Hydrogen Laws and Incentives in California

The list below contains summaries of all California laws and incentives related to hydrogen.

State Incentives

Advanced Transportation Tax Exclusion

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides a sales and use tax exclusion for qualified manufacturers of advanced transportation products, components, or systems that reduce pollution and energy use and promote economic development. Incentives are available until December 31, 2020. For more information, including application materials, see the CAEATFA Sales and Use Tax Exclusion Program website. (Reference California Public Resources Code 26000-26017)

Alternative Fuel Vehicle (AFV) Technical Training - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District (SJVAPCD) administers the Alternative Fuel Vehicle (AFV) Mechanic Training Program, which provides incentives to educate personnel on the mechanics, operation safety, and maintenance of AFVs, fueling stations, and tools involved in the implementation of alternative fuel technologies. For more information, see the AFV Mechanic Training Component website.

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Grants

The Motor Vehicle Registration Fee Program (Program) provides funding for projects that reduce air pollution from on- and off-road vehicles. Eligible projects include purchasing AFVs and developing alternative fueling infrastructure. Contact local air districts and see the Program website for more information about available grant funding and distribution from the Program. (Reference California Health and Safety Code 44220 (b))

Alternative Fuel and Advanced Vehicle Rebate - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District (SJVAPCD) administers the Drive Clean! Rebate Program, which provides rebates for the purchase or lease of eligible new vehicles, including qualified natural gas, hydrogen fuel cell, propane, battery electric, neighborhood electric, and plug-in electric vehicles, and zero emission motorcycles. The program offers rebates of up to $3,000, which are available on a first-come, first-served basis for residents and businesses located in the SJVAPCD. For more information, including a list of eligible vehicles and other requirements, see the SJVAPCD Drive Clean! Rebate Program website.

Alternative Fuel and Vehicle Incentives

The California Energy Commission (CEC) administers the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) to provide financial incentives for businesses, vehicle and technology manufacturers, workforce training partners, fleet owners, consumers, and academic institutions with the goal of developing and deploying alternative and renewable fuels and advanced transportation technologies. The CEC must prepare and adopt an annual Investment Plan for the ARFVTP to establish funding priorities and opportunities that reflect program goals and to describe how program funding will complement other public and private investments. Funded projects include:

  • Commercial alternative fuel vehicle (AFV) demonstrations and deployment;
  • Alternative and renewable fuel production;
  • Research and development of alternative and renewable fuels and innovative technologies;
  • AFV manufacturing;
  • Workforce training; and
  • Public education, outreach, and promotion.
The program will be available until January 1, 2024. For more information, see the ARFVTP website. (Reference California Health and Safety Code 44270-44274.7 and California Code of Regulations, Title 13, Chapter 8.1)

Clean Vehicle Rebate - El Dorado County

The El Dorado County Air Quality Management District (AQMD) offers rebates of up to $1,000 to residents toward the purchase or lease of a new zero emission vehicle or partial zero emission vehicle, as defined by the California Air Resources Board. To qualify, vehicles must be owned or leased for at least three years within El Dorado County. For more information, see the AQMD Grants and Incentives website.

Employer Invested Emissions Reduction Funding - South Coast

The South Coast Air Quality Management District (SCAQMD) administers the Air Quality Investment Program (AQIP). AQIP provides funding to allow employers within SCAQMD's jurisdiction to make annual investments into an administered fund to meet employers' emissions reduction targets. The revenues collected are used to fund alternative mobile source emissions and trip reduction programs, including alternative fuel vehicle projects, on an on-going basis. Programs such as low emission, alternative fuel, or zero emission vehicle procurement and old vehicle scrapping may be considered for funding. For more information, including current requests for proposals and funding opportunities, see the AQIP website.

Point of Contact
Vasken Yardemian
Program Supervisor
South Coast Air Quality Management District
Phone: (909) 396-3296
vyardemian@aqmd.gov
http://www.aqmd.gov/home/programs/business/business-detail?title=air-quality-investment-program

Heavy-Duty Truck Emission Reduction Grants - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District (SJVAPCD) administers the Truck Replacement Program, which provides funding for fleets to replace old vehicles with lower emitting vehicles or to purchase new zero emission, hybrid, or low oxides of nitrogen (NOx) vehicles. Funding is available for the following projects:

  • Replacement of model year (MY) 2009 or older diesel trucks with new trucks that meet or exceed the 2010 NOx emissions standard;
  • Replacement of MY 2010 or newer trucks with new zero emission, hybrid, or low NOx trucks; and
  • Purchase of new zero emission, hybrid, or low NOx trucks.
Incentive amounts vary by weight class and fuel type. Fleets may receive up to 35% of the vehicle cost for new diesel trucks. To qualify, eligible trucks for replacement must be garaged in the SJVAPCD and have operated at least 75% of the time in California and 50% of the time in the SJVAPCD for the previous two years. New replacement trucks must be operated in California 90% to 100% of the time and within the SJVAPCD 50% of the time. For more information, including application requirements, see the SJVAPCD Truck Replacement Program website.

