What you need to know: The California Air Resources Board approved the next round of funding for the Air Quality Improvement Program and allocated it to the state’s Clean Off-Road Equipment Voucher Incentive Project (CORE). CORE encourages California off-road equipment owners to purchase or lease commercial zero-emission off-road equipment. Off-road equipment continues to be a considerable source of emissions and an incentive funding category with high demand throughout the state.  
 

SACRAMENTO – The California Air Resources Board (CARB) has approved an incentive funding plan to support advanced technology and cleaner equipment in the state’s off-road sector.  The $70 million comes from the Air Quality Improvement Program (AQIP) (https://ww2.arb.ca.gov/our-work/programs/low-carbon-transportation-incentives-and-air-quality-improvement-program) and will be used to fund the state’s Clean Off-Road Equipment Voucher Incentive Project (CORE) (https://californiacore.org/).  

The plan was designed to ensure that funding delivers the greatest benefit, especially in areas most impacted by poor air quality. CARB allocated funding to CORE because it is one of the most cost-effective zero-emission programs and has strong stakeholder support. Demand in the program also continues to exceed available funding with the amount requested in the last funding cycle being nearly three times the amount available. In public workshops, stakeholders have expressed how important continued incentives are in the zero-emission off-road sector. 

“Off-road equipment remains a major source of harmful emissions in California and demand for incentives has consistently exceeded what's been available,” said CARB Chair Lauren Sanchez. “With other funding dedicated to clean cars and trucks, we’re focusing these funds where they can make the biggest difference — helping clean the air in communities where off-road equipment is most heavily used for agricultural, constriction and freight operations.”  

A zero-emission forklift on display, an example of equipment eligible for funding through the state’s Clean Off-Road Equipment program.

The $70 million total includes $35 million each from fiscal year 2025-2026 and 2026-2027 budgets. The $35 million from fiscal year 2025-2026 was approved in last year’s budget for AQIP and is ready to implement. The Legislature approved funding for fiscal year 2026-2027 as part of this week’s state budget agreement.  

Why it matters 

More than 300,000 off-road diesel vehicles operate in the state, representing about 16% of the total statewide emissions of nitrogen oxide (NOx). This constitutes the second largest mobile source of NOx in California, only exceeded by trucks on roads and highways.  

CORE is California’s only incentive project that exclusively funds vouchers for a diverse range of zero-emission off-road equipment types while making disadvantaged and low-income communities, public agencies, and small businesses a priority. Established in 2020, CORE helps make clean heavy-duty equipment financially possible across a range of industries while preventing some of California’s largest sources of mobile emissions. CORE funding supports zero-emission freight equipment, harbor craft, forklifts, agriculture and construction equipment, and other equipment types.   

Public feedback helped guide the proposed AQIP allocations that were presented at public workshop earlier this year for public input.  

Related efforts  

As part of this year’s budget, the legislature approved $455 million in new incentive funding to help strengthen California’s zero-emission vehicle (ZEV) market and support American auto innovation as companies face unpreceded uncertainty due to the federal government's actions.  

The funding includes $35 million dedicated to clean off-road equipment through the Air Quality Improvement Program, and: 

• $135.5 million for incentives for first-time ZEV buyers  

• $19.8 million for incentives for Californians with lower incomes through Clean Cars 4 All (https://ww2.arb.ca.gov/our-work/programs/clean-cars-4-all)   

• $135.5 million for California’s Clean Truck and Bus Voucher Incentive Project (HVIP) (https://californiahvip.org/) 

• $130 million to replace polluting heavy-duty engines through the Carl Moyer Program (https://ww2.arb.ca.gov/our-work/programs/carl-moyer-memorial-air-quality-standards-attainment-program) 

Last week California launched a new $1 billion rebate program (https://ww2.arb.ca.gov/news/california-launching-1-billion-rebate-program-electric-trucks) for electric trucks. Funded with revenue utilities generate from the state’s Low Carbon Fuel Standard (LCFS), the California Clean Fuels Reward program is expected to become the largest utility rebate program for electric trucks in the country, with $250 million available this year and over $1 billion in total rebate funding expected through 2030.  

Nearly $175 million in previously approved funding is also still available through HVIP. In addition to electric trucks, the program funds school buses, transit buses and shuttle buses, and hydrogen technology across vehicle types, with dedicated funding options tailored to the needs of small fleets and owner-operators.