CARB amends ACT to provide more flexibility around credits

Tps Logo Online Headshot
Updated Nov 4, 2024
A truck and the state of California logo

The California Air Resources Board (CARB) recently amended its Advanced Clean Trucks (ACT) rule and its Zero-Emission Powertrain Certification test procedure to allow for more flexibility in getting new trucks on the road.

The ACT rule was one of three major regulations introduced by CARB in January that would serve as the framework for the state's transition to a future zero-emission transportation sector. Along with its low NOx Omnibus and (still on hold) Advanced Clean Fleets rule, ACT was written to force manufacturers to sell an increasing number of ZEVs into the marketplace beginning with model year (MY) 2024.

Under the original text of the rule, manufacturers were expected to begin selling ZEVs as a fraction of their Class 4-8 new truck deliveries this year. Manufacturers also were able to acquire credits for ZEVs sold for MY 2021 to 2023 that could be used to support sales once the regulation went into effect.

[RELATED: CARB policies don’t reflect reality, says Port of Oakland operator]

In developing its trio of regulations, CARB believed each would work in conjunction to drive steady adoption of ZEVs across the state's trucking fleet. And while acceptance of ZEVs in the state has outpaced CARB's initial projections, most purchases have been in the medium-duty sector.

The Class 8 sector has had an opposite experience.

Even with the ACF rule on hold, OEMs, dealers and carriers in the state have struggled to navigate the Omnibus and ACT rules properly to meet industry demand. In August, TPS reported how several dealers have been shut out of the Class 8 market this year, unable to sell internal combustion engines (ICE) due to lagging ZEV deliveries and a lack of available credits from their OEM partners.

The executive officer of the ACT program pushed back against any availability concerns in September, writing in a letter to CARB Chair Lianne Randolph that "there is a considerable excess of zero-emission vehicle (ZEV) credits available, as evidenced by the fact that manufacturers have met their ACT compliance obligations one year ahead of schedule and have generated more than twice the number of credits required to meet their 2024 model year ACT obligations."

Partner Insights
Information to advance your business from industry suppliers

Nevertheless, the letter also noted the importance of considering amendments to ease compliance and future execution of the rule, and those amendments were approved via a vote on Friday. 

[RELATED: Analyzing the details of California early ZEV sales success]

The biggest change comes in the delivery of credits during the sale of a ZEV. Under the amended rule, OEMs will now receive a credit for a ZEV sale once a unit is delivered to a dealer or truck upfitter. This is a change from the original rule, which did not provide the credit until the unit arrived at the "ultimate purchaser."

The amendments also will now give secondary vehicle manufacturers the option to trade, sell or transfer credits with manufacturers. "Being able to participate in the credit banking and trading system the ACT provides for will give secondary manufacturers greater ability to procure internal combustion engine vehicles where a manufacturer is restricting sales and choosing not to purchase credit," CARB wrote.

The changes also will now provide OEMs a three-year makeup window if they fall short of their ZEV sales requirements in a given year, and will enable near zero-emission vehicles (NZEV) to count as a fraction toward a year's deficit. 

In announcing the amendments last week, CARB wrote "While the proposed amendments are relatively minor, the changes are expected to provide manufacturers with more flexibility as the market adjusts and potentially mitigate pressure on truck purchasers in future years."

It remains to be seen how the amendments will impact decisions being made by the nine other states that have pledged to adopt CARB's regulations. 

Connecticut scrapped a plan to phase out ICE vehicles late last year, while Oregon announced earlier this month it is delaying emissions standards. Other states, including New Jersey, are considering the same. 

A full list of the amendments can be found on the CARB website.

Hydrogen Fuel Cell & BEV Survey
The following survey was sent as a link in an email cover message in February 2023 to the newsletter lists for Overdrive and CCJ. After approximately two weeks, a total of 176 owner-operators under their own authority, 113 owner-operators leased or assigned to a carrier and 82 fleet executives and 36 fleet employees from fleets with 10 or more power units had completed and submitted the questionnaire for a total of 407 qualified responses. Cross-tabulations based on respondent type are provided for each question when applicable.
View Infogram