California Emissions Regulations Cause Concern

Distributors point to issues.

Air pollution from automobiles and industrial plants has long been a discussion point for environmental groups and political leaders. In recent years, the focus on restricting harmful pollutants has expanded to encompass the equipment industry as well.

While air pollution affects people in all parts of the country, nowhere is it more of an issue than in California, the nation's most populous state. Of particular interest to MHEDA members is the attention being given to Large-Spark Ignition (LSI) engines, those that power forklifts. The California Air Resources Board (CARB) is proposing to aggressively limit the emissions from these type of engines. The board is scheduled to vote on the proposal October 20-21, and it potentially could have a tremendous impact on material handling distributors in the state of California.

The process began when CARB passed a regulation in 2001 indicating that manufacturers—specifically the engine manufacturers who supply forklift manufacturers—would have four years to phase in compliance. Before 2001, there were no emissions rules in the state relative to lift trucks.

The latest CARB proposal calls for a two-part approach to phasing in emissions compliance: 1) to progressively lower emissions limits imposed on manufacturers of forklift engines in 2007 and 2010, and 2) to progressively lower “fleet-average” standards imposed on end-users in 2009, 2011 and 2013.

CARB views the manufacturer emission standards as the longer-term solution to LSI emissions, but wants the fleet-average standards in order to accelerate the use of cleaner equipment while the lower-emitting technology is being introduced into the market. End-users would meet the fleet-average standards by retrofitting older units and by purchasing electric units and/or cleaner spark-ignition units as their fleets are replaced. The extent to which end-users will need to accelerate their fleet turnover and/ or incorporate more electric units will vary from user to user.

The proposed regulation includes a procedure for manufacturers to voluntarily certify engines to lower emissions levels before the effective date of new standards in order to meet the market demands of end-users who are planning equipment purchases with an eye toward compliance with the first fleet-average standards in 2009. There also is a procedure for manufacturers of retrofit kits to obtain CARB “verification” of the emissions-reducing capabilities of their technologies.

“It's a huge issue and could be a problem, but it will be an equal problem for everybody.” Charles Crew Vice President Hawthorne Lift Systems (San Diego, CA)

One area that CARB is still struggling with is how to handle rental/ lease units in the fleet-average program. CARB's current proposal states that units rented for 30 days or less shall be a part of the rental company's fleet, while units rented for more than 30 days will become part of the end-user's fleet. The Industrial Truck Association has objected to this approach because it would require forklift dealers who rent trucks on a short-term basis to meet fleet-average standards. It is believed that CARB intends to modify this approach and that, most likely, only end-users, not rental companies, will be subject to the fleet-average requirements, perhaps with an exception of some kind that end-users can use to simplify the treatment of short-term rentals.

This proposal was originally slated for vote in June and September but was postponed until October.

What It Means for Distributors
Until the ruling is finalized, it is important for distributors across California to communicate so everyone is up to speed. One dealer who has been leading the push to educate his peers is Joe Hensler, president of Team Power Forklifts (Sacramento, CA), and he has not been quiet in his concerns about the proposal. “The onerous part of this is that CARB is proposing to disallow the long-term grandfathering of the existing non-compliant forklifts. All non-compliant forklifts will either have to be retrofitted, scrapped or taken out of the state of California.”

Another of Hensler's main concerns is the expense necessary to obtain a retrofit kit. “The price range so far on those is from $3,000 to $3,500 installed. We have surveyed the dealers throughout the state, and we believe that there are somewhere in the neighborhood of 12,000 non-compliant forklifts in the state of California. Multiply that number by $3,500, and you're talking about a lot of money. It seems that most dealers in the state don't recognize the severity of the situation.”

Hensler also decries the lack of outreach done by CARB to distributors. “My office is less than five miles from theirs, and I knew nothing about this until about six months ago. In fact, very few dealers that I've talked to have any idea what's going on. We've tried to rally some dealers and we've had some cooperation.”

“A lot more contributes to the overall pollution scenario in California than internal combustion forklifts.” William Billard, President Western Rail and Dock (Santa Fe Springs, CA)

Not everyone shares Hensler's doomsday predictions. MHEDA Member Holt of California (Sacramento, CA) has taken a progressive stance to the proposal. Jim Hodson, product support manager, says his company has worked very closely with CARB. “They came out and visited our facility, looked at our fleet, looked for the sticker on the engine from the engine manufacturer letting them know it's controlled and what compliance it meets.”

A third-party source was able to secure funds for Holt of California to upgrade its fleet. “We're simultaneously anxious and curious about how this will go. In the meantime, we've been proactive trying to help reduce the NOx emissions in our part of the state. We've actually retrofitted 50 of our previously uncontrolled units to be Tier-2 compliant.”

Regardless of what the final proposal ends up being, material handling distributors have varying reactions to the ruling. It potentially could have a large impact, though it's still a little too early to tell. People on a dealership level are really cognizant of it, and customers are becoming savvier in what their requirements will be moving forward.

The ruling's impact on individual dealers will be muted, according to Charles Crew, vice president of Hawthorne Lift Systems (San Diego, CA). “I have a concern about the regulations in their current form because I think it will be a difficult problem for the lift truck business in California. However, whatever does happen will likely have the same impact on all of us, so I don't feel singled out. It will be an equal problem for everybody.”

Western Rail and Dock (Santa Fe Springs, CA) has not sold forklifts since 2002, but President William Billard still feels the ruling may have an impact on his mobile rail car mover business. “Our equipment primarily has diesel engines, and they're big enough that they won't be affected. However, we all need to be aware of it moving forward because it is an important issue. Indoor pollution can be a problem, but a lot more contributes to the air pollution in this state than internal combustion lift trucks.”

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The MHEDA Journal • Fourth Quarter 2005 • Volume 34, No. 4 • Contents are Copyright © Data Key Communications, Inc.
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