California’s zero-emissions mission

It’s often said that any trend that begins in California—be it social, cultural, or environmental—will eventually spread to the rest of the country. Forklift fleet owners nationwide may be wondering, then, if they should keep an eye on a California Air Resources Board (CARB) proposal that has set off alarm bells in industries that depend on lift trucks, such as warehousing and distribution, construction, manufacturing, and agriculture.

The proposal is still in an early stage called a “draft regulatory concept,” which precedes the development of a proposed regulation. While the draft is far from final, its intent is clear: Most users will have to phase out emissions-generating internal combustion (IC) forklifts, and they will only be allowed to lease or purchase zero-emission (ZE) equipment—forklifts that produce no air pollutants—after a specified date. While we can’t know at this point how things will ultimately play out, we can provide an overview of the draft regulatory concept (as of this writing), outline some of the questions that have been raised by end-users and forklift OEMs, and explain how stakeholders can offer input to CARB. 

WHAT’S THE PLAN?

CARB, a state government agency, is responsible for air pollution-control efforts in California. The forklift measure stems from California Gov. Gavin Newsom’s Executive Order N-79-20, which aims to reduce harmful emissions from a wide range of sources, including off-road vehicles and equipment. 

Why focus on forklifts when they likely account for a very small percentage of off-road emissions? It’s partly a matter of expedience. CARB’s objectives include accelerating the adoption of ZE technology, explains Angie Polanco, an air resources engineer in CARB’s Off-road Implementation Section. “We identified forklift electrification as a possible early action that would allow us to introduce ZE vehicles to targeted sectors,” she said in an interview. “A lot of indoor forklifts are already zero-emission, so it’s a good place to start and then quickly move forward.”

As of August 2021, the draft regulatory concept would impose the following requirements for forklifts with a lift capacity of 12,000 pounds or less operating in California:

• Applicable forklifts (mostly Class 4 and 5) purchased or leased after Jan. 1, 2025, must be zero-emission equipment. 
• The phaseout of older internal combustion engines will begin Jan. 1, 2025. As of that date, IC forklifts that are 13 years old (model year 2012) or older, or are powered by an engine that is 13 or more years old, may not operate. The retirement model year will increase one year at a time; for example, forklifts with a 2013 model year engine will be retired in 2026, forklifts with a 2014 model year engine in 2027, and so on. By the end of 2035, all forklifts subject to the regulation must be zero-emission. 
• Companies must register all forklifts with the state and report annually each lift truck’s make, model, model year, lift capacity, and when acquired; power source and capacity for ZE equipment; and engine details and fuel type for IC equipment, among other particulars. An attestation of compliance with the ZE regulation will also be required.

The regulation would not apply to rough-terrain forklifts, military tactical vehicles, pallet jacks, or small forklifts operating at ports and intermodal rail yards that are subject to a separate California regulation that’s applicable to cargo-handling equipment. Additional exemptions or delayed phaseouts are under consideration for forklifts used for emergency operations, rentals, low/occasional use, and remote locations where battery charging isn’t feasible. CARB is also considering a five-year delay for small businesses. 

STAKEHOLDERS SPEAK UP

In addition to considering the proposed regulation’s effectiveness in meeting state and federal pollution-reduction standards, CARB will also take into consideration feasibility, fairness, environmental justice, costs and economic impact on businesses, enforceability, and requirements for monitoring and reporting. With that in mind, program engineers have been soliciting feedback—and stakeholders have not been shy about expressing their concerns. A public workshop in August elicited dozens of questions and comments from attendees. Just a few examples:

• The implementation timeline is too short. The board plans to consider the proposal in early 2022. If adopted, the start date would be less than three years away.
• Phasing out IC lift trucks based on model year will force their retirement before the end of their useful and/or economic life. The phaseout should be based on hours of use, which would mitigate some of the loss in value from fleets’ capital investments.
• The proposal includes tighter restrictions than another California regulation that applies to some forklifts. Under that rule, it’s legal to buy a Tier 4-compliant diesel forklift, but under this proposal, the same forklift purchased today would become illegal for use before the end of its economic life. Such early turnover of equipment would force businesses to incur costs they do not incur in other states.
• Why not let forklift owners decide how to meet CARB’s emission-reduction goals by a specified date? Instead of a flat ban with exceptions, adopt the “fleet average” compliance measure already in place for diesel-powered and spark-ignited (propane gas) equipment. 

From the perspective of the Industrial Truck Association (ITA), which represents forklift makers, some parts of the current proposal are an improvement over the initial version floated in October 2020. For example, instead of retiring eight-year-old IC forklifts, the threshold has been stretched to 13 years. While ITA considers that to be “a major improvement,” says Gary Cross, a principal with Dunaway & Cross who serves as ITA’s counsel, “that is still less than the life of a lot of forklifts. We’d like to see that extended. The longer the phaseout, the less negative impact on business.”

