Hydrogen Laws and Incentives in California
The list below contains summaries of all California laws and incentives related to hydrogen.
Laws and Regulations
Establishment of Zero Emission Vehicle (ZEV) and Near-ZEV Component Rebates
The California Air Resources Board (CARB) 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 ZEVs and near-ZEVs. A ZEV is defined as a vehicle that produces no criteria pollutant, toxic air contaminant, or greenhouse gas emissions when stationary or operating. A near-ZEV 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. CARB must offer ZAP rebates through July 31, 2025. For more information, see the CARB ZAP website.
(Reference California Health and Safety Code 44274.9)
Alternative Fuel Vehicle (AFV) Manufacturing Incentive Authorization
Cities and counties may establish a capital investment incentive program for qualified manufacturing facilities that manufacture fuels or components used in AFVs and related infrastructure. Each county or city that elects to establish a capital investment incentive program must notify the Governor’s Office of Business and Economic Development. Additional requirements apply.
(Reference Assembly Bill 2922, 2024)
Alternative Fuel Vehicle (AFV) Parking Incentive Programs
The California Department of General Services (DGS) and California Department of Transportation (Caltrans) 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 Caltrans. The incentives must provide meaningful and tangible benefits to drivers, such as preferential spaces, reduced fees, and fueling infrastructure.
(Reference California Public Resources Code 25722.9)
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. For more information, including grant funding and distribution, you may contact you local air districts or see the Program website for more information about available grant funding and distribution information.
(Reference California Health and Safety Code 44220 (b))
Alternative Fuel and 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 (CARB) has evaluated and certified the retrofit system. CARB 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 CARB certified. For more information, see the CARB Alternative Fuel Retrofit Systems 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. CARB 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 Infrastructure Assessment
Every three years, the California Council on Science and Technology must assess clean energy projects, including the deployment of, or upgrades to, alternative fueling infrastructure and low carbon fuels.
(Reference California Health and Safety Code 38592.1)
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.
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. For more information, see the 2023 Integrated Energy Policy Report.
(Reference California Public Resources Code 25302 and 25303.5)
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.
(Reference 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. This includes hybrid electric vehicles and alternative fuel vehicles that meet California’s advanced technology partial zero emission vehicle standards. Vehicle procurement contract evaluations may consider fuel economy and life cycle factors for scoring purposes.
(Reference California Public Resources Code 25725-25726)
Hydrogen Development Support
The California Air Resources Board (CARB), in collaboration with other state agencies, must complete an evaluation on the deployment, development, and use of hydrogen in the state. The evaluation must include:
- Policy recommendations regarding the use of hydrogen to help achieve state climate, energy, and clean air goals and overcome market barriers;
- Strategies that support hydrogen infrastructure for production, processing, delivery, storage and end-use applications;
- An assessment of different forms of hydrogen that can be used to achieve emissions reductions;
- An estimate of greenhouse gas emissions reductions and improvements in air quality through the deployment of hydrogen, including a cost-benefit analysis;
- Policy recommendations for permitting processes related to the transmission and distribution of hydrogen; and,
- An analysis of air pollution and other environmental impacts from hydrogen.
CARB must publish the evaluation by June 1, 2024. CARB must also model how hydrogen supports the decarbonization of the electric and transportation sectors and include the findings in the 2023 and 2025 Integrated Energy Policy Report.
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 (CARB) 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, CARB 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, CARB must evaluate the need for additional publicly available hydrogen fueling stations for the subsequent three years and report findings to the California Energy Commission (CEC) 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 CEC will allocate no less than 15% of the moneys appropriated by the Legislature from the Alternative and Renewable Fuel and Vehicle Technology Fund per year to fund the number of stations deemed necessary based on CARB’s evaluation and reports. The CEC may stop funding new stations if it determines, in consultation with CARB, that the private sector is developing publicly available stations without the need for government support.
The CEC and CARB must issue an annual report on progress toward establishing a hydrogen fueling station network that meets the needs of vehicles being used in the state. CARB may also design grants, incentives, loan programs, and other forms of financial assistance to assist in program implementation. For more information see CARB’s Hydrogen Fueling Infrastructure website and the CEC and CARB Joint Agency Report on Assembly Bill 8.
