The transportation sector represents a quarter of Canada’s greenhouse gas emissions and to better manage transport-related GHG emissions, businesses with large fleet operations need to reduce their carbon footprint, and, ideally, transition to zero-emission vehicles (ZEVs). In addition to a strong policy landscape, building up commercial ZEV deployment in Canada will require active involvement and partnership from a wide variety of stakeholders. The report “Building a zero-emission goods-movement system: Opportunities to strengthen Canada’s ZEV freight sector” focuses on the electrification of vehicles used in urban deliveries and examines a range of vehicle types deployed for that purpose. It also analyses the current policy landscape and identifies opportunities for enabling a transition to ZEVs for freight movement in Canada. REGlobal presents the key highlights from the report:
Building a supportive ZEV policy landscape
ZEVs are defined as vehicles that have the potential to produce zero tailpipe emissions and include battery-electric vehicles, plug-in hybrid electric vehicles, and hydrogen fuel cell vehicles. There are several barriers to ZEV adoption, including high upfront capital costs, infrastructure availability, insufficient consumer awareness, and the reality that commercial fleet vehicles may have up to a 20-year lifespan, and it takes time for fleet operators to retire and replace their fleets. A supportive policy landscape is necessary to help businesses with commercial fleets to overcome these obstacles. The ZEV policy landscape can be divided into four categories: long-range strategic planning and regulations; incentives (financial and non-financial) for vehicle procurement and widespread deployment; charging infrastructure; and fleet-capacity development. Each of these categories require investments to support the development of an integrated zero-emission transportation system. Ultimately, a suite of policies and programs (i.e., a ZEV ecosystem) that helps overcome the different barriers to ZEV adoption is needed.
Governments at all levels play an important role in establishing a supportive ZEV ecosystem through policies, infrastructure programs, financial and non- financial incentives, and other mechanisms. ZEV sales targets and mandates, for example, are policy levers that are in the domain of federal and provincial governments, while curbside management strategies are more of a municipal matter. Co-ordination across jurisdictions and sectors will be critical in developing the support required to accelerate commercial ZEV deployment. It is important to recognize the critical roles played by other actors, including automakers, utilities, and other non-governmental organizations such as non-profits, academia, or research institutes.
Strategic planning and regulations
Several jurisdictions across Canada have already adopted strategies to increase ZEV uptake in order to act on climate change and reduce greenhouse gas emissions. In Quebec, for example, the 2015–2020 Plan d’action en electrification des transports includes measures to promote electric transportation, develop the industry, and create a favorable environment. Quebec’s recently announced 2030 Plan for a Green Economy similarly has a priority on electrification and is intended to support targets of 37.5% GHG emission reductions below 1990 levels as of 2030 and 1.5 million electric vehicles on the road by 2030. Similarly, the City of Toronto’s 2020 Electric Vehicle Strategy, closely tied to its TransformTO climate strategy, assists the strategy’s goal of transportation using 100% zero-carbon energy sources by 2050. For the most part, electric vehicle (EV) strategies in Canada are targeted toward light- duty passenger vehicles; they only intermittently reference goods movement and medium- and heavy-duty vehicles. Given the fact that freight activity is rising in Canada’s largest cities and heavy-duty freight trucks contribute more than one-third of Canada’s transportation-sector emissions, strategies could include commitments toward electrification and decarbonization of all goods-movement vehicles.
The federal government has established a target that stipulates ZEVs should account for 100% of the light-duty vehicle sales market by 2040. At the provincial level, British Columbia and Quebec both have light-duty ZEV sales mandates. Canada could benefit from a mandated ZEV sales target in the medium term, one that encompasses light-, medium-, and heavy-duty freight vehicles. Moreover, ZEV sales mandates and targets for medium- and heavy-duty vehicles could be segmented according to suitability for electrification. California’s recently adopted Advanced Clean Truck Regulation, for example, which seeks to accelerate electrification among medium- and heavy-duty vehicles, sets different sales percentage requirements for Class 2b–3 trucks, Class 4–8 straight trucks, and tractor trucks.
Long-term investment plans can also be useful in coordinating the complexities of multiple funding programs and related policies that exist at the federal, provincial and municipal levels. The California Air Resources Board, for example, has a Heavy-Duty Investment Strategy that includes recommendations for investments over three years. The total funding recommended per year ranges from $465 million to $875 million to support different phases of ZEV technology readiness — including early-stage demonstrations, pilot projects, and commercial-ready phases.
