While there haven’t been any recent changes, this rule is often part of the discussion when considering the Trump administration’s agenda. This rule has not yet been a direct target of the Trump administration, so we consider it “stickier” than GHG-3. That is, it has been finalized longer and is less offensive than GHG-3 to its detractors, so at this point, it has a higher likelihood of survival. The EPA announced in March that it would “reevaluate” the rule, though at this point it is unclear exactly what this entails. The ATA announced to its members on November 17 that the EPA intends to stick with the current timing for the rule, however, it is now expected to issue a rulemaking with amendments in Spring 2026. The EPA has yet to issue any formal statements on the matter.
SUMMARY: As part of the EPA’s Clean Trucks Plan, on December 20, 2022, the EPA posted a final rule, “Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards,” that set NOx and PM emissions reduction standards (the EPA low-NOx rule). The EPA low-NOx rule sets more stringent NOx and PM standards for MY 2027+ heavy-duty engines. The EPA’s 2027 rule will require a NOx reduction of over 80% from current standards.
INDUSTRY IMPACT:
The chart below shows the EPA’s MY 2027 NOx standards for heavy-duty engines. Along with the new NOx emissions standards, the EPA has updated useful life and warranty periods. The tables below detail the emission-related warranty periods and updated useful life standards for engines compared to the current standards.
It is the combination of the new NOx emissions stringency, the increased UL, and the increased warranty period that result in significant costs added to the diesel purchase price (~$20k-$30k). Tariffs and general economic uncertainty have led ACT Research to stop forecasting a prebuy ahead of 2027.
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What does EPA HD Low NOx (as is) mean for you?
MANUFACTURERS: With economic uncertainty at an all-time high as Trump tariff policy seesaws, ACT Research is no longer forecasting a prebuy ahead of 2027. Market uncertainty along with uncertainty around what the rule will look like should the administration make amendments during its “review” mean manufacturers face planning challenges.
DEALERS: As dealers are the ones selling the vehicles for the OEMS, they can no longer expect higher than usual sales in the next couple of years ahead of the rule without a prebuy.
CARRIERS AND FLEETS: The EPA Low NOx rule doesn’t mandate the type of powertrains that make up your fleet, but it will impact the price of diesel-ICE trucks. As noted earlier, we are expecting the price of a Class 8 truck or tractor to increase around $20k-$30k. The coming price increase may or may not change your purchasing decisions in the next few years, but having those discussions now is critical.
MOST RECENT UPDATES: Now that the president has signed Congress’ resolutions to revoke the EPA waivers for HD Omnibus and ACT, the waivers are rescinded, and the rules are unenforceable. California has already filed a lawsuit to challenge the resolutions. This means that HD Omnibus will be tied up in the courts while it is determined whether the use of the CRA in this instance holds up.
SUMMARY: In August 2020, CARB adopted HD Omnibus which would lower NOx and PM emissions standards to 0.05 g/hp-hr for MYs 2024-26 California heavy-duty engines and match EPA standards for MY 2027 and beyond. CARB and the Truck and Engine Manufacturer’s Association (EMA) announced the Clean Truck Partnership (CTP) agreement in July 2023 (which has since disintegrated). The Clean Truck Partnership agreement included CARB’s agreement to amend HD Omnibus to align with the EPA’s low-NOx emissions standards, which it proposed to do in September.
What does CARB HD Low NOx Omnibus mean for the industry (if it is ever again enforceable)?
Alongside California, nine additional states have proactively adopted the HD Omnibus rule (see adjacent map). Pennsylvania has an existing regulation that would require it to adopt California vehicle emissions standards. However, Pennsylvania put a hold on this requirement and will now follow California’s HD Omnibus standards beginning with MY 2027. The states starting compliance with MY 2027 will effectively be complying with the federal standard set by the EPA that CARB has agreed to align with. CARB will continue to have a separate engine certification program as it will continue to maintain its On-Board Diagnostic and HD in-use compliance program.
What does CARB HD Low NOx Ombnibus mean for you?
MANUFACTURERS: While the EPA waiver decision has been overturned by Congress, meaning HD Omnibus is not enforceable, California has already filed a lawsuit contesting the use of the CRA to squash the waivers. The EMA and OEMs have affirmed that the CTP is preempted without waivers, and they will not comply with HD Omnibus without an EPA waiver. A judge issued a preliminary injunction barring CARB from enforcing the CTP after CARB filed a separate lawsuit in California claiming breach of contract by the OEMs.
DEALERS: Now that the rule is unenforceable, dealers should no longer see HD Omnibus specific challenges selling vehicles.
CARRIERS AND FLEETS: Now that the rule is unenforceable, fleets should no longer see HD Omnibus specific challenges buying vehicles.
MOST RECENT UPDATES:
Now that the president has signed Congress’ resolutions to revoke the EPA waivers for HD Omnibus and ACT, the waivers are rescinded, and the rules are unenforceable. California has already filed a lawsuit to challenge the resolutions. This means that HD Omnibus will be tied up in the courts while it is determined whether the use of the CRA in this instance holds up.
CARB did approve amendments in July that allow for credit pooling and increased credit trading across classes. Though the rule is unenforceable, CARB is operating under the assumption that its challenge will prevail in court and the rule will come back into effect.
SUMMARY:
CARB’s ACT rule requires OEMs to sell ZEVs as an increasing percentage of their annual sales through 2035+. The table below outlines the gradual increase in sales percentage requirements.
This regulation allows credit trading. A manufacturer’s deficit is the product of the annual sales volume, percent sales requirement, and a weight class multiplier. Deficits for all Classes can be met with ZEV and Near Zero Emission Vehicle credits from other classes. The exception is Classes 7-8 tractors—the deficit calculated for this category can only be met with ZEV and NZEV credits from this group. In addition to California, 10 states have adopted ACT and will phase in through 2027 (see map).
What does CARB ACT mean for the industry (if it is ever again enforceable)?
With challenges like infrastructure, weight limits, and cost competitiveness at top of mind during fleet purchasing decisions, OEMs are likely to struggle selling ZEVs. There is nothing stopping fleets from purchasing compliant diesel vehicles in non-ACT states. Overall CV sales volumes may not change, but the location of those sales could start shifting.
MANUFACTURERS: While the EPA waiver decision has been overturned by Congress, meaning ACT is not enforceable, California has already filed a lawsuit contesting the use of the CRA to squash the waivers. The EMA and OEMs have affirmed that the CTP is preempted without waivers, and they will not comply with ACT without an EPA waiver. A judge issued a preliminary injunction barring CARB from enforcing the CTP after CARB filed a separate lawsuit in California claiming breach of contract by the OEMs.
DEALERS: Congress overturning the waiver decision alleviates pressure on dealers to sell ZEVs in order to see more diesel CVs.
CARRIERS AND FLEETS: Fleets in ACT states should not have problems buying the vehicles they are looking for now that OEMs and dealers do not have to tie ZEV sized strings to diesel sales.
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