AB8: It Began With an Idea

Originally published October 7th, 2013

As advocates for clean transportation, we float ideas constantly.  Some don’t go very far; some result in approximately $2 billion of funding for alternative fuels and vehicles and air quality improvement programs. To be fair, only one idea of ours has resulted in the latter.

On September 28, 2013, Governor Brown signed AB 8 (Perea), which extends critical alternative fuel and vehicle investments and diesel emission reduction programs through 2024. This tremendous victory for the State’s long-term environmental and economic health would not have happened without the planting and execution of one key idea: using the Clean Fuels Outlet (CFO) regulation to mandate the installation of hydrogen fueling stations.

Why was the CFO so important?

The CFO, originally created by the Air Resources Board in 1990 to provide methanol, ethanol, and CNG fueling outlets, was adapted and adopted in 2012 to ensure hydrogen station development kept pace with hydrogen fuel cell electric vehicle (FCEV) sales projections. The concept of the regulation was simple; if you sell gasoline or diesel in California, you need to provide a proportionally fair amount of clean fuels to meet projected demand. Adapting the CFO for hydrogen was an idea pitched and championed through the process by EIN.

For obvious reasons, oil companies were not fans of the CFO regulation and its 2012 changes. However, rather than pursuing a protracted legal battle likely damaging (or at least resource intensive) to both sides, the ARB and Western States Petroleum Association (WSPA is the trade association that represents the bulk of companies involved in petroleum business) struck a grand bargain: the ARB would put the CFO on the shelf if WSPA and its members could help pass legislation to fund hydrogen fueling stations.

AB8 was crafted in this vein; it effectively eliminates the CFO and supports public investment in hydrogen. However, hydrogen is only part of the story. The bill authorizes substantial investments in all alternative fuels and vehicles (hydrogen, electricity, biofuels, CNG, propane, etc.) and also extends the Carl Moyer Diesel Emissions Reduction and Air Quality Improvement Programs.

WSPA support was critical to the effort.  In California, any bill that raises fees or taxes must achieve a 2/3-majority vote in both the Assembly and Senate to make it to the Governor’s desk. AB8 would not have passed without WSPA’s political clout. In short, the CFO turned WSPA into powerful alternative fuel and vehicle advocates.

As with any action of this magnitude, it takes a village to bring a long-term vision to fruition. A tremendous amount of credit rests on the shoulders of the ARB and legislative leaders, as well as the broad coalition of organizations that worked to generate support for AB 8.  AB 8 would not have happened without them.  But it also would not have happened without the CFO Regulation, which turned out to be a good idea made even better.