California Air Resources Board

Low Carbon Transportation Incentives (LCTI) and the Air Quality Improvement Program (AQIP) provide mobile source incentives to reduce greenhouse gas, criteria pollutant, and toxic air contaminant emissions through the deployment of advanced technology and clean transportation in the light-duty and heavy-duty sectors. LCTI and AQIP are just two of the incentive funding programs in CARB's larger portfolio of clean transportation investments. These are complemented by other CARB, State agency and local air district programs, as well as actions taken by local government entities. Each year, the legislature appropriates funding to CARB for these incentives to reduce emissions and support advanced technology demonstrations and deployments. The AQIP Guidelines and annual Funding Plans guide CARB's implementation of these incentives.

Program Background

The AQIP was established by the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 (AB 118, Statutes of 2007, Chapter 750). AQIP is a mobile source incentive program that focuses on reducing criteria pollutant and diesel particulate emissions with concurrent greenhouse gas (GHG) reductions. CARB investments started under AQIP provide the foundation for the Low Carbon Transportation Investments that typically now make up the vast majority of CARB’s Clean Transportation Incentives.

In 2013, the LCTI program was established as part of the California Climate Investments, a statewide program that puts billions of Cap-and-Invest (formerly known as Cap-and-Trade) dollars to work reducing greenhouse gas emissions, strengthening the economy and improving public health and the environment, particularly in disadvantaged communities. CARB’s LCTI program, supported by Cap-and-Invest auction proceeds, is designed to accelerate the transition to advanced technology low carbon freight and passenger transportation with a priority on providing health and economic benefits to California’s most disadvantaged communities.

AQIP and LCTI, known together as the Clean Transportation Incentives, are just one part of CARB’s larger portfolio of incentive programs that complement regulatory programs to reduce emissions and increase access to clean transportation. Each incentive program comes with its own statutory requirements, emission reduction goals, and eligible projects making the portfolio diverse and far-reaching. Together, these projects address multiple public health, air quality, climate change, and economic goals, including:

• Turning over the legacy fleet to achieve cost-effective, near-term emission reductions in support of State Implementation Plans, air toxics, and community air protection goals.
• Accelerating the introduction and deployment of zero-emission technologies to meet California’s longer-term air quality, carbon neutrality, and climate change goals.
• Improving access to and affordability of clean transportation and mobility options for low-income households and investing in the low-income and disadvantaged communities most impacted by pollution.
• Supporting the adoption of more sustainable transportation modes to reduce GHG emissions.
• Supporting the adoption of more sustainable transportation modes to reduce vehicle miles traveled (VMT) and GHG emissions to support sustainable communities.
• Expanding the supply chain for advanced technology components, the number of manufacturers choosing California as a home for manufacturing and leveraging private investment to support the commercial viability of advanced technology.
• Supporting economic growth and continuing the momentum California has built towards becoming a hub for the manufacture and deployment of clean technologies and associated high-quality jobs.

Progress, Outcomes and Results

LCTI and AQIP funding appropriated to CARB by the Legislature has been used to fund: zero-emission and plug-in hybrid passenger vehicles through traditional and innovative car ownership projects; clean mobility investments to increase access to alternative modes of transportation for priority populations; deployment incentives for clean trucks and buses utilizing zero-emission technologies; and advanced technology demonstration projects for freight trucks and equipment.

To date, 85 percent of CARB’s LCTI from the Greenhouse Gas Reduction Fund have supported projects benefiting priority populations*, exceeding the commitments made in past Funding Plans.

*California Climate Investments 2025 Annual Report, Table ES‑1, 2024 Cumulative Statistics