Incentives for deployment
Financial incentives are crucial in reducing one of the main barriers to electric vehicle adoption — high upfront purchase prices. The initial purchase price of a zero-emission truck can be significantly above that of conventional diesel options across a wide range of vehicle classes and use-cases. Financial incentives can help close this gap. In terms of publicly led incentive programs, there are three prominent programs providing incentives for zero-emission vehicle procurement in North America: British Columbia’s Specialty Use Vehicle Incentive Program (SUVI), Canada’s Incentives for Zero-Emission Vehicles (iZEV) program and California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). The renewal of financial incentives funded with set allocations or set to expire at pre-specified dates could catalyse long-term planning for the goods movement industry.
Some incentives prompt a preferred behavior by providing the targeted consumer with valuable benefits. The Province of British Columbia and City of Vancouver have already begun to implement non-financial incentives, including privileged access to high occupancy vehicle lanes and dedicated parking stalls. In Quebec, EVs with green license plates can freely access reserved lanes and certain tolled highway sections. Similarly, Ontario’s Green Vehicle License Plate Program provides individuals and fleets access to high-occupancy vehicle and toll lanes on certain highways. Other non-financial incentives include privileged access to in-demand curbside spaces, implementation of low or zero-emission zones which would restrict access by internal combustion engine vehicles and exempting EVs from restrictive regulations such as noise bylaws.
Range anxiety is one of the main barriers for ZEV adoption in goods-movement fleets. Fleets with longer and more unpredictable routes are more likely to require on-route charging and are less likely to be able to depend on depot and private charging than those with shorter and more predictable routes — which are more common in urban environments. As such, it is expected that the electrification of light- and medium- duty freight vehicles for urban delivery purposes will occur sooner than the electrification of heavy-duty freight and long-haul segments. To encourage electrification, there are opportunities for incentive programs to support the buildout of depot and private charging infrastructure while public infrastructure programs can be designed to maximize applicability to goods-delivery fleets with longer or less predictable routes.
With respect to the design of financial programs, considerations include: sufficient cost share to incentivize investment into infrastructure; inclusive program eligibility and accessibility to ensure access by businesses of all sizes and types with freight and delivery operations; project size restrictions that do not unduly limit access to smaller players; and a broad range of eligible costs including those associated with electrical upgrades and with feasibility and planning studies for related capital work. The Zero Emission Vehicle Infrastructure Program (ZEVIP) is one of Canada’s most significant initiatives supporting infrastructure for goods-movement fleet electrification. The purpose of the program is to “deploy a network of zero-emission vehicle charging (Level 2 and higher) and refuelling stations in more localized areas where Canadians live, work and play,” as well as to support strategic projects for transportation interests including last-mile delivery fleets and corporate fleets. The program was allocated $130 million for 2019-2024.
The construction of publicly accessible EV charging networks is often a staple of federal, provincial and municipal electric vehicle programs. These networks also often include high-powered EV fast chargers. Prominent examples include the following:
- The federal Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (EVAFIDI) offers repayable contributions, with the goal of creating a network of fast charging stations coast-to-coast along national highways, hydrogen refuelling stations in metropolitan areas, and natural gas refuelling stations along freight corridors. As of March 2020, EVAFIDI had selected nearly 900 projects for funding — including 837 electric vehicle fast chargers and eight hydrogen refuelling stations.
- The Electric Circuit is a charging network for EVs containing 240-volt and 400- volt stations located across Quebec and Eastern Ontario. As of January 2019, the network contained over 1,700 charging stations, including nearly 170 fast- charge stations. The Electric Circuit is publicly accessible but requires a membership. Electric Circuit partners include businesses such as Metro and Rona, and municipalities including the City of Montreal and Quebec City.
- In British Columbia, the Public Fast Charger Network is being built out by the province, municipalities, and private sector organizations.
- In Alberta, municipalities including the cities of Calgary and Lethbridge are working to build a network of charging stations across southern Alberta, called the Peaks to Prairies Network, which will include fast charging and Level 2 stations, accessible by any EV type. Grant funding was received from the Government of Canada and the Government of Alberta.
Governments can work effectively with relevant private and non-governmental organizations to create education and awareness campaigns pertaining to commercial ZEV adoption. Several jurisdictions have already developed important education and awareness-building resources; however, these efforts are almost exclusively targeted at passenger ZEVs. As an increasing number of medium-duty ZEV models suitable for commercial goods-movement applications reach market readiness, governments can equip fleets with the information necessary to support a transition to ZEVs.
