In 2021, DC Velocity reported on a proposed California state regulation that would require most forklift fleets to switch to zero-emission (ZE) trucks over a period of years. Three years later, in a public hearing 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 ZE forklifts between 2028 and 2038. Restrictions on the purchase and sale of certain new forklifts with internal combustion (IC) engines kick in much earlier, in 2026.
The forklift mandate is designed to comply with Gov. Gavin Newsom’s Executive Order N-79-20, which requires off-road vehicle fleets in California to transition to zero-emission models by 2035 “where feasible.” The 70-page regulation approved in June 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 pounds or less. CARB estimates that some 89,000 LSI forklifts will be phased out under the new rule.
The regulation includes some exemptions, deadline extensions, and limitations aimed at mitigating its short-term impact on fleet costs and productivity. But while support for the ultimate goal—reducing greenhouse gas emissions and associated health hazards for California residents—is widespread, forklift makers, dealers, end-users, and fuel suppliers remain worried about the mandate’s consequences for their businesses.
A COMPLICATED TIMELINE
A detailed timeline for phasing out the targeted forklifts can be found in the transcript of CARB’s presentation at the public hearing, but the following summarizes the most important dates:
Beginning in 2026, manufacturers cannot make or sell targeted categories of LSI forklifts in California, and end-users cannot purchase or lease them. There are some exceptions: For instance, dealers and manufacturers may sell model year (MY) 2025 inventory through the end of 2026; they can sell MY 2026, 2027, and 2028 Class V trucks to rental agencies; and they can sell LSI models to customers whose trucks have been exempted or who have obtained a deadline extension from CARB.
From Jan. 1, 2028, through Dec. 31, 2037, existing targeted forklifts must be phased out by model year and can be replaced only with zero-emission equipment. According to CARB staff, no forklift will have 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 application:
- For large fleets (more than 25 forklifts, including ZE trucks), phaseout of Class IV trucks with capacity ratings of 12,000 pounds or less begins in 2028 for MY 2018 and older. Additional deadlines based on model year occur in 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. Phaseout of Class IV forklifts with capacities exceeding 12,000 pounds 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 pounds 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 pounds and above, but fleets that voluntarily replace them with electrics of the same or greater capacity may 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 targeted LSI forklifts on the first compliance date only is capped: for large fleets, at 50% of their total number of targeted trucks, and for small fleets and trucks used in crop prep, at 25%.
The rule includes several exemptions in addition to that for diesel-powered models. Businesses can run low-use trucks (those operated for fewer than 200 hours per year) until 2030, and a “microbusiness” can keep one low-use forklift indefinitely. Dedicated emergency equipment and forklifts being held for out-of-state delivery are also exempt. Importantly for California’s agriculture-heavy economy, CARB set exemptions for in-field use for agriculture and forestry, where building a charging infrastructure generally isn’t feasible.
Fleets may apply for a deadline extension if they encounter “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 truck that has reached the end of its useful life well before its phaseout date may be replaced with a newer LSI model, which then inherits the older forklift’s phaseout date. The onus is on fleets to apply for and justify exemptions and extensions, most of which must be renewed annually. If circumstances have changed—for example, if new ZE models 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 sought stakeholders’ input through public workshops; meetings with fleet operators, forklift manufacturers and dealers, rental agencies, fuel providers, and related industry groups; and site visits. In addition, two rounds of public comments elicited hundreds of submissions.
Among the groups providing ongoing feedback was the Industrial Truck Association (ITA), which represents industrial truck manufacturers and suppliers of parts and accessories in the U.S., Canada, and Mexico. In a series of discussions with CARB staff and in written public comments, ITA focused on five major problem areas, according to ITA President Brian Feehan. The group’s key points can be summarized as follows:
1. The organization asked CARB to replace the model year-based ban on sales and phaseouts with a more flexible “fleet average” approach that would allow fleet owners to determine how best to reduce emissions over time and to decide which trucks to eliminate when.
2. Late in the regulatory process, CARB had asserted that electric forklifts can replace Class IV (cushion-tire) trucks with capacities above 12,000 pounds. ITA disagreed, arguing that those forklifts should be excluded because very few or no viable electric substitutes exist for many of the applications where they are used.
3. The proposed rule said no new LSI trucks of any model year could be sold in California after Jan. 1, 2026, which would potentially leave dealers with unsold prior-model-year inventory.
4. OEMs will be required to annually report detailed information for each LSI forklift sold into the state. ITA said that would unnecessarily duplicate much of the information CARB already receives from forklift dealers and fleet operators.
5. ITA and other industry groups argued that a provision prohibiting end-users from purchasing a diesel forklift to replace an LSI truck was illegal because it in effect regulated diesel forklift emissions—something the federal Clean Air Act prohibits states from doing.
At the June 27 board meeting, meanwhile, fleet operators said the rule would add excessive cost because two to three high-priced electrics would be needed to replace each LSI model eliminated. They also questioned the feasibility of providing battery charging infrastructure on construction sites and in agricultural fields, and whether utilities will be able to meet demand for increased capacity. Agriculture and small-business representatives asked for more generous caps on the percentage of trucks that must be replaced by the first compliance deadline, or for caps to apply to every compliance deadline, not just the first one.
