There’s a name that’s whispered in hushed tones in the dispatch offices and boardrooms of transportation companies across the state. It’s a name that evokes equal parts reverence and fear — Advanced Clean Fleets. For the uninitiated, the Advanced Clean Fleets Rule, or ACF, is one of the most ambitious regulatory programs in the history of the California Air Resources Board (CARB). Its goal is to accelerate the adoption of zero-emission technology across much of California’s medium- and heavy-duty vehicle industry. Whereas previous programs have focused on California registered or domiciled vehicles specifically, ACF has set its sights on every vehicle over 8,500 lbs. that operates in California that falls under its jurisdiction.
Today, on April 28, 2023, CARB unanimously adopted ACF, following a three-year rule development process. The adopted rule will go into effect on November 1, 2023, with initial compliance and reporting dates phasing in for certain fleets on December 31, 2023.
Now, inventory and usage differ from sector to sector, and CARB recognized this fact when it first began drafting the rule back in 2020. To address this, the ACF rule splits California’s medium- and heavy-duty fleets into three categories: High Priority and Federal Fleets, Drayage Fleets, and State and Local Government Fleets. Each group has its own applicability criteria and compliance requirement. Some companies may be subject to more than one set of rules to comply with this regulation as they may operate both drayage and truckload divisions. This can present unique challenges in both procurement planning, compliance, and recordkeeping for the rule.
Easily the most complicated group in terms of compliance is the High Priority and Federal Fleets. This group incorporates most of the TL, LTL, last-mile delivery, and general logistics companies around California. If these companies own or operate at least 50 vehicles or reported $50 million or more in revenue to the IRS in the previous year and operate at least one vehicle in California, they are subject to the rule. Additionally, any federal government agency that operates in California is subject to the rule. That means agencies like the U.S. Postal Service and Forest Service would need to comply with ACF.
Compliance for this group comes in one of two ways: Starting in 2024, they can either limit their new vehicle purchases to zero-emission vehicles (battery-electric or hydrogen) while systematically removing older vehicles, or they can meet yearly conversion milestones established by CARB to transition their fleet(s) over to zero-emission. The choice of pathway is up to the individual fleet, but a choice must be made and steps must be taken to comply. Failure to do so will result in costly fines, registration holds, and other corrective action by CARB.
Drayage companies have a much more straightforward pathway to compliance. Those familiar with the industry know about the Drayage Truck Registry (DTR). If your vehicle isn’t registered in the DTR, it will not be able to access any port, railyard, or other regulated area. The DTR is the ticket to the show, and starting in 2024, zero-emission vehicles will become the cost of that ticket. All new Class 7-8 registrants to the DTR after January 1, 2024, must be zero-emission. No other new registrations will be allowed. Existing internal combustion engine (ICE) vehicles can remain active in the DTR for a few more years, but the cutoff is 2035. After that, no ICE vehicles will be permitted in the registry. Additionally, vehicles that are either too old or that have too many miles will be forced out of the registry. This will effectively cause a rolling disqualification from the DTR for many companies and owner operators who have likely been visiting these locations for years.
State and Local Government Fleets comprise the last group. These fleets include city, county, municipal, and state government vehicles over 8,500 lbs. These fleets have two options for compliance. The first is to meet a zero-emission purchase requirement that would see them adjusting their acquisitions so that 50% of all new vehicles from 2024 to 2026 were zero-emission, rising to 100% by 2027. There is no fleet composition requirement for this pathway. It is purely a purchase requirement. Alternatively, they can opt for the same milestone approach afforded to High Priority and Federal Fleets, which would require them to convert their fleet to zero-emission over a period of years.
Ultimately, the complex nature of this regulation will require multiple departments within an organization to coordinate to meet the compliance requirements. Procurement, maintenance, legal, operations, safety, and government affairs, to name a few, need to understand the rule and agree on a plan to comply or the entire process is doomed to fail. Such a failure can and will be costly, both in terms of actual monetary fines and in lost business, as the rule requires fleets to confirm every other fleet with which they do business is compliant with the rule.
If your fleet is noncompliant, other fleets will not work with you. If you work with noncompliant fleets, you will face fines and other corrective action. Neither is an attractive option.
There are several ways to approach compliance, and compliance can and should be tactical to ensure money, time, and effort aren’t wasted in the process. Time is probably the most important factor though, because there isn’t much left before implementation of this rule. CARB insists on good faith efforts to comply with its regulations. Waiting until the last minute to begin discussions internally with stakeholders and externally with OEMs, vendors, and utilities does not show a good faith effort.
An experienced partner can help you plan this transition and find ways to pay for some or even most of it. But the process needs to start today. Fleet owners and operators can learn about many of the finer details of this new regulation, as well as the nuances to consider when deciding on a compliance pathway at the Regulation & Funding Bootcamp on Monday, May 1, at ACT Expo in Anaheim, California. There, you’ll hear industry experts discuss and debate the impact of the rule and what successes and pitfalls they have seen. Also, the Expo Hall, taking place May 2-4, will showcase the vehicles, infrastructure, and technology necessary to meet the demands of ACF and every other regulation in California and beyond.
