The California Air Resources Board unanimously adopted the Advanced Clean Trucks rule, which is designed to accelerate the adoption of zero-emission medium and heavy duty vehicles (“ZEV”).  By 2045, 100% of new trucks sold in the state will be ZEVs, consistent with the state’s broader goal of becoming carbon neutral by that year.

The rule’s main component is a ZEV sales quota.  Manufacturers who certify Class 2b through 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:

The new rule is part of CARB’s broader strategy to target emissions from trucks.  According to CARB estimates, heavy duty diesel vehicles emit roughly one quarter of smog-forming nitrogen oxides (NOx) within the state, despite accounting for roughly only seven percent of vehicles registered.  Later this year, CARB is expected to enact a rule that would make NOx standards more stringent by a factor of ten, which would create an incentive for manufacturers to move towards ZEVs.  The agency also is also implementing programs to control emissions from vehicles already in use, such as continuing to strengthen the heavy duty onboard diagnostics program it pioneered, and developing a heavy duty inspection and maintenance program.

Upon adoption of the rule, CARB said it was zeroing-in on air pollution in the most disadvantaged and polluted communities adjacent to ports, railyards, distribution centers and freight corridors.  And the rule specifically cites as its purpose reduction of emissions of not only greenhouse gases, but criteria and toxic air pollutants as well.

The mandate operates through a deficit and credit accounting mechanism.  Deficits are calculated for each model year by applying the percentages in the table to a manufacturer’s annual sales volume, along with weight class modifiers (ranging from 0.8 for vehicles in the Class 2b-3 group, to 2.5 for vehicles in the Class 7-8 tractor group).  Credits are generated by sales of ZEVs and NZEV⁠s⁠—near zero emission vehicle⁠⁠s—which are plug-in hybrid electric vehicles with a minimum all-electric range.  For each model year, manufacturers must obtain credits in excess of their deficits for all truck categories and specifically for the Class 7-8 tractor category.  Credits may be traded and banked, but have a limited lifetime.  The rule also contains a fleet monitoring component, requiring large employers including retailers, manufacturers, brokers, and others to provide information about shipments, shuttle services, and fleet operations.

California must seek a waiver of preemption from U.S. EPA before it can enforce more stringent motor vehicle standards.  CARB’s resolution adopting the rule instructs the agency to submit the rule to EPA with a request for a waiver of preemption or confirmation that the rule is within the scope of an existing waiver.  The Clean Air Act requires EPA to grant a waiver unless it finds that California does not need the standards to meet compelling and extraordinary conditions, the state’s standards are not, in the aggregate, as protective as federal standards, or there is inadequate lead-time for the development and application of the requisite technology.  Although EPA has historically granted California’s waiver requests, EPA under the Trump Administration withdrew California’s waiver to enforce its Advanced Clean Car program for light-duty vehicles, which includes both the state’s more stringent greenhouse gas standards as well as its ZEV mandate.  Withdrawal of the waiver has been challenged in the D.C. Circuit Court of Appeals and is currently being litigated.

If California is granted a waiver by EPA for the new rule, it will likely have nationwide effects.  A number of states, particularly in the Northeast, have expressed support for the new rule, and may choose to adopt it into their own programs using section 177 of the Clean Air Act.  This could create a national market for ZEVs, and help facilitate implementation of the fueling infrastructure necessary to make the program a success.