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Accelerating Into 2024: 6 Actions That Must Be Taken to Achieve Vehicle Emissions Reductions During This Administration

By aggressively addressing vehicle emissions in a system-focused way, this administration has the opportunity to improve public health outcomes, stabilize energy reliability, modernize transportation systems, and more.


The transportation sector remains the largest domestic source of greenhouse gas emissions, but despite the many regulatory tools available to reduce vehicle pollution, and the prevalence of electric vehicles, along with federal and state incentives to electrify, transportation emissions continue to rise. Pollution from the transportation sector is also a leading source of nitrogen oxides (NOx) and contributes significantly to particulate matter exposure, which impacts the health of millions of Americans every year. Vehicle pollution disproportionately harms low-income, Black and Brown communities , that have historically been housed closer to high traffic areas and ports. Coordinated federal, state, and local action is needed to rapidly reduce transportation emissions over the next decade, and that work must begin now with strong regulations, targeted investments, and holistic planning efforts that will protect vulnerable populations and the planet. 

The next administration will have an outsized impact on whether the U.S. achieves federal, state, and international climate agreements by 2030. Evergreen has already offered ideas on key heavy-duty vehicle actions, but there is more to do across the sector as a whole given that it is the largest source of national emissions, and emissions are still growing. Federal rules, investments, and commitments to move faster from industry that could be secured by this administration will determine whether those climate commitments are achieved. 

The key is to approach the transportation system as a system and work to align rules, investments, and commitments to address both new and existing vehicles. The future does not just lie with improvements to vehicle efficiency but with an improved transportation system as a whole that is less reliant on single-vehicle transportation. We need to conceptualize a system in which cars and trucks are zero-emissions and made with strong union labor—but also a system in which cars and SUVs are less essential because we have vibrant, strong, cities, and towns with abundant and affordable housing, working transit, and walkable and bikeable streets, paths, and trails. Similarly, for heavy-duty vehicles, we need to think about freight as a system, from trucks and trains to warehouses and ports, and work to decarbonize the system as a whole. Right now, our system too often poisons and destabilizes our air and isolates and threatens our communities. But we are on the cusp of change; because transportation fundamentally shapes our lives, by improving the system, we can have both cleaner air and better experiences for our friends, families, and children in our communities.

But we need to build a foundation now. With many federal regulations and investments leading up to, and carrying through, the next presidential cycle, it is critical for this administration to secure strong vehicle rules and align investments in a manner that will swiftly decarbonize the transportation sector, while re-focusing state Departments of Transportation (DOT) away from wasteful and futile highway expansions and spending, and back on providing zero-emission and multi-option transportation options, from buses to trains to walking and cycling, in partnership with housing authorities that can help build homes and businesses in ways that support the system change.

By aggressively addressing vehicle emissions in this system-focused way, this administration has the opportunity to improve public health outcomes, stabilize energy reliability with battery storage networks, modernize transportation systems and expand mobility access, reforming how transportation is funded and governed at the state level, and provide market security for manufacturers, organized workers and supply chains. In order to attain these transformative outcomes, this administration must work alongside states and municipalities to collectively accomplish these six outcomes:

  1. Finalize ambitious federal regulations for light and heavy-duty vehicles
  2. Approve California vehicle waivers to pave the way for state electrification
  3. Expand the adoption of section 177 waivers with federal funding and technical assistance 
  4. Engage state Department of Transportation to refocus on holistic transportation systems
  5. Diversify transportation funding and mobility options to avoid the gas tax cliff 
  6. Design federal programs to support states in achieving emissions reductions from federal rules 


