USA: California: Heavy-Duty ZEV Program

Regulatory Background

In June 2020, the California Air Resources Board (CARB) adopted their first zero emission vehicle (ZEV) requirements for heavy-duty trucks. The Advanced Clean Truck (ACT) Regulation has two main components, a manufacturers zero emission vehicle sales requirement and a one-time reporting requirement for large entities and fleets [5082]. The ZEV sales requirements are applicable to manufacturers of Class 2b-8 trucks beginning from 2024.

Early in the regulatory process, a fleet rule requirement was proposed that would have required fleets to gradually increase ZEV purchases when replacing vehicles starting in 2020. However, this was initially rejected because it was believed that ZEV availability and support was insufficient to meet state commitments. Later, in April 2023, CARB approved the Advanced Clean Fleets (ACF) Regulation that requires a phased-in transition for California fleets toward zero-emission medium- and heavy-duty vehicles starting in 2024 [5812][5813][5814][5815].

While the ACF regulatory package approved by CARB in April 2023 was submitted to the Office of Administrative Law (OAL) in June 2023, it was withdrawn in July 2023 to make additional changes [5937]. One of the more substantive changes was the removal of a provision that would have sunset the Advanced Clean Trucks (ACT) regulation at the end of the 2035 model year. This will instead be addressed in a future regulatory action. The removal of the sunset provision does not affect the requirement for 100% ZEV sales starting with MY 2036 contained in the ACF rule.

ZEVs are defined as vehicles with zero exhaust emissions of criteria pollutants and greenhouse gases such as battery electric vehicles or hydrogen fuel-cell vehicles. The ACT/ACF regulations do not consider lifecycle emission effects for the vehicles and their fuels or non-exhaust emissions (such as brake and tire wear particles).

Advanced Clean Truck Regulation

Manufacturers ZEV Sales Requirement

The manufacturers Zero Emission Vehicle sales requirement requires truck manufacturers to transition from diesel trucks and vans to electric zero-emission trucks beginning in 2024. However, early credits can be generated starting in model year 2021. As already noted, the ACT rule is subject to a sunset provision at the end of the 2035 model year and starting in 2036, all Class 2b-8 vehicles sold in California, except for authorized emergency vehicles, must be ZEVs [5815].

The adopted rule is meant to enforce a large-scale transition of zero-emission medium- and heavy-duty vehicles from Class 2b to Class 8. Manufacturers who certify Class 2b-8 chassis or complete vehicles with combustion engines will be required to sell zero-emission trucks as an increasing percentage of their annual California sales from 2024 to 2035. By 2035, zero-emission truck/chassis sales would need to be 55% of Class 2b-3 truck sales, 75% of Class 4-8 straight truck sales, and 40% of truck tractor sales.

The ZEV sales schedule, Table 1, is specified for three vehicle groups: Class 2b-3 group (GVWR of 8,501 - 14,000 lbs), Class 4-8 group (GVWR above 14,000 lbs, excluding tractors), and Class 7-8 tractor group (GVWR above 26,000 lbs).

Compliance is determined by first calculating a deficit based on the manufacturer’s annual sales volume of on-road vehicles produced and delivered for sale in California. Credits generated from ZEVs and NZEV sales are then used to offset this deficit.

The deficit is calculated as the product of the model year percentage requirement from Table 1, and the appropriate weight class modifier for each vehicle from Table 2. Every model year, the deficits generated by each vehicle are summed for each vehicle group.

Starting with model year 2021, manufactures generate compliance credits that can be used to offset their deficit by selling zero emission vehicles (ZEV) and partial credits for selling near-zero emission vehicles (NZEV). ZEVs are vehicles with no tailpipe emissions. The ZEV credit generated for each vehicle sold is equal to the value of the appropriate weight class modifier in Table 2. NZEVs are defined as plug-in hybrid electric vehicles with a minimum all-electric range and these vehicles can generate credits until the end of the 2035 model year. The NZEV credit generated for each vehicle sold is calculated as the product of the appropriate weight class modifier in Table 2 and the NZEV factor value [0.01 × all-electric range (AER)]. The NZEV factor value is capped at 0.75 which is obtained for a vehicle with an AER of 75 miles (120 km). To qualify for NZEV credits, a minimum AER shown in Table 3 is required. ZEV and NZEV credits can be banked, traded, sold or otherwise transferred between manufacturers. NZEV credits must be accounted for separately from ZEV credits. Class 7-8 tractor group credits must be accounted for separately from other credits.

