August 24, Dear Minister Heyman:

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1 August 24, 2018 Hon. George Heyman Minister of Environment and Climate Change Strategy PO Box 9047 Stn Prov Gov Victoria, BC V8W 9E2 Dear Minister Heyman: Canada s economic, social and environmental well-being depends upon the safe, effective and efficient movement of goods, energy and people within our cities, across our country, and across our borders. The clean growth strategy provides a significant opportunity for British Columbia to build on its leadership on climate action, and become a global provider of low-carbon mobility solutions. The potential benefits of decarbonizing transportation include improved economic efficiency, lower environmental impact, greater energy security, greater social equity, and improved public health and safety. Clean, connected and safe transportation has become a national priority: Clean: In Canada, transport accounts for approximately 25% of all greenhouse gas (GHG) emissions. New modes and models for decarbonized road, rail and ship transportation and transportation infrastructure must be developed. In particular, new technology pathways that can deliver renewable energy and low-carbon fuels to the transportation sector are required. Connected: The number of connected objects on the planet will increase from 6 billion to 21 billion by New technologies and platforms for connecting vehicles and transportation infrastructure with people, businesses, information technology and electricity grids must be developed in order to increase efficiency, improve safety, and enable new business models. Safe: In 2014, the World Bank listed road transportation as No. 6 in the global burden of disease rankings. Urban pollution kills more people than Tuberculosis, or Malaria, or HIV. New policy, safety and design innovations must be created to integrate transportation infrastructure with information and communications technology (ICT) into smart city design. In our province, the transportation sector is responsible for approximately 39 percent of the provincial greenhouse gas (GHG) emissions. We are encouraged to see targeted sectorial initiatives, and we appreciate the opportunity to provide input on the Intentions Paper: Clean Transportation - Building a clean growth future for BC. Our input is based on evidence that we have gathered with support from the Pacific Institute for Climate Solutions, and through effective partnerships with leading research universities in the province. We look forward to integrated, evidence-based strategies linked to the other intentions papers on Clean, Efficient Buildings; and A Clean Growth Program for Industry. We hope that you find this informationuseful, and we will be glad to provide additional information if required. With best regards, Dr. Walter Mérida Director, Clean Energy Research Centre Associate Dean, Research and Industrial Partnerships. CLEAN ENERGY RESEARCH CENTRE (CERC) 2360 EAST MALL, VANCOUVER BC V6T 1Z3 TEL: , FAX: CERC.UBC.CA

2 Response to B.C. Clean Growth Intentions Paper on Clean Transportation Transportation Futures Research Cluster at UBC s Clean Energy Research Centre Clean Transportation The transportation sector accounts for the largest portion of total Greenhouse Gas (GHG) emissions in British Columbia (see Fig. 1). The trucking industry has been a leading contributor to the road transportation sector with a 13.5% GHG emissions increase from Vehicles are also significant sources of criteria air contaminants (CAC), like Particulate Matter (PM 10, PM 2.5), Nitrogen Oxides (NOx), Carbon Monoxide (CO) Sulphur Oxides (SOx) and Volatile Organic Compounds (VOC), which adversely affect air quality and human health. Figure 1: 2014 GHG emissions in B.C by sector. 1 The B.C. government's Climate Action Plan targets 80% GHG emissions reduction in 2050 compared to While current legislation targets the fuel efficiency of conventional gasoline or diesel powertrains, some attempts have been focused on alternative fuels. The B.C. Low Carbon Fuels Regulations state that, by 2020, the life-cycle GHG intensity of all transportation fuels must be reduced by 10% from 2013 levels (Government of B.C, 2008). This requirement is expected to be met using first generation biofuels in the fuel blends, ethanol from corn and grain, and biodiesel from canola. Ethanol and biodiesel are already being blended into refined petroleum fuels in B.C. and the blending percentage is rising steadily. The Ethanol content increased in the gasoline pool from 5% in 2010 to 6.3% in 2014, and the biodiesel blend reached 5.6% in 2014 (Wolinetz and Moorhouse, 2016). There are significant opportunities to capitalise on B.C. s 1. H. Talebian, O. Herrera, M. Tran, W. Mérida, Electrification of Road Freight Transport: Policy Implications in British Columbia, Energy Policy 115, (2018.)

