This is an extract from a recent policy brief “California’s Advanced Clean Fleets regulation” by The International Council on Clean Transportation (ICCT). It summarises the scope, timeline, projected benefits, and other key elements of the ACF rule if it were applied to all vehicles within its scope in the state.
On April 28, 2023, the California Air Resources Board (CARB) adopted the Advanced Clean Fleets (ACF) regulation. The first of its kind globally, the ACF requires medium and heavy-duty vehicle (MHDV) fleets to reduce emissions through requirements to phase-in zero-emission vehicles (ZEVs), starting with model year (MY) 2024. It also sets an end date for combustion MHDV sales in California; these will not be allowed starting with MY 2036. The ACF rule is part of a comprehensive strategy to reduce heavy-duty transportation greenhouse gas (GHG) emissions and provide cleaner air, especially in the communities most heavily impacted by air pollution. It complements the Advanced Clean Trucks (ACT) regulation adopted in 2020, which mandates increasing percentages of ZEV sales by manufacturers from MY 2024 onward.
Designed to prioritize fleets and vehicle types that are well-suited for zero-emission technologies, the ACF rule provides a structured timeline for owners of fleets operating in the state to plan and implement the zero-emission transition. On January 13, 2025, CARB withdrew its request for a waiver from the U.S. Environmental Protection Agency (EPA) that is needed to implement the stricter emission standards on all vehicles within its scope in the state. Since that time, CARB announced that it intends to implement the purchase requirements on state and local fleets, which it is able to do without a waiver. If the ACF were to be applied to all vehicles within its scope, CARB estimated that it would reduce 327 million tons of carbon dioxide equivalent GHG emissions and deliver $106.6 billion statewide net benefits and savings between 2024 and 2050.
Key elements
The ACF regulation applies to Class 2b-8 on-road MHDVs with a gross vehicle weight rating greater than 8,500 lb, light-duty package delivery vehicles such as those used by the U.S. Postal Service, and off-road yard tractors operating in California. Its requirements apply to the “California fleet,” which includes vehicles within its scope that operate in California during a calendar year, even if they only enter the state one time for one day (there is, however, a 5-day pass option for vehicles that only enter once in a year), regardless of their state of registration.
Drayage fleets: Class 7 and 8 drayage trucks transporting cargo to and from California’s intermodal seaports and railyards. Land ports of entry are not considered seaports or intermodal railyards.
High priority and federal fleets: Fleets belonging to private entities with $50 million or more in gross annual revenue that own, operate, or direct the operation of at least one vehicle in California; private entities that own, operate, or direct the operation of 50 or more vehicles, including those under their common ownership or control; and federal government agencies that own, operate, or direct the operation of at least one vehicle in California.
State and local government agency fleets: All state or local government agencies in California that own, lease, or operate one or more vehicles in California. A state or local government agency is a city, county, public utility, special district, local agency or district, and any department, division, public corporation, or public agency of the State of California.
In addition to requirements for fleets, the ACF rule requires that 100% of manufacturer sales of MHDVs in 2036 be zero-emission vehicles. While this sales requirement also requires a waiver to enforce, CARB, the Truck and Engine Manufacturers Association, and other major truck manufacturers representing over 90% of California’s truck market have signed a Clean Truck Partnership agreement whereby they commit to meeting this requirement regardless of waiver status.
Timeline
The different timelines and compliance options for each fleet type are detailed below.
Drayage fleets: As of January 1, 2024, only zero-emission drayage trucks can be newly registered in CARB’s Truck Regulation Upload, Compliance, and Reporting System (TRUCRS), where all trucks must be registered to conduct drayage activities in California. Internal combustion engine drayage trucks must have been registered in TRUCRS by December 31, 2023, and they can continue to operate until they reach their minimum useful life, defined as at least 13 years from the model year of the vehicle’s engine, and up to 18 years or 800,000 miles, whichever comes first. All registered drayage trucks entering seaports and intermodal railyards are required to be zero emission by 2035.