Several notable information hubs for passenger ZEVs have been established in recent years that could be expanded to provide support for commercial fleets interested in procuring medium- and heavy-duty ZEVs. Plug’n Drive is a non-profit organization with an online information hub that highlights information pertaining to EVs including advantages, models available in Canada, government incentives, and other frequently asked questions. The organization also operates an EV Discovery Centre in the GTHA that offers test drives, provides resources related to public and home charging solutions, and facilitates information-sharing on all topics EV-related. Similarly, Plug In BC provides a central source of information on EV-supportive programs and initiatives. It was established by the Fraser Basin Council in collaboration with government, industry, and others. Unlike Plug’n Drive, the Plug In BC website also highlights resources pertaining to medium- and heavy-duty fleet procurement. All levels of government could play a role in promoting existing ZEV education and awareness initiatives. All levels of government could work with the administrators of these programs to ensure resources pertaining to medium- and heavy-duty ZEVs are included.
Opportunities for expanding ZEVs
This report identifies 10 opportunities to support the expansion of zero-emission vehicles for goods movement, and to help Canada achieve its 2030 and 2050 climate targets.
- Co-ordinated ZEV strategies for commercial vehicles — along with associated long-term investment plans — promote uptake within goods-movement fleets. Sales mandates for medium- and heavy-duty vehicles are effective tools in speeding the transition to clean freight delivery.
- If Canada set a target of 25,000 new zero-emission medium- and heavy-duty vehicles by 2025, a total investment of about $5 billion would be required for vehicle procurement alone — a cost that could be shared across sectors. Currently, the federal government’s Incentives for Zero-Emission Vehicles program does not include medium- and heavy-duty commercial vehicles.
- Increased transparency and certainty on the long-term renewal of government financial incentives would provide increased ability for the freight delivery industry to plan its transition to zero-emission vehicles over time.
- Expanding non-financial mechanisms, such as green licence plate programs, that give preferential treatment to zero-emission vehicles, to commercial vehicles, could encourage the transition to low-emission fleets.
- Commercial fleet operators would be more likely to move to ZEV fleets if municipalities restricted the travel of high-polluting vehicles, over time, and set targets for emission reductions that align with Canada’s decarbonization goals.
- Municipalities have the authority to implement curbside management tactics, which could incent commercial ZEV uptake.
- If Canada set a target of 25,000 new zero-emission medium- and heavy-duty vehicles by 2025, in addition to investments in vehicle procurement, an investment of about $350 million in charging and refuelling infrastructure would be required.
- At the provincial level, charging infrastructure incentive programs could become more useful if funding were expanded to directly target freight vehicles, with flexibility for private, single-use access, and to ensure coverage of higher-powered stations.
- Buildout of publicly accessible charging and refuelling infrastructure along national highways or provincial or municipal roads could be done in co-ordination with relevant stakeholders in the goods-movement sector to keep their charging needs in mind.
- Investments in labour market programs to support good paying jobs and this new energy system are essential for the successful deployment and maintenance of zero-emission vehicles in commercial fleets, especially as the sector moves to scale up from pilot to mass adoption.
The key findings are based on an identification of policy and program gaps and the efficacy of programs, where information on program performance is publicly available. For Canada to meet its 2030 climate targets and drive toward a net-zero economy by 2050, effort and investment is required to accelerate decarbonization efforts in the freight and goods-movement sector. This includes developing long-range EV strategic plans and associated capital investment plans for goods-movement vehicles; implementation of a sales mandate for medium- and heavy-duty vehicles; financial investments for vehicle procurement and non-financial incentives to attract widespread deployment; charging infrastructure; and resources and information to build fleet capacity through skills training.
Driving Canada’s early zero-emission vehicle transition requires an all-hands-on-deck approach. If Canada wants to have 25,000 new medium- and heavy-duty vehicles on the road by 2025, an economy-wide investment of about $5 billion will be required for vehicle procurement and about $350 million for charging infrastructure.
Led by the Pembina Institute, the Urban Delivery Solutions Initiative is a national network of businesses, researchers and an environmental advocacy organization working to create an efficient and low-carbon urban freight system in Canadian cities. This report is a publication of the coalition.
The report can be accessed here