High Occupancy Vehicle (HOV) and High Occupancy Toll (HOT) Lane Exemption

Compressed natural gas, hydrogen, electric, and plug-in hybrid electric vehicles meeting specified California and federal emissions standards and affixed with a California Department of Motor Vehicles (DMV) Clean Air Vehicle sticker may use HOV lanes regardless of the number of occupants in the vehicle. DMV issues Red Clean Air Vehicle stickers to applicants that have not already been issued a White or Green Clean Air Vehicle sticker, with the exception of the instances mentioned below. Stickers are valid through the following dates:

  • Stickers issued for Model Year 2004 or earlier vehicles, regardless of the issue date, expire January 1, 2019;
  • Stickers issued before March 1, 2018, expire January 1, 2019;
  • Stickers issued between March 1, 2018, and January 1, 2019, expire January 1, 2022;
  • Stickers issued on or after March 1, 2018, for a vehicle that had previously been issued a sticker between January 1, 2017, and March 1, 2018, expire January 1, 2022; and
  • Stickers issued on or after January 1, 2019, expire January 1, 2023.
DMV may issue stickers on or after January 1, 2020, only for applicants that have a household income at or below 80% of the state median income, which will expire January 1, 2024. The California Department of Transportation must publish a report between January 1, 2023, and June 1, 2023, detailing the number of stickers issued under this program.

Vehicles with stickers are also eligible for reduced rates on or exemptions from toll charges imposed on HOT lanes. For more information and restrictions, including a list of qualifying vehicles, see the California Air Resources Board Carpool Lane Use Stickers website.

(Reference Senate Bill 957, 2018, and California Vehicle Code 5205.5 and 21655.9)

Plug-In Hybrid and Zero Emission Light-Duty Vehicle Rebates

The Clean Vehicle Rebate Project (CVRP) offers rebates for the purchase or lease of qualified vehicles. Qualified vehicles are light-duty zero emission vehicles and plug-in hybrid electric vehicles (PHEVs) the California Air Resources Board (ARB) has approved or certified. The rebates are for up to $5,000 for fuel cell electric vehicles (FCEVs), $2,500 for battery electric vehicles, $1,500 for PHEVs, and $900 for zero emission motorcycles. Rebates are available on a first-come, first-served basis to individuals, business owners, and government entities in California that purchase or lease new eligible vehicles. Residents of San Diego County may be eligible for a preapproved rebate through the CVRP Rebate Now pilot. Manufacturers must apply to ARB to have their vehicles included in the CVRP.

Individuals are eligible for the rebate based on gross annual income, as stated on the individual's federal tax return. Individuals with a gross annual income above the following thresholds are only eligible for rebates for FCEVs:

  • $150,000 for single filers
  • $204,000 for head-of-household filers
  • $300,000 for joint filers
For individuals with low and moderate household incomes of less than or equal to 300% of the federal poverty level, rebates are increased by $2,000, for a total rebate amount of up to $7,000. Increased rebates are available for ARB-approved FCEVs, PHEVs, and battery electric vehicles. ARB must provide outreach to low income households and communities to raise awareness about CVRP. Through January 1, 2022, ARB must prioritize rebate payments for low income applicants.

ARB determines annual funding amounts for the CVRP, which is expected to be effective through 2023. ARB must submit a report to the State Legislature on the environmental and economic impacts of the CVRP by December 31, 2018. For more information, including information on income verification, a list of eligible vehicles, and instructions on how to apply, see the CVRP website.

