The California Air Resources Board (CARB) recently heard a proposed rule that will require a steep ramp up in creation and deployment of zero-emission medium- and heavy-duty trucks, despite that infrastructure and incentives to keep costs down are not yet in place. This rule also included a mandatory data reporting regulation that will be used to support a purchase requirement imposed on California businesses. CARB’s draft Advanced Clean Trucks rule proposes to require at least 50% of Class 4-8 vehicles (covering heavy duty vehicles with gross vehicle weight ratings of 14,001 lbs or higher), and 15% of Class 2B-3 (light duty trucks with GVWR of 8,501-14,000) and Class 7-8 tractors be zero-emission by 2030. CARB is also proposing a second look in 2025 to set goals for 100% electric vehicle adoption. This is an incredibly broad range of vehicles, including pickup trucks used by farmers and construction workers, tour buses used by California’s entertainment industry, and delivery trucks that keep California’s economy on the move.
According to CARB Chair Mary Nichols, CARB introduced this rule because “the world is in need of a major technology update.” Originally conceived as a small 2.5% sale requirement for limited vehicle classes, the draft rule has ballooned into an incredibly ambitious plan to “transform the transportation industry,” with environmental groups putting the pressure on CARB to make the rule even more stringent.
This regulation is one part of a comprehensive strategy by CARB to reduce transportation emissions by first accelerating the market for battery electric vehicles via mandate. While CARB suggests that costs could level out over the (very) long term, it also recognizes the very real fact that initial costs for businesses and communities to upgrade to zero-emission vehicles and install charging infrastructure will be very significant.
CalChamber stepped in after CARB proposed to expand the rule from regulating a few businesses at a small percentage to now imposing detailed reporting requirements on 11,000 businesses and 1,000 municipalities, regardless of whether or not they owned trucks. CARB is also working on a corresponding purchase requirement to be finalized in 2022, requiring purchases to start in 2024. This companion rule will, at minimum, mimic the manufacturing mandate percentages, and will require that California businesses purchase electric rather than fossil fuel vehicles, regardless of price, limiting both the initial and secondary market for sale of existing commercial trucks.
The first of two hearings on this proposal drew over 100 public comments and five hours of testimony. The inability of the board to reach consensus on a plan highlights the structural problems with mandating supply and demand irrespective of implementation costs. It also highlights the issues with a one-size-fits all approach, with many commentators concerned with the lack of flexibility for renewable or other lower emission petroleum vehicles, which also reduce air quality and carbon emissions and can be deployed faster than electric vehicles.
CalChamber and a coalition of over 50 organizations submitted written comments, had hours of conversations with staff on the issues with the rule, and discussed our concerns with CARB board members. While we do not oppose additional data to make sound decisions, we pushed for the rule to be narrowed to meet the specific data gaps that CARB is seeking to fill in light of the questionable authority of the ultimate goal of purchase mandates on indirect sources of emissions. These gaps have still not been specified with any detail, so additional work is still needed.
Ultimately, we achieved significant success on the reporting requirements, with CARB proposing to reduce the reporting requirement from a year to one week and provide clarity on many vague and ambiguous definitions. These changes will provide additional certainty to businesses and reduce the likelihood of enforcement actions for this data gathering exercise. CARB took no vote on the issue, instead telling staff to go back and reevaluate the data requests with an eye toward narrowing the scope.
With these changes, there is still concern that the manufacturing mandate will increase beyond what is currently proposed, targets which some board members already called “hugely ambitious” and based on a lot of “hopeful assumptions.” CalChamber will continue to engage with CARB on the Advanced Clean Truck rule to push for fuel neutrality, ensure technological feasibility to keep costs low, and to narrow the scope of the rule to ensure that agencies do not use mandatory data reporting requirements rather than voluntary conversations with the regulated community, which will ultimately bear the costs of this major overhaul in how goods and services will be delivered in the world’s fifth largest economy.