An Interview with Michael Taylor on ACF and the potential implications for fleets.

In the last few years there has been a major push by governments in developed nations to achieve Net Zero targets on emissions reduction, with many setting goals by a specific date such as 2050. This has led to the creation of regulations that target industries such as oil and gas, plastics and transportation with strict emissions reduction targets.

One of the most controversial is the Advanced Clean Fleets (ACF) regulation. This regulation in conjunction with others is designed to advance the introduction of medium- and heavy-duty zero emission vehicles, requiring designated fleets to phase in these vehicles along with a goal of manufacturers only selling zero-emission vehicles in certain categories by 2035.

These goals are part of California Governor Gavin Newsom’s N-79-20 Executive Order and Sustainable Freight Action Plan, which represents a component of a broader initiative to further reduce air pollution in the state. While any proposals to reduce air pollution and exhaust emissions are welcome, there is a lot of concern in the transportation sector about whether these targets are achievable, not to mention the huge financial cost and infrastructure hurdles that must be overcome in order to reach them.

 

To gain an understanding of what these regulations mean, how they are being implemented and their impact on the fleet industry, Autosphere conducted a two-part interview with Michael Taylor, Senior Advisor, HillStaffer. Taylor works extensively on government affairs related to the transportation and fleet sector, including with associations such as NAFA—Fleet Management Association. He has advised on a whole host of issues including energy efficiency, the Clean Air Act, as well as EVs, future mobility and even autonomous vehicles. In this instalment, we asked Taylor about his background and to take a look at how ACF has developed and some of the changes that are taking place regarding these regulations.

Autosphere: Can you tell us a little about your background and how you got involved in government relations and public affairs?

Michael Taylor: When I was growing up in Kentucky, my first career choice was to be a medical doctor. I was supposed to be the first doctor in the family. At the time, there were very few college graduates in my immediate family, and until I got my degree, there was only one other member of my family that had graduated from college, so naturally, there were a lot of expectations. I took part in science club, science fair competitions, volunteered at the hospital, etc. Ultimately, after an extended undergraduate career with changing majors a couple of times, I ended up going into government affairs, first in Kentucky where I worked for Senator Mitch McConnell and then in Washington D.C. where I finished my Bachelor’s Degree and earned my Master’s Degree. While working on my Master’s Degree, I would go to school in the evenings and would be working during the day in advocacy. And I’ve been doing advocacy work for almost four decades now in a lot of verticals, including manufacturing and transportation. I’ve worked in transportation policy for about 20 years and had fleet specific experience before working with NAFA. I’ve also worked in both the private sector and with non-profit organizations including professional societies, trade associations, and chambers of commerce, working in energy, manufacturing, technology, plastics and of course, transportation and vehicle fleets.

AS: When we look at the current legislative landscape, what do you feel are some of the biggest issues potentially impacting fleets both on a state, provincial and federal level?

MT: Anything in terms of more stringent greenhouse gas emission standards and mandates around fleet transitions to electrification are seen as top public policy priorities at present and while there are a range of different technologies that are available to help further reduce vehicle emissions in North America, the current emphasis at the Federal level and in many states is really on putting all the eggs in the electric vehicle basket. When we look at other top priorities, these include things like access to vehicle-generated data and catalytic converter theft. Supply chain issues related to the supply of vehicles and parts, including components such as microchips are also of great concern. Supply chains always experience disruptions, because these chains have become global and so very complicated. This makes them prone to volatility as we saw during the COVID-19 pandemic and more recently when the Key Bridge collapsed, causing major disruption in traffic to and from the Port of Baltimore. While there are other East Coast ports that can absorb some of that vehicle supply, incidents like this still cause a massive disruption in the supply of vehicles, since 40% of all automobile related shipping traffic on the East Coast of the U.S. passes through Baltimore. And this is something that really impacts fleet managers.

AS: Can you expand a little on this?

MT: We saw during COVID how the idling of assembly plants and restrictions on the availability of parts and materials through suppliers significantly impacted new vehicle availability. Because this resulted in a supply shortage of vehicles, many OEMs were favouring consumers over fleets. In many cases, fleets had to take a back seat because OEMs and their dealers didn’t have such large inventories as usual that they could designate for fleets, so fleet orders were either cancelled or fleet managers faced a situation where they could not confirm orders because OEMs could not provide definitive timelines as to when order banks would be open and when vehicles could be ordered, manufactured and delivered.

AS: Can you share with us the situation regarding the Advanced Clean Fleets regulation and other related-regulations in California and other “progressive” states and the potential it has for impacting fleets in other states and jurisdictions as well as across North America?

