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US Clean Fuels Policy is Shifting - Are you ready?
Jul 31, 202522 min read
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TodayPolicy, regulation, engines, emission norms and clean-fuel intelligence for decision makers.
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California Air Resources Board (CARB) has proposed an amendment to its low NOx Omnibus standard for MY 2024 vehicles.
We have covered California's Low NOx Omnibus regulation here, which were adopted on September 9th, 2021, setting a very challenging set of requirements for heavy-duty trucks to reduce tailpipe NOx emissions,
Following the U.S. EPA's nationwide version, CARB agreed with the truck and engine manufacturers to align with those in return for support for electrification. We have covered this here.
One continued difference compared to the EPA is that California will require compliance with interim standards starting MY 2024, while EPA starts implementation with MY 2027.
However, it is evident that manufacturers are not introducing sufficient engines compliant with these MY 2024 standards, affecting fleet options to buy new trucks. Hence CARB is proposing an amendment to some of the flexibility provisions.
The original standard provides some flexibility for OEMs to sell heavy-duty diesel engines (HDDEs) engines compliant with current NOx standards (0.2 g/bhp-hr), so called "legacy" engines. These are capped at 45% and 25% of each OEMs sale in California, in MY 2024 and 2025 respectively. The exceedence in NOx emissions are required to be offset by using HD zero-emission credits, combustion credits (lower-than-required NOx emitting engines), or projects in disadvantaged communities.
The new proposal extends this flexibility through 2 options:
(1) Inclusion of MY 2026 as another year in which legacy engines can be sold, capped at 10%
(2) Extend the legacy provisions to manufacturers producing medium heavy-duty diesel (MHDD) engines
Given that OEMs have deferred any plans to introduce new engines meeting MY 2024 - 2026 standards, California has taken a pragmatic step to increase flexibility for legacy engines. This should encourage new engine certifications, as a stepping stone to fully compliant MY2027 engines. The overall impact of this amendment is expected to be emissions and cost-neutral (mostly) given that both are offset through credits in other places. There are considerations for reduced DEF consumption for legacy engines that result in some cost savings for fleets, which CARB documents in their proposal. But overall, it remains to be seen if these measures are sufficient to encourage new engine introductions in California next year and beyond.
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