(Reference California Health and Safety Code 43018.9)
Hydrogen and Electric Vehicle (EV) Charger Local Permitting Policies
All cities and counties, including charter cities, must adopt an ordinance that creates an expedited and streamlined permitting process for EV chargers and hydrogen fueling stations. Cities and counties must approve applications to install EV chargers within five to ten business days, depending on the number of chargers proposed in the application. Applications will be approved after 20 to 40 business days, if the county or city does not approve the application, the building official does not deny the application, or the city or county does not submit an appeal. Each city or county must consult with the local fire department or district and the utility director to develop the ordinance, which must include a checklist of all requirements for EV chargers to be eligible for expedited review. A complete application that is consistent with the city or county ordinance must be approved, and entities submitting incomplete applications must be notified of the necessary required information to be granted expedited permit issuance. These provisions must be met by September 30, 2025, by cities and counties with populations above 250,000 residents. Cities and counties with populations less than 250,000 residents must meet these provisions by September 30, 2028.
(Reference California Government Code 65850.7 and 65850.71 and Assembly Bill 1418, 2024)
Light-Duty Zero Emission Vehicle (ZEV) Sales Requirement
All sales of new light-duty passenger vehicles in California must be ZEVs by 2035. ZEVs include battery-electric and fuel cell electric vehicles. The California Air Resources Board (CARB) will develop regulations related to in-state sales of new light-duty cars and trucks. CARB developed a ZEV Market Development Strategy to support these regulations and assess statewide ZEV infrastructure. The Strategy will be updated triennially. For more information, see the ZEV Market Deployment Strategy website.
(Reference Executive Order N-79-20)
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 through 2030. The California Air Resources Board regulations require transportation fuel producers and importers to meet specified average carbon intensity requirements for fuel. LCFS regulated fuels include natural gas, electricity, hydrogen, gasoline mixed with at least 10% corn-derived ethanol, biomass-based diesel, and propane. 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 are exempt from LCFS requirements. 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; 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 LEVs, and Super Ultra LEVs, 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 (CARB) calculations. Bi-fuel, flexible fuel, dual-fuel, and grid-connected hybrid electric vehicles may be eligible for an alternative compliance method when operating on gasoline.
In December 2012, CARB 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.
In November 2022, CARB approved LEV IV standards, which updates regulations for light- and medium-duty internal combustion engine vehicles by reducing allowable exhaust emissions and emissions caused by evaporation. LEV IV also changes the calculation procedure for new vehicle fleet-average emissions and prohibits zero emissions vehicles from being considered in fleet-average emissions calculations by MY 2029.
For more information, see the CARB LEV website for more information.
(Reference California Code of Regulations Title 13, Section 1961-1961.4)
Medium- and Heavy-Duty (MHD) Zero Emission Vehicle (ZEV) Deployment Support
California, Colorado, Connecticut, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington (signatory states) signed a memorandum of understanding (MOU) to support the deployment of MHD ZEVs through involvement in a Multi-State ZEV Task Force (Task Force).
In July 2022, the Task Force published a multi-state action plan to support electrification of MHD vehicles. The action plan includes strategies and recommendations to accomplish the goals of the MOU, including limiting all new MHD vehicle sales in the signatory states to ZEVs by 2050, accelerating the deployment of MHD ZEVs, and ensuring MHD ZEV deployment also benefits disadvantaged communities.
For more information, see the MHD ZEVs: Action Plan Development Process website.
Medium- and Heavy-Duty (MHD) Zero Emission Vehicle (ZEV) Requirement
The California Air Resources Board’s (ARB) Advanced Clean Truck Program requires all new MHD vehicles sold in California to be a ZEV by 2045. Zero-emission technologies include all-electric and fuel cell electric vehicles. Beginning in 2024, manufacturers seeking ARB certification for Class 2b through Class 8 chassis or complete vehicles with combustion engines will be required to sell zero-emission trucks as an increasing percentage of their annual California sales. Manufacturers must achieve the following annual sales percentages for medium- and heavy-duty ZEVs sold in California:
| ZEV Sales Percentages | |||
|---|---|---|---|
| Vehicle Model Year (MY) | Class 2b-3 | Class 4-8 | Class 7-8 Tractors |
| 2024 | 5% | 9% | 5% |
| 2025 | 7% | 11% | 7% |
| 2026 | 10% | 13% | 10% |
| 2027 | 15% | 20% | 15% |
| 2028 | 20% | 30% | 20% |
| 2029 | 25% | 40% | 25% |
| 2030 | 30% | 50% | 30% |
| 2031 | 35% | 55% | 35% |
| 2032 | 40% | 60% | 40% |
| 2033 | 45% | 65% | 40% |
| 2034 | 50% | 70% | 40% |
| 2035 and future years | 55% | 75% | 40% |
Additionally, entities with annual gross revenues greater than $50 million, fleet owners with 50 or more medium- and heavy-duty vehicles, and any California government or federal agency with one or more vehicles over 8,500 pounds must report their existing fleet operations to ensure fleets are purchasing and placing zero-emission trucks in the correct service locations.
