The Freight Carrier’s Guide to California Emissions Regulations

An open-deck truck travels on a highway

In 2023, California passed a history-making ban on new diesel truck sales, sending shockwaves through the transportation industry. 

The ban is just one of a series of stringent vehicle emissions regulations implemented by California to support its ambitious goal of achieving carbon neutrality by 2045. 

These rules, while setting a global standard for sustainable transportation practices, also place significant pressures on many in the industry — especially carriers. 

If carriers don’t comply with the state’s strict regulations, they’ll face major operational challenges that will make it all but impossible to haul freight in California. 

But complying isn’t as simple — or budget-friendly — as one might hope, leaving carriers to weigh the cost of compliance against their business in the Golden State. 

Many transportation companies are already feeling the stifling influence of these regulations and the state's aggressive implementation schedules. 

At Anderson Trucking Service (ATS), we’re proactively implementing a compliance plan for a portion of our assets, so we can continue to serve our customers at the high level they deserve. 

As we created our compliance plan, we learned much about the various regulations at play — and now we’d like to share that knowledge with you. 

Let’s dive into California’s many emissions regulations and unpack their effects on both carrier operations and the freight market as a whole.

You’ll walk away from this article with a clearer understanding of compliance requirements and their impact on your business, which will help you make an informed decision about your continued operations in California. 

What are California’s Emissions Regulations for Trucks?

California’s emissions regulations are the strictest in the nation, exceeding even the EPA’s current guidance. These many regulations affect carriers and operators most acutely, but have a dramatic impact on the freight market in the state and across the nation. 

Let’s explore the most impactful regulations currently factoring into carriers’ and drivers’ freight acceptance decisions: 

Advanced Clean Truck (ACT) Regulations

The California Air Resources Board (CARB) Advanced Clean Truck (ACT) regulations cap the number of fossil fuel vehicles original equipment manufacturers (OEMs) may sell by mandating that an increasing percentage of their annual sales must come from zero-emission vehicles (ZEVs) or near-zero emissions vehicles (NZEVs).

OEMs that sell 500 or more medium- and heavy-duty vehicles each year are affected by these regulations. ACT will set increasing annual sales percentage requirements for these manufacturers from 2024-2035. 

Advanced Clean Fleet

Also under the umbrella of ACT regulations are the Advanced Clean Fleet rules, which require certain fleet types to phase in medium- and heavy-duty ZEVs into their California fleets through 2042. The three affected fleet types are:

  • State and local government fleets: 50% of vehicles purchased must be ZEVS. Starting Jan. 1, 2027, 100% must be ZEVs.
  • Drayage fleets: As of Jan. 1, 2024, only zero-emissions drayage trucks can be reported in CARB’s Truck Regulations Upload, Compliance, and Reporting System (TRUCRS) system; only TRUCRS-reported vehicles may legally conduct drayage activities. Must be 100% ZEV by 2035.
  • “High priority” fleets: Includes federal agencies and entities that have $50 million or more in gross annual revenue and/or entities that own, operate, or control 50 or more vehicles. Must choose and comply with either the Model Year Schedule or the ZEV Milestones Option for phasing ZEVs into their fleets.

This slow and steady phasing out of diesel vehicles in the state sets the stage for the next phase of California’s long-term clean air efforts: the 2036 new diesel truck ban.

New Diesel Truck Ban

In May 2023, California became the first state in the country — and the first in the world — to ban new diesel trucks and require a transition to zero-emissions semi-trucks. 

Beginning in 2036, no new fossil-fueled medium- and heavy-duty vehicles will be sold in the state. Large trucking companies will also have to convert to electric or hydrogen-powered vehicles by 2042.

Drayage trucks carrying freight in and out of ports must adhere to the strictest timeline under the new regulations. All drayage trucks must be converted to electric models by 2035, and all new drayage trucks sold from 2024 on must be zero emissions.

The new rules will affect about 1.8 million trucks. It applies to fleets that run 50 or more trucks or have an annual revenue of $50 million or more. Fleets owned by Amazon, FedEx, and UPS will all be affected. 

The regulations also apply to federal agencies, including the U.S. Postal Service. Emergency vehicles, such as fire trucks and ambulances, are exempt.

A line of diesel trucks creating dark smoke

Truck and Bus Regulation (CARB Compliance)

CARB’s Truck and Bus Regulation, also referred to as CARB compliance rules, requires nearly all trucks and buses (including drayage and reefer trucks) operating in California to have 2010 or newer model year engines.