(Reference Assembly Bill 2885, 2018, and California Health and Safety Code 44274 and 44258)

Technology Advancement Funding - South Coast

The South Coast Air Quality Management District's (SCAQMD) Clean Fuels Program provides funding for research, development, demonstration, and deployment projects that are expected to help accelerate the commercialization of advanced low emission transportation technologies. Eligible projects include powertrains and energy storage or conversion devices (e.g., fuel cells and batteries), and implementation of clean fuels, including the necessary infrastructure. Qualified clean fuels include, but are not limited to, natural gas, propane, and hydrogen. Projects are selected via specific requests for proposals on an as-needed basis or through unsolicited proposals. For more information, see the SCAQMD Research, Development, and Demonstration website.

Zero and Near-Zero Emission Vehicle Weight Exemption

Zero and near-zero emission vehicles may exceed the state's gross vehicle weight limits by an amount equal to the difference of the weight of the near-zero emission or zero emission powertrain and the weight of a comparable diesel tank and fueling system, up to 2,000 pounds. A zero emission vehicle is defined as a vehicle that produces no criteria pollutant, toxic air contaminant, or greenhouse gas emissions when stationary or operating. A near-zero emission vehicle is a vehicle that uses zero emission technologies, uses technologies that provide a pathway to zero emission operations, or incorporates other technologies that significantly reduce vehicle emissions. (Reference Assembly Bill 2061, 2018, California Business and Professions Code 12725, California Vehicle Code 3551, and California Health and Safety Code 44258)

Laws and Regulations

Alternative Fuel Vehicle (AFV) Parking Incentive Programs

The California Department of General Services (DGS) and California Department of Transportation (DOT) must develop and implement AFV parking incentive programs in public parking facilities operated by DGS with 50 or more parking spaces and park-and-ride lots owned and operated by DOT. The incentives must provide meaningful and tangible benefits to drivers, such as preferential spaces, reduced fees, and fueling infrastructure. Fueling infrastructure built at park-and-ride lots is not subject to restricted use by those using bicycles, public transit, or ridesharing. (Reference California Public Resources Code 25722.9)

Alternative Fuel and Plug-in Hybrid Electric Vehicle Retrofit Regulations

Converting a vehicle to operate on an alternative fuel in lieu of the original gasoline or diesel fuel is prohibited unless the California Air Resources Board (ARB) has evaluated and certified the retrofit system. ARB will issue certification to the manufacturer of the system in the form of an Executive Order once the manufacturer demonstrates compliance with the emissions, warranty, and durability requirements. A manufacturer is defined as a person or company who manufactures or assembles an alternative fuel retrofit system for sale in California; this definition does not include individuals wishing to convert vehicles for personal use. Individuals interested in converting their vehicles to operate on an alternative fuel must ensure that the alternative fuel retrofit systems used for their vehicles have been ARB certified. For more information, see the ARB Alternative Fuel Retrofit System website.

A hybrid electric vehicle that is Model Year 2000 or newer and is a passenger car, light-duty truck, or medium-duty vehicle may be converted to incorporate off-vehicle charging capability if the manufacturer demonstrates compliance with emissions, warranty, and durability requirements. ARB issues certification to the manufacturer and the vehicle must meet California emissions standards for the model year of the original vehicle.

(Reference California Code of Regulations Title 13, Section 2030-2032, and California Vehicle Code 27156)

Alternative Fuel and Vehicle Policy Development

The California Energy Commission (CEC) must prepare and submit an Integrated Energy Policy Report (IEPR) to the governor on a biannual basis. The IEPR provides an overview of major energy trends and issues facing the state, including those related to transportation fuels, technologies, and infrastructure. The IEPR also examines potential effects of alternative fuels use, vehicle efficiency improvements, and shifts in transportation modes on public health and safety, the economy, resources, the environment, and energy security. The IEPR's primary purpose is to develop energy policies that conserve resources, protect the environment, ensure energy reliability, enhance the state's economy, and protect public health and safety. For the current IEPR, see the CEC California's Energy Policy website.

As of November 1, 2015, and every four years thereafter, the CEC must also include in the IEPR strategies to maximize the benefits of natural gas in various sectors. This includes the use of natural gas as a transportation fuel. (Reference California Public Resources Code 25302 and 25303.5)

