Get ready for the largest federal investment in clean vehicle technologies the country has ever seen.
Four years ago, as we awaited the first rounds of Volkswagen Settlement funding opportunities for green transportation, I said last decade’s $300 million in transportation-specific Recovery Act funding “now looks like a child’s sparkler in comparison to the nearly $5 billion in incentives funding on the near-term horizon.” That sparkler now seems like just a glimmer as we gain a clearer picture of the $1.2 trillion in funding created by the Infrastructure Investment and Jobs Act (IIJA) and $750 billion from the Inflation Reduction Act.
Infrastructure Investment and Jobs Act and Inflation Reduction Act
IIJA (also known as the Bipartisan Infrastructure Bill) will see $16.45 billion in continued spending through programs such as Rebuilding American Infrastructure with Sustainability and Equity (RAISE), Infrastructure for Rebuilding America (INFRA), and the National Infrastructure Project Assistance Program. In addition, there is $5 billion in new spending through the National Electric Vehicle Infrastructure (NEVI) program and $2.5 billion for additional charging and alternative fuel infrastructure.
The Inflation Reduction Act will see $1 billion in new spending for Class 6 and Class 7 zero-emission vehicles and infrastructure, $3 billion in new spending to support port electrification, and a new tax credit to support all weight classes of commercial clean vehicles.
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These funds will continue to be allocated for years to come, and the cash grab is just about to start — provided you know where to look.
While federal agencies such as the Department of Transportation, Environmental Protection Agency, and Department of Energy have received their IIJA allocations and people are still making their way through the implications of the Inflation Reduction Act, state transportation agencies will play the most vital role in determining the fate of these funds. Whether it be as awardees, project leads, or funding program developers, the states will hold all the cards as these funds roll out.
Zero-Emission Infrastructure Funding
The goals of INFRA, MEGA, and RAISE are broad and far-reaching, but they ultimately stem from the need to fund large projects that address uncoordinated land-use decisions and improve freight efficiency and mobility. Building out zero-emission infrastructure will play a role here but won’t necessarily figure as a project’s centerpiece.
Where zero-emission infrastructure will find its spotlight is with National Electric Vehicle Infrastructure (NEVI) funding, set to roll out at the state level in the coming months. Each state and territory recently submitted individual plans to roll out EV charging infrastructure along key corridors. For instance, Texas published a comprehensive plan to expand electric vehicle recharging stations to include almost all interstate routes. This includes an aggressive engagement strategy with the private sector to install DC fast-charge stations, as well as coordination with metropolitan planning organizations to identify suitable locations for Level 2 and DC fast-charging infrastructure. With each state’s plan now published, the next steps will be requests for proposal issued by each state DOT.
Impact on the Medium- and Heavy-Duty Segment
The Inflation Reduction Act, signed into law in August, has implications across the clean transportation landscape, but some of the most compelling impacts fall in the medium- and heavy-duty transportation segment. Key language includes an incentive program to fund up to 100% of the incremental cost of replacing Class 6-7 zero-emission vehicles, deploying ZE infrastructure, workforce training, and planning activities to accelerate deployments. There is also a new funding opportunity, offering $2 billion in grants for domestic ZEV manufacturing opportunities.
Learning from European Partners
Economic stimulus packages aren’t just an American effort. In Europe, the Multiannual Financial Framework 2021-2027 and NextGenerationEU is scheduled to invest more than $2 trillion across a variety of initiatives to create a “greener, more digital and more resilient Europe.” In addition, the European Commission’s proposed European Green Deal, with commitments from all 27 member states, aims to turn the EU into the first climate-neutral continent by 2050. Road transportation decarbonization is a large part of meeting this goal.
U.S. federal and state agencies will be able to learn from these efforts by their European partners, while multinational OEMs can leverage competitive and technological advantages gained from the EU’s early zero-emission truck and bus deployments.
The time has come to find the funding needed to achieve your company’s environmental and economic goals.
This column first appeared in the October 2022 issue of Heavy Duty Trucking. Road to Zero is a column authored by both HDT's editors and various experts in the trucking industry. The column explores the path toward zero-emissions trucks, including the alternative fuels and technologies that will get the industry closer to carbon reduction goals.