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California Vehicle Electrification

February 28, 2025

Updated Notice: On February 18th, the Office of Administrative Law (OAL) disapproved the amendments to the California Air Resources Board (CARB) Low Carbon Fuel Standard (LCFS) Regulation. On February 26th, CARB provided guidance that they will address the issues raised by OAL and resubmit the amended regulation within 120 days. The summary of the revisions below will likely remain in the amended regulation but will not go into effect until approved by OAL.

In 2006, the California Legislature passed the California Global Warming Solutions Act, Assembly Bill (AB) 32, creating a multi-year roadmap to greenhouse gas (GHG) emissions reduction in California. The first regulation passed under AB 32 to address transportation fuel emissions was the LCFS Program. The LCFS Program is designed to decrease the carbon intensity (CI) of transportation fuel in California. Annual CI benchmarks are lowered each year to encourage providers of transportation fuels to supply a lower-carbon mix. Use of lower CI fuels generates credits that can be sold on the open market. The LCFS Regulation was amended in November 2024 with the following changes:

• Increased the 2030 CI targets from 20% to 30%, with an immediate 5% cut in 2025;
• Extended the program to achieve 90% reduction target by 2045;
• Phased in some limits to bio-methane crediting;
• Reduced credits from electric forklifts;
• Required direct metering for electric forklift credits;
• Required third-party verification to electricity, hydrogen, and other fuels; and
• Expanded zero-emission vehicle (ZEV) infrastructure crediting opportunities.

The full proposed LCFS Regulation language is available at: https://ww2.arb.ca.gov/our-work/pro-grams/low-carbon-fuel-standard/lcfs-regulation

Several additional CARB rules have been enacted to reduce fossil fuel use, including the following:

• Advanced Clean Trucks (ACT): This rule is in effect and places ZEV sales requirements on manufacturers of heavy-duty trucks.
• Advanced Clean Cars II (ACC II): This legislation is in effect and requires all new passenger cars, pickup trucks, and sport utility vehicles (SUVs) sold in California to be ZEVs by 2035.
• Zero-Emission Forklift Regulation: Forklifts using large spark-ignition (LSI) engines are subject to phaseout for zero-emission versions (battery-electric and fuel-cell) starting in 2026.
• Advanced Clean Fleets (ACF): CARB withdrew their request for a U.S. Environmental Protection Agency (U.S. EPA) waiver for ACF for High-Priority or Drayage fleets. So, CARB is not enforcing the High-Priority and Drayage ACF rules. The ACF State and Local Government Agency (SLGA) rule is in effect and requires medium- and heavy-duty vehicles to start transitioning to zero-emission or near zero-emission technologies.

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