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California passes law requiring zero emission cars by 2035

S/P Platts

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Washington — California, the top US gasoline-consuming state, aims to end new sales of gasoline-powered cars and passenger trucks by 2035, according to an executive order announced Sept. 23 by Governor Gavin Newsom.

The order directs the California Air Resources Board to develop regulations requiring increasing sales of new zero-emission vehicles in the state to the target of 100% by 2035.

It sets a 2045 target for reaching 100% sales of new medium- and heavy-duty vehicles with zero emissions.

The order also asks the state legislature to ban new permits for hydraulic fracturing by 2024 as part of the effort to steer the state away from fossil fuels and reduce carbon pollution.

S&P Global Platts Analytics currently projects California sales of light-duty, plug-in electric vehicle to reach 1.5 million annually by 2035, accounting for nearly 25% of all light duty EV sales in the US and displacing around 260,000 b/d of refined product demand, said Zane McDonald, senior energy transition analyst.

McDonald said the new government mandate would require a nearly 45% increase in 2035 sales of light-duty EVs in California versus the current base, “presenting additional upside risk to displacement of gasoline demand in PADD V.”

California used about 956,000 b/d of gasoline for transportation in 2018, according to the latest state-level data from the Energy Information Administration.

California’s oil production has fallen steadily since 1986. It averaged 392,000 b/d in June, down from 442,000 b/d a year earlier, according to the latest EIA data.

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