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California to require all new cars, passenger trucks be zero emission by 2035

Highlights

Order sets 2045 target for medium-, heavy-duty vehicles

Urges state lawmakers to ban new fracking permits by 2024

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.

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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 vehicles 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 case, "presenting additional upside risk to displacement of gasoline demand in PADD V."

'SYMBOLIC' FRACKING BAN

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.

Newsom said during a press conference that the measure would not eliminate the market for used gasoline-engine cars.

"You can still keep your internal-combustion-engine car," he said. "We're not taking anything away. We're providing an abundance of new choices and new technology, being agnostic about how we get to zero emissions but being committed to getting to zero emissions by 2035."

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.

Newsom said he asked lawmakers to take action to stop issuing new fracking permits because he does not have the authority as governor. He added it was a symbolic measure as fracking represents less than 2% of California's oil production.

"We have to do more on the demand side and that's why today we think we've made a bold and big step in advancing that cause," he said.