Advanced Clean Equipment - Financial and Regulatory Programs
Off-Road Equipment Electrification
List of Related Financial and Regulatory Programs
California Policy Drivers
The following policy drivers will facilitate the electrification in off-road sectors and provide fundamental justifications for the state’s electrification strategies and implementation plans.
Table 1. California Policy Drivers
Goals and Requirements
Senate Bill 1389 (2002)
SB 1389 requires the CEC to prepare the Integrated Energy Policy Report (IEPR) biennially. The report presents CEC’s integrated assessment results about the state’s energy issue and provides policy recommendations to conserve resources, facilitate a sustainable energy supply chain, and protect the environment.
Assembly Bill 32 (2006)
AB 32, or the Global Warming Solutions Act of 2006, requires California to reduce GHG emissions to 1990 levels by 2020. AB32 directs CARB to adopt regulations to achieve the maximum technologically feasible and cost-effective GHG emission reductions. The Low Carbon Fuel Standard (LCFS) program was one of CARB’s nine discrete early action measures to reduce California’s greenhouse gas (GHG) emissions that cause climate change.
Senate Bill 350 (2015)
The Clean Energy and Pollution Reduction Act (SB 350) requires the California Energy Commission (CEC) to establish annual targets statewide, including reduction of GHG emissions to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050.
Senate Bill 32 (2016)
SB 32 mandates the reduction of greenhouse gas (GHG) emissions to 40% below 1990 levels by 2030. CARB is responsible for ensuring that California meets this goal. This air quality agency publishes an Update to the Scoping Plan every five years, detailing how CARB plans to meet emission reduction targets.
Assembly Bill 617 (2017)
CARB’s Community Air Protection Program aims to reduce exposure in communities highly impacted by air pollution in response to AB 617. The state agencies and local air districts are collaborating on various efforts to implement innovative air quality improvement strategies and reduce health impacts.
Senate Bill 100 (2018)
SB 100 mandates the state to achieve 100% renewable and carbon-free electricity by 2045 and 60% renewable electricity by 2030.
Assembly Bill 3232 (2018)
AB 3232 requires the CEC to assess the potential to reduce the emissions of GHG emissions from residential and commercial buildings by at least 40 percent below 1990 levels by 2030.
Executive Order B-55-18 (2018)
EO B-55-18 sets a goal for the entire California economy to achieve carbon neutrality by 2045 and achieve and maintain net harmful emissions thereafter.
Executive Order N-79-20 (2020)
EO N-79-20 aims to achieve 100% zero-emission vehicles (ZEV) for passenger cars, light-duty trucks, and drayage vehicles by 2035 and medium and heavy-duty vehicles by 2045. More importantly, it directs CARB to develop and propose “strategies, in coordination with other State agencies, U.S. EPA and local air districts, to achieve 100 percent zero-emission from off-road vehicles and equipment operations in the State by 2035”.
Senate Bill 44 (2021)
SB 44 recognizes California’s continuous efforts needed to reduce on- and off-road sector emissions and requires CARB to update the Mobile Source Strategy (MSS) every five years. MSS will be translated into State Implementation Plans (SIP), demonstrating how the state will attain the standards by specified dates. It is also incorporated into Climate Change Scoping Plan and Community Emissions Reduction Plans (CERPs).
CARB and other clean air agencies have put tremendous efforts into reducing criteria pollutants and greenhouse gas emissions. Numerous air quality improvement strategies and regulations have affected the off-road equipment (ORE) fleet mix and will make the fuel transitions across all off-road sectors and horsepower ranges. An ORE electrification plan must consider the interactions with the existing and future regulations.
Table 2. California Air Quality Improvement Strategies, Programs, and Regulations
Regulations and Programs
Description (Goals and Requirements)
Heavy-Duty Three-Year Plan of Low Carbon Transportation Investments and Air Quality Improvement Program
This long-term investment plan is a funding roadmap for the heavy-duty vehicle and equipment sectors. It provides a total of $3.9 billion to multiple State agencies for the three fiscal years to accelerate ZEV sales and ZEV infrastructure network expansion. $2.3 billion is allocated to CARB, and it will support numerous air quality and climate goals and provide benefits to disadvantaged communities.
Low Carbon Fuel Standard (LCFS) and LCFS Electricity and Hydrogen Provisions
The LCFS Program is a critical component of CARB’s efforts to reduce life cycle GHG emissions and other smog-forming and toxic air pollutants. It aims to decrease the carbon intensity of California’s transportation fuel inventory and promote the use of renewable energy and low-carbon fuel types. The LCFS Electricity and Hydrogen Provisions grant incentives to entities using hydrogen or electricity as a transportation fuel. Using hydrogen to produce other transportation fuel is also eligible for LCFS credits.
2022 Scoping plan
California Global Warming Solutions Act, Assembly Bill 32 (AB 32), created a GHG emissions reduction program in 2006. Based on the identified advanced clean technologies available, this multi-year program offers a comprehensive climate change scoping plan targeting GHGs reduction by at least 40 percent below 1990 levels by 2030 and achieving carbon neutrality by 2045. CARB updates the plan every five years, and the 2022 Scoping Plan is the third version of the roadmap for the State of California’s efforts to reduce emissions and build resilient communities.
California Clean Off-Road Equipment Voucher Incentive Project - Construction (CORE-Con)
The Clean Off-Road Equipment Voucher Incentive Project (CORE) is a first-come, first-served voucher program for off-road equipment that began funding equipment in 2020. It is part of California Climate Investments, a statewide initiative allocating billions of Cap-and-Trade dollars to 1) reduce criteria pollutants and greenhouse gas emissions, 2) strengthen the economy, and 3) improve public health and the environment. CORE-Con has been built upon the CORE program and aims to promote the deployment of zero-emission technology in the off-road sector, including various construction, mining, and other equipment types.
CORE voucher amounts are tailored by the cost premium of new zero-emission alternatives over traditional equipment. Additional funding is available for charging infrastructure and equipment deployed in pollution-overburdened and low-income AB 1550 communities.
Funding Agricultural Replacement Measures for Emission Reductions (FARMER)
The Funding Agricultural Replacement Measures for Emission Reductions (FARMER) program aims to reduce agricultural sector emissions by providing grants, rebates, and other financial incentives for various agricultural equipment and has successfully funded the adoption of electric utility task vehicles (UTVs).
Carl Moyer Memorial Air Quality Standards Attainment Program
The Carl Moyer Memorial Air Quality Standards Attainment Program (Carl Moyer Program) has granted approximately $1 billion in monetary incentives to replace older polluting engines in California. The program aims to reduce emissions from heavy-duty on-road and off-road equipment that qualify for Moyer grants.
Thirty-five local air districts in California are currently participating. The program covers a variety of vehicle and equipment types, such as on-road trucks over 14,000 lbs. gross vehicle weight, construction, marine vessels, locomotives, stationary agricultural equipment, forklifts, light-duty vehicles, airport ground support equipment, lawn and garden equipment, and emergency vehicles.
Community Air Protection Incentives
As of May 2022, 964 million dollars of Community Air Protection Incentives have been spent on the California communities most heavily impacted by disproportionate levels of air pollution since 2017. AB 617 directs local air districts spend funds through the two existing mobile source incentive programs, The Carl Moyer Memorial Air Quality Standards Attainment Program and the Proposition 1B Goods Movement Emission Reduction Program. Additional guidelines are that at least 70 percent of the funds must be spent on projects within and benefiting disadvantaged communities, and at least 80 percent of funds must be spent on projects within and benefiting a combination of disadvantaged and low-income communities.