Title Sponsors

Supporting Sponsor

Prepared by
1
STATE OF SUSTAINABLE FLEETS 2020
Authorship and Uses

This report was prepared by clean transportation and energy consulting firm, Gladstein,
Neandross & Associates (GNA). The opinions and analysis expressed herein are those of the
authors and do not necessarily reflect the views of report sponsors. Reference herein to any
specific commercial product, process, or service by trade name, trademark, manufacturer, or
otherwise, does not necessarily constitute or imply its endorsement, recommendation, or
favoring by sponsoring organizations or Gladstein, Neandross & Associates. No part of this work
shall be used or reproduced by any means, electronic or mechanical, without first receiving the
express written permission of Gladstein, Neandross & Associates.

Suggested citation: Gladstein, Neandross & Associates (GNA), “State of Sustainable Fleets
2020”, August 2020, Santa Monica, CA. Available at: www.StateofSustainableFleets.com

Acknowledgements

Preparation of this report was performed with sponsorship support by Penske Transportation
Solutions, Daimler Trucks North America, Shell Oil Company, and Exelon Corporation. GNA
gratefully acknowledges the essential support of, and content contributions from, these
organizations.

Many individuals from GNA made significant contributions to the complete process to prepare
and finalize this report, including:

Nate Springer, Director, Market Development (Project Manager / Author / Editor)

Eleanor Johnstone, Project Manager, Technical Services (Author / Editor)
Jonathan (Jon) Leonard, Senior Vice President, Technical Services (Author / Editor)
Alexis (Lexi) Wiley, Vice President, Strategic Communications (Author / Editor)
Cary Welsh, Associate, Programs
Celeste Griffy, Manager, Communications and Media
Rodger Lueras, Art Director, Communications and Marketing
Erik Neandross, Chief Executive Officer
JoAnne Golden, Vice President, Programs
Patrick Couch, Senior Vice President, Technical Services

Individuals from many organizations provided important inputs for this report, and/or generally
assisted to gather information. These organizations included, but were not limited to, North
American Council for Freight Efficiency (NACFE), Natural Gas Vehicles for America (NGVA),
Propane Education and Research Council, Edison Electric Institute (EEI), California Hydrogen
Business Council (CHBC), Center for Transportation and Environment, and U.S. Environmental
Protection Agency’s SmartWay program.

2
CONTENTS

About this Report………………………..…………………………………………………..……...4

Executive Summary…….…………………………………..……………………….……………..5

Reference Guide…….…………………………………………………………………………….13

Diesel and Gasoline Vehicles: Continually Raising the Baseline

Through Efficiency and Renewables………………………………..……………………...….14

Natural Gas Vehicles (NGVs): Growing Fleet Use of Near-Zero Emission,

Ultra-Low-GHG Heavy-Duty NGVs……………………………………………………..……..…37

Propane (LPG) Vehicles: Proven, Budget Friendly, Near-Zero Emission,

and Moving Towards Renewable……………………………….…………………….………..62

Battery Electric Vehicles (BEVs): Promising Results from First Deployments

and Big Commitments for the Future….…………………………….………………..………..80

Hydrogen Fuel Cell Electric Vehicles (FCEVs): Major Investments by OEMs

and Infrastructure Providers to Create Future Breakthroughs……………………………..110

Methodology…………………………………..…………………………………………………...138

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ABOUT THIS REPORT
The State of Sustainable Fleets is the first technology-neutral, comprehensive industry report that
examines the current state of the most prevalent sustainable vehicle platforms for medium- and
heavy-duty on-road transportation fleets across the U.S., while analyzing the trends shaping the
future of the industry.

Through interviews and surveys, the report gathers data from fleets who have real-world
experience deploying sustainable vehicle technologies, supplemented by data from original
equipment manufacturers (OEMs) and infrastructure providers. This data is synthesized with
leading sources of third-party research to provide insights into the current and future adoption of
four sustainable vehicle technologies:

• Natural gas vehicles (NGVs)

• Propane (LPG) vehicles
• Battery electric vehicles (BEVs)
• Hydrogen fuel cell electric vehicles (FCEVs)

As fleets adopt these technologies, they are inevitably compared to baseline diesel and gasoline
vehicles, which have historically—and will continue to—dominate the commercial fleet market.
This report also summarizes sustainability trends in these baseline technologies that serve as a
benchmark for emerging alternative fuel vehicles and advanced technologies.

The analysis includes public, private, and for-hire fleets, including school, municipal/shuttle, urban
delivery, refuse, utility, transit, short-haul, and long-haul sectors. This first-of-its-kind report includes
unique insights into vehicle sale trends, anticipated vehicle development timelines, real-world
infrastructure and fuel costs, and the growing adoption of renewable fuels.

The report is supported by title sponsors Daimler Trucks North America, Shell Oil Company, Penske
Transportation Solutions, and supporting sponsor Exelon Corporation. The report is authored by
Gladstein, Neandross, and Associates (GNA).

A Note about COVID-19

The COVID-19 crisis swept the world just as this report was being finalized. While the effect of
COVID-19 on the U.S. economy will be long-lasting, very little data on its impacts to the adoption
of sustainable technologies for the on-road transportation sector was available at the time of
publication. However, where data and insights are available, it was integrated into the report.
Additionally, a panel discussion held in conjunction with the release of this report featuring several
progressive fleet adopters to discuss their first-hand experience in investing in and adopting clean
and sustainable vehicle technology in a COVID-19 world. A recording of the discussion is available
at www.StateOfSustainableFleets.com.

4
EXECUTIVE SUMMARY
The U.S. on-road transportation industry is at a critical inflection point. While diesel and gasoline
vehicles have dominated the medium- and heavy-duty fleet sectors for decades, fleets are now
testing and purchasing more sustainable vehicle technologies in record numbers. The industry is
seeing a shift where these technologies are competing on the metrics most essential to fleet
managers—performance, range, and overall total cost of ownership (TCO).

UNIQUE KEY FINDINGS ACROSS THE INDUSTRY

Sustainable Fleets Sustainability a Top Sustainable Renewable Fuels

Are Growing Fleet Motivator Technology More Can Perform
Than a Trend
Sustainable vehicle Sustainability is the top 98% of fleets surveyed Fleets confirm there
and fuel use is motivator for currently using is no material
growing across all purchasing decisions sustainable technology performance loss
categories of medium among early- adopter expect to continue at when switching to
and heavy-duty public, private, and the same level or most renewable
alternative fuel even for-hire fleets in increase their use of fuels— renewable
vehicles: natural gas, deploying clean these vehicles and fuels. diesel, natural gas,
propane, battery vehicle technologies. and electricity—
electric vehicles, and and would use
hydrogen fuel cell more when it is a
electric vehicles. cost-neutral, drop-
in replacement.

Alternative fuel vehicle adoption—defined here as fuels and technologies other than traditional
diesel and gasoline—is expanding from the gradual uptake in niche applications seen over the
past several decades, to faster and broader adoption within the last few years ranging from Class
2a medium-duty trucks to Class 8 heavy-duty trucking. To that point, the report found that across
a broad spectrum of fleets surveyed, approximately 98 percent expect to continue the same level
or increase their use of sustainable vehicle technologies and fuels (Figure A). The report also finds
that natural gas, propane, battery electric, and hydrogen fuel cell electric vehicles, the four
sustainable vehicle technology platforms covered in this study, have all grown in terms of vehicle
sales and fuel sales over the last several years.

5
Historically, fleets have turned to alternative fuel vehicles on the promise of reduced total cost of
ownership, which typically requires lower fuel costs relative to diesel or gasoline to offset the higher
capital costs of purchasing the replacement vehicle technology. However, the report finds that
many U.S. fleets are now transitioning to clean vehicle technologies to meet environmental
sustainability objectives as companies seek to reduce climate-altering greenhouse gas emissions
and regional smog-forming pollutants.

EXPECTED USE OF CLEAN TECHNOLOGIES BY FLEET TYPE

GROW CONSTANT DECREASE
Municipal/Shuttle 20 2 1
Utility Truck 8 5 1
Urban Delivery 5 0 0
School Bus 22 5 0
Transit 28 3 0
Refuse 3 0 0
Heavy-Duty – Short Haul 13 1 0
Heavy-Duty – Long Haul 4 1 0
Heavy-Duty – Long/Short Haul 17 4 1
Totals 120 21 3
83.3% 14.6% 2.1%
Figure A: Survey results on fleet expectations for future sustainable technology use by fleet type. Source:
GNA survey of fleets for State of Sustainable Fleets, 2019-2020

While adoption of sustainable vehicle technologies is increasing, fleets acknowledge that there
are still barriers to overcome. The need for more fueling infrastructure and incremental capital
costs are consistent challenges found across all vehicle platforms. However, fleets that have
successfully deployed sustainable vehicle technologies in their regular operations have spent
considerable time to understand and adapt to new technologies in ways that remove barriers,
which fleets say is critical to maximize payoff.

The report also offers fleet insights that highlight the benefits and challenges across drop-in
renewable fuels—including renewable diesel, biodiesel, renewable natural gas (RNG), renewable
electricity, renewable hydrogen, and renewable propane. The report found that fleets prefer most
renewable fuels and experience no performance loss compared to conventional fuels when they
have successfully deployed the underlying vehicle platforms. Fleets reported that the key barrier
for more widespread adoption of renewable fuels is the often higher cost and challenges with
procuring sufficient volumes to meet their fuel use needs and goals.

Until now, there was no single industry resource that assessed numerous trends, technologies, and
fleet insights across sectors, leaving fleets to navigate the complex and ever-changing world of
clean and advanced vehicle technologies largely on their own. The State of Sustainable Fleets fills
this gap for America’s fleets and other stakeholders across the clean transportation industry. While
it is unprecedented in its undertaking, it is also incomplete. The report is intended to be a growing
body of work revisited annually with new research, data, and analysis that continuously provides
the insights necessary to advance fleet adoption of these technologies.

6
 Cross-Cutting Lessons from Early Adopters of Sustainable Technologies

Key lessons emerged across sustainable technology use from early adopter fleets, highlighted here with fleet
quotes.

Spending time to understand and adapt to new technology is necessary to maximize payoff.
“CNG was not an overnight success story…but now those trucks are just as reliable as traditional trucks.” – UPS

“You have to take time to look at new technology, its limitations, and how you can adapt your business to
make room.” – Dallas Area Rapid Transit (DART)

Sustainability is the top motivator for early fleet adopters, followed by cost benefits and regulations.
“As an early adopter in our industry, regulations played an important role as we began experimenting and
demonstrating the use of natural gas in our fleet in the early 1990’s. Once the technology was successfully
proven, Waste Management moved forwards with its transition to a natural gas fleet because it makes both
environmental and economic sense.” – Waste Management

“Regulations on diesel emissions and maintenance of the diesel exhaust systems are making it more costly,
and that’s encouraging the transition to different fuel types.” – Zeeland Public Schools

A combination of incentives and regulations has seeded California’s outsized vehicle market.
“California’s enforcement of regulations on cleaner air has helped make funding more available. Those efforts
also helped make it the ideal place for NFI to further advance its clean air goals there.” – NFI

“Incentive funding is key--the HVIP program in particular allows us to purchase more trucks with our money.
Electrification of our fleet is part of the FedEx strategy, but it makes financial sense for us to place them in
California where incentives allow us to maximize the number of electric trucks we can purchase and
accelerate technology changeover." – FedEx

Fleets prefer most drop-in, cost-effective renewable fuels after learning the underlying vehicle technology.

“Renewable natural gas offers us reduced carbon emissions. There are no operational differences."
– University of California, Los Angeles (UCLA)

“Renewable diesel consumption provides multiple benefits to Ruan. We get competitive pricing in California
for renewable diesel/biodiesel blends. It also helps bring recognition and awards for sustainability to Ruan,
which is a positive in conversations with current and prospective customers." – Ruan

Lack of sufficient fueling infrastructure and high capital costs remain top concerns for adoption.

“Money is the biggest challenge and the second is real estate - fleet parking constraints also constrain
infrastructure.” – Portland Public Schools

“Not all trucking companies are located in an area where they have access to infrastructure.”
– Total Transportation Services (TTSI)

7
SUMMARY OF INSIGHTS ON EACH SUSTAINABLE FLEET
TECHNOLOGY IN THE REPORT
The State of Sustainable Fleets report is organized such that each chapter is a standalone guide
to the current state and future trends of that technology with detailed data and analysis. In
addition, each chapter includes its own executive summary, called a “snapshot”. For the benefit
of readers and to help fleet owners decide which chapters are most relevant for their needs, the
following summarizes highlights and data from each chapter.

DIESEL AND GASOLINE VEHICLES

Continually Raising the Baseline Through Efficiency and Renewables

Diesel and gasoline vehicles are the longtime workhorses of U.S. fleets. These two “baseline” fuel-
technology platforms provide fleets with a compelling combination of commercial maturity,
product choice, performance, reliability, durability, range, payload, and capital costs. Under
ongoing regulatory pressure, manufacturers continue to reduce emissions from gasoline and
diesel vehicles and improve efficiency.

Competition from the emergence of commercially viable sustainable technologies has caused
manufacturers and fleets to push the limits of efficiency improvements and increasingly turn to
renewable fuel replacements for baseline fuels. Even though the adoption of sustainable
technologies is growing, experts expect diesel and gasoline to remain the dominant technologies
for U.S. fleets for at least the next decade—especially in the most demanding heavy-duty
applications such as long-haul trucking—presenting a unique challenge as these applications are
also the highest polluting.

UNIQUE INSIGHTS AND ANALYSIS

Efficiency Improving
Class 8 tractors adopting a suite of efficiency practices and technologies can
achieve 40-58% efficiency improvements over national averages in real world,
over-the-road applications.

Realizing Savings with Renewables

Interviewed fleets are satisfied with the performance of renewable diesel, a drop-
in replacement for diesel, and realize savings from fewer diesel particulate filter
(DPF) replacements.

KEY STATS FROM THE INDUSTRY

3X INCREASE 10 MILES PER GALLON (MPG)

California's renewable diesel consumption
nearly tripled between 2015-2019 to 620
million gallons.
Through combinations of OEM and fleet efforts,
average heavy-duty vehicle efficiency is
significantly improving and individual Class 8
tractors are achieving as much as 10 miles per
gallon (MPG) in real-world use.
 NATURAL GAS VEHICLES (NGVs)
Growing Fleet Use of Near-Zero Emission, Ultra-Low-GHG Heavy-Duty NGVs

After decades of development, medium- and heavy-duty natural gas vehicles (NGVs) have
achieved technological and commercial maturity. Fleets leading adoption of heavy-duty NGVs
report seeing low total cost of ownership (TCO) through fuel cost savings and reduced
maintenance, while simultaneously achieving steep emission reductions.

Today there are approximately 90 models of Class 2 through Class 8 compressed natural gas
(CNG) vehicles. Furthermore, commercial NGV sales grew 19 percent from 2017 to 2018 and
another 13 percent in 2019, which set a record with more than 6,000 units sold. About 85 percent
of the 53,000 registered NGVs in America today are in heavy-duty applications, specifically goods
movement, refuse, and public transit.

UNIQUE INSIGHTS AND ANALYSIS

Natural Gas Goes Strong

Over 70% of surveyed urban delivery, transit, utility, and refuse fleets plan to
continue purchasing and piloting NGVs over the next two years.

Steady and Growing

Natural gas station counts are steady again after dipping in recent years, with
fuel consumption increasing by 30% from 2015-2019.

California’s Clean Fuel Getting Cleaner

The average carbon emissions from renewable natural gas sold in California in
Q4 2019 improved 59% over the same quarter the previous year.

KEY STATS FROM THE INDUSTRY

400% INCREASE 85% OF NGVs 100% NZE CERTIFIED

In renewable natural gas
(RNG) use by U.S. fleets
over the last several years.
Registered in the U.S.
today are in heavy-duty
applications, specifically
urban goods movement,
refuse, and public transit.
Every natural gas engine from
leading manufacturer
Cummins-Westport is certified
to the “near-zero emissions”
standard, which also
improves efficiency up to 5%.

9
 PROPANE (LPG) VEHICLES
Proven, Budget Friendly, Near-Zero Emission, and Moving Towards Renewable

The propane vehicle and fuel market (also referred to as liquified petroleum gas, LPG or propane
autogas) continues to grow, driven by increasing adoption in the school bus sector and several
other fleet types. This trend is expected to continue as school district orders of new propane buses
from leading OEMs grew 26 percent from 2015 – 2019 and comprised 44 percent of all propane
vehicle sales over the same timeframe.

Medium-duty Class 3 through 6 vehicles are another strong market for propane vehicles,
supporting urban delivery vehicles, vans, utility trucks, and shuttle fleets. Approximately 90 percent
of commercial fleet propane refueling takes place at relatively inexpensive, easy-to-install private
fueling stations, complemented by 765 public-access propane stations nationally.

UNIQUE INSIGHTS AND ANALYSIS

Vehicle Costs Within Reach

The incremental capital cost for a typical medium-duty propane vehicle, relative
to its gasoline or diesel vehicle counterpart, is as low as 25% and a school bus
may be as low as 10%.

Private Fueling Wins Out

Fleets that choose private fueling pay on average 38% less for propane
compared to diesel and gasoline on a gasoline-gallon-equivalent basis.

A Clean Fuel Path Forward

Propane is a good fit for many resource-constrained fleets and for geographies
where infrastructure for other sustainable technologies are years away from scale.

KEY STATS FROM THE INDUSTRY

27% INCREASE 26% GROWTH 90% CLEANER

In national consumption
of propane for on-road
vehicles since 2015.
In school district orders of
new propane buses from
2015-2019, comprising 44%
of all propane vehicle sales
in the same time frame.
Ultra-low NOx propane engines
manufactured by ROUSH
CleanTech are certified 90%
cleaner than the EPA's current
HD NOx emission standard.

10
 BATTERY ELECTRIC VEHICLES (BEVs)
Promising Results from First Deployments and Big Commitments for the Future

The vast majority of battery electric vehicles (BEVs) in the market today are for people transport,
with more than 2,000 battery electric transit and school buses already deployed or in the process
of being procured. However, across all vehicle classes, OEMs are introducing or expanding BEV
commercialization efforts. Big name trucking fleets are placing large orders, making commitments
to purchase, and demonstrate medium- and heavy-duty BEVs in their everyday operations—a
critical first step to an eventual wider-scale commercialization. Today, at least 21 OEMs offer for
sale more than 90 medium- and heavy- duty BEV models. Collectively, OEMs expect to offer at
least a dozen more Class 3 through 6 BEV models within the next three years.

UNIQUE INSIGHTS AND ANALYSIS

Growing Near-term Adoption

Based on surveys, 69 percent of early adopter fleets plan to pilot or purchase
medium- and heavy-duty BEVs in the near-term.

Fleets Invest In Infrastructure

More than 90% of surveyed fleets that plan to use BEVs will install their own
charging infrastructure and around one third will install their own energy storage
or generation in the next 24 months.

Satisfied Fleets, Happy Drivers

Interviewed fleets consistently cite reduced maintenance costs, high driver
satisfaction, and fuel cost savings (when charging is managed) as important
benefits of BEVs.

KEY STATS FROM THE INDUSTRY

2,000+ 60+ CLASS 8 BEV $1 BILLION+

BEVs
Deployed or in process of
being procured by
MD/HD fleets today, most
with transit agencies and
school districts. Deliveries
are estimated to double
in the next 2 years.
TRACTORS
From Daimler, Volvo,
Peterbilt and BYD will be
demonstrated in California
fleet applications by the
end of 2021.
COMMITTED
By utilities throughout
the nation to support
EV infrastructure for
fleets by 2025.

11
 HYDROGEN FUEL CELL ELECTRIC VEHICLES (FCEVs)
Major Investments by OEMs and Infrastructure Providers to Create Future Breakthroughs

Although still in demonstration and pre-commercial phases, medium- and heavy-duty fuel cell
electric vehicles (FCEVs) are of interest to fleets as the technology provides a zero-emission
pathway while offering excellent acceleration and efficiency, extended driving range, and
fueling times that can be comparable to gasoline and diesel vehicles. Over the last two years,
truck and bus OEMs have announced accelerated, ambitious efforts to demonstrate and
commercialize fuel cell models in medium- and heavy-duty applications. Transit is the application
with the most operational deployments to date, with roughly 70 FCEVs in the hands of U.S. transit
agencies today, most of which are located in California. However, there are fewer than 50 public
hydrogen stations across the nation and almost all existing stations are in California and designed
to fuel light-duty FCEVs.

UNIQUE INSIGHTS AND ANALYSIS

Fuel Cell Options Growing

The number of FCEV products for medium- and heavy-duty fleets is expected to
more than double over the next two years.

Transit Leading the Way

Of the estimated 70 heavy-duty FCEVs deployed in the U.S., the majority are early
commercial transit buses, including approximately 50 in California.

Cutting Fuel & Infrastructure Costs

Retail hydrogen fuel costs are roughly double the retail price of gasoline— but,
prices have dropped by half over the past decade. Infrastructure providers have
a goal to cut costs in half again.

KEY STATS FROM THE INDUSTRY

$10S OF BILLIONS 44 PUBLIC STATIONS UNDER 10 MINUTES

Have been globally
committed, through 2030,
by governments,
infrastructure providers,
and OEMS to create
breakthroughs in fuel cell
electric vehicle
technology and fueling.
Located in California
currently sell nearly all
hydrogen used for fuel cell
electric vehicles.
Hydrogen refueling times
can be comparable to
diesel for many heavy-duty
applications including
buses and short haul trucks.

12
REFERENCE GUIDE FOR THE STATE OF SUSTAINABLE FLEETS
Natural Gas Vehicles Propane Vehicles Battery Electric Vehicles Fuel Cell Electric Vehicles

Chapter Ch. 2 Ch. 3 Ch. 4 Ch. 5

Fleet Types Leading Adoption

2015-2019 Vehicle Adoption Data
Municipal/Shuttle    
Utility Truck   
Urban Delivery    
School bus  
Transit   
Refuse  
Heavy duty - Short haul   
Heavy duty - Long haul
Heavy duty - Long/Short haul 
Share of surveyed fleets that have
used the technology (pilot or
purchase) 54% 27% 54% 11%
Share of surveyed fleets by segment who have used the technology
Public 53.8% 28.8% 56.3% 8.8%
Private 62.1% 34.5% 69.0% 17.2%
For-hire 33.3% 0% 28.6% 9.5%
Source: IHS Markit, Propane Education and Research Council, Center for Transportation and Environment, National Transit
Database, California HVIP, GNA fleet surveys.

FLEET INSIGHTS INTO THE BENEFITS AND CHALLENGES OF CLEAN VEHICLE

TECHNOLOGIES COMPARED TO BASELINE TECHNOLOGIES (DIESEL OR GASOLINE)
Natural Gas Vehicles Propane Vehicles Battery Electric Vehicles Fuel Cell Electric Vehicles
Benefits • Fuel cost • Fuel cost savings • Fuel cost savings • Torque / acceleration
savings • Comparable • Reduced • Refueling times can be
• Reduced maintenance maintenance comparable to diesel
maintenance • Very low • Torque / • Zero emission
• Reduced infrastructure acceleration • Quiet operation
emissions cost • Zero emission • Cleaner working
• Quiet • Fuel supply • Quiet operation environment
operation availability • Cleaner working • No odor
• Cleaner • Reduced environment
working emissions • No odor
environment • Quiet operation • Driver satisfaction
• Cleaner working
environment

Challenges • Limited public • Limited parts • Extremely limited • Fuel cost premium
infrastructure supply public infrastructure • No public infrastructure
• Higher vehicle • Reduced • Higher vehicle (outside CA)
capital cost mileage (relative capital cost • Limited fuel supply
• Reduced to gasoline) • Reduced range • Service and support
range • Complications • Slow refueling time limitations
• Torque / with conversions • Service and support • Sustained power output
acceleration difficulties difficulties
limitations • Reduced payload
• Reduced
cargo space

Source: GNA fleet surveys and interviews. Although generally applicable to fleet types leading adoption (see previous
chart), benefits and challenges may not apply to all fleet types or geographies.

13
Diesel & Gasoline Vehicles:
Continually Raising the
Baseline Through Efficiency
and Renewables

14
CHAPTER CONTENTS
1. SNAPSHOT OF DIESEL AND GASOLINE AS BASELINE TECHNOLOGIES ....................................... 17
Industry Standard for Performance, but with High Operational Costs and
Environmental Impacts ................................................................................................................. 17
Decades of OEM Engine Improvements and Next-Generation Ultra-Low NOx Diesel
Engines ........................................................................................................................................... 17
Fleet Adoption of Products and Practices to Improve Efficiency............................................ 18
Growing Demand for and Supply of Renewables .................................................................... 19
With Continued Improvements, ICEs to Dominate for Another Decade ............................... 20
1.1 EFFICIENCY AS A SUSTAINABLE FLEET TECHNOLOGY ............................................................... 21
Adoption of Efficiency by Fleets: Proven Cost Benefits in Larger, Heavy-Duty Fleets,
but Uptake is Unclear Among Other Fleet Types ....................................................................... 21
Fleet Insights on Efficiency: A Challenge at First, Followed by Ongoing Benefits for
Fleets Who Continue to Adopt .................................................................................................... 23
Fuel Price and Cost: Fuel is a Big Cost for Many Fleets, Which Drives Efficiency Adoption .. 24
Vehicle Model Availability: New Vehicle Efficiency is Improving to Meet Regulations
and Ultra-Low-NOx Engines May Be Coming............................................................................. 25
1.2 RENEWABLE DIESEL AS A SUSTAINABLE FLEET TECHNOLOGY .................................................... 26
Fleet Insights on Renewable Diesel: Offers Cleaner Performance and Lower
Maintenance, so Demand is High Where Prices are Attainable ............................................. 26
Renewable Diesel: Similar Power and Acceleration with Lower Particulate Matter and
GHG Emissions ............................................................................................................................... 27
Fuel Price, Cost, and Availability: Higher Price Than Fossil Diesel in Most States, Though
Supply is Growing .......................................................................................................................... 28
1.3 BIODIESEL BLENDS AS A SUSTAINABLE FLEET TECHNOLOGY ..................................................... 29
Fleet Insights on Biodiesel Blends: Cost-Effective, but it Increases Maintenance and
Seasonal Challenges .................................................................................................................... 29
Biodiesel Blends: Blended with Fossil Diesel at Low Volumes to Reduce GHG Emissions
from Diesel...................................................................................................................................... 29
1.4 RENEWABLE GASOLINE ALTERNATIVES ....................................................................................... 31
Ethanol as a Sustainable Fleet Technology: Blended in the Fuel Supply with Limited
Options for Purchase Without Flex-Fuel Vehicles ....................................................................... 31
1.5 LOOKING FORWARD....................................................................................................................31
Industry Perspective by North American Council for Freight Efficiency (NACFE) ...................... 34

15
 BENEFITS
Gasoline and diesel vehicles, longtime workhorses on U.S. roads, provide fleets with performance, range,
payload, and expected capital costs. Efficiency and renewable fuels improve them further.

CHALLENGES
Today’s new medium- and heavy-duty vehicles are cleaner and more efficient than ever before, but if
these incumbent vehicles are to maintain market dominance, OEMs must continue reducing emissions.

Fleet types leading adoption. Source: IHS Markit, Propane Education & Research Council, Center for Transportation and Environment, National Transit
Database, California HVIP, GNA Surveys 16
Benefits/Challenges: Although generally applicable to fleet types leading adoption, benefits and challenges may not apply to all fleet types or
geographies. Source: GNA surveys and interviews.
1. SNAPSHOT OF DIESEL AND GASOLINE AS BASELINE TECHNOLOGIES

With robust and proven technologies,
gasoline and diesel vehicles are the longtime
workhorses of U.S. fleets. Across all types of on-
road fleets, these internal combustion engine
(ICE) vehicles meet rigorous performance
requirements in the widest variety of duty
cycles. Gasoline and diesel also carry large
amounts of energy without the need for
specialized, costly fuel tanks as they are
energy-dense liquid fuels and relatively easy
to transport.
Industry Standard for Performance, but
with High Operational Costs and
Environmental Impacts
Gasoline and diesel vehicles provide fleets
with favorable performance, reliability,
durability, range, payload, and expected
capital costs. However, operational costs for
these vehicles can be relatively high, due to:
are setting environmental standards that are
difficult for current ICE technologies to meet.
Decades of OEM Engine Improvements
and Next-Generation Ultra-Low NOx
Diesel Engines
Significant environmental performance
improvements have been made to gasoline
and diesel vehicles to meet increasingly
stringent emissions and fuel efficiency
requirements. Today’s new light-, medium-
and heavy-duty vehicles are cleaner and
more efficient than ever before. More
specifically, a MY2018 Class 8 tractor is 6
percent more efficient than 2010 model, and
further efficiency gains are expected. 1
Tractors adopting various efficiency measures
identified in NACFE’s Run-on-Less program
have seen gains as high as 40 percent.

• Volatile and unpredictable spikes in fuel

prices because gasoline and diesel are
tied to crude oil prices that are impacted
by geopolitical factors.

• Maintenance and repair requirements

from the complexity of ICEs, conventional
transmission systems, and emission controls
(diesel vehicles require complex,
maintenance-intensive systems such as
diesel particulate filters and selective
catalytic reduction systems). PepsiCo beverages lightweight efficiency configuration,
NACFE Run on Less Regional campaign | Courtesy: North
American Council on Freight Efficiency (NACFE)
A major challenge with conventional ICE
vehicles is their environmental performance, However, if these incumbent vehicles are to
which results in regional air pollutants, air maintain market dominance, OEMs must
contaminants, and climate-changing continue reducing vehicle emissions of
greenhouse gases (GHGs). Environmental regulated pollutants and GHGs. With the
regulations and corporate sustainability goals federal government and/or the California Air

1 North American Council for Freight Efficiency, “NACFE Fleet Fuel Benchmarking Study - 2019 Update,” 29 December 2019,

accessed at www.nacfe.org.

17
Resources Board (CARB) establishing ever- in fuel consumption are directly proportional
cleaner vehicle performance requirements, to reductions in tailpipe GHG emissions—an
manufacturers face challenging tradeoffs objective that many fleets are beginning to
that result in higher production costs. strongly emphasize. Consequently, focusing
on increasing fuel efficiency has the double
To meet this challenge, original equipment benefit of improving a fleet’s TCO and
manufacturers (OEMs) are working hard to helping to meet sustainability goals. In fact, 39
manage tradeoffs and drive gasoline and percent of fleets surveyed for this study say
diesel ICE technologies toward ultra-clean they utilize technologies to improve vehicle
environmental performance. Such efficiency.
performance has already been attained by a
myriad of alternative clean vehicle types.
Notably, most long-standing OEMs that are
working to improve environmental
performance of gasoline and diesel ICE
vehicles are also developing and
commercializing at least one type of clean
vehicle technology.

In medium- and heavy-duty vehicle market

segments, neither heavy-duty OEMs nor fleets
are counting out diesel ICE technology to
maintain market dominance well into the
foreseeable future. Aided in some cases by
government funding, OEMs are making major
progress to commercialize heavy-duty diesel
engines with NOx emissions reduced to near-
zero levels (90 percent cleaner than today’s
existing emissions standard), while also
meeting GHG emission standards. Peterbilt,
Walmart and Tyson Foods are currently
demonstrating diesel engine technology that
shows this potential, while simultaneously
achieving fuel economy improvements up to Focusing on increasing fuel efficiency has the double benefit
20 percent. of improving a fleet’s TCO and helping meet sustainability
goals | Courtesy: Penske Transportation Solutions
Fleet Adoption of Products and Practices
to Improve Efficiency In addition to purchasing higher-efficiency
vehicles offered by OEMs, many fleets are
From a cost perspective alone, fleets are actively improving their TCO by investing in
strongly motivated to reduce fuel improved efficiency products and practices.
consumption by increasing efficiency. Fuel is The Environmental Protection Agency (EPA)
typically the second-largest cost component runs a voluntary program called SmartWay
of an ICE vehicle’s total cost of ownership that is designed to measure, benchmark, and
(TCO), after labor costs. Moreover, reductions improve freight transportation efficiency. An

18
increasing number of fleets choose to
participate and submit their fuel consumption
data to the EPA for inclusion in a uniform
benchmarking activity across all fleets that
can be used for comparison by their
customers.
Furthermore, as reported by the North
America Council for Freight Efficiency
(NACFE), there is “growing use of fuel-saving
systems and procedures,” with nearly half of
America’s heavy-duty trucking fleets now
using some type of technology or measure to
improve fuel efficiency. 2 Through
combinations of these OEM and fleet efforts,
average heavy-duty vehicle efficiency is
significantly improving and individual Class 8
tractors are achieving as much as 10 miles per
gallon (MPG) in real-world use.
Growing Demand for and Supply of
Renewables
OEM investments in gasoline and diesel
vehicle efficiencies are important to reduce
direct vehicle GHG emissions. However,
combustion of fossil fuels is the largest source
of GHG emissions worldwide and efficiency
improvements alone cannot achieve the
GHG reductions needed to address climate
change. For ICE fuels, renewable versions of
gasoline and diesel are emerging as potential
substitutes for their baseline fossil versions. In
particular, renewable diesel (RD) is a low-
GHG drop-in replacement for fossil diesel; it
can be used in existing diesel vehicles and
fueling infrastructure with no significant
hardware or software changes.
Although currently available only in limited
quantities, RD is now setting major milestones
2North American Council for Freight Efficiency, “2019 Annual Fleet Fuel Study,” December 2019, accessed at www.nacfe.org.
3California Air Resources Board, “2019 Volume-weighted Average Carbon Intensity by Fuel Type for Liquid Fuels,” accessed at
https://ww3.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm.
19
for reducing GHGs from America’s
transportation sector. Under current
production processes, the use of 100 percent
RD reduces GHG emissions by about 65
percent when used as a replacement for
petroleum-based diesel. 3 It also provides
important reductions in emissions of key air
pollutants. Finally, RD provides fleets with
operational benefits, the most important of
which appears to be a significant reduction in
fleet costs to operate, maintain, and
regenerate diesel particulate filters.
While RD offers significant benefits to society
and fleets, this fuel has limited availability, and
production costs can be significantly higher
than conventional diesel’s costs. Currently, RD
is most available and affordable for fleets that
operate in California and Oregon, where low-
carbon fuel programs exist to monetize the
low GHG values of RD and other renewable
fuels. This helps offset the higher production
and purchase costs of the fuel. Fleets
interviewed for this study are satisfied with RD.
They expressed interest in purchasing more of
it if available at a price comparable to fossil
diesel (with applicable incentives). The
primary challenge for wider use of RD in
America’s fleets has been its limited supply
outside of California and Oregon.
Biodiesel (BD) is also a renewable low-GHG
substitute for fossil diesel, which is typically
blended with fossil diesel at or below 20
percent (B20). BD provides certain
environmental benefits and can improve
overall fuel quality (e.g., lubricity). To realize
these benefits, regulatory mandates in many
states, especially in the Midwest, require
producers to blend specific volumes of BD
with fossil diesel. In general, fleets surveyed for
this study report mixed feelings about the
performance of BD blends. More specifically,
fleets using blends with higher percentages of
BD (e.g., B20) in colder climates face greater
risk of congealed fuel clogging filters and
traps.
With interest in and demand for RD and BD
growing, production is expanding. Between
2015 and 2019, California’s consumption of
RD nearly tripled to approximately 620 million
gallons. 4 This surge has prompted at least one
major RD supplier to introduce a blend of RD
and BD that costs less than unblended (100
percent) RD while taking advantage of
favorable properties for both renewable fuel
types.
With Continued Improvements, ICEs to
Dominate for Another Decade
For at least another decade, experts expect
diesel and gasoline ICEs to remain the
dominant powertrains for many fleets,
especially in the most challenging heavy-duty
applications like long-haul trucking. 5
However, to maintain this dominance, these
conventional vehicle types will likely need to
continue improving. This will be necessary to
comply with emerging, increasingly stringent
regulatory initiatives and growing customer
sustainability goals. If diesel engines can
remain cost-effective and meet the same
very low NOx standards met by heavy-duty
natural gas and propane engines, fleets may
prefer to continue purchasing and deploying
ICE vehicles for many decades.