For more information, including additional requirements and exemptions, see the ARB Advanced Clean Trucks Program website.
(Reference California Code of Regulations Title 13, Sections 1963-1963.5 and 2012-2012.2)
Mobile Source Emissions Reduction Requirements
Through its Mobile Sources Program, the California Air Resources Board (CARB) 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 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.
(Reference California Code of Regulations Title 13, 2021-2027)
Point of Contact
Moyer Help
California Air Resources Board
MoyerHelp@arb.ca.gov
Public Utility Definition
A corporation or individual that owns, controls, operates, or manages a facility that supplies electricity to the public exclusively to charge light-, medium-, and heavy-duty all-electric and plug-in hybrid electric vehicles, compressed natural gas to fuel natural gas vehicles, or hydrogen as a motor vehicle fuel is not defined as a public utility.
(Reference California Public Utilities Code 216 and California Public Utilities Decision 20-09-025, 2020)
Public Utility Zero Emission Vehicle (ZEV) Acquisition Requirement
Any state regulation that seeks to require or compel the procurement of medium- and heavy-duty ZEVs must authorize public agency utilities to purchase ZEV replacements for traditional utility-specialized vehicles that are at the end-of-life.
(Reference California Vehicle Code 28500)
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 Code of Regulations Title 17, Section 95480-95486)
State Transportation Plan
The California Department of Transportation (Caltrans) must publish a California Transportation Plan (Plan) every five years, beginning December 31, 2015. 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 public input. Caltrans must submit a final draft of the Plan to the legislature and governor. A copy of the 2020 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 65070-65073.1)
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. 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.
Beginning January 1, 2024, DGS must develop criteria to evaluate commercial car rental service contracts based on the number of ZEVs or PHEVs available in the service’s fleet.
(Reference California Public Resources Code 25722.5-25722.11, and 25724)
Volkswagen (VW) Zero Emission Vehicle (ZEV) Investment Plan
The California Air Resources Board (CARB) 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 CARB for approval. CARB approved the Cycle 3 plan, which covered January 2022 through June 2024. The Cycle 3 plan included major investments in metropolitan, highway, heavy-duty, and transit ZEV infrastructure; ZEV education, awareness, access, and marketing; and specific ZEV investments in Wilmington, Long Beach. VW submitted its Cycle 4 plan in January 2024, and focuses on electric vehicle (EV) charging infrastructure, EV charger utilization, and ZEV adoption.
For more information, see the Electrify America Investment Plan website and CARB’s VW Settlement website.
Zero Electric Vehicle (ZEV) Office Authorization and Equity Assessment
The California legislature established the ZEV Market Development Office (Office) is established within the Governor’s Office of Business and Economic Development to serve as a point of contact for stakeholders to provide feedback on California’s ZEV goals and to direct the equitable deployment of light-, medium-, and heavy-duty ZEVs, supporting infrastructure, and ZEV workforce development. The Office must also create an equity action plan as part of the ZEV Market Development Strategy. The action plan must include recommendations to:
- Improve access to ZEVs, supporting infrastructure, and ZEV transportation options in low-income, disadvantaged, and underserved communities; and,
- Reduce pollution from transportation in low-income, disadvantaged, and underserved communities; and,
- Support the ZEV industry and workforce in California.
The Office must track state progress toward achieving recommendations included in the equity action plan.
(Reference Assembly Bill 2427, 2024 and California Government Code 12100.150))
Zero Emission Freight Assessment
The California Transportation Commission (CTC), along with other state agencies, must develop a Clean Freight Corridor Efficiency Assessment. As part of the assessment, the CTC must establish an advisory committee, made up of industry representatives and public and private freight stakeholders. The assessment must:
- Identify and designate priority freight corridors for the deployment of zero emission medium- and heavy-duty (MHD) vehicles and associated infrastructure;
- Identify projects to further state goals for zero emission freight and potential sponsors of projects;
- Identify barriers and potential solutions to deploying zero emission MHD vehicles; and,
- Assess impacts on existing infrastructure, potential funding opportunities, and benefits from deploying zero emission MHD vehicles.