I. Finalize Ambitious Federal Regulations for Light and Heavy-Duty Vehicles 

Strengthening Federal Regulations 

This administration has several federal tools available to significantly reduce emissions from on road vehicles that will improve air quality and public health.The U.S. Environmental Protection Agency (EPA) has the authority to regulate a variety of vehicle emissions including smog, soot and greenhouse gases produced from light, medium and heavy-duty vehicles. These regulations control the amount of pollution that can be produced by the vehicle fleet made each year in the model years covered by finalized rules. EPA’s most recent proposal to regulate light- and medium-duty vehicles is through the multi-pollutant emissions standards, which would apply beginning in model year 2027. EPA has also proposed to regulate emissions from heavy-duty vocational vehicles and tractors with the greenhouse gas emission standards for heavy-duty vehicles which would take effect in 2027. The U.S. Department of Transportation (DOT) through the National Highway Traffic Safety Administration (NHTSA) regulates the fuel efficiency of vehicles through the Corporate Average Fuel Economy (CAFE) standards, which set a standard for how far a vehicle can travel on a gallon of gasoline. NHTSA had proposed to update the CAFE standards to achieve greater fuel economy for passenger cars and light trucks beginning in 2027 through 2032, and heavy-duty pick-up trucks and vans beginning in 2030 through 2035. DOT, through the Federal Highway Administration (FHWA), can also establish state DOTs and metropolitan planning organizations, and has proposed to set declining carbon dioxide targets for emissions on federal highways through the Greenhouse Gas Emissions Measure, which requires measuring and reporting of greenhouse gas emissions.

If these rules are strong enough, they could dramatically curb emissions from the most heavily polluting sector and put the nation on a path to becoming a leader in clean vehicle deployment. Each of the rules mentioned above drives down emissions for future model years and beyond this administration. The EPA rules and CAFE standards begin to take effect for vehicles produced in 2027 and extend beyond 2030, while the FHWA rule sets annually declining targets that may stretch well into the future. The strength of these finalized regulations will determine whether the nation as a whole and individual states meet their climate targets, which is why it is incumbent on this administration to ensure that each of the rules is as strong as possible based on current technology, existing investments, and public health necessity. As vehicle emissions continue to rise and disproportionately harm Black, Brown, and low-income communities, strong vehicle regulations to sharply reduce emissions is one of the administration’s greatest tools to protect the health of frontline communities. 

Federal Investments Make Way for Stronger Standards 

Each of these rules gives manufacturers the flexibility to determine how they meet the fleet-wide standard each year, and federal investments can promote equitable and aggressive choices by manufacturers as they determine compliance pathways. For example, automakers can produce smaller, lighter vehicles, or increase production of hybrid and fully electric vehicles rather than producing large gas-guzzling models. Electric vehicles are clearly the most efficient way to meet these increasingly stringent emissions standards, as they eliminate tailpipe pollution. While some automakers push back at the feasibility of increasing production of light and heavy-duty electric vehicles, consumers continue to demand electric vehicles, with purchases of new electric vehicle sales nearly doubling from 2020 to 2021. This spike in demand for electric vehicles is only expected to grow in coming years, particularly as federal incentives such as consumer tax credits from the Inflation Reduction Act (IRA) cover a wide range of electric vehicle models. Beginning in 2024 electric vehicle tax credits will be even more accessible for consumers to get the full value of the credit, regardless of federal tax liability, with a point of sale discount at the dealer. The broadening accessibility of electric vehicles makes the need for consistent and equitable public charging even more apparent, which states and the federal government can prioritize through thoughtful planning in the deployment of charging stations through the National Electric Vehicle (NEVI) Infrastructure program, by replicating best practices from leading states. 

Federal investments and incentives from the IRA and the Infrastructure Investment and Jobs Act (IIJA) pour billions of dollars into efforts to electrify vehicles and deploy charging stations for public and private entities, as well as individuals. There are tax credits for consumers looking to buy electric vehicles, and tax credits available to public entities and nonprofits for fleet transition of light- and medium -duty vehicles. There are also programs geared toward electrification of heavy-duty vehicles like EPA’s Clean Heavy Duty Vehicle program, Clean Ports program, Clean School Bus program, and the Diesel Emissions Reduction Act (DERA) grants for states. As federal funds support the transition to electric vehicles of all sizes, it is crucial that these programs also support good jobs as workers transition away from manufacturing and maintaining internal combustion engines. Some initiatives, such as the Clean Heavy-Duty Vehicle program, even fund workforce development and training as part of the program. 

The investments available to transition to electrification can and must support workers and unions, by enabling family-sustaining salaries, good working conditions, and strong benefits. Good jobs should be available to those that manufacture cleaner vehicles, as well as those that build out and maintain the growing charging network to power electric vehicles. 