Establishment of Zero and Near-Zero Emission Vehicle Component Rebates

The California Air Resources Board (ARB) will establish the Zero Emission Assurance Project (ZAP) to offer rebates for the replacement of a battery, fuel cell, or other related vehicle component for eligible used zero and near-zero emission vehicles. Rebates will be limited to one per vehicle. By January 1, 2024, ARB must publish a report to the legislature detailing the number of rebates awarded, the emissions benefits of the ZAP, and the impacts of the ZAP on low-income consumer decisions to purchase zero and near-zero emissions vehicles. A zero emission vehicle is defined as a vehicle that produces no criteria pollutant, toxic air contaminant, or greenhouse gas emissions when stationary or operating. A near-zero emission vehicle is a vehicle that uses zero emission technologies, uses technologies that provide a pathway to zero emission operations, or incorporates other technologies that significantly reduce vehicle emissions. Rebates will be available through July 31, 2025. (Reference Assembly Bill 193, 2018, and California Health and Safety Code 44274.9)

Establishment of a Zero Emission Medium- and Heavy-Duty Vehicle Program

The California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program (Program) will provide funding for development, demonstration, pre-commercial pilot, and early commercial implementation projects for zero and near-zero emission trucks, buses, and off-road vehicles and equipment. Eligible projects include, but are not limited to, the following:

  • Technology development, demonstration, pre-commercial pilots, and early commercial implementation projects for zero and near-zero emission truck technology;
  • Zero and near-zero emission bus technology development, demonstration, pre-commercial pilots, and early commercial deployments, including pilots of multiple vehicles at one site or region;
  • Purchase incentives for commercially available zero and near-zero emission truck, bus, and off-road vehicle and equipment technologies and fueling infrastructure; and
  • Projects that support greater commercial motor vehicle and equipment freight efficiency and greenhouse gas emissions reductions, including autonomous vehicles, grid integration technology, and charge management solutions.
Remanufactured and retrofitted vehicles meeting warranty and emissions requirements may also qualify for funding. The Program is expected to provide $12 million to $20 million in funding annually through December 31, 2020. At least 20% of allocated funds must go towards early commercial deployment of eligible vehicles and equipment. The California Air Resources Board and the State Energy Resources Conservation and Development Commission will develop and administer the Program.

(Reference Assembly Bill 2145, 2018, and California Health and Safety Code 39719.2)

Fleet Emissions Reduction Requirements - South Coast

The South Coast Air Quality Management District (SCAQMD) requires government fleets and private contractors under contract with public entities to purchase non-diesel lower emission and alternative fuel vehicles. The rule applies to transit bus, school bus, refuse hauler, and other vehicle fleets of at least 15 vehicles that operate in Los Angeles, San Bernardino, Riverside, and Orange counties. (Reference SCAQMD Rules 1186.1 and 1191-1196)

Fleet Vehicle Procurement Requirements

When awarding a vehicle procurement contract, every city, county, and special district, including school and community college districts, may require that 75% of the passenger cars and/or light-duty trucks acquired be energy-efficient vehicles. By definition, this includes hybrid electric vehicles and alternative fuel vehicles that meet California's advanced technology partial zero emission vehicle (AT PZEV) standards. Vehicle procurement contract evaluations may consider fuel economy and life cycle factors for scoring purposes. (Reference California Public Resources Code 25725-25726)

Freight Efficiency Action Plan

The California State Transportation Agency, the California Environmental Protection Agency, the Natural Resources Agency, and relevant state departments, including the California Air Resources Board, the California Department of Transportation, the California Energy Commission, and the Governor's Office of Business and Economic Development, implemented the California Sustainable Freight Action Plan (Plan), which establishes targets to improve freight efficiency and transition to zero emission technologies. The Plan identifies state policies, programs, and investments to achieve the following targets:

  • Improve freight system efficiency by 25% by 2030; and
  • Deploy over 100,000 zero emission freight vehicles and associated equipment, maximizing the number of vehicles powered by renewable energy, by 2030.
The involved parties have also initiated corridor-level freight pilot projects to integrate advanced technologies, alternative fuels, freight and fuel infrastructure, and local economic development opportunities based on the Plan. For more information, see the Plan website. (Reference Executive Order B-32-15, 2015)

Hydrogen Fuel Specifications

The California Department of Food and Agriculture, Division of Measurement Standards (DMS) requires that hydrogen fuel used in internal combustion engines and fuel cells must meet the SAE International J2719 standard for hydrogen fuel quality. For more information, see the DMS Hydrogen Fuel website. (Reference California Code of Regulations Title 4, Section 4180-4181)

Hydrogen Fueling Station Evaluation

The California Air Resources Board (ARB) may not enforce any element of regulations that would require a supplier to construct, operate, or provide funding to construct or operate a publicly available hydrogen fueling station.

