California Air Resource Board’s Advanced Clean Fleet Rule: A Path to Cleaner Transportation

The Advanced Clean Fleet (ACF) Rule, enacted by the California Air Resources Board (CARB), is an ambitious and significant step towards accelerating the adoption of zero-emission vehicles (ZEVs) in various fleets across the state. The ACF has set its sights on every vehicle over 8,500 pounds that operates in California falling under its jurisdiction. It requires a phased-in transition toward ZEVs, and it will go into effect on January 1, 2024.

Updated Guidance on the ACF Rule

CARB provided updated guidance regarding the ACF rule: CARB has decided to exercise its enforcement discretion and will not take enforcement action as to the drayage or high priority fleet reporting requirements or registration prohibitions until U.S. EPA grants a preemption waiver applicable to those regulatory provisions or determines a waiver is not necessary. High priority and federal fleets requirements begin January 1, 2024. 

• CARB will not take enforcement action as to the high priority fleet reporting requirements or registration prohibitions until U.S. EPA grants a preemption waiver or determines a waiver is not necessary. 
• Reporting is optional until the waiver is granted or determined to be unnecessary; however, fleets will need to report their fleet as it existed on January 1, 2024, as well as any removals or additions to the California fleet since January 1, 2024, once the waiver is granted or is determined to be unnecessary. 
• If fleets add internal combustion engine vehicles to their California fleet after December 31, 2023, those fleets should expect to receive the following notice from CARB: “Any combustion-powered vehicles added into service in California in high priority or federal fleets after December 31, 2023, may be restricted from operating once the U.S. Environmental Protection Agency grants California a waiver for the Regulation pursuant to section 209 of the federal Clean Air Act or determines no such waiver is necessary. Once the waiver is granted or determined to be unnecessary, fleets may need to remove any vehicle from the California fleet that was not eligible to be added to the California fleet after January 1, 2024, or the fleet must elect to comply with the Zero-Emission Vehicle (ZEV) Milestone Option instead of the Model Year Schedule.”

Which fleets does the Advanced Clean Fleet regulation affect?

1. Any entity that owns, operates, or directs 50 or more vehicles, with at least one vehicle in California, excluding light-duty package delivery vehicles. 
2. Any entity with more than $50 million total gross annual revenue that operates at least one vehicle in California. 
3. A fleet owner whose combined fleet under common ownership and control totals 50 or more vehicles with at least one vehicle in California. 
4. Federal government agencies that operate at least one vehicle in California.

Which Vehicles Are Affected?

The regulation affects medium-duty and heavy-duty on-road vehicles with a gross vehicle weight rating greater than 8,500 pounds. It also impacts off-road yard tractors, and light-duty mail and package delivery vehicles.

When does ACF got into effect?

The adopted rule will go into effect on November 1, 2023. Starting January 1, 2024, 50% of an entity’s total vehicle purchases for the California fleet in each calendar year must be ZEVs. Starting January 1, 2027, 100% of the total vehicle purchases for the California fleet in each calendar year must be ZEVs. Fleets can utilize the ZEV Milestone Option outlined in the next section as well.

How Do Fleets with Medium-Duty and Heavy-Duty Assets Comply?

There are two ways to be compliant with ACF.

The first option is a ‘Model Year Schedule Timeline’. Fleets can comply by replacing internal combustion engine (ICE) vehicles at the end of their useful life with ZEV vehicles. So, beginning January 1, 2024, when affected vehicles need to be replaced, they must be replaced with a ZEV. Furthermore, all ICE vehicles must be retired from service after 18 years or 800K miles, whichever comes first.

The second option is a ‘Zero-Emission Milestone Timeline’ which is governed by a percentage milestone according to preset vehicle groups. It allows fleets full flexibility to manage composition over the phase-in period if ZEV milestone targets are met. This option allows continued purchase of fossil-fuel vehicles as long as the fleet composition target is met before the year when all ZEVs are required. The following table outlines the groups and targets:

The Advanced Clean Fleets Rule: Exemptions and Flexibilities

After CARB adopted the ACF rule, the North American Fleet Association (NAFA) as well as a couple of other industry organizations lobbied for exceptions needed to allow fleets to realistically comply with the regulation. CARB listened and implemented several exemptions and flexibilities and they are as follows: 

ZEV Purchase Exemption – The ZEV Purchase Exemption allows fleet owners to postpone adding certain vehicles to their fleet if those vehicles are not yet available as ZEVs. The latest updates to this provision introduce two options for utilizing the exemption.