High priority and federal fleets: High priority and federal fleets regulated by the ACF can achieve compliance in one of two ways. The first is the Model Year Schedule. Under this, fleets can only add ZEVs or plug-in hybrid vehicles of MY 2035 or earlier that meet a minimum all-electric range requirement (known as near-ZEVs, or NZEVs) to their California fleet beginning in 2024. Additionally, as of January 1, 2025, internal combustion engine vehicles must be removed from the fleet at the end of their useful life, defined as at least 13 years from the model year of the vehicle’s engine, and up to 18 years or 800,000 miles, whichever comes first. Near-ZEVs or ZEVs can be added to the fleet through new vehicle purchases, by bringing in existing vehicles from out of state, or if vehicles are gifted. Starting with the MY 2036, NZEVs will no longer meet the requirements. Regulated high priority and federal fleets are required to report their fleet information by February 1, 2024, in TRUCRS to begin compliance, and annually thereafter until February 1, 2045.
State and local government fleets: There is no combustion engine vehicle retirement requirement for state and local government fleets. These fleets are required to ensure 50% of annual vehicle purchases are ZEVs beginning in 2024. Any ZEV can be counted toward the 50% requirement. For example, one ZEV pickup truck and one ZEV Class 8 truck are treated the same for compliance. Beginning in 2027, 100% of vehicle purchases are required to be ZEVs. Near-ZEVs of MY 2035 or earlier count the same as a ZEV. Small government fleets with 10 or fewer vehicles and those in designated counties with low population have no requirements until 2027, when they must comply with 100% ZEV purchases. Any early or excess ZEV purchases before 2027 count onefor-one toward a future combustion engine vehicle purchase. For example, if a fleet bought 10 ZEVs in 2023, they could buy 10 combustion engine vehicles in 2024 without buying any ZEVs.
Additional flexibilities, extensions, and exemptions
There are several compliance flexibilities. Near-ZEVs are eligible to meet the ZEV model year schedule requirement until MY 2035 and these always count as ZEVs. After the 2035 model year, NZEVs will no longer meet compliance requirements. Exemptions from the ACF are available for circumstances beyond the fleets’ control. When a fleet owner cannot comply because ZEV models in the same configuration as an eligible vehicle being replaced are not available for purchase, they get a ZEV Purchase Exemption and can purchase a new combustion engine vehicle with a California-certified engine. The fleet owner must report the vehicles bought under this exemption in TRUCRS when received. A list of vehicle configurations deemed not available to purchase as ZEVs or NZEVs has been created by CARB and will be updated; this allows fleets to use the ZEV Purchase Exemption without submitting an application. Exemptions are also available if a fleet owner cannot comply with the ACF because their demonstrated daily usage needs of a given vehicle configuration cannot be met by available ZEVs.
Other exemptions apply to specific vehicle categories. Transit buses, which are covered under the Innovative Clean Transit regulation, are exempt from ACF requirements, as are dedicated snow removal vehicles, authorized emergency vehicles, and others. Exemptions are also given to owner-designated backup vehicles, provided they are driven less than 1,000 miles a year and their odometer readings are reported in TRUCRS. Intermittent snow removal vehicles are exempt from requirements until 2030, and there are exemptions that allow for operation of vehicles that are supporting declared emergency events. Fleets with mutual aid agreements can apply for exemptions to purchase up to a quarter of their California fleet as combustion vehicles to respond to mutual aid events during declared emergencies. Exemptions are also granted for uncommon occurrences, such as when a vehicle is in an accident and becomes non-repairable.
Additionally, extensions are allowed for delays incurred during vehicle delivery and infrastructure deployment. In the former case, if a fleet owner ordered the ZEV 1 year ahead of the compliance date and the fleet did not receive the vehicle delivery by the compliance date, the extension allows the fleet to continue operating the vehicle scheduled to be replaced until the replacement ZEV is delivered. This applies to all fleets except those following the ZEV Purchase Schedule. Another extension applies when fleet owners face infrastructure construction or site electrification delays, such as when the electric utility cannot provide the requested power to the site. An extension is available if the refueling or charging infrastructure project is started 1 year ahead of the compliance date and is delayed. The maximum extension is 5 years, depending on specific circumstances
Projected impacts and benefits
Staff at CARB estimate that of the 1.8 million MHDVs operating daily in California, 532,000 will be subject to ACF fleet requirements. The regulation focuses on the truck types that pollute the most; 67% of all Class 7-8 tractors will be covered. The ACF regulation is expected to significantly increase the number of MHDV ZEVs on California roads, beyond the sales expected from the ACT regulation. The two regulations together are expected to result in about 510,000 zero-emission MHDVs in California in 2035, 1,350,000 in 2045, and 1,690,000 in 2050. The transportation sector accounts for 41% of total greenhouse gas (GHG) emissions in California. Medium- and heavy-duty vehicles contribute 25% of the transportation sector’s GHG emissions, despite being only 6% of the registered vehicles in the state.
