from warehouse and distribution center use;
  • The seasonality, small size of many operations and remote locations that characterize much of the agricultural LSI equipment use; and
  • Cost recovery issues from compliance with the existing LSI regulation.

Opacity Limit Reduction

The SFS proposes to lower the current 40% opacity limit to ensure the emission benefits expected from heavy-duty 2007 and subsequent model year vehicles requiring high- emitting vehicles to repair damaged or faulty PM filters. It will be important to insure that those doing the opacity tests are trained and knowledgeable regarding the regulatory requirements for the vehicles being inspected and pre-2007 trucks are not mistakenly required to meet lower opacity standards than they were built to meet. Outreach and education of the ARB enforcement staff will also be key. Any of the flexibility provisions provided for in the Truck and Bus rule must be maintained and not undone by a lower opacity standard.

PM filters have proven unreliable and have often malfunctioned providing inaccurate testing results, for reasons not due to the truck owner’s maintenance of the vehicle. There will need to be recourse for the truck owner operator to receive appropriate reimbursement for repair or replacement of faulty traps.

Renewable Natural Gas Standard

While we are generally supportive of renewable energy and fuels, if they are shown to be efficient and cost-effective, we would strongly be opposed to any standard that seeks to establish a mandate. The agricultural sector uses natural gas in a variety of contexts, both on-farm uses, such as nurseries, water pumping and nut dryers, as well as post-harvest processes. Any sort of mandate would lead to substantially higher natural gas costs for California businesses and residents.

For example, biomethane is 3 to 7 times more expensive ($10-$20 MMBTU) to produce than conventional natural gas. Energy costs for the agricultural sector have already increased due to the renewable portfolio mandate for electricity procurement, as well as the increased electricity costs associated with the state’s Cap and Trade program.

Decarbonization of the natural gas system will be best achieved by removing the barriers to pipeline injection and incentivizing pipeline injection. Incentivizing decarbonization will ensure that the best projects with the most greenhouse gas bang for the buck, such as dairy biogas, will be developed before less cost-effective projects.

In closing, we thank you for the opportunity to provide comments on the proposed discussion draft. Our industry has a committed interest in the smooth functioning of California’s freight systems. The safety of our product and many California jobs depend on it. We are engaged and welcome future opportunities to continue to discuss the Sustainable Freight Strategy with both staff and Board Members.

Respectfully submitted by:

African American Farmers of California
Agricultural Council of California
Almond Hullers and Processors Association
California Association of Wheat Growers
California Bean Shippers Association
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Farm Bureau Federation
California Fresh Fruit Association
California Grain & Feed Association
California Pear Growers Association
California Seed Association
California State Floral Association
California Warehouse Association
Dairy Cares
Far West Equipment Dealers Association
Milk Producers Council
National Hmong American Farmers
Nisei Farmers League
Pacific Coast Renderers Association
Pacific Egg & Poultry Association
Western Agricultural Processors Association
Western Growers Association
Western United Dairyman