Annually, ARB must aggregate and share the number of hydrogen vehicles that manufacturers project will be sold or leased over the next three years and the total number of hydrogen vehicle registered in the state. Based on this information, ARB must evaluate the need for additional publicly available hydrogen fueling stations for the subsequent three years and report findings to the State Energy Resources Conservation and Development Commission (Commission) including the of number of stations, geographic areas where stations are needed, and minimum operating standards, such as number of dispensers and filling pressures.

The Commission will allocate up to $20 million per year to fund the number of stations deemed necessary based on ARB's evaluation and reports. The Commission may stop funding new stations if it determines, in consultation with ARB, that the private sector is developing publicly available stations without the need for government support.

The Commission and ARB must annually issue a report on progress toward establishing a hydrogen fueling station network that meets the needs of vehicles being used in the state. The review will determine the remaining cost and time required to establish a network of 100 publicly available hydrogen fueling stations and whether funding from the Alternative and Renewable Fuel and Vehicle Technology Program is necessary to achieve this goal. For more information see ARB's Hydrogen Transportation Initiatives website.

(Reference California Health and Safety Code 43018.9)

Low Carbon Fuel Standard

California's Low Carbon Fuel Standard (LCFS) Program requires a reduction in the carbon intensity of transportation fuels that are sold, supplied, or offered for sale in the state by a minimum of 10% by 2020. The California Air Resources Board (ARB) regulations require transportation fuel producers and importers to meet specified average carbon intensity requirements for fuel. In the regulations, carbon intensity reductions are based on reformulated gasoline mixed with 10% corn-derived ethanol and low-sulfur diesel fuel. Propane is exempt from LCFS requirements, as are non-biomass-based alternative fuels that are supplied in California for use in transportation at an aggregated volume of less than 3.6 million gasoline gallon equivalents per year. Other exemptions apply for transportation fuel used in specific applications. The LCFS Program allows producers and importers to generate, acquire, transfer, bank, borrow, and trade credits. Fuel producers and importers regulated under the LCFS must meet quarterly and annual reporting requirements. For more information, see the LCFS Program website. (Reference California Code of Regulations Title 17, Section 95480-95490; Executive Order S-01-07, 2007; and California Health and Safety Code 38500-38599)

Low Emission Vehicle (LEV) Standards

California's LEV II exhaust emissions standards apply to Model Year (MY) 2004 and subsequent model year passenger cars, light-duty trucks, and medium-duty passenger vehicles meeting specified exhaust standards. The LEV II standards represent the maximum exhaust emissions for LEVs, Ultra Low Emission Vehicles, and Super Ultra Low Emission Vehicles, including flexible fuel, bi-fuel, and dual-fuel vehicles when operating on an alternative fuel. MY 2009 and subsequent model year passenger cars, light-duty trucks, and medium-duty passenger vehicles must meet specified fleet average greenhouse gas (GHG) exhaust emissions requirements. Each manufacturer must comply with these fleet average GHG requirements, which are based on California Air Resources Board (ARB) calculations. Bi-fuel, flexible fuel, dual-fuel, and grid-connected hybrid electric vehicles may be eligible for an alternative compliance method.

In December 2012, ARB finalized regulatory requirements, referred to as LEV III, which allow vehicle manufacturer compliance with the U.S. Environmental Protection Agency's GHG requirements for MY 2017-2025 to serve as compliance with California's adopted GHG emissions requirements for those same model years. See the LEVII and LEV III Program websites for more information. (Reference California Code of Regulations Title 13, Section 1961-1961.3)

Mobile Source Emissions Reduction Requirements

Through its Mobile Sources Program, the California Air Resources Board (ARB) has developed programs and policies to reduce emissions from on-road heavy-duty diesel vehicles through the installation of verified diesel emission control strategies (VDECS) and vehicle replacements.