Both IRA and IIJA provide funds for developing public charging stations, such as through the NEVI program, the Charging and Fuel Infrastructure Grants, and the Clean Heavy-Duty Vehicles program. And there are broader opportunities to transition sectors such as through the state Climate Pollution Reduction Grants program that allows broad focus on emissions reduction initiatives, and the Greenhouse Gas Reduction Fund opportunities. States and public entities can also lead in the transition by borrowing federal funds to help reduce vehicle pollution such as through the Department of Energy Loan Program Office. With this wide array of funding, in addition to state resources and incentives, achieving stringent vehicle standards through electrification is imminently achievable, and increasingly affordable. With electrification within reach, EPA must finalize the most ambitious pollution standards possible to maximally protect the health of all communities. 

Work to Solidify Manufacturer Commitments to Change

There is no substitute for ambitious federal regulations. But there is certainly room to ensure that companies are ready to comply and committed. In the wake of California’s deal with major truck manufacturers to commit to 100 percent clean truck sales by 2036, and earlier deal with automakers to stay the course on carbon reductions despite Trump-era rollback efforts, it's clear that industry knows the future lies with zero-emission vehicles. But industry needs to be held to those commitments, and more need to be locked in. In addition to rulemaking efforts, the White House should work to insist that industry groups commit to the transition and its key elements—including worker and community protections—upfront. Supportive IRA funding to help build out infrastructure or ease transitions can be an important adjunct to these conversations, by helping to build the larger ecosystem for success even as core regulators set ambitious standards. 

Pollution Regulations for Rail, Planes, Ships, and Off-Road Vehicles 

EPA also has much to do to regulate locomotive emissions, which is an essential part of cleaning up mobile source pollution as trains in the U.S. predominantly run on diesel fuel.  Unsurprisingly railyards, rail lines, and ports where trains operate disproportionately impact people of color and low-income communities with toxic diesel pollution. Despite the availability of zero-emissions locomotive technology, rail companies prefer to repair old, polluting locomotives, prolonging pollution and community harm. California is again leading in reducing rail emissions, with a proposed rule to cut locomotive emissions and protect communities. But in order to do so and allow other states to follow suit, EPA must get rid of an outdated rule that blocks states from regulating rail emissions. EPA included a proposal to allow states to regulate their own rail emissions in the 2023 proposed greenhouse gas emission standards for heavy-duty vehicles, but there is limited time. The rail industry is suing California to block its rule from going into effect this fall, and EPA must step in and clarify that states have the ability to regulate rail emissions in time for the rule to go into effect this autumn. EPA must prioritize finalizing the locomotive aspect of the rule now to allow California to move forward with strong standards, particularly because EPA itself has not updated federal locomotive regulations for pollution in over a decade – and an update of federal standards needs to be on the shortlist for the second Biden term. 

In addition to finalizing strong light- and heavy-duty vehicle standards, and allowing states to regulate rail pollution, this administration must begin to work on a broader suite of rules that would finally cover the full scope of mobile source pollution. EPA has yet to set strong standards for off-road vehicles, planes, and ships which all produce significant soot, and smog, and greenhouse gas emissions. These nonroad vehicles ought to be regulated by EPA, considering the authority under the Clean Air Act. EPA must exercise the full scope of its Clean Air Act authority to protect public health by reducing pollution from all mobile sources. Impacted populations do not have idle time to continue to breathe in polluted air, and the climate crisis demands swift, holistic action to draw down pollution, even in sectors that pose greater challenges. EPA must begin to set itself up now to regulate these mobile emissions sources in the future by looking into initial endangerment findings if needed, issuing any necessary information collection requests, and meeting with industry players early on to identify pollution reduction solutions.


II. Approve California Vehicle Waivers to Pave the Way for State Electrification 

California’s vehicle waivers, when approved by EPA, are some of the strongest tools that states and the federal government have to reduce pollution from vehicles. This is because California’s vehicle regulations are allowed to go beyond the stringency of EPA’s rules to drive down vehicle pollution even faster, and unlike EPA, California’s rules do not have to be technology-neutral. This means that through California’s vehicle regulations, electrification of light, medium, and heavy-duty vehicles can be mandated by a certain date. This allows a faster phase out of internal combustion engines, protecting greater numbers of residents, and provides clear market signals that manufacturers should produce more electric vehicles of all classes. 