4 California Air Resources Board, “LCFS Quarterly Data Spreadsheet,” updated 30 April 2020, accessed at

https://ww3.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm
5 Latheef, Abdul, “NACFE sees ‘messy middle’ of zero-emission freight,” trucknews.com, 10 December 2019, accessed at

https://www.trucknews.com/transportation/nacfe-sees-messy-middle-ahead-of-zero-emission-freight/1003095618/.

20
1.1 EFFICIENCY AS A SUSTAINABLE FLEET TECHNOLOGY
Adoption of Efficiency by Fleets: Proven
Cost Benefits in Larger, Heavy-Duty
Fleets, but Uptake is Unclear Among
Other Fleet Types
Many fleets find business benefits from
reducing GHG emissions and improving their
efficiency. The EPA SmartWay program is
designed to measure, benchmark, and
improve freight transportation efficiency.
Fleets voluntarily participate and submit their
fuel consumption data to the EPA for inclusion
in a uniform benchmarking activity across all
fleets that can be used for comparison by
their customers. Participation by fleets in
SmartWay grew 10 percent between 2014
and 2018 and efficiency improved in several
fleet segments including less-than-truckload,
truckload, and package delivery. 6
The North America Council for Freight
Efficiency (NACFE)’s Annual Fleet Fuel study
provides the most comprehensive, long-term
results about heavy-duty fleet adoption of
efficiency measures. Twenty-one North
American Class 8 trucking fleets provided
data for this annual study on tractors and
trailers in regional- or long-haul applications.
Over the 16 years of the study, NACFE found
that these fleets collectively improved their
efficiency by two percent per year, for a fleet
average of 7.27 MPG; this reflects a 22
percent increase in fuel efficiency compared
to the national average of 5.98 MPG for all
U.S. trucks (Figure 1). These fleets achieve an
average cost savings of $9,912 per vehicle.
Advancements in efficiency technology are
pushing the real-world limits of heavy-duty
vehicle fuel economy. Shell Lubricants

Figure 1: Average fleet-wide fuel economy over time for participating Class 8 fleets compared to U.S. average.
Source: International Fuel Tax Agreement and NACFE.

6GNA analysis of U.S. EPA SmartWay Carrier Performance Ranking, 2018, accessed at https://www.epa.gov/smartway/smartway-
carrier-performance-ranking. Analysis considered emissions factors for Bins 1-5 for specified fleet types. Emissions factors are a very
good proxy for fuel use in the data generated by SmartWay. However, changes in participating fleets from year to year mean
that longitudinal comparisons are general estimates.

21
 Table 1. Summary of approaches to improve overall fleet efficiency (gasoline and diesel vehicles)

General Approach Examples of Specific Improvements Utilized by OEMs and/or Fleets

• Advanced higher efficiency engines

Purchase New Vehicles • Improvements to conventional powertrains
with Higher Efficiency • Hybridization with electric drive (including regenerative braking*)
• Incorporation of lower weight chassis / body / engines (lightweighting)
• Improve aerodynamics with body / chassis / trailer modifications (e.g.,
Retrofit / Upgrade fairings)
Existing Vehicles • Purchase low-rolling-resistance tires
• Purchase products proven to reduce engine frictional losses (e.g., synthetic
engine oil)
• Incorporate systems that reduce engine idle, improve combustion (e.g.,
turbocharging), reduce fuel use (e.g., cylinder deactivation) etc.
• Smooth driving and shifting
Train Workers for • Employ cruise control, early upshifting (manual transmissions)
Efficient Vehicle • Avoid excessive speeds
Operation • Use GPS / telematics / data
• Avoid idling
• Use good maintenance practices
*Regenerative braking converts a vehicle’s kinetic energy upon vehicle deceleration into electricity that is
immediately usable or stored for later use

created the Starship Class 8 tractor to owners who implement the right practices
demonstrate the leading edge of technology and technologies.
as a material step towards reducing emissions
and increasing fuel economy in the transport
sector. Featuring a custom design of
technologies available to fleet owners today,
the average fuel economy of a 2018 cross-
country run of the Starship was 8.94 miles per
gallon. The journey achieved that result
across more than 2,300 miles of vastly different
road, weather, and terrain conditions. 7
NACFE demonstrated similar results through its
“Run on Less” project that achieved an
average 10.1 MPG in long-haul operations,
representing a 58 percent increase over the
national average for over-the-road trucking.
Taken together, these represent a minimum
40 percent, and up to nearly 60 percent,
efficiency improvement available to fleet
The Shell Starship, a hyper-efficient Class 8 tractor trailer |
Courtesy: Shell Oil Company

7 The Starship also attained 178.4 ton-miles per gallon, nearly a 2.5 times improvement over the North America average freight ton

efficiency of 72 ton-miles per gallon for trucks.

22
 Figure 2: Fleet use and purchase behavior of efficiency technologies. Source: GNA fleet survey.

Adoption of optional efficiency technology is their adoption and perception of

not uniform across all vehicles and fleet types.
OEMs report strong adoption rates of
aerodynamic packages, automated manual
transmissions (AMT), and anti-idling devices. In
less than a decade since commercially
introduced, nearly all new tractors include
AMTs. Uptake of efficiency packages are
strongest in large fleets using Class 8 tractors,
but adoption is mixed among many other
fleet types. And while efficiency solutions
appear to have proliferated in the past
decade, OEMs do not publish their sales and
there is little information on the highly
fragmented aftermarket for fleet efficiency
technologies.
Fleet Insights on Efficiency: A Challenge
at First, Followed by Ongoing Benefits for
Fleets Who Continue to Adopt
technologies they have piloted and/or
purchased to improve the overall efficiency
of their fleet vehicles and/or reduce
emissions. Collectively, such things are
referred to as “efficiency measures.”
Among surveyed fleets, 39 percent have
utilized technologies to improve vehicle
efficiency, either as part of a pilot
demonstration or integrated into their
purchase strategy. 8 More than 80 percent of
those fleets did so without previously
conducting a pilot demonstration (Figure 2).
Fleets report meaningful fleet efficiency
improvements that translate to fuel cost
savings. The largest benefits are being
realized by high-mileage fleets, such as
heavy-duty long-haul trucking. Fleets that
continue to adopt and properly apply these
technologies report ongoing benefits.

To help characterize fleet perspectives on

emerging markets for cleaner vehicles, GNA
surveyed and interviewed fleets representing
a cross section of on-road vehicle types and
applications. Fleets were surveyed about

8 The methodology GNA used to produce the following analysis is explained in more detail in Appendix I – State of Sustainable

Fleets Scope and Methodology. The survey did not ask fleets to identify specific efficiency technologies they have piloted and/or
purchased, but anecdotal comments indicate they are similar to those shown in Error! Reference source not found.2.

23
 Table 2: Summary of key insights on efficiency technologies from interviewed fleets

Summary of Fleet Experiences

Examples of Fleet Commentary
with Efficiency Technologies

“Our average MPG as a fleet, starting in 2010, has gone

up 2/10th of a mile every year.” - HD Long-/Short-Haul
• Fuel cost savings (2,220 vehicles)
Benefits

• Improved mileage
• Reduced idling “[Our fleet] worked through a lot of the initial pain, now
we are fine tuning and getting the most out of [the
technology].” - Urban Delivery (125,000 vehicles)
Challenges

“What you pay for (versus) what you have to (monitor) ....
• Increased maintenance is not worth the effort or investment.” - Municipal/Shuttle
• Can slow acceleration Fleet (<50 vehicles, in reference to a fleet-wide additive
application)

Note: Fleet applications represented are goods movement, urban delivery, light duty municipal, and school bus.
Vehicle counts indicate number of vehicles in the fleet where efficiency measures have been applied.

cost component of an ICE vehicle’s TCO,

Fleets interviewed by GNA agree that many
available efficiency technologies can
improve the fuel economy of their vehicles,
resulting in fuel cost savings. In early stages of
efficiency technology adoption, costs of
purchase, installation, training, and
maintenance can be high, reducing initial
after labor cost. Moreover, reducing vehicle
fuel consumption is directly proportional to
reducing tailpipe GHG emissions, an
objective that many fleets are beginning to
strongly emphasize. Consequently, focusing
on increasing fleet fuel efficiency has the
double benefit of improving a fleet’s TCO and

Fuel costs are second only to labor costs in a fleet’s total cost of ownership (TCO).
Costs per mile for motor carriers increased 18 percent between 2010 – 2018.

cost benefits. This is summarized in Table 2. helping to meet sustainability goals.

Fuel Price and Cost: Fuel is a Big Cost for Figure 3 illustrates this with a cost-per-mile
Many Fleets, Which Drives Efficiency breakout from 2010 to 2018 for motor carriers. 9
Adoption This breakout is generally similar for many
types of medium- and heavy-duty vehicle
From a cost perspective alone, fleets are fleets.
strongly motivated to reduce fuel
consumption by increasing efficiency.
Purchasing fuel is typically the second-largest

9 American Transportation Research Institute, “An Analysis of the Operational Costs of Trucking: 2019 Update,” November 2019,

accessed at https://truckingresearch.org/wp-content/uploads/2019/11/ATRI-Operational-Costs-of-Trucking-2019-1.pdf.

24
 Figure 3: Break-out of average marginal costs per mile for motor carriers. Source: North American Council for
Freight Efficiency/American Transportation Research Institute.

Vehicle Model Availability: New Vehicle
Efficiency is Improving to Meet
Regulations and Ultra-Low-NOx Engines
May Be Coming
Over the last decade, EPA and the U.S.
Department of Transportation (DOT) have
jointly adopted federal GHG emission and
fuel economy standards for heavy-duty
engines and vehicles. These regulations have
required heavy-duty vehicle manufacturers
to improve existing technologies for
efficiency, and/or develop new
technologies to meet the standards, which
are being phased-in from 2021 to 2027. Phase
One required engine and vehicle
manufacturers to employ more efficient
components and systems, starting with
model year 2014 for tractors, vocational
vehicles, and heavy-duty pick-up trucks and
vans, as well as the engines powering such
vehicles. On October 25, 2016, federal Phase
Two standards that were more technology-
forcing were adopted. Phase Two required
manufacturers to improve existing
technologies or develop new technologies
to meet the standards, for phasing-in from
2021 to 2027 for tractors, vocational vehicles,
and heavy-duty pick-up trucks and vans.
CARB has also adopted GHG standards for
new medium- and heavy-duty engines,
vehicles, and trailers sold in California; these
largely align with those adopted by federal
agency GHG standards. 10
Recent advancements with conventional-
drive heavy-duty diesel trucks have brought
average fuel economy up to about 7.0 MPG.
Additionally, some fleets have purchased
hybrid-drive versions of gasoline and diesel
vehicles to obtain further improvements in
fleet fuel economy. Unfortunately, these
usually carry a higher capital cost. Particularly
for larger fleets with high annual mileage,

10California Air Resources Board, “Greenhouse Gas Standards for Medium- and Heavy-Duty Engines and Vehicles”, accessed at
https://ww2.arb.ca.gov/our-work/programs/ghg-std-md-hd-eng-veh/about.

25
 Peterbilt, Walmart and Tyson Foods are currently demonstrating a diesel engine
technology that has met California’s optional Low NOx standard (0.02 g/bhp-hr) while
improving fuel economy by up to 20 percent in lab testing.

OEM commercialization of products with natural gas and propane engine

higher efficiencies has helped fleets improve
overall TCO.
Heavy-duty engine manufacturers have not
yet certified diesel engines at the near-zero
NOx levels already achieved by natural gas
and propane engines. At the writing of this
report, it looks likely that CARB staff will ask its
Board to adopt a new NOx standard of 0.05
g/bhp-hr, which will take effect for engine
model years 2024 through 2026. For model
year 2027, the standard will drop to 0.02
g/bhp-hr, which is the level that heavy-duty
technologies have already achieved under
CARB’s Optional Low-NOx Standards (OLNS).
Demonstrations have shown that heavy-duty
diesel engines can reduce NOx emission
levels by 80 to 90 percent beyond the existing
standard. 11 For example, Peterbilt, Walmart
and Tyson Foods are currently demonstrating
a diesel engine technology that has met—but
is not yet certified to—California’s optional
Low NOx standard (0.02 g/bhp-hr) while
improving fuel economy by up to 20 percent
in lab testing. 12

1.2 RENEWABLE DIESEL AS A SUSTAINABLE FLEET TECHNOLOGY

Fleet Insights on Renewable Diesel: Offers and heavy-duty transit buses. As expected,
Cleaner Performance and Lower nearly all fleets using or considering RD
Maintenance, so Demand is High Where primarily operate in California and/or Oregon
Prices are Attainable where the cost benefits described in the
section on fuel price and cost exist.
About 27 percent of surveyed fleets report
that they currently use RD, and most will To better understand typical observations,
continue using it, showing strong continued experiences and motivations involving RD
use by fleets who already use it. Respondent use, GNA interviewed several fleets. Table 3
summarizes the findings.
About 27 percent of surveyed fleets currently use renewable diesel (RD). Due to cost
and availability constraints, nearly all fleets using or considering RD primarily operate in
California.

fleets are primarily engaged in the following Some fleet representatives have noted that
three market segments: heavy-duty long- current RD supply is insufficient to meet their
/short-haul trucking, heavy-duty school buses, demands. Supplies are constrained even in

11 South Coast Air Quality Management District, staff presentations, Clean Fuels Program Advisory Group meeting, 6 February 2020,

accessed at https://www.aqmd.gov/docs/default-source/technology-research/clean-fuels-program/clean-fuels-advisory-
agenda_2-6-20.pdf?sfvrsn=28.
12 Berg, Tom, “Opposed-Piston Diesels Enter Limited Production,” Truckinginfo.com, 9 November 2018, accessed at

https://www.truckinginfo.com/319074/opposed-piston-diesels-enter-limited-production.

26
California, which receives the largest RD
volumes in North America due to market pull
created by its Low Carbon Fuel Standard.
Fleet representatives specifically mentioned
that domestic production should be
increased to improve supply and reduce
costs as the largest volumes are currently
imported from Asia. As described, fleets
operating outside of California and Oregon
can find it especially hard to purchase
meaningful, affordable volumes of RD.
Renewable Energy Group, Inc. (REG), a
producer of both RD and BD, is now
marketing blends of these two low-carbon
diesel substitutes with an optional mix of
conventional diesel. This marketing strategy
seeks to extend RD’s availability and reduce
costs for fleets operating outside of low-
carbon fuel markets. REG customizes the
blend to ensure the resulting product is a
drop-in, renewable substitute for
conventional diesel that provides major GHG
reductions. 13
Renewable Diesel: Similar Power and
Acceleration with Lower Particulate
Matter and GHG Emissions
RD is a low carbon drop-in replacement for
conventional diesel as it meets the same
standards and specifications encumbered
under ASTM14 International Standard D975-12a.
The result is that RD can be used in any existing
diesel vehicle or fuel tank, without any
modifications.
As made today, 100 percent RD reduces
GHG emissions by about 65 percent
compared to petroleum-based diesel. 15 It

Table 3. Summary of key insights on renewable diesel from interviewed fleets.

Summary of Fleet Experiences

Examples of Fleet Commentary
with Renewable Diesel (RD)

“We don’t have to clean our traps as often . . . because

we can’t get the RPM up as high and the engine
• Fuel cost savings (CA, OR) temperature doesn’t get as high [as it does with diesel].”
Reduced maintenance – Heavy-Duty Short/Long Haul (130 vehicles)
Benefits

•
• Power and acceleration
• Reduced odor “[RD] is one of the easiest possible things that you can do
• Reduced emissions (to improve sustainability) . . . it’s hard to understand why
legislatures aren’t figuring out ways to make RD widely
available.” – Heavy-Duty Short/Long Haul (130 vehicles)
Challenges

“Because renewable diesel isn’t readily available in the

• Higher fuel cost
state [of Washington], there is a high premium to get the
(outside of CA, OR)
product to [some of our hydro-electric] sites.”
• Limited supply
– Utility Fleet (1,100 vehicles)

Note: Fleet types represented are urban delivery, utility, school bus, and heavy-duty long/short haul
applications. Vehicle counts indicate numbers of vehicles operating on RD.

13 See REG’s webpage at https://www.regi.com/products/transportation-fuels/reg-ultra-clean-diesel.

14 ASTM, formerly the American Society for Testing and Materials, develops international standards for materials, products, systems,
and services used in construction, manufacturing, and transportation.
15 California Air Resources Board, “2019 Volume-weighted Average Carbon Intensity by Fuel Type for Liquid Fuels,”

https://ww3.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm.

27
also provides important reductions in
emissions of key air pollutants, when
combusted in diesel engines instead of fossil
diesel. Consequently, diesel fleets that switch
to RD help address global climate change
and improve local air quality.
Although its chemistry is nearly identical to
conventional diesel, RD does differ in some
properties and combustion characteristics. 16
This translates into operational differences for
fleet users, most of which are positive. Key
examples of such differences are:
• Engines burning RD produce roughly 30
percent less diesel particulate matter
(DPM). Diesel particulate filters (DPFs) are
designed to trap DPM on modern diesel
vehicles. With much less DPM flowing into
DPFs on RD-fueled engines, fleets using RD
experience significantly reduced costs to
operate, maintain and regenerate DPFs. 17
• RD has a significantly higher cetane rating
than conventional diesel (about +25
percent). Cetane measures how quickly a
fuel auto-ignites inside a compression
ignition engine. RD’s much higher cetane
rating may help provide smoother
combustion, improved throttle response,
and/or better starting performance in
colder temperatures.
• RD has a volumetric energy content about
3 to 4 percent lower than conventional
diesel. This means that a given volume of RD
holds less energy than the same volume of
16 Renewable diesel’s refining process removes more impurities than the process of refining fossil (petroleum)-based diesel, thereby
reducing criteria pollutants.
17 Gladstein, Neandross & Associates, “Renewable Diesel as a Major Transportation Fuel in California: Opportunities, Benefits and
Challenges,” August 2017, accessed at https://www.gladstein.org/gna_whitepapers/renewable-diesel-as-a-major-transportation-
fuel-in-california-opportunities-benefits-challenges/.
18 Thomson Reuters, “Edited Transcript: Q2 2019 Neste Oyj Earnings Call,” 25 July 2019, accessed at
https://www.neste.com/corporate-info/investors/financials.
19 California Air Resources Board, “LCFS Quarterly Data Spreadsheet”, updated 30 April 2020,
https://ww3.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm.
28
ULSD, resulting in proportionally lower fuel
economy and a slightly reduced driving
range (all else being equal). However, this
slightly negative attribute may be offset by
the high fuel cetane rating effect.
Fuel Price, Cost, and Availability: Higher
Price Than Fossil Diesel in Most States,
Though Supply is Growing
RD is more costly to produce than conventional
diesel. This makes it necessary to sell as a
premium-priced diesel substitute except in
states or regions with regulatory frameworks
that offset higher costs. Specifically, California
and Oregon established low-carbon fuel
markets that monetize RD’s emissions
reductions. Fleets in these two states can readily
obtain RD in bulk volumes at about the same
price as conventional diesel. However, outside
of these carbon markets, RD is significantly
more expensive and difficult to procure at a
competitive price.
Global production is growing, and leading
producer Neste reports strong demand in
North America. 18 Between 2015 and 2019,
California’s consumption of RD nearly tripled
to approximately 620 million gallons. 19 The
outsized demand has prompted at least one
major supplier to introduce RD blended with
BD, which is another low-carbon substitute for
conventional diesel. Whether blended with
RD or conventional diesel, use of BD is
effectively limited to 20 percent by volume
1.3 BIODIESEL BLENDS AS A SUSTAINABLE FLEET TECHNOLOGY
Fleet Insights on Biodiesel Blends: Cost- Biodiesel Blends: Blended with Fossil
Effective, but it Increases Maintenance Diesel at Low Volumes to Reduce GHG
and Seasonal Challenges Emissions from Diesel

In GNA’s survey, 34 percent of fleets have
piloted or purchased BD (in varying blends, up
to B20), and 22 percent intend to pilot or
purchase BD in the next 24 months. Most of
the fleets that purchased BD blends did so
without an initial pilot demonstration. Table 4
summarizes fleet feedback received
regarding experiences with BD from follow-up
interviews.
Like RD, BD can reduce emissions (smog
pollutants and GHGs). Currently, BD and RD
are produced from the same organic fats
and oils, and both are considered renewable
fuels. However, their production processes
are very different. The key difference is that
BD is produced using esterification, which
results in an oxygenated fuel. In effect, this
creates blend limits for BD, and prevents it
from being used as a drop-in diesel

34 percent of surveyed fleets have piloted or purchased BD (in varying blends, up to

B20), and 22 percent intend to pilot or purchase BD in the next 24 months.

In general, the surveyed BD-using fleets report replacement except when blended at
mixed feelings about the performance of BD relatively low percentages with conventional
blends in their diesel vehicles. As indicated in diesel or RD.
Table 4, fleets using higher BD blends (e.g.,
Blending BD at or below B20 provides a drop-
B20) in colder climates face greater risk of
in replacement for 100 percent fossil diesel
congealed fuel clogging filters and traps.
that expands use of renewable fuel in diesel
One fleet that operates nationally noted that
fleet applications and delivers environmental
nearly all of its vehicles had this issue in the
benefits. Blending biodiesel into diesel can
winter of 2018-2019. This risk can have an
also improve overall fuel quality (e.g.,
added dimension for long-haul fleets that
lubricity). For these and other reasons,
routinely travel from warm climates to colder
regulatory mandates in many states—
areas where fuel congealing exposure can
especially in the Midwest—require producers
occur at the trip’s final destination even
to blend specific volumes of BD into the diesel
though it did not exist at the trip’s origin. Some
pool.
fleets discussed the need to achieve
improvements with how engines tolerate BD
blends, and/or for manufacturers to adopt
more fleet-friendly engine warranties.

29
 Table 4. Summary of key insights on biodiesel from interviewed fleets

Summary of Fleet Experiences

Examples of Fleet Commentary
with Biodiesel

“In theory there is a small drop in fuel economy when you blend
Benefits

• Fuel cost savings BD, but because of new engine controls, we haven’t seen [that]
• Reduced emissions when switching to a [B5] blend – it is a comparable performance
[to diesel].” – Municipal Fleet (1,400 transit buses)

“We have to phase down our blend percentage as the

temperature drops, but the tradeoff is that they can still treat it
with additives. There’s a bit of an art to it.” – Heavy-Duty
Short/Long Haul (4,000 vehicles)
Challenges

• Fuel congealing
• Filter congestion
• Tank contamination
“We only use high concentrations of biodiesel during non-winter
months. There are issues when a driver starts a long haul in the
South where (cold weather) won’t be an issue for BD until it
reaches a climate that does not react well with the BD.”
– Heavy-Duty Short/Long Haul (10,000 vehicles)

“BD supports the growth of microbes…so you have to be diligent

about sampling your fuels and treating tanks.” – Municipal Fleet
(1,400 transit buses)

Note: Fleet types represented are urban delivery, transit, and heavy-duty long/short haul applications.
Vehicle counts indicate numbers of vehicles operating on BD blends.

BD blend limits are essentially set by the
warranty provisions of major diesel engine
manufacturers. According to the U.S. BD
industry, “most major engine companies have
stated formally that the use of blends up to
B20 will not void their parts and workmanship
warranties.” 20 As this implies, fleets do not
routinely use blends above B20. In fact, the
most commons blend for fleets are B5 and B2
(two percent BD). At these low blend levels,
BD meets ASTM standard D975. 21
According to the National Biodiesel Board,
today “there are thousands of retail stations”
that sell BD blends at public and private filling
stations. Low-level BD blends “offer an easy
alternative for fleets” to improve
environmental performance and displace
fossil diesel fuel. Detailed statements and
data from the BD industry about the fuel’s
environmental benefits and sustainability can
be found at www.biodiesel.org.

National Biodiesel Board, “OEM Information,” accessed at https://www.biodiesel.org/using-biodiesel/oem-information.

20

See DieselNet “Fuel Regulations” for details about which BD blend levels meet various ASTM Standards, and the associated
21

conditions, accessed at https://dieselnet.com/standards/us/fuel_biodiesel.php.

30
1.4 RENEWABLE GASOLINE ALTERNATIVES
Ethanol as a Sustainable Fleet
Technology: Blended in the Fuel Supply
with Limited Options for Purchase
Without Flex-Fuel Vehicles
Ethanol is a low-carbon renewable fuel that
is widely used in transportation applications.
Ethanol can be used in its near-neat form
(~90 percent) as an alternative to gasoline
for spark-ignition ICE vehicles. Today,
however, ethanol’s primary use for U.S.
vehicle applications is as a low-level
blending agent with gasoline. Almost all
gasoline sold in America contains some
ethanol; 22 the vast majority is mixed with 90
percent gasoline to form E10. The ethanol is
added to gasoline to increase octane
rating, add oxygen to help reduce certain
emissions, and increase renewable fuel use
in the U.S. transportation sector. Although
not commonly dispensed to date, EPA has
approved gasoline-ethanol blends for
newer vehicles with up to 15 percent
ethanol (E15).
Furthermore, tens of millions of light-duty flex-
fuel vehicles (FFVs) are on U.S. roads today.
1.5 LOOKING FORWARD
For at least another decade, most experts
expect diesel and gasoline ICEs to remain the
dominant powertrain for many fleets,
especially in the most challenging heavy-duty
applications like long-haul trucking. 23
However, to maintain this dominance, these
conventional vehicle types will likely need to
continue improving. This will be necessary to
22U.S. Department of Energy, Alternative Fuels Data Center, “Ethanol,” accessed at https://afdc.energy.gov/fuels/ethanol.html.
23Latheef, Abdul, “NACFE sees ‘messy middle’ of zero-emission freight,” trucknews.com, 10 December 2019, accessed at
https://www.trucknews.com/transportation/nacfe-sees-messy-middle-ahead-of-zero-emission-freight/1003095618/.
31
Renewable gasoline is a bio-
based version of conventional
(fossil) gasoline. As of early 2020,
there does not appear to be any
significant production or use of
renewable gasoline as a
replacement for conventional
gasoline in U.S. vehicles.
Consequently, it is not further
discussed in this report.
FFVs are capable of using E85, which is up to
85 percent ethanol blended with gasoline.
Although E85 fuel can be purchased at
more than 3,000 gasoline stations in the U.S.,
the actual volume of ethanol consumed as
E85 is currently dwarfed by ethanol volumes
used as E10 in conventional gasoline
vehicles and FFVs.
Ethanol is an important alternative fuel that
displaces gasoline in U.S. fleet applications.
However, its primary role is as a blending
agent for gasoline, making ethanol
adoption largely automatic and
indiscernible.
comply with emerging, increasingly stringent
regulatory initiatives. In addition, incumbent
gasoline and diesel ICE vehicles must meet
growing sustainability goals that are being
adopted by decision makers for public and
private fleets. Manufacturers must accelerate
gasoline and diesel ICE technologies towards
achievement of ultra-clean environmental
performance. This performance has already
been attained by vehicles with zero tailpipe
emissions (battery electric and fuel cell
electric vehicles), as well as vehicles with
near-zero-emissions using progressively larger
volumes of renewable fuels (natural gas and
propane vehicles).
Below are key factors for fleets to monitor as
gasoline and diesel ICE technologies are
pushed toward achieving these ends.
Fuel and Emissions Legislation and
Regulations
Several key legislative activities are under
consideration and/or in development that
seek to further reduce motor vehicle
emissions, including smog-causing NOx and
GHGs. These may have important
ramifications for fleet procurement options for
specific types of vehicles and fuels.
The California Air Resources Board (CARB) has
long set motor vehicle regulations in
California, but as the country’s most populous
state and largest economy, these regulations
tend to reverberate across the U.S. For
California-based fleets, CARB is strongly
pushing to accelerate commercialization
and wide-scale deployment of zero-emission
vehicles (ZEVs), across a wide array of
applications. In June 2020, CARB approved a
regulation that would require OEMs to sell
zero-emission commercial vehicles starting in
2024 and ratcheting up regularly through
2035. The federal EPA is also moving ahead
with new regulatory action that could impact
heavy-duty fleets across the U.S.
Examples of key potential new regulatory
efforts that involve both EPA and CARB are
briefly summarized here:
32
• Cleaner Trucks Initiative: EPA is now
pursuing a national Cleaner Trucks
Initiative (CTI), which will update federal
emissions standards applicable to heavy-
duty engines and trucks. CTI is likely to
result in a more-stringent standard for NOx.
CARB is working on a similar initiative.
Advanced natural gas and propane
engines have already been certified at 90
percent cleaner NOx levels. Adoption of a
stringent new national NOx standard is
especially important to rapidly phase in
ultra-clean trucks in areas like Los Angeles,
as needed to attain federal ozone
standards.
• Potential Implications to Fleets: It is difficult
to predict how heavy-duty fleets will be
impacted if and when these potential
regulations are enacted and
implemented. Potential new low-NOx
regulations from CARB and EPA could
have important ramifications to fleets. In
part, this will depend on whether EPA
actions are aligned with CARB regulations.
It seems very likely that, at least for
California and other states that use
CARB’s regulations, a new NOx standard
will be adopted that will require diesel
engine technology to achieve much
lower NOx emissions. As OEMs improve
diesel engines to meet new more-stringent
NOx regulations, costs to add new
emissions control technology are likely to
increase. It is possible that operational
costs will also increase. This can impact the
TCO of diesel vehicles for affected fleets,
and influence decisions to adopt cleaner
vehicle technologies as alternatives.
If diesel engines can cost-effectively meet the
same very low NOx standards already met by
natural gas and propane engines, fleets may
be compelled to continue purchasing and
deploying diesel vehicles for decades.
OEM Investments in Efficiency and Air
Quality
Engine and vehicle manufacturers continue
to invest in hardware and software that can
improve the emissions profile and engine
efficiency of gasoline and diesel fleet
vehicles. It appears that regulators (especially
CARB) will continue adopting stringent
requirements for reduced tailpipe emissions of
both NOx and GHGs. Achieving such
requirements can pose very challenging
tradeoffs for manufacturers of diesel engines
and vehicles, and production costs are likely
to rise (e.g., adding hybrid drive trains, if borne
out by markets). By contrast, manufacturers of
commercially available clean fuel medium-
and heavy-duty vehicles have already
achieved near-zero or zero NOx emission
levels without hybridization, while meeting
tailpipe GHG requirements.
OEM investments in efficiency are very
important to reduce direct-vehicle GHG
emissions. However, the most important
metric for addressing vehicle contributions to
climate change is to reduce life-cycle GHG
emissions (those from fuel production and
end use). Potentially, all types of heavy-duty
ICE vehicles can progressively combust larger
volumes of low-GHG renewable fuel, instead
of their baseline fossil versions. Renewable
diesel and renewable natural gas are both
already produced in large volumes and are
delivering major GHG reductions in heavy-
24 CDP North America, Inc., “Cascading Commitments: Driving ambitious action through supply chain engagement,” 2018/2019,
accessed at https://6fefcbb86e61af1b2fc4-
c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms/reports/documents/000/004/072/original/CDP_Supply_Chain_R
eport_2019.pdf?1550490556.
25 IKEA, “IKEA Group commits to zero-emissions targets for home delivery in five major cities by 2020,” 13 September 2018,
accessed at https://www.ikea.com/us/en/this-is-ikea/newsroom/ikea-group-commits-to-zero-emissions-targets-for-home-delivery-
in-five-major-cities-by-2020-pub33626f11.
33
duty vehicle fleets. However, much greater
volumes will be needed to entirely switch the
U.S. heavy-duty on-road transportation sector
over to these fuels. Renewable propane is just
emerging as a potential replacement for fossil
propane.
Sustainability Expectations of Companies
Hiring Fleets
Many large shippers (e.g., Walmart, Nike, and
IKEA) have launched major sustainability
initiatives that seek to reduce the GHG
emissions associated with movement of their
goods. In the past five years, the number of
companies setting sustainable supply chain
goals has grown from 14 to 115 , representing
$3.3 trillion in procurement spending. 24 Some
are setting specific goals for their logistics
providers; for example, IKEA is aiming for 100
percent zero-emission home deliveries by
2025 in five major inner cities by rapidly
transitioning to battery electric last-mile
delivery trucks. 25 This is also occurring with
large government agencies operating their
own fleets or using contracted fleets. It is
clearly in the interest of fleet managers to
continually monitor existing and upcoming
sustainability initiatives of their parent
organizations or customers, to ensure that
they stay well ahead of trends and
requirements regarding the specific ways that
they transition toward low emissions of GHGs
and pollutants.
Industry Perspective by North American Council for Freight Efficiency (NACFE)

Aggressively pursuing energy efficiency

technologies and practices today on gasoline
and diesel commercial trucks helps save fuel
and reduce emissions now and into the future
while alternatives, including zero-emission ones,
begin to scale. They are also essential to using
less energy on the new alternatives. They are
even more necessary as the range of these
alternative-powered trucks will likely be about
one-third of the gasoline and diesel trucks
causing real concerns and resulting in modified
operational practices to use them.

Current State of Energy Efficiency on Gasoline

and Diesel Trucks

Gasoline and diesel-powered commercial

trucks will continue to be on the road for many
decades and in newly produced trucks likely
until 2050. The opportunity to dramatically
improve their costs and reduce their
environmental impact is extremely large, even
during times of growing alternatives. There even
Schneider sleeper tractor and trailer with freight
exists, as noted in this report, ways to decrease efficiency technologies) | Courtesy: NACFE
the impact of trucks already on the road,
including driver education, training and incentives, powertrain parameters customization, use
of low viscosity lubricants, more fuel-efficient replacement tires, better maintenance practices
and others. New production tractors and trailers can be 40% better than the average, but many
fleets are not taking full advantage of the offerings and manufacturers are not yet bringing the
total cost of operation necessary for wide scale adoption. Opportunities exist in tractor and
trailer aerodynamics, powertrain options, hoteling, lightweighting and others.

These are all options available today and these technologies can be improved for even greater
savings. Additionally, to lower their current fuel expense, fleets have told NACFE of three other
factors motivating them to aggressively pursue energy efficiency actions. They include:

• Future, possibly higher fuel prices. The amount of fuel a tractor and trailer will burn over
its lifetime is somewhat set based on the configuration built. Buying more fuel-efficient
equipment lowers the risk of higher costs.

34
 • Regulations. The US EPA Greenhouse Gas Phase 2 emission regulations increase in
January 2021 and truck makers are required to produce more efficient products. Fleets
understand this and know they should continually investigate and buy technologies to
stay up with the OEM’s offerings.
• Sustainability. All companies, whether they are consumer facing brands or not, are
expected to operate their businesses more sustainably. The amount of energy used in
transporting goods is very large and presents a good opportunity for improvement.

Future State of Efficiency

With growing levels of goods movement and increased pressure for cleaner transport, trucking
is facing growing demand for near-zero or zero-emission solutions. As a result, the list of
alternative fuels and related powertrains is growing, and these technologies are beginning to
reach the point of production-quality vehicles. In the past, natural gas powertrains lead the way,
but the bulk of the current investment is going into newer options like battery and fuel cell
electric vehicles. In our report, Viable Class 7/8 Electric, Hybrid, and Alternative Fuel Tractors
published in December 2019, we conclude that by 2040 electric based heavy-duty tractors
(including BEV, FCEV) will become the dominate alternative replacing diesel and many other
applications, namely medium-duty trucks far earlier. There will be, what the authors note, a
“messy middle” until CBEVs and FCEVs alone power these trucks, as alternatives offer significant
improvements over the diesel and gasoline baselines.

