Sweeping California Clean-Energy Regulations on Truck Fleets Put on Hold
Controversial and sweeping clean-air regulations California was moving to implement on trucking fleets in the state have been put on hold, with a new call for public feedback and the proposed creation of an industry working group. This appears to be a welcome move for many expected to be impacted by the regulations, although this does not necessarily mean the rules won’t eventually be implemented along existing lines. As drafted, the proposed ACF regulation would fundamentally change trucking operations in California, and this rule has already begun to influence regulations in several other states.
The California Air Resources Board (CARB) had passed a final regulatory package on California Advanced Clean Fleets (ACF) and submitted it to the California Office of Administrative Law (OAL) for final determination by July 27, 2023. That deadline came and went without OAL action. On July 31, 2023, CARB announced it had withdrawn the final regulatory package from OAL, with an intention to resubmit at a later, undetermined date.
Contemporaneously with the withdrawal, on July 25, 2023, CARB announced its intention to form an industry working group, the Truck Regulation Advisory Committee or “TRAC,” to assist CARB with implementation of the proposed ACF regulation. There is a public meeting scheduled for August 22, 2023, to discuss formation of the TRAC and solicit public feedback.
On April 28, 2023, following a two-day public hearing and board meeting, CARB passed and approved the proposed ACF regulation for final rulemaking. Since that time, due to the far-reaching impacts the new rule, and the indication from other states that they plan to adopt similar regulations in their jurisdictions, significant concerns have been raised and numerous members of the regulated community have promised to sue.
Under the ACF regulation, “high priority fleet owners” include entities with over $50 million in annual revenue and at least one covered vehicle operating in California, and fleet owners that independently or jointly own, operate, or direct the operation of fifty (50) or more covered vehicles in California.
The proposed rule applies to drayage trucks, local, state, and federal government fleets, and “high priority fleets” of light-duty package delivery vehicles and vehicles with a gross vehicle weight rating (GVWR) greater than 8,500 lb. that are operated in California. This GVWR includes box trucks, vans, buses with two and three axles, yard tractors, work trucks, day cab tractors, sleeper cab tractors, and specialty vehicles.
The ACF regulation provides two compliance pathways for California fleet owners. The rule requires fleet owners to commit to (1) add only zero-emission vehicles to their California fleet, beginning January 1, 2024, and retire all internal-combustion-engine (ICE) vehicles that have passed their “minimum useful life,” as defined in the rule, beginning January 1, 2025, or (2) electrify percentages of their California fleet in accordance with the milestones set forth in the rule. There are extensive records and reports that fleet owners must keep and submit annually for all covered vehicles in the California fleet. The rule provides narrow exemptions and extensions that allow fleets to add ICE vehicles in particular circumstances, but all are contingent on approval by CARB staff, and failure to comply with the rule carries with it the possibility of steep administrative, civil, or criminal penalties.
This rulemaking has the potentially to dramatically impact commerce in California and other states emulating CARB’s regulatory approach. Procopio’s Energy and Environmental Law attorneys will continue to monitor the situation closely and keep clients informed of the latest developments.