Will California’s New Zero-Emission Truck Rule Zero-Out Owner-Operator Opportunities?

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Last week the California Air Resource Board (“CARB”) adopted what it has heralded as a “first-in-the-world” rule requiring truck manufacturers to transition from diesel to electric zero-emission trucks starting in 2024. CARB anticipates that by 2030, nearly one in three new tractor-trailers in California will have zero emissions. This is likely the first of several steps California will take toward reaching its goal of phasing out all diesel trucks—both new and old—by 2045. California is next expected to propose regulations that would restrict the use of existing medium- and heavy-duty diesel trucks in California.

The Advanced Clear Trucks (“ACT”) Regulation (the full text of which can be read here) is designed to “accelerate a large-scale transition of zero-emission medium- and heavy-duty vehicles from Class 2b to Class 8.”[1] Under the regulation, 75% of a manufacturer’s Class 4–8 truck sales must qualify as zero-emission vehicles by 2035; zero-emission sales of Class 7–8 truck sales alone must achieve 40%. In addition to imposing a zero-emission requirement on truck manufacturers, the ACT Regulation also requires motor carriers with 50 or more vehicles—including owner-operators’ vehicles—and brokers that dispatch 50 or more vehicles into or throughout California (and that operated a facility in the state) to provide an extensive report on their operations. This report is to include whether the carrier or broker has adopted “transportation emissions reduction goals” and the extent to which carriers and brokers rely on owner-operators, regardless of where they are based, to transport freight into and through California.

The purpose of the reporting requirement is to aid CARB in its consideration of two forthcoming regulations. The first regulation would require large carriers to start transitioning to use of zero-emission medium- and heavy-duty trucks, including those owned by owner-operators’ operating under the carrier’s authority. The regulation will eventually force carriers to choose owner-operators based on the type of tractor they drive—owner-operators with older, diesel fuel tractors may find themselves ineligible for owner-operator opportunities. The second regulation would require existing diesel trucks to adopt “the most effective exhaust control technology during the transition to electric trucks.” Adopting that technology, which would only be a stop-gap measure for owner-operators with older, diesel trucks, may come with a hefty price tag. Both regulations are expected in the coming months with potentially serious consequences for owner-operators doing business in California.

For more information about the Advanced Clear Trucks Regulation and California’s pending efforts to phase out diesel trucks, please contact:

Gregory R. Reed         (202) 298-4767           grr@cullenlaw.com

Paul D. Cullen, Jr.      (202) 944-8600           pxc@cullenlaw.com

 

[1] Advanced Clear Trucks Fact Sheet, California Air Resources Board, https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet.

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