The on-road heavy-duty diesel vehicle rule (i.e., truck and bus regulation) requires the retrofit and replacement of nearly all privately owned vehicles operated in California with a gross vehicle weight rating (GVWR) greater than 14,000 pounds (lbs.). School buses owned by private and public entities and federal government owned vehicles are also included in the scope of the rule. By January 1, 2023, nearly all vehicles must have engines certified to the 2010 engine standard or equivalent. The drayage truck rule regulates heavy-duty diesel-fueled vehicles that transport cargo to and from California's ports and intermodal rail facilities. The rule requires that certain drayage trucks be equipped with VDECS and that all applicable vehicles have engines certified to the 2007 emissions standards. By January 1, 2023, all applicable vehicles must have engines certified to 2010 standards. The public transit agency fleet rule regulates public transit fleets and sets emissions reduction standards for new transit vehicles. The solid waste collection vehicle rule regulates solid waste collection vehicles with a gross vehicle weight rating of 14,000 lbs. or more that operate on diesel fuel, have 1960 through 2006 engine models, and collect waste for a fee. The fleet rule for public agencies and utilities requires fleets to install VDECS on vehicles or purchase vehicles that run on alternative fuels or use advanced technologies to achieve emissions requirements by specified implementation dates.

A summary of the requirements for diesel truck and equipment owners can be found in the ARB Multi-Rule Summary fact sheet. (Reference California Code of Regulations Title 13, 2021-2027)

Point of Contact
Diesel Hotline
California Air Resources Board
Phone: (866) 6DIESEL (634-3735)
8666diesel@arb.ca.gov

State Agency Low Carbon Fuel Use Requirement

At least 3% of the aggregate amount of bulk transportation fuel purchased by the state government must be from very low carbon transportation fuel sources. The required amount of very low carbon transportation fuel purchased will increase by 1% annually until January 1, 2024. Some exemptions may apply, as determined by the California Department of General Services (DGS). Very low carbon fuel is defined as a transportation fuel having no greater than 40% of the carbon intensity of the closest comparable petroleum fuel for that year, as measured by the methodology in California Code of Regulations Title 17, Sections 95480-95486. DGS will submit an annual progress report to the California Legislature. (Reference California Health and Safety Code 43870, and California Code of Regulations Title 17, Section 95480-95486)

State Transportation Plan

The California Department of Transportation (Caltrans) must update the California Transportation Plan (Plan) by December 31, 2020, and every five years thereafter. The Plan must address how the state will achieve maximum feasible emissions reductions, taking into consideration the use of alternative fuels, new vehicle technology, and tailpipe emissions reductions. Caltrans must consult and coordinate with related state agencies, air quality management districts, public transit operators, and regional transportation planning agencies. Caltrans must also provide an opportunity for general public input. Caltrans must submit a final draft of the Plan to the legislature and governor. A copy of the 2016 report is available on the Caltrans website. Caltrans must also review the Plan and prepare a report for the legislature and governor that includes actionable, programmatic transportation system improvement recommendations every five years. (Reference California Government Code 65070-65073)

Support for Zero Emission and Autonomous Vehicle Infrastructure

Cities and counties that receive funding from the Road Maintenance and Rehabilitation Program are encouraged to use funds towards advanced transportation technologies and communication systems, including, but not limited to, zero emission vehicle fueling infrastructure and infrastructure-to-vehicle communications for autonomous vehicles. (Reference California Streets and Highways Code 2030)

Vehicle Acquisition and Petroleum Reduction Requirements

The California Department of General Services (DGS) is responsible for maintaining specifications and standards for passenger cars and light-duty trucks that are purchased or leased for state office, agency, and department use. These specifications include minimum vehicle emissions standards and encourage the purchase or lease of fuel-efficient and alternative fuel vehicles (AFVs). Specifically, DGS must reduce or displace the fleet's consumption of petroleum products by 20% by January 1, 2020, as compared to the 2003 consumption level. Beginning in fiscal year 2024, DGS must also ensure that at least 50% of the light-duty vehicles purchased by the state are zero emission vehicles (ZEVs). Further, at least 15% of DGS' fleet of new vehicles with a gross vehicle weight rating of 19,000 pounds or more must be ZEVs by 2025, and at least 30% by 2030.

On an annual basis, DGS must compile information including, but not limited to, the number of AFVs and hybrid electric vehicles acquired, the locations of the alternative fuel pumps available for those vehicles, and the total amount of alternative fuels used. Vehicles the state owns or leases that are capable of operating on alternative fuel must operate on that fuel unless the alternative fuel is not available. DGS is also required to:

  • Take steps to transfer vehicles between agencies and departments to ensure that the most fuel-efficient vehicles are used and to eliminate the least fuel-efficient vehicles from the state's motor vehicle fleet;
  • Submit annual progress reports to the California Department of Finance, related legislative committees, and the general public via the DGS website;
  • Encourage other agencies to operate AFVs on the alternative fuel for which they are designed, to the extent feasible;
  • Encourage the development of commercial fueling infrastructure at or near state vehicle fueling or parking sites;
  • Work with other agencies to incentivize and promote state employee use of AFVs through preferential or reduced-cost parking, access to electric vehicle charging, or other means, to the extent feasible; and
  • Establish a more stringent fuel economy standard than the 2007 standard.

