“Game-changing” EPA grant fast tracks decarbonization at the Port of Oakland

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Last October, the U.S. Environmental Protection Agency awarded the Port of Oakland, California, a $322 million grant to help fund the port’s transition to zero-emissions operations.

The Port of Oakland is one of the most important ports on the U.S. West Coast, the gateway for 99% of waterborne goods moving through Northern California.

The port calls the grant, which was funded under the Inflation Reduction Act’s $3 billion Clean Ports Program, “the largest-ever amount of federal funding for a Bay Area program aimed at cutting emissions from seaport cargo operations.”

Quitting Carbon recently spoke with Matt Davis, the Port of Oakland’s chief public engagement officer, to learn more about how the grant will accelerate the port’s pursuit of zero-emissions operations.

“It's going to catapult us into a great trajectory,” Davis told me. “$322 million is more than we ever could envision before the start of this last administration. It's pretty game changing.”

This conversation has been edited for length and clarity.

What zero-emissions or sustainability initiatives did the Port of Oakland have in place before applying for the EPA grant?

Matt Davis: Our action on the emissions reduction front goes back a couple of decades. In 2009 our board passed our Maritime Air Quality Improvement Plan, which was a traditional air quality emissions reduction program focused on toxic air contaminants, diesel particulate matter. It helped to lead the port to an 85% reduction in diesel particulate matter, or diesel soot, for our local residents. That was primarily looking at truck emissions, ocean-going vessels, making sure that we had shore power connections so ships could plug into the electric grid when they were here at port and turn off their auxiliary engines.

From 2009 to 2020 was the period more focused on getting zero emissions where we could but focusing on the dirtiest of the dirty and creating a more sustainable path forward. In 2019, our Seaport Air Quality 2020 and Beyond Plan came into effect, and that was really looking at the next generation: now that we've got a better handle on toxic air contaminants and near-term impacts, what is the greenhouse gas impact? What can we really be doing to decarbonize the footprint of our seaport? That manifested itself into a fairly ambitious plan for technology readiness, electrification, and resiliency to make sure that our electric grid could support the increased utilization of electric power for our own utility.

While we get our electrons fed to us by Pacific Gas and Electric, we're responsible for much of the end user last-mile energy provision. We also inherited from the Army and the Navy, from 1927 when we were incorporated, a lot of legacy infrastructure. We really wanted to make sure we had the power capacity, the power distribution, and the capacity and the equipment to deliver our logistics needs.

Our board also passed in 2020 an environmental ordinance, which requires that all our marine terminal operators give us their plan on how they're going to decarbonize to get to zero emissions. As a landlord, we have limited regulatory authority. We're not like the [California] Air Resources Board or the Environmental Protection Agency (EPA) that can mandate it, but we really tried to pursue a partnership approach. That allowed us to then go and apply for grant funding, which follows on to actually implement the plans.

How did the opportunity to pursue the EPA clean ports grant come about? It looks like the port had significant help from elected officials as well.

Davis: The clean ports grant was the largest grant I can recall our having received, and I've been here since 2004. In 2021, we had received a grant from the federal government for $5 million to help develop a green microgrid. Again, because of the fact that we receive the majority of our electricity through PG&E transmission lines, we're trying to focus on locally generated renewable power so that we're not as dependent on the high-voltage power line running through Moraga in times of extreme heat events or other public safety power shutoffs, which, fortunately, are not occurring as often as they were a couple years ago.

We then worked with the California Transportation Commission to secure a $42 million grant for a larger microgrid that encompasses more parts of the seaport and includes renewable solar power generation, battery electric storage systems, and truck and heavy-duty charging stations. So again, building up our capacity, including personnel, to implement these grants and then the actual electrical capacity.