Impact of California Vehicle Waivers

California’s comprehensive vehicle emissions rules have a far-reaching impact because they are not limited to the borders of the Golden State. Any state can opt-in to adopt California’s vehicle regulations for light, medium- or heavy-duty vehicles. There are 17 states including Washington, D.C. that have adopted some portion of California's vehicle regulations, with growing interest from other states. With many states currently signed on to some form of California vehicle rules, over 20 percent of the heavy-duty market and 40 percent of the light-duty market will have to transition to electric vehicles over the next decade. Automakers that are already mandated to reduce fleet emissions and improve fuel efficiency through federal rules must now produce zero-emissions vehicles for these jurisdictions following the California vehicle rules. As California and other states adopt and implement these rules, electric vehicles of all classes will become more affordable nationwide. 

The Administration Must Quickly Approve Remaining and Future Waivers and Authorizations

EPA must take advantage of the power to propel the electric vehicle market forward by swiftly and fully approving California vehicle waivers. So far, this administration has approved many

waivers and authorizations submitted by the California Air Resources Board (CARB), including the Advanced Clean Trucks (ACT) regulations. The ACT regulations will increase the number of medium- and heavy-duty zero-emissions vehicles on the road beginning in 2024 and extending through 2035. By 2035, 55 percent of light-duty truck sales (class 2b-3) must be zero-emission, 75 percent of medium-duty vehicles (class 4-8), and 40 percent of tractors. So far, seven states in addition to California have adopted the ACT rule, with six additional states in the process of adopting it. The ACT states currently cover five of the ten largest ports in North America, which will have significant health benefits for frontline communities while pushing the electric heavy-duty vehicle market forward. 

EPA must also move forward with approval of the Low-NOx Omnibus rule, which will dramatically reduce the deadly NOx pollution from heavy-duty trucks in coming years. Beginning in 2024 the Omnibus rule requires a 75 percent reduction in NOx emissions from heavy duty vehicles, with a 90 percent reduction by 2027. This rule was adopted in California in 2021 and awaits a waiver from EPA that would allow other states to follow these strong standards. Heavy-duty vehicles are responsible for nearly a quarter of all vehicle pollution, although they only account for 10 percent of the vehicles on the road. Cutting NOx pollution rapidly will be transformational for the Black, Brown and low-income communities that are disproportionately exposed to vehicle pollution and as a result suffer higher rates of heart and lung disease along with other negative health outcomes. EPA must use its waiver authority to protect frontline communities from NOx pollution from heavy-duty vehicles without further delay. 

In addition to quickly approving the Omnibus rule to allow other states to protect the public health of their residents, EPA must be prepared to quickly approve additional pending California vehicle waivers and finalize them before the end of President Biden’s first term. These vehicle regulations include the Advanced Clean Cars II (ACCII) rule and the Advanced Clean Fleets (ACF) regulation. The ACCII rule establishes that by 2035 all new passenger vehicles sold in California must be zero emissions by requiring 35 percent of new passenger vehicles sold to be electric by 2026 and increasing that market share annually until 100 percent of new passenger vehicle sales are electric in 2035. The ACF regulation ensures that only zero emissions medium and heavy-duty vehicles will be sold in the state beginning in 2036, and applies to fleets owned by state, local, and federal governments, high-priority fleets, and those that perform drayage operations. These rules chart the course towards the end of combustion in both light- and heavy-duty vehicles, consistent with industry trends and community needs. EPA needs to approve them, quickly.

III. Expand the Adoption of Section 177 Waivers with Federal Funding and Technical Assistance

The California vehicle waivers have the potential to fast-track electrification of all mobile source pollution, including light-, medium-, and heavy-duty vehicles, as well as rail and off-road vehicles. In order to achieve national emissions reductions and electric vehicle sales targets, EPA must be efficient in granting waivers as mentioned above, and states must take advantage of the full suite of waivers available. States should also use federal funding to support the adoption of California waivers and use incentives to develop comprehensive public charging networks. 

Section 177 States Should Adopt All Waiver Regulations 

While some section 177 states have adopted the full range of California vehicle waivers, many participating states follow some, but not all of the existing waiver regulations. Section 177 states that have only adopted light-duty vehicle standards, but not heavy-duty standards as well as regulations that phase out internal combustion engines, should do so to better protect their residents in the future. Many states require legislative action to approve new vehicle regulations and should introduce legislation aligned with California’s regulations as soon as possible so that they can go into effect on a similar timeline as other states. Greater coordination among section 177 states and adoption of all available regulations will better indicate to vehicle manufacturers that electric vehicles of all classes should be available and affordable in the near term. Additionally, section 177 states taking full advantage of all California vehicle rules will necessitate the continued build-out of charging networks on a faster timeline than contemplated by federal regulations alone. This will push federal agencies to better coordinate investments that provide charging infrastructure to support states as they transition to electric vehicles. 