California context
In 2021, California’s governor signed Executive Order N-79-20, which set forth a 100% zero-emission MHDV fleet target by 2045 wherever feasible. The order specifies:
» 100% zero-emission drayage trucks, last mile delivery and government fleets by 2035
» 100% zero-emission refuse trucks, local buses, and utility fleets by 2040
» 100% zero-emission truck and bus stock by 2045
Promoting the development and use of zero-emission trucks will contribute to the goals set by the Governor’s Executive Order N-79-20 and the Sustainable Freight Action Plan. The promotion of zero-emission trucks will also help achieve emission reductions as outlined in the State Implementation Plan, the Clean Energy and Pollution Reduction Act of 2015, the California Global Warming Solutions Act of 2006, and the California Climate Crisis Act of 2022. The ACF was proposed on August 30, 2022. Prior to that, the ACT was approved by CARB in 2020 and is the world’s first ZEV sales requirement for heavy-duty trucks. Together, policies such as the ACF and the ACT stimulate both supply and demand for zero emission MHDVs in a complementary manner. Table 4 compares key aspects of them.
California has several incentives to support fleets in their transition to ZEVs. These incentives include funding from CARB, the California Energy Commission, and the California Public Utilities Commission. The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (HVIP) offered by CARB provides point-of-sale rebates to cover most of the incremental cost difference between diesel vehicles and ZEVs. This incentive is for all MHDVs from Class 2b through Class 8. For smaller fleets that want to transition to ZEVs earlier, the HVIP program has $35 million allocated under the Innovative Small e-Fleet Pilot Project. In addition, the Truck Loan Assistance Program helps small-business fleet owners secure financing to upgrade their fleets with new trucks. The revised Low Carbon Fuel Standard (LCFS) in California can provide more incentives to MHDV infrastructure investments. A recently adopted amendment to the LCFS expanded infrastructure crediting to both public and private MHDV charging and refueling infrastructure. Owners and operators of MHDV charging and refueling infrastructure earn LCFS credits based on the capacity of the infrastructure minus the quantity of dispensed fuel.
Therefore, chargers with low utilization rates in early stages of MHDV adoption could still generate revenues. The Carl Moyer Memorial Air Quality Standards Attainment Program can also be used to fund the installation of charging stations and fueling infrastructure. The grant amount depends upon the project’s projected pollutant reductions and the type of infrastructure, with public school bus projects eligible for 100% of charging and refueling infrastructure costs. The California Public Utilities Commission has approved $738 million for MHDV charging under Senate Bill 350. The agency has also authorized investor-owned utilities to invest in utility-side infrastructure upgrades under Assembly Bill 841. The California Energy Commission has set aside $2.69 billion for light-duty and MHDV charging and refueling infrastructure and the agency announced the Energy Infrastructure Incentives for Zero Emission (EnergIIZE) Commercial Vehicles program in April 2021 to support infrastructure for MHDVs.
National and International context
The U.S. federal government provides financial incentives to support fleets transitioning to zero-emission MHDVs by subsidizing vehicle purchases and investments in related charging and refueling infrastructure through the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act of 2021. The Commercial Clean Vehicle Credit is a tax credit for businesses and tax-exempt organizations under Internal Revenue Code 45W. Under this scheme, clean vehicles (battery electric, plug-in hybrid electric, and fuel-cell electric) can qualify for a maximum tax credit of $7,500 for vehicles with gross vehicle weight rating less than 14,000 pounds and $40,000 for vehicles more than 14,000 pounds. The Charging and Fueling Infrastructure grant program provides funding for public charging infrastructure. It prioritizes funding in rural areas, low- and moderate-income neighborhoods, public roads, schools, parks and public parking facilities. Globally, 38 countries, including Australia, Canada, Germany, Israel, the Netherlands, New Zealand, Norway, Sweden, and the United States, signed the Zero-Emission Government Fleet Declaration in 2022. The Declaration sets an aspirational goal of 100% government-owned and operated zero-emission MHDV acquisitions before 2035, and more countries sign the Declaration every year. Binding purchase requirements implemented at the country level mostly apply to individual MHDV segments but not all MHDVs and fleet owners: for example, the Netherlands committed to procuring 100% zero-emission transit buses by 2025 and to achieving a 100% zero-emission fleet by 2030 through its Climate Agreement.
Access the brief here
