Electric Vehicles — Why Now? webinar transcript

The first of four quarterly presentations on the electric vehicle market presented an overview of the vehicle and charging technology, discussions on the market and regulatory trends that are impacting EV adoption, and presented various strategies to harness renewable energy for net-zero transportation.

Lyndsey Nielsen (00:00:00):

I want to introduce myself. I’m the marketing coordinator at EcoEngineers and I’m delighted to welcome you all to the first of our four quarterly webinars on the electric vehicle market. I’m very excited to be presenting this information to you. This is a little bit new for EcoEngineers, and I hope that you enjoy the topic, but first let’s go over a couple of housekeeping items.

We will be recording the webinar and you’ll be getting a link to the recording when it’s finished processing. If you have questions, you can put them in the questions chat function. We will try to answer as many as we can before the end of the webinar. We will also be sending out a survey at the end of the webinar. It’ll pop up once you close the window, please fill it out to let us know what you think we should be presenting in the future. So we really want to know what you guys think. And before we kick it off to the presenters, I want to show a brief video explaining how EcoEngineers can help you in this low carbon world.

Narrator (00:01:01):

Carbon is the biggest disruptor of the 21st century, and the world as we know it is changing. EcoEngineers can guide you to make the best decisions as you navigate toward your clean energy goals. A diverse team of carbon analysts, engineers, scientists, auditors and regulatory specialists are trusted advisors of the clean energy fuel sectors worldwide. Clean energy regulations are amaze. We simplify them with an unbiased approach and fully manage your compliance. Modeling your carbon reduction is complicated. We quantify your emissions with a rigor based in science. Together we can create markets that will protect and grow your investment. We create sustainable solutions for a better tomorrow. We are EcoEngineers.

Shashi Menon (00:01:56):

Thank you, Lyndsey I’m Shashi Menon and I serve as the CEO of EcoEngineers and welcome to the webinar. That video you just saw, that’s EcoEngineers in a nutshell. We’ve been helping the de-carbonization of the transportation sector for over a decade. And during that time you’ve seen just about every possible fuel type and every project type. And it’s that ground level experience that we hope to bring to you in these webinars.

Shashi Menon (00:02:24):

Now, as all of you are aware, the transportation sector is under intense pressure to decarbonize, and we have … The past decade you’ve seen like sort of very robust growth of biofuels. And what we’re seeing now is a lot of loud calls for electrification and that’s what we’re here to talk about today. Electricity seems to be rising to the top as one of the more popular, clean fuels. Cost electrification of growing from a variety of sectors, politicians, the climate agenda regulators, and more recently the automakers.

Shashi Menon (00:03:02):

Almost all the automakers have come out and stated some very ambitious goals and they’re promising some very real investments and the millions and billions of dollars into transforming their supply chains to accommodate electric vehicle production and distribution.

Shashi Menon (00:03:16):

EV use is definitely accelerating across the globe. The question really is will it become a mainstream? It may be mainstream in some parts of the world. And I think in Norway and perhaps to a lesser extent in California, but it’s still not quite mainstream for the majority of the world. Most of us are still dependent on petroleum-based gasoline and diesel for transportation. And the question has changed, will that change. And I think that the 2020 statistic that 2020 could be the inflection point. And we may be seeing that transition.

Shashi Menon (00:03:57):

The EV sector to kind of turning the corner and the real … I mean, and if it does materialize, if the EV sector does become mainstream, then we will be witnessing what I think is one of the biggest sort of transformations of the transportation sector since the invention of the internal combustion engine over 100 years ago. That’s what we heard to talk about. And I’m joined today by Daniel Ciarcia, our senior regulatory consultant and team lead for all things electric, Dan is an electrical engineer and he joined our team after a very successful career in the development of the EV charging networks. So he brings an abundance of experience in that space.

Shashi Menon (00:04:43):

I’m also joined by Sarah Caswell and Sarah keeps close tabs on what’s happening in Washington D.C, and several state legislatures to keep us up to date on political and regulatory developments. And finally, I’m also joined by Brad Pleima, a senior engineer and team lead for renewable natural gas. And he will be talking about actual projects that he’s seeing on the ground where some biofuels and RNG is being used to electrify fleets.

Shashi Menon (00:05:09):

So today’s the first half of a series of four webinars we’re going to do on this subject. And today we’re going to give you an overview of the EV sector, the kind of vehicles that are available, the different kinds of charging and what are some market drivers and definitely talk about the regulatory and incentive outlook. And finally, we will talk a little bit about some case studies and projects where renewable energy has been harnessed to fuel electric vehicles and what are some results of those things.

Shashi Menon (00:05:44):

And in future webinars, we’ll be going into a deeper into charging infrastructure vehicle trends, and just overall what we see as the future of mobility as it’s happening. But before we launch into the webinar, I do want to talk a little bit about the problem as I see it.

Shashi Menon (00:06:02):

And the problem, I think as I see it is a possible gap between what is being promised by automakers and regulators in policy and what needs to happen. And for example, this is a sort of a hypothetical scenario, and let’s say that we want to achieve 20% electrification of our fleet by 2030, that’s in the next 10 years. And some would say, it’s got to be higher than 20%. And some would say, maybe won’t even be 20%, but let’s just say it’s 20%. And if 20% of all registered vehicles were EV in 2030, we’re talking about 68 million registered EVs on the road. And you’d need ed sales at a rate of 21 million a year, and we have to hit that number.

Shashi Menon (00:06:52):

So it’s the enormity of that job is intimidating. And my question is, how is all this going to happen? I mean such a transition is going to place an immense amount of stress on a variety of sectors, not just EVs. It’s going to be on car sales and battery production, railroad mining, energy storage, clean power infrastructure. I mean, everything is going to get very, very stressed out over the next 10 years. And again, I keep asking the question, how is all this going to happen?