3 Zero Emission Vehicles Initially, the Pan-Canadian Zero Emissions Vehicle Strategy was focused exclusively on light-duty vehicles. BC s progressive approach to the decarbonisation of transport, should be accompanied by a ZEV strategy that does not suffer from similar limitations. In B.C., one of the key challenges remains the lack of evidence-based wholistic approaches that target air quality improvements, and true reductions in GHG emissions (as opposed to increases in ZEV numbers only). The factors that must be considered include the absence of programs targeting heavy-duty vehicles, the disconnect between incentive programs and actual tonnes of CO2 abated (or km driven), as well as the focus on new vehicle purchases only. Despite all these observations, a zero-emission vehicle mandate is an indispensable component of broader and effective initiatives. Without such mandate, it will be difficult or impossible to partner with original equipment manufacturers (OEMs), and bring sufficiently large numbers of ZEVs to the province. This deficiency places B.C. at a disadvantage as the global competition for limited numbers of electric, hydrogen and fuel cell vehicles increases. Another challenge is related to the lack of adequate recharging or refueling infrastructure. In B.C., this challenge is particularly acute for hydrogen and fuel cell vehicles (FCVs). The unveiling of the province s first retail hydrogen refueling station was announced many years after similar developments in other parts of the world. The focus on new vehicle purchases may be a barrier to reduce emissions from heavy-duty vehicles. These vehicles may have longer procurement and replacement cycles (compared to personal, light-duty vehicles), as well as longer balances in their useful lives (e.g., a decade or more). If the existing vehicular fleet in the province is not impacted by the proposed initiatives, it may be possible to achieve large ZEV penetration, without reducing the overall GHG emissions. Recommendations: 1. Ensure that a ZEV mandate is introduced in the context of wholistic initiatives that target decarbonisation and GHG emissions reductions 2. Introduce a zero-emission vehicle (ZEV) mandate that considers not only individually owned light-duty vehicles, but also medium- and heavy duty-vehicles in public and private fleets. 3. Ensure that a ZEV mandate includes not only battery-electric vehicles, but also fuel cell vehicles running on hydrogen and low-carbon fuels. 4. Support and invest on the relevant ZEV recharging and hydrogen refueling infrastructure 5. Provide guidance to early adopters (municipalities, fleet owners, etc.) to ensure that the first ZEV deployments do not create a captive market by locking users into

4 proprietary standards and protocols (e.g., connectors, devices, communications, vehicles, software, vendor-specific infrastructure, etc.). 6. Support an open-standards provincial initiative to ensure equal access to suppliers as the numbers of EVs and FCVs increase 7. Ensure that the technology focus of initial deployments does not create barriers for the deployment of complementary technologies in the future (e.g., the fuel purity requirements for fuel cell operation are more stringent than those required to ensure similar benefits via hydrogen combustion). 8. Coordinate and support transit authorities as they deploy ZEVs in their fleets to ensure that these efforts include all options (e.g., hydrogen fuel cell vehicles, range-extender options, hybrid vehicles, etc.) 9. Support the development of new partnerships and business models that capitalise on provincial leadership in niche technologies and markets 10. Ensure that the initial focus on individually-owned, passenger vehicles does not create artificial barriers or artefacts for freight and other sectors with potentially larger (positive) impacts (see the comments on commercial vehicles.) Support for Cleaner Fuels Natural gas Compressed and liquefied natural gas CNG, LNG as well as propane are now being considered as transition fuels that could serve as cost-competitive, near-term solutions for heavy-duty vehicles. The greenhouse gas reduction regulation under the Clean Energy Act offers incentives to diversify and grow the market for natural gas in B.C. s transportation sector. The incentives target medium- and heavy-duty trucks switching from diesel to natural gas, and decrease the fuel costs per kilometer. Natural gas trucks can reduce tailpipe greenhouse gas emissions by as much as 20% over gasoline or diesel trucks (McJeon et al., 2014). The climate benefits of natural gas heavily depend on the lifecycle emissions of methane Hydrogen enriched natural gas (HCNG) engines can enhance fuel economy and decrease emissions compared with CNG use. However, mitigating NOx emissions from hydrogen enrichment is challenging and needs to be addressed. NB: there are significant opportunities for optimizing the use of natural gas for space heating and other non-transport applications while simultaneously reducing GHG emissions. These opportunities are not covered in this document. Biofuels Bioethanol and biodiesel dominate the global supply of biofuels. Canada produces and imports both of these fuels, but there is an opportunity to enable domestic production of enhanced, drop-in biofuels that optimise existing supply chains. Drop-in biofuels will require high energy densities, low sulfur content and lower emissions at the point of use. The deep-carbon reduction scenarios for road freight transport often rely on significant amounts of biofuels. The B.C. Low Carbon Fuels Regulations states that by 2020 the life-cycle

