In April 2023, the California Air Resources Board (CARB) adopted the “in-use locomotive regulation,” (or “locomotive regulation” for short) that mandates the phased retirement of older diesel locomotives and requires zero-emissions (ZE) rail technologies by 2030 for certain locomotive types and by 2035 for freight locomotives. The new CARB locomotive regulation represents a transformative shift in the U.S. rail industry since it will be the first state-level mandate to impose ZE requirements on this specific transportation sector.
The regulation’s implementation is contingent on the Environmental Protection Agency’s (EPA) approval. California is seeking a waiver under the Clean Air Act (CAA) to enforce these stricter air emissions standards for its rail operators. If the exemption is granted, it will not only have a negative impact on California rail operations, but could open the door for other more progressive states to adopt similar regulations, thereby entirely changing rail transport in the U.S.
Key requirements of the CARB locomotive regulation include banning locomotives older than 23 years, limiting idle times, imposing stringent reporting requirements, and mandating the use of annual “spending accounts” based on emissions and energy use. While the regulation aims to reduce greenhouse gas (GHG) emissions and air pollution, significant concerns have been raised about its feasibility, impact on freight and passenger rail operations, and the broader energy infrastructure challenges.
While many industry critics and other stakeholders have questioned the merits and efficacy of the regulation, few have discussed or addressed the considerable upstream energy infrastructure requirements that will be needed if this new form of rail regulation is allowed. The CARB regulation envisions that the primary ZE technologies utilized for compliance will be electric-battery generation, hydrogen fuel cell generation, or hydrogen direct combustion as a substitute for currently used diesel fuel.
A large number of commenters have questioned the viability of these ZE technologies and whether they can be utilized in the timeframe assumed by CARB. An equally important question, however, is whether or not the supporting energy infrastructure
(primarily electric and hydrogen production, transportation, distribution, and storage infrastructure) for these ZE end uses is available, and if not, how this infrastructure would be added, and at what costs, in a very narrow compliance time window.
Key Issues and Concerns with the CARB Locomotive Regulation
Energy Infrastructure Availability Challenges: The shift to ZE locomotives will place enormous pressure on California’s already strained electric grid. The state’s power system is already struggling with reliability issues, and adding new rail-related electricity demands will exacerbate these challenges. Furthermore, the regulation overlooks the significant infrastructure required for hydrogen production, transportation, and storage. California lacks the necessary hydrogen infrastructure and developing it would require billions of dollars in investment.
Energy Infrastructure Cost Implications: CARB estimates that the locomotive regulation will cost the industry approximately $16 billion over 25 years. However, this figure excludes the substantial costs of upgrading the state’s energy infrastructure. Upgrading the electric grid, building new power plants, and developing hydrogen pipelines could drive costs far higher, potentially leading to increased prices for consumers and businesses.
Supply Chain Disruptions: California’s rail system plays a critical role in national and international supply chains, particularly for goods moving through its major ports. The locomotive regulation’s attempt to focus on “green” intermittent resources could lead to significant cost increases and disruptions in freight and passenger transportation, which could ripple throughout the U.S. economy. These disruptions come at a time when supply chains are still recovering from the pandemic and inflationary pressures.
Environmental Impacts: While the locomotive regulation aims to reduce GHG emissions, its actual impact may be limited. The transition to electric locomotives could lead to increased reliance on natural gas-fired power plants during peak demand, reducing the potential emissions benefits. This would be particularly true if the industry utilized resources from less intermittent RE sources to offset potential rail system reliability challenges. Similarly, the widespread adoption of hydrogen, which is primarily produced using natural gas, could result in higher or at least significantly reduced overall GHG emission benefits. While industry could use alternative “green” sources of hydrogen, production from those green resources is not at the same scale as those coming from “grey” resources. Further, these green resources could also lead to additional reliability-related issues for freight and passenger delivery.
Conclusion
CARB’s locomotive regulation is a risky proposition that could result in very high costs, for very little gain. The rail industry exhibits high-end use energy efficiency and has relatively low emissions particularly when compared to other sectors of the transportation industry: rail emissions and energy use are measurable in fractions of a percent. Yet, despite this, CARB proposes sweeping regulations that experiment with a critical U.S. economic sector for a very questionable environmental benefit.
The supporting energy infrastructure needed for the substitute ZE technologies envisioned by the locomotive regulation (both electric and hydrogen) will be considerable, particularly those associated with electric grid upgrades, and will compound an already considerable set of systematic challenges the utility industry faces in meeting other sweeping social policy goals and aspirations. The costs of building and/or reinforcing gas, power and hydrogen infrastructure to support new rail uses could also be prohibitive and will likely be borne by not just the rail industry itself but very likely all electric utility ratepayers given the typically socialized nature of these costs.
Lastly, the regulation may fail to deliver the anticipated environmental benefits, as emissions reductions could be offset by increased reliance on natural gas and other fossil fuels. As such, CARB’s approach may ultimately impose more costs than benefits on the rail industry and California’s economy.
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Written by David E. Dismukes Ph.D.
Dr. Dismukes is Professor Emeritus, Center for Energy Studies, Louisiana State University and Distinguished Fellow and Senior Economist, Institute for Energy Research
