Sustainable fleets are at an inflection point

Companies and cities are increasingly adopting lower-carbon fleets — including trucks and buses that run off electricity, renewable diesel and renewable natural gas — according to a new report from the research team at Gladstein, Neandross and Associates (GNA).

It’s still early days for many of these markets, and sustainability goals remain one of the top drivers for fleets to buy these vehicles. But the metrics that fleet managers care about — total cost of ownership — are becoming more competitive for these lower-carbon vehicles, the GNA report found.

I read the analysis, which also covers diesel efficiency, natural gas and propane, and picked out these points that I thought were particularly interesting:

• Renewable diesel is winning fans: Fleet managers report satisfaction with the performance of renewable diesel, which can be dropped into diesel trucks and buses and can reduce greenhouse gas emissions by 65 percent. The amount of renewable diesel used in California tripled between 2015 to 2019 to 620 million gallons. However, fleet managers say the market is constrained by supply outside of California and Oregon.
• Diesel still dominates: GNA predicts diesel vehicles will continue to dominate fleets for at least a decade, especially in heavy-duty applications such as long-haul trucking. Thus efficiency tools — such as aerodynamic packages, anti-idling and driver education — are still important.
• Natural gas trucks are big but slowing: There are already 53,000 registered natural gas vehicles in the U.S., and 85 percent are used for heavy-duty applications such as garbage collection, transit and utility trucks. But natural gas trucks only reduce greenhouse gas emissions compared to diesel trucks by 11 percent, and regulators such as the California Air Resources Board have pushed the state’s fleets to adopt zero-emission vehicle options, such as electric.
• Renewable natural gas is growing fast: Renewable natural gas (RNG) can lower greenhouse gas emissions from fleets compared to diesel by between 60 and 300 percent depending on the source (yes, that’s carbon negative). Between 2015 and 2018, the consumption of renewable natural gas by natural gas fleets grew by 475 percent, and in 2019 in California, 80 percent of the natural gas used for transportation was renewable.
• But RNG constraints are real: Because the costs are high to capture and process renewable natural gas, the market essentially has been created by California’s low-carbon fuel standard (LCFS). States that want to create a similar market need to create their own LCFS.
• Don’t overlook propane: Propane is being used to power school buses that carry 1.2 million students in the U.S., although propane only reduces greenhouse gas emissions over diesel by 20 percent. The industry has been developing renewable propane, which is really only available in California.
• Electric trucks are moving forward: Thanks to big commitments by companies such as Amazon, FedEx and PepsiCo, U.S. deliveries and deployment of electric trucks are supposed to double between 2021 and 2022. Today, more than 20 automakers produce over 90 electric truck and bus models.
• But EV infrastructure challenges remain: Early market challenges include expensive upfront costs for vehicles, complicated and a lack of charging infrastructure and limited range. Fleets also can face both higher or lower costs of electricity in comparison to diesel, so most need to work with partners and use smart charging tools to make sure they’re charging during low cost times of day.

I’ll be highlighting zero- and low-carbon fleets during our upcoming VERGE 20 (virtual) conference, which will run the entire last week in October (Oct. 26-30).

This article is adapted from GreenBiz’s weekly newsletter, Transport Weekly, running Tuesdays. Subscribe here.