Shashi Menon (00:07:25):

So I’m hoping we try to answer that question in our series of webinars. And with that question, I want to invite Dan to take over and lead us into the world of EVs.

Daniel Ciarcia (00:07:36):

Appreciate that. That was a great position for the talk today. You raised a lot of really solid points around the challenges ahead and really what it all looked like as we move ahead through a transformation to electric vehicles. I’d like to start here by currently kind of setting a baseline in knowledge and kind of go through a few of the sort of background topics with electric vehicles before we get into where we’re headed kind of globally what the transformation.

Daniel Ciarcia (00:08:11):

So first let’s start with the vehicle. It’s always best to start with the vehicle itself. It is quite a different type of vehicle from an internal combustion engine. It has far fewer parts. The basic, this is a fairly simple diagram of an electric vehicle, but the components in electric vehicle are the battery pack, which stores the energy, a charger or a rectifier which converts the energy from our grid power into the battery.

Daniel Ciarcia (00:08:42):

And then motors, which are typically housed within the individual wheels, either two motors for two wheel drive or four motors for all wheel drive. And then there’s the brains of the vehicle, a controller that all the mechanisms, and all the energy control. So you may notice that there are some components that are really missing in that and that’s there’s no emission system because there’s no there’s no muffler, no [cupboard 00:09:12], because there’s no internal combustion.

Daniel Ciarcia (00:09:15):

So there’s no tailpipe emissions from an electric vehicle. It’s a lot quieter. There’s no engine, motors run a lot more quiet. In fact, some OEMs have actually created artificial sounds to make up for that. There are much fewer moving parts in electric vehicle. A internal combustion engine has about 2000 moving parts. An electric vehicle has about 20.

Daniel Ciarcia (00:09:39):

So that’s quite a dramatic difference and that really leads to the next point, which is lower maintenance. If you have order of magnitudes, fewer moving parts, the maintenance will be far reduced. That also leads to more efficiency. Electric motors are about 90, 95% efficient. So that means the energy in the battery pack will be converted to motion at a much higher rate than the conversion of a liquid fuel. An internal combustion engine is about 35% efficient. And a lot of that goes to waste heat and other things.

Daniel Ciarcia (00:10:13):

Electric cars are actually quite well in performance and acceleration. So they’re quick and in a lot of ways that they perform more solidly than an internal combustion engine in terms of pickup. And there’s no idling. If you’re sitting at a light, you’re not burning any energy sitting at that light or a stop sign. Also something very unique with electric motors is that when you are slowing down and actually recapture some of that energy from breaking and slowing down and puts it back into the battery, it doesn’t wear down the battery, it doesn’t wear down the brakes and also provides more energy.

Daniel Ciarcia (00:10:51):

But of course there are disadvantages to electric vehicles. They are range limited. And by that, I mean, you can only put in as much as the battery can hold for energy. A typical sort of median car has about 200 mile range. You can get more expensive higher end vehicles that have maybe 350 miles range with today’s technology. Charging time is slower than filling up an internal combustion engine. And then finally electric vehicles are still more expensive than internal combustion engines although all of these disadvantages are being addressed with improvements year after year.

Daniel Ciarcia (00:11:30):

Today, it may not be obvious in our everyday lives, but electrification has already entered nearly every mobility application to some degree. So from personal mobility with scooters and e-bikes, very prevalent all the way up to heavy duty city buses, tractor trailers, and then everything in between and focus is really on passenger light duty vehicles in terms of really transitioning our world of transportation. But all of these different sectors are also electrifying as well to some degree.

Daniel Ciarcia (00:12:07):

On the right. I have some acronyms, I won’t spend a lot of time on this but battery electric vehicles are full electric vehicles. Hydrogen, we’ll talk about, there are hybrid type vehicles that have both internal combustion engines and batteries, and then sort of a general term of ZEV for zero emission vehicles. That means a vehicle that has no tailpipe emissions.

Daniel Ciarcia (00:12:30):

So let’s go into the charging. I mentioned charge time takes a little bit longer, fill a gas lean tank at a gas station. There are four general areas of charging. The first is level one charging, and this is really, think of this as an extension cord, a smart extension cord, but an extension cord that you plug your car into a wall outlet. It’s very slow, some refer to it as a trickle charge, about two to five miles per hour, get put into your car, but it’s inexpensive and it’s pretty ubiquitous. You can plug in anywhere.

Daniel Ciarcia (00:13:04):

Level two is the most really common type of charging. This puts about 10 to 20 miles of range into your vehicle per hour, has a little bit more cost to it. The cost here are for hardware. So it doesn’t include installation costs or any other subscription services that might come with it. But the level two charging is really appropriate at home charging, but also at workplace and in public parking garages, in public spaces as well.

Daniel Ciarcia (00:13:34):

Then the next level up is DC fast charging. DC fast charging can actually put 60 to 80 miles of range into a vehicle in about 20 minutes. It’s a very fast, very high energy, but much more expensive. So obviously that doesn’t have as much of an application in your home, but it’s great for public places with high turnover, rapid turnover of the parking spaces. And especially in highway corridors and in medium and heavy duty applications where the battery packs are much larger wireless.

Daniel Ciarcia (00:14:03):

Wireless we’re not going to spend too much time dwelling on wireless, but it is a technology that is emerging and really will be key when autonomous vehicles become more prevalent. So wireless doesn’t require any cords at all. You just park your car over a loop in the road and it starts charging your vehicle.

