Gov. Gavin Newsom has issued a controversial sales ban on cars and trucks powered by fossil fuels. It is also forcing food processing facilities to convert propane forklifts to electric models. To implement the order, the Air Resources Board (CARB) is drafting a ZEV forklift regulation, and agricultural trade groups are racing to ease restrictions to account for infrastructure and energy costs.

Newsom’s executive order in 2020 bans the sale of gas-powered cars by 2035 and medium- and heavy-duty diesel trucks by 2045. The order also sets a course for the state to transition to 100% zero-emission off-road vehicles and equipment by 2035—where feasible. California has also set a goal of reaching statewide carbon neutrality by 2045, while slashing climate emissions 40% and converting 60% of the energy sector to renewable sources by 2030.

Along with reducing greenhouse gas emissions, the mandate would cut emissions of nitrogen oxide (NOx), fine particulate matter (PM 2.5) and reactive organic gas in both the San Joaquin Valley and the South Coast, regions that have long struggled with the nation’s worst air quality. According to CARB, off-road equipment is a significant contributor to the air pollution.

Yet the transition would cost California’s industries more than $9 billion to implement.

CARB has hosted four public workshops to inform the regulatory language and assess the economic impacts of the transition. Staff estimate nearly 80,000 Class I and II battery-electric forklifts are already operating in the state, mostly in indoor operations and with lower-lift capacities. Warehouses and other operations have deployed more than 25,000 hydrogen fuel cell forklifts nationwide, which offer a quicker refueling option.

Priscilla RodriguezWAPA Assistant Vice President Priscilla Rodriguez

CARB is targeting about 95,000 Class IV and V forklifts powered by propane or gasoline, with lift capacities up to 12,000 pounds. The draft concepts for the regulation would exclude rough terrain forklifts. The regulation would prohibit fleet operators from purchasing new propane forklifts by 2026, while phasing out older forklifts starting in 2028. Forklift rental agencies are subject to the same schedule.

Staff amended the proposal to allow for those operators to still purchase used versions with model years extending up to 2025. They also added a three-year delay for agricultural operations to begin the phaseout. The proposal includes deadline extensions that would trigger in response to delays in manufacturing electric forklifts or upgrading the electrical grid or from feasibility issues. Staff are also considering a temporary low-use exemption for facilities using forklifts less than 200 hours a year.

The Western Agricultural Processors Association (WAPA), which also represents California cotton ginners and growers, has welcomed the added regulatory relief for agriculture, with the additional time and compliance extensions, and it has applauded the willingness of staff to understand the many industry issues at play.

“When we do these rulemakings, we’re very aware that we're imposing costs on business and it's a tradeoff,” said Kim Heroy-Rogalski, a CARB branch chief, during a recent workshop. “We're trying to strike the right balance between protecting public health and addressing climate change and impacting people's lives and jobs and businesses.”

WAPA remained skeptical over the potential added costs for tree nut hullers and shellers. CARB estimated a new forklift, battery and charger would cost a typical business $102,800 and the infrastructure installation would cost $3,650 per forklift.

“A lot of our membership—in rural areas more specifically—will have to have facility upgrades,” said WAPA Assistant Vice President Priscilla Rodriguez. “You're talking about hundreds of thousands to millions of dollars in facility upgrades to be able to support the charging infrastructure.”

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Other trade groups argued the staff estimate for installation costs was much lower than the actual expenses.

“Most of our operations are seasonal,” added Rodriguez. “They run three to four months out of the year, 24 hours a day.”

She argued they cannot replace each forklift with an electric version and maintain the same level of operations, since the additional charging time would require twice as many forklifts. Staff gathered the numbers from a report by the International Council on Clean Transportation, an environmental policy consulting firm.

“It was the best resource we had,” responded David Chen, a CARB section manager. “We do understand that infrastructure is highly variable in terms of the cost.”

Heroy-Rogalski noted that staff have had a series of “really helpful and enlightening” discussions with agricultural stakeholders who face steep costs for the upgrades.

“Not only would it be super expensive to upgrade to do the necessary charging, but sometimes they're getting told by their utility, ‘Oh, I can't even provide you the required power for three years or five years,’” she said. “We're trying to be really mindful of the fact that those situations do exist.”

Outside of the forklift rulemaking, the agency is working with utilities to address those problems, she added.

“We want to make sure that we structure the provisions of this regulation so we never put someone in an impossible situation where they can't get the charging setup,” she said.

Rodriguez and WAPA President Roger Isom wielded sharper criticism for the potential electric rates agriculture is confronting with electrification. The bulk of agricultural operations will fall under Pacific Gas & Electric rate tariffs that are higher than CARB’s 18 cents-per-kilowatt-hour estimate, and the public utilities giant is currently asking state regulators to grant a 45% general rate increase, according to Isom.

“We totally acknowledge that agricultural rates are often much higher than the average that we used,” said Heroy-Rogalski. “We will be taking that into account in our cost analysis.”

Staff heard frustrations that California businesses already face some of the nation’s strictest regulations and replacing functional equipment before the end of its useful lifespan while mandating infrastructure improvements at the same time would be “unconscionable” and foster an environment unfriendly to businesses.

“We get that California is heavily regulated. CARB is probably the most active air quality agency in the nation,” said Heroy-Rogalski. “The only way we're going to be able to address this current climate emergency is by transitioning how we power everything. And that's not going to be convenient or easy. But it's necessary for protecting civilization as we know it.”

Staff plan to finalize the regulation language this spring, with an impact analysis in April. They will host further workshops before board consideration in the fall.

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