Key Takeaways
California has proposed to ban diesel trains in the state and Biden’s EPA is currently taking comments on its request for a waiver to the Clean Air Act to do so.
Railroads will have to transition to electric or battery-powered trains, which are distinctly inferior for the kind of work trains typically do.
The costs are enormous since no alternative currently exists, and California is making freight companies deposit almost $1 billion per year into a fund to help pay for the transition.
California’s waivers for special treatment under the Clean Air Act have been a back door for California to impose its standards on the rest of the nation since its rules have spread to a number of other states.
This waiver will have serious implications for inflation, supply chains and economic growth, while contributing little to climate goals.
Biden’s Environmental Protection Agency (EPA) has requested comments on a waiver sought by the California Air Resources Board to implement new proposed state regulations on freight rail trains that are stricter than the current national Clean Air Act standards. Under California’s proposed rule, starting in 2030, no train older than 23 years may operate in the state, despite locomotives usually lasting 40 years. The proposal also calls for increased use of zero-emissions technology to transport freight from ports and throughout railyards. Starting in 2030, half of all new trains must be ”zero-emission,” and by 2035, all new trains must be zero-emission. The rule would essentially guarantee all train fleets would be zero-emission no later than 2058. The proposal will also ban locomotives in the state from idling longer than 30 minutes if they are equipped with an automatic shutoff. If the waiver is approved by EPA, it will not only affect rail travel in California, but nationwide as well as the same locomotive is used across state borders. Comments are to be filed by April 22, 2024.
Because transitioning from diesel-powered trains to electric trains is prohibitively expensive, California will require all train companies in the state to set aside almost a billion dollars each starting in 2026 to fund an eventual transition to a battery-powered fleet. Locomotive operators would be required to deposit funds into a trust account based on their emissions in California, which can be used to invest in newer mandated locomotives or infrastructure. Train companies cannot fund the transition now because the technology for a completely battery-powered train does not exist. Freight trains are huge and heavy and must operate in the extreme cold and climb steep heights through mountains. Cold weather and steep inclines have proven to reduce the range of truck electric vehicles by half. It would be far worse for freight trains, which carry much heavier loads.
The damage from California’s freight rail regulation would be devastating. Since trains do not switch when crossing state borders, train fleets would be forced to update their entire fleet to make sure they complied with the ban on engines older than 23 years. Also, since almost all freight train companies operate in California, they would all be forced to start contributing almost a billion dollars a year to the mandatory transition fund. Since 40 percent of all long-haul freight traffic is delivered by train, it would mean price increases for almost all consumers. Finally, since an operative commercially available prototype does not exist, every train company would face regulatory uncertainty as the 2030 and 2035 fleet mandates kick in.
The waiver and the proposal in unnecessary as the national Clean Air Act standard for trains ensures that diesel freight is not contributing to bad air quality or other health concerns. U.S. rail can move a ton of freight nearly 500 miles on a single gallon of fuel, which is much cleaner than if the merchandise was moved by truck. Freight railways transport roughly 1.6 billion tons of goods nationwide across nearly 140,000 miles.
California is setting unrealistic targets and unachievable timelines that will undoubtedly lead to higher prices for the goods and services and fewer options for consumers. California is the nation’s largest agriculture producer, which means that increased costs for freight will drive food inflation, as well as goods coming from China that are imported into California ports.
Further, its push for a zero-emission transportation sector is useless since China is currently adding two new coal plants every week and is the world’s largest emitter of greenhouse gases. Rail accounts for only about 2 percent of the greenhouse gas emissions from the U.S. transportation sector. If President Biden is looking for an opportunity to lower prices for consumers, he should start by rejecting California’s freight rail waiver.
Conclusion
California started the EV car mandate that grew to 17 states and nationwide regulations when the Obama Administration granted California a waiver to set its own fuel economy standards. EPA also recently approved California rules requiring zero-emission trucks to make up between 40 percent and 75 percent of sales by 2035, depending on the type. California is now set to use the same ploy for rail, with a waiver application into the Biden administration that will let California set its own emission standards for locomotives that are designed to force electric locomotives to replace diesel. Because a locomotive is not switched across state lines, the locomotive mandate will be forced upon the rail industry nationwide, which will increase prices on consumers as 40 percent of U.S. freight is moved by rail. The California rail mandate clearly interferes with the interstate commerce clause in the Constitution that guarantees the free flow of commerce.
California’s rule will be expensive for rail companies and increased costs for them will mean higher prices for many goods that move by rail for Americans, who are looking for lower costs having been hit by Bidenomics and its inflationary effects for over three years.