Providers of propane fuel—most of them family-owned small and medium-sized companies—were vocal, well-organized, and passionate. They warned of job losses and potentially having to close their businesses altogether. They reiterated their longstanding argument that propane is a low-emission fuel, and therefore propane-powered forklifts should be considered “part of the solution, not the problem.” 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 estimates of the number of forklifts and businesses that would be affected—as well as its estimates of the costs of adding electrical infrastructure and replacing existing equipment—are too low. The group is instead supporting an alternative proposal that it says will meet the state’s air-quality goals with less disruption and expense.
CARB RESPONDS
During the public hearing, CARB’s staff pushed back at some of those criticisms. First, they said, the propane industry’s estimate of the number of affected forklifts relies on an incorrect methodology and is much too high. Staffers and two of the board members also said that, in their view, enough high-performance, battery-powered forklifts are now on the market that replacements are technically feasible for most applications. And they calculated that over the long term, the total cost of ownership for electric models will be lower than for their lower-priced IC counterparts.
CARB staff further reminded attendees that the exemptions and deadline extensions built into the final regulation were designed to address some of the very concerns being raised in the meeting. While that is true, nobody got everything they asked for. For example, CARB agreed that dealers could sell MY 2025 forklifts through Dec. 31, 2026, but it rejected ITA’s “fleet average” concept and denied ITA’s request to exclude Class IV trucks with capacities over 12,000 pounds. The agency dropped its prohibition against replacing LSI trucks with diesel-powered models but retained a requirement that fleet operators and rental agencies report that activity.
GET READY FOR THE FUTURE
The approved regulation will now move through state and then federal administrative and legal checks. Because the regulation relates to emissions from off-road vehicles, which are 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 is likely, the timing is uncertain—meaning it’s possible the regulation could become effective but not yet enforceable.
Once the regulation is in force, almost everyone who touches a forklift in California will be affected in some way. Many fleet operators’ costs, and potentially their productivity, will change as they replace their LSI forklifts with a larger number of electrics and retrain their employees on the new equipment. The small and medium-sized businesses that make up much of the propane service industry may have to find new markets to replace forklift customers. Battery makers and distributors will profit from increased demand for their products.
Industrial truck manufacturers and dealers, meanwhile, will need to prepare for a decline in the number of LSI trucks sold and concurrent growth in demand for ZE trucks. While there are bound to be some costly burdens—they might, for example, have to move inventory out of California, revise the product mix on production lines and in showrooms, and retrain employees—they say they are up to the challenge.
One such company is Mitsubishi Logisnext Americas, which encompasses five brands serving a wide range of applications: Mitsubishi forklift trucks, Cat lift trucks, Rocla AGV Solutions, UniCarriers Forklifts, and Jungheinrichwarehouse and automation products. Some of those brands will be impacted more than others. Mitsubishi and Cat, for instance, are widely known for their heavy-duty, IC engine models favored by industries like construction, lumber, and manufacturing. Both brands have developed rugged, heavy-duty electrics that are already in service. “We have worked closely with our Cat lift truck and Mitsubishi forklift truck customers to transition their fleets to electric trucks,” says Mike Brown, director of energy solutions. “While the applications they serve and the loads that they are handling may not be changing, these customers do need to contend with significant changes in how they power their fleets.”
Brown expressed confidence that zero-emission equipment will increasingly be able to handle difficult jobs. “Options do exist in the market and will continue to expand to include features and performance historically reserved only for engine-powered trucks,” he notes, “but it will take some time before the industry can meet the full range of requirements for these tougher applications.” As part of that evolution, forklift providers, customers, and utilities will have to work together to ensure sufficient power capacity is available when and where needed, he adds.
On the dealer side, there’s Raymond West, which operates Raymond Corp. Solutions and Support Centers in California and several other Western states plus Alaska. Vice President of Sales Juan Flores believes the new regulation could have a “very positive” sales and revenue impact in California, especially for Class I electrics.
Raymond West sells and services electric forklifts exclusively, but it currently supports the conveyors, racking, and automated systems for some customers that have LSI trucks in their fleets. Flores says his company is well-positioned to help them make a successful transition to ZE forklifts. “We … can analyze current fuel consumption and then simulate the electric equipment fuel sources that support the application’s energy requirements,” he says. Power studies can generate the data needed to make decisions about which path to take. A dealer, he continues, may be able to demonstrate that the total cost for electrics and associated technology, combined with the reduction in equipment maintenance, is actually lower than for LSI forklifts. And dealers can go “beyond the forklift,” such as by recommending renewable energy sources in the warehouse to mitigate any increased demand on the grid or by helping eligible customers take advantage of carbon and energy credits.
Implementation of CARB’s forklift mandate is just a couple years away. For fleet managers wondering how to comply without breaking the bank, collaborating now with forklift dealers and OEMs who can help them understand the regulations, plan for change, and manage their fleets for compliance may be the smartest move they can make.
Gartner, Inc.