• Firstly, CARB now maintains a list of vehicles that can be purchased as internal combustion engine (ICE) vehicles if ZEVs are unavailable in a specific configuration. Fleet owners are not required to apply for an exemption for vehicles on this list; they report the purchase when the ICE vehicle is received.
• Secondly, fleet owners can apply for a fleet-specific exemption if the desired ZEV configuration does not meet the primary intended function required by the fleet. For example, if a fleet needs a truck up-fitted with a bucket truck body capable of reaching 100 ft., but ZEVs are only available with a 50 ft. reach, the fleet owner may apply for an exemption. CARB will verify that no manufacturers can produce and sell the required configuration, and the exemption will be issued within 45 days.

To ensure fleet owner protections, additional modifications have been made when assessing ZEV availability. A newly added requirement states that a ZEV must meet the Zero-Emission Powertrain certification requirements, cannot be a demonstration vehicle, and must be available for purchase within the next two model years. Furthermore, the exemption coverage is now expanded to apply to all vehicle weight classes, except drayage trucks, as multiple tractor models are already available.

Daily Usage Exemption – The Daily Usage Exemption allows fleet owners to apply for an exemption to purchase an ICE vehicle if ZEVs are available in each configuration but do not meet the fleet’s daily mileage and stationary operational use needs. The latest updates to this provision aim to provide more flexibility and streamlined processes.

Fleet owners are required to submit information to CARB regarding the daily mileage or usage of existing vehicles in their fleet. This data demonstrates that the available ZEVs cannot adequately meet the fleet’s requirements based on miles and hours of operation within a 30-day period in the previous year. Fleets with mutual aid agreements can also utilize data from the last five years to support their exemption request.

The provision has been expanded to allow fleet owners to use operational data for comparison with fleets operating ZEVs in similar applications. This comparative analysis strengthens the fleet’s case for the exemption. Additionally, the period for collecting vehicle data to support the exemption request has been shortened, facilitating a more efficient process.

The Infrastructure Delay Provision – This provision enables fleet owners to receive an extension if the installation of ZEV infrastructure at their site is delayed due to reasons beyond their control. CARB has expanded this provision to address construction delays and utility delays.
In the case of unexpected delays after construction has started, fleet owners now qualify for an extension of up to two years, as opposed to just one year. These extensions include delays associated with ZEV infrastructure equipment, such as chargers and hydrogen dispensing equipment.

Utility Exemption – Utility delays in site electrification can also support extensions. Fleet owners are eligible for an initial three-year extension, with an additional two-year extension based on the utility’s ability to provide sufficient power to the site and support a specific number of ZEVs each year.

Zero-Emission Vehicle Delivery Delay – The Zero-Emission Vehicle Delivery Delay provision acknowledges situations where fleet owners face delays in receiving a ZEV that has been ordered one year prior to the compliance date due to factors beyond their control. Fleet owners can claim an extension during annual reporting by providing proof of the ZEV purchase.

The provision has been modified to streamline delays and clarify requirements. The updated language specifies the unique types of documentation required for vehicle purchases and leases, which will be utilized for extension applications.

Moreover, a provision has been added to allow for the extension to be renewed if a manufacturer cancels a purchase agreement. In such cases, fleet owners can submit documentation of a new zero-emission vehicle purchase agreement within 365 days (for government fleet owners) or 180 calendar days (for other High Priority Fleets and drayage trucks) to renew the extension.

Mutual Aid Exemption – The Mutual Aid Exemption allows fleets with mutual aid agreements, such as public fleets and utilities, to purchase ICE vehicles for up to 25 percent of their fleet. CARB has introduced improvements to enhance access to this option.

The ZEV threshold required before claiming the exemption to purchase ICE vehicles has been reduced. Fleet owners are now eligible for the exemption if they exceed 25 percent ZEVs until 2032, 50 percent until 2035, and 75 percent thereafter. This reduction in the ZEV threshold provides fleet owners with more flexibility in their transition to zero-emission vehicles. The provision has also been expanded to allow for ICE vehicle purchases in all vehicle weight classes.

Taking the Advanced Clean Fleet Rule Seriously

Compliance is not optional. If your fleet is noncompliant, other fleets will not work with you. If you work with noncompliant fleets, you too will be penalized. Time is at a premium now. You should begin circulating the rule now internally and externally to educate stakeholders which shows a good faith effort. If you would like guidance and support in your efforts to understand, absorb and adopt ACF, we are here to help guide you. Please reach out to your Fleet Consulting Executive who will connect you with our subject matter experts.

Have Additional Questions about CARB’s Advanced Clean Fleet Rule?

If you would like guidance and support in your efforts to understand, absorb and adopt ACF, we are here to help guide you. Please reach out to your Fleet Consulting Executive who will connect you with our subject matter experts.