(a) Locomotive Operators that wish to use the Alternative Fleet Milestone Option (AFMO) instead of directly complying with the requirements set forth in section 2478.4 and section 2478.5 shall apply to CARB at least 90 calendar days prior to the requested start date of the AFMO.
(b) The AFMO is as follows:
(1) Beginning January 1, 2030, 50 percent of a Locomotive Operator's annual fleet Usage in California shall be from Cleaner Locomotives, ZE Locomotives, ZE Capable Locomotives, or ZE Rail Equipment.
(2) Beginning January 1, 2035, 100 percent of a Locomotive Operator's annual fleet Usage in California shall be from Cleaner Locomotives, ZE Locomotives, ZE Capable Locomotives, or ZE Rail Equipment.
(3) Beginning January 1, 2042, 50 percent of a Locomotive Operator's annual fleet Usage in California shall be from ZE Locomotives, ZE Capable Locomotives, or ZE Rail Equipment.
(4) Beginning January 1, 2047, 100 percent of a Locomotive Operator's annual fleet Usage in California shall be from ZE Locomotives, ZE Capable Locomotives, or ZE Rail Equipment.
(c) Prior to January 1, 2047, Operation of ZE Locomotives or ZE Rail Equipment in California may offset Operation of a Locomotive Operator's pre-Tier 4 Locomotives at the following rates each year:
(1) Each one MWh generated by Operation of a ZE Locomotive or ZE Rail Equipment in California allows two (2) MWhs of Usage generated from a Tier 2 or Tier 3 Locomotive's Operation in California to count as “Tier 4 Locomotive” Operations for purposes of calculating the Cleaner Locomotive percentage requirement in subsection (b);
(2) Each one MWh generated by Operation of a ZE Locomotive or ZE Rail Equipment allows one and a half (1.5) MWh of Usage generated from a Tier 1 Locomotive's Operation in California to count as “Tier 4 Locomotive” Operations for purposes of calculating the Cleaner Locomotive percentage requirement in subsection (b);
(3) Each one MWh generated by Operation of a ZE Locomotive or ZE Rail Equipment allows one (1) MWh of Usage generated from a Tier 0 Locomotive's Operation in California to count as “Tier 4 Locomotive” Operations for purposes of calculating the Cleaner Locomotive percentage requirement in subsection (b); or
(4) Each one MWh generated by Operation of a ZE Locomotive or ZE Rail Equipment allows a half (0.5) MWh of Usage generated from a pre-Tier 0 Locomotive's Operation in California to count as “Tier 4 Locomotive” Operations for purposes of calculating the Cleaner Locomotive percentage requirement in subsection (b).
(5) The offsets listed in subsections (c)(1) through (c)(4) above are mutually exclusive. For each MWh of Usage generated by Operation of a ZE Locomotive or ZE Rail Equipment in California, the Operator can choose one of the offsets listed above.
(d) Locomotive Operators will be evaluated on whether they meet the requirements in subsection (b) based on information submitted annually under section 2478.11.
(e) Applicants seeking approval to use the AFMO shall submit their applications to CARB following the requirements set forth in section 2478.15. If a Locomotive Operator seeks to apply after any milestone deadline has already passed, the Locomotive Operator must meet all prior fleet milestone(s) before they may apply. The Locomotive Operator shall submit the following information in the AFMO application:
(1) Locomotive Operator name and contact information, including an email address and phone number.
(2) A detailed list of all Locomotives Operated in the Locomotive Operator's fleet.
(A) Indicate which, if any, Locomotives Operate outside of California.
(B) Information for each Locomotive must be included as indicated in subsection 2478.10(a)(2).
(3) A detailed description of any plans for expansion of Locomotive Operations in California with details on how the Operator will increase service (e.g., with new Locomotives or by increasing use of current Locomotive fleet).
(4) A detailed description of how the Locomotive Operator plans to fulfill the fleet milestones.
(5) An attestation statement pursuant to subsection 2478.15(a)(2).
(6) An attestation that the Locomotive Operator understands: The AFMO represents an obligation by the Operator to transition their California Operating fleet to Cleaner and ultimately ZE Locomotives instead of directly complying with the requirements in sections 2478.4 and 2478.5. The Locomotive Operator has read and understands the penalty provisions of section 2478.16 and acknowledges that failure to meet the requirements of the AFMO constitutes a violation of this Locomotive Regulation and may subject the Locomotive Operator to penalties described in section 2478.16 for the time period during which the AFMO was in place.
(f) Approval. The Executive Officer may approve an AFMO application that satisfies the requirements for submittal only upon finding all the following:
(1) The AFMO application complies with the applicable requirements set forth in subsection (e).
(2) The AFMO application provides sufficient information to verify the Locomotive Operator's plan to meet applicable targets set in subsection (b), including detailed explanation of the information and any calculations used.
(3) The AFMO application includes an attestation statement pursuant to subsection 2478.15(a)(2).
(g) Notice of Approval. Within 45 business days after the Executive Officer has received a complete AFMO application, the Executive Officer shall issue a notice of approval if the application meets the requirements of this section.
(1) If the AFMO is approved, upon the start date for the AFMO listed in the Executive Order approving the AFMO, the Locomotive Operator shall be exempt from its regulatory obligations under the Spending Account and In-Use Operational Requirements unless revoked as described in subsection (o).
(h) Notice of Disapproval. Within 45 business days after the Executive Officer has received an AFMO application, the Executive Officer shall issue a notice of disapproval if the application is incomplete or does not meet the requirements of this section. The Executive Officer shall summarize the application deficiencies in the notice of disapproval.
(i) Duration. Once approved, an AFMO is valid in perpetuity and binds the Locomotive Operator to follow the AFMO without the ability to opt-out at a future date, unless the AFMO is revoked.
