Driving Demand report cover
California’s policies to phase out polluting diesel trucks in favor of zero-emission models took a major hit this year from the federal government. In June 2025, Congress voted to overturn federal approval of California’s zero-emission truck mandate (although this vote is now subject to litigation). In July, Congress voted to terminate many of the tax incentives that had helped lower the cost of zero-emission trucks.
By Ethan Elkind and Marie Grimm
Additionally, in January, the state withdrew its waiver request from the EPA for its proposed mandate requiring major fleets to purchase zero-emission trucks, anticipating that the incoming Trump administration would deny it.
Nevertheless, the need to address truck pollution remains urgent. Medium- and heavy-duty trucks are significant contributors to both greenhouse gas emissions and air pollution. While they make up only 6% of all vehicles in California, they account for 25% of the state’s on-road greenhouse gas emissions and 35% of transportation-related nitrogen oxide emissions. These trucks disproportionately affect low-income communities near shipping centers and highways.
The good news is that in some market segments, zero-emission trucks already rival fossil-fueled alternatives in terms of total cost of ownership. However, in the near term, they remain more expensive for many use cases. As a result, even with ongoing declines in expected battery costs, demand has not yet reached the level required for the necessary transition. This will require near-term federal and state policy support.
To explore new state actions to boost demand for zero-emission trucks, UC Berkeley’s Center for Law, Energy and the Environment (CLEE) and the UCLA Law Emmett Institute on Climate Change and the Environment, with support from Bank of America, are releasing a new report: Driving Demand: Solutions to Increase the Market for Heavy-Duty Zero-Emission Vehicles.
Based on an expert convening and a comprehensive literature review, the report identifies key barriers to market development and proposes solutions to overcome them. Recommendations for the California Legislature include:
- Create a “Clean Miles Standard” for freight, requiring shippers to meet a specified percentage of the miles their goods travel using clean technologies like zero-emission trucks
- Develop revenue-neutral, self-funding incentive programs for heavy-duty zero-emission vehicles, where fees on non-zero-emission vehicles fund rebates for clean vehicles.
- Provide tax credits for heavy-duty zero-emission vehicles to help offset the purchasing cost of new vehicles, and exempt these vehicles from state sales tax, or at least ensure they are taxed no more than their diesel counterparts.
- Equalize zero-emission truck registration fees, ensuring purchasers do not pay more for registration than they would for diesel trucks.
The report also includes recommendations for state agencies and ports, such as:
- The California Air Resources Board could establish a statewide Indirect Source Rule under the Clean Air Act, regulating facilities like ports and warehouses that generate pollution indirectly by attracting mobile emission sources, such as trucks. This rule would require emission reductions from vehicle traffic at these facilities.
- The Governor’s Office and the Department of General Services could create procurement regulations requiring the purchase or lease of zero-emission trucks and task the Department of General Services with implementing and overseeing them.
- The Governor’s Office of Business and Economic Development could help facilitate the aggregation of shipper demand by coordinating various efforts to enhance collective truck purchasing power, further driving demand for zero-emission freight initiatives and reducing supply chain and vehicle costs.
- Ports could develop incentive programs for zero-emission heavy-duty vehicles, such as offering green lanes, preferential reservations, or reduced fees for these vehicles.
Read the full report on either the CLEE or Emmett Institute websites. This report is the part of the Climate Change & Business Research Initiative, a collaboration between CLEE and UCLA Law’s Emmett Institute on Climate Change & the Environment, supported by Bank of America since 2009.
To learn more about the report’s recommendations, register for the upcoming CLEE and Emmett Institute webinar on Tuesday, January 13 from 2:00 – 3:00 pm (PT). The webinar will feature a keynote by California Energy Commissioner Nancy Skinner, along with a panel discussion featuring Ray Minjares of the International Council on Clean Transportation and Adam Browning from Forum Mobility.
This article is co-authored by Marie Grimm, Environmental Policy Research Fellow at the Center for Law, Energy & the Environment at Berkeley Law.
Leave a Reply