5 GHG intensity of all transportation fuels must be reduced by 10% from 2013 levels. This requirement is expected to be met using first generation biofuels in the fuel blends, ethanol from corn and grain, and biodiesel from canola. Ethanol and biodiesel are already being blended into refined petroleum fuels in B.C. and the blending percentage is rising steadily. The Ethanol content increased in the gasoline pool from 5% in 2010 to 6.3% in 2014, and the biodiesel blend reached 5.6% in 2014 (Wolinetz and Moorhouse, 2016). One challenge associated with biofuels is related to indirect land use changes, which may result in additional GHG emissions. Also, the amount of sustainable biofuel which will be available beyond 2020 must be determined. Hydrogen Canada is a world leader in hydrogen and fuel cell technologies, but lags other G20 countries (Germany, Japan, etc.) in hydrogen refuelling infrastructure deployment. There are more than 500 hydrogen stations worldwide, but until recently, Canada had only two. Several countries and jurisdictions have made significant commitments for new hydrogen refueling infrastructure: South Korea will invest 2.6 trillion won (USD2.33 billion) over the next five years in a public-private partnership to boost the development of the country s hydrogen fuelling ecosystem Japan is targeting 40,000 FCVs by 2020, 200,000 by 2025, and 800,000 by Hydrogen will be used to power 6,000 vehicles serviced by 35 refuelling stations during the 2020 Tokyo Olympic Games. The European Union is investing 1.33 billion euro in hydrogen R&D&D France has announced 100m euro for hydrogen development In an effort similar to the current Clean Growth Plan, the United Kingdom has identified 100% conversion to hydrogen as a credible large-scale decarbonisation option. Australia has recently announced that it will explore large-scale hydrogen exports to Japan and South Korea. In Canada, several small, and medium sized companies have demonstrated individual technology components for hydrogen refuelling stations, but they face challenging business models beyond the initial deployments under government subsidy or assistance programs. Moreover, the critical link between electrical and chemical domains has not been exploited in new business models which, for example, combine energy storage, fuel production, and grid stability services. Beyond the domestic use of hydrogen as a fuel and feedstock, B.C. has a significant opportunity to target emerging markets for (Canadian) hydrogen exports. Alternative and synthetic fuels Beyond the refueling infrastructure and domestic demand, there is a significant opportunity for B.C. to become an exporter of clean energy and fuels. The province s abundant renewable energy represents a competitive advantage to capture emerging hydrogen markets (e.g., Japan