Daniel Ciarcia (00:14:24):

In the world of electric vehicles, there’s hydrogen fuel cell electric vehicles as well. This is a vehicle in motor system where you pour a liquid hydrogen fuel into a tank, and that hydrogen gets converted to electricity. So once it gets converted to electricity, it’s the same as any other kind of electric vehicle that has a battery and drives motors for the motion.

Daniel Ciarcia (00:14:51):

It has some advantages, it’s a faster filling time. It also provides you with a lot more power density, power per weight of the vehicle or of the tank. This allows applications such as long haul trucking, but of course it’s very expensive and it’s quite complex to create the hydrogen. So it’s not an emerging technology for light duty vehicles, at least at this time.

Daniel Ciarcia (00:15:18):

So Shashi mentioned there’s a lot of activity going on globally and particularly with government initiatives and with the OEM, the automobile original equipment manufacturers. This I won’t go to all these bullets, but just to give you a sense as to the activity around mid decade here, there’ll be over 100 models of vehicles to choose from. You can see the OEMs listed here. They’re getting very confident in their product roadmaps that they’re actually starting to forecast significant sales, rather than just niche sales by mid decade.

Daniel Ciarcia (00:15:55):

By the end of this decade, auto manufacturers are forecasting that about half of their sales will be electric. And even a few countries have announced plans to completely phase out internal combustion engines by the end of the decade. By 2035, many manufacturers will, and governments are declaring that everything sold will be zero emission vehicles. So that everything will be EV or potentially hydrogen EV. California, Massachusetts in the US are kind of leading that right now, but others are sure to follow.

Daniel Ciarcia (00:16:28):

And then by 2050, a lot of the OEMs are projecting to not only have the vehicles be zero emissions, but have their entire operations production manufacturing be zero carbon by mid century. So that’s quite ambitious. So those are goals and aspirations. And I think we’re well on our way to heading in those directions. But what’s the reality today? Where do we stand with electric vehicles today?

Daniel Ciarcia (00:16:56):

In the United States in 2020, 2.3% of the vehicles sold were electric vehicles. And you can see the green bar on the … Green bar represents battery electric vehicles, that’s full electric. And the blue part of that is a hybrid electric, which is really shrinking. So it’s really, the market is shifting towards full electric. According to HIS market forecast, this is expected to double next year to 4% of the vehicles sold. And by mid decade, about 10%, across the US will be electric sales.

Daniel Ciarcia (00:17:30):

Globally, similar type of ramp up but it’s actually happening a little quicker. So the US is a little behind the pace of the global pace right now. In 2020, the global sales were 4.2% of all vehicles sold, and that’s really led by a big surge in China and parts of Europe. And the expectation is that will continue to rise exponentially as it is in this chart.

Daniel Ciarcia (00:18:01):

From 2019 to 2020, there was a 43% increase in EV sales. So if that growth continues, then this number is really going to shoot up quickly. China, as I said, is leading in terms of absolute volume at 1.3 million units sold last year. And Norway, as Shashi mentioned in the beginning, it has a really interesting case study because they’re already at 54% of their vehicles are electric, as of 2020, sold in 2020. So they’ve got a lot of public incentives in place and they’ve really embraced it and they’re kind of a model for other parts of the world.

Daniel Ciarcia (00:18:43):

So let’s kind of focus down a little bit more here on the vehicles themselves, take a look at the economic and environmental impact on a specific vehicle. So this slide shows the comparison of the environmental impact of an electric vehicle versus an internal combustion engine vehicle.

Daniel Ciarcia (00:19:07):

If you look at the blue bar with the manufacturing process, they’re roughly even for internal combustion engines and EVs. EV has a little more carbon intensive to create the battery. So more energy required. And the disposal part, the gray part, they’re both about equal in terms of the end of life of vehicle. But the real difference is the middle, that’s the use case. That’s the portion of the life of vehicle that you’re driving, the vehicle and operating it and maintaining it.

Daniel Ciarcia (00:19:36):

According to the Union of Concerned Scientists who put together this data, that phase is 49 mega tons of CO2 is admitted through that use phase for an internal combustion engine and only 19 mega tons of CO2 equivalency for the electric vehicle. So it’s about half over the life of the vehicle, about half of the environmental impact.

Daniel Ciarcia (00:19:58):

Now, actually the study didn’t include biofuels. So we don’t know exactly where that would be on this graph, but it’s a really nice side-by-side comparison of internal combustion engine and electric vehicles. Another factor here is the energy security that results in using electricity instead of imported oils and fuels. Electricity is generally domestically produced, which means it won’t be subject to embargoes or shortages or international events. And it will be more stable energy product, as well as providing more jobs locally and regionally, in the electric generation sector.

Daniel Ciarcia (00:20:39):

We can do a similar comparison for the economics of the vehicle, and it looks fairly similar. If you compare side-by-side on internal combustion engine and electric vehicle, there’s more upfront cost in that electric vehicle. It’s averaging about 16% more today for an electric vehicle over an internal combustion engine.

Daniel Ciarcia (00:21:01):

And, let’s talk about that a little bit, that trend has been dropping very quickly. In 2010, 10 years ago the cost of a battery was over $1000 or above $1,500 per kilowatt hour. And in 10 years that has dropped down to 150 kilowatt hours. And it’s expected to be, about 80 or $90 per kilowatt hour, in the three to five-year range. So by mid decade, it’s expected to be about 80 to $90 a kilowatt hour, which will put it at cost parody with an internal combustion engine. And that’s really the goal to get a cost parody to really have that side-by-side be clean.

Daniel Ciarcia (00:21:39):

And that’s really where incentives are really stepping in at this point to, to bridge that gap. But very quickly, those incentives won’t be needed. Beyond that initial purchase price in blue there, you get to the orange part, which again is the use phase, fueling of a vehicle and over the life of a vehicle, this is $1000, a 200,000 mile life expectancy, that would equate to about $9,000 in electricity or $24,000 in gasoline. Again, using all averages to even out this measure.