Our Conclusions for Heavy-Duty Tractors

1. North American freight movement is becoming more predictable with dedicated

routes enabled by e-commerce and other technologies, offering better duty cycles
for alternative powertrains.
2. Each alternative fuel powertrain offers benefits in the short term compared to current
diesel and may have enough duty cycle scale to offer TCO and emission savings.
3. CBEVs and Fuel Cell trucks will be capable of lower total cost of ownership in the 2030
timeframe.
4. Vehicle specifications will be more optimized for the duty cycle and technology of
the first user, limiting the applicability of the equipment for second or third users.
5. There will be a “messy middle” until CBEVs and FCEVs alone power these trucks, as
alternatives offer significant improvements over the diesel and gasoline baselines.
6. A future zero-emission freight world will only have electric based vehicles (CBEV, FCEV,
or catenary electric) powered well to wheel from truly renewable sources such as
hydro, solar and wind.

Finally, gasoline and diesel internal combustion engines continue to be improved but are quite
mature after decades of dominance. Improvements in performance, cost and weight will be
dramatic over the next few decades for the alternatives.

35
 Best Use of Efficiency Technologies

The typical heavy-duty tractor has 200 gallons of diesel fuel on board. For an average single
driver rig, that is enough fuel for at least three days of driving. Most natural gas, electric or even
hydrogen fuel cell trucks will be designed with only enough energy capacity for a single shift
operation before needing a charge or fueling event. It is imperative that these new trucks are
as efficient as possible with their aerodynamics, tires, powertrain programing, lightweighting,
hoteling technologies, etc. to limit the operational changes needed to use them.

An aggressive program to increase the energy efficiency technologies on today’s tractor-trailers

is not an EITHER/OR decision with respect to the growing alternative technologies but rather an
AND, or better yet, even a MUST!

Meijer day cab tractor and trailer with freight efficiency technologies, NACFE Run on Less Regional | Courtesy: NACFE

36
Natural Gas Vehicles:
Growing Fleet Use of Near-
Zero-Emission, Ultra-Low-
GHG Heavy-Duty NGVs

37
Chapter Contents
2. SNAPSHOT OF NATURAL GAS IN FLEET APPLICATIONS ............................................................... 40
Higher Capital Costs, Lower Total Cost of Ownership ............................................................... 40
Robust CNG Model Availability, Near-Zero Emission Engines ................................................... 41
Increased Public Fueling Infrastructure Needed, Decline in LNG ........................................... 42
Growth in Renewable Fuel and GHG Emissions Reductions .................................................... 42
Efficiency Improvements through Government-Industry Collaborations ............................... 43
2.1 FLEET ADOPTION AND INSIGHTS ................................................................................................. 44
Adoption of Natural Gas Vehicles by Fleets 2015-2019: Heavy-Duty Eclipses All Others
and is Growing............................................................................................................................... 44
Fleet Insights: Proven Performance with Positive Total Cost of Ownership for Fleets with
High Fuel Use and/or Long Asset Lives ........................................................................................ 45
Renewable Natural Gas (RNG): Growth and Improved Sustainability as a Drop-In
Replacement for Fossil Natural Gas that Can Be Lower Cost .................................................. 47
2.2 NATURAL GAS AS A SUSTAINABLE FLEET TECHNOLOGY ........................................................... 51
Fuel Price and Cost: Competitive and Steady, but Diesel Efficiency Gains are Eroding
the Advantage .............................................................................................................................. 51
Fuel Availability and Infrastructure: Recent Consolidations and Shift Away from LNG
Suggests Future CNG Station Growth ......................................................................................... 52
Vehicle Model Availability: More than 90 Robust Offerings That Are Shifting to Near-
Zero Emission .................................................................................................................................. 53
2.3 LOOKING FORWARD ...................................................................................................................56
Industry Perspective by Natural Gas Vehicles for America (NGVA) .......................................... 59

38
 FLEET TYPES LEADING ADOPTION

BENEFITS
Today’s market for medium- and heavy-duty NGVs is robust and diverse with natural gas vehicles – and
fuel – providing growing emissions benefits.

CHALLENGES
High capital costs for both vehicles and infrastructure, combined with fueling that is not yet widespread or
fast enough means natural gas is not the solution for all fleets today.

Fleet types leading adoption. Source: IHS Markit, Propane Education & Research Council, Center for Transportation and Environment, National Transit
Database, California HVIP, GNA Surveys 39
Benefits/Challenges: Although generally applicable to fleet types leading adoption, benefits and challenges may not apply to all fleet types or
geographies. Source: GNA surveys and interviews.
2. SNAPSHOT OF NATURAL GAS IN FLEET APPLICATIONS
After more than two decades of strong OEM
development, medium- and heavy-duty
natural gas vehicles (NGVs) have achieved
technological and commercial maturity.
Today there are approximately 90 models of
Class 2 through 8 compressed natural gas
(CNG) vehicles—the dominant type of on-
board fuel system for most U.S. fleet uses.
Commercial NGV sales grew 19 percent from
2017 to 2018 and another 13 percent in 2019,
which set a record for more than 6,000 units
sold.
The greatest successes for NGVs— in both
vehicles deployed and fuel consumed—have
occurred in the Class 7/8 vehicle segment,
specifically in urban delivery, refuse, and
public transit. Of the 53,000 registered NGVs in
operation today, more than 85 percent are in
these heavy-duty applications. 26
Fleets that use heavy-duty NGVs report seeing
low total cost of ownership (TCO) through fuel
cost savings and reduced maintenance,
while simultaneously achieving steep emission
reductions. However, fleets also report that
two remaining barriers—limited numbers of
public fueling stations and reduced vehicle
performance compared to baseline diesel
vehicles—are hinderances to more-
widespread deployments.
Higher Capital Costs, Lower Total Cost of
Ownership
The average incremental cost for a new
heavy-duty natural gas semi-tractor today is
approximately 40 percent more relative to a
26 GNA analysis of IHS Market insight data.
27 San Pedro Bay Ports, “2018 Feasibility Assessment for Drayage Trucks,” prepared by Gladstein, Neandross & Associates, April
2019, accessed at https://www.gladstein.org/gna_whitepapers/2018-feasibility-assessment-for-drayage-trucks/.
28 U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations”, downloaded December 2019, accessed
at https://afdc.energy.gov/stations/#/analyze?country=US&access=public&access=private&status=E&status=P&status=T.
40
comparable new diesel model. 27 Incremental
costs for natural gas refuse trucks and transit
buses are lower, at 10-20 percent above the
cost of a comparable diesel model, owing to
the higher cost of the baseline diesel vehicle.
In addition, natural gas fueling stations are
more expensive to build and permit
compared to diesel stations. Despite these
higher capital costs, fleets switching to NGVs
have been able to achieve lower total cost of
ownership while greatly improving their
emissions profile. Key cost reduction factors
include:
• Vehicle Incentives: Many public agencies
offer incentives to achieve reductions in
smog-causing emissions; these incentives
can help offset vehicle costs. Incentives
for NGVs have been especially prominent
in states with poor air quality like California
and Texas. Additionally, many natural gas
fuel providers have begun offering
incentives to encourage heavy-duty NGV
use.
• Fuel Cost Savings: Natural gas fuel prices
at public stations are steady and typically
lower than diesel or gasoline on an
energy-equivalent basis. The price of CNG
at public stations has averaged 14
percent lower than diesel prices over the
past five years. 28 Prices have remained
low in part due to a federal tax credit that
 was renewed through 2020. 29 The price of
CNG at most private stations averages 25
percent lower than public stations, 30 and
for very large fuel users (e.g., transit and
refuse fleets), the savings can be even
greater.
• Infrastructure: Although natural gas fueling
stations are expensive to build, larger
heavy-duty NGV fleets can negotiate fuel
contracts with station operators to receive
preferential prices for volume
commitments, or fleets may choose to
construct their own private stations.
Smaller fleets that do not use sufficient
volumes of fuel to justify construction of
their own private station can use the local
network of public-access fueling stations.
Robust CNG Model Availability, Near-
Zero Emission Engines
"optional” standard for nitrogen oxides (NOx).
This was the first engine of any kind to be
certified to this “near-zero-emission” NOx level
(0.02 g/bhp-hr). All three of the MY 2021
heavy-duty natural gas engines CWI sells are
certified to this ultra-low NOx standard. These
engines achieve a 90 percent or higher
reduction in NOx emissions compared to the
cleanest available diesel engines. The latest
CWI engines also offer efficiency
improvements (up to five percent) relative to
previous generations.
This heavy-duty natural gas engine
technology has provided U.S. cities and
regions that have poor air quality (especially
regions in California) with an important tool to
reduce mobile source emissions and help
attain federally imposed air quality standards.

Today’s market for medium- and heavy-duty

NGVs is robust and diverse. There are more
than three dozen heavy-duty NGV models
offered by 13 OEMs and over four dozen
medium-duty models offered by a variety of
OEMs and upfitters.

Over the last two decades, natural gas

engines have consistently set the benchmark
for low NOx and particulate matter (PM)
emissions from heavy-duty vehicles. Currently,
most medium- and heavy-duty NGVs are
equipped with one of three natural gas
engines (7-, 9-, and 12-liter engines) built by
Cummins Westport, Inc. (CWI) 31.

In 2015, CWI certified its 9-liter heavy-duty

natural gas engine to CARB’s lowest-tier
Freightliner 116 CNG Cascadia day cab heavy-duty |
Courtesy: Daimler Trucks North America

29 Clean Energy Fuels Corp, “Clean Energy Applauds Passage of Alternative Fuel Tax Credit by Congress,” 20 December 2019,

accessed at https://www.businesswire.com/news/home/20191220005474/en/Clean-Energy-Applauds-Passage-Alternative-Fuel-
Tax.
30 U.S. Department of Energy, “Clean Cities Alternative Fuel Price Report,” page 25, January 2020, accessed at

https://afdc.energy.gov/files/u/publication/alternative_fuel_price_report_jan_2020.pdf.
31 Cummins Engine Company joined with Westport Fuel Systems, Inc in 2001 to form CWI. The joint venture between Cummins and

Westport is scheduled to end on December 31, 2021.

41
Increased Public Fueling Infrastructure
Needed, Decline in LNG
CNG is dispensed at more than 900 public
and 700 private stations across the U.S., many
specifically designed to accommodate
medium- or heavy-duty vehicles. 32 The CNG
station population is highest in California,
Texas, Oklahoma, and along major freight
corridors.
The top need expressed by fleets in this study
regarding NGVs is to increase access to
public fueling stations. Many large CNG fleets
install private fueling stations, but interviewed
fleets clearly emphasized the need for more
public fast-fill stations that can refuel heavy-
duty NGVs in approximately the same time as
comparable diesel vehicles.
Growth in natural gas fueling stations has
slowed from its peak between 2012 and 2015;
however, fuel sales have grown 30 percent
from 2015-2019. These seemingly
contradictory trends are due to increased
capacity at existing stations to support areas
of highest demand.
Over the last several years, the on-road
liquified natural gas (LNG) market in the U.S.
has declined. Between 2015 and 2017, LNG
consumption by on-road vehicles dropped 64
percent. 33 This drop may be attributable to
improvements in on-board CNG storage
systems for heavy-duty NGVs; this enabled
longer driving ranges that were previously
possible only with LNG. It is also notable that
the greatest drop in LNG consumption
occurred in California’s transit market. Over
the same period, CARB began strong efforts
to shift California’s transit agencies to zero-
emission buses (battery electric or fuel cell
electric) by 2023.
Growth in Renewable Fuel and GHG
Emissions Reductions
In addition to enabling fleets to reduce their
NOx emissions, heavy-duty NGVs can also
reduce life-cycle greenhouse gas (GHG)
emissions. Relative to comparable diesel
vehicles, NGVs fueled by fossil natural gas
provide a GHG reduction benefit of
approximately 11 percent. 34 By using
renewable natural gas (RNG) as a drop-in
replacement for fossil natural gas, fleets can
achieve significant additional GHG
reductions. Depending on the feedstock,
using RNG provides GHG reductions that
currently range from about 60 percent to
more than 300 percent relative to diesel fuel
(achievable using RNG produced from
“negative carbon” feedstocks, such as dairy
gas). In fact, larger volumes of RNG produced
from these ultra-low-GHG pathways are
beginning to enter the market, providing
steep GHG reductions for increasing numbers
of heavy-duty NGVs.
Between 2015 and 2018, NGV fleet
consumption of RNG in the U.S. increased by
475 percent. 35 Most of the growth has been in
California, due to the state’s Low Carbon Fuel
Standard (LCFS) that monetizes the GHG-
reduction benefits of renewable fuels. In fact,
nearly 80 percent of the natural gas

32 U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations”, downloaded December 2019, accessed

at https://afdc.energy.gov/stations/#/analyze?country=US&access=public&access=private&status=E&status=P&status=T.
33 U.S. Energy Information Administration, “Renewable & Alternative Fuels - Alternative Fuel Vehicle Data,” 28 May 2020, accessed

at https://www.eia.gov/renewable/afv/users.php?fs=a&ufueltype=LNG#tabs_charts-1.
34 GNA analysis using AFLEET tool (2018) from U.S. Department of Energy, Argonne National Laboratory, accessed at https://afleet-

web.es.anl.gov/afleet/.
35 The Coalition for Renewable Natural Gas, infographic, accessed at http://www.rngcoalition.com/infographic.

42
dispensed in California for on-road
transportation in 2019 was RNG. With 61 new
36
RNG production projects in development in
2019, the industry expects continued
growth. 37
The cost of producing RNG can vary
significantly, depending on the specific
production pathway. Making carbon-
negative RNG from dairy biogas using
anaerobic digestor technology is one of the
most expensive pathways. However, when
sold in California, this type of RNG delivers the
greatest monetary benefits to producers,
which helps pay for higher capital costs.
Even outside of the states that have adopted
a low-carbon fuel program, large fleets can
purchase RNG under multi-year, large-
volume contracts for private stations. For
example, in mid-2019, UPS signed a multi-year
supply agreement with Clean Energy Fuels to
purchase 170 million diesel gallon equivalents
of RNG. 38 Additionally, such fleets can
partially “buy down” the higher price of RNG
through credits generated in the federal
Renewable Fuel Standard (RFS) program.
However, expanding RNG as a widely
available replacement for fossil gas across
the U.S. will likely require other states or regions
to adopt their own low-carbon fuel programs,
similar to California’s LCFS.
Of the fleets surveyed, 54 percent use NGVs.
Of these, 40 percent fuel with RNG—either
through a direct supplier relationship, or as a
blend in their utility’s natural gas pipeline.
Fleets using RNG today expect to continue
using RNG over the next two years. 39
Efficiency Improvements through
Government-Industry Collaborations
With heavy-duty natural gas engines already
setting the benchmark for ultra-low emissions,
OEMs have partnered with government
agencies to focus on improving efficiency.
Heavy-duty NGVs have a powertrain
efficiency roughly 10 percent lower than their
diesel-powered counterparts. 40 Improving
engine/vehicle efficiency is an important
objective for OEMs as it directly improves their
fleet customers’ total cost of ownership.
As one key example of collaborations to
improve efficiency of natural gas engines,
CWI has partnered with federal and local
agencies to demonstrate a 10 to 16 percent
improvement in powertrain efficiency,
relative to a 2021 GHG-compliant heavy-duty
natural gas engine. Simultaneously, CWI is
working to reduce costs by 20 percent and
demonstrate diesel-like horsepower and
torque. 41

36 California Air Resources Board, “LCFS Quarterly Data Spreadsheet,” updated 30 April 2020, accessed at

https://ww3.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm
37 Bates White, “Renewable Natural Gas Supply and Demand for Transportation,” page 31, 5 April 2019, accessed at

https://static1.squarespace.com/static/53a09c47e4b050b5ad5bf4f5/t/5ce6c195ec212d3893613c23/1558626712387/BW+RNG+Re
port+Final+2019.04.05.pdf.
38 UPS Pressroom, “UPS Makes Largest Purchase of Renewable Natural Gas Ever in the U.S.,” 22 May 2019,

https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1558453536437-113. Note -
the purchase volume is understood to be 170 million diesel gallon equivalents.
39 GNA fleet survey, 2019.
40 California Air Resources Board, “Low Carbon Fuel Standard (LCFS) Guidance 19-05,” May 2019, accessed at

https://ww3.arb.ca.gov/fuels/lcfs/guidance/lcfsguidance_19-05.pdf.
41 Cummins Westport, presentation by Yemane Gessesse, “2019/20 NG Products,” presented at the U.S. DOE’s Natural Gas Vehicle

Technology Users Forum, 4 February 2020, accessed at https://www.nrel.gov/extranet/ngvtf/assets/pdfs/ngvtf-2020-presentations-

updated.pdf.

43
2.1 FLEET ADOPTION AND INSIGHTS
Adoption of Natural Gas Vehicles
by Fleets 2015-2019: Heavy-Duty
Eclipses All Others and is Growing

Over the last decade, a wide array of

medium- and heavy-duty vehicle
fleets have partially or fully switched
from diesel vehicles to NGVs. Currently,
there are 53,000 heavy-duty NGVs on
America’s roads and approximately
3,000 medium-duty NGVs. 42 Natural
gas vehicles are overwhelmingly
represented in heavy-duty fleets, over
85 percent of 2015-2019 registered
NGVs are heavy-duty vehicles, and
many of these have fairly predictable
routes and long asset lives (Figure 4).
These characteristics are typical of
refuse, transit, some heavy-duty
short/long haul fleets, and school bus
fleets.

Approximately 26,800 new NGVs were

registered nationally over the last five
years, which was led largely by
straight trucks and transit buses.
Several trends are apparent in vehicle
registration data:
Figure 4: Par 1 - New registrations of Class 2a-8 natural gas vehicles
between 2015 and 2019 by vehicle type and by year. Part 2 –
Cumulative vehicle registrations between 2015 and 2019 by vehicle
type. Source: IHS Markit.

• New NGV sales grew 19 percent

• Natural gas tractor registrations declined
from 2017 to 2018 and another 13 percent
59 percent between 2015 and 2019 and
in 2019, which surpassed the 2015 record of
comprised 9 percent of total NGV
more than 6,000 units sold.
registrations in 2019.
• Nearly half of the 26,800 new NGV
• Between 2016 and 2019, annual
registrations from 2015 to 2019 were for
registrations of new natural gas transit
heavy-duty straight trucks, specifically built
by Peterbilt, Autocar Trucks, Kenworth, and
Freightliner.

42 GNA analysis of IHS Market insight data, Vehicles in Operation, 2016-2019, accessed August 2019.

44
 buses grew by 212 percent, reaching
about 1,400 new registrations in 2019. 43
• Growth trends are not entirely consistent for
new natural gas school bus sales, but from
the share of total registrations, they
reached a peak of 9 percent in 2016
before falling to 4 percent in 2019.
• Class 4-6 NGVs were a fractional share of
the total registered vehicles (3 percent)
while Class 2-3 vehicles (primarily from
upfitters) constituted 12 percent. While
they constitute a small share, both
cutaway and cargo van registrations grew
24 percent and 69 percent since 2015,
respectively.
Fleet Insights: Proven Performance with
Positive Total Cost of Ownership for Fleets
with High Fuel Use and/or Long Asset Lives
Among fleets surveyed for this report, 54
percent indicate they use CNG (Figure 5). 44
While heavy-duty fleets such as refuse and
transit dominate CNG use, users also
represent fleets operating medium-duty
vehicles such as municipal, shuttle, utility, and
urban delivery. Overwhelmingly, fleets show a
comfort with the maturity of NGV technology,

Table 5: Summary of key insights on CNG vehicles from interviewed fleets

Summary of Fleet Experiences

Examples of Fleet Commentary
with NGVs (CNG)

“Drivers don’t notice a performance difference – so far,

we are not having any maintenance or performance
issues.” – Urban Delivery (331 units)
• Fuel cost savings
• Reduced maintenance
“We like that it offers cleaner emissions, a comparable
Benefits

• Reduced emissions
range based on fuel capacity and it’s a mature
• Quiet operation
technology.” – Transit (676 buses)
• Cleaner working environment
“We spend less time fueling on the job because we can
now fuel overnight, saving the company time and cost.”
– Refuse (>1,000 trucks)

“There is extremely limited public infrastructure and

fueling time is long due to lines at these locations…we do
• Limited public infrastructure not see cost savings because CNG doesn’t fit our needs
Challenges

• Higher vehicle capital cost operationally.” – Utility (<100 trucks)

• Reduced range
• Torque/acceleration limitations
• Reduced cargo space
“We experienced some early issues with natural gas
engines. Spark plugs were an early issue and challenges
with filter clogging. Upfront cost was higher.” – Transit (676
buses)

Note: Fleet types represented are light-duty municipal/shuttle, utility, urban delivery, transit, school bus, and refuse.
Vehicle counts indicate the number of natural gas vehicles operated by the fleet.

43 This value may be uniquely high due to low reporting by transit agencies prior to 2017. Differences in state reporting

requirements may also have an effect on these figures over time. The growth rate from 2017 to 2019 was a more moderate 13
percent.
44 The fleet types who report using NGVs in the GNA survey (pilot or purchase) include: Municipal/Shuttle, Utility, Urban Delivery,

School, Transit, Refuse, Heavy-Duty Short haul, Heavy-Duty Short/Long haul (Mixed). Additionally, 16 percent in seven segments
report using LNG: Municipal / Shuttle, Utility, Urban Delivery, Transit, Refuse, Heavy-Duty Short haul, Heavy-Duty Short/Long haul
(Mixed). Only two fleets expect to pilot or purchase LNG-equipped vehicles in the next 24 months.

45
given that only 8 percent report conducting
some type of pilot before purchasing CNG
vehicles.

Among the utility truck, urban delivery, transit,

and refuse fleets that responded to the
survey, over 70 percent plan to continue
purchasing or piloting NGVs over the next 24
months. This is true even for fleets that are
considering testing zero-emission vehicle
technologies that may just be emerging for
their application.

Natural gas is a regular go-to fuel for fleets

such as Waste Management that now
operate approximately 9,000 NGVs, and UPS
who announced a 2019 deal to add over
6,000 NGVs to its fleet. 45 Fleets report
In 2019, UPS announced it would add over 6,000 NGVs to
its fleet | Courtesy: Natural Gas Vehicles for America
(NGVA)

Among the utility truck, urban delivery, transit, and refuse fleets that responded to the
survey, over 70 percent plan to continue purchasing or piloting NGVs over the next 24
months.

meaningful fuel cost savings and a cleaner
working environment by using NGVs fueled
with CNG. 46 While some fleets experienced
engine and filter issues with early generation
NGVs, they point out that manufacturers
resolved these concerns, which improved
their experience with performance and
vehicle maintenance. Maintenance benefits
compared to diesel appear for many fleets at
high mileage, such as when vehicles exceed
500,000 miles, and continue growing with
mileage. Additionally, while fleets that were
surveyed comment on the limited range and
slipping cost advantage from improvements
made by diesel engine manufacturers,
neither were a top concern.
The chief concern regarding NGVs among
surveyed fleets is the shortage of public
fueling stations relative to the network of
stations for conventional fuels. Specifically,
expansion is needed in the nation’s network
of public stations that are designed to
accommodate heavy-duty NGVs and can
fuel them in approximately the same fueling
window as diesel vehicles. This, and other
feedback from NGV fleets using CNG, is
reflected in key comments provided and
summarized in Table 5.
Several fleets commented about the
transition period required to adopt natural
gas. It can take time to understand a new
fuel-engine technology, including benefits,

45 UPS Pressroom, “UPS to Add More Than 6,000 Vehicles to its Natural Gas Fleet,” 9 October 2019, accessed at

https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1570546455953-427.
46 GNA did not ask fleets about LNG due to its significantly lower current and forecasted rates of adoption.

46
 Figure 5: Current and expected use of CNG among surveyed fleets. Source: GNA fleet survey.

constraints, and how to best manage a
partial or full transition. “We changed our
maintenance program and we now have a
more robust technician training program. It is
a technology adjustment process and now
we have lower cost of fuel, it’s cleaner and
quieter, operation costs are lower,” said a
Waste Management representative.
Representatives of other interviewed fleets
that have successfully adopted NGVs
expressed similar satisfaction and sentiment
to continue their use.
over the next 24 months. One transit fleet
notes that fuel diversification is important to its
overall resilience. This does not necessarily
mean that fleets are fully stepping away from
NGVs but highlights the effect of
advancements in other vehicle technologies
on near-term fleet purchasing decisions.
Renewable Natural Gas (RNG): Growth
and Improved Sustainability as a Drop-In
Replacement for Fossil Natural Gas that
Can Be Lower Cost

“WhileEVs
“While EVsare
areon
onthe
the horizonforforus,
horizon us,there
thereis isno
nodenying
denyingthe
theeconomic
economicbenefit
benefit
ofof
CNG
for our fleet,”
CNG for ourreports a maintenance
fleet,” reports director at Akron Metro. “[We have]
a fleet manager have] lower
lower
maintenance
maintenance costs
costsand
andwewehithit
ourourROI
ROIaayear
year ahead
aheadofof
projections.”
projections.”

Around half (55 percent) of the fleets that
have previously used CNG vehicles plan to
continue purchasing or piloting NGVs over
the next 24 months (Figure 5). Additionally, an
equal percentage of NGV users plan to pilot
or purchase zero-emission vehicle
technologies (battery electric or fuel cell)
RNG is a success story for renewable
transportation fuels based on the fuel’s strong
environmental benefits and its growing
market share. Between 2015 and 2018, NGV
fleet consumption of RNG in the U.S.
increased by 475 percent, 47 with most of the
growth in California. In fact, nearly 80 percent

47 The Coalition for Renewable Natural Gas, infographic, accessed at http://www.rngcoalition.com/infographic.

47
 Figure 6: Average carbon intensity of Bio-CNG as reported in California's Low Carbon Fuel Standard program.
Source: California Air Resources Board, Low Carbon Fuel Standard Quarterly Report, accessed 24 May 2020.

of the natural gas dispensed in California for The GHG reduction benefit of an NGV fueled
on-road transportation in 2019 was RNG. 48 by fossil natural gas that replaces a
comparable diesel heavy-duty vehicles is
An estimated 77 sites currently producing
approximately 11 percent. 51 When the same
RNG for transportation provide around 6
NGV uses RNG instead of fossil gas, the GHG
percent of the domestic market’s technical
reductions average about 67 percent (2019),
potential. 49 There were 61 projects in
and can reach 354 percent. 52 The extent of
development by the end of 2019 to produce
reductions depends on the fuel’s feedstock
RNG for the transportation market, which
and production process. RNG is produced
suggests that the industry expects strong
from a variety of bio-based feedstocks,
growth in the coming years. 50 However, as
including biogas from landfills, municipal solid
further described, expansion across the U.S. of
waste, and farm animal waste. Once the
RNG as a widescale replacement for fossil
collected biogas goes through final cleanup
natural gas will likely require adoption of new
processes, this biomethane becomes pipeline
low-carbon fuel programs at state levels to
and vehicle quality. This means it can be
make the fuel more affordable to fleets.
injected into (and transported through)

48 California Air Resources Board, “LCFS Quarterly Data Spreadsheet,” updated 30 April 2020, accessed at

https://ww3.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm.
49 Bates White, page 36.
50 Bates White, page 31.
51 GNA analysis using AFLEET tool (2018) from U.S. Department of Energy, Argonne National Laboratory, accessed at https://afleet-

web.es.anl.gov/afleet/.
52 GNA analysis of California Air Resources Board’s Current Fuel Pathways, accessed at

https://ww2.arb.ca.gov/resources/documents/lcfs-pathway-certified-carbon-intensities. Analysis compared values for Diesel from

the average crude oil refined in California refineries to RNG from Landfill Gas 25 (Location: Illinois) and RNG from Animal Waste
(Facility Location: California).

48
 existing natural gas pipelines (blended with
fossil gas).
As new RNG facilities are coming online in
California using ultra-low-GHG production
pathways, the monetary value of RNG is
increasing. For the last three years under
California’s program (2017 through 2019), the
average carbon intensity of CNG made from
biomethane (also called “RCNG”) was
approximately 39 gCO2e per MJ. This
translates to a GHG-reduction benefit of
approximately 60 percent compared to
current diesel fuel in California. In 2019 the
average carbon intensity of RCNG began to
show dramatic decreases (Figure 6).
Heavy-duty fleets across the U.S. have indicated strong interest in
purchasing RNG when it can achieve price parity with diesel fuel.
This was due to greater volumes of fuel
becoming available that were made from
“carbon negative” dairy biogas pathways.
As shown in the last bar of Figure 6, the
average carbon intensity of RCNG in Q4 of
2019 was down to about 17 g/CO2e per MJ
(a 79 percent reduction from fossil natural
gas). That is a 59 percent decline from the
previous fourth quarter. Further reductions in
54Cliff Gladstein, RNG expert, Gladstein, Neandross & Associates, personal communication, May 2020.
55United Parcel Systems, “UPS Makes Largest Purchase of Renewable Natural Gas Ever in the U.S., press release, May 22, 2019,
https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1558453536437-113.
49
the average carbon intensity for RNG are
expected, as increasing volumes made from
dairy biogas become available and are
dispensed. 53,54
Due to the availability of lucrative credits,
fleets using NGVs in California and Oregon
can purchase RNG at a price that is on par
with—or even lower than—the price of diesel.
A few large fleets are able to purchase RNG
outside of these states under multi-year, large-
volume contracts that service private stations.
For example, in mid-2019 UPS signed a multi-
year supply agreement with Clean Energy
Fuels to purchase 170 million gallon
equivalents of RNG. In what UPS calls the
“largest purchase of RNG ever in the U.S.” the
company plans to dispense RNG into its
heavy-duty NGVs in 18 different cities across
12 states, none of which are California or
Oregon. 55 Despite the lack of carbon markets
in these states, UPS seeks to maximize its use of
RNG across America. “We want to see the
continued development of RNG projects
nationally and continued transition to a fuel
that offers significant reductions in life cycle
emissions,” said Scott Phillippi, senior director
of maintenance and engineering,
international operations for UPS.
Other RNG users outside California and
Oregon include Dallas Area Rapid Transit
(DART), which has been running buses on
RNG for several years. Seattle-Tacoma
International Airport plans to begin operating
its natural gas buses on RNG beginning in Q4
2020. Many other heavy-duty NGV fleets
across the U.S. have indicated strong interest
to purchase RNG when it can achieve price-
parity with diesel fuel in their region.
 Notably, all 50 states already have access to
monetized credits that can buy down the
cost of RNG (and other renewable fuels)
through the federal Renewable Fuel Standard
(RFS) program. The policy established the
market to trade credits known as RINs which
certify that a gallon of renewable fuel (based
on ethanol’s energy content) enters the
nation’s fuel supply. 56 This credit sale
ultimately reduces the price of fuel for the end
user and, until 2017, RINs played an important
role in RNG expansion. Policy shifts over the
last few years drove down the value of some
of these credits.
Fleets report no performance difference in
using RNG compared to fossil natural gas. If
available, they would purchase greater
volumes of RNG, given the strong GHG
emission benefits. Nearly 40 percent of the
fleets surveys for this study operate CNG
vehicles use RCNG—either through a direct
supplier relationship, or as a blend in their
utility’s natural gas pipeline—and expect to
continue using RNG over the next two years. 57

Further reductions in the average carbon intensity for RNG are expected, as increasing volumes made from dairy biogas become
available and are dispensed.

56Renewable Identification Number (RIN)

57GNA spoke with fleets in transit, refuse, and heavy-duty short-haul applications, as well as medium-duty municipal/shuttle and
urban delivery applications about their experience with RNG. Total share of fleets currently using RNG is 38.5 percent.

50
2.2 NATURAL GAS AS A SUSTAINABLE FLEET TECHNOLOGY
Fuel Price and Cost: Competitive and
Steady, but Diesel Efficiency Gains are
Eroding the Advantage
The competitive and generally steady price
of natural gas relative to diesel is an important
factor for fleet adoption of heavy-duty NGVs.
For most of the past decade, the price of
natural gas has been lower than petroleum
fuels on an energy-equivalent basis (Figure 7).
The largest volumes of natural gas in
transportation are consumed by heavy-duty
vehicles, so diesel serves as the best fuel for
price comparisons. Over the last five years,
the average retail price of diesel has
generally been rising, peaking at about $3.00
per gallon in 2018. Over this same period,
CNG prices have been very stable, averaging
about $2.43 per diesel-gallon equivalent. The
CNG’s price advantage over diesel
averaged 14 percent over the last five
years. Fuel sales of natural gas grew by 30
percent from 2015 – 2019.
result is that CNG’s price advantage over
diesel averaged about 14 percent for fueling
at public stations over the last five years.
Furthermore, the price of CNG at most private
stations averages 25 percent lower than
public stations, 58 and for very large fuel users

Figure 7: Average retail prices of gasoline, diesel, CNG and LNG over a 10-year period. Source: U.S. Department of
Energy, Alternative Fuels Data Center.

58 U.S. Department of Energy, “Clean Cities Alternative Fuel Price Report,” page 25, January 2020, accessed at

https://afdc.energy.gov/files/u/publication/alternative_fuel_price_report_jan_2020.pdf.

51
(e.g., transit and refuse fleets), the savings later renewed retroactively and extended at
can be even greater. the end of 2020. 59

Stable and consistently lower prices for
natural gas fuel has enabled many heavy-
duty fleets to realize consistent fuel cost
savings after purchasing NGVs to replace
diesel vehicles. Fuel cost savings are an
important way for heavy-duty NGV fleets to
achieve an ROI and comparable (or lower)
total cost of ownership by helping to offset the
higher capital costs of switching from diesel
vehicles. This is especially pronounced for
larger fleets operating high-fuel-use duty
cycles.
Despite periods of very low diesel prices and
tax credit uncertainty, natural gas fuel sales
grew 30 percent from 2015 to 2019. 60 Still,
transportation consumes only a fraction of
natural gas as it accounts for less than one
percent of the nation’s total natural gas
consumption. 61
Fuel Availability and Infrastructure:
Recent Consolidations and Shift Away
from LNG Suggests Future CNG Station
Growth

In recent years, however, diesel engines are
becoming more efficient and diesel fuel
prices have seen dips to historic lows. When
this happens, the price spread advantage for
natural gas collapses or disappears
altogether. This complicates a fleet’s
potential decision to purchase NGVs and
makes it harder to achieve a quick return on
investment or a lower total cost of ownership.
Another cost advantage of natural gas has
been subject to significant uncertainty in the
past few years: delays in renewing the Federal
Alternative Fuel Tax Credit (AFTC). Fueling
providers who supply natural gas through
agreements with fleets often share a portion
of this credit with their customers. The tax
credit was not renewed by the federal
government in 2017 or 2018, however, it was
Today, CNG is available at more than 900
public and 700 private stations across the U.S.
Many stations are specifically designed to
accommodate medium- or heavy-duty
vehicles 62, which dominate today’s NGV
markets. The CNG station population is
highest in California, where strong incentives
have helped launch NGV fleets in a wide
array of vehicle types and applications.
Outside California, the highest numbers of
natural gas fueling stations are in Texas,
Oklahoma, and along major freight corridors.
While the industry opened more than 150
CNG stations annually between 2012 and
2015, the growth rate has since declined, with
only 32 stations opened in 2019 and numerous
closures in that same timeframe. 63 Large
mergers and acquisitions have also been a

59 Clean Energy Fuels Corp, “Clean Energy Applauds Passage of Alternative Fuel Tax Credit by Congress,” Businesswire.com, 20
December 2019, accessed at https://www.businesswire.com/news/home/20191220005474/en/Clean-Energy-Applauds-Passage-
Alternative-Fuel-Tax
60 U.S. Energy Information Administration, “Natural Gas - U.S. Natural Gas Vehicle Fuel Consumption,” accessed Q1 2020,

https://www.eia.gov/dnav/ng/hist/n3025us2m.htm.
61 U.S. Energy Information Administration, “Natural Gas - Natural Gas Consumption by End Use,” accessed Q1 2020,

https://www.eia.gov/dnav/ng/NG_CONS_SUM_DCU_NUS_A.htm.
62 U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations”, downloaded December 2019, accessed

at https://afdc.energy.gov/stations/#/analyze?country=US&access=public&access=private&status=E&status=P&status=T.
63 U.S. Department of Energy’s Alternative Fuels Data Center, “Average Retail Fuel Prices”, downloaded December 2019,

accessed at https://afdc.energy.gov/fuels/prices.html.