6 and South Korea.) When combined with emerging technology clusters (e.g., renewable natural gas, carbon capture and utilisation, synthetic fuel production, etc.) the province can capitalise on its local expertise to enable economic diversification. Japan has a 2030 import target of 300,000 tonnes of hydrogen at a landed cost of 30/Nm3. Similarly, the forecast for South Korea s annual demand for hydrogen is 170,000 tonnes by Enabling the production of liquid hydrogen, ammonia, and metylcyclohexane for export could Recommendations: 1. Support an initiative to assess the carbon intensity of biofuels thereby identifying the lowest carbon intensity pathways (and candidate fuels) 2. Explore the inclusion of biojet fuels under the low-carbon fuel standard while considering the domestic and international use of such fuels 3. Support the analyses and business-case development for LNG as a marine fuel in B.C. and LNG bunkering infrastructure 4. Scale up the support for hydrogen infrastructure in the province 5. Support a cluster of government, industry and academic partners to develop technoeconomic solutions to scaling up hydrogen as a fuel and energy storage alternative, making B.C. a global leader in hydrogen 6. Engage international partners with supporting interests (e.g., Germany, Japan, Korea, Australia) using global clean energy leadership platforms: o Deep dive workshop on Mission Innovation Challenge 8 (IC-8) October 2018 in Berlin (led by Australia and Germany.) o Clean Energy and Mission Innovation Ministerial meetings on May in Vancouver. o Australia Canada session at the next Canadian Hydrogen & Fuel Cell conference (HFC2019), May in Vancouver. 7. Leverage B.C. s existing expertise and partnerships on natural gas exports to include other clean fuels, such as hydrogen 1. Review the Low Carbon Fuel Standard parameters, to ensure that all low- or zerocarbon fuel uses are considered (e.g., hydrogen is considered in the context of electrochemical conversion via fuel cells, it should also be considered in the context of combustion via internal combustion engines.) 2. Support research and development on breakthrough technologies and business models to use B.C. resources (e.g., hydro-electricity and natural gas) to Clean Energy Vehicles Commercial Vehicles Transit The importance of coordinating the provincial clean growth efforts and the $7.1 billion transit plan for Vancouver cannot be over-emphasized. Beyond the estimated 200,000 jobs over ten years, the improved links to Surrey, and the East-West connection along the Broadway corridor, the transit plan provides a unique opportunity to develop a platform for innovation.

7 The impacts of car-sharing and larger numbers of ZEVs may create challenges for transit authorities trying to reduce the number of personal or low-occupancy vehicles on the road. As new technologies and services mature, the availability of on-demand (e.g., Uber) or autonomous driving may create artefacts that actually increase the number of vehicles on the road or the number of km driven per year. They may also distort current pricing schemes. For example, the availability of on-demand, autonomous transportation may enable younger Canadians to travel without adult participation. For jurisdictions with high parking fees and low electricity prices, continuous (autonomous) driving may become more economical than paying for a parking space in densely populated areas. A coordinated effort between all stakeholders could address some of these challenges, and simultaneously create opportunities to commercialise Canadian innovation in the relevant technologies or services. Heavy duty and freight The renewed interest on a link between Vancouver, Seattle and Portland could activate a discussion on smart transportation solutions to improve border crossings (e.g., by minimizing or eliminating idling times.) Heavy-duty vehicles represent a significant portion of all GHG emission from transport in the province. Unlike the GHG emissions from passenger vehicles and busses, the contributions from heavy-duty vehicles have increased since 2007 (Fig. 2.) GHG emissions from road transport: change from 2007(NRC, 2016) Several options have been suggested for reducing GHG emissions from freight trucks. The nontechnical options consider the efficiency improvement of freight logistics such as load-matching and maximizing capacity, a modal shift to more energy-efficient means of transportation (e.g., rail) and the standardization of logistics-related facilities and equipment. The technical improvements deal with the efficiency of internal combustion engine (ICE) trucks. In 2013, Canada began regulating on-road GHG emissions from ICE freight trucks with Gross Vehicle Weight Rating (GVWR) above 3856 kg. Under the Canadian Environmental Protection Act, two phases of regulations have been proposed for the deployment of advanced cost-effective technologies to increase the fuel efficiency and GHG emissions standards for new freight trucks. The first phase applies to 2014 and newer model vehicles, which reach full stringency with model year The second phase is built upon the first phase and reach full stringency with