These regulations, which went into effect on Jan. 1, 2023, aim to reduce particulate matter (PM) and oxides of nitrogen (NOx) emissions. 

As of Jan. 1, 2020, the California Department of Motor Vehicles (DMV) cannot register any vehicle that is not CARB compliant. Reporting in CARB’s TRUCRS system is required for compliance.

Other California Trucking Regulations

California has also instituted a variety of other programs aimed at implementing, supporting, and maintaining clean air practices in the trucking industry. 

These programs can impact drivers more directly than the sweeping regulations listed above, as some involve random pull-over inspections, testing, and displayed documentation. 

This means drivers must be aware of the programs’ existence and compliance criteria before crossing into California. Some related programs include:

  • AB5 (Gig Worker Law): Reclassifies many independent contractors, including truck company owner-operators, as employees. The law does not differentiate leased owner-operators from those who operate under their own authority. Carriers, brokers and even shippers will have to demonstrate that their business arrangements satisfy all 3 parts of the “ABC test":

    A) They are free from the control and direction of the hiring entity, both in contract and in fact.
    B) They perform work that is outside the usual course of the hiring entity’s business.
    C) They are customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
  • Basic Inspection of Terminals (BIT) Program: Requires all commercial vehicles owned and operating within California or intrastate with a gross vehicle weight rating of 10,001 pounds or greater to receive a bumper-to-bumper safety inspection (referred to as a BIT Inspection) every 90 days. The inspection is the same as an annual Department of Transportation (DOT) inspection. 
  • California Vehicle Code: Limits trucks with three or more axles, or trucks towing other vehicles, to a speed of 55 miles per hour (mph) on highways. 
  • Clean Truck Check: Requires non-gasoline (diesel, alternative fuel, and hybrid) trucks, buses, and other heavy-duty vehicles (such as California-registered motorhomes) with a gross vehicle weight rating over 14,000 pounds that operate in California to undergo emissions testing. CARB extended the Clean Truck Check reporting deadline to January 31, 2024, to allow owners additional time to complete their initial fleet reporting and meet the compliance fee requirement for 2023.
  • Emission Control Labels: Emission control labels must be affixed to the engines of all commercial heavy-duty diesel vehicles. 
  • Idling Limits: Restricts all diesel vehicles from idling for more than five minutes; idling in school zones is banned outright with few exceptions.
  • Periodic Smoke Inspection Program (PSIP): Owners of California-based fleets of two or more diesel vehicles are required to perform annual smoke opacity tests and keep records for a minimum of two years per vehicle. Does not apply to trucks that must undergo a smog check.
  • Random Roadside Inspections: Heavy-duty vehicles operating in California are subject to random roadside inspections to verify that diesel engines do not smoke excessively and are tamper-free. 
  • Tractor-Trailer Greenhouse Gas Regulation: The Environmental Protection Agency’s (EPA) SmartWay program aims to improve supply chain sustainability in the freight industry and resulted in several regulations for tractor-trailers: 
    • 2011-2013 model year (MY) sleeper-cab tractors must be SmartWay-designated models. 
    • 2013 MY or older tractors and 53-foot or longer trailers are required to have SmartWay-certified low-rolling resistance tires.
    • 2014 MY or newer tractors are covered by federal regulations and are exempt from this rule; they are still required to have SmartWay-certified low-rolling resistance tires. 
    • All trailers must be SmartWay certified or aerodynamically retrofitted to a minimum standard, per CARB.

What Do California’s Emissions Regulations Mean for Carriers?

If carriers working in California want to continue to do so, they must comply with the regulations, full stop. 

While it’s true that many of California’s strict emissions regulations don’t fully take effect for another decade, the regulations and restrictions that are already active are enough to force carriers’ hands. 

If a carrier operates in California, they’re facing a tough choice: Pay to make some or all of their fleet compliant, or stop running trucks in California.

Companies that cannot afford to lose their California business will have to shoulder the costs of compliance, which can be pricey to begin with and quickly add up. 

Others may choose to convert only a portion of their fleet; still, others may decide to cut their California capacity altogether. 

The California emissions regulations have complicated things for brokerages, too. No shipper or broker wants their freight bounced from carrier to carrier like a game of Hot Potato, but in this transforming market, fewer and fewer are willing to cover California loads.

