In 2021, DC Velocity reported on a proposed California state regulation that would require most forklift fleets to phase in zero-emission forklifts (ZEF) over a period of years. Three years later, in a public hearing held in Riverside, California, on June 27, 2024, the California Air Resources Board (CARB) unanimously approved a revised version of that proposal. The regulation will require most fleets to phase in zero-emission forklifts between 2028 and 2038. Restrictions on the purchase of certain new forklifts with internal combustion engines, however, begin much earlier, in 2026.
The mandate is designed to comply with Gov. Gavin Newsom’s Executive Order N-79-20, which requires that off-road vehicles in California transition to zero-emission models by 2035, “where feasible.” The definition of “feasible” animates some of the pushback against the regulation. Some stakeholders have also expressed concerns about the likelihood of job losses and economic burdens, even as they generally support the rule’s ultimate objectives of lowering greenhouse gas emissions and reducing health hazards for California residents.
The 70-page regulation, which includes a number of exemptions and exceptions, applies to certain categories of large spark ignition (LSI) forklifts fueled by propane, natural gas, or gasoline (diesel-powered forklifts are exempt). They include all Class IV forklifts, and Class V forklifts with a rated capacity of 12,000 lbs. or less. CARB estimates that some 89,000 LSI forklifts will be phased out under the new rule.
Details can be found in CARB’s presentation at the public hearing, but the following is a brief summary of the timeline for phasing out the targeted forklifts:
Beginning in 2026, manufacturers cannot make or sell targeted categories of LSI forklifts in California, and end users cannot purchase or lease them. Exceptions to this prohibition include: Dealers and manufacturers may sell model year (MY) 2025 inventory through the end of 2026, so they will not be left with unsold equipment; they can sell MY 2026, 2027, and 2028 Class V trucks to rental agencies; and they can sell LSI trucks to customers whose trucks are exempt (such as dedicated emergency-use forklifts) or who have obtained an extension of the compliance deadlines from CARB.
From Jan. 1, 2028, through Dec. 31, 2037, existing targeted forklifts must be phased out by model year and can be replaced with only zero-emission equipment. According to CARB staff, the dates were designed so that no forklift will be required to be phased out before it is at least 10 years old. The compliance deadlines are staggered based on fleet size, truck class, capacity, and, in some cases, application:
- For large fleets (more than 25 forklifts, including zero-emission forklifts), phaseout of Class IV trucks rated at 12,000 lbs. or less begins in 2028 for MY 2018 and older. Additional deadlines based on model year are 2031, 2033, and 2035. For small fleets (25 forklifts or less) and trucks used in agricultural crop preparation, the deadlines run from 2029 to 2038. Phase-out of Class IV forklifts with capacities exceeding 12,000 lbs. begins in 2035 for large fleets and in 2038 for small fleets and crop prep applications.
- For all fleets, Class V trucks rated for 12,000 lbs. or less begin phaseout in 2030 for MY 2017 and older. Additional deadlines based on model year are 2033, 2035, and 2038; the 2038 deadline also applies to rental agencies for some model years. The required phaseout does not apply to Class V forklifts rated for 12,000 lbs. or more, but fleets that voluntarily choose to replace such trucks with electrics of the same or greater capacity can earn credits that allow them to postpone the replacement of an equal number of other LSI forklifts until 2038.
To limit the financial impact on end users, the required turnover of forklifts on the first compliance date only is capped at 50% of a fleet’s total number of targeted LSI trucks for large fleets and 25% for small fleets and those used in crop prep.
The rule creates exemptions for low-use trucks (fewer than 200 hours per year) until 2030, but a “microbusiness” can keep one low-use forklift indefinitely; for dedicated emergency equipment; and for forklifts being held for out-of-state delivery. It also includes exemptions for in-field use for agriculture and forestry, because charging infrastructure generally is not feasible in those locations. Fleets can apply for a deadline extension, thereby postponing the phase-out, if they experience significant delays in the delivery of ZE forklifts, in electrical infrastructure construction or upgrades, or in site electrification, or because no ZE forklifts currently available can meet their needs. In the last-mentioned case, an LSI forklift that has reached the end of its life substantially before its phase-out date may be replaced with a newer forklift, inheriting the replaced forklift’s phase-out date. The onus is on fleets to apply for and justify exemptions and extensions and most extensions must be renewed each year. If circumstances have changed—for example, if new models of ZE forklifts could meet an end user’s performance requirements—then the exemption would not be renewed.
