CARB and the lease/rental impact

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The California regulation applies to trucks that travel in California regardless if they are registered inside or outside of California and includes all carriers that transport perishable goods using diesel-powered refrigeration systems on trucks, trailers, shipping containers and railcars operating in California.” –Ken Gillies, truck engineering manager, GE Capital Fleet Services

Here’s a good question pertaining to California’s recent greenhouse gas (GHG) emission reduction measures for commerical trucks: if a fleet leases or rents commercial trucks or equipment, is it the fleet or the leasing/rental firm responsible for making sure it complies with the Golden State’s GHG regulations?

From the perspective of the California Air Resources Board (CARB), it appears the leasing companies and rental firms are the ones that will be ultimately responsible for making sure their vehicles are compliant with the rules – thus leaving them on the hook for potentially thousands of dollars in fines.

This question dates back to modifications CARB made to its heavy-duty vehicle GHG emission reduction measure back on September 17 that changed the definition of “owner” regarding leased and rented truck tractors or trailers operating in California, according to the Truck Renting and Leasing Association (TRALA).

Those as yet still-proposed changes would render leasing companies and rental firms responsible for compliance with Environmental Protection Agency (EPA) SmartWay mandates that make up the core of California’s GHG rules – that is, unless specific language dictated by CARB gets included in rental and lease contracts. [You can click here to read about these rules in more detail.]

TRALA, however, argues that the companies owning rented and leased vehicles typically retain little control over where their customers operate their tractors and trailers – and that motor carriers can and do operate them in California, sometimes without the knowledge of the rental or leasing company.

From this perspective, then, TRALA posits that the responsibility for complying with CARB’s GHG rules should be pinned squarely on the registered operator of the vehicle, rather than on the leasing company or rental firm – and furthermore, that it should be left up to leasing companies, rental firms, and their customers to figure out who is responsible for compliance with CARB’s GHG rules through contracts tailored to fit each specific situation, instead of using CARB’s “one-size-fits-all” boilerplate.

One thing is for sure: this situation is one of one of many “side effects” of emission regulation efforts we’ll be seeing in the days ahead.

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