Ambitious States Should Become Section 177 States

The California vehicle waivers can also be expanded to include new states that have yet to adopt more advanced standards. States that aim to improve air quality for residents or access federal funds for electric vehicles and charging networks should advance legislation to adopt California vehicle waivers. Since vehicles are the largest source of climate pollution, states that experience air quality concerns should adopt California’s stronger vehicle emissions standards. Many states contain counties that are designated as nonattainment, which is a status given by EPA when the air quality zone is worse than the National Ambient Air Quality Standards (NAAQS) set by EPA. The NAAQS measures six key pollutants, five of which are produced by internal combustion engines- carbon monoxide, ground-level ozone, NOx, particulate matter, and sulfur dioxide. The stronger rules that section 177 states follow will help states with air quality issues better protect public health by reducing these deadly vehicle emissions. 

States that are active in using IRA and IIJA resources to reduce emissions should also take advantage of California’s vehicle rules to lock in investments related to clean vehicles and charging infrastructure. States that are leading on IRA funding deployment, like Michigan, can commit to strong vehicle rules to signal to industries within the state, and the region, that electric vehicles are the path forward. Other states in the midwest, such as Illinois can also adopt stronger vehicle standards, which would accelerate the buildout of charging networks across the region and further accelerate the partnership among midwest governors to coordinate regional electric vehicle charging. 

Using Federal Funding to Support Adoption of Waivers and Expansion of Charging Networks

The IRA contains $5 million dollars for grants to states to adopt and implement mobile source standards, under section 177 of the Clean Air Act. This means that current section 177 states can use EPA funds to expand the scope of California regulations that they follow, or aid in the implementation of existing regulations. And states with intent to adopt California’s vehicle standards can use these funds to become section 177 states. This limited funding would be best spent supporting new section 177 states, as well as states that are seeking to expand the regulations, for example, states like Maryland, North Carolina, Rhode Island, Connecticut, Maine and New Mexico, as they attempt to adopt the ACT rule. 

Federal funds can be spent to support section 177 states in achieving these ambitious emission reduction and electric vehicle targets by building out public charging networks, including through the NEVI program, the Climate Pollution Reduction Grants, LPO funds, and the Charging and Fueling Infrastructure grants. By using federal funds to build out charging networks now for light-, medium-, and heavy-duty vehicles, the implementation of California vehicle standards will be more accessible to states that have to date invested fewer resources in electric vehicle charging. States that have yet to adopt California's strong vehicle rules can feel more confident doing so by drawing down federal funds for charging stations to prepare consumers and commercial vehicles for the transition to electric vehicles.

IV. State Departments of Transportation Need to Refocus on Holistic Transportation Systems  

State DOTs, and Metropolitan Planning Organizations (MPOs) through proper planning and investment have the opportunity to connect communities, enhance quality of life and commuter experiences, make mobility accessible to a greater number of residents, and reduce vehicle pollution disparities. State DOTs must think holistically about the transportation systems that they manage, rather than focusing on passenger vehicles and traffic. State DOTs can refocus  our transportation system to allow residents to move around with greater ease and autonomy— without reliance on cars—by reducing emissions through investments in zero-emissions public transit, and expansion of micro-mobility and walking routes by taking advantage of the available federal funds for transportation projects that center workers and communities.

State DOTs and Transit Agencies Must Leverage Federal Funds to Refocus on Both Electrification and Mass Transit 

Both the IIJA and IRA provide billions in federal funds through formula dollars, grants, and loans that can be spent to improve current transportation infrastructure, deploy public charging, and zero-emissions public transit, transition state and local fleets, and expand or improve transit routes. 

State DOTs should take advantage of the flexibility provided through the surface transportation block grants (STBG) to support the transition to electric vehicles, as well as expand micro-mobility and walking routes, and expand public transit systems. Specifically, through the IIJA, these block grants can be spent on the following activities that would reduce emissions and improve mobility for residents:

  • Building out electric vehicle charging networks and vehicle-to-grid infrastructure, 
  • Projects that support intermodal transportation such as buses to biking or walking routes,
  • Constructing bus rapid transit corridors and dedicated bus lanes, and  
  • Enhancing resilience of transportation facilities. 