In December 2023, the CTC submitted a report containing the assessment’s findings and recommendations to the Legislature. Findings from the assessment must be incorporated into the California Transportation Plan.
(Reference California Government Code 14517 and 65072.5)
Zero Emission School Bus Acquisition Requirements
Beginning January 1, 2035, school districts may only purchase or lease zero emission school buses. Exemptions may apply if zero emission school bus use is not feasible due to terrain or route constraints.
(Reference Health and Safety Code 44272.6 )
Zero Emission Transit Incentive Program Authorization
The California State Transportation Agency (CalSTA) is authorized to establish the Zero-Emission Transit Capital Program to provide funding for zero-emission transit equipment, including zero emission vehicles and fueling infrastructure. By October 31, 2025, and annually thereafter, funding recipients must submit a report to CalSTA on how funds were utilized. For more information, see the CalSTA SB 125 Transit Program website.
(Reference California Government Code 13979.3 and 13987 and California Public Resources Code 75260)
Zero Emission Transportation System Support
Private, nonprofit entities that provide services to zero emission transportation may enter into a joint power agreement with a public agency to facilitate the development of a zero-emission transportation system. The system must reduce greenhouse gas emissions, reduce vehicle congestion and vehicle miles traveled, and improve public transit options.
(Reference California Government Code 6538.5)
Zero Emission Vehicle (ZEV) Deployment Support
California joined Connecticut, Maine, 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 (EV) charging stations 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
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. For more information, see the DMV Registration Fees website.
(Reference California Vehicle Code 9250.6)
Zero Emission Vehicle (ZEV) Infrastructure Fee Structure Assessment
By January 1, 2026, California Energy Commission, California Air Resources Board, and California Department of Motor Vehicles must assess the economic equity of fee structures for ZEV and propose to the Legislature alternative fee structures for funding ZEV infrastructure.
(Reference Assembly Bill 126, 2023)
Zero Emission Vehicle (ZEV) Initiative
The California Air Resources Board’s (CARB) 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, CARB 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 California Health and Safety Code 44258.4)
Zero Emission Vehicle (ZEV) Production Requirements
The California Air Resources Board (CARB) 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 all possible operational modes and conditions. 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.
CARB’s emissions control program for model year (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 (ACC). In December 2012, CARB finalized new regulatory requirements that allow vehicle manufacturer compliance with the U.S. Environmental Protection Agency’s (EPA) GHG requirements for MY 2017 through 2025 to serve as compliance with California’s adopted GHG emissions requirements for those same model years.
The accounting procedures for MY 2018 through 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 ZEVs, which must demonstrate certain exhaust emissions standards, evaporative emissions standards, on-board diagnostic requirements, and extended warranties.
| MY | ZEV Requirement |
|---|---|
| 2021 | 12% |
| 2022 | 14.5% |
| 2023 | 17% |
| 2024 | 19.5% |
| 2025 and later | 22% |
In November 2022, CARB finalized another rule in addition to the ACC emissions control program for MY 2026 through 2035 called Advanced Clean Cars II (ACCII), requiring an increasing percentage of ZEVs in new vehicle sales beyond MY 2025. ZEV sales requirements under ACCII are shown in the table below.
| MY | ZEV Requirement |
|---|---|
| 2026 | 35% |
| 2027 | 43% |
| 2028 | 51% |
| 2029 | 59% |
| 2030 | 68% |
| 20231 | 76% |
| 2032 | 82% |
| 2033 | 88% |
| 2034 | 94% |
| 2035 and later | 100% |
For more information, see the CARB ZEV Program website.
(Reference California Code of Regulations Title 13, Section 1962 -1962.2 and 1962.4)
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, the California Energy Commission (CEC), the 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 over 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 electric vehicle (EV) chargers, including 10,000 direct current (DC) fast chargers, in California;
- By 2030, there will be at least 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.
- Develop new criteria for clean vehicle incentive programs to encourage manufacturers to produce clean, affordable cars;
- 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 EV chargers in homes and businesses; and
- Ensure EV charging and hydrogen fueling are affordable and accessible to all drivers.
