The twin regulations that are expected to have a huge impact on truck purchases in California — and beyond — could have their first impact by the end of this year.
One rule, the Advanced Clean Truck (ACT) regulation, is in place. The second, the Advanced Clean Fleets rule, has not been officially introduced. But a draft of the rule has already received public comment before moving on to formal introduction and final approval.
As Matt Schrap, CEO of the Harbor Trucking Association, described it, the two rules work together. The ACT requires truck manufacturers in California to sell a certain proportion of zero-emission vehicles (ZEVs) among their total sales. The Clean Fleets rule is aimed more at buyers, requiring them to acquire a certain portion of ZEVs as they replace existing vehicles in their fleets.
Two provisions of the rules could start eating away at the trucking industry as early as next year.
The ACT regulations will impact purchase decisions for new trucks starting with the 2024 model year. A certain percentage of these trucks will need to meet ZEV definitions. The California definition of ZEVs is largely battery-powered vehicles, with a small opening for hydrogen fuel cells.
The most aggressive number for ZEV requirements under the ACT is for Class 4 through 8 trucks, which range from 0.14,000 to 33,000 pounds. This requirement is that 9% of this class be ZEVs for the 2024 model year and 75% for the 2035 model year.
But for class 7-8 tractors, it’s a 5% requirement in 2024 that will increase to 40% by the 2032 model year. It stays flat after that. There are also requirements for smaller Class 2B through Class 3 trucks.
“The deadlines are aggressive,” Brett Marston, a Wiley Rein lawyer who has focused much of his work on engine regulation, said of the rules.
In the meantime, if the Clean Fleets rule is officially proposed and adopted by the end of 2022 – it is not a certainty – it is perhaps the drayage requirements that have the most immediate impact on trucking.
Under the rule, the outline of which was first published in September, the California Air Resources Board (CARB) would require a phased introduction of ZEVs into the drayage industry beginning in November 2023. If a new truck from drayage is registered after this date, it must be a ZEV.
Existing internal combustion engine vehicles must be phased out of the fleet under two guidelines: they can operate for 13 years from the year of their vehicle (so a 2023 vehicle purchased in late 2022 or early 2023 would be licensed to run until 2035) or whichever comes first of 18 years or 800,000 miles from the time the original engine was certified. But even with that last rule, all drayage trucks must be a ZEV by 2035, even if the 18-year or 800,000-mile mark hasn’t been reached.
Patricio Portillo, transportation analyst in the climate and clean energy program at the Natural Resources Defense Council, said drayage requirements are one of the “four pillars” of the Clean Fleets rule.
Another “pillar,” High Priority and Federal Fleet Requirements, outlines the percentages of private fleets that must be ZEVs on a sliding scale by 2035 to 2042, by truck type. It applies to “all entities” that generate more than $50 million in total U.S. revenue, own or control more than 50 trucks, or a broker that “owns, operates, or ships more than 50 trucks.” , according to a summary of the rule. written by Leah Silverthorn, senior policy attorney at the California Chamber of Commerce. This last stipulation would subject brokerage firms to the rule.
Portillo said the other two pillars are a public fleet component rule and a rule requiring 100% ZEV sales for new medium and heavy vehicles from 2040.
As Silverthorn wrote last year, when the outline of the rule was first published by CARB, “very few exemptions [were] provided by the rule.
“Essentially, if a ZEV version of the body type of the vehicle you (intend) to purchase is offered for sale, the settlement applies,” she said. Exemptions include certain emergency vehicles.
The Harbor Trucking Association, which represents the drayage industry in the ports of Long Beach/Los Angeles, did not submit lengthy comment to CARB regarding its Clean Fleets rule and the drayage requirement specifically. Instead, last October he sent a letter offering support for the broader comments jointly submitted by the American Trucking Associations and the California Trucking Association.
But in an interview with FreightWaves, HTA CEO Schrap expressed particular concern about drayage requirements. A forced switch to 100% ZEV for new purchases would be in a market where only a handful of these types of vehicles are currently in service – Schrap put it at 29 in the Ports of Los Angeles/Long Beach – against a universe of approximately 20,000 drayage vehicles.
Schrap listed several headwinds the EV drayage mandate would face. They include a shortage of chips for building new vehicles, a lack of charging infrastructure, the likelihood that the process of building new vehicles will be slow, and the $400,000 initial cost of vehicles – in an area where many Drayage vehicles are used tractors reused in ports.
“It’s hard to believe they would be so cavalier, but it’s CARB here,” Schrap said.
He conceded a certain agreement with the supporters of the settlement: that a variety of incentives allow the acquisition of a ZEV drayage vehicle. But he presented the scenario of a “catastrophic failure” of an existing vehicle that leaves the driver with nothing. For example, a grant application he just completed for a clean vehicle won’t see a truck actually delivered until June or July. For a driver who has lost a vehicle but has to wait that long to buy a new truck, “So what? Schrap said.
The ATA/CTA’s formal comment on the proposed clean fleet rule is a long document, raising objections to several provisions. A notable point raised by both groups concerns the coverage of brokers under the proposal. Although brokers are noted as falling within the rule, the ATA/CTA letter stated that CARB staff had “indicated” that brokers “shipping loads on an ad hoc or time-limited basis” as well as load charts would not be subject to the rule.
“This is clearly a disastrous and highly subjective provision that would undermine CARB’s regulatory system by placing covered fleets at a huge competitive disadvantage to multi-billion dollar freight brokers and digital load boards” , reads the letter, signed by Chris Shimoda, senior vice president. President of Government Affairs at CTA, and Mike Tunnell, Director of Environmental Affairs and Research at ATA.
The first point raised by ATA/CTA in their letter is that the ZEV requirements for larger trucks are “premature”. Shimoda and Tunnell say in the letter that an exemption built into the proposed rule for trucks that travel a certain number of miles likely means most Class 7 and 8 tractors will qualify for the exemption, given the combination average daily kilometers traveled, hours- service rules and battery life. So many trucks will apply for the exemption, the CTA/ATA letter says, that CARB staff “would need to process approximately 51 exemptions per day over a 12-year phase-in.”
Other concerns raised by the two organizations in their letter include the lack of charging infrastructure (similar to the point raised by Schrap) and the lack of a consolidated compliance system for the alphabet soup of reporting requirements. Also at issue is that rental vehicles are subject to the same requirements as private fleets, even though the users of the rental fleet are “very transient and [serve] many small businesses that may not have access to charging infrastructure for the foreseeable future.
Although California may be seen as an outlier, the reality is that the regulations it adopts often become the standard that other states end up following. Attorney Martson said engine makers would like to avoid having a shared market where regulations are vastly different from those in other parts of the country.
“A split has emerged between California and the federal government, and OEMs find themselves caught in the middle,” Marston said. “California has a lot of power here as a huge economy.”
And it’s not the only one. Five states — Oregon, Washington, New York, New Jersey and Massachusetts — have approved California ACT rules for their states. That would represent about 22-23% of the country’s population in combination with California, which would give these rules greater weight.
That was brought home earlier in January when GM said it recognized California’s authority under the Clean Air Act to set its own vehicle emissions standards, a position not accorded to others. States. When he did, according to a article in the Detroit News, it joined several other companies, including Ford and BMW, on the list of companies that have recognized state clean-fleet rules whose approval will be a key development for the trucking industry to watch in 2022.
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