Replacing the most widely used types of forklifts is a “significant change” that will challenge end-users and forklift dealers alike, says Ryan Crochet, manager of product marketing and financial merchandising for Mitsubishi Logisnext, the Houston-based umbrella corporation for UniCarriers Forklifts, Mitsubishi Forklift Trucks, Cat Lift Trucks, Rocla AGV Solutions, and Jungheinrich. “If California comes out with a hard deadline with no exceptions, it will be a real challenge for operations using IC equipment to meet the current timeline.” 

One reason compliance may prove difficult is that, while today’s electric forklifts have achieved significant improvements in power and efficiency compared with their predecessors, there are still a number of applications where IC lift trucks remain a better fit, especially in outdoor or heavy-duty applications, Crochet observes. Furthermore, “not all customer locations will have the infrastructure or charging capabilities required to make this switch [to electric forklifts].” That will make it challenging for dealers and end-users to meet the requirements for short-term or seasonal rentals, he explains. 

Cross notes that even when a switch to electric lift trucks is feasible from a truck-performance standpoint, operating a large fleet plus charging stations can place a strain on both the facility’s electricity infrastructure and the grid that serves it. “I do think CARB is well aware of that and that they understand in broad terms that they need more grid capability,” he says.

CARB RESPONDS

Policymakers say they’re listening and will take those and other concerns into consideration during the rulemaking process. In fact, Polanco noted, they have already made some adjustments based on stakeholders’ feedback, such as the increase in the retirement age for IC forklifts to 13 years and the addition of an exemption for rough-terrain forklifts.

In the August public workshop and a subsequent interview with DC Velocity, Polanco and David Chen, manager of CARB’s Advanced Emission Control Strategies Section, answered some of the questions posed by workshop participants. One concerned the plan to gauge progress toward zero emissions based on individual forklifts rather than on a fleet’s average emissions level. This approach is already being applied to diesel forklifts and other types of equipment, but it’s difficult for CARB’s inspectors to verify and enforce, Chen explained. Yet it’s not entirely off the table: “If there is a compelling reason for adopting a fleet average measurement, we are willing to listen to that,” he said.

Another frequent question concerned the plan to retire IC forklifts based on model year, rather than on hours of use, which may force some fleets to scrap equipment long before its operational and economic life is over—a concern CARB will continue to take into account as the proposal is refined, Chen said. Here again, enforceability plays a role. In most cases, he noted, retirement based on the model year “would make it very easy for an inspector to know right away whether a forklift is compliant or not.” Some stakeholders have suggested measuring a fleet’s average age, which would provide the flexibility to choose what to phase out and when, but that also would be difficult to verify and enforce, he said. And there’s a big challenge with basing retirement on hours of use: Every forklift in the state that’s subject to the regulation would need to have an hour meter that cannot be reset or tampered with. 

Questions about the cost of compliance and overall economic impact were common. One commenter said it would cost $4 million to replace his company’s IC forklifts, adding that the company would also face the expense of enlarging its facilities and improving infrastructure to accommodate battery charging or hydrogen fuel cells. Polanco and Chen assured attendees that CARB’s calculations of stakeholders’ costs would include the costs of charging and related infrastructure as well as other expenses not incurred by IC forklifts. “Our goal is to develop a proposal that minimizes stakeholders’ costs as much as possible while still achieving our target of 100% zero emission by 2035, where feasible,” Chen said.

AS GOES CALIFORNIA?

If California’s mandate for ZE forklifts goes into effect, will similar rules be adopted elsewhere? “As a general proposition, I think the answer is yes,” says ITA’s Cross. “Other states and the country as a whole are increasingly invested in greater electrification. Whether another state would develop a forklift-specific proposal is harder to say.” Still, he adds, “if it becomes common knowledge after a while … that there aren’t very many IC forklifts in California and it’s working well, we could see a similar impact elsewhere.” 

While the industry overall continues to trend toward electric solutions, there will be pushback from forklift users, Crochet predicts, not only because there are applications where electric trucks cannot meet that application’s needs, but also because some buyers hold outdated misconceptions about electric truck performance. If the ZE goals are to be reached while accounting for the wide variety of application requirements, he says, the California market may have to find a balance, with both electric vehicles and low- or zero-emission IC forklifts playing roles in an overall strategy.

In any case, forklift end-users, dealers, and OEMs will all need to be aware of CARB’s proposal and the context in which it is being developed. Crochet notes that his company has prepared for the shift toward zero emissions and is hard at work developing a range of environmentally sound solutions that meet the needs of the market and the applications it serves. On a broader scale, he says, “this is a progression that we’ve expected, not only in the forklift world but across the board.”