Daniel Ciarcia (00:22:18):

And then there was a little bit of savings also on the maintenance as well. Electric vehicles expected to have about four to $5,000 less in maintenance over the life of the car. So total, is about 10 to $12,000 difference in cost of ownership, favoring electric vehicles over the life of the vehicle. So I would like to actually transition the conversation now to Sarah, who is our policy experts at EcoEngineers. And she’s going to discuss what’s happening on the regulatory front for electric vehicles.

Shashi Menon (00:22:55):

Good. Thank you, Dan before transition to Sarah, I just want to briefly interject and can I ask you a very quick question. If we can, please go back to the slide you showed on the environmental impact of electric vehicles. I think we do a lot of lifecycle modeling EcoEngineers, and we did not do this particular modeling. This is done by the Union of Concerned Scientists. And you mentioned that this does not compare the carbon intensity of electric vehicles to biofuels.

Shashi Menon (00:23:30):

And again, it is something I believe that if an internal combustion engine was run on biofuels, it would certainly have a carbon intensity, or it could have a carbon intensity depending on the biofuel, very much comparable to an electric vehicle. Do you have good data that compares EV against biofuels? Does that kind of data exist right now?

Daniel Ciarcia (00:23:51):

Unfortunately, there hasn’t been a lot of study of biofuels. Most of the studies have compared gasoline and electric, because those are the two fuels that are in use with current models of vehicles. Bio-fuels was certainly sit in between internal combustion engine and electric vehicle, and it may be even comparable to electric vehicle. It’s hard to tell without doing full life cycles on the specifics of that fuel pathway to determine exactly what the intensity would be to that question.

Shashi Menon (00:24:26):

Would it also be fair to say that the … Is this assuming that the electricity is drawn from the grid, or is there an assumption about the cleanliness of the electricity coming in?

Daniel Ciarcia (00:24:36):

So again, this is using kind of averages for the United States today. This study that the Union of Concerned Scientists did the grid is always getting cleaner and it’s gotten cleaner significantly over the last 10 years in particular. So I would expect that even that impact of 19 mega tons of CO2 equivalency to shrink as the grid gets cleaner as well. And that’s an important point. I think that’s something that needs to keep in mind and the gasoline doesn’t get cleaner, biofuels do get cleaner and electricity get cleaner. So, really that’s where all the gains will come from.

Shashi Menon (00:25:19):

Thank you, Dan. Thanks for answering that. Sorry, Sarah, I didn’t mean to hijack your time.

Sarah Caswell, Esq. (00:25:23):

Not at all.

Shashi Menon (00:25:24):

The stage is yours. Thank you.

Sarah Caswell, Esq. (00:25:26):

Not at all. It’s such an interesting topic and discussion. I think that’s really valuable. And thanks Dan for your great presentation. I wanted to focus on government support as a key driver in this sector. Really it’s necessary, government support is necessary to promote the sector and to sort of speed it up in terms of consumer ownership and incentives for the charging infrastructure necessary for EVs. Public policies at the federal and state levels really serve to help incentivize EV manufacturing, as I said, consumers to purchase and charge their EVs and also States to build out the nationwide charging infrastructure necessary to correspond with the growth of this nascent market.

Sarah Caswell, Esq. (00:26:26):

These incentives take many forms including tax credits for purchasing EVs, rebates on EV registration costs and charging stations, as well as clean fuel standards. The funding of these incentives are from a variety of sources, including government grants and settlement funds from Volkswagen, which if you remember back in 2015, they admitted that they had illegally violated US emissions rules and agreed to provide $3 billion to the US to be used by States to replace the aging trucks, buses, and marine equipment.

Sarah Caswell, Esq. (00:27:10):

The program, importantly does not fund passenger car replacements, but it does support EV charging infrastructure. There’s no doubt that the Biden administration and the current congressional leadership commitments to federal action on US climate mitigation policy is likely to bolster US government support to speed up the transition to EVs. President Biden, his administration, and the current congressional leadership are focused on a unified climate mitigation messaging goals, including one to deploy more than 500,000 EV chargers throughout the US by 2030, and to strengthen US EV supply chains.

Sarah Caswell, Esq. (00:28:02):

Additionally there are reports that the EPA is expected to rule on e-RINs in the near future, possibly even in the impending proposed RFS rules, setting the renewable volume obligations for 21 and 22, that those proposed rules could come out as early as May and also as late as the summer July, maybe even August. They’re expected to be finalized this fall though.

Sarah Caswell, Esq. (00:28:35):

In his first week is president, president Biden held what he called climate day, during which he signed several executive orders designed to bolster federal action on climate mitigation. One was called the Buy America executive order. And under that the new national climate task force is charged with coming out with recommendations within three months, including a plan to utilize the federal procurement power to convert the entire federal vehicle fleet of nearly 650,000 vehicles to EVs by 2030. President Biden and congressional leadership are focusing on crafting a robust infrastructure bill right now with the intent to promote the build-out of EV infrastructure nationwide.

Sarah Caswell, Esq. (00:29:28):

And here, state clean fuel and EV incentive policies and regulations also serve as complimentary EV market drivers to the federal policies. As you can see, only five States currently do not have any type of incentives to promote EV ownership and charging. Several States including California, New Mexico, Minnesota, Washington, and New York have passed, or are working to pass legislation to reduce harmful greenhouse gas emissions from the transportation sector.

Sarah Caswell, Esq. (00:30:02):

These emissions reduction policies serve to drive manufacturing and availability of EVs and the charging infrastructure that they need. So in some, government policy is a key driver of the EV sector, and there’s currently strong momentum at the federal and state levels, propelling additional policies and incentives designed to promote EV manufacturing, ownership, use and the availability of charging options.