52
prominent industry development in the past
few years; Love’s Family of Companies
acquired CNG leader Trillium in 2018 to
become the second largest operator of
public stations 64 and ANG acquired AMP
CNG in 2019 to become the third largest. 65
During this same timeframe, the on-road LNG
market has declined and focus is shifting
toward the off-road and marine sectors. In
2017, LNG consumption by on-road vehicles
had declined 64 percent from 2015, 66 and in
2019, no new LNG stations were planned to
open, according to the AFDC. 67 LNG
demand in the marine shipping industry has
grown since 2015 when graduated marine
transportation emissions standards first took
effect and continues to grow to meet the
2020 international low-sulfur fuel
requirements. ,68 69
Vehicle Model Availability: More than 90
Robust Offerings That Are Shifting to
Near-Zero-Emission
Medium- and heavy-duty NGVs have been
developed over the last three decades
offering important reductions in key air
pollutants (NOx and PM) compared to diesel.
In 2015, natural gas engine technology
achieved a major milestone in clean vehicle
technology when Cummins Westport, Inc.
(CWI) certified its 9-liter heavy-duty natural
gas engine to CARB’s Optional Low-NOx
Standard (OLNS) of 0.02 g/bhp-hr. Because
this engine technology achieves a 90 percent
(or higher) reduction in NOx (the key smog-
forming pollutant) compared to diesel engine
technology, CWI’s achievement opened up
a major tool for air quality regulators to
promote NOx emission reductions from
heavy-duty vehicles.
Most NGVs in the U.S. are sold with a CWI
natural gas engine. As of early 2020, Cummins
has certified three different heavy-duty
natural gas engines to this near-zero-emission
level (7-liter, 9-liter and 12-liter displacements).
The 9-liter engine is largely used in return-to-
base heavy-duty delivery trucks, refuse trucks,
and transit buses. While the 12-liter is well
suited for over-the-road trucking. CWI’s
newest natural gas engine is the 7-liter, which
is designed for school bus, shuttle, and
medium-duty truck markets. 70 For model year
2021, all CWI natural gas engines will be
certified to the “near-zero-emission”
standard, which also improves efficiency up
to 5 percent. 71

64 U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations,” downloaded September 2019, accessed

at https://afdc.energy.gov/stations/#/analyze?country=US&access=public&access=private&status=E&status=P&status=T.
65 Lillian, Betsy, “American Natural Gas Acquires AMP CNG,” NGTNews.com, 18 June 2019, accessed at

https://ngtnews.com/american-natural-gas-acquires-amp-cng.
66 U.S. Energy Information Administration, “Renewable & Alternative Fuels - Alternative Fuel Vehicle Data,” 28 May 2020,

https://www.eia.gov/renewable/afv/users.php?fs=a&ufueltype=LNG#tabs_charts-1.
67 U.S. Department of Energy’s Alternative Fuels Data Center, “Average Retail Fuel Prices”, downloaded December 2019,

accessed at https://afdc.energy.gov/fuels/prices.html.
68 SEA/LNG & The Society for Gas as a Marine Fuel, “Well-to-Wake GHG Emission Study on LNG as a Marine Fuel,” June 2019,

accessed at https://sea-lng.org/wp-content/uploads/2019/06/190410_SEALNG_GHG_Messaging_Document_DIGITAL-
compressed.pdf.
69 U. S. Energy Information Administration, “Marine Fuel Choice for Ocean-Going Vessels within Emissions Control Areas - Executive

Summary,” June 2015, https://www.eia.gov/analysis/studies/transportation/marinefuel/pdf/marine_fuel.pdf.

70 Fussner, Tyler, “Cummins reveals next gen engines,” FleetOwner.com, 6 March 2020, accessed at

https://www.fleetowner.com/equipment/article/21125529/cummins-reveals-next-generation-of-l9-and-b67-engines.
71 Ibid.

53
In 2018, the cost of a new heavy-duty NGV is
approximately 40 percent more than a
comparable diesel heavy-duty vehicle. 72
Most of this higher cost is associated with on-
board fuel tanks that are needed to store
sufficient volumes of CNG (high pressure
vessels) or LNG (cryogenic liquid vessels).
Many fuel providers are addressing this up-
front cost, such as Clean Energy Fuels which
introduced a program that offers qualified
fleets a new NGV at the same cost as a diesel
truck or better, along with use of Clean
Energy’s RNG. 73 The program, called “Zero
Now”, provided 250 new NGVs to fleets in
2019. Most other fuel providers now offer
similar deals.

Freightliner 116 CNG Cascadia day cab heavy-duty Class 8 tractor | Courtesy: Daimler Trucks North America

72 In 2018, the incremental cost of a new heavy-duty NGV was approximately 40 percent of the average base price of a new

diesel truck. A fleet’s ROI on a new NGV depends on its cost to fuel, duty cycle, and vehicle replacement schedule, as well as its
access to financial incentives. San Pedro Bay Ports, “2018 Feasibility Assessment for Drayage Trucks,” prepared by Gladstein,
Neandross & Associates, April 2019, accessed at https://www.gladstein.org/gna_whitepapers/2018-feasibility-assessment-for-
drayage-trucks/.
73 “Demand Soars for Clean Energy Fuels ‘Zero Now’ Program,” NGVGlobal.com, 7 May 2019,

https://www.ngvglobal.com/blog/demand-soars-for-clean-energy-fuels-zero-now-program-0507.

54
Figure 8: Medium- and heavy-duty NGVs available today by body type and manufacturer. Vehicles in
distinct weight classes are counted as unique models. Source: GNA.

55
Today, the market for NGVs is strong with
approximately 90 models offered across Class
2 through 8 in a variety of body types (Figure
8). Thirteen OEMs offer more than two dozen
heavy-duty natural gas models and dozens of
options are offered by OEMs or upfitters that
are suitable in medium-duty fleet applications
as replacements for gasoline or diesel fleet
vehicles.
As previously noted, LNG use by fleets is
shrinking but high-fuel-use heavy-duty NGVs
with the largest engines and vehicle size have
found LNG beneficial. Many Class 8 truck
OEMs that previously favored equipping
vehicles with LNG fuel systems, which
dominated heavy-duty vehicle sales before
2010, now favor CNG systems due to
improvements in CNG tank packaging that
enable greater fuel storage per tank size
and/or weight. Consequently, the market for
on-board LNG fuel storage systems has
become more focused on applications
where there are significant weight and/or
range sensitivities, or where there is limited
real estate on a vehicle (typically on the
frame rail or back of cab) for fuel storage
systems and tanks.

2.3 LOOKING FORWARD

data reported by the six major truck OEMs
NGVs will remain an important option for
that represent the majority of the market. 74
fleets seeking to reduce emissions, meet their
sustainability goals, and improve the total
Adoption in school bus and tractor fleets may
cost of ownership of their fleet, especially for
see a continued downward trend
many users of heavy-duty vehicles.
accelerated by the recession. Survey data
Manufacturer offerings of heavy-duty NGV
showed that end users of both school bus and
models are robust and, as of the writing of this
tractors indicate that future purchases will be
report, no manufacturer had announced
half or less than previous purchases (Figure 5).
retirements from their existing portfolio.
Furthermore, the mid 2020 drop in oil prices,
which affect fleet types most sensitive to fuel
Adoption is expected to remain strong,
price (e.g. heavy-duty long haul), will likely
especially in transit and refuse despite the
place additional downward pressure on sales
COVID-19 pandemic. Refuse and transit
in some segments.
agencies with their long asset lives and
proven total cost of ownership from the
Below are several key factors for fleets to
maintenance and operational benefits of
monitor that will influence the ability for NGV’s
NGVs are more likely to continue use even as
to compete with other technologies in the
the broader market faces the effects of an
next few years.
expected COVID-induced recession. By
February 2020, before the COVID-19 crisis,
Class 8 NGV sales in the U.S. and Canada
were up 29 percent year-over-year based on

74U.S. Gas Vehicles, “Class 8 natural gas truck retail sales up 29 percent YTD through February 2020,” April 2020, accessed at
https://usgasvehicles.com/en/class-8-natural-gas-truck-retail-sales-up-29-ytd-through-february-2020/.

56
OEM Investments in Improving Efficiency
& Reducing Emissions
Relative efficiency is one parameter for
heavy-duty fleets as they adopt (or consider
adopting) large numbers of NGVs. It factors
into the degree to which fleets can reduce
fuel costs, and therefore has an impact on
total cost of ownership. Efficiency also
quantitatively impacts a fleet’s ability to
achieve GHG emission reductions.
Consequently, an important focus for OEMs of
medium- and heavy-duty natural gas engines
is to improve the efficiency of spark-ignited
natural gas engines. Notably, this is not unique
to heavy-duty natural gas engines; OEMs of
diesel engines (many of which also build
natural gas versions) are targeting
improvements in efficiency, and they must do
this while managing complex tradeoffs with
NOx and GHG emission reductions. 75
Leading natural gas engine manufacturer
Cummins Westport, Inc. 76 (CWI) has
partnered with federal and local agencies to
increase the efficiency of spark-ignited
natural gas engine technology. CWI’s
approach is to improve the “specific
combustion system design” of its three
different heavy-duty natural gas engines
certified to CARB’s near-zero optional low-
NOx standard. CWI seeks to demonstrate a 10
to 16 percent improvement in cycle average
and peak efficiency, relative to a 2021 GHG-
compliant natural gas engine. This will yield
equivalent reductions in direct-vehicle GHG
emissions. Simultaneously, CWI is working to
reduce costs by 20 percent and demonstrate
diesel-like horsepower and torque. 77
State-Level Low Carbon Fuel
Marketplaces
California’s market for low-carbon
transportation fuels (the LCFS) has been a
major factor in moving toward large-scale
use of RNG to fuel NGVs, phasing out use of
fossil gas. In addition to California and
Oregon, the provinces of British Columbia and
Ontario in Canada have adopted clean fuel
markets similar to the U.S. versions. A top
legislative priority of the natural gas industry,
as well as proponents of renewable low-
carbon fuels, is to adopt new low-carbon fuel
markets in states and provinces across North
America. As of this writing, Washington,
Colorado, and New York have introduced
legislation for low-carbon fuel markets.
If state-level clean fuel markets expand
across the U.S. and other parts of North
America, this could greatly increase
availability of affordable RNG and its
commensurate benefits for fleets. The result
would be that more NGV fleets across
America could deeply reduce their GHG
footprints by switching to RNG. Combined
with transitioning to NGVs that are powered
by near-zero natural gas engines, this would
provide a compelling approach for NGV
fleets to improve ambient air quality while
helping to mitigate climate change. When
that RNG is produced from dairy sources, no

75 To continue transforming the U.S. heavy-duty fleet, OEMs are focused on bringing down the NOx emissions of heavy-duty diesel
engines to the same “near-zero” level that natural gas engines already achieve. Conversely, OEMs are working to improve
efficiency of heavy-duty natural gas engines, to make them more competitive with diesel engines on fuel economy and low
tailpipe GHG emissions.
76 Cummins Engine Company joined with Westport Fuel Systems, Inc in 2001 to form CWI. The joint venture between Cummins and

Westport is scheduled to end on December 31, 2021.

77 Cummins Westport, presentation by Yemane Gessesse, “2019/20 NG Products,” presented at the U.S. DOE’s Natural Gas Vehicle

Technology Users Forum, 4 February 2020, accessed at https://www.nrel.gov/extranet/ngvtf/assets/pdfs/ngvtf-2020-presentations-

updated.pdf.

57
other clean technology in this report can offer
such substantial GHG-reduction benefits.
Shifting Regulatory and Public Incentive
Priorities
Policy, regulations, and incentives have
played large roles in driving fleet adoption
and growth of NGVs for medium- and heavy-
duty vehicle applications. For many parts of
the U.S., these key drivers have shifted in
recent years in important geographies,
impacting the rates at which fleets have
purchased and deployed new NGVs.
Over the last two decades, natural gas
engines have consistently set the benchmark
for low NOx and particulate matter (PM)
emissions from heavy-duty vehicles. Largely
due to diesel-powered heavy-duty vehicles,
many cities and regions across the U.S. have
been unable to attain air quality standards for
ozone and/or fine PM. This has especially
been the case in California, which leads the
nation for people who live in areas that do not
meet national air quality standards (regions
known as “non-attainment areas”). Especially
poor air quality exists in two California
airsheds—the greater Los Angeles area, and
the San Joaquin Valley (the Central Valley)—
and in Houston, Texas. Consequently, many
federal, state, and local regulators have
prioritized deployment of heavy-duty NGVs as
a key tool to improve air quality.
However, in recent years, there has been a
major policy shift in California—and in many
parts of the Northeast (especially states that
have adopted California’s emissions
standards)—towards preference of zero-
78 Transport Dive, “CARB passes clean trucks rule, setting stage for no-diesel sales in California by 2045,” June 2020, accessed at
https://www.transportdive.com/news/trucking-California-Air-Resources-Board-Advanced-Clean-Truck-Regulation-EV-zero-
emissions/580560/
58
emission vehicle (ZEV) platforms, including
BEVs and FCEVs, over near-zero-emission
heavy-duty NGVs. In June 2020, California’s
Air Resources Board adopted a mandate that
requires a minimum percentage of zero-
emission vehicle sales by OEMs beginning in
2024 and rising to as much as 40 percent for
Class 8 tractors and 75 percent for Class 4-8
vehicles by 2035. 78 Public incentives are linked
to these policies, so this trend also impacts
funding allocation within the myriad
programs that help buy down the
incremental costs of clean advanced-
technology heavy-duty vehicles.
In some historically large markets for heavy-
duty NGVs (Southern California, in particular),
incentive programs now allow awards
exclusively for ZEVs. In other cases, heavy-
duty ZEV awards are sharing funding streams
that heavy-duty NGVs have long dominated.
With increasing numbers of ZEV products
becoming available, even if in pre-
commercial states, it is becoming much
harder for fleets to obtain incentive funds for
heavy-duty NGVs. This is even happening in
the greater Los Angeles area, where the
strong NOx-reduction benefits of near-zero-
emission NGVs are badly needed to attain
ambient air quality standards.
The upshot of these shifting policy priorities is
that the heavy-duty NGV industry and its fleet
customers will need to increasingly compete
with heavy-duty ZEVs through greater
reliance on business factors that favor the
NGV solution such as technological maturity,
proven performance, commercial
availability, and a favorable TCO, rather than
policies and incentives.
 Industry Perspective by Natural Gas Vehicles for America (NGVA)

Natural gas vehicle (NGV) technology long ago established its clean air credentials—in the
1990’s NGVs were first to certify to California’s ultra-low and super ultra-low emission standards.
Natural gas technology has since broken the ultra-low NOx barrier with engines certified to levels
that are 90 percent cleaner than the most stringent U.S. EPA standards for oxides of nitrogen.
These new cleaner engines are helping to clear the air of smog and harmful pollutants.

Today natural gas continues to demonstrate winning value in the transportation space with low
costs and significant environmental benefits which regularly improve based on both the
refinements being made by manufacturers and the expanded availability and growing use of
renewable natural gas for refueling.

The combination of a mature

and proven technology,
continued emission
improvements, and an
extremely low-carbon fuel—
renewable natural gas
(RNG)bodes well for the future
uptake of natural gas in
transportation including in the
on-road as well as non-road
transportation market. The
discussion by GNA in this
chapter captures market
Natural gas continues to demonstrate value in transportation with low total realities well—significant
ownership costs and environrmental benefits | Courtesy: NGVA
product availability, continued
refinements in engine technology, and regular growth in transit, refuse, and short-haul or local
trucking applications.

A review of true market penetration can be difficult to assemble as complete and accurate
data on alternative fuels—natural gas vehicles in particular—can be hard to access. Some of
the sources referenced here include only partial coverage of the industry (e.g., regulated fleets)
so this snapshot likely does not fully reflect complete NGV adoption, especially regarding the
cited level of LNG use in the market or the actual numbers of light-duty NGVs on our roads
today.

Public access to refueling infrastructure is a challenge every alternative fuel technology faces,
though NGVs have an advantage with more than 1,600 fueling facilities and a mature network
of established servicers and suppliers coast-to-coast. The reality is natural gas fuelers are ready

59
and able to work with fleets of all sizes to establish efficient, convenient, and affordable refueling
solutions including a variety of innovative portable and semi-portable systems that exist today
to service the smallest or most remote fleets.

NGV technology continues to evolve. With support from the U.S. Department of Energy,
investments are underway to further improve efficiency and lower fuel system costs to reduce
overall vehicle incremental costs and accelerate an earlier return on investment (ROI). Since
clean burning NGVs do not require the complex after-treatment systems that diesel engines
require, natural gas already supports both more efficient and less labor-intensive service
schedules and maintenance operations.

Natural gas vehicles’ greatest strength has long

been their enduring ability to deliver on impactful
emission reductions, which remains a major
priority for many urban areas as well as nationally
as it relates to fighting climate change.
Demonstrating environmental benefit has been
and will continue to be a key driver for the
alternative fuel transportation market for many
years to come.

The increased reliance upon biomethane, or

RNG, takes our vehicle technology’s
environmental benefit to an even higher level of
performance. Captured above ground from
organic material in agricultural, wastewater,
landfill or food waste, RNG produces carbon-
neutral and even carbon-negative results when
Low NOx natural gas engines are certified to levels
fueling on-road vehicles like short- and long-haul that are 90 percent cleaner than the most stringent
trucks, transit buses, and refuse and recycling U.S. EPA standards for oxides of nitrogen | Courtesy:
collection vehicles. According to California Air Cummins Westport
Resources Board (CARB) calculations, RNG fuel has
the lowest EER-adjusted carbon intensity of any on-road motor fuel, as low as -400. 79

The increased use of renewable natural gas is not only a vital component of efforts to reduce
transportation sector emissions, but is also a prudent investment in a cleaner, safer world. In 2019,
39 percent of all on-road fuel used in natural gas vehicles was RNG. This equates to 277 million

79 California Air Resources Board, Low Carbon Fuel Standard Program, Certified Fuel Pathways, last updated March 11, 2020.

Available at: https://ww2.arb.ca.gov/resources/documents/lcfs-pathway-certified-carbon-intensities.

60
gallons of gasoline equivalent. 80 The use of RNG motor fuel has increased 291 percent over the
past 5 years, displacing close to 7.5 million tons of carbon dioxide equivalent (CO2e). 81

And RNG production is on the rise to accommodate this growing interest. RNG Coalition reports
that 129 facilities are currently in operation in the U.S. and Canada, with an additional 110 more
under construction or in substantial development. 82 A recent study by ICF for the American Gas
Foundation found that within the next two decades enough RNG could be produced in the
United States to meet 75 percent of current on-road diesel fuel needs. 83

And according to the International Energy Agency, biogas and biomethane production in 2018
was only a fraction of the estimated overall global potential, reporting, “full utilization of the
sustainable potential could cover some 20 percent of today’s worldwide gas demand.” 84

RNG-fueled vehicles provide the most immediate and cost-effective full-range heavy-duty
option when seeking to combat climate change and clean our air. They are a proven,
affordable, and easily scalable zero-emission equivalent solution for commercial deployment
today which is why leading fleets including UPS, Waste Management, and Frito-Lay increasingly
rely upon them.

Despite the current challenges—COVID-19, low petroleum prices, and of course the attention
given to electric vehicles— we have every reason to believe that fleets that have invested and
are making new investments in natural gas will continue to benefit. Natural gas simply delivers
more new vehicles and far greater emission benefits for the investment than any other
alternative. No other transportation fuel is as sustainable, adaptive, and competitive across all
vehicle classes, creating a bright outlook for NGVs tomorrow and beyond.

80 Total Natural Gas in Transportation Figure derived from U.S. EIA’s Annual Energy Outlook (2020). RNG numbers derived from U.S.

EPA Renewable Fuel Standard Program reporting.

81 Total greenhouse gas emissions and associated carbon dioxide equivalent (CO2e) metric tons identified using average carbon

intensity of landfill gas as reported by producers under CARB’s Low Carbon Fuel Standard program.
82 The Coalition for Renewable Natural Gas, “Home Page”, accessed at: http://www.rngcoalition.com/; June 30, 2020.
83 “Renewable Sources of Natural Gas: Supply and Emissions Reduction Assessment,” Prepared by ICF for the American Gas

Foundation, December 2019. Figure calculated using ICF’s high resource potential scenario where 4,513 tBtu – equivalent to 32.5
DGEs – of RNG could be produced annually by 2040.
84 “The Outlook for Biogas and Biomethane,” International Energy Agency, March 2020.

61
Propane (LPG) Vehicles:
Proven, Budget Friendly,
Near-Zero-Emission, and
Moving Towards
Renewable

62
Chapter Contents
3. SNAPSHOT OF PROPANE IN FLEET APPLICATIONS ....................................................................... 65
Affordability of Vehicles, Fuel, and Infrastructure ...................................................................... 65
Fleet Types Leading Propane Adoption ..................................................................................... 66
Availability of Fueling Infrastructure ............................................................................................ 66
Near-Zero-Emission Engines and Renewable Fuel ..................................................................... 67
3.1 FLEET ADOPTION AND INSIGHTS ................................................................................................. 68
Adoption of Propane Vehicles by Fleets 2015-2019: School Fleets Dominate, followed
by Delivery and Shuttle Fleets ...................................................................................................... 68
Fleet Insights: Proven Performance with Positive Total Cost of Ownership ............................. 69
Renewable Propane: Limited Quantities Today, Propane Industry Intentions to Grow
Supply ............................................................................................................................................. 70
3.2 PROPANE AS A SUSTAINABLE FLEET TECHNOLOGY ................................................................... 71
Fuel Price: Consistently Low Private Fueling Costs ..................................................................... 71
Fuel Availability and Infrastructure: Public Network Supplements Affordable Private
Fueling ............................................................................................................................................ 72
Vehicle Model Availability: Over Three Dozen Models, Many with Ultra Low-NOx
Engines ........................................................................................................................................... 74
3.3 LOOKING FORWARD....................................................................................................................76
Industry Perspective by Propane Education and Research Council (PERC) .............................. 78

63
 FLEET TYPES LEADING ADOPTION

BENEFITS
With simple, low cost fueling infrastructure and advancements in engine technology that have achieved
ultra-low emission levels, propane use is growing especially when low fuel and infrastructure costs matter
most.

CHALLENGES
With a focus on a small segment of fleet types, the OEM model availability and support networks are not
as robust as some clean technologies.

Fleet types leading adoption. Source: IHS Markit, Propane Education & Research Council, Center for Transportation and Environment, National Transit
Database, California HVIP, GNA Surveys
64
Benefits/Challenges: Although generally applicable to fleet types leading adoption, benefits and challenges may not apply to all fleet types or
geographies. Source: GNA surveys and interviews.
3. SNAPSHOT OF PROPANE IN FLEET APPLICATIONS

Propane—also known as liquefied petroleum ownership. Improved affordability is achieved

gas 85 (LPG) and propane autogas—is a
versatile low-carbon fuel and energy source.
For many decades, propane-fueled vehicles
have been used as reliable and affordable
alternatives to gasoline and diesel vehicles in
light- and medium-duty fleet applications.
However, in recent years, the propane
vehicle and fuel market has grown. This
growth is due to increasing adoption in the
school bus sector and several other fleet
types, the simplicity and low cost of propane
fueling infrastructure, and propane engine
technology advancements that have
achieved ultra-low emission levels.
Historically, propane autogas has not offered
a renewable fuel solution. However, the
recent introduction of renewable propane,
which can reduce life-cycle greenhouse gas
(GHG) emissions from propane vehicles by at
least 60 percent relative to conventional
vehicles, opens the door for propane autogas
to compete with many other renewable fuel
technologies as an ultra-low GHG solution for
fleets.
Affordability of Vehicles, Fuel, and
Infrastructure
Propane engine technology provides fleets
with an affordable option to improve their
emissions profile and reduce total cost of
by cost reductions in three key areas:
• Fuel: The energy-equivalent price fleets
pay for propane can be significantly lower
than what they pay for gasoline or diesel,
especially at private stations. The average
price of propane autogas (per GGE) from
2015 through 2018 was $1.51 86; this was 38
percent less than the average price of
diesel and gasoline (all normalized to a
GGE basis). 87
• Infrastructure: On-site propane fueling
stations are relatively inexpensive to
design, build, permit, and supply. For
example, a school district can install a
private fueling station for 20 propane
school buses (dual dispensers, 2,000
gallons of onsite storage) for about
$60,000 to $70,000 in capital costs. 88 This is
roughly equivalent to the capital cost for
a comparable private gasoline or diesel
station. It can be a relatively easy process
for fleets to co-locate propane tanks and
dispensers at existing gasoline or diesel
stations. Typically, turnkey packages are
available from propane suppliers,
including regular fuel deliveries.
• Vehicle: The incremental capital cost for a
typical medium-duty propane vehicle,
relative to its gasoline or diesel vehicle
counterpart, is as low as 25 percent, 89 and

85 Propane is a mix of hydrocarbons that has a minimum content (in California) of 85 percent propane. The remainder is butane

and pentene. The terms “propane” and “LPG” are often used interchangeably, as is done in this report.
86 General Services Administration, “FY 2018 Federal Fleet Open Data Set – Tableau Visualizations,” Section – Fuel Consumption, 12

July 2019, accessed at https://d2d.gsa.gov/report/federal-fleet-open-data-visualization.

87 U.S. Department of Energy, Alternative Fuels Data Center, “Alternative Fuel Price Report”, April 2020, accessed at

https://afdc.energy.gov/fuels/prices.html.
88 U.S. Department of Energy, National Renewable Energy Laboratory, “Costs Associated with Propane Vehicle Fueling

Infrastructure,” August 2014, accessed at https://afdc.energy.gov/files/u/publication/propane_costs.pdf.

89 The incremental cost varies according to chassis and engine type, as well as the desired volume of on-board fuel storage. For

example, a LPG vehicle with 0.02g/bhp-hr engine that achieves a diesel-equivalent range may have an incremental cost up to
40 percent.

65
 a school bus may be as low as 10
percent. 90
Fleet Types Leading Propane Adoption
One of the strongest markets for propane
vehicles in the U.S. is the school bus fleet
sector. More than 1.2 million students are
transported each day by propane school
buses. This trend is expected to continue as
school district orders of new propane buses
from leading OEMs grew 26 percent from
2015 to 2019 and comprised 44 percent of all
propane vehicle sales over the same
timeframe.
One of the strongest markets for propane vehicles in the U.S. is the
school bus fleet sector | Courtesy: Propane Education Research
Council (PERC)
Medium-duty Class 3 through 6 vehicles are
another strong market for propane vehicles,
supporting urban delivery vehicles, vans,
utility trucks, and shuttle fleets. Major OEMs
offer a variety of commercially available
propane vehicles to support these
applications. Additionally, certified
90Interview, Propane Education & Research Council, 6 March 2020.
91Richesson, Brian, “Cummins propane engine project reaches demonstration stage,” LPGas Magazine, 12 June 2020, accessed
at https://www.lpgasmagazine.com/cummins-propane-engine-project-reaches-demonstration-stage/.
66
conversion companies have partnered with
OEMs to provide fleets with upfitted propane
models. Among other benefits, fleets
operating propane vehicles in these sectors
report achieving fuel cost savings relative to
gasoline or diesel vehicles, with comparable
maintenance costs. Minor downsides noted
by fleets include limited parts supply and
reduced fuel economy and/or range.
The propane vehicle and fuel industry has
now set its sights on expanding product
offerings for return-to-base applications, such
as vocational and local delivery fleets.
Heavy-duty engine and vehicle OEMs are
working toward commercializing heavy-duty
propane vehicles for certain Class 7 and 8
trucking applications, with engines by
Cummins already in demonstration by a
propane delivery fleet. 91
Availability of Fueling Infrastructure
Propane stations are relatively easy and
inexpensive to install, therefore fleets can gain
access to affordable and convenient
propane by choosing an onsite station
solution. In fact, approximately 90 percent of
commercial fleet propane refueling takes
place at private fueling stations within the
fleet yard.
The network of private propane fueling is
complemented by 765 public-access
propane stations in the U.S. Although public
stations tend to have significantly higher retail
fuel prices when compared to private
stations, they provide an important on-route
refueling option, which can help alleviate
“range anxiety” of fleet users. Based on retail
sales data for propane, national consumption
 of propane for on-road vehicles
increased by 27 percent since 2015. 92
Near-Zero-Emission Engines and
Renewable Fuel
Propane vehicles provide two key
environmental benefits related to emissions.
First, they emit relatively low levels of harmful
air pollutants such as nitrogen oxides (NOx),
particulate matter (PM), and air toxics. 93 In
fact, a medium-duty propane vehicle using
the newest “near-zero-emission” propane
engine technology emits 90 percent less
smog-causing NOx than the cleanest
commercially available diesel vehicle.
has Second, dedicated propane vehicles have
life-cycle greenhouse gas (GHG) emissions
that are up to 20 percent lower than gasoline
vehicles. 94 Moreover, propane vehicles can
deliver deep GHG reductions if renewable
propane (also called bio-propane) is used as
a drop-in substitute for fossil propane.
Although renewable propane is not yet used
by propane fleets in significant volumes, it is
becoming available for propane fleets in
California. The propane industry and propane
vehicle OEMs are committed to and
prioritizing expanded production and
distribution of renewable propane in hopes
that it will become a widely available and
affordable low-GHG emissions replacement
for fossil propane.

A fleet of six propane-fueled buses transport over 200,000 guests annually at the mammoth cave national park, kentucky |
Courtesy: PERC

92 Autogas demand data from the State Energy Demand System (2012-2017), and Propane Education & Research Council’s retail

sales reports (2018-2030), collectively assembled by the Council.

93 Life Cycle Associates, “Life Cycle Analysis of LPG Transportation Fuels under the California LCFS,” prepared for the Western

Propane Gas Association, October 2017.

94 Ibid. Measured on a life-cycle basis that includes production, refining, distribution, and combustion.

67
3.1 FLEET ADOPTION AND INSIGHTS
Adoption of Propane Vehicles
by Fleets 2015-2019: School
Fleets Dominate, followed by
Delivery and Shuttle Fleets

Since first becoming available in

2012, propane school buses have
been a viable clean technology
choice for school districts. School
buses were a strong and steady
market for new propane vehicle
sales over the last five years,
growing 26.6 percent (Figure 9). 95
Of the 20 largest propane fleets in
2018, 18 were school bus fleets
operating 100 or more propane
vehicles each. 96

Manufacturer and aftermarket

conversion sales data aggregated
by the Propane Education &
Research Council (PERC) suggests
that over 32,000 propane vehicles
were sold between 2015 and 2019.
While this data is not available at Figure 9: Part 1 - Sales of Class C School Buses by year. Part 2 - Sales of
the annual level for all vehicle types, class 2a-8 propane vehicles between 2015 and 2019 by vehicle type.
Source: OEM and Aftermarket sales data aggregated by Propane
they reveal several meaningful
Education & Research Council.
trends, including:
data from PERC, 2019 vehicle sales were
• At 44 percent of the aggregate 5-year
26 percent greater than 2015 vehicle
sales, heavy-duty school buses are the
sales.
strongest segment for propane vehicles,
followed by Class 3-7 urban delivery • Aftermarket conversions are a strong
vehicles (31 percent). Vans, utility trucks solution for propane vehicle fleets. PERC
and shuttles form the remaining 25 estimates that more than half of all non-
percent of the market. (Figure 9) school bus commercial propane vehicles
are conversions of gasoline or diesel
• The school bus market for propane has
vehicles. Actual numbers are difficult to
grown significantly over the last five years.
secure because many states do not
According to manufacturer and fleet

95 Unfortunately, this data is not complete because some states don’t require fleet owners to re-register a vehicle that has been

retrofitted with a new powertrain.

96 IHS Markit, Top 20 Fleets 2019 data set.

68
 Table 6: Summary of key insights on propane fuel and vehicles from interviewed fleets

Summary of Fleet’s Experiences

Examples of Fleet Commentary
with Propane

“Our maintenance providers are used to [propane] now. We

can do in-house service – we look at it like gasoline.”
– HD – Long/Short Haul (200 trucks)
• Fuel cost savings
• Comparable maintenance
“[Propane] helps in areas where natural gas isn’t available...
Very low infrastructure cost
Benefits

•
[You] can drop a propane tank on the customer facility if they
• Fuel supply availability
can’t publicly fuel, and that meets fueling infrastructure needs
• Reduced emissions
right away.” – Mixed fleet (57 MD and HD units)
• Quiet operation
• Cleaner working environment
“When fueling, drivers wear safety equipment, but they never
spill, it is very hard to mess up. There is nothing on the ground to
clean up.” – School bus (15 buses)

“There is still fear involved with propane, namely the possibility of

burns if you don’t [fuel] correctly.”
– Municipal/Shuttle Fleet (<50 vehicles)
Challenges

• Limited parts supply

“We need the OEM chassis, so we are very disappointed that
• Reduced mileage (relative to
major companies are moving back to conversion kits.” – School
diesel)
bus (250 buses)
• Complications with conversions
“Better efficiency would make a difference. Without incentives,
there’s no good reason to [use propane]. We need to make a
good ROI.” – Mixed fleet (57 MD and HD units)

Note: Fleet types represented in interviews are school bus, refuse, and mixed medium and heavy-duty utility, long- and
short- haul. Vehicle counts indicate the number of propane vehicles operated by the fleet.

require re-registration after a conversion, Fleet Insights: Proven Performance with

which likely undercounts registered and Positive Total Cost of Ownership
operational propane vehicles.
Among the fleets surveyed, 27 percent report
These sales trends emphasize propane’s using propane vehicles. 97 Most of the fleets
distinct value for fixed-route, return-to-base currently using propane are operating heavy-
applications that are supported by an easy, duty school buses or light-duty
cost-competitive private fueling option. As municipal/shuttle vehicles.
illustrated in the following section, new as well
as converted propane vehicles today are
proving reliable in multiple duty cycles thanks
to several years of steady fleet deployments
and manufacturer developments.

97 The fleet types who report using propane vehicles in the GNA survey (pilot or purchase) include: Municipal/Shuttle, Utility, Urban

Delivery, School, Transit, Refuse, Heavy-Duty Short haul, Heavy-Duty Short/Long haul (Mixed).

69
 Figure 10: Approach to using propane by surveyed fleets that are using LPG vehicles. Source: GNA fleet survey.
Of these fleets, 79 percent had not previously
conducted a pilot demonstration before
making their decision to purchase propane
units, suggesting confidence by fleets in the
maturity of the technology (Figure 10).
Propane vehicles are not the only clean
technology used by the fleets that responded
to the survey. In fact, all of the fleets using
propane have also piloted or purchased
natural gas or battery electric vehicles.
100 percent of the fleets interviewed for
this study saved money on their fuel
costs with propane.
In general, propane fleets report meaningful
fuel cost savings and company/employee
benefits from using propane vehicles, with 100
percent concurring that propane is a more
affordable fuel than diesel or gasoline. Some
observed minor concerns and costs
associated with wait times for spare parts and
reduced vehicle efficiency compared to
diesel.
A common theme among fleets is the need
for ongoing improvements to the fuel
efficiency of propane engines and vehicles.
Additionally, one school bus fleet suggests
that improvements in hose nozzles and
70
coupling units are needed while another
highlights the importance of maintaining the
Alternative Fuel Tax Credit (AFTC) for districts
to recover costs of switching to propane. This
and other key inputs from fleets are
summarized in Table 6.
Renewable Propane: Limited Quantities
Today, Propane Industry Intentions to
Grow Supply
Renewable propane is a drop-in substitute for
conventional propane. It offers major GHG
emission reductions (60 percent, or more)
compared to any of the fossil liquid fuels
(propane, gasoline, or diesel) on a life-cycle
basis, which includes propane production,
refining, and distribution. Renewable
propane is currently co-produced during the
same process that makes renewable diesel,
using vegetable oils and animal fats (refer to
the Diesel and Gasoline Vehicles chapter).
Today, approximately 24 million gallons of
renewable propane are produced annually
in the U.S. as a byproduct of producing
hundreds of millions of gallons of renewable
diesel. However, only one provider,
Renewable Energy Group (REG), captures
and sells an even smaller fraction –
approximately 5 million gallons per year – to
the transportation market as of late 2018. 98
REG aims to triple its production of renewable
diesel, and therefore renewable propane, by
2021, and notes that other U.S. biofuel
facilities have capacity to produce
renewable propane as well.
Meanwhile, due to its limited availability, only
a small fraction of the fleets that were
surveyed or interviewed have been able to
procure and use renewable propane.
Propane fuel suppliers are pursuing a two-
pronged approach to ramp-up availability of
renewable propane, starting in California
where the industry can benefit from the
state’s Low Carbon Fuel Standard (LCFS). First,
suppliers are evaluating various ways to
“offtake” more renewable propane co-
Only one provider sells renewable
propane to the transportation market,
approximately 5 million gallons per year.
Furthermore, only 3 percent of fleets
surveyed have used renewable propane.
produced at renewable diesel plants, so it
can be fed into transportation fuel markets as
a substitute for fossil propane. Second, the
industry is exploring other processes and
feedstocks to produce renewable propane
that would increase supply in the U.S. and
reduce costs. 99 One propane distributer
estimates that it already has sufficient
renewable propane to fuel all propane
vehicles in California.

