Renewable fuel sources are becoming more and more critical to organizations’ sustainability plans.
“OEMs are increasing their factory electric vehicle offerings, for example, as opposed to aftermarket vehicle modifications. This continues to have a positive adoption rate impact. Other fuel-saving efforts include electrification of truck systems, such as power take-off (PTO) operations and the incorporation of idle management technology. NTEA’s 2020 Fleet Purchasing Outlook showed an 11% gain from 2019 to 2020 for idle- management technology. Bio and renewable diesel blends are popular fuel types, as they can be adopted as drop-in fuels with no vehicle retrofitting or fueling infrastructure required,” said Christopher Lyon, director of Fleet Relations for NTEA – The Association for the Work Truck Industry.
Trends in Alternative Fuels
The biodiesel and renewable diesel industry is on an upward trajectory to see immense growth by 2030, or even before, according to the National Biodiesel Board (NBB).
“The industry has a vision to exceed 6-billion gallons by 2030 and with advancements in feedstocks, 15-billion gallons by 2050. As carbon policies around the country begin to take hold, we see tremendous opportunities for growth of low-carbon fuels such as biodiesel, renewable diesel, and renewable jet fuel,” said Scott Fenwick, technical director for the National Biodiesel Board (NBB).
Key driving factors for biodiesel include societal pushes for reduced carbon emissions, new technology, structural shifts in the petroleum sector, and the ability to meet carbon reduction goals with biomass-based diesel fuels as the lowest-cost option in the market.
“One only needs to look to California to see these factors in action. Currently, biomass-based diesel accounts for 45% of all Low Carbon Fuel Standard (LCFS) credits generated there,” Fenwick noted.
Slowing climate change is emerging as, arguably, the world’s greatest challenge.
“Climate change has become a serious business problem too, and increasingly leading companies are putting their brands on the line with aggressive net zero-carbon emission commitments. The low-carbon motor fuels we provide directly to fleets, including renewable diesel, biodiesel, and green gasoline, are increasingly recognized as a very effective alternative to traditional high-carbon fuels for existing fleet operations,” said Gene Gebolys, CEO of World Energy.
Gebolys shared that businesses are compelled to decarbonize for a wide variety of reasons ranging from the increasing Environmental, Social, and Governance (ESG) sensitivity in capital markets, changing consumer preferences, especially among young people, and intensifying regulatory pressure.
“So, throughout organizations, people are being asked to find effective solutions. In fleet operations, there is simply no better, easier, or faster way to cut carbon than to switch to low-carbon fuels,” Gebolys said.
Electrification continues to gain traction due to increasing end-user demand.
“States such as California have heavy legislation and incentives driving electrification. In many cases, fleets that allow for electrification can see decreases in their total cost of ownership,” said Lyon of the NTEA.
Vic Shao, CEO & Founder of AMPLY Power, also noted California’s acceleration toward a zero-emission transportation future.
“We see many fleets trending toward electric fleet adoption across the board before mandates kick in,” Shao said, explaining that the state aims to restrict new passenger car sales to electric by 2035. All new buses sold in California must be electric by 2029, and transit fleets must be fully electric by 2040.
“Finally, the state is also requiring truck manufacturers to transition from diesel trucks and vans to electric zero-emission trucks beginning in four short years, 2024. By 2045, every new truck sold in California must be zero-emission,” he added.
With the lifetime of medium- and heavy-duty vehicles being 20 years or more, Shao noted that it makes sense for fleets to start transitioning to electric ahead of these mandates.
“Industry giants such as Amazon are moving head-first into electric adoption, by ordering 100,000 electric delivery trucks, doubling the fleet in Europe and North America, and leading transportation agencies like the Los Angeles Department of Transportation (LADOT) who placed the largest U.S. electric bus order in U.S. history back in February,” Shao said.
Many see electric vehicles as the future of transportation.
“Electric vehicles are more economical, require less maintenance, and are better for the environment. That’s why we’re starting to see major vehicle manufacturers introduce new EV models, including trucks,” said Nate Valaik, e-Mobility product marketing manager for Gilbarco Veeder-Root. “Regulation and government incentives are driving some of this, but recent reductions in battery cost and improvements in battery efficiency are probably bigger drivers of electrification, making EVs a more economical choice for fleet managers.”
For fleet owners, there is a need to operate as efficiently as possible while keeping costs low.
According to David Peterson, director, Fleet Solutions for ChargePoint, fleets are beginning to see the benefits of electrifying due to three key factors:
- Fuel and maintenance cost savings.
- Energy management opportunities.
- Meeting consumer or customer demand.
Beyond electricity coming in at a lower cost than fossil fuels, the cost of batteries is also dropping due to improvements in material sciences, chemical composition, and production cost optimization.
“This gives fleets the option of lower overall costs for a vehicle. Additionally, increased government mandates mean increased fleet owner incentives to electrify,” said Shao of AMPLY Power.
An added benefit of electric vehicles is the vehicle and operational insight.
“Advancements in modeling and tracking software are now providing enhanced visibility into fleet operations including fuel costs per time period, real-time charge and schedule tracking, and override features that allow operators to accept higher charges if fleets need to be charged quickly when energy costs are at their highest,” Shao said.