(Reference Executive Order B-16, 2012, Executive Order B-48, 2018, and Executive Orders N-19-19, 2019)
Zero Emission Vehicle and Infrastructure Support
The California Energy Resources Conservation and Development Commission must provide technical assistance and support for the development of zero-emission fuels, fueling infrastructure, and fuel transportation technologies. Technical assistance and support may include the creation of research, development, and demonstration programs.
(Reference California Public Resources Code 25617)
Zero-Emission Airport Shuttle Requirement
By 2035, all airport fixed-route shuttle fleets must transition to 100% zero-emission vehicles (ZEVs). Zero-emission shuttle technologies include battery-electric or fuel cell electric technologies. Starting in 2022, shuttle fleets must report the details of their vehicles to the California Air Resources Board (CARB). Starting in 2023, if fleets replace a ZEV shuttle, the replacement must be a ZEV. For additional terms and conditions, see CARB’s Zero-Emission Airport Shuttle website.
(Reference Resolution Number 19-8, 2019)
Zero-Emission Transit Bus Requirement
By 2040, all public transit agencies must transition to 100% zero-emission bus fleets. Zero-emission bus technologies include battery-electric or fuel cell electric. Transit agencies must purchase or operate a minimum number of zero-emission buses according to the following schedules:
| Large Transit Agency | Small Transit Agency | |
|---|---|---|
| January 1, 2023 | 25% of the total number of new bus purchases in each calendar year must be zero-emission buses | No requirement |
| January 1, 2026 | 50% of the total number of new bus purchases in each calendar year must be zero-emission buses | 25% of the total number of new bus purchases in each calendar year must be zero-emission buses |
| January 1, 2029 | All new bus purchases must be zero-emission buses | All new bus purchases must be zero-emission buses |
Each transit agency will submit a plan demonstrating how it will purchase clean buses, develop infrastructure, train personnel, and other required details. Large transit agencies must submit a plan in 2020 and small agencies must submit a plan in 2023. Additional rules and requirements apply.
For more information, including definitions of large and small transit agencies and additional terms and conditions, see the California Air Resources Board’s Innovative Clean Transit website.
(Reference California Code of Regulations Title 13, Section 2023.1)
Zero-Emission and Autonomous Vehicle Infrastructure Support
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)
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, 2025. 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 Mechanic Technical Training - San Joaquin Valley
The San Joaquin Valley Air Pollution Control District (SJVAPCD) administers the Alternative Fuel Mechanic Training Program, which provides incentives of up to $15,000 per fiscal year to educate personnel on the mechanics, operation safety, and maintenance of alternative fuel vehicles, fueling stations, and tools involved in the implementation of alternative fuel technologies. For more information, see the SJVAPCD Alternative Fuel Mechanic Training Component website.
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, all-electric, 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 Clean Transportation Program (Program) 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. Funding areas include:
- Electric vehicles and charging infrastructure;
- Hydrogen vehicles and refueling infrastructure;
- Medium- and heavy-duty zero emission vehicles; and,
- Workforce development.
(Reference California Health and Safety Code 44272 - 44273 and California Code of Regulations, Title 13, Chapter 8.1)
Bus Replacement Grant
The California Air Resources Board (CARB) offers grants for the purchase of new zero-emission buses to replace old gasoline, diesel, compressed natural gas, or propane buses. Grants awards vary based on vehicle type and are available in the following amounts:
| Vehicle | Maximum Grant Amount |
|---|---|
| Electric Transit Bus | $216,000 |
| Fuel Cell Transit Bus | $480,000 |
| Electric School Bus | $400,000 |
| Electric School Bus (CARB non-compliant) | $380,000 |
| Electric Shuttle Bus | $192,000 |
Non-compliant school buses are vehicles that are not compliant with the CARB Truck and Bus Regulation. Eligible applicants include owners of transit, school, and shuttle buses. Grants are awarded on a first-come, first-served basis. The program is funded by California’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including funding availability, see the CARB’s Volkswagen Settlement website.
Clean Vehicle Rebate - El Dorado County
The El Dorado County Air Quality Management District (EDC AQMD) offers rebates of up to $599 to residents toward the purchase or lease of a new zero emission vehicle (ZEV) or partial-ZEV, 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, including eligibility requirements, see the EDC AQMD Grants and Incentives website.