3.2 PROPANE AS A SUSTAINABLE FLEET TECHNOLOGY

Fuel Price: Consistently Low Private
Fueling Costs

Propane’s competitive and relatively stable

price, compared to that of diesel and
gasoline, has been an important advantage “Most of our propane customers put their
contributing to fleet adoption. Many fleet own infrastructure in and were satisfied.
users express preference for propane vehicles Many companies will drop a tank on a
location for free,” says a representative
over conventionally fueled vehicles because
of Penske Transportation Solutions.
propane enables them to avoid dramatic
swings in fuel price common in gasoline and
diesel markets. Some fleets even prefer bi-fuel
vehicles because of the flexibility to operate
on propane or gasoline, depending on which
is currently the lower-cost fuel.

98 McCarthy, Joe, “Renewable propane may be the key to the industry’s future,” LPGas Magazine, 12 November 2018, accessed

at https://www.lpgasmagazine.com/renewable-propane-may-be-the-key-to-the-industrys-future/.
99 For examples, see Gas Technology Institute, “Expert Analysis of the Concept of Synthetic and/or Bio-LPG,” February 2010,

accessed at https://propane.com/wp-content/uploads/2020/01/15866_PERC_BioPropane.pdf.

71
As Figure 11 shows, fleets that choose private
fueling pay on average 38 percent less for
propane compared to diesel and gasoline,
on a per-GGE basis. 100 The cost of fueling at
public propane stations is typically higher
than private stations, owing to the costs
associated with retail dispensers and point of
sale systems. Despite these additional costs,
propane autogas is typically substantially less
expensive than propane sold in the tank and
bottle market (used for BBQ’s and other
domestic uses). 101
Fuel Availability and Infrastructure: Public
Network Supplements Affordable Private
Fueling
Propane is one of the most ubiquitous
alternative fuels available to fleets. Propane
fueling stations can be developed
independently or co-located with existing
diesel and/or gasoline stations at relatively
low cost and with small footprints. For
example, a school district can install a private
fueling station for 20 propane school buses
(dual dispensers, 2,000 gallons of onsite
storage) for about $60,000 to $70,000 in
capital costs, 102 which can often be
amortized in the cost of the fuel over the

Figure 11: Average retail prices of gasoline, diesel and propane using private propane retail prices Source: U.S.
Department of Energy Alternative Fuels Data Center (2019), Transportation Energy Databook (2015), and Federal
Open Data Visualization Report (2018).

100 Ibid.
101 U.S. Department of Energy, Alternative Fuels Data Center, “Alternative Fuel Price Report”, April 2020, accessed at
https://afdc.energy.gov/fuels/prices.html. Note - Prices in 2015 were high due to an especially cold winter combined with
increased demand for U.S. exports.
102 U.S. Department of Energy, National Renewable Energy Laboratory, “Costs Associated with Propane Vehicle Fueling

Infrastructure, August 2014, accessed at https://afdc.energy.gov/files/u/publication/propane_costs.pdf.

72
contract term with a fuel supplier. 103 This is
roughly equivalent to the capital cost for a
comparable private gasoline or diesel station.
Typically, turnkey packages are available
from propane suppliers, including regular fuel
deliveries.
The relatively low-cost fueling infrastructure,
combined with ease of permitting and
installation, has helped make propane a
readily accessible alternative fuel for fleets.
While private stations are not widely tracked,
federal fleet data and guidance from the
industry suggest that approximately 90
percent of municipal, school bus, and urban
delivery fleets using propane rely on private
station refueling. 104 “Most of our propane
customers put their own infrastructure in and
were satisfied. Many companies will drop a
tank on a location for free,” says a
representative of Penske Transportation
Solutions.
At least 765 public stations supplement the
private fueling network, providing on-route
propane vehicle fueling services nationally.
The top two states for public propane
autogas stations are Texas (117 stations) and
California (70 stations). 105 While private fueling
station access is preferred from a cost and
logistics perspective, even those fleets using
private fueling report that accessible public
propane stations help provide convenience
and alleviate driver range anxiety. 106
Demand for propane as a transportation fuel
in the U.S. has been growing. Retail fuel sales

Figure 12: Historic demand for propane by on-road fleets nationally, and among the top four consuming states
(CA, FL, IL, TX). The Top 4 states have accounted for approximately 30 percent of consumption each year to
date. Source: State Energy Demand System and PERC. Data in 2019 and 2020 is projected.

103 Propane Education & Research Council (PERC), https://propane.com/for-my-business/fleet-vehicles/propane-autogas-

refueling-options.
104 The Propane Education & Research Council (PERC) advises that approximately 90 percent of all municipal, school bus, and

urban delivery fleets operate their own private fueling stations. IHS data from 2018 indicates that the vast majority of the 267 fleets
that were operating propane vehicles were in these segments, and that fleets in the high-consuming states of Kansas and
Colorado did not report to this data set. Therefore, an estimate of 240 private fueling stations is conservative.
105 U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations”, downloaded December 2019, accessed

at https://afdc.energy.gov/stations#/analyze.
106 GNA fleet survey, “Fleet Perspectives on Clean, Advanced Fuels and Technologies,” 2019-2020.

73
 data show that national propane
consumption for on-road vehicles has
increased by 27 percent since 2015 (Figure
12). 107 With very little to no public station
growth planned through 2021, it can be
concluded that most future growth will be in
private fueling.
Vehicle Model Availability: Over Three
Dozen Models, Many with Ultra Low-NOx
Engines
Through decades of deployments and
technological innovation, today a large array
of commercial propane vehicles are
available to fleets spanning many
applications and duty cycles. Some propane
fleet vehicles are equipped with dedicated
propane engines, while others have bi-fuel
engines that can use either propane or
gasoline.
A large array of commercial propane vehicles are available to fleets spanning applications and duty cycles | Courtesy: PERC
107 GNA analysis of propane Autogas demand data from the State Energy Demand System (2012-2017), and PERC retail sales
reports (2018-2030), collectively assembled by PERC.
74
The strongest emissions reductions are
achievable with dedicated propane vehicles
powered by ROUSH CleanTech’s ultra-low
NOx engine, which can achieve 90 percent
or greater reduction of NOx emissions relative
to the EPA’s standard for heavy-duty
engines. 108 Multiple vehicle OEMs are
beginning to offer ultra-low-NOx propane
engine technology in the highest-adoption
vehicle segments, including school,
municipal/shuttle, and delivery vehicles.
Today, three dozen medium- and heavy-duty
models in a variety of body types are
available with propane powertrains from nine
manufacturers and/or their preferred
upfitters. These models are primarily powered
by dedicated propane engines from
Freightliner (DriveForce 8L and 8.8L engine)
and ROUSH CleanTech.
 Figure 13: Medium- and heavy-duty propane vehicles available today by body type and manufacturer.
Vehicles in distinct weight classes are counted as unique models. Source: GNA.

Freightliner Custom Chassis Corporation’s
(FCCC) MT series heavy-duty trucks are
designed to serve various vocational duty
cycles; and its S2G cab-and-chassis is
designed for medium-duty urban delivery
applications. Notably, these propane
products sell for incremental costs as low as 10
percent more than their diesel or gasoline
counterparts.
The combination of reliably low fuel prices,
low-cost infrastructure, and relatively low
capital costs make propane an affordable
solution for many school and medium-duty
fleets. It is especially conducive for fleets with
return-to-base duty cycles that are in areas
with limited to no access to fuel and/or
infrastructure necessary to operate other
types of alternative fuel vehicles described in
this report.

Propane engines reached a major milestone in 2018 when the ROUSH

CleanTech ultra-low NOx engine was certified to achieve 90 percent or greater
NOx emissions reduction.

75
3.3 LOOKING FORWARD

Propane vehicles have seen a growing that the supply of renewable propane can
uptake in fleet deployments over the past five keep pace with increasing demand without
years, especially within the school bus, shuttle substantial price increases—regardless of a
bus, and medium-duty delivery markets. fleet’s geographic location.
While propane as a transportation fuel
Below are several key factors for fleets to
currently entails limited vehicle offerings, it is
monitor that will influence the ability of
poised for continued growth in the sectors it
propane to compete with other
serves today. This is in large part due to overall
technologies.
fleet satisfaction, low fueling costs, and
minimal incremental vehicle costs over
Areas for OEM Investments in Increased
conventionally fueled vehicles.
Efficiency
Increasingly—as described further below—
Today’s propane vehicles use spark-ignition
emergence of ultra-low-NOx propane
engines, the same basic engine type used in
vehicles is also supporting growth in propane
gasoline and natural gas vehicles. Spark-
vehicles. Statements from mainstream OEM
ignition engines are less efficient than
and propane industry representative suggest
compression-ignition (diesel) engines, which
that the number of engine and vehicle
dominate the heavy-duty vehicle market. 109
product offerings is anticipated to increase,
Improvements in diesel engine efficiency
extending ultra-low-NOx propane vehicles
between 2010 and 2020 have eroded the fuel
into fleets that operate higher weight classes
cost advantage of propane vehicles, making
(especially Class 7 and 8 trucking). A key
propane’s total cost of ownership (TCO)
challenge for the propane industry, OEMs,
advantage less compelling. Improvements in
and suppliers will be to ensure that sales and
the efficiency of propane engines will be an
deployments within traditionally strong
important means to improve TCO while
market sectors for propane continue to grow
further reducing GHG emissions.
while making inroads into new market
segments.
Hybrid-electric propane fleet vehicles are
already being demonstrated in light-duty taxi-
Finally, if renewable propane becomes
cab applications and there is potential for this
widely available to replace conventional
technology in medium- and heavy-duty
(fossil) propane, there is a substantial
applications. 110 The tradeoff of hybridization—
opportunity for fleets to achieve major GHG
for any fuel—is increased complexity and
emissions reduction by using propane
manufacturing costs, which result in higher
vehicles. A key challenge for propane
incremental vehicle costs. OEMs and fuel
suppliers and stakeholders will be to ensure
providers are collaborating to determine the

109 California Air Resources Board, Low Carbon Fuel Standard, “Final Regulation Order,” July 2019, accessed at
https://ww3.arb.ca.gov/fuels/lcfs/cleanfinalregorder112612.pdf.
110 See the Propane Education & Research Council’s video and story at https://propane.com/for-my-business/fleet-

vehicles/propane-autogas-hybrid-technology/.

76
role that hybridization should play as the next
generation of medium- and heavy-duty
propane vehicles are manufactured and
deployed.
Ultra-Low-NOx Engine Uptake
With the introduction of new ultra-low-NOx
medium- and heavy-duty propane engines,
propane may be poised to make major
increases in commercial sales and
deployments as observed after the natural
gas market offered its near-zero-emissions
engines. Prominent uses include some Ford
commercial vehicles and Blue Bird propane
school buses. The deep emission reductions
that propane vehicles can now deliver are
helping encourage regulatory agencies to
expand availability of incentive funding for
propane vehicles, further increasing their
attractiveness to fleets.
The success of ultra-low NOx propane engines
in the marketplace—and their acceptance
by regulatory and funding agencies,
especially in the very large market of
California—will have bearing on the future of
propane to meet the needs of fleets as a
sustainable technology. The degree to which
renewable propane emerges as a viable
77
replacement for fossil propane will also play
an important role.
Increased Availability of Renewable
Propane
Today, fleets have limited access to
renewable propane, but the propane
industry is working to make it more widely
available. More advanced methods to
produce renewable propane have the
potential to deliver even greater GHG-
reduction benefits than today’s methods. As
propane fleets increasingly access
renewable propane—and it becomes more
affordable through expanding low-carbon
fuel markets such as California’s LCFS—fleets
will find it an attractive alternative to fossil
propane as a means to cut GHG emissions at
favorable costs.
A key trend to watch is if renewable diesel
producers will repurpose the renewable
propane they co-produce, to make it
available to fleets in large volumes for use in
propane vehicles. Considering the current
growth in production of renewable diesel, this
could make very significant volumes of
renewable propane available for fleet use at
an affordable price in states like California
that have low-carbon fuel markets.
Industry Perspective by Propane Education and Research Council (PERC)

Current State of Propane Autogas Technology

Propane autogas vehicles are reaching near-zero-emissions levels with engine offerings
commercially available today. In 2018, two OEMs introduced ultra-low NOx propane autogas
engines that are 90 percent cleaner than mandated US Environmental Protection Agency
(USEPA) standards and were certified to the California Air Resources Board (CARB) low NOx
emissions standard. 111 The new engine technology, available from Roush CleanTech and
Greenkraft, Inc., has moved propane autogas even closer to achieving zero NOx emissions
levels.

These engine options are thriving in the

school bus market and with fleets
operating Class 3-7 vehicles (such as
food delivery and shuttle buses). On the
nation’s roadways today, propane
autogas is powering top fleets and
safely transporting more than 1.2 million
students to school and home every day.

Propane autogas options are plentiful in

the medium-duty industry where
configurations are available from most
major vehicle OEMs. Additionally, the
EPA/CARB certified conversion partners
for the major OEM engines have
solutions to convert almost any
commercial vehicle model to propane
autogas.

The low emissions profile of propane Propane vehicles are reaching near-zero emissions levels with engine
autogas engines is a compelling option offerings commercially available today | Courtesy: PERC
for fleets, as highlighted in a 2018 real-world comparison study.

In the study, commissioned by the Propane Education & Research Council, West Virginia
University’s Center for Alternative Fuels Engines and Emissions (CAFEE) compared the emissions
of 2014-2017 model year Bluebird propane and diesel school buses. Test routes included both
city and highway roads, and a stop-and-go route similar to standard school bus operation.

111 Defined as heavy-duty engines with .02 grams per brake horsepower-hour.

78
Researchers installed a portable
emissions measurement system to
measure the exhaust emissions of
each vehicle in operation, and
measured the impacts of cold and
hot starts, for a total of 36 test routes.

On the stop-and-go route, the best

in class propane autogas bus
reduced NOx emissions by 96
percent and carbon dioxide by 13
percent from the best in class clean
diesel bus. Read more about the
study on propane.com or click here.

Future Propane Autogas Technology

Propane autogas will continue to Propane options are plentiful in the medium-duty industry where
innovate in vehicle technologies configurations are available from most major vehicle OEMs | Courtesy:
PERC
and applications, providing clean
solutions for fleets in a variety of industries. And that starts with more engine manufacturers
developing cleaner propane autogas engine offerings. First and foremost, will be the expansion
of the ultra-low NOx engine offerings by more manufacturers. PSI, for one, has already
announced plans to produce an ultra-low NOx solution for the medium-duty market in 2020.

In addition to an expansion of engine partners offering ultra-low NOx options for fleets, propane
autogas will soon be servicing even more fleets and vehicle types with the introduction of
propane autogas engines for class 7-8 vehicles. These propane autogas solutions will offer the
necessary diesel-like performance required of those “baby class 8” vehicle applications
combined with the low emissions profile and low cost of operation propane autogas fleet
owners expect.

Additionally, renewable propane will become much more prevalent in the near future—
growing in both production as well as deployment by fleets. Renewable propane contains the
same chemical and physical properties as fossil propane, enabling a true drop-in solution for
fleets that utilize propane, albeit with fewer life-cycle carbon dioxide emissions. The renewable
fuel is a byproduct of the production processes for renewable diesel and jet fuel, which converts
plant and vegetable oils, waste greases, and animal fat into fuel. In fact, several U.S.-based
refineries are already producing renewable propane that is being utilized in several states on
both coasts.

As more research and attention is given to what is possible for renewable energy across the U.S.
and the world, this puts propane autogas at the forefront of the conversation among solar, wind,
and other biofuels. Additionally, as renewable technology gains traction beyond the fleet
vehicle market, we can see even greater long-term benefits across many energy markets. It is
predicted that renewable propane will be capable of supplying most of the world’s propane
needs by 2040.

79
Battery Electric Vehicles:
Promising Results from First
Deployments and Big
Commitments for the Future

80
Chapter Contents
4. SNAPSHOT OF BATTERY ELECTRIC VEHICLES IN FLEET APPLICATIONS ........................................ 83
Zero-Emission Goals, Total Cost of Ownership and Driver Satisfaction .................................... 83
Growing Availability of BEVs in Challenging Medium- and Heavy-Duty Fleet
Applications ................................................................................................................................... 84
Investments to Reduce High Capital Costs, Infrastructure Gap, Limited Range and
Payload .......................................................................................................................................... 85
Shift Towards Renewable Electricity Accelerating .................................................................... 86
The Need for Government-Industry Partnerships to Overcome Barriers ................................. 87
4.1 FLEET ADOPTION AND INSIGHTS ................................................................................................. 88
Adoption of Battery Electric Vehicles 2015-2019: Led by Transits and School Districts
with Demonstrations in Other Fleet Types and Big Orders Ahead ........................................... 88
Fleet Insights: Fuel and Maintenance Savings are Achievable, but Vehicle Costs and
Performance Need Work ............................................................................................................. 92
Renewable Forms of Electricity: Provides 40 Percent GHG Reduction (and Improving) ...... 94
4.2 BATTERY ELECTRIC VEHICLES AS A SUSTAINABLE FLEET TECHNOLOGY .................................... 96
Fuel (Electricity) Price and Cost: Low-Cost Potential with the Right Geography and
Management ................................................................................................................................ 96
Fueling (Charging) Infrastructure: Public Fast Fleet Charging Very Limited, but Fleet
Charging Investments Are Underway ......................................................................................... 98
Vehicle Model Availability: More than 90 Models, Most Are Early Commercial
Products with High Price Tags .................................................................................................... 100
4.3 LOOKING FORWARD .................................................................................................................103
Industry Perspective by Edison Electric Institute (EEI) ................................................................. 107

81
 FLEET TYPES LEADING ADOPTION

BENEFITS
Promising fleets lower maintenance and fueling costs with the proper management, this zero-emission
technology achieves early commercialization milestones while continuing to dominate headlines.

CHALLENGES
With infrastructure, technology, and cost barriers to overcome, battery electric vehicles still face
challenges on the path to widescale commercialization and deployment.

Fleet types leading adoption. Source: IHS Markit, Propane Education & Research Council, Center for Transportation and Environment, National Transit
Database, California HVIP, GNA Surveys
82
Benefits/Challenges: Although generally applicable to fleet types leading adoption, benefits and challenges may not apply to all fleet types or
geographies. Source: GNA surveys and interviews.
4. SNAPSHOT OF BATTERY ELECTRIC VEHICLES IN FLEET APPLICATIONS
In a year where battery electric vehicles
(BEVs) dominated the headlines, early
deployments are beginning to demonstrate
that BEVs can provide benefits for a growing
array of on-road fleet applications. BEVs
provide fleets with the transformational ability
to transport goods and people without
tailpipe emissions and with more efficient
technology than gasoline or diesel vehicles.
These technological advantages have the
potential to offer lower maintenance and
fueling costs when combined with managed
charging and low utility rates.
Across all vehicle types and weight classes,
original equipment manufacturers (OEMs) are
developing, demonstrating, and selling
increasing numbers of BEVs for fleet
applications. OEM activities are accelerating
to improve and commercialize medium- and
heavy-duty BEVs that can meet rigorous fleet
requirements to move goods or provide
public transportation. Over the last five years,
the number of early commercial BEV product
offerings as well as sales have grown in the
medium-duty, transit, and school bus market
segments. Fleets have already deployed, or
initiated procurement of, more than 2,000
battery electric transit and school buses.
Several heavy-duty truck OEMs are now
demonstrating Class 8 battery electric
tractors and have announced intentions to
launch early commercialization efforts in the
next few years. Based on large orders and
commitments made by transit fleets as well as
medium and large commercial trucking
fleets, including Amazon, PepsiCo, and
FedEx, some of which are non-binding, U.S.
deliveries and deployments of heavy-duty
BEVs are estimated to roughly double over
the next two years (2021 through 2022).
83
While large fleets have placed early orders for
heavy-duty BEV trucks, significant challenges
must be resolved before widespread
commercialization and adoption are likely to
occur in this segment. These challenges
include high capital costs, limited range, and
charging infrastructure complications.
Fortunately, electric utilities, funding
agencies, OEMs, and equipment vendors are
collaborating to address these barriers and
are already making great strides.
Early deployments are demonstrating that BEVs can provide
benefits for a growing array of fleets | Courtesy: Penske
Transportation Solutions
Zero-Emission Goals, Total Cost of
Ownership and Driver Satisfaction
Of the fleets surveyed for this report, 69
percent plan to pilot or purchase BEVs in the
next two years. This underscores fleets’
growing confidence that BEVs can meet their
operational needs, at least partially.
Information gathered during surveys and
interviews suggests that fleets are purchasing
or considering BEVs because of several key
factors, including:
• BEVs are the most commercially and
technologically mature products for
fleets to comply with zero-emission
vehicle (ZEV) phase-in requirements by
 government agencies or corporate
sustainability goals.
• BEVs have the potential to improve a
fleet’s total cost of ownership (TCO)
relative to baseline vehicles by offsetting
high capital costs with lower operational
costs. More specifically, BEVs use highly
efficient electric drive systems and have
a simpler design using fewer moving
parts than internal combustion engine
(ICE) vehicles. This reduces
maintenance and can offer fuel cost
savings, especially with a well-managed
charging approach.
• BEV purchases are typically eligible for
the highest award amounts under
government clean vehicle grant and
incentive programs, which offset higher
capital costs and further improve the
TCO.
• BEVs often improve driver satisfaction
due to their quieter operation, lack of
tailpipe emissions and petroleum odors,
excellent acceleration, and overall
environmental benefits.
Growing Availability of BEVs in
Challenging Medium- and Heavy-Duty
Fleet Applications
Over the last few years, OEMs have greatly
accelerated their development of BEV
technology for medium- and heavy-duty
weight classes, and important early
commercialization milestones are now being
achieved. At the 2019 ACT Expo, Roger
Nielsen, President and CEO of Daimler Trucks
North America, announced that “the future is
electric” and committed his company to lead
America’s heavy-duty BEV transition. Today,
at least 21 OEMs commercially offer more
than 90 medium- and heavy- duty BEV
112 FedEx, “FedEx and Chanje to Develop Groundbreaking Charging Infrastructure,” 27 February 2020, accessed at
https://newsroom.fedex.com/newsroom/fedex-and-chanje-to-develop-groundbreaking-charging-infrastructure/.
84
models; this is compared to approximately 14
OEMs offering over 50 models in 2018. The vast
majority of BEVs for today’s fleet market are
designed for people transport (e.g., transit
buses, school buses, shuttle buses) or urban
goods movement (e.g., Class 2 through 6
delivery trucks and panel vans).
BEV sales have grown the most in medium-
duty fleet applications, and upfitters have
played key roles in this market segment.
Today, upfitters offer more than 50 BEV
models that are built on Ford, Isuzu, and other
popular medium-duty truck chassis. These
products can offer fleets an affordable,
readily available path to electrification. The
market has recently expanded, however,
with traditional truck and bus OEMs such as
Daimler and Peterbilt—as well as newcomer
OEMs like BYD, Rivian, Chanje, and others—
designing, testing, and commercializing
medium-duty BEVs. Collectively, these OEMs
are expected to introduce more than a
dozen Class 3 through 6 BEV models within the
next three years.
Fleets are taking notice of this growing
availability of medium-duty BEVs, and capital
investments are increasing. Amazon placed
the world’s largest pre-order of BEVs with
100,000 delivery vans from startup Rivian,
which it expects to deploy over the next ten
years. UPS announced an investment in UK-
based startup Arrival, with plans to continue
electrifying their fleet by ordering up to 10,000
battery electric delivery vans. Similarly, FedEx
has a partnership with Chanje to deploy 1,000
electric delivery vans and build out the
necessary charging infrastructure at 42 FedEx
stations. 112
 The heavy-duty goods movement sector has
seen significant growth as well. Most major
Class 7/8 truck OEMs, including Daimler,
Volvo, Peterbilt, and Kenworth, are working
on heavy-heavy-duty battery electric trucks
for near-term commercialization. OEMs have
partnered with fleets, such as Penske, JB Hunt,
Schneider National, and Dependable
Highway Express, to test the integration of
multiple battery electric trucks in real-world
operations. 113 These early demonstration
projects are designed to inform larger-scale
early commercial deployments in the coming
years.
Walmart, Anheuser-Busch, and DHL, among
others. Tesla’s Semi is currently two years
behind schedule, and the first deliveries to
fleet buyers are expected in 2021. Nikola,
which initially entered the heavy-duty vehicle
market in 2014 with plans to develop heavy-
duty fuel cell trucks, announced in 2019 that it
is also developing a BEV option for the urban,
short-haul trucking market. Nikola’s first units
are expected to be produced and delivered
to fleets in Europe. No commercial timelines
for the U.S. market have been publicly
released.
Investments to Reduce High Capital
Costs, Infrastructure Gap, Limited Range
and Payload

Electrification presents certain vehicle-

Of the 20 largest BEV fleets in 2019, the majortity are transit fleets
| Courtesy: LA Metro
New entrants to the Class 7/8 vehicle market
include BYD, Lion Electric, Tesla, and Nikola.
All are in the early stages of developing
heavy-duty BEVs, while claiming to make
significant technological and/or cost
breakthroughs. Tesla announced that it has
received more than 2,000 orders for its Semi, a
Class 8 battery electric tractor. 114 Many of the
orders were made by big-name fleets such as
specific challenges for commercial fleets.
Fleets that were surveyed identified higher
capital costs, significantly reduced driving
range, and long refueling (charging) times as
key challenges to widespread BEV adoption.
These challenges are all tied to the current
limits of battery technologies. Adding more
battery capacity to increase range presents
tradeoffs with payload capacity, cost, and
other specifications that are critical factors in
fleets’ business models. These limitations
become especially pronounced for higher
weight classes and longer-range duty cycles
that are currently dominated by diesel
vehicles.
Another big challenge to widespread BEV
adoption is the current lack of a well-
developed, standardized charging
infrastructure. Although the U.S. population of

113 Penske and NFI are participating in Daimler’s “Innovation Fleet” of initial eCascadia heavy-duty and eM2 medium-duty BEV

demonstrations; Schneider, JB Hunt, and others are participating in Daimler’s “CX Fleet” of pilots of the eCascadia and eM2;
Dependable Highway Express is participating in Volvo’s LIGHTs pilots of its VNR Electric.
114 O’Dell, John, “Here’s Everything We Know About the Tesla Semi,” Trucks.com, 5 September 2019, accessed at

https://www.trucks.com/2019/09/05/everything-we-know-about-the-tesla-semi-truck/.

85
EV charging stations now exceeds 26,000, the of electricity like natural gas and renewable
vast majority of the charging equipment and power.
networks are designed to accommodate
light-duty passenger BEVs. Existing charging California and other proactive states are
stations generally lack the electrical mandating the use of renewable and other
infrastructure, space, and standardized zero-emission electricity to systematically
connections needed to charge commercial “decarbonize” their grids. The net result is that
medium- and heavy-duty BEVs. BEVs are gradually getting cleaner due to the
continued reduction in indirect emissions.
Electric utilities, funding agencies, OEMs, and Fleets can also increase their use of emission-
equipment vendors are collaborating to free electricity by adding on-site renewable
address these challenges. For example, energy generation, or by purchasing
California’s three investor-owned utilities renewable power from their energy providers.
(IOUs) have committed $750 million to
expand EV infrastructure in support of fleet
needs. 115 Furthermore, industry stakeholders,
such as OEMs and charging equipment
providers, are cooperating to standardize DC
fast charging (DCFC) and high-power
charging of 1 megawatt and higher. 116 Finally,
to address battery limitations, nearly all major
OEMs and battery providers are working on
solutions to bring average costs down 35
percent to $100 per kilowatt-hour (kWh),
which many experts say is needed to
successfully scale BEV deployments. 117

Shift Towards Renewable Electricity

Accelerating

As noted, BEVs do not directly emit regulated

air pollutants or greenhouse gases (GHGs).
However, the electricity used to charge BEVs
does produce powerplant-related emissions.
Fortunately, the U.S. power sector is
accelerating towards lower emission sources

Thomas Built “Jouley” Safety-T-Liner C2 electric school bus

| Courtesy: Daimler Trucks North America

115 Merchant, Emma Foehringer, “California Regulators Approve Landmark Utility EV-Charging Proposals,” Greentech Media, 31

May 2018, accessed at https://www.greentechmedia.com/articles/read/california-cpuc-approves-landmark-ev-charging-

proposals.
116 “CharIN is publishing a solution for high power charging of trucks and busses beyond 1 MW,” Charinev.org, 25 February 2019,

https://www.charinev.org/news/news-detail-2018/news/charin-is-publishing-a-solution-for-high-power-charging-of-tucks-and-
busses-beyond-1-mw/.
117 “Electric-car battery prices dropped 13 percent in 2019, will reach $100/kwh in 2023,” GreenCar Reports, December 2019,

https://www.greencarreports.com/news/1126308_electric-car-battery-prices-dropped-13-in-2019-will-reach-100-kwh-in-2023

86
 The Need for Government-Industry
Partnerships to Overcome Barriers
For medium- and heavy- duty fleets, BEVs are
a clean vehicle solution that is still in varying
stages of commercial readiness. While fleets
perceive many benefits from switching to
BEVs, they also face barriers to successful BEV
operations and expanded adoption.
Fortunately, much is being done through
government-industry partnerships to
systematically address challenges. These
include vehicle OEMs, electric utilities,
charging equipment OEMs, funding
agencies, renewable electricity providers,
and major end-user fleets, all working
collaboratively to better understand charging
options and costs, standardize infrastructure,
improve battery technology, reduce vehicle
costs, and more.
While today’s BEV technology is most viable
for fleets operating short-range duty cycles in
regions with strong incentives, government-
industry collaboration is needed to further
support the expansion of BEVs to other fleet
types in the coming years.

U.S. EV public charging station count now exceeds 26,000 but few provide the electrical infrastructure, space, and standardized
connections needed to charge commercial medium- and heavy-duty BEVs. Private stations at fleet depots like this one provide
much of the EV charging for fleets today. | Courtesy: Penske Transportation Solutions

87
4.1 FLEET ADOPTION AND INSIGHTS
Adoption of Battery Electric Vehicles
2015-2019: Led by Transits and School
Districts with Demonstrations in Other
Fleet Types and Big Orders Ahead
School and transit bus markets have been
strong segments for early adoption of heavy-
duty BEVs. Their fixed route, return-to-base
duty cycles fit well with available battery
appears to be largely due to increased
deployments—often with strong government
support—of early commercial electric transit
buses from manufacturers like BYD, Proterra,
and New Flyer. 118 Data on early adoption of
BEVs in these segments offers the following
insights:
• Around the country, over 400 battery
electric school buses have been

Around the country, over 400 battery electric school buses have been awarded funding
or deployed to date, while at least 1,100 battery electric transit buses were awarded
funding or deployed between 2015 and 2018.

capacities and allow for relatively low- awarded funding or deployed to date,
powered overnight charging. Reports from while at least 1,100 battery electric
government and non-profit sources indicate transit buses were awarded funding or
that BEV adoption grew significantly in these deployed between 2015 and 2018.
segments between 2015 and 2019. This Manufacturer and fleet announcements

Figure 14: Part 1 - Vouchers awarded under California's HVIP program from 2015-2020, by fleet type. Part 2 -Total
share of BEVs by fleet types among 20 largest BEV fleets in the U.S. Source: California Hybrid and Zero-Emission
Truck and Bus Voucher Incentive Project (HVIP), data updated 31 May 2020; IHS Markit, Top 20 Fleets Vehicle
Registration data, 2019.

118Federal Transit Agency, “National Transit Database,” April 2020, accessed at https://www.transit.dot.gov/ntd; California Air
Resources Board, “Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP)”, April 2020, accessed at
https://www.californiahvip.org/.

88
 suggest that these numbers have
continued to increase in 2019 and
2020. 119
• In California, 133 battery electric school
buses and 269 zero-emission transit buses
(most of which are battery electric) have
been awarded or deployed under the
HVIP program (Figure 14). 120
• Of the 20 largest BEV fleets in 2019, the
majority are transit fleets (Figure 14).
Today, more than a dozen transit
agencies operate an average of 13
battery electric buses each. 121
• Zero-emission transit bus deployments
are occurring across the country: the
Federal Transit Administration funded
projects in 42 states in 2020. 122 These
include states in the Mid-west and West
that have relatively low population
densities (e.g., Montana, Arizona,
Arkansas, Iowa, Kansas, Oklahoma, and
Hawaii).
purchased 49 electric buses (more than
half its fleet), and plans to be the nation’s
first fully electric transit fleet; and
Regional Transportation District in
Colorado that has 36 battery electric
buses with plans to order 17 more.
• Several of the largest transit fleets in the
country have already set timetables for
full transitions to battery electric buses:
Los Angeles County Metro by 2030, San
Francisco by 2035, and Chicago and
New York City by 2040. 123
Battery electric transit and school buses have
become growing funding priorities for air
quality regulators and other types of
government agencies. In 2014, about 200
zero-emission buses were purchased with
incentive funding, including both transit and
school buses. In 2018, this increased seven-
fold to nearly 1,400 units. 124 The U.S. Federal
Transit Administration’s Low- or No-Emissions
(Low-No) Bus Program is a critical source of

Several of the largest transit fleets in the country have already set timetables for full
transitions to battery electric buses: Los Angeles County Metro by 2030, San Francisco
by 2035, and Chicago and New York City by 2040.

• Notable transit agencies leading
adoption include King County Metro in
Washington state, which has procured
40 battery electric buses and plans to
add 80 more in 2021; Antelope Valley
Transit Authority in California, which has
funding for transit agencies. Federal funding
for battery electric transit buses jumped to
$130 million in 2020, from an average of $84.5
million in the previous two years. 125 State-level
funding for battery electric buses is also
growing. In 2019, New York state designated

119 Center for Transportation and the Environment, 2009 – 2018 Award and Sales data, updated June 2020.
120 California Air Resources Board, “Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP)”, June 2020, accessed
at https://www.californiahvip.org/.
121 GNA analysis of IHS Markit’s Top 20 Fleet vehicle registration data for 2019.
122 Federal Transit Administration, “Fiscal Year 2020 Low or No-Emission (Low-No) Bus Program Projects,” accessed at

https://www.transit.dot.gov/funding/grants/fiscal-year-2020-low-or-no-emission-low-no-bus-program-projects.
123 Marcacci, Silvio, “Electric Buses Can Save Local U.S. Governments Billions. China's Showing Us How It's Done,” Forbes.com, 21

May 2018, accessed at https://www.forbes.com/sites/energyinnovation/2018/05/21/electric-buses-can-save-americas-local-

governments-billions-chinas-showing-us-how-its-done/.
124 Ibid. Note - although this number includes fuel cell electric buses as well as battery electric, the vast majority of awards and

deployments are for battery electric buses.

