Rethinking Energy Conservation in Ontario – Results:Green Commercial Vehicle Program
| In November, 2010, the ECO released volume 2 of its Annual Report on the progress of activities in Ontario to reduce or make more efficient use of electricity, natural gas, propane, oil and transportation fuels. Click here for more information on this report, including videos and communications materials. | |||||
|
|||||
Transportation accounts for the highest energy demand in Ontario, of which freight transportation is a significant component. In Ontario, trucking is the dominant mode of transport for goods movement.
Within the transportation sector, freight trucks alone account for a third of both energy use and greenhouse gas (GHG) emissions, and are the fastest growing users of energy. From 1990 to 2007, freight trucking experienced a 90 per cent increase in both energy use and in GHG emissions. The increased use of freight trucks during this period is partly explained by many companies adopting a just-in-time delivery system that demands expedited shipping to minimize the amount of excess inventory.
Fuel consumption and GHG emissions are intimately connected in the transportation sector. Since the combustion of petroleum-based transportation fuels releases GHG emissions, decreasing their consumption would result in decreased GHG emissions. As shown in Figure 5, the trend in trucking for Ontario has been a significant increase in diesel fuel. The primary fuel type for freight trucks is diesel, followed by gasoline. The share of alternative fuel use for commercial vehicles is negligible, representing about one per cent.
Note: *Other category includes natural gas and propane. Source: Natural Resources Canada, Comprehensive Energy Use Database, 1990 to 2007.
In August 2007, as part of the province’s Go Green: Ontario’s Action Plan On Climate Change, the government announced the Green Commercial Vehicle Program (GCVP) with the goal of reducing greenhouse gas emissions through reduced fuel consumption from the commercial vehicle sector. The province originally committed $13.9 million in grants over four years to this program to encourage the sector to purchase dedicated alternative fuel vehicles (AFV) and retrofit heavy-duty vehicles with anti-idling devices.
The funding allotted for the GCVP is divided into two types of grants: $11 million for purchasing an alternative fuel vehicle; and, $2.9 million for the purchase of an anti-idling device for heavy-duty trucks. Companies can apply for up to a third of the incremental cost (over a conventional vehicle) of purchasing a hybrid or alternative fuel vehicle. Eligible alternative fuel vehicles are hybrid engine, dedicated natural gas, propane, or other dedicated alternative fuel engines at the discretion of the ministry.
Companies can also apply for a third of the cost to purchase an anti-idling device for heavy-duty trucks. Also, until June 30, 2010, the GCVP complemented the Retail Sales Tax (RST) rebate for dedicated alternative fuel vehicles (the RST rebate for AFVs was terminated with the introduction of the Harmonized Sales Tax (HST) on July 1, 2010).
Programs like the GCVP are important in helping fleets overcome financial barriers affecting adoption of technologies that contribute to reducing energy intensity and lowering emissions in freight movement. As a condition of receiving a grant, companies must allow the Ministry of Transportation to collect data for one year to measure the fuel and GHG savings from alternative fuel vehicles and anti-idling devices. Once all of the data have been collected, validated and analyzed, the ministry intends to publish the results of the fuel and GHG savings on its website.
Program Results
As of September 2010, the ministry had issued 183 grants for AFV purchases and 1,108 retrofit grants for anti-idling devices. The GCVP has awarded approximately $3.2 million in grants (of the $13.9 million available).
The program has not been as successful as anticipated. Grants sought for AFVs have been much lower than the ministry expected. Of the $11 million allotted for AFV grants, the ministry has issued about $1.3 million. Among the reasons for this, according to the ministry, are that fleet managers remain cautious about adopting alternative fuel commercial vehicles, and the impact of the 2008/2009 recession on businesses capital expenditures. As well, limited market availability of commercial AFVs has also resulted in some applications being postponed or rejected. Hybrid electric vehicles represented almost 90 per cent of the grants issued for AFVs.
The uptake of grants for anti-idling devices, on the other hand, has been more successful. More than 1,100 grants have been issued totalling approximately $1.9 million – almost two-thirds of the available $2.9 million. With industry adoption being low and grants targeted at the first years of the program, MTO is no longer providing funding to any new applicants. MTO is now focusing its attention on analyzing data received from grant recipients so that it can provide results to government and the commercial sector.
Issues and ECO Comment
The most basic tool needed to address energy and emissions reductions is measurement. The more fleet managers track and understand their fuel use, the more likely that fuel consumption can be managed. Considering the lack of data on freight transportation, and in particular on fuel consumption, the ECO is encouraged that the ministry has taken steps to incorporate measurement and reporting of results in the GCVP. Fleet owners and operators have taken steps to improve fuel efficiencies so they can reduce operating costs, stay competitive and cut emissions.
Once the results are compiled, the ECO believes that the ministry should provide a report in 2011 that analyzes the program’s effectiveness, and make recommendations on whether and how the program should be expanded. If the program is continued or expanded, the ECO will monitor the results for possible inclusion in future reports.