Shashi Menon (00:30:32):

Thank you so much for sharing that information on what’s happening in DC in the States. But I want to put you on the spot and I want to ask you a question about what … Besides what is publicly available, what are you really seeing behind the scenes? And especially I’m interested in finding out what are the automakers doing? I mean, publicly, they made this huge announcements that they’re going to completely transform their supply chains, but we also know that they have extensive … They have armies of lobbyists pushing forward certain specific policy agendas.

Shashi Menon (00:31:08):

So do you see any district dependency between the stated goals of the automakers and what they’re actually lobbying, what policies they are lobbying to push forward? Are they lobbying for policies that are advancing EVs and clean fuels?

Sarah Caswell, Esq. (00:31:21):

Thanks Shashi, that’s a tricky question. It’s a loaded question. I’ll do my best to answer it.

Shashi Menon (00:31:26):

Well, I told you I wanted to put you on the spot.

Sarah Caswell, Esq. (00:31:31):

Well, first of all there’s a lot of information out there indicating that ICE vehicles will be a part of our transportation sector for the foreseeable future. Well, beyond 2035. So that’s to be expected. So other clean fuels like biofuels will still be necessary. In terms of announcements or recent announcements by automakers like GM to stop manufacturing, or I think that that’s ICE vehicles post 2035, to me that corresponds with the federal and state government market signals, that everyone has also seen.

Sarah Caswell, Esq. (00:32:22):

President Biden, governor Newsom, governor of Massachusetts, other States, and key markets, transportation market, have all stated the goal of transitioning to EVs exclusively post 2035. So after those market signals from the government, you have other automakers coming out stating that they have complimentary business plans and goals.

Sarah Caswell, Esq. (00:32:59):

I do imagine that they have lobbyists in DC lobbying for EVs and the EV market, but I can’t … It doesn’t seem logical that that would be the only type of issues that they would be lobbying for.

Shashi Menon (00:33:19):

Thank you, Sarah, we’ll keep monitoring the space and thanks for all the hard work you do monitoring what’s going on in DC. Now we’re going to switch gears and we’re going to invite Brad Pleima to talk about what do you see with renewable energy being used to electrify fleets? So Brad, California is obviously at the forefront of this EV revolution and Sarah talked about policy as an instrument to drive electrification and California is already doing it.

Shashi Menon (00:33:46):

So what are you seeing in California? How much EV conversion are you seeing who’s initiating these projects. And can you give us some examples of how these projects are being financed?

Brad Pleima, P.E. (00:33:55):

Sure. No, thanks Shashi. And I want to spend a little bit of time. Dan spent a lot of time on the vehicle side, Sarah, on the policy side, I want to look at more on the renewable energy side and generating low CI electricity in order to power electric vehicles and Shashi hinted at the California low carbon fuel standard. The LCFS program is one state specific program that is well-established and has been operating for about a decade and allows for the charging of electric vehicles from renewable energy sources.

Brad Pleima, P.E. (00:34:35):

And in order to generate credits based on that dispensed into a vehicle. So outside of any state or federal vehicle incentives, this is a program that is right now available to renewable energy producers, that if they can demonstrate that that renewable energy was used to power vehicles, then there are credits, LCFS credits available in the California market.

Brad Pleima, P.E. (00:35:05):

Many other States are looking at this as well. Sarah touched on the federal renewable fuel standard of there is an electricity, an EV charging pathway that hasn’t really been activated. But there’s hope that that will happen here in the very near future. That program would actually stack on top of this California LCFS program or likely any other state incentive program to incentivize charging of these vehicles with renewable energy.

Brad Pleima, P.E. (00:35:36):

So what we want to look at here is if you look on the left-hand side, if you use grid electricity to charge the vehicles. So if you go into your … You have electric vehicle, you plug it in, you’re using grid electricity. That has somewhere around a positive 75 grams of CO2 equivalent per mega Joule. That’s the carbon intensity score or the, CEI score of grid electricity.

Brad Pleima, P.E. (00:35:58):

That alone can generate credits under the California LCFS program because that 75 CEI score is lower than what diesel or gasoline and the California LCFS compliance requirements in the curve. So charging with grid electricity can already generate credits under the program. But what if you look at and replace grid electricity with renewable? So here’s four common examples that we’ve seen of out there actually happening. This is renewable energy that’s being produced. That’s being monetized through the California LCFS program.

Brad Pleima, P.E. (00:36:37):

Landfill gas, so if you take landfill gas and convert that into electricity and charge vehicles, then that has a carbon intensity score than just a general range, somewhere around 50 to 75 grams of CO2 equivalent per megajoule. So better than grid electricity, which means more credits are available and more dollars are available if you’re able to do that.

Brad Pleima, P.E. (00:37:00):

And then you get into wind and solar, both of those are zero CEI sources and a net neutral zero CEI score. And that’s the next level. You can use those two supplies and generate even more credits under this program, and then what we’re seeing and what we’re tracking a lot of in industry on the bio gas RNG side is taking dairy manure or swine manure and digesting that, generating bio gas and turning that bio gas into electricity to charge vehicles.

Brad Pleima, P.E. (00:37:36):

That has a really negative CII score. So somewhere up to negative 300, negative 600, there’s actually several pathways out there that are well above that negative 600 number. And that’s really because of there’s avoided methane emissions from at the dairy farm. So instead of putting that manure into a lagoon and methane is being generated and admitted directly into the atmosphere, the California LCFS program rewards projects for stopping doing that, and then converting that energy in the manure to a renewable energy and using that to offset diesel or gasoline supply.