125 GNA analysis of Federal Transit Administration Low-No Program awards in 2018, 2019, and 2020, accessed at

https://www.transit.dot.gov/funding/grants/fiscal-year-2020-low-or-no-emission-low-no-bus-program-projects.

89
$24 million to replace diesel transit buses with
battery electric buses, while the California
Energy Commission approved $70 million for
200 battery electric school buses. 126,127 Electric
utilities are now starting to allocate incentive
funds, as well. For example, in 2020 Dominion
Energy is helping to fund 50 electric school
buses in Virginia. 128 This may grow to at least
1,000 by 2025 if the state approves Dominion’s
plan to reach a goal of replacing 50 percent
of the diesel school buses with battery electric
models by 2025, and 100 percent by 2030.
Delivery truck fleets have also been strong
early adopters since 2015—especially in
California where fleets can obtain purchase
vouchers under the state’s HVIP program
(Figure 14). As a result of that program’s
funding, early adopter fleets now operate an
average of 28 medium-duty delivery BEVs
Utility fleet deployments have also increased
as new and emerging models address the
diverse and specialized duty cycle
requirements in this segment. BEV products
are emerging in the shuttle and medium-duty
truck segments used by many utility fleets,
including from leading OEMs Ford and GM.
Among surveyed utility fleets, 64 percent
have used BEVs to date and most of those
intend to purchase BEVs in the next 24
months. Exelon’s fleet of 7,244 vehicles is one
example. The utility has set a goal to electrify
30 percent of its fleet by 2025 and 50 percent
by 2030. The company expects to introduce
electric SUVs and medium-duty trucks starting
in 2021, followed by medium-and heavy-duty
electric bucket trucks starting as early as 2024.
Class 8 tractors for over-the-road trucking are
a particularly challenging application for BEV

Among surveyed utility fleets, 64 percent have used BEVs to date and most of those
intend to purchase BEVs in the next 24 months.

each. Aramark is one example with 31 battery
electric delivery vehicles, which collectively
reached 275,000 miles in June 2020. 129
Vehicles obtained from upfitters represent a
larger share of BEVs in this segment than those
sold by OEMs. As with transit and school buses,
fleets that operate urban delivery vans and
trucks with relatively short (<200 mile) daily
ranges—and are well suited for overnight
charging—can offer a strong fit and
compelling business case for using BEVs.
technology, largely due to range limitations.
Most (if not all) OEMs of Class 8 trucks are
working on BEV models. Currently, these are in
pre-commercial states of development and
demonstration, although some OEMs are
announcing aggressive timetables for sales.
The first demonstrations of these vehicles by
Daimler and BYD began with fleet partners in
2019. As of June 2020, the 20 Daimler
eCascadias in the hands of Penske and NFI
had logged over 250,000 miles of real-world
experience. Daimler is expanding its program

126 California Energy Commission, “Energy Commission Awards Nearly $70 Million to Replace Polluting Diesel School Buses with All-

Electric School Buses Throughout California,” 15 July 2019, accessed at https://www.energy.ca.gov/news/2019-07/energy-

commission-awards-nearly-70-million-replace-polluting-diesel-school-buses.
127 “DEC and NYSERDA announce $24M in Volkswagen Settlement Funds to support electric transit buses in environmental justice

communities,” GreenCarCongress.com, 21 March 2020, accessed at https://www.greencarcongress.com/2020/03/20200321-

nyserda.html.
128 Dominion Energy, “Dominion Energy Moves Forward with Electric School Bus Program,” 16 January 2020, accessed at

https://news.dominionenergy.com/2020-01-16-Dominion-Energy-Moves-Forward-with-Electric-School-Bus-Program.
129 Motiv, “Aramark hits 275,000 EV Miles!” 11 June 2020, accessed at https://www.motivps.com/aramark-hits-275000-ev-miles/.

90
to other fleets in mid-2020, putting six more • Tesla indicates that Class 8 trucking fleets
eCascadias and two eM2s into rotational have placed more than 2,000 orders for its
service with at least 14 different fleets around Semi model. 131
the U.S.

The majority of responding fleets (69 percent) plan to pilot or purchase BEVs in the
next 24 months including 22 percent that have not yet used BEVs

Major U.S. fleets are now making significant
commitments to—and capital investments
in—BEV deployments. Prominent examples
include the following:
• Amazon has invested in startup Rivian and
placed an unprecedented order of
100,000 electric delivery vans to be
delivered through 2030.
• FedEx is currently installing charging
equipment for and taking delivery of a
1,000-unit BEV order from Chanje. 130
• More than 500 battery electric transit
buses are on order or expected to be by
the end of 2020 in California alone. 132
• By 2021, more than 60 Class 8 BEV tractors
from Daimler, Volvo, Peterbilt, and BYD will
be demonstrated in California fleet
applications.
While some of these orders are non-binding,
they are useful benchmarks of the industry’s
appetite to test and purchase new zero-
emission truck technology. These orders also
appear to signal a growing interest by fleets

Figure 15: Approach to using BEVs among surveyed fleets. Source: GNA fleet survey.

130 FedEx, “FedEx and Chanje to Develop Groundbreaking Charging Infrastructure,” 27 February 2020, accessed at

https://newsroom.fedex.com/newsroom/fedex-and-chanje-to-develop-groundbreaking-charging-infrastructure/.
131 O’Dell, John, “Here’s Everything We Know About the Tesla Semi,” Trucks.com, 5 September 2019, accessed at

https://www.trucks.com/2019/09/05/everything-we-know-about-the-tesla-semi-truck/.
132 California Air Resources Board, “Program Update on Innovative Clean Transit Regulation and Zero-Emission Bus Deployment,”

13 May 2020, accessed at

https://calact.org/assets/ICT%20update%20for%20CalACT%20ACT%20Weekly%20Transit%20Talks%2005132020.pdf.

91
 Figure 16: Approach to infrastructure for BEVs among surveyed fleets. Source: GNA fleet survey.

to order BEVs from OEMs that offer complete
BEV platforms, rather than upfitters.
Fleet Insights: Fuel and Maintenance
Savings are Achievable, but Vehicle
Costs and Performance Need Work
Of the fleets surveyed for this report, 54
percent have piloted or purchased BEVs and
of those, 87 percent plan to continue piloting
or purchasing this technology in the next 24
months. 133 Additional findings about the
surveyed early-adopter fleets include the
following:
• More than half (58 percent) are public
fleets.
• Private fleets are also strong adopters;
approximately two-thirds of those
surveyed are already operating BEVs.
• Heavy-duty long-haul fleets have been
slower to adopt BEVs with less than 20
percent having piloted or purchased
BEVs.
The majority of responding fleets (69 percent)
plan to pilot or purchase BEVs in the next 24
months including 22 percent that have not
yet used BEVs (Figure 15). 134
In terms of infrastructure, 94 percent of these
fleets plan to install their own charging
infrastructure onsite, with one-third planning
to add on-site power generation or energy
storage technologies (Figure 16).
Surveyed fleets consistently cite reduced
maintenance costs and high driver
satisfaction as important benefits that BEVs
provide. The leading concerns they describe

133 All fleet types included in this report have piloted or purchased BEVs including Heavy duty - Long haul, Heavy duty - Short haul,

Mixed Heavy duty - Long/Short haul, Refuse, Transit, School bus, Municipal/Shuttle, Urban Delivery, Utility
134 Only 2 percent of fleets surveyed who have piloted or purchased BEVs do not plan to do so in the next 24 months.

92
are infrastructure issues (high cost, limited
availability) and limited range (range
anxiety). Fleets that operate models from
upfitters and nontraditional OEMs also cite
concerns about access to service and
support. Most fleets point to high vehicle
capital costs as a key upfront barrier to
purchasing their first BEVs, and/or expanding
their BEV fleet, despite the achievable
operational cost savings. These and other
responses are summarized in Table 7.
To enable broader adoption of BEVs, fleets
highlighted several improvements they
would like to see, including:
• Lower battery costs and improved
capacity to reduce range anxiety: Fleets
overwhelmingly want improved range
and reduced cost. “The cost of a BEV
Table 7: Summary of key insights on electricity and BEVs from fleet interviews
Summary of Fleet Experiences
with BEVs
• Fuel cost savings
• Reduced maintenance
• Torque/acceleration
Benefits
• Zero emissions
• Quiet operation
• Cleaner working environment
• No odor
• Driver satisfaction
• Extremely limited public
infrastructure
Challenges
• Higher vehicle capital cost
• Reduced range
• Slow refueling time
• Service and support limitations
• Reduced payload
Note: All fleet types included in this report are represented above. Vehicle counts indicate the number of BEVs
operated by the fleet.
[school] bus is around $330K, quite a bit
more than diesel. Even with [incentive]
funding, it is still high,” one school district
reported. Battery capacity and cost is the
lynchpin to achieving the range and price
point for BEVs to become a viable
technology for fleets at scale.
• Charging standardization and lower
infrastructure and electricity costs: Fleets
indicated a strong desire for higher
charging power (which facilitates faster
charging times), standardized charging
infrastructure, predictable and low
electricity costs, and improved storage
options. “Our priority is more infrastructure,
figuring out how the utility will get
electricity to the structure at a decent
rate, and alternatives such as solar and
Examples of Fleet Commentary
“We have fewer breakdowns, and our drivers like them –
they’ve mostly gotten over range anxiety by strategic
advanced planning.” – Urban Delivery (>1,000 trucks globally,
including outside of U.S.)
“In the applications where you are doing no highway runs,
the benefits come in brake-wear and breakdowns. Diesels
don’t like stop-and-go idling, which increases their
maintenance costs. BEVs like stop and go traffic, and
regenerative braking spares your brakes.” – Heavy-duty short
/ long haul (30 trucks)
“Infrastructure is a massive question for us, since our utility shut
down the grid for several weeks [during 2019 wildfires in CA].
That added complexity to deployment.” – Heavy-duty short /
long haul (6 trucks)
“Many [vendors] are upfitters and body builders and lack the
experience to make sure that everything works well together.
Communicating between salespeople and engineers on
new technology and across multiple components providers
including the electrical infrastructure, leaves a lot of
uncertainty.” – Utility (3 trucks)
93
 storage,” stated one heavy-duty charging operations for fleets. “Our fleet
short/long haul fleet. uses at-home, office, and public charging.
• Improved charging solutions to manage Software needs some improvement to
electricity costs and to support fleet make it easier to capture fleet costs across
operations: In addition to expanded all these sources,” a utility fleet asserted.
charging infrastructure, several fleets say
that new solutions are needed to manage

Renewable Forms of Electricity: Provides

40 Percent GHG Reduction (and
Improving)

While BEVs have zero tailpipe emissions, the
production of electricity to charge BEVs can
generate emissions. The magnitude depends
on the specific processes and fuels used.
Conventional fuel sources for electricity can
have a high carbon intensity, and the amount
of ultra-low-carbon fuel sources used by local
utilities varies widely by region. The result is
that GHG emissions associated with charging
BEVs from the electric grid are 40 percent
lower on average than the full life-cycle GHG
emissions associated with operating diesel
and gasoline vehicles (Figure 17).
While the grid’s renewable electricity content
varies by region, the U.S. power sector, as a
whole, is increasingly moving to cleaner
power. In 2020, wind and solar technologies
make up 76 percent of the power production
capacity being added to the electrical grid,

Figure 17: GHG Emissions profiles for six fleet types illustrate a consistent 40%-43% emissions reduction on a life-
cycle basis by using BEV technology, based on the average US electric grid mix. Source: U.S. Department of
Energy, Argonne National Laboratory, AFLEET Online Tool (2018).

94
with the remainder sourced primarily from
natural gas. These resources will mostly
replace coal-fired power plants and some
natural gas plants that are scheduled for
retirement, resulting in an overall increase in
renewable electricity. 135 In some states,
including New York, Nevada, Wisconsin, and
New Jersey, specific renewable electricity
targets are driving an accelerated transition
over the next 20-30 years.
Fleets seeking 100 percent renewable
electricity to recharge their BEVs can adopt
additional technologies like on-site solar
generation or buy power from local clean
energy providers such as community choice
aggregators (CCAs).
135 U.S. Energy Information Administration, “New electric generating capacity in 2020 will come primarily from wind and solar,”
January 2020, https://www.eia.gov/todayinenergy/detail.php?id=42495.
95
Coupling renewable electricity generation
with on-site storage enables fleets to capture
energy generated during peak production
hours (such as when the sun is shining) and
store it for charging BEVs at a later,
appropriate time. Finally, fleets can also
purchase renewable energy credits to
“offset” their use of non-renewable electricity.
Due to the relatively nascent market for local
renewable energy production for
transportation applications, fleet use of the
various solutions described above is limited,
and this study did not capture findings from
fleets with currently deployed renewable
energy projects. Several projects, however,
are underway in 2020 and beyond (Figure 16).
4.2 BATTERY ELECTRIC VEHICLES AS A SUSTAINABLE FLEET TECHNOLOGY
Fuel (Electricity) Price and Cost: Low-Cost
Potential with the Right Geography and
Management
In general, using electricity to charge BEVs
can be relatively inexpensive for fleets, if
managed properly. But the price fleets pay
for electricity can vary widely across the U.S.—
and even within a fleet’s regional network.
Figure 18 compares the average cost of
electricity when used in three key
applications: residential, commercial, and
transportation (for local, regional, and
metropolitan transportation systems) in five
states. As shown, the price for local, regional,
and metropolitan fleets who pay the
transportation rate is generally the lowest of
the three, although there is variation among
the states shown. 136 Most fleets are likely
paying the commercial rate except where
utilities offer an EV- or fleet- specific rate.
Even so, the variety of utility fee structures,
fleet use cases, and unique aspects of
electricity as a vehicle energy source make
broad national comparisons of little practical
value. To obtain accurate and useful price
comparisons, fleets must perform a case-by-
case analysis. To perform a fleet-specific
assessment about relative costs to charge
BEVs versus purchases of gasoline or diesel, it
is useful for fleets to understand relative rates
of energy consumption (fuel economy) as
well as opportunities for route optimization

Figure 18: Average electricity prices across major consuming sectors - national, and the top five states in terms
of number of EV Charging Stations. Source: U.S. Energy Information Administration, Electricity Data Browser,
“Average Retail Price of Electricity,” 28 May 2020.

136 The following states do not report transportation sector electricity prices: AK, AL, DE, HI, ID, IO, KS, KY, ME, MS, MT, NM, ND, NE,

NH, NM OK, SC, SD, TN, WV, WY

96
 Figure 19: Relative energy consumption rates for vehicle types (kWh/mile). Note: kWh/mile (energy consumed
per distance traveled) is the inverse of the “MPG” (distance traveled per energy consumed) used for gasoline
and diesel vehicles. In Figure 15, relative energy consumption per mile increases (worsens) from left to right. As
shown, the largest and heaviest fleet vehicles (at the far right) consume the most energy per mile, as expected.

and regenerative braking that partially
charges vehicle batteries from energy
released during braking. Figure 19 provides a
high-level guide to energy consumption rates
for BEVs of various types and sizes. 137 This is
measured on a kWh/mile basis.
Table 8 highlights several scenarios under
which costs to fleets for using BEVs may be
higher or lower than using comparable diesel
or gasoline vehicles.
It can be difficult for fleets to understand and
simplify complex, fleet-specific BEV charging
needs and the associated cost uncertainties.
This has helped build a new industry where
companies offer BEV fleets “charging-as-as-
service” to arrange and manage all charging
equipment, services, and costs.

Zero-emission transit bus deployments are occurring across the country with several of
the largest transit fleets in the U.S. already setting timetables for full transitions to battery
electric buses. | Courtesy: RIPTA

137 Gladstein, Neandross and Associates, “Electric Vehicle Changing Guidebook for Medium- and Heavy-Duty Commercial

Fleets,” September 2019, accessed at https://www.gladstein.org/gna_whitepapers/electric-vehicle-charging-guidebook-for-

medium-and-heavy-duty-commercial-fleets/.

97
 Table 8: Summary of factors that add or save cost from charging for fleets

Factors that Can Add Cost to Charging Factors that Can Save Cost from Charging

Charging during off-peak use periods: Fleets that

Charging during peak use periods: Periods of higher
can do most of their charging at the lowest cost
rates set by utilities based on time of day, week,
times, especially nighttime charging, can minimize
and season.
the cost of charging.

Demand spikes in charging: Utilities may assess

Charging below demand thresholds: Fleets that
special “demand charges” based on the peak
understand and manage demand spikes will
power demand of the customer, even for brief
reduce charging costs.
periods.

Facility located in a utility service area without an Facility located in a utility service area with an EV
EV rate: Overall costs are typically higher in utility rate: Charging rates are on average lower for fleets
service areas without a dedicated rate. Many using an EV rate in utility service areas where they
utilities do not yet offer EV-specific rate options. are offered.

Facility served by a utility without an EV rate

Facility served by a utility with an EV rate specific to
specific to fleets: Where utilities do offer EV specific
fleets: Facilities located in a utility service area that
rates, the rates may be designed primarily for
offers a rate designed for fleet needs can often
residential customers and lack features that would
capture savings compared to other types of rates.
better serve fleet customers.

Negotiating with energy providers: Fleets that

negotiate for favorable energy supply prices, often
as part of an electricity offtake or agreement to
install infrastructure, may secure favorable rates.

Fueling (Charging) Infrastructure: Public
Fast Fleet Charging Very Limited, but
Fleet Charging Investments Are
Underway
As noted, the lack of a public BEV fueling
(charging) network designed for fleets is one
of the biggest obstacles to widescale
adoption in fleet applications. The majority of
public charging equipment deployed today
is designed to a lower power rating that
supports light-duty passenger BEVs, and only
a fraction of the existing public infrastructure
supports DC fast charging (DCFC) with rates
of 50 kW or higher (Figure 20). There has been
significant growth in EV station openings the
past decade in the U.S. and today the
national population exceeds 26,000 stations
(>78,000 charging ports). 138,139 While this
network establishes a foundation for BEV
commercialization generally, most of these
stations generally do not meet the high-
power and large spatial requirements of
medium- and heavy- duty fleets.
Many fleets unable to solely use private,
onsite chargers need access to public DCFC
stations. In addition to power and spatial
restrictions, a lack of connection standards
restricts access even further. More than half of
all DCFC plugs at these stations are on the
Tesla network and can only charge vehicles

138 U.S. Department of Energy, Alternative Fuels Data Center, “Alternative Fueling Station Locator,” accessed November 2019,
https://afdc.energy.gov/stations/#/find/nearest.
139 GNA analysis of U.S. Department of Energy, Alternative Fuels Data Center, “Alternative Fueling Station Locator,” accessed

November 2019, https://afdc.energy.gov/stations/#/find/nearest.

98
 Figure 20: U.S. public EV charging stations by charging type. Source: U.S. Department of Energy, Alternative Fuels
Station Locator, accessed 19 December 2019, https://afdc.energy.gov/stations/#/find/nearest.

on that proprietary charging standard. 140
These constraints are a significant barrier to
BEV adoption for fleets that rely on public
fueling stations. Given the gap in public
charging for fleets, more than 90 percent of
fleets who responded to the survey are
pursuing private charging investments (Figure
16).
To help address the infrastructure gap for
fleets, significant investments have been
proposed by utilities throughout the nation—
with over $1 billion committed to support EV
infrastructure for fleets. California’s three
major utilities have committed $750 million to
expand EV infrastructure in support of
commercial fleets. 141 Utilities in 18 states have
made funding available in 2020, compared
to 13 in 2019. An estimated $373 million is
available in 11 of these 18 states, representing
an 81.2 percent increase in funding from 2019.
While most of that growth is in California, utility
funding outside of California grew 21.8
percent from 2019 to 2020. 142 For example,
Exelon’s utilities plan to provide make-ready
infrastructure, financial incentives, or owner-
operator services on charging equipment for
over 1,850 EVSEs across Maryland,
Washington, DC, and Delaware, for a mix of
Level 2 and DC Fast Chargers.
At the same time, vehicle OEMs are investing
in charging stations to stimulate demand for

140 GNA analysis of U.S. Department of Energy, Alternative Fuels Data Center fueling station data. While adapters exist to enable

charging non-Tesla vehicles, Tesla prioritizes access for owners of its vehicles.
141 Merchant, Emma Foehringer, “California Regulators Approve Landmark Utility EV-Charging Proposals,” GreentechMedia.com,

31 May 2018, https://www.greentechmedia.com/articles/read/california-cpuc-approves-landmark-ev-charging-proposals.

142 GNA analysis of non-residential charging infrastructure funding in the United States in 2019 and 2020. Calculations

disaggregated commercial charging funding from residential- and vehicle- targeted funding where possible, and use a flat-line
approach to define annual funding amounts from multi-year programs. Growth in utility funding amounts is based on those
programs for which total program dollar values are available - in 2019, these values were available from programs in 8 of the 13
states with utility programs.

99
 California’s three major utilities have committed $750 million to expand EV
infrastructure that supports medium- and heavy-duty vehicle fleets.
their BEV products. Ford and GM have all
announced plans to develop national
charging networks. Some manufacturers that
have relied on proprietary charging
interfaces are now expanding product
offerings for broader compatibility.
Finally, industry leaders such as Penske,
Daimler, Toyota, and Volvo are working
through two distinct associations to develop
standards for DCFC and high-powered
charging for commercial vehicles (HPCCV)
that could offer charge rates over 1MW. 143
These collaborations and investments to scale
fueling infrastructure are necessary to support
widespread medium- and heavy-duty fleet
adoption of BEVs.
Vehicle Model Availability: More than 90
Models, Most Are Early Commercial
Products with High Price Tags
BEVs offer an inherently simpler, more efficient
technology than ICE vehicles. They utilize
battery packs and electric drive systems that
consist of far fewer moving parts compared
to gasoline or diesel engines and
conventional transmission systems. Batteries
and an electric drive enable the use of
regenerative braking, which slows a BEV as it
decelerates while capturing part of the
kinetic energy and feeding it back into the
battery pack. This increases vehicle range
and efficiency, while saving on brake wear
and maintenance. While medium- and
heavy-duty BEV technology is still early in
commercial development, high expectations
143“CharIN is publishing a solution for high power charging of trucks and busses beyond 1 MW,” Charinev.org, 25 February 2019,
https://www.charinev.org/news/news-detail-2018/news/charin-is-publishing-a-solution-for-high-power-charging-of-tucks-and-
busses-beyond-1-mw/.
100
exist that BEVs will provide key benefits in a
wide array of applications that are
dominated today by ICE vehicles. These
benefits include:
• TCO savings from offsetting higher
capital costs with lower operational
costs, which may be obtained through
reduced energy costs and higher
vehicle efficiency.
• Compliance with regulatory and/or
internal fleet sustainability
requirements to partially or fully
transition to vehicles with zero direct
emissions.
• Access to the highest-available
government incentive funds, which
reduce capital costs and further
improve TCO.
With his 2019 announcement, “the future is
electric,” Roger Nielsen, President and CEO of
Daimler Trucks North America, committed his
company to leading the BEV transition. This
claim from a global OEM reflects a big
departure from much of the past decade
during which the industry has primarily
featured nontraditional OEMs, upfitters and
converters, often supported by grant funding.
Continuous innovation and fleet
demonstrations have allowed this market to
mature rapidly to an early commercial state.
OEM supply chain investments indicate the
strength of their commitments. Daimler has
purchased 20 billion euros’ worth of battery
cells as part of its 10-year commercialization
strategy; 144 Ford announced a $900 million
investment in EV production; 145 and Volvo is
investing $400 million in the manufacturing
facility that will produce its electric Class 8
truck for the U.S. market. 146 The depth of
production capacities, service networks, and
supplier relationships that these
manufacturers bring to the market is
expected to significantly increase the
quantity and quality of commercial models.
Today, more than 21 manufacturers offer over
90 medium- and heavy- duty BEVs (Figure 21),
and at least a dozen more are expected to
enter production by 2022, primarily (but not
exclusively) in the heavy-duty segment (see
“Looking Forward”). Although these
developments are exciting, BEV capital costs
remain 3 to 5 times higher than their diesel
and gasoline counterparts.

Daimler Trucks North America President and CEO Roger Nielsen, ACT Expo, 2019 | Courtesy: ACT Expo

144 “Daimler buys battery cells in a total volume of 20 billion euros,” Daimler.com, accessed at

https://www.daimler.com/innovation/case/electric/battery-cells.html.
145 Naughton, Keith, “Ford Invests $900 Million to Build Electric Vehicles in Michigan,” Bloomberg.com, 20 March 2019, accessed at

https://www.bloomberg.com/news/articles/2019-03-20/ford-invests-900-million-to-build-electric-vehicles-in-michigan.
146 Hirsch, Jerry, “Volvo Launches Electric Heavy-Duty Truck Program in California,” Trucks.com, 11 February 2020, accessed at

https://www.trucks.com/2020/02/11/volvo-launches-electric-heavy-duty-truck-program/.

101
Figure 21: Medium- and heavy-duty battery electric vehicles available today by body type and
manufacturer. Vehicles in distinct weight classes are counted as unique models. Source: GNA.

102
4.3 LOOKING FORWARD
results of early demonstration projects by
BEVs are still in early commercial
major OEMs including Daimler, Volvo,
development as a clean vehicle solution for
Kenworth/Toyota, Peterbilt, Mack, and BYD.
most fleets in the U.S. However, product
The chart below lists the make and
maturity and availability is improving rapidly,
announced delivery year for new vehicles
and BEV market shares are expected to grow
(Figure 22).
significantly across many on-road fleet
applications with on-road deployments
Battery Technology Development Curve
estimated to roughly double through 2022. 147
For the technology to be successful at scale, Batteries are the largest single component
it must overcome several challenges. cost of a BEV. The cost of a Class 8 truck’s
Notably, vehicle volumes must rise while costs battery pack alone can exceed the cost of
fall, largely driven by improvements in battery the chassis. 148 Compared to conventional
technology, to reach more favorable TCOs. fuels and their storage tanks, battery packs
Furthermore, industry stakeholders will need to are relatively low in energy per weight and
define a common charging standard, and volume. These attributes limit the range of
invest in public charging station BEVs and compromise payload capacity.
development, to meet on-route commercial OEMs are aiming for a 50 percent reduction in
fleet fueling requirements. One other factor battery costs and volumes, with a doubling of
worth watching is regulatory activity across energy density to enable BEVs to scale.
the country, and in California specifically, in
support of this emerging industry. Key trends
that will have bearing on growth of the BEV
industry for fleets are summarized below.

Upcoming Vehicle Products (2020 – 2022)

The next few years will see a surge of new BEV

models across all weight classes and vehicle
types. New product delivery timelines are
always fluid but they will set the pace of
market development, which provides a key
indicator of how quickly technology and cost
breakthroughs can be achieved. The Tesla
Semi is already two years behind schedule, Freightliner eCascadia day cab heavy-duty Class 8
but if the company can provide the delivered tractor and eM2 106 medium-duty Class 6/7 pick-up &
cost, performance, and aftermarket support delivery truck | Courtesy: Daimler Trucks North America
it promises, that would be a game changer
for the industry. Fleets should also watch the

147 GNA analysis of timetables for purchases by U.S. transit agencies and school districts, incentive funding for these applications

committed by government agencies and utilities, and an estimate of annual deliveries for committed and non-binding pre-orders.
148 California Air Resources Board, ”Appendix H: Draft Advanced Clean Trucks Total Cost of Ownership Discussion Document,”

Figure 4, 22 February 2019, accessed at https://ww3.arb.ca.gov/regact/2019/act2019/apph.pdf.

103
Figure 22: Medium- and heavy- duty BEVs entering low volume or higher commercial production in the next
three years, per OEM announcements. Vehicles in distinct weight classes are counted as unique models.
Source: GNA.

104
The future success of BEVs for medium- and
heavy- duty fleets depends on the ability of
battery makers to significantly improve the
cost, weight, and size of battery technology.
As demand has increased, battery costs have
already been falling for several years,
introducing economies of scale. In the last
few years, battery, vehicle, and component
manufacturers have combined resources
under numerous partnerships to improve the
cost, energy density, and size of vehicle
batteries, including application of new
chemistries, configurations, and production
processes.
This year, GM announced its plan to achieve
the industry’s widely accepted target price of
$100/kWh through its collaboration with
battery manufacturer LG Chem. While
investment grows, the timeframe to achieve
critical breakthroughs are unknown. The
extent to which these investments deliver
results, and the time it takes, will be an
important factor in fleets’ BEV adoption rates,
particularly in the heavy-duty trucking
segment.
Standardization and Buildout of Charging
Infrastructure
The buildout of infrastructure will be an
important factor for fleets to watch. Utility
commitments to develop both sufficient
electrical capacity and EV-supportive rate
structures are important growth signals for
fleets to monitor in their areas of operation.
Several recent partnerships between OEMs
and charging providers, as well as legislative
actions, are promising signs that the
necessary capital and political will to achieve
charging at scale are available. A few
examples include:
• Penske, Daimler, Tesla, Electrify America,
and many other stakeholders are
collaborating through CharIN, an industry
association, to promote CCS as the
industry standard and are just now
finalizing a new standard for chargers that
offer power above 1MW.
• Daimler is conducting its own charging
infrastructure R&D in Japan and Germany,
and just launched a global initiative
through its E-Mobility Group. 149
• Ford is launching its own charging
network, targeting 12,000 chargers
nationwide with partners including
Greenlots. This targets passenger car
customers but could support medium-
duty vehicles in certain conditions. 150
• California’s LCFS, which provides high-
value credits from electricity used to
charge BEVs, recently added a provision
allowing DCFC stations to generate
credits based on their rated capacity. 151
• The U.S. House of Representatives has
proposed that the DOT and DOE develop
a high-speed charging network over the
next five years.
Historically, the variety of charging standards
has been a barrier to widespread buildout.
Today there are two dominant charging
interfaces for fleets (CHAdeMo and CCS) and
several proprietary interfaces. Fortunately, the

149 “Daimler Trucks Launches Global Electric-Truck Charging Initiative,” HDT, 18 February 2020, accessed at
https://www.truckinginfo.com/351286/daimler-trucks-launches-global-electric-truck-charging-initiative.
150 Valdes-Dapena, Peter, “Ford announces launch of largest electric vehicle charging network in the US,” CNN Business, 17

October 2019, accessed at https://www.cnn.com/2019/10/17/cars/ford-electric-vehicle-charging-network/index.html.

151 California Air Resources Board, “LCFS ZEV Infrastructure Crediting,” accessed at

https://ww2.arb.ca.gov/resources/documents/lcfs-zev-infrastructure-crediting.

105
industry appears to be evolving away from
proprietary interfaces and organizing around
CCS as the de facto North American
standard for medium- and heavy-duty
charging. However, variations within CCS for
charging voltages, power levels, and plug
types create challenges for fleets seeking
universally applicable charging solutions,
particularly as BEV demands on the charging
infrastructure evolve. This is an existing
challenge that stakeholders stress will need
resolution before any large-scale roll out of
heavy-duty BEVs is likely to occur. 152
Zero-Emission Government Action
In 1990, California adopted the world’s first
“technology-forcing” regulation for electric
vehicles. Effectively, this required light-duty
OEMs to introduce small percentages of BEV
models into their California auto lineups. The
state’s Zero-Emission Vehicle (ZEV) or “ZEV
mandate” was adopted along with
California’s emissions standards by 11 other
states (known as the ZEV States)—
representing around 30 percent of national
car (light-duty) sales.
Two decades later, a similar effort is underway
to commercialize medium- and heavy- duty
vehicles powered by battery electric and fuel
cell electric vehicles (FCEVs). As more models
become available for fleets to pilot or
purchase, California's regulatory agencies
are pursuing policies and programs that
encourage the transportation sector to
152 Peer review input of the “San Pedro Bay Ports Clean Air Action Plan 2018 Feasibility Assessment for Drayage Trucks” to GNA by
National Renewable Energy Laboratory, November 2018. Input was specific to EV infrastructure for heavy-duty fleets in ports but
remains relevant for other fleet types.
153 California Air Resources Board, “Advanced Clean Trucks Fact Sheet,” July 2019, accessed at
https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet.
106
develop and deploy these zero-emission
vehicles. Emerging regulations target
manufacturer product development and
sales goals, while grant funding enables fleet
demonstrations and commercial
deployments. Whether other states adopt
similar strategies, as they did with the light-
duty sector, is an important trend to watch.
Key examples of adopted or emerging
policies in California include:
• In 2018, CARB adopted the Innovative
Clean Transit (ICT) regulation. This requires
transit agencies to purchase only zero-
emission buses when replacing in-use
buses, starting in 2029. CARB’s goal is a full
transition to zero-emission bus fleets by
2040.
• In 2020, CARB adopted the Advanced
Clean Trucks (ACT) regulation as part of
California’s strategy to accelerate a
large-scale transition of commercial
medium- and heavy-duty vehicles to
zero-emission technology, from Class 2B
up to Class 8. The newly adopted ACT
regulation requires truck OEMs to sell
increasing percentages of zero-emission
models starting in 2024. It also includes
provisions for larger trucking fleets (50 or
more units) to report key data points of
their operations. 153
• Increasingly, funds for incentive programs
in California—and in some cases, other
parts of the nation—are focused on ZEVs.
Industry Perspective by Edison Electric Institute (EEI)

Interest in BEVs continues to accelerate, and the potential for electric transportation extends far
beyond the light-duty passenger car market. As cities and communities seek sustainable
mobility solutions, fleet operators and policymakers increasingly view fleet electrification as a
critical component, thanks to improvements in battery technology, decreases in its TCO, and
an increasingly clean energy grid.

Electric fleet vehicles are becoming more affordable and available

The cost and performance

of battery technology
continues to improve.
Bloomberg New Energy
Finance reports that battery
costs have declined more
than 80 percent since
2010. 154 The
commercialization of
medium- and heavy-duty
BEVs will benefit from the
ongoing major investments
in technology, large-scale
manufacturing, and
charging infrastructure in the
light-duty sector.
A fleet of electric Freightliner eCascadias from Daimler Trucks North America. NFI
is a member of the Freightliner Electric Vehicle Council.
More affordable technology
means that the TCO for electric fleet vehicles will continue to improve. A report commissioned
by the California Electric Transportation Coalition (CalETC) and the Natural Resources Defense
Council (NRDC) considered BEVs in a variety of vehicle segments from Class 2b delivery vans
through Class 8 tractors. The report found that, while purchase incentives are needed today to
make BEVs competitive with diesel, commercial fleet BEVs will be the most affordable option on
a TCO basis in the 2030 timeframe even without large purchase incentives. 155

Fleet operators can expect to see more BEV options coming to market. As upstart BEV
manufacturers secure orders from fleet operators, traditional manufacturers will look to
accelerate BEV commercialization and will offer a range of vehicles to remain competitive. As

154 Bloomberg New Energy Finance, https://about.bnef.com/blog/battery-pack-prices-fall-as-market-ramps-up-with-market-

average-at-156-kwh-in-2019/
155 CalETC, https://caletc.com/comparison-of-medium-and-heavy-duty-technologies-in-california/

107
a result, fleet operators will be able to procure more BEV models in more vehicle segments from
more manufacturers, driving down overall costs.

Electric fleet vehicles are an important tool to meet sustainability objectives

Increasingly, both commercial and public enterprises are looking throughout their supply chain
and fleet operations to reduce emissions through electrification. This is due, in part, to the carbon
dioxide (CO2) emissions reductions achieved by the electric power sector. Overall, emissions
from the sector are at their lowest level since 1987 and are down by a third (32.9 percent to be
exact) compared to 15 years ago. Among the Edison Electric Institute’s (EEI) member
companies—the nation’s investor-owned electric companies—emissions have been reduced
even more and were 45 percent below 2005 levels as of year-end 2019. Electric power sector
carbon emissions are now 15 percent below transportation sector emissions. 156

The environmental benefits of electric transportation and fleet electrification are well known
and will only increase as electricity generation continues to get cleaner. Collectively, EEI’s
member companies are committed to getting the energy they provide as clean as they can
and as fast as they can without compromising reliability or affordability, and they are on a path
to reduce carbon emissions at least 80 percent by 2050, compared with 2005 levels. In addition
to the carbon benefits, BEVs also reduce emissions that contribute to poor air quality.