State DOTs can utilize these highly flexible funds to create housing and commuter-oriented transportation routes while expanding charging networks to be ready for the transition to electric vehicles. 

Formula funds, like the Carbon Reduction Program and the STBG can be paired with IRA and IIJA competitive grant programs that invest in clean vehicles and charging infrastructure including the Clean Heavy Duty Vehicle program, the Clean School Bus program, the NEVI program, DERA state grants, and the Charging and Fueling Infrastructure grants. States can then combine these grant offerings in a comprehensive manner to reduce transportation emissions through large-scale investments and planning efforts by utilizing the Climate Pollution Reduction Grants program. Together these federal funds can transform state and local transportation infrastructure to allow for expanded transit routes, publicly accessible electric vehicle charging, and routes for walking, biking, and other micro-mobility activities. State DOTs should also work with communities to reduce pollution and decrease barriers to community connectivity with grants such as the Reconnecting Communities and Neighborhoods program and the Environmental and Climate Justice Block grants. 

Competitive grant programs can be paired with loans and tax credit opportunities. The loan guarantees from the U.S. Department of Energy Loan Program Office can be stacked with formula or grant funds to make large-scale, energy-related projects affordable, such as charging stations for public or state-operated fleets, including transit buses. And the direct pay tax credits for commercial clean vehicles can be used by states, MPOs, and local governments to receive credits for the purchase of new clean vehicles. A credit value of $7,500 is applied for light-duty vehicles and up to $40,000 can be taken off for medium-duty vehicles. When combined these opportunities mean that states and local governments can plan to transition their fleets at a lower cost, and develop the needed charging infrastructure to power them. 

Together, this combination of federal funds can support state DOTs and transit agencies in building transportation systems that work for all residents. Not only will these activities reduce emissions and improve air quality, they will make mobility more accessible and convenient for residents. Public funds spent on transportation should benefit all residents, including those who rely on public transit or micro-mobility options or who intend to use electric vehicles. By investing in housing-oriented transit and commuter-oriented transportation systems, state DOTs can better support residents who rely on public transit such as low-income individuals, elderly and disabled populations. State DOTs and MPOs can use federal funds to improve transit systems through thoughtful planning or rerouting of transit lines where commuters live and work, and making use of federal investments to purchase zero-emissions vehicles and infrastructure. State DOTs can flex federal block grant funds, and make transit desirable to riders of all income levels and backgrounds by ensuring that service is reliable, affordable, safe, and clean. State DOTs will need coordinated support from local and federal entities as they consider alternate sources of funding to ensure that high-quality public transportation is available even when user fees and federal funding are inconsistent or insufficient. 

Engaging Local Governments, Utilities, and Port Authorities

In addition to coordinating federal investments, state DOTs must also work with local governments, utilities, and port authorities to ensure that there is a smooth and equitable transition to electric vehicles. Local governments have a direct stake in transportation infrastructure as mobility is directly linked to economic growth and should be partners for state DOTs in planning efforts when federal funds are provided for transportation projects. State DOTs and MPOs must work closely with local governments to align transportation priorities and budgets to plan effectively to repair and improve transit systems to support economic activity and connect communities to ensure that transit-reliant populations have sustainable access to transportation. Ports are responsible for a significant share of pollution due to the high volume of traffic, idling, and number of heavy-duty vehicles. State DOTs and port authorities must work together to leverage federal funds to reduce the pollution burden for port communities, while continuing to support workers and maintain economic output.

As electric vehicles of all classes come on the road, state DOTs will need to engage utilities to plan effectively for grid loads to allow for charging of all vehicle classes in a range of locations. Utilities can play a role in deploying electric vehicle charging stations at low cost, such as the program operated by National Grid, which supports workplace, multi-family housing, retail, and public charging. Utilities can also support residential charging through rebate programs, allowing customers to get money back for the purchase of an at-home charger. As state DOTs work to deploy electric vehicles in an equitable manner, they must work with port authorities to ensure holistic clean vehicle deployment that will improve air quality for impacted communities living near ports.

