All in the transportation industry have been following the California Air Resources Board (CARB)’s progress in rolling out new regulations, which aim to expand public health and environmental benefits by accelerating the use of zero-emissions technology on trucks. Recognized as some of the strictest in the world, these regulations will have a significant impact on the industry as transportation providers that operate trucks in California revamp fleets to ensure compliance starting in 2024. Covenant is among those impacted, as nearly 35 percent of its trucking fleet (across the expedited and dedicated groups) operates in California, as well as in other states that are voluntarily adopting CARB regulations.
“Covenant wants its customers to be aware that we are actively monitoring these developments and working with CARB and the EPA to not only ensure our trucks meet requirements,but also that our customers experience no gaps in the transportation services they receive from us,” explained Covenant’s Dan Porterfield, senior vice president, maintenance and equipment sales.
CARB Regulations Background
Before going on, itis important to understand the history of CARB regulations. A quick summary of what has rolled out to date is below.
· Advanced Clean Trucks Regulation: Adopted in 2019, these regulations apply to manufacturers of medium- and heavy-duty trucks. The regulation requires that manufacturers sell a certain percentage of zero-emission trucks starting in 2024. The percentage of zero-emission vehicles(ZEVs) that must be sold will gradually increase over time, until all new trucks sold by these manufacturers are zero-emission by 2045.
· CARB Omnibus Regulation: Adopted in 2021, these regulations apply to all heavy-duty trucks operating in California,regardless of manufacturer or fleet size. The regulations set strict emissions standards for nitrogen oxides (NOx) and particulate matter (PM). They also require manufacturers to provide extended emissions warranties for their products.
· Advanced Clean Fleets Regulation: Adopted in 2022,these regulations apply to fleets of medium- and heavy-duty vehicles operating in California. The regulation requires these fleet owners to purchase a certain percentage of ZEVs starting in 2024. The percentage of ZEVs that must be purchased will gradually increase over time, until all new vehicles purchased by these fleets are zero-emission by 2045.
In early July, CARB announced a Clean Truck Partnership with the nation’s leading truck manufacturers and the Truck and Engine Manufacturers Association. A press release stated that the agreement will “advance the development of ZEVs for the commercial trucking industry, which includes flexibility for manufacturers to meet emissions requirements while still reaching the state’s climate and emission reduction goals.”
In the simplest terms, the agreement states that manufacturers will meet the new standards and CARB will provide manufacturers with reasonable lead time to doso – and before imposing new regulations. An article on truckinginfo.com added, “Other states could be affected by this agreement, because some states adopt California’s air pollution rules, which go beyond federal EPA standards. And it could mean even more states adopt California’s same standards.”
While these regulations are a good thing for air quality, it is important to point out that there is a higher cost associated with purchasing ZEVs versus diesel trucks. Additionally, smaller fleet owners may find the new regulations too burdensome and exit the business, which may cause temporary local capacity shortages.
“Cost will be a factor for all fleet operators in California – that is expected and something we’re preparing for,” explained Porterfield. “For smaller transportation providers, they may sell their trucks to larger companies like ours to avoid the regulatory hurdles. We’re working closely with regulators and the EPA to communicate these concerns and find solutions wherever possible.”
Operators must now declare which path they’re going to take – do they play by the rules and continue to operate in California or change their business model and operate elsewhere? Do smaller fleets sell their assets before 2024 to avoid compliance requirements? How can transportation providers control costs as the cost of their critical assets rise?
“In Covenant’s case, our expedited and dedicated fleets will continue servicing California. We have a plan in place to ensure business continuity through these regulatory changes,” said Porterfield. “As for cost changes, we’re working closely with each of our customers to provide transparency and options that will help both parties be successful now and in the future.”
To learn more about the CARB’s truck regulations, click here.