Compliance is achieved when the manufacturer’s Class 7-8 tractor credits offset their Class 7-8 tractor deficits and when the manufacturer's total credits offset their total deficits. Except for manufacturers with low tractor volumes (25 or fewer Class 7-8 tractor deficits per year), annual deficits accrued in the Class 7-8 tractor group can only be met with Class 7-8 tractor credits. Credits must be used in the following order:

1. Class 7-8 tractor group NZEV credits to meet up to 50% of Class 7-8 tractor group deficits;
2. Class 2b-3 group and Class 4-8 group NZEV credits to meet up to 50% of Class 2b-3 group and Class 4-8 group deficits;
3. Class 7-8 tractor group NZEV credits to meet Class 2b-3 group and Class 4-8 group deficits;
4. Class 7-8 tractor group ZEV credits to meet Class 7-8 tractor group deficits;
5. Class 2b-3 group and Class 4-8 group ZEV credits to meet Class 2b-3 and Class 4-8 group deficits; and
6. Class 7-8 tractor group ZEV credits to meet Class 2b-3 group and Class 4-8 group deficits.

Manufacturers with annual state sales less than 500 units are exempt from the ZEV mandate. At the end of 2020, the companies above the sales threshold were Daimler (Freightliner, Thomas Built Buses, Western Star), Paccar (Kenworth, Peterbilt), Navistar (International, IC Bus), Ford, GM (Chevrolet, GMC), Fiat Chrysler (Dodge), Nissan, Isuzu, Toyota (Hino), and Volvo Group.

Large Entity and Fleet Reporting Requirement

The purpose of this reporting is to collect information about how vehicles are being operated by individual fleets and entities. While CARB staff has all available information about general vehicle usage patterns for different body types, these sources are primarily statewide averages and do not have sufficient details about individual fleet operations. More detailed information is necessary to determine where zero-emission vehicles are suitable, what the barriers are and what vehicle characteristics are necessary to meet different fleet needs. This information will support future measures to reduce emissions of oxides of nitrogen, fine particulate matter, other criteria pollutants, toxic air contaminants, and greenhouse gases from vehicles.

Large entities (fleet owners, businesses, government agencies, municipalities, brokers, etc.) will report information about their vehicles over 8,500 lbs. GVWR if in 2019 they operated a facility in California and meet any of the following criteria:

• Had gross annual revenues greater than $50 million in the United States for the 2019 tax year and had one or more vehicles under common ownership or control that were operated in California in 2019; or
• Any fleet owner in the 2019 calendar year that had 50 or more vehicles under common ownership or control; or
• Any broker or entity that dispatched 50 or more vehicles into or throughout California, in the 2019 calendar year; or
• Any California government agency including all state and local municipalities that had one or more vehicles that were operated in California in 2019; or
• Any federal government agency that had one or more vehicles that were operated in California in 2019.

Advanced Clean Fleet Regulation

The goal of the ACF regulation is to accelerate the number of medium and heavy-duty zero-emission vehicle (ZEV) purchases to achieve a ZEV truck and bus fleet in California by 2045 “everywhere feasible”. While the Advanced Clean Truck (ACT) regulation imposes a ZEV sales percentage schedule on truck manufacturers, the ACF regulation is designed to ensure that the ZEV trucks mandated under the ACT rule are actually purchased by California fleets.

The ACF regulation includes four key components:

1. 100 Percent ZEV Requirement—Starting from 2036, all Class 2b-8 vehicles sold in California must be ZEVs (except for authorized emergency vehicles) [5815].
2. Drayage Trucks—From 2024, all drayage trucks registering in the CARB Online System must be ZEVs and all legacy drayage trucks must visit a California Seaport or intermodal railyard once each calendar year. From 2025, any legacy drayage truck registered in the CARB Online System must not exceed its minimum useful life threshold. From 2035, all drayage trucks in the CARB Online System must be ZEVs [5814].
3. High Priority Fleets—From 2024, all trucks added to the California fleet must be ZEVs. From 2025, internal combustion engine (ICE) vehicles must be removed from the fleet once they exceed a useful life period of 18 years (18 years/800,000 for tractors). Affected ‘high priority’ fleets include fleets with $50 million or more of annual revenue; fleets of 50 or more trucks; and federal government agency fleets [5813].
4. State and Local Government Fleets—In 2024-2026, 50% of purchases must be ZEV or NZEV (i.e., hybrids with a minimum all-electric range). Starting from 2027, all purchases must be ZEV or NZEV [5812].

A ZEV Milestone Phase-In schedule is available to High Priority and to State and Local Government fleets as an alternative compliance option. Under this approach, fleets must meet ZEV Milestones as a percentage of total fleet. The program includes flexibilities to add new ICE vehicles that are California certified to the fleet, and to add used ICE vehicles with 2010 or newer model year.

The regulation includes a large number of exemptions and extensions that account for such unknowns as a lack of availability of suitable ZEV vehicles or inadequate electric vehicle charging and/or H₂ fueling infrastructure, Exempted vehicles include: school buses, military tactical vehicles, vehicles awaiting sale, emergency vehicles, historical vehicles, dedicated snow removal vehicles, two-engine vehicles, heavy cranes, transit vehicles subject to the Innovative Clean Transit regulation, and vehicles that are subject to the Zero-Emission Airport Shuttle Regulation. Exemptions and extensions also exist for backup vehicles, ZEV infrastructure delays and that consider a vehicle application’s daily usage requirements and/or needed configuration.