What California's New Advanced Clean Car Rule Means for Other States

Updates: This blog post was last updated on November 21, 2023.

Overview

California has set a new precedent with its newly minted Advanced Clean Cars (ACC) II rule approved by the California Air Resources Board (CARB) in November 2022. The highlight of this new program is the requirement for 100% of passenger vehicles sold in-state to be zero-emission by 2035. What does this mean for other states across the country? Seventeen states have already adopted California’s previous ZEV (Zero Emission Vehicle) regulations; however, states will need to initiate rulemaking to adopt the new, more stringent regulations.

• Why can California adopt its own vehicle regulations? Congress carved out an exemption in the Clean Air Act that required the Environmental Protection Agency to allow California to apply its own vehicle regulations originally due to California’s public health crisis from extreme smog in the 1960s. Other states are not allowed to create their own standards under the Clean Air Act but are able to adopt California’s more stringent regulations. 

What is new about California’s Advanced Clean Cars II regulation?

The ACC standards provide targets for yearly sales of zero-emission vehicles beginning in model year 2026 and culminating in 100% sales by 2035. Eligible manufacturers collect credits for the qualified zero-emission vehicles they sell. These credits are tradeable and bankable, so manufacturers can sell them to other parties or save them for the next year’s targets. The new program also builds in some flexibility for states to adapt the requirements to their current electric vehicle adoption percentages including:

• Early Compliance Credits: allows manufacturers to gain credits for zero-emission sales in the two years prior to the adoption of the program in their state
• Historical Credits: allows manufacturers to use a certain percentage of credits earned in the Advanced Clean Cars I program towards their ACC II requirements
• Environmental Justice Credits: allows manufacturers to earn additional credits by selling lower-cost vehicles, ZEVs placed in community car share programs, or incentivizing sales to low-income community members
• Credit Pooling: allows manufacturers to transfer credits from states with high ZEV sales to states with lower ZEV sales
• Fuel Cell Allowances: allows manufacturers to sell fuel cell vehicles in one state and be awarded additional credits to use in another state

What states have already adopted or have begun rulemaking to adopt ACC II rule?

Vermont was the first state to adopt ACC II in December 2022; New York, Washington and Oregon subsequently adopted ACC II later that month. In 2023, Colorado, Rhode Island, New Jersey,  Maryland, Massachusetts, and New Mexico have also since adopted ACC II. Maine, Delaware, and Connecticut have either already begun rulemaking or indicated their interest in doing so formally.

The Lasting Benefits for States Looking to Adopt ACC II: By adopting the ACC II rule, states have an effective tool to comprehensively drive electric vehicle deployment while providing lasting economic and public health benefits. An analysis from RMI finds that states like Colorado, Michigan, and North Carolina would benefit greatly from fully adopting ACC II by reducing statewide emissions an additional 40%, improving air quality, and creating thousands of new jobs in manufacturing and construction. Learn more.

An important note on implementation: Under the Clean Air Act, states must give manufacturers a two-year “lead-time” when they adopt the ACC II rule before the regulations can go into effect, which means that in order to participate in the first year of ACC II (model year 2026), states must have adopted the rule by the end of calendar year 2022. States who adopt ACC II in 2023 will begin the program for vehicles in model year 2027. 

What about Medium and Heavy Duty Vehicle Electrification?

Medium- and heavy-duty vehicles like buses and trucks make up only 5% of vehicles on the road but account for about 24% of U.S. transportation emissions and more than 60% of tailpipe nitrogen oxide (NOx) and particulate (PM) emissions from active vehicles. As a result, California adopted the Advanced Clean Trucks (ACT) rule in 2020 and the Advanced Clean Fleets (ACF) rule in 2023

• Clean Trucks (ACT): California’s Advanced Clean Trucks (ACT) rule requires manufacturers who sell medium- and heavy-duty vehicles to sell zero-emissions vehicles as an increasing percentage of their annual sales from 2024 to 2035. Nine states have joined California in adopting the ACT rule: Colorado, Maryland (with caveats), Massachusetts, New Mexico, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington. In October 2022, North Carolina Governor Cooper released an executive order directing state officials to begin rulemaking to adopt the ACT Rule. 

• Clean Fleets (ACF): The Advanced Clean Fleets (ACF) complements the Advanced Clean Trucks (ACT) rule by instituting a purchase requirement for medium and heavy-duty fleets to adopt an increasing percentage of zero-emission trucks. This rule covers 1) private fleets with 50 or more trucks; 2) short-distance trucks operating from seaports or railyards; and 3) state and local government public fleets. Any state can choose to adopt this new rule to better support their medium- and heavy-duty vehicle electrification efforts now that the regulation is finalized in California. 

What does this all mean for your state?

California has the unique opportunity to advance its own vehicle regulations, which provides the ability for all other states to follow its ambitious example. Particularly for states who have recently adopted aggressive greenhouse gas emission reduction mandates, reducing greenhouse gas emissions from the transportation sector by increasing electric vehicle adoption is vital for meeting those legally mandated targets. Adopting the Advanced Clean Car II rule, the Advanced Clean Truck rule, and the Advanced Clean Fleets rule are three critical tools to support that effort.