(j) Detailed Timeline Reports.
(1) At the following intervals, the Locomotive Operator shall submit a report to the Executive Officer identifying specific dates for the lease or purchase of each Compliant Equipment required to meet the milestones set forth in subsection (b). Lease or purchase means the Operator will, by the indicated deadline, enter into a lease agreement, execute a purchase contract, submit a purchase order, or otherwise take binding steps to lease or purchase the Compliant Equipment.
(A) By July 1, 2026, the Locomotive Operator shall submit specific milestone dates for the purchase of each Compliant Equipment required to meet the 50 percent Cleaner Locomotive milestone specified in subsection (b)(1).
(B) By July 1, 2030, the Locomotive Operator shall submit specific milestone dates for the purchase of each Compliant Equipment required to meet the 100 percent Cleaner Locomotive milestone specified in subsection (b)(2).
(C) By July 1, 2037, the Locomotive Operator shall submit specific milestone dates for the purchase of each Compliant Equipment required to meet the 50 percent ZE milestone specified in subsection (b)(3).
(D) By July 1, 2042, the Locomotive Operator shall submit specific milestone dates for the purchase of each Compliant Equipment required to meet the 100 percent ZE milestone specified in subsection (b)(4).
(2) Annually, beginning July 1, 2026, and by each July 1, thereafter, each Locomotive Operator shall submit the following documentation, if applicable, as proof that milestone dates listed in the Detailed Timeline Reports for the immediately preceding Calendar Year were satisfactorily met.
(A) Executed contracts showing Compliant Equipment has been ordered and is anticipated to be in Operation prior to the milestone date; and
(B) Purchase orders showing Compliant Equipment has been ordered and is anticipated to be in Operation prior to the milestone date.
(k) Detailed Timeline Report Approval. The Executive Officer may approve a Detailed Timeline Report that satisfies the requirements for submittal only upon finding all the following:
(1) The Detailed Timeline Report complies with all the applicable requirements set forth in subsection (j)(1);
(2) The Detailed Timeline Report is submitted as specified in section 2478.15; and
(3) The Detailed Timeline Report demonstrates to the satisfaction of the Executive Officer using Good Engineering Judgment that the Locomotive Operator will be able to meet the applicable milestones in subsection (b) by adhering to the timeline in the Detailed Timeline Report.
(l) Detailed Timeline Report Notice of Approval. Within 45 business days after the Executive Officer has received a complete Detailed Timeline Report, the Executive Officer shall issue a notice of approval if the application meets the requirements of this section.
(m) Detailed Timeline Report Notice of Disapproval. Within 45 business days after the Executive Officer has received a Detailed Timeline Report, the Executive Officer shall issue a notice of disapproval if the application is incomplete or does not meet the requirements of this section. The Executive Officer shall summarize the application deficiencies in the notice of disapproval. If the Detailed Timeline Report is disapproved, the Locomotive Operator may resubmit an amended Detailed Timeline Report.
(n) Extensions and Modifications.
(1) The Locomotive Operator may request an extension to any milestone date in the Detailed Timeline Report by following the procedures set forth in subsection 2478.6(b).
(2) The Locomotive Operator may apply for modification of the components set forth in the Detailed Timeline Report for good cause as long as they still meet the requirements for approval in subsection (k).
(3) The Executive Officer may approve of the request for modification if the Executive Officer determines, using Good Engineering Judgment, that the Locomotive Operator still meets the requirements for approval in subsection (k).
(o) Revocation. An AFMO that has been revoked shall not be used for compliance with this Locomotive Regulation as of the date of revocation.
(1) An approved AFMO may be revoked at any time by the Executive Officer for any of the following reasons:
(A) The Locomotive Operator fails to meet any of the requirements of this section.
(B) The Locomotive Operator fails to submit documentation pursuant to subsection (j)(2), or the documentation submitted fails to indicate necessary actions such as ordering and purchasing Compliant Equipment, installing infrastructure, applying for grants, and other progress signifying a good faith effort to meet upcoming milestone dates of subsection (b).
(C) The Locomotive Operator has failed to obtain approval of a Detailed Timeline Report by no later than one year after the submission deadline.
(D) The Locomotive Operator has failed to meet a milestone date set forth in a Detailed Timeline Report and has not successfully obtained an extension.
(E) The Locomotive Operator fails to meet any other applicable requirements of this Locomotive Regulation, including Idling, Registration, and annual Reporting Requirements.
(2) CARB will provide notice of the revocation, including the date of the official revocation, to the applicant in writing at least 30 calendar days prior to the official revocation.
(3) The notice of revocation will indicate the revocation date of the AFMO. After that revocation date, the Locomotive Operator is subject to all the requirements of this Locomotive Regulation and may incur penalties for future non-compliance as set forth in section 2478.16. The Executive Officer may assess penalties upon revocation, for the time during which the Locomotive Operator Operated under the AFMO but did not meet requirements of the AFMO, as set forth in section 2478.16.
(p) Public Transparency. CARB will upload all approved AFMO applications, annual reports, and Detailed Timeline Reports to the CARB “Reducing Rail Emissions in California” webpage for public access. CARB shall provide notice on its webpage of any disapproved AFMO application or revoked AFMO. Applicants may identify specific portions of an application as confidential and if so, CARB shall keep such information confidential to the extent permitted under California's Public Records Act, Government Code, section 7920.000 et seq.
Credits
Note: Authority cited: Sections 38560, 39600, 39601, 39658, 39659, 39666, 41511, 43013 and 43018, Health and Safety Code. Reference: Sections 39650, 39659, 41511, 43013 and 43018, Health and Safety Code.