MT: There’s no question that the ACF regulation and other-related regulations have far-reaching implications, not only in California but other states and [as we discussed during the Canadian Legislative Update at NAFA I&E], also Canada and even the European Union. In Canada, we’ve seen these regulations discussed at the provincial level, most notably in British Columbia and Quebec, and while it has still to be determined how impactful they will prove at the federal level, ACF is still a primary concern for the transportation sector, including fleets. Under the Clean Air Act, states are permitted to adopt more stringent vehicle emission regulations than exist at the Federal level. This is what California has done many times. In order to do this, each time, California has had to ask the Environmental Protection Agency (EPA) for a waiver, however, California has never not been granted such a waiver by the EPA. In the last few decades, we’ve seen other states look toward California’s example and currently, we have 17 states and the District of Columbia that have adopted all or part of the California vehicle emission regulations.  In Canada, we’ve also seen B.C. and Quebec follow suit and Quebec also participates in a carbon cap-and-trade system with California, so from this standpoint, Quebec is the most aligned of the Canadian provinces in following California example.

In the U.S., these regulations have gotten somewhat caught up in the overall political polarization seen in the country, and in many instances, it comes down to whether a state is “Red” or “Blue” as to whether they will adopt a regulation like ACF or not. In Canada, there is less political polarization overall around these issues. That said, you still see a bit of a political division and that has been increasing over the last few years. This is unfortunate as it makes it more difficult to get people to look at the merits of things and policies and regulations become more of a kind of political litmus test. Are you a stronger Conservative or a stronger Liberal or a stronger Republican or a stronger Democrat? In that context, it tends to become less about the merits of appropriate policy and public policy making and more about party politics. When you’re trying to put together workable legislation that makes things tougher, because compromise is essential in putting such policies together.

AS: You touched on this at I&E, but we wanted to see if there are instances where pressure from the industry is starting to influence policy decisions when it comes emissions regulations?

MT: Up until last year, there was essentially a drumbeat, certainly for states that had signed a Memorandum of Understanding (MOU)—those that demonstrated the desire to follow the California model. Yet 2023 proved pivotal in that you had three states—Connecticut, Maine and North Carolina that diverged from ACF. In the case of Connecticut, they had done pretty much everything on the regulatory front and then ultimately, decided to back away from it. Another interesting case was Maine. The state faced particular challenges related to adopting ACF and it was the regulators, not the politicians that decided not to go forward with it. In North Carolina, it was a little bit of everything, and they introduced a law to make sure that nothing like the Advanced Clean Trucks regulation could get passed in the state. Also, earlier this year in Illinois, the workability of the regulations became an increasing issue, particular since adopting California-like regulations would in part essentially mean that overnight so very many farm vehicles would not even be allowed on state roads. Governor J.B. Pritzker was very direct on this, since farming represents a big part of Illinois’ economy and backed away from the regulations. He also emphasized his preference for more of a “carrot” or incentive approach as opposed to the “stick” of a mandate when it comes to policy making here. It’s been encouraging to see this kind of reason and rationality come into the process at the governor and state level.

AS: How about California, has there been progress made there as well?

MT: In California, the work we have been doing on the legislative front is proving to be quite encouraging. There have been a lot of attempts to get bills introduced around amending the Advanced Clean Fleets regulation. Most of them didn’t make it but we have seen one—SB 1393—sponsored by NAFA and co-authored by Senator Roger Niello and Assemblymember Juan Alanis. This sought to establish an Advanced Clean Fleets Appeals Advisory Committee, with the goal of improving the regulation as it currently stands. Our goal here is to try and inform policy by educating legislators and providing guidance from a fleet manager perspective to enable the creation of regulations with clear and feasible pathways to compliance while ensuring a cleaner, and more sustainable future. SB 1393 was intended to create a formal process by which exemption request denials by CARB could be reviewed by an ACF Appeals Advisory Committee. This committee would be made up of government officials from relevant agencies as well as private sector representatives that have relevant fleet, vehicle and utility expertise. The aim of this appeals process was to provide CARB with the most up to date and best quality information from all the key stakeholders, and further inform all fleet managers and everyone in California by making all the information generated here publicly available. If passed, we believe SB 1393 would facilitate a higher level of compliance with ACF. I really enjoy representing fleet managers because they have an incredible and compelling narrative. They want to have a clear and feasible pathway to being compliant when it comes to ACF and other environmental regulations, so that they can continue to deliver the essential services to the communities that rely on them while at the same time being supportive of a cleaner, more environmentally sustainable future.