As Sean Cocca said at first of a recent webinar, the ACF rule is here.
After which he followed up with an obvious query: What comes next?
Cocca is the director of compliance on the advisory firm of Gladstein, Neandross & Associates, and it was his voice on a recent webinar hosted by ACT News that attempted to bring clarity to the complex regulations under California’s Advanced Clean Fleets (ACF) rule.
With the total California Air Resources Board (CARB) adopting the Advanced Clean Fleets rule in late April, it sets the stage for what is going to amount to an almost 20-year process that’s more likely to end one in all two ways.
The primary is that the sheer economic heft of California, in addition to the states that say they may follow its lead, will bring about such massive technological change that the fleets of most of America by 2042 will likely be powered by hydrogen, batteries, renewable diesel or … well, we don’t know yet what is perhaps lurking on the market as a part of a technological revolution.
Or we’ll find that the sweeping range of complaints that California is just too far ahead of the technology and infrastructure curve to deliver on such ambition was correct all along, and the result’s vehicle market chaos.
But while there is perhaps significant public hand-wringing, in management suites the main target needs to be on compliance with the rule. As Cocca said, if such work hasn’t begun already, it needs to begin.
The drayage portion of the ACF rule has been a transparent presence in that industry, as fleets lurch toward the rule’s ban on registering recent internal combustion engine (ICE) drayage vehicles in California after the beginning of 2024. Vehicles to be added to the state registry after Jan. 1 should be zero-emission vehicles (ZEVs). If there’s an ACF-created crisis, it’s more likely to change into evident first in drayage, possibly as early as next yr.
Beyond the Jan. 1 deadline, there are not any rules about when a drayage fleet must change into 100% ZEV. But there are rules that govern how long a vehicle can stay within the drayage registry; anything before a 2010 model yr is already barred. What the state has set because the “minimum useful life” of a truck is the sooner of 18 years or 800,000 miles or a minimum of 13 years if the truck has over 800,000 miles. After that, it must be retired. There are also recent requirements governing reporting of mileage totals to the state.
The plan is that the “no recent ICE” rule, combined with the constraints on what number of miles and years a truck can stay on the road, will regularly force ICE engines out of the drayage fleet to get replaced by ZEVs.
But unlike drayage, the targets in Class 8 trucking could appear more distant and are way more specific.
For the larger “high-priority” fleets as defined within the ACF rule, the large decision they face is whether or not to stop buying ICE vehicles completely next yr or begin the transition through use of the “Milestones” which were established for the transition.
The “no recent ICE” provision for high-priority fleets is comparable to the rule governing drayage. It takes effect Jan. 1. The Milestones are the alternatives for high-priority fleets and it takes a table to grasp how they work.
That is the table provided by CARB for the milestones.
![](https://www.freightwaves.com/wp-content/uploads/2023/05/31/milestones-chart.jpg)
“You’ve got to be a mathematician to work out where you fall with the odds and the several groups of trucks,” Glen Kedzie, a principal at E&E Strategies, told FreightWaves. Kedzie is a former official with the American Trucking Associations who has his own consulting company and clean fleet rules together with government relations are an area of specialty.
Despite that, “I’d guess that fleets would go together with the Milestone schedule,” Kedzie said. “I believe there’s more flexibility involved. You gain somewhat more time.”
Paul Arneja, CARB’s lead staff on the ACF, said in an interview that he also believes the Milestones pathway is most definitely to be chosen by high-priority fleets to comply.
“There are two options available for high-priority fleets, but each of them will eventually reach the identical place,” Arneja said. “However the path to get there will likely be different.” Echoing Kedzie, Arneja said the Milestones pathway “has more flexibility and a staggered timeline for the longer range and more specialized vehicles. So we do think that will likely be the popular option for many fleets.”
The pliability is available in the undeniable fact that if a fleet chooses to go the Milestones route, it might probably proceed so as to add ICE vehicles, so long as the general percentage of ZEVs within the fleet hits the Milestones targets.
Arneja added that the ACF has a reporting requirement that may kick in next February. At the moment, he said, fleets might want to report back to the state whether they’ll select the Milestones route or just stop buying ZEVs and ride out the 18-year/800,000-mile requirement.
On the recent webinar, Cocca made several points in regards to the Milestones and the high-priority fleet rules.
- The usual for whether an organization falls under the ACF rule is that if it had $50 million or more in revenue within the prior yr or operates 50 vehicles or more, with at the least one in California. It’s one or the opposite, Cocca said; a fleet with 75 vehicles and $20 million in gross revenue still falls under ACF.
- What Cocca called “common ownership and control” signifies that all trucks under that common ownership are counted in determining whether a fleet falls under the rule, even when it’s doing business under different names.