Electric companies are partnering with fleet operators

Electric companies are critical partners for any fleet operator that is preparing to electrify its
vehicles.
• In 2019, EEI published a guide to working with electric companies, Preparing to Plug In
Your Fleet. 157 The key recommendation: work closely with your electric company to help
evaluate the electric service needed at your facility to charge the BEVs; to determine
the electric rate, or rates, to help maximize fuel cost savings; and to plan for scaling up
the fleet.
• Electric companies are helping fleets accelerate BEV adoption. More than 30 of EEI’s
member companies in 18 states have approved or are developing programs that are
geared toward fleet customers, including programs to install or reduce the cost of BEV
charging infrastructure at fleet facilities, BEV-specific rates, or education and other
advisory services. More of these programs are expected in the future.
• Nine electric companies in California, Oregon, and Washington recently outlined a plan
for the charging infrastructure needed to electrify freight movement along the I-5
corridor, demonstrating how electric companies can lay the groundwork for the
charging infrastructure needed to electrify fleets beyond short-route, return-to-base
operations. 158

156 Institute for Electric Innovation, https://www.edisonfoundation.net/en/-/media/Files/IEI/publications/IEI_Clean-Energy-Top-

10_April-2020
157 EEI, https://www.eei.org/issuesandpolicy/electrictransportation/Documents/PreparingToPlugInYourFleet_FINAL_2019.pdf
158 https://www.westcoastcleantransit.com/

108
The pathway is clear—corporations and municipalities increasingly are looking to fleet
electrification to meet their sustainability goals. In addition, the TCO of electric fleet vehicles
continues to decline. The question isn’t if—but when—electrification makes sense for your fleet.
Electric companies stand ready to partner with fleet operators and other stakeholders to ensure
a successful transition.

The Edison Electric Institute (EEI) is the association that represents all U.S. investor-owned electric
companies. Our members provide electricity for more than 220 million Americans, and operate
in all 50 states and the District of Columbia. As a whole, the electric power industry supports
more than 7 million jobs in communities across the United States.

109
Hydrogen Fuel Cell Electric
Vehicles:
Major Investments by OEMs
and Infrastructure Providers
to Create Future
Breakthroughs

110
Chapter Contents
5. SNAPSHOT OF HYDROGEN FUEL CELL VEHICLES IN FLEET APPLICATIONS ............................... 113
Fleets Find Advantages in FCEV Range & Fueling Time .......................................................... 113
Early Medium- and Heavy-Duty FCEV Demonstrations .......................................................... 114
High Capital & Fuel Costs with Limited Fueling Infrastructure ................................................ 114
Increasing Interest in Production of Renewable Hydrogen.................................................... 115
More Investment & Time Needed to See Full Potential........................................................... 116
5.1 FLEET ADOPTION AND INSIGHTS ............................................................................................... 117
Adoption of Hydrogen Fuel Cell Electric Vehicles 2015-2019: Commercial Interest is
Expanding Beyond Transit to Other Fleet Types ....................................................................... 117
Fleet Insights on Fuel Cell Electric Vehicles: Acceleration & Fueling Time Are Positive, But
More Work Needed on Performance & Fuel Cost .................................................................. 119
Renewable Hydrogen: Provides a Third of California Fuel, Incentives Are Encouraging
Growth .......................................................................................................................................... 121
5.2 HYDROGEN FUEL CELL ELECTRIC VEHICLES AS A SUSTAINABLE FLEET TECHNOLOGY ........... 123
Fuel Price and Cost: Steep Reductions Needed, Investments Underway ............................ 123
Fuel Availability and Infrastructure: Fast Fill but Expensive with Expanding Public
Infrastructure ................................................................................................................................ 124
Vehicle Model Availability by Sector and Application: Two Transit Vehicles Available
Today, Several More Medium- & Heavy-Duty Models on the Horizon .................................. 127
5.3 LOOKING FORWARD..................................................................................................................128
Industry Perspective by California Hydrogen Business Council (CHBC) .................................. 134

111
 FLEET TYPES LEADING ADOPTION

BENEFITS
Demonstrations and early-commercial FCEV products may offer fleets another zero-emission pathway and
the range and fueling times that fleets expect from gasoline and diesel vehicles.

CHALLENGES
As the most nascent technology, significant cost, vehicle availability, and infrastructure challenges remain
to be resolved before the technology is mature.

Fleet types leading adoption. Source: IHS Markit, Propane Education & Research Council, Center for Transportation and Environment, National Transit
Database, California HVIP, GNA Surveys
112
Benefits/Challenges: Although generally applicable to fleet types leading adoption, benefits and challenges may not apply to all fleet types or
geographies. Source: GNA surveys and interviews.
 5. SNAPSHOT OF HYDROGEN FUEL CELL VEHICLES IN FLEET APPLICATIONS
Bold announcements and projects were put
forward in 2019 for fuel cell electric vehicles
(FCEVs), providing another option that
complements battery electric vehicles for
fleets to achieve zero-emissions in their
operation. FCEVs are of interest to fleets as
they provide fleets with the transformational
ability to transport goods and people without
tailpipe emissions while offering excellent
acceleration and efficiency, extended
driving range, and fueling times that can be
comparable to gasoline and diesel fleet
vehicles. However, FCEVs are behind battery
electric vehicles in terms of commercial and
technological maturity for fleets, largely due
to the incremental costs and logistics of using
hydrogen as a transportation fuel.
Fuel cells like these that are manufactured by Plug Power are used
in tens of thousands of material handling vehicles today. |
Courtesy: Plug Power
113
For mainstream fleet applications, OEMs are
now making important advancements in
medium- and heavy-duty FCEVs. Efforts to
develop, demonstrate, and eventually
commercialize fuel cell buses and trucks are
well underway. Transit agencies are
deploying limited commercial production
fuel cell buses built by long-established OEMs
New Flyer and ElDorado. Truck OEMs are not
far behind, with multiple OEMs—both
traditional and new entrants—working to
develop and demonstrate hydrogen fuel cell
models. Several prototype trucks are now in
operation, and pre- and early commercial
launches are targeted for 2020 to 2022.
Fleets Find Advantages in FCEV Range &
Fueling Time
Of the fleets surveyed for this report, 11
percent have piloted or purchased FCEVs.
Notably, all fleets that have piloted or
purchased FCEVs have also piloted or
adopted at least one other technology
featured in this report. The major advantages
fleets experience from FCEVs (as they
become available and prove suitable for
their operational needs) include the
following:
• FCEVs can help fleets comply with
government and/or sustainability
requirements to go zero-emission.
• FCEVs are fueled in a similar fashion as
internal combustion engine vehicles. Like
compressed natural gas (CNG) vehicles,
FCEVs are fueled by pumping
compressed hydrogen into on-board
tanks. Many of the largest FCEVs, such as
 fuel cell buses and short haul trucks can be
fueled in under 10 minutes.
• Heavy-duty FCEVs offer about the same
range between fueling events as
comparable diesel vehicles and have the
potential to work well even for long-haul,
over-the-road trucking.
• FCEV purchases are typically eligible for
the highest award amounts under
government clean-vehicle incentive
programs, which helps fleets offset higher
capital costs and improve total cost of
ownership (TCO).
Early Medium- and Heavy-Duty FCEV
Demonstrations
FCEVs are currently in demonstration and pre-
commercialization phases for many medium-
and heavy-duty vehicle applications. Two
transit bus OEMs, ElDorado National and New
Flyer, have become the leaders in fuel cell
bus sales for the U.S. market. Today, roughly 70
FCEV buses are in the hands of U.S. transit
agencies, most of which are located in
California.
In medium- and heavy-duty trucking
applications, several OEM efforts are also
underway to develop and demonstrate
FCEVs for goods movement applications.
With strong government support, Kenworth
and Toyota are collaborating to develop 10
Kenworth T680 Class 8 trucks powered by
Toyota’s hydrogen fuel cell electric
powertrain. Drayage and delivery fleets in
Southern California are expected to begin
demonstrating these fuel cell trucks later this
year. Hyundai is producing approximately 50
medium-duty fuel cell trucks for initial
159 California Air Resources Board, “Joint Agency Staff Report on Assembly Bill 8: 2019 Annual Assessment of Time and Cost Needed
to Attain 100 Hydrogen Refueling Stations in California,” December 2018, accessed at
https://ww2.energy.ca.gov/2019publications/CEC-600-2019-039/CEC-600-2019-039.pdf.
160 California Fuel Cell Partnership, “Cost to refill”, https://cafcp.org/content/cost-refill.
114
demonstration in Switzerland and plans to
deploy 1,600 on Swiss roads by 2025. Startup
OEM Nikola intends to begin production of its
flagship Class 8 fuel cell truck for the U.S.
market in 2023. In 2018, Anheuser-Busch
made headlines with its commitment to order
800 FCEV trucks from Nikola and then
completed its first zero-emission beer delivery
with a Nikola FCEV truck and a BYD battery
electric truck.
Of the fleets surveyed for this report that are
planning to deploy FCEVs over the next 24
months, most (70 percent) will deploy pilot
projects. This is in large part due to the current
state of vehicle technology and hydrogen
fueling infrastructure.
High Capital & Fuel Costs with Limited
Fueling Infrastructure
Although FCEV development and
deployments by OEMs are underway,
significant market and logistical challenges
remain related to hydrogen fuel. More
specifically, fleets have extremely limited
access to hydrogen, due to a very low
number of fueling stations built to date. There
are fewer than 50 public hydrogen stations
across the nation. Almost all of these are in
California and they are focused on serving
the light-duty FCEV market. Hydrogen fuel for
light-duty vehicles ranges from $12.85 to
$16.78 per kilogram (kg), with an average of
about $16.51 per kg 159 and most experts
agree prices must drop below $8.00 per kg to
be competitive with gasoline or diesel 160 (1 kg
of hydrogen contains roughly the same
energy as a gallon of gasoline). However, two
in-use studies of FCEV buses have already
seen average fuel costs by two transit
agencies of $5.27 per kg and $7.25 per kg for
private fueling with fuel economy around 6
miles per diesel-gallon-equivalent. 161,162
To address these challenges, OEMs and
infrastructure developers are investing billions
of dollars to reduce fuel prices and expand
buildouts of stations capable of fueling
heavy-duty trucks. Shell has opened five
stations as part of its goal to build the first
hydrogen refueling network in California. 163
Nikola has pledged to build 700 hydrogen
fueling stations across the U.S. by 2028. To
increase supply—particularly for the western
U.S. FCEV market—industrial hydrogen
producer Air Liquide is building a $150 million
plant to supply 40,000 vehicles in California
with liquid hydrogen. However, to fully realize
the potential of hydrogen FCEVs for fleets,
major expansion efforts are still needed for
hydrogen fueling infrastructure across the
nation.
Increasing Interest in Production of
Renewable Hydrogen
Transitioning to FCEVs offers fleet owners
reduced life-cycle greenhouse gas (GHG)
emissions, at least 15 percent compared to
diesel and nearly 30 percent compared to
gasoline. 164 Furthermore, FCEVs produce zero
tailpipe emissions, however the production
process for the majority of hydrogen used in
transportation today produces emissions.
Production of renewable hydrogen with zero
or near-life-cycle GHG emission is possible
using combinations of renewable feedstocks
and energy sources. Integrating renewable
energy sources into hydrogen production
can add complexity and cost, but
stakeholders predict that costs will fall as the
technology develops and scales.
California has set goals for hydrogen to
transition to renewable sources, similar to its
mandated renewable policy goals for the
electrical grid. Today, one third of the
hydrogen fuel sold in California by stations
that receive state funds must be renewable
by law at a minimum. 165 Additionally, light-
duty hydrogen fueling station owners that
utilize California’s LCFS program are required
to provide at least 40 percent renewable
hydrogen. Notably, hydrogen that meets the
above standards must be additional, new
renewable hydrogen instead of existing
renewable electricity or biogas. 166 Before
2017, renewable hydrogen production relied
on pairing grid-based electricity used for
electrolysis with the purchase of Renewable

161 National Renewable Energy Laboratory, “SunLine Transit Agency American Fuel Cell Bus Progress Report”, April 2020, accessed

at https://www.nrel.gov/docs/fy20osti/71312.pdf
162 Federal Transit Administration, “Zero-Emission Bus Evaluation Results: Stark Area Regional Transit Authority Fuel Cell Electric

Buses,” October 2019, accessed at https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/research-innovation/134491/zero-

emission-bus-evaluation-results-sarta-fta-report-no-0140_0.pdf.
163 Shell, “Hydrogen Fuel,” accessed at https://www.shell.com/energy-and-innovation/new-energies/hydrogen.html.
164 GNA analysis using AFLEET tool (2018) from U.S. Department of Energy, Argonne National Laboratory, accessed at

https://afleet-web.es.anl.gov/afleet/. The analysis assumes fossil natural gas as the feedstock using steam-methane reformation to
produce hydrogen.
165 Per State Bill 1505, stations for which California state funding is tied to their achieving a higher-than-33 percent renewables

profile are exempt from this requirement. Additionally, stations that were approved under California’s Low Carbon Fuel Standard’s
Hydrogen Refueling Infrastructure (HRI) program are required to produce 40 percent renewable content. SB-1505 Fuel: Hydrogen
alternative fuel (2005-2006), accessed at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=200520060SB1505.
166 State of California, “SB-1505 Fuel: hydrogen alternative fuel. (2005-2006),” accessed at

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=200520060SB1505.

115
Energy Certificates (RECs). 167,168 Growth in the
demand for hydrogen in the light duty
market, and the availability of renewable
natural gas (RNG), has shifted the market in
recent years. Currently, most renewable
hydrogen is produced by steam methane
reformation (SMR) using renewable natural
gas in place of fossil gas.
Fleets using clean vehicle technologies
frequently prioritize use of renewable fuels to
reduce their carbon footprints. In order for
FCEVs and hydrogen to become widely used,
it will be important for hydrogen providers to
increase the percentage of renewable
hydrogen dispensed at a growing network of
hydrogen stations. Thankfully, investments are
underway to produce more renewable
hydrogen. The Shell and Air Liquide projects
will both supply some of their hydrogen as
renewable hydrogen made from biogas.
However, it is still too early to tell whether
these investments will achieve the necessary
scale to reduce costs and achieve a more
robust renewable hydrogen market.
cycles that require longer range, faster
refueling times, and/or do not return-to-base
for refueling.
Demonstrations underway in the transit,
drayage, and delivery sectors will provide
much-needed data on the reliability of the
technology for fleets. Despite expected
advancements in the technology, switching
to medium- and heavy-duty FCEVs is likely to
entail significantly higher capital costs for
vehicles and infrastructure compared to
continued purchase of conventional gasoline
and/or diesel vehicles. Operational costs may
also be higher, until the price of hydrogen can
be significantly reduced. To achieve an
attractive total cost of ownership (TCO), fleets
may need to rely on government grant and
incentive funds to help buy down these
higher capital costs in the near-term.

More Investment & Time Needed to See

Full Potential
For most medium- and heavy-duty fleets,
FCEVs are not yet available, though recent
investments and demonstrations give this
technology more promise as a clean vehicle
solution. FCEVs have the potential to become
the zero-emission solution for challenging duty

Demonstrations in the transit sector will provide much-

needed data on the reliability of fuel cell technology for
fleets | Courtesy: AC Transit

167For more information about RECs as they apply in California, see https://www.cpuc.ca.gov/General.aspx?id=5913.
168Energy Independence Now, “Renewable Hydrogen Roadmap,” Mar 2018,
https://static1.squarespace.com/static/58e8f58d20099ea6eb9ab918/t/5afd25a9f950b7543abe21ba/1526539702668/EIN_RH2_Pap
er_Lowres.pdf.

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5.1 FLEET ADOPTION AND INSIGHTS
Adoption of Hydrogen Fuel Cell Electric
Vehicles 2015-2019: Commercial Interest
is Expanding Beyond Transit to Other
Fleet Types
By mid-2020, roughly 70 heavy-duty FCEVs
have been deployed in the U.S.; nearly 50 of
these are early commercial transit buses
operating in California. 169 Alameda County
Demonstrations of other medium- and heavy-
duty vehicle types are underway or imminent
in drayage and delivery fleets, some of which
are summarized here:
• Total Transportation Services (TTSI) will be
demonstrating up to five Class 8 trucks
(Peterbilt gliders) powered by a fuel
cell/battery electric hybrid architecture.
As of Q2 2020, one unit is in service. 173

By mid-2020, roughly 70 heavy-duty FCEVs have been deployed in the U.S.; nearly 50
of these are early commercial transit buses operating in California.

Transit in the San Francisco Bay Area operates
more than 20 fuel cell electric buses, SunLine
Transit east of Los Angeles operated its first
fuel cell electric bus in 2000 and will have 17
soon, and Orange County Transportation
Authority south of Los Angeles has opened its
first dedicated hydrogen fueling station for its
10 fuel cell electric-buses with a capacity to
fuel up to 50 buses, in partnership with
alternative fuel provider Trillium. 170,171 One of
the largest fuel cell bus transit fleets in service
today is operated by the Stark Area Regional
Transit Authority (SARTA) around Cleveland,
Ohio with 12 FCEV buses in operation. The cost
of these models is around $1 million per bus. 172
• TTSI has operated one demonstration
FCEV model of Kenworth’s T680 Class 8
truck since 2018, as well as a Navistar
International ProStar day cab equipped
with a PEM fuel cell engine from US Hybrid
since 2017. 174 Both vehicles run between
the Ports of Los Angeles and Long Beach
and inland terminals.
• Kenworth and Toyota are currently
demonstrating 10 more fuel cell T680s in
the Port of Los Angeles with Toyota
Logistics Services, UPS, TTSI, and Southern
Counties Express. 175
• UPS, Hydrogenics (Cummins), and other
partners are retrofitting 16 Class 6 delivery
vans with fuel cell/battery electric hybrid
architectures with the first unit going into
service in Q1 2019. 176

169 California Fuel Cell Partnership, “By the Numbers,” accessed at https://cafcp.org/by_the_numbers.
170 California Fuel Cell Partnership, “Buses and Trucks,” accessed May 2020, https://cafcp.org/buses_trucks#buses_trucks_transit.
171 Orange County Transit, “Clear Path: Zero-emissions Bus Technology”, accessed April 2020, https://www.octa.net/About-

OCTA/Environmental-Sustainability/Hydrogen-Fuel-Cell-Electric-Bus/.
172 California Fuel Cell Partnership, “Buses and Trucks,” accessed May 2020, https://cafcp.org/buses_trucks#buses_trucks_transit.
173 California Air Resources Board, “Fast-Track Fuel Cell Truck”, April 2018, accessed at

https://ww3.arb.ca.gov/msprog/lct/pdfs/fasttrack.pdf.
174 US Hybrid, “US Hybrid announces china fuel cell joint venture and unveils Class 8 fuel cell port drayage truck for San Pedro Bay

Ports,” 3 May 2017, accessed at https://ushybrid.com/us-hybrid-announces-china-fuel-cell-joint-venture-and-unveils-class-8-fuel-

cell-port-drayage-truck-for-san-pedro-ports/.
175 Kenworth, “The Kenworth T680 with Integrated Toyota Hydrogen Fuel Cell Technology Stars at Port of Los Angeles,” 23 April 2019,

https://www.kenworth.com/news/news-releases/2019/april/kenworth-toyota-pola/.
176 Hanlin, Jason, “Fuel Cell Hybrid Electric Delivery Van Project - 2019 DOE Annual Merit Review,” Center for Transportation and the

Environment, 1 May 2019, accessed at https://www.hydrogen.energy.gov/pdfs/review19/ta016_hanlin_2019_o.pdf

117
 Figure 23: FCEV adoption by fleet type (pilot and purchase) among surveyed fleets. Source: GNA fleet
survey.

• Nikola Motors, one of the most vocal
proponents of hydrogen, is working to fulfill
the first of an 800-unit order from Anheuser
Busch. 177
• Engine OEM Cummins Westport Inc. has
also invested in a prototype FCEV as part
of its research and development process
to ensure that it can serve customers
operating FCEV fleets. 178
If these concept heavy-duty fuel cell trucks
do emerge as commercial products over the
next several years, this will significantly
expand zero-emission medium- and heavy-
duty vehicle offerings.
Experimentation is occurring across multiple
fleet types. Among survey respondents who
have piloted or purchased FCEVs, 25 percent
are municipal/shuttle fleets, 19 percent are
heavy-duty short haul, 19 percent are heavy-
duty long/short haul (mixed), 12 percent are
transit fleets, and the remaining are split
amongst heavy-duty long-haul, utility, and
urban delivery fleets (Figure 23). 179
Two segments with early commercial success
for FCEVs are worth highlighting even though
they are not a focus of this report: light-duty
vehicles and forklifts used in warehouse
operations. As of the end of 2019, 8,300 light-
duty FCEVs have been sold or leased in
California according to the California Fuel
Cell Partnership. 180 The market for forklifts is
growing even more quickly. As of the middle
of 2020, Plug Power, the leading
manufacturer of fuel cell forklifts, reported

177 Nikola Motors, “Anheuser-Busch continues leadership in clean energy, places order for 800 hydrogen-electric power semi-trucks

with Nikola Motor Company,” 3 May 2018, accessed at https://nikolamotor.com/press_releases/anheuser-busch-continues-

leadership-in-clean-energy-places-order-for-800-hydrogen-electric-powered-semi-trucks-with-nikola-motor-company-23.
178 Randall, Chris, “Cummins presents scalable fuel cell truck concept,” elecdrive.com, 31 October 2019, accessed at

https://www.electrive.com/2019/10/31/cummins-presents-scalable-fuel-cell-truck-concept/.
179 Due to the low penetration rate of FCEVs in commercial transportation, and transit agencies’ limited registration reporting

requirements, no FCEVs were reported in IHS Markit’s 2015-2019 new vehicle registration data.
180 California Fuel Cell Partnership, “By the Numbers,” accessed at https://cafcp.org/by_the_numbers.

118
 Two segments with early commercial success for FCEVs are worth highlighting even though
they are not a focus of this report: light-duty vehicles and forklifts used in warehouse
operations.

that more than 32,000 hydrogen fuel cell
forklifts were in operation across the nation’s
warehouses. 181 Fuel cell forklifts can provide
the same zero-emissions performance of
battery forklifts, with added benefits,
including fast refueling and extended
operational time between fueling (range or
endurance).
These commercially available offerings give
certain fleets the opportunity to pilot or adopt
FCEVs in their operations today. Additionally,
light-duty fuel cell systems like those in the
Toyota Mirai and Hyundai Nexo are forming
the basis for the medium and heavy-duty
platforms being developed by these
companies. This approach allows FCEV
platforms to benefit from scale of production
in the light duty market, potentially reducing
the costs of FCEV components in the medium-
and heavy-duty market more quickly than if
purpose-built components were developed.
Fleet Insights on Fuel Cell Electric Vehicles:
Acceleration & Fueling Time Are Positive,
But More Work Needed on Performance
& Fuel Cost
Among the fleets that GNA surveyed, 11
percent have used FCEVs as a clean vehicle
technology. 182 Fleet rates for piloting versus
purchasing FCEVs are higher than those for
other technologies surveyed under this study.
More than 80 percent of the fleets who have
used FCEVs conducted pilot demonstrations,
and nearly 70 percent of the deployments

Figure 24: Approach to adopting hydrogen among surveyed fleets using or considering FCEVs. Source: GNA
fleet survey.

181 Plug Power, “Plug Power Reports First Quarter 2020 Results, Reaffirming Guidance for 2020,” May 2020, accessed at

https://s21.q4cdn.com/824959975/files/doc_financials/2020/q1/Q12020-Investor-Letter-FINAL.pdf
182 The fleet types who report using FCEVs in the GNA survey (pilot or purchase) include: Municipal/Shuttle, Transit, Heavy duty -

Short haul, Heavy duty - Long/Short haul (Mixed), Heavy duty - Long haul, Utility Truck, Urban Delivery.

119
planned over the next 24 months will be pilots
(Figure 24). This data reflects fleets understand
that the technology is still in development.
Infrastructure investments differ by fleet type,
according to the surveys. Planned
infrastructure investments over this time
period are primarily being made by transit
fleets in California, and all of these transit
fleets plan to purchase the fueling
infrastructure. Meanwhile, only a few
municipal and delivery fleets, and one heavy-
duty regional haul fleet, plan to invest in
hydrogen fueling infrastructure. 183 Limited
anticipated infrastructure investment by fleets
is likely due to infrastructure providers who
offer fueling as part of demonstrations and
Table 9: Summary of key insights on hydrogen and FCEVs from interviews with fleets
Summary of Fleet Experiences
with Hydrogen FCEVs
• Torque/acceleration
• Refueling times can be
comparable to diesel
Benefits
• Zero-emissions
• Quiet operation
• Cleaner working environment
• No odor
• Fuel cost premium
• No public infrastructure (outside
Challenges
CA)
• Limited fuel supply
• Service and support limitations
• Sustained power output
difficulties
Note: Fleet applications represented are municipal / shuttle, transit, and heavy-duty short / long haul (mixed).
Vehicle counts indicate the number of FCEVs operated by the fleet.
GNA’s survey did not identify the types of fueling infrastructure that fleets are investing in. Potential infrastructure includes
183
mobile fueling arrangements, on-site fueling with delivered fuel, and on-site production and fueling.
first-generation deployments in heavy-duty
vehicles.
Survey data further indicates that hydrogen
FCEV users are early adopters of other clean
vehicle technologies. All fleets that have used
hydrogen FCEVs also use other clean
technologies. More than 50 percent intend to
purchase BEVs and charging infrastructure
and/or NGVs with renewable natural gas.
Overall, fleets report satisfaction with power,
acceleration, and fueling times for hydrogen
FCEVs, but they express concerns about
access to a reliable, affordable fuel supply.
This, and other feedback from fleets using
hydrogen, is summarized in Table 9.
Examples of Fleet Commentary
“Most of our routes are around 240 miles but a few were
longer so we pushed the OEM for more range. We get 7
MPG equivalent and the OEM is increasing their onboard
storage to 60 kg [from 40 kg].” – HD – Transit (12 buses)
“Power is good. Plus, it doesn't smell like diesel and there’s
much less vibration in the cab compared to diesel
trucks.” – Heavy-duty short / long haul (7 trucks)
“Longer lead times on replacement parts have been an
issue. We have about 849 safety protocols, so any small
issue shuts down the bus, such as a fan. We are working
with the OEM to work through the kinks.”
– Municipal/Shuttle Fleet (4 vehicles)
“Load management has been solved in the second
generation but there’s a new issue [on two of our trucks]
where the fuel cell output cannot keep up with truck
battery needs. The driver has to stop and wait.” – Heavy-
duty short / long haul (7 trucks)
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 Overall, fleets report satisfaction with power, acceleration, and fueling times for
hydrogen FCEVs, but they express concerns about access to a reliable, affordable
fuel supply.

To address the challenges listed above, fleets
recommend certain vehicle and fuel
improvements that can help make FCEVs a
stronger fit for their medium- and heavy-duty
operations (transit buses, in particular). Two
areas emerge as priorities for development:
• Continued investments needed in power
management: Although the range
provided by current heavy-duty FCEVs is
generally satisfactory to interviewed fleets,
they cite reductions in vehicle weight and
parasitic loads as areas for improvement.
Addressing these issues requires
manufacturers to consider several
tradeoffs as they pick relative sizes and
power outputs of fuel cell systems, battery
packs, and balance of plant subsystems.
For example, transit buses typically have
higher heating and cooling loads than
trucks. These specialized loads help meet
passengers’ comfort requirements while
trucks benefit from freeing up weight and
space for additional payload.
Planned infrastructure investments are
primarily being made by transit fleets in
California, and all of these transit fleets
plan to purchase the fueling infrastructure.
• Additional infrastructure buildout that
enables a reliable and affordable fueling
experience is necessary: All fleet
representatives identified a need for a
greater, more widely distributed supply of
affordable hydrogen fuel and increased
station counts. They also identified the
need to standardize vehicle-fueling
interfaces, so that different types of
heavy-duty FCEVs can use the same
stations.
Renewable Hydrogen: Provides a Third of
California Fuel, Incentives Are
Encouraging Growth
Transitioning to FCEVs offers fleet owners
reduced life-cycle greenhouse gas (GHG)
emissions. The reduction is around 15 percent
compared to diesel and nearly 30 percent
compared to gasoline. 184 While FCEVs
produce zero tailpipe emissions, the
production process for almost all hydrogen
used in transportation today, like most
technologies in this report, produces
emissions. 185 Most hydrogen produced today
for California transportation is made from fossil
sources, but the renewable content is
increasing due to policies set in place over
the last 15 years.

184 GNA analysis using AFLEET tool (2018) from U.S. Department of Energy, Argonne National Laboratory, accessed at

https://afleet-web.es.anl.gov/afleet/. The analysis assumes fossil natural gas as the feedstock using steam-methane reformation to
produce hydrogen.
185 California Air Resources Board, “2019 Volume-weighted Average Carbon Intensity by Fuel Type for Liquid Fuels,” March 2020,

accessed at https://ww3.arb.ca.gov/fuels/lcfs/dashboard/dashboard.htm.

121
 Hydrogen produced commercially in the U.S., primarily for industrial purposes, is 85
percent derived from natural gas, a fossil fuel. However, several production efforts are
underway across the country to build the market for renewable hydrogen in
transportation.

Production of renewable hydrogen with zero-
or near-zero-emissions is possible through
multiple different technologies with two that
dominate today. The most prevalent
approach for the production of renewable
hydrogen involves steam reformation of
renewable natural gas (RNG), instead of fossil
natural gas. The second approach that is
increasingly prevalent produces hydrogen
through the electrolysis of water using
electricity from renewable sources like solar-
or wind. Integrating renewable energy
sources into hydrogen production can add
time and cost, but stakeholders predict that
costs will fall as the technology develops and
scales.
California has set goals for hydrogen to
transition to renewable sources, similar to its
mandated policy goals for the electrical grid.
were registered under the LCFS program. In
addition, those stations that qualify for the
newly created LCFS capacity credit for light-
duty stations are required to have at least 40
percent renewable hydrogen. 187 Notably,
hydrogen that meets the above standards
must be additional, new renewable
hydrogen instead of existing renewable
electricity or biogas. 188 Most fuel retailers
meet this requirement by sourcing hydrogen
from producers that use RNG instead of fossil
gas to produce hydrogen.
Renewable hydrogen does not yet qualify for
credits under the federal government’s
Renewable Fuel Standard. Similar to
California’s LCFS program, the RFS allows
renewable fuel producers to collect credits
from the sale of renewable hydrogen to end
users. Those credits can be sold on the open
market to oil refiners and importers, which

Production of renewable hydrogen with zero- or near-zero-emissions is possible

through multiple different technologies with two that dominate today. The most
prevalent involves renewable natural gas (RNG), instead of fossil natural gas.

Today, one third of the hydrogen fuel sold in
California by stations that receive state funds
must be renewable, at a minimum, by law. 186
Furthermore, in 2019, 75 percent of
California’s operational hydrogen stations
need to meet regulatory obligations to
reduce GHG emissions from petroleum fuel
(gasoline and diesel). If renewable hydrogen
were approved to qualify for RINS by the EPA,
it would provide valuable new revenue

186 Per State Bill 1505, stations for which funding is tied to their achieving a higher-than-33 percent renewables profile are exempt
from this requirement. Additionally, stations that were approved under the Low Carbon Fuel Standard’s Hydrogen Refueling
Infrastructure (HRI) program are required to produce 40 percent renewable content. SB-1505 Fuel: Hydrogen alternative fuel
(2005-2006), accessed at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=200520060SB1505.
187 California Air Resources Board, “2019 Annual Evaluation of Fuel Cell Electric Vehicle Deployment & Hydrogen Fuel Station

Network Development,” July 2019, accessed at https://ww2.arb.ca.gov/sites/default/files/2019-07/AB8_report_2019_Final.pdf.

188 State of California, “SB-1505 Fuel: hydrogen alternative fuel. (2005-2006),” accessed at

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=200520060SB1505.

122
pathways for renewable hydrogen to cut California market. 190 The company is also
costs and help develop the market. production in Quebec, producing renewable
hydrogen with the world’s largest
Hydrogen produced commercially in the U.S., electrolyzer. 191 The renewable hydrogen from
primarily for industrial purposes, is 85 percent this project will serve Air Liquide’s hydrogen
derived from natural gas, a fossil fuel. 189 stations in the U.S. Northeast.
However, several production efforts are
underway across the country to build the
market for renewable hydrogen in
transportation. Air Liquide, an industrial gas
company, is building a renewable hydrogen
production plant in North Las Vegas, primarily
to serve upwards of 40,000 vehicles for the

5.2 HYDROGEN FUEL CELL ELECTRIC VEHICLES AS A SUSTAINABLE FLEET TECHNOLOGY

Fuel Price and Cost: Steep Reductions
Needed, Investments Underway
Data on hydrogen prices for on-road
transportation is limited because the market is
relatively nascent. Currently, almost all
hydrogen used for FCEVs is sold at 44 public
light-duty retail stations in California. 192 The
price ranges from $12.85 to $16.78 per
kilogram (kg), with an average of about
$16.51 per kg. 193 A kilogram of hydrogen
contains about the same amount of energy
as a gallon of gasoline, so these prices are
much higher than gasoline or diesel on an
energy-equivalent basis. Most experts agree
prices must drop below $8.00 per kg for
fueling light-duty vehicles to be competitive
with gasoline or diesel. 194 Progress appears to
be underway with one of the latest stations
opened in California retailing for an average
of $12 per kg. 195 Furthermore, two in-use
studies of FCEV buses have seen average fuel

Two in-use studies of FCEV buses have seen average fuel costs to transit agencies of
$5.27 per kg and $7.25 per kg for private fueling with fuel economy around 6 miles per
diesel-gallon-equivalent.