V. States Must Diversify Transportation Funding and Mobility Options to Avoid the Gas Tax Cliff 

Dependency on personal vehicles results in a high volume of vehicles on the roads, and the trend of increasingly heavier passenger vehicles means that roadways are in constant need of maintenance across the country. Road maintenance costs state and local governments billions of dollars each year, with over a quarter of this funding coming from gas taxes. States are already struggling to maintain roads due in part to declining gas taxes, and partly due to continuous road expansion which fuels the need for further repairs. Rather than continuing to focus on passenger vehicle travel and road maintenance and expansion, states must better align transportation funding with climate, housing, and public health goals, and focus on projects that reduce vehicle miles traveled

Gas tax revenues will continue to decrease as electric vehicles become more prevalent, which means states and local governments will need to identify other sources of revenue to continue to maintain roadways, expand transit options, and create communities that allow for greater mobility. By reducing reliance on passenger vehicles, states and local governments can develop more sustainable communities that are more equitable due to reduced pollution burdens and communities of color and low-income communities, while providing greater access to community services, recreation, businesses, and jobs. Any alternate sources of revenue must be sustainable and dedicated in order to withstand federal funding delays or decreases. States can consider a combination of new revenue sources including road usage charges, weight fees for passenger vehicles, congestion pricing in urban areas, weight distance fees for heavy-duty commercial vehicles, and electric vehicle fees for high-end models. As states contemplate alternative financing approaches, state DOTs should work together in regional compacts to maintain fair competition and prices in the region, and ensure that commercial activity is not disincentivized due to new vehicle pricing mechanisms. 

Road Usage Charge 

Road usage charges (RUC), also known as vehicle miles traveled fees, work by charging drivers a fee based on the exact number of miles that they drive. The driver attaches a device to their vehicle that will collect a user fee for each mile driven. The user charge is determined by the state and can be calculated based on the population of drivers and maintenance needs based on road conditions. The road user fee for Oregon’s voluntary RUC program is 1.9 cents per mile while Utah’s RUC program charges 1 cent per mile. While RUCs may appear inequitable to drivers in rural areas who drive longer distances than urban drivers, rural drivers are expected to pay less than city drivers under an RUC program as compared to existing gas taxes. This is because rural drivers may drive longer distances, but tend to do so less frequently. Rural drivers may also save money in an RUC program as they are more likely to drive full-sized SUVs or trucks, and older vehicles with poorer fuel economy, which means that a traditional gas tax results in a higher charge for rural drivers on average. States imposing a RUC may still want to take additional precautions to protect low-income drivers who must drive long distances for work or to access basic commodities, in which case credits can be given for drivers who make below the median area income, or discounts can be given for low-income drivers that take trips beyond a standard distance. 

Weight Fees 

States should consider charging a weight-based vehicle registration fee for all vehicles, where the cost of the fee is relative to the size and weight of the vehicle. Larger internal combustion engine vehicles take more fuel to power, resulting in higher emissions than smaller, more compact vehicles and they also contribute more to road degradation. And as electric vehicles become more prevalent, larger vehicles still present a concern as they require larger batteries, and therefore more critical minerals. Charging passenger vehicles a fee based on their relative weight may encourage drivers to select smaller, more fuel-efficient vehicles which are better for the environment, public health, and mineral preservation. Ultimately, passenger and commercial vehicle weight fees would better reflect the roadway impacts caused by larger, heavier vehicles. 

Congestion Pricing

States with dense metropolitan areas can also replicate the congestion pricing model that will be implemented in New York City in 2024. Congestion pricing will charge drivers a fee for entering the Central Business District of Manhattan, with the potential for higher fees during peak traffic hours. This policy attempts to reduce pollution and traffic in the lower portion of Manhattan by limiting the number of vehicles, while also encouraging residents and commuters to rely on public transportation and micro-mobility. In order to remain safe and equitable the policy will have exemptions such as for emergency vehicles and vehicles that transport disabled passengers. In addition, officials charged with implementing the program are considering how to balance impacts on commuters throughout the tri-state area and reduce hardship for cab drivers and low-income drivers who live within the congestion zone or have to travel through the congestion zone multiple times a month. These concessions may come in the form of a discount on the congestion toll or a credit for tolls paid.  

Fees for High-End Electric Vehicles 

States can charge an additional registration fee for electric vehicles that are valued over a certain amount, such as those priced at $75,000 or greater. While there should not be additional fees associated with electric vehicle ownership in order to encourage the uptake of electric vehicles, states with electric vehicle registration fees charge between $50-$255 annually, which should not be a barrier to customers purchasing high-end electric vehicles. These marginal electric vehicle fees for high-end vehicles can supplement a portion of the diminishing gas taxes, while ensuring that prospective moderate and low-income electric vehicle owners will not be deterred by additional costs.