Stakeholders Air Their Concerns
Over the past three years, CARB’s staff researched various forklift applications, capabilities, and availability. They also sought stakeholders’ feedback through public workshops; meetings with fleet operators, forklift manufacturers and dealers, rental agencies, fuel providers, and related industry groups; and site visits. Based on that and other feedback, as well as on submissions during two rounds of public comments, the staff modified the original proposed regulation to address some of stakeholders’ concerns.
While many of the agriculture, construction, labor, small business, and propane industry representatives who commented at the June 27 board meeting praised the CARB staff’s outreach and responsiveness, they still had plenty of strong criticisms. Among the biggest concerns for agriculture and and construction was the high cost of replacing equipment; two to three electrics would be required for each LSI model eliminated, several commenters asserted. Also high on their list was the feasibility of providing battery charging infrastructure on construction sites and in agricultural fields. Both typically have limited or no electrical service and are in operation only for limited periods. Multiple speakers questioned whether the utilities would be capable of providing enough reliable capacity to support a long-term increase in battery-powered equipment. Ag industry and small business representatives also wanted more generous caps on the percentage of trucks that must be replaced by the first compliance deadline and/or to have caps apply to every compliance deadline, not just the first one.
For providers of propane fuel—often family-owned small and medium-size businesses—the likely loss of jobs and, potentially, their businesses altogether, were their biggest worries. They reiterated their longstanding argument that propane is a low-emission fuel, therefore, propane-powered forklifts should be considered “part of the solution, not the problem,” as more than one speaker put it. Following the board’s decision to approve the regulation, the Western Propane Gas Association (WPGA) issued a statement slamming it as “costly, infeasible, and flawed.” WPGA charged that CARB’s estimate of the number of forklifts and businesses that would be affected is too low, highlighting its own projections for the cost of adding electrical infrastructure and replacing existing equipment. The group is instead supporting its own alternative proposal, which it contends will meet the state’s air-quality goals with less disruption and expense.
CARB Responds and Moves Forward
CARB’s staff responded to those and other criticisms by asserting that the propane industry’s estimate of the number of forklifts that would be affected relies on an incorrect methodology and is greatly overblown. Staff and two of the board members also noted that powerful, high-performance battery-powered forklifts are now on the market, so replacements are technically feasible. They are economically feasible as well, staff said: They expect fleets will save $2.7 billion in net fleet operating costs through 2043, primarily from lower fuel and maintenance costs, even given the higher upfront acquisition cost for ZEF and the possibility of higher electricity rates in the future. As for electrical service, they urged forklift operators to begin discussions with local utilities by early 2026 to plan for installations or upgrades that may be needed. And they emphasized that the various exemptions and deadline extensions built into the regulations were designed to address the very concerns being expressed by stakeholders and provide them with an unusual degree of flexibility.
The board voted unanimously to approve the adoption of the regulation, with an amendment requiring staff “to evaluate the effectiveness of implementation of the rule and report back to the Board by 2028 . . . and propose any adjustments in the compliance schedule as necessary."
What’s next? Assuming no substantive changes, which are not expected, the final regulation will now move to California’s Office of Administrative Law (OAL). Once OAL determines that it complies with the state’s administrative laws, the regulation will be filed with California’s Secretary of State. The effective date of the regulation (which is separate from the compliance date) will likely be in October or January, depending on when OAL completes its review.
Because the regulation relates to emissions from off-road vehicles, which is covered by the preemption provisions of the federal Clean Air Act, CARB must seek authorization from the U.S. Environmental Protection Agency (EPA) to fully implement the rule. Without that authorization, California will not be able to enforce the law. While authorization by EPA is routinely granted, the timing is uncertain, leading to the possibility that the regulation could officially become effective but not yet enforceable.
Editor’s Note: Gary Cross, of Dunaway & Cross, contributed to this report.
Gartner, Inc.