(Reference Executive Order S-14-09, 2009, and California Public Resources Code 25722.5-25722.11, and 25724)

Volkswagen Group of America's (VW) Zero Emission Vehicle (ZEV) Investment Plan

The California Air Resources Board (ARB) approved the VW California ZEV Investment Plan. As required by the October 2016 2.0-Liter Partial Consent Decree, VW must invest $800 million over ten years to support the increased adoption of ZEV technology in California. VW will submit a series of four 30-month cycle ZEV investment plans to ARB for approval. EPA has approved the Cycle 1 plan, covering Quarter 1, 2017, through Quarter 2, 2019. The Cycle 1 plan includes building a basic charging network, launching a multi-lingual public outreach and education campaign, and beginning ZEV access projects. ZEV infrastructure rollouts will be focused in six metropolitan areas: Fresno, Los Angeles, San Francisco, San Jose, San Diego, and Sacramento. VW has also designated Sacramento as the first "Green City," with the goal of offering residents a better quality of life through enhanced mobility and improved air quality.

On October 3, 2018, VW released its Cycle 2 plan, covering investments made from July 2019 through December 2021. Cycle 2 focuses on community charging in metropolitan and rural areas, the installation of direct current (DC) fast chargers on highways and regional routes, residential charging, infrastructure for electrified buses and shuttles, and charging for autonomous vehicles.

For more information, see the Electrify America Investment Plan website and ARB's Volkswagen Settlement website.

Zero Emission Vehicle (ZEV) Deployment Support

California joined Connecticut, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont in signing a memorandum of understanding (MOU) to support the deployment of ZEVs through involvement in a ZEV Program Implementation Task Force (Task Force). In May 2014, the Task Force published a ZEV Action Plan (Plan) identifying 11 priority actions to accomplish the goals of the MOU, including deploying at least 3.3 million ZEVs and adequate fueling infrastructure within the signatory states by 2025. The Plan also includes a research agenda to inform future actions. On an annual basis, each state must report on the number of registered ZEVs, the number of public electric vehicle supply equipment (EVSE) and hydrogen fueling stations, and available information regarding workplace fueling for ZEVs.

In June 2018, the Task Force published a new ZEV Action Plan for 2018-2021. Building on the 2014 Action Plan, the 2018 Action Plan makes recommendations for states and other key partners in five priority areas:

  • Raising consumer awareness and interest in electric vehicle technology;
  • Building out a reliable and convenient residential, workplace and public charging/fueling infrastructure network;
  • Continuing and improving access to consumer purchase and non-financial incentives;
  • Expanding public and private sector fleet adoption; and
  • Supporting dealership efforts to increase ZEV sales.

For more information, see the Multi-State ZEV Task Force website.

Zero Emission Vehicle (ZEV) Fee

Beginning July 1, 2020, ZEV owners must pay an annual road improvement fee of $100 upon vehicle registration or registration renewal for ZEVs model year 2020 and later. The California Department of Motor Vehicles will increase the fee annually to account for inflation, equal to the increase in the California Consumer Price Index for the prior year. (Reference California Vehicle Code 9250.6)

Zero Emission Vehicle (ZEV) Initiative

The California Air Resources Board's (ARB) Charge Ahead California Initiative was established to help place into service at least 1 million ZEVs and near-zero emission vehicles in California by January 1, 2023. In consultation with the State Energy Resources Conservation and Development Commission, ARB prepared a funding plan that includes a market and technology assessment, assessments of existing zero and near-zero emission funding programs, and programs that increase access to disadvantaged, low-income, and moderate-income communities and consumers. Potential programs under the initiative include those involving innovative financing, car sharing, charging infrastructure in multi-unit dwellings located in disadvantaged communities, public transit, and agricultural vanpool programs. The funding plan must be updated at least every three years through January 1, 2023. (Reference Assembly Bill 2006, 2018, and California Health and Safety Code 44258.4)

Zero Emission Vehicle (ZEV) Production Requirements

The California Air Resources Board (ARB) certifies new passenger cars, light-duty trucks, and medium-duty passenger vehicles as ZEVs if the vehicles produce zero exhaust emissions of any criteria pollutant (or precursor pollutant) under any and all possible operational modes and conditions. For manufacturers with annual sales greater than 60,000 vehicles, at least 14% of the vehicles they produce and deliver for sale in California must meet ZEV requirements for Model Years (MY) 2015 through 2017.