Electric Vehicle (EV) Grants
The California Air Resources Board offers grants to income-qualifying individuals for the purchase or lease of a new or pre-owned EV, plug-in hybrid electric vehicle (PHEV), or FCEV. EVs and FCEVs are eligible for grants of up to $7,500 and PHEVs are eligible for grants of up to $7,000. Applicants may also be eligible to receive a grant of up to $2,000 for the purchase and installation of a Level 2 EV charger. For more information, including income requirements, see the Clean Vehicle Assistance Program website.
Electric Vehicle (EV) and Fuel Cell Electric Vehicle (FCEV) Grant - Bay Area
The Bay Area Air Quality Management District’s (BAAQMD) Clean Cars for All program offers grants up to $12,000 to income-eligible residents to replace a vehicle eligible for retirement with an EV, hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), or FCEV. Eligible vehicles for replacement should be model year 2007 or older. Recipients may buy or lease a new or used EV, HEV, PHEV, or FCEV. Grants vary depending on the household income and vehicle technology. Vehicles that are replaced must be turned in at an authorized dismantler.
Individuals that purchase a PHEV or EV are eligible to receive up to $2,000 for the purchase and installation of Level 2 electric charger.
For more information, including additional eligibility requirements and how to apply, see the BAAQMD Clean Cars for All 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.
Heavy-Duty Low Emission Vehicle Replacement and Repower Grants
The South Coast Air Quality Management District offers grants for the replacement or repower of eligible class 7 and 8 heavy-duty vehicles with low oxide of nitrogen (NOx) vehicles. Grants may cover up to 40% of non-government project costs and up to 100% of government project costs. Eligible applicants include Class 7 and 8 freight trucks, drayage trucks, dump trucks, waste haulers, and concrete mixers, freight switcher locomotives. Grants are awarded on a first-come, first-served basis. The program is funded by California’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including program guidance and application, see the California Air Resources Board’s Volkswagen Settlement website.
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) 2018 Class 4-8 heavy-duty trucks with new zero emission or low NOx trucks;
- Replacement of MY 2018 or older Class 7-8 diesel truck with new zero emission trucks; and,
- Replacement of MY 2018 or older Class 7-8 diesel trucks with new zero emission trucks.
Incentive amounts vary by weight class and fuel type. Fleets may receive up to 80% 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. For more information, including application requirements, see the SJVAPCD Truck Replacement Program website.
Heavy-Duty Zero Emission Vehicle (ZEV) Grant – Santa Barbara County
The Santa Barbara County Air Pollution Control District (SBCAPCD) provides grants to offset the costs of zero-emission heavy-duty vehicles that reduce on-road emissions within Santa Barbara County. Eligible projects include the replacement of commercial trucks and buses, transit buses, authorized emergency vehicle, transportation refrigeration units, and more. Eligible technology includes the purchase of battery-electric or hydrogen fuel cell vehicles. Priority will be given to projects located in multifamily housing or low-income communities. For more information, including current funding opportunities, see the SBCAPCD Clean Air Grants 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. Blue stickers expire January 1, 2025; and yellow, burgundy, and green stickers expire September 30, 2025.
Vehicles originally issued white, green, orange, purple, or red decals are no longer eligible to participate in this program. Additionally, the Income-Based CAV Decal Program expired January 1, 2024. 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 and additional eligibility requirements, see the California Air Resources Board Carpool Stickers website.
(Reference Assembly Bill 2678, 2024 and California Vehicle Code 5205.5 and 21655.9)
Light-Duty Vehicle (LDV) Hydrogen Fueling Station Grants
The California Energy Commission (CEC) provides funding of up to $10 million for projects that provide publicly-accessible hydrogen fueling stations. Projects must have four or more hydrogen refueling stations that primarily serve light-duty fuel cell electric vehicles. Applicants may only receive one grant award. Additional terms and conditions apply. For more information, see the CEC LDV and Multi-Use Hydrogen Refueling Infrastructure website.
(Reference California Health and Safety Code 43018.9 and Executive Order B-48-18)
Low Emission Truck and Bus Purchase Vouchers
Through the Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (HVIP) and Low Oxide of Nitrogen (NOx) Engine Incentives, the California Air Resources Board provides vouchers to eligible fleets to reduce the incremental cost of qualified electric, hybrid, or hydrogen trucks and buses at the time of purchase. Vouchers are available on a first-come, first-served basis. Only fleets that operate vehicles in California are eligible. Voucher amounts vary depending on whether the vehicles are located in a disadvantaged community. For more information, including a list of qualified vehicles and other requirements, see the HVIP website.