As more equipment is starting to come into the seaport that is zero emissions, we're attempting to be technology neutral. We have a lot of interest in battery electric. There's also additional interest in hydrogen. We're part of the California Hydrogen Hub and ARCHES, the Alliance for Renewable Clean Hydrogen Energy Systems. One of our marine terminal partners is scheduled to have hydrogen equipment deployed for the trucks that move cargo around on the terminal.

All of this then culminates into the complementary, like you said, tremendous support that we got from our federal elected delegation for the EPA grant. Nearly every member of the Bay Area congressional delegation was in support of our initiative. We also got a strong level of support from the State of California in terms of our Assemblymembers and state senators.

All this comes down to the fact that our Board of Port Commissioners, which is our governing agency, has just been really insisting with us and partnering with us in approving and supporting good ideas that we bring from our industry tenants, from our community partners.

The clean ports grant for us is a really unique endeavor because it's not just money to pay for equipment or money to pay for infrastructure, it's also supporting initiatives. We have 20 partners, from our industry side, but also from workforce development, from community-based organizations in West and East Oakland, that are going to help design community workforce development training programs so that people can come from our local neighborhoods and be employed in the new greentech economy.

We're also looking at ways we can deploy air-quality monitors, in cooperation with the Bay Area Air Quality Management District, and in consultation with community members, to look at some of the fenceline impacts, to see if we can have some measurable progress in air quality before and after the grant is implemented.

The port estimated that close to 700 pieces of equipment could be funded with the $322 million EPA grant. Walk me through what that investment is going to look like.

Davis: We didn't get everything we asked for. The final total was 663 pieces of zero-emissions equipment. The majority of those, about 475, are going to be zero-emissions drayage trucks – Class 8 trucks that move heavy-duty cargo to and from a seaport. 188 was the final tally of cargo-handling equipment. These vary from what are called “yard hustlers,” which move cargo from the cranes to a stack. They could involve top picks, which bring a cargo box into a large stack. It could involve non-diesel forklifts for some of our warehouse operators.

We have about 14 different partners that are involved in various versions of how they're going to be deploying those for operations in the port. A couple of our partners, like CALSTART or Forum Mobility, are going to work with us to help make the availability of the zero-emissions trucks more aware to the average truck driver who may not otherwise be aware of the incentives, or the capacity for them to have an equally affordable truck to what they currently drive.

Electric trucks and hydrogen trucks are going to be more expensive than the typically used port truck that we see in service most of these days. But the fleets are evolving, the entire industry is evolving, and so we're hopeful that we're going to see the integration and the total cost of ownership continue to drop.

That's a good segue into my next question: Does this project include private truckers who service the port? Or is this grant money specifically for on-port equipment?

Davis: Our goal and our hope and our expectation is that funding, working with the partnerships that we brought in, is going to be distributed among those that are operating in and around the port economy. Unlike some replacement programs, where they're taking a diesel truck out of service, replacing it, and there is a requirement for so many miles of service, we're not aware that the EPA is being quite as doctrinaire in that regard, which I think does expand the flexibility, but we do need to have some sort of proof of port operations.

We want to have the greatest impact in West and East Oakland, communities that have been historically burdened by logistics and truck operations. That's why we're trying to find a group of industry partners that really know port truckers and port drivers.

Could this include the trucks that do medium-term runs from the port to warehouses in the interior, in Tracy or the Central Valley?

Davis: The majority of the cargo activity that we see to and from the port is to Tracy. Our local market, if you look at it in a logistics sense, goes all the way out to Utah. The biggest limiting factor, frankly, for battery electric has been range and then cargo carrying capacity. As technology matures, we want to see more people feel comfortable utilizing trucks for that long 100- to 150-mile haul on one charge. That's the goal, to make it a credible alternative to diesel equipment.

What challenges or barriers have you encountered in moving to a zero-emission or battery electric powered model at the port?

Davis: It’s just the traditional growing pains that I don't think are too distinct from a lot of other early adopters. It does come down to price. There's been a lot of great programs that have been put into place. California’s HVIP [Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project], provides direct vouchers to dealers, reducing the administrative burden for those who want to purchase a lower or zero-emissions truck.

