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Switching to EV commercial vehicles and investing in EV charging infrastructure can save money and reduce Scope 1, Scope 2, and even Scope 3 greenhouse gas emissions.

The first step to reducing greenhouse gas (GHG) emissions is measuring how much greenhouse gases we currently emit. In the US, the Environmental Protection Agency (EPA) developed the Greenhouse Gas Reporting Program (GHGRP) in 2009 to do just that. Since then, it has surveyed major GHG emitters, including thousands of industrial facilities and suppliers of fossil fuels and other gases. US policymakers, environmental groups, the media, and scientists use the data to analyze and project global warming. Unless your company is a major industrial manufacturer or fossil fuel provider, you won’t have to participate in the GHGRP.

Still, you may be looking for ways to reduce your organization’s carbon footprint. The GHGRP program offers guidance for doing just that. This article explores the GHGRP and the ways you can reduce your organization’s carbon footprint—including transitioning from fossil fuel vehicles to electric vehicles.

Who participates in the GHGRP?

If a facility emits more than 25,000 metric tons of CO2 per year, it must record and report those emissions to the EPA through the GHGRP. About 7,600 facilities currently report to the GHGRP. Combined, they emit 3 billion metric tons of CO2 per year, which is about 50 percent of total US GHG emissions. The EPA tracks another 1,000 fossil fuel suppliers. The EPA estimates that the GHGRP collects data on 85-90 percent of all US GHG emissions. The EPA has a list of industrial operations covered by the GHRP here. The EPA tracks total US GHG emissions in the US Greenhouse Gas Inventory.

What about low-emitting organizations?

According to the EPA, most office-based businesses, small businesses, and public institutions are relatively low GHG emitters. Most of their GHG emissions will come from electricity and vehicle usage. Small manufacturers will also have emissions related to refrigerants and other waste gases. The EPA has three categories for emissions:

Scope 1: Direct emissions from onsite combustion and mobile sources
Scope 2: Indirect emissions from purchased electricity and steam
Scope 3: Optional emissions–examples include product transport, employee business travel, and employed commuting.

Scope 1 Emissions

The EPA offers guidance for identifying and measuring Scope 1 and Scope 2 emissions. Again, Scope 1 emissions include emissions from directly burning fossil fuels and other things like wood, yard waste, paper, etc. Scope 1 emissions also include any natural gas that may leak from pipes or tanks. Finally, Scope 1 emissions include emissions from any vehicles owned by the organization.

You can eliminate Scope 1 vehicle emissions by switching to electric vehicles (EVs). EVs emit no CO2 and can be charged with power generated with renewable energy sources like solar, wind, and geothermal. There are many other advantages to transitioning your fleet to electric. Electric vans, trucks, and cars can have a lower total cost of ownership (TCO) than their fossil fuel-powered counterparts. According to a recent study by US electric power utility PG&E, a fleet of 20 medium-duty diesel-powered delivery vans will cost approximately $4.14 million over 10 years of ownership. The TCO for an electric fleet of 20 medium-duty delivery vans over 10 years is just $2.76 million. EV fleets also give organizations the opportunity to control transportation energy/fuel costs more tightly. It’s easier to estimate the cost of electricity than it is to estimate the fluctuating price of oil and diesel fuel.

EVs are much less expensive to own and operate over time thanks to the low cost of electricity and mechanical maintenance when compared to diesel vehicles makes. There are also many tax and other government incentives for commercial EVs and EV charging infrastructure. In the US, there are significant tax breaks and funding available to businesses that want to electrify their fleet. The recently passed US Inflation Reduction Act (IRA) provides nearly $370 billion to help combat climate change. Incentives include:

The National Electric Vehicle Infrastructure (NEVI) formula program also provides $5 billion for DC fast charging sites. These funds are available now and some states have already started rolling out their NEVI programs.

Scope 2 Emissions

Scope 2 emissions are generated by electricity production. If your organization purchases electricity generated by burning coal, Scope 2 emissions will be higher than if it purchases electricity from renewable energy sources. Many organizations don’t have a lot of choice when it comes to purchasing electricity—they usually must use electricity from whichever energy sources are available. But some utility companies offer the option to purchase all or a percentage of your electricity from renewable sources like solar or wind. Contact your local utility to determine if your organization can purchase energy from renewable sources. The EPA also offers advice for how to decrease Scope 2 emissions.

Scope 3 Emissions

Scope 3 emissions come from any activities or assets not owned by your organization but are nonetheless the result of your organization’s activities. They include things like materials or product deliveries, business travel, and even employee commuting. Scope 3 emissions are also called value chain emissions and they often account for the majority of an organization’s GHG emissions.