- One drawback to the Milestones route, as explained by Cocca, is that there are restrictions in place under California law that limit the state’s ability to force retirement of an older vehicle that hasn’t hit the usual 18 years or 800,000 miles defined as useful life. The Milestones pathway eliminates that protection. “By waiving that right, you’re allowing CARB to inform you that you might have to retire one in all your vehicles before its useful life,” he said. That’s unlikely to have any short-term impact on the road to full ZEVs, but as the top of the transition nears, “you is perhaps forced to retire a vehicle that has not yet reached its minimum useful life.”
- The necessities under Milestones are across all of the subcategories inside each group. For instance, under Milestone group 1, which has a ten% ZEV requirement by 2025, the components include five varieties of business vehicles: box trucks, vans, buses with two axles, yard tractors and light-duty package delivery vehicles. Cocca said the ten% can be applied to your entire fleet. The requirement shouldn’t be that a fleet has 10% ZEVs in all those categories.
The Advanced Clean Fleet rule follows the state’s Advanced Clean Trucks rule, which was approved in 2020. It deals specifically with the varieties of vehicles that might be sold into the state. As Kedzie said, the Advanced Clean Trucks rule without the ACF could spell failure.
“This offers a guaranteed audience to sell to,” he said. The Advanced Clean Trucks rule standing alone would have meant, in keeping with Kedzie, that “there was no other hook to require anybody to buy. The ACT rule provides an audience.”
The ultimate ACF rule appears to stray into territory staked out by the Advanced Clean Trucks Rule.
The initial ACF proposal had a rule that said all manufacturers that fall under the rule, which is defined as an OEM that “certifies on-road vehicles over 8,500 kilos,” is required to deliver only ZEVs to California by 2036. That rule originally had been 2040.
That has led to some confusion within the media, which has declared that the state has a goal of all ZEVs by 2036. For sleeper cab tractors, the Milestone that might bring an end to ICE vehicles is that 100% of all fleets are required to be ZEV by 2042. In contrast, Milestone Group 1, which incorporates box trucks and vans, is a 100% ZEV requirement by 2035.
That could be a requirement that might be seen as a mandate on manufacturers, which is speculated to be the job of the ACT, not the ACF, but Arneja didn’t see it that way: “We’re trying to simply make sure that that we’re aligning what the manufacturers should be selling and what the fleets should be purchasing.”
Where this is especially significant is for those fleets under 50 vehicles and $50 million in revenue. A small fleet with only a handful of vehicles could also be exempt from the ACF now, but by 2036, if there are not any recent ICE vehicles being delivered into the state, these fleets will still be facing the undeniable fact that their ICE vehicles will reach the useful life threshold and there’ll not be recent ICE vehicles to exchange those that should be retired. Eventually, there’s a type of “extinction” of ICE vehicles even when the smaller fleets aren’t under any specific mandate.
But that’s greater than a decade away. Within the shorter term, Kedzie said, “Should you’re a small trucking company, you ought to do your due diligence on what happens when you go to 50 trucks, if you might have 30 now.” Because if that 50-truck number is breached, “you’re sucked into the rule,” he said. Getting larger to take care of mandates is a well-trod business strategy nevertheless it may go the other in California trucking.
Arneja also noted that California will begin work soon on what he called the “zero-emission truck measure.” “That’s ways to affect the remainder of the fleet,” Arneja said. That plan, which Arneja said doesn’t exist at present, can be sent to CARB in 2028 with implementation in 2030. It will herald all fleets, not only ones which can be defined as high priority under ACF.
The ACF also has a rule governing public fleets. It’s less complex since it doesn’t have the proportion breakdowns present in the Milestones rule. As a substitute, it requires an aggressive standard of buying a percentage of ZEVs starting in 2024, becoming 100% only in 2027. But there are not any requirements on eliminating existing vehicles. The belief is that the passage of time will retire those fleets and what will likely be left are ZEVs.
There are exemptions within the ACF, and within the road toward the ultimate rule, they were liberalized. Order a ZEV however the manufacturer can’t deliver it in time? There’s an exemption for that. Planning on running a part of your fleet on battery vehicle technology however the utility can’t hook up the charging infrastructure in time? You’ll be able to get some relief, in some cases as much as a yr. ZEVs available but not of the kind to fit your needs? That falls under the “every day usage exemption.”
But as Cocca said on the webinar, every exemption has a novel set of necessities that should be met. Documentation requirements are steep: “The data required could be very detailed and a few of it is kind of extensive,” he said.
Amongst Cocca’s other admonitions to the listeners on his webinar were that if a fleet is looking for an exemption, it must be speaking now to its OEM partners about vehicle availability.
“It is advisable know what the provision is,” Cocca said. “Should you’re going to use for a few of the exemptions, there are several of them that require you to have communications together with your OEMs to point out that you simply’ve done your due diligence and also you made faith effort to comply with the rule.”
Even when a fleet isn’t going for an exemption, the essential act of acquiring the vehicles while staying in keeping with the ACF is complex, Cocca said.
“There’s numerous coordination that’s going to be required between groups like operations, finance and vehicle procurement,” he said, adding that the necessity for coordination extends all the way in which up into the C-suite, and “that coordination needs to begin happening now.”
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