California has long been at the forefront of implementing environmental policies impacting fleets. The state has recently proposed amendments to the In-Use Off-Road Diesel-Fueled Fleets Regulation, focusing on the retirement of old truck models and the mandatory use of R99/R100 fuel blends in new purchases starting in 2024. These amendments aim to reduce greenhouse gas emissions and improve air quality. However, some aspects of the change are still being finalized, so today we’ll explore what’s in the provision, what we know, and what we don’t know.
What We Know
The proposed amendments require certain off-road fleets to retire old, polluting truck models by key deadlines and replace them with newer, more efficient vehicles. It also prevents fleets of certain sizes from purchasing older vehicles. Depending on the size of your fleet (as measured by total horsepower operating in the State of California), you may face different requirements. You can find the guidelines here.
In addition, all non-exempt off-road diesel purchases must utilize R99/R100 fuel blends, which are renewable and emit significantly fewer pollutants compared to conventional diesel. These cleaner fuel options consist of 99% or 100% renewable diesel (RD), produced from sustainable feedstocks such as waste fats, oils, and greases.
For the RD requirement, there are some caveats. CARB clarified that certain narrowly-defined “captive attainment area fleets” are exempted, as well as vehicles operating within captive attainment areas. For areas where 10th percentile minimum ambient air low temperature in January drops below 20 degrees Fahrenheit (20⁰ F), fleets may opt to use CARB diesel or other cold-weather optimized diesel blends for November, December, January, and February. Fleets can also use non-RD99/100 blends if weather forecasts show temperatures falling below 20 degrees Fahrenheit in the 14-day forecast. Of course, for any of these exemptions, specific documentation is required.
If you’re looking for some evening reading materials, the entire legislation can be found for download here. Check out the Resolution 22-19 PDF download for the major details or read Appendix A-2 for the entire amendment.
What We Don’t Know
The R99 provision is not entirely clear. There are a few items that Mansfield is still seeking to clarify with the California Air Resources Board (CARB) before offering guidance to customers. For instance, the legislation does not mention biodiesel, so it’s unclear whether blends including an R80/B20 would be allowed for off-road fleets. Some documents also suggest some uncertainty regarding the Tier 4 exclusion for fleets – whether it applies to any Tier 4 engine, or only when the entire fleet is made up of Tier 4 or zero-emission vehicles.
What This Means for Renewable Diesel Markets
Currently, Mansfield expects there to be sufficient RD supply available in 2024 to meet off-road diesel demand, based on current renewable diesel projects underway in the US. There are several construction projects underway nationally to increase domestic production of RD. These projects should come online in time to meet growing RD demand in 2024.
Does the bill apply to my business?
While not a comprehensive guide, here’s a helpful excerpt from CARB’s documents on who the Off-Road Diesel-Fueled Fleet Regulation does and does not apply to. Always seek specific counsel for your business before deciding whether a law applies to your unique usage or not.
The Off-Road Regulation applies to all off-road, diesel, self-propelled equipment over 25 horsepower used in California that is not exempted under agricultural or cargo handling equipment provisions, and does not include transport refrigeration units (TRUs), marine, or locomotive categories. Broadly, this equipment is used in construction, mining, industrial, oil drilling and airport ground support operations. A few examples of equipment types include excavators, loaders, backhoes, cranes, forklifts, oil-drilling rigs, and aircraft towing tugs.
What if I cannot get enough renewable diesel supply?
Based on current supply, Mansfield expects there will be sufficient RD in the market for fleets to comply with the requirement. Still, having a reliable supplier will be crucial. If you’re not confident in your ability to secure renewable diesel, contact Mansfield today.
In areas where RD is proven to be unavailable for all suppliers, CARB does allow fleets to apply for an exemption – assuming they can demonstrate quarterly efforts to secure RD supply.
How will this impact my fuel prices?
California still has incentives in place that help make renewable diesel competitive with ULSD prices, which means the economic impact of the RD component of this law should be minimal. Depending on how CARB rules on the acceptance of R80/B20 blends, some customers could see changes in how they benefit from LCFS incentives.
What reporting requirements are included?
There are a host of vehicle reporting requirements imposed by the new amendment. One specific requirement related to the R99/R100 mandate is that fleets must maintain 3 years of records stored in California proving their purchases were renewable diesel and not ULSD. If you do not have a tracking method in place to store product invoices and BOLs, work with your fuel supplier. Mansfield stores historical customer invoice data within FuelNet, which is available to be pulled 24/7.
Are we liable if we rent off-road equipment to others?
Leasing companies must include a statement in their contracts with specific language that their renting customers are responsible for procuring renewable diesel for their engines. If this clause is included within the rental contract, the leasing company will not be held liable for incorrect product purchases.
What are captive attainment fleets and areas?
Commercial fleets that are entirely operated in captive attainment areas are treated as small fleets regardless of size, and must meet the new engine requirements based on that designation. For fuel, all fuel purchased by fleets operating in that region, whether their entire fleet is there or not, is excluded from the RD requirement.
The legislation defines captivate attainment areas as the following counties: Alpine, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Monterey, Plumas, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz, Shasta, Sierra, Siskiyou, Trinity, Tehama, Yuba, and the portion of Sonoma County that lies within the boundaries of the North Coast Air Basin.
There are several areas that are still being reviewed by the CARB board. Just this week, they clarified that off-road fleets would be exempt during cold weather. These and other clarifications will be communicated to Mansfield’s customers as we learn more.