California’s Clean Off-Highway Equipment (CORE) Incentive Program is introduced to accelerate the adoption of zero-emission construction machinery. With more than $182 million in funding available for fiscal year 2022-2023, the program provides cash rebates to qualified contractors for the purchase of environmentally friendly equipment. But as the state implements stricter regulations, including the mandate for zero-emission trucks, the adequacy of the program’s rewards and the challenges companies face are being questioned.
Expansion of financing and incentives
CORE, operated by CALSTART, offers point-of-sale cash rebates on a first-come, first-served basis for zero-emission off-road vehicles. The program offers double incentives for vehicles located in underserved areas and small businesses. Voucher amounts are determined based on the cost difference between zero-emission alternatives and conventional equipment, offsetting the increased expense of green solutions. The program focuses on the promotion of new technologies that are not yet widely adopted in the market.
Qualified equipment and manufacturers
The CORE website provides a list of construction machinery eligible for incentives. Discounts range from $34,000 for skid steers to $500,000 for cranes. Certified manufacturers include Volvo CE, Bobcat, First Green Industries, JCB and Liebherr, among others. To qualify for the voucher program, equipment must be used and stored in California for at least three years, and purchasers must submit periodic activity reports during that period.
Examining rewards
Although CORE provides substantial funding for zero-emission construction equipment, concerns have been raised about the adequacy of incentives. Detractors argue that the subsidies may not do enough to help companies meet the strict requirements imposed by the California Air Resources Board (CARB). As the state mandates zero-emission trucks by 2035, companies face many challenges in transitioning their fleets and complying with evolving regulations.
Mandates and Regulations
The Biden administration granted California permission to become the first government in the world to mandate zero-emission trucks. The Advanced Clean Fleets Rule, approved by CARB, requires companies with 50 or more trucks to begin transitioning to zero-emission vehicles by 2024, with the hope of a complete phase-out of emissions-producing trucks by 2045. CARB is also developing a new regulation to cover the 1.2 million trucks in fleets with fewer than 50 vehicles.
Impact on the construction sector
The implementation of stricter regulations, including off-road diesel regulations in use, will have a significant impact on the construction industry. From January 2024, fleets will not be able to add vehicles with Tier 3 engines, and Tier 4 mid-engines will face similar restrictions. The regulations also require fleets to reduce emissions through engine recalls, replacements or modifications. It should be noted, however, that business associations such as the Construction Industry Air Quality Coalition and AGC oppose the regulations due to concerns about implementation difficulties, financial constraints and the availability of technologies of reducing emissions.
Balancing emissions reduction and industry challenges
California’s Clean Off-Highway Equipment Voucher Program aims to reduce emissions and promote the adoption of zero-emission technology in the construction industry. While the rewards offered through CORE are substantial, challenges persist as companies navigate evolving regulations and the transition to zero-emission vehicles. Balancing emissions reduction targets with practical business considerations is of paramount importance to ensure program success and sustainable industry growth.
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