Four federal agencies—the Environmental Protection Agency, the Department of Transportation, the Department of Energy, and the Department of Housing and Urban Development—have released a Blueprint for Transportation Decarbonization, an ambitious plan that outlines the principles the federal government will continue to use to pursue its stated goal of economy-wide net zero emissions by 2050. This “whole of government” mobilization will profoundly affect many investment decisions, collaborations, regulatory actions and policy disputes with material impacts across many business sectors.

Fostering improved, clean transportation has the potential to benefit the country enormously, and advances key goals of the Biden Administration. The transportation sector is the largest source of greenhouse gas emissions in the United States, accounting for one-third of all emissions, and must be addressed for there to be any hope of meeting climate goals. Transportation also affects every American’s day-to-day life, from how they participate in their communities to how they pursue economic opportunity and empowerment, representing a significant opportunity to promote equitable growth.

The Blueprint is the Administration’s most fleshed out vision for pursuing these goals. The Blueprint outlines a comprehensive approach, addressing changes to every mode of transportation, and proposing to do so through virtually every policy lever available—a true “whole of government” approach. It is consistent with, and further advances, key themes in the President’s climate policy enunciated from day one, and further reflected in his signature legislative accomplishments, the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA).

The Blueprint was a highlight of government speakers at the recent Government/Industry Conference for the auto industry, sponsored by the Society of Automotive Engineers: In a keynote, Gabe Klein, Executive Director of the newly formed DOE-DOT Joint Office of Energy & Transportation, called it the “most important policy document in a decade.”

Below are some of the key features:

  • Multiple technological solutions will be needed, reflecting an evolving decarbonization path for several sectors. To many, the electric passenger car is the symbol of transportation decarbonization. But power demands and weight considerations, among other issues, may make it more difficult to use this technology in other sectors, including on-highway freight, maritime, and aviation. The Blueprint recognizes that additional technology must be deployed, including those not yet fully commercialized. It focuses on three: battery electric, hydrogen fuel cell, and sustainable biofuel.

The continued prominence of liquid fuels in a transportation decarbonization plan is especially notable. There remains active debate, even within the agencies which authored the Blueprint as to whether the types of “sustainable” fuels being promoted have the full range of climate benefits they claim.

  • But new technology is not the only tool. In addition to developing and deploying clean technology, the Blueprint will promote measures to decrease transportation demand and increase transportation efficiency. The Blueprint seeks to redesign the communities in which we live, so that people are physically closer to where they work, learn, and recreate. Consistent with the Biden Administration’s “whole of government” approach, this will involve policymakers outside of the four agencies who authored the report, including non-federal entities like towns, cities, and counties with jurisdiction over zoning laws that shape land use. The Blueprint also stresses policies to encourage the most climate-friendly mode of transportation when movement is necessary: For movement of people, this will likely result in renewed focus on mass transit and emission-free micromobility options.
  • A three stage timeline with interim targets. Broadly speaking, between now and 2030, the Blueprint focuses most on research and investments to support deployment. In the 2030s, the focus is on scaling up clean transportation solutions, and the 2040s will be about completing the transition to a net zero transportation sector. But there are plenty of interim benchmarks in between, such as a commitment that all new light-duty acquisitions for the federal fleet be zero emission by 2027, and 30% of private sales of medium and heavy duty vehicles be zero emission by 2030.
  • Continued focus on equity. Ensuring a just transition of the transportation sector is a cornerstone of the Blueprint. Among other concerns, this will mean a focus on ensuring that zero emissions technology successfully penetrates all communities. This could mean creating enhanced subsidies for acquiring electric vehicles, ensuring charging stations are meaningfully available in historically overburdened neighborhoods, and ensuring that transit service is fully accessible for the differently abled.
  • Interaction with advanced driver assistance technology (ADAS). The Blueprint acknowledges that transportation will “dramatically change” in “ways that are hard to forecast,” focusing in particular on another transformational shift occurring in the transportation sector: the emergence of automation and connectivity, up to full vehicle automation. Although such technology is often discussed for its appealing safety benefits, it may also reduce congestion and result in significant environmental gains as well.
  • The continued role of agency-promulgated regulatory standards. The Blueprint is clear that agency-promulgated, technology-forcing regulation has an important role to play in decarbonizing transport, even if the BIL and IRA focused mainly on incentive-based mechanisms. The Blueprint specifically mentions renewable fuel standards, and emissions standards for heavy duty on-highway, off road, and fuel pipeline transportation. More are likely in store, although the Biden Administration will have to tread carefully in light of recent Supreme Court precedent narrowly interpreting the agency enabling statutes that will serve as the authority for these rules.

Whether the Blueprint’s lofty ambitions will be met remains to be seen, but the document is an important outline of the federal agenda to come, at least for the remainder of Biden’s presidency. The transportation sector is in the process of fundamental change, set to dramatically reduce where feasible uses of the internal combustion engine—the technology that served as its bedrock for over 100 years. This process will create exciting opportunities and difficult choices, and the Blueprint provides important insight into federal priorities that should be thoroughly understood when engaging policymakers going forward and when making investment decisions.