Manufacturers with annual sales between 4,501 and 60,000 vehicles may comply with the ZEV requirements through multiple alternative compliance options that include producing low emission vehicles and obtaining ZEV credits. Manufacturers with annual sales of 4,500 vehicles or less are not subject to this regulation.

ARB's emissions control program for MY 2017 through 2025 combines the control of smog, soot, and greenhouse gases (GHGs) and requirements for ZEVs into a single package of standards called Advanced Clean Cars. In December 2012, ARB finalized new regulatory requirements that allow vehicle manufacturer compliance with the U.S. Environmental Protection Agency's GHG requirements for MY 2017-2025 to serve as compliance with California's adopted GHG emissions requirements for those same model years.

The accounting procedures for MY 2018-2025 are based on a credit system as shown in the table below. The minimum ZEV requirement for each manufacturer includes the percentage of passenger cars and light-duty trucks produced by the manufacturer and delivered for sale in California. The regulation also includes opportunities for compliance with transitional zero emission vehicles (TZEVs), which must demonstrate certain exhaust emissions standards, evaporative emissions standards, on-board diagnostic requirements, and extended warranties.

MYZEV Requirement
20184.5%
20197%
20209.5%
202112%
202214.5%
202317%
202419.5%
2025 and later22%

For more information, see the ZEV Program website. (Reference California Code of Regulations Title 13, Section 1962 -1962.2)

Zero Emission Vehicle (ZEV) Programs Report

The California Air Resources Board (ARB), in partnership with its stakeholders, must complete a report that reviews each of ARB's ZEV-related programs by July 1, 2019. Specifically, the report must include an analysis of the greenhouse gas and air quality goals of each ZEV program, the progress of each program towards meeting its goals, and a cost-benefit analysis of each program. In this report, ARB must also propose recommendations for improvements to these programs and on how to encourage the cost-effective deployment of ZEVs in fleets across the state. (Reference California Health and Safety Code 43018.8)

Zero Emission Vehicle (ZEV) Promotion Plan

All California state agencies must support and facilitate the rapid commercialization of ZEVs in California. In particular, the Air Resources Board, Energy Commission (CEC), Public Utilities Commission, and other relevant state agencies must work with the private sector to establish benchmarks to achieve targets for ZEV commercialization and deployment. These targets include:

  • By 2020, the state will have established adequate infrastructure to support one million ZEVs;
  • By 2025, there will be 1.5 million ZEVs on the road in California and clean, efficient vehicles will displace 1.5 billion gallons of petroleum fuels annually;
  • By 2025, there will be 200 hydrogen fueling stations and 250,000 plug-in electric vehicle (PEV) chargers, including 10,000 direct current fast chargers, in California;
  • By 2030, there will be 5 million ZEVs on the road in California; and
  • By 2050, greenhouse gas emissions from the transportation sector will be 80% less than 1990 levels.
State agencies must also work with their stakeholders to accomplish the following:
  • Update the 2016 ZEV Action plan, with a focus on low income and disadvantaged communities;
  • Recommend actions to increase the deployment of ZEV infrastructure through the Low Carbon Fuel Standard;
  • Support and recommend policies that will facilitate the installation of PEV infrastructure in homes and businesses; and
  • Ensure PEV charging and hydrogen fueling are affordable and accessible to all drivers.
The ZEV promotion plan additionally directs the state fleet to increase the number of ZEVs in the fleet through gradual vehicle replacement. By 2020, ZEVs should make up at least 25% of the fleet's light-duty vehicles. Vehicles with special performance requirements necessary for public safety and welfare are exempt from this requirement. For more information about the plan, see CEC's ZEVs and Infrastructure Update.

(Reference Executive Orders B-48, 2018, and B-16, 2012)

Utility/Private Incentives

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Insurance Discount

Farmers Insurance provides a discount of up to 10% on all major insurance coverage for HEV and AFV owners. To qualify, the automobile must be a dedicated AFV using ethanol, compressed natural gas, propane, or electricity, or be a HEV. A complete vehicle identification number is required to validate vehicle eligibility. For more information, see the Farmers Insurance California Insurance Discounts website.

More Laws and Incentives

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