We have heard concerns about federal or state excise taxes adding to the overall financial burden because the cost basis for this equipment is higher, so therefore the excise tax is higher. That's an area that we would like to see either the feds or our state partners look at because you don't want to be creating a disincentive to somebody wanting to bring a zero-emissions vehicle into their fleet, or into their very small fleet, if they're an independent owner operator.

Reliability is always going to be a concern. The cargo carrying capacity. The ability to go a long distance on a single charge for battery electric. Having fast charging equipment is a big electrical draw.

That's one of the things we're very focused on – looking at: How do we smooth out our peak power demand and make sure that, if for whatever reason, 100 truckers all want to immediately do a fast charge, how are we going to ensure that we can provide them with the adequate supply? You have to do a proverbial building that cathedral for Easter Sunday. You can't have anybody left out on the street when it comes to the ability to charge.

Those are the considerations we're seeing from the user perspective. Our tenants do these operations every day, for two full shifts a day, in many cases, 16 hours. They're looking at having a single piece of equipment to replace one single piece of diesel equipment and making sure that you can do that in a way that their workers can operate on that almost continuously. That's where the hydrogen versus battery electric comes in. But it's kind of a fun time. We're at the new frontier of a lot of these technology deployments.

The biggest difference that we're seeing from a couple of years ago is that industry and our partners and those that have the capital to invest and really make a transformative difference are very eager to do so. They were more reluctant a couple years ago, when technology was more nascent. It's becoming a lot a lot more commonplace. We're seeing a version of "Moore's Law" with the pace of adoption and efficiencies becoming a lot quicker.

You hinted at potential political headwinds. I'm wondering, one, the EPA grant, was the money obligated? Is it already on the way to Port of Oakland? Could it be clawed back should the Trump administration choose to do so? And second, what impact could the state authorities’ decision to withdraw the waiver request for heavy-duty trucks have on your plans to clean up the fleet that services the port?

Davis: Well, the first one, that is a $322 million question. Our board took an action to accept the grant in late December, so we have a formally obligated grant from the EPA. Obviously, we're going to be very hopeful, and we're going to continue to plan as if all the funding will be released.

The message that we're trying to communicate is that the majority of the funding that's going to be matched by this EPA grant is from private industry partners that are, in many cases, corporations that don't have an axe to grind. We're all just trying to get our business done, move our economy forward, and build resiliency within the system, and avoid the supply chain fiasco like we had a couple years ago.

This is a platform in which you have industry, government, community, coming together. I think that'd be a tough alliance to crack. So that's our hope, because it is definitely supported by all corners.

In terms of the recent news that the Air Resources Board released about the Advanced Clean Fleets waiver removal and the railroad rule, I haven't had a lot of time to digest it since it's fairly new. I think that the zero-emissions path forward is pretty clear. There's going to be ample demand in this marketplace.

The port referred to the grant as “fast tracking” its plans for zero-emissions operations. If you do get that $322 million in hand and are able to buy those 663 pieces of equipment, where does that get you as far as the port's vision for zero-emissions operations?

Davis: It is a fast track. On the grant award, we were granted about 75% of our initial ask. We had envisioned that the full grant amount could have replaced 100% of the cargo-handling equipment with zero-emissions equipment. This would put us nearly 75% or more on the way there, at least on the cargo-handling side. We're trying to do it as quickly as possible.

The lessons that we're going to learn from this are going to then help spur on additional improvements. The technology that we're planning for today is being improved six months from now. The first-generation electric trucks put into service are well surpassed by the technology that's out today.

It's going to catapult us into a great trajectory. I don't see that it stalls out just because we didn't get all the grant money that we asked for. Because, again, $322 million is more than we ever could envision before the start of this last administration. It's pretty game changing. We just got to get to work and make it happen.