Brad Pleima, P.E. (00:38:18):

So what’s that look like? Who can participate in these projects and generate these LCFS credits? It’s a little bit different than other fuels where you do have to be in a select region of the country. So anywhere in these green highlighted areas in Canada and in the US, project has to physically be located in those areas. And then you actually have to get the power into a California balancing authority before you can really take advantage of the California LCFS program throughout through a process called book-in claim displacement, swapping. There’s a lot of terms that people use for that, but essentially once you deliver that power into California, or if your project is already in the state of California.

Brad Pleima, P.E. (00:39:04):

You can put those electrons onto the grid and have a virtual contract, or an off-take to charge those anywhere else that’s already connected to the same … To that grid. So it’s a big benefit compared to liquid fuels where you don’t have to physically move these electrons and molecules around, but you do need to be located in these shaded green area, preferably in California. Otherwise you’re going to have more transportation and distribution of getting that electricity into the state.

Brad Pleima, P.E. (00:39:35):

So as I mentioned, wind and solar zero SEI projects, there are, there’s no RINs, you’d be giving up the RIN under the federal RFS program, at least for now. There’s some hope that that will come back here in the near future. And because of that zero CIA electricity, there really is a preference for negative CI bio gas and electricity, because that landfill example, it’s a real example, but in general, chargers and fleets would prefer that zero CEI solar. So when you’re looking at a low CI, negative CI electricity, dairy, and swine manure, and landfill diverted food waste or landfill diverted organics are really the projects that are taking advantage of this program and the LCFS credits in its current form.

Brad Pleima, P.E. (00:40:24):

So what does that look like from a dollars and cents perspective? Using those same examples in those same carbon intensity scores, we show what the estimated LCFS revenue is on a dollars per kilowatt hour. So what we’re looking at doing here is if you use grid electricity, that’s lower, it has a better carbon intensity score, you can get around 17 cents per kilowatt hour, at the current $200 per metric ton, LCFS credit value. And we’re assuming a passenger vehicle charging here. So 17 cents per kilowatt hour is a significant incentive for this LCFS program.

Brad Pleima, P.E. (00:41:01):

If you step that up and were to replace that with landfill gas, you can see there’s just a couple of cents incremental increase in the value by lowering the carbon intensity of the fuel that you’re putting into the vehicle. And then the wind and solar, 23 cents at the zero CI at a carbon neutral. That’s about what’s estimated to be available through the LCFS program. And then you get into these landfill diverted food waste or dairy manure projects. You can see significantly more. So if you’re able to provide and produce negative 600 CI electricity and charge that as vehicles, 66 cents per kilowatt hour, if you charge up a passenger vehicle and that’s a significant revenue source that can be used to pay off the anaerobic digester at the dairy, the conversion process, the CHP system, whatever that may be in order to generate that electricity.

Brad Pleima, P.E. (00:42:00):

That revenue available does get shared between many parties. So a majority of it goes back to the production facilities since there’s significant dollars and investment that has to be made. Some may go to the charging station or the fleet in order to incentivize them to participate in this overall pathway process. But I think the point here is not only do we see a lot of movement on the vehicle side, we’re seeing a lot of movement on actual policies that have been implemented, like the California low carbon fuel standard. We envision a lot more of those state specific programs to come online here over the next several years. And with that, I’m going to turn it back over to Shashi and Dan.

Daniel Ciarcia (00:42:46):

Great. Thank you so much Brad. So let’s spend a couple of minutes here talking about how that might actually, that program may actually be integrated into a fleet. I have an example here, it’s a hypothetical example in San Francisco, where you might install 130 kilowatt hour system in your parking lot. And that could cost around $300,000. I’ve taken off $78,000 because of the 26% federal tax credit that is eligible in the project, but I haven’t applied any other local California or local incentives here to this mini proforma.

Daniel Ciarcia (00:43:37):

So in that cost of 220,000 for this installation, this assumes, of course, you’re taking that energy. You’re putting it into charting stations and into vehicles. That would produce a little bit over 200,000 kilowatt hours a year, as Brad pointed out. If you were taking this energy, which has a zero carbon intensity, zero CI, and you were putting it into vehicles, you would be eligible to get 23 cents a kilowatt hour basically payment for doing that.

Daniel Ciarcia (00:44:09):

So that amounts to a bit over $46,000 a year in payments, along with your energy savings of another $40,000 a year or so. So at the end of the day, a simple payback for a system like this would be a little over two and a half years to pay that back. And then the rest is all profit and savings. And the real benefit here to everyone is that, that would produce about 660,000 zero emission miles of driving per year. And that’s full emission. That’s not just tailpipe because the energy is being created with zero emission as well.

Daniel Ciarcia (00:44:51):

So that’s a very powerful concept here to integrate that clean energy into a clean vehicle and having a holistic system. So if you’re a fleet owner, if you’re a municipality, a campus, and you want to start on your road to transitioning, we recommend that you take a step back, assess your vehicle characteristics, your fleet characteristics, what those applications are that you want to use your vehicles for, and look at your sustainability goals.

Daniel Ciarcia (00:45:27):

You might have sustainability goals in your organization or that is being mandated with policy. And then we presented today electric vehicle technologies, but there’s a really a whole breadth of technologies out there that are low carbon fuel alternatives to gasoline and diesel. In addition to those traditional fuels, EV, hydrogen, CNG, a variety of biofuels. And then once you find the technologies that are suitable for your and needs, it will require some infrastructure. So you need to feel those with something. And that can be a challenge depending on what you have for resources.

