California Air Resources Board

Please find herewith our organization's comment letter relating to EO N-27-25 and Advanced Clean Trucks. (Google Docs link https://docs.google.com/document/d/1CcFCRIpumkcmAehBviY46-PtcvX4I9GUvui…) This supplements and expands on my earlier, preliminary comment letter (citing my June 25 Capitol Weekly op ed) and my statement at the July 29 online dialog session, copied below.

Ken Johnson
Legislation and Public Policy Committee
Climate Reality Project: Silicon Valley Chapter

My comments relate to Advanced Clean Trucks.
ACT has been in the works for nearly a decade, and we don't want to have to start over with something entirely new. What we should do is make some targeted, incremental reforms to ACT to nullify federal jurisdiction over the program so that we and ACT coalition states can continue our truck electrification programs with or without federal participation.
Generally, federal preemption applies to vehicle emission standards; it does not apply to incentives. ACT currently operates as an incentive program from manufacturers' perspective because there is no requirement that manufacturers all comply with the standard. Manufacturers have the option of buying allowance credits to offset any compliance shortfall, and over-compliant manufacturers can sell credits at a profit. So the program basically operates as a financial incentive.
To provide additional compliance flexibility, the program can be reformed to regulate allowance prices, rather than regulating EV truck sales. A price-regulated program would operate as a kind of feebate that is adapted to work within the existing ACT regulatory framework. Manufacturers would still buy and sell allowances, but the allowance prices would be stable and predictable, and would be immune to market volatility.
Price stability would give investors confidence to make long-term commitments to truck electrification. California would probably exceed its ACT targets, considering that the market was already two years ahead of schedule in 2024. Other states could follow California's lead, at their own pace and on their own timeline because they wouldn't be constrained by Section 177, which is inapplicable to incentive programs.
So, in summary, Congress cannot stand in the way of states' truck electrification programs because we have options that don't require either Congressional authorization or an EPA waiver.