Valaik is excited about several electrification trends playing out in the work truck space.
“First, an array of new electric trucks are arriving in the market in 2021 and 2022. So far, vehicle availability has been the biggest barrier to electrifying truck fleets. That’s about to change with the introduction of a host of new medium and heavy-duty truck EVs,” he noted. “Second, we already see how adopting sedan electric vehicles (EVs) lowers total cost of ownership (TCO) and improves fleet economics. What’s exciting is this trend will apply in the truck EV space.”
Additionally, several government regulations and incentives are encouraging fleets to adopt electric vehicles.
“There are plenty of sources of funding for fleet managers looking to add EVs to their fleet quickly and affordably,” Valaik added.
As more fleets transition, some of the barriers to adoption have included limited vehicle availability, grid capabilities, and incentives.
“As fleets are ramping toward electrification, those once limiting factors are being removed,” Petersen said. “Every type of vehicle (Class 1-8, on-road, and off-road) has a battery-electric offering currently available or coming soon from nearly every OEM; this is an important trend as it means manufacturers firmly believe that electric vehicles (EV) will be increasingly important to their customers.”
Utility incentive programs dedicated to developing fleet charging infrastructure are also emerging, just as they did for light-duty passenger vehicles.
“More and more fleets are announcing the intention to electrify last-mile routes and logistics (like yard tractors) appear to be an EV hotspot due to an almost ideal product-market fit due to several factors including favorable customer economics and use case,” Peterson said.
ChargePoint had forecast 2020 as the year of the electric fleet pilot, and, according to the company, that has been the case.
“Fleet electrification continues to accelerate, and not just in the form of a pilot. As delivery companies are accelerating their electrification initiatives, motivated in part by government regulations and organization sustainability targets, fleets are also working to meet shifting consumer behavior, as the demand for goods to be delivered to the home increases, buoyed by shelter in place orders as a result of the pandemic,” Peterson added.
Made from corn and other plant materials, ethanol is approved for use in 2001 model-year and newer light-duty conventional gas vehicles. According to the U.S. Department of Energy, more than 98% of gasoline in the U.S. contains some ethanol.
Available as E-85 (also known as flex-fuel), other variations, such as E-15, are also increasing in overall market presence.
“The availability of ethanol is growing, and usage is only down currently due to lower VMT and COVID,” said Robert White, VP of Industry Relations for the Renewable Fuels Association. “Interest is growing for a lower-emission, lower-carbon, renewable, homegrown fuel. There are several programs out there driving this, but it normally starts with public policy and consumer interest.”
According to NGVAmerica, pricing stability at a low cost, a domestic fuel abundance, and increasing renewable supply are some of the top trends for natural gas as a vehicle fuel.
“Cost reductions and ESG consumer demand are the primary factors driving these trends. Fleets seek more sustainable, but also affordable and commercially scalable, transport solutions,” said Paul Sandsted, director of Technology & Sustainability for NGVAmerica.
Currently, the Propane Education & Research Council (PERC) is seeing growing numbers of new users trying propane autogas for the first time in their fleets.
“Perhaps more encouraging, we’re seeing the mjaority of propane autogas users become repeat adopters. Once a fleet director adopts one vehicle and begins to realize all the benefits — lower fuel and maintenance costs, reduced emissions, optimized performance, and the lowest fueling infrastructure costs of any energy source — they want to transition more vehicles to propane autogas to maximize those benefits,” said Steve Whaley, director of autogas business development for PERC. “Fleets are facing pressure to create a cleaner and healthier environment for their communities.
Fuel Type Popularity & Vocational Fleet Usage
The fleet industry predominantly adopts advanced technology where regulations, such as from California Air Resources Board, require.
“Certain vocations align with specific fuel types and technologies. For example, in a high-idle vocation utilizing bucket trucks, fleets may benefit from electrifying bucket and equipment operations due to drive and duty cycles, which require heavier power output when stationary. Electrifying sub-systems and equipment can mitigate the primary engine’s need to consume fuel and export power when in use,” said Lyon of the NTEA.
The Green Truck Association (GTA) advocates for fuel-neutrality with a focus on matching technological efficiency to vehicle application.
“Considerations include range factors, payload, drive and duty cycles, available technologies, and ROI. It’s important that fleets understand these factors and their compatibility with different fuel types,” Lyon added.
Biodiesel and renewable diesel are available nationwide, and most diesel retail locations contain some level of biodiesel content.
“While we are seeing strong consumer acceptance and use coast to coast, the renewable fuel is mainly used in markets with ambitious carbon reduction goals. As of 2020, states such as California now rely on biodiesel and renewable diesel for over 23% of their diesel demand. Since California is one of the largest petroleum markets in the country, that state alone represents nearly a billion gallons of avoided fossil fuels each year,” noted Fenwick of the NBB.
California tends to be the trendsetter state for what will eventually become widely accepted.
“The Golden State’s LCFS program has driven a boom in advanced biofuel use during the last few years. But many other states and provinces are now following suit from coast-to-coast,” said Gebolys of World Energy.
