Scrappage requirements in the New York Truck Voucher Incentive Program designed to encourage truck operators to purchase cleaner vehicles are holding back clean truck adoption for small fleets.
The New York Truck Voucher Incentive Program
The New York Truck Voucher Incentive Program (NYTVIP) was launched to help truck owners and operators get their dirtiest trucks off the road by providing funding for the incremental cost between a new diesel-powered truck and a diesel alternative vehicle of the same type and class. However, to qualify for the voucher, a fleet operator must follow scrappage requirements that force them to retire an old diesel vehicle with a 1992 through 2009 model year engine within 21 days after the delivery of a new vehicle. Scrappage ensures the removal of the most polluting vehicles on the road, with reflects the stated goal of the program to improve air quality. On the surface, it would seem like these programs are doing exactly what they are meant to do. However, the scrappage requirement provides a roadblock for many truck operators who could benefit from cleaner vehicles.
A big ask for small fleet operators
Most truck operators in the US operate with 6 or fewer trucks. For a small fleet, having to replace a vehicle with technology they are not familiar with is a daunting risk. The rules governing scrappage requirements in NYTVIP include mileage minimums for the trucks that are getting replaced--at least 5,000 miles annually over the two most recent years. At its core, this requirement targets functional vehicles that were not intended to be taken out of service. There is a repower option offered through NYTVIP where a fleet operator can avoid the scrappage requirement by converting a diesel vehicle into a completely electric one. However, this option is only available if a vehicle is domiciled in one of 30 New York counties that have been designated Congestion Mitigation and Air Quality Improvement Program (CMAQ) status. If an operator does not have the resources to support electric vehicle charging, or their vehicle requirements are not served by the electric conversion market, this option is out of reach and they are forced to scrap a vehicle anyway.
Asking a small vendor to give up an old but operating diesel truck for an electric or compressed natural gas truck, while at the same time not allowing the vendor to keep the old truck or sell it on a secondary market compounds the risk to their livelihood. There is always a learning curve with new technology, and if the new vehicle does not function the way the operator initially wanted, say their new electric vehicle was not charged in time for its scheduled route, they have no recourse or backup.
California’s Success with Truck Voucher Programs
California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) was launched in 2009, three years before the NYTVI program, and has a similar function. It was designed to help reduce the incremental cost of low or no emission vehicles in classes 3-8, but does not have a scrappage requirement. This program has funded over 7,000 clean vehicles to date, compared to the 594 vehicles funded in the first round of vouchers the NYTVIP dispensed between 2013 and mid-2018. This is not an issue of funding either. NYTVIP is currently funded at over $50 million, with an additional $9.5 million for buses soon to be released. California’s HVIP proposed FY2021 program allocation budget is only $25 million.
Our Recommendations
New York Truck Voucher program should allow at least 1 year of operational overlap to give confidence to early adopters for the Electric Fleet. There should still be a scrappage requirement in the New York-based voucher program. Getting the most polluting medium and heavy-duty vehicles off the road is beneficial for public health and air quality standards, but the immediate scrappage of an old vehicle is what can become an issue for a fleet operator. A way to approach scrappage could be through the required three years of semi-annual usage reporting that fleets must do on new vehicles after their purchase. If the reports show within the first year that the new vehicles are meeting all functional expectations, then the operator should be required to scrap their old vehicle. If this is not the case, the fleet operator continues to use the semi-annual usage reports to indicate when the vehicle becomes fully utilized in the fleet and the old vehicle is then available to be scrapped. The end of the three-year reporting period can act as a final deadline for a fleet operator to scrap the old vehicle or be forced to pay back the voucher’s incremental cost.
Although this approach would mean that some heavily polluting trucks would be on the road for longer, overall, it would make the voucher incentive program more accessible to fleet operators. In the long run, getting more fleet operators to participate in the program will allow for faster adoption of cleaner vehicles. Stringent scrappage requirements are ultimately doing more harm than the good they were meant to facilitate.
For more information on the New York Truck Voucher Incentive Program, visit www.nyserda.ny.gov/All-Programs/Programs/Truck-Voucher-Program
For more information on California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, visit https://californiahvip.org/