Supply-side regulations to accelerate the market for zero-emission heavy-duty vehicles: Best practices from major policies

Heavy-duty vehicles (HDVs) represent the second-largest source of greenhouse gas emissions in the transport sector. HDVs are also the largest contributor to air pollutants such as particulate matter and nitrogen oxide. As zero-emission HDV technology grows increasingly mature, supply-side regulations (SSRs) have emerged as an effective policy mechanism for addressing the climate and air quality impacts of HDVs. This research brief analyzes three major SSRs—California’s Advanced Clean Trucks regulation, the U.S. Phase 3 HDV GHG emission standards, and the European Union’s HDV CO₂ standards—and examines how such regulations can encourage and enable the zero-emission transition.

SSRs have three key advantages in promoting ZEVs. They provide assurance to manufacturers because they apply to all competitors in a market. They also increase the availability and diversity of zero-emission products; this helps boost demand from consumers. Finally, SSRs are easier to administer and enforce than programs aimed at consumers, as the number of manufacturers is typically small.

Best practices that have proven successful in SSR implementation include setting goals aligned with energy or economic objectives, measuring fleet-average compliance, establishing credit banking and trading systems, and creating frameworks for monitoring and reporting.

• The most effective regulations align with larger climate, clean air, or energy goals while providing interim targets that facilitate experience with new technologies and ramp up economies of scale.
• Fleet-average compliance systems reduce the cost of following the regulations and incentivize industry innovation and investments; weighting factors can help ensure that manufacturers do not overly rely on smaller HDVs for compliance.
• Well-designed credit systems encourage early compliance and advance technology adoption while avoiding excess credit accumulation through appropriate time limits.
• Public disclosure of compliance data helps build confidence and trust in regulations, especially during technology transitions.

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