Medium- and Heavy-Duty (MHD) Zero Emission Vehicle (ZEV) Financing Program
The California Pollution Control Financing Authority (CPCFA) must develop and implement a purchasing assistance program for MHD ZEV fleets. CPCFA must consult with stakeholders to design a program that provides financial support and technical assistance to fleet managers deploying MHD ZEVs. CPCFA must designate high-priority fleets, considering implications for climate change, pollution, environmental justice, and post-COVID economy recovery. A minimum of 75% of financing products must be directed towards operators of MHD ZEV fleets whose fleets directly impact, or operate in, underserved communities. CPCFA must establish the program by January 1, 2023, and provide annual reports on program outcomes to the California Air Resources Board.
(Reference California Health and Safety Code 44272)
Medium- and Heavy-Duty (MHD) Zero Emission Vehicle (ZEV) and Fueling Station Financing Program
The California Pollution Control Financing Authority (CPCFA) offers three pilot loan programs to fleets looking to purchase new or pre-owned MHD ZEVs and associated fueling infrastructure. Additional terms and conditions apply. For more information, see the CPCFA Zero-Emission Heavy-Duty Programs website.
(Reference California Health and Safety Code 44272)
Medium- and Heavy-Duty (MHD) Zero Emission Vehicle (ZEV) and Infrastructure Grants
The Energy Infrastructure Incentives for Zero-Emission Commercial Vehicles (EnergIIZE), funded by the California Energy Commission, offers grants for the purchase and installation of ZEV infrastructure for MHD electric vehicles and hydrogen fuel cell electric vehicles. Eligible applicants include commercial fleets, station owners, and ZEV infrastructure vendors and installers. Incentive amounts vary based on project type. Increased incentive amounts are available for commercial fleets that operate in low-income and underserved communities. For more information, including eligible project types and funding amounts, see the EnergIIZE website.
School Zero Emission Vehicle (ZEV) and Infrastructure Grants
The California Air Resources Board (CARB) Clean Mobility in Schools Project (CMIS) offers funding for zero emission shuttles, transit buses, school buses, and infrastructure to public schools, local governments, community-based organizations, or tribal governments. All projects must be located in or serve priority populations. Additional terms and conditions apply. For more information, see the CARB CMIS website.
Zero Emission Bus and Infrastructure Equity Grants
The California Air Resources Board (CARB) Sustainable Transportation Equity Project (STEP) offers funding for zero emission buses and infrastructure. Eligible applicants include community-based organizations, local governments, and tribal governments that serve priority populations throughout California. Additional terms and conditions apply. For more information, see the CARB STEP website.
Zero Emission Transit Bus Tax Exemption
Zero-emission transit buses are exempt from state sales and use taxes when sold to public agencies eligible for the Low Emission Truck and Bus Purchase Vouchers. This exemption expires January 1, 2026.
(Reference California Revenue and Taxation Code 6377)
Zero Emission Transit Funding
The California Clean Mobility Options Voucher Pilot Program offers vouchers of up to $100,000 per transportation needs assessment and $1,500,000 per project for the purchase of zero-emission vehicles, infrastructure, planning, outreach, and operations projects in low-income communities, disadvantaged communities, and tribal areas. For more information, see the Clean Mobility Options website.
Zero Emission Vehicle (ZEV) and Infrastructure Pilot Project Grants
The California Air Resources Board (CARB) Advanced Technology Demonstration and Pilot Projects Program offers funding for pre-commercial demonstrations and large-scale pilots of on- and off-road ZEVs and zero emission equipment that help California meet its goals to reduce criteria pollutants, greenhouse gas emissions, and petroleum use. Eligible applicants include local air districts, California public entities, and nonprofits which must partner with private sector parties. Priority is given to projects located in or serving priority populations. For more information, see the CARB Advanced Technology Demonstration and Pilot Projects website.
Zero Emission Vehicle (ZEV) and Near-ZEV Weight Exemption
ZEVs and near-ZEVs 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 ZEV is defined as a vehicle that produces no criteria pollutant, toxic air contaminant, or greenhouse gas emissions when stationary or operating. A near-ZEV 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 1953, 2024 and California Business and Professions Code 12725 and California Vehicle Code 35551 and 35559)
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