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Diversification Key for Sustainable Fleets

Survey finds that fleets pursuing multiple technology pathways are well positioned to absorb tariff disruptions, federal funding cuts and prolonged freight market weakness.

Key points

Fleets using multiple technology pathways are well positioned to handle market disruptions and funding cuts.

Renewable fuels replaced over seventy percent of conventional diesel used in California transportation.

Hydrogen vehicles faced major setbacks in 2025, including cancelled funding and dropped registrations.

We hear it often at industry events, in keynote speeches and during expert panel discussions: There is no silver bullet.

Peter Voorhoeve, president of Volvo Trucks North America, says as much in a recent Q&A with SAE Media . “Electric is one solution, but biodiesel is another solution, and hydrogen is, too. So we have these different fuel solutions to get to better sustainability.”

That tenet pretty much summarizes the results of the seventh annual State of Sustainable Fleets Market Brief released at ACT Expo 2026 in Las Vegas. Authored by TRC Companies, the same firm that organizes the ACT conference, the report found that fleets pursuing multiple technology pathways are well positioned to absorb tariff disruptions, federal funding cuts and prolonged freight market weakness.

TRC stresses that external shocks can rapidly change the economics of any single technology, including conventional diesel, thus making powertrain and fuel diversification “both a financial strategy and a risk management imperative.” An example: diesel averaged $3.72 per gallon nationally at public stations in 2025; during the first four weeks of the Iran war, the average price was $5.18.

Here are a few of the takeaways from the 2026 Market Brief.

Renewable fuels – The EPA finalized Renewable Fuel Standard volume obligations for 2026 and 2027 in April 2026, requiring about a 60% increase in biodiesel (BD) and renewable diesel (RD) production and use compared to 2025 levels, which TRC calls “a major structural tailwind for renewable fuel adoption.” RD and BD combined to replace 74% of conventional diesel used in California transportation in 2024, the report states, and 71% in the first three quarters of 2025. More than half of the fleet survey respondents (56%) now report using RD or BD, with the adoption of B99 biodiesel expanding in 2025.

Hydrogen funding took a big hit in 2025. (TRC)

Natural gas/RNG – The U.S. leads the world in commercial use of compressed and liquefied natural gas (CNG and LNG) for trucking. Total MD/HD natural gas vehicle registrations fell 15% in 2025, due partly to the freight recession and a transition period as fleets shift to 15-liter platforms, notably the Cummins X15N engine that completed its first full year of commercial availability in 2025. Straight trucks comprised 82% of 2025 NGV registrations, followed by transit buses (10%) and tractor trucks (7%), according to S&P Global Mobility data.

Renewable natural gas (RNG) use continues to grow. RNG accounted for 97% of all NG fuel used in California transportation in 2025. Among NGV-using fleets in the survey, 65% report RNG use, which they estimate accounts for 78% of their total fueling volume.

Propane – The propane vehicle fleet grew 3.1% in 2025, with school bus and upfitter markets continuing as key adoption sectors. The fuel delivered operational cost savings for 39% of propane fleet operators compared to the vehicles they replaced. Renewable propane use surged: 32% of propane-using fleets reported using it in 2025, up from 10% in 2023.

Electric – MD/HD BEV registrations increased in 2025, led by pickup trucks and delivery vans. MDV registrations were up 21%, setting a record. Fleets operating MD BEVs and HD yard electric tractors reported TCO benefits compared to the vehicles they replaced.

BEVs now represent 22% of China’s HD truck market, and battery costs in that market have fallen to $90/kWh – a level widely cited as cost-competitive with conventional powertrains, the report states. Near-term U.S. growth isn’t as rosy, as EV tax credits expire and manufacturer production pivots. However, the report cites data from a California funding program and other signals that indicate Class 8 truck deployments should exceed 1,000 annual deployments for the first time.

Hydrogen – 2025 was a tough year for the hydrogen vehicle sector. Hydrogen fuel cell EV registrations dropped 12%, much of the Hydrogen Hub funding was cancelled, and two prominent Class 8 FCEV manufacturers exited the market: Nikola and Hyzon. High fuel costs – fleets reported $18.86/kg in 2025 – and inadequate infrastructure remain big challenges to H2 adoption.

Hyundai, Toyota, Honda and Cummins continue to advance fuel cell modules and vehicle programs. Coordinated government investment remains the defining variable for hydrogen’s commercial future in freight, the report concludes.

A diversified future that’s still being fashioned.

Topics:
Alternative Fuels Commercial Vehicles Energy Government Renewable Energy Solar Power Trucks

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