Alternative Fuels, Propulsion Poised for Growth in U.S. Fleets
Stronger government support and higher prices at the pump are driving increased fleet adoption of clean-vehicle technologies, according to new sustainability report.
Fuel prices are soaring. Not breaking news, I know, yet the almost-daily alerts citing new record highs for gasoline and diesel prices are still unsettling. Consumers and fleets alike are feeling the pinch at the pumps. Diesel fuel prices are at an all-time high, hitting an average $5.623 per gallon on May 9 – up nearly $2.44 compared to the same time a year ago, according to the U.S. Energy Information Administration.
National average prices at the pump were 19% higher in 2021 than in 2020, a factor that improves the economics for alternative fuels and propulsion systems, states this year’s State of Sustainable Fleets market report authored by clean-technology consulting firm Gladstein, Neandross & Associates (GNA). Daimler Truck North America, Penske Transportation Solutions and Shell Oil Co. are title sponsors of the report; Cummins is a supply chain sponsor.
“We are seeing an incredible acceleration in the investment being made from all sides of the alternative-fuel vehicle market driven by increasing commitments to environmental sustainability and carbon reduction and to find more cost-effective transportation options given today’s record-breaking gasoline and diesel fuel prices,” said Erik Neandross, CEO of GNA. “In every sector, fleets are increasingly turning to a spectrum of advanced clean-vehicle technologies and low-carbon fuels to not only meet their sustainability goals but improve their fleet’s bottom line.”
Released at the ACT Expo in Long Beach, California, the report found that nearly 85% of the almost 250 U.S.-based fleets surveyed plan to grow their use of clean-vehicle technologies over the next five years. Increased adoption is being driven by record levels of government funding and legislative support at state and federal levels, the 2022 report states. Available public incentives for clean fuels and vehicles will increase to about $20 billion annually across more than 230 programs over the next few years, according to the report – nearly seven times the previous average of $3 billion.
A key finding in State of Sustainable Fleets is that fleet demand for battery-electric vehicles (BEVs) is “enormous” and continues to exceed availability. Scheduled medium- and heavy-duty BEV deployments are expected to increase from dozens to hundreds within the next two years. The school-bus sector in the U.S. already is experiencing early scale, the report noted, with nearly 1,800 battery-electric buses ordered or deployed by more than 350 school fleets to date. An emerging trend is vehicle OEMs becoming more involved in the battery-electric ecosystem, providing value-add services to fleets to make the transition easier.
Compressed natural gas (CNG) and propane remain more-affordable options, as fleets continue to see significant fuel savings compared to diesel. Transit buses, straight trucks (including refuse) and Class 8 tractors are driving CNG vehicle sales, leading growth in registrations of natural gas vehicles by 3% from 2020 to 2021, the report found. Propane-powered trucks are most often used in smaller fleets run by states, counties, and municipalities.
Another key finding: Renewable diesel (RD) growth is very strong. By 2025, U.S. production capacity for RD is forecasted to exceed 5 billion gallons annually – a sixfold increase from 2021 and enough to support 10% of the country’s current diesel demand, according to the report.
And then there’s hydrogen. Orders quadrupled for heavy-duty fuel cell vehicles in 2021, totaling 143, led by transit, the report found. Dozens of grant-funded fuel cell electric tractors are now on order by fleets. No public hydrogen stations were open outside of California in 2021, but an additional 57 stations, primarily for light-duty hydrogen vehicles, are planned for California and other states in the next few years.
These and other diesel alternatives are regularly detailed on www.sae.org, including a couple recent articles on ammonia and HVO (hydrotreated vegetable oil). Reading more about the great strides being made perhaps can provide some solace the next time you’re at the pump.
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