A Catalina Express ship leaves Downtown Long Beach Thursday, March 17, 2022. Photo by Brandon Richardson.

Catalina Express, the primary mode of transportation between Catalina Island and the mainland for the past 40 years, could see some state funding to help it comply with new emissions standards that start going into effect next year.

The news comes as the California Air Resources Board voted Thursday to approve allocating $60 million to help companies pay to upgrade their fleets.

Catalina Express must now go through an application process to be eligible to receive some of that funding. It will likely be months before the company learns if its application is successful and how much of the $60 million it would receive.

The funding, though, is much-needed for Catalina Express, which previously expressed concerns about having to shutter because of the cost of adhering to the stricter requirements.

The regulations—which were approved in March and will require harbor crafts such as tugboats and ferries that operate along California’s coast to upgrade to the cleanest and newest Tier 4 engines—are expected to result in an 89% reduction of diesel soot (or particulate matter) and a 54% reduction in nitrogen oxides by 2035.

The company’s plans for full compliance are still in the works, but for now, Catalina Express president Greg Bombard said the company is proposing to replace three of its older vessels with one larger Tier 4 vessel, which will be able to transport the same amount of people as the three initial ships, Bombard said.

Bombard does not anticipate that replacing three vessels with one will impact Catalina Express’ daily schedule at all.

“We’re lucky enough that we’ve been in business for almost 41 years now, and we know where that vessel will fit into the schedules to be able to accommodate the amount of people that we normally move,” Bombard said.

Still, by 2025, Catalina Express will have five vessels that will not adhere to the new regulations, Bombard said.

But Bombard expects that within the next year, Catalina Express will identify how to meet both entities’ goals without any interruption of service, he said. While the new amendment goes into effect in early 2023, its requirements are phased in through the end of 2032.

“We’ll try to do everything we can to meet their regulations, but also we’ll need to look for some help,”  Bombard said.

And luckily, there are possibilities for receiving extensions if needed, Bombard said.

This wasn’t the first time that CARB has imposed new regulations on the company; most recently, in 2009, a regulation mandated that Catalina Express update its fleet to Tier 3 engines, an endeavor that cost about $4 million per vessel, Bombard told the Business Journal in March.

As of November, six out of Catalina Express’ eight vessels have been or are in the process of updating to Tier 3, but upgrading to Tier 4 is an entirely different scope, Bombard said. The company has been able to demonstrate the magnitude of those challenges through studies it launched when the new regulations were initially proposed.

“What we were able to show the staff of CARB was it wasn’t feasible for us to upgrade existing boats,” Bombard said.

Although upgrading each vessel with a Tier 4 engine would cost about $9 million each, the feasibility studies demonstrated that the new engine would add so much additional weight, that in order to meet safety requirements, the ship would need to go from carrying 390 passengers to only 172, a reduction of 56% of its passenger capacity, Bombard said.

“That’s not feasible in anybody’s eyes,” Bombard said.

As a result, the only solution would be to replace the entire ship with a new one—however, this proved to have its own challenges, as replacing one ship would cost about $20 million, Bombard said.

“That’s a lot of money, and what we worry about as much as anything, because we are the lifeline link to Catalina Island—if we have to go out and replace this fleet . . .  we’re going to have to spend somewhere in the neighborhood of $120 million,” Bombard said. “CARB staff understood, they started listening.”

Prior to the passage of the new regulation, Catalina Express began seeking grant funding or government assistance, although most state and federal funding is specifically allotted to the transition to zero-emission technology, Bombard said.

While Catalina Express conducted another study to assess the feasibility of adapting to zero-emissions technology such as electric or hydrogen-operated fleets, the result proved that the current technology was not up to par with the needs of the company, and is better suited to short-haul ferries that can make slower trips, Bombard said.

Additionally, while many ferries that operate throughout California are publicly operated, Catalina Express is privately owned, and does not have the tax structure to support the efforts, especially considering Catalina Island is only home to 4,000 people, Bombard said.

Raising ticket prices to compensate for the funding was not an option, as it is integral that pricing remains affordable, particularly for residents of Catalina Island who need to travel back and forth for essential services, Bombard said.

Without the funds to support the new regulation, the company had concerns that it may need to go out of business, a prospect that would severely impact Catalina Island’s economy.

“We’re an essential transportation to Catalina,” Bombard said. “The whole economy at Catalina is built on tourism.”

Luckily, CARB was receptive to Catalina Express’ concerns, Bombard said.

“We’re both in kind of a position where we need to meet the goal of emissions but we need to keep prices in line so everybody can enjoy Catalina  . . . and keep it affordable for everybody,” Bombard said. “That’s where the hard part comes in.”

Prior to the pandemic, Catalina Express averaged about 500,000 roundtrip passengers for a total of 1 million crossings each year.

Although passenger numbers dropped 43% in 2020, by the end of 2022, Bombard anticipates that Catalina Express could reach its 2019 levels, he said.

Particularly following pandemic restrictions, people became even more aware of what Catalina had to offer as far as an outdoor destination, Bombard said.

“I think Catalina really was a popular location once we were able to reopen to accommodate everyone on board and not just essential travel,” Bombard said.

With ports in Long Beach, Dana Point and San Pedro, Catalina Express has transported over 33 million people since its 1981 founding.

“We look forward to working with (CARB)—we think that it’s a challenge, we’ve had a lot of other challenges through our 40 years, and we’ve just gotta make sure that we look after the general public, and we look after Catalina Island, as those folks are depending on us to be there every day,” Bombard said.

Editor’s note: This story has been updated to clarify the process for Catalina Express to receive state funding.

Without state funding, Catalina Express could face insurmountable financial strain from proposed regulation