8 model year It is projected that the full deployment of these legislations will decrease the GHG emissions by 15-50% from freight trucks with model year 2027 compared to the 2010 counterparts depending on the vehicle s duty cycle. The electrification of freight offers zero-tailpipe emission potential. This could result in the large-scale GHG emissions reduction if the electricity or fuel is generated from renewable resources or the production processes include carbon-capture technologies. Current battery electric trucks, using lithium-ion battery chemistries, have a range of km, depending on the mass of the battery. These trucks are being developed worldwide for daily travel on defined routes with low average speeds, high idle times and high frequency of stops and starts. This duty-cycle makes the overnight stationary charging and battery swapping suitable for short haul trucks. For long-haul applications, the low energy density of batteries is a barrier, because significant weight and volumes are required to address the short vehicle range and long recharging times. Even if the energy density is improved by factors of 5 or 10, the weight increase of a 40 tonne GVWR truck would be around 2-4 tonnes. However, long haul trucks are still part of long-term vehicle portfolio when combined with on-the-road charging technology, e.g., overhead catenary wires or dynamic inductive charging. Fuel cell technology has gained experience with fuel cell buses and has successfully penetrated the forklift market. Demonstrations for freight trucks such as package delivery vans and semitractors used in refuse or drayage service are in early stages of deployment. However, recent developments illustrate a growing momentum for heavy-duty, fuel cell applications. Nikola Motor has raised US$100 million to enable full fuel cell truck production by 2021 (with a supporting infrastructure of more than 700 hydrogen stations across the USA and Canada. Toyota unveiled its 2nd generation ("Beta") fuel cell truck with a driving range of more than 480 km (300 miles) per fill. The company is also developing hydrogen solutions for drayage vehicles at ports in California. Given the forecast growth for the port of Vancouver (the largest port in Canada), some of these solutions could find direct applications in B.C. Marine and rail Ferry transport is a critical element of the transport networks in British Columbia. Until very recently, the vessels that transport the commercial and public traffic have relied on conventional marine fuels. A recent surge of interest motivated by a desire for cost reduction and emissions reduction has seen a number of operators around the world begin projects involving liquefied natural gas (LNG). In Norway, Fjord1 is seen as the pioneer with 12 vessels in operation. In British Columbia, two ferry operators are in the process of building and commissioning LNG-fuelled ferries for use in commercial operation. Another application for large-scale LNG bunkering in Vancouver could be auto carriers. Lower emissions could be enabled by the engine technology on these vessels, which is different from that available on existing ferries. Hybrid electric propulsion provides another pathway for low-carbon marine transport, and B.C. hosts leading developers of the relevant technologies. A local company has developed a 1MWh

9 lithium-ion energy storage system supplied for a hybrid retrofit of cargo vessels. This system allows the vessel to operate on battery power while at the harbour, significantly reducing emissions and fuel costs. The B.C. company has also developed power solutions for hybrid platform supply vessels in the Gulf of Mexico. The interest on a fast-rail connection between Vancouver, Seattle and Portland could provide a local market for domestic technologies. Canadian companies have also led international efforts to incorporate fuel cell propulsion in rail applications. Some of these companies have enabled international partnerhships with support from, for example, the (German) Federal Ministry for Transportation and Digital Infrastructure (BMVI) to develop fuel cell propulsion for trains. The Government of Ontario completed a study considering hydrogen fuel cell propulsion for the GO Transit and Union Pearson Express trains. A similar solution may be feasible to link Vancouver to Seattle via high-speed rail. The relevant technology has been piloted in Europe under a 10- year exclusive agreement to supply Alstom Transport with hydrogen fuel cell systems for Regional Commuter Trains in Europe. The combination of progressive climate policies and world-leading technology development has created a unique ecosystem for innovation. Beyond addressing the provincial climate action targets, British Columbia has an unprecedented opportunity to become a global provider of low- or zero-carbon mobility solutions. Recommendations: Explore the potential for linking provincial efforts to a possible high-speed rail connection between Vancouver, Seattle and Portland Coordinate the Clean Growth Plans with the transit plan for Vancouver, and explore the potential for adding an innovation platform Ensure that freight, marine and air transport are included in the provincial initiatives toward the decarbonisation of transportation systems Consider a ZEV mandate for freight and heavy-duty vehicles, as an independent initiative, or as part of a broader ZEV mandate in the province Provide support to quantify the realistic electricity demand (and associated generation and distribution challenges) associated with the broad electrification of public transit and freight services in B.C. (via battery-electric vehicles.) In parallel with battery-electric deployment, consider the deployment of hydrogen and fuel cell vehicles for transit and heavy-duty applications.