California Regulators Roll Out Aggressive Framework To Further Freeze Out Carbon Emissions in Refrigerated Transportation

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On May 22, 2024, the California Air Resources Board (CARB) unveiled a high-level framework for what is known as “TRU Part 2” to eliminate carbon emissions created by refrigerated equipment utilized in the transportation of freight. 

If enacted, TRU Part 2 may have a very substantial financial and operational impact on both transportation providers and users of refrigerated and temperature-controlled freight transportation in the State of California and beyond.

TRU Part 2 regulates what CARB defines as “Non-truck transportation refrigeration units” a.k.a. “Non-truck TRUs.” Refrigerated trailers, refrigerated intermodal domestic shipping containers, refrigerated rail cars, and TRU generator sets and powerpacks are all considered by CARB to be Non-truck TRUs. TRU Part 2 is anticipated to have a more profound impact on the overall transportation and logistics of refrigerated or temperature-controlled transportation than “TRU Part 1” which regulated “Truck TRUs,” such as refrigerated straight trucks and cargo vans.

The TRU Part 2 framework consists of two proposals. The first proposal will require fleets to turn over a certain percentage of a fleet’s Non-truck TRUs. Although fleets are not currently defined in the current proposal, CARB has historically defined “fleets” in the context of its regulations as groups of owned, leased, or rented vehicles operated by a business that are under common ownership or control. Typically, CARB regulations apply to any fleets that conduct business in or travel within the state of California. The current proposed turnover of a fleet’s Non-truck TRUs would start in 2028 and aggressively turn over 100% of a fleet’s Non-truck TRUs into zero emission Non-truck TRUs by 2035. Under the current proposal, TRU Part 2 would require that a fleet replace 5% of its non-zero emissions Non-truck TRUs with zero emission Non-truck TRUs each year for the years 2028 and 2029. The turnover requirement would then increase to 10% for years 2030 and 2031, 15% for years 2032 and 2033, and then 20% for years 2034 and 2035, respectfully.

Under the second TRU Part 2 proposal, CARB will require that newly manufactured zero emission Non-truck TRUs use either: (i) a refrigerant that has a global warming potential measurement rating of less than 5 or (ii) no refrigerant at all. Therefore, CARB is not only taking aim at the emissions created via powering the Non-Truck TRU itself, but also the emissions generated from creating and/or utilizing a component of the refrigeration system that cools the non-Truck TRU. This second TRU Part 2 proposal is currently scheduled to commence in 2032.

Of note, at the May 22, 2024, meeting, CARB did identify a third area that CARB may seek to regulate under TRU Part 2: infrastructure. CARB is currently seeking public comment on the infrastructure requirements that would be necessary to power the non-Truck TRUs. Similar to Zero Electric Vehicles (ZEVs), there appears to be concern from CARB as to how quickly proper infrastructure can be implemented to ensure that the batteries or other zero-emission fuel systems for the Non-truck TRUs can be repowered in an efficient and effective manner. CARB is contemplating whether to be involved in setting standards or requirements on areas where Non-truck TRUs will operate to ensure such infrastructure is readily and sufficiently available to repower the Non-truck TRUs. CARB identified refrigerated warehouses and distribution centers, grocery stores, seaports, and intermodal railyards as potential areas CARB may seek to impose such standards or requirements.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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