Power & Pipes

FERC, CFTC, and State Energy Law Developments

The California Air Resources Board (CARB) voted on August 25, 2022, to approve the Advanced Clean Cars II rule that prohibits the sale of new gasoline-fueled cars by 2035. The rule sets forth a plan whereby automakers must deliver an increasing amount of zero-emission light-duty vehicles each year, essentially phasing out the manufacturing of gasoline-fueled cars. The requirements begin in 2026, when 35% of cars manufactured for sale must be zero-emission or plug-in hybrid vehicles. The required amount rises to 68% of cars manufactured for sale by 2030, then to 100% by 2035.

The rule applies to automotive manufacturers and covers only new vehicle sales, meaning cars already on the road are not affected by the regulation. The rule allows plug-in hybrid, battery electric, and hydrogen fuel cell vehicles to count toward an automaker’s quota requirement. However, plug-in hybrid vehicles must have an all-electric range of 50 miles and may only make up 20% of the automaker’s overall zero-emission quota. Additionally, battery electric vehicles must have a 150-mile range to qualify.

California is the first state to adopt a regulation that sets a definitive end to the sale of internal combustion vehicles. This historic regulation will cut greenhouse gas emissions from vehicles by 50% over the course of the plan, resulting in cleaner air and a reduction in climate-warming pollution. California’s rule also opens the door for other states to adopt the same or similar regulations. Representatives of New York, Washington, Rhode Island, and Massachusetts have already expressed their intent to enact similar state regulations, while representatives of New Jersey and Maryland have stated that they are reviewing California’s new rule.

While the auto manufacturing industry has already started the transition to electric vehicles, California’s new rule will further accelerate it.

Currently only 5.6% of new car sales are electric vehicles. Meeting the new rule’s target quotas will require the automotive market as a whole to make the transition, supported by a full build-out of charging infrastructure as well as a reliable electric utility grid.