Carriers and their drivers are turning away from California lanes due to the sheer volume of regulations necessary to even enter the state legally — not to mention the risk of random roadside inspections, the stifling 55 miles-per-hour speed limit, and other restrictions that slow the flow of freight. 

Two semi trucks travel down a California highway

This is on top of the fact that there are not enough zero-emissions trucks to cover California’s self-mandated (and ever-growing) needs. CARB estimates that only 1,000 will come online in 2024 — barely a drop in the bucket as far as California’s trucking and drayage industries are concerned.

The bottom line? The number and severity of California’s emissions regulations have caused instability in the freight market, leading to increased freight rates and prolonged timelines. 

As a carrier, the decision of whether to invest in compliance is entirely yours to make. Assess your company’s needs, goals, and customer base to start determining whether the money you make on your California lanes offsets the cost of compliance.

Should You Invest in Maintaining Your California Lanes?

If your company can afford to comply with the California emissions regulations, there are some benefits to maintaining your California lanes.

If your trucks are already CARB-compliant (2010 engine or newer), it’s likely worth your while to stay in California, at least for the time being. This is especially true for smaller carriers who will not be affected by the Advanced Clean Fleet Rules.

Freight market experts foresee an ongoing capacity drought in California, so if you’re one of the few carriers still hauling there, you can have your pick of freight — and name your rate. Even a handful of compliant trucks in the area could be worth the investment.

If you regularly carry in California for a brokerage, it may have resources to help you understand what regulations apply to your trucks. Some brokerages may even have incentives or programs in place to help carriers become compliant so they can keep up with demand. 

So, if you’re a carrier that isn’t risk-averse and has the capital to invest, it could be worthwhile to maintain your California lanes. 

But if California loads only represent a small portion of your business, or if the cost of getting even one compliant truck is prohibitive, it may be time to pick up your ball and go home. 

After all, there are most costs to consider beyond the big-ticket items like a new engine (or brand-new ZEV.) The costs of regular inspections, compliance fees, sky-high fuel prices, fees levied for any infractions . . . they all add up over time. 

If that doesn’t sound appealing to you, well, it’s hard to blame you! 

These factors and many others are weighing heavily on carriers all across the nation. If you choose to turn away from the Golden State, you definitely won’t be alone. 

While the loss of your California lanes will be just that — a loss — it may very well be the right choice for your business in the long term. 

Semi truck with dry van trailer travels a California highway

Navigating a Challenging, Changing Market

While California’s strict regulations represent positive change for air quality and climate change reversal efforts, they have also turned the freight industry on its head. 

Major regulations such as the New Diesel Truck Ban, ACT, CARB compliance, and others have made it significantly more difficult for trucking companies to operate within the state of California. 

As the regulations in California become even more restrictive over the next decade, capacity issues are predicted to worsen as carriers ask themselves: Is it worth it to maintain my California lanes? 

For some, the answer will be a resounding yes; the opportunities afforded to those who remain operational in the state will be especially lucrative thanks to the decreased supply of trucks in the area. 

But for others, the California emissions regulations are essentially a “STAY OUT” sign posted at the state line. Without enough currently-compliant vehicles to continue operating or the capital necessary to become compliant, the only move left in the game is not to play. 

It’s the unfortunate reality of well-meaning legislation: what’s good for Mother Nature is not always what’s good for business. 

Moving forward, the freight market in and around California will be in a continual state of re-adjusting as regulations tighten incrementally over time. Only you can determine whether continuing to haul in California is right for you and your company. 

And you’ve already taken the first step: By reading this article, you’ve gained the knowledge necessary to understand the many regulations at play and make an informed choice. 

It’s undeniable that the freight market is challenging in many ways right now. Regardless of what you decide regarding your California lanes, it’s always a good idea to consider diversifying your abilities as a carrier. 

If you’re interested in finding new ways to make more money as a carrier, check out our article on TWIC and TSA certification. 

These certifications give the holder access to normally off-limits areas (ports and airports, respectively,) to haul well-paying freight. Our article thoroughly explains both credentials, including their value to carriers, so you can decide which to pursue for your fleet. 

Tags: Freight Brokerage, Flatbed Shipping, Dry Van Shipping, Market Update

Aaron Holmgren

Written by Aaron Holmgren

Aaron has been with ATS since 2014. He began in fleet operations support. He worked with his own fleet of drivers while also dispatching wind turbine blade drivers. Aaron spent a couple of years in the planning department working with both contractors and company drivers. He has been in the operations manager role since 2019.

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