Daniel Ciarcia (00:46:11):

So you’d want to do a cost benefit analysis, figure out the total cost of ownership, and then really plan out that roadmap. Really the message here is there’s a lot of moving parts. There’s a lot of advanced technology coming and there’s a lot here already, a lot of opportunity and ready to take advantage of. So the time is really now to take advantage of these potential opportunities. We at EcoEngineers can help you with all of these stages, with the planning process to provide education and knowledge, measure your life cycle emissions and your total cost of ownership, seek your funding opportunities for you, engage with regulators, feasibility analysis to determine what you have available for resources, for infrastructure and how to best plan your energy management and your energy needs.

Daniel Ciarcia (00:47:06):

And on the development side to work with you on project management, project financing, offtake agreements, we can help you with contract management. And then once you’re in operations, this isn’t a one and done kind of decision. You want to constantly monitor your success and your benefits and issues that you encountered and be able to adjust as time goes on to really optimize for your specific needs. We can help you with compliance monitoring, reporting and third party verification if you need that for carbon claims.

Daniel Ciarcia (00:47:44):

And that is in a nutshell what we can provide to help you in this transformation. So we’d like … We have a few minutes left here. We’d really like to take some questions and also we will have follow on webinars over the next three quarters. So each quarter in 2021, we will have another focus area of discussion for electric vehicles.

Lyndsey Nielsen (00:48:13):

Awesome. Thanks everybody.

Shashi Menon (00:48:14):

Lyndsey, you want to take it from here? Do we have many questions from the group?

Lyndsey Nielsen (00:48:19):

We do. We have a handful of questions here starting at the very top, going back to the ICE vehicles, internal combustion versus electric vehicles. How long do the batteries last in the electric vehicles and how expensive are they to replace?

Daniel Ciarcia (00:48:37):

Those are great questions. I get those all the time. So the manufacturers have determined that they last about eight to 10 years and up to or over 100,000 miles, and those are really improving. Those numbers are improving really with every battery generation and every new technology. The cost to replace is as around $5,000. So it’s almost like putting a new engine block in your vehicle, if that’s needed.

Lyndsey Nielsen (00:49:06):

And there was a similar question that says, do you anticipate battery disposal to be a factor into this more so in the future? This person has seen many concerns about the end of life for batteries. I wonder if there’s any data that has been published and what it would cost fleets to replace many batteries.

Daniel Ciarcia (00:49:24):

That’s a good question. A lot of this is sort of in terms of actual data, because vehicles are so new and the volume is so low. We don’t have a track history, a history of really measuring what that costs and what is involved in that. However, the manufacturers of the batteries have really, really advanced what they can do with batteries. They can recondition batteries by replacing just individual cells that go bad. If the entire battery is really at end of life for the vehicle, it usually has secondary life, as building backup or other applications.

Daniel Ciarcia (00:49:58):

And then finally, if it’s really at its end of life, it can be recycled and there’s data that they can recycle 95% or more of the contents of a battery, and then reuse that for new batteries. So it’s evolving, we don’t have a lot of hard data, but there’s a lot of development innovation around this that’s solving this problem.

Lyndsey Nielsen (00:50:20):

I have a couple of questions here about the e-RINS. What is our perspective, EcoEngineer’s perspective on how e-RIN will be implemented if done in the upcoming RVO and will it take away from D3RINs?

Shashi Menon (00:50:34):

We are anticipating, the whole e-RIN situation has been so unfortunate. The whole industry was excited about the opportunity for e-RINs as an existing clean fuel. I mean, it’s happening right now, and there is just no way to get the battery registered with the EPA under the RFS and monetize it. And it’s been a really, really big source of frustration for a lot of people in the industry. And when we do see perhaps a light at the end of the tunnel there, there’s a big opportunity for the EPA to write both the 2021 and 2022 RVOs at the same time and announced it later this fall.

Shashi Menon (00:51:10):

And we are anticipating that there will be some … They will interest that union issue amongst all the other issues that have been holding the RFS back. One of them, we do plan anticipate that they will address the e-RIN issue. How exactly will that manifest itself? We hope that the EPA allows us to speedy path forward for patent registration for e-RINs and California and other regions are currently very successfully implementing a policy that allows credit generation for electric vehicle use.

Shashi Menon (00:51:50):

So we don’t think it should be that difficult for the EPA to find a way out of this. So we do anticipate that, but we don’t know exactly how all that is going to anticipate how it’s going to manifest itself. So I would definitely say let’s keep our fingers crossed and keep loving the EPA to take prudent and practical steps forward. And, let us generate some e-RINs.

Brad Pleima, P.E. (00:52:18):

Shashi just to build on that on the last part of the question about how it will affect D3 RINs. I think if EPA thinks it through with that RVO process, that’s exactly what will be good for the industry, if they don’t and then all of a sudden, a big flood of new D3 RINs came into the market, that could have a detrimental effect on D3 RIN pricing, just because there would be a lot more of them than the RVO.

Brad Pleima, P.E. (00:52:42):

So I think that’s what we’re going to be really glued into that 2021, 2022 VO number. I think that’ll give us a big clue into how EPA is thinking about e-RINs in a timeline.

Shashi Menon (00:52:57):

No, you’re absolutely right Brad. So the EPA has been historically good about explaining, it’s in lots of volume projections and so you’re right. We do hope that the EPA takes that into consideration and does not set a low RVO for D-3s and then flood the market with e-RINs. If anything, they should say higher RVO as if they’re anticipating e-RIN registrations than D-3 generation, then we hope … Now on that note, Brad, can I put you on the spot? And do you have any indication of what the D-3 RVO would be for 21 and 22?