VI. Design Federal Programs to Support States in Achieving Emissions Reductions From Federal Rules 

In order to decrease vehicle emissions over the next decade, states and local governments must align federal funds to meet and exceed the emissions reductions required by the federal rules mentioned above. Federal agencies must support states and local governments by structuring federal resources to target the greatest sources of vehicle pollution, while distributing funds equitably to improve community health by addressing pollution disparities. This means agencies must provide clear program guidance that encourages the administration’s goals of reducing pollution by deploying electric vehicles and charging infrastructure, expanding public transit and micro-mobility, and reconnecting communities. Federal programs must also engage industry and workers to ensure that the sectoral shift to electric vehicles supports good jobs. 

Strategic Deployment of Federal Resources

Federal agencies have unprecedented funding to address pollution and electrify the transportation sector, and funds must be deployed strategically within each program. Program design and funding awards should reflect for example the need to electrify heavy-duty vehicles in urban areas and major ports, while ensuring that rural communities gain access to charging infrastructure and necessary grid updates. This means for example, tiering funding opportunities such as in the Clean Ports program to allow for a select number of larger grants to go to the biggest, highest emitting ports such as those in southern California, New York and New Jersey. A second funding tier could exist for medium-sized grants geared towards other large ports that must be electrified but are responsible for fewer emissions such as the ports of Savannah, Houston and Virginia. A third tier could be reserved for remaining ports and those with the most impact on frontline communities surrounding ports. Awarding program grants in a controlled manner that addresses pollution in nonattainment areas would allow the EPA to support the grant program goals while also helping states and localities comply with existing federal regulations. Grant programs should allocate funding based on the greatest emissions reduction capacity and community benefits impacts, rather than giving out the greatest number of grants possible.

Clear Guidance to States

Many of the federal grants and formula programs allow states broad discretion when implementing, such as the surface transportation formula funds and the NEVI program. Although there are funding guidelines and program requirements, states get to choose how and when to deploy funding within those guidelines. In order to make clear the goals of the administration and encourage emissions reductions, federal agencies should take care to provide detailed guidance, best practices, and examples of success to support states. For example, the NEVI program allows states to determine where public chargers are located subject to the program guidelines and recent guidance mentions that states should consider the anticipated marked demands for infrastructure, including heavy-duty vehicle charging, though it is not required by the program. The authorizing text in the IIJA only specifies that the funds be spent on electric vehicle charging infrastructure that is publicly accessible—not passenger vehicle charging specifically. Considering the outsize impact that heavy-duty vehicles have on pollution and public health, and that the transition of heavy-duty vehicles would support nonattainment zones in gaining compliance with EPA regulations, it would be worthwhile for the joint office to make heavy-duty charging a requirement for a portion of the funds. Clear program guidance that aligns program funds across agencies with federal vehicle regulations would better support states in achieving emissions reduction targets. 

Engage Industry

Federal agencies must also play a key role in engaging industry partners to support electrification and pollution reduction goals of federal programs. This means federal agencies must lead conversations with vehicle manufacturers, workers, utilities, dealers, and private sector investors to make sure that electric vehicles, charging stations, critical minerals, and additional financing are all available at the scale that will allow a rapid transition. These industry partners are central to enforcement of vehicle emissions regulations and their active participation in electrification will determine the pace of the transition. Federal agencies have greater leverage in relationships with manufacturers, utilities, and other partners than do individual states and localities, and they should exercise this power to support and accelerate electrification efforts. As demonstrated by the recent UAW strikes, and the success achieved at the General Motors battery production site, rapid electrification does not need to come at the cost of good jobs. Equity in the transition means more than reducing pollution for overburdened communities, it also means ensuring benefits, family-sustaining wages, and fair working conditions, which federal agencies can support by engaging directly with industry players. 


Federal, state, and local agencies must work together to achieve the vehicle emissions reduction targets set by this administration to improve air quality and usher in new, clean technologies. Ultimately, federal and state agencies must coordinate with each other to a much greater degree in the remaining years of this administration to effectively deploy clean energy resources, and reform state budget processes to provide greater and more affordable access to public transit and mobility at large. Federal and state agencies must also more deeply engage with manufacturers, workers, utilities, and the private sector to secure and enforce more stringent pollution reduction standards that will better protect the health of residents.