189 U.S. Energy Information Administration, “Fuel cell power plants are used in diverse ways across the United States,” 20 April 2018,

accessed at https://www.eia.gov/todayinenergy/detail.php?id=35872.
190 Air Liquide, “Air Liquide committed to producing renewable hydrogen for the West Coast mobility market with new liquid

hydrogen plant,” October 2019, accessed at https://www.airliquide.com/united-states-america/air-liquide-committed-producing-

renewable-hydrogen-west-coast-mobility-market.
191 Air Liquide, “Air Liquide invests in the world’s largest membrane-based electrolyzer to develop its carbon-free hydrogen

production,” February 2019, https://www.wiztopic.com/news/air-liquide-invests-in-the-worlds-largest-membrane-based-

electrolyzer-to-develop-its-carbon-free-hydrogen-production-7f65-56033.html.
U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations”, downloaded May 2020, accessed
at https://afdc.energy.gov/stations/#/analyze.
193 California Fuel Cell Partnership, “FCEV Sales, FCEB, & Hydrogen Data,” updated 1 May 2020,

https://cafcp.org/by_the_numbers.
194 California Fuel Cell Partnership, “Cost to refill”, https://cafcp.org/content/cost-refill.
195 H2 View, “Exclusive: Oakland hydrogen station retailing at $12,” October 2019, accessed at https://www.h2-

view.com/story/exclusive-oakland-hydrogen-station-retailing-at-12-per-kg/

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costs to transit agencies of $5.27 per kg and hydrogen can be delivered to the station as
$7.25 per kg for private fueling with fuel either a gas or a liquid, or it can be produced
economy around 6 miles per diesel-gallon- at the station and compressed.
equivalent. 196,197
Currently, hydrogen is sold as a vehicle fuel at
Hydrogen is widely produced in the United a limited number of stations nationwide. More
States for industrial markets. Inputs like natural
gas are relatively inexpensive and hydrogen
costs at the production plant are low
compared to the final pump price for
hydrogen currently seen in California. How is hydrogen sold and
Specialized hydrogen purification processes dispensed?
require costly equipment and distribution of How does it get to the station?
hydrogen requires the use of high-pressure
tube trailers or cooling to convert hydrogen “Hydrogen is sold by weight—a
gas into a cryogenic liquid. These costs can kilogram—instead of volume.
be substantial on a per-kilogram basis when Hydrogen storage and
paired with the low-throughput light duty dispensing equipment is above
ground, and hydrogen is
fueling stations prevalent today. As higher
dispensed as a compressed gas.
throughput fueling stations are constructed
Passenger (FCEVs) carry fuel
for both the light-duty and medium- and compressed to (10,000 psi).
heavy-duty markets, the per-kilogram costs of Trucks, buses and material
production and distribution are expected to handling equipment use
decline significantly. hydrogen at (5,000 psi).”
“Some stations make the
Fuel Availability and Infrastructure: Fast Fill hydrogen onsite, others have
but Expensive with Expanding Public hydrogen delivered as a liquid
Infrastructure (which is turned into compressed
gas at the station), and others
Similar to natural gas, hydrogen can be receive hydrogen as a
carried onboard vehicles as either a compressed gas. The manner of
compressed gas or a cryogenic liquid. For delivery dictates the equipment
fleets that have experience using CNG, at the station.”
hydrogen fuel tanks and the process for
fueling them are very similar. OEMs have -California Fuel Cell Partnership,
“How it Works.”
selected compressed hydrogen tanks as the
preferred type of fuel storage for FCEVs they
are now developing and/or commercializing.
While it is dispensed as a compressed gas,

196 National Renewable Energy Laboratory, “SunLine Transit Agency American Fuel Cell Bus Progress Report”, April 2020, accessed

at https://www.nrel.gov/docs/fy20osti/71312.pdf
197 Federal Transit Administration, “Zero-Emission Bus Evaluation Results: Stark Area Regional Transit Authority Fuel Cell Electric

Buses,” October 2019, accessed at https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/research-innovation/134491/zero-

emission-bus-evaluation-results-sarta-fta-report-no-0140_0.pdf

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 Fueling times with hydrogen can be comparable to diesel: Many heavy-duty
applications such as fuel cell buses and short haul trucks can be refueled in well under
10 minutes.

than 90 percent are located in and around
California’s major metropolitan areas while
the remainder are in the Northeast, and
Hawaii. 198 An additional 18 public hydrogen
stations are in the planning stages (mostly for
California), and many are expected to open
by the end of 2020. 199
All light-duty retail hydrogen stations offer
vehicle fast-filling at 700 bar (10,000 psi), the
standard filling pressure for light-duty FCEVs
(see callout). Heavy-duty FCEVs (buses and
trucks), as well as fuel cell forklifts, have
historically filled at a more-moderate pressure
of 350 bar (5,000 psi) but some new medium-
and heavy-duty platforms are opting for 700
bar fuel systems. Approximately two thirds of
existing stations offer both fueling options,
however, new light-duty fueling stations in
California are being constructed with few or
no 350 bar fueling positions as these station
developers align with the accepted light-duty
standards.
Fueling an FCEV with compressed hydrogen
comparable diesel or gasoline vehicle. For
example, a light-duty FCEV can be refueled
with hydrogen in under five minutes. Many of
the largest FCEVs, such as fuel cell buses and
short haul trucks fueled at 350 bar hydrogen,
can be fueled in under 10 minutes. 200
California has dominated development of
hydrogen stations—in tandem with rollout of
FCEVs—due to public funding, favorable
regulatory policies, and rising OEM activity. In
2013, California passed legislation to provide
a $20 million annual fund to develop 200
hydrogen stations by 2025 to support the
state’s goal of one million FCEVs on the road
by 2030. 201 Following a period of zero fuel
demand and station build-out, the 2016
introduction of the first commercially
available light duty passenger FCEVs by
Toyota and Hyundai stimulated fuel demand
(Figure 25). In 2019, California reported that
the state’s total fueling capacity was 12,430
kg per day, a 59 percent increase from the
previous year and 30 percent of
capacity. 202,203

can take roughly the same time as fueling a

California aims to reach 200 public hydrogen fueling stations in operation by 2025.
Nikola has pledge to build 700 hydrogen fueling stations across the U.S. by 2030.

198California Air Resources Board, “2019 Annual Evaluation of Fuel Cell Electric Vehicle Deployment & Hydrogen Fuel Station

Network Development,” July 2019, accessed at https://ww2.arb.ca.gov/sites/default/files/2019-07/AB8_report_2019_Final.pdf.

199 U.S. Department of Energy’s Alternative Fuels Data Center, “Alternative Fuel Stations”, downloaded May 2020, accessed

at https://afdc.energy.gov/stations/#/analyze.
200 See video produced by AC Transit and Linde America, https://www.youtube.com/watch?v=sACg-SnsLws.
201 California Legislative Information, “AB-8 Alternative fuel and vehicle technologies: funding programs. (2013 2014),” September

2013, accessed at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB8.

202 California Air Resources Board, “Joint Agency Staff Report on Assembly Bill 8: Annual Assessment of Time and Cost Needed to

Attain 100 Hydrogen Refueling Stations in California,” December 2018 and December 2019.
203 Note that these forecasts do not consider the already mature, but private, fueling infrastructure supporting hydrogen-powered

forklifts in the warehouse segment, or station forecasts from private manufacturers such as Nikola.

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 Figure 25: GGE of hydrogen consumed by the transportation sector in California. Source: California Air
Resources Board, Low Carbon Fuel Standard Quarterly Report, accessed 24 May 2020.

Sales of hydrogen for FCEVs are expected to
continue growing, with increased market
support. In 2019, California revised its Low
Carbon Fuel Standard to encourage
investments in hydrogen. The change allows
for station owners to monetize credits based
on a station’s capacity to dispense hydrogen,
thereby providing an economic benefit to
station developers.
Infrastructure growth has largely been policy
driven thus far, but commitments from
infrastructure developers are bringing a
growing share of private capital to the
market. Shell is currently working with partners
to form the “first hydrogen refueling network
in California,” while pursuing the world’s
largest green hydrogen production plant. 204
Shell has already built five U.S. stations, with
two more in the works. 205 Nikola has pledged
to build 700 hydrogen fueling stations across
the U.S. by 2030, and they are currently
pursuing partnerships to ensure a reliable fuel
supply. Hydrogen producer Air Liquide has
begun developing a plant to provide 30 tons
of liquid hydrogen per day to the Western U.S.
market. 206 Last year, First Element Fuel
received $24 million of funding from Mitsui
Group and Air Liquide to expand hydrogen
production sufficient to provide fuel for 28,000
vehicles in California. 207 Air Products expects
to bring a new plant online in California by the
first quarter of 2021 to ensure new capacity is
available “for the steadily increasing demand

204 Shell, “Hydrogen Fuel,” accessed at https://www.shell.com/energy-and-innovation/new-energies/hydrogen.html.

205 Royal Dutch Shell, “Hydrogen Fuel: Shell Hydrogen Stations,” accessed March 2020, https://www.shell.com/energy-and-
innovation/new-energies/hydrogen.html.
206 Air Liquide, “Air Liquide committed to producing renewable hydrogen for the West Coast mobility market with new liquid

hydrogen plant,” October 2019, accessed at https://www.airliquide.com/united-states-america/air-liquide-committed-producing-

renewable-hydrogen-west-coast-mobility-market.
207 “California hydrogen network gets multi-million dollar boost,” Hydrogen Fuel News, April 2019, accessed at

http://www.hydrogenfuelnews.com/california-hydrogen-network-gets-multi-million-dollar-boost/8537260/.

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from hydrogen fuel cell vehicles”. 208 The result
of these significant investments will have a
large influence on the potential for hydrogen
to scale and cut fuel costs for fleets.
Vehicle Model Availability by Sector and
Application: Two Transit Vehicles
Available Today, Several More Medium-
& Heavy-Duty Models on the Horizon
Commercialization of FCEVs is accelerating,
for a wide array of on-road applications.
FCEVs are behind BEVs for commercial and
technological maturity in most vehicle
applications, but they are beginning to
emerge as competition to BEVs in certain
applications. Transit agencies are deploying
pre-commercial fuel cell buses built by long-
established OEMs, as well as emerging OEMs.
Truck OEMs are not far behind; several have
announced plans to demonstrate and
commercialize medium- and heavy-duty
trucks, some as early as late 2020.
Transit buses are currently the only type of
medium- and heavy-duty vehicle fleet
application where FCEVs have been
deployed in normal revenue service. Two
transit bus OEMs, ElDorado National and New
Flyer, have led development and
manufacture of fuel cell buses for the U.S.
market. Both offer at least one fuel cell bus
model today that are essentially early
commercial products (Figure 26).
As described, several heavy-duty FCEVs are in
demonstration today. In tandem with an
expanded hydrogen fueling station network,
heavy-duty fuel cell trucks have promise to
help fleets achieve zero direct-vehicle
emissions in the most challenging
applications, including: duty cycles that
require longer driving ranges, routes that
necessitate fast refueling times, and/or fleets
that do not use return-to-base for refueling.
However, switching to medium- and heavy-
duty FCEVs is likely to entail significantly higher
capital costs for vehicles and infrastructure
compared to continued purchase of
conventional gasoline and/or diesel vehicles.

Figure 26: Medium- and heavy-duty fuel cell electric vehicles available today by body type and manufacturer.
Vehicles in distinct weight classes are counted as unique models. Source: GNA.

208Air Products, “Air Products to Build Second Liquid Hydrogen Production Facility in California,” January 2019, accessed at
http://www.airproducts.com/Company/news-center/2019/01/0107-air-products-to-build-second-liquid-hydrogen-productions-
facility-in-california.aspx

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5.3 LOOKING FORWARD

Some fleets consider FCEVs to be the
technology of the future, but significant
challenges remain to realize this promise.
Projections by OEMs, infrastructure
developers, and governments for future
market penetrations are bold. For example,
the California Fuel Cell Partnership “is pursuing
a network of 1,000 hydrogen stations and a
fuel cell vehicle population of up to 1,000,000
vehicles by 2030.” 209 FCEVs are part of
California’s Executive Order for 5 million zero-
emission vehicles by 2030. 210 Additionally, a
new California Air Resources Board mandate
requires a minimum percentage of zero-
emission vehicle sales by OEMs beginning in
2024 and reaching 40 percent for Class 8
tractors, 55 percent for Class 2b-3, and 75
percent for Class 4-8. FCEVs will undoubtedly
play a role along with BEVs in meeting these
targets. 211
The following are key trends for fleets to watch
that will have bearing on the ability of the
hydrogen FCEV industry to meet these goals.
Upcoming Vehicle Products (2020 – 2022)
The number of FCEV offerings is expected to
more than double over the next two years,
focused on California. While none have yet
offered fully commercial products in the U.S.
as of the middle of 2020, global OEMs Toyota
(in partnership with Kenworth) and Hyundai—
The number of FCEV offerings is expected
to more than double over the next two
years.
along with relative newcomer Nikola
Motors—have all announced plans to make
initial deliveries in the second half of this year,
mostly as demonstration models (Figure 27).
Toyota is also partnering with Hino Motors to
jointly develop heavy-duty hydrogen fuel cell
trucks with a cab-over design, initially for
Japanese markets. 212 Daimler and Volvo
have formed a joint venture to produce fuel
cells for demanding applications; 213 Daimler
committed to hydrogen-based series-
production vehicles by the end of the
2020s; 214 Hyundai is currently producing 1,000
units of its first FCEV tractor for Europe; 215 and
Cummins reports that FCEVS are an important

209 California Fuel Cell Partnership, “The California Fuel Cell Revolution: A vision for 2030,” https://cafcp.org/blog/california-fuel-
cell-revolution-vision-2030 and CARB, “2019 Annual Evaluation of Fuel Cell Electric Vehicle Deployment & Hydrogen Fuel Station
Network Development,” July 2019, https://ww2.arb.ca.gov/sites/default/files/2019-07/AB8_report_2019_Final.pdf
210 California Governor’s Office of Planning and Research, “Zero-Emission Vehicles,” Accessed June 2020 at

https://opr.ca.gov/planning/transportation/zev.html
211 Transport Dive, “CARB passes clean trucks rule, setting stage for no-diesel sales in California by 2045,” June 2020, accessed at

https://www.transportdive.com/news/trucking-California-Air-Resources-Board-Advanced-Clean-Truck-Regulation-EV-zero-
emissions/580560/
212 Toyota Motor Company, “Toyota and Hino to Jointly Develop Heavy-Duty Fuel Cell Truck,” March 2020 press release,

https://global.toyota/en/newsroom/corporate/32024083.html.
213 Volvo Group, “The Volvo Group and Daimler to lead the development of sustainable transportation by forming joint venture for

large-scale production of fuel cells,” 21 April 2020, https://www.volvogroup.com/en-en/news/2020/apr/news-3640568.html.

214 Daimler, “CO2-neutral fleet of new vehicles,” October 25, 2019 press release, https://www.daimler.com/investors/reports-

news/financial-news/20191025-co2-neutral-fleet-of-new-vehicles.html
215 Jin, Hyunjoo, “Hyundai signs deal to sell 1,000 hydrogen-powered trucks in Switzerland,” Reuters, 19 September 2018,

https://www.reuters.com/article/us-hyundai-motor-hydrogen-truck/hyundai-signs-deal-to-sell-1000-hydrogen-powered-trucks-in-
switzerland-idUSKCN1LZ1VI.

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 Figure 27: Medium- and heavy-duty fuel cell electric vehicles entering low volume or higher commercial
production in the next three years, per OEM announcements. Vehicles in distinct weight classes are
counted as unique models. Source: GNA.

part of its effort to meet fleet needs as they hydrogen-technology platforms – including
transition to cleaner powertrains. 216 FCEVs. In 2020, leading OEMs Volvo and

Investments in Vehicle Technology Daimler announced a joint venture to

Development
Vehicle and component manufacturers are
investing in hydrogen FCEV technology that
may reduce costs for end user fleets. For
example, established fuel cell stack provider
Ballard Power Systems is demonstrating its
equipment in several Class 8 on- and off- road
applications. Meanwhile, in 2019, Cummins
acquired fuel cell and hydrogen
technologies provider Hydrogenics and
invested in Loop Energy, which provides fuel
cell electric range extenders. As a leading
global provider of engine and components
for vehicle OEMs, Cummins’ efforts in this
market signal its readiness to meet
manufacturer needs across a variety of
develop and produce fuel cells for
“demanding applications.” 217
A key item to watch is the announcement by
manufacturers of fuel cell stack production
targets. Although these fuel cells can be used
in various applications, the transportation
sector has the greatest projected demand
increase, and OEM announcements are
expected to be most influenced by growth in
this market. Until the COVID-19 pandemic,
Toyota was already on track to produce
30,000 fuel cell stacks per year by the end of
2020 (and has not yet announced any
changes to this progress) and 200,000 by

216 Randall, Chris, “Cummins presents scalable fuel cell truck concept,” elecdrive.com, 31 October 2019,

https://www.electrive.com/2019/10/31/cummins-presents-scalable-fuel-cell-truck-concept/.
217 Volvo Group, “Hydrogen Fuel Cells”, accessed at https://www.volvogroup.com/en-en/innovation/electromobility/fuel-

cells.html.

129
 2025. 218 Hyundai plans to produce 500,000 per
year by 2030 and expects to invest more than
$6 billion total in the development and
production of commercial fuel cell electric
vehicles by then. 219 The ability of OEMs to
meet these milestones, followed by new
announcements on higher or lower
production volumes, will provide visibility to
fleet owners into the state of the market.
Investments in and Buildout of Fuel
Production
Another important trend for fleets to monitor
is the pace of build out for hydrogen
infrastructure across the U.S., and the impact
this process has on hydrogen fuel costs. By the
end of 2020, the number of hydrogen fueling
stations in the U.S. is expected to increase by
approximately 50 percent relative to 2018,

By the end of 2020, the number of hydrogen fueling stations in the U.S. is expected to increase by 50 percent, relative to 2018. Most
of these stations are designed for the growing light-duty vehicle market. | Courtesy: California Hydrogen Business Council (CHBC)

218 “Toyota will build 10 times more fuel cell cars which are a mystery to drivers,” Los Angeles Times, 10 November 2019, accessed

at https://www.latimes.com/business/story/2019-10-11/toyota-will-build-10-times-more-fuel-cell-cars-which-are-a-mystery-to-
drivers.
219 Hirsch, Jerry, “Hyundai, Nikola and Toyota to start to build the hydrogen highway,” trucks.com, 12 November 2019, accessed at

https://www.trucks.com/2019/11/12/hyundai-nikola-toyota-build-hydrogen-highway/

130
as indicated by California stations currently in support 20 hydrogen technology research
development. 220 As these investments come laboratories. 222
to fruition and result in greater volumes of fuel
dispensed for FCEVs, the key indicator for It is therefore no surprise that, to date, much
fleets will be to monitor hydrogen fuel prices. of hydrogen-related investment for
commercial development has come from
Many of the investments are designed to companies based in Asia or Europe. Examples
drive hydrogen fuel cost down, and the include Shell, Air Liquide, Toyota, Honda,
industry is optimistic. “The cost of hydrogen Hyundai, and NEL. These companies are often
refueling stations have been cut in half while developing and commercializing the
doubling performance already,” said Shell technology abroad. For example, the first of
representative Wayne Leighty, Hydrogen Hyundai’s 1,600 fuel cell electric 18-tonne
Business Development Manager, North trucks are due to begin operation in
America. “We have set a public goal to cut Switzerland in 2020.
the cost in half again while doubling
performance.” The extent to which these
goals are met, and the timeframe it takes, will
be an important factor in adoption rates of
FCEVs by fleets.

International Commitments to Hydrogen

Investments outside of the United States are

driving much of the industry’s development.
After the Fukushima reactor shut down in
2011, Japan prioritized investments in
hydrogen as a strategic energy source for the
island nation. China’s 13th Five-Year Plan
included a Fuel Cell Technology Roadmap
with a goal of 1,000 hydrogen fueling stations
and 1 million FCEVs operating in China by
2030. 221 By the following year, China had
already invested $12.4 billion toward its goal.
Norway sees hydrogen as a strategic asset
because its vast wind and hydropower
resources can be used to generate hydrogen
for export. Germany sees similar opportunities
and has committed $100 million annually to Investments outside the U.S. are driving much of the fuel
cell industry’s development | Courtesy: Linde

220 California Air Resources Board, “2019 Annual Evaluation of Fuel Cell Electric Vehicle Deployment & Hydrogen Fuel Station

Network Development,” July 2019, accessed at https://ww2.arb.ca.gov/sites/default/files/2019-07/AB8_report_2019_Final.pdf.

221 Fuel Cell and Hydrogen Energy Association, “Chinese Fuel Cell Industry Developments,” January 2019, http://www.fchea.org/in-

transition/2019/2/4/chinese-fuel-cell-industry-developments.
222 Deign, Jason, “10 Countries Moving Toward a Green Hydrogen Economy,” Greentech Media, 14 October 2019, accessed at

https://www.greentechmedia.com/articles/read/10-countries-moving-towards-a-green-hydrogen-economy.

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 Even home-grown companies, such as Nikola
Motors, may rely on fertile markets around the
globe for commercial success. Nikola is
developing a fuel cell electric tractor for the
European market and another for the U.S.
market. Commitment from governments and
industry around the world may be essential for
the technological breakthroughs necessary
to make hydrogen a viable clean vehicle
technology that can scale for U.S. fleets. If
such commitments are not sustained, then
the domestic hydrogen market may remain
elusive.
Anheuser-Bush made headlines with its commitment to order 800 FCEV trucks from Nikola and then completed its first zero-emission beer
delivery with a Nikola FCEV truck
132
Zero-Emission Government Action
In 1990, California adopted the world’s first
“technology-forcing” regulation for electric
vehicles. Effectively, this required light-duty
OEMs to introduce small percentages of BEV
models into their California auto lineups. The
state’s Zero-Emission Vehicle (ZEV) or “ZEV
mandate” was adopted along with
California’s emissions standards by 11 other
states (known as the ZEV States)—
representing around 30 percent of national
car (light-duty) sales.
 Two decades later, a similar effort is underway transit agencies to purchase only zero-
to commercialize medium- and heavy- duty emission buses when replacing in-use
vehicles powered by battery electric and fuel buses, starting in 2029. CARB’s goal is a full
cell electric vehicles (FCEVs). As more models transition to zero-emission bus fleets by
become available for fleets to pilot or 2040.
purchase, California's regulatory agencies
• In 2020, CARB adopted the Advanced
are pursuing policies and programs that
Clean Trucks (ACT) regulation as part of
encourage the transportation sector to
California’s strategy to accelerate a
develop and deploy these zero-emission
large-scale transition of commercial
vehicles. Emerging regulations target
medium- and heavy-duty vehicles to
manufacturer product development and
zero-emission technology, from Class 2B
sales goals, while grant funding enables fleet
up to Class 8. The newly adopted ACT
demonstrations and commercial
regulation requires truck OEMs to sell
deployments. Whether other states adopt
increasing percentages of zero-emission
similar strategies, as they did with the light-
models starting in 2024. It also includes
duty sector, is an important trend to watch.
provisions for larger trucking fleets (50 or
more units) to report key data points of
Key examples of adopted or emerging
their operations. 223
policies in California include:
• Increasingly, funds for incentive programs
• In 2018, CARB adopted the Innovative
in California—and in some cases, other
Clean Transit (ICT) regulation. This requires
parts of the nation—are focused on ZEVs.

California’s Innovative Clean Transit regulation requires transit agencies to purchase only zero-emission buses when replacing in-
use buses, starting in 2019 | Courtesy: SunLine Transit Agency

223 California Air Resources Board, “Advanced Clean Trucks Fact Sheet,” July 2019, accessed at

https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet.

133
Industry Perspective by California Hydrogen Business Council (CHBC)

Hydrogen made tremendous strides toward reaching its potential as a sustainable fleet solution
over the past year. The gains made by this industry toward commercial maturity occurred across
all parts of the value chain, including OEMs and fleets as well as in infrastructure and public
policy. While hydrogen has a few years left to fully compete in the fleet market from a TCO
perspective, 2020 will be remembered as the year that it entered the race in the eyes of
commercial fleets.

Closely watched fuel cell electric truck OEM Nikola Motor briefly stole headlines when it soared to an evaluation
of $34 billion after its initial public offering in June 2020

OEMs Move Headlong into Hydrogen

Recent announcements from OEMs are notable both for their significance and the sheer
number of players now moving decisively into hydrogen. Cummins took important steps into the
market, including the acquisition of fuel cell maker Hydrogenics and investing in Loop Energy.
Hyundai delivered its first Class 8 tractors in Switzerland after announcing it would commercialize
a tractor in North American several months prior. Daimler Truck AG and Volvo Group
announced a partnership to develop, produce and commercialize fuel cell systems for heavy-
duty vehicle applications and other uses—just after Daimler committed to bringing a
hydrogen-fueled truck to market before the end of the decade. Toyota has made a long-term

134
commitment to scale production of hydrogen fuel cells, largely for the transportation market,
and has entered a number of strategic partnerships to demonstrate and develop heavy-duty
vehicles including partnerships with Kenworth (PACCAR) and Hino. Nikola Motor, the closely-
watched OEM that has promised to deliver a full-service lease for 95 cents-per-mile, stole the
headlines when it briefly soared to a valuation of over $34 billion just after its initial public offering
in June and really captured the attention of investors.

Fleets Take Notice of FCEVs

Fleets signaled their

growing interest in the
potential of fuel cell
electric vehicles (FCEVs)
as the long-term zero-
emission solution for the
most demanding heavy
duty applications. The
range, fueling times, and
driving experience of
FCEVs is similar to what
fleets have come to
expect from diesel. Transit
agencies have been
operating fuel cell electric
buses (FCEBs) for over a
decade with great
success from New Flyer, El
Dorado National and Van
Zero-emission cargo transport fuel cell-powered chassis | Courtesy: Kenworth
Hool. Alameda County
Transit and Sunline Transit in California, and Stark Area Regional Transit Authority (SARTA) in Ohio,
have a decade of experience with FCEBs and are placing orders for more. In Illinois, Champaign
Urbana MTD in Urbana, IL recently placed an order for FCEBs and onsite hydrogen generation
via electrolysis. At the beginning of the year, the Orange County Transportation Authority
(OCTA) opened the nation’s largest hydrogen fueling station for public transportation with a
capacity for 50 FCEBs.

In port and drayage applications, UPS, TTSI, Southern Counties Express, and Toyota Logistics
Services began testing the T680 Class 8 fuel cell vehicle developed in partnership with Kenworth
and Toyota. Additionally, in its public offering filing documents, Nikola reported 14,000 customer
pre-orders from fleets across North America for its two models of Class 8 tractors (one electric
and one FCEV), the first of which is expected next year.

135
Providers Prepare to Scale Fueling

Hydrogen is already widely available and produced at scale around the nation, but almost
completely from fossil feedstocks and mostly for industrial applications. These industrial
producers, along with established fuel providers, took note of the growing and potentially
sizable market for hydrogen fuel and responded with big investments to expand capacity and
the renewable content of their product in states like California. Upon announcing it would build
a second California production plant, Air Products specifically referenced the growing demand
by vehicles. Shell, Air Liquide, and First Element Fuel are all investing in expansion to fuel not just
thousands, but tens of thousands of hydrogen FCEVs.

FCEV Technology is Proven Today

Fuel cells are a proven and growing in several applications across weight classes, including light
duty vehicles and forklifts. In the forklift market, FCEVs have accumulated over one billion miles
and cost less than battery electric vehicles—providing a reliable zero-emission, fume-free
replacement solution for traditional diesel and propane forklift operators who typically work in
enclosed spaces. For higher powered applications, one study finds that FCEVs already cost less
than battery electric vehicles that require fast charging above 60 kW on a total cost of
ownership basis. 224 Hydrogen is able to be stored in significant amounts, for extended periods of
time, and can be easily transported.

Policymakers Priming the Pump

FCEVs in California are supported by a host of policy drivers, including the California Air
Resources Board’s (ARB) Low Carbon Fuel Standard and numerous laws and Executive Orders
that support the transition to zero-emission technologies. This year, ARB took another big step
with adoption of the Advanced Clean Truck Rule (ACT), which established a mandate for zero-
emission truck sales. Starting in 2024, manufacturers will be required to sell medium- and heavy-
duty zero-emisison vehicles. By 2035, zero emission truck/chassis sales would need to be 55% of
Class 2b-3 truck sales, 75% of Class 4-8 straight truck sales, and 40% of truck tractor sales. In
addition, a zero emission fleet rule is under development by ARB. Furthermore, hydrogen is
competitive for numerous public incentive programs that underpinned the growth of other
sustainable technologies, including the Zero-Emission Truck and Bus Voucher Incentive Project
(HVIP), VW mitigation funds, and the Carl Moyer Program.

The advocacy goals of the California Hydrogen Business Council are for legislators to allow
access to low cost power for renewable electrolytic hydrogen production, development of a
HD FCEV freight corridor to ramp up infrastructure, and expansion of the ARB LCFS Hydrogen
Refueling Infrastructure (HRI) credit to include heavy duty to support station development in
order to support FCEV truck deployment.

224Roadmap to a U.S. Hydrogen Economy, available at

https://static1.squarespace.com/static/53ab1feee4b0bef0179a1563/t/5e7ca9c03c2524311f3bef36/1585228227720/Road+map+t
o+a+US+hydrogen+economy+Exec+Sum+Web+Final.pdf

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The Hydrogen Market Can Scale, Fast

Both public and private investments are advancing hydrogen and fuel cell technology,
enabling it to meet the needs of multiple industries beyond transportation. Replacing or
blending some level of hydrogen into the natural gas system can reduce emissions for the 47
percent of U.S. households that currently use natural gas, without the need for any new
infrastructure development, according to one study. 225 Doing so adds scale to the hydrogen
market and will result in lower costs across the spectrum of opportunities including transportation
fuels. Hydrogen fuel cells also offer low-carbon energy for energy-intensive manufacturing and
already provide a backup, easy-to-store energy source for power outages.

The transportation industry is keeping close tabs on these cross-sector developments as

investment and growth in the market for each of these applications is transferrable to enable
FCEVs to scale and bring down the cost of the fuel. Ongoing market development and
investment is projected to continue to further drive down costs, potentially making hydrogen a
cost-effective clean fuel for fleets in the near future.

225 Roadmap to a U.S. Hydrogen Economy, available at

https://static1.squarespace.com/static/53ab1feee4b0bef0179a1563/t/5e7ca9c03c2524311f3bef36/1585228227720/Road+map+t
o+a+US+hydrogen+economy+Exec+Sum+Web+Final.pdf

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Methodology
The State of Sustainable Fleets is the first comprehensive, technology-neutral analysis of
adoption, fleet insights, and critical trends for four clean vehicle technologies used by on-road
fleet owners as compared to “baseline” technologies of gasoline and diesel. The methodology
combines primary data collection using surveys, interviews, and other research with secondary
data collected from credible sources and industry experts. This appendix describes the scope of
study and the methodology for primary data collection and data procured directly from third
parties; publicly available data are cited throughout the report.

Scope of Study: This study looked at on-road fleets operating Class 2a-8 vehicles today. Fleet
types used for surveys and interviews include: heavy-duty (long haul), heavy-duty (short haul),
heavy-duty (long/short haul), refuse, transit, school bus, municipal/shuttle, urban delivery, and
utility.1 Renewable fuels considered in this study are focused exclusively on “drop-in"
replacements (including renewable electricity) that can be used without modification
to the vehicle technologies covered in this study (i.e., internal combustion engines powered by
diesel and gasoline, spark-ignited natural gas and propane, battery electric, and fuel cell
electric). Hybrid technologies were not exclusively studied in this report. The study’s
geographic scope is United States.

Approach to Data: Throughout this study, a variety of data was collected from fleet end users,
vehicle technology manufacturers, and industry stakeholders. This study also procured
data directly from several sources including IHS Markit, Propane Education and Research
Council, Center for Transportation and Environment, U.S. Environmental Protection Agency’s
SmartWay program, and the North American Council for Freight Efficiency (NACFE). Gladstein,
Neandross & Associates’ (GNA’s) Make/Model charts were created using information from
vehicle manufacturers that was publicly available before July 1, 2020. Models were counted by
weight class; a product listed with two weight classes (e.g. “GVWR 6/7”) was counted as two
models. GNA’s funding data is generated regularly through its Funding 360 program using
information from utilities, federal, state, and local agencies in North America.

Surveys and interviews were used to identify trends and insights from early adopters of the four
clean vehicle technologies (natural gas, propane, electric drivetrain, fuel cell electric
drivetrain), technologies for more sustainable use of baseline fleet vehicle technologies (diesel
and gasoline), and use of renewable fuels (renewable diesel, biodiesel drop-in blends,
renewable natural gas, renewable propane, renewable electricity) powering their relevant
vehicle platforms. From GNA’s 26 years of consulting with fleets and clean transportation
stakeholders, we find that actionable information on technology benefits, challenges, future
adoption, and other key questions on the state of the industry are best identified from existing
users of the technology.

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Sponsors of the report – Penske Transportation Solutions, Daimler Trucks North America, Shell Oil
Company, and Exelon Corporation – reviewed a draft of the report for accuracy. The North
American Council for Freight Efficiency (NACFE), Natural Gas Vehicles for America (NGVA),
Propane Education and Research Council (PERC), Edison Electric Institute (EEI), and the
California Hydrogen Business Council (CHBC) also received a draft of the chapter for which they
contributed an Industry Perspective. Each of these organizations made important contributions
to the accuracy of the report.

Survey and interview data were collected prior to the COVID-19 pandemic and global
recession. Where possible, secondary data cited in this report was updated to reflect impacts
of the global pandemic and recession. The launch of the State of Sustainable fleets in August
2020 included two panel discussions that provided additional insight from fleets, OEMs, and
infrastructure providers on the impacts of COVID-19. Both sessions can be viewed
at www.StateOfSustainableFleets.com. Future reports will include new data from surveys and
interviews on the impact of these global crises on clean technology adoption by fleets.

The State of Sustainable Fleets represents a comprehensive, technology-neutral analysis of the

state of sustainable technology for on-road fleets with the best data available today. Future
reports will update the analysis as new, credible data become available.

Survey Methodology

GNA conducted an online survey on current and anticipated fleet adoption of the fuels and
technologies discussed in the State of Sustainable Fleets reports. The results provided a
quantitative and qualitative basis for the key trends and fleet insights identified in this report. To
reach a national fleet audience, GNA conducted this survey between November 2019 and
January 2020 and received responses from 144 unique fleets. Outreach was conducted until
receiving a minimum of three responses across each of the fleet characteristics in Tables 10-12.
Participants were asked to respond to 14 multiple-choice and open-response questions about

Table 10: Online survey participants by fleet type

Fleet Type Count Fleet Type Count

Municipal/Shuttle 23 Heavy-duty - School bus 27

Heavy-duty - Short Haul 14 Heavy duty - Transit 31

Heavy-duty - Long Haul 5 Urban Delivery 5

Heavy-duty - Long/Short Haul 22 Utility Truck 14

Heavy-duty - Refuse 3

Grand Total 144

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their vehicle and service types, use of a variety of clean vehicle technologies, and their plans
to use these technologies in the next 24 months.
Table 11: Online survey Table 12: Online survey Table 13: Online survey responses by fuel-
participants by fleet status participants by fleet size technology type. The sum of responses
exceeds the number of responding fleets
because fleets were able to indicate
Fleet Sector Count Fleet Size Count multiple fuel-technologies in their responses.
“Other” includes fleets that self-identified as
government, municipal, school and
Private 29 0-50 33 transit, as a contractor supporting these fleet
types, or as being both public and private.
Public 80 51-100 19

For-Hire 21 101-500 33 Fuel-Technology Count

Other 14 501-1,000 13 Efficiency Products or 56

Services
Grand Total 144 1,001-10,000 36
Renewable Diesel 39
10,001- 7
100,000 Diesel- 49
Biodiesel Blends
>100,001 3
Compressed Natural 78
Grand Total 144 Gas

Liquified Natural Gas 23

Renewable Natural 30
Gas

Propane 39

Renewable Propane 4

Electricity 78

Hydrogen 16

Other 12

None 9

Interview Methodology
GNA interviewed 22 fleets who had experience using clean vehicle technology and renewable
fuels in the United States. Interviews consisted of 13 questions and were conducted by phone
between December 2019 and February 2020. Prior to their phone interviews, interviewees
completed the online survey.

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To achieve a cross section of results, interviews were conducted until receiving a
minimum number of responses across each of the fleet characteristics in Tables 14-16.
Furthermore, each fleet was interviewed about a minimum of two technologies (see Table 16),
effectively conducting at least two technology interviews per fleet. GNA included renewable
fuels (renewable diesel, biodiesel drop-in blends, renewable natural gas, renewable propane,
renewable electricity) in the interviews to understand potential differences by fleets operating
a technology on renewable energy (see Table 16). No interview respondent had used
renewable propane so it was not necessary to interview on that technology.

Table 14: Phone interview
participants by fleet status
Fleet Sector Count
Table 15: Phone interview Table 16: Interview responses by fuel-
participants by fleet size technology type. The sum of responses
exceeds the number of interviewed fleets
because fleets were interviewed on multiple
Fleet Size Count technology types, according to their use.

Private 8 0-50 0
Fuel-Technology Count
Public 8 51-100 1
Efficiency Products or 4
For-Hire 3 101-500 4 Services

Other 3 501-1,000 2 Renewable Diesel 5

Grand Total 22 1,001-10,000 9 Diesel- 5

Biodiesel Blends
10,001- 3
100,000 Compressed Natural 6
Gas
>100,001 3
Liquified Natural Gas 0
Grand Total 22
Renewable Natural 7
Gas

Propane 5

Renewable Propane 0

Electricity 13

Hydrogen 3

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