The EPA has split Scope 3 emissions into 15 categories:

The EPA has more information about these categories and how to account for them here.

There are many ways that EVs can reduce Scope 3 emissions. Installing DC fast chargers at your office or facility can encourage employees to make the switch to electric, further reducing Scope 3 emissions. Organizations can also work with partners and suppliers to offer incentives to electrify delivery and other commercial vehicles. For example, a company may not own and operate the delivery vehicles for its product, but it can install DC fast chargers at distribution centers to encourage transport partners to electrify their fleets. Again, electricity prices can be more stable than diesel fuel prices, which lets organizations and their transportation partners plan more effectively.

To learn more about how EV commercial vehicles and DC fast charging infrastructure can save your organization money and cut GHG emissions, contact one of our experts today.

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The Inflation Reduction Act (IRA) is a law that provides nearly $370 billion in climate change investments to help reduce carbon emissions by 40 percent by 2030. It provides significant tax breaks for businesses that purchase new medium and heavy-duty electric vehicles (EVs) and new chargers. 

These include:

The IRA tax credits will start after December 31, 2022, and end after December 31, 2032. Businesses can use the credits after receiving other grants or rebates like NEVI funding. These credits, along with many other grants and programs, make electrifying your fleet in the US more affordable than ever.

How does the Clean Commercial Vehicle Credit work?

The Clean Commercial Vehicle Credit lets businesses claim up to 30 percent of the difference between the cost of a clean vehicle and its gas-powered counterpart (up to $40,000) for a medium or heavy-duty commercial EV that weighs more than 14,000 pounds. If a vehicle weighs less than 14,000 pounds, business can claim up to $7,500 per vehicle. There are no income limits on eligibility for the tax credit and the vehicles businesses purchase don’t have to be made or assembled in North America. Businesses cannot sell the tax credits to anyone or any company (like a dealer) for cash.

How does the Alternative Fuel Vehicle Refueling Property Credit work?

The Alternative Fuel Vehicle Refueling Property Credit is a general business tax credit for any company that installs EV chargers, including direct current (DC) fast charging stations. It will offset up to 30 percent of the total costs of purchase and installation of charging equipment, up to $100,000 per charger. Businesses cannot use the credit to offset expenses related to permitting and inspection.

Companies can only use the Alternative Fuel Vehicle Refueling Property Credit for chargers installed in a census area where the poverty rate is at least 20 percent or where the median family income in the area is equal to or less than 80 percent of the statewide median family income.

Businesses can apply the tax credit after receiving other EV grants or rebates, but only to the charger costs not covered by those grants or rebates. Resellers may claim this credit even if they’re selling charging equipment to a tax-exempt organization (nonprofit), government organization, or foreign entity (state or local government/tribes), but they must disclose in writing the amount of the credit. Tritium chargers, including the RT50, RTM75, PKM150, and RT175-S, qualify for the Alternative Refueling Credit.

How does the revised $7,500 Clean Vehicle Credit work?

This is a 10-year extension of the well-known $7,500 Clean Vehicle Credit, but it has been revised. Now it is split into two parts:

There is an income limit for the new Clean Vehicle Credit of $150,000 per year for an individual and $300,000 per year for a household, and the credit will be applied at dealerships during purchase. There are also limits on vehicle price: SUVs, pickups, and vans are limited to $80,000 and all other vehicles are limited to $55,000.

Last, but not least, the law will eliminate the cap on the number of vehicles that can be sold per automaker. The limit was 200,000 EVs per manufacturer, which made Tesla, General Motors, and Toyota EVs ineligible to receive the tax credit. Now you’ll be able to apply the Clean Vehicle Credit to EVs from those automakers.

How does the Previously-Owned Clean Vehicle Credit work?

This is another new tax credit for people who purchase used EVs. It’s worth $4,000 or 30 percent of the vehicle sale price (whichever is lower), and the credit will be applied at dealerships during purchase. There is a $75,000-per-year income limit for individuals and a $150,000-per-year income limit per household. The used EVs purchased must weigh less than 14,000 pounds and have a sale price of less than $25,000. The used EV must be at least two years old when you purchase the vehicle. For example, if you purchase a used EV in 2023, it must be a 2021 or earlier model year. It can be used for fuel cell vehicles and plug-in hybrids and the vehicles are not subject to the same sourcing requirements as new EVs.

Expert Consultation

There are many more US government incentives, grants, and programs to help you transition to EVs. Contact Tritium today to learn more about how to take advantage of them.

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