Biodiesel and renewable diesel can be used in any compression-ignition (diesel) engine and in any application.
“Our favorite stories to tell are our user success stories. From passenger vehicles to bulldozers, from street sweepers to school buses, from snow plows to tractor-trailers, and even in boats and home heating systems, the use of biodiesel is helping thousands of fleets and motorists reduce carbon emissions and clear the air. Biodiesel is here and now, powering vehicles and equipment across the country in all kinds of weather and conditions,” Fenwick said.
Some user examples include DC Public Works, Lambert St. Louis International Airport, Harvard, New York City municipalities, and the City of Seattle.
Biodiesel fuels are especially well suited for diesel dominated fleets with significant concentrations of centrally fueled equipment.
“These are the type of operations in which we can most easily and seamlessly lower a fleet’s carbon footprint without any noticeable change to current operations,” Gebolys said.
As for electric, most projects have been in California and New York where government mandates and incentives have been strongest, and utility prices and electrification programs offer tremendous benefits,” according to Shao of AMPLY Power.
“Electricity’s popularity as a fuel is driven by the suitability of the charging system and the vehicle to the use case. Off-road, last-mile, regional, and vocational applications are where we see the most traction with EVs. The industry is still working on suitable solutions for long-haul applications, especially those with a short vehicle turnaround time,” said Peterson of ChargePoint.
Gilbarco Veeder-Root sees electrification taking off across the U.S.
“Growth is mostly concentrated in coastal areas, such as California or Oregon, for example, but nearly every state is experiencing an uptick in EV adoption,” said Valaik of Gilbarco Veeder-Root.
Public sector and commercial fleets are the main priority for most vehicle electrification projects and providers.
“However, we anticipate that we will soon begin to look at heavy-duty truck fleets and light-duty fleets as we begin to see more programs geared towards electrifying passenger transport fleets such as Lyft,” Shao said.
In an early market, some medium and heavy-duty fleets are limited by vehicle availability, not necessarily EV charging infrastructure, noted Peterson, who added that “As more vehicles hit roadways, we will see that change.”
Many vocational fleets are ideal candidates for electrification, with some moving faster than others.
“Other fleets, including school buses, delivery vans, refuse trucks, and municipal fleets, are electrifying too. Fleets with fixed-route patterns and predictable overnight dwell times are moving the fastest. As battery technology improves and more vehicle models become available, we expect fleets with less predictable routes to make the transition,” Valaik said.
Originally a fuel of the Midwest, Ethanol has followed the population centers and continues to expand its footprint.
“Light- and medium-duty vehicles are typically the most popular options and make the most sense for fuel procurement and accessibility,” said White of the Renewable Fuels Association.
Compressed natural gas (CNG) has become a go-to choice for fleets in the refuse, transit, and increasingly, trucking industries.
“Regionally, we have seen significant adoption in the Western states, but also Florida and the Northeast, so it really is a fuel that can meet many different market needs and regional differences such as weather and site considerations,” said Sahar Kamali, director of Business Development for Clean Energy Renewables.
Sandsted of NGVAmerica seconded those vocations. “Natural gas is currently the most popular within refuse fleets, and transit agencies across the country have increasingly relied on natural gas buses for their dependability, resiliency, and 1:1 replacement capability — meaning you can replace one diesel bus with a single natural gas bus without sacrificing power, torque, range, or reliability,” Sandsted noted.
As with other fuels, currently, most incentives have been available in California, with the LCFS program, which has led to a greater push in green energy expansion in this space.
Regional return-to-base fleets of all sizes are ideal for natural gas because of the additional cost savings associated with having your own CNG fueling station and the simplicity of overnight fueling.
The CNG refueling experience can be through fast-fill (timing like a traditional diesel or gasoline refueling experience) or slow overnight (called time-fill).
“Emerging adsorbed natural gas technology is an upcoming game changer for light- and medium-duty fleets. With less compression need, refueling costs are minimal. And with dual fuel options, smaller private fleets can enjoy both the sustainability benefits of natural gas and the assurance of super-long range offered by incumbent gas or diesel,” Sandsted added.
Millions of propane autogas vehicles are used all over the world, and propane is the most popular vehicle fuel on the planet besides gasoline and diesel. Because propane autogas vehicles average only 15% more than traditional vehicle costs, government grants and subsidies are not required to produce long term sustainable fleet cost savings.
Propane also performs well in all climates and seasonss, according to PERC.
“It is especially beneficial for areas that experience freezing temperatures. Propane autogas engines provide reliable performance, regardless of the temperature, and don’t require added fluids or engine block heaters, like diesel fleets. This saves fleets from additional costs every winter,” said Whaley of PERC.
Propane autogas is great for vocational fleets with medium-duty Class 3-7 vehicles that run regional routes, even with mileage as high as 300-plus miles per day.
“By displacing these fuels with propane autogas, Class 3-7 fleets can greatly reduce overall emissions in their communities. This includes fleets like package and parcel delivery, food and beverage delivery, and paratransit,” Whaley said.