Brad Pleima, P.E. (00:53:40):

I don’t, if I knew that we probably would have been blasting that out by email already I think. I don’t, I mean, I think Sarah, same thing, Sarah was saying a good timing is could it be May, could it be June? Could it be July? I don’t think we even know what the schedule is for releasing those numbers. I think all we can do is watch and see, and then hope for a big jump between the 2020 and the 2021 RVO, because I think that will give us an indication of … Did EPA include an allocation for e-RINs in the new RVO.

Sarah Caswell, Esq. (00:54:18):

And in addition to the e-RINs and anticipating additional day D3 RIN or RVOs needed for that, there are other types of fuels in that D3 RINs like corn kernel fiber ethanol for instance that had been not put on hold, in the last administration, that many in the industry believed will be going forward. So just to piggyback on your point, Brad and Shashi, hopefully we will see a big jump in the D3 RIN RVO that hopefully will be coming out.

Sarah Caswell, Esq. (00:54:57):

I did hear anecdotally this week that the RVO, the proposed rule is likely to come out more on the July timeframe than the May timeframe, but again we’ll have to go and see. I also did hear that when the proposed rule comes out, it’s expected that EPA will be proposing RVOs for both 2021 and 2022.

Sarah Caswell, Esq. (00:55:25):

However, it’s also expected that the agency will finalize them separately. So first the 2021 RVOs and then the 2022 RVOs, but both hopefully will be finalized before the November 30th deadline, statutory deadline.

Shashi Menon (00:55:48):

No, I know we’re running up against the hour at two o’clock, but I did want to ask you if you can stay a couple minutes over, I did want to ask each of you a one specific question. I know we started off by sort of presenting the enormity of the problem related to the transition to EVs and what this decade could look like and what 2030 will bring. So I just want to ask each of you, what do you think it’ll look like and really how many EVs will we see on the road by 2030?

Daniel Ciarcia (00:56:18):

Well, I’ll take that first, I guess. I can’t think of another example in recent history anyway where so much has come together for a single really transformed transition. You’ve got the manufacturers, you’ve got policymakers, to some extent public interested in this and certainly everyone’s looking at the ultimate goal of decarbonizing and this being a significant solution to being able to achieve that. So I think because you’ve got all of these people, kind of all of these entities moving in the right direction together, that it is going to happen.

Daniel Ciarcia (00:56:58):

I mean, it’s difficult to predict the exact pace and the exact penetration of the market by 2030, but I think the projections, a lot of them are conservative in a way that they’re talking about what will be available and where the technology will be. I think it’s a lot easier to sort of predict the technology advancements than it is market adoption, but to see the technology evolve and be available at certain milestones leads me to believe that 2030 is a real … We’re really heading up on that exponential growth at that point and probably a few years before that.

Sarah Caswell, Esq. (00:57:33):

Dan, to follow up on that, I think about the renewable fuel standard and what it did to drive investment and production of biofuels. And it was first passed as everyone knows in 2005 and then enhanced in 2007. And between pre 2005 and shortly after the RFS came online, you saw a huge growth in the ethanol market because of this legislation that drove this investment in production.

Sarah Caswell, Esq. (00:58:12):

And if we’re seeing momentum in the federal government, like I talked about where the goals and the messaging on EVs from the Biden administration has new agency has had climate advisers in the white house to congressional leadership. And they’re all kind of saying the same thing in terms of making climate mitigation policy a top priority to get done, including policies to promote the EV market. So if you see federal legislation that is as robust a driver as the RFS was, I think you can see how along with the technology advances that you talked about, the market could really explode in a short amount of time. 2030, I don’t know, we’ll have to see, but certainly by that 2035 date that many policymakers have thrown out.

Brad Pleima, P.E. (00:59:20):

Dan’s the expert on the vehicles on the road. So I’ll copy whatever he said. I liked that answer. I think my focus is really and at Eco, what we’ve really been focusing on over the last decade is the fuel side of things. So I talked about it in the webinar. I think that not only do we need growth in the vehicle and the consumption aside, but the growth will be significant in the renewable and negative carbon intensity score fuel and being able to power that.

Brad Pleima, P.E. (00:59:55):

So some of the numbers that Dan showed about the overall carbon intensity impact of the vehicle is still positive. There’s still carbon emissions coming from that process. Those can be offset or really lowered by using some of this negative CI electricity or zero CI electricity.

Brad Pleima, P.E. (01:00:16):

And it really creates that full story. So you need all of these components working together. And if you get a dairy negative 600 CI dairy supply, and you charge a bunch of electric vehicles, that whole story, and putting that all together, I think is really where the power comes from in this narrative. But we need all of those various components. And I think they’re all going to grow at a little bit different pace and a little bit different speed.

Brad Pleima, P.E. (01:00:44):

And the incentive programs are going to drive a lot of that. We’ve seen that with California. And so I think Sarah is right, I think, and what Dan’s talking about too is. We need to put all these pieces of the puzzle together in order to really make us successful, overhaul and de-carbonization of the transportation sector.

Shashi Menon (01:01:06):

I think we’ve come up on the hour. And I was just going to thank everybody for hanging in with us. We definitely are coming back and revisiting the subject three more times this year. So, stay tuned and I want to hand it over to you Lyndsey to see if there’s any last minute housekeeping things to do before we-

Lyndsey Nielsen (01:01:25):

Thanks. If you did ask a question and we didn’t get to it, we’ll get back to you. We have your email address. We will follow up with you to answer those questions. The next webinar is going to be next quarter, not scheduled specifically yet. So stay tuned on our email list and on our social media and website, you’ll be able to find out when the next webinar is. We have a couple other ones coming up this month too. Not EV, but just find the whole space. So thank you everybody for attending, and we hope to see you again soon.

Daniel Ciarcia (01:01:56):

Thank you very much.

Shashi Menon (01:01:59):

Thank you. Bye-bye.

Sarah Caswell, Esq. (01:02:00):