The Clean Fuels Program, administered by South Coast AQMD'S Technology Advancement Office (TAO) has traditionally supported a portfolio of technologies at different technology readiness levels to develop new technologies across many mobile sectors for emission reductions and health benefits to achieve the National Ambient Air Quality Standards (NAAQS). The Clean Fuels Program considers several factors in funding projects such as current and projected economic costs and availability of fuels; cost effectiveness of emission reductions associated with clean fuels compared with other pollution control technologies to achieve emission reductions, potential health effects, and other factors. The Legislature recognized the need for flexibility, allowing focus on a broad range of technology areas including cleaner fuels, vehicles and infrastructure, which helps South Coast AQMD make progress towards achieving NAAQS. While the Clean Fuels Program has evolved since its creation in 1988, it continues to provide co-funding for research, development, demonstration and early deployment (RDD&D) projects, for mobile and stationary source technologies.

Historically, mobile source technologies have targeted near-zero emission technologies in automobiles, transit buses, medium- and heavy-duty trucks, and off-road applications. These efforts have focused on advancements in engine design, electric power trains, emissions control technologies (e.g., retrofits) and energy storage/conversion devices (e.g., fuel cells and batteries); and implementation of clean fuels (e.g., natural gas, propane and hydrogen), and medium- and heavy-duty infrastructure (e.g., electric charging and hydrogen fueling stations) to support large scale deployment of zero emission trucks, buses, and off-road/cargo handling/construction equipment. More recently, funding has shifted to zero emission technologies and supporting infrastructure to achieve NOx and greenhouse gas reductions.

The Clean Fuels Program Plan Update is revised annually to recalibrate direction of the Clean Fuels Program based on technology progress and direction by South Coast AQMD's Governing Board, Technology Advancement Advisory Group, and SB 98 Clean Fuels Advisory Group to balance the needs in various technology sectors with technology readiness, emissions reduction potential and co-funding opportunities. Each year, South Coast AQMD submits a Clean Fuels Annual Report and Plan Update to the California Legislative Analyst by March 31. The Clean Fuels Annual Report looks at accomplishments of the Clean Fuels Program in the prior calendar year and the Clean Fuels Plan Update looks ahead at proposed funding allocation for the next calendar year to recalibrate technical emphasis of the Clean Fuels Program.

The Clean Fuels Program is significant in its impact. While South Coast AQMD aggressively seeks to leverage funds, it plays a leadership role in technology development and commercialization, along with its project partners, to accelerate technologies and criteria pollutant and greenhouse gas reductions. Through its public private partnerships and pursuit of local, state and federal grant funding opportunities, the Clean Fuels Program has accelerated commercialization of battery electric trucks and is partnering with OEMs to accelerate the commercialization of fuel cell trucks and other zero emission vehicles and equipment. From 1988 to 2022, the Clean Fuels Program contributed more than $250 million into $1.6 billion in projects. Leveraging of the Clean Fuels Fund is based on executed contracts and total project costs from the prior year’s Clean Fuels Annual Report and Plan Update.

The overall strategy of the Clean Fuels Program is largely based on emission reduction technology needs identified in the 2022 Air Quality Management Plan (AQMP) and the South Coast AQMD Governing Board’s directives to protect the health of residents in the South Coast Air Basin. The 2022 AQMP is the regional “blueprint” that identifies fair-share emission reductions from all jurisdictional levels (federal, state and local) and includes:

• South Coast Air Basin 83% NOx emission reduction from the 2018 level and 67% additional reductions in 2037 beyond already adopted regulations and programs needed to achieve NAAQS;

• Regulatory control measures, incentive-based programs, projected co-benefits from climate change programs, mobile source strategies and other innovative approaches to reduce emissions from state and federally regulated sources;

• Timeframes to implement these proposed measures; and

• Technologies required to meet the 2015 8-hour ozone standard of 70 ppb by 2037

During calendar year (CY) 2022, the Clean Fuels Program executed 21 new contracts, projects or studies and modified 5 continuing projects adding additional dollars toward research, development, demonstration and deployment contracts as well as technology assessment and technology transfer activities in the South Coast Air Basin. During CY 2022, South Coast AQMD supported a variety of projects and technologies, ranging from near-term to long-term research, development, demonstration and deployment activities. This “technology portfolio” strategy provides South Coast AQMD the ability and flexibility to leverage local, state and federal funding while also addressing the specific needs of the South Coast Air Basin.

Projects in CY 2022 included significant battery electric and hybrid electric technologies and infrastructure to deploy medium- and heavy-duty vehicles in support of transitioning to zero emission goods movement at fleets and warehouses; hydrogen and mobile fuel cell technologies and infrastructure to develop and demonstrate medium- and heavy-duty vehicles and infrastructure; fuels and emissions studies for in-use testing and fuel characterization and usage profiles as well as evaluating strategies for reducing emissions in the goods movement sector; demonstration of stationary clean fuels technologies including microgrids; and development, demonstration and deployment of large displacement natural gas engines. 

South Coast AQMD contributed over $7.4 million in partnership with funding agencies, private industry, academia and research institutes, and interested parties, with total project costs of approximately $74.1 million. Typical historical leveraging is $4 for every $1 in Clean Fuels funding. In 2022, South Coast AQMD exceeded this upward trend with almost $10 leveraged for every $1 in Clean Fuels funds These projects or studies addressed a wide range of air quality issues with a diverse mix of advanced technologies. The pie chart below shows the distribution of Clean Fuels Program funds approved by the Board in 2022.

In addition to the new projects, 46 research, development, demonstration and deployment projects or studies and 11 technology assessment and transfer contracts were completed in CY 2022. Two-page summaries for each of these projects are provided in Appendix C of the 2022 Annual Report

Distribution of Funds for Executed Clean Fuels Projects CY 2022 ($7.4M)

As noted earlier, the Clean Fuels Program re-evaluates technical direction of the Clean Fuels Program every year to develop a Plan Update. The proposed projects in the Plan Update reflect promising zero and near-zero emission technologies emerging in different source categories. The figure below shows potential 2023 distribution of Clean Fuels Program funds, based on projected program costs of $19.8 million for the ten project areas. For 2023, the Plan Update includes a separate category for Zero Emission Infrastructure which is taken from the Electric/Hybrid Technologies and Hydrogen/Fuel Cell Technologies category to reflect the increasing focus of the Clean Fuels Program in order to support large scale demonstration and deployment of battery electric and hydrogen fuel cell vehicles and equipment. The expected actual project expenditures for 2023 will be less than the total projected program cost since not all projects will materialize. Target allocations are based on balancing technology priorities, technical challenges and opportunities discussed previously, and near-term versus long-term benefits with the constraints on available South Coast AQMD funding. Specific contract awards throughout 2023 will be based on this proposed allocation, quality of proposals received and evaluation of projects against standardized criteria, and ultimately South Coast AQMD Board approval. 

Projected Cost Distribution for Potential Projects in 2023 ($19.8 Million)